851 F.Supp. 1329 (D.Minn. 1994), Civ. 3-91-770, Wiehoff v. GTE Directories Corp.

Docket Nº:Civ. 3-91-770
Citation:851 F.Supp. 1329
Party Name:Wiehoff v. GTE Directories Corp.
Case Date:February 24, 1994
Court:United States District Courts, 8th Circuit, District of Minnesota
 
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Page 1329

851 F.Supp. 1329 (D.Minn. 1994)

James W. WIEHOFF, Plaintiff,

v.

GTE DIRECTORIES CORP., GTE Directories Sales Corp., and GTE Directories Service Corp., d/b/a GTE Sun Community Directories, Defendants.

Civ. No. 3-91-770.

United States District Court, D. Minnesota, Third Division.

Feb. 24, 1994

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[Copyrighted Material Omitted]

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Joseph W. Hammell and Catherine R. Landman, Dorsey & Whitney, Minneapolis, MN, for plaintiff.

John W. Polley and David Goldstein, Faegre & Benson, Minneapolis, MN, and Dana B. Bourland, GTE Directories Corp., Dallas, TX, for defendants.

MEMORANDUM OPINION AND ORDER

KYLE, District Judge.

INTRODUCTION

This matter came on for trial before the undersigned and a jury from November 1 through November 10, 1993. The plaintiff, James W. Wiehoff, alleged that the defendants, GTE Directories Corp., GTE Directories Sales Corp., and GTE Directories Service Corp., d/b/a GTE Sun Community Directories (hereinafter collectively "GTE"), discriminated against him on the basis of his age in violation of the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. §§ 621-634 (1988 & Supp. IV 1992), and the Minnesota Human Rights Act ("MHRA"), Minn.Stat. §§ 363.01-.15 (1992 & Supp.1993). 1 The Court submitted to the jury the ADEA claim for its determination and the MHRA claim for an advisory verdict. 2 Following three days of deliberation, the jury unanimously declared that it was deadlocked; the Court declared a mistrial and discharged the jury on November 15, 1993.

GTE timely filed a renewed motion for judgment as a matter of law pursuant to Rule 50(b) of the Federal Rules of Civil Procedure. This Court, in its Memorandum Opinion and Order, dated December 27, 1993, granted the motion with respect to plaintiff's ADEA claim and denied it with respect to plaintiff's MHRA claim (Doc. No. 163). This Court retained jurisdiction over the MHRA claim on the grounds of diversity of citizenship. 28 U.S.C. § 1332(a). Pursuant to the Court's December 27 Order, the parties submitted proposed findings of fact and conclusions of law on the liability aspect of the MHRA claim. 3 The Court now addresses that issue.

Background

I. Plaintiff's Employment at Sun

James Wiehoff is a sixty-eight year old resident of Minnesota. His date of birth is October 25, 1925. (Defs.' Exh. 146.) From March of 1981 to April of 1987, Wiehoff was a sales representative for Sun Community Directories ("Sun"), a division of Cowles Media

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Company. Wiehoff travelled to businesses in various communities in the greater Saint Paul-Minneapolis metropolitan area (the "Twin Cities area"), soliciting orders for advertising space. 4

Sun published thirty-two community telephone directories in the Twin Cities area annually. Sun paid its salespersons strictly on a commission basis. Sales representatives received a commission for all renewing customers, regardless of whether the customer increased, decreased or simply maintained the dollar amount of advertising space purchased. Wiehoff testified that, as an employee of Sun, he developed a number of regular customers in the Twin Cities area who consistently renewed their accounts with him.

II. GTE Acquires Sun

GTE is headquartered in Texas and operates at various locations throughout the United States, including the Twin Cities area. Like Sun, GTE publishes telephone directories in which it sells advertising space. In April of 1987, GTE acquired Sun from Cowles Media Company. Prior to GTE's acquisition of Sun, GTE did not publish any telephone directories in the Twin Cities area. The former Sun operation became GTE's Minneapolis Division (hereinafter "the Division").

Immediately prior to the acquisition, Sun employed fifteen outside sales representatives to sell advertising space in its directories. Sun did not employ any inside sales representatives at the time of the acquisition. When GTE acquired Sun, it retained all fifteen Sun sales representatives, including Wiehoff. 5 Wiehoff was sixty-one years of age when he began working for GTE.

Throughout the remainder of 1987, GTE operated the Division in substantially the same manner as Sun had operated it prior to the acquisition. Following the acquisition, GTE appointed Larry Van Rhee as Division Manager. Van Rhee reported to Marilyn Carlson, then GTE's Area Vice President for the Central Region. The Division was in Carlson's region.

