2007 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

5-14-2007

Jakimas v. Hoffmann - La Roche

Precedential or Non-Precedential: Precedential

Docket No. 06-2399

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PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

 

No. 06-2399

 

RICHARD JAKIMAS; DIANNE FLYNN,

Association Member;

LOUIS RISTAGNO, Association Member;

ALL OTHER ASSOCIATION MEMBERS;

JOHN M. ADAIR; JOHN J. ADZIMA; BRUCE J. AIELLO;

THOMAS AIELLO; JACK BAILEY;

GERALD A. BARRETT; WALTER BENIUK;

BRUCE BLANCHARD; RENE REIS BRAGA;

TEDEUSZ BUKOWSKI; EDWARD CABRAL;

ANGELO CAPALBO; RICHARD CARLSON;

RALPH CASO; JAMES CASTELLI;

SAMUEL CASTRONOVO, JR.; PETER CHAPMAN;

PAUL D. CIUPPA; GARY COCOZZO; LAURA CARBO;

ALAN L. CURTIS; PAUL DAY; CHARLES DELORENZI;

PETER DEMODICA, III; JOSEPH DIGIACOMO;

STEFAN DZIABA; WALTER DZIABA;

MICHAEL FARON; RAMOND J. FEINER;

ANDREW FERACO; PAUL FRANEK;

LAWRENCE GELOK; ROBERT L. GLOVER;

RAYMOND GOETZ; JOSEPH GOMES;

ANTHONY GRECO; DANIEL GREEN;

JOHNNY HADDLEY; WILLIAM J. HAHN;

RICHARD HALL; DAVID HANRAHAN;

DEBORAH HELFRICH; RONALD JONES;
2

ALOJZY KALATA; JAMES F. KANE;

JOSEPH M. KAPROWSKI; BERNARD KAPUSCINSKI;

JAN KASPROWICZ; MICHAEL KENNEDY;

ROBERT J. KOHLER; EDWARD KWASNIK;

FLAVIO LABAGNARA; ROSA LABAGNARA;

ROBERT J. LENIK; WOJCIECH LEOZENIA;

JOSEPH MACDIARMID; JAMES F. MADIGAN;

WILLIAM R. MALLOY, SR.; ALBERT A. MARCHIONE;

ANTHONY MARIANO; EDWARD B. MAYO;

HENRY M. MCAULIFFE; MIKE MEECHAN;

STEPHEN E. MELLINGER; LAWRENCE MEMICE;

DONALD A. MEYER; ROBERT P. MUNDT;

NICK NARDONE; CHERYL NEGRON;

JOSEPH M. OROLEN; EDWARD PAJAK;

ROBERT PAVONE; ROGER M. PERRI;

FRANK J. PETRASEK; WILLIAM PITT;

PETER PLAFTA; JULIAN POKRYWA;

RONALD POKRYWA; ROQUE N. RIVERA;

ANTONIO RIZZI; BARBARA ROBINSON;

SAMUEL ROSAMILIA; ROGER ROTONDI;

CHUCK L. RUTAN; ALBERT RYBACKI;

ANDREW J. SACCOCCIA; JAN SERAFIN;

ROBERT SHALLCROSS; MARTHA X. SKINNER;

DONALD D. SMITH; ANTHONY SPAGNUOLO;

ANTHONY J. SPANO; SARA SPANO;

ANTHONY SPERA; NATALE TURANO;

STEPHEN R. TYBURCZY; ROBERT J. VELEBER, JR.;

WILLIAM VILLINO; MICHAEL A. VOCATURO;

MARIAN WOJCIECHOWSKI; LEONARD A. ZUMMO;

RICKI BLOHM; FRANK CAVALIERE;

CHARLENE JOHNSON; DONALD BREEN;
*

The Honorable David D. Dowd, Jr., United States

District Judge for the Northern District of Ohio, sitting by

designation.

3

JOHN TOMASKOVIC,

 Appellants

 v.

HOFFMANN-LA ROCHE, INC.;*

JOHNSON CONTROLS WORLD SERVICES, INC.

 (*Amended per Clerk's order of June 6, 2006)

 

On Appeal from the United States District Court

for the District of New Jersey

(D.C. No. 99-cv-05126)

District Judge: Honorable Jose L. Linares

 

Argued February 15, 2007

Before: SMITH and FISHER, Circuit Judges,

and DOWD,* District Judge.

(Filed: May 14, 2007)
4

Charles J. Sciarra (Argued)

Sciarra & Catrambrone

1130 Clifton Avenue

Clifton, NJ 07013

Attorney for Appellants

John A. Ridley (Argued)

Drinker, Biddle & Reath

500 Campus Drive

Florham Park, NJ 07932

Attorney for Appellee,

Hoffman-La Roche, Inc.

Dabney D. Ware

Allan P. Clark (Argued)

Foley & Lardner

200 Laura Street

The Greenleaf Building

Jacksonville, FL 32202-0204

Attorneys for Appellee,

Johnson Controls World Service, Inc.

 

OPINION OF THE COURT

 
1

Johnson Controls World Services, Inc. was a subsidiary

of Johnson Controls, Inc. The parties and the District Court

referred to Johnson Controls World Services, Inc. as “JCI” and

we use the same acronym.

5

FISHER, Circuit Judge.

The Appellants, former employees of Hoffman-La Roche

Inc. (“Roche”), appeal the District Court’s grant of summary

judgment in favor of Roche and Johnson Controls World

Services, Inc. (“JCI”) (collectively “Appellees”),1

 regarding

their claims under the Employee Retirement Income Security

Act (“ERISA”) and the New Jersey Law Against Discrimination

(“NJLAD”). Roche asserts the affirmative defenses of a release

and tender back/ratification, which were rejected by the District

Court, as alternative grounds upon which to affirm the District

Court. For the reasons that follow, we will affirm.

I.

A.

Roche is a prescription drug manufacturer, and JCI is

engaged in the business of integrated facility management. The

Appellants are approximately ninety-six former employees of

Roche who were terminated on November 3, 1997. The

Appellants were terminated after Roche decided to outsource

some functions of its Technical Services Division to JCI. JCI

began managing the outsourced services on November 4, 1997.

The majority of the Appellants were hired by JCI in the same

position that they held at Roche.
6

The circumstances surrounding Roche’s decision to

outsource are the basis for the Appellants’ claims. After

becoming Vice President of Roche’s Technical Services

Division in the summer of 1996, Ray Scherzer (“Scherzer”)

determined that there were infrastructure problems, and that the

practices and processes of the Division were outdated. In late

1996, he contacted JCI and inquired about JCI’s facilities

management services. JCI first provided Scherzer with a

preliminary assessment, which was an overview of how JCI

could improve Roche’s facilities management operations.

JCI offered to provide a more detailed analysis, which

included a six-week on-site assessment of Roche’s facilities.

