O'Connor v. Commonwealth Gas Co.

United States Court of Appeals
For the First Circuit

No. 00-1798

JOSEPH O’CONNOR,

Plaintiff, Appellant,
____________________

PETER HORNING,

Plaintiff,

v.

COMMONWEALTH GAS COMPANY, JOHN WILLIAMS,
COMMONWEALTH ENERGY SYSTEM, AND WILLIAM POIST,

Defendants, Appellees.

No. 00-1799

JOSEPH O’CONNOR,

Plaintiff,
____________________

PETER HORNING,

Plaintiff, Appellant,

v.

COMMONWEALTH GAS COMPANY, JOHN WILLIAMS,
COMMONWEALTH ENERGY SYSTEM, AND WILLIAM POIST,

Defendants, Appellees.
 APPEALS FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Morris E. Lasker,* Senior U.S. District Judge]

Before

Selya, Circuit Judge,
Coffin, Senior Circuit Judge,
and Lipez, Circuit Judge.

David Miller for appellants.
David S. Rubin, with whom Christopher Novello was on brief,
for appellees

May 30, 2001

*Of the Southern District of New York, sitting by
designation.
 COFFIN, Senior Circuit Judge. This case requires us

to revisit the criteria that bring an early retirement incentive

plan within the coverage of the Employee Retirement Income

Security Act of 1974 (ERISA), codified as amended at 29 U.S.C.

§§ 1001-1416 and in scattered sections of Title 26. Appellants

O'Connor and Horning, retirees of appellee Commonwealth Gas

Company (CGC), appeal from an adverse summary judgment in which

the district court held that CGC's 1997 Personnel Reduction

Program (PRP), an early retirement incentive, was an ERISA plan

that preempted various state law claims.1 We conclude that,

because the PRP was little more than a lump-sum severance

package, it was not an ERISA-covered plan. Consequently, we

reverse and remand so that the district court may consider

whether to assert supplemental jurisdiction and address the

state claims.

BACKGROUND

Because our determination turns on a pure question of

law, we chronicle the underlying dispute briefly and refer

readers to the district court's published ruling for a more

1 The court also found all but one of the alleged
misrepresentations made by CGC and its chief human resources
officer, appellee Williams, to be immaterial, and hence not a
breach of the fiduciary duty owed by ERISA plan administrators
to their beneficiaries. See 29 U.S.C. §§ 1109, 1132. Given our
disposition, Williams' personal liability is no longer at issue.
Therefore, we refer to appellees simply as CGC.

-3-
detailed recitation of the facts. See O'Connor v. Commonwealth

Gas Co., 85 F. Supp. 2d 49, 52-53 (D. Mass. 2000).

In January 1997, CGC decided to merge with its

counterpart utility, the Commonwealth Electric Company, which

along with CGC was a subsidiary of a common holding company,

Commonwealth Energy Systems (CES). The pending consolidation

was first disclosed to senior officers of CES and later

discussed at a meeting of the CES board as a means of reducing

the total workforce. By a letter to employees dated February 6,

1997, the merger was publicly announced, as was CES's intention

to eliminate 15 percent of the workforce, which it hoped to

accomplish "through attrition and a personnel reduction program

[it] plan[ned] to offer to certain employees." The first

meeting to develop that plan occurred in February; a draft was

created by mid-March and finalized on May 13, the effective date

of the PRP.

The PRP contained several benefits for employees who

opted to retire: a severance bonus, pension credit, payment of

COBRA premiums, and reimbursement for educational assistance and

outplacement services. In exchange, employees who elected to

step down early were required to sign releases, non-competition

and confidentiality agreements, and to forego their annual bonus

for the year in which they opted to retire. This deal was

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offered to all non-officer employees during a fifteen-week

period in the summer of 1997. CGC reserved the right to limit

participation to 300 employees, and to delay the retirement of

any employee who elected to participate for up to one year.

Further details of the plan pertinent to our analysis will be

outlined in the discussion.

