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Oliver v. Alcoa, Inc

United States District Court, W.D. Washington

April 24, 2017

MICHAEL OLIVER, et al., Plaintiffs,
ALCOA, INC., Defendant.


          JAMES L. ROBART District Judge.


         Before the court are three motions: (1) Defendant Alcoa, Inc.'s ("Alcoa") motion for summary judgment (Alcoa Mot. (Dkt. # 32)); (2) Plaintiffs Michael Oliver and Kris Oliver's (collectively, "the Olivers") motion for reconsideration of the court's September 12, 2016, order and for summary judgment (Olivers Mot. (Dkt. # 40); see also 9/12/16 Order (Dkt. # 29)); and (3) Aloca's motion to stay the proceedings (MTS (Dkt. # 47)). The court has considered the motions, the parties' submissions filed in support of and opposition to the motions, the relevant portions of the record, and the applicable law. Being fully advised, [1] the court GRANTS Alcoa's motion for summary judgment, DENIES the Olivers' motion, and DENIES Alcoa's motion to stay as moot.


         The suit arises out of a planned curtailment of the workforce at Alcoa's Intalco Works aluminum smelter in Ferndale, Washington, in November 2015. (Hughes Deck (Dkt. # 19) ¶ 5.) On December 18, 2015, in preparation for the planned layoffs at the Ferndale plant, Mr. Oliver executed two documents, titled "Memo[random]" and "Separation Agreement." (FAC Ex. A (Dkt. # 8-1) at 2-3 (attaching Memorandum), 4-5 (attaching Separation Agreement).) The Memorandum states that Mr. Oliver's "last day of employment will be 3/31/2016" and that he "will receive severance in accordance with the Company's Severance Pay Plan" in the amount of $80, 292.00. (Id. Ex. A at 2.) The Memorandum states that "[t]o receive an enhanced separation pay package, you must sign the attached Separation Agreement releasing the Company from future claims." (id.)

         The Separation Agreement states that Mr. Oliver will receive benefits "under the Plan" or as "provided in the Plan, which are intended to provide an economic bridge during possible unemployment and not as compensation for services previously rendered." (Id. at 4-5.) The Separation Agreement also states that Mr. Oliver "acknowledge[s] ... receiv[ing] a summary of Plan provisions describing the eligibility requirements for benefits under the Plan . ..." '(Id. at 5.) The Separation Agreement encourages the employee to discuss the agreement with a private attorney, [2] and contains an acknowledgement that the employee had the opportunity to seek the advice of counsel before signing it. (Id.)

         In a previous order, [3] the court held that "the use of the terms 'in accordance with [the Company's Severance Pay Plan]' in the Memorandum ... clearly and unequivocally incorporates 'the Company's Severance Pay Plan' into the Memorandum, " and the "use of the terms .'provided in the Plan' in the Separation Agreement clearly and unequivocally incorporates the 'Plan' into the Separation Agreement." (9/12/16 Order at IS; see also Id. at 19 ("[T]he Memorandum unambiguously does not stand alone, but rather incorporates by reference 'the Company's Severance Pay Plan' or the 'Plan.'").)[4]Indeed, the court held that "ignoring the Memorandum's reference to 'the Company's Severance Pay Plan' or the Separation Agreement's reference to the 'Plan' would improperly render these terms superfluous under Washington law. (Id. at 19.) The court, however, did not determine at that time to which specific document these terms referred. (See Id. at 20-25.) Thus, the identity of the document that the parties "clearly and unequivocally" incorporated by reference into their agreement is a primary focus of the parties' present motions. (See Olivers Mot. at 12-14; Aloca Mot. at 4-5.)

         Throughout this litigation, Alcoa has consistently argued that the terms "the Company's Severance Pay Plan" and the "Plan" in the Memorandum and Separation Agreement refer to Alcoa's Involuntary Separation Plan ("ISP"). (Alcoa Mot. at 3; 9/12/16 Order at 23 (indicating that Alcoa's proffered interpretation of the terms "Company's Severance Plan" and the "Plan" as referring to the ISP is reasonable); Furnas Decl. (Dkt. # 6) ¶¶ 3-4, Ex. A (attaching copy of ISP).) The ISP states that it "provides a lump-sum cash benefit in the event of a permanent separation from employment." (Furnas Decl. ¶¶ 3-4, Ex. A at 6.) The ISP also states that "[t]o receive ISP benefits, you must incur a permanent separation of employment and meet the conditions for . . . benefits." (Id.; see also Id. Ex. A at 7 ("To receive ISP benefits, you must incur a permanent separation....").) The ISP further defines a "permanent separation" as requiring "the termination of employment, " and expressly provides that "[i]n no event does a permanent separation from employment occur if the employee is offered suitable employment by Alcoa, a subsidiary, or a successor employer." (Id. Ex. A at10.)

