455 F.3d 612 (6th Cir. 2006), 05-5662, Bender v. Hecht's Dept. Stores

Docket Nº:05-5662.
Citation:455 F.3d 612
Party Name:Brian J. BENDER and James W. Rafferty, Plaintiffs-Appellants, v. HECHT'S DEPARTMENT STORES, a division of May Enterprises, Defendant-Appellee.
Case Date:August 01, 2006
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit

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455 F.3d 612 (6th Cir. 2006)

Brian J. BENDER and James W. Rafferty, Plaintiffs-Appellants,


HECHT'S DEPARTMENT STORES, a division of May Enterprises, Defendant-Appellee.

No. 05-5662.

United States Court of Appeals, Sixth Circuit.

August 1, 2006

Argued: April 27, 2006

Appeal from the United States District Court for the Middle District of Tennessee at Nashville. No. 04-00042—Todd J. Campbell, District Judge.

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[Copyrighted Material Omitted]

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[Copyrighted Material Omitted]

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W. Gary Blackburn, Blackburn & McCune, Nashville, Tennessee, for Appellants.

Betty Thorne Tierney, The May Department Stores Company, St. Louis, Missouri, for Appellee.


W. Gary Blackburn, Blackburn & McCune, Nashville, Tennessee, for Appellants.

Betty Thorne Tierney, The May Department Stores Company, St. Louis, Missouri, for Appellee.

Before: KENNEDY, COLE, and McKEAGUE, Circuit Judges.


McKEAGUE, Circuit Judge.

Brian Bender and James Rafferty (collectively, the "Plaintiffs") worked for Hecht's Department Stores ("Hechf s") and its predecessor for a number of years. Both were laid off during a corporate-wide reduction in force in 2003. They sued their former employer, asserting claims of age discrimination under the Age Discrimination in Employment Act of 1967 (the "ADEA"), 29 U.S.C. §§621 et seq., and the Tennessee Human Rights Act (the "THRA"), Tenn. Code. Ann. §§ 4-21-401 et seq. the district court granted summary judgment in favor of Hecht's.

On appeal, the Plaintiffs argue that they have met their evidentiary burden to warrant a trial. We disagree. As explained below, the Plaintiffs have failed to establish their prima facie case that their positions were eliminated as a result of age discrimination. Moreover, they have not shown that Hecht's proffered rationale for selecting others for two open positions was pretextual. Accordingly, we affirm summary judgment in favor of Hecht's.


A. Corporate Structure

Hecht's is a division of The May Department Stores Company ("The May Stores"). Hecht's operates a number of department stores across the East Coast and Tennessee. The division is itself divided into six regions. Each region has a Regional Vice President ("RVP"). The six RVPs report to Hecht's Senior Vice-President of Stores, Paul Proietto. In turn, each department store has a General Manager ("GM"), and, depending on sales volume, one or more Divisional Sales Managers

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("DSM")1 and Area Sales Managers ("ASM").2 GMs and DSMs are considered senior executives.

Both Bender (50)3 and Rafferty (55) were DSMs in different Nashville-area Hecht's stores. There are a total of five stores within the Nashville area. All of these stores are in the same region, along with eight other stores. Andrew Grafton was the RVP for the thirteen-store region in which the Plaintiffs worked.

B. Plan for Workforce Reduction

As a result of stagnating sales and rising expenses, The May Stores developed a company-wide plan for reducing its workforce. With respect to the DSM position, no Hecht's store with sales under $26m could have a DSM. If low sales forced a reduction in staff at a particular store, and there was only one affected DSM, that position was to be eliminated. If there were two DSMs at a store with sales volume justifying only one, the company would consider terminating an employee with a Marginal or Unacceptable evaluation on the employee's "Annual Performance Appraisals."4 If employees could not be differentiated by their appraisals, then the company would look to their seniority status, with employees with the least seniority being the most vulnerable. After determining which positions to eliminate, the company would then fill any existing open positions with employees whose positions were to be eliminated.5

Several weeks before the workforce reduction occurred, Tim Logan, Vice President -Compensation, Benefits, HRIS for The May Stores, sent an email to Kathy Gentilozzi, Vice President of Corporate Human Resources for The May Stores. In it, he clarified that not everyone rated Marginal or Unacceptable had to be separated. "A solid performer over many years who happened to have weaker than normal results LY may not be an appropriate candidate for separation." He further explained that an employee's "EDR' Capacity for Development' cannot be a factor in determining who is to be separated."6

C. Implementation of the Workforce Reduction Plan

Grafton made recommendations regarding eliminations and transfers within his

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region. He received assistance from Pat Wright, Vice President, Director, Stores Human Resources. Proietto and Hecht's Senior Vice President of Human Resources, Bruce Kelso, made the final recommendations for the entire Hecht's division. Gentilozzi made the final decision on all terminations and transfers across The May Stores.

