Vaughan v. MetraHealth Companies, Inc. ( 1998 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
JANET D. VAUGHAN,
Plaintiff-Appellant,
v.
THE METRAHEALTH COMPANIES,
INCORPORATED,
No. 96-2214
Defendant-Appellee,
and
METROPOLITAN LIFE INSURANCE
COMPANY, INCORPORATED,
Defendant.
Appeal from the United States District Court
for the Eastern District of Virginia, at Richmond.
Robert E. Payne, District Judge.
(CA-96-6-3)
Argued: April 8, 1998
Decided: May 29, 1998
Before WILKINSON, Chief Judge, NIEMEYER, Circuit Judge,
and CHAMBERS, United States District Judge for the
Southern District of West Virginia, sitting by designation.
_________________________________________________________________
Affirmed by published opinion. Chief Judge Wilkinson wrote the
opinion, in which Judge Niemeyer and Judge Chambers joined.
_________________________________________________________________
COUNSEL
ARGUED: Stephen Jon Springer, LABRUM & DOAK, Philadelphia,
Pennsylvania, for Appellant. Laura Graham Fox, WRIGHT, ROBIN-
SON, OSTHIMER & TATUM, P.C., Richmond, Virginia, for Appel-
lee. ON BRIEF: Jeffrey D. Hutton, Joseph L. Turchi, Kellie Ann
Allen, LABRUM & DOAK, Philadelphia, Pennsylvania; John A.
Gibney, Jr., SHUFORD, RUBIN & GIBNEY, Richmond, Virginia,
for Appellant. Edward F. Rockwell, WRIGHT, ROBINSON,
OSTHIMER & TATUM, P.C., Richmond, Virginia, for Appellee.
_________________________________________________________________
OPINION
WILKINSON, Chief Judge:
Janet Vaughan brought suit against her former employer under the
Age Discrimination in Employment Act ("ADEA"), 29 U.S.C.
§§ 621-34, alleging that age discrimination motivated her termination
during the course of a corporate downsizing. The district court found
that Vaughan had not adduced sufficient evidence that age discrimi-
nation was her employer's real motive for terminating her to survive
the employer's motion for summary judgment. We agree. Even where
an employer's explanation for taking action is disputed or disproved,
a discrimination plaintiff must come forward with sufficient evidence
that she was the victim of illegal discrimination before her case can
go to the jury. See St. Mary's Honor Ctr. v. Hicks, 509 U.S. 502
(1993).
I.
Vaughan was an employee of Metropolitan Life Insurance Co., Inc.
("MetLife") from 1986 until MetLife formed a joint venture with the
Travelers Group, Inc. in January 1995. At that time Vaughan became
an employee of the MetraHealth Companies, Inc., the entity that
resulted from the joint venture. Forming MetraHealth necessitated
some reorganization of MetLife's operations, a reorganization which
was designed to regain a share of the health insurance market. Princi-
pally, MetraHealth defined new geographic "Hub Markets," with the
consequence that the former MetLife regional office in Richmond,
Virginia became a satellite office of MetraHealth's Balti-
more/Washington, D.C./Northern Virginia Hub Market (the "DC
Hub"). In light of this changed status, MetraHealth found it necessary
2
to eliminate some positions in the Richmond office. Paul Cooper,
Vice President of Operations for MetraHealth's DC Hub, oversaw this
process.
Cooper concluded that one employee could manage provider rela-
tions in the Virginia portion of the DC Hub. Before the formation of
MetraHealth, two employees in MetLife's Richmond office had per-
formed a comparable function as Regional Network Directors -- Har-
riet Meetz, responsible for network development in the southern
portion of MetLife's Mid-Atlantic Region, and Vaughan, responsible
for the northern portion. In choosing between Meetz and Vaughan to
fill the new position of Director of Provider Relations, Cooper inter-
viewed both women. His interview with Vaughan lasted thirty to
forty-five minutes and took place on a day in which Cooper inter-
viewed approximately fourteen other employees in the Richmond
office. Cooper interviewed Meetz twice, first meeting with her for
approximately three hours at MetraHealth's Northern Virginia office
before Cooper even came to Richmond. Ultimately, Cooper named
Meetz Director of Provider Relations and, on April 17, 1995, advised
Vaughan that her position was being eliminated effective May 1,
1995. At this time, Cooper was fifty years old, Meetz was forty-five,
and Vaughan was fifty-seven.