Appellants O'Connor and Horning, both long-time

employees of CGC, were denied benefits under the PRP after

retiring on February 1 and January 1, 1997, respectively.2 They

brought this action claiming that material misrepresentations

made by agents of CGC misled them into retiring before the

effective date of the PRP. The district court found most of the

alleged misstatements to be immaterial because they were made

before the PRP was under serious consideration.3 See O'Connor,

85 F. Supp. 2d at 59-61. We need not address the timing or

materiality of the alleged misrepresentations because our

holding that the PRP was not an ERISA plan moots those issues;

2 Horning initially gave notice to retire effective
February 1, but stepped down a month early after being assured
that there was no incentive plan forthcoming.
3 One of the misstatements made to O'Connor was found to
be actionable as an affirmative misrepresentation; after a bench
trial on that breach of fiduciary duty claim, judgment was
entered in favor of CGC. That ruling was not appealed.

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absent an ERISA plan, CGC owed no fiduciary obligations to

appellants under federal law.4

After initially dismissing appellants' state common law

claims as preempted because both parties agreed at that time the

PRP was an ERISA plan, the district court reconsidered that

issue at length in its summary judgment ruling, responding to

appellants' opposition. See O'Connor, 85 F. Supp. 2d at 53-59.

Recognizing that the severance bonus did not implicate ERISA,

the court nevertheless held that the "composite" constructed

from the other elements of the PRP coupled with CGC's intent

made the PRP a covered plan. Id. at 53. Our review leads us to

the opposite conclusion.

We review de novo a district court's summary judgment

determination that a plan is governed by ERISA. Rodowicz v.

Mass. Mut. Life Ins. Co., 192 F.3d 162, 170, amended by 195 F.3d

4 The court also dismissed appellants' federal common law
claims of equitable estoppel, fraud, and negligent
misrepresentation as duplicative of the ERISA claim. O'Connor,
85 F. Supp. 2d at 61-62. Although we have recognized our
equitable powers to fashion a common law remedy through
"interstitial lawmaking" where ERISA does not provide one, e.g.
Vartanian v. Monsanto, 14 F.3d 697, 703 (1st Cir. 1994), this is
not the appropriate case in which to do so. See Mauser v.
Raytheon Co., 239 F.3d 51, 57 (1st Cir. 2001) ("[W]e must
exercise caution in creating new common law rules for pension
plans; we should only act when there is, in fact, a gap in the
structure of ERISA or in the existing federal common law
relating to ERISA."). Because we conclude that there was no
ERISA plan, we would be hard-pressed to extend the protections
of the statute.

-6-
65 (1st Cir. 1999); New England Mut. Life Ins. Co. v. Baig, 166

F.3d 1, 3 (1st Cir. 1999); cf. Belanger v. Wyman-Gordon Co., 71

F.3d 451, 453-54 (1st Cir. 1995) (applying clear error standard

to review of post-trial determination).5

DISCUSSION

Before dissecting the constituent elements of the PRP,

we review the legal framework. Since the statutory language has

proven to be unhelpful,6 we have relied on case law to discern

when a benefit program constitutes an ERISA plan. In Fort

Halifax, the Court made clear that a given plan must be

evaluated in light of Congress' purposes in enacting ERISA. 454

U.S. at 8. Paramount among those aims was to safeguard employee

interests by reducing the threat of abuse or mismanagement of

funds. Massachusetts v. Morash, 490 U.S. 107, 115 (1989) ("In

enacting ERISA, Congress' primary concern was with the

5 Although this standard was the source of some confusion
in the district court, see O'Connor, 85 F. Supp. 2d at 55 n.6,
the mix-up appears to have stemmed from a failure fully to
appreciate that Belanger was a post-trial appeal, whereas
Rodowicz and Baig were appeals from summary judgment orders.
6 As the Supreme Court has recognized, the statutory
definition of an "employee pension benefit plan" is
tautological, defining an ERISA plan as "any plan, fund, or
program . . . that by its express terms or as a result of
surrounding circumstances . . . provides retirement income to
employees." 29 U.S.C. § 1002(2)(A); see Fort Halifax Packing
Co. v. Coyne, 482 U.S. 1, 8-9 (1987); see also Demars v. Cigna
Corp., 173 F.3d 443, 445 (1st Cir. 1999); Belanger, 71 F.3d at
454.

