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 14, 1991.
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
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 consideration.
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
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
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
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 following:
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
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 upon retirement;
(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 the Company.
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 overreaching.
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
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 ...