Lusardi v. Xerox Corp.

• Docket Number: Civ. A. No. 83-809
• Decision Date: 05 November 1987
• Parties: Lusardi v. Xerox Corp.
• Court: U.S. District Court — District of New Jersey

118 F.R.D. 351

Lusardi v. Xerox Corp.

Civ. A. No. 83-809

District Court, D. New Jersey

November 5, 1987

OPINION

LECHNER, District Judge.

CONTENTS

Page No.

I. Preliminary Statement 352

II. Procedural History 353

III. Facts 354

A. The Xerox Business History and Reductions in the Workforce 354

B. The Downsizing Process 356

C. Facts Concerning the Sample Group from the Conditional Class 357

IV. Discussion 358

A. ADEA Similarly Situated Requirement 358

B. Other Decisions Concerning the Similarly Situated Standard 359

C. The Instant Action 361

D. Defenses to ADEA Claims 363

1. For Good Cause 364

2. Bona Fide Occupational Qualification 365

3. Business Necessity 365

4. Bona Fide Employee Seniority System 367

5. Bona Fide Employee Benefit Plans 368

6. Waiver 369

E. Fairness and Procedural Considerations 370

F. ADEA Filing Requirements 376

V. Conclusion 379

I. PRELIMINARY STATEMENT

This case was brought against Xerox Corporation (“Xerox”) for alleged violations of the Age Discrimination in Employment Act (“ADEA”)¹ in connection with various work force reductions. Plaintiffs' previous request to proceed as a class was conditionally granted, pending notice to potential class members and discovery on the composition of the potential class. The discovery has been completed and, based upon the information obtained, Xerox has moved to decertify the conditional class. Plaintiffs have filed a cross-motion for summary judgment or, in the alternative, for a presumption of class-wide liability. Also before the court is plaintiffs’ motion to strike the Xerox expert report. Because it appears the members of the proposed class come from different departments, groups, organizations, suborganizations, units and local offices, as well as different subsidiaries of Xerox, performed different jobs at different geographic locations, were the subject of different job actions concerning reductions in the Xerox work force (including resignations, promotions, terminations for cause, etc.) which occurred at various times as a result of decisions by different supervisors made on a decentralized employee-by-employee basis, plaintiffs are not similarly situated. Accordingly, for the reasons set forth below, the Xerox motion to decertify is granted. Plaintiffs’ motions for summary judgment and concerning the Xerox expert report are moot.

II. PROCEDURAL HISTORY

A Class Action Complaint was filed against Xerox on March 8, 1983 by four former Xerox employees who had held positions with the Office Products Division of Xerox (“OPD”).² Plaintiffs alleged violations of the ADEA and individual common law causes of action. A First Amended Complaint was filed on March 24, 1983, wherein plaintiffs sought certification of all persons between the ages of forty and seventy

who since May 1, 1980 had applied for employment in a salaried position with any unit, division or American subsidiary of Xerox Corporation and were rejected for available openings or who were in a salaried position with any unit, division or American subsidiary of Xerox Corporation and were terminated and/or forced to accept early retirement instead of being promoted to or retained to fill available openings.

(First Amended Complaint, ¶ 13.)

On June 1, 1983, Xerox filed a motion to strike those allegations of the First Amended Complaint which (1) sought to utilize Rule 23, Fed.R.Civ.P., for certification of the proceeding as a class action; (2) alleged the named plaintiffs were appropriate representatives of applicants or of salaried employees outside the OPD; and (3) sought to assert pendent state law claims. Xerox also sought dismissal of the First Amended Complaint in its entirety on the ground plaintiffs had failed to exhaust administrative remedies. Plaintiffs concurrently moved for class certification of the ADEA claims under Rule 23, Fed.R.Civ.P., or alternatively under section 7(b) of the ADEA, 29 U.S.C. § 626(b) (1985).³

The Honorable Herbert J. Stern denied the Xerox motion to dismiss because he found the named plaintiffs had commenced state proceedings within the meaning of 29 U.S.C. § 633(b), and “[o]nce these state proceedings were terminated, plaintiffs were entitled to pursue their remedies in a federal forum.” Lusardi v. Xerox Corp., 99 F.R.D. 89, 91 (D.N.J.1983) (footnote omitted). Judge Stern held the class could not be certified pursuant to Rule 23, but could go forward as a class action under the authority of section 7(b) of the ADEA and section 16(b) of the Fair Labor Standards Act (“FLSA”). See 99 F.R.D. at 93. The court directed notice be sent to the so-called “similarly situated” class members, which was done in February, March and April, 1984, and set up a discovery period in order to determine the actual number of persons similarly situated to the named plaintiffs. See id. at 93, n. 8. The court deferred action on the pendent state law claims.⁴

