United States Court of Appeals

FOR THE EIGHTH CIRCUIT

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No. 00-3425

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Tom Cooney, Jr.; Francis F. *

Boganowski; David M. Burke; Henry *

F. Kammerer; Jeanine K. Lendt; Loren *

C. Mathison; Ruth Nusser; Anthony H. *

Paczosa; Darwin H. Peterson; Don P. *

Rock; Daniel R. Sinnott; Homer T. *

Smith; Roger O. Stapes; William S. *

Sus; Michael Treat; Harold G. Wagner; *

Betty B. Willmer, *

*

Appellants, *

*

v. * Appeal from the United States District

* Court for the District of Nebraska.

Union Pacific Railroad Company, *

*

Appellee. *

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Submitted: May 18, 2001

Filed: July 23, 2001

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Before LOKEN, ROSS, and FAGG, Circuit Judges.

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ROSS, Circuit Judge.
1The Honorable Thomas M. Shanahan, United States District Judge for the

District of Nebraska. 

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Tom Cooney, Jr. and sixteen co-plaintiffs (appellants) appeal from the district

court's1 grant of summary judgment in favor of Union Pacific Railroad Company (UP) on

their disparate treatment claim under the Age Discrimination in Employment Act (ADEA),

29 U.S.C. §§ 621-634. We affirm.

Background 

 In 1996, the government approved the merger of UP and Southern Pacific Railroad

(SP). Pursuant to the labor protective conditions of New York Dock Ry v. United States,

609 F.2d 83 (2d Cir. 1979), the railroads and the Transportation-Communications Union

(the Union) entered into an agreement in order to accommodate SP clerical employees

who wanted to transfer to UP's Omaha, Nebraska facility. The agreement provided that

UP would offer buyouts of up to $95,000 to its employees to the extent that the number

of SP employees applying for positions in Omaha exceeded the number of available

positions. UP's Omaha clerical operations were divided into six zones. The agreement,

as supplemented, provided that clerks with the greatest seniority in each zone received

available buyouts within the zone. In past mergers, UP had offered buyouts on the basis

of system-wide seniority, instead of zone-by-zone seniority. 

Appellants were accounting clerks in Zone 212, ranging in age from 58 to 62 years

and in seniority from 27 to 42 years. In Zone 212, there were 42 buyout requests and five

offers, but none to appellants, who continued to work at UP. In Zone 201, there were 51

buyout requests and 51 offers. 

In April 1999, appellants filed a complaint in the district court, alleging violations

of the ADEA and state law. Appellants raised a disparate impact claim under the ADEA,

asserting that the buyout program adversely impacted employees in Zone 212 who were

58 to 63 years old, while favoring younger employees in Zone 201 who were 40 to 56

years old. In September 1999, this court decided EEOC v. McDonnell Douglas Corp.,
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191 F.3d 948, 950 (8th Cir. 1999), in which we refused to recognize disparate impact

claims under the ADEA for subgroups of workers within the protected class of persons

who are at least 40 years old. In December 1999, appellants amended their complaint

to add a disparate treatment claim. 

The district court granted UP's motion for summary judgment. The court held that

appellants' disparate impact case was foreclosed by EEOC v. McDonnell Douglas. The

court further held that appellants had failed to establish a prima facie treatment case,

reasoning that since appellants were still working at UP on the same terms and conditions,

they had not suffered an adverse employment action. The court also declined to exercise

supplemental jurisdiction over the state claim. 

Discussion

We review the district court's grant of summary judgment de novo. Spears v.

Missouri Dep't of Corr. & Human Res., 210 F.3d 850, 853 (8th Cir. 2000). "Summary

judgment is proper where the evidence, when viewed in the light most favorable to the

nonmoving party, indicates that no genuine issue of material fact exists and that the

moving party is entitled to judgment as a matter of law." Id. Appellants do not challenge

the district court's grant of summary judgment on their disparate impact claim. However,

they challenge the court's grant of summary judgment on their disparate treatment claim,

asserting they established a prima facie case. To establish a prima facie treatment case,

among other things, appellants had to show that they suffered an adverse employment

action. Breeding v. Arthur J. Gallagher & Co., 164 F.3d 1151, 1156 (8th Cir. 1999). "An

adverse employment action is a tangible change in working conditions that produces a

material employment disadvantage." Spears, 210 F.3d at 853. "Termination, reduction

in pay or benefits, and changes in employment that significantly affect an employee's

future career prospects meet this standard." Id.

