Equal Employment Opportunity Commission v. Westinghouse Electric Corporation

conduct, Spatola’s is described decision, appellate included Italian laun-

dering proceeds of narcotics transac- conspiring export

tions and narcotics. such, Spatola’s

As conduct falls within the

proscriptions of prohibit- United States law

ing money laundering, 18 U.S.C. § prohibiting aiding abetting or con-

spiring engage in trafficking, narcotics 841(a)(1),846, 953,

21 U.S.C. 963. Since §§ punishable

violations of these statutes are

by imprisonment year for more than one States, agree

the United we with the dis- Treaty’s

trict court’s conclusion that criminality requirement

dual was satisfied.

CONCLUSION Spatola’s

We considered all of have

maining arguments challenging the district

court’s decision and find them to with- foregoing,

out of the merit. judgment

affirm court district

denying Spatola’s petition for a writ corpus.

habeas

EQUAL EMPLOYMENT OPPORTUNI-

TY COMMISSION

WESTINGHOUSE ELECTRIC

CORPORATION, Appellant.

No. 86-1226. Appeals,

United States Court of

Third Circuit.

Argued Oct. 1987.

Decided Feb. 1989.

Certiorari Granted Oct. 1989. Supreme

On Remand from the Court

of the United States Oct. 1989.

Argued on Remand from the Supreme

Court Jan. Rehearing

Panel Sept. Granted

Decided Jan. (argued on

Jerome J. Shestack Jan. panel rehearing 1990 and at on Oct. 1990), Schneider, Schnader, Deena Jo Har- rison, Lewis, Pa., Segal Philadelphia, An- & Kramer, Dunn, drew M. Patricia A. Glen D. Jones, Nager, Day, Pogue, Reavis & Wash- D.C., Ewalt, ington, Henry Westing- W. Pa., Corp., Pittsburgh, house Elec. Moses Haas, Cohler, Munter, Lasky, Lasky, & P.C., Francisco, Cal., appellant. San for 16, 1990), Pink (argued Vella M. on Jan. Carolyn (argued panel L. Wheeler hearing 1990), Living- on Oct. Donald R. ston, Reams, E.E.O.C., Gwendolyn Young ADEA through lated the use of discrimina D.C., Washington, appellee. tory provided sever ance solely benefits laid-off Reesman, Ann Elizabeth McGuiness & who were not eligible otherwise to retire. Williams, Washington, D.C., for cu- amicus enjoined district court riae, Equal Employment Advisory Council denying from to retirement- appellant. on behalf eligible employees. E.E.O.C. v. Westing Ventrell-Monsees, Cathy American Ass’n Electric, house F.Supp. 343, (E.D. 632 350 Persons, Washington, D.C., of Retired for Pa.1986). appeal, On we affirmed the dis curiae, amicus American Ass’n of Retired trict court’s determination that the appellee. Persons on behalf of violated but we remanded to the district court for reevaluation of the find 20, Argued Oct. 1987. ing Westinghouse that had acted willfully. HIGGINBOTHAM, Judge, Before Chief v. Westinghouse Electric, E.E.O.C. 869 GARTH, and SCIRICA Circuit (3d Cir.1989) F.2d 699 (“Westinghouse Judges. II”)1 Argued Supreme on Remand from the 2, 1989, On Supreme October the Court Court Jan. vacated our decision and remanded this HIGGINBOTHAM, Judge, Before Chief case to us for further light consideration in GARTH, and SCIRICA and Circuit of Public Employees System Retirement Judges. Ohio v. 109 S.Ct. (1989). 106 L.Ed.2d 134 Westing Reargued Oct. — E.E.O.C., house Electric v. U.S. —, HIGGINBOTHAM, Judge, Before Chief (1989). 107 L.Ed.2d 7 Upon GARTH, BECKER Circuit review, original we held that our decision Judges. could not in stand of the standards Betts. announced in In panel opinions dat OPINION OF THE COURT 5, 1990, July pertaining ed one to the Penn

GARTH, Judge. Circuit action, sylvania 86-1226, per No. the other This appeal arises from an action the taining action, Jersey to EEOC’s New No. Equal Employment Opportunity Commis- judgment we in entered favor of (“EEOC”) sion against Westinghouse Elec- Westinghouse on all EEOC claims. E.E. Corporation tric Age based on the Electric, Discrimi- Westinghouse O.C. v. Employment (“ADEA”),

