E.E.O.C. v. Western Elec. Co., Inc.

Decision Date26 July 1983
Docket NumberNo. 82-1033,82-1033
Citation713 F.2d 1011
Parties32 Fair Empl.Prac.Cas. (BNA) 708, 32 Empl. Prac. Dec. P 33,759, 13 Fed. R. Evid. Serv. 684 EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Appellee, v. WESTERN ELECTRIC COMPANY, INCORPORATED, a corporation, Appellant.
CourtU.S. Court of Appeals — Fourth Circuit

Paul M. Thompson, Richmond, Va. (Christine H. Perdue, Richmond, Va., Paul E. Mirengoff, Washington, D.C., Hunton & Williams, Richmond, Va., Robert W. Benson, Western Elec. Co., Inc., Thornton H. Brooks, Brooks, Pierce, McLendon, Humphrey & Leonard, Greensboro, N.C., on brief), for appellant.

Susan Buckingham Reilly, Washington, D.C. (Michael J. Connolly, General Counsel, Philip D. Sklover, Associate Gen. Counsel, Vella M. Fink, Asst. Gen. Counsel, Washington, D.C., on brief), for appellee.

Before HAYNSWORTH, Senior Circuit Judge, and SPROUSE, Circuit Judge. *

SPROUSE, Circuit Judge:

This is an age discrimination case 1 involving a work force reduction in the Southern Region of Western Electric Company's (Western) Telephone Switching System Installation Operations. Western appeals from a judgment of the district court holding that it committed both individual and "pattern and practice" employment discrimination in its process of selecting installation supervisors for demotion. We reverse.

Western, beginning in late 1974, experienced a substantial downturn in its volume of installation business nationwide. As a result, Western drastically reduced its installation work force at all levels during the years of 1974, 1975 and 1976.

This case concerns only the demotion of installation supervisors in the Southern Region of Western's operations. The Southern Region is divided into five installation areas: the Carolinas; Georgia; Florida; Alabama/Kentucky/Tennessee; and Louisiana/Mississippi. Each installation area is divided into several sub-areas, which consist in turn of several offices or "orbits." The Western employees involved in this action supervised the work of "installers," who are the hourly, unionized Western employees who perform the hands-on work of installing Western's telephone systems.

Installation supervisors are ranked according to five categories of "point" levels: 320, 370, 440, 500 and 590. The point levels correspond with amount of pay and responsibility. The 320's are front line supervisors; 370's, 440's and 500's are responsible for installation activities within orbits; and 590's oversee subordinate supervisors and projects involving many installers within installation areas.

Western, in late 1974, instituted its program of work force reduction among the supervisors because of the downturn of business and consequent discharge of installers. 2 Area supervisors were directed to reduce the number of supervisors to maintain an approximate ratio of one supervisor to seven installers. 3 Western's written policy guidelines for demotion of supervisors in the Southern Region required that age, sex, race or religion play no role in any decision, and that "ability, performance, potentiality, term of employment, and the needs of the business" be the criteria used in demotion selections. The number of supervisors was reduced by three types of personnel actions: (1) demotion of lower-level supervisors to installers; (2) demotion of higher-level supervisors to lower point levels; 4 and (3) certain supervisors who were pension-eligible were offered the opportunity to retire with a separation allowance of a year's pay. 5

There were approximately 725 supervisors of all point levels in the Southern Region in mid-1974, before the work force reduction began. Approximately 213 individual supervisors were demoted over the next two and one-half years. Approximately 225 individual supervisors were affected by this total reduction-in-force program.

The present action was brought initially by the Secretary of Labor on May 15, 1978. The Equal Employment Opportunity Commission (EEOC) was substituted as plaintiff in January, 1980. The complaint charged that age considerations tainted Western's selections of installation supervisors for demotion. 6 The EEOC's proof was essentially two-fold: first, statistical evidence was offered to show that older supervisors were selected for demotion disproportionately with their percentage representation in the supervisory work force; second, sixteen individual supervisors from the Florida and Carolinas areas in the protected 40 to 65 age group testified that they were selected for demotion because of their age.

Western contended at trial that its actions were not age-discriminatory and were taken solely for legitimate business reasons. Western asserted that the EEOC's statistical analyses were flawed, and that the EEOC's statistics were not legally significant. Western further argued that taking ability into account, any statistical disparity in the demotion of older and younger supervisors was explained. To rebut the accusation of discrimination against the EEOC's sixteen witnesses, Western presented the testimony of the area supervisor responsible for each decision. In each case, the supervisor presented a detailed non-discriminatory explanation for his decision.

