Apsley v. Boeing Co.
| Decision Date | 27 August 2012 |
| Docket Number | No. 11–3238.,11–3238. |
| Citation | 115 Fair Empl.Prac.Cas. (BNA) 1573,691 F.3d 1184,54 Employee Benefits Cas. 1024,26 A.D. Cases 1439 |
| Parties | Perry APSLEY; Bob Bailey; Jacob A. Bakk; Gary Ball; Peggy S. Bell; Thomas Belton; Melonda Bircher; Jerry L. Bransteter; Michael E. Burgardt; Rocky R. Burris; Daniel D. Burrows; Betty Childers; Larry E. Combs; Harvey J. Conyac; Loren W. Cox; Phyllis A. Cox; Linda L. Dezarn; William D. Doshier; Alan S. Epperson; Lloyd C. Fansler; Jerald J. Gilbert; Richard Gotthard; Brian Groom; Denise A. Harris; Ron W. Hendershot; Verna J. Houston; Larry W. James; Gary L. Johnson; Melvyn J. Johnson; Donald R. Jones; Ralph O. Keener; Danny R. Kennedy; Melvin E. Kerns; Gordon B. Kinkead; Jimmy Le; Carlton D. Lee; Stephen L. Linck; Freddy J. McColpin; Glennys M. Montgomery; Cathy J. Munsell; Jan W. Murray; Huyen T. Nguyen; Luyen D. Nguyen; Kent W. Owen; Lowanda J. Patton; Paul D. Pete; Brent L. Popp; James E. Porter; Jay E. Powell; Willard J. Ratchford; Veronica Rios; Richard D. Roeder; Albert Schloetzer; William H. Setchell; James C. Sheppard; Debra L. Smith; Sammy J. Smith; Sharon A. Southern; Linda C. Sparrar; Abel L. Vasquez; Henry F. Victor; James R. Wallace, Unit Manager; Carolyn Y. Wheaton; Sylvester Williams, II; Janet M. Wilson; Walter Woods; Betty R. Young; Vernon L. Bentley; Redell Coleman; Charles D. Elder; Chip Gilchrist, II; Janet S. Hansen; Jerry L. McKinney; Joseph E. Schroeder; Steven M. Schwind; Teddy F. Sill; Charles Stark; Michael B. Welsh; Charles L. Bean, Jr.; James Hammon; Allen C. Hatcher; Mark Mccurdy; Steven Ngo; Ba Pham; Donald E. Titus; Jimmy Wallace; Barbra Odom; Frank Cash; Richard Wallin; Dale C. Jayne, Jr.; Steven Basic; Robert W. Boyd; and Regina Sue Walker, individually and on behalf of those similarly situated, Plaintiffs–Appellants, James Bowmaker; David L. Clay; Henry F. Butler; Throma A. Dyas; Olivia J. Housley; Sharron N. James; Warren K. Pyles; Darlene E. Rozar; James Walker; Roy T. Wells, individually and on behalf of those similarly situated, Plaintiffs, v. The BOEING COMPANY; Spirit AeroSystems, Defendants–Appellees. |
| Court | U.S. Court of Appeals — Tenth Circuit |
OPINION TEXT STARTS HERE
Lawrence W. Williamson, Jr., (Uzo L. Ohaebosim, with him on the brief), of the Williamson Law Firm, LLC, Kansas City, MO, for Plaintiffs–Appellants.
James M. Armstrong, (Trisha A. Thelen, Todd N. Tedesco, and Carolyn L. Matthews, with him on the brief), of Foulston Siefkin LLP, Wichita, KS, for Defendants–Appellees.
Before BRISCOE, Chief Judge, BALDOCK and HOLMES, Circuit Judges.
I. INTRODUCTION
This case arises from the Boeing Company's (“Boeing”) 2005 sale, to Spirit AeroSystems, Inc. (“Spirit”),1 of facilities in Wichita, Kansas, and Tulsa and McAlester, Oklahoma (the “Wichita Division” or “Division”). On June 16, 2005, Boeing terminated the Division's entire workforce of more than 10,000. The next day, Spirit rehired 8,354 employees, who had been selected by Boeing's managers. Although older employees predominated in the workforce both before and after the sale, a lower percentage of older workers than younger ones were rehired.2 The plaintiffs (the “Employees”) sued, seeking to represent a class of about 700 former Boeing employees who were not hired by Spirit.
The Employees alleged, among other things, that Boeing, Onex, and Spirit (the “Companies”) violated the Age Discrimination in Employment Act (“ADEA”), the Employee Retirement Income Security Act (“ERISA”), Title VII of the Civil Rights Act of 1964 (“Title VII”), and the Americans with Disabilities Act (“ADA”). In two separate orders, the district court granted summary judgment on the Employees' Title VII and ADA claims, Apsley v. Boeing Co., No. 05–1368–MLB, 2007 WL 3231526 (D.Kan. Oct. 30, 2007), and their ERISA and ADEA claims, Apsley v. Boeing Co., 722 F.Supp.2d 1218 (D.Kan.2010).3 The court denied the Employees' motion for reconsideration. Mem. & Order, Apsley v. Boeing Co., No. 05–1368–EFM, 2011 WL 1118835 (D.Kan. Mar. 28, 2011) (Doc. 365) [hereinafter “Mem. & Order of Mar. 28, 2011”]. The court certified its orders as final judgments under Federal Rule of Civil Procedure 54(b), and the Employees appealed. We have jurisdiction under 28 U.S.C. § 1291, and we affirm.
