Petition for Writ of Certiorari — McNeil v. Economics Laboratory, Inc.

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IN THE !

SUPREME COURT OF THE UNITED STATES

October Term, 1986

JOHN W. MC NEIL,

Petitioner,

No. 85-1398 VS.

ECONOMICS LABORATORY, INC.,

Respondent.

PETITION FOR WRIT OF CERTIORARI

TO THE SEVENTH CIRCUIT COURT OF APPEALS

Bernard P. Reese, Jr.

REESE, REESE & BAGLEY

979 North Main Street

Rockford, Iliinois 61103

815/968-8851

Attorney for Petitioner,

John W. McNeil.

\ i

QUESTIONS PRESENTED

Petitioner requests review of the

majority opinion of the Seventh Circuit

Court of Appeals on his cross-appeal of

the District Court's denial of front pay

and liquidated damages under the Age

Discrimination in Employment Act of 1967

(ADEA) and presents the following

questions:

le. Is front pay a remedy under the

ADEA which is to be uniformly recognized

and applied by the circuits so as to

implement enforcement of the ADEA?

2. What evidence will establish a

prima facie case of entitlement to front

pay, and does the denial of front pay to

petitioner illustrate that the protected

group under ADEA has been deprived of a

just consideration of that issue which

requires redress?

i What definite role is to be

assigned the liquidated damage clause of

§7(b) of the ADEA as an essential means of

compelling compliance with the ADEA, and

in light of that function and as

illustrated in the case at bar, does the

lower court properly interpret and apply

the Supreme Court's definition of

"willful" as published in Trans World

Airlines, Inc. v. Thurston, 469 U.S. lll

(1985).

4. In the context of question 3, what

evidence establishes a prima facie case of

a willful violation, and has petitioner as

a representative of the protected group

been denied just consideration of the evi-

dence under a proper application of the

law?

iii

TABLE OF CONTENTS

Questions Presented 2. « « « « « «

Index to Appendix .« « « « « « e

Table of Authorities ....« « e«

Opinion Below . « « « «© «© «© « « «

Jurisdictional Statement 2... -«

Statutes and Regulation . . « e« e

Statement of the Case .« « « « « «

Argument For Granting the Writ.

I. This Court Should Declare

Front Pay as a Remedy Under

ADEA and Provide Clear

Evidentiary Guidelines For

Its Application . « « « e e

II. This Court Should Provide

Clear Evidentiary Guidelines

Inder Section 7(b) of the

ADEA, Particularly ina

Non BFOQ Circumstance ...

Conclusion > 2 a ee ee ee ee

Page

INDEX TO APPENDIX

App. Page

Appendix A. Opinion of United

States Court of Appeals Seventh

Circuit . . > > . > 7 . >. . 7 7 . o l

Appendix B. Order of United States

District Court for the Northern

District of Illinois Western

Division - > > > >. > >. <a >. > >. > > 14

Appendix C. Order of United States

Court of Appeals for the Seventh

Circuit denying Petition for

Rehearing of plaintiff on Cross-

appeal «ce ceecec ec eevee ee @ 43

Appendix D. Order of United States

Court of Appeals for the Seventh

Circuit denying Petition for

Rehearing of defendant on

its Appeal .« «© «© «© «© es e«e-eee 6 44

Appendix E. 29 USCS §623(a) ..««. -« 45

Appendix F. 29 USCS §626 . .« « « « « 46

Appendix G. 29 CFR 2617 [44 Fk 66791] 48

Appendix H. Policy manual of

Economics Laboratory, Inc.,

Section D, pe. 21-A; Fair

Employment Practices, Section

B, pe 33 Economics Laboratory,

Inc., official publication,

Focus, January 1981 . « « «© « « « « 49

TABLE OF AUTHORITIES

Cases Page

Davis v. Combustion Engineering,

Ince, /42 F.2d 916 th Cir. 1984) ll

Equal Employment Opportunity

Commission v. Prudential Federal

Savings and Loan Assoc., 763 F.2d

1166, 1172 (10th Cir. 1984)

(cert. denied 106 S.Ct. 530) .« . . 12-13

dage “thers ve Kennecott Corp.,

10 F.2d 76 (2nd Cir. 1983) ... 17

Koyen v. Consolidated Edison Co.,

560 F.Supp. L161 (S.D.N.Y 1983) . 12

Maxfield v. Sinclair International,

766 F.2d 7838 (3d Cir. 1985)

(cert. denied, 106 S.Ct. 796) .. 13

McDonnell Douglas Corp. v. Green,

411 U.S. 792 (1973) « « «© © © ec e 14,18

O'Donnell v. Georgia Osteopathic

Hospital, Inc., 7/48 F.2d 1543

(Lith Cir. 1984) weeevevee 13

Trans World Airlines, Inc. Vv.

Thurston, 469 U.S. lll (1985) . .i1,16,18

Whittlesey v. Union Carbide Corp.,

742 F.2d 724 (2nd Cir. 1984) ... 13

No.

IN THE

SUPREME COURT OF THE UNITED STATES

October Term, 1986

JOHN We. MC NEIL,

Petitioner,

No. 85-1398 VSe

ECONOMICS LABORATORY, INC.,

Respondent.

PETITION FOR WRIT OF CERTIORARI

TO THE SEVENTH CIRCUIT COURT OF APPEALS

OPINION BELOW

The Opinion of the Seventh Circuit

Court of Appeals is contained herein as

Appendix A and the citation thereof is

F.2d (1986.)

JURISDICTIONAL STATEMENT

(1) - Judgment of the Seventh Circuit

Court of Appeals was rendered on August

27, 1986. (App. A)

(ii) Petitioner's timely Petition for

Rehearing on his cross appeal (No.

85-1398) was denied on December 8, 1986.

This Petition was filed within ninety (90)

days of that date. This Court's jurisdic-

tion is invoked in 28 U.S.C. §1337.

STATUTES AND REGULATIONS

29 U.S.C. $621, et seq.e, and Fair

Labor Standards Act, 29 U.S.C. §201-219;

specifically involved is 29 U.S.C. §623(a)

1 (App. E); §626(a)(App.F); §626(b) (herein

called §7b) and 29 C.F.R. 2617 [44 FR

66791] (App. G).

STATEMENT OF THE CASE

Petitioner, employed thirty-two (32)

years with respondent, was terminated on

January 23, 1981 without prior notice or

warning. The District Court, after an

eleven (11) day bench trial, ruled on

January 30, 1985 that respondent _ had

unlawfully discharged petitioner in viola-

tion of the ADEA and awarded him damages

of Eighty-eight Thousand ($88,000)

Dollars, but denied him front pay, and

further determined respondent's violation

was not willful.

Respondent appealed to the Seventh

Circuit Court of Appeals and petitioner

cross appeaied. The Court of Appeals, in

their decision of August oe 1986,

affirmed the Order of the District Court.

On December 8, 1986 the Court of

Appeals denied the Petition for Rehearing

of respondent,i/ and also denied peti-

tioner's Petition for Rehearing on his

cross appeal .2/

At discharge, petitioner was an

assistant vice president; over budget in

sales; no negative comments in his person-

nel file from 1969 to 1981; excellent

relationship with his customers.

Henry Snyder, the supervisor respon-

sible for petitioner's termination, did

not check his sales records, his personnel

file, or talk to his immediate supervisor

who was "surprised" at petitioner's ter-

mination.

At the same time, respondent was

understaffed in petitioner's division,

advertising for help in an area of

petitioner's expertise, and implementing a

declared policy by Snyder to replace the

Older employees with younger people.

No records or documentation of any

Kind were kept by respondent concerning

petitioner's termination. The trial

judge, as the finder of fact, found

respondent's proffered reasons for

petitioner's termination not only pretex-

tual, but without credence,

ARGUMENT FOR GRANTING THE WRIT

The 1960s, while fraught with vio-

lence, produced some substantial “civil

rights" legislation designed to protect

downtrodden elements of our society. This

petition addresses one category of those

requiring protection, the older American

worker.

Age discrimination in employment is a

problem that faces thousands of American

workers.2/

‘Many employers establish arbitrary age

limits which both restrict the availabi-

lity of new jobs and force the premature

2/ See H.R. Rep. No. 805, 90th Cong., lst

Sess. 2 (1967); Legal Problems Affecting

Older Americans: Hearings Before The

Special Senate Comm. on Aging, 9lst Cong.,

2nd Sess. 19 (1970); U.S. Dept. of Labor,

Report to the Congress on Age Discrimina-

tion in Employment under §715 of the Civil

Rights Act of 1964: Research Materials

67-69; Age Discrimination in Employment:

The Problems of the Older Worker, 41 NYUL

Review 383, 384-88, 1966.

retirement of old employees.3/ Even

during periods of relatively low

unemployment the percentage of older per-

sons unable to find work is stated as

being disproportionately high.4/

President Johnson in his "Older

Americans" message ot January 23, 1967

(ll3th Cong. Record 34743-44 (1967))

expressed the bipartisan sentiment of the

Congress that age discrimination consti-

tuted a serious economic threat to the

nation and represented even a greater loss

3/ See 113 Cong. Rec. 31256-57 (1967);

Age Discrimination in Employment: Hearings

on Age Discrimination Bills before the

Subcomm. on Labor of the Senate Comm. on

Labor and Public Welfare, 90th Cong., lst

Sess. 22 (1967).

