Russo v. Trifari, Krussman & Fishel, Inc.

• Decision Date: 08 January 1988
• Docket Number: No. 257,D,257
• Citation: 837 F.2d 40
• Court: U.S. Court of Appeals — Second Circuit
• Parties: 45 Fair Empl.Prac.Cas. 1145, 45 Empl. Prac. Dec. P 37,690, 56 USLW 2422 Richard RUSSO, Plaintiff-Appellant, v. TRIFARI, KRUSSMAN & FISHEL, INC., Defendant-Appellee. ocket 87-7517.

Page 40

837 F.2d 40

45 Fair Empl.Prac.Cas. 1145,

45 Empl. Prac. Dec. P 37,690, 56 USLW 2422

Richard RUSSO, Plaintiff-Appellant, v. TRIFARI, KRUSSMAN & FISHEL, INC., Defendant-Appellee.

No. 257, Docket 87-7517.

United States Court of Appeals Second Circuit.

Argued Oct. 27, 1987.

Decided Jan. 8, 1988.

Robert N. Marx, New York City, for plaintiff-appellant.

Harman Avery Grossman, New York City (Patterson, Belknap, Webb & Tyler, New York City, M. Theresa Hupp, Kansas City, Mo., of counsel), for defendant-appellee.

Before FEINBERG, Chief Judge, and NEWMAN and WINTER, Circuit Judges.

WINTER, Circuit Judge:

Richard Russo appeals from the dismissal of his action brought under the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. Secs. 621-634 (1982).

Upon the close of discovery, defendant Trifari, Krussman & Fishel, Inc. ("Trifari") moved for dismissal of Russo's complaint and alternatively for summary judgment. In granting Trifari's motions, Judge Goettel held that the complaint did not allege facts sufficient to state a claim under the ADEA's statute of limitations provision for willful violations, and that the ADEA's two-year statute of limitations for non-willful violations therefore applied. Russo v. Trifari, Krussman & Fishel, Inc., 659 F.Supp. 194, 198-99 (S.D.N.Y.1987). The district court thereafter determined that Russo's action accrued more than two years before the filing of his complaint and was thus time-barred. Id. at 199-200. In an extended footnote, the district court held alternatively that Trifari was entitled to summary judgment on the merits of Russo's claim to the extent that it alleged a non-willful violation. Id. at 200 n. 14. Because we conclude that Russo's claim would be time-barred if it alleged only a non-willful violation, but that Russo has raised material issues of fact as to a willful violation, we reverse and remand.

BACKGROUND

We of course view the evidence in the light most favorable to the plaintiff. Trifari manufactures under its own name two lines of costume jewelry, a Basic Line and a Fashion Line. The only difference between the two lines is that Basic Line styles tend to remain the same over time, while Fashion Line styles change approximately every six months. The Basic Line constitutes about seventy percent of the company's business.

Russo worked for Trifari in New York City for twenty-one years as a model-maker, a craftsman who constructs three dimensional samples from a designer's sketch or verbal description of a piece of jewelry. There is no difference between constructing a model for the Basic Line and one for the Fashion Line. In 1982, there were five "staff" model-makers in Trifari's New York model-making department: Russo, age 66 (20 years with the company), Richard Bendi, age 58 (35 years), Frank Tessitore, age 56 (9 years), Sebastian Chiarello, age 49 (3 years), and Rufino Melido, age 47 (1 year). Heinz Martens, age 51 (22 years), was a sixth model-maker but he also had additional responsibilities as a department manager.

Before 1982, Trifari had model-making departments in both New York and East Providence, Rhode Island. Trifari claimed to have decided in 1982 to reorganize its premanufacturing operations. Prior to the beginning of the reorganization, and perhaps in anticipation of it, all employees were required to verify their birthdates, and a chart was prepared listing employees' ages and eligibility for retirement. As part of the reorganization, four New York model-makers and two designers were to be transferred to East Providence in order On November 1, 1983, the four model-makers--Russo, Bendi, Tessitore and Melido--were informed that they had the option of relocating to East Providence or being terminated effective January 1, 1984. Trifari offered to aid in house-hunting and moving expenses, and to provide transportation to and around East Providence during the transition period. However, an internal company memorandum without an addressee appears to cast doubt on Trifari's sincerity. After stating that the model-makers and designers should be told that all company benefits will remain intact if they accept transfer to East Providence, the document contains the following legible, but lined-out statement: "Model-makers only, do not tell them this." When and how the statement came to be lined-out, or whether its direction was ever followed, is unclear from the record.

