Karlo v. Pittsburgh Glass Works, LLC

• Decision Date: 02 September 2015
• Docket Number: 2:10-cv-1283
• Court: U.S. District Court — Western District of Pennsylvania
• Parties: RUDOLPH A. KARLO, MARK K. MCLURE, WILLIAM S. CUNNINGHAM, JEFFREY MARIETTI, and DAVID MEIXELSBERGER, Plaintiffs, v. PITTSBURGH GLASS WORKS, LLC, Defendant.

RUDOLPH A. KARLO, MARK K. MCLURE,WILLIAM S. CUNNINGHAM, JEFFREY MARIETTI,and DAVID MEIXELSBERGER, Plaintiffs, v. PITTSBURGH GLASS WORKS, LLC, Defendant.

2:10-cv-1283

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA

September 2, 2015

MEMORANDUM OPINION AND ORDER OF COURT

Pending before the Court are a MOTION FOR SUMMARY JUDGMENT ON THE PLAINTIFFS' INDIVIDUAL DISPARATE TREATMENT CLAIMS (ECF No. 372); a MOTION FOR SUMMARY JUDGMENT ON THE PLAINTIFFS' INDIVIDUAL DISPARATE IMPACT CLAIMS (ECF No. 374); a MOTION FOR SUMMARY JUDGMENT ON PLAINTIFF KARLO'S AND PLAINTIFF MCLURE'S RETALIATION CLAIMS (ECF No. 377); and a COMBINED MOTION TO STRIKE UNSUPPORTED FACTS AND DEEM IMPROPERLY CONTESTED FACTS ADMITTED (ECF No. 417), filed by Defendant Pittsburgh Glass Works, LCC ("PGW"). The issues have been fully-briefed by Plaintiffs Rudolph A. Karlo, Mark K. McLure, William S. Cunningham, Jeffrey Marietti, and David Meixelsberger and Defendant PGW in their memoranda (ECF Nos. 373, 375, 378, 386, 387, 396, 400, 401, 408, 409, 411, 418, 422, 424, 425, 426). Also, the factual record has been thoroughly developed via their respective Concise Statements of Material Facts ("CSMF"), Responsive/Counter Statements of Facts ("RSOF"/"Counter-CSMF"), appendices and exhibits(ECF Nos. 376, 379, 388, 389, 390, 397, 398, 402, 403, 404, 405, 410, 412).¹ Accordingly, the motions are ripe for disposition.

I. Background²

A. Factual Background

The following background is taken from the Court's independent review of the motions for summary judgment, the filings in support and opposition thereto, and the record as a whole.As the law requires, all disputed facts and inferences are resolved in favor of Plaintiffs, the non-moving parties.

1. The Formation of PGW

PGW was formed on October 1, 2008 from the auto-glass assets of PPG Industries, Inc. ("PPG"). PPG initially retained a forty-percent ownership in PGW; Kohlberg & Company ("Kohlberg"), a private equity firm, owned the remaining sixty-percent and later acquired the remainder of PPG's interest in the venture. James Wiggins, a Kohlberg principal, became Chairman and CEO of PGW.

One of PGW's core businesses is the production of automotive glass for car and truck manufacturers as an original equipment manufacturer ("OEM"), for which it maintains a Manufacturing Glass Technology Department ("Manufacturing Technology") in Harmarville, Pennsylvania where the five Plaintiffs were employed. Aside from OEM, PGW consists of GTS Services, a software business ("GTS"); PGW Auto Glass ("AG"), an automotive-replacement-glass distribution business ("ARG"); LYNX Services, an insurance claims administrator ("LYNX"); and Aquapel, a glass treatment supplier. At the corporate level in Pittsburgh, Pennsylvania, PGW's businesses share departments for finance, IT, and Human Resources, functions previously staffed by PPG and provided to PGW by contract during a transition period.

2. The Decline of the Automobile Industry

Around the time that PGW was formed, General Motors, Ford, and Chrysler (the "Big Three" automobile manufacturers) appeared before the United States Congress to request bailout funds. Given the direction of the industry and economic forecast, PGW took several steps to combat deteriorating sales: it closed two manufacturing facilities in Canada and another in Evart, Michigan; consolidated distribution systems; identified about $100-$200 million of necessarycapital expenditures; reconfigured its distribution strategy; commenced process improvement actions; and undertook supply chain optimization. PGW also terminated the employment of roughly ten to twelve percent of its salaried workforce in early December 2008. The decision for this reduction in force ("RIF") was made by Wiggins in consultation with his leadership team, forty-five to fifty persons in senior management positions at PGW. The decisions regarding the positions to eliminate were, however, left to the discretion of the individual directors who were assigned a targeted percentage by which they were directed to reduce their workforce.