This assessment was conducted during June and August of

1997. The findings, recommendations, proposed budget, and

information about the proposed outsourcing were provided to

Roche in late August and early September of 1997. JCI also

submitted a proposed Facilities Management Agreement

(“Agreement”) to Roche in late September, and Scherzer

presented this information to Roche executives on October 15,

1997. Scherzer recommended that Roche accept the Agreement,

which would outsource most of the functions of the Technical

Services Division to JCI. The Roche executives agreed. Under

the Agreement, JCI supplied facilities management services, and

Roche reimbursed JCI for its services. Roche agreed to

reimburse JCI for labor related costs, other direct costs, and to

pay an annual general and administrative fee. JCI also agreed

to hire most of the employees Roche terminated due to the

outsourcing.
2

A separate meeting was held for supervisors and

managers.

7

On October 20, 1997, Roche held a meeting, at which it

informed employees of its decision to outsource some technical

services to JCI.2

 Scherzer made the announcement on behalf of

Roche, and explained that Roche had decided to outsource the

positions in its Technical Services Division to JCI. He stated

that JCI would begin managing maintenance on November 4,

1997. Scherzer claims it was made clear that the Appellants’

and others’ jobs would be terminated on November 3, 1997.

The presentation allegedly explained that Roche would be

providing severance packages to the affected employees, and

that the affected employees would be eligible to work for JCI,

with compensation and benefits packages comparable to what

they received at Roche. Additionally, Scherzer claims that he

informed the audience that the affected employees would remain

Roche employees until November 3, but during that time JCI

would be interviewing each employee. After Scherzer spoke, a

representative from Roche’s Human Resources Department

spoke, as did representatives from JCI.

A formal written notice was sent company-wide by

Scherzer on October 21, 1997, confirming the outsourcing. The

letter was addressed to all Roche employees, and explained that

Roche had decided to outsource various groups. The letter listed

the specific departments being outsourced. It also explained that

beginning November 4, 1997, JCI would assume control of

those groups, and that JCI had agreed to consider employing all

of the current Roche employees in those groups. Further, it

explained that until November 3, 1997, the affected employees
3

Roche provided the affected employees with forty-five

days to decide whether to execute the release under Option II,

and an additional seven days in which they could revoke their

acceptance.

8

would continue to be employed by Roche, but that JCI would be

on-site to interview them.

The following week, JCI began to interview and make

employment offers to the affected Roche employees. As a

condition of employment, the prospective JCI employees were

required to sign several documents, including (1) an offer letter

which stated that the employee accepted employment with JCI

commencing on November 4, 1997, (2) an authorization form

providing that Roche could release personnel information to JCI,

(3) a “Conditions of Employment” pamphlet, (4) a form

indicating that the employee received and understood JCI’s

Employee Safety Guide, (5) a form indicating that the employee

was aware of and understood JCI’s drug-free workplace policy,

and (6) a W-4 form.

Roche provided individual notices to the affected

employees on November 3 that stated “[t]his will confirm that

the official notification and effective date of the termination of

your employment is November 3, 1997.” They also received

information about Roche’s severance package. The severance

package provided the affected employees with two options.

Option II was an enhanced package, if the employee was willing

to sign a release. The release included a covenant not to sue

Roche for claims relating to ERISA, state employment

discrimination laws, and employment contracts.3

 Even if the
4

At the time the Appellants were terminated by Roche,

sixty of them were over age forty-five. Forty-seven of them had

between twenty and twenty-four years of service, and fifteen

had between fifteen and twenty years of service with Roche.

5

Roche had both defined benefit and defined contribution

plans. The Roche Retirement Plan is a defined benefit plan, to

which all contributions were made by Roche. For an employee

to be vested under the Roche Plan, they needed five years of

service. In order to receive full retirement benefits, the

employee needed to reach a set age and have a set number of

years of service. If the employee was hired before April 1,

1985, and she/he had ten or more years of service, the employee

was eligible for retirement at age fifty. If the employee was

hired after April 1, 1985, she/he was eligible for retirement at

age fifty-five if she/he had ten or more years of service. Roche

also offered its employees 401(k) plans.

9

affected employees chose not to sign the release, they were still

entitled to the benefits offered in Option I. Only one of the

Appellants, Martha Skinner, did not sign the release. All of the

Appellants that did sign the release received the benefits to

which they were entitled under Option II.

On November 4, 1997, most of the Appellants began

working for JCI.4

 The Appellants’ jobs were exactly the same

at both employers, as were their job titles. The only change,

other than that they no longer received pension benefits, was

their employer.5

 JCI generally offered its employees 401(k)

plans, but an employee was only eligible for such a plan after

five years of service. Because the Agreement was only for three
6

In their original Complaint, the Appellants claimed that

they received notice of their terminations on October 21, 1997,

which was the basis for the motion to dismiss. When the

Appellants amended their Complaint, they deleted this portion

of the original Complaint.

10

years, the former Roche employees were not eligible to

participate in a 401(k) at JCI.

B.

The Appellants filed their Complaint on November 1,

1999, in which the November Third Termination Association

and three individuals were named as plaintiffs.6

 The Appellees

made a motion to strike the Association as a party, and a motion

to dismiss the Association’s claims because it lacked standing.

The District Court granted the motions. The magistrate judge

allowed the Appellants to amend their Complaint and add

additional individual plaintiffs. However, he did not allow

David Swidrak (“Swidrak”) to be named as a plaintiff because

the judge determined that his claim was time-barred. The

determination was based on the fact that Swidrak admitted that

he knew of his pending termination on October 20, 1997, as

evidenced in a letter he wrote to Roche’s Human Resources

Department.

The Appellants appealed the magistrate’s determination

regarding Swidrak to the District Court. They argued that the

date of termination, rather than the date of notice began the

running of the limitations period. The District Court held that

the date of notice is when the statute of limitation begins to run.
7

The Appellants appealed the District Court’s

determination regarding Swidrak to this Court, and we held that

the claim was unripe.

8

The affirmative defenses were (1) knowing and

voluntary waiver by signing the releases, (2) ratification of the

releases by failing to return the benefits received, and (3) statute

of limitations grounds.

11

Its decision was based on Delaware State College v. Ricks, 449

U.S. 250 (1980), and Chardon v. Fernandez, 454 U.S. 6 (1981)

(per curiam). Because the District Court determined that

Swidrak received actual notice of his pending termination on

October 20, 1997, it affirmed the magistrate’s determination that

Swidrak’s claim was time-barred as the Complaint was not filed

until November 1, 1999. Additionally, the District Court

refused the Appellants’ request that its decision regarding

accrual of the claim apply prospectively only.7

All of the parties moved for summary judgment in 2005.

Roche moved for summary judgment on the Appellants’ ERISA

and state law claims, and on its affirmative defenses.8

 JCI

moved for summary judgment on the ERISA claim, which was

the only claim against JCI. The Appellants also moved for

summary judgment on the substantive claims, as well as on

Roche’s affirmative defenses.
9

Even though it had already decided the question, the

District Court determined that the law of the case doctrine did

not prevent reconsideration of the question because there was

new evidence uncovered through discovery. See, e.g., Pub.

Interest Research Group of N.J., Inc. v. Magnesium Elektron,

Inc., 123 F.3d 111, 116-17 (3d Cir. 1997).

