Behr v. AADG, Inc
Filing
82
MEMORANDUM Opinion and Order granting 31 Motion for Partial Summary Judgment; denying 40 Cross-Motion for Summary Judgment (See Order Text). Signed by Magistrate Judge CJ Williams on 7/29/2016. (des)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF IOWA
CENTRAL DIVISION
DENNIS BEHR, et al.
Plaintiffs,
vs.
No. 14-CV-3075-CJW
MEMORANDUM OPINION
AND ORDER
AADG, INC., d/b/a Curries,
Defendant.
____________________
TABLE OF CONTENTS
I. INTRODUCTION ............................................................................... 2
II. PROCEDURAL HISTORY ................................................................... 2
III. FACTUAL BACKGROUND ................................................................ 3
IV. SUMMARY JUDGMENT STANDARD................................................... 6
V. STATUTORY INTERPRETATION OF OWBPA ........................................ 7
VI. DISCUSSION ................................................................................ 14
A. No Genuine Issue of Any Material Fact Exists ....................................... 15
B. Compliance with the Requirement for a 45-day Consideration Period ........... 16
C. Compliance with the Disclosure Requirement for Non-terminated Employees 20
D. Compliance with the Disclosure Requirement for the Eligibility Factors ....... 27
E. Compliance with the Disclosure Requirement for the Decisional Unit .......... 31
F. Inclusion of an Attorney’s Fees Provision in the Separation Agreement ....... 33
VI. CONCLUSION .............................................................................. 35
I. INTRODUCTION
The matters before the court are the plaintiffs’ motion for partial summary
judgment (Doc. 31)1 and defendant AADG, Inc.’s cross-motion for summary judgment
(Doc. 40). At issue is the enforceability of a separation agreement wherein plaintiffs
waived their right to sue their employer for age discrimination. On April 6, 2016, the
court held a hearing on the parties’ pending motions for summary judgment. The parties
were given 14 days from the date of the hearing to file additional briefing if they wished.
On April 20, 2016, both parties submitted post-hearing briefs which the court has
considered. Doc. 73, 74. Thus, the motion for summary judgment is fully submitted.
The court has thoroughly considered all briefing and arguments in this matter.
After much deliberation and research into this difficult statutory landscape, the court finds
that, as a matter of law, defendant’s waiver is invalid and unenforceable. Thus, the court
grants plaintiffs’ motion for partial summary judgment and denies defendant’s crossmotion for summary judgment. Plaintiffs may continue to assert their age discrimination
claims against defendant.
II. PROCEDURAL HISTORY
Plaintiff Dennis Behr commenced this lawsuit on November 21, 2014. Mr. Behr
filed a complaint with jury demand alleging a violation of the Age Discrimination in
Employment Act of 1967 (ADEA), 29 U.S.C. § 621 et seq., by his former employer,
defendant AADG, Inc., d/b/a Curries (defendant).
Doc. 2.
Mr. Behr moved for
conditional class certification seeking to certify the class of 13 employees—who were
over 40 years of age—fired through defendant’s reduction in force (RIF) plan. Doc. 15.
Through an amended complaint, plaintiff Glenn Willier was added as a party plaintiff to
1
The court’s references are to the CM/ECF document and page numbers.
2
the suit. Doc. 25. The court granted conditional class certification. Doc. 28. Potential
class members include: Dale Glenn and Robert Lauen (Doc. 37), Michael Eppens (Doc.
41), and Curtis Blaine Darnell (Doc. 43) (hereinafter collectively referred to as
“plaintiffs”). Defendant filed a counterclaim for compensation and attorney’s fees under
the Separation Agreement.2 Doc. 5.
On November 20, 2015, plaintiffs filed a motion for partial summary judgment
and a request for oral argument. Doc. 31. Plaintiffs seek partial summary judgment on
the invalidity of ADEA claim waivers in a “Separation Agreement, General Release and
Covenant Not to Sue” (Separation Agreement) they signed upon termination of their
employment. In response to plaintiffs’ motion for partial summary judgment, defendant
filed a resistance (Doc. 38), and a cross-motion for summary judgment asserting the
waiver is enforceable (Doc. 40). Plaintiffs then filed a resistance to defendant’s crossmotion for summary judgment and requested oral argument. Doc. 50. Defendant filed
a reply in support of its cross-motion. Doc. 65.
III. FACTUAL BACKGROUND
Defendant manufactures metal frames and doors as well as composite,
commercial, and steel doors, at a plant located in Mason City, Iowa (the plant). Doc.
31-1, at 2; 38-2, at 1. As of February 17, 2014, approximately 600 employees worked
at the plant. Doc. 38-2, at 2. At the plant, employees were generally divided between
direct and indirect labor groups. See Doc. 42-1 at 2. The direct labor group (sometimes
referred to as “Direct Production” employees) included employees involved in the actual
production of finished products on the manufacturing floor who added value to the
2
Defendant has since withdrawn its claim for attorney’s fees.
3
product in the manufacturing process. Id. The indirect labor group included employees
in management, services, and support work. Id.
Both the President and the Director of Operations were informed in February of
2014 that they needed to cut $1.4 million in indirect personnel costs at the plant. Doc.
38-1, at 3. Defendant therefore conducted a “Reduction in Workforce” or “RIF.” Id.
at 2. All employees working in direct production were ineligible for the RIF program in
February 2014. Doc. 38-1, at 3–4. In other words, only employees in the indirect labor
group were eligible for the RIF. Id. The director of human resources obtained a list of
all employees at the plant, removed those with “DP,” or Direction Production
designations by their names, and thereby created a list of indirect labor group employees.
Doc. 42-1, at 2; P. App. 25–28. The list of 175 indirect labor group employees generated
by defendant included names, ages, and job descriptions or titles (such as customer
service, door foreman, or draft tech). Id. Defendant identified fourteen employees
whose jobs would be terminated. Doc. 38-2, at 2; P. App. 24–28, 35. Defendant
identified these employees for many different reasons, including redundant layers of
supervision or management and/or their positions were eliminated, because they had
indicated they were voluntarily retiring within the year, performance, and part-time
status. Doc. 38-2, at 5. Defendant placed an “x” in a column next to the job title for
each of those employees. P. App. 25–28.
On or about February 17, 2014, defendant advised all fourteen employees that
their employment would be terminated as part of the RIF. Doc. 31-1 at 4-5. Of the
fourteen employees terminated, thirteen were older than 40 years of age. Id.3 Defendant
provided each terminated employee with a Separation Agreement. Doc. 42-1, at 3. The
3
The only terminated employee under 40 years of age was Judy Griswold, Order Processing,
age 33. Doc. 31-1 at 5. The remaining thirteen employees ranged in ages from 46 to 67 years
old. Id.
4
Separation Agreement included a waiver of ADEA claims against defendant; in other
words, if the employees signed the Separation Agreement, they would waive their right
to sue alleging age discrimination.
Id. 3-5. If the employee signed the Separation
Agreement, then defendant would provide the employee with severance compensation.
Id. at 3. The Separation Agreements provided that the employees had forty-five (45)
days to consider the Separation Agreement and that the employees could revoke the
ADEA waiver and releases within seven days after signing the Separation Agreement.
Doc. 32-1, at 4.
On February 20, 2014, a few days after defendant terminated the employees and
provided them a copy of the Separation Agreement, defendant mailed to each terminated
employee two attachments, marked Exhibit A and Exhibit B, referenced in the Separation
Agreement. Id. at 1; 42-1, at 3–4. Defendant did not provide the employees with these
documents at the time of their termination because there was concern that employees
would begin sharing them around the plant and cause confusion and speculation regarding
the RIF before defendant could inform each of the employees of their termination. Doc.
