## Facts

- Safelite Group, Inc. created a nonqualified deferred compensation plan for select top executives, allowing advance elections to defer portions of salary and bonuses.
- The plan provided for distribution either upon termination of employment or in scheduled installments under plan terms.
- Dan H. Wilson, Safelite’s former President and CEO, participated and deferred more than $9 million.
- After a federal audit, Wilson incurred substantial personal tax penalties and interest, which he attributed to Safelite’s alleged mishandling of plan-related tax compliance and related advice.
- Wilson sued in federal court asserting state-law claims including breach of contract and negligent misrepresentation tied to Safelite’s administration and representations regarding the plan.
- Safelite sought partial summary judgment, arguing ERISA governed the plan and therefore preempted Wilson’s state-law claims.

## Issues

1. Whether the executive deferred compensation arrangement constituted an “employee pension benefit plan” under ERISA, 29 U.S.C. § 1002(2)(A)(ii), because it resulted in a deferral of income to termination of employment or beyond.
2. Whether the arrangement was excluded from ERISA coverage under the Department of Labor regulatory exemption for certain bonus programs.
3. Whether ERISA preempted Wilson’s state-law claims based on alleged mismanagement and misrepresentations relating to the plan.

## Decision

- The Sixth Circuit affirmed the district court’s partial summary judgment for Safelite.
- The court held the plan was an ERISA “employee pension benefit plan” because it functioned as a vehicle that resulted in deferral of income for periods extending to termination of employment or beyond.
- The court rejected the argument that “results in a deferral” requires mandatory deferral; optional elective deferrals may still satisfy the statutory definition.
- The court held the plan did not qualify for the bonus-program exemption because it operated as an ongoing compensation-deferral mechanism rather than a short-term bonus arrangement.
- Because ERISA governed the plan, ERISA preempted Wilson’s state-law claims relating to the plan.

## Legal Principles

- A plan falls within ERISA’s definition of an “employee pension benefit plan” when it results in deferral of employee income to termination of employment or beyond, even if participation and deferral elections are voluntary.
- Department of Labor bonus-program exclusions do not apply to arrangements that systematically defer compensation into future periods as an ongoing plan feature.
- ERISA broadly preempts state-law claims that relate to an ERISA-covered plan, including claims challenging plan administration or plan-related representations; plaintiffs generally must proceed, if at all, under ERISA’s remedial scheme.

## Conclusion

The court treated Safelite’s executive deferred compensation arrangement as an ERISA pension plan and, because the plan was not exempt as a bonus program, held that ERISA preempted the participant’s related state-law claims.


Wilson v. Safelite Grp., Inc., 930 F.3d 429 (6th Cir. 2019)