Steven G. Rothmeier v. Investment Advisers ( 1996 )

___________
No. 95-2562
___________
Steven G. Rothmeier, *
*
Appellant, *
* Appeal from the United States
v. * District Court for the
* District of Minnesota.
Investment Advisers, Inc., a *
Minnesota corporation; Noel P. *
Rahn, an individual, *
*
Appellees. *
___________
Submitted: December 13, 1995
Filed: June 7, 1996
___________
Before BOWMAN and LOKEN, Circuit Judges, and SCHWARZER,* District Judge.
___________
BOWMAN, Circuit Judge.
Steven G. Rothmeier brought this suit against his former employer,
Investment Advisers, Inc. (IAI), alleging that he was fired on the basis
of his age in violation of the Age Discrimination in Employment Act (ADEA),
29 U.S.C. §§ 621-634 (1994), and the Minnesota Human Rights Act (MHRA),
Minn. Stat. §§ 363.01-363.20 (1994). The District Court1 granted summary
judgment in favor of IAI,2 and Rothmeier appeals. We affirm.
*The HONORABLE WILLIAM W. SCHWARZER, United States
District Judge for the Northern District of California,
sitting by designation.
1
The Honorable Michael J. Davis, United States District Judge
for the District of Minnesota.
2
Rothmeier also sued his supervisor, Noel P. Rahn,
individually under the ADEA. The District Court dismissed this
claim, holding that a supervisor may not be held individually
liable under the
ADEA. Cf. Lenhardt v. Basic Inst. of Technology, Inc., 55 F.3d
377, 381 (8th Cir. 1995) (concluding supervisors may not be held
individually liable under Missouri Human Rights Act). Rothmeier
I.
Rothmeier began working for IAI in 1989 at the age of forty- three.
Less than four years later, in March 1993, Rothmeier was fired at the age
of forty-six. IAI is a complex business enterprise of funds, subsidiary
corporations, and general and limited partnerships. As its name proclaims,
IAI is an investment advisor and makes money by procuring investment funds,
which are managed for a fee by the various IAI divisions. Noel P. Rahn,
the chief executive officer of IAI, hired Rothmeier to serve as president
of IAI Capital Group, a division of IAI. In this position, Rothmeier
oversaw two subsidiaries, the already successful Venture Capital Group and
IAI International, a fledgling investment banking group headed by David
Spreng. Under the auspices of IAI International, IAI created Great
Northern Capital Partners to engage in merchant banking. A banking fund,
called the Great Northern Fund, was organized as a limited partnership to
raise monies for this merchant banking effort. At the time of Rothmeier's
hiring, Rahn, who was then age fifty, knew that Rothmeier was over forty.
In March 1993, Rothmeier was informed by Linda Watchmaker, chief
financial officer of the Venture Capital Group, that Investment Advisors
Venture Management, Inc. (IAVMI), a wholly owned subsidiary of IAI, perhaps
was not in compliance with Securities and Exchange Commission (SEC)
registration rules. Watchmaker's information suggested that the financial
exposure resulting from the registration problem was in excess of $11
million. On the basis of this information, Rothmeier undertook an
investigation to determine whether IAVMI was in compliance with SEC rules.
By March 15, 1993, Rothmeier had concluded that IAVMI was
does not raise any issue with respect to that ruling.
-2-
in violation of SEC regulations and reported this information to Rahn.
Rothmeier then asked Rahn if he could see certain corporate records in
furtherance of his investigation. Rothmeier insists that Rahn and IAI's
in-house lawyers stonewalled because they wanted to "cover-up" the SEC
problem. Rothmeier never received the documents he requested because Rahn
fired him on either March 15 or March 17, 1993.3 Rothmeier was replaced
by David Spreng, who was then thirty-one years old. While at IAI,
Rothmeier never received an unfavorable performance review and, just two
weeks before his discharge, IAI paid Rothmeier a $50,000 bonus.
The District Court granted summary judgment to IAI on the ADEA and
MHRA claims because the record was "bereft of any suggestion that there was
any age based animus involved in the decision of IAI and Rahn to terminate
Rothmeier." Rothmeier v. Investment Advisers, Inc., No. 3-94-431,
Memorandum Opinion and Order at 8 (D. Minn. May 18, 1995). The court
acknowledged that while there were problems between Rahn and Rothmeier,
"those problems concerned certain aspects of the business relationship
rather than [Rothmeier's] age." Id.4
We review the grant of summary judgment de novo, applying, as did the
District Court, the summary judgment standards of Federal
3
The parties dispute the actual date of Rothmeier's discharge.
