Smith v. Goodyear Tire & Rubber Co.

• Decision Date: 07 March 1990
• Docket Number: 89-5058,Nos. 89-5057,s. 89-5057
• Citation: 895 F.2d 467
• Parties: 52 Fair Empl.Prac.Cas. 171, 52 Empl. Prac. Dec. P 39,607 Robert W. SMITH, Appellee, v. GOODYEAR TIRE & RUBBER COMPANY, Appellant. Robert W. SMITH, Appellant, v. GOODYEAR TIRE & RUBBER COMPANY, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 467

895 F.2d 467

52 Fair Empl.Prac.Cas. 171,

52 Empl. Prac. Dec. P 39,607

Robert W. SMITH, Appellee, v. GOODYEAR TIRE & RUBBER COMPANY, Appellant.

Robert W. SMITH, Appellant, v. GOODYEAR TIRE & RUBBER COMPANY, Appellee.

Nos. 89-5057, 89-5058.

United States Court of Appeals Eighth Circuit.

Submitted Oct. 12, 1989.

Decided Feb. 5, 1990.

Rehearing Denied March 7, 1990.

Roy A. Ginsburg, Minneapolis, for appellant.

J. Richard Bland, Minneapolis, for appellee.

Before FAGG, Circuit Judge, HENLEY, Senior Circuit Judge, and BEAM, Circuit Judge.

HENLEY, Senior Circuit Judge.

The Goodyear Tire and Rubber Company (Goodyear) appeals from a final judgment entered in the district court ¹ upon a jury verdict finding that Goodyear had discriminated against Robert W. Smith on the basis of age in violation of the Age Discrimination in Employment Act (ADEA), 29 U.S.C. Sec. 621, et seq. On Goodyear's motion, the district court set aside the jury's finding that Goodyear's actions were willful and Smith cross appeals from that ruling and the denial of equitable relief. We hold that Smith failed to prove that Goodyear committed age discrimination, and accordingly reverse.

In May, 1983 Goodyear eliminated Smith's job as an area sales manager (ASM) in the Minnesota Iron Range area and offered him a job as a retail area salesman (RAS) in Minneapolis, Minnesota, which he refused. At that time, Smith was fifty-one years old and had been an ASM in the Iron Range for twenty-three years.

In early 1983 Donald Salyers, Goodyear's manager of wholesale tires, decided to expand the sales force for farm tires by creating a farm tire sales engineer (FTSE) position. In order to do so, Salyers determined it would be necessary to eliminate an ASM position for every FTSE position added. He also created a District Telecommunications Manager (DTM) position, which addition would also necessitate the elimination of ASM positions.

Salyers instructed Richard Fuhrmeister, manager of sales and salaried personnel, to contact the regional managers to determine an equitable manner by which to eliminate ASM positions as the newly created positions were added. Fuhrmeister contacted Thomas Zesiger, manager of the Heartland region, which encompassed the Minnesota district. Smith's territory was one of nine territories in the district.

Zesiger testified that Fuhrmeister contacted him in February 1983 concerning the elimination of four ASM positions, including one in the Minnesota district, to accommodate the addition of four FTSE positions. Zesiger contacted Bruce Wiggins, manager of human resources, to assist him in deciding how to eliminate the positions in an equitable and consistent manner. After reviewing several possible methods, Zesiger decided to eliminate ASM positions based on the wholesale dollar volume of sales for 1982. At that time, he also decided he would service the territory and customers of the eliminated positions based on customer need and geography.

By letter dated March 7, 1983, and addressed to Salyers, with carbon copies to Fuhrmeister, Wiggins and Robert Walker, manager of the Minnesota district, Zesiger recommended that Carl Hanssen be promoted to the FTSE position, that the territory of Robert Fabian be eliminated and consolidated with the territory of D.A. Jacobson, and that Jacobson be the ASM for the combined area. Zesiger noted that the headquarters of Jacobson's territory was one hundred miles from the headquarters of Fabian's territory, and that the combined area would have a wholesale volume of sales in excess of $5,000,000.00. Zesiger set forth the nine territories within the Minnesota district by wholesale dollar volume. Fabian had the lowest volume, Jacobson the second lowest, and Smith the third lowest. In addition to noting that Fabian's territory had the lowest wholesale dollar volume, Zesiger noted, among other things, that Fabian had been on probation for poor performance and had placed seventh out of the nine ASMs in achieving his sales objectives.

In a blind carbon copy to Salyers and Fuhrmeister, Zesiger stated that he would be analyzing the work loads of the remaining ASMs and wanted to provide assistance to the district managers. He further stated, "Regardless of what form this assistance takes in the District Office, the territory that will be eliminated to provide this assistance will be [Smith's], which is the next smallest territory in volume in the District."

