ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY.
Weis, Higginbotham and Sloviter, Circuit Judges.
A. LEON HIGGINBOTHAM, JR., Circuit Judge.
Plaintiff-appellant, Equal Employment Opportunity Commission ("EEOC" or "the Commission"), appeals an order of the United States District Court for the District of New Jersey granting summary judgment to defendant-appellee, Westinghouse Electric Corporation ("Westinghouse"). Appellant brings this action on behalf of 65 employees and contends that Westinghouse violated the Age Discrimination in Employment Act ("ADEA" or "the Act"), 29 U.S.C. §§ 621-634 (1976), by denying Layoff Income and Benefits to its employees aged 55 and older whose jobs were terminated by a plant closing. Appellant argues that such denial was improperly based on the employees' entitlement to early retirement benefits.
Viewing the record in the light most favorable to the appellant, we are asked to decide three issues: First, whether this action is time-barred under ADEA; second, assuming it is timely, whether the district court held correctly that reasonable factors other than age supported the denial of Layoff Income and Benefits to employees entitled to early retirement pension benefits; and third, whether Westinghouse's actions were in observance of the terms of a bona fide employee benefit plan and therefore excluded from ADEA coverage.
We find that the district court erred in disposing of this case by granting summary judgment. Therefore, we will reverse the order granting summary judgment and we will remand this case to the district court for trial.
On April 14, 1977, Paul Meola, a Westinghouse employee, filed an administrative complaint with the United States Department of Labor challenging Westinghouse's denial of Layoff Income and Benefits ("LIB") under the Pension and Insurance Agreement ("Pension and Insurance Agreement"). Meola argued that his eligibility for "Special Early Retirement" under the Westinghouse Electric Corporation Pension Plan ("Pension Plan") was an improper reason for denying him LIB benefits. Before the dispute could be resolved by the Department of Labor, however, Congress transferred enforcement authority to the EEOC,*fn1 which initiated this action below on behalf of Paul Meola and other "similarly situated" employees on March 28, 1980. The EEOC later amended its complaint on February 28, 1981 to add the names of 64 additional employees as injured parties in this suit.
All of these employees worked at the Westinghouse plant in Belleville, New Jersey when it closed on April 1, 1977. Westinghouse provided monetary benefits under the LIB Plan to "eligible" employees who were "laid off through no fault of [their] own for lack of work occasioned by reasons associated with the business, " such as a plant closing. Appendix ("App.") at 23. The LIB Plan defines an "eligible" employee as follows:
An Eligible Employee is an employe with two (2) or more full years of such service who is not entitled to early retirement, as specified in the Westinghouse Pension Plan, and is not on disability or leave of absence, who is laid off through no fault of his own for lack of work occasioned by reasons associated with the business (such as . . . [a] plant closing), and who has not been recalled to work.
The LIB Plan permits eligible employees to choose between two forms of payment -- lump-sum or weekly payments. Specifically, the Plan's lump-sum option provides:
(a) Lump Sum Payment up to Sixty (60) Days
Within sixty (60) days after a layoff which in Management's opinion will exceed six (6) months in duration, an Eligible Employe may permanently sever his relationship with the Company and may relinquish recall rights and service credits for any purpose (except such rights as may exist under the Pension Plan) and may thereupon receive the Total Maximum Sum available to him, together with vacation pay and any other sums due him, in a Lump Sum Payment. If such employe has vested rights under the Westinghouse Pension Plan, he may elect not to withdraw his pension contributions, if any.
(App. at 252) (emphasis added). By electing weekly payments, on the other hand, an employee neither severs his relationship with Westinghouse nor risks his recall rights. (App. at 254). Westinghouse operated this LIB Plan under the Pension and Insurance Agreement which is part of the collective bargaining agreement. (App. at 251-254).
Under this same collective bargaining agreement, Westinghouse must also maintain a pension plan. The pension plan in effect at the time of the Belleville Plant closing was a recently amended version of the 1966 Pension Plan which delineated four categories of retirement -- "normal retirement," "early retirement," "deferred retirement" and "selected retirement." (App. at 175-176). For the purposes of this appeal, we will focus on the "early retirement" and "selected retirement" provisions.
Two "early retirement" options were available. An employee with 10 or more years of service could retire on the first day of the month following his 60th birthday. An employee with 10 or more years of service who was laid off after reaching his 59th birthday, but before reaching his 60th birthday, who had not returned to work, could retire on the first day of the month following his 60th birthday, provided that he had not elected to receive a lump-sum payment related to the layoff. Finally, under "selected retirement," an employee with 30 or more years of service could retire on the first day of any month after his 62nd birthday and prior to his normal retirement date. (App. at 175-78).
