Appeal from the United States District Court for the Eastern District of Pennsylvania (D.C. Civ. No. 84-0804).
Before: GIBBONS and HIGGINBOTHAM, Circuit Judges and SAROKIN, District Judge.*fn*
A. LEON HIGGINBOTHAM, JR., Circuit Judge.
This is an appeal from a final order of the district court dismissing the complaint of appellant Louise Seredinski. Seredinski brought suit against her employer, Clifton Precision Products Company ("Clifton"), alleging (in addition to a variety of state law claims) that she had been a victim of sex discrimination in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. (1982) ("Title VII"), and age discrimination in violation of the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. § 621 et seq. (1982). for the reasons that follow, we will vacate in part the judgment of the district court, and remand for further proceedings.
Seredinski began work for Clifton as an assembler in September of 1956. Through the years, she was promoted to and held supervisory positions, first as foreperson and finally as supervisor of approximately seventy production workers. On February 19, 1982, Seredinski lost her job to Hank Williams, a younger, less experienced male. She was taken out of production and placed in a position in the Customer Service Department. Seredinski was then over forty years of age and was the only female supervisor responsible for more than twenty employees. She was also the oldest supervisor in the company. Alleging age and sex discrimination, she filed a claim with the Pennsylvania Human Relations Commission ("PHRC") on March 16, 1982. The change was later deferred to the Equal Employment Opportunity Commission ("EEOC"). The EEOC, however, never had the opportunity to act upon the charge, as the PHRC worked out a settlement agreement that was signed by the parties on April 20, 1982. As a result, both the EEOC and PHRC closed their administrative filed on the charge.
On November 17, 1982, Seredinski was informed that her salary would be reduced in three increments to bring it within the range of salaries offered to Customer Service Personnel. Her salary was reduced from $12.63 to $7.75 per hour between November 29, 1982 and April 4, 1983. On August 24, 1983, she filed a charge with the EEOC alleging that her salary was reduced in retaliation for the charge of discrimination she previously filed with the PHRC.*fn1 It does not appear that Seredinski filed this second charge with the PHRC, and it is unclear whether EEOC deferred the charge to the state agency.*fn2 After an EEOC investigation, she was given notice of her right to sue. App. at 33.
Seredinski filed suit in the district court on February 17, 1984. She alleged that her initial demotion was discriminatory and that the subsequent wage reduction was retaliatory, in violation of Title VII, ADEA, and the Pennsylvania Human Rights Act. She included a claim for breach of an implied covenant of good faith and fair dealing as well as for intentional infliction of emotional distress. The final count of the complaint averred that the salary reduction was a breach of the settlement agreement which disposed of her initial charge.*fn3
In response to the complaint, Clifton filed a motion to dismiss, arguing that the Title VII and ADEA claims were time barred and requesting the court not to exercise pendent jurisdiction over the state claims.
Before responding to Clifton's motion, Seredinski amended her complaint, adding an entirely new theory -- fraud in the inducement of the PHRC settlement agreement. She alleged that Clifton told her before, during, and after the signing of the settlement agreement that her salary would not be reduced, and that she would never have signed the agreement but for this representation. Accordingly, she also amended her prayer for relief to seek a declaration that the settlement was void and "a full resolution of all issues relating to the original complaint before the EEOC and PHRC as though those administrative proceedings were not terminated by said Agreement." App. at 61.
On September 6, 1984, the district court dismissed Seredinski's complaint in its entirety, finding that the Title VII and ADEA claims arising from the alleged retaliation were time barred and that the fraudulent inducement claim arose under state, rather than federal law. With no federal claims remaining, the district court declined to exercise jurisdiction over the pendent state claims. This appeal followed.
In dismissing Seredinski's fraudulent inducement claim, the district court characterized it as an attempt to "vary [the PHRC settlement's] terms by parole evidence" which was therefore "redundant to her charge of breach of the settlement agreement." Relying on Weills v. Caterpillar Tractor Co., 553 F. Supp. 640 (N.D. Cal. 1982), the district court held that the fraud claim was "no longer a Title VII or ADEA claim, but rather a state law question requiring interpretation of a contract." App. at 69. Weills involved a suit for breach of an agreement between a plaintiff and Caterpillar to settle a charge of sex discrimination the plaintiff had filed some five yeas earlier. Noting that it was a suit to enforce the settlement agreement, 553 F. Supp. at 643, the court held:
Plaintiff's rights derived from Title VII lost their federal nature when they became embodied in the settlement contract. The issues raised by this action focus on the parties' intent and understanding of the rights created by that settlement agreement, not a right that will be ...