E.E.O.C. v. Westinghouse Elec. Corp.
| Decision Date | 02 February 1989 |
| Docket Number | No. 86-1226,86-1226 |
| Citation | 869 F.2d 696 |
| Parties | 50 Fair Empl.Prac.Cas. 988, 48 Empl. Prac. Dec. P 39,447, 13 Fed.R.Serv.3d 278 EQUAL EMPLOYMENT OPPORTUNITY COMMISSION v. WESTINGHOUSE ELECTRIC CORPORATION, Appellant. |
| Court | U.S. Court of Appeals — Third Circuit |
Dona S. Kahn, Harris & Kahn, Philadelphia, Pa., Thomas L. Morrissey, Carpenter, Bennett & Morrissey, Newark, N.J., James D. Crawford (argued), Schnader, Harrison, Segal & Lewis, Philadelphia, Pa., Andrew M. Kramer, Patricia A. Dunn, Jones, Day, Reavis & Pogue, Washington, D.C., for appellant.
Gale Barron Black, Irene L. Hill, Johnny J. Butler (argued), E.E.O.C., Appellate Services Div., Washington, D.C., Alfred Miller, Miller, Singer & Raives, P.C., New York City, for appellee.
SUR PETITION FOR PANEL REHEARING
Before: HIGGINBOTHAM, SCIRICA and GARTH, Circuit Judges.
1. After consideration of the contentions raised in the petition for rehearing filed by Westinghouse Electric Corporation in the above-entitled case and the response thereto by the Equal Opportunity Employment Commission, and all judges who participated in the decision of this Court having asked for rehearing on the basis of the contentions raised in the petition for panel rehearing, the petition for rehearing is granted. Reargument is not granted in this matter. The panel is unanimously of the opinion that the facts and legal arguments are adequately presented in the briefs and record. Rules of the United States Court of Appeals for the Third Circuit, Court Rule 12(6)(a).
2. After rehearing, the opinion in the above-entitled matter filed on November 30, 1988 is vacated, and an amended opinion is hereby filed.
3. Judge Garth would also have granted Westinghouse's petition with regard the panel's decision to remand the issue of willfulness to the district court, rather than reversing the district court's willfulness determination. In so voting, Judge Garth relies upon the analysis and reasons set forth in his separate opinion which dissented from the panel's disposition of the willfulness issue. In that opinion, Judge Garth urged that the only appropriate disposition of the willfulness issue was an outright reversal of the district court's willfulness finding.
Before HIGGINBOTHAM, SCIRICA and GARTH, Circuit Judges.
This appeal arises from an action brought by the Equal Employment Opportunity Commission against Westinghouse Electric Corporation, based on the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. Secs. 621-634 (1982). The EEOC alleges that Westinghouse's 1979 and 1982 pension and severance pay policies, 1 discriminate based on age. After a bench trial, the district court found that Westinghouse's plans discriminate based on age, and that Westinghouse willfully violated the ADEA. Westinghouse appeals from that decision.
In our review, we must determine whether Westinghouse's 1979 pension and severance pay plans, denying severance pay to retirement-eligible employees who are terminated or laid off, violate Sec. 4(a)(1) of the ADEA, 29 U.S.C. Sec. 623(a)(1). We must also decide whether Westinghouse's 1982 pension and severance pay plans, which allow retirement-eligible, involuntarily terminated employees to elect either severance pay or retirement benefits, but not both, violate 29 U.S.C. Sec. 623(a)(1). We hold that under both plans, retirement-eligible employees are treated less favorably than their younger counterparts with respect to their ability to receive severance pay. Because retirement eligibility under the Westinghouse plans is inseparably linked with age, the discriminatory treatment is based on age. Therefore, both the 1979 and 1982 plans violate the ADEA. 2
We must also address Westinghouse's claim that its severance pay plans are exempt from ADEA coverage under Sec. 4(f)(2), 29 U.S.C. Sec. 623(f)(2). Because those plans are not part of an integrated employee benefit scheme that satisfies Sec. 4(f)(2) and do not involve age-related cost factors, we reject Westinghouse's Sec. 4(f)(2) defense.
Finally, we must decide whether the district court erred in concluding that Westinghouse willfully violated the ADEA. We will remand to the district court to reevaluate willfulness because: (1) some of the factors relied upon by the district court do not support its finding of willfulness, and (2) the court did not consider separately the 1979 plans and the 1982 plans when making its determination on willfulness.
