United States Court of Appeals FOR THE EIGHTH CIRCUIT

No. 96-2692

Paul E. Lewis, *
* Appellant, *
*
v. *
* Aerospace Community Credit * Union, a Missouri corporation, *
* Appellee. *
Ap peals from the Unite d States No. 96-3130 District Court for the Easter n District of Missouri.
Gregory F. Kelleher, Jr., *
* Appellant, *
*
v. *
* Aerospace Community Credit * Union, a Missouri corporation, *
* Appellee, *
* Nina G. Pilger, *
* Defendant, *
*Kelleh er's case was before United States District Judge Jean C. Hamilton whil e 1 Lewis's case, by consent of the parties pursuant to 28 U.S.C. § 636(c), was befor e Magistrate Judge Frederick R. Buck les. Although these cases were filed separately in the district court and were i ndividually appealed to this court, we have decided on our own motion to decide the appeals in one opinion beca use they involve substantially the same parties, issues, and legal arguments.

2 American Association of Retired * Persons, *
* Amicus Curiae. *

Submitted: March 10, 1997 Filed: May 29, 1997

Before FAG G, HEANEY, and MORRIS SHEPPARD ARNOLD, Circuit Judges.

HEANEY, Circuit Judge.

Pau l E. Lewis and Gregory F. Kelleher, Jr. eac h appeal from a grant of summary judgment by the Easter n District of Missouri to thei r former employer, Aerospace 1 Community Credit Union ("Aerospace"), dismissing thei r discrimination claims brought under the Ag e Disc rimination in Employment Act (ADEA), 29 U.S.C. § § 621-634 (1994). Because we agree with the di strict court that neith er plaintiff has presented sufficient evidence of discrim ination to survive summary judgment, we affirm both decisions.3 I.

In 1986, when he was forty-six years old, Kellehe r bega n working for Aerospace as a loan manager and i n 1992 , he became manager of one of the credit union’ s branch offices. Lewis began working for Aerospace i n 199 1, at age forty-seven as the Vice President o f Management Information Systems, a new positio n created to oversee th e expansion of Aerospace’s computer system and the conversion of a recently-merged credit union to th e same system.

In the early 1990s, Aerospace experienced financia l troubl es. The state and federal agencies in charge o f monitoring the credit union’s financial stability wer e crit ical of its performance and recommended that i t develop a plan to reduce its net operating expenses. As part of it s plan, Aerospace reduced office expenses such as travel, training, and maintenance, and cen tralized its lendi ng activities to one of three branch offices

. Aerospace also eliminated several positions: th e Executive Vice President, the Executive Secretary , Lewis's position, and all three branch manage r positions. As a result, Aerospace fired Kelleher and Lewis o n October 31, 1994. Kelleher was fifty-four years old a t the time a nd Lewis was fifty. According to Kelleher and Lewis, three of the four persons whose positions wer e eliminated and who did not find other work in the credit union were over fifty; the two employees who found other work with Aerospace were under fifty. Aerospac e acknowledg es that neither Kelleher nor Lewis experienced any performance problems and asserts that, but for th e4

comp any’s need to reduce expenses, neither would hav e been fired.

After exhausting their administrative remedies wit h the Equal Employment Opportunity Commission, Kelleher and Lewis each initiated a lawsuit against Aerospace , alleging t hat its decision to terminate their positions was made on the basisAs a separate count in his complaint, Kelleher also alleged that the President o f 2 Aerospace, Nina Pilger, violated the ADEA by referring to him "by derogatory age

related names and epithets" in the presence of other employees. Although we agre e with the district court that Pilger's comments alone do not give rise to an independent age discrimination claim, we consider the comments in connection with Kelleher's other evidence of age discrimination to determine whether he has presented sufficien t evidence to survive summary judgment on his disparate treatment claim.

