600 F.2d 1003 (1st Cir. 1979), 78-1340, Loeb v. Textron, Inc.
|Docket Nº:||78-1340, 78-1364.|
|Citation:||600 F.2d 1003|
|Party Name:||Dec. P 30,028 Frank L. LOEB, Plaintiff, v. TEXTRON, INC., et al., Defendants.|
|Case Date:||June 21, 1979|
|Court:||United States Courts of Appeals, Court of Appeals for the First Circuit|
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Argued Nov. 8, 1978.
Stephen N. Shulman, Washington, D.C., with whom Joseph A. Artabane and Cadwalader, Wickersham & Taft, Washington, D.C., were on brief, for Textron, Inc., et al.
A. Lauriston Parks, Providence, R.I., with whom Dennis J. McCarten and Hanson, Curran & Parks, Providence, R.I., were on brief, for Frank L. Loeb.
Dennis D. Clark, Atty., U. S. Dept. of Labor, Washington, D.C., with whom Carin Ann Clauss, Sol. of Labor, and Donald S. Shire, Associate Sol., Washington, D.C., were on brief, for the Secretary of Labor, amicus curiae.
Before COFFIN, Chief Judge, CAMPBELL and BOWNES, Circuit Judges.
LEVIN H. CAMPBELL, Circuit Judge.
Frank L. Loeb brought this action in January 1976, alleging that the defendants (Textron, Textron's Speidel division, and several of its officers) had discharged him in 1975 because of his age, in violation of the Age Discrimination in Employment Act of 1967 (ADEA), 29 U.S.C. §§ 621-634. In May 1978 a jury returned a verdict for Loeb. Defendants appeal the judgment of liability, and both parties appeal the court's handling of the remedy.
Loeb was hired by Textron's Speidel division as International Sales Manager on August 23, 1971, when he was 50 years old. This was classified as a "level 7" position and carried an annual salary of $24,000 plus bonuses. As International Sales Manager, Loeb supervised sales in areas that in 1974 accounted for 14.55% Of Speidel's total international sales. From 1971 through 1974, Loeb's immediate supervisor, Vanover, Vice-President of International Operations, wrote favorable reports on his performance and recommended that he receive raises; in 1972, 1973 and 1974 he received bonuses of $3,570, $3,443 and $2,279, respectively.
At annual management meetings held in 1973 and 1974, Textron adopted "People Development" as a top priority. This program was designed "to ensure that the corporation would have personnel at all levels of its organization 'to manage our companies in the future.' " Thus one Textron division "began anticipating its people requirements" by breaking down various job categories "by age and length of service to anticipate retirements or obsolescence." Company executives were encouraged to develop "coded and rated organization chart(s)" for "each of the key positions, age (and so, time to retirement), length of service, time on the present assignment and promotability," and to set timetables for "how you plan to prepare for and fill each organizational need and when." At the 1974 meeting, the Executive Vice-President Operations reviewed an "Aging" chart of corporate and divisional officers and commented that the Company had "a greater proportion of our combined senior management over 55 than we do under 40. That's a warning."
The events leading to Loeb's discharge began in late 1974. Vanover was transferred to the Engineering Department in response to problems that had developed there; at the same time, Textron reorganized Speidel's International Department. It abolished Vanover's position, placed international manufacturing under a Vice-President for Operations, and placed the international sales staff under a Vice-President for Sales and Marketing, who was to be assisted by a Director of International Sales and Marketing. Defendant Frank Grzelecki, then 37 years old, became Vice-President for Sales and Marketing, and Robert Ford, then 32 years old, became Director and as a result Loeb's immediate supervisor. Textron did not consider
Loeb for the Directorship, allegedly because he lacked marketing background.
Ford soon began studying Loeb's performance and taking over some of his responsibilities. He claimed that there were problems with Loeb's work in Puerto Rico, Switzerland and Germany, and moved to discharge Loeb in February 1975. This action was stopped by Speidel's President, who noted that there was a lack of documentation to support Loeb's termination and suggested that Loeb be given specific written assignments, against which his performance could be measured. This was done on March 19, 1975; Loeb's title and duties were taken away, he was made "Area Manager-Latin America" instead, and he was given an assignment listing marketing goals for Latin America. In May, Loeb responded to Ford in a report that Textron asserts indicated that there either was insufficient business to be done in Latin America or that Loeb could not develop such business. In June, Ford fired Loeb on the ground that he could not generate enough business in Latin America to justify his salary, noted "involuntary termination poor job performance" on his personnel record and told him that there were no other openings in the International Department. Loeb was 54 at that time.
