Appendix — Alfieri v. Conkright (No. 08-803)

la

APPENDIX A

PAUL J. FROMMERT, ALAN H. CLAIR, DONALD

S. FOOTE, THOMAS I. BARNES, RONALD J.

CAMPBELL, FRANK D. COMMESSO, WILLIAM F.

COONS, JAMES D. GAGNIER, BRIAN L. GAITA,

WILLIAM J. LADUE, GERALD A. LEONARDO JR.,

FRANK MAWDESLEY, HAROLD S. MITCHELL,

WALTER J. PETROFF, RICHARD C. SPRING,

PATRICIA M. JOHNSON, F. PATRICIA M. TOBIN,

NANCY A. REVELLA, ANATOLI G. PUSCHKIN,

WILLIAM R. PLUMMER, MICHAEL J. MCCOY,

LARRY J. GALLAGHER, NAPOLEON B. BARBOSA,

ALEXANDRA SPEARMAN HARRICK, JANIS A.

EDELMAN, PATRICIA H. JOHNSTON, KENNETH

P. PARNETT, JOYCE D. CATHCART, FLOYD

SWAIM, JULIE A. MCMILLIAN, DENNIS E-.

BAINES, RUBY JEAN MURPHY, MATTHEW D.

ALFIERI, KATHY FAY THOMPSON, MARY BETH

ALLEN, CRAIG R. SPENCER, LINDA S. BOURQUE,

THOMAS MICHAEL VASTA, FRANK C. DARLING,

CLARK C. DINGMAN, CAROL E. GANNON,

JOSEPH E. WRIGHT, DAVID M. ROHAN, DAVID B.

RUDDOCK, CHARLES HOBBS, CHARLES

ZABINSKI, CHARLES J. MADDALOZZO, JOYCE M.

PRUETT, WILLIAM A. CRAVEN, MAUREEN A.

LOUGHLIN JONES, KENNETH W. PIETROWSKI,

BONNIE COHEN, LAWRENCE R. HOLLAND, GAIL

A. NASMAN, STEVEN D. BARLEY, DONNA S.

LIPARI, ANDREW C. MATTELIANO, MICHAEL

HORROCKS, CANDICE J. WHITE, DENNIS E.

BAINS, KATHLEEN E. HUNTER, JOHN L.

CRISAFULLI, DEBORAH J. DAVIS, BRENDA H.

MCCONNELL, KATHLEEN A. BOWEN, ROBERT P.

CARANDDO, TERENCE J. KURTZ, WILLIAM J.

CHESLOCK, THOMAS E. DALTON, LYNN

BARNSDALE, BRUCE D. CRAIG, GARY P.

HARDIN, CLAUDETTE M. LONG, DALE

PLATTETER, MARY ANN SERGEANT, MOLLY

WHITE KEHOE, IRSHAD QUERSHI, DAVID K.

YOUNG, LESLIE ANN WUNSCH, EUGENE H.

2a

UPDYKE, MICHAEL R. BENSON, ALVIN M.

ADAMS, RONNIE KOLNIAK, JAMES J. FARRELL,

ROBERT L. BRACKHAHN, BENJAMIN C. ROTH,

RICHARD C. CARTER, CARMEN J. SOFIA,

KATHLEEN W. LEVEA, FREDERICK SCACCHITTI,

PAUL DEFINA, JAMES G. WALLS, GAIL J. LEVY,

JOHN A. WILLIAMS, CRYSTAL THORTON,

CHARLES R. DRANNBAUER, WILLIAM M.

BURRITT, and JANICE ROSS HEILER, Plaintiffs-

Appellees, -v.- SALLY L. CONKRIGHT, XEROX

CORPORATION PENSION PLAN

ADMINISTRATOR, PATRICIA M. NAZEMETZ,

XEROX CORPORATION PENSION PLAN

ADMINISTRATOR, LAWRENCE M. BECKER,

XEROX CORPORATION PLAN ADMINISTRATOR,

XEROX CORPORATION RETIREMENT INCOME

GUARANTEE PLAN, and XEROX CORPORATION,

A NEW YORK CORPORATION, Defendants-

Appellants, XEROX CORPORATION, Defendant.

Docket No. 07-0418-cv

UNITED STATES COURT OF

APPEALS FOR THE

SECOND CIRCUIT

535 F.3d 111; 2008 U.S. App.

LEXIS 15585, 44 Employee

Benefits Cas. (BNA) 1461

June 19, 2008, Argued

July 24, 2008, Decided

PRIOR HISTORY: [**1]

Appeal from a January 24, 2007 order of the United

States District Court for the Western District of New

York (David G. Larimer, Judge) complying with our

January 6, 2006 decision to remand the case to the

District Court in order to craft a remedy to calculate

Plaintiffs-Appellees' pension benefits in light of the

violations we identified of the Employee Retirement

3a

Income Security Act of 1974, 29 U.S.C. § 1001 et seq.

We conclude that the District Court crafted a remedy

consistent with our decision, applicable law, and the

terms of the pension plan at issue. However, we also

conclude that the District Court erred in refusing to

enforce the release forms signed by several Plaintiffs-

Appellees in this litigation.

Frommert v. Conkright, 472 F. Supp. 2d 452, 2007

U.S. Dist. LEXTS 5044 (W.D.N.Y., 2007)

DISPOSITION: Affirmed in part, vacated in part,

and remanded for further proceedings consistent with

this opinion.

COUNSEL: ROBERT H. JAFFE (Mark B. Watson,

Robert H. Jaffe & Associates, Springfieid, New Jersey;

George A. Schell, Schell & Schell, Fairport, New York:

John A. Strain, Rodondo Beach, California, on the

brief), Robert H. Jaffe & Associates, Springfield, New

Jersey, for Plaintiffs-Appellees.

BRENDAN S. MAHER, Stris & Maher LLP, Dallas,

Texas, for Plaintiffs-Appellees.

MARGARET A. CLEMENS, [**2] Nixon Peabody

LLP, Rochester, New York, for Defendants-Appellants.

Maria Ghazal, Business Roundtable, Washington,

D.C.; Jeffrey A. Lamken, Rachel M. McKenzie, Baker

Botts LLP, Washington, D.C.; Allyson N. Ho, Baker

Botts LLP, Dallas, Texas, for Amicus Curiae Business

Roundtable.

JUDGES: Before: STRAUB and RAGGI, Circuit

Judges, and SESSIONS, District Judge.’

“The Honorable William K. Sessions III, Chief

Judge of the United States District Court for the

District of Vermont, sitting by designation.

4a

OPINION BY: STRAUB

OPINION

(*115] STRAUB, Circuit Judge:

Plaintiffs-Appellees asserted claims under the

Employee Retirement Income Security Act of 1974

("ERISA"), 29 U.S.C. § 1001 et seq., against their

current or former employer, Xerox Corporation

("Xerox"),1 the pension plan administered for the

benefit of its employees, and various individuals

associated with the administration of that plan. On

remand from our first decision in this litigation, see

Frommert v. Conkright, 483 F.8d 254 (2d Cir. 2006),

the District Court crafted a remedy to address the

ERISA violations we had identified and concluded that

the release forms signed by several Plaintiffs-

Appellees did not bar their ERISA claims, see

Frommert v. Conkright, 472 F. Supp. 2d 452, 456-5

(W.D.N.Y. 2007). [**3] Defendants-Appellants

challenge both aspects of the District Court's decision.

For the reasons set forth below, we reject Defendants-

Appellants’ first challenge and agree with the second.

Accordingly, we vacate a portion of the District Court's

order and remand the case to the District Court for

proceedings consistent with this opinion. 1 Early in

this hitigation, the District Court dismissed Xerox as a

party, and Plaintiffs-Appellees did not challenge this

dismissal in their appeal. See Frommert v. Conkright,

433 F.3d 254, 256 n.2 (2d Cir. 2006).

FACTUAL AND PROCEDURAL BACKGROUND

We presume familiarity with the facts and

procedural history of this case as sct forth in our prior

decision, see Frommert, 433 F.3d at 257-62, and we

repeat them here only as relevant to the issues

presented in this appeal. In that decision, we

concluded that Defendants Appellants had

impermissibly amended the ERISA plan at issue

through their method of determining retirement

benefits for those beneficiaries who had previously left

Sa

the company only to be rehired later. /d. at 264-68.

When these beneficiaries left Xerox, they all received

lump-sum distributions of their then-accrued pension

benefits. Jd. at 257.

The [**4] pension benefits of those who were

subsequently rehired by Xerox were governed by a set

of ambiguous provisions in the pension plan

documents. The 1989 Xerox Retirement Income

Guarantee Plan ("RIGP" or “Plan") provided that, “{iJn

the event any part or all of a Member's accrued benefit

is distributed to him prior to his Normal Retirement

Date, .. . and such member at any time thereafter

recommences active participation in the Plan, the

accrued benefit of such Member based on all Years of

Participation shall be offset by the accrued benefit

attributable to such distribution." 1989 RIGP § 9.6.

The 1997 version of the Plan provided both that "[nlo

credit shall be given {to a participating employee] for

any period with respect to which a lump sum payment

has been made .. ." and that "Credit for Years of

Participation preceding [such a payout} will be

reinstated" in the event that such an employee returns

to Xerox." Frommert, 433 F.3d at 260. Thus, in

determining these employees' benefits, the plan

administrator was required to account, in a manner

unspecified to employees, for both an employee's total

years of service at Xerox and the fact that the final

benefits must be "offset by" [**5] an amount

"attributable" to a prior lump sum distribution.

The plan administrator resolved this difficulty by

utilizing a so-called "phantom account" offset

mechanism. The phrase "phantom account" refers to

the calculation of the current value of the employee's

prior, lump-sum distribution by adjusting that amount

for "hypothetical investment gains and/or losses

attributable to the prior distribution, as if the money

had been [*116] left in [the employee's] account[{]"

instead of being distributed to the employee upon first

leaving Xerox. /d. ¢° 259 (quoting 1995 "Benefits

Update"). In estimating the pension benefit to which

6a

that employee would be entitled upon his or her future

retirement (and thus second separation) from Xerox

employment, the plan administrator would both

account for the cmploycc's total years of service and

deduct an amount based on the prior, lump-sum

distribution, as augmented by the "phantom account"

offset method, See id, at 259°61

In our first decision, we concluded that the

"phantom account" offset mechaniam constituted a

"yetroactive cutback" of anticipated pension benelite

in Violation of 29 USC § 108d), and that

Defendanta'Appellanta had impermissibly amended

**6] the ERISA Plan to include that mechaniam in

violation oF 29 U.S.C. § 106d(h) See id. at 266-68, We

remanded to the Distret Court to fashion a remedy for

these violations, See id. at 268 Specifically, we

instructed the District Court as follows:

On remand, the remedy crafted by the

district court for those employees rehired

prior to 1998 should utilize an appropriate

pre-amendment calculation to determine

their benefits. We recognize the difficulty

that this task poses because of the

ambiguous manner in which the pre:

amendment terms of the Plan described

how prior distributions were to be treated,

As guidance for the distriet court, we

suggest that it may wish to employ

equitable principles when determining the

appropriate calculation and fashioning the

wpPpropriate remedy

/d. In addition, we recognized that the Diatrict Court

could apply the "phantom account" olfset mechanism

to employees hired after the 1998 amendment to the

Plan because those individuals were on notice as to the

mechanism's existence, /d, at 2648°69, But see Miller v.

Nerox Corp, Retirement Income Guarantee Plan, 464

F.3d 871 (9th Crr, 2006) holding that Plan's "phantom

7a

account" methodology itself violates ERISA), |[**7]|

cert. denied, 127 S. Ct. 1829, 167 L. Ed. 2d 821 (2007)

Acknowledging our guidance to empioy "equitable

principles" and reviewing the language of the Plan

materials, the District Court concluded that the

appropriate remedy for employees hired before the

1998 amendment was to direct the plan administrator

to pay each of these individuals "a lump sum in the

amount of the difference between the amount of

henefita that lan employee] haa received, and the

amount of the recalculated benefit, without any

consideration of a ‘phantom account.” /rommert, 474

hi Supp, #d at 458 Untornal quotation marke omitted)

The Dieatriet Court also stated that "it would not be

unreasonable for the administrator to subtract out the

amount of the prior distribution" in order to prevent

such employees from receiving windfalls. /d

(alterations and internal quotation marks omitted)

[In addition, the District Court concluded that [**8]

the release forms signed by several Plaintiffs

Appellees in exchange for their receiving severance

pay from Xerox did not release Defendants-Appellants

from the ERISA-based claims asserted in this

litigation. See id. at 460-65. Other matters addressed

by the District Court on remand are not relevant to

this appeal, which timely followed

[*117]| DISCUSSION

On appeal, DetendantasAppellanta rais

challenges to the Distret Court's decision

''The Diatret Court presumed that the parties

would be able to agree on which employees had full

notice of the "phantom account offset" mechanism

because they were rehired after the 1998 Summary

Plan Description ("SPD") had been issued, See

Frommert v. Conkright, 472 F. Supp, 2d 452, 459

(W.D.N.Y. 2007).

Su

Defendants-Appellants argue that the District Court

fashioned an improper remedy for the ERISA violation

associated with the implementation of the "phantom

account offset" mechanism. Second, Defendants:

Appellants argue that the District Court erroneously

decided that the release forms signed by certain

Plaintiffs-Appellees did not bar their ERISA-based

claims. For the reasons that follow, we agree with

Defendants’Appellants that the release forma at issue

bur the signatories’ ERISA claims, but we will not

chaturb the Diatrict Court's chosen remedy

l Named

On appeal, Defendants Appellants challenge the

Distriet Court's remedy for the ERISA violations we

identified in our prior decision, Ae, the impermissible

amendment of the ERISA plan at issue [**9] to

calculate Plaintiffs-Appellees' pension — benefits

according to a "phantom account" offset method. As

discussed above, we instructed the District Court as

follows:

On remand, the remedy crafted by the

district court for those employees rehired

prior to 1998 should utilize an appropriate

pre-amendment calculation to determine

their benefits. We recognize the difficulty

that this task poses because of the

ambiguous manner in which the pre

amendment terms of the Plan deserbed

how prior distributions were to be treated

Asa pwuidance for the cdistriet court, we

suggest that it may wieh to employ

equitable principles when determining the

appropriate calculation and tashioning the

appropriate remedy

hrommert, 433 I Sd at POS We review a district

court's chosen remedy of an identificd ERISA vyiolation

9a

for an excess of allowable discretion. See Chao v.

Merino, 452 F.8d 174, 185 (2d Cir. 2006).

Here, the Plan accounts for a retiring employee's

total years of working at Xerox, but it also provides

that an employee's benefits must "be offset by the

accrued benefit attributable to la prior distribution]."

RIGP § 9.6, Plaintiffs-Appellees all received earlier,

lump-sum distributions of their pension {**10]

benefits when they first left their employment at

Xerox, and the basic question presented to the District

Court waa how to ensure that these individuals

received their due benefita in heht of the ambiguous

non'dupheation of benelita provision, See “rommert,

72k Supp, #d at 467-68 \conatruing and applying §

.6 of 1989 Plan), On remand, the Distret Court

decided that the appropriate remedy was to order the

plan administrator to recalculate the relevant

Plaintiffs-Appellees' benefits to deduct only the

nominal value of their prior, lump-sum distributions,

Le, Without a "phantom account" adjustment

reflecting hypothetical investment gains or,

apparently, any other adjustment to reflect the

inflation-adjusted values of the prior distributions. See

id. at 458-59.

Defendants-Appellants fail to establish that the

District Court's approach violated either the Plan

terms or any law. Although Defendants-Appellants

contend that the District Court failed to utilize pre

L998 Plan terms, the District Court explicitly did so

but simply apphed those terms to Plaintiffs-Appellees

differently than Defendantsa:-Appellants proposed, In

advocating their proposed "new hire" approach insteud

of the [**11] remedy crafted by the Diatriet Court,

DefendantasAppellanta argue that § 1.440) of the 1989

Plan requires that a rehired employee who then retires

ia entitled only to a pension benefit that accounta for

his or her years of service [*118] since being rehired:

the prior years of service are relevant only for the

purpose of "vesting," However, in advocating this “new

hire" method, Defendants"Appellants ignore the terms

10a

of the 1989 Plan, which is silent as to prior lump-sum

distributions pursuant to § 8.2. To the extent that the

1997 Plan applies to certain Plaintiffs-Appellees,

Defendants-Appellants ignore the language of § 1.45(f).

See Frommert, 488 F.8d at 258-60 (discussing such

provisions in the various versions of the Plan).

Defendants-Appellants have failed to demonstrate that

the District Court exceeded its allowable discretion in

crafting its chosen remedy instead of , adopting

Defendants-Appellants' proposed approach.”

