## United States Court of Appeals FOR THE EIGHTH CIRCUIT

___________ No. 10-1113

___________ Richard Rahlf, Frank Stelter, & Scott * Johnson, *
* Plaintiff - Appellant, * * Appeal from the United States v. * District Court for the * District of Minnesota. Mo-Tech Corp., Inc., *
* Defendant - Appellee. *

___________ Submitted: November 16, 2010 Filed: June 16, 2011

___________ Before SMITH, BEAM, and BENTON, Circuit Judges.

___________ BENTON, Circuit Judge.
In October 2007, Richard S. Rahlf, Frank Stelter and Scott W. Johnson were terminated by their employer, Mo-Tech Corporation. They sued for age discrimination in violation of the Age Discrimination in Employment Act (ADEA) and the Minnesota Human Rights Ac t (MHRA). The district court 1 granted summary judgment to Mo-Tech. Having jurisdiction under 28 U.S.C. § 1291, this court affirms.

1 The Honorable David S. Doty, United Stat es District Judge for the District of Minnesota.Mo-Tech, a privately-held corpora tion, manufactures molds for the automotive, medical, consumer-products, a nd computer industries. Before Rahlf, Stelter and Johnson were laidoff, Mo-Tech employed 14 mold-makers, classified by skill level. Rahlf, Stelter and Johnson we re Class A manual mold-makers, the most skilled. Class A manual mold-makers build , restore, alter and service complex molds.

In the 1980s, when Rahlf, Stelter and Johnson began working, molds were made manually. Mold-makers then read a two-dimensional blueprint from which they produced the finished, three-dimens ional mold. In the early 1990s, Mo-Tech began using a Computer Numerical Control machine (CNC) to help make the molds. A CNC machine is programmed by a mold-m aker to the product specifications and directs the production of the mold. Th e CNC technology makes the process easier and faster.

The popularity of CNC technology has stead ily increased. Clients often design parts for CNC-generated mode ls. Consequently, there is greater need for moldmakers proficient in this technology as opposed to traditional manual mold-making. Despite the growing popularity of CNC, Mo-Tech did not require or provide its employees with formal training on it. Instead, employees were trained on the job when CNC machines were ava ilable. Rahlf practiced on the CNC machines at work; Stelter and Johnson each attended CNC training in the 1990s.

Mo-Tech’s employees are managed by Thomas J. Nielsen, the President; Thomas Pickar, the Operations Manager; and Timothy E. Pickar, the Tooling Manager. In September 2007, these three determined that a reduction-in-force (RIF) was necessary, due to a change in client needs, as well as anticipated reductions in workload and profitability. To determin e which mold-makers to let go, Nielsen, Pickar and Pickar ranked the mold-maker s based on several f actors, including CNC proficiency, general mold-making effici ency, and their own observations of each

-2-employee’s work. The three managers agreed that Rahlf, Stelter and Johnson should be laid off.

The three employees contend they were terminated because of their age, in violation of the ADEA and MHRA. The district court granted summary judgment to Mo-Tech. Rahlf, Stelter and Johnson appeal.

II.

This court reviews de novo a gr ant of summary judgment. See EEOC v. Liberal R-II Sch. Dist. , 314 F.3d 920, 922 (8th Cir. 2002). Summary judgment is appropriate when the evidence, view ed most favorably for the nonmovant, demonstrates no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. See Cherry v. Ritenour Sch. Dist. , 361 F.3d 474, 478 (8th Cir. 2004). “A genuine issue of materi al fact exists if a reasonable jury could return a verdict for the party opposing the motion.” Humphries v. Pulaski County Special Sch. Dist. , 580 F.3d 688, 692 (8th Cir. 2009).

