Keller v. Orix Credit Alliance, Inc. ( 1997 )

Opinions of the United
1997 Decisions States Court of Appeals
for the Third Circuit
2-3-1997
Keller v. Orix Credit Alliance, Inc.
Precedential or Non-Precedential:
Docket 95-5289
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UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
No. 95-5289
___________
FREDERICK F. KELLER
Appellant,
vs.
ORIX CREDIT ALLIANCE, INC.
Appellee.
___________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
(D.C. Civil No. 93-cv-03466)
___________
ARGUED MARCH 6, 1996
BEFORE: MANSMANN, ALITO and LEWIS, Circuit Judges.
(Filed February 3, 1997)
___________
Debra L. Raskin (ARGUED)
Vladeck, Waldman, Elias & Engelhard
1501 Broadway
Suite 800
New York, NY 10036
Attorney for Appellant
Edwin M. Baum (ARGUED)
Solomon, Zauderer, Ellenhorn, Frischer & Sharp
45 Rockefeller Plaza
New York, NY 10111
1
Steven L. Lapidus
St. John & Wayne
Two Penn Plaza East
Newark, NJ 07105
Attorneys for Appellee
___________
OPINION OF THE COURT
___________
LEWIS, Circuit Judge.
In this age discrimination case, Frederick F. Keller
appeals from the district court's grant of summary judgment in
favor of his former employer, ORIX Credit Alliance, Inc. Keller
alleges that Credit Alliance violated the Age Discrimination in
Employment Act ("ADEA"), 29 U.S.C. § 621 et seq., and the New
Jersey Law Against Discrimination ("NJLAD"), N.J.S.A. 10:5-1 et
seq., by failing to promote him to the position of Chief
Operating Officer, and then terminating his employment. Keller
makes three principal arguments: first, that summary judgment
was inappropriate because there was sufficient direct evidence of
discrimination to create a material issue of fact as to the
legitimacy of his discharge; second, that the district court
required Keller to establish an impermissibly burdensome prima
facie case under the McDonnell Douglas-Burdine line of authority;
and finally, that the indirect evidence of discrimination,
combined with evidence of pretext in Credit Alliance's proffered
reason for his discharge, created a material issue of fact.
For the reasons set forth below, we will reverse the
district court's grant of summary judgment.
2
I.
Credit Alliance is a commercial finance company that
lends money to its customers for the lease or purchase of capital
equipment. Credit Alliance profits by borrowing money at one
interest rate, and lending it to its customers at a higher rate.
As of September, 1989, Frederick Keller was an Executive Vice
President and Director of Credit Alliance. His primary
responsibility was to raise the funds that Credit Alliance
intended to lend to its customers. Keller became responsible for
raising capital when Credit Alliance was sold in September of
1989 by First Interstate Bancorp to the ORIX Group. When Credit
Alliance was owned by First Interstate, First Interstate provided
most of Credit Alliance's capital needs. When ORIX acquired
Credit Alliance, however, it established a goal for Credit
Alliance to develop as quickly as possible its own "credit
facilities" in order to become financially independent from ORIX.
In the interim, ORIX arranged to have First Interstate continue
to provide working capital until Credit Alliance achieved
financial independence.
Keller was responsible for spearheading the effort to
acquire sufficient funding to achieve Credit Alliance's goal of
financial independence. Before the ORIX acquisition, Keller
estimated that it would require $1.5 billion to achieve financial
independence from First Interstate, and that this was an
attainable goal. Credit Alliance apparently adopted this figure
and used it to critique Keller's performance based on his
relative progress toward this figure.
3
For reasons contested by both parties, Keller never
reached this goal. The most credit Keller was ever able to
acquire for Credit Alliance was $785 million as of September,
1991. By September 1992, however, the credit available to Credit
Alliance was reduced to $695 million because four of the seven
lines of credit arranged by Keller were terminated. Credit
Alliance contends that the reason Keller never reached his credit
goal was because he was unreceptive to creative fundraising
tools, lacked the initiative to pursue financing routes around
the country, and lacked the diplomatic skills to negotiate with
Japanese bankers. Keller argues that the economic recession, as
well as many sources' unwillingness to lend to Japanese-owned
firms because of the downturn in the Japanese economy, were the
true reasons for his inability to reach the funding goal.
Additionally, he points out that his job was to obtain financing
on the most favorable terms, and that because of the recession,
the financing provided by First Interstate was the most
favorable.
In April of 1992, Daniel Ryan, Credit Alliance's Chief
Executive Officer, met with Keller to discuss the financing
effort. Ryan complained that he had not observed Keller
traveling to develop relationships with bankers, and then
allegedly stated, "If you are getting too old for the job, maybe
you should hire one or two young bankers." Ryan admits saying
"maybe you should hire one or two young bankers," but he denies
saying "if you are getting too old for the job." Keller
documented the contents of this meeting in his journal, including
4
the statement Ryan admits making, but the "if you are getting too
old" part is not recorded in the journal.
According to Credit Alliance, Ryan and many members of
the Board of Directors overseeing Credit Alliance became
increasingly concerned about the progress being made toward
financial independence. The parties dispute where these people
placed the blame for the failure: Credit Alliance contends that
on many occasions it warned Keller that his performance was
unacceptable; in contrast, Keller maintains that while some board
members expressed their concern as to the progress being made,
they ultimately accepted Keller's assessment that the state of
the economy made it impossible for him to secure financing on
favorable terms.
In May of 1992, Ryan promoted Philip Cooper, age 43, to
the position of Chief Operating Officer. In the 18 months before
his promotion, Cooper had taken responsibility for a transaction
resulting in a four million dollar loss to Credit Alliance, and
his region had higher "past due" statistics than comparable
regions. Despite the fact that Keller had expressed an interest
in the position, Ryan did not consider Keller for Chief Operating
Officer. According to Ryan, he was looking for someone with
"line experience," and Keller was simply not qualified for the
position.
In September of 1992, Ryan decided to terminate Keller.
Ryan hired an executive search firm to find candidates for
Keller's position. Among the criteria listed by the defendant in
a potential candidate were "experience in implementing asset-
5
backed securitization programs and other creative forms of fund
raising, strong skills in working with rating agencies and
bankers, particularly Japanese bankers, and be result-driven."
In April of 1993, Ryan officially terminated Keller. He offered
Keller's failure to raise adequate financing and the resulting
displeasure of the Board of Directors and other ORIX officers as
the reason for Keller's termination.
At or shortly after the termination meeting, Keller,
while negotiating the amount of his severance pay, asked Ryan if
the reason for his dismissal was his age, and reminded Ryan of
the alleged age comment. Ryan then replied that Keller should
"do what he had to," because he had checked with their lawyer and
been assured that they would have no problem with an age
discrimination claim, but that he (the lawyer) could be wrong
because he was just a lawyer.
Ryan hired Joseph McDevitt, age 46, to replace Keller.
Within a year, McDevitt exceeded the $1.5 billion goal. The
parties' briefs do not disclose whether or not the terms of the
financing obtained by McDevitt were significantly more favorable
than from First Interstate.
Keller subsequently brought suit against ORIX in
federal district court alleging age discrimination under the ADEA
and the NJLAD, for failing to promote him to the position of
Chief Operating Officer a year prior to his dismissal, and for
terminating him in 1993. In ruling on Credit Alliance's motion
for summary judgment, the district court found that Keller had
not established a prima facie case. According to the district
6
court, the age difference between Keller and his replacement was
not sufficient to establish that he was replaced by someone
significantly younger, and because the undisputed evidence
demonstrates that Keller did not reach the financing goal, he was
not qualified for the position. Keller v. Orix, No. 93-3466,
slip op. at 8-9 (D.N.J. April 6, 1995). In the alternative, the
court concluded that even if Keller had established a prima facie
case, he did not establish that the legitimate business reason
proffered by Credit Alliance was a mere pretext for
discrimination. The court stated that:
Keller's failure to make adequate progress towards the
$1.5 billion independent financing goal is a
legitimate business reason for his
termination. * * * Keller's claim that it
was impossible to raise sufficient funds is
not persuasive in his attempt to prove that
Credit Alliance's proffered reason for
termination was merely pretext for
discrimination.