IAI maintains that it terminated his employment on March 15, 1993.
Rothmeier, on the other hand, insists that he was fired on March
17, 1993. Because this factual dispute is immaterial to the
resolution of this case, this Court, like the District Court,
expresses no view on the matter.
4
We note that Rothmeier also sued IAI for violating the
Minnesota whistleblower statute, Minn. Stat. § 181.932 (1994), and
the Minnesota dismissal for age statute, Minn Stat. § 181.81
(1994), and for breaching a common law fiduciary duty. The
District Court, having dismissed the federal ADEA claim, declined
to exercise supplemental jurisdiction with respect to these
additional claims and dismissed them without prejudice. Rothmeier
does not appeal the dismissal of these state-law claims.
-3-
Rule of Civil Procedure 56(c). Michalski v. Bank of Am. Ariz., 66 F.3d
993, 995 (8th Cir. 1995).
II.
We first address Rothmeier's ADEA claim. The ADEA makes it "unlawful
for an employer . . . 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." 29 U.S.C.
§ 623(a)(1). Everyone age forty and older is within the class of persons
whom the act seeks to protect. 29 U.S.C. § 631. The hallmark of an ADEA
disparate-treatment claim is intentional discrimination against the
plaintiff on account of the plaintiff's age. Hutson v. McDonnell Douglas
Corp., 63 F.3d 771, 775 (8th Cir. 1995). There are two methods by which
a plaintiff can attempt to prove intentional discrimination. First, a
plaintiff may satisfy his burden by presenting direct evidence of
employment discrimination based on age. In employment-discrimination
cases, however, "[t]here will seldom be ``eyewitness' testimony as to the
employer's mental processes" because a shrewd employer will not leave a
trail of direct inculpatory evidence for the plaintiff to bring into court.
United States Postal Serv. Bd. of Governors v. Aikens, 460 U.S. 711, 716
(1983). Recognizing that the "smoking-gun" case is rare, the Supreme Court
has developed a second, indirect method of proof by which a plaintiff can
satisfy his burden using circumstantial evidence. In disparate-treatment
cases based on circumstantial evidence, courts apply the now-familiar
analytical framework of burden shifting developed in McDonnell Douglas
Corp. v. Green, 411 U.S. 792 (1973), and later refined in Texas Department
of Community Affairs v. Burdine, 450 U.S. 248 (1981), and St. Mary's Honor
Center v. Hicks, 113 S. Ct. 2742 (1993). Rothmeier's case relies solely
upon circumstantial evidence, and thus is governed by the McDonnell Douglas
line of cases.
-4-
The McDonnell Douglas framework, using a three-stage burden-shifting
analysis, establishes the order and allocation of proof in employment-
discrimination cases.5 At the first stage, the plaintiff bears the initial
burden of establishing a prima facie case of discrimination. Burdine, 450
U.S. at 252-53. The prima facie case, in the absence of an explanation
from the employer, "creates a presumption that the employer unlawfully
discriminated against the employee." Id. at 254.6 If the plaintiff
establishes a prima facie case, the burden of production shifts at the
second stage to the defendant, who must articulate some legitimate,
nondiscriminatory reason for the adverse employment action. Id. at 253.
If the defendant carries this burden of production, the presumption raised
by the prima facie case is rebutted and "drops from the case." Id. at 255
n.10. The burden then shifts back at the third and final stage to the
plaintiff, who is given the opportunity to show that the employer's
proffered reason was merely a pretext for discrimination. Id. at 253. The
plaintiff retains at all times the ultimate burden of persuading the trier
of fact
5
Although McDonnell Douglas is a Title VII case, the framework
it establishes applies with equal force to claims under the ADEA.
See, e.g., Bashara v. Black Hills Corp., 26 F.3d 820, 823 (8th Cir.
1994) (applying McDonnell Douglas burden-shifting analysis in ADEA
case). The Supreme Court has never had occasion to decide whether
application of the Title VII rule to the ADEA context is correct,
but the Court has "assume[d]" that it does apply for the time
being. O'Connor v. Consolidated Coin Caterers Corp., 116 S. Ct.
1307, 1310 (1996).
6
The phrase "prima facie case" has two possible meanings.
First, it "may denote the establishment of a legally mandatory,
rebuttable presumption." Texas Dep't of Community Affairs v.
