Tolan v. Levi Strauss & Co.

• Decision Date: 28 March 1989
• Docket Number: No. 88-1018,88-1018
• Parties: 49 Fair Empl.Prac.Cas. 21, 49 Empl. Prac. Dec. P 38,678 Richard E. TOLAN, Appellee, v. LEVI STRAUSS & CO., Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 467

867 F.2d 467

49 Fair Empl.Prac.Cas. 21, 49 Empl. Prac.

Dec. P 38,678

Richard E. TOLAN, Appellee, v. LEVI STRAUSS & CO., Appellant.

No. 88-1018.

United States Court of Appeals,

Eighth Circuit.

Submitted Sept. 22, 1988.

Decided Feb. 7, 1989.

Rehearing and Rehearing En Banc Denied March 28, 1989.

Dennis C. Donnelly, St. Louis, Mo., for appellant.

Michael Waxenberg, St. Louis, Mo., for appellee.

Before LAY, Chief Judge, and ARNOLD and FAGG, Circuit Judges.

FAGG, Circuit Judge.

A jury found Levi Strauss & Co. (Levi) willfully discriminated against Richard Tolan because Levi fired Tolan based on his age. See Age Discrimination in Employment Act (ADEA), 29 U.S.C. Secs. 621-634 (1982). The jury also found Levi breached its implied covenant of good faith and fair dealing under California state law. The district court denied Levi's motion for judgment notwithstanding the verdict and for a new trial. Levi now appeals to this court, and we affirm.

Tolan worked in the apparel industry for over thirty years. In 1980, Tolan joined Levi as a salesperson in the womenswear division. The company marketed young women's blouses and shirts (tops) as well as pants and jeans (bottoms) in that division. Tolan sold tops. Levi placed Tolan in a sales territory that included Missouri and parts of Illinois. Five Levi salespeople, including Tolan, serviced this territory.

In 1984, Levi reduced its sales force and, thus, discharged three of the five men working in Tolan's territory: Tolan, almost fifty-six years old, Charles Bethea, fifty-six years old, and Paul Caracker, twenty-nine years old. Levi retained Maurice Rosaga, thirty-six years old, and John Mason, thirty years old, as salespeople in the territory. Gary Ireton, a national sales manager for Levi who was then thirty-four years old met with two other national sales managers to make Levi's termination decisions. After making these decisions, Levi conducted an employee evaluation procedure known as the objective job quotient (OJQ). Under the OJQ, certain Levi employees rated the salespeople based on established criteria. Levi claimed the OJQ supported its previous decisions to terminate Tolan and the other two men.

Tolan and Bethea filed separate suits against Levi. A jury found Levi terminated Bethea, a bottoms salesperson, because of his age in violation of the ADEA. The jury further found the violation was willful. We affirmed the jury's finding of age discrimination, but reversed the jury's finding of willfulness. See Bethea v. Levi Strauss & Co., 827 F.2d 355, 357-59 (8th Cir.1987). We now turn to address Levi's various challenges to the jury verdict for Tolan.

I. ADEA Claim

A. The Violation

The ADEA prohibits employers from discriminating against employees, who are at least forty years old, by discharging them because of their age. 29 U.S.C. Secs. 623(a)(1), 631(a). The ultimate issue in an ADEA case is whether the complaining employee has shown that age was a determining factor in the employer's action. See Bethea v. Levi Strauss & Co., 827 F.2d 355, 357-58 (8th Cir.1987). Here, Levi argues Tolan failed to present sufficient evidence to submit his ADEA claim to the jury. Specifically, Levi contends Tolan failed to establish a prima facie case of age discrimination and, in any event, Levi articulated a legitimate, nondiscriminatory reason for discharging Tolan--a reduction in the work force for economic reasons. See Gilkerson v. Toastmaster, Inc., 770 F.2d 133, 135 (8th Cir.1985) (identifying the three-step sequence that is used at trial in an ADEA case for the order of proof). We find Levi's contentions unpersuasive.

On appeal from a finding of age discrimination, this court does not review the adequacy of the evidence presented by the parties at any given stage of the proceedings. Instead, we must review the record to determine whether the evidence supports the jury's ultimate finding of age discrimination. MacDissi v. Valmont Indus., Inc., 856 F.2d 1054, 1057 (8th Cir.1988). In doing so, we must consider the evidence in the light most favorable to upholding the jury verdict and give the prevailing party, here Tolan, the benefit of all inferences that reasonably may be drawn from the evidence. Bethea, 827 F.2d at 358. Under this standard of review, we believe the record contains sufficient evidence to support the jury's finding of age discrimination.

Levi terminated the two oldest salespeople in the territory--Tolan and Bethea. At trial, Levi claimed it had terminated Tolan because he sold tops and the new focus was on bottoms. Levi also indicated it had been concerned about Tolan's relationship with major accounts. Nevertheless, Levi acknowledged it had no basis for believing Tolan could not sell bottoms as successfully as he had sold tops. Tolan had often worked with Bethea, a bottoms salesperson, in calling on clients and, thus, was familiar with that line of clothing. Levi also conceded it had no reason to believe that Tolan had other than a positive relationship with his major accounts.

