Lewis v. Aerospace Community Credit Union

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
No. 96-2692
Paul E. Lewis, *
*
Appellant, *
*
v. *
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Aerospace Community Credit *
Union, a Missouri corporation,
*
*
Appellee. *
Appeals from the United
States
No. 96-3130 District Court for the
E a s t e r n
District of Missouri.
Gregory F. Kelleher, Jr., *
*
Appellant, *
*
v. *
*
Aerospace Community Credit *
Union, a Missouri corporation,
*
*
Appellee, *
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Nina G. Pilger, *
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Defendant, *
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American Association of Retired
*
Persons, *
*
Amicus Curiae. *
Submitted: March 10, 1997
Filed: May 29, 1997
Before FAGG, HEANEY, and MORRIS SHEPPARD ARNOLD, Circuit
Judges.
HEANEY, Circuit Judge.
Paul E. Lewis and Gregory F. Kelleher, Jr. each
appeal from a grant of summary judgment by the Eastern
District of Missouri1 to their former employer, Aerospace
Community Credit Union ("Aerospace"), dismissing their
discrimination claims brought under the Age
Discrimination in Employment Act (ADEA), 29 U.S.C. §§
621-634 (1994). Because we agree with the district court
that neither plaintiff has presented sufficient evidence
of discrimination to survive summary judgment, we affirm
both decisions.
1
Kelleher's case was before United States District Judge Jean C. Hamilton while
Lewis's case, by consent of the parties pursuant to 28 U.S.C. § 636(c), was before
Magistrate Judge Frederick R. Buckles. Although these cases were filed separately in
the district court and were individually appealed to this court, we have decided on our
own motion to decide the appeals in one opinion because they involve substantially the
same parties, issues, and legal arguments.
2
I.
In 1986, when he was forty-six years old, Kelleher
began working for Aerospace as a loan manager and in
1992, he became manager of one of the credit union’s
branch offices. Lewis began working for Aerospace in
1991, at age forty-seven as the Vice President of
Management Information Systems, a new position created to
oversee the expansion of Aerospace’s computer system and
the conversion of a recently-merged credit union to the
same system.
In the early 1990s, Aerospace experienced financial
troubles. The state and federal agencies in charge of
monitoring the credit union’s financial stability were
critical of its performance and recommended that it
develop a plan to reduce its net operating expenses. As
part of its plan, Aerospace reduced office expenses such
as travel, training, and maintenance, and centralized its
lending activities to one of three branch offices.
Aerospace also eliminated several positions: the
Executive Vice President, the Executive Secretary,
Lewis's position, and all three branch manager positions.
As a result, Aerospace fired Kelleher and Lewis on
October 31, 1994. Kelleher was fifty-four years old at
the time and Lewis was fifty. According to Kelleher and
Lewis, three of the four persons whose positions were
eliminated and who did not find other work in the credit
union were over fifty; the two employees who found other
work with Aerospace were under fifty. Aerospace
acknowledges that neither Kelleher nor Lewis experienced
any performance problems and asserts that, but for the
3
company’s need to reduce expenses, neither would have
been fired.
After exhausting their administrative remedies with
the Equal Employment Opportunity Commission, Kelleher and
Lewis each initiated a lawsuit against Aerospace,
alleging that its decision to terminate their positions
was made on the basis
4
of age and that it had a disparate impact on persons
over the age of fifty.2 Aerospace moved for summary
judgment in each case, arguing that as to their claims of
disparate treatment, neither claimant could establish a
prima facie case of age discrimination and that even if
they could, they had not rebutted Aerospace's legitimate
reasons for the reduction decisions. Aerospace also
argued that disparate impact claims are not cognizable
under the ADEA and that even if they were, Kelleher and
Lewis had not presented sufficient evidence to survive
summary judgment. In each case, the district court
granted summary judgment for Aerospace on both the
disparate treatment and the disparate impact claims.
Kelleher and Lewis appeal.
II.
