Overgard v. Cambridge Book Co.
| Decision Date | 23 September 1988 |
| Docket Number | 87-2830,Nos. 87-2799,s. 87-2799 |
| Parties | 47 Fair Empl.Prac.Cas. 1623, 47 Empl. Prac. Dec. P 38,340 E. Theodore OVERGARD, Plaintiff-Appellee, Cross-Appellant. v. CAMBRIDGE BOOK COMPANY, an unincorporated division or trade name of Learning Trends, Inc., Defendant-Appellant, Cross-Appellee. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Kenneth A. Margolis, Dretzin, Kauff, McClain & McGuire, New York City, for defendant-appellant, cross-appellee.
Randall L. Nash, O'Neil, Cannon & Hollman, S.C., Milwaukee, Wis., for plaintiff-appellee, cross-appellant.
Before WOOD, Jr., and MANION, Circuit Judges, and ESCHBACH, Senior Circuit Judge.
In this case, the defendant (Cambridge) appeals from the district court's entry of judgment on a jury verdict finding that the defendant willfully violated the Age Discrimination in Employment Act, 29 U.S.C. Sec. 621 et seq. (ADEA), in terminating the plaintiff's employment. The district court entered a supplemental judgment denying the defendant's motion for judgment notwithstanding the verdict and granting the plaintiff's application for attorney's fees. The plaintiff cross-appeals from the district court's judgment on the amount of damages. We affirm the judgment on the jury's verdict as to the defendant's violation of the ADEA, but reverse that portion of the judgment that deals with the defendant's willfulness, and reduce the amount of damages.
We view the facts and the inferences which arise therefrom in the light most favorable to the plaintiff, for whom the jury rendered its verdict. Knapp v. Whitaker, 757 F.2d 827, 843 (7th Cir.), cert. denied and appeal dismissed, 474 U.S. 803, 106 S.Ct. 36, 88 L.Ed.2d 29 (1985); Fey v. Walston & Co., 493 F.2d 1036, 1044 (7th Cir.1974).
The defendant is in the business of publishing and selling books, video cassettes, and software programs for illiterate and functionally illiterate adults. It employs about forty people, of whom eight are sales representatives. The plaintiff was one of these eight salespeople. Each salesperson is assigned to a geographical region, which includes several states. The salesperson makes sales calls to various entities, including school districts, community colleges, correctional institutions, and some federally funded programs such as Job Corps. During these calls the representative shows the customer new Cambridge materials and provides instruction as to how these materials can most effectively be used. Unlike sales of conventional books for use in established curricula, which can be accomplished by matching a book with a course title, sales of adult education materials requires detailed demonstrations to the customers of how the materials will fill their needs. The goal is to encourage the customer to purchase an ever-broadening array of Cambridge products.
Cambridge pays each of its salespeople a salary that constitutes payment for base sales. A salesperson's base is derived from his or her sales in the previous year. The company sets a quota of anticipated sales above base for each salesperson, taking into account factors such as federal, state and local funding for adult education programs, existing market share, new products, price increases, and overall company growth. For sales over base, Cambridge pays a 6 1/2 percent commission; for sales over quota, the commission is 10 percent.
The plaintiff was employed by Cambridge as a sales representative from 1971 through May 31, 1985. In 1971, he was asked to move from California, where he had been working for the defendant's predecessor, Learning Trends, Inc., to the midwest, where he would cover Wisconsin, Minnesota, and Iowa. In 1981, he was assigned five additional states: Illinois, Michigan, Ohio, Indiana, and Missouri. The plaintiff was the first full-time salesperson assigned by Cambridge to cover these states, and in his first two years he raised the base sales from $375,000 to over $750,000.
Because of the plaintiff's success in developing his territory, Cambridge asked him to give up three of his largest states: Indiana, Michigan, and Ohio. The plaintiff thereby relinquished over $300,000 in sales. No other Cambridge salesperson had been asked to give up territory.
