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BONHAM v. DRESSER INDUS.

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA


December 28, 1976

Emra Joseph BONHAM, Plaintiff,
v.
DRESSER INDUSTRIES, INC., a corporation, Defendant

The opinion of the court was delivered by: MCCUNE

McCUNE, District Judge.

 This action arises under the Age Discrimination in Employment Act of 1967, 29 U.S.C. § 621, et seq. (the Act) and concerns an act of alleged age discrimination by the defendant, Dresser Industries, Inc. (Dresser), against plaintiff, a former employee. Plaintiff has filed a two-count complaint, alleging in Count I a violation of the Act and basing jurisdiction upon § 626(c) *fn1" of the Act and 28 U.S.C. § 1331. In Count II, plaintiff alleges a breach of an employment contract under Pennsylvania law, said to arise out of the same factual background as Count I, invoking this court's diversity jurisdiction. Presently before this court is the defendant's motion to dismiss both counts of plaintiff's complaint pursuant to Rules 12(b)(1) and 12(b)(6) respectively of the Federal Rules of Civil Procedure.

 The pertinent facts which comprise the basis for plaintiff's complaint may be briefly summarized. Plaintiff, a Pennsylvania resident, began his employment with the defendant *fn2" on March 18, 1968, *fn3" as a manager of profit planning in Dresser's Pittsburgh office. By April of 1974, plaintiff had attained the title of "Manager-Factory Accounting" and remained in this position until his discharge in 1975.

 The actual date of plaintiff's discharge, however, has not been agreed upon by the parties. On the one hand, plaintiff contends that his employment with Dresser was "wrongfully and unlawfully terminated because of his age and for no other just cause" on December 31, 1975. *fn4" On the other hand, Dresser contends that plaintiff's employment was terminated on October 31, 1975, *fn5" because "his work performance was not up to the standards of the job. *fn6" At any rate, plaintiff was 46 years of age at the time of Dresser's alleged discriminatory action. *fn7"

 Subsequent to October 31, 1975, plaintiff continued to receive regular bi-monthly paychecks throughout November and December of 1975. The last paycheck he received, dated December 31, 1975, *fn8" included a vacation payment to January 15, 1976. On January 13, 1976, plaintiff received a letter from Dresser which advised him of his rights under Dresser's Retirement Income Plan. The calculations pertinent to that plan were based on a termination date of December 31, 1975. *fn9" On January 15, 1976, plaintiff communicated with John V. James, President and Chief Executive Officer of Dresser Industries, Inc., regarding the possibilities of employment in another division of Dresser. His re-employment was denied by Dresser in communications dated January 19, 1976, and February 18, 1976. *fn10"

 Thereafter, plaintiff went to Florida in an effort to find employment and returned to Pennsylvania in April of 1976. Plaintiff claims that it was at this time that he first became aware of his potential rights under the Act, *fn11" and consulted counsel in Butler, Pennsylvania. Then, on June 15, 1976, plaintiff consulted his present counsel who sent the required statutory notices by certified mail on June 16, 1976, to John O'Brien, Area Director for the United States Department of Labor, *fn12" and to the Pennsylvania Human Relations Commission. *fn13" These letters were received by the respective agencies on June 18, 1976. Subsequently, on August 20, 1976, plaintiff commenced this suit.

 I. The Act

 The Age Discrimination in Employment Act was enacted in 1967 for the express purpose of promoting "employment of older persons based on their ability rather than age," and prohibiting "arbitrary age discrimination in employment." 29 U.S.C. § 621(b); Burgett v. Cudahy Company, 361 F. Supp. 617, 620 (D. Kan. 1973). The provisions of the Act were intended to cover employers, *fn14" employment agencies and labor organizations, 29 U.S.C. § 623, and the prohibitions set forth in the Act are limited to individuals between the ages of 40 and 65 years of age, 29 U.S.C. § 631. Exempted from the proscriptions of the Act are those discharges based on "good cause," 29 U.S.C. § 623(f)(3). *fn15"

