Donald Aldridge v. City of Memphis ( 2010 )

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 10a0756n.06
No. 08-6046
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
DONALD ALDRIDGE, NORMA JULIE BARROW, )
CLAUDETTE BOYD, WALTER CARVER, ) FILED
KENNETH CONNATSER, CHARLES FREEMAN, ) Dec 14, 2010
JAMES HOLLAND, JAMES HOLMES, RICKY ) LEONARD GREEN, Clerk
HUTCHESON, LARRY JACKSON, JAMES JONES, )
JR., ERNEST LANCASTER, RICHARD MILLEN, )
BERTHA NELSON, DAVID O’BRYAN, GEORGE )
OLIVE, CHAM PAYNE, ALAN PENDLETON, )
WILLIAM PHILLIPS, WILLIAM PORTER, DAVID ) On Appeal from the United States
ROBERTSON, ROBERT STONE, ROY THOMAS, ) District Court for the Western
LENNEL TORRANCE, MIKE WAGNER, and ) District of Tennessee
TOMMY WOODS, )
)
Plaintiffs-Appellants, )
)
v. )
)
CITY OF MEMPHIS and LARRY GODWIN in his )
individual capacity, )
)
Defendants-Appellees. )
Before: BOGGS, MOORE, and GIBSON, Circuit Judges.*
BOGGS, Circuit Judge. Plaintiffs, 26 former captains in the Memphis Police Department
(“Department”), appeal from the district court’s grant of summary judgment. This action arose when
the Department abolished the rank of captain and, without a hearing, demoted all then-captains to
their former ranks. A subset of the demoted captains filed suit against the City of Memphis (“City”)
*
The Honorable John R. Gibson, United States Circuit Judge for the Eighth Circuit, sitting
by designation.
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and the Department’s Director, Mike Godwin (“Godwin”), alleging breach of contract and violations
of the Due Process Clause, Equal Protection Clause, Title VII of the Civil Rights Act of 1964 (“Title
VII”), 42 U.S.C. § 1981, the Age Discrimination in Employment Act (“ADEA”), and the Tennessee
Human Rights Act (“THRA”); against Godwin, plaintiffs also alleged tortious interference with their
employment relationship. The district court granted summary judgment for the defendants on all
claims. Reviewing de novo, see Petty v. County of Franklin, Ohio, 478 F.3d 341, 345 (6th Cir.
2007), we affirm.
BACKGROUND
The genesis of this dispute occurred in 1927, when a section was inserted into the City’s
charter (“Charter”) providing:
Automatic Promotion to captain after thirty years.
Any fireman or policeman, who shall have served the City of Memphis for a period
of thirty (30) years, either continuously or intermittently, shall, at the expiration of
said thirty years, automatically be promoted to the rank of captain of the fire division
or captain of the police division, with all the salary, emoluments and other privileges
of said rank; and, upon the retirement of such fireman or policeman, he shall receive
a pension as captain.
City Charter § 67 (Priv. Acts 1927, Ch. 521; Ord. No. 2725, § 1, 5-23-78) (“§ 67”).1 For much of
the Department’s modern history, captain was the second-highest civil-service rank in its hierarchy.
The only rank above captain was inspector; below captain, in descending order, came the ranks of
lieutenant, sergeant, and finally, patrol officer. Generally, officers were promoted through the ranks
1
In 1978, additional language was added to the Charter eliminating automatic promotion
for employees hired after January 31, 1979. As plaintiffs were all hired before that date, the Charter
amendment has no effect on them.
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one step at a time on the basis of competitive testing. Under § 67, however, any officer completing
30 years of service was immediately promoted to captain, regardless of how far he or she had
progressed through the ranks and regardless of the skills he or she had attained. Consequently, some
captains held that rank on the basis of testing (“merit captains”), while others held that rank solely
on the basis of length of service (“tenure captains”).
It is undisputed that, in prior years, the Department has had legal difficulties with respect to
the hiring of African-Americans and women. Until 1948, the Department did not hire a single
African-American officer. In 1974, the United States sued the City, alleging that the Department
utilized discriminatory hiring and promotional tests; the City admitted in a binding stipulation that
historically, minorities had “been excluded from or limited in hiring and promotional opportunities
within its police department.” Consequently, the City entered into a consent decree to remedy the
underrepresentation of African-Americans and females in the Department’s ranks. The first African-
American officer did not achieve 30 years’ tenure and promotion to captain under § 67 until 1981,
and the first female, until 1988.
In 1991, the Department gave merit captains the new title of “major” to distinguish them
from tenure captains, leaving only the latter with the title “captain.” After this redesignation, captain
and major were considered parallel ranks in the Department’s hierarchy, both above lieutenant but
below inspector. Both captains and majors received the same salary and pension benefits. Both
were eligible to compete for merit-based promotion to inspector.
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In 2004, the first of the cohort of black and female officers hired under the 1974 consent
decree completed thirty years of service. Consequently, the number of black and female captains
climbed rapidly.
In August of that year, Godwin, a white male and long-time officer with the Department,
became its new Director. As one of his first tasks, Godwin instructed Deputy Chief Jim Tusant to
examine how the tenure-based captain rank squared with the Department’s organizational needs.
