Leeds v. Westman, Weinberg & Reis Co., L.P.A. , 2021 Ohio 4123 ( 2021 )

[Cite as Leeds v. Westman, Weinberg & Reis Co., L.P.A., 2021-Ohio-4123.]
COURT OF APPEALS OF OHIO
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
KATHERINE LEEDS, F.K.A. :
KATHERINE MERHULIK,
:
Plaintiff-Appellant,
: No. 110348
v.
:
WELTMAN, WEINBERG & REIS CO.,
L.P.A., :
Defendant-Appellee. :
JOURNAL ENTRY AND OPINION
JUDGMENT: AFFIRMED
RELEASED AND JOURNALIZED: November 18, 2021
Civil Appeal from the Cuyahoga County Court of Common Pleas
Case No. CV-19-922944
Appearances:
Grubb and Associates, L.P.A., Natalie F. Grubb, and Mark
E. Owens, for appellant.
Frantz Ward, L.L.P., Brian J. Kelly, and Megan E. Bennett,
for appellee.
KATHLEEN ANN KEOUGH, P.J.:
Plaintiff-appellant, Katherine Leeds (“Leeds”), appeals the trial
court’s judgment granting summary judgment to defendant-appellee, Weltman,
Weinberg & Reis Co. (“Weltman”) on her age-discrimination claims. She also
appeals several evidentiary rulings by the trial court. For the reasons that follow, we
affirm.
I. Background
Weltman is a law firm that provides services to clients across the
United States with offices located in Ohio, Pennsylvania, Illinois, Michigan, and
Kentucky. It employs a variety of attorneys and support staff who are divided into
different departments. One of those departments is the Collections Strategy
Services Department, which ensures that collections activities on behalf of
Weltman’s clients are conducted according to the requirements of the Fair Debt
Collection Practices Act, client standards, and firm policies.
Over the past several years, Weltman has found it necessary to reduce
the number of personnel as a result of changing business conditions and as a result,
has conducted a number of reductions in force (“RIF”). One such RIF occurred in
September 2016, when Weltman decided that it was necessary to conduct a RIF in
various departments due to then-current and expected business conditions.
Weltman developed a set of guidelines as a tool to help identify
employees to be included in the RIF. The guidelines directed management to review
each employee’s most recent performance review, corrective action, and seniority.
The manager of each department then provided the requested information to
Human Resources for each employee in the department. Human Resources
collected and aggregated the data provided by the managers on a “scorecard.” In
order to ensure uniformity, responses to each factor were assigned a point value.
Human Resources gave employees a point value for each of the relevant areas and
then added the points together for a total score. Generally, the employee with the
lowest score in the department was chosen for the reduction.
Leeds was hired in 2009 as a legal collector in Weltman’s Cleveland
office. She was 52 years of age when she was hired. In 2010, she transferred to
Weltman’s Brooklyn Heights office, where she continued to work for the remainder
of her employment. In December 2012, when she was 55 years old, Leeds was
promoted to the Quality Assurance Call Monitor position in the Collections Strategy
Services Department. Leeds’s title subsequently changed in July 2016 to Quality
Assurance Specialist (“QAS”), although her responsibilities generally remained the
same. Leeds was subject to performance write-ups by various managers during her
employment. Prior to her inclusion in the September 1, 2016 RIF, she received a
verbal warning for poor job performance.
Immediately prior to the 2016 reduction, Weltman employed four
employees in the QAS position — three in the Brooklyn Heights office and one in the
Cincinnati office. Nikkia Hamler worked in the Collections Strategy Services
Department as the Collections/Probate Training Manager. Prior to the September
RIF, she began working with Weltman’s Human Resources Department to plan for
the RIF. As part of this process, Hamler collected information regarding overall
work performance, corrective action, and seniority, as set forth in the guidelines, for
the four employees in the QAS position. Hamler provided the information to
Human Resources, which assigned a uniform point value to each factor and
developed rankings for the four employees in the QAS position.
Based on the information provided to Human Resources by
department managers, Weltman’s management developed a plan that called for the
reduction of 23 employees from different departments across the firm. Human
Resources reviewed the list of employees selected for the reduction for potential
discrimination and concluded that Weltman could proceed with the RIF.
In light of firm-wide financial analysis and expectations for the
Collections Strategy Services Department, Weltman’s management concluded that
it was necessary to eliminate one position in the department. Leeds was the person
chosen for elimination because her score was the lowest of the persons in her
position.
