Gelof v. Papineau

• Decision Date: 26 November 1986
• Docket Number: Civ. A. No. 83-210 CMW.
• Parties: Helen GELOF, Plaintiff, v. Louis PAPINEAU, in his capacity as Director of the Delaware Development Office, Defendant.
• Court: U.S. District Court — District of Delaware

648 F. Supp. 912

Helen GELOF, Plaintiff, v. Louis PAPINEAU, in his capacity as Director of the Delaware Development Office, Defendant.

Civ. A. No. 83-210 CMW.

United States District Court, D. Delaware.

November 26, 1986.

COPYRIGHT MATERIAL OMITTED

Roy S. Shiels, of Brown, Shiels & Chasanov, Dover, Del., for plaintiff.

Michael F. Foster and Regina M. Mullen, Deputy Attys. Gen., Dept. of Justice, Wilmington, Del., for defendant.

CALEB M. WRIGHT, Senior District Judge.

I. FACTS

In November 1980, shortly after his reelection victory, Delaware Governor Pierre S. du Pont, IV, huddled with his crack political strategists. The purpose of the meeting: to chart a new course for Delaware by creating an omnibus agency that would attract private industry to the State.

The birth of this novel organization, The Delaware Development Office ("DDO"), came amidst intensifying state competition for industrial capital. To steel Delaware for the contest, Governor du Pont drafted one of his closest advisors to play point man for the reorganization: Nathan Hayward, III.¹

Hayward, now Senior Vice-President of the Wilmington Trust Company, is a man intensely optimistic about Delaware's ability to compete. Hayward believes that providing "the support and aid" and "the variety of things that private business relies on, is something that Delaware can do better than many of the other states that it competes with, because we can ... tell ... an interested company: `Yes, you build your plant on that location and we will guarantee that we will have the road widened for you. We will have sewer capacity enough to take care of your industrial needs.'"²

While the reorganization of state government excited some, it worried others, notably Delaware's civil servants. The dislocations Delaware's reorganization caused are the subject of this litigation.

Before being tapped to organize the DDO, Hayward was the Director of Delaware's Office of Management, Budget and Planning ("OMBP"). Known as the Governor's "think tank", this office of forty-five employees, prior to 1980, provided the Governor with economic and statistical reports to help him prepare the yearly budget.³ When the DDO was created, through legislative enactment in 1981, all positions above a certain paygrade at OMBP were abolished and others were transferred to different agencies.⁴ After the transfers, the job slots of eight professionals at OMBP were abolished.⁵

Plaintiff, Helen Gelof, was the only one of the eight professionals who did not find a job after the reorganization.⁶ She charges defendant, Nathan Hayward, III, with age discrimination for failing to hire her at the new DDO. At all times relevant to this action, defendant Hayward acted as the Director of the DDO.

Helen Gelof became a permanent employee of the State of Delaware on December 16, 1974.⁷ Ms. Gelof advanced through the ranks of Delaware's OMBP to become a "Principal Planner" and author of several statistical studies.⁸ She worked in state government continuously until her termination on January 31, 1982.⁹

Gelof first received word that there would be changes in state government in early 1981 while reorganization legislation was under consideration.¹⁰ But Hayward subsequently met with the OMBP staff and promised them that none of them would lose employment due to reorganization efforts.¹¹

Gelof was notified of her own termination in October 1981, at a meeting with Hayward and his assistant, Grover Biddle.¹² Hayward advised Gelof that after the reorganization he could no longer afford to pay her.¹³ Hayward conceded budget was a primary factor in his determination as to which employees would be retained by DDO.¹⁴

Immediately following the October 1981 meeting, Gelof asked to be demoted and transferred to a position with the State Budget Office ("Budget").¹⁵ Gelof sought this downgrade because it would protect her under the State's merit system.¹⁶ Hayward had allowed another Planner to effectuate a similar transfer. For this Planner, Hayward executed the requisite state personnel form; he did not sign a personnel form for Gelof.¹⁷

Hayward claimed to lack authority to sign the transfer forms. But the State employment rules specifically provide for voluntary demotion under these circumstances, if approved by the appointing authority.¹⁸ The position requested by Gelof at Budget remained vacant until at least July 1, 1983.¹⁹ Hayward never informed the head of the Budget Office that Gelof wanted to transfer to Budget.²⁰ Defendant Hayward, and his assistant Grover Biddle, eventually placed six of the eight persons whose slots were abolished in state employment; a seventh secured private sector work.²¹