Id. at 10. The district court, therefore, granted Credit
Alliance's motion for summary judgment as to Keller's federal
claims, and dismissed the pendant state law claim. This appeal
followed.
II.
The district court had jurisdiction pursuant to 29
U.S.C. § 626(c) and 28 U.S.C. § 1367. We have jurisdiction over
the appeal pursuant to 28 U.S.C. § 1291. Our review of a
district court's grant of summary judgment is plenary, and we are
required to apply the same test the district court should have
utilized initially. Chipollini v. Spencer Gifts, Inc., 814 F.2d
893, 896 (3d Cir. 1987) (in banc). In a discrimination case, we
7
must determine whether there is sufficient evidence to create a
genuine issue as to whether the employer intentionally
discriminated. Weldon v. Kraft, 896 F.2d 793, 797 (3d Cir.
1990). For a defendant-employer to succeed, it must show that
"the plaintiff will be unable to introduce either direct evidence
of a purpose to discriminate or indirect evidence by showing that
the proffered reason is subject to factual dispute." Id.
(quoting Hankins v. Temple University, 829 F.2d 437, 440 (3d Cir.
1987)). We, of course, must examine the record in the light most
favorable to the party opposing summary judgment, and resolve all
reasonable inferences in his or her favor. Matsushita Electric
Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986);
Celotex Corp. v. Catrett, 477 U.S. 317, 330 n.2 (1986) ("[a]ny
doubt as to the existence of a genuine issue for trial should be
resolved against the moving party."); 10A Wright & Miller,
Federal Practice & Procedure § 2727 at 124-24 ("Because the
burden is on the movant, the evidence presented to the court
always is construed in favor of the party opposing the motion and
he is given the benefit of all favorable inferences that can be
drawn from it."). "This standard is applied with added rigor in
employment discrimination cases, where intent and credibility are
crucial issues." Robinson v. PPG Indus. Inc., 23 F.3d 1159, 1162
(7th Cir. 1994).
III.
The Age Discrimination in Employment Act makes it
unlawful to "discharge any individual or otherwise discriminate
against any individual with respect to his compensation, terms,
8
conditions, or privileges of employment, because of such
individual's age." 29 U.S.C. § 623(a)(1). Like other employment
discrimination claims, claims under the ADEA can be established
either by the presentation of direct evidence of discrimination
under Price Waterhouse v. Hopkins, 490 U.S. 228 (1989), or from
evidence which creates an inference of discrimination under the
framework of McDonnell Douglas-Burdine. Keller argues that there
is sufficient evidence in this case to withstand a motion for
summary judgment under either approach.1
A. Mixed Motive under Price Waterhouse.
When an employee shows "by direct evidence that an
illegitimate criterion was a substantial factor in the
[employment] decision," Price Waterhouse v. Hopkins, 490 U.S.
228, 276 (1989) (O'Connor, J. concurring), the burden of
persuasion shifts to the employer to show that even if
discrimination was a motivating factor in the discharge, it would
have made the same decision absent the discriminatory animus.
Id. at 244-46; Armbruster v. Unisys Corp., 32 F.3d 768, 778 (3d
Cir. 1994). As Justice O'Connor noted in her concurring opinion
in Price Waterhouse:
Stray remarks in the workplace, while perhaps probative
of sexual harassment, cannot justify
requiring the employer to prove that its
hiring or promotional decisions were based on
1. For the purposes of summary judgment, whether Price
Waterhouse or McDonnell Douglas-Burdine governs is not directly
relevant. In evaluating a motion for summary judgment, a court
must simply determine whether there is sufficient evidence to
create a material issue of fact as to whether the employer relied
upon an illegitimate criterion in making its employment decision.
For the sake of clarity, however, we will address the evidence
in this case under both analytical frameworks.
9
legitimate criteria. Nor can statements by
nondecisionmakers, or statements by
decisionmakers unrelated to the decisional
process itself, suffice to satisfy the
plaintiff's burden in this regard . . . .
What is required is . . . direct evidence
that decisionmakers placed substantial
negative reliance on an illegitimate
criterion in reaching their decision.
Id. at 277 (O'Connor, J. concurring) (citation omitted). The
Civil Rights Act of 1992 modified Price Waterhouse, making it
unlawful for an illegitimate criterion to be a motivating factor
for any employment practice, even though other factors may also
have motivated the practice. 42 U.S.C. § 2000e-2(m).
Accordingly, when an employee presents evidence that a
decisionmaker relied upon an illegitimate criterion, summary
judgment for the employer is rarely, if ever, appropriate.
Weldon, 767 F.2d at 797; Hankins, 829 F.2d at 440.
A plaintiff who makes such a case in resisting the
defendant's motion for summary judgment does
not need the help of McDonnell Douglas to
resist the motion. He walks as it were
without crutches. For he has presented
enough evidence to defeat a motion for
summary judgment under the general test for
the grant of such a motion . . .
Shager v. Upjohn Co., 913 F.2d 398, 402 (7th Cir. 1990). As we
have recognized, "[w]hen direct evidence is available, problems
of proof are no different than in other civil cases."
Chipollini, 814 F.2d at 896. The issue becomes whether or not
the employer did in fact rely upon the illegitimate criterion,
which "is precisely the sort of question which must be left to
the jury." Siegel v. Alpha Wire Corp., 894 F.2d 50, 55 (3d Cir.
10
1990). As the Court of Appeals for the Seventh Circuit has
observed,
When confronted with an action where there are two
alleged motives for the dismissal, one
legitimate and the other illegitimate, and
there exists more than a modicum of evidence
in support of the illegitimate motive, we
conclude that the law is generally better
served by having such cases examined in the
crucible of a contested hearing. A trial
becomes appropriate to evaluate whether the
employer is attempting to avoid liability
based on an illegitimate motive by simply
supplying a legitimate one at the summary
judgment phase.
Visser v. Packer Engineering Associates, Inc., 909 F.2d 959, 961
(7th Cir. 1990).
Typically, what is commonly understood as direct
evidence is not available because the decisionmaker "is unlikely
to admit that he fired an employee because of age or sex." Hook
v. Ernst & Young, 28 F.3d 366, 374 (3d Cir. 1994). "Employers
are rarely so cooperative as to include a notation in the
personnel file, ``fired due to age,' or to inform a dismissed
employee candidly that he is too old for the job." Thornbrough
v. Columbus & Greenville R.R., 760 F.2d 633, 638 (5th Cir. 1985).
Consequently, "circumstantial evidence ``tied directly to the
alleged discriminatory animus' is sufficient to constitute direct
evidence justifying a burden-shifting instruction." Id. (quoting
Ostrowski v. Atlantic Mut. Ins. Companies, 968 F.2d 171, 182 (2d
Cir. 1992)).
If, however, the plaintiff's nonstatistical evidence is
directly tied to the forbidden animus, for
example policy documents or statements of
persons involved in the decisionmaking
process that reflect a discriminatory or
retaliatory animus of the type complained of
11
in the suit, that plaintiff is entitled to a
burden shifting instruction.
Id. (quoting Ostrowski, 968 F.2d at 182) (emphasis added). The
term "direct evidence," therefore, is an unfortunate misnomer.
Id. In other words, to come within the Price Waterhouse
framework, the evidence presented by the plaintiff need only
reflect a discriminatory animus on the part of a person involved
in the decisionmaking process. Id.; Armbruster, 32 F.3d at 778.
