Aloysius L. Maschka v. Genuine Parts Co. ( 1997 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
__________________________________
Nos. 96-3311NE, 96-3427NE, 96-3429NE
__________________________________
Aloysius L. Maschka, *
*
Appellee/Cross-Appellant, *
*
v. * On Appeal from the United
* States District Court
* for the District of
Genuine Parts Company, doing business * Nebraska.
as Napa Auto Parts, *
*
Appellant/Cross-Appellee. *
___________
Submitted: May 22, 1997
Filed: August 11, 1997
___________
Before RICHARD S. ARNOLD, Chief Judge, BOWMAN and MORRIS SHEPPARD
ARNOLD, Circuit Judges.
___________
RICHARD S. ARNOLD, Chief Judge.
After Genuine Parts Company (GPC) demoted him, Aloysius Maschka resigned,
and brought this action under the Age Discrimination in Employment Act, 29 U.S.C.
§§ 621-34 (ADEA), and the Nebraska Act Prohibiting Unjust Discrimination in
Employment Because of Age, Neb. Rev. Stat. §§ 48-1001 to -1010. A jury returned
a verdict in Maschka’s favor and awarded damages for back pay. The District Court1
denied GPC’s motions for judgment as a matter of law and for a new trial, and awarded
Maschka various forms of equitable relief, including an order for reinstatement to his
original position. GPC appeals, and Maschka cross-appeals on certain issues. For the
most part, we affirm.
I.
Genuine Parts Company (GPC), which does business as Napa Auto Parts, sells
automotive parts both at retail, directly to consumers, and wholesale, to garages,
service stations, and companies with large parts requirements. Aloysius Maschka
worked since 1956 at one of GPC’s distribution centers, in Omaha, Nebraska, as a
member of the “outside” sales force, which is responsible for GPC’s sales to wholesale
and commercial purchasers. These salesmen receive commissions on the basis of their
sales. In January 1993, GPC removed2 Maschka and another person from the outside
sales force, but offered both men non-commission sales positions in a local GPC retail
store.
The “inside” sales position that Maschka assumed paid an hourly wage, at a rate
which left Maschka with greatly diminished annual earnings. Shortly after starting in
the new position, a personnel manager for GPC told Maschka that his pension benefits
would decline substantially if he remained working there, because his benefits were
calculated on the basis of his recent salary history. (This information proved not to be
accurate. Maschka’s pension benefits were calculated on the basis of the best five
years of earnings in his most recent ten years. Therefore, his benefits would not have
1
The Hon. Thomas M. Shanahan, United States District Judge for the District of
Nebraska.
2
The parties disputed at trial whether GPC had terminated Maschka and then
rehired him, or just demoted him. “Removed” was the ambiguous term settled on to
describe GPC’s action.
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been substantially affected by the change in position until five years later.) Maschka
resigned from the new position in April 1993 and took a similar, but better paying, job
at another company. He then brought this lawsuit.
At trial, Maschka adduced evidence that he was, at age 55, the oldest person on
the outside sales force before he was removed from that position. The other person
removed was 51. Of the seven salesmen remaining, one was 51, two were in their
young forties, and four were 36 or younger. Maschka also produced evidence that
GPC filled these positions with two people under the age of 40, although GPC
contended that the positions filled were different.
GPC responded to Maschka’s prima facie case with an explanation that it had
decided to reduce the size of its outside sales force, and that Maschka’s relatively poor
performance in developing sales was the reason he was selected for removal. GPC
explained that it wished to reduce its outlays for outside sales salaries, and doing so
required the elimination of two positions. In choosing whom among the nine salesmen
to remove, GPC said it excluded one person from consideration because he had
specialized expertise in selling paint, an area in which GPC particularly wished to
increase its market share. Of the remaining eight salesmen, GPC determined that
Maschka had had the lowest sales volume in three of the previous five years and the
second lowest the other two. Moreover, Maschka had obtained the second fewest new
accounts of any salesman in 1992. Finally, GPC pointed to complaints about
Maschka’s poor customer service to justify its assessment that he was one of the two
worst salesmen on the force. GPC also explained that the two people newly hired were
in different, non-commission positions, with different duties, and therefore were not
replacements.
Maschka rebutted GPC’s explanation in an effort to prove that GPC’s profferred
reasons for its decision were pretextual. First, he demonstrated that there was minimal
evidence that GPC’s headquarters had directed the reduction in staff. The Omaha
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branch’s general manager’s testimony about what GPC’s management had said was the
only evidence presented that GPC’s upper management had ordered the staff reduction.
