# Petition for Writ of Certiorari — Continental Can Co. v. Gavalik > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385011_2117%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 1987 - **Citation:** 484 U.S. 979 ## Text IN THE JOSEPH F. SPANIOL, JR, CLERK Supreme Court of the Gni OCTOBER TERM, 1986 CONTINENTAL CAN COMPANY, Petitioner, v. ROBERT GAVALIK, et al., Respondents, -and- CONTINENTAL CAN COMPANY, a member of The Continental Group, Inc., Petitioner, V. ALBERT JAKUB, et al., on behalf of themselves and others similarly situated, Respondents. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT JAMES D. MORTON SAMUEL W. BRAVER BUCHANAN INGERSOL, P.C. 600 Grant Street Pittsburgh, Pa. 15219 (412) 562-8800 Of Counsel: DANIEL M. CARSON Associate General Counsel Continental Can Company 800 Connecticut Ave. P.O. Box 5410 Norwalk, Conn. 06856 EUGENE L. STEWART Counsel of Record TERENCE P. STEWART GEERT DE PREST WILLIAM A. FENNELL VINCENT J. BRANSON STEWART & STEWART 1001 Connecticut Avenue, N.W. Washington, D.C. 20036 (202) 785-4185 Attorneys For Petitioner 6S etree RR RAR I NEI TERRE A RENE EN ATI AN ER AARNE PRESS OF BYRON S. ADAMS, WASHINGTON, D.C. (202) 347-8203 QUESTIONS PRESENTED 1. In enacting section 510 of the Employee Re- tirement Income Security Act of 1974 (““ERISA’’), 29 U.S.C. § 1140, did Congress intend to prevent an employer from enforcing a provision in a collective bargaining agreement to arbitrate any pension-related differences? 2. When ERISA, 29 U.S.C. §§ 1001 et seqg., both preempts state regulation of pensions, 29 U.S.C. § 1144, and sets no statute of limitations for section 510 claims, 29 U.S.C. § 1140, should the Court: a) set a uniform federal period of limitations as in DelCostello v. Teamsters, 462 U.S. 151 (1983), or b) select: a uniform federal characterization for the most analogous state period of limitations as in Wilson v. Garcia, 471 U.S. 271 (1985), or c) apply Pennsylvania State law? 3. In a mixed-motive discrimination case: a) Does the Third Circuit’s ‘‘a determinative fac- tor’’ test for causation conflict with this Court’s “same decision” test in Mt. Healthy Board of Education v. Doyle, 429 U.S. 274 (1977)? b) Can a defendant employer be denied its en- titlement to defeat liability in the class phase of a discrimination case by proving that the same decisions would have been made as to all members of the plaintiff class absent the proscribed factor? c) When the plaintiffs at trial limited their claim to layoffs and the district court found that the same employment actions would have occurred in any event due to permissible reasons, did a Third Circuit Panel err when it found that pension avoidance was ‘‘a determinative fac- tor”, held that a ‘“‘plan” constituted a per se violation of section 510 of ERISA, 29 U.S.C. § 1146, and found that recalls were included within the suit? iil THE PARTIES This statement is submitted pursuant to Rule 28.1 of this Court. Robert Gavalik, Frank Grelo, Joseph Urban, An- thony Ulyan, Donald A. Berger, Ronald Clarke, Henry Foster, George Patterson, Joseph Keller- man, Robert Pavlik, Phillip Farley, Thomas Riley, Thomas Warren, Francis Humenik, Albert J. Jakub, Fred Cipriana, Jr., Anthony J. Bernardo, Thomas A. Mulligan, William T. Tarr, Donald W. Roberts, Ernest Wirbecki, George W. Stepanic, Alfred Berrelli, Jr., Michael Di lorio, Anthony Folino, Thomas E. Johston, Robert Kapolka, John C. Kincel, Peter A. Rumain, Harry H. Smith, Melvin J. Smith, Jack A. Stull and Ernest B. Taddeo - Continental Can Company, U.S.A., a member of The Continental Group, Inc.! ‘The Continental Group, Inc. has been merged into Kiewit Continental Inc. whose parent companies are: Kiewit Holdings Group, Inc., Kiewit U.S. Co., Peter Kiewit Sons’ Inc. Subsidi- aries (except wholly-owned subsidiaries) and affiliates of KMI Continental are: Altradec AG; Anlage und Handlesgesellschaft mbH; B.V. Handeis-Maatschappij v/h Kortman; B.V. Leeuwen- brug; B.V. Metallwarenfabriek Drenthina; B.V. de Vereenigde Blik Fabrieken; bebo Plastik Verwaltungsgesellschaft mbH; bebo- Plastik GmbH & Co. KG; Beleggings-Maatschappij Zaandijk B.V.; Brasflor Commercio E Industria de Subprodutos de Maderia, S.A.; Braskraft S.A. Florestal E Industrial; CCL Industries, Inc.; CWC Leasing, Inc.; Cobelplast (U.K.) Ltd.; N.V. Cobelplast S.A.; N.V. Cobelplast Trading, S.A.; Continental Can Canada, Inc.; Continental Can Company of Europe B.V.; Continental Can Eu- ropean Industries, N.V.; Continental Can Hong Kong, Limited; Continental Can Leasing Company, Inc.; Continental Can Ni- geria, Limited; Continental Can Saudi Arabia, Ltd.; Convertidora iv (footnote continued) Venezolana de Papel, S.A.; De Clerck N.V.; Desmacon Holding B.V.; Dominguez & Cia. Caracas S.A.; Dominguez Continental, S.A.; Doosan Continental Can Manufacturing Co., Ltd.; N.V. Schuybroek; Elbatainer France; Elbatainer (U.K.) Ltd.; Elbatai- ner Kunststoff und Verpackungsgesellschaft GmbH; Europem- ballage B.V.; Europemballage GmbH; Extruplast AG; Fabrica Boliviana de Envases, S.A.; Industrias Del Norte, S.A.; Jeddah Beverage Can Making Co., Ltd.; La Societe Francaise de De- veloppement de la Boite-Boissons‘SOFRED S.A.; Lubeca Mas- chinen und Anlagen GmbH; MPB Foliengesellschaft mbH; Maatschappij tot. vervaardiging Van “DUCATT” Verwarmings En Kookapparaten B.V.; Machinenverwertungesellschaft mbH; Metaalwarenfabriek Pielkenrood B.V.; Metalurgica Matarazzo, S.A.; P.T. United Can Company Limited; Qualiplus USA, Inc.; RFG Recycling-Fordergesellschaft fur Getrankedosen mbH; SIA Handelsgesellschaft mbH; SLW-Versicherungsdienst GmbH; Schmalbach-Lubeca AG; Schmalbach-Lubeca Austria GmbH; Shellmar Comercio E Participacoes Ltda.; Schellmar Embalagem Moderna, S.A.; N.V. Sobemi; Tedeco B.V.; Tedeco GmbH; Te- deco S.a.r.l.; Tedeco U.K.; The Continental Group (Germany) GmbH; The Vinoxen Company, Inc.; Thomassen & Drijver Ver- blifa N.V.; Unicon Producing Company; Unterstutzungseinri- chtung Schmalbach Lubeca-Werke GmbH; Verblifa N.V.; Weduwe J. Bekkers B.V.; YRSU B.V. Excluded from this list are cor- porations in which Kiewit Continental Inc. or its subsidiaries or affiliates have less than 10% ownership. TABLE OF CONTENTS OTIEE FNEINTEDD sincere sissdiiavesinedensinnsesnviasetnsies I io ort el adeemnaeenaanenies ee fe Se os da easeuseesaendaen ee ee eS acon enepnnneneanen I I ig isa inttaneline ad pe eae JURISDICTION CORO R EERE EEE EEE EEE EEE EEE EEE EEE EEE HEHEHE HEHEHE EEE EEE ED pe EL ae een Meme me a i I A iii es lisideceendeasewsubions REASONS FOR GRANTING THE WRIT ..............cceceeees I. The Third Circuit’s Determination on the Ar- bitrability of ERISA-based Claims is in Con- flict with the Decisions of Other Circuits and le Ca oe ak oe Ca a aco nabceuubaceons A. This Court Should Grant Certiorari to Resolve the Conflict among the CII \cscducpantecccnccnreeeiciae eres l. wa | Arbitration is a Favored Remedy in Disputes Between Management and RAE Cs cic ccanetcninaaaenaweninein . The Third and Ninth Circuits Misin- terpreted the Legislative History of ERISA; the D.C. Circuit Did Not Con- EN ee ee re er . The Seventh, Eleventh, and Second Circuits Rely on a Consistent Reading OE I wckcts csvouricactiaaionnapeniveins . The Third, Ninth and D.C. Circuits are in Conflict with an Accurate Reading of Legislative History and the Deci- CE S-Se dctcieeiininsinees . The Conflict Can Only be Resolved by i Tenet i a i A | 10 11 12 14 II. Ill. vil B. Conflict and Confusion Among Lower Courts Calls for Speedy Resolution in Or- der to Avoid Increased Caseload and Chaos in the Labor-Management Arena The Third Circuit’s Application of a Six Year Statute of Limitations is in Conflict with the Basic Tenets of Federal Labor Policy and Several Prior Decisions of this Court ......... A. The Gavalik Opinion is Violative of the Principles Espoused by this Court in DelCostello and Mitchell ...................20002. 1. The Family Resemblance Between Ac- tions Under Section 510 and a Charge of an Unfair Labor Practice ............. 2. The Need for Rapid Final Resolution of Disputes Where the Collective Bar- gaining Agreement and Private Set- tlement of Disputes are Implicated .. 3. The Need for Uniformity Where the Formation of the Collective Bargain- ing Agreement and the Private Set- tlement of Disputes Under It are PIII sieUsiitidepdsessmanbaicoteiruneaemciions B. Application of Wilson ..............:ccceeeeeeeees 1. The Analogy to Federal Discrimination Actions is Compelling ...................000+5 2. The Federal Interest in Uniformity .. 3. The Need for Short Limitations i ede, tor’ Test for Causation in Mixed-Motive Dis- crimination Cases Conflicts with this Court’s ck NEN A. Application of the Third Circuit’s ‘‘a De- terminative Factor’ Test in Gavalik Con- flicts with Decisions of this Court ......... 14 18 18 19 19 21 21 22 22 23 24 26 B. The Third Circuit Panel Incorrectly Ap- plied the Same Decision Test at the Wrong Stage of the Case .............:.::006+ 27 A oe ae as aadaapateieuaoeavaniis 29 Appendix: The Third Circuit opinion in Gavalik v. Continental Can Co., 812 F.2d 834, (8d Cir. 1987) ..............4. la 2. The district court olpinion in Gavalik v. Conti- nental Can Co., Nos. 81-1519 and 82-1995 (W.D. Pa. Sept. 9, 1985) ............ccoccsvcesrsrcsseserrecesessnsveeeses 67a Employee Retirement .Income Security Act of 1974, as amended: Section 413 (29 U.S.C. § 1113] .......... ee 94a Section 502 (29 U.S.C. § 1132] ..................0 94a Section 503 (29 U.S.C. § 1133] ........ etigahekinaealiie 100a Section 510:(29 U.S.C. § 1140] ......... cee 100a Section 514 [29 U.S.C. § 1144] ........... 10la 4. Provisions of the governing Master Agree- TE ccevkcsntioesecsacvacscwtiuninvercnssbracdanceusesepnseiantonéeeeisess 105a WE >i) 2 ee as Los badaisebaaeuvealeuenanaenne’ 118a 6. 1986 Cases involving ERISA and Exhaustion/ Arbitration 13la Vill TABLE OF AUTHORITIES CASES: Page Adams v. Gould, 739 F.2d 858 (3d Cir. 1984), cert. denied, 469 U.S. 1122 (1985) _ ....................... 20 Air Line Pilots Association v. Northwest Airlines, Inc., 627 F.2d 272 (D.C.Cir. 1980) .............. 6,11,13 Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504 TERRE SES iy RE a co 16 Alexander v. Gardner-Denver Co., 415 U.S. 36 he ES Bae Fp eS ERR EAT RT 8,11 Alfarone v. Bernie Wolff Const. Corp., 788 F.2d 76 (2d Cir.), cert. denied, 107 S. Ct. 316 EMER. “stchsed pichutudler cchesedicudagadbuisutwcaksnseucniictensss: 6,12 Amaro v. Continental Can Co., 724 F.2d 747 (9th Ee VENI ss sises.d cAsacsewen coeeuwueebeuounelecciedsers 6 et passim Amato v. Bernard, 618 F.2d 559 (9th Cir. UE ait seldiipassnsstnuiphaamecacaaibiaibaveeladiescttiniaieuvccasecsee 1] Arlington Heights v. Metro. Housing Corp., 429 U.S. I aa sist thei tiliiasd olde addadehadaakececeusueigesversbies 24,27 AT&T Technologies v. Communications Workers, BU We ig I OD» cesivnsesevsnesinssareccececeiese 9 Barrentine v. Arkansas-Best Freight Systems, Inc., I i I ihc it caters ceseks 8 Bell v. Birmingham Linen Service, 715 F.2d 1552 (llth Cir. 1983), cert. denied, 467 U.S. 1204 SUNN orieciciadspaiaidcnneseanis cavenasdiceendinhansaassdteledasaces 28 Bellisimo v. Westinghouse Electric Corp., 764 F.2d 175 (3d Cir. 1985), cert. denied, 106 S. Ct. 1244 SEITE C ‘auteuinediousdeckabseaseubuabesmuniensenenDiiiecdeeiedanect 25 Bender v. Mcllhatten, 520 A.2d 37 (Pa. Super. Ct SEE .:sidedhcnaiodiciee hati mi dea baatadentetniceseese 24 Chardon v. Fumero Soto, 462 U.S. 650 (1983)... 15 Chevron Oil Co. v. Huson, 404 U.S. 97 (1971)... 22 Cooper v. Federal Reserve Bank of Richmond, 467 SPA AT MEET" hiss dpuldceekctitussesunsadansvcensuncevvdsanns 27 Table of Authorities Continued Page Corkery v. SuperX Drugs Corp., 602 F. Supp. 42 Seca echcannounnionenne 17 Cowden v. Montgomery County Society for Cancer Control, 591 F. Supp. 740 (S.D. Ohio 1984) 17 Crouch v. Mo-Kan Iron Workers Welfare Fund, 740 Fe ee Ce GE TNE |. vidneecivevnctavesconscceses 22 Dale v. Chicago Tribune Co., 797 F.2d 458 (7th Cir. 1986), cert. denied, 107 S. Ct. 954 (1987) 5 Davis v. UAW, 765 F.2d 1510 (11th Cir. 1985), cert. denied, 106 S. Ct. 1284 (1986) ...................... 20 Davis v. United States Steel Supply, 581 F.2d 335 asa ealaeadasueanlibonnes 23 DelCostello v. Teamsters, 462 U.S. 151 PO ce cs cadsuainanvenbiase 15 et passim Delisi v. United Parcel Service, Inc., 580 F. Supp. SE Re, IEE sxacanwnvectsscorsneciedetenceons 17 Dillon v. Coles, 746 F.2d 998 (3d Cir. 1984) ...... 25,28 Dothard v. Rawlinson, 433 U.S. 321 (1977) _ ........ 27 Duffy v. Wheeling Pittsburgh Steel Corp., 738 F.2d 1393 (3d Cir.), cert. denied, 469 U.S. 1087 RI ial ani dso ctl onctatnineniveanaoiaananediinneh 25 East Texas Motor Freight System v. Rodriguez, 431 ne EE IIT. ianhisdvanpcudindsaneincinntennuneiensanenens 24,27 Edwards v. Wilkes-Barre Pub. Co. Pension Trust, 757 F.2d 52 (3d Cir.), cert. denied, 106 S. Ct. I an arepsananrneonets 17 Fitzgerald v. Larson, 741 F.2d 32 , (3d Cir. 1984), vacated, 472 U.S. 1051 (1985). ............... 23 Gavalik v. Continental Can Co. Nos. 81-1519 and 82-1995 (W.D. Pa. Sept. 9, 1985), rev'd, 812 F.2d 834 (Sd Cir. 1987) ..............ccccceeee. 1 et passim Hazelwood School District v. United States, 433 U.S a acahaiianewenintd 26 Table of Authorities Continued Page Holmberg v. Armbrecht, 327 U.S. 392 (1946) ...... 18 Home for Crippled Children v. Erie Insurance Ex- change, 130 P.L.J. 480 (Allegheny County Court of Common Pleas 1982), aff'd mem., 329 Pa. Super. 610, 478 A.2d 84 (1984) oe... 24 Hormel v. Helvering, 312 U.S. 552 (1941) ow... 29 Teamsters v. United States, 431 U.S. 324 (1977) 27 Jacobson v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 797 F.2d 1197 (8d Cir. 1986) _............... 12 Knoll v. Springfield Township School Dist., 699 F.2d 137 (3d Cir. 1983), vacated, 471 U.S. 288 (1985), on remand, 762 ¥ 2d 584 (1985) oo... w.. epee 21,23 Kross v. Western Electric Co., 701 F.2d 1238 (7th CARS BIE sedessincssschecticcotectsantiimsbiavie 6 et passim Kuntz v. Reese, 760 F.2d 926 (9th Cir. 1985), op. withdrawn & decision vacated, 785 F.2d 1410 SIGE. sehispinavinitibuacasuioubisdstadinens eens maiadenprens 17 Lee v. Russell County Board of Education, 684 F.2d PE ee ee soins catdedcaneieciisveovenasecoss 28 Lewis v. University of Pitisburgh, 725 F.2d 910 (3 3d Cir. 1983), cert. denied, 469 U.S. 892 RINE cuserciocacncccmenosiuntatietanesed eects uaaaies 26,28,29 Machinists v. NLRB, 362 U.S. 411 (1960) .......... 19 Malley-Duff & Associates v. Crown Life Ins. Co., 792 F.2d 341 (3d Cir.), cert. granted, 107 S. See Se CE. biidewsicikccadnaseiepacceraeecnnvacaawaicies 23 Mason v. Continental Group, Inc., 569 F.Supp. 1241, 763 F.2d 1219 (11th Cir. 1985), cert. denied, Se ee, ee Eirini 6,7,11 Mazfield v. Sinclair Int'l, 766 F.2d 788 (3d Cir. 1985), cert. denied, 106 S. Ct. 796 (1986)... 25 Mazzanti v. Merck, 770 F.2d 34 (8d Cir. 1985) .. 