Petition for Writ of Certiorari — Nelson v. J. C. Penney Co.

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95187 8 MAY 20 Ii

N@EEICE OF (HE CLERK

In The

Supreme Court of the United States

October Term, 1995

DALE NELSON,

Petitioner,

VS.

J.C. PENNEY COMPANY, INC.,

Respondent.

Petition for a Writ of Certiorari to the United States

Court of Appeals for the Eighth Circuit

PETITION FOR A WRIT OF CERTIORARI

EMMANUAL S. BIKAKIS JAMES C. ZALEWSKI

BIKAKIS & ARNESON Counsel of Record

340 Insurance Centre DeMARS, GORDON, OLSON,

507-7th RECKNOR & SHIVELY

Sioux City, [A 51101 1225 L Street, Suite 400

(712) 277-1434 P.O. Box 81607

Lincoln, NE 68501-1607

(402) 438-2500

Attorneys for Petitioner

Ly te (800) 3 APPEAL « (800) 5 APPEAL « (800) BRIEF 21

L VS crvices inc

QUESTIONS PRESEN? €D

1. Does $t. Mary’s Honor Center v. Hicks, _U.S.__, 113

S.Ct. 2742 (993) permita jury inan ADEA wase to infer and find

intentional discrimination based upon plaintiff’s prima facie

case and a determination that defendant’s reason for discharge

was pretextual?

2. Can the Court of Appeals require a plaintiff to produce

direct proof of discrimination in an ADEAclaim, contrary to the

standards articulated in St. Mary's Honor Center v. Hicks, supra?

3. Is there a split in the Court of Appeals concerning the

burden of proof required in an employment discrimination jury

trial following the Hicks decision?

LIST OF PARTIES

The parties to the proceedings below were the Petitioner,

Dale Nelson, and the Respondent, J.C. Penney Company.

Respondent has no parent company or nonwholly-owned

subsidiaries.

iii

TABLE OF CONTENTS

I oe ee ert Et

Ra ESRI ga Ro Ne

IT.

The Court of Appeals failed to follow the standard

set by this Court in the Hicks decision, since it

required Nelson to produce direct evidence of age

ETE IEG Bil at a aa ae el RA aa

There is a split among the courts of appeal in

applying the Hicks decision regarding the amount

of proof necessary to support a jury verdict which

this Court must address. ....................

2 ae el Sa rg ea

ill

Contents

Page

TABLE OF CITATIONS

Cases Cited:

Barbour v. Merrill, 48 F.3d 1270 (D.C. Cir. 1995), cert.

granted, TIGR. CA. DOOtRG Oe) civcdeiccndscseass 4,12,20

Boeing Co. v. Shipman, 411 F.3d 365 (Sth Cir. 1969) ... 19,20

Brown v. Stites Concrete, Inc.,994 F.3d 553 (8th Cir. 1992)

PET Eee eer POT eee Te er oe ee RST 17

Doyne v. Union Electric Co., 953 F.2d 447 (8th Cir. 1992)

pe eke Siwls es Ces ekeae ericson 17,18

Fuentes v. Perskie,__F.3d__, 65 FEP Cases 890 (3rd Cir.

SE cc aeis civedaeh tease nee iin ee 22

Gaworski v. ITT Commercial Finance Corp., 17 F.3d 1104

fa RR, | | FR ee ERIN AT AK I Nie eas 16,17

Nelson v. Boatman’s Bancshares, Inc., 26 F.3d 796 (8th

Ce See be Giwabtcdesascnseew is 9,12, 13,14, 19,22

Nelson v. J.C. Penney Company, Inc., __ F.3d __ (8th

C2 Desde ced dic eeebe eee eee aie aes Re

O’Connor v. Consolidated Coin Operators,__ U.S. ___,64

ee | er rr rrr er ET Pore, 3

Contents

Page

Rhodes v. Guiberson Oil Tools, 39 F.3d 537, reh. en banc,

__F.3d__, 1996 U.S. APP. LEXIS 9877 (Sth Cir. 1996)

Se ET ee eT eed ie Oe Ged 4,19, 20, 21, 22, 23

Rinehart v. City of Independence, __F.3d__ ,65 FEPCases

Lee CG SPU 8s ecco bere eee 14,16

St. Mary’s Honor Center vy. Hicks, __U.S.__, 113 S. Ct.

2742 (1993)... i, 3,4,5,6,7, 8, 10, 12, 18, 19, 20,22, 23,24

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

256, 1013 .Ct. 1089 (1981) 26.65 cook 5

Statutes Cited:

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oP es BOUR, E o F S l

APPENDIX

Appendix A — Order Denying Rehearing in the United

States Court of Appeals for the Eighth Circuit Dated

MINS itis ichetieiackis la

Appendix B — Opinion of the United States Court of

Appeals for the Eighth Circuit Filed January 24, 1996

tt OCU RANE he Oeh RES CR Maas Waa CEOS. wee Sa

Appendix C — Memorandum Opinion and Order of the

United States District Court for the Northern District of

Iowa, Western District Filed April 26,1994 ........ 17a

Appendix D—Relevant Statutes .................. 52a

The Petitioner, Dale Nelson, respectfully prays that a Writ

of Certiorari be issued to review the judgment and opinion of the

United States Court of Appeals for the Eighth Circuit which was

entered in the proceeding on January 24, 1996.

OPINIONS BELOW

The latest opinion of the United States Court of Appeals for

the Eighth Circuit in this case was a decision to deny a Petition

for Rehearing en banc. That opinion was issued on March

1996, in Nelson v. J.C. Penney Company, Inc., which is

reproduced in the Appendices to this Petition as Exhibit A.

The modified decision that was issued by the three-judge

panel that heard this case is reproduced in the Appendices to this

Petition as Exhibit B. The Memorandum Opinion and Judgment

entered in this case by the United States District Court of the

Northern District of lowa is reproduced in the Appendices to this

Petition as Exhibit C.

STATEMENT OF JURISDICTION

Respondent J.C. Penney Company, Inc. sought review of the

decision and order entered by the District Court, which upheld

the jury verdict and issued damages of $932,280 against it. The

court below reversed and dismissed this decision on January 24,

1996. It denied Nelson’s Petition for Rehearing En Banc on

March 4, 1996.

This Court has jurisdiction to review the Judgment of the

Court of Appeals for the Eighth Circuit pursuant to 28 U.S.C.

§ 1254(1).

STATUTES INVOLVED

The statute involved is the Age Discrimination in

Employment Act, 29 U.S.C. § 621, et seq., which is set forth in

the Appendices as Exhibit D.

STATEMENT OF THE CASE

This case was initially filed in 1992 in the United States

Disirict Court for the Northern District of lowa. Nelson was

terminated approximately 6 months after undergoing extensive

surgery and treatment for cancer. The J.C. Penney Company was

well aware of his age and disability at the time of his termination.

Nelson alleged unlawful age discrimination, retaliation,

disability discrimination, and unlawful retaliation under

ERISA. Aneight-day jury trial was held in Sioux City, lowa, July

13-22, 1993.

The jury found that Nelson was the victim of unlawful age

discrimination and retaliation, and that Penney’s conduct was

willful. The court dismissed Nelson’s disability and ERISA

claims in a subsequent post-trial opinion.

The court determined the damages in this case. Following

various post-trial motions, and further findings of fact, the court

entered an Order and Judgment in Nelson’s favor of $932,280,

plus interest. It denied Penney’s motions for a new trial on

December 23, 1994.

The Penney Company appealed the case to the United States

Court of Appeals for the Eighth Circuit. In Nelson v. J.C. Penney

Company, Inc., __ F.3d __ (8th Cir. 1996) (Exhibit B), that court

issued a decision that reversed and dismissed the Judgment and

Order entered by the District Court.

Following the filing of a petition for Rehearing En Banc, the

three-judge panel of the Court of Appeals that initially heard the

case issued a slightly modified opinion on January 24, 1996. A

majority of the full court, with Chief Judge Arnold and Judge

Beam dissenting, issued an Order denying the Petition for

Rehearing En Banc on March 4, 1996.

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The operative facts of this case are set out, for the most part

in the District Court Opinion which is attached as Exhibit C.

REASONS FOR GRANTING THE WRIT

A Writ of Certiorari must issue in this case for two basic

reasons. First of all, the United States Court of Appeals for the

Eighth Circuit has refused to follow the test set forth by this

Court in St. Mary’s Honor Center v. Hicks, __U.S.__ 1135S. Ct.

2742 (1993). The decision of the three-judge panel, even when

modified, did not refer to or even cite the Hicks case and its

holding regarding a plaintiff’s proof of discrimination. The

rationale announced by the Eighth Circuit runs directly against

the standard articulated by this Court in Hicks, where it stated as

follows:

The fact finders disbelief of the reasons put

forward by the defendant (particularly if

disbelief is accompanied by a suspicion of

mendacity)may, together with the elements

of the prima facie case, suffice to show

intentional discrimination. Thus, rejection

of the defendants proffered reasons, will

permit the trier of fact to infer the ultimate

fact of intentional discrimination, [FN4] and

the Court of Appeals is correct when it noted

that, upon such rejection, “[n]o additional

proof of discrimination is required,” 970

F.2d. at 493 (emphasis added).

113 S.Ct. at 2749.

Though Hicks was not an age discrimination case, this Court

has acknowledged in O’Connor v. Consolidated Coin

Operators, __ U.S. __, 64 U.S.L.W. 4243, 4244 (1996) that it

would apply to ADEA claims as well. Nelson submits that the

Eighth Circuit clearly erred in holding that he was required to

produce additional, direct evidence of discrimination, when the

jury determined that Penney’s articulated reasons were

pretextual, and found that age discrimination occurred.

Contained within this refusal to follow Hicks is the issue of

whether a jury in an ADEA case must have direct proof of age

discrimination in order to find for the plaintiff.

Secondly, the decision by the Court of Appeals appears to be

in direct conflict with the decision in Rhodes v. Guiberson Oil

Tools, 39 F.3d 537, reh. en banc, __ F.3d ___ ,1996 U.S. APP.

LEXIS 9877 (Sth Cir. 1996), and Barbour v. Merrill, 48 F.3d

1270(D.C. Cir. 1995), cert. granted, 116S.Ct. 805 (1996). Inthe

Rhodes case, the Court of Appeals for the Fifth Circuit, in a

rehearing en banc, reversed the decision of a three-judge panel

that had vacated a jury award in Mr. Rhodes favor. That court

correctly followed the standards articulated in Hicks, and

determined if there was any evidence in the record to support the

discrimination claim, and the jury found the announced reasons

to be pretextual, the court had a duty to affirm the jury verdict.

THE COURT OF APPEALS FAILED TO FOLLOW

THE STANDARD SET BY THIS COURT IN THE HICKS

DECISION, SINCE IT REQUIRED NELSON TO PRODUCE

DIRECT EVIDENCE OF AGE DISCRIMINATION.

Nelson is cognizant of the fact that this Court accepts a very

limited number of cases for review. However, Nelson feels that

a plaintiff’s right to have the jury act as the factfinder will be

abolished unless the decision of the Court of Appeals is reversed.

Nelson fully presented his age discrimination claim during

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an eight-day trial. The jury listened to all the testimony on his

behalf, as well as the testimony presented by The Penney

Company in its defense. The jury obviously had much more

familiarity with the facts and the witnesses than did the three-

judge panel of the Court of Appeals. Yet the Court of Appeals

chose to ignore the deliberations and observations made by the

jury, and dismissed a verdic. in Nelson’s favor that was clearly

supported by evidence of discrimination as well as pretext on the

part of The Penney Company.

This Court acknowledged in Hicks the great deference that

should be given to the factfinder in a discrimination trial:

That the employer’s proffered reason is

unpersuasive, or even obviously contrived,

does not necessarily establish that the

plaintiff’s proffered reason of race is correct.

That remains a question for the factfinder to

answer, subject, of course, to appellate

review — which should be conducted on

remand in this case under the “clearly

erroneous” standard of Federal Rule of Civil

Procedure 52(a), see, e.g., Anderson v.

Bessemer City, 470 U.S. 564, 573-576

(1985).

113 S.Ct. at 2756.

In accord with its prior decision in Texas Dept. of

Community Affairs v. Burdine, 450 U.S. 248, 252-253 & n.6, 101

S. Ct. 1089, 1093-94, & n. 6 (1981), wherein this Court stated

that the plaintiff may meet its burden of persuasion by proving

the defendants proffered reasons were pretextual, the Hicks

decision repeatedly stressed that it was up to the factfinder to

determine whether the defendant had committed unlawful

discrimination. That finding, the Court noted, could be based on

the falsity of the proffered defense, or something more.

However, nowhere did the Court state that a plaintiff had to have

some “direct evidence” of unlawful discrimination in order to

prevail as a matter of law.

Rather, the Court concluded as follows:

We reaffirm today what we said in Aikens:

[T]he question facing triers of fact in

discrimination cases is both sensitive and

difficult. The prohibitions against

discrimination contained in the Civil Rights

Act of 1964 reflect an important national

policy. There will seldom be “eyewitness”

testimony as to the employer’s mental

processes. But none of this means that trial

courts or reviewing courts should treat

discrimination differently from other

ultimate questions of fact. Nor should they

make their inquiry even more difficult by

applying legal rules which were devised to

govern “the basic allocation of burdens and

order of presentation of proof,” Burdine, 450

U.S. at 252, in deciding this ultimate

question. Aikens, 460 U.S. at 716.

113 S.Ct. at 2756.

As a matter of illustration, Nelson sets out, in a side-by-

side comparison, the Eighth Circuit standard and the Hicks

standard:

re oe ee

LANGUAGE FROM

NELSON v. J.C.

PENNEY CO.

A fact finder may not simply

convert a condition that is

necessary for a finding of

liability (here, knowledge of

a plaintiff’s age) into one that

is sufficient for such finding.

In view of all of these

circumstances, and con-

sidering the insubstantial

character of the evidence

presented with respect to age

discrimination, we cannot

agree with the trial court that

Mr. Nelson established a

submissible case that age

“actually motivated” Penney’s

decision to fire him. Nelson, 26

F.3d at 800, quoting Hazen

Paper Co. v. Biggins, 113

S.Ct. 1701, 1706 (1993)

(emphasis supplied in

Nelson). We see no evidence

“directly reflecting the al-

leged discriminatory atti-

tude.” Nelson, 26 F.3d at 800,

quoting Ostrowski, 968 F.2d

at 182.

(Ex. B at 5-6) (emphasis added).

LANGUAGE FROM

HICKS

Thus, rejection of the

defendants proffered rea-

sons, will permit the trier of

fact to infer the ultimate fact

of intentional discrimina-

tion, [FN4] and the Court of

Appeals is correct when it

noted that, upon such

rejection, “[n]o additional

proof of discrimination is

required,” 970 F.2d at 493.

113 S.Ct. at 2749.

These two decisions cannot be squared. If the Eighth Circuit

is bound by the Hicks decision, it cannot vacate the jury verdict

under these facts.

A literal reading of Hicks implies that all evidence, whether

direct or circumstantial, has weight; neither is inherently better

than the other. This Court suggested that the trier of fact can and

should use its collective common sense, and that the collective

common sense may sometimes be sufficient tocarry the day with

the jury.

The Court of Appeals agreed that Nelson established a prima

faciacase, but then stated that there must be evidence sufficient

to permit the jury to find that a discriminatory attitude was more

likely than not the motivating factor. (Ex. B, p.4). Itignores the

fact that the jury did just that when it ruled in Nelson’s favor and

found the violation to be willful.

Nelson contends the following record evidence did support

the jury’s determination that his age was a sustaining factor:

1. Henderson told Nelson that he knew Nelson’s

birthday while meeting with him in the regional office.

(J.A. 817, 834-836) (Ex. B., p. 4).

2. Penney’s expert witness testified that store

managers are expected to retire at age 60 because their

retirement benefits are maximized. (J.A. 834-836).

3. Nelson was 55 at the time of his discharge, and was

replaced by a 42 year-old man.

4. Henderson, one of his managers, wrote Nelson’s

age at the top of his notes that he reviewed with another

regional manager, Ted Stewart, when Nelson was being

transferred. (Pl. Ex. 30).

The panel bypassed key points of evidence that allowed the

jury, and Judge O’ Brien, toconclude that age was the motivating

factor. (Ex. B, p.4-6) (J.A. 834-836). Whether it was any one of

these factors that swayed the jury, or all collectively, the point is

there was “sufficient evidence for a reasonable jury to reject

defendant’s proffered reasons”, as cited above.

