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. *

 

Appeals from the United

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, *

*
 Kelleher's case was before United States District Judge Jean C. Hamilton while

1

Lewis's case, by consent of the parties pursuant to 28 U.S.C. § 636(c), was before

Magistrate Judge Frederick R. Buckles. Although these cases were filed separately in

the district court and were individually appealed to this court, we have decided on our

own motion to decide the appeals in one opinion because 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 FAGG, HEANEY, and MORRIS SHEPPARD ARNOLD, Circuit

Judges.

 

HEANEY, Circuit Judge.

Paul E. Lewis and Gregory F. Kelleher, Jr. each

appeal from a grant of summary judgment by the Eastern

District of Missouri to their former employer, Aerospace 1

Community Credit Union ("Aerospace"), dismissing their

discrimination claims brought under the Age

Discrimination in Employment Act (ADEA), 29 U.S.C. §§

621-634 (1994). Because we agree with the district court

that neither plaintiff has presented sufficient evidence

of discrimination to survive summary judgment, we affirm

both decisions.
3

I.

In 1986, when he was forty-six years old, Kelleher

began working for Aerospace as a loan manager and in

1992, he became manager of one of the credit union’s

branch offices. Lewis began working for Aerospace in

1991, at age forty-seven as the Vice President of

Management Information Systems, a new position created to

oversee the expansion of Aerospace’s computer system and

the conversion of a recently-merged credit union to the

same system. 

In the early 1990s, Aerospace experienced financial

troubles. The state and federal agencies in charge of

monitoring the credit union’s financial stability were

critical of its performance and recommended that it

develop a plan to reduce its net operating expenses. As

part of its plan, Aerospace reduced office expenses such

as travel, training, and maintenance, and centralized its

lending activities to one of three branch offices.

Aerospace also eliminated several positions: the

Executive Vice President, the Executive Secretary,

Lewis's position, and all three branch manager positions.

As a result, Aerospace fired Kelleher and Lewis on

October 31, 1994. Kelleher was fifty-four years old at

the time and Lewis was fifty. According to Kelleher and

Lewis, three of the four persons whose positions were

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. Aerospace

acknowledges that neither Kelleher nor Lewis experienced

any performance problems and asserts that, but for the
4

company’s need to reduce expenses, neither would have

been fired. 

After exhausting their administrative remedies with

the Equal Employment Opportunity Commission, Kelleher and

Lewis each initiated a lawsuit against Aerospace,

alleging that its decision to terminate their positions

was made on the basis 
 As a separate count in his complaint, Kelleher also alleged that the President of

2

Aerospace, Nina Pilger, violated the ADEA by referring to him "by derogatory agerelated names and epithets" in the presence of other employees. Although we agree

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 sufficient

evidence to survive summary judgment on his disparate treatment claim.

5

of age and that it had a disparate impact on persons

over the age of fifty. Aerospace moved for summary

2

judgment in each case, arguing that as to their claims of

disparate treatment, neither claimant could establish a

prima facie case of age discrimination and that even if

they could, they had not rebutted Aerospace's legitimate

reasons for the reduction decisions. Aerospace also

argued that disparate impact claims are not cognizable

under the ADEA and that even if they were, Kelleher and

Lewis had not presented sufficient evidence to survive

summary judgment. In each case, the district court

granted summary judgment for Aerospace on both the

disparate treatment and the disparate impact claims.

Kelleher and Lewis appeal. 

II.

We review the grant of summary judgment de novo to

determine whether the record, viewed in the light most

favorable to the nonmoving party, reveals any genuine

issue of material fact and whether the moving party is

entitled to a judgment as a matter of law. Fed. R. Civ.

P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322

(1986).

 

A. Disparate Treatment
6

We review Kelleher’s and Lewis’s age discrimination

claims, based largely on circumstantial evidence, under

the familiar McDonnell Douglas, burden-shifting analysis.

Halsell v. Kimberly-Clark Corp., 683 F.2d 285, 289 (8th

Cir. 1982) (McDonnell-Douglas framework applicable to

ADEA claims). Under that analysis, if 
7

a plaintiff demonstrates a prima facie case of

discrimination, the employer must offer a legitimate,

nondiscriminatory explanation for its employment

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 its

burden of production, the legal presumption raised by the

prima facie case is rebutted and the plaintiff retains

the ultimate burden of persuading the trier of fact that

the employer’s true motivation for the challenged

employment decision was intentional discrimination.

