Hebert v. Mohawk Rubber Co.

• Citation: 872 F.2d 1104
• Decision Date: 11 January 1989
• Docket Number: No. 88-1743,88-1743
• Parties: 49 Fair Empl.Prac.Cas. 1051, 49 Empl. Prac. Dec. P 38,932, 57 USLW 2691 Andrew P. HEBERT, Plaintiff, Appellant, v. The MOHAWK RUBBER COMPANY, Defendant, Appellee. . Heard
• Court: United States Courts of Appeals. United States Court of Appeals (1st Circuit)

Page 1104

872 F.2d 1104

49 Fair Empl.Prac.Cas. 1051,

49 Empl. Prac. Dec. P 38,932, 57 USLW 2691

Andrew P. HEBERT, Plaintiff, Appellant, v. The MOHAWK RUBBER COMPANY, Defendant, Appellee.

No. 88-1743.

United States Court of Appeals First Circuit.

Heard Jan. 11, 1989.

Decided April 24, 1989.

Stuart DeBard with whom Weston, Patrick, Willard & Redding, Boston, Mass., was on brief for plaintiff, appellant.

Keith L. Pryatel, South Russell, Ohio, with whom John E. Holcomb, Akron, Ohio, Millisor & Nobil, Richard P. Ward and Ropes & Gray, Boston, Mass., were on brief for defendant, appellee.

Before COFFIN and BREYER, Circuit Judges, and PETTINE, ^* Senior District Judge.

PETTINE, Senior District Judge.

Plaintiff-appellant, Andrew P. Hebert, appeals from a grant of summary judgment to defendant-appellee, The Mohawk Rubber Company ("Mohawk"), in an age discrimination action brought under the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. sec. 621 et seq. In finding for the defendant and against plaintiff on his cross-motion for summary judgment, the United States District Court for the District of Massachusetts determined not only that Hebert had failed to establish a prima facie case of age discrimination because he voluntarily retired, but also that Hebert had failed to demonstrate that the non-discriminatory reasons articulated by defendant for its decision to approach Hebert with an offer of early retirement, among them a company-wide reorganization designed to reverse the company's slide into unprofitability, were pretexts for age discrimination. On the surface, then, this case has a familiar ring to it: this

Court has seen before senior executives who, faced with a general reduction in force, voluntarily elect early retirement, only to come, with the passage of time, to view their election as a choice forced upon them by an employer determined to rid itself of its older employees. See, e.g., Schuler v. Polaroid Corp., 848 F.2d 276 (1st Cir.1988); Holt v. Gamewell Corp., 797 F.2d 36 (1st Cir.1986). In this particular case, however, our review of the proffered evidence and relevant case law leads us to conclude that: (1) Hebert was indeed the victim of a "forced choice" retirement and (2) Hebert has cast sufficient doubt on the company's alleged non-discriminatory reasons for forcing his retirement to raise a genuine issue as to Mohawk's discriminatory intent. Accordingly, we reverse.

STANDARD OF REVIEW

This Court has recently rehearsed the standard to be applied when reviewing the correctness of a grant of summary judgment:

The root issue in any summary judgment review is whether the provisions of Federal Rule of Civil Procedure 56(c) have been met: Do "the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law"? ... To demonstrate that no genuine issue of material fact exists, the moving party must point out "an absence of evidence supporting the nonmoving party's case." Celotex Corp. v. Catrett, , 106 S.Ct. 2548, 2554, (1986). In reviewing the trial court's grant of summary judgment, we must view the record in the light most favorable to the party opposing the motion, and must indulge all inferences favorable to that party. The party opposing the motion, however, may not rest upon mere allegations; it must set forth specific facts demonstrating that there is a genuine issue for trial.

Oliver v. Digital Equipment Corp., 846 F.2d 103, 105 (1st Cir.1988) (citing Metropolitan Life Insurance Co. v. Ditmore, 729 F.2d 1, 4 (1st Cir.1984); King v. Williams Industries, Inc., 724 F.2d 240, 241 (1st Cir.1984), cert. denied, 466 U.S. 980, 104 S.Ct. 2363, 80 L.Ed.2d 835 (1986); Daury v. Smith, 842 F.2d 9, 11 (1st Cir.1988)). See also, Menard v. First Security Services Corp., 848 F.2d 281, 284-85 (1st Cir.1988) (applying standard enunciated in Oliver to age discrimination case brought under the ADEA).

