EEOC v. Great Atlantic and Pacific Tea Co.

• Decision Date: 28 June 1985
• Docket Number: No. C 77-586.,C 77-586.
• Citation: 618 F. Supp. 115
• Parties: EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff, v. The GREAT ATLANTIC AND PACIFIC TEA COMPANY, Defendant.
• Court: U.S. District Court — Northern District of Ohio

618 F. Supp. 115

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff, v. The GREAT ATLANTIC AND PACIFIC TEA COMPANY, Defendant.

No. C 77-586.

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

June 28, 1985.

Elliott V. Porter, E.E.O.C., Cleveland, Ohio, for plaintiff.

Robert Hartland, Reed, Smith, Shaw & McClay, Pittsburgh, Pa., Thomas W. Palmer, Marshall & Melhorn, Toledo, Ohio, for defendant.

OPINION AND ORDER

DON J. YOUNG, Senior District Judge.

This action arises out of the closing of five warehouse operations of defendant, the Great Atlantic and Pacific Tea Company "A & P". Under the terms of collective bargaining agreements with the unions representing the employees at these warehouses, some, but not all, of the employees received severance pay upon termination of the operations. Plaintiff, the Equal Employment Opportunities Commission "EEOC", claims that the 89 employees who did not receive severance pay were discriminated against because of their age, in violation of the provisions of the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. § 621 et seq. "ADEA". This Court has jurisdiction pursuant to Section 7(b) of the ADEA, 29 U.S.C. § 626(b) and Section 17 of the Fair Labor Standards Act of 1938, as amended FLSA, 29 U.S.C. § 201 et seq.

Attempts to resolve the matter by conciliation were unsuccessful, and this action was commenced. The parties filed cross-motions for summary judgment. These motions were overruled because there were disputes of fact involved.

Thereafter, the matter came on for trial to the Court, sitting without a jury. It was submitted upon the testimony at the trial, and elaborate stipulations of facts, and was argued by briefs. Each party filed a brief, a reply brief, and a supplemental brief. This Opinion will serve as the Court's findings of fact and conclusions of law. Fed.R. Civ.P. 52(a).¹

Prior to reaching the merits of the cause sub judice, the Court first must address the defendant's contention that some of the claims asserted by plaintiff EEOC are time-barred. Normally, an action for unpaid wages or compensation brought pursuant to the ADEA is subject to a two year statute of limitations. If a "willful" violation of the statute is proven, however, the limitations period is expanded to three years. See § 6 of the Portal to Portal Pay Act of 1947, 29 U.S.C. § 255(a) (incorporated into the ADEA by 7(e), 29 U.S.C. § 626(e)).

Defendant A & P first contends that, in the event a violation of the ADEA is found, there is no proof of defendant's intent to violate the statute or that a violation was "willful." It asserts, therefore, that this action is subject to the two year statute of limitations and that any claims arising out of the May 24, 1975 closings of the Buffalo and Syracuse warehouses, which occurred more than two years prior to the November 7, 1977 filing of this suit, are time-barred. Plaintiff EEOC, on the other hand, maintains that the three year limitations period applies, asserting that the defendant A & P willfully violated the ADEA when it denied severance pay to employees over the age of 55.

Divergent views have emerged as courts have wrestled with the appropriate definition of "willful" under the ADEA or the FLSA.² In one line of cases, courts have subscribed to the view that, for statute of limitations purposes, a violation is willful if the "employer knew or suspected that his actions might violate the ADEA or stated more simply ... did the employer know the ADEA was in the picture?" Coleman v. Jiffy June Farms, Inc., 458 F.2d 1139, 1142 (5th Cir.1971), cert. denied, 409 U.S. 948, 93 S.Ct. 292, 34 L.Ed.2d 219 (1972); accord Usery v. Godwin Hardware, Inc., 426 F.Supp. 1243, 1267 (W.D. Mich.1976) (violation willful where knowing, as opposed to negligent or accidental, and "committed with at least a general awareness that the requirements of the law were in the picture"). See also E.E.O.C. v. Central Kansas Medical Center, 705 F.2d 1270, 1274 (10th Cir.1983) (willful violation where "employer was or should have been cognizant of an appreciable possibility that the employees involved were covered by the statutory provisions"); Laffey v. Northwest Airlines, Inc., 567 F.2d 429, 472 (D.C.Cir.1976), cert. denied, 434 U.S. 1086, 98 S.Ct. 1281, 55 L.Ed.2d 792 (1978).

Other courts have adopted a narrower approach, requiring that to be "willful," a violation must be "deliberate, voluntary, and intentional." Marshall v. J.C. Penney Co., 464 F.Supp. 1166, 1194 (N.D.Ohio 1979).³ As explained by one court, this standard distinguishes willful violations from those that merely are accidental and "is used to characterize conduct marked by careless disregard whether or not one has the right so to act." Boll v. Federal Reserve Bank of St. Louis, 365 F.Supp. 637, 648-49 (E.D.Mo.1973), aff'd, 497 F.2d 335 (1974).

