Healy v. New York Life Ins. Co.
| Decision Date | 07 November 1988 |
| Docket Number | No. 87-5484,87-5484 |
| Citation | 860 F.2d 1209 |
| Parties | 48 Fair Empl.Prac.Cas. 459, 48 Empl. Prac. Dec. P 38,466, 57 USLW 2359 William Joseph HEALY, Jr., Appellant, v. NEW YORK LIFE INSURANCE COMPANY, Appellee. |
| Court | U.S. Court of Appeals — Third Circuit |
Arnold S. Cohen (argued), Reba Carmel, Oxfeld, Cohen, Blunda, Friedman, LeVine & Brooks, Newark, N.J., for appellant.
Peter M. Panken (argued), Joseph C. Galardi, Parker Chapin Flattau & Klimpl, New York City, Carl Rifino, Carella, Byrne, Bain & Gilfillan, Roseland, N.J., for appellee.
Before HIGGINBOTHAM and BECKER, Circuit Judges, and SHAPIRO, District Judge *.
This is an appeal from a grant of summary judgment for the employer in an action brought under the Age Discrimination in Employment Act, 29 U.S.C. Secs. 621-634 (1982). The case was brought by William Healy, a former Vice President of New York Life Insurance Company ("the Company"), following his discharge as part of a company-wide reduction in force ("RIF"), which consolidated high-level management positions in response to competitive pressures. It is clear from the record that Healy established a prima facie case. It is also clear that the Company articulated legitimate business reasons for assigning Healy's duties to a somewhat younger man who, the company claims, had demonstrated greater ability than Healy to assume high level managerial responsibility.
The difficult issue in the case is whether Healy demonstrated that a genuine issue of material fact existed concerning the Company's asserted non-discriminatory reasons for Healy's discharge. More specifically, we must determine whether the district court correctly decided that the legitimate business reasons articulated by the Company did not serve as a pretext to mask age discrimination. Our review is plenary. The question is a close one. However, we conclude that Healy did not meet his evidentiary burden of demonstrating a genuine issue of material fact as to pretext. We therefore will affirm the district court's grant of summary judgment in favor of the Company.
Healy was fifty-six years old when the Company discharged him after twenty-five years of service. His tenure with the Company began in 1963 when he was hired as an agent. Healy was promoted several times, eventually becoming a Vice President of the Company's Marketing Department in 1979, responsible, inter alia, for the Company's internal communications. Because his performance with the Company after 1979 forms the factual matrix for the summary judgment ruling, we recite in some detail the relevant facts of record, developed through depositions, affidavits, and company documents (particularly performance evaluations).
At the time of Healy's 1979 promotion, the Marketing Department was composed of two divisions, agent training and management training. The agent training division taught agents to sell the Company's insurance and financial products. To be successful, sales agents had to learn consumer psychology and technical matters such as the tax advantages of various products. Managers recruited and motivated the agents. The training of managers focused on personnel development, planning and organizing skills, managing expenses and achieving profitability, and the recruiting of new agents.
Prior to the reduction in force, several management levels supervised agent and management training. These levels included Assistants and Associates who reported to Managers, Managers who reported to Assistant Vice Presidents, and Assistant Vice Presidents who reported to the Vice President in charge of the division. During Healy's tenure as Management Vice President in charge of the Management Training division, another Vice-President, Ed Hesse, was responsible for agent training. Marketing Vice President Walter Ubl supervised both positions, and he, in turn, reported directly to the head of the Marketing Department, Senior Vice President Jerald Hinrichs.
This rough organizational scheme demonstrates that the Vice Presidents for both the agent and management training jobs were high-level executive positions possessing substantial management authority. Successful performance in these jobs required a resourceful executive willing to take initiative and to assume responsibility. At the time of his discharge, Healy managed a budget of close to $2,000,000 and directly supervised three Assistant Vice Presidents who were responsible for other Managers and Associates.