Alternatively, Defendants-Appellants contend that

the District Court erred by failing to adopt the remedy

proposed by the plan administrator or, at least, by

failing to remand to the administrator the task of

fashioning a remedy. Regarding the failure of the

District Court to remand to the plan administrator, it

does not appear from the record that Defendants-

Appellants actually requested such relief from the

District Court. As such, they have waived the issue for

appeal. See Allianz Ins. Co. v. Lerner, 416 F.3d 109,

114 (2d Cir. 20085) ("It is a well-established general

rule that an appellate court will not consider an issue

* Defendants-Appellants also argue that the

District Court's remedy confers a "windfall" on

Plaintiffs-Appellees in violation of equitable

principles. See, e.g., Prudential Ins. Co. v. S. S.

American Lancer, 870 F.2d 867, 871 (2d Cir. 1989)

("[E]quity, we believe, abhors [**12] a windfall.").

However, in contrast to Prudential Insurance, we do

not view the remedy crafted by the District Court to

be "wholly unjust" here because Defendants-

Appellants wrote the terms of the ERISA Plan in an

ambiguous and occasionally self-contradictory

fashion. “ Lifson v. INA Life Ins. Co. of N.Y., 333

F.3d 349, 3853 (2d Cir. 2093) (per curiam) (noting

that, in oe rpreting an ERISA plan, a court

"construc|s] ambiguities against the drafter and in

favor of the beneficiary").

lla

raised for the first time on appeal." (alterations and

internal quotation marks [**13] omitted)).

Even if Defendants-Appellants had not waived the

remand issue, we would review the District Court's

decision to fashion a remedy itself instead of

remanding to the plan administrator for an excess of

allowable discretion. See Zervos v. Verizon N. Y., Inc.,

277 F.3d 635, 648 (2d Cir. 2002); Kinek v. Paramount

Comme'ns, Inc., 22 F.8d 508, 508 (2d Cir. 1994). The

District Court here did not exceed its allowable

discretion in this regard. Althcugh we did not prohibit

the District Court from remanding the case to the plan

administrator, the language in our prior opinion

presumed that the District Court would craft the

remedy itself. See Frommert, 433 F.3d at 268.

Moreover, Defendants-Appellants had ample

opportunity to explain fully the approach proposed by

the plan administrator before the District Court, and

did so, in their briefs and at oral argument, in a sworn

affidavit from the plan administrator, and in a written

report and accompanying testimony from an

independent actuary who analyzed the plan

administrater's approach. Indeed, Defendants-

Appellants identify nothing that might have been

gained by the District Court's remanding the matter to

the plan administrator. See Krauss v. Oxford Health

Plans, Inc., 517 F.3d 614, 630 (2d Cir. 2008) [**14]

(stating that plaintiffs were not entitled to

administrative remand where doing so would have

been "futile"); Miller v. United Welfare Func, 72 F.3d

1066, 1071 (2d Cir. 1995) ‘stating that remand to a

plan administrator is not required where such

additional proceedings would be a “useless formality”

(internal quotation marks omitted)). In addition, we

suggested, as "guidance for [*119] the district court,"

that it "may wish to employ equitable principles." See

Frommert, 433 F.3d at 268. Defendants-Appcllants

identify no equitable principles that a district court

might be employing, immediately upon remand from

a circuit court, ir merely performing the ministerial

12:

function of then remanding a case to an ERISA plan

administrator.

Defendants-Appellants rely on Miller v. United

Welfare Fund to argue that remand is appropriate

when "reasonable minds could differ as to the outcome

of the case." However, we directed the district court in

Miller to remand the case to the plan administrator to

permit the plan administrator to gather additional

evidence relevant to the nursing care sought by the

claimant. See id. Here, we did not anticipate any

comparable, extensive fact finding, and none occurred

on {**15] remand before the District Court. Indeed,

the only "evidence" considered by the District Court

consisted of expert testimony regarding which of

various proposed remedies was the most fair and

equitable. Given the apparent lack of any benefit to

remanding the case to the plan administrator and the

language in our prior decision implying that the

District Court should fashion its own remedy, see id. at

268-69, we cannot conclude that the District Court

exceeded its allowable discretion in actually doing so.

In the alternative, Defendants-Appellants argue

chat the D *trict Court erred in failing to adopt the

plan administrator's proposed approach, or at least

consider it under a deferential standard of review. We

have held that where the ERISA plan confers upon the

plan administrator discretionary authority — to

"construe the terms of the plan," the district court

should review a decision by the plan administrator

under an excess of allowable discretion standard. See

Nichols v. Prudential Ins. Co. of Am., 406 F.3d 98, 108

(2d Cir. 2005) (citing Firestone Tire & Rubber Co. v.

Bruch, 489 U.S. 101, 115, 109 S. Ct. 948, 103 L. Ed. 2d

80 (1989). However, the District Court here had no

decision to review because the plan administrator

[**16] never rendered any decision other than the

original benefit determinations, all of which were

premised on the now impermissible "phantom account"

offset mechanism. See 7d. ("[WJe may give deferential

review only to actual exercises of discretion.").

13a

Defendants-Appellants have identified no authority in

support of the proposition that a district court must

afford deference to the mere opinion of the plan

administrator in a case, such as this, where the

administrator had previously construed the same

terms and we found such a construction to have

violated ERISA.

To the extent that Defendants-Appellants argue

that the District Court erred by instructing the plan

administrator to calculate benefits by deducting the

nominal value of prior distributions denominated in

1980s dollars from accrued benefits denominated in

current dollars, see Appe//ants’ Br. at 38-41, we reject

their argument for reasons s_milar to those applicable

to their arguments on behalf of their own preferred

"new hire" remedy. The District Court had discretion

to design a remedy to provide Plaintiffs-Appellees with

the proper level of pension benefits in light of the

ERISA violations we identified in our prior decision.

[**17] As Defendants-Appellants wrote a pension plan

that addresses the situation of a discharged-and-then-

rehired employee with what can only be described as

ambiguity, contradiction or silence, we see no problem

with the District Court's selection of one reasonable

approach among several reasonable alternatives. Cf

Litson v. INA Life Ins. Co. of N. Y., 3383 F.3d 349, 353

(2d Cir. 2003) (per curiam) (instructing thet a court

should [*120] construes ambiguities in plan terms

against the drafter of the ERISA plan).

IT. Releases of Certain Plaintiffs' ERISA Claims

The final issue raised in this appeal is Defendants-

Appellants’ argument that the District Court erred in

ruling that the release forms signed by several

Plaintiffs-Appellees did not apply to the ERISA claims

asserted in this litigation.” The releases at issue

* The District Court stated that [**18]

twenty-two of the named Plaintiffs signed release

4a

provided that the signing employee "release[s] Xerox

from any and all claims... . based on anything that has

occurred prior to the date [he or she] sign[s] this

Release" in exchange for up to fifty-two weeks of salary

continuance. In addition, the form specifies several

potential federal claims, including those based in

ERISA, that the release covers.

As a threshold matter, Plaintiffs-Appellees argue,

for the first time in this appeal, that Defendants-

Appellants may not rely upon the release forms signed

by several Plaintiffs-Appellees because Medera/ Rule of

Civil Procedure 17(\4) requires that an action in federal

court "be prosecuted in the name of the real party in

interest." Although Defendants-Appellants are the

pension plan at issue in this litigation and its

administrators, Plaintiffs-Appellees argue that only

Xerox Corporation has a "sufficient stake in reversing

the trial court's ruling that the Xerox general release

[**19] form constitutes a waiver of ERISA claims by

the releasee." Appellees' Br. at 39. As noted above, the

District Court dismissed Xerox early in this litigation,

and Plaintiffs-Appellees did not appeal this ruling. See

Frommert, 433 F.3d at 256 n.2. Moreover, Plaintiffs-

Appellees did not challenge the authority of

Defendants-Appellants to rely upon the releases below

and thus have waived this argument for purposes of

this appeal. See J2ogers v. Samedan Oil Corr., 308 F.3d

forms, but that four of these amended their forms to

carve out explicitly their claims as members of the

"Frommert lawsuit" from the universe of claims to be

covered by the release. See Frommert, 472 F. Supp.

2d at 460. On appeal, Defendants-Appellants do not

challenge the District Court's conclusion that these

individuals’ release forms did not cover their ERISA

claims in this action. As a result, we will not disturb

the District Court's conclusion that the release forms

do not bar the ERISA claims asserted by these four

Plaintiffs-Appellees in this litigation.

15a

477, 482-84 (Sth Cir. 2002) (affirming district court's

ruling that third-party defendant had waived real-

party-in-interest defense by failing to assert it until

the day before trial); Richardson v. Edwards, 326 U.S.

App. D.C. 429, 127 F.8d 97, 99 (D.C. Cir. 1997)

(deeming real-party-in-interest defense waived when

not raised until appellate proceedings).

Even if Plaintiffs-Appellees had not waived this

argument, their real-party-in-interest argument is

meritless because the release form itself defines its

reference to "Xerox" to include "the Xerox employee

benefit plans" in which the employee had participated

or was then participating. See Frommert, 472 F. Supp.

2d at 460 n.2 (quoting release forms). Moreover,

Defendants-Appellants are not [**20] the partics

prosecuting this action; that role belongs to Plaintiffs-

Appellees. See 6A Charles Alan Wright, Arthur R.

Miller & Mary Kay Kane, Federal Practice &

Procedure § 1542 (2d ed. 1990) ("[T]he real party i

interest principle . . . directs attention to whether [the]

plaintiff has a significant interest in the particular

action he has instituted, and Ru/e 17(a) is limited to

plaintiffs."). Cf Stichting Ter Behartiging Van de

Belangen Van Oudaandeelhouders In Het Kapitaal

Van Sayboit Int] B. V. v. Schreiber, 407 F.3d 34, 49

2d Cir. 2005) (holding that a Rule 17(a) defect may

not [*121] be cured by the joinder, as nominal

defendants, of the real parties in interest to the action

where those parties have evinced no intention of

prosecuting the action). Thus, Plaintiffs-Appellees'

real-party-in-interest argument fails.

As to the merits of Defendants-Appellants'

arguments regarding the releases, "an individual can

waive his or her right to participate in a pension plan

governed by ERISA only if his or her waiver ‘is made

knowingly and voluntarily." Finz v. Schlesinger, 957

F.2d 78, 82 (2d Cir. 1992) (quoting Laniok v. Advisory

Comm. of Brainerd Mfg. Co. Pension Plan, 935 F.2d

1360, 1365 (2d Cir. 1991). {**21] We have articulated

several factors as relevant to the determination of

l6a

whether such a waiver is knowing and voluntary:

1) the plaintiffs education and business

experience, 2) the amount of time the

plaintiff had possession of or access to the

agreement before signing it, 3) the role of

plaintiff in deciding the terms of the

agreement, 4) the clarity of the agreement,

5) whether the plaintiff was represented by

or consulted with an attorney, [as well as

whether an employer encouraged the

employee to consult an attorney and

whether the employee had a fair

opportunity to do so} and 6) whether the

consideration given in exchange for the

waiver exceeds employee benefits to which

the employee was already entitled by

contract or law.

[Tlhis list of factors [is] not

exhaustive....

Id. (internal citation omitted). A court should consider

the "totality of the circumstances" in determining

whether a waiver of ERISA rights is knowing and

voluntary. /d.

Despite acknowledging the explicit and broad

language in the release form, the District Court

concluded that the instant ERISA claims were not

covered due to perceived deficiencies related to "the

clarity of the release and the consideration [**22]

given by Xerox in exchange for the releases."

Frommert, 472 F. Supp. 2d at 461-62. Specifically, the

District Court focused on one paragraph in which the

signing employee agrees that "the consideration set

forth in this Release is in addition to anything of value

to which | am entitled by law or Xerox policy." The

District Court concluded that this language meant

that the employee was not waiving his or her ERISA

claim:

17a

The import of paragraph 5 is that the

salary continuance given to the employee

did not take the place of, but was in

addition to, any benefits to which the

employee was a/ready entitled by law or

Xerox policy. This suggests that the

employee was not waiving his right to such

benefits. If he were, it would make little

sense to describe his salary continuance as

being "in addition to" such benefits.

Furthermore, while it might be argued

that there is a distinction between a right

to pension benefits in general and a "claim"

seeking to have those benefits calculated

according to a particular formula, that is a

distinction without a difference here,

because the Second Circuit has now held

that, at least with respect to employees

rehired before 1998, Xerox's "reduction

\**23] of justified expectations of benefits

[by using the phantom account] took the

form of a retroactive cut-back in violation

of" ERISA. In other words, those employees

were "entitled by law" not simply to receive

some pension benefits, but to have their

benefits calculated without any reduction

attributable to a "phantom" account.

Id. at 462 (footnote omitted; emphasis in original).

[*122]

In reaching this conclusion, the District

Court appears to have conflated the existence of

consideration adequate to render a release enforceable

18a

with the scope of claims thereby released.* The

paragraph on which the District Court focused

provided only that the consideration for the release,

ie, the salary continuance, did not replace any

benefits, including pension benefits, to which the

employee was already entitled. However, there 1s no

allegation that Defendants-Appellants violated this

term of the contract by denying these Plaintiffs-

Appellees any and all pension benefits to which they

would have been entitled. To the contrary, counsel for

Defendants-Appellants represented to this Court at

oral argument that several of these Plaintiffs-

Appellees had already received pension benefits, albeit

calculated [**24] under the "phantom account" offset

* The District Court also appears to have

concluded that the releases failed to comply with a

provision of the Older Workers Benefit Protection

Act ("OWBPA"), 29 U.S.C. § 626), and that such

noncompliance has relevance to the determination of

whether these Plaintiffs-Appellees released Xerox

from ERISA-based claims. See Frommert, 472 F

Supp. 2d at 463 n.d. Section 626(f specifies several

facts that must exist in order to render waiver of

claims asserted under the Age Discrimination in

Employment Act ("ADEA"), 29 U S.C. § 621 et seq.,

both "knowing and voluntary." We need not and do

not decide whether the release forms comphed with

the requirements of the OWBPA because such

noncompliance, even if proven, is irrelevant to the

question of whether a release of non-ADEA claims

was "knowing and voluntary." See Chaplin v.

NationsCredit Corp., 307 F.3d 368, 375 (5th Cir.

2002) "(T]he OWBPA ... applies only to ADEA

claims."); see also Tung v. Texaco Inc., 150 F.3d 206,

208-09 (2d Cir. 1998) (per curiam) (concluding that

plaintiff's waiver of his Titie VII claims was knowing

and voluntary despite the employer's noncompliance

with § 626(f) requirements [**25] applicabic to his

ADEA claims).

19a

method.

At bottom, neither the uncertainty of such benefits

at the time of release nor the fact that hindsight has

revealed that such benefits are now worth more than

the signing Plaintiffs-Appellees hkely expected at that

time can render these rcleases unenforceable. As the

method used to calculate pension benefits for rehired

employees was, and has continued to be, disputed

throughout this litigation, the precise amount of

benefits that an employee signing a release would

have received in the absence of such a release was

always indeterminate. Plaintiffs-Appellees who signed

these releases did so before the District Court crafted

its remedy for the ERISA violations we identified. The

mere fact that the anticipated recovery associated with

ongoing litigation is uncertain does not render an

employee's release of claims asserted in that litigation

unenforceable. Cf Anita Founds., Inc. v. ILGWU Nat]

Ret. Fund, 902 F.2d 185, 189 (2d Cir. 1990) ("\A]

settlement payment, made when the law was

uncertain, cannot be successfully attacked on the basis

of any subsequent resolution of the uncertainty.").

Applying the factors we have articulated as

relevant to the issue [**26] of whether a waiver of

ERISA rights was knowing and voluntary and

reviewing the undisputed facts pertaining to these

releases under the totality of the circumstances, see

Finz, 957 F.2d at 82, we conclude that the District

Court erred in holding that the releases at issue were

unenforceable. There appears to be no dispute that

those Plaintiffs-Appellees who signed these releases

had ample time (45 days) to decide whether to sign the

release, that Xerox encouraged such individuals to

consult an attorney, and that the signatories received

salary continuances in consideration of their releasing

claims. Some Plaintiffs-Appellees even modified the

terms of the release forms with which they had been

[*123] presented before signing them. As to the

language of the releases themselves, we cannot

20a

conclude, as the District Court did, that the express

terms of these releases were "at the very least

ambiguous as to what the employee was giving up 1n

exchange for salary continuance.” Frommert, 472 F.

Supp. 2d at 462. As the District Court's interpretation

of the release forms is incorrect, it cannot stand.

Unless the release form at issue specifically exempted

this litigation as noted above, the releases [**27]

signed by certain Plaintiffs-Appellees are enforceable.

CONCLUSION

For the foregoing reasons, we VACATE that portion

of the order of the District Court holding that eighteen

release forms are unenforceable, AF FIRM that portion

of the order crafting a remedy for the identified ERISA

violations, and REMAND the case for proceedings not

inconsistent with this opinion.

Zila

APPENDIX B

PAUL J. FROMMERT, et al., Plaintiffs, v. SALLY L.

