Seasonwein v. First Montauk Securities Corp.

Opinions of the United
2006 Decisions States Court of Appeals
for the Third Circuit
6-27-2006
Seasonwein v. First Montauk
Precedential or Non-Precedential: Non-Precedential
Docket No. 03-4666
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No: 03-4666
JEROME SEASONWEIN
Appellant
v.
FIRST MONTAUK SECURITIES CORPORATION
Appeal from the United States District Court
for the District of New Jersey
District Court No: 03-cv-00459
District Judge: Honorable Anne E. Thompson
Submitted Pursuant to Third Circuit LAR 34.1(a)*
November 12, 2004
Before: McKee, Chertoff,** Circuit Judges, and
Buckwalter, Senior District Judge,***
Filed June 27, 2006
OPINION
PER CURIAM
*
The case was held CAV, pending the Supreme Court’s decision in Smith v. City of
Jackson, 544 U.S. 228 (2005).
**
Judge Chertoff was part of the panel that initially considered this case, but resigned
prior to the time the opinion was filed. The opinion is filed by a quorum of the panel. 28 U.S.C.
§ 46(d).
***
Honorable Ronald L. Buckwalter, Senior United States District Judge for the Eastern
District of Pennsylvania, sitting by designation.
Jerome Seasonwein appeals the district court’s grant of summary judgment to First
Montauk Securities in the suit he brought alleging age discrimination under the Age
Discrimination in Employment Act (“ADEA”), and the New Jersey Law Against
Discrimination (“NJLAD”). For the reasons that follow, we will affirm in part, reverse in
part, and remand for further proceedings consistent with this opinion.1
I.
Since we write primarily for the parties who are familiar with this dispute, we need
only set forth the procedural and factual background to the extent that is helpful to our
brief discussion. In reviewing a grant of summary judgment, we apply the same test the
district court should have applied. Summary judgment is appropriate only if there is no
genuine issue of material fact and the moving party is entitled to judgment as a matter of
law. Walling v. Brady, 125 F.3d 114, 116 (3d Cir. 1997). In making that determination,
we review the facts in the light most favorable to the non-moving party, Beers-Capital v.
Whetzel, 256 F.3d 120, 130 n.6 (3d Cir. 2001).
Both parties discuss the familiar allocation of the burden of proof set forth in
McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973). Seasonwein argues that the
district court erred in concluding that he had not offered sufficient evidence of pretext to
1
The district court granted summary judgment on Seasonwein’s ADEA claim and then
dismissed his state claim under the NJLAD for lack of subject matter jurisdiction. Inasmuch as
we are reversing the grant of summary judgment on the federal claim and remanding for further
proceedings, the district court will have subject matter jurisdiction to consider seasonwein’s
claim under the NJLAD.
2
overcome First Montauk’s nondiscriminatory explanation that he was terminated as part
of a reduction in force (“RIF”), necessitated by a downturn in business and reduced
revenues. First Montauk argues that there is no evidence from which a reasonable jury
could conclude that “discriminatory animus was . . . the motivating factor behind the
RIF.” Appellee’s Br. at 19. First Montauk insists that the evidence “conclusively
indicates” that it “discharged SEASONWEIN as part of an RIF, and . . . for no other
reason.” Id., at 24.
SEASONWEIN does not dispute that he was terminated as part of First Montauk’s
RIF, and it is clear that he was. However, that does not end our inquiry. First Montauk
continually stresses the business reasons for the layoffs without addressing the
fundamental issue raised by Seasonwein’s claim of age bias. The issue here is not
whether Seasonwein was terminated pursuant to a RIF undertaken to address Fist
Montauk’s declining financial situation. Rather, the issue is whether there is a genuine
issue of material fact about whether Seasonwein’s age was a factor in selecting him for
layoff pursuant to First Montauk’s RIF.2
A.
2
Accordingly, we are not impressed by the fact that “Seasonwein admitted that, at the
time of the initial lay-offs, he had already observed a decline in business and . . . ‘production at
First Montauk had dropped.’” Appellee’s Br. at 4. We noted in Olson v G.E. Astrospace, 101
F.3d 947 (3d Cir. 1996), that a plaintiff’s initial belief that he was not discriminated against is not
determinative of the ultimate issue of the employer’s motivation for an adverse employment
action.
3
Under the McDonnell Douglass analysis, an ADEA plaintiff confronted with a
motion for summary judgment must first establish a prima facie case. The burden then
shifts to the defendant to produce a legitimate, non-discriminatory reason for the adverse
action. If the defendant satisfies that burden, the plaintiff may only survive summary
judgment by coming forward with sufficient evidence to establish that either the
employer’s articulated reasons are not believable, or that an invidious discriminatory
reason was more likely than not a motivating or determinative cause of the employer’s
actions.
