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EEOC v. WESTINGHOUSE ELEC. CORP.

October 29, 1986

Equal Employment Opportunity Commission
v.
Westinghouse Electric Corp.



The opinion of the court was delivered by: LECHNER

This age discrimination lawsuit was commenced in this Court more than six years ago; it has been assigned to and handled by more than one District Judge. By order, filed on July 16, 1986, it was reassigned to me. The action alleges violations of the Age Discrimination in Employment Act of 1967, as amended, (the "ADEA"), 29 U.S.C. § 621, et seq. Jurisdiction is founded on 28 U.S.C. §§ 1337, 1343 and 1345. Presently before the Court is plaintiff's motion for summary judgment.

 On April 1, 1977, the Westinghouse Electric Corporation ("Westinghouse") closed its plant located in Belleville, New Jersey, laying off a number of its employees. Most employees who were terminated and not relocated to other Westinghouse facilities were provided either with certain layoff income and benefits ("LIB") or, if they were so eligible, with early retirement benefits. The Equal Employment Opportunity Commission ("EEOC"), on behalf of Paul Meola, Sr. ("Meola") and other similarly situated Westinghouse employees at the Belleville plant, instituted this action alleging Westinghouse had violated provisions of the ADEA by failing to provide LIB to those employees eligible for early retirement under Westinghouse's pension plan. *fn1" The EEOC seeks (1) an injunction enjoining Westinghouse from denying LIB benefits to terminated employees eligible for early retirement, (2) appropriate LIB benefits and liquidated damages for all adversely affected employees from the Belleville plant and (3) other appropriate relief.

 I. Procedural Background

 On April 14, 1977, a complaint alleging age discrimination against Westinghouse was filed on behalf of Meola with the United States Department of Labor ("Labor"). (Duffy Aff., filed July 9, 1986, Ex. L.) After conducting an investigation, Labor issued a letter of violation against Westinghouse on May 5, 1979. The letter charged Westinghouse with a violation of the ADEA for failing to provide LIB to employees laid off from the Belleville plant who were eligible for early retirement under Westinghouse's pension plan. The letter sought to commence conciliation efforts with Westinghouse. (Plaintiff's Brief, Ex. 4.) A conciliation conference, attended by Labor and Westinghouse representatives, apparently took place on May 11, 1979. By letter, dated May 30, 1979, however, Westinghouse affirmatively denied that its policies were violative of the ADEA and declined to pursue the EEOC's efforts at conciliation. (Plaintiff's Brief, Ex. 5.)

 Effective July 1, 1979, Congress transferred enforcement authority over the ADEA from Labor to the EEOC. *fn2" By letter, dated November 30, 1979, the EEOC (1) informed Westinghouse that it concurred in Labor's finding that Westinghouse's policy at the time the Belleville plant was closed violated the ADEA and (2) requested further information from Westinghouse. (Plaintiff's Brief, Ex. 6.) By letter, dated December 11, 1979, Westinghouse declined to provide the EEOC with further information. (Plaintiff's Brief, Ex. 7.)

 By complaint filed with this Court on March 28, 1980, the EEOC commenced this action on behalf of Meola and other similarly situated Westinghouse employees from the Belleville plant. The complaint charged Westinghouse with violations of the ADEA "by its failure to provide severance pay to terminated employees age 55 and older who have had ten years service with the Defendant and who are eligible for retirement benefits." (Complaint para. 7.) The complaint sought to enjoin Westinghouse from denying severance pay to employees eligible for early retirement and sought damages for adversely affected employees. On March 3, 1981 the EEOC filed an amended complaint seeking the same relief but adding 64 former Belleville employees as plaintiffs.

 In July, 1981, the parties each moved for summary judgment. Several hearings were held and apparently several opinions were filed, culminating in a final opinion filed in July, 1982 granting summary judgment in favor of Westinghouse and denying summary judgment for the EEOC. EEOC v. Westinghouse Electric Corp., 577 F. Supp. 1029 (D.N.J. 1982) (hereinafter cited as " Westinghouse (D.N.J.)").

 The EEOC appealed and the Third Circuit reversed the summary judgment which had been awarded to Westinghouse. EEOC v. Westinghouse Electric Corp., 725 F.2d 211 (3d Cir.), cert. denied, 469 U.S. 820, 105 S. Ct. 92, 83 L. Ed. 2d 38 (1984) (hereinafter cited as " Westinghouse (3d Cir.)"). The Third Circuit found the record to contain issues of material fact as to whether (1) Westinghouse had acted "willfully," thereby triggering a three year rather than two year statute of limitations, and (2) Westinghouse employees had received clear and unequivocal notice of the plant closing prior to the actual date of the closing. Id. at 225. In addition, the Third Circuit ruled that based upon the record before it, *fn3" Westinghouse had failed to establish defenses provided under the ADEA. Thus, the Third Circuit remanded for reconsideration of the statute of limitations issues. Id.

