Sandstrom v. Cultor Food Science, Inc., 214 F.3d 795 (7^th Cir. 2000)-Following an acquisition of American Xyrofin, by Cultor U.S. Inc., a newly created subsidiary, Cultor Food Science sought to discharge certain former Xyrofin employees. Kenneth Sandstrom filed suit under 29 U.S.C. § 1132 (a)(1)(B), contending that Cultor's severance offer to another Xyrofin employee demonstrated that it had an "informal plan for severance benefits" that the court should apply to him also.

Sandstrom raised the issue of whether it is possible to have an unwritten pension or welfare-benefit plan under ERISA. Although it is possible, this court observed, it would not reach the question, since Cultor Food Science did have a written plan, which did not cover Sandstrom.  A court may infer an unwritten plan "if the plan is 'a "reality," which requires . . . that the court be able to determine "whether from the surrounding circumstances a reasonable person could ascertain the intended benefits, beneficiaries, source of financing, and procedures for receiving benefits."'  James v. National Business Systems, Inc., 924 F.2d 718, 720 (7^th Cir. 1991.)"

            Since there was a written plan, Sandstrom would have to argue that an amendment or modification had occurred.  This court, however, found no basis for alleging a plan amendment.  "Bilateral arrangements are compatible with ERISA and do not modify the plan applicable to other employees who did not receive the offers or estop the employer to enforce the plan's written terms."  Frahm v. Equitable Life Assurance Society, 137 F.3d 955, 960 (7^th Cir. 1998).