nation Cir.1990), vacated, (3d in Act 29 E.E.O.C. v. 1354 (1988), Electric, U.S.C. 621-634 which prohibits Westinghouse (3d 917 §§ F.2d 124 employers discriminating Cir.1990); Westinghouse E.E.O.C. v. on basis Elec tric, Cir.1990), vacated, age respect (3d employee’s to an com- 907 F.2d 1365 pensation terms, conditions, Electric, privi- or the Westinghouse E.E.O.C. v. 917 leges employment. (3d 623(a)(1). Cir.1990). held, Fol- F.2d 123 We inter § alia, lowing trial, a bench court district had not EEOC established that Westinghouse found that willfully Westinghouse had vio- Severance Plans were Electric, Westinghouse (D.N.J.1987). F.Supp. 1. E.E.O.C. v. July F.2d 211 651 725 1172 In our (3d Cir.1984) I”), ("Westinghouse (3d Cir.1990), arose from a opinion, 1990 F.2d 1365 complaint filed EEOC in the Court District Jersey had affirmed New district court’s Jersey for the District of New Id. at entering summary judgment order in favor of Electric, Westinghouse 214. See E.E.O.C. v. case, Westinghouse No. 87-5174. That (D.N.J.1982). charged text, opinion, as we note in was vacated on Westinghouse's plans violated ADEA. We re 30, 1990, pro September October nunc tunc to summary judgment, versed Westinghouse, entered favor of 20, 1990, at same time that we vacated the grounds on the district companion Pennsylvania opinion in the instant application court in its statute of erred case, Westinghouse No. 86-1226. E.E.O.C. v. Subsequently, F.2d at 221. limitations. 725 Electric, (3d Cir.1990); 917 F.2d 123 E.E.O.C. v. court, holding year that a two statute of district Electric, Westinghouse (3d 917 F.2d 124 Cir. applied, dismissed EEOC’saction as limitations 1990). Electric, E.E.O.C. v. time-barred. issue, EEOC, against older in its Petition subterfuge that discriminated inasmuch rights.2 Rehearing, explicitly limited as to recall for our workers concerns whether the 1979 was a July panel opin- We vacated evade ions, above, response as noted (citing supra ADEA. See note Rehearing, which was EEOC’s Petition for 2). Rehearing at 3 n. Petition for that the bene- ground on the based II, fits of we had held that impact nonfringe designed to both the 1979 and the 1982 discrimi- intentionally in an employment terms of nated on the basis of in violation of Accordingly, discriminatory manner.3 ADEA, 623(a)(1). 4(a)(1),29 U.S.C. findings sought a remand F.2d at 699. We concluded district Westinghouse’s plan 1979 provisions of finding court had not erred in that under pay were intended to concerning severance plan, retirement-eligible employees each adversely nonfringe benefits affect favorably younger were treated than less employees so as to constitute a sub- older employees, and that this less favorable Westinghouse terfuge part on the age. treatment was based on Id. at 705- evade ADEA. Moreover, 09. we held that the district correctly plans court determined that the panel rehearing, E.E. granted see We integrated company part were not of an Electric, Nos. 86- Westinghouse v. O.C. plan prevent “double-dipping.” at Id. 87-5174, (3d September Cir. 1226and Order Thus, Westinghouse had failed to 707. set and, 20, 1990) (unpublished), on October legitimate, nondiscriminatory justi- forth a panel argu heard oral present disparate fication for the treatment of re- petition on EEOC’s ment that focused tirement-eligible employees. request for remand. addition, In we held that the were I. 4(f)(2) ADEA, exempt not 29 § 623(f)(2). fully 869 F.2d at 711. Sec- The facts of this case are set forth U.S.C. § 4(f)(2) panel opinion. exempts, from the Westing- in our initial 1989 tion otherwise (3d II, Cir.1989). 4(a)(1), any applicable requirements F.2d 696 In house 869 § brief, Westinghouse employee plan that is not the 1979 severance bona fide benefit pay subterfuge purposes em- evade the plan denied severance to laid-off plan eligible long require for retirement. ADEA so as the does not ployees who were provi- permit involuntary An em- We not discuss the substantive or retirement.4 will which, may qualify exemp- Westinghouse’s plan, ployee plan 1982 benefit for sions of 4(f)(2), plan originally tion either if it itself satis- together with the 1979 under § recognized impact provides: Apparently 4.Section requested stay Betts because the Commission employer, It shall not be unlawful for an by proceedings pending action Con- of these organization— employment agency, or labor By January gress to reverse Betts. order dated 3, 1990, we denied the motion. (2) to observe the terms of a bona fide order, Congress legislation enacted Since that seniority system any employee or bona fide rejected holding. Betts See Older Work- retirement, plan pension, benefit such as a or Act, 101-433, Pub.L. No. ers Benefit Protection plan, insurance which is not 16, 1990) (as (October by amended 104 Stat. 978 chapter, except evade the of this 101-521, (November 104 Stat. 2287 Pub.L. No. 5, employee plan no such benefit shall excuse so, however, 1990)). doing Congress gave individual, any the failure to hire and no such only prospective effect to the new Act. Pub.L. seniority system or benefit 101-433, 105, According- 104 Stat. at § No. require permit involuntary shall or retire- ly, the Older Workers Benefit Protection Act any specified by ment of individual section analysis, appeal, does affect this our or our not 631(a) of this title because of the of such decision. individual; ... remand, 623(f)(2) (1982 1987), Supp. urging V 3. In narrow issue for 29 U.S.C. & § challenge plan. did amended Act, Older Workers Benefit Protection not (October Rehearing, July Pub.L. No. 104 Stat. 978 EEOC Petition for filed 16, 1990). at n. 2. 4(f)(2), part integrated age-based fies if it is of an “increased the disparity caused § 4(f)(2). that satisfies We by pre-Act age limitation, benefit scheme McMann qualify found that the could does not challenge.” insulate it from Id. at 4(f)(2) exemption they were age-related not based on cost factors. Id. Second, the Court reiterated its state- (citing Lebanon, City Mt. E.E.O.C. “ ment in ‘subterfuge’ McMann that means (3d Cir.1988), n. scheme, plan, stratagem, ‘a or artifice of I, 224). F.2d at We evasion,’ which, 4(f)(2), in the context of § decided, addition, the severance specific connotes a ‘intent ... to evade a part integrated of an em- ” statutory requirement.’ Id. at 2863 because, ployee benefit scheme we conclud- (quoting McMann, atU.S. ed, is a benefit for 450). at early retirement benefits cannot be a Third, post-Act noted Court that a (citing Westinghouse substitute. Id. at 710 cannot be a unless “it dis- I, 225). Finally, 725 F.2d at we remanded criminates in a manner forbidden for the district court to reconsider those provisions substantive of the Act.” Id. 109 concluding factors on which it relied in Noting any S.Ct. at 2865-66. willfully. had acted plan that discriminates older work- 714. 4(a)(1) (employers pro- ers would violate § Betts, Supreme the Court addressed discriminating hibited from on the basis 4(f)(2) question exemp- the the whether § age respect terms, compensation, applied disability plan retirement tion to a privileges employment), the Court stated only that was available who 4(a)(1) 4(f)(2) that both could be § § reaching age sixty. The retired before 4(f)(2) given only effect if is viewed as § precise mean- Court declined decide the exempting bona fide benefit that are ing phrase “any employee of the fide bona other, discriminating not “a method of in retirement, plan, pension, benefit such as a nonfringe-benefit aspects employ- of the 4(f)(2). plan,” in 109 or insurance found § relationship.” (citing ment at Id. 2866 29 held, at n. 6. The 2865 Court how- 623(a)(1), (f)(2)). U.S.C. The Court did § ever, statutory language that the does not “nonfringe its use not define benefit” but in exemption “plans limit the which all of the term makes clear that the terms age-based justi- reductions benefits are employee plan” and “bona fide by age-related cost fied considerations.” “nonfringe mutually exclusive. benefit” are I, (rejecting Westinghouse Id. at 2864-65 2864, at 224). Moreover, See id. F.2d at the 725 Court regulation, decided which Fourth, the Court stated that § plan subterfuge” a provides that a is “not liability does not a defense to establish if only justified by age- lesser benefits are ADEA; rather, under the section “rede- factors, 1625.10(d) related cost 29 C.F.R. § plaintiff’s prima the elements of facie fines (1988), contrary plain language to the Thus, case.” Id. at 2868. of the statute and invalid. 109 S.Ct. at challenges provision a of a benefit who Lebanon, (rejecting Mt. 842 plan the “bears burden 1489). F.2d at proving discriminatory plan provi- the The reached several conclusions Court the actually sion was intended to serve regarding precise meaning of “subter- purpose discriminating in some nonfr- 4(f)(2). First, it reaffirmed its fuge” inge-benefit aspect employment of the rela- Lines, holding in Air Inc. v. United tion.” Id. at 2868. McMann, 192, 203, U.S. 98 S.Ct. (1977), employ- that an 54 L.Ed.2d II. adopted prior to the enactment of plan ee that an em The Betts Court held subterfuge. a ADEA cannot be noted, however, ployee plan adopted prior to the enactment The that to at 2861. Court subterfuge to evade post-ADEA provision of ADEA cannot be a the extent a a 60. Id. ployees age Act. 109 S.Ct. at 2861 who retire after McMann, the amend- (citing 434 U.S. at 98 S.Ct. Court held that extent matter, 450). disparity, age-based As a threshold we must ment increased precludes inap- McMann [was] determine whether this rule a rule of “the automatic challenged provisions of plicable.” finding that The amendment at issue in qualitatively improved the 1979 severance the benefits Betts purposes of ADEA. eligible disability to evade the to those available is, tirement, retiring age those before ADEA was enacted on December Thus, change clearly increased the effective in 1967 and became June age-based disparity in available benefits. See Pub.L. No. 81 Stat. (1967). Westinghouse adopted Co., the sev- In E.E.O.C. v. Home Insurance pay plan erance that excluded retirement- (2d Cir.1982), F.2d cited eligible employees in 1960. challenged post-ADEA modifi the EEOC mandatory cation that lowered the retire Westinghouse contends that the district company’s pension plan in the ment subterfuge analysis be- court erred 65 to 62. The Second conclud Circuit identify any post-ADEA cause it failed to pre-Act plan ed that the existence of a provision age-based that increased the dis- arguably complied with ADEA could which challenged parity already present in the post-Act not “validate the modification to plans. argues post-ADEA age-discriminatory introduce new terms.” plan expanded changes pension in the Id. at 259 n. 9. The Betts Court also cited retirement-eligible employees.5 group of County Orange, E.E.O.C. Thus, group employees ineligible for (9th Cir.1988), in chal participation in the full pre-ADEA plan, lenged pension rather expanded also because the severance post-ADEA than its amendments. Partic participation