Following a bench trial, the district court issued Findings of Fact and Conclusions of Law initially drafted by the EEOC, and entered an Interim Judgment and Order. The court held that Western had willfully violated the ADEA. It essentially found that Western discriminated against the 16 supervisors individually, and that by "pattern and practice," Western had discriminated against supervisors in the Southern Region, ages 40 to 65, as a group. 7 The Interim Judgment and Order identified in an appendix 192 supervisors who might have been affected by the violations, and provided for Stage II proceedings to determine the relief due the individuals listed. 8 The district court stayed those proceedings pending the disposition of this appeal.

Western raises two principal contentions on appeal. First, it argues that the district court erred in finding "prima facie cases" of discrimination as to the 16 individual claimants, and that, in any event, Western presented unrebutted business reasons for demoting the 16 individuals. Second, Western argues that the EEOC failed to prove a prima facie case of pattern or practice discrimination. We agree that Western presented unrebutted business reasons for the demotions and with its second contention. Since we reverse for those reasons, it is unnecessary to address the other possible grounds for reversal advanced by Western.


To establish discrimination in the individual cases, the EEOC must prove by a preponderance of the evidence that "but for" Western's motive to discriminate against an older supervisor, he would not have been demoted. Lovelace v. Sherwin-Williams Co., 681 F.2d 230, 239 (4th Cir.1982); Loeb v. Textron, Inc., 600 F.2d 1003, 1019 (1st Cir.1979). The EEOC may meet its burden "under ordinary principles of proof by any direct or indirect evidence relevant to and sufficiently probative of the issue." Lovelace, 681 F.2d at 239. Alternatively, it may rely on the judicially created proof scheme for Title VII cases, see McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973) and Texas Dept. of Comm. Affairs v. Burdine, 450 U.S. 248, 101 S.Ct. 1089, 67 L.Ed.2d 207 (1981), which has been adapted for application in ADEA litigation. See, e.g., Fink v. Western Electric Co., 708 F.2d 909 (4th Cir.1983); Lovelace, 681 F.2d 230; Smith v. University of North Carolina, 632 F.2d 316 (4th Cir.1980); Loeb, 600 F.2d 1003.

The McDonnell-Douglas proof scheme involves a three stage process. First, the plaintiff must establish a "prima facie case." By establishing a "prima facie case," the plaintiff creates a rebuttable "presumption that the employer unlawfully discriminated against" him, and the burden of producing evidence on the issue shifts to the defendant. Burdine, 450 U.S. at 254, 101 S.Ct. at 1094. The defendant, at stage two, must rebut "the presumption by producing evidence that the plaintiff was [demoted] ... for a legitimate, nondiscriminatory reason." Id. at 255, 101 S.Ct. at 1094. The employer is not required to prove absence of discriminatory motive, but merely articulate some legitimate reason for its action. Smith, 632 F.2d at 332-33. If the defendant's evidence carries this burden, the presumption in favor of the plaintiff is destroyed. 450 U.S. at 255, 101 S.Ct. at 1094. At the third stage, the plaintiff bears the burden of demonstrating that the proffered reasons were pretextual or untrue. Id. at 256, 101 S.Ct. at 1095. This burden merges with the plaintiff's ultimate burden of persuasion on the motivational issue. Id.; Lovelace, 681 F.2d at 240-41.

As adapted from the McDonnell-Douglas line of cases, the elements of the plaintiff's "prima facie case" in the usual ADEA case are: (1) the plaintiff is in the protected age group; (2) the plaintiff was discharged or demoted; (3) at the time of discharge or demotion, the plaintiff was performing his job at a level that met his employer's legitimate expectations; and (4) following his discharge or demotion, the plaintiff was replaced by someone of comparable qualifications outside the protected class. See Lovelace, 681 F.2d at 239-41; Marshall v. Goodyear Tire & Rubber Co., 554 F.2d 730 (5th Cir.1977). It is readily apparent that the fourth element will not fit well in most reduction-in-force cases. See McCorstin v. United States Steel Corp., 621 F.2d 749 (5th Cir.1980). In such cases, the claimant's job is often phased out and thus he would be unable to point to a replacement. While we do not believe that a claimant in such a case should be precluded, for all practical purposes, from using the McDonnell-Douglas proof scheme by being required to satisfy the fourth element, the claimant should not be permitted to establish a "prima facie case" by...

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