Vogel v. American Home Products

Filed: September 22, 1997
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 96-2674
(CA-95-757)
John Allan Vogel,
Plaintiff - Appellant,
versus
American Home Products, etc., et al,
Defendants - Appellees.
O R D E R
The Court amends its opinion filed September 17, 1997, as
follows:
On page 3, second full paragraph, line 1 -- the word "judge-
ment" is corrected to read "judgment."
On page 8, first paragraph, line 5 -- the citation is cor-
rected to read "29 C.F.R. § 541.118(a)(2)."
On page 8, second full paragraph, lines 6 and 7 -- a space is
inserted in the citation between "F." and "Supp."
For the Court - By Direction
/s/ Patricia S. Connor
Clerk
UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
JOHN ALLAN VOGEL,
Plaintiff-Appellant,
v.
AMERICAN HOME PRODUCTS
CORPORATION SEVERANCE PAY PLAN;
WHITEHALL ROBINS COMPANY, a
division of A. H. Robins Company,
Incorporated, a wholly owned
subsidiary of American Home
Products, Incorporated, No. 96-2674
Defendants-Appellees.
and
WHITEHALL ROBINS SEVERANCE PAY
PLAN; AMERICAN HOME PRODUCTS
CORPORATION/Whitehall Robins, a
division of American Home
Products Corporation, WHITEHALL
ROBINS, INCORPORATED,
Defendants.
Appeal from the United States District Court
for the Eastern District of Virginia, at Richmond.
James R. Spencer, District Judge.
(CA-95-757)
Argued: July 18, 1997
Decided: September 17, 1997
Before ERVIN, Circuit Judge, and BUTZNER and
PHILLIPS, Senior Circuit Judges.
_________________________________________________________________
Affirmed by unpublished per curiam opinion.
_________________________________________________________________
COUNSEL
ARGUED: John Bertram Mann, LEVIT & MANN, Richmond, Vir-
ginia, for Appellant. Daryl Eugene Webb, Jr., MAYS & VALEN-
TINE, L.L.P., Richmond, Virginia, for Appellees. ON BRIEF:
Kimberly W. Daniel, MAYS & VALENTINE, L.L.P., Richmond,
Virginia, for Appellees.
_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
_________________________________________________________________
OPINION
PER CURIAM:
John Allan Vogel filed suit in federal district court against White-
hall Robins Company and American Home Products, Inc. Severance
Pay Plan (hereinafter collectively referred to as Whitehall Robins)
claiming racial discrimination in violation of Title VII of the Civil
Rights Act of 1964, 42 U.S.C. § 2000 et seq., age discrimination
under the Age Discrimination in Employment Act (ADEA), 29
U.S.C. § 621 et seq., unpaid overtime compensation under the Fair
Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq., unlawful denial
of severance benefits in violation of the Employment Retirement
Income Security Act (ERISA), 29 U.S.C. §§ 1001-1461, and
retaliation.1 Upon Whitehall Robins' motion for summary judgment,
_________________________________________________________________
1 Vogel's retaliation claim specified the following:
Whitehall-Robins refused to give to Vogel his severance pay,
out-placement counseling, and continued health benefits in retal-
iation for his stating his intention to file a charge with the EEOC
in violation of both Title VII of the Civil Rights Act of 1964 as
amended and the ADEA.
J.A. at 16.
2
the district court granted summary judgment for Whitehall Robins on
all claims. For the reasons hereinafter explored, we affirm the deci-
sion of the district court.
I.
Vogel was employed by Whitehall Robins, a division of the A.H.
Robins Company (Robins) which is owned by American Home Prod-
ucts Corporation (AHPC). After AHPC acquired Robins in 1989, the
management of Whitehall Robins decided to consolidate the two
credit and collections departments that existed within the division, the
Whitehall department and the consumer products department. At that
time, Vogel, a white man, was the credit manager of consumer prod-
ucts and Richard Byrd, a black man, was the credit manager of White-
hall. Byrd was chosen to head up the consolidated department and
Vogel was terminated because his position was eliminated.
II.
We must review the district court's grant of summary judgment
in favor of Whitehall Robins de novo on appeal, applying the same
standard used by the district court itself. See Conkwright v. Westing-
house Elec. Corp., 933 F.2d 231, 233 (4th Cir. 1991). "[T]he non-
moving party is entitled to have his evidence as forecast assumed, his
version of that in dispute accepted, and the benefit of all favorable
inferences." Id. at 233. See also E.E.O.C. v. Clay Printing Co., 955
F.2d 936, 940 (4th Cir. 1992).
III.
A.