In November, 1982, Charles Slackway, age 62, a former employee at Westinghouse's Lester, Pennsylvania facility, filed a charge of age discrimination with the EEOC. Slackway claimed that unlike younger employees, he was denied severance pay when he was laid off. See J.App. at 1952. In June, 1983, the EEOC issued a letter of violation to Westinghouse, concluding that Westinghouse discriminated against Slackway (and others named and/or yet to be named) in violation of 29 U.S.C. Sec. 623(a)(1). The letter stated that the Commission, in accordance with its statutory mandate, 3 sought voluntary compliance with the ADEA through informal methods of conciliation. J.App. at 1971. 4
Evidently, efforts at conciliation proved fruitless and the EEOC filed its original complaint on November 10, 1983, pursuant to 29 U.S.C. Sec. 626(b). The EEOC alleged that Westinghouse willfully engaged in unlawful employment practices at its Lester, Pennsylvania facility, in violation of 29 U.S.C. Sec. 623(a)(1), by failing to provide Layoff and Income Benefits (LIB) to employees age sixty or older who were terminated or laid off and were eligible for, and/or had received, early retirement benefits under Westinghouse's pension plan. The complaint identified thirty-five aggrieved employees and included all others similarly situated. J.App. at 15.
EEOC filed its first amended complaint on August 23, 1984, expanding the action to include Westinghouse's Concordville, Pennsylvania facility. That complaint identified 126 aggrieved employees, included others yet to be named, and contained allegations of additional unlawful employment practices: (1) denying LIB to employees laid off prior to July, 1982 who were eligible for any type of retirement benefit; (2) giving employees who were laid-off after July, 1982, the option of selecting either LIB or retirement, but not both; (3) forcing laid-off employees to retire prior to age seventy because LIB was not available; (4) denying early retirement to laid-off employees who chose LIB; (5) denying recall work to employees who were laid off and forced to retire; and (6) giving lower retirement benefits to laid-off employees who were not eligible for retirement because of their age at the time of the layoff, but who later became qualified for retirement benefits.
In October, 1984, the EEOC filed a second amended complaint, expanding its prior claims by alleging that Westinghouse engaged in those unlawful employment practices in all of its facilities nationwide. The employment practices were alleged to have begun at least as early as 1980, and to have continued through the time of filing of each of the complaints. The EEOC also filed a new collateral complaint containing the same nationwide allegations. The district court ordered that the cases be consolidated and tried jointly.
Following trial, the district court issued its opinion, 5 in which it held: (1) that Westinghouse's 1979 employee pension, and severance pay plans, which denied severance pay to employees who take retirement, discriminated based on age, in violation of 29 U.S.C. Sec. 623(a)(1); (2) that Westinghouse's 1982 employee pension and severance pay plans, which provide laid-off employees with an option between severance pay and pension benefits, discriminate based on age in violation of 29 U.S.C. Sec. 623(a)(1); and (3) that Westinghouse willfully violated the ADEA. 6
With respect to both plans, the district court found that because receipt of severance pay is conditioned on non-retirement status, laid-off workers are treated differently on the basis of age. The court stated that "[a]ge and retirement are, in fact, so closely linked that a criterion based on one is a criterion based on the other." 632 F.Supp. at 367. In evaluating Westinghouse's plans, the district court did not consider separately the 1979 and 1982 plans. However, the court found that the option provided by the 1982 plans does not give employees a practical choice, because selection of LIB instead of retirement requires forfeiture of insurance and medical benefits. Therefore, the court concluded, for all practical purposes there is no difference between the 1982 plans and the 1979 plans. In any event, the court held that providing an option does not cure the violation because older employees still cannot receive both pension and severance pay. The option is merely a "sham to prolong the litigation of this issue." Id. at 366 n. 12.
The district court also rejected Westinghouse's assertion that its programs have a legitimate, non-discriminatory purpose. Westinghouse's justification was a purported corporate policy against double-dipping; that is, it would not provide more than one type of benefit to a laid-off employee in order to insure that all laid-off employees received some type of post-employment benefit. The court termed this argument inconsistent, noting that under the various severance pay plans, some employees can receive more than one type of post-employment benefit. For example, a laid-off employee age fifty-nine with more than ten, but less than thirty years of service, can receive LIB until age sixty, at which point he can take early retirement. See 1979 LIB plan at 4; 1982 ES & P plan at 7 (J.App. at 1806, 1817). Furthermore, the court held, the unstated premise of the no double-dipping rationale--that severance pay and pension benefits are fungible--is incorrect. Severance pay is a...
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