Opinion
Cause No. IP 98-1236-M/S
March 27, 2000
ORDER ON MOTION FOR SUMMARY JUDGMENT
This matter comes before the Court on the motion of defendant, The Western and Southern Life Insurance Company ("Western-Southern"), seeking judgment in its favor as a matter of law on all of the claims presented in the complaint filed by William Weber ("Weber") on September 8, 1998. Weber brought this action under the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. § 621 et seq, and the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1132, 1140. Weber alleges that he suffered age discrimination when Western-Southern demoted him in order to compel him to take early retirement. Am. Compl. ¶¶ 10, 11, 12. He further contends that Western-Southern demoted him with the intent to interfere with his attainment of full retirement benefits. Am. Compl. ¶¶ 23, 24, 25. The Court has fully considered the parties' arguments and, for the reasons discussed below, GRANTS the defendant's motion for summary judgment.
I. FACTUAL PROCEDURAL BACKGROUND
Western-Southern is a life insurance company with a home office located in Cincinnati, Ohio. Forbrich Aff. ¶ 3. Western-Southern is "home service company" in that its sales representatives regularly call on policyholders for sales and service purposes, including premium collection. Id. The company has over 200 sales offices, generally referred to as district offices, which are located in twenty states. Id. at ¶ 4. The district offices are each headed by a sales manager and contain five to eight sales representatives who are assigned to service a particular geographical area. Id.
Weber worked for Western-Southern from April 5, 1965 until he retired at the age of fifty-five. Weber Dep. at 13-14. Weber was initially hired as a sales representative and was subsequently promoted to a sales manager position in the Indianapolis East Office. Id. at 95. In 1980, Weber was promoted to a district sales manager position which he then held for seventeen years. Id. at 96. As a district sales manager, he reported to Carol Forbrich ("Forbrich"), Divisional Vice-President. Id. at 106.
During the course of his career, Weber received several company awards for his management abilities. Pl.'s Ex. E. Weber also qualified to attend Western-Southern's Leader Sales Meeting, known as "Convention," at least eleven times during his seventeen years as a district manager. Weber Aff. ¶ 3. In addition to these achievements, Weber was well-liked by his peers and supervisees. Bill Peters, a sales manager in Weber's office, stated: "Under Weber's management, the Indianapolis East District . . . was recognized throughout Western-Southern as a well-run and well-managed district." Peters Aff. ¶ 20. Similarly, Michael Bernier, another district sales manager, said that he has "always respected [Weber] from day one as one of the best managers I have ever had the privilege of knowing." Bernier Dep. at 46.
Convention is an annual meeting held for the top fifty district sales managers out of the 240 district sales managers in the company. Weber Aff. ¶ 3.
Despite Weber's success, Western-Southern announced in November of 1992 that the company's Shelbyville office would be removed from Weber's district and placed in a newly created district in Columbus. Weber Aff. ¶ 6. At the same time, Western-Southern also took an office from Ronald Lynas ("Lynas"), another district sales manager, for placement in the new Columbus district. Id. The effect of these actions was to take existing staff members and accounts from Weber and Lynas which in turn reduced their compensation as a portion of their pay was derived from the business generated by their staff. Id.
Both Weber and Lynas protested the down-sizing of their districts. Id. at ¶ 7. Weber believed that the motive for Western-Southern's decision was age and pension-related because he was forty-nine and Lynas was fifty-three. Id. at ¶¶ 4, 5. Lynas took early retirement in 1996. Weber. Aff. ¶ 9. After he retired, the Columbus district was eliminated and three of the five accounts taken from Weber were returned to his district. Id. Nevertheless, Weber contends that the downsizing of his district substantially decreased his earnings for pension purposes. Pl.'s Ex. 5.
