James v. Sears, Roebuck and Co., Inc.

Decision Date11 April 1994
Docket Number92-4096,Nos. 92-4091,s. 92-4091
Citation21 F.3d 989
Parties64 Fair Empl.Prac.Cas. (BNA) 886, 64 Empl. Prac. Dec. P 43,023, 62 USLW 2656, 18 Employee Benefits Cas. 1001 H. Brendan JAMES; Shirley B. Anderson; Marion J. Lessey; Marian L. Munson; Brent W. Olsen; Dean J. Slater, Plaintiffs-Appellants and Cross-Appellees, Edwin L. Caulford, Plaintiff, v. SEARS, ROEBUCK AND CO., INC., a New York corporation, Defendant-Appellee and Cross-Appellant.
CourtU.S. Court of Appeals — Tenth Circuit

Fred R. Silvester (Claudia F. Berry with him on the briefs), of Suitter Axland Armstrong & Hanson, Salt Lake City, UT, for plaintiffs-appellants and cross-appellees.

Roger H. Bullock (Robert L. Janicki with him on the briefs) of Strong & Hanni, Salt Lake City, UT, for defendant-appellee and cross-appellant.

Before BRORBY, McWILLIAMS and EBEL, Circuit Judges.

BRORBY, Circuit Judge.

Six 1 former Sears employees (Plaintiffs) alleged Sears used its buy-out program to force them out of their jobs in violation of the Age Discrimination in Employment Act. The jury returned a verdict in favor of Plaintiffs. Sears appeals alleging there is insufficient evidence to support the verdict. Plaintiffs appeal the amount of damages the jury awarded, the trial court's award of reinstatement instead of front pay, the refusal to award expert witness fees, and the trial court's dismissal of their claim for breach of implied contract. We affirm.


The facts before the jury presented either an ill conceived and poorly executed corporate efficiency move or a deliberate corporate attempt to reduce payroll costs by replacing experienced and well paid workers forty years of age or older with lesser experienced and lower paid, younger workers. The jury decided it was the latter and rendered judgment in favor of Plaintiffs.

Sears decided to cut costs in its service centers. Sears transferred some of the clerical functions formerly performed at its Ogden, Utah service center to a larger center in Salt Lake City, Utah even though at the time the Ogden center was the more profitable of the two centers. Sears then eliminated the jobs of the two oldest full-time clerical employees of its Ogden service center. One of those terminated service center employees is a plaintiff in this suit. Sears did not allow the service center plaintiff to transfer to the Salt Lake center where her former work had been transferred. Sears then hired predominately younger, part-time employees to work in the Ogden and Salt Lake service centers.

Simultaneous with the service center cuts, Sears offered the employees in its Ogden retail store and service center a buy-out. Five of the Plaintiffs worked at the retail store. Under the buy-out, employees leaving Sears' employment would receive a week of severance pay for each year they worked for Sears, with a cap of twenty-six weeks. The purpose of the buy-out was to provide the cut service center employees "comparable jobs" in the retail store. However, the turnover at the Ogden and Salt Lake City service centers was so high the cut service center employees could have been easily reabsorbed within three months.

A form of the buy-out called early retirement was offered to employees fifty years of age or older. As offered by Sears, Plaintiffs accepting early retirement lost thirty-five per cent of their accrued pension because they were under sixty-two years of age. Further, plaintiffs between ages fifty and fifty-four had to wait until reaching age fifty-five before their pension payments could begin.

Sears pressured Plaintiffs to accept the buy-out/early retirement in order to achieve its predetermined quota for older employees leaving. Sears' internal document shows it planned on thirteen older, full-time employees leaving under the buy-out. There were twenty full-time employees under the age of forty who were eligible for the buy-out. Sears did not plan for any of the eligible younger employees to accept.

Sears obtained the acceptances of the five retail store Plaintiffs by conduct that constituted their constructive discharge. Sears' treatment of Plaintiffs included negative job reviews and threatening them with transfers to less desirable and lower paying positions if they did not accept the buy-out/early retirement.

Sears' internal document shows that the retail store was not being reorganized and none of the retail employees were to be moved or lose their jobs as a result of the changes in the service centers or the buy-out.


On appeal, Sears raises a single issue: insufficiency of evidence. The jury found Sears discriminated against all the Plaintiffs on the basis of age. It found Sears constructively discharged the five retail store Plaintiffs on the basis of age and found the reduction On appeal, Sears contends the evidence does not support a finding (1) the retail store Plaintiffs were constructively discharged, (2) any of the Plaintiffs were the victims of age discrimination, or (3) the elimination of the service center Plaintiffs' jobs was due to age discrimination instead of reduction in force. Sears also contends it presented a nondiscriminatory business justification for its actions that was not rebutted.

in force termination of the service center Plaintiff was motivated by age discrimination. Sears challenged this verdict, and the trial court denied Sears' motion for judgment notwithstanding the verdict.