The ADEA prohibits discrimination against employees, age 40 and over, because of their age. 2 29 U.S.C. § 623(a)(1), 631(a) . Under the ADEA, a plaintiff may prove age discrimination based on disparat e treatment. When, as here, a plaintiff relies on circumstantial rather than direct evidence of age discrimination, the case is considered under the burden-shifting framework of McDonnell Douglas Corp. v. Green , 411 U.S. 792 (1973). See Tusing v. Des Moines In dep. Cmty. Sch. Dist. , 639

2Like the ADEA, the MHRA prohibits discrimination against an employee based on age. “In analyzing cases under the MHRA, the state courts apply the principles developed in the adjudication of claims under Title VII because of the substantial similarities between the two statutes.” Hanenburg v. Principal Mut. Life Ins. Co. , 118 F.3d 570, 574 (8th Cir. 1997). This court thus analyzes the claims together, applying the same evidentiary framework.
-3-F.3d 507, 515 (8th Cir. 2011) (upholding the continued applicability of McDonnell Douglas after Gross v. FBL Fin. Servs., Inc. , ___ U.S. ___, 129 S.Ct. 2343, 174 L.Ed. 2d. 119 (2009)); Haigh v. Gelita USA, Inc. , 632 F.3d 464, 468 (8th Cir. 2011) (applying McDonnell Douglas , after Gross , in ADEA claim based on circumstantial evidence). Under this framework, the plain tiff must first establish a four-part prima facie case of age discrimination. See Chambers v. Metro. Prop. & Cas. Ins. Co. , 351 F.3d 848, 855 (8th Cir. 2003). To establish a prima facie case of age discrimination in a reduction-in-force, a plaintiff must show that (1) he is over 40 years old, (2) he met the applicable job qualifications, (3) he suffered an adverse employment action, and (4) there is some additional evidence that age was a factor in the employer’s termination decision. See Ward v. Int’l Paper Co. , 509 F.3d 457, 460 (8th Cir. 2007). Once the plaintiff establishes a pr ima facie case, the burden of production shifts to the employer to articulate a legitimate, nondiscriminatory reason for its adverse employment action. Id

. If the employer does so, the plaintiff must show that the employer’s proffered reason wa s pretext for discrimination. Id . At all times, the plaintiff retains the burden of persuasion to prove that age was the “but-for” cause of the termination. See Gross v. FBL Fin. Servs., Inc. , ___U.S. at ___ 129 S.Ct. at 2350.

The first and third elements of a prim a facie case are undis puted: Rahlf, Stelter and Johnson were over forty and were laid off. Mo-Techalso does not contest that Stelter and Johnson satisfy the second el ement: both were qualified for a position at the company after the RIF. Mo-Tech does, however, argue that Rahlf was not qualified for any position existing after the RIF because he was not skilled with CNCtechnology. As summary judgment mandates making all inferences for the nonmoving party, and because Rah lf offers some evidence th at there was still work for manual mold-makers, Rahlf satisfies the s econd element of the prima facie case. See Arnold v. Nursing Home & Reh ab. Ctr. at Good Shepherd LLC , 471 F.3d 843, 846 (8th Cir. 2006) (finding that employees were required to show only that they were qualified for the job, not that they would ex cel or even meet reasonable expectations).

-4-Rahlf, Stelter and Johnson claim that b ecause they were the oldest full-time mold-makers terminated, age was a factor in terminating them. Without direct evidence of age discrimination, Rahlf, St elter and Johnson may satisfy their burden “by presenting either statistical evidence (suc h as a pattern of fo rced early retirement or failure to promote older employees) or ‘circumstantial’ evidence (such as comments and practices that suggest a preference for younger employees.)” Chambers , 351 F.3d at 856, quoting Hanebrink v. Brown Shoe Co. , 110 F.3d 644, 646 (8th Cir. 1997).

Before Rahlf, Stelter and Johnson’s te rmination, Mo-Tech employed eleven Class A mold-makers. Rahlf, Stelter and Johnson (and one other employee not party to this suit) were the only Class A mold-m akers terminated, and were the oldest fulltime Class A mold-makers. Though not determinative of age discrimination, this fact is sufficient to make a prima facie case. See Lewis v. Aerospace Cmty. Credit Union , 114 F.3d 745, 748 (8th Cir. 1997) (plaintiff proved a prima facie case by showing that all three management employees over the age of 50 were fired, raising “some suspicion as to [employer’s ] motives in implementing its reduction in force”). With a prima facie case established, this cour t examines whether Mo-Tech has proffered a legitimate, non-discriminatory reason for the layoffs.

