Hogan v. Metromail
| Decision Date | 09 August 2000 |
| Docket Number | No. 99 CIV. 11204 VM.,99 CIV. 11204 VM. |
| Citation | 107 F.Supp.2d 459 |
| Parties | John HOGAN and Stewart Rosen, Plaintiffs, v. METROMAIL, Experian Marketing Solutions, and Metromail Corp. Special Service Plan, Defendants |
| Court | U.S. District Court — Southern District of New York |
Janice Goodman, Goodman & Zuchlewski, L.L.P., New York, NY, for plaintiffs.
Andrew T. Hahn, Winston & Strawn, Lawrence R. Sandak, Sonnenschein Nath & Rosenthal, New York, NY, for defendants.
DECISION AND ORDER
Plaintiffs John Hogan and Stuart Rosen ("Hogan and Rosen") bring this action under the Age Discrimination in Employment Act of 1967 ("ADEA"), 29 U.S.C. § 621; the New York Executive Law §§ 290 et seq. ("State HRL"); the New York City Administrative Code §§ 8-107(1)(a) and (c), and 8-107(17) ("City HRL"); and § 502(a) of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1132(a). Defendants Metromail, Experian Marketing Solutions, and Metromail Corporation Special Severance Plan ("the Plan") (collectively "Metromail") have moved under Fed.R.Civ.P. 12(b)(6) to dismiss the complaint for failure to state a claim on which relief can be granted. Hogan and Rosen, invoking the ADEA and State and City HRL, allege that Metromail engaged in age-based discrimination against them and later in retaliation for their filing of age-discrimination claims. Additionally, Hogan and Rosen allege that Metromail, in violation of ERISA, denied them severance benefits under the Plan.
For the reasons stated below, Metromail's motion to dismiss is granted with regard to the ERISA claim, as well as the ADEA and HRL age-discrimination claims of disparate impact, disparate treatment, constructive discharge and retaliation based on denial of severance pay. Hogan and Rosen are granted leave to replead the ERISA claim, the constructive discharge claim, the retaliation claim based on denial of severance pay and the disparate impact and treatment claims that relate to Metromail's employment actions during 1998-1999. The Court finds the alleged 1997 demotions are time-barred. Metromail's motion to dismiss is denied insofar as it relates to the ADEA and HRL retaliation claims alleging improper denial of ancillary benefits.
Plaintiffs John Hogan and Stuart Rosen, 66 and 64 years old respectively at the time this action commenced, worked for defendant Metromail for almost 30 years. Within three years of their employment by Metromail as salesmen, each was promoted to Regional Director. Compl. ¶¶ 15-16. As Regional Directors, they received commissions on sales and renewals of sales on existing accounts in assigned, exclusive territories. Rosen also supervised other sales people and received overrides, which are commissions based on sales by subordinates. Id. ¶ 18.
In January 1997, Metromail adopted a benefits plan ("the Plan"), which provided severance benefits to employees under certain conditions, including "the termination of an Employee's employment with the employer within two years following a Change in Control (i) by the Employer other than for Cause ... or (ii) by the Employee for Good Reason." Compl. ¶¶ 31, 35-36; Sandak Aff., Ex. D at 5-6. "Good reason" specifically included the "reduction by the employer in the employee's salary or a change in the employee's duties or responsibilities in the nature of a demotion." Id. Under the Plan, responsibility for discretionary decisions regarding Plan benefits eligibility was assigned to the Human Resources Committee of Metromail's Board of Directors ("the Board").