42-1, at 4. Exhibit A lists each of the fourteen terminated employees by title and age.
Doc. 31-6, at 1. Exhibit B consists of a list of 161 ages, in order from age 23 to 68,
described as “Ages as of 2/20/2014 of persons at [the plant] not selected for employee
termination program.” Id. at 2.
Each of the fourteen terminated employees signed the Separation Agreement and
received severance compensation. Doc. 42-1, at 3. For example, under the Separation
Agreement, plaintiff Behr received a total of $8,347.92 in payments and reimbursement
of $2,449.59 for health care coverage. Doc. 5, at 4. Each of the terminated employees
signed the Separation Agreement well before the expiration of the forty five day period
provided. Doc. 42-1, at 5. None revoked their waivers within the seven days provided
in the Separation Agreement. Id.
5
IV. SUMMARY JUDGMENT STANDARD
Summary judgment is appropriate “if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
FED. R. CIV. P. 56(a). “An issue is ‘genuine’ if the evidence is sufficient to persuade a
reasonable jury to return a verdict for the nonmoving party.” Schilf v. Eli Lilly & Co.,
687 F.3d 947, 948–49 (8th Cir. 2012) (citing Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 248 (1986)). A fact is material when it “might affect the outcome of the suit under
the governing law.” Anderson, 477 U.S. at 248. Thus, “the substantive law will identify
which facts are material.” Schilf, 687 F.3d at 949 (quoting Anderson, 477 U.S. at 248)
(internal quotation mark omitted). “To establish a genuine issue of material fact, [a party]
may not ‘merely point to self-serving allegations, but must substantiate allegations with
sufficient probative evidence that would permit a finding in [his] favor.’” Argenyi v.
Creighton Univ., 703 F.3d 441, 446 (8th Cir. 2013) (quoting Davidson & Assocs. v.
Jung, 422 F.3d 630, 638 (8th Cir. 2005)). Typically, the moving party must support its
motion by using “the record, including depositions, documents, electronically stored
information, affidavits or declarations, stipulations (including those made for purposes of
the motion only), admissions, interrogatory answers, or other materials,” to show that
there is no genuine issue of material fact before the court. FED. R. CIV. P. 56(c)(1)(A).
The court must consider cited material but may also rely on other material present in the
record. FED. R. CIV. P. 56(c)(3).
The court must view all “the evidence in the light most favorable to the nonmoving
party and giv[e] the nonmoving party the benefit of all reasonable inferences.” Crawford
v. Van Buren City., Ark., 678 F.3d 666, 669 (8th Cir. 2012) (citing Lewis v. Heartland
Inns of Am., L.L.C., 591 F.3d 1033, 1035 (8th Cir. 2010)). In order to deny a motion
for summary judgment, “the evidence must be ‘such that a reasonable jury could return
6
a verdict for the nonmoving party.’” Reed v. City of St. Charles, Mo., 561 F.3d 788,
791 (8th Cir. 2009) (quoting Anderson, 477 U.S. at 248).
Procedurally, “[a] movant for summary judgment . . . must identify those portions
of the record which . . . demonstrate the absence of a genuine issue of material fact.”
Gannon Int’l, Ltd. v. Blocker, 684 F.3d 785, 792 (8th Cir. 2012) (citing Torgerson v.
City of Rochester, 643 F.3d 1031, 1042 (8th Cir. 2011) (en banc)). If the moving party
has done so, then the nonmoving party “must respond by submitting evidentiary materials
that set out specific facts showing that there is a genuine issue for trial.” Id. (citing
Torgerson, 643 F.3d at 1042). “Speculation and conjecture are insufficient . . . .” Id.
at 794. (citing Bloom v. Metro Heart Grp. of St. Louis, Inc., 440 F.3d 1025, 1028 (8th
Cir. 2006)). If the record, viewed as a whole, “could not lead a rational trier of fact to
find for the nonmoving party, there is no genuine issue for trial.” Id. (citing Torgerson,
643 F.3d at 1042). Throughout the summary judgment stage, “the court’s function is
not to weigh the evidence and determine the truth of the matter itself, but to determine
whether there is a genuine issue for trial.” Schilf, 687 F.3d at 949 (citing Anderson, 477
U.S. at 249).
V. STATUTORY INTERPRETATION OF OWBPA
In 1990, Congress enacted the Older Workers Benefit Protection Act (OWBPA)
to “clarify the protections afforded older workers under the ADEA.” Parsons v. Pioneer
Seed Hi-Bred Int’l, Inc., 447 F.3d 1102, 1104 (8th Cir. 2006). The OWBPA is codified
at Title 29, United States Code, Section 626 et seq. (2016). Section 626(f) sets out
statutory requirements that waivers of ADEA claims must meet, at a minimum, to be
valid and, thus, enforceable. See 29 U.S.C. § 626(f) (listing the mandatory statutory
requirements).
These requirements mandate that employers give their terminated
employees, at a minimum, a certain time period to consider the ADEA claim waivers,
7
the advice to consult with an attorney, and certain informational disclosures. Id. If an
employer does not comply with these statutory requirements, then the waiver is not
considered knowing and voluntary, which means that it does not bar the employee’s
ADEA claims. See generally Oubre v. Entergy Operations, Inc., 522 U.S. 422 (1998)
(holding that a nonconforming waiver does not bar an employee’s ADEA suit). The
Eighth Circuit Court of Appeals in Parsons stated that “[t]he requirements [of OWBPA]
are strict and unqualified; if the waiver does not satisfy the statute, it is ineffective as a
matter of law.” Parsons, 447 F.3d at 1104 (citing Oubre, 522 U.S. at 427 (“Congress
delineated these duties with precision and without qualification: An employee ‘may not
waive’ an ADEA claim unless the employer complies with the statute.”)).
A preliminary matter is whether Congress wrote the statutory requirements in such
a manner that a court may understand their demands and strictly enforce them. As with
any matter of statutory interpretation, the court turns first to the plain language of the
statute. Owner-Operator Indep. Drivers Ass’n, Inc. v. Supervalu, Inc., 651 F.3d 857,
862 (8th Cir. 2011) (citing to United States v. I.L., 614 F.3d 817, 820 (8th Cir. 2010)
(internal citation omitted) (“The Supreme Court has ‘stated time and again that courts
must presume that a legislature says in a statute what it means and means in a statute
what it says there.’”)). Only “[w]hen the words of a statute are unambiguous, then, this
first canon is also the last: ‘judicial inquiry is complete.’” I.L., 614 F.3d at 820 (internal
citations omitted). Thus, only if the plain language is ambiguous will the court inquire
into other persuasive aids such as agency regulations and the statute’s legislative history.
Title 29, United States Code, Section 626(f)(1), provides in pertinent part:
Except as provided in paragraph (2), a waiver may not be considered
knowing and voluntary unless at a minimum–
8
(A) the waiver is part of an agreement between the individual and the
employer that is written in a manner calculated to be understood by such
individual, or by the average individual eligible to participate;
(B) the waiver specifically refers to rights or claims arising under [the
ADEA];
(C) the individual does not waive rights or claims that may arise after the
date the waiver is executed;
(D) the individual waives rights or claims only in exchange for
consideration in addition to anything of value to which the individual
already is entitled;
(E) the individual is advised in writing to consult with an attorney prior to
executing the agreement;
(F) . . . . (ii) if a waiver is requested in connection with an exit incentive
or other employment termination program offered to a group or class of
employees, the individual is given a period of at least 45 days within which
to consider the agreement;
(G) the agreement provides that for a period of at least 7 days following the
execution of such agreement, the individual may revoke the agreement, and
the agreement shall not become effective or enforceable until the revocation
period has expired;
(H) if a waiver is requested in connection with an exit incentive or other
employment termination program offered to a group or class of employees,
the employer (at the commencement of the period specified in subparagraph
(F)) informs the individual in writing in a manner calculated to be
understood by the average individual eligible to participate, as to-(i) any
class, unit, or group of individuals covered by such program, any eligibility
factors for such program, and any time limits applicable to such program;
and (ii) the job titles and ages of all individuals eligible or selected for the
program, and the ages of all individuals in the same job classification or
organizational unit who are not eligible or selected for the program . . . .
