American Airlines, Inc. v. Cardoza-Rodriguez

Decision Date03 September 1997
Docket NumberM,No. 97-1363,CARDOZA-RODRIGUE,97-1363
Citation133 F.3d 111
Parties75 Fair Empl.Prac.Cas. (BNA) 1217, 73 Empl. Prac. Dec. P 45,332, Pens. Plan Guide (CCH) P 23940R AMERICAN AIRLINES, INC., Plaintiff, Appellee, v. Radamesarta Elaine Coll-Figueroa, Isabel De La Paz, Maria D. Garcia-Caceres, Ernesto Lopez-Garcia Ana L. Marin De Rivero, Carmen Ana Martinez-Rivera Carmen Alicia Mattos, Guillermo Ortiz-Rosa, Margarita Santiago-Negron and Margarita Zequeira-Julia, Defendants, Appellants. . Heard
CourtU.S. Court of Appeals — First Circuit

Ivan A. Ramos, Hartford, CT, with whom Ramos & Ramos-Camara, was on brief for appellants.

Terence G. Connor, with whom Laura F. Patallo, Morgan, Lewis & Bockius LLP, Miami, FL, Carlos A. Rodriguez-Vidal, and Goldman Antonetti & Cordova, Hato Rey, PR, were on brief for appellee.

Before STAHL, Circuit Judge, BOWNES, Senior Circuit Judge, and LYNCH, Circuit Judge.

STAHL, Circuit Judge.

Defendants-appellants Radames Cardoza-Rodriguez et al., ("employees") appeal from the district court's issuance of a declaratory judgment in favor of plaintiff-appellee American Airlines ("American") enforcing releases of age discrimination forms executed by appellants and dismissing their counterclaims under the Age Discrimination in Employment Act of 1967 ("ADEA"), 29 U.S.C. §§ 621 et seq. and Puerto Rico Law 100. We reverse in part and vacate and remand in part the district court's declaration that the releases at issue are enforceable. Nonetheless, we affirm the district court's grant of summary judgment on the employees' counterclaim, finding the employees' ADEA claims time-barred.

I. Background

Because the district court issued the declaratory judgment on plaintiff's motion for summary judgment, we recite the facts in a light most favorable to the non moving party, the employees. DeNovellis v. Shalala, 124 F.3d 298, 305 (1st Cir.1997).

On September 21, 1994, as part of a workforce reduction program, American offered certain reservation, ticket, and cargo agents in the Commonwealth of Puerto Rico, the opportunity to participate in a Voluntary Early Retirement Program ("VERP"). The VERP provided for the addition of five years to each employee's actual age for purposes of calculating retirements benefits, five years additional credited service, cash bridge payments of $400 per month until the employee became eligible to receive benefits, immediate retirement medical benefits and travel benefits. To be eligible to participate in the VERP an employee had to be at the maximum pay scale in their job classification and at least forty-five years of age.

American informed the employees of the program's details by providing various VERP-related documents. The introduction to the "Terms and Conditions" booklet describing the program warned the employees to read the materials carefully, and provided a participation deadline of November 11, 1994, with a seven day rescission period after an election to participate. In order to participate, an employee was required to sign a "Voluntary Early Retirement Election Form" attesting that the decision was "completely voluntary, final and irrevocable," that he or she had been given forty-five days to make the election, and that all rights to reemployment with American were being relinquished. The election form also stated that, on an employee's last day of work, he or she would be required to sign a "Complete Release of All Claims," absolving American of all employment-related liability including, specifically, "age discrimination claims."

The VERP election form required each employee to attest to having read the entire release form prior to electing to retire early. By the terms of the release, the employee agreed not to bring any legal proceeding against American in any court, administrative agency, or tribunal, that the employee would forfeit the extra retirement benefits if the employee breached a material release term, and also provided the party successfully enforcing the release costs and attorney's fees. The release contained a provision stating: "I have had reasonable and sufficient time and opportunity to consult with an independent legal representative of my own choosing before signing this Complete Release of All Claims." Although the VERP documentation advised the employee to discuss the program with their families and to "consult a financial advisor," neither the release nor any of the VERP documentation explicitly advised the employees to consult an attorney prior to executing the release or electing to retire. The only mention of independent legal advice was contained in the release, which was not to be signed until the employee's last day of work. Each employee signed the release on his or her last day of work.

