# Petition for Writ of Certiorari — Nolan v. Otis Elevator Co. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385018_1974%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 1986 - **Citation:** 479 U.S. 820 ## Text ae Uy, at 85 7” 19 5 8 Supreme Court, US, | FILED MAY 27 1986 NO. JOSEPH a — JR. oo IN THE Supreme Court of the United States OCTOBER TERM 1985 FRED S. NOLAN, et al., ) Petitioners, ) vs. ) OTIS ELEVATOR COMPANY and the _) ATTORNEY GENERAL OF NEW JERSEY, ) Respondents. ) PETITION FOR WRIT OF CERTIORARI TO THE SUPREME COURT OF NEW JERSEY WILLIAM S. GREENBERG, Counsel of Record, GREENBERG & PRIOR Attorneys for Petitioner 301 Carnegie Center CN 5320 Princeton, New Jersey 08540 (609) 987-1200 JAMES F. SCHYVERIN On the Petition \ EDITOR'S NOTE THE FOLLOWING PAGES WERE POOR HARD COPY AT THE TIME OF FILMING. IF AND WHEN A BETTER COPY CAN BE OBTAINED, A NEW FICHE WILL BE ISSUED. NO. IN THE Supreme Court of the United States OCTOBER TERM 1985 FRED S. NOLAN, et al., ) Petitioners, ) VS. ) OTIS ELEVATOR COMPANY and the ) ATTORNEY GENERAL OF NEW JERSEY, ) Respondents. ) PETITION FOR WRIT OF CERTIORARI TO THE SUPREME COURT OF NEW JERSEY WILLIAM S. GREENBERG, Counsel of Record, GREENBERG & PRIOR Attorneys for Petitioner 301 Carnegie Center CN 5320 Princeton, New Jersey 08540 (609) 987-1200 JAMES F. SCHWERIN On the Petition em te Ae NT RS Ae Codi Crbe aS s 8 RO RED i COE. es BeSed OE IED — CPD ERE. © 68 Oe oe + en i QUESTIONS PRESENTED l. Where there has been discrimination on the basis of age barred by both the Age Discrimination and Employment Act and the New Jersey law against discrimination is a state court action preempted by the Employees Retirement Income Security Act merely because it provides a longer statute of limitations? 2. Is the giving of additional benefits to older employees upon closing of a plant discriminatory when the employer did so only because, committed by virtue of an earlier attempt to open up more positions for younger employees? ii PARTIES TO THE PROCEEDING The parties to the proceedings below were the petitioners herein Fred S. Nolan, Ralph R. Battista, Charles W. Cleary, Joseph A. Davis, William J. Davitt, Jr., Anthony G. Gomes, James Halleck, Donald C. Halliwell, Phyllis J. Kerkawich, Joseph M. Karkosky, Jr., Charles Kerr, Mary Largey, Armand Machado, Edward M. McBride, Thomas P. Nugent, Peter J. Reilly, Herman J. Russomanno, Eugene A. Scannepico, Raymond J. Smith, John T. tarr, Harold C. Stoll, Louis C. Tremble, Walter Ward, Daniel M. Watson,James Van Bramer, and respondents Otis Elevator Company and the Attorney General of the State of New Jersey. iii TABLE OF CONTENTS QUESTIONS PRESENTED.......... i PARTIES TO THE PROCEEDING.... ii TABLE OF AUTHORITIES......... Vv OPINIONS BELOW.........-ecee. 2 JURISDICTION... .. ccc ccc ccccce 3 STATUTES AND REGULATIONS INVOLVED... ccc cccccccesccecs 4 STATEMENT OF THE CASE........ 12 REASONS FOR GRANTING THE WRIT -- 1. Preemption of the right to bring a Superior Court Action under New Jersey Law Against Discrimination impairs the joint Federal/ State scheme of preventing 2. Granting additional severance benefits solely on the basis of age is discriminatory under the APPENDIX: A - iv Decision of the Supreme Court of New Jersey....... Decision of the Superior Court of New Jersey, Appellate Division........ Order for Summary Judgment in Favor ee | ee ie Opinion of the Superior Court of New Jersey, eB Nei ot Ree ee ree Order of the United States District Court for the District of ee ee eee ee Opinion of the United States District Court for the District of NOW JOFSCY.wccccsacessseses TABLE OF AUTHORITIES CASES CITED Brownlow vs. Edgecomb Metals Co., 573 F. Supp. 679 (N.D. Oh. 1983).. EEOC vs. Baltimore and Ohio Railroad Company, 632 F.2d 1107, Ake (ECE GEEst BOER s bb.04%: 8 2 OS 0k EEOC vs. Borden's Inc., 724 F.2d £490 (IER CEE. Bees 6.6405 046 4a ue EEOC vs. Great Atlantic and Pacific Tea Co., 618 F. Supp. 115 [Malls Wee, Somers ccuen cea’ EEOC vs. Home Insurance Co., Old F.2G 2352 (4G Cif. 2IEd) occsces EEOC vs. Westinghouse Electric, 725 F.2d 211 (3d Cir. 1983), cert. den. U.S. _, 105 S. Ct. 92, 83 L.Ed.2d 3B (19BE) . ccc ccncenesecccsssces Kennedy vs. Whitehurst, 690 F.2d 932, GE (B.C. Choa Bower secuas ee Oscar Mayer and Company vs. Evans, 441 U.S. 750, 99 S. Ct. 2066, 66 .L. 50.28 609 CA5707 ic cvccseeeee Page 31 45 38, 41, 42 43, 44 38, 39, 42, 43, 44 45, 46 38, 39, 41, 43, 44 vi Rebaldo vs. Cuomo, 749 F.2d 133 (2d Cir. 1984), cert. den. _. U.S. _, 105 &.Ct. 2702, 86 L.Ed.2d 718 oe PERT EROTEC TT eT CETTE E Tee 31, Shaw vs. Delta Airlihkes, 463 U.S. 85, 103 S. Ct. 2890, 77 L.Ed.2d ing Me 8 ROLE ELLER SCTE CTO 18, United Airlines v. McMann, 434 U.S. 192, 98 S.Ct. 444, 54 L.Ed.2d 402 (1977)....... 37, Zipes v. Trans World Airlines, $33 U.8. 363, 402 8. Ct. _—___ 1127, 71 B.B@. 1127 (1962)....... 27 STATUTES CITED 2. ry Pe meee 49 10 BARONE ccc cass wias 3 ee er rn - 20 ri iin Kae hanaeus 44 0 ee ns bcs hse e eee 5 om ee fl 2 ot) re nme 37 23 OO OAR oi iuey ideas eadas 6 20 B26. Sei ier es cee 24, 32 20, 21, 27, 28, 36, 37 38 24 22, 33, vii 29 U.S.C. §1144. 2. ee eee eee e ee eees 29 C.F.R. §1625.2.....eee cence 29 C.F.R. §1625.2(b)......----ee- NO. IN THE Supreme Court of the United States OCTOBER TERM 1985 — FRED S. NOLAN, et al., Petitioners, ) vs. ) OTIS ELEVATOR COMPANY and the ) ATTORNEY GENERAL OF NEW JERSEY, ) Respondents. ) PETITION FOR WRIT OF CERTIORARI TO THE SUPREME COURT OF NEW JERSEY Petititioners Fred S. Nolan, et al. respectfully pray that a writ of certiorari issue to review the judgment of the Supreme Court of New Jersey entered February 26, 1986. 2 OPINIONS BELOW The opinion of the Sup Court of New Jersey is reported at 102 N.J. 30 (1986) and is reprinted in the appendix hereto at page la, et seq. The decision of the Superior Court of New Jersey Appellate Division is reported at 197 N.J. Super. 468 and is reprinted in the appendix hereto at page a, et seq. The decision of the Superior Court of New Jersey, Law Division, is reported at 197 N.J. Super. 70 and is reprinted in the appendix hereto at page a, et seq. The decision of the United States District Court, District of New Jersey, is reported at 560 F. Supp. 119 and 7 reprinted in the appendix hereto at page a, et seq. 3 JURISDICTION The opinion of the Supreme Court of New Jersey reinstating the judgment of the Superior Court, Law Division, was entered on February 26, 1986. There was no separate order or judgment issued by the Supreme Court of New Jersey. This petition for certiorari has been filed within ninety days of the New Jersey Supreme Court decision. This Court's jurisdiction is invoked pursuant to 28 U.S.C. §1257(3) which states: Final judgments or decrees rendered by the highest court of the State in which a decision could be had, may be reviewed by the Supreme Court as follows: 3) By writ of certiorari, ... where validity of a State statute is drawn in question on the ground of its being repugnant to the Constitution, treaties or laws of the United States, ... 4 STATUTES AND REGULATIONS INVOLVED EMPLOYEES RETIREMENT INCOME SECURITY ACT, 29 U.S.C. §1144 (a) Except as provided in subsection (b) of this section, the provisions of this subchapter and subchapter III of this chapter shall supercede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan described in section 1003(a) of this title and not exempt under section 1003(b) of this title. (d) Nething in this subchapter shall be construed to alter, amend, modify, invalidate, impair, or supercede any law of the United States (except as provided in sections 1031 and 1137(b) of this title) or any rule or regulation 5 issued under any such law. AGE DISCRIMINATION IN EMPLOYMENT mony 27 U.S.C. $623 (a) It shall be unlawful for an employer - (1) to fail or refuse to hire or to discharge any individual or otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's age; ... (f) It shall not be unlawful for an employer, employment agency, or labor organization - (2) to observe the terms of a bona fide seniority system or any bona fide employee benefit plan such as a retirement, pension, or insurance plan, which is not a subterfuge to evade the purposes of this chapter... AGE DISCRIMINATION IN EMPLOYMENT ACT 29 U.S.C. §626 (d) No civil action may be commenced by an individual under this section until sixty days after a charge alleging unlawful discrimination has been filed with the Equal Employment Opportunity Commission. Such a charge shall be filed - (1) within 180 days after the alleged unlawful practice occurred; or (2) in a case to which section 633(b) of this title applies, within 300 days after the alleged unlawful practice occurred, or within 30 days after receipt by the individual of notice of termination of proceedings under 7 State law, whichever is earlier. (e) (1) Sections 255 and 259 of this title shall apply to actions under this chapter. PORTAL-TO-PORTAL ACT, 23 0.8.C. §255 Any action commenced on or after May 14, 1947 to enforce any cause of action ... (a) if the cause of action accrues on or after May 14, 1947 - may be commenced within two years after the cause of action accrued, and every such action shall be forever barred unless commenced within two years after the cause of action accrued, except that a cause of action arising out of a willful violation may be commenced within three years after the cause of action accrued; ... 