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Nolan v. Otis Elevator Co.

Decided: November 29, 1984.

FRED S. NOLAN, RALPH R. BATTISTA, CHARLES W. CLEARY, JOSEPH A. DAVIS, WILLIAM J. DAVITT, JR., ANTHONY G. GOMES, JAMES HALLECK, DONALD C. HALLIWELL, PHYLLIS J. GORLEY KERKAWICH, JOSEPH M. KARKOSKY, JR., CHARLES KERR, PATRICK J. LARGEY, JR., ARMOND MACHADO, EDWARD M. MCBRIDE, THOMAS P. NUGENT, PETER J. REILLY, HERMAN J. RUSSOMANNO, EUGENE A. SCANNEPICO, RAYMOND J. SMITH, JOHN T. STARR, HAROLD C. STOLL, LOUIS C. TREMBLE, JAMES VAN BRAMER, WALTER WARD AND DANIEL M. WATSON, PLAINTIFFS-APPELLANTS,
v.
OTIS ELEVATOR COMPANY, A CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF NEW JERSEY, DEFENDANT-APPELLEE



On appeal from Superior Court, Law Division, Hudson County.

Antell, J. H. Coleman and Simpson. The opinion of the court was delivered by, Antell, P.J.A.D.

Antell

[197 NJSuper Page 470] On December 31, 1980 defendant closed its Harrison plant, resulting in a significant reduction in its work force. A plan was formulated, known as The Harrison Special Supplemental Retirement Plan, under which managerial employees with a minimum of 25 years of service who were over 55 years of age

could elect early retirement with substantial supplemental benefits. The plaintiffs herein, who also had a minimum of 25 years of service, but who were under 55 years of age, were awarded severance pay amounting to one week's salary for each year of service as was defendant's usual severance policy. These individuals were denied the benefits of The Harrison Special Supplemental Retirement Plan and brought this action under the New Jersey Law Against Discrimination, N.J.S.A. 10:5-1 et seq. for relief in the form of termination benefits equal to those received by former employees who were over 55. An order for summary judgment was entered in the Law Division in favor of defendant, from which plaintiffs now appeal, on the ground that the controversy is preempted by the federal Employee Retirement Income Security Act (ERISA), 29 U.S.C.A. § 1144(a). ERISA is a regulatory enactment designed to protect the interests of employees and their beneficiaries in employee fringe benefits and to set standards and responsibilities for fiduciaries of those benefit plans. It does not deal with the subject of discrimination in the provision of employee benefits.

The order under review rests on § 514(a) of ERISA, 29 U.S.C.A. § 1144(a). That subparagraph preempts ". . . any and all state laws insofar as they may now or hereafter relate to any employee benefit plan" regulated by ERISA. It is clear that the plan in question comes within the scope of the foregoing language. However, § 514(d), 29 U.S.C.A. § 1144(d), provides that the law shall not be "construed to alter, amend, modify, invalidate, impair, or supersede any law of the United States . . . or any rule or regulation issued under any such law." Plaintiffs argue before us, as they did in the Law Division, that because the effect of preemption of the New Jersey Law Against Discrimination would be to modify and impair the federal Age Discrimination in Employment Act (ADEA), 29 U.S.C.A. § 623(a)(1) & (2), the case is excepted from preemption by § 514(d). The Law Division rejected this contention, reasoning that because the ADEA "is a self-contained independent statute [which] does not rely solely on state

statutes for enforcement * * * pre-emption of N.J.S.A. 10:5-1 would not 'impair or supercede' the ADEA." In the view of the Law Division this analysis was required by Shaw v. Delta Airlines, Inc., 463 U.S. 85, 103 S. Ct. 2890, 77 L. Ed. 2d 490 (1983).

The question before the court in Shaw v. Delta Airlines, Inc., supra, was whether an action brought under the New York Human Rights Law alleging discrimination on the basis of pregnancy was preempted by ERISA. The case arose before the effective date of the federal Pregnancy Discrimination Act of 1978, 42 U.S.C.A. § 2000e(k), amending Title VII of the Civil Rights Act of 1964, 42 U.S.C.A. 2000e. Appellants there argued that by preempting the New York law the means by which Title VII is enforced would be altered and the case therefore came within the exception created by § 514(d). The Supreme Court noted that although the state law played a significant role in the enforcement of Title VII, the exception to preemption was only intended to apply to "nonconflicting state laws." 463 U.S. at , 103 S. Ct. at 2902, 77 L. Ed. 2d at 503. Accordingly, the Court's decision that the state law was partially preempted by ERISA turned on the fact that the former prohibited a form of discrimination not prohibited by Title VII. As the court stated, preemption of state laws which "prohibit employment practices that are lawful under Title VII" would not impair Title VII within the meaning of § 514(d). 463 U.S. at , 103 S. Ct. 2902, 77 L. Ed. at 504.

In this case the complaint rests on the factual contention that the discrimination claimed to be in violation of the New Jersey Law Against Discrimination also violates ADEA. Assuming, as we must for purposes of this appeal, that this contention will be supported by the proofs, we are therefore not confronted by the obstacle to relief found in Shaw v. Delta Airlines, Inc., supra.

That preemption of the New Jersey Law Against Discrimination would impair federal law appears to be affirmatively

answered by the reasoning of Oscar Mayer & Co. v. Evans, 441 U.S. 750, 99 S. Ct. 2066, 60 L. Ed. 2d 609, (1979). There the Court decided that § 14(b) of the ADEA, 29 U.S.C.A. § 633(b), required the complainant to file a state action, where available, and wait a specified number of days before bringing a federal action under the federal statute. This result was explained in the following language:

We therefore conclude that § 14(b), like § 706(c) [of Title VII], is intended to screen from the federal courts those discrimination complaints that might be settled to the satisfaction of the grievant in state proceedings. We further conclude that prior resort to appropriate state proceedings is required under § ...


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