4/ Age Discrimination in Employment:

Hearings on Age Discrimination Bills

Before the General Subcomm. on Labor of

the House Comm. on Education and Labor,

90th Cong., lst Sess. 7 (1967); Kovarsky

and Kovarsky, Economic, Medical and Legal

Aspects of the Age Discrimination Laws in

Employment, 27 Vand. Le Rev. 839, 840

(1974); 41 NYUL Review at 384,

in the “cruel sacrifice” and unhappiness

which joblessness imposes on those citi-

zens and their families.

Congress might have amended Title VII

of the 1964 Civil Rights Act to include

age as a protected classification.

Reflecting the depth of concern on the

issue, however, Congress dealt specifi-

cally with the matter by passing the Age

Discrimination in Employment Act (ADEA)5/

which was intended to insure that deci-

sions concerning employment would be made

on objective evaluations rather than on

misconceptions about the effects of age on

ability.

Does. the evidence indicate the ADEA

has been successful in achieving this

objective? The answer is a resounding No!

As in the area of other “civil rights",

2/ 29 U.S.C. §§621-634.

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the warfare is intense, political, and

fraught with tremendous economic casu-

alties to the "protected group."

The U.S. Department of Labor, Bureau

of Labor Statistics, reveals that in the

55 to 64 age bracket, those employed of

the total employed civilian labor force

dropped from 13.8% in 1970 to 10.6% in

1985 and 10.4 in 1986; and those employed

of the total employed civilian labor force

age 65 and over dropped from 3.8% in 1970

to ‘iicainiate 2.6% in 1985 and 1986,

The evidence thus indicates the frustra-

tion of a national policy designed to pre-

vent discrimination of the older employees

in the work force.

This case illustrates why the ADEA is

a hollow victory for the "protected

group," and proclaims a solution.

While the cost of litigation, the

delay in litigation, the difficulty of

wo a eA Agll

counsel obtaining proper reimbursement for

fees and costs in this problematical area

of litigation are in themselves. over-

whelming barriers, this case illustrates,

we contend, the two critical reasons for

the crippling of national policy as

expressed in the ADEA.

Simply stated, they are the failure to

include front pay as well as sanctions for

a willful violation of the Act, as

realistic civil remedies in the enfor-

cement of the ADEA.

IT.

THIS COURT SHOULD DECLARE FRONT PAY AS

A REMEDY UNDER THE ADEA AND PROVIDE CLEAR

EVIDENTIARY GUIDELINES FOR ITS APPLICATION

When the trial judge wrote his opinion

in this case on January 30, 1985, the

Supreme Court had not ruled on front pay,

the Seventh Circuit had not ruled on front

pay, and the circuits were in conflict.

eosin inti

The judicial climate enabled the defendant

to argue to the trial court,

the court of appeals,

"While the United States Supreme

Court has not addressed the

issue, the Federal Appellate

Courts are split on whether

future damages are even available

under the ADEA. .. . ([sjeveral

courts have rejected claims by

plaintiffs that the ADEA permits

damages for future economic loss

or have denied such awards as too

speculative." (citing cases)6/

as he did to

The trial judge denied the plaintiff

front pay although he found that

John

McNeil had attempted to obtain employment

without success and stated:

That a person in his position was

not successful in his quest for

employment is not at all sur-

prising to this court. It is in

fact a classic example ot one

reason for the passage of the

ADEA, namely, to prevent the

discharge of employees who are in

the twilight of their careers and

Def's Reply Brief to the 7th

Court of Appeals, pe. 29, 30.

Cite

who have little prospect for re-

employment.// (emphasis supplied)

The trial court's language emits a

hidden plea for evidentiary guidelines in

the area of front pay. The Appellate

Court joined the apparent majority, and

here recognized for the first time front

pay as an available remedy.8/ In spite of

McNeil's age, however,9/ while Judge

Cudahy would have remanded for further

proceedings on the issue of front pay, the

majority refused to remand and denied

petitioner's request for a rehearing.

In transparent contrast to the philo-

sophy of the Seventh Circuit majority opi-

nion here, the Sixth Circuit in Davis v.

V/ Trial Court Opinion, App. B.

8/ Appellate Court Opinion, App. A.

9/ Age 61 when terminated, 65 at the

trial, and 67 at the time of this brief.

Combustion Engineering, Ince, 742 F.2d

ie AP cenit naan dial

916, 923 (6th Cir. 1984), said:

We emphasize, however, that an

award of front pay must. be

governed by the sound discretion

of the trial court and may not be

appropriate in all cases. For

example, the award of front pay

to a discriminatorily discharged

41 year old employee until such

time as he qualifies for a pen-

sion might be unwarranted. On

the other hand, the failure to

make such an award for an

employee a age - 63, and likewise

discriminatorily - discharged,

might be an abuse of discretion.

(emphasis ot ours

The Tenth Circuit in Equal Employment

Opportunity Commission Ve Prudential

Federal Savings and Loan Assoc., 763 F.2d

1166, 1172 (10th Cir. 1984) (cert. denied

106 S.Ct. 530) (quoting Koyen Ve

Consolidated Edison Co., 560 F.Supp. 116l,

1168 (S.D.N.Y. 1983)), stated:

The manifest purpose of this

broad grant of legal and

equitable power is to enable the

courts to fashion whatever remedy

is required to fully compensate

an employee for the economic

injury sustained by him. .. .

[T]o authorize an award of future

loss of earnings in appropriate

cases (and) .. . to deny such

authority would remove a

deterrent force against future

violations.

So while the majority of circuits

recognize the principle of front pay,10/

without guidelines, front pay realisti-

cally is an illusive phantom. The benefi-

ciary of this position has been the errant

employer discriminating in violation of

the ADEA,

Apsent the teeth of front pay as a

realistic remedy under the provisions of

the Act, an employer is under no real risk

in the termination of an employee within

the protected age bracket. The employer

10/ In addition to the 6th, 7th and 10th

Cire, Whittlesey v. Union Carbide Corp.,

742 F.2d 724 (2nd Cir. 1984); Maxfield v.

Sinclair International, 766 F.2d 788 (3d

Cir. 1985) (cert. denied 106 S.Ct. 796);

O'Donnell v. ceorgie Osteopathic Hospital,

1543, 1551 (llth Cir.

Inc., 748 Fe2d

is thus permitted to “borrow” the violated

employee's wages for a lengthy period of

time, for the most part without intereest,

and with the possibility that repayment

will never be required,

The evidentiary guidelines for burden

of proof for a prima facie case

established by this court in McDonnell

Douglas Corp. v. Green, 411 U.S. 792

(1973), made the ADEA a viable act.

Similar account needs to be taken by this

court on the issue of front pay.

In adapting the McDonnell Douglas bur-

den of proof format to the front pay

issue, the employee would be required to

show that he had made legitimate efforts

to obtain similar type employment with

Similar pay and benefits without success,

The burden would then shift to the

employer to show the employee either had

not made the eftort described, or that

Similar jobs were actually available to

him which he had either refused to accept

or failed to take advantage of. The bur-

‘den would then shift back to the employee

to demonstrate that the evidence produced

by the employer was inapplicable oor

incorrect. An employee 6V years or older

terminated in violation of the provisions

of the ADEA would establish a prima facie

case aS a matter of law entitling that

employee to front pay, unless rebutted by

clear and convincing evidence on the part

of the employer that the terminated

employee could in fact have obtained

employment elsewhere of a same or similar

character at the same or similar wage

scale.

This case represents a unique factual

setting enabling this Court to not only

unanimously establish front pay and the

burden of proof required, but illustrate

the application.

II.

THIS COURT SHOULD PROVIDE CLEAR

EVIDENTIARY GUIDELINES UNDER SECTION 7(b)

OF THE ADEA, PARTICULARLY IN A NON BFOQ

CIRCUMSTANCE,

The paucity of cases declaring a

willful violation of the ADEA is a judi-

cially created reason for the ineffec-

tiveness of the ADEA. A clear and une-

quivocable declaration is essential to

require the realistic application of the

provisions of Section 7(b) as a necessary

weapon in the arsenal to prevent discrimi-

nation,

In Trans World Airlines, Inc. v.

Thurston, 469 U.S. lll (1985), this court

postulated a definition of a "willful"

violation which is more appropriate to a

BFOQ situation with which the court was

there confronted.

In a non BFOQ situation, however, that

definition of "willful" leaves each cir-

cuit pretty much to its own philosophical

evaluation of the evidence to determine if

"the employer either knew or_- showed

reckless disregard for the matter of

whether its conduct was prohibited by the

ADEA." That the Seventh Circuit is "more

Stringent” in its evidentiary requirements

has been recognized by the Tenth Circuit

opinion, Hagelthorn ve. Kennecott Corp.,

710 «6486 76 USNS CEE EES) That

"stringency" is reflected in the opinion

of the district court in stating that

plaintift carried a very “heavy burden" in

establishing willful.il/

The Seventh Circuit Court of Appeals

Stated the trial court's finding was “not

11/ pist. Ct. Opin. (App. B).

clearly erroneous especially in light of

Thurston." (emphasis ours)

Thurston is thus misinterpreted and

misapplied in non BFOQ cases, and the bur-

den of proof issue in establishing willful

remains unresolved and in conflict in the

circuits.