The panel further attempted to justify its rationale by stating

that Nelson’s difficulties in dealing with employees were both

serious and longstanding. (Ex. B., p.5). Asimple review of his

continual favorable employment evaluations, which do not

indicate any such pattern of conduct (PI. Ex. 24, 25), indicate that

this decision is a reach by the panel to rewrite a jury

determination that someone did not like.

Judge McMillian wrote aconcurring opinion in the decision

to deny the rehearing en banc, stating that the Court erroneously

applied the mixed motive test from Boatman’s Bancshares,

which does require some additional proof of discrimination.

I write specially to note that the panel

opinion is misleading in adopting the dicta

set forth in Nelson v. Boatmen’s Bancshares,

Inc., 26 F.3d 796 (8th Cir. 1994) (Boatmen’s

Bancshares), which relies upon Radabaugh

v. Zip Feed Mills, Inc., 997 F.2d 444 (8th Cir.

1993), and Ostrowski v. Atlantic Mut. Ins.

Cos., 968 F.2d 171, 182 (2nd Cir. 1992). The

latter are mixed-motive cases in which direct

evidence is required. Furthermore,

Boatmen’s Bancshares is a reduction-in-

force case in which this court has

traditionally required additional! proof of

age-animus beyond pretext. See Holley v.

Sanyo Mfg., Inc., 771 F.2d 1161, 1165-66

(8th Cir. 1987); cf. Hillebrand v. M-Tron

Indus., Inc., 827 F.2d 363, 366-68 (8th Cir.

1987), cert. denied, 488 U.S. 1004 (1989).

Neither of these tests applies to the Burdine

analysis dealing with proof of pretextual

reasons. As such, the panel opinion, in what

is purportedly a pretext case, will cause

continued confusion to the district courts and

attorneys of this circuit.

(Ex. A. p. 2-3).

This concurring opinion, in a _ footnote, tacitly

acknowledged that the Eighth Circuit, unlike others, is not .

following the standard set forth in Hicks.

As the Seventh Circuit has pointed out in

Collier v. Budd Co., 66 F.3d 886, 893 n 11 (7th

Cir. 1995), use of the Boatmen’s Bancshares

testin a pretext situation is inconsistent with

recent decisions from most of the other

circuits.

This court has held that the Supreme

Court in Saint Mary’s [Honor Ctr. v.

Hicks] adopted a version of the

“pretext-only” rule that allows (but

does not require) a jury to find

intentional discrimination if the

employer has offered false or

pretextual reasons for the discharge.

Anderson v. Baxter Healthcare Corp.,

13 F.3d 1120, 1123-24 (7th Cir. 1994);

see also Lloyd v. Phillips Brothers,

Inc., 25 F.3d 518, 522 (7th Cir 1994). .

Under the pretext-only rule, rejection

of the employer’s proffered reasons is

sufficient to permit a finding of

discrimination; “no additional proof

of discrimination is required.”

Anderson, 13 F.3d at 1124, quoting

Saint Mary’s [Honor Ctr. V. Hicks], __

U.S. at__,113 S.Ct. At2749; see also

Lloyd, 25 F.3d at 522 (“The trier of fact

may infer intentional discrimination

from its disbelief of the reasons put

forward by the defendant and the

elements of the prima facie case alone

but is not required to do so.”) The

majority of other circuits to address

this question have endorsed this

version of the pretext-only rule. See

Waldron v. SL Industries, Inc., 56 F.3d

491, 495 (3rd Cir. 1995); Walker v.

NationsBank of Florida N.A., 53 F.3d

1548), 1557 (11th Cir. 1995); Barbour

v. Merrill, 48 F.3d 1270, 1277 (D.C.

Cir. 1995), cert. [granted in part, 116

S.Ct. 805 (1996)]; E.E.0.C. v. Ethan

Allen, Inc., 44 F.3d 116, 120 (2nd Cir.

1994); Washington v. Garrett, 10 F.3d

1421, 1433 (9th Cir. 1993); but see,

Nelson v. Boatmen’s Bancshares, Inc.,

26 F.3d 796, 801 (8th Cir. 1994)

(employee must present additional

“evidence capable of proving that the

real reason for his termination was

discrimination based on age” in order

to recover); Rhodes v. Guiberson Oil

Tools, 39 F.3d 537, 543-45 (5th Cir.

1994) (simply disproving proffered

reasons is not sufficient to allow 4

finding of age discrimination, [reh'd |

en banc, 1996 WL 37846 (Jan. 31,

1996)].

(Ex. A. at 2-3).

In Barbour v. Merrill, 48 F.3d 1270 (D.C. Cir. 1995), cert.

granted, 1168S. Ct. 805 (1996), the court determined that proof

of the pretext of the employer’s reasons, standing alone, was

enough to uphold a jury verdict on a race discrimination claim.

It stated:

As Hicks explained, a factfinder’s rejection

of the employer’s nondiscriminatory

reasons, while not sufficient to compel a

finding of discrimination, nonetheless

suffices to permit such a finding. Jd. at __,

113 S. Ct. At 2749. According to Hicks, a

plaintiff need only establish a prima facie

case and introduce evidence sufficient to

discredit the defendant’s proffered

nondiscriminatory reasons; at that point, the

factfinder, if so persuaded, may infer

discrimination. Jd.

48 F.3d at 1277.

This was the proper interpretation of the Hicks standard. A

court cannot unilaterally impose the additional requirement of

direct proof that age was a factor, where Hicks clearly removed

any such doubt.

The panel erroneously relied on Nelson v. Boatman’s

Bancshares, Inc., 26 F.3d 796 (8th Cir. 1994), areduction in force

case. Even so, Dale Nelson can only wish that he received the

standard of review that was awarded to Clarence Nelson in the

Boatmen’s case.

The evidence of age discrimination in Boatmen’s case was

apparently based upon a 1989 memo stating that Nelson should

be given early retirement, but was not given achance to correct

his performance.

Because Darnall’s April 27, 1989, memo

shows he had already decided that Nelson

should be terminated and given early

retirement and because Darnall did not in fact

permit Nelson to correct his work

performance, the jury could reasonably infer

that Darnall was hiding a motivation to fire

Nelson because of his age. Furthermore,

Boatmen’s proffered nondiscriminatory

explanation was seriously undermined, not

only by Nelson’s evidence of his respectable

performance but also by the conflicting

testimony of two Boatmen’s managers. . . .

It is clear that the jury believed Nelson’s

evidence and did not believe Boatmen ’s

proffered explanation that it fired Nelson

because his performance has not been as

good as other traders. As we have stated,

Nelson’s evidence disproving Boatmen’s

proffered explanation is not necessarily

sufficient. In this case, however, Nelson’s

evidence is strong enough, and Boatmen’s

case has been rendered weak enough, that the

record as a whole is sufficient to support an

inference that Boatmen’s fired Nelson witha

discriminatory age-related animus. Under

these circumstances, the jury reasonably

could have drawn the inference that

Boatmen’'s_ intentionally discriminated

against Nelson on account of his age.

26 F.3d at 802 (emphasis added).

In the instant case, the court erroneously stated that the

Boatmen’s case required Nelson to have direct proof of

discriminatory statements. The panel stated, “Such evidence

must include. . .” conduct or statements by persons involved in

the decisionmaking process. (Ex. B. at 3-4).

The Boatmen's case did not require a standard so rigorous.

It stated, “To meet this burden, Nelson must convince the fact

finder that Boatmen’s had an age-related discriminatory animus

...", 26 F.3d at 800. This would involve statements by those

decisionmakers, which would allow the fact finder to infer a

discriminatory attitude. In the instant case, the jury did just that,

but it was ignored by the panel.

This unprecedented additional proof requirement imposed

on Nelson is in direct conflict with the Eighth Circuit’s own prior

ruling in Rinehart v. City of Independence,__ F.3d __, 65 FEP

Cases 1548 (8th Cir. 1994), wherein it stated as follows:

Similarly, we have never required

plaintiffs bringing age discrimination claims

to make as part of the fourth element of a

prima facie case an “additional showing” that

age was a factor in the termination decision

other than in reduction-in-force cases. See,

e.g., Bashara v. Black Hills Corp., 26 F.3d

820, 823 (8th Cir. 1994); Nelson v. Boatmen’s

Bancshares, Inc., 26 F.3d 796, 800 (8th Cir.

1994); Holley v. Sanyo Mfg., Inc., 771 F.2d

1161, 1165-66 (8th Cir. 1985). In Bashara,

we specifically stated:

In circumstances not involving a

reduction in force, a plaintiff may

make a prima facie case of age

discrimination by establishing (1) that

he is within the protected age group;

(2) that he met applicable job

qualifications; (3) that he was

discharged; and (4) that, after his

discharge, the position remained open

and the employer sought applicants

with similar qualifications to fill the

position. See, e.g., Holley, 771 F.2d at

1165. In the context of a reduction in

force, however, the fourth

requirement creates difficulties. The

plaintiff’s position does not remain

open; rather it is eliminated or

combined with another position. /d.

Accordingly, in Holley, we held that to

establish a prima facie case in a

reduction-of-force situation, the

plaintiff must meet the first three

requirements and “‘must come

forward with additional . . . evidence

that age was a factor in his

termination’”. /d. at 1166 (quoting

LaGrant v. Gulf & Western Mfg. Co.,

748 F.2d 1087, 1091 (6th Cir. 1984)).

26 F.3d at 823. As Bashara demonstrates, we

have limited this “additional showing” that

age was a factor in the plaintiff’s termination

to cases involving a reduction in force.

Because there is agreement that this is not a

reduction-in-force case, we conclude that the

district court erred by requiring Rinehart to

make an additional showing that age was a

factor in his termination as part of his prima

facie case.

65 FEP Cases at 1551.

It is important to point out that Nelson’s case presented

difficult issues for the court to resolve on damages as well, such

as whether Social Security disability benefits had to be offset, the

amount of front pay to be allowed, the taxability of the award,

and whether the damages assessed as a willful violation were

proper. Further, the jury found Nelson to be the victim of

unlawful retaliation. Rather than address these issues, some of

which it had not previously confronted, it appears the Eighth

Circuit took the easy way out by vacating the jury verdict, even

though that decision flew in the face of its own prior rulings.

Nelson is left to wonder what happened to the same court’s

ruling in Gaworski v. [TT Commercial Finance Corp., 17 F.3d

1104 (8th Cir. 1994), wherein it held as follows:

(1) where the elements of a prima facia case

are present, and (2) there exists sufficient

evidence for a reasonable jury to reject the

defendant’s proffered reasons for its actions,

then the evidence is sufficient to allow the

jury to determine whether intentional

discrimination has occurred, and we are

without power to reverse the jury’s finding.

17 F.3d at 1110 (emphasis added).

The Gaworski court also stated that ajury’s disbelief of the

employer’s reasons could serve the additional purpose of

establishing the discriminatory intent. It noted that in that

situation, “ ... no additional proof of discrimination is

required.” 17 F.3d at 1110. Yet the Eighth Circuit required

Nelson to produce what it determined to be additional necessary

evidence, ignoring the fact that the jury had already reached that

conclusion, in accord with Gaworski.

The court in Gaworski stated it was “without power” to

reverse that jury’s finding of unlawful age discrimination. The

panel in this case had no problem in second-guessin gthejury and

then substituting its own findings of fact and rationale for that of

the judge and jury. Thisis clearly wrong anda departure from all

past precedent. See Brown v. Stites Concrete, Inc., 994F.3d553,

557 (8th Cir. 1992) (“Our task on review is not to act as the trier

of fact” even though we might have reached a different result).

The appeal in Doyne v. Union Electric Co., 953 F.2d 447 (8th

Cir. 1992), was in exactly the same procedural posture as the

instant case. Doyne had won a jury verdict in an age

discrimination case. However, in Doyne, the Eighth Circuit

affirmed the jury’s determinations, Stating it would review such

decisions as follows:

We must: 1) consider the evidence in the ught

most favorable to Doyne; 2) assume that all

conflicts in the evidence were resolved by the

jury in Doyne’s favor; 3) assume Doyne

proved all the facts his evidence tends to

prove; 4) give Doyne the benefit of all

favorable inferences which may reasonably

be drawn from the facts proved; and 5) affirm

the denial of the j.n.o.v. motion if reasonable

persons could differ as to the conclusions to

be drawn from the evidence See Frieze v.

Boatmen’s Bank of Belton, 950 F.2d 538, 539

(8th Cir. 1991); Gilkerson v. Toastmaster,

Inc., 770 F.2d 133, 136 (8th Cir. 1985).

953 F.2d at 449.

This panel did none of the above. In fact, it departed totally

from this standard of review, especially points 3 and 4, when it

stated, “The fact that Mr. Nelson’s replacement in North Dakota

was significantly younger than he possesses, in our view,

insufficient probative value to persuade a reasonable jury that

Mr. Nelson was discriminated against.” (Emphasis added). (Ex.

B,p.5).

The underlying decision presents the question of whether a

plaintiff in the Eighth Circuit will have his case determined by

the random draw of which three judges are assigned to hear his

case, rather than a uniform standard grounded in Supreme Court

precedent. That is simply not the way our federal laws are

supposed to be interpreted.

The decision rendered by this panel relegates the jury ina

pretext case to issuing an advisory opinion. Ajury verdict means

nothing if the appellate court can freely second-guess all

findings of fact the jury made, and substitute its judgment for that

of the people who saw the case and weighed the evidence. If

there was any doubt that this jury felt that age was the motivating

factor, that should have been dispelled by the finding of

willfulness as well.

If past precedent means anything, if ajury is truly the finder

of fact in these cases, if this Court’s ruling in Hicks is to be

consistently followed, then this decision must be reversed.

Il.

THERE IS A SPLIT AMONG THE COURTS OF

APPEAL IN APPLYING THE HICKS DECISION

REGARDING THE AMOUNT OF PROOF NECESSARY

TO SUPPORT A JURY VERDICT WHICH THIS COURT

MUSTADDRESS.

The decision in the Nelson case appears to be in direct

conflict with the recent decision in Rhodes y. Guiberson Oil

Tools, supra. In Rhodes, the court’s en banc decision reversed a

determination by the three-judge panel, and reinstated the jury

verdict that had been obtained by Rhodes at trial.

Attrial, the company said that Rhodes actually was fired for

inadequate job performance. The jury returned a verdict for

Rhodes on his age discrimination claim but declined to find that

Guiberson had committed a willful violation of the ADEA.

In a 2-1 ruling, the Fifth Circuit panel reversed the jury’s

verdict in favor of Rhodes and vacated the $188,866 judgment

against Guiberson. The panel said that the jury lacked arational

basis for inferring age discrimination based on “generalized

comments” by Guiberson’s sales manager. Granting a petition

by Rhodes, the full Fifth Circuit vacated the panel opinion and

agreed to rehear the case.

Writing for the majority, Judges W. Eugene Davis and John

M. Duhe, Jr. said that thé circuit reviews jury verdicts under the

standard set out in it opinion in Boeing Co. v. Shipman, 411 F.3d

365 (Sth Cir. 1969), which held that a conflict in substantial

evidence raises a jury question, and that a court may consider

circumstantial as well as direct evidence in determinin g whether

there is sufficient evidence to support a jury verdict.

The Supreme Court’s decision in Hicks was deemed by the

Court to be consistent with the Boeing formula for reviewing

jury awards. It suggested that under Hicks, review of jury awards

inevitably will “vary from case to case.” The court said that

Rhodes produced sufficient evidence to cast doubt on

Guiberson’s stated reason for terminating him and that the jury

could reasonably find that it was a pretext for age bias. See also,

Barbour v. Merrill, supra, discussed above.

There is a great deal of factual similarity between the

Rhodes case and Nelson’s trial. In his prima facie case, Rhodes

showed that he was 56 years old when terminated, that Guiberson

knew at the time of termination that Rhodes would be replaced,

and that he was replaced within six weeks by a 42-year-old.

When Guiberson contended at trial that Rhodes’ job

performance was subpar, Rhodes presented supporting

testimony from customers and a former supervisor.

Similarly, Nelson presented testimony that he was 55 years

old at the time of his discharge, and was replaced by a 42-year-

old manager. Nelson also presented evidence from former and

current Penney employees that he was a good and honest

manager. Further, the alleged reasons for employee complaints

and alleged performance deficiencies were exposed at his trial as

being pretextual as well.

