The opinion of the court was delivered by: BIUNNO
This is a suit for alleged violation of the Age Discrimination in Employment Act of 1967 (ADEA), 29 USC § 621 et seq.
After pretrial, discovery, an amended complaint and answer thereto, and the submission of trial briefs and proposed findings of fact and conclusions of law, EEOC filed a motion for partial summary judgment (i.e., on the issue of violation) and Westinghouse responded with a cross-motion for summary judgment on a number of defenses.
At the initial hearing, the court expressed some reservations about taking up the issues on the basis of excerpts from separate but interrelated documents, one being a "Pension and Insurance Agreement" of 1976, and the other being the Westinghouse Pension Plan of 1976. It indicated that it would prefer to study both documents in full, along with the corresponding previous versions of 1966.
Exh. J-1 is the collective bargaining agreement of 1966, and the Pension and Insurance Agreement negotiated and agreed to at the same time.
Exh. J-2 is the Westinghouse Pension Plan in full text as of 1966.
Exh. J-3 corresponds to J-1 but is the pair of agreements negotiated and agreed to in 1976, and was in force when the alleged violation occurred.
Exh. J-4 corresponds to J-2, but is the full text of the Westinghouse Pension Plan as it stood as the result of the 1976 negotiations and agreements, and was in force when the alleged violation occurred.
Both Exh. J-2 and J-4 also include a pamphlet summarizing the main features of the pension plan, but there is no question in this case that anything other than the full text of the plan is controlling.
Although the 1976 Pension Plan, in Section 25, reserves to Westinghouse the right to amend the Plan, to discontinue contributions or to terminate the Plan (subject to conditions required to comply with ERISA), this reservation is subordinate to the covenant of Westinghouse, in Art. I, sec. 4 (b) of the collectively bargained Pension and Insurance Agreement, that it will not discontinue the Pension Plan or make any amendment that would adversely affect the rights thereunder of the employees, nor suspend or reduce company contributions, during the term of the Agreement.
Both the original complaint and the amended complaint allege, in substance, that Westinghouse willfully violated sec. 4(a) of the ADEA, 29 USC § 623(a) by its failure to provide "severance pay" to terminated employees age 55 and older who had 10 years service with the Company when it closed its Belleville, N.J. plant on April 1, 1977 and who were then eligible for retirement benefits.
The original complaint named a single employee in that category, and a number of "John Doe" employees similarly situated. The amended complaint names 65 individual employees and no "John Does".
After careful review of the full text of the documents Exh. J-1 through J-4, the court suggested at a later argument that the applicable provisions clearly did not allow an employee to have both Layoff Income and Benefits under Article VI of the Pension and Insurance Agreement and retirement payments under the Pension Plan in light of the general layoff due to the closing of the Belleville plant. It suggested that a correct reading of the interrelated instruments meant that an employee over 55, with 10 years service, who was laid off due to the plant closing, was put to his own choice whether to take early retirement and begin receiving payments for retirement under the Pension Plan, or whether to exercise one of the options under the Layoff Income and Benefit plan, which was to sever all relationship with the Company, relinquish his recall and service rights, and take a lump sum payment equal to one week's pay for each full year of credited service (less any part of that total that had been applied to layoff income on some earlier layoff and not meanwhile repaid or rebuilt).
Aside from the option to sever all relationships and relinquish recall and service credits in order to draw a lump sum payment (which, incidentally is not available for every layoff but only under specified conditions), the Layoff Income and Benefit plan is an unemployment benefit plan designed to supplement unemployment compensation benefits to bring the combined payment up to 60% of the level of his "week's pay" (a defined term), and to continue such payments after unemployment compensation had run out (until the particular employee's maximum credit was used up).
After the supplemental briefs and responses were in, the court was of the view that the question it had raised had gone unanswered, and on March 17, 1982 it filed a brief memorandum to the effect that the suggested reading was the correct one, that there accordingly could not be an ADEA violation, and ruled that EEOC's motion would be denied while the Westinghouse motion would be granted. It promised a fuller articulation as soon as the press of other work allowed. No order was entered at that time.
