472 F.3d 1072 (9th Cir. 2006), 04-16449, Syverson v. International Business Machines Corp.
|Citation:||472 F.3d 1072|
|Party Name:||William SYVERSON, individually, and on behalf of others similarly situated; Ruth Alice Boyd, individually, and on behalf of others similarly situated; Dale Cahill, individually, and on behalf of others similarly situated; Jack Friedman, individually, and on behalf of others similarly situated; Paul Gromkowski, individually, and on behalf of others|
|Case Date:||August 31, 2006|
|Court:||United States Courts of Appeals, Court of Appeals for the Ninth Circuit|
Amended January 3, 2007.
Argued and Submitted April 4, 2006—San Francisco, California.
Jeffrey N. Young and Patrick N. McTeague, McTeague, Higbee, Case, Cohen, Whitney & Toker, Topsham, ME, for the appellants.
Jeffrey D. Wohl and Katherine L. Kettler, Paul, Hastings, Janofsky & Walker LLP, San Francisco, CA, for the appellee.
Appeal from the United States District Court for the Northern District of California; Ronald M. Whyte, District Judge, Presiding. D.C. No. CV-03-04529-RMW.
Before: Marsha S. Berzon, Johnnie B. Rawlinson, and Consuelo M. Callahan, Circuit Judges.
ORDER AND AMENDED OPINION
BERZON, Circuit Judge:
The panel has voted to deny appellee's petitions for rehearing and for rehearing en banc. The full court has been advised of the petitions, and no judge has requested a vote on whether to rehear the matter en banc. Fed. R. App. P. 35.
The opinion filed August 31, 2006, slip. op. 10533, and published at 461 F.3d 1147 (9th Cir. 2006) is hereby amended as follows:
1. Replace ‹putative class action› with ‹putative collective action› in the first paragraph of page 10539 [461 F.3d at 1149-50] of the slip opinion, in foot note 2 on page 10539, [461 F.3d at 1149-50], and in the second paragraph of page 10547 [461 F.3d at 1153].
2. In the last paragraph of page 10549 [461 F.3d at 1155] of the slip opinion,
replace ‹as compared to a putative class action› with ‹as compared to a putative collective or class action›, replace ‹a later class action› with ‹a later collective or class action›, and replace ‹later-brought class action› with ‹later-brought collective or class action›.
3. Delete ‹the award of $27,500 to IBM on its counterclaim is vacated› from the last sentence of the opinion.
No further petitions for rehearing will be entertained.
Under the Older Workers Benefit Protection Act ("OWBPA"), employees may not waive rights or claims arising under the Age Discrimination in Employment Act ("ADEA") unless the waiver is "knowing and voluntary." 29 U.S.C. § 626(f)(1) (2000). To qualify as "knowing and voluntary," a waiver included in an agreement between an employer and its employees must, among other things, be "written in a manner calculated to be understood" by the aver- age employee eligible to participate in the agreement. Id.§ 626(f)(1)(A). This appeal presents the question whether a waiver form used by International Business Machines Corp. ("IBM") in connection with a severance benefit package meets that standard. We hold that it does not and was therefore not "knowing and voluntary." Id.§ 626(f)(1).
In January 2001, IBM began a reduction in its workforce. As part of its workforce reduction plan, IBM offered each employee selected for termination severance pay and certain benefits in exchange for signing a document entitled "Microelectronics Resource Action (MERA) General Release and Covenant Not To Sue" ("MERA Agreement").1 Along with the MERA Agreement, IBM issued each selected employee a lengthy document entitled "Microelectronics Division Resource Action Employee Information Package" ("Information Package"), which details the job titles, ages, and numbers of those employees selected and those not selected for termination from various IBM divisions.
Appellants ("the employees")2 are former IBM employees, each of whom signed the MERA Agreement, or a similar agreement, receiving in return severance pay and benefits. Based on the data contained in the Information Package, these employees filed charges of age discrimination with various state authorities and with the Equal Employment Opportunity Commission ("EEOC"). The EEOC dismissed all charges, issuing each employee a "Notice of Right To Sue" along with a letter stating that the language of the MERA Agreement satisfies the OWBPA's minimum requirements for "knowing and voluntary" waiver of ADEA rights and claims and is enforceable, thus depriving the employees of their right to pursue their age discrimination claims. The employees then filed this putative collective action in federal court alleging that the MERA Agreement violates the waiver requirements of the OWBPA and that IBM's layoff program constitutes age discrimination in violation of the ADEA.3 The employees' OWBPA
cause of action challenged the MERA Agreement's use of both a release covering ADEA claims and a covenant not to sue excepting them, the pairing of which allegedly caused confusion over whether ADEA claims were excepted from the release.
