Lytle v. Malady

Decision Date31 July 1997
Docket NumberDocket No. 102515,No. 16,16
PartiesNancy LYTLE, Plaintiff-Appellee, v. Michael MALADY and Howmet Corporation, Defendants-Appellants. Calendar
CourtMichigan Supreme Court

Bott & Spencer, P.C. by Timothy J. Bott, Muskegon, for Plaintiff-Appellant.

Varnum, Riddering, Schmidt & Howlett by Joseph J. Vogan and Paul M. Kara, Grand Rapids, for Defendants-Appellants.


RILEY, Justice.

In the matter now before us, this Court is asked to clarify the evidentiary threshold a discharged employee must satisfy in order to create a genuine issue of material fact when an employer asserts that its decision to discharge an employee was precipitated by business conditions. We are also asked to decide whether a discharged employee may challenge an employer's decision to reduce its work force charging discrimination, even when the reduction in work force (RIF) decision has been deemed bona fide.

We hold that even when an employer's RIF decision is concluded to be bona fide, an employee may still establish a genuine issue of material fact that the employer's justification for discharging him was not the true reason for its decision to discharge. We also hold that in order for a discharged employee to establish a genuine issue of material fact when an employer contends that its decision to discharge the employee was based on a work-force reduction, the employee may not merely rely on unsubstantiated allegations or denials in the pleadings. Rather, he must come forward with admissible evidence, affidavits, or other evidentiary materials, demonstrating the existence of a factual dispute that the employer's articulated reason was merely a pretext to discrimination.

In the instant case, we conclude that defendant's policy statement could have reasonably created a legitimate expectation of just- We affirm the decision of the Court of Appeals finding that plaintiff could have reasonably had a legitimate expectation of just-cause employment. We also affirm its ruling that plaintiff raised a genuine issue of fact with respect to whether defendant discriminated against her on the basis of her age, as well as its decision concluding that plaintiff raised a genuine issue of material fact regarding her claim of sex discrimination.

cause employment. We also conclude that defendant did have just cause to reduce its work force as a matter of law, but not with respect to this plaintiff. Rather, we hold that plaintiff did sufficiently establish a genuine issue of material fact regarding whether age was a determining factor in defendant's decision to discharge her. We also conclude that plaintiff presented evidence sufficient to establish a genuine issue of material fact regarding whether defendant considered her sex in its decision to discharge her.

I. Facts and Proceedings

On January 29, 1973, plaintiff Nancy Lytle was hired by defendant Howmet Turbine Components Corporation 1 as a general clerk in its human resources department, which at that time served all divisions making up the Whitehall operation. Plaintiff received a manual containing a statement of defendant's policies and procedures regarding employment. In the section containing defendant's policy regarding the relationship it sought with each of its employees, defendant expressed that a probationary period existed that afforded it time to decide whether it was in its interest as well as the employee's interest to continue the relationship following the probationary period. In that same section, the manual also stated that "[n]o employee will be terminated without proper cause or reason and not until management has made a careful review of all facts." The last two paragraphs of the manual stated:

The contents of this booklet are not intended to establish, and should not be interpreted to constitute any contract between the Misco Whitehill Division, Product Support Operations, Reactive Metal Operations or the Technical Center of Howmet Turbine Components Corporation and any employee, or group of employees.

For over twenty years we have concentrated on the production of the finest investment castings, with the development of policies and principles which aim at the attainment of pride in every day's work for every employee, plus the satisfaction of finding opportunities for individual growth and security. [Emphasis added.]

In 1981, defendant placed a disclaimer in its policy manual: "[T]he Company reserves the right to terminate employees without assigning cause; therefore, the employee serves at the will of the employer." Direct notification of the disclaimer was provided only to new employees, but plaintiff was involved in placing the disclaimer in new employee manuals.