EEOC then filed a motion to alter or amend the memorandum. This amounted to an application for reconsideration and reargument, and was timely filed. Further briefs and responses were submitted by both sides, and further argument heard.
It was evident from that argument that EEOC agreed that the subject employees could not have both LIB and early retirement payments at the same time under the facts of this case. Westinghouse also agreed that an employee could not have both, but also was of the view that so long as the employee was eligible to begin receiving payments for early retirement, he could not exercise the LIB option for a lump sum payment. It also urged that the court deal with other defenses pressed to support its motion for summary judgment.
The present opinion is the fuller articulation contemplated when the earlier brief ruling on one issue was filed. It replaces that earlier memorandum since some aspects have been made clearer by the further briefing and argument, and another review of the file and the exhibits. It also deals with other defenses raised and argued.
1. Statute of limitations.
The ADEA does not itself spell out the applicable statute of limitations. Instead, the Congress merely provided, in 29 U.S.C. § 626(e), that "Sections 6 * * * of the Portal-to-Portal Act of 1947" 29 U.S.C. § 255 "shall apply to actions under this Act."
That embodied statute provides that any action may be commenced within two years after the cause of action accrued, and every such action shall be forever barred unless commenced within two years after the cause of action accrued, except that a cause of action arising out of a willful violation may be commenced within three years after the cause of action accrued.
This action was commenced when the original complaint was filed on March 28, 1980 as to the one employee then named. His situation will be considered first. Since a "willful" violation is alleged, the 3-year period will be considered first.
The affidavit of John F. Williams, submitted in support of the Westinghouse motion, shows that Mr. Meola, the only named employee in the original complaint, was counselled on February 2, 1977 that he was ineligible for LIB. There is no affidavit or other fact source to contradict this fact, or to raise any issue for trial in respect to the date.
That date is more than 3 years before the original complaint was filed on March 28, 1980, and thus is barred by the longer statute of limitations set out in 29 USC § 255, so long as it is the date on which the "cause of action accrued."
EEOC argues that the cause of action did not accrue until April 1, 1977 when the Belleville plant closed and Mr. Meola was laid off and put on early retirement. It says that not until April 1, 1977 would Mr. Meola have been entitled to be paid any LIB benefit, and so the complaint was filed within three years.
"* * * Employees eligible for early retirement apparently are not receiving severance pay [sic]. * * * On the surface, this would appear to violate ADEA with regard to workers who, although receiving pensions, are not paid severance benefits." (emphasis added). (Exh. N to EEOC brief for summary judgment).
Since Mr. Meola was told on February 2, 1977, that he would be put on early retirement and was ineligible for LIB, the alleged ADEA violation (if there were one) occurred then and so the "cause of action" arose then.
The core of the ADEA applicable to this case is the declaration of "unlawful" employer practices, 29 USC § 623(a). This embraces discrimination "against any individual in respect to his compensation, terms, conditions, or privileges of employment" or to "discharge any individual" because of such individual's age.
Thus, what the ADEA forbids is to discriminate because of age. If there were discrimination here on account of age, it occurred when Meola was told that he would have early retirement and was ineligible for LIB. That was on February 2, 1977, more than 3 years before the complaint was filed.
The analysis is the same as that employed by the Supreme Court in Delaware State College v. Ricks, 449 U.S. 250, 66 L. Ed. 2d 431, 101 S. Ct. 498 (1980), a case from this Circuit. In that case, which involved a charge of race discrimination in employment, both under 42 USC § 2000e et seq. (title VII) and under 42 USC § 1981, Ricks was told on June 26, 1974 that the college Board of Trustees formally voted that day to deny him tenure. He remained in employment until June 30, 1975 when his non-tenured employment ended.