It is argued the tone of Thurston per-

mits, and perhaps requires, a lower court

to avoid the finding of willful as being a

"too harsh" interpretation of the ADEA,

except in extremely rare situations.

Again the guidelines of McDonnell

Douglas are adaptable and necessary. If

plaintiff employee establishes a discrimi-

natory motive, and the articulated reasons

for discharge by the employer are deter-

mined by the finder of fact to be pretex-

tual in content, not in good faith, or

Similar findings, then the burden would

shift to the employer to demonstrate that

he made every reasonable effort to deter-

wie whether the plan he was following

would constitute a violation of the law.

If, on the failure to produce such evi-

dence, or upon his production thereof, if

the employee sustained the burden to show

that such proffered "reasonable effort"

was pretextual, a willful violation of the

Act would be proven with the consequence

of double damages.

The instant case contains the ingre-

dients necessary to not only promulgate

such a burden of proof formula, but its

application.

This is one of those rare cases which

illustrate not only a declared policy of

discrimination by the employer, but a

record replete with illustrations of the

application of such policy, and at the

Same time absolutely devoid of any effort

on the part of the employer to comply with

the Act's requirements for recordkeeping,

12/ or its own company policy on record-

keeping ,13/ when dealing with an employee

within the protected group. Respondent's

untruthful, or at best misleading, answers

to plaintiff's discovery interrogatories

also sought to avoid the disclosure of

such failure.

CONCLUSION

Either the ADEA is to be a viable

national policy utilizing the tools of

front pay and Section 7(b) of the Act to

see that it is properly implemented, or it

Simply becomes a viper dissipating the

12/ 29 CFR 2617 [44 FR 66791] [effective

11.21.79) {§1627.3 under subpart B -

record to be kept relating to age; Notice

to be posted], App. G.

13/ Respondent's Official Company

Publication; App. 4H; Company's Policy

Manual, p. 3 and p. 21-A, App. H.

court's time and energy and overburdening

the judiciary with tortuous and expensive

litigation with limited success,

As aptly illustrated by this case, the

Act which is to protect this extremely

important segment of our society is

willfully abused without fear of reprisal.

The failure to include front pay and the

omission of sanctions has reduced one of

the most important pieces of civil rights

legislation to mere advice or a caution

among America's big business concerns,

rather than a law embodying national

policy to be obeyed. |

Like a voice crying in the wilderness,

so do older Americans cry for justice in

the marketplace. To refuse their cry and

allow grievous wrongs to go unanswered in

this area is to turn our back on that

segment of society which have been the

‘leaders in the very areas of commerce and

business now dispossessing them of their

rights in alarming numbers.

The record here declares most elo-

quently the plight of such a represen-

tative individual. Wrongfully terminated

in 1981, he represents that group of

Americans which still await justice.

Respectfully submitted,

REESE, REESE & BAGLEY,

Bernard P. Reese, Jre,

Attorney tor Petitioner,

John W. McNeil.

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aida

APPENDIX A

United States Court of Appeals

Bor the Seventh Cirrntt

Nos. 85-1332 and 85-1398

JOHN W. MCNEIL,

Plaintiff-Appellee,

Cross-Appellant,

ECONOMICS LABORATORY, INC.,

Defendant-Appellant,

Cross-Appellee.

Appeals from the United States District Court

for the Northern District of Illinois, Western Division.

No. 81 C 20150—Stanley J. Roszkowski, Judge.

ARGUED FEBRUARY 13, 1986—DeEcIDED AuGust 27, 1986

Before CUDAHY and CoFFEY, Circuit Judges, and

EvANS, District Judge.*

CupDAHY, Circuit Judge. Plaintiff John McNeil brought

an action pursuant to the Age Discrimination in Employ-

ment Act of 1967 (the “ADEA”), 29 U.S.C. § 621 et seq.,

against his employer, Economics Laboratory, Inc., for his

discharge from employment. The district court, in a bench

trial, granted judgment for the plaintiff in the amount of

* Honorable Terence T. Evans, District Judge for the Eastern

District of Wisconsin, is sitting by designation.

Nos. 85-1332 & 85-1398

$88,000, plus costs and attorney’s fees. The defendant ap-

peals and plaintiff cross appeals. We affirm.

In 1949 McNeil began working for Klenzade-New York,

a company that specialized in the production and sale of

sanitation chemicals and equipment for the dairy, bever-

age and food industries. In 1962 Economics Laboratory

purchased Klenzade-New York. McNeil continued to work

for Klenzade as manager of Klenzade’s New England Divi-

sion. In 1966 McNeil was transferred from this position

to the position of Eastern Area Sales Manager for the

Klenzade Division. In this position he managed a sales

staff that sold chemical cleaning compounds to various

industries. In 1972 McNeil became the Assistant Vice

President and Sales Manager of the Engineering Division.

There was some evidence of friction between McNeil and

his co-workers, but the district court found that his per-

sonnel file contains only favorable performance appraisals.

Dist. Ct. Order at 11. Plaintiff underwent treatment at

an alcoholism treatment center in 1978, apparently as a

result of pressure by his superiors. After his completion

of the rehabilitation program, McNeil was given the posi-

tion of Assistant Vice President-Original Equipment Man-

ufacturer Sales Manager for the Equipment Engineering

Department of the Klenzade Division. In this position he

_sold cleaning systems to third party distributors of Klen-

zade equipment.

At the time of plaintiff's discharge he was supervised

by James Watson, who reported to Robert Sistowicz, who

in turn reported to Henry Snyder. Synder testified that

in January 1981 he was instructed by his superior to re-

duce expenses as part of a corporation-wide expense re-

duction effort. Snyder claims to have directed Richard

Rintelmann, Vice President of Marketing for the Klen-

zade Division, to make recommendations for the expense

reduction. Rintelmann later recommended that eleven

positions be eliminated, including plaintiff's. Snyder

sibabansiadnd tri,

Nos. 85-1332 & 85-1398

adopted Rintelmann’s recommendation that McNeil be ter-

minated. McNeil was sixty-one at the time of his dis-

charge. McNeil’s duties were taken over by Robert Price

and Watson.

Although others whose positions were eliminated were

offered other positions, plaintiff was not. Defendant argues

that, although positions were available in Chemical Sales,

plaintiff was not offered one because the friction that

plaintiff had previously created made such a position in-

appropriate for plaintiff. Plaintiff, however, was offered

a nonsalaried, commission-based position as a sales repre-

sentative.

Section 623 of the ADEA makes it unlawful for an em-

ployer ‘‘to fail or refuse to hire or to discharge any in-

dividual 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(aX1). To establish a violation of the

ADEA plaintiff must prove that he was discharged be-

cause of his age. See Dorsch v. L.B. Foster Co., 782 F.2d

1421, 1423-24 (7th Cir. 1986); La Montagne v. American

Convenience Products, Inc., 750 F.2d 1405, 1409 (7th Cir.

1984). The plaintiff ‘must prove not that age was the sole

factor motivating the employer to discharge him but that

age was a ‘determining factor,’ in the sense that he would

not have been discharged ‘but for’ his employer’s motive

to discriminate against him because of his age.” La Mon-

tagne, 750 F.2d at 1409. The plaintiff may meet this

burden by presenting either direct or circumstantial evi-

dence. Id.

When the plaintiff offers indirect proof of discrimina-

tion we apply the analysis set forth in McDonnell Douglas

Corp. v. Green, 411 U.S. 792 (1973) and Texas Depart-

ment of Community Affairs v. Burdine, 450 U.S. 248

(1981). The plaintiff must first prove a prima facie case

of discrimination by showing 1) that he or she was in the

Nos. 85-1332 & 85-1398

protected class; 2) that the plaintiff was doing the as-

signed job well enough to meet the employer’s legitimate

expectations; 3) that in spite of performance the plaintiff

was discharged and 4) that the employer sought a replace-

ment. Jd. We have noted, however, that in a reduction-

in-force case the last element is irrelevant. See Stumph

v. Thomas & Skinner Inc., 770 F.2d 98, 96 (7th Cir. 1985);

Matthews v. Allis-Chalmers, 769 F.2d 1215, 1217 (7th Cir.

1985). We have held that a prima facie case is established

in a reduction-in-force case by 1) showing that the plain-

tiff was within the protected age group; 2) showing that

the plaintiff was adversely affected, either by discharge

or demotion; 3) showing that the plaintiff was qualified

to assume another position at the time of discharge or

demotion; and 4) producing circumstantial or direct evi-

dence from which a fact finder might reasonably conclude

that the employer intended to discriminate in making the

employment decision in issue.’ See Dorsch, 728 F.2d at

1424; Matthews, 769 F.2d at 1217.

