Cerutti v. Basf Corp.

• Decision Date: 21 November 2003
• Docket Number: No. 02-3471.,No. 02-3700.,02-3471.,02-3700.
• Citation: 349 F.3d 1055
• Parties: Terry CERUTTI, Daniel Allen, Rodney Bryant, et al., Plaintiffs-Appellants/Cross-Appellees, v. BASF CORPORATION, Gerard Sabo, Kathy Reardon, et al., Defendants-Appellees/Cross-Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

349 F.3d 1055

Terry CERUTTI, Daniel Allen, Rodney Bryant, et al., Plaintiffs-Appellants/Cross-Appellees, v. BASF CORPORATION, Gerard Sabo, Kathy Reardon, et al., Defendants-Appellees/Cross-Appellants.

No. 02-3471.

No. 02-3700.

United States Court of Appeals, Seventh Circuit.

Argued May 14, 2003.

Decided November 21, 2003.

Rehearing En Banc Denied December 24, 2003^*.

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Patricia Kiper Rummer (argued), Lisle, IL, for Plaintiffs-Appellants.

Danuta B. Panich (argued), Andrew S. Rosenman (on brief), Mayer, Brown, Rowe & Maw, Chicago, IL, for Defendants-Appellees.

Before POSNER, RIPPLE, and MANION, Circuit Judges.

MANION, Circuit Judge.

In February 2000, BASF Corporation decided to restructure its styrenics operating unit. As part of this corporate reorganization, BASF terminated 23 employees at its styrenics manufacturing plant in Joliet, Illinois. Ten of those employees filed suit against BASF, alleging that the company fired and declined to rehire them on the basis of age, race, or national origin in violation of the Age Discrimination in Employment Act ("ADEA") and Title VII. Some of the plaintiffs also brought claims against three individual BASF employees, alleging that they intentionally interfered with the plaintiffs' employment relationships because of their race or national origin in violation of 42 U.S.C. § 1981. The defendants filed a motion for summary judgment, which the district court granted. The defendants also filed a motion for sanctions against the plaintiffs' counsel, which the district court denied. The plaintiffs appeal the district court's decision granting the defendants' motion for summary judgment, and the defendants cross-appeal the court's denial of their motion for sanctions. We affirm.

I.

BASF Corporation is headquartered in Mount Olive, New Jersey, and is comprised of 19 operating units, one of which is devoted to the company's styrenics production ("NPR Unit").¹ The products for BASF's NPR Unit are manufactured at plants throughout North America, including one in Joliet, Illinois, which manufactures various forms of polystyrene. As a result of financial losses suffered by the company's NPR Unit, BASF implemented a program of "Site Process Optimization" in 1998, which was completed in early 1999. Despite this program, the NPR Unit's performance for 1999 was still slightly negative and only a modest return on assets was projected for 2000. This resulted in BASF developing a new business plan that included the reorganization of virtually the entire NPR Unit, the purpose of which was to "reduce the number of personnel and repopulat[e] the organization with individuals who demonstrated specific behavioral skills and attributes that BASF believed were necessary to [the unit's] future success, and who, going forward, `could do more with less' in order to achieve the necessary [return on assets]." In February 2000, BASF formally notified the Joliet facility employees of its intention to restructure the NPR Unit.

In the first phase of the restructuring process, BASF offered a Voluntary Special Early Retirement Program ("VSERP") to all employees aged 53 or over who had ten or more years of service with the company as of December 2000. During the second phase, all employees who desired to continue their employment with the NPR Unit, young and old alike, were assessed to determine whether they possessed the "competencies" the company believed were necessary to effectively restructure the unit. Employees who lacked these competencies would be "deselected," i.e., terminated. To assist it with the assessment process, BASF retained the services of Development Dimensions International ("DDI"), a leader in the behavioral assessment field.

BASF began the restructuring process by categorizing all of the employees from its NPR Unit into "job families." Nine of the plaintiffs were placed in the "Operators" Job Family, i.e., hourly plant or lab workers, and one plaintiff, Pearl Adams, was placed in the "Individual Contributor" Job Family, which was designated for salaried, non-supervisory employees. Key competencies for each job family were then defined. Some of the competencies were developed through the joint efforts of BASF and DDI, whereas others were designed solely by BASF.