CONKRIGHT, PATRICIA M. NAZEMETZ AND

LAWRENCE M. BECKER, XEROX CORPORATION

RETIREMENT INCOME GUARANTEE PLAN

ADMINISTRATORS AND XEROX CORPORATION

RETIREMENT INCOME GUARANTEE PLAN,

Defendants.

00-CV-6311L

UNITED STATES DISTRICT

COURT FOR THE WESTERN

DISTRICT OF NEW YORK

472 F. Supp. 2d 452, 2007 U.S.

Dist. LEXTS 5044 39

Employee Benefits Cas. (BNA)

2529

January 24, 2007, Decided

January 24, 2007, Filed

SUBSEQUENT HISTORY: Stay granted by, Motion

denied by Frommert v. Conkright, 2007 U.S. Dist.

LEXIS 15370 (W.D.N.Y., Mar. 6, 2007)

Affirmed in part and vacated in part by, Remanded by

Frommert v. Conkright, 2008 U.S. App. LEXTS 15585

2d Cir. N.Y., July 24, 2008)

PRIOR HISTORY: Frommert v. Conkright, 433 F.3d

254, 2006 U.S. App. LEXTS 250 (2d Cir. N. Y., 2006)

COUNSEL: [**1] For Paul J. Frommert, Donald S.

Foote, Thomas I. Barnes, Ronald J. Campbell, Frank

D. Commesso, William F. Coons, James D. Gagnier,

Brian L. Gaita, William J. Ladue, Gerald A. Leonardo,

Jr., Frank Mawdesley, Harold S. Mitchell, Walter J.

de

Papa

Petroff, Richard C. Spring, Patricia M. Johnson, F.

Patricia M. Tobin, Nancy A. Revella, Anatol G.

Puschkin, William R. Plummer, Michael J. McCoy,

Alan H. Clair, Larry J. Gallagher, Napoleon B.

Barbosa, Alexandra Spearman Harrick, Janis A.

Edelman, Patricia H. Johnston, Kenneth P. Parnett,

Joyce D. Cathcart, Floyd Swaim, Julie A. McMilhan,

Dennis E. Baines, Ruby Jean Murphy, Matthew D.

Alfieri, Thomas F. McGee, Vincent G. Johnson, F. Colt

Hitchcock, Ronnie Tabak, Martha Lee Taylor, Kathy

Fay ‘thompson, Mary Beth Allen, Craig R. Spencer,

Linda S. Bourque, Thomas Michael Vasta, Frank C.

Darling, Clark C. Dingman, Carol E. Gannon, Joseph

E. Wright, David M. Rohan, David B. Ruddock,

Charles Hobbs, Charles Zabinski, Charles J.

Maddalozzo, Joyce M. Pruett, William A. Craven,

Maureen A. Loughlin Jones, Kenneth W. Pietrowski,

Bonnie Cohen, Lawrence R. Holland, Gail A. Nasman,

Steven D. Barley, Donna S. Lipari, Andrew C.

Matteliano, Michael Horrocks, Candice {**2] J. White,

Dennis E. Bains, Kathleen E. Hunter, John L.

Crisafulli, Deborah J. Davis, Brenda H. McConnell,

Kathleen A. Bowen, Robert P. Caranddo, Terence J.

Kurtz, William J. Cheslock, Thomas E. Dalton, Lynn

Barnsdale, Bruce D. Craig, Gary P. Hardin, Claudette

M. Long, Dale Platteter, Mary Ann Sergeant, Molly

White Kehoe, Irshad Quershi, David K. Young, Leslie

Ann Wunsch, Richard J. Glikin, Eugene H. Updyke,

Michael R. Benson, Alvin M. Adams, Ronnie Kolniak,

James J. Farrell, Robert L. Brackhahn, Benjamin C.

Roth, Richard C. Carter, Carmen J. Sofia, Kathleen W.

Levea, Frederick Scacchitti, Paul Defina, James G.

Walls, Plaintiffs: George A. Schell, Jr., LEAD

ATTORNEY, Schell & Schell, Fairport, NY; Robert H.

Jaffe, LEAD ATTORNEY, Jaffe & Schlesinger, P.A.,

Springfield, Nel.

For Gail J. Levy, John A. Williams,., Crystal Thornton,

Charles R. Drannbauer, William M. Burritt, Janice

Ross Heiler, Consol Plaintiffs: Robert H. Jaffe, LEAD

ATTORNEY, Jaffe & Schlesinger, P.A., Springfield,

23a

Nd.

For Sally L. Conkright, Xerox Corporation Pension

Plan Administrator, Patricia M. Nazemetz, Xerox

Corporation Pension Plan Administrator, Xerox

Corporation, Lawrence Becker, Xerox Corporation

Plan [**3] Administrators, Xerox Corporation

Retirement Income Guarantee Plan, Defendants:

Margaret A. Clemens, LEAD ATTORNEY, Nixon

Peabody LLP, Rochester, NY.

For Xerox Corporation Retirement Income Guarantee

Plan, Xerox Corporation, a New York Corporation,

Consol Defendants: Margaret A. Clemens, LEAD

ATTORNEY, Nixon Peabody LLP, Rochester, NY.

JUDGES: DAVID G. LARIMER, United States

District Judge.

OPINION BY: DAVID G. LARIMER

OPINION

[*455] DECISION AND ORDER

INTRODUCTION

This decision constitutes the latest chapter in a

long-running dispute hetween employees of Xerox

Corporation and administrators of Xerox's retirement

plan, the Xerox Corporation Retirement Income

Guarantee Plan ("the Plan"), concerning calculation of

retirement benefits. The dispute involves a relatively

small group of employees who previously left

employment at Xerox, received a lump-sum

distribution upon their initial departure, and then

were rehired by Xerox years later. Those employees

are now contemplating retirement, or have retired,

and the issue in dispute is how their present

retirement benefits should be calculated.

With respect to this group of rehired employees, the

24a

Plan is designed so that an employee's total [**4]

years of employment at Xerox, regardless of whether

there was a break in service, are counted in calculating

the employee's retirement benefits. Generally, the

relevant pension calculations are based on the

employee's total years of employment times a

percentage of the employee's five highest-paying

calendar years with Xerox. Both sides in this litigation

agree that to avoid duplication of benefits, some sort of

offset against current benefits is necessary to reflect

the employee's receipt of monies at the time of the

prior separation from employment. Just how that

offset against current benefits should be calculated,

though, has been a matter of much dispute and has

engendered a great deal of litigation.

Familiarity with this Court's several prior decisions

involving these parties, see 328 F.\Supp.2d 420

(W.D.N.Y. 2004), 206 F.Supp.2d 435 (W._D.N. Y. 2002),

and also the Second Circuit's decision of arene’ 6,

2006, 433 F.3d 254 ("Second Circuit decision") is

presumed. These decisions set out in great detail the

relevant facts and disputed issues between the parties.

There is, therefore, no need to restate those matters

here.

The Second Circuit [**5] decision, which was on an

appeal from two of this Court's prior decisions

dismissing some of plaintiff's claims and granting

summary judgment in favor of defendants on the

remaining claims, resolved many of the issues raised

between the parties. The Second Circuit affirmed in

part, reversed in part, and remanded the case to this

Court for further proceedings.

\*456] The Second Circuit held that the Plan's use

of a so-called phantom account in determining present

benefits violated the Employee Retirement Income

Security Act ("ERISA"), 29 U.S.C. § 1101 et segq., in

several respects. First, the Plan's formula constituted

a "retroactive cut back" of benefits, 433 F.3d at 268,

contrary to § 204(g) of ERISA. In addition, the court

Sa

_~

found that employees were not given proper notice in

the Summary Plan Description ("SPD") of the nature

and scope of the phantom account, at least prior to

1998, when the SPD was amended to include the

phantom account and describe the offset procedure. /d.

at 263, 269.

The Second Circuit determined that employees

rehired after 1998 had sufficient notice as to the

manner by which Xerox intended to treat their [**5}

previous distribution. For those rehired prior 1998,

though, the Second Circuit remanded to this Court and

directed me to “utilize an appropriate pre-amendment

[1998] calculation," jd. at 268, without using the

"phantom account," to determine current benefits.

Specifically, the Second Circuit directed as follows:

On remand, the remedy crafted by the

district court for those employees rehired

prior to 1998 should utilize an appropriate

pre-amendment calculation to determine

their benefits. We recognize the difficulty

that this task poses because of the

ambiguous manner in which the pre

amendment terms of the Plan described

how prior distributions were to be treated.

As guidance for the Court, we suggest that

it may wish to employ equitable principles

when determining the appropriate

calculation in fashioning the appropriate

remedy.

Id.

Subsequent to the Second Circuit's decision, the

Court met with counsel to determine how best to

proceed. The parties agreed to work together to see if

they could resolve the issues remaining on remand

Although the parties appear to have spent some time

attempting to reach a settlement, it is now apparent

26a

that [**7] they are unable, or unwilling, to settle.

‘he Court conducted a two-day hearing on the

remelial issues raised by the Second Circuit and has

received both pre-hearing and_ post-hearing

memoranda from both sides. The paxties have also

discussed several cases from other jurisdictions

dealing with similar issues. Having considered both

sides’ submissions and arguments, the Court now

issues this Decision and Order concerning the issues

before it on remand.

DISCUSSION

I. The Appropriate Calculation of Plaintiffs' Benefits

This Court's task on remand is made easier in

many respects by the breadth of the Second Circuit

decision. The Circuit resolved many issues and has

clearly established the law of the case in many

respects. For example, it can no longer be disputed

that employees were not give proper notice in either

the Plan or the relevant SPD as to the nature of the

phantom account and its operation. Utilization of this

phantom account or anything similar to it has been

soundly rejected by the Court of Appeals in this case as

well as a previous case involving the same Plan,

Layaou v. Xerox Corporation, 238 F.3d 205 Cd Cir

2001). Other courts have [**g] reached the same

conclusion. Miller v. Xerox Corp. Ret. Income

Guarantee Plan, 464 F.3d 871 (9th Cir. 2006), Berger

Xerox Corp. Ret. Income Guarantee Plan, 338 F.3d

755 (7th Cir. 2003/. \t is clear, then, that Xerox may

not lawfully use the phantom account mechanism, as

to either [*457] the named plaintiffs in shis lawsuit,

or anyone else who was rehired by Xerox prior to 1998,

after having previously received a distribution of

pension benefits. The Second Circuit has addresse a

this issue more than once, and Xerox may not continue

to utilize this rejected formula.

The Second Circuit also rejected Xerox's contention

2/a

that a procedure utilizing a phantom account has

always heen a part of the Plan, even prior to 1998. 433

F.3d at 256. The Circuit determined that Xerox's use

of the phantom account constituted a retroactive

diminution of benefits, contrary to the law. Jd. at 268.

Furthermore, the Court of Appeals rejected Xerox's

contention that it had properly amended the Plan and

notified the Plan's participants concerning utilization

of the phantom account, prior to 1998. /d. at 263.

Although the Circuit clearly [**9] precluded use of

the phantom account in determining how to treat prior

distributions, it did little to elucidate what formula

siiould be adopted, except to suggest using an

"appropriate pre-amendment calculation" guided by

equitable principles in determining the appropriate

remedy for affected employees. /d. at 268.

The problem is that if one removes the phantom

account mechanism, there is little else remaining. The

Circuit expressly recognized this by noting the

"difficulty" confronting the district court "because of

the ambiguous manner in which the pre-amendment

terms of the Plan described how prior distributions

were to be treated." /d. at 268.

Describing the procedures to be utilized prior to the

1998 amendments as "ambiguous" is generous. In fact,

virtually nothing is set forth in either the Plan or the

SPD as to the precise mechanism for taking into

account a prior distribution in calculating an

employee's present benefits after a rehire.

Some testimony at the hearing before me focused

on the appropriate economic, financial and actuarial

methods for treating prior distributions. But this Court

is not charged with writing a sound retirement [**10]

plan. Rather, I must interpret the Plan as written and

consider what a reasonable employee would have

understood to be the case concerning the effect of prior

distributions. If the employee had no notice of the

"phantom account," he also had no notice of some of

the other mechanisms suggested by witnesses at the

28a

remand hearing before me. What is "best" from a

financial or actuarial point of view is not what the

Court has been charged with determining. The Court's

task, as directed by the Court of Appeals, is simply to

determine, based on the language of the Plan and the

SPD, what benefits are now due this group of rehired

employees.

To the extent that there is some ambiguity as to the

precise manner by which prior distributions are to be

offset from present benefits, it is Xerox, not the

employees, who should suffer. See Burke v. Kodak Ret.

Income Plan, 336 F.3d 108, 118 (2d Cir. 2003) ("The

consequences of an inaccurate SPD must be placed on

the employer"). It was defendants’ obligation to

provide a clear description, in the SPD and in the Plan

itself, as to how those prior distributions would be

treated. ‘l'o the extent that the Plan was constituted,

at Xerox's doing, [**11] to consider all prior years of

service, defendants had the burden of elucidating

precisely how that would be accomplished.

As noted by the Court of Appeals in this case, 433

F.3d at 258, the Plan does have a provision, § 9.6,

dealing with "nonduplication of benefits." That section

provides as follows:

Nonduplication of Benefits. In the event

any part of or all of a Member's’ [*458]

accrued benefit is distributed to him prior

to his Normal Retirement Date, if Section

8.8 [dealing with incompetent beneficiaries]

does not apply to such distribution and

such Member at any time thereafter

recommences active participation in the

Plan, the accrued benefit of such Member

based on all Years of Participation shall be

offset by the accrued benefit attributable to

such distribution.

"Accrued benefit," as used in § 9.6, is defined at § 1.1

29a

as follows:

The normal retirement benefit which a

Member has earned up to any date, and

which is payable at Normal Retirement

Date in an amount computed in accordance

with Section ... 4.3 [which sets forth the

general method for calculating the normal

retirement benefit], based, however, only

upon Average Monthly Compensation

[**12] received and Years of Participation

rendered by a Memberxy up to the date as of

which the Accrued Benefit is computed ... .

As the Court of Appeals noted, there was no

description whatsoever as to the mechanics of this so-

called phantom account. 433 F\3d at 258. For that

reason, the Second Circuit and other courts rejected

the administrator's utilization of such a mechanism in

calculating benefits.

The SPD provides even less guidance than the Plan

in this regard. As the Court of Appeals noted, the only

notice in the SPD concerning non-duplication of

benefits was the proviso that "the amount you receive

may also be reduced if you had previously left the

company and received a distribution at that time." Jd.

at 265 (citing Layaou, 238 F.3d at 210). The Court of

Appeals in both Frommert and Layaou determined

that this bare-bones notice failed to adequately apprise

employees as to the phantom account mechanism.

In addition, as those and other cases make clear,

where the Plan and the SPD conflict, the SPD controls.

See Burke, 336 F.3d at 110. Frommert, 433 F.3d at

265. Accord Tocker v. Philip Morris Companies, Inc.,

470 F.3d 481, 487-88 (2d Cir. 2006), |**13) Demirovic

v. Building Service 32 B-J Pension Fund, 467 F.3d

208, 210 n. 1 (2d Cir. 2006), Bouboulis v. Transport

Workers Union of America, 442 F.3d 55, 61 (2d Cir.

2006).

30a

The question, then, is what, in light of these vague

provisions in the Plan and SPD, this Court should to

do to remedy the violation of ERISA. I believe that the

best course is to do what I did previously in Layaou

involving a similar remand from the Court of Appeals.

Layaou v. Xerox Corporation, 330 F.Supp.2d 297

(W.DN.Y. 2004). In Layaou, I directed the

administrator "to recalculate plaintiffs retirement

benefit, ... and to pay plaintiff a lump sum in the

amount of the difference between the amount of

benefits that plaintiff has received, and the amount of

the recalculated benefit, without any consideration of

a ‘phantom account." /d. at 305 (footnote omitted). |

added that "[ilt would not be unreasonable ... for the

administrator to subtract out the amount of the prior

distribution," in order to avoid giving the plaintiff a

windfall, but left it to the Plan administrator to

verform the actual calculation of the plaintiff's benefits

[+1 4] in the first instance, stating that "[ilf plaintiff

believes that the administrator's calculation is

erroneous, and the matter cannot be resolved between

the parties, he can seek further relief in this Court."

Id. at 304.

The same process should apply here. This process

is straightforward; it adequately prevents employees

from receiving a windfall, and I believe it most clearly

reflects what a reasonable employee would have

anticipated based on the not-very-clear language in the

Plan and SPD. [*459] Again, if there is some doubt or

ambiguity as to this formula, it must be resolved in

favor of the employee. See Lifson v. INA Life Ins. Co.

of New York, 333 F.3d 349, 353 (2d Cir. 2003) (in

reading an ERISA plan, "[wle construe ambiguities

against the drafter and in favor of the beneficiary");

Perreca v. Gluck, 295 F.3d 215, 223 (2d Cir. 2002)

("absent evidence indicating the intention of the

parties, any ambiguity in the language used in an

ERISA plan should be construed against the interests

of the party that drafted the language").