Burdine, 450 U.S. 248, 254 n.7 (1981). Second, it "may be used by
courts to describe the plaintiff's burden of producing enough
evidence to permit the trier of fact to infer the fact at issue."
Id. In the McDonnell Douglas context, prima facie case is given
the more narrow first meaning; it is intended merely to be a
legally mandatory, rebuttable presumption. Its purpose in the
burden-shifting scheme is "to sharpen the inquiry into the elusive
factual question of intentional discrimination." Burdine, 450 U.S.
at 255 n.8.
-5-
that the adverse employment action was motivated by intentional
discrimination. Id.
For purposes of its summary judgment motion, IAI concedes the
existence of a prima facie case of age discrimination.7 IAI's Br. at 12
nn.13 & 14. This concession created a presumption of age discrimination
by IAI, requiring IAI to rebut it with nondiscriminatory reasons for
Rothmeier's discharge. IAI proffered three nondiscriminatory reasons: the
poor performance of IAI International; the failure of the Great Northern
Fund to achieve its goals; and Rothmeier's purported insubordination and
differences in management style between Rothmeier and Rahn. IAI having
come forward with nondiscriminatory reasons for Rothmeier's discharge, the
burden then shifted to Rothmeier to offer evidence showing that the reasons
given by IAI were a pretext for discrimination. Rothmeier attempted to
satisfy this burden by disputing each of IAI's proffered reasons. Where
IAI asserted that IAI International lost millions of dollars, Rothmeier
claimed that IAI International made over $1 million under his guidance and,
in any event, David Spreng--the younger man who replaced him--headed that
subsidiary. Where IAI claimed that the Great Northern Fund was failing,
Rothmeier maintained that he had told an agreeable Rahn much earlier that
it was unlikely the Fund would attain its goal and that, once again, David
Spreng was in charge. Where IAI insisted that Rothmeier was insubordinate,
Rothmeier argued that he possessed a heightened sense of business ethics
and raised the SEC registration issue, not out of insubordination, but,
rather, as an exercise of business ethics; he points out that he never
received
7
In a termination case that does not involve a reduction in
force, a plaintiff establishes a prima facie case of age
discrimination if he can show that he is a member of the protected
age class, that he was performing adequately in his job, that he
was fired, and that he was replaced by a younger person after his
dismissal. Lowe v. J.B. Hunt Transp., Inc., 963 F.2d 173, 174 (8th
Cir. 1992).
-6-
a negative performance review nor was he ever warned about any alleged
insubordination or differences in management style.
Even though the District Court determined that Rothmeier had
"plainly" created factual disputes with respect to whether IAI's proffered
reasons were credible, it granted summary judgment to IAI because Rothmeier
failed to present any evidence that tended to show that age was a
determining factor in IAI's decision to fire him. Rothmeier v. Investment
Advisers, Inc., No. 3-94-431, Memorandum Opinion and Order at 8 (concluding
factual disputes shown in summary judgment record had "nothing to do with
the critical issue before the court"--i.e., whether the termination was
related to age).
Rothmeier argues that to survive IAI's motion for summary judgment,
it is enough that he created factual disputes with respect to whether IAI's
proffered reasons were pretextual; he insists that he did not have to take
the additional step of showing, either directly or indirectly, that his
termination was motivated by age-based animus. Rothmeier essentially
argues that, once he establishes a prima facie case and presents evidence
that IAI's proffered reasons for discharging him were pretextual, his case
can withstand a summary judgment motion and is entitled to go to trial.
We disagree. Under the Supreme Court's decision in St. Mary's Honor Center
v. Hicks, the ruling of the District Court must be upheld.8
In Hicks, the Court resolved a circuit split regarding the proof an
employee must have in order to prevail on an employment-discrimination
claim under Title VII. Before Hicks, the federal courts of appeals were
divided as to whether an employee could
8
Although the Hicks decision stemmed from an appeal from a
full bench trial, its rationale applies with equal force to summary
judgment proceedings. See O'Connor, 116 S. Ct. at 1309 (applying
Hicks analysis in summary judgment context).
-7-
prove employment discrimination simply by showing that the employer's
proffered reasons were false. See Hicks, 113 S. Ct. at 2750 (collecting
cases). Some circuits, including our own, embraced the "pretext-only"
rule. Under this view, a showing that the employer's proffered explanation
was false meant that the employee was automatically entitled to judgment.