12

The District Court first considered the statute of

limitations question.9

 Because the parties did not dispute that a

two-year statute of limitations applied, the District Court was

required to determine when the claim began to accrue. If the

statute began to run before November 1, 1997, the claim was

time-barred. The District Court reaffirmed its prior holding that

the rule of Ricks applies in the context of a § 510 ERISA claim,

and therefore the claim accrued when the Appellants received

notice of their termination.

The District Court next determined when the Appellants

received such notice. The Appellees served the Appellants with

Requests for Admissions in which thirty-seven of the Appellants

admitted that they had notice of their termination prior to

November 1, 1997. Two additional Appellants admitted notice

prior to November 1, 1997, in correspondence with Roche. The

District Court also determined that sufficient notice was

provided at the October 20, 1997 meeting. Forty-seven of the

Appellants admitted attending the meeting by Requests for

Admissions, and two Appellants admitted attendance during

depositions. The District Court held that even if the Appellants

did not attend the meeting, the October 21, 1997 letter to all

employees constituted actual notice of termination.

Additionally, JCI began interviewing and offering jobs to Roche
10The District Court refers to this Appellant as Michael

Meecham, but the parties refer to him as Michael Meechan. We

use the parties’ spelling of the last name.

11Meechan and the other Appellants could not roll over

their 401(k) plans with Roche to an outside investment company

without serious tax consequences because of an Internal

Revenue Code rule. The rule requires a separation from service

in order for an individual to be able to transfer his or her 401(k).

It treats the type of transition in this case under the “same desk

rule,” meaning that there is no separation from service, because

13

employees. Nine of the ten remaining Appellants admit that

they applied for employment with JCI before November 1,

1997, and delivered their acceptance letters to JCI before that

date. The District Court determined that the remaining

Appellant, Michael Meechan,10 did not receive notice of his

pending termination because he was on disability leave at the

time notice was provided. Accordingly, the District Court

granted summary judgment in favor of the Appellees on the

statute of limitations defense as to all of the Appellants, except

for Meechan.

Because Meechan’s claims were not time-barred, the

District Court also considered Roche’s other affirmative

defenses of the release, and tender back/ratification. Appellant

Meechan signed the release, and did not return the consideration

Roche provided. The District Court held that genuine issues of

material fact existed as to the validity of the release because it

was not clear whether Meechan knew that his 401(k) funds were

not transferrable when he signed the release.11 Additionally, the
the Appellants continued to perform substantially the same job

at substantially the same salary.

12The District Court did not reach JCI’s argument that it

is not a proper party in a § 510 of ERISA claim because the

alleged conspiracy claim is not cognizable under the law.

13The District Court did not reach Roche’s argument that

the state law claim was preempted by ERISA.

14

District Court determined that Meechan did not have to tender

back the consideration for the release in order to bring claims

against Roche.

The District Court then reached the claim that Roche and

JCI entered into the Agreement in order to interfere with

pension benefits in violation of § 510 of ERISA. It held that

Meechan failed to prove a prima facie case of specific intent to

interfere with pension benefits. Regardless, the District Court

determined that Roche articulated legitimate non-discriminatory

reasons for its decisions ! technical and financial reasons.

Meechan failed to prove that these reasons were pretext, and

therefore the Appellees’ motion for summary judgment on the

merits of the ERISA claim was granted.12 Finally, the District

Court also granted summary judgment in favor of Roche as to

the state law discrimination claim.13 It held that there was

simply insufficient evidence to prove that Roche terminated

Meechan on the basis of age.

The Appellants brought this timely appeal.
15

II.

We have jurisdiction over this appeal pursuant to 28

U.S.C. § 1291. Our review of a district court’s grant of

summary judgment is plenary. NBT Bank Nat’l Ass’n v. First

Nat’l Cmty. Bank, 393 F.3d 404, 409 (3d Cir. 2004). We apply

the same standard employed by a district court, and view the

facts in the light most favorable to the non-moving party.

Moore v. City of Philadelphia, 461 F.3d 331, 340 (3d Cir. 2006).

However, the non-moving party must present more than a mere

scintilla of evidence; “there must be evidence on which the jury

could reasonably find for the [non-movant].” Anderson v.

Liberty Lobby, Inc., 477 U.S. 242, 252 (1986). If the nonmoving party “fails to make a showing sufficient to establish the

existence of an element essential to [the non-movant’s] case, and

on which [the non-movant] will bear the burden of proof at

trial,” summary judgment is proper as such a failure “necessarily

renders all other facts immaterial.” Celotex Corp. v. Catrett,

477 U.S. 317, 322-23 (1986).

III.

The Appellants claim that the District Court erred by

(1) determining that the statute of limitations was triggered

when the Appellants received notice of their pending

termination, (2) granting summary judgment in favor of Roche

and JCI on the § 510 ERISA claim, and (3) granting summary

judgment in favor of Roche and JCI on the state law

discrimination claim. Roche offers other affirmative defenses,

release and tender back/ratification, as alternative bases for

affirming the grant of summary judgment. JCI claims that § 510
16

does not allow a conspiracy cause of action, as an alternative

theory for the grant of summary judgment. Additionally, Roche

also claims that the state law claim was preempted by ERISA.

A.

The first issue we must address is whether a claim for

termination in violation of § 510 of ERISA accrues when the

employee is given actual notice of the pending termination or

when the employee is actually terminated. As § 510 does not

provide a statute of limitations, the statute of limitations is

borrowed from state law. Gavalik v. Cont’l Can Co., 812 F.2d

834, 843 (3d Cir. 1987). In this case, the parties agree that the

applicable statute of limitations under New Jersey law is two

years. The question of when the statute began to run, however,

is governed by federal common law. Romero v. Allstate Corp.,

404 F.3d 212, 221 (3d Cir. 2005). When a claim accrues in the

context of a § 510 unlawful termination is a question of first

impression for this Court.

In Tolle v. Carroll Touch, Inc., 977 F.2d 1129 (7th Cir.

1992), the United States Court of Appeals for the Seventh

Circuit addressed this issue. Tolle was informed orally on

September 19, 1984, that she would be terminated on

October 19, 1984. Id. at 1132. A written confirmation of this

information was provided to Tolle on September 24, 1984. The

court of appeals was asked to consider when Tolle’s claim

accrued. Id. at 1138. The district court determined that the

claim arose on September 19 or 24, 1984, when Tolle was

informed that she would be terminated. However, Tolle argued

that the claim should not accrue until a claim for benefits was
14It also noted that most courts of appeals apply state

employment discrimination or wrongful termination statutes of

limitations to § 510 claims for the same reason. Id. at 1137-38.

17

denied. Id. at 1139. The court of appeals explained that it had

to first determine what the alleged unlawful conduct was and

when it happened. The next step was to determine when Tolle

learned of the injury that resulted from the unlawful act.