GPC introduced no corroborating documents or testimony. Despite this manager’s
contention that a business downturn was the reason for the terminations, Maschka
pointed out that GPC had not demonstrated any substantial decline in business that
would explain the need for a reduction in personnel. Furthermore, because Maschka
and his co-worker remained, and two new people were hired, there was a net increase
in employees. Maschka also pointed out that GPC’s removals on the alleged basis of
merit were inconsistent with the company’s policy, as detailed in its handbook, to
terminate in reverse order of seniority when staff reductions were necessary. Finally,
Maschka demonstrated that the two new salespeople GPC had hired handled accounts
that once had been handled by members of the outside sales force. Consequently, even
if the exact positions were not filled, the newly hired younger workers were, in essence,
replacements for Maschka and his co-worker.
Maschka also challenged GPC’s explanation of the procedure it used to
determine which salesmen had the greatest merit. Maschka first argued that GPC’s
justification for excluding the paint specialist made little sense in light of two facts:
first, the specialist resigned in February 1993, yet was not replaced (although GPC did
subsequently assign many of the paint specialist’s tasks to a non-commission
employee), which would be odd if GPC was genuinely seeking to increase its paint-
market presence; second, this explanation was not among those provided to the
Nebraska Equal Opportunity Commission (NEOC) in a letter of explanation sent on
behalf of GPC. He argued that this evidence created another reason to disbelieve the
veracity of GPC’s proffered decision-making criteria.
Maschka then showed that GPC’s sales-volume comparison was also suspect.
GPC’s explanation at trial was that it looked at overall sales volume in making its
decision, whereas its letter to the NEOC stated that it had looked only at sales volume
in new accounts. More importantly, Maschka had never had the lowest amount of sales
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in the years considered, and was in some years third or fourth from the bottom.
Maschka argued that GPC created exceptions to its “rule” for the paint specialist,
whom GPC exempted from consideration for firing, and who was below Maschka in
sales during the two years they were salesmen together. Maschka also demonstrated
that another salesman, whose sales were less than Maschka’s, had not been considered
deficient in the total-sales category because he was relatively new, and therefore
expected not to have sales as large. He pointed to this circumstance as another
suspicious exception to GPC’s claimed decision criteria.
Third, Maschka rebutted GPC’s explanation that he had the lowest number of
accounts on the sales force by demonstrating that other evidence showed that he
actually had more accounts than the figures presented by GPC indicated. Fourth,
Maschka demonstrated that GPC did not keep regular records of how many new
accounts each salesman obtained, which called into question GPC’s explanation that
it considered his low number of new accounts to provide partial justification for his
termination. Fifth, Maschka presented company records that showed that he was not
at the bottom of the rankings in making his sales quota, a statistic which compares a
salesman’s performance in a year to his sales in the previous year, as GPC contended
he was. Finally, Maschka showed that GPC had never told him that his customer-
service skills needed improvement, despite GPC’s contention that this was one of the
reasons for his termination. In summary, Maschka argued that GPC changed its
explanation over time so that it could coherently explain its decision to remove him and
his co-worker, but that the proffered justifications reeked of after-the-fact
rationalization.
The jury returned a verdict for Maschka, and found that GPC’s discrimination
was willful. The jury awarded back-pay damages totalling $50,900.81. The District
Court denied GPC’s motions for judgment as a matter of law and for a new trial. The
District Court then ordered GPC to reinstate Maschka, or to pay him until reinstatement
the difference between what his 1996 salary would have been at GPC and what he
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actually was receiving from another employer. It also ordered GPC to credit
Maschka’s pension retroactively as if he had remained in the outside-sales position.
Finally, the Court awarded $50,900.81 in liquidated damages based on the jury’s
finding that the violation of the ADEA had been willful. GPC then took this appeal.
II.
GPC appeals the finding of liability on several grounds. Its principal contention
is that the evidence is insufficient to prove that it took its action against Maschka
because of his age. It also appeals the admission into evidence of GPC’s letter to the
NEOC and the jury’s finding that Maschka was constructively discharged from the
inside sales position. We consider each question separately.
A.
GPC contends that it was error for the court to admit Exhibit 1, which was a
letter sent by GPC’s counsel to the NEOC that explained why GPC had terminated
Maschka from his outside sales position. It points to a Tenth Circuit case, Equal
Opportunity Employment Commission v. Gear Petroleum, Inc., 948 F.2d 1542 (10th
Cir. 1991), to support its position. That case affirmed the exclusion of an employer’s
position statement, like the letter in Exhibit 1, under Federal Rule of Evidence 408
(“statements made in compromise negotiations . . . not admissible”). Id. at 1544-45.