23,24 McDonald v. City of West Branch, 466 U.S. 284 NE. cupcicaubansteisniacsdee peace tesansentectbenmaasaieubiance 8 Table of Authorities Continued Page McKinney v. Missouri-Kansas-Texas Railroad Co., ek Se | eeeeererenersen enerererre 8 McLendon v. Continental Group, Inc., 602 F. Supp. BE CERES dan edevesenccecasnntesirinitenneeonenns 7,17 Metropolitan Life Insurance Co. v. General Motors Corp., 55 U.S.L.W. 4468 (U.S. April 6, RUE aicaksdecenedobennevsenisnisbenninsuveisionbssaanuinesn ities 13,14,16 Meyers v. Pennypack Woods Home Ownership Ass'n, “Ges 8 8 oh Ae! cy) Beer ere ee 23,24 Mitsubishi Motors v. Soler Chrysler-Plymouth, 105 Be, is i MID dascedensaicdaciascnsocarsenrntias 6 et passim Mt. Healthy School District Board of Education v. Doyle, 439 US. B44 (ISTE) .....00i...0000500 24,25,26,29 NLRB v. Transportation Management Corp., 464 SE ee EE 1c iscsideuiaasitecih Tovesipteneincinminvensinee 27 Pace v. Southern Ry. System, 701 F.2d 1383 (11th Cir.), cert. denied, 464 U.S. 1018 CI racial ebkcicadnaldeasisisdusdibanippdortaniavsiiaturenieines 27 Perri v. Aytch 724 F.2d 362 (3d Cir. 1983) _...... 22 Regents of the University of California v. Bakke, a SE CREED pencensscnsnietesbectorsnnkinereroins 27 Schneider Moving & Storage Co. v. Robbins, 466 SEs A IED ekeantvevevicimuatitssdecomtesonnnbercinaiee 8 Singleton v. Wulff, 428 U.S. 106 (1976) ..........0. 29 Skehan v. Bloomsburg State College, 503 A.2d 1000 Pe, CG, TE. TUN sivas ecenceasennnnpspensioncns 23 Skehan v. Board of Trustees, 590 F.2d 470 (3d Cir. FITTED. swicisinvsinnasatcebemeuctncnaioenatenimipieaniaapadeniinng: 23 Smith v. City of Pittsburgh, 764 F.2d 188 (3d Cir. I isessccccbinncdsrincsvestienaticidciateesinsmaneaieneeais 22 Smithers v. Bailar, 629 F.2d 892 (3d Cir. DE sansntacnniplarechapnecbeanescanckctipicceupatecssiqsanmabnnss 26 xi Table of Authorities Continued Page Texas Department of Community Affairs v. Bur- Geb, SOO Ue. BEB (IGG) cvcerecececccevesssesersees 27 UAW v. Hoosier Cardinal Corp., 363 U.S. 696 NEE, SRG ERS SO We nants a 15,19 United Parcel Service, Inc. v. Mitchell, 451 U.S. 56 (ae URES Se a Oa en 15 et passim U.S. Bulk Carriers, Inc. v. Arguelles, 400 U.S. 351 ate eh eines aaa ais hc ectitsncpeousnaisaventve 8 Steelworkers v. American Manufacturing Co., 363 ON dso Covudcnmnnegnsnnnicisone 8,13 Steelworkers v. Enterprise Wheel, 363 U.S. 593 a a sa eed achaasagtarennenes 12 Steelworkers v. Warrior Gulf and Wisiiadinn € Uo., By Ps Se oii cas peesseressursiesuvinennes 8 ,9,10,13 Vaca v. Sipes, 386 U.S. 171 (1967) .............00eceeee 20 West v. Butler, 621 F.2d 240 (6th Cir. 1980) ..... 18 Wilson v. Garcia, 471 U.S. 271 (1985) ..... 15 et passim Wright Line, 251 NLRB 150 (1980), enforced, 662 P 2d 899 (9th Cir. 1981), cert. denied, 455 U.S. I eee hccataencrce tea nds sacsnammeonentioeiextes 27 Zipf v. American Tel. & Tel. Co., 799 F.2d 889 (3d RRR AS AE ARS Rr NT PS ke eee ID 10 STATUTES: United States Arbitration Act IO as cule abonee ) I ea ccc eiacvssnmesandeaivakebnaces 1 Labor Management Relations Act a Be a. csc bhtvbucdckpucavnccbes 27 Section Gla), SO U.B.C. § 1GBla) . ......scaccceseccseces.s.s 18 section 10(b), 29 U.S.C. § 160%) ................;......... 18 Section 203(d), 29 U.S.C. § ITB) — .....cccecocccscceses. 9 | xiii Table of Authorities Continued Page Rection DRL, BE UBL. 9 WD ccsrccerssccciicetvicninn 13 Fair Labor Standards Act Sections 1-19, 29 U.S.C. §§ 201-219 ....... ee. 8 Age Discrimination in Employment Act ee ee ee Oe — ecisshiadtirciicieritenss 27 Employee Retirement Income Security Act of 1974, as amended fis i ee Bg Bh ere arene neon 1 Sections 401-414 [29 U.S.C. §§ 1101-1114] _ ......... 17 Becta SIS TEP UT. GF TDI G) vacsecevossesiccsvisesesess 2,17 Section 502 [29 U.S.C. § 1132] ............... sasienaaalle 2,17,30 Section GOS 179 U.S.C. § L1GS) . .....00cecsevecsecesesses. 2 Section 510 [29 U.S.C. § 1140] ................... 1 et passim Sectea SIG TEP UBL. 8 LIKE) <0 c0cceccccccvssccssscsess 2,12,16 od radcddsdacenhtckaeevervianeeerenens 27 I os culaibennnnnbnesen vane 21,238.20 Civil Rights Act of 1964 I Oe ON vovssvcsesndsinevdpsaevenscnsopiatones 8,27 Fair Hous: g Act ee I I vavencceccsceicisesigsnrcsnveceserenes 27 Pennsylvania State Code Equal Pay Law Act of December 17, 1959, P.L. 1913, as amended, Pa. Stat. Ann. tit. 43, § 336.5 (Purdon 1986 Supp.) — ..............csccccseveees 24 Pennsylvania Human Relations Act of October 27, 1955, P.L. 744, as amended, Pa. Stat. Ann. tit. 43, § 95%g) (Purdon 1986 Supp.) .......... 24 Public Employee Relations Act of July 23, 1970, P.L. 563, as amended, Pa. Stat. Ann. tit. 43, § 1101.1505 (Purdon 1986 Supp.) ................. 24 xlV Table of Authorities Continued Page OTHER AUTHORITY: Am. Jur. 2d Desk Book, itern # 66 (July 1986 sup- ERENT RSV ee US ee ee en 5 Collective Bargaining Agreement: Master Agreement: Articles 13.2 and 23 _........ 9 Pension Agreement: Title, Introduction, Appeals IID 11 i Scsatatidencienceinusdehed dixaumnecieveabeaudenin 9 LEGISLATIVE HISTORY: Senate Comm. on Labor and Public Welfare, Sub- comm. on Labor, 94th Cong., 2d Sess., Leg- islative History of the Employee Retirement Income Security Act of 1974 (Comm. Print EE sradineaprndcbertistrvnesdausiguiisesi nae 10 et passim PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT Petitioner, Continental Can Company, U.S.A., a member of the Continental Group, Inc., respectfully petitions for a writ of certiorari to review the judgment of the United States Court of Appeals for the Third Circuit entered in this case on January 15, 1987, and corrected on February 19, 1987. OPINIONS BELOW The corrected opinion of the Court of Appeals is re- ported in Gavalik v. Continental Can Co., 812 F.2d 834 (3d Cir. 1987); the finding of facts, conclusions of law, and the judgment order of the district court dated September 24, 1985, were unpublished. Both opinions appear in petitioner’s appendix. JURISDICTION This Court has jurisdiction to review the judgment of the court below by writ of certiorari pursuant to 28 U.S.C. § 1254(1). The judgment of the Court of Appeals was entered on January 15, 1987, and corrected on February 19, 1987. Petitioner filed a petition for rehearing with a suggestion for rehearing en banc. That petition was denied on February 19, 1987. This petition is being filed within 90 days of the denial of the petition for rehearing. APPLICABLE STATUTES The Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001 et seg. (““ERISA’’); in particular § 510 of ERISA, 29 U.S.C. § 1140. The text of 29 U.S.C. §§ 1113, 1132, 1138, 1140, and 1144 are included in the ap- pendix along with the text of selected portions of the legislative history. STATEMENT OF THE CASE This petition arises from the Third Circuit reversal of a district court decision. The plaintiffs, former employees of defendant’s can manufacturing plant in Pennsylvania, alleged that Continental had violated section 510 of ERISA by laying them off before they attained eligibility for so-called Rule of 65 or 70/75 pension benefits.! The basis for jurisdiction was section 502 of ERISA, 29 U.S.C. § 1132. The district court held in favor of the defendant and present petitioner, Con- tinental Can Company, U S.A. (‘Continental’). Continental is a corporation engaged throughout the United States in the business, inter alia, of manufacturing cans. The certified union representative of the respondents is the United Steelworkers of America, AFL-CIO, Local 4337 (hereinafter referred to as “USW’’). Beginning in the early 1970’s, the can producing indus- try as a whole experienced a steady decline in business due principally to competition from new technology in alu- minum cans, plastic and paper products, and self-manv- facturing in the beverage industry. As part of the company’s management of its business in 1976, Continental developed and began to use a com- puterized data base, Bell I, that contained employee per- sonnel information, including seniority date, job classification, and age. The company used a computer pro- gram called Bell II to measure the labor costs of its op- erations. Continental laid employees off at its plant site in West Mifflin, Pennsylvania, in 1977 and 1978, shut down op- ‘The pensions at issue were provided by Continental in addition to regular retirement pensions for former employees in layoff situations. See Gavalik at 5-7 (App. at 8a-10a) for a further explanation of these layoff pension benefits. eration of the “‘pail line’”’ in the plant in 1978, and closed the plant in 1981. After being laid off, four of the named plaintiffs filed grievances, but the grievances were not appealed to arbitration. Laid off employees filed two separate actions in the district court: Gavalik v. Continental Cm Co., No. 81-1519 (W.D. Penn. Sept. 8, 1981); and Jakub v. Continental Can Co., No. 82-1995 (W.D. Penn. Sept. 27, 1982). The principal relief sought in these cases was the same as that sought in the above-referenced grievances. The cases were con- solidated and a single class action was certified on January 17, 1984. As one of its affirmative defenses, Continental asserted that as the complaint alleged discriminatory layoffs begin- ning in 1976, and continuing until the relocation of the pail line in the winter of 1977-78, the plaintiffs’ complaint, first brought in September of 1981, was time-barred. As another affirmative defense, Continental asserted that the court lacked jurisdiction because the plaintiffs had failed to exhaust their administrative remedies. After a non-jury trial, the district court held that em- ployees did not need to exhaust the grievance or arbitra- tion procedures (Conclusion of Law # 3; App. at 91a) and entered judgment for Continental finding that Continental had legitimate business reasons for the layoffs and the plant closings. (Findings of Fact i07 and 142; App. at 86a, 90a). The district court also held in its interlocutory opin- ion of December 15, 1983, that plaintiffs’ claims were sub- ject to Pennsylvania’s six-year residuary statute of limitations (‘“‘SOL’’). The employees appealed. Continental cross-appealed, re- newing its claims that the employees’ suit was barred by the applicable SOL armi/or the employees’ failure to ex- haust their grievance-arbitration remedies. A two-judge panel of the Third Circuit denied the cross- appeal and reversed the district court stating that the burdens of proof had been misallocated; affirmed the dis- trict court’s finding that a six-year SOL governed; and affirmed the trial court’s conclusions that arbitration was not needed. Gavalik v. Continental Can Company, Nos. 85- 3597 and 85-3615 (3d Cir. February 19, 1987). The circuit did not remand the case to the trial court for further proceedings consistent with the changed bur- dens of proof. Rather, the Third Circuit held for the plaintiffs despite the district court’s express findings that the closing of the pail line and the layoffs would have occurred in any event. Gavalik v. Continental Can Co., Nos. 81-1519 and 82-1995 (W.D. Pa., September 24, 1985), Slip. Op. (Findings of Fact 107 and 142; App. at 86a, 90a). Under the remand order,” each individual plaintiff carries a presumption of liability in his favor. Continental can only limit damages by proving that the employees would have been laid off absent the proscribed motive. REASONS FOR GRANTING THE WRIT The petition asks this Court to address issues that affect literally millions of workers and thousands of employers in the United States. First, the circuit courts have divided on whether em- ployers can enforce collective bargaining agreement (‘“‘CBA’’) provisions to arbitrate pension disputes when vi- olations of ERISA are alleged. Employers with multiple plant locations can thus face different treatment of iden- tical employee claims based solely upon each plant’s geo- graphical location even when all employees are represented under the same CBA—exactly the situation the petitioner has faced. * By order dated March 20, 1987, the Third Circuit recalled the man- date of remand for 30 days and, once the petition is docketed, until disposition of the case before this Court. Moreover, despite the federal labor policy favoring prompt resolution of disputes, the Third Circuit has adopted a SOL that can result in employers, such as the petitioner in this case, facing claims for damages many years after the events in question and many years after the grievance procedure was abandoned or completed and not appealed by individual workers. Such results can only have a chilling effect on U.S. companies considering whether to provide, continue or expand pension benefits. Finally, the petition presents the important question of whether an employer can be denied the right, in the lia- bility phase of a mixed-motive discrimination case, to prove through the preponderance of the evidence that the chal- lenged decisions would have occurred absent the proscribed motive. The Third Circuit’s denial of such a right to the petitioner not only conflicts with Supreme Court precedent and the precedent of other circuits, but also raises the spectre, if not reversed, of the Third Circuit denying basic due process rights to defendants in the full range of dis- crimination cases filed in the federal district courts of that circuit. For example, during 1985, 549 civil rights em- ployment cases alone were filed in the U.S. district courts in the Third Circuit. Am. Jur. 2d Desk Book, Item No. 66 (July 1986 Supplement). Exercise of the Supreme Court’s supervisory function to assure conformance of the circuits to teachings of this Court and the basic tenets of the Constitution are particularly appropriate in such a sit- uation. I. THE THIRD CIRCUIT’S DETERMINATION ON THE ARBITRABILITY OF ERISA-BASED CLAIMS IS IN CONFLICT WITH THE DECISIONS OF OTHER CIRCUITS AND THIS COURT. The Third Circuit’s Gavalik decision that statutory claims under ERISA are not arbitrable is in direct conflict with the decisions of the Seventh Circuit Court of Appeals in Dale v. Chicago Tribune Co., 797 F.2d. 458, 466-67 (7th Cir. 1986), cert. denied, 107 S. Ct. 954 (1987) and Kross v. Western Electric Co., Inc., 701 F.2d 1238, 1244-45 (7th Cir. 1983), with the decision of the 11th Circuit in Mason v. Continental Group, Inc., 763 F.2d 1219, 1222-1225 (11th Cir. 1985), cert. denied, 106 S. Ct. 863 (1986), and with the decision of the 2nd Circuit in Alfarone v. Bernie Wolff Construction, 788 F.2d 76, 79 (2d Cir.), cert. denied, 107 S. Ct. 316 (1986). However, it is consistent with the Ninth Circuit’s decision in Amaro v. Continental Can Co., 724 F.2d 747, 750-52 (1984)* and the District of Columbia Cir- cuit’s decision in Air Line Pilots Association v. Northwest Airlines, Inc., 627 F.2d 272, 278 (D.C. Cir. 1980). (Alfa- rone and Air Line Pilots Association, ERISA cases, do not involve section 510.) In a disserit to this Court's denial of certiorari in Mason, Justice White (joined by Justice Brennan) discussed