The court of appeals in Tolle explained that the purpose

of § 510 of ERISA was to prevent individuals or entities from

interfering with a plan participant’s ability to collect benefits to

which he or she is entitled or from interfering with such a

participant’s ability to collect benefits to which he or she may

become entitled. Therefore, under § 510, a defendant “can be

liable for unlawful interference before the participant becomes

entitled to benefits under the terms of the plan.” Id. (emphasis

in original). Tolle claimed that her termination was the unlawful

conduct because it was allegedly done to avoid paying her

benefits, and the court agreed. Id. at 1140. The court next

considered when the claim accrued. It looked to the Supreme

Court’s decision in Ricks for guidance. The court explained that

in Ricks, the Supreme Court held that a Title VII claim accrues

at the time the employment decision was made, not at the time

the injury or consequences of that decision are felt. Id. The

court of appeals analogized the § 510 claim to intentional

employment discrimination cases ! it explained that the purpose

of § 510, like employment discrimination statutes, is to prevent

actions that are taken for an illegal purpose.14 “[I]t is the illegal

decision and the participant’s discovery of this decision that

dictates accrual.” Id. at 1140-41. In other words, Tolle’s claim
15There are cases that seem to use the date of termination

as the date that the claim accrued; however, such cases are not

clear as to whether notice of the pending termination was

provided. See, e.g., Anderson v. Consol. Rail Corp., 297 F.3d

242, 251 (3d Cir. 2002) (stating parties agreed that plaintiffs

were involuntarily terminated in July of 1995); Musick v.

Goodyear Tire & Rubber Co., 81 F.3d 136, 137 (11th Cir. 1996)

(holding plaintiff’s claim was time-barred and apparently using

date of layoff as date of accrual); Heideman v. PFL, Inc., 904

F.2d 1262, 1267-68 (8th Cir. 1990) (stating that plaintiffs’

claims accrued at the time of termination). Therefore, these

cases do not offer much guidance on the issue before us.

18

accrued when the employer made its decision and

communicated the decision to Tolle. Id. Therefore, the court of

appeals held that Tolle’s claim accrued at the latest on

September 24, 1984, when she received the formal notice of her

termination. Id. at 1141.

We agree with the Seventh Circuit that the accrual rule

from Ricks should determine accrual in the context of a § 510

claim. See also Edes v. Verizon Commc’ns, Inc., 417 F.3d 133,

139 (1st Cir. 2005) (adopting Tolle accrual rule for § 510

termination claims).15 We are further persuaded that this is the

proper time of accrual because of the Supreme Court’s decision

in Chardon. 454 U.S. 6. In Chardon, the plaintiffs were

“nontenured administrators in the Puerto Rico Department of

Education during the 1976-1977 school year.” Id. at 6-7.

Before June 18, 1977, each of the plaintiffs was sent a letter that

he would be terminated on a specific date between June 30 and

August 8, 1977. The plaintiffs filed their complaint on June 19,
19

1978, claiming that their terminations violated § 1983. If Ricks

applied, the one-year statute of limitations began to run when

the plaintiffs received their letters, and therefore their claims

were time-barred. The United States Court of Appeals for the

First Circuit held that Ricks did not apply because the unlawful

action in Ricks was the denial of tenure while the unlawful

action in Chardon was termination. Id. at 7-8. The Supreme

Court reversed the court of appeals and explained that Ricks was

indistinguishable. It explained that in both cases, the decision

was made and the plaintiffs were provided with notice of their

eventual termination. Id. at 8. The Court explained that

advance notice of termination “is a customary and reasonable

employment practice which affords the employee an opportunity

to find another job.” Id. n.2. It also reiterated its analysis in

Ricks that the focus is on the discriminatory act, not when the

effects of the act are felt. Id. at 8.

The fact of termination is not itself an illegal act.

In Ricks, the alleged illegal act was racial

discrimination in the tenure decision. Here,

[plaintiffs] allege that the decision to terminate

was made solely for political reasons, violative of

First Amendment rights. There were no other

allegations, either in Ricks or in these cases, of

illegal acts subsequent to the date on which the

decisions to terminate were made. As we noted in

Ricks, “[m]ere continuity of employment, without

more, is insufficient to prolong the life of a cause

of action for employment discrimination.” In the

cases at bar, [plaintiffs] were notified, when they

received their letters, that a final decision had
16The Appellants assert that a holding that notice, rather

than termination, triggers the statute of limitations ignores the

fact that plaintiffs in this situation could not bring a claim until

they were actually terminated. However, this argument is

20

been made to terminate their appointments. The

fact that they were afforded reasonable notice

cannot extend the period within which suit must

be filed.

Id. (internal citations omitted).

Based on our adoption of this accrual rule for § 510

claims, we must first determine what constituted the allegedly

unlawful conduct in this case. Although it could be argued that

the termination is the allegedly illegal act in this case, it is

actually true that the termination itself was not illegal. Rather,

it is termination with the intent to deprive the Appellants of

future benefit rights that is the allegedly illegal conduct. There

is no evidence that suggests there was illegal conduct after

Roche made the decision to outsource. The fact that the

termination was not immediate should not prevent the claim

from accruing. As the Supreme Court explained in Chardon,

employers often provide notice prior to termination. Such

notice provides an affected employee with the opportunity to

find another job. This advance notice, which arguably was for

the benefit of the Appellants, should not extend the limitations

period in this case. Therefore, we hold that when an employee

is terminated in violation of § 510 of ERISA the claim accrues

when the decision to terminate is made and the employee is

informed of the pending termination.16
simply wrong. Section 502(a) of ERISA is the vehicle by which

a plaintiff may bring suit for a violation of § 510. See IngersollRand Co. v. McClendon, 498 U.S. 133, 143 (1990). Under

§ 502(a) a plan participant may “enjoin any act or practice

which violates any provision . . . .” 29 U.S.C. § 1132(a)(3).

Therefore, once an affected employee receives notice that he or

she will be terminated, the participant can file for an injunction

to prevent the termination if it is due to illegal motives.

17In its opinion, the District Court used the language of

the discovery rule ! whether the Appellants knew or should

have known that Roche was terminating them. Although we

reach the same result as the District Court, we are not convinced

that the use of the discovery rule is appropriate in this context.

As discussed above, both Ricks and Tolle suggest that a claim

accrues when the employer decides to terminate the employee

and notifies the employee of the decision. These cases could be

interpreted as requiring that the employer provide the employee

with actual notice of termination. As this question is not

21

The second-step of the analysis is determining when

notice was provided. In this case, the Appellants do not dispute

the District Court’s findings as to when each of the Appellants

received notice. Rather, the Appellants argue that the notice

Roche provided was insufficient. As the statute of limitations

is two years in this case, and the Complaint was not filed until

November 1, 1999, if the Appellants received proper notice

prior to November 1, 1997, of their pending terminations, their

claims are time-barred. Therefore, we must consider whether

Roche provided the Appellants actual notice of their pending

terminations.17
necessary to our holding, we will assume, without resolving the

question, that an employer must provide actual notice to

employees to constitute accrual of an ERISA claim.

22

Some of the Appellants admitted either in the Appellees’

Requests for Admissions or in correspondence with Roche that

they had actual knowledge prior to November 1, 1997, of

Roche’s decision to terminate their positions. It is clear that

such Appellants had actual knowledge of Roche’s decision to

terminate them. By their own admission, these Appellants’

claims are time-barred.

