Wohl v. Spectrum Mfg., Inc., 95-3610

• Decision Date: 21 November 1996
• Docket Number: No. 95-3610,95-3610
• Citation: 94 F.3d 353
• Parties: 71 Fair Empl.Prac.Cas. (BNA) 1081 Martin T. WOHL, Plaintiff-Appellant, v. SPECTRUM MANUFACTURING, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 353

94 F.3d 353

71 Fair Empl.Prac.Cas. (BNA) 1081

Martin T. WOHL, Plaintiff-Appellant, v. SPECTRUM MANUFACTURING, INC., Defendant-Appellee.

No. 95-3610.

United States Court of Appeals Seventh Circuit.

Argued April 18, 1996.

Decided Aug. 28, 1996.

Rehearing and Suggestion for Rehearing En Banc Denied Nov. 21, 1996.

Aron D. Robinson, Bruce J. Goodhart, Matthew H. Berns (argued), Holstein, Mack & Klein, Chicago, IL, for plaintiff-appellant.

Terry J. Smith, Barry C. Kessler (argued), Kessler, Smith & Powen, Chicago, IL, for defendant-appellee.

Before BAUER, ESCHBACH, and FLAUM, Circuit Judges.

ESCHBACH, Circuit Judge.

Plaintiff-Appellant Martin Wohl was hired as Controller of Defendant-Appellee Spectrum Manufacturing, Inc., in 1988. In 1992, at the age of 54, Wohl was fired and replaced by Joe Holloway, who is approximately 20 years younger than Wohl. Wohl then filed suit against Spectrum, alleging that Spectrum fired him because of his age, in violation of the Age Discrimination in Employment Act, as amended, 29 U.S.C. § 621 et seq. ("ADEA").

Spectrum filed a motion for summary judgment. The court analyzed Wohl's claim under the indirect, burdenshifting method of proof first established in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973), and later applied to ADEA claims. See McCoy v. WGN Continental Broadcasting Co., 957 F.2d 368, 371 (7th Cir.1992); see also Anderson v. Baxter Healthcare Corp., 13 F.3d 1120, 1122-24 (7th Cir.1994) (discussing the particulars of the burden-shifting approach). The court found (or, more appropriately, presumed) that Wohl had made a prima facie case for age discrimination. The court also found that Spectrum had met its burden of rebutting the presumption of age discrimination by articulating a legitimate, nondiscriminatory reason for its action. The court, therefore, required Wohl to prove that Spectrum's "reasons" for firing Wohl were a pretext for age discrimination. The court held that Wohl failed to raise a genuine issue of material fact and the court granted Spectrum's motion for summary judgment. Wohl appeals from that decision, arguing that he raised a genuine issue of material fact as to whether Spectrum's proffered reason for his firing was a lie. We agree with Wohl and we reverse and remand for further proceedings.

I.

We review de novo the district court's grant of a motion for summary judgment, Schultz v. General Electric Capital Corp., 37 F.3d 329, 333 (7th Cir.1994), cert. denied sub nom. Alley v. General Electric Capital Corp., --- U.S. ----, 115 S.Ct. 2584, 132 L.Ed.2d 833 (1995), and we view the record in the light most favorable to the non-moving party. McCoy, 957 F.2d at 369. We apply the summary judgment standard rigorously in employment discrimination cases such as this because intent and credibility are crucial issues. Courtney v. Biosound, 42 F.3d 414, 419 (7th Cir.1994). ¹

A plaintiff in an age discrimination case may defeat a summary judgment motion brought by the employer if the plaintiff produces evidence that the employer proffered a phony reason for firing the employee. Anderson, 13 F.3d at 1123. The Supreme Court's opinion in Saint Mary's Honor Ctr. v. Hicks, 509 U.S. 502, 113 S.Ct. 2742, 125 L.Ed.2d 407 (1993), specifically permits, but does not require, the fact-finder "to infer the ultimate act of intentional discrimination" based upon such evidence. Id. at 511, 113 S.Ct. at 2749. Therefore, to avoid summary judgment, Wohl must raise a genuine issue of material fact regarding the sincerity of the proffered reasons for his discharge. With this framework in mind, we discuss the relevant facts in the instant case.

II.

Spectrum is a small manufacturing company that makes specialized machine parts. Wohl had a variety of responsibilities as Spectrum's Controller. These responsibilities included financial and cost accounting, payroll, coordination of liability insurance and administration of the company's 401K plan.

