Opposition Brief — DiBiase v. SmithKline Beecham Corp.

Supreme Court, U.S.

95,-292 FILED

SEP 18 1995

CLERK

In THE

Supreme Court of the United States

OCTOBER TERM, 1995

JOHN DIBIASE,

Petitioner,

Vv.

SMITHKLINE BEECHAM CORPORATION,

Respondent.

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Third Circuit

BRIEF FOR RESPONDENT IN OPPOSITION

STEVEN B. FEIRSON

(Counsel of Record)

JOSEPH PATRICK ARCHIE

DECHERT PRICE & RHOADS

4000 Bell Atlantic Tower

1717 Arch Street

Philadelphia, PA 19103-2793

(215) 994-4000

September 18, 1995 Counsel for Respondent

WILSON - Epgs PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001

QUESTIONS PRESENTED *

1. Did the Court of Appeals err by holding that, where

an employer acted pursuant to a facially neutral policy,

an employee who claimed disparate treatment on account

of age, needed to adduce evidence that the employer in-

tended to discriminate on the basis of age?

2. Did the Court of Appeals err by holding that dis-

Criminatory intent was not shown by the fact that an

employer offered an older employee the same severance

benefit options offered to all other employees, regardless

of age, after the employer was told that the older employee

believed such treatment was discriminatory?

3. Did the Court of Appeals err by finding no age

discrimination where an employer offered an older em-

ployee, upon his termination, the option of receiving

enhanced severance benefits in exchange for a general

release of all claims against the employer and, in doing

so, the employer acted pursuant to a policy under which

the same option was offered to every terminated employee,

regardless of age?

* Respondent offers these three questions as proper formulations

of the issues raised in the Petition for a Writ of Certiorari (‘‘Peti-

tion” or “Pet.”). As explained in the Argument section of this

Brief, however, Respondent believes that the first question is not

appropriate for this Court’s review because it was not argued

below. See p. 8 infra.

(i)

ll

PARTIES TO THE PROCEEDING

All of the parties to the proceeding are identified in the

Caption.

STATEMENT PURSUANT TO RULE 29.1

Respondent SmithKline Beecham Corporation (“SKB”)

is a Pennsylvania corporation. SKB’s parent is SmithKline

Beecham PLC (UK). SKB’s subsidiaries (excluding those

wholly owned by SKB) are: Beecham Group, P.L.C.;

Beecham Pakistan (Private) Limited; Beecham Pharma-

ceuticals (PTE) Limited; Beecham Portuguesa Produtos

Farmaceuticos E Quimicos LTDA; Beecham Yakuhin

K.K.; Beecham-FSM Limited; Beeger Investments (PTY )

Limited; Beelsa Investments (PTY) Limited; Beeyar In-

vestments (PTY) Limited; Cainta Realty Corporation;

Eskay, S.p.A.; Fournex S.A.; Group Laboratories South

Africa (Proprietary) Limited; Hill & Murray Limited;

Instituto Luso Farmaco S.A.; Macleans Limited; Masenco

S.A. De C.V.; Mayfynn (Proprietary) Limited; Medisana

Pharmazeutische U. Drogen-Handel GES.M.B.H.; P.T.

Smithkline Beecham Pharmaceuticals; Paola Cocco, LDA;

Produtos Beecham-Cosmeticos E Alimentacao LTDA;

Publimark Publicidade E Marketing LTDA; S.R. One

International B.V.; Sark S.p.A.; Smith Kline & French

(N.Z.) Limited; Smith Kline & French B.V.; Smith Kline

& French Laboratories Limited; Smith Kline & French

of Pakistan Limited; Smith Kline & French Pension

Trustees Limited; Smith Kline & French Protugesa Pro-

dutos Farmaceuticos LDA; Smith Kline & French, S.p.A.;

Smithkline Beecham (Manufacturing) Limited; Smith-

kline Beecham (NZ) Limited; Smithkline Beecham A.B.;

Smithkline Beecham A/S; Smithkline Beecham AG; Smith-

kline Beecham C.I.S.A.; Smithkline Beecham Consumer

Brands A.B.; Smithkline Beecham Consumer Brands B.V.;

Smithkline Beecham Consumer Healthcare (PTY) Lim-

ited; Smithkline Beecham Consumer Healthcare (Vene-

zuela) S.A.; Smithkline Beecham Consumer Healthcare

———— eee een

iii

Limited; Smithkline Beecham Consumer Healthcare PTE,

Ltd.; Smithkline Beecham Consumer Healthcare Sendirian

Berhad: Smithkline Beecham de Chile, $.A.; Smithkline

Beecham de Venezuela C.A.; Smithkline Beecham Far

East B.V.; Smithkline Beecham Farmaceutica S.A. de

C.V.; Smithkline Beecham Farmaceutici S.p.A.; Smith-

kline Beecham Guatemala Limitada; Smithkline Beecham

Inc.; Smithkline Beecham Laboratoires Pharmaceutiques

SA: Smithkline Beecham Laboratories (Australia) Lim-

ited: Smithkline Beecham Markenartikel GMBH & Co.