In October of 1997, Weber was demoted as a result of an incident involving the resignation of Sean Gore, one of the sales representatives in his office. Def.'s Ex. E. Dick Paris, who is one year younger than Weber, replaced him. Weber Dep. at 183, 228. After his demotion, Weber accepted a sales manager position in the same office. Id. at 178. As a sales manager, Weber was guaranteed a certain amount of income for thirteen weeks. Id. at 181. After the thirteenth week, he would receive commissions based on his own sales as well as the sales of the representatives that he supervised. Id. at 309. Under this pay structure, he had the potential to earn as much or more as he had made as a district sales manager. Id. at 310. However, in January of 1998 when the guarantee was about to expire, Weber elected to become a sales representative. Id. at 181. In that position, he was also guaranteed a certain amount of income for thirteen weeks. Id. at 183-84. Like the sales manager position, Weber had the potential to earn as a sales representative what he had made as a district sales manager. Id. at 312.
When Gore resigned, Weber represented to the home office that his resignation was effective August 1, 1997. Pl.'s Ex. 18. However, after speaking with Gore as well as several of Gore's coworkers, Forbrich learned that Gore had not worked for Western-Southern since the early part of July and that he had been working for another company called Pencore. Forbrich Aff. ¶¶ 5, 6, 7. Following an investigation, Forbrich concluded that Weber had submitted false information about the actual dates of Gore's resignation, that Weber had allowed Western-Southern to keep Gore on the payroll after he actually stopped working and that Weber knew the company expected an employee to be working during his resignation period if he was going to be paid during that time frame. Forbrich Dep. at 168-69, 209-11. In deciding to demote Weber, Forbrich stated that Weber had committed terminable offenses under the terms of his employment agreement. Forbrich Aff. ¶ 15. However, Weber's longevity with the company and the fact that another district sales manager who had committed similar acts was demoted prompted her not to terminate his employment. Id.
On April 7, 1998, Weber took early retirement under a special company plan which enabled him to receive seventy-five percent of what his retirement benefits would have been had he retired at age sixty. Id. at 14. Weber selected April 7th because April 5th was his employment anniversary with Western-Southern and by waiting to retire after this date he received another year of credit under the retirement plan which increased the percentage of the benefits he received. Id. at 21-22. Weber retired with thirty-three years of service at Western-Southern. Id. at 40.
Weber filed a charge of discrimination with the Equal Employment Opportunity Commission ("EEOC") on June 4, 1998. Am. Compl. ¶ 6. In his charge, Weber alleged that he was constructively discharged from his employment when Western-Southern compelled him to take early retirement by demoting him because of his age. Pl.'s Ex. 23. The EEOC issued a right to sue letter on August 7, 1998. Am. Compl. ¶ 7. This action followed, accompanied by a ERISA claim and a state law intentional infliction of emotional distress claim, on September 8, 1998.
At present, this case is before the Court on the motion for summary judgment filed by Western-Southern on January 21, 2000. Western-Southern asserts that there are no genuine issues of material fact and that it is entitled to judgment as a matter of law on both of Weber's claims. The Court has jurisdiction over this matter pursuant to 29 U.S.C. § 621, 623 and 1132, and 28 U.S.C. § 1331. Having reviewed the factual background, the Court now turns to a brief overview of the standards governing its decision.
II. SUMMARY JUDGMENT STANDARD
Summary judgment is granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). An issue is genuine only if the evidence is such that a reasonable jury could return a verdict for the opposing party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A disputed fact is material only if it might affect the outcome of the suit in light of the substantive law. Id.