GPC also argues that a provision of the ADEA makes inadmissible documents, such
as this one, which are part of informal conciliation proceedings, because Title VII
makes such documents inadmissible. Compare 42 U.S.C. § 2000e-5(b) (directing
EEOC to attempt to remedy discrimination through conciliation, but barring statements
in such proceedings from later being admitted as evidence), with 29 U.S.C. § 626(b)
(directing EEOC to attempt conciliation, but containing no provision regarding
admissibility). Gear Petroleum held that the ADEA’s provision did not require
exclusion of such evidence. 948 F.2d at 1543-44. Neither the case nor the statute
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helps GPC in any event, however, because the sole ground on which it objected below
to Exhibit 1 was relevance. See Tr. 228, 237-38, 241. The District Court was correct
to find the document relevant: Maschka used it to demonstrate that GPC did not have
consistent reasons for its decision, which tends to prove that the reasons it offered at
trial were pretextual. The fact that the explanation in the letter was offered by someone
different from the two managers in Omaha who made the actual decision does not make
the document non-relevant. At most, this circumstance would affect the weight of the
claim that GPC’s reasons changed over time. That is a determination for the trier of
fact, not the Court. We cannot say that Exhibit 1 was not properly before the jury.
B.
GPC’s principal point on appeal is that Maschka presented insufficient evidence
from which a reasonable jury could conclude GPC removed him from the outside sales
position because of his age. We recently considered the precise contours of this issue
in our en banc decision, Ryther v. KARE 11, 108 F.3d 832 (8th Cir.), cert. denied, 117
S. Ct. 2510 (1997). The holding of that case may be summarized as follows: if a prima
facie case is made, and if the plaintiff offers evidence tending to show that the
defendant’s proffered reasons for its decision were not the real reason, then the jury
may decide the case, unless the “evidence of pretext . . . is, standing alone, inconsistent
with a reasonable inference of age discrimination.” Id. at 837; see also Johnson v.
Baptist Med. Ctr., 114 F.3d 789, 789 (8th Cir. 1997) (“We held [in Ryther] that the
plaintiff’s evidence must tend to make out a prima facie case and support a finding that
the defendant’s proffered reasons for the decision complained of were pretextual.”),
amending on denial of suggestion for rehearing en banc 97 F.3d 1070 (8th Cir. 1996).
Maschka met the first two requirements by establishing a prima facie case (he was
older than 40, and he was replaced by someone younger than 40), and offering ample
evidence from which a jury could conclude that the reasons offered by GPC for
Maschka’s removal were pretextual. He introduced evidence tending to show that the
considerations GPC used to conclude that it should remove Maschka did not stand up
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to careful scrutiny or were not supported by the facts. Furthermore, the evidence
Maschka presented was not inconsistent with a finding of age discrimination; rather,
it tended to show that GPC’s proffered reasons were flimsy, and thus susceptible of
disbelief.3 Once an age-discrimination plaintiff has done as much as Maschka, a jury
may (but need not) find for him. See St. Mary’s Honor Center v. Hicks, 509 U.S. 502,
511 (1993) (“[R]ejection of the defendant’s proffered reasons will permit the trier of
fact to infer the ultimate fact of intentional discrimination, and . . . ‘no additional proof
of discrimination is required.’” (footnote and citation omitted)). The jury had sufficient
evidence from which it could find GPC’s justifications unconvincing, which under
Hicks and Ryther permitted it to infer that GPC had impermissibly discriminated
against Maschka. Therefore, the District Court properly denied GPC’s motions for
judgment as a matter of law and for a new trial.
C.
GPC also contends on appeal that it should have been granted judgment as a
matter of law on the claim of constructive discharge from the inside sales position. It
argues that Maschka failed to demonstrate that the conditions of his employment were
so intolerable that they amounted to constructive discharge, or that GPC had created
the conditions with the intent to force Maschka to quit. We believe that a reasonable
3
Maschka’s evidence of pretext was not inconsistent with a finding of intentional
discrimination as, for example, the plaintiff’s evidence was in Barber v. American
Airlines, Inc., 791 F.2d 658 (8th Cir.), cert. denied, 479 U.S. 885 (1986). There, the
age-discrimination plaintiffs attempted to show the proffered justification, a company
policy, was pretextual by using evidence that this policy had been inconsistently
applied. We held that this evidence was not sufficient to present the issue to the jury
because the policy’s inconsistent application generally benefitted other older
employees. Id. at 660; see also Rothmeier v. Investment Advisers, Inc., 85 F.3d 1328,
1337-38 (8th Cir. 1996) (plaintiff could not use evidence that he was actually fired
because he threatened to investigate securities-law violations as proof of pretext to
support finding of age discrimination).
