Elliott v. Montgomery Ward & Co.

• Decision Date: 17 August 1992
• Docket Number: No. 91-2544,91-2544
• Citation: 967 F.2d 1258
• Parties: 62 Fair Empl.Prac.Cas. (BNA) 259, 59 Empl. Prac. Dec. P 41,584 Marilee S. ELLIOTT, Appellant, v. MONTGOMERY WARD & COMPANY, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1258

967 F.2d 1258

62 Fair Empl.Prac.Cas. (BNA) 259,

59 Empl. Prac. Dec. P 41,584

Marilee S. ELLIOTT, Appellant, v. MONTGOMERY WARD & COMPANY, Appellee.

No. 91-2544.

United States Court of Appeals Eighth Circuit.

Submitted March 9, 1992.

Decided June 30, 1992.

Rehearing Denied Aug. 17, 1992.

Gregg M. Corwin, Saint Louis Park, Minn., argued (Lauren Weiner Cohn, on the brief), for appellant.

Elizabeth Hoene Martin, St. Paul, Minn., argued (Elizabeth Hoene Martin, on the brief), for appellee.

Before JOHN R. GIBSON, Circuit Judge, LAY, Senior Circuit Judge, and LOKEN, Circuit Judge.

JOHN R. GIBSON, Circuit Judge.

Marilee Elliott, after holding a number of department management jobs with Montgomery Ward, was told she must either transfer to a store twenty-four miles from home at a $9,000 per year salary reduction or accept a severance package. She accepted the severance package and brought this action alleging: (1) discrimination under the age discrimination provisions of the Minnesota Human Rights Act, Minn.Stat. § 363.03 subd. 1(2)(b) and (c) (1990); (2) intentional infliction of emotional distress; (3) emotional distress under Minn.Stat. § 363.03 subd. 1(2)(b) and (c); and (4) breach of contract. The district court granted summary judgment in Ward's favor on all claims. On appeal, Elliott argues that the district court erred in granting summary judgment on her age discrimination and breach of contract claims. We affirm the district court's dismissal of the breach of contract claims, but reverse the summary judgment on the age discrimination claim and remand this claim for further consideration.

Elliott began working for Ward as a cashier in 1964. Two years later, Ward promoted her to assistant manager. Beginning in 1968, she served as department manager of several different departments in Ward's Apache Plaza store. In 1982, when she was 43, Ward gave Elliott the option of a severance package or reassignment. She chose reassignment and became group merchandiser of ten departments for approximately two years, and then over a three-year period was transferred on several occasions. She received favorable job evaluations and numerous awards from Ward based on her job performance.

In February 1987, Ward began reorganizing its Minneapolis and St. Paul operations. Elliott's district manager and store manager told Elliott that her position had been eliminated and the responsibilities divided among two younger employees, Nancy Harris, age 33, and Julie Grant, age 26. During the meeting, the district manager told Elliott that "the company was growing so rapidly that she would not be able to keep up with how fast the company was growing." Ward gave Elliott the option of involuntarily transferring to a Ward store some twenty-four miles from her home at a $9,000 salary reduction, or accepting a severance package. Ward gave Elliott two days to make a decision, and she accepted the severance package. She was 47 years old at the time of her resignation and had worked at Ward for 23 years. She brought this action in Minnesota state court under the age discrimination provision of the Minnesota Human Rights Act and also asserted claims for emotional distress and breach of an employment contract.

Ward removed the case to district court on diversity grounds, and filed a partial motion for summary judgment. The district court first considered Elliott's age discrimination claim. It analyzed Elliott's claim as a disparate treatment case and applied the analysis set forth in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973), as adopted by Schlemmer v. Farmers Union Central Exchange, 397 N.W.2d 903, 907 (Minn.Ct.App.1986). Elliott v. Montgomery Ward & Co., No. 4-89-646 slip op. at 4 (D.Minn. Nov. 27, 1990). Under that analysis, a discharged employee carries the initial burden of establishing a prima facie case of age discrimination by showing: (1) she is a member of a protected class; (2) she was qualified for the job from which she was discharged; (3) she was discharged; and (4) the employer assigned a nonmember of the protected class to do the same work. Slip op. at 5 (citing Hubbard v. United Press Int'l, 330 N.W.2d 428, 442 (Minn.1983)). Because this case involved a reduction in force, the district court applied this court's decision in Holley v. Sanyo Manufacturing, Inc., 771 F.2d 1161 (8th Cir.1985). In reduction in force cases, Holley requires an employee to also make "some additional showing" that age was a factor in the employer's decision to establish a prima facie age discrimination case. Id. at 1165.

