Opinion
01 Civ. 10859 (CM)
June 21, 2002
Plaintiffs are tenured teachers who are members of a collective bargaining unit represented by Defendant Wappingers Congress of Teachers ("the Union") (Compl. ¶ 2.) Plaintiffs met the eligibility requirements for early retirement in 2001. At the time plaintiffs became eligible for early retirement, they chose not to retire. (Id.) They therefore forfeited their right to receive the retirement incentive that was available to them at the time they passed through the early retirement portal. The Collective Bargaining Agreement specified that each plaintiff had one opportunity to make the decision whether to retire early and receive incentive benefits or to remain working as a teacher.
Since the time when plaintiffs chose not to retire early, however, the Collective Bargaining Agreement has been re-negotiated. The Agreement (or "CBA") now provides teachers with an option that plaintiffs did not have at the time they made their decisions. Teachers who pass through the portal during the life of this new Agreement may either choose to retire early and receive an lump sum bonus, or they may choose to continue working and receive an additional $7,000 a year for three years.
At first glance it seems that plaintiffs passed on the opportunity to participate in a voluntary retirement program when they were eligible for it, and would like a second chance to earn an incentive payment. These plaintiffs made their choice given a certain set of circumstances, but would rather have been given the options that are available to teachers currently reaching the retirement portal. Plaintiffs' situation is complicated, however, because the teachers arrived at the so-called portal in part because of their age.
FACTUAL BACKGROUND
Article 9 of the 1998-2001 Collective Bargaining Agreement (the predecessor agreement) contained the following Salary Elective Program:
9.1 A unit member who meets all three of the following eligibility requirements:
(1) 15 years of District service,
(2) 20 years of member service in the New York State Teachers' Retirement System, and
(3) eligibility for a service retirement pursuant to the rules and regulations of the New York State Teachers' Retirement System,
and who meets one or more of these eligibility requirements for the first time during the 1998-1999, 1999-2000, or 2000-2001 school years, who retires from District service on June 30 of the school year during which he/she first meets all three of these eligibility requirements, shall be eligible for a termination bonus of $20,000 to be paid within 30 days of such retirement, provided that he/she shall have submitted to the Superintendent of Schools by February 1 of the applicable year, his/her written statement of intention to retire, and shall have submitted to the New York State Teachers' Retirement System by April 15 of the applicable year, his/her retirement application, both effective on the following July 1.
("Collective Bargaining Agreement by and between the Board of Education of the Wappingers Central School District and the Wappingers Congress of Teachers," Exh. B to Bilik Aff., p. 16) (emphasis added).
Article 9 of the 1998-2001 agreement thus provided for a one-time window of opportunity for a teacher to receive a payment in the amount of $20,000 if the employee committed to retire at the end of the first year that he or she was eligible for the payment. This decision had to be made in the first school year in which all three of the requirements were met.
There are several tiers of membership in the New York State Teachers Retirement System. Under every tier, a teacher becomes eligible for a service retirement upon reaching the age of at least 55 with 5 years or more of credited New York State service. Tier 1 members are also eligible for retirement under a different set of circumstances. Those teachers who joined the NYSTRS prior to July 1, 1973 may evade the age requirement because they qualify for a service retirement at any age with 35 years of credited service. See N.Y. Educ. Law §§ 535(1)(a). N.Y. Educ. Law § 510(1)(a); N.Y. Retire. Soc. Sec. Law §§ 75-c(a)(1)(b), 75-g(c), 75-i(a), 76(a); Reichler v. New York State Teachers' Ret. Sys., 79 A.D.2d 268, 437 N.Y.S.2d 754 (N.Y. A.D. 1981).
On July 1, 2002, the District and the Union executed a Memorandum of Agreement ("MOA") that modified the 1998-2001 Collective Bargaining Agreement. (Compl. ¶ 2, 5.) The new Collective Bargaining Agreement, as amended by the MOA, is effective from July 1, 2001 through June 30, 2006. The MOA added the following language to Article 9:
A unit member who meets the eligibility requirements as set forth above may decline the benefits of the salary elective program and elect to continue employment. Such an election shall be final. The unit member shall receive an additional Seven Thousand ($7000) per year up to three (3) years. Upon conclusion of the third year of additional payments, the unit member's salary shall revert to the appropriate placement on the salary schedule. Once the unit member declines the salary elective program the unit member is no longer eligible for any further payments.