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jury could find that GPC constructively discharged Maschka. Maschka testified that
a GPC personnel manager told him that his pension benefits would decline substantially
if he remained in his new, lower-paying, position. Because Maschka was getting
towards the point in life when the value of his pension would critically affect his well-
being, such information would naturally lead him to consider carefully whether he
should continue in his position. Moreover, Maschka produced comments from GPC’s
management that reflected the company’s belief that Maschka did not fit into its future
plans (thus indicating the company wanted him to quit). With evidence of both GPC’s
desire to see Maschka leave and threats of financial penalties for his staying, the jury
could reasonably conclude that GPC intentionally made the conditions of Maschka’s
employment sufficiently intolerable so that he would leave.4
III.
Both parties appeal the relief granted. GPC appeals the denial of judgment as
a matter of law that the violations were not willful. Maschka cross-appeals the District
Court’s failure to submit to the jury a question about damages for emotional distress,
and the extent of its award of future compensation.
A.
The ADEA provides for liquidated damages in an amount equal to the damages
awarded by the jury if the jury finds that the defendant willfully violated the ADEA.
29 U.S.C. § 626(b). A violation is willful “if the employer knew or showed reckless
disregard for the matter of whether its conduct was prohibited by the ADEA.” Hazen
Paper Co. v. Biggins, 507 U.S. 604, 614 (1993) (citation and internal quotations
omitted). Generally, an employer who takes an action against an employee because of
4
Maschka’s conditional cross-appeal regarding the constructive-discharge
question is therefore moot.
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his age will have committed a willful violation if he knows that the ADEA applies to
the situation. Thus, a non-willful violation might occur if the employer reasonably
believed in good faith that he was allowed to make an age-based decision in the
particular case. Id. at 616; accord, Curtis v. Electronics & Space Corp., 113 F.3d
1498, 1503 (8th Cir. 1997). The jury found that GPC had removed Maschka because
of his age. There was evidence, principally from a GPC employee manual that
described its policies against discrimination, that GPC knew it could not generally
make adverse employment decisions on the basis of age. GPC presented no evidence
that it made its decision under the erroneous belief that it was entitled to an exception
to the provisions of the ADEA. Consequently, there was sufficient evidence from
which a jury could conclude that the violation was willful, and thus the District Court’s
award of liquidated damages was proper.
B.
The District Court ordered that Maschka be reinstated to his original outside
sales position and found that this was a just remedy that gave full effect to the purpose
of the ADEA. The Court also ordered that GPC credit Maschka’s pension retroactively
for the amount of pay he would have received had GPC not removed him from the
outside sales position. GPC did not have an outside sales position available at the time
the Court entered its order. Consequently, the Court ordered that GPC reinstate
Maschka to the first available position, and, until then, pay Maschka the difference
between what his 1996 earnings would have been in his position at GPC ($43,966) and
the salary he earned in his current position with another company. By the terms of the
Court’s order, this remedy extends for as many years as GPC fails to reinstate
Maschka. Therefore, the order tacitly assumes that Maschka would have continued to
earn $43,966 per year until his retirement. Maschka contends that the District Court
erred because it failed to order GPC, if it did not reinstate him by the end of 1996, to
compensate him for the increase in earnings he would have had at GPC. We agree.
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“A district court is obligated to grant a plaintiff who has been discriminated
against on account of his [age] . . . the most complete relief possible.” Briseno v.
Central Tech. Community College Area, 739 F.2d 344, 347 (8th Cir. 1984). Although
the tailoring of this relief lies within the equitable discretion of the trial court, we may
modify its orders to ensure that the fullest relief appropriate is afforded a deserving
plaintiff. Ingram v. Missouri Pac. R.R. Co., 897 F.2d 1450, 1456 (8th Cir. 1990). The
District Court likely assumed that GPC would make a position available to Maschka
fairly soon, so that it did not need to consider what Maschka’s front-pay damages
would be in years after 1996. Its assumption, however, proved inaccurate. Maschka
has still not been reinstated. Consequently, Maschka’s relief is not complete, because
the undisputed evidence showed that his salary would have increased each year after
1996. Moreover, under the order as it now stands, GPC will have a diminishing
incentive to find a position for Maschka as time goes on, because Maschka’s outside
pay will probably grow, while the court-ordered salary will remain the same. Thus,
GPC will owe Maschka less for each passing year it fails to reinstate him.
