KEUCH v. TEVA PHARMACEUTICALS USA, INC.

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

__________________________________________

RANDOLPH KEUCH, :

Plaintiff, :

:

v. : Civil No. 2:19-cv-05488-JMG

:

TEVA PHARMACEUTICALS USA, INC., et al., :

Defendants. :

__________________________________________

MEMORANDUM OPINION

GALLAGHER, J. August 22, 2023

I. OVERVIEW

After four years of employment at Defendant Teva Pharmaceuticals USA, Inc. (“Teva”),

Plaintiff Randolph Keuch’s position was eliminated, and his employment terminated. Plaintiff

claims Defendant, and their parent company, discriminated against him based on his age in

violation of the Age Discrimination in Employment Act (“ADEA”) and the Pennsylvania Human

Relations Act (“PHRA”). A bench trial was held from December 19, 2022 through December

21, 2022, inclusive. The parties subsequently filed proposed findings of facts and conclusions of

law, see ECF Nos. 92 and 93, and on May 4, 2023 presented oral argument. The following

findings of fact and conclusions of law are based upon the evidence presented at trial, the parties’

submissions, and the arguments advanced by counsel.

II. FINDINGS OF FACT

Upon consideration of the testimony and evidence presented at trial, as well as the

submissions of counsel,1 this Court makes the following findings of fact:

Parties

1. Plaintiff was born on May 27, 1954 and at the time of the trial was 68 years old.

Trial Transcript Day 1, December 19, 2022 (“Tr. Trans. 1”) at 37:10-11.

2. Plaintiff is married and has eight children. Id. at 36:14-23.

3. Prior to working at Teva Plaintiff worked as Corporate Director of Strategic

Rewards and Director of Pfizer Consumer Group Compensation from 1998-2004; Associate

Vice President of Compensation of the P&C Division at the Hartford from 2004-2005; and at the

H.J. Heinz Company as the Vice President of Total Rewards from 2005-2013. Pl. Ex. 15 at

TEVA000037-38. Before this experience Plaintiff spent approximately three years working for

SmithKline Beecham. Tr. Trans. 1 at 43:18-44:1.

4. Plaintiff was hired by Teva as the Senior Director of Total Rewards – Americas

on December 20, 2013 and began working in the position on January 6, 2014. Pl. Ex. 16 at

TEVA 000047-49.

5. Plaintiff worked in that role until February 23, 2018. Trial Transcript Day 2,

December 20, 2022 (“Tr. Trans. 2”) at 127:19-23.

6. He was then paid by Teva through March 18, 2023. Id.

7. At the time he was hired by Teva, Plaintiff was 59 years old. Id. at 6:12-14.

1 The parties separately filed Proposed Findings of Fact and Conclusions of Law. See ECF

Nos. 92 & 93. The Court’s Findings of Fact are substantially derived from the parties’

submissions at ECF 92 and 93.

8. Defendant Teva is the leading generic drug company in the world. Court Exhibit

4, Transcript of Mark Sabag Deposition, December 8, 2022 (“Sabag Dep. Dec. 8”) at 25:5-7.2

9. Teva employs as many as 22,000 people in the United States alone. Court Exhibit

3, Transcript of Mark Sabag Deposition, December 6, 2022 (“Sabag Dep. Dec. 6”) at 73:7-11.

Plaintiff’s Employment at Teva

10. At that time Plaintiff was hired by Teva, Total Rewards-Americas was comprised

of Canada, Latin America and the United States. Tr. Trans. 1 at 56:8-13; see Pl. Ex. 16 at TEVA

000047-49; Def. Ex. 11 at TEVA 000047-49.

11. Total Rewards is part of Teva’s Human Resources Organization and is largely

responsible for making sure employees are properly compensated and provided benefits. Sabag

Dep. Dec. 8 at 7:11-21.

12. In this role, Plaintiff was responsible for designing and overseeing compensation

and benefits policy for Teva’s employees in the United States, Canada, Mexico and other

countries in Latin America where Teva conducted business. Tr. Trans. 1 at 56:8-13; 65:18-67:4.

13. There were other regional heads serving in similar roles in Europe, Asia Pacific

and Israel. Tr. Trans. 2 at 17:9-18:10.

2 The trial depositions of Mr. Sabag took place on December 6, 2022 and December 8,

2022. Videos and transcripts of the depositions were produced to the Court but were not

admitted as exhibits during the bench trial. “District Courts have broad discretion to reopen the

record to take new evidence, which may occur on motion of a party or sua sponte.” Bistrian v.

Levi, 448 F. Supp. 3d 454, 483 (E.D. Pa. 2020). Before re-opening the record to take new

evidence, a court must consider “the burden that will be placed on the parties and their witnesses,

the undue prejudice that may result from admitting or not admitting the new evidence, and

considerations of judicial economy.” Gibson v. Mayor & Council of City of Wilmington, 355

F.3d 215, 229 (3d Cir. 2004). Upon consideration of these factors, the will re-open the record

sua sponte to admit the videos and transcripts from the trial deposition of Mr. Sabag. Here, both

parties have relied on the testimony from these depositions, citing the transcripts in their

Proposed Findings of Fact. See ECF Nos. 92 & 93. Accordingly, the Court will admit the

videos and transcripts as the following exhibits: the videos from the depositions on December

6th and 8th of 2022 will be admitted as Court Exhibits 1 and 2, respectively. The transcripts from

these depositions will be admitted as Court Exhibits 3 and 4, respectively.

14. These regional leaders reported directly to the same global head of Total

Rewards. Tr. Trans. 2 at 18:11-24.

15. At the time Plaintiff was hired, Yonit Landskroner was a vice president of Teva

and the head of Global Total Rewards. Tr. Trans. 2 at 18:11-24; Pl. Ex. 16 at TEVA 000047-49;

Def. Ex. 11 at TEVA 000047-49.

16. During the initial phase of his employment, Plaintiff reported directly to Ms.

Landskroner, who was his immediate supervisor, and Leslie Billow who was his Matrix

Manager. Tr. Trans. 1 at 72:6-14, 86:21-87:13; Tr. Trans. 2 at 24:3-15, 32:3-10.

17. Ms. Billow was the Head of Human Resources for North America and was based

out of Pennsylvania. Tr. Trans. 2 at 32:3-10; Trial Transcript Day 3, December 21, 2022 (“Tr.

Trans. 3”) at 90:10-14.

18. In 2015, Ms. Landskroner left Teva and was replaced by Ron Yaniv, who became

Global Head of Total Rewards and Plaintiff’s Direct Supervisor. Tr. Trans. 1 at 81:25-82:4; Tr.

Trans. 2 at 27:8-11.

19. Mr. Yaniv reported to Mark Sabag, who was Teva’s Global Executive Vice

President, Human Resources. Sabag Dep Dec. 6 at 56:9-11, 66:24-67:2.

20. Plaintiff had the following individuals reporting directly to him: Diane Rohach,

who was the Head of Benefits for North America; Miriam Weinstein, who was the Head of

Compensation for North America; and Eduardo Nasi, who was the Head of Total Rewards for

Latin America. Tr. Trans. 1 at 106:4-8; Tr. Trans. 2 at 29:19-30:5; Def. Ex. 16 at TEVA000125.

21. At the time he was hired, Plaintiff’s compensation package included a starting

base salary of $250,000 per annum, a sign-on bonus of $50,000, eligibility to participate in the

TEVA 2014 Bonus Program and consideration for equity compensation awards in the form of

Options and/or Restricted Share Units. Pl. Ex. 16 at TEVA 000047-49; Def. Ex. 11 at TEVA

000047-49.

22. The level for the bonus program was thirty percent, which equated to $75,000 of

Plaintiff’s $250,000 base salary. Tr. Trans. 2 at 19:7-17.

23. Plaintiff was also eligible to receive healthcare benefits and vacation time, and to

participate in other incentive plans. Pl. Ex. 16 at TEVA 000047-49; Def. Ex. 11 at TEVA

000047-49.

24. Plaintiff received merit increases each year he was employed at Teva. Tr. Trans.

1 at 55:17-21.

25. In his position, Plaintiff was graded as a Labor Grade 17. Tr. Trans. 1 at 109:11-

13; Tr. Trans. 2:22-25.

26. Teva utilizes a numerical grading system scale to determine the salary range for

its employees. Tr. Trans. 2 at 230:11-14; see id. at 151:6-17.

27. In July 2015, Plaintiff was approached by Air Products and Chemicals, a

company located in the Lehigh Valley, regarding a similar position at their company. Id. at

46:22-47:2.

28. After he participated in several interviews with the company, Plaintiff was offered

a position as Global Head, Total Rewards. Id.; Def. Ex. 12 at KEUCH000132-33. Plaintiff was

offered a salary of $290,000 with a signing bonus of $55,000 and a potential retention bonus of

$90,000. Tr. Trans. 2 at 48:3-49:4.