Keller provided evidence that reflects a discriminatory
animus on the part of a person involved in the decisionmaking
process. Keller testified that during the first meeting in which
he was ever criticized about his job performance, Ryan
specifically stated that "[i]f you are getting to old for the
job, maybe you should hire one or two young bankers."2
Ryan's statement that Keller may be getting too old to
do his job is sufficient evidence of discriminatory animus under
Price Waterhouse.3 First, as CEO of the company, Ryan is clearly
2. Credit Alliance argues that because the "too old" comment
does not appear in Keller's contemporaneous notes, it should be
disregarded. While this is certainly a powerful argument for a
jury, Credit Alliance's argument goes to the weight of the
evidence, and is a question for the finder of fact. Shager, 913
F.2d at 402 ("[T]he task of disambiguating ambiguous utterances
is for trial, not for summary judgment. On a motion for summary
judgment the ambiguities in a witness's testimony must be
resolved against the moving party.").
3. The district court did not address Keller's claim that this
comment is sufficient as direct evidence of discrimination or
that it supports an inference of discrimination. Instead, the
court does not appear to have focused upon the inferences and
presumption that the nonmoving party is entitled to, and simply
accepted Credit Alliance's interpretation of the statement as
authorizing Keller to hire additional staff. See Keller, slip
op. at 4.
12
a decisionmaker, and in this case has admitted that he was the
principal decisionmaker in firing Keller. Second, it seems
rather obvious that Ryan's suggestion that Keller may be getting
too old to properly perform his job and that he hire younger
bankers could reflect discriminatory animus toward Keller's age.
Such a comment, if true, is by no means shrouded in ambiguity,
and there is no evidence to suggest that it was stated
facetiously. In addition, the comment was made during a
conversation about Keller's performance. According to Keller,
the comment was made at the meeting in which he was first
informed that his performance was considered unsatisfactory. We
can only conclude, therefore, that it was related to the
decisionmaking process itself. Ryan himself admits (in fact
argues) that he was critical of Keller's performance at the time
this alleged comment was made. Finally, Ryan decided to fire
Keller only a few months later. The age related comment,
therefore, is probative of the factors considered in Ryan's
decision to terminate Keller. See Robinson, 23 F.3d at 1165
(holding that comments about the company not keeping employees on
until they reached sixty-five could not be considered stray
remarks for the purposes of summary judgment); Shager, 913 F.2d
at 402 (holding that comments including "These older people don't
much like or much care for us baby boomers, but there isn't much
they can do about it," constituted direct evidence at the summary
judgment phase).
Credit Alliance argues that this statement is simply a
stray remark, and is therefore not direct evidence of
13
discrimination. The thrust of its argument is that this was the
only age related remark Keller could recall. A single comment,
however, is not necessarily a stray remark merely because it was
only uttered on one occasion. If the single comment is made by a
decisionmaker and reflects a discriminatory animus toward the
plaintiff in the decisionmaking process, it might well constitute
direct evidence of discrimination. Price Waterhouse, 490 U.S. at
241 ("The critical inquiry . . . is whether [the illegitimate
criterion] was a factor in the employment decision . . .").
Unlike hostile environment claims, Price Waterhouse considers
only the nature and probative value of the alleged discriminatory
comment, and not the frequency with which it was stated, because
an employer's "[r]eliance on [illegal] factors is exactly what
the threat of Title VII liability was meant to deter." Id. at
265 (O'Connor, J., concurring). As discussed above, the alleged
age-related remark in this case was made by the principal
decisionmaker during his critique of Keller's work performance,
and could be interpreted as reflecting a negative attitude toward
his age. Robinson, 23 F.3d at 1165 (holding that potentially age
related comments made by the supervisor who decided to terminate
the plaintiff were sufficient direct evidence of discrimination
to survive summary judgment).
As we have stated, since "discriminatory comments by an
executive connected with the decisionmaking process will often be
the plaintiff's strongest circumstantial evidence of
discrimination, they are highly relevant . . ." Abrams v.
Lightolier Inc., 50 F.3d 1204, 1215 (3d Cir. 1995). Because
14
Keller presented circumstantial evidence which could allow a jury
to conclude that Ryan relied on an illegitimate criterion in
making his employment decision, summary judgment was
inappropriate. Given this evidence, Credit Alliance's proffered
legitimate reason for discharging Keller simply creates a
material issue of fact, rather than demonstrating the absence of
one.
B. Pretext under McDonnell Douglas-Burdine.
While Price Waterhouse involves evidence which directly
reflects discriminatory animus, cases under McDonnell Douglas-
Burdine involve circumstances which, if left unexplained or
without a credible explanation, allow a jury to infer
discriminatory animus. As the Supreme Court has noted,
we are willing to presume this largely because we know
from our experience that more often than not
people do not act in a totally arbitrary
manner, without any underlying reasons,
especially in a business setting. Thus, when
all legitimate reasons for rejecting an
applicant have been eliminated as possible
reasons for the employer's actions, it is
more likely than not the employer, who we
generally assume acts only with some reason,
based his decision on an impermissible
consideration such as race.
Furnco Construction Corp. v. Waters, 438 U.S. 567, 577 (1978)
(emphasis in original); Chipollini, 814 F.2d at 897. The Supreme
Court, therefore, established the now familiar shifting burdens
of production.
First, the plaintiff has the burden of proving by the
preponderance of the evidence a prima facie
case of discrimination. Second, if the
plaintiff succeeds in proving the prima facie
case, the burden shifts to the defendant to
articulate some legitimate, nondiscriminatory
reason for the employee's rejection. Third,
15
should the defendant carry this burden, the
plaintiff must then have an opportunity to
prove by a preponderance of the evidence that
the legitimate reasons offered by the
defendant were not its true reasons, but were
a pretext for discrimination.
Texas Dept. of Comm. Affairs v. Burdine, 450 U.S. 248, 253-53
(1981) (citations omitted). These shifting burdens "are designed
to assure that the ``plaintiff [has] his day in court despite the
unavailability of direct evidence.'" Trans World Airlines, Inc.
v. Thurston, 469 U.S. 111, 121 (1985) (quoting Loeb v. Textron,
Inc., 600 F.2d 1003, 1014 (1st Cir. 1979)). In this case, the
district court concluded that Keller failed to establish a prima
facie case, and in the alternative that he failed to present any
evidence that Credit Alliance's proffered reason was pretextual.
We disagree.
1. The Prima Facie Case under the ADEA.
To establish a prima facie case of age discrimination
under the ADEA, Keller must show: (1) that he belongs to the
protected class; (2) that he was qualified for the position;
(3) that he suffered an adverse employment decision; and (4) that
he was replaced by someone sufficiently younger to permit an
inference of age discrimination or his employer continued to seek
applicants from among those having his qualifications. Sempier
v. Johnson & Higgins, 45 F.3d 724, 728 (3d Cir. 1995);
Chipollini, 814 F.2d at 897. See O'Connor v. Consolidated Coin
Caterers Corp., 116 S. Ct. 1307 (1996). According to the
district court, Keller failed to demonstrate that he had been
replaced by someone sufficiently younger or that he was qualified
16
for the position. But as we have noted, "the prima facie case
under the McDonnell Douglas-Burdine pretext framework is not
intended to be onerous." Id. at 728. And as the Supreme Court
has noted, all that is required is "evidence adequate to create
an inference that an employment decision was based on a[n]
[illegal] discriminatory criterion . . . ." Teamsters v. United
States, 431 U.S. 324, 358 (1977). For the following reasons, we
conclude that the district court required Keller to establish an
impermissibly demanding prima facie case.
A)Keller's Qualifications.
