Hartley v. Wisconsin Bell, Inc.

• Decision Date: 05 September 1997
• Docket Number: No. 96-2607,96-2607
• Parties: 75 Fair Empl.Prac.Cas. (BNA) 701, 71 Empl. Prac. Dec. P 44,990 Carole M. HARTLEY, Plaintiff-Appellant, v. WISCONSIN BELL, INCORPORATED, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 887

124 F.3d 887

75 Fair Empl.Prac.Cas. (BNA) 701,

71 Empl. Prac. Dec. P 44,990

Carole M. HARTLEY, Plaintiff-Appellant, v. WISCONSIN BELL, INCORPORATED, Defendant-Appellee.

No. 96-2607.

United States Court of Appeals, Seventh Circuit.

Argued May 21, 1997.

Decided Sept. 5, 1997.

E. Campion Kersten (argued), Kersten & McKinnon, Milwaukee, WI, for Plaintiff-Appellant.

Deborah Gage Haude, William G. Miossi, Winston & Strawn, Chicago, IL, Bernard J. Bobber, Foley & Lardner, Milwaukee, WI, Stephen J. Liccione (argued), Wisconsin Bell Inc., Milwaukee, WI, for Defendant-Appellee.

Before POSNER, Chief Judge, and BAUER and MANION, Circuit Judges.

MANION, Circuit Judge.

Carole Hartley was 51 years old when she lost her job as a middle manager at Wisconsin Bell after the phone company underwent a major organizational restructuring. She sued under the Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq., claiming that Bell fired her and retained two other managers, who were no more than seven years younger than she, on account of her age. The district court granted summary judgment to Bell after determining that Hartley did not successfully challenge Bell's facially nondiscriminatory reasons for firing her. We affirm.

I.

Carole Hartley worked at Wisconsin Bell, a wholly-owned subsidiary of Ameritech Corporation, for about 23 years before the phone company determined it needed to restructure. Wisconsin Bell had been a subsidiary of Ameritech since the AT & T divestiture in 1984, but in 1993 Ameritech decided to consolidate its phone companies operating in different states into a single company under the Ameritech name. It called the reorganization "Breakthrough," which entailed combining all of its telecommunications business into 12 new business units that operated on an interstate basis. As Wisconsin Bell explains it, Breakthrough "described the process of transforming the company and its culture from a staid, technologically stable, monopoly-based environment to a highly competitive, technologically changing, customer-oriented, market-driven environment." With the new business units came new titles and new responsibilities for managers, who basically had to apply to be rehired by the company.

Before Breakthrough, Hartley was a manager of Remittance Operations in the Billing Services Department at Bell. She supervised about 15 employees who were responsible for collecting phone bills. There were two other people who also had managerial responsibilities in the same department: Linda Matthews and Judy Murray. Though Hartley argues that Murray was not a real "line" manager, and instead held a "staff" job providing support services, she did not contest the company's proposed finding in the district court that Murray and Matthews were managers just like her. In any event, the important point is that Murray, Matthews, and Hartley held similar positions and the company determined that only two such managers would be needed in its post-Breakthrough existence. All three were competing for jobs as managers in Network Services essentially doing the same work they had done for Bell, though with significantly less staff support. Brenda Theus, the decisionmaker and the supervisor of all three managers, chose Murray and Matthews. Hartley claims the decision was made on the basis of her age. At the time of her termination, she was 51, six years older than Murray (45) and seven years older than Matthews (44).

There are two ways a plaintiff like Hartley claiming employment discrimination can overcome an employer's motion for summary judgment. The first is by putting in enough evidence (whether direct or circumstantial) to raise a genuine issue concerning the employer's motivation in carrying out the challenged employment action. See, e.g., Troupe v. May Dep't Stores Co., 20 F.3d 734, 736 (7th Cir.1994). The second is the so-called McDonnell Douglas method, the frequently used burden-shifting framework first set out in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802-03, 93 S.Ct. 1817, 1824-25, 36 L.Ed.2d 668 (1973).