To establish a prima facie case, Seasonwein “must prove that (1) he was
discharged; (2) was qualified for the position; (3) was within the protected class at the
time of discharge; and (4) was replaced by someone outside the protected class.” Dreyer
v. Arco Chemical Company, 801 F.2d 651 (3 rd Cir. 1986). The district court found that
Seasonwein had successfully made out a prima facie case. He was discharged, he was
qualified for his position, and he is clearly within the class of workers protected by the
ADEA. The court also held that Seasonwein had produced evidence that he was replaced
by a younger employee, Larry Romeu. However, First Montauk claims that Romeu was
already an employee when Seasonwein was laid off and that he (Romeu) was merely
transferred to the Red Bank N.J. office from New York after Seasonwein left. See
Appellee’s Br. at 14, n. 2. Seasonwein’s complaint actually alleges that First Montauk
“transferred a substantially younger person, Lawrence Romeu, from another branch office
4
that Defendant had closed,” and that First Montauk afforded Romeu an opportunity that it
denied to Seasonwein based upon the latter’s age. Compl. at ¶ 6. However, given the
circumstances here, and Seasonwein’s claim that he was treated less favorably because of
his age, our analysis does not turn on whether Seasonwein was actually replaced by a
younger employee. “The elements of [the] prima facie case , . . . must not be applied
woodenly, but must rather be tailored flexibly to fit the circumstances of each type of
illegal discrimination.” Geraci v. Moody-Tottrup, International, 82 F.3d 578, 581 (3d.
Cir. 1996). We believe Seasonwein has produced is sufficient to raise a genuine issue of
material fact regardless of the circumstances surrounding Romeu’s transfer.
Seasonwein essentially argues that although First Montauk could clearly layoff
employees as part of the RIF that was necessitated by the downturn in revenues, it could
not do so in a manner that discriminated against him based upon his age.
As noted at the outset, we initially held this case “CAV” to await the Supreme
Court’s decision in Smith v. City of Jackson because the viability of Seasonwein’s
disparate impact argument was not at all clear. In fact, as First Montauk notes in its brief,
in DiBiase v. SmithKline Beecham Corp., 48 F.3d 719,734 (3d Cir. 1995), we expressed
skepticism about whether the ADEA encompassed a disparate impact claim.3 However,
3
Two members of the panel in DiBiase refused to join the portion of the opinion that cast
doubt upon the viability of a disparate impact theory. Judge McKee and Judge Becker both felt
that section of the opinion was not necessary. DiBiase, 48 F.3d at 71 n. 16, 732 n. 17.
Accordingly, the section addressing disparate impact only expressed the opinion of Judge
Greenberg, who authored the opinion for the panel. See Id. (“Judge Greenberg writes this
subsection only for himself.”).
5
given the Court’s holding in City of Jackson, it is now established that the ADEA does
prohibit employment practices that have a disparate impact on older workers who are
protected by the ADEA.
In arguing for summary judgment, and in arguing before us, First Montauk relies
on the undisputed evidence that it was forced to layoff workers because of an economic
downturn. However, as Seasonwein correctly notes, First Montauk has not offered any
explanation of how it determined which workers would be selected for layoff. See
Appellant’s Br. at 5. (“First Montauk’s express reasons for the reduction in force are
significant stock declines and substantial decline in firm revenues. It provided no reason
for how the determination was made to terminate or retain anyone.”).
Seasonwein now argues that he has presented sufficient proof of disparate
treatment, and disparate impact to survive a motion for summary judgment. In reviewing
a claim of disparate treatment, we determine if the evidence supports a plaintiff’s claim
that he/she, was discriminated against because of age. In contrast, in evaluating a claim of
disparate impact, we focus on whether a facially neutral employment practice had a
disparate impact on older workers in violation of the ADEA. Smith v Xerox, 196 F.3d
358, 371 (2 nd Cir. 1999).
Seasonwein relies in part on evidence of each series of layoffs undertaken by First
Montauk, in arguing that “[t]he combined salaries of those employees who were retained
who were younger than age 40 was over $14,000 higher than the combined salaries of
6
those employees who were terminated during the reduction in force of mostly employees
who were over age 40 . . .”. Appellant’s Br. at 6. We realize that totaling salaries is not
extremely helpful to the issue of discriminatory animus or disparate impact because any
apparent discrepancy may simply result from a greater number of employees being
included in either group of employees, thereby skewing the salary totals in their favor.
However, Seasonwein also points to evidence that “the average salary of those employees
who were retained who were under age 40 was nearly $3,000 higher than the average
salary of those employees over age 40 who were terminated during the reduction in
force.” Id.
