Opinion ID: 748193
Heading Depth: 3
Heading Rank: 2

Heading: Proving Age Discrimination by the Burden-Shifting Approach

Text: 27 Since Chiaramonte cannot defeat the summary judgment motion on the strength of the proffered direct evidence, he must establish a genuine issue of material fact under the burden-shifting approach. In order to prevail under the burden-shifting approach, a plaintiff must initially establish a prima facie case of discrimination. [T]he prima facie case requires 'evidence adequate to create an inference that an employment decision was based on a[n] [illegal] discriminatory criterion....'  O'Connor, 517 U.S. at ----, 116 S.Ct. at 1310 (quoting Teamsters v. United States, 431 U.S. 324, 358, 97 S.Ct. 1843, 1866, 52 L.Ed.2d 396 (1977) (emphasis in O'Connor removed)). To establish such a case under the ADEA, Chiaramonte must show (1) he was in the protected age group of 40 or older, (2) he was performing his job satisfactorily, (3) he was discharged, and (4) substantially younger, similarly-situated employees were treated more favorably. 3 See id. at ----, 116 S.Ct. at 1310; Maier v. Lucent Technologies, 120 F.3d 730, 734 (7th Cir.1997); Denisi v. Dominick's Finer Foods, Inc., 99 F.3d 860, 864 (7th Cir.1996). 28 A successful prima facie showing creates a presumption of discrimination that obligates the employer to produce a legitimate non-discriminatory reason for its decision. See Anderson v. Baxter Healthcare Corp., 13 F.3d 1120, 1122 (7th Cir.1994). Production of this legitimate nondiscriminatory reason rebuts this presumption of discrimination, see Loyd v. Phillips Bros., Inc., 25 F.3d 518, 522 (7th Cir.1994), shifting the burden back to the employee to show that the employer's stated reasons for its action are pretextual. See Denisi, 99 F.3d at 864. 29 A plaintiff can establish pretext by showing either that a discriminatory reason more likely motivated the employer or that the employer's explanation is unworthy of credence. See Sarsha v. Sears, Roebuck & Co., 3 F.3d 1035, 1039 (7th Cir.1993). Where defendants have proffered more than one reason for the dismissal, plaintiff must address all the reasons suggested by the defendants. See Wolf v. Buss America, Inc., 77 F.3d 914, 923 (7th Cir.1996), cert. denied --- U.S. ----, 117 S.Ct. 175, 136 L.Ed.2d 116 (1996). 30 Despite these shifting burdens of production, [t]he ultimate burden of persuading the trier of fact that the defendant intentionally discriminated against the plaintiff remains at all times with the plaintiff. Saint Mary's Honor Ctr. v. Hicks, 509 U.S. 502, 507, 113 S.Ct. 2742, 2747, 125 L.Ed.2d 407 (1993) (quoting Texas Dep't of Community Affairs v. Burdine, 450 U.S. 248, 253, 101 S.Ct. 1089, 1093, 67 L.Ed.2d 207 (1981)). If the plaintiff is unable to meet this burden, his claim fails. See Sarsha, 3 F.3d at 1039. 31 The parties agree that Chiaramonte satisfies the first three requirements of the prima facie case. However, the parties present conflicting evidence regarding the fourth prong: whether a substantially younger, similarly-situated employee was treated more favorably. We need not resolve this dispute because we can decide this case on other issues. See EEOC v. Our Lady of the Resurrection Med. Ctr., 77 F.3d 145, 149 (7th Cir.1996) ([T]his court may advance to an ultimate issue in a summary judgment analysis and consider the discrimination question notwithstanding a dispute over a fact necessary for a prima facie case.); see also United States Postal Serv. Bd. of Governors v. Aikens, 460 U.S. 711, 715, 103 S.Ct. 1478, 1482, 75 L.Ed.2d 403 (1983) (Where the defendant has done everything that would be required of him if the plaintiff had properly made out a prima facie case, whether the plaintiff really did so is no longer relevant.); Jayasinghe v. Bethlehem Steel Corp., 760 F.2d 132, 135 (7th Cir.1985) ([T]he prima facie threshold is no longer a relevant issue once the defendant has come forward with evidence of legitimate reasons for its actions that would rebut a prima facie showing of discrimination.). Because we find that FBG has met its burden of articulating legitimate reasons for the discharge, we will proceed directly to whether Chiaramonte has presented evidence sufficient to create a genuine issue of material fact with regard to pretext. 32 FBG presented two legitimate, non-discriminatory reasons for Chiaramonte's termination: (1) FBG's need to reduce operating costs, and (2) the fact that Chiaramonte's job was not essential to FBG's continued operations. See Baxter Healthcare Corp., 13 F.3d at 1125-26 (Employer does not violate ADEA by terminating employees to reduce salary costs.). As noted above, the mere production of these reasons shifts the burden to Chiaramonte to prove that the stated reasons are simply pretext for age discrimination. 