Brown v. CSC Logic, Inc.

• Decision Date: 13 May 1996
• Docket Number: No. 94-11124,94-11124
• Parties: 70 Fair Empl.Prac.Cas. (BNA) 1273 Donald R. BROWN and Robert T. Davis, Plaintiffs-Appellants, v. CSC LOGIC, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 651

82 F.3d 651

70 Fair Empl.Prac.Cas. (BNA) 1273

Donald R. BROWN and Robert T. Davis, Plaintiffs-Appellants, v. CSC LOGIC, INC., Defendant-Appellee.

No. 94-11124.

United States Court of Appeals, Fifth Circuit.

May 13, 1996.

Hal K. Gillespie, David K. Watsky, Gillespie, Rozen, Tanner & Watsky, P.C., Dallas, TX, for appellants.

Sarah Ruth Saldana, Baker & Botts, Dallas, TX, Phillip Douglass, Houston, TX, for appellee.

Appeal from the United States District Court for the Northern District of Texas.

Before WISDOM, GARWOOD and JONES, Circuit Judges.

WISDOM, Circuit Judge:

Plaintiffs-appellants, Donald Brown and Robert Davis, filed suit against their former employer, the defendant-appellant, CSC Logic, Inc. ("CSC Logic"), alleging that the company terminated their employment in violation of the Age Discrimination in Employment Act ("ADEA"). ¹ The district court granted a motion for summary judgment in favor of CSC Logic, and dismissed the case. For the reasons that follow, we AFFIRM.

I. BACKGROUND

CSC Logic is a Texas corporation which provides data processing and administrative services to financial institutions. It is a wholly-owned subsidiary of its parent company, CSC. At all times relevant to this suit, Winston Kimzey was the Chief Executive Officer, and responsible for employment decisions regarding the appellants.

CSC Logic hired appellant Brown as the Director of Marketing in January 1984. Shortly thereafter, the company obtained the Ford Motor Company as a client. In order to provide better services to Ford, CSC Logic created the Insurance Service Center ("ISC") to handle Ford-related needs. At around the same time, the company also created the Vehicular Single Interest Client Support Department ("VSI") to assist clients with monitoring insurance loans. Brown assumed responsibility for both new departments, while still maintaining his existing marketing duties. He continued in this capacity for the next several years.

In January 1991, Kimzey consolidated the VSI with the main Client Support Department and assigned operation of the combined operation to Greg Shimkus, the employee who was already managing the main Client Support Department. About a year later, Kimzey also reassigned responsibility of the ISC to Shimkus. Brown retained responsibility for marketing, and his salary and benefits remained the same until his termination sixteen months later.

CSC Logic hired appellant Davis as Director of Logic Management Services, Inc., in January 1989. In June of that year, the company reorganized its financial department. It hired Linda Long as Manager of Financial Accounting, and promoted Davis to Chief Financial Officer of CSC Logic. Davis continued in this capacity until his termination.

From 1985 until 1992, one of CSC Logic's largest clients was the Ford Motor Company. This account generated 40-45% of the company's revenues. In February 1992, Ford canceled its contract with the company. As a result, CSC Logic altered its 1993 fiscal year budget (which took effect in April 1992) to reflect plans for a massive employee layoff. In mid-1992, Ford unexpectedly agreed to continue with the company until the end of the year. This event caused a windfall for fiscal year 1993. CSC Logic therefore did not lay off employees as planned, and actually gave an across-the-board raise to all employees, excluding officers.

In November 1992, CSC Logic began budgeting for fiscal year 1994. Aware of the impending loss of the Ford contract, the company again had to reduce costs. CSC Logic renegotiated its office lease, and released excess office space. It eliminated contributions to the employee benefits insurance reserve, and to the company's bad debt reserve. It reduced anticipated bonus payments, eliminated expected salary increases, and reduced capital expenditures. Finally, the company laid off seventy-four employees.

In spite of these efforts, expenses remained high. Near the end of March, 1993, Kimzey and appellant Davis traveled to CSC's corporate headquarters in California to present the proposed budget for 1994. CSC was not satisfied with the 7.4 percent operating margin in the budget and directed CSC Logic to rebudget to allow for a ten percent margin. In response, Davis prepared a report concerning over-staffing in various departments (not including his own), and proposed a revised budget that reflected an operating margin of thirteen percent.

