DiFederico v. Rolm Co.

• Decision Date: 14 January 2000
• Docket Number: No. 96-1169,96-1169
• Citation: 201 F.3d 200
• Parties: (3rd Cir. 2000) CHERI DiFEDERICO, Appellant v. ROLM COMPANY; SIEMENS ROLM COMMUNICATIONS, INC. (formerly Rolm Company); INTERNATIONAL BUSINESS MACHINES CORPORATION; SIEMENS CORPORATION
• Court: U.S. Court of Appeals — Third Circuit

Page 200

201 F.3d 200 (3rd Cir. 2000)

CHERI DiFEDERICO, Appellant v. ROLM COMPANY; SIEMENS ROLM COMMUNICATIONS, INC. (formerly Rolm Company); INTERNATIONAL BUSINESS MACHINES CORPORATION; SIEMENS CORPORATION

No. 96-1169

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

Argued April 26, 1999

Filed January 14, 2000

On Appeal from the United States District Court for the Eastern District of Pennsylvania D.C. Civil Action No. 94-cv-06901 (Honorable Ronald L. Buckwalter) [Copyrighted Material Omitted]

[Copyrighted Material Omitted]

Attorneys for Appellant: PAUL B. BECH, ESQUIRE (ARGUED) A. RICHARD FELDMAN, ESQUIRE Bazelon Less & Feldman, P.C. 1515 Market Street Suite 700 Philadelphia, PA 19102-1907

Attorneys for Appellees: RICHARD M. SOLAZZO, ESQUIRE (ARGUED) Cummings & Lockwood Four Stamford Plaza P. O. Box 120 Stamford, CT 06904-0120

ROBERT A. NICHOLAS, ESQUIRE Reed, Smith, Shaw & McClay 2500 One Liberty Place 1650 Market Street Philadelphia, PA 19103-7301

Before: SCIRICA, ROTH and McKAY,^* Circuit Judges

OPINION OF THE COURT

McKAY, Circuit Judge.

Plaintiff-Appellant Cheri DiFederico appeals the decision of the United States District Court for the Eastern District of Pennsylvania denying her relief under S 510 of the Employee Retirement Income Security Act [ERISA], 29 U.S.C. S 1140, a provision that makes it unlawful to interfere with the attainment of rights or benefits associated with an employee benefit plan.

In her complaint before the district court, Plaintiff alleged that Defendant-Appellee Rolm Company¹ terminated her employment to avoid obligations under its shortand longterm sickness and disability plans. The district court granted Defendant partial summary judgment, ruling that the short-term plan was not a qualified plan under ERISA and dismissing all claims arising out of that plan. See DiFederico v. Rolm Co., No. CIV.A. 94-CV-6901, 1995 WL 710561, at *2 (E.D. Pa. Nov. 30, 1995). The district court then conducted a bench trial on the remaining issues arising out of the long-term plan.

The testimony and evidence presented to the district court indicate that Plaintiff worked as a sales engineer for Defendant from 1983 to 1990, and as a field salesperson from 1990 to November of 1991. Early in 1991, Plaintiff began developing symptoms of chronic fatigue and chronic colitis which began affecting her job performance until she eventually took short-term sick leave once in July 1991 and again from September 3, 1991, to November 18, 1991, when her employment was terminated. The situation surrounding her termination was, of course, the most hotly contested evidentiary point of the trial. Plaintiff alleged that the correspondence between herself, her doctor, her lawyer, and Defendant and the circumstantial evidence surrounding the exchange of communications lead only to the conclusion that Defendant terminated her employment in an attempt to save money and rid itself of costly long term disability benefits obligations. Defendant presented evidence to the contrary, arguing that, far from ridding itself of disability obligations, it attempted to accommodate Plaintiff's developing medical condition until it became clear that Plaintiff was not going to accept the accommodations and return to work. In its review of Defendant's evidence, the district court found it "clear . . . that at all times up until November 18, 1991 defendant had an opinion from an independent doctor that plaintiff could return to work with restrictions." DiFederico v. Rolm Co., No. CIV.A. 94-6901, 1996 WL 53808, at *5 (E.D. Pa. Feb. 7, 1996). The record, according to the district court, showed that before November 11, 1991, Defendant offered Plaintiff a new position with the company--an office job as a sales engineer not requiring travel and situated near restroom facilities for those moments of acute colitis. The record also showed that on November 11, Defendant informed Plaintiff that failure to appear for work at the new position by November 18, 1991, would be considered voluntary resignation. The district court found that notwithstanding Defendant's attempts to accommodate Plaintiff's condition Plaintiff failed to report for work, and, as a result, her employment was terminated on November 18, 1991. See id. at *4.

