Elza v. Koch Industries, Inc.
| Decision Date | 12 August 1998 |
| Docket Number | No. 96-1351-JTM.,96-1351-JTM. |
| Citation | 16 F.Supp.2d 1334 |
| Parties | Joyce ELZA, Plaintiff, v. KOCH INDUSTRIES, INC., Defendant. |
| Court | U.S. District Court — District of Kansas |
Marc P. Clements, Stephanie N. Scheck, Morrison & Hecker L.L.P., Wichita, KS, Alan L. Rupe, Husch & Eppenberger, Wichita, KS, for Plaintiff.
Mikel L. Stout, Foulston & Siefkin L.L.P., Wichita, KS, Mark V. Holden, Wade Warthen, Koch Industries, Inc., Wichita, KS, for Defendant.
Joyce Elza sued Koch Industries, Inc., alleging she was discharged in violation of the Age Discrimination in Employment Act (ADEA), 28 U.S.C. § 621, et seq., and the Kansas Age Discrimination in Employment Act, (KADEA), K.S.A. 44-1111, et seq. Elza also brought related state express and implied contract and tort claims against Koch. Koch moves for summary judgment on all claims.
In response, plaintiff abandoned her express contract claim and her tort claims. Accordingly, Koch is granted summary judgment on those claims. Koch's motion is denied in all other respects for the reasons that follow.
Summary judgment is appropriate if the pleadings, depositions, answers to interrogatories and admissions on file, together with affidavits, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). The initial burden is on the moving party to show that there is an absence of evidence to support the nonmoving party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).
Once the initial showing has been made, the burden shifts to the non-moving party to designate specific facts showing there is a genuine issue for trial. Celotex, 477 U.S. at 324, 106 S.Ct. 2548. A party may not rely on the allegations of its pleadings but must establish the existence of a genuine issue of material fact through admissible evidence. Panis v. Mission Hills Bank, N.A., 60 F.3d 1486, 1490 (10th Cir.1995), cert. denied, 516 U.S. 1160, 116 S.Ct. 1045, 134 L.Ed.2d 192 (1996). When determining whether there is a material issue of fact, the nonmoving party's evidence is to be believed; all justifiable inferences are to be drawn in its favor; and its nonconclusory version of any disputed issue of fact is assumed to be correct. Multistate Legal Studies, Inc. v. Harcourt Brace Publ., Inc., 63 F.3d 1540, 1545 (10th Cir. 1995), cert. denied, 516 U.S. 1044, 116 S.Ct. 702, 133 L.Ed.2d 659 (1996).
The following factual scenario is based on the relevant factual allegations of the parties, where undisputed or supported by appropriate citations to admissible evidence and with all reasonable inferences drawn in Elza's favor.1
Elza was born on September 4, 1946. In June 1973, Koch hired Elza as a clerk in the company's mail room. In 1974, Elza became a senior mail clerk. In 1979 she was promoted to the mail room supervisor position.
In 1987, Elza was counseled regarding how she managed her subordinates. In 1991, several complaints arose about the management of the mail room: (1) lack of a clear chain of command; (2) unwillingness to accept complaints and provide feedback; and (3) lack of defined responsibilities for senior clerks. On June 13, 1994, Elza received a formal written reprimand after a mail bag was stolen because a mail room employee failed to follow proper procedures. A May 15, 1995 evaluation of Elza by her supervisor Ray Rys expressed concern about: (1) her ability to engage in critical and independent thinking; (2) her knowledge of technology, MBM, and economic principles; (3) her confidence; (4) her initiative; (5) her ability to work with her peers; (6) her ability to establish long-term goals; and (7) her communications skills. However, the evaluation concluded:
While there are many performance and developmental areas in which improvement is needed, [Elza] has continued to manage the organization in a relatively efficient and cost-effective manner for which a 2.0% increase would be warranted.
Based on Rys's evaluation, Ray Keith, Rys's supervisor, expressed to Lynn Markel, his supervisor, concern about whether Elza should continue in a supervisory role or be discharged. Markel counseled against termination and suggested Elza should be given some well-defined improvement projects and relieved of her supervisory responsibilities. However, Keith and Markel approved Elza's merit increase and she continued in her role as a supervisor. The payroll change form indicated Elza's date of birth. There is no evidence Keith counseled either Rys or Elza regarding Elza's performance. Elza was never assigned any improvement projects.