In October 1997, Metromail demoted all Sales and Regional Directors, including Hogan and Rosen, to "salespersons," eliminating their eligibility for both staff supervision and corresponding overrides. Id. ¶ 19(a). In October 1998, defendant Experian, which had acquired Metromail in March 1998, established a uniform base salary and commission rate for all employees regardless of seniority or experience. Id. ¶ 19(d). Experian eliminated commissions on sales renewals and declared open all salespersons' previously exclusive territories, including those of Hogan and Rosen. Id. ¶ 19(b) and (c). Hogan and Rosen allege that as a result, senior salespeople, who over prior years had built up reputations and customers in certain geographic areas, faced the prospect of losing customers to competing employees, especially more junior ones. Id. In 1999, Experian established an incentive program that awarded bonuses to salespersons who exceeded the individual quotas established for them by management. Id. ¶ 18(e). Higher quotas were set for the longer-term salespeople, including Hogan and Rosen, who nonetheless thereafter earned the same base salaries and commissions as more junior sales workers. Id. As a result of these changes, Hogan's income was reduced by approximately 33% and Rosen's by 39%, over their earnings from prior years. Id. ¶¶ 22-23.
Following Experian's adoption of the 1998 compensation system, Hogan and Rosen submitted claims for severance payments under the Plan, asserting that they were entitled to such benefits by virtue of the change in control from Metromail to Experian and the ensuing reduction of their salaries, duties and responsibilities. The Plan denied the requests. Id. ¶¶ 37-40. Although it is not set forth in their complaint, Hogan and Rosen argue, in papers submitted in opposition to Metromail's motion to dismiss, that the severance pay rejection was communicated through letters sent on Experian letterhead, bearing the signatures of Experian officials, and copied to the Board.
In December 1998, Hogan and Rosen retained counsel to raise charges of age discrimination, which were filed with the United States Equal Employment Opportunity Commission ("EEOC") in March 1999. Id. ¶¶ 11, 27. The Plan administrators, in August 1999, denied Hogan and Rosen's appeal of the severance benefits denial. Id. ¶ 13. Hogan and Rosen claim this denial of severance was made in retaliation for their asserting discrimination claims. Id. ¶ 28. They also allege retaliation in Metromail's denial of ancillary employment benefits such as invitations to national sales functions. Id. ¶ 29. In August 1999, plaintiffs received "Right to Sue" letters from the EEOC.
Hogan asserts in the factual background paragraphs of the complaint that he was constructively discharged on August 31, 1999. Id. ¶ 6. As this allegedly occurred after the EEOC proceeding, it was not included in the EEOC charges. While the allegation is mentioned as a factual matter, the complaint does not set forth constructive discharge as a separate cause of action for relief.
A 12(b)(6) motion hinges on a claim's "legal sufficiency." Goldman v. Belden, 754 F.2d 1059, 1067 (2d Cir.1985). For purposes of the motion, plaintiff's factual allegations are deemed true and all reasonable inferences are drawn in plaintiffs' favor. See Gant v. Wallingford Bd. of Educ., 69 F.3d 669, 673 (2d Cir.1995); Grandon v. Merrill Lynch & Co., 147 F.3d 184, 188 (2d Cir.1998). Dismissal is warranted only if it appears beyond doubt that no set of facts offered by plaintiffs could entitle them to relief. See Conley v. Gibson, 355 U.S. 41, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). Given insufficient pleadings, full dismissal can be precluded by granting leave to replead. See Stern v. General Elec. Co., 924 F.2d 472, 477 (2d Cir.1991).
The ADEA protects employees over forty against age-based discrimination relating to "compensation, terms, conditions, or privileges of employment." 29 U.S.C. § 623(a)(1). The ADEA is derived from Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e et seq. To establish discrimination under either Title VII or the ADEA, plaintiffs must show that defendants' policies or practices caused "disparate impact" or "disparate treatment" affecting conditions of plaintiffs' employment based on their membership in the protected class. See Criley v. Delta Air Lines, Inc., 119 F.3d 102 (2d Cir.1997); District Council 37 v. New York City Dept. of Parks & Rec., 113 F.3d 347 (2d Cir.1997); Lowe v. Commack Union Free Sch. Dist., 886 F.2d 1364 (2d Cir.1989); Abdu-Brisson v. Delta Air Lines, No. 94 Civ. 8494, 1999 WL 944505 (S.D.N.Y. Oct.19, 1999). Disparate impact involves a facially-neutral employment practice that has an adverse effect of "fall[ing] more harshly" on a protected class than on one unprotected, while disparate treatment is purposeful, and requires an age-based discriminatory motive. Hazen Paper Co. v. Biggins, 507 U.S. 604, 609, 113 S.Ct. 1701, 123 L.Ed.2d 338 (1993). ADEA recovery for constructive discharge is also allowed if an employer created "conditions so intolerable as to force involuntary resignation." Kirsch v. Fleet St., 148 F.3d 149, 161-162 (2d Cir.1998).