On September 1, 2016, Weltman began implementing the RIF, which
took place over a several-week period. The employees chosen for the RIF included
employees with ages ranging from 23 to 67 years of age. Hamler and Kimberly Clark
from Human Resources met with Leeds on September 1, 2016, and communicated
the termination decision to her. All employees selected for the RIF, including Leeds,
were encouraged by Human Resources to apply for any open position at Weltman
for which they might be qualified. Some employees, none of whom were in Leeds’s
department, applied for and were offered positions for which they were qualified
and thus were not terminated. Leeds chose not to apply for any other position at
Weltman when she was terminated in the RIF.
Weltman did not replace Leeds or the other employees who were
terminated as a result of the RIF. The positions were eliminated and the tasks they
had been performing were assigned to existing employees in the various
departments. Leeds’s job duties were redistributed to the remaining QAS employees
in her department, all of whom were over 40 years of age.
After her termination, Leeds brought suit against Weltman asserting
claims for disparate-treatment age discrimination in violation of R.C. 4112.02,1
disparate-impact age discrimination in violation of R.C. 4112.02 and 4112.14,2 and
punitive damages.
The trial court issued an amended case management entry ordering
that “all paper discovery due by 06/19/20; plaintiff’s expert report due by 06/19/20;
defendant’s expert report due by 07/24/20; all dispositive motions due by
08/03/20; final pretrial set for 10/27/20 at 10:00 a.m.; trial set for 11/09/20 at
10:00 a.m.”
The parties engaged in discovery. Leeds timely served the original
report of her expert, Dr. Rebecca Fang, and an addendum to Dr. Fang’s report.3
1 R.C. 4112.02(A) provides that “[i]t shall be an unlawful discriminatory practice
for any employer, because of the * * * age * * * of any person, to discriminate against that
person with respect to hire, tenure, terms, conditions, or privileges of employment, or any
matter directly or indirectly related to employment.”
2Under R.C. 4112.14, “[n]o employer shall * * * discharge without just cause any
employee aged 40 or older who is physically able to perform the duties and otherwise
meets the established requirements of the job * * *.”
3This
is a refiled case. Leeds dismissed her original complaint against Weltman in
Cuyahoga C.P. No. CV-17-876521 in October 2018, with the parties’ summary judgment
Weltman also timely filed its expert report. Both parties subsequently filed motions
for summary judgment. In her brief in opposition to Weltman’s motion, Leeds
attached as Exhibits A and D the affidavits of Kamal Strowder (“Strowder”) and
Carrie Grace Spence (“Spence”), as well as the rebuttal expert report of Dr. Fang as
Exhibit F. Weltman moved to strike the affidavits and Dr. Fang’s rebuttal expert
report. The trial court granted Weltman’s motion to strike the affidavits, ruling that
Leeds “failed to identify or supplement her discovery responses timely and filed
affidavits of individuals never previously identified only in response to defendant’s
motion for summary judgment.” The court also granted Weltman’s motion to strike
Dr. Fang’s rebuttal expert report, finding that Leeds “did not request nor did she
receive leave to file a rebuttal expert report after the expert report deadline.
Allowing [her] to introduce this new evidence is clearly prejudicial.”
The trial court also granted Weltman’s motion for summary
judgment and denied Leeds’s motion. Leeds then filed a request for findings of fact
and conclusions of law pursuant to Civ.R. 52 regarding the trial court’s judgment.
She also filed the affidavits of Strowder and Spence, the transcript of Strowder’s
deposition, and Dr. Fang’s rebuttal expert report “in support of” her request. The
trial court denied the request for findings of fact and conclusions of law, and struck
Dr. Fang’s report, the affidavits, and the deposition transcript from the record,
ruling that Leeds was “simply trying to introduce new evidence that was not part of
motions pending and five days before trial. Dr. Fang prepared an expert report in the
original case and an addendum to her report for this case.
the record, and was in some instances specifically stricken from the record, so as to
use that evidence in her appeal.” This appeal followed.
II. Law and Analysis
A. Dr. Fang’s Rebuttal Expert Report
In her first assignment of error, Leeds contends that the trial court
abused its discretion in striking Dr. Fang’s rebuttal expert report supplied on August
31, 2020, as an attachment to her brief in opposition to Weltman’s summary
judgment motion. She contends that the rebuttal report was timely supplied.
Leeds points to Loc.R. 21.1(B) of the Court of Common Pleas of
Cuyahoga County, General Division, regarding expert reports, which provides that
“all supplemental reports must be supplied no later than thirty (30) days prior to
trial.” She contends that she fully complied with the trial court’s June 19, 2020
deadline for the submission of Dr. Fang’s primary expert report, and because the
trial court did not set a deadline for rebuttal expert reports, she had until 30 days
prior to trial, or February 6, 2021, to file any rebuttal expert report. She further
contends that Weltman was not prejudiced by the submission of Dr. Fang’s rebuttal
report because it did not present any new statistical theories or evidence but merely
pointed out the errors and lack of credibility of Weltman’s expert.