         It is undisputed that Alcoa emailed a copy of the ISP to Mr. Oliver in August 2012. (Gilmore Decl. (Dkt. # 34) ¶¶ 3-5, Exs. A-B).) The email described and provided // a link to a copy of the ISP on the Internet. (Id. ¶ 5, Ex. B.) The email also advised Mr. Oliver to retain a copy of the email for future reference. (Id.) Although Mr. Oliver does not recall this email, he does not dispute that he received it. (Hobbs Decl. (Dkt. # 44) ¶ 2, Ex. A ("Oliver Dep.") at 53:20-24.)

         The Olivers maintain that the ISP is not incorporated into the Memorandum and Separation Agreement. (See Olivers Mot. at 7.) Mr. Oliver testifies that, before he signed the Memorandum and Separation Agreement, he asked Ms. Sandra Hughes, Alcoa's Intalco Works Human Resources Manager, if there were any other documents that he needed to review to understand how the Separation Agreement would work. (3d Oliver Decl. (Dkt. # 36) ¶ 2.) Ms. Hughes recalls that Mr. Oliver was confused by the page numbering, which indicated that the agreement contained 86 pages due to the use of a mail merge. (Hughes Dep. (Dkt. # 41-2) at 61:15-25, 62:1-4.) Mr. Oliver was concerned that he was missing pages from the Memorandum and Separation Agreement. (1st Oliver Decl. (Dkt. # 10) ¶ 5 "[T]he bottom of the Memorandum stated that it was pages 1 and 2 of 86 and I asked Ms. Hughes about the additional 84 pages that appeared missing.").) Ms. Hughes testified that she reassured Mr. Oliver that there were "no missing pages from his packet." (Hughes Dep. at 62:1-9; see also 1st Oliver Dep. ¶ 5 ("Ms. Hughes told me that she had printed off all of the employees' separation agreements as a batch and that the other employees' offers were contained in the remaining 84 pages.").) She also told Mr. Oliver that "[a]ll the information for the agreement is included" in the documents he received. (Hughes Dep. at 63:4-22; see also II 3d Oliver Decl. ¶ 2 ("[Ms. Hughes] assured me that there was nothing else to review and no other relevant documents ... .")•)

         Although Ms. Hughes testified that the term "the Company Severance Pay Plan" referred to the ISP (id. at 56:3-4, 56:11-18, 59:2-6), she also acknowledged that she did not explain this to Mr. Oliver, that an employee would not know the meaning of the term-"the Company Severance Pay Plan"-from simply reading the Memorandum, and that she has never included a copy of the ISP as a part of the separation packets she distributed to Alcoa's employees (id. at 54:22-55:3, 59:7-20). She also knows of no Alcoa document that defines either "the Company Severance Pay Plan" or the "Plan" as the ISP. (Id. at 57:15-23.)

         In his deposition, Mr. Oliver testifies that although he read the phrases "the Company's Severance Pay Plan" and the "Plan" in the Memorandum and Separation Agreement, and although he did not understand what these terms meant, he did not ask anyone at Alcoa to what these terms referred. (Oliver Dep. at 30:13-6.) Instead, Mr. Oliver declares that, based on Ms. Hughes's statements to him, he "felt assured that [he] had all the documents and relevant information, and that 'the Company's Severance Pay Plan' and 'the Plan' must be the legal terms for the documents he already had, meaning the Memorandum and Separation Agreement together with the Older Workers Benefits Protection Act Notice to Employees." (3d Oliver Decl. ¶ 2; see also Oliver Dep. at 32:8-13 ("I thought that those references were to the five pages that I had received. I specifically asked [Ms. Hughes] if there was any other documents related to this document that I should review or need to review to better understand this document. And she said there were none.").)

         The only other Alcoa employee who spoke to Mr. Oliver about the Memorandum and Separation Agreement was Jair Furnas. (See Olivers Mot. at 6 (citing Furnas Dep. (Dkt. # 41-3)).) Mr. Furnas did not discuss the terms of the Memorandum and Separation Agreement but rather reviewed the severance payment amount with Mr. Oliver. (Furnas Dep. at 66:23-68:6.) When Mr. Furnas reviewed the amount of Mr. Oliver's anticipated severance pay, he used the ISP to make the calculation. (See id.) Mr. Furnas did not give a copy of the ISP to Mr. Oliver because Mr. Oliver did not ask for one (id. at 70:24-71:12), and like Ms. Hughes, Mr. Furnas is unaware of any Alcoa document that defines "the Company Severance Pay Plan" or the "Plan" as the ISP (id. at 75:21-76:8). Mr. Furnas did not explain to Mr. Oliver that Mr. Oliver's severance payment could be revoked or rescinded if the curtailment did not occur (id. at 71:13-72:2) because Mr. Furnas believes that

. . .it's reasonable to assume that if there's no curtailment, no severance. You only get severance if you get severed. If you don't get severed, you don't get severance. And [he] never had anyone specifically ask ... a question that would lead [him] to think they didn't understand that.