-7-
mismanagement of funds accumulated to finance employee benefits

and the failure to pay employees benefits from accumulated

funds."); see also Demars, 173 F.3d at 446 ("Congress wanted to

safeguard employee interests by reducing the threat of abuse or

mismanagement of funds that had been accumulated to finance

employee benefits . . . ."); Belanger, 71 F.3d at 454 ("ERISA's

substantive protections are intended to safeguard the financial

integrity of employee benefit funds, to permit employee

monitoring of earmarked assets, and to ensure that employers'

promises are kept."); accord Baig, 166 F.3d at 3. It is by

gauging the level of employer oversight over pension funds that

the "plan" determination must be made.

In evaluating whether a given program falls under

ERISA, we have looked to "'the nature and extent of an

employer's benefit obligations.'" Rodowicz, 192 F.3d at 170

(quoting Belanger, 71 F.3d at 454). Those obligations are the

touchstone of the determination: if they require an ongoing

administrative scheme that is subject to mismanagement, then

they will more likely constitute an ERISA plan; but if the

benefit obligations are merely a one-shot, take-it-or-leave-it

incentive, they are less likely to be covered. Particularly

germane to assessing an employer's obligations is the amount of

discretion wielded in implementing them. Where subjective

-8-
judgments would call upon the integrity of an employer's

administration, the fiduciary duty imposed by ERISA is vital.

But where benefit obligations are administered by a mechanical

formula that contemplates no exercise of discretion, the need

for ERISA's protections is diminished.

The purported "plan" at issue in Fort Halifax is

illustrative. It was a one-time, lump-sum severance benefit,

which the Court held did not constitute an ERISA plan because it

did not implicate the employer's "administrative integrity."

Id. at 15 ("The focus of [ERISA] is on the administrative

integrity of benefit plans -- which presumes that some type of

administrative activity is taking place."); see also Baig, 166

F.3d at 4 ("[W]e will be inclined to find a plan where there are

elements that 'involve administrative activity potentially

subject to employer abuse.'" (quoting Fort Halifax, 482 U.S. at

16)); Belanger, 71 F.3d at 454 ("[O]ngoing investments and

obligations are uniquely vulnerable to employer abuse or

employer carelessness, and thus require ERISA's special

prophylaxis.").

The Fort Halifax Court also emphasized that "Congress

pre-empted state laws relating to plans, rather than simply to

benefits." Id. at 11-12 (emphasis in original). It

distinguished between plans, under which benefits are

-9-
distributed, and benefits because "[o]nly 'plans' involve

administrative activity potentially subject to employer abuse."

Id. at 16. We must therefore evaluate a purported plan like the

PRP as a unified whole.

The determination of what constitutes an ERISA plan

thus turns most often on the degree of an employer's discretion

in administering the plan. Our cases have noted that such

determinations are not clear cut and necessarily require line

drawing. See Simas v. Quaker Fabric Corp., 6 F.3d 849, 853 (1st

Cir. 1993) ("It is a matter of degrees but under Fort Halifax

degrees are crucial."); accord Rodowicz, 192 F.3d at 172;

Belanger, 71 F.3d at 454. For this reason, our precedents

addressing benefits similar to those in the PRP are particularly

instructive, and we discuss those cases in the context of

detailing the four enhanced retirement benefits offered in the

program here. Our examination of the PRP benefits leads us to

conclude that the severance provision, which was the primary

component of the PRP, does not fall under ERISA. Although other

provisions might tend to implicate ERISA, we hold that these

bear little weight compared to the non-ERISA nature of the PRP's

central severance benefit. Nor does CGC's intent, which was far

from unequivocal, factor significantly in the balance in this

case.

-10-
Severance Bonus

The severance bonus was the meat and potatoes of the

PRP. Like the severance at issue in Fort Halifax, it provided

for a one-time, lump-sum payment. The severance bonus was based

on tenure, calculated at the rate of two-and-a-half weeks' pay

for each of the first ten years of service plus two weeks for

each additional year, up to a maximum of 78 weeks' salary (for

37 years of service).7 The method of calculation was explained

in the PRP: "Calculations for severance payments under this

Program will be based on the employee's authorized rate of pay

. . . and each full year of System service at the time of

separation." Simple arithmetic thus dictated the amount of the

bonus.