(Id at p. 2-3.) Thus, under the amended Agreement, when the employee meets all three of the eligibility factors for the first time, he or she has two options: (1) to retire and receive the same $20,000 payment that was available under the predecessor agreement, or (2) to continue employment, in which case the employee receives an additional $7,000 per year for up to three years of continued employment. The conditions that determine the year of election were not changed by the MOA.
The practical effect of the MOA is that teachers who elect Option #2 teach for an extra three years at an inflated salary, which can then be used as their base salary for the purpose of calculating their pension.
Under New York State Education Law § 501(11)(b), the Final Average Salary for the purposes of calculating a teacher's pension is "the average regular compensation earned as a teacher during the three years of actual service immediately preceding his date of retirement, or any other three years of consecutive service upon application of the member." (See also Kuntz Aff. ¶ 4.)
Under both the original Article 9 and Article 9 as amended by the MOA, a teacher must make his or her election in the precise year when the years of service conditions are met, and forfeits forever any right to Article 9 payments by not making the election in that year. When negotiating the MOA, the District and the Union did not elect to make teachers who had already forfeited the $20,000 lump sum payment eligible for the three-year/$7,000 per year payment. Thus, teachers like plaintiffs, who had already passed on the $20,000 payment under the old Article 9, and continued to work thereafter, would never become eligible for a $7,000/year salary increase.
Plaintiffs contend that, by not making Option #2 available to them — even though they were already ineligible (by their own choice) for Option #1 — the District and Union have discriminated against them due to their age in violation of the equal protection clause of the Constitution, 42 U.S.C. § 1983, the Age Discrimination in Employment Act of 1967 ("ADEA"), 29 U.S.C. § 621 et seq., as amended by the Older Workers' Benefit Protection Act of 1990 ("OWBPA"), 29 U.S.C. § 621, 623, and the New York State Human Rights Law, N.Y. Exec. Law § 290 et seq. (Compl., ¶¶ 1, 50, 53-67.)
Defendant Wappingers Congress of Teachers and Defendant Wappingers Central School District make the following arguments (in separate briefs) in support of their motions to dismiss: (1) Auerbach v. Board of Education of the Harborfields Central School District of Greenlawn, 136 F.3d 104, 109 (2d Cir. 1998), compels dismissal of the first and second claims; (2) the complaint fails to state a cause of action pursuant to 42 U.S.C. § 1983; and (3) plaintiff's pendant state law claim should be dismissed against the Defendant Union. Defendant Wappingers Central School District also argues in the alternative for summary judgment.
The Wappingers Congress of Teachers originally also argued that plaintiffs claims were not ripe and did not present a justiciable case or controversy. In their opposition brief, plaintiffs note that defendants have withdrawn this argument because, even though plaintiffs have not retired, one plaintiff, Mr. Cerilli, attempted to elect the Option and was rejected. In light of his rejection, it would have been futile for each of the other plaintiffs to make the same request.
Plaintiffs oppose these motions, arguing that (1) they have established a prima facie case of age discrimination; and (2) there is a prima facie violation of plaintiffs' rights to equal protection. Plaintiffs have submitted a motion for summary judgment in their favor on their disparate treatment claim, arguing that they have been deprived of an employment benefit because of their age. Plaintiffs also seek to amend their complaint to add additional plaintiffs.
The outcome of this case hinges on whether the Option is an early retirement incentive plan or an employee benefit. The parties appeared for oral argument in this case on April 5, 2002. At that time, the Court asked the parties to brief whether the Option's status under the OWBPA may be a question of fact in this peculiar instance. Both parties argued in those additional papers that the question is a matter of law for the Court to decide.