3la

In so ruling, I also reject defendants’ suggestion

that the phantom account offset can properly be

applied [**15] to a// employees’ accrued benefits

earned after 1998, regardless of when the employees

were rehired. As defendants themselves note, the

Second Circuit's statement that "the phantom account

may not be applied to employees rehired prior to the

issuance of the 1998 SPD," 433 F.3d at 263, "does not

expressly contain this limitation," Defendant's Pre-

Hearing Brief Addressed to Remedies, Dkt. # 121-1 at

23, and I[ decline defendants' invitation to infer such a

limitation from that apparently categorical statement.

The Court of Appeals gave this Court specific

directives on remand, and determining whether the

phantom account offset should apply to post-1998

earned benefits of employees rehired prior to that date

was not among those directives.

II. Which of the Plaintiffs Were Rehired by Xerox

after the Plan Was Amended in 1998

The Court of Appeals also directed the district court

"to determine which of the plaintiffs were rehired by

Xerox after the Plan was amended to include the

phantom account and thus can be bound by its terms."

433 F.3d at 269. 'Vhis directive relates to the Second

Circuit's holding that "for employees rehired

subsequent to [**16] the amendment of the Plan

through the 1998 SPD, the phantom account is a

component of the Plan that they joined and thus may

permissibly be applied to them." /d. at 263. As the

court explained,

[elmployees hired after this amendment

to the Plan occurred, unlike those rehired

before then, became Plan participants

under the terms of the amended Plan. As

such, the phantom account may permissibly

be applied to them. With full notice of the

phantom account's existence, these rehired

employees, unlike their predecessors who

32a

lacked such information, had _ the

opportunity to make an informed decision

about taking or leaving the terms of the

deal offered to them under the Plan.

Id. at 269. That matter does not appear to be in

dispute, however, and I presume that the parties will

be able to agree on whether each employee was rehired

prior to or after the 1998 amendment date. If the

parties are unable to agree about whether a particular

employee was rehired prior to that, they may seek a

determination of that question from the Court.

Ill. Effect of the Releases Signed by Twenty-Two

Plaintiffs

On January 5, 2001, plaintiffs' counsel [**17] filed

a motion for "emergent injunctive relief," seeking relief

in connection with Xerox's offer to plaintiffs to accept

the termination of their employment as part of a

reduction in force ("RIF"), and to sign a general release

waiving any existing or potential claims they might

have had against Xerox--including ERISA claims--in

exchange for salary continuance, a form of severance

benefit in which the employee would continue to

receive his full, regular salary for a specified period

even after he stopped working at Xerox.

In his affidavit in support of that motion, plaintiffs'

attorney, Robert H. Jafie, Esq., [*460] characterized

Xerox's offer as a form of discrimination against his

clients based on their exercise of their rights under

ERISA by filing or joining this lawsuit challenging

defendants' use of the phantom account offset. Dkt. #

47P 2.

In his affidavit, Jaffe noted that the proposed

release "Includes a waiver or withdrawal of any claims

that were made or could have been made by [plaintiffs]

for recalculation of retirement benefits under ERISA."

Id. P 5. He added that "[t]lhe form of general release

33a

which Xerox has asked at least five clients [**18] of

my law office to execute explicitly includes a release of

all claims under ERISA." /d@ P 8.

Jaffe stated that as of the date of the affidavit, five

of his clients, three of whom were then named

plaintiffs in this action, had asked him to review the

proposed release "and suggest an alternative which

would avoid a waiver of their rights under ERISA," at

least until the Second Circuit issued a decision in

Layaou, which was then pending before the Court of

Appeals.’ /d. P 9. Jaffe stated that he had drafted a

revised release containing language "which carves out

from its scope the waiver of pending ERISA claims for

recalculation of retirement benefits." /d. P 10. Jaffe

said that his clients had presented the revised release

to Xerox, but were told by Xerox that "it was

unacceptable." /d.

After hearing oral argument, [**19] this Court

denied plaintiffs’ motion in open court on January 11,

stating in effect that I saw no ERISA violation in an

employer's conditioning an offer of severance benefits

on a release of ERISA claims. See Dkt. # 53 at 38-42.

Twenty-two of the 104 named plaintiffs did

subsequently sign the releases and were terminated in

a RIF in exchange for salary continuance. Dkt. # 133-

7. Although the exact language used varies somewhat

among the releases, in general they state that the

employee "releasels] Xerox from any and all claims,

even if [the employee] dloes]n't know about the claim

at this time, based on anything that has occurred prior

to the date [the employee] signls] this Release." “ The

‘The Second Circuit's decision remanding

Layaou was issued about two weeks after plaintiffs

filed their motion, on January 18, 2001.

*"Xerox" is defined by the releases to include,

inter alia, "the Xerox employee benefit plans" in

34a

releases expressly referenced a number of types of

claims covered by the release, including ERISA claims.

With certain exceptions not relevant here, the releases

also provided that the employee agreed not to "file or

pursue any charge or claim with any governmental

agency or any court against Xerox based on anything

that occurred before [the employee] signed this

Release." Jd.

[**20] Each release also states that the employee

"acknowledgels] and agreels] that the consideration set

forth in this Release is in addition to anything of value

to which [the employee] is entitled by law and/or Xerox

policy." /d. Four of the releases, however, contain

additional language carving out an exception for

plaintiffs’ claims in this action: "I acknowledge and

agree that the consideration set forth in this Release

is in addition to anything of value to which I am

entitled by law or Xerox policy, including my right to

a pension under the Xerox Retirement [Income

Guarantee Plan to which I do not release my claim as

a member of the Frommert lawsuit." /d. at 49, 57, 69,

88.

Plaintiffs now contend that the execution of these

releases, even the ones without a [*461] specific

exclusion for the claims in this lawsuit, does not bar

any of them from pursuing their ERISA claims in this

action. Plaintiffs contend that the releases are

ambiguous in certain’ respects, and_ therefore

unenforceable.

As a preliminary matter, I note that plan

participants can waive ERISA claims, and that such

waivers will be enforced as long as they are knowing

and voluntary. See, e.g, Laniok v. Advisory Committee

of Brainerd Mfg. Co. Pension Plan, 935 F.2d 1360,

which the employee was a participant, as well as the

trustees and administrators of those plans. Dkt. #

133°7.

3Sa

1367 (2d Cir. 1991) |**21] ("the age discrimination

provision of ERISA does not prohibit an individual

waiver of pension plan participation by an older

employee, ... so long as the waiver is knowing and

voluntary"); Mange v. Petrolite Corp., 960 F.Supp. 206,

209 (E.D.Mo. 1997)("Under E RISA, a release of claims

by plan participants is valid so long as it is knowing

and voluntary"). There is also authority that "lal

settlement agreement that releases legal claims in

exchange for severance benefits may be enforced under

ERISA." Seman v. FMC Corp. Ret. Plan, 334 F.3d 728,

731-32 (Sth Cir. 2003), see also Smart v. Gillette Co.

Long-Term Disability Plan, 887 F.Supp. 383, 386

(D.Mass. 1995) (employee knowingly, intentionally,

and voluntarily agreed to a severance plan that

included a general release which precluded her ERISA

claim), affd, 70 F.3d 173, (1st Cir. 19985).

The Second Circuit has cautioned, however, that

"(tlhe validity of an individual's waiver of pension

benefits is subject to closer scrutiny than his or her

waiver of generai contract claims." Finz v. Schle singer,

957 F.2d 78, 81 (2d Cir. 1992), cert. denied, 506 U. S.

822, 118 S. Ct. 72, 121 L. Ed. 2d 38 (1992), (|**22]

accord Sharkey v. Ultramar Energy Ltd., 70 F.3d 226,

231 (2d Cir. 1995). Courts should look to the "totality

of circumstances" to determine whether a release is

knowing and voluntary. Sharkey v. Ultramar Energy

Ltd., Lasmo plc, Lasmo (AUL Ltd), 70 F.3d 226, 231

(2d Cir. 1995)

The relevant factors to consider in this analysis

include: (1) the plaintiff's education and business

experience; (2) the amount of time the plaintiff had

possession of or access to the release before signing it;

(3) the plaintiffs role in deciding the terms of the

release; (4) the clarity of the release: (5) whether the

plaintiff was represented by or consulted an attorney:

(6) whether the consideration given in exchange for the

employee's waiver exceeds benefits to which the

employee was already entitled by contract or law; (7)

whether the employer encouraged the employee to

36a

consult an attorney; and (8) whether the employee had

a fair opportunity to do so. Bormann v. AT & T

Communications, Inc., 875 F.2d 3899, 402-038 (2d Cir.)

cert. dented, 493 U.S. 924, 110 S. Ct. 292, 107 L. Ed.

2d 272 (1989). These factors are not exhaustive, and

all [**23] need not be satisfied before a release is

deemed enforceable. Jd.

Here, some of these factors, such as the time (45

days) that plaintiffs had to consider whether to sign

the release, and Xerox's encouragement to them to

consult an attorney before signing, weigh in favor of

enforcement of the releases. Other factors, however,

are more troubling, particularly the clarity of the

release and the consideration given by Xerox in

exchange for the releases.

Paragraphs 3 and 4 of the releases generally

provide that the employee releases Xerox from any and

all employment-related claims. * Paragraph 3 states

that the [*462] employee "releasels] Xerox from "any

and all claims ... based on anything that has occurred

prior to the date" on which the employee signed the

release, and paragraph 4 states that the employee

"also ol Xerox from claims based on [any

federal, state or local law] concerning employment ...

." Paragraph 3 hsts ERISA claims as one of the types

of claims waived by the employee. Read literally, this

could be construed to mean that the employee was

waiving any claim under ERISA, based on anything

that occurred prior to the date on which he signed the

release. [**24]

* These numbers refer to Xerox's standard

release form for participation in a voluntary RIF.

See, e.g., Dkt. # 133-7 at 47. The numbering varies

somewhat among the releases signed by plaintiffs

(some of whom were terminated in involuntary

RIFs), though the provisions are essentially the

same.

37a

As stated, paragraph 5. states that’ the

consideration set forth in the release, ie., Xerox's

agreement to provide the employee with salary

continuance, is "in addition to anything of value to

which [the employee] is entitled by law and/or Xerox

policy." This provision was presumably included in the

release in order to conform to the requirements of the

Older Workers Benefit Protection Act ("OWBPA"),

which was enacted by Congress to modify the Age

Discrimination in Employment Act ("ADEA") in

certain respects, see Meacham v. Knolls Atomic Power

Laboratory, 461 F.3d 134, 150 (2d Cir. 2006).

The OWBPA provides in part that "[a]n individual

may not waive any right or claim under [the ADEA]

unless [**25] the waiver is knowing and voluntary,"

and that in general "a waiver may not be considered

knowing and voluntary unless at a minimum" certain

conditions are met, one of which is that "the individual

waives rights or claims only in exchange for

consideration in addition to anything of value to which

the individual already is entitled ... ." 29 US.C. $

6260).

The import of paragraph 5 is that the salary

continuance given to the employee did not take the

place of, but was in addition to, any benefits to which

the employee was a/rceady entitled by law or Xerox

policy. This suggests that the employee was not

waiving his right to such benefits. If he were, it would

make little sense to describe his salary continuance as

being "in addition to" such benefits.

Read that way, the releases would not bar

plaintiffs' claims here. If plaintiffs were entitled to

pension benefits under the law, 7e., ERISA, or under

Xerox's own policies, they did not waive their rights to

such benefits. Furthermore, while it might be argued

that there is a distinction between a right to pension

benefits in general and a "claim" seeking to have those

benefits calculated according [**26] to a particular

formula, that is a distinction without a difference here,

38a

because the Second Circuit has now held that, at least

with respect to employees rehired before 1998, Xerox's

"reduction of justified expectations of benefits [by

using the phantom account] took the form of a

retroactive cut-back in violation of" ERISA. * 433 F.3d

at 268. |n other words, those employees were "entitled

by law" not simply to receive some pension benefits,

but to have their benefits calculated without any

reduction attributable to a "phantom" account.

Even if some other interpretations of the releases

might be plausible, the releases are at the very least

ambiguous as to what the employee was giving up in

exchange for salary continuance. Section 5 may have

been added primarily to comply with the OWBPA, but

it cannot [**27] be ignored, and when read in

conjunction with paragraphs 3 and 4, it appears to

create some [*463] doubt about whether the release

truly covered all ERISA claims, especially the proper

calculation of benefits to which the employee was

entitled. °

* ERISA's anti-cutback rule provides that

"[t]he accrued benefit of a participant under a plan

may not be decreased by an amendment of the plan."

29 U.S.C. § L054(gQVD).

I recognize that there is authority that

noncompliance with the OWBPA does not

automatically invalidate a release as to non-ADEA

claims. See Chaplin v. Nationscredit Corp., 307 F.3d

368, 375 (5th Cir. 2002), Kaminski v. CoreStates

Fin. Corp., No. CIV. A. 98-CV-1623, 1998 U.S. Dist.

LEXTS 18579, 1998 WL 800536, at *3 (E.D.Pa. Nov.

18, 1998). That does not make such noncompliance

irrelevant, however. The requirements of the

OWBPA were intended by Congress to ensure that

an employee's waiver of his rights be "knowing and

voluntary." 29 U.S.C. § 626()(1). Thus, an

employer's tendering of consideration that does not

39a

[**28] I recognize that these releases were signed

during this litigation, and that in plaintiffs' January 5,

2001 motion for injunctive relief, plaintiffs' own

counsel expressed his concern that the releases would

constitute "a waiver or withdrawal of any claims that

were made or could have been made by [plaintiffs] for

recalculation of retirement bencfits under ERISA."

Certainly these facts could suggest that at least some

of the parties understood the releases to cover their

claims in this lawsuit. That does not alter the fact,

though, that by its terms, the release appears to except

from the scope of the waiver any benefits to which the

employee is legally entitled. Under Xerox's

interpretation, the Plan administrator could refuse to

pay an employee any pension and, by dint of the

release, the employee could do nothing about it. Again,

any ambiguity on that score should be resolved against

Xerox, which drafted the releases. Lifson, 3383 F.3d at

353 see also Albany Savings Bank, FSB v. Halpin, 117

F.3d 669, 674 (2d Cir. 1997)"ambiguities in contracts

should be construed against the drafter").

Furthermore, if it had been the parties' mutual

understanding [**29] that the releases covered all of

plaintiffs' claims in this litigation, it would have been

a simple enough matter for Xerox to have included

language to that effect in the releases. See, e.g., Morais

v. Central Bev. Corp. Union Employees' Supplemental

Ret. Plan, 167 F.3d 709, 711 (1st Cir. 1999)" cee

settlement agreement and release that expressly

stated that plaintiff had directed his union to

withdraw his grievance and demand for arbitration

over disputed benefits). A single sentence would have

clarified the matter. That some of the p/aintiffs added

language to their releases making clear that the

exceed the value of anything to which the employee

was already entitled is some evidence that the

employee's waiver executed in exchange for that

consideration was not knowing and voluntary.

40a

releases did not cover their claims in this action

demonstrates how easy it would have been for Xerox to

insert language in the other releases to include the

employees' claims in this particular case, which was

already in litigation. °

[**30] The omission of any mention of this lawsuit

is, in Cne sense, not surprising, though it is still worth

noting. On their face, these releases (other than the

ones to which some plaintiffs inserted language

expressly excepting their claims in this case from the

scope of the release) do not appear to have anything to

do with this litigation. Rather, they appear to be

standard release forms given to all employees who

choose to participate in a RIF, and are aimed at

foreclosing the possibility of [*464] the employee's

later assertion of claims relating to his termination in

the RIF. In an effort to make them comprehensive, the

release form lists an array of statutes, including

ERISA, that it is intended to cover, but otherwise

there is no suggestion that plaintiffs’ claims in this

case, or any other particular claims, were being

waived. On the contrary, the reference to the stated

consideration being "in addition to anything of value to

which [the employee is] entitled by law or Xerox

policy" suggests that the employee did not waive any

then-pending claims alleging an entitlement to some

particular benefits.

Another factor that the Second Circuit has directed

° One could argue, of course, that the

language added by several plaintiffs excluding their

claims in Frommert suggests that the other releases

did cover those claims. That some plaintiffs chose to

insert language clarifying what they understood to

be the scope of the release, however, sheds little

light on the meaning of the other plaintiffs’ releases,

which remain, at best, ambiguous on that score.

4la

courts to consider in deciding [**31] whether a waiver

is enforceable is whether the consideration given in

exchange for the employee's waiver exceeds benefits to

which the employee was already entitled by contract or

law. Bormann, 875 F.2d at 403. In the case at bar, it

appears that, at least with respect to some of the

plaintiffs, the consideration received by the plaintiffs,

1e., salary continuance, amounted to far less than they

would have received under the Plan without the

phantom account offset. In the case of plaintiff

Pietrowski, for example, it appears that his prior

lump-sum payment at the time of his first separation,

plus his severance pay at the time of his second

separation, totaled about $ 210,000, but that he would

have received over $ 832,000 as a lump-sum payment

of his standard Plan annuity. See Dkt. # 130-2 Ex. D.