33 In assessing whether Chiaramonte has met his burden of showing pretext, this Court must consider the presumption of non-discrimination that arises from the facts of this case. We have previously held that when an employee is hired and fired by the same decision-maker in a relatively short time span, a presumption, or inference, of nondiscrimination arises. See Our Lady of the Resurrection Med. Ctr., 77 F.3d at 152 (strong presumption of nondiscrimination where plaintiff hired and fired by same person in span of ten months); Rand v. CF Indus. Inc., 42 F.3d 1139, 1147 (7th Cir.1994) (finding inference of nondiscrimination where plaintiff was hired while in the protected class, and fired by the same person who hired him after a relatively short period of time); see also Proud v. Stone, 945 F.2d 796, 797 (4th Cir.1991) ([I]n cases where the hirer and the firer are the same individual and the termination of employment occurs within a relatively short time span following the hiring, a strong inference exists that discrimination was not a determining factor for the adverse action taken by an employer.). 34 Elting hired Chiaramonte in 1985, when Chiaramonte was 52 years old and in the protected class. In 1991, L & P merged three subsidiaries, Berkshire, Dresher, and Ross, into a single entity: FBG. Following the mergers, FBG integrated the workforces of the three subsidiaries. Elting chose to retain Chiaramonte and appointed him Vice President of Engineering, while electing not to retain Chiaramonte's Dresher counterpart. Chiaramonte was 57 at that time. Less than two years later, Elting terminated Chiaramonte citing financial reasons. 35 Chiaramonte disputes the characterization of his retention after the merger, claiming that this was not an affirmative act on Elting's part because his Dresher counterpart resigned after the merger and did not seek employment with FBG. Additionally, Chiaramonte claims that Elting did not consider any other candidates for the position of Vice President of Engineering. First, we note that Elting testified that he chose Chiaramonte because he felt Nick was superior to the gentleman that was in the Dresher position. Thus it is not clear that Elting did not consider other candidates for the position, and there is no evidence suggesting that Elting was under an obligation to retain Chiaramonte. Second, Chiaramonte may only speculate about the reason his Dresher counterpart did not affirmatively seek employment with FBG. It is possible that the Dresher employee saw the writing on the wall, knew that Elting felt Chiaramonte was a superior employee, and chose not to seek employment with FBG for that reason. In short, Chiaramonte has not given us sufficient reason to doubt that Elting affirmatively chose to retain Chiaramonte in 1991, just two years prior to his termination. 36 While Chiaramonte was first hired almost seven years prior to his termination, we find that Elting's affirmative act of retaining him after the merger suffices for the purposes of the presumption. See Ragland v. Rock-Tenn Co., 955 F.Supp. 1009, 1022-23 (N.D.Ill.1997). It is highly doubtful that a person who hires an employee in the protected age group, and chooses to retain that employee after a merger, would fire that same employee less than two years after the retention as a result of a sudden aversion to older people. Lowe v. J.B. Hunt Transp., Inc., 963 F.2d 173, 175 (8th Cir.1992). Therefore, this Court will consider the presumption of non-discrimination in evaluating Chiaramonte's argument that FBG's proffered reasons for his termination are pretextual. 37 FBG contends that its precarious financial situation justified Chiaramonte's termination. 4 In 1991, FBG expected to earn $3.6 million but lost $6.6. million. FBG maintains that this loss precipitated the layoffs in 1992, when Chiaramonte was terminated. At the time he was terminated, Chiaramonte was salaried at $73,000 per year. FBG asserts that the personnel reductions in early 1992 (which included Chiaramonte as well as eleven other employees) saved FBG $750,000 in salary costs alone. 38 Chiaramonte first argues that an ambiguity exists over the actual losses sustained by the company that must be resolved by a jury. As evidence of this ambiguity, Chiaramonte points to a conflict between two affidavits, one which lists the losses as operating losses, while the other lists the losses as actual losses. We are not persuaded by this argument. First, as pointed out by the district court, the first affidavit, which described the losses as actual losses, was unsigned and unsworn, and therefore not part of the record. See Sellers v. Henman, 41 F.3d 1100, 1101 (7th Cir.1994). Thus there is no ambiguity; there is only one affidavit in the record. Second, even if the affidavit was part of the record below, we see no material issue that must be resolved by a jury. Whether the affidavit used the term actual losses, or the more specific accounting term operating losses is of no moment; both describe $6.6 million in losses, which is a far cry from the $3.6 million FBG expected to earn in 1991. 