O.H.G.; Smithkline Beecham Markenartinel GMBH;

Smithkline Beecham Nigeria PLC, Smithkline Beecham

Overseas (No. 2) Limited; Smithkline Beecham Pharma

Ges, M.B.H.; Smithkline Beecham Pharma Inc.; Smith-

kline Beecham Pharma S.A.; Smithkline Beecham Phar-

maceuticals (PTY) Limited; Smithkline Beecham Phar-

maceuticals A.B.; Smithkline Beecham Quimica Do Nor-

deste Ltda; Smithkline Beecham Quimica S.A., de C.V.;

Smithkline Beecham S.A.; Smithkline Beecham Sante

Animale S.A.; Smithkline Beecham Santa Grand Public

S.A.; Smithkline Beecham Seiyaku K,K.; Smithkline

Beecham-B Limited; Smithkline Bottling Company (PTY)

Limited; W. Jordan Brushware (Proprietary) Limited;

XIXIA Pharmaceuticals (Proprietary) Limited.

TABLE OF CONTENTS

Page

ot pg BR yf | yy | | ee ccna i

BE I I io ia ctcceetsiciencniareeenetvainieianaitesdaemegtnersiia ii

STATEMENT PURSUANT TO RULE 29.1 .................. ii

po TF Bt ge ty y 8 |, | Renn ee vii

STATEMENT OF THE CASE ...000000.....cccceccesscssceneeeeee 1

SUMMARY OF ARGUMEINE ..0.....<scceieccccssecsescscesececseses 4

REASONS FOR DENYING THE WRIT ...................... 5

I. THIS CASE DOES NOT WARRANT A DECI-

SION ON THE MERITS BY THIS COURT.... 5

Il. THE COURT OF APPEALS’ VIEW OF

THE DISCRIMINATORY INTENT REQUIRE-

MENT IN DISPARATE TREATMENT CASES

BED CPI errepeceninrncscosieenrens Sasha rininnaainacin 7

A. The Court Of Appeals Opinion Is Consistent

With The Prior Opinions Of This Court On

I 7

1. The Court of Appeals opinion is not in

conflict with Johnson Controls .................. 7

2. This Court should not grant certiorari to

review whether the Court of Appeals cor-

rectly applied the intent requirement in

SE ID saa eit ccne neeecetinnatnd nea 8

a. This issue was not raised in the Court

RI arene ny nee ita ASIEN 8

b. The Court of Appeals properly treated

independent evidence of discrimina-

tory intent as necessary for DiBiase’s

SERNA ONE IE Ne Cte e CENA ES TBE I 9

vi

TABLE OF CONTENTS—Continued

Page

B. Neither Precedent Nor Logic Supports Treat-

ing Notice Of An Employee’s Intention To

File A Claim As Proving The Employer’s

Discriminatory Intent ..........................-.. sieeiieaaid 11

III. THE COURT OF APPEALS DECISION DOES

NOT CONFLICT WITH THIS COURT'S DE-

SE BEY BEIT IELRIEE beceennnceneetimernesiionn 12

IV. THE COURT OF APPEALS DECISION DID

NOT VIOLATE ANY CONGRESSIONAL

MANDATE WITH RESPECT TO THE ADEA.. 14

|_| EERE aT ere eon ner ar eAaIeL ee Ne A 17

vii

TABLE OF AUTHORITIES

CASES . Page

Cirillo v. ARCO Chemical Co., 862 F.2d 448 (3d

Cir. 1988) P vn at St 15

Delta Air Lines v. August, 450 U.S. 346 (1981)

Dothard v. Rawlinson, 433 U.S. 321 (1977) 13

Hazen Paper Co. v. Biggins, US. ——, 113

S. Ct. 1701 (1993) 9,10

Lancaster v. Buerkle Buick Honda Co., 809 F.2d

539 (8th Cir.), cert. denied, 482 U.S. 928

* | Pane bai 15

Los Angeles Dep't of Water and Pow er v. Man-

hart, 485 U.S. 702 (1978) ..............................5, 12, 13, 14

Trans World Airlines, Inc. v. Thurston, 469 U.S.

