entitlement to severance pay based on his eligibility for retiree health benefits. He also claims that Defendant reduced his special initial pension amount ("Special Payment") by the amount of his earned vacation in violation of the OWBPA.
Two motions are pending before the Court. In one motion, Defendant moves for summary judgment on both counts of Plaintiff's complaint. In the other motion, Plaintiff moves for partial summary judgment on Count II. In the interests of clarity and convenience, the Court considers both motions in this memorandum, although it issues two separate orders.
After considering the parties memoranda in support of and opposition to the pending motions, the Court grants Defendant's motion for summary judgment with respect to the claim concerning calculation of severance pay in Count II. The Court denies Defendant's motion for summary judgment on the issue concerning payment of vacation pay in Count II as well as Defendant's motion for summary judgment on Count II. The Court also denies Plaintiff's motion for summary judgment in its entirety.
A. Summary Judgment Standard
Summary judgment is proper when the record shows "that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). This Court's role is to determine "whether there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S. Ct. 2505, 2510, 91 L. Ed. 2d 202 (1986); Josey v. John R. Hollingsworth Corp., 996 F.2d 632, 637 (3d Cir. 1993). The moving party has the burden of demonstrating that no genuine issue of fact exists. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 2552, 91 L. Ed. 2d 265 (1986). Further, the evidence must be viewed in the light most favorable to the non-moving party. United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S. Ct. 993, 994, 8 L. Ed. 2d 176 (1962). However, if the non-moving party fails to adduce sufficient evidence in connection with an essential element of the case for which it has the burden of proof, the moving party is entitled to summary judgment as a matter of law. Celotex, 477 U.S. at 322-23, 106 S. Ct. at 2552.
B. Age Discrimination in Employment Act
The ADEA proscribes employers from failing to hire, discharging, or otherwise discriminating against any individual because of that person's age, so long as he or she is within the statutorily protected class of persons who are at least forty years of age. 29 U.S.C. §§ 623(a), 631(a).
A plaintiff may frame a discrimination action as a "mixed motive" case or a "pretext" case. In a mixed motive case, the plaintiff alleges that the decision to terminate resulted from a mixture of proper and improper motives. Ezold v. Wolf, Block, Schorr & Solis-Cohen, 983 F.2d 509 (3d Cir. 1992), cert. denied, U.S. , 114 S. Ct. 88, 126 L. Ed. 2d 56 (1993). The plaintiff must produce evidence of documents, conduct, or statements by persons involved in the decision making process that may be viewed as directly reflecting the alleged discriminatory attitude. The plaintiff then needs to prove "only that the discriminatory motive made a difference in the decision." Griffiths v. CIGNA Corp., 988 F.2d 457, 471 (3d Cir.), cert. denied, U.S. , 114 S. Ct. 186, 126 L. Ed. 2d 145 (1993).
If a plaintiff lacks direct evidence of discrimination, the plaintiff may allege that the defendant's proffered reason for its employment decision is pretextual and that discrimination was the real reason. The Supreme Court established the standards necessary to prove pretextual discrimination in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S. Ct. 1817, 36 L. Ed. 2d 668 (1973), and Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 101 S. Ct. 1089, 67 L. Ed. 2d 207 (1981). The Third Circuit Court of Appeals is currently weighing whether the standard requires that discrimination be the sole factor or a determinative factor in the employment decision in pretext cases. Cf. Miller v. Cigna Corp., 1994 U.S. App. LEXIS 16158, No. 93-1773, 1994 WL 283269 (June 28, 1994), vacated and ordered for rehearing en banc (Aug. 12, 1994), with Griffiths, 988 F.2d 457. Although the Court presumes that this case is a pretext case,
it is not necessary for the Court to consider what Plaintiff must prove at this time because it does not affect the outcome of Defendant's motion.
