Peters v. Lincoln Elec. Co.

Decision Date21 March 2002
Docket NumberNo. 00-3562.,00-3562.
Citation285 F.3d 456
PartiesGraham A. PETERS, Plaintiff-Appellant, v. The LINCOLN ELECTRIC COMPANY, Defendant-Appellee.
CourtU.S. Court of Appeals — Sixth Circuit

Ann-Marie Ahern (argued and briefed), Simon Law Firm, Cleveland, OH, for Appellant.

Lee J. Hutton (argued and briefed), Kenneth D. Schwartz (briefed), Duvin, Cahn & Hutton, Cleveland, OH, for Appellee.

Before: MOORE and COLE, Circuit Judges; ROSEN, District Judge.*

OPINION

ROSEN, District Judge.

I. INTRODUCTION

On June 23, 1998, Plaintiff/Appellant Graham A. Peters filed suit in Ohio state court against his former employer, Defendant/Appellee Lincoln Electric Company, alleging that his "forced" retirement from the company was the result of age discrimination prohibited under the Ohio Revised Code, § 4112. Peters also asserted Ohio common law claims of breach of contract, detrimental reliance, and breach of public policy. Lincoln subsequently removed the case to the United States District Court for the Northern District of Ohio on federal question grounds contending that Peters' deposition testimony established that, among his claims in this lawsuit, Peters was asserting an ERISA claim. On July 9, 1999, the District Court denied Plaintiff's Motion to Remand his claims to Ohio state court. The court subsequently granted Lincoln's Motion for Summary Judgment on the state law claims on January 24, 2000 and denied Peters' Motion to Alter or Amend Judgment on February 28, 2000, before ultimately entering Judgment for Defendant on March 30, 2000.1 Plaintiff timely appealed the District Court's decisions.

For the reasons set forth below, we affirm the District Court's grant of Defendant's Motion for Summary Judgment, and its denial of Plaintiff's Motion to Remand and Motion to Alter or Amend Judgment.

II. FACTUAL BACKGROUND

Plaintiff Graham Peters worked for Defendant Lincoln Electric Company ("Lincoln") for 31 years. He began his employment with Lincoln in 1966 as a junior accountant and was promoted two times within his first 5 years of employment. In 1992, Peters became the Corporate Controller, one of the top forty management positions at Lincoln and the second highest financial management position, second only to the company's Chief Financial Officer ("CFO"). Although Peters never became a Certified Public Accountant, he remained responsible for all areas of domestic corporate accounting and financial reporting with approximately 50 people reporting to him.

Lincoln Electric Company is a manufacturer of arc welding, which began as a domestic company and expanded to include operations in sixteen countries by 1992. By the early 1990s, however, Lincoln was experiencing financial troubles, evidenced, in part, by their CFO's announced retirement. The CFO, Ellis Smolik ("Smolik"), announced his intention to retire by 1993, at age 74, and hand-picked Jay Elliott ("Elliott") to replace him. Elliott joined Lincoln in 1993 and formally assumed the role of CFO when Smolik ultimately retired in 1994.2 Elliott came from outside of the company and had extensive qualifications, including an MBA from the University of Michigan, Harvard management training, and financial management experience as the Vice President of Finance for Goodyear Tire and Rubber Company's international businesses.

Throughout Plaintiff's time with Lincoln, his subordinates held him in high esteem and considered him a good manager. Senior managers recognized Peters for his dedication to effective control of the company's finances and for properly serving the interests of Lincoln's shareholders and employees. The Defendant's former President, Don Hastings, testified that, while Peters did not generally work directly for him, Hastings was satisfied with Plaintiff's performance in the work he did in their limited interactions. During his deposition, Hastings testified that he never received complaints from other employees about Peters, but noted in his affidavit that Smolik once told him that he did not feel that Peters was developing as quickly as he (Smolik) thought he should be.

Hastings also testified that, when determining yearly bonuses, Peters received relatively high merit-ratings, which are based, in part, on peer evaluation. While Peters' ratings stayed high in comparison to other executives through the years, they also steadily declined in numeric value.

The parties have varying accounts as to the level of performance Plaintiff achieved after Elliott took over the CFO position. Elliott claims that he became increasingly dissatisfied with Peters' performance. [Elliott Dep. pp. 32-35]. Specifically, he was dissatisfied with Peters' failure to keep him and other executives abreast of financial information. Id. at 29, 39. Elliott distrusted Peters and claims that Peters did not have an adequate understanding of the relationship between outside auditors and Lincoln. Elliott informed Peters that he lacked the necessary international experience in light of Lincoln's growing international presence.