Mo-Tech explains that the RIF was necessary because of shifting (and reduced) customer needs as well as concerns about continued profitability. The company’s stated goal “was to shift the work that remainedto the more efficient and less labor intensive CNC mold making pr ocess while reducing the total number of Class A manual mold makers employed to reflect the anticipated decrease in its workload.” This is a legitimate, nondiscrimi natory justification for Rahlf, Stelter and Johnson’s termination. See Floyd v. Mo. Dep’t of Social Servs., Div. of Family Servs. , 188 F.3d 932, 936 (8th Cir. 1999) (“The burden to articulate a nondiscriminatory justification is not onerous, and the explanation need not be

-5-demonstrated by a preponderance of the ev idence.”). Rahlf, Stelter and Johnson must then show that Mo-Tech’s explanation is pretextual, meant to conceal the real, discriminatory reason for their terminations.

“When an employer articulates a nondi scriminatory reason for an employee’s discharge . . . ‘the factual inquiry pro ceeds to a new level of specificity.’” Dammen v. UniMed Med. Ctr. , 236 F.3d 978, 981 (8th Cir. 2001), quoting USPS Bd. of Governors v. Aikens , 460 U.S. 711, 715 (8th Cir. 2001). To avoid summary judgment, Rahlf, Stelter and Johnson must “p resent evidence thatcreates a question of material fact as to whether [Mo-Tech ’s] proffered reason is pretextual and that creates a reasonable inference that age was a determinative factor in [the] decision to discharge them.” Regel v. K-Mart Corp. , 190 F.3d 876, 879 (8th Cir. 1999); see also Lewis v. St. Cloud State Univ. , 467 F.3d 1133, 1137 (8th Cir. 2006).

Rahlf, Stelter and Johnson claim Mo-Tech’s stated reason is pretextual on five grounds: (1) there was no need for a RIF; (2) Mo-Tech failed to review their performance evaluations; (3) Mo-Tech did not follow its own termination criteria; (4) Mo-Tech destroyed the evidence relied upon to make the decision; and (5) Mo-Tech changed its reasons for the termination.

Rahlf, Stelter and Johnson argue that a RIF was not necessary. They point out that within a year after they were fired, Mo-Tech hired new employees and its sales increased. True, Mo-Tech did hire five new employees after Rahlf, Stelter and Johnson were laid off. None of the ne w employees, however, were Class A moldmakers (the position previously held by th e three men). Inst ead, the new employees filled positions that required either significantly less skill or CNC-specific skills. Mo-Tech hired one part-time shop assistan t (who was replaced shortly after starting work), one Class B CNC machinist, one part-time Class D CNC machinist, and rehired one employee as a Class B CNC mach inist. Contrary to Rahlf, Stelter and Johnson’s assertion, the fact that the rema ining mold-makers were busy and that Mo-

-6-Tech’s sales increased after they were terminated does not support an inference that the RIF itself was pretextual. “[W]hen a company exercises its business judgment in deciding to reduce its work force, ‘it need not provide evidence of financial distress to make it a ‘legitimate’ RIF.’” Regel , 190 F.3d at 880, quoting Hardin v. Hussmann Corp. , 45 F.3d 262, 265 (8th Cir. 1995). 3

Next, Rahlf, Stelter and Johnson att ack the methods Mo-Tech used to determine which employees to terminate. They assert a failure to review performance evaluations, failure to fo llow the employee handbook criteria, and destruction of the evidence supporting the termination decision.

“In the past, [this court has] looked to an employer’s method of determining which employees to discharge for eviden ce of possible discriminatory intent.” Hardin v. Hussmann Corp. , 45 F.3d 262, 266 (8th Cir. 1995). Rahlf, Stelter andJohnson contend that Mo-Tech failed to use objective criteria when ranking the moldmakers and impermissibly ignored their positive performance reviews. Ranking the manual mold-makers, Nielsen, Pickar and Pickar examined both objective data and subjective observations. They reviewed all the mold-makers’ skills with CNC technology. Each mold-maker’s productiv ity and profitability were objectively measured by reviewing whether the hours budge ted for particular jobs were met or exceeded. Relying further on objective criteria, Nielson, Pickar and Pickar consulted a computer program, “Job BOSS,” that a ssesses employee performance. Personal

3 Rahlf, Stelter and Johnson argue that in creasing sales allow the inference that a RIF was pretextual, citing Hillebrand v. M-Tron Indus., Inc. , 827 F.2d 363 (8th Cir.), cert. denied , 488 U.S. 1004 (1989) and Gaworski v. ITT Comm. Fin. Corp. , 17 F.3d 1104 (8th Cir.), cert. denied , 513 U.S. 946 (1994). While both cases note that RIF plans “often include objective eviden ce of a business decline,” both cases also include many other indicators th at the RIF was pretextual. Gaworski , 17 F.3d at 1109, quoting Hillebrand , 827 F.2d at 367. Hillebrand and Gaworski do not hold that evidence of a company’s increasing sales after an RIF require an inference of pretext.