Defendants move for dismissal of claims based on the 1997 demotions on the grounds that those actions are time barred. The ADEA has a 300 day statute of limitations. 29 U.S.C. § 626(d) and 633(b); see also Oscar Mayer & Co. v. Evans, 441 U.S. 750, 762-63, 99 S.Ct. 2066, 60 L.Ed.2d 609 (1979). Hogan and Rosen concede that the alleged demotion they claim occurred in 1997 is barred by the 300-day limitation. While events occurring prior to the 300-day limitation period thus may not be considered as the basis for Hogan and Rosen's claims, the Court may, consistent with Blesedell v. Mobil Oil Co., 708 F.Supp. 1408 (S.D.N.Y.1989), consider them as background material relating to the 1998-1999 claims.
Hogan and Rosen allege that Metromail maintained a pattern and practice of discriminating "against older long-term employees." Compl. ¶ 14. This policy is allegedly evidenced by Metromail's restructuring of its sales force and salary and commission structure. Under these alterations all sales and regional directors "who were the longer-term employees" were demoted, denied commissions...
To continue reading
Request your trial
-
Mahler v. Judicial Council of Cal.
...and Eighth Circuits remain of the view that a disparate impact claim cannot accommodate a subgroup analysis (e.g., Hogan v. Metromail (S.D.N.Y. 2000) 107 F.Supp.2d 459 ), the Third and Seventh Circuits have concluded otherwise ( O'Brien v. Caterpillar Inc. (7th Cir. 2018) 900 F.3d 923 ( O'B......
-
Meacham v. Knolls Atomic Power Laboratory
...definitions of the protected classes under the ADEA and the HRL. See, e.g., Gonzalez, 135 F.Supp.2d at 400 n. 11; Hogan v. Metromail, 107 F.Supp.2d 459, 470-71 (S.D.N.Y.2000); Abdu-Brisson v. Delta Air Lines, Inc., No. 94 Civ. 8494(HB), 1999 WL 944505, at *4 n. 4 (S.D.N.Y. Oct. 19, 1999), a......
-
In re Bear Stearns Companies Inc. Sec.
...holding that a company is not rendered liable as an ERISA fiduciary for the duties held by its employees. 30. In Hogan v. Metromail, 107 F.Supp.2d 459, 475 (S.D.N.Y.2000), the Court found that the company did not relinquish control of the plan and may have maintained discretion rendering it......
-
Nelson v. Nielsen Media Research, Inc.
...is "without reason, unsupported by substantial evidence or erroneous as a matter of law." Id. at 442; see also Hogan v. Metromail, 107 F.Supp.2d 459, 474 (S.D.N.Y.2000). The evidence necessary to satisfy the standard does not require a preponderance but only so much proof as a reasonable de......
-
Jennifer Liotta, Erisa Fiduciaries in Bankruptcy: Preserving Individual Liability for Defalcation and Fraud Debts Under 11 U.s.c. Sec. 523(a)(4)
...Inc, 119 F.3d 888, 892 n.2 (11th Cir. 1997); Brock v. Hendershott, 840 F.2d 339, 341-42 (6th Cir. 1988). 85 See Hogan v. Metromail, 107 F. Supp. 2d 459, 474-75 (S.D.N.Y. 2000) (finding corporation was sufficiently alleged to be a fiduciary notwithstanding delegation of plan administration d......