5 of age and that it had a disparate impact on person s
over the age of fifty. Aerospace moved for summar y 2 judgment in each case, arguing that as to the ir claims of disparate treatment, neither claimant could establish a prima f acie case of age discrimination and that even i f they could , they had not rebutted Aerospace's legitimate

reas ons for the reduction decisions. Aerospace als o argu ed that disparate impact claims are not cognizabl e under the ADEA and that even if they were, Kelleher and Lewi s had not presented sufficient evidence to surviv e
summa ry judgment. In each case, the district cour t gran ted summary judgment for Aerospace on both th e disp arate treatment and the disparate impact claims

. Kelleher and Lewis appeal.

II. We re view the grant of summary judgment de novo t o dete rmine whether the record, viewed in the light mos t favo rable to the nonmoving party, reveals any genuin e issue of material fact and whether the moving party i s entitled t o a judgment as a matter of law. Fed. R. Civ. P. 56 (c); Celotex Corp. v. Catrett , 477 U.S. 317, 32 2 (1986).

A. Disparate Treatment6

We review Kelleher’s and Lewis’s age discriminatio n claims, based largely on circumstantial evidence, unde r the familiar McDonnell Douglas , burden-shifti ng analysis. Halsell v. Kimberly-Clark Corp. , 683 F.2d 285, 289 (8t h Cir. 1982) ( McDonnell-Douglas framework applicable t o ADEA claims). Under that analysis, if7

a pl aintiff demonstrates a prima facie case o f discr imination, the employer must offer a legitimate , no ndiscriminatory explanation for its employmen t decision. St. Mary’s Honor Ctr. v. Hicks , 509 U.S. 502, 507 (1993) ; Texas Dep’t of Community Affairs v. Burdine , 450 U.S. 248, 254 (1981). Once the employer meets it s burden of production, the legal presumption r aised by the prim a facie case is rebutted and the plaintiff retain s the ultima te burden of persuading the trier of fact that the employer’s true motivation for the challenge d employment decision was intentional discrimination

. Hick s , 509 U.S. at 508 (quoting Burdine , 450 U.S. a t 256).

1. Kelleher

There is no dispute that Kelleher was over fort y years old at the time of his discharge, that he wa s qualified for the job, and that he was discharged. I n addition t o these basic requirements, Kelleher points to the circumstances surrounding his discharge a s circ umstantial evidence that his age was a motivatin g factor in Aerospace’s decision to fire him. All thre e bran ch manager positions were eliminated, but the tw o other employees who had been branch managers and who were under age fifty were reassigned within the credit unio n to ne w positions not offered to Kelleher. Althoug h red istribution of a discharged employee’s duties t o younger em

ployees is insufficient by itself to establish

a pri ma facie case of age discrimination, Bialas v

. Greyhound Lines, Inc. , 59 F.3d 759, 763 (8th Cir. 1995), this case appears to involve more than mer e redis tribution of duties. After Aerospace determine d8

that the b ranch manager positions were to be eliminated, th e only branch manager who ultimately lost his job , Kell eher, was over fifty. Thus, the specifi c circums tances of this case raise some suspicion as t o Aero space’s motives in implementing its reduction i n force

. See Taylor v. Canteen Corp. , 69 F.3d 773, 78 0 (7th Cir. 1995) (“[A]n employerThe district court determined that there was noevidence that the positions to which 3 Kelleher suggests he

could have been reassigned were open when he was discharged, that he a pplied for them, or that he was qualified for them. Although there wa s evidence in the record to support that the reassigned employees were more qualifie d than Kelleher for their n ew positions, viewing the evidence in the light most favorable to Kelleher, these positions were awarded, and thus open, at the time of his discharge and he was qualified for them. That Kelleher was not given a n opportunity to apply for the jobs does not destroy his argument.

