DiFederico v. Rolm Co.

Opinions of the United

2000 Decisions States Court of Appeals

for the Third Circuit

1-14-2000

DiFederico v Rolm Co.

Precedential or Non-Precedential:

Docket 96-1169

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Filed January 14, 2000

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 96-1169

CHERI DiFEDERICO,

Appellant

v.

ROLM COMPANY; SIEMENS ROLM COMMUNICATIONS,

INC. (formerly Rolm Company); INTERNATIONAL

BUSINESS MACHINES CORPORATION;

SIEMENS CORPORATION

On Appeal from the United States District Court

for the Eastern District of Pennsylvania

D.C. Civil Action No. 94-cv-06901

(Honorable Ronald L. Buckwalter)

Argued April 26, 1999

Before: SCIRICA, ROTH and McKAY,* Circuit Judges

(Filed January 14, 2000)

PAUL B. BECH, ESQUIRE (ARGUED)

A. RICHARD FELDMAN, ESQUIRE

Bazelon Less & Feldman, P.C.

1515 Market Street - Suite 700

Philadelphia, PA 19102-1907

Attorneys for Appellant

_________________________________________________________________

* The Honorable Monroe G. McKay, United States Circuit Judge for the

Tenth Judicial Circuit, sitting by designation.

RICHARD M. SOLAZZO, ESQUIRE

(ARGUED)

Cummings & Lockwood

Four Stamford Plaza

P. O. Box 120

Stamford, CT 06904-0120

ROBERT A. NICHOLAS, ESQUIRE

Reed, Smith, Shaw & McClay

2500 One Liberty Place

1650 Market Street

Philadelphia, PA 19103-7301

Attorneys for Appellees

OPINION OF THE COURT

McKAY, Circuit Judge.

Plaintiff-Appellant Cheri DiFederico appeals the decision

of the United States District Court for the Eastern District

of Pennsylvania denying her relief under S 510 of the

Employee Retirement Income Security Act [ERISA], 29

U.S.C. S 1140, a provision that makes it unlawful to

interfere with the attainment of rights or benefits associated

with an employee benefit plan.

In her complaint before the district court, Plaintiff alleged

that Defendant-Appellee Rolm Company1 terminated her

_________________________________________________________________

1. Plaintiff also included Defendant-Appellee Siemens Rolm

Communications, Inc., as a defendant in her complaint even though the

communications surrounding Plaintiff's termination were exchanged

exclusively between Plaintiff (through herself, her lawyer, and doctors)

and Defendant-Appellee Rolm Company. The record on appeal does not

establish the exact relationship between Rolm Company and Siemens

Rolm Communications, other than a disclosure of corporate affiliation in

Appellees' Brief indicating that Siemens Rolm Communications, Inc., was

"formerly Rolm Company," and an indication on the letterhead of

Plaintiff's termination notice in the record that Rolm Company was an

"IBM and Siemens Company." J.A. at JA117. The district court's

opinions in this case do not clarify why Siemens Rolm Communications

might be liable for interfering with Plaintiff's disability benefits, see

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employment to avoid obligations under its short- and long-

term sickness and disability plans. The district court

granted Defendant partial summary judgment, ruling that

the short-term plan was not a qualified plan under ERISA

and dismissing all claims arising out of that plan. See

DiFederico v. Rolm Co., No. CIV.A.94-CV-6901, 1995 WL

710561, at *2 (E.D. Pa. Nov. 30, 1995). The district court

then conducted a bench trial on the remaining issues

arising out of the long-term plan.

