Mattenson v. Baxter Healthcare Corp.

• Decision Date: 21 February 2006
• Docket Number: No. 04-4331.,No. 04-4270.,04-4270.,04-4331.
• Citation: 438 F.3d 763
• Parties: Charles R. MATTENSON, Plaintiff-Appellee/Cross-Appellant, v. BAXTER HEALTHCARE CORPORATION, Defendant-Appellant/Cross-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 763

438 F.3d 763

Charles R. MATTENSON, Plaintiff-Appellee/Cross-Appellant, v. BAXTER HEALTHCARE CORPORATION, Defendant-Appellant/Cross-Appellee.

No. 04-4270.

No. 04-4331.

United States Court of Appeals, Seventh Circuit.

Argued September 9, 2005.

Decided February 21, 2006.

COPYRIGHT MATERIAL OMITTED

William G. Sullivan (argued), Martin, Brown & Sullivan, Chicago, IL, David M. Mattenson (argued), Kanter, Mattenson, Morgan & Gordon, Chicago, IL, for Plaintiff-Appellee.

James S. Whitehead (argued), Sidley Austin Brown & Wood, Chicago, IL, for Defendant-Appellant.

Before BAUER, POSNER, and WOOD, Circuit Judges.

POSNER, Circuit Judge.

Mattenson, a patent lawyer, brought suit against his former employer, Baxter Healthcare, under the Age Discrimination in Employment Act. The jury found in Mattenson's favor and awarded him more than half a million dollars in back pay, which the judge then doubled, in accordance with the statute, because the jury had found that the violation of the ADEA was willful. But he refused to award front pay, precipitating Mattenson's cross-appeal.

Mattenson was 51 years old when he was fired in 2001 after having worked for Baxter for 14 years. In asking the jury to infer that he was fired because of his age, Mattenson emphasized that he was fired just 10 days before his early-retirement benefits would have vested; that he was replaced by a much younger man at a higher salary ($258,000 versus his salary of $240,000); that during his entire 14 years of employment by Baxter all his semi-annual performance evaluations (until the last, which was only a few months before his termination) had stated that he was meeting expectations; that his superiors had pretended that his termination was voluntary on his part and thus were unworthy of belief concerning the reason for his termination; and that three other employees of the division in which Mattenson worked (the Renal Division, which manufactures nondrug products for the treatment of kidney failure) had been fired in circumstances strongly suggestive of age discrimination. It is uncertain whether one of the three was actually employed by the Renal Division or merely worked closely with the division's employees, but nothing turns on the answer to that question.

Baxter's principal defense in the district court was that Mattenson had quit rather than having been fired. But the company mentioned a history of performance failures that would have justified firing him, culminating in his missing patent-filing deadlines in Japan and Brazil that resulted in the company's failing to obtain patent protection in those countries for one of its new products. Baxter attributed the failure to Mattenson's poor communication with his paralegals and with the company's scientists whose inventions he sought patents for. Had the jury believed the evidence, it would probably have concluded that, if he was fired (as the evidence strongly suggested), it was for doing a poor job rather than for being on the verge of obtaining vested early-retirement benefits or because of some generalized dislike of older employees.

Mattenson's principal tactic for persuading the jury not to credit the evidence of his deficient performance was to emphasize his unbroken stream of "meets expectations" evaluations until the last. Until then, his lawyer told the jury in opening argument, Mattenson "had received nothing but reviews that say meets expectations, meets expectations, meets expectations in every area all the time." "[M]eets expectations," the lawyer said, means that an employee "operate[s] at the highest level of their profession." These statements, and the testimony that Mattenson gave in support of them, were misleading. For in 1996 Mattenson had been placed on a "performance" plan because of problems of communication.

The district judge refused to allow Baxter to place the plan in evidence or make any reference to it. The judge's ground was that it was remote in time and different in grounds from Mattenson's termination. It was neither. The 1996 plan lists Mattenson's "developmental needs" as needing to avoid "derogatory, condescending or disrespectful behavior," "verbosity," and "not being careful or thoughtful in interacting with others." Under the heading of "desired results," the plan specifies that "communication will be perceived as clear and concise." The plan states that "failure to achieve and maintain the performance standards outlined above will lead to additional disciplinary action, up to and including immediate termination." Baxter contends that it was problems of communication with scientists and paralegals that resulted in the missed patent deadlines that led to subjecting Mattenson to the second performance plan.