Tusant determined that, although captains were paid the same salary as majors, the majority of
captains were performing tasks typical of lower-ranked (and lower-paid) officers, including
lieutenants, sergeants, and even patrol officers, the entry-level rank.2 Based on this, Godwin
concluded that the captain rank was inefficient and “operationally unnecessary.” Although no formal
budgetary analysis was conducted, Godwin estimated that eliminating the rank of captain and
reverting captains to the ranks they had held before their automatic promotion would save the
Department approximately $1.4 million.3
On February 18, 2005, Godwin assembled the captains and told them, “[T]he city’s in the
midst of a serious financial situation. In order for the city to have funds to meet payroll and its
obligations, spending must be significantly reduced.” He then announced that the captain rank
would be eliminated. Then-captains were given the choice to retire or revert to their rank and salary
2
There is no dispute, however, that the captains were all performing those duties
satisfactorily.
3
The annual salary differential between captains and lieutenants was $8,046.27; between
captains and sergeants, $12,907.65; and between captain and patrol officers, $17,802.93.
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prior to their automatic promotion. Those who chose to stay on in their former rank would be
eligible to participate in the next promotional process alongside the other employees of that rank.
Regardless of his or her choice, upon retirement – at that time, or in the future – each then-captain
would receive all pension benefits to which captains had been theretofore entitled.
None of the captains had an express written or oral employment contract. Before the rank
was abolished, the Department had never terminated, demoted or suspended a captain without just
cause or expressly informed captains that they could be terminated, demoted or suspended without
cause. However, in 1988, the City had eliminated the tenured captain rank in the Memphis Fire
Department (which had also been governed by § 67) and terminated all but one of the employees
holding that rank.
Days after the captain rank was abolished, the Department temporarily promoted
approximately 52 sergeants to “acting lieutenant.” The Department had already been short 50-60
lieutenants prior to these events. None of those appointed acting lieutenants were newly demoted
ex-captains. In June 2005, the acting lieutenant assignments were rescinded; the Department then
permanently promoted 120 sergeants to lieutenant and 49 lieutenants to major. This round of
promotions had been planned independently of, and prior to, the decision to eliminate the captain
rank, as the department had a serious shortage of lieutenants and majors.4
4
The parties do not address whether any of those permanently promoted in June 2005 to
lieutenant or major were ex-captains. Plaintiffs do not assert a separate “failure to promote” claim
based on these subsequent actions.
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Notwithstanding Godwin’s statements at the February 18, 2005 meeting, the City’s Chief
Administrative Officer (“CAO”) testified that in February 2005, the City was not in danger of failing
to meet its payroll and that eliminating the rank of captain was not necessary to meet payroll.
Additionally, Godwin testified at his deposition that the Department would have had a budget
surplus even if the captain rank had not been abolished. However, the CAO did testify that the City
had “organizational financial challenges” at the time, that the City needed to reduce spending to
increase its reserve fund, and that “during that time period . . . all [City] divisions were asked to
reduce their budget . . . .”
At the time of Godwin’s announcement, the 93 captains had an average age of 56.52; of
necessity, each was older than 40. By comparison, the average age of the majors – the most
comparable group of officers in terms of salary and prestige – was 52.16 (or 4.36 years younger than
the average captain). Plaintiffs’ own statistical expert testified that the majors “were basically the
same age distribution as [the] captains” and that, though “[t]hey were slightly younger, . . . there
wouldn’t have been a statistical difference.”5 Of all the Department’s employees over age 40,
11.25% were impacted by the decision to abolish the rank of captain; by contrast, of the employees
below age 40, none were impacted.
At the time the rank was abolished, a majority of the captains were Caucasian (59.1%, versus
40.9% African-American) and a supermajority were male (94.6%, versus 5.4% female). Of the 60
5
While ranks other than major are less comparable to the captain rank, the average ages of
the remaining civil-service ranks were: patrol officer, 36.23; sergeant, 42.39; lieutenant, 46.51, and
inspector, 57.77.
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black tenure captains in the Department’s history, 45% had attained that rank in the nine months
immediately before the rank was abolished. Meanwhile, 71% of the seven female tenure captains
in the Department’s history had attained that rank since 2002.
The record is devoid of evidence that Godwin or any other City or Department employee
displayed explicit animus toward any protected class. However, there is evidence that Godwin made
rude or derogatory remarks about individual captains and about the captain rank in general. On one
occasion in 1998, he told a colleague, “[T]hose goddamn Captains need to die. They are ruining the
police department. They need to go.”6 At other times, he remarked that captains were unable to
“pour piss out of a boot,” that captains were “worthless pieces of shit,” and that there were not more
than a “handful of captains” in the Department “worth a damn.” At one captain’s promotion
ceremony, Godwin told a co-worker, “I don’t know nothing about this woman, but she hung around
here 30 years.” While the record does not reflect the dates on which Godwin made most of these
remarks, it is clear that at least two of them predate the 2004 spike in the number of African-
American and female captains.
On December 27, 2005, 26 demoted captains filed suit against the City and Godwin. Sixteen
of the plaintiffs are white males, seven are black males, two are black females and one is a white
female. All 26 plaintiffs alleged (1) that the abolition of the captain rank without a pre-deprivation
hearing violated the Due Process Clause; (2) that it lacked a rational basis and/or was motivated by
6
Plaintiffs do not argue that Godwin’s “Captains need to die” remark was an oblique
reference to the captains’ age. Nor, in this context, would such an assertion be plausible. Godwin
himself was 53.37 years of age at the time – scarcely younger than the average captain.