The Rhodes court interpreted the Hicks decision as follows:

To sustain a finding of discrimination,

circumstantial evidence must be such as to

allow a rational factfinder to make a

reasonable inference that age was a

determinative reason for the employment

decision. The factfinder may rely on all the

evidence in the record to draw this inference

of discrimination. In tandem with a prima

facie case, the evidence allowing rejection of

the employer’s proffered reasons will often,

perhaps usually, permit a finding of

discrimination without additional evidence.

Thus, a plaintiff can avoid summary

judgment and judgment as a matter of law if

the evidence taken as a whole (1) creates a

fact issue as to whether each of the

employer’s stated reasons was what actually

motivated the employer and (2) creates a

reasonable inference that age was a

determinative factor in the actions of which

plaintiff complains. .. .

__F.3dat __, 1996 U.S. APP. LEXIS at 9879.

The court then applied the standard to the facts presented by

Rhodes, and concluded that there was sufficient proof to uphold

the jury verdict.

Based on this evidence, the jury was

entitled to find that the reasons given for

Rhodes’ discharge were pretexts for age

discrimination. The jury was entitled to find

that Guiberson’s stated reason for

discharging Rhodes — RIF — was false.

Additionally, the reason for discharge that

Guiberson Oil proffered in court to meet

Rhodes prima facie case was countered with

evidence from which the jury could have

found that Rhodes was an excellent salesman

who met Guiberson Oil’s legitimate

productivity expectations. Viewing this

evidence in the light most favorable to

Rhodes, a reasonable jury could have found

that Guiberson Oil discriminated against

Rhodes on the basis of his age.

__F.3dat __, 1996 U.S. APP. LEXIS at 9881.

The jury in the instant case also concluded that the reasons

stated by Penney’s for Nelson’s dismissal were false. It also had

evidence to conclude Nelson was an excellent store manager,

based upon his evaluations, just as the jury in Rhodes concluded

his discharge could not have been based on poor performance.

However, the Eighth Circuit opinion concluded that Nelson

had to have direct evidence of age discrimination to make the

jury verdict stand. This is plainly far beyond the burden of proof

that this Court established in Hicks.

The Rhodes court correctly applied the burden of proof ina

pretext claim. The Nelson court did not, as acknowledged by

Judge McMillian’s concurrence wherein he stated the majority

incorrectly applied a mixed motive text.

Conversely, in Fuentes v. Perskie, __ F.3d ___,65 FEP Cases

890 (3rd Cir. 1994), that court held that the plaintiff cannot

simply show that the employer’s decision was wrong or

mistaken. Rather, the plaintiff must show that such

inconsistencies or contradictions are such that the factfinder

would label them unworthy of credence.

It seems that the Third Circuit requires something more than

pretext, comparable to what the Eighth Circuit did in this case.

Such holdings are plainly contrary to this Court’s holding in

Hicks, and must be corrected to enable all parties to have a

consistent application of the ADEA, regardless of the

geographic area where they live.

aie iial

Nelson is entitled to have his jury verdict given the same

deference as was Rhodes. Based upon the facts and authorities

set forth above, Nelson asks this Court to grant this Petition for

Certiorari, and reverse the decision below, in order to insure that

all appellate courts properly follow the Hicks decision in

analyzing the proof needed to sustain a jury verdict.

CONCLUSION

The decision in the instant case is in conflict not only with

the decision in Hicks and the other Courts of Appeals, but also

with its own prior decisions. This ruling involves an important

federal question that will impact future age discrimination trials,

and is such a departure from the normal course of judicial

proceedings that exercise of this Court’s supervisory powers is

warranted. Based on the facts and authorities set forth above,

Nelson asks this Court to grant his Petition For Certiorari, and

ultimately reinstate the judgment he received in the District

Court, or, ata minimum, reverse the Eighth Circuit’s decision on

the liability issue on the age discrimination claim, and remand

this case for a determination of the damages issues that were

presented.

Respectfully submitted,

JAMES C. ZALEWSKI

Counsel of Record

DeMARS, GORDON, OLSON,

RECKNOR & SHIVELY

1225 L Street, Suite 400

P.O. Box 81607

Lincoln, Nebraska 68501-1607

(402) 438-2500

EMMANUAL S. BAKAKIS

BAKAKIS & ARNESON

340 Insurance Centre, 507-7th

Sioux City, lowa51101

(712) 277-1434

Attorneys for Petitioner

APPENDIX A — ORDER DENYING REHEARING IN

THE UNITED STATES COURT OF APPEALS FOR

THE EIGHTH CIRCUIT DATED MARCH 4, 1996

UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

No. 95-1253

Dale Nelson,

Appellee,

vs.

J.C. Company, Inc.,

Appellant.

Appeal from the United States

District Court for the

Northern District of lowa

The suggestion for rehearing en bane is denied. Chief Judge

Richard S. Arnold and Judge Beam would grant the suggestion

for rehearing en banc.

MCMILLIAN, Circuit Judge, specially concurring in the denial

of the suggestion for rehearing en banc.

I do not disagree with the factual analysis of the panel

opinion or the result reached in this case. On that basis I concur

in the denial of the petition for rehearing en banc. As the panel

opinion indicates, the evidence was insufficient to create a

factual dispute as to whether age discrimination was a

motivating factor in plaintiff’s termination. In Texas Dep't of

Appendix A

Community Affairs v. Burdine, 450 U.S.248 (1981) (Burdine), as

clarified by St. Mary’s Honor Ctr. v. Hicks, 113 S.Ct.2742 (1993)

(Hicks), the Supreme Court provided alternative methods by

which employment discrimination can be proven. The Court

observed that, when a defendant offers a nondiscriminatory

reason for discharge, a plaintiff may submit sufficient evidence

to permit a jury to find intentional discrimination in one of two

ways: “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 credence.” Burdine, 450 U.S. at 256 (emphasis

added); see Hicks, 113 S. Ct. at 2749. As the panel opinion

demonstrates, there was insufficient direct evidence of

discrimination or indirect evidence of pretext to create an issue

for the jury in this case. The Burdine standard still controls in

those circumstances. It has been followed by all of the circuits,

including our own circuit, in post-Hicks cases.

I write specially to note that the panel opinion is misleading

in adopting the dicta set forth in Nelson v. Boatmen’s Bancshares

Inc., 26 F.3d 796 (8th Cir. 1994) (Boatmen’s Bancshares), which

relies upon Radabaugh v. Zip Feed Mills, Inc., 997 F.2d 444 (8th

Cir. 1993), and Ostrowski v. Atlantic Mut. Ins. Cos., 968 F.2d

171, 182 (2nd Cir. 1992).' The latter are mixed-motive cases in

1. As the Seventh Circuit has pointed out in Collier v. Budd Co., 66 F.3d

886, 893 n.11 (7th Cir. 1995), use of the Boatmen’s Bancshares test in a pretext

situation is inconsistent with recent decisions from most ofthe othercircuits. .

This court has held that the Supreme Court in Saint

Mary’s [Honor Ctr v. Hicks] adopted a version of the

“pretext-only” rule that allows (but does not require) a

jury to find intentional discrimination if the employer

has offered false or pretextual reasons for the

(Cont’d)

Appendix A

which direct evidence is required. Furthermore, Boatmen’s

Bancahares is a reduction-in-force case in which this court has

traditionally required additional proof of age-animus beyond

pretext. See Holley v. Sanyo Mfg., Inc., 771 F.2d 1161, 1165-66 |

(Cont'd)

discharge. Anderson v. Baxter Healthcare Corp., 13

F.3d 1120, 1123-24 (7th Cir. 1994); see also Loyd v.

Phillips Brothers Inc., 25 F.3d 518, 522 (7th Cir.

1994). Under the pretext-only rule, rejection of the

employer’s proffered reasons is sufficient to permita

finding of discrimination; “no additional proof of

discrimination is required.” Anderson, 13 F.3d at

1124, quoting Saint Mary's [Honor Ctr. v. Hicks : ae

U.S. at__, 113 S.Ct. at 2749; see also Loyd, 25 F.3d at

522 (“The trier of~fact may infer intentional

discrimination from its disbelief of the reasons put

forward by the defendant and the elements of the prima

facie case alone but is not required to do so.”) The

majority of other circuits to address this question have

endorsed this version of the pretext-only rule. See

Waldron v. SL Industries, Inc., 56 F.3d 491 , 495 (3rd

Cir. 1995); Walker v. NationsBank of Florida N.A., 53

F.3d 1548, 1557 (11th Cir. 1995); Barbour v. Merrill,

48 F.3d 1270, 1277 (D.C. Cir. 1995), cert. [granted in

part, 116S. Ct. 805 (1996)); E.E.0.C. v. Ethan Allen,

Inc., 44 F.3d 116, 120 (2nd Cir. 1994); Washington v.

Garrett, 10 F.3d 1421, 1433 (9th Cir. 1993); but see

Nelson v. Boatmen’s Bancshares, Inc., 26 F.3d 796,

801 (8th Cir. 1994) (employee must present additional

“evidence capable of proving that the real reason for

his termination was discrimination based on age” in

order to recover); Rhodes v. Guiberson Oil Tools, 39

F.3d 537, 543-45 (Sth Cir. 1994) (simply disproving

proffered reasons is not sufficient to allow finding of

age discrimination), [reh'd en banc, 1996 WL 37846

(Jan. 31, 1996)].

Appendix A

(8th Cir. 1987); cf. Hillebrand v. M-Tron Indus., Inc., 827 F.2d

363, 366-68 (8th Cir. 1987), cert. denied, 488 U.S. 1004 (1989).

Neither of these tests applies to the Burdine analysis dealing with

proof of pretextual reasons. As such, the panel opinion, in what

is purportedly a pretext case, will cause continued confusion to

the district courts and attorneys of this circuit.

The petition for rehearing by the panel is also denied.

March 4, 1996

A true copy.

Attest:

CLERK, U.S. COURT OFAPPEALS, EIGHTH CIRCUIT.

APPENDIX B — OPINION OF THE UNITED STATES

COURT OF APPEALS FOR THE EIGHTH CIRCUIT

FILED JANUARY 24, 1996

UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

Nos. 95-1253/1305

Dale Nelson,

Appellee/Cross-Appellant,

J.C. Penney Company, Inc.,

Appellant/Cross-Appellee.

Equal Employment Opportunity Commission,

Amicus Curiae.

Appeals from the United States District Court for the

Northern District of Iowa.

Submitted: September 13, 1995

Filed: January 24, 1996

Before LOKEN, HANSEN, and MORRIS SHEPPARD

ARNOLD, Circuit Judges.

MORRIS SHEPPARD ARNOLD, Circuit Judge.

Appendix B

Dale Nelson began working for J. C. Penney department

stores in 1960. In 1983, he became the manager of a store in lowa.

In late 1990, he was transferred to become the manager of a

smaller store in North Dakota. Four and a half months later,

shortly after he turned 55, he was fired.

Mr. Nelson sued Penney in federal court in Iowa in late

1991, alleging age discrimination, retaliatory discharge (he had

filed an age discrimination charge with the appropriate

administrative agency a month before he was fired), and

discharge in violation of the Employee Retirement Income

Security Act (ERISA) (all under federal law), and disability

discrimination, invasion of privacy, intentional infliction of

emotional distress, and defamation (under Iowa law).

Atan eight-day mixed jury/bench trial in mid- 1993, the trial

court dismissed the claims of invasion of privacy and intentional

infliction of emotional distress for failure to state a claim. The

trial court did not instruct the jury on the claim of defamation.

The jury then found for Mr. Nelson on the age discrimination and

retaliatory discharge claims. The trial court found for Penney on

the claims of discharge in violation of ERISA and disability

discrimination. See Nelson v. J. C. Penney Co., 858 F. Supp. 914

(N.D. Iowa 1994). After denying post-trial motions, the trial

court entered judgment for Mr. Nelson in the amount of

approximately $930,000. Both sides appeal. We affirm in part

and reverse in part and remand the case for the entry of the

appropriate judgments.

Penney contended that Mr. Nelson was fired, after repeated

warnings, because of an abrasive and intimidating management

Appendix B

style. Mr. Nelson contended that Penney’s stated reason for

firing him was merely a pretext for age discrimination. The trial

court denied Penney’s motions for judgment as a matter of law,

both at trial and post-trial, on the age discrimination claim.

Penney appeals those denials. In reviewing the denial of a

defendant’s motion for judgment as a matter of law in an age

discrimination case submitted to a jury, we “focus on the ultimate

factual issue of whether the employer intentionally

discriminated against the employee on account of age.” Nelson

v. Boatmen’s Bancshares Inc., 26 F.3d 796, 800 (8th Cir. 1994).

That process requires an evaluation of three different questions.

Id. at 801.

First, we determine whether the plaintiff established a

prima facie case — i.e., that he was “within the protected age

group, .. .[that] he was performing his job at a level that met his

employer’s legitimate expectations, ... [that] he was

discharged, and . . . [that] his employer attempted to replace

him.” Radabaugh v. Zip Feed Mills, Inc., 997 F.2d 444, 448 (8th

Cir. 1993). For the purposes of this appeal, we assume that Mr.

Nelson established a prima facie case and thus created a

presumption of unlawful age discrimination by Penney. Nelson,

26 F.3d at 801. The existence of that presumption placed an

obligation upon Penney to rebut it, if possible. /d.

To rebut a presumption of unlawful age discrimination

created by a plaintiff’s prima facie case, anemployer has to offer

reasons for its actions that, if believed by a jury, would allow the

jury toconclude that the plaintiff’s age was not the reason for his

termination. Jd. Penney did so. There was evidence that many

store managers older than Mr. Nelson were still working and had

even been promoted. There was additional, and considerable,

evidence of Mr. Nelson’s difficulties in dealing with his

Appendix B

employees in Iowa and of a continuation of those difficulties

after his transfer to North Dakota (there was, moreover, no

evidence that Penney failed to discipline younger store

managers with the same or similar difficulties). Finally, both of

the supervisors who participated in the decision to fire Mr.

Nelson denied that his age was a factor in that decision.

Because Penney presented evidence of reasons other than

age for its decision to terminate Mr. Nelson, it is considered to

have rebutted his prima facie case. Id. The presumption of

unlawful age discrimination therefore drops out of the case, id.,

and we evaluate, last, only whether Mr. Nelson presented

evidence “capable of proving that the real reason for his

termination was discrimination based on age.” Jd. Suchevidence

must include “ ‘conduct or statements by persons involved in the

decisionmaking process that may be viewed as directly

reflecting the alleged discriminatory attitude’ ” of an extent

“ ‘sufficient to permit the [jury] to infer that that attitude was

more likely than not a motivating factor in the employer’s

decision.’ ” Jd. at 800, quoting Ostrowski v. Atlantic Mutual

Insurance Companies, 968 F.2d 171, 182 (2d Cir. 1992). With

that standard in mind, we examine the evidence offered by Mr.

Nelson as the basis for his age discrimination claim. Nelson, 26

F.3d at 802.

We have read the entire trial transcript with care. As far as we

can tell, Mr. Nelson presented four specific bases for his claim of

age discrimination. The first was the fact that when he was

transferred to North Dakota, and again when he was fired, his

replacements were younger than he was. Then, late in 1990,

around the time that Mr. Nelson was transferred to the store in

North Dakota, the district manager for lowa (Mr. Nelson’s prior

supervisor) called the district manager for North Dakota (Mr.

Appendix B

Nelson’s new supervisor) to advise him about Mr. Nelson’s

background. During that call, the district manager for North

Dakota made notes, among which he included the information

that Mr. Nelson was 54 years old. That inclusion was the second

basis for Mr. Nelson’s age discrimination claim. At a lunch in

early 1991 attended by Mr. Nelson, his wife, the district manager

for North Dakota, and two other Penney employees, the district

manager told Mr. Nelson that he knew Mr. Neison’s age. That

statement was the third basis for Mr. Nelson’s age discrimination

claim. Finally, although Mr. Nelson received negative comments

on his management style from various supervisors earlier in his

career, he was never otherwise disciplined or transferred

because of them until he was 54 years old.

It is true that the replacements for Mr. Nelson at both stores

were younger than he was; at the Iowa store, however, the age

difference between Mr. Nelson and his successor was only one

month. It is also true that the district manager for North Dakota

wrote down Mr. Nelson’s age when discussing him with the

district manager for Iowa. But the fact that Mr. Nelson’s

replacemeat in North Dakota was si gnificantly younger than he

possesses, in our view, insufficient probative value to persuade

a reasonable jury that Mr. Nelson was discriminated against.

