Cipriano v. Board of Educ. of City School Dist. of City of North Tonawanda, N.Y.

• Decision Date: 04 March 1986
• Docket Number: No. 60,D,60
• Citation: 785 F.2d 51
• Court: U.S. Court of Appeals — Second Circuit
• Parties: 40 Fair Empl.Prac.Cas. 355, 39 Empl. Prac. Dec. P 35,969, 54 USLW 2494, 38 Ed. Law Rep. 25, 7 Employee Benefits Ca 1145 Sarah M. CIPRIANO and Jeune M. Miller, Plaintiffs-Appellants, v. BOARD OF EDUCATION OF the CITY SCHOOL DISTRICT OF the CITY OF NORTH TONAWANDA, NEW YORK, and North Tonawanda United Teachers, Defendants-Appellees. ocket 85-7366.

Page 51

785 F.2d 51

40 Fair Empl.Prac.Cas. 355,

39 Empl. Prac. Dec. P 35,969, 54 USLW 2494,

38 Ed. Law Rep. 25, 7 Employee Benefits Ca 1145

Sarah M. CIPRIANO and Jeune M. Miller, Plaintiffs-Appellants, v. BOARD OF EDUCATION OF the CITY SCHOOL DISTRICT OF the CITY OF NORTH TONAWANDA, NEW YORK, and North Tonawanda United Teachers, Defendants-Appellees.

No. 60, Docket 85-7366.

United States Court of Appeals Second Circuit.

Submitted Oct. 16, 1985.

Decided March 4, 1986.

Brock, Brock & Zisser, Buffalo, N.Y. (David Gerald Jay, Buffalo, N.Y., of counsel), for plaintiffs-appellants.

James E. Rooney, North Tonawanda, N.Y., for defendant-appellee Bd. of Educ.

Bernard F. Ashe, Albany, N.Y. (Rocco A. Solimando, Ira Paul Rubtchinsky, Albany, N.Y., of counsel), for defendant-appellee Teachers Ass'n.

Alfred Miller, Steven S. Honigman, Peter N. Greenwald, New York City (Miller, Singer & Raives, Steven Zaleznick, Christopher G. Mackaronis, New York City, of counsel), for amicus American Ass'n of Retired Persons.

McGivern, Shaw & O'Connor, Albany, N.Y. (Henry F. Sobota, Albany, N.Y., of counsel), for amicus New York State School Boards Ass'n.

Before FRIENDLY, KAUFMAN and PRATT, Circuit Judges.

FRIENDLY, Circuit Judge:

This is an appeal from an order of the District Court for the Western District of New York granting summary judgment in favor of defendants in an action under the Age Discrimination in Employment Act (ADEA), 29 U.S.C. Secs. 621-634, brought by two former teachers in the North Tonawanda City School System against the Board of Education of the City School District of the City of North Tonawanda, New York (the Board) and the North Tonawanda United Teachers (the Union). The complaint was directed at a provision of a collective bargaining agreement between the defendants effective July 1, 1980, through June 30, 1983 (sometimes hereafter "the incentive plan"), which offered retirement incentives ¹ to members of the bargaining unit between the ages of 55 and 60 who retired effective between July 1 and February 1 in any of the three years of the agreement and had completed 20 years of service under the New York State Teachers Retirement System. These payments were in addition to the benefits otherwise payable upon early retirement. Unfortunately, because of the premature stage at which the decision below was rendered, the record does not include the terms of the underlying retirement plan in effect in the school system. We assume, based on the reference in the collective bargaining agreement and on statements in defendants' briefs, Brief for Appellee Board at 8; Brief for Appellee Union at 14, that the school system subscribed to the retirement plan in effect under the New York State Teachers' Retirement System (NYSTRS), N.Y.Educ. Law Secs. 501-535 (McKinney 1969 & Supp.1984).

Plaintiffs were 61 years old on July 1, 1980, and thus ineligible for the incentive plan by its terms. ² They retired on June 30, 1981, when they were over 61 years old. On May 23, 1981, shortly before their retirement, contending that depriving them of the incentives because of their age violated the ADEA, plaintiffs filed complaints with the Equal Employment Opportunity Commission (EEOC), which is alleged to have sent a letter of violation to the defendants on April 27, 1982. Thereafter the EEOC attempted to conciliate plaintiffs' claim but commenced no formal action on plaintiffs' behalf. Plaintiffs then commenced this action on January 24, 1984, each claiming as damages the $10,000 she would have been entitled to receive under Option B if the incentive plan had applied to her at the time of her retirement, in addition to punitive damages based on the allegedly wilful nature of the violation, attorney's fees, costs, and other appropriate relief.

