Maxfield v. Sinclair Intern.

Decision Date03 July 1985
Docket NumberNo. 84-1518,84-1518
Citation766 F.2d 788
Parties38 Fair Empl.Prac.Cas. 442, 37 Empl. Prac. Dec. P 35,454 James L. MAXFIELD v. SINCLAIR INTERNATIONAL and David H. Sinclair, President of Sinclair International, Appellants.
CourtU.S. Court of Appeals — Third Circuit

Benjamin E. Zuckerman (argued), Sherr, Moses & Zuckerman, P.C., Norristown, Pa., for appellants.

Frank P. Murphy (argued), Murphy and Farrell, Norristown, Pa., for appellee.

Before HUNTER and SLOVITER, Circuit Judges, and COHEN, District judge. *

OPINION OF THE COURT

SLOVITER, Circuit Judge.

Plaintiff James L. Maxfield brought this action against Sinclair International and David H. Sinclair, its president, (jointly referred to as Sinclair), alleging that Maxfield's forced retirement on December 31, 1980, a month after his 65th birthday, violated the Age Discrimination in Employment Act (ADEA), 29 U.S.C. Sec. 621 et seq. (1982) (as amended). There was a bifurcated trial before a jury. The jury first found in Maxfield's favor on liability, and then, in the damages phase, awarded $33,398 for past damages and $7,500 for future damages through special interrogatories. On appeal, Sinclair contends that the evidence did not establish a prima facie case of discrimination and that the district court erred in various determinations with respect to damages. We will affirm.

I. FACTS

Maxfield was employed at Sinclair from 1940 until 1980, except for a three-year absence during World War II. He began working by servicing various parts manufactured and sold by Sinclair to paper mills, and was promoted in 1957 to a sales position which he retained until his termination.

At trial, Maxfield testified that the first time retirement was mentioned to him was the May before his 65th birthday when he went to the company headquarters to pay a condolence call on David Sinclair after the death of his father, the company's founder. Maxfield related the conversation as follows:

David said, "You are going to be 65 come the end of the year when you are going to retire."

I said, "No, I am not going to retire, David."

He said, "Yes, you are going to retire, Jim. We are going to retire you."

And I said, "Well, you can work until you are 70 now and that is my desire, to work until 70."

And he said, "Well, Jim, if you do not retire as we wish we will find reasons to retire you."

T. 1.29.

A month later, Maxfield learned that he would be replaced by Robert Dunlap, a 42 year old who had recently been promoted from serviceman to part-time salesman. Maxfield wrote to Sinclair protesting the company's decision to retire him and requesting a meeting to discuss the matter further. At a sales meeting held in September, Sinclair reiterated without giving any reasons that Maxfield was to be retired.

Maxfield followed that meeting with another letter, again requesting an explanation for the company's decision. Sinclair returned the original of the letter with a handwritten notation that read as follows:

Jim--You are beating a dead horse. I'm sorry you can't let it go and retire with dignity. I have protected you so you would have a chance to do that. Please accept the fact that it is time for a change. If you want to quit now let me know. If you want to continue to end year as agreed fine but I expect your full cooperation with Dunlap, Divine and all others. If you can't do that there is no sense in going on."

Signed Dave.

T. 1.41.

At the conclusion of plaintiff's case, defendants moved for a directed verdict, arguing that Maxfield had failed to establish a prima facie case because Maxfield was replaced by a person between the ages of 40 and 70 who was himself within the class protected by the ADEA. The district court denied the motion, holding that plaintiff need not prove replacement by a person outside the protected class and that the evidence was sufficient to permit the jury to find that Maxfield was terminated because he had reached his 65th birthday.

As its defense, Sinclair asserted that Maxfield was terminated because of unsatisfactory job performance. Sinclair confirmed that Maxfield was forced to retire and stated he had not been told that his poor performance over the past several years was the real reason for his termination to avoid upsetting him. Much of the trial was devoted to testimony about Maxfield's sales performance and a comparison of the performances of Maxfield and Dunlap.

At the conclusion of the liability phase of the bifurcated trial, the jury was instructed, inter alia, as follows:

I have already told you that the plaintiff bears the burden, bears the burden of proof, and he must prove by a preponderance of the evidence that he was prevented from continuing as an employee because of his age. Now, to satisfy this burden, the plaintiff must show that the plaintiff's age was a determining factor in the defendants' decision to retire him.

What do we mean by that? Well, that is the plaintiff must show that but for his age he would not have been retired.

Stated another way, the plaintiff must prove that age was a determining factor in the decision to retire him, and a determining factor is a factor considered by the employer which made a difference in the decision, and to go back to what I told you before, the plaintiff must show that but for his age he would not have been retired.

