The opinion of the court was delivered by: Robert P. Patterson, Jr., District Judge.
The Equal Employment Opportunity Commission (EEOC) seeks
liquidated damages and equitable relief from defendant
Chrysler Corporation (Chrysler) in this action arising out of
an alleged violation of the Age Discrimination in Employment
Act (ADEA), 29 U.S.C. § 621 et seq. due to denial of severance
pay. This is a motion to dismiss, pursuant to Federal Rules of
Civil Procedure 12(b)(1) and 12(b)(6), and for summary judgment
for defendant, pursuant to Federal Rule of Civil Procedure 56.
On September 6, 1985, Chrysler sold its Manhattan Sales and
Service Operations Facility to Potamkin Chrysler Plymouth
Dodge Inc. (Potamkin), effective October 6, 1985.
On September 12, 1985, Irving A. Zinn (Zinn), aged 57, and
Jack Gioglio a/k/a Hunter (Gioglio), aged 59, each signed a
"Retirement Election Form." Def. Ex. B. The forms provided
that Zinn and Gioglio elected to be considered for the Special
Early Retirement Plan when the Chrysler Manhattan Sales and
Service Operations Facility closed. Only employees "who are
age 55 and over with 10 or more years of credited service"
were eligible for early retirement. Id. Zinn and Gioglio each
had 22 years of credited service. The early retirements of Zinn
and Gioglio became effective on September 30, 1985.
On May 16, 1986, and December 19, 1986, Zinn and Gioglio
respectively filed charges with the EEOC "alleging Chrysler
had failed to provide severance pay to older terminated
employees while providing severance and pension benefits to
substantially younger co-workers." Pl. 3(g) Statement at 11,
¶¶ 26-27. On January 10, 1988, the New York District Office of
the EEOC issued a "DETERMINATION" that the Office's
"investigation does not establish a violation of the statute."
Def. Ex. G. The Washington D.C. EEOC Office then issued a
"DETERMINATION ON REVIEW OF ADEA CHARGE" on August 5, 1988.
Def. Ex. H. That latter determination stated that defendant's
severance pay plan constituted a violation of the ADEA and that
the EEOC would begin conciliation, in accordance with Section
7(b) of the ADEA, before commencing a legal action.
By letter dated August 19, 1988, Chrysler's attorney
informed the EEOC that its "conclusion of an ADEA violation
has no legal support and, accordingly, conciliation efforts
would not be called for." Def. Ex. I. On February 27, 1989,
the EEOC filed this action, alleging that Chrysler violated
the ADEA by "failing to provide severance benefits to
terminated employees age 55 or older who were eligible for and
received early retirement benefits." Comp. at 3, ¶ 3. Thus, the
claim herein relates to defendant's failure to provide
severance benefits and does not directly relate to the early
retirement benefit plan.
A. Statute of Limitations
Defendant argues that the complaint should be dismissed as
time barred under the statute of limitations. Plaintiff does
not contend that the action is timely under ADEA's statute of
limitations provision, Section 7(e) of ADEA, 29 U.S.C. § 626(e).
Plaintiff's response rests upon the Age Discrimination
Claims Assistance Act (ADCAA), 29 U.S.C. § 626 note. That
amendment to the ADEA permits actions to be brought "during the
540 day period beginning on the date of [ADCAA's] enactment,"
notwithstanding Section 7(e). The date of the enactment was
April 7, 1988. Both parties agree that plaintiff filed this
action within 540 days of April 7, 1988.
The parties disagree, however, over whether this action
satisfies one of the conditions precedent to invoking ADCAA's
540 day grace period. Section 3(3) of ADCAA sets forth the
following condition precedent: "the statute of limitations
applicable under such section 7(e) to such claim ran before
the date of enactment [April 7, 1988] of this Act." The
statute of limitations applicable under Section 7(e) is that
of the Portal to Portal Pay Act:
if the cause of action accrues on or after May
14, 1947 — may be commenced within two years after
the cause of action accrued, and every such action
shall be forever barred unless commenced within two
years after the cause of action accrued, except
that a cause of action arising out of a willful
violation may be commenced within three years after
the cause of action accrued.
Although the parties disagree over the exact month when this
cause of action accrued, both parties agree that on April 7,
1988 more than two years and less than three years had passed
since the accrual of this cause of action. Thus, on April 7,
1988, the Section 7(e) statute of limitations for a willful
violation had not yet ...