Fobian v. Storage Technology ( 2000 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
FRANK R. FOBIAN,
Plaintiff-Appellant,
v. No. 97-1477
STORAGE TECHNOLOGY CORPORATION,
Defendant-Appellee.
RALPH D. GREEN,
Plaintiff-Appellant,
v. No. 97-1822
STORAGE TECHNOLOGY CORPORATION,
Defendant-Appellee.
FRANK R. FOBIAN; RALPH D. GREEN,
Plaintiffs-Appellants,
v. No. 98-1848
STORAGE TECHNOLOGY CORPORATION,
Defendant-Appellee.
FRANK R. FOBIAN; RALPH D. GREEN,
Plaintiffs-Appellants,
v. No. 98-1849
STORAGE TECHNOLOGY CORPORATION,
Defendant-Appellee.
FRANK R. FOBIAN; RALPH D. GREEN,
Plaintiffs-Appellants,
v. No. 99-2185
STORAGE TECHNOLOGY CORPORATION,
Defendant-Appellee.
Appeals from the United States District Court
for the Eastern District of Virginia, at Richmond.
Richard L. Williams, Senior District Judge.
(CA-96-767-R, CA-96-904-R)
Argued: May 2, 2000
Decided: June 30, 2000
Before MICHAEL, MOTZ, and KING, Circuit Judges.
_________________________________________________________________
Affirmed by unpublished per curiam opinion.
_________________________________________________________________
COUNSEL
ARGUED: Thomas Hunt Roberts, THOMAS H. ROBERTS &
ASSOCIATES, P.C., Richmond, Virginia, for Appellants. Thamer
Eugene Temple, III, MCSWEENEY, BURTCH & CRUMP, P.C.,
Richmond, Virginia, for Appellee. ON BRIEF: Tim Schulte,
THOMAS H. ROBERTS & ASSOCIATES, P.C., Richmond, Vir-
ginia, for Appellants. Jack W. Burtch, Jr., MCSWEENEY, BURTCH
& CRUMP, P.C., Richmond, Virginia, for Appellee.
_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
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OPINION
PER CURIAM:
Frank R. Fobian and Ralph D. Green (sometimes, the"employees")
brought separate actions against their former employer, Storage Tech-
nology Corporation (StorageTek or the "company"), under the Age
Discrimination in Employment Act of 1967 (ADEA). In 1997 the dis-
trict court granted summary judgment in both cases, and we consoli-
dated them on appeal. While the appeal was pending, the employees
filed separate Rule 60(b) motions, and the district court dismissed
both motions for lack of jurisdiction. The employees then appealed
the denial of their Rule 60(b) motions, and we held that a district
court has jurisdiction to consider a Rule 60(b) motion even though the
underlying judgment is on appeal. Fobian v. Storage Tech. Corp., 164
F.3d 887 (4th Cir. 1999). We remanded for the district court to con-
sider the Rule 60(b) motions in this case. On remand the district court
denied the motions on the merits, and the employees appealed. We
now consider both the summary judgment and Rule 60(b) decisions.
Finding no error, we affirm.
I.
We state the relevant facts and draw all justifiable inferences in
favor of the employees, the nonmovants in the summary judgment
proceedings. See Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 255
(1986). StorageTek manufactures, installs, and maintains computer
memory products. Fobian and Green worked for StorageTek in its
Richmond office from 1979 until their layoffs in September 1995 and
January 1996. At the time they were laid off, Fobian was 60 years old
and Green was 59. They both held the position of Customer Service
Engineer (CSE). James Mechtly, the Customer Service Manager,
supervised all CSEs.
Fobian and Green contend that StorageTek began treating them
less favorably before they were laid off. From March 1994 to March
1995 Fobian had worked alone on the night shift, performing the pri-
mary responsibilities. In March 1995 StorageTek transferred Fobian
to the day shift and placed Mike Krouse, a junior CSE, in Fobian's
night position. After the transfer Fobian did not have primary respon-
3
sibilities on his new shift; rather, he was assigned to work as a backup
engineer.
According to Fobian and Green, StorageTek did not give them the
same management training opportunities as younger CSEs. During
the late summer of 1995 StorageTek selected Green to participate in
a limited training program designed to make one CSE in each depart-
ment familiar with management reports. After his selection, however,
StorageTek removed Green from the program because he failed to
follow the company's "escalation" policy. Green was on duty as act-
ing manager when a major client had a problem with equipment
maintained by StorageTek. StorageTek's escalation policy requires
that this type of client problem be referred up the chain of command.