GTE's pay plan differed significantly from Sun's. ( See generally Pl.'s Exh. 97.) Unlike Sun, GTE paid a base salary. GTE paid commissions only on a sales representative's net increase in advertisers' revenue; a salesperson did not receive a commission if a customer did not increase the amount of advertising purchased. GTE also held sales representatives responsible for advertisers who canceled or reduced their advertising purchases from the previous year; Sun's pay plan had not held sales representatives responsible for cancellations or decreases.

Based on GTE's standard expectations regarding the amount of annual revenues that each sales representative should handle, GTE determined that it only needed ten sales representatives in Minneapolis. (Pl.'s Exh. 100.) Carlson instructed Van Rhee to conduct a reduction in force ("RIF") and terminate five of the fifteen former Sun salespersons. Pursuant to that order, Van Rhee ranked the fifteen sales representatives using four performance criteria that he selected. 6

On or about January 8, 1988, Carlson flew to Minneapolis to help Van Rhee conduct the

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RIF. Carlson and Van Rhee met with all of the former Sun sales representatives. She informed them that GTE would be implementing new policies, procedures and standards of performance in the Division and that things were going to change significantly. She then required all of the former Sun sales representatives to fill out employment applications if they were interested in continuing to work at GTE. She informed them that by the end of the day only ten of them would remain employed by GTE. All of the Sun sales representatives, including Wiehoff, filled out applications. Because all fifteen sales representatives expressed interest in continued employment, GTE used Van Rhee's rankings and terminated the five lowest-ranking representatives. Four of those five were under the age of forty. Wiehoff was retained by GTE. At that time, he was sixty-two years of age.

III. GTE Goes "On Budget"

In January of 1988, Carlson hired Kathy Buffington to replace Van Rhee. Buffington transferred to Minneapolis from Portland, Oregon, where she had worked for GTE as the District Sales Manager for a telephone sales unit. Buffington was employed in the Division throughout most of 1988, leaving in late December. Buffington was assigned to Minneapolis to implement GTE's policies and procedures, methods of operation, and standards of performance.

Buffington organized the ten remaining sales representatives into two "premise sales units," Unit 138 and Unit 99. Each unit was comprised of a number of "premise sales representatives" who reported to and were supervised by a "district sales manager" ("DSM"). The DSMs in turn reported to the District Manager, Ms. Buffington. "Premise sales representatives," like the "outside" salespersons under Sun, travelled to their customers and sold advertising space on the business premises. GTE required that premise sales representatives have two years of prior sales experience and two years of college education. (Defs.' Exh. 6.) GTE's nation-wide standards for the amount of advertising revenue a premise sales representative was expected to handle annually was between $900,000 and $1,500,000. ( Id.) Buffington testified that upon her arrival, each sales representative had been handling an annualized average of approximately $300,000 to $400,000 of advertising revenue.

Buffington posted announcements internally and company-wide seeking applicants for the two DSM positions. Tom Joseph, one of the ten remaining Sun sales representatives, was the only local applicant for either position. Buffington hired Joseph as the DSM for Unit 138. Buffington later hired David Fisher as the DSM for Unit 99. Fisher was a former premise sales representative from Portland, Oregon. Wiehoff was assigned to Unit 138, where he was supervised by Joseph. (Pl.'s Exh. 162.)

On February 28, 1988, the Division went "on budget." Under this system, GTE defined a number of markets in the Twin Cities area, which typically corresponded to the directories being published. Pursuant to GTE policy, the Division Manager is responsible for budgeting an expected net increase in revenues for each market. Buffington established budgets for the various markets in the Twin Cities area based upon the 1987 business plan for the Division which Van Rhee had prepared prior to his departure.

After setting the budget for the market, the Division Manager would send the market to the Pre-Sales Department, where it would be "broken" into territories--i.e., bundles of accounts that sales representatives would be expected to complete during a specified number of days (called a "canvass period"). (Defs.' Exh. 162, Yellow policy, at 18A.) GTE used market-breaking procedures designed to insure, as nearly as possible, that sales representatives working in the same market received territories that were nearly equivalent in terms of the number of accounts per day and the amount of revenue per day that each sales representative was expected to handle. ( Id. at 18.) The Court finds that these procedures made it difficult, if not impossible, for management to assign particular accounts--which might be perceived by sales representatives to be more or less favorable--to any particular sales representative.

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