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CLEARY v. UNITED STATES LINES

January 27, 1983

FRANCIS X. CLEARY, Plaintiff,
v.
UNITED STATES LINES, INC. and UNITED STATES LINES OPERATIONS, INC., Defendants



The opinion of the court was delivered by: SAROKIN

 Plaintiff, Francis Cleary, is a 64 year-old American citizen who was employed in England by one of the defendants, United States Lines Operations, Inc. ("Operations"). In 1979, Mr. Cleary's employment was terminated by the company. That termination, Mr. Cleary alleges, was unlawful and violated his rights under the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. ยงยง 621-34. Defendants have moved for summary judgment. Among the questions that this court must determine is whether the ADEA applies to American citizens working for United States companies in offices in foreign countries.

 Mr. Cleary began his employment with defendant United States Lines, Inc. ("USL"), in 1946 as a clerk in the company's offices. Over the following 33 years, plaintiff worked either for USL or for Operations. USL is a Delaware corporation having its principal place of business in Cranford, New Jersey. The company is engaged in the international transportation of cargo and has offices throughout the world. Operations is a New York corporation which is wholly owned by USL. Operations has its principal place of business in London and acts as an agent for USL in shipping cargo throughout Europe. Operations does not conduct any business in the United States and is not licensed by the Interstate Commerce Commission to engage in interstate commerce. All ten officers of Operations and four of its five directors are also officers and directors of USL.

 Combined, USL's European division and Operations employ 350 persons in Europe. Only 11 of these employees are American nationals, the remainder are either citizens of the host country or third-country nationals. Employees of USL and Operations are freely transferred between each company.

 Since 1956, plaintiff has been employed full time in Europe either by USL or by one of its subsidiaries. In 1967, Mr. Cleary was transferred from USL in Germany to Operations in London. As an American working abroad, Mr. Cleary received benefits from defendants that were not available to British or third-country nationals working in England. In particular, plaintiff was paid a cost of living allowance as compensation for the difference in exchange rates, was provided with transportation to the United States once a year for himself and for his family, was reimbursed for income taxes paid to the United Kingdom in excess of what he would have paid to the United States Government were he working here, was included in USL's retirement fund, and had his check deposited in a New York bank.

 When plaintiff began his employment with Operations in 1967, the company, as it was obligated to do under English law, furnished Mr. Cleary with a written statement of the terms of his employment. Mr. Cleary signed the statement and, in addition, executed a contract of employment with Operations. The contract was similar to that offered to other employees of Operations. It made no mention of ADEA coverage directly or indirectly.

 On June 18, 1979, plaintiff was advised that his employment was being terminated and that his last day of work would be on June 22, 1979. Who made the decision to fire Mr. Cleary is disputed. Defendants contend that the decision was made and executed in London by A. J. Mayor, vice president of USL's European division and vice president of Operations. Plaintiff, on the other hand, contends that the decision was not final until William Bru, chairman of the board and chief executive officer of defendants, was consulted. Mr. Bru's office was in New York at the time of Mr. Cleary's termination.

 When plaintiff was terminated, he was at first told that his job had been eliminated due to a structural reorganization. Subsequently, defendants stated that the dismissal was for poor job performance and for failure to improve despite repeated warnings. Mr. Cleary denies these contentions; he alleges that he was never notified, either orally or in writing, that his performance did not meet company standards. To support this claim, plaintiff has submitted as an exhibit a letter from defendants' vice president William Brinkman. The letter, which advised Mr. Cleary that he would be receiving a salary increase effective January 1, 1978, stated:

 
In reviewing your performance, one can [sic] be impressed by the total commitment you have for your work. There is no doubt that your good relationship with our Military friends contributes to the well being of our Company, and that your involvement is instrumental in our Military Receivables being as well under control as they are.