(Id. at 72:8-13.) Indeed, during his deposition, Mr. Oliver acknowledged that voluntary severance packages are benefits that employees who are severed from their employment receive. (Oliver Dep. at22:14-18.)[5]

         After a favorable improvement in market conditions, Alcoa cancelled its planned curtailment at the Intalco Works plant, and more than 400 employees retained their jobs. (See Hughes Decl. ¶ 11.) A few days later, on January 21, 2016, Mr. Furnas announced in an email that all "ISP/Severance offers are rescinded." (1st Oliver Decl. (Dkt # 10) ¶ 11, Ex. C.) Alcoa cancelled the anticipated severance payments to the salaried employees who had been scheduled to be severed but ultimately continued their employment, including Mr. Oliver. (See Hughes Decl. ¶ 13.) Mr. Oliver did not suffer a separation from his employment at Alcoa, but rather continued to work at the plant after his previously scheduled separation date of March 31, 2016. (See Id. ¶ 11.) Mr. Oliver's pay, position, job duties, and all other terms of his employment at Alcoa remained the same. (Id.) Ultimately, Mr. Oliver voluntarily retired on May 31, 2016. (Oliver Dep. at 46:9-21.) At the time he retired, Alcoa did not eliminate Mr. Oliver's position. (Id. at 46:19-24.)

         On February 4, 2016, Mr. Oliver sent an email to both Ms. Hughes and Mr. Furnas stating that "[n]othing in [Alcoa's Separation Agreement] allows Alcoa to rescind its offer" of an $80, 292.00 severance payment to him. (1st Oliver Decl. ¶ 11, Ex. D.) He further demanded "confirmation in writing by Monday 2.15.16 that [Alcoa] will abide by [the] written agreement." (Id.) On February 8, 2016, Ms. Hughes sent an email in response stating that the "receipt of... ISP .. . benefits is based on the occurrence of an involuntary separation" and that "[d]ue to continued operations, the Company w[ould] not be initiating [his] separation on March 31." (Id. ¶ 12, Ex. D.)

         On April 20, 2016, the Olivers filed a complaint in Whatcom County Superior Court against Alcoa alleging claims for declaratory relief, specific performance, and breach of contract. (Compl. (Dkt. #1-1).) On May 23, 2016, Alcoa removed the Olivers' complaint to this court. (Notice of Removal (Dkt. #1).) On June 20, 2016, the Olivers filed an amended complaint. (FAC (Dkt. # 8).) The Olivers' amended complaint is identical to their original complaint except that the amended complaint adds a claim for willful withholding of wages under RCW 49.52.050 and RCW 49.52.070. (Compare Compl., with FAC.)

         On May 31, 2016, Alcoa filed a motion to dismiss the Olivers' complaint. (1st MTD.) Alcoa argued that the terms "the Company's Severance Pay Plan" and the "Plan" in the Memorandum and Separation Agreement referred to the ISP, and the ISP states in numerous places that employees are eligible to receive severance payments only if their employment is severed. (Id. at 2-3.) After the Olivers amended their complaint, Alcoa filed a second motion to dismiss the Olivers' added claim for willful withholding of wages. (See 2d MTD.) The Olivers cross moved for summary judgment. (See 1st SJ Mot.) In their motion, the Olivers argued that the ISP is not part of Mr. Oliver's contract with Alcoa and that Mr. Oliver is entitled to receive the $80, 292.00 severance payment despite his continued employment with Alcoa. (See generally id.) As discussed above, although the court denied both motions, the court ruled that the contract between Alcoa and Mr. Oliver does not stand alone, but rather incorporates by reference "the Company's Severance Pay Plan" or the "Plan" into the agreement. (See 9/12/16 Order at 17-19.)

         On October 7, 2015, Alcoa filed a motion asking the court to grant it summary judgment by ruling that (1) the terms "the Company's Severance Pay Plan" and the "Plan" refer to and incorporate the ISP into the Memorandum and Separation Agreement, and (2) the ISP precludes the payment of severance benefits to Mr. Oliver. (See generally Alcoa Mot.) Before the court could rule on Alcoa's motion, however, the Olivers filed a motion (1) for relief under Federal Rule of Civil Procedure 60(b) and Local Civil Rule 7(h) from the court's first order denying Alcoa's motions to dismiss and the Olivers' first motion for summary judgment and (2) for the entry of summary judgment in their favor that the terms "the Company's Severance Pay Plan" and the "Plan" in the Memorandum and Separation Agreement do not refer to the ISP, but rather refer back to the Memorandum and Separation Agreement themselves. (See Olivers Mot.) The court entered an order directing the Clerk to renote Alcoa's motion for the same day as the Olivers' motion. (2/21/17 Order (Dkt. # 42) at 2 (citing Local Rules W.D. Wash. LCR 7(k)).) The court now considers these motions.

         III. ANALYSIS

         A. The Olivers' Request for Reconsideration of the ...

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