39 Chiaramonte then attempts to establish that the cost justification is pretext by showing that the terminations did not really save FBG much money. Additionally, Chiaramonte argues that the fact FBG retained management consultants at a cost of $1.5 million in the same month it terminated Chiaramonte for cost-savings shows that the cost justification was pretextual. 40 This Court has established that it does not sit as a super-personnel department that reexamines an entity's business decisions. Dale v. Chicago Tribune Co., 797 F.2d 458, 464 (7th Cir.1986). Instead, our task is to determine whether the employer gave an honest explanation of its behavior. Pollard v. Rea Magnet Wire Co., 824 F.2d 557, 560 (7th Cir.1987). 41 We first note that Chiaramonte himself confirmed FBG's dire financial situation in 1991. According to Chiaramonte, FBG was dying financially because it had too many people, too much product, too much everything. In fact, Chiaramonte admits that FBG needed to downsize because it had two people in every slot. Chiaramonte's assault on the financial justification accordingly does not focus on the 1991 time period, but instead focuses on events that occurred at FBG after his termination. Specifically, Chiaramonte argues that the pay increases given to Cummins, as well as the salaries of two workers hired in February 1993 5 resulted in a $114,000 expenditure to achieve the same work Chiaramonte did for $73,000. We agree with the district court's analysis on this point. Chiaramonte cannot rely on events that occurred after his layoff to dispute that at the time of his termination cost was an appropriate justification. Indeed, as the district court noted, [i]f the court were to accept Chiaramonte's argument, it would in effect have to hold that an inference of discrimination forms when a company that, at one time, was forced to 'downsize' for financial reasons, subsequently hires additional employees and gives salary raises to employees it chose not to terminate. Chiaramonte v. Fashion Bed Group, Inc., 932 F.Supp. 1080, 1092 n. 5 (N.D.Ill.1996). 42 Chiaramonte also attempts to establish pretext by noting that FBG hired management consultants, at a considerable cost, in the same month that it terminated Chiaramonte. This is the kind of business decision that is best left to management, without second-guessing by the judiciary. That FBG tried to improve its situation by employing management consultants does not undermine the contention that FBG was dying financially. A contrary decision by this Court would create a presumption of discrimination whenever a company expended resources in an attempt to increase profitability in a time of financial hardship. We decline to take such a step. FBG's management has the discretion to determine how and where to achieve necessary cost savings; our job is simply to ensure that the decisions management made did not turn on prohibited grounds. Based on the foregoing, we find that Chiaramonte has not presented sufficient evidence to create a genuine issue of material fact regarding FBG's claim of financial hardship. 43 Although we find that there is no genuine issue of material fact regarding FBG's financial situation, Chiaramonte may still prove pretext by showing that the proffered reasons did not actually motivate his discharge. See Cliff v. Board of Sch. Comm'rs, 42 F.3d 403, 412 (7th Cir.1994). Chiaramonte relies on three pieces of evidence to establish this: (1) alleged inconsistency between Elting's testimony before the Illinois Department of Human Rights (IDHR) and his deposition testimony, (2) Singer's alleged statement to Chiaramonte after Chiaramonte informed him of the termination, and (3) Lunn's alleged statement. 44 During the IDHR fact finding conference, Elting gave the following reasons for Chiaramonte's termination: Chiaramonte was unable to crawl through the dirt while rebuilding the company, there were cultural differences in the organization, and Chiaramonte did not possess team synergy. First, Chiaramonte argues that these are comments on his age. Second, he claims that Elting's failure to cite financial reasons for the discharge shows that the cost-savings justification Elting articulated in his deposition testimony is pretextual. We do not agree with either of Chiaramonte's assertions. 