The moving party has the initial burden to show the absence of genuine issues of material fact. See Schroeder v. Barth, 969 F.2d 421, 423 (7th Cir. 1992). This burden does not entail producing evidence to negate claims on which the opposing party has the burden of proof. See Green v. Whiteco Indus., Inc., 17 F.3d 199, 201 n. 3 (7th Cir. 1994). The party opposing a summary judgment motion bears an affirmative burden of presenting evidence that a disputed issue of material fact exists. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986); Scherer v. Rockwell Int'l Corp., 975 F.2d 356, 360 (7th Cir. 1992). The opposing party must "go beyond the pleadings" and set forth specific facts to show that a genuine issue exists. See Hong v. Children's Mem. Hosp., 993 F.2d 1257, 1261 (7th Cir. 1993), cert. denied, 511 U.S. 1005 (1994). This burden cannot be met with conclusory statements or speculation, see Weihaupt v. American Med. Ass'n, 874 F.2d 419, 428 (7th Cir. 1989), but only with appropriate citations to relevant admissible evidence. See Local Rule 56.1; Brasic v. Heinemann's Inc., Bakeries, 121 F.3d 281, 286 (7th Cir. 1997); Waldridge v. American Hoechst Corp., 24 F.3d 918, 923-24 (7th Cir. 1994). Evidence sufficient to support every essential element of the claims on which the opposing party bears the burden of proof must be cited. See Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
In considering a summary judgment motion, a court must draw all reasonable inferences "in the light most favorable" to the opposing party. Spraying Sys. Co. v. Delavan, Inc., 975 F.2d 387, 392 (7th Cir. 1992). If a reasonable factfinder could find for the opposing party, then summary judgment is inappropriate. Shields Enters., Inc. v. First Chicago Corp., 975 F.2d 1290, 1294 (7th Cir. 1992). When the standard embraced in Rule 56(c) is met, summary judgment is mandatory. Celotex Corp., 477 U.S. at 322-23; Shields Enters., 975 F.2d at 1294.
The summary judgment standard is applied with added rigor in employment discrimination cases because of the crucial role played by motive, intent and credibility in resolving such cases. Pitasi v. Gartner Group, Inc., 184 F.3d 709, 714 (7th Cir. 1999). However, even when discriminatory intent is at issue, the evidence must not only address the issue of intent, but also relate to the specific employment decision in question. Cowan v. Glenbrook Security Serv., Inc., 123 F.3d 438, 443 (7th Cir. 1997). Further, the nonmovant will not defeat summary judgment merely by pointing to self-serving allegations without evidentiary support. Cliff v. Board of Sch. Comm'rs, 42 F.3d 403, 408 (7th Cir. 1994).
III. DISCUSSION A. ADEA CLAIM
Weber contends that he suffered discrimination when Western-Southern compelled him to take early retirement by demoting him because of his age in violation of the ADEA. The ADEA prohibits employers from engaging in discrimination with respect to compensation, terms, conditions or privileges of employment "because of an individual's age." 29 U.S.C. § 623 (a)(1). To succeed in an ADEA claim, a plaintiff must establish that he has suffered an adverse employment action which would not have occurred "but for" his employer's intentional age-based discrimination. See Debs v. Northwestern Illinois Univ., 153 F.3d 390, 394 (7th Cir. 1998).
To demonstrate that he has suffered an adverse employment action, Weber argues that his demotion was essentially a constructive discharge. Establishing constructive discharge is a two-step process. Simpson v. Borg-Warner Automotive, Inc., 196 F.3d 873, 877 (7th Cir. 1999). First, a plaintiff must show that his working conditions were so intolerable that a reasonable person would have been compelled to resign. Rabinovitz v. Pena, 89 F.3d 482, 489 (7th Cir. 1996). Second, he must demonstrate that the conditions were intolerable because of unlawful discrimination. Drake v. Minnesota Mining Mfg. Co., 134 F.3d 878, 886 (7th Cir. 1998).
Here, Weber asserts that the economic impact of his demotion was such that a reasonable person would have been compelled to take early retirement. Specifically, he alleges that his potential for earning compensation "even remotely close" to what he had earned during the past ten years was slight because he would have received at most a base salary of $80.00 to $100.00 per week as a sales manager or sales representative and he would have had to build a customer base "from scratch" at the age of fifty-five. Weber further argues that his earnings during the final years of his employment would have reduced his pension significantly because Western-Southern calculates its retirement benefits based on an employee's "highest compensation" which is defined as the average of his five highest consecutive years of compensation during the ten-year period immediately preceding his retirement or termination. If he had not taken early retirement and remained employed as a sales manager or sales representative until age sixty, Weber claims that his highest compensation would have decreased by at least $13,888. Moreover, he would have forfeited health and life insurance benefits.