The PRP's severance provision fits comfortably within

the category of benefits we have deemed not subject to ERISA

coverage because of their limited, non-discretionary nature. In

Belanger, for example, we held that a series of increasingly

more lucrative severance incentives, also based on years of

service, did not an ERISA plan make because those bonuses

"required no complicated administrative apparatus either to

calculate or to distribute the promised benefit." 71 F.3d at

7 Incidentally, both O'Connor and Horning had surpassed
this three-decade milestone and therefore would have been
entitled to the maximum severance bonus allowable under the PRP.

-11-
455. More recently, in Rodowicz, we held that a voluntary

termination program, which included a severance remarkably

similar to the PRP, was not an ERISA plan. 192 F.3d at 171-72.

Like the PRP, the Rodowicz severance was calculated by

multiplying some number of weeks' salary by years of service; it

too was capped at 78 weeks; it too was offered to most employees

during a narrow window of opportunity (five weeks); and it too

conditioned the enhanced benefit on the employer's ability to

defer retirement (for up to six months). Id. at 167. Although

the PRP's election window and deferral period were longer, we

agree with the district court that those differences are

immaterial. See O'Connor, 85 F. Supp. 2d at 56.

In some ways, the Rodowicz incentive involved even more

discretion than the PRP or the severance packages in Belanger.

It authorized certain exclusions for those terminated

involuntarily and provided an appeals process for aggrieved

employees to challenge that determination, which made it

"somewhat less mechanical and unthinking." Rodowicz, 192 F.3d

at 171-72. Despite these more discretionary elements, the

Rodowicz severance was not an ERISA plan because it "did not

require that the Company make a long-term financial commitment

to any employee who chose to participate." Id. at 171.

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 Unlike the Rodowicz program, the PRP limited the number

of employees who could enroll, but this provision does not

demand the protections of ERISA. As stated in the PRP, CGC

reserved the right to limit its incentive offer to 300

employees, a sizable portion of the eligible workforce. If

demand exceeded that number, the choice of eligible employees

would not be random; it would be based on years of service.

Though a "years of service" standard necessarily requires

individualized determinations, cf. O'Connor, 85 F. Supp. 2d at

56, such assessments do not implicate ERISA unless they are

based on non-mechanical, subjective criteria that could in their

application be subject to employer abuse. See Rodowicz, 192

F.3d at 167; Belanger, 71 F.3d at 452. As the district court

pointed out, there was no evidence that this contingent

exclusion had actually been invoked, O'Connor, 85 F. Supp. 2d at

55, but even if it had, limiting incentive offers to the most

senior employees based on tenure could hardly be more objective,

or the application of years of service more mechanical.

That the severance bonus of the PRP falls on the non-

ERISA side of the line is reinforced by comparison to plans we

and other courts have deemed covered by ERISA. In Simas, for

example, we found that a severance bonus for which employees

were eligible during a twenty-four month election period, if not

-13-
fired for cause, implicated the protections of ERISA because

"the time period [wa]s prolonged, individualized decisions

[we]re required, and at least one of the criteria [wa]s far from

mechanical." 6 F.3d at 854. In contrast to both Belanger and

Rodowicz, Simas's for-cause criterion involved the type of

discretionary determination subject to abuse that triggers an

employer's fiduciary obligation to its beneficiaries. Cf.

Emmenegger v. Bull Moose Tube Co., 197 F.3d 929, 935 (8th Cir.

1999) (finding ERISA plan where eligibility for severance

required employer to "make an ad hoc judgment about the reason

for the employee's termination and evaluate the quality of that

person's service"); Collins v. Ralston Purina Co., 147 F.3d 592,

597 (7th Cir. 1998) (relying in part on Simas to hold that

retention contract that called for payment of severance in the

event of a "substantial reduction of duties or responsibilities"

was an ERISA plan because employer was "required to exercise

discretion on an ongoing basis" and to make "nonclerical

'judgment calls'"); Schonholz v. Long Island Jewish Med. Ctr.,

87 F.3d 72, 76 (2d Cir. 1996) (concluding that a severance

conditioned on involuntarily terminated employee's good faith

effort to obtain commensurate employment elsewhere implicated

ERISA because it necessitated "managerial discretion"). In sum,

the severance provision is a classic non-ERISA benefit.

