Fifth Circuit Rules That Project Completion Bonus Is Not An ERISA Severance Plan

Whether a one-time payment of benefits constitutes an employee benefit plan under ERISA has been the source of some consternation in the courts for many years.  The Fifth Circuit, in Atkins v. CB&I, LLC, recently had occasion to consider the issue and held that a bonus conditioned on completing a project was not an ERISA severance plan.  2021 WL 1085807 (5th Cir. Mar. 22, 2021).

In Atkins, the employer's "Project Completion Incentive Plan" offered a bonus to employees who worked until completing their roles on a project.  The bonus was styled as a "retention" bonus, but it was payable upon being laid off in a reduction-in-force or transfer to a different project site.  The plaintiffs were five former employees who quit mid-project.  They sued the employer in Louisiana state court alleging that the plan violated state wage law by denying bonuses to employees who quit prior to the project's completion.  The employer removed the case to federal court on the ground