111 (1985) eer, RL ISU tLe 13

UAW v. Johnson Controls, Inc., 449 U.S. 111

(1985) ..... re eetes od 4,7, 8,11, 12,13

STATUTES

Be Tras Oe IE avncnccnesesvcteenrctpaenducncnnncindiaceeniansane 14, 16

H.R. 1432, 101st Cong., 1st Sess., 135 Cong. Rec.

H697 (Daily Ed. Mar. 15, 1989) . a ” 15

S. 54, 101st Cong., 1st Sess., 135 Cong. Rec. 5168

(Daily Ed. Jan. 25, 1989) 15

S. Rep. No. 263, 101st Cong., 2d Sess. 31 (1990) 16

IN THE

Supreme Court of the United States

OCTOBER TERM, 1995

No. 95———

JOHN DIBIASE,

Petitioner,

Vv.

SMITHKLINE BEECHAM CORPORATION,

Respondent.

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Third Circuit

BRIEF FOR RESPONDENT IN OPPOSITION

STATEMENT OF THE CASE

An accurate statement of the facts of this case appears

in the opinion of the Court of Appeals. See 48 F.3d at

722-24. A brief summary follows:

In early 1992, as part of a reduction in its work-

force, SmithKline Beecham Corporation (“SKB”) termi-

nated John DiBiase’s employment as a shift supervisor in

the data processing department of its facility in King of

Prussia, Pennsylvania. DiBiase was then 51 years old. See

id. at 722.

At the time of DiBiase’s termination, SKB had in effect

a severance policy, which provided terminated employees

with cash payments and continuation of their medical and

dental insurance coverage. The policy entitled every termi-

nated employee—without regard to age, race, sex or any

other factor—to choose one of two options: a lump

Ce

2

| sum cash payment equal to twelve months’ salary and a

three-month continuation of insurance coverage (the

“Basic Benefits Package”); or a lump sum cash pay-

ment equal to fifteen months’ salary and a six-month con-

tinuation of insurance coverage (the “Enhanced Benefits

Package”). See id.

To receive the Basic Benefits Package, an employee

needed do no more than select that option. To receive

the Enhanced Benefits Package, an employee was required

to execute a standard form, stating that the employee

thereby agreed to

release, waive and forever discharge SmithKline

Beecham Corporation . . . from any and all claims,

agreements, causes of action, demands or liabilities

of any nature whatsoever . . . arising, occurring or

existing at any time prior to the signing of this

General Release, whether known or unknown.

The general release expressly applied to all claims under

federal employment discrimination laws, including the

ADEA. See id.

SKB’s policy did not allow for a terminated employee

to receive the Enhanced Benefits Package in exchange

for a release of some, but not all, claims. Nor did the

policy provide a graduated schedule of enhanced benefits

according to the nature, number or magnitude of the

claims that a terminated employee might have and be

willing to waive; it made no attempt to assign any par-

ticular values to particular types of claims, e.g., 100x for

a race discrimination claim, 150x for an ERISA claim,

175x for an OSHA claim. Rather, identifying the value

of any particular employee’s claims was left to that em-

ployee, who could choose whether it was in his or her

interest to waive the claims in exchange for the incre-

mental benefits contained in the Enhanced Severance Pack-

age. See id.

Consistent with its policy, SKB offered DiBiase, upon

his termination, a choice between the Basic Benefits Pack-

age and the Enhanced Benefits Package. However, DiBiase

a ,

3

wanted both to receive the Enhanced Benefits Package

and to sue SKB on the theory that it had terminated him

because of his age. He proposed, therefore, that SKB give

him the enhancement in exchange for only a partial release

of claims. SKB refused DiBiase’s request and he chose

the Basic Benefits Package. See id. at 722-23.

DiBiase then filed his wrongful termination claim. The

District Court concluded that the claim lacked even the

minimum factual evidence to go before a jury and

awarded SKB summary judgment. See id. at 723.

DiBiase also sued SKB on the ground that its policy of

requiring all terminated employees to release all claims in

order to receive the Enhanced Benefits Package unlaw-

fully discriminated against older workers. His theory was

that, since cnly persons over 40 years of age (“older

workers”) could have—and therefore, give up—ADEA

claims, older workers had to give up more than younger

workers to receive the Enhanced Benefits Package.* The

District Court awarded DiBiase summary judgment on

that claim, finding that SKB’s policy was facially discrimi-

natory. See id. at 723-24.

The Third Circuit reversed, finding that (1) there was

no facial discrimination because the policy, on its face,

treated everyone identically, i.e., each employee who

chose the Enhanced Benefits Package was required to

give up all claims; and (2) that there was no nonfacial

discrimination because (a) there was no adverse treat-

ment and (b) there was no evidence of any intent to dis-

criminate. See id. at 726-30.