The plaintiff's demonstrated ability to develop territory led Cambridge to assign him to three new states: Kansas, Nebraska, and Colorado. Again, the plaintiff was the first full-time sales representative to be assigned to these states. The plaintiff's ability to develop sales in these states was limited somewhat by their population, which was significantly less than that of Indiana, Michigan, and Ohio. The territory was also much larger and farther from the plaintiff's home in Wisconsin. The defendant wanted the plaintiff to concentrate his sales efforts in the three new states, and it hired a salesperson for the Chicago area so the plaintiff would be able to spend less time there. Sales in Kansas, Nebraska, and Colorado increased by more than 140 percent between the 1983 and 1984 sales years. In 1985, sales increased somewhat over 1984 levels.
In the plaintiff's original territory of Illinois, Missouri, Wisconsin, Iowa, and Minnesota, sales declined in the period from 1982 to 1985. The price of materials increased from 5 percent to 6 percent per year. The plaintiff contends, however, that sales in his territory as a whole increased by nearly 15 percent. In the 1985 sales year, the plaintiff's sales were the third highest of any sales representative in the company. Nevertheless, on May 6, 1985, when the plaintiff was fifty-eight years old and the oldest of Cambridge's salespeople by several years, the president of Cambridge, Benita Somerfield, told the plaintiff that his employment was terminated effective May 31. He was replaced by a new salesperson who was thirty-nine years old and who had no previous experience selling adult educational materials, or books of any kind.
The plaintiff filed a charge of age discrimination with the Equal Employment Opportunity Commission (EEOC) in October of 1985. A representative of the EEOC allegedly told the plaintiff that the Commission would forward a copy of his charge to the appropriate state agency and that he did not need to do so himself. The plaintiff, therefore, did not file any charge with the state fair employment practices agency in either New York, where the termination occurred, or in any other appropriate state. 29 U.S.C. Sec. 633(b). The plaintiff filed his complaint in state court in Dane County, Wisconsin, on April 1, 1986. The action was then removed to federal court. In its answer to the complaint the defendant raised the plaintiff's default in filing with the state agency as an affirmative defense.
On January 15, 1987, the defendant moved for summary judgment on various grounds, including the plaintiff's failure to file a charge with the appropriate state agency. The plaintiff opposed the motion, claiming that his default should be excused because he relied on the advice of an EEOC representative that the charge would be forwarded to the state agency. The district court denied summary judgment on March 2, 1987, finding that a genuine issue of material fact existed as to whether the court should waive the state filing requirement on equitable grounds.
On March 12, the plaintiff moved for a sixty-day adjournment of the trial to permit him to file his charge with the appropriate state agency. The district court entered an order March 25 denying the plaintiff's motion. The court, however, dismissed the action without prejudice, providing that once the plaintiff filed his charge with the appropriate state agency, he could move for reconsideration and the case would be set for immediate trial.
March 16, the plaintiff filed a charge of age discrimination against the defendant with both the Wisconsin and New York state agencies handling such complaints. On May 27, after sixty days had passed, the plaintiff moved for reconsideration of the March 25 dismissal, informing the court that the charges had been filed with the states and the prerequisites to suit under 29 U.S.C. Sec. 633(b) had been fulfilled. The defendant objected on the grounds that the state filings were empty formalities. The court granted the plaintiff's motion on June 8, vacated the order of dismissal and scheduled the case for trial in June.
A jury found that the defendant had willfully discriminated against the plaintiff on the basis of age. Judgment was entered June 25. Damages were stipulated: $60,000 in back pay and $80,000 in front pay for future lost earnings.
The defendant first argues that the district court erred in failing to require the plaintiff to comply with the ADEA's mandatory procedural prerequisites to suit. The defendant next argues that there was insufficient evidence to support the jury's finding of age discrimination, and that the court therefore erred in denying the defendant's motion for judgment notwithstanding the verdict. Moreover, the defendant contends that the trial court erred in failing to find that the defendant's decision to discharge the plaintiff was a legitimate exercise of business judgment. The defendant also asserts that the jury's finding that the defendant willfully violated the law was unsupported by the evidence. The plaintiff cross-appeals, contending that the court should have doubled a portion of the award to the plaintiff because of the jury's finding of willfulness.
The ADEA contains two mandatory administrative requirements that a claimant must satisfy before filing suit. A claimant must file a charge of discrimination with the EEOC. 29 U.S.C. Sec. 626(d). And if the state in which the alleged discrimination occurred is a "deferral state," that is, if it has a state law prohibiting discrimination, then the claimant must also file a charge...
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