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“animus against captains” in violation of the Equal Protection Clause; (3) that it constituted
disparate-treatment and disparate-impact discrimination on the basis of age in violation of the ADEA
and THRA; (4) that it breached the City’s employment contract with plaintiffs and its contractual
duty of good faith and fair dealing; and (5) that Godwin had tortiously interfered with those
contractual relationships. The African-American plaintiffs also argued (6) that the abolition
constituted disparate-treatment race discrimination in violation of the Equal Protection Clause, Title
VII, 42 U.S.C. § 1981, and the THRA; and the female plaintiffs argued (7) that it constituted
disparate-treatment sex discrimination in violation of the Equal Protection Clause, Title VII, and the
THRA.
In a series of orders culminating on August 13, 2008, the district court granted summary
judgment in defendants’ favor as to all claims and dismissed the action. Plaintiffs timely appealed.
DISCUSSION
I. Due Process
Plaintiffs argue that their demotion without a pre-deprivation hearing deprived them of a
property interest without due process.
“The requirements of procedural due process apply only to the deprivation of interests
encompassed by the fourteenth amendment’s protection of liberty and property.” Bd. of Regents v.
Roth, 408 U.S. 564, 569 (1972). “Such interests do not arise from the Constitution itself, but rather,
‘are created and their dimensions . . . defined by existing rules or understandings that stem from an
independent source . . . .’” Woolsey v. Hunt, 932 F.2d 555, 564 (6th Cir. 1991) (quoting Roth, 408
U.S. at 577). Such independent sources include state statutes and regulations, explicit contractual
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guarantees, or even “agreements implied from ‘the [defendants’] words and conduct in the light of
the surrounding circumstances . . . .’” Ibid. (quoting Perry v. Sindermann, 408 U.S. 593, 602
(1972)); see also Bishop v. Wood, 426 U.S. 341, 344 (1976).
Thus, plaintiffs’ due process claim “hinges on whether anything in Tennessee statute,
common law, or regulation creates [a property] interest” in their continued employment as captains.
Lisle v. Metro. Gov’t of Nashville, 73 F. App’x 782, 785 (6th Cir. 2003). As a baseline, “Tennessee
has long recognized the doctrine of employment at will, with the mutual right of either party to
terminate such a relationship with or without cause.” Id. at 786 (quoting Brown v. City of Niota, 214
F.3d 718, 720 (6th Cir. 2000)). Thus, plaintiffs’ asserted property interest turns on the existence of
some statute, regulation, or agreement that varies this background rule.
A. Section 67 of the Memphis City Charter
First, plaintiffs argue that § 67 of the Charter, which entitles officers with 30 years’ service
to “the rank of captain[,]” “all the salary, emoluments and other privileges of said rank[,]” and “a
pension as captain,” creates a property interest in their continued employment as captains. While
this is not a facially implausible reading of § 67, the Tennessee state courts have repeatedly held to
the contrary. See Dunlap v. City of Memphis, No. W2003-02649-COA-R3-CV, 2004 Tenn. App.
LEXIS 738, at *12 (Tenn. Ct. App. Nov. 12, 2004) (“[Section 67] is a guarantee that officers with
thirty years of service can retire at the rank of Captain, with pension benefits of a Captain, but [it]
provides no guarantee of employment beyond the automatic promotion.” (emphasis in original));
Posey v. City of Memphis, 23 S.W.3d 332, 335 (Tenn. Ct. App. 2000) (“[T]he automatic promotion
provision of Section 67 [is] purely a retirement tool. . . . [It guarantees] no automatic benefit if
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employment is continued after thirty years.”); Burrell v. City of Memphis, No. 29, 1989 Tenn. App.
LEXIS 544, at *3 (Tenn. Ct. App. Aug. 16, 1989) (“[W]hile Section 67 of the Charter provide[s] for
automatic promotion to captain [after] thirty years of service as well as a captain’s pension upon
retirement, the section [does] not require the City to continue employment of the plaintiffs for any
length of time.”).
While we are not bound by these cases, “[w]e will accept the holding of a state intermediate
appellate court with respect to state law unless we determine the highest court of the state would
decide otherwise.” United States v. Philp, 460 F.3d 729, 732 (6th Cir. 2006). We see no reason to
believe that the Tennessee Supreme Court would reject this twenty-year-old line of cases.
Accordingly, we agree with the district court that the abolition of the captain rank did not derogate
from any property interest guaranteed by § 67.7
B. Section 246 of the Memphis City Charter
Next, plaintiffs argue that the abolition of the captain rank violated a property interest secured
by § 246 of the Charter, which provides that “[t]he City may terminate, suspend, or demote an
employee for just cause . . . .” Plaintiffs are correct that “[s]tatutes providing that [public] employees
cannot be discharged or demoted without cause . . . give the employee a protected property interest
in continued employment” cognizable under the Due Process Clause. Williams v. Comm. of
7
On the other hand, as interpreted by the Tennessee courts, § 67 clearly does give plaintiffs
a protected property interest in their captain-level pension benefits. However, plaintiffs’ pensions
were not affected by the abolition of the captain rank.
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Kentucky, 24 F.3d 1526, 1537-38 (6th Cir. 1994). However, we agree with the district court that
§ 246 is simply inapplicable to terminations or demotions for other-than-disciplinary reasons.
Section 246 falls under Article 34 of the City Charter, which creates and empowers the City’s
Civil Service Commission (“Commission”). That § 246 is found under this Article implies that its
“just cause” language must be interpreted in light of the purpose and jurisdiction of the Commission,
which is “to review disciplinary actions . . . .” Charter § 245; see also City of Memphis v. Civil Serv.