The testimony and evidence presented to the district

court indicate that Plaintiff worked as a sales engineer for

Defendant from 1983 to 1990, and as a field salesperson

from 1990 to November of 1991. Early in 1991, Plaintiff

began developing symptoms of chronic fatigue and chronic

colitis which began affecting her job performance until she

eventually took short-term sick leave once in July 1991 and

again from September 3, 1991, to November 18, 1991,

when her employment was terminated. The situation

surrounding her termination was, of course, the most hotly

contested evidentiary point of the trial. Plaintiff alleged that

the correspondence between herself, her doctor, her lawyer,

and Defendant and the circumstantial evidence

surrounding the exchange of communications lead only to

the conclusion that Defendant terminated her employment

in an attempt to save money and rid itself of costly long-

term disability benefits obligations. Defendant presented

evidence to the contrary, arguing that, far from ridding

itself of disability obligations, it attempted to accommodate

Plaintiff's developing medical condition until it became clear

that Plaintiff was not going to accept the accommodations

and return to work. In its review of Defendant's evidence,

the district court found it "clear . . . that at all times up

until November 18, 1991 defendant had an opinion from an

independent doctor that plaintiff could return to work with

restrictions." DiFederico v. Rolm Co., No. CIV.A.94-6901,

_________________________________________________________________

DiFederico v. Rolm Co., No. CIV.A.94-6901, 1996 WL 53808, at *1 (E.D.

Pa. Feb. 7, 1996); DiFederico v. Rolm Co., No. CIV.A.94-CV-6901, 1995

WL 710561, at *1 (E.D. Pa. Nov. 30, 1995), but the point appears to be

uncontested and insignificant in this appeal. For purposes of this

opinion, references to Defendant are meant to include both entities.

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1996 WL 53808, at *5 (E.D. Pa. Feb. 7, 1996). The record,

according to the district court, showed that before

November 11, 1991, Defendant offered Plaintiff a new

position with the company--an office job as a sales

engineer not requiring travel and situated near restroom

facilities for those moments of acute colitis. The record also

showed that on November 11, Defendant informed Plaintiff

that failure to appear for work at the new position by

November 18, 1991, would be considered voluntary

resignation. The district court found that notwithstanding

Defendant's attempts to accommodate Plaintiff's condition

Plaintiff failed to report for work, and, as a result, her

employment was terminated on November 18, 1991. See id.

at *4.

At the close of the bench trial, the district court held that

while Plaintiff established a prima facie case of interference

she failed to prove that the legitimate nondiscriminatory

reason offered by her employer for her termination was

pretextual. See id. at *5. According to the district court, the

decision to terminate Plaintiff was not based on an intent to

withhold benefits, rather it "was based upon [P]laintiff's

failure to report for work even after [D]efendant made a

bona fide effort to accommodate her health problems." Id.

at *5 n.3.

In this appeal Plaintiff claims that the district court (1)

applied an erroneous legal standard to her showing of

pretext, (2) erred in requiring her to prove that her

employer's intent to interfere was the sole cause of her

termination, and (3) erred in finding that she had failed to

prove that her employer's reason was pretextual. We

exercise jurisdiction under 28 U.S.C. S 1291.

We begin by addressing the question of whether the

district court applied an erroneous legal standard to

Plaintiff's showing that Defendant's reasons for terminating

her were pretextual. We apply a plenary standard when

reviewing a district court's application of legal standards to

the facts. See FMC Corp. v. United States Dep't of

Commerce, 29 F.3d 833, 838 (3d Cir. 1994).

Section 510 of ERISA prohibits " `employers from

discharging or harassing their employees in order to keep

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them from obtaining [employee] benefits.' " DeWitt v. Penn-

Del Directory Corp., 106 F.3d 514, 522 (3d Cir. 1997)

(quoting Haberern v. Kaupp Vascular Surgeons Ltd., 24 F.3d

1491, 1501 (3d Cir. 1994)). The legal standard in S 510

cases is very clear. To recover, a plaintiff must demonstrate

that the defendant had the " `specific intent' " to violate

S 510. Id. This requires the plaintiff to show that "the

employer made a conscious decision to interfere with the

employee's attainment of pension eligibility or additional

benefits." Id. at 523 (citing Gavalik v. Continental Can Co.,

812 F.2d 834, 860 (3d Cir. 1987)). The plaintiff may use

both direct and circumstantial evidence to establish specific

intent, but when the plaintiff offers no direct evidence that

a violation of S 510 has occurred, the court applies a

shifting burdens analysis, similar to that applied in Title VII

employment discrimination claims. See Gavalik, 812 F.2d

at 851-53 (applying the McDonnell Douglas, 411 U.S. 792,

802 (1973), shifting burdens mechanism). In this burden-

shifting analysis, the plaintiff must first establish a prima

facie case by showing: "(1) prohibited employer conduct (2)

taken for the purpose of interfering (3) with the attainment

of any right to which the employee may become entitled."