Whitehall Robins argues that Vogel's race and age discrimination
claims, and his retaliation claim, were not timely filed. Pursuant to
Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-5(f)(1),
federal discrimination claims must be filed within 90 days after the
EEOC gives the claimant notice of his right to sue.2 Vogel counters
_________________________________________________________________
2 The 90-day statute of limitations applies both to the discrimination
and retaliation claims. Even though the district court concluded that
Vogel's retaliation claim fails on the merits, we need not enter that dis-
cussion.
3
that, because the first right-to-sue letter arrived at an address from
which he had already moved, and without his knowledge, the doctrine
of equitable tolling should have extended the 90-day time period for
filing a discrimination suit until after he had actually received the let-
ter.
Vogel filed a charge with the EEOC on December 27, 1994, and
the EEOC informed him by letter on March 9, 1995, that he must
keep the EEOC abreast of any changes in his mailing address. Next,
the EEOC mailed him his right to sue letter on September 26, 1995,
but the certified letter was returned to the EEOC as unclaimed. Not
until October 26, 1995, did Vogel notify the EEOC of his address
change. Finally, on December 15, 1995, the EEOC mailed a second
copy of the September letter to Vogel's new address. Vogel did not
file his complaint until March 14, 1996.
The district court applied the presumption set forth in Fed. R. Civ.
P. 6(e) to conclude that Vogel had received constructive notice of his
right to sue three days after the EEOC mailed the first letter, in other
words on September 29, 1995, making Vogel's March 14, 1996, com-
plaint untimely. Dismissing the Rule 6(e) presumption as inapplica-
ble, Vogel interprets the tolling doctrine as not starting the 90 day
clock running until December 18, 1995, the day he received the
EEOC's second notice. Thus, according to Vogel, his March 14 filing
was timely.
The Supreme Court has established the rule that filing of a timely
charge of discrimination with the EEOC is subject to equitable toll-
ing. See Zipes v. Transworld Airlines, Inc., 455 U.S. 385, 393 (1982).
The Court has also specifically stated that this tolling may extend the
90-day period given in which to file a suit after receiving a right-to-
sue letter. See Baldwin County Welcome Ctr. v. Brown, 466 U.S. 147(1984). However, in applying the rule from Brown in this Circuit, we
have held that the doctrine of equitable tolling does not apply where
the plaintiff's failure to notify the EEOC of an address change after
agreeing to do so resulted in a lack of actual notice. See Harper v.
Burgess, 701 F.2d 29, 30 (4th Cir. 1983). The Seventh Circuit has
pointed out that a plaintiff bears the burden of ensuring that a right-
to-sue letter is sent to his proper address:
4
Since 1977 people who have filed charges with the EEOC
have been required to notify the Commission of any change
of address. 42 Fed. Reg. 47,833 (Sept. 22, 1977). The regu-
lation, 29 C.F.R. § 1601.7(b) (1981), makes mandatory that
which is dictated by common sense. The regulation provides
that a person who has filed a Title VII charge "has the
responsibility to provide the Commission with the notice of
any change in address and with notice of any prolonged
absence from that current address so that he or she can be
located when necessary during the Commission's consider-
ation of the charge." Id. The burden of providing the EEOC
with changes of address is minimal. It is unreasonable to
expect EEOC to pour over its files, and those of state admin-
istrative agencies, in an effort to ascertain which of the
addresses contained therein is correct.
St. Louis v. Alverno College, 744 F.2d 1314, 1316 (7th Cir. 1984). We
agree with the logic of our sister circuit.
A central factor in determining when the limitations period is trig-
gered is the extent to which the claimant's failure to receive actual
knowledge of the letter was due to fault of his own. In Watts-Means
v. Prince George's Family Crisis Ctr., 7 F.3d 40 (4th Cir. 1993), we
found that the limitations period was triggered when the claimant
received notice that she could pick up her letter at the post office. In
Harvey v. City of New Bern Police Dept., 813 F.2d 652 (4th Cir.
1987), equitable tolling was not applied where the claimant's wife
signed for the letter and he did not become aware of it until he
returned from a trip.3 Under similar circumstances, the claimant nei-
ther received an extension in Espanoza v. Missouri Pac. Ry. Co., 754
F.2d 1247 (5th Cir. 1985), nor in Bell v. Eagle Motor Lines, 693 F.2d
1086 (11th Cir. 1982). In Sanderlin v. La Petite Academy, Inc., 637
F.Supp. 1166 (E.D. Va. 1986), the claimant was held to the 90-day
statute of limitations even though she was out of town and the EEOC
letter was signed for by her husband. By contrast, the 90-day period
was tolled where notice was received by the claimant's nine-year-old
_________________________________________________________________
3 This case explicitly rejected the "actual receipt" rule then extant in the
Seventh Circuit which had been established by Archie v. Chicago Truck
Drivers, 585 F.2d 210 (7th Cir. 1978).