The next group of Appellants are those who attended

Roche’s October 20, 1997 meeting where the decision to

outsource was announced. Some of the remaining Appellants

admitted in the Request for Admissions that they attended the

meeting and that the decision to outsource the functions of their

departments was announced. Other Appellants admitted only

that they attended the meeting. The record demonstrates that

Scherzer informed the audience that Roche was outsourcing the

functions of certain departments to JCI, that he informed the

audience that they would remain as Roche employees until

November 3, 1997, that they would be eligible for employment

with JCI, and that JCI would interview potential employees in

the following weeks. A representative from JCI also spoke at

the meeting.

Additionally, Roche sent a letter to all employees

announcing the outsourcing on October 21, 1997. The letter

included all of the departments that would be outsourced, that

the affected employees would remain Roche employees until
18The Appellants also claim that a rule that notice triggers

the statute of limitations in the context of a § 510 termination

case should be applied prospectively only. We see no reason in

this case to depart from the general rule of retroactive

application. See, e.g., Harper v. Va. Dep’t of Taxation, 509 U.S.

86, 95-98 (1993).

23

November 3, 1997, that the affected employees would be

eligible for a new position at JCI, and that JCI would be

conducting interviews on-site during the following weeks. The

letter clearly indicated that employees in the listed departments

were losing their jobs with Roche. We find that the information

provided at the meeting and the company-wide letter provided

actual notice to the Appellants of Roche’s decision to terminate

their positions.

Another group of Appellants admitted that they applied

for employment with JCI, received offer letters from JCI, and

signed and delivered the letters to JCI, all prior to November 1,

1997. We also find that this group of Appellants had actual

notice prior to November 1, 1997, that their positions at Roche

were being terminated.

The only Appellant who did not receive some form of

notice is Appellant Meechan. Meechan was on disability leave

during the relevant time period and the Appellees concede that

he did not receive any form of notice regarding his pending

termination until after November 1, 1997. Therefore, all of the

Appellants’ claims are time-barred, except for Meechan’s

claims.18
19The Appellants claim that we cannot consider these

affirmative defenses because Roche did not cross-appeal the

District Court’s rejection of the defenses. We disagree. It is not

necessary for the prevailing party to file a cross-appeal in order

to raise arguments to support a district court’s judgment on any

ground, even one rejected by the district court. See, e.g., Rite

Aid of Pa. v. Houstoun, 171 F.3d 842, 853 (3d Cir. 1999);

Cospito v. Heckler, 742 F.2d 72, 79 n.8 (3d Cir. 1984).

24

B.

The next issue on appeal is whether Roche’s other

affirmative defenses of the release and tender back/ratification

prevent Meechan from bringing his claims. Meechan signed the

release and accepted the additional benefits Roche offered under

Option II. Therefore, we must determine whether his signing of

the release or his failure to return the consideration Roche

provided bars him from bringing this suit. The District Court

rejected these defenses and we agree.19

As to the release, the District Court found that genuine

issues of material fact existed as to whether the Appellants knew

when they signed the releases that their 401(k) funds were not

transferrable. On appeal, Roche does not claim that there are no

genuine issues of material fact. In fact, Roche admits that “at

the very least, an issue of fact [exists] as to when Appellants

first learned of the issue (i.e., before or after they executed the

releases and/or the revocation period expired).” Rather, Roche

argues that not a single Appellant has explained whether

information about the tax consequences would have changed his

decision to sign the release. Therefore, Roche claims that this
25

is an immaterial issue and we should enforce the releases and

dismiss the Appellants’ claims.

A release must be made knowingly and voluntarily, see,

e.g., Coventry v. U.S. Steel Corp., 856 F.2d 514, 522 (3d Cir.

1988), and although a totality of the circumstances test is used

to determine the validity of a release, we also consider “whether

there is evidence of fraud or undue influence, or whether

enforcement of the agreement would be against the public

interest.” Id. at 522-23. Genuine issues of material fact exist as

to whether and when the Appellants, specifically Meechan, were

informed or misinformed about their ability to roll-over their

401(k)s. Meechan, and all of the Appellants, assert that they

would have acted differently had they known of the tax

consequences. Therefore, Roche’s claim that there is no

evidence that the Appellants would have acted differently is

without merit. The burden is on Roche, as the party seeking

summary judgment, to prove that no genuine issues of material

fact exist, and Roche has not met this burden because it admits

that such issues exist. Additionally, as the issue of the release

is an affirmative defense the burden of proving that it was

knowingly accepted is on Roche. See Fed. R. Civ. P. 8(c).

Roche has failed to meet its burdens and therefore summary

judgment was properly denied on this affirmative defense.

Roche asserts that even if we find that the release was

invalid, the doctrine of tender back/ratification bars Meechan’s

claims. The theory of ratification is that a promise can be

enforced even though the underlying contract is voidable if it is

ratified by the promisor. See Wasley v. Champlin Refining &

Chems., 11 F.3d 534, 538 (5th Cir. 1993). This means that the
26

promisor has the power to avoid the contract or to ratify it by

making a new one. Id. at 538-39. Tender back is a related

concept, which provides that if the promisor does not return the

consideration received under the contract this is effectively

ratification. See Raczak v. Ameritech Corp., 103 F.3d 1257,

1265 (6th Cir. 1997). As noted above, it is undisputed that

Meechan has not returned the consideration that he received as

severance benefits under Option II. Therefore, we must

determine whether the common law principles of tender

back/ratification apply to this case. This is an issue of first

impression for this Court.

In Hogue v. Southern R. Co., 390 U.S. 516 (1968) (per

curiam), the Supreme Court refused to apply the tender back

doctrine to a case under the Federal Employees Liability Act

(“FELA”). The plaintiff was injured on the job, and signed a

release which gave him $105 for his injury. Id. at 517. The

plaintiff did not return the money before he brought suit. The

Court explained that whether tendering back of the

consideration before bringing suit was required is a question of

federal law. Id. The requirement of tendering back

consideration is excusable in multiple situations, such as when

there is fraud or mutual mistake. The Court reached its decision

because it explained that “a rule which required a refund as a

prerequisite to institution of suit would be ‘wholly incongruous

with the general policy of the Act to give railroad employees the

right to recover just compensation for injuries negligently

inflicted by their employers.’” Id. (internal citation omitted).

The Court determined that a holding that the consideration paid

will be deducted from any award to the injured party was more

consistent with the purpose of the Act.
27

In Long v. Sears Roebuck & Co., 105 F.3d 1529 (3d Cir.

1997), we considered tender back and ratification in the context

of the Age Discrimination in Employment Act (“ADEA”). Id.

at 1539-40. Although part of our discussion was based on the

Older Workers Benefit Protection Act (“OWBPA”), which

amended the ADEA, we also addressed more general issues

which are relevant in the context of ERISA. We looked to the

decision in Hogue for guidance. Id. at 1540-41. We noted that

“courts have regularly applied the analysis in Hogue to reject

tender requirements in lawsuits brought under a variety of

federal remedial statutes.” Id. at 1541 (citing cases applying

Hogue to Title VII, antitrust law, Jones Act, and Sherman Act).

