Kulling v. Grinders for Industry, Inc.

• Citation: 115 F.Supp.2d 828
• Decision Date: 01 October 2000
• Docket Number: No. 99-74339.,99-74339.
• Parties: Laverne KULLING, individually and as personal representative of the estate of Carl G. Kulling, Richard A. Beal, and William A. Scheib, Plaintiffs, v. GRINDERS FOR INDUSTRY, INC., and Toyoda Machinery U.S.A. Corporation, Defendants.
• Court: U.S. District Court — Eastern District of Michigan

115 F.Supp.2d 828

Laverne KULLING, individually and as personal representative of the estate of Carl G. Kulling, Richard A. Beal, and William A. Scheib, Plaintiffs, v. GRINDERS FOR INDUSTRY, INC., and Toyoda Machinery U.S.A. Corporation, Defendants.

No. 99-74339.

United States District Court, E.D. Michigan, Southern Division.

October 1, 2000.

Jaimie R. Goodman, Detroit, MI, for Plaintiffs.

Steve J. Weiss, Bloomfield Hills, MI, for Defendants.

OPINION AND ORDER REGARDING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

ROSEN, District Judge.

I. INTRODUCTION

Plaintiffs Laverne Kulling, Richard A. Beal, and William A. Scheib brought suit in this Court on September 3, 1999, alleging that Plaintiffs Beal and Scheib and Plaintiff Kulling's late husband, Carl G. Kulling, were unlawfully discharged from their employment with Defendant Toyoda Machinery U.S.A. Corporation ("Toyoda") and its wholly-owned subsidiary, Defendant Grinders For Industry, Inc. ("GFI"), in violation of the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. § 621 et seq. Plaintiff Kulling also has asserted a derivative claim for loss of consortium, as well as a derivative claim as personal representative of the estate of Carl Kulling, seeking additional monetary damages under Michigan's wrongful death statute, Mich.Comp.Laws § 600.2922, for Mr. Kulling's suicide just over two months after Defendants terminated his employment.

By motion filed on May 19, 2000, Defendants now seek an award of summary judgment in their favor on all of Plaintiffs' claims.¹ In support of this motion, Defendants argue (i) that the challenged employment actions were part of a reduction-in-force ("RIF") undertaken for purely economic reasons, and were not motivated by improper considerations of age; and (ii) that Plaintiffs have failed to establish a sufficient causal connection between Carl Kulling's discharge and his subsequent suicide to warrant an award of wrongful death damages. Plaintiffs responded to this motion on June 13, 2000, and Defendants filed a reply brief in further support of their motion on June 28, 2000.² Finally, on August 4, 2000, the parties filed supplemental briefs addressing various legal issues surrounding Plaintiff Kulling's request for wrongful death damages.

On July 27, 2000, the Court heard oral argument on Defendants' motion. Having reviewed the briefs and supporting materials submitted by the parties, and having considered the arguments of counsel at the July 27 hearing, the Court is now prepared to rule on this motion. This Opinion and Order sets forth the Court's ruling.

II. FACTUAL AND PROCEDURAL BACKGROUND

A. The Parties

Defendant GFI is a wholly-owned subsidiary of Defendant Toyoda, which purchased GFI in 1987. GFI is part of the Grinding Machine Division ("GMD") of Toyoda, and is in the business of re-manufacturing and rebuilding used grinders. Plaintiffs Beal and Scheib and the late husband of Plaintiff Kulling, Carl Kulling, all were employed by GFI prior to its acquisition by Toyoda, and they continued as employees at Defendants' facility in Wixom, Michigan following this acquisition.³

Each Plaintiff held a supervisory middle-management position at the time he was discharged on November 7, 1997. Carl Kulling began working for GFI on November 9, 1972 as an Electric Panel Builder, and held the position of Shipping and Receiving Supervisor at the time of his discharge. Plaintiff Beal was first employed by GFI in December of 1972, and had the title of Purchasing Manager in November of 1997. Plaintiff Scheib began working for GFI in January of 1985, and was employed as Manager of Mechanical Engineering at the time of his discharge. All three Plaintiffs were over the age of 50 when they were discharged — Carl Kulling was 60, Richard Beal was 53, and William Scheib was 60.

B. The Circumstances Surrounding Plaintiffs' Discharges

According to Defendants, Plaintiffs were terminated pursuant to a reduction-in-force ("RIF") carried out by Defendants in late 1997 and early 1998. Toyoda's president, Howard Michael, testified at his deposition that Defendants' GMD had sustained losses the previous few years, and that he elected to reduce this division's workforce by twenty employees in order to avoid shutting down the division altogether. Michael instructed Gary Blanchard, the vice president and general manager of GMD, to implement this RIF. Blanchard, in turn, consulted with GFI's senior director of operations, Paul Lefief, and GFI's director of engineering, Eddie McClymont, regarding the selection of the 20 employees to discharge.

