Huff v. UARCO, Inc.

• Decision Date: 06 August 1997
• Docket Number: 96-2914,Nos. 96-2361,s. 96-2361
• Citation: 122 F.3d 374
• Parties: 74 Fair Empl.Prac.Cas. (BNA) 879, 73 Empl. Prac. Dec. P 45,323, 21 Employee Benefits Cas. 1578, 25 A.D.D. 395 Jimmie HUFF, Plaintiff-Appellant, v. UARCO, INCORPORATED, Defendant-Appellee. William M. SCHOOLMAN, Plaintiff-Appellant, v. UARCO, INCORPORATED, and the Trustees of the UARCO Retirement Plan, Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 374

122 F.3d 374

74 Fair Empl.Prac.Cas. (BNA) 879,

73 Empl. Prac. Dec. P 45,323,

21 Employee Benefits Cas. 1578, 25 A.D.D. 395

Jimmie HUFF, Plaintiff-Appellant, v. UARCO, INCORPORATED, Defendant-Appellee.

William M. SCHOOLMAN, Plaintiff-Appellant, v. UARCO, INCORPORATED, and the Trustees of the UARCO

Retirement Plan, Defendants-Appellees.

Nos. 96-2361, 96-2914.

United States Court of Appeals Seventh Circuit.

Argued Jan. 14, 1997.

Decided Aug. 6, 1997.

Charles D. Boutwell, McCullough, Campbell & Lane, Chicago, IL, John F. O'Meara (argued), Park Ridge, IL, for Plaintiffs-Appellants.

Gary S. Kaplan (argued), Jeffrey K. Ross, Theodore C. Stamatakos, Seyfarth, Shaw, Fairweather & Geraldson, Chicago, IL, for Defendants-Appellees.

Gwendolyn Young Reams, Carolyn L. Wheeler, Robert J. Gregory, C. Gregory Stewart, Equal Employment Opportunity Commission, Office of General Counsel, Washington, DC, for Amicus Curiae.

Before ESCHBACH, KANNE and ROVNER, Circuit Judges.

ILANA DIAMOND ROVNER, Circuit Judge.

Jimmie Huff and William Schoolman had been working for UARCO for twenty-four years and thirty-two years respectively when UARCO demoted them from their long-held supervisory positions. Both Huff and Schoolman claimed the demotions were the result of age-related bias. Schoolman additionally claimed that UARCO discriminated against him because of a perceived disability, and discriminated against him on the basis of age in the provision of his pension benefits. The district court ¹ granted summary judgment in favor of defendant UARCO in both cases, ruling that neither plaintiff had enough evidence to raise a genuine issue of material fact for trial. Because we find admissible some of the evidence excluded by the district court, we reverse the grants of summary judgment on the age bias claims and remand for trial. We affirm the grant of summary judgment in favor of UARCO on Schoolman's disability claim.

I.

UARCO is in the business of developing and producing business forms at its Watseka, Illinois plant. The plant is divided into five functional departments: composing, preparatory, press, finishing and warehouse. Schoolman and Huff were employed as line workers, and were promoted to supervisory positions in 1965 and 1977 respectively. In May 1993, Schoolman herniated two discs in his back, and was off work until early August 1993. When he returned, he temporarily used an electric cart to travel around the plant. His doctor directed him to refrain from heavy lifting, twisting his back, and standing on cement for long periods of time. His position as supervisor required no heavy lifting, twisting or standing, and he was able, in his injured condition, to perform his supervisory duties. Huff had suffered a minor stroke in 1991, but recovered quickly and returned to work where he, too, was able to perform all of his supervisory duties. No one disputes that Schoolman and Huff were satisfactorily performing their duties as supervisors at the time of their demotions.

In the fall of 1993, Ron Trillet, the plant manager, decided that the finishing department, with five supervisors, was top heavy compared to the press department, which functioned adequately with only three supervisors. In order to cut costs and reduce the number of supervisors in the finishing department, Trillet decided to downsize the department by demoting two supervisors. In order to determine who to demote, Trillet asked Richard Rhodes, the general supervisor of that department, to rank the finishing department supervisors. Rhodes, who had directly supervised Huff and Schoolman for some time, ranked the five finishing department supervisors in the following order: 1) Landry, age 48, rated excellent; 2) Paro, age 56, rated above average; 3) Schoolman, age 55, rated average; 4) Huff, age 56, rated average; and 5) Nasers, age 48, rated below average.