We then explained that the ADEA was clearly a “federal

remedial statute.” Id. Because of the purpose of the ADEA !

to provide redress for discrimination ! we held that the tender

back rule should be rejected in suits under the ADEA, as it was

for suits under the FELA. We explained that the FELA and the

ADEA did not have to be identical in order for the rule in Hogue

to be extended to the ADEA. “The mandate in Hogue is that

tender back requirements imposed in connection with the release

of federal rights be evaluated in light of the general policy of the

statute in question.” Id.

Additionally, we explained that the Hogue Court’s

concern that a tender back requirement would deter meritorious

challenges to releases was also a factor in ADEA claims.

Further, decisions enforcing the tender back doctrine have

focused on what we called an “incomplete analysis of the

equities involved in allowing an employee to retain severance

benefits while pursuing ADEA claims.” Id. at 1542-43. The

argument was that allowing an employee to retain the
28

consideration that was tendered to avoid litigation and bring suit

would place the employer in litigation against opponents who

may use the consideration to fund the litigation. We recognized

the merit of this argument, but rejected it because it ignored the

economic reality for most older workers. Congressional

findings suggested that many employees needed severance

benefits to cover their living expenses, and could not afford to

spend it on legal expenses. Further, this was evidence that an

employee who has a meritless claim has a “strong financial

incentive[] to keep the severance payments rather than risk them

in prolonged litigation.” Id. Rejecting ratification and tender

back did not mean that employees would receive a double

recovery ! severance plus judgment. Rather, if the employer is

found liable, the severance benefits will be deducted from any

award. Id. A requirement that an employee tender back the

consideration prior to suit would make it difficult to put the

employee in a pre-release position.

The final factor in our decision was the challenges

involved in calculating a tender back requirement.

A tender requirement in such cases would create

a conundrum as to how much [consideration]

should be tendered to restore the pre-release status

quo. There is no available method of forcing the

parties to agree on what an appropriate amount

would be, since typically the employer does not

specify how much of the consideration paid to the

employee is for the retirement and how much is

for the release.
29

Id. at 1543-44 (quoting Isaacs v. Caterpillar, Inc., 765 F. Supp.

1359, 1368 (C.D. Ill. 1991)). This confusion as to the amount

of consideration to be returned would require “an employee to

return a sum that typically incorporates consideration for

multiple factors not challenged in an age case: waivers for other

violation of law or contract, rolled-in vacation and sick time,

and a public relations benefit to the employer that itself may

deter other litigation.” Long, 105 F.2d at 1544. Such an

approach, we determined, appears to put the employer in a better

position yet leaves the employee in a worse position than they

were in under the status quo. Therefore, we determined that it

would best serve the purposes of the ADEA to reject the tender

requirement.

In Oubre v. Energy Operations, Inc., 522 U.S. 422

(1998), the Supreme Court confirmed that OWBPA displaces

the common law doctrine of ratification. Although the case is

limited to OWBPA and claims under the ADEA, it offers some

guidance for this case. First, the Court rejected the employer’s

claim that the general rule in contract law is that a plaintiff must

tender back benefits received under a contract before bringing

suit. Id. at 426. There are cases to the contrary, and in equity “a

person suing to rescind a contract, as a rule, is not required to

restore the consideration at the very outset of the litigation.” Id.

(internal citations omitted). Although the Court determined that

OWBPA by its terms indicates that ratification does not apply

to ADEA claims, it also noted the effect of ratification on the

practical operation of OWBPA. Id. at 427. “In many instances

a discharged employee likely will have spent the moneys

received and will lack the means to tender their return. These

realities might tempt employers to risk noncompliance with the
30

OWBPA’s waiver provisions, knowing it will be difficult to

repay the moneys and relying on ratification.” Id.

We recognize that other courts have applied the common

law doctrine of ratification to ERISA claims. See, e.g., Deren

v. Digital Equip. Co., 61 F.3d 1 (1st Cir. 1995); Wittorf v. Shell

Oil Co., 37 F.3d 1151 (5th Cir. 1994). However, it does not

appear that any courts of appeals have considered the

applicability of Hogue to ERISA claims. See Deren, 61 F.3d at

2 (reserving question of applicability of Hogue for another day).

We are persuaded the rationales of Hogue and Long should be

applied to ERISA cases.

Hogue and Long provide strong arguments for the

extension of their rule to § 510 of ERISA. ERISA, like the

ADEA and the FELA, is a “federal remedial statute.” It was

“designed to promote the interests of employees and their

beneficiaries in employee benefit plans.” DeWitt, 106 F.3d at

529. The same deterrence concerns exist in this context as well.

A plaintiff should not be deterred from bringing a meritorious

claim. Additionally, pensions are major assets for most

Americans. As Congress recognized “the continued well-being

and security of millions of employees and their dependents are

directly affected by [pension] plans.” 29 U.S.C. § 1001.

Therefore, as in Long, it is unlikely that an employee would

engage in lengthy litigation of a meritless claim which would

waste his benefits or severance pay. Additionally, as the Court

explained in Oubre the application of the doctrine of ratification

to ERISA claims may frustrate the practical operation of the

protections ERISA affords. It is likely that many employees

discharged in violation of § 510 may have spent the moneys
31

they received as severance pay. Employers could risk

noncompliance with the requirement that a release must be made

knowingly and voluntarily and simply rely on ratification.

The same issues we addressed in Long regarding the

amount of money to be tendered back also exist here. In this

severance package, the employees were provided with severance

as well as pay for unused vacation time. Therefore, a

determination of exactly what Meechan would have been

required to tender back is unclear and debatable. The pertinent

justifications for rejecting the application of ratification stated

in Hogue, Long, and Oubre, convince us that tender

back/ratification should also be rejected in the context of § 510.

Therefore, we will affirm the District Court’s denial of summary

judgment as to the affirmative defense of tender

back/ratification.

C.

As Meechan’s § 510 claim is still viable, we now reach

the substance of that claim. Section 510 of ERISA provides in

pertinent part that

[i]t shall be unlawful for any person to discharge,

fine, suspend, expel, discipline, or discriminate

against a participant or beneficiary for exercising

any right to which he is entitled under the

provisions of an employee benefit plan, . . ., or for

the purpose of interfering with the attainment of

any right to which such participant may become

entitled under the plan . . . .
20In Gavalik, the employer created a liability avoidance

program in which it monitored which employees had vested, and

laid off employees who had not vested in an attempt to save

money. Id. at 840-41. We reversed the district court’s grant of

summary judgment in favor of the employer because it was clear

from the record (through direct evidence) that the employer

intended to interfere with the plaintiffs attainment of future

benefits. Id. at 857.

21At the same time, actual injury is not required because

the employer does not have to achieve its goals in order to be

liable. Id. at 856. “Proof of specific intent to interfere with the

attainment of pension eligibility, then, ‘regardless of whether the

participant would actually have received the benefits absent the

interference . . .,’ will ordinarily constitute a violation of § 510

of ERISA.” Gavalik, 812 F.2d at 852 (internal citation omitted).

32

29 U.S.C. § 1140. The law in this area is well-settled.

In Gavalik v. Continental Can Co., 812 F.2d 834 (3d Cir.

