Hedrick v. Hercules, Inc.

Decision Date15 October 1981
Docket NumberNo. 80-7566,80-7566
Citation658 F.2d 1088
Parties27 Fair Empl.Prac.Cas. 1616, 27 Fair Empl.Prac.Cas. 279, 27 Empl. Prac. Dec. P 32,181 Herbert Kyle HEDRICK, Plaintiff-Appellee, Cross-Appellant, v. HERCULES, INC., Defendant-Appellant, Cross-Appellee. . Unit B *
CourtU.S. Court of Appeals — Fifth Circuit

Thomas, Taliaferro, Forman, Burr & Murray, J. Fredric Ingram, William F. Murray, Jr., Birmingham, Ala., for defendant-appellant, cross-appellee.

Rhea, Boyd & Rhea, Clarence F. Rhea, Gadsden, Ala., for plaintiff-appellee, cross-appellant.

Appeals from the United States District Court for the Northern District of Alabama.

Before FRANK M. JOHNSON, Jr., and HATCHETT, Circuit Judges, and SCOTT **, District Judge.

CHARLES R. SCOTT, District Judge:

Herbert Kyle Hedrick, a former employee of Hercules, Inc., filed suit against Hercules in the United States District Court for the Northern District of Alabama alleging that his employment with Hercules had been terminated in violation of the Age Discrimination in Employment Act (hereinafter "ADEA"). The jury returned special verdicts finding that age was a determinative factor in the decision not to employ Hedrick at his previous salary, which was pay grade 12, or a lower grade pay level but that age was not a determinative factor in the decision not to employ Hedrick as Regional Plant Manager at pay grade 15. The jury awarded Hedrick damages in the amount of $103,887. Hercules subsequently offered to reinstate Hedrick in a position at pay grade 12, Hedrick's previous pay grade level. The court approved the offer of reinstatement, concluding that damages were to be awarded from April 1978, when Hedrick was discharged, until May 1980, when the offer of reinstatement was approved by the district court. Upon defendant's motion for partial relief from the jury verdict, the district court reduced the award of damages to $52,887, recognizing that the jury had not used the appropriate period of time in computing the damage award. The lower court also awarded Hedrick $26,443.50 in liquidated damages and awarded Hedrick's attorney $25,200 in attorney's fees. Defendant's motions for a directed verdict, judgment notwithstanding the verdict, and a motion for a new trial were denied by the district court.

Hercules contends on appeal that the district court erred in denying defendant's motions for a directed verdict and a judgment notwithstanding the verdict, that a new trial should have been granted because the excessive jury award indicated that the jury was motivated by passion and prejudice, and that the district court abused its discretion in awarding liquidated damages and awarding plaintiff's attorney excessive attorney's fees. Hedrick contends on cross-appeal that a liquidated damage award equal to the full amount of damages awarded by the jury is warranted and that Hercules did not make a sufficient offer of reinstatement to toll the continuation of damages. Hedrick further contends that an increase in the award of attorney's fees by the district court is warranted and seeks attorney's fees in connection with this appeal.

In 1977 Hercules formulated a plan for the reorganization of its domestic operations. The plan called for a transition from a departmental to a matrix system of organization, resulting in a consolidation of certain positions and a corresponding reduction in personnel. A Reorganizational Planning Committee was formed to implement the plan. The committee established guidelines for determining whether to dismiss employees, pursuant to the reorganization plan, who were within the ADEA protected age category of 40 to 65 years of age. These guidelines provided as follows:

The primary question that a department must ask is: "can we justify the reduction in force exclusive of any consideration of age or pension eligibility?" If the answer is negative for any reduction situation, then there is a good possibility of being liable for charges of age discrimination.

Justifying a reduction in force requires evidence that there is no longer a need for an employee's service within his job function and that it is either unfeasible or unreasonable to assign the employee to other work, or there is a marginal performance record which negates against any such consideration.

Although the above specially applies to a reduction in force, any personnel action directed toward a member of this protected group must answer the question, "can we justify the personnel action exclusive of any consideration of age or pension eligibility?"

The Board of Directors approved the reorganization plan and guidelines, and in January 1978 the committee began implementation of the plan. During this time the company conducted an Average Age & Service survey. The results of the survey revealed that in comparison with six other major chemical companies Hercules had the highest average employee age.