At the prima facie stage of the litigation, a plaintiff
"only needs to demonstrate that [he] ``possesses the basic skills
necessary for the performance of [the] job.'" Owens v. New York
City Housing Auth., 934 F.2d 405, 409 (2d Cir. 1991) (citations
omitted). As we have stated, a plaintiff's qualifications for
purposes of proving a prima facie case is determined by an
objective standard. Sempier, 45 F.3d at 729; Weldon v. Kraft,
Inc., 896 F.2d 793, 798 (3d Cir. 1990); Jalil v. Avdel Corp., 873
F.2d 701, 707 (3d Cir. 1989). Accordingly, the proper inquiry is
whether Keller had the "objective experience and educational
background necessary to qualify as a viable candidate for the
position[] he held." Sempier, 45 F.3d at 729. Any subjective
analysis of the employee's job performance is properly examined
at the pretext stage of the litigation. Id.; Weldon, 896 F.2d at
798. Even arguably quantifiable measures such as "productivity"
and "output" can constitute a "subjective determination by [the
defendant] of the performance level [plaintiff] had to achieve."
17
Weldon, 896 F.2d at 799. We rely upon objective factors alone
because subjective evaluations "are more susceptible of abuse and
more likely to mask pretext." Id. at 798 (citing Fowle v. C & C
Cola, 868 F.2d 59, 64-65 (3d Cir. 1989)). Denying a plaintiff
"the opportunity to move beyond the initial stage of establishing
a prima facie case because he has failed to introduce evidence
showing he possesses certain subjective qualities would
improperly prevent the court from examining the criteria to
determine whether their use was mere pretext." Id.
When viewed in the light most favorable to the
nonmoving party, Keller clearly established that he was
objectively qualified for his position. First, Keller's
qualifications were easily established by the mere fact that he
had held an executive position with Credit Alliance for over
sixteen years. Sempier, 45 F.3d at 729 ("Sempier had the
objective experience and education necessary to qualify as a
viable candidate for the positions he held. He had held
executive positions at J & H for over twenty years."). In
addition, Keller had served on the board of directors for over
six years, and had been considered for the position of President
of the company. While it is, of course, possible for a company
to employ an unqualified individual and promote him or her to the
highest levels of management, it would be imprudent for us to
presume such an unlikely scenario at the summary judgment phase.
We reached the same conclusion with similar facts in Sempier.
In that case, we noted that:
the record of [the plaintiff's] twenty years employment
as an executive, his record as Comptroller
18
and then Treasurer of J & H, his election to
the Board on two occasions, and his
appointment as Chief Financial Officer and
then as Chief Administrative Officer leads to
the almost inevitable inference that he was
qualified for the position from which he was
discharged.
Id. at 729. In this case, Keller's objective qualifications lead
inevitably to the conclusion that he was qualified for the
position from which he was discharged.
The district court found that Keller was not qualified
for his job because he had failed to make adequate progress
toward his stated goal of raising $1.5 billion. But while the
amount of funds Keller actually raised is obviously measured by
an objective standard, the question whether Keller made adequate
progress toward his goal is an inherently subjective
determination. In other words, whether Keller's progress can be
considered adequate depends not only upon his results and the
context in which those results were achieved, but whether Credit
Alliance was satisfied with those results. A subjective analysis
of Keller's performance and the reasons for his failure is
misplaced at the prima facie stage. Weldon, 896 F.2d at 798-99
("[W]hile objective qualifications should be considered in
evaluating the plaintiff's prima facie case, the question of
whether an employee possesses a subjective quality . . . is
better left to the later stage of the McDonnell Douglas
analysis."); Fowler, 868 F.2d at 64-65.
A plaintiff need only demonstrate that he or she
possessed the objective experience and education necessary to
perform the job in question. Keller's education, promotions, and
19
more than sixteen years of service as an executive for Credit
Alliance are sufficient to demonstrate that he was qualified for
his position for purposes of establishing a prima facie case
under the ADEA. The question whether Keller's performance in
reaching Credit Alliance's funding goal was adequate is a
subjective determination best left to the pretext stage under
McDonnell Douglas-Burdine.4
B)Replaced by Someone Sufficiently Younger.
In order to establish a prima facie case, the plaintiff
must also demonstrate that he or she was replaced by someone
sufficiently younger to permit an inference of age
discrimination. Sempier, 45 F.3d at 728. The district court
found that Keller did not meet this requirement because he was
replaced by someone only five years younger. Keller, slip op. at
8.5 We disagree.
4. The cases relied upon by Credit Alliance for the
proposition that employees must demonstrate that they were
performing their jobs adequately as an element of the prima facie
case are readily distinguishable. In every case, the plaintiff
conceded that his or her performance was deficient and offered no
explanation for the poor performance. See Perry v. Prudential
Bache Securities, Inc., 738 F. Supp. 843, 848 n.1 (D.N.J. 1989),
aff'd without opinion, 904 F.2d 696 (3d Cir. 1990); Spangle v.
Valley Forge Sewer Auth., 839 F.2d 171, 173-74 (3d Cir. 1988);
Dale v. Chicago Tribune Co., 797 F.2d 458 (7th Cir. 1986).
Credit Alliance's argument that Keller admitted that he was not
qualified for the job is similarly misplaced. Although Keller
admits that he did not reach the financing goal, he never
admitted that he was unqualified, or that he was responsible for
the failure to reach the target. Appellee's Br. at 26.
5. Both the district court and Credit Alliance state the age
difference between Keller and his replacement as four years. The
evidence, however, clearly demonstrates that at the time Keller
was fired, he was 51 and his replacement, Joseph McDevitt was 46.
20
Although the district court did not have the benefit of
guidance from the Supreme Court on this particular issue at the
time it rendered its decision, the Court has since held that
there is no particular age difference which must be shown to make
out a prima facie case. O'Connor, 116 S. Ct. at 1310 (holding
that a plaintiff need not be replaced by someone outside the
protected class to establish a prima facie case); Sempier, 45
F.3d at 729. In other words, "[t]here is no magical formula to
measure a particular age gap and determine if it is sufficiently
wide to give rise to an inference of discrimination." Barber v.
CSX Distribution Servs., 68 F.3d 694, 699 (3d Cir. 1995). As we
have noted:
[d]ifferent courts have held, for instance, that a five
year difference can be sufficient, Douglas v.
Anderson, 656 F.2d 528, 533 (9th Cir. 1981),
but that a one year difference cannot. [Gray
v. York Newspapers, Inc., 957 F.2d 1070, 1087
(3d Cir. 1992)].
Sempier, 45 F.3d at 729. See also Corbin v. Southland Int'l
Trucks, 25 F.3d 1545, 1550 (11th Cir. 1994) (finding evidence of
pretext when a 53 year-old was treated more favorably than a
58 year-old employee). In order to establish a prima facie case,
the evidence need only create an inference of discrimination if
the employer's actions are left unexplained. O'Connor, 116 S.
Ct. at 1310. Accordingly, the "replacement by even an older
employee will not necessarily foreclose prima facie proof if
other direct or circumstantial evidence supports an inference of
discrimination." Douglas v. Anderson, 656 F.2d at 533. As the
Supreme Court has emphasized, "[t]he fact that one person in the
21
protected class has lost out to another person in the protected
class is thus irrelevant, so long as he has lost out because of
his age." O'Connor, 116 S. Ct. at 1310.
In Sempier, for example, we found that the plaintiff
had established a prima facie case despite being replaced by
someone only four years younger. 45 F.3d at 729-730. Without
deciding whether four years alone was enough, we concluded that
the four year difference, combined with the fact that the
plaintiff's functions were also temporarily transferred to
someone well over ten years younger, were sufficient to establish
a prima facie case. Id.
We conclude that if left unexplained, the five year age
difference between Keller and his replacement, when combined with
the other elements of the McDonnell Douglas prima facie case
standard, is sufficient to establish an inference that Keller's
age was a motivating factor in Credit Alliance's decisions.
