EEOC v. Westinghouse Elec. Corp.

• Decision Date: 26 March 1986
• Docket Number: 84-4799.,Civ. A. No. 83-5457
• Citation: 632 F. Supp. 343
• Parties: EQUAL EMPLOYMENT OPPORTUNITY COMMISSION v. WESTINGHOUSE ELECTRIC CORPORATION.
• Court: U.S. District Court — Eastern District of Pennsylvania

632 F. Supp. 343

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION v. WESTINGHOUSE ELECTRIC CORPORATION.

Civ. A. Nos. 83-5457, 84-4799.

United States District Court, E.D. Pennsylvania.

March 26, 1986.

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Spencer H. Lewis, Jr., Issie L. Jenkins, Lanier Williams, James Garrett, Ida Chen, Philadelphia Dist. Office of EEOC, Philadelphia, Pa., for plaintiff EEOC.

Thomas L. Morrissey, Rosemary Alito, Kevin P. Duffy, Silvio J. DeCarli, Carpenter, Bennett & Morrissey, Newark, N.J., Dona S. Kahn, Harris & Kahn, Philadelphia, Pa., for defendant Westinghouse.

MEMORANDUM

KATZ, District Judge.

In the trial of this case, I saw the human wreckage of older Westinghouse employees, let go after years of service to the Company. Because these employees were eligible for their retirement benefits, they were denied the severance pay to which younger workers were entitled. Those persons eligible for early retirement were also denied severance pay, and had to draw down their reduced pension benefits to survive.

This heartless corporate policy was justified by a variety of litigation ploys. These ranged from a belatedly invented corporate "policy" of providing a single income stream to laid off employees, to a claim that the EEOC provided insufficient conciliation efforts, to a farfetched estoppel defense that Westinghouse had relied on the flawed arguments of government lawyers in earlier litigation of this issue which it lost.

I find that Westinghouse's practice of denying severance pay to its older employees eligible for pensions is blatant, willful age discrimination.¹ I therefore enjoin the practice and award double damages to the injured employees.

I also reject the EEOC's shotgun approach of attacking a variety of other Westinghouse employment practices which are protected by law as bona fide pension and seniority arrangements. Therefore, I uphold the Westinghouse practices, other than denial of severance pay, at issue in this case.

This case began on November 10, 1982, with an administrative charge filed with the EEOC by Charles Slackway. See Plaintiff's Exhibit 1A. Processing of Slackway's charge culminated on June 7, 1983, with a letter of violation addressed to Westinghouse. See Plaintiff's Exhibit 4B. The EEOC tried to conciliate the matter. These efforts proved fruitless, and a complaint was filed in this court in November, 1983. The complaint alleged: "since before June 1, 1980, and continuously up until the present time, Defendant has willfully engaged in unlawful employment practices at its Lester, Pennsylvania facility...." The complaint targeted defendant's "failure to provide Layoff and Income Benefits" to thirty-five named individuals and "all other terminated or laid-off employees aged 60 and older who were eligible for early retirement benefits and/or received early retirement benefits."

Continued investigation of Slackway's case led to further charges against Westinghouse. Once again, conciliation was unsuccessfully attempted. In August, 1984, the Commission filed an amended complaint that expanded the case by including defendant's Concordville, Pennsylvania facility and increasing the number of plaintiffs to 117. It named the following ADEA violations:

1) denying layoff income benefits (LIB) to employees laid off prior to July, 1982, who were eligible for any type of retirement;

2) after July, 1982, giving laid off employees the option of selecting either LIB or retirement, but not both;

3) forcing laid off employees to retire prior to age 70 because LIB was not available;

4) denying early retirement to laid off employees who chose LIB;

5) denying recall to 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 age at the time of their layoff, but who later became qualified for retirement benefits.

Plaintiffs subsequently filed a second amended complaint in October, 1984. This complaint expanded the scope of the case to a nationwide complaint embracing all of defendant's employees aged 40 or older, at all of its facilities.²

The EEOC's charges implicate eight of defendant's employment plans and practices. The eight challenged practices are: (1) pre-July, 1982, arrangements for pensions and layoff income benefits, (2) post-July, 1982, arrangements for pensions and layoff income benefits, (3) arrangements for management employees, (4) Advanced Retirement Plan I, (5) Advanced Retirement Plan II, (6) an "impact number" process of awarding special benefits to certain employees laid off as a result of location shutdowns, product line relocations, or job movements, (7) limitation of retirement benefits to those actually eligible at time of layoff, and (8) limitation of death prior to retirement benefits to spouses of employees actually eligible for the benefits at the time of death. Before I examine the issues surrounding these plans and practices, it is necessary to set forth their pertinent terms.