Prior to his dismissal, Hedrick held the position of Plant Manager at the Bessemer, Alabama plant which produced explosives. Under the reorganization plan a Regional Plant Manager was to be appointed to oversee the Bessemer plant and three other explosive production plants. The current Plant Manager positions in those plants were to be abolished. In addition to supervising the four plants, the Regional Plant Manager was to be responsible for the general financial planning of the plants. The position of Regional Plant Manager was to be a grade 15 pay level which would be a 30% higher base salary than the grade 12 pay level of a Plant Manager.

The Reorganizational Planning Committee determined that Hedrick did not possess the necessary qualifications for the new position of Regional Plant Manager. Consequently, Hedrick's employment with Hercules was terminated in April 1978 since his position as Plant Manager had been eliminated. Hedrick was 61 years of age when he was discharged and had worked for Hercules for approximately 37 years. 1 The committee appointed Robert Shepardson to the Regional Plant Manager position. Shepardson had worked at several of the Hercules plants and had been involved in production, administration, and finance. Shepardson was several years younger than Hedrick but was within the ADEA protected age group.

Several incidents involving Hedrick were considered by the committee in determining whether Hedrick would be suitable for the position of Regional Plant Manager. In April 1977, following the conclusion of a strike at the Bessemer plant while Hedrick was Plant Manager, a post-strike meeting was arranged to encourage support for the company. The sales personnel, however, were not invited to attend the meeting. It is unclear why the sales personnel were excluded and who was responsible for excluding them from the meeting. The Hercules main office took appropriate action to ensure that the sales personnel were able to attend the meeting. In July 1977 Donald Parker, a nitroglycerine technician, was sent by Hercules to the Bessemer plant to repair the nitroglycerine production line. Hedrick refused to give Parker the key to the plant which Parker had requested so that he could work overtime. After Parker obtained a key elsewhere, Hedrick had some of the locks to the plant changed. Also in July 1977, Hedrick refused to permit a sales manager to reenter the plant because he had failed to submit to a security check on his way out.

Several employees who worked with Hedrick testified that Hedrick worked well with people and strictly enforced safety and security rules. Prior to 1977, Hedrick had generally received good evaluations of his work. Richard G. Sailer was appointed Director of Operations in 1977 and during that time was responsible for supervising all explosive plants including the plant managed by Hedrick at Bessemer. Sailer submitted evaluation reports on August 3, 1977 and January 1, 1978 in which he rated Hedrick's performance as "marginal" and stated that he was "ineffective as a leader and manager". Sailer subsequently indicated to Durward H. Little, who was chairman of the Reorganizational Planning Committee, that Hedrick was not qualified for the position of Regional Plant Manager.

Upon instructions from Little, Sailer informed Hedrick in February 1978 that the position of Plant Manager at Bessemer was being eliminated and that he would not be appointed to the new position of Regional Plant Manager. Hedrick testified that Sailer told him that Hercules was "going to get rid of the good 'ole Joes and get some younger folks in" and that Hedrick "had no friends in Wilmington" at the company's main office. Sailer subsequently asked Hedrick if he would be interested in another position at a lower salary grade level. Hedrick responded that he would not accept a position at a reduced salary.

As part of the company's reorganization plan, a Personnel Review Committee was established to assist employees who had been displaced as a result of the reorganization in finding other positions within the company. The Personnel Review Committee was unable to find a position for Hedrick within the company at his previous salary level. Thereafter, Hercules provided Hedrick with the services of a job placement firm, however, Hedrick was unable to find other employment.

Directed Verdict or Judgment Notwithstanding the Verdict

Hercules contends that the district court erred in denying defendant's motions for a directed verdict and a judgment notwithstanding the verdict. In Boeing Company v. Shipman, 411 F.2d 365, 374 (5th Cir. 1969) (en banc), this Court established the standard to be applied in reviewing a directed verdict or judgment notwithstanding the verdict as follows:

On motions for directed verdict and for judgment notwithstanding the verdict the Court should consider all the evidence not just the evidence which supports the non-mover's case but in the light and with all reasonable inferences most favorable to the party opposed to the...

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