Accord Douglas v. Anderson, 656 F.2d 528, 533 (9th Cir. 1981).
Given Keller's experience, and the fact that the age difference
spans a difference in chronological decades, so to speak (Keller
was in his "fifties" while his replacement was in his "forties"),
this age difference is sufficient to support such an inference.
See also Pace v. Southern Ry. System, 701 F.2d 1383, 1387 (11th
Cir. 1983) ("Seldom will a sixty year-old be replaced by a person
in the twenties. Rather the sixty-year-old will be replaced by a
fifty-five year-old, who, in turn, is succeeded by someone in the
forties, who also will be replaced by a younger person.").
22
Finally, as we discussed above in the context of Price
Waterhouse and will address below in the context of McDonnell
Douglas-Burdine, the record contains evidence beyond the prima
facie case that creates an inference of discrimination. Ryan's
alleged age-related comments support an inference that Credit
Alliance's employment decisions with respect to Keller were based
upon his age. This renders the age of Keller's replacement less
relevant for purposes of establishing a prima facie case.
O'Connor, 116 S. Ct. at 1310 ("[T]he proper solution to the
problem lies not in making an utterly irrelevant factor an
element of the prima facie case, but rather in recognizing that
the prima facie case requires ``evidence adequate to create an
inference that an employment decision was based on a[n] [illegal]
discriminatory criterion . . . .'") (citation omitted).
In sum, because Keller has sufficiently demonstrated
that he was qualified for the position from which he was
discharged, that he was replaced by someone sufficiently younger,
and there is additional evidence beyond the McDonnell Douglas-
Burdine prima facie case standard from which a jury could
conclude that Credit Alliance's employment decisions were
motivated by Keller's age, the district court erred when it
concluded that Keller failed to establish a prima facie case.
2.Evidence Supporting An Inference of Discrimination.
The district court did not address Keller's claim that
Ryan's comment was direct evidence of discrimination, apparently
because it concluded that Keller had failed to provide sufficient
evidence to demonstrate pretext under McDonnell Douglas-Burdine.
23
But even if we were to assume that Keller's evidence is
insufficient under the Price Waterhouse standard, it is more than
sufficient to withstand summary judgment under McDonnell Douglas-
Burdine standard. First, because Keller offered evidence beyond
the prima facie case from which an inference of discrimination
could be drawn, Credit Alliance's proffered legitimate reason
merely creates a material issue of fact as to whether the
decision to terminate Keller was motivated by discriminatory
animus. Waldron v. SL Indus., Inc., 56 F.3d 491, 495, 502-03 (3d
Cir. 1995); Fuentes v. Perskie, 32 F.3d 759, 764 (3d Cir. 1994).
Second, Keller has offered sufficient evidence that could
support a finding that the proffered reason is pretext, which
creates a material issue of fact as to the credibility of Credit
Alliance's proffered reason.
A)Evidence of Discrimination.
We have consistently held that a plaintiff who has made
out a prima facie case can defeat a motion for summary judgment
by "adducing evidence, whether circumstantial or direct, that
discrimination was more likely than not a motivating or
determinative cause of the adverse employment action." Fuentes,
32 F.3d at 764. We have also consistently held that since
"discriminatory comments by an executive connected with the
decisionmaking process will often be the plaintiff's strongest
circumstantial evidence of discrimination, they are highly
relevant. . . ." Abrams, 50 F.3d at 1215. Evidence of age-
biased comments made by a supervisor, therefore, could support an
inference that the termination decision was made because of the
24
plaintiff's age. Id. at 1214; Torre v. Casio, Inc., 42 F.3d 825,
834 (3d Cir. 1994); Armbruster, 32 F.3d at 783.
Indeed, we have held that discriminatory comments by
nondecisionmakers, or statements temporally
remote from the decision at issue, may
properly be used to build a circumstantial
case of discrimination. See Lockhart v.
Westinghouse Credit Corp., 879 F.2d 43, 54
(3d Cir. 1989) (finding age-biased comment
relevant even when made subsequent to
plaintiff's termination); Roebuck v, Drexel
University, 852 F.2d 715, 733 (3d Cir. 1988)
(upholding admissibility of discriminatory
comment by decisionmaker made five years
before denial of tenure).
Abrams, 50 F.3d at 1214. When combined with Keller's prima facie
case, Ryan's suggestion that perhaps Keller was getting "too old"
for the job, and that maybe he should hire some "young bankers"
could clearly support an inference of discrimination.
This conclusion is supported by our prior decisions.
In Roebuck, we concluded that the comment that "in terms of
comparable white faculty members . . . blacks would cost Drexel
more money to hire those black faculty members," could give rise
to an inference of discrimination even when made five years
before the decision in question. 852 F.3d at 733. In Lockhart,
we found that a reasonable jury could also consider the statement
"Westinghouse Credit was a seniority driven company with old
management and that's going to change, ``I'm going to change
that,'" as evidence of age-bias. 879 F.2d at 54. Similarly, in
Waldron we found that when combined with the plaintiff's prima
facie case, a comment that he should lose some weight because it
would make him healthier and look younger, made five months
before the termination, could support the conclusion that age was
25
more likely than not a determinative factor. 56 F.3d at 502.
Likewise, an inference of discrimination was evident in Abrams,
given comments like "things would hum around here when we got rid
of the old fogies," and that two older employees were referred to
as "a dinosaur" and "the old men." 50 F.3d at 1214. Finally, in
Torre, we found that the statement "did you forget or are you
getting too old, you senile bastard?" could reasonably lead to an
inference of age based discrimination. 42 F.3d at 834. See also
Robinson, 23 F.3d at 1165; Shager, 913 F.2d at 402-03.
Because Keller produced evidence that could support the
conclusion that age was more likely than not a motivating factor
in Ryan's decision to terminate him, Credit Alliance's proffered
reason merely creates a material issue of fact for a jury to
resolve. The district court's grant of summary judgment to
Credit Alliance, therefore, was inappropriate. Credit Alliance
failed to satisfy its burden of proving the absence of genuine
issues of material fact.
B)Evidence That the Employer's Proffered Reason Is Not
Worthy Of Credence.
A plaintiff in an employment discrimination case may
also defeat a motion for summary judgment by presenting evidence
from which a reasonable factfinder could conclude that the
defendant's proffered justifications are not worthy of credence.
Torre, 42 F.3d at 832; Fuentes, 32 F.3d at 764 (legal principle
reaffirmed in Sheridan v. E.I. DuPont de Nemours & Co., slip. op.
at 12-13 (3d Cir. 1996) (en banc)). Credit Alliance's proffered
reason for terminating Keller was his failure to make adequate
26
progress toward achieving their financing goal. Credit Alliance
argues, and the district court concluded, that Keller's evidence
is aimed at simply demonstrating that this decision was wrong
because, according to Keller, it was impossible to reach the
goal. Keller, slip op. at 10. This misinterprets both Keller's
evidence and argument.
Keller is not arguing that the proffered reason is
pretextual because it is wrong. He is arguing that Credit
Alliance was aware of the outside factors which hindered his
ability to obtain funding, and that they did not fault him for
the results of his efforts.
While pretext is not demonstrated by showing that the
employer was mistaken, Ezold v. Wolf, Block, Schorr and Solis-
Cohen, 983 F.2d 509, 531 (3d Cir. 1992), it can be established by
"evidence of inconsistencies or anomalies that could support an
inference that the employer did not act for its stated reason."
Sempier, 45 F.3d at 731 (citing Josey v. John R. Hollingsworth
Corp., 996 F.2d 632, 638 (3d Cir. 1993)) (emphasis added). The
thrust of Keller's argument and evidence is that Credit Alliance
was not dissatisfied with his performance, because it knew that
efforts to obtain outside fundraising were impeded by various
market forces.