Vaughan filed suit against MetLife and MetraHealth, alleging that
she was terminated because of her age in violation of the ADEA.
MetLife was dismissed as a defendant,1 and MetraHealth successfully
moved for summary judgment. The district court found that Vaughan
had not adduced evidence on the basis of which a reasonable juror
could conclude that age discrimination more likely than not explained
her termination. Vaughan now appeals.
II.
For the purposes of this appeal, we will assume, as the district court
found, that Vaughan has made out a prima facie case of age discrimi-
nation. See O'Connor v. Consolidated Coin Caterers, 517 U.S. 308,
310-13 (1996) (outlining prima facie case). Therefore, under the
_________________________________________________________________
1 Vaughan does not challenge the dismissal of the case against MetLife
on appeal.
3
three-stage proof scheme originally set forth in McDonnell Douglas
Corporation v. Green, 411 U.S. 792 (1973), "the burden of produc-
tion shifts to the employer ``to articulate some legitimate, nondiscrimi-
natory reason for the employee's rejection.'" O'Connor, 517 U.S. at
311 (quoting McDonnell Douglas). Once MetraHealth meets its bur-
den of production, Vaughan "must bear the burden of proving that
[s]he was the victim of intentional discrimination. [Sh]e can do this
by demonstrating that [MetraHealth's] proffered reason was a mere
pretext and that, as between [her] age and[MetraHealth's] explana-
tion, age was the more likely reason for the dismissal." Herold v.
Hajoca Corp., 864 F.2d 317, 319 (4th Cir. 1988) (citing E.E.O.C. v.
Western Electric Co., 713 F.2d 1011, 1014 (4th Cir. 1983)); see also
Halperin v. Abacus Technology Corp., 128 F.3d 191, 201 (4th Cir.
1997).
A.
Throughout this lawsuit, MetraHealth has sought to justify
Vaughan's dismissal as a result of its elaborate Downsizing Policy,
which is memorialized in a 144-page Downsizing Manual. Cooper
says he was guided in applying the Policy by MetraHealth human
resources personnel, whose business it was to be familiar with the
Manual. This was the explanation offered in MetraHealth's answers
to Vaughan's interrogatories, the theme developed in MetraHealth's
motion for summary judgment, the focus of Vaughan's argument, and
the justification considered by the district court. This explanation sat-
isfies MetraHealth's burden of production. Thus, in the final phase of
the McDonnell Douglas test, we evaluate whether this justification
was a pretext for age discrimination.
Vaughan disputes MetraHealth's explanation by pointing out that
Cooper, who made the decision to discharge her, admitted he was not
familiar with the Downsizing Manual, had never read it, and had in
fact not seen it until his deposition in this lawsuit. Further, Vaughan
identifies numerous departures from the Downsizing Policy. For
example, the Manual calls for "objective v. subjective evaluation" and
reliance on "facts v. opinions." But Cooper defended his choice of
Meetz over Vaughan by asserting that "[m]anagement is a highly sub-
jective art." MetraHealth developed Downsizing Analysis Forms DA-
I and DA-II to implement the Downsizing Policy and to focus atten-
4
tion on employees' qualifications, specific experience, and abilities
and strengths. Though Cooper did complete these forms, he did so
with "no first-hand knowledge of the past performance levels of either
Harriet Meetz or [Janet Vaughan]" and without reviewing either can-
didate's personnel file. Finally, the Downsizing Manual calls for an
objective assessment of the number of years experience an employee
has in the position in question, in a similar position, or in a compara-
ble position in another division of the company. Yet Cooper admitted
that he "make[s] judgments about people's abilities sometimes based
on rather thin samples of their behavior" and that, when he terminated
Vaughan, he was unaware of the extent of her experience with
MetLife and did not know that she helped develop MetLife's Health
Maintenance Organization ("HMO") network in Boston in the 1980s.
