Opinion
Cause No. IP99-0863-C-H/G
September 21, 2001
ENTRY ON DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
Plaintiff Patricia E. Genung has sued her employer for age discrimination in violation of the Age Discrimination in Employment Act of 1967 ("ADEA"), 29 U.S.C. § 621 et seq. Defendant Northwest Radiology Networks, P.C. provides diagnostic services throughout Indiana and operates several independent imaging centers in Marion and Hamilton Counties. Genung has worked for Northwest or its predecessors for more than 30 years. In 1997, Northwest cut Genung's salary by two-thirds and her hours by half. She contends that this adverse action was a result of age discrimination. Northwest contends that it simply determined as part of a restructuring effort that it made more sense to have Genung do only human resources work rather than a mixture of tasks, and that she could handle the human resources work as a part-time employee.
Northwest has moved for summary judgment. As explained below, genuine issues of material fact preclude summary judgment. The issues will need to be decided by a jury.
Summary Judgment Standard
The purpose of summary judgment is to "pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). Under Rule 56(c) of the Federal Rules of Civil Procedure, the court should grant summary judgment if and only if there is no genuine issue as to any material fact, and the moving parties are entitled to judgment as a matter of law. See Fed.R.Civ.P.56(c); Pafford v. Herman, 148 F.3d 658, 665 (7th Cir. 1998).
On a motion for summary judgment, the moving party must first come forward and identify those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, which the party believes demonstrate the absence of a genuine issue of material fact. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Where the moving party has met the threshold burden of supporting the motion, the opposing party must "set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e).
In determining whether a genuine issue of material fact exists, the court must construe all facts in the light most favorable to and draw all reasonable inferences in favor of the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986); Haefling v. United Parcel Service, Inc., 169 F.3d 494, 497 (7th Cir. 1999). The proper inquiry is whether a rational trier of fact could reasonably find for the party opposing the motion with respect to the particular issue. See, e.g., Jordan v. Summers, 205 F.3d 337, 342 (7th Cir. 2000). When facts are addressed in this entry, they are addressed in light of the applicable standard on summary judgment, without attempting to evaluate the credibility of conflicting evidence or choosing between different reasonable inferences from the evidence. See Thorn v. Sundstrand Aerospace Corp., 207 F.3d 383, 388 (7th Cir. 2000) (reversing summary judgment for employer where parties presented conflicting evidence on reasons for plaintiff's lay-off).
Undisputed Facts
Patricia Genung began working for Northwest in 1968 as a receptionist. In 1972 she was promoted to the position of business manager, which she held until at least 1988. The business manager was considered the most important non-physician position in the company at the time. Her title from 1988 to 1995 is unclear, but in 1995 she was promoted to Chief Operations Officer.
During the majority of Genung's tenure at Northwest, Dr. Daniel Elliott was her immediate supervisor. In the mid-1990s Northwest began the process of merging with another radiology practice called Irvington. (The principal hospitals where each group practiced were then negotiating a merger.) The merged radiology group was to be called Premier Radiology. During this period Genung was responsible for operational issues and human resources. Genung's counterpart at Irvington was acting as chief financial officer for the merging practices. During the merger attempt between Northwest and Irvington Genung's salary was increased to account for new responsibilities she was given.
The hospitals called off their merger plans, and Northwest and Irvington did the same in 1996. At that time Genung's salary was reduced because she would have fewer duties. Soon after, Northwest restructured its organization with new board members and leadership. Dr. Homer Beltz became Board President and CEO, and Northwest hired Robert Gallup as a new Chief Administrative Officer. In May 1997 Gallup asked all of the managers at Northwest, including Genung, to provide him with descriptions of their jobs outlining their current duties. Gallup used these descriptions to determine the distribution of jobs and responsibilities within the company.
Gallup decided that some of Genung's duties — which included negotiating insurance, supervising couriers, putting together the employee newsletter, and property management — should be redistributed to other employees. These jobs were distributed among several existing employees who were all ten or more years younger that Genung — ranging in age from 24 to 43. In some cases, in order to accommodate the increased workload, assistants were hired for these employees. Genung's yearly salary was cut from $60,000 to $20,000, and her hours were cut from 40 to 20 per week. Because she became a part-time employee, she also lost her benefits. Genung was the only employee of Northwest who experienced any adverse employment action as a result of Gallup's restructuring.
