Bowman v. Firestone Tire & Rubber Co.

• Citation: 724 F. Supp. 493
• Decision Date: 12 July 1989
• Docket Number: No. C88-1965-A.,C88-1965-A.
• Court: U.S. District Court — Northern District of Ohio
• Parties: Clyde J. BOWMAN, Jr., et al., Plaintiff, v. The FIRESTONE TIRE & RUBBER COMPANY, Defendant.

724 F. Supp. 493

Clyde J. BOWMAN, Jr., et al., Plaintiff, v. The FIRESTONE TIRE & RUBBER COMPANY, Defendant.

No. C88-1965-A.

United States District Court, N.D. Ohio, E.D.

July 12, 1989.

William R. Holland, Akron, Ohio, Philip W. Duer, Nashville, Tenn., for plaintiff.

John E. Holcomb, Millisor & Nobil, Akron, Ohio, for defendant.

ORDER

SAM H. BELL, District Judge.

Pending before the court are motions filed by defendant, The Firestone Tire & Rubber Co.'s (Firestone). The first is a motion for summary judgment on plaintiffs' cause of action under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq. and the second is defendant's motion for summary judgment relating to plaintiffs' pendent causes of action. The plaintiffs have filed their opposition to summary judgment and defendant its reply. The parties have supported their motion with affidavits, depositions and attached case law.

STATEMENT OF FACTS

The case at bar is part of the saga of the decline of a great American industry and the resultant price paid by its employees. In the course of time, Firestone, a local industrial giant with its flagship post in the rubber capital, Akron, was caught up by the then prevailing economic forces. Profitability declined, sales dwindled and management acted to save the saveable and set a new course and direction for the company. Firestone embarked on a course of reorganization that included early retirement incentives to the workforce; reduction in work force, i.e., terminations; divestiture of unprofitable concerns; and the culmination of this metamorphosis—Firestone being "bought" by the Japanese competitor, Bridgestone, Inc. and moving its headquarters to Chicago.

This action grew out of the June 30, 1986 sale of the Firestone Retread Division to the Pro-Tread Corporation (Pro-Tread) from Michigan. At one time the Retread Division boasted over 200 plants, but that number dwindled to 25 and registered losses in the millions (in 1984 the Retread Division had a loss of $1,934,601.00, and in 1985 $1,558,450.00). Frye Affidavit. Under the terms of the divestiture, the purchaser, Pro-Tread, immediately employed all of defendant's Retread Division employees in the same location, with the same rate of pay, performing the same essential functions. Thus, the Retread division employees did not miss a day of work.

Against this backdrop, the plaintiffs are:

Clyde J. Bowman (Bowman), — senior analyst of budgeting and planning for the Firestone Retread Products Division, located in Akron, classified as an "Akron other than Field Salaried Employee," grade level "A 12"; a Firestone employee since 1957.

Donovan C. Smith (Smith), — retread products plant manager for Firestone's production facility in Nashville, Tennessee. Smith was classified as "field" level salaried employee.

J.V. Dunn (Dunn) — local retread plant manager for Firestone's production facility located in Charlotte, North Carolina and who had held that job since 1985. Like Smith, Dunn was designated as a "field" level salaried employee.

In their complaint, the plaintiffs advance several claims:

Count I is a common law claim of breach of implied contract and promissory estoppel, based on the alleged promises and assurances of termination pay and back pay contained in various versions and editions of salaried employee handbooks (Firestone Handbooks) and job posting policies.

Count II alleges a violation of Ohio Revised Code § 4101.17 (the OADEA), contending that the defendant's wide use of Age Data Forms, coupled with the fact that the plaintiffs were not transferred, bumped or downgraded to other Firestone jobs for which they were qualified resulted in age discrimination in violation of the OADEA.

Count III is a claim under 29 U.S.C. § 1132(a)(1)(B), ERISA, as it relates to denial of termination or severance pay to plaintiffs.

Count IV is also an ERISA claim under 29 U.S.C. §§ 1021-1025 and 1140, alleging non-disclosure of the benefit plans to the plaintiffs as mandated by the statute, and interference with protected rights.

Following the sale to Pro-Tread, all 275 retread division employees were transferred to Pro-Tread and plaintiffs admitted that no one that they could recall was allowed to "bump" or bid into a different, available Firestone position. (Dunn Dep. 26; Smith Dep. 24).

Plaintiff Bowman transferred to Pro-Tread and continued to earn the same salary that he earned at Firestone; moreover, because of his age and years of service he retired from Firestone effective July 1, 1986 (sale date June 30, 1986) and started receiving $1,008.33 per month plus comprehensive medical insurance benefits which were to continue for the remainder of his life. (Bowman Interog. 18(a), (b), (c), (d)). He made two written requests for Firestone severance benefits (Bowman Dep. Exhs. E, F, G, H), but they were both denied.