9
29 U.S.C. § 626(f)(1). The parties do not dispute that defendant’s Separation Agreement
complied with most of the provisions of Section 626(f)(1). The parties dispute whether
the Separation Agreement complied with Sections 626(f)(1)(A) and 626(f)(1)(H).
Much of the statute is written in clear, plain-language. The court understands that
Section 626(f)(1)(A)-(H) lists minimal requirements that Congress designated to ensure
that older workers make “knowing and voluntary” waivers of their ADEA claims. 29
U.S.C. § 626(f)(1)(A)-(H). The language becomes blurry, however, at subsections
626(f)(1)(H)(i) and (H)(ii). Various terms in subsection (H) are unfortunately rather
ambiguous and fail to offer this court clear guidance. This is not the only court to
conclude that Section 626(f)(1)(H) is ambiguous. See, e.g., Burlison v. McDonald’s
Corp., 445 F.3d 1242, 1246 (11th Cir. 2006) (referencing Section 626(f)(1)(H), “[t]he
only fair conclusion, then, is that the OWBPA is ambiguous); Raczak v. Ameritech Corp.,
103 F.3d 1257, 1259 (6th Cir. 1997) (“We unanimously conclude that because the
nomenclature of § 626(f)(1)(H) of Title 29 is ambiguous, a rigid and mechanical
interpretation of that provision is inappropriate.”). As Section 626(f)(1)(H) is central to
this court’s analysis of the plaintiffs’ motion for partial summary judgment, the court
now endeavors to offer its analysis and best understanding of subsection (H) below in
connection with the pertinent facts of this case.
Subsection (f)(1)(H) begins with two commands.
If a waiver is offered in
connection with an employment termination program (like the RIF program here) to a
group or class of employees, then (1) the employer must inform the employees of such
waivers “in writing in a manner calculated to be understood by the average individual
eligible to participate”; and (2) this written notification must be given “at the
commencement of the period specified in subparagraph (F) [which is a period of 45 days
10
here].” 29 U.S.C. § 626(f)(1)(F). Then Subsection (f)(1)(H) breaks into subsections (i)
and (ii).
29 U.S.C. § 626(f)(1)(H).
Subsection (i) mandates that employees get
information as to any class, unit, or group of individuals covered by such program
[employment termination program], information as to any eligibility factors for such
program, and information as to any time limits applicable to such program.
Id.
Subsection (ii) mandates that employees get information as to the job titles and ages of
all individuals eligible or elected for the program, and information as to the ages of all
individuals in the same job classification or organizational unit who are not eligible or
selected for the program. Id. Subsections (i) and (ii) are conjunctive, as they are joined
by the word “and.” Id.
One issue before the court is the meaning of commencement. Does the 45-day
period commence upon the presentation of the waiver agreement to the employee? Or
does the 45-day period commence when the employer has assembled all the required
documents mandated by the OWBPA and finally submits such documents to their eligible
employees, even if such disclosure occurs several days after the initial presentation of the
waiver agreement to the employees? Section 626(f)(1)(F)(ii) reads “the individual is
given a period of at least 45 days within which to consider the [waiver] agreement.” 29
U.S.C. § 626(f)(1)(F)(ii) (emphasis added). While this does not directly answer the
court’s questions about the term commencement and when the clock on the 45-day
consideration period begins to tick, the statutory language, at the very least, informs the
court that there needs to be, at a minimum, 45 days in a row where an employee may
consider the waiver agreement offered to him or her.
Another issue before the court is the meaning of “class, unit, or group of
individuals” and “job classification or organizational unit.” 29 U.S.C. § 626(f)(1)(H).
11
The statute does not define these terms. “Courts properly assume, absent sufficient
indication to the contrary, that Congress intends the words in its enactment to carry ‘their
ordinary, contemporary, common meaning.’” Pioneer Inv. Servs. Co. v. Brunswick
Assocs. Ltd. P’ship, 507 U.S. 380, 388 (1993) (quoting Perrin v. United States, 444 U.S.
37, 42 (1979)). When, however, Congress uses technical terms or words of art or of an
industry, courts may turn to the industry where they are used to determine their meaning.
See Corning Glass Works v. Brennan, 417 U.S. 188, 201–02 (1974) (looking to the
industry for the meaning of “working conditions” because it is necessary “where
Congress has used technical words or terms of art”).
Given the technical nature of these terms, the court turns to the regulations of the
governing agency, here the Equal Employment Opportunity Commission (EEOC), for
insight on their meaning. The EEOC’s regulations read: “the scope of the terms ‘class,’
‘unit,’ ‘group,’ ‘job classification,’ and ‘organizational unit’ is determined by examining
the ‘decisional unit’ at issue.” 29 C.F.R. § 1625.22(f)(1)(iii)(C) (2016). The regulations
define decisional unit as:
[T]hat portion of the employer’s organizational structure from which the
employer chose the persons who would be offered consideration for the
signing of a waiver and those who would not be offered consideration for
the signing of a waiver. The term ‘decisional unit’ has been developed to
reflect the process by which an employer chose certain employees for a
program and ruled out others from that program.
29 C.F.R. § 1625.22(f)(3)(i)(B). Thus, a job “class, unit, or group” is not equivalent to
the decisional unit, but in determining the meaning of these terms with regard to a
particular employer, one looks to the decisional unit for guidance. See id. In other
words, when an employer has identified the decisional unit, that is the group of employees
12
eligible for termination, then the employer looks within that decisional unit to identify
classes, units, or groups of employees against which age comparisons can be made.
A further issue before the court is what kind of informational disclosures the
employer is required to give its terminated employees when the statute mandates
information pertaining to job titles and ages. Regarding the term ages, EEOC regulations
state that “[i]nformation regarding ages should be broken down according to the age of
each person eligible or selected for the program and each person not eligible or selected
for the program. The use of age bands broader than one year (such as ‘age 20-30’) does
not satisfy this requirement.” 29 C.F.R. § 1625.22(f)(4)(ii). The regulations provide
helpful guidance for the term job titles as follows, “[i]n a termination of persons in several
established grade levels and/or other established subcategories within a job category or
job title, the information shall be broken down by grade level or other subcategory.” 29
C.F.R. § 1625.22(f)(4)(iii). The regulations also provide a sample listing of ages and
job titles. 29 C.F.R. § 1625.22(f)(4)(vii)(D). It is clear from the sample, that the EEOC
regards the job titles requirement with some degree of specificity. See id. The sample
chart lists the following job titles: Mechanical Engineers I, Mechanical Engineers II,
Structural Engineers I, Structural Engineers II, Purchasing Agents. See id.
The statute provides that “the party asserting the validity of a waiver shall have
the burden of proving in a court of competent jurisdiction that a waiver was knowing and
voluntary.” 29 U.S.C. § 626(f)(3). In post-hearing briefs, both parties agreed that
defendant has the burden of proof.