On January 31, 1984, Judge Stern entered an Order conditionally certifying a class (the “Conditional Certification Order”) consisting of:

All salaried employees in the forty (40)— seventy (70) age group who in the period May 1, 1980 through March 31, 1983 have been terminated or required to retire from employment at an age less than seventy or have been denied equal employment opportunities for promotion at any unit, division or American subsidiary of Xerox Corporation and who contend that such termination, retirement or denial of promotion was caused by age discrimination policies or practices of Xerox Corporation.

(Conditional Certification Order, 112.)

In conditionally certifying the class, the court provided that it was “without prejudice to the respective parties’ rights to move for decertification of the action as a class action____” (Conditional Certification Order, II7.) At the hearing on class certification which lead to the Conditional Certification Order, Judge Stern stated:

And down the road there will come a time when they’re going to have to show that for this case to go forward, that from all these notifications, and all this investigation, and all this discovery, they have got an honest to goodness case. But I have a pretty good idea where a cart is and where a horse is. I think the best way to find out if you have a cart from the horse is to let these people communicate in a meaningful way with that group of people that they say they can prove were wronged.⁵

(Transcript of Hearing, December 22, 1983, at 28:22-29:5.)

The parties entered into a discovery plan (the “discovery plan”) which the court approved by Order, dated September 5, 1984. Pursuant to the discovery plan, the parties randomly selected a sample of fifty-one class members as a microcosm of the entire conditional class. During a twenty month period beginning in November, 1984, extensive discovery which focused on the thirteen named plaintiffs and fifty-one sample members (the “sample group”) has been conducted and completed. During this time,

Xerox produced and counsel for the plaintiffs examined approximately 100,-000 pages of documents; 29 days of depositions were taken of nine Xerox executives and key members of its personnel departments; 25 days of depositions were taken of 10 of the 13 named plaintiffs; and a total of nearly 100 interrogatories were answered.

(PB at 10.) Some of the data which were obtained through this discovery are summarized in Appendix A to this Opinion.⁶

Although 1,312 additional plaintiffs have “opted-in” as members of the conditional class, plaintiffs have moved to file a Third Amended Complaint to add a fourteenth named plaintiff, and thereby expand the class period to include April 1, 1983 through May 1, 1984. The proposed Third Amended Complaint also includes class-wide allegations of state contract claims and state age discrimination claims. On June 2, 1986, Magistrate Ronald Hedges denied leave to file the Third Amended Complaint without prejudice to renew after disposition of the instant motions.

III. FACTS

A. Xerox Business History and Reductions in the Workforce

In the early 1970’s Xerox introduced the first practical dry copier causing its business to grow rapidly. Over the years the business of Xerox expanded into different fields such as book publishing, computers, computer related equipment, military equipment and financial services. (See Xerox Memorandum in Support of Motion to “Decertify” the Conditional Class (“XM”) at 4.)

By the early 1980’s, however, Xerox was faced with a very tough set of problems. (Kearns⁷ Deposition Transcript at 11:25; 12:1-17.)⁸ The copier market became saturated with low-cost, high quality products produced by Japanese and other competitors. In 1981, the state of affairs at Xerox was described as “unsatisfactory” due to declining profits and profit margins. Xerox was rapidly losing market shares. (Glavin⁹ at 20:12-16.) Through a process called “competitive benchmarking” Xerox examined its competition and found its competitors were able to manufacture a quality product at a cost of approximately thirty to forty percent less than Xerox. (Glavin at 21:18-21.)

Xerox attempted to turn itself around by decreasing costs across the board. Various non-worker related cost-cutting measures were implemented. However, because payroll costs accounted for more than fifty percent of the total expenses of Xerox, the work force became a target for reduction. (Reid Affidavit,¹⁰ ¶ 3.) Xerox therefore reactivated and implemented a number of programs which would eventually lead to the reduction in size of the work force or “downsizing.”

The policies governing separations and work force reductions had been adopted and were in effect in various Xerox units prior to the implementation of the cost cutting efforts which are the subject of this Opinion. Specifically, “[t]he reduction in force [“RIF”] programs utilized to meet the business crisis beginning in 1980 were not newly written. They had been on the books for some years and had been utilized occasionally in the 1970’s when specific surplus...