Schultz v. General Elec. Capital Corp.
| Decision Date | 05 October 1994 |
| Docket Number | Nos. 93-3273,93-3321,s. 93-3273 |
| Citation | 37 F.3d 329 |
| Parties | 65 Fair Empl.Prac.Cas. (BNA) 1881, 65 Empl. Prac. Dec. P 43,306 Hubert O. SCHULTZ and Doyle C. Alley, Plaintiffs-Appellants, v. GENERAL ELECTRIC CAPITAL CORPORATION, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Vicki Lafer Abrahamson (argued), Carrie J. Lausen, Abrahamson & Associates, Chicago, IL, for Hubert O. Schultz.
Doyle C. Alley, pro se.
Camille A. Olson (argued), Raymond J. Kelly, Cynthia C. Mooney, Seyfarth, Shaw, Fairweather & Geraldson, Chicago, IL, for General Elec. Capital Corp.
Before ENGEL, * BAUER, and FLAUM, Circuit Judges.
Herbert Schultz and Doyle Alley were both terminated by General Electric Capital Corporation in 1990. They brought this suit pursuant to the Age Discrimination in Employment Act, 29 U.S.C. Secs. 623(a), 626(b) claiming that each was terminated because of his age. General Electric made a motion for summary judgment, which the district court granted. Schultz and Alley appeal the district court's decision, and we affirm.
General Electric Capital Corporation operates a division, Vendor Equipment Financing (VEF), that provides financing to equipment manufacturers, distributors, and franchisees through equipment leasing and financing programs. Its principal customer base consists of franchisees of national franchisors, such as Hardees and Dunkin' Donuts. This whole business began in late 1989 when VEF purchased the accounts of the Transamerica Commercial Finance Corporation in the fast-food and lodging industries. Under the sales agreement, VEF agreed to offer employment to sixty Transamerica employees. Schultz and Alley were two of the Transamerica employees hired by VEF at this time.
Alley was hired by Randolph Wexler, VEF's Manager of Marketing, to perform the role of District Marketing Manager. Alley's main responsibilities were to solicit and obtain lease agreements with individual franchisees of national lodging or fast-food franchisors. He began with VEF on December 4, 1989, at the age of 57.
From the beginning of his tenure, Alley did not perform as well as his peers. By April, Alley's boss had sent him a memorandum instructing him that he "better get some [sales] numbers in here or we're all going to be history." Alley responded to that memorandum with one of his own that stated:
In May 1990, VEF decided to consolidate two geographically overlapping sales units into one sales force. At that time, Alley met with his newly named regional superior, Otis Farmer, who told Alley that his performance was substandard. Alley admitted to Farmer that his sales quota was fair and that the sales volume report accurately reflected his current sales numbers. In light of these numbers, he even expressed concern to Farmer regarding possible layoffs resulting from the corporate reorganization.
Alley's performance deficiencies did not permit him to keep his promise to quit before being fired. To carry out the corporate plan, Farmer was asked by his superior to recommend two of the sixteen District Marketing Managers for layoff; Farmer, then age 45, was not given any guidelines to make this decision. He determined that the two District Marketing Managers with the lowest "funded sales volume" (by all accounts, the most significant measure of success in VEF) would be recommended for layoff. As one might surmise, Alley, along with Kyle Smith (age 27), was the low man on the totem pole. Alley's poor performance, along with other negatives contained in Alley's personnel file, made it clear to Farmer that Alley must be recommended for layoff. Farmer's superior accepted his recommendations, and both Alley and Smith were laid off.
Hubert Schultz, formerly Transamerica's National Franchise Account Manager, was hired by VEF on December 4, 1989, as a National Account Manager. Randolph Wexler hired Schultz for VEF to provide expertise in fast-food franchising and put Schultz in charge of developing the franchise business, educating VEF salesman to understand and develop the franchise business, and closing business deals with national franchisors whose products VEF would then offer to finance for approved franchisees. Schultz reported directly to David Labrozzi, Manager of the National Accounts Program, who reported to Wexler.