 Although the primary responsibility for the enforcement of the Act is vested with the Secretary of Labor, the Act does permit an aggrieved individual to commence a civil action for legal or equitable relief, 29 U.S.C. § 626(c). However, such an action by an individual is subject to strict procedural requirements which are set forth in 29 U.S.C. § 626(d). *fn16"

 Under § 626(d), an individual is required to file a notice of intent to sue with the Secretary within 180 days after the alleged discriminatory act occurred. Then, § 626(d) requires that the plaintiff wait sixty days following the notice of intent to sue before commencing suit. Mizuguchi v. Molokai Electric Company, 411 F. Supp. 590, 593 (D. Hawaii 1976). However, § 626(d) further provides that if § 633(b) *fn17" applies, the requisite notice of intent to sue must be filed within 300 days after the alleged discriminatory act occurred, or within 30 days after the receipt of notice of termination of state proceedings.

 The act of alleged age discrimination took place in Pennsylvania. Pennsylvania is a State which has a law prohibiting age discrimination in employment *fn18" and establishing a State authority to grant or seek relief from such discrimination. *fn19" Pennsylvania law further requires that:

 

". . . Any complaint filed pursuant to this section must be so filed within ninety days after the alleged act of discrimination. . . ." (emphasis supplied). *fn20"

 Thus, there are three limitations periods relevant to the instant action: (1) the 180-day period for filing a notice of intent to sue with the Secretary under § 626(d)(1); (2) the 300-day period for filing a notice of intent to sue with the Secretary, if § 633(b) applies, under § 626(d)(2); and (3) the 90-day state period for filing a complaint with the Pennsylvania Human Rights Commission under 43 P.S. § 959.

 II. Jurisdiction

 A. The Date of the "alleged unlawful practice," i.e., the Date of Termination of Plaintiff's Employment.

 The threshold question which this court must decide is when the "alleged unlawful practice occurred," i.e., on October 31, 1975, as the defendant contends, or on December 31, 1975, as the plaintiff contends. *fn21" This determination is essential to our finding of whether plaintiff timely filed his notice of an intent to sue under the Act and Pennsylvania law. We will deal with the defendant's arguments in support of its contention first.

 In support of Dresser's contention that October 31, 1975, was the date when the "alleged unlawful practice occurred," *fn22" Dresser relies upon the Affidavit of Louis J. Reeg, Jr., *fn23" which reveals that the following "occurred" on that date: (1) plaintiff's employment with Dresser was involuntarily terminated; (2) plaintiff was informed of said termination; (3) plaintiff never worked for Dresser subsequent to that date; and (4) plaintiff's employment was "officially" terminated for purposes of Dresser's personnel records and plaintiff's subsequent unemployment compensation application.

 In response, plaintiff relies upon his own Affidavit and accompanying documents in support of his contention that December 31, 1975, is the effective date under the Act. These documents reveal that: (1) plaintiff continued to receive bi-monthly paychecks through December 31, 1975; (2) his rights under Dresser's Retirement Income Plan were based on a termination date of December 31, 1975; and (3) his Group Life Insurance remained in effect through December 31, 1975.

 With regard to plaintiff's receipt of regular paychecks through December 31, 1975, Dresser argues that such payments merely represented severance pay equivalent to what his salary would have been through December 31, 1975, and, therefore, such payments do not establish that the "unlawful practice occurred" on the date plaintiff received his last severance payment, i.e., December 31, 1975. On the contrary, Dresser argues, relying upon Doski v. M. Goldseker Co., supra, n.21, and Olson v. Rembrandt Printing Co., 511 F.2d 1228, 1234 (8th Cir. 1975), that the "unlawful practice", if any, occurs on the date of the actual discharge even though plaintiff may receive severance payments thereafter. We agree. Although both Doski and Olson deal with alleged sex discrimination in employment under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., and both considered the issue of whether discrimination alleged by a former employer can constitute a "continuing" violation so as to toll the similar notice provisions of that Act, we find both courts' reasoning regarding when a "discharge" actually occurs to be persuasive in light of the definition of a "discharge" set forth in In Re Public Ledger, Inc., 63 F. Supp. 1008, 1015 (E.D. Pa. 1945), rev'd 161 F.2d 762 (3d Cir. 1947):