Our standard of review concerning the trial court’s ruling on a Loc.R.
21.1 question is abuse of discretion. Blandford v. A-Best Prods. Co., 8th Dist.
Cuyahoga Nos. 85710 and 86214, 2006-Ohio-1332, ¶ 13; see also Dolan v. Cleveland
Builders Supply Co., 8th Dist. Cuyahoga No. 62711, 1993 Ohio App. LEXIS 3080,
20 (June 17, 1993) (“The trial court has discretion to determine whether a party has
complied with Loc.R. 21.1 and to determine the appropriate sanction for its
transgression.”) An abuse of discretion is more than an error of judgment; it means
that the trial court’s judgment was arbitrary, unconscionable, or unreasonable.
Blakemore v. Blakemore, 5 Ohio St.3d 217, 219, 450 N.E.2d 1140 (1983). We find
no abuse of discretion here.
Initially, we disagree with Leeds’s assertion that the supplemental
report was timely filed because it was filed 30 days prior to trial. The argument is
not applicable to the circumstances here because Leeds sought to rely on the
supplemental report at the summary judgment stage of the proceedings, not at trial.
Further, Loc.R. 21.1(A) states that “[t]he parties shall submit expert
reports in accord with the time schedule established at the Case Management
Conference.” On June 6, 2020, the trial court set an updated case management
schedule, which required Leeds to serve her expert report to Weltman by June 19,
2020. Leeds served Dr. Fang’s rebuttal report more than two months after the
expert report deadline, however, and after Weltman had already filed its motion for
summary judgment. Not only had the deadline for serving expert reports passed
when Leeds served Dr. Fang’s rebuttal report but, as the trial court noted in its
judgment entry striking the supplemental report, Leeds did not request nor did the
trial court grant her leave to file a supplemental report after the expert report
deadline had passed. Accordingly, the rebuttal expert report was not timely filed.
We likewise find no merit to Leeds’s assertion that Weltman was not
prejudiced by the late filing of Dr. Fang’s rebuttal expert report. Weltman obviously
relied on Leeds’s previously produced expert reports to prepare its motion for
summary judgment and had no notice of the rebuttal report. The lack of notice of
the rebuttal expert report hampered Weltman’s ability to prepare its motion for
summary judgment and thereby prejudiced its ability to defend against Leeds’s
claims.
This court addressed the identical situation in Saikus v. Ford Motor
Co., 8th Dist. Cuyahoga No. 77802, 2001 Ohio App. LEXIS 1696 (Apr. 12, 2001), and
held that the trial court did not abuse its discretion in granting Ford’s motion to
strike the appellant’s supplemental expert report where (1) the plaintiff attempted
to use the supplemental expert report in responding to Ford’s summary judgment
motion, (2) Ford relied on the previous reports of plaintiff’s expert in preparing its
motion, and (3) the deadline for exchanging expert reports had passed. Id. at 10.
Noting that the primary purpose of Loc.R. 21.1 “is to avoid prejudicial surprise
resulting from noncompliance with the report requirement,” this court found that
“the trial court did not abuse its discretion by refusing to allow appellants to sandbag
Ford with this new evidence.” Id.
We reach the same result here and find no abuse of discretion in the
trial court’s order striking Dr. Fang’s rebuttal report from the record. The first
assignment of error is overruled.
B. Affidavits
In her second assignment of error, Leeds contends that the trial court
abused its discretion in striking the affidavits of former coworkers Strowder and
Spence, which were produced as Exhibits A and D to her brief in opposition to
Weltman’s motion for summary judgment. We again review for abuse of discretion.
Leeds failed to identify either of these witnesses in her responses to
Weltman’s first set of combined discovery requests. She likewise did not
supplement her responses to include Strowder or Spence, as required by Civ.R.
26(E). Thus, Weltman was not aware of these witnesses until after it filed its
summary judgment motion.
Leeds acknowledges that she had a duty to supplement her discovery
responses to identify persons having discoverable information and failed to do so,
but contends that witnesses should not be excluded where the failure to comply was
harmless. Civ.R. 37(C)(1); Hornikel v. C.C. Barr Sahara, Inc., 8th Dist. Cuyahoga
No. 60243, 1992 Ohio App. LEXIS 1861, 3 (Apr. 9, 1992) (“Exclusion of evidence is
not mandated unless there is noncompliance and prejudice * * *.”)
