Stumph v. Thomas & Skinner, Inc.
| Decision Date | 09 August 1985 |
| Docket Number | No. 84-2847,84-2847 |
| Citation | 770 F.2d 93 |
| Parties | 38 Fair Empl.Prac.Cas. 1114, 37 Empl. Prac. Dec. P 35,461 David STUMPH, Plaintiff-Appellant, v. THOMAS & SKINNER, INC., Defendant-Appellee. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Steven V. Shoup, Peterson, Haramy, Cline & Shoup, Indianapolis, Ind., for plaintiff-appellant.
H. Patrick Callahan, Callahan, Riley & Hillis, Indianapolis, Ind., for defendant-appellee.
Before BAUER, EASTERBROOK, Circuit Judges, and CAMPBELL, Senior District Judge. *
Plaintiff appeals the dismissal of his age discrimination action on defendant's motion for summary judgment. The district court granted defendant's motion, holding that plaintiff failed to establish a prima facie case of age discrimination and, further, that defendant discharged plaintiff for non-discriminatory reasons. For the reasons stated below, we reverse the decision of the district court and remand for trial.
Plaintiff David Stumph began his employment with defendant Thomas & Skinner, Inc. (the Company) in 1960 as a personnel manager at an annual salary of $7,500. In the twenty-two years he was employed by defendant, plaintiff held a number of increasingly important positions and his salary eventually increased to $32,800 a year. In 1979, when plaintiff held the position of Manufacturing Manager with 150 employees under his supervision, the Company hired Sherman Smith, a man younger than plaintiff, to work on technical matters involved in the production of the Company's product. According to plaintiff, Smith made "several major errors" regarding the production of the Company's product and the purchase of raw materials, causing plaintiff to complain to Edward Cronk, the Company's Chairman and President, and to Norris Krall, the Company's Executive Vice-President. Plaintiff also complained that Smith "involved himself in matters not within his domain."
In early 1981, Cronk told plaintiff that he was fired because of negative statements plaintiff had made about Smith. Plaintiff alleges that Cronk had told him that an industrial psychologist, Walter Elliot, had recommended plaintiff's termination. When plaintiff told Cronk that he would stop criticizing Smith, Cronk told plaintiff that his termination was not irrevocable and that he could meet with the psychologist. Plaintiff did so, and alleges that he was informed by the psychologist that he did not recommend plaintiff's termination. Upon returning to work, plaintiff met with Cronk and he withdrew plaintiff's termination.
In September 1981, plaintiff was removed from his position as Manufacturing Manager and replaced by Smith. Plaintiff became the Plant Service Manager, a new position created for plaintiff. His salary was not cut, but his responsibilities were greatly reduced and plaintiff viewed the move as a demotion. At a meeting with Mr. Cronk in November, 1981, Cronk told plaintiff that he was doing a good job in his new position and that the previous problem of his criticism of Smith had been resolved.
In 1981 the Company experienced a decline in profits. In 1982 the Company's profits continued to fall and the Company began to release employees. Plaintiff alleges that in August 1982, Cronk informed plaintiff that "the Company was going to have to get rid of some of its older employees and get a young, aggressive organization in place for when the economy turned around." Plaintiff then told Cronk that the Company would have to be careful not to violate the age discrimination laws.
On October 22, 1982, Cronk informed plaintiff that plaintiff would be released at the end of the day and that his position would be eliminated as part of a twenty-five percent reduction in force of salaried and clerical workers. Cronk told plaintiff that the Company was making the move because "business was bad." When plaintiff asked why he and not Smith was being released, Cronk replied that the Company desired to keep Smith because of his technical background and because he was known in the industry. Plaintiff was fifty-five years old at the time of his firing and subsequently filed this action under the Age Discrimination in Employment Act, 29 U.S.C. Sec. 621 et seq. (1983) (ADEA).
On April 16, 1984, defendant filed a motion for summary judgment and both parties filed briefs and supporting affidavits. In a deposition, plaintiff was asked whether he believed Cronk was attempting to take illegal action when he stated that the Company would have to eliminate older employees in favor of younger employees, and plaintiff responded:
I don't think he was; I don't think he intentionally did something that was illegal, no. In suggesting that these people be removed, he wasn't suggesting that we do it in an illegal fashion. He was, I think, fishing to find out how we could get them out of there without, without getting at cross purposes with the law.
