Cleary v. United States Lines, Inc.

• Decision Date: 27 January 1983
• Docket Number: Civ. A. No. 81-1766.
• Citation: 555 F. Supp. 1251
• Parties: Francis X. CLEARY, Plaintiff, v. UNITED STATES LINES, INC. and United States Lines Operations, Inc., Defendants.
• Court: U.S. District Court — District of New Jersey

555 F. Supp. 1251

Francis X. CLEARY, Plaintiff, v. UNITED STATES LINES, INC. and United States Lines Operations, Inc., Defendants.

Civ. A. No. 81-1766.

United States District Court, D. New Jersey.

January 27, 1983.

COPYRIGHT MATERIAL OMITTED

Bourne, Noll & Kenyon, P.A. by Steven P. Kartzman, Summit, N.J., for plaintiff.

Meyner & Landis by John N. Malyska, and Geralyn A. Boccher, Newark, N.J., for defendants.

OPINION

SAROKIN, District Judge.

Plaintiff, Francis Cleary, is a 64 year-old American citizen who was employed in England by one of the defendants, United States Lines Operations, Inc. ("Operations"). In 1979, Mr. Cleary's employment was terminated by the company. That termination, Mr. Cleary alleges, was unlawful and violated his rights under the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. §§ 621-34. Defendants have moved for summary judgment. Among the questions that this court must determine is whether the ADEA applies to American citizens working for United States companies in offices in foreign countries.

Mr. Cleary began his employment with defendant United States Lines, Inc. ("USL"), in 1946 as a clerk in the company's offices. Over the following 33 years, plaintiff worked either for USL or for Operations. USL is a Delaware corporation having its principal place of business in Cranford, New Jersey. The company is engaged in the international transportation of cargo and has offices throughout the world. Operations is a New York corporation which is wholly owned by USL. Operations has its principal place of business in London and acts as an agent for USL in shipping cargo throughout Europe. Operations does not conduct any business in the United States and is not licensed by the Interstate Commerce Commission to engage in interstate commerce. All ten officers of Operations and four of its five directors are also officers and directors of USL.

Combined, USL's European division and Operations employ 350 persons in Europe. Only 11 of these employees are American nationals, the remainder are either citizens of the host country or third-country nationals. Employees of USL and Operations are freely transferred between each company.

Since 1956, plaintiff has been employed full time in Europe either by USL or by one of its subsidiaries. In 1967, Mr. Cleary was transferred from USL in Germany to Operations in London. As an American working abroad, Mr. Cleary received benefits from defendants that were not available to British or third-country nationals working in England. In particular, plaintiff was paid a cost of living allowance as compensation for the difference in exchange rates, was provided with transportation to the United States once a year for himself and for his family, was reimbursed for income taxes paid to the United Kingdom in excess of what he would have paid to the United States Government were he working here, was included in USL's retirement fund, and had his check deposited in a New York bank.

When plaintiff began his employment with Operations in 1967, the company, as it was obligated to do under English law, furnished Mr. Cleary with a written statement of the terms of his employment. Mr. Cleary signed the statement and, in addition, executed a contract of employment with Operations. The contract was similar to that offered to other employees of Operations. It made no mention of ADEA coverage directly or indirectly.

On June 18, 1979, plaintiff was advised that his employment was being terminated and that his last day of work would be on June 22, 1979. Who made the decision to fire Mr. Cleary is disputed. Defendants contend that the decision was made and executed in London by A.J. Mayor, vice president of USL's European division and vice president of Operations. Plaintiff, on the other hand, contends that the decision was not final until William Bru, chairman of the board and chief executive officer of defendants, was consulted. Mr. Bru's office was in New York at the time of Mr. Cleary's termination.

When plaintiff was terminated, he was at first told that his job had been eliminated due to a structural reorganization. Subsequently, defendants stated that the dismissal was for poor job performance and for failure to improve despite repeated warnings. Mr. Cleary denies these contentions; he alleges that he was never notified, either orally or in writing, that his performance did not meet company standards. To support this claim, plaintiff has submitted as an exhibit a letter from defendants' vice president William Brinkman. The letter, which advised Mr. Cleary that he would be receiving a salary increase effective January 1, 1978, stated:

In reviewing your performance, one can sic be impressed by the total commitment you have for your work. There is no doubt that your good relationship with our Military friends contributes to the well being of our Company, and that your involvement is instrumental in our Military Receivables being as well under control as they are.