We do not find Leeds’s failure to identify Strowder and Pence to be
harmless. Leeds produced affidavits from Strowder and Pence almost three months
after the discovery cutoff and weeks after Weltman filed its motion for summary
judgment. Leeds therefore denied Weltman the opportunity to cross-examine
Strowder and Pence or conduct any discovery regarding their connection to this
matter prior to filing its motion for summary judgment.
We also are not persuaded by Leeds’s argument that Weltman was
not prejudiced because it should have known that Strowder and Pence were
potential witnesses because they are former employees of Weltman. Weltman has
employed hundreds of individuals over the years and cannot be expected to assume
that any former employee is a potential witness in a given lawsuit.
Where “a party fails to * * * identify a witness as required by Civ.R.
26(E), the party is not allowed to use that * * * witness to supply evidence on a
motion[.]” Civ.R. 37(C)(1). Thus, because the affidavits of Strowder and Spence
were not proper evidence for the trial court to consider, it did not abuse its discretion
in striking the affidavits from the record. See, e.g., Foster v. Sullivan, 10th Dist.
Franklin No. 13AP-876, 2014-Ohio-2909, ¶ 20 (trial court properly excluded
affidavit by undisclosed witness); Nichols v. Ac&S, Inc., Butler C.P. No. CV-2001-
12-3016, 2008 Ohio Misc. LEXIS 443, 3 (Sept. 3, 2008) (striking affidavit from the
record when witness was identified after the close of discovery and after motions for
summary judgment were filed). The second assignment of error is overruled.
C. Newly Asserted Evidence
In her third assignment of error, Leeds contends that the trial court
erred in striking from the record Dr. Fang’s rebuttal expert report, Strowder’s and
Spence’s affidavits, and Strowder’s deposition transcript, all of which Leeds filed “in
support of” her Civ.R. 52 motion for findings of fact and conclusions of law. The
trial court ruled that Leeds could not use “an inappropriately filed” Civ.R. 52 motion
“as a means to introduce new evidence that was not a part of the record prior to
dismissal.” Further, the court found that Leeds was using the Civ.R. 52 motion to
introduce new evidence that was not part of the record and that her misuse of Civ.R.
52 to “bootstrap” evidence into the record was inappropriate. We find no abuse of
discretion in the trial court’s ruling.
Civ.R. 52 does not apply where a court has decided a case on summary
judgment pursuant to Civ.R. 56. The rule states:
Findings of fact and conclusions of law required by this rule and by
Civ.R. 41(B)(2) and Civ.R. 23(G)(3) are unnecessary upon all other
motions including those pursuant to Civ.R. 12, Civ.R. 55 and Civ.R. 56.
This is so because the appellate court applies a de novo standard of review to a trial
court’s summary judgment decision; findings of fact and conclusions of law by the
trial court therefore serve no purpose in that situation for the court of appeals.
Accordingly, as the trial court held, Leeds’s motion for findings of fact and
conclusions of law pursuant to Civ.R. 52 was “inappropriately filed.”
The trial court had already stricken Dr. Fang’s rebuttal expert report
and Strowder’s and Pence’s affidavits from the record when Leeds filed her Civ.R.
52 motion. Similarly, Strowder’s deposition transcript was not filed with the
summary judgment briefing in the trial court. In fact, his deposition did not occur
until November 2, 2020, months after the parties filed their summary judgment
briefs, and Leeds did not file his deposition transcript with the trial court until after
the trial court had rendered its decision and the case had been dismissed.
“The record on appeal consists only of matters, or evidence, which
was before the trial court.” Pailet v. Univ. of Cincinnati Hosp., 10th Dist. Franklin
No. 82AP-952, 1983 Ohio App. LEXIS 16069, 5 (June 30, 1983). Because Dr. Fang’s
expert rebuttal report, Strowder’s and Pence’s affidavits, and the transcript of
Strowder’s deposition transcript were not timely filed, they were not part of the
record before the trial court. Their filing “in support of” Leeds’s Civ.R. 52 motion
suggests an attempt to supply for appeal evidence that Leeds should have supplied
to the trial court in connection with her motion for summary judgment.
Accordingly, the trial court did not abuse its discretion in striking them from the
record. The third assignment of error is overruled.
D. Disparate-Treatment Age Discrimination
In her fifth assignment of error, Leeds contends that the trial court
erred in granting summary judgment to Weltman on her disparate-treatment age
discrimination claim.
Civ.R. 56(C) provides that summary judgment is appropriate when
(1) there is no genuine issue of material fact, (2) the moving party is entitled to
judgment as a matter of law, and (3) after construing the evidence most favorably
for the party against whom the motion is made, reasonable minds can only reach a
conclusion that is adverse to the nonmoving party. Zivich v. Mentor Soccer Club,
Inc., 82 Ohio St.3d 367, 369-370, 696 N.E.2d 201 (1998); Temple v. Wean United,
Inc., 50 Ohio St.2d 317, 327, 364 N.E.2d 267 (1977). We review the trial court’s
judgment de novo, using the same standard that the trial court applies under Civ.R.