or limited the of re- excluded plan public in the ipation was limited to tirement-eligible employees. is At issue safety employees age under who were post-ADEA expansion whether the Id. at 421. The Ninth Circuit hired. when retirement-eligible class of workers “in- amendments, post-ADEA which held that age-based disparity by creased the caused juvenile added hall counselors to the list of pre-Act the limitation” in the severance eligible employees exempted certain Betts. plans meaning the within personnel age from law enforcement the at 2862. We believe that it does. requirement, pre-ADEA did not convert the The factual circumstances of Betts and the Id. plan subterfuge. at into 423 & n. cases cited therein are instructive. court, According post-ADEA to the modifi Betts, Supreme In the Court held that a may plan into a cations convert benefit pre-ADEA plan provision, which limited dis- subterfuge only they “significant if are ability retirement benefits to those who challenged the at least relevant to discrimi reaching age retired before was insulat- 423; Id. at see also E.E. practice.” natory challenge subterfuge. ed from Inc., Cargill, O.C. v. F.2d n. 4 McMann, (citing 434 U.S. at (10th Cir.1988) (although plan has been 450). noted, however, Court amended since does not claim plaintiff challenged plan’s the the had not challenged pro that amendments relate to rule, rather, age-60 challenged a but had visions; plan amendments do not convert guaranteed post-ADEA amendment subterfuge). into retirees a minimum of of their disabled 30% here, however, post- average salary, final but did not extend EEOC contends changes pension plan, that automatic minimum to disabled em- ADEA in the permitted example, App. 5. For the 1961 Pension Plan ment in the case of location closedowns. early early employees By to take retirement after reach- retirement was available years ing age Appendix employees ages 60 with 10 of service. between the of 50 and 60 Plan, years ("App.”) layoff 1792. Under the 1973 Pension with 25 of service when the resulted ages employees job product between the of 55 and 60 with from line relocation. movement or years early App. retire- of service were entitled employees eligible pension plan became retire- the for determines whether an younger age ment at a in certain circum- employee qualifies participation for in the stances, age-based disparity increased the plan. Thus, severance modifications to the by Westinghouse’s caused severance definition directly affect the availability of plans.6 changes effect of the One has been pay. severance circumstances, Under the expand employees the of older class who therefore, we post-ADEA conclude that the ineligible participation are for full in the pension modifications to the plan increased plans. severance We believe that not all age-based the disparity in the severance pool eligi- modifications which alter the plans plans and that the challenged be employees pre-ADEA ble will convert a as a subterfuge to evade ADEA. plan subterfuge. plan into a A provision changes pool the on a basis unrelated III. age unlikely is to increase the age-based disparity pre-ADEA plan. caused though Even we believe the West See, e.g., County Orange, 837 F.2d at inghouse plans may challenged, we find (amendment adding juvenile & n. hall that under the standards announced eligible employees to list of counselors does Betts, plans qualify for the § pre-ADEA plan not convert into subter- exemption “any bona fide case, however, fuge). post- retirement, benefit such as a pension, changes eligible in the class of em- plan, or insurance which is not a subter ployees clearly age-based. so, are This is fuge to evade the of [ADEA].” not because the actual number older 623(f)(2). 29 U.S.C. It disputed is not employees participation excluded full observed the terms of plans increased, in the severance but and that are “bona rather pro- modifications have they fide” in that exist and benefits. lowered gressively at which older 109 S.Ct. at 2860.7 ineligible become partic- for full ipation While the plans. Supreme in the Court severance believe declined to We de- progressive age-related precise meaning that these fine the changes of “bona fide em- pension plan in the age- ployee retirement, have increased the such as a disparity based pension, caused id. at 2865 n. plan,” or insurance meaning of Betts. See within it stated that the inclusion of the terms Fresno, County Robinson v. “retirement, pension, sug- or insurance” of (9th Cir.1989) (post-ADEA, age-re- gests an enumeration rather than an exclu- change pre-ADEA lated in retirement listing plans sive qualify for the insulated from ADEA challenge); Id. at 2864. The Court exemption. reject- Co., Home Insurance 672 F.2d at n. 259 & test, “age-related upon ed the cost factor” (post-ADEA amendments lowered manda- in Westinghouse II to which we relied iden- tory 62; age pre- retirement from 65 to tify exempt plans, reasoning that the costs ADEA plan cannot validate this modifica- many plans that fall within the listed tion to age-discriminatory introduce new categories do age not increase with the terms). the employee, citing defined contribution pension plans Id. example. significant We do not find it as an this case The Department modifications did not Court noted that a alter of Labor plans directly. regulation, terms of the severance defining employee benefit eligibility definition of retirement provides employees contained as one “which benefits, present challenge increased, 6. While the mounted decreased rather than only EEOC is directed at age-based disparity present Westinghouse’s plan, go it unmentioned should original plan. objected plan provi- had to a earlier severance note, sion as it was amended in 1982. We argued 7. We note that EEOC has not here however, that the 1982 modification to the sev- against designation plans a of the severance as plan, longer erance a modification that is no plans.” employee "bona fide benefit permitted employees issue and that older to pay choose severance between and retirement benefit,8 frequently nonfringe are referred to as and required what older ” enough ‘fringe was broad to to retire involuntarily.9 Westing- workers benefits/ benefits, encompass variety argued that house the district court ruled gardless whether the cost of those benefits against rights EEOC on recall and involun- (quoting age. increased with 29 C.F.R. tary retirement and that further considera- 1625.10(b) Moreover, (1988)). the Court tion of those claims is now barred because “Congress employee stated that left the appeal cross-appeal to or EEOC failed day, legislat- benefit and battle for another judgment. only hiring firing, wages ed as to and and Complaint, In Amended its Second salaries, nonfringe-benefit and other terms claimed that violated ADEA employment.” and conditions of Id. at by, among things, “forcing other laid off employees prior to retire 70 because salaries, wages Unlike and which are available,” pay] was not and [severance contingent job performance, severance “denying employees recall to work to who employee's length is linked to an App. were laid off and forced to retire.” layoff. service and the occurrence of a 39. The district court found that EEOC’s Companies severance establish implicated eight Westinghouse claims em- provide short-term financial assistance dur- ployment plans practices. ing period following the transition layoff. “uph[e]ld at 351.10 The district court Severance are available as a benefit Westinghouse practices, other than denial company who remain with the pay,” of severance id. at and entered specified period. for a judgment “in plaintiff against favor of II, F.2d at In of the broad plan] defendant on the issues [severance employee definition of “bona fide benefit and in favor of defendant and plan” endorsed the Court in ” plaintiff on the other claims.... Id. at must conclude that the are “bona fide employee plans” and thus qualify 4(f)(2)exemption long for the so purpose determining For the whether they are not intended as a obliged appeal cross-ap- EEOC was avoid of ADEA. peal, rights we are satisfied that the recall involuntary claims, retirement as set rejecting cost-justification re complaint, out in alleg- are based on the quirement, the Su edly discriminatory application of the preme sev- Court held that an who Thus, plans. erance to the challenges extent that the plan provision as a district court ruled in favor of proving provi has the burden of EEOC on plan issues, “actually hardly it can sion was intended to serve the said purpose discriminating judgment ruling some nonfr constituted a inge-benefit aspect employment against By of the EEOC on those enjoin- rela claims. ing Westinghouse tion.” original denying Id. at 2868. district severance action, pay workers, court retirement-eligible id., EEOC contended that the to sev see plans against erance discriminated effectively older district court eliminated the respect with rights, upon workers to recall rights basis which recall allegedly standard, I, (5) II, 8. Under the Betts we are satisfied that ment Plan (6) Advanced Retirement Plan right nonfringe to recall is a benefit. "impact process awarding number” special employees benefits to certain laid off (discussing involuntary VII 9. See retire- infra shutdowns, product as a result of location line ment). relocations, movements, (7) job limitation court, actually eligi- eight retirement benefits to viewed the district those 10. As challenged (8) practices layoff, were: ble at time of and limitation of prior (1) death arrangements spouses to retirement pre-July, pensions benefits to for benefits, (2) employees layoff post-July, actually eligible income for the benefits 1982, arrangements pensions layoff for (3) at the time of death. benefits, arrangements income management employees, for at 351. (4) Advanced Retire- allegedly options were denied and older workers available younger employees, to forced to retire. who could maintain rights recall without sacrificing present income or vested retire- Similarly, ruling “against plaintiff However, ment benefits. the severance claims,” the other we think the district plans cannot constitute a for merely reiterating court was its decision to 4(f)(2), post-Betts, unless uphold challenged Westinghouse the other plans intended the to dis- Therefore, practices. dowe not believe against criminate older workers with re- penalized should now be spect nonfringe to a plans benefit failing appeal judgment, to and the rele- had that effect if part, path vant even favored it.11 to that effect is an indirect princi- one.13 It is this IV. ple on which EEOC has focused its conten- tion that we should remand this case for a 1982, retirement-eligible Prior to employ- determination as to whether participation ees were excluded from in the intended its severance impact to ad- plan. They severance could maintain recall versely on rights the recall of older work- rights only by foregoing during all income ers. layoff. Westinghouse stresses all employees rights,