Gallup testified that when he talked with Dr. Beltz, the new CEO and president of the Northwest board, about Genung's situation, he said "if it was me, I would like to retire." Gallup Dep. 117. There is also evidence that, when Gallup was recommending to the board that Genung's hours and salary be cut, he said that he knew Genung and her husband were downsizing their home, that her husband was going to be working less and retiring, and that he thought that this reduction "might be something that [Genung] would be interested in doing, working fewer hours." Genung Dep. 29 (describing Beltz's conversation with her). Dr. Beltz testified that he believed the times had passed Genung by.
Northwest describes this evidence as hearsay. It is not. The out-of-court 1 statements by both Dr. Beltz and Gallup are admissible as party admissions under Fed.R.Evid. 801(d)(2).
This is a permissible reading of the following deposition testimony:
Q Do you think that the times had kind of just passed by Dr. Elliott and Mrs. Genung?
A Everything had changed. We needed to upgrade our whole organization, just like the computers have changed, so I think the way things were done in the past was not acceptable, so the answer is yes.
Beltz Dep. 33.
During Genung's tenure at Northwest she never received a bad work evaluation. Both Dr. Beltz and Dr. Elliott believed that Genung had helped with the company's expansion while she was the business manager. Her yearly reviews were always positive. Nothing negative was ever placed in her record.
After being told that her hours and salary were going to be reduced, Genung wrote Dr. Beltz and board member Dr. Bartley and proposed that she work 30 hours per week so that she could keep her benefits. Gallup rejected her proposal.
Discussion
A person alleging age discrimination under the ADEA can prove her case in two principal ways. First, she can present direct evidence that the employment decision at issue was motivated by an impermissible purpose. Second, she can offer indirect proof of discrimination by introducing evidence adequate to create an inference that the adverse employment decision was based on an illegal criterion. See, e.g., Robin v. Espo Engineering Corp., 200 F.3d 1081, 1088-89 (7th Cir. 2000).
The two methods are not mutually exclusive. Cases and theories do not always fit neatly in one category or the other. A plaintiff may also rely on what the Seventh Circuit has described as a "mosaic" of circumstantial evidence — such as comments by supervisors, suspicious timing, inconsistent explanations or behavior, and so on — that can support a reasonable inference of discrimination. See, e.g., Venters v. City of Delphi, 123 F.3d 956, 973 (7th Cir. 1997) (reversing summary judgment for employer; "remarks and other evidence that reflect a propensity by the decision maker to evaluate employees based on illegal criteria will suffice as direct evidence of discrimination even if the evidence stops short of a virtual admission of illegality"); Troupe v. May Department Stores Co., 20 F.3d 734, 736 (7th Cir. 1994) (circumstantial evidence — like suspicious timing, ambiguous statements oral or written, behavior — is admissible to provide a basis for drawing an inference of intentional discrimination).
Under the indirect, burden-shifting approach announced in McDonnell Douglas Corp. v. Green, the plaintiff must first establish a prima facie case of age discrimination by producing evidence that shows: (1) she is a member of a protected class; (2) she performed her job satisfactorily; (3) she suffered an adverse employment action; and (4) the defendant treated similarly situated employees outside of her protected class more favorably. McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802 (1973) (Title VII case); see also Reeves v. Sanderson Plumbing Products Inc., 530 U.S. 133, 142 (2000) (assuming that burden-shifting method from McDonnell Douglas applies under ADEA); Gordon v. United Airlines, Inc., 246 F.3d 878, 885 (7th Cir. 2001) (one of many Seventh Circuit cases applying method under ADEA).
Northwest concedes for purposes of summary judgment that Genung can establish a prima facie case. She was 56 at the time of her demotion, so she was a member of the protected class. Her job performance was fine. The reduction in pay and hours obviously was an adverse employment action. The fourth element is satisfied because Genung's duties were distributed among substantially younger employees. See, e.g., Miller v. Borden, Inc., 168 F.3d 308, 313-14 (7th Cir. 1999).
The prima facie case is intended to identify circumstances in which a jury could infer that an employment decision, if not explained, was the product of illegal discrimination. However, if the employer can then articulate a legitimate, non-discriminatory reason for its decision, the burden shifts back to the plaintiff to show that the employer's stated reason is a pretext, a false explanation for the decision. See, e.g., Stockett v. Muncie Indiana Transit System, 221 F.3d 997, 1001 (7th Cir. 2000). If the explanation is false, such falsity can ordinarily support (though it does not require) an inference of discrimination. Reeves, 530 U.S. at 147; Gordon, 246 F.3d at 891.