56(C). Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105, 671 N.E.2d 241 (1996).
Accordingly, we stand in the shoes of the trial court and conduct an independent
review of the record.
The evidentiary guideline regarding burdens of proof in
discrimination cases was set forth by the United States Supreme Court in McDonnell
Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973). In
Barker v. Scovill, Inc., 6 Ohio St.3d 146, 452 N.E.2d 807 (1983), the Ohio Supreme
Court adopted the McDonnell Douglas analytical framework and applied it to age
discrimination cases.
The McDonnell Douglas analysis involves a three-step procedure that
allocates the shifting burdens of production of evidence to the parties. Under this
analysis, the employee must first establish a prima facie case of age discrimination.
Next, the burden of production shifts to the employer to state some legitimate non-
discriminatory reasons for the employee’s discharge. Finally, the burden shifts back
to the employee to show that the employer’s stated reasons were a pretext for age
discrimination. Wang v. Goodyear Tire & Rubber Co., 68 Ohio App.3d 13, 16, 587
N.E.2d 387 (9th Dist.1990), citing McDonnell Douglas and Barker.
A prima facie claim for age discrimination may be proven by direct or
circumstantial evidence. Vickers v. Wren Indus., 2d Dist. Montgomery No. 20914,
2005-Ohio-3656, ¶ 25. Absent direct evidence of age discrimination (of which Leeds
has offered none), a plaintiff seeking to establish a prima facie case must show that
she (1) is a member of a protected class, (2) was subject to an adverse employment
decision, (3) is qualified for the position, and (4) was replaced by a substantially
younger person or a similarly situated nonprotected employee was treated more
favorably. Mauzy v. Kelley Servs., 75 Ohio St.3d 578, 582, 664 N.E.2d 1272 (1996).
When a plaintiff’s position is eliminated in a RIF, the fourth element
of the prima facie case is modified to require the plaintiff to provide additional
evidence, whether direct, circumstantial, or statistical, to establish that age was a
factor in the decision to terminate. Vickers at ¶ 29, citing Mack v. B.F. Goodrich
Co., 121 Ohio App.3d 99, 101-102, 699 N.E.2d 97 (8th Dist.1997); Kundtz v. AT&T
Solutions, Inc., 10th Dist. Franklin No. 05AP-1045, 2007-Ohio-1462, ¶ 21. As a
result, a plaintiff claiming age discrimination carries a greater burden of supporting
his allegations of age discrimination where the termination is due to economic
necessity. Ramacciato v. Argo-Tech Corp., 8th Dist. Cuyahoga No. 84557, 2005-
Ohio-506, ¶ 29. The rationale for this burden is that “an employer’s decision to
discharge a qualified, older employee should not be considered ‘inherently
suspicious’ because ‘in a RIF, qualified employees are going to be discharged.” Id.,quoting Brocklehurst v. PPG Indus., 123 F.3d 890, 896 (6th Cir.1997). Thus, in a
RIF case, the plaintiff must offer some additional evidence to show a discriminatory
intent by the employer.
The trial court properly granted Weltman’s summary judgment
motion because Leeds failed to establish a prima facie case of age discrimination.
Specifically, she did not provide any evidence demonstrating that she was replaced
by a substantially younger person. “[A] prima facie case of age discrimination is not
established unless the employee shows that he or she was actually replaced by a
younger person.” Carpenter v. Wellman Prods. Group, 9th Dist. Medina No.
03CA0032-M, 2003-Ohio-7169, ¶ 17. “A person is replaced only when another
employee is hired or reassigned to perform the plaintiff’s duties.” Barnes v.
Gencorp, Inc., 896 F.2d 1457, 1465 (6th Cir.1990).
The evidence is clear that Leeds’s job duties were redistributed to the
remaining QAS employees in her department, all of whom were over 40 years of age.
“Where there is no new employee hired as a ‘replacement’ for the discharged
employee but rather the discharged employee’s job duties are redistributed among
a number of employees, if one employee in that redistribution group is a member of
the same protected class as the discharged employee, the fourth element is
‘necessarily’ not satisfied.” Vickers, 2d Dist. Montgomery No. 20914, 2005-Ohio-
3656 at ¶ 26. Leeds offered no evidence that she was replaced by anyone at
Weltman, let alone replaced by a substantially younger employee. Nor did she
dispute that her duties are now being performed by the other QAS employees, all of
whom are over 40 years of age. Because Leeds’s job duties were redistributed among
employees all of whom are members of the same protected class, the fourth element
of the prima facie case is not satisfied.