laid-off did recall have however, only and that those who terminat- V. layoff by choosing ed their to status — pension pay lump ceive or immediate sum In view of the foregoing, agree right their to be re- that, —lost Betts, with EEOC a violation of Thus, younger called to work.12 even a the ADEA triggered if fringe laid-off rights by could lose recall designed impact benefit on nonfr choosing lump immediate sum severance. inge employment terms of in an intentional Hence, according Westinghouse, its sev- ly manner, discriminatory if that de erance did not discriminate sign actually had such an effect. See su employees respect older with to recall Indeed, pra note 13. if the trial of the rights. Westinghouse plan were to occur to recognize options day, claiming

We that the with Westing available to older were less desirable than intentionally house had discriminated 1805-06; "[foreclosing up right App. EEOC contends that the Com- to be recalled. advancing arguments mission from these in its 1278-79. favor would create a serious issue as to whether applied retroactively Westing- Betts should be ("a post-Act 13.See 109 S.Ct. at 2865-66 three-part house’s under the test devel- cannot be a ... unless it dis- Huson, oped in Chevron Oil Co. v. criminates in a manner forbidden the sub- 349, 355-56, 106-07 [92 30 L.Ed.2d Act.”); 296] provisions stantive 109 S.Ct. at (1971).” agree We that EEOC is entitled to ("the employee prov- 2868 ing bears the burden of argue its case in of the standards an- discriminatory plan provision actu- nounced in Betts and we have considered each ally purpose was intended to serve the of dis- arguments of EEOC’s in turn. weAs discuss in nonfringe-benefit aspect crimination in some text, however, attempt relation.’’). EEOC is entitled employment Westinghouse engaged in a subter- text, include, principle, This stated in would fuge rights respect to recall when it had course, the intentional use of a earlier, case, throughout unequivo- and has as an economic "disincentive” to continued em- cally Westinghouse’s plans conceded that did Moreover, ployment provid- for older workers. subterfuge. not constitute a See V.§ infra actually ed that such “disincentive" was a sub- terfuge, it would not be a defense for the em- Westinghouse plans, assert, Under laid-off em- ployer Westinghouse, to as did that older ployees eligible who were to receive severance employees "voluntarily” chose their own fate. among 1) options: could choose from three disingenuous fringe- We think it to assert that a lump payment, sixty days sum elected within cannot be a under Betts 2) layoff; weekly payments; 3) simply and because the must take an af- lump payment sum after "voluntary” e.g., electing twelve months. Em- firmative and action — ployees option who chose the first employer's terminated to retire —to effectuate the discrimi- relationship gave natory regarding nonfringe their and intent benefit. through older workers the use of a sion of whether a remand is appropriate. fringe-benefit plan operated to disad- note, outset, We at the that we do not vantage nonfringe benefits of older em- reach a different taking result even -into ployees, undoubtedly EEOC would be enti- present account EEOC’s assertion it tled to introduce of Westing- evidence primarily justifica- went to trial on a “cost design house’s intent and effect that theory. tion” discrimination. v. County Robinson Cf. propriety The in remand a situation Fresno, (9th Cir.1989). 882 F.2d 444 It must, end, such as in governed this so, however, just could do as a result of by specific facts and circumstances of instruction, Betts’ but because a funda- management case. Concerns for the objective mental of ADEA since incep- efficiency of district courts counsel that the proscribe tion has at all times inten- been given district court be the discretion to subterfuge. tional discrimination and See permit, perhaps compel, plaintiff even (1967). Pub.L. No. 81 Stat. 602 forego prosecuting initially every remote EEOC, post-Betts brief, in its claimed complex possible and ground for relief justification” that the lack of “cost consti- easily litigated when one or more fully and argument tuted its main in this case.14 It dispositive grounds If, hypothetical- exist. position though maintains that even neither ly, the district court in the instant case had Order, the Revised Pretrial App. Joint see sought promote efficiency by limiting seq., opinion, 55 et nor the district court proofs permitting EEOC’s EEOC to F.Supp. 343, justi- addressed the “cost pursue only one of Westing- its claims that theory fication” as an issue to be tried.15 discriminatory, i.e., house’s un- great difficulty accepting We have in disparate der either a dispar- treatment or assertion in of the Pretrial Order impact ate theory, presumably would which recited legal EEOC’s issues as: punish by denying now a re- Theories discrimination. pursue mand so that it could the theory Plaintiff will established the viola- [sic] that the court had excluded. tion on this issue use of the collateral doctrine, estoppel direct evidence of hand, On the other if EEOC’s failure to discrimination, disparate treatment pursue grounds all available for relief was theory, disparate impact and/or the theo- product choice, not the of a deliberate made

ry- with, in permission of, concert court, district in promote judicial order to App. economy, inappropriate. a remand would be greater difficulty We have even in under- example, For if simply chose for standing justifica- the lack of “cost reasons, accord, tactical of its own not to tion” argument was EEOC’s main in the pursue grounds for relief that it had al- case, opinion district court’s leged issue, or that the court considered in no reveals discussion whatsoever of that And, issue, certainly, we cannot remand. indeed, if the does not couch its hold- affirmatively ings opportunity in waived its justification,” terms “cost but prove any theory rather terms of of intentional discrimi- discrimination. 632 Nevertheless, subterfuge, may 364-67. nation and it not have a now, post-trial, since EEOC second apple claims that its bite at that now. primary theory on which it tried the case