Once the plaintiff has established a prima facie case, the

burden falls on the defendant to articulate lawful reasons

for the discharge. La Montagne, 750 F.2d at 1409. If the

defendant meets its burden of production, the plaintiff

must prove “that the proffered reasons are a pretext, by

showing either that a discriminatory reason more likely

motivated the employer or that the employer’s proffered

explanation is unworthy of credence.” Jd.

Defendant argues that a reduction-in-force analysis

should be applied to this case. We will assume, without

reaching the issue, that the discharge occurred as part

of a reduction in force. The district court held that plain-

1 Judge Flaum has argued persuasively that this last requirement

may impose too heavy a burden upon a plaintiff. See Matthews,

769 F.2d at 1219-24 (Flaum, J., concurring). He argued that the

plaintiff should be permitted to show instead that he or she was

discharged while younger employees either were retained to per-

form the plaintiff's job or permitted to transfer into some other

hich the plaintiff was qualified. /d. at 1224.

job for w

Nos. 85-1332 & 85-1398

tiff had established a prima facie case under a reduction-

in-force analysis:

When the defendant in an age discrimination case has

a reduction in force, a prima facie case of age dis-

crimination may be established if the plaintiff shows

that he was within the protected age bracket, that

he was discharged, that he was qualified to assume

another position at the time, and that there is direct

or circumstantial evidence of the defendant’s intent

to discriminate. There is ample evidence in this case

to satisfy all of these elements.

Dist. Ct. Order at 13-14. Defendant does not dispute that

the first two elements were established.

Defendant, however, argues that it had legitimate busi-

ness reasons not to offer another position to plaintiff. But

the district court held that at the time of McNeil’s ter-

mination, defendant was advertising for positions in the

Klenzade Division’s sales force and that plaintiff was

qualified to perform the duties of such a position. This

finding is not clearly erroneous. Defendant argues that

the only sales management positions for which it placed

any advertisements were in Chemical Sales. Defendant

argues that McNeil was unsuitable for these positions

“because of past incidents involving customers and fellow

employees.’? Reply Brief of Defendant at 11. We cannot

}

2 Although defendant a at length that the district court er-

| roneously concluded that McNeil was performing his job satisfac-

torily, see Defendant’s Brief at 24-27, 33-42, we see no reason to

| address these findings. Defendant clearly adopts the position that

“McNeil was terminated solely because of a reduction in force.”

| Reply Brief of Defendant at 9. Defendant also states: “John

| McNeil was not discha for cause because of his sales or his

| behavioral/drinking problems. His position was eliminated because

of a reduction in force caused by a need to reduce expenses.” Id.

at 10-11 (emphasis in original). Further, defendant does not argue

that plaintiff's job performance in the Engineering Division was

the reason why he was not offered another position in the

Chemical Division. See Defendant’s Brief at 35, 41.

i cecal

——E——————E——————— ee

Pr ee.

I pacie taCtteecn we * (ee. BD wt etd) bo wie ] tl Ea aes Bie baw 2.4 Briere ew eee. GA |

~ eR ka RS fit ena Pe ll

Nos. 85-1332 & 85-1398

say, however, that the district court clearly erred in con-

cluding that the conduct to which defendant refers should

be accorded little weight because it occurred long before

the termination and was not thought to be serious enough

to be recorded in his monthly or yearly appraisals. Nor

did MeNeil’s supervisor warn him that his conduct would

not be tolerated. The district court could therefore have

found defendant’s proffered reason to be pretextual.

In addition, there was sufficient evidence from which

the district court might reasonably have inferred that de-

fendant had intended to discriminate. The district court

held that the plaintiff had “presented substantial direct

evidence of age discrimination. . . . [t]he record reveals

that Snyder intended to get rid of the inherited sales force

of ‘old salesmen’ and replace them with ‘bright young peo-

ple’.”” Dist. Ct. Order at 10-11. Various statements made

by Snyder support these conclusions.®

3 A monthly ——— report (MPR) from Snyder to S. Osborn

dated July 11, 1980, contains the following comment:

We are putting our emphasis at the moment on what I call

the nuts and bolts training .. . . | think it’s particularly im-

portant that we provide a steady flow of capable people who

can handle the servicing and selling needs of existing accounts

so we can eliminate our dependence on over-paid and under-

motivated veterans of 10 or 15 or 20 years to get the sort

of experience necessary to provide reasonable plant service

competence.

App. at 421 (“App.” refers to the Joint Appendix). Snyder’s MPR

dated December 16, 1980, comments:

By oe to provide a comprehensive standardized, central-

ized high-quality technical training program, we are able to

make ourselves independent of our reliance on old-timers

without the right motivation or education and can hire bright

young people h out of college and give them the necessary

training in a relatively short space of time. It will also let us

get at meeting our affirmative action objectives in a mean-

ingful way.

(Footnote continued on following page)

Nos. 85-1332 & 85-1398

Defendant that these comments can be given an

innocent, even laudable interpretation. It argues that the

comments do not reveal an intent to terminate older em-

ployees, but rather disclose a plan to provide centralized

training that would permit it to realize its affirmative ac-

tion goals. It may be that the comments are capable of

more than one interpretation. Nonetheless, the interpreta-

tion made by the district court is not clearly erroneous.

Defendant next argues that these comments are not

legal evidence of age discrimination because “abstract age

comments or generalities are insufficient to show age dis-

crimination.”” Williamson v. Owens-Illinois, Inc., 589 F.

3 continued

App. at 425. Snyder’s MPR dated February 9, 1981, states:

A major factor for the future will, of course, be the success

of the Klenzade Institute. We are well on our wa in this area,

but as you know, the work is all up front, and the benefits

are one-two years out. However, within several years, we

should find ourselves substantially —— of our inherited

sales force and able to rely on our ability to hire, train and

motivate bright, young people.

John McNeil was also terminated ... . I feel very strongly,

as I told you separately, Bart, that when faced with the

necessity of terminations, it is certainly not in the company’s

best interest to terminate effective, hard-working newer

employees who get trapped in a reduction in force through

a? fault of their own, while leaving on the payroll employees

a are not either performing adequately or doing a

job worth doing, but who have just been around a long time.

App. at 429-31. Snyder’s MPR dated March 13, 1981, includes the

following comment:

[We simply can’t put people in pure sales jobs such as these

without proper training. When we created these oo we

staffed most of the —- with people such as H.J. Johnson,

who we thought were old pros. It turned out that most of

them were just old, and we really didn’t have an internal train-

ing program up and operating and able to provide the needed

replacements.

App. at 434.

. Nos. 85-1332 & 85-1398

Supp. 1051, 1059 (N.D. Ohio 1984), affd in part and rev'd

in part without opinion, 782 F.2d 1044 (6th Cir. 1985).

In Williamson the court held that an isolated age-related

comment did not show defendant’s proffered reason for

the discharge to be pretextual because that statement,

taken in context, was totally innocuous.‘ /d. It was in this

context that the Williamson court made the statement

we have quoted. In the case before us the district court

did not find the statements to be innocuous. Further,

plaintiff relies upon these statements only to establish his

prima facie case (not to show pretext). The plaintiff, in

establishing his prima facie case, need only produce evi-

dence from which the court could conclude that the em-

ployer intended to discriminate and this evidence may be

circumstantial.

Defendant also argues that the comments cannot be re-

lied upon because there is no nexus between the com-

ments and any action taken with respect to McNeil. But

we would suppose in the ordinary case that such a con-

nection would have to be inferred. And the district court

was entitled to rely upon the comments to support an in-

ference that defendant intended to discriminate. It would

be unusual to find direct evidence of intent of this kind

and certainly this is not required. Snyder’s comments are

reasonably read to reveal that he intended to get rid of

old salesmen.5 Snyder authorized McNeil’s discharge. Fur-

+ Similarly, the other cases cited by defendant do not support

its position. In Smith v. Flax, 618 F.2d 1062, 1066 (4th Cir. 1980),

the court held that the particular statements at issue were only

truisms and did not indicate a discriminatory purpose. In Reilly

vu. Friedman’s Express, 556 F. Supp. 618, 624-25 (M.D. Penn. 1983),

the court held that an isolated abstract comment did not establish

pretext. In Abraham v. Field Ent ises, 511 F. Supp. 91, 94

(N.D. Ill. 1989), the court dismissed the claims for lack of subject

matter jurisdiction, without ever mentioning any allegedly dis-

criminatory statements.

5 Defendant’s argument that the comments cannot be relied upon

because they were directed only toward the chemical sales force,

while McNeil worked in the Equipment Engineering Department,

is unpersuasive.

—————

Nos. 85-1332 & 85-1398

ther, this is not a case in which plaintiff presents one

isolated comment. Rather, there are a series of comments

that, read together, support the necessary inference and

the resulting finding is not clearly erroneous.

