McCormack v. IBM

• Decision Date: 09 November 2015
• Docket Number: No. 14–CV–3242 (KMK).,14–CV–3242 (KMK).
• Citation: 145 F.Supp.3d 258
• Parties: John McCORMACK, et al., Plaintiffs, v. IBM, Defendant.
• Court: U.S. District Court — Southern District of New York

145 F.Supp.3d 258

John McCORMACK, et al., Plaintiffs,

v.IBM, Defendant.

No. 14–CV–3242 (KMK).

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

Signed Nov. 9, 2015.

Michael H. Sussman, Esq., Sussman & Watkins, Goshen, NY, for Plaintiffs.

Alison B. Marshall, Esq., Jones Day, Washington, DC, for Defendant.

Matthew W. Lampe, Esq., Jones Day, New York, NY, for Defendant.

OPINION AND ORDER

KENNETH M. KARAS, District Judge:

Plaintiffs John McCormack (“McCormack”), Mark Lingl (“Lingl”), and Ron Shelton (“Shelton”) (collectively, “Plaintiffs”) filed the instant Amended Complaint against International Business Machines Corp. (“IBM” or “Defendant”) on behalf of themselves and a class of similarly-situated IBM employees and former employees. The Amended Complaint alleges that Defendant engaged in discriminatory practices in violation of the Age Discrimination in Employment Act, 29 U.S.C. § 621, et seq. (“ADEA”) and the New York State Human Rights Law (“NYSHRL”), New York Executive Law § 296. Before the Court is Defendant's Motion For Judgment on the Pleadings pursuant to Federal Rules of Civil Procedure 12(c) as to Shelton and Lingl. (See Mot. For Judgment on the Pleadings (“Mot.”) (Dkt. No. 22).) For the following reasons, Defendant's Motion is denied.

I. Background

A. Factual Background

1. Plaintiffs' Amended Complaint

The following facts are drawn from Plaintiffs' Amended Complaint and are taken as true for the purpose of resolving the instant Motion. The Court also considers two documents attached to the Declaration of Matthew W. Lampe, as explained below. McCormack, who was born on September 25, 1967, is a former employee of IBM who was laid off in December 2013. (First Amended Complaint (“Am. Compl.”) ¶¶ 3–4 (Dkt. No. 20).) Shelton, who was born on July 14, 1964, is a former IBM employee who was laid off in July 2013. (Id. ¶¶ 5–6.) Lingl, who was born on March 16, 1956, is a former IBM employee who was terminated from his position as an Advanced IT Specialist effective July 12, 2013. (Id. ¶ ¶ 8, 10.)

Before his termination, McCormack worked at the IBM Semiconductor Manufacturing Facility at 2070 Route 52 in Hopewell Junction, New York. (Id. ¶ 14.) After being advised several months before his termination that he would be laid off in December 2013, McCormack searched for a comparable position and identified at least 15 internal positions at IBM. (Id. ¶ 15.) Yet when McCormack actively sought these positions, he was denied each one of them. (Id. ¶ 16.) IBM managers and supervisors told McCormack that these positions had been targeted for young people who had graduated from college in 2012 or 2013. (Id. ¶ 17.) McCormack responded that he was a 2012 college graduate, but he still received no offers that would allow for an internal transfer. (Id. ¶ 18.) Plaintiffs allege that McCormack had the qualifications and technical skills to successfully fulfill the responsibilities of many of the positions that he sought. (Id. ¶ 19.)

On September 12, 2011, IBM hired Shelton as a Technical Solutions Architect. (Id. ¶ 21.) Shelton satisfactorily performed the duties assigned to him, but, nonetheless, IBM terminated him effective July 12, 2013. (Id. ¶ 22.) Shelton's supervisor did not explain to Shelton why he had been terminated and, when she advised him of his termination, she began crying and stated that she would never had accepted her own promotion if she knew that she would have to fire Shelton. (Id. ¶ 23.) Prior to Shelton's termination, his second line manager emailed Shelton and other employees suggesting that they congratulate a first line manager who was retiring. (Id. ¶ 24.) Later, Shelton learned that the first line manager, a woman over 55 years of age, did not voluntarily retire, but, rather, was forced to leave IBM and was replaced by a younger Lab Services manager. (Id. ¶ 25.) After Shelton was terminated and signed a severance agreement and general release, IBM sought candidates for his former position and filled it with a much younger person. (Id. ¶ 26.) At the time he signed the general release, Shelton did not know that his position was being continued but rather understood, from IBM's public representations, that he had been terminated as part of a major corporate downsizing. (Id. ¶ 27.) Although Shelton qualified for and sought other positions that IBM advertised, he was never offered a chance to compete for any of them because he was not a recent college graduate. (Id. ¶¶ 28–29.)