Comm’n, 1985 Tenn. App. LEXIS 3244, at *5 (Tenn. Ct. App. Nov. 19, 1985) (“[T]he Commission
does not have jurisdiction to review non-disciplinary employee terminations by the City.”). It would
be illogical to conclude that the drafters of § 246 intended its “just cause” language to create a free-
standing property interest that the Commission could not enforce. Furthermore, immediately
following the “just cause” language at issue, § 246 states that “[e]numeration of the above-stated
disciplinary actions [i.e., termination, suspension, or demotion], which are reviewable by the
[C]ommission, shall not be construed as a limitation on powers of the City to impose other less
stringent disciplinary measures which shall not be appealable to the [C]ommission” (emphasis
added). This proviso strongly suggests that section’s “just cause” language is inapplicable to non-
disciplinary personnel actions. We therefore hold that any property interest created by § 246 is not
abridged by non-disciplinary personnel actions such as the one at issue here.
C. Implied Contract
Finally, plaintiffs argue that the City’s course of conduct – specifically, the Department’s past
practice of allowing all captains to retain that rank until they chose to retire, were promoted, or were
terminated for cause – gave rise to a property interest in the form of an implied contract of continued
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employment. While the Supreme Court has recognized that a property interest in continued
employment can be created by “agreements implied from the [employer’s] words and conduct in the
light of the surrounding circumstances,” Perry, 408 U.S. at 602 (internal quotation marks omitted),
it has emphasized that “the sufficiency of [such a] claim of entitlement must be decided by reference
to state [contract] law.” Bishop, 426 U.S. at 344; see also Perry, 408 U.S. at 602 n.7 (“If it is the
law of Texas that a teacher in the respondent’s position has no [implied contractual] claim to job
tenure, the respondent’s claim would be defeated.”).
Under Tennessee contract law, a contractual interest in continued employment will not be
inferred on behalf of an at-will employee from an employer’s conduct absent a “show[ing] that the
agreement . . . was supported by adequate consideration [other than the employee’s past services],
that there was a mutual assent to the terms of the agreement and that it was sufficiently definite to
be enforceable.” Price v. Mercury Supply Co., Inc., 682 S.W.2d 924, 933 (Tenn. Ct. App. 1984)
(holding that employer’s statement that otherwise at-will employee “would never have to worry
about employment because of the service he had rendered to the company in the past” did not create
enforceable expectation of continued employment); see also White v. Fort Sanders-Park West Med.
Ctr., No. E2006-00330-COA-R3-CV, 2007 WL 241024, at *3 (Tenn. Ct. App. Jan. 29, 2007). Here,
as the district court properly noted, “[p]laintiffs have offered no evidence of consideration for the
implied contract beyond their services, for which they were undisputedly paid.” Aldridge v. City of
Memphis, No. 05-2966 B, 2007 WL 4570881, at *5 (W.D. Tenn. Dec. 27, 2007).
Furthermore, background circumstances establish that no mutual understanding of life tenure
could reasonably have existed here. Although neither party cites it, we take judicial notice that the
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Memphis City Code contains a section providing that the “[s]ervices of any employee may be
terminated when the necessity for his or her job or position no longer exists or when funding is no
longer available . . . .” City Code § 3-8-7 (2007) (formerly § 9-41(1985)). Moreover, it is
undisputed that, over twenty years ago, the City eliminated the tenured captain rank in its Fire
Department, which was governed by the same charter provision, and outright terminated all but one
of the officers holding that rank. See Burrell, 1989 Tenn. App. LEXIS 544, at *4-*5.
Accordingly, no implied contract exists under Tennessee law, and thus, there is no property
interest protected by the Due Process Clause.8
II. Race and Sex Discrimination
Plaintiffs assert that the decision to eliminate the captain rank constituted intentional
disparate treatment on the basis of race and sex.9 Where, as here, no direct evidence of
discrimination exists, disparate-treatment race- and sex-discrimination claims are analyzed using the
8
Before the trial court, plaintiffs asserted a state-law breach-of-implied-contract claim
against the City in addition to their due-process claim based on implied contract. Plaintiffs have not
argued their independent contract claim on appeal; accordingly, it is waived. See United States v.
Phinazee, 515 F.3d 511, 520 (6th Cir. 2008). Even if they had pursued their contract claim,
however, it would fail for these same reasons.
9
Plaintiffs’ claims under the Equal Protection Clause, 42 U.S.C. § 1981, Title VII, and the
THRA are analyzed identically. See Miller v. City of Canton, 319 F. App’x 411, 419 (6th Cir. 2009);
Madden v. Chattanooga City Wide Serv. Dep’t, 549 F.3d 666, 673 (6th Cir. 2008); Gutzwiller v.
Fenik, 860 F.2d 1317, 1325 (6th Cir. 1988). We note that 42 U.S.C. § 1981 proscribes intentional
racial discrimination in “the making, performance, modification, and termination of contracts, and
the enjoyment of all benefits, privileges, terms, and conditions of the contractual relationship.” 42
U.S.C. § 1981(b) (emphasis added). District courts in this circuit have held that at-will employees
in Tennessee possess a “contract” for purposes of § 1981. See Henry v. Trammell Crow SE, Inc.,
34 F. Supp. 2d 629, 635 (W.D. Tenn. 1998). We assume arguendo that this is the case.
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well-known McDonnell Douglas proof structure. Upshaw v. Ford Motor Co., 576 F.3d 576, 584
(6th Cir. 2009) (citing McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802 (1973)). We assume,
without deciding, that plaintiffs are able to make out a prima facie case of race and sex
discrimination under McDonnell Douglas.