To support his claim that his performance did not play
a role in Ryan's decision to fire him, Keller presented evidence
that Credit Alliance's difficulty in obtaining greater financing
was due to factors substantially beyond his control, and more
importantly, that Credit Alliance recognized this fact. Keller
27
argues that one of the reasons that Credit Alliance had
difficulty obtaining new funding was that it had a poor credit
rating which was influenced by its performance and the downturn
of the Japanese economy. (Credit Alliance's parent company,
ORIX, is a Japanese owned company.) To support his argument
Keller submitted documents from several ratings agencies. Keller
also submitted evidence which focused upon the banks' reluctance
to do business with Credit Alliance because of its poor credit
rating, the trouble with the Japanese economy, and Credit
Alliance's level of delinquent accounts. In fact, several
sources which decided to discontinue funding Credit Alliance
justified their decision with these various reasons.
Keller also submitted affidavits and depositions to
support his claim that he had informed the board of these
difficulties and that the board accepted his explanation. In
particular, one member of the board of directors specifically
corroborates Keller's claim through December of 1991. According
to the former director:
At the board of directors meetings, Keller described
the obstacles in securing credit facilities
including Credit Alliance's past due accounts
and the company's status as a subsidiary of a
Japanese corporation. No one challenged or
disagreed with Keller's presentations at
those meetings or suggested in any way that
the difficulties he was encountering were in
any way due to his performance rather than
factors beyond his control.
A1126 (Affidavit of Neil Umhafer). In addition, Keller points to
file memos that he sent to Ryan which detailed the bankers'
statements that they would not lend to Credit Alliance because of
28
its Japanese parent company, the nature of Credit Alliance's
business, or because of the conservative approach toward lending
adopted by many in the credit market at the time.
Keller, therefore, relied upon evidence that could
establish: (1) that Credit Alliance's disappointing progress was
due to forces beyond his control; (2) that Credit Alliance
recognized that fact; and (3) that it knew that its poor showing
was not attributable to him. Seen in the light most favorable to
Keller, a reasonable jury could consider Credit Alliance's
explanation that Keller was fired for "poor performance"
pretextual. Sorba v. Pennsylvania Drilling Co., 821 F.2d 200,
205 (3d Cir. 1987) (reversing summary judgment when the plaintiff
proffered evidence "that his supervisors realized that the poor
results were not his fault. . . . [T]he testimony of the
movant's witnesses was inconsistent regarding whether they
believed [plaintiff]'s performance caused the unsatisfactory job
results."). See also Rhodes v. Guiberson Oil Tools, 75 F.3d 989
(5th Cir. 1996) (en banc) (holding that there was sufficient
evidence to support a finding of discrimination when the
plaintiff demonstrated that the employer's proffered explanation,
poor performance, was pretextual because his poor results were
due to the company's prices and a poor customer base); Johnson v.
Group Health Plan, 994 F.2d 543, 546 (8th Cir. 1993) (report
stating that morale problems caused by other factors created
factual issue regarding plaintiff's performance); Mastrangelo v.
Kidder, Peabody & Co., 722 F. Supp. 1126, 1133 (S.D.N.Y. 1989)
(sufficient evidence that defendant's criticism of plaintiff's
29
performance was pretextual where problems of his department were
attributable, at least in part, to matters beyond his control).
In further support of his claim, Keller points to the
absence of any official criticism of his performance. In
Sempier, we concluded that a genuine issue existed as to pretext
because of the plaintiff's own testimony of satisfactory
performance combined with evidence that he was not criticized
while still employed. 45 F.3d at 721-32. The only evidence
offered by Credit Alliance is the post-hoc deposition testimony
of some of the members of the board of directors who ratified the
decision to fire Keller. With the exception of Ryan's testimony
and a purported comment made after Ryan decided to fire Keller,
much of the evidence is ambiguous as to whether the statement
represented criticism. For the most part, Credit Alliance asks
us to infer that questions about the progress of the fundraising
were criticisms of Keller's performance. For example, Credit
Alliance points to the fact that one of its outside directors
suggested that Keller be relieved of his duties as Chief Credit
Officer so he could concentrate on raising funds, and asks that
we consider this as "criticism" of Keller's performance. But
that would require us to draw an unwarranted inference at the
summary judgment phase, particularly in view of the fact that
Keller offered evidence that when questioned about the progress,
the board accepted his explanation that difficulties in the U.S.
and Japanese economies made it difficult to secure funding on
terms more favorable than the terms provided by their current
source.
30
Finally, Keller argues that the district court
improperly relied upon events that occurred after he was
terminated (i.e., the success of his younger replacement), and
also failed to acknowledge the role he played in those subsequent
events. As an initial matter, we agree with Keller that the
district court improperly relied upon his successor's
performance. The fact that his successor reached Credit
Alliance's goal has no bearing on whether the decision to fire
Keller was motivated by discriminatory animus. "The employer
could not have been motivated by knowledge it did not have, and
it cannot claim that the employee was fired for the
nondiscriminatory reason." McKennon v. Nashville Banner
Publishing Co., 115 S. Ct. 879, 885 (1995).
We also agree that Keller's performance subsequent to
Ryan's decision to terminate him is relevant for establishing
pretext. Ryan testified that if Keller had come up with a plan
and demonstrated some success in achieving it, he (Ryan) might
have changed his mind. Keller provided evidence to demonstrate
that he had done the preliminary work on some, if not all, of the
means of financing that later proved to be successful. In
particular, Keller points to evidence that he formulated a plan
to achieve Credit Alliance's financing goal. In deposition
testimony, Ryan admitted that the steps outlined in the plan
provided by Keller were the ones followed by Credit Alliance in
successfully raising funds in 1993 and 1994. For example, Keller
briefed Ryan about the possibility of asset-backed securitization
as a method of raising funds, and it was only months after Ryan
31
decided to fire Keller that Ryan decided to pursue this method.
Keller also successfully secured a $100 million private placement
which was the first step in improving Credit Alliance's credit
rating. Despite Keller's plan and demonstration of success,
however, Ryan terminated him. A jury could conclude that Keller
played a significant role in Credit Alliance's subsequent ability
to reach its funding goal, and that Credit Alliance's claim of
poor performance, therefore, was pretextual.
Given this evidence, there is a material issue of fact
as to whether or not Credit Alliance recognized the economic
problems associated with the fundraising and whether or not
Keller's performance, therefore, was the reason for his
discharge. If a jury were to accept Keller's evidence and
interpretation of that evidence, it could reasonably conclude
that Credit Alliance did not in fact fire him based upon any
dissatisfaction with his ability to raise financing. If a jury
were to reject Credit Alliance's proffered reason, it could then
reasonably conclude that Keller was terminated based upon his
age. Fuentes v. Perskie, 32 F.3d 759, 764 (3d Cir. 1994); see
also St. Mary's Honor Center v. Hicks, 509 U.S. 502, (1993). As
material issues of fact remain in dispute, summary judgment in
favor of Credit Alliance was inappropriate.
C. Failure to Promote.
The foregoing analysis of the evidence is applicable to
both the wrongful discharge and the failure to promote claims,
and will not be repeated here. We will, however, clarify several
32
additional points raised by Credit Alliance that relate
specifically to the failure to promote.
Credit Alliance argues that Keller has not demonstrated
that he was qualified for the position of Chief Operating
Officer, did not apply for the position, and that he is estopped
from asserting a discrimination claim because as a member of the
board of directors he voted for Copper's appointment. We believe
that there is sufficient evidence in the record for Keller's
failure to promote claim to survive summary judgment. First,
Keller clearly established a prima facie case that he was
qualified for the position of Chief Operating Officer. Once
again, the question is only whether he had the objective
education and experience necessary. See supra section III.B.1.A.