Defendants do not appear to dispute that the

plaintiffs in question received less than they would

have without the phantom account offset; they simply

contend that the consideration received was

substantial, and that in any event, the disparity 1s not

as great as plaintiffs contend because defendants’

proposed remedial approach would still result in a

lesser benefit [**32] than what plaintiffs seek. Of

course, I have rejected that remedial approach.

The consideration received by plaintiffs here--in

some cases up to a year's salary--was not insignificant.

In light of the Second Circuit decision, however, it

cannot be said that these benefits exceeded what

plaintiffs were entitled to by law, ze., pension benefits

calculated without a phantom account offset. While it

is true that plaintiffs did not know, at the time that

they signed the releases, what the ultimate result of

this litigation would be, both they and Xerox knew

that plaintiffs were pursuing ERISA claims for

amounts far greater than what Xerox was offering

42a

them in exchange for signing the releases. ’ This at

least casts some additiona! doubt on whether the

releases were entered into knowingly and voluntarily

with respect to plaintiffs’ ERISA claims. See Unum

Life Ins. Co. of America v. Cappello, 278 F.Supp.2d

228, 236 (D.RI. 2003) value of consideration that plan

participant received, though "not an insubstantial

sum," did not match what issuer of plan contended she

waived by entering into severance agreement, since it

was likely that amount of benefits to which she [**33]

would have been entitled would have been

substantial).

I also note that paragraph 3 only releases Xerox

from claims "based on anything that haldl occurred

prior to the date" on which the release was signed.

Arguably, that language did not cover plaintiffs' later

[*465] receipt of benefits, in amounts less than that to

which they claim they are entitled, due to the use of

the phantom account offset. At the time the releases

were signed, plaintiffs had not yet left Xerox's employ,

and had only received projections of [**34] what their

benefits would be. Again, that is not the only

reasonably interpretation; one could also argue that in

light of the existence of this lawsuit challenging that

very offset, everyone involved understood the releases

to cover any claims concerning the offset. But this

nonetheless adds to the ambiguity of the scope of the

release, which should not be resolved against

’ It appears that one plaintiff, Matthew

Alfieri, signed his release on October 27, 2006, after

the Second Circuit decision was issued. Dkt. # 133-7

at 46. I see no reason for this Court to rule any

differently as to Alfieri, however. If anything, the

Second Circuit decision had by that point made it

even clearer that Alfieri, like the other plaintiffs,

was entitled to calculation of his pension benefit

without the phantom account offset, and therefore

that he was not waiving his claim in that regard.

plaintiffs.

IV. Breach of Fiduciary Duty

In its decision in this case, the Court of Appeals

concluded that there was a triable issue of fact as to

"whether the defendants had fiduciary obligations

under ERISA and if so whether they breached them ...

" 433 F.3d at 271. The court stated that

loln remand, the district court should

permit a trier of fact to assess (1) whether

the defendants acted in a fiduciary capacity

when they communicated with the Plan's

beneficiaries about the implementation of

the phantom account, and (2) whether

those communications contained

affirmative misrepresentations of fact

concerning the Plan or breached the

defendants' duty to deal fairly with the

Plan's beneficiaries.

Id. at 271-72. The court also "directled] the district

[**35] court that if the plaintiffs prevail on this claim,

it must determine what ‘appropriate equitable relief

is necessary." /d. at 272.

Although it might appear difficult to reconcile this

directive with the Court of Appeals' holding that

"[blecause adequate relief is available under [§

502(a)(1)(B), which allows a plan participant 'to

recover benefits due to him under the terms of his

plan, to enforce his rights under the terms of the plan,

or to clarify his rights to future benefits under the

terms of the plan’), there is no need on the facts of this

case to also allow equitable relief under § 502(a)(3),"

433 F.3d at 270, t find it unnecessary to resolve any

apparent contradiction in that regard, since plaintiffs

do not appear to seek any equitable relief on remand,

other than relief which either this Court has effectively

granted, or which the Second Circuit has already found

to be unwarranted.

Plaintiffs do contend that the Court should rule

that the Second Circuit's decision in this case is "class-

based," and that it "encompasses all rehired Xerox

employee rehired prior to the publication of the

September 1998 SPD," Dkt. # 129-1, but to the extent

[**36] that plaintiffs seek some sort of declaratory or

injunctive relief in that regard, the Second Circuit has

held that this is not a proper case for such relief. As

stated, the Court of Appeals held that "the necessary

remedies can be fully provided under § 502(a)(1)(B),"

433 F.3d at 269, and concluded that "sweeping relief”

in the form of a judgment declaring that the phantom

account is prohibited by ERISA and enjoining its

application in calculating the benefits of any Plan

participants was "not warranted," zd. °

Having said that, the rulings contained both in the

Second Circuit decision and in this Decision and Order

do seem applicable to all Xerox employees who are

similarly situated to the named plaintiffs. Leaving

aside any particularized [**37] defenses [*466] that

the Plan might have against individual employees, I

do not see how defendants could continue to utilize the

phantom account as to such employees without

running afoul of the Second Circuit's holding that “the

phantom account may not be applied to employees

rehired prior to the tssuance of the 1998 SPD." 433

F.3d at 263. The clear import of the Second Circuit's

decision is that utilization of the phantom account

with respect to employees rehired before the 1998 Plan

amendment violates ERISA. But neither this Court,

nor apparently the Second Circuit, sees any basis for

granting equitable relief in that regard at this time.

" Tf plaintiffs’ use of the term "class-based" is

meant to imply that the Court should grant some

"class"-wide relief, that request is also denied. This

is not a class action, nor have plaintiffs ever

presented it as, or sought to make 1t a class action.

45a

I also note that the purported basis for plaintiffs’

claim for breach of fiduciary duty appears to have

shifted somewhat over the course of this litigation.

Originally, plaintiffs alleged that “defendants

breached their fiduciary duty to Plan participants by

publishing and supplying misleading information in

SPDs, annual Personal Benefits Statements and in

response to the plaintiffs' requests for ciarification of

their rights under the Plan." 433 F.3d at 270. On

remand, however, this claim seems to focus largely if

not entirely [**38] on the releases signed by some of

the plaintiffs. Specifically, plaintiffs now contend that

defendants breached their fiduciary obligation to

disclose to those Plan participants who signed the

release "that implementation of the phantom account

offset violates KRISA § 204(g) and ERISA § 204(h) and

further that the consideration paid for executing the

release was substantially less than the retirement

benefits to which they may be entitled to receive [sic]

if the phantom account offset was not applied.” Dkt. #

129-1 at 15.

In any event, the relief that plaintiffs now seek is

simply a ruling by this Court that the releases are

unenforceable against plaintiffs insofar as it purports

to waive claims for "enhanced" retirement benefits,

1e., benefits calculated without using the phantom

account offset. See 1d. at 19. That is essentially what

the Court has donc. Plaintiffs are getting all of the

relief, equitable or otherwise, to which they are

entitled. There is no need, therefore, to rule on

plaintiffs' claim for breach of fidudiary duty.

V. Plaintiff Holland

Plaintiff Lawrence R. Holland has at all relevant

times been an hourly (ze, non-salaried) Xerox

] y= [** 99} rt 1c . “od b r he = a . a

employee 39] who is covered by the terms of a

collective bargaining agreement. Defendants contend

that as such, Holland has never been a participant in

the Plan, which by its terms excludes from its coverage

46a

"[alny person covered by a collective bargaining

agreement, the terms of which do not require coverage

under this Plan ... ." Dkt. # 121-5 at 6. Therefore,

defendants contend, Holland lacks standing to sue for

benefits under the Plan.

In response, plaintiffs do not appear to deny that

Holland is a participant in a different pension plan

from the one at issue in this case, but contend that the

plan in which he is a participant utilizes the same

phantom account offset as the Plan covering the other

plaintiffs. The essence of plaintiffs' argument seems to

be that the Court should simply allow Holland's claims

to go forward in this case so that hourly Xerox workers

will be able to benefit from the Second Circuit's rulings

in this case and the relief ordered by this Court with

respect to the other named plaintiffs.

Holland's request must be denied. It is axiomatic

that only plan participants and beneficiaries may sue

for benefits under § 1132(a)(1)(B). See Nechis v. Oxford

Health Plans, Inc., 421 F.3d 96, 100-01 (2d Cir. 20085)

[**40] (citing Franchise Tax Board v. (*467]

Construction Laborers Vacation Trust for S. Cal., 463

U.S. 1, 27, 103 8. Ct. 2841, 77 L. Ed. 2d 420 (1983).

Holland's suggestion that the Court allow the

administrators of his plan to be joined as defendants in

this action is denied, as plaintiff has shown no basis

for adding additional defendants in this case at this

late date. Plaintiffs' contention that defendants have

only recently raised the argument that Holland is not

entitled to any benefits under the Plan is contradicted

by this Court's July 30, 2004 Decision and Order, in

which I expressly referenced (but found it unnecessary

to decide) defendants' arguments to that effect, 328

F’ Supp.2d at 439 n. 14. Furthermore, plaintiffs have

made no motion to amend the complaint to add

additional defendants, and plaintiffs’ memoranda and

other papers on remand are not a proper vehicle for

Alva

making such a request. ”

[**41] VI. Plaintiffs' Motion to Amend the Complaint

On November 6, 2006, plaintiffs filed a motion for

leave to file a second amended and consolidated

complaint, adding a number of additional plaintiffs in

this case. The gist of the motion was that following the

remand from the Second Circuit, additional Xerox

employees who had been separated from and then

rehired by Xerox prior to 1998 contacted plaintiffs'

counsel, seeking to join in or obtain the benefits of this

lawsuit. Plaintiffs' counsel wrote to the Plan

administrator, essentially asking him to waive these

individuals' exhaustion requirements under ERISA

and apply the rulings of this Court and the Court of

Appeals in this case and in Layaou to these additional

Plan participants. Dkt. # 132-3 at 1-4. The

administrator's response was, essentially, that until a

"final resolution" of this action, the phantom account

offset would continue to be applied to all Plan

participants, with "no exception or deviation." /d. at 5.

To the extent that any of the proposed new

plaintiffs have not yet retired from Xerox, I see no

basis for adding them to this lawsuit. As stated earlier,

the Second Circuit's holding that "the phantom [**42]

account may not be applied to employees rehired prior

to the issuance of the 1998 SPD," 433 F’3d at 263,

would certainly seem to foreclose defendants from

utilizing the phantom account in calculating "new"

retirees’ pension benefits.

9

It would seem to be beyond dispute, though,

that use of a "phantom account" in the manner found

unlawful by the Second Circuit decision violates

ERISA and cannot be used by any plan. It is

presumed that no plan administrator would

knowingly violate ERISA.

48a

At this point, however, this motion has not been

briefed by defendants, and since there may be issues

involving individualized defenses or other matters

bearing upon the motion to amend, | will not decide

the motion at this time, but will instead reserve

decision after the matter has been fully briefed as set

forth in the Conclusion of this Decision and Order

CONCLUSION

Plaintiffs’ motion for a determination of the

decision of the Second Circuit Court of Appeals and for

other further relef (Dkt. # 129) 1s granted in part and

denied in part, and defendants’ cross-motion for partia!

summary judgment (Dkt. # 133) 1s granted in part and

denied in part. Defendants are hereby directed to

recalculate plaintiffs’ retirement benefits, consistent

with the terms of this Decision and Order and the

January 6, 2006 decision of the Court of Appeals for

the Second Circuit, and to pay each plaintiff a lump

sum in the amount of the difference between [**43]

the amount of benefits that each plaintiff has [*468]

received, and the amount of the recalculated benefit,

without any consideration of a “phantom account.’

Plaintiffs’ claim for breach of fiduciary duty 1s denied

as moot. Plaintiff Lawrence Holland's claims are

dismissed in their entirety

Defendants are directed to respond to plaintiffs

motion for an extension of time to file a second

consolidated and amended complaint (Dkt. # 132)

within thirty (30) days after the date of issuance of

this Decision and Order. Plaintiffs shall file reply

papers no later than fifteen (15) days after the date

that defendants' response is filed

ITIS SO ORDERED

DAVID G. LARIMER

United States District Judge

Dated: Rochester. New York

49a

January 24, 2007.

50a

APPENDIX C

UNITED STATES COURT OF APPEALS FOR

THE SECOND CIRCUIT

THURGOOD MARSHALL U.S. COURT HOUSE

40 FOLEY SQUARE, NEW YORK, N.Y. 10007

Catherine O’Hagan Wolfe

CLERK OF COURT

At a stated term of the United States Court of

Appeals for the Second Circuit, held at the Daniel

Patrick Moynihan United States Courthouse, 500

Pear] Street, in the City of New York, on the day

of September two thousand and eight,

Paul J. Frommert, Alan H. Clair, Donald S. Foote,

Thomas I. Barnes, Ronald J. Campbell, Frank D

Commesso, William F. Coons, James D. Gagnier,

Brian L. Gaita, William J. Ladue, Gerald A. Leonardo

Jr., Frank Mawdesley, Harold S. Mitchell, Walter J.

Petroff, Richard C. Spring, Patricia M. Johnson, F.

Patricia M. Tobin, Nancy A. Revella, Anatoli G.

Puschkin, William R. Plummer, Michael J. McCoy,

Larry J. Gallagher, Napoleon B. Barbosa, Alexandra

Spearman Harrick,

Janis A. Edelman UNITED STATES COURT OF APPEALS

Patricia H. Johnston, FILED

Kenneth P. Parnett, SEP 25, 2008

Joyce D. Cathcart, Floyd — Catherine O'Hagan Wolfe, Clerk

Swaim, Julie A. SECOND CIRCUIT

McMillan, Dennis E.

Baines, Ruby Jean Murphy, Matthew D. Alfie, Kathy

Fay Thompson, Mary Beth Allen, Craig R. Spencer,

Linda S. Bourque, Thomas Michael Vasta, Frank C

Darling, Clark C. Dingman, Caro] E. Gannon, Joseph

kt. Wright, David M. Rohan, David B. Ruddock,

Charles Hobbs, Charles Zabinski, Charles J.

Maddalozzo, Joyce M. Pruett, Wilham A. Craven,

mae

Maureen A. Loughlin Jones, Kenneth W. Pietrowski,

Bonnie Cohen, Lawrence R. Holland, Gail A. Nasman,

Steven D. Barley, Donna S. Lipari, Andrew C.

Matteliano, Michael Horrocks, Candice J. White,

Dennis E. Bains, Kathleen E. Hunter, John L.

Crisafulli, Deborah J. Davis, Brenda H. McConnell,

Kathleen A. Bowen, Robert P. Caranddo, Terence J.

Kurtz, William J. Cheslock, Thomas E. Dalton, Lynn

Barnsdale, Bruce D. Craig, Gary P. Hardin, Claudette

M. Long, Dale Platteter, Mary Ann Sergeant, Molly

White Kehoe, Irshad Quershi, David K. Young, Leslie

Ann Wunsch, Eugene H. Updyke, Michael R. Benson,

Alvin M. Adams, Ronnie Kolniak, James J. Farrell,

Robert L. Brackhahn, Benjamin C. Roth, Richard C.

Carter, Carmen J. Sofia, Kathleen W. Levea, Frederick

Scacchitti, Paul Defina, James G. Walls, Gail J. Levy,

John A. Williams, Crystal Thornton, Charles R.

Drannbauer, William M. Burritt, and Janice Ross

Heiler,

Plaintiffs-Appellees,

ORDER

No. 07-0418-cv

Sally L. Conkright, Xerox Corporation Pension Plan

Administrator, Patricia M. Nazemetz, Xerox

Corporation Pension Plan Administrator, Lawrence M.

Becker, Xerox Corporation . lan Administrator, Xerox

Corporation Retirement Income Guarantee Plan, and

Xerox Corporation, a New York Corporation,

Defendants-Appellants,

XEROX CORPORATION,

Defendant.

Appellees, Paul J. Frommert, Alan H. Clair, Donald S.

Foote, et al., having filed a petition for panel

52a

rehearing, or, in the alternative, for rehearing en banc,

and the panel that determined the appeal having

considered the request for panel rehearing, and the

active members of the Court having considered the

request for rehearing en banc,

IT IS HEREBY ORDERED that the petition is

denied.