Under the familiar burden shifting rules established for pretextual discrimination cases, once the plaintiff establishes a prima facie case, it creates a presumption that the employer unlawfully discriminated against the employee. St. Mary's Honor Center v. Hicks, U.S. , , 113 S. Ct. 2742, 2747, 125 L. Ed. 2d 407 (1993); Burdine, 450 U.S. at 254, 101 S. Ct. at 1094. In a reduction-in-force ("RIF") case, the plaintiff demonstrates the existence of a prima facie case by showing: (1) the plaintiff is a member of the protected class; (2) the plaintiff was discharged from a job; (3) the plaintiff was qualified for the job from which she was terminated; and (4) other workers not in the protected class were retained. Seman v. Coplay Cement Co., 26 F.3d 428, 431 (3d Cir. 1994); Massarsky v. General Motors Corp., 706 F.2d 111, 118 (3d Cir.), cert. denied, 464 U.S. 937, 104 S. Ct. 348, 78 L. Ed. 2d 314 (1983).
After the plaintiff establishes a prima facie case, the burden of production shifts to the employer to "articulate some legitimate, nondiscriminatory reason for the employee's rejection." McDonnell Douglas, 411 U.S. at 802, 93 S. Ct. at 1824; Burdine, 450 U.S. at 254, 101 S. Ct. at 1094. Once the employer rebuts the presumption raised by the prima facie case, the presumption disappears. "'The ultimate burden of persuading the trier of fact that the defendant intentionally discriminated against the plaintiff remains at all times with the plaintiff.'" St. Mary's Honor Center, U.S. at , 113 S. Ct. at 2747 (1993) (quoting Burdine, 450 U.S. at 253, 101 S. Ct. at 1093).
C. Decision to Terminate Plaintiff
With respect to Count I, Defendant asserts that summary judgment is appropriate on the termination claim because: (1) Plaintiff admitted that age was not the motivating factor for his lay off by Defendant; and (2) Plaintiff is precluded from recovering damages because he failed to mitigate his damages.
The Court addresses each of these issues in turn.
At the outset, the Court notes that Plaintiff has stated a prima facie case. Plaintiff has presented evidence to show that he was sixty years old when he was laid off, he was qualified for the job from which he was terminated, and he was laid off while other younger employees with equal or lesser qualifications were not selected for lay off.
Defendant argues that summary judgment is appropriate because the Plaintiff's testimony shows that he believes that he was chosen for lay off because his economic circumstances permitted him to "land on his feet" after lay off. Def.'s Mem. of Law in Supp. of Its Mot. for Summ. J. [hereinafter "Def.'s Mot. for Summ. J."] at 21. This argument must be rejected. The issue at hand is whether Defendant discriminated in its decision to lay off Plaintiff. At this time, a material issue of fact still exists as to Defendant's motivation. Plaintiff avers that each section in his department had to reduce its forces by a certain number of employees, that he refused to accept an offer for early retirement, that he was the only employee in his department terminated, and that other sections in his department met the reduction quota because other employees accepted early retirement. Because Plaintiff has presented evidence creating a factual dispute concerning Defendant's reasons for its lay off and because Plaintiff has not had an opportunity to depose company officials and Defendant has not responded to Plaintiff's interrogatories or requests to produce documents, summary judgment on the issue of liability is not appropriate at this time.
Defendant also argues that Plaintiff has done nothing since April 1992 to look for another job and that as a result, Defendant is entitled to partial summary judgment on the damages issue for Count II. Summary judgment for Defendant on the issue of damages is not appropriate because there remains a genuine issue of material fact whether Plaintiff attempted to mitigate his damages. Plaintiff avers that he tried to obtain other employment beginning in February 1992 and that he intensified his efforts after April 22, 1994. Pl.'s Mem. Law Contra Def.'s Mot. for Summ. J., Ex. B. Therefore, a material issue of fact remains, and summary judgment on the issues of liability and damages in Count I is not appropriate at this time.