Additionally, we have even more recently explained that, in determining whether a case is so one-sided that one party must prevail as a matter of law, this Court is to consider "not whether there is literally no evidence favoring the non-movant, but whether there is any upon which a jury could properly proceed to find a verdict in that party's favor." De Arteaga v. Pall Ultrafine Filtration Corp., 862 F.2d 940, 941 (1st Cir.1988). See also, Anderson v. Liberty Lobby, Inc. 477 U.S. 242, 249-52, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986); Perez de la Cruz v. Crowley Towing & Transp. Co., 807 F.2d 1084, 1086 (1st Cir.1986), cert. denied, 481 U.S. 1050, 107 S.Ct. 2182, 95 L.Ed.2d 838 (1987).

Accordingly, we undertake to review the District Court's grant of summary judgment by viewing the record in the light most favorable to Hebert and indulging all inferences favorable to him.

THE FACTS

The record in this case reveals that some of the central facts are essentially undisputed. In January 1969, at the age of forty-three, Hebert was hired from a field of fifty applicants to serve as the controller of Beebe Rubber Company ("Beebe"), a subsidiary of Mohawk purchased in December 1968. As controller, Hebert was responsible for all accounting and processing of financial data, including the preparation of financial statements, budgets and reports concerning taxes, insurance and pensions. In his capacity as chief accounting officer of the company, Hebert oversaw a staff of ten to thirteen people and was From the time of its purchase by Mohawk until the late 1970s, Beebe was remarkably profitable, posting annual increases in profits as a percentage of net sales from 1969 through 1978. After that period, however, and correlating with a series of changes in the company's leadership, Beebe's profits began to decline and by 1982 had plunged below the break-even point. Finally, in October 1983, Mohawk sent two people, Teri Lynch and Jody Feldman, from its home accounting department in Akron, Ohio, to try to pinpoint Beebe's problems. In a detailed report of their inspection, Lynch and Feldman identified "variances" ¹ in material and labor costs as a major cause of Beebe's eroding profitability and specifically noted that the Beebe accounting department, under Hebert, could do more to address this problem:

eventually appointed a vice president of the division of Mohawk of which Beebe was a part. By 1984, the year he left the company, Hebert was earning an annual salary of $42,000, exclusive of bonuses.

ACCOUNTING PERSONNEL

RECOMMENDATIONS

(I). Currently there is a lack of direction in this area. Financial reports are generated but cause no action. The cost accountant should be working through the controller and together they should be working closely with production management. In addition to providing reports on labor variances (which are generated from known management decisions), they should also be concentrating on material variances and should act as the production department's major help in defining these variances. Instead of waiting for a computer to solve the problem, a manual system should have been in place two years ago.

Report of October 10, 1983 visit by T. Lynch and J. Feldman to Beebe Rubber Company, p. 4.

Early in 1984, Mohawk tried a new tack in its effort to stem the tide of red ink at Beebe, structuring a new division, the Industrial Products Group ("IPG"), out of three Mohawk subsidiaries, Beebe among them, and naming the successful manager of one of the three, Thomas Dalton of Fayette Tubular Products Company, to head up the division. Among his first acts at the helm of IPG, Dalton convened a meeting with Edward McAdam, then President of Beebe Rubber, and informed McAdam that he was to be removed from his position in the company, citing McAdam's inability to turn Beebe around. ² The notes of this meeting further establish that McAdam's firing was but the first step in a planned reduction in force at the company, reciting that:

Dalton explained that he intended to make a substantial re-organization and consolidation of personnel and Beebe operations to put the company back on its feet as soon as possible and move forward with a strong, profitable and healthy Beebe Rubber Company. Dalton explained that the options were essentially to restore Beebe to health or to close Beebe. Tom explained that he would be evaluating within the next 24-48 hours the strongest people from within the organization to carry on operations in the near term.

Indeed from the beginning of Dalton's tenure as the head of IPG in April 1984 until Hebert was approached about taking early retirement in late October 1984, twenty-three employees were in fact terminated from Beebe, either through resignation, discharge, retirement, job elimination or The chronology of Hebert's departure from the company is also undisputed. Beginning sometime in August 1984 and continuing through October 1984, Dalton and Arlie Reeves, one of three managers assigned to take over McAdam's responsibilities at Beebe, began to discuss relieving Hebert of his position with the firm. Finally, on October 15, 1984, Dalton wrote to Reeves spelling out the terms of an early retirement package for Hebert that would be acceptable to Dalton. This memorandum prompted in turn an October 23, 1984 meeting between Hebert and Reeves, in which Reeves revealed to Hebert for the first time the company's desire that he take early retirement. Although "extremely shocked" by Beebe's offer of retirement, Hebert drafted, on October 25, 1984, a counter-proposal spelling out an early retirement package that would be acceptable to him. One month later, on November 21, 1984, Hebert's counter-proposal was accepted by Dalton with only a change in the timing. As agreed, Hebert retired on December 31, 1984, at the age of fifty-nine, with three months severance pay, a pension of $570 per month,...