Rowe v. Marley Co. ( 2000 )

FILED: December 21, 2000
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 00-1093
(CA-98-84-5)
Gary L. Rowe,
Plaintiff - Appellant,
versus
The Marley Company,
Defendant - Appellee.
O R D E R
The court amends its opinion filed December 1, 2000, as
follows:
On page 3, 4th full paragraph, line 6 -- Barry Dunham’s name
is corrected to read “age 49.”
On page 4, 5th full paragraph, line 1 -- the phrase “Garber
told Marley” is corrected to read “Garber told Rowe ....”
For the Court - By Direction
/s/ Patricia S. Connor
Clerk
PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
GARY L. ROWE,
Plaintiff-Appellant,
v.
THE MARLEY COMPANY,
Defendant-Appellee, No. 00-1093
and
MARLEY PUMP COMPANY; UNITED
DOMINION INDUSTRIES, INCORPORATED,
Defendants.
Appeal from the United States District Court
for the Western District of Virginia, at Harrisonburg.
Jackson L. Kiser, Senior District Judge.
(CA-98-84-5)
Argued: November 1, 2000
Decided: December 1, 2000
Before MICHAEL, MOTZ, and KING, Circuit Judges.
_________________________________________________________________
Affirmed by published opinion. Judge Motz wrote the opinion, in
which Judge Michael and Judge King joined.
_________________________________________________________________
COUNSEL
ARGUED: Thomas Edward Ullrich, WHARTON, ALDHIZER &
WEAVER, P.L.C., Harrisonburg, Virginia, for Appellant. Frank Ken-
neth Friedman, WOODS, ROGERS & HAZLEGROVE, P.L.C., Roa-
noke, Virginia, for Appellee. ON BRIEF: Thomas A. Leggette,
WOODS, ROGERS & HAZLEGROVE, P.L.C., Roanoke, Virginia,
for Appellee.
_________________________________________________________________
OPINION
DIANA GRIBBON MOTZ, Circuit Judge:
Gary Rowe brought this action against his former employer, alleg-
ing that his termination violated ERISA, the Age Discrimination in
Employment Act (ADEA), the Americans with Disabilities Act
(ADA), and constituted wrongful discharge under Virginia law. After
discovery was completed, the district court granted the employer sum-
mary judgment on the federal claims and, pursuant to a motion by
Rowe, dismissed his state law claim without prejudice. We affirm.
I.
In 1984, The Marley Company hired Rowe to sell its line of resi-
dential water pump products. Rowe's territory as a regional sales
manager for Marley was primarily limited to Virginia and West Vir-
ginia, but at times also included Delaware, Maryland, Kentucky, and
western Pennsylvania. Throughout most of Rowe's employment at
Marley, his supervisor was Paul Robinson, but in late 1996, Robert
Garber, Marley's Vice President for Sales, assumed responsibility for
supervising Rowe.
In 1993, Rowe, who was an insulin-dependent diabetic and in end
stage renal failure, underwent a kidney and pancreas transplant. After
returning to work in 1994, Rowe consistently performed all of the
necessary functions of his job and received satisfactory performance
ratings. Indeed, Rowe did not miss a single day of work in 1996 and
1997. Rowe maintains, however, that he still experiences health prob-
lems related to the transplant operation, such as fatigue, dizziness,
short-term memory loss, and an inability to exert himself physically
for more than an hour. He also claims to suffer from impotence and
urinary frequency. As a result of the transplant, Rowe must take
immunosuppressant medication and other drugs.
2
Through his employment with Marley, Rowe was eligible for
group welfare benefits and he participated in the premium family
health plan offered by Marley's parent company. Marley was self-
insured and thus bore the cost of these benefits in its operating bud-
get. Marley's health plan covered Rowe's immunosuppressant medi-
cations, resulting in a cost to Marley of over $1000 a month.*
After becoming Rowe's supervisor in late 1996, Garber, on occa-
sion, commented on Rowe's health. Specifically, Garber told Rowe
about a friend who had undergone the same transplant surgery as
Rowe, but was still very ill. Garber expressed surprise that Rowe
could still work full time after having undergone such a major opera-
tion. During the months immediately prior to Rowe's discharge, Gar-
ber continued to ask Rowe about his health and whether it impeded
his ability to perform his job. Garber also knew that Rowe took
immunosuppressant medication and assumed that Marley's health
plan covered the cost of this medication.