D. Calculation of Severance Allowance and Pension
Both parties seek summary judgment on Count II. Count II raises two issues: (1) whether Defendant's method for calculating Plaintiff's severance payments violated the OWBPA and (2) whether Defendant violated the OWBPA in its calculation of Plaintiff's special initial pension amount ("Special Payment"). The parties are not in dispute as to the material facts as to the first issue and the Court concludes as a matter of law that Plaintiff's severance payment plan does not violate the OWBPA. There is a genuine issue of material fact as to the second issue and the Court finds that summary judgment is not appropriate on this issue.
1. Calculation of Severance Payment
Plaintiff claims that Bethlehem's policy of reducing employees' severance allowances based on their eligibility for retiree health benefits violates the OWBPA. At issue are two employee benefit plans in which Plaintiff was a participant: the Severance Allowance Plan and the Social Insurance Plan ("SIP").
The SIP makes a variety of health care plans available to eligible non-represented employees. Pursuant to the SIP, Plaintiff was a participant in the Comprehensive Medical Program at the time of his retirement. The SIP provides that employees who accrue fifteen years of continuous service and retire on a regular pension continue to be considered participants in the SIP. As a result, retired employees remain eligible for the same health care benefits available to non-represented salaried employees. Def.'s Mot. for Summ. J., Ex. C at 3 (Aff. of Michael P. Dopera, Def.'s Plan Administrator [hereinafter "Dopera Affidavit"]). If an employee does not elect coverage on retirement because the employee is already covered by another program, the employee may enroll when the other coverage ceases. If an employee does not have other coverage at retirement and still declines to elect coverage, the employee may enroll during subsequent open enrollment periods. Bethlehem has held an open enrollment period for non-represented salaried pensioners at least once each year since 1984.
Defendant's Severance Plan provides that an employee who completed fifteen years of continuous service is entitled to a severance allowance based on one week's pay for each year of continuous service, up to a maximum of $ 48,000, less the value of any retiree health benefits afforded to the participant and other specified reductions. Def.'s Mot. for Summ. J., Ex. C. (Summ. Plan Description of Severance Allowance Plan); Pl.'s Mem. Law in Supp. Mot. for Partial Summ. J. [hereinafter "Pl.'s Mot. for Partial Summ. J."] at 4-5. Defendant calculated Plaintiff's severance allowance as zero because the value of the retiree health benefits available to him, $ 51,754, exceeded the maximum amount of severance pay otherwise made available to terminating employees, $ 48,000.
Plaintiff accumulated fifteen years of continuous service, retired on a regular pension, and therefore was eligible for retiree health benefits as part of the SIP. Accordingly, on June 17, 1992, the Assistant Secretary of Defendant's Severance Allowance Plan Committee, E. R. French, notified Plaintiff by letter that his regular severance allowance would be reduced by the value of the retiree health benefits available to him, even if he declined to enroll for retiree health coverage. Pl.'s Mot. for Partial Summ. J., Ex. A. Plaintiff would have rejected the benefit because he had alternative health insurance based on his status as a retired naval officer, however he enrolled for coverage "since it was obvious to me that Bethlehem would reduce my Severance Allowance based on my eligibility for retiree health benefits . . . ." Id. Ex. 1.
Plaintiff argues that it was illegal for Defendant to reduce his severance allowance by the value of the retiree health benefits whether or not he enrolled in the retiree health plan at the time of retirement. On the other hand, Defendant argues that the OWBPA specifically authorizes employers to offset the value of severance allowances by the value of retiree health benefits.
Congress passed the OWBPA in 1990 to address shortcomings of the ADEA and to legislatively overrule the Supreme Court's decision in Public Employees Retirement System of Ohio v. Betts, 492 U.S. 158, 109 S. Ct. 2854, 106 L. Ed. 2d 134 (1989). The OWBPA explicitly permits an employer to reduce severance payments by the value of retiree health benefits an employee receives. Section 4(l)(2)(A) of the OWBPA provides as follows:
It shall not be a violation of subsection (a), (b), (c), or (e) of this section solely because following a contingent event unrelated to age --
(i) the value of any retiree health benefits received by an individual eligible for an immediate pension . . .
are deducted from severance pay made available as a result of the contingent event unrelated to age.