No. 04-3039
            _________________________________________

              IN THE UNITED STATES COURT OF APPEALS
                      FOR THE THIRD CIRCUIT
            _________________________________________

JOHN R. WASTAK,

          Plaintiff-Appellant,
                              
     v.

LEHIGH VALLEY HEALTH NETWORK, INC.,

          Defendant-Appellee.
          ______________________________________________

        On Appeal from the United States District Court
            for the Eastern District of Pennsylvania
          ______________________________________________

   Brief of the U.S. Equal Employment Opportunity Commission
        as Amicus Curiae Supporting Plaintiff-Appellant
         ______________________________________________

ERIC S. DREIBAND
General Counsel

LORRAINE C. DAVIS
Acting Associate General Counsel
                                   U.S. EQUAL EMPLOYMENT 
CAROLYN L. WHEELER              OPPORTUNITY COMMISSION
Assistant General Counsel               Office of General Counsel
                                   1801 L Street, NW, Room 7030
ANNE NOEL OCCHIALINO               Washington, DC  20507
Attorney                           (202) 663-4724

                       TABLE OF CONTENTS
                                
Table of Authorities . . . . . . . . . . . . . . . . . . . . .iii

Statement of Interest. . . . . . . . . . . . . . . . . . . . . .1

Statement of the Issue . . . . . . . . . . . . . . . . . . . . .1

Statement of the Case. . . . . . . . . . . . . . . . . . . . . .2

     A.   Facts and Procedural Background  . . . . . . . . . . .2

     B.   District Court Decision  . . . . . . . . . . . . . . .4

Argument . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

     THE DISTRICT COURT ERRED IN FINDING THAT
     WASTAK'S INITIATION OF HIS ADEA LAWSUIT
     WAS IN BAD FAITH  BECAUSE THIS COURT
     REJECTED HIS ARGUMENT THAT THE WAIVER HE 
     SIGNED WAS UNENFORCEABLE. . . . . . . . . . . . . . . . .  6

          A.   The ADEA's bad-faith standard for awarding fees to a
               prevailing defendant militates against a finding that the
               the initiation of an age discrimination lawsuit is in bad
               faith when a court finds that the plaintiff signed a valid
               waiver. . . . . . . . . . . . . . . . . . . . . .7

          B.   The district court's finding contravenes the ADEA,
               public policy, and the Commission's regulations. .10

               1.   The court's holding contravenes both the 
                    language of the ADEA and Congress's intent
                    in enacting it.  . . . . . . . . . . . . . 11

               2.   The court's ruling will have a chilling effect
                    on victims of age discrimination.  . . . . 13

               3.   The district court's ruling contravenes
                    the Commission's regulation at 
                    29 C.F.R. 1625.23 .. . . . . . . . . . . 17

               4.   The district court cited no relevant authority 
                    to support its finding.  . . . . . . . . . 19

     C.   Even if a plaintiff's initiation of an ADEA lawsuit could
          constitute bad faith when a court finds a waiver enforceable,
          the record does not support the district court's bad-faith
          finding in this case.  . . . . . . . . . . . . . . . 20

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Certificate of Compliance. . . . . . . . . . . . . . . . . . . . 

Certificate of Service . . . . . . . . . . . . . . . . . . . . . 

                      TABLE OF AUTHORITIES

                             CASES

Carroll v. Primerica Fin. Servs. Ins. Mktg., 811 F. Supp. 1558 21

Cesaro v. Thompson Publ'g Group, 20 F. Supp. 2d 725 (D.N.J. 1998)7, 8

Christiansburg Garment Co. v. EEOC, 434 U.S. 412 (1978)8, 9, 14, 15

Clay v. Johnson, 264 F.3d 744 (7th Cir. 2001). . . . . . . . . 18

Colbert v. Yadkin Valley Tel. Memership Corp.,                                                        
960 F. Supp. 84 (M.D.N.C. 1997). . . . . . . . . . . . . . .5, 20

EEOC v. Clay Printing Co., 13 F.3d 813 (4th Cir. 1994) . . . . 21

EEOC v. Hendrix Coll., 53 F.3d 209 (8th Cir. 1995) . . . 5, 8, 20

Ford v. Temple Hosp., 790 F.2d 342 (3d Cir. 1986). . . . . 16, 20

Freeman v. Package Mach. Co., 865 F.2d 1331 (1st Cir. 1988). . .9

Hoover v. Armco, Inc., 915 F.2d 355 (8th Cir. 1990). . . 5, 9, 19

Hughes v. Rowe, 449 U.S. 5 (1980)  . . . . . . . . . . . . . . 22

Isaacs v. Caterpillar, 765 F. Supp. 1359 (C.D. Ill. 1991). . . 13

Long v. Sears Roebuck & Co., 105 F.3d 1529 (3d Cir. 1997). 11, 16

Lorillard v. Pons, 434 U.S. 575 (1978) . . . . . . . . . . 11, 16

Monroe v. Children's Home Ass'n of Illinois, 128 F.3d 591 (7th Cir. 1997)9

Oubre v. Entergy Operations, Inc., 522 U.S. 422 (1998) . . 11, 15
                                
Raczak v. Ameritech Corp., 103 F.3d 1257 (6th Cir. 1997) . . . 12

Richardson v. Alaska Airlines Inc., 750 F.2d 763 (9th Cir. 1984)10

Spinetti v. Serv. Corp. Int'l, 324 F.3d 212 (3d Cir. 2003) . . 22

Turlington v. Atlanta Gas Light Co., 135 F.3d 1428 (11th Cir. 1998)8

Wastak v. Lehigh Valley Health Network, 333 F.3d 120 (3d Cir. 2003)7

Wastak v. Lehigh Valley Health Network, 342 F.3d 281 (3d Cir. 2003) . . . .passim

