The opinion of the court was delivered by: Mihm, District Judge.
A. Proceedings to Date in the Litigation
1. This lawsuit is brought by certain former management employees of
Defendant Caterpillar, Inc. Plaintiffs are persons who retired or were
separated from Caterpillar at various times between July 1985 and May
1987. The Plaintiffs allege that Caterpillar engaged in a pattern or
practice of coercing older management employees into retiring or
separating from employment on account of their age, in violation of the
Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq.
("ADEA"). The Defendant denies any wrongdoing. The complaint discloses
that each Plaintiff, at the time of retirement or separation, signed a
"Statement" that listed certain benefits to be paid to the Plaintiffs and
including, among other provisions, language purporting to be a release.
The complaint affirmatively alleges a number of legal and factual grounds
why these "Statements" were insufficient to act as a release of
Plaintiffs' ADEA claims.
2. The lawsuit was filed May 9, 1988, by 32 Plaintiffs. Over
Caterpillar's objection, Plaintiffs sent a Court-approved notice to the
class defined in the complaint, informing class members of the lawsuit
and their right to join in by filing consents pursuant to the opt-in
mechanism of ADEA class actions. In response to this notice, a number of
additional Plaintiffs joined this suit. Two such Plaintiffs subsequently
voluntarily dismissed their claims. The present total of Plaintiffs in
the case is 70.
3. On May 31, 1988, Caterpillar filed its answer and counterclaim. The
counterclaim, asserted against all Plaintiffs, asserted that the release
language in the "Statements" constituted a contract not to file an ADEA
lawsuit challenging those terminations. The counterclaim asserted that
the filing of this lawsuit constituted a breach of that contract. As
damages for this alleged breach, this counterclaim sought (a) the return
of the benefits listed in the "Statements," (b) a declaration that
Caterpillar was not required to make further payments called for by the
"Statements," and (c) the attorney's fees and costs spent by Caterpillar
to defend against this litigation.
4. On motion by the Plaintiffs, this Court dismissed the counterclaims
on September 3, 1988 for failure to state a claim on which relief could
be granted. Isaacs v. Caterpillar, 702 F. Supp. 711 (C.D.Ill. 1988).
5. Following the dismissal of the counterclaims, and upon completion of
the process of allowing class members to join the lawsuit, the parties
engaged in intensive discovery.
6. In September of 1989, Plaintiffs moved the Court to hold a "test
case" trial. This motion contemplated trial of a selected group of
Plaintiffs' cases as a means to promote the expeditious resolution of the
entire litigation. The Court granted this motion and held further
proceedings to determine the number and identities of the "test case"
Plaintiffs. The Court determined that the test case would consist of
trying twelve Plaintiffs' claims. The Court designated the organizational
areas from which the Plaintiffs would be chosen, and ordered the parties
to make alternating selections. The parties chose the test-case
Plaintiffs on May 31, 1990, and the Court set a trial date of January
7. On August 27, 1990, the Equal Employment Opportunity Commission
(EEOC) was granted leave to intervene as an additional party Plaintiff.
Caterpillar answered the EEOC's complaint on September 10, 1990.
8. A series of discovery disputes during the summer of 1990, including
the production by Caterpillar in August 1990 of a large number of
important documents that should have been produced at the start of the
lawsuit, led to a motion by Plaintiffs for sanctions and to continue the
trial date. The Court granted Plaintiffs' motion on October 1, 1990. The
Court continued generally the proceedings to quantify the sanctions
award, and reset the trial date to May 6, 1991.
9. Following this ruling of October 1, 1990, the parties prepared
intensively for trial. Document production continued, and more than 60
depositions were taken, including several depositions in Florida,
Mississippi, and Missouri. The parties prepared a voluminous pretrial
order, and a final pretrial conference was held on April 24, 1991.
10. On April 23, 1991, one day before the scheduled final pretrial
conference and 13 days before the scheduled trial date, Caterpillar filed
a motion for summary judgment. The motion asserted that Plaintiffs'
claims are barred as a matter of law because they had "ratified" the
release language contained in the "Statements" they had signed by failing
to tender to Caterpillar, at the outset of this litigation, the
consideration listed in the "Statements." This matter will be henceforth
referred to as the "tender/ratification argument."
11. Until it filed this motion for summary judgment, Caterpillar had
never specifically raised the tender/ratification argument, whether
formally or informally, in any motion, Court hearing, or other paper
filed with the Court.
12. Caterpillar's answers in this litigation contain affirmative
defenses based on the release language in the "Statements." In its answer
of May 31, 1988, to the private Plaintiffs' complaint, Caterpillar's
third affirmative defense reads, in its entirety:
The claims of each of the Plaintiffs are barred by
full and complete releases knowingly and voluntarily
executed by each Plaintiff in exchange for valid
Caterpillar's answer to the EEOC's complaint contains a first affirmative
defense reading, in its entirety:
Defendant states that Plaintiffs have released and
forever waived the claims which are raised in the
13. Caterpillar bases its summary judgment motion on two very recent
decisions from the Fourth and Fifth Circuit Courts of Appeal, O'Shea v.
Commercial Credit Corp., 930 F.2d 358 (4th Cir. 1991) and Grillet v.