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Other Benefits

The three other elements of the PRP - educational

assistance, pension credit, and COBRA premiums - appear to be

little more than afterthoughts to the severance bonus. Compared

to the severance, they would not likely have factored

significantly into an employee's decision to retire early. We

review briefly each of these other benefits.

The first such benefit was education and outplacement

assistance through which an employee would be reimbursed up to

$5,000 for "a course of study related to occupational or

professional skill development" or for services such as

counseling, resume preparation or interview practice. The

district court held this benefit to be within ERISA's purview.

O'Connor, 85 F. Supp. 2d at 57; but cf. Kemp v. Int'l Bus. Mach.

Corp., 109 F.3d 708, 710-11 (11th Cir. 1997) (where parties

agreed that $2500 Retirement Education Assistance Program was

not an ERISA benefit). Even if the assessment of whether a

"course of study" was "related to . . . skill development" is

the kind of subjective determination employers might be apt to

abuse, the degree of discretion exercised would be negligible

because the educational assistance benefit, like the severance

bonus, was a one-time payment and was available only within a

year of retirement. That minimal amount of discretion attendant

-15-
to the education assistance benefit was wholly absent from the

outplacement services benefit.

Employees who opted for the PRP also received a pension

credit equal to the number of weeks represented by the

severance. That is, employees like Horning and O'Connor with

over 37 years' service who received the maximum severance bonus

would be credited with an additional 78 weeks of service,

enabling them to collect their non-PRP pension benefits sooner.

The district court, relying on an extra-circuit case that did

not directly address the question of what constitutes an ERISA

plan, held that the pension credit implicated ERISA because CGC

would be obligated to pay "[a]s long as pension eligible

participants in the PRP are alive." O'Connor, 85 F. Supp. 2d at

57. This connotes a more significant undertaking than the facts

justify. CGC's obligation to pay its employees a pension arose

under a different retirement plan (undoubtedly covered by ERISA)

that antedated the PRP. The only change made by the PRP to that

pre-existing defined pension benefit plan was to start

disbursements sooner. Once an employee elected to retire under

the PRP, the credit enhancement would simply be added to his

accrued time in service. As with the severance, the amount of

that acceleration was calculated according to a simple

arithmetic formula. The pension credit, like the severance

-16-
bonus, was a lump-sum benefit - time instead of cash - that left

no discretion to CGC in calculating how much sooner retirees who

opted for the PRP would begin receiving disbursements from their

pensions. As such, it did not implicate ERISA. But see Fischer

v. Philadelphia Elec. Co., 96 F.3d 1533, 1536 (3d Cir. 1996)

(assuming without analysis that a severance package that

included pension credit of five years for time-in-service and

five years for age was an ERISA plan).8

The last PRP benefit, the payment of COBRA 9 premiums

for at least one year after separation, probably falls within

ERISA's protections. We have stated, albeit in dicta, that

COBRA continuation coverage implicates ERISA, Demars, 173 F.3d

at 447, but that an employer's reimbursement of non-COBRA

insurance premiums paid directly by an employee does not, Baig,

166 F.3d at 4-5. Relying on Baig, the district court held that

CGC's payment of COBRA premiums would not implicate ERISA

because it required CGC to do nothing more than "write a series

8 A virtually identical "5&5" provision was rejected by
CGC and scaled back to a maximum credit of 78 months' service.
See O'Connor, 85 F. Supp. 2d at 52.
9 The Consolidated Omnibus Budget Reconciliation Act of
1985 (COBRA), 29 U.S.C. § 1162, an amendment to ERISA, requires
employers to continue insurance coverage for up to eighteen
months after separation for those employees who continue to pay
their own premium. Under the PRP, CGC paid those premiums for
at least a year.

-17-
of checks over a year . . . [a] short-term mechanical process

[that] would not require ERISA's protections . . . ." 85 F.

Supp. 2d at 57. The court's reliance on Baig was misplaced. In

that case, the employee had arranged for disability insurance

himself, paid the premiums directly to the insurer, and was

reimbursed by his employer. Baig, 166 F.3d at 3. Here, by

contrast, the COBRA benefit was for a group insurance plan

sponsored by CGC, which paid the premium. If the mere

continuation of coverage under COBRA would implicate ERISA, see

Demars, 173 F.3d at 447, then an employer's premium payments to

facilitate that coverage seemingly would as well.

