Armbruster v. Unisys Corp.

• Decision Date: 01 August 1994
• Docket Number: No. 93-1333,93-1333
• Citation: 32 F.3d 768
• Parties: 65 Fair Empl.Prac.Cas. (BNA) 828, 65 Empl. Prac. Dec. P 43,247 John P. ARMBRUSTER; Shirish K. Divehca; James G. Dodson; Jon E. Kinard; William Miller; William N. Moritz; John Patton; Jerome Robin; Edward L. Showalter; Thomas C. Stevens; James Turner; Michael J. Yagley; William P. Yanan v. UNISYS CORPORATION. Basil IWASHYNA v. UNISYS CORPORATION, John P. Armbruster; Shirish K. Divecha; James G. Dodson; Jon E. Kinard; William Miller; William N. Moritz; John Patton; Jerome Robin; Edward L. Showalter; Thomas C. Stevens; James Turner; Michael J. Yagley; William P. Yanan; Basil Iwashyna, Appellants.
• Court: U.S. Court of Appeals — Third Circuit

Page 768

32 F.3d 768

65 Fair Empl.Prac.Cas. (BNA) 828,

65 Empl. Prac. Dec. P 43,247

John P. ARMBRUSTER; Shirish K. Divehca; James G. Dodson;

Jon E. Kinard; William Miller; William N. Moritz; John

Patton; Jerome Robin; Edward L. Showalter; Thomas C.

Stevens; James Turner; Michael J. Yagley; William P. Yanan v. UNISYS CORPORATION.

Basil IWASHYNA v. UNISYS CORPORATION, John P. Armbruster; Shirish K. Divecha; James G. Dodson;

Jon E. Kinard; William Miller; William N. Moritz; John

Patton; Jerome Robin; Edward L. Showalter; Thomas C.

Stevens; James Turner; Michael J. Yagley; William P.

Yanan; Basil Iwashyna, Appellants.

No. 93-1333.

United States Court of Appeals, Third Circuit.

Argued Oct. 7, 1993.

Decided Aug. 1, 1994.

Walter H. Flamm, Jr. (argued), Frank P. Spada, Jr., Michael J. Torchia, Clark, Ladner Michael J. Ossip (argued), Joseph J. Costello, Stacy K. Weinberg, Morgan, Lewis & Bockius, Philadelphia, PA, and Joseph A. Teklits, Unisys Corp., Blue Bell, PA, for appellee.

Fortenbaugh & Young, Philadelphia, PA, for appellants.

Steven S. Zaleznick, Cathy Ventrell-Monsees, Thomas W. Osborne, American Ass'n of Retired Persons, Washington, DC, for amicus curiae American Ass'n of Retired Persons.

PRESENT: HUTCHINSON, COWEN and NYGAARD, Circuit Judges.

OPINION OF THE COURT

HUTCHINSON, Circuit Judge.

I. Introduction

Appellants, John P. Armbruster et al. (Armbruster Group), ¹ seek reversal of an order granting summary judgment in favor of appellee, Unisys Corporation (Unisys), on their claim of age discrimination under the Age Discrimination in Employment Act (ADEA), 29 U.S.C.A. Secs. 621-634 (West 1985 & Supp.1994). ² The Armbruster Group consists of fourteen Unisys employees who were terminated in February 1991 in the course of a reduction-in-force (RIF) at Unisys. The Armbruster Group claims Unisys targeted them for termination because of their age and sought to mask its illegal discrimination by selecting them for a new work group the company created for older persons it intended to terminate. Unisys then fired them almost immediately after the formation of the new group, ostensibly because the group had no work.

On appeal the Armbruster Group contends they produced evidence sufficient to show what is commonly referred to as a "mixed motives" age discrimination case by introducing overt evidence of discriminatory animus of the kind Justice O'Connor described in her concurrence in Price Waterhouse v. Hopkins, 490 U.S. 228, 109 S.Ct. 1775, 104 L.Ed.2d 268 (1989). ³ They also contend that the district court should not have granted summary judgment because it failed to view the evidence of pretext in the light most favorable to them, made its own credibility determinations, ignored evidential facts as well as reasonable inferences arising from them and incorrectly excluded as hearsay an alleged discriminatory statement made by a Unisys manager.

We hold that the district court correctly concluded the Armbruster Group's evidence of discrimination does not make out a Price Waterhouse case. We also hold, however, that the district court erred in granting summary judgment against the Armbruster Group because the circumstantial evidence present on this record, viewed in the light most favorable to the Armbruster Group, leaves a genuine issue of material fact as to whether Unisys's proffered explanation for its termination of the members of the group was a pretext for discrimination. ⁴

II. Factual History

Unisys was created in late 1986 after the merger of the Sperry and Burroughs Corporations. It then employed more than 120,000 people. During 1989, 1990 and 1991, Unisys encountered severe financial difficulties and, in those years, suffered losses of about $746 million, $551 million and $1 billion dollars. By November 1, 1992, Unisys's workforce had been reduced by half to about 60,000. The members of the Armbruster Group had worked for either Sperry or Burroughs before the merger and, at the time of their termination, averaged almost twenty-five years of service.