8 EQUAL EMPLOYMENT OPPORTUNITY COMMISSION INTERPRETATIONS, Age Discrimination in Employment Act, 29 CFR §1625.2 (b) The extension of additional benefits, such as increased severance pay, to older employees within the protected age bracket may be lawful if an employer has a reasonable basis to conclude that those benefits will counteract problems relating to age discrimination. The extension of those additional benefits may not be used as a means to accomplish practices otherwise prohibited by the Act. NEW JERSEY LAW AGAINST DISCRIMINATION, N.J.S.A. 1025-2.1 Nothing contained in this Act or the Act to which this is a supplement shall be construed ... to interfere with the operation of the terms or conditions 9 and administration of any bona fide retirement, pension, employee benefit or insurance plan or program. NEW JERSEY LAW AGAINST DISCRIMINATION, Betice.A. 1025-12 It shall be unlawful employment practice or, as the case may be, an unlawful discrimination: a. For an employer, because of ... age ... to refuse to hire or employ or to bar or to discharge from employment such individual or to discriminate against such individual in compensation or in terms, conditions or privileges of employment; ... NEW JERSEY LAW AGAINST DISCRIMINATION, N.J.S.A. 10:5-13 Any complainant may initiate suit in Superior Court under this Act without eee Se aee 10 first filing a complaint with the division or any municipal office. Prosecution of such suit in Superior Court under this Act shall bar the filing of a complaint with the division or any municipal office during the pendency of any such suit. At any time after 180 days from the filing of a complaint with the division, a complainant may file a request with the division to present the action by himself or through his own counsel to the Office of Administrative Law. Jpon such request, the director of the division shall file the action with the Office of Administrative Law, provided that no action may be filed with the Office of Administrative Law where the director of the division has found that no probable cause exists to credit the iiss " 11 allegations of the complaint or has otherwise dismissed the complaint. A party to an action based upon a violation of this Act shall mail a copy of the initial pleadings or claims, amended pleadings or claims, counterclaims, briefs, and legal memoranda to the division at the same time as filing such documents with the Office of Administrative Law or the court. Upon application of the Office of Administrative Law or to the court wherein the matter is pending, the division shall be permitted to intervene. 12 STATEMENT OF THE CASE This is an action instituted in the New Jersey Superior Court alleging age discrimination against the petitioners' former employer, respondent Otis Elevator Company. The basic facts are straightforward. All of the petitioners were management level employees of Otis at its Harrison New Jersey plant, and at the time of the termination of their employment in 1980, all had been with the company 25 years or more. Each petitioner received as a severance benefit one week's salary per year of service. All petitioners were at the time of termination of employment less than 55 years of age. At the time of the closing, other Otis employees, who were in all se a awe ‘ : | ; i 13 respects similarly situated to petitioners in terms of job titles and years of service, but who were all 55 years of age or older, received benefits in lieu of the severance pay given petitioners which were significantly more lucrative. Each of these other employees was offered the opportunity to enter into a “deferred compensation agreement" under which on the last day of each month commencing with a given starting date and lasting for a period of time stated in each individual agreement, benefits were provided as per a formula which resulted in these employees receiving far more than the severance pay given petitioners. The giving of this deferred compensation agreement to the other employees was called by Otis the 14 “Harrison Special Supplemental Retirement Plan" (HSSRP). In its initial conception, it was intended to be utilized to lure older employees into utilizing the early retirement option available to employees aged 55 or older under the basic Otis retirement plan, the Otis Basic Retirement Plan for Salaried Employees (OBRPSE). The benefits offered under the HSSRP were calculated by tying into the benefits for early retirement under the OBRPSE. Under the HSSRP, all recipients must have had 25 years or more of service with Otis and be age 55 or older. Sometime prior to putting the HSSRP into effect, the decision was made in the spring of 1980 to shut down the Harrison plant entirely. Therefore, all the employees as to whom the HSSRP was 15 being offered as well as the petitioners had no choice to make about retirement versus keeping their jobs at Harrison. Nevertheless, employees who fit the requirements created for HSSRP were still given that benefit, while petitioners were simply given the severance pay previously described. No official notice of the existence of the HSSRP was ever given by Otis to the petitioners. Only those eligible to receive this plan were told by management, and petitioners learned of its existence only through informal means. None of the employees who participated in the HSSRP were actually retired until June l, 1980 at the earliest, and the individual agreements effectuating participation in HSSRP were Signed, at least in some instances, 16 subsequent to the actual retirement date. The architect of the HSSRP was James Nelson of Otis’ parent company, United Technologies. He stated that age 55 was selected as the cut off for the HSSRP solely because that was the age at which employees became eligible for early retirement in the OBRPSE and for no other reason. No consideration was given to whether or not providing these extra benefits would have any impact on combatting age discrimination as per the standards set forth in the Equal Employment Opportunity Commission (EEOC) interpretative regulation on that score. The complaint in this case alleged a single cause of action on behalf of the 25 petitioners for violation of the New Jersey Law Against 17 Discrimination (LAD). Respondent Otis then removed the case to the United States District Court for the District of New Jersey. Its grounds for doing so were that the LAD was preempted by the Employees Retirement Income Security Act (ERISA). Furthermore, it sought to assert a counterclaim seeking declaratory judgment that ERISA preempted the LAD, and asserting that the complaint actually stated cause of action for benefits under ERISA, and asking the court declare its fiduciary duties. The District Court rejected the assertion that there were grounds establishing federal jurisdiction to support the removal, and remanded the case to the Superior Court of New Jersey. In Superior Court, Otis 18 continued to press its claim that ERISA preempted the LAD, while abandoning the theory that a cause of action wniee ERISA was being advanced by petitioners. On motion for summary judgment by Otis, the Superior Court, Law Division dismissed the complaint finding that ERISA did preempt application of the LAD. The Superior Court, Appellate Division, reversed holding that preemption of LAD would impair the ADEA within the meaning of this Court's decision in Shaw vs. Delta Airlines, 463 U.S. 85, 103 S. Ct. 2890, 77 L. Ed. 2d 490 (1983). The New Jersey Supreme Court granted certification and reversed the Appellate Division, reinstating the judgment of dismissal entered by the Law Division. While the Supreme Court also 19 relied on preemption by ERISA, its reasoning was significantly different than that of the Law Division, — in fact was based on a theory not advanced by Otis and therefore not previously addressed by petitioners, to wit, a longer statute of limitations was provided. The decision of the New Jersey Supreme Court was issued on February 26, 1986 with no separate order or judgment accompanying it. 20 REASONS FOR GRANTING THE WRIT 1. PREEMPTION OF THE RIGHT TO BRING A SUPERIOR COURT ACTION UNDER NEW JERSEY LAW AGAINST DISCRIMINATION IMPAIRS THE JOINT FEDERAL/STATE SCHEME OF PREVENTING AGE DISCRIMINATION. This Court has made it clear that prevention of invidious discrimination is, under federal law, a joint matter of federal and state cooperation. Allowing the states to have their citizens seek protection against discrimination through the mechanism of a direct lawsuit is in furtherance of that joint federal/state scheme, and should not be preempted by ERISA. This Court laid down the ground rules for applying ERISA preemption to state antidiscrimination laws in its decision in Shaw. While Shaw was a Title VII case, there is no ai question that the enforcement scheme under the ADEA is basically the same including the relationship between state and federal agencies. Oscar Mayer and Company vs. Evans, 441 U.S. 750, 99 S. Ct. 2066, 60 L. Ed. 2d 609 (1979). This Court concluded in Shaw that preemption of the particular antidiscrimination law at issue would impair Title VII because it provided a means of enforcing Title VII's commands. 