Plaintiff presented affidavits of two other employees who voluntarily retired, but who stated that they felt animus from the Company because of their age. James M. Burt stated that although the Company never requested that he retire,
[d]uring the approximately two year period prior to retirement, the Company repeatedly took away my job duties until I had nothing of substance or importance to do. When my job finally became boring and meaningless I elected to retire. I believe that the Company stripped me of my duties so that I would become disgusted with my job and consider taking early retirement.
Mildred M. Wyant stated that
[a]fter Mr. Stumph's firing, it was clear to me that the company wanted to rid itself of its older employees. Although I was never asked to retire or quit by any member of the company's management, I was made by them to feel unwelcome in my job because of my age and, as a result, I chose to retire in April rather than at the end of the year.
On September 27, 1984, the district court entered summary judgment in favor of defendant and dismissed plaintiff's suit with prejudice. The district court also entered judgment for costs against plaintiff. In its memorandum opinion, the district court found that employees Burt and Wyant "voluntarily retired from [the] Company's employ on their own schedule without any coercion whatsoever from the defendant." Finding of Fact No. 22. The district court therefore found that even if Cronk told plaintiff that the Company wished to eliminate its older employees, "the subsequent events show that, after being informed of the illegality of such a course of action, [Cronk] did not pursue the matter." Id. The district court focused on plaintiff's statement that "[i]n suggesting that these people be removed, [Cronk] wasn't suggesting that we do it in an illegal fashion." Finding of Fact No. 21. Finally, the district court found that plaintiff was fired "as part of a plan to reorganize several office functions, combine responsibilities and eliminate certain jobs." Finding of Fact No. 23.
In its conclusions of law, the district court held that plaintiff failed to make a prima facie showing of age discrimination because he failed to prove that he was replaced in his position by a younger person. Conclusion of Law No. 4. Further, the district court held that even if plaintiff did make a prima facie case, the Company proffered a legitimate, non-discriminatory reason for plaintiff's termination, and plaintiff failed to show that this proffered reason was pretextual. Conclusions of Law Nos. 6 & 7. Therefore, the district court granted defendant's motion for summary judgment and dismissed plaintiff's suit with prejudice.
Plaintiff first argues that the district court erred by holding that plaintiff failed to make a prima facie showing of age discrimination because he did not prove that he was replaced in his position by a younger person. Plaintiff argues that he is not required to show replacement by a younger person because his position was eliminated. Plaintiff contends that he may make a prima facie showing of age discrimination by offering proof that he was terminated because of his age. We agree.
In McDonnell Douglas v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973), the Supreme Court enumerated a number of factors which it considered in determining whether a plaintiff had made a prima facie showing of racial discrimination in a Title VII employment discrimination case. The Court held that a prima facie showing of racial discrimination had been made in that case when the plaintiff offered proof that: (1) he was a member of a racial minority; (2) he applied and was qualified for a job for which the employer was seeking applicants; (3) he was rejected for the job; and (4) the position remained open and the employer continued to seek applications from persons with plaintiff's qualifications. 411 U.S. at 802, 93 S.Ct. at 1824. This circuit has adopted a variation of this prima facie test in age discrimination cases where the plaintiff was replaced in his position by a younger person. See Huhn v. Koehring Co., 718 F.2d 239, 243 (7th Cir.1983); Kephart v. Institute of Gas Technology, 630 F.2d 1217, 1219 (7th Cir.1980), cert. denied, 450 U.S. 959, 101 S.Ct. 1418, 67 L.Ed.2d 383 (1981). In these cases we held that in order to establish a prima facie case of age discrimination, the plaintiff must show that: (1) he was a member of the protected class (persons aged 40 to 70); (2) he was qualified for his position; (3) he was terminated; and (4) he was replaced in his position by a younger person. Id. Defendant argues that these four requirements are applicable in this case and that therefore the district court's dismissal of plaintiff's suit for failure to prove replacement was proper. This prima facie test, however, is not universal and inflexible, and has not been applied in work force reduction cases.
In McDonnell Douglas, the Supreme Court noted that the facts in any employment discrimination case will vary so...
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