The case law supports this conclusion.
See
Kruchowski v. Weyerhaeuser Co., 446 F.3d 1090, 1093 (10th Cir. 2006) (“As a
preliminary matter . . . [f]or claims concerning § 626(f)(1)(A)-(H), the OWBPA clearly
places the burden on the party asserting a valid waiver of rights to an age discrimination
13
claim to show that execution of the waiver was knowing and voluntary.”). See also Doc.
73, 74 (listing numerous cases supporting the notion that the employer has the burden of
proof).
VI. DISCUSSION
In their motion for summary judgment, plaintiffs allege their waiver of ADEA
claims—in the Separation Agreement that all plaintiffs signed—was noncompliant with
the OWBPA’s waiver provision embodied in 29 U.S.C. § 626(f)(1)(A) and (H). Doc.
31 at 2-3.
Plaintiffs generally allege the waiver failed to comply with the OWBPA
because it was not “written in a manner calculated to be understood by” an employee.
29 U.S.C. § 626(f)(1)(A); Id. at 16. Plaintiffs more specifically allege defendant’s
waiver is noncompliant with § 626(f)(1)(H) for four reasons, as follows:
(1)
The waiver failed to comply with the OWBPA’s timing requirement that
certain information be given to the employees at the commencement of the 45-day
consideration period. 29 U.S.C. § 626(f)(1)(H), Doc. 31-1 at 10;
(2)
Exhibit B failed to comply with the OWBPA’s informational disclosure
requirement that “age” information (of all individuals not selected for the
employment termination program) be given and broken down into job category or
job title. 29 U.S.C. § 626(f)(1)(H)(ii), Doc. 31-1 at 11–12;
(3)
The waiver failed to comply with the OWBPA’s disclosure requirements to
provide the “eligibility factors” considered for each employee’s selection for the
RIF program. 29 U.S.C. § 626(f)(1)(H)(i), Doc. 31-1 at 11–14; and
14
(4)
The waiver failed to comply with the OWBPA’s disclosure requirements
because it did not accurately describe the “class, unit or group of individuals”
understood as the “decisional unit” used in the RIF.
29 U.S.C. § 626(f)(1)(H); Doc. 31-1 at 16–18.
As the court will discuss below, there is no genuine dispute of material facts here.
Thus, the court’s analysis entirely hinges upon whether the waiver of ADEA claims in
the Separation Agreement complied with the OWBPA’s Section 626(f).
A. No Genuine Issue of Any Material Fact Exists
Defendant asserts there is a genuine issue of material facts. Doc. 38-1 at 32. And
in the alternative, defendant argues in its cross-motion for summary judgment that there
is no genuine issue of any material fact. Doc. 40 at 2. The court finds that there is no
dispute of material facts here.
The court acknowledges that the mere existence of cross motions for summary
judgment does not mean defendant is taking inconsistent positions, or that there may be
a genuine issue of any material fact with regard to one motion but not the other. The
court must consider each motion separately. Wright v. Keokuk City. Health Ctr., 399 F.
Supp. 2d 938, 946 (S.D. Iowa 2005) (internal citations omitted). Also, the court notes
that the cross motion for summary judgment before it does not mandate that the court
must grant summary judgment here. “The filing of cross-motions does not concede the
absence of a triable issue of fact. The court is bound in such cases to deny both motions
if it finds ... there is actually a genuine issue of material fact.” Id. (citing Jacobson v.
Md. Cas. Co., 336 F.2d 72, 75 (8th Cir. 1964)).
15
There is no genuine issue of any material fact here, however, because the issue
before the court on these cross motions for summary judgment is one of a written waiver’s
compliance with statutory requirements. In order for an ADEA waiver to be knowing
and voluntary, it must (1) satisfy the OWBPA’s statutory requirements from the fourcorners of the waiver itself, then (2) the court will inquire into whether each plaintiff
knowingly and voluntarily executed an OWBPA-compliant-waiver. Embarking on this
two-step analysis, the court halts at step one. The court finds that the four-corners of the
Separation Agreement fail to comply with the OWBPA. Thus, the court never reaches
step two, which would have required determining factual questions like the employees’
subjective beliefs as to what they were waiving, whether they had advice of counsel, and
other factors that may have shown their waivers were involuntary, even if the waiver
otherwise met the minimum requirements under Section 626(f)(1). This is purely a matter
of statutory compliance based on a written document.
B. Compliance with the Requirement for a 45-day Consideration Period
Plaintiffs argue that defendant did not give the information as mandated by Section
626(f)(1)(H), specifically, the information contained in Exhibits A and B, at the
commencement of the 45-day consideration period. Doc. 31-1 at 10. Defendant provided
those lists of terminated employees and employees from whom defendant selected the
terminated employees [Exhibits A and B] several days after it terminated the employees
and provided them with the Separation Agreement. Id. at 6. Therefore, plaintiffs argue
that defendant violated 29 U.S.C. § 626(f)(1)(H) mandating that information be presented
in writing at the commencement of the 45-day consideration period in which employees
would consider waiving their ADEA claims. Id. at 10. Plaintiffs rely on the following
16
case law to support the claim that strict compliance with § 626(f) is required: Oubre, 522
U.S. at 427 (finding that a valid release must conform to the strict statutory
requirements); Parsons, 447 F.3d at 1104 (quoting Oubre, 522 U.S. at 427, for the notion
that a waiver is only valid if it complies with all the statutory requirements); and
Kruchowski, 446 F.3d at 1095 (finding that a single violation invalidates the entire
waiver). The court agrees “a waiver may not be considered knowing and voluntary
unless at a minimum” it meets the listed requirements.
29 U.S.C. § 626(f)(1).
Nevertheless, that does not necessarily answer the question of what happens when, as
here, an employer provides some of the required information after providing the
employee with a waiver if the employer still gives the employee 45 days to consider the
waiver.
Defendant claims that it did not provide the terminated employees with Exhibits A
and B at the same time it provided them with the Separation Agreements out of
consideration for their employees. Doc. 40-1 at 3. Defendant explains that “there was
a concern that employees would begin sharing them [Exhibits A and B] around the plant
and cause confusion and speculation regarding the reduction in force while employees
were still being notified that they would be terminated.” Id. Further, defendant asserts
that “[t]his approach was taken out of concern for employees so they would not learn of
the fact that they were part of the reduction in force by virtue of the list.”
Id.
Furthermore, defendant argues it gave all plaintiffs a full 45 days from the receipt of
Exhibits A and B to consider signing the Separation Agreement and waiving their ADEA
claims. Doc. 38-1 at 7–8. The court has no reason to doubt defendant’s explanation for
the delay in providing the lists to the employees, but the reason for the delay (whether
negligent, nefarious, or laudable), is irrelevant.
17
To determine whether the Separation Agreement complied with the requirements
of Section 626(f)(1), the court must read subsections (F)(ii) and (H) together. Section
626(f)(1)(F)(ii) provides that “if a waiver is requested in connection with an exit incentive
or other employment termination program offered to a group or class of employees, the
individual is given a period of at least 45 days within which to consider the [waiver]
agreement.” Section 626(f)(1)(H) provides that “if a waiver is requested in connection
with an exit incentive or other employment termination program offered to a group or
class of employees, the employer (at the commencement of the period specified in
subparagraph (F)), informs the individual in writing” of certain information. 29 U.S.C.
§ 626(f)(1)(H). The plain language of these sections does not require, or even mention
that, an employer must provide this information simultaneously with a separation
agreement. What the plain language of the statute does require is that, if an employer
requests a waiver, it must provide the employee with certain information, and must allow
the employee 45 days from that date to consider the agreement.