To show that Western-Southern forced him into this economic position because of his age, Weber presents evidence that both the company's president and regional vice-president had instructed management not to accept employment applications from people who were over fifty years old. He further contends that Forbrich and her immediate superior had repeatedly expressed the opinion that "older" and "senior" managers would have a hard time adapting to changes within the management style of the company. Finally, Weber alleges that Forbrich had questioned him about his plans for retirement just seven months before he was demoted, that Forbrich had made comments to another district sales manager which indicated that she understood that retirement benefits at Western-Southern were calculated based upon earnings during the final years of employment, that Forbrich's notice of demotion contained information which Forbrich knew was false and that Weber's disciplinary action was excessive given that Western-Southern uses a progressive counseling policy and procedure and Weber had been subject to no prior disciplinary action.
Citing Connors v. Chrysler Fin. Corp., 160 F.3d 971 (3rd Cir. 1998), Western-Southern counters that the facts presented do not suggest that Weber's working conditions were so intolerable that a reasonable person would have felt compelled to resign. In Connors, an executive for a company that was the target of an acquisition was given the option of retiring from his company with its benefits or accepting a position in the acquiring company with that company's benefits. Id. at 972. After weighing the options, Connors decided to retire from his company. Id. at 973. He later sued under the ADEA, claiming that his retirement was involuntary. Id. In considering whether Connors had been constructively discharged, the Third Circuit noted that Connors had decided to retire "only after making an informed decision based on economic realities." Id. at 974. Thus, "the retirement was `involuntary' only in that the difference between the two companies' retirement and benefits packages made retirement the clearly preferable option based on the financial repercussions of the decision." Id. The Court then held that Connors had not established constructive discharge, stating:
`Intolerability' is not established by showing merely that a reasonable person confronted with the same choices as the employee, would have viewed resignation as the wisest or best decision, or even that the employee subjectively felt compelled to resign; presumably every resignation occurs because the employee believes it is in his best interest to resign. Rather, `[i]ntolerability . . . is assessed by the objective standard of whether a reasonable person in the employee's position would have felt compelled to resign,' — that is whether he would have had no choice but to resign.Id. at 976 (quoting Blistein v. St. John's College, 74 F.3d 1459, 1468 (4th Cir. 1996)). Applying Connors, Western-Southern asserts that Weber has not shown constructive discharge because his decision to take early retirement was based on nothing more than his own speculation that his pension benefits might decrease if he continued to work. Stated differently, Weber has presented no facts demonstrating that he had not choice by to retire.
In considering the parties' arguments, the Court is guided by the Seventh Circuit's decision in Henn v. National Geographic Soc., 819 F.2d 824 (7th Cir. 1987), cert. denied, 484 U.S. 964 (1987). In Henn, a group of employees brought suit under the ADEA alleging age discrimination after accepting early retirement. Id. at 826. To prove their prima facie case, the employees contended that they had been constructively discharged because they felt compelled to retire early when their employer gave them the "silent treatment" and threatened them with "unpleasant consequences" if their work performance did not improve. Id. at 829. However, the district court granted summary judgment for the employer concluding that the employees' working conditions were unchanged from what they had always been and that each person's decision to retire appeared to be voluntary. Id. at 826. In affirming summary judgment, the Seventh Circuit held that whether an employee has shown constructive discharge turns on what the employer communicated to the employee. Id. at 830. In essence, a constructive discharge occurs only if the employee can show that he would have been fired if they turned down an offer of early retirement. Id.
Applying Henn to this case, the Court concludes that Weber has failed to present specific facts to support a reasonable conclusion that he was constructively discharged. While he may have felt that he was demoted because of age discrimination, Weber has not shown that he would have been fired if he had decided to continue working or even that Western-Southern was pressuring him to take early retirement. Indeed, Weber testified at his deposition that after he was demoted there were no instances or situations in which he felt discriminated against because of his age. He also stated that he could have retired at any time after March 30, 1998, but he chose to work another eight days until April 7th so he could get an additional year of credit in the retirement plan. Further, Weber has not shown that he lacked information about the terms of the offer or that he was forced to make a decision in a very short period of time so as to suggest that the choice to retire early was not voluntary. To the contrary, the record reflects that Weber began requesting information from the benefits department about his retirement benefits as early as January 1998. After weighing the options detailed in a letter from Western-Southern to Weber dated March 6, 1998, Weber notified the company on March 18th that he intended to retire effective April 7th.
