Bodnar v. Synpol, Inc., 86-2966
| Decision Date | 26 April 1988 |
| Docket Number | No. 86-2966,86-2966 |
| Parties | 46 Fair Empl.Prac.Cas. 1086, 93 A.L.R.Fed. 1, 46 Empl. Prac. Dec. P 37,926, 56 USLW 2662, 9 Employee Benefits Ca 2285 Stephen J. BODNAR, Plaintiff-Appellant, v. SYNPOL, INC., Defendant-Appellee. J.E. BLANKENSHIP and B.E. Welch, Plaintiffs-Appellants, v. SYNPOL, INC., Defendant-Appellee. |
| Court | U.S. Court of Appeals — Fifth Circuit |
H.P. Wright, Wright & Pitre, Port Neches, Tex., for plaintiffs-appellants.
Stephen W. Smith, T.J. Wray, Fulbright & Jaworski, Houston, Tex., for defendant-appellee.
Appeal from the United States District Court for the Eastern District of Texas.
Before GARWOOD and JONES, Circuit Judges, and HITTNER *, District Judge.
The district court granted summary judgment against the three appellants, former employees of Synpol, Inc., who assert that their employer constructively discharged them in violation of the Age Discrimination in Employment Act, 29 U.S.C. Sec. 626(b) (ADEA). 633 F.Supp. 13 (E.D.Tex.1986). We affirm the summary judgment because the early retirement program as instituted and executed by Synpol did not constructively discharge them.
We recite as background the uncontested facts gleaned from the summary judgment evidence before the trial court. Synpol, Inc., formerly a subsidiary of Uniroyal, Inc., produces synthetic polymers in a plant in Port Neches, Texas. In 1983, Synpol's market for a synthetic polymer used in new car tires began to deteriorate drastically, prompting the company to embark on a dramatic cost reduction program. This program was announced to all employees in an information bulletin issued September 28, 1983. The information bulletin announced that the company intended to reduce capital spending, reduce costs due to absences, and reduce salary costs ten percent to fifteen percent through normal retirement, a Special Early Retirement Incentive The Special Early Retirement Incentive Program (SERIP) was formulated to include salaried employees who were eligible for early retirement under the company's pension plan, having reached age 55 with ten years of company service. Certain eligible employees deemed essential to the company were not asked to participate in the SERIP. The SERIP necessarily excluded employees covered by collective bargaining agreements. At that time, out of a total work force of approximately 450 employees, there were about 160 managerial employees.
Program and reorganization to eliminate some jobs.
Twenty-eight employees were offered early retirement under the SERIP on September 27 and 28, 1983. Their retirement date would be effective no later than November 1st. They were given 15 days to accept or reject the offer. A variable bonus of up to $20,000 cash was the incentive for early retirement. The plan was discussed individually with each of the employees to whom it was offered. Eventually, 21 of the offerrees accepted the SERIP agreement, which included a release of claims against Synpol. The seven employees who declined early retirement under the SERIP are still employed by the company.
Appellants' evidence focuses on certain facts that are claimed to raise a jury issue concerning constructive discharge. First, they assert that the eligible employees were told that if they did not participate in the SERIP and their job was eliminated, they would not receive any severance pay or benefits. The employees did not "volunteer" to participate in early retirement but were "chosen" by the employer. They were told there would be a reduction in the work force. They were not given information concerning who, or how many, employees had been offered or had accepted the retirement plan. They were instructed not to discuss the SERIP offer with anyone else. Requests for additional time to consider the plan beyond the 15-day period were denied. Presentations concerning early retirement under the SERIP were made to the employees in an allegedly "threatening" manner.
Appellants assert that they were constructively discharged from their jobs by Synpol. 1 The test for this charge is whether a reasonable person in the employees' position would have felt compelled to resign under the circumstances. Downey v. Southern Natural Gas Co., 649 F.2d 302, 305 (5th Cir.1981). Because this is an appeal from a summary judgment, we review the evidence in the light most favorable to the nonmovants for the purpose of determining whether any genuine issue of material fact exists that requires a trial. Fed. Rule Civ.Proc. 56(c); Powers v. Nassau Development Corp., 753 F.2d 457, 462-3 (5th Cir.1985).
In general, an employer's adoption of an early retirement plan does not create a prima facie case of age discrimination under the ADEA. 2 Henn v. National Geographic Society, 819 F.2d 824 (7th Cir.1987); Gray v. New England Telephone and Telegraph Company, 792 F.2d 251, 255 (1st Cir.1986); Ackerman v. Diamond Shamrock Corp., 670 F.2d 66 (6th Cir.1982). We need not recite the manifold reasons that justify such plans and render them, in many situations, the fairest alternative available to a company. But, from the employee's perspective, as Judge Easterbrook explained in Henn:
Provided the employee may decline the [early retirement] offer and keep working under lawful conditions, the offer makes him better off. He has an additional option, one that may be ... worth a great deal of money. He may retire, receive the value of the package, and either take a new job (increasing his income) or enjoy new leisure. He also may elect to keep working and forfeit the package. This may put him to a hard choice; he may think the offer too good to refuse; but it is not Don Corleone "make him an offer he can't refuse." "Your money or your life?" calls for a choice, but each option makes the recipient of the offer worse off. When one option makes the recipient better off, and the other is the status quo, then the offer is beneficial. That the benefits may overwhelm the recipient and dictate the choice can not be dispositive."
The picture becomes more complicated, however, when the offer of early retirement irrevocably changes the employee's status quo. In Downey, for example, the employee was apparently singled out, told his company had nothing for him to do and that he was in danger of being discharged and losing retirement benefits. We held that the threat of being discharged with a loss of benefits created a sufficient contested issue of material fact to make summary judgment on the employee's age discrimination claim improper. 649 F.2d 302, 305. Downey is not entirely apposite here, because it involved a claimed unique discriminatory act rather than a plan offered to numerous employees. Downey does, however, set an outer bound on permissible employer activity. An employer's "offer" of early retirement may create a prima facie case of age discrimination by constructive discharge if it sufficiently alters the status quo...
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