9 implementing a [reduction in force] may not f avor younger employees over older ones by finding new positions onl y for younger workers.”). 3

Kelle her also relies on statistical evidence t o supp ort his claim. He asserts that between 1993 an d 1995, Aero space terminated its only three nonbargainingunit employees who were over fifty years old and onl y termi nated one person under the age of forty. As th e district court recognized, given the sample size of th e stati stical evidence, it is “certainly not conclusiv e evide nce of age discrimination in itself, but it i s surely the kind of fact which could cause a reasonabl e trier of f act to raise an eyebrow, and proceed to assess the employer’s explanation for this outcome.” MacDiss i

v. Val mont Indus., Inc. , 856 F.2d 1054, 1058 (8th Cir

. 1988 ) (referring to an employer’s decision to terminat e the two oldest employees in a department in w hich all but

one of the remaining employees were younger than fort y years old). The district court determined, h owever, that Kell eher failed to create an inference of ag e discrimination because taking into consideration th e empl oyees in the collective bargaining unit, the age

rela ted disparity “disappears.” In our estimation, th e nonmanagement, organized employees are irrelevant t o10

Kelleher’s claim that Aerospace has discrimin ated against its m anagerial employees over the age of fifty bot h because of the difference in the nature of the positions and safeguards provided to organized employees bot h locally and nationally. Thus, we consider the evidenc e
as Ke lleher has presented it, giving it the weight , however slight, that it is due.Kelleher makes two additional arguments to support his prima facie case, which we 4 find to lack merit. First, Kelleher argues that Pilger’s admis sion that his salary was one factor she considered in deciding to fire him raises an inference of age discrimination because of the correlation between a higher salary a nd age. An employer’s reliance on factors correlated with age does not, in itself, co nstitute age discrimination. Hanebrink v. Brown Shoe Co. , No. 96 -2654 (8th Cir. April 14, 1997) (citing Hazen Paper Co. v. Biggins , 507 U.S. 604, 611 (1993)). Kelleher also contends that several age-relate d remarks made by Pilger provide further evidence of Pil ger’s bias against older persons. Inhis deposition, Kelleher testified that Pilger joked about his age in small groups at work and in larger meetings and that he found the comments embarrassing. He als o recal leda specific incident in which, after a round of golf at a company-sponsore d to urnament, Pilger told him that his poor performance on the course probably ha d something to do with his age. It is unclear from the record when any of the comments were made and, as to the comments made at work, what was said and in what context. Thus, we hav e absolutely no basis on which to evaluate the extent to which thes e comments indicate an age-r elated bias on the part of Pilger and whether such bias had any effect on her decision to fire Kelleher.

11 We believe that the circumstances surroundin g Kell eher’s discharge and the fact that Aerospace fire d al l three management employees over the age of fift y provi de sufficient additional evidence to establish a prima facie case of age discri mination. We thus turn to 4 the nondiscriminatory justifications Aerospace ha s offered fo r its employment decisions affecting Kelleher.

In addition to the e vidence of its financial need to red uce expenses, Aerospace contends that the branc h

mana ger positions were no longer necessary after i t cent ralized its lending services to one branch office

. Kell eher does not challenge this specific reason give n for h is termination. Rather, he argues that the fac t that Ae rospace gave all of its employees a five percen t raise the January following his discharge undermines the12

credit union’s assertion that it was experiencin g financial difficulties and needed to reduce i ts workforce at al l. We are not persuaded that a wage increase fo r reta ined employees and a need to eliminate unnecessar y positions are per se inconsistent. In fact, the evidence indicates that a raise for union employees wasOne former branch manager, Mary Jo Garofalo, became the Vice President o f 5 Operation s. Pilger testified at her deposition that Garofalo has been working in th e cred it union longer, has been involved in its growth, and is generally mor e knowledgea ble in the development of the credit union. The other former branc h
ma nager, Pat White, became the Manager of Business Development. Althoug h Kellehe r had been at the credit union longer than White (in fact, he had trained her in on Aerospace’s policies and procedures), Pilger testified that Kelleher was not qualified for the business development position because he lacks the sales ability necessary to promote the credit union’s s ervices to employee groups or potential employee groups.

13 man datory under the terms of Aerospace’s collectiv e barg aining agreement with the employee union and tha t management had already undergone a two and on e-half year wage freeze.

With respect to the fact that the younger, forme r branch man agers were given new assignments in the credit union, Aerospace has provided specific explan ations as to why the retained employees were better suited for the new positions than Kelleher. Kelleher contends that he was 5 equally qu alified for the positions. Even if we were to agre e with Kelleher’s own assessment of their relativ e qualifications, a comparison that reveals that Kellehe r was only as qualified as the retained employe es would not rais e an inference of discrimination. See Chock v

. Northwe st Airlines, Inc. , No. 96-204, slip op. at 6- 7 (8th Cir. May 14, 1997).