Once a prima facie case of discrimination is established, the employer “must articulate a
legitimate non-discriminatory reason” for the employment decision. Upshaw, 576 F.3d at 585. “This
is merely a burden of production, not of persuasion, and it does not involve a credibility assessment.”
Ibid. The burden that shifts to the defendant, therefore, is to rebut the presumption of discrimination
by producing “admissible evidence of a legitimate, nondiscriminatory reason” for the elimination
of the captain position. Blair v. Henry Filters, Inc., 505 F.3d 517, 524 (6th Cir. 2007). Defendants
submit that the captain rank was eliminated because it was “not operationally necessary” and
“superfluous” – i.e., captains were paid a major’s salary while many performed the duties of
employees as many as three ranks lower and who earned as much as $17,802.93 less per year.
Appellees’ Br. at 37-39. Thus, defendants have met their burden of production by establishing a
nondiscriminatory reason for terminating the captain position, Blair, 505 F.3d at 524, and “the
mandatory presumption of discrimination created by the prima facie test drops from the case.”
Lindsay v. Yates, 578 F.3d 407, 421 (6th Cir. 2009) (internal quotation marks omitted).
If the employer carries its burden, “the plaintiff must identify evidence from which a
reasonable jury could conclude that the proffered reason is actually a pretext for unlawful
discrimination.” Blair, 505 F.3d at 524. “A plaintiff may establish that an employer’s stated reason
for its employment action was pretextual by showing that the reason (1) had no basis in fact, (2) did
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not actually motivate the challenged conduct, or (3) is insufficient to explain the challenged
conduct.“ Upshaw, 576 F.3d at 586. “The plaintiff must produce sufficient evidence from which
the jury could reasonably reject [the defendants’] explanation and infer that the defendants
intentionally discriminated against him.” Ibid. (internal quotation marks omitted) (alteration in
original); see also St. Mary’s Honor Ctr. v. Hicks, 509 U.S. 502, 511 (1993) (“[R]ejection of the
defendant’s proferred reasons will permit the trier of fact to infer the ultimate fact of intentional
discrimination” but does not “compel[]” a finding of discrimination.).
To show that defendants’ asserted rationale was a pretext for discrimination, plaintiffs first
argue that there was “no study that concluded the captain rank caused any inefficiency in police
operations” and “no report or study that showed how abolishing the rank . . . could produce any
savings for the City.” Appellants’ Br. at 37-38, 43. However, there is no dispute that many (if not
most) captains drew salaries out of proportion to the job duties that they actually performed. It does
not take a formal study to draw a permissible conclusion that this was inefficient; “[t]he decisional
process used by the employer [need not] be optimal [nor must it leave] no stone unturned.”
Haughton v. Orchid Automation, 206 F. App’x 524, 532 (6th Cir. 2006) (quoting Smith v. Chrysler
Corp., 155 F.3d 799, 806 (6th Cir.1998)) (second and third alterations in Haughton); accord EEOC
v. Horizon/CMS Healthcare Corp., 220 F.3d 1184, 1198 (10th Cir. 2000) (“[T]he failure to conduct
a formal study of the benefits realized by [an employment practice], standing alone, does not
undermine Defendant’s assertion that it had a good-faith belief the [practice] reduced . . . costs.”).
The absence of a formal cost-cutting study does not provide sufficient evidence from which a jury
could infer that the defendants discriminated against the captains on the basis of race or sex.
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Plaintiffs also allege that defendants’ current justification of the abolition – that the rank was
“operationally unnecessary” – is inconsistent with Godwin’s initial statement upon announcing the
abolition that the City was “in the midst of a serious financial situation” and that “[i]n order for the
City to have funds to meet payroll and its obligations, spending [had to] be significantly reduced.”
We have held that “[a]n employer’s changing rationale for making an adverse employment decision
can be evidence of pretext” because “[s]hifting justifications over time calls the credibility of those
justifications into question.” Cicero v. Borg-Warner Auto., Inc., 280 F.3d 579, 592 (6th Cir. 2002).
However, “[t]he extent to which such shifting justifications are probative of pretext depends upon
the circumstances of a given case” and the magnitude of the inconsistency. Eades v. Brookdale
Senior Living, Inc., No. 08-6549, 2010 WL 3927246, at *5 (6th Cir. Sept. 22, 2010) (unpublished
opinion) (citing Chen v. Dow Chem. Co., 580 F.3d 394, 400 n.4 (6th Cir. 2009)); Here, whether the
asserted explanation is a “serious financial situation” requiring cost-cutting or a mere desire to
eliminate financial inefficiency, the unnecessary expense of the captains’ salaries has always been
at issue. Thus, the City has consistently justified the changes on the grounds of efficiency.