Nevertheless, Leeds contended in her summary judgment motion
that she established a prima facie case of disparate-treatment age discrimination
because although she was not replaced, she was treated differently than similarly-
situated, younger employees. Specifically, she contended that five younger
employees were offered the option to switch positions at the firm rather than be
included in the RIF. However, the record evidence demonstrated that all five
individuals worked in different departments than Leeds, had different job duties
than she did, and worked under different supervisors. Accordingly, none of these
employees were “similarly situated” to Leeds, and her allegations about them are
therefore irrelevant. See, e.g., Almond v. ABB Indus. Sys., S.D. Ohio No. C2-95-707,
2001 U.S. Dist. LEXIS 6507, 91-92 (Mar. 6, 2001) (retaining younger employees in
positions for which plaintiff was qualified was irrelevant because employees in
different departments with different supervisors are not similarly situated).
Furthermore, Leeds’s argument that Weltman singled her out due to her age by not
offering her another position at the time of the RIF is undermined by the fact that
the evidence demonstrates that five employees under the age of 40 let go in the RIF
were not offered other positions at the firm.
Moreover, Leeds was encouraged by Human Resources to apply for
any open position at the firm for which she might be qualified, but chose not to apply
at the time she was separated in the RIF. And although she relies on the fact that
she applied for and was not selected for positions with Weltman in November 2017
and January 2018, Weltman’s personnel decisions more than one year after the
2016 RIF are not legally relevant to this case.
“Without evidence that [the employer] treated similarly situated
employees outside of the protected class differently, [an employee] cannot establish
a prima facie case of age discrimination.” Wagner v. Matsushita Electronic
Components Corp. of Am., 93 Fed.Appx. 714, 717 (6th Cir.2004). The trial court
properly granted summary judgment to Weltman on Leeds’s disparate-treatment
age discrimination claim, and the fifth assignment of error is overruled.
E. Disparate-Impact Age Discrimination
In her fourth assignment of error, Leeds contends that the trial court
erred in granting summary judgment to Weltman on her disparate-impact age
discrimination claim.
Disparate-impact discrimination “‘[i]nvolves employment practices
that are facially neutral in their treatment of different groups but fall more harshly
on one group.’” Chisholm v. Cleveland Clinic Found., 2019-Ohio-3369, 141 N.E.3d
674, ¶ 28 (8th Dist.), quoting Albaugh v. Columbus, 10th Dist. Franklin No. 02AP-
687, 2003-Ohio-1328, ¶ 11. “Indeed, ‘some employment practices, adopted without
a deliberately discriminatory motive, may in operation be functionally equivalent to
intentional discrimination.’” Id., quoting Watson v. Ft. Worth Bank & Trust, 487
U.S. 977, 988, 108 S.Ct. 2777, 101 L.Ed.2d 827 (1988).
“To establish a disparate-impact-discrimination claim, the plaintiff
must identify a specific employment practice that is allegedly responsible for any
observed disparity and present relevant statistical evidence sufficient to show that
the employment practice in question caused the alleged discrimination.” Id., citing
Watson at id.The statistical evidence offered in support of a disparate-impact
discrimination claim must be statistically significant. Id. at ¶ 30. “Statistical
significance establishes that the outcome of a particular process is not due to chance,
but rather is causally linked to the variable at issue.” Id., citing Bert v. AK Steel
Corp., S.D.Ohio No. 1:02-cv-00467, 2006 U.S. Dist. LEXIS 22904, 6 (Apr. 24,
2006). “In other words, ‘statistical disparities must be sufficiently substantial that
they raise such an inference of causation.’” Id., quoting Watson at 994-995. “‘An
adverse effect on a single employee, or even a few employees, is not sufficient to
establish disparate impact.”’ Id., quoting Warden v. Ohio Dept. of Natural
Resources, 2014-Ohio-35, 7 N.E.3d 533, ¶ 54 (10th Dist.).
With regard to the “specific employment practice” element of her
disparate-impact claim, Leeds contended in her motion for summary judgment that
Weltman used a “scorecard” in a way that had an adverse impact on older employees
who were included in multiple RIFs from 2008 through 2016. But the evidence
refutes this claim. Weltman only began using the “scorecard,” which collects
objective employment criteria such as seniority, discipline, and performance, to
evaluate employees in 2016. Thus, the scorecard could not have been the “specific
employment practice,” as alleged by Leeds, that caused a disparate impact based on
data from 2008 to 2016.