Id. at 852. If the plaintiff is successful in demonstrating her

prima facie case, the burden then shifts to the defendant-

employer, who must articulate a legitimate,

nondiscriminatory reason for the prohibited conduct. If the

employer carries its burden, the plaintiff then must

persuade the court by a preponderance of the evidence that

the employer's legitimate reason is pretextual. See Texas

Dep't of Community Affairs v. Burdine, 450 U.S. 248, 252-

53 (1981).

In the case at hand, the district court applied the shifting

burdens framework correctly. After Plaintiff established her

prima facie case, Defendant articulated a legitimate,

nondiscriminatory reason for its adverse employment

decision--explaining that it fired Plaintiff for failing to

return to work even after it had attempted to accommodate

her condition. After Defendant carried its burden, Plaintiff

was permitted to present evidence that Defendant's reason

was pretextual. Plaintiff produced circumstantial evidence

of Defendant's financial difficulties coinciding with her

dismissal, but the district court concluded that Plaintiff's

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evidence was not enough to prove that Defendant's

legitimate reason was a pretext. See DiFederico, 1996 WL

53808, at *5. The court explained that to find that

Defendant had the specific intent to interfere with Plaintiff's

attainment of benefits, Plaintiff would have needed to prove

by a preponderance of the evidence that "the reasons

offered by defendant . . . [were] not credible." Id. Such

evidence would have then supported the inference that "the

employer was motivated by an unlawful reason or reasons."

Id. But the court concluded, "There [was] simply no

objective evidence from which [it could] find defendant's

explanation incredible." Id. It reviewed the "particularly . . .

truthful and sincere" testimony of Plaintiff's supervisor and

reported that "[t]here was not the slightest hint . . . that

any decision with respect to [P]laintiff's continued

employment was based upon a desire to save the

[D]efendant from paying [long-term disability] benefits." Id.

In reference to its conclusion, the court noted,

"Unfortunately for plaintiff, there is no `smoking gun[,'] the

lack of which is not unusual in cases of this nature." Id.

Plaintiff seizes upon this statement as evidence that the

court, while ostensibly stating the correct legal standard,

actually applied an erroneous legal standard that would

require her to present direct evidence of a smoking gun to

prove that her employer's reason was pretextual. See

Appellant's Reply Br. at 1. It seems to us, however, that the

court was simply explaining its application of the

circumstantial evidence standard. Cf. Gavalik, 812 F.2d at

852 ("In most cases . . . specific intent to discriminate will

not be demonstrated by `smoking gun' evidence. As a

result, the evidentiary burden in discrimination cases may

also be satisfied by the introduction of circumstantial

evidence." The court was merely commenting on an

unfortunate reality: Plaintiff could not present any direct

evidence of her employer's specific intent to interfere, and

the circumstantial evidence she presented in place of direct

evidence was not compelling. We cannot conclude that the

district court's comments in this regard amounted to the

application of an erroneous legal standard.

Alleging another error of law, Plaintiff claims that when

the district court required her to prove that Defendant's

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proffered legitimate reason was pretextual, it actually

required her to prove that Defendant's discriminatory

motive was "the sole cause" of her termination. Appellant's

Amended Br. at 35. Plaintiff argues that the law only

requires her to prove that her employer's intent to interfere

" `contributed to' " or was " `a motivating factor in' " the

decision to terminate her employment. Id. at 35 (quoting

Humphreys v. Bellaire Corp., 966 F.2d 1037, 1043 (6th Cir.

1992)). Her argument seems to confuse several statements

of the legal standard applicable in S 510 cases.