Shortly before the appellants' terminations, CSC Logic held a management meeting, attended by both appellants, the other vice presidents, and Kimzey. At the meeting, Davis again stressed that the company was over-staffed, and that expenses, including salaries, needed to be reduced.

Four days later, on April 16, 1993, Kimzey terminated both appellants' employment at CSC Logic, allegedly for economic reasons. Davis, age 58, and Brown, age 44, served as two of the four vice presidents of the company, and were two of the five highest paid employees. Their combined salaries totaled $319,000. The two remaining vice presidents were ages 41 and 51. Kimzey was age 60. CSC Logic did not hire replacements or specifically promote other employees to take the appellants' positions.

II. DISCUSSION

A. Standard of Review.

This court reviews the grant of summary judgment de novo. ² It may affirm the district court's grant of summary judgment on any ground raised to the district court and upon which both parties had the opportunity to present evidence. ³ Summary judgment is proper if the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to summary judgment as a matter of law." ⁴

B. The parties' evidentiary burdens.

The ADEA makes it unlawful for an employer to "discharge any individual or otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's age." ⁵ The evidentiary burdens of each party in an ADEA case are well-established. A plaintiff must first present a prima facie case of employment discrimination. ⁶ If the plaintiff meets this burden, the employer must rebut the presumption of age discrimination by articulating a legitimate non-discriminatory reason for the adverse employment action. ⁷ If the employer presents such evidence, then the burden of production shifts back to the plaintiff to present probative evidence that the employer's stated reason was pretext. ⁸

In the present case, the district court assumed for summary judgment purposes, that the appellants had established a prima facie case, and therefore analyzed evidence only on the issue of pretext. It found that Davis and Brown had not met their burden of production on this issue, and granted summary judgment. Davis and Brown argue that this ruling was in error, and that they each presented sufficient evidence of pretext to survive summary judgment. CSC Logic maintains that Davis and Brown did not present sufficient evidence of pretext, and that they also did not even successfully present a prima facie case of age discrimination. We will address each stage of the case in turn.

C. The prima facie case.

There are four elements to a prima facie case of employment discrimination under the ADEA. The plaintiff must prove that: 1) he was discharged; 2) he was qualified for his position; 3) he was within the protected class; and 4) he was replaced by someone outside the protected class, someone younger, or was otherwise discharged because of his age. ⁹ The plaintiffs argue that a different standard should apply because this case represents a "reduction in force," making it impossible to prove they were "replaced" by someone younger or outside the protected class. ¹⁰ We note, however, that the "reduction in force" standard applies only when a company lays off protected individuals, while retaining younger employees in similar positions. ¹¹ While CSC Logic did retain a number of younger employees after terminating Davis and Brown, these individuals were not in management positions similar to the plaintiffs'. Both remaining vice-presidents were over forty, as was CEO Kimzey, who was older than either plaintiff. Thus, we will apply the standard evidentiary burden to the plaintiffs' cases.

This decision does not eliminate the possibility that the plaintiffs can prove a prima facie case. The elements of a basic prima facie case include the possibility that a plaintiff may not be able to show he or she was replaced by a younger employee. In such a case, the plaintiff may instead meet his burden by demonstrating that he "was otherwise discharged because of his age." ¹² We now turn to the question of whether each plaintiff has met his initial burden.

1. Donald Brown

Appellant Brown easily satisfies the first three elements of his prima facie case. CSC Logic terminated him. He was forty-four at the time. And, it is undisputed that Brown was qualified for his position and performing satisfactorily. Brown's case falters, however, on the final element of a prima facie case.

Because Brown's position was eliminated, he cannot show that he was replaced by an individual outside the protected class, or by someone younger. Additionally Brown fails to offer sufficient evidence that otherwise indicates that he was discharged because of his age.

Brown insists that this element is satisfied by evidence that his duties were assumed by the younger Greg Shimkus. CSC Logic contends that Shimkus did not assume Brown's duties, but that the older CEO Kimzey actually took over Brown's job. Although it is clear that Shimkus took control from Brown of the VSI and the ISC, these events occurred more than sixteen months before Brown's termination, and thus do not bear on the decision to discharge him. In contrast, the evidence related to Shimkus's duties after Brown's termination is...