In late 1996 or early 1997, Marley's president, James Gibbs,
instructed Bob Moore, General Manager of Marley's Water Systems
7 Division, to reduce Marley's expense-to-revenue ratio. Marley was
struggling financially as a result of the declining market for rural
water pumps and other factors. As part of the effort to decrease Mar-
ley's expenses, Moore asked Garber to reconfigure the national sales
territories so that each territory's annual sales would reach at least
two million dollars.
To meet this new sales quota, Garber decided that it was necessary
to reduce the number of East Coast sales territories from four to three.
At that time, the East Coast salesmen were Bill Beyer, age 46, who
covered New England and the Mid-Atlantic states; Rowe, age 48,
who covered Virginia and West Virginia; Jeff Black, age 38, who
covered the Carolinas and Georgia; and Barry Dunham, age 49, who
covered Florida. Only Dunham's sales had exceeded two million dol-
_________________________________________________________________
* Upon the recommendation of Rowe's supervisor, Marley agreed to
pay for Rowe's medication beginning in 1995, although the plan did not
cover such medication at that time. In 1997, the plan was amended and
covered Rowe's transplant-related medication.
3
lars in the previous year. Garber decided to leave Dunham's territory
alone and to divide one of the remaining three territories.
Ultimately, Garber decided to divide Rowe's centrally-located ter-
ritory between Black and Beyer to create two territories, each of
which would hopefully meet the two million dollar sales quota. Gar-
ber opted to retain Black and Beyer, and not to replace one of them
with Rowe, for several reasons. First, Garber decided that Rowe's
southern accent and demeanor would impede him from successfully
selling in Beyer's more northern territory; second, he concluded that
distributors in Pennsylvania might resent Rowe because he had previ-
ously provided sales assistance to one of their competitors; and third,
Black had a particularly good relationship with Marley's largest cus-
tomer, whose headquarters were located in Black's sales territory.
Rowe was not the only salesman affected by a territorial recon-
figuration. Marley similarly divided a centrally-located sales territory
in the Midwest and merged it into existing territories to the north and
south. The reconfiguration of the Midwest territories resulted in the
termination of another salesman, Del Walls, who was forty-one years
of age.
At the same time it established the two million dollar sales quota,
Marley instituted a company-wide reduction-in-force (RIF) as another
means of cutting costs. Overall the RIF reduced Marley's payroll by
nearly one-third, from 221 to 146 employees. As a result of the RIF,
employees both over and under forty years of age lost their jobs. At
present, Marley has only six regional salesmen, down from fourteen
before the RIF.
During the period in which Marley began implementing its cost-
cutting measures, Marley's parent company, United Dominion Indus-
tries ("UDI"), encouraged greater scrutiny of group welfare benefit
expenses. To that end, UDI circulated to its subsidiaries an extensive
report on 1996 group welfare benefit costs, rating each subsidiary,
including Marley, on their costs versus the UDI median costs. While
Marley's costs were below average for a UDI subsidiary, the report
noted that Marley's 1996 costs were higher than its 1995 costs.
In April 1997, Garber told Rowe that his employment would be
terminated because of the RIF and the territorial reconfiguration.
4
Rowe's discharge took effect in July 1997. In November 1998, after
completing the EEOC administrative process, Rowe brought suit
against Marley alleging that his termination violated ERISA, 29
U.S.C. § 1140 (1994), the ADA, 42 U.S.C. § 12101 (1994), the
ADEA, 29 U.S.C. § 621 (1994), and constituted a wrongful discharge
under state law. After discovery was completed, Marley moved for
summary judgment on all counts. The district court granted the
motion as to the federal claims and then granted Rowe's motion to
dismiss the state wrongful discharge claim without prejudice.