 

". . . To discharge an employee is to remove him temporarily or permanently from employment. . . . In order that there be a discharge by the employer, there must be some affirmative action taken by the employer. There must be some conduct on the part of the employer, indicating that he will no longer be bound by the contract of employment. . . . There must also be an intention on the part of the employer to abrogate the contract, and there must be some communication of that intent by word or act to the employee."

 See also: Fredericks v. Georgia-Pacific Corporation, 331 F. Supp. 422, 428-29 (E.D. Pa. 1971).

 We believe that plaintiff's "discharge" occurred on October 31, 1975, since Dresser orally communicated this fact to plaintiff on that date, plaintiff never performed further services for Dresser subsequent to that date, and plaintiff's personnel record and unemployment compensation application both listed that date as the "official" date of termination for Dresser's administrative purposes. The mere fact that plaintiff received severance pay until December 31, 1975, and pension benefits and life insurance were calculated through December 31, 1975, does not affect, in our opinion, the actual date when plaintiff's services were terminated by Dresser and he was effectively "discharged" from his employment. See: Davis v. RJR Foods, Inc., 420 F. Supp. 930, 931, n.1 (S.D.N.Y. 1976).

 Although not cited in plaintiff's brief, our research indicates only one case that discusses this issue and lends support to plaintiff's position, Moses v. Falstaff Brewing Corporation, supra, n.22. This court is, of course, not bound by the decision of the Eighth Circuit. However, we believe that our opinion is in accordance with the holding in that case. *fn24"

 Therefore, we hold that the "alleged unlawful practice," 29 U.S.C. § 626(d), occurred on October 31, 1975, and the statutory time periods begin to run from that date.

  B. Plaintiff's Alleged Failure to Comply with the Statutory Requirements of 29 U.S.C. §§ 626(d) and 633(b), and 43 P.S. § 959.

 Since we have concluded that the "alleged unlawful practice," i.e., plaintiff's discharge, occurred on October 31, 1975, we next turn to Dresser's contention that since plaintiff did not file the required notice of intent to sue with the Secretary within 180 days after the alleged unlawful practice occurred, *fn25" plaintiff's complaint must be dismissed.

 We are aware of the great weight of authority which supports Dresser's contention, and recognize that other district and circuit courts have uniformly held that the 180-day notice requirement of 29 U.S.C. § 626(d)(1) is a jurisdictional prerequisite to filing an action under the Act. *fn26" Likewise, this principal has been followed in this District. See: Balc v. United Steelworkers of America, 6 E.P.D. P 8948, at page 6039 (W.D. Pa. 1973). Therefore, we find that plaintiff's letter of June 16, 1976, notifying the Secretary of his intent to file an age discrimination action under the Act, which was sent 229 days after his alleged unlawful discharge, did not comply with the 180-day requirement of § 626(d)(1) of the Act.

 We thus turn to the question of whether plaintiff falls within the ambit of § 626(d)(2) of the Act, where notice can be given within a 300-day period following an alleged unlawful practice.

 Section 626(d)(2) affords its more liberal notice period only in those situations in which § 633(b) of the Act is applicable. Section 633(b), as stated earlier, applies to those actions in which the alleged unlawful practice occurred in a state which has (1) a law prohibiting age discrimination in employment and (2) a state agency authorized to seek relief for individuals suffering age discrimination. Pennsylvania is a § 633(b) state. *fn27"

 Dresser contends that the more liberal 300-day notice period of § 626(d)(2) is not applicable here since, before commencing suit in this court, plaintiff failed to file his complaint with the Pennsylvania Human Rights Commission within 90 days of October 31, 1975, as required by 43 P.S. § 959, or at most, within the 180-day period set forth in § 626(d)(1) of the Act, and, therefore, this failure is a jurisdictional bar to plaintiff's suit in this court.