On November 1, 1975, a 34-year-old man named Stein Owre joined Speidel's International Department as "Senior Product Manager-International." Owre had written to Ford in January 1975, shortly before Ford first recommended Loeb's termination, and Ford had interviewed him in Europe in March and April. Between those two interviews Speidel had advertised for a "Senior Product Manager, International" with qualifications that closely paralleled Owre's; Ford had offered Owre the position formally on August 28.
Textron has not used Loeb's former title, "International Sales Manager," for any employee since it was taken from him in March 1975. Loeb's title as "Area Manager-Latin America" remained unused until January 1978, when it was given to one Joseph Torres, who was then 46 years old and had been functioning as Area Manager-Latin America since Loeb's dismissal. In the two-and-a-half years after Loeb received his March 1975 assignment, Speidel never sold more than $24,000 of goods per year I. e., goods equivalent in value to Loeb's salary in the Latin American countries covered by that assignment.
After the close of trial, the court delivered an instruction to the jury that attempted in large measure to track the analysis presented by the Supreme Court in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973), a major decision in the area of private, non-class actions under Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e-2000e-17. It told the jury that Loeb had to prove a "prima facie case" by showing by a preponderance of the evidence:
"1) That he is within the protected age group, that is, 40 to 65 years; ( 1
2) That he was demoted or discharged;
3) That he was replaced by a younger person or persons outside the protected age group; and
4) That he was qualified to do the job."
It instructed that, if Loeb proved these elements, the defendant had "the burden to prove by a fair preponderance of the evidence a legitimate non-discriminatory reason" for its actions; if the jury found that the defendant "was motivated by reasonable factors other than age or (by) good cause," then it was to "further find whether or not the reasonable factors or good cause . . . were in fact a pretext arranged in order to accomplish discrimination against plaintiff because of his age." Finally, the jury was told that the plaintiff had the burden of proving by a preponderance that the defendant's reasons were in fact a pretext. 2
In the midst of this part of the instruction the court interjected an issue not addressed by McDonnell Douglas: the possibility that Textron had "mixed motives" for Loeb's discharge, one of which was age. It said:
"If you find by a preponderance of the evidence, that Plaintiff's age was one factor in the decision to demote or discharge him, and, Plaintiff's age made a difference in determining whether he was demoted, or retained or discharged, then you must find for Plaintiff . . . . Plaintiff need not prove that his age was the sole factor affecting the decision to demote or discharge him provided he can show that age contributed to or affected the decision to demote or discharge."
The jury returned a verdict of $90,700 for Loeb. In response to a special interrogatory, it found that the defendants' violation of the ADEA had been willful, thus raising the possibility of awarding Loeb liquidated damages under Section 7 of the Act, 29 U.S.C. § 626(b). The district court denied defendants' motions for a directed verdict and for a new trial and entered judgment on the jury award. It assessed an additional $90,700 as liquidated damages and $42,500 as attorneys' fees, and awarded Loeb $90,000 and a pension commencing at age 70 in lieu of reinstatement.
A multitude of issues are raised by the parties on appeal. Defendants challenge the verdict largely on the ground that the court instructed the jury erroneously. They argue, first, that the principles of McDonnell Douglas do not apply to age
discrimination cases at all. In the alternative, they argue that the plaintiff failed to prove a prima facie case of discrimination under McDonnell Douglas and that the court erroneously interpreted the defendants' burden under McDonnell Douglas, to "articulate a legitimate nondiscriminatory reason" for plaintiff's discharge, as being a burden of persuasion. If the burden of persuasion is permitted to shift to defendants, however, they argue that it was error to instruct the jury that Loeb could recover if age was only "a factor," rather than the "determinative factor," in the decision to discharge him.
Even assuming the validity of the verdict, defendants argue that the court's award of liquidated damages was not authorized by the statute and that the court...
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