Green decided that the problem did not warrant escalation. The next
morning, the client contacted Bruce Duke (Mechtly's manager) about
the situation. This was the first Duke heard of the problem, and, in
Green's words, "Bruce got very upset because I didn't escalate the
[problem]." Duke then instructed Mechtly to replace Green in the
management training program. At his deposition Green said this was
a "bogus" reason for removing him from the program, but he did not
explain why. Fobian also testified about training disparities on two
new systems. Everyone received training on one of these systems, cal-
led "Iceberg," but Fobian testified that he did not receive training on
the other system, called "WolfCreek" or "Timberline." When ques-
tioned, however, Fobian could only recall one person who received
this additional training and one other person who was sent to school
for some type of training.
StorageTek contends that it was facing financial difficulties as
early as 1993. That year, employees were required to take a five or
ten percent pay cut. By May 1995 the possibility of layoffs was being
discussed. The company's Richmond office had lost accounts,
expenses were rising, and revenues were dropping. By electronic
memorandum (e-mail) dated May 31, 1995, Mechtly advised the
CSEs of these prospects. His e-mail stated, in part:
This letter is to inform each of you of StorageTek's cus-
tomer service manpower status for the Richmond Virginia
territories.
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Our area has had a declining service base over the last six
months. This service base will again be negatively impacted
by the closure of the Defense General Supply Center"data
center" planned during the next four months.
The same manpower levels for our Customer Services team
will not be needed in the immediate future. Other positions
including "Customer Service Engineer," are available within
other areas of StorageTek. The closest position is currently
available in northern Virginia as posted on the Richmond
office bulletin board and within the EMC2 Job-Openings.
Any interested candidates must meet the requirements
posted with the opening.
The discussion about the need to reduce "manpower levels" referred
to the CSEs. A hard copy of this memorandum was also distributed
to each CSE at the June 1995 CSE department meeting and delivered
to the mail slot of any CSE that did not attend that meeting. Although
Fobian and Green are listed on the memorandum as recipients, neither
of them recalls receiving a copy in any format.
Two CSEs subsequently transferred out of the Richmond area dur-
ing the late summer of 1995. Joseph Luciano, then age 40, transferred
to StorageTek's offices in Colorado. According to Mechtly, "He acted
on one of my department meetings when we discussed other jobs in
the company; put in a job bid. He was selected. I let him go out there
[to try the job] and he liked the job and he stayed." Similarly, Ralph
Sibley, then age 35, put in a job bid and transferred to the company's
MCI team in Maryland.
In September 1995 Mechtly and Duke decided that a layoff of two
CSEs in the Richmond office was necessary. The company claims
that it based its decision on annual evaluations. Mechtly performed
the annual evaluations for the Richmond office. He began by com-
pleting a written evaluation form in which he assigned each employee
a numerical score from 0-3 in each of 42 categories. This initial pro-
cess took 15 to 20 hours. After filling out the form, Mechtly reviewed
it with Duke and then met with the individual CSE. The CSE could
make short written comments on the evaluation. Fobian wrote that he
was satisfied with his 1995 review.
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To decide whom to layoff, StorageTek claims it used a "formula"
in which it weighted and averaged the aggregate scores for each
CSE's last two annual evaluations. The employees with the lowest
average aggregate scores were selected for layoff, unless a low-rated
employee possessed "special skills" that higher-rated employees did
not, in which case StorageTek might "keep the employee with special
skills." Fobian and Donald Cherry, who had the lowest aggregate
scores, were laid off in September. At the time, Fobian was the oldest
CSE and Cherry the third oldest.
In December 1995 StorageTek's regional managers instructed
Bruce Duke to lay off one more CSE in Richmond. Under the same
criteria and formula, Green now had the lowest average aggregate
score. On December 11, 1995, Mechtly advised Green of his layoff
effective thirty days later.
To challenge StorageTek's claim that it relied on the evaluations,
the employees presented the affidavit of Alan Dudek. Dudek, then age
53, worked as a CSE at a StorageTek facility in Maryland. A
management-level e-mail identifying Dudek as among those to be laid
off went out at 11:57 a.m. on September 28, 1995. Dudek states that
his supervisor, Harry Granruth, did not evaluate him until later that
afternoon. However, the evaluation form itself shows that Dudek and
Granruth signed it on September 27, 1995, the day before the e-mail
was sent.
The employees also claim that the evaluations were not a valid
means for comparing CSEs. In his deposition Mechtly stated, "CSEs
are not rated against each other. They're rated against 42 items in the
review and goal section." His deposition testimony raised some ques-
tions about the basis for the scores. For example, employees received
scores for the category covering "Parts Control--Effective mainte-
nance, control of parts, defective parts processed in a timely manner."
In evaluating this category, Mechtly did not have feedback from the
logistics person, Paul Marcus, for each CSE, and Mechtly was not
consistently present at the parts depot to observe the CSEs himself.