                        FEDERAL STATUTES

Age Discrimination in Employment Act of 1967, U.S.C. 621-634.1

Fair Labor Standards Act, 29 U.S.C. 201. . . . . . . . . . . .7

Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e . .7

29 U.S.C. 216(b) . . . . . . . . . . . . . . . . . . . . .7, 13

29 U.S.C. 626(f). . . . . . . . . . . . . . . . . . . . . . . 11

29 U.S.C. 626(f)(1). . . . . . . . . . . . . . . . . . . passim

29 U.S.C. 626(f)(3). . . . . . . . . . . . . . . . . . . 12, 14

29 U.S.C 626(f)(4) . . . . . . . . . . . . . . . . . .3, 11, 22

42 U.S.C. 2000e-5(k) . . . . . . . . . . . . . . . . . . .7, 13

                                
                                
                                
                                
                  TABLE OF AUTHORITIES (con't)
                                
                      FEDERAL REGULATIONS

29 C.F.R. 1625.22(a)(3). . . . . . . . . . . . . . . . . . . 15

29 C.F.R. 1625.22(b)(4). . . . . . . . . . . . . . . . . . . .4

29 C.F.R. 1625.22(i)(2). . . . . . . . . . . . . . . . . . . .3

29 C.F.R. 1625.22(i)(2)(i) . . . . . . . . . . . . . . . . . 23

29 C.F.R. 1625.23(b) . . . . . . . . . . . . . 4, 6, 17, 18, 19

                         MISCELLANEOUS

Fed. R. Civ. P. 54(d)(1) . . . . . . . . . . . . . . . . . . . 15

Waivers of Rights and Claims: Tender Back of Consideration,                                  
    65 Fed. Reg. 77438 (Dec. 11, 2000) . . . . . . . . . . passim

 Waivers of Rights and Claims: Tender Back of Consideration,                                 
     64 Fed. Reg. 19952 (April 23, 1999) . . . . . . . . . 12, 18

                      STATEMENT OF INTEREST
     The Equal Employment Opportunity Commission enforces the Age
Discrimination in Employment Act, 29 U.S.C. 621-634, and other federal
employment-discrimination statutes.  The Commission also has substantive rule-
making authority under the ADEA.  This is the second appeal in this case.  In the
first appeal, this Court decided that the waiver the plaintiff signed upon his
termination was enforceable.   The district court subsequently found that the
plaintiff had litigated in bad faith and awarded attorneys' fees to the defendant. 
The court based its bad-faith finding in part on the fact that the plaintiff understood
that the waiver he signed prohibited him from filing an ADEA lawsuit.  This
finding conflicts with the ADEA, the public policy underlying the ADEA, and the
Commission's current regulations.  Because the court's ruling impacts the
Commission's enforcement efforts and is contrary to the Commission's
regulations, we offer our views to the Court under Fed. R. App. P. 29(a).
                      STATEMENT OF THE ISSUE
     Whether the district court erred in concluding that a plaintiff who filed
     an age discrimination lawsuit after signing a waiver agreement that he
     understood to prohibit him from filing suit litigated in bad faith when
     this Court subsequently held that the waiver was valid.

     The EEOC takes no position on any other issue raised in this appeal.