45 First, these statements are a far cry from the kind of statements we have found to be probative of age discrimination. See, e.g., McNeil v. Economics Laboratory, Inc., 800 F.2d 111, 115 n. 3 (7th Cir.1986) (references to over-paid and under-motivated veterans, the company's plan to replace oldtimers with bright young people fresh out of college, and statement that old pros were just old, support inference of age discrimination), overruled in part on other grounds by Coston v. Plitt Theatres, Inc., 860 F.2d 834 (7th Cir.1988). Elting's statements are more similar to the statements in Mills v. First Federal Savings & Loan Assoc., 83 F.3d 833 (7th Cir.1996), that we found were not sufficient to support a claim of age discrimination. In Mills, the plaintiff was told that management was out to get rid of [her] because there was the concern that [she] may not be able to keep up with the [accounting] regulations. Id. at 841. While the plaintiff in Mills took this to mean it was because of [her] age, id., we emphasized that a plaintiff's subjective interpretation of her employer's statements is not controlling. [I]f the subjective beliefs of plaintiffs in employment discrimination cases could, by themselves, create genuine issues of material fact, then virtually all defense motions for summary judgment in such cases would be doomed. Id. at 841-42 (citing Visser v. Packer Eng'g Assocs., 924 F.2d 655, 659 (7th Cir.1991)). The instant facts are parallel. Even though Chiaramonte believes that Elting's comments are age-related, his interpretation is not controlling. We find that Elting's statements before the IDHR do not evidence age animus, and in fact are consistent with Elting's decision to retain the nuts and bolts, the people who were responsible to get detail done. 46 We also note that Elting's deposition testimony is entirely consistent with the statement he gave to the IDHR. Elting testified that in making the determinations regarding terminations, he looked at salary level, value to FBG, and performance. Whether an employee would be willing to crawl through the dirt or work with a team are factors that affect an employee's value to FBG. After determining that Chiaramonte did not possess these qualities, Elting concluded that his contribution to FBG was incommensurate with his salary, and therefore he was eligible for termination. That the need for any terminations was prompted by financial concerns does not make the justifications as to why this particular employee was terminated inconsistent with that concern. Thus, Elting could consistently state that financial concerns prompted the terminations, but it was Chiaramonte's lack of team synergy, his unwillingness to crawl through the dirt, and his incompatibility with firm culture that made him a strong candidate for termination. As such, we find no merit in Chiaramonte's contention that an alleged inconsistency between Elting's statements before the IDHR and his trial testimony supports an inference that FBG's reasons for his termination were pretextual. 47 With regard to Chiaramonte's second and third pieces of evidence to show pretext, they are similarly unpersuasive. Chiaramonte argues that Singer's and Lunn's alleged statements create a genuine issue of material fact in regard to the question of pretext. In discussing Chiaramonte's direct case, we found these statements were not probative of discrimination. Under the same reasoning, we now find they are also insufficient to create a material issue on the question of pretext. Singer was not a decision-maker and was clearly speculating as to the reasons Elting terminated Chiaramonte. As such, his statement that Age had to be a factor ... but I don't know does not create an issue that requires a trial. Lunn's alleged statement also does not create a material issue; as a lower-level employee she had no control over the termination decision. The fact that she socialized with Elting, among others, does not suggest that she was in such a place of trust and confidence that she would be privy to Elting's motives. Thus the Singer and Lunn statements do not create a material issue on the question of pretext. 48 We find, therefore, after a review of all the evidence, that Chiaramonte has failed to establish a genuine issue of material fact as to whether FBG's proffered reasons for his dismissal were pretextual. This is particularly true in light of the presumption of non-discrimination created by the facts of this case. However, before we may affirm the district court's grant of summary judgment, we must examine plaintiff's final argument. 49