CSEs also received scores for "Customer Environment--Knowledge
of the customer's operations and personnel." Although these scores
were purportedly based on Mechtly's observations, he could not recall
6
whether he was ever at a customer site with Fobian in the year pre-
ceding the 1995 evaluation.
The employees also claim that it was statistically improbable that
StorageTek would terminate its three oldest CSEs within three
months, while retaining eight younger CSEs. Green submitted his
own affidavit in which he states that there is a .1 percent or 1/1000th
probability of this happening without an improper motive against age.
StorageTek's expert, Kathy Hoke, calculated the probability at 1/165
or .6 percent. In the same report, however, she also presented evi-
dence on the correlation between the CSEs' rankings by age and their
rankings according to the 1994 and 1995 aggregate evaluation scores.
She concluded that "there is no evidence of an association between
age" and evaluation scores.
On September 18, 1996, and November 7, 1996, respectively,
Fobian and Green filed complaints against StorageTek alleging that
they were selected for termination in violation of the ADEA.* On
April 7, 1997, and May 19, 1997, the district court granted
StorageTek's motions for summary judgment and dismissed the
employees' actions with prejudice and without a hearing. The
employees filed timely notices of appeal, and the cases were consoli-
dated. While the appeals were pending, the employees filed motions
in district court for relief from the judgment under Federal Rules of
Civil Procedure 60(b)(2) and (3). The employees had learned that a
number of former employees had filed an ADEA suit against Stora-
geTek in the United States District Court for the District Court of Col-
orado. On November 26, 1997, the Colorado court certified an ADEA
class action, finding that the Colorado plaintiffs had "provided signifi-
cant evidence to support their claim that defendant engaged in a pat-
tern and practice of discrimination." Because Fobian and Green's
_________________________________________________________________
*The employees initially included a claim that their layoffs violated
the public policy of Virginia as set out in the Virginia Human Rights Act,
Va. Code Ann. §§ 2.1-714-.1-725. They have dropped this claim from
their appeal. After the district court's initial decision on summary judg-
ment, the Supreme Court of Virginia held that Va. Code Ann. § 2.1-
725(D) "prohibit[s] a common law cause of action based upon the public
policies reflected in the Virginia Human Rights Act." Doss v. Jamco,
Inc., 492 S.E.2d 441, 442-43, 447 (Va. 1997).
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consolidated appeal was still pending in this court (the Fourth Cir-
cuit), the district court dismissed the Rule 60(b) motions for lack of
jurisdiction. The employees appealed the dismissal of their Rule 60(b)
motions. We held that the district court retained jurisdiction to enter-
tain the Rule 60(b) motions even though the underlying judgments
were on appeal, and we remanded this case for further proceedings.
On remand the district court concluded that it could not evaluate
the Rule 60(b) motions without reviewing documents that were under
seal or protective order in the Colorado action. On March 17, 1999,
the district court took the Rule 60(b) motions under advisement and
issued an order requesting that the Colorado court release the docu-
ments. On August 4, 1999, the Colorado court approved the limited
release of the documents which were to "remain under seal." After
conducting an in camera review of the documents, the district court
denied the Rule 60(b) motions on August 16, 1999. This appeal fol-
lowed.
II.
We review de novo the district court's decision on summary judg-
ment. See GTE South, Inc. v. Morrison, 199 F.3d 733, 745 (4th Cir.
1999). Under the ADEA it is "unlawful for an employer . . . to fail
or refuse to hire or to discharge any individual or otherwise discrimi-
nate against any individual with respect to his compensation, terms,
conditions, or privileges of employment, because of such individual's
age." 29 U.S.C. § 623(a)(1). Having conceded that there is no direct
evidence of discrimination, the employees sought to establish their
ADEA claim under the three-stage proof scheme of McDonnell
Douglas Corporation v. Green, 411 U.S. 792 (1973). See Stokes v.
Westinghouse Savannah River Co., 206 F.3d 420, 429 (4th Cir. 2000).
StorageTek has conceded that the employees established their prima
facie case, which is the first stage. Thus, this appeal concerns only the
final two stages of the McDonnell Douglas scheme.
At the second stage of the proof scheme, the burden shifts to the
employer "to produce evidence that the plaintiff was rejected, or
someone else was preferred, for a legitimate, nondiscriminatory rea-
son." Reeves v. Sanderson Plumbing Prods., Inc., No. 99-536, 2000
WL 743663, at *5 (U.S. June 12, 2000) (internal quotation marks and
8
alteration omitted). The employer's burden "is one of production, not
persuasion; it can involve no credibility assessment." Id. (internal
quotation marks omitted). The district court concluded that
StorageTek met this burden. The company offered admissible evi-
dence that it was experiencing financial difficulties and that it laid off
those employees who had the lowest evaluation scores. We agree that
StorageTek has offered a legitimate, non-discriminatory reason for
the layoff. Accordingly, we move to the third stage of the McDonnell
Douglas scheme.