the need to grant certiorari on the issue of exhaustion in ERISA cases: I believe that the Court should grant certiorari in this case in order to resolve the uncertainty over the existence of an exhaustion requirement in cases of this kind. The increasing significance of ERISA litigation is apparent from the growing number of such cases that appear on our docket; in a field so productive of federal litigation, the need for clear procedural rules governing access to the federal courts is imperative. Moreover, be- cause the coverage of particular ERISA plans frequently extends to beneficiaries in more than * The issue of exhaustion has been raised again in the district court based on the Supreme Court’s decision in Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 105 S. Ct. 3346 (1985), decided subse- quent to the 9th Circuit decision. The circuit remanded the action to the district court for further adjudication. The district court denied the defendant’s exhaustion argument implicitly and then denied its § 1292(b) motion to have the issue of exhaustion certified. Hence, appeal of the exhaustion claim in the 9th Circuit awaits completion of the trial. one state—and, no doubt, in more than one ju- dicial circuit—differences in the rules governing access to federal court for the purpose of press- ing a claim under ERISA may have the troubling effect of encouraging forum-shopping by plaintiffs. Mason, 106 S. Ct. at 863. The problems highlighted by Justice White have wors- ened since his dissent. Those seeking to avoid the need to pursue arbitration provisions of collective bargaining agreements can attempt to file in the Third or Ninth Cir- cuit even when their actions may have arisen primarily in other circuits (e.g., Seventh and Eleventh). Petitioner is a prime example of such disparity. When it was sued in the Eleventh Circuit, the suit was dismissed for failure to ex- haust. Mason. Yet, when the same causes were asserted in the Third and Ninth Circuits, a contrary ruling on ex- haustion was made. Gavalik, Amaro. Now Continental is confronted with a nationwide class action in the Third Circuit. See McLendon v. Continental Group, Inc., 602 F. Supp. 1492 (D.N.J. 1985). If this action had been filed in the Seventh or Eleventh circuits, exhaustion would be a bar. The Third Circuit’s Gavalik decision also conflicts with a recent decision of this Court and with the statutory intent of Congress in passing the ERISA statute. The Third Circuit has allowed its distrust of arbitration to ov- erride the language of the statute, congressional intent, and the principles of federal common labor law. Until this issue is resolved, an air of uncertainty will surround collective bargaining agreements and the CBA negotiation process. The policy of our federal labor laws, which is “to promote industrial stabilization through the collective bargaining agreement” (United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574 at 578 (1960)), will be at risk. a A. This Court Should Grant Certiorari to Resolve the Con- flict among the Circuits. 1. Arbitration Is a Favored Remedy in Disputes Between Management and Labor. In its “role of developing a meaningful body of law to govern the interpretation and enforcement of collective bargaining agreements” (Steelworkers v. American Man- ufacturing Co., 363 U.S. 564 at 567 (1960)), this Court has consistently affirmed a basic tenet of federal common labor law: the use of arbitration for the resolution of disputes. As noted in Steelworkers v. Warrior & Gulf Navigation Co., supra, 363 U.S. at 580, “‘{a] collective bargaining agreement is an effort to erect a system of industrial self- government.” ‘“[T]he grievance machinery under a collec- tive bargaining agreement is at the very heart of industrial self-government.” Jd. at 581. One of the controversies that has surrounded arbitration arises from the intersection of the right to arbitrate con- tract-based claims and the right to judicial enforcement of statutorily-created rights. This Court has held that access to judicial remedies for some rights created by statutes may not be deferred to arbitration.‘ More recently, how- ‘McKinney v. Missouri-Kansas-Teras R.R. Co., 357 U.S. 265, 268- 270 (1958) (Universal Military Training Service Act, 50 U.S.C. app. § 459(d); U.S. Bulk Carriers, Inc. v. Arquelles, 400 U.S. 351, 354 (1971) (Seaman's Wage Act, 46 U.S.C. § 596, 597); Alexander v. Gardner- Denver Co., 415 U.S. 36, 44-49 (1974) (Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000(e)); Barrentine v. Arkansas-Best Freight Sys., Inc., 450 U.S. 728, 737 (1981) (Fair Labor Standards Act of 1938), 29 U.S.C. §§ 201-219; McDonald v. City of West Branch, 466 U.S. 284 (1984) (Civil Rights Act of 1871, 42 U.S.C. § 1983). These cases are distinguishable from cases involving statutory causes of action to en- force contract-based rights such as those to pensions created under CBAs. It appears that misinterpretation of these cases by failure to note that distinguishing factor has given rise to controversy between the circuits. See discussion infra. See also Schneider Moving & Storage Co. v. Robbins, 466 U.S. 364, 370-72 and n.14 (1984) (Court did not ever, in Mitsubishi this Court has reaffirmed that the fed- eral policy favoring arbitration, as embodied in the United States Arbitration Act, 9 U.S.C. §§ 1 et seqg., is entitled to as much deference as the policies espoused in other federal statutes. The Court articulated a two-step analysis to determine whether statutory rights may be deferred to arbitration. The first step requires the anziyzing court to interpret the governing contract to determine whether the parties intended the dispute at issue to be resolved by the arbitration procedures of the agreement. In this step, there is a strong presumption of arbitrability unless the CBA expressly excludes the particular type of dispute at issue from the grievance procedures. AT&T Technologies v. Com- munications Workers, 106 S. Ct. 1415. 1419 (1986); Steel- workers v. Warrior & Gulf Wavigation Co., 363 U.S. 574, 584-85 (1960).5 The second step requires the court to ex- amine the statute giving rise to the claims at issue and to review its legislative history. The purpose is to deter- mine whether there is an indication that the legislature intended to prevent employers from enforcing CBA pro- visions for arbitration of pension-related disputes. By implication, since the policy favoring arbitration un- der the federal labor statutes (including section 208(d) of the Labor Management Relations Act, 1947, 29 U.S.C. § 173(d)) is as strong as that of the Arbitration Act, the guidance of this Court in Mitsubishi should be applied in reach issue of whether a CBA requirement for arbitration of ERISA claims would be lawful because it held that trustees of employee-benefit funds are not parties to the CBA.) *The trial court found that the claims of the plaintiffs were not covered by their collective bargaining agreement. Although the finding was cross-appealed, the circuit court did not discuss the issue in its opinion. The arbitration sections of the master agreement appear in the appendix as pages 105a-118a; and those from the pension agreement at 119a-130a. Because no grievance is excluded from the arbitration provisions of the CBA in issue, the trial court’s finding is plainly er- roneous. AT&T, Warrior & Gulf Navigation Co., supra. 10 the collective bargaining arena. The attempt to discern the intent of the legislature that created ERISA is the source of controversy among the circuits. 2. The Third and Ninth Circuits Misinterpreted the Leg- islative History of ERISA; the D.C. Circuit Did Not Consider It. The Third Circuit in Gavalik considered itself bound by Zipf v. Amerian Telephone and Telegraph Co., 799 F.2d 889 (3d Cir. 1986). Although it did not specifically apply the Mitsubishi test to discern a legislative intent against arbitrability in Zipf, the court, in Gavalik, found that “‘[iJn Zipf the approach approved in Mitsubishi was not con- travened.”” Gavalik at 32.’ *The apparent application of Mitsubishi to collective bargaining agreements is indicated in the opinion itself when this Court cites a case from the Steelworkers Trilogy, Steelworkers v. Warrior & Gulf Navigation Co. as an example of an instance when the Court has favored arbitration under the criteria established by the decision. Mit- subishi, 105 S.Ct. at 3354. * The court indicated its basis for this observation: The Zipf Court did not resort to a presumption of unar- bitrability, but rather sought to ascertain congressional in- tent on the question of arbitrability of substantive discrimination claims under § 510 of ERISA. Its examination of the legislative intent of § 510 revealed an express desire that claims brought thereunder be submitted to the courts. ‘Indeed, an amendment that would have created an ad- ministrative remedy for section 510 claims, to be established by the Department of Labor, was defeated.”’ Zipf, 799 F.2d at 892. Gavalik at 32 (emphasis added). Review of the legislative history dem- onstrates that the defeated amendment was intended to cover those employees who were not protected already by a collective bargaining agreement providing administrative remedies. The amendment was de- feated based on its cost, not from any antipathy to administrative and arbitral remedies. 119 Cong. Rec. 30,374-75, 30,399-401 (1973), re- printed in Senate Comm. on Labor and Public Welfare, Subcomm. on Labor, 94th Cong., 2d Sess., Legislative History of the Employee Re- 11 In its decision in Amaro, the Ninth Circuit distinguished its previous finding of an exhaustion requirement for ER- ISA-based claims, Amato v. Bernard, 618 F.2d 559, 567 (9th Cir. 1980), on the grounds that the latter case involved a request for declaration of the parties’ rights under a pension plan, whereas in the case before it, the claim did not specifically arise from breach of contract. The D.C. Circuit in Air Line Pilots Association did not review ERISA’s legislative history; the court relied on Alexander for its finding that the plaintiffs did not need to arbitrate their statutory claims. 3. The Seventh, Eleventh, and Second Circuits Rely on a Consistent Reading of the Statute. In Kross the Seventh Circuit found itself in agreement with the Ninth Circuit’s decision in Amato. In that case the court found from its review of the statute that the exhaustion of administrative remedies was a necessary step before action could be taken in federal court.’ In Mason, the Eleventh Circuit reviewed the pertinent eases from the Ninth Circuit (Amaro and Amato) and agreed with Amato and with the Seventh Circuit (in Kross). It commented: “‘[iJn addition, imposing an exhaustion re- quirement in the ERISA context appears to be consistent with the intent of Congress that pension plans provide intrafund review procedures.’’ Mason, 763 F.2d at 1227. tirement Income Security Act of 1974 (Comm. Print 1976) [hereinafter cited as Leg. Hist.] Vol. 2, at 1774-76, 1834-37. It would certainly be anomalous if the same good reasons that presumably led Congress and the Secretary [of Labor] to require covered plans to provide administrative remedies for aggrieved claimants did not lead the courts to see that those remedies are regularly used. Kross, 701 F.2d at 1245, quoting from Amato, 618 F.2d at 567. EE 12 In Alfarone, the Second Circuit relied on the ‘firmly established federal policy favoring exhaustion of adminis- trative remedies in ERISA cases’ (788 F.2d at 79) and cited Kross. The question is clear: did Congress in enacting section 510 of ERISA intend to prevent an employer from en- forcing a CBA provision for arbitration of pension dis- putes? The answers of the circuits are in conflict: the Third Circuit, Ninth Circuit and D.C. Circuit have found that Congress did intend to prevent arbitration of ERISA rights; the Seventh, Eleventh, and Second Circuits have found that Congress intended for ERISA disputes to be handled by arbitral forums. 4. The Third, Ninth and D.C. Circuits Are in Conflict with an Accurate Reading of Legislative History and the Decisions of this Court. The ERISA statute provides access to federal courts under section 502. It makes no reference to arbitration of the claims (including section 510 claims) that may be brought under section 502. There are no anti-waiver pro- visions in the statute; thus it does not foreclose arbitration in the manner of the Securities Act of 1934 as has been found in Jacobson v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 797 F.2d 1197, 1201 (3d Cir. 1986). The pro- vision is similar to those in the Clayton Act and RICO under which courts (in Mitsubishi and Jacobson, respec- tively) have found statutory claims to be arbitrable. Indeed, it contains a provision, section 514(d), that in- dicates that the statute was not meant to overrule any existing U.S. laws: Nothing in this subchapter [which includes sec- tions 502 and 510 of ERISA] shall be construed to alter, amend, modify, invalidate, impair, or supersede any law of the United States . 29 U.S.C. § 1144(d). 13 ERISA became law in 1974, long after the Steelworkers Trilogy? nad established deference to arbitration as part of the federal common labor law. Thus, it cannot be con- strued to override the well-established deference to arbi- tration as a method of dispute resolution under federal labor law. See Air Line Pilots Association, 627 F.2d at 276. Review of ERISA’s history makes it clear that the draf- ters believed that employees operating under a CBA had an efficient dispute resolution mechanism whereas it was employees without such a mechanism that needed the pro- posed administrative procedures (see 119 Cong. Rec. 30,374-75, 30,399-401 (1973), reprinted in Leg. Hist., su- pra, at 1774-76, 1834-1837). This perception is typified by Senator Hartke’s comment: Senator Hartke: Most collective bargaining agree- ments protect employees against discharge with- out cause and provide effective enforcement machinery in arbitration proceedings whose re- sults are enforceable under section 301 of the Labor-Management Relations Act. Leg. Hist., supra, at 1774. The legislative record demonstrates a bias in favor of arbitration rather than against it and contains a strong indication that the legislators presumed that arbitration procedures under CBAs would be available for the en- forcement of rights under ERISA including section 510 rights. Indeed, civil actions are to be regarded as arising ‘“ “in stmilar fashion to those brought under § 301 of the Labor Management Relations Act of 1947.’ H. R. Conf. Rep. No. 93-1280, p. 327 (1974) (emphasis added).”’ Metr»politan * Steelworkers v. American Mfg. Co., 363 U.S. 564 (1960); Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574 (1960); Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593 (1960). 