While it is true we have stated that "a plaintiff need not

prove that `the sole reason for his [or her] termination was

to interfere with [employee benefit] rights,' " DeWitt, 106

F.3d at 522 (quoting Gavalik, 812 F.2d at 851), once the

defendant articulates and presents evidence of a legitimate,

nondiscriminatory reason for its action, the plaintiff must

meet its " `ultimate burden of persuasion,' " St. Mary's

Honor Ctr. v. Hicks, 509 U.S. 502, 511 (1993); see also

Gavalik, 812 F.2d at 859, by proving that the defendant

discriminated against her. See Miller v. CIGNA Corp., 47

F.3d 586, 597 (3d Cir. 1995) ("[T]he plaintiff's burden is to

show that the prohibited consideration played a role in the

decisionmaking process and that it had a determinative

influence on the outcome of that process.") To satisfy this

burden in circumstantial evidence cases like this one, a

plaintiff must prove that the legitimate reason proffered by

the defendant was pretext for the real discriminatory reason

behind the employment action.2See Burdine, 450 U.S. at

256 (holding that after a defendant sets forth a legitimate

reason, the plaintiff must "demonstrate that the proffered

reason was not the true reason for the employment

decision"). A plaintiff "may succeed in this either directly by

persuading the court that the discriminatory reason more

likely motivated the employer or indirectly by showing that

the employer's proffered explanation is unworthy of

_________________________________________________________________

2. Proving that the legitimate reason was pretext is necessary to

establish a discriminatory claim but might not be sufficient. "A finding

that the employer's nondiscriminatory explanation is a pretext permits,

but does not require, the trier of fact to conclude that the employer

discriminated against the plaintiff based on the ground alleged." Miller,

47 F.3d at 596 (citing Hicks, 509 U.S. at 511) (emphasis added).

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credence." Id. Thus, the analysis of pretext is designed to

focus the court's attention on whether the defendant's

proffered reason is the real reason. It assumes that if the

plaintiff had evidence of other illegitimate motivating factors

which contributed to the employment decision, she either

would have used that evidence in her attempt to persuade

the court that the defendant's legitimate reason was pretext

or would have included direct evidence of those motivations

in her initial action and circumvented the entire

circumstantial evidence inquiry altogether. See, e.g.,

Gavalik, 812 F.2d at 853 (noting that where the plaintiff's

case consists of direct evidence, the McDonnell Douglas-

Burdine shifting burdens mechanism is inapplicable).

Plaintiff is correct to point out that the plaintiff of a

circumstantial evidence case need not prove that the intent

to interfere was the sole reason for the adverse employment

decision. Her argument is not necessarily inapplicable to

cases applying the circumstantial evidence standard, see,

e.g., Miller, 47 F.3d at 597 & n.9 (describing the

applicability of a plaintiff-need-not-prove-sole-cause

instruction in pretext cases "where the plaintiff's evidence

of discrimination is sufficiently `direct' to shift the burden of

proof to the employer on the issue of whether the same

decision would have been made in the absence of the

discriminatory animus"), but the primary focus of the

court's analysis in those cases is different. The court is

presented with a single legitimate reason proffered by the

defendant which the plaintiff is trying to prove pretextual

with an argument constructed from the coincidence of a

number of circumstances. This is where the pretext

analysis is so useful. If the plaintiff proves that her

employer's proffered reason was pretext, the court may

infer that the employer was in fact motivated by the specific

intent to interfere with the attainment of benefits. If, on the

other hand, the plaintiff fails to prove that her employer's

proffered legitimate reason was pretext, she has not

persuaded the court that a discriminatory reason played

any role in her termination of employment and it helps her

case little to speak of other possibly contributing reasons.3 A

_________________________________________________________________

3. While our opinions and the opinions of other circuits do sometimes

use terms like "a motivating factor," "contributing factor" and "sole

8

court, like the district court in this case, simply cannot

make the unfounded inference that an employer acted with

the specific intent to interfere with the plaintiff's attainment

of benefits.