DISCUSSION
All of the parties in this case have submitted papers outside of the pleadings, and the District has moved for summary judgment in addition to seeking dismissal of the complaint. Plaintiffs have submitted their own motion for summary judgment. The Court will therefore treat this motion as one for summary judgment. See Frerks by Frerks v. Shalala, 848 F. Supp. 340 (E.D.N.Y. 1994), affirmed, 60 F.3d 1234 (2d Cir. 1995) (finding that the court in its discretion may treat a motion for judgment on the pleadings as one for summary judgment).
Under Federal Rule of Civil Procedure 56(c), the Court will grant summary judgment if the evidence offered shows that there is no genuine issue as to any material fact and that the movants are entitled to judgment as a matter of law. See Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548 (1986). On a motion for summary judgment, the court views the record in the light most favorable to the non-movants and resolves all ambiguities and draws all reasonable inferences against the movants. See United States v. Diebold. Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 994 (1962); Donahue v. Windsor Locks Bd. of Fire Commn'rs, 834 F.2d 54, 57 (2d Cir. 1987).
I. Prima Facie Case of Age Discrimination
The ADEA prohibits discrimination in the "compensation, terms, conditions, or privileges of employment" by employers against individuals over the age of forty. 29 U.S.C. § 623(a)(1) and 631(a). The ADEA was designed to "promote employment of older persons based on their ability rather than age; to prohibit arbitrary age discrimination in employment; to help employers and workers find ways of meeting problems arising from the impact of age on employment." 29 U.S.C. § 621(b).
To establish a claim for disparate treatment under ADEA, plaintiffs must establish a prima facie case of age discrimination. Auerbach, 136 F.3d at 109. "[P]laintiffs bear the initial burden of demonstrating that the actual motivation for the employer's decision was the employee's age." Id. (citing Hazen Paper Co. v. Biggins, 507 U.S. 604, 610 (1993)).
In order to prove a prima facie case of age discrimination, plaintiffs must demonstrate the following: (1) plaintiff is a member of a protected class; (2) plaintiff is qualified for his position; (3) plaintiff suffered adverse employment action; and (4) the circumstances surrounding the action give rise to an inference of age discrimination. McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973). The Second Circuit has made clear that the plaintiff's burden in establishing a prima facie case is de minimis. Auerbach, 136 F.3d at 109-10; Criley v. Delta Airlines, Inc., 119 F.3d 102, 104 (2d Cir. 1997).
There is no dispute that plaintiffs satisfy the first and second prongs of this test. Plaintiffs are over forty years old, and are qualified teachers in the Wappingers Central School District. The question is whether plaintiffs have asserted that they suffered an adverse employment action, and whether the circumstances surrounding the adoption of the MOA give rise to an inference of discrimination.
Defendants claim that plaintiffs have not satisfied the third element because they made the decision not to partake in the early retirement program (as it then existed) when it was made available to them in the Collective Bargaining Agreement of 1998-2001. Therefore, no adverse employment action was taken against the plaintiffs. Defendants also argue that the circumstances surrounding the adoption of the Option do not give rise to an inference of age discrimination. Defendants argue that there is no age discrimination because the Option is offered to all employees who first meet certain service-based retirement criteria regardless of their age.
In Auerbach, the Second Circuit analyzed a retirement incentive plan which required a participating teacher to meet the following eligibility requirements in order to receive a $12,500 fixed sum payment and accumulated sick leave payment: (1) the teacher had to retire at the end of the year he or she turned 55 and completed at least 20 years of service under the NYSTRS, or at the end of the year in which the teacher who is 55 or older had completed 20 years of service under NYSTRS; (2) the teacher had to have completed 10 years of service in the Harborfields Central School District; and (3) submit a letter of retirement by January 1 of the final full year of employment. Auerbach, 136 F.3d at 107.
Like the plaintiffs in this case, the plaintiffs in Auerbach decided not to retire in the first and only year that the early retirement incentive benefits were available to them. Id. at 108. Plaintiffs noted that because one of the plan's requirements was that the teachers must be at least age 55, teachers that were younger than them were eligible for retirement benefits that they were no longer able to receive. They argued that this constituted age discrimination.
