Holley v. Sanyo Mfg., Inc.

Decision Date30 August 1985
Docket NumberNo. 84-2303,84-2303
Citation771 F.2d 1161
Parties38 Fair Empl.Prac.Cas. 1317, 37 Empl. Prac. Dec. P 35,468 Earl HOLLEY, Appellee, v. SANYO MANUFACTURING, INC., Appellant.
CourtU.S. Court of Appeals — Eighth Circuit

Thomas C. Walsh, St. Louis, Mo., for appellant.

Keith Blackman, Jonesboro, Ark., for appellee.

Before ROSS and JOHN R. GIBSON, Circuit Judges, and MEREDITH, * Senior District Judge.

JOHN R. GIBSON, Circuit Judge.

Sanyo Manufacturing, Inc. appeals a judgment entered for Earl Holley on a jury verdict of willful discrimination in violation of the Age Discrimination in Employment Act, 29 U.S.C. Secs. 621-634 (1982). Holley was discharged in 1982 when Sanyo instituted a plant-wide reduction-in-force at its Forrest City, Arkansas location and combined Holley's position with that of a younger man. We hold that since Holley offered no evidence of age discrimination beyond these facts, he did not make his case under the statute. Therefore, we reverse.

In 1979, Earl Holley went to work for Sanyo Manufacturing, Inc. at its Forrest City, Arkansas plant as a cabinet finishing foreman in the wood products division. In February 1980, he was promoted to general foreman but later that year was downgraded and shifted to the position of finishing coordinator, after the company determined he could not handle the pressures of being a general foreman. In the spring of 1981, Holley took a two-month leave of absence to undergo heart bypass surgery and afterward returned to the same job. In January 1982, Holley was terminated by Sanyo. His supervisor at that time was Wally Ball, who was involved in deciding who should be fired under the reduction-in-force. Wally Ball's brother, Stanley Ball, had been hired and trained by Holley. When Holley was discharged, Holley's position of finishing coordinator was combined with Stanley Ball's position, and Stanley Ball was given the new job.

After his discharge, Holley brought this action against Sanyo, alleging age discrimination. At trial, he testified to his experience in the wood finishing field, his training of Stanley Ball, his conflicts with Wally Ball, and the circumstances surrounding his discharge. Other witnesses for Holley testified to his abilities and experience. There was also testimony that the quality of work on the line Holley was responsible for declined after Stanley Ball took over.

Sanyo presented evidence that Holley's discharge was part of a general reduction-in-force and consequent reorganization of positions. There was testimony that by the end of 1981 the plant was operating at about 20% of capacity. The hourly work force was reduced from 228 in July 1981 to 110 in March 1982. The salaried work force during the same period decreased from 49 to 37. Approximately one-fourth of the salaried work force was laid off in the department in which Holley was employed.

There was testimony that Sanyo selected those to be laid off by considering their work records, seniority, and the need for the work that was performed. There was also testimony that before the termination Sanyo made an analysis of the effects of the layoff on race, sex, and age groups. In Holley's department eight of 31 salaried employees were discharged. Two of these eight were over 40 years old. The discharges caused both the average age of the employees and the percentage of employees within the statutory age-protected class to slightly increase.

After Sanyo's motion for a directed verdict was denied, the jury returned its verdict for Holley, found compensatory damages in the amount of $41,568.23, and found by a preponderance of the evidence that the age discrimination was willful. Based upon this verdict, the district court awarded a like amount for liquidated damages, awarded attorneys' fees in the amount of $7,830.40, and entered judgment for Holley. Sanyo's motion for judgment n.o.v. was also denied.

The Age Discrimination in Employment Act (ADEA) makes unlawful the discharge of an employee because of his age 1 but specifically excepts discharge for "good cause." 2 Sanyo argues that Holley was discharged because of a general reduction-in-force dictated by business necessities (which is "good cause") and that he has shown no other reason for his discharge. Thus, Sanyo argues that Holley did not make a submissible case for the jury, and, consequently, that the district court erred in not granting Sanyo's motions for a directed verdict and for judgment n.o.v.

We may find for Sanyo only if "all the evidence points one way and is susceptible of no reasonable inferences sustaining the position" of Holley. Crues v. KFC Corp., 729 F.2d 1145, 1148 (8th Cir.1984) (quoting Dace v. ACF Industries, 722 F.2d 374, 375 (8th Cir.1983) (quoting Decker-Ruhl Ford Sales v. Ford Motor Credit Co., 523 F.2d 833, 836 (8th Cir.1975) ) ). Further, we must assume as true all facts in Holley's favor which the evidence tends to prove and give him the benefit of all reasonable inferences. See Craft v. Metromedia, Inc., 766 F.2d 1205, 1218 (8th Cir.1985). The task before us is, bearing in mind this standard, to adduce the nature of proof required under the ADEA and to evaluate the evidence Holley presented at trial against such requirements.