                      STATEMENT OF THE CASE
     A.   Facts and Procedural Background
     When John Wastak was fifty-seven years old, Lehigh Valley Health
Network fired him.  See Wastak v. Lehigh Valley Health Network, 342 F.3d 281,
284 (3d Cir. 2003).  Wastak signed a separation agreement in which he waived all
employment-related claims.  See id.  Among other things, the waiver prohibited
Wastak from filing an age-discrimination charge relating to his termination.  See
id. at 289.  The waiver also stated that the prevailing party would be entitled to
recover reasonable costs and attorneys' fees in any litigation brought to enforce the
agreement.  See id. at 284.
     More than a year after Lehigh Valley fired him, Wastak filed a charge of age
discrimination with the EEOC.  (JA2, 1/7/04 Order at 2, n.2)  The EEOC dismissed
this charge as untimely.  (Id.)  On August 21, 2000, Wastak filed this lawsuit in
state court, and on September 21, 2000, Lehigh Valley removed the case to federal
court.  See Wastak, 342 F.3d at 285, JA10.  On Lehigh Valley's motion for
summary judgment, the district court ruled that Wastak had waived his ADEA and
parallel state-law claims.  See Wastak, 342 F.3d at 285.  Specifically, the court
concluded that the waiver Wastak signed was knowing and voluntary as required
under 29 U.S.C. 626(f)(1) and therefore complied with the ADEA.  See id. 
     Wastak appealed to this Court, arguing that the waiver was unenforceable
because it was not knowing and voluntary and because it contained a charge-filing
ban that violated 29 U.S.C 626(f)(4).  See Wastak, 342 F.3d 281.  The
Commission filed an amicus brief joining Wastak in arguing that the waiver's ban
on charge-filing conflicted with section 626(f)(4) and therefore invalidated the
waiver.  See id. at 288-93.
     In a published opinion, this Court rejected the arguments of both Wastak and
the Commission and concluded that the waiver was enforceable.  See id.  This
Court agreed that section 626(f)(4) "essentially states that, whatever its provisions,
a privately executed waiver agreement cannot alter or obstruct the EEOC's ability
to exercise its rights and responsibilities, and that an employer may not invoke a
waiver in an attempt to impede an employee's participation in EEOC procedures." 
Id. at 289.  According to this Court, however, "there was no apparent violation of
the clear terms of section 626(f)(4)" because Lehigh Valley did not interfere with
Wastak's filing of his charge and because Wastak did not allege that the release
affected the Commission's rights and responsibilities.  See id. at 290.  This Court
also concluded that the waiver's charge-filing ban did not operate to invalidate the
waiver under section 626(f)(4) or under section 626(f)(1).  See id. at 290-93.  In a
footnote, however, this Court observed that the Commission's regulation at 29
C.F.R. 1625.22(i)(2)   which was not in effect when Wastak signed his
agreement   "clearly precludes the inclusion of provisions that prohibit resort to
[the] administrative process."   See id. at 293, n.6.  This Court said that "under
proper circumstances" a court could find that a charge-filing ban in a waiver
subject to the Commission's current regulations had "'the effect of misleading,
misinforming, or failing to inform'" an individual, therefore rendering the waiver
invalid.  Id. (quoting 29 C.F.R. 1625.22(b)(4)).
     In another footnote, this Court addressed Wastak's argument that the waiver
contained provisions that violated 29 C.F.R. 1625.23(b), which prohibits waivers
from imposing penalties or other limitations (including attorneys' fees) "'adversely
affecting any individual's right to challenge the agreement.'"  Id. at 293, n.7
(quoting 29 C.F.R. 1625.23(b)).  This Court noted, however, that section
1625.23(b) became effective after Wastak signed his waiver and filed his lawsuit. 
See id.  Finding no basis for concluding that the regulation applied retroactively,
this Court concluded that it did not operate to invalidate the waiver.  See id.  
     B.   District Court Decision
     Following the Third Circuit's decision, the district court reconsidered Lehigh
Valley's petition for costs and attorneys' fees, which the court had stayed pending
the appeal.  (JA1, 1/7/04 order at 1, n.1)  In a January 7, 2004, order the court
concluded that Lehigh Valley was entitled to its attorneys' fees.  (JA2, 1/7/04 order
at 2, n.2)  The court began its analysis by noting that the Third Circuit has not yet
determined the standard for assessing fees under the ADEA.  (JA1, 1/7/04 order at
1, n.1)  Next, the court observed that every circuit court to consider the issue has
concluded that the standard is "bad faith."  (Id.)  The court consequently adopted
the bad-faith standard.  (JA2, Order at 2, n.2)  The court then concluded that
Lehigh Valley was the prevailing party and that Wastak had brought his lawsuit in
bad faith by making knowing misrepresentations to the court.  (Id.)  The court gave
three reasons for its finding: 1) Wastak admitted in his deposition that he included
false statements in his affidavit concerning his mental state at the time of his
termination; 2) Wastak testified that he understood that under the waiver he was
agreeing not to sue Lehigh Valley in exchange for thirty-six weeks of severance
pay and outplacement service; and 3) the EEOC had dismissed Wastak's charge for
untimeliness because Wastak had filed it 495 days after his termination.  (Id.) 
Citing Hoover v. Armco, Inc., 915 F.2d 355, 357 (8th Cir. 1990), Colbert v.
Yadkin Valley Tel. Memership Corp., 960 F. Supp. 84, 87 (M.D.N.C. 1997), and
EEOC v. Hendrix College, 53 F.3d 209, 211 (8th Cir. 1995), the court concluded
that these circumstances demonstrated Wastak's bad faith.  (Id.)
     In a June 21, 2004, order, the court addressed the reasonableness of the costs
and attorneys' fees.  (JA4-6, 6/21/04 order at 1-3)  The court first noted, however,
that Wastak had filed what the court considered to be a tardy motion to reconsider
its January 7, 2004, order.  (JA4, 6/21/04 order at 1, n.1)  The court dismissed
Wastak's argument by stating that the Third Circuit itself had noted that the
Commission's regulation at section 1625.23(b) "did not apply retroactively to this
case."  (Id.)  The court then went on to consider Wastak's arguments concerning
the reasonableness of the fee and costs award.  (JA4-5, Order at 1-2, n.1)  The
court agreed with some of Wastak's objections and eventually awarded to Lehigh
Valley $38,695.50 in fees and $2,440.95 in costs.  (JA4-6, Order at 1-3, n.1)
                             ARGUMENT
     THE DISTRICT COURT ERRED IN FINDING THAT WASTAK'S
     INITIATION OF HIS ADEA LAWSUIT WAS IN BAD FAITH 
     BECAUSE THIS COURT REJECTED HIS ARGUMENT 
     THAT THE WAIVER HE SIGNED WAS UNENFORCEABLE.