 In response, plaintiff argues that the Act does not require him to exhaust state remedies as a prerequisite to the institution of a federal suit, citing Goger v. H. K. Porter Company, Inc., 492 F.2d 13, 15 (3d Cir. 1974). *fn28"

  This issue, namely whether a plaintiff is required to initially make a timely report to an appropriate state agency before commencing a federal action and whether failure to do so serves as a jurisdictional bar to plaintiff's action, has been considered by this Circuit on two prior occasions, and both of the applicable cases have been discussed by the parties in their respective briefs.

 In Goger v. H. K. Porter Company, Inc., supra, New Jersey law required that age discrimination in employment complaints be filed within 180 days of the alleged act of discrimination. However, plaintiff never filed a complaint with the appropriate New Jersey state agency responsible for the elimination of unlawful discrimination in employment based on age prior to the institution of her federal suit. The central issue presented was thus, whether § 633(b) requires an aggrieved individual to initially seek redress from the state agency before instituting suit in federal district court. The court addressing this issue stated: *fn29"

 

". . . [Although] the Act does not require an aggrieved person to exhaust state remedies as a condition precedent to the institution of a federal suit, it does require that the State be given a threshold period of sixty days in which it may attempt to resolve the controversy, normally by voluntary compliance. (492 F.2d at p. 15).

 

* * *

 

We . . . conclude that section 633(b) required [plaintiff] to seek relief from the appropriate New Jersey agency prior to instituting her suit in the federal district court." (492 F.2d at p. 16.).

 However, the court nevertheless vacated an order of dismissal, despite the failure of the plaintiff to resort to the state agency prior to filing a federal action for age discrimination, on "equitable" grounds, because plaintiff had been misled by a Labor Department representative and there had been no prior reported cases on this jurisdictional point. The court stated:

 

". . . [We] . . . consider equitable relief to be appropriate in view of the total absence . . . of any judicial decision construing section 633(b) during the period involved here and in view of the remedial purpose of the 1967 Act. In the future, however, we think the Congressional intent that state agencies be given the initial opportunity to act should be strictly followed and enforced." 492 F.2d at p. 17. (Emphasis supplied).

 See also: Sutherland v. SKF Industries, Inc., 419 F. Supp. 610, 612-13 (E.D. Pa. 1976).

 In the second case, McGarvey v. Merck & Co., Inc., 359 F. Supp. 525 (D.N.J. 1973), vacated without opinion, 493 F.2d 1401 (3d Cir. 1974), cert. den., 419 U.S. 836, 95 S. Ct. 64, 42 L. Ed. 2d 63 (1974), although plaintiff timely filed his notice of intent to sue with the Secretary of Labor under § 626(d)(1), he failed to allege that he had filed a complaint with or commenced proceedings before the Pennsylvania Human Relations Commission pursuant to 43 P.S. § 951, et seq. In fact, plaintiff never filed with the state agency. On this basis, defendant contended that § 633(b) of the Act barred plaintiff's action, relying upon cases interpreting 42 U.S.C. § 2000e-5(c), an analogous provision of Title VII of the Civil Rights Act of 1964, to require primary resort to state remedies as a jurisdictional prerequisite to a suit under the Act. *fn30" The court, accepting defendant's contention, dismissed plaintiff's complaint *fn31" stating:

 

"Section 633(b) should be construed to mean that plaintiff must first attempt to utilize available state remedies before filing a complaint alleging discrimination based upon age.

 

* * *

 

Thus, it is the opinion of this Court that where substantial relief against alleged age discrimination is available under state law, 29 U.S.C. § 633(b) requires the person aggrieved to pursue state remedies prior to filing a complaint with this Court.