Like Alley, Schultz did not get off on the right foot. At Schultz's very first sales meeting on January 21, 1990, he was to present detailed information on how to market and close transactions in the fast-food franchise industry. It turns out that Schultz simply described his extensive contacts in the industry and told war stories. Wexler was looking for more and told Labrozzi so; Labrozzi passed Wexler's feedback along to Schultz. At the next scheduled meeting, on February 21, 1990, Schultz was to present to the credit department detailed information to help them understand the franchise business and how to resolve credit issues. Instead, Schultz again "regaled" his audience with stories of his personal contacts; he also failed to answer questions put to him in this meeting.
Understanding that VEF wanted to generate new business in the franchise industry as soon as possible, Schultz sent Labrozzi a memorandum dated February 8, 1990, in which he identified those franchisors that required his immediate attention. Schultz, however, did not submit the necessary information regarding these high priority franchisors to the credit department for about three months. In addition, early in February, Labrozzi requested of Schultz several franchisors' uniform franchise offering circulars; these circulars are prospectuses that a franchisor submits to the marketplace for consideration by potential franchisees and are referenced in the industry by the acronym "UFOC." Labrozzi believed that UFOCs were necessarily evaluated before meeting with a particular franchisor and requested UFOCs of high priority franchisors from Schultz. Schultz stalled on this request, at one time complaining to Labrozzi that UFOCs were not that important, before finally complying with Labrozzi's request at the end of March.
One of these UFOCs that Labrozzi had requested was for Dunkin' Donuts, with which Schultz had scheduled a sales call for March 27, 1990. Wexler, Schultz and three other VEF employees attended this meeting. Wexler felt that Schultz was unprepared, did not understand the business issues, could not answer questions, and "embarrassed the company." Wexler conveyed his feelings to Labrozzi in no uncertain terms.
Over Schultz's first four months with VEF, Labrozzi had communicated to Schultz several times over the phone his displeasure with Schultz's performance with respect to certain issues. By April 1990, Labrozzi had concluded that Schultz had failed to perform certain tasks that Labrozzi considered critical to VEF's success in that market. Labrozzi met with Wexler to discuss Schultz's problems, and Wexler told Labrozzi to meet with Schultz to discuss his deficiencies. On April 11, 1990, Labrozzi met with Schultz and told him that Schultz: had not submitted important franchisors' files for credit approval; was not "driving the business" (selling aggressively); was not closing enough deals; and was unaccepting (in Labrozzi's estimation) of VEF's credit standards. Schultz responded by complaining that VEF's credit department was deficient and was to blame for Schultz's low business volume. He also blamed the credit department for holding up the closing of the Tony Roma's account, but later admitted to Labrozzi that he had failed to provide information he knew was necessary for approval. Subsequent to this meeting, Schultz did submit information for important franchisors, but not for several weeks after the meeting.
In May, Labrozzi determined that Schultz must be terminated because he was unable or unwilling to improve his performance. Labrozzi informed Wexler of his decision and explained his reasons. Wexler agreed with Labrozzi, but recommended that Labrozzi discuss Schultz's termination with the human resources manager, Walter Conley. Labrozzi did this, explaining to Conley each of Schultz's miscues and Schultz's inability to improve.
Finally, Labrozzi met with Schultz and terminated him for unsatisfactory performance. Labrozzi informed Schultz that he was to be paid through August and could keep his company car through June. Predictably, Schultz was displeased. He complained that he had forfeited severance benefits from Transamerica, demanded a greater severance package from General Electric, and threatened legal action. Labrozzi told Schultz that he would discuss his severance package with the human resources manager, but that he could not give him an employment reference because Schultz was being terminated for poor performance.
Labrozzi met with Conley again to discuss Schultz's severance package. Labrozzi informed Conley that he was terminating Schultz for poor performance, and for that reason, he could not transfer Schultz to another position within VEF. Conley informed Labrozzi that terminated employees are not entitled to any severance pay or benefits, but that he would explore other options.
Labrozzi and Conley discussed Schultz's situation several times over the telephone over the next several weeks. In early June, Conley had determined that, from an administrative perspective, if VEF characterized Schultz's termination as a layoff, VEF could offer Schultz some termination benefits. As a result, Conley sent Schultz a letter informing him of his termination benefits and characterizing the termination as a layoff. In response, Schultz accepted the benefits,...
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