Moore v. McGraw Edison Co.

• Decision Date: 05 January 1987
• Docket Number: No. 85-5309,85-5309
• Parties: 42 Fair Empl.Prac.Cas. 229, 42 Empl. Prac. Dec. P 36,762 James MOORE, Appellant, v. McGRAW EDISON COMPANY, a Maryland corporation, Appellee. Edward SOMMERFELD, Appellant, v. McGRAW EDISON COMPANY, a Maryland corporation, Appellee. Chester THOMPSON, Appellant, v. McGRAW EDISON COMPANY, a Maryland corporation, Appellee. Claire DWINNELL, Appellant, v. McGRAW EDISON COMPANY, a Maryland corporation, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1026

804 F.2d 1026

42 Fair Empl.Prac.Cas. 229,

42 Empl. Prac. Dec. P 36,762

James MOORE, Appellant, v. McGRAW EDISON COMPANY, a Maryland corporation, Appellee.

Edward SOMMERFELD, Appellant, v. McGRAW EDISON COMPANY, a Maryland corporation, Appellee.

Chester THOMPSON, Appellant, v. McGRAW EDISON COMPANY, a Maryland corporation, Appellee.

Claire DWINNELL, Appellant, v. McGRAW EDISON COMPANY, a Maryland corporation, Appellee.

No. 85-5309.

United States Court of Appeals,

Eighth Circuit.

Submitted April 14, 1986.

Decided Nov. 3, 1986.

Rehearing and Rehearing En Banc Denied Jan. 5, 1987.

Stewart R. Perry, Wayzata, Minn., for appellant.

Richard L. Evans, Minneapolis, Minn., for appellee.

Before LAY, Chief Judge, McMILLIAN, Circuit Judge, and HANSON, ^* Senior District Judge.

HANSON, Senior District Judge.

The Court has before it numerous allegations of error. Plaintiffs appeal the decision of the Magistrate denying their motion for a new trial in their suits alleging age discrimination, and directing a verdict for the defendant on their claims of duress, fraud, and breach of contract. For the reasons stated below, we affirm the district court. ¹

I. BACKGROUND.

The appellants, four long-time employees, were laid off in 1982 during a reduction in force at Electric Machinery Company, a division of McGraw Edison Company (hereinafter "E-M"). From 1978 to 1984 E-M had experienced a 60 percent drop in business. In response to this, E-M had reduced its salaried workers from a high in 1979 of 450 to a work force of only 200 in 1982. During 1982 E-M reduced its work force by an additional 50 salaried workers. E-M department supervisors selected the people to be laid off, with the general manager having the authority to overrule their decisions.

When fired, James Moore was 59 years old and had worked at E-M for almost 40 years. He was discharged on May 28, 1982 with one hour's notice along with 23 other salaried employees. From 1959 to 1982 he had been supervisor of testing and inspection for controls, devices which controlled the speed and output of the rotating equipment at E-M. In 1980, E-M sold its controls business and Moore was laid off. Shortly thereafter, he was rehired in the service department. From 1980 until his termination in 1982, Moore was the least senior member of the service department. In May 1982 Dan Gospodarski, the supervisor of service engineers, decided that because Moore's experience was in controls and not rotating equipment and because control work was a smaller part of their business, Moore would have to be let go. Other much younger men who worked in the field service area were retained. Moore was not considered for a field service job because his limited experience in rotating equipment would have required a training period in that area. Gospodarski testified that age was not a factor in his decision and that he never told Moore it was a factor. Moore testified Gospodarski told him that age was a factor and that when layoffs had to be made it was probably better to go after older people who were making more money and who had more fringe benefits.

Appellant Edward Sommerfeld was one of 29 salaried employees terminated on November 29, 1982. Sommerfeld was 59 years of age and had worked for E-M for 37 years. He was fired on one-hour's notice. Sommerfeld was an "expediter" on the assembly floor at E-M's Central Avenue plant. Sommerfeld had moved to that position shortly before his termination to assist a man roughly his same age. Prior to the move, Sommerfeld was expediter in the press room at E-M's University Avenue plant. In early 1982 E-M closed the University Avenue plant. Richard Schultz, who was in charge of manufacturing for E-M in 1982, testified that age was not a factor in eliminating Sommerfeld's position. Younger employees who were retained were office workers in the inventory and stockroom areas. Sommerfeld was familiar with their jobs, but did not claim to be qualified to do their jobs, nor did he state that he was qualified to use the stockroom computer system.

On the day of his termination, Sommerfeld met with Eric Leone, supervisor of the assembly floor. Leone had asked Sommerfeld to sign a Termination Agreement. Sommerfeld refused. He was then told he would not receive his severance check unless he signed the Agreement. Sommerfeld then signed the Agreement releasing E-M from any claims. His severance pay was approximately $11,000.