     The district court erred in finding that Wastak's initiation of his lawsuit was
in bad faith because he understood that his waiver prohibited him from filing suit
and because this Court subsequently concluded that the waiver was valid.  The
district court's ruling would effectively make a finding of bad faith and a fee award
automatic whenever a court rejects an employee's challenge to the validity of a
waiver.  This result contravenes both the language and the purpose underlying the
ADEA and the Commission's current regulations.  Even if the mere filing of a
lawsuit could support a bad-faith finding when a court concludes that a plaintiff
signed an enforceable waiver, the record does not support the district court's
finding of bad faith in this case.  Therefore, this Court should find that the district
court erred in resting its bad-faith finding on Wastak's initiation of his lawsuit. 
     A.   The ADEA's bad-faith standard for awarding fees to a prevailing
          defendant militates against a finding that the initiation of an age
          discrimination lawsuit is in bad faith when a court finds that the
          plaintiff signed a valid waiver.
     This Court has not expressly ruled on the ADEA standard for awarding fees
to prevailing defendants.  See, e.g., Cesaro v. Thompson Publ'g Group, 
20 F. Supp. 2d 725, 726 (D.N.J. 1998).  When Congress enacted the ADEA, it took
some provisions from Title VII, 42 U.S.C. 2000e et seq., and others from the Fair
Labor Standards Act, 29 U.S.C. 201 et seq.  See Lorillard v. Pons, 434 U.S. 575,
578 (1978).  Both Title VII and the FLSA contain fee-shifting provisions.  Title VII
authorizes an award of  attorneys' fees to any "prevailing party."  42 U.S.C.
2000e-5(k).  The FLSA, in contrast, expressly authorizes an award of attorneys'
fees only to "the plaintiff or plaintiffs."  29 U.S.C. 216(b).  In enacting the
ADEA, Congress chose to follow the FLSA, authorizing an award of attorneys'
fees only to "the plaintiff or plaintiffs." 29 U.S.C. 216(b) (incorporated into the
ADEA by 29 U.S.C. 626(b)).  
     Accordingly, the ADEA differs from Title VII in that it does not expressly
provide for fee awards to prevailing defendants.  Numerous courts have held,
however, that   as in FLSA cases   prevailing employers in ADEA cases may
recover fees under the "bad faith" exception to the "American Rule" on fees.  See,
e.g., Turlington v. Atlanta Gas Light Co., 135 F.3d 1428, 1437 (11th Cir. 1998);
EEOC v. Hendrix Coll., 53 F.3d 209, 211 (8th Cir. 1995); Cesaro, 
20 F. Supp. 2d at 726.  The ADEA's "bad faith" standard is more stringent than
Title VII's standard, which requires only a showing that "the plaintiff's action was
frivolous, unreasonable, or without foundation, even though not brought in
subjective bad faith." Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 421 &
422 (1978) (recognizing that it is easier to show that an action was frivolous,
unreasonable, or without foundation than to show bad faith).  Consequently, as a
result of Congress's decision to incorporate the FLSA's fee-shifting provision
rather than Title VII's, it is more difficult for a prevailing defendant to obtain an
award of attorneys' fees in an ADEA action than in a Title VII action.  See, e.g.,
Turlington, 135 F.3d at 1437 n.19 (11th Cir. 1998) (stressing that the "bad faith"
standard applicable to ADEA defendants "differs significantly from" the
Christiansburg standard).
     Notwithstanding the ADEA's and Title VII's different standards for
awarding fees to prevailing defendants, the fee-shifting provisions of both statutes
reflect the same enforcement objectives.  In Christiansburg, the Supreme Court
held that Title VII provides a dual standard for the award of attorneys' fees to
prevailing parties.  A prevailing Title VII plaintiff "ordinarily is to be awarded
attorney's fees in all but special circumstances."  434 U.S. at 417.  In contrast, a
prevailing Title VII defendant is to be awarded attorneys' fees only "upon a finding
that the plaintiff's action was frivolous, unreasonable, or without foundation."  Id.
at 421.  According to the Court, this dual standard is necessary "to promote the
vigorous enforcement of the provisions of Title VII."  Id. at 422. 
     Like Title VII, the ADEA codifies a dual standard for awarding attorneys'
fees.  See Monroe v. Children's Home Ass'n of Illinois, 128 F.3d 591, 594 (7th
Cir. 1997) (ADEA adopts the same "asymmetric" approach to fee shifting as other
civil rights laws); Freeman v. Package Mach. Co., 865 F.2d 1331, 1347 (1st Cir.
1988) ("[i]nsofar as cost-shifting is concerned," the ADEA is a "sister[] under the
skin" with other civil rights statutes; Congress viewed the ADEA as a "'civil
rights' type" of statute "similar to earlier, more traditional [civil rights]
enactments"); see also Hoover, 915 F.2d at 358 (McMillan, J., concurring in part,
dissenting in part) (ADEA's "bad faith" standard serves the same purpose as the
Christiansburg standard; it ensures that fee awards against plaintiffs do not have a
chilling effect).  The only difference between the statutes is that the ADEA goes
further than Title VII, relegating prevailing defendants to the highly restrictive
"bad faith" standard.  As one court explained, Congress "chose its words carefully"
in the ADEA, authorizing the award of attorneys' fees to prevailing plaintiffs while
curtailing substantially "the recovery of attorney's fees by an employer who has
successfully defended himself against an accusation of age discrimination."
Richardson v. Alaska Airlines Inc., 750 F.2d 763, 767 (9th Cir. 1984).
     Accordingly, the history and the language of the ADEA   especially when
viewed in contrast to Title VII   demonstrates that courts should award attorneys'
fees to prevailing ADEA defendants only in those rare cases in which a plaintiff
has litigated in bad faith.  Wastak's initiation of his lawsuit does not make this case
one of them.
     B.   The district court's finding contravenes the ADEA, public policy, and
          the Commission's regulations.