An expert presented figures as to what Maschka’s annual earnings would have
been in his original position until 2002, the expected year of his retirement. A summary
table was admitted into evidence, and the Court’s award of past pension benefits and
its calculation of Maschka’s 1996 earnings follow the figures in this table. We think
Maschka’s relief would be complete if GPC were ordered to pay him the difference
between what the expert predicted he would earn each year at GPC and what he
currently earns, or should reasonably earn, elsewhere, until he is reinstated. Because
the expert’s figures were adopted by the District Court, and are not challenged on
appeal to us, we have taken the projected salary figures from this exhibit. Therefore,
we direct the District Court, on remand, to enter an order requiring that GPC pay to
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Maschka, until his reinstatement, the difference between his earnings as projected by
Maschka’s expert in Exhibit 16, Jt. App. 140-49, and his salary elsewhere.5
C.
Maschka cross-appeals the District Court’s refusal to instruct the jury that it
could award damages for emotional distress on his state-law claim. We have
interpreted the ADEA not to permit the award of such damages. Glover v. McDonnell
Douglas Corp., 981 F.2d 388, 395 (8th Cir. 1992), vacated on other grounds and
remanded for reconsideration, 510 U.S. 802 (1993), and remainder of decision adopted
upon remand, 12 F.3d 845, 848 (8th Cir.), cert. denied, 511 U.S. 1070 (1994).
Maschka contends, however, that such damages are available under Nebraska’s anti-
age-discrimination law. The Nebraska Supreme Court has not ruled one way or the
other on the issue, so we are obligated to predict what it would hold if the issue were
presented to it. A prediction of this kind is necessarily uncertain, and it may prove in
the future to have been wrong. Our task is made more difficult in this case by an
absence of decisions considering the issue in related areas of law. Subject to these
difficulties, we think that the Nebraska Supreme Court would hold that damages for
emotional distress are not recoverable under the state’s anti-age-discrimination law.
5
Maschka’s projected earnings at GPC are as follows: 1997: $45,285; 1998:
$46,643; 1999: $48,043; 2000: $49,484; 2001: $50,968; 2002: $21,874 (reflecting
Maschka’s presumed retirement at age 65, at the end of May).
The District Court’s order also did not explicitly provide for the crediting of
Maschka’s pension in the event he was not rehired by the end of 1996. GPC should
credit Maschka’s pension each year in accordance with the above amounts until it
reinstates him. This will not provide Maschka double relief, because his current job
does not provide a pension. As we understand GPC’s counsel’s statement at oral
argument, GPC does not contest this aspect of the remedy.
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The Nebraska Supreme Court has decided that it will, as a general rule, conform
its reading of the state act to interpretations of the federal act. Humphrey v. Nebraska
Public Power Dist., 243 Neb. 872, 878, 503 N.W.2d 211, 217 (1993) (citing Allen v.
AT&T Technologies, Inc., 228 Neb. 503, 507, 423 N.W.2d 424, 428 (1988)). We
doubt that the Court would depart from this rule in considering the availability of
damages for emotional distress. The wording of the state and federal statutes is very
similar. The pertinent state statute provides that:
In any action brought to enforce the provisions of 48-1001 to 48-
1009, the court shall have jurisdiction to grant such legal or equitable
relief as the court may deem appropriate to effectuate the purposes of
sections 48-1001 to 48-1009, including judgments compelling
employment, reinstatement, or promotion, or enforcing liability for
amounts deemed to be unpaid minimum wages or unpaid overtime
compensation.
Neb. Rev. Stat. § 48-1009. The federal statute provides that:
. . . In any action brought to enforce this chapter the court shall
have jurisdiction to grant such legal or equitable relief as may be
appropriate to effectuate the purposes of this chapter, including without
limitation judgments compelling employment, reinstatement or promotion,
or enforcing the liability for amounts deemed to be unpaid minimum
wages or unpaid overtime compensation under this section.
29 U.S.C § 626(b). We think that the substantial similarity between the statutes would
likely lead the Nebraska Supreme Court to follow our holdings that prohibit recovery
of damages for emotional distress under the ADEA.6
6
GPC appeals the District Court’s permitting Maschka and his wife to testify
about their emotional distress. No objection was made to the testimony below, see Tr.
79-80, 145-46, and the issue was therefore not preserved for our consideration on
appeal.
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IV.
For the reasons described above, we affirm the judgment of the District Court,
except that the relief granted should be amended to reflect Maschka’s expected
increase in salary in the years after 1996, and to make specific the provision for
Maschka's pension rights, in accordance with footnote five of this opinion. The cause
is remanded for entry of an amended judgment in accordance with this opinion
It is so ordered.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
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