Additionally, Leeds’s attempt to establish that the scorecards were a
facially neutral employment practice that had an adverse impact on older employees
is undermined by her assertion in her motion for summary judgment that the
scorecard was “facially discriminatory” and “constitute[d] disparate treatment”
because it included the employee’s age for use by decisionmakers. (Leeds’s motion,
p. 42). As the district court found in Leeds’s federal lawsuit against Weltman,
because the scorecard included age, “it is not a neutral policy or practice that
resulted in an adverse disparate impact” on Leeds. Merhulik v. Weltman, N.D. Ohio
No. 1:20 CV 1188, 2020 U.S. Dist. LEXIS 229434, 10-11 (Dec. 7, 2020);4 see also
Fannon v. AAP St. Marys Corp., 6th Cir. No. 96-3506, 1997 U.S. App. LEXIS 23776(Sept. 5, 1997) (disparate impact theory is inapplicable to a facially discriminatory
policy).
Furthermore, even if Leeds had identified a specific employment
practice to support her disparate-impact claim, she did not present a statistically
relevant analysis to prove that the employment practice caused an adverse impact
on employees over 40. In her summary judgment motion, Leeds relied on the
calculations and conclusions in Dr. Fang’s March 14, 2018 report. In the report, Dr.
Fang’s first analysis compared the number of employees separated in each RIF
during the years 2008-2016 to the number of “active” employees on a yearly basis.
Dr. Fang’s second analysis in the report compared the total number of employees
separated in all RIFs during 2008-2016 to the total number of “active” employees
during 2008-2016.
“Active employee” was determined by Dr. Fang to be employees who
were hired in a particular year and were still employed at the time Dr. Fang
completed her calculations. As pointed out by Weltman’s expert, Dr. Dubravka
Tosic, in his report, this definition of “active employee” obviously excluded a number
4 Leeds was formerly known as Katherine Merhulik.
of employees from Dr. Fang’s calculations. Additionally, as also noted by Dr. Tosic,
this definition, and consequently Dr. Fang’s methodology, differs from common
statistical analysis, which would compare the proportion of RIF’d employees by age
(those under 40 and those 40 and over) to the proportion of employees who were
actively employed during the same time period by age, irrespective of when they
were hired. Dr. Fang’s calculations are therefore not “statistical evidence of a kind
and degree sufficient to show that the practice in question has caused the alleged
discrimination.” Warden, 10th Dist. Franklin No. 13AP-137, 2014-Ohio-35 at ¶ 51.
Leeds also relied on Dr. Fang’s addendum report, in which Dr. Fang
compared the total score on the scorecard assigned to each employee included in the
2016 RIF to the total score assigned to each “active” employee who was not included
in the RIF. But these calculations are irrelevant to Weltman’s selection process and
the disparate-impact analysis because employees were selected for the 2016 RIF
based upon each department’s business conditions. Thus, employee scores were
compared to others in the same position or department, and not across the entire
firm, unlike Dr. Fang’s calculations in the addendum. Dr. Fang’s statistical analysis
is therefore inapplicable to facts at issue here, and consequently, has little probative
value.
Finally, courts have consistently held in RIF cases that the
appropriate statistical analysis is not the termination rate but the retention rate,
which Dr. Fang’s calculations do not examine or evaluate. See, e.g., Smith v. Allstate
Ins. Co., N.D. Ohio No. 5:04CV2055, 2005 U.S. Dist. LEXIS 13015, 30 (June 30,
2005); Smith v. Xerox Corp., 196 F.3d 358, 368 (2d Cir.1999) (“[T]he questions to
be answered are thus what is the composition of the population subject to the
reduction in force, what was the retention rate of the protected group compared to
the retention rate of other employees, and how much of a differential in selection
rates will be considered to constitute a disparate impact.”) Instead, all of Dr. Fang’s
calculations are based solely upon the termination rate of employees over 40 years
old and those under 40 years of age.
Accordingly, for the reasons stated above, the trial court properly
determined that Leeds “failed to present probative statistical evidence”
demonstrating disparate-impact age discrimination, and it properly granted
summary judgment to Weltman on this claim. The fourth assignment of error is
overruled.
F. Pretext
Although not necessary to our determination that the trial court
properly granted summary judgment to Weltman on her disparate treatment and
disparate-impact age discrimination claims, we further find that even if Leeds had
proved a prima facie case of either disparate treatment or disparate impact age
discrimination, Weltman was still entitled to summary judgment under the
McDonnell Douglas analysis because it proffered a legitimate, nondiscriminatory
reason for her termination (economic necessity) that Leeds failed to demonstrate
was a pretext for age discrimination.