Such a fact is consistent with age discrimination, but it cannot

alone support a reasonable inference of it. Nor do we believe that

the fact that the district manager knew Mr. Nelson’s age could

furnish the basis for a reasonable inference that his age was a

basis for his termination. A fact finder may not simply convert a

condition that is necessary for a finding of liability (here,

knowledge of a plaintiff ’s age) into one that is sufficient for such

a finding.

We have said that in “some Cases, evidence that an

10a

Appendix B

employer’s proffered nondiscriminatory explanation is wholly

without merit or obviously contrived might serve double duty,

... permitting an inferenee that age discrimination was a

motivating factor ina plaintiff’s termination.” Jd. at 801. This is

not such a case. There was no conflicting testimony or other

substantial evidence of deviousness on the part of the employer,

see id. at 802, from which areasonable fact finder could conclude

that the employer’s proffered reasons for Mr. Nelscn’s

termination were pretextual. See also Gaworski v. ITT

Commercial Finance Corp., 17 F.3d 1104, 1110 (8th Cir. 1994),

cert. denied, 115 S. Ct. 355 (1994). We do not think that the

simple fact that the employer’s testimony is necessarily self-

interested is enough under our previous cases to allow the jury to

find that the employer’s proffered reasons were pretextual. If it

were, then any case in which the plaintiff makes a prima facie

case is a submissible one because it must go to the jury whether

or not the employer produces bona fide reasons for its actions —

and we have never held that. Mr. Nelson’s personnel file did

contain occasional comments from earlier supervisors about his

need to improve his relationships with his employees. There is no

evidence in the record, however, showing that any of those

remarks was preceded by the number, intensity, or scope of

employee complaints that occurred in the year before Mr. Nelson

was fired.

In view of all of these circumstances, and considering the

insubstantial character of the evidence presented with respect to

age discrimination, we cannot agree with the trial court that Mr.

Nelson established a submissible case that age “ ‘actually

motivated’ ” Penney’s decision to fire him. Nelson, 26 F.3d at

800, quoting Hazen Paper Co. v. Biggins, 113 S.Ct. 1701, 1706

(1993) (emphasis supplied in Nelson). We see no evidence

“ ‘directly reflecting the alleged discriminatory attitude.’ ”

lla

Appendix B

Nelson, 26 F.3d at 800, quoting Ostrowski, 968 F.2d at 182. We

therefore vacate the judgment on the age discrimination claim

and remand the case for the entry of judgment for Penney on that

claim.

The evidence of retaliatory discharge was even less

substantial, consisting only of the facts that Mr. Nelson was fired

a month after filing an age discrimination charge with the

appropriate administrative agency and that both of the

supervisors involved in firing Mr. Nelson knew of that charge.

There is no evidence in the record that others who filed age

discrimination charges were fired, that Mr. Nelson’s supervisors

discussed the filing with each other, or that either of them even

commented to Mr. Nelson on that filing. There was considerable

evidence, moreover, that Mr. Nelson was reprimanded several

times and was given a final warning about the status of his job

before his supervisors knew of the age discrimination charge.

In light of all of these circumstances, we cannot agree with

the trial court that the mere coincidence of timing established a

submissible case of retaliatory discharge. See, e.g., Caudill v.

Farmland Industries, Inc., 919 F.2d 83, 86-87 (8th Cir. 1990)

(close temporal proximity between filing of age discrimination

charges and firing of plaintiff was only a “slender reed of

evidence” for which “rank speculation” would be required to

assume causal connection between the two events, in light of

other evidence presented); see also Quiroga v. Hasbro, Inc.,934

F.2d 497, 501 (3d Cir. 1991), cert. denied, 502 U.S. 940 (1991)

(“inference based on timing alone” was insufficient in light of

other evidence presented). We therefore vacate the judgment on

the retaliatory discharge claim and remand the case for the entry

of judgment for Penney on that claim.

12a

Appendix B

Il.

Mr. Nelson cross-appeals the trial court’s judgment for

Penney on his claims of discharge in violation of ERISA and

disability discrimination. We have carefully read the entire trial

transcript. We see no basis for vacating those judgments.

IV.

Mr. Nelson’s claim under state law for invasion of privacy

was based on a supervisor’s opening of Mr. Nelson’s locked desk

at the North Dakota store in his absence to obtain his personnel

file. The trial court dismissed that claim on the first day of trial,

stating that the alleged tort had occurred in North Dakota and that

no such tort is or would be recognized in North Dakota. Mr.

Nelson cross-appeals that dismissal.

The North Dakota Supreme Court has acknowledged that in

the states where the tort of invasion of privacy is recognized, it

usually takes one or more of four forms —”(1) appropriation of

a name or picture for commercial purposes without written

consent; (2) intrusion upon one’s solitude or seclusion; (3)

public disclosure of private information which is not necessarily

defamatory; and (4) placing a person in a false light... in

otherwise legitimate news stories.” City of Grand Forks v. Grand

Forks Herald. Inc., 307 N.W.2d 572, 578 n.3 (N.D. 1981). In at

least two cases, the North Dakota Supreme Court has assumed

for the sake of argument that a cause of action may exist for

commercial appropriation of a name without consent but has

sidestepped the question of the actual existence of that tort by

finding consent to use of the name. See American Mutual Life

Insurance Co. v. Jordan, 315 N.W.2d 290, 296(N.D. 1982), and

Volk v. Auto-Dine Corp., 177 N.W.2d 525, 529(N.D. 1970). In at

l3a

Appendix B

least one case, that court has assumed for the sake of argument

that a cause of action may exist for public disclosure of private

information but has sidestepped the question of the actual

existence of that tort by finding no evidence of proximate cause.

See Schleicher v. Western State Bank, 314 N.W.2d 293, 296

(N.D. 1982).

We have found no authority, however (and have been

directed to none), that would allow us to conclude that North

Dakota might recognize a cause of action for the type of intrusion

into a person’s solitude or seclusion of which Mr. Nelson

complains. Indeed, although it has been given a number of

opportunities to hold that some types of invasion of privacy are

actionable, the Supreme Court of North Dakota has consistent y

refused to do so. We believe that the trial court therefore

correctly decided that this studied reluctance does not bode well

for the acceptance of this kind of cause of action in North Dakota

in the future. Accordingly, we decline to disturb the trial court’s

ruling with respect to the claim for invasion of privacy.

In his reply brief, Mr. Nelson argues that Penney never

pleaded the applicability of North Dakota law and, therefore,

that the law of Iowa (where the case was tried) should have been

applied. That argument might prevail in the Iowa state courts (a

question upon which we express no opinion), but Mr. Nelson

sued in federal court, where pleadings are governed by the

federal rules. See, e.g., Bank of St. Louis v. Morrissey, 597 F.2d

1131, 1134-35 (8th Cir. 1979); see also Asay v. Hallmark Cards

Inc., 594 F.2d 692, 698-99 (8th Cir. 1979) (“a federal court

cannot be bound by a state’s technical pleading rules”). “The

federal courts are required to take judicial notice of the laws of

every state of the union. Consequently, it is not necessary to

plead state law, whether it be the forum state’s law or the law of

l4a

Appendix B

another state.” See 5 C. Wright and A. Miller, Federal Practice

and Procedure: Civil 2d § 1253 at 357-58 (1990). Since Mr.

Nelson does not contend that the trial court interpreted lowa

conflicts law improperly, we reject the argument that Penney’s

failure to plead the applicability of North Dakota law deprives

Penney of the benefit of that law on the claim for invasion of

privacy.

Mr. Nelson had serious health problems beginning in

mid-1989. His claim under state law for intentional infliction of

emotional distress was based on Penney’s transferring him to

North Dakota “with wanton disregard for [his] physical and

mental health.” The trial court dismissed that claim on the first

day of trial, stating that because Mr. Nelson had no expert

testimony to offer on the question of emotional distress, he could

not prevail, as a matter of law. Mr. Nelson cross-appeals that

dismissal.

In dismissing this claim, the trial court relied on Vaughn v.

Ag Processing, Inc., 459 N.W.2d 627, 636 (lowa 1990) (en

banc), in which the lowa Supreme Court held that when physical

problems are alleged to have derived from emotional distress,

expert testimony is required. We are dubious about the

applicability of Vaughn in the absence of claims for physical

problems consequent to emotional distress (and Mr. Nelson

evidently does not allege any such physical problems). We note,

however, that Mr. Nelson made no argument in the trial court (or,

for that matter, in his briefs on cross-appeal) that Vaughn did not

apply or that his claim for intentional infliction of emotional

distress could survive based solely on his subjective reaction to

his transfer. Indeed, Mr. Nelson’s lawyer stated at trial, with

15a

Appendix B

respect to Vaughn, that he had no “contrary authority” and that

Vaughn appeared to control (“that appears to be the lowa law as

far as what the cases have said”). Such aconcession amounts, in

our view, to a waiver (or an abandonment) of Mr. Nelson’s claim

for intentional infliction of emotional distress.

On cross-appeal, moreover, Mr. Nelson offers arguments

based on the sufficiency of the evidence on his claim for

intentional infliction of emotional distress. He made none of

those arguments in the trial court, as far as we can tell. Under all

of these circumstances, we decline to disturb the trial court’s

ruling on Mr. Nelson’s claim for intentional infliction of

emotional distress. See, e.g., Pedicov. P.A.M. Transport Inc., 60

F.3d 1300, 1304 (8th Cir. 1995).

VI.

Mr. Nelson’s defamation claim was based on the alleged

compelled self-publication by Mr. Nelson to two of his

employees of statements about himself — but written by Penney

— that Mr. Nelson considered defamatory. He submitted two

proposed jury instructions on defamation before trial. After the

close of the evidence, the trial court gave to the parties a set of

proposed jury instructions. No instruction on defamation was

included in that set.

During the jury instructions conference, the trial court asked

the parties to specify, with respect to the set given to them, both

the instructions objected to and any instructions omitted but still

requested. The lawyer for Mr. Nelson asked for the addition of

two jury instructions, neither of which related to defamation, and

stated that he had “no other problems” with the trial court’s set.

On at least five other occasions, Mr. Nelson’s lawyer repeated

l6a

Appendix B

that he was “done,” that he had “nothing else,” that the trial

court’s set seemed “fine,” that he could not “think of anything

else,” and that he had no further “problems or any record. . . to

make. . . or anything else” to bring up with the trial court.

By his lawyer’s explicit acceptance of the trial court’s

proposed jury instructions and his failure to offer during the jury

instructions conference any additional instructions on

defamation, Mr. Nelson abandoned his defamation claim. We

therefore reject his argument on cross-appeal that the

defamation claim should have been submitted to the jury.

VII.

For the reasons stated, we affirm the trial court with respect

to all of Mr. Nelson’s claims except age discrimination and

retaliatory discharge. We vacate the judgments on those claims,

as well as the associated judgments awarding attorney’s fees, and

remand the case for the entry of judgment for Penney on all

claims.

A true copy.

Attest:

CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.

17a

APPENDIX C — MEMORANDUM OPINION AND

ORDER OF THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF IOWA, WESTERN

DISTRICT FILED APRIL 26, 1994

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF IOWA

WESTERN DIVISION

NO. C91-4108

DALE NELSON,

Plaintiff,

vs.

J.C. PENNEY COMPANY, INC.

Defendant.

MEMORANDUM OPINION AND ORDER

Atrial was held in this matter. The first and second causes of

action (whether Plaintiff was discharged based on unlawful age

discrimination and whether Plaintiff was discharged unlawfully

in retaliation for his filing of an age discrimination charge with

the Iowa Civil Rights Commission) were tried toa jury. The third

and fourth causes of action (whether the Plaintiff was discharged

in violation of Section 510 of the Employee Retirement Income

Security Act (ERISA), 29 U.S.C. Section 1 140, and whether the

Plaintiff was discharged ir violation of the lowa Civil Rights Act

(ICRA)) were tried to the Court. The jury returned its verdict,

finding that Defendant willfully and unlawfully terminated

Plaintiff because of Plaintiff’s age, and in unlawful retaliation

for his filing of a discrimination charge.

18a

Appendix C

The Court now enters its findings of fact and conclusions of

law regarding the third and the fourth causes of action, and what,

if any, damages Plaintiff should receive. After careful

consideration, the Court upholds the jury verdict (finding willful

discharge in violation of the ADEA) and makes its own finding

that Defendant J.C. Penney did not violate ERISA, nor did it

violate the ICRA when it discharged the Plaintiff. Based upon the

Jury’s verdict, itis therefore ordered, adjudged, and decreed that

Plaintiff have a front pay judgment against the Defendant in the

amount of $569,503.20, less set-offs for both the Social Security

disability payments Plaintiff has received from the date of his

termination to the date of this Order and for the disability

payments Plaintiff has received from the Defendant, plus

interest as provided by law, and a back pay award of $703,064.50

with no prejudgment interest, reasonable attorney fees and the

costs of this action.

A. FINDINGS OF FACT

1. Defendant hired Plaintiff on October 10, 1960. Over the

years, Plaintiff worked for Defendant in a variety of

managerial positions at several midwest J.C. Penney stores.

During the 1960s, Plaintiff was disciplined once for

personnel problems relating to his store management.

2. Plaintiff became the manager of Defendant’s Sioux City

store in 1983.

3. Between 1983 and 1988, Plaintiff consistently received

favorable evaluations for his performance as Defendant’s

Sioux City store manager.

4. InApril, 1988, Plaintiff’s subordinates alerted Plaintiff's

19a

Appendix C

superiors that they were unhappy with Plaintiff’s

management style, particularly his employee relations.

Defendant responded by sending Plaintiff's immediate

supervisor, District Manager Ted Stewart, to Sioux City to

discuss these personnel issues with Plaintiff. District

Manager Stewart did not go into detail about the complaints

lodged against Plaintiff, but urged Plaintiff to improve his

employee relations and management style.

On December 13, 1988, Plaintiff met with District Manager

Stewart and Regional Personnel Manager Jim Fike to

discuss Plaintiff’s management style and “people issues.”

Again, Plaintiff was not given specific information about

the employee complaints lodged against him, but was urged

to improve.

On December 21, 1988, Plaintiff was summoned by District

Manager Stewart and Regional Personnel Manager Fike to

Defendant’s district offices in Schaumburg, Illinois, and

was given an oral warning regarding his apparent failure to

comply with the company’s directives about improving his

management style.

On February 9, 1989, Plaintiff mailed a letter to

Defendant’s Senior Regional Personnel Relations Attorney

Alan Butler. In that letter, he denied any misconduct on his

part.

On March 21, 1989, District Manager Stewart and Plaintiff

had a “clear the air” meeting where they discussed issues

relating to Defendant’s December, 1988 disciplinary

actions against Plaintiff as mentioned in paragraphs 5 and

6 above. As a result of that “clear the air” meeting,

10.

11.

20a

Appendix C

Defendant discharged a second-level manager at the Sioux

City store, with whom Plaintiff had prior conflicts. That

second-level manager was never replaced. During this

time, Defendant suggested that Plaintiff attend

management training courses to help him improve his

managerial style, but Plaintiff declined to do so.

In June, 1989, Plaintiff was diagnosed with colon cancer

and soon thereafter underwent surgery for that cancer.

Plaintiff recuperated through Augusi, 1989 without

working, and received full pay while he recovered.

Plaintiff’s medical bills were paid by Defendant’s health

insurance plan.

During his recovery, Plaintiff kept District Manager

Stewart apprised of his medical condition.

Plaintiff, on November 22, 1989, received a favorable

performance evaluation anda salary increase. Plaintiff also

received an “A” rating as a store manager which made him

eligible for either a promotion or a transfer to a larger store.

This meant that he was considered to be one of J.C.

Penney’s most qualified store managers.

12. Through the next several months, Plaintiff continued

13.

working, though he was still receiving treatment for his

cancer surgery. On April 10, 1990, he received another

salary increase and heard nothing about any personnel

problems that he might have been having at the Sioux City

store.

From May 30, 1990 through June 10, 1990, Plaintiff was

hospitalized for the repair of five abdominal hernias, for

14,

15.

16.

17.