In sum, the PRP consists of a substantial lump-sum

severance, the centerpiece of the incentive, plus a few enhanced

benefits that otherwise would have been provided upon retirement

under pre-existing ERISA plans, though without the added

inducement of $5,000 for retraining, up to 78 months' credit for

time in service, and the payment of COBRA premiums for a year.

Although two of these non-severance benefits might implicate

ERISA to some extent, we are persuaded that they did not

transform the PRP as a whole into an ERISA-protected plan.

These were minor perks attached to the severance. Neither

involved the kind of ongoing discretionary judgments that would

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sufficiently tax an employer's administrative integrity to

warrant ERISA's prophylaxis.

Our assessment of the potential threat to

administrative integrity posed by an early retirement incentive

necessarily involves qualitative judgment. We do not reach this

decision lightly; it carries weighty consequences. If ERISA

applies, an employer assumes the role of fiduciary for its

employee-beneficiaries, and aggrieved employees lose by

preemption certain remedies available under state law. Thus, in

order to trigger ERISA's oversight, the plan at issue, viewed as

a whole, must require the exercise of discretion to the degree

that would justify saddling an employer with fiduciary

responsibility and foreclosing an employee's state claims.10

In this case, therefore, we hold that the cumulative

impact of these lesser benefits is insufficient to counter the

10 Ironically, employers engaged in ERISA litigation
typically argue that their plans are covered by the federal
statute in an effort to preempt state law claims. Such a
position seems incongruous because, by imposing ERISA's
fiduciary obligation on employers, Congress sought to provide
meaningful protection to employee-beneficiaries. Recent
recognition that ERISA's fiduciary obligations compel
affirmative disclosure may prompt rethinking of this strategy.
See Bins v. Exxon Co., 189 F.3d 929, 939 (9th Cir. 1999)
(holding that "once an employer-fiduciary seriously considers a
proposal to implement a change in ERISA benefits, it has an
affirmative duty to disclose information about the proposal to
all plan participants and beneficiaries to whom the employer
knows, or has reason to know, that the information is
material").

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non-discretionary, time-limited nature of the severance bonus,

the dominant feature of the PRP. Even viewed in the aggregate,

these extra benefits do not tip the balance to make the PRP a

covered plan. On its face, therefore, the PRP did not comprise

an ERISA plan.

CGC's Intent

In holding that the "composite" cobbled from the

severance bonus and these other benefits added up to an ERISA

plan, the district court made much of CGC's intent. O'Connor,

85 F. Supp. 2d at 57-59. Our review of the summary judgment

record indicates that, at best, the intent was ambiguous and

therefore provided no basis for holding that the PRP was an

ERISA plan.

Although the cover memo to the summary description of

the PRP circulated to employees stated that the information was

being provided in accordance with the disclosure requirements of

ERISA, the five-page summary description did not comply with

those disclosure requirements. For example, the PRP failed to

identify a plan administrator or agent for service of process,

and omitted reference to the appeals process required by

regulation. See 29 C.F.R. §§ 2520.102-3(f), -3(g), & -3(s).

These items, absent from the PRP, were apparently set out in the

benefit plan documents that predated the PRP incentive. In

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fact, the PRP expressly disclaims being the final word on

employee benefit plans:

This summary is not intended to offer detailed
descriptions of [CES's] employee benefit plans. All
information furnished is governed by the provisions of
the actual plan documents pertaining to the
appropriate benefit plans. If any conflict arises
between this summary and [CES's] employee benefit plan
documents, or any point is not covered, the terms of
the appropriate plan documents will govern in all
cases.

This disclaimer and the material omissions from the PRP

indicate that CGC did not intend it to replace its pre-existing

plan documents. Instead, the PRP appears to have been intended

only to offer an early retirement incentive and to sketch how an

employee's acceptance would affect those other benefits. CGC's

intent not to create an ongoing plan was underscored by the plan

administrator, Douglas Miller, who described his understanding

of the PRP this way: "It wasn't a plan that was supposed to stay

on the books like the rest of these plans[;] it was a temporary

type plan that would [be] institute[d] and then it would go

away." The careful attention to avoid any appearance that the

early retirement incentive overrode the prior benefit plans, and

the evidence that it was designed to be a short-term program,

suggest that CGC did not intend the PRP to be an ERISA plan.