The fundamental error identified by the Court of Ap-

peals in the position of DiBiase and the District Court

was their failure to recognize that the general release did

not waive abstract rights, but rather accrued claims. Since

not every worker protected by the ADEA has an accrued

ADEA claim, and not every accrued ADEA claim is more

* DiBiase chose to pursue his claim exclusively under the “dis-

parate treatment” theory and made no attempt to make out a case

of “disparate impact”. See 43 F.3d at 730-31.

4

valuable than other claims, it is wrong to say, as DiBiase

and the District Court did, that older workers necessarily

must give up more than younger workers in order to re-

ceive the Enhanced Benefits Package. The value of any

particular worker’s general release depends upon his or

her particular experiences as an employee at SKB and not

upon whether he or she is protected by a greater number

of statutes. Indeed, as the District Court’s dismissal of

DiBiase’s wrongful termination claim demonstrates, al-

though DiBiase had ADEA rights, he did not have an

ADEA claim. Once the erroneous conflation of rights and

claims is removed, it becomes readily apparent that the

SKB policy did not subject either DiBiase in particular,

or older workers in general, to any adverse treatment on

account of age. See id. at 729-30.

SUMMARY OF ARGUMENT

1. This Court should not grant certiorari in this case

because it is not a sufficiently important case to warrant

such attention. Neither this Court nor any other Court

of Appeals has passed on the precise issue presented,

whether an employer violates the ADEA by offering every

terminated employee enhanced severance benefits in ex-

change for a general release of all claims. Therefore, there

is no direct conflict between the opinion below and this

Court and no split among the circuits. Nor is there any

prospect of grave harm by leaving the decision below un-

reviewed; employees will simply continue to be given an

opportunity to decide for themselves whether receiving en-

hanced benefits in exchange for waiving all accrued claims

is in their best interests. Finally, this case revolves, in

large part, around the particularities of DiBiase’s own ex-

periences at SKB, e.g., the significance of his expressing to

SKB his opinion that its policy was discriminatory. A

decision by this Court on the merits, therefore, might

have very little general applicability.

2. DiBiase’s claims that the Court of Appeals erred on

particular legal matters are without merit. His position

that the court below should have read UAW v. Johnson

Controls, Inc., 449 U.S. 111 (1985), as eliminating the

La RE a ee

5

need for DiBiase to prove discriminatory intent on the

part of SKB is wrong. The Court of Appeals correctly

interpreted Johnson Controls to say that independent evi-

dence of discriminatory intent is unnecessary where ad-

verse treatment occurs pursuant to a policy that explicitly

discriminates on the basis of a protected trait; the Court

of Appeals also correctly found that, because SKB’s

policy was not explicitly discriminatory, DiBiase had to

produce evidence of SKB’s intent to discriminate against

him because oi his age.

Similarly, contrary to DiBiase’s position, the Court of

Appeals did not contradict Los Angeles Dep't of Water

and Power v. Manhart, 435 U.S. 702 (1978), by holding

that SKB did not engage in age discrimination against

DiBiase. The policy at issue in Manhart was the polar

opposite of the SKB policy at issue here. In Manhart,

the explicit terms of the policy classified employees ac-

cording to gender and mandated adverse treatment, in the

form of higher pension contributions, for women; in this

case, the SKB policy makes no classification of employees

and mandates the same treatment, a choice between Basic

and Enhanced Benefits Packages, for all. Clearly, the

Court of Appeals was right not to treat Manhart as re-

quiring that the SKB policy be held to be discriminatory.

Finally, DiBiase’s argument that recent amendments to

the ADEA require employers to pay older employees who

waive all their claims more than they pay younger em-

ployees who waive all their claims has no support in the

statutory language. In fact, the legislative history shows

that Congress considered and rejected the rule DiBiase

proposes.

REASONS FOR DENYING THE WRIT

I. THIS CASE DOES NOT WARRANT A DECISION

ON THE MERITS BY THIS COURT.

This case does not present any issue that makes it nec-

essary, wise or efficient for this Court to devote its re-

sources to a consideration of the individual merits of

6

DiBiase’s claim. First of all, the basic issue—whether the

ADEA proscribes employers from offering all their em-

ployees, equally, enhanced severance benefits in exchange

for a general release—has not been ruled upon by this

Court. Thus, there is no possibility that the decision below

is in direct conflict with this Court’s prior hoidings. Sec-

ond, the decision below is the only decision on the issue

by any Court of Appeals. Thus, there is no split among

the circuits requiring this Court’s resolution.

Third, there is no grave potential harm from not having

a Supreme Court decision on the issue. Employees simply

will continue to be provided with a severance benefit

option that they can freely accept or reject according to

their own appraisals of their own individual circumstances.