29. This new role with Air Products would have required Plaintiff to relocate or

commute roughly one hour to and from work each day. Tr. Trans. 2 at 49:13-50:15.

30. Plaintiff acknowledged several factors weighed against taking the position at Air

Products. These factors included the relocation or increased commute, the potential of living

away from his father-in-law who was elderly, a lack of interest in returning to a global role, and

that he would be living further away from his children and grandchildren who lived in

Pittsburgh. Id. at 49:19-50:17.

31. After Plaintiff informed Mr. Yaniv about the offer, Teva increased Plaintiff’s

salary from $257,000 to $280,000 effective August 1, 2015, and provided a retention bonus of

$60,000 to be paid in two installments. Tr. Trans. 1 at 82:11-83:16; Tr. Trans. 2 at 56:21-57:18;

Def. Ex. 13 at KEUCH000028-29.

32. Each installment was $30,000 and would be paid so long as Plaintiff remained

employed by Teva at two benchmark dates. Def. Ex. 13 at KEUCH000028-29.

33. The first benchmark date was August 6, 2016 when Plaintiff would be 62 years

old, and the second date was August 6, 2017, when he would be 63. Id.; Tr. Trans. 2 at 58:22-

59:4.

34. Plaintiff received both of those payments. Tr. Trans. 1 at 83:10-16; Tr. Trans. 2 at

58:22-59:4.

35. At the time he discussed the Air Products offer with Mr. Yaniv, Plaintiff also

discussed the potential of moving from senior director to a vice president at level 18 with Mr.

Yaniv. Id. at 59:5-8.

36. Mr. Yaniv was unable to convince Mr. Sabag to make Plaintiff a vice president at

labor grade 18 level at that time. Id. at 59:16-19.

37. Plaintiff later received an additional salary increase from $280,000 to $285,6000

on May 23, 2016. Def. Ex. 14.

38. Plaintiff received positive performance reviews in both 2014 and 2015, wherein

he either met or exceeded expectations in several different areas. Pl. Ex. 33.

39. Plaintiff’s performance was also criticized. Tr. Trans. 3 at 112:18-120:7; Def. Ex.

17.

40. Daniel Lawlor testified that in 2017 he spoke with Mr. Yaniv regarding Plaintiff’s

job performance, explaining that Plaintiff often engaged in time consuming analyses that were

unnecessary and often missed the crux of issues, Plaintiff would often point fingers at others

when given feedback, Plaintiff failed to make adjustments when necessary, and that he

sometimes provided too many details and/or updates with a degree of bragging in front of the

business of HR community. Id.

41. Mr. Lawlor based these observations on time spent working with Plaintiff in 2014

and then again in 2017. Tr. Trans. 3 at 115:12-18.

42. Mr. Lawlor testified he never had a meeting with Mr. Yaniv and Plaintiff to

address these concerns, as Mr. Yaniv’s position was terminated through the restructuring. Id. at

120:15-21.

43. In 2014, Plaintiff hired Mr. Nasi as Director of Total Rewards – Latin America

after soliciting him to apply for a position at Teva. Tr. Trans. 2 at 38:23-39:12, 200:21-201:18,

210:22-211:4, 243:16-19.

44. Plaintiff had known Mr. Nasi for approximately twenty years at the time at the

time Mr. Nasi submitted an application. Id. at 38:4-8.

45. During his interview, Plaintiff suggested to Mr. Nasi that this could be a growth

position, and that if and when he retired Mr. Nasi could be a potential successor. Id. at 40:8-12.

46. Mr. Nasi testified that after he was hired, he had a conversation with Plaintiff

wherein Plaintiff stated he expected to retire in five years. Id. at 237:5-18. Plaintiff disputed this

evidence in his testimony, claiming he never said that he would retire within the next five years.

Id. at 40:16-18.

47. While Mr. Nasi worked under Plaintiff, Plaintiff was grooming him to be his

eventual successor, and at one point suggested to Mr. Yaniv that Mr. Nasi be relocated from

Miami to Pennsylvania to have more exposure to Plaintiff and his direct reports. Id. at 41:12-

42:15.

Teva’s Acquisition of Actavis

48. In the summer of 2015, Teva announced the $40 billion acquisition of Actavis,

which was the generic pharmaceutical division of the Allergan company. Sabag Dep. Dec. 8 at

24:11-25.

49. The acquisition was completed in the fall of 2016. Id.

50. As a result of the acquisition, Teva’s workforce increased from approximately

50,000 employees to over 60,000 employees in the fall of 2016. Id. at 25:22-26:3.

51. In 2016, Plaintiff asked Mr. Yaniv again to have his position regraded for the

additional work he performed as a result of Teva’s acquisitions and integrations, in particular the

acquisition of Actavis. Tr. Trans. 2 at 61:1-25.

52. Mr. Yaniv advised Plaintiff that he could not regrade Plaintiff’s position to a labor

grade 18. Id. at 61:23-25.

53. At the time of the Actavis acquisition, Teva’s stock price was approximately $74

per share. Sabag Dep. Dec. 8 at 26:4-7.

54. By the beginning of 2017, Teva executives began to realize the acquisition of

Actavis was a poor business decision and that Teva had overpaid for Actavis. Id. at 27:19-21,

28:5-13.

55. Teva took immediate steps to mitigate the effects of the acquisition. Id. at 28:14-

29:4.

56. Teva fired its then Chief Executive Officer (“CEO”) Erez Vigodman and replaced

him with an acting CEO. Id.

57. Next, Teva instituted cost cutting initiatives, which included a hiring freeze, a

hold on salary increases, and other measures to reduce the expenses of the organization. Id. at

29:23-30:6.

58. While these initiatives were implemented to mitigate Teva’s financial issues, Mr.

Sabag and others believed more drastic measures would need to be taken. Id. at 30:9-30:18.

59. On October 3, 2017, Mr. Sabag sent an email to Plaintiff and other Human

Resource leaders addressing year-end compensation processes and advising that Teva’s “pay for

performance” approach would remain the same and that annual salary increases with eligibility

would be provided. Pl. Ex. 48.

60. Mr. Sabag also stated in that email that bonuses for top management and equity

compensation might be affected. Id.

61. Mr. Sabag finished this email with “Together, we can take the organization

forward and build an amazing future for our company.”3 Id.

Kare Schultz Is Hired as CEO

62. In early 2017, Teva began its search for a new and permanent CEO. Sabag Dep.

Dec. 8 at 31:1-18.

63. Kare Schultz was announced as the new CEO on November 1, 2017. Id. at 31:13-

20.

3 Plaintiff testified that Sabag often used phrases like “entering a new generation,” “a new

future,” and/or “building for the future,” which Plaintiff believed reflected Teva’s “propensity

towards youth” and “the youth culture” seen at Teva in Israel. Pl. Ex. 48; Tr. Trans. 1 at 89:11-

17.

64. Mr. Schultz had prior experience leading companies in times of distress and in

turning around such organizations. Id. at 35:17-36:15.

65. Prior to the announcement, Mr. Sabag met with Mr. Schultz to discuss an

expedited onboarding process given the company’s financial situation. Id. at 31:24-32:8.

66. Mr. Sabag described Teva’s financial position and told Mr. Schultz there was an

urgency to develop an immediate plan to regain the trust of shareholders, bondholders and

employees. Sabag Dep. Dec. 6 at 78:14-79:9; Sabag Dep. Dec. 8 at 32:15-24, 33:16-34:21.

67. At the time Mr. Schultz was hired, Teva’s stock price had dropped from $74 per

share to approximately $11 per share. Sabag Dep. Dec. 8 at 33:11-25; Sabag Dep. Dec. 6 at

79:10-21.

68. Analysts and shareholders determined that Teva was holding approximately 40

billion dollars of debt while the company value was approximately 11 billion dollars. Sabag

Dep. Dec. 8 at 33:16-25.

69. Soon after the announcement of Schultz as CEO, Mr. Schultz fired most of the

Teva’s then leadership team. Sabag Dep. Dec. 8 at 37:11-19.

70. Mr. Sabag and two other senior executives were the only members of the Teva

leadership team retained. Id. at 39:8-20.

71. Mr. Schultz, with the assistance of Mr. Sabag and others, developed a

restructuring plan to reduce Teva’s expenses by up to $3 billion per year. Id. at 41:9-42:14;

Sabag Dep. Dec. 6 at 38:6-18.

72. This plan included reducing capital investments, Teva’s manufacturing footprint,

and Teva’s research and development budget. Sabag Dep. Dec. 8 at 44:6-17; Sabag Dep. Dec. 6

at 37:20-38:3.

73. This plan also included closing plants around the world, including Teva’s legacy

plant in Jerusalem. Sabag Dep. Dec. 8 at 47:9-48:6, 48:24-49:15.

74. Teva also sold the land that was to contain their new headquarters in Tel Aviv,

which they had purchased the year before. Id. at 46:8-47:5.