21a

Appendix C

gastrointestinal problems, and for complications arising

from those surgeries. Plaintiff’s medical bills were paid by

the Defendant’s health insurance carrier and Plaintiff

continued to receive full pay while he recuperated.

During his recovery from the summer 1989 and 1990

surgeries, Plaintiff was never pressured to return to work.

When he did return, he didn’t ask for any accommodations

(i.e. alight work load, etc.) to aid in his recovery, though he

could work at his own pace since his schedule only required

40 hours of work per week, without specific hours.

Plaintiff returned to work full-time prior to the end of July,

1990.

In July and August, 1990, Defendant’s corporate

headquarters received two anonymous letters from

Plaintiff’s Sioux City subordinates — one dated July 10,

1990 and one dated July 29, 1990. These letters referred to

low morale among employees in the Sioux City store and to

other personnel-related issues which were blamed on

Plaintiff.

As a result of those letters, Defendant’s Senior Regional

Personne! Relations Attorney Butler, along with District

Personnel Manager Tom Wright, conducted a “personnel

audit” at the Sioux City store on August 14 and 15, 1990.

During the “audit,” Plaintiff was asked to leave the store so

that the employees could speak frankly and without fear of

reprisal. Plaintiff was instructed not to interrogate any

associates about what they said during the audit, nor to

retaliate against anyone who might have met with Mr.

Butler and Mr. Wright.

18.

19.

21.

22.

22a

Appendix C

The personnel audit, although conducted as 2n “open

forum” for discussions about any problems at the store, was

really being held to determine whether the allegations in the

anonymous letters were true, and to determine the actual

severity of the allegations contained in those letters.

The audit was conducted as a one-on-one discussion

between store employees and either Mr. Butler or Mr.

Wright. Each man conducted audits of different

departments. During these discussions, Wright and Butler

asked general questions, such as: how ai chings going at

this store? Do you have any concerns you would like to

discuss?

In all, approximately 20 current employees were

interviewed, as were five former employees. Seven of the

20 were current management employees. Each of the

employees was told that if Plaintiff interrogated them, or in

any way tried to find out from them what had been discussed

at the audit, they were to report this to the district manager

at once.

As a result of these discussions, on August 31, 1990,

District Manager Stewart and Regional Personnel Manager

Fike administered a “written corrective interview” to

Plaintiff. This type of interview is a disciplinary action,

more severe than a verbal warning, and is generally

considered to be one of the last steps that Defendant takes

before terminating an empioyee.

At the “written corrective interview,” Plaintiff received a

proposed script. This script was Defendant’s attempt at a

speech to be read by Plaintiff to his subordinates, which

cL inciehaale Sh a eee ee nae

23.

24.

23a

Appendix C

outlined what their complaints were and which emphasized

his willingness to make appropriate changes and to be more

sensitive to their feelings. Plaintiff was told that if he

wanted to remain in the Sioux City store, he would have to

make a speech to his subordinates which contained the

basic overall meaning and content of the proposed script.

Plaintiff was also told that he was not to discuss the

existence of the script with anyone, but that he could make

pre-approved revisions to the script.

Plaintiff never raised his medical condition as an excuse or

justification for his personnel problems, and Defendants

never suggested that his medical condition had anything to

do with their decision to have him read the speech.

After receiving the script and before making any changes to

it, Plaintiff discussed its contents with two of his

management associates — Dennis Bostow and Tom

Chrystal. This conversation was directly contrary to the

orders Plaintiff had been given by his superiors, Mr. Fike

and Mr. Stewart. Plaintiff met with Mr. Bostow and Mr.

Chrystal because during his medical absences those two

men had been responsible for personnel matters at the Sioux

City store, and he felt that they could enlighten himas tothe

personne] matters listed in the script. He also met with them

to determine if the script accurately depicted other

employees’ perceptions of him. During the conversation,

Piaintiff told Mr. Bostow and Mr. Chrystal that he did not

believe the allegations contained in the prepared speech

were true. After being asked by Plaintiff for his opinion, Mr.

Chrystal advised Plaintiff not to read the script if Plaintiff

did not believe that its contents were correct.

25.

26.

27.

28.

24a

Appendix C

In accordance with the order he had received at the

personnel audit, Mr. Bostow informed District Manager

Stewart that Plaintiff had interrogated him about matters

relating to the audit when Plaintiff discussed with him the

proposed script.

After being contacted by Mr. Bostow, District Manager

Stewart, accompanied by Regional Personnel Manager

Fike, met with Plaintiff on September 12, 1990 and

informed him that his discussion with Mr. Bostow and Mr.

Chrystal was a breach of the order they had given him not to

contact anyone concerning the “audit,” and that because he

had done so he had destroyed his chance to remain as the

Sioux City store manager. They were especially upset that

during his discussions with Mr. Bostow and Mr. Chrystal —

two high level managers — he had intimated that the

allegations contained in the proposed script were not

accurate. Mr. Stewart and Mr. Bostow felt that such a

contention destroyed any chance that a later speech made to

the “management team” would be credible. Plaintiff was

informed that the consequence of his discussing the speech

was a reassignment to a smaller store.

On September 14, 1990, Plaintiff was informed that he had

been transferred from Sioux City to Defendant’s relatively

smaller Bismarck, North Dakota store. However,

Plaintiff’s compensation was not lowered. He was

informed that his annual salary would remain at

approximately $92,270.

On October 1, 1990, Plaintiff reported to work at the

Bismarck store. On October 2, 1990, Plaintiff met with

District Manager John Henderson, who gave Plaintiff an

29.

30.

31.

32.

25a

Appendix C

orientation tour of the store. During the tour, District

Manager Henderson informed Plaintiff that he was aware of

Plaintiff’s past problems in Sioux City, but he assured

Plaintiff that he would be given a “clean slate” in Bismarck.

At trial, District Manager Henderson testified that he did

not mean to suggest that Plaintiff's problems in Sioux City

would be erased from his employment files, but that by

telling Plaintiff he would be given aclean slate, Henderson

meant to encourage Plaintiff to try his best to work

cooperatively and constructively with his new

subordinates, and to make Plaintiff feel welcome.

Plaintiff had a different interpretation of what was meant by

“clean slate.” He thought that his prior problems in Sioux

City would be erased from his employment files, and that

those problems would have no bearing on any decisions

relating to his employment with Defendant from that day

forward.

On December 21, 1990 an anonymous letter critical of

Plaintiff's management style at Bismarck was received by

District Manager Henderson.

On January 9, 1990, District Manager Henderson came to

Bismarck to meet with Plaintiff regarding that letter.

Although Plaintiff felt that he could refute the allegations of

that letter, Mr. Henderson did not give Plaintiff achance to

respond. Mr. Henderson left Bismarck without telling the

Plaintiff how he would deal with the situation.

On January 17, 1991, Plaintiff filed a charge of age and

disability discrimination with the Iowa Civil Rights

Commission against Defendant, alleging that Defendant's

33.

34.

35.

36.

26a

Appendix C

treatment of him during his tenure as Sioux City store

manager amounted to unlawful discrimination against him.

On January 18, 1991, Plaintiff met with District Manager

Henderson in Minneapolis, MN. At that meeting, Plaintiff

was given a “final corrective interview,” which is the most

severe disciplinary action the company gives prior to

termination. During the interview, Plaintiff was told that

the anonymous letter received by Mr. Henderson contained

the same types of allegations as those which led to his

transfer from Sioux City, and that if Defendant received

further, similar complaints, Plaintiff would be terminated.

Plaintiff was not given a chance to explain his side of the

story at this meeting, nor was he given an opportunity to

refute the allegations in the letter.

During that January 18, 1991 meeting in Minneapolis,

Plaintiff informed District Manager Henderson that he had

previously filed a charge of discrimination against

Defendant in Iowa. Plaintiff never used his medical

condition as an excuse or justification for any of the

allegations contained in the anonymous letter.

On January 18, 1991, Defendant explained to Plaintiff its

newly-enacted management incentive pay plan which

included a stock option plan whereby store managers could

purchase stock at a fixed option rate which could be

exercised for several years.

By late January, 1991, Defendant began compiling

information in order to address the Iowa Civil Rights

Commission’s inquiries about Plaintiff’s discrimination

charge. One portion of the required information was a

Poe eee ees

a a et ie a ak all a Gee on ee

PME SOR cn HPS

37.

38.

39.

40.

41.

27a

Appendix C

personnel file which was kept in Plaintiff’s locked desk in

his Bismarck office.

On February 1, 1991, on a day when the Plaintiff was not

working, Regional Personnel Attorney Alan Butler ordered

that a Bismarck J.C. Penney employee break open

Plaintiff’s desk and retrieve the personnel file.

On February 4, 1991, Plaintiff held a meeting with the

store’s managers at which he outlined their annual

Management By Objective (or “MBO”) goals.

On February 8, 1991, District Manager Henderson received

another letter from Bismarck store employees complaining

about Plaintiff’s management style. This letter, dated

February 6, 1991, (Exhibit M-1) was signed by each of the

Bismarck stcre’s department managers.

On February 15, 1991, District Manager Henderson and

Regional Personnel Manager Fike terminated Plaintiff.

After they announced that he would be terminated, they

began toread the February 6 complaint letter to him, but he

left the office before the reading could be completed. At no

time prior to the announcement of his termination was

Plaintiff ever given an opportunity to defend himself

against the allegations in the February 6 letter.

During that meeting, Plaintiff never suggested that his

medical condition may have affected his job performance.

At the same time, District Manager Henderson and

Regional Personnel Manager Fike never suggested that

their decision to terminate him had anything to do with his

medical condition.

42.

43.

44.

45.

46.

47.

28a

Appendix C

Atthe time of his termination, Plaintiff’s cancer treatment

was completed. No further surgeries were scheduled.

The jury verdict in this case indicated that Plaintiff’s age

was a determining factor in Defendant’s decision to

discharge Plaintiff. The jury concluded, as well, that

Plaintiff’s filing of a charge of discrimination with the lowa

Civil Rights Commission was a determining factor in the

termination decision. Moreover, the verdict made clear that

the jury believed that Defendant’s actions against Plaintiff

were willful.

Plaintiff, while employed by Defendant, participated in

several ERISA-covered plans: a pension plan; a medical/

dental insurance plan: a “savings, profit sharing and stock

purchase” plan; along-term disability insurance plan; and

a life insurance plan.

After termination, Plaintiff remained vested in the

Defendant’s pension plan. He receives slightly in excess of

$1,000 per month from that plan and will continue to

receive that payment as long as either he or his wife is alive.

Termination did not affect Plaintiff’s medical or dental

insurance coverage, though he pays aslightly higher fee for

the services. For insurance purposes, he is not treated as a

terminated employee. He is treated as a retired employee,

paying about $8 per month more than active employees.

Termination did not affect Plaintiff’s interest in the savings

plan. He remains vested. Although he is not eligible for

future participation in the plan, the amounts which he added

to it remain his.

NI RO Tica hie Bite sar

48.

49.

50.

51.

52.

29a

Appendix C

Because the Social Security Administration determined

that Plaintiff has been “disabled” since his last day of

employment with Defendant, Plaintiff is receiving long-

term disability from Defendant's plan and will continue to

receive it so long as he is eligible. This is true, despite the

fact that former employees of Defendant are notentitled to

long-term disability insurance benefits.

Termination did not affect Plaintiff’s eligibility for life

insurance benefits. Again, he is being treated as a “retiree”

for life insurance purposes. And, like a “retiree,” he

receives less life insurance coverage than an active

employee. He has not needed to spend any money

purchasing substitute coverage on the open market.

Plaintiff is also considered a “retiree” for purposes of

receiving a J.C. Penney Employee Discount on items he

purchases from any of the Defendant’s stores.

After termination, Plaintiff made no realistic attempt to

obtain alternative employment. His only act in that regard

was to fill out an application with the Job Services

Corporation of Iowa. He never applied to work for any of

the Defendant's competitors. However, given his age and

his medical condition, he was and is not likely to find

comparable employment at a comparable wage with

comparable benefits, and he has, therefore, done as muchas

can be expected to mitigate his damages.

As mentioned, after Plaintiff was terminated, he applied to

the Social Security Administration (SSA) for disability

benefits. After reviewing Plaintiff’s application, the SSA

determined that Plaintiff was total] y disabled as of his last

30a

Appendix C

day of his employment with Defendant. In making its

determination that Plaintiff was totally disabled, the SSA

relied on assertions to that effect made by Plaintiff and

others speaking on Plaintiff’s behalf.

B. CONCLUSIONS OF LAW

1. Plaintiff's ERISA discrimination claim (Third Cause of

Action)

Itis uncontested and this Court is persuaded that Defendant,

J.C. Penney Company, was an “employer” under ERISA, that

Defendant offered to its employees an ERISA “employee benefit

plan,” and that Plaintiff, Dale Nelson, was an ERISAemployee.

Under Section 510 of ERISA, 29 U.S.C. Section 1140, itis

unlawful “for any person to discharge, fine, suspend, expel,

discipline, or discriminate against a participant or beneficiary

for exercising any right to which he is entitled under the

provisions of anemployee benefit plan. . . or for the purpose of

interfering with the attainment of any right to which such

participant may become entitled under the plan. . .” (emphasis

added). Unlawful ERISA discrimination is shown either by

direct proof (see Carter v. City of Miami, 870 F.2d 578 (11th Cir.

1989)) or by showing a scheme of discrimination through the use

of circumstantial evidence as established in McDonnell Douglas

Corp. v. Green, 411 U.S. 792 (1973) and restated in Texas Dep’t

of Community Affairs v. Burdine, 450 U.S. 248, 253-54 (1981).

Evidence is direct when it is sufficient to prove

discrimination without inference or presumption. Carter, 870

F.2d, at 581-82. Throughout the trial in the case at bar, Plaintiff

conceded that he had no direct evidence of discrimination.

LER OE LENAARN GS HTN iN Ie SEIN NE TES HOLT PS AN DE FE Moe Ak mee

3la

Appendix C

Therefore, this Court must determine whether circumstantial

evidence presented at trial established discrimination by the

Defendant against the Plaintiff, in violation of ERISA.

Under McDonnell Douglas, in order to show circumstantial

evidence of unlawful ERISA discrimination, the Plaintiff must

first demonstrate by the preponderance of the evidence a prima

facie case of discrimination. Burdine, 450 U.S. at 252-53. See

also, Clark v. Coats & Clark Inc.,990 F.2d 1217, 1223 (11th Cir.

1993). In the context of an ERISA Section 510 claim (aclaim that

there was a violation of 29 U.S.C. Section 1140) alleging

unlawful discharge, a plaintiff makes a prima facie case of

discrimination by showing that he (1) is entitled to ERISA’s

protection, (2) was qualified for the position, and (3) was

discharged under circumstances that give rise to an inference of

discrimination. Clark, 990 F.2d, at 1223, quoting Turner v.

Sherina-Plough Corp., 901 F.2d 335, 347 (3d Cir. 1990).

Anemployee is entitled to ERISA’s protection when he is a

participant in a plan covered by ERISA. Since the Court has

already concluded that the Defendant’s plan was covered by

ERISA and that the Plaintiff was anemployee of the Defendant’s

who participated in that plan, the Court is persuaded that the first

Clark prong was met. Regarding the second prong of the Clark

analysis, the Court concludes that the Defendant was qualified

for the position he held prior to his termination. Even though he

was sick and ornery, he knew how torun a store and had done so

well for years. The Court notes, particularly, that Defendant

consistently gave the Plaintiff nearly perfect ratings regarding

his performance as a manager, particularly in the areas of store

productivity and reduction of “shrinkage.” The Court also notes

that these same ratings were given to Plaintiff prior to or

contemporaneous with the complaint letters received by

Defendant’s upper-management.

32a

Appendix C

In regard to the third Clark prong, whether or not Plaintiff

was discharged under circumstances that give rise to an

inference of discrimination, this element can only be satisfied in

favor of Plaintiff if he introduced evidence that would lead the

Court to conclude that interference with ERISA rights was a

motivating factor in his termination. Turner, 901 F.2d, at 348.

Such a showing requires more than merely introducing evidence

that, as aresult of the termination, Plaintiff was deprived of the

opportunity to accrue more benefits. Clark, 990 F.2d, at 1224

(quoting Clark v. Resistoflex Co., 854 F.2d 762, 771 (Sth Cir.

1988)). Instead, an employee (Plaintiff) must show that his

termination resulted in a substantial savings to Defendant in

terms of benefit expenses. Dister v. Continental Group Inc., 859

F.2d 1108, 1115 (2d Cir. 1988). This was not shown.