Ill

Plaintiff appeals the district court’s finding that the vio-

lation was not “willful” and thus liquidated damages were

not appropriate under the statute. 29 U.S.C. § 626(b). We

| have held that willfulness is established ‘only if there is

some showing as to the defendant’s knowledge of the il-

\ legality of -his actions.” Syvock v. Milwaukee Boiler

Manufacturing Co., 665 F.2d 149, 155 (7th Cir. 1981) (foot-

note omitted); see Orzel v. City of Wauwatosa Fire

Department, 697 F.2d 743, 757-58 (7th Cir.), cert. denied,

464 U.S. 992 (1983). Plaintiff must show that defendant’s

actions ‘‘were knowing and voluntary and that he knew

or reasonably should have known that those actions vio-

lated the ADEA.’® Syvock, 665 F.2d at 156 (footnote

omitted); Orzel, 697 F.2d at 758. It is not enough,

however, for the employer to simply know of the poten-

tial applicability of the ADEA. See Trans World Azrlines

v. Thurston, 105 S. Ct. 618, 625 (1985). The Supreme

Court noted that it would be virtually impossible for an

employer to show that he was unaware of the Act and

its potential applicability because employers are required

to post ADEA notices. Id.

Plaintiff believes that defendant’s violation was willful

because there was substantial evidence of discriminatory

intent and Snyder admitted that he was aware that the

termination of an employee on the basis of age would

6 The Supreme Court recently held that it was reasonable to use

a standard under which a “willful” violation would be found if the

employer knew, or showed reckless disregard for the question

whether, its conduct was prohibited by the ADEA. See Trans

World Airiines v. Thurston, 105 S. Ct. 613, 624 (1985).

ta DBR eal

Nos. 85-1332 & 85-1398

violate the ADEA.’ The district court, however, felt that

there was “insufficient evidence on the question of whether

the defendant knew or should have known that its actions

violated the ADEA.” Dist. Ct. Order at 15. We may re-

verse the district court only if its finding is clearly er-

roneous. See Orzel, 697 F.2d at 759. And the finding in

uestion is not clearly erroneous, especially in light of

hurston.§

Plaintiff appeals the district court’s award of $88,000 in

damages, which represents his net loss for the period be-

tween his discharge and the judgment below. Plaintiff ar-

gues that the district court should have awarded him front

7 Snyder gave the following testimony:

Q. And you’re familiar with the fact there is a federal law

on age discrimination, are you not?

A. Yes. As I testified before, I’m familiar, in general, with

the fact that there is a federal law on age discrimination.

Q. You would be familiar with the fact that the termination

of an employee on the basis of age would be a discrimination

[sic] of the act, are you not?

A. Yes.

Tr. at 76-77.

8 In Syvock we considered, among other things, that the defen-

dant had attempted to show that Syvock was laid off and not

rehired in part because of his poor production capabilities.

Although the jury was not persuaded by this explanation, “defen-

dant’s showing was not so weak as to allow no room for any con-

ceivable explanation for its actions except age discrimination.”

Syvock, 665 F.2d at 157. We held that there had not been a willful

violation under 29 U.S.C. § 626(b). Similarly, in the case before

us defendant has presented some evidence that the plaintiff was

not offered another position because of friction between him and

the department in which jobs were available. Although we would

hesitate to say that such evidence is always sufficient to show that

a violation is not willful, we think that it affords some support

to the district court’s finding.

NCZp eat a bsisy uate eatin iid athe

Nos. 85-1332 & 85-1398

pay up to age seventy.® Because plaintiff was sixty-five

years old at trial, the issue is whether he should be com-

pensated for the ‘additional five years between judgment

in this case and the age of seventy.

The ADEA authorizes the courts to grant “such legal

or equitable relief as may be appropriate to effectuate the

purposes of this chapter.” 29 U.S.C. § 626(b). This cir-

cuit has not yet decided whether this grant of authority

permits the district court to award front pay. All of the

circuits that have decided the issue, however, have held

that front pay is an available remedy in appropriate cases

brought under the ADEA. See Wildman v. Lerner Stores,

771 F.2d 605, 616 (1st Cir. 1985); Maxfield v. Sinclair In-

ternational, 766 F.2d 788, 795-96 (8d Cir. 1985), cert.

denied, 106 S. Ct. 796 (1986); EEOC v. Prudential Federal

Savings & Loan Assoc., 763 F.2d 1166, 1172-73 (10th Cir.),

cert. denied, 106 S. Ct. 312 (1985); Goldstein v. Manhattan

Industries, 758 F.2d 1435, 1448-49 (11th Cir.), cert. denied,

106 S. Ct. 525 (1985); Whittlesey v. Union Carbide Corp.,

742 F.2d 724, 728 (2d Cir. 1984); Davis v. Combustion

Engineering, 742 F.2d 916, 922-23 (6th Cir. 1984); Gibson

v. Mohawk Rubber Co., 695 F.2d 1093, 1100 (8th Cir.

1982); Cancellier v. Federated Department Stores, 672

F.2d 1312, 1819 (9th Cir.), cert. denied, 459 U.S. 859

(1982). We agree that front pay may be an available rem-

edy in appropriate cases.

Section 626(b) grants broad remedial powers that enable

the courts to fashion whatever remedy is required to

make the plaintiff whole. See Wildman, 771 F.2d at 616;

Whittlesey, 742 F.2d at 727. A plaintiff is made whole

when he or she is returned to the position that such a

victim would have occupied had the discrimination not oc-

curred. See Maxfield, 766 F.2d at 796; EEOC, 763 F.2d

at 1173. Although reinstatement is usually the preferred

remedy, reinstatement is not always appropriate. See

® At age sevent ty compulsory retirement could be imposed without

violating the A

EA. See 29 U.S.C. § 681.

Nos. 85-1332 & 85-1398

Wildman, 771 F.2d at 616; Mazfield, 766 F.2d at 796;

EEOC, 763 F.2d at 1172-73; Goldstein, 758 F.2d at 1448;

Whittlesey, 742 F.2d at 728. For example, there may be

no position available or the employer-employee relation-

ship may be pervaded by hostility. See Whittlesey, 742

F.2d at 728; EEOC, 763 F.2d at 1172. When reinstate-

ment is infeasible or inappropriate, front pay may be ap-

propriate to make the plaintiff whole. In determining

whether to award front pay, the court should consider all

of the circumstances of the case. Wildman, 771 F.2d at

616; Davis, 742 F.2d at 923. Front pay may be indicated

especially when the plaintiff has no reasonable prospect

of obtaining comparable employment or when the time

period for which front pay is to be awarded is relatively

short. See Whittlesey, 742 F.2d at 729; Davis, 742 F.2d

at 923 (failure to award front pay to 63-year-old plaintiff

may be abuse of discretion). On the other hand, front pay

may be less appropriate when liquidated damages are

awarded. See Wildman, 771 F.2d at 614; Cancellier, 672

F.2d at 1319. Of course the duty to mitigate damages may

limit the amount of front pay available. See Maxfield, 766

F.2d at 796; EEOC, 763 at 1173; Whittlesey, 742 F.2d at

728-29.

Although an unreasonable refusal of an offer to reinstate

will preclude recovery of front pay, see O’Donnell v.

Georgia Osteopathic Hospital, 748 F.2d 1543, 1550 (11th

Cir. 1984), a plaintiff need not request reinstatement as

a prerequisite to recovering front pay when reinstatement

would be inappropriate. See EEOC, 763 F.2d at 1173 n.2;

see also Maxfield, 766 F.2d at 796-97 (complaint that con-

tains request for future damages is sufficient to preserve

issue).

The decision whether or not to award front pay is, of

course, within the discretion of the district court. See

Wildman, 771 F.2d at 616; Goldstein, 758 F.2d at 1448;

Davis, 742 F.2d at 923. We need only review the deci-

sion of the district court for an abuse of discretion. Here

the district court stated: “The court rejects the plaintiff's

argument that he would have received the promotion de-

Nos. 85-1332 & 85-1398

scribed, and further rejects the plaintiff's position that he

is entitled to be compensated for employment to age 70.

There is simply insufficient evidence to support either of

those propositions.” Dist. Ct. Order at 16. This determina-

tion was not an abuse of the district court’s discretion.’°

We therefore affirm the judgment of the district court.

AFFIRMED

A true Copy:

Teste:

Clerk of the United States Court of

Appeals for the Seventh Circuit

10 The author of this opinion believes that the district court’s

terse statement did not set forth sufficient reasons to allow us

to evaluate its exercise of discretion. Although the author would

therefore remand for further consideration of the front pay issue,

his two colleagues believe that the district court’s statement was

adequate.

USCA 60054—Midwest Law Printing Co., Inc., Chicago—8-27-86—450

APPENDIX B

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

WESTERN DIVISION

JOHN W. McNEIL,

Plaintiff,

VS. No. 81 C 20150

ECONOMICS LABORATORY, INC.

Defendant.

ORDER

FACTS

Plaintiff was born April 6, 1919, and

is a United States citizen currently

residing in Roscoe, Illinois.

Upon his termination from employment

with defendant, plaintift filed a timely

charge of age discrimination with the

Equal Employment Opportunity Commission.

Following the issuance of a notice to

plaintiff by the Commission terminating

its investigation of plaintiff's charge,

plaintifeé filed a timely two-count

complaint before this court.

Both counts have been amended. Count

I of plaintiff's Complaint, as amended,

alleges that defendant discriminatorily

terminated plaintiff's employment’ with

defendant on the basis of plaintiff's age.