Appellants concede that "none of them left [UP] as a result" of the denial of their

applications for buyouts. Bradford v. Norfolk Southern Corp., 54 F.3d 1412, 1420 (8th
2The cases held that because early retirement plans were not based on agerelated cost factors they were not entitled to the safe haven of 29 U.S.C. § 623(f)(2),

which, at the time, provided that a "bona fide employee benefit plan" was lawful unless

it was a subterfuge to evade the ADEA. The holdings were overruled by Public

Employees Ret. Sys. of Ohio v. Betts, 492 U.S. 158 (1989). However, in 1990,

Congress statutorily overruled Betts by amending § 623(f)(2) and adding § 630(l). See

Erie County Retirees Ass'n v. County of Erie, 220 F.3d 193, 203-08 (3d Cir. 2000)

(discussion of 1990 ADEA amendments). Because neither party addresses the

application of § 623(f)(2) to this case, neither do we. 

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Cir. 1995). Nor do they dispute that "they retained the same responsibilities and

compensation." Id. Rather, they argue they suffered an adverse employment action

because the denial of their applications for buyouts resulted in "a significant change in

benefits." Burlington Indus., Inc. v. Ellerth, 524 U.S. 742, 761 (1998). In the facts of

this case, we disagree. This case is similar to Britt v. E.I. DuPont de Nemours & Co.,

768 F.2d 593 (4th Cir. 1985). In Britt, to facilitate a reduction in force, the employer

instituted a voluntary severance program. The court held that a buyout under the program

was "essentially simply a wage substitute intended to compensate an employee who gives

up his [] right to work." Id. at 594. The court observed that "[n]o employee, old or

young, lost the right to work by virtue of the [voluntary] program." Id. Such is also the

case here. 

Appellants' reliance on EEOC v. Westinghouse Elec. Corp., 725 F.2d 211 (3d Cir.

1983), cert. denied, 469 U.S. 820 (1984), and EEOC v. Borden's, Inc., 724 F.2d 1390

(9th Cir. 1984), is misplaced. Those cases held that denials of severance benefits to

retirement-eligible employees violated the ADEA. Here, severance benefits were

awarded on the basis of location and seniority, not retirement eligibility. Moreover, those

cases did not address the issue in this case of whether employees who were denied

severance but retained their jobs had suffered an adverse employment action.2 As the

court in Britt explained, the cases involved plant closings, and severance pay in

connection with the closings was thought to be "a fringe benefit rather than compensation
3Appellants misunderstand the Supreme Court's decision in Reeves. In that case,

the Court held that in certain circumstances a prima facie case, combined with

sufficient evidence of pretext, may, but not necessarily, be sufficient evidence of

intentional discrimination. 530 U.S. at 148. In this case, Reeves is not implicated.

Appellants neither established a prima facie case nor set forth evidence of pretext. 

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for not working." Britt, 768 F.2d at 595. In contrast here, the buyout program was

designed "to induce employees legally entitled to continue to work to forego that

entitlement." Id. Even if the buyouts can be characterized as benefits, we do not believe

the denials caused appellants to suffer an adverse employment action. Appellants

concede that after the denials they continued to work at UP under the same terms and

conditions, with no loss of salary or benefits. See EEOC v. Sears Roebuck & Co., 883

F. Supp. 211, 214 (N.D. Ill. 1995) (employees who declined voluntary severance pay and

retained jobs under same terms and conditions had not suffered an adverse employment

action).

In any event, even if appellants had established a prima facie treatment case,

summary judgment would be appropriate. If a plaintiff establishes a prima facie case, the

burden shifts to the employer to articulate a legitimate reason for the adverse action.

