Opinion ID: 808697
Heading Depth: 2
Heading Rank: 2

Heading: Ostrow’s ADEA Claim

Text: Ostrow did not present evidence from which a jury could conclude that GlobeCast’s reason for not renewing his contract—restructuring its legal department to save costs—was pretext for age discrimination. Ostrow did not dispute that GlobeCast was struggling financially. GlobeCast had not been profitable for years and operated only because of shareholder support. In recent years, GlobeCast had reduced its workforce by half and consolidated offices to reduce costs. Yet, in 2008, GlobeCast’s net income was negative $15 million. GlobeCast’s parent company, GlobeCast Worldwide, tasked new CEO Justin with returning GlobeCast to profitability. Justin had previously worked at GlobeCast France and GlobeCast Europe and had most recently been the CEO of GlobeCast Asia. To fulfill his mission at GlobeCast America, Justin, among other things, redistributed responsibilities among GlobeCast’s employees and let ten employees go, including Ostrow. Justin explained that he believed GlobeCast’s legal department was overstaffed because other GlobeCast corporations did not have two attorneys in their legal departments. GlobeCast also had more active litigation cases than Justin had seen at other GlobeCast corporations. Meanwhile, 8 Case: 11-16043 Date Filed: 09/17/2012 Page: 9 of 13 Ostrow was GlobeCast’s second-highest paid employee. Based on GlobeCast’s poor results in litigation matters and a need to assist in business generation to improve the bottom line, Justin decided to shift the legal department’s focus to transactional work by reducing staff to one in-house transactional attorney and hiring outside counsel to handle litigation. Justin stated that he “expected [GlobeCast] to realize significant positive results on the open litigation matters and realize cost savings as a result of this decision.” Ostrow argues that GlobeCast’s financial reason did not make sense because GlobeCast had been losing money since 2000 and yet had renewed his two-year contract twice before. Ostrow’s argument ignores the undisputed facts that by June 2009 GlobeCast Worldwide wanted “major changes,” and tasked Justin as the new CEO with turning GlobeCast’s fortunes around. Ostrow also contends that restructuring the legal department in fact cost GlobeCast money. This argument merely quarrels with the wisdom of Justin’s restructuring decision. The inquiry is whether Justin believed in good faith (even mistakenly) that his restructuring plan would save money, not whether it in fact did so. See Alvarez, 610 F.3d at 1266. Ostrow presented no evidence that casts doubt on Justin’s stated good faith belief. By restructuring the legal department, GlobeCast would go from paying Ostrow’s $219,000 salary and Carroccia’s 9 Case: 11-16043 Date Filed: 09/17/2012 Page: 10 of 13 $155,000 salary, to paying only Carroccia’s new $178,500 salary, a savings of $195,500.5 Ostrow points to Justin’s deposition testimony admitting that he did not know how much money was spent on outside counsel after Ostrow’s departure and that the amount spent was not significant to the bottom line. These statements, which are taken out of context, do not show pretext. In context, Justin testified that GlobeCast’s most significant litigation cost was the Intelsat case, which had been handled by outside counsel even before Ostrow left, that the cost of outside counsel for the remaining, smaller cases, while not negligible, was not significant to the bottom line, but that the real cost of those smaller cases was the risk of being countersued. If anything, this testimony supports Justin’s explanation that he wanted to shift the legal department’s focus away from litigation and toward business generation. 5 Although whether, in fact, Justin’s restructuring plan saved GlobeCast money is not the relevant inquiry, the district court noted that the undisputed facts suggest that Justin’s restructuring plan did, in fact, result in a net savings during Carroccia’s first 18 months as General Counsel, as follows: Between January 1, 2010, and June 2011, GlobeCast expended approximately $100,000 to $125,000 on outside counsel for litigation-related services of the type that Ostrow had previously provided. Thus, the changes to the structure of GlobeCast’s legal deparment resulted in a net savings to GlobeCast from January 1, 2010, through June 2011 of, at the very least, $169,250 (1½ times Ostrow’s annual salary of $219,000 ($328,500), minus the total of $125,000 in outside litigation costs and 1½ times the increase in Carroccia’s salary beginning January 1, 2010 ($159,250), equals $169,250). (Citation omitted). 10 Case: 11-16043 Date Filed: 09/17/2012 Page: 11 of 13 Ostrow also failed to show the kind of pattern of older employees being replaced by younger employees that can be circumstantial evidence of a decisionmaker’s discriminatory intent. In Damon v. Fleming Supermarkets of Fla., Inc., a supermarket chain’s district manager terminated or demoted four of seven store managers within a one-year period. All four store managers were over 40 and were replaced by employees who were under 40. 196 F.3d 1354, 1361 (11th Cir. 1999). This Court concluded that a “pattern of firing or demoting so many older workers and replacing them with younger workers, by the relevant decision-maker during the same time period, constitutes probative circumstantial evidence of age discrimination.” Id. Here, Ostrow has not shown that Justin engaged in such a pattern. Beginning in June 2009, Justin (who was himself 43) let go nine other GlobeCast employees (besides Ostrow), none of whom were replaced by new hires. Two of these nine employees, former Vice President of Human Resources, Cathleen Togut, and former Vice President of Engineering and Operations, David Szelag, were in their 50s. The duties of Togut were assumed by her supervisor, Anne Phillipe, GlobeCast’s Chief Financial Officer, who was in her 30s. The duties of Szelag were divided between two employees, Gus Pu, in his mid-50s, and Brad Smith, in his late 40s. Mary Salih, a third employee in her late 40s, was also let 11 Case: 11-16043 Date Filed: 09/17/2012 Page: 12 of 13 go, but there is no evidence as to who replaced her or assumed her duties. Thus, the record establishes that only two employees Justin let go during his restructuring—Togut and Ostrow—had their duties assumed by someone under 40. Moreover, the assumption of Togut and Szelag’s duties by GlobeCast’s remaining employees was consistent with Justin’s stated desire to reduce staff to cut costs. And, unlike in Damon, there was no evidence that Justin ever made any comments regarding age during this time frame. Cf. id. at 1358-59 (stating that the decisionmaker wanted “aggressive, young men” to be promoted). Ostrow points to other former GlobeCast employees who left GlobeCast between 2006 and 2008, but these employees were terminated by GlobeCast Worldwide’s Chairman and CEO, Christian Pinion, not by Justin during his restructuring. Given that Ostrow did not show evidence of one decisionmaker in one time period replacing many older workers with younger workers, we cannot say he showed the kind of a firing and hiring pattern found in Damon that is probative circumstantial evidence of age discrimination. Based on the above, Ostrow has not shown that GlobeCast’s proffered financial reason for not renewing his contract was pretext for age discrimination and has not shown that his age was the “but-for” cause of the decision not to 12 Case: 11-16043 Date Filed: 09/17/2012 Page: 13 of 13 renew his contract. For these reasons, we affirm the magistrate judge’s order granting summary judgment to GlobeCast. AFFIRMED. 13