If they decide that the value of their accrued claims, if

any, is less than that of the enhancement, they can choose

to benefit themselves by opting for the enhancement; if

they decide that the value of their accrued claims is higher

than that of the enhancement, they can benefit themselves

by foregoing the enhancement and suing on their claims.

Fourth, a decision by this Court on the merits of this

case might well have only a very limited impact. This

case revolves around the particularities of DiBiase’s own

factual circumstances. For example, whether DiBiase’s

comment to SKB that he thought its policy was discrimi-

natory serves as evidence of intent to discriminate on the

part of SKB is a fact-bound question that would not likely

have any broad application to ADEA cases generally.

In sum, this case does not present a conflict or other

issue of sufficient significance or generality to warrant the

expenditure of this Court’s resources that would be nec-

essary to come to a decision on the merits. In addition,

as set forth in detail in Sections II, III and IV below,

Petitioner is clearly mistaken with respect to the specific

legal infirmities he claims exist in the decision below.

7

II. THE COURT OF APPEALS’ VIEW OF THE INTENT

REQUIREMENT IN DISPARATE TREATMENT

CASES IS CORRECT.

A. The Court Of Appeals Opinion Is Consistent With

The Prior Opinions Of This Court On This Issue.

1. The Court of Appeals opinion is not in conflict

with Johnson Controls.

Although DiBiase’s position is not entirely clear from

the Petition, he appears to argue that the Court of Ap

peals opinion conflicts with UAW v. Johnson Controls,

Inc., 449 U.S. 111 (1985), on the need for evidence of

discriminatory intent in disparate treatment cases. See

Pet. at 14-15. That argument, however, clearly has no

merit. Johnson Controls found no need for independent

evidence of discriminatory intent where a policy was

facially discriminatory. In Johnson Controls, this Court

said:

{T]he absence of a malevolent motive does not

convert a facially discriminatory policy into a neu-

tral policy with a discriminatory effect. Whether

an employment practice involves disparate treatment

through explicit facial discrimination does not de-

pend on why the employer discriminates but rather

on the explicit terms of the discrimination.

449 U.S. at 199 (emphasis added).

The Court of Appeals recognized that standard to apply

to facially discriminatory policies. It quoted from the

Johnson Controls passage just cited and explained its

reasoning:

[I]n a facial disparate treatment case, the protected

trait by definition plays a role in the decisionmaking

process, inasmuch as the policy explicitly classifies

people on that basis. Thus, when the policy itself

displays the unlawful categorization, the employee is

relicevd from independently proving intent.

43 F.3d at 726.

However, in the instant case, the Court of Appeals

found that SKB’s policy was not facially discriminatory—

8

indeed, that it was an “archetypical example of a facially

non-discriminatory policy”. 43 F.3d at 727. The court

explained that “[SKB] made the expanded package avail-

able to all persons willing to sign the release, regardless

of age.” Jd. Therefore, the statement in Johnson Controls

to the effect that discriminatory intent need not be shown

separately where a policy is facially discriminatory was not

directly apposite.

Thus, the opinion below is not in the least at odds with

Johnson Controls.

2. This Court should not grant certiorari to review

whether the Court of Apeals correctly applied

the intent requirement in this case.

a. This issue was not raised in the Court of

Appeals.

DiBiase appears to argue for the first time in his Peti-

tion that a claim of nonfacial disparate treatment does not

require evidence of an intention to discriminate. See Pet.

at 14-18. In the District Court, DiBaise did not raise the

issue and in the Court of Appeals, he expressly conceded

that evidence of intent to discriminate was required to pre-

vail on a nonfacial disparate treatment claim. In _ his

appellate brief, he stated:

If, arguendo, the [SKB policy] is not facially dis-

criminatory, it still unlawfully discriminates against

older workers. This follows since the only component

that a finding of explicit facial discrimination adds

is the removal of any requirement to prove there was

intent to discriminate.

Brief of Plaintiff-Appellee at 16. As a consequence of

DiBiase’s concession, the Court of Appeals did not directly

address this issue as critical for its decision. Having not

been raised below, the issue is not appropriate for review

in this Court. See Delta Air Lines v. August, 450 U.S.

346, 362 (1981) (stating that “a question presented in

the peittion but not raised in the lower court of appeals

is not properly before us”).

9

b. The Court of Appeals properly treated inde-

pendent evidence of discriminatory intent as

necessary for DiBiase’s claim.