5
nephew who lost the letter and never told the claimant that the letter
had even arrived. Franks v. Bowman Transp. Co., 495 F.2d 398 (5th
Cir. 1974), rev'd on other grounds, 424 U.S. 747 (1976).
Vogel had filed charges with the EEOC, he had been notified by
the Commission that he should inform them of any address change,
and he bore an obligation under the federal regulations to do so; thus,
Vogel's case is even less compelling than those mentioned above
where the tolling doctrine was not employed. Accordingly, the district
court did not err in finding that Vogel received notice of his right to
sue on September 29, 1995, and holding that Vogel's March 14, 1995
claims of race and age discrimination were untimely.4 We further con-
clude that Vogel's claim of retaliation is subject to a procedural
default because it was also untimely filed.
B.
Vogel next claims that he is due overtime compensation and inter-
est for those hours that he worked over a 40-hour week because, he
argues, he was not employed "on a salaried basis" and thus was
exempt from the FLSA.
The FLSA requires that employers pay their covered employees
overtime wages, at a rate of time-and-a-half, for hours in excess of 40
in a single week. Overtime wages are not required to be paid to
employees who meet certain "white collar exemptions" by virtue of
serving in an executive, administrative, or professional capacity. See
29 U.S.C. § 213(a)(1). The Secretary of Labor is responsible for
delineating those circumstances under which white collar exemptions
are appropriate. Pursuant to 29 C.F.R. § 541.118, employees whose
positions are characterized by professional, administrative, or execu-
tive duties and are paid on a salary basis are exempt from the FLSA
overtime requirements. Shockley v. City of Newport News, 997 F.2d
18, 21 (4th Cir. 1993). In the instant case, Vogel does not argue that
_________________________________________________________________
4 We note that even after Vogel received the second copy of the Sep-
tember 26, 1995, right-to-sue letter on December 18, 1995, he still had
ten days to file suit under the 90-day statute which began running on
September 29th. Further, Vogel had the benefit of counsel during this
entire process.
6
he was nonexempt based on his duties, but rather on his method of
compensation.
The employer bears the burden of demonstrating by clear and con-
vincing evidence that an employee meets the FLSA exemption. See
Shockley, 997 F.2d at 21-22.
The FLSA salary basis exemption states that
(a) An employee will be considered to be paid"on a sala-
ried basis" within the meaning of the regulations if under his
employment agreement he regularly receives each pay
period on a weekly, or less frequent basis, a predetermined
amount constituting all or part of his compensation, which
amount is not subject to reduction because of variations in
the quality or quantity of the work performed. Subject to the
exceptions provided below, the employee must receive his
full salary for any week in which he performs any work
without regard to the number of days or hours worked.
...
29 C.F.R. § 541.118 (emphasis added).
Vogel points to four of Whitehall Robins' policies for the proposi-
tion that he was not a salaried employee: 1) maintaining a summer
work schedule setting work hours for its salaried employees; 2)
requiring exempt employees to take vacations in one-half-day incre-
ments for vacations taken on Fridays during the summer schedule
(May 27-August 30); 3) providing overtime compensation for salaried
exempt employees; and 4) requiring Vogel to report his absences to
his supervisors in spite of the fact that he was considered to be a sala-
ried employee.
Whitehall Robins' requirements that employees, salaried and
hourly alike, follow a summer work schedule and report absences to
supervisors are not, on their face, violative of 29 C.F.R. § 541.118.
The regulation simply states that salaries not be subject to reductions
based on the amount of time worked. Further, the regulation lists
exceptions to this rule; however, those exceptions only spell out per-
7
missible reasons for making deductions in salary. Specifically, the
regulation provides that, if the employee is to remain exempt, an
employer can only make deductions from the employee's salary for
absences of a day or more for personal reasons, other than sickness
or accident. see 29 C.F.R. § 541.118(a)(2). The regulations do not,
however, prohibit an employer from using an employee's time
records for other disciplinary purposes or, as with Whitehall Robins,
from carrying out a Weekly Sickness and Accident Plan.
