Visser v. Packer Engineering Associates, Inc.

• Decision Date: 04 February 1991
• Docket Number: No. 89-2825,89-2825
• Citation: 924 F.2d 655
• Parties: 55 Fair Empl.Prac.Cas. 65, 55 Empl. Prac. Dec. P 40,578, 59 USLW 2503, 18 Fed.R.Serv.3d 1305, 32 Fed. R. Evid. Serv. 1 Philip R. VISSER, Plaintiff-Appellant, v. PACKER ENGINEERING ASSOCIATES, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 655

924 F.2d 655

55 Fair Empl.Prac.Cas. 65, 55 Empl. Prac.

Dec. P 40,578,

59 USLW 2503, 18 Fed.R.Serv.3d 1305,

32 Fed. R. Evid. Serv. 1

Philip R. VISSER, Plaintiff-Appellant, v. PACKER ENGINEERING ASSOCIATES, INC., Defendant-Appellee.

No. 89-2825.

United States Court of Appeals Seventh Circuit.

Argued April 13, 1990.

Reargued En Banc Nov. 27, 1990.

Decided Feb. 4, 1991.

Fred Louis, III, Olson, Grabill, Hoffman & Louis, Chicago, Ill., for plaintiff-appellant.

Michael H. King, Kurt H. Feuer, James M. Gecker, Ross & Hardies, Chicago, Ill., for defendant-appellee.

Before BAUER, Chief Judge, and CUMMINGS, WOOD, Jr., CUDAHY, POSNER, COFFEY, FLAUM, EASTERBROOK, RIPPLE, MANION, and KANNE, Circuit Judges.

POSNER, Circuit Judge.

The Age Discrimination in Employment Act, 29 U.S.C. Secs. 621 et seq., is a major source of federal litigation and a growing factor in American labor markets. The question of what a plaintiff in an age discrimination case must show in order to defeat the defendant's motion for summary judgment is fundamental to the administration of the Act, and hence is of large practical importance.

The district judge granted summary judgment to the defendant in this case, so we must construe the facts as favorably to the plaintiff, Philip Visser, as the record will permit. Dr. Kenneth Packer, founder, chief executive officer, and dominant personality of the defendant, Packer Engineering Associates, Inc., a consulting firm, hired Visser in 1981 as an officer of the firm, and soon afterward Visser also became a member of the firm's board of directors. Visser was 57 years old when he was hired. Years later a bitter dispute erupted within the board over Kenneth Packer's conduct. A dissident group of board members, including Visser, believed that Packer was siphoning money from the firm into his pocket and that of another company that he dominated. Visser threatened to bring a stockholder derivative suit against Packer (and eventually carried out his threat). Matters came to a head on October 1, 1987, when an anonymous memorandum that Visser admitted at his deposition having coauthored was circulated to employees of the firm, attacking Packer's leadership. The same day, the board of directors voted Visser and two other dissident members of the board out of office. The dissidents remained employees of the firm for the time being. But two and a half weeks later a group of them quit to form their own competing consulting firm--which they had secretly incorporated while employed by Packer Engineering--and took with them valuable clients. The following day Kenneth Packer summoned Visser, who was not among those who had quit, to Packer's office and asked Visser to pledge his unqualified loyalty to him, Kenneth Packer. Visser refused and instead told Packer that he was unwilling to take "any further abuse" from him and demanded an apology for previous abuse. Packer fired Visser on the spot, and shortly afterward Visser joined the breakaway firm. Visser was 64 years old when he was fired--nine months short of the full vesting of his Packer Engineering pension. As a result he lost almost two-thirds of his pension benefits.

In the district court, as in this court, Visser's lawyer emphasized the impropriety of Kenneth Packer's conduct under the norms of corporation law. Packer Engineering is a corporation. It is not the personal fiefdom of Kenneth Packer. He had no right to ask Visser to pledge personal loyalty to him, as distinct from the firm. Insofar as Packer was siphoning funds from the firm, loyalty to him would have been, on Visser's part, disloyalty to his employer. He was wrongfully fired.

This may well be if the facts are as just recited, as we must assume they are because the case was decided on summary judgment. But the age discrimination law does not protect an older employee from being fired without good cause. Shager v. Upjohn Co., 913 F.2d 398, 401 (7th Cir.1990); Kephart v. Institute of Gas Technology, 630 F.2d 1217, 1223 (7th Cir.1980) (per curiam); cf. Pollard v. Rea Magnet Wire Co., 824 F.2d 557 (7th Cir.1987). It protects him from being fired because of his age. If the employer offers a pretext--a phony reason--for why it fired the employee, then the trier of fact is permitted, although not compelled, to infer that the real reason was age. Shager v. Upjohn Co., supra, 913 F.2d at 401. This is just the test of McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973), transposed to the age discrimination setting. But there is no indication of pretext here. Packer fired Visser because Visser was disloyal to him. Visser concedes as much. His reply brief says that "Kenneth Packer terminated Visser because Visser was disloyal to him not to the corporation or its shareholders" (emphasis in original); "he was fired for his loyalty to the corporation."

