485 F.3d 770 (3rd Cir. 2007), 06-2399, Jakimas v. Hoffmann-La Roche, Inc.

Docket Nº:06-2399.
Citation:485 F.3d 770
Party Name:Richard JAKIMAS; Dianne Flynn, Association Member; Louis Ristagno, Association Member; All Other Association Members; John M. Adair; John J. Adzima; Bruce J. Aiello; Thomas Aiello; Jack Bailey; Gerald A. Barrett; Walter Beniuk; Bruce Blanchard; Rene Reis Braga; Tedeusz Bukowski; Edward Cabral; Angelo Capalbo; Richard Carlson; Ralph Caso; James Cast
Case Date:May 14, 2007
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit

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485 F.3d 770 (3rd Cir. 2007)

Richard JAKIMAS; Dianne Flynn, Association Member; Louis Ristagno, Association Member; All Other Association Members; John M. Adair; John J. Adzima; Bruce J. Aiello; Thomas Aiello; Jack Bailey; Gerald A. Barrett; Walter Beniuk; Bruce Blanchard; Rene Reis Braga; Tedeusz Bukowski; Edward Cabral; Angelo Capalbo; Richard Carlson; Ralph Caso; James Castelli; Samuel Castronovo, Jr.; Peter Chapman; Paul D. Ciuppa; Gary Cocozzo; Laura Carbo; Alan L. Curtis; Paul Day; Charles Delorenzi; Peter Demodica, III; Joseph Digiacomo; Stefan Dziaba; Walter Dziaba; Michael Faron; Ramond J. Feiner; Andrew Feraco; Paul Franek; Lawrence Gelok; Robert L. Glover; Raymond Goetz; Joseph Gomes; Anthony Greco; Daniel Green; Johnny Haddley; William J. Hahn; Richard Hall; David Hanrahan; Deborah Helfrich; Ronald Jones; Alojzy Kalata; James F. Kane; Joseph M. Kaprowski; Bernard Kapuscinski; Jan Kasprowicz; Michael Kennedy; Robert J. Kohler; Edward Kwasnik; Flavio Labagnara; Rosa Labagnara; Robert J. Lenik; Wojciech Leozenia; Joseph MacDiarmid; James F. Madigan; William R. Malloy, Sr.; Albert A. Marchione; Anthony Mariano; Edward B. Mayo; Henry M. McAuliffe; Mike Meechan; Stephen E. Mellinger; Lawrence Memice; Donald A. Meyer; Robert P. Mundt; Nick Nardone; Cheryl Negron; Joseph M. Orolen; Edward Pajak; Robert Pavone; Roger M. Perri; Frank J. Petrasek; William Pitt; Peter Plafta; Julian Pokrywa; Ronald Pokrywa; Roque N. Rivera; Antonio Rizzi; Barbara Robinson; Samuel Rosamilia; Roger Rotondi; Chuck L. Rutan; Albert Rybacki; Andrew J. Saccoccia; Jan Serafin; Robert Shallcross; Martha X. Skinner; Donald D. Smith; Anthony Spagnuolo; Anthony J. Spano; Sara Spano; Anthony Spera; Natale Turano; Stephen R. Tyburczy; Robert J. Veleber, Jr.; William Villino; Michael A. Vocaturo; Marian Wojciechowski; Leonard A. Zummo; Ricki Blohm; Frank Cavaliere; Charlene Johnson; Donald Breen; John Tomaskovic, Appellants


HOFFMANN-LA ROCHE, INC.;* Johnson Controls World Services, Inc.

(*Amended per Clerk's order of June 6, 2006).

No. 06-2399.

United States Court of Appeals, Third Circuit.

May 14, 2007

Argued Feb. 15, 2007.

As Amended May 31, 2007.

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[Copyrighted Material Omitted]

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Charles J. Sciarra, (Argued), Sciarra & Catrambrone, Clifton, NJ, Attorney for Appellants.

John A. Ridley, (Argued), Drinker, Biddle & Reath, Florham Park, NJ, Attorney for Appellee, Hoffmann-La Roche, Inc.

Dabney D. Ware, Allan P. Clark, (Argued), Foley & Lardner, Jacksonville, FL, Attorneys for Appellee, Johnson Controls World Service, Inc.

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Before: SMITH and FISHER, Circuit Judges, and DOWD, [*] District Judge.


FISHER, Circuit Judge.

The Appellants, former employees of Hoffmann-La Roche Inc. ("Roche"), appeal the District Court's grant of summary judgment in favor of Roche and Johnson Controls World Services, Inc. ("JCI") (collectively "Appellees"), 1 regarding their claims under the Employee Retirement Income Security Act ("ERISA") and the New Jersey Law Against Discrimination ("NJLAD"). Roche asserts the affirmative defenses of a release and tender back/ratification, which were rejected by the District Court, as alternative grounds upon which to affirm the District Court. For the reasons that follow, we will affirm.



