Anheuser-Busch Wins Change in Control Benefits Case

The plaintiffs in the case are former employees of Metal Container Corp. (MCC), a former subsidiary of Anheuser-Busch Companies (ABC). ABC was acquired by InBev, N.V., a Belgian beverage company, in 2008. MCC was later sold to Ball Corp. on or about October 1, 2009, and plaintiffs were then employed by Ball.  

Key to the decision of the U.S. District Court for the Southern District of Ohio was evidence of the intent of the drafters of Section 19.11 of the Plan entitled “Change in Control,” including minutes of the Board of Directors and the pension committee of the Board, which the pension committee used for interpreting ambiguous terms of the plan. The notes indicated that Tom Larson, an Anheuser-Busch employee who was involved in the discussions surrounding the adoption of Section 19.11, said the purpose of the provision was to preserve plan assets for employees and to “compensate for [a] loss of job.”   

He stated that “if [the employee] was fired [the employee would be entitled to an] enhanced benefit.” The pension committee concluded that the “minutes indicate that the enhanced benefit was intended for individuals who were ‘displaced’ and ‘whose employment is involuntarily terminated’ within three years of a change in control.”  The committee observed that the “focus of Section 19.11(f) appears to be the provision of enhanced benefits to those who suffer a loss of employment following a change in control.”

(Cont’d…)

U.S. District Judge James L. Graham determined that the committee’s consideration of the drafter’s intent, as well as other provisions of the plan and an opinion letter provided by outside counsel which “advised that there was a reasonable basis for the determination that individuals who were employed by a successor organization in the same capacity and with substantially equivalent wages and benefits were not involuntarily terminated within the meaning of Section 19.11” showed its decision to deny enhanced benefits to the plaintiffs was reasonable.  

The plaintiffs made claims for benefits under Section 19.11 (see “Court Certifies Class in ‘Change in Control’ Case”), which provided that the “Accrued Benefit of each Participant who is actively employed by a participating employer as of the date of a Change in Control shall be fully vested.” The plan further provided that during the three years following a change in control, formulas for determining benefits and the forms of payments available under the plan shall not be reduced. It also offered an increased benefit for participants who were involuntarily terminated within three years of the change in control.    

The plaintiffs argue that because they were no longer employed by an Anheuser Busch-affiliated company within three years of its acquisition by InBev, they had been involuntarily terminated. However, their claims for benefits were denied because they had accepted employment with Ball Corp.   

The court’s latest opinion is here.