Visser does not understand the meaning of "pretext" in the law of discrimination. He says "the accusation of disloyalty was an ill founded pretext, and meant only that Visser opposed illegitimate actions of Kenneth Packer." A pretext, in employment law, is a reason that the employer offers for the action claimed to be discriminatory and that the court disbelieves, allowing an inference that the employer is trying to conceal a discriminatory reason for his action. It is not, as the quotation demonstrates that Visser believes, an unethical reason for action, or a mask for such a reason. Pollard v. Rea Magnet Co., supra, 824 F.2d at 559. If Kenneth Packer really fired Visser because Visser protested against Packer's highhanded behavior, or because Visser was a whistleblower, or because Visser's primary loyalty was, as it should have been, to Packer Engineering rather than to the person of Kenneth Packer (these are closely related points, of course), this may show that Packer is a bad man. It does not show or even tend to show that Visser was fired because of his age. It tends if anything to show the opposite, because if Visser was fired because of his disloyalty to Packer the natural though not inevitable inference is that he was not fired because of his age. Certainly his age had nothing to do with the direction of his loyalties.

But we must consider the possibility that there was more than one reason for Visser's discharge. After all, he was within months of the full vesting of his pension. One reason for firing an older employee might be to economize on the employer's pension costs. This is a shortsighted strategy, because it creates ill will among employees and forces the employer to pay new employees more in order to compensate them for the risk of falling victim to the strategy, and because it invites a lawsuit under the federal pension statute, which forbids an employer to discharge a participant in a pension plan "for the purpose of interfering with the attainment of any right to which such participant may become entitled under the plan." Employee Retirement Income Security Act, Sec. 510, 29 U.S.C. Sec. 1140; Ingersoll-Rand Co. v McClendon, --- U.S. ----, 111 S.Ct. 478, 485, 112 L.Ed.2d 474 (1990); Reichman v. Bonsignore, Brignati & Mazzotta P.C., 818 F.2d 278 (2d Cir.1987); Dister v. Continental Group, Inc., 859 F.2d 1108 (2d Cir.1988). But not all firms take the long view and carefully skirt all potential legal pitfalls, so we cannot assume that a firm would never fire an older worker just to pare labor costs a bit.

Granted, the mere existence of mixed motives--one permissible, one forbidden--is not enough to establish liability. The forbidden motive, age in this case, must be a sufficient condition, or but-for cause, of the employee's termination. Holzman v. Jaymar-Ruby, Inc., 916 F.2d 1298, 1304 (7th Cir.1990); Oxman v. WLS-TV, 846 F.2d 448, 452 (7th Cir.1988); Chappell v. GTE Products Corp., 803 F.2d 261, 265 (6th Cir.1986). For there is no tort, common law or statutory, without injury, Bachman v. St. Monica's Congregation, 902 F.2d 1259, 1263 (7th Cir.1990); and if the employee would have been fired anyway then he was not injured by the discrimination, and so he has no claim. However, once the plaintiff in a civil rights case has shown that a forbidden purpose was a substantial factor in the decision to fire him, the burden shifts to the employer to persuade the court that the plaintiff would have been fired anyway, even if that purpose had not existed. Price Waterhouse v. Hopkins, 490 U.S. 228, 109 S.Ct. 1775, 104 L.Ed.2d 268 (1989). That was a Title VII case but its reasoning is equally applicable, and its rule has been extended, to age discrimination cases. Burns v. Gadsden State Community College, 908 F.2d 1512, 1517-18 (11th Cir.1990) (per curiam); Grant v. Hazelett Strip-Casting Corp., 880 F.2d 1564, 1568-69 (2d Cir.1989).

So we must consider whether Visser's age may have been a substantial factor, along with his disloyalty to Kenneth Packer, in Packer's decision to fire him. There is not an iota of evidence that Visser's age per se was a substantial, or any, factor in this decision--no evidence for example that Packer is contemptuous of the ability of 64-year-olds. (Packer himself was 63 when he fired Visser, though he might of course exempt himself from infirmities that he believed afflict the rest of his age group.) But maybe Packer saw an opportunity to economize on pension expense. It is true that, for this to matter, the age discrimination law must make concern with pension expense an invidious ground for firing an employee. Age and pension expense are correlated, though they are not the same thing. There is an analytical difference, certainly, between firing a person on the basis of a stereotyped view of older workers' energy, flexibility, initiative, and other employment attributes, and firing him to save money. Nevertheless a number of cases hold that it is age discrimination to replace an older employee with a younger one for the sole purpose of economizing on salary costs. E.g., ...