463 U.S. at 101, 103 S. Ct. at 2902. Allowing preemption to defeat the possibility of the state administrative agency granting relief was seen as contrary to the purpose of the statute: This would frustrate the goal of encouraging joint state/federal enforcement of Title VII; an employee's only remedies for discrimination pro- hibited by Title VII in ERISA plans would be federal ones. Such a disruption of the 22 enforcement scheme contemplated by Title VII would, in the words of §514(d), "modify" and "impair" federal law. 463 U.S. at 103, 103 &. Ct. af 2303. Beside eliminating an alternative forum, it was held that preemption of state remedies would increase the EEOC work load. Cclaims that might otherwise be resolved at the state level would have to go through EEOC thereby resulting in an added burden and the likelihood of less effective enforcement of the statute. 463 U.S. 103, n. 23, 103 3. Ct. SE 2903. The only limitation expressed by the Court was that there would be no impairment of Title VII to the extent that a state statute prohibited conduct lawful under Title VII. Concern was expressed that, consistent with the legislative intent behind ERISA, 23 employers not be faced with “conflicting or inconsistent state and local regulation of employee benefit plans." 463 U.S. at 105, 103 S. Ct. at 2904 quoting remarks of Senator Williams, 120 Cong. Rec. 29933 (1974). Therefore, to the extent that a state law made anything relating to an employee benefit plan illegal, when it would be lawful under Title VII, such provision would be deemed preempted by ERISA. Ibid. ' This substantive consistency between federal and state law is the key to accomplishing the goals outlined in Shaw. It certainly would make things difficult for a company to create a plan if it could be lawful in one state and not in another. However, in this case, the decision of the New Jersey Supreme Court ignores that need for substantive 24 consistency in favor of relying only on the length of the statute of aoe een as grounds for finding cause is: aide state law. It is submitted that the need to combat unlawful discrimination must take precedence over having a single time limit for challenging discrimination in a benefit plan. In finding that the action commenced in Superior Court would not have been timely in pursuit of a federal remedy, the New Jersey Supreme Court adverted to the dual nature of the statute of limitations for a federal action. Thus, there must be a filing with EEOC within 300 days of the alleged unlawful practice, and an action must be instituted within two years of accrual under 29 U.S.C. §255, as adopted for the ADEA in 29 U.S.C. §626(e). 102 N.J. at 25 42, sks In holding that the federal remedy was no longer available, the Supreme Court of New Jersey did not make it clear on what basis it reached that conclusion. Petitioners concede that at the time the complaint in this action was filed, the 300 days for filing a complaint with EEOC had expired. However, the two year period for bringing an action in federal court had not. While Otis has asserted at times in the lower court proceedings that a two year statute of limitations should have been applied to the New Jersey Superior Court action, and that it had not been met by the May, 1982 filing, that has not been conceded by petitioners and has never been adjudicated in this case. It is petitioners' contention that the case 26 was filed within two years of the accrual of the cause of action. The plant was not actually closed until after May, 1980, none of the participants in the HSSRP actually were retired until at least June 1, 1980, and no notice of the HSSRP had been given to any of the nonparticipants as of May, 1980. Therefore, the sole basis for saying that the federal remedy was no longer available was the failure to file with EEOC within 300 days. Nevertheless, there is nothing inconsistent about allowing a state court action to be filed within two years without recourse to administrative remedies when employers, even looking only at the ADEA, know that for two years after accrual they are subject to fh a E-ncres Ab | MELE as bea iahtatics, Wire Kamala ie | | 27 a federal claim. This is especially true in light of the fact that the requirement of filing with EEOC is a prerequisite to bringing an action in federal court is not jurisdictional and may be waived. Kennedy vs. Whitehurst, 690 F. 24 951, 961 (D.C.Cir. 1982), citing to Zipes vs. Trans World Airlines, 455 U.8. 385, 102 &. Ct. lid/, 71 LL. Ed. 1127 (1982). The clear concern of this Court in Shaw was the ability of employers to create plans. It is unrealistic to assume that the possibility that in certain instances the claimant may bring suit outside of a particular statute of limitations is going to be taken into consideration to any extent in deciding upon the terms of an ERISA benefit plan. Employers will 28 certainly look at federal law to see what subtantive provisions are lawful and should not have to review che laws of all 50 states to see if there will be an inconsistency. The holding in Shaw that preemption will follow where a state antidiscrimination law is broader than Title VII, or here the ADEA, as it relates to an employee benefit plan fully allays that concern. To extend it, as the New Jersey Supreme Court has done, to statute of limitations considerations goes far beyond the Shaw rationale, or that expressed in the legislative history of ERISA. Certainly the element of limiting the work load of EEOC which was given recognition in Shaw is just as much served by having discrimination allegations resolved in the state courts eee 29 as it is by use of state administrative agencies. In fact, in New Jersey it is a reality that there is a ecektar likelihood that a matter brought in Superior Court will be removed from federal jurisdiction than if a complaint is filed with the New Jersey Division of Civil Rights. At the same time as the New Jersey legislature amended its statute to provide that an action may be brought in Superior Court, bypassing state administrative remedies, it also provided that if, after 180 days from the filing with the Division on Civil Rights, no resolution had been reached, a complainant could demand that the matter be immediately forwarded to the Office of Administrative Law for prosecution directly by the party alleging discrimination. The clear nas in cade ouninhs - 4 * 3 | 4 38 Airlines vs. McMann, 434 U.S. 192, 98 S. Ct. 444, 54 L. Ed. 2d 402 (1977). There is no question that the HSSRP axiste and benefits have been paid to some employees, so whether it is bona fide is not an issue in this case. What petitioners do assert is that there is no plan within the meaning of §623, and even if there is, it is a subterfuge to avoid the purposes of the Act. Existence of a plan in circumstances similar to those presented here has been addressed in EEOC vs. Westinghouse Electric, 725 F. 2d 211 (3rd Cir. 1963), cert. den. U.8. , 105 &. Ct. 92, 83 Lb. Ed. 246 36 {idea} 3 EEOC vs. Borden's Inc., 724 F.2d 1490 (9th Cir. 1984); and EEOC vs. Great Atlantic and Pacific Tea Co., 618 F. . 