Peters contends that his continued employment with Lincoln and his rise through the ranks evidences his competency as the Corporate Controller. As proof of his good management skills, Peters offers multiple affidavits from former subordinates and co-workers.

In 1996, Peters became a project coordinator for "InfoSource One," a project that concerned implementing a new automated information system for Lincoln's financial areas.3 During the project, Peters reported to Frederick Anderson. Peters claims that his first indication of Lincoln's dissatisfaction in his long career with Lincoln was a memo Anderson drafted in 1997 alleging certain performance deficiencies in relation to his work on InfoSource One. The memo outlined Anderson's dissatisfaction with Peters' failure to meet certain deadlines, which eventually led to Lincoln's decision to replace him as the project coordinator. Plaintiff claims that Anderson wrote the memo at the instruction of Elliott. Lincoln contends that, when Anderson decided to replace Peters on the InfoSource project, Elliott merely advised him to document his reasons for doing so.4

During the year that Peters was working on InfoSource One, his Controller duties were divided among two younger managers, Vince Petrella, who was 37 years old, and Gabe Bruno, who was 29. They received mixed reviews on their performance. While in comparison to Peters, Petrella and Bruno appeared to be less liked and less respected by their subordinates, Elliott became increasingly satisfied with the way the finance department was running. Elliott's apparent satisfaction with the department in Plaintiff's absence led to his decision to remove Peters from the Controller position. Elliott told Peters that he lacked the international experience needed for Lincoln's growing needs to remain in the Controller position and instead offered him a position as Director of Benefits Accounting.5

This new Director's position reduced Peters' then-current salary of $112,000 to $90,000. The $90,000 base salary was "red-circled," which permanently locked the salary at $90,000. The "red-circling" had the effect of, on one hand, barring Peters from ever receiving raises, but, on the other hand, also preventing his salary from any further reduction.6 The position was also accompanied by a bonus based on the same type of "merit-ratings" that Peters had been subject to for his entire executive career with Lincoln. There was, however, an indication that Peters' "executive" status and continued participation in, Lincoln's Supplemental Executive Retirement Program ("SERP"), would be under review should he accept the new position.7 In the new Director's position, Peters would also be required to report to Elliott and Ray Vogt, the Vice President of Human Resources.

In the wake of what Plaintiff believed to be a "humiliating" and financially catastrophic demotion, Peters inquired as to other transfers or reassignments within the company. Upon learning that these positions would pay substantially less than the Director's position, Peters opted for "early retirement" from Lincoln.8

On June 23, 1998, Peters filed a Complaint in state court in Ohio alleging that in "forcing" him into early retirement, Lincoln discriminated against him because of his age in violation of Ohio Revised Code, § 4112. Peters also alleged Ohio common law claims of breach of contract, detrimental reliance, and breach of public policy. Lincoln subsequently removed the case to the United States District Court for the Northern District of Ohio on federal question grounds, contending that Peters' deposition testimony made clear that he was alleging violations of ERISA, thus providing a basis for removal under federal question jurisdiction.

Peters moved to remand the case back to state court. On July 9, 1999, the District Court denied Plaintiff's Motion to Remand. The court then subsequently granted Lincoln's Motion for Summary Judgment on the state law claims, and after Plaintiff stipulated to the dismissal of his ERISA claim, the Court entered a final Judgment.

III. ANALYSIS
A. STANDARD OF REVIEW

The standard of this Court's review of the District Court's denial of Plaintiff's Motion to Remand is de novo. See Jerome-Duncan, Inc. v. Auto-By-Tel, L.L.C., 176 F.3d 904, 907 (6th Cir.1999); Ahearn v. Charter Township of Bloomfield, 100 F.3d 451, 453 (6th Cir.1996). Similarly, the standard of review applicable to the District Court's decision to grant Defendant's Motion for Summary Judgment and to deny Plaintiff's Motion to Amend or Alter Judgment is de novo. Darrah v. City of Oak Park, 255 F.3d 301, 305 (6th Cir.2001); Perez v. Aetna Life Ins. Co., 150 F.3d 550, 554 (6th Cir.1998).

B. THE DISTRICT COURT DID NOT ERR IN DENYING PLAINTIFF'S MOTION TO REMAND
1. Plaintiff's...

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