The Board filed an answer, containing ten "affirmative defenses." None of these was the provision in Sec. 4(f)(2) of the ADEA, 29 U.S.C. Sec. 623(f)(2), which was to become the basis for the decision below. The Union filed a motion to dismiss the complaint on various grounds, including that it failed to state a claim upon which relief can be granted, which the district court appears to have treated as having been filed on behalf of the Board as well. The asserted failure to state a claim was premised on Sec. 4(f)(2), which provides that it shall not be unlawful for an employer, employment agency, or labor organization to

observe the terms of a bona fide seniority system or any bona fide employee benefit plan such as a retirement, pension or insurance plan, which is not a subterfuge to evade the purposes of this chapter, except that no such employee benefit plan shall excuse the failure to hire any individual, and no such seniority system or employee benefit plan shall require or permit the involuntary retirement of any individual specified by section 631(a) of this title because of the age of such individual[.]

After oral argument some months later the court entered an order stating that upon the present record the court was unable to grant the defendants' motion to dismiss and that it was unable to treat the motion as one for summary judgment, since the defendants had failed to provide the court with affidavits accompanied by a copy of the collective bargaining agreement. The order directed the defendants to file an affidavit to which such a copy was attached, with the averments restricted to the authenticity of the agreement; plaintiffs' response, if any, was to be similarly limited. The Union filed an affidavit apparently complying with the court's direction; the docket entries recite that plaintiffs filed an affidavit in opposition but this is not in the record before us.

After several months the judge rendered an opinion granting summary judgment in favor of the defendants in reliance on Sec. 4(f)(2). Stressing the voluntary nature of the incentive plan, he found that the plan attacked by the plaintiffs was a bona fide retirement plan within Sec. 4(f)(2) and that there was "nothing in this record to indicate that this plan is a subterfuge to evade the purposes of the act." After citing Mason v. Lister, 562 F.2d 343 (5 Cir.1977), and Patterson v. Independent School District # 709, 742 F.2d 465 (8 Cir.1984), he went on to say:

Congress meant to protect older individuals against forced discharge and barriers blocking employment opportunities when it enacted the ADEA. At the same time, Congress meant to preserve incentives for early voluntary retirement, recognizing that they are useful and necessary devices which employers can use to manage their work forces. The plan at issue here is consistent with both objectives.

No reference was made to our statement in EEOC v. Home Insurance Company, 672 F.2d 252, 257 (2 Cir.1982), that the burden of proving absence of subterfuge for the purposes of the Sec. 4(f)(2) defense is on the defendants.

Plaintiffs appealed. Their initial brief, of six pages, was perfunctory. A more helpful brief in support of their position was filed by the American Association of Retired Persons as amicus curiae. Briefs were filed by the Board and the Union as appellees, and by the New York State School Boards Association as amicus curiae urging affirmance. The case was submitted without oral argument.

DISCUSSION

Decision here is rendered difficult because of the peculiar posture in which the case comes to us. While the district court went through the form of converting the Union's Rule 12(b)(6) motion into one for summary judgment, the limitations which it imposed on the affidavits of both parties prevented them from having a "reasonable opportunity to present all material made pertinent to such a motion by Rule 56," as Rule 12(b)(6) requires. Cf. Beacon Enterprises, Inc. v. Menzies, 715 F.2d 757, 767 (2 Cir.1983). The practical effect was the same as if plaintiffs had amended their complaint to append the collective bargaining agreement and defendants had moved to dismiss the case under Rule 12(b)(6) for failure to state a claim upon which relief can be granted. For purposes of our discussion, we shall treat the case as if it had been decided in this way.

It is undisputed that, if it were not for Sec. 4(f)(2), the incentive plan would run afoul of Sec. 4(a)(1) of the ADEA, 29 U.S.C. Sec. 623(a)(1), which makes it unlawful for an employer

to fail or refuse to hire or to discharge any individual or otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's age.

Appellants offer two principal arguments to explain why the incentive plan does not come within Sec. 4(f)(2). They contend that defendants have failed to sustain the burden of showing that it was a "bona fide employee benefit plan such as a retirement, pension, or insurance plan" and that, if the first argument fails, defendants have failed to sustain the burden of showing that it was not a subterfuge to evade the purposes of the ADEA.

We see no merit in appellants' first contention. On its face the incentive plan is a "bona fide employee benefit plan" in the sense that employees benefited and substantial benefits were paid to employees who were covered by it, see United Air Lines, Inc. v. McMann, 434 U.S. 192, 194, 98 S.Ct. 444, 446, 54 L.Ed.2d 402 (1977); EEOC v. Home Insurance Co., supra, 672 F.2d at 257. Apart from the fact that the phrase "such as a retirement, pension, or insurance plan" provides illustrations rather than limitations, Brennan v. Taft Broadcasting Co., 500 F.2d 212, 215 (5 Cir.1974); Patterson v. Independent School District # 709, supra, 742 F.2d at 466-67; EEOC v. Westinghouse Electric Corp., 725 F.2d 211, 224 (3 Cir.1983), cert. denied, --- U.S. ----, 105 S.Ct. 92, 83 L.Ed.2d 38 (1984), we see no reason to doubt that the incentive plan, when read as a supplement to an underlying general retirement plan, was a "retirement" plan for the purposes of Sec. 4(f)(2).

Appellants would...