 

[Citing Goger v. H. K. Porter Company, Inc., supra.] Since plaintiff here has failed to allege or offered to establish prior resort to the appropriate state remedy, this Court lacks jurisdiction over the subject matter. . . ." (359 F. Supp. at p. 528).

 Both of these cases relied upon by the parties, however, have a distinguishable feature from the instant case in that the plaintiffs in those cases never applied to a state agency. Here, plaintiff did apply to the applicable state agency, but was 139 days late under 43 P.S. § 959 and 49 days late under § 626(d)(1) of the Act. See: Gabriele v. Chrysler Corporation, supra, n.30, at page 668.

 It is our conclusion, based upon the particular facts presented here and the language presented by the Third Circuit in Goger and McGarvey, that a plaintiff is required by § 633(b) of the Act to initially commence an action with the appropriate state agency prior to instituting suit in federal district court and failure to do so constitutes a jurisdictional bar to a federal court action. *fn32"

 We, therefore, hold that plaintiff's failure to file a complaint within 90 days after October 31, 1975, as required by 43 P.S. § 959, *fn33" or within the shorter 180-day federal period *fn34" bars the instant action. Accordingly, Count I of plaintiff's complaint must be dismissed.

 III. Defendant's Alleged Breach of Plaintiff's Employment Contract

 In Count II of plaintiff's complaint, plaintiff alleged a breach of an oral contract of employment under Pennsylvania law, *fn35" invoking this court's diversity jurisdiction. In particular, plaintiff alleged that his employment with Dresser was "wrongfully and unlawfully terminated . . . because of [his] age and for no other just cause . . . [thereby] . . . contrary to the public policy of . . . Pennsylvania."

 In response, Dresser contends that plaintiff failed to allege, in his complaint, any duration or tenure of an alleged employment contract, and, therefore, absent such an allegation, Pennsylvania law states that such contract may be terminated at will by either party. In support, Dresser relies upon the principles set forth in Jackman v. Military Publications, Inc., 234 F. Supp. 217, 218 (E.D. Pa. 1964), aff'd 350 F.2d 383, 385 (3d Cir. 1965), and McKinney v. Armco Steel Corporation, 270 F. Supp. 360, 362 (W.D. Pa. 1967).

 In Jackman, the court, citing Cummings v. Kelling Nut Co., 368 Pa. 448, 451-52, 84 A.2d 323, 325 (1951), stated the Pennsylvania rule concerning the termination of employment contracts as follows:

 

"The general rule is that when a contract provides that one party shall render services to another or shall act as an agent, or shall have exclusive sales rights within certain territory, but does not specify a definite time or prescribe conditions which shall determine the duration of the relation, the contract may be terminated by either party at will. (Citation omitted). The burden is on the plaintiff in such cases to overcome the presumption by showing facts and circumstances establishing some tenure of employment. . . ." *fn36"

 In McKinney, the court stated:

 

"Absent a contract of employment for a definite term or unless restrained by some labor union contract, an employer may discharge an employee at will, anytime, without cause or reason, or for any reason he believes justifies the discharge, even though the employee believes the reason to be false. In such cases no action for damages can be maintained for wrongful discharge." *fn37"

 Plaintiff, in response, relies exclusively upon McGinley v. Burroughs Corporation, supra, n.32, at page 910. In McGinley, the court noted that discrimination by an employer on account of age is against the public policy of Pennsylvania, 43 P.S. § 952(b). The court then stated:

 

"Accepting plaintiff's allegation that he was discharged by the defendant on account of age as being true, then clearly such action is illegal because it is contrary to the public policy of Pennsylvania. Any contract, including a contract at will, which is terminated for a reason contrary to the public policy of Pennsylvania gives rise to a claim for breach of contract."

 Plaintiff urges this court to accept the reasoning presented in McGinley and adopt it in the factual context presented here.

 Our research reveals no other case that addresses this particular issue. Thus, we are presented with the difficult situation of reconciling two different theories of argument advanced by the parties in their respective briefs, both of which accurately state the position of existing law, but which necessarily culminate in a diametrically opposite result.