Thus, according to these courts, a finding that the employer's explanation
was not credible was "equivalent to a finding that the employer
intentionally discriminated." Duffy v. Wheeling Pittsburgh Steel Corp.,
738 F.2d 1393, 1396 (3d Cir.), cert. denied, 469 U.S. 1087 (1984). Other
circuits, however, espoused the "pretext-plus" rule. These courts required
more than a simple showing that the employer's proffered reasons were
false. Pretext-plus courts demanded that an employee show discriminatory
animus in addition to pretext. In these courts, if the employee could do
no more than show that the employer's reasons were not credible, judgment
was automatically entered for the employer.
In Hicks, the plaintiff brought a Title VII action against his former
employer, St. Mary's Honor Center, alleging that he had been unlawfully
discharged because of his race. Hicks established a prima facie case, St.
Mary's proffered nondiscriminatory reasons for the discharge, and the
district court, sitting as the trier of fact, found that the reasons St.
Mary's gave were not the true reasons for the discharge. Despite finding
St. Mary's proffered reasons to be pretextual, the district court
nevertheless granted judgment to St. Mary's because it also found that
Hicks failed to prove that his employer's conduct was racially rather than
personally motivated. Hicks v. St. Mary's Honor Ctr., 756 F. Supp. 1244,
1252 (E.D. Mo. 1991) (subsequent history omitted).
We reversed on appeal, using the pretext-only rule as the basis for
our decision. We reasoned that once the district court determined that
Hicks had established a prima facie case and that his employer's proffered
reasons for the discharge were false, it
-8-
should have directed a verdict for Hicks. Hicks v. St. Mary's Honor Ctr.,
970 F.2d 487, 493 (8th Cir. 1992) (subsequent history omitted).
The Supreme Court reversed and remanded the case for further
proceedings, holding, as this Court saw it, that "proof that the
defendant's articulated explanation is false or incorrect does not,
standing alone, entitle the plaintiff to judgment; instead, the showing
must be that the explanation is a pretext for discrimination." Hutson, 63
F.3d at 777 (citing Hicks, 113 S. Ct. at 2752). "[A] reason cannot be
proved to be ``a pretext for discrimination' unless it is shown both that
the reason was false, and that discrimination was the real reason." Hicks,
113 S. Ct. at 2752. The Court thus rejected the pretext-only position and
held that the factfinder's disbelief of the employer's reasons does not
compel judgment for the employee. Instead, if the employer succeeds in
carrying its burden of production, the presumption raised by the prima
facie case is rebutted and drops from the case, rendering the McDonnell
Douglas framework "no longer relevant." Id. at 2749. The trier of fact
then proceeds to decide the ultimate question: whether the employee has
proven that the employer intentionally discriminated against him because
of his age. Id. The Court, however, also rejected the pretext-plus
position, stating:
The factfinder's disbelief of the reasons put forward by the
defendant (particularly if disbelief is accompanied by a
suspicion of mendacity) may, together with the elements of the
prima facie case, suffice to show intentional discrimination.
Thus, rejection of the defendant's proffered reasons, will
permit the trier of fact to infer the ultimate fact of
intentional discrimination, and the Court of Appeals was
correct when it noted that, upon such rejection, "[n]o
additional proof of discrimination is required."
Id. (citation and footnote omitted) (alteration and second emphasis added
by Supreme Court).
-9-
The Court thus struck a middle ground in Hicks, refusing to adopt
either pretext-only or pretext-plus as the exclusive test for sufficiency
of the evidence in employment-discrimination cases. Instead, the test
fashioned by the Court for the third stage of the McDonnell Douglas
analysis is more fact sensitive: whether the employee has provided evidence
from which a reasonable factfinder could conclude that the employer
intentionally discriminated against the employee for a prohibited reason.
