Collier v. Budd Co.

• Decision Date: 26 September 1995
• Docket Number: No. 95-1227,95-1227
• Citation: 66 F.3d 886
• Parties: 68 Fair Empl.Prac.Cas. (BNA) 1435, 66 Empl. Prac. Dec. P 43,718 Roger COLLIER, Plaintiff-Appellant, v. The BUDD COMPANY, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 886

66 F.3d 886

68 Fair Empl.Prac.Cas. (BNA) 1435,

66 Empl. Prac. Dec. P 43,718

Roger COLLIER, Plaintiff-Appellant, v. The BUDD COMPANY, Defendant-Appellee.

No. 95-1227.

United States Court of Appeals, Seventh Circuit.

Argued July 6, 1995.

Decided Sept. 26, 1995.

Kenneth N. Flaxman (argued), Lesley A. Redman, Chicago, IL, for plaintiff-appellant.

Debra L. Duzinskas, Ross & Hardies, Chicago, IL, Robert M. Goldich, Rachel S. Lieberman (argued), Wolf, Block, Schorr and Solis-Cohen, Philadelphia, PA, for defendant-appellee.

Before CUMMINGS, CUDAHY and COFFEY, Circuit Judges.

CUDAHY, Circuit Judge.

Roger Collier was terminated from his job as a sales representative for the Budd Company's ("Budd") Polychem division on September 30, 1991, when he was 53 years old. Collier sued under the Age Discrimination in Employment Act (ADEA), 29 U.S.C. Secs. 621 et seq., claiming that Budd used the restructuring of its sales force as a subterfuge for age discrimination. The district court granted summary judgement to Budd, holding that Collier failed to state a prima facie case of age discrimination or, in the alternative that he did not present sufficient evidence of pretext. Collier appeals.

I. Background

Budd Polychem manufactures plastic components for industrial use. In 1991, Budd Polychem had a small sales force composed entirely of middle-aged men. The salesmen were Collier (age 53), Michael Ondos (age 54), William Shaw (age 48), Dan Joyce (age 45), and Philip Chilcote (age 40). ¹ After suffering financial losses in 1989 and 1990, Budd decided to reduce its sales force. Collier and Shaw were laid off, and Joyce voluntarily resigned. Chilcote and Ondos were retained.

Budd then restructured its sales operations to accommodate a reduced force. Previously, Budd had divided the country into five regions (East, South, Midwest, Central, and West/Southwest), with each salesman responsible for a single region. After reducing its sales force, Budd combined several of the regions. Collier's region, the Midwest, was merged with the Central, Ondos' region. Ondos was assigned to the new Midwest/Central region. The East and South (Joyce's and Shaw's regions, respectively) were merged. Mark Nemec (age 39), who was Budd's national field service representative at the time, became the new sales representative for the East/South region. Chilcote remained responsible for the West/Southwest region. Nemec's previous job as national field service representative was eliminated, and the sales representatives took responsibility for performing field service in their various regions. Collier argues that by implementing this plan, Budd discriminated against him and in favor of the younger employees.

II. McDonnell Douglas Framework

A plaintiff in an age discrimination case may attempt to prove his claim in one of two ways. He may either present direct evidence of discrimination or follow the burden-shifting method set forth in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802-04, 93 S.Ct. 1817, 1824-25, 36 L.Ed.2d 668 (1973). Collier proceeds under the McDonnell Douglas burden-shifting framework.

Under the McDonnell Douglas framework, a plaintiff must first state a prima facie case of discrimination. Collier contends that Budd's reduction and restructuring of its sales force was a pretext for age discrimination. In reduction-in-force (RIF) cases, a plaintiff states a prima facie case by showing that "(1) he was in the protected age group, ² (2) he was performing to his employer's legitimate expectations, (3) he was discharged, and (4) younger employees were treated more favorably." Roper v. Peabody Coal Co., 47 F.3d 925, 926 (7th Cir.1995). If Collier successfully states a prima facie case, the burden shifts to Budd "to articulate a legitimate, non-discriminatory reason for discharging" him. Roper, 47 F.3d at 926; see also DeLuca v. Winer Industries, Inc., 53 F.3d 793, 797 (7th Cir.1995). An employer that has proffered a legitimate, non-discriminatory reason for the discharge is entitled to summary judgment unless the plaintiff presents evidence that the proffered reasons are pretexts for discrimination. DeLuca, 53 F.3d at 797.

III. Prima Facie Case

Both parties agree that Collier has satisfied the first three elements of the prima facie case: he is a member of the protected class, his job performance was satisfactory and he was discharged. ³ Budd argues, however that Collier has failed to prove the fourth element: that younger employees were treated more favorably.