14 Lye Insurance Co. v. General Motors Corp., 55 U.S.L.W. 4468, 4470 (U.S. April 6, 1987) Relying on a narrow and incorrect reading of the !eg- islative history of ERISA, the Third Circuit has foreclosed the use of arbitration in one of the areas under federal common labor law where it has traditionally been used to resolve problems, 1.e., in the area of pension rights. Such a reading places the circuit in conflict with this Court’s decision in Mitsubishi. 5. The Conflict Can Only Be Resolved By this Court. The Eleventh Circuit, finding that the intent of the leg- islature in ERISA allowed for arbitral resolution of dis- putes under the statute, did so in the full knowledge of differences between the Seventh Circuit in Kross and the Ninth Circuit in Amaro. The Third Circuit, in finding in Gavalik that the intent of the legislature was to prevent deferral of disputes to arbitration, did so with the full knowledge that the Seventh Circuit and the Eleventh Cir- cuit had found otherwise.'’® Thus, the circuits are in dis- agreement with each other, a disagreement which will cause increasing damage to labor-management relations in the workplace. This Court is the only judicial body that can resolve the dispute. B. Conflict and Confusion Among Lower Courts Calls for Speedy Resolution in Order to Avoid Increased Case- load and Chaos in the Labor-Management Arena. In 1986, thirty-eight cases involving disputes over ER- ISA and exhaustion were decided in federal courts. See App. at 13la-134a. With the present controversy between circuits, that number threatens to burgeon. Because of the controversy, those participating in ongoing labor-manage- ‘Although the Kross and Mason cases are not specifically mentioned in the Third Circuit’s opinion in Gavalik, the cases were called to the court’s attention in Continental's Brief of Appellee-Cross Appellant filed with the court on Feb. 14, 1986. 15 ment negotiations cannot bargain confidently for the res- olution of pension-related disputes by arbitration. Thus, controversy over pension rights/liabilities and the proper method for resolving disputes vitiates the essence of con- tract-bargained industrial peace. The plain need for reso- lution of the conflict between the circuits and the importance of a prompt resolution to industrial peace jus- tify granting certiorari in this case. II. THE THIRD CIRCUIT’S APPLICATION OF A SIX- YEAR STATUTE OF LIMITATIONS IS IN CON- FLICT WITH THE BASIC TENETS OF FEDERAL LABOR POLICY AND SEVERAL PRIOR DECI- SIONS OF THIS COURT. Few areas of the law stand in greater need of firmly defined, easily applied rules than does the subject of periods of limitations. Chardon v. Fumero Soto, 462 U.S. 650, 667 (1983) (Rehn- quist, J., dissenting). As emphasized by this Court in United Parcel Service v. Mitchell, 451 U.S. 56 (1981), and subsequently in DelCostello v. Teamsters, 462 U.S. 151, 161 (1983), Justice Rehnquist’s observation is nowhere more true than in the context of ‘‘those consensual processes that labor law is chiefly designed to promote—the formation of the collec- tive [bargaining] agreement and the private settlement of disputes under it.’’ DelCostello, 462 U.S. at 163 (explaining the need for national uniformity in the federal labor law context) (quoting UAW v. Hoosier Cardinal Corp., 383 U.S. 696, 703 (1966)). The importance of SOL uniformity has been emphasized again in a case concerning racial discrimination claims. Wilson v. Garcia, 471 U.S. 271 (19885). Disputes in the labor arena must also be resolved quickly: ‘“{O}ne of the leading federal policies in this area is the 16 ‘relatively rapid resolution of labor disputes.’ ”’ Mitchell, 451 U.S. 63 (quoting Hoosier, 383 U.S. at 707). Thus, this Court rejected such state SOL periods as that for legal malpractice (three to ten years) and that for contracts disputes (six years): This system, with its heavy emphasis on griev- ance, arbitration, and the ‘law of the shop,’ could easily become unworkable if a decision which has given ‘meaning and content’ to the terms of an agreement, and even affected subsequent modi- fications of the agreement, could suddenly be called into question as much as six years later. Mitéhell, 451 U.S. at 64. When it enacted ERISA, Congress preempted state pen- sion laws, 29 U.S.C. § 1144(a). This indicates a congres- sional intent that there be uniform federal remedies for the enforcement of pension rights. ‘‘This provision dem- onstrates that Congress ... meant to establish pension plan regulation as exclusively a federal concern.” Alessi v. Raybestos-Manhattan Inc., 451 U.S. 504, 523 (1981). See also Metropolitan Life Insurance Co. v. Genera! Motors Corp. 55 U.S.L.W. 4468 (U.S. April 6, 1987). The Third Circuit’s decision threatens to permit the very chaos warned of in Mitchell. Indeed, subsequent to the denial of their grievances, and without proceeding to ar- bitration, the petitioner’s employees brought suit in federal court, based on section 510 of ERISA, 29 U.S.C. § 1140. As in DelCostello and Mitchell, they alleged that their em- ployment was wrongfully terminated. As in those two cases the employees sought to avoid the impact of unsuccessful grievances. As in Wilson, the claims were based on dis- crimination. Because Congress has not expressly provided for limi- tations periods applicable to enforcement actions in federal court under section 502, the district court and the Third eee 17 Circuit decided to apply Pennsylvania’s residuary six-year statute to the employees’ claims. Thus, an employer’s per- sonnel decisions are subject to federal court review as much as six years after the fact. This result is not only irreconcilable with federal labor policy, it is also in direct conflict with the decisions of this Court in DelCostello, Mitchell, and Wilson. Correction of the circuit’s error is all the more impor- tant because it implicates a very fast growing area of labor law. As reported by the Pension Benefit Guaranty Cor- poration (PBGC) in its 1985 Annual Report to Congress, at 1, about 38 million American workers now participate in some 112,000 insured benefit plans under ERISA. Con- current with ERISA’s key role in the labor market, the number of ERISA cases has grown dramatically in the various courts. A substantial number of those cases have involved statute of limitations questions.'! The lack of di- rect guidance on a limitations period for ERISA-based "25 U.S.C. § 1113 provides that a three- or six-year limitations period applies to actions for violations of §§ 1101-1114 (enacting rules of fiduciary responsibility). ERISA provides no statute of limitations for actions brought pursuant to section 502 of ERISA, 29 U.S.C. § 1132, to remedy violations of other parts of ERISA. Kuntz v. Reese, 760 F.2d 926, 936 (9th Cir. 1985), op. withdrawn & decision vacated, 785 F.2d 1410 (1986). In actions under 29 U.S.C. § 1140, the following state statutes of limitations have been applied: state action for termination of employ- ment-2 years, Corkery v. SuperX Drugs Corp., 602 F. Supp. 42 (M.D. Fla. 1985); state contract action-6 years, Delisi v. United Parcel Serv. Inc., 580 F. Supp. 1572 (W.D. Pa. 1984), state period for statutory actions-6 years, Cowden v. Montgomery County Soc’y for Cancer Control, 591 F. Supp. 740 (S.D. Ohio 1984); state residuary statute of limitations- 6 years, McLendon, supra. Some courts, however, have applied ERISA’s built-in limitations stat- ute, 29 U.S.C § 1113, outside the context of a §§ 1101-1114 violation. See, e.g., Edwards v. Wilkes-Barre Pub. Co. Pension Trust, 757 F.2d 52 (8d Cir.) (action to compel recalculation of benef ts), cert. denied, 106 S. Ct. 130 (1985). 18 claims has resulted in confusion among the courts, con- siderable opportunity for forum shopping and great un- certainty for private litigants. Finally, even if the Third Circuit need not follow this Court’s teachings in DelCostello, Mitchell, and Wilson, its decision to apply a six-year statute misapplies this Court’s traditional instructions (see, e.g., Holmberg v. Armbrecht, 327 U.S. 392, 395 (1946)) for selection of a state statute of limitations. Specifically, under current Pennsylvania law no limitations period longer than two years could be ap- plied. Indeed, Gavalik is in direct conflict with the Third Circuit’s own precedent explicitly recognizing the changes in the Pennsylvania statute of limitations. A. The Gavalik Opinion is Violative of the Principles Es- poused by this Court in DelCostello and Mitchell. The Gavalik Panel correctly identified the criteria for application of the six-month statute of limitations of sec- tion 10(b) of the Labor Management Relations Act (LMRA), 29 U.S.C. 160(b) under DelCostello, supra. In attempting to apply these criteria, however, the Third Circuit panel erroneously found that: a) section 510 actions do not re- semble claims charging unfair labor practices, Slip op. at 26 (App. at 26a); b) the instant dispute does not threaten the bargaining relationship, id. at 27 (App. at 27a); and c) the desire for uniformity is not a factor because the claims are not asserted under a collective bargaining agreement. /d. 1. The Family Resemblance between Actions under Sec- tion 510 and a Charge of an Unfair Labor Practice As stated by Senator Hartke in the debate on ERISA, the language of section 510 “parallels § 8(aX3) of the NLRA.” 119 Cong. Rec. 30,374 (1973), reprinted in Leg. His., supra, at 1775. See also West v. Butler, 621 F.2d 240, 245 nn.4-5 (6th Cir. 1980). Thus, the Third Circuit’s finding that there was no family resemblance between sec- 19 tion 510 actions and charges of unfair labor practices is facially incorrect. 2. The Need for Rapid Final Resolution of Disputes where the Collective Bargaining Agreement and Pri- vate Settlement of Disputes are Implicated As in DelCostello and Mitchell, the former employees in the present case have a grievance/arbitration procedure to handle disputes pertaining to, inter alia, pension rights. Avoiding arbitration constitutes ‘‘a direct challenge to ‘the private settlement of disputes under the [collective-bar- gaining agreement].’”’ Mitchell at 66 (quoting UAW v. Hoosier Cardinal Corp., 383 U.S. at 702). Application of the six-month period of § 10(b) would strike a balance between the interests of employees in redressing griev- ances and the federal interest in industrial peace: The 6-month bar of § 10(b) is designed to strengthen and defend the ‘“‘stability of bargain- ing relationships.’ Machinists v. NLRB, 362 U.S. 411, 425. The time limitation reflects the balance drawn by Congress, ‘‘the expositor of the na- tional interest,’’ id., at 429, between the interest of employees in redressing grievances and ‘“‘vin- dicati[ng] [their] statutory rights,’’ ibid., and the “interest in ‘industrial peace which it is the over- all purpose of the Act to secure.’ ”’ Mitchell, 451 U.S. 68-69 (Stewart, J., concurring) (footnote omitted). Since pension rights are a negotiated item in many CBAs, all parties benefit from a prompt resolution of dis- putes over entitlement to pensions and actions alleging discriminatory deprivation of pension benefits. 3. The Need for Uniformity where the Formation of the Collective Bargaining Agreement and the Private Set- tlement of Disputes under it are Implicated As this Court stated in DelCostello, there is a special need for uniformity where the case involves ‘those con- 20 sensual processes that federal labor law is chiefly designed to promote—the formation of the ... agreement and the private settlement of disputes under it.’’ DelCostello at 162- 163.2 As in DelCostello, plaintiffs are attempting to avoid the applicaticy »f the grievance procedures established by the CBA. Supra, Introduction. See also 119 Cong. Rec. 30,374 (1973), reprinted in Leg. Hist., supra, at 1774 (CBAs provide enforcement through arbitration against discharge without cause) and 119 Cong. Rec. 30,400-401 (1973), reprinted in Leg. Hist., supra, at 1836-37 (union employees’ disputes on discharges handled through arbi- tration). Thus, al] the factors that led this Court to choose the six-month limitation period in DelCostello are present in the instant case. There is a recognized strong family re- semblance between the action at issue and unfair labor practice charges. In addition, the instant claim, as did the one in DelCostello, strongly implicates collective bargaining and private dispute settlement, thus raising important is- sues of uniformity and the need for rapid conflict reso- lution. If state law is applied, similar claims by employees in different states will be subject to drastically different limitations periods. As was the case in DelCostello, appli- cation of the six-month period would reflect the appro- priate balance as perceived by Congress between rapid ‘ Although the circuits have not mechanically limited DelCostelio to its strict Vaca-Sipes context, there is disagreement among the courts as to the reach of DelCostello as this Court has recognized in its denial of certiorari in Davis v. UAW, 106 S. Ct. 1284, (1986) (White J., dissenting) (conflict among the circuits concerning the application of six-month period to actions against the union under the Labor-Man- agement Reporting and Disclosure Act). See also Adams v. Gould Inc., 739 F.2d 858, 867 (3d Cir. 1984), (DelCostello not applicable in pension context), cert. denied, 469 U.S. 1122 (1985) (White, J., dissenting, with Brennan and Powell, JJ., joining) (the rule adopted by Gould “‘departs from the policy we recently announced in DelCostello of having a single statute of limitations for fair representation suits.’’). 21 conflict resolution and the need to offer plaintiffs an ad- equate remedy. B. Application of Wilson The Third Circuit’s refusal to apply a limitations period similar to that applicable under 42 U.S.C. § 1983 rep- resents an unduly narrow interpretation of Wilson and cannot be reconciled with the Third Circuit’s own prec- edent. The district court cited Knoll v. Springfield Town- ship School Dist., 699 F.2d 137, 141 (3d Cir. 1983) (‘Knoll I’’), in an interlocutory order in 1983 and analogized the employment discrimination claims of the employees to federal discrimination actions under 42 U.S.C. § 1983, which were then subject to a 6-year limitations period in Pennsylvania. Prior to the Third Circuit’s determi- nation in the present case, Knoll I was vacated, 471 U.S. 288 (1985), and federal actions under 42 U.S.C. § 1983 became subject to Pennsylvania’s two-year limitations statute. Wilson; Knoll v. Springfield Township School Dist., 763 F.2d 584 (3d Cir. 1985) (on remand—applying two-year injury statute instead of six-year residuary pe- riod). Although Congress itself analogized section 510 ERISA claims to discrimination actions, and although resort to the same limitations period as applied to discrimination actions based on race would further both the federal interest in uniformity and the relatively short limitations periods for labor claims required by DelCostello and Mitchell, supra, the Third Circuit nevertheless disavowed the analogy that had been made by the lower court, and, interpreting Wil- son v. Garcia as relevant only within its strict 42 U.S.C. § 1983 context, rejected the analogy to federal discrimi- nation claims. 