4 $ ii x : 4 > Ae Ree RAKE Mh Seika hei aS i NT ee pS j $ > ; 39 Supp. 115 (N.D. Oh. 1985). In all three instances, attempts to characterize severance benefits as a plan cite the meaning of the ADEA were rejected. They are compelling support for petitioners' assertion here that there has been unlawful age discrimination. In the Westinghouse case, it was held that layoff benefits did not constitute a plan within the meaning of the ADEA because they were analogous to a fringe benefit. Under the generally applicable Westinghouse pension plan, employees laid off without fault for lack of work were eligible for Layoff Income Benefits (LIB) if they had at least two years service and were not entitled to early retirement as specified in the Plan. The minimum age under which anyone could elect early 40 retirement was 55 for persons with more than 30 years service laid off as result of the plant closing, who inka seein between their 55th and 60th birthday. When the plant was closed, a number of employees aged 55 and older were informed by Westinghouse that they were ineligible for LIB because they were entitled to early retirement. Although the District Court found that denial of the LIB to older workers was based upon reasonable factors other than age and that Westinghouse had operated under the terms of a bona fide benefit plan, the Third Circuit reversed. It was held that the relationship between eligibility for early retirement and age served to deny LIB to older workers who had accumulated more years of service, 41 and therefore was a distinction based on age. 725 F. 2d at 222, and n. 7 Furthermore, there _ no bona fide employee benefit plan because LIB was not a plan within the meaning of §623(f£) (2). In the Borden's case, the company closed a dairy operation and terminated all but a few management personnel. By addenda to a Collective Negotiations Agreement cman about a month prior to the closing of the plant, severance pay was created as a benefit in the event of closure. Employees eligible for normal or early retirement were excluded from severance pay; for retirement eligibility an employee had to have at least two years of continuous service and be at least 55 years of age. Employees excluded by these criteria et ee ee es oe a ee | eee otn one te eee — 42 from receiving severance pay filed a Claim under the ADEA. The Ninth Circuit held that where eligibility for benefit is conditioned upon eligibility for retirement which in turn is limited to employees 55 or older, age was the “but for" cause of denial of severance pay. 724 F. 2d at 1393. Severance pay was not a plan within the meaning of §623(f£) (2) as it had only a loose connection to existing pension plans. Even if severance pay policy had been part of an overall benefit scheme, denial of severance pay to retirement eligible employees was still found open to question. Id. at 1396-97. Most recently in the A & P case, the employer once again tried to claim existence of a plan falling within 43 the statutory exception by virtue of the fact that severance pay was tied to the regular pension plan. Severance pay was denied to all those employees eligible for early retirement, for which one had to be at least 55 years old. The court found that A & P had simply dragged in its pensicn plan “to clothe its severance pay plan with legitimacy and to achieve results which it was not designed to achieve." 618 F. Supp. at 121. The severance pay and the underlying pension plan were found not to be “part and parcel of a total, integrated benefit package." Id. at 122. They were adopted at different times and documented separately. Ibid. Therefore, the result was the same as in Westinghouse and Borden upon which the court in A & P relied. 44 Nothing really differentiates the HSSRP from what went on in Westinghouse, Borden's and A& P. Simply because the word “plan” was used in creating a name, does not make it a plan within the meaning of the ADEA. The piant was closed and the benefit given to the participants in the HSSRP was in lieu of the severance pay received by petititoners. The only difference between petitioners and those in the HSSRP was age. Otis has claimed in this case that its actions were shielded by the fact that the ADEA, at 29 U.S.C. §626(e) adopts §10 of the Portal-To-Portal Act of 1947, 29 U.S.C. §259. §10(a) of that statute provides that an employer may rely on “any written administrative regulation, order, ruling, approval or OD APM AL at Ow Se ae ce la et, fe tel walt Meg. varies a ee 5la APPENDIX B SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION A-2282-23T2 FRED S. NOLAN, RALPH R. RATTISTA, CHARLES W. CLEARY, JOSEPH A. DAVIS, WILLIAM J. DAVITT, JR., ANTHONY G. GOMES, JAMES HALLECK, DONALD C. HALLIWELL, PHYLLIS J. GORLEY __ KERKAWICH, JOSEPH M. KARKOSKY, JR., CHARLES KERR, PATRICK J. LARGEY, JR., ARMOND MACHADO, EDWARD M. MCBRIDE, THOMAS P. NUGENT, PETER J. REILLY, HERMAN J. RUSSOMANNO, EUGENE A. SCANNEPICO, RAYMOND J. SMITH, JOHN T. STARR, HAROLD C. STOLL, LOUIS C. TREMBLE, JAMES VAN 3RAMER, WALTER WARD and DANIEL 1. WATSON, Plaintiffs-Appellants, 52a Appendix B OTIS ELEVATOR COMPANY, a corporation organized and existing under the laws of the State of New Jersey, Defendant-—Appe.lee. Argued November 7, 1984 -- Decided November 23, 1934 Betore Judges Anteli, J. H. Coieman and Simpson. On appeai from Superior Court, Law Division, Hudson County. William S. Greenberg argued the cause for appellants (Greenberg, Keiley & Prior, attorneys; Mr. Greenberg of counsel and on the brief and James F. Schwerin on the brief). ft Deke ee weds 53a Appendix.B Jchn D. Horan and Peter F. Healey argued the cause for respondent Otis Ejievator Company (Goodman, Stoidt, Breslin & Horan, attorneys; Mr. Horan and Mr. Heaiey on the brief). Corinne L. McGovern, Deputy Attorney Generali, argued the cause for intervenor New Jersey Division of Civil Rights (Irwin I. Kimmeiman, Attorney Generai. of wie Jersey, attorney; James J. Ciancia, Assistant Attorney General, of counsel and Ms. McGovern on the brief). The opinion of the court was delivered by, ANTELL, P.J.A.D. On December 31, 19680 defendant ciosed its Harrison plant, resulting in a significant reduction in its work force. A plan was formulated, known as The Harrison Speciai Suppiementai 54a Appendix B Retirement Plan, under which manageriai employees with a minimum of 25 years of ‘ service who were over 55 years of | age couid eiect early retirement with substantiai suppiementai benefits. The plaintiffs herein, who also had a minimum of 25 years of sexrvice, but who were under 55 years of age, were awarded severance pay amounting to one week's caiary for each year of service as was defendant's usual severance é policy. These individuais were denied the benefits of The Harrison Speciai Suppiemental Retirement Pian and brought this action under the New Jersey Law Against Discriminaticn, N.J.S.A. 10:5-1 mM et seq. for reiier in the form of termination benefits equal to those received by former employees who were me over 55. An order for summary judgment b 55a Appendix B was entered in the Law Division in favor of defendant, from which plaintiffs now appeal, on the ground that the controversy is preempted by the federal Employee Retirement Income Security Act (ERISA), 29 U.S.C.A. §1144(a). ERISA is a regulatory enactment designed to protect the interests of empioyees and their beneficiaries in empioyee fringe benefits and to set standards and responsibilities for fiduciaries 9f those benefit pians. It does not Jeal with the subject of discrimination in the provision of employee benefits. The order under review rests on §514(a) of ERISA, 29 U.S.C.A. €1144(a). That subparagraph preempts "...any and ali state laws insofar as they may now or hereafter reiate to any employee ymenefit plan" regulated by ERISA. 56a Appendix B It is clear that the plan in question comes within the scope of the foregoing ianguage. However, §514(d), 29 U.S.C.A. €1144(d), provides that the law shall not be "construed to alter, amend, modify, invalidate, impair, or supersede any law of the United States ... or any rule or regulation issued under any such law." Plaintiffs argue before us, as they did in the Law Division, that because the effect of preemption of the New Jersey Law Against Discrimination would be to modify and impair the federal Age Discrimination in Employment Act ' (ADEA), 29 U.S.C.A.€623(a) (1) & (2), . the case is excepted from preemption / by §514(d). The Law Division rejected . this contention, reasoning that because 1 the ADEA “is a self-ccntained independent statute [which] does not rely solely N 57a Appendix B on state statutes for enforcement *** pre-emption of N.J.S.A. 10:5-1 would not ‘impair or supersede' the ADEA." In the view of the Law Division this analysis was required by Shaw v. Delta Airlines, Inc., U.S. » £03. 