Appelbaum v. Milwaukee Metropolitan Sewerage Dist.

• Citation: 340 F.3d 573
• Decision Date: 28 August 2003
• Docket Number: No. 01-2977.,01-2977.
• Parties: Doris S. APPELBAUM, Plaintiff-Appellee, v. MILWAUKEE METROPOLITAN SEWERAGE DISTRICT, Defendant-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)

340 F.3d 573

Doris S. APPELBAUM, Plaintiff-Appellee, v. MILWAUKEE METROPOLITAN SEWERAGE DISTRICT, Defendant-Appellant.

No. 01-2977.

United States Court of Appeals, Seventh Circuit.

Argued May 13, 2002.

Decided August 28, 2003.

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Katherine L. Charlton (argued), Perry, Shapiro, Quindel, Saks, Charlton & Lerner, Milwaukee, WI, for Plaintiff-Appellee.

James R. Scott (argued), Lindner & Marsack, Thomas J. Crawford, Milwaukee Metropolitan Sewage District, Legal Services, Milwaukee, WI, for Defendant-Appellant.

Before ROVNER, DIANE P. WOOD, and WILLIAMS, Circuit Judges.

ILANA DIAMOND ROVNER, Circuit Judge.

Doris Appelbaum worked as a secretary for the Milwaukee Metropolitan Sewerage District ("MMSD") for fifteen years until she was discharged at age sixty. A jury found that the MMSD had fired her based on her age, in violation of the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. §§ 623(a)(1), 626 (the "ADEA"), and that it did so in wilful disregard of the ADEA's provisions, see id. § 626(b). MMSD appeals, contending the evidence was insufficient to support either the liability or the wilfulness determinations. We affirm.

I.

Appelbaum's employment with MMSD began in 1983. Beginning in 1991 and through the date of her termination, she was assigned to MMSD's Human Resources department. As of 1996, Appelbaum was one of three secretaries in that department. However, in August 1996, MMSD's number two official, Kristine Hinrichs, decided that the number of secretaries in the department should be reduced from three to two. She made this decision pursuant to a reduction in force and partial privatization of MMSD's operations that eventually would reduce its overall workforce from a total of between 600 and 700 employees down to 200.

Of the three secretaries in the Human Resources Department, Hinrichs selected Appelbaum for layoff. In choosing Appelbaum, Hinrichs rejected the advice of department managers, who felt that she should instead lay off a younger (in her late thirties) employee, Cassandra Reynolds-Taylor, whose work was regarded as poor. Originally, Appelbaum was to be laid off effective January 1, 1997, but that date subsequently was extended to July 1, 1997, so that Appelbaum, who in July turned sixty, could retire with full pension benefits.

Ultimately, Appelbaum's job was saved when one of the other secretaries in the department resigned in February 1997, obviating the need for a layoff. The following month, Don Schriefer became the new Manager of Human Resources. In the five years prior to that appointment, Schriefer had worked for MMSD as a labor and employment lawyer. Shortly after he took over the Human Resources department, Schriefer fired Reynolds-Taylor based on repeated complaints about her performance; Schriefer would later describe her work as "[p]retty egregious." R. 65 at 247. "Almost everything that she did was done erroneously or wrong or not done at all." Id. The discharge of Reynolds-Taylor left Appelbaum as the only secretary in the department, with a heavy workload.

For obvious reasons, employees of the Human Resources department were obligated to keep in confidence the private information regarding other MMSD employees with whom they dealt in the course of their work. The importance of maintaining confidentiality was something that Schriefer stressed to employees of the department on more than one occasion. Schriefer informed the staff that any breach of that confidentiality would result in termination. Despite Schriefer's warnings, confidential information was leaked from the Human Resources department on a number of occasions during his tenure as Manager. On one occasion, for example, Schriefer met with a temporary MMSD employee to inform her that her employment contract was being terminated. Before he could break the news, the employee revealed that she already knew she was going to be fired. She told Schriefer that she had a "secret friend" at MMSD who had learned of the termination decision from someone in the Human Resources department. R. 65 at 224-25. (Schriefer previously had discussed the decision to discharge this employee with other members of the department.) In the wake of this incident, Schriefer again admonished his staff about the importance of confidentiality and reminded them that any leak of confidential information would result in discharge of the offending employee.