To establish pretext, Leeds was required to demonstrate that
Weltman’s reason for her termination (1) had no basis in fact, (2) did not actually
motivate the termination decision, or (3) was insufficient to warrant the
termination. Kundtz, 10th Dist. Franklin No. 05AP-1045, 2007-Ohio-1462 at ¶ 32.
Leeds attempted to establish pretext by arguing that Weltman’s
stated reason for her termination had no basis in fact because Weltman “fell woefully
short” of establishing that the September 2016 RIF was the result of economic
necessity. But the testimony of Weltman’s then-current chief operations officer,
chief financial officer, and two members of its management committee established
that in 2016, the regulations implemented by the Consumer Financial Protections
Bureau impacted the collections industry as a whole and that, as a result, Weltman’s
revenue was dramatically lower than expected. The evidence further established
that Weltman’s revenue forecast for future months was well below budget, and in
August 2016, Weltman borrowed against the firm’s line of credit in order to meet
payroll for the month. As a result, Weltman determined that in addition to other
financial changes — such as a decrease in shareholder draws, offers of early
retirement, and banning unnecessary travel or entertainment — it needed to reduce
approximately two million dollars in annual payroll expense. Although Leeds
contends that Weltman could only establish economic necessity by providing
financial records to the court, the record reflects that it provided detailed, firsthand
evidence of its dire financial state at the time of the 2016 RIF from a variety of
sources, thereby establishing economic necessity.
Nor did Leeds establish pretext by demonstrating that Weltman had
effective alternatives to the 2016 RIF that would not have caused the alleged
discriminatory impact. Although Leeds contends that Weltman should have
furloughed employees instead of terminating them, she presents no evidence that
this alternative would have impacted her or any other employees included in
Weltman’s RIFs over the years any differently. Furthermore, the evidence showed
that although Weltman engaged in other cost-saving measures prior to resorting to
the 2016 RIF, there were no equally effective alternatives to the RIF available.
Nor did Leeds present any evidence showing the RIF was a pretext to
terminate her because of her age or that her termination was not warranted. Leeds
and the other employees selected for termination in the RIF were chosen on the
basis of objective, neutral guidelines applied to all employees regardless of their age.
Indeed, although age was listed on the scorecard, it was not a factor for management
to consider or to assign a point value, and it had no bearing on whether an employee
was chosen for the RIF. Although Leeds contends that she should not have been
selected for the RIF because of her “excellent job performance,” her personal
opinion about her performance at Weltman is insufficient to prove pretext. Kundtz
at ¶ 40 (“An employee’s own opinions about his or her qualifications do not establish
a material factual dispute on the issue of pretext.”) Similarly, Leeds’s assertion that
her July 2016 discipline was “bogus” is mere conjecture that is insufficient to
withstand a summary judgment motion. Harris v. Greater Cleveland Regional
Transit Auth., 8th Dist. Cuyahoga No. 89541, 2008-Ohio-676, ¶ 18 (“Mere
conjecture that the employer’s proffered reason is pretext is insufficient to withstand
a summary judgment motion.”).
Leeds’s argument that the RIF was a pretext for age discrimination is
also refuted by evidence that Weltman hired Leeds when she was 52 years of age and
promoted her when she was 55, and the September 2016 RIF included individuals
of ages ranging from 23 to 67 years of age. Leeds failed to provide evidence
demonstrating that her separation from employment was related to her age and
offered only speculation that her age was the actual reason motiving her discharge.
Accordingly, she failed to demonstrate that the RIF was a pretext for discrimination.
G. Punitive Damages
In her sixth assignment of error, Leeds contends that the trial court
erred in granting summary judgment to Weltman on the issue of punitive damages.
“Actual malice, necessary for an award of punitive damages, is (1) that state of mind
under which a person’s conduct is characterized by hatred, ill will, or a spirit of
revenge, or (2) a conscious disregard for the rights and safety of other persons that
has a great probability of causing substantial harm.” Preston v. Murty, 32 Ohio
St.3d 334, 335, 512 N.E.2d 1174 (1987).
There is no evidence that Weltman acted with any malice. Leeds was
selected for the economically necessary RIF based upon objective criteria, her duties
were distributed to the remaining employees in her department, all of whom were
over age 40, and she was not replaced. Thus, Weltman is entitled to summary
judgment with regard to the punitive damages claim, and the sixth assignment of
error is overruled.
Judgment affirmed.
It is ordered that appellee recover from appellant costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate be sent to said court to carry this judgment
into execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27
of the Rules of Appellate Procedure.
KATHLEEN ANN KEOUGH, PRESIDING JUDGE
MARY EILEEN KILBANE, J., and
EMANUELLA D. GROVES, J., CONCUR