                to consolidate all premanufacturing operations for the Basic Line.  Although it appears that Martens and Chiarello were originally to be included in the transfer, Trifari decided prior to the announcement that they would remain in New York to work on the Fashion Line.  At some time before or just after the decision to keep Chiarello in New York, he was appointed to a newly-created position styled "Group Leader."    There is a conflict in the evidence over whether this position actually imposed any new duties on Chiarello or was a specious title change justifying keeping him in New York
                

Russo testified that during the period in which the employees had to make their decision, Martens said to him, "It's time that you retired." In the end, none of the four model-makers accepted the offer of transfer, and all were terminated. Despite the occurrence of four vacancies, Trifari did not hire a single new model-maker for East Providence until October 1984, ten months after the terminations. In February 1985, Rufino Melido, the youngest of the four previously terminated model-makers, was rehired in New York on a temporary basis, a position made permanent in May 1985. As in the case of Chiarello's promotion, there is some dispute as to the reason for Melido's rehire. According to Trifari's design director, Melido was rehired after consultation with Martens because of a "crunch in the model shop." Martens, however, denied that there was any backlog in the model-making shop in 1985 or that he was consulted about the Melido rehire. In July, 1985, a second and apparently final model-maker was also hired in East Providence.

Russo commenced the present action on December 20, 1985, more than two, but less than three, years after being notified that he would have either to move to East Providence or to cease working for Trifari.

DISCUSSION

After completion of discovery, Trifari moved to dismiss the complaint pursuant to Fed.R.Civ.P. 12(b)(6), or, alternatively, for summary judgment under Fed.R.Civ.P. 56. The district court dismissed plaintiff's ADEA claim as time-barred because the allegations of the complaint "fail[ed] to state a claim for willful violation of the ADEA under any interpretation of the willfulness standard" and were "conclusory at best, with no mention that the defendant was even aware that the ADEA was 'in the picture.' " Russo, 659 F.Supp. at 198.

The motion to dismiss was made after discovery. Because materials developed during discovery that were relevant to the willfulness issue were presented to and considered by the district court, the motion to dismiss should have been treated as one for summary judgment. See Fed.R.Civ.P. 12(b); Goldman v. Belden, 754 F.2d 1059, 1066 (1985). Our review, therefore, will take into account those evidentiary materials.

In addressing the statute of limitations issue, we note first that Mr. Russo's claim accrued on November 1, 1983, when he was informed of Trifari's decision to require him either to move to East Providence or leave its employ. See Chardon v. Fernandez, 454 U.S. 6, 7, 102 S.Ct. 28, 29, 70 L.Ed.2d 6 (1981) (per curiam) (limitations period in Sec. 1983 suit ran from date plaintiffs received termination letters); Delaware State College v. Ricks, 449 U.S. 250 258-59, 101 S.Ct. 498, 504-05, 66 L.Ed.2d 431 (1980) (limitations period in suit under Sec. 1981 and Title VII ran from date of tenure decisions). Section 7(e)(1) of the ADEA, 29 U.S.C. Sec. 626(e)(1) (1982), incorporates Section 6(a) of the Portal-to-Portal Pay Act of 1947, which in turn prescribes a two-year statute of limitations for all actions, "except that a cause of action arising out of a willful violation may be commenced within three years after the cause of action accrued." 29 U.S.C. Sec. 255(a) (1982). Russo's complaint, filed on December 20, 1985, is thus time-barred insofar as it alleges a non-willful ADEA violation. It is timely, however, if the violation, if any, was willful. Accordingly, we must determine whether a genuine issue of material fact exists as to whether a willful violation occurred.

Because there cannot be willfulness absent a violation of the ADEA, our analysis must begin with the issue of whether Russo made an evidentiary submission sufficient to survive a motion for summary judgment on the issue of age discrimination. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986) (genuine issue of material fact under Rule 56 exists "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party").

"The standards relating to burden and order of proof in Title VII cases apply as well to cases arising under the ADEA." Pena v. Brattleboro Retreat, 702 F.2d 322, 323 (2d Cir.1983). Under McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973), a Title VII case, the initial burden is on the plaintiff to establish a prima facie case of unlawful discrimination. If that burden is met, the burden then shifts to the defendant to articulate a "legitimate, nondiscriminatory reason" for its action. Id. at 802, 93 S.Ct. at 1824. If the defendant meets this burden of production, then the plaintiff, upon whom the ultimate burden of persuasion rests, must show that the proffered reasons were not the defendant's true reasons, but were instead a "pretext for discrimination." Pena v. Brattleboro Retreat, 702 F.2d at 324 (quoting Texas Dep't of Community Affairs v. Burdine, 450 U.S. 248, 253, 101 S.Ct. 1089, 1093, 67 L.Ed.2d 207 (1981)).

To establish a prima...