On May 24, 2007, 5 former employees of PPG Industries, Inc., filed this federal suit in the Western District of Pennsylvania, seeking individual relief, class action status for similarly situated former employees (40 years of age or older), and collective action remedies (see 29 U.S.C. §216(b)) for alleged violation of the Age Discrimination in Employment Act (ADEA) and the Employee Retirement Income Security Act of 1974 (ERISA). Plaintiffs sought injunctive and monetary relief in the form of attorney fees, damages with interest for lost earnings and benefits, liquidated damages (under the ADEA), and an injunction against PPG's discriminatory termination of employment. The plaintiffs alleged as follows.
The complaint alleged that a new CEO had pursued aggressive cost-cutting through "reductions in force" (RIF), which in the context of comments he made about older employees caused the idea that older employees were not pulling their weight and needed to be removed to percolate down through the ranks of management. Management then engaged in pervasive age discrimination in firing older employees and replacing them with new ones. PPG's methods included immediate firing without notice or opportunity for correction, fabrication of poor performance reviews to use as leverage during firings, and offering "retirement packages" that were exactly the same as the offers for other terminated employees. The firings took place without explanation or with the explanation that they were corporate downsizing. Although at first younger employees were immediately assigned to the older employee's position, PPG eventually sought to disguise its behavior by delegating the work out to multiple younger employees and then later filling the position under a new title. PPG sometimes hired back the exact same employees to do the same work on a contract rather than salaried basis. Plaintiffs alleged that Defendant engaged in these discriminatory practices for at least a decade.
Plaintiffs filed an amended complaint on August 7, 2007, that elaborated on the allegations of the first complaint and clarified the legal basis for the suit. Most notable among the added facts were the following: that PPG had moved from an objective, numerical system of performance review to a subjective, non-numerical system susceptible to manipulation and inconsistency; that PPG violated its written policy of reinstating, retraining, or relocating employees terminated as part of an RIF when positions became available; and that PPG violated its written policy of performing a disparate impact analysis of RIFs. Plaintiffs divided the counts into a collective action for disparate treatment under the ADEA, a collective action for disparate impact under the ADEA, and a class action under ERISA. Because of differing legal standards for collective actions and class actions and the similarity in available relief, Plaintiffs later withdrew the Erisa count (October 16, 2007).
On September 10, 2007, PPG filed a counterclaim for breach of contract, claiming that release agreements included in the severance packages barred the Plaintiffs and similarly situated employees from filing suit and entitled PPG to repayment of the severance pay and to attorney fees. Plaintiffs attempted to amend their complaint to add retaliation under the ADEA on the ground that PPG's counterclaim was improper because the agreements were legally unenforceable, but the Court (Judge Arthur J. Schwab) rejected the amendment on timeliness grounds (November 26, 2007). On May 6, 2008, Plaintiffs filed their retaliation claims as a separate lawsuit (docket: 08-cv-00616), which was consolidated into this case on June 18, 2008.
On February 26, 2009, adopting the recommendations of Special Master Kevin Lucas, the Court held, among other things, that the releases were unenforceable and barred the Defendant from pursuing a breach of contract claim. 2009 WL 596014 (W.D. Pa. 2009). The next day, contrary to the Special Master's recommendation (2009 WL 579234 (W.D.Pa. 2009)), the Court restricted the Plaintiffs' case to claims that accrued on or after December 31, 2005. 2009 WL 501907 (W.D. Pa. 2009). On March 24, 2009, the Court denied Plaintiffs' requests for attorney fees for the ADEA claims as premature and for the counterclaim issue over the releases. 2009 WL 792909 (W.D. Pa. 2009). In accordance with the Court's decision on the counterclaim, Defendant filed an amended counterclaim for promissory estoppel and unjust enrichment, seeking the difference between the severance actually paid and what would have been paid without the release (June 30, 2009).
The case continued with significant discovery disputes. The parties participated in mediation from October 23, 2007, through September 16, 2009, but did not reach a settlement. Eventually, though, the parties did reach a settlement, and on November 20, 2009, the Court approved the settlement. Because the settlement is private and not a consent decree, its exact terms are not available. The parties indicated that the settlement involved no non-monetary relief and no terms that required continued court supervision. The parties stipulated to the settlement class as the 58 former PPG employees who filed a consent to join and stipulated that the named plaintiffs were authorized to settle on behalf of all. The Court approval order awarded legal costs to the parties according to the terms of the settlement but did not indicate whether the settlement actually shifted the costs in any way. The order dismissed the claims and counterclaims with prejudice. It also left open the option to reinstate the docket if proceedings related to the settlement should become necessary. The case is closed.Kenneth Gray - 06/18/2013