Count II of plaintiff's Complaint, as

amended, alleges that plaintiff's ter-

mination from employment breached a

contract or implied contract of employ-

ment.

Defendant is a Delaware corporation

that produces and sells institutional,

consumer and industrial detergents’ and

cleaning systems. Its principal place of

business is St. Paul, Minnesota, and it

maintains equipment engineering offices in

South Beloit, Illinois, where plaintiff

was employed.

This court has personal jurisdiction

over the parties to this action and has

subject matter jurisdiction over’ the

underlying dispute.

Plaintift commenced working for

Klenzade-New York, a distributor of

Klenzade products partially owned by the

Klenzade Company, as a salesman on April

1, 1949, In 1962, defendant purchased the

Klenzade Company and shortly thereafter

iednkeed all interests in Klenzade-New

York. The Klenzade Company is currently

the Klenzade Division of defendant,

Economics Laboratory, Inc. Klenzade spe-

cialized and specializes in the production

and sale of sanitation chemicals’~ and

equipment for the dairy, beverage and food

industries.

On June l, 1962, plaintiff was trans-

ferred from his position as a salesman for

defendant's Klenzade-New York operation to

the position of Manager of Klenzade's New

England Division.

On July 1, 1966, plaintiff was pro-

moted to the position of Eastern Area

Sales Manager for the Klenzade Division.

On October 4, 1968, plaintiff was promoted

to the position of Assistant Vice-

President, Klenzade Sales.

Plaintiff remained in the position

until July 1, 1972, when he became

Assistant Vice-President and Sales Manager

for the Equipment Engineering Division of

defendant. For approximately one year

Equipment Engineering had been a separate

division of defendant.

On January 1, 1977 the Equipment

Engineering Division once again was made a

department of defendant's Klenzade

Division.

On October 2, 1978, plaintiff was pro-

moted to the position of Assistant

Vice-President - Original Equipment

Manufacturer (OEM) Sales Manager for the

Equipment Eng ineering Department of

defendant's Klenzade Division, the posi-

tion he held at the time of his discharge.

As of September 25, 1979 the position had

an annual sales budget of $700,000.00.

In December, 1978 Henry Snyder was

hired by defendant as Vice-President of

the Klenzade Division. For several months

preceding the discharge of the plaintiff,

the record contains evidence that Snyder

endorsed a policy that youth was a quali-

fication for a position within the

Klenzade sales force. Snyder's written

Statements contained substantial evidence

of his desire to get rid of the inherited

sales force of old people and to replace

them with bright young people.

Plaintitf received a raise effective

January 1, 1981 increasing his annual

Salary to $41,000.00 plus an annual bonus

of $2,780.00, for a total annual compen-

sation of $43,780.00. On January 23,

1981, without prior warning, plaintiff was

discharged by defendant. Plaintiff's

annual performance appraisals, signed by

his previous supervisors and Snyder, show

plaintiff's performance was above average

in every area and contain no adverse com-

ments. Moreover, no negative comments

concerning plaintiff's performance Or

behavior are contained in the Monthly

Progress Reports of his supervisors,

including Snyder, covering the period of

1969 through January, 1981.

Snyder authorized the discharge of

plaintiff, allegedly upon the recommen-

dation of Richard Rintelmann. Rintelmann

held the position of Vice-President of

Marketing for the Klenzade Division and

had no supervisory authority over plain-

tiff. In reaching the decision to ter-

minate plaintiff, both Snyder and

Rintelmann admitted they did not review

either plaintiff's personnel file or any

records relating to his sales performance,

They did not discuss the matter with

plaintiff's two immediate superiors, and

the plaintiff's immediate supervisor

admitted he was "Surprised" by the ter-

mination. Snyder testified that at the

time he did not know plaintiff's sales

budget or if his sales had exceeded his

budget.

Defendant alleges and offered evidence

that the plaintiff was discharged because

his sales activity was "LGC s as

“indicated by the absence of sales for COP

systems", and because of a history of

behavior problems, although Snyder stated

in his deposition that behavior was not

considered.

Plaintiff's sales for the fiscal year

June 30, 1979-July 1, 1980 were well over

his budget of $700,000.00, Sales were

typically slow in the early part of each

fiscal year; however, plaintiff was on

budget in January, 1981.

After plaintiff's discharge, he was

offered a position as sales represen-

tative. The plaintiff testified that this

position involved the same activities he

was performing when discharged, but that

he would be siehanked on a commission

basis rather than by salary and that he

would be responsible for advancing his own

expenses.

There is no evidence that the plain-

tift had a contract of employment guaran-

teeing him employment for any definite or

indefinite period of time. While the

plaintiff testified that in 1966 he was

told that he would have a job until

retirement, such a promise, if made, was

gratuitous and not conditioned upon any

act by the plaintiff.

Plaintift sought other employment

after termination with limited success,

He obtained a job with American Dairy

Review at $2,000.00 per month which ter-

minated when it merged with another com-

pany. He earned $4,000.00 in this capa-

city before termination. Plaintiff also

unsuccessfully sought employment through

the Illinois Unemployment Agency and two

private employment services.

DISCUSSION

Statute

Section 623(a) of the Age Discrimina-

tion in Employment Act, 19 U.S.C. § 621 et

SCGe, hereinatter referred to as the

"ADEA") makes it unlawful for an employer:

To fail or refuse to hire or to

discharge any individual or

otherwise discriminate against

any individual with respect to

his compensation, terms, con-

Gitions, or privileges of

employment, because of such indi-

viduals age.

Burden of Proof

The plaintiff's burden of proof in an

age discrimination case is to show that

age was a factor in the decision to ter-

minate him. Age need not be the sole

motivating factor, but it must have been

the "'determining factor’ in his discharge

in the sense that ‘but for' his employer's

motive to discriminate against him because

of age, he would not have been dis-

charged." Kephart v. Institute of Gas

Technology, 630 F.2d 1217, 1222 (7th Cir.

1980); Loeb v. Textron, 600 F.2d 1003,

1019 (lst Cir. 1979).

The basic allocation of burdens and

order of presentation of proof in a Title

VII case is as follows: First, the plain-

tiff has the burden of proving by the pre-

ponderance of the evidence a. prima facie

case of discrimination. Second, if the

plaintiff succeeds in proving the prima

facie case, the burden shifts to the

defendant to articulate some legitimate,

non-discriminatory reason for the

employee's discharge. Third, should the

defendant carry this burden, the plaintiff

must then have an opportunity to prove Dy

a preponderance of the evidence that the

legitimate reasons offered by the defen-

dant were “ot its true reasons, Dut were a

pretext for discrimination. McDonnell

Douglas Corp. Vv. Green, 411 U.S. 792, 93

S.Ct. 1817, 36 L.Ed.2d 668 (1973).

The ultimate burden of persuading the

trier of fact that the defendant inten-

tionally discriminated against the plain-

tinff remains at ali times with the plain-

tiff. Texas Dept. of Community Affairs v.

Burdine, 45U U.S. 248, 253 (1981). See

also Board of Trustees of Kenne State

College v. Sweeney, 439 U.S. 24, 25, ne2,

(1978); see generally, 9 J. Wigmore,

Evidence § 2489 (3rd ed. 1940) (the burden

of persuasion never shifts).

The burden that shifts to the defen-

dant is to rebut the presumption of

discrimination by producing evidence that

the plaintiff was fired for legitimate,

non-discriminatory reasons. The defendant

need not persuade the court that it was

actually motivated by the protfered

reasons. It is sufficient if the

defendant's evidence raises a genuine

issue of fact as to whether it discrimi-

nated against the plaintiff. To accom-

plish this, the defendant must clearly set

forth, through the introduction of

admissible evidence, the reasons for the

Plaintiff's discharge. The explanation

must be legally sufficient to justify a

judgment for the defendant. If the defen-

dant carries the burden of production, the >

presumption raised by the prima facie case

is rebutted, 1/ and the factual inquiry

1/ In saying that the presumption drops

from the case, we do not imply that the

trier of fact no longer may consider evi-

dence previously introduced by the plain-

tiff to establish a prima facie case. A

Satisfactory explanation by the defendant

destroys the legally mandatory inference

of discrimination arising from the

plaintiff's initial evidence. Nonetheless,

this evidence and inferences’ properly

drawn therefrom may be considered by the

trier of fact on the issue of whether the

defendant's explanation is pretextual.

Indeed, there may be some cases where the

Plaintiff's initial evidence, combined

with effective cross examination of the

defendant, will suffice to discredit the

defendants explanation.” Texas Department

of Community Affairs v. Burdine, 450 U.S.

248, 255, f.n. 10 (1981).

proceeds to a new level of specificity.

Placing this burden of production on the

defendant thus serves’ simultaneously to

meet the plaintiff's prima facie case by

presenting a legitimate reason for the

action and to frame the factual issue with

sufficient clarity so that the plaintiff

will have a full and fair opportunity to

demonstrate pretext. The sufficiency of

the defendant's evidence should be eva-

luated by the extent to which it fulfills

these functions.