8. Ct. 2690, 77 L. Ed.2d 490 (1°83). The question berore the court in Shaw v. Deita Airiines, Inc., supra, was whether an action brought under the New York Human Rights Law aiieging liscrimination on the basis of pregnancy vas preempted by ERISA. The case arose sefore the effective date of the federai -regnancy Discrimination Act of 1978, #2 U.S.C.A. §2000(e)(k}, amending fitie VII of the Civii Rights Act of 1964, 42 U.S.C.A. 2000(e). Appeliants -here argued that by preempting the Yew York iaw the means by which Titie eS 58a Appendix B VII is enforced would be altered and the case therefore came within the exception created by §514(d). The Supreme Court noted that although the state iaw played a significant roie in the entorcement of Titie VII, the exception to preemption was only intended to apply to "“nonconfiicting State laws." U.S. at , S. Ct. at 77 L. Ed.2d at 503. Accordingiy, the Court's decision that the state law was partially preempted by ERISA turned on the fact that the former prohibited a form of discrimination not prohibited by Title VII. As the court stated, preemption of state laws which "prohibit employment practices that are lawful under Title VII" would not impair Title VII within the meaning of §514(d). U.S. at i e » 77 be Ba. 59a Appendix B In this case the complaint rests on the factual contention that the discrimination ciaimed to be in violation of the New Jersey Law Against Discrimination also violates ADEA. Assuming, as we must for purposes of this appea!, that this contention will be supprted by the proofs, we are therefore not confronted by the obstacie to relief found in Shaw v. Delta Airiines, Inc., supra. That preemption of the New Jersey Law Against Discrimination would impair federal iaw appears to be affirmatively answered by the reasoning of Oscar Mayer & Co. v. Evans, 441 U.S. 750, 99 S. Ct. 2066, 60 L. Ed.2d 609, (1979). There the Court decided that £14(b) of the ADEA, 29 U.S.C.A. €633(b), required the compiainant to file a state action, where available, and wait a specified 60a Appendix B number of days before bringing a federal] action under the federai statute. This result was expiained in the foliowing language: We therefore conciude that $14(b), like $706(c) [of Title VII], is intended to screen from the federa: courts those discrimination complaints that might be settied to the satisfaction of the grievant in state proceedings. We further conclude that prior resort to appropriate state proceedings is required under $14(b), just as under §706(c). [441 U.S. at 734, 8. Gt. , 60 L. Ed. 2d at 616]. 6la Appendix B If prior resort to state proceedings is a condition precedent to filing a federal action under ADEA, it foliows that preemption of such state proceedings by ERISA necessarily impairs or modifies the federal law. The dependency of the ADEA upon state iaw in enrorcing federai prohibitions is further shown by the following language of §14(a) of the federal statute, 29 U.S.C.A, yl4(a) of the federal statute, 29 U.S.C.A. ~633(a): Nothing in this chapter shaii affect the jurisdiction of any agency of any State performing like functions with regard to discriminatory employment practices on account of age except that upon commencement 62a Appendix B of action under this chapter such action shali supersede any State action. We conclude that a sufficient interrelationship exists between the federal Age Discrimination in Employment Act and the New Jersey Law Against Discrimination so that preemption by ERISA of the state statute would resuit in impairment of the federal. Defendant contends here that the action is barred by the time limitations expressed in the New Jersey Law Against Discrimination and the Statute of Limitations, N.J.S.A. 2A:14-2. In our view the requirement that the complaint be filed within 180 days after the aileged act of discrimination, N.J.S.A. 10:5-18, has reference only 63a Appendix B to administrative proceedings initiated within the Division of Civii Rights. Moreover, we conciude that the appiicabie time limitation is that stated in N.J.S.A. 2A:14-1, "6 years next after the cause of action shail have accrued." On this view the action is timely brought. Defendant's final contention is that the order for summary judgment was properly entered, notwithstanding pilaintiffs' claims to the contrary, because the factual proofs wiii not support a finding of discrimination under the ADEA. It is settied that summary judgment should be denied unless the pieadings, depositions, and affidavits show that there is no genuine issue of materiai fact and that the moving party is entitied to such judgment as a matter of Jaw. R. 4:46-2; Judson 64a Appendix B v. Peopies Bank & Trust Co. of Westtieid, 17 N.J. 67, 73-75 (1954). It is the movant's burden to exciude reasonable doubt as to the existence of a genuine issue of fact and aii doubts must be resoived against the moving party. Ruvolo v. American Gas. Co., 29 N.J. 490, 499 (1963); United Advertising Corp. v. Metuchen, 35 N.J. 193, 196 (1961). The factual aliegations before us Ciearly present an instance of discrimina- tion wherein individuals of one age category have been offered benefits not offered to those of another age group on the basis of age alone. See E.E.O.C. v. Bordens, 724 F. 2d. 1390, 1393 (9th Cir. 1°84). The Age Discrimination in Employment Act provides at 29 U.S.C.A. §623(a) that it shati be unlawfvui for 65a Appendix B an employer (1) to fail or refuse to hire or to discharge any individuai or otherwise discriminate against any individuai with respect to his compensation, terms, conditions, or privileges of employment, because of such individuai's age; (2) to limit, segregate or Classify his employees in any way which would deprive or tend to deprive any individuai of employment opportunities or otherwise adverseiy affect his status as an employee, because of such individuai's ace... 66a Appendix B.- In connection therewith, 29 U.S.C.A. §623(£)(2) provides that it shali not be unlawful for an employer to observe the terms of any “bona fide emp:oyee benefit plan such as a retirement, pension, or insurance pian, which is not a subterfuge to evade the purposes of this chapter..." As to this, piaintiffs claim that the benefit pian was not “bona fide,“ and that it was a subterfuge to avoid the purposes of the ADEA. Under these circumstances it has been heid that an employee's motion for summary judgment requires the employer to make a prima facie showing that the pian does not serve the purpose of a subterfuge. Smart v. Porter Paint, 630 F. 2d. 490, 495 (7th Cir. 1980). We conciude that a resolution of these controverted 67a Appendix B issues must depend upon factuai Findings which can only be reached upon a fuli record. In so saying, we do not impiy that a pienary triai must necessarily result in a jury question or a material issue of fact. We oniy indicate the necessity in this case of a judge making the legal determinations on which the parties' rights hinge on a fuli and complete record. If, on a pienary hearing, the judge finds no factuai issue present or finds a moving party is entitied to judgment @as a matter of iaw, then judgment should be entered accordingly. [McGowan v. Borough of Eatontown, 151 N.J. Super. 440, 446 (App. Div. 1977).] 63a Appendix B Also, see Jackson v. Muhienberg Hospital, 53 N.J. 138, 142-143 (1969), as to the important considerationsor policy which are plainiy impiicated. Reversed. 69a APPENDIX C SUPERIOR COURT OF NEW JERSEY LAW DIVISION - HUDSON COUNTY DOCKET NO. L-05052°-61 PRED S. NOLAN, RALPH R. BATTISTA, CHARLES W. CLEARLY, JOSEPH A. DAVIS, WILLIAM J. : DAVITT, JR., ANTHONY G. : GOMES, JAMES HALLECK, DONALD : Civil C. HALLIWELL, PHYLLIS J. GORLEY: Action KERKAWICH, JOSEPH M. KARKOSKY, = opppr JR., CHARLES KERR, PATRICK J. FOR LARGEY, JR., ARMAND MACHADO, : SUMMARY EDWARD M McBRIDE, THOMAS P. ae NUGENT, PETER J. REILLY, bates HERMAN J. RUSSOMANNO, EUGENE A.: 4), SCANNEPICO, RAYMOND J. SMITH, ? ppupapanry JOHN T. STARR, HAROLD C. STOLL, : LOUIS C. TREMBLE, JAMES VAN BRAMER, WALTER WARD and : DANIEL M. WATSON, : Plaintiffs, 70a APPENDIX C OTIS ELEVATOR COMPANY, a corporation organized and existing under the laws of the State of New Jersey, : Defendant. This matter having been heard by the Court on the motion of defendant for a summary judgment pursuant to R. 4:45, and the Court having considered the argument of counsel and the memoranda of law sub- mitted, and it appearing that defendant has a right to such 2@ judgment as a matter of Jaw, it is On December 22, 1983 ORDERED that judgment be entered in favor of defendant and against p'aeintifts for the reasons set J7la APPENDIX C forth in the written opinion of the court filed simultaneously herewith. /s/ Gregory J. Castano GREGORY J. CASTANO, J.S.C. 72a APPENDIX D SUPERIOR COURT OF NEW JERSEY LAW DIVISION - HUDSON COUNTY DOCKET NO. L-050529-81 