Shortly after Wohl was hired, he investigated and purchased a new computer accounting program at the company's behest for approximately $3,000. Spectrum eventually outgrew this system and Wohl was directed to assess the purchase of a more sophisticated system that would permit management to track profitability by department and job lot. Wohl and Spectrum's president, James Ceriale, opted for a software accounting system called "DCD." The company purchased the DCD software and the hardware necessary to implement the program at a cost of slightly more than $100,000.

The company opted for this system because it was capable of sophisticated cost accounting. Cost accounting requires the company and its employees to input the variable costs associated with a single job (i.e., materials, labor, and machine overhead) along with proportionate fixed costs (general overhead and administration). These figures are then matched against billing for each job. The resultant analyses provide the company with detailed information regarding the company's efficiency, productivity, and sources of profit and loss. This system, like all computer systems and all accounting systems, is dependent on the input of accurate information. For example, the system requires production floor employees to log on to a computer terminal and input their personal identification number and a job account number before working on a particular job with a particular machine. The employee signs off after completing that period of work. If the information that the employee enters is inaccurate, the output data will be inaccurate. Garbage in, garbage out.

In its motion for summary judgment, Spectrum suggested that it had fired Wohl for two reasons: (1) his failure to "get along with" general manager Greg Reuhs and (2) his inability to produce certain computer accounting reports--specifically, computer-generated job costing reports from the DCD system. The district court found that these were legitimate, nondiscriminatory reasons for Wohl's termination. The court also found that Wohl had failed to create a genuine issue of material fact regarding whether Spectrum's second reason ² was false--a pretext for age discrimination. Wohl admits that he did not produce accurate and reliable job costing reports for Spectrum. This is, however, only half of the story. Wohl alleges that general manager Greg Reuhs was responsible for the system's failure. Wohl also claims that he complained to Spectrum's management about Reuhs's actions and that Spectrum's management instructed him to get along with, and defer to, Reuhs. This allegation is significant because, if true (and we must assume for purposes of summary judgment that it is true), it creates a genuine issue of material fact regarding whether Spectrum's proffered reason for firing Wohl was a pretext for age discrimination.

The evidence indicates that Wohl and Reuhs had clashed early on in Wohl's tenure at Spectrum. Reuhs was primarily responsible for manufacturing, but he had assumed responsibility in a number of other areas and was given great deference by Spectrum's management. For example, Reuhs insisted on taking responsibility for billing, an area that ordinarily belongs under the supervision of the Controller. When Spectrum first hired Wohl, Wohl had questioned some of the billing practices maintained by Reuhs. Reuhs had an unorthodox policy of keeping particular jobs open and refusing to abide by a standard month-end cutoff. By employing this unorthodox policy, Reuhs was able to manipulate department profitability and "steal" billing from, and allocate labor to, subsequent months. Reuhs's sleight of hand prevented management from obtaining an accurate picture of department profit and loss.

Reuhs's tinkering with billing so concerned Wohl that he brought the matter to Spectrum's management's attention. Wohl informed Jim Ceriale, Tom Brandseth, and William Fricke about his concerns at a luncheon meeting. Ceriale, Brandseth, and Fricke were the founders and managers of the company and Ceriale was its president. At this luncheon meeting, Wohl was specifically directed to "get along with" Reuhs and to work out their differences. Wohl stated that it was clear to him "that the company considered Reuhs, who was the younger man, to be a key player in the organization, and that he was to be appeased." Following the meeting, Wohl learned to get along with Reuhs and performed his duties to the fullest extent without clashing with Reuhs.

As part of his duties in implementing the DCD system, Wohl was responsible for setting up the computer with certain fixed information, including overhead, employee identification numbers and employees' rates of pay. Wohl entered this information but was unable to produce the desired reports because production floor employees were supposed to supply much of the variable cost data, but did not do so accurately. Wohl did not have authority to manage these production floor employees; the employees were supervised by Greg Reuhs. The reports were unreliable because these employees failed to enter the correct data. Reuhs further compromised the integrity of the reports by failing to close out completed jobs and deliberately manipulating the billing cut-off dates.

The facts create a genuine issue of material fact with respect to both of Spectrum's proffered reasons for firing Wohl. First, Wohl claims that he learned to "get along with" Reuhs. Wohl's claim that he learned to "get along with" Reuhs is corroborated by Spectrum's own outside accountant, Charles Gries. Gries testified at his deposition that "Greg [Reuhs] never felt that he had a problem with Mr. Wohl" and that Reuhs "was always very complimentary of him." The evidence is more than sufficient to create a genuine issue of material fact. Especially when looked at in the light most favorable to plaintiff, a reasonable jury could find that Wohl and Reuhs got along fine and that Spectrum did not fire Wohl for...