Zesiger's letter was based in large part on Wiggins' handwritten notes, which Zesiger had reviewed before drafting the letter. The notes indicated Fabian's probationary status and his seventh place achievement ranking. Wiggins also noted that Fabian would be fifty-nine years old in May, 1983.

In the last paragraph of his notes, Wiggins noted that Smith had placed eighth in achieving his sales objectives but that Smith had signed two new dealers in 1982, was "certainly on the right track" in making his objectives, and that unemployment in the Iron Range was twenty per cent. He also noted that Smith was fifty-one years old.

Zesiger testified that in April, 1983 he was informed that he had to eliminate another ASM position to accommodate a DTM position. Because at that time, Smith's territory had the lowest wholesale volume, Zesiger eliminated his territory and combined it with the adjacent territory. Phillip Heimbach, the ASM in the adjacent territory, became the ASM for the consolidated territory. Zesiger explained that Goodyear retained the ASM of the territory that had not been eliminated. Ken Oanes, aged fifty-one, was promoted to the DTM position.

Zesiger testified that as of March 7, 1983, he had not decided to eliminate Smith's position but only was aware of the possibility that the territory might have to be eliminated. Zesiger stated he had not "skipped over" Jacobson's territory to eliminate Smith's territory, but had merely combined Jacobson's territory with that of Fabian's based on the geographic location and type of customer. In response to Smith's counsel's question why Wiggins' notes had indicated the ages of Fabian and Smith if wholesale sales volume was the only criterion on which elimination of a territory was based, Zesiger responded that Wiggins, as personnel manager, was only doing his job in informing him that the men were in a protected class. Wiggins also testified that he believed it was his responsibility to point out the ages because the men were in a protected class. He also stated that he discussed Smith because he had placed behind Fabian in achieving his sales objectives.

On May 9, 1983 Robert Walker informed Smith that his territory was being eliminated and offered him a job as a RAS in a store in Minneapolis, Minnesota. According to Smith's testimony, Walker told him that his base salary would be approximately half of his base salary as an ASM but that he could expect to do well "incomewise" with commissions, that he was highly promotable and should not consider the position as a permanent set-back. Smith also stated that Walker wanted an answer immediately. Smith told him he needed some time to consider the offer, and was allowed vacation time to consider the offer. During that time, Smith consulted with Ray Willette, manager of commercial tire sales, and Wilbur Christensen, who had been an ASM and worked as a RAS for three months at another store in Minneapolis. Both men told Smith that even with commissions his salary would not come close to his former salary. In response to counsel's question why he did not accept the RAS position, Smith responded:

I could not accept the financial situation that Goodyear was placing me in due to reasons of marketability of my home, moving my family at that time which was on my own expense, moving into a higher cost of living area, assuming a job that would pay me probably less than 50 per cent what I was making and the turnover rate and the experiences that other people had had on the job. I felt that it ... was an elephant's graveyard.

On cross-examination, he acknowledged that in his deposition he stated he did not know why his position was eliminated.

Smith then filed this action against Goodyear. At the conclusion of Smith's case, Goodyear moved for a directed verdict, arguing that Smith had failed to prove a prima facie case of age discrimination and failed to prove that he was constructively discharged. The court denied the motion, and Goodyear presented its case. At the conclusion of the evidence, the court submitted the case to the jury on a special verdict form. The jury found that Goodyear had willfully discriminated against Smith on the basis of age by eliminating his territory, constructively discharging him, and failing to reassign him to other available positions, and awarded him $109,700.00 in compensatory damages.

On Goodyear's motion, the district court set aside the jury's finding of willfulness, but denied Goodyear's motion for a judgment notwithstanding the verdict (j.n.o.v.), or in the alternative a new trial. The court also denied Smith's motion for liquidated damages and front pay.

On appeal, Goodyear asserts that the district court's judgment should be reversed because Smith failed to establish a prima facie case of age discrimination. Goodyear relies on Holley v. Sanyo Mfg., Inc., 771 F.2d 1161 (8th Cir.1985). In Holley, this court held that in a reduction-in-force case where positions are combined, a plaintiff cannot establish a prima facie case of age discrimination by merely presenting proof that he was terminated while a younger person was retained in the combined position. The court held that a plaintiff must provide additional evidence that age was a factor in the employer's actions. Id. at 1165-66. The court explained that "[t]he ADEA does not require that every plaintiff in a protected age group be allowed a trial simply because he was discharged during a reduction-in-force." Id.

We, however, need not address Goodyear's...