At the third stage, "the sole remaining issue[is] discrimination vel
non." Id. (internal quotation marks and citation omitted). In examin-
ing a plaintiff's evidentiary burden at this third stage, the Supreme
Court recently held that "a plaintiff's prima facie case, combined with
sufficient evidence to find that the employer's asserted justification is
false, may permit the trier of fact to conclude that the employer
unlawfully discriminated." Id. at *9. The employees offered four the-
ories to show pretext. First, they claimed that the evaluation scores
were flawed. Second, they argued that it was statistically improbable
that the oldest employees would be selected for termination. Third,
they attempted to show pretext by offering evidence that StorageTek
had already begun to treat them less favorably. Finally, they presented
the affidavit of Alan Dudek, who was laid off at a StorageTek loca-
tion in another state.
The district court concluded that the first three theories failed to
establish any evidence of pretext and that Dudek's statements were
not relevant to this case. We agree with the district court's analysis.
First, although the employees may have shown that the evaluations
were an unreliable tool, they produced no evidence that the evalua-
tions were biased against older employees. Second, outside of
Green's own affidavit, the employees presented no affidavits, exhib-
its, charts, or other evidence to support their claim that it was mathe-
matically improbable that StorageTek would terminate the three
oldest employees without reference to age. In any event, we agree
with the district court that the statistical evidence "is simply too spec-
ulative to be probative." Fisher v. Asheville-Buncombe Technical Col-
lege, 857 F. Supp. 465, 470 (W.D.N.C. 1993). Third, Fobian
produced no evidence to support his assumption that he should have
been given primary responsibility on his new shift after his March
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1995 transfer. Nor did Fobian assert that the job paid less or that the
position was viewed as a demotion. And, Green produced no evidence
that StorageTek's reason for removing him from the management
training program was pretextual. Fobian's testimony regarding other
training opportunities was too speculative to create an issue of fact.
Finally, because Dudek worked at a facility in a different state and
had a different supervisor, the district court correctly concluded that
his affidavit was not relevant to the employees' allegations regarding
the Richmond facility. Accordingly, we conclude that the district
court correctly analyzed the employees' proof under the McDonnell
Douglas scheme.
III.
We review the district court's decision on the Rule 60(b) motion
for abuse of discretion. See McLawhorn v. John W. Daniel & Co.,
Inc., 924 F.2d 535, 538 (4th Cir. 1991). "Under all the provisions of
Rule 60(b), a threshold condition for granting the relief is that the
movant demonstrate that granting that relief will not in the end have
been a futile gesture, by showing that she has a meritorious defense
or claim." Boyd v. Bulala, 905 F.2d 764, 769 (4th Cir. 1990). After
reviewing the Colorado documents in camera, the district court deter-
mined that the employees could not make this threshold showing; the
Colorado documents did not provide evidence that StorageTek's rea-
son for laying off Fobian and Green was pretextual. We have inde-
pendently reviewed the documents and find no error in the district
court's decision. Accordingly, we affirm on the reasoning of the dis-
trict court on this issue.
IV.
Finally, the employees argue for the first time on appeal that by
conducting an in camera review, the district court limited their access
to discovery materials and thus denied them the right to a fair trial.
We note that the Supreme Court has held that a criminal defendant's
constitutional right to a fair trial "can be protected fully by requiring
that the [protected documents] be submitted only to the trial court for
in camera review." Pennsylvania v. Ritchie , 480 U.S. 39, 60 (1987);
see also United States v. Trevino, 89 F.3d 187, 190 (4th Cir. 1996)
(noting that the "court conducts its examination in private because the
10
Constitution does not accord an accused the right of unrestricted
access to the government's files"). We have also held in the civil con-
text that a trial court did not abuse its discretion by examining docu-
ments in camera. The in camera inspection "balanc[ed] the risks of
broader discovery . . . against the limited potential for revelation of
useful information." In re ASI Reactivation, Inc., 934 F.2d 1315, 1324
(4th Cir. 1991). In any event, the employees did not preserve this
issue for appeal. "Generally, we will not consider an issue raised for
the first time on appeal, and [the employees have] not suggested any
reason why we should depart from our ordinary rule in this case."
Grossman v. Commissioner of Internal Revenue, 182 F.3d 275, 281
(4th Cir. 1999) (internal citation omitted).
V.
Having reviewed the record and the district court's decisions, we
find no reversible error. We therefore affirm the grant of summary
judgment to StorageTek and the denial of the employees' Rule 60(b)
motions.
AFFIRMED
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