Vogel also argues that his employer's overtime compensation pol-
icy places him outside the salaried employee exemption. First, the
deposition of the division's Wage and Salary Administrator Michael
Hale indicates that Vogel was not an exempt employee eligible for
overtime pay. Whitehall Robins' policy statement clearly stated that
"[e]xempt overtime compensation will not be paid to positions
responsible for authorizing, approving or scheduling overtime." J.A.
at 72. According to Hale, Vogel held such a position.
Even if Vogel had been eligible for, and received, overtime--
which, according to the record, he did not--we conclude that because
the regulations specifically allow for additional compensation, over-
time pay alone does not affect an employee's salaried status.5 See,
e.g., York v. City of Wichita Falls, 944 F.2d 236, 242 (5th Cir. 1991);
Quirk v. Baltimore County, 895 F. Supp. 773, 781 (D. Md. 1995);
Hartman v. Arlington County, 720 F. Supp. 1227 (E.D. Va. 1989),
aff'd on reasoning of lower court, 903 F.2d 290 (4th Cir. 1990); but
see Abshire v. County of Kern, 908 F.2d 483, 486 (9th Cir. 1990),
cert. denied, 498 U.S. 1068 (1991) (deciding that additional compen-
sation in the form of one hour of compensatory time off for every
hour of overtime worked is "not generally consistent with salaried
status.").6
_________________________________________________________________
5 "[A]dditional compensation besides salary is not inconsistent with the
salary basis payment." 29 C.F.R. § 541.118(b).
6 The district court unnecessarily relies on dicta in a footnote in Abshire
to support its conclusion that overtime will not affect the salaried status
of an employee who only receives it on "special occasions." J.A. at 47.
We, however, have not required such a restricted application.
8
Finally, Vogel contends that he was not paid on a salaried basis
because he was required to take vacation leave under the summer
schedule in at least one-half-day increments. The policy in question
allows that, "[w]hile separate [vacation] days may be taken, if
approved, no less than one-half day can be taken and charged to vaca-
tion time." J.A. at 68 (emphasis in original).
Vogel implies that the policy does not fall within the exception to
the salaried exemption which states that "deductions may be made . . .
when the employee absents himself from work for a day or more for
personal reasons, other than sickness or accident." 29 C.F.R.
§ 541.118(a)(2). He essentially argues that docking vacation time in
increments of less than one day is equivalent to docking his salary for
absences of less than one day.
Based on Vogel's contention, the relevant question under
§ 541.118(a) of the regulations becomes whether Vogel was "subject
to" a pay deduction for taking personal leave.7 Salary has generally
_________________________________________________________________
7 The Supreme Court recently addressed the issue of whether a public-
sector employer's policy language is controlling where the language does
not comport with the employer's actual practice. The Court adopted the
Secretary of Labor's interpretation of the salary basis test:
[T]he salary-basis test . . . den[ies] exempt status when employ-
ees are covered by a policy that permits disciplinary or other
deductions in pay "as a practical matter." That standard is met
. . . if there is either an actual practice of making such deductions
or an employment policy that creates a "significant likelihood"
of such deductions. The Secretary's approach rejects a wooden
requirement of actual deductions, but in their absence it requires
a clear and particularized policy--one which "effectively com-
municates" that deductions will be made in specified circum-
stances. This avoids the imposition of massive and unanticipated
overtime liability . . . in situations in which a vague or broadly
worded policy is nominally applicable to a whole range of per-
sonnel but is not "significantly likely" to be invoked against sala-
ried employees.
Auer v. Robbins, 117 S.Ct. 905, 911 (1997) (citations omitted). Vogel,
however, does not argue about what deductions are likely to happen;
rather, he asserts that impermissible deductions from his salary did take
place in the form of reduced leave.
9
been given its common meaning by the courts, an employee's mone-
tary compensation. Vogel notes that district courts have addressed,
more squarely than have the circuit courts, the question of whether
leave time is part of a salary. See e.g., Thomas v. County of Fairfax,
758 F. Supp. 353, 366 n.24 (E.D. Va. 1991) (finding that "in the com-
pany of other factors indicative of an hourly payment scheme, the
docking of leave weighs in favor of a finding of non-salaried status.");
Service Employees Int'l v. County of San Diego, 784 F. Supp. 1503,
1510-1511 (S.D. Cal. 1992) ("[T]he docking of an employee's leave
time for absences from work is as contrary to the notion of salaried
status as the docking of base pay.").