FOR THE COURT:

Catherine O’Hagan Wolfe, Clerk

By: s/

Richard Alcantara, Deputy Clerk

53a

APPENDIX D

WDNY/RONY

MANDATE 00-CV-6311

FELDMAN

LARIMER

United States Court of Appeals

FOR THE

SECOND CIRCUIT

J UDGMENT

At a stated Term of the United States Court of

Appeals for the Second Circuit, held at the Daniel

Patrick Moynihan United States Courthouse, 500

Pearl Street, in the City of New York, on the 24" day

of July, two thousand eight,

Before: Hon. Chester J. Straub,

Hon. Reena Raggi,

Circuit Judges,

Hon. William K. Sessions, II],

District Judge.*

UNITED STATES COURT OF APPEALS

FILED

JUN 24, 2008

Catherine O’Hagan Wolfe, Clerk

SECOND CIRCUIT

Docket No. 07-0418-cv

Paul J. Frommert, Alan H. Clair, Donald S. Foote,

Thomas I. Barnes, Ronald J. Campbell, Frank D.

Commesso, William F. Coons, James D. Gagnier,

Brian L. Gaita, William J. Ladue, Gerald A. Leonardo

Jr., Frank Mawdesley, Harold S. Mitchell, Walter J.

54a

Petroff, Richard C. Spring, Patricia M. Johnson, F.

Patricia M. Tobin, Nancy A. Revella, Anatoli G.

Puschkin, Wilham R. Plummer, Michael J. McCoy,

Larry J. Gallagher, Napoleon B. Barbosa, Alexandra

Spearman Harrick, Janis A. Edelman, Patricia H.

Johnston, Kenneth P. Parnett, Joyce D. Cathcart,

Floyd Swaim, Julie A. McMillan, Dennis E. Baines,

Ruby Jean Murphy, Matthew D. Alfieri, Kathy Fay

Thompson, Mary Beth Allen, Craig R. Spencer, Linda

S. Bourque, Thomas Michael Vasta, Frank C. Darling,

Clark C. Dingman, Carol E. Gannon, Joseph E.

Wright, David M. Rohan, David B. Ruddock, Charles

Hobbs, Charles Zabinski, Charles J. Maddalozzo, Joyce

M. Pruett, Wiliam A. Craven, Maureen A. Loughlin

Jones, Kenneth W. Pietrowski, Bonnie Cohen,

Lawrence R. Holland, Gail A. Nasman, Steven D.

Barley, Donna S. Lipari, Andrew C. Matteliano,

Michael Horrocks, Candice J. White, Dennis E. Bains,

Kathleen E. Hunter, John L. Crisafulli, Deborah J.

Davis, Brenda H. McConnell, Kathleen A. Bowen,

Robert P. Caranddo, Terence J. Kurtz, William J.

Cheslock, Thomas FE. Dalton, Lynn Barnsdale, Bruce

D. Craig, Gary P. Hardin, Claudette M. Long, Dale

Platteter, Mary Ann Sergeant, Molly White Kehoe,

Irshad Quershi, David K. Young, Leshe Ann Wunsch,

EKugene H. Updyke, Michael R. Benson, Alvin M.

Adams, Ronnie Kolniak, James J. Farrell, Robert L.

Brackhahn, Benjamin C. Roth, Richard C. Carter,

Carmen J. Sofia, Kathleen W. Levea, Frederick

Scacchitti, Paul Defina, James G. Walls, Gail J. Levy,

John A. Wilhams, Crystal Thornton, Charles R.

Drannbauer, William M. Burritt, and Janice Ross

Heiler,

Plaintiffs-Appellees,

Vv.

Sally L. Conkright, Xerox Corporation Pension Plan

Administrator, Patricia M. Nazemetz, Xerox

55a

Corporation Pension Plan Administrator, Lawrence M.

Becker, Xerox Corporation Plan Administrator, Xerox

Corporation Retirement Income Guarantee Plan, and

Xerox Corporation, a New York Corporation,

Defendants-Appellants,

XEROX CORPORATION,

Defendant.

2 SE ene eee

Issued as Mandate:

OCT 22, 2008

S6a

Docket No. 07-0418-ev July 24, 2008

Page 2

Appeal from the United States District Court for

the Western District of New York.

This cause came on to be heard on the transcript

of record from the United States District Court for the

Western District of New York and was argued by

counsel.

ON CONSIDERATION THEREOF, it is hereby

ORDERED, ADJUDGED and DECREED that the

judgment of said district court be and hereby is

AFFIRMED IN PART, VACATED IN PART, and

REMANDED for further proceedings in accordance

with the opinion of this Court.

FOR THE COURT:

CATHERINE O’HAGAN WOLFE, Clerk

by

s/

Joy Pallek

Administrative Attorney

*The Honorable William K. Sessions, III, Chief Judge

of the United States District Court for the District of

Vermont, sitting by designation.

A TRUE COPY

Catherine O’Hagan Wolfe, Clerk

by s/

DEPUTY CLERK (Seal)

S7a

APPENDIX E

29 USC Sec. 626

§ 626. Recordkeeping, investigation, and enforcement

(a) Attendance of witnesses; investigations,

inspections, records, and homework regulations. The

Secretary [Commission] shall have the power to make

investigations and require the keeping of records

necessary or appropriate for the administration of this

Act in accordance with the powers and procedures

provided in sections 9 and 11 of the Fair Labor

eee Act of 1938, as amended (29 U.S.C. 209 and

Zi 2).

(b) Enforcement; prohibition of age discrimination

under fair labor standards; unpaid minimum wages

and unpaid overtime compensation; liquidated

damages; judicial relief; conciliation, conference, and

persuasion. The provisions of this Act shall be

enforced in accordance with the powers, remedies, and

procedures provided in sections 11(b), 16 (except for

subsection (a) thereof), and 17 of the Fair Labor

Standards Act of 1938, as amended (29 U.S.C. 211(b),

216, 217, and subsection (c) of this section. Any act

prohibited under section 4 of this Act [29 USCS § 62.

shall be deemed to be a prohibited act under section 15

of the Fair Labor Standards Act of 1938, as amended

(29 U.S.C. 215). Amounts owing to a person as a

result of a violation of this Act shall be deemed to be

unpaid minimum wages or unpaid overtime

compensation for purposes of sections 16 and 17 of the

Fair Labor Standards Act of 1938, as amended (29

U.S.C. 216, 217): Provided, That liquidated damages

shall be payable only in cases of willful violations of

this Act In any action brought to enforce this Act the

court shall have jurisdiction to grant such legal or

equitable relief as may be appropriate to effectuate the

purposes of this Act, including without limitation

judgments compelling employment, reinstatement or

58a

promotion, or enforcing the liability for amounts

deemed to be unpaid minimum wages or unpaid

overtime compensation under this section. Before

instituting any action under this section, the Secretary

[Commission] — shall attempt to eliminate the

discriminatory practice or practices alleged, and to

effect voluntary compliance with the requirements of

this Act through informal methods of conciliation,

conference, and persuasion.

(c) Civil actions; persons aggrieved; jurisdiction;

judicial relief; termination of individual action upon

commencement of action by Secretary [Commission];

jury trial.

(1) Any person aggrieved may bring a civil action in

any court of competent jurisdiction for such legal or

equitable relief as will effectuate the purposes of this

Act: Provided, That the right ef any person to bring

such action shall terminate upon the commencement

of an action by the Secretary [Commission]! to enforce

the right of such employee under this Act.

(2) In an action brought under paragraph (1), a

person shall be entitled to a trial by jury of any issue

of fact in any such action for recovery of amounts

owing as a result of a violation of this Act, regardless

of whether equitable rehef is sought by any party in

such action.

(d) Filing of charge with Secretary [Commission];

timeliness: conciliation, conference, and persuasion.

No civil action may be commenced by an individual

under this section until 60 days after a charge alleging

unlawful discrimination has been filed with the

Secretary [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 14(b) |29 USCS §

635(b 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 State law, whichever is earlier.

59a

Upon receiving such a charge, the Secretary

[Commission] shall promptly notify all persons named

in such charge as prospective defendants in the action

and shall promptly seek to eliminate any alleged

unlawful practice by informal methods of conciliation,

conference, and persuasion.

(e) Reliance on administrative rulings; notice of

dismissal or termination; civil action after receipt of

notice. Section 10 of the Portal-to-Portal Act of 1947

[29 USCS § 259] shall apply to actions under this Act.

If a charge filed with the Commission under this Act is

dismissed or the proceedings of the Commission are

otherwise terminated by the Commission, the

Commission shall notify the person aggrieved. A civil

action may be breught under * this section by a person

defined in section 11(a) [29 USCS § 630(a/J against the

respondent named in the charge within 90 days after

the date of the receipt of such notice.

(f) Waiver.

(1) An individual may not waive any right or claim

under this Act unless the waiver is Enowing -

voluntary. Except as provided in paragraph (2),

waiver may not be considered knowing and = i

unless at a minimum--

(A) the waiver is part of an agreement between the

individual and the employer that is written in a

manner calculated to be understood by such

individual, or by the average individual eligible to

participate;

(B) the waiver specific ally refers to rights or claims

arising under this Act;

(C) the individual does not waive rights or claims

that may arise after the date the waiver is executed:

(D) the individual waives rights or claims only in

exchange for consideration in addition to anything of

value to which the individual already is entitled:

(E) the individual is advised in writing to consult

with an attorney prior to executing the agreement;

60a

(I) G) the individual is given a period of at least 21

days within which to consider the agreement; or

(i) if a waiver is requested in connection with an

exit incentive or other employment termination

program offered to a group or class of employees, the

individual is given a period of at least 45 days within

which to consider the agreement:

(G) the agree; .ent provides that for a period of at

least 7 days following the execution of such agreement,

the individual may revoke the agreement, and the

agreement shall not become effective or enforceable

until the revocation period has expired;

(H) if a waiver is requested in connection with an

exit incentive or other employment termination

program offered to a group or class of employees, the

employer (at the commencement of the period specified

in subparagraph (F)) informs the individual in writing

in a manner calculated to be understood by the

aver me individual eligible to participate, as to--

G) any class, unit, or group of individuals covered

by such program, any eligibility factors for such

program, and any time lmits applicable to such

program; and

(ii) the job titles and ages of all individuals

eligible or selected for the program, and the ages of all

individuals in the same job classification § or

organizational unit who are not eligible or selected for

~ program.

) A waiver in settlement of a charge filed with the

Equal Employment Opportunity Commission, or an

action filed in court by the individual or the

individual's representative, alleging age

discrimination ne a kind prohibited under section 4 or

15 [29 USCS § 623 or 633a] may not be considered

knowing and 6 Pepe unless at a minimum--

(A) subparagraphs (A) through (FE) of paragraph (1)

have been met; and

(B) the individual is given a reasonable period of

time within which to consider the settlement

agreement.

(3) In any dispute that may arise over whether any

6la

of the requirements, conditions, and circumstances set

forth in subparagraph (A), (B), (C), (D), (EB), (F), (G), or

(H) of paragraph (1), or subparagraph (A) or (B) of

paragraph (2), have been met, the party asserting the

ralidity of a waiver shall have the burden of proving in

a court of competent jurisdiction that a walver was

knowing and voluntary pursuant to paragraph (1) or

(2).

(4) No waiver agreement may affect the

Commission's rights and responsibilities to enforce this

Act. No waiver may be used to justify interfering with

the protected right of an empioyee to file a charge or

participate in an investigation or proceeding conducted

by the Commission.

C.F.R. 1625.22

Waivers of rights and claims under the ADEA.

(a) Introduction. (1) Congress amended the ADEA in

1990 to clarify the prohibitions against discrimination

on the basis of age. In Title II of OWBPA, Congress

addressed waivers of rights and claims under the

ADEA, amending section 7 of the ADEA by adding

new subsection (f).

(2) Section 7(0(1) of the ADEA expressly provides that

waivers may he valid and enforceable under the ADEA

_ if the wi ee ris “knowing and voluntary”. Sections

f)(1) and 7(f)(2) of the ADEA set out the minimum

ibe for determining whether a waiver is

knowing and voluntary.

(3) Other facts and circumstances may bear on the

question of whether the waiver is knowing and

voluntary, as, for example, if there is a material

mistake, omission, or misstatement in the information

furnished by the employer to an employee in

connection with the waiver.

(4) The rules in this section apply to all waivers of

ADEA rights and claims, regardless of whether the

62a

eivloyee is erniployed in the private or public sector,

including employment by the United States

Government.

(b) Wording of Waiver Agreements. (1) Section

7T(DC)(A) of the ADEA provides, as part of the

minimum requirements for a knowing and voluntary

waiver, that:

The waiver is part of an agreement between the

individual and the employer that is written in a

manner calculated to be understood by such

individual, or by the average individual eligible to

participate.

(2) The entire waiver agreement must be in writing.

(3) Waiver agreements must be drafted in plain

language geared to the level of understanding of the

individual party to the agreement or individuals

eligible to participate. Employers should take into

account such factors as the level of comprehension and

education of typical participants. Consideration of

these factors usually will require the lmitation or

elimination of technical jargon and of long, complex

sentences.

(4) The waiver agreement must not have the effect of

misleading, misinforming, or failing to inform

participants and affected individuals. Any advantages

or disadvantages described shall be presented without

either exaggerating the benefits or minimizing the

limitations.

(5) Section 7(0(1)(H) of the ADEA, relating to exit

incentive or other employment termination programs

offered to a group or class of employees, also c ontains

a requirement that information be conveyed “in

writing in a manner calculated to be understood by the

average participant.” The same standards applicable

to the similar language in section 7(f)(1)(A) of the

63a

ADEA apply here as well.

(6) Section 7(9(1)(B) of the ADEA provides, as part of

the minimum requirements for a knowing and

voluntary waiver, that “the waiver specifically refers

to rights or claims under this Act.” Pursuant to this

subsection, the waiver agreement must refer to the

Age Discrimination in Employment Act (ADEA) by

name in connection with the waiver.

(7) Section 7(DQ)CE) of the ADEA requires that an

individual must be “advised in writing to consult with

an attorney prior to executing the agreement.”

)

(c) Waiver of future rights. (1) Section 7(f)(1)(C) of the

ADEA provides that:

A waiver may not be considered knowing and

voluntary unless at a minimum. .. the individual does

not waive rights or claims that may arise after the

date the waiver is executed.

(2) ‘he waiver of rights or claims that arise following

the execution of a waiver is prohibited. However,

section 7(f)(1)(C) of the ADEA does not bar, in a waiver

that otherwise is consistent with = statutory

requirements, the enforcement of agreements to

perform future employment-related actions such as the

employee's agreement to retire or otherwise terminate

employment at a future date.

(d) Consideration. (1) Section 7(f)(1)(D) of the ADEA

states that:

A waiver may not be considered knowing and

voluntary unless at a minimum * * * the individual

waives rights or claims only in exchange for

consideration in addition to anything of value to which

the individual already is entitled.

(2) “Consideration in addition” means anything of

64a

value in addition to that to which the individual is

already entitled in the absence of a waiver.

(3) If a benefit or other thing of value was eliminated

in contravention of law or contract, express or implied,

the subsequent offer of such benefit or thing of value in

connection with a waiver will not constitute

“consideration” for purposes of section 7(f)(1) of the

ADEA. Whether such elimination as to one employee

or group of employees is in contravention of law or

contract as to other employees, or to that individual

employee at some later time, may vary depending on

the facts and circumstances of each case.

(4) An employer is not required to give a person age 40

or older a greater amount of consideration than is

given to a person under the age of 40, solely because of

that person's membership in the protected class under

the ADEA.

(e) Time periods. (1) Section 7(P(1)(F) of the ADEA

states that:

A waiver may not be considered knowing and

voluntary unless at a minimum * * *

G) The individual is given a period of at least 21 days

within which to consider the agreement; or

Gi) If a waiver is requested in connection with an exit

incentive or other employment termination program

offered to a group or class of employees, the individual

is given a period of at least 45 days within which to

consider the agreement.

‘2) Section 7(f)(1)(G) of the ADEA states:

A waiver may not be considered knowing and

voluntary unless at a minimum... the agreement

provides that for a period of at least 7 days following

the execution of such agreement, the individual may

65a

revoke the agreement, and the agreement shall not

become effective or enforceable until the revocation

period has expired.

(3) The term “exit incentive or other employment

termination program” includes both voluntary and

involuntary programs.

(4) The 21 or 45 day period runs from the date of the

employer's final offer. Material changes to the final

offer restart the running of the 21 or 45 day period:

changes made to the final offer that are not material

do not restart the running of the 21 or 45 day period.

The parties may agree that changes, whether material

or immaterial, do not restart the running of the 21 or

45 day period.

(5) The 7 day revocation period cannot be shortened by

the parties, by agreement or otherwise.

(6) An employee may sign a release prior to the end of

the 21 or 45 day time period, thereby commencing the

mandatory 7 day revocation period. This is permissible

as long as the employee's decision to accept such

shortening of time is knowing and voluntary and is not

induced by the employer through fraud,

misrepresentation, a threat to withdraw or alter the

offer prior to the expiration of the 21 or 45 day time

period, or by providing different terms to employees

who sign the release prior to the expiration of such

time period. However, if an employee signs a release

before the expiration of the 21 or 45 day time period,

the employer may expedite the processing of the

consideration provided in exchange for the waiver.