The Second Circuit found that the plaintiffs asserted a prima facie case of discrimination even though they could have retired in the year that they first fulfilled the requirements of the plan, but did not do so. Id. at 109-10. The Court noted that because plaintiffs:
did not retire in the precise year when they first fulfilled the requirements of the plan, they are forever precluded from receiving the retirement incentive benefits. Thus age is the trigger for the denial of their employee benefits. Meanwhile teachers under the age of 55 who have fulfilled the plan's job service requirements have the future option to receive the retirement incentive benefits.
Id., at 109.
Defendants in this case argue that this pension plan is distinct from the one in Auerbach because there is no express requirement in the Agreement that a teacher has to be a certain age in order to take advantage of the retirement programs. They contend that plaintiffs were not foreclosed from electing the Option because of their age, but rather, because of the number of years of service they had as teachers.
Indeed, this case is not as clear cut as Auerbach because there is one tier under the NYSTRS that does not contain an explicit age requirement. However, defendants' argument is not persuasive. Under all but one of the tiers of the NYSTRS, a teacher may not become eligible for service retirement until he is at least 55 years of age.
Tier 1 members are the only teachers who may avoid the age requirement, under certain circumstances. A Tier 1 teacher may retire before 55, provided that the teacher has completed 35 years of credited service. N.Y.S. Education Law § 510(1)(a); N.Y.S. Retirement and Social Security Law §§ 75-c(a)(1)(b), 75-g(c), 75-i(a), 76(a); 2 NYCRR 325.2. As plaintiffs point out, it would take an extraordinary set of circumstances for a teacher to accumulate 35 years of teaching credit before turning 55. In order to qualify to teach grades pre-K through 12, a teacher must complete a baccalaureate degree. See 8 NYCRR 80-2.12(a)(1)(i), 80-2.13(a)(1)(i). A baccalaureate degree is one "awarded upon the satisfactory completion of an approved four-year post secondary curriculum offered by a recognized institution of higher education." 8 NYCRR 80-1.1(b)(7). In computing a member's years of service credit, the retirement board of NYSTRS does not credit more than one year of service per calendar year. Furthermore, unpaid leave does not count toward credited service. Hence, it is extremely rare for a Tier 1 teacher to reach the 35th year of service credit prior to reaching age 55.
Given that every other tier except Tier I includes an age requirement, and it would be extremely rare for a Tier I teacher to reach the 35th year of service credit prior to reaching age 55, plaintiffs have demonstrated that age is the trigger for the denial of benefits in their case. Plaintiffs have therefore met their de minimis burden of asserting a prima facie case of age discrimination.
II. Early Retirement Incentive vs. Employee Benefit
The intriguing issue raised by this case is whether a payment that is clearly designed to incent a teacher to retire, but that can be received even if the teacher does not retire, qualifies as an early retirement incentive under OWBPA.
The OWBPA establishes affirmative defenses which allow an employer to escape liability for disparate treatment on the basis of age:
It shall not be unlawful for an employer, employment agency, or labor organization . . .
(B) to observe the terms of a bona fide employee benefit plan
(i) where, for each benefit or benefit package, the actual amount of payment made or cost incurred on behalf of an older worker is no less than that made or incurred on behalf of a younger worker, . . .
(ii) that is a voluntary early retirement incentive plan consistent with the relevant purpose or purposes of this chapter29 U.S.C. § 623(f)(2)(B); Auerbach, 136 F.3d at 113.
Section 623(f)(2)(B)(i) adopts the "equal benefit or equal cost principle." Auerbach, 136 F.3d at 112. The equal benefit or equal cost rule establishes that the "only justification for an age-based reduction in employee benefits is the increased cost in providing those benefits to older workers." Id. Employers do not have to provide exactly the same benefits to employees of different ages as long as they are spending the same amount of money on them. In establishing this rule, Congress recognized that:
the costs of providing certain employee benefits increases with age, . . . [hence] employers need not provide exactly the same benefits to older employees as they do for younger ones, when to do so would result in excessive benefit costs that would discourage employers from hiring older workers in the first place.
