EEOC v

The Equal Employment Opportunity Commission, the appellant, seeks rehearing by the panel limited to two factual assertions in the panel’s decision that are not necessary to the panel’s ruling and that are disputed and not yet resolved by the district court. Appellate Rule 40 authorizes petitions for panel rehearing when the court has “misapprehended” a “point . . . of fact.” Fed. R. App. P. 40(a)(2). The Commission believes that the panel incorrectly assumed that these facts either are undisputed or have been decided by the district court.

In the panel decision, this Court stated that the employee agents were at-will employees and that they were not entitled to severance benefits in the event of a group termination. Op. at pp. 4–5. The parties in Romero v. Allstate Insurance Co., 1 F. Supp. 3d 319 (E.D. Pa. 2014), dispute whether the R830 and R1500 contracts rendered the employee agents at-will employees and whether the employee agents were entitled to severance benefits if terminated in a RIF-like group termination, and the district court did not resolve either of these disputes in its February 2014 order as modified in April.

The Commission therefore asks this Court to reconsider the statements discussed below because even though the statements make no difference to this Court’s resolution of the Commission’s retaliation claim, the statements will likely harm the Romero plaintiffs. Allstate has in fact already filed a motion in limine in the district court asking that court to preclude the Romero plaintiffs from arguing that they were not at-will employees and from arguing that they were entitled to severance benefits in the event of certain types of group terminations. The motion relies in part of this Court’s decision. See attached motion at 2, 4.

This Court’s decision states:

Under both the R830 and R1500 contracts, Allstate agents were at-will employees and were not entitled to any severance pay in the event that they were “terminated under the terms of any group reorganization/restructuring benefit plan or program[.]” Romero, 1 F. Supp. 3d at 336, 397–98.

Op. at pp. 4–5. The decision repeats these assertions at page 14. The district court did state in its initial decision denying summary judgment in Romero that “the R830 and R1500, by their express terms, were at-will contracts.” Romero I, 1 F. Supp. 3d at 397.[1] On reconsideration, however, the district court in effect withdrew that statement.

The district court entered its initial decision denying summary judgment in Romero on February 27, 2014. Joint Appendix (“JA”) 304, R.454–55; Romero I, 1 F. Supp. 3d at 419. The Romero plaintiffs moved for reconsideration, as did Allstate. JA-305, R.458–59. On April 7, 2014, the district court granted the Romero plaintiffs’ motion and denied Allstate’s. JA-306, R.463; Romero II, 1 F. Supp. 3d at 432.

The Romero plaintiffs asked the district court to reconsider its statement or ruling that the employee agents who had signed the R830 or R1500 contracts were at-will employees. R.458; Romero II, 1 F. Supp. 3d at 430–31. The Romero plaintiffs are alleging in their action that the R830 and R1500 contracts imposed certain obligations on Allstate with respect to the termination of the employee agents, and that the company’s 2000 reorganization program breached those obligations.

In granting reconsideration, the district court acknowledged that the Romero plaintiffs are asserting these breach-of-contract claims and that the motions that the court resolved in its February decision addressed solely the scope and validity of the release. The merits of the plaintiffs’ contract claims were therefore not before the court. Romero II, 1 F. Supp. 3d at 430.

The district court further agreed that the “statement that the R830/R1500 contracts were at-will agreements was not necessary to the Court’s conclusion on the questions before it.” Id. The issue the court was addressing was whether adequate consideration supported the release, and the district court ruled in its initial decision that adequate consideration supported the release even if the R830 and R1500 contracts were not at-will agreements. Romero II, 1 F. Supp. 3d at 430–31 (citing Romero I, 1 F. Supp. 3d at 398–99).

Indeed, the district court noted, its initial decision had expressly stated that the plaintiffs’ arguments about whether Allstate had complied with its obligations under the R830 and R1500 contracts were relevant to their breach-of-contract claims, which the court did not purport to resolve in the decision. Romero II, 1 F. Supp. 3d at 431 (citing Romero I, 1 F. Supp. 3d at 399). The district court also agreed that any ruling in February 2014 on the merits of the plaintiffs’ contract claims would have been premature both because the plaintiffs had not yet had the opportunity to obtain discovery relevant to those claims and because the court had not yet resolved which state’s law would govern those claims. Romero II, 1 F. Supp. 3d at 431.

Accordingly, the district court’s earlier statement about the employee agents’ at-will status was dictum and not binding “law of the case.” Id. The district court therefore granted the plaintiffs’ motion and clarified that its February decision was not intended to foreclose or adjudicate, and does not foreclose or adjudicate, “any aspect of Plaintiffs’ underlying breach of contract claims on the merits, or . . . bar Plaintiffs from raising each of their breach of contract legal theories at the merits-stage of this litigation.” Id. at 432.

