Morgan v. A.G. Edwards & Sons, Inc.

• Decision Date: 17 May 2007
• Docket Number: No. 06-2107.,06-2107.
• Citation: 486 F.3d 1034
• Parties: Marlow MORGAN, Appellant, v. A.G. EDWARDS & SONS, INC., Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

486 F.3d 1034

Marlow MORGAN, Appellant, v. A.G. EDWARDS & SONS, INC., Appellee.

No. 06-2107.

United States Court of Appeals, Eighth Circuit.

Submitted: November 15, 2006.

Filed: May 17, 2007.

Beth M. Deere, argued, Little Rock, AR (Philip S. Anderson, Little Rock, AR, on the brief), for appellant.

Philip E. Kaplan, argued, Little Rock, AR, for appellee.

Before RILEY, HANSEN, and SMITH, Circuit Judges.

RILEY, Circuit Judge.

Marlow Morgan (Morgan) appeals the district court's¹ adverse grant of summary judgment on Morgan's claim under the Age Discrimination in Employment Act of 1967 (ADEA), 29 U.S.C. §§ 621 to 634. We affirm.

I. BACKGROUND

In 1971, Morgan began working as a stockbroker for A.G. Edwards & Sons, Inc. (A.G. Edwards), an investment firm headquartered in St. Louis, Missouri. Over the years, Morgan was promoted several times, culminating with his promotion in 1978 to regional manager of A.G. Edwards's Southern Region. As a regional manager, Morgan's responsibilities included supervising fifty-two branches and branch managers in five states, opening new branches, recruiting new financial consultants and branch managers, addressing compliance and legal issues within his region, and being responsible for the profitability of branches under his supervision.

In March 2001, Robert Bagby (Bagby) was appointed A.G. Edwards's CEO. At the time of Bagby's promotion, the stock market industry was suffering and undergoing significant changes, and became even more volatile following the terrorist attacks of September 11. During this time period, several large corporations were investigated for corrupt business practices, resulting in significant losses for stockholders, greater scrutiny by regulators, and the devotion of more time and resources to addressing compliance and legal issues. See generally Sarbanes-Oxley Act of 2002, 15 U.S.C. §§ 7201 to 7266 (effective July 30, 2002).

As a result of these market conditions, A.G. Edwards suffered a 74% decline in profits in 2001 and decided to implement a reduction-in-force (RIF) in 2002 to reduce costs. The first phase of the RIF was a voluntary severance incentive plan (VSIP). On February 26, 2002, A.G. Edwards offered the VSIP to select non-branch employees, including regional managers such as Morgan, who were age 50 or older and had at least fifteen years of service. The VSIP gave employees the opportunity to terminate their employment voluntarily in exchange for certain severance benefits, which included one year's salary, a lumpsum bonus payment, health coverage and basic group life insurance for one year, and the right to continue to vest in an unvested portion of deferred compensation. Under the terms of the offer, employees had forty-five days to elect whether to terminate employment and accept the VSIP package, and had an additional seven days to revoke that acceptance.

Approximately eighty employees accepted the VSIP; Morgan did not. Immediately thereafter, A.G. Edwards implemented an involuntary severance program. Morgan was not among the individuals selected for termination under this program.

As a regional manager, Morgan prided himself in exhibiting a "hands-off" management style. He characterized his management practice as hiring good branch managers and letting them run their own branches. Some supervisors and branch managers enjoyed Morgan's "hands-off" style of management. Others sought more guidance and input from Morgan, and complained Morgan seldom was in his own office, was difficult to reach by telephone, and rarely visited his branches.

During Morgan's tenure, Morgan's supervisors instructed Morgan to visit his branches more frequently and to maintain regular office hours.² Bagby, while serving as director of branches and Morgan's supervisor, discussed performance issues with Morgan on at least one occasion, noting Morgan's poor office attendance and inaccessibility by telephone. Morgan attributed these problems to his temporary involvement with the construction of his new home.

Marty Altenberger (Altenberger), who served as a branch administrator, acted as liaison between the branches and A.G. Edwards's home office. During the time Altenberger worked in Morgan's region, Altenberger became increasingly frustrated with Morgan's lack of involvement with branch managers. Branch managers would call Altenberger seeking approval in hiring decisions when they could not get in touch with Morgan. According to Altenberger, he regularly fielded questions from Morgan's branch managers about issues Altenberger did not have the authority to handle, such as compensation and hiring deals. Altenberger informed Morgan some branch managers had complained about Morgan's inaccessibility and failure to visit the branches, and Altenberger encouraged Morgan to make more frequent visits. According to Altenberger, Morgan responded he had "been around long enough that he's earned the right not to have to visit the branches."