The district court concluded that Elliott carried her initial burden of satisfying the first four elements under McDonnell Douglas. Slip op. at 5-8. See also Elliott v. Montgomery Ward & Co., No. 4-89-646, slip op. at 13 (D.Minn. May 29, 1991). Nevertheless, the court concluded that Elliott failed to produce "other evidence" of discrimination as required by Holley. Slip op. at 8-9 (Nov. 27, 1990). The court ruled that the statement Ward "was growing so rapidly [plaintiff] would not be able to keep up with how fast [the company] was growing," did not suffice as other evidence, concluding that the statement did "not directly relate to [Elliott's] age." Id. at 8. As Elliott relied on this single statement to satisfy the increased burden in a reduction in force case, the district court concluded that she failed to carry her burden of proof and granted summary judgment in favor of Ward. Id. at 9. The court also granted summary judgment for Ward on Elliott's claim of intentional infliction of emotional distress, id. at 9-11, and emotional distress under Minn.Stat. § 363.03 subd. 1(2)(b) and (c). Id. at 11.

Elliott filed a motion for reconsideration. The court denied reconsideration of the age discrimination claim, rejecting Elliott's arguments that discovery was incomplete on the date of the hearing, and that Elliott and the other two employees were not uniformly evaluated. Elliott v. Montgomery Ward & Co., No. 4-89-646, slip op. at 17-18 (D.Minn. May 29, 1991). The district court also concluded that Ward was entitled to summary judgment on Elliott's breach of contract claim because no breach occurred. Id. at 16. Elliott appeals the district court's dismissal of her age discrimination and breach of contract claims.

I.

Elliott attacks the propriety of summary judgment on the age discrimination claim by first arguing that she complied with Holley and set forth additional evidence to show that age was a factor in Ward's employment decision. ¹ In the alternative, Elliott argues that this court should modify the rule in Holley by eliminating the fifth requirement of showing that age was a factor in the employment decision. Elliott particularly relies on the Seventh Circuit's decision in Oxman v. WLS-TV, 846 F.2d 448 (7th Cir.1988), and asks that we follow Oxman. Ward responds that this court properly decided Holley and that we should adhere to it.

In Holley, this court concluded that "some additional showing" of discrimination is required to make a prima facie case in reduction in work force cases. 771 F.2d at 1165. This court later applied the additional element in cases brought under the Minnesota Human Rights Act, Kypke v. Burlington Northern R.R. Co., 928 F.2d 285, 286 (8th Cir.1991). We are bound by Kypke under principles of stare decisis. Only the court en banc could grant the relief Elliott requests.

There are at least two additional reasons why we should not embark on the path suggested by Elliott. The first is that the issue before us is one of Minnesota state law; the issue is material here only because Kypke applied our decision in Holley to claims under the Minnesota Human Rights Act. If Holley is to be reconsidered, and we are not persuaded that it should be, it should be in a case in which the federal Age Discrimination in Employment Act is an issue, not when the issue is only indirectly involved in determining a Minnesota claim. The other reason is that, as we will shortly explain, we are convinced that Elliott has complied with Holley. ²

For purposes of appeal, Ward concedes that Elliott satisfies the first three elements of a prima facie age discrimination case. ³ Ward argues, however, that Elliott failed to prove that a non-member of a protected class was assigned to do the same work because the job responsibilities for the two newly created positions changed. This argument is disingenuous. The "same work" requirement obviously refers to the newly created position. See, e.g., Johnson v. Minnesota Historical Society, 931 F.2d 1239, 1242 (8th Cir.1991) ("proof necessary will vary according to the circumstances of the case."); Leichihman v. Pickwick Int'l, 814 F.2d 1263, 1270 (8th Cir.) (when company eliminated position entirely, plaintiff may show that company had "some continuing need for his skills and services"), cert. denied, 484 U.S. 855, 108 S.Ct. 161, 98 L.Ed.2d 116 (1987).

Elliott argues that the district court erred in concluding that she failed to show that age was a factor in Ward's employment decision. Elliott points to the statement made by her manager that "the company was growing so rapidly that she would not be able to keep up with how fast the company was growing." The district court concluded that this statement "does not directly relate to plaintiff's age," and thus, concluded that Elliott failed to establish a prima facie case. Slip op. at 8-9 (Nov. 27, 1990). We conclude, however, that the statement is sufficient to establish a prima facie case. We believe that this statement is sufficiently close to the line that in the light most favorable to Elliott, and given all favorable inferences, a factfinder could reasonably conclude that this statement demonstrated that age was a factor in Ward's employment decision. We held that similar statements were sufficient to establish a disputed fact question as to whether age was a factor in an...