     The district court erred in holding that Wastak initiated his lawsuit in bad
faith in part because this Court subsequently held that he had signed an enforceable
waiver.  The district court's holding effectively makes a finding of bad faith
automatic whenever a court rejects an ADEA plaintiff's argument that his or her
waiver is unenforceable.  This result conflicts with the ADEA's language and
legislative purpose, public policy, and the Commission's regulations.
          1.   The court's holding contravenes both the language of the ADEA
               and Congress's intent in enacting it.

     In 1990, Congress amended the ADEA by enacting the Older Workers
Benefit Protection Act ("OWBPA").  As the Supreme Court has said, "[t]he policy
of the OWBPA is . . . clear from its title: It is designed to protect the rights and
benefits of older workers."  Oubre v. Entergy Operations, Inc., 522 U.S. 422, 427
(1998).  Although OWBPA permitted employees to waive their right to sue for age
discrimination, 29 U.S.C. 626(f), Congress protected the rights of older workers
by requiring that a waiver be "knowing and voluntary." See 29 U.S.C. 626(f)(1);
see also Long v. Sears Roebuck & Co., 105 F.3d 1529, 1534 (3d Cir. 1997) (stating
that OWBPA was intended to "'ensure[] that older workers are not coerced or
manipulated into waiving their rights to seek legal relief under the ADEA'")
(quoting S. Rep. No. 263, 101st Cong., 2d Sess. (1990)).  A waiver is "knowing
and voluntary" only if it meets an enumerated list of minimum requirements.  29
U.S.C. 626(f)(1)(A)-(H).  Congress also stated that waivers cannot interfere with
the Commission's duties or with the right of an individual to file a charge or
participate in an investigation.  See 29 U.S.C. 626(f)(4).  
     In enacting OWBPA's stringent waiver requirements, Congress clearly
contemplated that employees would be able to challenge their waivers in court. 
See Raczak v. Ameritech Corp., 103 F.3d 1257, 1271 (6th Cir. 1997) (Jones, J.,
concurring in part) ("It was the intent of Congress that waivers would not preclude
parties from bringing suit under the OWBPA.").  In addition to the fact that
section 626(f)(1) sets out minimum requirements a court should consider when
determining the validity of a waiver, section 626(f)(3) explicitly states that "[i]n
any dispute that may arise over whether" any of the OWBPA requirements "have
been met, the party asserting the validity of a waiver shall have the burden of
proving in a court . . . that a waiver was knowing and voluntary . . . ."  29 U.S.C. 
626(f)(3) (emphasis added).  As the Commission has recognized, "the plain
language" of section 626(f)(3) manifested Congress's "intention to permit an
employee who signed an ADEA waiver[] to sue his or her employer upon the
belief that the waiver did not comply with the OWBPA."  Waivers of Rights and
Claims: Tender Back of Consideration, 65 Fed. Reg. 77438, 77443-44 (Dec. 11,
2000); see also Waivers of Rights and Claims: Tender Back of Consideration, 64
Fed. Reg. 19952, 19954 (April 23, 1999) (notice of proposed rulemaking) ("The
ADEA clearly envisions that courts would have authority to determine the validity
of the waiver, and therefore, necessarily contemplates that individuals would have
the opportunity to bring such a challenge.").
     Because Congress intended that individuals would be able to test the validity
of their waivers in court, an individual who does so cannnot automatically be
deemed to have acted in bad faith   even if a court ultimately determines that a
waiver was valid.  Had Congress intended otherwise, it could have stated in the
statute that an employer is entitled to an award of attorneys' fees whenever a
plaintiff sues and a court concludes that the plaintiff had signed a valid waiver.  As
discussed above, however, not only did Congress not include such a provision, but
Congress incorporated the restrictive FLSA fee standard and authorized fees only
to "the plaintiff or plaintiffs" rather than adopting Title VII's standard, which
allows fees to any "prevailing party."  Compare  29 U.S.C. 216(b) (incorporated
by reference in 29 U.S.C. 626(b)) with 42 U.S.C. 2000e-5(k).  Accordingly, the
district court's ruling undermines Congress's intention that workers be able to
challenge the validity of their waivers in court.
          2.    The court's ruling will have a chilling effect on victims of age
               discrimination.