In the case of the Title VII claim, the requirement was that a complaint be filed within 180 days "after the alleged unlawful employment practice occurred". In the case of the § 1981 claim, which was governed by Delaware law, the provision was that "No action . . . shall be brought after the expiration of 3 years from the accruing of the cause of such action;" 10 Del.C. § 8106 (see 605 F.2d 710 at 713).
For both claims, the Supreme Court ruled that the several periods applicable (180 days and 3 years) ran from the date Ricks was told of the Board action to deny him tenure, even though he continued to be employed for more than a year thereafter as a non-tenured teacher.
There is not, and cannot be, any claim here that Mr. Meola's layoff was a discriminatory act or practice in violation of the ADEA. The plant was closed and all employees were laid off (except, perhaps a security staff), and they were of all ages.
This is not a case like EEOC v. Baltimore etc. Co., 632 F.2d 1107 (CA4, 1980). There, two railroads with consolidated management faced severe financial difficulties as the result of a nationwide coal strike in 1971. To meet the problem, the company decided to reduce the size of its work force. First, they reduced the number of workers subject to collective bargaining agreements. That step was not challenged in the case. Next they reduced the number of workers not subject to collective bargaining agreements, and this was done by selectively terminating 142 employees who were at least 60 years old with 20 years' service, or at least 62 years old with 10 years' service. All of them were qualified for retirement pensions, and were involuntarily retired starting in October, 1971. Under the pension plan, only those who reached 65 were subject to compulsory retirement. Those eligible to retire earlier were not compelled to retire so far as the plan was concerned, but it was shown that such early retirements were compelled as an inherent right of management in managing the business, in managing personnel, a right that the company had "irrespective of the plans." Thus, in that case, the company thinned out its work force by selecting employees according to age.
Nothing of that sort appears in the present case. There is no dispute that the entire Belleville plant was closed down and all employees laid off.
Thus, the core of the alleged discriminatory practice is the denial of LIB, not the layoff. If it violated the Act, that event occurred, as in Ricks, when Meola was told that he would be put on early retirement and was not eligible for LIB. If that was a prohibited practice, the violation occurred and the cause of action accrued, on that date as it did in Ricks for application of the Delaware 3-year statute as well as for the Title VII claim.
The same result follows for all the other employees named in the Amended Complaint, which was filed March 3, 1981. As the Williams affidavit shows, and it is in no way controverted, every one of the named plaintiffs (except two who were not retired) was told, as Mr. Meola was, that they would be placed on early retirement and that they were not eligible for LIB, on various dates specified, the earliest being January 13, 1977 and the last ones being on March 16, 1977. All but 3 were so told in January and February, 1977, and all were so told more than three years before the original complaint was filed.
Of course, if the 2 year period applies under 29 USC § 255, the original complaint was more than a year late. However, it is not necessary to select between the 2 and 3 year periods, which turns on whether the alleged violation was "willful", because the result is the same in either case.
While the complaint alleges willful violations, no evidence in that regard was submitted on the motions for summary judgment except to the extent that Westinghouse presented proofs to show there was no unlawful practice at all. If "willful" violations were to be considered, both for statute of limitations purposes and for the purpose of claiming liquidated damages, 29 USC § 626(b), such an issue seems to be one for trial rather than motion. However, the bar of the 3-year statute renders the issue moot for both purposes.
A collective bargaining agreement was entered into between Westinghouse and I.U.E. as of October 1, 1950. It embraces all matters then negotiated and agreed to between the employer and the union on a company wide basis for all employees for whom the Union, or one or another local of the union, is the certified collective bargaining representatives.
This agreement, which may be regarded as a national agreement for Westinghouse, was evidently worked out by a committee of 12 on each side. It is retained as the basic, underlying set of terms and conditions for the entire company, including such broad matters as strikes, stoppages and lockouts, union shop provisions (subject to compliance with local laws), dues checkoff, certain broad aspects of wages (but not wage schedules), hours of work, overtime, holidays and vacations, seniority, leaves of absence, grievance and arbitration, and the like.