A district court in our circuit has expressed the view, in contrast to
that of Thomas and Service Employees, that salary deductions only
refer to monetary deductions from an employee's base pay:
Under 29 C.F.R. § 541.118(a), an employee is considered
salaried when he regularly receives a predetermined amount
constituting all or part of his compensation. While personal
leave, sick leave and/or compensatory time may be part of
an employee's compensation package, it does not constitute
salary. Moreover, in a July 17, 1987 letter ruling interpreting
agency regulations, the Department of Labor stated that
while deductions in salary are not permitted for absences of
less than a day, an employer may require an employee to
substitute paid leave for such absences without losing the
exemption. See Administrative Letter Rulings: Department
of Labor, Wage and Hour Division, July 17, 1987.
Fire Fighters Local 2141 v. City of Alexandria, 720 F. Supp. 1230(E.D. Va. 1989), aff'd, 912 F.2d 463 (4th Cir. 1990). The Fifth Circuit
also weighed in on the question of whether leave constitutes part of
a salary:
If a[n] . . . [employee] took an hour off work, his compensa-
tion remained the same and the time was deducted from his
sick or vacation leave on an hourly basis. The relevant regu-
lations provide that such deductions do not establish that a
person is paid on a wage basis.
10
York v. City of Wichita Falls, 944 F.2d 236, 242 (5th Cir. 1991) (cit-
ing 29 C.F.R. § 541.118(b)); see also Leslie v. Ingalls Shipbuilding,
Inc., 899 F. Supp. 1578, 1581 (S.D. Miss. 1995).
Although the courts are not unanimous on the issue of whether
docking an employee's vacation violates his exempt status, given that
no monetary deductions were made from Vogel's base salary and he
does not argue that any were likely, we endorse the reasoning of Fire
Fighters and conclude that Vogel remained exempt from the FLSA
overtime compensation requirements.
C.
Vogel next argues that he was wrongly denied severance pay to
which he was entitled under Whitehall Robins' ERISA plan. See 29
U.S.C. §§ 1001-1461 (1988). He maintains that Whitehall Robins'
ERISA plan was wholly contained in a document prepared by the
company (referred to as the AHT) to explain the reorganization and
its impact on the corporate budget. This AHT also discussed certain
eligibility requirements for severance benefits.
Vogel does not dispute that the following documents were avail-
able to him: 1) the AHT 2) the company's general policy statement;
3) a description of the company's plan; 4) a general release required
to be signed before plan benefits could be received; and 5) a memo-
randum to employees notifying them that a general release must be
executed before severance benefits could be collected. If the general
release were indeed part of Whitehall Robins' ERISA plan, the fact
that Vogel refused to sign it made him ineligible for severance pay.
Vogel, however, while not denying the existence of the other docu-
ments Whitehall Robins alleges comprise the plan, argues that the
AHT is the only plan document. Vogel is correct that the AHT did
not refer to a separate release form to be signed by those employees
involuntarily retired in order for them to be eligible for severance pay;
however, the documents published by the company after the AHT
made this requirement clear.
Severance plans are welfare benefit plans under ERISA, 29 U.S.C.
§ 1002(1), and a plan need not be made up of one formal document.
See Schonholz v. Long Island Jewish Medical Center, 87 F.3d 72 (2d
11
Cir. 1996). Thus, the district court found that the release was either
part of a multi-document plan or, if not, it was a permissible amend-
ment to the original plan. The lower court did not err when it deter-
mined that, even if the release were a procedural violation of ERISA,
the amendment would be allowed if Whitehall Robins did not act in
bad faith or attempt to conceal the amendment from Vogel. See
Kreutzer v. A.O. Smith Corp., 951 F.2d 739, 743 (7th Cir. 1991)
("[T]he employer must have acted in bad faith, actively concealed the
benefit plan, or otherwise prejudiced their employees by inducing
their reliance on a faulty plan summary before recovery for proce-
dural violations is warranted.") (citations omitted). In fact, Vogel, and
all others who were eligible for severance benefits and were being ter-
minated, were notified before their termination of the requirement that
a release be signed.
The district court found that Vogel was not wrongfully denied ben-
efits because 1) Whitehall Robins did not violate ERISA and 2) Vogel
refused to sign the release form as required of all eligible terminated
employees. Even construing the facts in Vogel's favor, we conclude
that the district court was not in error.
IV.
Since Vogel was under an affirmative obligation to keep the EEOC
abreast of his correct address, and even the Commission's second
notice gave him time to file his suit within 90 days of the constructive
notice, the statute of limitations bars Vogel's ADEA, Title VII and
retaliation claims. Further, Vogel qualified as an FLSA-exempt
employee and, as such, was not entitled to overtime compensation.
Finally, Whitehall Robins did not violate ERISA and, since Vogel
declined to sign the company's general release, he is not entitled to
severance pay under the company plan. Therefore, the disposition of
the district court is
AFFIRMED.
12