     The district court's finding that fees should be awarded against age
discrimination plaintiffs who sign waivers that are found to be enforceable 
will have a chilling effect on victims of age discrimination.  See 65 Fed. Reg. at
77442 ("The Commission remains concerned about the chilling effect that the
potential for attorneys' fees (other than those currently available) and damages
would have" on challenges to the enforceability of waivers).  The Supreme Court
recognized as much in Christiansburg, 434 U.S. 412, which involved an award of
fees under the less-stringent Title VII standard.  There, the Court warned about the
chilling effect of fee awards against civil rights plaintiffs and emphasized that
losing a lawsuit does not itself mean that a plaintiff's action was unfounded:
          [I]t is important that a district court resist the
          understandable temptation to engage in post hoc
          reasoning by concluding that, because a plaintiff did not
          ultimately prevail, his action must have been
          unreasonable or without foundation. This kind of
          hindsight logic could discourage all but the most airtight
          claims, for seldom can a prospective plaintiff be sure of
          ultimate success.
Id.  at 421-22.  
     Here, the district court's holding contravenes Christiansburg's admonition
that litigation is always uncertain and that defeat does not necessarily signal that an
action was unfounded, much less brought in bad faith.  It is especially
inappropriate to make fee awards hinge on the validity of waiver agreements
because "the validity of a waiver is not always apparent from its face, even with
regard to the enumerated OWBPA requirements." 65 Fed. Reg. at 77440; see also
29 C.F.R. 1625.22(a)(3) ("[o]ther facts and circumstances may bear on the
question of whether the waiver is knowing and voluntary, as, for example, if there
is a material mistake, omission, or misstatement in the information furnished by the
employer to an employee in connection with the waiver").
     The Supreme Court has also recognized that financial pressures have a
chilling effect on age discrimination victims.  See Oubre, 522 U.S. 422.  In Oubre,
which involved tender-back requirements in waivers of age discrimination claims,
the Court reasoned that many discharged individuals will "lack the means to tender
[the] return" of funds received in exchange for the waiver and, therefore, will
refrain from bringing cases they otherwise might pursue.  Id. at 427.  According to
the Court, employers' perceptions that individuals will be deterred from seeking
judicial assessment of ADEA waivers may, in turn, "open the door to an evasion of
the statute."  Id.  
     The Supreme Court's reasoning in Oubre is equally applicable here.  If the
bad-faith standard is satisfied merely by filing an age discrimination lawsuit and
having a court conclude a waiver was enforceable, employees will undoubtedly be
deterred from bringing lawsuits out of fear of having to pay attorneys' fees.  This
is especially true because individuals who sue for age discrimination are often
unemployed with little chance of finding a new job, thus effectively forcing their
premature retirement.  Indeed, this Court has recognized that "'older Americans
have less than a 50/50 chance of ever finding new employment.  The[y] often have
little or no savings, and may not yet be eligible for Social Security.'" Long v. Sears
Roebuck, 105 F.3d at 1534 (quoting S. Rep. No. 79, 101st Cong., 1st Sess. 9
(1989)).  Here, Wastak is just such an individual.  After losing his job at the age of
fifty-seven, the district court imposed a $38,695.50 fee award against him at the
age of sixty-four.  The possibility of incurring such a significant fee award is
enough to make any older worker think twice before filing an age discrimination
lawsuit   even when it appears fairly clear that a waiver fails to comply with
OWBPA.  See 65 Fed. Reg. at 77443 ("even individuals who are fairly certain that
an ADEA waiver is unenforceable may choose not to bring suit simply because
they are unwilling to risk liability for damages or the employer's attorneys' fees");
see also Ford v. Temple Hosp., 790 F.2d 342, 349 (3d Cir. 1986) (partially
reversing fee award against attorney and stating that the "uncritical imposition of
attorneys' fees can have an undesirable chilling effect on an attorney's legitimate
ethical obligation to represent his client zealously").  Because of the chilling effect
that the district court's ruling in this case will have, this Court should hold that
Wastak's filing of his lawsuit after signing an enforceable waiver does not meet the
stringent bad-faith standard. 
          3.   The district court's ruling contravenes the Commission's
               regulation at 29 C.F.R. 1625.23(b).

     The district court's bad-faith finding also conflicts with the Commission's
current regulation at 29 C.F.R. 1625.23(b), which prohibits waivers from
including provisions "allowing employers to recover attorneys' fees and/or
damages because of the filing of an ADEA suit," except to the extent such fees are
"specifically authorized under federal law."  Although the district court
acknowledged the Commission's regulation, (JA4, 6/21/04 order at 1, n.1), the
court concluded that it could not rely on it because this Court already held that the
Commission adopted section 1625.23(b) after Wastak signed his waiver and that
the regulation did not apply retroactively.  (Id., citing Wastak, 342 F.3d at 294, n.7) 
The district court erred, however, in holding that this Court's ruling precluded it
from considering the regulation in determining whether Wastak acted in bad faith.  
     There are three reasons why the district court's refusal to consider the
Commission's regulation was in error.  First, Wastak was not seeking to apply
section 1625.23(b) retroactively to invalidate his waiver, as he was doing in his
first appeal to this Court.  Instead, Wastak sought to have the district court consider
the regulation to determine contemporaneously whether Wastak's August 21, 2000,
filing of his lawsuit   which occurred after the Commission published its April 23,
1999, notice of proposed rulemaking for section 1625.23(b) but before the final
rule became effective on January 10, 2001   was in bad faith.  See 65 Fed. Reg.
77438 (final rule); 64 Fed. Reg. 19952 (notice of proposed rulemaking). Second,
section 1625.23(b) clarified rather than changed the law concerning the availability
of fees to a prevailing employer.  See Clay v. Johnson, 264 F.3d 744, 749 (7th Cir.
2001) (rule clarifying unsettled areas of law may apply retroactively).  Section
1625.23(b) merely states what the courts had already concluded   that attorneys'
fees are available only if "specifically authorized under federal law," which means,
under the ADEA, if a plaintiff litigated in bad faith.  See 65 Fed. Reg. at 77442
(stating that courts have held that prevailing employers may be awarded fees if a
plaintiff litigated in bad faith; also stating that the Commission does not intend to
disturb existing law concerning fees).  The Commission's January 10, 2001,
regulation also clarified the law in the sense that it adopted the proposed rule that
the Commission published on April 23, 1999   before Wastak filed his lawsuit. 
Third, even if the regulation itself cannot be considered, the logic and reasoning
behind it compel the conclusion that the filing of a lawsuit after the signing of a
valid waiver does not constitute bad faith.  Therefore, the district court should
have considered the Commission's regulation.
     Under section 1625.23(b), waivers are precluded from imposing fees upon
employees who file ADEA actions, except if a plaintiff litigated in bad faith so that
fees would be "specifically authorized under federal law" (in other words, in "bad
faith").  The court's holding in this case, however, would render the Commission's
regulation nugatory.  In the district court's view, the filing of a lawsuit after having
signed a waiver is always in bad faith if a court rejects a plaintiff's arguments that
a waiver is unenforceable.  That is clearly contrary to the Commission's regulation,
which assumes that something more than the mere filing of a lawsuit after having
signed a waiver (even if valid) must be shown to establish bad faith.
          4.   The district court cited no relevant authority to support its
               finding.