Relatedly, plaintiffs point to evidence that Godwin’s statement that the City was in danger
of failing to meet payroll was false. As plaintiffs note, the City’s CAO testified that there was
actually no danger of failing to meet payroll, and Godwin himself testified that the Department
would have had a budget surplus even if the rank had not been abolished. However, the CAO also
testified that the City had “organizational financial challenges” at the time, that the City needed to
reduce spending to increase its reserve fund, and that “during that time period . . . all [City] divisions
were asked to reduce their budget . . . .” Thus, while the evidence certainly allows the inference that
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Godwin, to save face, exaggerated the budgetary pressures that led him to make his decision,
plaintiffs have not produced evidence from which a reasonable jury could conclude that illegal
motivations more likely explained the elimination of the captain rank. Blair, 505 F.3d at 533 n.15.
See Gatch v. Milacron, Inc., 111 F. App’x 785, 791 (6th Cir. 2004) (“[E]ven if the [reduction in
force] was not entirely necessary from a business standpoint, . . . [t]his evidence simply does not
permit a finding that . . . discrimination rather than business judgment motivated [it] . . . .”); see also
Schuster v. Lucent Techs., Inc., 327 F.3d 569, 577-78 (7th Cir. 2003) (“Even accepting that [the
employer] may have at times over-defended its decision, we believe that its overall account is
substantially consistent with that of a company seeking to reduce costs . . . .”).10
Accordingly, the district court’s grant of summary judgment to defendants with respect to
plaintiffs’ race- and sex-discrimination claims was proper.
III. Age Discrimination
Under the ADEA, it is unlawful for an employer
(1) to fail or refuse to hire or to discharge any individual or otherwise discriminate
against any individual with respect to his compensation, terms, conditions, or
privileges of employment, because of such individual’s age; [or]
10
Plaintiffs insisted at oral argument that defendants’ cost-saving explanation cannot be
believed because the Department conducted a round of merit-based promotions to lieutenant and
major shortly after the captain rank was abolished. However, it is undisputed that there was a serious
pre-existing shortage of lieutenants and majors before the abolition. While the Department’s decision
to make these promotions may be further evidence that the Department was not on the brink of
insolvency, its choice to incur operationally necessary expenses does not imply that the abolition of
the captain rank was not motivated by cost-saving considerations. Plaintiffs’ argument is akin to
suggesting that an individual’s choice to forego dessert with his meal could not have been motivated
by weight-loss considerations because he ate something rather than fasting completely.
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(2) to limit, segregate, or classify his employees in any way which would deprive or
tend to deprive any individual of employment opportunities or otherwise adversely
affect his status as an employee, because of such individual’s age . . . .
29 U.S.C. § 623(a). The first clause above has been interpreted as proscribing intentional disparate
treatment on the basis of age, Hazen Paper Co. v. Biggins, 507 U.S. 604, 609 (1993), while the
second clause has been interpreted as proscribing facially neutral employment practices with a
disparate impact based on age, Smith v. City of Jackson, Miss., 544 U.S. 228, 240 (2005). Plaintiffs
allege both forms of age discrimination.11
A. Disparate Treatment
A plaintiff may establish disparate treatment in violation of the ADEA by either direct or
circumstantial evidence. Geiger v. Tower Auto., 579 F.3d 614, 620 (2009). Plaintiffs argue that the
district court erred by finding a lack of direct evidence of age discrimination. Specifically, plaintiffs
argue, defendants admitted that “every employee holding the Captain rank had to be over age 40”
by virtue of the 30-year service requirement. Appellants’ Br. at 51. This, however, is not direct
evidence of intent to discriminate based on age.
“Direct evidence of discrimination is that evidence which, if believed, requires the
conclusion that unlawful discrimination was at least a motivating factor in the employer’s actions.”
Ibid. (emphasis added); see also Nguyen v. City of Cleveland, 229 F.3d 559, 563 (6th Cir. 2000)
(stating that “a facially discriminatory employment policy or a corporate decision maker’s express
11
“We apply the same analysis to [plaintiffs’] discrimination claims brought under the
THRA as to [their] claims brought under . . . the ADEA.” Jones v. Memphis Light, Gas and Water
Div., No. 08-6212, 2009 WL 2974888, at *4 (6th Cir. Sept. 17, 2009).
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statement of a desire to remove employees in the protected group is direct evidence of discriminatory
intent.”). The Supreme Court has made clear that “there is no disparate treatment under the ADEA
when the factor motivating the employer is some feature other than the employee’s age” and that
such factors include “an employee’s pension status or seniority, that is empirically correlated with
age.” Hazen Paper, 507 U.S. at 608-09; see also Kentucky Ret. Sys. v. EEOC, 128 S. Ct. 2361, 3270
(2008). Captain status is an age-correlated factor. Plaintiffs’ asserted “direct evidence” does not
“require[] the conclusion” that age, rather than captain status itself, motivated the decision to abolish
the rank.
Plaintiffs’ disparate-treatment age-discrimination claim must therefore be proved, if at all,
using the McDonnell Douglas proof structure. Geiger, 579 F.3d at 622.12 However, as discussed
above, even assuming for the sake of argument that plaintiffs can make out a prima facie case under
McDonnell Douglas, defendants have asserted a legitimate non-discriminatory reason, and plaintiffs
have not adduced sufficient evidence of pretext. Accordingly, plaintiffs’ disparate-treatment age-
discrimination claim was properly dismissed.
B. Disparate Impact
12
As we noted in Geiger, the Supreme Court in Gross v. FBL Financial Services, Inc., 129
S.Ct. 2343 (2009), rejected an evidentiary framework that shifts the burden of persuasion to the
defendant-employer in ADEA disparate treatment claims, which this circuit had applied to claims
based on direct evidence. Geiger, 579 F.3d at 621. However, the Gross Court expressly declined
to decide whether the separate McDonnell Douglas burden-shifting framework applies to the ADEA.