Because the ADEA grew out of Title VII of the Civil Rights Act of 1964, 3 and because much of the language of the ADEA parallels that of Title VII, 4 we have held that the guidelines of McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973), a Title VII case, may be applied to ADEA cases. See Halsell v. Kimberly-Clark Corp., 683 F.2d 285, 289 (8th Cir.1982), cert. denied, 459 U.S. 1205, 103 S.Ct. 1194, 75 L.Ed.2d 438 (1983); Cova v. Coca-Cola Bottling Co., 574 F.2d 958, 959 (8th Cir.1978). McDonnell Douglas lays out a three-step "judicial minuet" in which the burden of production rests first on the plaintiff to establish his prima facie case, then on the defendant "to articulate some legitimate nondiscriminatory reason for the employee's rejection," 411 U.S. at 802, 93 S.Ct. at 1824, and finally again on the plaintiff to show that the defendant's reasons were pretextual. Id. at 804, 93 S.Ct. at 1825; see Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 252-53, 101 S.Ct. 1089, 1093, 67 L.Ed.2d 207 (1981). Thus, "[t]he ultimate burden that plaintiff must meet is to show that age was a determining factor in the discharge." Cova, 574 F.2d at 960 (citing Laugesen v. Anaconda Co., 510 F.2d 307, 315-17 (6th Cir.1975) ). Of course, if a plaintiff cannot make his prima facie case, this ultimate burden of persuasion will not be met.

The first issue, then, is the nature of an ADEA prima facie case. In Cova, again following McDonnell Douglas, we held one way to make a prima facie case is for the plaintiff to show:

(1) that he or she is within a protected age group, (2) that he or she met applicable job qualifications, (3) that despite these qualifications, he or she was discharged, and (4) that, after the discharge the position remained open and the employer continued to seek applications from persons with similar qualifications.

574 F.2d at 959; see Halsell, 683 F.2d at 290.

In the present case, Holley was within the protected age group, 5 was discharged, and, despite some argument from Sanyo, appears to have been qualified for the job. Difficulties arise, however, with the fourth requirement. As we have noted, Holley's discharge took place within the context of a general reduction-in-force at Sanyo's Forrest City plant. His position did not remain open and, instead, was combined with the duties of another position. At this point, we could simply hold the McDonnell Douglas standard was not met and end our inquiry. See Ray v. MacMillan Bloedel Containers, Inc., 738 F.2d 965, 966 (8th Cir.1984) (per curiam) (in reduction-in-force situation, plaintiff did not prove prima facie case where "[h]e failed to prove that the job was held open until it was filled by a younger person."). We believe, however, since McDonnell Douglas made clear that its requirements were not exclusive, and since earlier decisions of this circuit have not squarely dealt with the particular problems presented when there is a reduction of forces in an economic downturn with a resulting combination of job duties, 6 that further consideration of the issue is appropriate.

In a similar situation, the District of Columbia Circuit found that the plaintiff made his prima facie case simply by showing, in addition to the first three requirements, that "younger persons were retained and others later promoted." Coburn v. Pan American World Airways, Inc., 711 F.2d 339, 343 (D.C.Cir.), cert. denied, --- U.S. ----, 104 S.Ct. 488, 78 L.Ed.2d 683 (1983). Thus, following Cuddy v. Carmen, 694 F.2d 853, 857 (D.C.Cir.1982) (plaintiff must show he "was disadvantaged in favor of a younger person"), the Coburn court did not require that age discrimination on the job be limited to a particular position. Acknowledging that in a reduction-in-force situation the discharged employee will nearly always be qualified for his position, and acknowledging what follows from its standard--that "anyone in the protected age group will presumptively have a cause of action under the ADEA," the Coburn court nonetheless rejected the suggestion that "direct evidence of discrimination" be required for a prima facie case since "the exigencies of a reduction-in-force can best be analyzed at the stage where the employer puts on evidence of a nondiscriminatory reason for the firing." 711 F.2d at 343.

We believe, however, that some additional showing 7 should be necessary to make a prima facie case in a reduction-in-force situation. The ADEA does not require that every plaintiff in a protected age group be allowed a trial simply because he was discharged during a reduction-in-force. We agree with the Sixth Circuit that "[t]he mere termination of a competent employee when...

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