Douglas v. Anderson

• Citation: 656 F.2d 528
• Decision Date: 17 September 1981
• Docket Number: No. 78-1121,78-1121
• Parties: 115 L.R.R.M. (BNA) 4906, 27 Fair Empl.Prac.Cas. 47, 27 Empl. Prac. Dec. P 32,134 Frank DOUGLAS, Plaintiff-Appellant, v. Marvin ANDERSON, Raymond Hanson, Board of Directors, Hastings College of Law and Hastings Service Foundation, Inc., a corporation, Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

Page 528

656 F.2d 528

115 L.R.R.M. (BNA) 4906, 27 Fair Empl.Prac.Cas. 47,

27 Empl. Prac. Dec. P 32,134

Frank DOUGLAS, Plaintiff-Appellant, v. Marvin ANDERSON, Raymond Hanson, Board of Directors,

Hastings College of Law and Hastings Service

Foundation, Inc., a corporation,

Defendants-Appellees.

No. 78-1121.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted May 12, 1980.

Decided Sept. 17, 1981.

Jerome Berg, San Francisco, Cal., for plaintiff-appellant.

John J. Vlahos, Robert W. Tollen, San Francisco, Cal., argued, for defendants-appellees Appeal from the United States District Court for the Northern District of California.

Milne & Vlahos, D. Wayne Jeffries, Chickering & Gregory, San Francisco, Cal., on brief.

Before HUG and SCHROEDER, Circuit Judges, and BURNS ^*, District Judge.

HUG, Circuit Judge:

Frank Douglas brought this action against Marvin Anderson, Raymond Hanson, Hastings Service Foundation, Inc., and the Board of Directors for Hastings College of Law (collectively, "Hastings"). During the period relevant to this action, Anderson was the Dean of Hastings College of Law, and Hanson was the President of the Board of Trustees for the Hastings Service Foundation. Douglas asserts that Hastings terminated his employment as manager of the law school bookstore because of his age, in violation of the Age Discrimination in Employment Act of 1967 ("ADEA"), 29 U.S.C. §§ 621-634. In addition, Douglas asserts a pendent state claim for breach of contract.

After presentation of Douglas's case-in-chief before a jury, the district court directed a verdict in favor of Hastings on both claims. We affirm.

I FACTS

Douglas is experienced as a dealer in law books and as a consultant to law libraries. In 1971, Anderson requested Douglas to conduct a study to determine the feasibility of establishing an on-campus bookstore for the College of Law. After conducting the study, Douglas concluded that a bookstore could be successful. Hastings Service Foundation, Inc., a nonprofit corporation, was established to operate the bookstore. In an oral agreement, Anderson hired Douglas to act as manager of the bookstore.

Douglas worked as manager of the bookstore from August 1971 until September 1975. In the Spring of 1975 Hastings Service Foundation employed an accounting firm to conduct an audit of the financial books and records of the bookstore. The auditors discovered several substantial problems in the financial operations and management of the bookstore under Douglas's control. The audit report concluded that Douglas was performing unsatisfactorily as business manager of the bookstore. The audit report and Douglas's performance were discussed by the Board of Trustees for the Hastings Service Foundation. The Board discharged Douglas on September 2, 1975. He was 54 years-old at the time. Douglas was replaced by Louise Meecham, age 49, who had worked in the bookstore as a cashier during the period of Douglas's employment.

Douglas brought this action, alleging age discrimination and breach of the oral employment agreement. After the presentation of Douglas's case-in-chief, Hastings moved for a directed verdict pursuant to Federal Rule of Civil Procedure 50. The district court granted the motion on both claims. With respect to the ADEA claim, the court concluded that Douglas had not introduced substantial evidence in support of his assertion that he was dismissed because of his age. On the contract claim, the district court concluded that there was insufficient evidence to support a jury finding that Douglas had a contract for employment until retirement; the court ruled that the agreement thus was terminable at will. Douglas appeals.

II ADEA CLAIM

The ADEA provides that it "shall be unlawful for an employer ... to discharge any individual ... because of such individual's age." 29 U.S.C. § 623(a)(1). However, the statute specifically provides that it is not unlawful for an employer to base employment Because Douglas relies on a disparate treatment theory, ¹ proof of discriminatory motive on the part of Hastings is essential to Douglas's action. See Golden v. Local 55, Firefighters, 633 F.2d 817, 821 (9th Cir. 1980) (Title VII suit).

decisions on "reasonable factors other than age," or to discharge an individual "for good cause." 29 U.S.C. § 623(f)(1), (3). The plaintiff has the ultimate burden of proving that age was a "determining factor" in the employer's allegedly unlawful conduct. Kelly v. American Standard, Inc., 640 F.2d 974, 984 (9th Cir. 1981).

