Winterrowd v. American General Annuity Ins. Co., 321 F.3d 933 (9th Cir. 2003)

Three commissioned sales employees were laid off after their employer’s parent company was acquired by American General Corporation. As commissioned salespeople, the employees were not eligible for severance benefits under the employer’s Job Security Plan. However, the employees were offered and did agree to accept a different severance package in exchange for remaining on the job for an additional 60 days. The employees were subsequently notified that the severance benefits would be calculated in a different way than had been originally represented and were paid less than the amount to which the parties had agreed. When the employees sued for breach of contract, the employer asserted that the employees’ claims were preempted by ERISA. The Ninth Circuit reversed the summary judgment that the district court had granted in favor of the employer, holding that the severance plan at issue in the case was neither an amended version of a preexisting ERISA plan nor was it a newly created ERISA plan. Consequently, the employees’ claims were not preempted by the statute.