 In addition to Mr. Brinkman's letter, the record discloses a job evaluation, dated January 3, 1979, in which Mr. Cleary's overall performance was rated as being "Above Satisfactory". For the first quarter of 1979, Mr. Cleary received a $658.00 bonus. On June 8, 1979, ten days before he was notified of his termination, plaintiff alleges that he was informed by his immediate superior, Robert Splan, that he was going to be transferred to USL's corporate headquarters in Cranford, New Jersey.

 From June 22, 1979 to August 23, 1979, correspondence was exchanged by plaintiff and defendants regarding the terms and conditions of termination. In a letter to Mr. Cleary dated June 22, Mr. Mayor confirmed Mr. Cleary's discharge and outlined his termination benefits. Mr. Mayor stated that Mr. Cleary was entitled to severance compensation calculated at the rate of one week's pay for each of plaintiff's 33 years of service, plus five weeks of vacation pay. In the letter, Mr. Mayor also stated that Mr. Cleary and his family would be reimbursed for the expense of moving to any destination chosen so long as the move was made by January 1, 1980. In lieu of a physical move, plaintiff was advised that he could elect a cash settlement based upon three bids from moving companies to be submitted by Mr. Cleary.

 In a letter dated June 26, 1979, Mr. Cleary responded to Mr. Mayor that his outline of the termination benefits to which Mr. Cleary was entitled did not comport with company policy. Mr. Cleary stated that he should be granted at least two weeks' salary for each year of service because of his unblemished record and because that is what other senior employees had been paid upon separation. In addition, because he was uncertain of his future plans, Mr. Cleary stated that he would accept a cash settlement to cover relocation expenses. He also requested an allowance for air fare to London from the United States so that his children, who had lived in London but were attending school in the United States, could return to settle their affairs. Finally, plaintiff requested that he receive compensation to cover four roundtrip air fare tickets, representing his usual allowance for "home leave", which he had planned to take in late July.

 Four days later, on July 17, 1979, Mr. Cleary sent a letter to Mr. Mayor and submitted three bids for relocation from London to the United States. In the letter, Mr. Cleary noted that if a cash settlement were not paid, defendants would bear the risk of escalated moving and air fare costs at the time that the actual relocation took place.

 Mr. Grant, USL's personnel director, answered Mr. Cleary's letter to Mr. Mayor on July 26, 1979. In the letter, Mr. Grant stated that Mr. Cleary would have to relocate to the United States within three months from the date of his termination to qualify for the reimbursement of relocation costs. On August 20, 1979, Mr. Cleary, responding to Mr. Grant, objected to the three-month limitation, stated that it violated company policy, and re-stated his preference for a cash settlement. Three days later, Mr. Grant responded by extending the time for relocation until December 31, 1979, and by denying Mr. Cleary's request for a cash settlement.

 Mr. Cleary subsequently retained solicitors in London. On September 20, 1979, plaintiff's solicitors filed a complaint on his behalf with the London Industrial Tribunal. The complaint alleged that defendants had violated the law by discharging Mr. Cleary without giving him three months' notice as was required by English law. Defendants interposed defenses and on January 28, 1980, a settlement was reached which obtained the approval of the Industrial Tribunal. The settlement agreement stated that Operations would pay to Mr. Cleary

 
the sum of $: 7,556 in full and final settlement of these proceedings and of all other (if any) claims which [Mr. Cleary] could have brought in the United Kingdom against [Operations] arising under the terms of his contract of employment or out of his dismissal.

 In an affidavit filed with this court, one of Mr. Cleary's solicitors stated that the limitation of the settlement to claims which could have been brought in the United Kingdom was intended to preserve Mr. Cleary's claims under the ADEA which had been previously filed in the United States.

 Plaintiff's age discrimination claim had been filed with the EEOC on November 29, 1979, 180 days after his discharge. On January 15, 1980, the EEOC began the conciliation process. About four months later, on May 14, 1980, the EEOC advised Mr. Cleary that its attempt at conciliation had not succeeded and stated that plaintiff should file a charge of unlawful discrimination with the New Jersey Division on Civil Rights. A charge had already been filed with New Jersey, however, on November 28, 1979, 159 days after Mr. Cleary's termination. Defendants' general counsel, William Verdon, had been provided with a copy of the EEOC and New Jersey filings by plaintiff on January 11, 1980.