against Westinghouse Westing- propriety was that of remand turns then justification,” house’s lacked specific “cost on the surrounding circumstances we will consider that claim our discus- forego EEOC’s initial proof decision to EEOC, Supplemental Appellee, very paragraphs opinion Brief of 15. A few in our (”[T]he filed II, November 1989 at EEOC Westinghouse 869 F.2d at discuss “cost justifiably presented argument as its main justification,” concluding Westinghouse’s layoff this case that plans were plans exempt were not by they shielded § were 4(f)(2), 623(f)(2). § 29 U.S.C. § cost-based."). subterfuge. intentional discrimination and within meaning 29 U.S.C. We turn to an examination of the record on 623(f)(2).” App. 84.16 this issue. The Revised Joint Pretrial Order also Complaint, In its First Amended Westinghouse’s identified as issue number 1, 1980, charged that since least at June question 10 the whether EEOC could satis- thereafter, continuously Westinghouse, and fy persuasion its burden of Westing- facilities, Pennsylvania at willfully intentionally house against discriminated employment policies maintained unlawful employees on whose behalf EEOC now 4(a) practices in and violation of App. sues. specifics 86-87. The of issue including “denying ADEA recall to work to 10 in revealing number that order are employees who were laid off and forced to present question of the before us as App. language retire ...” 26. This same to whether EEOC can now seek to re-liti- appears also in EEOC’s Second Amended gate originally required issues proved to be Complaint, goes which on to state that: and on Westinghouse and EEOC policies The practices effect and went to trial. Issue number 10 reads: complained paragraph of in 7 above has Whether the EEOC can meet its burden unlawfully deny employees been to its persuasion, by preponderance of the LIB, benefits, pay, seniority back evidence, credible Westinghouse in- rights, rights recall and otherwise ad- tentionally discriminated the em- conditions, versely terms, affect their ployees on whose behalf the EEOC sues privileges employment, or status as ages; on account of their specifical- more employees, employees’ because of such ly, prove: whether the EEOC can ages. (a) age was a determining factor added). App. (emphasis 39-40 the denial of benefits to the The Revised Joint Pretrial Order also sues; on whose behalf the EEOC that, among included EEOC’s statement (b) alleged discriminatory con- things, rely other EEOC would on recall duct, any, if purposefully was committed testimony prove intentionally; “policy practice in July and/or effect since (c) by that the reasons articulated West- App. seq. 1979” ADEA. violated 55 et inghouse for its pretexts conduct were same order contains as a statement of facts discrimination. provided Westinghouse, Westing- “[t]he App. 86-87. [Layoff LIB house Income Pro- Benefit] gram adopted was neither nor amended for only Not were intent and purpose evading purposes of the issue, generally put but Revised App. ADEA.” required Joint Pretrial Order that for each Westinghouse’s plans, EEOC had to Moreover, listing after all of its collective prove discrimination and intentional subter- bargaining agreements with the various Indeed, fuge. App. 84-87. as we have representing Westinghouse employ- unions observed, earlier an examination of the dis- ees, pursuant Westinghouse to which opinion trict court reveals that EEOC had negotiated, see, 72-75, e.g., App. sought all of the issues framed Westinghouse “[pjursuant stated that to its Order, including, the Revised Joint Pretrial bargaining agreement vari- collective to, disparate unions, but not limited treatment and ous maintains and disparate impact. acts in observance of the terms of a bona Although only 364-67. LIB seniority system.” App. Westing- fide appeal, is involved this we make mention legal house further included as its issue of the additional and the identical number “whether them, Layoff empha- Income issues in connection with and Benefit Plans are bona intent, fide size that these issues of discrimina- and not subter- fuges tion, legitimately to avoid the could not 16. See also 85-86. App. Having in responsibly App. have been overlooked 2192.17 conceded that West- proofs.

presentation inghouse’s plans designed of EEOC’s were not as a subterfuge purposes to evade the Indeed, do not believe that these is- ADEA, principle that we know of no would of EEOC’s sues were overlooked permit now EEOC to rescind or withdraw case, significant a theory of the permit that concession or that would now indicating that aspect appeal, of this EEOC again attempt prove EEOC to once a subterfuge, the issue of had not overlooked (subterfuge) fact that it had conceded five Westing- is that itself admitted that EEOC years earlier did not exist. house’s did not constitute subter- VI, fuge. Westinghouse interroga- explain, had served As we will see Part infra EEOC, sought exaggerates tories on one which the extent to which Westing- law, least, changed EEOC’s contention as to whether or at Betts subterfuge constituted a house’s underestimates the extent to which it was interrogatory events, evade ADEA. The read as presaged. years At all it five was follows: ago challenged Westing- being intentionally house discrimi- plaintiff contend that either the Does natory, trial and went to with intentional Plan Pension and/or (as subterfuge) well as discrimination iden- Agreement Pension and Insurance be- App. tified as relevant issues in the case. Corpora- Westinghouse Electric tween 26, 39, 2192. EEOC at that time was ex- the International Union of Elec- tion and introduce, trial, pected to at that all evi- trical, Workers, Machine as in Radio and prove Westing- dence available to it to during period effect the time relevant to house intended to discriminate its action, the instant constitute a subter- older workers as to severance re- fuge to evade or avoid the rights. call That Betts now furnishes a Age Employment Discrimination subterfuge definition of under § so, (a) specifically identify Act? If fringe which includes a circumstance where portions

portion or of the Plan and/or discriminatory impact benefits have a involved, (b) Agreement are which set nonfringe-benefit aspect on some of em- specifically forth and in detail each and ployment, any does not alter the fact that every upon plaintiff fact relies to discrimination, including form or manner of claim; (c) support identify its each fringe-benefit plan use of a to discriminate every upon sup- document relied nonfringe aspects employment claim, as to title, date, port listing au- has, above, relationship, always as noted thor, and custodian. Hence, prohibited by been ADEA.18 App. 2192. evidence that EEOC seeks to introduce now responded with this answer: very on remand is the evidence that EEOC expected Plaintiff does not contend that the sub- would have been to introduce un- ject Agreements theory Plans and constitute a der its of the case in 1984.19 EEOC subterfuge pur- required to evade or avoid the to await Betts’ instruc- poses Age of the Discrimination in Em- tion as to intentional discrimination or sub- (“ADEA”). could, ployment terfuge Act prove, order to if it discuss, VI, argument, infra, 17.At oral counsel for EEOC ac- 18. As we §in Betts made no knowledged showing that a significant change requisite in the law or in the quires showing of intent. proofs respecting of intent discrimination or you prove Question: Do have to an intent to subterfuge. you prove discriminate or do have to a subter- fuge; and is there a difference between the dissent, again advocating 19. The once a re- you What do two? have to after Betts ? mand, ignores the substance of our review and using Answer: A after Betts is ... analysis pleadings and Revised Joint Pre- with the intent to discrimi- supra trial Order that controlled the trial. See nonfringe-benefit aspect nate in a of the em- V.§ ployment relation. Tape Argument, October of Oral

631 sues were delineated the Revised Joint intended to discriminate Westinghouse stemming Pretrial Order from EEOC’s against older workers. complaint. App. seq. 1984 55 et That or- Yet, evidence it is clearly der reveals that intentional discrimi- seeks intent” that EEOC “fringe/nonfringe by nation and were considered years of remand after 10 develop to on EEOC and as fundamental West effort to litigation in its issues in the case—issues EEOC was intentionally its 1979 sever inghouse used obliged prove by by whatever means and to adversely the recall plan to affect ance evidence it could muster. The whatever However, a rights of its older workers. to fact that EEOC did not choose introduce development of the additional remand for discriminatory intentional con- evidence of only under those should be afforded record ostensibly that evidence was duct when court the district circumstances where it, to and that it conceded that the available findings, relied on requisite failed to make subterfuge, plans did not constitute see standard, improperly ex legal an incorrect supra pp. cannot excuse this omis- evidence, in other rare circum or cluded sion. stances, presented have been none of which sum, position in no at this EEOC is See, appeal. e.g., E.E.O.C. v. in the instant stage lengthy proceedings to re- of these Electric, 715-16 869 F.2d at litigate the trial court in order to turn to cases). J., (collecting (Garth, dissenting) the self-same matters that it could and litigated initially. have should not be ordered A remand should apple” would be when “two bites who, circum litigant given to a YI. bar, neglected such as those at has stances however, argues, a re EEOC support a desired produce evidence to proofs per should be mand for additional has, therefore, carry failed to finding and when, to the trial of a subsequent mitted particular issue. requisite burden as to a authority appeared. has proceeding, new principle has apple