In addition to Mr. Brinkman's letter, the record discloses a job evaluation, dated January 3, 1979, in which Mr. Cleary's overall performance was rated as being "Above Satisfactory". For the first quarter of 1979, Mr. Cleary received a $658.00 bonus. On June 8, 1979, ten days before he was notified of his termination, plaintiff alleges that he was informed by his immediate superior, Robert Splan, that he was going to be transferred to USL's corporate headquarters in Cranford, New Jersey.

From June 22, 1979 to August 23, 1979, correspondence was exchanged by plaintiff and defendants regarding the terms and conditions of termination. In a letter to Mr. Cleary dated June 22, Mr. Mayor confirmed Mr. Cleary's discharge and outlined his termination benefits. Mr. Mayor stated that Mr. Cleary was entitled to severance compensation calculated at the rate of one week's pay for each of plaintiff's 33 years of service, plus five weeks of vacation pay. In the letter, Mr. Mayor also stated that Mr. Cleary and his family would be reimbursed for the expense of moving to any destination chosen so long as the move was made by January 1, 1980. In lieu of a physical move, plaintiff was advised that he could elect a cash settlement based upon three bids from moving companies to be submitted by Mr. Cleary.

In a letter dated June 26, 1979, Mr. Cleary responded to Mr. Mayor that his outline of the termination benefits to which Mr. Cleary was entitled did not comport with company policy. Mr. Cleary stated that he should be granted at least two weeks' salary for each year of service because of his unblemished record and because that is what other senior employees had been paid upon separation. In addition, because he was uncertain of his future plans, Mr. Cleary stated that he would accept a cash settlement to cover relocation expenses. He also requested an allowance for air fare to London from the United States so that his children, who had lived in London but were attending school in the United States, could return to settle their affairs. Finally, plaintiff requested that he receive compensation to cover four round-trip air fare tickets, representing his usual allowance for "home leave", which he had planned to take in late July.

On July 3, 1979, Mr. Mayor advised plaintiff that a full year of severance pay and five weeks of vacation pay would be granted, but that no allowance would be permitted for "home leave" or for travel expenses to London for Mr. Cleary's children. In addition, Mr. Mayor stated that a cash settlement for relocation would not be granted but that instead plaintiff would be reimbursed for actual costs incurred for relocating to the United States. No time was mentioned in the letter by which Mr. Cleary would have to return to the United States to be reimbursed for relocation costs. In the letter, it was stated that benefits not specifically mentioned in the letter would be paid in accordance with company policy. At the bottom of the letter, above a blank line for Mr. Cleary's signature, was the following statement: "The terms of this letter are agreed to by the undersigned." This statement was executed by Mr. Cleary and was returned with a cover letter dated July 13, 1979, in which Mr. Cleary stated: "I am returning herewith a copy of your letter dated July 3, 1979, duly signed by me signifying acceptance of the terms contained therein covering my separation from United States Lines, effective June 22, 1979."

Four days later, on July 17, 1979, Mr. Cleary sent a letter to Mr. Mayor and submitted three bids for relocation from London to the United States. In the letter, Mr. Cleary noted that if a cash settlement were not paid, defendants would bear the risk of escalated moving and air fare costs at the time that the actual relocation took place.

Mr. Grant, USL's personnel director, answered Mr. Cleary's letter to Mr. Mayor on July 26, 1979. In the letter, Mr. Grant stated that Mr. Cleary would have to relocate to the United States within three months from the date of his termination to qualify for the reimbursement of relocation costs. On August 20, 1979, Mr. Cleary, responding to Mr. Grant, objected to the three-month limitation, stated that it violated company policy, and re-stated his preference for a cash settlement. Three days later, Mr. Grant responded by extending the time for relocation until December 31, 1979, and by denying Mr. Cleary's request for a cash settlement.

Mr. Cleary subsequently retained solicitors in London. On September 20, 1979, plaintiff's solicitors filed a complaint on his behalf with the London Industrial Tribunal. The complaint alleged that defendants had violated the law by discharging Mr. Cleary without giving him three months' notice as was required by English law. Defendants interposed defenses and on January 28, 1980, a settlement was reached which obtained the approval of the Industrial Tribunal. The settlement agreement stated that Operations would pay to Mr....