Id. This test is consistent with the Supreme Court's admonition that the
presumption created by the prima facie case drops out of the picture after
the employer has met its burden of production, thereby rendering the
McDonnell Douglas framework no longer relevant. The factual inquiry then
"proceeds to a new level of specificity," id. at 2752 (quoting Burdine, 450
U.S. at 255), and refocuses on the ultimate question in the case--whether
the employer engaged in intentional discrimination. The Court reconciled
its position by noting that "[e]ven though (as we say here) rejection of
the defendant's proffered reasons is enough at law to sustain a finding of
discrimination, there must be a finding of discrimination." Id. at 2749
n.4. Thus, the Court recognized that in some cases the overall strength
of the prima facie case in conjunction with evidence of pretext will be
sufficient to permit a finding of intentional discrimination, while in
other cases the prima facie case in tandem with evidence of pretext will
not be sufficient to permit a finding of intentional discrimination. Hicks
explicitly requires evidence that will "suffice to show intentional
discrimination." Only where the evidence of plaintiff's prima facie case
and the evidence of pretext are sufficient, considered together, to allow
a reasonable factfinder to conclude that the defendant has intentionally
discriminated against the plaintiff is "no additional proof of
discrimination . . . required." Whether or not a case requires evidence
beyond a showing of pretext to support a finding of intentional
discrimination is necessarily a fact-intensive determination and must be
decided on a case-by-case
-10-
basis. The First Circuit has recently explained the middle-ground approach
developed in Hicks:
[T]he Supreme Court envisioned that some cases exist where a
prima facie case and the disbelief of a pretext could provide
a strong enough inference of actual discrimination to permit
the fact-finder to find for the plaintiff. Conversely, we do
not think that the Supreme Court meant to say that such a
finding would always be permissible. . . . The strength of the
prima facie case and the significance of the disbelieved
pretext will vary from case to case depending on the
circumstances. In short, everything depends on the individual
facts.
Woods v. Friction Materials, Inc., 30 F.3d 255, 261 n.3 (1st Cir. 1994)
(affirming summary judgment in favor of employer).
In the context of summary judgment, the question thus becomes
whether, in a case where the employee has established a prima facie case
and has presented sufficient evidence for a jury to disbelieve the reasons
proffered by the employer, the trial court nevertheless may decide as a
matter of law that the evidence is insufficient for a reasonable jury to
infer age discrimination and therefore may grant summary judgment to the
employer. Rothmeier would have us answer this question in the negative.
He argues that while Hicks prevents him from obtaining a compelled judgment
based on evidence of pretext alone, pretext-only evidence is enough for him
to withstand a summary judgment motion and get his case to a jury.
Rothmeier is mistaken. His argument construes Hicks too narrowly and
ignores its middle-ground approach. Rothmeier seeks a blanket statement
that once evidence of pretext is proffered, that evidence along with the
prima facie case always will shield a plaintiff from summary judgment.
Hicks, of course, says no such thing. We believe that Hicks allows a trial
judge to decide on a motion for summary judgment that the evidence is
insufficient for a reasonable trier of fact to infer discrimination even
though the plaintiff may have created a factual dispute as to the issue of
pretext. Intentional discrimination vel non is like any other ultimate
-11-
question of fact: either the evidence is sufficient to support a finding
that the fact has been proven, or it is not. Indeed, Hicks emphasizes that
once an employment-discrimination case reaches the third stage of McDonnell
Douglas, it is to be treated like any other case. Trial courts or
reviewing courts should not "treat discrimination differently from other
ultimate questions of fact." Hicks, 113 S. Ct. at 2756 (quoting Aikens,
9
460 U.S. at 716).
Post-Hicks, our Circuit's pronouncements on this issue have not been
models of apparent consistency. Compare Krenik v. County of Le Sueur, 47
F.3d 953, 958 (8th Cir. 1995) ("To survive summary judgment at the third
stage of the McDonnell Douglas analysis, a plaintiff must demonstrate the
existence of evidence of some additional facts that would allow a jury to
find that the defendant's proffered reason is pretext and that the real
reason
9
This point is bolstered further when the procedural context
of Hicks is considered. In reversing this Court, the Supreme Court
in Hicks did not order us to affirm the district court's findings,
as it would have done if the factfinder always has the final word
in evaluating pretext evidence. Instead the Court simply remanded,
explaining:
That the employer's proffered reason is unpersuasive, or
even obviously contrived, does not necessarily establish
that the plaintiff's proffered reason of race is correct.
That remains a question for the factfinder to answer,
subject, of course, to appellate review -- which should
be conducted on remand in this case under the "clearly
erroneous" standard . . . .
St. Mary's Honor Ctr. v. Hicks, 113 S. Ct. 2742, 2756 (1993)
(emphasis added).
In other words, the Supreme Court in Hicks held that whether
an employer's proffered reason was a pretext for unlawful
discrimination is a question of fact, reviewable like any other
question of fact. After a bench trial, a trial court's finding of
pretext-for-age-discrimination is reviewable for clear error.
After a jury trial, the jury's general verdict is reviewable under
the standard for granting judgment as a matter of law. And before
trial, the issue may be considered under the well-known standard
that governs motions for summary judgment.