The district court held that Collier failed to state a prima facie case because he did not prove that he was replaced by a younger employee. Collier believes that Budd's original plan was to assign Ondos to the East/South region and give Nemec the Midwest/Central, leaving Nemec with Collier's old territory. This theory is supported by Ondos' deposition testimony. Ondos testified that Donald Hutton, the National Sales Manager for Budd Polychem, asked him to move to the eastern region, but he refused because his "family didn't want to move." ⁴ Regardless of what Budd's original plan may have been, however, Ondos' refusal to move meant that Nemec (the younger employee) was given the East/South region and Ondos, who was one year older than Collier, took the Midwest/Central Region. Thus, the district court held that Collier could not prove he was replaced by a younger employee--rather, he could at most prove that Budd planned to replace him with someone younger--a thesis that the court held to be insufficient to support a prima facie case of age discrimination.

The McDonnell Douglas method is a substitute for proving discrimination by direct evidence, and courts allow the burden-shifting framework because employers do "not normally memorialize an intention to discriminate on the basis of age." Castleman v. Acme Boot Co., 959 F.2d 1417, 1420 (7th Cir.1992). The prima facie case, and specifically its fourth prong, are meant to identify situations where the "actions taken by the employer, ... if unexplained, are more likely than not based on consideration of impermissible factors." Allen v. Diebold, Inc., 33 F.3d 674, 678 (6th Cir.1994). If Collier could prove that Budd fired him, intending (but failing) to replace him with a younger employee, we do not see how this action raises any less suspicion of an impermissible motive than if, when Budd fired Collier, it intended to replace him with a younger person and then succeeded in doing so. In either case, Budd's actions, if unexplained, allow the inference that the motivation for Collier's termination was to oust an older employee and hire someone younger. Thus, the district court's reasoning is not consistent with the purpose of the prima facie case requirement.

In any event, Collier's ability to state a prima facie case does not rest on whether he was replaced by Nemec. This court has occasionally stated that the replacement of an older employee by a younger employee constitutes the fourth prong of the prima facie case. See Grohs v. Gold Bond Building Products, 859 F.2d 1283, 1286 (7th Cir.1988) (fourth prong of prima facie case is that plaintiff "was replaced by a younger person"), cert. denied, 490 U.S. 1036, 109 S.Ct. 1934, 104 L.Ed.2d 405 (1989); cf. Sarsha v. Sears, Roebuck & Co., 3 F.3d 1035, 1039 (7th Cir.1993) (plaintiff stated prima facie case because he was "over forty years old, performed well at his job, and was fired and replaced by a younger person"). The prima facie case, however, is a flexible standard that "is not intended to be rigidly" applied. Mitchell v. Worldwide Underwriters Ins. Co., 967 F.2d 565, 567 (11th Cir.1992). The exact content of the fourth prong may vary from case to case to take differing circumstances into account. RIF cases present such a situation.

In RIF cases, we do not require a plaintiff to prove that he has been replaced by a younger employee. Generally, when a company reduces or restructures its work-force, it does not simply hire a new person to fill the discharged employee's old position. See Oxman v. WLS-TV, 846 F.2d 448, 453 (7th Cir.1988). Rather, as was the case here, jobs are often consolidated and/or work is shifted to other existing employees. Thus, at least in the strict sense, the discharged employee has not truly been replaced by anyone. ⁵ Consequently, the fourth element of the prima facie case in RIF cases is not that the employee was replaced by a younger employee but that "younger employees were treated more favorably." Roper, 47 F.3d at 926; cf. Oxman, 846 F.2d at 455; accord, Ingels v. Thiokol Corp., 42 F.3d 616, 621 (10th Cir.1994). ⁶ This standard is consistent with the McDonnell Douglas approach because it "requires an employer that releases a protected employee while simultaneously hiring (or not 'bumping') younger employees ... to explain its actions without forcing the protected employee to uncover that elusive 'smoking gun.' " Oxman, 846 F.2d at 455-56.

Therefore, Collier must prove that Budd treated its younger employees more favorably in order to satisfy the fourth prong under Roper and Oxman. We believe that he succeeds in doing so. Budd retained the two youngest members of its sales/service force: Nemec and Chilcote. Nemec, the youngest, was given sales duties that he had never previously performed, which apparently was a promotion from his previous position that was limited to service. Two of the three oldest employees, Collier and Shaw, were discharged. Ondos, the oldest (by a year over Collier) was retained--a fact that detracts from the assertion that the older employees were afforded less favorable treatment. Still, the retention of Nemec and Chilcote, the increased responsibilities given to Nemec and the firing of Collier and Shaw suggest that, overall, Budd did in fact treat its younger employees more favorably during the restructuring. Thus, Collier has successfully stated a prima facie case of age discrimination.

IV. Proffered...