75. The Israeli government opposed the closing of the Jerusalem legacy plant, with

the Prime Minister calling a meeting with Mr. Schultz and the Israeli Minister of Economics to

try to convince Mr. Schultz to stop the restructuring in Israel. Sabag Dep Dec. 8 at 48:7-23.

76. Mr. Schultz informed Mr. Netanyahu, the Prime Minister, that closure of the

Jerusalem plant was necessary and that without drastic steps taken Teva would cease to exist. Id.

Reduction in Force

77. Mr. Schultz, with Mr. Sabag’s input and influence, determined that the remaining

one billion dollars per year in savings would need to come from a reduction in the workforce of

Teva. Sabag Dec. 6 at 75:1-8; Sabag Dep. Dec. 8 at 44:1-5; Def. Ex. 22 at TEVA000242-243.

78. On December 14, 2017, Teva announced the reduction in force (“RIF”) would

affect at least 25% of Teva’s workforce. Sabag Dep. Dec. 8 at 54:6-16; Def. Ex. 22 at

TEVA000242-243.

79. The RIF contemplated the elimination of 14,000 positions from Teva between

2018 and 2019. Sabag Dep. Dec. 6 at 91:24-92:11; Def. Ex. 22 at TEVA000242-243; Pl. Ex.

100 at TEVA 000749-000750.

80. At Teva, the structural layers of management are ordered L-0 through L-5. Id. at

53:7-17.

81. The CEO is considered holds the top management position, which is designated

L-0. Id.

82. The next tier of management is referred to as the “L-1” tier and L-1 managers

report directly to the CEO. The next tier of management is referred to as the “L-2” tier. Id.

83. L-2 managers report to the L-1 leaders. This pattern continues through the L-5

level. Id.

84. The RIF began with reductions made by Mr. Schultz to the L-1 tier; the remaining

L-1’s were then responsible for making reductions to the L-2 tier, followed by reductions to the

L-3 tier and so on and so forth. See Sabag Dep. Dec. 6 at 118:2-16; Def. Ex. 21.

85. The reductions to the L-2 tier were made by the remaining L-1’s, and the

reductions to the L-3 tier were made by the remaining L-2’s and so on until the RIF was

completed. See id.

86. Teva created a timeline for the RIF wherein the majority of the reductions at the

L-5 level and above would occur in the six weeks between December 14, 2017 and February

2018. See Def. Ex. 21.

87. Mr. Sabag, as Global Head of Human Resources, was responsible for making cuts

within his own Human Resources organization. Sabag Dep. Dec. 8 at 58:6-20.

88. As part of the RIF, support functions, which included HR, had reduction targets of

50%. Id.

89. At the time, Mr. Sabag had 12 direct reports, and was required to reduce that

number to six. Id. at 58:21-25.

90. Overall, the HR Department at Teva would need to be reduced from

approximately 700 employees to approximately 300 employees. Sabag Dep. Dec. 6 at 72:6-11.

91. Prior to deciding which employees would remain and who would be dismissed as

part of the RIF, Sabag designed a new structure for his organization. Sabag Dep. Dec. 8 at 59:5-

18.

92. This involved combining several Centers of Expertise (“COE”) and consolidating

what had previously been the responsibility of managers responsible for their own COE into one

unit with a single manager. Id. at 62:12-19.

93. Sabag previously had direct reports for each of the following COE’s: (1) Total

Rewards; (2) Talent Acquisition; and (3) Leadership and Development. Id.

94. As a result of the restructuring, Mr. Sabag combined these three COE’s into a

single COE referred to as Integrated Talent. Id.; Sabag Dep. Dec. 6 at 100:17-101:6.

95. On December 14, 2017, Mr. Sabag announced the changes made to the leadership

structure of HR. Tr. Trans. 1 at 117:21-118:2; Pl. Ex. 53.

96. As part of these changes, Tal Zorman was promoted to Senior Vice President of

Integrated Talent Management. Pl. Ex. 53; Sabag Dep. 6 at 95:12-96:5; Sabag Dep. Dec. 8 at

62:12-19.

97. Mr. Yaniv, the previous Global Head of Total Rewards and Simon Kelner, the

previous Global Head of Talent Acquisition, both had their positions terminated. Pl. Ex. 53;

Sabag Dep. Dec. 8 at 62:1-19.

98. Ms. Zorman replaced Mr. Yaniv as Plaintiff’s supervisor. Tr. Trans. 1 at 118:3-

11; Sabag Dep. Dec. 8 at 62:1-19.

99. Ms. Zorman was 48 years old at the time. Tr. Trans. 3 at 5:1-16.

100. Ms. Zorman did not have any specific training dealing with benefits and

compensation issues for North America, nor did she ever have any controls over the Total

Rewards Group prior to her promotion. Id. at 10:1-20, 20:13-15.

101. Mr. Lawlor was promoted to Head of Human Resources for North America and

became Plaintiff’s Matrix manager. Tr. Trans. 1 at 118:12-16; Pl. Ex. 53.

102. Following her selection, Ms. Zorman was given the responsibility of reducing the

headcount of the newly consolidated Integrated Talent COE by 50%. Sabag Dep. Dec. 8 at

62:24-63:10.

103. This included eliminating 50% of the positions within the Total Rewards group.

Tr. Trans. 3 at 16:1-4.

104. Ms. Zorman was tasked with designing her new organization over the next two to

three weeks before submitting the structure to Mr. Sabag for approval, and then making the

decisions on nominations. Tr. Trans. 3 at 48:9-16; Sabag Dep. Dec. 8 at 64:11-65:20.

105. While Ms. Zorman had been involved in a RIF with a previous employer, she did

not have any prior experience with a RIF at Teva. Tr. Trans. 3 at 47:21-48:8.

106. Ms. Zorman contacted her regional heads, including Plaintiff, seeking their input

on how the design of her new organization could be accomplished. Id. at 49:9-22.

107. On December 13, 2017, Ms. Zorman contacted Plaintiff by phone and informed

him he would need to reduce the Total Rewards staff by 50%. Tr. Trans. 1 at 120:2-121:4.

108. Ms. Zorman asked Plaintiff to prepare a presentation outlining how he could meet

that reduction. Id.

109. On December 14, 2017, Plaintiff submitted a PowerPoint presentation with his

recommendations via email to Ms. Zorman, Mr. Lawlor and Mr. Yaniv. Def. Ex. 24 at

TEVA000144; Def. Ex. 28 at TEVA000145-170; Tr. Trans. 1 at 121:8-13.

110. In this presentation, Plaintiff provided three options for how Teva could achieve

the 50% reduction in his group. Def. Ex. 28 at TEVA000150-152; Tr. Trans. 1 at 121:14-

124:22.

111. Two of the proposed options would involve Plaintiff remaining as the Head of

Total Rewards – Americas and overseeing a reduced staff. See Def. Ex. 28 at TEVA000150-

152.

112. One of the options submitted involved cutting leadership roles, including

Plaintiff’s position. Id. at TEVA000151; Tr. Trans. 1 at 124:23-125:23.

113. Plaintiff testified that he was not suggesting he be eliminated from the Teva

workforce, only that his position could be eliminated. Tr. Trans. 1 at 124:23-125:23.

114. In his presentation, Plaintiff also stated that if leadership roles needed to be cut,

Diane Rohach was the most valuable leader in Total Rewards, that the remaining staff did not

have the expertise to handle benefits for Teva, and that he was “probably the next most valuable

leader.” Def. Ex. 28 at TEVA000151.

115. In his email to Ms. Zorman containing the presentation, Plaintiff encouraged Ms.

Zorman to refrain from making any leadership changes during the first quarter of the year as the

risks would be very high, and to consult with the legal department as to risk and exposure. Pl.

Ex. 56 at TEVA000050; Tr. Trans. 1 at 125:23-126:23.

116. Plaintiff indicated this request was not a personal request and was not made out of

concern of his position being eliminated. Id.

117. On December 15, 2017, Ms. Zorman thanked Plaintiff for his proposals. Id.

118. That same day, Ms. Zorman contacted Mr. Lawlor for his opinion on the proposed

structures. Def. Ex. 30; Tr. Trans. 3 at 28:17-23.

119. Mr. Lawlor replied that he preferred the structure suggested by Plaintiff wherein

the regional head, Plaintiff’s position, would be eliminated. Pl. Ex. 58.

120. Ms. Zorman elected not to accept Mr. Lawlor’s suggestion, as she preferred

retaining regional heads. Tr. Trans. 3 at 60:1-5.

121. Ms. Zorman would speak to Mr. Lawlor more than 20 times after December 15,

2017 regarding the employee reductions. Tr. Trans. 3 at 28:24-29:5.

122. Ms. Zorman could not recall how many times she discussed Plaintiff with Mr.

Lawlor, or the length of any conversations with Mr. Lawlor regarding Plaintiff. Id. at 28:24-

29:18.

123. Ms. Zorman could not recall whether she took any notes of these conversations.

Id. at 29:15-18.