Also on May 15, 1995, a former Koch employee filed a formal complaint alleging Elza had sexually harassed her. The former employee and Koch had been informally negotiating for some time. Elza learned of the complaint and retained her present counsel to represent her in the sexual harassment case. Elza, through counsel, advised Koch that she might pursue a defamation claim against the former employee.
In June 1995, Rys was replaced by Theodore Albright as Elza's supervisor. Shortly afterward Rys was terminated. The record is unclear as to whether Albright assumed all of Rys's other responsibilities. At some point, Elza was relieved of her supervisory responsibilities during the investigation of the employee's allegations of harassment. Elza testified she was not told she was being relieved of her supervisory responsibilities for performance-related reasons. Albright assumed Elza's supervisory responsibilities. Albright is significantly younger than Rys and Elza. Elza was later moved into a technical consultant position.2 Koch began to seriously consider outsourcing the mail room, but ultimately decided not to do so. Elza stated in her affidavit that she was performing satisfactory work when she was relieved of her supervisory duties.
Elza testified that Albright told her that if she would get out and act like a 19- or 20-year old instead of sitting in her office, things would probably go smoother. She testified that more than once, Albright told her that there were people in the mail room who were older and could be replaced for less money than what they were being paid. Elza further testified that on one occasion, Albright told her she was in the age bracket where it would be harder for Koch to let her go than it would be for Koch to terminate a younger employee.
In December 1995, a settlement agreement was reached between Koch and the former employee in which the former employee agreed not to discuss the case and not to make any disparaging remarks about Elza and acknowledged that she may have misinterpreted Elza's actions. In exchange for the former employee's promises, Elza released any defamation or similar cause of action against the former employee.
Elza, through counsel, requested a letter detailing her employment history with Koch and indicating she was an excellent choice for future employment. Koch refused, but provided Elza with a letter indicating that no evidence had been found to substantiate the sexual harassment charges.
Koch decided not to outsource the mail room and decided to transfer Albright to Koch Chemical. Albright told Elza she would resume her supervisory responsibilities at least on an interim basis. However, on February 1, 1996, during a meeting with Albright, Ray Keith, Albright's supervisor, told Elza there was no place for her in the mail room. An employee older than Elza assumed some of her non-supervisory responsibilities on an interim basis and Albright continued to perform Elza's supervisory responsibilities. Koch placed an advertisement for a mail room manager and Craig Highfill was hired to fill the position. Albright was transferred. Highfill is younger than Elza. Highfill eventually assumed some of Albright's non-mail room responsibilities as well. Elza was kept on Koch's payroll for several months with no responsibilities, then discharged.
Keith was involved in the discharge of three supervisors over forty years of age within a two-year time frame — Rys, Elza and another supervisor.3 Rys and Elza were replaced with younger employees. The record does not indicate the age of the replacement for the third supervisor. Some of Koch's internal employee forms and lists indicate the employees' dates of birth.
Elza did not have a written contract of employment with Koch. She was free to leave her job at any time. Elza testified that she had no intention of leaving her employment when she was terminated and planned to work at Koch until she retired.
Elza testified that at company meetings her superiors told the employees that as long as they followed Koch's mission, philosophies and principles, their jobs would be secure and they would be treated with integrity. If a problem arose, employees would be given warnings and worked with by the supervisors before termination would be considered. Elza could not recall which of her supervisors made the statements.
Koch uses a management philosophy called Market-Based Management (MBM). Elza testified that at MBM training meetings, the instructors told her and other employees that as long as she followed Koch's mission, philosophy and principles as given to her by Bill Hanna and Charles Koch, she would have job security and would not be terminated. Elza could not specifically recall which instructors told her this, but did recall that Lynn Markel, an executive vice-president, was an instructor. Markel's deposition testimony, when read in the light most favorable to Elza, is consistent with Koch having a policy of normally not terminating employees who followed Koch's mission, philosophy and principles. Elza attended at least 8 MBM training sessions.
Elza testified that at the MBM training session, she was told that when a problem developed with an employee, the initial...
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