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May 29, 1986

JOHN T. COLBY, Plaintiff,

The opinion of the court was delivered by: WEINFELD


Plaintiff John T. Colby commenced this action alleging that his forced retirement at age 65 under defendant Graniteville Company's mandatory retirement policy violated the Age Discrimination in Employment Act ("ADEA"). *fn1" Graniteville moves for summary judgment, asserting that Colby, who was Senior Vice President of Finance and Administration of the McCampbell Sales Division, came within an exemption under the ADEA which authorizes the compulsory retirement before age 70 of those employees who for the two years prior to retirement were "employed in a bona fide executive or a high policymaking position" and who are eligible for aggregate annual retirement benefits of no less than $44,000 per year. *fn2"

 Colby was first employed by McCampbell and Company in or about 1947. After McCampbell and Company was acquired by Graniteville in 1962, it became the McCampbell Sales Division of Graniteville, thereby giving Graniteville a manufacturing division in Graniteville, South Carolina and a marketing division in New York City. Colby was promoted in 1970 to credit manager of McCampbell. In 1980 he was again advanced, this time to the position of Senior Vice President of Finance and Administration, the position he held until his retirement in 1984.

 McCampbell's retirement policy provides that "an Employee who is in an executive position and whose retirement income is at a level which permits mandatory retirement at [age 65] under applicable law" may not continue his employment beyond the end of the year in which he reaches age 65. Colby was 65 on September 22, 1984 and, pursuant to the company's policy, was forced to retire effective December 31, 1984. Colby contends that Graniteville's employment practices constitute age discrimination in violation of the ADEA and he seeks compensatory and liquidated damages.


 In moving for summary judgment, defendant bears the burden of showing the absence of any genuine issues of material fact. *fn3" The rule is well-settled that the court's function is not to try issues of fact, but only to decide whether there are issues of fact to be tried. *fn4" Nonetheless, Rule 56 must be enforced in appropriate cases, otherwise the Rule becomes a "dead letter." *fn5" As our Court of Appeals recently noted, "the salutary purposes of summary judgment -- avoiding protracted, expensive and harassing trials -- apply no less to discrimination cases than to commercial or other areas of litigation." *fn6"

 Preliminarily, the defendant moves for summary judgment on the ground that plaintiff's EEOC claim was not timely filed, thus barring this action. Under the ADEA, a victim of age discrimination in New York must file his charge with the EEOC within 300 days of the alleged unlawful practice. *fn7"

 It is undisputed that plaintiff met with Swint, McCampbell's president, in January 1984, at which time he requested that he not be retired at age 65. Swint told Colby that the request would be considered and he would be advised of the decision. *fn8" It is also undisputed that on March 23, 1984, Swint informed Colby that he would have to retire at the end of 1984; that his request had been denied. Plaintiff filed his EEOC complaint on December 5, 1984, less than 300 days after March 23rd, but more than 300 days after his January meeting.

 The evidence is clear that Colby was aware of the company's mandatory retirement policy at least as early as January 1984, but he did not receive definite oral or written notice that he would be terminated until March 23rd. Our Court of Appeals has made clear that the 300-day limitations period commences when the employee receives definite notice of termination, not when he first learns of the discriminatory retirement policy. *fn9" Any other interpretation of the statute would lead to the "obviously undesirable result" that an employee would have to file an EEOC complaint within 300 days of commencing his employment, assuming that the retirement policy was made known to him at that time, even if his retirement policy was several decades away. *fn10" Moreover, absent an express indication that an employee will be retired at age 65 pursuant to the company's policy, it is not unreasonable for an employer, in its own interest, to keep a valuable employee in service or for an employee, who may consider his services well-high indispensable to expect the company to waive its policy and to continue him on the payroll beyond his 65th birthday, a situation that is not uncommon. The limitation period does not accrue until the employee is clearly informed that his services will be terminated in the year he reaches the age of 65 and the company policy enforced. Defendant's motion on the ground that plaintiff's claim is time-barred is denied.

 The ADEA was amended in 1978 to permit compulsory retirement of individuals between 65 and 70 years of age who have been employed for the preceding two years in a "bona fide executive or a high policymaking position" and who are eligible to receive aggregate annual retirement benefits of at least $44,000. The EEOC has promulgated regulations interpreting "bona fide executive" and "high policymaking position." *fn11" To establish that plaintiff was a "bona fide executive" as defined in the regulations, defendant must show that plaintiff meets each of the following requirements: *fn12" plaintiff's primary duty consists of the management of the enterprise or of a department or subdivision; plaintiff customarily and regularly directs the work of two or more other employees therein; plaintiff has the authority to hire or fire other employees or his suggestions as to hiring, firing, advancement and promotion of other employees are given particular weight; plaintiff customarily and regularly exercises discretionary powers; and plaintiff does not devote more than 20% of his time to activities which are not directly and closely related to the performance of the work described above.

 If plaintiff is shown to exercise these responsibilities, the EEOC regulations make clear that the exemption applies "only to a very few top level employees who exercise substantial executive authority over a significant number of employees and a large volume of business." *fn13" The Conference Committee Report on the ADEA amendments, quoted at length in the EEOC regulations, provides: "With respect to employees whose duties are associated with corporate headquarters operations, such as finance, marketing, legal, production and manufacturing ... the definition would cover employees who head those division." *fn14" The Conference Committee Report continues:

In a large organization the immediate subordinates of the heads of these divisions sometimes also exercise executive authority, within the meaning of this exemption. The conferees intend the definition to cover such employees if they possess responsibility which is comparable to or greater than that possessed by the head of a significant and substantial local operation who meets the definition. *fn15"

 It is undisputed that for the two-year period prior to his mandatory retirement, plaintiff Colby was Senior Vice President of Finance and Administration of the McCampbell Sales Division of Graniteville, located in New York City. The McCampbell organizational chart *fn16" shows plaintiff as one of three senior vice presidents, second in command only to the president of the McCampbell Sales Division, Samuel Swint. Swint reported only to the president of Graniteville. The organizational chart also shows the manager of accounting, the manager of administrative services, the manager of office services, the administrator of financial and cost analysis, and the administrator of credit all reported to plaintiff.

 Colby was a participant in the company's Executive Compensation Plan, earning $62,000 per year plus benefits. He received a company car and was the only employee in the New York office to have a country club membership provided for him by the company. *fn17" While it is true that the level of compensation "is not determinative as to whether a position comes within the bona fide executive ... exemption," *fn18" it is one of a ...

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