Shortly thereafter, DDI assessed personnel at the various NPR facilities nationwide. At the Joliet plant, 83 Operators and 13 Individual Contributors were evaluated with identical standard assessment techniques — i.e., problem-solving exercises, role-plays and targeted interviewing. These assessments were done over the telephone and DDI employees were not informed of the age, race or national origin of the BASF employees being evaluated. DDI forwarded its results to BASF for further consideration by the company's selection panels.² The selection panels were committees formed by BASF (and were comprised of individuals selected for leadership roles in the new organization) to act as the final arbiters on the competency levels of those individuals currently employed by the company in its NPR Unit. The six-member selection panel assembled to assess the competencies of employees in the Operators Job Family at the Joliet facility included: Kevin Biehle (a defendant in this action), Lawrence Brandin, Rich Harris, Gerard Sabo (also a defendant), Troy Shaner, and Thad Zdunich. The five-member selection panel for the Individual Contributors Job Family at the Joliet facility consisted of: Biehle, Brandin, Sabo, Shaner, and Rick Lee. Katherine Reardon, a defendant and BASF's Director of Human Resources for the Polymers Division (which includes the company's NPR Unit), attended all of the panel meetings held at the Joliet facility to oversee the implementation of the selection process and to ensure that the relevant guidelines were consistently applied.

The purpose of each selection panel was twofold: (1) to review DDI's scores and integrate them with the panels' collective knowledge of each employee's workplace behavior and performance; and (2) to evaluate additional competencies of each employee not considered by DDI. In reviewing DDI's competency evaluations, the selection panels applied the same three-point scale utilized by DDI to evaluate whether the scores given to an employee were consistent with his or her actual exhibited workplace behavior and performance. If no panel member voiced disagreement with a score assigned to an employee by DDI, it became final for that particular competency. Panel members who disagreed with a competency score were required to identify specific instances of workplace conduct that called into question the accuracy of the score given by DDI to the employee. This was then followed by a panel discussion on the behavioral examples cited by the objecting panel member(s). If the panel reached a consensus that the DDI score did not accurately reflect an employee's on-the-job behavior or performance, the score was increased or decreased accordingly.³ The initial findings of the selection panels were then reviewed by BASF's legal department and analyzed by Roland DeLoach, BASF's Manager of Equal Employment Opportunity, for possible adverse impact. BASF was advised that the tentative results of the assessment process employed by the company did not have a statistically significant impact on any protected group. Upon being so advised, BASF finalized the decisions made by the selection panels, which were then conveyed to NPR Unit employees on June 2, 2000.

Thereafter, Pearl Adams, Daniel Allen, Rodney Bryant, Terry Cerutti, Richard Clinton, Steven Davis, Anita Krantz, James Perona, Steve Real, and Michael Severado — all of whom were terminated for having six or more developmental needs — filed suit against BASF, Kevin Biehle, Kathy Reardon, and Gerard Sabo. All ten of the plaintiffs alleged that BASF fired and declined to rehire them because of their age in violation of the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. § 621 et seq. Plaintiff Steve Real (who is Hispanic) and plaintiffs Pearl Adams, Daniel Allen, and Michael Severado (all of whom are black), also filed claims against BASF, alleging that the company fired and declined to rehire them on account of their race or national origin in violation of Title VII, 42 U.S.C. § 2000e et seq., and against Biehle, Reardon, and Sabo, alleging that they intentionally interfered with these plaintiffs' employment relationships because of their race or national origin in violation of 42 U.S.C. § 1981. The defendants filed a motion for summary judgment, which the district court granted. The defendants also filed a motion for sanctions against the plaintiffs' counsel, which the court denied. The plaintiffs appeal the district court's decision granting the defendants' motion for summary judgment, and the defendants cross-appeal the court's denial of their motion for sanctions.

II.

The plaintiffs argue that the district court erred in granting the defendants summary judgment for their age, race, and national origin discrimination claims. We review de novo the district court's decision to grant summary judgment, construing all facts, and drawing all reasonable inferences from those facts, in favor of the plaintiffs, the non-moving parties in this case. Peele v. Country Mut. Ins. Co., 288 F.3d 319, 326 (7th Cir.2002). Summary judgment is proper when the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R.Civ.P. 56.

A plaintiff may prove employment discrimination under the ADEA, Title VII, and § 1981, using either the "direct method" or "indirect method."⁴ Cianci v. Pettibone Corp., 152 F.3d 723, 727-28 (7th Cir.1998). Under the direct method of proof, a plaintiff may show, by way of direct or...