FRED S. NOLAN, RALPH R. BATTISTA, CHARLES W. CLEARLY, JOSEPH A. DAVIS, WILLIAM J. DAVITT, JR., ANTHONY G. GOMES, JAMES HALLECK, DONALD : Civil C. HALLIWELL, PHYLLIS J. GORLEY KERKAWICH, JOSEPH M. KARKOSKY, JR., CHARLES KERR, PATRICK J. LARGEY, JR., ARMAND MACHADO, $ EDWARD M MCBRIDE, THOMAS P. NUGENT, PETER J. REILLY, HERMAN J. RUSSOMANNO, EUGENE a? SCANNEPICO, RAYMOND J. SMITH, : JOHN T. STARR, HAROLD C. STOLL, . LOUIS C. TREMBLE, JAMES VAN , BRAMER, WALTER WARD and DANIEL M. WATSON, :Action : OPINION Piaintiffs, 73a Appendix D V « 4 OTIS ELEVATOR COMPANY, a4 corporation organized and : existing under the iaws ot the State of New Jersey, Defendant. Decided: December 22, 1983 Greenberg, Kelley & Prior By: Wiiilam S. Greenberg For Plaintiffs Goldman, Stoldt, Breslin & Horan By: John D. Horan Reed, Smith, Shaw & Mc Clay By: Peter F. Healey For Detendant ASTANO, J.S.C. 74a Appendix D The impact of two federal statutes upon the New Jersey Law Against Discrimination, N.J.S.A. 10:5-1 et seq, when the legality of a retirement benefit pian is chalienged because of aileged age discrimination is the issue in this case. The federai iaws involved are the Employment Retirement Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq, and the Age Discrimination in Employment Act of 1967 (ADEA), 29 U.S.C. G 621 et seq. Twenty-five former employees charge that aplan adopted by Otis Elevator Company (Otis) discriminates because of age, but their complaint frames the cause of action oniy in terms of a vioiation of the New Jersey statute. No breach of a federai statute is 75a Appendix D pleaded. / Otis contends that when a challenge to an ERISA pian is based on age discrimination, the New Jersey statute is pre-empted and that, therefore, a cause of action based upon N.J.S.A. 10:5-l1 et seq, is not viabie. I agree and grant the motion of Otis for summary judgment on that basis. I No explanation has been offered as to why plaintiffs' compiaint is cast solely under the state statute. It may be that plaintiffs have failed to comply with the administrative filing requirements which are a jurisdictionai prerequisite. See Peper v. Princeton University Bd. of Trustees, 77 N.J. 55, 76 (1978). 76a Appendix D I The disputed pian was adopted in May of 1980 when Otis shut down its Harrison plant. Termination benefits were provided for a group of non-union, saiaried, manageriai employees who had at least 25 years of service, but two separate categories of benefits were set up within the group. One category appiied to those workers who were 55 years or oider at the time cf termination and the other to those who had not yet attained age 55 at that time. Empioyees in both categories received medical and life insurance options, vacation pay and a limited bonus for the fina] weeks of service. Those under 55 also received severance pay, calculated at the rate 77a Appendix D of one week's pay per year of employment. Those in the 55 and oider category” did not receive severance pay. Instead, they became eligible immediately for benefits under a pian denominated the Harrison Speciai Suppiemental Retirement Pian (HSSRP). Under HSSRP, those over 55 receive 90 per cent of their final average annuai earnings for a four-year period or until they attain the age of 62, whichever period is the longest for each individuai employee. An especially attractive feature of the plan is that the $0 per cent benefit is caicuiated on the basis of income from all sources, including that derived from social security and from benefits payable under Otis' basic *plaintiffs aliege that 27 employees quaiify under this category. 78a Appendix D retirement plan. The basic plan, remains in effect for members of beth categories pursuant to vested rights they have im it. The 25 piaintiffs ali fall into the under-55 category. They contend they would have received benefits substantially in excess of the value of thcse actuaily received upon termination if they had received the same treatment as the over ~} group. > >The 25 plaintiffs allege that the amount of their individua] benefit losses range from $73,000 to $167,000, but there is no explanation of the caicula- tion which leads to that result. 79a Appendix D Il The New Jersey Law Against Discrimina- tion, N.J.S.A. 10:5-1 et seq. was first enacted in 1945 and has been supplemented a number of times since. Originaliy, it was aimed at discrimination because of. race, color, religion, sex or national origin. In 1962, discrimination because of age was added to the iist of proscribed practices. * 4NLJ.S.A. 10:5-12 now provides in part: It shali be an uniawful employment practice, or, as the case may be, an unlawful discrimination: a. For an employer because of the ***age ***of any individual *#kto discriminate against such individuai in compensation cr in terms, conditions or privi- jeges of empioyment ***. 80a Appendix D Similariy, Titie VII of the Civii Rights Act of 1964, 42 U.S.C. Ww) 2000 et seq, as originaily enacted, prohibited discrimination in employment on the grounds of race, coior, religion, sex or national origin only. It did not deai with age discrimination. The void was filled, however, when Congress adopted the ADEA. The ADEA makes it unlawful for an employer to discriminate against any individual between the ages of 40 and 65 with respect to compensation because of age. Age ciassifications which adversely affect employee status are proscribed. 29 U.S.C. § 623 (a). On the other hand, ERISA has nothing to do with discrimination, either by reason of race, coor, reiigion, sex, or nationa> origin or by reason 8la Appendix D of age. It is designed to promote the interest of employees and their beneficiaries in employee fringe benefit plans. Alessi v. Raybestos - Manhattan, Inc., 451 U.S. 504, 510 (19381). With comprehensive standards which regulate reporting, disclosure and fiduciary responsibilities, it imposes participation, funding and vesting requirements on pension and welfare plans. By its expiicit terms, ERISA pre-empts any statute which may “relate to" any employee benefit plan. 29 U.S.C. § 1144 (a)>, However, there are certain 29 USCA § 1144 (a) provides that: Except as provided in sub- section (b) of this section, the provisions of this title 82a Appendix D specified exceptions. 29 U.S.C. § 1144 (b). Exempt from pre-emption are state laws regulating insurance, banking or securities, state criminal iaws and plans maintained solely for the purpose of complying with applicable workmen's compensation or disability insurance and Title IV shail supersede any and all state laws insofar as they may now or hereafter relate to any empioyee benefit pian described in section 4 (a) and not exempt under section 4 (b). 83a Appendix D laws. The Act aiso buwides that: * * *nothing in this titie shaii be construed to aiter, amend, modify, invalidate, impair Or supersede any law of the United States * * * or any rule or regulation issued under such law. 29 U.S.C. § 1144 (d) Iil The first determination to be made here is whether the New Jersey statute “relate[s] to" employee benefit plans. Obviously, N.J.S.A. 10:5-1 et seq does not deai specifically with ERISA plans. It deals comprehensively with discrimination. 84a Appendix D Notwithstanding, the pre-emption provision in ERISA pre-empts ali state statutes insofar as they "relate to" plans covered by ERISA even though they may not have been designed by the state legislatures with employee benefit plans particuiarly in mind. "A law ‘relates to' an empiocyee benefit pian, in the norma] sense of the phrase, if it has a connection with or reference to such a pian." Shaw v. Deita Air Lines, Inc., {+ 103 Sup. Ct. 2290, 2900 (1983).° ®Although the claim in Shaw was for discrimination because of pregnancy, one of the statutes involved, the New York Human Rights Law, N. Y. Exec. Law § 296.1 (McKinney 1962 and Supp 1922-3), which was the subject of an 65a Appendix D Obviously, the discrimination which plaintiffs ailege to have resulted here has a connection with an empioyee benefit plan. As it would be applied in this case, therefore, N.J.S.A. 10:5-1 "relate[s] to" an empioyee benefit pian. Consequentiy, the New Jersey Law Against Discrimination in the context in which it arises in this case is pre- empted by ERISA uniess one of the exceptions in ERISA saves it from pre-emption. ERISA pre-emption ciaim, was neariy identicai in language to N.J.S.A. 10:5-l1. 