Id. at 110 (internal citations omitted)
However, the "equal benefit or equal cost" rule does not apply to early retirement incentive plans. Id. An early retirement incentive need only be "voluntary and consistent with . . . the protection of employees from arbitrary age discrimination." Id.
Defendants contend that the Option is a retirement incentive, and thus raise the affirmative defense found in Section 623(f)(2)(B)(ii). Plaintiffs argue that the Option is an employee benefit rather than an early retirement incentive plan. Plaintiffs thus assert that since Defendants have not put forth any evidence to establish an affirmative defense under the "equal benefit or equal cost" rule, summary judgment should be granted in the Plaintiffs' favor.
The facts in this case are not in dispute. During oral argument on this matter, I asked the parties whether this determination might be a factual inquiry rather than a legal one, given that this plan differs from others that courts have examined in that it does not require the teacher to retire to receive any money. See e.g., Auerbach, 136 F.3d at 112 (finding as a matter of law that a sick leave benefit provision was a retirement incentive because the money was not paid unless the teacher retired in the first year of eligibility); O'Brien v. Board of Educ. of the Deer Park Union Free Sch. Dist., 92 F. Supp.2d 100, 113-14 (E.D.N.Y. 2000) (holding that a provision in a collective bargaining agreement that provided for the decreasing recovery of sick leave benefits depending on how long an eligible teacher waited to retire was an early retirement incentive).
The parties agreed that the question is a matter of law, and they are correct. The question at hand is what has often been deemed a mixed question of law and fact. In this case, the "historical facts are . . . established, the rule of law is undisputed, and the issue is whether the facts satisfy the statutory standard. . . ." Pullman-Standard v. Swint, 456 U.S. 273, 289 n. 19 (1982). The Court may decide these matters on summary judgment even when the parties dispute the legal conclusions that the Court should draw from the facts presented. See Wright, Miller Kane, Federal Practice Procedure § 2725 (2002 pocket part) (citing Transamerica Delaval Inc. v. Citibank, N.A., 545 F. Supp. 200, 202 (S.D.N.Y. 1982)). Thus, it is up to the Court to determine as a matter of law whether the Option is a retirement incentive or an employee benefit.
Plaintiffs do not contest that the original Article 9 program was a retirement incentive program. They argue, however, that Option #2, as set forth in the MOA, is an employee benefit because a teacher must work and not retire in order to receive the payment. Moreover, the Option is paid out irrespective of whether the eligible teacher retires at the end of the three years.
Defendants concede that retirement is not required under Option #2. (WTC Memorandum, at 10-11.) They argue, however, that the teacher would be "foolish" not to retire at the end of the three years because those who retire immediately after the three-year period may use those three years to calculate their final average salary. (Id. at 11.)
OWBPA does not define the terms "employee benefit" or "retirement incentive." Courts have concluded that the key distinction between the two is whether the employee must retire in order to receive the benefit. In Auerbach, for example, the Second Circuit determined that a provision in a collective bargaining agreement that provided for payment of sick leave benefits was a retirement incentive because the benefit was not paid out "unless and until the teacher retire[d]." 136 F.3d at 112. Judge Hurley latched onto this reasoning in O'Brien when he concluded that the agreement to pay accumulated sick leave to teachers based on how soon the teacher retired after meeting the eligibility requirement was a retirement incentive, since the teacher had to retire to get any money.
If the Second Circuit intended, by its decision in Auerbach, to limit the term "early retirement incentive" to payments that can only be received if and when the employee retires, then plaintiffs are correct that Option #2 is an employee benefit rather than a retirement incentive — even though it was added to the CBA to motivate early retirement. If, however, Auerbach is not so limited, then the fact that Option #2 is designed in such a way as to incent a teacher to retire — even though it is theoretically possible for a teacher to elect that option, receive the payments, and then decide not to retire — augurs in favor of defendants' position.
There can be no doubt that Option #2 was intended, by the Union and the District, to operate as a retirement incentive. The Option appears in the same section of the Collective Bargaining Agreement as the other retirement incentive, and indeed, is offered as an alternative to that conceded incentive. The amount of money offered under Option #2 — $7000 per year for three years, or $21,000 — is virtually identical (given the time value of money) to the amount of money offered under Option #1 ($20,000 as a lump sum payment upon retirement).