Hicks, 509 U.S. at 508 (quoting Burdine, 450 U.S. at

256).

 

1. Kelleher

There is no dispute that Kelleher was over forty

years old at the time of his discharge, that he was

qualified for the job, and that he was discharged. In

addition to these basic requirements, Kelleher points to

the circumstances surrounding his discharge as

circumstantial evidence that his age was a motivating

factor in Aerospace’s decision to fire him. All three

branch manager positions were eliminated, but the two

other employees who had been branch managers and who were

under age fifty were reassigned within the credit union

to new positions not offered to Kelleher. Although

redistribution of a discharged employee’s duties to

younger employees is insufficient by itself to establish

a prima 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 mere

redistribution of duties. After Aerospace determined
8

that the branch manager positions were to be eliminated,

the only branch manager who ultimately lost his job,

Kelleher, was over fifty. Thus, the specific

circumstances of this case raise some suspicion as to

Aerospace’s motives in implementing its reduction in

force. See Taylor v. Canteen Corp., 69 F.3d 773, 780

(7th Cir. 1995) (“[A]n employer 
 The district court determined that there was no evidence that the positions to which 3

Kelleher suggests he could have been reassigned were open when he was discharged,

that he applied for them, or that he was qualified for them. Although there was

evidence in the record to support that the reassigned employees were more qualified

than Kelleher for their new 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 an opportunity to apply for

the jobs does not destroy his argument.

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implementing a [reduction in force] may not favor younger

employees over older ones by finding new positions only

for younger workers.”). 

3

Kelleher also relies on statistical evidence to

support his claim. He asserts that between 1993 and

1995, Aerospace terminated its only three nonbargainingunit employees who were over fifty years old and only

terminated one person under the age of forty. As the

district court recognized, given the sample size of the

statistical evidence, it is “certainly not conclusive

evidence of age discrimination in itself, but it is

surely the kind of fact which could cause a reasonable

trier of fact to raise an eyebrow, and proceed to assess

the employer’s explanation for this outcome.” MacDissi

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

1988) (referring to an employer’s decision to terminate

the two oldest employees in a department in which all but

one of the remaining employees were younger than forty

years old). The district court determined, however, that

Kelleher failed to create an inference of age

discrimination because taking into consideration the

employees in the collective bargaining unit, the agerelated disparity “disappears.” In our estimation, the

nonmanagement, organized employees are irrelevant to
10

Kelleher’s claim that Aerospace has discriminated against

its managerial employees over the age of fifty both

because of the difference in the nature of the positions

and safeguards provided to organized employees both

locally and nationally. Thus, we consider the evidence

as Kelleher 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 admission 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 and age. An employer’s reliance on

factors correlated with age does not, in itself, constitute 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-related

remarks made by Pilger provide further evidence of Pilger’s bias against older persons.

In his 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 also

recalled a specific incident in which, after a round of golf at a company-sponsored

tournament, Pilger told him that his poor performance on the course probably had

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 have absolutely no basis on which to evaluate the extent to which these

comments indicate an age-related 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 surrounding

Kelleher’s discharge and the fact that Aerospace fired

all three management employees over the age of fifty

provide sufficient additional evidence to establish a

prima facie case of age discrimination. We thus turn to 4

the nondiscriminatory justifications Aerospace has

offered for its employment decisions affecting Kelleher.

In addition to the evidence of its financial need to

reduce expenses, Aerospace contends that the branch

manager positions were no longer necessary after it

centralized its lending services to one branch office.

Kelleher does not challenge this specific reason given

for his termination. Rather, he argues that the fact

that Aerospace gave all of its employees a five percent

raise the January following his discharge undermines the
12

credit union’s assertion that it was experiencing

financial difficulties and needed to reduce its workforce

at all. We are not persuaded that a wage increase for

retained employees and a need to eliminate unnecessary

positions are per se inconsistent. In fact, the evidence

indicates that a raise for union employees was 
 One former branch manager, Mary Jo Garofalo, became the Vice President of

5

Operations. Pilger testified at her deposition that Garofalo has been working in the

credit union longer, has been involved in its growth, and is generally more

knowledgeable in the development of the credit union. The other former branch

manager, Pat White, became the Manager of Business Development. Although

Kelleher 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 services to employee groups or potential employee groups.

