Dreyer v. Arco Chemical Co., Div. of Atlantic Richfield Co.

• Decision Date: 22 September 1986
• Docket Number: No. 85-3476,85-3476
• Citation: 801 F.2d 651
• Parties: 41 Fair Empl.Prac.Cas. 1450, 41 Empl. Prac. Dec. P 36,706, 55 USLW 2172 Dorothy E. DREYER and Naomi D. Strayer, Appellees, v. ARCO CHEMICAL COMPANY, a DIVISION OF ATLANTIC RICHFIELD COMPANY, Appellant.
• Court: U.S. Court of Appeals — Third Circuit

Page 651

801 F.2d 651

41 Fair Empl.Prac.Cas. 1450,

41 Empl. Prac. Dec. P 36,706, 55 USLW 2172

Dorothy E. DREYER and Naomi D. Strayer, Appellees, v. ARCO CHEMICAL COMPANY, a DIVISION OF ATLANTIC RICHFIELD

COMPANY, Appellant.

No. 85-3476.

United States Court of Appeals, Third Circuit.

Argued April 28, 1986.

Decided Sept. 22, 1986.

Jess Womack (argued), Atlantic Richfield Co., Philadelphia, Pa., for appellant.

Stanley M. Stein (argued), Feldstein Grinberg Stein & McKee, Pittsburgh, Pa., for appellees.

Before SLOVITER and STAPLETON, Circuit Judges, and LONGOBARDI, District Judge. ^*

OPINION OF THE COURT

SLOVITER, Circuit Judge.

ARCO Chemical Co. challenges a jury's decision that it violated the Age Discrimination in Employment Act, 29 U.S.C. Secs. 621-34 (ADEA), when it terminated the employment of two long-term employees, plaintiffs Naomi Strayer and Dorothy Dreyer. It further contends that there was no evidence to support the jury's finding that its conduct as to Dreyer constituted a "willful" violation of the ADEA, entitling her to double damages.

I.

During a corporate reorganization in 1981 and 1982, ARCO consolidated the sub-units of one of its divisions, and as a consequence reduced the size of its work force at its Beaver Valley plant in Monaca, Pennsylvania. One of the departments of the plant affected by this reduction in force was the Financial Controls Department, which ARCO decided to reduce from 26 employees to 18. Plaintiffs Dreyer and Strayer were both employees in this department, and, according to ARCO, both were terminated as a result of the restructuring. Each had been offered the possibility of voluntary retirement under a special retirement plan applicable to employees over fifty-five years of age, neither volunteered to accept the company's offer, both were then terminated, and, only then, did they accept early retirement under protest. ARCO does not contend that their acceptance of the early retirement benefits precludes them from exercising their rights under the ADEA.

Dreyer and Strayer filed suit together, claiming that ARCO's termination of their employment violated the ADEA and that the violations were intentional and willful. The jury returned a verdict for both plaintiffs. Based on the parties' stipulation as to damages, it awarded $66,043.99 in backpay to Strayer and $68,367.75 to Dreyer. In addition, the jury found that ARCO's discharge of Dreyer was "malicious" by so stating on its verdict sheet and awarded her statutory liquidated damages in the amount of her backpay for a total award of $136,725.50. See 29 U.S.C. Sec. 626(b). The district court denied ARCO's motions for judgment notwithstanding the verdict and a new trial.

On appeal, ARCO's principal argument is that the evidence is insufficient to support a finding that it violated the ADEA with respect to the two plaintiffs, or, failing that, to support the jury's finding that it had acted "maliciously" or "willfully" in discharging Dreyer. ¹

II.

A. Sufficiency of the Evidence to Support the Verdict

ARCO's principal argument on appeal is that it came forward with legitimate, nondiscriminatory reasons for retiring Dreyer and Strayer and that neither plaintiff proved that these reasons were pretextual. Preliminarily, ARCO also contends that Strayer did not establish a prima facie case of age discrimination.

The ADEA broadly proscribes discrimination against any individual between 40 and 70 with respect to "compensation, terms, conditions, or privileges of employment, because of such individual's age." 29 U.S.C. Sec. 623(a); see id. Sec. 631(a). To recover, "a plaintiff must prove by a preponderance of the evidence that age was a determinative factor in the employer's decision." Berndt v. Kaiser Aluminum & Chemical Sales, Inc., 789 F.2d 253, 256 (3d Cir.1986).

The order and allocation of proof in an ADEA case alleging disparate treatment on the basis of circumstantial evidence is governed by the three-part division set forth in McDonnell-Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973), for Title VII cases. See Smithers v. Bailar, 629 F.2d 892, 894 (3d Cir.1980). Under this scheme, the plaintiff must first prove a prima facie case. Then the burden of production shifts to the defendant to articulate a legitimate, nondiscriminatory reason for the plaintiff's discharge. If the employer meets this burden, the plaintiff must show that the articulated reason is a pretext for discrimination. ² At all times, the plaintiff bears the ultimate burden of proving that age was "a determinative factor" in the decision. See Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 256, 101 S.Ct. 1089, 1095, 67 L.Ed.2d 207 (1981); Duffy v. Wheeling Pittsburgh Steel Corp., 738 F.2d 1393, 1395 (3d Cir.), cert. denied, 469 U.S. 1087, 105 S.Ct. 592, 83 L.Ed.2d 702 (1984).