The district court noted these various differences between the
Downsizing Manual and Cooper's actual decision-making process. It
found the fact that MetraHealth often failed to follow its own Down-
sizing Manual to be "considerable evidence" that this explanation was
pretext. While MetraHealth continues to insist that it has substantially
complied with the Downsizing Manual, we agree with the district
court that Vaughan has raised a genuine dispute over the credibility
of the employer's proffered justification.
B.
Vaughan contends that she has thereby forestalled summary judg-
ment for MetraHealth, urging us to rule that she may reach a jury by
doing no more than calling MetraHealth's proffered justification into
question. See, e.g., Wohl v. Spectrum Mfg., Inc., 94 F.3d 353, 355 (7th
Cir. 1996) ("A plaintiff in an age discrimination case may defeat a
summary judgment motion brought by the employer if the plaintiff
produces evidence that the employer proffered a phony reason for fir-
ing the employee."). As have the courts of appeals who use this "pre-
text only" analytical model, Vaughan builds her argument on a single
passage from the Supreme Court's opinion in St. Mary's:
The factfinder's disbelief of the reasons put forward by the
defendant (particularly if disbelief is accompanied by a sus-
picion of mendacity) may, together with the elements of the
prima facie case, suffice to show intentional discrimination.
5
Thus, rejection of the defendant's proffered reasons will
permit the trier of fact to infer the ultimate fact of inten-
tional discrimination, and the Court of Appeals was correct
when it noted that, upon such rejection, "[n]o additional
proof of discrimination is required."
509 U.S. at 511 (citation and footnote omitted).
Vaughan seeks to extrapolate from this passage a rule that all dis-
crimination plaintiffs are summary judgment-proof as soon as they
raise a jury question about the veracity of their employer's explana-
tion for the challenged employment action. Undoubtedly, the quoted
passage suggests that some plaintiffs may reach the jury solely on the
basis of "[t]he factfinder's disbelief of the reasons put forward by the
defendant . . . together with the elements of the prima facie case."
This is unremarkable, as a prima facie case of age discrimination
often requires "some other evidence that the employer did not treat
age neutrally," Western Elec., 713 F.2d at 1015, such as discrimina-
tory comments or marked favoritism towards younger, less qualified
workers. Depending on the character of the evidence in each case, a
discrimination claim may survive summary judgment solely on the
strength of the prima facie case and the evidence that contradicts the
employer's proffered justification -- if that evidence provides a fac-
tual basis for the ultimate finding of discrimination. Nevertheless, like
the First Circuit Court of Appeals, "we do not think that the Supreme
Court meant to say that such a finding [of discrimination] would
always be permissible" once pretext is found. Woods v. Friction
Materials, Inc., 30 F.3d 255, 260-61 n.3 (1st Cir. 1994). Such an
interpretation of St. Mary's reads far too much into a few lines of the
opinion and, more importantly, cuts the heart out of the ruling.