During the years immediately following his 1979 promotion, Healy received generally favorable evaluations. However, these evaluations also evidenced deficiencies in high-level executive performance. In a November, 1983, evaluation, Healy's immediate supervisor, Vice President Walter Ubl, reported that Healy App. at 50. But this same evaluation also noted that Healy became "so involved in [one] program that other ongoing programs cause him concern." Nevertheless, Healy received the highest rating possible in this 1983 evaluation and subsequently was promoted to Marketing Vice President in charge of management training in June, 1984.
Although Healy earned favorable reviews in this new position, his evaluations revealed significant shortcomings. In a March, 1985, review, Healy's immediate superior (who is no longer with the Company) wrote that Healy Id. at 65. But like the earlier evaluation, the reviewer echoed the concern that Healy "must delegate more of the work-load and spend more time in staff development." Id.
In August, 1985, Healy was assigned responsibility for preparing the Management by Objectives ("MBO") report for the entire Marketing Department. MBO is a management theory which posits that managers will be more effective if they can analyze what they must accomplish and develop measurable standards to determine if the desired objectives have been obtained in key result areas. The MBO was outside Healy's normal manager training duties and required him to focus on the work performed by the Marketing Department as a whole.
Since the MBO project implicated the interests of the entire Marketing Department Healy worked closely with his superiors, Hinrichs and Ubl. The affidavits of both Hinrichs and Ubl represent that Healy's coordination of the MBO program was unsatisfactory, and that his performance lacked creativity and initiative. According to the affiants, rather than exercising the insight and innovation that the project required, Healy merely collated and collected information from others. Hinrichs and Ubl state that Healy's poor performance created delays and resulted in additional work for both of them.
Reacting to this criticism, Healy testified that he thought that his function in the MBO project was to incorporate the same measurements that had been used previously, assemble the raw data, and pass the information on to his superiors rather than analyze the results himself. Healy further claimed that the MBO report was not assigned exclusively to him, that he never was informed that his performance was unsatisfactory, and that, in any case, he spent less than 10 percent of his time preparing the report.
Four months later, in December of 1985, the Company decided to reduce the total salary expenses of management personnel by 20 percent to remain competitive in an increasingly demanding business environment. As a result, the Company offered employees who were 55 years or older attractive early retirement packages. Departments that had not reduced managerial staff by 20 percent faced involuntary terminations. The Marketing Department was unable to reduce its total salaries by the requisite 20 percent, despite the early retirement of Ed Hesse, the Vice President in charge of agent training.
On February 25, 1986, Hinrichs informed Healy that he was being discharged. The Company also discharged seven other members of the Marketing Department at the same time. Hinrichs represented that Healy was discharged because he
could neither effectively supervise a combined [manager and agent] training division nor effectively handle the substantial increase in responsibility that would have been required had he been retained. I found that the plaintiff, rather than taking it upon himself to broaden his responsibilities, would instead try to narrow the scope of his functions. He appeared reluctant to assume expanded responsibilities and encountered problems when faced with coordinating a substantial number of on-going programs. Moreover, he was not good at identifying important future problems or objectives and deciding how to meet them. He also tended to focus only on his own area of responsibility.
Id. at 141-42. Hinrichs further states that his decision also reflected Healy's inadequate performance on the MBO program.
Following Healy's discharge and the voluntary retirement of the Vice President for agent training, Hinrichs initially decided to reallocate the responsibilities of these two positions among the Assistant Vice Presidents. He decided to leave the Vice President positions vacant and to determine later whether to create a consolidated position, combining the functions of both jobs. Most of Healy's responsibilities were assumed by Paul Russell, age 47, with the exception of the MBO program, which was assigned to another Vice President, Richard Carter, age 55. At the time of Healy's discharge, Russell had been with the company 22 years, most recently serving as one of Healy's three Assistant Vice Presidents.
Hinrichs and Ubl both testified that Russell's performance during the period following Healy's...
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