The situation presented by this case makes Plaintiff's sole

cause argument somewhat beguiling. While it may have

appeared that the court was forcing Plaintiff to prove that

the discriminatory reason was the sole cause of her

termination, the district court in fact did not require

Plaintiff to prove that one reason or another was the sole

cause of her termination. It merely required her to prove, as

part of her ultimate burden of persuasion, that Defendant's

proffered legitimate reason was pretext. Cf. Burdine, 450

U.S. at 256 (holding that after a defendant sets forth a

legitimate reason, the plaintiff must "demonstrate that the

proffered reason was not the true reason for the

employment decision"). Plaintiff's sole cause arguments are

simply extraneous to our review of the district court's

analysis.

Plaintiff's argument that the district court should have

applied "a motivating factor" standard to her claim is

mistaken as well because she was required to "show that

the prohibited consideration played a role in the

decisionmaking process and that it had a determinative

influence on the outcome of that process." Miller, 47 F.3d at

597 (emphasis added). The circumstantial evidence Plaintiff

presented in this case failed to convince the district court

that her employer's intent to interfere was even a factor at

all in the employment decision. After reviewing the

testimony of Plaintiff's supervisor, the district court

determined that "[t]here was not the slightest hint . . . that

any decision with respect to [P]laintiff's continued

employment was based upon a desire to save [D]efendant

from paying [the long-term disability] benefits." DiFederico,

_________________________________________________________________

reason" to describe and characterize what is or is not an employer's

motive, see DeWitt, 106 F.3d at 522; Gavalik, 812 F.2d at 851;

Humphreys, 966 F.2d at 1043, we believe it is preferable, in a pretext

case analysis, to speak either in terms of "determinative" as the district

court did in this case, DiFederico, 1996 WL 53808, at *5; see also Miller,

47 F.3d at 597, or "real reason" as the Supreme Court did in Hicks, 509

U.S. at 511 n.4.

9

1996 WL 53808, at *5. The court simply could notfind any

evidence, direct or circumstantial, upon which to make an

inference that her employer was motivated in its decision

by unlawful reasons. The district court stated:"There has

to be more than the coincidence of these two factors

(defendant's financial woes and plaintiff's termination) to

support an inference that the one came about as a result

of the other." Id. at *6. We conclude that the court did not

err in allocating the burdens of persuasion and the

corresponding legal standards for circumstantial evidence

cases.

In her final claim on appeal, Plaintiff argues that the

district court erred in finding that her circumstantial

evidence did not prove that Defendant's legitimate reason

was pretextual. Plaintiff does not appear to challenge

whether the district court had an adequate factual basis

upon which it could base its ultimate determination that

she failed to show pretext. Instead, she contends that the

court's "underlying factual findings" themselves were

"unsupported by substantial evidence, lacked adequate

evidentiary support in the record, were against the clear

weight of the evidence, and/or were the product of a

misapprehension of the weight of the evidence." Appellant's

Amended Br. at 36-37. In other words, Plaintiff asserts not

that the district court's ultimate conclusion lacks sufficient

factual support but that those factual findings themselves

are unfounded. We review a district court's factualfindings

for clear error. See Gavalik, 812 F.2d at 850. Under the

clearly erroneous standard, however, " `[i]t is the

responsibility of an appellate court to accept the ultimate

factual determination of the fact-finder unless that

determination either (1) is completely devoid of minimum

evidentiary support displaying some hue of credibility, or (2)

bears no rational relationship to the supportive evidentiary

data.' " Coalition to Save Our Children v. Board of Educ., 90

F.3d 752, 759 (3d Cir. 1996) (quoting Krasnov v. Dinan,

465 F.2d 1298, 1302 (3d Cir. 1972)).

Plaintiff complains that the district court's findings

number 18, 23, 27, 28, 30, 31, 38, 42, and 44 are clearly

erroneous. Instead of addressing each of the challenged

findings in turn, as briefed by the parties, we can conclude

10

that the district court's findings involved credibility

determinations which are supported by the record and

which we will not second-guess. While there may be

evidence and inferences to the contrary, we cannot say that

the findings are devoid of credible evidentiary support or

that they lack a rational relationship to the evidentiary

data. Based on our review of the record as a whole, we hold

that none of the district court's factual findings are clearly

erroneous and we affirm the court's ultimate conclusion.

AFFIRMED.

A True Copy:

Teste:

Clerk of the United States Court of Appeals

for the Third Circuit

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