1. The Analogy to Federal Discrimination Actions is Compelling. Section 510 was characterized by Congress as ‘‘a remedy for any person fired such as is provided for a person 22 discriminated against because of sex.’ 119 Cong. Rec. 30,044 (1973), reprinted in Leg. Hist., supra, at 1641. Thus, Congress intended section 510 to provide an iden- tical remedy to that existing under § 1983 cases. See also Crouch v. Mo-Kan Iron Workers Welfare Fund, 740 F.2d 805, 810 (10th Cir. 1984) (section 510 creates ‘‘a claim for retaliatory action by the employer similar to that under the civil rights laws’’). 2. The Federal Interest in Uniformity Wilson's identification of a national interest in uniform- ity was based on the remedial nature of the statute. An analogy to federal discrimination claims, whose limitations period is determined by the state limitations period ap- plicable to personal injury actions would comport with this same federal interest, and would resolve the confusion among the courts as to the period of limitations for § 510 actions. Supra, note 11. In addition, such an analogy would subject all discrimination actions, whether based upon race (42 U.S.C. § 1983) or pension (29 U.S.C. § 1140), to the same limitations period and would comport with Congress’ intent in enacting section 510. 3. The Need for Short Limitations Periods Analogy to the two-year limitations period of Wilson also comports with the federal interest in the rapid res- olution of labor conflicts. Mitchell; DelCostello.’* '* Wilson, according to the test articulated in Chevron Oil Co. v Huson, 404 U.S. 97, 106-7 (1971), applies retroactively to the action in issue. At the time this action was brought there was no precedent upon which the plaintiffs could reasonably have relied to expect that a court would apply a six-year limitations period. Moreover, even if plaintiffs could foresee that the Court would liken their claims to actions under 1983 (which they could not), their action predates the Third Circuit's decisions in Knoll v. Springfield Township School Dist., 699 F.2d 137 (1983) and Perri v. Aytch, 724 F.2d 362 (1983) establishing a six-year limitations period to § 1983 actions. See Smith v. City of Pittsburgh, 23 C. State Limitations Periods Even if actions under section 510 are not subject to the statute of limitations provisions identified in DelCostello and Wilson, the Third Circuit’s decision to apply a six- year period is violative of the principles imposed by this court on the selection of limitations periods when no suit- able federal alternatives are available and is in conflict with the Third Circuit’s own precedent. The Third Circuit premised its use of a six-year period on the assumption that this is the period applicable to actions for employment discrimination in Pennsylvania. Gavalik at 16." There is no specific limitations period in Pennsylvania for actions for employment discrimination. Thus, for SOL purposes, Third Circuit precedent has uniformly analogized discrimination claims to common law actions for tortious interference. Knoll IJ, 699 F.2d at 141 (‘‘We have anal- ogized a claim of employment discrimination brought under the federal Civil Rights Acts, to ‘those torts which involve the wrongful interference with another’s economic rights or interests.’ ’’), quoting Skehan v. Board of Trustees, 590 F.2d 470, 477 (3d Cir. 1978), in turn quoting Davis v. United States Steel Supply, 581 F.2d 335, 339 (8d Cir. 1978).'° 764 F.2d 188, 195 (3d Cir. 1985) (applying Wilson retroactively to 1983 action where action brought prior to Knoll and Perri); Malley-Duff & Associates v. Crown Life Ins. Co., 792 F.2d 341, 345 n.10 (3d Cir.), cert. granted, 107 S.Ct. 509 (1986). ‘* The court in Gavalik cites only one state court opinion that supports its holding: Skehan v. Bloomsburg State College, 503 A.2d 1000 (Pa. Commw. 1986). The applicable SOL was not a matter of dispute in that case. '‘’ See also Mazzanti v. Merck Co., 770 F.2d 34, 35 (3d Cir. 1985), citing Knoll I (supra) and Fitzgerald v. Larson, 741 F.2d 32, 36 (3d Cir. 1984), vacated on other grounds, 472 U.S. 1051] (1985) (action alleging discharge based on political affiliation); Meyers v. Pennypack 24 Pursuant to the revised Pennsylvania SOL, common law actions for tortious interference are now subject to a two- year period. Home for Crippled Children v. Erie Insurance Exchange, 130 P.L.J. 480 (Allegheny County Court of Com- mon Pleas 1982), aff'd mem., 329 Pa. Super. 610, 478 A.2d 84 (1984) (discussing at length the effect of the changes in the Pennsylvania statute of limitations); Bender v. Mcllhatten, 520 A.2d 37 (Pa. Super. Ct. 1987). This state court interpretation of the applicable SOL has been spe- cifically adopted by the Third Circuit. Mazzanti, 770 F.2d at 34. Thus, the Third Circuit’s analogy in Gavalik to a 6-year residual period is erroneous on its face. Ill. THE THIRD CIRCUIT’S “A DETERMINATIVE FACTOR”? TEST FOR CAUSATION IN MIXED- MOTIVE DISCRIMINATION CASES CONFLICTS WITH THIS COURT’S “SAME DECISION” TEST. In mixed-motive discrimination cases, this Court has ap- plied a ‘‘same decision’’ test to determine causation. Mt. Healthy City School District Board of Education v. Doyle, 429 U.S. 274 (1977); Arlington Heights v. Metro Housing Corp., 429 U.S. 252 (1977); East Texas Motor Freight Sys- tem, Inc. v. Rodriguez, 431 U.S. 395 (1977). The test is: 1. The employee must first show that the pros- cribed factor is a ‘‘motivating’’ or ‘‘substantial”’ factor in the employer’s personnel action. Woods Home Ownership Ass'n, 559 F.2d 894, 904 (3d Cir. 1977). Statutory discrimination claims in Pennsylvania, another possible analogy, are subject to limitations periods of two years or less. See, e.g., Pa. Stat. Ann. tit. 43, § 336.5 (Purdon 1986 Supp.) (two years for wage discrimination on the basis of sex); Pa. Stat. Ann. tit. 43, § 959(g) (Purdon 1986 Supp.) (complaints alleging discrimination in an employment context must be filed with the Pennsylvania Human Re- lations Commission within 90 days after the act); Pa. Stat. Ann. tit. 43, § 1101.1505 (Purdon 1986 Supp.) (four-month period for filing of unfair labor practice charge). 25 2. If the employee carries this burden, the em- ployer may defeat liability by proving by a pre- ponderance of the evidence that it would have reached the same decision even in the absence of the proscribed factor. As described in Mt. Healthy at 287. In Gavalik, after an extensive trial, the district court found permissible and non-permissible motives, but con- cluded that the same results would have occurred in any event. Gavalik, Findings of Fact and Conclusions of Law, FF 106, 107, 141, 142 (Sept. 24, 1985) (App. at 86a, 90a). The appellate court reversed, believing that the trial court had misapplied the burdens of proof. Slip op. at 53- 56 (App. at 52a-54a.) However, rather than remand the case to the district court for reconsideration of the evi- dence in light of the corrected standard and permitting such supplemental proceedings as might have been war- ranted, the Third Circuit held that liability had been es- tablished. Slip op. at 63 (App. at 60a-61a.) In so doing, the Third Circuit effectively eliminated petitioner’s opportunity to present any defense against the alleged liability. The Third Circuit ignored the findings of fact by the tria! judge, ignored the due process require- ments of the Constitution, and ignored the Mt. Healthy standard clearly articulated by this Court. The Third Circuit’s approach was based on ‘‘a deter- minative factor’ test for causation’® similar to the ‘‘in '* Maxfield v. Sinclair Int'l, 766 F.2d 788, 791 (3d Cir. 1985), cert. denied, 106 S.Ct. 796 (1986) (The plaintiff must prove that age was a determining factor); Bellissimo v. Westinghouse Elec. Corp., 764 F.2d 175, 179 (3d Cir. 1985), cert. denied, 106 S.Ct. 1244 (1986) (‘‘The ‘but for’ test does not require a plaintiff to prove that the discriminatory reason was ‘the’ determinative factor, but only that it was ‘a’ deter- minative factor.”’); Dillon v. Coles, 746 F.2d 998, 1005 (3d Cir. 1984); Duffy v. Wheeling Pittsburgh Steel Corp., 738 F.2d 1393, 1395 (3d Cir. a 26 part’”’ test for causation expressly rejected by this Court in Mt. Healthy. A. Application of the Third Circuit’s ‘“‘A Determinative Factor’’ Test in Gavalik Conflicts with Decisions of this Court. The Third Circuit explained its standard in Gavalik: “{slimilarly, § 510 of ERISA requires no more than proof that the desire to defeat pension liability is a ‘determi- native factor.’’’ Slip op. at 54 (App. at 52a). Under the Third Circuit’s test, a plaintiff establishes liability by a showing that the alleged proscribed motive is ‘‘a deter- minative” factor even if the defendant proves by a pre- ponderance of the evidence that the ‘‘same decision’ would have occurred absent the proscribed motive. The basic error committed by the Third Circuit in Gav- alik lies in denying the defendant/employer the entitlement to defeat liability to the plaintiff class by proving that the challenged employment actions were caused by legitimate non-discriminatory reasons. Notwithstanding the trial court’s holding of no liability in conformance with this Court’s teachings, the Third Cir- cuit held that the plaintiff’s evidence ipso facto established liability. It did not remand the case to the trial court to afford the defendant its due process right of showing by a preponderance of the evidence that the challenged em- ployment actions would have occurred absent the pros- cribed motive. Hazelwood School District v. United States, 433 U.S. 299 (1977). The Third Circuit apparently recog- nized that the defendant/employer has a right to prove that legitimate non-discriminatory reasons caused the chal- lenged actions but with its remand order is allowing the defendant/employer only to limit damages to individual 1984), cert. denied, 469 U.S. 1087 (1984); Lewis v. Univ. of Pittsburgh, 725 F.2d 910 (3d Cir. 1983), cert. denied, 469 U.S. 892 (1984); Smithers v. Bailar, 629 F.2d 892, 898 (3d Cir. 1980). 27 plaintiffs with such a showing. Slip op. at 68-69 (App. at 65a.) On remand, the plaintiffs are entitled to a presump- tion of liability. The Third Circuit’s holding in Gavalik conflicts with decisions of this Court in which defendants in mixed-mo- tive discrimination cases can refute liability with proof that their challenged action was caused by a legitimate motive or that the same decision would have been made absent the proscribed factor. This test of causation is pervasive in labor and discrimination cases of all kinds.'? The mixed- motive burden of proof procedure that has been applied by this Court in other types of discrimination cases is equally applicable to allegations of pension discrimination. B. The Third Circuit Panel Incorrectly Applied the Same Decision Test at the Wrong Stage of the Case. Both the plaintiffs’ and the defendant/employers’ show- ing as to causation must occur before the trier of fact can determine liability vel non to the class. See Teamsters, 431 U.S. at 361; Cooper v. Federal Reserve Bank of Richmond, 467 U.S. 867, 875 (1984). ‘* Whether based on: a) race, color, or national origin under civil rights statutes, 42 U.S.C. §§ 2000 et seg. and 42 U.S.C. §§ 1981 and 1983 (Texas Dept. of Community Affairs v. Burdine, 450 U.S. 248 (1981); Regents of the Univ. of Cal. v. Bakke, 438 U.S. 265 (1978); Hazelwood School Dist. v. United States, 433 U.S. 299 (1977); Dothard v. Rawlinson, 433 U.S. 321 (1977); Teamsters v. United States, 431 U.S. 324 (1977); East Texas Motor Freight Sys., Inc.), b) race under the Fair Housing Act, 42 U.S.C. §§ 3601 et seg., (Arlington Heights v. Metro Hous. Corp., 429 U.S. 252 (1977)); c) union activity under the Labor Management Relations Act, 29 U.S.C. §§ 141 et seg. (NLRB v. Transp. Management Corp., 462 U.S. 393 (1983); Wright Line, 251 NLRB 150 (1980), enforced, 662 F.2d 899 (1st Cir. 1981), cert. denied, 455 U.S. 989 (1982)); d) age uncer the Age Discrimination in Employ- ment Act, 29 U.S.C. §§ 621 et seg., (Pace v. So. Ry. System, 701 F.2d 1383. 1385-88 (11th Cir. 1983), cert. denied, 464 U.S. 1018 (1983)); or e) the Equal Protection Clause of the 14th Amendment to the Con- stitution of the United States (Arlington Heights v. Metro Hous. Corp., supra). 28 The Third Circuit permits application of the “‘same de- cision” test in Gavalik only after it has found liability to the class. Gavalik at 62, 64 (App. at 59a-60a, 61a.) The Third Circuit has erred because under the above- cited precedents of this Court, the defendant’s burden of proving that the same result would have occurred absent the proscribed motive is an integral part of the liability phase of the case. The Third Circuit itself has previously recognized that this is true.’ The court’s decision even conflicts with the Eleventh Circuit cases upon which it relied at 46 and 47 (App. at 45a-46a), because in those cases, the employer was allowed to refute liability by proving that the same result would have occurred absent the proscribed factor. Lee v. Russell County Board of Education, 684 F.2d 769 (11th Cir. 1982); Bell v. Birmingham Linen Service, 715 F.2d 1552, 1556- 57 (11th Cir. 1983), cert. denied, 467 U.S. 1204 (1984). The Panel’s error can readily be seen by comparing the following two quotes, the first from Gavalik and the sec- ond from Lewis v. University of Pittsburgh: The district court erred, however, in not recog- nizing that appellants carried their burden of proof on causation by establishing that Continen- tal’s challenged decisions were motivated by both permissible and impermissible factors. Slip op. at 68. In Dillon v. Coles, 746 F.2d 998 (3d Cir. 1984), the court stated: Included in the defendant’s rebuttal would be evidence that absent discrimination the plaintiff would not have been hired or promoted because of lack of qualifications, curtailment of operations, or similar matters. This burden of production resting on the employer goes to liability, not relief, and is governed by Burdine. Id. at 1004-05. a a A lll late dene 29 There may be several determinative factors which lead to any given decision, all of which can be “but for’’ causes of the challenged action. The ultimate ‘“‘but for’’ test, however, subsumes within its determination all such factors. Lewis, 725 F.2d at 917 n.8 (3d Cir. 1983). Under Mt. Healthy the ultimate ‘‘but for’’ test is, would the ‘“‘same decision” have occurred absent the prescribed factor? The Third Circuit’s decision in Gavalik holds that there is class liability based on an impermissible motive regardless of the existence of other legitimate motives and regardless of the district court’s findings of fact that the same results would have occurred in any event. Motive and causation are essential elements of a section 510 violation under ERISA. Assuming arguendo, that this Court holds that the Third Circuit’s test for causation is permissible, the Third Circuit nevertheless misapplied the test here. Normally, appellate courts do not consider issues which have neither been presented at trial nor decided by the district court. Singleton v. Wulff, 428 U.S. 106, 119 (1976); Hormel v. Helvering, 312 U.S. 552, 556 (1941). The Third Circuit has erred in deciding issues concerning a discrim- inatory ‘“‘plan’”’ and ‘‘recalls’’ which were not addressed by the district court. The trial court did not reach a conclusion concerning an alleged discriminatory ‘‘plan’’. Gavalik, at 40 (App. 40). Continental argued on appeal that the “‘plan’’ was not before the district court. Gavalik, at 41 n.34 (App. at 41a). Nevertheless, the circuit court held that the ‘“‘plan” was violative of section 510 and corrected its opinion on plaintiffs’ petition to permit damages for failure to recall. The panel looked only to the allegations contained in the complaint (id.) and ignored how the plaintiffs had expressly 30 waived issued other than layoffs at trial. (record in Gav- alik, joint appendix at 418, 469, 470, 766). The Panel’s de novo review of the record and its opinion concerning issues not decided below was violative of the appropriate standards of appellate review. CONCLUSION For all of the above reasons, this Court should grant a writ of certiorari in order to resolve conflicts between the circuits and with the opinions of this Court over 1) the question of whether Congress in enacting ERISA intended to prevent an employer from enforcing a provision in a collective bargaining agreement to arbitrate any pension related differences, 2) the proper statute of limitations to be applied to claims based on section 502 of ERISA, 29 U.S.C. § 1132, and 3) the right of a mixed-motive dis- crimination action defendant to defend itself with a pre- ponderance of evidence. As it has demonstrated throughout the petition, these issues are of great import, affecting the lives of millions of workers and thousands of companies, and because of the extent of inter-circuit controversy, inconsistency with this Court’s opinions, and general confusion, may only be resolved by this Honorable Court. The Continental Can Company strongly urges the Mem- bers of the Court to grant a writ of certiorari in the present action. SIRS” eA AEs a 8 eae JAMES D. MORTON SAMUEL W. BRAVER BUCHANAN INGERSOLL, P.C. 600 Grant Street Pittsburgh, Pa. 15219 (412) 562-8800 Of Counsel: DANIEL M. CARSON Associate General Counsel Continental Can Company 800 Connecticut Avenue P.O. Box 5410 Norwalk, Conn. 06856 Respectfully submitted, EUGENE L. STEWART Counsel of Record TERENCE P. STEWART GEERT DE PREST WILLIAM A. FENNELL VINCENT J. BRANSON STEWART & STEWART 1001 Connecticut Avenue, N.W. Washington, D.C. 20036 (202) 785-4185 APPENDIX en thay Seon —=—" bi es — ’ \ - . ° f la UNITED STATES COURT OF APPEALS FOR THE THIRD DISTRICT Nos. 85-3597 and 85-3615 RoBERT GAVALIK, FRANK GRELO, JOSEPH URBAN, ANTHONY ULYAN, DONALD A. BERGER, RONALD CLARKE, HENRY FosTER, GEORGE PATTERSON, JOSEPH KELLERMAN, ROBERT PAVLIK, PHILLIP FARLEY, THOMAS RILEY, THOMAS WARREN and FRANCIS HUMENIK Vv. CONTINENTAL CAN COMPANY (D.C. Civ. No. 81-1519) ALBERT J. JAKUB, FRED CIPRIANA, JR., ANTHONY J. BERNARDO, THOMAS A. MULLIGAN, WILLIAM T. TARR, DoNALD W. ROBERTS, ERNEST WIRBECKI and GEORGE W. STEPANIC on behalf of themselves ‘and others similarly sit- uated ALFRED BORRELLI, JR., MICHAEL D1 IorI0, ANTHONY FoLino, THOMAS E. JOHSTON, ROBERT KAPOLKA, JOHN C. KINCEL, PETER A. RUMAIN, HARRY H. SMITH, MELVIN J. SMITH, JACK A. STULL and ERNEST B. TADDEO, on behalf of themselves and others similarly situated Vv. CONTINENTAL CAN COMPANY, a member of Continental Group, Inc. (D.C. Civ. No. 82-1995) ROBERT GAVALIK, et al. and ALBERT J. JAKUB, et al., Appellants in No. 85-3597 CONTINENTAL CAN ComPANy, U.S.A., a member of the Continental Group, Inc., Appellant in No. 85-3615 2a (D.C. Civ. Nos. 81-1519; 82-1995) SUR PETITION FOR REHEARING Present: GIBBONS, Chief Judge, SeITz, ADAMS,* WEIS, HIGGINBOTHAM, SLOVITER, BECKER, STAPLETON, and MANSMANN, Circuit Judges. The petition for rehearing filed by Continental Can Com- pany in the above-entitled case having been submitted to the judges who participated in the decision of this Court and to all the other available circuit judges of the circuit in regular active service, and no judge who concurred in the decision having asked for rehearing, and a majority of the circuit judges of the circuit in regular active service not having voted for rehearing by the Court in banc, the petition for rehearing is denied. BY THE COURT, /s/ A LEON HIGGINBOTHAM Circuit Judge Dated: February 19, 1987 * Honorable Arlin M. Adams, United States Circuit Judge, was pres- ent when this case was heard, but did not participate in the decision. mittens Be att A, - re 3a UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT Nos. 85-3597 and 85-3615 ROBERT GAVALIK, FRANK GRELO, JOSEPH URBAN, ANTHONY ULYAN, DONALD A. BERGER, RONALD CLARKE, HENRY FOSTER, GEORGE PATTERSON, JOSEPH KELLERMAN, ROBERT PAVLIK, PHILLIP FARLEY, THOMAS RILEY, THOMAS WARREN and FRANCIS HUMENIK We CONTINENTAL CAN COMPANY (D.C. Civ. No. 81-1519) ALBERT J. JAKUB, FRED CIPRIANA, JR., ANTHONY J. BERNARDO, THOMAS A. MULLIGAN, WILLIAM T. TARR, DONALD W. ROBERTS, ERNEST WIRBECKI and GEORGE W. STEPANIC on behalf of themselves and others similarly sit- uated ALFRED BORRELLI, JR., MICHAEL D1 IoRIO, ANTHONY FoLino, THOMAS E. JOHSTON, ROBERT KAPOLKA, JOHN C. KINCEL, PETER A. RUMAIN, HARRY H. SMITH, MELVIN J. SMITH, JACK A. STULL and ERNEST B. TADDEO, on behalf of themselves and others similarly situated . a CONTINENTAL CAN COMPANY, a member of Continental Group, Inc. (D.C. Civ. No. 82-1995) ROBERT GAVALIK, et al. and ALBERT J. JAKUB, et al., Appellants in No. 85-3597 CONTINENTAL CAN ComPANY, U.S.A., a member of the Continental Group, Inc., Appellant in No. 85-3615 4a (D.C. Civ. Nos. 81-1519; 82-1995) SUR PETITION FOR PANEL REHEARING Present: ADAMS,* WEIS and HIGGINBOTHAM, Circuit Judges. In light of the corrected opinion filed February 19, 1987, the petition for rehearing filed by Robert Gavalik, in the above-entitled case and submitted to the judges who par- ticipated in the decision of this Court is thereby rendered moot. BY THE COURT, /s/ A. LEON HIGGINBOTHAM Circuit Judge Dated: February 19, 1987 * Honorable Arlin M. Adams, United States Circuit Judge, was pres ent when this case was heard, but did not participate in the decision 5a CORRECTED OPINION UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT Nos. 85-3597 and 85-3615 ROBERT GAVALIK, FRANK GRELO, JOSEPH URBAN, ANTHONY ULYAN, DONALD A. BERGER, RONALD CLARKE, HENRY FOSTER, GEORGE PATTERSON, JOSEPH KELLERMAN, ROBERT PAVLIK, PHILLIP FARLEY, THOMAS RILEY, THOMAS WARREN and FRANCIS HUMENIK We CONTINENTAL CAN COMPANY (D.C. Civ. No. 81-1519) ALBERT J. JAKUB, FRED CIPRIANA, JR., ANTHONY J. BERNARDO, THOMAS A. MULLIGAN, WILLIAM T. TARR, DONALD W. ROBERTS, ERNEST WIRBECKI and GEORGE W. STEPANIC on behalf of themselves and others similarly sit- uated ALFRED BORRELLI, JR., MICHAEL D1 IorIO, ANTHONY FOLINO, THOMAS E. JOHSTON, ROBERT KAPOLKA, JOHN C. KINCEL, PETER A. RUMAIN, HARRY H. SMITH, MELVIN J. SMITH, JACK A. STULL and ERNEsT B. TADDEO, on behalf of themselves and others similarly situated V. CONTINENTAL CAN COMPANY, a member of Continental Group, Inc. (D.C. Civ. No. 82-1995) ROBERT GAVALIK, et al. and ALBERT J. JAKUB, et al., Appellants in No. 85-8597 CONTINENTAL CAN CoMPANY, U.S.A., a member of the Continental Group, Inc., Appellant in No. 85-3615 6a On Appeal from the United States District Court for the Western District of Pennsylvania (D.C. Civ. Nos. 81-1519; 82-1995) Argued: June 6, 1986 Before: ADAMS,* WEISS and HIGGINBOTHAM, Circuit Judges. (Filed February 19, 1987) Michael H. Gottesman, Esq. (ARGUED) BREDHOFF AND KAISER 1000 Connecticut Ave., N.W. Washington, D.C. 20036 Roslyn M. Litman, Esq. LITMAN, LITMAN, HARRIS & Brown, P.A. 1701 Grant Building Pittsburgh, PA 15219 Attorneys for Robert Gavalik, et al. and Albert J. Jakub, et al. Samuel W. Braver, Esq. James D. Morton, Esq. (ARGUED) BUCHANAN INGERSOLL, PROFESSIONAL CORP. 57th Floor, 600 Grant Street Pittsburgh, PA 15219 Eugene L. Stewart, Esq. (ARGUED) STEWART AND STEWART 1001 Connecticut Avenue Washington, DC 20036 Attorneys for Continental Can * Honorable Arlin M. Adams, United States Circuit Judge, was pres- ent when this case was heard, but did not participate in the decision. OPINION OF THE COURT A. LEON HIGGINBOTHAM, JR., Circuit Judge. This litigation originated in two separate class actions, Gavalik, et al. v. Continental Can Co., C.A. No. 81-1519, filed September 18, 1981, and Jakw), et al. v. Continental Can Co., C.A. No. 82-1995, filed September 27, 1982, al- leging that the institution and implementation of a “‘lia- bility avoidance’? scheme by Continental Can (“‘Continental’’) operated to prevent employees from at- taining eligibility for employee benefits in violation of § 510 of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1140 (1982).! The cases were consolidated on January 17, 1984, and a single class action was certified. The trial of the consolidated action was bi- furcated on the issues of liability and damages. The liability phase of the litigation commenced on July 22, 1985, and concluded on August 8, 1985. On September 24, 1985, the district court entered judgment for the defendant, and the plaintiffs appealed to this Court. Continental has cross- appealed asserting that plaintiffs’ caims before the district court were barred by the applicable statute of limitations and/or plaintiffs’ failure to exhaust their administrative remedies. We reject the contentions of the cross-appeal, ' — Section 510 provides, in pertinent part: Interference with protected rights. It shall be unlawful for any person to discharge, fine, suspend, expel, discipline, or discriminate against a participant or benefi- ciary for exercising any right to which he is entitled under the provisions of an employee benefit plan, ... or for the purpose of interfering with the attainment of any right to which such par- ticipant may become entitled under the plan .... 29 U.S.C. § 1140 (1982). 8a and because we find that the district court misallocated the burdens of proof, we will reverse and remand for proceedings consistent with this opinion.? I. BACKGROUND FACTS Continental Can is a corporation principally engaged in the business of manufacturing cans. Appellants and the class they represent® are former employees of Continen- tal’s Pittsburgh plant, which is the focus of this litigation. During the relevant period, appellants were all members of Local 4337 of the United Steelworkers of America, AFL- CIO (‘“‘USW’”’), which was their recognized collective bar- gaining agent. In 1977, Continental and the USW negotiated a collec- tive bargaining agreement under which Continental was to provide a comprehensive employee benefit plan. As part of this benefit package, Continental agreed to provide two pension plans for employees who experience a break in continuous service of at least two years.‘ Under the ‘‘70/ 2 The parties have diligently advanced several positions in support of their various claims, some of which are not discussed in the text of this opinion. We have fully considered all arguments raised but have limited our discussion to those we deem central to our holding in this case. * The class certified by the district court consists of: all Continental employees who did not achieve eligibility for Rule of 65 or 70/75 pension benefits who were determined by Conti- nental to be permanently laid off in 1976, 1977 or 1978 because of Continental’s decision to cap the Pittsburgh plant, including but not limited to all employees whose names fall below Francis Conti's on Continental’s seniority roster. Jt. App. at 175. ‘ Continental's employee benefit plan also provided vision, health, life and disability insurance benefits, supplemental unemployment ben- efits, and vacation and wage benefits. See Findings of Fact (‘“‘FF’’) 23- 27. 9a 75 pension,’”’ an employee could qualify for pension benefits before reaching age sixty-two, if s/he either (a) had at least fifteen years of continuous service,® was fifty years of age or older and had combined age and service equal to or more than seventy years; or (b) had at least fifteen years of continuous service and combined age and service equal to or more than seventy-five. The “Rule of 65” pension’ was paid to employees with at least twenty years of continuous service on the last day worked, whose com- bined age and years of service was equal to sixty-five or more but less than seventy-five. Although the 70/75 pen- sion plan had been in effect since 1971, the Rule of 65 was first formally proposed by the USW during the 1977 negotiations.* Continental’s obligation to pay 70/75 and * Regular continuous service commenced on the day an employee was hired. A break occurred if the employee was absent for more than two years due to (a) layoff, (b) approved leave of absence, (c) physical disability, or (d) permanent plant shutdown where the employee did not elect to receive severance allowance. See FF 19. * Ordinarily, at age sixty-two an employee who had completed ten years of credited service could elect to retire and receive a normal pension. The normal pension consisted of an initial lump sum allowance, covering the first three months of retirement, with subsequent monthly payments based on years of service and job classification. See FF 9. The 70/75 pension was equal to the normal pension plus a monthly supplement that continued until the employee became eligible for Social Security. This benefit was equal to a normal pension, reduced by the amount of income earned by the employee during layoff. See FF 15. * Although the Rule of 65 pension plan was first formally proposed by the USW in October 1977, Continental bargaining officials knew prior to the commencement of the 1977 negotiations that the USW would demand the Rule of 65 plan. The steel, aluminum and can in- dustries engage in ‘‘pattern bargaining,’’ whereby the same terms, ben- efits and conditions adopted by the USW and any of these industries is usually requested in the other industries. USW had negotiated a Rule of 65 pension plan with the steel industry in April of 1977 and the aluminum industry in May of 1977. Prior to the negotiations with the can industry, Continental was provided with a copy of the steel in- 10a Rule of 65 benefits under the agreement arose when em- ployees, after attaining the requisite eligibility, experienced at least a two-year break in service as the result of a plant shutdown, involuntary layoff or absence due to physical disability. For the purposes of entitlement to these ben- efits, years of service included the first two years following a layoff. This method of calculation was known as the “creep.” Under the creep, recall of a laid off employee for even one day commenced a new two-year continuous service period. See FF 20, 38. Under the 70/75 pension plan, an employee could creep into the necessary age and service requirement. Under the Rule of 65 plan, an em- ployee could creep only into the age requirement. See FF 21-22. In addition to the break-in-service pension benefits, USW and Continental in 1977 negotiated a change in the sen- iority system. Prior to the negotiations, the Pittsburgh plant had operated under a departmental seniority system.