Yiannakis John Televantos v. Lyondell Chemical Company

Appellant, Yiannakis John Televantos, brought suit in the United States District
Court for the Eastern District of Pennsylvania against his former employer, Lyondell
Chemical Company ("Lyondell"), seeking benefits payable under a Change of Control
Plan (the "Plan") applicable when an employee resigns within two years of a change of
control due to the occurrence of a relocation of the employee's principal place of work.
Televantos was employed by ARCO Chemical Company ("ARCO") in Newtown Square,
Pennsylvania as Vice President for the Research and Development Business Urethanes.
In anticipation of a possible takeover, ARCO developed and adopted a Change of Control
Plan in April 1998. The Plan is an employee benefit plan governed by the requirements
and provisions of the Employee Retirement Income Security Act ("ERISA") of 1974, 29
U.S.C.  1001 et. seq. (2001).

The Plan provides, inter alia, payment of severance benefits to qualifying
participants for the purpose of enabling the company to "be able to retain the services of
its executives and personnel in the event of a Change of Control of the Company, during
the pendency of a possible Change of Control, and following a Change of Control, to
ensure their continued dedication and efforts in any such event without undue concern for
their personal financial and employment security." App. at 389.

Article V, Paragraph 5.1(a) provides for benefits if, within two years of a change
of control, the participant's employment "terminates for any reason . . . other than . . . (D)
a termination, voluntary resignation or retirement by the Participant without Good
Reason." App. at 397. "Good Reason" is defined in Article II, Paragraph 2.11 as "the
occurrence after a Change of Control of any of the following events or conditions,"
including "the relocation of the Participant's principal place of work, but only if the
'moving expenses' incurred in connection with such relocation would be deductible under
Section 217 of the Internal Revenue Code of 1986, as amended." App. at 394. The
referenced section of the tax code provides that moving expenses "paid or incurred . . . in
connection with the commencement of work . . . at a new principal place of work" are
deductible if, inter alia, they involve a move of greater than fifty miles. I.R.C. 
217(a),(c) (2001).

At the time the Plan was distributed to employees, ARCO also distributed a
Summary of the Change of Control Plan (the "Summary"). The Summary explicitly
states that it is not meant to replace the official Plan documents, which govern in the
event of any inconsistency with the Summary. The Summary states that, as "an
additional measure of protection for employees," an employee "may elect to leave the
Company and still be entitled to receive" Plan benefits. App. at 413. In describing
circumstances under which this could happen, the Summary states that an individual in
Televantos' employment level "may elect to terminate employment upon request or
requirement . . . to relocate to a new work location." App. at 413.

In July 1998, Lyondell acquired all of the stock of ARCO through a cash tender
offer and as a result acquired control of ARCO. This stock acquisition constituted a
"change of control" under the Plan. On March 30, 1999, Lyondell sent Televantos a letter
offering him employment at the same position he held with ARCO, and had held since the
change in control, and stating that on or about February 1, 2000, his position "will be
located" in Houston. Similar letters were sent to a number of employees. The letter
further stated that "[i]f you decline this offer, you will be eligible for the Change of
Control package. However, in order to receive this payment, you must complete all
transitional assignments. This date is determined by management at the sole discretion of
management." App. at 385. The letter asked Televantos to respond by April 30, 1999 as
to whether he would accept or decline this offer.

On May 7, 1999, Televantos returned the letter stating that he would decline the
offer to relocate in his position to Houston. Soon thereafter, he accepted an offer of
employment with Foamex, a local company and customer of Lyondell, with whom
Televantos had been in employment negotiations since prior to his receipt of the March
30 letter. His employment agreement with Foamex was dated May 21, 1999 but included
a provision stating that his employment would not begin until he had completed his
"transitional work assignments" with Lyondell. App. at 423. However, the Agreement
also bound Televantos to "devote his entire working time" to Foamex beginning on May
21, 1999. On May 21, 1999, Televantos met with his supervisor at Lyondell and
informed him that he had accepted a position with Foamex, would complete all
transitional assignments with Lyondell, and wanted to receive the Plan benefits. In the
next two weeks, Lyondell informed Televantos that his last day of work would be June
11, 1999. Continued employment with Lyondell and the completion of transitional
assignments was deemed impossible because Foamex's position as a customer of
Lyondell created a conflict of interest.

When Televantos inquired about the amount of his Plan benefits, he was informed
by Lyondell's Vice President of Human Resources that he would not be receiving any
benefits under Article V. Televantos brought this lawsuit against Lyondell seeking these
benefits under the Plan. The District Court conducted a bench trial and found in favor of
Lyondell, concluding that the Plan's definition of "Good Reason" was not ambiguous and
required the "actual occurrence of the relocation of the participant's principal place of
work." App. at 5-7.

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Traditional rules of contract construction govern our review of an employment
benefit plan under ERISA. See Int'l Union v. Skinner Engine Co., 188 F.3d 130, 138 (3d
Cir. 1999). The determination of whether a provision of a contract is clear or ambiguous
is a question of law subject to plenary review by this court. See Bill Gray Enters., Inc.
Employee Health and Welfare Plan v. Gourley, 248 F.3d 206, 218 (3d Cir. 2001);
Williams v. Metzler, 132 F.3d 937, 946 (3d Cir. 1997).

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Affirmed

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