-7-knowledge of each mold-maker also factored into the layoff decisions. Given the small number of Class A mold-makers ( 11) and management’s close involvement with daily operations, subjective knowledge of each man’s work and skills was relevant to the ultimate termination decision. See Wingate v. Gage County Sch. Dist. , 528 F.3d 1074, 1080 (8th Cir. 2008) (rejec ting an inference of discrimination where employer did not rely exclusively on subjective criteria, but also considered objective criteria). And, contrary to Rahlf, Stelter and Johnson’s position, Mo-Tech was not required to baseits RIF decision on positive performance reviews. See Hutson v. McDonnell Douglas Corp. , 63 F.3d 771, 779 (8th Cir. 1995) (finding that high performance ratings were unconvi ncing circumstantial evidence of discrimination in second RIF because all em ployees could be considered competent).

Rahlf, Stelter and Johnson further allege that Mo-Tech did not follow its own employee handbook, which outlines criteria for termination decisions. “An employer’s failure to follow its own policie s may support an inference of pretext.” Floyd , 188 F.3d at 937. Mo-Tech’s employee handbook states that “we keep people at work who have the skills and training to do the required jobs by area. We look at quality, productivity, attendance, efficient us e of time and length of service to make our selections.” Rahlf, Stelter and Johnson claim that Mo-Tech’s failure to consider length of service deviates from its own policie s sufficiently to show pretext. This is not so. The testimony of Tom and Tim Pickar demonstrates that th ey examined Rahlf, Stelter and Johnson’s performance for many of the listed criteria, albeit giving differing weight to the importance of each. Additional factors, not included in the handbook, were also considered, which is appr opriate given the nature of the RIF.

Rahlf, Stelter and Johnson claim that Mo-Tech’s destruction of the rankings and other supporting evidence demonstrates pretext. True, Mo-Tech discarded the specific rankings used to make its decision. However, the objective data used was easily accessible or reproducible, and the mana gers testified how they reached their ultimate decision. There is no indication that the evidence was destroyed in an

-8-attempt to conceal the truth. Cf. Stevenson v. Union Pac. R.R. Co. , 354 F.3d 739, 746 (8th Cir. 2004) (in a negligence suit, adverse-inference jury instruction was appropriate where defendant intentiona lly destroyed relevant documents and recordings).

Finally, Rahlf, Stelter and Johnson assert that Mo-Tech provided inconsistent rationales for its termination decision, which could permit a fact finder to find pretext. “Pretext may be shown with evidence that the employer’s reason for the termination has changed s ubstantially over time.” Loeb v. Best Buy Co., Inc. , 537 F.3d 867, 873 (8th Cir. 2008). Rahlf, Stelte r and Johnson cite numerous cases where inconsistent explanations for an employm ent decision were evidence of pretext. They, however, do not direct this court to inconsistencies in Mo-Tech’s proffered reasons for their termination. They clai m that for the first time on appeal, Mo-Tech raises specific, performance-related issu es about each man. Mo-Tech has never stated that Rahlf, Stelter and Johnson were terminated solely (or even primarily) for performance-related issues. As the testimony submitted to the district court indicates, any concerns about performance were factored into the broader evaluation of each employee. Rahlf, Stelter and Johnson further asse rt that Mo-Tech’s explanations to each man were inconsistent. Rahlf claims hewas told he was terminated because “of a need to restructure the t oolmakers area.” Stelter and Johnson were told that they were being terminated due to a “lack of wo rk.” These are not inconsistent with the reasons Mo-Tech has offered for the RIF. See EEOC v. Trans State Airlines, Inc. , 462 F.3d 987, 995 (8th Cir. 2006) (noting that “conflicting testimony is different from the type of ‘shifting explanation’ th at we have said would give rise to an inference of pretext”). Mo-Tech maintained a consistent explanation for the termination–shifting client needs and ananticipated reduction in workload and profitability.

The judgment of the district court is affirmed.

______________________________

-9-