Kneisley v. Hercules Inc.

• Decision Date: 30 December 1983
• Docket Number: Civ. A. No. 79-310 MMS.
• Citation: 577 F. Supp. 726
• Parties: J. Wayne KNEISLEY, Plaintiff, v. HERCULES INCORPORATED, a corporation of the State of Delaware, Defendant.
• Court: U.S. District Court — District of Delaware

577 F. Supp. 726

J. Wayne KNEISLEY, Plaintiff, v. HERCULES INCORPORATED, a corporation of the State of Delaware, Defendant.

Civ. A. No. 79-310 MMS.

United States District Court, D. Delaware.

December 30, 1983.

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Judith N. Renzulli, and Robert Aulgur, Jr., Wilson, Whittington & Auglur, Wilmington, Del., for plaintiff.

Thomas Reed Hunt, Jr., and Donald E. Reid, Morris, Nichols, Arsht & Tunnell, Wilmington, Del., for defendant.

OPINION

MURRAY M. SCHWARTZ, District Judge.

This is a civil action brought by a former employee of Hercules, Inc. under the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. §§ 621 et seq. (1976).¹ The parties raised five issues at a pretrial conference. These are: (1) whether plaintiff may proceed under a theory that he was victimized by a discriminatory reduction-in-force plan; (2) whether plaintiff must prove at trial that he was replaced by a younger employee; (3) whether testimony of similarly situated employees is admissible to prove age discrimination against plaintiff; (4) whether plaintiff can be equitably barred from recovery of damages because of misconduct during his term of employment; and (5) what definition of "willful" should apply for purposes of ADEA's liquidated damages provision and statute of limitations. Each issue will be discussed in turn.

I. The Viability of Plaintiff's Theory— Reduction-in-Force Under ADEA

Plaintiff J. Wayne Kneisley contends in his lawsuit that Hercules unlawfully attempted to force him to accept early retirement. Under the guise of a purportedly "voluntary" early retirement program, Kneisley alleges, Hercules forced Kneisley into retirement pursuant to an involuntary and discriminatory reduction-in-force scheme. Plaintiff asserts, in particular, that he and eleven other Hercules workers employed in the company's Organics Department received an ultimatum that they either accept retirement under a special early retirement plan or face demotion, reduction in pay, and diminished chances of career advancement. In his own case, Kneisley states, the Organics Department General Manager, Robert Leahy, threatened to cut Kneisley's salary and downgrade his job if he did not accept early retirement.

Kneisley does not contend that programs aimed at eliminating surplus or inefficient employees violate ADEA. He does contend, however, that if a program is aimed solely at older employees who are members of ADEA's protected class, then the program is unlawfully discriminatory. Because, plaintiff argues, Hercules singled out pension eligible workers who were all between the ages of 40 and 70, Hercules' reduction-in-force violated ADEA.

Defendant cannot dispute, and has not attempted to dispute, that ADEA prohibits a reduction-in-force that is intentionally targeted against older employees. See e.g., Coburn v. Pan American World Airlines, 711 F.2d 339 (D.C.Cir.), cert. denied, ___ U.S. ___, 104 S.Ct. 488, 78 L.Ed.2d 683 (1983); Massarsky v. General Motors Corp., 706 F.2d 111 (3d Cir.), cert. denied, ___ U.S. ___, 104 S.Ct. 348, 78 L.Ed.2d 314 (1983); Rose v. National Cash Register Corp., 703 F.2d 225 (6th Cir.), cert. denied, ___ U.S. ___, 104 S.Ct. 352, 78 L.Ed.2d 317 (1983); Hedrick v. Hercules, Inc., 658 F.2d 1088 (5th Cir.1981); Williams v. General Motors Corp., 656 F.2d 120 (5th Cir.1981), cert. denied, 455 U.S. 943, 102 S.Ct. 1439, 71 L.Ed.2d 655 (1982). Hercules disagrees, however, that Kneisley was affected by a reduction-in-force program. It contends that plaintiff's demotion was an individualized decision which was justifiable because of Kneisley's poor job performance. That Hercules happened to be offering a special early retirement program, and that Kneisley was advised of the program's availability at the same time as he was informed about his demotion, defendant argues, does not transform its handling of Kneisley's employment status into a case of illegal age discrimination.

Hercules' tactical trial position does not undercut plaintiff's right to advance his case. Plaintiff has chosen to pursue a theory linking Hercules' reduction-in-force with its early retirement program. Supporting plaintiff's theory is an inference which can be drawn from a May 16, 1977, memorandum from Mr. S.H. Hellekson to Hercules' general managers and directors of auxiliary departments. Hellekson instructed these administrators that in reducing "surplus personnel," an employee who is eligible for early retirement and "whose position or services you have determined to be unessential" should be offered a "special allowance in addition to his pension" as "an alternative to downgrading the employee." (Doc. 84, Exhibit C).