The Separation Agreement here (with Exhibits A and B mailed several days later)
complied with these statutory requirements. The Separation Agreement plaintiff Behr
signed (Doc. 32-1 at 1–7)4 specifically mentions Exhibit A and Exhibit B as being
attached. Page 4 of the Separation Agreement, reads: “Employee has 45 days from the
date of receipt of this Agreement and ADEA Waiver to consider and sign them.” Doc.
4
The court notes that it reviewed the four Separation Agreements in defendant’s appendix (Doc.
38-3) and concluded that while there were some specific provisions dependent on the individual
employee (e.g., Robert Lauen received 16 weeks of severance pay (Doc. 38-3 at 27) while Dale
Glenn received 26 weeks of severance pay (Doc. 38-3 at 41)), the provisions at issue here are
identical in all agreements presented. Also, the parties cite to Mr. Behr’s Separation Agreement
when examining the agreement language’s compliance with the OWBPA, which suggests to the
court, again, that all the separation agreements contain the exact same operative language.
18
31-1 at 4. From the actions and statements made by other employees, it is clear “receipt”
included Exhibits A and B. All plaintiffs received a 45-day consideration period starting
from when they received Exhibits A and B. See Doc. 38-1 at 8 (stating that Karen Ries
told at least one plaintiff, Mr. Behr, over the telephone that he had 45 days from the time
he received the certified mail containing a set of the documents with Exhibits A and B to
sign both the Agreement and ADEA waiver) [the court here understands both documents
to comprise the “Separation Agreement” as the court uses such term]. Indeed, the
language in the Separation Agreement was also sufficient to put plaintiffs on notice of
Exhibits A and B; plaintiff Behr called Karen Ries and inquired where Exhibit A and
Exhibit B were (she told Mr. Behr that they were being mailed that same day and that his
45-day consideration period began when he received the exhibits). See id. At the motion
hearing before this court, the parties agreed that none of the plaintiffs used the full 45day period to consider signing. See id. at 7-8.
Furthermore, the regulatory scheme contemplates that an employer may alter or
amend separation agreements after the initial date when employees receive them. When
that occurs, the time period for consideration of the agreement restarts the running of the
clock. See 29 C.F.R. § 1625.22(e)(4) (providing that the time period under Section
626(f)(1)(F) runs from the date of the employer’s final offer and any material changes to
the final offer will restart the running of the consideration period). It follows, then, that
defendant’s provision of Exhibits A and B to plaintiffs a few days after defendant provided
them the Separation Agreement restarted the running of the consideration period.
Accordingly, the court finds that defendant complied with the OWBPA when it
commenced calculation of the 45-day consideration period only after plaintiffs received
the Separation Agreement and Exhibits A and B.
19
C.
Compliance with the Disclosure Requirement for Non-terminated
Employees
Plaintiffs argue that defendant failed to provide information required by the
OWBPA. Section 626(f)(1)(H)(ii) requires that terminated employees be informed in
writing of: “the ages of all individuals in the same job classification or organizational
unit who are not eligible or selected for the program.” 29 U.S.C. § 626(f)(1)(H)(ii).
Plaintiffs assert that Exhibit B, which defendant provided ostensibly to comply with
Section 626(f)(1)(H)(ii), falls short of complying with the above subsection because it
only lists the ages of individuals “facility-wide” who were not terminated as part of the
RIF program. Doc. 31-1 at 10. Plaintiff argues Exhibit B does not provide a list of the
ages by job classification or organizational unit as required. Id. Plaintiffs cite to an
EEOC regulation, which provides that “[i]n a termination of persons in several
established grade levels and/or other established subcategories within a job category or
job title, the information shall be broken down by grade level or other subcategory.” 29
C.F.R. § 1625.22(f)(4)(iii). Furthermore, plaintiffs cite the model disclosure chart at 29
C.F.R. § 1625.22(f)(4)(vii)(D) as showing that the ages of those not selected are listed
by position titles like: Mechanical Engineers I, Mechanical Engineers II, Structural
Engineers I, etc.
On the other hand, defendant argues that plaintiffs’ “hypertechnical arguments”
are against public policy and are unsupported by the recent trend in case law. Doc. 381 at 10. See, e.g., Burlison, 455 F.3d at 1246 (stating “The only fair conclusion, then,
is that the OWBPA is ambiguous.”); Raczak, 103 F.3d at 1259 (stating “[w]e
unanimously conclude that because the nomenclature of § 626(f)(1)(H) of Title 29 is
ambiguous, a rigid and mechanical interpretation of that provision is inappropriate”);
20
Ribble v. Kimberly-Clark Corp., No. 09-C-643, 2012 WL 589252, at *6 (E.D. Wis. Feb.
22, 2012) (“The Court therefore concludes that while an employer must comply with the
requirements of the OWBPA in order to obtain a valid waiver, the imprecise language of
the statute requires that compliance be measured in relation to the purpose underlying the
act”). Defendant claims the ages of employees eligible, but not selected, were included
in Exhibit B. Doc. 38-1 at 13. Further, defendant argues the statute does not require an
employer provide job titles along with age data of eligible, but not selected, employees.
Id. at 21-22. Defendant points out that the EEOC regulations defined job classifications
and organizational units as referring back to the decisional unit. Id. at 22.
An examination of the language in Section 626(f)(1) reflects that a waiver must
provide information a terminated employee could understand, but Congress used different
language to describe the information the employer must provide for terminated employees
versus eligible, but non-terminated employees. Section 626(f)(1) provides in pertinent
part:
[A] waiver may not be considered knowing and voluntary unless at a
minimum— . . . (H) if a waiver is requested in connection with an exit
incentive or other employment termination program . . . the employer . . .
informs the individual in writing in a manner calculated to be understood
by the average individual eligible to participate, as to—(ii) the job titles and
ages of all individuals eligible or selected for the program, and the ages of
all individuals in the same job classification or organizational unit who are
not eligible or selected for the program.
29 U.S.C. § 626(f)(1) (emphasis added). Thus, the first clause of subsection (ii) requires
both job titles and ages of all selected employees, while the second clause only requires
ages of individuals who are eligible but not selected for the program “in the same job
classification or organizational unit.” Id.
21
Although the requirement of job titles is technically absent from the second clause,
the phrase “same job classification or organizational unit” requires reference to the first
clause. The “same job classification or organizational unit” refers to the job classification
or organizational unit as the terminated employees. See Burlison, 455 F.3d at 1246
(stating that the first clause and second clause of subsection (ii) do not make sense unless
read in conjunction). Thus, the first clause of subsection (ii) mandates that job titles and
age data of all selected employees be disclosed, and the second clause of subsection (ii)
mandates that in those same job classifications and organizational units, the employees
(eligible for the RIF program) who were not selected have their ages disclosed. Thus,
although an employer need not provide the job titles of every employee not terminated,
it must provide the terminated employee with job classification or organizational unit
information that matches that of the terminated employees so that the terminated
employee is informed of relevant, comparative information “in a manner calculated to be
understood by the average” terminated employee. 29 U.S.C. § 626(f)(1)(H). In other
words, an employer must provide the terminated employee with information by job
classification or description similar to the terminated employee’s job classification or
description so that the terminated employee can compare position and age in an
understandable way before an employee can knowingly and voluntarily waive his or her
rights to sue for age discrimination.
The model disclosure chart from the EEOC regulations supports this conclusion.