(f) Informational requirements. (1) Introduction. (i)

Section 7(f)11)(H) of the ADEA provides that:

A waiver may not be considered knowing and

voluntary unless at a minimum... if a waiver is

requested in connection with an exit incentive or other

664

employment termination program offered to a group or

class of employees, the employer (at the

commencement of the period specified in subparagraph

(F)) [which provides time periods for employees to

consider the waiver] informs the individual in writing

in a manner calculated to be understood by the

average individual eligible to participate, as to—

(i) Any class, unit, or group of individuals covered by

such program, any eligibility factors for such program,

and any time limits applicable to such program; and

Gi) The job titles and ages of all individuals eligibic or

selected for the program, and the ages of all

individuals in the same job classification or

organizational unit who are not eligible or selected for

the program.

Gi) Section 7(f)(1)(H) of the ADEA addresses two

principal issues: to whom information must be

provided, and what information must be disclosed to

such individuals.

(iii)(A) Section 7(f)(1)(H) of the ADEA references two

types of “programs” under which employers seeking

waivers must make written disclosures: “exit incentive

programs’ and “other employment termination

programs.” Usually an “exit incentive program” is a

voluntary program offered to a group or class of

employees where such employees are offered

consideration in addition to a of value to which

the individuals are already entitled (hereinafter in this

section, “additional consideration”) in exchange for

their decision to resign voluntarily and sign a waiver.

Usually “other employment termination program”

refers to a group or class of employees who were

involuntarily terminated and who are offered

additional consideration in return for their decision to

sign a waiver.

(B) The question of the existence of a “program” will be

67a

decided based upon the facts and circumstances of

each case. A “program” exists when an employer offers

additional consideration for the signing of a waiver

pursuant to an exit incentive or other employment

termination (e.g., a reduction in force) to two or more

employees. Typically, an involuntary termination

program is a standardized formula or package of

benefits that is available to two or more employees,

while an exit incentive program typically is a

standardized formula or package of benefits designed

to induce employees to sever their employment

voluntarily. In both cases, the terms of the programs

generally are not subject to negotiation between the

parties.

(C) Regardless of the type of program, the scope of the

terms “class,” “unit,” “group,” “job classification,” and

“organizational unit” is aes by examining the

“decisional unit” at issue. ( See paragraph (f)(3) of this

section, “The Decisional Unit.”)

(D) A “program” for purposes of the ADEA need not

constitute an “employee benefit plan” for purposes of

the Employee Retirement Income Security Act of 1974

(ERISA y. An employer may or may not have an ERISA

severance plan in connection with its OWBPA

program.

(iv) The purpose of the informational requirements is

to provide an employee with enough information

regarding the program to allow the employee to make

an informed choice whether or not to sign a waiver

agreement.

(2) To whom must the information be given. The

required information must be given to each person in

the decisional unit who is asked to sign a waiver

agreement.

(3) The decisional unit. ()(A) The terms “class,” “unit,”

or “group” in section 7(f)(1)(H)GQ) of the ADEA and “job

68a

classification or organizational unit” in section

TMU) H)Gi) of the ADEA refer to examples of

categories or groupings of employees affected by a

program within an_- employer's _- particular

organizational structure. The terms are not meant to

be an exclusive list of characterizations of an

employer's organization.

(B) When identifying the scope of the “class, unit, or

group, and “job classification or organizational unit,”

an employer should consider its organizational

structure and decision-making process. A “decisional

unit” is that portion of the employer's organizational

structure from which the employer chose the persons

who would be offered consideration for the signing of

a waiver and those who would not be offered

consideration for the signing of a waiver. ‘he term

“decisional unit” has been developed to reflect the

process by which an employer chose certain employees

for a program and ruled out others from that program.

(ii)(A) The variety of terms used in section 7(f)(1)(H) of

the ADEA demonstrates that employers often use

differing terminology to describe their organizational

structures. When identifying the population of the

decisional unit, the employer acts on a case-by-case

basis, and thus the determination of the appropriate

class, unit, or group, and job classification or

organizational unit for purposes of section 7(f)(1)(H) of

the ADEA also must be made on a case-by-case basis.

(B) The examples in paragraph (f)(3)(i), of this section

demonstrate that in appropriate cases some subgroup

of a facility's work force may be the decisional unit. In

other situations, it may be appropriate for the

decisional unit to comprise several facilities. However,

as the decisional unit is typically no broader than the

facility, in general the disclosure need be no broader

than the facility. “Facility” as it is used throughout

this section generally refers to place or location.

However, in some circumstances terms such as

69a

“school,” “plant,” or “complex” may be more

appropriate.

(C) Often, when utilizing a program an employer is

attempting to reduce its workforce at a particular

facility in an effort to eliminate what it deems to be

excessive overhead, expenses, or costs from its

organization at that facility. If the employer's goal is

the reduction of its workforce at a particular facility

and that employer undertakes a decision-making

process by which certain employees of the facility are

selected for a program, and others are not selected for

a program, then that facility generally will be the

decisional unit for purposes of section 71H) of the

ADEA.

(D) However, if an employer seeks to terminate

employees by exclusively considering a particular

portion or subgroup of its operations at a specific

facility, then that subgroup or portion of the workforce

at that facility will be considered the decisional unit.

(E) Likewise, if the employer analyzes its operations at

several facilities, specifically considers and compares

ages, seniority rosters, or similar factors at differing

facilities, and determines to focus its workforce

reduction at a particular facility, then by the nature of

that employer's decision-making process the decisional

unit would include all considered facilities and not just

the facility selected for the reductions.

Gii) The following examples are not all-inclusive and

are meant only to assist employers and employees in

determining the appropriate decisional unit.

Involuntary reductions in force typically are structured

along one or more of the following lines:

(A) Facility-wide: Ten percent of the employees in the

Springfield facility will be terminated within the next

ten days;

70a

(B) Division-wide: Fifteen of the employees in the

Computer Division will be terminated in December;

(C) Department-wide: One-half of the workers in the

Keyboard Department of the Computer Division will

be terminated in December;

(D) Reporting: Ten percent of the employees who

report to the Vice President for Sales, wherever the

employees are located, will be terminated

immediately;

(E) Job Category: Ten percent of all accountants,

wherever the employees are located, will be

terminated next week.

(iv) In the examples in paragraph (f(3)Qii) of this

section, the decisional units are, respectively:

(A) The Springfield facility;

(B) The Computer Division:

(C) The Keyboard Department:

(D) All employees reporting to the Vice President for

Sales; and

(E) All accountants.

(v) While the particular circumstances of each

termination program will determine the decisional

unit, the following examples also may assist in

determining when the decisional unit is other than the

entire facility:

(A) A number of small facilities with interrelated

functions and employees in a specific geographic area

may comprise a single decisional unit:

(B) If a company utilizes personnel for a common

Tila

function at more than one facility, the decisional unit

for that function (i.e., accounting) may be broader than

the one facility;

(C)A large facility with several distinct functions may

comprise a number of decisional units; for example, if

a single facility has distinct internal functions with no

employee overlap (i.e., manufacturing, accounting,

human resources), and the program is confined to a

distinct function, a smaller decisional unit may be

appropriate.

(vi)(A) For purposes of this section, higher level review

of termination decisions generally will not change the

size of the decisional unit unless the reviewing process

alters its scope. For example, review by the Human

Resources Department to monitor compliance with

discrimination laws does not affect the decisional unit.

Similarly, when a regional manager in charge of more

than one facility reviews the termination decisions

regarding one of those facilities, the review does not

alter the decisional unit, which remains the one

facility under consideration.

(B) However, if the regional manager in the course of

review determines that persons in other facilities

should also be considered for termination, the

decisional unit becomes the population of all facilities

considered. Further, if, for example, the regional

manager and his three immediate subordinates jointly

review the termination decisions, taking into account

more than one facility, the decisional unit becomes the

populations of all facilities considered.

(vii) This regulatory section is limited to the

requirements of section 7(f)(1)(H) and is not intended

to affect the scope of discovery or of substantive

proceedings in the processing of charges of violation of

the ADEA or in litigation involving such charges.

(4) Presentation of information. (i) The information

72a

provided must be in writing and must be written in a

manner calculated to be understood by the average

individual eligible to participate.

(ii) Information regarding ages should be broken down

according to the age of each person eligible or selected

for the program and each person not eligible or

selected for the pregram. The use of age bands broader

than one year tek as “age 20-30”) does not satisfy

this requirement.

(iii) In a termination of persons in several established

grade levels and/or other established subcategories

within a job category or job title, the information shall

be broken down by grade level or other subcategory.

(iv) If an employer in its disclosure combines

information concerning both voluntary = and

involuntary terminations, the employer shall present

the information in a manner that distinguishes

between voluntary and involuntary terminations.

(v) If the terminees are selected from a subset of a

decisional unit, the employer must still disclose

information for the entire population of the decisional

unit. For example, if the employer decides that a 10%

RIF in the Accounting Department will come from the

accountants whose performance is in the bottom

one-third of the Division, the employer still must

disclose information for all employees in the

Accounting Department, even those who are the

highest rated.

(vi) An involuntary termination program in a

decisional unit may take place in_- successive

increments over a period of time. Special rules apply to

this situation. Specifically, information supplied with

regard to the involuntary termination program should

be cumulative, so that later terminees are provided

ages and job titles or job categories, as appropriate, for

all persons in the decisional um t at the beginning of

73a

the program and all persons terminated to date. There

is no duty to supplement the information given to

earlier terminees so long as the disclosure, at the time

it is given, conforms to the requirements of this

section.

(vii) The following example demonstrates one way in

which the required information could be presented to

the employees. (This example is not presented as a

prototype notification agreement that automaticaily

will comply with the ADEA. Each information

disclosure must be structured based upon the

individual case, taking into account the corporate

structure, the population of the decisional unit, and

the requirements of section 7(f)(1)(H) of the ADEA):

Example: Y Corporation lost a major construction

contract and determined that it must terminate 10% of

the employees in the Construction Division. Y decided

to offer all terminees $20,000 in severance pay in

exchange for a waiver of all rights. The waiver

provides the section 7HC)(H) of the ADEA

information as follows:

(A) The decisional unit is the Construction Division.

(B) All persons in the Construction Division are

eligible for the program. All persons who are being

terminated in our November RIF are selected for the

program.

(C) All persons who are being offered consideration

under a waiver agreement must sign the agreement

and return it to the Personnel Office within 45 days

after receiving the waiver. Once the signed waiver is

returned to the Personnel Office, the employee has 7

days to revoke the waiver agreement.

(D) The following is a listing of the ages and job titles

of persons in the Construction Division who were and

were not selected for termination and the offer of

consideration for signing a waiver:

74a

Job Title No. Selected No. not

selected

(1) 25 ‘ 48

Mechanical

Engineers, I

(2)

Mechanical

Engineers, IJ

Etc., for all

ages

(3) 21

Structural

Engineers, I

Etc., for all

ages

(4) 23

Structural

Engineers, II

Ietc., for all

ages

(5) 26

Purchasing

Agents

Etc., for all

ages

(gy) Waivers settling charges and lawsuits. (1) Section

75a

7(f)(2) of the ADEA provides that:

A waiver in settlement of a charge filed with the Equal

Employment Opportunity Cominission, or an action

filed in court by the individual or the individual's

representative, alleging age discrimination of a kind

prohibited under section 4 or 15 may not be considered

knowing and voluntary unless at a minimum—

(A) Subparagraphs (A) through (E) of paragraph (1)

have been met; and

(B) The individual is given a reasonable period of time

within which to consider the settlement agreement.

(2) The language in section 7(f)(2) of the ADEA,

“discrimination of a kind prohibited under section 4 or

15” refers to allegations of age discrimination of the

type prohibited by the ADEA.

(3) The standards set out in paragraph (f) of this

section for complying with the provisions of section

7(f)(1) (A)-(E) of the ADEA also will apply for purposes

of complying with the provisions of section 7(f)(2)(A) of

the ADEA.

(4) The term “reasonable time within which to consider

the settlement agreement” means reasonable under all

the circumstances, including whether the individual is

represented by counsel or has the assistance of

counsel.

(5) However, while the time periods under section

7(f)(1) of the ADEA do not apply to subsection 7(f)(2) of

the ADEA, a waiver agreement under this subsection

that provides an employee the time periods specified in

section 7(f)(1) of the ADEA witi be considered

“reasonable” for purposes of section 7(f)(2)(B) of the

ADEA.

(6) A waiver agreement in compliance with this section

76a

that is in settlement of an EEOC charge does not

require the participation or supervision of EEOC.

(h) Burden of proof. In any dispute that may arise over

whether any of the requirements, conditions, and

circumstances set forth in section 7(f) of the ADEA,

subparagraph (A), (B), (C), (D), (E), (F), (G), or (H) of

aragraph (1), or subparagraph (A) or (B) of paragraph

2), have been met, the party asserting the validity of

a waiver shall have the burden of proving in a court of

competent jurisdiction that a waiver was knowing and

voluntary pursuant to paragraph (1) or (2) of section

7(f) of the ADEA.

(i) EEOC's enforcement powers. (1) Section 7(f)(4) of

the ADEA states:

No waiver agreement may affect the Commission's

rights and responsibilities to enforce [the ADEA]. No

waiver may be used to justify interfering with the

protected right of an employee to file a charge or

participate in an investigation or proceeding conducted

by the Commission.

(2) No waiver agreement may include any provision

prohibiting any individual from:

(i) Filing a charge or complaint, including a challenge

to the validity of the waiver agreement, with EEOC, or

(ii) Participating in any investigation or proceeding

conducted by EEOC.

(3) No waiver agreement may include any provision

imposing any condition precedent, any penalty, or any

other limitation adversely affecting any individual's

right to:

G) File a charge or complaint, including a challenge to

the validity of the waiver agreement, with EEOC, or

Jia

Qi) Participate in any investigation or proceeding

conducted by EEOC.

(j) Effective date of this section. (1) This section is

effective July 6, 1998.

(2) This section applies to waivers offered by employers

on or after the effective date specified in paragraph

(j)(1) of this section.

(3) No inference is to be drawn from this section

regarding the validity of waivers offered prior to the

effective date.

(k) Statutory authority. The regulations in this section

are legislative regulations issued pursuant to section

9 of the ADEA and Title II of OWBPA.

[63 FR 30628, June 5, 1998]

78a

APPENDIX F

XEROX Name: Ken Pietrowski

Employee # 007103

SSN:

Xerox Innovation Group

VOLUNTARY REDUCTION IN FORCE

REQUEST TO PARTICIPATE & GENERAL RELEASE

Request to Participate

I hereby request to participate in the Voluntary

Reduction in Force Program (“VRIF”) as

described in the 2005 Xerox Innovation Group

Voluntary Reduction in Force Employee Fact

Sheet, dated October 24, 2005 (the “Fact

Sheet”). My decision to apply is voluntary and

I have not been pressured into it. I have

carefully reviewed and understand the Fact

Sheet, and agree to all its terms and conditions.

I have not relied on any oral representation,

promises or agreements of any kind in

connection with my decision to apply to

participate in the VRIF.

General Release

In consideration of Xerox Corporation’s

(“Xerox”) agreement to provide me with salary

continuance (per the terms of the VRIF

Employee Fact Skeet provided to me) and other

valuable consideration, I release Xerox from all

the claims described in this Release. For

purposes of this Release, “Xerox” includes it

employees, directors, officers, agents,

stockholders, subsidiaries, affiliates, successors,

assigns, and the Xerox employee benefit plans

in which I either an now or have been a

participant, and the trustees, administrators,

successors, agents and assigns of those plans.

79a

3. I release Xerox from any and all claims, even if

I don’t know about the claim at this time, based

on anything that has occurred prior to the date

I sign this Release. For example, I release

Xerox from any claims based on all laws, such

as the following (all laws as _ currently

amended):

Age Discrimination and Equal Pay Act of 1963

Employment Act of 1967

(ADEA)

Older Workers’ Benefits Fair Labor Standards Act of

Protection Act of 1999 1938

(OWBPA)

title VII of the Civil Rights Employee Retirement

Act of 1964 income Security Act of 1974

Civil Rights Acts of 1866, Worker Adjustment and

1870, 1871 and 1991 Retraining Notification Act

of 1989

Americans with Disabilities | Uniformed Services

Act of 1990 Reemployment Rights Act

of 1994

Rehabilitation Act of 1973 Vietnam Era Veteran’s

Readjustment Assistance

Act of 1974

Family and Medical Leave

Act of 1993

4. I also release Xerox from .laims based on the

laws of the state(s) where I am employed and

reside, such as state fair employment practice

laws or any other law, whether federal, state or

local, concerning employment. I release Xerox

from claims based on discrimination in

employment such as claims arising out of the

offer of employment to me by Xerox, the hiring

80a

of me by Xerox, any employment contract

between Xerox and me, any promises made by

Xerox regarding future employment, or based

on the termination of my employment. Finally,

I also release Xerox from claims under state

contract or tort law, and from all claims for

punitive or compensatory damages, costs or

attorney’s fees.