To the extent that the Court of Appeals opinion may

be read as deciding (rather than simply assuming) that

evidence of discriminatory intent is necessary for a claim

of nonfacial disparate treatment, it is wholly consistent

with a long line of Supreme Court cases. The Court of

Appeals stated that independent evidence of discrimina-

tory intent is not necessary in facial disparate treatment

cases, but is necessary in nonfacial disparate treatment

cases. See 43 F.3d at 726-28. That is exactly what this

Court has previously held.

Indeed, intent to discriminate must be shown in all

disparate treatment cases: where the alleged discrimina-

tion is pursuant to a policy that discriminates on its face,

that intent is apparent from the policy itself and no further

evidence is necessary; where the alleged discrimination is

not pursuant to such a policy, however, independent evi-

dence of discriminatory motive is necessary. In Hazen

Paper Co. v. Biggins, U.S. , 213 & CL. T7Gl

(1993), for example, this Court stated:

Disparate treatment . . . is the most easily under-

stood type of discrimination. The employer simply

treats some people less favorably than others because

of their race, color, religion [or other protected

characteristic.} Proof of discriminatory motive is

critical, although it can in some situations be in-

ferred from the mere fact of differences in treat-

ment. ...

113 S.Ct. at 1705 (internal quotations and citations

omitted ).

In Hazen Paper itself, the plaintiff won a judgment

against his employer for wrongful discharge under the

ADEA, although there was no facially discriminatory

policy involved. The Court of Appeals affirmed, largely

10

on the basis that the plaintiff had introduced evidence at

trial that the employer had fired him in order to prevent

his retirement benefits from vesting. This Court, how-

ever, reversed and remanded, holding that “there is no

disparate treatment under the ADEA when the factor

motivating the employer is some feature other than the

employee’s age,” even a factor—such as qualification for

retirement benefits—that is correlated with age. /d. The

Court explained:

In a disparate treatment case, liability depends on

whether the protected trait (under the ADEA, age)

actually motivated the employer’s decision. The em-

ployer may have relied upon a formal, facially dis-

criminatory policy requiring adverse treatment of

employees with that trait. Or the employer may

have been motivated by the protected trait on an

ad hoc, informal basis. Whatever the employer’s

decisionmaking process, a disparate treatment claim

cannot succeed unless the employee’s protected trait

actually played a role in that process and had a

determinative influence on the outcome.

Id. at 1706 (citations omitted). Thus, Hazen Paper

makes clear that an intention to discriminate is an essen-

tial element of a nonfacial disparate treatment claim.

That is precisely the position of the Court of Appeals in

this case.’

1 DiBiase also appears to argue that the Court of Appeals deci-

sion requires a plaintiff claiming nonfacial disparate treatment to

adduce evidence that the defendant had actual] knowledge that the

practice at issue was illegal. See Pet. at 15 (including discussion

of the scienter concept applicable to certain securities law viola-

tions). Nothing in the Court of Appeals opinion, however, suggests

such a requirement. To the extent that the opinion below mentions

the intent requirement at all, it is clear that the court is referring

to the intent to discriminate on the basis of age and not to knowl-

edge of illegality. See 48 F.3d at 728 & n.10 (noting that, in the

absence of a facially discriminatory policy, DiBiase had to prove

that SKB “intended to target older workers’). In so doing, the

Court of Appeals correctly used the same notion of intent that is

1]

B. Neither Precedent Nor Logic Supports Treating

Notice of An Employee’s Intention To File A Claim

As Proving The Employer’s Discriminatory Intent.

DiBiase asserts that, by telling SKB that he thought

its policy treated older workers worse than younger

workers, he placed SKB “on notice” of the discriminatory

character of the policy. SKB’s application of the policy

despite such “notice”, DiBiase argues, is sufficient proof

of SKB’s intent to discriminate. The Court of Appeals

dismissed that argument in a footnote. See 43 F.3d at

728 n.10. DiBiase now contends that the Court of Ap-

peals position is contrary to this Court’s holding in John-

son Controls. See Pet. at 17-18. The fatal flaw of that

contention is that it presumes a similarity between John-

son Controls and this case that does not exist.

In Johnson Controls, this Court considered a_ policy

that, by its explicit terms, excluded females, but not males,

from certain jobs. Given such explicit or “facial” discrim-

ination, it was not necessary to introduce independent evi-

dence of intent to discriminate according to gender: the

words of the policy showed conclusively that the employer

intended to discriminate on that basis. See 449 U.S. at

197. Here, there is no such explicit discrimination. The

SKB policy does not, on its face, mandate that terminated

employees are to be given different severance options

according to their ages. Indeed, as the Court of Appeals

found, the SKB policy mandates the same treatment for all

and it is impossible to know, from the terms of the SKB

policy itself, which workers might be better off and

which worse off. See 43 F.3d at 727, 730. That critical

difference between the policy at issue in Johnson Con-

trols and the policy at issue here explains why there was

no need to adduce independent evidence of discriminatory

used by this Court in nonfacial disparate treatment cases. See,

e.g., Hazen Paper, 113 S. Ct. at 1706 (“In a disparate treatment

case, liability depends on whether the protected trait (under the

ADEA, age) actually motivated the employer’s decision.”).