Id. The “twice bitten” argument examine this We dissent, in a fo only expression found not change “a drastic proposition EEOC’s in an earlier cused on willfulness and filed [parties] to in the law ... should ... enable case, id., it also in this same but opinion upon remand.” reopen issues raise expression in other contexts.20 has found Rehearing at 14. Petition for EEOC, “drastic Here, out, effected such a point had full claims as we change.” contends that the estab produce at trial to opportunity to evidence litigating those matters principle of support its claim of and dis- lished have, have, litigat- Indeed, it or could very these is- which should criminatory intent. See, plaintiff] apple therefore rest on e.g., Telephone v. ... must [the Northwestern Indiana FCC, 465, (no (D.C.Cir.1989) .”); [prior sec 872 F.2d 471 in the .. trials] the evidence adduced opportunity comply with ad ond afforded to Secretary Health and Human Ser- v. Szubak vices, requirements exhaustion ministrative Cir.1984) (claimants (3d 745 F.2d 834 efficiency and fairness values served "[t]he opportunity only be afforded one fair should principles seriously would be com exhaustion any eligibility for benefits under demonstrate agencies obliged promised if to furnish otherwise “[a] one set of circumstances because denied, apple.”), at the cert. such second bites might tempted to withhold medical claimant - -, 110 107 L.Ed.2d 773 U.S. S.Ct. introducing reports, all relevant or refrain Lane, (7th (1990); Phillips v. F.2d 215 evidence, ‘obtaining another with the idea of Cir.) (as argument a waiver of in habeas Secretary apple’ if the decides that bite of the corpus proceeding, petitioner "is not entitled disabled.”); Baroid Division the claimant is not apple a windfall endless bites at the same or to Safety Occupational and Health Review judge’s chance because of the district second (10th Cir.1981) (re- Comm’n, denied, issue”), cert. error on another opportunity provide for the mand Secretary (1986). L.Ed.2d get apple bite at the a second States, Pittsburgh Press Club v. United also attempting abate- a feasible method of to show (3d Cir.1978) (remanding pre but F.2d attempt to show at the first he did not ment that cluding reopening evi record for additional hearing). "having dence because had two bites from January 1984. 725 F.2d at 211. Trial applicable here where an ed at trial is i.e., Betts, authority, al- intervening the District Court for the Eastern before per- legal landscape. We are not Pennsylvania tered the District of the issues by argument. suaded this Septem- here did not start until we review 6, In App. light 1985. 7. of the issues ber out, First, Westinghouse points dis- as prescribed in the Revised Joint Pretrial Or- rights always in recall has been crimination der and in of our I ADEA, and EEOC’s Sec- deemed to violate put on opinion that had to have Complaint, early as Amended filed ond notice that the issue of consti- very complaint on which October 1984—the disputed tuted a issue of material fact alleged recall parties to went trial — Westinghouse’s purpose quiring proofs of by Westinghouse rights as a discrimination motive, or EEOC cannot be heard at this Moreover, as read violation of ADEA. we juncture drastically to claim that Betts Betts, does no more than confirm the Court changed regarding subterfuge the law any subterfuge or intentional discrimi- nation, intent. including discrimination charged by whereby employer’s an Third, though Westinghouse even I ac- plan benefit to discrimi- to utilize cepted justification theory, the cost we are against older workers as to the nonfr- nate persuaded rejection that the of Betts aspects em- inge-benefit worker’s justification upon theory cost which —the ployment, the ADEA. As we will violate pinned its case—was EEOC claims have earlier, principle of intentional noted presaged at least one other court subterfuge, no matter discrimination and cast on the which had substantial doubt take, always that it been the form justification” merits of “cost even earlier Thus, proscribed by ADEA. we do not filing complaint.21 than the of EEOC’s any recognize that Betts introduced new Thereafter, during the course of the of, of, concept proof or enforcement case, litigation of this but before ADEA violations. other courts had taken same direction.22 justifica- eliminate “cost While Betts did discussing analogous In a case an con employers to show that tion” as a basis discrimination, cept voting but in a con fringe-benefit plans were not subter- their text, the Fourth Circuit refused order 4(f)(2), fuges within it did not alter the when, remand for further evidence after underlying

basic issues involved subter- the district court had decided I, fuge analysis. 725 plaintiffs on the merits and held that the 1, 211, supra F.2d see note we noted the at-large system voting did not violate Westinghouse’s intent or mo- relevance amendments, the fourteenth or fifteenth subterfuge. tive to a claim Supreme City Court decided Mobile approving justifi- cost Even while EEOC’s Bolden, 55, 1490, v. 446 U.S. 64 holding theory as a basis for cation (1980), purportedly L.Ed.2d 47 under LIB did not fall within the § holding. cut the Washing district court’s specifically exemption, 725 F.2d at (4th Finley, ton v. 664 F.2d 925-26 issue with observed Cir.1981), denied, cert. respect Westinghouse’s earlier 1976 LIB (1982). Judge 73 L.Ed.2d disputed was “a issue of material S.Ct. Phillips, writing court, Washington fact” because record silent as for the “[t]he [was] remand, Westinghouse's purpose stating in addressed the motive” issue adopting plan. at 224 n. 725 F.2d that:

Second, assuming I Westinghouse was decided division within the th[e] 29, 1983, and December was amended on Mobile Court that there was sufficient (9th Cir.1988); F.2d e.g., 422-23 Crosland v. Charlotte Ear and See, Eye, County, (4th Cir.1982). 686 F.2d Throat 226-27 E.E.O.C. v. Hosp., Maine, (D.Me.1986), (1st Cir.1987). 823 F.2d 542 aff’d, e.g., Cargill, E.E.O.C. See, Inc., (10th Cir.1988); Orange E.E.O.C. v. point plan effectively our uncertainty on the warrant com- practical inquiry pelled involuntary into the fairness of hold- retirement of older em- ing proof 4(f)(2). to the deficiencies of plaintiffs ployees, in violation of While the revealed, we nevertheless think that now Rehearing grant- Petition for Panel that we here is not warranted. Plaintiffs remand wholly upon request ed is centered EEOC’s all the evidence presumably adduced prove discriminatory for a remand to in- to them at the time to available tent, previous- we cannot overlook issue disproportionate impact under the Zim- us, ly urged upon but that was not a sub- Certainly they mer criteria. must ject Rehearing. of the Petition for opportu- fair held to have had a full and 4(f)(2)provides employee- an Section so, obviously they nity to do since knew plan benefit is not a to impact or effect must that such an be exempt, except evade ADEA is that “no established as an essential element of seniority system employee-benefit such or They must also held to these claims. be plan require permit involuntary shall or the proof could have understood that any retirement of individual ... because of establishing in only inferential force have of such individual.” U.S.C. if other inferential or purpose, and that 623(f)(2). Congress prohibi- added this § available, proof purpose were it direct 4(f)(2) 1978, tion to in Pub.L. No. § highly perhaps too would be relevant and response 92 Stat. in to a Bureau § to the inference based needed buttress study of Labor Statistics revealed may alone. While upon effect Mobile by private of the workers covered 41% explicit have made more the absolute pension plans subject mandatory to other, independent need evidence of for provisions. S.Rep. retirement No. need, purpose, say we cannot that the Cong., reprinted 2d Sess. 95th in certainly helpfulness, such or Cong. & Admin.News U.S.Code not been reason- evidence could have Congress raising upper concluded that apparent ordinarily prudent ably ADEA from to 70 age limit under litigating counsel these claims. empty gesture employees if “would be an This, think, is determinative we mandatory subject remained retirement suggestion requires that fairness provisions contained collec- mand of Mobile. agreements employee bargaining tive or added). (emphasis Id. at 925-26 plans.” too, here, regard we do not So Betts having change plans made such a in the law not contain do proscribing provisions. intentional discrimination and mandatory retirement EEOC contends, however, should have a sec- options that the avail- opportunity retirement-eligible ond on remand to plans under the left able have, intentional discrimination it should or employees no real choice other than with have, proved initially. as the retirement, could Just to con- and that this amounted in Washington, Fourth Circuit held we can- discharge. Westinghouse claims structive say that in this case the need for such employees plans permitted older reasonably evidence could not have been i.e., options: choose between lawful resourceful, apparent prudent, to a and ex- layoff plan, unpaid retirement or the 1979 litigant perienced such as the EEOC. plan, rights, recall and under the 1982 with pay or with recall retirement