13

mandatory under the terms of Aerospace’s collective

bargaining agreement with the employee union and that

management had already undergone a two and one-half year

wage freeze.

With respect to the fact that the younger, former

branch managers were given new assignments in the credit

union, Aerospace has provided specific explanations as to

why the retained employees were better suited for the new

positions than Kelleher. Kelleher contends that he was 5

equally qualified for the positions. Even if we were to

agree with Kelleher’s own assessment of their relative

qualifications, a comparison that reveals that Kelleher

was only as qualified as the retained employees would not

raise an inference of discrimination. See Chock v.

Northwest Airlines, Inc., No. 96-204, slip op. at 6-7

(8th Cir. May 14, 1997).

Because we agree with the district court that

Kelleher has not produced any evidence to challenge the

nondiscriminatory explanations Aerospace has offered for

its employment 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 than

Kelleher’s. Again, no one disputes that he was over

forty years old when his position was eliminated, that he

was qualified for the position, and that he was

discharged. He produces little other evidence to support

his claim, however. He relies on the same statistical

evidence as presented by Kelleher, similar wage

considerations made by Pilger in eliminating his

position, and the same five percent wage increase after

his termination. Assuming that Lewis could establish a

prima facie case of age discrimination, he, like

Kelleher, has presented no evidence to discredit the

nondiscriminatory reasons offered by Aerospace for his

termination. In looking for areas in which a reduction

in Aerospace’s workforce would least impact the operation

of the credit union and the services it offered to its

customers, Pilger determined that Lewis’s supervisory

position over data processing was no longer necessary.

The younger employee who assumed some of his duties

simply returned to the position she had occupied prior to

the creation of Lewis’s position. In light of the

evidence before us, we agree with the district court that

Lewis has failed to make a submissible case of age

discrimination.

B. Disparate Impact

We also agree with the district court that neither

claimant has presented sufficient evidence to support a

claim of disparate impact discrimination based on a

disparate-impact theory. Disparate-impact claims
15

challenge "'employment practices that are facially

neutral in their treatment of different groups but that

in fact fall more harshly on one group than another and

cannot be justified by business necessity.'" Hazen Paper

Co. v. Biggins, 507 U.S. 604, 609 (1993) (quoting

International Bhd. of Teamsters v. United States, 431

U.S. 324, 335-36 n.15 (1977)). To prove discrimination

under this theory, a plaintiff must identify challenge a

facially-neutral employment practice, demonstrate a

disparate impact upon the group to which he or she

belongs, and prove causation. Watson v. Fort Worth Bank

& Trust, 487 U.S. 977, 
16

994-95 (1988). For a prima facie case, plaintiffs "must

offer statistical evidence of a kind and degree

sufficient to show that the practice in question has

caused the exclusion of applicants for jobs or promotions

because of their membership in a protected group." Id.

Aerospace contends that disparate-impact claims are

not cognizable under the ADEA. We disagree. Although

the Supreme Court has yet to rule on this legal question,

see Hazen Paper, 507 U.S. at 610, our circuit continues

to recognize the viability of such claims under the ADEA.

Smith v. City of Des Moines, Iowa, 99 F.3d 1466, 1470

(8th Cir. 1996). Nonetheless, we agree with the district

court in both cases that the claimants have not presented

statistical evidence of the kind or degree necessary to

establish a prima facie case of age discrimination. The

sample size of three nonbargaining-unit employees over

the age of fifty is simply too small independently to

support a discrimination claim. See MacDissi, 856 F.2d.

at 1058 (explaining that statistical evidence for a

disparate impact claim must be much stronger than

circumstantial evidence to support a disparate treatment

claim); Harper 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 to

establish a prima facie case, we need not address the

business justifications offered by Aerospace for its

decisions. Accordingly, we affirm the grant of summary

judgment for Aerospace on both disparate impact claims.

III.
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Based on the foregoing, we affirm the decisions of

the district court to grant summary judgment for

Aerospace in each case with respect to all claims of age

discrimination. 

MORRIS SHEPPARD ARNOLD, Circuit Judge, concurs in the

result.
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A true copy.

Attest.

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