EEOC v. Chrysler Corp., 89 Civ. 1347 (RPP).

• Decision Date: 31 January 1990
• Docket Number: No. 89 Civ. 1347 (RPP).,89 Civ. 1347 (RPP).
• Parties: EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff, v. CHRYSLER CORPORATION, Defendant.
• Court: U.S. District Court — Southern District of New York

729 F. Supp. 1002

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff, v. CHRYSLER CORPORATION, Defendant.

No. 89 Civ. 1347 (RPP).

United States District Court, S.D. New York.

January 31, 1990.

E.E.O.C., Christopher P. Lee, New York City, for plaintiff.

Kelly Drye & Warren, Isreal E. Kornstein, New York City, for defendant.

OPINION AND ORDER

ROBERT P. PATTERSON, Jr., District Judge.

The Equal Employment Opportunity Commission (EEOC) seeks liquidated damages and equitable relief from defendant Chrysler Corporation (Chrysler) in this action arising out of an alleged violation of the Age Discrimination in Employment Act (ADEA), 29 U.S.C. § 621 et seq. due to denial of severance pay. This is a motion to dismiss, pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), and for summary judgment for defendant, pursuant to Federal Rule of Civil Procedure 56.

BACKGROUND

On September 6, 1985, Chrysler sold its Manhattan Sales and Service Operations Facility to Potamkin Chrysler Plymouth Dodge Inc. (Potamkin), effective October 6, 1985.

On September 12, 1985, Irving A. Zinn (Zinn), aged 57, and Jack Gioglio a/k/a Hunter (Gioglio), aged 59, each signed a "Retirement Election Form." Def. Ex. B. The forms provided that Zinn and Gioglio elected to be considered for the Special Early Retirement Plan when the Chrysler Manhattan Sales and Service Operations Facility closed. Only employees "who are age 55 and over with 10 or more years of credited service" were eligible for early retirement. Id. Zinn and Gioglio each had 22 years of credited service. The early retirements of Zinn and Gioglio became effective on September 30, 1985.

An Agreement "made and entered" October 3, 1985, between Teamsters Local 868 and Chrysler addressed the "impact of the sale to Potomac upon the employees." Def. Ex. A. Under the Agreement, employees who had one or more years of continuous service and who were not offered a position with Potamkin were to receive severance payments. The severance payment plan specifically excluded Zinn and Gioglio because they had "elected to file for special early retirement from the Company and receive special early benefits thereunder." Id.

On May 16, 1986, and December 19, 1986, Zinn and Gioglio respectively filed charges with the EEOC "alleging Chrysler had failed to provide severance pay to older terminated employees while providing severance and pension benefits to substantially younger co-workers." Pl. 3(g) Statement at 11, ¶¶ 26-27. On January 10, 1988, the New York District Office of the EEOC issued a "DETERMINATION" that the Office's "investigation does not establish a violation of the statute." Def. Ex. G. The Washington D.C. EEOC Office then issued a "DETERMINATION ON REVIEW OF ADEA CHARGE" on August 5, 1988. Def. Ex. H. That latter determination stated that defendant's severance pay plan constituted a violation of the ADEA and that the EEOC would begin conciliation, in accordance with Section 7(b) of the ADEA, before commencing a legal action.

By letter dated August 19, 1988, Chrysler's attorney informed the EEOC that its "conclusion of an ADEA violation has no legal support and, accordingly, conciliation efforts would not be called for." Def. Ex. I. On February 27, 1989, the EEOC filed this action, alleging that Chrysler violated the ADEA by "failing to provide severance benefits to terminated employees age 55 or older who were eligible for and received early retirement benefits." Comp. at 3, ¶ 3. Thus, the claim herein relates to defendant's failure to provide severance benefits and does not directly relate to the early retirement benefit plan.

DISCUSSION

A. Statute of Limitations

Defendant argues that the complaint should be dismissed as time barred under the statute of limitations. Plaintiff does not contend that the action is timely under ADEA's statute of limitations provision, Section 7(e) of ADEA, 29 U.S.C. § 626(e). Plaintiff's response rests upon the Age Discrimination Claims Assistance Act (ADCAA), 29 U.S.C. § 626 note. That amendment to the ADEA permits actions to be brought "during the 540 day period beginning on the date of ADCAA's enactment," notwithstanding Section 7(e). The date of the enactment was April 7, 1988. Both parties agree that plaintiff filed this action within 540 days of April 7, 1988.

