879 F.2d 43 (3rd Cir. 1989), 88-3374, Lockhart v. Westinghouse Credit Corp.

Docket Nº:88-3374.
Citation:879 F.2d 43
Party Name:, 13 Fed.R.Serv.3d 1213 Phillip N. LOCKHART, Charles B. Wilson, James Lowery, James P. Durham and Thomas Bradley v. WESTINGHOUSE CREDIT CORPORATION, Appellant.
Case Date:June 13, 1989
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit

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879 F.2d 43 (3rd Cir. 1989)

, 13 Fed.R.Serv.3d 1213

Phillip N. LOCKHART, Charles B. Wilson, James Lowery, James

P. Durham and Thomas Bradley



No. 88-3374.

United States Court of Appeals, Third Circuit

June 13, 1989

Argued Dec. 1, 1988.

Rehearing and Rehearing In Banc Denied July 13, 1989.

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Alfred W. Vadnais (argued), John J. Myers, Eckert, Seamans, Cherin & Mellott, Pittsburgh, Pa., for appellant.

Joel S. Sansone (argued), Blair & Sansone, Melvin L. Vatz, Grossinger, Gordon & Vatz, Pittsburgh, Pa., for appellees.

Before HIGGINBOTHAM, MANSMANN and GARTH, Circuit Judges.


A. LEON HIGGINBOTHAM, Jr., Circuit Judge.

This is an appeal from an action arising under the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. Sec. 621 et seq. (1982) ("ADEA"), and the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. Sec. 201 et seq. (1982) ("FLSA"). The suit involved multiple plaintiffs, former employees of the appellant-defendant, Westinghouse Credit Corporation ("WCC"), who alleged that they were unlawfully terminated from their jobs because of their ages, and that their terminations were done in willful violation of the ADEA. The jury returned verdicts in favor of two of the plaintiffs, additionally finding that WCC had willfully discriminated against one of them. Upon our review of the record, we find insufficient evidence to support the jury's verdict of willful discrimination. Accordingly, we will vacate that portion of the district court's judgment order awarding liquidated damages.

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In an effort to increase its profitability, WCC decided to undertake a corporate reorganization. In May 1983, WCC engaged McKinsey and Company, Inc. (the "McKinsey Group"), a management consulting firm, to assist in that effort. After the McKinsey Group released its report in January 1984, WCC merged its four corporate divisions--Industrial Equipment Financing, Financial Services, Real Estate Financing and Business Financing--into two larger bodies: Commercial Services and Capital Financing. During the process of restructuring, a number of management positions within WCC were eliminated.

Contemporaneous with WCC's commissioning of the McKinsey Group, Phillip N. Lockhart, who was employed in the Financial Services division as District Manager of WCC's Pittsburgh Office, was terminated from his position on May 3, 1983, ostensibly because of an unfavorable audit of his office. He was 58 years old at the time and had been an employee of WCC's since 1960. On July 21, 1983, Lockhart filed a formal written charge with the Equal Employment Opportunity Commission ("EEOC"), alleging that WCC discriminated against him on the basis of his age because several WCC branches were being consolidated with the Pittsburgh Office, and the resulting new management position was being filled by an employee who was 34 years old and who had less experience than Lockhart. In September 1984, the EEOC informed Lockhart that it would take no further action on his charge; he then proceeded on his own behalf.

Lockhart commenced this suit on April 11, 1985, claiming that he was discharged from his position with WCC on account of his age, in violation of Sec. 4(a)(1) of the ADEA, 1 29 U.S.C. Sec. 623(a)(1), and Sec. 16(b) of the FLSA, 2 29 U.S.C. Sec. 216(b). On December 6, 1985, Lockhart filed a motion to join additional parties pursuant to the opt-in class action provision in Sec. 16(b) of the FLSA. The motion sought to add James Durham, 3 Charles Wilson, Thomas Bradley and James Lowery on the basis that they were "similarly situated" to Lockhart, in that each one was "terminated from his employment because of his age." Appellant's Appendix ("App.") at 14-15. The district court granted the motion without prejudice to WCC's right to challenge the joinder upon completion of discovery. The amended complaint alleged that WCC's terminations were part of a plan, pattern or practice of unlawful age discrimination in which WCC conspired and willfully terminated each plaintiff.