The Pre-July, 1982, Arrangements For Pensions and Layoff Income Benefits

Prior to July, 1982, Westinghouse employees were covered by a 1979 pension plan for represented employees, and a 1979 pension plan for non-represented employees. The pertinent characteristics of the plans were identical.

1. The plans encompassed four retirement categories. Thus, employees could take a "normal," "deferred," "early," or "selected" retirement. See Joint Ex. 2 at 7, 47-50.

2. Employees were eligible for normal retirement at age 65. Normal retirees were entitled to a nonforfeitable pension if they were employed by Westinghouse on the day before their 65th birthdays and had begun this employment at some time preceding the first day of the month following their 60th birthdays. See Joint Ex. 2 at 47.

3. Employees could defer retirement. Retirements could not be deferred beyond the first day of the month following attainment of age 70. See Joint Ex. 2 at 47.

4. There were four early retirement possibilities. These were:

a. If an employee was age 60 or older and had 10 or more years of service, then he or she could take an early retirement. See Joint Ex. 2 at 47 b. If an employee was laid off at age 59, and had between 10 and 30 years of service, then the employee could retire after his or her 60th birthday, provided he or she had not been re-employed by Westinghouse. The employee was not eligible for early retirement benefits if he or she received a lump sum, related to length of service, because of the layoff or separation. In other words, the employee could not take LIB. See Joint Ex. 2 at 48.

c. If an employee was laid off before age 60, due to a location closedown, and was either age 55 with 10 or more years service, or age 50 with 25 or more years of service, then he or she could take an early retirement. The employee was not eligible for early retirement benefits if he or she received LIB. Employees with contractual rights at another Westinghouse location, and employees offered employment at another Westinghouse location, were not eligible for early retirement. See Joint Ex. 2 at 48.

d. If an employee between ages 50 and 60 with 25 or more years of service was laid off due to a job movement or product line relocation, then the employee could apply for early retirement. The employee was not eligible for early retirement if he or she received LIB. See Joint Ex. 2 at 48-49.

5. Selected retirement occurred in one of two situations. These were:

a. If an employee had 30 or more years of service then he or she could choose to retire after his or her 58th birthday. See Joint Ex. 2 at 49.

b. If an employee between ages 50 and 60 with 30 or more years of service was laid off due to a location closedown or a product line relocation, then he or she could take a selected retirement. The employee was not eligible for selected retirement if he or she received LIB. See Joint Ex. 2 at 49-50.

6. Layoff Income and Benefits ("LIB"), was provided to employees with at least two years of service who were laid off through no fault of their own. At minimum, these employees received LIB in an amount equal to four weeks' pay. Employees' Total Maximum Sums of LIB were equivalent to one week's pay for each full year of service. See Joint Ex. 13 at 2-3.

7. LIB was provided in several different forms.

a. When layoffs were projected to continue for more than six months, employees could elect to receive the total amount due in one lump sum. This election terminated the employee's relationship with the Company. Thus, the employee lost all recall rights and credits for years of service, other than any rights existing under the pension plan. See Joint Ex. 13 at 3.

b. If an employee wished to retain recall rights and service credits, he or she could elect LIB in the form of weekly payments. Under this arrangement, Westinghouse supplemented weekly federal and state unemployment benefits so that the combined benefits equalled 60% of the employee's weekly pay. Receipt of the weekly company contributions was contingent upon receipt of each week's federal and state unemployment benefits. See id. at 4. When federal and state benefits expired, weekly company benefits equal to 60% of the employee's weekly pay continued either until the total maximum sum had been paid out, or until twelve months had passed since the date of layoff. See id. at 4.

If an employee was 59 years old and had ten years of service at the time of layoff, the LIB payments ceased when the employee turned sixty and became eligible for early retirement. See id. at 4.

If an employee was laid off for a year and had not been offered reemployment with Westinghouse, then weekly payments ceased and the employee received the balance of the total maximum sum in a lump sum. If, however, the employee was laid off within one year of...