 Upon remand, additional discovery was conducted. By notice filed May 21, 1986, the EEOC brought the present motion for summary judgment that the Westinghouse policy violates the ADEA and that the action is not barred by the statute of limitations.

 Independent of the action now before this Court, the EEOC has pursued a similar lawsuit against Westinghouse in the United States District Court for the Eastern District of Pennsylvania. That action stems from a Westinghouse plant closing in Pennsylvania, apparently in 1982. By complaint, filed in November, 1983, the EEOC charged Westinghouse with violations of the ADEA for implementing the same policy at issue in this case. That complaint was amended in October, 1984 to expand the scope of the suit nationwide to address the Westinghouse policy as applied in all of its plants. After a trial, that court issued a scathing opinion finding the Westinghouse policy in violation of the ADEA. EEOC v. Westinghouse Electric Corp., 632 F. Supp. 343 (E.D. Pa. 1986) (hereinafter cited as " Westinghouse (E.D. Pa.)"). *fn4" That case is apparently on appeal to the Third Circuit.

 II. Facts

 Since 1960, Westinghouse has negotiated with representatives of its employees a variety of agreements providing certain benefits for the employees. Among the types of benefits provided by Westinghouse to its employees in 1960 were: retirement (Weaver Aff., filed July 9, 1986, Ex. B), insurance (Id., Ex. C) and severance benefits (Id., Ex. A, IV). Over time, these benefit plans have been modified and expanded as a result of continuing negotiations between Westinghouse and the employee representatives. Relevant to this action is the status of employee retirement and LIB benefits as they existed in 1977 when the events leading up to and culminating in the closing of the Belleville plant occurred. The essential components of the two plans as they existed in 1977 are not complicated.

 Retirement. Westinghouse employees who began their Westinghouse employment at or before age 60 are entitled to begin receiving "normal retirement" benefits at age 65. (Weaver Aff., filed July 9, 1986, Ex. M § II A.) Employees with at least ten years of service with Westinghouse qualify for "early retirement." (Id. § II. C. I.) These employees may retire after age 60 and before age 65 with benefits somewhat reduced from what would obtain under normal retirement. Those employees with more than ten, but less than thirty, years of Westinghouse employment who are laid off after age 59 but before age 60 are eligible for early retirement benefits. (Id. § II. C. 2.) Those employees with more than ten years of service and who are laid off as a result of a plant close-down after reaching age 55 and before age 60, are eligible for retirement benefits. (Id. § II. C. 3.) Employees with more than thirty years of Westinghouse service may qualify for "selected retirement." These employees may retire after reaching age 58 and before age 65 with benefits somewhat reduced from what would obtain under normal retirement. (Id. § II. D. 1.) Those employees with more than thirty years of Westinghouse service who are laid off as a result of a plant closing after reaching age 55 and before age 60 are eligible for selected retirement benefits. (Id. § II. D. 2.) *fn5"

 LIB. Employees with more than two years of service with Westinghouse, who are not eligible for early or selected retirement and who are laid off, are eligible to receive LIB benefits. (Id. Ex. O, p. 2.) *fn6" Such employees are entitled to receive a "Total Maximum Sum" defined to equal one week's pay for each full year of service with Westinghouse. The Total Maximum Sum must be not less than four weeks' pay. (Id., p. 3.) Where, as in this case, the plant closing is expected to last for more than six months, each eligible employee must choose one of three options for receiving his Total Maximum Sum.

 Option A, entitled "Lump Sum," requires Westinghouse to pay the entire amount at once and the employee to sever his relationship with the company, relinquishing his recall and service credits. (Id.) Under Option B, Westinghouse is required to make weekly payments to the employee sufficient to make up the difference between the employee's unemployment compensation and 60% of his weekly pay. Once the employee's unemployment compensation is depleted, Westinghouse continues to pay 60% of the employee's weekly salary until such time as the Total Maximum Sum is depleted or twelve months elapse. (Id., pp. 3-4.) Under Option C the employee receives the balance of his Total Maximum Sum twelve months after the plant closing. (Id., p. 4).

 Each of the plaintiffs in this action, therefore, is at least 55 years of age, with at least ten years of service with Westinghouse and without rights or opportunities at other Westinghouse facilities. These plaintiffs all receive some form of retirement benefits and, because of their eligibility for early retirement, did ...


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