Paul Lefief recommended that the supervisory positions held by Carl Kulling and Plaintiff Beal be eliminated. He testified that, in making these decisions, he "looked at the position that they played in the structure, if I had another manager that could do their job, I looked at how many people reported to them." (Defendants' Motion, Ex. 3, Lefief Dep. at 17.) In both cases, Lefief testified that he had identified one or more existing employees who could assume the functions previously performed by Kulling and Beal. Lefief denied that age, years of service, salary, or proximity to retirement played any role in his recommendations. (Id. at 17-18.)

For his part, Eddie McClymont suggested to Gary Blanchard that Plaintiff Scheib's position be eliminated. In his affidavit, McClymont states that he determined that the Engineering Department could afford to eliminate a management position, and that Scheib was the "logical choice because he was the only one at management level in the mechanical engineering section." (Defendants' Motion, Ex. 4, McClymont Aff. at ¶ 6.) McClymont further states that he assumed Scheib's management responsibilities, and that two other employees were assigned to handle Scheib's remaining duties in addition to their existing job functions.

The first set of terminations occurred on November 7, 1997, and included all three Plaintiffs. Each Plaintiff executed a "Severance Agreement and General Release," (Defendants' Motion, Ex. 5), and each received severance pay.⁴ In all, five salaried employees were discharged on November 7, 1997 as part of Defendants' RIF plan for the GMD, and two more salaried employees were discharged in January of 1998 pursuant to this plan.⁵ Each of these seven discharged employees was over 50 years of age, leaving 19 remaining salaried employees over the age of 50. In contrast, the RIF did not affect any of Defendants' 43 salaried employees under the age of 50.

The parties dispute Defendants' stated economic basis for implementing a RIF. As noted earlier, Toyoda's president, Howard Michael, testified that Defendants' GMD had sustained losses for a number of years prior to and including 1997, that orders were down, and that the types of orders coming in were unprofitable. Plaintiffs, however, point to Michael's testimony that his bonuses were tied to the profitability of GFI, and that he received bonuses of $60,000 to $75,000 in January and July of 1998. Plaintiffs also cite financial data received from Defendant, reflecting increases in GMD's total sales and operating margin from 1996 to 1997, as well as a 31.5% increase in Toyoda's over-all sales between March of 1994 and March of 1998. (See Plaintiffs' Response, Ex. U.) These materials also indicate that GMD suffered from manpower shortages in 1997 in its engineering and manufacturing departments.

The parties also dispute whether Plaintiffs' positions were eliminated, or whether Plaintiffs actually were replaced by others performing essentially the same tasks. Plaintiffs concede that no new employees were hired to assume their former job responsibilities, and that existing employees took on these duties. Yet, while Defendants maintain that several existing employees assumed Plaintiffs' various job functions in addition to their current duties, Plaintiffs contend that Defendants made one-for-one exchanges, in each case replacing one of the Plaintiffs with a substantially younger employee. In support of this assertion, Plaintiffs rely principally on interrogatory responses in which Defendants identified three specific individuals — Gordon Roe, Scott Miller, and Shawn Schultz — as the "[r]eplacement person[s]" for the three Plaintiffs, while others who also were discharged as part of the RIF are not listed as having been replaced by a particular existing employee. (See Plaintiffs' Response, Ex. B, interrogatory responses.)⁶ Plaintiffs also point to evidence that the three "replacement" employees, all of whom were age 40 or younger, all were promoted to supervisory positions within a short time after Plaintiffs were discharged. This seemingly casts doubt on Defendants' claim that Plaintiffs' positions were eliminated as unnecessary, with their duties spread among several remaining employees.

Finally, each Plaintiff has testified as to allegedly age-based comments made by Defendants' management when called upon to explain the challenged employment decisions. Richard Beal testified that, upon learning of his discharge, he was told by Paul Lefief that he was "the first of a number of retirement age employees being let go." (Plaintiffs' Response, Ex. C, Beal Dep. at 64.) William Scheib testified that Eddie McClymont advised him of his termination, and further stated that there was a "corporate plan by Howard Michael and Gary Blanchard to bring ... the younger employees up the ladder." (Plaintiffs' Response, Ex. D., Scheib Dep. at 59.) Similarly, Laverne Kulling testified that she met with Gary Blanchard on the day her husband was discharged, and that Blanchard told her that "the company was downsizing, and they were letting go of the older, more senior people." (Plaintiffs' Response, Ex. A, Kulling Dep. at 108.)⁷ Defendants, however, have produced deposition testimony and affidavits denying that these statements were made.

C. Carl Kulling's Suicide Following His Discharge

As noted earlier, Plaintiff Laverne...