Lingl worked for IBM from June 1, 1998 until June 28, 2002, when he was laid off, and again from October 16, 2006 until June 12, 2013, when IBM terminated Lingl by an email from his supervisor, Dawn Mack (“Mack”). (Id. ¶¶ 30–31.) The email from Mack made no reference to any performance issues, but rather claimed that Lingl was being terminated as part of a broader fiscally driven “resource action,” identified as the “S & D Global Techline and Channel Technical Sales Resource Action,” which IBM was implementing to “streamline operations and increase business productivity.” (Id. ¶ 31.) At the time of his termination, Lingl's job performance was satisfactory, which was evidenced by the fact that he had received six “Excellence Awards” and a consequent bonus between November 30, 2011 and May 31, 2013. (Id. ¶ 32.)

At the time of their lay-offs, neither Shelton nor Lingl was aware that IBM intended to recruit and hire a large number of recent college graduates to replace them, but rather, because IBM announced that it was “streamlining” its work force, they understood that they were casualties of a resource action and IBM had no other work opportunities available. (Id. ¶¶ 33–34.) Plaintiffs allege that in 2013, IBM cut its older work force and then implemented a nationwide advertising campaign to replace the older workers with recent college graduates. (Id. ¶ 35; see also id. ¶ 12.) Such advertisements were nationwide in scope and reflected a like policy to discriminate against older workers and to exclude them from consideration for a range of jobs for which many would qualify. (Id. ¶ 13.) As part of this policy, despite encouraging displaced workers to locate other internal positions, IBM informed those it was terminating that it did not “practice bumping rights.” (Id. ¶ 36 (internal quotation marks omitted).)¹ Plaintiffs allege that IBM implemented this termination, recruitment, and hiring campaign as a means of replacing older workers with younger workers and that the campaign was not informed by the specific and relative qualifications of recently displaced older employees like Plaintiffs, or those of the younger employees that IBM intended to hire to replace the older employees. (Id. ¶ 37.)

As part of this plan, Plaintiffs allege that IBM offered Shelton and Lingl severance packages which they could access only if, within thirty days, they signed general releases freeing IBM from liability for, among other things, age discrimination. (Id. ¶ 38.) Specifically, Shelton and Lingl each signed a Resource Action Separation Agreement (“Separation Agreement”). (Decl. of Matthew W. Lampe (“Lampe Decl.” Ex. A, at 2 (“Dkt. No. 24”); id. Ex. B, at 1.) The Separation Agreement stated that “[b]y signing [it], [the employee] acknowledge[d] that [he] fully underst[ood] any and all rights [he has] with respect to the claims [he was] releasing, and that [he was] voluntarily signing th[e] Agreement without any threats, coercion or duress, whether economic or otherwise, and that [he] intend[ed] to by bound by the terms of th[e] Agreement.” (Id. Ex. A, at 3; id. Ex. B, at 2.) Each Separation Agreement explained that the employee was “being offered payments and benefits as part of the resource action that [he] otherwise would not have been entitled to receive.” (Id. Ex. A, at 2; id. Ex. B, at 1.) The Separation Agreement advised Lingl and Shelton to “thoroughly review and understand the effect of th [e] Agreement before [they] sign[ed] it[,]” and, if they did not understand the Separation Agreement, to “talk to a lawyer.” (Id. Ex. A, at 2–3; id. Ex. B, at 1–2.) Moreover, the Separation Agreement provided that each Plaintiff had 45 days after he received the Separation Agreement or until his last day of employment to sign the Separation Agreement and gave each seven days after he signed the Separation Agreement to revoke it. (Id. Ex. A, at 3; id. Ex. B, at 2.)

Plaintiffs contend that IBM offered the severance packages fraudulently and in bad faith, because the premise of the offer was that IBM was engaged in a nationwide “resource action,” not that the company was intentionally replacing older employees with younger employees. (Am. Compl. ¶ 39.) Shelton and Lingl allege that they would never have signed the general releases or accepted the severance payments had they known that IBM intended to replace them with recent college graduates. (Id. ¶ 41.) Finally, Plaintiffs allege that the positions offered to the young employees were not made available to Plaintiffs and others similarly situated in age. (Id. ¶ 45.)

B. Procedural History

Plaintiffs filed the original Complaint on May 5, 2014. (Dkt. No. 1.) Defendant filed an answer on June 20, 2014. (Dkt. No. 12.) On September 29, 2014, Plaintiffs filed the Amended Complaint, alleging violations of the ADEA and NYSHRL. (Dkt. No. 20.) Defendant filed an answer on October 16, 2014. (Dkt. No. 21.) Pursuant to a scheduling order dated September 19, 2014, (Dkt. No. 19), Defendant filed both its Motion For Judgment on the Pleadings as to Shelton and Lingl and its supporting papers on November 4, 2014, (Dkt. Nos. 22–24), Plaintiffs filed their Memorandum of Law in Opposition to the Motion on December 4, 2014, (Dkt. No. 25), and Defendant filed its reply on December 19, 2014, (Dkt. No. 26). Upon the Court's entering an order on May 19, 2015 to request supplemental briefing on the question of whether the Separation Agreements complied with the requirements of the Older Workers Benefit Protection Act, (Dkt. No. 27), Plaintiffs submitted...