124. Mr. Lawlor testified he recalled having about two conversations with Ms. Zorman

regarding Plaintiff and his position in a new restructure, and that each conversation lasted

roughly ten minutes each. Id. at 108:15-109:2.

125. Ms. Zorman submitted her organizational design to Mr. Sabag who then approved

the proposal. Sabag Dep. Dec. 8 at 65:4-8.

126. Ms. Zorman performed this same task for Total Rewards, Talent Acquisition, and

Leadership and Development for each of the geographic regions where these functions existed.

Tr. Trans. 3 at 74:5-13.

127. As a result of the RIF, Ms. Zorman needed to terminate as many as 90% of the

individuals who had previously reported to her when she led the COE for Leadership and

Development. Id.

128. Following approval, Ms. Zorman next determined which employees should fill

the roles in the reduced in size Total Rewards department. Id. at 48:9-16; Sabag Dep. Dec. 8 at

65:12-20.

129. As part of Teva’s overall restructuring, Latin America would no longer be

included in the “Americas” Region; instead, Latin America would become part of the “Emerging

Markets” Region. Tr. Trans. 3 at 56:16-21, 57:24-58:3.

130. This meant that the “Americas” region would be changed to the “North America”

region and would include only the United States and Canada. Id.

131. As a result of this change, the new regional head of North America would be

managing fewer employees and would have half the number of direct reports compared against

the prior head of Total Rewards, Americas. Id. at 64:16-25.

132. Ms. Zorman envisioned the new regional head of North America would need to

be less strategic and more operational. Id. at 64:16-65:4.

133. Any Total Rewards strategy would now be handled at the corporate level and not

regionally. Id. at 65:11-16.

Mr. Nasi is Selected As Head of Total Rewards North America

134. Ms. Zorman identified Eduardo Nasi as a potential candidate to fill the Total

Rewards regional head role for North America. (Tr. Trans. 3 at 60:22-61:7).

135. Mr. Nasi had been discussed as a talent during a Human Resources leadership

forum, and Ms. Zorman had met him previously when he had represented Total Rewards for the

Americas at a program Ms. Zorman had hosted in Israel. (Tr. Trans. 3 at 60:22-61:7).

136. At this time, Mr. Nasi was the Director of Total Rewards for Latin America at the

Labor Grade 15 level and reported directly to Plaintiff. Def. Ex. 44 at KEUCH000519; Tr.

Trans. 2 at 200:21-201:18, 230:8-10.

137. As a Labor Grade 15, Mr. Nasi was earning a base salary of $168,896 and his

overall compensation package was valued at approximately $325,000. Def. Ex. 44 at

KEUCH000519.

138. By way of comparison, Plaintiff was a Labor Grade 17 earning a base salary of

$285,600 and Mr. Keuch’s overall compensation package was valued at approximately

$574,000. Def. Exhibit 43, at KEUCH00014.

139. Mr. Nasi did not have any specific course work in laws regarding benefits in

compensation in the United States and Canada, and he did not have any direct reports at the time.

Tr. Trans. 1 at 106:9-12, 138:19-139:14; Tr. Trans. 2 at 209:12-18.

140. Ms. Zorman knew that Mr. Nasi did not have knowledge regarding benefits in

North America. Tr. Trans. 3 at 24:20-24.

141. At the time, Ms. Zorman had not worked directly with Mr. Nasi and cannot recall

whether she reviewed his personnel file. Id. at 20:13-21:9.

142. Ms. Zorman called Mr. Nasi on December 21, 2017. (Tr. Trans. 2 at 256:22-25).

143. During this call, Ms. Zorman discussed Mr. Nasi’s career aspirations and the

Total Rewards structure for Latin America. Id. at 256:22-257:4.

144. Plaintiff had emailed Mr. Nasi informing him that Ms. Zorman would be

contacting him, and surmising that Ms. Zorman was likely calling because she wanted Mr. Nasi

to lead Total Rewards for the Emerging Markets Region. Def. Ex. 31 at TEVA000608-609.

145. Ms. Zorman sought input regarding Mr. Nasi from Plaintiff, Mr. Lawlor and

Carlos Benitez, who was the Human Resources head for Latin America. Tr. Trans. 3 at 21:2-8,

65:19-21, 66:4-9, 75:7-9.

146. Both Mr. Lawlor and Mr. Benitez provided a positive endorsement of Mr. Nasi.

Id. at 65:19-21, 66:4-9, 75:7-9, 104:19-105:5, 139:14-21.

147. Plaintiff told Ms. Zorman that Mr. Nasi was not qualified for the position of the

Head of Total Rewards for North America and that Mr. Nasi needed to develop and gain

experience in the area of compensation and benefits for North America. Tr. Trans. 1 at 139:1-14.

148. Ms. Zorman stated that Mr. Lawlor’s views about Plaintiff were important in her

decision. Tr. Trans. 3 at 85:9-11.

149. Ms. Zorman contacted Mr. Nasi on December 22, 2017 and offered him the job as

head of Total Rewards, North America. Tr. Trans. 2 at 211:16-19, 260:19-23.

150. Ms. Zorman informed Mr. Nasi that neither an increase in salary nor an increase

in Labor Grade/ title were components to the job offer. Id. at 234:10-14, 265:5-8.

151. On December 24, 2017, Mr. Nasi accepted the offer to become Head of Total

Rewards for North America. Id. at 264:22-265:4.

152. On January 2, 2018, Mr. Nasi sent an email to Mr. Lawlor thanking him for his

support of his nomination for Total Rewards North America. Id. at 263:7-15; Def. Ex. 42.

153. Ms. Zorman did not consider Plaintiff to be an appropriate fit for the new role.

Tr. Trans. 3 at 64:16-65:10.

154. The new role would start at the Director level and would be smaller in scope and

size compared to the role that Plaintiff had occupied. Id.

155. Additionally, the new role would have half the number of direct reports and

would no longer include Latin America. Id.

156. Prior to making her decision, Ms. Zorman did not have any interactions with

Plaintiff on a regular basis. Id. at 11:13-16.

157. Ms. Zorman did not review Plaintiff’s letter of employment, was not aware that

he received a retention bonus after receiving the offer from Air Products, and did not talk to

Plaintiff’s direct reports other than Mr. Nasi. Id. at 12:6-13:11; 21:17-22:20.

158. Ms. Zorman does not recall reviewing Plaintiff’s personnel file. Id. at 11:17-23.

159. Ms. Zorman was not willing to retain Plaintiff in a lower position level. Id. at

31:10-15.

160. While demotions were possible as part of the RIF, they were heavily disfavored.

Id. at 53:20-54:7; Sabag Dep. Dec. 8 at 96:10-25.

161. Both Ms. Zorman and Mr. Sabag had negative experiences at prior employers

when demotions were utilized during a RIF. Id.

162. Plaintiff would have accepted a reduction in pay to stay employed, but was never

given the opportunity to accept a demotion and move down a grade level in order to stay with

Teva. Tr. Trans. 2 at 186:24-187:6.

163. There was no rule at Teva against employees accepting a demotion. Tr. Trans. 3

at 121:19-122:4, 204:3-15.

164. Teva does allow grade level demotions under certain circumstances. Id. at 53:3-

16.

165. Ms. Zorman believed Plaintiff’ strengths in his role as senior director were

strategic thinking and developing new initiatives and benefits, neither of which Ms. Zorman

thought would be as necessary in the new role. Id. at 64:16-65:10.

166. Ms. Zorman was also aware that Plaintiff frequently utilized consultants and

contractors to facilitate these new initiatives, and that Teva would not have money for

consultants moving forward due to budget cuts. Id. at 64:16-65:10; 160:1-12.

167. In making her decision, Ms. Zorman knew the candidate for the position needed

to understand the laws regarding benefits in the United States in order to carry out the required

operational objectives and that Plaintiff had this knowledge while Mr. Nasi did not. Id. at 24:20-

24; 34:21-35:3.

168. Plaintiff was advised on January 2, 2018 that Mr. Nasi would be stepping into the

new role of Head of Total Rewards for North America, and that Plaintiff’s job was eliminated.

Tr. Trans. 1 at 130:21-131:4; Tr. Trans. 2 at 120:12-121:10.

169. Ms. Zorman requested that Plaintiff remain at Teva to help transition

responsibilities to Mr. Nasi. Tr. Trans. 1 at 132:24-133:6, 135:1-136:23; Tr. Trans. 2 at 138:3-

13.

170. This transition consisted largely of Mr. Keuch introducing Mr. Nasi to various

vendors used in Total Rewards. Tr. Trans. 1 at 135:1-136:23; Tr. Trans. 2 at 272:20-273:11.

171. Plaintiff’s last day in the office was February 23, 2018. Tr. Trans. 2 at 127:19-23.

172. Teva’s year-end process to evaluate an employee’s labor grade ranking and

compensation is referred to as the “connect process.” Id. at 232:12-233:17.

173. Generally this is the process where promotions and changes to base salary are

addressed. Id.