We review the grant of summary judgment de novo to
determine whether the record, viewed in the light most
favorable to the nonmoving party, reveals any genuine
issue of material fact and whether the moving party is
entitled to a judgment as a matter of law. Fed. R. Civ.
P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322
(1986).
A. Disparate Treatment
2
As a separate count in his complaint, Kelleher also alleged that the President of
Aerospace, Nina Pilger, violated the ADEA by referring to him "by derogatory age-
related names and epithets" in the presence of other employees. Although we agree
with the district court that Pilger's comments alone do not give rise to an independent
age discrimination claim, we consider the comments in connection with Kelleher's other
evidence of age discrimination to determine whether he has presented sufficient
evidence to survive summary judgment on his disparate treatment claim.
5
We review Kelleher’s and Lewis’s age discrimination
claims, based largely on circumstantial evidence, under
the familiar McDonnell Douglas, burden-shifting analysis.
Halsell v. Kimberly-Clark Corp., 683 F.2d 285, 289 (8th
Cir. 1982) (McDonnell-Douglas framework applicable to
ADEA claims). Under that analysis, if
6
a plaintiff demonstrates a prima facie case of
discrimination, the employer must offer a legitimate,
nondiscriminatory explanation for its employment
decision. St. Mary’s Honor Ctr. v. Hicks, 509 U.S. 502,
507 (1993); Texas Dep’t of Community Affairs v. Burdine,
450 U.S. 248, 254 (1981). Once the employer meets its
burden of production, the legal presumption raised by the
prima facie case is rebutted and the plaintiff retains
the ultimate burden of persuading the trier of fact that
the employer’s true motivation for the challenged
employment decision was intentional discrimination.
Hicks, 509 U.S. at 508 (quoting Burdine, 450 U.S. at
256).
1. Kelleher
There is no dispute that Kelleher was over forty
years old at the time of his discharge, that he was
qualified for the job, and that he was discharged. In
addition to these basic requirements, Kelleher points to
the circumstances surrounding his discharge as
circumstantial evidence that his age was a motivating
factor in Aerospace’s decision to fire him. All three
branch manager positions were eliminated, but the two
other employees who had been branch managers and who were
under age fifty were reassigned within the credit union
to new positions not offered to Kelleher. Although
redistribution of a discharged employee’s duties to
younger employees is insufficient by itself to establish
a prima facie case of age discrimination, Bialas v.
Greyhound Lines, Inc., 59 F.3d 759, 763 (8th Cir. 1995),
this case appears to involve more than mere
redistribution of duties. After Aerospace determined
7
that the branch manager positions were to be eliminated,
the only branch manager who ultimately lost his job,
Kelleher, was over fifty. Thus, the specific
circumstances of this case raise some suspicion as to
Aerospace’s motives in implementing its reduction in
force. See Taylor v. Canteen Corp., 69 F.3d 773, 780
(7th Cir. 1995) (“[A]n employer
8
implementing a [reduction in force] may not favor younger
employees over older ones by finding new positions only
for younger workers.”).3
Kelleher also relies on statistical evidence to
support his claim. He asserts that between 1993 and
1995, Aerospace terminated its only three nonbargaining-
unit employees who were over fifty years old and only
terminated one person under the age of forty. As the
district court recognized, given the sample size of the
statistical evidence, it is “certainly not conclusive
evidence of age discrimination in itself, but it is
surely the kind of fact which could cause a reasonable
trier of fact to raise an eyebrow, and proceed to assess
the employer’s explanation for this outcome.” MacDissi
v. Valmont Indus., Inc., 856 F.2d 1054, 1058 (8th Cir.