At the time of plaintiff's hiring, John Ozar was the human resources director, serving as her immediate supervisor. Under Ozar's supervision, plaintiff received exemplary performance evaluations and was rewarded with a succession of promotions. In 1979, plaintiff spoke with Ozar about resigning and seeking employment elsewhere. Ozar assured plaintiff that her employment with defendant was secure and that she could expect advancement. Soon after that conversation, plaintiff was promoted to employment manager of the entire human resources department. Additionally, about the same time, Ozar hired Walter Boczkaja. Boczkaja became plaintiff's subordinate trainee. For approximately two years, Boczkaja trained under plaintiff, receiving promotions to various positions within the personnel department, and continued to be one of plaintiff's subordinates until 1989.

During the 1984-85 fiscal year, Ozar retired and was replaced by William Roof. In March 1987, Roof determined a need to decentralize the human resources department. He planned for each of the Whitehall divisions to have its own human resources representative. Roof hired defendant Michael A personality conflict between Malady and plaintiff soon developed. In June 1987, Malady requested all female employees under his supervision to wear dresses to a company picnic. Plaintiff wore slacks. Shortly thereafter, in September 1987, Malady submitted an unfavorable evaluation of plaintiff's job performance. 3

Malady to head the Whitehall Machine Products Division and to serve as plaintiff's supervisor. Plaintiff was reassigned to serve as human resources representative for defendant's Ti-Ingot Division. 2

In January 1989, on Malady's recommendation and with Roof's approval, plaintiff's job title was changed from human resources representative to human resources specialist. Plaintiff's duties, as well as her salary, remained the same. Malady suggests that the change was necessary to reduce the number of direct reports he had to address, in addition to "centraliz[ing] the total employment function under one person instead of having it split with two different people doing part of it." He also asserts that he had "some performance concerns ... with [plaintiff's] supervisory abilit[ies]," as reflected in his latest performance evaluation.

Plaintiff held her new position from January 1989, until her discharge on November 1, 1991.

Plaintiff contends defendant's policy manual created an expectation that her employment would not be terminated unless there was sufficient cause to do so. Also, she claims that she relied on verbal assurances by Ozar that her employment with defendant was secure.

Defendant argues that plaintiff was terminated pursuant to a company-wide reduction in work force. Defendant asserts that as a result of declines in military spending and a downturn in the commercial airline industry between 1988 and 1991, it was forced to institute a series of reductions in its work force. Defendant suggests that it initially sought to cut costs in the 1992 budget without terminating any employees. In an August 21, 1991, intracompany memorandum to all the personnel support departments, 4 Dr. Thomas Wright, vice president in charge of the Whitehall operations, directed all department supervisors to cut their respective 1992 budgets by fifteen percent. 5

At the same time reductions were being sought, defendant was embarking on a plan that would use work cells as the primary facility structure, where employees would be working in teams instead of in the traditional hierarchial order. Notwithstanding the fact that he had to eliminate fifteen percent of his projected 1992 budget, Roof was told by the Operhall management to somehow compile a list of employees from the human resources department to head an independent department. From that list someone was to be selected to oversee the development of the work-cell plan.

After reviewing the qualifications of those listed, Operhall management identified Malady and Boczkaja as the two most promising candidates. Malady was not available and Boczkaja, who was interviewed by Operhall management, later decided to stay on in his current position. Then Roof went to the private sector and found Andrea Achterhoff. 6 She was thirty-one years old and had previous experience as a production supervisor, personnel manager, and human resources manager. Plaintiff never was interviewed for the position.

By November 1, 1991, in an effort to comply with Wright's mandate, Roof had eliminated The same day plaintiff was discharged, defendant hired Jeff Billingsley to work in the training program for the work-cell project. As far as plaintiff understood, Billingsley "worked for the corporate office" and was merely assigned to take an office where plaintiff previously worked so that he would have a place to work. Moreover, plaintiff admitted that she had no idea how Whitehall's operation budget and personnel were allocated among all the Pechiney subsidiaries.

                approximately $300,000.  Roof needed to cut $439,950 in costs in order to meet Wright's directive of a fifteen-percent reduction in expenditures for the human resources department's 1992

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