T. 4.154. The district court's explanation of plaintiff's burden of proof was a correct statement of the law of this circuit, see Bellisimo v. Westinghouse Electric Corp., No. 84-3375, 764 F.2d 175, 179 (3d Cir. June 11, 1985); Duffy v. Wheeling Pittsburgh Steel Corp., 738 F.2d 1393, 1395 (3d Cir.), cert. denied, --- U.S. ----, 105 S.Ct. 592, 83 L.Ed.2d 702 (1984); Smithers v. Bailar, 629 F.2d 892, 896 (3d Cir.1980), and Sinclair did not object. The jury returned answers to special verdict interrogatories, finding that "age was a determining factor in the defendants' decision to require [Maxfield] to retire" and that Maxfield failed to prove a willful violation of the ADEA. We turn first to Sinclair's claim that Maxfield failed to establish a prima facie case.

II. PRIMA FACIE CASE

Congress expressly set forth in the ADEA that its purpose in enacting the statute was "to promote employment of older persons based on their ability rather than age [and] to prohibit arbitrary age discrimination in employment." 29 U.S.C. Sec. 621(b). The statute makes it unlawful for a covered employer to discharge or involuntarily retire any individual below the age of 70 because of age. 29 U.S.C. Sec. 623(a). The plaintiff has the initial burden of offering evidence that is sufficient "to create an inference that an employment decision was based on a discriminatory criterion illegal under the Act." International Brotherhood of Teamsters v. United States, 431 U.S. 324, 358, 97 S.Ct. 1843, 1866, 52 L.Ed.2d 396 (1977) (construing Title VII, 42 U.S.C. Sec. 2000e et seq.). Plaintiff may satisfy that burden by offering direct or circumstantial evidence. Direct evidence would include statements by the employer to the employee that s/he was being fired because of age. Stanojev v. Ebasco Services, Inc., 643 F.2d 914, 921 (2d Cir.1981). Because such direct evidence will often be difficult to obtain, the guidelines used in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973), for establishing a prima facie case in Title VII cases have been adapted to ADEA cases. See Elliott v. Group Medical & Surgical Service, 714 F.2d 556, 565 & n. 11 (5th Cir.1983), cert. denied, --- U.S. ----, 104 S.Ct. 2658, 81 L.Ed.2d 364 (1984); Smithers v. Bailar, 629 F.2d 892, 894 (3d Cir.1980).

As originally articulated, the McDonnell Douglas test provided that a prima facie case of racial discrimination could be established by plaintiff showing (i) that he belongs to a racial minority; (ii) that he applied and was qualified for a job for which the employer was seeking applicants; (iii) that, despite his qualifications, he was rejected; and (iv) that, after his rejection, the position remained open and the employer continued to seek applicants from persons of complainant's qualifications.

411 U.S. at 802, 93 S.Ct. at 1824 (footnote omitted).

Sinclair argues that the fourth element of McDonnell Douglas requires proof in an ADEA case that the plaintiff was replaced by someone outside the protected class. No case holds that an ADEA plaintiff can recover only if s/he was replaced by someone younger than 40, and there is no reason to engraft the requirement on to the law. 1 In Smithers v. Bailar, the district court had determined that a prima facie case could be established by showing "that the position was ultimately filled by an employee who was younger than plaintiff." We quoted the district court without suggesting that the standard was incorrect. 629 F.2d at 895.

Courts that have addressed this issue squarely have universally permitted a prima facie case to be shown through proof that the favored person was younger than plaintiff. All have held that the replacement need not be younger than 40, the age at which ADEA protection begins. See Goldstein v. Manhattan Industries, Inc., 758 F.2d 1435 (11th Cir.1985); McCorstin v. United States Steel Corp., 621 F.2d 749, 753-54 (5th Cir.1980); cf. Haskell v. Kaman Corp., 743 F.2d 113, 119 n. 1 (2d Cir.1984) (McDonnell Douglas test framed as requiring proof of favorable treatment to a younger person rather than a person outside the protected class); Cuddy v. Carmen, 694 F.2d 853, 857 (D.C.Cir.1982) (same); Ackerman v. Diamond Shamrock Corp., 670 F.2d 66, 69 (6th Cir.1982) (same).

In Elliott v. Group Medical & Surgical Service, 714 F.2d 556, 562 (5th Cir.1983), cert. denied, 81 L.Ed.2d 364, 104 S.Ct. 2658, --- U.S. ---- (1984), the court held that the fourth element of the McDonnell Douglas test could be satisfied by proof of either replacement by someone outside the protected class or by someone younger or by...

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