Because some loss of benefits is an inevitable consequence

of nearly every employment termination, an essential element in

an ERISA Section 510 case is “to show that an employer was at

least in part motivated by the specific intent to engage in activity

prohibited” by the statute. Dister, 859 F.2d, at 1111.“NoERISA

cause of action lies where the loss of pension benefits was a mere

consequence of, but not a motivating factor behind, a

termination of employment.” Titsch v. Reliance Group Inc., 548

F. Supp. 983, 985 (S.D. N.Y. 1982). Hence, a critical issue

regarding Plaintiff's ERISA claim is whether Plaintiff has

demonstrated that Defendant terminated him with the specific

intention of depriving him of his ERISA benefits.

On page 7, paragraph 27 of his proposed findings of fact and

conclusions of law, Plaintiff makes the blanket statement that his

“eligibility and entitlement to benefits under an employee

welfare benefit plan was. . .adetermining factor in defendant’s

decision to discharge plaintiff.” For support, on the top of page

12 of his proposal, the Plaintiff states that Defendant

33a

Appendix C

unlawfully discharged Nelson in violation of

ERISA since it discharged Nelson in order to

save medical costs on the health and welfare

benefit plan, and also to save costs on

Nelson’s pension plan, in light of the fact that

he was a thirty-year employee, and the new

management incentive plan stood to greatly

increase the pension benefits a senior

manager like Nelson would accrue.

The Court finds no substantial support in the record for this

assertion. The Court acknowledges that the Defendant

introduced its new management incentive plan on January 18,

1991 — less than a month before terminating the Plaintiff on

February 15, 1991. However, the proximity between the

introduction of the plan and the Plaintiff’s termination is not

enough to carry the ERISA claim.

The problem in this case is that Plaintiff failed to produce

any substantial evidence which showed that Defendant intended

to deprive him of his ERISA benefits. In fact, Plaintiff is still

vested in his ERISA-covered plans and he continues to receive

the same benefits as those received by active employees.

Nothing has changed. The plan paid for Plaintiff's insurance

benefits before his discharge and it continues to pay those

benefits today. The contention that the Plaintiff lost stock

options is not accurate. Such options are a component of

Plaintiff’s compensation, but are not part of an ERISAplan. See,

29 C.F.R. Sections 2510.3-2(c) and 2510.3-1(b). Similarly,

Plaintiff’s references to other potential increases in

compensation via salary and/or bonus (which Defendant refers

to as “incentive”) compensation, likewise is not an ERISA plan,

but a payroll practice. /d. It is true that if the discharge was

34a

Appendix C

upheld, the Plaintiff would lose pension benefits resulting from

the lost opportunity to accrue a few additional years of service.

The Plaintiff’s evidence in this regard was not persuasive enough

to carry the day.

Based on the foregoing, the Court is persuaded that Plaintiff

has failed to meet the third Clark prong. The Court is therefore

persuaded that Plaintiff has failed to establish a prima facie case

of ERISA discrimination. The Plaintiff's ERISA claim,

therefore, is denied.

Moreover, before filing suit under the ERISA statute,

employees are to first exhaust any internal administrative

remedies under the plan. Anderson v. Alpha Portland Industries,

727 F.2d 177, 180 (8th Cir. 1984). Plaintiff did not exhaust — nor

does he assert that he even tried to exhaust — the administrative

remedies under ERISA. Therefore, Plaintiff’s ERISA claim is

barred.

2. Plaintiff's lowa Civil Rights Act (ICRA) Disability

Discrimination Claim (Fourth Cause of Action)

It is not contested and this Court is persuaded that the

Defendant is an “employer” within the meaning of lowa Code

Section 216(7), and that Plaintiff was an employee of

Defendant’s at all times relevant to this action.

Under Iowa Code Section 216.6(1)(a), it is an unfair

employment practice for an employer to discharge any employee

on the basis of a disability. Under lowa Code Section 216.2(5),

a “disability” is defined, in relevant part, as “the physical or

mental condition of a person which constitutes a substantial

handicap.” The terms “physical and mental condition” and

35a

Appendix C

“substantial handicap” are not defined in the Act. However,

under Sommers v. lowa Civil Rights Comm'n, 337 N.W.2d 470,

476-77 (lowa 1983), a physical or mental impairment is a

substantial handicap if it has “an inherent propensity to limit

(one or more of the individual’s) major life activities.”

Therefore, the Court is confronted with two issues: whether

the Plaintiff was “disabled” and, if so, whether the Defendant

discriminated against the Plaintiff because of that disability. In

making a legal determination on the issue of disability, the Court

is mindful of the fact that Plaintiff underwent five surgeries

during his final years as a manager for the Defendant’s Sioux

City and Bismarck, N.D. stores. Based on Plaintiff’s testimony

at trial, although he was given paid recuperation time and was not

pressured to return to work at any time, he was nonetheless in

great pain when working, and was not as objective or patient with

others as he apparently was prior to those surgeries.

In addition, the Social Security Administration determined

that Plaintiff is totally disabled and has been so-disabled since

the day he was terminated by the Defendant. In light of the fact

that Plaintiff was working under the residual effects of several

surgeries and surgery-related complications which befell him in

a relatively short span of time, as well as the Social Security

Administration’s total disability determination, this Court is

persuaded that Plaintiff has made out a prima facie case of

disability for the period relevant to this dispute.

The second part of the analysis is whether the Plaintiff was

discriminated against by the Defendant on the basis of that

disability. Under lowa law, in order for an employee to establish

a claim of disability discrimination, he must establish the

following prima facie elements:

36a

Appendix C

a. that he was disabled;

b. that he was qualified for the job from which he was

discharged;

c. that despite his qualifications, he was terminated; and

d. that after his termination, the employer hired a person

not in the employee’s protected class, or retained

persons with comparable or lesser qualifications.

Tobaugh v. Hy-Vee Stores. Inc., 392 N.W.2d 154, 156 (lowa

1986). See also, McDonnell Douglas, 411 U.S., at 802 (1972).

As mentioned above, the Court is persuaded that Plaintiff has

shown that he was both disabled and qualified. Therefore,

Plaintiff has established the first two Tobaugh/McDonnel)

Douglas factors’.

i. The Jury in this case did not actually make a finding of age

discrimination on the basis of each individual Tobaugh/McDonnell Douglas

factor. instead, the Jury followed Final Jury Instruction No. 9, which was a

modified version of Eighth Circuit Model Civil Jury Instruction 5.91 which

stated that

Your verdict must be for plaintiff on plaintiff's age

discrimination or retaliation claim if he has proved by

the preponderance of the evidence that plaintiff's age

or filing of a charge of discrimination was a

determining factor in defendant's decision.

The Committee Comments to Instruction 5.91 state that “It is unnecessary and

inadvisable to instruct the jury regarding the three-step analysis of McDonnell-

Douglas “citations omitted). Instead, the submission to the jury should focus on

(Cont'd)

37a

Appendix C

In regard to the third Tobaugh factor, this Court is persuaded

that despite his qualifications as aJ.C. Penney manager, Plaintiff

was discharged. As stated earlier in this Order, the Court is

particularly persuaded by the fact that throughout his career and

up to and contemporaneous with the complaint letters received

by his subordinates, Plaintiff consistently received nearly

perfect ratings from the Defendant regarding his performance as

a manager.

The testimony of the Plaintiff and the Defendant's district-

level management indicated that these ratings primarily

emphasized areas such as store productivity and reduction of

“shrinkage” (theft), and de-emphasized a manager’s “people

skills.” Nonetheless, the Defendant’s representatives testified

that promotions to larger stores and increases in pay were based

in large part on those ratings reports.

The Plaintiff’s ratings did not decrease until he was moved

to Bismarck, and this rating reduction had more to do with his

status as a “new” store manager than his ability to manage aJ.C.

Penney store’. Hence, the Court is persuaded that by issuing high

ratings along with corresponding incentive pay raises to the

Plaintiff, the Defendant conceded that Plaintiff was not only

(Cont'd)

the ultimate issue of whether intentional discrimination was a determining

factor in the defendant's employment decision.” This Court therefore assumes

that the Jury ruled favorably on these two factors.

2. Testimony at trial indicated that when a manager is “reassigned,”

irrespective of whether it is the result of a promotion to a larger store or a

demotion to a smaller store, a consequence is that the manager's rating is

lowered because it is not possible to rate the manager’ s performance at that store

until he has had the opportunity to manage it.

| |

38a

Appendix C

qualified to do the job, but was an outstanding store manager in

spite of some perceived deficiencies in his ability to get along

with his subordinates. The Court is accordingly persuaded that

Plaintiff was terminated despite his qualifications as a store

manager.

Regarding the fourth Tobaugh factor, whether Plaintiff was

replaced by members of his protected class or whether Plaintiff

was replaced by individuals of lesser experience or competence,

this factor was not addressed by either party during the trial.

Hence, the Court cannot decide, as a matter of law, whether

Plaintiff's replacements were either disabled or less competent

or experienced. Although some evidence suggested that the

Bismarck, N.D. replacement was in his early 40s when Plaintiff

was terminated, no evidence was presented concerning that

individual’s physical condition, experience or competence.

Similarly, no evidence was offered in regard to the Sioux City

replacement’s physical condition, age, experience or

competence. The Court cannot rule as a matter of law that the

Defendant replaced the Plaintiff with individuals who were

either not disabled or who were less qualified than the Plaintiff.

Therefore, the Court is persuaded that the Plaintiff did not

make out a prima facie case of disability discrimination under

the ICRA since he cannot establish all four of the elements

required by Tobaugh. As a result, as to this disability

discrimination claim, the Court finds for the Defendant.

3. Piaintiff’s Damages

Mindful of the Jury verdict, which it upholds, the Court is

persuaded that the Plaintiff is entitled to damages, costs and

attorney’s fees on his claim of age discrimination.

39a

Appendix C

Since the Jury found that unlawful age discrimination

occurred in this case, the Court’s job is to fashion a remedy that

will make the Plaintiff “whole” for injuries he has suffered due

to this unlawful discrimination. Albermarle Paper Co. v. Moody,

422 U.S. 405, 418 (1975); Geller v. Markham, 635 F.2d 1027,

1036 (2d Cir. 1980), cert. denied, 451 U.S. 945 (1981):

Dickerson v. Deluxe Check Printers. Inc., 703 F.2d 276, 279-80

(8th Cir. 1983).

a. Liquidated damages

“Section 7(b) of the ADEA, 29 U.S.C. Sec. 626(b), provides

for liquidated damages where a finding of willful violation is

made.” Castle v. Sangamo Weston. Inc., 837 F.2d 1550, 1561

(11thcir. 1988). Because the jury found that Defendant willfully

violated the Age Discrimination in Employment Act, the Court

will determine the amount of liquidated damages to be awarded

to Plaintiff. “Liquidated damages are defined in the Fair Labor

Standards Act, 29 U.S.C. Section 216(b), incorporated by

reference inthe ADEA, 29 U.S.C. Section 626(b), as an amount

equal to “minimum unpaid wages or . . . unpaid overtime

compensation.” Bruno v. W.B. Saunders Co., 882 F.2d 160, 772

(3d Cir. 1989).

Liquidated damages are not permissible to double front-

pay, though they are permissible to double back pay. Bruno, 882

F.2d, at 771-72. The standard for awarding liquidated damages

in an amount which would double a Plaintiff's back pay award is

whether “the employer knew or showed reckless disregard for

the matter of whether its conduct was prohibited by the ADEA.”

Trans World Airlines. Inc. v. Thurston, 469 U.S. 111, 128 (1984).

The jury in this case was so instructed in Jury Instruction #9A,

which states the following:

40a

Appendix C

If you find that the defendant

discriminated against the plaintiff on the

basis of age or retaliated against him for

filing a civil rights complaint, then you

should further decide whether defendant's

violation of the age discrimination statute

was willful. If you find that defendant’s

violation of the ADEA was willful, the court

will award plaintiff additional money

damages.

A violation is willful if the defendant

either knew or showed reckless disregard for

the matter of whether its conduct was

prohibited by the federal law under which the

plaintiff sues. A violation is willful if it is

done deliberately and intentionally and not

by accident, inadvertence or ordinary

negligence.

Since willful discrimination is seldom

admitted, you may consider any statements

made, any acts done or omitted and all of the

facts or circumstances disclosed by the

evidence to show whether defendant

willfully violated the Age Discrimination in

Employment Act.

Ascan be seen in paragraph one, the Court told the Jury that

if the violation was willful, the Court “will” award the Plaintiff

‘additional money. The Jury Question relating to this was as

follows:

4la

Appendix C

3. Was the violation or violations willful as

explained in Instruction No. 9A?

Yes X_ a i

The Jurors put an “X” on the “Yes” side. This Court is

persuaded that itcan under some circumstances deny the request

to double the back pay award’, but doesn’t find any mitigating

reason to do so. The will of the Jury will not be disturbed. The

award of back pay will be doubled.

b. Front pay

Plaintiff ’s Exhibit 27 is acalculation of benefits prepared by

Plaintiffs expert Randall Kramer which includes liquidated

damages. Mr. Kramer’s benefits calculation is based on the

assumption that, had he not been terminated, Plaintiff would

have worked to age 65. The evidence showed that most J.C.

Penney managers stopped working at age 60. This was because

their benefits were tailored to maximize at that age. Defendant

could not under the law force its managers out at age 60. The

3. The districi court’s discretion in deciding whether to award liquidated

damages is limited to situations in which the employer “can show good faith and

reasonable grounds for believing it was not in violation of the. .. ADEA.” Trans

World Airlines, 469 U.S., at 128, n. 22. See also, Berndt v. Kaiser-Aluminum &

Chemical Sales. Inc., 604 F. Supp. 962, 967 (E.D. Pa. 1985) (Liquidated

damages doubling back pay inappropriate where evidence insufficient to

demonstrate defendant's knowledge that it was violating the federal law, or that

it intented to do so, or that it operated under reckless disregard for the federal

law); Heiar v. Crawford Cty, Wis., 746 F.2d 1190, 1201 (7th Cir. 1984)

(Liquidated damages which would double back pay inappropriate where the

defendant county could not be expected to know that it was violating the ADEA

given confusion in the circuits as to whether the ADEA was unconstitutional).

42a

Appendix C

Plaintiff said that he intended to continue working beyond age

60. This Court cannot conclude that he would have quit at age 60.

However, based upon the health of the Plaintiff and the fact that

Defendant’s retirement plan is geared to award the greatest

benefits at age 60, and for those benefits to decrease thereafter,

the Court is persuaded that the Plaintiff would have retired at age

63.

Plaintiff’s Exhibit 1 is the J.C. Penney Benefits Statement

for 1990. It indicates that retirement at age 60 would result in

Plaintiff’s target income from all sources being 52.1% of

average earnings, in addition to the value of personal accounts

and savings plans. Itis reasonable to conclude that, working until

age 63, Plaintiff would expect to retire at 53.5% of his average

earnings.

Since Plaintiff obtained a jury verdict on his age

discrimination and retaliation claims, he is entitled to front pay

to the age of 63, computed in accordance with calculations set

forth in Plaintiff’s Exhibit 27. Doyne v. Union Electric, 953 F.2d

447, 450 (8th Cir. 1990); Acrey v. American Sheep Ind. Ass'n.,

981 F.2d 1569, 1576 (10th Cir. 1992). Front pay is especially

appropriate where the Plaintiff has no reasonable prospect of

obtaining comparable employment. Buckley v. Reynolds Metals,

Co., 690 F. Supp. 211, 21415 (S.D. N.Y. 1988); Proctor v.

Consolidated Freightways Corp., 1991 U.S. App. LEXIS 3090

(9th Cir. 1991). As discussed more fully in subsection “d” of this

Order, the Court is persuaded that at the time he was terminated,

Plaintiff had no reasonable prospect of obtaining comparable

employment. Therefore, front pay is appropriate in this case.

The Plaintiff’s birthday was January 14, 1936. He was age

55 when he was terminated in February, 1991. Hence, he will turn

43a

Appendix C

63 in 1999. Lines 5 through 9 on Exhibit 27 represent Plaintiff's

salary plus stock options, multiplied by the 10 year treasury note

rate of six percent annually from August, 1994 through August,

1999. One quarter of line four reflects one-quarter of the salary

plus stock options which will commence on August 1, 1994, four

and a half months from the date of this Order. This is front-pay.