     Finally, the district court cited no cases to support its conclusion that the
mere filing of a lawsuit after having signed a waiver that a court finds to be valid
constitutes bad faith.  The only three cases the court cited concerned a plaintiff's
litigation conduct as to the merits of the underlying age claim.  (JA2, 1/7/04 order
at 2, n.1 (citing Hoover v. Armco, Inc., 915 F.2d 355, 357 (8th Cir. 1990) (holding
that plaintiff acted in bad faith when he "brought and doggedly pursued a baseless
retaliatory discharge claim" and included time-barred demotion claim in four
amended complaints, even after the defendant raised an undisputed statute of
limitations defense), Colbert v. Yadkin Valley Tel. Membership Corp., 960 F.
Supp. 84, 87 (M.D.N.C. 1997) (holding that pursuit of claim after court pointed out
its deficiencies and dismissed it for untimeliness was vexatious and harassing,
warranting fee award), and EEOC v. Hendrix Coll., 53 F.3d 209, 211 (8th Cir.
1995) (holding that EEOC initiated suit in bad faith when it knew employer had
voluntarily changed its recordkeeping policies)).  The absence of any authority to
support the court's ruling also militates in favor of this Court finding that the court
erred in finding that Wastak acted in bad faith by filing his lawsuit.
     C.   Even if a plaintiff's initiation of an ADEA lawsuit could constitute
          bad faith when a court finds a waiver enforceable, the record does not
          support the district court's bad-faith finding in this case.
     Assuming, arguendo, that a bad-faith finding could be supported by an
ADEA plaintiff's initiation of a lawsuit following the signing of a valid waiver, the
court's finding that Wastak initiated his suit in bad faith is clearly erroneous.  See
Ford, 790 F.2d at 347 (stating that district court's finding of bad faith "is a factual
determination and may be reversed only if its clearly erroneous"; also stating that
decision to award fees upon bad-faith finding is reviewed for abuse of discretion). 
According to this Court, bad faith is shown by the "intentional advancement of a
baseless contention that is made for an ulterior purpose, e.g., harassment or delay." 
Id.  Here, the record does not support the conclusion that Wastak initiated his
lawsuit for any ulterior purpose other than to assert his rights or that he made
baseless contentions.  
     Four facts demonstrate that Wastak initiated his lawsuit in good faith, even if
he was ultimately unsuccessful in arguing that the waiver failed to comply with
OWBPA.  See Carroll v. Primerica Fin. Servs. Ins. Mktg., 811 F. Supp. 1558, 1567
(N.D. Ga. 1992) (in pre-OWBPA case, holding that employer could not sue
employees for damages based on breach of waiver agreement because plaintiffs
had good-faith belief that they signed waivers unknowingly and involuntarily). 
     First, this Court issued a lengthy published opinion addressing Wastak's
arguments that his signing of the waiver was not knowing and voluntary.  Although
these arguments were ultimately unsuccessful, this is not a case in which the
plaintiff made unfounded arguments that were summarily dispensed with in a short
unpublished opinion.  Cf. EEOC v. Clay Printing Co., 13 F.3d 813 (4th Cir. 1994)
(finding that EEOC's position was not "substantially justified" under Equal Access
to Justice Act and therefore warranted fee award where tenor of district court's
opinion was "that EEOC wasted everybody's time and was grasping at evidentiary
straws" and case did not improve on appeal).  Instead, Wastak put forth non-
frivolous arguments supported by legal authority that warranted serious
consideration by this Court.  Therefore, his initiation of his lawsuit cannot be
characterized as having been brought in bad faith.  See Hughes v. Rowe, 449 U.S.
5, 15-16 (1980) (in Title VII case with less-stringent fee standard, holding that
"[a]llegations that, upon careful examination, prove legally insufficient to require a
trial are not, for that reason alone, 'groundless' or 'without foundation' as required
by Christiansburg").
     Second, this Court agreed that section 626(f)(4) "essentially states that" a
waiver cannot interfere with the Commission's enforcement duties and "that an
employer may not invoke a waiver in an attempt to impede an employee's
participation in EEOC procedures."  Wastak, 342 F.3d at 289.  Thus, although this
Court did not think that the charge-filing ban in Wastak's waiver operated to
invalidate the waiver, the Court did agree that under section 626(f)(4) the ban could
not be enforced.  
     Third, this Court's opinion relies in part on an arbitration case the Court
decided well after Wastak initiated his lawsuit, and even after the parties filed their
appellate briefs.  See Wastak, 342 F.3d at 292 (relying on Spinetti v. Serv. Corp.
Int'l, 324 F.3d 212 (3d Cir. 2003)).  
     Fourth, the Commission, which is the agency with substantive rulemaking
and enforcement authority under the ADEA, joined Wastak in arguing on appeal
that his waiver was unenforceable because it failed to comply with OWBPA's
requirements.  Moreover, as discussed above, under the Commission's current
regulations, waiver agreements such as Wastak's are unenforceable if they contain
provisions prohibiting employees from filing a charge.  See 29 C.F.R. 
1625.22(i)(2)(i). 
     In short, Wastak had a good-faith belief that his waiver did not comply with
OWBPA and that he therefore was not breaching it by filing suit.
                           CONCLUSION
     Because the district court's ruling contravenes the language and policy
underlying the ADEA and conflicts with the Commission's regulations, this Court
should find that the district court erred in concluding that Wastak's initiation of his
lawsuit was in bad faith because this Court rejected his arguments that the waiver
failed to satisfy OWBPA's requirements.  To hold otherwise would have a chilling
effect on age discrimination victims.  Even those workers whose waivers
reasonably appear to be invalid and who appear to have strong cases of age
discrimination will hesitate to file suit if they know that doing so can expose them
to a fee award.  Therefore, this Court should find that the district court's bad-faith
finding cannot rest on Wastak's filing of his lawsuit after he signed a waiver that
this Court found to be enforceable.