Sears, Roebuck & Co., 927 F.2d 217 (5th Cir. 1991).
14. Plaintiffs filed their response to Caterpillar's motion on April
29, 1991. Caterpillar replied on May 2, 1991, and Plaintiffs filed a
surreply on May 2, 1991. On May 3, 1991, this Court heard extensive oral
argument from both parties.
15. After argument by both parties, this Court orally ruled that it
would deny Caterpillar's motion for summary judgment, but that such
ruling would not be final until a written order was entered.
16. At the time of the cessation of their active employment with
Caterpillar, Inc., each of the test case Plaintiffs, except Plaintiffs
Chester and Levenick, executed the following release:
In consideration of receiving the especial arrangement
as described above, I release and forever discharge
Caterpillar Tractor Co., 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 on such retirement. I have read the above
and understand the items described in this statement,
including the releases.
This particular language was set forth immediately above the signature
line on a two-page form.
17. The language of the release signed by Plaintiffs Chester and
Levenick contains an immaterial difference from the above language. The
Chester and Levenick releases do not contain the last phrase in the first
paragraph which reads, "or which are related to . . ."
18. In exchange for execution of the release, the test case Plaintiffs
received substantial consideration beyond that to which they were
entitled under the normal retirement plan. These benefits included the
1. Barlow: $26,457
2. Stone: $12,800
3. Foss: $9,600
4. W. LeDocq: $32,922
5. G. LeDocq: $32,922
6. Chester: $9,600
7. Kessell: $30,143
8. Dill: $19,600
9. Gosbin: $24,400
10. Levenick: $22,400
11. Fraley: $28,000
(b) In addition, those Plaintiffs who were part of the
Marketing reorganization received additional payments
equal to three times their monthly base salary less
applicable tax withholding amounts and amounts owed to
the Company. These payments were:
1. Dill: $12,987
2. Foss: $16,503
3. Fraley: $12,987
4. Gosbin: $8,529
5. Stone: $14,802
(c) A continuation of full life insurance coverage
during the period the retiree is entitled to the $400
payment, a benefit which would otherwise be reduced
(d) Increased pension payments by virtue of a reduction in the penalty
for taking early retirement under the normal plan for all Plaintiffs
except Plaintiffs Chester and Foss.
Plaintiffs Fraley and Gosbin are still receiving monthly $400 checks from
19. At no time have any of the Plaintiffs returned or attempted to
return the consideration received for the release.
20. Plaintiffs' complaint attacks the validity of the "Statements" for
purposes of releasing claims under the ADEA. Among other things, the
complaint alleges that releases were not given on a knowing and voluntary
basis; that they are invalid for want of consideration; and that they
were obtained through the use of bad faith, oppression, and
21. Prior to April 23, 1991, Caterpillar had never moved for dismissal
or summary judgment on the basis of these "Statements." Moreover, the
present motion does not deal with the merits of Plaintiffs' attack on the
"Statements" as releases of ADEA claims. For purposes of the present
summary judgment motion, counsel for Caterpillar asked the Court during
oral argument to assume that the "Statements" would not be valid releases
of ADEA claims were it not for their having been "ratified" by
Plaintiffs' failure to tender the consideration purportedly received in
exchange for signing the "Statements."
22. At no time prior to the recent filing of its motion for summary
judgment did Caterpillar specifically argue or imply (1) that any
Plaintiff was required to tender to Caterpillar the benefits listed in
his or her "Statement on the Special Retirement Supplement" as a
condition of pursuing this lawsuit, or (2) that any Plaintiff, through
failure to make such a tender or through any other conduct whatsoever,
had "ratified" the release language contained in the "Statements."
23. Two Plaintiffs have died since this suit began: John Mellie and
Russell Bovee. 43 of the 70 Plaintiffs are over 60, including 6 of the 11
test-case Plaintiffs (Chester, 66; Dill, 64; Foss, 66; Fraley, 62;
Levenick, 63; Stone, 65). 13 of the 70 Plaintiffs are over 65, including
two of the test-case Plaintiffs (Chester and Stone).
1. Caterpillar's motion takes the date of filing of the lawsuit as the
date by which Plaintiffs undisputably had notice of the grounds they had
for seeking to void the purported releases. Caterpillar contends that
once they had such notice, Plaintiffs were then required to tender to
Caterpillar the monetary benefits listed on the "Statements." Caterpillar
asserts that by failing to make such a tender, and instead retaining
those benefits during the three years of this litigation, Plaintiffs have
"ratified" these releases as a matter of law and are therefore precluded
from raising any legal
challenge to the releases' underlying validity.
2. This motion raises no issue of validity of Plaintiffs' various
grounds for asserting that the "Statements" themselves did not constitute
valid releases of their ADEA claims. At oral argument, Caterpillar
confined its argument to the tender/ratification issue, and asked this
Court to assume for the sake of this motion that "the releases were
entered into either as a result of duress, fraud, or mistake because the
Plaintiffs did not know what they were signing." Transcript of
proceedings of May 3, 1991, p. 3. For the purposes of this motion, the
Court makes such an assumption. Because Caterpillar has explicitly
limited the issue on this motion in this fashion, Plaintiffs have not
been required or ...