1988) (referring to an employer’s decision to terminate
the two oldest employees in a department in which all but
one of the remaining employees were younger than forty
years old). The district court determined, however, that
Kelleher failed to create an inference of age
discrimination because taking into consideration the
employees in the collective bargaining unit, the age-
related disparity “disappears.” In our estimation, the
nonmanagement, organized employees are irrelevant to
3
The district court determined that there was no evidence that the positions to which
Kelleher suggests he could have been reassigned were open when he was discharged,
that he applied for them, or that he was qualified for them. Although there was
evidence in the record to support that the reassigned employees were more qualified
than Kelleher for their new positions, viewing the evidence in the light most favorable
to Kelleher, these positions were awarded, and thus open, at the time of his discharge
and he was qualified for them. That Kelleher was not given an opportunity to apply for
the jobs does not destroy his argument.
9
Kelleher’s claim that Aerospace has discriminated against
its managerial employees over the age of fifty both
because of the difference in the nature of the positions
and safeguards provided to organized employees both
locally and nationally. Thus, we consider the evidence
as Kelleher has presented it, giving it the weight,
however slight, that it is due.
10
We believe that the circumstances surrounding
Kelleher’s discharge and the fact that Aerospace fired
all three management employees over the age of fifty
provide sufficient additional evidence to establish a
prima facie case of age discrimination.4 We thus turn to
the nondiscriminatory justifications Aerospace has
offered for its employment decisions affecting Kelleher.
In addition to the evidence of its financial need to
reduce expenses, Aerospace contends that the branch
manager positions were no longer necessary after it
centralized its lending services to one branch office.
Kelleher does not challenge this specific reason given
for his termination. Rather, he argues that the fact
that Aerospace gave all of its employees a five percent
raise the January following his discharge undermines the
4
Kelleher makes two additional arguments to support his prima facie case, which we
find to lack merit. First, Kelleher argues that Pilger’s admission that his salary was one
factor she considered in deciding to fire him raises an inference of age discrimination
because of the correlation between a higher salary and age. An employer’s reliance on
factors correlated with age does not, in itself, constitute age discrimination. Hanebrink
v. Brown Shoe Co., No. 96-2654 (8th Cir. April 14, 1997) (citing Hazen Paper Co. v.
Biggins, 507 U.S. 604, 611 (1993)). Kelleher also contends that several age-related
remarks made by Pilger provide further evidence of Pilger’s bias against older persons.
In his deposition, Kelleher testified that Pilger joked about his age in small groups at
work and in larger meetings and that he found the comments embarrassing. He also
recalled a specific incident in which, after a round of golf at a company-sponsored
tournament, Pilger told him that his poor performance on the course probably had
something to do with his age. It is unclear from the record when any of the comments
were made and, as to the comments made at work, what was said and in what context.
Thus, we have absolutely no basis on which to evaluate the extent to which these
comments indicate an age-related bias on the part of Pilger and whether such bias had
any effect on her decision to fire Kelleher.
11
credit union’s assertion that it was experiencing
financial difficulties and needed to reduce its workforce
at all. We are not persuaded that a wage increase for
retained employees and a need to eliminate unnecessary
positions are per se inconsistent. In fact, the evidence
indicates that a raise for union employees was
12
mandatory under the terms of Aerospace’s collective
bargaining agreement with the employee union and that
management had already undergone a two and one-half year
wage freeze.
With respect to the fact that the younger, former
branch managers were given new assignments in the credit
union, Aerospace has provided specific explanations as to
why the retained employees were better suited for the new
positions than Kelleher.5 Kelleher contends that he was
equally qualified for the positions. Even if we were to
agree with Kelleher’s own assessment of their relative
qualifications, a comparison that reveals that Kelleher
was only as qualified as the retained employees would not
raise an inference of discrimination. See Chock v.
Northwest Airlines, Inc., No. 96-204, slip op. at 6-7
(8th Cir. May 14, 1997).
Because we agree with the district court that
Kelleher has not produced any evidence to challenge the
nondiscriminatory explanations Aerospace has offered for
its employment decisions, we affirm the grant of summary
judgment for Aerospace with respect to Kelleher’s
disparate treatment claim.