Tolan had more years experience in sales than the two younger salespeople who were retained. Further, while at Levi, Tolan's supervisors gave Tolan excellent ratings on his appraisals. Tolan also received numerous awards for his job performance. In fact, Levi gave Tolan a Distinguished Service Award just a few months before Levi terminated Tolan.

Although projections for 1984 showed national sales of Levi tops would fall, Levi increased Tolan's sales target by several percentage points. The record also shows Ireton had been concerned about the high cost of sales in the region that contained Tolan's territory. Ireton indicated that because of the "seniority" of employees, salaries were higher in this region than in other regions. Further, Levi made the decision to terminate Tolan before conducting the OJQ. Under these circumstances, the jury could have viewed the OJQ process as a sham. From all the evidence in the record, the jury reasonably could have concluded that age was a determining factor in Levi's decision to fire Tolan. The district court properly denied Levi's motion for judgment notwithstanding the verdict, see Bethea, 827 F.2d at 358, or, in the alternative, a new trial, see Washburn v. Kansas City Life Ins. Co., 831 F.2d 1404, 1409 (8th Cir.1987).

B. Damages for the Violation

Levi challenges the jury's award of $142,500 in backpay and $17,650 in lost medical and life insurance benefits. We have carefully reviewed the record and conclude the evidence supports the jury's backpay award. With regard to the medical and life insurance award, Levi contends the jury improperly awarded Tolan damages approximately equal to the replacement cost of the insurance even though Tolan did not replace much of the coverage formerly provided by Levi. Levi argues that Tolan can recover only his actual expenditures for insurance coverage and medical costs.

At trial, Tolan testified he actually spent $7,236 on medical insurance and medical expenses during the period from his discharge to trial. Tolan further indicated the cost of replacing the life insurance benefits previously provided by Levi exceeded $12,000, but Tolan admitted he had not spent that amount on life insurance. The courts have differed on whether an employee should recover for lost insurance benefits when that employee did not obtain substitute coverage or incur any previously covered expenses. Compare Fariss v. Lynchburg Foundry, 769 F.2d 958, 964-66 (4th Cir.1985) (plaintiff, the wife of a deceased employee, can recover life insurance premiums that employer would have paid even though employee failed to obtain substitute coverage); Blackwell v. Sun Elec. Corp., 696 F.2d 1176, 1185-86 (6th Cir.1983) (employee entitled to receive lost health insurance benefits); Foster v. Excelsior Springs City Hosp. & Convalescent Center, 631 F.Supp. 174, 174-75 (W.D.Mo.1986) (plaintiff, the wife of a deceased employee, can recover proceeds of life insurance policy even though employee obtained no substitute coverage); Jacobson v. Pitman-Moore, Inc., 582 F.Supp. 169, 179 (D.Minn.1984) (employee can recover lost insurance benefits even though no substitute coverage obtained) with Kossman v. Calumet County, 800 F.2d 697, 703-04 (7th Cir.1986) (employee can recover only those amounts expended for substitute coverage or for medical expenses previously covered under employer's insurance plan), cert. denied, 479 U.S. 1088, 107 S.Ct. 1294, 94 L.Ed.2d 151 (1987), overruled on other grounds, Coston v. Plitt Theatres, Inc., 860 F.2d 834, 835-36 (7th Cir.1988); McKelvy v. Metal Container Corp., 674 F.Supp. 827, 832 (M.D.Fla.1987) (same), aff'd in part on other grounds and vacated in part on other grounds, 854 F.2d 448 (11th Cir.1988). Cf. Galindo v. Stoody Co., 793 F.2d 1502, 1517 & n. 15 (9th Cir.1986) (in unfair representation case, plaintiff can recover only amounts spent for substitute insurance coverage or for medical expenses previously covered under employer's insurance plan).

In the present case, however, we look no further than the relevant jury instruction. This instruction permitted the jury to include in the damage award any amount that Tolan "actually sustained for lost medical-dental insurance payments and lost group life insurance payments." Tolan failed to object to this instruction at trial; nor does he challenge the instruction on appeal. Thus, the instruction controls the resolution of this issue. See Phenix Fed. Sav. & Loan Ass'n, F.A. v. Shearson Loeb Rhoades, Inc., 856 F.2d 1125, 1129-31 & n. 2 (8th Cir.1988), cert. denied --- U.S. ----, 109 S.Ct. 1340, 103 L.Ed.2d 818 (1989). The instruction limits Tolan's recovery to the amount he actually spent on medical and insurance expenses--$7,236. Accordingly, the district court must reduce the jury's award of $17,650 by $10,414.

C. Willful Violation

Levi also maintains the record does not support the jury's finding that the discrimination was a willful...