PGW undertook several additional measures in early 2009 to meet the challenges of the lower demand: it put hourly employees on temporary layoff; it operated its largest plant (Evansville) for only four of the thirteen weeks in the first quarter; it trained leadership at each plant in Lean Six Sigma principles; it suspended merit salary increases; it implemented a hiring freeze except for critical positions; it suspended a 401k matching contribution program and bonuses; and reduced salaries company-wide.

3. The March 2009 RIF

Kevin Cooney became Acting HR Director for PGW after the former Vice President of Human Resources resigned from the company sometime in late-2008 or early-2009.³ Around mid-February 2009, Wiggins asked Cooney to take a "fresh look" at the organization and formulate a reorganization plan.

Cooney enlisted the assistance of a consultant, Ed Dunn, an organizational specialist to make recommendations regarding restructuring of the company into a more lean and effective organization. Dunn later prepared an "Organization Assessment" presentation and a summary of his observations/recommendations, which Cooney reviewed before finalization. In hismemorandum, Dunn noted that "[m]arket conditions continue to deteriorate and more cost reductions are required as soon as possible[,] and this would include certain organization changes;" that "[i]t would not be efficient or effective at this time to undertake a formal or time-consuming organization study or process;" and that "[i]nstead, the Executive Team . . . would do an ASAP organization assessment and identify cost-saving organization structure changes to be made that are in addition to the changes and reductions already identified." Pls.' Counter-CSMF, App'x Ex. L at 1, ECF No. 405-12 (disparate treatment and disparate impact claims); see also id. ("The mindset needs to be: Be bold and aggressive. Risk going too far, too fast . . . verses the opposite. We can revisit and re-load as needed when conditions and results improve.") (ellipses in original). These suggestions were not binding on PGW, and Dunn had no role in the decision-making process or implementation of later reductions.

By early-March 2009, PGW decided to conduct another RIF. Although this decision was made by Wiggins and upper management, the employees were selected for termination by their respective managers and directors throughout the company's various operating units. PGW did not specifically train its directors with regard to the RIF, employ any written guidelines or policies as to how they were to conduct the RIF, conduct any disparate impact analysis of the RIF, review the prospective RIF terminees with in-house or outside counsel, or document why any particular employee was selected for inclusion in the RIF.⁴ The upper management instead issued another generalized directive for each department to cut a targeted percentage from theirbudget, a downsizing with which each unit director had to comply. See Dep. of Cooney, July 26, 2011 at 40:12-14, ECF No. 405-9 ("[I]t became clear that the target was going to be about a 30-percent reduction in jobs, not people, but jobs."). Thus, the unit directors in the company were afforded broad discretion in determining which of their reports to select for the RIF.

On March 31, 2009, PGW terminated approximately one-hundred salaried employees, affecting over forty locations and/or divisions of the company. Moreover, the RIF impacted almost every part of the company with the widespread job cuts: forty-four from ARG at over twenty locations; twenty-four from OEM plus seven from Manufacturing Technology, one from Satellite Engineering, and two from Enterprise Excellence; thirteen from ARG Truckload & Services; eight from the company's sales organization; and one from New Product Development. PGW also closed the Evart, Michigan plant on March 31, 2009, leading to the elimination of eighteen salaried employees.

As part of the RIF, a PGW Human Resources employee with a long tenure at PPG, Diana Jaden, was tasked by Cooney to consolidate data from various locations and unit managers, calculate the amount of severance, identify those who were impacted, and prepare paperwork for the exit interviews. The paperwork included a cover letter that explained that the individual was being terminated and outlined the severance being offered; a "Separation Agreement and Release" that employees could sign to receive certain benefits in exchange for waiving their right to bring a claim against PGW; and two multi-page documents with Decisional Unit Matrices ("DUM(s)") per the Older Workers' Benefit Protection Act ("OWBPA").

4. The Manufacturing Glass Technology Department

Gary Cannon was the Director of Manufacturing Technology in March 2009. Within this group, Jim Schwartz supervised Cunningham; David Perry supervised Marietti; Phillip Sturman,supervised Karlo and Meixelsberger; and Julie Bernas, supervised McLure. Otherwise, Schwartz, Perry, Sturman, and Bernas were all Cannon's direct reports.

Before the RIF, Manufacturing Technology was comprised of twenty-seven salaried associates. Of those employees, Cannon selected six for termination in the March 2009 RIF, which included Karlo, McLure, Cunningham, Marietti and Meixelsberger.

i. Karlo

Karlo began working for PPG in its automotive glass division in 1978 as a Construction and Maintenance Research Specialist II. Throughout his thirty-year career, he received several promotions: to Senior Technical Assistant in 1990, to Engineering Specialist in 1995, and finally to Senior Engineering Specialist in 2001, a position he maintained to his termination. His job duties included working in and later supervising the "mold shop" in which tools for bending glass are built. Karlo also helped to develop eight (8) shared patents, and he received commendations, pay increases, and bonuses, as well as positive...