Published here in part, it provides:
(D) The following is a listing of the ages and job titles of persons in the
Construction Division who were and were not selected for termination and
the offer of consideration for signing a waiver:
22
Job Title
Age
(1) Mechanical Engineers, I
No. Selected
No. not selected
21
48
26
11
73
63
4
18
64
3
11
28
3
10
29
(2) Mechanical Engineers, II
25
11
17
5
8
Etc., for all ages
(3) Structural Engineers, I
21
Etc., for all ages
29 C.F.R. § 1625.22(f)(4)(vii)(D).
As is evident from reading this chart, the primary purpose is to inform terminated
employees of possible age discrimination claims they may have. The EEOC model
disclosure would allow an employee to easily and readily compare how many Structural
Engineers I were retained and how many Structural Engineers I were terminated. This
model disclosure provides information in a manner calculated to be understood by the
average employee who wishes to determine the ages of Structural Engineers I in both of
these groups (those retained and those terminated). The model disclosure does not
provide the titles of each of the employees within the category of Structural Engineers,
but does provide sufficient information for comparative purposes.
Congressional intent behind the OWBPA was to protect older workers from age
discrimination by employers.
See H.R. REP. NO. 101-664, at 7–24 (1990)
23
(accompanying H.R. 3200) (House Report reflects that Congress purposefully enacted
the OWBPA to provide more stringent waiver protections for older workers). That goal
cannot be achieved if employers do not give their employees meaningful, comparative
information. As the Eleventh Circuit Court of Appeals succinctly states:
The OWBPA’s informational requirements are designed to ensure that older
employees are provided with information necessary to evaluate any
potential ADEA claims they may have before deciding to release them . . .
. In order to evaluate their claims, employees need appropriate data to
conduct meaningful statistical analyses.
Burlison, 455 F.3d at 1247. Further, “the data must permit employees and their attorneys
to make meaningful comparisons to determine whether an employer engaged in age
discrimination.” Id.
In this case, defendant provided terminated employees with Exhibit B which reads:
“Ages as of 02/20/2014 of persons at Curries facility not selected for employee
termination program: Age 23, 24, 24, 26 . . . 64, 64, 65, 68.” Doc. 31-6 at 2. This is
not meaningful data in the context of the OWBPA. This case is similar to Branker v.
Pfizer, Inc., 981 F. Supp. 862 (S.D.N.Y. 1997). In Branker, the court in dicta discussed
an Attachment A which read “[t]he ages of individuals not given the separation program
are ages 23 through 67, excluding ages 40, 50, 55, 59, 60, 63, 64, 66.” Id. at 867 n.3.
The court found that attachment did not allow the terminated employee to determine the
ages of the non-terminated employees in the decisional unit or determine whether the
non-terminated employees were in the same job classification or organization unit as those
terminated as required by 29 U.S.C. § 626(f)(1)(H). Id. Furthermore, the court found
Attachment A was not written in a manner understandable by the average individual as
24
required by 29 U.S.C. § 626(f)(1)(H), and, thus, Attachment A was invalid under the
OWBPA. Id., at 867.
Similarly in this case, common sense tells anyone looking at this list in Exhibit B
that it provides insufficient information to discern whether there is a pattern of age
discrimination in the selection of those terminated and those who were not. Although,
the court believes that defendant may very well have been trying to comply with the
OWBPA in good-faith (there is no evidence before the court of bad faith), the court finds
that Exhibit B merely lists ages without specifying that these ages are of “individuals in
the same job classification or organizational unit” as those listed in Exhibit A. Doc. 316 at 2-3; 29 U.S.C. 626(f)(1)(H)(ii). Exhibit A lists the job titles of order technician,
area manager doors, manufacturing engineer, etc. Doc. 36-1 at 1. Exhibit B can only
make sense if defendant provided some job classification or organizational unit that would
allow an employee to compare it to Exhibit A. Although defendant did not have to
provide job titles in Exhibit B, it did need to provide the same job classifications or
organizational units for the non-terminated employees as would apply to the terminated
employees. See Loksen v. Columbia Univ., No. 12 CIV. 7701 CM, 2013 WL 5549780,
at *7–8 (S.D.N.Y. Oct. 4, 2013)(holding that an ADEA release was invalid under the
OWBPA because “[a]s a member of the Radiation Safety department who was not being
selected for termination or offered severance package, Kim’s job title and age should
have been listed. 29 U.S.C. § 626(f)(1)(H)(ii) (requiring disclosure of ‘the ages of all
individuals in the same job classification or organizational unit who are not eligible or
selected for the program.’)”).
Furthermore, defendant had a list of the employees, both terminated and not
terminated, that illustrates how easily the employer could and should have provided the
25
terminated employees with meaningful information. The list of 175 employees listed the
employees by job title. Doc. 31-6 at 4-7; P. App. 25–28. Defendant placed an “x” next
to the names of the terminated employees. Defendant was not required to provide this
list to the terminated employees. Nor was defendant required to provide job titles for
non-terminated employees pursuant to Section 626(f)(1)(H)(ii).
29 U.S.C.
626(f)(1)(H)(ii). Defendant was, however, required to provide the same job classification
or organizational unit as the terminated employees. That information existed on this list.
For example, Ronald Rasmussen, age 52, was a terminated employee with the title
Customer Service-Mason City. Doc. 31-6 at 4. There are fourteen other employees with
the words “Customer Service” in their title.
Id.
A logical and informative job
classification for Rasmussen, then, is “customer service.” The comparative information
for his job classification would have informed him that the thirteen other customer service
employees not terminated ranged in age from 39 to 62. Perhaps defendant would place
other employees within the same job classification or organizational unit, but, at the very
least, this type of job classification provides comparative information.
Defendant argues that the job classification or organizational unit is the same as
the decisional unit, and the decisional unit in this case was the indirect labor group.
Therefore, defendant only had to provide the ages of all of those 175 employees. This
interpretation of job classification or organizational unit does not survive scrutiny. The
employer is in the position of defining the “decisional unit,” the group of employees who
fall within the category of eligible employees. For example, a company could declare
that the decisional unit consists of all employees working at a particular plant. The
company could assert that such a group is the organizational unit from which all
terminated employees will be selected. If, as here, the plant employed 600 employees
26
and the employer terminated fourteen of them, then defendant would argue it complied
with the statute if it provided the terminated employees with columns of 586 ages, with
no further description or information. This is not what Congress intended to accomplish
when it drafted and passed the OWBPA.
For the reasons above, the court finds that the Separation Agreement failed to
comply with 29 U.S.C. § 626(f)(1)(H)(ii) because defendant did not provide the
terminated employees with the same job classification or organizational unit information
for the non-terminated employees (those listed in Exhibit B) as defendant did for the
terminated employees (those listed in Exhibit A) in a manner calculated to be understood
by the average employee.
D. Compliance with the Disclosure Requirement for the Eligibility Factors
Plaintiffs argue that the Separation Agreement is void of any eligibility factors,
thus, defendant violated 29 U.S.C. §§ 626(f)(1)(A), 626(f)(1)(H)(i).
Specifically,
plaintiffs argue that defendant did not disclose “all [the] eligibility factors considered in
general” that led to each employee’s selection for the termination program. Doc. 31-1
at 11, 13. Plaintiffs assert that defendant’s director of human resources testified to
selecting employees for the RIF program for “many different reasons,” none of which
were listed in the waiver. Doc. 31-1 at 15–16 (internal quotations omitted). Such reasons
included: “redundant layers of supervision or management, and/or their positions were
eliminated, because they had indicated they were voluntarily retiring within the year, for
performance reasons, or due to part-time status.” Doc. 31 at 4 (citing P. App. 2
(Affidavit of Gordon ¶¶ 5–6)). Plaintiffs cite to Pagliolo v. Guidant Corp., 483 F. Supp.