Altenberger informed Rob Pietroburgo (Pietroburgo), Morgan's supervisor, about Morgan's lack of accessibility and Altenberger's frustration in spending time responding to inquiries from branch managers. At the time, Pietroburgo had been involved in resolving problems in Morgan's region, which included issues related to the opening of an office in Somerset, Kentucky. Pietroburgo believed many of these problems with the Somerset office could have been avoided or minimized if Morgan had been more involved.

In March 2003, Pietroburgo informed Morgan he needed to improve his performance and become more involved with his branches. Between March and July 2003, Pietroburgo began documenting issues as they arose and having discussions with Morgan. In July 2003, Pietroburgo received a report regarding Morgan's performance at an annual meeting held by Morgan for branch managers and brokers. Altenberger attended the meeting, and believed Morgan was not very well-prepared for the meeting, noting Morgan's absence after the meeting's opening session. Altenberger also reported several branch managers commented on Morgan's absence from the meeting. In response, Morgan contends his practice was to attend only the meeting's opening session.

After hearing about Morgan's lack of attendance at the annual meeting, Pietroburgo concluded Morgan should be removed from his regional manager position. Pietroburgo based his decision on Morgan's lack of attendance at the annual meeting, Morgan's poor office attendance, the difficulty branch managers had in contacting Morgan, Morgan's failure to visit his branches regularly, and the problems that had occurred in opening the Somerset, Kentucky, branch. Pietroburgo informed Bagby, who concurred in the decision. On July 29, 2003, Pietroburgo informed Morgan of his decision to demote Morgan to the position of financial consultant. Pietroburgo stated Morgan would continue to receive his regional manager's salary for one year to assist Morgan while he built his "book of business," that is, clients for whom Morgan personally would make investments.

Morgan believed the demotion was tantamount to a termination, given Morgan had not maintained a book of business as he had maintained early in his career as a stockbroker. According to Morgan, A.G. Edwards knew Morgan would be unlikely to succeed as a stockbroker in the new city to which he was moving with no existing book of business. Thus, Morgan inquired about the possibility of a severance package. For several weeks, the parties attempted to negotiate different terms of a severance. One such term required by A.G. Edwards was a covenant not to compete, the details of which are unclear from the record. The parties were unable to reach any agreement on a severance package. Because Morgan never reported for work during the four months following his demotion, A.G. Edwards terminated Morgan's employment on November 30, 2003.

Pietroburgo selected Medley, age 63, to replace Morgan, age 59. Only two other candidates, who were ages 57 and 61, were considered for the position. At the time of Morgan's demotion, he was the most tenured of the fourteen regional managers. Four of the remaining thirteen regional managers were older than Morgan, two regional managers were less than five years younger than Morgan, and seven regional managers were between seven and fifteen years younger than Morgan.

On April 12, 2004, Morgan brought suit against A.G. Edwards, alleging age discrimination in violation of the ADEA.³ The district court thereafter granted A.G. Edwards's motion for summary judgment. This appeal followed.

II. DISCUSSION

A. Standard of Review

We review de novo the grant of a motion for summary judgment, applying the same standards as the district court. See Samuels v. Kan. City Mo. Sch. Dist., 437 F.3d 797, 801 (8th Cir.2006). Summary judgment is appropriate if the evidence, viewed in the light most favorable to Morgan and giving him the benefit of all reasonable inferences, shows there is no genuine issue of material fact and A.G. Edwards is entitled to a judgment as a matter of law. Fed.R.Civ.P. 56(c); see, e.g., Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The party opposing summary judgment cannot rest solely on the pleadings, but instead must set forth specific facts showing there is a genuine issue of material fact for trial. Celotex Corp., 477 U.S. at 324, 106 S.Ct. 2548 (citing Fed.R.Civ.P. 56(e)). Mere allegations, unsupported by specific facts or evidence beyond the nonmoving party's own conclusions, are insufficient to withstand a motion for summary judgment. Klein v. McGowan, 198 F.3d 705, 709 (8th Cir.1999).

B. Age Discrimination Claim

The ADEA prohibits employers from discriminating against individuals on the basis of age with regard to their "compensation, terms, conditions, or privileges of employment." Jankovitz v. Des Moines...