12

intent in Johnson Controls, while there was such a need

here.

Furthermore, nothing in Johnson Controls or any other

decision of this Court suggests that discriminatory intent

may be proved merely by showing that the plaintiff ex-

pressed to the defendant his opinion that the defendant’s

policy was discriminatory. Neither DiBiase nor any other

employee is presumptively infallible on the issue of whether

an employment policy is discriminatory. And no em-

ployer need accept an employee’s opinion on the matter

as true and design and implement policies on the basis

of that opinion. Indeed, in this case, DiBiase’s opinion

was found by the Court of Appeals to be wrong; despite

his perhaps sincere feelings to the contrary, there was no

showing that SKB’s policy actually treated him less well

than it treated younger employees.

Lack of precedent aside, DiBiase’s argument should be

rejected for its unfair and nonsensical consequences. As

the Court of Appeals observed, DiBiase’s position would

allow any plaintiff to “manufacture” discriminatory intent

simply by opining to the employer that its actions were

discriminatory. 43 F.3d at 728 n.10.

III. THE COURT OF APPEALS DECISION DOES NOT

CONFLICT WITH THIS COURT'S DECISION IN

MANHART.

DiBiase also argues that, “by reasoning that the [SKB

policy] was not age discriminatory”, the Court of Appeals

decision is in conflict with Los Angeles Dep’t of Water

and Power v. Manhart, 435 U.S. 702 (1978). Pet. at

20. That argument fails, however, because the policy

at issue in Manhart, by its explicit terms, treated mem-

bers of the protected class adversely vis a vis nonmembers.

In contrast, the SKB policy, by its explicit terms, treated

all employees equally.

In Manhart, the policy at issue expressly required female

workers to contribute to a pension plan at a higher rate than

13

male workers. It was manifest—on the face of the policy

itself—that any female worker had to pay out more than

any male worker.’ Here, by contrast, every employee is

treated equally by being given the same choice of sever-

ance options. Whether any particular terminated em-

ployee is better off or worse off under the SKB policy

than any other depends upon a complex set of facts about

his or her past experience at SKB. (Only a careful analy-

sis of those facts will show how much any given worker

gives up by signing a general release in exchange for the

Enhanced Benefits Package.) As the Court of Appeals

accurately observed:

[SKB] conditioned the right to the expanded bene-

fits on an employee’s blanket waiver of all accrued

claims; this treatment cannot be said to be disparate,

because it is impossible to tell whose package of

*A long line of this Court’s decisions show that the hallmark

of facial discrimination, such as that in Manhart, is an explicit

classification of persons on the basis of a protected trait. Dothard

v. Rawlinson, 433 U.S. 321 (1977), for example, concerned a chal-

lenge to two employment policies: one expressly prohibiting women

from serving as counselors at certain correctional facilities, the

other imposing height and weight requirements for prison guards.

See 433 U.S. at 332. The Court held that only the first, because it

contained an explicit gender classification, could be facially dis-

criminatory; the second, because it contained no such classification,

was “facially neutral’. Jd. at 320.

The cases following Dothard that this Court has treated as facial

discrimination cases reveal that hallmark. See Manhart, 435 U.S.

702, 711, 715 (1978) (concerning a practice that explicitly required

women to contribute more than men to a pension program) ; Trans

World Airlines, Inc. v. Thurston, 469 U.S. 111, 121 (1985) (concern-

ing a policy expressly allowing only pilots under 60 to “bump” flight

engineers) ; Johnson Controls, 449 U.S. 187, 197 (1991) (concern-

ing policy that explicitly prevented fertile women, but not fertile

men, from being placed in certain jobs).

The SKB policy at issue here contains no explicit instruction that

older workers be treated differently; in fact, it expressly mandates

that all employees be treated the same. Thus, this case is manifestly

unlike the facial discrimination cases cited above.

14

potential claims is more valuable. Therefore, in light

of the above, DiBiase has no disparate treatment

claim against [SKB].

43 F.3d at 730 (footnote omitted).

Manhart and this case are polar opposites: whereas

the Manhart policy explicitly classified employees accord-

ing to a protected trait (gender) and treated one group

(women) adversely, the SKB policy contains no explicit

classification and treats all employees the same. Hence,

Manhart cannot control the disposition of this case and

the Court of Appeals decision cannot be said to be in

conflict with Manhart.