Geiger, 579 F.3d at 622. Because this circuit has “long found the McDonnell Douglas framework
useful in analyzing circumstantial evidence of ADEA claims,” and because Gross did not clearly
proscribe this practice, we apply it here. Ibid.- 19 -
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“[W]hen bringing a disparate impact claim [under the ADEA], plaintiffs need not show that
a defendant intended to discriminate, but must instead prove that a particular employment practice,
although neutral on its face, has produced a significant adverse effect on [older workers] . . . .”
Kovacevich v. Kent State Univ., 224 F.3d 806, 830 (6th Cir. 2000). “The plaintiff must first establish
a prima facie case by identifying and challenging a specific [facially neutral] employment practice,
and then show an adverse effect by offering statistical evidence of a kind or degree sufficient to show
that the practice in question has caused the adverse effect in question.” Ibid. (internal quotation
marks omitted). The ADEA’s disparate-impact coverage is “significantly narrow[er]” than Title
VII’s, as the ADEA “provides that it shall not be unlawful for an employer ‘to take any action [with
a disparate impact on older workers] . . . where the differentiation is based on reasonable factors
other than age [(“RFOA”)] . . . .” Smith, 544 U.S. at 238. “[O]nce a plaintiff has satisfied [the prima
facie burden], the burden of persuasion shifts to the employer to show that the practice is supported
by a RFOA.” Allen v. Highlands Hosp. Corp., 545 F.3d 387, 404 (6th Cir. 2008).
Once again, we assume for the sake of argument that plaintiffs can establish a prima facie
case of disparate impact under the ADEA – i.e., that the elimination of the captain rank is a facially
neutral employment practice with a disparate impact based on age.13 Even so, plaintiffs’ disparate-
13
Defendants argue that plaintiffs have not identified a valid “employment practice” because
the abolition of the captain rank targeted only a specific subgroup of employees instead of being
“applied across the workforce . . . .” Appellants’ Br. at 50-51. The district court agreed, although
it cited in support only one out-of-circuit case, EEOC v. Allstate Insurance Co., 528 F.3d 1042 (8th
Cir. 2008), which was vacated upon the grant of rehearing en banc. The EEOC has filed an amicus
brief arguing that the district court’s interpretation of Allstate is incorrect. Because resolution of this
question is not necessary to the disposition of this case, we take no position on it.
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impact age-discrimination claim cannot prevail because defendants have met their burden of
demonstrating that the practice is supported by an RFOA. Allen, 545 F.3d at 404. The RFOA
inquiry is one of reasonableness. See Smith, 544 U.S. at 243 (“Unlike the business necessity test
[under Title VII’s disparate-impact branch], which asks whether there are other ways for the
employer to achieve its goals that do not result in a disparate impact on a protected class, the
reasonableness inquiry [under the ADEA] includes no such requirement”). As the district court
found, there is no genuine issue of material fact as to the reasonableness of the factors other than age
offered by the defendants to explain the disparate impact.
Here, once again, defendants have adduced evidence showing that the employment action
was based on the inefficiency of paying the captains more (in some cases, tens of thousands of
dollars more) than patrol officers, sergeants, or lieutenants to perform the very same duties those
lower-ranked officers performed. We recently held that the “terminat[ion of] employees based on
seniority to facilitate the hiring of new, less costly employees” qualified as an RFOA. Allen, 545
F.3d at 405. That being the case, demoting employees of a particular seniority status for cost-saving
and operational considerations surely qualifies as well. Whether there were more logical or less
disruptive ways for the Department to increase its operating efficiency is beside the point. Smith,
544 U.S. at 243.
IV. Residual Equal-Protection Claim
In addition to asserting more traditional equal-protection claims based on their membership
in protected classes, which we have already addressed, plaintiffs argue that the abolition of the
captain rank fails even rational-basis review under the Equal Protection Clause because defendants’
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decision to single out the captains for demotion was “wholly arbitrary and irrational,” Am. Compl.
¶ 65, and/or “motivated by animus and ill-will,” Appellants’ Br. at 63.
The Supreme Court has recognized that plaintiffs may assert a claim under the Equal
Protection Clause even if they do not claim membership in any class or group, “where [they] allege[]
that [they have] been intentionally treated differently from others similarly situated and that there is
no rational basis for the difference in treatment.” Village of Willowbrook v. Olech, 528 U.S. 562,
564 (2000); see also Engquist v. Oregon Dep’t of Ag., 128 S. Ct. 2146, 2149 (2008) (plaintiff
“alleg[ed] that she was fired not because she was a member of an identified class (unlike her race,
sex, and national origin claims), but simply for ‘arbitrary, vindictive, and malicious reasons’”).
While such equal-protection claims are generally termed “class-of-one” claims, see Olech, 528 U.S.
at 564; Engquist, 128 S. Ct. at 2149, this term is something of a misnomer; the hallmark of such a
claim is not the allegation that one individual was singled out, but rather, the allegation of arbitrary
or malicious treatment not based on membership in a disfavored class. See Olech, 528 U.S. at 564 n.
(noting, despite the Court’s characterization of the plaintiff’s claim as a “class-of-one” claim, that
“the complaint in this case could be read to allege a class of five”); Franks v. Rubitschun, 312 F.