5
One former branch manager, Mary Jo Garofalo, became the Vice President of
Operations. Pilger testified at her deposition that Garofalo has been working in the
credit union longer, has been involved in its growth, and is generally more
knowledgeable in the development of the credit union. The other former branch
manager, Pat White, became the Manager of Business Development. Although
Kelleher had been at the credit union longer than White (in fact, he had trained her in
on Aerospace’s policies and procedures), Pilger testified that Kelleher was not qualified
for the business development position because he lacks the sales ability necessary to
promote the credit union’s services to employee groups or potential employee groups.
13
2. Lewis
Lewis’s age discrimination claim is more tenuous than
Kelleher’s. Again, no one disputes that he was over
forty years old when his position was eliminated, that he
was qualified for the position, and that he was
discharged. He produces little other evidence to support
his claim, however. He relies on the same statistical
evidence as presented by Kelleher, similar wage
considerations made by Pilger in eliminating his
position, and the same five percent wage increase after
his termination. Assuming that Lewis could establish a
prima facie case of age discrimination, he, like
Kelleher, has presented no evidence to discredit the
nondiscriminatory reasons offered by Aerospace for his
termination. In looking for areas in which a reduction
in Aerospace’s workforce would least impact the operation
of the credit union and the services it offered to its
customers, Pilger determined that Lewis’s supervisory
position over data processing was no longer necessary.
The younger employee who assumed some of his duties
simply returned to the position she had occupied prior to
the creation of Lewis’s position. In light of the
evidence before us, we agree with the district court that
Lewis has failed to make a submissible case of age
discrimination.
B. Disparate Impact
We also agree with the district court that neither
claimant has presented sufficient evidence to support a
claim of disparate impact discrimination based on a
disparate-impact theory. Disparate-impact claims
14
challenge "'employment practices that are facially
neutral in their treatment of different groups but that
in fact fall more harshly on one group than another and
cannot be justified by business necessity.'" Hazen Paper
Co. v. Biggins, 507 U.S. 604, 609 (1993) (quoting
International Bhd. of Teamsters v. United States, 431
U.S. 324, 335-36 n.15 (1977)). To prove discrimination
under this theory, a plaintiff must identify challenge a
facially-neutral employment practice, demonstrate a
disparate impact upon the group to which he or she
belongs, and prove causation. Watson v. Fort Worth Bank
& Trust, 487 U.S. 977,
15
994-95 (1988). For a prima facie case, plaintiffs "must
offer statistical evidence of a kind and degree
sufficient to show that the practice in question has
caused the exclusion of applicants for jobs or promotions
because of their membership in a protected group." Id.
Aerospace contends that disparate-impact claims are
not cognizable under the ADEA. We disagree. Although
the Supreme Court has yet to rule on this legal question,
see Hazen Paper, 507 U.S. at 610, our circuit continues
to recognize the viability of such claims under the ADEA.
Smith v. City of Des Moines, Iowa, 99 F.3d 1466, 1470
(8th Cir. 1996). Nonetheless, we agree with the district
court in both cases that the claimants have not presented
statistical evidence of the kind or degree necessary to
establish a prima facie case of age discrimination. The
sample size of three nonbargaining-unit employees over
the age of fifty is simply too small independently to
support a discrimination claim. See MacDissi, 856 F.2d
at 1058 (explaining that statistical evidence for a
disparate impact claim must be much stronger than
circumstantial evidence to support a disparate treatment
claim); Harper v. Trans World Airlines, Inc., 525 F.2d
409, 412 (8th Cir. 1975) (sample of five too small).
Because we have determined that the claimants failed to
establish a prima facie case, we need not address the
business justifications offered by Aerospace for its
decisions. Accordingly, we affirm the grant of summary
judgment for Aerospace on both disparate impact claims.
III.
16
Based on the foregoing, we affirm the decisions of
the district court to grant summary judgment for
Aerospace in each case with respect to all claims of age
discrimination.
MORRIS SHEPPARD ARNOLD, Circuit Judge, concurs in the
result.
17
A true copy.
Attest.
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
18