Apparently not satisfied with the results of Rhodes' ranking, Trillet sought input from Robert Williams, UARCO's Human Resources Director. Williams, in turn, solicited the opinions of Fred Focken and James Reutter, two general supervisors who had no direct supervisory contact with Huff and Schoolman. Focken used the opportunity to "put in a good word" for Nasers, and to say that he thought Huff had come to work intoxicated one night. (Discovery showed that on the night in question, Huff had suffered the stroke mentioned above, which caused him to appear intoxicated). Reutter had no comment on Huff but opined that Schoolman was a poor supervisor. Neither provided a formal ranking as Rhodes had done. Nasers, who came in dead last in Rhodes' ranking and was rated below average, was subsequently transferred to the press department as a supervisor, and Dean Schippert, a 51 year old press department supervisor, was transferred to the finishing department. Schoolman and Huff were demoted down to line positions. Schoolman eventually resigned because his new position proved too harmful to his back, and Huff remains on the job.

According to Schoolman and Huff, their demotions were the only "competitive" demotions at the plant that anyone could remember. All other demotions had been made on a seniority basis. In fact, plaintiffs point to UARCO's Industrial Relations Manual as the source of company policy utilizing seniority as the sole criteria for demotions. Furthermore, ten of the eleven workers who were terminated by UARCO in 1993 were over forty. (The record does not reflect whether older workers were disproportionately affected). In that same year, the company sought the early retirement of four older management level employees, and although the company claimed it was undergoing a reduction in force, the number of employees at the plant actually increased during that time period. Trillet, who made the decision to demote Schoolman and Huff, made age-biased comments during negotiations with the union six months before the demotions (although Schoolman and Huff were not union employees), and when the company began to recall laid-off union workers approximately one year after plaintiffs' demotions, it failed to recall older workers who had seniority, even though it had a contractual obligation to do so. Following the demotions, a younger worker with less seniority, Allison, was promoted to the position of supervisor, even though plaintiffs were qualified and had seniority. Schoolman and Huff also contend that although supervisors were interchangeable among departments, only the finishing department supervisors were ranked, leaving unconsidered for demotion several younger supervisors with less seniority. Plaintiffs argue that this all points to the conclusion that they were demoted on the basis of age in violation of the ADEA.

Schoolman additionally claimed that he was demoted at least in part because of UARCO's perception that he was disabled after his back problems began. He cites the fact that all supervisors over the age of fifty-four who had health problems were demoted, including himself, Huff, and Paro, who had had a heart attack. ² Furthermore, all of the demoted workers were given more physically demanding jobs. Finally, he points to UARCO's allegedly insensitive treatment of Rhoda Minard, another worker with back and leg problems, who was not given a chair to sit on when her job allowed sitting, or a mat on which to stand to alleviate her problem. Schoolman also claimed that UARCO wrongfully withheld the payment of pension benefits from him on the basis of age. UARCO's pension policy allowed any workers with fewer than ten years' experience or those workers who had more than ten years' experience but who were not yet fifty-five years old to withdraw their pensions in a lump sum at termination. But those who worked for UARCO for more than ten years, and who were older than fifty-five were not allowed a lump sum payout, but were required to take their pension payment over time, on an actuarially equivalent basis.

A.

Defendant UARCO moved for summary judgment against both defendants, arguing that neither had direct evidence of discrimination, and that both failed to rebut UARCO's facially non-discriminatory reasons for the demotions. UARCO also argued that Trillet's statements during the union negotiations were irrelevant because Schoolman and Huff were not union employees. Further, UARCO claimed, the Industrial Relations Manual applied only to nonsupervisory personnel, and only to layoffs, not to demotions. UARCO also objected to the relevance of the failure to recall older union workers between ten and twenty months after the demotions. On Schoolman's individual claims, UARCO disputed that it had been insensitive to Minard's physical condition or that it had considered the health of any of the demoted employees in making the decisions. UARCO contested whether these facts, even if true, could amount to a claim of disability discrimination. Finally, UARCO contended that its pension plan was not discriminatory as a matter of law under Hazen Paper Co. v. Biggins, 507 U.S. 604, 113 S.Ct. 1701, 123 L.Ed.2d 338 (1993).

B.

The district court ruled first in Huff's case. The court addressed the "direct proof" method first, finding that Huff had presented no "smoking gun" evidence of discriminatory intent, and no circumstantial evidence to show that UARCO was engaged in a plot to eliminate older workers. The court refused to consider as direct evidence the statements made by Trillet during union negotiations because Huff was not a union employee. Characterizing the statements as "far afield" and "difficult to interpret," the court found they dealt with layoffs and bump rights, not demotions. Finding that this was as close as Huff came to a direct case, and finding that it was not close enough to raise a genuine issue of material fact for trial, the court rejected the direct case.

In analyzing Huff's indirect claim, the court noted that UARCO conceded that Huff had made out a prima facie case under ...