86a Appendix D IV Most of the exceptions manifestly do not apply. N.J.S.A. 10:5-1 does not regulate insurance, banking or securities and it is not a state criminal law. It is not maintained soiely for the purpose of complying with applicable workmen's compensation laws or unemployment compensa- tion or disability insurance law. The only way an exception might possible be carved out, therefore, would be if pre-emption of N.J.S.A. 10:5-1 would be found to "“aliter, amend, modify, invaiidate, impair or supersede any law of the United States." That approach was attempted in Shaw, supra, in a Similiar context. Piaintiffs there argued that a state 87a Appendix D statute enforced Titie VII of the federal Civil Rights Act and that, for that reason, pre-emption of it would “impair and modify" Titie VII. The Supreme Court disagreed, deciaring that Titie VII does not transform all state fair employment laws into federal iaws just because state laws piay a significant. part in the enforcement of Titie VII. The Court pointed out that since Title VII does not itself prohibit any specific practice a state statute, when it prohibits a particular practice, is not enforcing Titie VII. As a resuit, Titie VII wouid not be undermined by pre-emption and such a state statute would not be saved from pre-emption. Since age discrimination is covered by the ADEA and not Title VII, in this case it is necessary to examine 88a Appendix D the interaction of N.J.S.A. 10:5-1 and the ADEA to determine whether pre-emption of the New Jersey statute wouid "impair or supersede" the ADEA. The ADEA is a seif-contained, independent statute. An age discrimination claim by individuals between the ages of 40 and 65 is cognizabie and enforceabie under its provisions whether or not the iocai jurisdiction has enacted an age discrimination statute and it does not rely soiely on state statutes for enforcement. 29 U.S.C. § 626. Consequentiy, pre-emption of N.J.S.A. 10:5-1 wouid not "impair or supersede" the ADEA. The federal law would not be affected at ail. Since none of the exceptions to pre-emption enumerated in ERISA appiy 89a Appendix D to an age discrimination challenge to an ERISA plan by empioyees in the 40 to 65 age bracket, the Law Against Discrimina- tion is not saved from pre-emption by ERISA. ’ This court does not rule on the interaction or reiationship of ADEA and the New Jersey Law Against Discrimination in actions which do not invoive alieged discrimination in ERISA covered plans, or which invaiue [sic] employees under 40 or over 65. ~ eee A oe a te ee 90a Appendix D Since plaintiffs have eiected to pursue whatever age discrimination cause of action they might have oniy under the pre-empted statute and not under the ADEA, ° Otis is entitled to judgment as a matter of law. Its motion tor summary judgment is granted. erhe ADEA wouid not be pre-empted by ERISA, but it may not be applicable otherwise. e maw whe CaM. waite. ~~ ee. ee st te Ne te ae Se he 9la APPENDIX E UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY CIVIL 82-1888 August 12, 1982 FRED S. NOLAN, et als., Plaintiffs, vs. OTIS ELEVATOR COMPANY, Defendant. ORDER For the reasons set out in the Opinion of even date, It is on this 12th day of August, 1982, ORDERED, that l. The case is hereby remanded to the Superior Court of New Jersey, as having been removed improvidently and without jurisdiction, 28 USC §1447(c). 92a Appendix E 2. No costs or attorneys fees are allowed. 3. The clerk is authorized to return the deposit of $500 made June 16, 1982, in lieu of a removal bond, to the defendant's attorney of record. s/ Vincent S. Giunno, U.S.D.Jd. Original to Clerk XC 3 All counsel 93a APPENDIX F UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY Civil No. 82-1888 August 12, 1982 FRED S. NOLAN, et als., Plaintiffs, vs. OTIS ELEVATOR COMPANY, Defendant. Appearances: Greenberg, Kelley & Prior, Esqs. by William S. Greenberg, Esq. and James F. Schwerin, Esq. (Trenton) for plaintiffs Goodman, Stoldt, Breslin & Horan, Esqs., by John D. Horan, Esq. (Hackensack) attorneys; Peter F. Healey, Esq. and William P. Peterson, Esq. (D.C.) of counsel, for deiendant. ‘ OPINION BIUNNO, Senior District Judge. This 1s a case removed here from 94a Appendix F Superior Court of New Jersey, in which the court initiated inquiry by order to show cause on the question whether the case was removed improvidently and without jurisdiction so as to require its remand under 28 USC §1447(c). The case is not removable under diversity jurisdiction because defendant has dual citizenship in New Jersey (where is was incorporated) and Connecticut (where its principal palce of business is located, see 28 USC &1332(c), and 28 USC §1441(b), last sentence. Only defendants who are not citizens of the forum may remove a case on diversity grounds. Beyond that, all but one of the plaintiffs appear to be citizens of New Jersey. Thus, removal is grounded (if it can be sustained at all) on grounds 95a Appendix F that the case “arises under" the Con- stitution, law or treaties of the United. States, 28 USC §133l(a), or under an Act of Congress regulating commerce, 28 USC §1337. The complaint, which is by 25 named plaintiffs, alleges that all the plaintiffs were employees of defendant Otis, were employed in management positions, and were not represented by any labor union. It says that during 1980, all plaintiffs were terminated as part of a reduction in force effected for financial reasons at the Harrison plant, with a final work date of May 16, 1980. [NOTE: the Answer alleges that only 20 plaintiffs were so terminated; it says that four were transferred to another facility at Yonkers, N.Y. and were iater terminated, Or retired, while a fifth went on sick- 96a Appendix F leave and then retired on disability pension. Assuming these allegations to be true, the case asserted by the Other 20 remains unaffected]. The complaint alleges that each plaintiff had 25 or more years of service with Otis at termination, and that each was under 55 years of age, and received a severance benefit of 1 week's pay for each year of service. It says that “other employees” who had 25 years‘ or more service were terminated but who were 55 years of age or older, received “benefits greatly exceeding those paid to plaintiffs." It does not say whether the “other employees" were also management employees not represented by a labor union, nor does it say whether the other employees received a severance benefit plus some other kind of benefit, or no severance benefit but some other kind of benefit instead. 97a Appendix F What it does say, for each plaintiff, that had the individual been 55 years Or more Old, and was treated as were those of that age, each would have received benefits worth $X more than was paid (each amount being in excess of $10,000). It then alleges that Otis‘ action in paying greater benefits to those 55 years of age or more, with 25 years Or more of service, than was paid to those under 55 with like service, was an unlawful discrimination as to a term, condition or privlege of employ- ment because of age, in violation of NJSA 10:5-12(a), and claim is made for the differential. Whether or not the claims are valid ones under State law is not the question here. New Jersey statutes dealing with various kinds of discrimination under various circumstances are quite old, going back to the 1800's. The 98a Appendix F The modern Law Against Discrimination Originated as NJPL 1945, c.169, and was designed to fulfill guarantees of civil rights provided in the Constitution of 1844, which were continued in the Constitution of 1947, as well as in exercise of the police power and to promote the general welfare, see N.J.S.A. 10:5=2. N.J.Const. 1644, Art. I, par. 1, declared the natural and inalienable right Of pursuing and obtaining safety and happiness. Art. 1, sec. 4, declared that no person was tc be denied the enjoyment of any civil right, merely on account of his religious principles. Nid. Const. 2347, By Act I, Oar. i, continued the happiness clause, and enlarged the civil rights clause in Art. I, par. 5, to forbid discrimination 99a Appendix F because of religious principles, race, color, ancestry or national origin. The New Jersey Law Against Discri- mination did not list age, marital status or sex as forbidden criteria in various contexts. these were added later by amendment. At the time "age" was added as a forbidden criterion in employment contexts but not for other circumstances, the act was also amended to include what is now N.J.S.A. 10:5-2.1, which provided in part that nothing in the Law Against Discrimination is to be construed "to interfere with the operation of the. terms or conditions and administration of any bona fide retire- ment pension, employee benefit or insurance plan or program." See N.J.P.L. 1962, "ae 100a Appendix F These features, of course, do not tend to disclose that the case “arises" under any federal source of law. They deal only with state law, and provide no basis for removal. The petition for removal asserts other facts. It asserts that the Harrison plant was shut down solely for financial reasons, its physical plant and equipment sold and employees terminated. It says that under a deferred compensation plan established for the Harrison plant, management employees not represented by a labor union who were 55 years of age or over and who had 25 years or more of service, were paid a special Supplemental retirement benefit. This benefit is said not to have been payable to the terms of the plan to the plaintiffs as they were under age 55. 