2d 847 (D. Minn. 2007) and Kruchowski v. Weyerhaeuser Co., 423 F.3d 1139 (10th Cir.
27
2005) in support of their assertion that eligibility factors are the factors used to analyze
the employees to determine who will be subject to the RIF program and that all eligibility
factors must be disclosed. Doc. 31-1 at 13. In Pagliolo, the court stated that “‘eligibility
factors’ refers to the ‘factors used to determine who is subject to a termination program,
not the factors used to determine who is eligible for severance pay after termination.’”
483 F. Supp. 2d at 861 (citing Commonwealth of Massachusetts v. Bull HN Info. Sys.,
Inc., 143 F. Supp. 2d 134, 147 n.29 (D. Mass. 2001)). In Kruchowski, the court found
that an employer violated the OWBPA when it used these eligibility factors—leadership,
abilities, technical skills, and behavior—to select employees for its RIF yet failed to
disclose these to its terminated employees. 423 F.3d at 1144.
Defendant argues, and the court agrees, that Kruchowski offers questionable and
limited guidance, given that the 2005 opinion was superseded and remanded in 2006. In
its 2006 opinion, the Tenth Circuit found the employer’s waiver invalid due to an
improper decisional unit, and the court never reached the issue of “eligibility factors.”
See Kruchowski, 446 F.3d at 1090–96. Also, the court finds the April 2007 Pagliolo
opinion is called into uncertainty by the May 2007 Pagliolo opinion. In May 2007, the
Minnesota District Court questioned its earlier analysis on “eligibility factors” from April
2007. Pagliolo v. Guidant Corp., No. 06-943 DWFSRN, 2007 WL 1567617, at *3 (D.
Minn. May 29, 2007). It stated:
The Court concluded that “eligibility factors” under the OWBPA refers to
the factors used to determine who is subject to a termination program, not
to the factors used to determine who is eligible for severance pay after
termination. The Eighth Circuit has not ruled on this issue and the law in
other circuits is unclear. The Court agreed with the court’s interpretation
of eligibility factors in Commonwealth of Ma. v. Bull HN Info. Sys., 143
F. Supp. 2d 134, 147 (D.Mass.2001). Arguably, the Tenth Circuit called
into doubt this Court’s view when it amended Kruchowski v. Weyerhaeuser
28
Co., 423 F.3d 1139 (10th Cir. 2005) (“Kruchowski I”) (discussing
eligibility factors and relying on Bull ) with Kruchowski v. Weyerhaeueser
Co., 446 F.3d 1090, 1095-96 (10th Cir. 2006) (“Kruchowski II”)
(withdrawing discussion of eligibility factors). Thus, the Court finds that
there is substantial ground for difference of opinion on this issue. Granting
Defendants’ motion will allow the Eighth Circuit to determine what the law
is in this Circuit.
Id. Thus, the court finds the cases of Kruchowski and Pagliolo not particularly helpful
in defining eligibility factors. They are instructive only to the extent they reflect the
uncertain meaning of the term “eligibility factors.”
On the other hand, defendant argues that under the EEOC regulations, eligibility
factors mean “those that make an employee eligible for severance benefits or a severance
plan, and not the factors that an employer considered in determining which employees
would be selected for termination in the RIF.” Doc. 38-1 at 27, 30 (citing 29 C.F.R. §
1625.22(f)(1)(iii)(A)-(B); Recchia v. Kellogg Co., 951 F. Supp. 2d 676, 693 (D.N.J.
2013) (finding that an employee was entitled to severance benefits under Kellogg’s plan
upon the submission of an unrevoked form); Ricciardi v. Elec. Data Sys. Corp., No. 035285, 2007 WL 576323, *4 (E.D. Pa. Feb. 20, 2007)).5 Defendant asserts that it
court also considered the value of Foster v. Mountain Coal Co., on this issue,
which was also cited by defendant. Id. at 30. In Foster v. Mountain Coal Co., LLC,
No. 12–cv–03341–LTB–MJW, 2014 WL 2024877, at *10 (D. Colo. May 14, 2014), the
court found that the disclosure properly listed the following eligibility factors: “years of
service at West Elk Mine, current miner rate of I, II, or II [sic]; skills assessment within
current group (production maintenance, or surface groups); Certifications; behavior
based safety standards; and current corrective action step.” Defendant’s reliance on the
May 14, 2014, Foster decision is misplaced, however, because the court reversed that
decision on July 20, 2014, see generally Foster v. Mountain Coal Co., LLC, 61 F. Supp.
3d 993 (D. Colo. 2014) (reversing its earlier decision that the defendant did not strictly
5
This
29
complied with the disclosure requirement because its waiver stated: “[t]he Employer
agrees to provide Employee with the following salary continuation and benefits as
consideration for entering into this Agreement, provided Employee signs and abides by
this Agreement.” Doc. 38-1 at 30. Separation Agreement at III(A). Also, the individual
separation agreements informed employees of the severance pay to which they were
entitled. Id. Thus, defendant concludes that it complied with the OWBPA and EEOC
regulations in disclosing its eligibility factors for severance pay (here all terminated
employees were eligible for severance pay as long as they signed the waiver); and
defendant asserts that it was under no obligation to disclose the factors it considered to
select individuals within its decisional unit for termination. Id. at 30–31.
The court agrees with the defendant. The statute provides that a waiver is knowing
and voluntary “if a waiver is requested in connection with an . . . employment termination
program [here the RIF program] offered to a group or class of employees, the employer
. . . informs the individual in writing in a manner calculated to be understood by the
average individual eligible to participate, as to . . . any eligibility factors for such
program.” 29 U.S.C. § 626(f)(1)(H)-(H)(i). Furthermore, the EEOC’s model waiver
indicates an employer fulfills the “eligibility factor” disclosure requirement by simply
stating: “(B) All persons in the Construction Division [the decisional unit] are eligible for
the program.” 29 C.F.R. § 1625.22(f)(4)(vii)(B). Accordingly, both the statutory
language and the regulations suggest that it was sufficient for defendant to identify the
group eligible for termination, and it was not required to identify the factors it considered
in determining which of the eligible employees to terminate.
comply with the OWBPA and now finding that the ADEA waiver was valid and thus
granting defendant’s motion for summary judgment).
30
The court could not find any Eighth Circuit authority directly examining the
OWBPA’s “eligibility factors” disclosure requirement. The recent case of Recchia v.
Kellogg, cited by defendant, is instructive. The Recchia Court found that “eligible for
such program” refers only to which employees are eligible to sign the ADEA claim
waiver and receive severance pay. Recchia, 951 F. Supp. 2d at 692–93. The court finds
such an interpretation is supported by the language in the model waiver in the EEOC
regulations quoted above. Supra, 22-23. In Recchia, the court found that the whole
decisional unit was eligible to receive severance pay as long as the waiver was signed
and unrevoked. Id. at 680–84. It appears logical to the court that in the context of an
RIF program, when an employer presents an employee with a waiver of his or her ADEA
claims under the OWBPA, that such employee is eligible to sign such a waiver and receive
severance pay. Furthermore, it makes sense that an employer would wish to expansively
offer a waiver of ADEA claims in the context of a group termination program as a way
to reduce litigation costs, while simultaneously benefiting terminated employees who
receive monetary consideration.
Thus, the court finds that the Separation Agreement complied with the requirement
to identify the employees eligible for termination, pursuant to Section 626(f)(1)(H)(i).
