Maschka v. Genuine Parts Co.

• Decision Date: 11 August 1997
• Docket Number: Nos. 96-3311,96-3427 and 96-3429,s. 96-3311
• Citation: 122 F.3d 566
• Parties: 74 Fair Empl.Prac.Cas. (BNA) 1035, 74 Empl. Prac. Dec. P 45,623 Aloysius L. MASCHKA, Appellee/Cross-Appellant, v. GENUINE PARTS COMPANY, doing business as Napa Auto Parts, Appellant/Cross-Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 566

122 F.3d 566

74 Fair Empl.Prac.Cas. (BNA) 1035,

74 Empl. Prac. Dec. P 45,623

Aloysius L. MASCHKA, Appellee/Cross-Appellant, v. GENUINE PARTS COMPANY, doing business as Napa Auto Parts Appellant/Cross-Appellee.

Nos. 96-3311, 96-3427 and 96-3429.

United States Court of Appeals Eighth Circuit.

Submitted May 22, 1997.

Decided Aug. 11, 1997.

Robert N. Godfrey, Atlanta, GA, argued (Craig P. Siegenthaler, Atlanta, GA, on the brief), for Appellant/Cross-Appellee.

Thomas J. Young, Omaha, NE, argued, for Appellee/Cross-Appellant.

Before RICHARD S. ARNOLD, Chief Judge, BOWMAN and MORRIS SHEPPARD ARNOLD, Circuit Judges.

RICHARD S. ARNOLD, Chief Judge.

After Genuine Parts Company (GPC) demoted him, Aloysius Maschka resigned, and brought this action under the Age Discrimination in Employment Act, 29 U.S.C. §§ 621-34 (ADEA), and the Nebraska Act Prohibiting Unjust Discrimination in Employment Because of Age, Neb.Rev.Stat. §§ 48-1001 to -1010. A jury returned a verdict in Maschka's favor and awarded damages for back pay. The District Court ¹ denied GPC's motions for judgment as a matter of law and for a new trial, and awarded Maschka various forms of equitable relief, including an order for reinstatement to his original position. GPC appeals, and Maschka cross-appeals on certain issues. For the most part, we affirm.

I.

Genuine Parts Company (GPC), which does business as Napa Auto Parts, sells automotive parts both at retail, directly to consumers, and wholesale, to garages, service stations, and companies with large parts requirements. Aloysius Maschka worked since 1956 at one of GPC's distribution centers, in Omaha, Nebraska, as a member of the "outside" sales force, which is responsible for GPC's sales to wholesale and commercial purchasers. These salesmen receive commissions on the basis of their sales. In January 1993, GPC removed ² Maschka and another person from the outside sales force, but offered both men non-commission sales positions in a local GPC retail store.

The "inside" sales position that Maschka assumed paid an hourly wage, at a rate which left Maschka with greatly diminished annual earnings. Shortly after starting in the new position, a personnel manager for GPC told Maschka that his pension benefits would decline substantially if he remained working there, because his benefits were calculated on the basis of his recent salary history. (This information proved not to be accurate. Maschka's pension benefits were calculated on the basis of the best five years of earnings in his most recent ten years. Therefore, his benefits would not have been substantially affected by the change in position until five years later.) Maschka resigned from the new position in April 1993 and took a similar, but better paying, job at another company. He then brought this lawsuit.

At trial, Maschka adduced evidence that he was, at age 55, the oldest person on the outside sales force before he was removed from that position. The other person removed was 51. Of the seven salesmen remaining, one was 51, two were in their young forties, and four were 36 or younger. Maschka also produced evidence that GPC filled these positions with two people under the age of 40, although GPC contended that the positions filled were different.

GPC responded to Maschka's prima facie case with an explanation that it had decided to reduce the size of its outside sales force, and that Maschka's relatively poor performance in developing sales was the reason he was selected for removal. GPC explained that it wished to reduce its outlays for outside sales salaries, and doing so required the elimination of two positions. In choosing whom among the nine salesmen to remove, GPC said it excluded one person from consideration because he had specialized expertise in selling paint, an area in which GPC particularly wished to increase its market share. Of the remaining eight salesmen, GPC determined that Maschka had had the lowest sales volume in three of the previous five years and the second lowest the other two. Moreover, Maschka had obtained the second fewest new accounts of any salesman in 1992. Finally, GPC pointed to complaints about Maschka's poor customer service to justify its assessment that he was one of the two worst salesmen on the force. GPC also explained that the two people newly hired were in different, non-commission positions, with different duties, and therefore were not replacements.