II.
Rowe asserts that he has established a prima facie case of discrimi-
nation under ERISA, the ADEA, and the ADA, and we assume for
the purposes of this appeal that he has. In order to survive summary
judgment on these claims, however, Rowe must also demonstrate that
Marley's proffered non-discriminatory reasons for his termination are
pretextual.
While the elements of a prima facie case differ depending on the
statute and the nature of the claim, proving a discrimination claim
under any of these federal statutes requires a showing that an employ-
er's asserted non-discriminatory reason for the challenged employ-
ment action is actually a pretext. See Reeves v. Sanderson Plumbing
Prods., Inc., ___ U.S. ___, 120 S. Ct. 2097, 2106 (2000) (under the
ADEA "the plaintiff may attempt to establish that he was the victim
of intentional discrimination ``by showing that the employer's prof-
fered explanation is unworthy of credence'"); Baird v. Rose, 192 F.3d
462, 468-70 (4th Cir. 1999) (reversing dismissal of an ADA claim
where the allegations in the complaint permitted a conclusion that the
school's proffered non-discriminatory reason for excluding student
from a school activity was a pretext for discrimination); Conkwright
v. Westinghouse Elec. Corp., 933 F.2d 231, 239 (4th Cir. 1991)
("Under the McDonnell Douglas scheme of proof, Conkwright's
§ 510 [ERISA] claim ultimately fails because he does not demonstrate
a genuine issue on the matter of pretext.").
In arguing that he has established that Marley's asserted reasons for
firing him are pretextual, Rowe heavily relies on the Supreme Court's
recent decision in Reeves. In Reeves, the Supreme Court granted cer-
5
tiorari to resolve the conflict among the circuits "as to whether a
plaintiff's prima facie case of discrimination, . . . combined with suf-
ficient evidence for a reasonable factfinder to reject the employer's
non-discriminatory explanation for its decision, is adequate to sustain
a finding of liability for intentional discrimination." Reeves, 120 S.
Ct. at 2104. (citing cases).
In the proceedings below, the Fifth Circuit had reversed a jury ver-
dict in favor of the employee-plaintiff on the ground that, while the
plaintiff had adduced sufficient evidence for a reasonable jury to con-
clude that the employer's explanation for the challenged employment
decision was pretextual, "th[at] showing, standing alone, was insuffi-
cient to sustain the jury's finding of liability." Id. at 2108. The Fifth
Circuit had required some additional evidence of discrimination, dis-
tinct from the evidence supporting plaintiff's prima facie case and the
evidence used to challenge the employer's explanation for its deci-
sion, to sustain the jury's verdict. Id. The Supreme Court held that
this was error. Id. The Court explained that "[i]n so reasoning, the
Court of Appeals misconceived the evidentiary burden borne by
plaintiffs who attempt to prove intentional discrimination through
indirect evidence." Id.The Reeves Court recognized that its decision in St. Mary's Honor
Center v. Hicks, 509 U.S. 502, 511 (1993), taught that "the fact-
finder's rejection of the employer's legitimate, nondiscriminatory rea-
son for its action does not compel judgment for the plaintiff." Reeves,
120 S. Ct. at 2108 (emphasis added). The Court clarified, however,
that it is "permissible for the trier of fact to infer the ultimate fact of
discrimination from the falsity of the employer's explanation." Id.Thus, "a plaintiff's prima facie case, combined with sufficient evi-
dence to find that the employer's asserted justification is false, may
permit the trier of fact to conclude that the employer unlawfully dis-
criminated." Id. at 2109. In so holding, the Supreme Court invalidated
the requirement that "a plaintiff must always introduce additional,
independent evidence of discrimination" to survive summary judg-
ment. Id.Put another way, in Reeves the Supreme Court held that when a
plaintiff establishes a prima facie employment discrimination case
and that his employer's explanation is pretextual, this does not auto-
6
matically create a jury question, but it may do so. Even when a plain-
tiff demonstrates a prima facie case and pretext, his claim should not
be submitted to a jury if there is evidence that precludes a finding of
discrimination, that is if "no rational factfinder could conclude that
the action was discriminatory." Id. But, absent such evidence, courts
may not require a plaintiff who proves both a prima facie case and
pretext to produce additional proof of discrimination in order to sur-
vive a defendant's motion for summary judgment. This is so because
"it is permissible for the trier of fact to infer the ultimate fact of dis-
crimination from the falsity of the employer's explanation." Id. at
2108.