 As a starting point for our analysis, we must consider plaintiff's employment situation with Dresser. From our review of the record presented it is apparent that no formal, express written contract of employment was entered into by the respective parties, either at the time of plaintiff's hiring *fn38" or at a time prior to plaintiff's discharge. Further, no evidence has been presented by plaintiff which would indicate that his oral contract or employment was to last for any definite length of time. Thus, we find that plaintiff's employment was "at will," and, under applicable Pennsylvania law, subject to termination at any time by either party. Accordingly, due to the nature of the contract involved, plaintiff would be barred from maintaining an action for damages for his alleged wrongful discharge unless, of course, the applicable age discrimination statutes or the McGinley case provide some means for relief.

 It is clear that prior to the enactment of the Pennsylvania Human Relations Act of 1961 and the Federal Age Discrimination in Employment Act of 1967, plaintiff could not have maintained an action for breach of contract or wrongful discharge against Dresser, absent a contract of employment for a definite term, which as stated above, is not presented by the instant facts. With the enactment of these statutes, a discharged employee could commence a suit in federal court *fn39" when he believed that his discharge was purely discriminatory and based upon his age. *fn40" However, the statutes, by their clear language, were designed and intended to protect only against various types of discrimination41 which occur in employment relationships, and not merely to attack various discharges where age may have been a factor in the employer's decision, but some form of discrimination is not presented.

 Therefore, under the applicable statutes, we find that, notwithstanding the pertinent filing requirements, some form of discrimination has to be alleged by an aggrieved plaintiff in order for him to recover thereunder. A thorough review of the record before us fails to establish any basis for an age discrimination claim by plaintiff since we note a clear absence of any evidence in either plaintiff's complaint or his supporting affidavit which tends to show that younger, and perhaps as equally qualified, employees were hired as replacements for plaintiff's former position. In this respect, plaintiff's reliance upon McGinley v. Burroughs Corporation, supra, is clearly distinguishable, since in that case evidence was submitted by plaintiff which revealed that younger employees were hired by the defendant company, allegedly with the intention that these employees were to be replacements for plaintiff subsequent to his discharge. 407 F. Supp. at pages 906, 910.

 We believe that the logic presented by the court in the McGinley decision was intended to carve out an exception to the uniform Pennsylvania rule regarding the termination of "at will" employment contracts. Essentially, the reasoning presented in McGinley states that if some sort of discrimination in discharge can be shown to exist, then such action by an employer is indeed illegal, since it is violative of public policy, and, therefore, such action would give rise to a breach of contract claim. However, we find that the exception presented in McGinley, and relied upon exclusively by plaintiff, in support of Count II of his complaint, is not presented by the instant facts. Therefore, we decline to accept the principle set forth in McGinley as applicable to the factual averments present here.

 Further, we respectfully disagree with the McGinley court's holding that an illegal discharge, i.e., a discriminatory discharge, gives rise to a breach of contract claim, whether the discharge be under an "at will" employment contract, or otherwise. Rather, we prefer to say that a discriminatory discharge from a job held at will gives rise to a civil rights claim although it may sound in contract. We say this because there is no actual contract presented binding an employer to retain an employee at will for any length of time.

 We thus conclude that if an employee can allege a discriminatory discharge from employment on account of age, and timely file the appropriate notices set forth in the respective Acts, an appropriate action under the age discrimination statutes can be commenced. Likewise, if the employee can present evidence supporting such a claim of discrimination, a breach of "contract" action may lie within the exception to the Pennsylvania law concerning the termination of "at will" employment contracts as set forth in McGinley.

 Since plaintiff has failed to meet both of the requirements set forth above, and has failed to set forth any evidence which establishes that his oral employment contract was to last for any definite length of time, Count II of plaintiff's complaint must be dismissed and defendant's motion for summary judgment is, therefore, granted.


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