174. In February 2018, as part of the “connect process,” Mr. Nasi was promoted from

Labor Grade 15 to Labor Grade 16, and as a result his base salary was increased to

approximately $199,000, effective March 26, 2018. Tr. Trans. 3 at 79:8-19; Tr. Trans. 2 at

205:16-19; Def. Ex. 58.

175. At the time he started the new role Mr. Nasi was still residing in Miami. Tr.

Trans. 2 at 218:3-9.

176. Mr. Nasi moved to Basking Ridge, New Jersey approximately six months later.

Id. at 217:15-18.

177. During that approximate six-month period, Mr. Nasi traveled to Teva’s offices in

North Wales, PA approximately twelve times. Id. at 217:19-24.

178. For each trip, Teva paid the expenses for airfare, car rental and meals in the

amount of $700 to $1000. Id. at 220:12-24.

179. Teva also paid for Mr. Nasi’s relocation expenses. Id. at 219:17-25.

180. Mr. Nasi is currently earning $237,000 per annum in base salary and continues to

receive medical benefits, bonuses, equity and 401K matching in 2019, 2020 and 2021. Id. at

206:5-207:15, 209:1-4.

181. Mr. Nasi remains a labor grade 16. Id. at 230:15-22.

RIF Terminations

182. Teva also terminated Daniella LaChey, a senior director in her late 40’s who was

the Head of Human Resource Operations and Services and replaced her with Lauren Brenner, a

manager in her mid-20’s. Id. at 153:6-154:12.

183. The information disclosed by Teva pursuant to the Older Workers Benefits

Protection Act regarding the age breakdown of persons terminated in connection with the RIF

indicates that thirty-four (34) of the employees not retained were over the age of 40, twenty three

(23) of these individuals were between the ages of 50 and 59, and two of these individuals were

60 years old. Def. Ex. 3 (Ex.C).

184. 23 of the individuals selected for termination were under 40 years old. Id.

185. There were 46 individuals retained: 15 of these individuals were over the age of

50, five were between the ages of 40 and 49, and the rest were under the age of 40. Id.

186. None of the individuals retained were 60 years or older. Id.

Changes to the Rule of 70

187. Teva’s 2010 equity plan included what was sometimes referred to as the “Rule of

70.” Tr. Trans. 2. at 62:1-25.

188. Under this rule, employees could continue vesting in equity they had received

ever after they had left Teva’s employment. Id.

189. The Rule of 70 stated that if an employee’s age and years of service added up to

70, the company would allow an employee’s stock to continue vesting even after the employee

no longer worked for the company. Id.; Sabag Dep. Dec. 8 at 18:12-24.

190. Teva performed a benchmarking exercise to determine if this benefit was

common in the industry. Sabag Dep. Dec. 8 at 19:15-20:18.

191. Through this process they learned the benefit it was offering was not in alignment

with the industry. Id.

192. Teva learned that other companies generally did not permit employees to continue

vesting after their separation from employment when the separation was voluntary rather than

involuntary. Id.

193. As a result, Teva first modified the Rule of 70 to apply only to those situations

where a departing employee was involuntarily separated from Teva and not for employees who

voluntarily left. Id. at 20:19-21:10.

194. Contemporaneous with this change, Teva added a secondary criteria consistent

with other companies that required an employee to have a combination of at least 15 years of

service and 55 years of age to be eligible to continue vesting after separation of employment. Id.

195. Teva later modified the rule again and reduced the 15 years of service to 10 years

of service if the employee was terminated after he or she had attained the age of 65. Id. at 22:1-

12.

196. Changes to corporate benefit plans such as Teva’s equity plan required approval

from Teva’s Board of Directors. Id. at 19:2-9.

197. Neither Ms. Zorman or Mr. Lawlor had any role or involvement with the changes

made to the Rule of 70. Tr. Trans. 2 at 70:11-16; Tr. Trans. 3 at 153:18-25.

198. The Qualified Retirement Policy was also adjusted. Pl. Ex. 24 at KEUCH000089.

199. Under these changes, which were approved in September 2015, the definition of

“Qualifying Retirement” was changed from at least 65 years old and at least five years of service

to at least 65 years old and at least ten years of service. Id.; Tr. Trans. 1 at 155:15-19; Tr. Trans.

2 at 68:19-24.

200. In meetings with Ms. Billows in which Mr. Lawlor was present, Plaintiff

complained that the changes to the equity plan were discriminatory because the changes hurt

older employees. Tr. Trans. 1 at 157:1-12.

201. Plaintiff also raised these issues with his manager at the time, Mr. Yaniv. Id.

202. Plaintiff observed that Mr. Lawlor was silent on the issue. Id.

203. Plaintiff thought it was strange that Mr. Lawlor did not at least raise concerns

regarding the impact of the changes. Id.

204. Because of these changes, Plaintiff would not be able to retire until he reached

age 70, had his employment continued at Teva. Tr. Trans. 2 at 67:11-14.

205. These changes were decided in 2015 and later. Tr. Trans. 1 at 155:6-19; Tr.

Trans. 2: 70:21-71:11; Tr. Trans. 3 at 153:9-17; Pl. Ex. 24 at KEUCH000089.

Teva’s Severance Plan

206. Historically, Teva’s severance plan was not a qualified plan under IRS guidelines.

Tr. Trans. 3 at 144:3-4, 146:13-15.

207. In 2017, Teva discovered there could be tax and other financial incentives if it

converted its severance plan into a qualified plan. Id. at 144:15-145:4.

208. By converting to a qualified plan, Teva could use state unemployment benefits to

help fund Teva’s severance payments, thereby reducing the severance payments Teva was

obligated to pay by the amount the separated employee would collect through state

unemployment benefits. Id. at 144:16-145:24, 146:19-147:21.

209. To receive benefits under the qualified plan, the departed employee would need to

apply for state unemployment benefits. Id. at 146:19-147:21.

210. As a result, an issue was raised regarding how the plan should treat individuals

who were being separated if the employee was not otherwise eligible for unemployment benefits.

Id. at 146:19-148:10.

211. Plaintiff expressed the view that if people were not going to go back to work, then

they did not need severance because severance was designed to hold an individual over from one

job to the next. Id. at 148:16-149:2.

212. Mr. Lawlor wanted an exception made to the qualified plan for those individuals

who did not intend to return to the workforce so they could receive severance benefits. Id. at

149:2-150:20.

213. Because it was an IRS qualified plan, any exceptions to the plan needed to be

clearly defined by rule. Id. at 149:5-12.

214. Mr. Lawlor expressed that a clear rule would be that if an employee was let go

and over the age of 62, he or she would not have to apply for unemployment in order to receive

severance benefits. Id. at 149:13-150:20.

215. Mr. Lawlor selected the age of 62 because that is when an individual is eligible

for social security benefits, and, based on Teva historical data, 62 was the age when individuals

at Teva began to retire. Id. at 149:13-150:20.

216. Additionally, if the employee was under the age of 62 and did not want to return

to the workforce, he or she could sign an attestation and still receive severance benefits. Id. at

151:4-17.

217. Plaintiff testified that in November 2017, as Teva was implementing the plan, Mr.

Lawlor made the statement: “I do not want people age sixty-two or older who were severed to

endure the embarrassment and humiliation of having to apply for unemployment insurance.

Those individuals are unemployable. They should retire because they are not going to find

employment.” Tr. Trans. 1 at 181:24-185:17.

218. In his testimony Mr. Lawlor denied stating that employees over the age of 62

were unemployable and should retire. Tr. Trans. 3 at 152:13-16.

Rose Riccioli

219. Rose Riccioli was a Compensation Contractor working at Teva on a contract

basis. Id. at 150:22-151:3; Tr. Trans. 3 at 96:14-22.

220. In 2017, Plaintiff expressed an interest to Mr. Lawlor that the organization should

hire Ms. Riccioli as an employee. Tr. Trans. 1 at 151:7-18; Tr. Trans. 3 at 96:23-97:13.

221. Mr. Lawlor explained to Plaintiff that Mr. Lawlor had received some negative

feedback regarding Ms. Riccioli from other team members. Tr. Trans. 3 at 98:11-17.

222. Mr. Lawlor encouraged Plaintiff to speak with these individuals who had the

negative feedback. Id.

223. During this process, Mr. Lawlor asked Plaintiff if Ms. Riccioli had any long-term

potential and whether she could fill Plaintiff’s job in the near future. Tr. Trans. 1 at 152:4-16.

224. Mr. Lawlor instructed Plaintiff to find a different candidate for the position. Id. at

152:22-24.

225. Mr. Lawlor did not hire Ms. Riccioli, and no one filled that role. Tr. Trans. 2 at

76:8-9, Tr. Trans. 3 at 99:18-24.