° In April of 1977, Continental officials had initiated meet- ings with USW officials to discuss the possibility of im- plementing plant-wide seniority’? at the Pittsburgh plant. That summer, local union representatives at the Pittsburgh plant met with Continental officials to negotiate the plant- dustry’s agreement from the USW. Although many of the details of the Rule of 65 plan were unavailable, Continental was aware that it involved a twenty-year service requirement and that payments there- under would be triggered in the event of a plant shutdown or extended involuntary layoff. See FF 80-83. * Under departmental seniority, each department constitutes a sep- arate unit within a plant. An employee’s length of service in one de- partment under this system has no bearing on his or her competitive seniority in another department. As a result, under departmental sen iority employees with greater seniority could be laid off in one de- partment while employees with fewer years of service were retained in another. See FF 71. © Under plant-wide seniority, an employee with greater seniority has work priority over any employee throughout the plant who has less seniority. See FF 72. ee | lla wide seniority system. USW favored the change over to plant-wide seniority for two reasons: the departmental sen- iority system had elicited charges of discrimination by the Equal Employment Opportunity Commission (EEOC), and the plant-wide seniority system would provide maximum job security for its most senior employees. See FF 73. Continental favored plant-wide seniority because it would enable the company (1) to retain its most senior and skilled employees; (2) to retain employees with vested 70/75 and Rule of 65 pension benefits; and (3) to lay off junior em- ployees whose benefits had not yet vested. See FF 74. Ultimately, on October 28, 1977, Continental and the local union formally agreed to institute a plant-wide seniority system at the Pittsburgh plant effective November 1, 1977. See FF 112-13, 118, 122. A. The “Liability Avoidance’’ Program In the mid-1970s, Continental began experiencing a steady decline in business. This decline was principally a result of new manufacturing processes that required fewer | plants, the increasing use by the can industry of composite materials and aluminum instead of steel to produce cans, | and a growing trend among Continental’s customers to begin to manufacture their own cans. See FF 31-32. Con- tinental, as part of an effort to control and reduce its | anticipated costs in light of its declining business," in 1976 devised a “‘liability avoidance’”’ program.’* In order to im- 11 In 1972 and again in 1976, Continental created reserve funds to cover its anticipated costs (including employee benefits such as con- tinued insurance coverage, supplemental unemployment benefits and 70/ 75 pensions) in the event, inter alia, of a plant shutdown. The 1972 reserve—the Extra Charge Authorization (‘“‘ECA’’)—consisted of $231 million at the time of creation. By 1976, however, the ECA had been substantially consumed. The 1976 reserve—the Plant Utilization Pro- gram (‘“‘PUP’’)—was established in an amount in excess of $100 million. See FF 43-45. 2 Continental so labeled the program in its internal memoranda. See FF 68. 12a plement effectively this program, Continental developed an intricate system called the Bell System. The concept com- ponent of the Bell System, Bell I, had two complementary objectives: to identify Continental’s unfunded pension lia- bilities so as to avoid triggering future vesting by placing employees who had not yet become eligible for break-in- service on layoff, and to retain those employees whose benefits had already vested. See FF 53, 59, 68. Under Bell I, Continental developed a ‘“‘cap and shrink”’ program. It defined a ‘‘cap’’ as a workforce reduction de- signed to reduce unfunded liabilities; a ‘‘shrink’’ was a workforce reduction resulting from market or manufac- turing conditions. See FF 54. The decision whether to cap a particular plant was made on the basis of a variety of economic factors at the plant, including its potential em- ployee benefits costs. The determination of an actual cap level was based on Continental’s assessment of the needed level of production to meet projected sales.'* The cap-line limited employment to a specific name on the seniority roster'* and was effective for five years. Employees below the cap-line, whether then at work or on temporary layoff, were designated as ‘‘permanently laid off,’’ and could not be recalled for five years'® except under extreme circum- stances, and then only with prior approval from the high- ‘8 Prior to the institution of the cap program, the employment level was based on projections of the required manpower needed to produce anticipated volumes of Continental products. After the cap program was adopted, the volume of business was tailored to meet the predetermined desired level of employment. See FF 60-61. ‘* The cap-line did not determine the actual number of employees working at a given point in time. As employees within the capped workforce died, quit or retired, the number of employees actually on the job decreased. Thus, the cap-line merely divided those employees eligible for work under the liability avoidance program from those des- ignated as permanently laid off. See FF 66; Jt. App. 1074; 340-41. ‘8 Under the USW contract, employees lost all rights to recall after five years. 13a est level of Continental’s management. See FF 54-57. These employees were not informed by Continental that they would not be recalled. To further effectuate the goals of the Bell System, Bell II instructed plant managers to adjust their business vol- ume to the desired level of employment. In accordance with this plan, plant managers were authorized to shift business to plants that either had low unfunded pension liability or plants that needed the work in order to retain employees with vested 70/75 benefits. See FF 61, 63; Jt. App. at 1367. In addition, Bell II produced and employed scattergraphs—computerized charts that listed the age and service of Continental employees at a given time—to iden- tify the unfunded 70/75 and Rule of 65 liabilities and to ascertain when payments under those plans would be trig- gered. By looking at a scattergraph, a plant manager could determine the number of USW employees whose rights for 70/75 and Rule of 65 benefits had already vested and those whose rights had not yet vested.'® See FF 64. Finally, in April of 1977, a “‘liability avoidance tracking system’’—the ‘“‘Red Flag’’ System—was instituted in order to prevent inadvertent recalls of employees designated as permanently laid off. Red Flag was tied to Continental's payroll system and was designed to generate automatically a red flag report to alert top Continental officials when- ever a permanently laid off employee received a pay check either for actual hours worked or vacation. See FF 69-70. ‘© The Inter Plan Job Opportunities (‘‘IPJP’’) potentially compli- cated the plant managers’ determination of which employees were in the vested or non-vested categories. Under the collective bargaining agreement, USW employees laid off from one plant could transfer to another plant where they had preferential hiring rights. Thus, an em- ployee on permanent layoff status at one plant could in fact continue working in another plant. The requirement that an employee perma- nently laid off not be recalled for five years, however, directly coincided with the five-year limitation on an employee's preferential recall rights under the collective bargaining agreement. See FF 67. l4a B. The Pittsburgh Plant and the Closing of the Pail Line Like Continental’s overall situation, the Pittsburgh plant experienced a significant decline in business in the mid- 1970s. As a result, a number of the plant’s production lines were closed, and, in 1975, the Pittsburgh plant be- came a service center, producing parts for other plants, instead of a factory that made and assembled the entire can. Pittsburgh’s pail line, which manufactured large gal- lon steel containers, however, remained in operation. In 1975, the pail line was designated as a separate plant in order to determine its profitability. Despite the separate designation, the Pittsburgh plant and the pail line contin- ued to share a seniority roster. See FF 91-93. Sometime in 1976, the Pittsburgh plant was selected, in part because of its potentially high unfunded liability costs, as a “concept development”’ plant for implementing Con- tinental’s liability avoidance program. See FF 62; Jt. App. 1385. In June of 1976, Continental’s Executive Vice Pres- ident and General Manager of Continental Can Company, USA, Donald Bainton, approved a cap for the Pittsburgh plant of 574 USW employees, to be achieved by the end of 1976, and a second cap of 417 USW employees, to be achieved by the end of 1977. Subsequently, in January of 1977, a Continental official indicated that the ‘‘ideal cap level” for the Pittsburgh plant, “disregarding volume as- sumptions and other factors except long range people li- ability costs,” i.e., unfunded pension liabilities, was 392 USW employees as opposed to the previous recommen- dation of 417 USW employees. See Jt. App. 1250. A cap was not set for employees represented by the other two unions at the Pittsburgh plant. In early 1977, the manager of the pai! line recommended moving the operation to a new location in order to increase its profitability. By the summer of 1977, Continental of- ficials had decided to close the pail line. See FF 105. This 15a decision was based in part on Continental’s desire to pre- vent employees from attaining eligibility for 70/75 and Rule of 65 benefits. Continental also considered the pail line’s unprofitability at the Pittsburgh location in determining that it should be closed. See FF 101-02, 105-07. In the summer of 1977, Continental informed the USW and the Pittsburgh local union representatives of its de- cision to close the pail line. During this time Continental was also pursuing an agreement to implement a plant-wide seniority system at the Pittsburgh plant. In exchange for Continental’s promise to use its best efforts to retain em- ployees with twenty years or more of service, the local union agreed to plant-wide seniority. Thereafter, a twenty- year cap-line was drawn under the name of Francis Conti. The 417 USW employee cap for 1978 was increased to 472, which included 436 USW employees above Conti or the twenty-year cap-line, and 36 skilled employees below the cap-line. See FF 117-122. The pail line was closed after Continental and the union formally agreed to implement plant-wide seniority, resulting in the elimination of one- hundred and eleven jobs. See FF 132-133. Il. PROCEDURAL HISTORY In the proceedings before the district court, the appellants, all of whom were permanently laid off from the Pittsburgh plant between January 1976 and May 1978," "As to the lead plaintiffs in the consolidated actions, the district court found that Robert Gavalik was laid off on January 1, 1978, at which time he was forty years old and had nineteen years and seven months of service; Albert Jakub was laid off on December 22, 1977, at which time he was forty-four years old and had nineteen years and seven months of service with Continental. In addition, the district court found age and service at the time of layoff for the following plaintiffs: Francis Humenik, age forty-one, two weeks short of attaining twenty- year service; Thomas Riley, age thirty-nine and sixteen days short of attaining twenty-year service; and Anthony Folino, age forty-four, eighteen years and eight months of service. See FF 136-140. l6a challenged both Continental’s adoption and implementation of its liability avoidance program at the Pittsburgh plant and its closure of the pail line at the Pittsburgh plant. The Gavalik action alleged, inter alia, that the closure of the pail line was designed to prevent class members from achieving eligibility for 70/75 and Rule of 65 pension ben- efits in violation of § 510 of ERISA. Discovery in Gavalik brought to light the liability avoidance program, and the subsequent Jakub complaint challenged the adoption and implementation of the overall liability avoidance program as a deliberate effort to manipulate plaintiffs’ length of employment in order to deprive them of 70/75 and Rule of 65 pension benefits, all in violation of § 510. After a bench trial, the district court entered an order granting judgment for Continental. In its accompanying, extensive findings of facts, the court found that Conti- nental’s liability avoidance program was adopted and im- plemented in order to avoid future vesting of break-in- service pension benefits. See FF 53, 68. The court further found that the subsequent decision by Continental to cap the Pittsburgh plant, which resulted in the layoff of in- dividual and class plaintiffs, and its decision to close the pail line, were motivated in part by the desire to prevent employees from attaining eligibility for 70/75 and Rule of 65 benefits and in part by the declining business conditions at the Pittsburgh plant. See FF 106-07, 141-42. The district court concluded, without explanation, that Continental's actions did not violate § 510 of ERISA. See Conclusions of Law (“CL”) 4-5. On appeal, appellants allege that the district court erred in concluding that its own findings of fact did not establish a classwide violation of § 510 of ERISA; that the court erroneously remitted the determination of whether indi- vidual class members’ layoffs were caused by the liability avoidance program to the liability phase of the bifurcated trial; that, in any event, having found that appellants’ layoffs were the consequence of mixed motives, the court 17a erred in its allocation of the “but for’’ burden of proof; and that the critical findings of the district court were clearly erroneous. Continental has cross-appealed alleging that appellants’ action before the district court was barred (1) by a two-year statute of limitations or, alternatively, a six-month limitations period, and (2) for failure to ex- haust grievance and arbitration procedures. We shal! ad- dress the cross-appeal first. Ill. THE CROSS-APPEAL A. Statute of Limitations 1. Continental advances several arguments that, it main- tains, require application of a shorter period of limitations than applied by the district court. First, Continental argues that subsequent judicial developments require that a two- year statute of limitations be applied to appellants’ claims Alternatively, Continental urges the application of a six- month limitation period pursuant to the Supreme Court's decision in DelCostello v. International Bhd. of Teamsters, 462 U.S. 151 (1983). Section 510 of ERISA, 29 U.S.C. § 1140 (1982), and the applicable enforcement provision, 29 U.S.C. § 1132 (1982), do not provide a specific statute of limitations for actions alleging violations of § 510. Under such circum- stances, the appropriate period is determined by reference to the state statute of limitations governing cases most analogous to the cause of action asserted by the plaintiffs. See Wilson v. Garcia, 471 U.S. 261, 266-67 & n.12 (1985). The district court determined that appellants’ allegation of a § 510 violation was most analogous to a claim of em- ployment discrimination or breach of fiduciary duty, and that on either theory the six-year residuary period of lim- itations set forth in 42 Pa. Cons. Stat Ann. § 5527(6) 18a (Purdon 1982) was applicable. Continental does not chal- lenge on appeal the district court’s determination that appellants’ § 510 action is analogous to an employment discrimination action.'