-12-
for its action was intentional discrimination."); Hutson, 63 F.3d at 777
(following Krenik); and Nelson v. Boatmen's Bancshares, Inc., 26 F.3d 796,
801 (8th Cir. 1994) (holding employee "must do more than simply discredit
an employer's nondiscriminatory explanation; he must also present evidence
capable of proving that the real reason for his termination was
discrimination based on age"); with Gaworski v. ITT Commercial Fin. Corp.,
17 F.3d 1104, 1109 (8th Cir.) ("[I]f (1) the elements of a prima facie case
are present, and (2) there exists sufficient evidence for a reasonable jury
to reject the defendant's proffered reasons for its actions, then the
evidence is sufficient to allow the jury to determine whether intentional
discrimination has occurred, and we are without power to reverse the jury's
finding."), cert. denied, 115 S. Ct. 355 (1994); and Kobrin v. University
of Minn., 34 F.3d 698, 703 (8th Cir. 1994) (concluding plaintiff "may
overcome summary judgment by producing evidence that, if believed, would
allow ``a reasonable jury to reject the defendant's proffered reasons for
its actions'") (quoting Gaworski, 17 F.3d at 1109). These cases, however,
can be reconciled.
In our recent decisions, we consistently have interpreted Gaworski
to mean merely that "[i]n some cases, evidence that an employer's proffered
nondiscriminatory explanation is wholly without merit or obviously
contrived might serve double duty; it might serve the additional purpose
of permitting an inference that age discrimination was a motivating factor
in a plaintiff's termination." Boatmen's Bancshares, 26 F.3d at 801
(emphasis added); see also Nelson v. J.C. Penney Co., 75 F.3d 343, 346 (8th
Cir. 1996); Hutson, 63 F.3d at 777. Only within the ambit of these double-
duty cases is no additional proof of discrimination required. Boatmen's
Bancshares, 26 F.3d at 801. As noted above, whether or not a case falls
within this double-duty category is necessarily fact intensive and must be
decided on a case-by-case basis by the district court. Thus, Gaworski
allows a plaintiff to rely on the same evidence to prove both pretext and
intentional
-13-
discrimination, but, as our cases subsequent to Gaworski make clear, the
overall strength of this evidence must be sufficient for a reasonable
factfinder to infer that the employer's decision was motivated by
discriminatory animus. If the evidence considered as a whole does not
satisfy that standard, then the plaintiff must come forward with "some
additional facts," beyond the showing of a prima facie case and pretext,
that would allow a jury reasonably to infer that the real reason for the
adverse employment action was intentional discrimination. Krenik, 47 F.3d
at 958. Accordingly, "evidence discrediting an employer's
nondiscriminatory explanation is not necessarily sufficient (i.e., it is
sufficient in some cases but not all cases) because an age-discrimination
plaintiff cannot prevail unless ``the factfinder . . . believe[s] the
plaintiff's explanation of intentional discrimination.'" Boatmen's
Bancshares, 26 F.3d at 801 (quoting Hicks, 113 S. Ct. at 2754) (alterations
in Boatmen's Bancshares). This view acknowledges the middle ground forged
by the Supreme Court when it stated in Hicks that the factfinder's
disbelief of the employer's explanation may, together with the prima facie
case, suffice to show intentional discrimination. It is also consistent
with the notion that the burden of persuasion as to the ultimate issue of
intentional discrimination remains with the plaintiff at all times and that
this burden is not necessarily satisfied merely by discrediting the
employer's explanation. Hutson, 63 F.3d at 777. Consequently, the rule
in this Circuit is that an age-discrimination plaintiff can avoid summary
judgment only if the evidence considered in its entirety (1) creates a fact
issue as to whether the employer's proffered reasons are pretextual and (2)
creates a reasonable inference that age was a determinative factor in the
adverse employment decision. The second part of this test sometimes may
be satisfied without additional evidence where the overall strength of the
prima facie case and the evidence of pretext "suffice[s] to show
intentional discrimination." The focus, however, always remains on the
ultimate question of law: whether the evidence is sufficient to create a
genuine issue of fact as to whether the
-14-
employer intentionally discriminated against the plaintiff because of the
plaintiff's age.
Having carefully reviewed the record, we conclude that Rothmeier
presented neither direct evidence of age discrimination nor sufficient
circumstantial evidence for a reasonable factfinder to infer that
Rothmeier's age "actually motivated" his employer's decision to discharge
him.10 Boatmen's Bancshares, 26 F.3d at 800 (quoting Hazen Paper Co. v.