Defendant Northwest denies that its treatment of Genung was based on her age. It asserts instead that its new leadership decided to restructure the business and that the new chief administrative officer concluded the business would work better if the human resources work, which Genung had been doing, were separated from other unrelated tasks, which Genung had also been doing. Redistributing those tasks required only a part-time position for human resources, so Genung's position was cut to a part-time post. Northwest claims that these decisions were made to increase the efficiency of Northwest, and without regard for Genung's age.
To avoid summary judgment, Genung must come forward with evidence that would allow a reasonable jury to find that the Northwest's explanation is false. Wilson v. AM General Corp., 167 F.3d 1114, 1120 (7th Cir. 1999). In making this determination, the court must take care not to assume the role of the proverbial "super-personnel department" trying to ensure that an employer's personnel policies are prudent and wise. E.g., O'Regan v. Arbitration Forums, Inc., 246 F.3d 975, 984 (7th Cir. 2001); Malacara v. City of Madison, 224 F.3d 727, 731 (7th Cir. 2000) (employer may take negative employment actions for a good reason, a bad reason, a reason based on erroneous facts, or for no reason at all, as long as its action is not for a discriminatory reason).
It is not enough for Genung to show that Gallup's efficiency analysis was poorly done. See Malacara, 224 F.3d at 731. Honest errors do not show pretext. But if an employer's proffered reason lacks some minimal level of factual support, the absence of support can allow a jury to find the reason is simply false. See, e.g., Gordon, 246 F.3d at 889. The parties have briefed in great detail the evidence as to whether Gallup's judgment about a more efficient structure was sufficiently justified or was so lacking in basis that a jury could find it was simply false.
The court need not decide the pretext question on that evidence alone, however. As the Seventh Circuit explained in reversing a summary judgment in Huff v. UARCO, Inc., 122 F.3d 374, 380, 385 (7th Cir. 1997), remarks by decision-makers that would not be sufficient by themselves as direct evidence of discrimination can be used with other evidence, as part of an indirect case, to prove discrimination. Accord, Pafford v. Herman, 148 F.3d 658, 666 (7th Cir. 1998) (plaintiff's "circumstantial evidence was not presented in vain, however, for it can be used at the pretext stage"); Futrell v. J.I. Case, 38 F.3d 342, 347 (7th Cir. 1994) (reversing grant of employer's motion for judgment as matter of law).
In this case, Genung also relies on the (disputed) evidence that Gallup thought she would like to have more time at home with her retiring husband, and his admitted statement that if Gallup were in Genung's shoes, he would just retire. Genung also relies on later testimony from Dr. Beltz — the CEO and president of the board of directors — that he believed the times had passed Genung by. Dr. Beltz offered this view after having talked with Genung, by his own account, for a total of no more than an hour in 24 years. Under the reasoning of Huff, Pafford, and Futrell, such remarks made by people involved in the employment decision may, in combination with other evidence, support a finding of pretext. (Although the testimony from Dr. Beltz came well after the decision, it was the testimony of one decision-maker in his deposition in this case relating to his opinion at the time of the action, and it certainly may be considered.)
Defendant Northwest has offered explanations for its decision to cut Genung's salary and hours and for the statements upon which she relies to show age discrimination. In deciding a motion for summary judgment, the court must consider that evidence through a narrow lens, giving Genung the benefit of all conflicts in the evidence and the benefit of any choice among competing (but reasonable) inferences from the evidence.
Viewed through that lens, the evidence shows an older worker who was doing good work and who was the only employee to suffer any adverse action as part of the corporate restructuring. The asserted basis for the decision to cut her pay and hours has little objective support, and one could fairly interpret Gallup's and Dr. Beltz's comments as reflecting the view that times had passed Genung by, so that she should simply retire. From the sum total of evidence, a jury could reasonably find that defendant's proffered explanation for cutting Genung's salary and hours was a false pretext to mask age discrimination.
Conclusion
Defendant's motion for summary judgment is hereby denied. The court will hold a scheduling conference on Thursday, October 18, 2001, at 4:30 p.m. in Room 330, U.S. Courthouse, Indianapolis, Indiana, to schedule a trial and final pretrial conference.
So ordered.