The district court approached this case by using the McDonnell Douglas method, and the parties appear to agree that this is the approach we should use. Using the burden-shifting approach in a typical ADEA case makes sense, though the Supreme Court never actually has held that the McDonnell Douglas scheme applies in the ADEA context. See O'Connor v. Consolidated Coin Caterers Corp., 517 U.S. 878, ----, 116 S.Ct. 1307, 1310, 134 L.Ed.2d 433 (1996). Defining the prima facie case is more difficult in the unusual circumstances at play here, where an employer partially reduces its workforce but does so after letting the employees compete (actually, re-apply) for positions within the restructured company. This is not a pure reduction in force case, at least not like the type encountered in Testerman v. EDS Technical Products Corp., 98 F.3d 297, 299 (1996), where the employer pretty much determined that five employees were to be fired to save costs and the only remaining question was who. Nor is it like Weisbrot v. Medical College of Wisconsin, 79 F.3d 677, 679 (7th Cir.1996), where the college lost its funding for a medical research program and was forced to fire the program's research technician. Those cases involved reductions in workforces on a small scale and resulted from no fundamental change in the way the employer did business.

In this case, Bell's workforce reduction resulted from a massive restructuring; in essence, no one's job was safe and nearly every manager had to reapply for positions within the new company. Not every manager was placed. By August 1993, just six months after announcing Breakthrough, Ameritech notified its employees that it was eliminating 1,200 to 1,500 management positions in the five state area (including Wisconsin) it serviced. The managers were told that some of them would be asked to leave the same day they were notified they had not been selected as managers in the new business units. And even some managers placed within the new units later were fired. Ironically, that happened to Brenda Theus, the supervisor who chose Murray and Matthews over Hartley. It also happened to Murray.

The McDonnell Douglas approach is not an efficient formula for such a large-scale workplace restructuring case. As we noted in Sheehan v. Daily Racing Form Inc., 104 F.3d 940, 943 (7th Cir.1997), "[t]he assumption behind the approach in a case of termination is that the plaintiff was doing fine in his job, lost it, and was replaced by someone younger, or white, or male, or not handicapped, etc." Applying that approach here is somewhat problematic; it ignores the circumstances surrounding Hartley's termination and it presumes that she was singled out for termination. In fact, everyone's job--not just Hartley's--was in jeopardy, and no one has suggested that the reason for the restructuring itself was discriminatory. See id. ("there is no suggestion that the defendant decided to computerize its operations in order to get rid of its older workers, or for any other reason unrelated to bona fide business considerations"). Nevertheless, because parties and courts are comfortable approaching discrimination cases from the McDonnell Douglas framework, "[p]erhaps the way to preserve it here is to recast this case as a hiring case." Id. Hartley claims that she should have been re-hired as one of the managers in Network Services, or at least as one of the 45 managers in Consumer Services. Bell responds by saying that she applied for these jobs too late, and that she was not as qualified for them as the candidates selected. Framed in this more familiar way, we can more easily apply the traditional McDonnell Douglas approach to Hartley's age discrimination claim to determine if the district court properly put an end to it when it did.

Under the McDonnell Douglas framework, Hartley's initial burden was to show (1) she was in the protected age group of 40 or older; (2) she was performing her job satisfactorily or was qualified for the job for which she applied; (3) she was discharged, not hired, not promoted, etc.; and (4) younger employees were treated more favorably. Taylor v. Canteen Corp., 69 F.3d 773, 779 (7th Cir.1995). The district court paused only with respect to the fourth element, which we discuss below. But for now we assume (as Bell appears to do on appeal) that Hartley has met her prima facie case by showing that she was 51 years old at the time of her termination, she was performing her job satisfactorily and was qualified at least to be considered for a managerial position in Network Services, by not being hired for the position she effectively was terminated, and younger employees (Murray and Matthews) received managerial positions in the restructured company while Hartley did not.

II.

Under McDonnell Douglas, the burden of production now shifts to Bell to set forth nondiscriminatory reasons for Hartley's termination. Bell tells us there are four of them: (1) Hartley's position was eliminated by Breakthrough; (2) she delayed in submitting her "preference slips" used in selecting employees in the new business units; (3) there were over 45 incumbents in the Consumer Services area competing for 45 open managerial positions, incumbents received priority for these positions, and she was not an incumbent; and (4) she lacked the "broader experience" possessed by Murray and Matthews. Once Bell met its burden of production, Hartley could defeat the company's motion for summary judgment by demonstrating that its reasons are not true, or pretextual. Plaintiffs lose if the company honestly believed in the nondiscriminatory reasons it offered, even if the reasons are foolish or trivial or even baseless. McCoy v. WGN Continental Broadcasting Co., 957 F.2d 368, 373 (7th Cir.1992).

Hartley was not successful in calling any of these four reasons into question in the district court, largely...