Because we agree with the district court tha t Kelleher has not produced any evidence to challenge th e nondiscrim inatory explanations Aerospace has offered for its employ

ment decisions, we affirm the grant of summary judgment for Aerospace with respect to Kelleher’ s disparate treatment claim.14

2. Lewis

Lewis’s age discrimination claim is more tenuous tha n Kell eher’s. Again, no one disputes that he was ove r forty years old when his position was elimina ted, that he

was qualified for the position, and that he wa s discharged. He produces little other evidenc e to support his cl aim, however. He relies on the same statistica l evide nce as presented by Kelleher, similar wag e considerations made by Pilger in eliminating hi s position, and the same five percent wage increase afte r his termination. Assuming that Lewis could establish a prim a facie case of age discrimination, he, lik e Kell eher, has presented no evidence to discredit th e nondiscriminatory reasons offered by Aerospace for hi s termina tion. In looking for areas in which a reductio n in Aerospace’s workforce would least impact t he operation of the credit union and the services it offered to it s customers, Pilger determined that Lewis’s supervisor y posi tion over data processing was no longer necessary

. The y ounger employee who assumed some of his dutie s simply returned to the position she had occup ied prior to th e creation of Lewis’s position. In light of th e evidence before us, we agree with the distric t court that Le wis has failed to make a submissible case of ag e discrimination.

B. Disparate Impact

We also agree with the district court that neithe r clai mant has presented sufficient evidence to support a clai mof disparate impact discrimination based on a dis parate-impact theory. Disparate-impact claim s15

challenge "'employment practices that are faciall y neutral in their treatment of different groups but tha t in fa ct fall more harshly on one group than another an d cannot be justified by business necessity.'" Hazen Paper Co. v. Biggins , 507 U.S. 604, 609 (1993) (quotin g Inte rnational Bhd. of Teamsters v. United States , 43 1 U.S. 324, 335-36 n.15 (1977)). To prove discriminatio n under this theory, a plaintiff must identify challenge a facially-neutral employment practice, demonstrate a di sparate impact upon the group to which he or sh e belongs, and prove causation. Watson v. For t Worth Bank & Trust , 487 U.S. 977,16

994-95 (19 88). For a prima facie case, plaintiffs "must offe r statistical evidence of a kind and degre e
su fficient to show that the practice in question ha s caused the exclusion of applicants for jobs o r promotions because of their membership in a protected group." Id

.

Aerospace contends that disparate-impact claims ar e not co gnizable under the ADEA. We disagree. Althoug h the Supreme Court has yet to rule on this leg al question,

see Haz en Paper , 507 U.S. at 610, our circuit continue s to recognize the viability of such claims und er the ADEA. Smith v. City of Des Moines, Iowa , 99 F.3d 1466, 147 0 (8th Cir. 1996). Nonetheless, we agree with the district court in both cases that the claimants have n ot presented statistical evidence of the kind or degree necessary t o establish a prima facie case of age discrimination. The sample size of three nonbargaining-unit employees ove r the a ge of fifty is simply too small independently t o support a discrimination claim. See MacDissi , 856 F.2d. at 1 058 (explaining that statistical evidence for a disp arate impact claim must be much stronger tha n circumstan tial evidence to support a disparate treatment claim); H arper v. Trans World Airlines, Inc. , 525 F.2d. 409, 412 (8th Cir. 1975) (sample of five too small)

. Because we have determined that the claimants failed t o estab lish a prima facie case, we need not address th e busi ness justifications offered by Aerospace for it s decisions. Accordingly, we affirm the grant of summar y judgment for Aerospace on both disparate impact claims.

III.17

Ba sed on the foregoing, we affirm the decisions o f the district court to grant summary judgment fo r Aerospace in each case with respect to all claims of age discrimination.

MORR IS SHEPPARD ARNOLD, Circuit Judge, concurs in th e result.18

A true copy.

Attest.

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

.