Evers v. Alliant Techsystems, Inc., 241 F.3d 948, 955 (8th Cir. 2001) (citing McDonnell

Douglas Corp. v. Green, 411 U.S. 792 (1973)). If the employer satisfies its burden, the

plaintiff must set forth "evidence sufficient to raise a question of material fact as to

whether [the employer's] proffered reason was pretextual and to create a reasonable

inference that age was a determinative factor in the adverse employment decision." Id.

(internal quotation omitted). "'The ultimate question in every employment discrimination

case involving a claim of disparate treatment is whether the plaintiff was the victim of

intentional discrimination[,]'" and the plaintiff bears the burden of proof. Id. (quoting

Reeves v. Sanderson Plumbing Prods. Inc., 530 U.S. 133, 152 (2000)).3

 

Appellants put forth no evidence raising a reasonable inference that UP's reason for

denying their applications for buyouts was pretextual and that age was a determinative
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factor in the denials. Indeed, in their complaint, appellants alleged that the buyouts were

structured on the basis of zone-by-zone seniority "for union political purposes." Even if

true, the allegation would not support their disparate treatment claim. "[E]mployment

decisions motivated by factors other than age (such as salary, seniority, or retirement

eligibility), even when such factors correlate with age, do not constitute age

discrimination." McDonnell Douglas, 191 F.3d at 952. Contrary to appellants' apparent

belief, it is not unlawful for an employer to make decisions based on favoritism or "even

unsound business practices, as long as these decisions are not the result of discrimination

based on an employee's membership in a protected class." Evers, 241F.3d at 959 (internal

quotation omitted). In other words, "a claim under the ADEA must be based on age

discrimination rather than on . . . some other forms of discrimination." Bradford, 54 F.3d

at 1421. Thus, even if "things were cooked for Zone 201" because of union politics, as

appellants allege, that does not show age discrimination.

In this case, the only reasonable inference from the evidence is that appellants were

not offered buyouts "because of the locations in which they work, not because of their

ages." Trenton v. Scott Paper Co., 832 F.2d 806, 811 (3d Cir. 1987), cert. denied, 485

U.S. 1022 (1988); see also Patterson v. Indep. Sch. Dist. #709, 742 F.2d 465, 468-69 (8th

Cir. 1984) (fact that plaintiff could not take advantage of early retirement program did not

vitiate legality of program). Although in the past UP had used system-wide seniority in

awarding buyouts, the change to zone-by-zone seniority does not raise an inference that

it discriminated on the basis of age in this buyout. See Evers, 241 F.3d at 959 (employer's

change in lay-off rating process failed to raise inference of age discrimination). "'A

company's exercise of its business judgment is not a proper subject for judicial oversight.'"

Id. at 956 (quoting Regel v. K-Mart Corp., 190 F.3d 876, 880 (8th Cir. 1999)). Nor does

appellants' statistical evidence concerning the impact of the zone-by-zone seniority

approach raise an inference of intentional age discrimination. See id. at 958-59; see also

Cardenas v. AT&T Corp., 245 F.3d 994, 1000 (8th Cir. 2001) (statistics relevant to

impact claim did not support treatment claim). By appellants' own calculations, the
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average age of the employees in Zone 201receiving buyouts was 54.5 years, and only one

was under 40 years. 

 We have considered appellants' other arguments. Most relate to their failed impact

claim, and none support their treatment claim. See id. at 1001. For example, appellants

argue that options other than the zone-by-zone seniority in awarding the buyouts would

have had a less adverse impact on them. Although this argument might have been

relevant in support of their impact claim, see Evers, 241F.3d at 953-54, it does nothing

to show that UP intentionally discriminated on the basis of age in awarding the buyouts.

 Because appellants "entirely failed to meet [their] burden of showing that [they were] the

victim[s] of intentional discrimination," Cardenas, 245 F.3d at 1001, the district court did

not err in granting UP's motion for summary judgment. 

 Accordingly, we affirm the district court's judgment. 

A true copy.

Attest:

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