Biggins, 507 U.S. 604, 610 (1993)). Viewing the evidence in the light most
favorable to Rothmeier, his prima facie case and his evidence of pretext
are insufficient, as a matter of law, to allow a reasonable factfinder to
infer intentional discrimination based on age. There were undoubtedly
problems between Rahn and Rothmeier, but those problems concerned their
business relationship (e.g., Rothmeier's confronting Rahn with alleged SEC
violations) rather than age. Moreover, when hired by Rahn (who was himself
age fifty at the time), Rothmeier was already forty-three years of age;
when fired by Rahn, Rothmeier was forty-six. These facts run counter to
any reasonable inference of discrimination based on age. See Lowe v. J.B.
Hunt Transp., Inc., 963 F.2d 173, 175 (8th Cir. 1992) ("It is simply
incredible, in light of the weakness of plaintiff's evidence otherwise,
that the company officials who hired him at age fifty-one had suddenly
developed an aversion to older people less than two years later."); Proud
v. Stone, 945 F.2d 796, 797 (4th Cir. 1991) ("[I]n cases where the hirer
and the firer are the same individual and the termination of employment
occurs within a relatively short time
10
Rothmeier asserts that the District Court required him to
offer direct proof of intentional age discrimination as the sole
method of avoiding summary judgment and that such a requirement is
reversible error. Rothmeier's Br. at 26, 28. The District Court
did no such thing. The court simply noted that, in addition to
there being no circumstantial evidence, the record also was
entirely devoid of direct proof of age-based animus. Rothmeier v.
Investment Advisers, Inc., No. 3-94-431, Memorandum Opinion and
Order at 8 (D. Minn. May 18, 1995).
-15-
span following the hiring, a strong inference exists that discrimination
was not a determining factor for the adverse action taken by the
employer.").
Rothmeier acknowledges that he "was discharged because IAI wanted to
cover up its SEC problems and keep the millions of dollars it illegally
collected" in violation of SEC regulations. Rothmeier's Br. at 23. This
acknowledgement standing alone would completely refute Rothmeier's claim
of age discrimination. Consequently, Rothmeier attempts to cast his case
as one of age discrimination by weaving an intricate web. He argues that
IAI engaged in age discrimination when "Rahn terminated the older and more
ethically mature Rothmeier and brought in younger, less experienced, and
more easily controlled executives" like Spreng. Id. Rothmeier's argument
boils down to the notion that with age comes greater ethical acumen.
Because he is older, Rothmeier insists that he has attained greater
sensitivity to ethical problems than his younger colleagues at IAI and, for
this reason, he argues, he was able to confront Rahn and to refuse to
participate in the purported cover-up of the alleged SEC violations. His
younger colleagues, on the other hand, because of their youth and
inexperience in the business world, were supposedly unable to stand up to
Rahn when the alleged cover-up scheme was hatched. We find Rothmeier's
argument to be ingenious, but to no avail, because it does not suffice as
evidence of age discrimination. See Hazen Paper Co., 507 U.S. at 611
(holding discharge motivated by factor correlated to age, like vesting of
pension fund benefits tied to seniority, is not proof of age-based
discrimination). Rothmeier has tried to bootstrap his way into an age-
discrimination claim by making an argument premised on a highly dubious
correlation (and one for which he has offered no supporting evidence)
between age and ethical behavior. For our part, we have no inclination to
accept the assertion that the content of one's character is a proxy for
age. As Rothmeier contends, he may have been fired because he chose to do
the right thing by investigating
-16-
the alleged SEC violations. If that is the true reason for his discharge,
that fact undercuts, rather than supports, his claim that IAI fired him
because of his age.
Based on our review of the record, we are thoroughly satisfied that
the District Court was correct in granting IAI summary judgment on
Rothmeier's ADEA claim.
III.
We next turn to Rothmeier's age-discrimination claim under the MHRA.
The District Court granted summary judgment to IAI on this state-law claim
for the same reason that it granted summary judgment to IAI on the ADEA
claim, namely that Rothmeier failed to satisfy the requirements of Hicks.
Rothmeier argues that the federal standard fashioned in Hicks does not
apply to MHRA claims. Consequently, he contends that, even if he loses his
ADEA claim on summary judgment because of Hicks, he should survive summary
judgment on the MHRA claim because Minnesota state courts apply a more
liberal standard to MHRA claims than federal courts apply to ADEA claims.
We disagree.