IV. THE COURT OF APPEALS DECISION DID NOT

VIOLATE ANY CONGRESSIONAL MANDATE

WITH RESPECT TO THE ADEA.

Finally, DiBiase argues that the Court of Appeals de-

cision violates a Congressional mandate with respect to

the ADEA. See Pet. at 23-24. That argument, however,

wrongly assumes that the Older Workers Benefit Protec-

tion Act (“OWBPA”) prohibits employers from offering

older and younger workers equally the option of receiving

enhanced severance benefits in exchange for a general

release of all claims against the employer.

A principal feature of OWBPA is its specification of

certain conditions that must exist in order for waivers of

ADEA claims to be considered valid. See 29 U.S.C.A.

§ 626(f). By legislating such conditions, Congress made

clear that neither ADEA waivers nor employer requests

for such waivers are, in principle, unlawful. In addition,

the legislative history of OWBPA shows that Congress did

not find policies such as SKB’s to be objectionable.

In enacting OWBPA, Congress focused on the practice

of requesting waivers of ADEA claims and on the con-

sideration to be paid for such waivers. Indeed, Congress

focused specifically on the practice at issue here: ex-

changing enhanced severance benefits for a general re-

15

lease of all claims. The Senate Report on OWBPA ex-

presses Congress’ broad concern with ADEA waivers by,

among other things, referring explicitly to two judicial ©

decisions, Cirillo v. ARCO Chemical Co., 862 F.2d 448

(3d Cir. 1988), and Lancaster v. Buerkle Buick Honda

Co., 809 F.2d 539 (8th Cir.), cert. denied, 482 U.S. 928

(1987). See 5 1990 U.S.C.C.A.N. 1509, 1537. Both

cases involved ADEA waivers made as part of general

releases. While the Senate Report focused on how those

decisions analyzed the validity of the waivers (and ex-

pressed a preference for the Cirillo approach), it revealed

absolutely no discomfort ‘with the practice of providing

all employees with the same consideration for a general

release of all claims.

Moreover, the legislative history of OWBPA contains

evidence that Congress considered—and rejected—a re-

quirement that extra consideration be paid for general

releases that included ADEA claims. Early in the legis-

lative term in which OWBPA was passed, the Senate and

House of Representatives considered two other bills regu-

lating ADEA waivers. Both of those bills required that:

the rights or claims are waived in exchange for con-

sideration in addition to anything of value

(i) to which the individual already is entitled;

or

(ii) that has been offered to a group or class of

individuals under an early retirement incentive

or other employment termination program. ]

S. 54, 101st Cong., Ist Sess., 135 Cong. Rec. 5168 (Daily

Ed. Jan. 25, 1989); H.R. 1432, 101st Cong., Ist Sess.,

135 Cong. Rec. H697 (Daily Ed. Mar. 15, 1989).

The second of those alternative tests would have re-

quired employers to provide extra consideration—above

what they offered generally in their severance program—

to employees waiving ADEA claims, which is essentially

16

what DiBiase demands here. Neither of those bills was

enacted.

Later in the session, Congress returned to the ADEA

waiver issue and drafted new provisions, “represent[ing]

a change from the approach” of the earlier bills. S. Rep.

No. 263, 10lst Cong., 2d Sess. 31 (1990). Among

the most significant departures from the earlier bills was

the absence of the requirement for consideration beyond

that offered in group severance programs. On the subject

of consideration, the new bill simply stated that waivers

must be made

only in exchange for consideration in addition to

anything of value to which the individual already

is entitled[.]

29 U.S.C.A. § 626(f)(10)(D). That language, not the

language of the earlier bills, was enacted and became

part of the ADEA. Thus, Congress chose to reject the

extra consideration requirement.

In sum, there is no provision in OWBPA prohibiting a

practice such as SKB’s, which offers all employees equally

the option of enhanced benefits in e::change for a general

release of all claims. In fact, the legislative history sug-

gests that Congress not only accepted or acquiesced in

such practices, but also deliberately refused to alter them

in the way DiBiase proposes. In rejecting DiBiase’s pro-

posal, the Court of Appeals acted consistently with Con-

gressional intent.

17

CONCLUSION

For the foregoing reasons, the petition for a writ of

certiorari should be denied.

September 18, 1995

Respectfully submitted,

STEVEN B. FEIRSON

(Counsel of Record)

JOSEPH PATRICK ARCHIE

DECHERT PRICE & RHOADS

4000 Bell Atlantic Tower

1717 Arch Street

Philadelphia, PA 19103-2793

(215) 994-4000

Counsel for Respondent