Even if this Court applies the more stringent view of willfulness, there is ample evidence, as detailed below in this Opinion, to support a finding that the defendant's denial of severance pay to its employees age 55 and over was "deliberate, voluntary, and intentional." Marshall, 464 F.Supp. at 1194. At best, the defendant negotiated this plan in "careless disregard whether or not it had the right so to act." Boll, 365 F.Supp. at 649. The three year statute of limitations applies to this action and all claims asserted, therefore, are timely filed.

The statutory predicate for this suit was enacted in order "to promote the employment of older workers based on their ability rather than age; to prohibit arbitrary age discrimination in employment; and to help employees and workers find ways of meeting problems arising from the impact of age on employment." 29 U.S.C. § 621(a). To this end, Section 4(a)(1) of the ADEA provides, in pertinent part, that:

It shall be unlawful for an employer ... to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's age.

29 U.S.C. § 623(a)(1). See Trans World Airlines, Inc. v. Thurston, ___ U.S. ___, 105 S.Ct. 613, 621, 83 L.Ed.2d 523 (1985); Lorillard v. Pons, 434 U.S. 575, 577, 98 S.Ct. 866, 868, 55 L.Ed.2d 40 (1978) (ADEA "broadly prohibits arbitrary discrimination in the workplace based on age"). This protection extends to individuals who are between forty and seventy years of age. 29 U.S.C. § 631(a) (as amended, 1978).

To prevail on a claim under the ADEA, the plaintiff must first establish a prima facie case of age discrimination either by the use of the criteria set forth in McDonnell-Douglas v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973) in the context of a Title VII discrimination case or by the use of statistical information or direct or circumstantial evidence. Grubb v. W.A. Foote Memorial Hosp., 741 F.2d 1486, 1498 (6th Cir.1984); Blackwell v. Sun Elec. Corp., 696 F.2d 1176, 1180 (6th Cir.1983). The Sixth Circuit Court of Appeals has made it clear, however, that it eschews rigid application of the Title VII guidelines in an age discrimination suit and employs instead a flexible case-by-case approach to the establishment of a prima facie case under the ADEA. West v. Fred Wright Constr. Co., 756 F.2d 31, 33 (6th Cir.1985); Grubb, 741 F.2d at 1497; Blackwell at 1180. If a prima facie case is established, the burden then shifts to the defendant to articulate a legitimate, nondiscriminatory reason for his decision. Texas Dept. of Community Affairs v. Burdine, 450 U.S. 248, 253, 101 S.Ct. 1089, 1093, 67 L.Ed.2d 207 (1981); Blackwell, 696 F.2d at 1179. The ultimate burden of persuasion, however, remains at all times with the plaintiff. Burdine, 450 U.S. at 256, 101 S.Ct. at 1095; Blackwell, 696 F.2d at 1180.

Notwithstanding the questions of proof, the ultimate issue under the ADEA is whether age was a determining factor in an employment decision. Blackwell, 696 F.2d at 1180-81; Ackerman v. Diamond Shamrock, 670 F.2d 66, 70 (6th Cir.1982); Laugesen v. Anaconda, 510 F.2d 307, 317 (6th Cir.1975). Stated differently, the plaintiff is "entitled to recover if one such factor was his age and if in fact it made a difference...." Laugesen, 510 F.2d at 317.

Not every employment decision that impacts adversely on older employees is a violation of the ADEA, however. See Mastie v. Great Lakes Steel Corp., 424 F.Supp. 1299, 1307 (E.D.Mich.1976) ("not every personnel decision by an employer which results in differential treatment of individuals in the protected class is a violation of the ADEA"). Recognizing this fact, the statute provides several defenses which may be available to employers to make permissible actions which otherwise would be prohibited. Pertinent to this cause is Section 4(f)(1) which permits differentiation in treatment when it is based on "reasonable factors other than age," 29 U.S.C. § 623(f)(1), and Section 4(f)(2) which provides that it shall not be unlawful for an employer "to observe the terms of a 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...." 29 U.S.C. § 623(f)(2).

The questions presented in this cause are narrow. Plaintiff EEOC contends essentially that the defendant A & P's plan, whereby severance pay was denied to those employees eligible for early retirement, discriminates on the basis of age. The defendant, on the other hand, argues first that the plaintiff has not met its burden of showing that the severance pay plan made a distinction "because of age." It further contends that, even if such a distinction were made, it was permissible under either of the above-mentioned statutory defenses.

Although the basic evidentiary facts are relatively simple, and not particularly in conflict, the factual conclusions to be drawn from them are not at all simple, and are very much disputed. Part of this complexity is due to the fact that the defendant's pension plan is involved in the...