VII. Thus, according Westinghouse, rights.23 require or involun- permit issue remains for our de did not One more tary retirement. EEOC has contended that termination. plan Although challenged in this chewed discussions of the 1982 the 1982 is not appropriate put Rehearing, opinion, to rest we deem it the Petition for issue involun- involuntary tary originally retirement as it was raised the issue of retirement respect plan. and 1982 with the raised with to both the 1979 also raised in connection Thus, although part plans. most we have es- Congress require intend such a choice cannot said to or

We do not believe that 4(f)(2) involuntary ed to reach circumstances like permit retirement within the op had the these where laid-off meaning of ADEA.27 forego and remain tion to retirement suggests mis- company layoff awaiting while recall.24 options led older their workers about Geographic Cf v. National Henn . pressured them to choose retirement bene- (7th (exist Society, Cir.) 819 F.2d fits over severance with recall. How- early ence of retirement does not vio ever, by Westinghouse, conduct such even provided late ADEA on the EEOC, proved by if it does had been job may offer and continue to decline that the terms of the demonstrate sever- work), denied, cert. ance violated 29 U.S.C. § (1987). Rather, 454, 98 L.Ed.2d 394 requiring permitting involuntary retire- 4(f)(2)proscribes employ think the use of ment. The short of it is that the test for forcing means of older ee benefit as a “involuntary extremely rig- retirement” is job. Syn workers off the Bodnar Cf. orous, it is not met here. (5th Cir.) (em Inc., pol, early ployer’s offer of retirement cre VIII. prima if ate facie case of discrimination record, has failed to On EEOC estab- sufficiently quo each it alters status Westinghouse’s plan lish that 1979 has vio- facing employee choice makes him worse ADEA, challenged lated and it has not offer), denied, off than he was before cert. Westinghouse’s plan 1982 in the instant 260, 102 908, 109 488 U.S. S.Ct. L.Ed.2d 248 Having Petition. concluded that EEOC is (1988). The choice retirement and between yet not entitled to a remand for another unpaid layoff rights recall with does not opportunity where, involuntary constitute retirement as plan 1979 was a to evade the here, layoff the employee’s status was un ADEA, judgment we will reverse the en- age.25 Henn, related to 819 F.2d at 829 Cf. against Westing- tered the district court (pressure to choose retirement and between house and remand the district court with employment continued not does make the direction that the district court enter involuntary choice unless terms on which judgment in favor of on all employee job would remain on constitute a ADEA). party EEOC claims. Each will bear its of violation own costs. Nor do we believe exclusion from plan employees the severance caused older HIGGINBOTHAM, Judge, Chief to retire. Those who retired did so because concurring part dissenting part. in in they Moreover, were laid off.26 after join I in Parts and Part of retirement-eligible employees could I-IV VII the choose however, opinion. must, majority between retirement benefits and I plan spectfully majority’s with recall. We dissent the believe that a from hold- provides employees ing laid-off opportunity with that EEOC has waived the According Westinghouse, early the choice be- under ADEAin order to receive retirement layoff tween employee retirement and was a viable one. benefits. We noted that was Westinghouse points charging party presented out that the with "little more than a 'Hobson’s case, Slackway, opted choice;”’ in this Charles to remain sign he could either the waiver to unpaid layoff rights with recall rather than unpaid layoff. receive benefits or face Id. at express opinion retire. We no on this matter. 524. The issue was whether and under what employee’s circumstances an decision to waive contended, rights voluntary, was id. at not 25. EEOC has in its amended court, complaint participation whether exclusion from in a sever- or in its briefs to this lay plan, employees age. ance which left laid-off decision to off was related to with layoff, of choice retirement or continued required permitted involuntary retirement. Coventry 26. Our decision in v. United States (3d Cir.1988), Corp., Steel EEOC, 856 F.2d 514 cited case, 4(f)(2), inapposite. is In that an 27.For text of 29 U.S.C. required sign 623(f)(2), rights was supra waiver of his see note 4. determining for whether regarding West- The standards further evidence to adduce engaged age-based employer has adopting the motivations inghouse’s are borrowed employment discrimination light of the new stan- LIB Plan in jurisprudence, see Massar from Title VII Employees Re- Public enunciated dards Corp., Motors sky v. General Betts, v. System Ohio tirement of denied, cert. (3d Cir.1983), (1989). 106 L.Ed.2d 348, 78 L.Ed.2d 314 U.S. majori- Specifically, I take issue (1983). proceed under Plaintiffs trial, that, at the time ty’s assumption disparate treat two theories. Under the responsi- adequate notice of had discrimination, plaintiffs theory ment evidence all bility to introduce available discrimi must demonstrate intentional not a “subter- challenged employer is, that an ex nation; ADEA. fuge” to evade age-based standards in pressly applies Betts colleagues, regard I my Unlike employees. See id. its treatment enough change a substantial representing [emphasis dispar Under the added] lightly deny law that we should discrimination, theory impact ate further adduce opportunity must that an em plaintiffs demonstrate or not the on the issue whether evidence facially application neutral ployer’s subterfuge to discrim- LIB was a adversely disproportionately and criteria respect to workers with against older inate employees, and cannot be affects older layoff. right to be recalled their necessity. justified by business change in significant represents a Betts Corp., Electric law, it narrowed not so much because (E.D.Pa.1986), 364-5 aff'd. subterfuge, the definition refined (3d Cir.1989), vacated part, 869 F.2d 696 the allo- significantly it altered but because remanded for reconsideration and parties in an the proof of between cation Corp. Betts, Westinghouse Electric v. held that Supreme The Court case. ADEA — EEOC, —, 110 107 U.S. S.Ct. 4(f)(2) liability under not a defense to is § (1989). met its ini Once EEOC 7 L.Ed.2d ele- “redefines the ADEA rather but the by establishing a production tial burden case.” plaintiffs prima facie ments (estab of discrimination prima facie case Thus, employ- an 109 at 2868. of the evidence lishing by preponderance provision of a benefit challenges a ee who determining factor in the age was a the plan under the ADEA burden “bears decision) proof employment the burden provi- discriminatory plan proving that the the defendant. switched to production to serve actually was intended sion Corp., Motors Massarsky v. General See nonfr- discriminating in some purpose of cert. de (3d Cir.1983), 118 F.2d 706 employment rela- aspect of the inge-benefit nied, 78 104 S.Ct. 464 U.S. Id. tion.” (1983). the burden 314 While L.Ed.2d change is made significance plaintiff, The persuasion remained with pre- when one contrasts a rea required evident to articulate was defendant time post-Betts landscape. at the its nondiscriminatory reason for sonable trial, a three- there was went to statu provides this case several actions. provided the proof employer part allocation of tory exceptions which the district employer is able escape liability framework within if the legal may at policy adduced falls within considered the evidence its demonstrate court Employ- Westing Manual on EEOC v. Richey, exceptions. See trial. C. of the one (citing Trans house, and Civil Law F.Supp. at 365 Discrimination 632 ment Thurston, Airlines, Federal Courts Inc. v. in the Actions World Rights (1985)). ed.) Center, A (Federal 83 L.Ed.2d Jan. Judicial trial, Westinghouse chose invoke opinion follow- district court’s At review employee benefit of the 1985 “bona fide provides snapshot ing trial § v. Home Ins. defense. plan” time the dis- pre-Betts landscape. At that (2d Cir.1982); Co., F.2d explained: trict court Airlines, (5th plaintiff. Thus, Eastern F.2d Cir. with the an ADEA 1981)(employer proving plaintiff had the burden of required was to show either that age-based fall actions within the was a determinative factor the em- 4(f)(2) exception). decision, ployer’s Bailar, see Smithers v. (3d Cir.1980), 897-98 or that time, proof At that the allocation of un- employer’s policy discriminatory was der the ADEA would have allowed EEOC on its Massarsky, face. 706 F.2d at 119. opportunity to discredit the evidence evaluating After all of the evidence supporting Westinghouse’s 4(f)(2) de- presented trial, at the district court found showing fense that the reason offered that EEOC had met its burden of establish- VII, pretextual. “As under Title ing intentional discrimination because it plaintiff pretext ‘directly by per- show ably demonstrated that ex- suading discriminatory the court that a rea- pressly applied age-based standards its likely son more than not motivated the employees. treatment of employer indirectly by showing that the employer’s proffered explanation is unwor- I Westinghouse's find that denial of ” thy Employ- of credence.’ Manual on pay severance take who discrimination, 21, (citations ment Discrimination age-based retirement is omitted). programs Defendant’s [citation omitted] give employees eligible who are for re- however, any point, It was never at nec- practical tirement no choice but take essary EEOC rebut retirement forego benefits and severance defense that the fide bona pay. Therefore, receipt of not a simple for the reason that upon is conditioned non-retirement sta- Westinghouse did not make a sufficient tus, and laid off workers are treated showing to raise even an inference differently age. on the basis of EEOC v. favor. The district court concluded that Westinghouse, at 366. Westinghouse had not established the sec- ond and third elements of the defense.1 As Having pre-Betts now recreated the land- know, we now the district court’s decision scape, it is clear to me that the lack of challenged plans were not a bona presented by evidence the EEOC as to fide benefit was based on a rationale whether or not the were a subsequently directly that was overruled to evade the of the ADEA can Westinghouse, Betts. EEOC v. 632 only expected. have been Within this con- Regarding at 368. the third ele- text, as deduced from the district court ment, subterfuge, reject- the district court opinion, it is majority’s also clear that the Westinghouse’s argument ed that the assertion that “the evidence that EEOC could subterfuge they not be a because seeks to introduce now on remand is the pre-existed the ADEA. The district court very evidence that would EEOC have been reasoned that McMann did not insulate expected theory to introduce under its post-Act modifications of benefit the case in 1984” is an incorrect assess- such as the ones at issue here. More- Id. ment of what occurred at trial. See over, the district court concluded that Maj.Op. at Contrary majority’s to the “[p]ost-Act prior reaffirmation of discrimi- view, analysis, my pleadings the defendant’s, natory practices, such as ... the Revised Joint Pre-Trial order reveal amounts to the Act.” evasion of only had EEOC intentional Notwithstanding proof the burdens of subterfuge. discrimination not Absent 4(f)(2) regarding exception, the the ulti- some showing part credible on the of West- persuasion inghouse mate bürden of was at all times challenged plans that the were a defense, establishing (1984); company Co., 490, In a a Smart v. Porter Paint 630 F.2d (7th Cir.1980); had to demonstrate the existence of three ele Caterpillar Gonsalves v. (1) company Co., 1065, (7th ments: the Cir.1980), must have been observ Tractor 634 F.2d terms; (2) ing the of a bona fide retirement cert. denied 451 U.S. 101 S.Ct. (3) plan; (1981); which is not a to evade the L.Ed.2d 312 EEOC v. Baltimore & O.R. Co., Westinghouse (4th of the ADEA. Cir.1980), EEOC v. 632 F.2d cert. (3d Cir.), Corp., Electric cert. denied 454 U.S. 102 S.Ct. 70 L.Ed.2d 98 (1981). denied U.S. 105 S.Ct. 83 L.Ed.2d 38 only the law of a come relevant when the employee benefit bona fide purposes of the subterfuge to evade the circuit is reversed.