We review this question of state law de novo. Salve Regina College
v. Russell, 499 U.S. 225, 231 (1991). While Rothmeier concedes that
Minnesota courts apply the three-step McDonnell Douglas framework to MHRA
claims, see Feges v. Perkins Restaurants, Inc., 483 N.W.2d 701, 710 (Minn.
1992); Sigurdson v. Isanti County, 386 N.W.2d 715, 719-20 (Minn. 1986), he
argues that "the third step is more liberal and much more easily met under
Minnesota law." Rothmeier's Br. at 44. In a recent 2-1 decision, the
Minnesota Court of Appeals held it was error for the trial court to rely
on "the more rigid federal standard" in Hicks when analyzing the third-step
of McDonnell Douglas for MHRA claims. Hasnudeen v. Onan Corp., 531 N.W.2d
891, 894 (Minn. Ct. App. 1995), review granted (July 20, 1995). Hasnudeen
interpreted Hicks as requiring "a
-17-
plaintiff to demonstrate both the falsity of the employer's reason and that
discrimination was the real reason." Id. The Hasnudeen court determined
that this test was inappropriate for MHRA claims; instead, the majority
concluded that Minnesota Supreme Court precedent requires a trial court to
focus "solely on whether the plaintiff ``has been the victim of intentional
discrimination.'" Id. (quoting Anderson v. Hunter, Keith, Marshall & Co.,
417 N.W.2d 619, 626 (Minn. 1988) (quoting case below, Anderson v. Hunter,
Keith, Marshall & Co., 401 N.W.2d 75, 81 (Minn. Ct. App. 1987))). We do
not view our interpretation of Hicks as being inconsistent or more "rigid"
than the holding in Hasnudeen. Both interpretations require the trial
court at the third-step of McDonnell Douglas to focus on the ultimate issue
of the case: whether a plaintiff has been the victim of intentional
discrimination. The only reason that Hasnudeen characterized Hicks as "a
more rigid federal standard" was because it mistakenly construed Hicks as
adopting a pretext-plus rule as the exclusive test at the third stage of
McDonnell Douglas analysis. Our decision today shows that such a
conclusion construes Hicks too narrowly and ignores the middle-ground
approach developed by the Supreme Court.11
The Minnesota Supreme Court has held time and again that MHRA claims
are to be construed in accordance with federal precedent. See, e.g.,
Feges, 483 N.W.2d at 710 (applying McDonnell Douglas test to age-
discrimination claim under MHRA); Anderson, 417 N.W.2d at 626 ("Courts of
this state should continue to apply the McDonnell Douglas analysis in
employment cases involving claims of disparate treatment brought under the
Minnesota Human Rights Act . . . ."). We see no reason why the Minnesota
Supreme Court
11
The dissent in Hasnudeen correctly noted that there is no
difference between the federal (Hicks) test and the Minnesota
(Anderson) test. Hasnudeen v. Onan Corp., 531 N.W.2d 891, 896
(Minn. Ct. App. 1995), review granted (July 20, 1995) (Randall, J.
dissenting) ("[B]oth the federal and Anderson standards require the
trier of fact be convinced plaintiff's discharge was the result of
intentional discrimination.").
-18-
would deviate from federal precedent now. Although the Minnesota Supreme
Court has not yet passed upon this issue since Hicks was decided, it did
grant review to Hasnudeen. And while we do not view Hasnudeen as being at
odds with our decision today, to the extent that it departs from using
federal precedent to interpret MHRA claims, it is contrary to well-
established Minnesota law and we are not bound by it. See Haugen v. Total
Petroleum, Inc., 971 F.2d 124, 126 (8th Cir. 1992) (noting federal court
may disregard decision of intermediate appellate state court if "it is
convinced by other persuasive data that the highest court of the state
would decide otherwise.") (quoting West v. American Tel. & Tel. Co., 311
U.S. 223, 237 (1940)). Until the Minnesota Supreme Court decides
otherwise, MHRA claims are analyzed in accordance with McDonnell Douglas
and its progeny, including Hicks. Anderson, 417 N.W.2d at 623 ("[W]e have
frequently applied principles which have evolved in the adjudication of
claims under the federal act, and, specifically we have adopted the
McDonnell Douglas analysis as an aid to resolving cases claiming disparate
treatment.") (emphasis added). Rothmeier's reliance on Hasnudeen as
establishing a different standard thus fails to save his MHRA claim.
IV.
For the foregoing reasons, the judgment of the District Court is
affirmed.
A true copy.
Attest:
CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.
-19-