The other three quarters of line 4 is back pay from August 1, 1993

to the date of this Order. Thus, the calculation from Exhibit 27 is

as follows:

Exhibit 27 Present Value Totals:

Line 5: 8/1/95 $109,574

Line 6: 8/1/96 $109,623

Line 7: 8/1/97 $109,561

Line 8: 8/1/98 $109,536

Line 9: 8/1/99 $109,580

Total of Lines Sthrough9: $547,874.00

One quarter of Line 4 of

Exhibit 27: $27,381.75

($109,527 .4=27,381.75)

Gross Front Pay Award: $575,255.75

44a

Appendix C

Thus, Plaintiff’s gross front-pay award is $575,255.75. Based

upon the cross-examination testimony of Mr. Kramer regarding

the levelling off of annual salary increases for J.C. Penney

managers as they reached acertain salary threshold, the Court is

persuaded that this gross pay figure should be reduced by 1 %, or

$5,752.55. Therefore, the Court finds that Plaintiff is entitled to

a net front-pay award of $569,503.20.

c. Back pay

Similarly, the first four lines of Plaintiff’s Exhibit 27

represent the annual pay Plaintiff would have received — plus

eight months’ pay — had he not been terminated by Defendant.

This is commonly referred to as “back pay.” Dating back from the

date of this Order, the total back pay to be awarded Plaintiff,

minus the extra four months’ pay from April, 1994 to August,

1994, is as follows:

Exhibit 21] Present Values:

Line |: 8/1/91 $50,241

Line 2: 8/1/92 $109,573

Line 3: 8/1/93 $109,573

Total of Lines 1] through 3: $269,387

Three Quarters of Line 4 from

Exhibit 27: $82,145.25

($109,527 + 75 = $82,145.25)

45a

Appendix C

Back Pay Award: $351,532.25

X 2.00

Total Back Pay Award: $703,064.50

d. Mitigation of damages

In order to minimize damages owed to unlawfully-

terminated employees, the employer has the burden of proof to

show that the plaintiff employee failed to exercise reasonable

diligence in seeking other employment in an attempt at

mitigating his damages. Spulak v. K-Mart Corp., 894 F.2d 1150,

1158 (10th Cir. 1990). As stated above, the Court is persuaded

that Plaintiff did what he could to mitigate his damages. It is true

that the Plaintiff did not go out and get a job selling cars.

However, this Court is persuaded that a 30-year manager for a

national department store chain should not have to go out and sell _

cars or pursue any other significantly lower-paying career for

which he is not qualified in order to mitigate damages. The Court

is persuaded that at age 55 Plaintiff had no chance of becoming

a manager for a J.C. Penney competitor such as Sears or

Montgomery Ward for the same or similar wages. Therefore, the

Court is persuaded that Defendant did not meet its burden of

showing that Plaintiff failed to mitigate his damages. Buckley,

691 F. Supp., at 214.

The evidence at trial indicated that Plaintiff enjoys the

benefit of the Defendant’s associate discount privilege, which

should continue. Term life insurance benefits have been restored

to Plaintiff since he has been placed on disability status, and

should continue at active employee rates until Plaintiff reaches

age 63, and thereafter at retired employee rates. Similarly,

Plaintiff’s medical and dental plans should continue at active

employee rates until he reaches age 63, and thereafter as aretired

46a

Appendix C

employee. To the extent that any of the fringe benefits mentioned

thus far are normally made available to an employee’s surviving

spouse, they should continue to be made available to Plaintiff's

spouse in the event of his demise.

Plaintiff has been receiving retirement benefits of $1,021

per month since he was discharged. According to Defendant, the

continued receipt of these benefits, along with liquidated

damages, would be a windfall. Thus, Defendant seeks to have

this Court offset its damages by the amount of retirement

benefits Plaintiff has been and will continue to receive. The

Court is aware that courts in different circuits have reached

different results. For example, in Meschino v. I.T.T. Corn., 661 F.

Supp. 254(S.D.N.Y. 1987), the district court ruled that pension

benefits should be deducted from damages awards because “(b)y

receiving benefits which he would not have received had he not

been terminated, to the [Plaintiff] was receiving compensation

for his termination. There is no reason to require [Defendant] to

pay twice for discriminatingagainst [Plaintiff]... ” Meschino,

661 F. Supp., at 259.

However, this Circuit does not recognize the collection of

pension benefits as compensation from the employer. Instead,

this Circuit recognizes pension benefits as received from a

collateral source, so that a Plaintiff’s receipt of both pension

benefits and damages for unlawful termination is not recognized

as a “windfall” which would effectively double Plaintiff's

damages. Doyne v. Union Elec. Co., 953 F.2d 447, 451-52 (8th

Cir. 1992). “Pension benefits may be viewed as earned by the

claimants, and therefore not paid by the employer at all.”

E.E.0.C. v. O’ Grady, 857 F.2d 383, 391 (7th Cir. 1988)

(emphasis in original). In unlawful termination cases, the

Defendant cannot, under Eighth Circuit precedent, offset the

47a

Appendix C

Plaintiff's damages with the amount of pension benefits Plaintiff

has received. This is so on the ground that in these cases, the

Plaintiffs are effectively forced to exhaust their plan benefits

since, but-for the unlawful termination, they would have

received regular wages. Blake v. J.C. Penney, 894 F.2d 274, 282

(8th Cir. 1990), citing Dickerson, supra, 703 F.2d, 279-80. This

Court is persuaded that the amount of pension benefits which

Plaintiff has received shall not be used to offset Defendant's

damages obligation.

Shortly before trial, Plaintiff began receiving other benefits

from the Defendant. These benefits included a lump-sum amount

of long-term disability benefits averaging $3,002 per month,

which was retroactive to September 1, 1991. These benefits were

awarded under the terms of Defendant's long-term disability and

supplemental long-term disability plans, both of which were in

effect at the time of Plaintiff's termination and both of which

were a part of the J.C. Penney benefit package which Plaintiff

participated in (Plaintiff's Exhibit 1).

Unlike the pension benefits, these benefits would be

awarded to Plaintiff whether he was unlawfully terminated or

not. However, they would not be awarded on top of the Plaintiff's

ordinary salary, which the back pay award is designed to

compensate for. The testimony of Mr. Brewer was that the long-

term disability was paid approximately three-fourths by the

employer and one-fourth by the employee. Accordingly,

Defendant should receive a credit of $2,250 per month (three-

fourths of $3,000) for any long-term disability and supplemental

long-term disability benefits which it provided to the Plaintiff as

part of its benefits package. BeShears v. Asbill, 930 F.2d 1348,

1355,n. 11 (8th Cir. 1991).

48a

Appendix C

Since receiving the favorable ruling from the Secretary of

Health and Human Services on his total disability claim, Plaintiff

has also been receiving Social Security disability benefits which

were made retroactive to the day he was discharged. Defendant

seeks to offset its damages obligation to Plaintiff with the

amount of those benefits. Plaintiff cites Maxfield v. Sinclair Int'l,

766 F.2d 788 (3d Cir. 1985) for the proposition that if this Court

were to off-set Plaintiff's damages with his Social Security

disability benefits, the Court would effectively encourage

employers to dismiss disabled employees.

Maxfield states that the overall justification for not

providing a set-off against Social Security benefits is

“compensating victims in a make whole fashion.” Maxfield, 766

F.2d, at 794. The Court finds Maxfield’s underlying rationale is

less persuasive than the ruling articulated by the Massachusetts

District Court in Crosby v. New England Tel. & Tel., Co., 624 F.

Supp. 487 (D. Mass. 1985). Citing Maxfield, the Crosby Court

concluded that when considering whether to offset Social

Security benefits from a damages award, a district court should

take into consideration whether the liquidated damages would

make Plaintiff whole again if the disability benefits were not

included. This Court notes that Plaintiff only sought Social

Security disability benefits after he was terminated. Since back

and front pay damages will effectively provide Plaintiff with the

same income he would have received had he remained employed

with Defendant until age 63, the Court is persuaded that those

damage awards make him “whole.” The Court is persuaded that

the addition of the Social Security awards Plaintiff has already

received and continues to receive would make him more than

whole, in violation not only of the rational rule of Crosby, but

also of the underlying rationale of Maxfield. Therefore, all such

payments heretofore received from Social Security Disability

shall be used to reduce the Defendant’s damage obligation.

49a

Appendix C

e. Prejudgment Interest

“The ADEA does not indicate whether or not prejudgment

interest may be awarded under the statute. The ADEA, however,

is incorporated into the Fair Labor Standards Act (FLSA), 29

U.S.C. Sections 201, et. seq. Itis settled that the FLSA does not

permit successful plaintiffs to obtain prejudgment interest in

addition to liquidated damages because that would enable them

to obtain double recovery.” Gibson v. Mohawk Rubber Co. , 695

F.2d 1093, 1102 (8th Cir. 1982), citing Brooklyn Savings Bank v.

O'Neil, 234 U.S. 697, 715-16 (1945) and Masters v. Maryland

Mat. Co., 493 F.2d 1329, 1334 (4th Cir. 1974). See also, McCann

v. Texas City Refining, Inc., 984 F.2d 667, 673 (Sth Cir. 1993).

Therefore, the Court shall not award pre-judgment interest on

Plaintiff's liquidated damages.

Plaintiff has not sought reinstatement with the Defendant

and the Court is persuaded that reinstatement would not be

appropriate. Therefore, the Court is not considering it in making

its ruling.

ITIS THEREFORE ORDERED that the Plaintiff, Dale E.

Nelson, based on the jury verdict in his favor on the age

discrimination claim, shall have a front-pay award against the

Defendant, J.C. Penney Company, in the amount of $569,503.20

and a back pay award of $703,064.50 (with no pre-judgment

interest) less a set-off for Social Security disability payments

Plaintiff has already received, and less $2,250 per month for

Plaintiff’s long-term disability benefits already received, plus

interest as provided by law, reasonable attorney fees, and the

costs of this action.

50a

Appendix C

IT IS FURTHER ORDERED that post-judgment interest

shall be added to both the front and back pay awards as provided

by law.

ITIS FURTHER ORDERED that the Plaintiff shall cease

receiving pension benefits between the period from the date of

this Order until he reaches age 63 and will resume from that time

until the time of the Plaintiff’s death.

IT IS FURTHER ORDERED that within 20 days of the

date of this Order, the Plaintiff shall file an accounting setting out

all Social Security Disability payments that he has received since

the date of the award of benefits from the Secretary of Health and

Human Services and the Defendants shall file an accounting

setting out all disability payments they have paid to the Plaintiff

up to the date of this Order.

IT IS FURTHER ORDERED that the Court will set a

hearing on Plaintiff’s claim for attorney fees and costs at the

Court’s earliest convenience.

ITIS FURTHER ORDERED that the Plaintiff shall within

20 days of the date of this Order update the benefits he has

received each year as shown by Exhibits U-3 and R-3A as they

pertain to his projected Savings plan. The Defendant shall

cooperate with the Plaintiff in calculating this figure.

ITIS FURTHER ORDERED that the Plaintiff will receive

$8 for each month since his termination for an insurance

differential.

Judgment shall be entered after the computation of interest,

costs and attorney fees.

Sla

Appendix C

April 26, 1994

s/ Donald E. O’Brien

Donald E. O’ Brien, Senior Judge

UNITED STATES DISTRICT COURT

Copy mailed by regular mail April 26, 1994 to:

Emmanuel Bikakis; 507 7th Street; Suite 304; Sioux City, IA

51101

James Zalewski; PO Box 81607; Lincoln, NE 68501-1607

P Keven Connelly; Michael Sheehan; 350 N LaSalle Street;

Suite 750; Chicago, IL 606

Douglas Phillips; PO Box 327; Sioux City,1A 51102

s/ illegible

Deputy Clerk

52a

APPENDIX D — RELEVANT STATUTES

Age Discrimination in Employment Act

29 U.S.C. § 623

§ 623. Prohibition of age discrimination

(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, conditions, or

privileges of employment, because of such individual’s age;

(2) tolimit, segregate, or classify his employees in any

way which would 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;

(3) toreduce the wage rate of any employee in order to

comply with this chapter.

(b) Employment agency practices

It shall be unlawful for an employment agency to fail or

refuse to refer for employment, or otherwise to discriminate

against, any individual because of such individual’s age, or to

classify or to refer foremployment any individual on the basis of

such individual’s age.

53a

Appendix D

It shall be unlawful for a labor organization —

(1) to exclude or to expel from its membership, or

otherwise to discriminate against, any individual because of

his age;

(2) tolimit, segregate, or classify its membership, orto

classify or fail or refuse to refer for employment any

individual, in any way which would deprive or tend to

deprive any individual of employment opportunities, or

would limit such employment opportunities or otherwise

adversely affect his status as an employee or as an applicant

for employment, because of such individual's age;

(3) to cause or attempt to cause an employer to

discriminate against an individual in violation of this

section.

(d) Opposition to unlawful practices; participation in

investigations, proceedings, or litigation

It shall be unlawful for an employer to discriminate against

any of his employees or applicants for employment, for an

employment agency to discriminate against any individual, or

for a labor organization to discriminate against any member

thereof or applicant for membership, because such individual,

member or applicant for membership has opposed any practice

made unlawful by this section, or because such individual,

member or applicant for membership has made a charge,

testified, assisted, or participated in any manner in an

investigation, proceeding, or litigation under this chapter.

54a

Appendix D

(e) Printing or publication of notice or advertisement

indicating preference, limitations, etc.

It shall be unlawful for an employer, labor organization, or

employment agency to print or publish, or cause to be printed or

published, any notice or advertisement relating toemployment

by such an employer or membership in or any classification or

referral for employment by sucha labor organization, orrelating

to any classification or referral for employment by such an

employment agency, indicating any preference, limitation,

specification, or discrimination, based on age.

(f) Lawful practice; age an occupational qualification;

other reasonable factors; laws of foreign workplace;

seniority system; employee benefit plans; discharge or

discipline for good cause

It shall not be unlawful for an employer, employment

agency, or labor organization —

(1) to take any action otherwise prohibited under

subsections (a), (b), (c), or (e) of this section where age isa

bona fide occupational qualification reasonably necessary

to the normal operation of the particular business, or where

the differentiation is based on reasonable factors other than

age, or where such practices involve an employee in a

workplace in a foreign country, and compliance with such

subsections would cause such employer, or a corporation

controlled by such employer, to violate the laws of the

country in which such workplace is located;

(2) to take any action otherwise prohibited under

subsection (a), (b), (c), or (e) of this section —

55a

Appendix D

(A) to observe the terms of a bona fide seniority

system that is not intended to evade the purposes of this

chapter, except that no such seniority system shall

require or permit the involuntary retirement of any

individual specified by section 631(a) of this title

because of the age of such individual; or

(B) to observe the terms of a bona fide employee

benefit plan —

(i) where, foreach benefit or benefit package,

the actual amount of payment made or cost

incurred on behalf of an older worker is no less than

that made or incurred on behalf of a younger

worker, as permissible under section 1625.10, title

29, Code of Federal Regulations (as in effect on

June 22, 1989); or

(ii) that is a voluntary early retirement

incentive plan consistent with the relevant purpose

or purposes of this chapter.

Notwithstanding clause (i) or (ii) of subparagraph (B),

no such employee benefit plan or voluntary early

retirement incentive plan shall excuse the failure to hire

any individual, and no such employee benefit plan shall

require or permit the involuntary retirement of any

individual specified by section 631(a) of this title,

because of the age of such individual. An employer,

employment agency, or labor organization acting under

subparagraph (A), or under clause (i) or (ii) of

subparagraph (B), shall have the burden of proving that

such actions are lawful in any civil enforcement

56a

Appendix D

proceeding brought under this chapter; or

(3) to discharge or otherwise discipline an individual

for good cause.

(g) Repealed. Pub.L. 101-239, Title VI, § 6202(b)(3)(C)(i),

Dec. 19, 1989, 103 Stat. 2233.

(h) Practices of foreign corporations controlled by

American employers; foreign persons not controlled by

American employers; factors determining control

(1) If an employer controls a corporation whose place of

incorporation is in a foreign country, any practice by such

corporation prohibited under this section shall be presumed to be

such practice by such employer.

(2) The prohibitions of this section shall not apply where

the employer is a foreign person not controlled by an American

employer.