Second, Keller correctly argues that he was not required to
apply for the position. "[I]t is sufficient to make out a prima
facie case for a plaintiff to ``establish[] that the company had
some reason or duty to consider him for the post.'" Fowle v. C &
C Cola, 868 F.2d at 68. Keller's senior management position, his
prior consideration for the position of President of Credit
Alliance, and Ryan's knowledge that Keller was interested in the
Chief Operating Officer position are sufficient to establish a
prima facie case as to this claim. Finally, there is no support
for the argument that Keller is estopped from challenging his
failure to be promoted because he voted with the other board
members in ratifying Ryan's appointment. As Keller correctly
notes, the equal employment laws do not impose a requirement of
33
contemporaneous complaint or repeated protests. See Townsend v.
Indiana Univ., 995 F.2d 691, 693 (7th Cir. 1993).
Nor do we agree with Credit Alliance that its proffered
justification for not considering or promoting Keller entitles it
to summary judgment. According to Ryan, the position of Chief
Operating Officer required line experience and a thorough
understanding of the company's business, which he claims Keller
lacked. As discussed above, Ryan's alleged statement that Keller
may be too old to do his job, made only weeks before the
promotion decision, is evidence from which a jury could infer
discrimination. Similarly, Keller points to evidence from the
Chair of Credit Alliance's predecessor company that he did, in
fact, have a thorough understanding of the business and was
considered a candidate for president of the company at the time
Ryan was ultimately selected. In light of this evidence, a jury
could conclude that Credit Alliance's claim that Keller was not
qualified is pretextual. Consequently, there is sufficient
direct, as well as indirect, evidence from which a jury could
conclude that Keller was not promoted because of his age.
IV.
Because the district court also dismissed Keller's
claims under the New Jersey Law Against Discrimination, we must
briefly address the NJLAD claims. As the NJLAD and the ADEA "are
governed by the same standards and burden of proof structures
applicable under Title VII of the Civil Rights Act of 1964, 42
U.S.C. § 2000e et seq.", Waldron, 56 F.3d at 503; Erickson v.
Marsh & McLennan Co., 117 N.J. 539, 569 (1990); Clowes v.
34
Terminix Int'l, Inc., 109 N.J. 575 (1988), our discussion of
Keller's claims under the ADEA applies here as well, and the
district court's grant of summary judgment as to the NJLAD claim
will be reversed.
V.
To summarize, we find that there was sufficient direct
and indirect evidence of discrimination for Keller's ADEA and
NJLAD claims to survive summary judgment. We will, therefore,
reverse the district court's judgment in its entirety and remand
for further proceedings consistent with this opinion.
ALITO, Circuit Judge, dissenting.
I respectfully dissent for three reasons.
First, I disagree with the majority's holding that
there is enough "direct" evidence of age discrimination to cause
the burden of persuasion to shift to the company. Justice
O'Connor's controlling opinion in Price Waterhouse v. Hopkins,
490 U.S. 228, 276 (1989) (O'Connor, J., concurring in the
judgment), concluded that, in order for the burden of persuasion
to shift, "a disparate treatment plaintiff must show by direct
evidence that an illegitimate criterion was a substantial factor
in the decision." She explained that "[a]s an evidentiary
matter, where a plaintiff has made this type of strong showing of
illicit motivation, the factfinder is entitled to presume that
the employer's discriminatory animus made a difference to the
outcome, absent proof to the contrary from the employer." Id.
She continued:
35
Thus, stray remarks in the workplace, while perhaps probative of
[discrimination], cannot justify requiring the employer
to prove that its hiring or promotion decisions were
based on legitimate criteria. Nor can statements by
nondecisionmakers, or statements by decisionmakers
unrelated to the decisional process itself, suffice to
satisfy the plaintiff's burden in this regard. . . .
What is required is what Ann Hopkins showed here:
direct evidence that decisionmakers placed substantial
negative reliance on an illegitimate criterion in
reaching their decision.
Id. at 277 (emphasis added; internal citation omitted); see also,
Armbruster v. Unisys Corp., 32 F.3d 768, 778 (3d Cir. 1994); Hook
v. Ernst & Young, 28 F.3d 366, 373-76 (3d Cir. 1994);6 Griffiths
6. The majority states: "``circumstantial evidence "tied
directly to the alleged discriminatory animus" is sufficient to
constitute direct evidence justifying a burden-shifting
instruction.'" Maj. Op. at 12 (quoting Hook, 28 F.3d at 374
(quoting Ostrowski v. Atlantic Mut. Ins. Cos., 968 F.2d 171, 182
(2d Cir. 1992)). This statement is inconsistent with Justice
O'Connor's opinion in Price Waterhouse, with Hook, and with
Ostrowski. In order for the burden to shift, the plaintiff must
not only show discriminatory animus on the part of a
decisionmaker but must connect that animus to the challenged
employment decision. In Ostrowski, the court stated:
[I]f the plaintiff presents evidence of conduct or statements by
persons involved in the decisionmaking process that may
be viewed as directly reflecting the alleged
discriminatory attitude, and that evidence is
sufficient to permit the factfinder to infer that that
attitude was more likely than not a motivating factor
in the employer's decision, the jury should be
instructed that if it does draw that inference the
plaintiff is entitled to recover unless the employer
has established by a preponderance of the evidence that
the employer would have taken the same action without
consideration of the impermissible factor.
968 F.2d at 182 (emphasis added); see also Griffiths, 988 F.2d
at 470. The statement in Hook that the majority partially quotes
was as follows:
36
v. CIGNA Corp., 988 F.2d 457, 469-70 (3d Cir.), cert. denied, 510
U.S. 865 (1993).7
In holding that the burden of persuasion should shift
in this case, the majority relies solely on a remark allegedly
made by Orix's chief executive officer, Daniel Ryan, about four
or five months before Ryan decided that Keller should be
terminated. In 1989, Keller was given and accepted the task of
arranging for $1.5 billion in financing, but he never came close
to that target. In April 1992, according to Keller's deposition,
Ryan, who himself was more than 60 years of age, allegedly said
to him: "If you are getting too old for the job, maybe you should
hire one or two young bankers."8 If Keller's account is
believed, Ryan's remark is relevant to show age bias.
But "[n]ot all evidence that is probative of
discrimination will entitle the plaintiff to [shift the burden of
persuasion] to the defendant under Price Waterhouse." Griffiths,
(..continued)
Ostrowski . . . recognizes that circumstantial evidence "tied
directly to the alleged discriminatory animus" must be
produced to justify a burden-shifting instruction.
28 F.3d at 374 (quoting Ostrowski, 968 F.2d at 182). This
sentence stated that proof of discriminatory animus is necessary,
and later Hook made clear that such proof is not sufficient. See
28 F.3d at 375 (statements by decisionmaker that were not
"related to the decision process" not enough). But the majority
confuses what is necessary with what is sufficient.
7. This portion of Griffiths was unaffected by Miller v. CIGNA,
47 F.3d 586 (3d Cir. 1995) (in banc).
8. Ryan denied saying anything about Keller's being too old, and
Keller's contemporaneous notes of this conversation also omit
this portion of Ryan's alleged remark. Keller's notes say
simply: "He [Ryan] suggested I hire one or two young bankers."
At the summary judgment stage, however, we must accept the
version of the conversation set out in Keller's deposition.