Wage schedules are negotiated locally, and other details are handled by local unions, including the processing of grievances but arbitration is handled on a national basis by I.U.E.
The 1950 Agreement is periodically modified by adjustments negotiated by the committees of 12 on a company wide basis, and these appear as a "supplement", such as the 1976 Supplement to the 1950 Agreement, which dealt with certain increases in rates of pay negotiated for the company as a whole, including a set of formulas for cost-of-living increases, and the like.
The combination of the 1950 Agreement as modified and the current supplement is followed by an "Appendix" which lists the location and identity of each local bargaining representative, and describes the composition of the employees included in that bargaining unit. For the 1976 documents, there are 41 locals and units listed.
There then follows an Appendix B, listing locations and representatives at which the "union shop" provisions apply, and the original effective date of that status (or the date of certification).
At the time of each national or companywide negotiation over the 1950 Agreement and its current supplement, there is negotiated a separate but related document, the "Pension and Insurance Agreement", between Westinghouse and I.U.E. The locals are covered, but this agreement is company-wide with no provision for local supplements.
The subject dealt with embraces employee benefit plans, both welfare benefit plans and pension benefit plans. These terms are as defined by the Congress, first in the Welfare and Pension Plan Disclosure Act of 1958, and then by the Employment Retirement Security Act of 1974. For the definitions, see 29 USC § 302(a)(1) and (2) (WPPDA) and 29 USC § 1002(1) and (2) (ERISA). Both definitions include unemployment plans, such as LIB, under "welfare benefit plans".
The 1976 Pension and Insurance Agreement by Art. I, requires the company to put into effect an "insurance plan", Section 2(a) and (b), to make available a "pension plan", Section 2 (c)(d) and (e), to make available a "savings plan", Section 2(f) and (g), and to put into effect a "personal accident insurance plan", a "disability benefit plan," a "dependent life insurance plan", and an "in-hospital indemnity plan", Section 2(h) through (l). The "insurance plan" evidently includes coverages for life insurance, accidental death or dismemberment, accident and sickness, personal hospital expense, personal surgical, major medical, hospital expense and the like, see Art II, Section 3(d).
After provisions dealing with one or another of these plans, Article VI establishes the Layoff Income and Benefit plan (LIB) which is the focus of this lawsuit, and which will be reviewed in some detail later. It is sufficient for the moment to observe that it is designed as a supplement to unemployment compensation benefits in the event of layoff for lack of work. As EEOC insists, it is not a "pension plan" as that term has been defined by both WPDA and ERISA, but as EEOC overlooks, it is clearly a "welfare plan" as defined in both statutes.
It is followed by Article VII, dealing with an educational opportunity program providing tuition and fee benefits for training courses to maintain or improve skills for the job or for career development within the company.
There are no doubt other instruments in existence in respect to the various benefit plans dealt with by the agreement, and a number of them are referred to in it. They are not among the exhibits supplied except for the pension plan as it stood under the 1966 agreement (Exh. J-2) and as it stood under the 1976 agreement (Exh. J-4).
The pension plan, and the LIB plan expressed in Article VI, read in the context of all the agreements, contain the provisions mainly to be considered to resolve the issues raised.
It should be noted, too, that all these plans and their terms are the result of collective bargaining. The provisions of the bargained agreement for the pension plan are especially worth noting. These are found at Article I, Section 2 (c), (d) and (e) of the 1976 Pension Plan and Insurance Agreement.
Paragraph (c) is the agreement of the company to make the pension plan as negotiated available, but the agreement is subject to approval of (1) the Board of Directors and (2) the Commissioner of Internal Revenue.
Paragraph (e) specifies that if the Board fails to approve the negotiated plan, then under a specified time schedule "the Company and the Union shall be obligated to meet to negotiate solely with respect to the subject matter of the Pension Plan . . ." A like provision is found in paragraph (g) for the savings plan, which also is subject to approval by the Board and the ...