(3) Forthe purpose of this subsection the determination of

whether an employer controls a corporation shall be based upon

the —

(A) interrelation of operations,

(B) common management,

(D) common ownership or financial control, of the

employer and the corporation.

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Appendix D

(i) Employee pension benefit plans; cessation or reduction

of benefit accrual or of allocation to employee account;

distribution of benefits after attainment of normal

retirement age; compliance; highly compensated

employees

(1) Exceptas otherwise provided in this subsection, it shall

be unlawful for an employer, an employment agency, a labor

organization, or any combination thereof to establish or maintain

an employee pension benefit plan which requires or permits —

(A) inthe case of a defined benefit plan, the cessation

of anemployee’s benefit accrual, or the reduction of the rate

of an employee’s benefit accrual, because of age, or

(B) in the case of a defined contribution plan, the

cessation of allocations to an employee’s account, or the

reduction of the rate at which amounts are allocated to an

employee’s account, because of age.

(2) Nothing in this section shall be construed to prohibit an

employer, employment agency, or labor organization from

observing any provision of anemployee pension benefit plan to

the extent that such provision imposes (without regard to age) a

limitation on the amount of benefits that the plan provides or a

limitation on the number of years of service or years of

participation which are taken into account for purposes of

determining benefit accrual under the plan.

(3) In the case of any employee who, as of the end of any

plan year under a defined benefit plan, has attained normal

retirement age under such plan —

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Appendix D

(A) if distribution of benefits under such plan with

respect to such employee has commenced as of the end of

such plan year with respect to such employee has

commenced as of the end of such plan year, then any

requirement of this subsection for continued accrual of

benefits under such plan with respect to such employee

during such plan year shall be treated as satisfied to the

extent of the actuarial equivalent of in-service distribution

of benefits, and

(B) if distribution of benefits under such plan with

respect to such employee has not commenced as of the end

of such year in accordance with section 1056(a)(3) of this

title and section 401 (a)(14)(C) of Title 26, and the payment

of benefits under such plan with respect to such employee is

not suspended during such plan year pursuant to section

1053(a)(3)(B) of this title or section 411(a)(3)(B) of Title

26, then any requirement of this subsection for continued

accrual of benefits under such plan with respect to such

employee during such plan year shall be treated as satisfied

to the extent of any adjustment in the benefit payable under

the plan during such plan year attributable to the delay in the

distribution of benefits after the attainment of normal

retirement age.

The provisions of this paragraph shall apply in accordance with

regulations of the Secretary of the Treasury. Such regulations

shall provide for the application of the preceding provisions of

this paragraph to all employee pension benefit plans subject to

this subsection and may provide for the application of such

provisions, in the case of any such employee, with respect to any

period of time within a plan year.

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Appendix D

(4) Compliance with the requirements of this subsection

with respect to an employee pension benefit plan shall constitute

compliance with the requirements of this section relating to

benefit accrual under such plan.

(5) Paragraph (1) shall not apply with respect to any

employee who is a highly compensated employee (within the

meaning of section 41 4(q) of Title 26) to the extent provided in

regulations prescribed by the Secretary of the Treasury for

purposes of precluding discrimination in favor of highly

compensated employees within the meaning of subchapter D of

chapter | of Title 26.

(6) A plan shall not be treated as failing to meet the

requirements of paragraph (1) solely because the subsidized

portion of any early retirement benefit is disregarded in

determining benefit accruals.

(7) any regulations prescribed by the Secretary of the

Treasury pursuant to clause (v) of section 41 1(b)(1)(H) of Title

26 and subparagraphs (C) and (D) of section 411(b)(2) of Title 26

shall apply with respect to the requirements of this subsection in

the same manner and to the same extent as such regulations apply

with respect to the requirements of such sections 411(b)(1)(H)

and 411(b)(2) of Title 26.

(8) A plan shall not be treated as failing to meet the

requirements of this section solely because such plan provides a

normal retirement age described in section 1002(24)(B) of this

title and section 411(a)(8)(B) of Title 26.

(9) For purposes of this subsection —

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Appendix D

(A) The terms “employee pension benefit plan”,

“defined benefit plan”, “defined cont:ibution plan”, and

“normal retirement age” have the meanings provided such

terms in section 1002 of this title.

(B) The term “compensation” has the meaning

provided by section 414(s) of Title 26.

(j) Repealed. Pub.L. 99-592, § 3(b), Oct. 31, 1986, 100 Stat.

3342

(k) Date of adoption of system or plan

A seniority system or employee benefit plan shall comply

with this chapter regardless of the date of adoption of such

system or plan.

(1) Minimum age requirements; early retirement benefits

Notwithstanding clause (i) or (ii) of subsection (f)(2)(B) of

this section —

(1) Itshall not be a violation of subsection (a), (b), (c),

or (e) of this section solely because —

(A) anemployee pension benefit plan (as defined

in section 1002(2) of this title) provides for the

attainment of a minimum age as a condition of

eligibility for normal or early retirement benefits; or

(B) adefined benefit plan (as defined in section

1002(35) of this title) provides for —

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Appendix D

(i) payments that constitute the subsidized

portion of an early retirement benefit; or

(ii) social security supplements for plan

participants that commence before the age and

terminate at the age (specified by the plan) when

participants are eligible to receive reduced or

unreduced old-age insurance benefits under title II

of the Social Security Act (42 U.S.C. 401 et seq.),

and that do not exceed such old-age insurance

benefits.

(2)(A) Itshall not be a violation of subsection (a), (b),

(c), or (e) of this section solely because following a

contingent event unrelated to age —

(i) the value of any retiree health benefits received

by an individual eligible for an immediate pension;

(ii) the value of any additional pension benefits

that are made available solely as a result of the

contingent event unrelated to age and following which

the individual is eligible for not less than an immediate

and unreduced pension; or

(iii) the values described in both clauses (i) and

(ii);

are deducted from severance pay made available as aresult

of the contingent event unrelated to age.

(B) Foranindividual who receives immediate pension

benefits that are actuarially reduced under subparagraph

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Appendix D

(A)(i), the amount of the deduction available pursuant to

subparagraph (A)(i) shall be reduced by the same

percentage as the reduction in the pension benefits.

shall include that portion of supplemental unemployment

compensation benefits (as described in section 501(c)(17)

of Title 26) that —

(i) constitutes additional benefits of up to 52

weeks;

(ii) has the primary purpose and effect of

continuing benefits until an individual becomes

eligible for an immediate and unreduced pension; and

(iii) is discontinued once the individual becomes

eligible for an immediate and unreduced pension.

(D) For purposes of this paragraph and solely in order

to make the deduction authorized under this paragraph, the

term “retiree health benefits” means benefits provided

pursuant toa group health plan covering retirees, for which

(determined as of the contingent event unrelated to age) —

(i) the package of benefits provided by the

employer for the retirees who are below age 65 is at least

comparable to benefits provided under title X VIII of the

Social Security Act (42 U.S.C. 1395 et seq.);

(ii) the packize of benefits provided by the

employer for the retirees who are age 65 and above is at

least comparable to that offered under a plan that

=>.

63a

Appendix D

provides a benefit package with one-fourth the value of

benefits provided under title XVIII of such Act; or

(iii) the package of benefits provided by the

employer is as described in clauses (i) and (ii).

(E)(i) If the obligation of the employer to provide

retiree health benefits is of limited duration, the value for

each individual shall be calculated at a rate of $3,000 per

year for benefit years before age 65, and $750 per year for

benefit years beginning at age 65 and above.

(ii) Ifthe obligation of the employer to provide retiree

health benefits is of unlimited duration, the value for each

individual shall be calculated at a rate of $48,000 for

individuals below age 65, an $24,000 for individuals age 65

and above.

(iii) The values described in clauses (i) and (ii) shall be

calculated based on the age of the individual as of the date of

the contingent event unrelated to age. The values are

effective on October 16, 1990, and shall be adjusted on an

annual basis, with respect to acontingent event that occurs

subsequent to the first year after October 16, 1990, based on

the medical component of the Consumer Price Index for all-

urban consumers published by the Department of Labor.

(iv) If an individual is required to pay a premium for

retiree health benefits, the value calculated pursuant to this

subparagraph shall be reduced by whatever percentage of

the overall premium the individual is required to pay.

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Appendix D

(F) If an employer that has implemented a deduction

pursuant to subparagraph (A) fails to fulfill the obligation

described in subparagraph (E), any aggrieved individual

may bring an action for specific performance of the

obligation described in subparagraph (E). The relief shall be

in addition to any other remedies provided under Federal or

State law.

(3) Itshall not bea violation of subsection (a), (b), (c),

or (e) of this section solely because an employer provides a

bona fide employee benefit plan or plans under which long-

term disability benefits received by an individual are

reduced by any pension benefits (other than those

attributable to employee contributions) —

(A) paid to the individual that the individual

voluntarily elects to receive; or

(B) for which an individual who has attained the

later of age 62 or normal retirement age is eligible.

29 U.S.C. § 626

§ 626. Recordkeeping, investigation, and enforcement

(a) Attendance of witnesses; investigations, inspections,

records, and homework regulations

The Equal Employment Opportunity Commission shall

have the power to make investigations and require the keeping of

records necessary or appropriate for the administration of this

chapter in accordance with the powers and procedures provided

in sections 209 and 211 of this title.

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Appendix D

(b) Enforcement; prohibition of age discrimination under

fair labor standards; unpaid minimum wages and

unpaid overtime compensation; liquidated damages;

judicial relief; conciliation, conference, and persuasion

The provisions of this chapter shall be enforced in

accordance with the powers, remedies, and procedures provided

i sections 211(b), 216 (except for subsection (a) thereof), and

217 of this title, and subsection (c) of this section. Any act

prohibited under section 623 of this title shall be deemed to be a

prohibited act under section 215 of this title. Amounts owing to

a person as a result of a violation of this chapter shall be deemed

to be unpaid minimum wages or unpaid overtime compensation

for purposes of sections 216 and 217 of this title: Provided, That

liquidated damages shall be payable only in cases of willful

violations of this chapter. In any action brought to enforce this

chapter the court shall have jurisdiction to grant such legal or

equitable relief as may be appropriate to effectuate the purposes

of this chapter, including without limitation 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

Equal Employment Opportunity Commission shall attempt to

eliminate the dis. iminatory practice or practice alleged, and to

effect voluntary vompliance with the requirements of this

chapter through informal methods of conciliation, conference,

and persuasion.

66a

Appendix D

relief; termination of individual action upon

commencement of action by Commission; jury trial

(1) Any person aygrieved may bring a civil action in any

court of competent jurisdiction for such legal or equitable relief

as will effectuate the purposes of this chapter; Provided, That the

right of any person to bring such action shall terminate upon the

commencement of an action by the Equal Employment

Opportunity Commission to enforce the right of such employee

under this chapter.

(2) Inanaction brought under paragraph (1), a person shall

be entitled to a trial by jury of any issue of fact in any such action

for recovery of amounts owing as a result of a violation of this

chapter, regardless of whether equitable relief is sought by any

party in such action.

(d) Filing of charge with Commission; timeliness;

conciliation, conference, and persuasion

No civil action may be commenced by an individual under

this section until 60 days after a charge alleging unlawful

discrimination has been filed with the Equal Employment

Opportunity Commission. Such acharge shall be filed —

(1) within 180 days after the alleged unlewful practice

occurred; or

(2) in a case to which section 633(b) of this title applies,

within 300 days after the alleged unlawful practice occurred, or

within 30 days after receipt by the individual of notice of

termination of proceedings under State law, whichever is earlier.

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Appendix D

Upon receiving such a charge, the Commission shall promptly

notify all persons named in such charge as prospective

defendants in the action and shall promptly seek to eliminate any

alleged unlawful practice by informal methods of conciliation,

conference, and persuasion.

(e) Reliance on administrative rulings; notice of dismissal

or termination; civil action upon receipt of notice

Section 259 of this title shall apply to actions under this

chapter.

If a charge filed with the Commission under this chapter is

dismissed or the proceedings of the Commission are otherwise

terminated by the Commission, the Commission shall notify the

person aggrieved. A civil action may be brought under this

section by person defined in section 630(a) of this title against

the respondent named in the charge within 90 days after the date

of the receipt of such notice.

(f) Waiver

(1) An individual may not waive any right or claim under

this chapter unless the waiver is knowing and voluntary. Except

as provided in paragraph (2), waiver may not be considered

knowing -nd voluntary unless at a minimum —

(4) the waiver is part of an agreement between the

indiv:. ual and the employer that is written in a manner

calcu:ated to be understood by such individual, or by the

average individual eligible to participate;

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Appendix D

(B) the waiver specifically refers to rights or claims

arising under this chapter;

may arise after the date the waiver is executed;

(D) the individual waives rights or claims only in

exchange for consideration in addition to anything of value

to which the individual already is entitled;

(E) the individual is advised in writing toconsult with

an attorney prior to executing the agreement;

(F)(i) the individual is givena period of at least 21 days

within which to consider the agreement; or

(ii) if a waiver is requested in connection with an exit

incentive or other employment termination program offered

to a group or class of employees, the individual is given a

perio of #: least 45 days within which to consider the

agreement;

(G) the agreement provides that fora period of at least

7 days following the execution of such agreement, the

individual may revoke the agreement, and the agreement

shall not become effective or enforceable until the

revocation period has expired;

(H) if a waiver is requested in connection with an exit

incentive or other employment termination program offered

to a group or class of employees, the employer (at the

commencement of the period specified in subparagraph (F))

informs the individual in writing in a manner calculated to

69a

Appendix D

be understood by “12 average individual eligisle to

participate, as to —

(i) any class, unit, or group of individuals covered

by such program, any eligibility factors for such

program; and any time limits applicable to such

program; and

(ii) the job titles and ages of all individuals eligible

or selected for the program, and the ages of all

individvals in the same job classification or

organizational unit who are not eligible or selected for

the program.

(2) Awaiver in settlement of a charge filed with the Equal

Employment Opportunity Commission, or an action filed in

court by the individual or the individual’s representative,

alleging age discrimination of a kind prohibited under section

623 or 633a of this title may not be considered knowing and

voluntary unless at a minimum —

(A) subparagre=hs (A) through (E) of paragraph (1)

have been met; and

(B) the individual is given areasonable period of time

within which to consider the settlement agreement.

(3) In any dispute that may arise over whether any of the

requirements, conditions, and circumstances set forth in

subparagraph (A), (B), (C), (D), (E), (F), (G), or (H) of paragraph

(1), or subparagraph (A) or (B) of paragraph (2), have been met,

the party asserting the validity of a waiver shall have the burden

of proving in acourt of competent jurisdiction that a waiver was

knowing and voluntary pursuant to paragraph (1) or (2).

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Appendix D

(4) No waiver agreement may affect the Commission’s

rights and responsibilities to enforce this chapter. No waiver may

be used to justify interfering with the protected right of an

employee to file a charge or participate in an investigation or

proceeding conducted by the Commission.

29 U.S.C. § 631

§ 631. Age limits

(a) Individuals at least 40 years of age

The prohibitions in this chapter shall be limited to

individuals who are at leas: 40 years of age.

(b) Employees or applicants for employment in Federal

Government

In the case of any personnel action affecting employees or

applicants foremployment which is subject to the provisions of

section 633a of this title, the prohibitions established in section

633a of this title shall be limited to individuals who are at least 40

years of age.

(1) Nothing in this chapter shall be construed to prohibit

compulsory retirement of any employee who has attained 65

years of age and who, for the 2-year period immediately before

retirement, is employed in a bona fide executive or a high

policymaking position, if such employee is entitled to an

immediate nonforfeitable annual retirement benefit from a

pension, profit-sharing, savings, or deferred compensation plan,

Tla

Appendix D

or any combination of such plans, of the employer of such

employee, which equals, in the aggregate, at least $44,000.

(2) Inapplying the retirement benefit test of paragraph (1)

of this subsection, if any such retirement benefit is in a form other

than a straight life annuity (with no ancillary benefits), or if

employees contribute to any such plan or make rollover

contributions, such beuefit shall be adjusted in accordance with

regulations prescribed by the Equal Employment Opportunity

Commission, after consultation with the Secretary of the

Treasury, so that the benefit is the equivalent of a straight life

annuity (with no ancillary benefits) under a plan to which

employees do not contribute and under which no rollover

contributions are made.

(d) Repealed. Pub.L. 99-592, § 6(b), Oct. 31, 1986, 100 Stat.

3344

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.