Evidence that the average salary of the employees who were retained was greater
than that of the employees who were laid off is inconsistent with First Montauk’s claim
that it selected employees for layoff under the RIF only to improve the companies
financial situation. A reasonable jury could therefore reject the proffered explanation of
why Seasonwein was laid off. Although First Montauk claims that Seasonwein is not
comparing average salaries of employees who were similarly situated, that only raises an
issue that must be determined by a fact finder. Thus, under the shifting burden of the
McDonnell Douglas analysis, First Montauk had to go further and articulate how it
decided which employees would be included in the RIF. Given its failure to do that, there
is not enough on this record to grant summary judgment to First Montauk. The evidence
is insufficient to defeat Seasonwein’s claim that younger workers were favored during the
7
RIF.
Seasonwein relies in part on statistical evidence that he claims could establish that
First Montauk was motivated by an age bias in selecting him for the final round of
layoffs, and that the layoffs had a disparate impact on older workers. Courts have long
recognized that statistical evidence can be used in disparate treatment as well as disparate
impact cases. See Age Discrimination in Employment Law, Linderman and Kadue (BNA
2003), see also, Bullington v. United Air Lines, Inc., 186 F.3d 1301, 1319 (10 th Cir 1999)
(“In a disparate impact case, statistical evidence plays a central role because the plaintiff
is attempting to show a particular practice had a disproportionate impact on a particular
group, and not the employer's discriminatory intent.”).
In reviewing Seasonwein’s evidence, the district court relied in part upon the fact
that First Montauk also “discharged a substantial number of employees outside of the
protected class.” See Appellant’s Br. at 18. Seasonwein argues that the district court
should have focused on comparing only those licensed traders who were laid off because
only they are situated similarly to him. See Anderson v. Consolidated, 297 F.3d 242 (3d.
Cir. 2002). As noted above, he then claims that the average salaries of the licensed traders
who were retained was actually higher than the average of the licensed salaries who were
laid off, and that the number of older workers laid off shows that First Montauk was
trying to get a younger group of licensed traders, not just reduce expenses.
We realize, of course, that a jury might not be convinced by this evidence. We
8
also realize that there is evidence that First Montauk previously made special efforts to
retain Seasonwein and support him during the course of his employment. However, that
does not negate the fact that the evidence presented by Seasonwein combined with First
Montauk’s failure to provide any explanation of how it selected workers that would
ultimately be laidoff raises a genuine issue of material fact sufficient to allow
Seasonwein’s claim of disparate treatment under the ADEA to survive summary
judgment. It was therefore error to grant summary judgment in favor of Fist Montauk on
that claim. However, we think the district court was correct in granting summary
judgment on Seasonwein’s disparate impact claim.
As we noted above, the Supreme Court confirmed that a disparate impact claim is
cognizable under the ADEA. However, the Court also clarified that a “failure to identify
the specific practice . . .” that resulted in a particular action having a disparate impact is
fatal to a disparate impact claim under the ADEA. 544 U.S. at 241. In reviewing the
allegations at issue there, the Court observed:
petitioners have done little more than point out that the pay
plan at issue is relatively less generous to older workers than
to younger workers. They have not identified any specific test,
requirement, or practice within the pay plan that has an
adverse impact on older workers. . . . it is not enough to
simply allege that there is a disparate impact on workers, or
point to a generalized policy that leads to such an impact.
Rather, the employee is responsible for isolating and
identifying the specific employment practices that are
allegedly responsible for any observed statistical disparities.
Id. (internal quotation marks omitted) (emphasis in original). The same is true here. In
9
his brief on appeal, Seasonwein does argue that First Montauk favored younger
employees and targeted older ones in deciding who would be laid off. Those allegations
may be sufficiently specific to allow a disparate impact claim to survive summary
judgment under the City of Jackson inquiry. However, that is not what he alleged in his
complaint. Rather, the complaint that was provided to us as part of Appellant’s Appendix
in this appeal only contains allegations of disparate treatment. For example, the
Complaint states: “[First Montauk] . . . illegally terminated him because of his age,”
Complt at ¶ 1; “Plaintiff, . . . alleges that he has been discriminated against . . because of
his age, . . .” Id., at ¶ 9; “Seasonwein’s forced termination was motivated solely by
Defendant’s intent to discriminate against Plaintiff on the basis of age,” Id., at ¶ 11; and
he requests injunctive relief and damages “solely as a result of Defendant’s discrimination
against plaintiff on account of his age,. . .” Id., at ¶ 14. Those allegations of
discriminatory animus against him do not state a claim of disparate impact with any
precision, let alone with the precision required under City of Jackson.
Although Seasonwein now argues a disparate impact theory to us, he must state a
cause of action in his Complaint, not merely in his appellate brief, or in opposing a
defendant’s motion for summary judgment. Accordingly, we will reverse the district
court’s grant of summary judgment to First Montauk, insofar as it dismissed
Seasonwein’s claim of disparate treatment under the ADEA, and affirm summary
10
judgment insofar as it dismissed a claim of disparate impact.4
4
The district court did not address Seasonwein’s disparate treatment claim because it
appeared at the time to have been foreclosed by the decision in DiBiase. A10.
11