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Court Rejects Appeal in Hotel Case

November 2, 1998

WASHINGTON (AP) _ The Supreme Court today refused to reinstate a severance-pay award won by a former New York City hotel manager fired for alleged sexual harassment of women employees.

The court, without comment, rejected an appeal in which Peter Tischmann argued that he was entitled to a jury trial on his claim for severance benefits.

Tischmann was vice president and managing director of the St. Regis Hotel in New York City when he was fired in 1992 for allegedly violating the sex-harassment policy of the hotel’s owner, ITT Sheraton Corp. He was denied any money under ITT Sheraton’s severance plan, which promised executives two years’ pay unless they were fired for cause.

Tischmann sued his former employer, saying he did not sexually harass his subordinates. He sought severance pay on grounds he was fired arbitrarily.

A federal judge granted Tischmann a jury trial, saying the company’s severance plan was not covered by the Employee Retirement Income Security Act, the federal law that protects pensions and other employee benefits.

At that trial, a jury awarded Tischmann $364,000 in severance pay.

But a federal magistrate judge reconsidered the earlier ruling and decided Tischmann’s claim was covered by ERISA and therefore he was not entitled to a jury trial. The magistrate then ruled against awarding any severance pay.

The 2nd U.S. Circuit Court of Appeals upheld the magistrate’s ruling, saying lawsuits involving claims for employee benefits under ERISA must be decided by a judge, not a jury.

In the appeal acted on today, Tischmann said his claim was for breach of contract and that he therefore was entitled to a jury trial under the Constitution’s Seventh Amendment, which generally guarantees a jury trial in civil lawsuits.

ITT Sheraton’s lawyers urged the justices to reject the appeal, arguing that the appeals court correctly ruled that Tischmann’s lawsuit was not a contract claim.

The case is Tischmann vs. ITT Sheraton Corp., 98-263.

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