Moreover, the dictionary defines "incentive" as "something, such as the fear of punishment or the expectation of reward, that incites one to action or effort." Webster's II New Riverside Univ. Dictionary 618 (1994). As a matter of basic economics, Option #2 incites a teacher to retire after three additional years' work because it decreases the marginal utility of remaining employed. While a teacher need not have her pension calculated on the basis of his last three years of employment under New York State Education Law Sec. 501(11)(b), his pension benefit must be based on three consecutive years of service. A certain and substantial reduction in salary once the Option #2 payments end would surely cause most teachers to retire at that point, since it would take more than two additional years' work before a teacher could retire with an increased pension benefit (factoring in annual salary advances).
The parties dispute how quickly a teacher would be able to increase his pension, but there is no dispute that there would be a reduction in salary at the end of the Option period, and that it would take at least two years after that for the employee to increase his final average salary for determining his pension. (See Pl.'s Am. Notice of Mot to Am. the Compl. and for Summ. J. at 11-13.)
Of course, we do know that not everyone behaves in a way that economists deem rational." It may be that teachers will accept the "bonus" for three years and then continue working at the end of the Option period. Perhaps, however, the negotiators were aware of behavioral studies showing that people tend to find it more difficult to give up money that they are used to receiving than to choose not to receive money that they do not already have. See Russell B. Korobkin, Thomas S. Ulen, Law and Behavioral Science: Removing the Rationality Assumption from Law and Economics 88 Cal. L. Rev. 1051, 1107-13 (2000); see also, Daniel Kahneman et al., Anomalies: The Endowment Effect, Loss Aversion, and Status Quo Bias, 5 J. Econ. Pesp. 193 (1991); Daniel Kahneman et al., Experimental Tests of the Endowment Effect and the Coase Theorem, 98 J. Pol. Econ. 1325 (1990). This phenomenon, called loss aversion or the endowment effect, might sway a teacher to retire at the end of the Option period, even though he might not have chosen early retirement at the beginning of the three years.
As I noted at oral argument, there will always be those who choose the path that the rest of us think is "unreasonable," for example, the district court judge who chooses not to take senior status even though that position allows the judge to determine his own work load while still receiving full salary, Social Security benefits, and maintaining a full staff.
In any case, I am satisfied that the District and the Union intended Option #2 to be a retirement incentive — albeit not one that would result in the teacher's immediate retirement — and thought that it would operate in such a fashion. And I am satisfied that most teachers would understand it in that way.
That, however, does not dispose of the legal issue, which is whether the Second Circuit's decision in Auerbach leaves me with any wiggle room to find that Option #2 qualifies as a retirement incentive, even though the teacher does not have to retire at the end of the three year "bump up" period. I conclude that I do not have the requisite wiggle room under Auerbach, because the Court of Appeals drew a bright line in that case that excludes defendant's plan — regardless of the intention of the District and the Union in offering the option.
In Auerbach, the Second Circuit was confronted with a CBA that contained an early retirement incentive plan. Any teacher who reached the age of 55, and who had a minimum of 20 years of service in the TRS, and 10 consecutive full years of service in the District, could submit a letter to the District no later than January 1 of the first year in which all three of those conditions pertained. Teachers who submitted their resignations in the "magic" year, and who in fact retired at the end of that school year, received a terminal payment based on that teacher's accumulated sick leave, plus a fixed sum of $12,500. A group of teachers who were similarly situated to plaintiffs in this action alleged that the "sick leave" portion of the terminal payment was an employee benefit, not a retirement incentive. The Court of Appeals concluded otherwise, "because the sick leave benefit is not paid out unless and until a teacher retires under the plan." Auerbach, 136 F.3d at 112. The Circuit went on to hold, "For this reason, we will apply [OWBPA's safe harbor provision for early retirement incentives] to the entire plan at issue." Id. Noting that not all early retirement incentive plans would be lawful, the Second Circuit concluded that the plan challenged by Auerbach was lawful — because it was truly voluntary, the employees had a reasonable amount of time to decide whether to accept it or not, and no arbitrary discrimination on the basis of age was built into the plan. Id. at 112-14.