With these principles in mind, we turn to the facts of the case at
hand.
III.
Marley asserts that it terminated Rowe for neutral, non-
discriminatory reasons. Marley notes that, at the time of Rowe's ter-
mination, it had instituted a company-wide reduction-in-force, which,
by necessity, meant that some employees would lose their jobs. More-
over, Marley points to the company directive that each sales territory
produce at least two million dollars in sales, which required Garber
to eliminate one of the East Coast sales territories. This meant that
one of the salesmen in that region would lose his job. Marley prof-
fered evidence that it opted to divide Rowe's territory because of its
central location: it could be divided among existing sales territories
without significant disruption. Garber recommended that Beyer and
Black be retained, in lieu of Rowe, because (i) Garber believed that
Rowe would not be successful selling to customers in the Northeast
and (ii) Black had a particularly close relationship with Marley's larg-
est distributor, whose headquarters were located in his territory.
Rowe has not forecast any evidence that casts doubt on the veracity
of Marley's proffered explanation for his termination. To the con-
trary, the record supports Marley's contention that the company could
not reconfigure the sales territories on the East Coast to conform with
the two million dollar requirement without discharging a salesman. It
also offers support for the purported rationale for the decision Marley
made to discharge Rowe rather than another salesman -- the com-
7
pany had legitimate reasons for wanting to retain the salesmen in the
northeast and southeast states, rather than move a new salesman to
those states particularly one like Rowe who had lived in Virginia his
whole life and was unfamiliar with those areas. The decision to dis-
charge Rowe and retain Beyer and Black is the kind of business deci-
sion that we are reluctant to second-guess. See Henson v. Liggett
Group, Inc., 61 F.3d 270, 277 (4th Cir. 1995) ("We have recognized
the importance of giving an employer the latitude and autonomy to
make business decisions, including workplace reorganization, as long
as the employer does not violate the ADEA.").
Rowe attempts to demonstrate that Marley's proffered reasons for
his termination are pretextual by arguing that Moore and Garber
offered inconsistent explanations of the criteria used in determining
which salesmen to discharge: while Moore stated that he believed
Garber considered the sales staff's performance in deciding who to
discharge, Garber stated that he did not consider that factor, and that
his decision was based solely on "numbers, geography and relation-
ships." Rowe's argument fails to prove pretext, however, because
Garber was the only true decision-maker in this case; he was dele-
gated the task of reconfiguring the territories and deciding which
salespeople to discharge; Moore merely approved the selections.
Because Garber was the relevant decision-maker, Moore's somewhat
inconsistent statement as to the factors he believed Garber considered
is simply not probative of pretext, particularly where, as here, there
is no evidence to discredit Garber's explanation of how he decided
which salesmen to discharge.
In sum, Reeves does not assist Rowe because he failed to demon-
strate, with respect to any of his federal claims, that Marley's prof-
fered non-discriminatory reasons for discharging him were pretextual.
Because Rowe did not demonstrate that Marley's explanation for his
discharge was pretextual, there is no evidence from which to infer that
the real reason for his termination was illegal discrimination. Given
this, the rule announced in Reeves, 120 S. Ct. at 2109 -- that a court
cannot always require "additional, independent evidence of discrimi-
nation" -- does not affect the outcome of this case. Rather, it is
Rowe's failure to demonstrate pretext on Marley's part that dooms his
federal claims.
8
IV.
For the foregoing reasons, the judgment of the district court is
AFFIRMED.
9