Eight professionals, including Gelof, were temporarily placed in the Delaware Development Office as "exempt" employees who could be terminated without regard to the Merit System.²² These eight were subsequently terminated. Of these, five were over fifty years of age.²³ The average age of the eight dismissed employees was fifty. The average age of professional employees remaining at DDO after November 1, 1981 was 36.4.²⁴

The work performed by DDO's new Data and Information Section was 75 to 80% statistical research and analysis — work done at the old OMBP.²⁵ The new Director for Data and Information, chosen by Hayward, was Gelof's subordinate at OMBP: Douglas Clendaniel, age 32.²⁶ Work previously handled by Gelof was performed by Clendaniel: budget functions, projections for the Delaware Data Center Program; and census bureau functions (producing population estimates for roads, sewers, etc.). Clendaniel received all his relevant experience under Gelof's training and supervision.²⁷

Subsequent to her termination, Helen Gelof inquired into or made applications for thirty-six positions in state government.²⁸ She was offered only one position comparable to her prior position, which was changed from merit (protected from termination at will) to exempt when it was offered by the Department of Labor in late 1983.²⁹ The other positions were all below Gelof's former pay grade and income at OMBP. When terminated, Gelof earned $36,291.00 per year.³⁰ Other positions offered Gelof were for pay at the level of $20,000 per year — 55% of her previous salary. None offered merit protection.³¹

Gelof began work in a family business in early 1983 earning $15,000 annually.³² She continued, however, looking for state and private employment. At the time of her termination, Gelof's pension had not yet vested.³³

II. DISCUSSION

Plaintiff Gelof brought suit under 29 U.S.C. § 626(c) which authorizes civil suits by persons alleging dismissal or other grievances within the ambit of the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. §§ 621-634. Gelof alleges that her employer, Nathan Hayward, dismissed her from OMBP and refused to hire her at DDO because of his policy of replacing senior employees with younger workers.

Plaintiff seeks relief in the form of reinstatement with back pay and other benefits, or, in the alternative, damages in the amount of future lost wages.

This Court held a non-jury trial on May 19 and 20, 1986.

A. The Burden of Proof.

The ADEA proscribes discrimination against any individual between ages forty and seventy with respect to "compensation, terms, conditions, or privileges of employment, because of such individual's age." 29 U.S.C. § 623(a); see id. § 631(a). To recover, "a plaintiff must prove by a preponderance of the evidence that age was a determinative factor in the employer's decision." Dreyer v. Arco Chemical Co., 801 F.2d 651, 653 (3d Cir., 1986).

The ADEA's remedial purpose closely resembles the statutory scheme developed by Congress to remedy discrimination based on race, color, religion, sex or national origin.³⁴ Federal courts, therefore, broadly endorse the application to ADEA cases of the "shifting burden" analysis developed in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973), in the context of racial discrimination under Title VII of the 1964 Civil Rights Act. See Grant v. Gannett Co., Inc., 538 F.Supp. 686, 688 n. 2 (D.Del.1982), aff'd. without opp., Grant v. News-Journal Co., 696 F.2d 982 (3d Cir.1982), (and cases cited therein). The Third Circuit adopts the McDonnell Douglas standard, as elaborated in subsequent Supreme Court cases, and applies it to ADEA cases. Id. at 688 n. 5.

The standard allocates the shifting burden of proof in the following three step fashion: (1) the plaintiff bears the burden of first establishing a prima facie case of unlawful discrimination; (2) if the plaintiff succeeds in making out the prima facie case, then the burden shifts to the defendant to articulate some legitimate, nondiscriminatory reason for the employer's rejections; and (3) if the employer articulates such a reason, the burden of production then shifts back to the plaintiff who must establish either that the employer's proffered reason is a pretext or that the employer's decision was more likely motivated by some discriminatory reason. See Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 256, 101 S.Ct. 1089, 1095, 67 L.Ed.2d 207 (1981); Duffy v. Wheeling Pittsburgh Steel Corp., 738 F.2d 1393, 1395 (3d Cir.), cert. denied, Wheeling Pittsburgh Steel Co. v. Duffy, 469 U.S. 1087, 105 S.Ct. 592, 83 L.Ed.2d 702 (1984).

Plaintiff's burden of showing pretext merges at the final stage with the ultimate burden of persuading the Court that the employee has been the victim of intentional discrimination. The employee may succeed in this either directly by persuading the Court that a discriminatory reason more likely motivated the employer or indirectly by showing that the employer's proffered explanation is unworthy of credence. Berndt v. Kaiser Aluminum & Chemical Sales, Inc., 789 F.2d 253, 256 n. 2 (3d Cir.1986) (citations omitted).

B. The Prima Facie Case.

The McDonnell Douglas approach suggests that plaintiff has the initial burden of...