At the close of the bench trial, the district court held that while Plaintiff established a prima facie case of interference she failed to prove that the legitimate nondiscriminatory reason offered by her employer for her termination was pretextual. See id. at *5. According to the district court, the decision to terminate Plaintiff was not based on an intent to withhold benefits, rather it "was based upon [P]laintiff's failure to report for work even after [D]efendant made a bona fide effort to accommodate her health problems." Id. at *5 n.3.

In this appeal Plaintiff claims that the district court (1) applied an erroneous legal standard to her showing of pretext, (2) erred in requiring her to prove that her employer's intent to interfere was the sole cause of her termination, and (3) erred in finding that she had failed to prove that her employer's reason was pretextual. We exercise jurisdiction under 28 U.S.C. S 1291.

We begin by addressing the question of whether the district court applied an erroneous legal standard to Plaintiff's showing that Defendant's reasons for terminating her were pretextual. We apply a plenary standard when reviewing a district court's application of legal standards to the facts. See FMC Corp. v. United States Dep't of Commerce, 29 F.3d 833, 838 (3d Cir. 1994).

Section 510 of ERISA prohibits " `employers from discharging or harassing their employees in order to keep them from obtaining [employee] benefits.' " DeWitt v. PennDel Directory Corp., 106 F.3d 514, 522 (3d Cir. 1997) (quoting Haberern v. Kaupp Vascular Surgeons Ltd., 24 F.3d 1491, 1501 (3d Cir. 1994)). The legal standard in S 510 cases is very clear. To recover, a plaintiff must demonstrate that the defendant had the " `specific intent'" to violate S 510. Id. This requires the plaintiff to show that "the employer made a conscious decision to interfere with the employee's attainment of pension eligibility or additional benefits." Id. at 523 (citing Gavalik v. Continental Can Co., 812 F.2d 834, 860 (3d Cir. 1987)). The plaintiff may use both direct and circumstantial evidence to establish specific intent, but when the plaintiff offers no direct evidence that a violation of S 510 has occurred, the court applies a shifting burdens analysis, similar to that applied in Title VII employment discrimination claims. See Gavalik, 812 F.2d at 851-53 (applying the McDonnell Douglas, 411 U.S. 792, 802 (1973), shifting burdens mechanism). In this burden shifting analysis, the plaintiff must first establish a prima facie case by showing: "(1) prohibited employer conduct (2) taken for the purpose of interfering (3) with the attainment of any right to which the employee may become entitled." Id. at 852. If the plaintiff is successful in demonstrating her prima facie case, the burden then shifts to the defendant employer, who must articulate a legitimate, nondiscriminatory reason for the prohibited conduct. If the employer carries its burden, the plaintiff then must persuade the court by a preponderance of the evidence that the employer's legitimate reason is pretextual. See Texas Dep't of Community Affairs v. Burdine, 450 U.S. 248, 25253 (1981).

In the case at hand, the district court applied the shifting burdens framework correctly. After Plaintiff established her prima facie case, Defendant articulated a legitimate, nondiscriminatory reason for its adverse employment decision--explaining that it fired Plaintiff for failing to return to work even after it had attempted to accommodate her condition. After Defendant carried its burden, Plaintiff was permitted to present evidence that Defendant's reason was pretextual. Plaintiff produced circumstantial evidence of Defendant's financial difficulties coinciding with her dismissal, but the district court concluded that Plaintiff's evidence was not enough to prove that Defendant's legitimate reason was a pretext. See DiFederico, 1996 WL 53808, at *5. The court explained that to find that Defendant had the specific intent to interfere with Plaintiff's attainment of benefits, Plaintiff would have needed to prove by a preponderance of the evidence that "the reasons offered by defendant . . . [were] not credible." Id. Such evidence would have then supported the inference that "the employer was motivated by an unlawful reason or reasons." Id. But the court concluded, "There [was] simply no objective evidence from which [it could] find defendant's explanation incredible." Id. It reviewed the "particularly . . . truthful and sincere" testimony of Plaintiff's supervisor and reported that "[t]here was not the slightest hint . . . that any decision with respect to [P]laintiff's continued employment was based upon a desire to save the [D]efendant from paying [long-term disability] benefits." Id.

In reference to its conclusion, the court noted, "Unfortunately for plaintiff, there is no `smoking gun[,'] the lack of which is not unusual in cases of this nature." Id. Plaintiff seizes upon this statement as evidence that the court, while ostensibly stating the correct legal standard, actually applied an erroneous legal standard that would require her to present direct evidence of a smoking gun to prove that her employer's reason was pretextual. See Appellant's Reply Br. at 1. It seems to us, however, that the court was simply explaining its application of the circumstantial evidence standard. Cf. Gavalik, 812 F.2d at 852 ("In most cases . . . specific intent to discriminate will not be demonstrated by `smoking gun' evidence. As a result, the evidentiary burden in discrimination cases may also be satisfied by the introduction of circumstantial evidence." The court was merely commenting on an unfortunate...