ADEA, obliged to was not show EEOC Therefore, disagree I waived EEOC scheme, plan, “a employed produce regard- evidence opportunity pur- evade the artifice” to stratagem, or ing subterfuge. parties Fairness to the using a bene- ADEA poses matter be remanded to the dictates Betts nonfringe-benefit. See fit to affect opportu- give court to both sides an district Air (quoting United at 2863 109 S.Ct. evidence, in nity put on view of new 192, 203, McMann, Lines, v. Inc. landscape about the (1977)). 444, 450, 54 L.Ed.2d LIB actual effect the 1979 now, hindsight, with 20/20 To back look plants, affected and West- workforce have say presented that EEOC should adopting inghouse’s motivations for these evidence, regarding an issue that rebuttal disputed that plans.2 It cannot be managed to make had not many years litigation has consumed too showing that it reasonably credible even a many recognize I that the and too dollars. issue, simply truly an is unfair. lengthen I here would suggest remand great majority significance attaches The already protracted case. But we must nev- Westing- negative answer to a to EEOC's forget deciding er that we are matters questioned which interrogatory house great importance to individual economic pension contended whether EEOC injury for who suffered an victims subterfuge. plans constituted recompensed. It they are now never hand, I, do at 630. on the other Maj.Op my opinion they should not is suffer to a importance to an answer not attach judges change the rules of because the context of the question taken out of Thus, I quarter. in the dissent. game third majority it then existed. law as placed position— EEOC in a “Cateh-22” offering is now foreclosed it did not offer

proof it was proof presented at a time when something that it opportunity to do with an BANE, Appellant F. Thomas fact, required to do. legally was not view, interrogatory is my aggres- only a demonstration of striking NETLINK, INC. strategy. Had pre-trial sive No. 90-1417. interrogatory affirmatively, sponded Appeals, to assume the burden required then Court United States demonstrating subterfuge, burden Third Circuit. required to as- legally was not which it Third Circuit Submitted Pursuant sume. 12(6) Rule case will invari- The lead result Nov. more, costly, aggres- more and ably to 31, 1991. Jan. Decided strategies litigation pre-trial sive where required spend thou- will be adversaries spaces hours on the interstitial sands of and be- not relevant when asked are acknowledges

2. The 106 L.Ed.2d majority opinion that Con- necessary (1989), legislative action is gress recently amended congressional pass- Specifically, Benefit intent in original the Older Workers Betts. store the Act, reimpose Age ing amending the ADEA amended Discrimination Protection justifi- (29 employer Employment to offer cost U.S.C. et Act of 1967 burden age-based employment prohibit decisions. seq), discrimination cations which was to provides, part: Public Law 101-433 benefits workers in all older employ- that, age-based except reductions in Congress as a of the when finds result significant justified by Supreme are Court in Em- ee Public decision System ployees cost considerations. Retirement Ohio

Case Details

Case Name: Equal Employment Opportunity Commission v. Westinghouse Electric Corporation

Court Name: Court of Appeals for the Third Circuit

Date Published: Jan 31, 1991

Citation: 925 F.2d 619

Docket Number: 86-1226

Court Abbreviation: 3rd Cir.