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ISAACS v. CATERPILLAR

September 27, 1988

RAY E. ISAACS, ET AL., PLAINTIFFS,
v.
CATERPILLAR, INC., DEFENDANT.



The opinion of the court was delivered by: Mihm, District Judge.

MEMORANDUM OPINION

On June 21, 1988, this Court conducted oral argument on Plaintiffs' Motion to Dismiss Defendant's Counterclaim. At that time, the Court orally granted said Motion, and indicated that a written order would follow. This is that order.

A.  FINDINGS OF FACT

1. This is a lawsuit filed under the Age Discrimination in Employment Act ("ADEA") by a group of former employees of Caterpillar, Inc. Plaintiffs allege that their jobs were targeted for elimination by Caterpillar on the basis of their age and that they were in effect forced to retire or otherwise to terminate their employment by Caterpillar. Among other things, Plaintiffs allege that purported releases were obtained from them in the course of securing their departure from Caterpillar's employment. Plaintiffs allege on various factual and legal grounds that these releases are of no legal effect. Their complaint affirmatively asks this Court to invalidate these purported releases.

2. Caterpillar has filed a Counterclaim alleging that the releases are valid, and that by filing this lawsuit the Plaintiffs have breached the contract with Caterpillar allegedly embodied in these releases. The Counterclaim asserts that this alleged breach has damaged Caterpillar at least in the amount of the special payments that have been rendered to Plaintiffs pursuant to the "Statements" that contain the release language. Each Plaintiff signed such a Statement at the time of his or her departure from Caterpillar's employment. Caterpillar's Counterclaim asks that the Court award it damages against each Plaintiff for breach of contract in the amount of all payments previously made under the terms of these "Statements;" that the Court declare that Caterpillar need make no future payments under those Statements; and that the Court award Caterpillar the fees and costs incurred in defending this litigation.

3. Plaintiffs have moved to dismiss the Counterclaim pursuant to F.R.Civ.P. 12(b)(6) for failure to state a claim on which relief can be granted.

4. At the time of their separation from the Company, each Plaintiff received certain financial benefits. At the same time, each Plaintiff signed a purported release, relied on by Caterpillar as the heart of their Counterclaim, which reads as follows:

  In consideration of receiving the special
  arrangement as described above, I release and
  forever discharge Caterpillar, Inc., and its
  subsidiaries, of and from any and all claims,
  causes of action, damages and liabilities whether
  or not known, suspected or claimed by me which I
  may have relating to my retirement from active
  employment or which are related to any act,
  course or thing which could have been alleged in
  any action based upon such employment.

5. Caterpillar's Counterclaim does not assert that Plaintiffs have filed their complaint in bad faith, or that Plaintiffs' attack on the validity of the releases is made in bad faith. Neither has Caterpillar made any such assertion in the brief it has filed defending its Counterclaim.

6. The Court has reviewed the thorough briefs filed by the parties on this motion and heard extensive oral argument on June 21, 1988.

B.  CONCLUSIONS OF LAW

1. This Court has jurisdiction of Caterpillar's Counterclaim pursuant to F.R.Civ.P. 13(a). The Counterclaim is clearly a "compulsory counterclaim" within the meaning of that rule and the cases interpreting it. Accordingly, no independent basis of federal jurisdiction is required to support it.

2. For purposes of this Motion to Dismiss, it is assumed that the facts asserted in Defendant's Counterclaim are true. Powe v. City of ...


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