III. DISCUSSION

a. Legal Analysis

Plaintiff has brought age discrimination claims under the ADEA4 and the PHRA.5

Under the ADEA, the plaintiff has the burden of establishing a prima facie case of

discrimination. See Burton v. Teleflex Inc., 707 F.3d 417, 426-27 (3d Cir. 2013). To satisfy a

prima facie case under the ADEA, a plaintiff must show: (1) they are a member of a protected

class (forty years of age or older); (2) who was discharged; (3) they were qualified for the job at

issue; and (4) the employer filled the position with a person who was sufficiently younger to

create an inference of age discrimination. Narin v. Lower Merion Township Sch. Dist., 206 F.3d

323, 331 (3d Cir. 2000). Satisfying the prima facie case creates an inference of unlawful

discrimination. See Lackey v. Heart of Lancaster Reg’l Med. Ctr., 704 Fed. Appx. 41, 45-46 (3d

Cir. 2017).

4 The ADEA provides, in pertinent part, that “[it] shall be unlawful for an employer (1) to

fail or refuse to hire or to discharge any individual or otherwise discriminate against any

individual with respect to his compensation, terms, conditions, or privileges of employment

because of such individual’s age.” 29 U.S.C. § 623(a)(1).

5 Plaintiff brings identical claims under ADEA and its state counterpart the PHRA. These

claims are closely related and will be analyzed concurrently. Resolution of Plaintiff’s ADEA claim

also resolves his PHRA claim. See e.g. Isley v. Aker Philadelphia Shipyard, Inc., 275 F. Supp. 3d

620, 626 n.6 (E.D. Pa. 2017); Taylor v. Phoenixville Sch. Dist., 184 F.3d 296, 306 (3d Cir. 1999)

(citing Kelly v. Drexel Univ., 94 F.3d 102, 105 (3d Cir. 1996)) (discrimination claims under Title

VII, the ADA, the ADEA, and the PHRA are interpreted co-extensively); Ngai v. Urban Outfitters,

Inc., No. 19-1480, 2021 WL 1175155, at *7 (E.D. Pa. March 29, 2021) (“Because such claims

[ADEA, PHRA, and PFPO] are analyzed under similar legal frameworks, they will be considered

together as appropriate.”); Fogleman v. Mercy Hosp., Inc., 283 F.3d 561, 567 (3d Cir.

2002) (precedent interpreting Title VII, ADEA, and/or PHRA is equally relevant to interpretation

of each statute); Jones v. Sch. Dist. of Philadelphia, 198 F.3d 403, 409 (3d Cir. 1999) (“We do not

distinguish between the claims under federal and Pennsylvania law in our disposition of the case

as...the standards are the same for purposes of determining the summary judgment motion.”).

If the plaintiff succeeds, the burden shifts to the defendant to provide evidence of a

legitimate nondiscriminatory reason for the adverse employment decision. Smith v. City of

Allentown, 589 F.3d 684, 690 (3d Cir. 2009). This “relatively light” burden is met by

introducing evidence “which, if true, would permit a conclusion that it took the adverse

employment action for a non-discriminatory reason.” Burton, 707 F.3d at 426 (citations omitted).

Once the defendant meets that burden, the plaintiff must demonstrate that the defendant’s

proffered reason was a pretext for discrimination. McDonnell Douglas Corp., 411 U.S. at 804;

see Willis v. UPMC Children’s Hosp. of Pittsburgh, 808 F.3d 638, 644 (3d Cir. 2015) (citing

Burton, 707 F.3d at 426-427); see also Smith, 589 F. 3d at 691 (affirming that McDonnell

Douglas applies in ADEA cases involving indirect evidence).

Plaintiff has met his burden for the first prong of the McDonnell-Douglas framework.

First, Plaintiff was 59 at the time he was hired, and was 63 at the time of his dismissal. Pl. Ex.

16; Tr. Trans. 1 at 37:10-11, 130:21-131:4; Tr. Trans. 2 at 120:12-121:10, 127:19-23. Second,

he was terminated from his position at Teva. See Tr. Trans. 1 at 130:21-131:4; Tr. Trans. 2 at

120:12-121:10, 127:19-23. Third, he was qualified for the position. Plaintiff had worked in

several similar roles prior to working as the Senior Director of Total Rewards (Compensation

and Benefits) – Americas at Teva. These roles included Corporate Director of Strategic Rewards

and Director of Pfizer Consumer Group Compensation from 1998-2004; Associate Vice

President of Compensation of the P&C Division at the Hartford from 2004-2005; and at the H.J.

Heinz Company as the Vice President of Total Rewards from 2005-2013. Pl. Ex. 15 at

TEVA000037-38. Plaintiff also spent approximately three years working for SmithKline

Beecham. Tr. Trans. 1 at 43:18-44:1. Finally, Plaintiff, who was 63 years old at the time of his

dismissal, was replaced by Mr. Nasi, who was 37 years old at the time.

As Plaintiff established a prima facie case of age discrimination, the burden shifts to

Defendants to produce “sufficient evidence to support a nondiscriminatory explanation for its

decision.” Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 143 (2000). This

“relatively light” burden is met by introducing evidence “which, if true, would permit a

conclusion that it took the adverse employment action for a non-discriminatory reason.” Burton,

707 F.3d at 426 (citations omitted).

The evidence presented established several nondiscriminatory reasons for retaining Mr.

Nasi and selecting him for the Senior Director position over Plaintiff. Ultimately, Ms. Zorman

selected Mr. Nasi for the position and Mr. Sabag quickly approved her decision. Tr. Trans. 3 at

69:3-70:18; Def. Ex. 32. Ms. Zorman traveled from Israel to testify in person at the trial. Tr.

Trans. 3 at 4:24-25, 6:6-7, 41:20-21. The Court found her testimony to be credible and

persuasive. She testified that she and others at Teva believed Mr. Nasi could handle the new

role. Mr. Nasi had been discussed as a talent during a Human Resources leadership forum, and

Ms. Zorman had met him previously when he had represented Total Rewards for the Americas at

a program that Ms. Zorman had hosted in Israel. Tr. Trans. 3 at 60:22-61:7. And at the time,

Mr. Nasi was the Director of Total Rewards for Latin America at the Labor Grade 15 level. Def.

Ex. 44 at KEUCH000519; Tr. Trans. 2 at 200:21-201:18, 230:8-10. She also sought input from

Mr. Lawlor and Carlos Benitez, the head of Human Resources from Latin America, both of

whom endorsed Mr. Nasi. Tr. Trans. 3 at 65:19-21, 66:4-9, 75:7-9.

The evidence also showed Plaintiff also believed Mr. Nasi could perform in a similar

role. Prior to hiring Mr. Nasi, Plaintiff had known him for approximately 20 years. Tr. Trans. 2

at 38:4-8. During his interview with Mr. Nasi, Plaintiff suggested that this could be a growth

position, and that if and when he retired Mr. Nasi could be a potential successor. Id. at 40:8-12.

While Mr. Nasi worked under Plaintiff, Plaintiff was grooming him to be his eventual successor,

at one point suggested to Mr. Yaniv that Mr. Nasi be relocated from Miami to Pennsylvania to

have more exposure to Plaintiff and his direct reports. Id. at 41:12-42:15. Later, as Ms. Zorman

was nominating individuals to serve the various roles in the newly restructured organization,

Plaintiff stated in an email to Mr. Nasi dated December 21, 2017 that Mr. Nasi was likely being

considered to lead Total Rewards for the Emerging Markets Region. Def. Ex. 31.

There was also evidence presented that the salary differential between Plaintiff and Mr.

Nasi played a role in the retention decision. At the time of Mr. Nasi’s retention, he was earning a

base salary of $168,896, and his overall compensation package was approximately $325,000.

Def. Ex. 44. Plaintiff’s base salary at the time was $285,600, and his total compensation was

valued at approximately $574,000. Def. Ex. 43. But as discussed below, there was also

evidence presented that showed this the gap between their compensation packages was not so

wide once the relocation expenses, frequent trips from Miami to Pennsylvania, and Mr. Nasi’s

raise he received one month after being on the job were considered.

Additionally, the scope of the new role would be different from Plaintiff’s role as Senior

Director of Total Rewards – Americas. Ms. Zorman testified that the new position would be

more operational and less strategic. Id. at 64:16-65:4. Because the new role would not include

Latin America, the new regional head of North America would be managing fewer employees

and would have half the number of direct reports compared against the prior head of Total

Rewards, Americas. Id. at 64:16-25. Ms. Zorman testified she was also looking for someone

who was flexible and could “roll the sleeves and do a lot of the work himself.” Id. When asked

to clarify, she stated the person she envisioned in that role would not rely on consultants on a

frequent basis and would work closely with the team and not just manage the team. Id. at 65:1-4.

Ms. Zorman and Mr. Lawlor were aware that Plaintiff frequently utilized consultants for his

team, and that Teva would not have money for consultants moving forward due to cost cutting

measures. Id. at 65:5-10; 160:1-12.