The actual holding of St. Mary's was that a discrimination plaintiff
using the McDonnell Douglas framework was not entitled to judg-
ment as a matter of law simply because he made out a prima facie
case and the trier of fact rejected his employer's proffered justifica-
tion for firing him. In so holding the Court emphasized that the final
stage of the McDonnell Douglas proof scheme requires the plaintiff
to prove that the employer's proffered explanation is "a pretext for
discrimination." St. Mary's, 509 U.S. at 515 (quoting Texas Dept. of
Community Affairs v. Burdine, 450 U.S. 248, 253 (1981)); see also
6
Bodenheimer v. PPG Industries, Inc., 5 F.3d 955, 958 (5th Cir. 1993)
(post-St. Mary's affirmance of summary judgment for employer
because plaintiff did not "produce sufficient evidence to establish that
[employer's] reasons were pretexts for age discrimination"). The
Court explained that "a reason cannot be proved to be ``a pretext for
discrimination' unless it is shown both that the reason was false, and
that discrimination was the real reason." St. Mary's, 509 U.S. at 515
(quoting Burdine).
St. Mary's thus teaches that to survive a motion for summary judg-
ment under the McDonnell Douglas paradigm the plaintiff must do
more than merely raise a jury question about the veracity of the
employer's proffered justification. The plaintiff must have developed
some evidence on which a juror could reasonably base a finding that
discrimination motivated the challenged employment action. See
Theard v. Glaxo, 47 F.3d 676, 680 (4th Cir. 1995) ("Since the evi-
dence was not sufficient for a reasonable jury to have concluded that
Glaxo's decision not to promote Theard was wrongfully based on
race, entry of summary judgment [for the employer] was justified.").
As this court held in Halperin, an employer is entitled to summary
judgment unless the ADEA plaintiff has adduced sufficient evidence
"both that the reason was false, and that [age] discrimination was the
real reason." 128 F.3d at 201 (quoting St. Mary's, 509 U.S. at 515)
(alteration in Halperin); see also Jiminez v. Mary Washington
College, 57 F.3d 369, 378 (4th Cir. 1995); Mitchell v. Data General
Corp., 12 F.3d 1310, 1317 (4th Cir. 1993).
This approach, dubbed "pretext-plus,"2 is a better approach than
"pretext only." Pretext-plus best preserves the character of statutes
like the ADEA as antidiscrimination statutes. To paraphrase St.
Mary's, the ADEA "does not award damages against employers who
cannot prove a nondiscriminatory reason for adverse employment
action, but only against employers who are proven to have taken
adverse employment action by reason of (in the context of the present
case) [age]." 509 U.S. at 523-24. Of course, the simple fact "[t]hat the
employer's proffered reason is unpersuasive, or even obviously con-
trived, does not necessarily establish that the plaintiff's proffered rea-
_________________________________________________________________
2 E.g., St. Mary's, 509 U.S. at 535-36 (Souter, J., dissenting) (character-
izing majority's approach as "pretext-plus").
7
son of [age] is correct." Id. at 524. Like the Supreme Court, we
recognize that "nothing in law would permit us to substitute for the
required finding that the employer's action was the product of unlaw-
ful discrimination, the much different (and much lesser) finding that
the employer's explanation of its action was not believable." Id. at
514-15. By allowing all ADEA plaintiffs to reach a jury on bare evi-
dence of pretext, with scant record support for the ultimate claim of
age discrimination, the "pretext only" rule for which Vaughan con-
tends would permit the intricacies of a judicially-devised proof
scheme to replace a plaintiff's congressionally-mandated burden.
C.
Thus Vaughan can survive summary judgment only if she has
developed some evidence both that MetraHealth's purported reliance
on the Downsizing Manual was false, and that discrimination was the
real reason for her discharge. Id. at 515; accord Woroski v. Nashua
Corp., 31 F.3d 105, 108-09 (2d Cir. 1994); Woods, 30 F.3d at 260.
But none of the evidence Vaughan offers supports her claim of age
discrimination.
