Cirillo v. Arco Chemical Co., a Div. of Atlantic Richfield Co., 88-1009
| Decision Date | 01 December 1988 |
| Docket Number | No. 88-1009,88-1009 |
| Citation | 862 F.2d 448 |
| Parties | 48 Fair Empl.Prac.Cas. 678, 48 Empl. Prac. Dec. P 38,528, 57 USLW 2391, 10 Employee Benefits Ca 1757 Vincent A. CIRILLO, Appellant, v. ARCO CHEMICAL COMPANY, A DIVISION OF ATLANTIC RICHFIELD COMPANY and Ramey, Kermit C. |
| Court | U.S. Court of Appeals — Third Circuit |
Paul D. Nelson (argued), Media, Pa., for appellant.
Jerome A. Hoffman (argued), Linda B. Dwoskin, Dechert Price & Rhoads, Philadelphia, Pa., for appellee Arco Chemical Co.
Robert E. Williams, Douglas S. McDowell, Ann Elizabeth Reesman, McGuinness & Williams, Washington, D.C., for the amicus curiae Equal Employment Advisory Council.
Steven S. Zaleznick, Christopher G. Mackaronis, Cathy Ventrell-Monsees, American Ass'n of Retired Persons, Washington, D.C., for amicus curiae American Ass'n of Retired Persons.
Before BECKER, STAPLETON, and GREENBERG, Circuit Judges.
In this case we are once again asked to consider whether an employee executed a valid waiver of his rights under the Age Discrimination in Employment Act, 29 U.S.C. Sec. 621 et seq. ("ADEA"), when he signed a Release and covenant not to sue in exchange for an enhanced retirement package and special payment allowance. Under the principles announced by this court in Coventry v. United States Steel Corporation, 856 F.2d 514 (3d Cir.1988), we agree with the judgment of the district court that the waiver was knowing and voluntary and, accordingly, will affirm the grant of summary judgment in favor of the employer.
In 1986, Vincent Cirillo, the appellant, was one of approximately 700 employees released by Arco Chemical Company, the appellee, ostensibly as a result of a company-wide involuntary reduction in personnel. Cirillo, then 69 years of age, had worked for Arco for nearly 43 years. He was a managerial employee with a college degree and numerous graduate courses to his credit. As a part of its involuntary reduction in force and to limit litigation arising therefrom, Arco offered special cash payments based on length of service and salary to certain employees being terminated, including Cirillo. More specifically, Arco offered Cirillo a choice between two benefit packages, each with differing tax consequences: (1) an enhanced retirement lump sum payment of $297,351.96 which included $38,626.66 in excess of his normal retirement benefits, plus a one-time cash "Special Payment Allowance" of $45,624.96; (2) a normal retirement lump sum payment of $258,725.30, plus a one-time additional "Special Termination Allowance" of $91,249.92.
In order to explain these benefits to eligible employees, Arco held small group meetings detailing the various options, one of which Cirillo attended on September 10, 1986. At the meeting, Martin Halpin, an Arco employee relations consultant, distributed to each employee a package of documents including, inter alia, a cover letter listing all the documents enclosed, individually tailored benefits information, and special allowance materials. A number of the documents indicated that, as a condition of eligibility for any special allowance payment, an employee had to sign a general release (the "Release"). Reiterating what was stated in the documents, Halpin explained that the actual form containing the Release would be provided upon an employee's selection of a benefit option. Halpin told Cirillo at the meeting to review the materials in the package and to call him once he was ready to make a selection.
On September 26, 1986, Cirillo met with Halpin individually to indicate that he had chosen the Enhanced Retirement Package and the one-time Special Payment Allowance of $45,624.96. After filling out the requisite forms in accordance with Cirillo's choices, and after Cirillo signed the various forms, Halpin gave Cirillo the form containing the Release and told him to take it home and review it. The Release provided as follows:
Notice: Various State and Federal laws prohibit employment discrimination based on age, sex, race, color, national origin, religion, handicap or veteran status. These laws are enforced through the Equal Opportunity Employment Commission (EEOC), Department of Labor and State Human Rights Agencies. If you feel that your election of the Atlantic Richfield Special Payment Allowance was coerced and is discriminatory, you are encouraged to speak with your Employee Relations representative or follow the steps described in the Employee Problem Resolution procedure. You may also want to discuss the following release language with your lawyer. In any event, you should thoroughly review and understand the effect of the release before acting on it. Therefore, please take this Release home and consider it for at least (5) working days before you decide to sign it.