In this case, the voluntariness, reasonableness of the time period and lack of arbitrary age discrimination in the Article 9 plan are not seriously contested. What is contested is the proposition that money paid to a teacher without obtaining a commitment that they retire constitutes a retirement incentive. The defendants ask this Court to treat the term "early retirement incentive" in the same way it has historically treated terms like "securities fraud" or "tender offer" as a concept that evolves over time, as the minds of men and women devise new and different — not to mention creative — ways of behaving, often in response to the last legal ruling. See e.g., Coan v. Bell Atlantic Sys. Leasing Int'l Inc., 813 F. Supp. 929, 933 (D. Ct. 1990) (citing Yoder v. Orthomolecular Nutrition Inst., Inc., 751 F.2d 555, 558 (2d Cir. 1985)); Field v. Trump, 850 F.2d 938, 943-44 (2d Cir. 1988); Wellman v. Dickinson, 475 F. Supp. 783 (S.D.N.Y. 1979). Here, defendants argue, they have simply come up with a new and different variant on the retirement incentive that was already in place under the CBA — one that will almost inevitably lead to the same result for any teacher who choose either Option #1 or Option #2.
Therein lies the problem. The laws of economics and psychology suggest that people who elect Option #2 SHOULD retire at the end of three years. But nothing COMPELS them to retire, and experience tells us that some teachers will not retire. Indeed, Option #2 is less a retirement incentive than it is a mechanism for allowing a teacher to hedge his bets: by electing Option #2, he can temporarily increase his salary and then see how he feels as his third "bump up" year draws to a close. For that teacher, the Option #2 payment is an employment benefit, pure and simple. And whether there is but one such teacher or 100, those teachers who choose not to retire have received a temporary salary advantage on the basis of their age — one that is not available to teachers who are older than they and who elected to continue teaching after their "magic" year.
Despite the Second Circuit's use of the phrase "unless AND UNTIL," I am not persuaded that Auerbach would prevent an employer from setting up a retirement incentive that does not require immediate retirement. If Option #2 permitted a teacher to work at a higher salary for three years, but compelled her to retire at the end of that three years, it seems to me that it should qualify as a perfectly legal retirement incentive under Auerbach. However, by giving the teacher the freedom to take the money and run or take the money and stay, the District has provided a temporary employment benefit to any individual who elects to continue working. And that violates ADEA.
In fact, that is such a logical way to set up an alternative to the lump sum payment offered by Option #1 that I initially thought retirement WAS compelled at the end of the Option #2 bump-up period. The District and the Union have not suggested any reason why they chose their rather unusual formulation, but by doing so they assumed a risk that it would fall outside the ambit of Auerbach.
Plaintiff's motion for summary judgment on the ADEA claim is granted.
IV. New York Human Rights Law Claim
Plaintiff's Fourth Claim is brought pursuant to New York State Executive Law § 296. An age discrimination claim under this state law is subject to the same analysis as the ADEA claim. Boyle v. McCann-Erickson, Inc., 949 F. Supp. 1095 (S.D.N.Y. 1997); Mastrangelo v. Kidder. Peabody Co., 772 F. Supp. 1126 (S.D.N.Y. 1989); Ferrante v. American Lung Assoc., 665 N.Y.S.2d 25 (Ct.App. 1997). Since the Court has found that the Option violates the ADEA, the CBA also violates New York State Executive Law § 296.
V. Section 1983 Claims
Plaintiff's Third Claim is that defendants instituted a policy which deprived them of their constitutional rights to equal protection of the law under the Constitution of the United States. (Compl. ¶ 63.)