In an age discrimination case, in order to make out a prima facie case:

a plaintiff must prove that he (1) was discharged; (2) was qualified for the position; (3) was within the protected class at the time of discharge; (4) was replaced by someone outside the protected class, or ... by someone younger, or ... show otherwise that his discharge was because of his age.

Elliott v. Group Medical & Surgical Service, 714 F.2d 556, 565 (5th Cir.1983), cert. denied, 467 U.S. 1215, 104 S.Ct. 2658, 81 L.Ed.2d 364 (1984); Maxfield v. Sinclair International, 766 F.2d 788, 792 (3d Cir.1985). In a reduction in force situation, it is often impracticable to require a plaintiff whose job has been eliminated to show replacement. See Williams v. General Motors Corp., 656 F.2d 120, 129 (5th Cir.1981), cert. denied, 455 U.S. 943, 102 S.Ct. 1439, 71 L.Ed.2d 655 (1982); see also Massarsky v. General Motors Corp., 706 F.2d 111, 118 n. 13 (3d Cir.), cert. denied, 464 U.S. 937, 104 S.Ct. 348, 78 L.Ed.2d 314 (1983) (nature of plaintiff's showing depends on circumstances of the case); Thompson, Houserman & Jordan, Age Discrimination in Reduction-in-Force: The Metamorphosis of McDonnell Douglas Continues, 8 Indus.Rel.L.Rev. 47, 57-58 (1986).

ARCO moved for a directed verdict at the close of plaintiffs' case, arguing that plaintiffs had not established a prima facie case. The district court denied this motion. Under our decision in Berndt v. Kaiser Aluminum & Chemical Sales, Inc., 789 F.2d at 257, the issue of whether plaintiff established a prima facie case is subsumed on appeal into whether the plaintiff has sustained his or her ultimate burden of proving that age was a determinative factor in the plaintiff's termination.

In any event, the standards for reviewing the denial of a motion for a directed verdict and for a motion for judgment notwithstanding the verdict are not dissimilar. "We are required to 'review the record ... in the light most favorable to the non-moving party, ... and to affirm the judgment of the district court denying the motions unless the record is critically deficient of that minimum quantum of evidence from which the jury might reasonably afford relief.' " Black v. Stephens, 662 F.2d 181, 187 (3d Cir.1981) (motion for judgment n.o.v.), cert. denied, 456 U.S. 950, 102 S.Ct. 2022, 72 L.Ed.2d 475 (1982) (quoting Dawson v. Chrysler Corp., 630 F.2d 950, 959 (3d Cir.1980)). See Inventive Music Ltd. v. Cohen, 617 F.2d 29, 31 (3d Cir.1980) (quoting Fireman's Fund Insurance Co. v. Videfreeze Corp., 540 F.2d 1171, 1178 (3d Cir.1976) (directed verdict), cert. denied, 429 U.S. 1053, 97 S.Ct. 767, 50 L.Ed.2d 770 (1977)).

Plaintiffs do not dispute that ARCO may have had a legitimate economic reason to reduce its force. ARCO's explanations for the termination of both Strayer and Dreyer appear plausible on paper. However, since we are not the factfinders we must determine whether a jury, hearing the evidence and observing the witnesses, could have concluded that Strayer's and Dreyer's age (both over 55) played a part in ARCO's selection of them for termination.

1. Strayer

Strayer was 56 at the time of her termination. She had worked at the Beaver Valley plant since 1963, for most of her tenure as a secretary. Since 1975, Strayer had been secretary to Robert Hines, the manager of the Financial Controls Department.

The legitimate, nondiscriminatory reason articulated by ARCO for terminating Strayer was that it had evaluated the performance of its employees in connection with its reduction in force at the Beaver Valley plant and that Strayer was not only a below-average worker, but had the poorest performance of all clerical people at the plant. Hines, Strayer's immediate employer, testified to her low performance rating for 1980 and 1981, and there was documentary evidence showing her tardiness and absenteeism. ARCO claimed that during the reduction in force it had naturally sought to rid itself of its weakest personnel and that Strayer's abilities, not her age, had been the reason she had been forced into early retirement.

In Strayer's attempt to prove that ARCO's asserted reasons were pretextual, she showed that although she had worked for the company for 17 years, ARCO was able to produce only two years' evaluations of her as unsatisfactory. In fact, Hines rated Strayer's performance on the performance evaluations for 1978 and 1979 as satisfactory or better. In addition, Strayer showed that she had merit salary increases in every year from 1976 to 1981, and that her salary evaluations for 1978, 1980 and 1981 were favorable. Hines testified on cross-examination that he had not intended to terminate her for her performance prior to the reduction in force.

Moreover, there was evidence that ARCO was not under an economic necessity to terminate Strayer. A secretarial position remained open in the Financial Controls Department after Strayer's retirement, which was ultimately filled by an employee who was 32 years old.

Although Strayer's evidence that ARCO's reasons were pretextual is not overwhelming, a jury could reasonably have found from it...