These facts do not show that Weber was compelled to take early retirement because he would have been fired if he had elected to continue working. Nor do they establish that Western-Southern pressured Weber to make a split-second decision so that he was driven to early retirement not by its attraction but by the terror of the alternative. See Henn, 819 F.2d at 829. At most, the facts presented demonstrate that Weber elected to retire because he was unwilling to assume the risk that his retirement benefits would ultimately go down if he remained employed. Having found that Weber was not constructively discharged, the Court concludes that summary judgment is appropriate on Weber's age discrimination claim as Weber cannot show that he has suffered an adverse employment action.
To the extent that Weber claims he suffered discrimination when he was demoted or when Western-Southern redistricted his accounts, the Court finds that he is time-barred from asserting a claim for recovery under the ADEA. The ADEA states that a charge filed pursuant to the Act must be filed "within 180 days after the alleged unlawful practice occurred." 29 U.S.C. § 626(d)(1). In Davidson v. Indiana-American Water Works, 953 F.2d 1058 (7th Cir. 1992), the Seventh Circuit held that this limitations period begins to run on the date that the employer takes an adverse personnel action against the plaintiff, not when the full consequences of the action are felt. Id. at 1059.
Here, Western-Southern notified Weber of its decision to redistrict several of Weber's accounts in November of 1992 and of its decision to demote him in October of 1997. Weber concedes that he did not file a charge with the EEOC until June 4, 1998, or well after the statute of limitations period had run for redress on either action. Nevertheless, he argues that both incidents are closely related to the allegation of constructive discharge and thus should be treated as one continuous act that ends within the limitations period under the "continuing violation" theory. See Wilson v. Chrysler Corp., 172 F.3d 500, 510 (7th Cir. 1999). Under this doctrine, a plaintiff may obtain relief from a time-barred act of discrimination by linking it with acts that fall within the statutory limitations period. Filipovic v. K R Exp. Systems, Inc., 176 F.3d 390, 396 (7th Cir. 1999). However, the plaintiff must sue as soon as the discrimination becomes "sufficiently palatable" that a reasonable person would realize he had a substantial claim. Wilson, 172 F.3d at 510. Moreover, in order to fall within this doctrine, there must be a present violation, not simply the effects of a past violation. Young v. Will County Dept. of Public Aid, 882 F.2d 290, 292 (7th Cir. 1989). To succeed under the continuing violation theory, a plaintiff must demonstrate that the acts of alleged discrimination are part of an ongoing pattern of discrimination and that at least one of the alleged discriminatory acts occurred within the relevant limitations period. Id.
Applying these principles, the Court finds Weber's argument unavailing for two reasons. First, as previously stated, Weber testified in his deposition that he has experienced no instances or situations in which he felt discriminated against because of his age since he was demoted from his position as district sales manager. Thus, he cannot link his demotion or the redistricting of his accounts to any alleged discriminatory act within the statutory period. In essence, Weber merely attempts to create one continuous act by linking Western-Southern's previous acts to what he believes is the consequence of their effect — his constructive discharge. Second, given the number of years he was employed with Western-Southern in a management capacity, Weber had enough knowledge and experience to know what impact demotion to a sales manager position or the loss of five productive accounts would have on his income. Accordingly, the Court concludes that Weber was required to sue when he became aware of the company's decision.