II. BACKGROUNDA. Boeing's Decision to Sell the Wichita Division
As part of a strategy to become more competitive, Boeing began in the late 1990s to focus its business on the initial engineering and design, sales and marketing, and final assembly of aircraft. Boeing increasingly outsourced the manufacture of component assemblies to outside suppliers and began to sell off some of its internal manufacturing operations.
One such operation was the Wichita Division. In 2002, Jeff Turner, the Division's general manager, discussed restructuring possibilities with Boeing executives. Restructuring was intended to reduce costs to make the Division competitive with outside suppliers for Boeing contracts. Ultimately, in 2003, Boeing decided instead to sell the Division's assets. Boeing advertised the Division for sale in 2003 and 2004, emphasizing the potential for cost savings and growth under new ownership. The new company would have a long-term supply agreement with Boeing, while cost savings would also make it competitive for non-Boeing business.
The parties' dispute in this case is primarily about how Boeing expected these savings would be achieved. According to the Companies, the new company would save money by paying its employees less and increasing productivity. Boeing believed that the Wichita Division labor contracts provided wages higher than the market required in Wichita, Tulsa, and McAlester. It also considered the Division's job codes to be too narrow and rigid, leading to inefficiencies. It was thought that a new, separate company would be able to negotiate less costly, more flexible labor contracts.
The Wichita Division's labor costs were also high because of the advanced age and seniority of its workforce. Significant seniority-based layoffs in the early 2000s had eliminated many younger employees, and the average age of the workforce was approximately forty-nine. The Companies, the Employees argue, planned to cut costs by getting rid of older, more expensive workers.
B. Selection of Spirit's Workforce
In 2004, Boeing entered into exclusive negotiations with Onex (the company which later formed Spirit) for the divestiture of the Wichita Division. The Wichita Division employed 10,671 people in June 2005, but Boeing projected that Spirit could still meet the Division's statement of work with only 80 to 90% of the workforce. The parties decided that Boeing management would recommend the most skilled and flexible employees for Spirit to hire. The Companies also agreed that Boeing would be responsible for paying layoff benefits for the employees Spirit did not hire. As a result, they determined that the purchase price would be adjusted upward if Spirit kept less than 90% of eligible employees. Spirit initially asked Division management to select 85% of the workforce; ultimately, management recommended 86.2% and Spirit retained 87.5%.
The Wichita Division's Human Resources personnel developed an evaluation system for managers to use which included the following factors: skills, productivity, quality, teamwork/attitude, safe work practices, lean,4 and corrective action. Managers were given details and examples for each criterion, but they were given no indication of how to weigh the seven factors. They were not instructed to consider employees' past training records, but they were specifically told not to consider age.
The Wichita Division was made up of twenty-nine director groups, which varied in size from a handful of employees to over a thousand. Under each director, one or two levels of managers oversaw the hourly employees. Each level of management was involved in the selection process. Over the course of the first half of 2005, hundreds of meetings took place involving managers and human resources representatives. Typically, an employee's first-level manager gave an initial recommendation, and then other managers who had worked with the employee provided input. The managers eventually agreed on whether or not to recommend the employee. The directors then approved or disapproved the managers' decision, and a panel reviewed the directors' determinations. 5
Near the end of the selection process, human resources representatives conducted an internal study to assess how racial minorities, women, and older individuals were faring under the selection process. The study showed that all three categories were being adversely impacted. The Companies have stated that they “did not equate these differences with discrimination or any other reason,” Aplee. Supp.App. at 1094, but after the study was conducted, “there were some additional recommendations of employees to be hired in organizations where there were differences in the selection rate as it related to race or gender,” id. “There were no adjustments made based on any differences as they related to the age of the workforce in a particular group.” Id.
C. Pension Negotiations
While Division managers were selecting Spirit's workforce, Spirit and its consultants were working out the new company's pension plan. Once employees were terminated from Boeing, they could no longer accrue additional benefits under its plans. As for benefits that were already accrued, the Companies agreed that Spirit would assume Boeing's pension liabilities at the close of the sale for the employees it hired, as long as Boeing transferred sufficient funds to cover them. Boeing would remain responsible for the pensions of employees Spirit did not hire.
Spirit also decided to set up a new pension plan for its employees. Spirit negotiated with the International Association of Machinists (“IAM”), and agreed to contribute to the IAM National Pension Fund (“NPF”), a joint labor-management multiemployer pension fund. According...
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