Though Vaughan appears to assert that she was better qualified
than Meetz, at best her "evidence would only support a finding that
she was qualified for the . . . job, not that she was more qualified than
[Meetz]," Durham v. Xerox Corp., 18 F.3d 836, 840 (10th Cir. 1994)
(emphasis added), which she must demonstrate to prove age discrimi-
nation. See Evans v. Technologies Applications & Servs. Co., 80 F.3d
954, 960 (4th Cir. 1996) (describing similar burden in sex discrimina-
tion case). Standing alone, self-serving claims of superiority do not
suffice. Bodenheimer, 5 F.3d at 959. Vaughan makes no claim that
Meetz was unqualified to be Director of Provider Relations. Even
taken in the light most favorable to Vaughan, the evidence in the case
reveals only what Vaughan herself says, that she and Meetz "had
comparable qualifications."
Moreover, there is considerable undisputed evidence that Meetz
was truly the superior candidate. On the Downsizing Analysis Forms
Cooper completed, Meetz scored higher than Vaughan in the catego-
ries of qualifications, specific experience, and abilities and strengths.
Cooper justified his preference of Meetz in part based on her recent
8
six years experience running a profitable, staff-model HMO for a
company that MetraHealth considered a "market leader" and with
which MetraHealth hoped to compete. At the time of the downsizing,
MetraHealth was planning to move towards the staff-model organiza-
tional framework, wherein health care providers would become
employees of MetraHealth directly rather than just contracting with
MetraHealth. Thus Meetz's HMO experience was directly relevant to
MetraHealth's anticipated needs; it made her ideally suited to facili-
tate MetraHealth's transition to staff-model relations with its provid-
ers. Vaughan argues that Cooper ignored her HMO experience from
the 1980s, but she does not explain how this experience gave her
skills that were superior -- or even comparable-- to Meetz's. Fur-
thermore, Cooper valued Meetz's clinical training as a dentist.
Vaughan had no similar training. Though clinical training was not
formally a requirement for the job of Director of Provider Relations,
Cooper was certainly entitled to take Meetz's special abilities into
account in choosing which employee would best interact with the
health care providers in MetraHealth's network. Thus, Cooper has
identified two aspects of Meetz's qualifications that set her apart from
Vaughan; he has explained how those qualifications played into his
decision; and Vaughan has failed either to dispute that Meetz had
those qualifications or to create any doubt that Cooper actually took
them, and not the candidates' ages, into account in selecting Meetz as
Director of Provider Relations.
As noted above, Vaughan did identify several obvious departures
from MetraHealth's Downsizing Manual. While MetraHealth's fail-
ure to follow its own Manual certainly makes the attempt to use the
Manual to justify discharging Vaughan pretextual, it does not even
hint that the real motive was age discrimination."The mere fact that
an employer failed to follow its own internal procedures does not
necessarily suggest that the employer was motivated by illegal dis-
criminatory intent." Randle v. City of Aurora , 69 F.3d 441, 454 (10th
Cir. 1995). Federal courts cannot ensure that business decisions are
always informed or even methodical. As the Fifth Circuit explained:
Proof that an employer did not follow correct or standard
procedures in the termination or demotion of an employee
may well serve as a basis for a wrongful discharge action
under state law. As we have stated, however, the ADEA was
9
not created to redress wrongful discharge simply because
the terminated worker was over the age of forty. A dis-
charge may well be unfair or even unlawful yet not be evi-
dence of age bias under the ADEA.
Moore v. Eli Lilly & Co., 990 F.2d 812, 819 (5th Cir. 1993) (footnote
omitted). In fact, MetraHealth might have satisfied its burden of pro-
duction in a non-pretextual manner. If the company had not proffered
the Downsizing Manual as the justification for its actions, but had
rested on the respective qualifications of the two applicants, we would
have little occasion even to discuss its internal procedures.
Vaughan next says that age discrimination is evident because six
of the seven people discharged from the Richmond office were over
age forty and thus age-protected under the ADEA. We have repeat-
edly noted that statistical evidence is inherently malleable and that it
is thus subject to careful scrutiny. Western Elec., 713 F.2d at 1018
(citing cases). Vaughan's "statistics" are particularly unhelpful, as
they are drawn from a sample of seven employees, which is too small
for reliable analysis. Birkbeck v. Marvel Lighting Corp., 30 F.3d 507,
511 (4th Cir. 1994) (indicating that samples of between five and thir-
teen are too small to have any predictive value). And though we have
recognized that statistical evidence generally needs to be supported
with expert testimony, Vaughan has proffered none to bolster her
shaky numerical data. See Carter v. Ball, 33 F.3d 450, 456 (4th Cir.