The appellants elected to participate in the early retirement program on various dates throughout the election period. The earliest election occurred on October 11, 1994, the latest on December 13, 1994. The VERP also provided that the employees' termination dates would depend on the restructuring process; therefore, after their election, the employees continued to work. Over the next ten months, American began to terminate them individually. The earliest termination occurred on December 30, 1994, while the latest did not occur until September 29, 1995. After each termination, American paid the VERP's enhanced retirement benefits. For several months (the precise period is unclear from the record), each of the appellants accepted and retained these benefits.

On October 27, 1995, over a year after the appellants elected to participate in the VERP, they began to file administrative age discrimination claims with both the Puerto Rico Anti-Discrimination Unit ("ADU") and the Equal Employment Opportunity Commission ("EEOC") variously claiming that their election to participate in the VERP was involuntary and that American had discriminated against them on the basis of age. In general, the complaints alleged that certain management employees had led older employees to believe that American planned to move the operations in the reservation and cargo departments to another location or subcontract to an outside company, placing their jobs in jeopardy. However, once the employees elected to retire, American asked them to train new, younger replacements to fill their jobs. The claimed threatened job losses never materialized.

II. Prior Proceedings

On April 18, 1996, American Airlines responded to the appellants' ADU filings by initiating the instant declaratory judgment action. See 28 U.S.C. § 2201. In its pleadings, American asked the district court to issue an order declaring the rights and obligations of the parties in connection with the VERP under the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1132(a)(3). 1 Subsequently, American moved under Fed.R.Civ.P. 67 to have the court approve the deposit of future payments of the employees' retirement benefits into a court-designated bank account (the "court registry"). The court granted that motion, and, since May 1996, American has paid the monthly payments due under the VERP into an interest-bearing account.

The employees counterclaimed against American for age discrimination under the ADEA, the Older Workers Benefits Protection Act ("OWBPA"), 29 U.S.C. § 626(f), and 29 L.P.R.A. §§ 146 et seq., known colloquially as Puerto Rico "Law 100." Evidently, once the district court allowed American to deposit the employees' retirement benefits into the court registry, a number of the original employee counterclaimants abandoned their claims. Of the twenty-one employees who brought the original counterclaim, only eleven remain in the case on appeal.

On July 22, 1996, American moved for summary judgment requesting a declaration that: (1) the employees had ratified the release agreement under both federal and local law; and (2) the defendants could not maintain any claims relating to their early retirement. American also moved for summary judgment on the employees' counterclaim arguing, inter alia, that the employees' administrative filings had been untimely. The court granted American's motion, and on January 27, 1997, issued a declaratory judgment that:

(1) Defendants have ratified the release agreements entered into by them in connection with their acceptance of early retirement benefits from American;

(2) the release agreements preclude defendants from raising any claims against American relating to their employment or retirement, including the claims for age discrimination under the [ADEA, OWBPA, and Puerto Rico Law],

(3) Defendants failed to file their claims of age discrimination with the EEOC and Puerto Rico's Anti-Discrimination Unit within the applicable limitations period.

In light of this declaration, the district court granted American's motion for summary judgment on the employees' ADEA and Law 100 counterclaims. This appeal followed.

III. Standard of Review

We "review a district court's grant of summary judgment de novo." Marrero-Garcia v. Irizarry, 33 F.3d 117, 119 (1st Cir.1994). Summary judgment is appropriate when "the pleadings, depositions, answers to interrogatories, and admissions on files, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). In reviewing an award of summary judgment, we must scrutinize the record in the light most amiable to the party opposing the motion, indulging all reasonable inferences in that party's favor. Griggs-Ryan v. Smith, 904 F.2d 112, 115 (1st Cir.1990). Notwithstanding the liberality of this standard, the nonmovant cannot simply rest on unsworn allegations. Morris v. Gov't Dev. Bank of Puerto Rico, 27 F.3d 746, 748 (1st Cir.1994). "[T]o defeat a properly supported motion for summary judgment, the nonmoving party must establish a trial-worthy issue by presenting ...

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