In reviewing the denial of Sears' motion for judgment notwithstanding the verdict, "we must view the evidence most favorably to the non-moving party and give that party the benefit of all reasonable inferences to be drawn from the evidence." Spulak v. K Mart Corp., 894 F.2d 1150, 1153 (10th Cir.1990). Error may be found only when the evidence " 'is susceptible to no reasonable inferences sustaining the position of the party against whom the motion is made.' " Id. (quoting Cooper v. Asplundh Tree Expert Co., 836 F.2d 1544, 1547 (10th Cir.1988)).

The Age Discrimination in Employment Act ("ADEA") provides it is unlawful for any employer "to fail or refuse to hire or to discharge any individual ... because of such individual's age." 29 U.S.C. Sec. 623(a)(1). The protected class under the ADEA includes individuals "who are at least 40 years of age." 29 U.S.C. Sec. 631(a).

Plaintiffs had the burden of establishing age discrimination by a preponderance of the evidence. Faulkner v. Super Valu Stores, Inc., 3 F.3d 1419, 1425 (10th Cir.1993). The often repeated elements of a prima facie case of age discrimination are met when an employee shows "(1) [employee] was within the protected age group, (2) [employee] was doing satisfactory work, (3) [employee] was discharged, and (4) [employee's] position was filled by a younger person." MacDonald v. Eastern Wyoming Mental Health Center, 941 F.2d 1115, 1119 (10th Cir.1991).

Once the employee establishes these elements, the employer can offer evidence to show it was motivated by a legitimate nondiscriminatory reason for the challenged action. Faulkner, 3 F.3d at 1425. The employee need not prove the employer's justifications were false, id., or "that age was the sole motivating factor in the employment decision," EEOC v. Prudential Fed. Sav. & Loan Ass'n, 763 F.2d 1166, 1170 (10th Cir.), cert. denied, 474 U.S. 946, 106 S.Ct. 312, 88 L.Ed.2d 289 (1985). Instead, the employee must show age was also a reason for the employer's decision, and "age was the factor that made a difference." Id.; Perrell v. FinanceAmerica Corp., 726 F.2d 654, 656 (10th Cir.1984) (age must "make a difference" in the sense that " 'but for' the factor of age discrimination, the employee would not have been adversely affected" (quoting Cancellier v. Federated Dept. Stores, 672 F.2d 1312, 1316 (9th Cir.), cert. denied, 459 U.S. 859, 103 S.Ct. 131, 74 L.Ed.2d 113 (1982))).

After there has been a full trial on the merits, the sequential burden shifting analysis adopted from McDonnell Douglas Corp. v. Green, 411 U.S. 792, 801-04, 93 S.Ct. 1817, 1823-25, 36 L.Ed.2d 668 (1973), "drops out and we are left with the single overarching issue whether plaintiff adduced sufficient evidence to warrant a jury's determination that adverse employment action was taken against him on the basis of age." Fallis v. Kerr-McGee Corp., 944 F.2d 743, 744 (10th Cir.1991).

A. Constructive Discharge of Retail Store Employees

" '[T]he question on which constructive discharge cases turn is simply whether the employer by its illegal discriminatory acts has made working conditions so difficult that a reasonable person in the employee's position would feel compelled to resign.' " Spulak, 894 F.2d at 1154 (quoting Derr v. Gulf Oil Corp., 796 F.2d 340, 344 (10th Cir.1986)). A finding of constructive discharge must not be based only on the discriminatory act; there must also be aggravating factors that make staying on the job intolerable. Cockrell v. Boise Cascade Corp., 781 F.2d A perceived demotion or reassignment to a job with lower status or lower pay may, depending upon the individual facts of the case, constitute aggravating factors that would justify finding of constructive discharge. Id. at 177-78. A "reassignment is not a demotion unless the employee can show that he receives less pay, has less responsibility, or is required to utilize a lesser degree of skill than his previous assignment." Hooks v. Diamond Crystal Specialty Foods, Inc., 997 F.2d 793, 799 (10th Cir.1993) (emphasis added). Thus, a reassignment may involve a demotion if the employee will be paid less in the new position.

173, 177 (10th Cir.1986) (perceived demotion or reassignment).

An offer of early retirement may constitute constructive discharge if the employee demonstrates each choice facing the employee makes him worse off, and "if he refuses the offer and decides to stay, his employer will treat him less favorably than other employees because of age." Mitchell v. Mobil Oil Corp., 896 F.2d 463, 467 (10th Cir.1990).


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