          Respectfully submitted,
          ERIC S. DREIBAND
          General Counsel
          
          LORRAINE C. DAVIS
          Acting Associate General Counsel 
          
          CAROLYN L. WHEELER
          Assistant General Counsel
          
          
          __________________________
          ANNE NOEL OCCHIALINO
          Attorney
          U.S. EQUAL EMPLOYMENT
             OPPORTUNITY COMMISSION
          1801 L Street, NW, Room 7030
          Washington, DC 20507
          (202) 663-4724

                   CERTIFICATE OF COMPLIANCE
     I certify that this brief complies with the type-volume limitation set forth in
Fed. R. App. P. 32(a)(7)(B).  This brief contains _________ words.

     ____________________________
     ANNE NOEL OCCHIALINO
     Attorney
     U.S. EQUAL EMPLOYMENT
          OPPORTUNITY COMMISSION
     Office of General Counsel
     1801 L Street, NW, Room 7030
     Washington, DC 20507
     (P) (202) 663-4724
     (F) (202) 663-7090                      CERTIFICATE OF SERVICE
     I certify that on October ___, 2004 I served copies of this brief by mailing
them overnight mail to the following:
Office of the Clerk
United States Court of Appeals for the Third Circuit
21400 U.S. Courthouse
601 Market Street
Philadelphia, PA 19106-1790

Attorney for Plaintiff-Appellant
Donald P. Russo
117 East Broad Street
P.O. Box 1890
Bethlehem, PA 18016

Attorney for Defendant-Appellee
Jonathan B. Sprague
Post & Schell
1800 John F. Kennedy Boulevard
19th Floor
Philadelphia, PA 19103

                                   
                                   ____________________________
                                   ANNE NOEL OCCHIALINO
                                   Attorney
                                   U.S. EQUAL EMPLOYMENT
                                     OPPORTUNITY COMMISSION
                                   Office of General Counsel
                                   1801 L Street, NW, Room 7030
                                   Washington, DC 20507
                                   (P) (202) 663-4724
                                   (F) (202) 663-7090

_______________________________________________

1  This Court signaled in its original opinion in this case,
 which was subsequently vacated, that it agreed that fees 
should be awarded to prevailing defendants in age discrimination
 cases upon a showing of bad faith.  See Wastak v. Lehigh Valley
 Health Network, 333 F.3d 120, 133 n.7 (3d Cir. 2003).

2  This language is found in Judge Joness concurring opinion that
 expressed the holding of the court on the tender-back doctrine,
 which the majority held is an effective bar to suit and as such,
 it is incongruous with the intent of the OWBPA.  Raczak, 103 F.3d
 at 1271, 1258; id. at 1258 (Guy, J.) (concurring in result reached
 by Judge Jones).

3  Losing plaintiffs are already subject to awards of costs, which,
 as in this case, can run into the thousands of dollars.  See Fed.
 R. Civ. P. 54(d)(1) (costs other than attorneys fees shall be allowed
 as of course to the prevailing party unless the court otherwise
 directs).  Accordingly, cost awards themselves serve as a deterrent
 to the filing of baseless claims.

4  For the same reason, it is appropriate for the Court to look
 at the Commissions December 11, 2000, commentary that accompanied
 the adoption of section 1625.23(b).  See 65 Fed. Reg. 77438.