A. The Claim Against the Union
An individual may bring suit under § 1983 against persons who, under color of state law, have caused him to be "depriv[ed] of any rights, privileges, or immunities secured by the Constitution and laws" of the United States. 42 U.S.C. § 1983. A plaintiff must allege (1) that the conduct at issue was attributable at least in part to a person acting under color of state law, and (2) that such conduct deprived the plaintiff of a right, privilege, or immunity secured by the Constitution or laws of the United States. See. e.g., Rendell-Baker v. Kohn, 457 U.S. 830, 835 (1982); Parratt v. Taylor, 451 U.S. 527, 535 (1981), overruled on other grounds, Daniels v. Williams, 474 U.S. 327 (1986); Gomez v. Toledo, 446 U.S. 635, 640 (1980). However, a private actor may be subject to liability under § 1983 if he willfully collaborated with an state actor to deprive plaintiff of his federal rights. See Adickes v. S.H. Kress Co, 398 U.S. 144, 152 (1970).
The defendant Union argues that the § 1983 claim against it should be dismissed because the Union is a private organization, and thus is not capable of state action. The Union did sign a collective bargaining agreement with a public entity, the school district, however, this is not sufficient to establish state action on the part of a labor organization. See McGovern v. Local 456, Int'l Brotherhood of Teamsters, 107 F. Supp.2d 311, 317 (S.D.N.Y. 2000) (finding that mere negotiation in the course of completing a collective bargaining agreement does not rise to the level of improper conspiracy"); Dunn v. Co. of Erie, No. 92-CV-0511E(M), 1993 WL 427455, at *3 (W.D.N.Y. Oct. 14, 1993) (noting that the fact that a private union has a collective bargaining agreement with the state is insufficient to establish state action). There is no allegation in the complaint that the Union willfully collaborated or conspired with a State actor in the deprivation of a federal right, as is required in order to confer liability upon a private entity under § 1983. Adickes, 398 U.S. at 150; Dennis v. Sparks, 449 U.S. 24, 27-28 (1980); McGovern, 107 F. Supp.2d at 316. The § 1983 claim against the Union is therefore dismissed.
Plaintiffs ask for leave to amend their § 1983 claim against the Union in order to assert collaboration between the Union and the other defendants. I find that this amendment to the complaint would be futile, and therefore deny plaintiffs' request.
B. The Claim Against the School Board and the School District
The School Board and the School District assert that they are entitled to qualified immunity as governmental officials performing discretionary functions. They also contend that their actions satisfy rational basis review, and thus the § 1983 claim against them should be dismissed since they have not violated plaintiffs' constitutional rights.
Plaintiffs claim that the School Board and the District violated their right to equal protection under the laws by discriminating against them based upon their age. Defendants are correct that age is not a suspect class under the Equal Protection Clause, and therefore, discrimination on the basis of age need only be justified by a rational basis. See Vance v. Bradley, 440 U.S. 93 (1979). In this case, defendants have asserted rational reasons for not opening up the Option to teachers who had already passed through the retirement portal. First, allowing these teachers to partake in the Option would have made the new agreement much more expensive. Second, offering the early retirement benefits to those who had already refused early retirement would encourage teachers in the future not to accept early retirement, but instead to continue working to wait and see if a better plan comes along.
In any event, the School Board and the District are entitled to qualified immunity because at the time they signed the CBA, it was not clearly established that setting up the pension program in this matter would violate plaintiffs constitutional rights. See Wood v. Strickland, 420 U.S. 308 (1975); Bruneau v. South Kortright Cent. Sch. Dist., 163 F.3d 749, 755 (2d Cir. 1998) (citing Harlow v. Fitzgerald, 457 U.S. 800, 818 (1982)). The constitutional claims against the School Board and the School District are therefore dismissed.
VI. Amendments to the Complaint
Plaintiffs ask for permission to amend their complaint to add more plaintiffs to the complaint. Since leave to amend should be freely granted when justice so requires, Fed.R.Civ.P. R. 15(a), plaintiff may submit an amended complaint with additional plaintiffs within the next ten (10) business days.
CONCLUSION
For the foregoing reasons, plaintiffs' motion for summary judgment on the ADEA and New York Human Rights Law claims is granted. Plaintiffs' constitutional claims against the Union, the School Board and the School District are dismissed. Plaintiffs' request for permission to add further plaintiffs to the complaint is granted.
This constitutes the decision and order of the Court.