IBM filed a counterclaim seeking relief for the plaintiffs/ employees' breach of the agreements and, predicated thereon, a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6).
The district court entered an order granting IBM's motion to dismiss the complaint with prejudice. The parties then stipulated to entry of judgment holding the employees jointly and severally liable on IBM's counterclaim and awarding IBM $27,500.
In dismissing the employees' claims, the district court determined that the MERA Agreement was "written in a manner calculated to be understood by an average individual selected by IBM for employment termination," and was "knowing and voluntary" under the OWBPA. In so holding, the district court cited to Thomforde v. International Business Machines Corp., 304 F.Supp.2d 1143 (D.Minn.2004) (Thomforde I ) , a single plaintiff action against IBM, in which the Minnesota district court found on summary judgment that an IBM contract, the "Server Group Resource Action (SGRA) General Release and Covenant Not To Sue" ("SGRA Agreement")--for present purposes, identical to the MERA Agreement--satisfied the OWBPA requirement that waiver of any ADEA right or claim be "written in a manner calculated to be understood" by the average individual. See id. at 1144-45. The employees here now appeal the waiver-based dismissal of their case.
After this appeal was fully briefed but before oral argument, the Eighth Circuit reversed the Minnesota district court's grant of summary judgment in favor of IBM, holding that the SGRA Agreement "is not written in a manner calculated to be understood by the intended participants as required by the OWBPA." Thomforde v. Int'l Bus. Machs. Corp., 406 F.3d 500, 504 (8th Cir. 2005) (Thomforde II).4 The employees maintain (1) that under the doctrine of offensive nonmutual issue preclusion, the Eighth Circuit's ruling is preclusive of an independent determination by this court of the waiver issue and (2) alternatively, that the MERA Agreement does not satisfy the OWBPA's "manner calculated" requirement.
We review de novo a district court's grant of a Rule 12(b)(6) motion to dismiss. Decker v. Advantage Fund, Ltd., 362 F.3d 593, 595-96 (9th Cir. 2004); Spink v. Lockheed Corp., 125 F.3d 1257, 1260 (9th Cir. 1997). Upon review, we "must construe the complaint in the light most favorable to the plaintiff and must accept all well-pleaded factual allegations as true." Shwarz v. United States, 234 F.3d 428, 435 (9th Cir. 2000). "We also review de novo questions of statutory interpretation." Artichoke Joe's Cal. Grand Casino v. Norton, 353 F.3d 712, 719 (9th Cir. 2003).
Added as a collection of discrete amendments to the Age Discrimination in Employment Act ("ADEA") in 1990, the Older Workers Benefit Protection Act ("OWBPA"), Pub. L. No. 101-433 (codified at 29 U.S.C. §§ 621, 623, 626, & 630),
imposes, in relevant part, mandatory requirements for waivers of ADEA rights and claims, see 29 U.S.C. § 626(f), to ensure that "older workers are not coerced or manipulated into waiving their rights to seek legal relief under the ADEA," see S. Rep. No. 101-263, at 5 (1990), as reprinted in 1990 U.S.C.C.A.N. 1509, 1510; see also Oubre v. Entergy Operations, Inc., 522 U.S. 422, 427, 118 S.Ct. 838, 139 L.Ed.2d 849 (1998) ("[The OWBPA] is designed to protect the rights and benefits of older workers. The OWBPA implements Congress' policy via a strict, unqualified statutory stricture on waivers."). Under the OWBPA, "[a]n employee 'may not waive' an ADEA claim unless the employer complies with the statute." Oubre, 522 U.S. at 427, 118 S.Ct. 838. To this end, "[t]he OWBPA sets up its own regime for assessing the effect of ADEA waivers, separate and apart from contract law.... [and] creates a series of prerequisites for knowing and voluntary waivers." Id.
Section 626(f), part of the OWBPA, sets forth specific requirements for a "knowing and voluntary" waiver.5] Of primary importance here is the requirement that a waiver be part of an agreement "between the individual and the employer that is written in a manner calculated to be understood by [the] individual, or by the average individual eligible to...
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