The parties disagree, however, over whether this action satisfies one of the conditions precedent to invoking ADCAA's 540 day grace period. Section 3(3) of ADCAA sets forth the following condition precedent: "the statute of limitations applicable under such section 7(e) to such claim ran before the date of enactment April 7, 1988 of this Act." The statute of limitations applicable under Section 7(e) is that of the Portal to Portal Pay Act:

if the cause of action accrues on or after May 14, 1947 — may be commenced within two years after the cause of action accrued, and every such action shall be forever barred unless commenced within two years after the cause of action accrued, except that a cause of action arising out of a willful violation may be commenced within three years after the cause of action accrued.

29 U.S.C. § 255(a).

Although the parties disagree over the exact month when this cause of action accrued, both parties agree that on April 7, 1988 more than two years and less than three years had passed since the accrual of this cause of action. Thus, on April 7, 1988, the Section 7(e) statute of limitations for a willful violation had not yet run, while the Section 7(e) statute of limitations for an ordinary violation had run.

The complaint alleges a willful violation, Comp. at 3, ¶ 9, and seeks liquidated damages, Comp. at 4, ¶ C, which are only available for a willful violation. 29 U.S.C. 626(b). Defendant characterizes the action as one for a willful violation which was still viable on April 7, 1988, under the three year statute of limitations. According to defendant, plaintiff is not entitled to file this action during the 540 day ADCAA period because plaintiff could still have timely filed this action for a willful violation on the date of ADCAA's enactment. Defendant attempts to support its position by citing Senator Melcher's remark that ADCAA is intended only to "restore ... legal rights.... no more and no less." 134 Cong.Rec. S1747 (March 2, 1988).

Plaintiff responds that Congress intended ADCAA to rejuvenate claims time barred by the two year statute of limitations and did not address those claims time barred by the three year statute of limitations. Under plaintiff's interpretation, Section 3(3)'s condition is satisfied as long as the two year statute of limitations has run. Plaintiff relies on the discussions of ADCAA on the floors of both houses of Congress which refer only to rejuvenating those claims on which "the EEOC failed to take action before the expiration of the 2-year statute of limitations." 134 Cong. Rec. H1253 (March 29, 1988) (remarks of Rep. Jeffords); see also 134 Cong.Rec. S1747 (March 2, 1988) (remarks of Sen. Melcher); 139 Cong.Rec. H1252-54 (March 29, 1988) (remarks of Rep. Martinez, Rep. Roybal, Rep. Clay, Rep. Lantos, Rep. Biaggi, Rep. Hawkins, Rep. Bonker). One court has interpreted this legislative history to support the proposition "that all actions, where section 3(3) of the Claims Act ADCAA applies, will be considered as having a two year statute of limitations whether willful or not." EEOC v. Holiday Inn of Oil City, 49 FEP 95, 1989 WL 44639 (W.D.Pa.1989).

This Court is not persuaded to go as far as the district court in Holiday Inn of Oil City. The primary reason is the plain language of ADCAA. See Public Employees Retirement System of Ohio v. Betts, ___ U.S. ___, 109 S.Ct. 2854, 2863, 106 L.Ed.2d 134 (1989) (plain language of ADEA has more authority than either caselaw, legislative history or the EEOC's interpretation). Section 3(3) describes the condition precedent: "the statute of limitations applicable under such section 7(e) to such claim ran before the date of enactment of this Act." Under the terms of Section 7(e), both a two and a three year statute of limitations can be applicable. See supra. The plain language of Section 3(3) and Section 7(e) contradicts Holiday Inn of Oil City.

Furthermore, a review of the congressional debates reveals that the plethora of references to the two year statute of limitations was not for the purpose of negating the applicability of the three year statute of limitations. Circulating through Congress at that time was a report that 900 potential ADEA cases had been extinguished recently by the two year statute of limitations. The expressions of outrage over this statistic do not imply that Congress only intended to address in ADCAA those claims extinguished by the two year statute of limitations.

The Court's decision not to follow Holiday Inn of Oil City does not necessarily require dismissal of the action. Subsumed within the complaint is a cause of action arising out of an ordinary or nonwillful violation. The complaint seeks equitable relief, Comp. at 4, ¶¶ B and C, for which a showing of willfulness is not necessary. Moreover, plaintiff informs the Court that even if it could not allege willfulness, the EEOC wishes to proceed to obtain the equitable relief to which it would be entitled under ADEA for an ordinary violation. Pl. Br. at 22 (Aug. 9, 1989); see also Oral Arg. Tr. at 34 (plaintiff agrees that an in limine decision to exclude evidence of willfulness would resolve statute of limitations issue).

This subsumed ordinary violation was time barred under the two year statute of limitations on April 7, 1988 and therefore would be eligible for the 540 day ADCAA extension of the statute of limitations. Accordingly, the Court declines to dismiss the case on this ground. The interests of justice require this ruling because Congress passed the ADCAA so that those ordinary claims time barred on April 7, 1988, such as that subsumed in the current complaint, could be...