Roche is a prescription drug manufacturer, and JCI is engaged in the business of integrated facility management. The Appellants are approximately ninety-six former employees of Roche who were terminated on November 3, 1997. The Appellants were terminated after Roche decided to outsource some functions of its Technical Services Division to JCI. JCI began managing the outsourced services on November 4, 1997. The majority of the Appellants were hired by JCI in the same position that they held at Roche.

The circumstances surrounding Roche's decision to outsource are the basis for the Appellants' claims. After becoming Vice President of Roche's Technical Services Division in the summer of 1996, Ray Scherzer ("Scherzer") determined that there were infrastructure problems, and that the practices and processes of the Division were outdated. In late 1996, he contacted JCI and inquired about JCI's facilities management services. JCI first provided Scherzer with a preliminary assessment, which was an overview of how JCI could improve Roche's facilities management operations.

JCI offered to provide a more detailed analysis, which included a six-week on-site assessment of Roche's facilities. This assessment was conducted during June and August of 1997. The findings, recommendations, proposed budget, and information about the proposed outsourcing were provided to Roche in late August and early September of 1997. JCI also submitted a proposed Facilities Management Agreement ("Agreement") to Roche in late September, and Scherzer presented this information to Roche executives on October 15, 1997. Scherzer recommended that Roche accept the Agreement, which would outsource most of the functions of the Technical Services Division to JCI. The Roche executives agreed. Under the Agreement, JCI supplied facilities management services, and Roche reimbursed JCI for its services. Roche agreed to reimburse JCI for labor related costs, other direct costs, and to pay an annual general and administrative fee. JCI also agreed to hire most of the employees Roche terminated due to the outsourcing.

On October 20, 1997, Roche held a meeting, at which it informed employees of its decision to outsource some technical

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services to JCI. 2 Scherzer made the announcement on behalf of Roche, and explained that Roche had decided to outsource the positions in its Technical Services Division to JCI. He stated that JCI would begin managing maintenance on November 4, 1997. Scherzer claims it was made clear that the Appellants' and others' jobs would be terminated on November 3, 1997. The presentation allegedly explained that Roche would be providing severance packages to the affected employees, and that the affected employees would be eligible to work for JCI, with compensation and benefits packages comparable to what they received at Roche. Additionally, Scherzer claims that he informed the audience that the affected employees would remain Roche employees until November 3, but during that time JCI would be interviewing each employee. After Scherzer spoke, a representative from Roche's Human Resources Department spoke, as did representatives from JCI.

A formal written notice was sent company-wide by Scherzer on October 21, 1997, confirming the outsourcing. The letter was addressed to all Roche employees, and explained that Roche had decided to outsource various groups. The letter listed the specific departments being outsourced. It also explained that beginning November 4, 1997, JCI would assume control of those groups, and that JCI had agreed to consider employing all of the current Roche employees in those groups. Further, it explained that until November 3, 1997, the affected employees would continue to be employed by Roche, but that JCI would be on-site to interview them.

The following week, JCI began to interview and make employment offers to the affected Roche employees. As a condition of employment, the prospective JCI employees were required to sign several documents, including (1) an offer letter which stated that the employee accepted employment with JCI commencing on November 4, 1997, (2) an authorization form providing that Roche could release personnel information to JCI, (3) a "Conditions of Employment" pamphlet, (4) a form indicating that the employee received and understood JCI's Employee Safety Guide, (5) a form indicating that the employee was aware of and understood JCI's drug-free workplace policy, and (6) a W-4 form.

Roche provided individual notices to the affected employees on November 3 that stated "[t]his will confirm that the official notification and effective date of the termination of your employment is November 3, 1997." They also received information about Roche's severance package. The severance package provided the affected employees with two options. Option II was an enhanced package, if the employee was willing to sign a release. The release included a covenant not to sue Roche for claims relating to ERISA, state employment discrimination laws, and employment contracts. 3 Even if the affected employees chose not to sign the release, they were still entitled to the benefits offered in Option I. Only one of the Appellants, Martha Skinner, did not sign the release. All of the Appellants that did sign the release received the benefits to which they were entitled under Option II.

On November 4, 1997, most of the Appellants

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began working for JCI. 4 The Appellants' jobs were exactly the same at both employers, as were their job titles. The only change, other than that they no longer received pension benefits, was their employer. 5 JCI generally offered its employees 401(k) plans, but an employee was only eligible for such a plan after five years of service. Because the Agreement was only for three years, the former Roche employees were not eligible to participate in a 401(k) at JCI.


The Appellants filed their Complaint on November 1, 1999, in which the November Third Termination Association and three individuals were named as plaintiffs. 6 The Appellees made a motion to strike the Association as a party, and a motion to dismiss the Association's claims because it lacked standing. The District Court granted the motions. The magistrate judge allowed the Appellants to amend their Complaint and add additional individual plaintiffs. However, he did not allow Donald Swidrak ("Swidrak") to be named as a plaintiff because the judge determined that his claim was time-barred. The determination was based on the fact that Swidrak admitted that he knew of his pending termination on October 20, 1997, as evidenced in a letter he...

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