37
988 F.2d at 470 (citation and internal quotation omitted); see
also Hook, 28 F.3d at 374. Ryan's alleged remark does not
constitute the type of "strong showing" that is needed to shift
the burden of persuasion. The remark does not refer to the
decision to fire Keller but rather to the hiring of "young
bankers" to help him. See Hook, 28 F.3d at 375 (remarks did not
shift the burden of persuasion because, "[a]lthough they were
made by a decisionmaker, there is no evidence they were related
to the decision process"). And according to Keller himself, the
remark was uttered approximately four months before the decision
to fire him was made. See id. (statements "temporally remote"
from the challenged employment decision constitute weak evidence
of bias in the decision making process). In order for the burden
of persuasion to shift, "[w]hat is required is . . . direct
evidence that decisionmakers placed substantial negative reliance
on an illegitimate criterion in reaching their decision." 490
U.S. at 277 (O'Connor, J., concurring in the judgment). Ryan's
alleged remark does not meet this standard. Rather, it is an
example of precisely the type of proof that Justice O'Connor
found to be insufficient: a "statement[] by [a] decisionmaker[]
unrelated to the decisional process itself. Id. The majority
has not cited a single case holding that a remark like that
attributed to Ryan is enough to shift the burden of persuasion.9
I submit that the majority's holding here is wrong.10
9. The majority cites Robinson v. PPG Industries, Inc., 23 F.3d
1159 (7th Cir. 1994). See Maj. Op. at 14. In Robinson, however,
the comments concerned discharge, see 23 F.3d at 1161-62, whereas
here Ryan's alleged remark concerned the hiring of assistants for
Keller. In addition, in Robinson, the remarks were allegedly
38
Second, I disagree with the majority's conclusion that
the difference between Keller's age at the time of his firing
(51) and that of his replacement (46) was "``sufficiently wide to
give rise to an inference of discrimination.'" Maj. Op. at 24
(quoting Barber v. CSX Distribution Serv., 68 F.3d 694, 699 (3d
Cir. 1995). When the Supreme Court crafted the McDonnell Douglas
prima facie case, it apparently concluded that there were a
(..continued)
made on several occasions, both before and after the termination,
see id. at 1164, and the remarks were broad statements that
"could be construed as interpretations of a corporate goal to
boot employees out before they retired." Id. at 1165. In this
case, Ryan allegedly made one comment, several months before he
decided that Keller should be discharged, and the remark cannot
be construed as involving a broad company policy.
The majority also cites Shager v. Upjohn Co., 913 F.2d
398 (7th Cir. 1990). See Maj. Op. at 14. But Shager did not
hold that the remarks made by the supervisor in that case were
sufficient to shift the burden of persuasion. Instead, it held
only that the remarks, together with evidence of pretext, was
enough to defeat summary judgment under the McDonnell Douglas
scheme. See 913 F.2d at 402.
10. The distinction between cases in which the discriminatory
animus played a role in the employment decision and those in
which it did not is critical because it fits into the notion
that, in different sectors of the economy, market forces work
differently to eradicate discrimination. In sectors of the
economy where the competitive pressures of the market work to
ensure that even if an employer has a personal animus against a
particular group, he will not exercise it because of a fear that
such behavior will result in his producing lower quality products
and being driven out of the market, one should be reluctant to
impose the costs of legal regulation. In other words, in these
sectors, although employers might have irrational prejudices,
they are unlikely to exercise them because of a fear of market
discipline.
On the other hand, in those sectors of the economy where
competitive pressures do not work as well and employers with a
discriminatory animus feel that they can exercise it without the
fear of being driven out of the market, there is a need for legal
regulation. See, e.g., Richard A. Posner, Aging and Old Age,
334-35 (1995).
39
number of employers who harbored a sufficient degree of racial
prejudice that they would pass over better qualified African-
American applicants in favor of inferior white applicants, even
though it was contrary to the employers' economic interests to do
so. Thus, the rejection of a qualified African-American in favor
of a white gave rise to an inference of discrimination and
provided a reason for shifting the burden of production. But is
a similar inference reasonable when a 51-year old banker is
replaced by a 46-year old in a decision made by a 60 year old?
Are there a significant number of employers who harbor such
prejudice against 51-year old bankers, as opposed to 46-year old
bankers, that they are willing to favor the 46-year olds over the
51-year olds, even though that will work against the employer's
economic interests? Cf. Posner, Aging and Old Age at 320 ("[T]he
kind of ``we-they' thinking that fosters racial, ethnic, and
sexual discrimination is unlikely to play a large role in the
treatment of the elderly worker") (footnote omitted); Thomas S.
Ulen, The Law and Economics of the Elderly, 4 Elder L.J. 99, 124-
25 (1996). Moreover, isn't the replacement of 51-year olds with
46-year olds a sisyphean task? After all, time's winged chariot
hurries on; McDevitt, the 46-year old who was hired to replace
Keller, recently turned 50 and by the time this case is over may
well have achieved the milestone that allegedly resulted in
Keller's demise. Unlike the majority, I would hold that the age
gap in this case is not wide enough to make out a prima facie
case.11
11. This case is distinguishable from Sempier v. Johnson &
40
Third, under the test set out in Fuentes v. Perskie,
32 F.3d 759, 764-65 (3d Cir. 1994), which our in banc court
reaffirmed in Sheridan v. DuPont, No. 94-7509, 1996 WL 659353,
(Nov. 14, 1996), I do not think that the plaintiff adequately
refuted the employer's legitimate reasons for his termination.
Under this test, a plaintiff who has made out a prima facie case
may defeat a motion for summary judgment by either (i)
discrediting the proffered reasons, either circumstantially or
directly, or (ii) adducing evidence, whether circumstantial or
direct, that discrimination was more likely than not a motivating
or determinative cause of the adverse employment action.
Fuentes, 32 F.3d at 764. Moreover, "[t]o discredit the
employer's proffered reason . . . the plaintiff cannot simply
show that the employer's decision was wrong or mistaken [but]
must demonstrate such weaknesses, implausibilities,
inconsistencies, incoherencies, or contradictions in the
employer's proffered legitimate reasons for its action that a
reasonable factfinder could rationally find them 'unworthy of
credence' . . . and hence infer 'that the employer did not act
(..continued)
Higgins, 45 F.3d 724, 730 (3d Cir.), cert. denied, 115 S. Ct. 2611
(3d Cir. 1995). There, the court held that the plaintiff had
shown that his replacement was sufficiently younger by producing
evidence that some of the plaintiff's duties were assumed by a
person who was 10 years younger and some were assumed by a person
who was four years younger. 45 F.3d at 729-30. Thus, the gap in
Sempier is somewhat larger than the gap here, and I think that
Sempier is a good place to draw the line.
Id. at 765 (emphasis in original; citation omitted).
41
for [the asserted] non-discriminatory reasons.'" Id. at 765
(emphasis in original; citation omitted).
In this case, I do not think that the plaintiff
satisfied the first prong of the Fuentes test. The company says
that it fired him because his performance was deficient, and it
points to strong supporting evidence. As noted, Keller was
supposed to raise $1.5 billion in financing, but he fell far
short of this goal. Moreover, the company points to evidence
that the goal was attainable: Keller's replacement met it in less
than one year. In sum, there was a strong legitimate economic
rationale for the employer to have made the decision it did. In
our eagerness to ferret out and eradicate discriminatory abuse we
must be careful not to deter employers from making legitimate
business decisions.
The evidence adduced by Keller to show that this
explanation was pretextual might at most be sufficient to raise a
genuine question as to whether the company's evaluation of his
performance was correct, but Keller's evidence does not
"demonstrate such weaknesses, implausibilities, inconsistencies,
incoherencies, or contradictions in the employer's proffered
legitimate reasons for its action that a reasonable factfinder
could rationally find them ``unworthy of credence.'" Id.
I also do not think that Keller satisfied the second
prong of the Fuentes test, which requires "evidence . . . that
discrimination was more likely than not a motivating or
determinative cause of the adverse employment action." Id. Viewed
together with the rest of the evidence, Ryan's alleged statement
42
is not sufficient to meet this requirement. Thus, I do not think
that Keller created a genuine question concerning the employer's
proffered legitimate reason. I would therefore affirm the
decision of the district court with respect to both Keller's
failure to promote and his discharge claims.
43