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E.E.O.C. v. CHRYSLER CORP.

January 31, 1990

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, PLAINTIFF,
v.
CHRYSLER CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Robert P. Patterson, Jr., District Judge.

OPINION AND ORDER

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.

BACKGROUND

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.

An Agreement "made and entered" October 3, 1985, between Teamsters Local 868 and Chrysler addressed the "impact of the sale [to Potomac] upon the employees." Def. Ex. A. Under the Agreement, employees who had one or more years of continuous service and who were not offered a position with Potamkin were to receive severance payments. The severance payment plan specifically excluded Zinn and Gioglio because they had "elected to file for special early retirement from the Company and receive special early benefits thereunder." Id.

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.

DISCUSSION

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.

29 U.S.C. § 255(a).

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 ...


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