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EEOC v. SEARS

July 7, 1994

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff,
v.
SEARS, ROEBUCK AND CO., Defendant.


Plunkett


The opinion of the court was delivered by: PAUL E. PLUNKETT

 The genesis of this case is an age discrimination charge filed with Plaintiff Equal Employment Opportunity Commission ("EEOC") by an employee of Defendant Sears, Roebuck and Company ("Sears") challenging the legality of Sears' "Big Ticket Severance Allowance Plan" (hereafter the "Plan") under the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. § 621 et seq. After the EEOC's conciliation efforts failed, the EEOC brought this suit against Sears.

 The EEOC alleges that since February 14, 1992, Sears has engaged in an unlawful practice in violation of section 4(d) of the ADEA, 29 U.S.C. § 623(d), by willfully "conditioning employees' receipt of severance benefits on execution of a waiver and release of ADEA claims which is invalid under Section 7(f) of the ADEA . . . and which requires employees to release all ADEA claims, including claims unrelated to the employee's termination." (Compl. P 8.) The EEOC asks the Court, inter alia, to enjoin Sears from engaging in conduct that violates section 4(d), to order Sears to take certain remedial actions in connection with the challenged severance program, and to declare invalid employee waivers signed in connection with the challenged severance program.

 The matter is presently before us on Defendant Sears' motion to dismiss the complaint. Sears challenges the sufficiency of the complaint on numerous grounds. To wit, they argue that: (1) the EEOC may not commence this action because it did not give the appropriate notice nor attempt conciliation as required by the ADEA; (2) the allegations in the complaint are conclusory and deficient; (3) the complaint fails to state a claim under ADEA section 4(d) because the EEOC does not allege that Sears discriminated against anyone for opposing conduct unlawful under the ADEA; (4) the EEOC's claim that general releases are per se invalid contravenes the letter and spirit of the Older Workers' Benefit Protection Act as codified at 29 U.S.C. § 626(f)(1); (5) the EEOC and the Courts have consistently upheld the validity of general releases; (6) Sears' conduct is not actionable because Sears acted pursuant to a bona fide employee benefit plan; and (7) the EEOC's conduct violates principles of fundamental fairness and section 553 of the Administrative Procedures Act ("APA") because the EEOC is taking an interpretative position in this litigation different than that taken previously by the agency.

 We have jurisdiction pursuant to 28 U.S.C. §§ 1331, 1337, 1343, and 1345. For the reasons set forth below, the motion to dismiss is granted.

 Discussion

 At the outset, we feel compelled to express our agreement with Sears regarding the sufficiency of the complaint's factual allegations. The "meat" of the complaint, if one could call it that, is nothing more than a conclusory allegation that Sears engaged in unlawful conduct by conditioning certain severance benefits on an allegedly invalid release. The only factual information before the Court about the challenged severance program is contained in the EEOC's response in opposition to the motion to dismiss.

 Even if we push the concept of notice pleading to its farthest extreme, the allegations in the complaint are insufficient. "Even the liberal notice pleading allowed by the federal rules requires the complaint to include the operative facts upon which a plaintiff bases his claim. Rodgers v. Lincoln Towing Serv., Inc., 771 F.2d 194, 198 (7th Cir. 1985) (citing Conley v. Gibson, 355 U.S. 41, 47, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957). The complaint contains none of the factual allegations that are required to support a claim under section 4 (d). It also does not contain factual allegations supporting the EEOC's contention that the release is invalid.

 The fact that the EEOC supplies what appear to be the operative facts in its Memorandum in Opposition to Defendant's Motion to Dismiss does not cure the problem. We consider only the allegations in the complaint on a Rule 12(b)(6) motion to dismiss. Allegations outside of the complaint are irrelevant to our analysis. Rodgers, 771 F.2d at 198.

 This alone warrants dismissal of the complaint. Nonetheless, because this pleading deficiency can be cured by importing the factual allegations in the responsive brief into the complaint, judicial economy is best served if we consider whether the amended complaint would state a claim under section 4(d) of the ADEA. Because the foundation of the EEOC's claim is the invalidity of the release required under the plan, we address first whether the release complies with the requirements of 29 U.S.C. § 626(f)(1).

 In November 1991 Congress amended the ADEA by enacting the Older Workers Benefit Protection Act ("OWBPA"). Among other things, the Act sets forth statutory restrictions limiting the manner in which employees may waive their rights and claims under the ADEA. See 29 U.S.C. § 626(f). The OWBPA provides that an employee may not waive his or her ADEA rights and claims unless such waiver is "knowing and voluntary." 29 U.S.C. § 626(f)(1). A waiver granted in conjunction with an exit incentive or employment termination program is knowing and voluntary if, 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 specifically refers to rights or claims arising under [the ADEA];
 
(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 ...

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