1987), we outlined the elements of a § 510 claim.20 We

explained that a plaintiff does not have to prove that the only

reason that he or she was terminated was an intent to interfere

with pension benefits. Id. at 851. However, a plaintiff must

“demonstrate that the defendant had the ‘specific intent’ to

violate ERISA.” Id. (quoting Watkinson v. Great Atl. & Pac.

Tea Co., Inc., 585 F. Supp. 879, 893 (E.D. Pa. 1984)).21 A

plaintiff must show that “the employer made a conscious

decision to interfere with the employee’s attainment of pension

eligibility or additional benefits.” DiFederico v. Rolm Co., 201

F.3d 200, 205 (3d Cir. 2000) (internal quotation marks and
33

citation omitted). Proof that the plaintiff lost benefits because

of termination alone is not enough. Gavalik, 812 F.2d at 851.

Proof that the termination prevented the employee from accruing

additional benefits through more years of service alone is not

probative of intent. See Turner v. Schering-Plough Corp., 901

F.2d 335, 348 (3d Cir. 1990). “Where this is the only

deprivation, a prima facie case requires some additional

evidence suggesting that pension interference might have been

the motivating factor. In this connection, we note that the

savings to the employer resulting from the [employee’s]

termination [must be] of sufficient size that they may be

realistically viewed as a motivating factor.” Id. Such proof can

be demonstrated through direct or circumstantial evidence,

because the “smoking gun” evidence may be rare. Gavalik, 812

F.2d at 852.

When there is no direct evidence, courts use a McDonnell

Douglas-Burdine type of burden shifting scheme to determine

whether the plaintiffs have proved their case. DiFederico, 201

F.3d at 205. Plaintiffs must first prove their prima facie case by

showing “‘(1) the employer committed prohibited conduct

(2) that was taken for the purpose of interfering (3) with the

attainment of any right to which the employee may become

entitled.’” Id. (quoting Gavalik, 812 F.2d at 852).

If the plaintiffs establish their prima facie case, the

burden shifts to the defendant to “articulate a legitimate,

nondiscriminatory reason for the prohibited conduct.” Id. If the

employer satisfies its burden, then the plaintiffs must prove by

a preponderance of the evidence that the reason articulated by

the defendant is merely pretextual. Id. Once the defendant
34

articulates such a reason, the plaintiffs must meet their “ultimate

burden of persuasion.” Id. at 206 (internal quotation marks and

citation omitted). In order to meet this burden, plaintiffs must

“either directly . . . persuad[e] the court that the discriminatory

reason more likely motivated the employer or indirectly

[persuade the court] by showing that the employer’s proffered

explanation is unworthy of credence.” Id. (internal quotation

marks and citation omitted). The pretext analysis focuses the

court’s attention on whether the defendant’s proffered reason

was the real reason for its decision. Id.

In this case, Meechan asserts that direct and

circumstantial evidence exists. We will first consider the direct

evidence. Direct evidence in this context must demonstrate that

“decision makers placed substantial negative reliance on an

illegitimate criterion in reaching their decision.” See Anderson

v. Consol. Rail Corp., 297 F.3d 242, 248 (3d Cir. 2002) (internal

quotation marks and citation omitted). We have said that this is

a “high hurdle” for plaintiffs because direct evidence “must

reveal a sufficient discriminatory [or illegal] animus making it

unnecessary to rely on any presumption from the prima facie

case to shift the burden of production.” Id. (internal citation

omitted).

The direct evidence asserted by Meechan is that (1) there

is conflicting testimony by Scherzer regarding the reasons

behind the decision to outsource (efficiency vs. savings);

(2) there are inconsistencies between the testimony by Scherzer

and notes by JCI about whether savings were a consideration in

Roche’s decision to outsource; (3) there is a note by a JCI

employee implying that fringe benefits were an area where
35

money could be saved; and, (4) there is an email from JCI to

Roche explaining that savings can be achieved by slashing

headcount.

This is simply not direct evidence that the Appellees

specifically intended to interfere with pension benefits. There

is no “smoking gun” in this case. See Gavalik, 812 F.2d at 851.

This evidence, even without considering that some of it is taken

out of context, does not reveal the requisite intent to engage in

proscribed activity such that “it is unnecessary to rely on any

presumption from the prima facie case to shift the burden of

production.” Anderson, 297 F.3d at 248 (internal citation

omitted). This is generalized evidence and it lacks probative

value from which to draw an illegal motive behind Roche’s

decision to outsource. See, e.g., id. “Only the most blatant

remarks whose intent could be nothing other than to

discriminate constitute direct evidence.” Clark v. Coats &

Clark, Inc., 990 F.2d 1217, 1223 (11th Cir. 1992). Meechan has

not met this high hurdle of proving specific intent to violate

§ 510 with direct evidence.

However, as noted above, Meechan also asserts

circumstantial evidence, and therefore the burden-shifting

analysis applies. Some of the evidence sheds absolutely no light

on the question of specific intent. For example, the fact that

Scherzer had previously worked with employees of JCI on

projects unrelated to outsourcing or the fact that he began

thinking about outsourcing shortly after he was hired at Roche

are not relevant evidence of specific intent to interfere with

pension benefits.
36

Additionally, Meechan relies on his expert’s testimony

that the outsourcing saved Roche over $22 million in costs for

pension and other retiree benefits. The District Court rejected

this testimony because it was flawed. In reaching this

determination, the expert failed to consider any costs that Roche

incurred by outsourcing, namely the millions that Roche paid to

JCI under the outsourcing Agreement. Although evidence of

substantial cost savings to an employer is persuasive evidence

of specific intent, there must be evidence of actual savings. See,

e.g., Turner, 901 F.2d at 348. Absent the inclusion of the costs

to Roche in the calculation, at least in regard to the cost for the

Agreement, this is incomplete evidence of the economic

consequences to Roche. Although Roche may have incurred

substantial savings as a result of the outsourcing, there is no

evidence in the record that demonstrates such savings.

Therefore, we agree with the District Court’s rejection of the

evidence regarding savings in this context.

However, Meechan has presented other evidence that

suggests that Roche had the specific intent to interfere with

pension benefits. The fact that Meechan, and the other

Appellants, held the same positions and were paid the same

salaries by their new employer, but were no longer entitled to

pension benefits, lends support to Meechan’s claims that the

Appellees intended to avoid the payment of future pension

benefits. This fact alone would not be sufficient to establish a

prima facie case, but there is additional evidence. The record

includes some testimony that Roche and JCI discussed pensions

and that Roche executives discussed pensions in regard to the

outsourcing. Additionally, the initial draft of the Agreement

between Roche and JCI included employee pensions as an
22In Turner, the plaintiff was discharged two and a half

years before he would have been eligible for full retirement

benefits, and the employer was aware of this effect. Id. at 340.

Although we found that the plaintiff proved that he was in the

protected class and that he was qualified for the position, we

determined that there was no evidence that he was discharged in

violation of ERISA. Id. at 348. The fact that he would be

deprived of additional benefits was not sufficient to prove

specific intent, especially because the amount of savings to his

employer was not of sufficient size to “realistically [be] viewed

as a motivating factor.” Id. We determined that there was no

evidence of any economic consequences to the employer due to

the termination.