Plaintiff Smith likewise transferred to Pro-Tread and also elected to receive Firestone pension benefits of $645.65 per month, commencing on the day he was first employed by Pro-Tread at the same rate, same position and same location. Plaintiff Dunn was also employed by Pro-Tread at the same rate, position and location as he had been with Firestone.

Much of this action centers and revolves around the so-called "Firestone Handbooks," employee manuals produced and distributed by Firestone. First, it is important to establish that there were different and separate handbooks for the "Akron grade salaried personnel" (Bowman) and the "Field" personnel, which apply to plaintiffs Dunn and Smith. These handbooks were periodically updated, (Dunn Dep. 27, Smith Dep. 55, Bowman Dep. 58).

Plaintiffs rely primarily on the 1975 handbooks, but plaintiffs acknowledged that they were aware of and received the updated versions from 1984 and 1985 as well. (Dunn Dep. 27; Smith Dep. 55). Further, depending on plaintiffs' status as either field or Akron grade salaried employees, they were governed by different personnel policies, procedures, manuals and handbooks. (Coles' Aff. ¶¶ 2, 5, Exh. C; Zemla Aff. ¶ 5, Exh. C).

Defendant moved to separate plaintiffs and sever claims because such different manuals and policies apply to them. Furthermore, defendant moved for summary judgment on the ERISA claims in separate motions, one motion for plaintiff Bowman and another for plaintiffs Smith and Dunn. However, upon examining the numerous handbooks and manuals the court found that there were only two major differences in the employment conditions. (1) "Akron" grade salaried employees had posting/bidding rights, that the "Field" salaried employees did not have. (2) As to termination pay, if eligible, Akron grade employees were to receive ten days pay for every year of credited service while "field" employees were to get thirty days pay per every five years of credited service. There were also certain differences in the language and detail of the different handbooks and manuals, but for the purposes of this summary judgment motion the court will address them together. As to the pendent state claim, the defendant used one motion for summary judgment regarding all three plaintiffs. The court will address the ERISA claims first and then the pendent state claims.

LAW AND DISCUSSION

Pursuant to Rule 56(c) of the Federal Rules of Civil Procedure, the party moving for summary judgment has the burden of showing that no genuine issue of material fact exists and that as a matter of law, it is entitled to summary judgment. In reviewing a motion for summary judgment, a court must consider the pleadings, related documents and evidence and all reasonable inferences in a manner most favorable to the non-moving party. Adickes v. S.H. Kress & Co., 398 U.S. 144, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970); Smith v. Hudson, 600 F.2d 60 (6th Cir.1979); cert. dismissed, 444 U.S. 986, 100 S.Ct. 495, 62 L.Ed.2d 415 (1979); Board of Ed. Cincinnati v. Department of H.E.W., 532 F.2d 1070 (6th Cir.1976). The inquiry performed at this stage is whether a trial is required to resolve genuine factual issues. "There is no issue for trial unless there is sufficient evidence favoring the non-moving party for a jury to return a verdict for that party. If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50, 106 S.Ct. 2505, 2510-11, 91 L.Ed.2d 202 (1986) (citations omitted). See, also, Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

ERISA Claims

I. Controlling Handbooks and Their Terms:

Any initial inquiry must determine which employee handbooks or personnel manuals governed at the time of the Retread Division divestiture. Plaintiffs claim under the 1975 handbook which was closely analyzed both at appellate and Supreme Court level in the Bruch v. Firestone case, 828 F.2d 134 (3d Cir.1987); Firestone Tire & Rubber Co. v. Bruch, ___ U.S. ___, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989). Defendants, however, argue that at the time of the June 30, 1986 divestiture the updated versions of these documents were in effect and governed the rights of the plaintiffs. The recent opinion of the Sixth Circuit Court of Appeals in Brown v. Ampco-Pittsburgh Corp., 876 F.2d 546 held that the welfare benefit plan defined in the documents in effect at the time of the termination governs the rights of the employees. In Brown the issue was when exactly were the laid off workers "terminated." They were laid off when the 1984 plan was in effect, but were allegedly "formally terminated" when the 1986 plan was already in effect. The court of appeals remanded the case to the district court to determine under the new Bruch de novo standard of review when the "termination" occurred. As the court said:

We conclude that both the 1984 and 1986 plans are valid. The question is when did the plaintiffs' right to termination allowances vest. (Emphasis added). Id. at 551.

In the case at...