By way of background, the participant began working for Coca-Cola Bottling Co. of New York (CCBCNY) in November 1971 and participated in the Soft Drink and Brewery Workers Union Local 812 retirement plan. He worked for CCBCNY as a union employee for nearly 26 years, until he was promoted to a nonunion position in March 1997. At that time, he ceased to accrue benefits under the union's plan and became a participant in CCBCNY's retirement plan for nonunion employees. CCBCNY's plan for nonunion employees stated that benefits were subject to a reduction for any benefit an employee was eligible to receive on account of participation in a union retirement agreement to which the company contributed. The participant argued that this provision did not apply to him because of an oral agreement negotiated prior to his accepting the nonunion position. Under that oral agreement, CCBCNY allegedly agreed to pay him benefits based on a hiring date of November 1971 with no offset of any union benefits. The participant also alleged he received benefit statements over the course of 10 years that confirmed this agreement. However, the statements included disclaimers that benefits would be calculated in accordance with plan documents.
In denying Coke's motion for summary judgment as to the participant's benefit claim under ERISA Section 502(a)(1)(B), the court noted that the U.S. Court of Appeals for the Second Circuit has held that oral promises generally are unenforceable under ERISA. However, the court said material issues of fact remained that prevented entering summary judgment for CCE on Giordano's benefit claim. However, the court noted there are exceptions for promissory or equitable estoppel where “extraordinary circumstances” are shown. Facts demonstrating extraordinary circumstances must go beyond a showing of reliance, harm, or injustice, the court said. The court said that regardless of whether the case involved promissory or equitable estoppel, the alleged oral agreement and the 10 years of statements that appeared to confirm the terms of the alleged agreement presented issues of material fact and inferred that they amounted to extraordinary circumstances, if proven. The court added that issues of fact remained regarding the discrepancy between the benefit estimates and the final benefit.