The judge's error was compounded by the fact that Mattenson's termination was precipitated by his refusal to comply with the second plan. Baxter argued that it was that refusal, not anything to do with his age, that caused his termination; and a refusal to comply with the lawful order of one's employer is indeed not conduct protected by the age discrimination law. E.g., Cengr v. Fusibond Piping Systems, Inc., 135 F.3d 445, 452 (7th Cir.1998); Coco v. Elmwood Care, Inc., 128 F.3d 1177, 1180 (7th Cir.1997); Machinchick v. PB Power, Inc., 398 F.3d 345, 354 (5th Cir.2005). Mattenson's riposte was that the purpose of the (second) performance plan "was to put him out the door, or, if he said he'd go along with them, to put him out the door in six months or three months." But when he was put on the plan, he had already been employed for five years after being put on a similar plan. Had Baxter been permitted to present the 1996 plan to the jury, the company's contention that Mattenson was fired for refusing to comply with the second plan would have been greatly strengthened. And since Mattenson successfully completed the 1996 plan, presenting it to the jury would also have undermined his claim that Baxter always fires employees it places on performance plans. The claim was important because, if true, it implied that Mattenson's failure to complete the second performance plan could not have been a factor in his being fired.

It was a close case; the judge's error entitles Baxter to a new trial. There were other errors as well, which should be corrected on remand. The judge on his own initiative gave a McDonnell Douglas instruction despite tireless repetition by appellate courts that the burden-shifting formula of that case is not intended for the guidance of jurors; it is intended for the guidance of the judge when asked to resolve a case on summary judgment. E.g., St. Mary's Honor Center v. Hicks, 509 U.S. 502, 510-12, 113 S.Ct. 2742, 125 L.Ed.2d 407 (1993); Hennessy v. Penril Datacomm Networks, Inc., 69 F.3d 1344, 1350 (7th Cir.1995); Sanders v. New York City Human Resources Administration, 361 F.3d 749, 758 (2d Cir.2004); Watson v. Southeastern Pennsylvania Transportation Authority, 207 F.3d 207, 221 (3d Cir. 2000).

The judge compounded the error by instructing the jury that if Mattenson "has established each of the essential elements of his claim, then you will consider the defense alleged by Baxter Healthcare Corporation that the treatment of Charles Mattenson was for a reasonable factor other than age." Wyninger v. New Venture Gear, Inc., 361 F.3d 965, 979 (7th Cir. 2004); Partington v. Broyhill Furniture Indus., Inc., 999 F.2d 269, 271 (7th Cir. 1993); Keyes v. Secretary of Navy, 853 F.2d 1016, 1026 (1st Cir.1988); see Smith v. City of Jackson, 544 U.S. 228, 125 S.Ct. 1536, 1543-44, 161 L.Ed.2d 410 (2005) (plurality opinion). This was the equivalent of saying that Mattenson was a tenured employee who could therefore be fired only for cause; in fact he was an employee at will who could be fired for any reason not forbidden by the age discrimination law, such as failing to trim his mustache or eating with his fork in his left hand.

A related error was to instruct the jury that it "must determine whether or not [Mattenson's termination] is legitimate or only a pretext for age discrimination," the implication being that proof of pretext compels, rather than merely permits, an inference of discriminatory intent. The Supreme Court held in St. Mary's Honor Center v. Hicks, supra, that proof of pretext does not compel an inference of discriminatory intent. "[T]he real reasons behind an employer's action may be shameful or foolish, but unrelated to ... discrimination, in which event there is no liability." Rudin v. Lincoln Land Community College, 420 F.3d 712, 726 n. 9 (7th Cir.2005); Anderson v. Baxter Healthcare Corp., 13 F.3d 1120, 1124 (7th Cir.1994). After all, there are all sorts of bad reasons for an employment action besides discriminatory reasons, and an employer might want to conceal the bad but nondiscriminatory reason for its firing or taking other adverse action against the plaintiff, in order to avoid bad publicity.

Another trial error, this one relating to whether Mattenson quit because he didn't want to comply with the performance plan, or was fired, was the judge's failure to shield any part of the notes taken by Baxter's chief employment lawyer, Stephanie Bradley, from discovery and use at trial. The work-product doctrine shields materials that are prepared in anticipation of litigation from the opposing party, on the theory that the opponent shouldn't be allowed to take a free ride on the other party's research, or get the inside dope on that party's strategy, or (as attempted here) invite the jury to treat candid internal assessments of a party's legal vulnerabilities as admissions of guilt. United States v. Nobles, 422 U.S. 225, 236-38, 95 S.Ct. 2160, 45 L.Ed.2d 141 (1975); United States v. Frederick, 182 F.3d 496, 500 (7th Cir.1999).

Two of Mattenson's superiors, after deciding to put him on the (second) performance plan, met with lawyer Bradley, ostensibly to learn how to do this; that is implausible, and the jury was...