However, in Eichorn v. AT&T Corp., 248 F.3d 131, 150

(3d Cir. 2001), we found that evidence that the employer’s

policy of not re-hiring for eight months which was very close to

the six-month vesting period provided circumstantial evidence

that the avoidance of benefits was a motivating factor. There

was also a confidential memo from the employer that recognized

37

expense for JCI, while the final Agreement did not include that

provision. This further suggests that there was some dialogue

or negotiation regarding pension benefits between JCI and

Roche. Therefore, there is some evidence that the Appellees

were aware that the outsourcing would interfere with Meechan’s

pension benefits.

“The burden of establishing a prima facie case is not

onerous.” Clark, 990 F.2d at 1223 (citing Tx. Dep’t of Cmty.

Affairs v. Burdine, 450 U.S. 248, 253 (1973)). This case falls

somewhere between our decisions in Turner and Eichorn.

22 The
the practical effect of the no hire policy on pension rights.

Additionally, there were economic benefits because the

defendant was not required to pay for pension benefits.

Therefore, we reversed the district court’s grant of summary

judgment in favor of the employer because we held that the

plaintiffs did establish a prima facie case.

38

evidence includes more than just a showing that the plaintiff was

deprived of future pension benefits, but there is no evidence as

to the savings to the employer. Since the burden is not onerous,

and we must draw all reasonable inferences in favor of

Meechan, we hold that Meechan has proved a prima facie case.

Therefore, we disagree with the District Court’s conclusion to

the contrary.

Our analysis does not end, however, as the District Court

concluded that even if Meechan proved a prima facie case, the

Appellees articulated legitimate nondiscriminatory reasons for

the decision, and Meechan failed to prove pretext. We agree

with the District Court that the Appellees met their burden of

production. Roche’s reason for its decision was to improve the

quality of the services provided by the Technical Services

Division or, as the District Court stated, there was evidence that

Roche had strong technical and financial reasons for

outsourcing. JCI wanted to obtain the contract with Roche. As

this is only a burden of production, the Appellees have met their

burden.

The burden shifts back to Meechan. He has to prove by

a preponderance of the evidence that the reasons articulated by

the Appellees are not credible or that pension avoidance was the
23Our determination that Meechan failed to prove pretext

makes it unnecessary for us to decide JCI’s claim that § 510

does not allow a conspiracy cause of action.

39

real motivating or determinative factor. See DiFederico, 201

F.3d at 206-07. At a minimum, Meechan “must put forward

enough evidence to create a genuine issue of material fact as to

whether” the proffered reasons were pretextual. Kowalski v. L

& F Prods., 82 F.3d 1283, 1289 (3d Cir. 1996). This requires

Meechan to “demonstrate such weaknesses, implausibilities,

inconsistencies, incoherences, or contradictions in the

employer’s proffered legitimate reasons for its action . . . .” Id.

Nothing in the record proves by a preponderance of the

evidence that the Appellees’ reasons are not credible, nor that

the intention to interfere with pension benefits was more likely

what motivated the decision to outsource. Based on the record

as it stands, especially without any evidence as to savings to

Roche, Meechan has not met his burden. “A court, like the

district court in this case, simply cannot make the unfounded

inference that an employer acted with the specific intent to

interfere with the plaintiff's attainment of benefits.” DiFederico,

201 F.3d at 207. Therefore, we will affirm the District Court’s

determination that Meechan failed to prove pretext making

summary judgment proper in this case.23

D.

The final issue that we must decide on appeal is whether

the District Court properly granted summary judgment on

Meechan’s state law claim under the NJLAD. The claim is that
24The District Court applied an improper prima facie case

standard because it used the prima facie case for a termination

when the position remains open or is filled by someone outside

of the protected class. Because this case deals with outsourcing,

which is essentially the same as a reduction in force, an

employee would never be able to prove that they were replaced

or that the position remained open. Therefore, the prima facie

40

Roche discriminated on the basis of age in making its decision

to outsource. The District Court held that Meechan failed to

prove a prima facie case under the NJLAD and we agree.

Under the New Jersey anti-discrimination law, an

employer cannot discharge an employee because of the

employee’s age unless the decision is justified by other lawful

considerations. See Murray v. Newark Hous. Auth., 709 A.2d

340, 344 (N.J. Super. 1998) (quoting N.J.S.A. 10:5-12). New

Jersey uses the McDonnell Douglas-Burdine burden-shifting

scheme for discrimination cases. Additionally, the standards

applied to ADEA cases are applied to age claims under the

NJLAD unless there is divergent language between the statutes.

See Monaco v. American Gen. Assurance Co., 359 F.3d 296,

305 (3d Cir. 2004).

In the context of a reduction in force, which is a similar

context to this case, the elements of a prima facie case are

(1) the plaintiff is a member of the protected class, (2) the

plaintiff was laid off from a job that he was qualified for, and (3)

“other, younger, workers were treated more favorably.”

Murray, 709 A.2d 340 at 344 (internal citations omitted); see

also Monaco, 359 F.3d at 304-05.24 Direct or circumstantial
case for a reduction in force is the proper standard for this type

of case.

41

evidence may be used. See Bergen Comm. Bank v. Sisler, 723

A.2d 944, 953 (N.J. 1999) (citations omitted). If a plaintiff

establishes a prima facie case, there is an inference of

discrimination. Then steps two and three are considered.

Ultimately, a plaintiff must prove that age was a determinative

factor in the adverse employment decision. Id.

In Hazen Paper Co. v. Biggins, 507 U.S. 604 (1993), the

Supreme Court held that there is a difference between

discrimination on the basis of age, and an employer’s decision

to terminate an employee to prevent the employee from accruing

pension benefits. Id. at 612. Age and years of service are

“analytically distinct, [and] an employer can take account of one

while ignoring the other, and thus it is incorrect to say that a

decision based on years of service is necessarily ‘age based.’”

Id. However, a decision based both on age and pension status

could violate both the ADEA and ERISA. Id. at 612-13. As

there is no divergent statutory language, this standard applies to

the NJLAD age claim as well.

Meechan has failed to establish his prima facie case.

There is no evidence that Roche treated younger employees

better than older employees ! everyone in the Technical

Services Division lost their jobs at Roche. There is no evidence

that employees in the Technical Services Division were

disproportionately older than employees in other divisions, and

therefore more older workers were terminated because of the

outsourcing. There is also no evidence that open positions at
25Our determination that Meechan has failed to prove a

prima facie case under the NJLAD makes it unnecessary for us

to decide whether this claim was preempted by ERISA.

42

Roche were provided only to younger employees. Meechan

bases his claim on essentially the same evidence that he used for

the ERISA claim ! he claims that Roche considered his years of

service. But, even if Roche terminated the Appellants,

specifically Meechan, to avoid paying future pension benefits,

under Hazen Paper this does not prove that age was a

determinative factor in Roche’s decision. Absent proof that

younger employees were treated more favorably, Meechan has

not proved his prima facie case. Therefore, the District Court

properly granted summary judgment in favor of Roche.25

IV.

For the reasons stated above, we will affirm the

judgment of the District Court.