The plaintiff retains the burden of

persuasion. He must demonstrate that the

proffered reasons’ were not the true

reasons for his firing. This burden must

now merge with the ultimate burden of per-

Suading the court that he has been the

victim of age discrimination. He may do

this either directly by persuading the

court that a discriminatory reason more

likely motivated the employer, or

indirectly by showing that the employer's

proffered explanation is unworthy of cre-

dence.

A recent Seventh Circuit case, Roderick

LaMontagne Vo American Convenience

December 27, 1984), is in accord with the

principles enunciated above. In

LaMontagne, the Seventh Circuit set forth

the method of proof in an age discrimina-

tion case as follows:

"The plaintiff may try to meet

his burden of proof directly, by

presenting direct or circumstan-

tial evidence that age was a

determining factor in his dis-

charge. See Lovelace v. Sherwin-

Williams Co., 681 F.2d 230, 239

(408 Cala 1982)3 Stanojev v.

Evasco Services, Ince, 643 F.2d

914, 920-21 (2nd Cir. 1981);

Spanuolo v. Whirlpool Corp., 641

F2d 1109, 1113 (4th Cir.), cert.

denied, 454 U.S. 860 (1981).

By far the more common method of

proof, however, is that set forth

in McDonnell Douglas Corp. v.

Green, 411 U.S. 792 (1973). This

indirect proof, as elaborated and

Clarified in Texas Department of

Community Affairs v. Burdine, 450

U.S. 248 (1981), requires’ the

plaintift first to prove a prima

facie case of discrimination by

showing (1) that he was in the

protected class, (2) that he was

doing the job well enough to meet

his employer's legitimate expec-

tations, (3) that in spite of his

preformance he was discharged,

and (4) that the employer sought

a replacement for him. (2/] Huhn

ve Koehring, 718 F.2d 239, 243

(7th Cir. 1983); Loeb v. Textron,

Inc,, 600 f.20 i003, i013 (ist

Cif, i979 i% Success gives rise

to a rebuttable presumption of

discrimination, and the _ burden

then falls on the defendant to

articulate lawful reasons for the

discharge. The defendant's bur-

den is only one of production;

the burden of persuasion rests at

all times on the plaintiff. If

2/ In force reduction cases, it is not -

necessary for the plaintiff to demonstrate

his employer sought a replacement. Haydon

¥. Sand Corp., 605 F.2d 433, 454 €.8. i

[eon «6G | 6=6RSTS D3 Williams v. General

Motors Corp., 656 F.2d 120, 127-130 (Sth

EE EE EEE EE ee ee ee ee ee ee ee es See ee Mee ee tt ee eee ee ee Nee ee ew ee ee Le ee ee ere Se Ce

Cir. 1981), cert. denied, 455 U.S. 943

(1982).

the defendant articulates lawful

reasons, the presumption is

dissolved, and the burden falls

| on the plaintiff to prove that

| the proffered reasons are a pre-

text, by showing either that a

discriminatory reason more likely

motivated the employer or that

the employer's proffered explana-

| tion is unworthy of credence.

| See Burdine, 450 U.S. at 253-56."

| Slip op. at 5-6,

Application to this Case

Applying these principles to the pre-

sent case, it is undisputed that (1) the

plaintiff was in the protected class and

(2) that he was discharged.

The plaintiff presented substantial

direct evidence of age discrimination,

Snyder assumed responsibility for the

Klenzade Division approximately a year

before the plaintiff's discharge. Sub-

sequently, the record reveals that Snyder

intended to get rid of the inherited sales

force of “old salesmen" and replace them

with "bright young people".

aaa aii

The record further reveals, and the

court finds, that the plaintiff was doing

his job well enough to meet the defen-

dent's legitimate expectations. Although

the defendant presented considerable evi-

dence of the plaintiff's conduct, which it

alleges was responsibile for his dis-

charge, the court finds it unworthy of

credence. All of the evidence presented

by the defendant was based upon incidents

which occurred long before the actual

discharge. The most persuasive evidence

shows that the plaintiff was meeting the

legitimate expectations of the defendant.

The plaintiff's long employment history

with the defendant reveals a successful

career in the sale of chemicals and equip-

ment. Most importantly, his’ personnel

file contains only favorable performance

appraisals by his supervisors throughout

his long career. In addition, the plain-

tiff had received a raise effective

January 1, 1981 increasing his’ annual

Salary to $41,000 plus an annual bonus of

$2,780, for a total annual compensation of

$43,780. He was discharged, without

warning, on January 23, 1981, just three

weeks later. In fact, the plaintiff's

annual and monthly performance appraisals

contained no adverse comments concerning

either his performance or his behavior.

These reports covered a substantial period

of the plaintiff's employment. history

(1969-1981), and are easily the most cre-

dible evidence of his job performance.

Furthermore, his immediate superior was

“surprised” by the plaintiff's ter-

mination.

The court gives little weight to the

defendant's proffered reasons for the

Plaintiff's discharge, including that his

sales were “flat”, when in fact, he had

exceeded his budget by over $100,000 (or

118%) the previous fiscal year; that he

had "behavior" problems, including

drinking on the job, when in fact, these

incidents had occurred in a time period

long before his discharge and were not

thought to be serious enough to place them

in his monthly or yearly appraisals. Nor

were the alleged incidents of drinking on

the job considered serious enough to have

his supervisor warn the plaintiff that his

conduct would not be tolerated. In any

event, the subject incidents had occurred

long before the dischage and should be

accorded little weight.

Another factor which militates against

the defendant's position that the plain-

tiff was discharged because of behavioral

problems is that at the time of his

discharge, he was offered a position as a

sales representative for the defendant.

In this position, plaintiff would have

continued to call on customers of the

defendant. The only difference is that

the plaintiff would have been paid on a

commission basis. It hardly seems

plausible that the defendant would offer

such a position to someone who it knew had

behavioral problems which might embarrass

the defendant or cause it to lose sales.

On the contrary, it is one more factor

which weighs in favor of the plaintiff's

position that age was "a determinative

factor" in his discharge. In other words,

"but for" the plaintiff's age, he would

not have been discharged.

Nor does the court accept the defen-

dant's position that the plaintiff was

discharged solely because of a reduction

in force. It is clear from the evidence,

that the duties previously performed by

the plaintiff as OEM Sales Manager are

Still being performed by James Watson and

Robert Price, both employees younger than

the plaintiff. Furthermore, at the time

of plaintiff's termination, the defendant

waS advertising for positions in the

Klenzade Division's sales force.

Plaintiff had held such positions in the

past and was qualified to perform the

duties of such a position. His supervisor

testified that his skills for these posi-

tions were “superior"™,

Although the record in this’ case

reveals that his duties were assumed by

younger persons, replacement by a younger

person in the position is not a critical

element of the plaintiff's case. 3/ when

the defendant in an age discrimination

3/ See footnote 2, Supra.

LI SR LT ER LR

case has a reduction in force, a prima

facie case of age discrimination may be

established if the plaintiff shows that he

was within the protected age bracket, that

he was discharged, that he was qualified

to assume another position at the time,

and that there is direct or circumstantial

evidence of the defendant's intent’ to

discriminate. There is ample evidence in

this case to satisfy all of these ele-

ments.

Willful Violation

The plaintiff argues that the defen-

dant should also be held liable for a

willful violation of Section 7(b) of the

ADEA, 29 U.SeCe § 626(b) (1976), which

allows liquidated damages in the event of

willful violations of the Act.

Neither the statute nor legislative

history has defined the term "willful."

The Seventh Circuit, however, in a very

recent case, Syvock v. Milwaukee Boiler

Mig. Co., Inc., 665 F.2d 149 (1981),

extensively discussed the meaning of

"willful" and set forth the standard for

establishing a “willful" violation of the

Act. The Court stated:

The Standard of willfulness

therefore should focus on the

defendant's state of mind at the

time the allegedly discriminatory

acts occurred. It must dis-

tinguish those Situations in

which an employer consciously

discriminates against an employee

because of age from those in

whieh the discrimination is

unconscious. This distinction is

just as necessary in disparate

treatment cases as it is when the

plaintiff sues on a discrimina-

tory impact theory. We think

that a finding of willfulness

should lie only if there is some

showing as to the defendant's

knowledge of the illegality of

his actions. We hold that, in

order to prove willfulness under

29 U.S.C. § 626(b) (1976), a

plaintiff must show that~ the

defendant's actions were knowing

and voluntary and that he knew or

reasonably should have known that

those actions violated the ADEA.

(emphasis added) Id. at 155-56.

The Court further held that "a finding of

pretext does not necessarily compel a

finding of willful discrimination." Id.

at 157.

In this case, while it is clear that

the evidence supports a finding, based

upon a preponderance of the evidence, of

age discrimination against the plaintiff,

it is not so clear that the defendant's

actions were a willful violation of the

Act. While there is some evidence that

Snyder knew that his actions were a viola-

tion of the ADEA, the plaintiff carries a

very heavy burden to establish a willful

violation in an age discrimination case.

In addition to establishing that’ the

violation was knowing and voluntary, he

must also show that the employer knew or

should have known that those actions

violated the ADEA. Although the evidence

Supports a finding of age discrimination,

there is simply insufficient evidence on

the question of whether the defendant knew

or should have Known that its actions

violated the ADEA. The court, therefore,

declines to assess liquidated damages.