10la Appendix F The petition asserts that plaintiffs cannot state a valid cause of action under state law because, by federal law the subject is preempted by ERISA, 29 USC §1001, et seq. If they have Claims at all, it is argued that they arise under either ERISA or the federal Age Discrimination in Employment Act (ADEA), 29 USC §921, et seq. Alternatively, it is said that ERISA preemption involves interpretation of that law and ultimately the Supremacy Clause, both of which are said to unavoidable, which go to the heart of the validity of the claims. As a second alternative it is argued that the ciaims arise exclusively under ERISA as an action by “participants" or “beneficiaries" to recover benefits or enforce rights under the terms of 102a Appendix F a plan, 29 JSC §1007(7) and (8). While it is conceded that ADEA itself contains no preemption provision in respect to state laws on age discri- mination, it is argued that ERISA and ADEA taken together have this effect, and that as a consequence, the real nature of the claim is federal despite the plaintiffs' characterization of it, or that the claim is one that is exclusively governed by federal law SO chk plaintiffs are necessarily stating a federal cuase of action no matter whether it is so articulated or not. See, e.g., such cases as Burgess v. Charlottesville, etc., 477 F.2d 40(CA 4, 1973); Romick v. Bekins Van etc., 197 F.2d 369 (CA 5, 1952); Johnson v. England, 356 F.2d 44 (CA 9, 1966). 103a Appendix F This is not the situation in this case. Plaintiffs" complaint states, and is intended to state, a claim under the state statute only. No claim is made under ERISA or under ADEA. The federal questions or preemption, and the like, even assuming they are valid, are raised as defenses and to support the counterclaim for declaratory judgment. This does not provide a basis for removal, see Madsen v. Prudential Federal § aL, 635 F.2d 797 (CA 10, 1980), cert. den.; Stone v. Stone, 632 F.2d 740 (CA 9, 1980), cert. den.; First Natl etc. v. Aberdeen etc., 627 F.2d 843 (CA 8, 1980). There is no need to review here the entire history of the removal stat’ tes since the first Judiciary Act of 1789. It is sufficient to note 104a Appendix F that since the Act of March 3, 1887, from which the present statute, 28 USC §1441 is derived, removal is not authorized in a case where the federal question is a matter of defense. See State of Tennessee v. Bank of Commerce, 152 UL 511 (1894). Only a defendant may remove, Chicago, etc. Co. v. Stude, 346 U.S. 574 (1954), and so even a plaintiff who sues in state court and has a federal counterclaim asserted against him cannot remove, Oregon, etc. v. Andrews, 458 F.2d 382 (CA 9, i[S7a0:« Another leading case is Gully v. First Natl Bank, 299 U.S. 109 (1936), where the suit sought to be removed was to collect taxes under state law from a national bank, and was ordered remanded even though the state's power 105a Appendix F to levy the tax depended on federal law. See, also, Shamrock, etc v. Sheets, 313 U.S. 100 (1941) which precludes a plaintiff against whom a counterclaim is asserted from removing under the Statute. No doubt there has been considerable debate about altering these Principles, as in the ALI Study of the Division of Jurisdiction, etc., adopted in 1965 and 1968 (Philadelphia 1969). The text of §1312 (a) there Proposed would have allowed removal by a defendant on the basis of a federa] defense or counterclaim, as well as by a plaintiff against whom a federa] counterclaim Was asserted, among others. The drafters' note says: 106a Appendix F “Subsection (a) is a major change in present law. To allow removal on the basis of a federal defense Or counterclaim is new.” The proposed draft has never been enacted, and is not law this court can apply. Quite evidently, plaintiffs have sued in state court to make a state claim if it can be made. They may recognize that they have no federal claim or at least choose not to assert any. The federal defenses raised by Otis may preclude any recovery under state law. If so, that is a result to be achieved in the state court and provides no basis for removal here. On the other hand, there may turn out to be an area of state law for which federal law does not control. If that be the case, then that claim surely "=e Or oe VT IaeeewvrT* 6 © 107a Appendix F does not “arise” under federal law and cannot be removed. The age .laws are different in various respects. The state law eentos in the areas of employment, boycotts and credit transactions. The federal law applies only in employment. The state law applies from age 18 on up, with no upper limit. The federai law originally applied to ages 40-65, and was amended to ages 40-70. There is no precedent binding on this court dealing with the interplay between ERISA, ADEA and a state age discrimination law. Under all these circumstances, the court cannot say that the complaint asserts a federal Claim disguised as a state claim by artful pleading. Whether the asserted state claim has any validity is a matter ee 108a Appendix F of defense. The Superior Court may conclude that the direction of NJSA 10:5-2.1 precludes recovery without regard to federal law. Otis also argues that even if the complaint be remanded, jurisdiction should be retained over the counterclaim because it has an independent basis for federal jurisdiction. The precedents cited from the Court of Appeals in this circuit do no support the proposition. Neither Rengo v. Molins, 657 F.2d 535 (CA 3, 1981), nor National Research v. Bartholomew, 482 F.2d 386 (CA 3, 1973) was a removal case and so neither addresses the question involved here. Ferguson v. Eakle, 492 F.2d 26 (CA 3, 1973) was a removal case, but there was no issue of improvident removal or lack of jurisdiction. Rather, after 109a Appendix F an answer and counterclaim there was a dismissal under F.R.Civ.P. 41‘so far as the complaint was concerned, and Rule 41 itself requires retention of the counterclaim under those conditions. The difficulty with the argument is that it ignores the matter of juris- diction. The district courts are of limited statutory jurisdiction. If a case be removed improvidently and without jurisdiction under the removal Statute, no jurisdiction is obtained by the filing of a counterclaim even though it states a federal claim. In arriving at its conclusions, the court takes care to note that it has expressed no view on the Opposing views presented on the merits of the federal defense, or, for that matter, on the possible inapplicability of 110a Appendix FP of the state Statute sued on in light Of the 1962 declaration, enacted at the same time that "age" was added to some parts of the Statute, barring interference with any bona fide retire- ment, pension, employee benefit or insurance Plan or program, NJSA 10:5-2.1, a provision of the Same nature as that in ADEA, 29 USC 623(f) (2). Plaintiffs also seek the allowance of attorneys fees and costs. Precedents in other circuits are relied on for the proposition that attorneys fees are allowable on remand for improper removal. No claim is made that they are allowable here under Roadway Express V- Piper, si ae 2d 488 (1980). Assuming there is such authority (which the court need not decide), llla Appendix F it is admittedly within the sound discretion of the court to make such allowance. The court exercises its discretion is disallow costs, or attorneys fees. The matter was raised by the court on its own initiative, and most of the plaintiffs’ brief, which was nearly double the maximum length allowed by General ule 27 of this district was addressed to the merits of Otis's alleged federal defenses, a subject which this court could not deal with unless removal was proper. This conclusion is that the case was removed improvidently and without jurisdiction, and so must be remanded to Superior Court of New Jersey as required by 28 USC §1447(c). s/Vincent P. Biunno, U.S.D.J. Original to Clerk xc: All Counsel --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385018_1974%3A1. Public record. Not legal advice.