Maschka rebutted GPC's explanation in an effort to prove that GPC's profferred reasons for its decision were pretextual. First, he demonstrated that there was minimal evidence that GPC's headquarters had directed the reduction in staff. The Omaha branch's general manager's testimony about what GPC's management had said was the only evidence presented that GPC's upper management had ordered the staff reduction. GPC introduced no corroborating documents or testimony. Despite this manager's contention that a business downturn was the reason for the terminations, Maschka pointed out that GPC had not demonstrated any substantial decline in business that would explain the need for a reduction in personnel. Furthermore, because Maschka and his co-worker remained, and two new people were hired, there was a net increase in employees. Maschka also pointed out that GPC's removals on the alleged basis of merit were inconsistent with the company's policy, as detailed in its handbook, to terminate in reverse order of seniority when staff reductions were necessary. Finally, Maschka demonstrated that the two new salespeople GPC had hired handled accounts that once had been handled by members of the outside sales force. Consequently, even if the exact positions were not filled, the newly hired younger workers were, in essence, replacements for Maschka and his co-worker.

Maschka also challenged GPC's explanation of the procedure it used to determine which salesmen had the greatest merit. Maschka first argued that GPC's justification for excluding the paint specialist made little sense in light of two facts: first, the specialist resigned in February 1993, yet was not replaced (although GPC did subsequently assign many of the paint specialist's tasks to a non-commission employee), which would be odd if GPC was genuinely seeking to increase its paint-market presence; second, this explanation was not among those provided to the Nebraska Equal Opportunity Commission (NEOC) in a letter of explanation sent on behalf of GPC. He argued that this evidence created another reason to disbelieve the veracity of GPC's proffered decision-making criteria.

Maschka then showed that GPC's sales-volume comparison was also suspect. GPC's explanation at trial was that it looked at overall sales volume in making its decision, whereas its letter to the NEOC stated that it had looked only at sales volume in new accounts. More importantly, Maschka had never had the lowest amount of sales in the years considered, and was in some years third or fourth from the bottom. Maschka argued that GPC created exceptions to its "rule" for the paint specialist, whom GPC exempted from consideration for firing, and who was below Maschka in sales during the two years they were salesmen together. Maschka also demonstrated that another salesman, whose sales were less than Maschka's, had not been considered deficient in the total-sales category because he was relatively new, and therefore expected not to have sales as large. He pointed to this circumstance as another suspicious exception to GPC's claimed decision criteria.

Third, Maschka rebutted GPC's explanation that he had the lowest number of accounts on the sales force by demonstrating that other evidence showed that he actually had more accounts than the figures presented by GPC indicated. Fourth, Maschka demonstrated that GPC did not keep regular records of how many new accounts each salesman obtained, which called into question GPC's explanation that it considered his low number of new accounts to provide partial justification for his termination. Fifth, Maschka presented company records that showed that he was not at the bottom of the rankings in making his sales quota, a statistic which compares a salesman's performance in a year to his sales in the previous year, as GPC contended he was. Finally, Maschka showed that GPC had never told him that his customer-service skills needed improvement, despite GPC's contention that this was one of the reasons for his termination. In summary, Maschka argued that GPC changed its explanation over time so that it could coherently explain its decision to remove him and his co-worker, but that the proffered justifications reeked of after-the-fact rationalization.

The jury returned a verdict for Maschka, and found that GPC's discrimination was willful. The jury awarded back-pay damages totalling $50,900.81. The District Court denied GPC's motions for judgment as a matter of law and for a new trial. The District Court then ordered GPC to reinstate Maschka, or to pay him until reinstatement the difference between what his 1996 salary would have been at GPC and what he actually was receiving from another employer. It also ordered GPC to credit Maschka's pension retroactively as if he had remained in the outside-sales position. Finally, the Court awarded $50,900.81 in liquidated damages based on the jury's finding that the violation of the ADEA had been willful. GPC then took this appeal.

II.

GPC appeals the finding of liability on several grounds. Its principal contention is that the evidence is insufficient to prove that it took its action against Maschka because of his age. It also appeals the admission into evidence of GPC's letter to the NEOC and the jury's finding that Maschka was constructively discharged from the inside sales position. We consider each question separately.

A.

GPC contends that it was error for the court to admit Exhibit 1, which was a letter sent by GPC's counsel to the NEOC that...