E. Compliance with the Disclosure Requirement for the Decisional Unit
Plaintiffs argue that defendant failed to disclose its decisional unit in a manner
understandable to the “average employee”. Doc. 31-1 at 16. Specifically, under 29
U.S.C. § 626(f)(1)(H)(i), employers are required to disclose in writing in a manner
understandable by its employees the “class, unit or group of individuals” covered by the
group terminations. Id. Plaintiffs assert that “class, unit, or group of individuals” refers
31
back to the decisional unit. Id. (citing 29 C.F.R. §1625.22(f)(1)(iii)(C)). This court
concludes, however, that “class, unit, or group of individuals” is not identical to the
decisional unit; rather, it is to be identified by reference to the employees who constitute
the decisional unit. See 29 C.F.R. § 1625.22(f)(1)(C) (“the scope of the terms ‘class,’
‘unit,’ ‘group,’ ‘job classification,’ and ‘organizational unit’ is determined by examining
the ‘decisional unit’ at issue.”). Plaintiffs claim that defendant improperly labeled its
decisional unit as the “indirect labor group” for its February 2014 RIF program. Doc.
31-1 at 17–20. Plaintiffs argue that (a) the Separation Agreement does not describe the
decisional unit in a manner calculated to be understood by the average employee recipient,
and (b) that the real decisional unit used was much smaller than the entire indirect labor
group. Id. at 17–18.
Defendant maintains that its decisional unit was the “indirect labor group,” and
that term was frequently used at the plant and understood by the average employee. Doc.
38-1 at 15–21. The court agrees with defendant on this issue. Defendant notes that the
plant management was instructed to reduce $1.4 million of indirect personnel expenses,
and that employees who worked in direct production could not be considered. Id. at 1415. Indeed from the facts, it appears that defendant did only consider indirect production
employees; namely, the indirect labor group employees.
Id. at 15.
Furthermore,
defendant claims—the court finds this claim both believable and realistic—that plant
employees understood the term Indirect Labor Group to mean not the direct production
employees (understood as “those employees who work on the manufacturing floor and
add value to the product in the manufacturing process.”). Id.
Again, the EEOC regulations define decisional unit as “that portion of the
employer’s organizational structure from which the employer chose the persons who
32
would be offered consideration for the signing of a waiver and those who would not be
offered consideration for the signing of a waiver.” 29 C.F.R. § 1625.22(f)(3)(i)(B).
Here defendant’s Separation Agreement on the first page reads:
B. Employee is one of several employees in the Indirect Labor Group at
Curries who have been selected for an employee termination program at the
Employer’s Mason City, Iowa facility. All affected employees at Curries
will be terminated in February 2014 . . . .”
Separation Agreement at I(B) (emphasis added); Doc. 32-1 at 1. The court finds the
identification of the “Indirect Labor Group” as the decisional unit was proper. See
Burlison, 455 F.3d at 1249 (finding that the facts support that the employees were indeed
chosen from the 208 employees in the Atlanta, Nashville, and Greenville regions and,
thus, those 208 employees properly “constitute[d] the appropriate decisional unit.”). See
also Kruchowski, 446 F.3d at 1094 (the May 2006 decision) (finding that the decisional
unit presented to employees, all salaried employees at the Valliant Containerboard Mill,
was improper as the actual decisional unit used was “those salaried employees reporting
to the Mill manager.”); Adams v. Moore Bus. Forms, Inc., 224 F.3d 324, 329–30 (4th
Cir. 2000) (finding that the proper decisional unit included only the employees at the
Buckhannon plant as there was no evidence to support the allegation that the employer
considered other plants’ employees for termination as well).
F.
Inclusion of an Attorney’s Fees Provision in the Separation Agreement
Plaintiffs argued (a) that the claim in the Separation Agreement demanding
attorney’s fees upon breach of the Separation Agreement was void under law (Doc. 31),
and (b) that the inclusion of such language had a chilling effect on all employee recipients
of the Separation Agreement (Doc. 42 at 5 (citing to Waiver of Rights and Claims: Tender
33
Back of Consideration, 65 Fed. Reg. 77438, 77440–42 (Dec. 11, 2000)). Plaintiffs
suggest that the mere inclusion of an attorney’s fees provision establishes that their
waivers were not knowing and voluntary because of the chilling effect.
The Separation Agreement reads, under Section V, Additional Terms and
Conditions, as follows:
B. Breach of Agreement. If the Employee breaches any provision of this
Agreement, the Employer, in its sole discretion, may discontinue the
payment of any further salary continuation or other benefits provided for in
this Agreement, other than those required by law, and Employee will be
liable to the Employer for damages and/or equitable relief and attorneys
fees, as a court may deem appropriate.
Separation Agreement at V(B); Doc. 32-1 at 4.
Defendant agrees it cannot recover attorney’s fees in connection with the waiver
of ADEA claims, pursuant to 29 C.F.R. § 1625.23(b) (2016), and, thus, has withdrawn
any claim for attorney’s fees against plaintiffs. Doc. 38-1 at 36. So, only plaintiffs’
second argument is left unresolved. Although logical, the court finds that a chilling effect
does not have a legal implication in the OWBPA statutory landscape here in the first-step
of the court’s analysis. As the court initially described, examining ADEA waivers of
older employees protected under the OWBPA is a two-step analysis (see supra Section
V. Statutory Interpretation of OWBPA).
First, the court examines if the waiver
agreement on its four-corners complies with the minimum statutory requirements set out
in 29 U.S.C. § 626(f). Second, the court examines whether the individual employees
knowingly and voluntarily waived their ADEA claims. The court reaches step two only
if it first finds the employer complied with all the minimum requirements under step one.
34
Here, the court never passes step one as it finds that the Separation Agreement
violates the OWBPA’s minimum statutory requirements.
Thus, the court need not
analyze the plaintiffs’ subjective knowledge and the voluntariness of their waivers, where
the argument of a chilling effect could have an implication. The concern that employers
could include invalid attorney fee recovery provisions to scare employees away from
pursing their OWBPA challenges is a legitimate one. Doc. 42 at 5 (citing 65 Fed. Reg.
77438, 77440–42). On the other hand, separation agreements, like the one at issue in
this case, often address waivers of other rights, not just ADEA claims, where recovery
of attorney’s fees may not be barred by statute. The Separation Agreement at issue in
this case contained a severability clause (Doc. 32-1 at 5), which arguably would negate
the argument that the mere inclusion of an attorney’s fees provision violated the OWBPA.
Nonetheless, because the court never passes step one, it declines to rule on a step two
matter; namely, whether inclusion of an attorney’s fees provision had a chilling effect on
plaintiffs that made their waiver of ADEA claims either unknowingly or involuntarily.
VI. CONCLUSION
In sum, the Separation Agreement is unenforceable to the extent it purports to bar
plaintiffs’ ADEA claims. The waiver provisions did not comply with the minimum
requirement that defendant provide terminated employees with job classification and age
information of the non-terminated in a manner calculated to be understood by the average
employee. In Exhibit B, defendant provided plaintiffs with nothing more than a list of
161 ages of employees not terminated as part of the RIF, with no further description of
their position.
This failed to provide the terminated employees with the type of
35
comparative data contemplated by the OWBPA that would allow older terminated
workers the ability to determine if their employer terminated them because of their age.
In light of the foregoing, plaintiffs’ motion for partial summary judgment (Doc.
31) is GRANTED. Defendant’s motion for summary judgment (Doc. 40) is DENIED.
IT IS SO ORDERED this 29th day of July, 2016.
__________________________________
C.J. Williams
United States Magistrate Judge
Northern District of Iowa
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