When discussing the workforce reduction, there are four distinct levels of organization to which the parties refer: The May Stores as a whole; the Hecht's division; Grafton's region; and the Nashville-area Hecht's stores.

The May Stores as a Whole: the May Stores implemented its workforce reduction plan in June 2003. 1,450 employees lost their jobs.

The Hecht's Division: in total, 143 executives were terminated within the Hecht's division. Thirty five DSM positions were eliminated (thirteen of the affected DSMs were transferred or demoted, and twenty two were terminated). Of the thirteen who were transferred or demoted, six were under the age of 40. Of the twenty two who were terminated, thirteen were under the age of 40. The average age of those DSMs impacted by the reduction was 40.8 years, slightly less than the overall age of the DSMs before the reduction (41.1 years).

Grafton's Region of Hecht's Stores: within Grafton's region, one GM was terminated. From the region's group of DSMs (before the reduction), three were selected to takeover GM positions: Regina Dyer (51) and Terri Gunn-Thomas (41) became GMs outside Grafton's region, and Allen Wesson (30) became a GM within Grafton's region.

At the next step of the reduction, eight DSM positions were eliminated within Grafton's region. Five of those DSMs were terminated or demoted, while three were laterally transferred. Of the thirteen DSMs who were ultimately retained or demoted, six were under the age of 40.

Nashville-Area Hecht's Stores: of the six DSM positions in the Nashville-area stores, four were eliminated. Both Bender's and Rafferty's stores fell far below the $26m-sales threshold. Brenda Woosley's (47) store also fell below the threshold. They were the only DSMs at their respective stores, so their positions were eliminated. Terry Patton's (39) store had two DSMs, but under the new workforce reduction criteria, it qualified for only one. Brian Jones (29) was the other DSM at the store. Because Jones had recently received an Effective appraisal, while Patton received a Marginal one, Patton's position was eliminated. The remaining DSM position--Wesson's position before he was promoted to GM - was not slated for elimination because the sales at the store exceeded $26m.

D. Opportunity to Transfer

After determining which DSM positions were to be eliminated, the company looked at the remaining open positions. In the Nashville area, there were two openings at the time of the reduction: the DSM position vacated by Wesson, and an ASM position that had been vacated before the reduction. Because the Nashville-area stores had recently been purchased and converted to Hecht's stores in 2001, the company decided to fill the two positions with the displaced DSMs from the area rather than outside people. Similarly, the company did not consider moving any of the four displaced DSMs to an outside market.

The process of filling the open positions was less structured than the one for eliminating positions. According to Hecht's, the company looked to place employees

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with the best merchandising skills in the two open positions. It also considered the displaced DSMs' potential for advancement in the company, as measured by their EDR scores, their interactions with fellow employees, and their history of annual appraisals. In short, according to Kelso, the company weighed "all a candidate had to offer, in particular noting their merchandising skills and potential for advancement."

On their recent annual appraisals, Bender, Rafferty, and Woosley were all rated Effective. In 2002, Rafferty had the highest raw score--65--among the Nashville-area DSMs. Patton had been rated as Effective in 2001; however, in 2002, he received a raw score of 25, which placed him in the Marginal category. The low rating was due primarily to a large construction project in his store which negatively affected sales, according to Hecht's. On the EDR system, Bender, Rafferty, and Woosley received Hold/Other ratings. Hecht's had earlier rated Patton as a Pacesetter. Yet, because of his lower sales during the construction project, he was moved down to Hold/Other.

Hecht's decided to place Patton in the open DSM position and Woosley in the open ASM position. According to the company, it deemed Patton the best choice for the DSM position for several reasons, including: he was "an accomplished merchant who understood the way Hecht's wanted its floors to look"; "[h]e could implement the plan-o-grams7 and could explain adequately any deviations he took from them"; and "[h]e also seemed to have a strong rapport with his staff." Furthermore, he had worked at a larger volume store than the other three displaced DSMs. Woosley was purportedly the best choice for ASM because she had prior experience in the...

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