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EEOC v. UNITED STATES STEEL CORP.

August 18, 1987

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff
v.
UNITED STATES STEEL CORPORATION, Defendant


Alan N. Bloch, United States District Judge. Mitchell.


The opinion of the court was delivered by: MITCHELL; BLOCH

{F. Supp. 353contd} [EDITOR'S NOTE: The page numbers of this document may appear to be out of sequence; however, this pagination accurately reflects the pagination of the original published documents.]

MAGISTRATE'S REPORT AND RECOMMENDATION

 MITCHELL, Magistrate

 I. Recommendation

 It is respectfully recommended that EEOC and plaintiff intervenor Pennsylvania Human Relations Commission's motion for partial summary judgment be granted and that defendant United States Steel's motion for summary judgment be denied.

 It is further recommended that the defendant United States Steel, its officers, agents, employees and all other persons acting in concert with them or on their behalf, be permanently enjoined from terminating or reclassifying the 70/80 retirement pension with respect to any individual who has filed a charge or claim under the ADEA with the EEOC or in judicial proceedings or on whose behalf such a charge or claim has been filed, or who has assisted, participated, or cooperated in the EEOC's investigation and prosecution of charges or claims under the ADEA.

 It is further recommended that the defendant United States Steel, its officers, agents, employees, and all other persons acting in concert with them or on their behalf be permanently enjoined from requiring employees to sign Form PF-116-B or PF-116-C in order to be eligible for a 70/80 retirement under mutually satisfactory conditions.

 It is further recommended that the defendant United States Steel, its officers, agents, employees and all other persons acting in concert with them or on their behalf be enjoined from the continued withholding of pension benefits of individuals whose 70/80 retirement has been terminated or reclassified because they filed or permitted to be filed on their behalf a charge or claim under the ADEA or counselled or assisted in the prosecution of such claims on their behalf or on the behalf of others, and that United States Steel remit to such individuals pension benefits withheld as a result of such classification or termination in amounts to be established in further proceedings.

 II. Report

 Plaintiff Equal Employment Opportunity Commission ("EEOC") has brought this action against the United States Steel Corporation ("USS") alleging that USS was and is engaging in employment practices that violate section 4(d) of the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. § 623(d), by requiring certain employees to sign a release of rights under the ADEA in order to obtain a pension plan known as a 70/80 retirement under mutually satisfactory conditions. The EEOC is authorized to bring this action pursuant to § 7(b) of the ADEA, 29 U.S.C. § 626(b), and §§ 16 and 17 of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 216 and 217. Jurisdiction is invoked pursuant to 28 U.S.C. §§ 1337, 1343, and 1345. Presently before the Court for disposition are EEOC and plaintiff intervenor Pennsylvania Human Relations Commission's motions for partial summary judgment and USS's motion for summary judgment.

 A. Factual and Procedural Background

 USS's 70/80 retirement is one of several pension plans available to USS employees who are participants in the United States Steel Corporation Plan for Employee Pension Benefits (Revision of 1950) (the "Plan"). Essentially the 70/80 is a special early retirement pension that provides more lucrative benefits to a retiring employee than do the standard retirement plans available to participants. *fn1" To be eligible for a 70/80 retirement, an employee must meet certain age and service requirements *fn2" and fall into one of several specified categories, including the one involved here "under mutually satisfactory conditions." According to the Plan's governing rules, a 70/80 retirement under mutually satisfactory conditions is granted to an employee "who considers that it would be in his interest to retire and his Employing Company considers that such retirement would likewise be in its interest and it approves an application for retirement under mutually satisfactory conditions." United States Steel 1980 Non-Contributory Pension Rules, section 2.6(a)(4) (Exhibit A to the Affidavit of C.E. Magistri attached to USS's Motion for Summary Judgment). Unlike most of the pension plans available to eligible participants, a retiring employee may not unilaterally compel USS to grant 70/80 retirement under mutually satisfactory conditions. Rather, the grant of this pension is within the sole discretion of the company, which must approve an application for the pension. According to USS, the plan has been historically granted to management employees whose jobs have been eliminated in USS's long efforts to reduce management work forces in order to deal with the business conditions that have afflicted the declining American steel industry. An application for the plan is typically granted where both USS and the employee are satisfied with the circumstances surrounding the early retirement. Hence the mutuality of the plan -- the company benefits by reason of the employee's hassle-free early departure and the employee benefits by receiving an early and more lucrative pension plan than he would otherwise have been entitled to receive.

 In the late 1970's and early 1980's, the management at USS discovered that certain employees who had been granted the 70/80 retirement under mutually satisfactory conditions had subsequently filed age discrimination charges against USS claiming that their termination had been improper. The management at USS felt that this defeated the very purpose of the 70/80 since this special pension plan was supposedly granted to employees who were satisfied with the expanded conditions of their retirement from the company and who had tacitly agreed that by applying for the 70/80 and retiring early, they would not bring legal action concerning their retirement from the company. This development led the USS management to develop a proposal requiring all employees requesting a 70/80 retirement under mutually satisfactory conditions to release all claims against USS related to their employment and termination. This proposal was adopted by the Special Committee of the USS Board of Directors, which determined that effective October 1, 1982 all management employees of USS who desired the 70/80 retirement would be required sign a general release known as Form PF-116-B.

 Form PF-116-B, entitled "Application and Release for 70/80 Retirement Under Mutually Satisfactory Conditions," contains a release or waiver of all claims and causes of action under, inter alia, the ADEA. *fn3" The Form also sets forth a promise by the employee/signatory (1) not to file or permit to be filed on his or her behalf any claim under the ADEA; (2) not to counsel or assist in the prosecution of such claim whether on his behalf or on the behalf of others; and (3) to withdraw any such claim filed by the employee/signatory or by others on his or her behalf and to not participate in such claim. The form also provides for certain penalties against individuals who breach their obligations under the release, including repayment of any benefits received plus interest and a conversion of the ...


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