Appellant Chester Thompson was also terminated on November 29, 1982. Thompson was 57 years old and had been with the company 31 years. He was fired on one hour's notice. During his years at E-M, he had worked as a quality control supervisor in the machine shop, welding shop, two different winding departments, various assembly floors, and all the test floors. At the time he was fired he was the supervisor of the B test floor. In November 1982 E-M decided to consolidate the supervisory positions of the B shop and eliminate two of the four supervisors then in testing and assembly. There would be four times as many people to be supervised in the combined areas as were in the original test area. Eric Leone, Thompson's supervisor, testified that age was not factor in making the decision to lay off Thompson. Rather, he testified that Thompson was not as qualified as others to supervise in the coils area and that Thompson would be unable to handle the winding area as a supervisor.

Thompson signed a Termination Agreement releasing E-M from liability. At the time he signed the Agreement, his only reservation concerned future medical expenses he would incur. When told that he could continue his health insurance, Thompson signed the release. He received approximately $15,000 in severance pay.

Appellant Claire Dwinnell was also laid off on November 29, 1982. She was 57 years old and had worked at E-M for 31 years. Dwinnell was supervisor of the payroll department which consisted of three employees. Her primary responsibilities were with the salary payroll. Salary payroll had once been a full-time job, but the duties had been substantially decreased when the system was automated in January 1981. At that time her duties changed so that she helped out on wage payroll as well. The other two payroll employees had worked on wage payroll exclusively, thus having more experience than Dwinnell in that area. On November 29, 1982 Dwinnell's supervisor, John Panning, then manager of accounting for E-M, decided to terminate Dwinnell and one other payroll employee, leaving only one person in the department. He based his decision on his close knowledge of the payroll function, the amount of work to do, and the declining payroll as a result of work force reductions. The retained payroll employee was chosen to remain because he had detailed knowledge of the union contract and bumping rights of workers, an essential part of the job during this period of so many layoffs. Dwinnell did not have any experience working with union contracts. After her layoff, some of her duties were assumed by a younger woman who had been a receptionist.

When she was terminated, Dwinnell signed a Termination Agreement, releasing E-M from liability. She received severance pay of approximately $6,000.

At the time of the dismissal of these employees, E-M had a written severance policy which stated that severance pay "may be payable" if termination was not "for cause." The written policies of the company contained no provision for mandatory severance pay as a matter of right.

At trial the appellants' expert witness testified that his analysis strongly suggested age discrimination in the selection of employees to be terminated in 1982 and 1983. He admitted, however, that his analysis would not be able to refute a nondiscriminatory reason for the terminations of each of the appellants. His analysis did not include any of the terminations which took place prior to 1982.

The trial court awarded E-M a directed verdict on the duress, fraud, and breach of contract claims. The jury found that the Termination Agreements signed by Dwinnell and Thompson barred their recovery, and that Moore and Sommerfeld had not been discriminated against because of their age. This appeal followed.

II. MOTION FOR NEW TRIAL.

A. Sufficiency of the Evidence.

Appellants assert that the trial court erred in denying their motion for a new trial because the verdicts were not supported by the evidence. Viewing the evidence in this case as a whole, we conclude that reasonable jurors could reach the verdicts that they did. In the case of Dwinnell and Thompson, the jury found that they had released their claims against E-M. Dwinnell and Thompson admitted they had signed the Agreements without protest; however, they claim they signed the releases under duress or fraud. We believe it was reasonable for the jury to conclude that Dwinnell and Thompson had released their claims against E-M.

Even assuming arguendo that the releases were invalid, we would conclude there was insufficient evidence of age discrimination. The Age Discrimination in Employment Act, 29 U.S.C. Secs. 621-34 (1982), states that it shall not be unlawful to take any otherwise prohibited actions "where the differentiation is based on reasonable factors other than age [RFOTA] * * *." 29 U.S.C. Sec. 623(f)(1) (1982). In the business cutback cases in which the RFOTA defense has succeeded, there has typically been an additional showing that the reduction was made according to evaluation procedures based on performance, and was designed to retain the employees best able to perform the available work remaining. See Cova v. Coca-Cola Bottling Co., 574 F.2d 958, 961 (8th Cir.1978); Marshall v. Roberts Dairy Co., 572 F.2d 1271, 1272-73 (8th Cir.1978). On the other hand, when the objective facts show no deficiency in performance, the RFOTA defense based on job performance may fail. See Leftwich v. Harris-Stowe State College, 702 F.2d 686, 692-93 (8th Cir.1983). But,...