Berndt v. Kaiser Aluminum & Chemical Sales, Inc.

• Decision Date: 20 March 1986
• Docket Number: Nos. 85-1488,No. 85-1518,No. 85-1488,85-1518,85-1488,s. 85-1488
• Citation: 789 F.2d 253
• Parties: 40 Fair Empl.Prac.Cas. 1252, 40 Empl. Prac. Dec. P 36,198 Carl F. BERNDT v. KAISER ALUMINUM & CHEMICAL SALES INC., Appellant inCarl F. BERNDT v. KAISER ALUMINUM & CHEMICAL SALES INC. Appeal of Carl F. BERNDT, in . Submitted Pursuant to Third Circuit Rule 12(6)
• Court: U.S. Court of Appeals — Third Circuit

Page 253

789 F.2d 253

40 Fair Empl.Prac.Cas. 1252,

40 Empl. Prac. Dec. P 36,198

Carl F. BERNDT v. KAISER ALUMINUM & CHEMICAL SALES INC., Appellant in No. 85-1488.

Carl F. BERNDT v. KAISER ALUMINUM & CHEMICAL SALES INC.

Appeal of Carl F. BERNDT, in No. 85-1518.

Nos. 85-1488, 85-1518.

United States Court of Appeals Third Circuit.

Submitted Pursuant to Third Circuit

Rule 12(6) March 20, 1986.

Decided May 6, 1986.

As Amended May 21, 1986.

Ronald H. Surkin, Blank, Rome, Comisky & McCauley, Philadelphia, Pa., for Kaiser.

Thomas P. Preston, Duane, Morris & Heckscher, Philadelphia, Pa., for Berndt.

Before: HUNTER and MANSMANN, Circuit Judges and BROTMAN, District judge ^*

OPINION OF THE COURT

MANSMANN, Circuit Judge.

In these cross-appeals ¹ after a jury verdict for the plaintiff in this case brought pursuant to Section VII of the Age Discrimination in Employment Act (ADEA), 29 U.S.C. Sec. 621 et seq., we are asked to review, inter alia, two issues which have not yet been squarely dealt with by our court: 1) whether the district court is required to re-examine the elements of the plaintiff's initial prima facie case in ruling upon post-trial motions; and 2) whether unemployment compensation payments should be eliminated from the total amount of damages subject to pre-judgment interest. Because we find that the district court applied the correct legal standards in denying the post-trial motions and in including the unemployment compensation benefits in the amount subject to pre-judgment interest and finding no merit in any of the other allegations raised, we will affirm the district court in all respects. 629 F.Supp. 768.

I. Procedural and Factual Circumstances

The plaintiff, Carl F. Berndt (Berndt), filed an amended complaint in this action alleging that he was unlawfully discharged from Kaiser Aluminum & Chemical Sales, Inc. (Kaiser) on account of his age during a reduction in labor force by Kaiser and additionally, that his discharge constituted a breach of contract.

The district court severed the contract action from the ADEA claim for purposes of trial. The jury returned a verdict on liability in favor of Mr. Berndt on the ADEA claim. The jury specifically found that age was a determinative factor in Kaiser's termination of the plaintiff and that the termination was willful. Summary judgment was granted by the court in favor of Kaiser on the contract claim.

By agreement of the parties, the issue of damages was submitted to the district court upon a stipulated set of facts which established the monetary value of certain items claimed as damages by Mr. Berndt. The court entered judgment for actual damages in the amount of $139,881.95. Deciding that the issue of willfulness had been improperly submitted to the jury, the district court did not award liquidated damages. The district court also determined that an award of prejudgment interest as well as an award of six months' front pay was appropriate. Kaiser thereupon filed a Motion for Judgment Notwithstanding the Verdict or for New Trial which was denied.

According to the stipulated facts, Mr. Berndt was born on June 19, 1923. He was employed by Kaiser at age 50 as a sales representative and worked in Kaiser's Eastern Region of the Building and Construction Products Division from November 22, 1973 until his termination, effective August 31, 1981. In December 1980, Mr. Berndt became a senior sales representative with Kaiser.

Prior to August 1981, Kaiser sold three product lines in its Eastern Region: Mobile Homes Products, Agricultural Roofing Products, and Highway Products. As a result of the difficult economic conditions existing in the industry, Kaiser made a decision to eliminate its Agricultural Roofing Product line, effective December 1981; to reduce its Mobile Homes Product line; and to close its Lancaster, Pennsylvania manufacturing plant. This cutback in products necessitated the reduction of the Eastern Region sales force from six to four salesmen.

During this time there were six salesmen in the Eastern Region who were assigned to specific product lines. The region was divided among the six by geographic territory. The men included Homer (Michael) Foote, assigned to Agricultural Roofing; Frank Papso, assigned to Mobile Home Products; Paul Dean, assigned to Highway Products, Mobile Home Products and Fabricated Products; Jack Fischer, assigned to Highway Products, Mobile Home Products and Agricultural Roofing Products; James C. Hannah, assigned to Highway Products and Agricultural Roofing; and Carl Berndt, assigned to Highway Products.