Because behind all of this was Teva’s financial condition. At the time Mr. Schultz was

hired as the CEO, Teva found itself in a precarious financial position. After its acquisition of

Actavis, Teva’s senior leadership realized they overpaid for Actavis. Sabag Dep. Dec. 8 at 28:6-

13. Teva’s stock price had gone from 74 dollars per share at the time of the Actavis acquisition

to 11 dollars per share at the time Mr. Schultz was hired. Id. at 33:8-25, 82:17-20, 83:5-17.

Following the announcement of Mr. Schultz as CEO, Teva began to institute several measures to

reduce expenses to get the company back into a positive cash position. Sabag Dep. Dec. 6 at

38:6-18; Sabag Dep. Dec. 8 at 41:9-42:14. These measures included a restructuring as well as

reductions in capital investments, Teva’s manufacturing footprint, and the company’s research

and development budget. Sabag Dep. Dec. 8 at 44:6-17. Teva also closed several plants around

the world, including the company’s legacy plant in Jerusalem. Id. at 47:10-16. This was the

largest Teva plant at the time. Id. at 48:4-6. Israeli Prime Minister Netanyahu met with Mr.

Schultz and the Israeli Economic Minister in an attempt to convince Teva not to close the legacy

plant. Id. at 48:6-23. Despite this intervention, Teva continued with their plans. Id. These

measures were expected to save Teva approximately two billion dollars each year. Id. at 44:6-

17.

In addition to the two billion in savings, the RIF was expected to save the company one

billion dollars each year. Sabag Dep. Dec. 6 at 75:1-8; Sabag Dep. Dec. 8 at 44:1-5; Def. Ex. 22.

On December 14, 2017 the company announced the RIF would effect approximately 25 percent

of Teva’s workforce. Sabag Dep. Dec. 8 at 54:10-16. The RIF contemplated the elimination of

14,000 positions from Teva between 2018 and 2019. Def. Ex. 22 at TEVA000242-243; Pl. Ex.

100 at TEVA 000749-000750. Some of these reductions would be made at the highest levels.

Sabag Dep. Dec. 6 at 118:2-16; Def. Ex. 21. In fact, when Mr. Schultz took over as CEO, he

fired most of Teva’s then leadership team, retaining Mr. Sabag and just two others. Sabag Dep.

Dec. 8 at 37:11-19, 39:8-20.

These cuts deeply impacted the Total Rewards team. Ms. Zorman was tasked with

redesigning her newly consolidated COE by 50%, which required eliminating 50% of the

positions in the Total Rewards group. Id. at 62:24-63:10; Tr. Trans. 3 at 16:1-5. When asked to

prepare a presentation on how to reduce the Total Rewards staff by 50%, Plaintiff provided three

different scenarios, one of which included the elimination of his position. Def. Ex. 28 at

TEVA000150-152; Tr. Trans. 1 at 124:23-125:23. And as described above, Ms. Zorman ended

up selecting Mr. Nasi for the new director position. In total, the RIF ended up affecting

approximately 15,000 employees. Sabag Dep. Dec. 8 at 103:4-17.

This evidence discussed above is sufficient to “support a nondiscriminatory explanation

for [Teva’s] decision” to retain Mr. Nasi and terminate Plaintiff’s position. Reeves, 530 U.S. at

143.

As the evidence has established a “nondiscriminatory explanation” for Teva’s decision,

Plaintiff “must point to some evidence, direct or circumstantial, from which a factfinder could

reasonably either (1) disbelieve the employer’s articulated legitimate reasons; or (2) believe that

an invidious discriminatory reason was more likely than not a motivating or determinative cause

of the employer’s actions.” Fuentes v. Perskie, 32 F.3d 759, 764 (3d Cir. 1994); see also

McErlain v. SPS Techs., No. 17-3034, 2019 WL 356541, at *11 (E.D. Pa. Jan. 29, 2019) (“The

plaintiff can prove pretext by submitting evidence that either casts doubt on the employer's

justification or shows that discrimination was more likely than not a ‘but for’ cause of the

employment action.” (citation omitted)).

“In order to raise sufficient disbelief, the evidence must indicate ‘such weaknesses,

implausibilities, inconsistencies, incoherencies, or contradictions in the employer's proffered

legitimate reasons’ to satisfy the factfinder that the employer's actions could not have been for

nondiscriminatory reasons.” Willis, 808 F.3d at 644–45 (quoting Fuentes, 32 F.3d at 765). In

other words, a plaintiff “may satisfy this standard by demonstrating, through admissible

evidence, that the employer's articulated reason was not merely wrong, but that it was so plainly

wrong that it cannot have been the employer's real reason.” DeCicco v. Mid-Atl. Healthcare,

LLC, 275 F. Supp. 3d 546, 557 (E.D. Pa. 2017) (quoting Jones, 198 F.3d at 413).

Plaintiff points to Ms. Zorman’s testimony that Plaintiff was overqualified for the new

position. Plaintiff testified that he would have accepted demotion to stay with the company.

Defendants contend Plaintiff was not considered to be a good candidate for demotion. See Tr.

Trans. 2 at 61:1-25. While there was no specific rule against demotions, they were heavily

disfavored by Mr. Sabag and Ms. Zorman. Tr. Trans. 3 at 53:20-54:7; Sabag Dep. Dec. 8 at

96:10-25. Ms. Zorman had a negative experience with demotions in her prior role at Intel and

also at Teva. Tr. Trans. 3 at 53:24-54:1. Moreover, given Plaintiff’s prior requests to have his

position regraded to vice president at the Labor Grade 18 role, it was believed Plaintiff had

higher aspirations. See Tr. Trans. 2 at 61:1-25.

Plaintiff also points to Lawlor’s influence over Zorman’s decision as part of the cat’s paw

theory of liability. Under this theory of liability, “an employer may be liable for employment

discrimination if the source of illegal animus was not the final employment decision-maker but

rather another employee whose animus proximately caused the adverse employment action at

issue in the case.” Mason v. Se. Pa. Transp. Auth., 134 F. Supp. 3d 868, 874 (E.D. Pa. 2015)

(citing McKenna v. City of Phila., 649 F.3d 171, 178 (3d Cir. 2011)).

Plaintiff brings this theory on account of Mr. Lawlor and his involvement in the decision

to retain Mr. Nasi over Plaintiff. To succeed on this theory, Plaintiff must show the animus of

Mr. Lawlor, and, whether his animus proximately caused the dismissal of Plaintiff. See id. With

respect to the animus of Mr. Lawlor, Plaintiff cites several instances where Mr. Lawlor acted

with animus towards older workers. Mr. Lawlor would not let Plaintiff hire Ms. Riccioli, an

older worker who was a compensation contractor working at Teva on a contract basis. Tr. Trans.

1, at 150:22-152:24. Mr. Lawlor instructed Plaintiff to find another candidate, and asked

Plaintiff if Ms. Riccioli had any “long-term potential” and whether she could be considered to fill

Plaintiff’s position in the near future. Id. at 152:4-21.

Plaintiff also points to Mr. Lawlor’s implementation of unannounced changes to Teva’s

equity plan that affected older workers. This was in regard to changes to what was once called

the Rule of 70 and the “Qualified Retirement Policy.” Upon learning the benefits they were

offering were not in alignment with the industry, Teva first modified the Rule of 70 to apply only

to those situations where a departing employee was involuntarily separated from Teva and not

for employees who voluntarily left. Sabag Dep. Dec. 8 at 19:15-20:18, 20:19-21:10.

Contemporaneous with this change, Teva added a secondary criteria consistent with other

companies that required an employee to have at least 15 years of service and 55 years of age to

be eligible to continue vesting after separation of employment. Id. at 20:19-21:10. Teva later

modified the rule again and reduced the 15 years of service to 10 years of service if the employee

was terminated after he or she had attained the age of 65. Id. at 22:1-12. Additionally, the

definition of “Qualifying Retirement” was changed from at least 65 years old and at least five

years of service to at least 65 years old and at least ten years of service. Pl. Ex. 24 at

KEUCH000089; Tr. Trans. 1 at 155:15-19; Tr. Trans. 2 at 68:19-24. But Mr. Lawlor played no

role in these changes. Tr. Trans. 2 at 70:11-20; Tr. Trans. 3 at 153:18-22. These changes, as any

change to Teva’s corporate benefit plan, required approval from the Teva board of directors.

Sabag Dep. Dec. 8 at 19:2-9. And Plaintiff’s evidence as to Mr. Lawlor’s involvement in these

changes was that he was silent on the changes being made and did not take a position on it. Tr.

Trans. 1 at 154:13-157:12. Additionally, these changes were decided in 2015 and later. Tr.

Trans. 1 at 155:6-19; Tr. Trans. 2: 70:21-71:11; Tr. Trans. 3 at 153:9-17; Pl. Ex. 24 at

KEUCH000089. It should be noted that in August 2015, when Plaintiff was 61 years of age,

Teva increased Plaintiff’s salary and provided him a retention bonus to be paid in two

installments in 2016 and 2017 following Plaintiff’s offer from Air Products. Tr. Trans. 1 at

82:11-83:16. Plaintiff received both installment payments. Tr. Trans. 1 at 83:10-16; Tr. Trans. 2

at 58:1-3, 22-25; 59:1-4.