B. ERISA CLAIM
Weber also claims that Western-Southern violated § 510 of the Employment Retirement Income Security Act when it demoted him for the purpose of interfering with his pension benefits. An employer violates § 510 when it discharges or discriminates against "a participant or beneficiary [of an employee benefit plan] . . . for the purpose of interfering with the attainment of any right to which such participant may become entitled under the plan . . ." 29 U.S.C. § 1140. An employee may enforce his § 510 rights through § 502(a)(3), to protect their "employment relationships from disruptions designed to frustrate the vesting of benefit plan rights or the continued enjoyment of rights already vested but yet to be partaken." Teumer v. General Motors Corp., 34 F.3d 542, 544 (7th Cir. 1994) (citing Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 142-44 (1990)).Section 510 is not designed to protect an employee from every action the employer may take, rather, it only offers protection from "changes in one's employment status" that are specifically motivated by an intent to interfere with the attainment of benefits. Id. at 545 (emphasis in original). Thus, to succeed on a § 510 claim, an employee must prove that the employer altered the participant's employment status with the specific intent to interfere with his ERISA rights. Salus v. GTE Directories Serv. Corp., 104 F.3d 131, 135 (7th Cir. 1997). It is not enough to show that the loss of an employee's ERISA benefits was a "mere consequence" of some action taken by the employer, rather, it must be shown that such loss was the "motivating factor" behind the action. Id. at 136. An employee may prove this either by direct or circumstantial evidence of intent, or indirect evidence of interference with the burden-shifting analysis set forth in McDonnell-Douglas Corp. v. Green, 411 U.S. 792 (1973). Id. Moreover, it is not necessary that an employee prove that intent to interfere with his ERISA rights was the sole reason for the discharge, only that it "contributed to" the employment decision. Id. at 138.
Weber appears to rely on the burden-shifting approach. In the context of § 510, this approach requires that an employee establish a prima facie case of interference by demonstrating that he: (1) belongs to a protected class, (2) was qualified for his job position, and (3) was discharged or denied employment under circumstances that provide some basis for believing that the prohibited intent to retaliate was present. Id. at 135. However, it is unnecessary for this Court to determine whether an employee has established a prima facie case where the employer has advanced a legitimate, nondiscriminatory reason for its action. Lindemann v. Mobil Oil Corp., 141 F.3d 290, 296 (7th Cir. 1998). At this point, the burden then shifts to the employee to demonstrate that the proffered explanation is pretextual and that the "motivating factor behind the termination" was the specific intent to interfere with the employee's ERISA rights. Salus, 104 F.3d at 135.
In this case, the Court finds that Western-Southern has established that Weber was demoted because he falsified documents and failed to adequately supervise Sean Gore, one of his employees. Thus, the burden rests on Weber to show that Forbrich had a specific intent to interfere with the attainment of his retirement benefits when she made the decision to demote Weber to a sales manager position. To show that the reasons given by Forbrich were pretextual, Weber points to the fact that he was replaced by a coworker who was still four years away from retirement and that the timing of his demotion followed an incident in which Forbrich questioned Weber and several of his peers regarding their plans for retirement. In addition, he asserts that he was demoted immediately before he became eligible for retirement, that Forbrich's report was based on false information, that Western-Southern had a well-established policy that managers were to keep sales representatives on the payroll until the audit was complete, that Forbrich did not properly investigate the events surrounding Gore's resignation and that his punishment was severe in light of his exemplary service record with the company.
Even if taken as true, these allegations do not support a reasonable conclusion that the motivating factor behind Forbrich's decision to demote Weber was to interfere with his retirement plan because it is pure speculation that Weber's retirement benefits would have changed had he remained employed at Western-Southern. In his deposition testimony, Weber admitted that it is mere speculation that his demotion was permanent and that he could have been promoted back to a district sales manager position in the same year that he retired. In fact, the record shows that Roger Sanford, another district sales manager who was demoted, was later repromoted to another district sales manager position within the company. Further, there is no evidence beyond Weber's own doubt that his earnings as a sales manager or sales representative would not meet or even exceed what he had made in his former position. To the contrary, the deposition testimony of Michael Bernier, a former district sales manager who stepped down into a sales manager position, provides: "I hope to be able to do a significant job and to be able to make even more income eventually than I was [as a district sales manager]. The opportunities are there in all positions with Western and Southern. The only thing that [my demotion] did affect was my pride." Bernier Dep. at 44. Without specific facts demonstrating that Weber's income would in fact diminish and that Forbrich was thus aware of the consequence that her demotion decision would have on his pension, Weber has not created a genuine issue that Forbrich altered his employment status with the specific intent to interfere with his retirement plan as required to establish a § 510 violation. Thus, Western-Southern is entitled to summary judgment on this claim as well.
IV. CONCLUSION
Weber has failed to present sufficient evidence from which the Court could find a genuine issue of material fact for trial in this matter. Therefore, the motion for summary judgment filed by Western-Southern is GRANTED.
IT IS SO ORDERED.