The specific facts material to this case began to unfold in the summer of 1990. Gerald Gagliardi (Gagliardi), a Unisys Vice President, then headed an organization within Unisys that was known as Customer Technical Services (CTS). Unisys organized CTS in 1989 so that Unisys employees, rather than non-Unisys third party vendors, could provide post-sale service and support to customers. Its goal was to unify four different divisions within Unisys and eliminate a $150 million loss that Gagliardi believed was caused by a loose practice of hiring third party vendors to perform project management and evaluate and bid large software projects. Until CTS was formed, each of Unisys's four divisions performed these functions separately.

Gagliardi began to organize a group within CTS to provide project management for all four Unisys divisions. It came to be known as the CTS Project Management Organization (CTS/PMO). Gagliardi did not have a formal business plan for this project but believed, from his own observations, that a demand for project management existed in all four Unisys divisions. Gagliardi first commandeered twelve men managed by Robert Johnson (Johnson) from an existing project management organization within Unisys's Systems Management Group (SMG), placing Johnson in charge.

In early November of 1990, four or five more people were transferred into the CTS/PMO at Gagliardi's direction. At his deposition, Johnson testified that Gagliardi personally identified the transferees for him and did not give him an opportunity to reject them. Johnson testified he immediately became concerned because there was not enough project management work for his twelve man SMG group, let alone the added transferees.

Gagliardi, however, continued to believe even more project managers would be needed to do the anticipated surge of work for the new CTS/PMO organization and so he asked David Wedean (Wedean), Vice President of Applications Development and Central Support Services at both Unisys's Atlanta, Georgia and Radnor, Pennsylvania offices, to select persons within Unisys who would be capable of performing project management work. Wedean contacted Atlanta site manager Michael Sacco (Sacco) and Radnor site manager Margaret Ryan (Ryan) and asked them to identify PMO candidates using three criteria: (1) persons who had actual project management experience or otherwise showed the skills and experience needed to perform the work; (2) persons underutilized in their present positions; and (3) persons whose transfer would be least disruptive to their present organization.

The parties disagree on who actually selected the employees to be transferred into the CTS/PMO, and there is scant evidence in the record on this issue. Some deposition testimony, however, does support the Armbruster Group's contention that Gagliardi was involved in the selection of who was to be transferred into the CTS/PMO. See Joint Appendix (Jt.App.) at A-19, A-759-60. It is clear that Sacco and Ryan met with Wedean, Johnson and Frank Haslam (Haslam), Director of Human Resources for CTS, in November 1990 to review a list of transferees that had been prepared. According to Johnson, the decision on who was going to be transferred into the CTS/PMO had already been made; he reviewed the list only "[t]o just understand who the people were ... [i]dentify the people, verify where they were coming from, and who should announce to them initially that this was taking place; that kind of thing." Jt.App. at A-762. Johnson testified he did not request additional people for his group, had nothing to do with the selection of CTS/PMO candidates and simply acquiesced in Gagliardi's desire to place additional persons in the CTS/PMO. Wedean also testified that, as they reviewed the list with Johnson, Johnson relied on Ryan's and Sacco's opinions because Johnson did not know any of the individuals.

By late November 1990, approximately forty Unisys employees were transferred into the CTS/PMO group based in Blue Bell, Pennsylvania. ⁵ Many of them met with Johnson that very afternoon after their supervisors had told them about the transfer. During this introductory meeting, Johnson explained the nature and goals of the CTS/PMO. According to one Armbruster Group member, Johnson stated Unisys was "pulling senior people together to do it." Jt.App. at A-171.

Another smaller group of thirty-five individuals was brought into an Atlanta based CTS/PMO to make up the CTS/PMO's full complement. Armbruster Group member James Turner (Turner), who was the Director of the General Accounting Applications Business Unit in Atlanta before he was transferred into the Blue Bell CTS/PMO, testified that the Atlanta transferees were not told of the transfer until the day it occurred and that Wedean instructed Sacco and others to have the Atlanta transferees move their belongings out of their offices and to deactivate their badges immediately because Wedean was concerned that the transferees might damage the office if they had access to it over the weekend. ⁶

The CTS/PMO began functioning officially on December 1, 1990. Johnson did not give the transferees any assignments from then until their termination nearly three months later, even though they repeatedly requested work. Although the transferees had nothing to do, Johnson discouraged them from completing projects they had worked on with their former organizations because those projects were "not ... project management kind[s] of task[s]." Jt.App. at A-773. Johnson admitted it was his responsibility, along with his field personnel, to find work for the transferees. He did not remember any new personnel receiving any assignments.

As the transferees were arriving at the Blue Bell facility only three offices were available and they were assigned on a first-come, first-served basis. All but the first three transferees were assigned to cubicles. Johnson's office and his SMG group were...