I acknowledge and agree that the consideration

set forth in this Release is in addition to

anything of value to which | am entitled by law

or Xerox policy.

I understand and agree that this Release and

Xerox’s agreement to provide consideration to

me should not be construed, in any way, as an

admission by Xerox of any wrongdoing or

hability to me.

KP

Please initial page 1 here

Page 1 of 2

General Release

Revised October 24, 2005

10.

a1.

8la

J understand that nothing set forth in this

Release limits my right to file, or prevents me

from filing, a charge or complaint with the

EEOC or any comparable state agency, nor does

anything in this Release limit my right to

participate in an investigation or proceeding

conducted by the EEOC or any comparable state

agency.

I understand that nothing in this Release limits

my right to challenge this Release as not being

knowing and voluntary under the ADEA or the

OWBPA if I feel this Release does not comply

with the requirements of those statutes.

Except as provided in paragraphs 7 and 8

above, however, I agree that I will not file or

pursue any charge or claim with any

governmental agency or any court against Xerox

based on anything that occurred before I signed

this Release. If I do not comply with my

obligations under this paragraph, I shail repay

to Xerox upon demand all of the monies paid to

me by Xerox as_ salary continuance in

consideration for this Release, and I agree to

pay all of Xerox’s costs and expenses in

defending the claim or action, including Xerox’s

reasonable attorney’s fees.

I understand and acknowledge that Xerox policy

provides that for a period of one year after the

termination of my employment with Xerox, I am

not eligible for rehire as an employee, or for

retention as a contract worker or consultant.

Xerox advises me:

° TO CONSULT WITH AN ATTORNEY

OF MY CHOOSING TO COUNSEL ME

AS TO MY RIGHTS BEFORE i SIGN

THIS RELEASE;

82a

TO TAKE SUFFICIENT TIME TO

DECIDE WHETHER TO SIGN THIS

RELEASE. I HAVE 45 DAYS FROM

THE DATE THIS RELEASE IS

PROVIDED TO ME TO CONSIDER IT

BEFORE I SIGN AND RETURN IT TO

XEROX;

THAT EVEN AFTER I SIGN AND

RETURN THIS RELEASE TO XEROX,

I WILL HAVE 7 DAYS THEREAFTER

TO CHANGE MY MIND AND REVOKE

MY RELEASE BY ASKING XEROX

FOR ITS RETURN.

I understand and agree that this Release waives

all claims I may have at the time I sign it,

including claims I do not then know about or

suspect. I further understand and acknowledge

that California Civil Code, Section 1542

provides: “A GENERAL RELEASE DOES NOT

EXTEND TO CLAIMS WHICH THE

CREDITOR DOES NOT KNOW OR SUSPECT

EXIST IN HIS FAVOR AT THE TIME OF

EXECUTING THE RELEASE, WHICH IF

KNOWN BY HIM MUST HAVE MATERIALLY

AFFECTED HIS SETTLEMENT WITH THE

DEBTOR.” I waive any rights I may have

under that Code section, if applicable, or any

other similar state or federal statute or common

law principle of simular effect.

Date Release provided to employee: October 24, 2005

Date signed and returned to Xerox: November 23, 2005

By:_s/ Kenneth W. Pietrowski

Employee signature

Kenneth W. Pietrowski

Employee Name (Please print)

%3a

007103

Xerox Employee Number

General Release

Revised October 24, 2005

84a

APPENDIX G

The Economic Slowdown's Impact on Middle-Aged

and Older Americans

Research Report

Jeffrey Love, Ph.D., AARP Knowledge Management

Gerard Rainville, AARP Knowledge Management

June 2008

AARP commissioned a nationwide survey to determine

how people age 45 and older are responding to the

current economic slowdown. The survey asked a

nationally representative sample of 45+ Americans,

including an oversample of Hispanic Americans, for

their assessments of the economy's condition, whether

they have taken actions in response to the changing

economy, and if they felt enough was being done to

address economic problems. Results show that a

majority of respondents believe the economy is in bad

shape and that many have adapted their behaviors in

response to the floundering economy.

Survey findings include:

* Eighty-one percent of all respondents, and 86% of

Hispanic respondents, say the economy is in fairly bad

or very bad condition. A similar percentage feel the

economy is getting worse.

* Over one-fourth of all respondents, and 41% of

Hispanic respondents, said they are having trouble

paying their mortgage or rent and one-third have

stopped putting money into their retirement accounts.

More than one-fourth of all workers and Hispanic

workers ages 45+ have postponed plans to retire.

* As the economy slows and prices rise, most

middle-aged and older respondents, including Hispanic

respondents, report that they are having difficulty

8Sa

paying for food, gas, utilities, and medicine, and are

responding to the situation by cutting luxuries and

postponing major purchases and travel.

* Respondents age 65 and over were less likely =

those ages 45-64 to report having taken steps to cop

with a slowing economy or increasing prices as a veal

of the recent economic slowdown. This does not

indicate that the older population is better off

financially. Rather, the data suggest that the 65 and

over group had, even prior to the economic downturn,

been forced to adjust their spending habits because of

their work status, fixed income, and rising costs.

This study is based on a national telephone survey of

1,002 adults ages 45 and older who were currently

working, looking for work, or retired. This sample was

then boosted to obtain additional interviews with

Hispanics, producing an oversample of 400 Hispanics

ages 45 and older. The interviews were conducted in

English by Woelfel Research, Inc. from April 12 to

April 23, 2008. The results are weighted by age and

gender. For additional information about the national

survey, contact Jeffrey Love, Director of Strategic

Issues Research, at 202-434-6279. For information on

the Hispanic survey, contact Gerard Rainville at

202-434-6295.

86a

APPENDIX H

Excerpts from Appellants’ Brief

07-0418-cv

United States Court of Appeals

for the

Second Circuit

Paul J. Frommert, Alan H. Clair, Donald S. Foote,

Thomas I. Barnes, Ronald J. Campbell, Frank D.

Commesso, William F. Coons, James D. Gagnier,

Brian L. Gaita, Wiliam J. Ladue, Gerald A. Leonardo

Jr., Frank Mawdesley, Harold S. Mitchell, Walter J.

Petroff, Richard C. Spring, Patricia M. Johnson, F.

Patricia M. Tobin, Nancy A. Revella, Anatoli G.

Puschkin, William R. Plummer, Michael J. McCoy,

Larry J. Gallagher, Napoleon B. Barbosa, Alexandra

Spearman Harrick, Janis A. Edelman, Patricia H.

Johnston, Kenneth P. Parnett, Joyce D. Cathcart,

Floyd Swaim, Julie A. McMillan, Dennis E. Baines,

Ruby Jean Murphy, Matthew D. Alfieri, Kathy Fay

Thompson, Mary Beth Allen, Craig R. Spencer, Linda

S. Bourque, Thomas Michael Vasta, Frank C. Darling,

(Caption continued on inside cover.)

ON APPEAL FROM THE UNITED STATES

DISTRICT COURT FOR THE WESTERN

DISTRICT OF NEW YORK

APPELLANTS’ BRIEF

8/a

NIXON PEABODY, LLP

Attorneys for Defendants

Appellants

Margaret A. Clemens, of Counse/

Clinton Square

P.O. Box 31051

Rochester, New York 14603-1051

(585) 263-1000

litigation. (Wd.) The inclusion of the “any and all

claims” language in the release, as well as these facts,

demonstrate that those appellees who chose to sign the

releases were fully aware that the release language at

issue was intended to include appellees’ disputed

claims to a recalculation of benefits. There was no

need to include, as the District Court suggests, a

specific reference appellees’ agreement to waive their

disputed ERISA claim asserted in this case. (SPA-31).°

° As the District Court pointed out, a few individuals modified

the releases to exclude the claims asserted in “Frommert v.

Conkright”, and they submitted those altered releases in

exchange for salary continuance payments. To the extent that

the releases are otherwise deemed to be enforceable on this

appeal, appellees will withdraw their objections with respect to

these few individuals since Xerox, however, inadvertently,

accepted the releases with the carve out.

XEROX

MEMORANDUM

To

Frances Tobin

Subject

VRIF Request

Protect

until

From :

Forever

Mary Ann Mannix

Mer., HR Operations, XNA

Program &

Communications

XRX2 - 027: 8*223-1168

Date

August 08, 2006

This confirms receipt of your August 7, 2006 request to

participate in the NAAO Voluntary Reduction in Force

program.

We are unable to accept your application with the

change you added to the bottom of page 2 of the

Request to Participate and General Release. If you

choose, you may resubmit your request without this

change prior to the close of the application window at

3:00 p.m. Central time on Thursday, August 24, 2006.

<Original signed by Mary Ann Mannix>

Copy:

F. Tobin File

R. Vescovacci

VRIF Coordinator

90a

APPENDIX J

XEROX Xerox Retirement Income

Guarantee Plan

Pension Calculation

Statement

Statement Date 01-31-2006

OOOO13

Kenneth W. Pietrowski

28 Pine Brooke Circle

Penfield NY 14526

Your estimated pension benefit was calculated based

on the information listed below and your earnings,

service, and investment results as of January 30, 2006.

Changes in earnings, service, investment performance,

pension payment start date, bencficiary designation,

or other factors could cause a difference in the actual

benefit you receive. Prior distributions due _ to

termination or a Qualified Domestic Relations Order

will reduce the benefit payable to you.

Your pension benefit was calculated based on the

information listed below. Please review this

information carefully.

Your Personal Information

Birth Date 08-26-1942

Original Lire Date 08-12-1963

Your Assumptions

Last Day of Employment 11-30-2006

RIGP Pension Payment Start Date 12-01-2006

Age at RIGP Pension

Payment Start Date (in years) 64.333333

91a

Pension: Calculation Statement, Page 2.

Your Pension Benefit Calculation Components

Vesting Service (in years) 43.000000

Benefit Service (in years) 41.500000

Monthly Final Average Pay $12,057.79

For more detail on the benefit formulas, refer to your

Summary Plan Description, "You and Xerox," as

provided by the Xerox Benefits Center

Benefit Formulas

Your monthly 50% Joint and Survivor Annuity

retirement benefit is calculated as the greatest of the

following formulas:

* 1.0% times Final Average Pay times Benefit Service

* 1.4% times Final Average Pay times Benefit Service

(up to 30 years)

* Cash Balance Retirement Account (CBRA) converted

to an annuity

* Transitional Retirement Account (TRA) converted to

an annuity

Pension Calculation Statement, Page 3

Benefit Comparison

9

?

ae

a

Benefit Monthly Monthly Lump Sum

Formula 50% Joint 50% Joint at Pension

and and Payment

Survivor Survivor Start Date

Annuity at Annuity at

Norma! Pension

Retirement Payment

Age Start Date

1.4% $5,064.27 $5,064.27 $832,626.09

Formula

Benefit

1.0% $5,003.98 $5.003.98 $822,713.69

Formula

Benefit

CBRA N/A $3,173.48 $521,757.67

Benefit

TRA Benefit N/A $4,767.16 $783,776.89

Your benefit is calculated by determining the largest

total benefit in the first column above and then

subtracting the prior distribution in the second column

from that amount. Because the 1.4% or 1.0% Formula

Benefit produced the largest total benefit, the prior

distribution from the next largest benefit (either from

CBRA or TRA) is subtracted to arrive at the amount

payable.

Because you received a prior distribution, your

monthly pension benefit will be reduced by the present

value of the prior distribution. Therefore, your

monthly 50% Joint and Survivor Annuity at the

pension payment start date 1s $319.99.

93a

Offset of Prior Distribution

Benefit Formula Lump Sum at Offset of Prior i”

Pension Payment | Distribution

Start Date

1.4% Formula $832,626.09 $735,536.65

Benefit

1.0% Formula $822,713.69 $735,536.65

Benefit

CBRA Benefit $521,757.67 $373,257.44

TRA Benefit $783,776.89 $735,536.65

=

94a

Pension Calculation Statement, Page 4.

CBRA/TRA Payment Option Information

Following is a hist of CBRA/TRA payment options that

are available to you based on the assumptions you

entered on January 30, 2006.

The Single Life Annuity is the automatic payment

form if you're single, unless you elect a different

payment option. The 50% Joint and Survivor Annuity

is the automatic payment form if you're married,

unless you elect a different payment option and your

spouse consents.

Your actual CBRA or TRA Benefits will be converted

to the monthly annuity options listed below based on

the interest rate in effect on your pension payment

start date. If the interest rate at the time your

payment begins is different from the current rate, your

monthly annuity options may be higher or lower than

the amounts shown below.

Please note that current interest rates have been used

for determining the lump sum value of your formula

benefits. These interest rates change annually

effective January I of each year.

95a

Pension Calculation Statement, Page 5

Your CBRA/TRA Payment Options

Payments as of

December 1, 2006

Payable to You

Payable to Your

Beneficiary Upon

Your Death

LumpSum

This option is a

one-time

payment.

$48,240.24

$0.00

Single Life

Annuity

$319.99

$0.00

Single Life

Annuity with

Cash Refund

$294.43

$0.00

50% Joint and

Survivor Annuity

$293.41

$146.71

50% Joint and

Survivor Annuity

with Cash Refund

$292.19

$146.10

50 % Last

Survivor Annuity

If your beneficiary

dies, your

paymenv/or life

will be-

$316.21

$158.11

$158.11

100% Joint and

Survivor Annuity

$270.95

100% Joint and

Survivor Annuity

with Cash Refund

$269.96

100% Last

Survivor Annuity

If your beneficiary

dies, your

payment/or life

will be:

$270.95

$270.95

$0.00

5- Year Certain

and Life Annuity

If you die after

receiving 3 years

of payments, no

benefit would be

payable to your

beneficiary.

$316.57

$316.57

10- Year Certain

and Life Annuity

If you die after

receiving 10 years

of payments, no

benefit would be

payable to your

beneficiary.

$307.86

$307.86

15- Year Certain

and Life Annuity

If you die after

receiving 15 years

of payments, no

benefit would be

payable to your

beneficiary

$295.61

$295.61

Q7a

20- Year Certain

and Life Annuity

If you die after

receiving 20 years

of payments, no

benefit would be

payable to your

beneficiary.

$280.18 $280.18

98a

Pension Calculation Statement, Page 6.

Excess Benefit Payment Option Information

In addition to the CBRA/TRA Benefit, you are also

entitled to receive an Excess Benefit.

Following is a list of Excess Bencfit payment options

that are available to you based on the assumptions you

entered on January 30, 2006.

The Single Life Annuity is the automatic payment

form if you're single, unless you elect a different

payment option. The 50% Joint and Survivor Annuity

is the automatic payment form if you're married,

unless you elect a different payment option and your

spouse consents.

99a

Pension Calculation Statement, Page 7

Your Excess Benefit Payment Options

Payments as of Payable to You Payable to Your

December 1, 2006 Beneficiary Upon

Your Death

Lump Sum $48,849.20 $0.00

This option is a

one-time

payment.

Single Life $270.54 $0.00

Annuity

Single Life $248.94 $0.00

Annuity with

Cash Refund

50% Joint and $297.12 $148.56

Survivor Annuity

50% Joint and $295.89 $147.95

Survivor Annuity

with Cash Refund

50 % Last $320.21 $160.11

Survivor Annuity

/f your beneficiary

dies, your

payment/or life $160.11 $0.00

will be:

100% Joint and $274.39 $274.39

Survivor Annuity

100% Joint and $273.38 $273.38

Survivor Annuity

with Cash Refund

100a

100% Last

Survivor Annuity

lf your beneficiary

dies, your

payment/or life

will be:

274.39

$274.39

$274.39

5- Year Certain

and Life Annuity

If you die atter

receiving 5 years

of payments, no

benefit would be

payable to your

beneficiary.

$267.66

10- Year Certain

and Life Annuity

If you die after

receiving 10 years

of payments, no

benefit would be

payable to your

beneficiary.

$260.28

$260.28

15- Year Certain

and Life Annuity

If you die after

receiving 15 years

of payments, no

bencfit would be

payable to your

beneficiary.

$249.93

$249.93

10la

20- Year Certain

and Life Annuity

Tf you die after

receiving 20 years

of payments, no

benefit would be

payable to your

beneficiary.

$236.89

$236.89

102a

Pension Calculation Statement, Page 8

If You're Planning to Start Your Payments Soon

Notify the Xerox Benefits Center

Please notify the Xerox Benefits Center 45 to 90 days

before the date you want your pension payments to

start.

For More Information

If you need additional information, access the Your

Benefits Resources Web site at

http://resources.hewitt.com/xerox or call the Xerox

Benefits Center toll-free at 1-888-979-9961.

Benefits Center Representatives are available between

9 a.m. and 6 p.m., Eastern time, Monday through

Friday. The automated telephone system is available

24 hours a day Monday through Saturday and after 1

p.m. Eastern time, on Sunday. For TTY, contact your

local relay service.

Your Benefits Resources is a trademark of Hewitt

Management Company LLC.