App’x 764, 766 n.2 (6th Cir. 2009) (“Although such claims are typically referred to as class-of-one
claims, there is no requirement that the challenged government action single out one solitary
person.”).
There is reason, however, to question whether plaintiffs may assert their residual equal
protection claim at all in light of Engquist v. Oregon Department of Agriculture, in which the Court
held that “the class-of-one theory of equal protection does not apply in the public employment
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context.” 553 U.S. at 598. We need not decide the limits of Enguist here, however, because
plaintiffs’ residual equal-protection claim suffers from other fatal deficiencies.
First, “[t]o satisfy [the Equal Protection Clause’s] threshold inquiry, [plaintiffs] must allege
that [they] and other individuals who were treated differently were similarly situated in all material
respects.” Taylor Acquisitions, L.L.C. v. City of Taylor, 313 F. App’x 826, 836 (6th Cir. 2009).
Plaintiffs attempt to cast in this comparative role the captains in former years who were never
demoted; however, prior generations of captains were not subject to Godwin’s supervision, and there
is no evidence that the Department faced similar logistical and budgetary concerns in the past. See
Mitchell v. Toledo Hosp., 964 F.2d 577, 583 (6th Cir. 1992) (“[T]he individuals with whom the
plaintiff[s] seek[] to compare [their] treatment must have dealt with the same supervisor[ and] have
been subject to the same standards . . . .”). Plaintiffs also suggest that they were similarly situated
to probationary police officers, who, like captains, receive salary increases for completing a specified
length of service; however, probationary officers are entry-level, non-civil-service employees who
are not similar to captains in any other respect.
Furthermore, even if plaintiffs could pass the “similarly situated” hurdle, “governmental
action subject to equal protection scrutiny under the rational basis test must be sustained if any
conceivable basis rationally supports it.” TriHealth, Inc. v. Bd. of Comm’rs, Hamilton County, 430
F.3d 783 (6th Cir. 2005) (citing Fed. Commc’ns Comm’n v. Beach Commc’ns, Inc., 508 U.S. 307,
313-14 (1993)) (emphasis in original). Under rational-basis review, a defendant has “no obligation
to produce evidence to sustain the rationality of its action; its choice is presumptively valid and ‘may
be based on rational speculation unsupported by evidence or empirical data.’” Ibid. (quoting Beach
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Commc’ns, 508 U.S. at 315)). As discussed above in the race-, sex- and age-discrimination contexts,
defendants have presented a legitimate nondiscriminatory reason for their action.14
V. Tortious Interference Against Godwin
Lastly, plaintiffs allege that Godwin, in his individual capacity, “intended to [and did] cause
the breach of the contract and/or business relationship between the City of Memphis . . . and
plaintiffs” in violation of Tennessee law. Am. Compl. ¶ 80. Tennessee recognizes a cause of action
for tortious interference with another person’s at-will employment. Forrester v. Stockstill, 869
S.W.2d 328, 330 (Tenn. 1994). However, “a party to a contract cannot be liable for tortious
interference with that contract.” Cambio Health Solutions, LLC v. Reardon, 213 S.W.3d 785, 789
(Tenn. 2006). And, as the Tennessee Supreme Court has held,
when an . . . employee of a corporation acts within the general range of his authority,
and his actions are substantially motivated by an intent to further the interest of the
corporation, in claims of intentional interference with employment, the action of
the . . . employee is considered to be the action of the corporation and is entitled to
the same immunity from liability.
14
Plaintiffs argue that the existence of a conceivable legitimate reason is beside the point
because the abolition of the captain rank was actually “motivated by animus.” Appellants’ Br. at 63.
However, as the district court observed, while disfavored treatment based on animus alone cannot
pass rational-basis review, see Romer v. Evans, 517 U.S. 620, 632 (1996) (striking down state action
where it “seem[ed] inexplicable by anything but animus toward the class it affects”); Stemler v. City
of Florence, 126 F.3d 856, 873-74 (6th Cir. 1997) (stating that “action based on . . . animus alone
violates the Equal Protection Clause”), the absence of rational basis can be shown by “negativing
every conceivable basis which might support the government action or by demonstrating that the
challenged government action was motivated by animus or ill-will.” Warren v. City of Athens, 411
F.3d 697, 711 (6th Cir. 2005) (internal quotation marks and brackets omitted). This is far from such
a case. Furthermore, upon closer examination, Godwin’s so-called “animus” against captains boils
down to indelicately articulated dissatisfaction with the tenure-based promotional system and the
value provided by holders of the captain rank. While his alleged comments were crude, they support,
rather than undermine, defendants’ asserted explanation for the elimination of the rank.
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Forrester, 869 S.W.2d at 334-35. In this case, as in Forrester, despite the evidence of Godwin’s
rude remarks toward captains,
There is no evidence in the record that [Godwin] had any relationship with
[plaintiffs] except through their connection with [the Department]. There is no
evidence that [Godwin] harbored any malice, ill will, or other attitude or emotion
towards [plaintiffs] except within the context of [the Department]. There is no
evidence that [Godwin] would benefit personally from [plaintiffs’ demotion]. Most
importantly, there is no evidence that [Godwin was] acting for any purpose other than
[his] perceived best interest for [the Department].
Id. at 334 (emphasis added). Accordingly, Godwin is immune from personal liability for inducing
plaintiffs’ demotions, and the district court correctly so held.
CONCLUSION
For the foregoing reasons, the judgment of the district court is AFFIRMED.
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