At the close of discovery, WCC moved for summary judgment against Wilson, Bradley and Lowery on the basis that since they had failed to file charges with the EEOC, and since Lockhart's charge did not allege class-based discrimination, they could not opt into the suit under Sec. 16(b). 4 The district court granted the motion as to Lowery, concluding that if he had sought to file his own charge, it would have been

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time-barred by the time Lockhart filed his charge with the EEOC. 5

The cases of the four remaining plaintiffs proceeded to trial. Answering special interrogatories, the jury returned a verdict as to liability and found that WCC had violated the ADEA in discharging Lockhart and Durham, and that WCC had not violated the ADEA in discharging Wilson and Bradley. The jury further found that WCC's termination of Durham was in willful violation of the ADEA. By agreement of the parties, the issue of damages was submitted to the trial court. Based on the stipulation of the parties as to backpay damages, the court awarded $197,885.83 in backpay to Lockhart and $102,381.69 in backpay to Durham. The court then determined that Lockhart was entitled to $96,000 in frontpay, and that Durham was entitled to $43,000 in frontpay. Moreover, with respect to the jury's finding of willfulness, the court awarded Durham $102,381.69 in liquidated damages, equalling his award of backpay as prescribed by statute. See 29 U.S.C. Sec. 626(b) (1982). In total, the court awarded $293,885.83 to Lockhart and $247,763.38 to Durham, plus their attorneys' fees and costs.

WCC subsequently moved for judgment notwithstanding the verdict with respect to the claims of Durham and Lockhart on the basis of insufficiency of evidence. In the alternative, WCC moved for a new trial based on various alleged pre-trial and trial errors. The district court denied these motions and this appeal followed.



WCC's first contention on this appeal is that the evidence proffered at trial was insufficient to support the findings of age discrimination and, therefore, that the district court erred by denying its motion for judgment n.o.v. with respect to the jury's verdicts in favor of Lockhart and Durham. In reviewing the court's denial of WCC's motion, "we must determine whether the evidence and justifiable inferences most favorable to the prevailing party afford any rational basis for the verdict." Anastasio v. Schering Corp., 838 F.2d 701, 705 (3d Cir.1988).

The ADEA protects individuals who are 40 and older from employment discrimination based upon their age. See 29 U.S.C. Sec. 631(a) (Supp. IV 1986). Under the ADEA, the plaintiff has the ultimate burden of proving that age was the determinative factor in his or her discharge from employment. Chipollini v. Spencer Gifts, Inc., 814 F.2d 893, 897 (3d Cir.) (in banc), cert. dismissed, 483 U.S. 1052, 108 S.Ct. 26, 97 L.Ed.2d 815 (1987). Age need not be the sole factor, but it must have "made a difference in the [employer's] decision." Id. The plaintiff can prevail on his or her claim by proffering direct evidence of specific intent to discriminate, but there is usually no "smoking gun" evidence of intentional discrimination. See Gavalik v. Continental Can Co., 812 F.2d 834, 852-53 (3d Cir.), cert. denied, --- U.S. ----, 108 S.Ct. 495, 98 L.Ed.2d 492 (1987).

Consequently, the Supreme Court has developed a method of indirect proof involving presumptions and shifting burdens of production in order that the "plaintiff [can have] his [or her] day in court despite the unavailability of direct evidence." Loeb v. Textron, Inc., 600 F.2d 1003, 1014 (1st Cir.1979). This three-part formula was first articulated in McDonnell-Douglas Corp. v. Green, 411 U.S. 792, 802-04, 93 S.Ct. 1817, 1824-25, 36 L.Ed.2d 668 (1973), and enunciated again in Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 253-56, 101 S.Ct. 1089, 1093-95, 67 L.Ed.2d 207 (1981). 6

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First, the plaintiff must present a prima facie case of age discrimination. This is accomplished "by proving by a preponderance of the evidence that (1) he belongs to a protected class; (2) he was qualified for the position; (3) he was dismissed despite being qualified; and (4) he ultimately was replaced by a person sufficiently younger to permit an inference of age discrimination." Chipollini, 814 F.2d at 897. The establishment of the prima facie case creates a presumption of unlawful discrimination. The burden then shifts to the defendant to come forth with a legitimate non-discriminatory reason for the plaintiff's discharge in order to rebut the presumption. If the defendant is successful, the plaintiff must then prove by a preponderance of the evidence that the defendant's purported justification for his dismissal is not credible. 7

In the present action, each plaintiff established his prima facie showing 8 of age discrimination and WCC presented legitimate, nondiscriminatory reasons for his termination. Each plaintiff then had the burden of proving that WCC's rationale for his discharge was pretextual. WCC argues that neither Lockhart nor Durham proffered any direct evidence to discredit WCC's asserted justifications for their discharge. We have noted, however, that under McDonnell-Douglas, direct evidence of discriminatory intent is not necessary. "[A] plaintiff can prevail by means of indirect proof that the employer's reasons are pretextual without presenting evidence specifically relating to age." Chipollini, 814 F.2d at 898. We now address whether there is sufficient indirect evidence on the record to support the jury's verdicts...

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