Not long after this incident, Schriefer imposed a five-day disciplinary suspension on Trina DeLeon, an employee in his department, for what he believed to be insubordinate behavior. DeLeon had ordered Schriefer out of her office when he attempted to question her about a leak of confidential information.¹ DeLeon subsequently became aware that word was out among MMSD staff about her suspension and complained to Schriefer. Schriefer commenced an investigation to determine who had disclosed the information, and as part of that investigation he interviewed all of the employees in his department.

When Schriefer spoke with Appelbaum, she revealed that one day when she was on her way to the washroom, an MMSD employee by the name of Sheila Ashley had stopped Appelbaum and asked whether she had heard about DeLeon's suspension. Appelbaum responded to Ashley, "[Y]es, I heard," and added that she was not at liberty to discuss the matter; Appelbaum suggested that she address any questions to DeLeon herself. R. 65 at 54. Schriefer construed Appelbaum's remarks to Ashley as a leak of confidential information, and he decided to fire Appelbaum for the transgression.

Schriefer believed that Appelbaum's discharge was warranted on a second ground: her work performance. Appelbaum's work had been rated satisfactory or better throughout the bulk of her tenure with MMSD, and she had received a number of merit-based increases in her salary. But early in 1997, Schriefer's predecessor in the Human Resources department had prepared a review for 1996 indicating that Appelbaum's work needed improvement in certain areas. In Schriefer's view, Appelbaum's performance had not changed for the better in 1997. He decided to fire her on this basis as well.

Schriefer subsequently met with Appelbaum and advised her of his intent to discharge her. He offered Appelbaum a separation agreement pursuant to which MMSD would supply a neutral letter of reference to prospective employers and Appelbaum in turn would waive any claims she might have under the ADEA. Schriefer advised Appelbaum that if she did not accept MMSD's offer, he would fire her. He gave her several weeks to consider the offer. Appelbaum ultimately declined the offer.

Upon learning that Appelbaum had rejected the separation agreement, Schriefer on January 21, 1998, sent her a Notice of Contemplated Discipline formally advising her of his decision to terminate her employment. Schriefer's memorandum indicated that his decision was based on her work performance as well as her breach of confidentiality. On the subject of her work quality, Schriefer advised Appelbaum that he had "received complaints this year about your performance from every staff member, as well as from both temporary workers we employed this year." R. 25 Ex. E-1, Notice of Contemplated Discipline at 2.

Appelbaum prepared a written response to Schriefer's memorandum challenging both of the reasons he had given for her termination. Apropos of her work, Appelbaum noted that she had not been notified of her co-workers' complaints, had not been given the chance to respond to them, and had not been advised as to how MMSD expected her to correct the complained-of deficiencies. She also noted that Schriefer had failed to conduct a midyear review of her work in 1997 as a follow-up to her negative 1996 review, as Schriefer had promised he would do. R. 25 Ex. A-5 at 2-3, 5-6.

In a February 17, 1998 written reply to Appelbaum, Schriefer agreed that it would be inappropriate to terminate her solely on the basis of her work performance, in view of the concerns she had raised. Nonetheless, Schriefer went on, Appelbaum's breach of department confidentiality was an offense that required her termination. "[Y]our performance problems are presently relevant to me only because they constitute a background that, to my mind, aggravates rather than mitigates my view of this offense." R. 25 Ex. E-2 at 2.

Appelbaum unsuccessfully appealed the termination decision through MMSD's internal grievance procedure. Mike McCabe, MMSD's chief of legal services, conducted a hearing at which both Appelbaum and MMSD presented evidence. McCabe subsequently issued a written decision sustaining Schriefer's decision to discharge Appelbaum. In that decision, McCabe described the standard of review he applied as "whether the supervisor's action was within the reasonable range of alternatives which the supervisor might have taken under the circumstances." R. 22, McCabe Decision at 6. Applying that standard, McCabe determined that Schriefer's decision was justified based on Appelbaum's poor performance as well as her breach of confidentiality. His decision ended with the following "Conclusion":

On the facts as I have found them to be in the context of what, at best, can be termed very poor performance in 1997 and poor performance in 1996, I believe termination was within the reasonable range of alternatives which Mr. Schriefer faced. It is, therefore, my determination that his action in terminating Doris Appelbaum be upheld.

Id. With her termination final, Appelbaum retired. Although, having attained the age of sixty, Appelbaum was entitled to full retirement benefits, the monthly pension payment that she received was less than it would have been had she continued working until age sixty-five, as was her plan.

Appelbaum then sued MMSD for age discrimination in the district court, and the case proceeded to trial. At trial, Schriefer testified that after initially notifying Appelbaum that she was...