The U.S. District Court for the Southern District of New York has provided clear and useful guidance on a common ERISA question: what constitutes an ERISA-governed benefit plan for severance benefits? In Okun v. Montefiore Medical Center, No. 11 Civ. 9615 (PGG)(S.D.N.Y. Sep. 10, 2013), the court reviewed a severance package for a pediatrician employed by a medical center and held that the arrangement did not constitute an ERISA-governed plan. In doing so, the Okuncourt outlined the criteria that federal courts have developed to determine ERISA's application to severance policies.
The Background. Plaintiff Alexander Okun ("Dr. Okun") was employed for 23 years as a pediatrician at the Montefiore Medical Center ("Montefiore"), and as an associate professor of pediatrics at the affiliated Einstein College of Medicine. Montefiore had a severance policy that did not require severance payments when an employee was terminated for cause. The policy also provided that it could be terminated or amended at any time by Montefiore. On May 1, 2011, Dr. Okun gave notice that he had accepted a position in Wisconsin, and that he would leave Montefiore in September 2011. On May 13, 2011, Montefiore terminated Dr. Okun "for cause" on grounds that Dr. Okun later disputed. As a result of the "for cause" termination, Montefiore did not pay Dr. Okun any benefits pursuant to its severance policy.
We use cookies on our website. Some of them are essential for the operation of the site, while others help us to improve this site and the user experience (tracking cookies). You can decide for yourself whether you want to allow cookies or not. Please note that if you reject them, you may not be able to use all the functionalities of the site.