Plaintiff also points to Mr. Lawlor’s statements regarding Teva’s severance plan.

Plaintiff testified that Mr. Lawlor stated: “I do not want people age sixty-two or older who were

severed to endure the embarrassment and humiliation of having to apply for unemployment

insurance. Those individuals are unemployable. They should retire because they are not going to

find employment.” Tr. Trans. 1 at 181:24-185:17. In his testimony Mr. Lawlor denied stating

that employees over the age of 62 were unemployable and should retire. Tr. Trans. 3 at 152:13-

16. Additionally, Mr. Lawlor’s position was that an employee over the age of 62 who was

dismissed should not have to apply for unemployment in order to receive severance benefits. Id.

at 149:13-150:20. He selected the age of 62 because based on data that was the age when Teva

employees began to retire. Id. at 149:13-150:20.

Based on the evidence described, Plaintiff fails to show that Mr. Lawlor had an animus

towards older workers. Mr. Lawlor testified credibly that there were legitimate, non-age related

reasons for not hiring Ms. Riccioli, he played no role in the changes to the equity plan, he denies

making comments about the employability of older workers, and his purpose for changing the

severance plan was to benefit older workers.

But even if Plaintiff had demonstrated animus on the part of Mr. Lawlor, he did not

establish such animus proximately caused the dismissal of Plaintiff. Ms. Zorman testified that

she spoke with Mr. Lawlor approximately 20 times while working on the restructuring of her

team. Tr. Trans. 3 at 28:24-29:7. Ms. Zorman could not recall how many times she discussed

Plaintiff with Mr. Lawlor, or the length of any conversations with Mr. Lawlor regarding Plaintiff.

Id. at 28:24-29:18. Mr. Lawlor testified he recalled having about two conversations with Ms.

Zorman regarding Plaintiff and his position in a new restructure, and that each conversation

lasted roughly ten minutes each. Id. at 108:15-109:2. Ms. Zorman did testify, however, that Mr.

Lawlor’s opinions regarding Plaintiff were important in her decision making. Id. at 85:9-11.

She also testified that neither Mr. Yaniv nor Mr. Lawlor ever asked questions about Plaintiff’s

ability regarding policy, strategy or performance. Id. at 32:21-25. But while Ms. Zorman

considered Mr. Lawlor’s opinion and found it important in her decision-making, the evidence

still does not support a finding that Mr. Lawlor’s purported involvement proximately caused the

dismissal of Plaintiff.

As further evidence of pretext, Plaintiff points to Mr. Sabag’s repeated use of the term

“future” and Plaintiff’s observation that the culture at Teva was youth-oriented, wherein the

company looked to hire and promote younger individuals. Defendants do not dispute that Mr.

Sabag often used these types of phrases. One such instance highlighted by Plaintiff was in the

October 3, 2017 Update on Year-End Compensation that was sent to Teva’s top managers. See

Pl. Ex. 48. In this correspondence Mr. Sabag stated: “Together, we can take the organization

forward and build an amazing future for our company.” Id. But as Defendants have noted, Mr.

Sabag also used this language in correspondence with Plaintiff recognizing Plaintiff’s $25,000

bonus. Def. Ex. 15. In that letter, Mr. Sabag used the phrases “Your work has helped both our

organizations reach this stage, ready to move into the future…,” and “Thank you again for

helping to lead the way to our new future.” Id.

Plaintiff also cites to the age breakdown of the individuals who were dismissed in

connection with the RIF as additional evidence of pretext. The information disclosed by Teva

pursuant to the Older Workers Benefits Protection Act regarding the age breakdown of persons

terminated in connection with the reduction in force indicates that thirty-four (34) of the

employees not retained were over the age of 40, twenty three (23) of these individuals were

between the ages of 50 and 59, and two of these individuals were 60 years old. Def. Ex. 3

(Ex.C). Twenty-three of the individuals selected for termination were under 40 years old. Id.

There were 46 individuals retained: 15 of these individuals were over the age of 50, five were

between the ages of 40 and 49, and the rest were under the age of 40. Id. None of the

individuals retained were 60 years or older. Id.

Plaintiff also points to the retention of Mr. Nasi despite having less experience than

Plaintiff, and that the compensation gap between the two individuals was not so wide. Plaintiff

avers that Ms. Zorman did not have any personal knowledge regarding the professional standing

of Mr. Nasi or Plaintiff, and yet retained Mr. Nasi even though his knowledge of American

and/or Canadian law was limited. With respect to compensation, the evidence presented showed

a distinguishable difference in compensation between Plaintiff and Ms. Nasi. At the time Ms.

Zorman made her decision, Mr. Nasi was earning a base salary of $168,896 with an overall

compensation package valued at approximately $325,000. See Def. Ex. 43. Plaintiff,

meanwhile, was earning a base salary of $285,600 and his overall compensation package was

valued at approximately $574,000. See Def. Ex. 44. But as Plaintiff notes, weeks after

Plaintiff’s dismissal, Mr. Nasi was elevated to a Grade 16 and his salary was raised to

$199,296.90. Teva also had to had to pay relocation expenses for Mr. Nasi to move from his

home in Miami. Additionally, Mr. Nasi traveled between Miami and company headquarters in

North Wales, PA approximately 10 to 12 times during the first six months in the new role. These

trips cost Teva approximately $700-$1000 each time. While the differential may have shrunk

once the relocation and travel expenses are considered, there was still a cognizable difference

between the salary and compensation packages of Plaintiff and Mr. Nasi. And an employer is

not prohibited from considering salaries and compensation packages when making employment

decisions, even though they often correspond with an employees’ age. See Kelly v. Moser,

Patterson And Sheridan, LLP, 348 F. App'x 746, 750 (3d Cir. 2009) (citing Broaddus v. Fla.

Power Corp., 145 F.3d 1283, 1287 (11th Cir.1998) (“The ADEA does not prohibit an employer

from making an employment decision on the basis of higher salaries, increased benefits, pension

status, or claims for medical expenses even though these characteristics are often correlated with

an employee's age.” (citation omitted)).

With respect to Mr. Nasi’s experience level, Ms. Zorman believed that Mr. Nasi could

assume the new role as Head of Total Rewards for North America. Despite his limited

knowledge regarding Canadian and/or American law, prior to assuming the new role Mr. Nasi

had served as Head of Total Rewards for Latin America and was a Director. He had been

discussed as a talent at a Human Resources leadership forum and had represented Total Rewards

for the Americas at a program that Ms. Zorman had hosted in Israel. So while Plaintiff certainly

had more experience than Mr. Nasi, Mr. Nasi was respected and was viewed as a talent within

the organization. Plaintiff himself viewed Mr. Nasi as a talent based on his email to Mr. Nasi

informing him that Ms. Zorman would be contacting him and that Ms. Zorman was likely calling

Mr. Nasi because she wanted Mr. Nasi to lead Total Rewards for the Emerging Markets Region.

Upon consideration of the evidence, Plaintiff has not persuaded the Court by a

preponderance of the evidence to disbelieve Defendants’ “articulated legitimate reasons” for

terminating Plaintiff, nor has Plaintiff demonstrated “such weaknesses, implausibilities,

inconsistencies, incoherencies, or contradictions in [Defendants’] proffered reason[s] for its

action that a reasonable factfinder could rationally find them unworthy of credence, and hence

infer that the [Defendants] did not act for [the asserted] non-discriminatory reasons.” Fuentes, 32

F.3d at 765 (citations and internal quotations omitted.) Plaintiff has also failed to prove that his

age was the but-for cause of his termination. And because Plaintiff has failed to establish his

claims under the ADEA and PHRA, it is unnecessary for the Court to make findings of fact and

conclusions of law regarding damages. See Tarnoski v. United States, No. 3:04-CV-0060, 2007

WL 1387302, at *5 (M.D. Pa. May 8, 2007).

IV. CONCLUSIONS OF LAW

1. Teva is a covered employer under the ADEA and PHRA. See 29 U.S.C. § 621, et

seq.; 43 P.S. §§ 951 et seq.

2. At the time of his termination, Plaintiff was 63 years old and is thus protected

from unlawful age discrimination under the ADEA and PHRA.

3. Plaintiff met his burden under the McDonnell Douglas framework and presented a

prima facie case of age discrimination.

4. Defendants met their burden of establishing legitimate nondiscriminatory reasons

for Plaintiff’s adverse employment decision.

5. Plaintiff has not shown the legitimate nondiscriminatory reasons offered by

Defendants were a pretext for discrimination.

6. Plaintiff has also failed to prove that his age was the but-for cause of his

termination.

7. Plaintiff has thus failed to establish a claim for age discrimination under the

ADEA and PHRA.

8. Accordingly, Judgment is entered in favor of Defendants and against Plaintiff.

BY THE COURT:

/s/ John M. Gallagher

JOHN M. GALLAGHER

United States District Court Judge