® Instead, Continental, accepting the district court’s determination is correct, argues that the applicable limitation period is nonetheless two years. We reject Continental’s contention. Continental seeks to discredit the district court’s deter- mination that a six-year statute of limitations applies to the instant action because it specifically relied on this Court’s decision in Knoll v. Springfield Township School District, 699 F.2d 187 (8d Cir. 1983), cert. granted, 468 U.S. 1204 (1984) (‘‘Knoll I’), which was subsequently va- cated by the Supreme Court in light of its decision in Wilson v. Garcia, 471 U.S. 261 (1985), see Springfield Township School District v. Knoll, 471 U.S. 288 (1985) (per curiam), and modified by this Court. See Knoll v. Springfield Township School District, 763 F.2d 584 (3d Cir. 1985) (‘Knoll IP’). This Court’s modification in Knoll II, however, did not effect a change in Pennsylvania law, under which state law claims analogous to employment discrimination and wrongful discharge claims are governed by a six-year limitation period. See, e.g, Skehan v. Blooms- burg State College, 503 A.2d 1000 (Pa. Commw. 1986) (ap- plying six-year statute of limitations to plaintiff’s employment discrimination claim); see also Ulloa v. City of Philadelphia, 95 F.R.D. 109, 114 (E.D. Pa. 1982) (collect- ing cases). In Wilson v. Garcia, the Supreme Court considered the question ‘whether all § 1983 claims should be character- ized in the same way for limitations purposes.”’ 471 U.S. ‘s Continental did argue before the district court that appellants’ action was more analogous to an action for intentional interference with contractual relations and therefore was subject to a two-year lim- itation period. This claim was rejected by the district court. See Jt. App. at 171. 19a at 271. Upon analysis of the legislative history and sta- tutory goals of § 1983, the Court concluded that a uniform time limit for all § 1983 actions—regardless of the nature of the precise claim—must be applied in each state. Id. at 275. The Court further concluded that § 1983 actions are best characterized as personal injury actions for limitations purposes. Jd. at 276. Notwithstanding the Garcia Court’s repeated references to the particular purposes of § 1983, Continental argues that, in effect, the holding in Garcia established that all claims analogous to a charge of employment discrimination must be governed by the state’s statute of limitations pe- riod for personal injury. We disagree. Indeed, the facts of Garcia itself simply belie Continental’s contention. In the underlying action in Garcia, respondent sought damages for an alleged unlawful arrest and brutality of the ar- resting officer. In reaching its conclusion that § 1983 ac- tions should be governed by state personal injury limitations periods, the court made no determination that the individual claims themselves were always most closely analogous to personal injury claims. Indeed, the court rec- ognized that “the § 1983 remedy encompasses a broad range of potential tort analogies, from injuries to property to infringements of individual liberty,” but concluded that [t]he unifying theme of the Civil Rights Act of 1871 is reflected in the language of the Fourteenth Amend- ment that unequivocally recognizes the equal status of every ‘‘person’’ subject to the jurisdiction of any of the several States. The Constitution’s command is that all ‘‘persons’”’ shall be accorded the full privileges of citizenship; no ‘‘person’’ shall be deprived of life, liberty, or property without due process of law or be denied the equal protection of the laws. A violation of that command is an injury to the individual rights of the person. 20a Garcia, 471 U.S. at 277 (emphasis in original).'® On remand and in accordance with Garcia, we followed the Supreme Court’s “‘bright-line approach to the problem of determining what statute of limitations should be ap- plied in § 1983 actions,” Knoll IJ, 763 F.2d at 585, and held that in Pennsylvania the two-year statute of limita- tions for personal injury actions must govern all § 1983 actions despite the topical nature of the claim. Jd. Neither Garcia nor this Court’s decision in Knoll IJ render the district court’s determination that appellant’s § 510 action most closely resembles an employment discrimination claim erroneous. Nor do they affect this Court’s consistent rul- ings that employment discrimination or wrongful discharge claims brought under federal law are governed by Penn- sylvania’s six-year residuary clause. See Fitzgerald v. Lar- son, 741 F.2d 32, 35 (8d Cir. 1984), vacated, __ U.S. __., 105 S. Ct. 2108 (1985); Perri v. Aytch, 724 F.2d 362, 368 (3d Cir. 1983); Knoll I, 699 F.2d at 145.7 Cf. Al-Khazraji '* Moreover, in vacating this Court’s decision in Knoll I, the Supreme Court remanded the appeal to us in light of its holding in Garcia that “all § 1983 claims should be characterized for statute of limitations purposes as actions to recover damages for injuries to the person.”’ Springfield Township School Dist. v. Knoll, 471 U.S. 288 (1985) (emphasis added). * We recognize that the cases cited for the proposition that federal actions brought in Pennsylvania alleging employment discrimination or wrongful discharge are governed by a six-year limitation period predate the Supreme Court’s decision in Garcia. We emphasize, however, that Garcia did not affect the underlying characterization of ‘‘the essential nature of the federal claim within the scheme created by the various state statutes of limitation.’’ Davis v. United States Steel Supply, 581 F.2d 335, 337 (3d Cir. 1978), resubmitted, 688 F.2d 166 (3d Cir. 1982), cert. denied, 460 U.S. 1014 (1983). Rather, Garcia held that, regardless of that characterization, for purposes of § 1983, the state limitations period for personal injury claims would govern. See also Knoll II, 763 F.2d at 585 (‘In Wilson v. Garcia, the Court held that even though constitutional claims alleged under § 1983 encompass numerous and diverse topics and subtopics, the state statute of limitations governing 2la v. Saint Francis College, 784 F.2d 505, 513 (3d Cir.), cert. granted in part, 107 S. Ct. 62 (1986) (‘‘Davis v. United States Steel Supply, 581 F.2d 335 (3d Cir. 1978), made it absolutely clear that the six-year limitations period for con- tract actions applied to Section 1981 actions brought to redress employment discrimination.’’) In sum, Garcia and Knoll II apply only to discrimination claims under § 1983.” Continental argues that even if Garcia is not applicable to appellants’ claim, this Court’s decision in Mazzanti v. Merck Co., 770 F.2d 34 (3d Cir. 1985) (per curiam) man- dates application of a two-year statute of limitations. We find Continental’s reasoning flawed and unpersuasive. Maz- zanti involved a common law diversity action for tortious interference with an employment contract. As is typical tort actions for the recovery of damages for personal injuries provides the appropriate limitation period.”) In effect, Garcia renders the initial characterization of a claim under § 1983 unnecessary. Garcia cannot be read, however, to eliminate the “‘settled practice,” to which the Supreme Court refers in the course of its opinion, of adopting a local time limitation which governs state actions most analogous to the fed- eral claim when Congress has failed to provide a specific time limitation. Garcia, 471 U.S. at 266; ef. DelCostello v. International Bhd. of Teams- ters, 462 U.S. 151, 171 (1983) (‘We stress that our holding today should not be taken as a departure from prior practice in borrowing limitations periods for federal causes of action, [even where] ... state law fails to provide a perfect analogy.”’) 2 This court’s decision in Goodman v. Lukens Steel Co., 777 F.2d 113 (3d Cir. 1985), cert. granted, 55 U.S.L.W. 3391 (U.S. Dec. 2, 1986), highlights the limitation of Garcia. In Goodman we held that § 1981 actions alleging employment discrimination must, like § 1983 actions making the same type of claim, apply the same period of limitations, viz., the two-year personal injury statute. In other words, Goodman, like Garcia, focused not on the nature of the particular claim, but rather on the historical basis unifying all § 1981 actions. 777 F.2d at 119-120. Moreover, noting the “‘substantial overlap” in claims brought under §§ 1981 and 1983, the Goodman Court concluded that, given the Supreme Court’s decision in Garcia, application of different limitations periods ‘“‘where the same claim is brought under § 1981 would lead to a bizarre result.”’ Jd. at 120. 22a in tortious interference case, the plaintiff in Mazzanti had filed a complaint against Merck & Company, a third party, alleging tortious interference with her employment con- tract with PHP Graphic Arts Corporation, which resulted in her termination by Graphic.” Jd. In considering whether to apply Pennsylvania’s two-year statute of limitations or its residual six-year statute to Mazzanti’s claim, this Court, relying principally on a Pennsylvania Court of Common Pleas decision, Home for Crippled Children v. Erie Insur- ance Exchange, 130 P.L.J. 480 (Allegheny Cty., 1982), affd mem., 329 Pa. Super. 610, 478 A.2d 84 (1984), predicted that the Supreme Court of Pennsylvania wouid apply the two-year statute. See Mazzanti, 770 F.2d at 36. Home for Crippled Children, in turn, based its judgment primarily on its determination that the plain language of 42 Pa. Cons. Stat. Ann. § 5524(3) (Purdon 1982) which prescribes a two-year limitation period for “taking, detaining or in- juring personal property,’’ encompassed tortious interfer- ence, since contract rights—even if intangible—are personal property under Pennsylvania law. In the course of examining appellant’s claim, the Maz- zanti Court made reference to our prior decision in Knoll I and Fitzgerald, which applied Pennsylvania’s six-year limitations period to plaintiffs’ claims of employment dis- crimination. Noting the effect of Wilson v. Garcia, supra, on those decisions, the Mazzanti Court summarily noted “that Garcia, Knoll [I] and Fitzgerald all confronted the state limitations problem in the context of federal actions with unique federal policy concerns,’”’ and concluded that “those cases [are not] controlling in a diversity context.” 770 F.2d at 36. Contrary to Continental’s contention, we # A tortious interference with contract claim may only lie against a third party. See Wells v. Thomas, 569 F. Supp. 426, 435 (E.D. Pa. 1983) (‘Pennsylvania law does not permit a terminated employee to assert against his or her employer a claim for intentional interference with his [or her] employment relationship; it is not a claim which can be made by the parties to a ‘contract’ against each other.’’). 23a see nothing in Mazzanti to suggest that all federal actions for discrimination are now subject to a two-year statute of limitations under Pennsylvania law. Mazzanti considered our prior decisions inapposite and therefore inapplicable to its facts not because of the substantive analysis employed to resolve the Pennsylvania limitations issue, but rather because of the unique federal context in which the analyses were made.” Thus, Mazzanti simply does not mandate a two-year limitations period for appellants’ claims. Appellants note that “most of the cases discussed and relied upon by both parties on the merits are employment discrimination cases under Title VII.’’ Second Brief for Appellants Cross-Appellees at 41. In the course of various rulings, the district court repeatedly likened appellants’ claims to an action alleging employment discrimination.” The gravamen of appellants’ complaint, to paraphrase the district court, is that they were singled out for adverse treatment on the basis of their unvested pension eligibility. We do not deem the district court’s determination to be in error. Accordingly, we find that the six-year limitation period was properly applied in this case. 2. In DelCostello v. International Bhd. of Teamsters, 462 U.S. 151 (1983), the Supreme Court considered what stat- *s The Mazzanti court recognized that the implementation of the federal policy concerns that were at issue in Knoll I and Fitzgerald ‘“*has now been resolved by the United States Supreme Court [in Garcia] on a premise different from that which we employed in [those cases.]’’ 770 F.2d at 36. That premise, rejected in Garcia, see 471 U.S. at 273- 75, was to treat “the particular [§ 1983] claim in suit on an ad hoc basis, focusing on ‘the relief sought and the type of injury alleged.’”’ Fitzgerald, 741 F.2d at 35 (quoting Aitchison v. Raffiani, 708 F.2d 96, 101 (3d Cir. 1983)). * Indeed, the characterization of the nature of appellants’ claim is a key element underlying most of the issues in the instant cross- appeal. 24a ute of limitations should apply to suits alleging that the employer breached a provision of a collective bargaining agreement and that the union breached its duty of fair representation by mishandling the ensuing grievance or arb [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385011_2117%3A1. Public record. Not legal advice.