1994). Moreover, the data include downsizing decisions with which
Cooper, the alleged discriminator in this case, was not directly
involved. Thus, for several reasons Vaughan's numerical evidence
falls short of indicating that age discrimination motivated her dis-
charge.
As more evidence that age animus played a role in Cooper's down-
sizing decisions, Vaughan points to Cooper's choice of thirty-two-
year-old Maryanne Randazzo over forty-two-year-old Robert Balash
as "sales team leader" for the DC Hub. In a proper case, a decision
maker's repeated favoritism of younger workers over older ones
might be relevant to age animus. See Herold, 864 F.2d at 320.
Vaughan's "evidence," however, consists of nothing more than the
bare assertion that the younger worker replaced the older. And we
have explained that:
10
[i]n a reduction of work force case, the fact that the duties
of a terminated older employee were assumed by a younger
individual is not conclusive of age bias. The same rule
applies to replacement cases as well, where the mere fact of
replacement by a younger worker is not dispositive of age
discrimination. If it were, it would transform the ADEA into
something akin to a strict seniority protection system.
Birkbeck, 30 F.3d at 512 (citations omitted).
Vaughan also complains that MetraHealth did not transfer her to
Philadelphia, while two other, younger workers were offered transfers
to other offices. This "disparate treatment," she says, evidences age
bias. We disagree. There was no job for Vaughan in Philadelphia
without firing another, younger employee, a step towards reverse dis-
crimination that the ADEA in no way requires. Pages-Cahue v. Iberia
Lineas Aereas de Espana, 82 F.3d 533, 538 (1st Cir. 1996) (rejecting
claim that employer should have dismissed younger worker to make
a job for displaced older worker; collecting cases). Vaughan's situa-
tion was also markedly different from the plaintiff in Herold, where
an employee made out a case of age discrimination in part because
his employer had not offered him the job of a younger worker even
though the older employee was contractually entitled"to ``bump'
workers with less seniority." 864 F.2d at 320. Vaughan possessed no
such enforceable seniority right, so no inference of age discrimination
arises from MetraHealth's unremarkable decision not to fire a youn-
ger worker in Philadelphia in order to free up a position for Vaughan.
Ultimately, Vaughan's argument boils down to a complaint that
Cooper's process for choosing the Director of Provider Relations was
too haphazard and subjective. "That appellation, however, does not
convert an otherwise legitimate reason [for an employment decision]
into an illegal one." Western Elec., 713 F.2d at 1016 (citing Burdine,
450 U.S. at 256-57); accord Holmes v. Bevilacqua , 794 F.2d 142,
147-48 (4th Cir. 1986). "[T]he presence of subjectivity in employee
evaluations is itself not a grounds for challenging those evaluations
as discriminatory." Hutson v. McDonnell Douglas Corp., 63 F.3d 771,
780 (8th Cir. 1995). In fact, in filling an upper-level management
post, some degree of subjectivity is inevitable, as the decision maker
must balance employees' different strengths and qualifications, pre-
11
dicting all the while who will be the best ambassador for the company
and most effectively serve its business needs. Judgments such as these
are neither mechanical nor quantifiable. Their imprecision, however,
need not signal an infection with age animus.
In sum, Vaughan must adduce some evidence that MetraHealth's
proffered justification was not just a pretext, but a pretext for age dis-
crimination. This she has not done. Because she cannot meet the bur-
den that Congress by statute has assigned her, we cannot displace the
employer's business decision. We therefore affirm the judgment of
the district court.
AFFIRMED
12