The early retirement and selected retirement provisions of this Pension Plan were amended on August 1, 1976 to provide that an employee with either more than 10 years of service, or more than 30 years of service who is laid off as a result of plant closing, after reaching his 55th birthday and before attaining his 60th birthday, could retire so long as he had not received a lump-sum payment occasioned by the lay off and had not returned to work. (App. at 260, 276-277).
Under Westinghouse's interpretation of the LIB Plan and the Pension Plan, to be "eligible" for LIB, an employee must not be "entitled" to early retirement as defined in the Pension Plan. Thus, between January 12, 1977 and March 17, 1977, Westinghouse "counseled" 65 employees who were 55 years or older that they were ineligible for LIB because they were "entitled" to early retirement. (App. at 51-53). Accordingly, when the Belleville, New Jersey Plant closed on April 1, 1977 Westinghouse summarily placed these employees on early retirement and denied them LIB benefits.
EEOC maintains that Westinghouse's policy of excluding employees 55 years or older from LIB payments violated Section 4(a) of the ADEA.*fn2 29 U.S.C. § 623(a). EEOC charges that Westinghouse "has willfully violated and is now willfully violating" the provisions of the ADEA by continuing its policy of denying LIB to employees on the basis of age. (App. at 5). EEOC seeks recovery of severance pay, liquidated damages and a permanent injunction prohibiting Westinghouse's enforcement of the eligibility provision of the LIB Plan insofar as it results in the denial of LIB to any employee because of his eligibility for retirement benefits under Sections 16(c) and 17 of the Fiar Labor Standards Act ("FLSA"), 29 U.S.C. §§ 216(c), 217.
Throughout the employees' journey to have this case decided on the merits of their claim of illegal age discrimination, they have been confronted with numerous barriers to preclude any relief. These barriers include Westinghouse's defense that this action was time-barred under the applicable statutes of limitations in Section 4(e). 29 U.S.C. § 626(e). Westinghouse also asserts that regardless of the applicability of the statute of limitations, its conduct was sanctioned by the ADEA in that it was excused under the specific exceptions in either Section 4(f)(1) or 4(f)(2). 29 U.S.C. §§ 623(f)(1), 623(f)(2).
Section 4(f)(1) permits an employer to differentiate among employees on the basis of age if "age is a bona fide occupational qualification reasonably necessary to the normal operation of the particular business, or where such differentiation is based on reasonable factors other than age." 29 U.S.C. § 623(f)(1). Section 4(f)(2) allows an employer "to observe the terms of a bona fide seniority system or any bona fide employee benefit plan such as a retirement, pension, or insurance plan, which is not a subterfuge to evade the purposes" of the Act. 29 U.S.C. § 623(f)(2). On the basis of these defenses, Westinghouse moved for summary judgment.
The district court granted Westinghouse's motion for summary judgment on several grounds. The court concluded that this action was time-barred. Alternatively, the court held that, even if timely, Westinghouse's practices regarding the denial of LIB to older workers were excused on the basis that (1) any differences in consequences were based on reasonable factors other than age and (2) that Westinghouse had acted in observance of the terms of a bona fide employee benefit plan which was not a subterfuge to evade the purposes of the Act. (App. at 65-94).
The principles governing review of the grant or denial of a motion for summary judgment are well settled. Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment is appropriate only where "there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c).
This court is required to ascertain the existence of any disputed issues of material fact by viewing the record in the light most favorable to the party opposing the motion. All inferences, doubts and issues of credibility are resolved against the party moving for summary judgment. United States v. Diebold, Inc., 369 U.S. 654, 655, 8 L. Ed. 2d 176, 82 S. Ct. 993 (1962)(per curiam); Ely v. Hall's Motor Trans. Co., 590 F.2d 62, 66 (3d Cir. 1978). In this case, the EEOC challenges Westinghouse's summary judgment victory below; therefore, we must accept as true the EEOC's properly plead factual allegations. Bishop v. Wood, 426 U.S. 341, 348, 48 L. Ed. 2d 684, 96 S. Ct. 2074 (1976); Mahler v. United States, 306 F.2d 713, 715 (3d Cir.), cert. denied, 371 U.S. 923, 9 L. Ed. 2d 231, 83 S. Ct. 290 (1962). Moreover, we must draw all reasonable inferences against Westinghouse. EEOC v. Home Insurance Company, 672 F.2d 252, 257 (2d Cir. 1982).
By reason of the district court's dismissal of the complaint, we must review each of the court's alternative findings and holdings. The district court's decision was no model of clarity. The court wrote three separate memorandum opinions, and in the two subsequent opinions, it repudiated the holdings made in the earliest opinion. While the court's rationale was not always clear, the result was always the same. In each instance the court concluded that these 65 employees had no viable claim. (App. at 63, 65, 96).
We will analyze first, the issues pertaining to timeliness under ADEA statute of limitations; and second, the issues of whether the district court erred in concluding that Westinghouse had valid ...