In May of 1981, Michael Venie, Regional Sales Manager for Kaiser's Eastern Region of the Building and Construction Product Division recommended to George Novotny, Division Manager, that Mr. Berndt be terminated and not be considered for a transfer to another job. Mr. Novotny presented Mr. Berndt's name for layoff to the corporate Personnel Committee. On August 31, 1981, Mr. Berndt was terminated by Kaiser. At the time of his termination, Mr. Berndt was 58 years old and was the oldest Highway Products salesman in the Building and Construction Division of Kaiser's Eastern Region.

II. Kaiser's Appeal

A. Burden of Proof

Kaiser maintains that Mr. Berndt failed to sustain his burden of proof in several respects: namely, 1) that Mr. Berndt failed to prove that he was qualified for one of the four remaining sales positions following the acknowledged labor force reduction; 2) that Mr. Berndt failed to prove he was less favorably treated than younger employees; 3) that Mr. Berndt failed to prove that age was a determinative factor in Kaiser's decision to terminate him; and 4) that Mr. Berndt failed to prove that Kaiser intentionally discriminated against him on account of his age.

The ADEA makes it unlawful for an employee "to discharge an individual ... because of such individual's age." 29 U.S.C. Sec. 623(1). In order to recover under the ADEA, a plaintiff must prove by a preponderance of the evidence that age was a determinative factor in the employer's decision. Duffy v. Wheeling Pittsburgh Steel Corp., 738 F.2d 1393, 1395 (3d Cir.), cert. denied, --- U.S. ----, 105 S.Ct. 592, 83 L.Ed.2d 702 (1984). Because the allocation of proof in an ADEA case ², similar to the allocation of proof under Title VII of the Civil Rights Act of 1964, 42 U.S.C. Sec. 200(e), McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973), has been set forth on numerous occasions by this court, we turn directly to the procedural problem this case presents.

The defendant's first two allegations regarding burden of proof focus upon whether or not Mr. Berndt has made out a prima facie case while his last two allegations are concerned with whether or not Mr. Berndt has met his ultimate burden of proving that age was "a determinative factor" in the employer's decision. See Smithers v. Bailar, 629 F.2d 892 (3d Cir.1980).

Under the McDonnell Douglas approach, the plaintiff has the initial burden of establishing a prima facie case of unlawful discrimination by a preponderance of the evidence. This is accomplished in a reduction-in-force case, such as before us by the plaintiff showing "that he is a member of the protected class and that he was laid off from a job for which he was qualified while others not in the protected class were treated more favorably." Massarsky v. General Motors Corp., 706 F.2d 111 (3rd Cir.), cert. denied, 464 U.S. 937, 104 S.Ct. 348, 78 L.Ed.2d 314 (1983).

In this case after the plaintiff offered his evidence, the defendant moved for a directed verdict, challenging whether or not plaintiff had established a prima facie case. The district court denied the motion and directed the defendant to come forth with its rebuttal, or in the court's words, "the business reasons [it had] for [its employment] decision." The case was then fully tried before a jury on the merits.

Since the case was tried on the merits, we believe the question of whether a prima facie case was established "unnecessarily [evades] the ultimate question of discrimination vel non." United States Postal Services Board of Governors v. Aikens, 460 U.S. 711, 714, 103 S.Ct. 1478, 1481, 75 L.Ed.2d 403 (1983). The prima facie case creates a presumption of discrimination. The creation of a presumption by the prima facie case and the established allocation of burdens of production are intended only "to sharpen the inquiry into the elusive factual question of intentional discrimination." Texas Dept. of Community Affairs v. Burdine, 450 U.S. 248, 255 n. 8, 101 S.Ct. 1089, 1094 n. 8, 67 L.Ed.2d 207 (1981). It is within this context that the United States Supreme Court has written:

But when the defendant fails to persuade the district court to dismiss the action for lack of a prima facie case, and responds to the plaintiff's proof by offering evidence of the reason for the plaintiff's rejection, the fact finder must then decide whether the rejection was discriminatory within the meaning of Title VII. At this stage, the McDonnell-Burdine presumption "drops from the case," 450 U.S. at 255, n. 10, and "the factual inquiry proceeds to a new level of specificity." Id. at 255.

Aikens, supra at 714-15, 103 S.Ct. at 1481-82. That is, the fact finder is in a position to decide the ultimate factual issue which in this case is whether Kaiser discriminated against Mr. Berndt. Moreover, "[w]here the defendant has done everything that would be required of him if the plaintiff had properly made out a prima facie case, whether the plaintiff did so is no longer relevant". Aikens, supra, at 715, 103 S.Ct. at 1482.

Thus, once the district court denied Kaiser's motion for directed verdict and ordered that the case proceed, the focus of inquiry shifted to deciding the ultimate discrimination issue. Accordingly, we find it unnecessary at this point in time to decide whether or not a prima facie case had, in fact, been established by the plaintiff.

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