Neither the plaintiffs’ motion for reconsideration nor the district court’s ruling focused on the second factual assertion quoted above, that the employee agents were not entitled to severance benefits if they were terminated in a group reorganization. This factual assertion, however, is also disputed, as the district court’s initial decision indicates. It is undisputed that before 2000, Allstate had two ERISA plans that provided severance benefits to employee agents “in the event of certain types of involuntary terminations,” including certain types of RIFs. Romero I, 1 F. Supp. 3d at 335. The parties disagree, however, on when Allstate decided that the employee agents terminated under the 2000 reorganization program would not be eligible for such benefits and on whether that decision altered the employee agents’ rights under those plans. See id. at 403 & n.40; id. at 409; see also Romero II, 1 F. Supp. 3d at 425–26 (rejecting Allstate’s motion to reconsider the relevant statements in the February decision). Thus, the parties in Romero dispute whether the employee agents were entitled to severance benefits in the event of certain types of group terminations, and the district court has not decided that question.

Moreover, this Court can modify or delete the specified factual assertions without affecting its holding affirming the district court order granting Allstate summary judgment on the Commission’s retaliation claim. This Court’s affirmance rests primarily on the “hornbook” rule that “employers can require terminated employees to release claims in exchange for benefits to which they would not otherwise be entitled.” Op. at 12. This Court referred to the factual assertions challenged here in the course of rejecting what it considered to be the Commission’s argument that the conversion option was not adequate consideration for the release. This Court rejected that argument in part because it was “contrary to the undisputed facts of this case.” Op. at 14. It was contrary to the undisputed facts, this Court stated, for two reasons: first, the employee agents “were entitled to neither continued employment . . . nor severance pay” (the two challenged factual assertions), op. at 14; and, second, the conversion option offered the employee agents rights and benefits to which they were not entitled before the implementation of the program. Op. at 14–15. This second reason is an independent and sufficient justification for this Court’s rejection of the inadequate-consideration argument. This Court can omit the sentence referring to the employee agents’ alleged at-will status and their alleged lack of entitlement to severance pay (on the ground that that these are not “undisputed” facts) without otherwise affecting the Court’s reasoning and holding.

The Commission therefore urges this Court to delete the statements on pages 4–5 and on page 14 relating to the employee agents’ alleged at-will status and their alleged lack of entitlement to severance pay. These are not undisputed facts. On the contrary, the district court ruled that the Romero plaintiffs are free to argue that they were not at-will employees and that they were entitled to severance benefits when terminated in a RIF-like termination. Moreover, the challenged assertions can be omitted without affecting the Court’s reasoning or holding.

Finally, the Commission requests a significantly less substantive alteration. The decision incorrectly includes John V. Gorman and Coleen M. Meehan of Morgan, Lewis & Bockius in the list of lawyers representing the EEOC. They should be deleted from that list.

Respectfully submitted,

P. David Lopez

General Counsel

Carolyn L. Wheeler

Acting Associate General Counsel

Jennifer S. Goldstein

Acting Assistant General Counsel

s/ Paul D. Ramshaw

Attorney

Equal Employment

Opportunity Commission

Office of General Counsel

131 M St., NE, Room 5SW18K

Washington, D.C. 20507

(202) 663-4737

Certificate of Bar Membership

Under Third Circuit LAR 28.3(d), I certify that I am a member of the bar of this Court.

March 16, 2015 s/ Paul D. Ramshaw

Certificate of Compliance with Length, Typeface
and Type-Style Requirements

This petition complies with the length limit in Fed. R. App. P. 40(b) because it is eight pages long.

This brief complies with the typeface requirements of Fed. R. App. P. 32(a)(5) and the type-style requirements of Fed. R. App. P. 32 (a)(6) because this brief has been prepared in a proportionally spaced typeface using Microsoft Word 2007 in 14-point Century Schoolbook font.

March 16, 2015 s/ Paul D. Ramshaw

Certificate of Identically Filed Petitions

I certify that the text of the electronically filed version of this petition is identical to the text of the hard copies of the petition filed with the Court.

March 16, 2015 s/ Paul D. Ramshaw

Certificate of Virus Check

I certify that a virus check using Trend Micro OfficeScan version 10.6.5495 service pack 3 was performed on the electronic version of this petition on March 16, 2015, prior to electronic filing with the Court, and the program found no viruses.

March 16, 2015 s/ Paul D. Ramshaw

Certificate of Service

I certify that the following lawyer for the Allstate appellees will be served today by this Court’s electronic filing system:

Donald R. Livingston

Akin Gump Strauss Hauer & Feld LLP

1333 New Hampshire Ave., NW, Suite 400

Washington, DC 20036

March 16, 2015 s/ Paul D. Ramshaw

[1] The decision reported at 1 F. Supp. 3d 319 is actually two decisions: the court’s initial decision, dated February 27, 2014, id. at 319–420 (referred to here as Romero I), and its decision on reconsideration, dated April 7, 2014, id. at 420–32 (referred to here as Romero II).