General Release:
In consideration for the Special Payment Allowance under the Atlantic Richfield Special Termination Plan offered to me by the Company I release and discharge the Company, its successors, subsidiaries, employees, officers and directors (hereinafter referred to as "the Company") from all claims, liabilities, demands and causes of action known or unknown, fixed or contingent, which I may have or claim to have against the Company as a result of this termination, and do hereby covenant not to file a lawsuit to assert such claims. This includes but is not limited to claims arising under federal, state, or local laws prohibiting employment discrimination or claims growing out of any legal restrictions on the Company's rights to terminate its employees. This release does not have any effect on any claim I may have against the company unrelated to this termination.
I have carefully read and fully understand all the provisions of this Separation Agreement and General Release which sets forth the entire agreement between me and the company and I acknowledge that I have not relied upon any representation or statement, written or oral, not set forth in this document.
App. at 152 (bold in original).
At both scheduled meetings, on September 10 and 26, as well as at several unscheduled encounters during the time he was contemplating whether to sign the Release, Cirillo expressed his concern to Halpin that he was being discriminated against on the basis of his age. Cirillo specifically mentioned to Halpin at these meetings that, according to a newspaper article he had read, a retirement plan offered by the DuPont Company ("DuPont plan") had recently been found by the Equal Employment Opportunity Commission ("EEOC") to discriminate against employees, like Cirillo, who were 65 years or older with at least 35 years of employment with the company; he wanted assurances that the Arco plan was not similarly flawed. Moreover, according to his subsequently filed complaint in this suit, Cirillo, from 1978 up to and including the time of his termination, had considered himself a victim of age discrimination and had voiced his concerns about this matter to his superiors. Nevertheless, despite his awareness of potential discrimination claims, Cirillo did not consult a lawyer about the matter and signed the Release approximately one month later on October 24, 1986. His official retirement date was on November 1, 1986.
On June 30, 1987, Cirillo instituted the present action against Arco in the district court. Cirillo complained, specifically, that he was fired because of his age in violation of the ADEA and that as a result of this termination, he was placed into a "special involuntary retirement program" which had a disparate impact upon him. On October 30, 1987, Arco moved for summary judgment on the ground that, by signing the Release, Cirillo knowingly and voluntarily waived any ADEA claim arising from his termination. In response, Cirillo argued that the Release was deficient in a number of respects and therefore did not bar him from asserting his ADEA rights.
The district court granted summary judgment in favor of Arco, holding as a matter of law that Cirillo knowingly and voluntarily waived his ADEA rights when he signed the Release. The court relied primarily on two sources of authority for its decision: an unpublished memorandum opinion of this court, Sullivan v. Boron Oil Co., 831 F.2d 288 (3rd Cir.1987), and a final rule, promulgated by the EEOC, providing for unsupervised ADEA waivers. See 29 C.F.R. Sec. 1627 (eff. Sept. 28, 1987) (text reprinted in, 52 Fed.Reg. 32296 (August 27, 1987)). Two weeks after the district court entered its decision, however, Congress delayed the rule's effective date for at least one year. See 53 Fed.Reg. 3370 (Feb. 5, 1988).
In light of the decision recently reached by another panel of this court, in Coventry v. United States Steel, 856 F.2d 514 (3d Cir.1988), regarding the validity of unsupervised ADEA waivers generally, we need not address the propriety of the district court's problematic reliance on an unpublished opinion of this court, see Internal Operating Procedures, Court of Appeals, Third Circuit, Chapter 5, Para. A.2 (memorandum opinion has no precedential value), or discuss the current status of the EEOC's rule. Rather, we analyze this case in accordance with the reasoning in Coventry.
Our standard of review of a grant of summary judgment, viewing the facts in the light most favorable to the party opposing the motion, is plenary. Koshatka v. Philadelphia Newspapers, Inc., 762 F.2d 329, 333 (3rd Cir.1985).
In Coventry, a panel of this court declared that, "subject to a close evaluation of various factors that are indicia of 'knowing and willful' waiver, employees may execute valid waivers of their ADEA claims." 1 856 F.2d at 518. In recognition of the important interests involved, the court declined to follow the stated rationale of several other federal courts of appeals which applied ordinary contract principles in deciding whether an ADEA waiver is enforceable. See e.g., Lancaster v. Buerkle Buick Honda...
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