The Supreme Court recently summarized and clarified its earlier statements regarding the allocation of burdens and order of proof in a Title VII case alleging discriminatory treatment:

First, the plaintiff has the burden of proving by the preponderance of the evidence a prima facie case of discrimination. Second, if the plaintiff succeeds in proving the prima facie case, the burden shifts to the defendant "to articulate some legitimate nondiscriminatory reason for the employee's rejection." Third, should the defendant carry this burden, the plaintiff must then have an opportunity to prove by a preponderance of the evidence that the legitimate reasons offered by the defendant were not its true reasons, but were a pretext for discrimination.

The nature of the burden that shifts to the defendant should be understood in light of the plaintiff's ultimate and intermediate burdens. The ultimate burden of persuading the trier of fact that the defendant intentionally discriminated against the plaintiff remains at all time with the plaintiff.

Texas Department of Community Affairs v. Burdine, --- U.S. ----, ----, 101 S.Ct. 1089, 1093, 67 L.Ed.2d 207, 215 (1981) (citations omitted). These basic standards apply as well to litigation of a claim arising under the ADEA. See Kelly v. American Standard, Inc., 640 F.2d at 984, quoting Smith v. Flax, 618 F.2d 1062, 1066 (4th Cir. 1980).

In this case, Douglas's claim of prima facie discrimination, Hastings's rebuttal, and Douglas's claim of pretext were fully explored during the case-in-chief. Consequently, the district court properly entertained Hastings's motion for a directed verdict at the close of the presentation of plaintiff's evidence. See Loeb v. Textron, Inc., 600 F.2d 1003, 1016 (1st Cir. 1979). We will affirm the district court's order granting a directed verdict only if "the evidence when viewed most favorably to the party against whom the motion is directed cannot support a verdict in that party's favor." Traver v. Meshriy, 627 F.2d 934, 939-40 (9th Cir. 1980).

A. Prima Facie Case

To establish a prima facie case of age discrimination, Douglas had the burden of proving by a preponderance of the evidence that he was within the protected class, that he was performing satisfactorily as manager of the bookstore, and that he was discharged "under circumstances which give rise to an inference of unlawful discrimination." Burdine, --- U.S. at ----, 101 S.Ct. at 1094, 67 L.Ed.2d at 215 (footnote omitted). In McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802, 93 S.Ct. 1817, 1824, 36 L.Ed.2d 668 (1973), the Court set forth one way in which a Title VII claimant can use circumstantial evidence to establish a prima facie case of racial discrimination in hiring: ²

This may be done by showing (i) that he belongs to a racial minority; (ii) that he applied and was qualified for a job for which the employer was seeking applicants; (iii) that, despite his qualifications (footnote omitted). The McDonnell Douglas standards are flexible and can be modified to accommodate a claim of discriminatory discharge. See id. at 802 n.13, 93 S.Ct. at 1817 n.13; Loeb v. Textron, Inc., 600 F.2d at 1013. Moreover, an adaptation of the McDonnell Douglas standards provides a sensible method of evaluating the evidence in an action brought under the ADEA, as well as Title VII. Id. at 1015-16; Smith v. University of North Carolina, 632 F.2d 316, 332 (4th Cir. 1980).

he was rejected; and (iv) that, after his rejection, the position remained open and the employer continued to seek applicants from persons of complainant's qualifications.

Hastings urges us to adopt the elements of a prima facie case of age discrimination that were set forth by the Fifth Circuit in Price v. Maryland Casualty Co., 561 F.2d 609, 612 (5th Cir. 1977). In Price, the court modified the fourth element of the McDonnell Douglas test by apparently requiring a discharged employee to prove that "he was replaced with a person outside the protected group." Id. If we were to agree with Hastings that Price sets forth the minimum elements of prima facie proof in an ADEA suit, then Douglas would have failed to establish a prima facie case, because he was replaced by a person who was within the class protected by the ADEA. ³

We reject Hastings's argument. The elements of proof articulated in Price add a gloss that is absent from McDonnell Douglas. See Loeb v. Textron, Inc., 600 F.2d at 1012-13; Smith v. World Book-Childcraft International, Inc., 502 F.Supp. 96, 99-100 (N.D.Ill.1980). In fact, the Fifth Circuit itself has rejected the interpretation of Price now urged by Hastings. In McCuen v. Home Insurance Co., 633 F.2d 1150 (5th Cir. 1981), the court ruled that failure to meet the standards set forth in Price "does not foreclose a plaintiff from showing discrimination," suggesting that Price establishes one, but not the only, method of proving a prima facie case. Id. at 1151; see also McCorstin v. United States Steel Corp., 621 F.2d 749, 753 (5th Cir. 1980). Other cases similar to Price are subject to the same interpretation. See Smith v. World Book-Childcraft, 502 F.Supp. at 100 n.4. ⁴

A formula based on McDonnell Douglas must be adapted to the facts of each case. See Hagans v. Andrus, 651 F.2d 622, 624-625 (9th Cir. 1981). In determining whether a prima facie case has been established, the overriding inquiry is whether the evidence is sufficient to support an inference of...