It is up to plaintiff to prove at trial his theory that a reduction-in-force was targeted against older employees. Hercules will have every opportunity to disprove that theory. For present purposes, however, Hercules' denial that its reduction-in-force was connected to action taken against Kneisley is irrelevant. Resolution of competing theories is left for trial.

II. Allocation of Proof.

The parties have briefed the more narrow question of what Kneisley's specific burden of proof should be at trial. Defendant contends that Kneisley must prove in his prima facie case that he was replaced by a younger person, while Kneisley argues that such proof need not be presented in a reduction-in-force case.

In assigning the plaintiff's burden of proof in ADEA cases the federal courts have borrowed from employment discrimination cases arising under Title VII. See Smithers v. Bailar, 629 F.2d 892, 894 (3d Cir.1980); Loeb v. Textron, Inc., 600 F.2d 1003, 1010 (1st Cir.1979); Rodriguez v. Taylor, 569 F.2d 1231, 1239 (3d Cir.1977), cert. denied, 436 U.S. 913, 98 S.Ct. 2254, 56 L.Ed.2d 414 (1978); Grant v. Gannett, Inc., 538 F.Supp. at 686, 688 (D.Del.1982). Where a plaintiff brings a disparate treatment case under ADEA or Title VII, he bears the ultimate burden of proving intentional discrimination by a preponderance of the evidence. Massarsky v. General Motors Corp., 706 F.2d at 117.

This discriminatory motive need not be proved by direct evidence. The Supreme Court in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973), held that the plaintiff may introduce such circumstantial evidence as to create a presumption of intentional discrimination. Id. at 802, 93 S.Ct. at 1824. At least in a refusal to hire case, the Supreme Court explained, a plaintiff can make out a prima facie case by proving by a preponderance of the evidence (1) that he was a member of the protected class; (2) that he applied for a job opening for which he was qualified; (3) that he was rejected despite his qualifications, and (4) that the position remained open and the employer continued to seek applicants with similar qualifications. Id. Once a plaintiff makes a prima facie showing of discrimination, the burden shifts to the employer to articulate a legitimate, nondiscriminatory reason for its action. Id. at 807, 93 S.Ct. at 1826. The employer must "produce admissible evidence which would allow the trier of fact rationally to conclude that the employment decision had not been motivated by discriminatory animus." Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 257, 101 S.Ct. 1089, 1095, 67 L.Ed.2d 207 (1980). If the defendant meets its burden of rebuttal, the plaintiff must then prove that the defendant's "asserted reason was merely a pretext for unlawful discrimination." Massarsky, 706 F.2d at 118.

Defendant, relying on McDonnell Douglas, contends that to meet his prima facie showing plaintiff must prove that he was replaced by a younger employee. Applying the McDonnell Douglas four-part formula, defendant explains that Kneisley must prove by a preponderance of the evidence that he (1) was a member of the protected class, (2) was qualified for his job, (3) was nonetheless fired and (4) was replaced by an employee outside of the protected class.

The McDonnell Douglas test, however, is not inflexible. It is not meant to be applied in a "rigid, mechanized or ritualistic" fashion. Furnco Construction Corp. v. Waters, 438 U.S. 567, 577, 98 S.Ct. 2943, 2949, 57 L.Ed.2d 957 (1978). As the Supreme Court has explained, the precise nature of a plaintiff's showing will vary with the circumstances of each case. McDonnell Douglas, 411 U.S. at 802 n. 13, 93 S.Ct. at 1824 n. 13.

Recognizing the flexibility of the McDonnell Douglas formula, the federal courts have all agreed that in cases alleging a discriminatory reduction-in-force, a variation of that formula must apply. See e.g. Coburn v. Pan American World Airways, 711 F.2d at 343; Massarsky v. General Motors Corp., 706 F.2d at 118 n. 13; McCorstin v. United States Steel Corp., 621 F.2d 749, 754 (5th Cir.1980). The Third Circuit Court of Appeals articulated its own modified formula for reduction-in-force cases in Massarsky v. General Motors Corp., 706 F.2d 111. "Because Massarsky's complaint concerned a reduction in force," the Court explained, "it obviously was unnecessary for him to follow the literal terms of the McDonnell Douglas model and show that he was actually replaced by a younger employee." 706 F.2d at 118 n. 13. A plaintiff alleging a discriminatory lay off, the Court stated, can "easily" make out a prima facie case by showing "only that he is a member of the protected class and that he was laid off from a job for which he was qualified while others not in the protected class were treated more favorably." Id. at 118.

Defendant attempts to dodge Massarsky by again characterizing plaintiff as a victim of an individualized demotion rather than a reduction-in-force. As stated above, however, this argument goes to trial strategy, not burden of proof. So long as plaintiff pursues his theory of the case as involving a discriminatory layoff, he need not introduce evidence of replacement by a younger employee. If the evidence at trial convinces the jury that...