Although we have in the past characterized an

employer's intent as "[t]he crucial factor in determining if a

-21-
'plan' has been established," Wickman v. Northwestern Nat'l Ins.

Co., 908 F.2d 1077, 1083 (1st Cir. 1990), indicators of

intention give little aid in a case such as this where the

evidence of those intentions is far from uniform. In Wickman,

the employer, who purchased a group insurance plan for its

employees, distributed a handbook outlining their ERISA rights,

thereby providing "strong evidence that the employer has adopted

an ERISA regulated plan." Id. But that evidence of intention

was just more grist for the mill. The insurance coverage at

issue in Wickman implicated ERISA by its terms because it called

for the company to devise "specific insurance eligibility

requirements," id., precisely the kind of discretionary criteria

that trigger an employer's fiduciary obligation to its employee-

beneficiaries. Our subsequent cases have never read Wickman to

support reliance on an employer's purported intent where the

plan document itself indicated a contrary purpose. See Baig,

166 F.3d at 5; Belanger, 71 F.3d at 455. We would be loath to

supersede express provisions with debatable evidence of contrary

intent.

The PRP, unlike the group insurance plan in Wickman,

was at most the product of mixed motive. CGC's ambiguous intent

could not outweigh the non-ERISA nature of the severance

provision apparent from the face of the PRP itself.

-22-
Accordingly, the court's use of intent to bootstrap the non-

severance benefits into an ERISA plan was error. Given that the

main ingredient of the PRP was a one-time, lump-sum severance

bonus, calculated according to a formula that required no

exercise of employer discretion, we hold that it was not a plan

within the meaning of ERISA.

REMAND JURISDICTION

Much of the oral argument in this case focused not on

the merits of the appeals, but on the procedural fallout from

our decision. Appellants argued that, if we accepted their

position that the PRP was not an ERISA plan, the trial court

could in its discretion exercise supplemental jurisdiction over

the state law claims pursuant to 28 U.S.C. § 1367(c)(3), under

which "district courts may decline to exercise supplemental

jurisdiction" if the state claim is the only remaining claim

after all federal claims have been dismissed. See Rodowicz, 192

F.3d at 172 (where district court retained jurisdiction over

state law claims after dismissing ERISA claim). Appellee argued

that no further proceedings are necessary because the district

court's finding that no material misrepresentations were relied

on would collaterally estop any effort to litigate a contrary

result.

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 Courts generally decline to exercise supplemental

jurisdiction over state claims if the federal predicate is

dismissed early in the litigation. E.g., Camelio v. Am. Fed'n,

137 F.3d 666, 672 (1st Cir. 1998) ("[T]he balance of competing

factors ordinarily will weigh strongly in favor of declining

jurisdiction over state law claims where the foundational

federal claims have been dismissed at an early stage in the

litigation."). Where those claims remain viable at this late

stage in the game, however, other concerns guide the court's

discretion. See Rodriguez v. Doral Mortgage Corp., 57 F.3d

1168, 1175-77 (1st Cir. 1995). In Rodriguez, we held that on

remand a district court was empowered to retain supplemental

jurisdiction over the state claim despite having dismissed the

federal claim where the two "'derive[d] from a common nucleus of

operative fact.'" Id. at 1175 (quoting United Mine Workers v.

Gibbs, 383 U.S. 715, 725 (1966)). As in Rodriguez, we leave

that determination in the first instance to the district court,

reiterating this one consideration: "The running of the statute

of limitations on a pendent claim, precluding the filing of a

separate suit in state court, is a salient factor to be

evaluated when deciding whether to retain supplemental

jurisdiction." Id. at 1177.

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 Accordingly, on remand the district court may in the

exercise of its discretion elect to assert supplemental

jurisdiction and address the state claims. If it does so, it

may also consider what, if any, preclusive effect its prior

rulings have on those common law claims.11

Reversed and remanded.

11 The court is also free to consider the hybrid
procedure, called to our attention at argument, that was adopted
in Pallazola v. Rucker, 621 F. Supp. 764, 770-71 (D. Mass.
1985), in which Judge Keeton opted to defer decision until such
time as the state court had determined whether the statute of
limitations would bar the claim in state court.

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