 On July 23, 1980, the New Jersey Division on Civil Rights notified Mr. Cleary that it would not exercise jurisdiction because plaintiff was not an "inhabitant" of New Jersey. At the time plaintiff's charge was filed with the New Jersey agency, USL's headquarters were located in the state. At the time of plaintiff's termination, however, USL's headquarters were located in New York.

 Plaintiff filed a complaint with this court on June 9, 1981, alleging violations of the ADEA. In the answer subsequently filed, defendants contended that because USL was located in New York at the time of Mr. Cleary's termination, the cause of action arose, "if not in London, England, then in New York, New York." Responding to defendants' contention, plaintiff filed a charge of discrimination on November 30, 1981, over two years after his dismissal, with the New York State Division on Human Rights. On March 4, 1982, New York declined jurisdiction over the complaint because it had been filed over one year after the alleged act of discrimination occurred.

 In this action, plaintiff seeks to have his severance pay supplemented with one year's cost of living allowance, and seeks further compensation for relocation, an allowance for home leave, interest, costs, attorney's fees, liquidated damages, and such other relief as the court may deem appropriate.

 DISCUSSION OF THE LAW

 Defendants contend that plaintiff's action is barred by the doctrine of election of remedies because two mutually exclusive sets of facts are being alleged to support jurisdiction under the laws of two nations, England and the United States. By voluntarily choosing to bring suit against Operations in England, defendants allege, plaintiff has admitted that his employment rights are governed by the laws of that country. Therefore, defendants reason, plaintiff cannot consistently maintain that he is also protected under United States law.

 Plaintiff, on the other hand, alleges that the jurisdictional facts he has asserted are not at all inconsistent. Plaintiff contends that whether an individual has rights under England's Employment Protection (Consolidation) Act of 1978, depends upon the situs of one's employment and not one's nationality. The Act, which does not prohibit age discrimination, but does clothe employees with certain rights upon dismissal from employment, defines, in Section 141, the class of persons excluded from the coverage of the Act:

 
This Act shall not apply in relation to employment during any period when the employee is engaged in work wholly or mainly outside Great Britain unless the employee ordinarily works in Great Britain and the work outside Great Britain is for the same employer.

 Plaintiff therefore is correct that a United States citizen working full time in England, is entitled to the protections of the English Act. In addition, there is no reason why that same individual cannot consistently claim also to be entitled to protections under United States law, especially where, as here, the rights asserted under each law are fundamentally different. Plaintiff's claim under English law was for the failure of his employer to comply with minimum notice requirements for termination. His claim under United States law is for age discrimination.

 The doctrine of election of remedies is a harsh doctrine which should be sparingly applied. Newport News Shipbuilding and Dry Dock Company v. Director, Office of Workers' Compensation Programs, United States Department of Labor, 583 F.2d 1273, 1277 (4th Cir. 1978), cert. denied, 440 U.S. 915, 59 L. Ed. 2d 465, 99 S. Ct. 1232 (1979). The rule prohibits a party, in asserting his rights, from occupying inconsistent positions "in relation to the facts which form the basis of his respective remedies." Abdallah v. Abdallah, 359 F.2d 170, 174 (3d Cir. 1966). The purpose of the rule is to prevent double recoveries, forum shopping, and harassment of defendants by dual proceedings. Consolidated Express, Inc. v. New York Shipping Association, Inc., 602 F.2d 494, 525 (3d Cir. 1979), vacated on other grounds, 448 U.S. 902, 100 S. Ct. 3040, 65 L. Ed. 2d 1131 (1980). Plaintiff's factual assertions do not threaten these values and are not inconsistent. To the extent that there is an overlap in the respective remedies under English and American law, defendants would be entitled to a credit for any duplicate awards.


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