Damages

The plaintiff argues for damages

totalling between $489,173 and $911,069.

Had he remained in the position he was in

at the time of his termination and retired

at the age of 70, plaintiff contends his

damages would be $489,173.00. Alterna-

tively, had he been promoted and retired

at the age of 70, plaintiff argues his

damages would be $911,069. Finally, had

he been given the position given one of

the individuals assuming his duties and

retired at the age of 70, plaintiff argues

that he would be entitled to damages in

the sum of $552,201.

The court rejects the plaintiff's

argument that he would have received the

promotion described, and further rejects

the plaintiff's position that he is

entitled to be compensated for employment

to age 70. There is simply insufficient

evidence to support either of those propo-

sitions.

The court rejects the defendant's con-

tention that the plaintiff should be

entitled to no damages because he failed

to mitigate damages. No evidence was pre-

sented that there were positions available

to a person of the plaintiff's age and

experience. Moreover, there is evidence

that the plaintiff did attempt to obtain

employment in his occupation without suc-

cess. That a person in his position was

not successful in his quest for employment

is not at all surprising to this court,

It is, in fact, a classic example of one

reason for the passage of the ADEA,

namely, to prevent the discharge of

employees who are in the twilight of their

careers and who have little prospect for

re-employment.

On Count I of the plaintiff's

complaint, the court finds that the plain-

tiff is entitled to damages in the sum of

$88,000.00, representing his net loss for

the years to age 65.

On Count II of the plaintiff's

complaint, the court finds that there was

no employment contract, express or implied

between the plaintiff and defendant.

The plaintif is also entitled to

reasonable attorney's fees, and costs of

Suit.

It is ordered:

(1) That judgment is entered in favor

of the plaintift, John McNeil, and against

the defendant, Economics Laboratory, Inc.,

in the sum of $88,000.00, plus costs of

Suit.

(2) The plaintiff is ordered to sub-

mit his bill of costs and his petition for

reasonable attorney's fees, with sup-

porting affidavits and memoranda, within

fourteen (14) days of the entry of this

order.

ENTER:

/s/Stanley J. Roszkowski

Stanley J. Roszkowski, Judge

United States District Court

Dated: /January 30, 1985

APPENDIX C

UNITED STATES COURT OF APPEALS

For The Seventh Circuit

Chicago, Illinois 60604

“ December 8, 1986.

Before

Hon. RICHARD D. CUDAHY, Circuit Judge

Hon. JOHN L. COFFEY, Circuit Judge

Hon. TERENCE T. EVANS, District Judge*

JOHN W. MCNEIL, Appeal from the

United States

District Court

for the Northern

District of

ITllinois, Western

Division.

Plaintiff-Appellee,

Cross-Appellant,

No. 85-1398 VS.

ECONOMICS LABORATORY,

et le

INC., No. 81 C 20150

Stanley J.

Defendant-Appellant, Roszkowski,

Cross~Appellee. Judge.

ORDER -

On consideration of the petition for

rehearing filed in the above-entitled

cause by John W. McNeil, a majority of the

judges on the original panel have voted to

deny a rehearing. Accordingly,

IT IS ORDERED that the aforesaid peti-

tion for rehearing be, and the same is,

hereby DENIED.

* Honorable Terence T. Evans, District

Judge for the Eastern District of

Wisconsin, is sitting by designation.

APPENDIX D

| aici AE Lk ane

UNITED STATES COURT OF APPEALS

For The Seventh Circuit

Chicago, Illinois 60604

December 8, 1986.

Before

Hone. RICHARD D. CUDAHY, Circuit Judge

Hon. JOHN L. COFFEY, Circuit Judge

Hon. TERENCE T. EVANS, District Judge*

JOHN We. MCNEIL, Appeal from the

United States

District Court

for the Northern

District of

Illinois, Western

Division.

Plaintiff-Appellee,

Cross-Appellant,

No. 85-1332 and VSe

85-1398

ECONOMICS LABORATORY,

INC., No. 81 C 20150

la i dd

Stanley J.

Defendant-Appellant, Roszkowski,

Cross-Appellee. Judge.

ORDER

On consideration of the petition for

rehearing and suggestion for rehearing en

banc filed in the above-entitled cause by

Economics Laboratory, Inc., no judge of

this court in active service has requested

a vote thereon, and all of the judges on

the origir4l panel have voted to deny a

rehearing. Accordingly,

IT IS ORDERED that the aforesaid peti-

tion for rehearing be, and the same is,

hereby DENIED.

® “Honorable Terence T. Evans, District

Judge for the Eastern District of

Wisconsin, is sitting by designation,

APPENDIX E

29 USCS §623(a) EMPLOYER PRACTICES. 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 con-

ditions, or privileges of employment,

because of such individual's age;

(2) to limit, segregate, or classify

his employees in any way which owuld

deprive or tend to deprive any individual

of employment opportunities or otherwise

adversely affect his status as an

employee, because of such individual's

age; or

(3) to reduce the wage rate of any

employee in order to comply with this Act

[29 USCS §§621 et seq.].

APPENDIX F

29 USCS §626 RECORDKEEPING, INVESTIGA~-

TION, AND ENFORCEMENT,

(a) Attendance of witnesses; investi-

gations, inspections, records, and home-

work regulations. The- Secretary shall

have the power to make investigations and

require the keeping of records necessary

Or appropriate for the administration of

this Act in accordance with the powers and

procedures provided in sections 9 and lil

of the Fair Labor Standards Act of 1938,

as amended (29 USC 209 and 211) [29 USCS

§§209, 211].

(b) Enforcement; prohibition of age

discrimination under fair labor standards;

unpaid minimum wages and unpaid overtime

compensation; liquidated damges; judicial

relief; conciliation, conference, and per-

suasion. The provisions of this Act shall

be enforced in accordance with the powers,

remedies, and procedures provided in sec-

tions 1l(b), 16 (except for subsection (a)

thereof), and 17 of the Fair Labor

Standards Act of 1938, as amended (29 USC

21l(b), 216, 217) [29 USCS §§211(b), 216,

217], and subsection (c) of this section.

Any act prohibited under section 4 of this

Act [29 USCS §623] shall be deemed to be a

prohibited act under section 15 of the

Fair Labor Standards Act of 1938, as

amended (29 USC 215) [29 USCS §215].

Amounts owing to a person as a result of a

violation of this Act shall be deemed to

be unpaid minimum wages or unpaid overtime

compensation for purposes of sections 16

and 17 of the Fair Labor Standrads Act of

1938, as amended (29 USC 216, 217) [29

USCS §§216, 217): Provided, That

liquidated damages shall be payable only

in cases of willful violations of this

Act. In any action brought to enforce

this Act the court shall have jurisdiction

to grant such legal or equitable relief as

may be appropriate to effectuate the pur-

poses of this Act, including without limi-

tation judgments compelling employment,

reinstatement or promotion, or enforcing

the liability for amounts deemed to be

unpaid minimum wages or unpaid overtime

compensation under this section. Before

instituting any action under this section,

the Secretary shall attempt to eliminate

the discriminatory practice or practices

alleged, and to effect voluntary com-

pliance with the requirements of this Act

through informlal methods of conciliation,

conference, and persuasion.

— ee

APPENDIX G

(29 CFR 2617 [44 FR 66791] [effective

11.21.79) {[§1627.3 under Subpart B -

record to be kept relating to age; notice

to be posted):

Be. (i) Every employer who, in the

regular course of his business, makes,

obtains or uses any personnel or employ-

ment records relating to the following

shall, except as provided in subparagraphs

three and four of this paragraph, keep

them for a period of one year from the

date of the personnel action to which any

records relate: (ii) promotion, demotion,

transfers, selection for training, layoff,

recall or discharge of any employee. ..

(iv) when an enforcement action is com-

menced, the employer may be required to

keep such documents until the final dispo-

sition of the action.

at. A

APPENDIX H

le. The policy manuel of Economics

Laboratory, Inc. provided:

Section D, p. 21-A:

Terminations may have legal consequen-

ces, particularly those involving

employees protected by anti discrimination

law. These laws generally protect

employees from discrimination because of

race, creed, color, sex, national origin,

age (over 40), and handicapped.

If a termination involves a potential

legal problem, review the determination in

advance with a P and IR or the law depart-

ment. Such advice should be sought as

early as possible during the counseling

progress.

26 Section B, pe. 3 Fair Employment

Practices:

A written record shall be made of

Situations involving Significant or

repeated breach of company work rules, or

writeups should include one, name of

employee; two, date of the incident;

three, nature of the incident giving all

the details; four, the date of the inci-

dent, the date the incident was discussed

with the employee; five, the details of

the discussion with the employee; and six,

the action taken.

3. Economics Laboratory, Inc. offi-

cial publication, Focus, January 1981:

Documentation essential in termination

process . e« e proper documentation is sup-

ported by. . - recent legislation

designed to protect employees from discri-

minatory employment practices, which

demands that company-initiated ter-

minations be well documented.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.