Court Opinion

ID: 3018289
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:18:57.517308+00
Date Added: 2024-06-11T12:46:32.336053
License: Public Domain

United States Court of Appeals
                            FOR THE EIGHTH CIRCUIT

                                   ___________

                                   No. 96-1590
                                   ___________

Richard J. Reynolds,                   *
                                       *
           Plaintiff - Appellant,*
                                       *     Appeal from the United States
     v.                                *     District Court for the District
                                       *     of South Dakota.
Land O’Lakes, Inc.,                    *
                                       *
           Defendant - Appellee. *
                               ___________

                      Submitted:   October 22, 1996

                          Filed:    April 25, 1997
                                   ___________

Before RICHARD S. ARNOLD, Chief Judge, FLOYD R. GIBSON and McMILLIAN,
     Circuit Judges.
                             ___________

FLOYD R. GIBSON, Circuit Judge.

     Appellant Richard J. Reynolds sued his employer, Land O’Lakes, Inc.
(LOL), for an alleged violation of the Age Discrimination in Employment Act
(ADEA), 29 U.S.C. §§ 621-634 (1994).         Reynolds also brought a state law
deceit claim against LOL.   See S.D. Codified Laws § 20-10-1 (Michie 1995).
On February 2, 1996, the district court1 granted LOL’s motion for summary
judgment adducing that Reynolds failed to present a prima facie case of
either age discrimination or deceit.       Reynolds appeals the district court’s

     1
      The HONORABLE JOHN B. JONES, Senior United States District
Judge for the District of South Dakota.
grant of summary judgment.       Because we determine that Reynolds failed to
establish a claim for either age discrimination or deceit, we affirm the
district court’s decision.

I.   BACKGROUND

     LOL     is   a   an    agricultural   supply    and    marketing       cooperative
incorporated in the state of Minnesota.       As a farmer owned cooperative, LOL
sells dairy goods produced from milk its farmer members supply.                  Within
LOL’s dairy foods business there are several divisions, one of which is the
procurement division.       Reynolds began working for LOL in 1983, and from
October    1985   through   January   1994,   he   worked   as   a   milk    production
specialist (MPS) in the procurement division’s Western region.                   An MPS
serves as the primary direct contact between the dairy producer and LOL.
MPS’s procure milk for the cooperative and provide milk producers with a
variety of services to enhance milk production and milk quality.

     During the late 1980's and early 1990's, the procurement division
experienced a continual decline in the number of milk producers in the
Midwest, while the cost of doing business steadily increased.               For example,
when Reynolds began working as an MPS in 1985, he called on 185 to 200 milk
producers, and eleven other MPS’s worked in the Western region.                By 1993,
Reynolds served only 85 to 100 milk producers, and only eight additional
MPS’s remained in his region.         In approximately 1990, the Roger Rudolph
Marketing Firm conducted a survey of LOL’s business practices and developed
an “ideal producer target” which highlighted specific qualities MPS’s
should look for when attempting to obtain business from dairy farmers.               By
targeting the “ideal producer,” LOL intended to attract producers who would
remain in the dairy production business

                                        -2-
for a substantial period of time.       The “ideal producer,” according to the
Rudolph survey, is forty-four years of age or younger, a production
manager, has more than one hundred cows, and produces more than one million
pounds of milk per year.

     In 1993, LOL determined that the procurement division needed to
reduce costs.     The regional managers, including Jeff Johnson, Harlan
Heidebrink, and Ray Cherry, together with Don Berg, the vice president of
membership and procurement, decided that a reduction in force (RIF) would
be the most effective method of reducing costs.             The management group
considered   various    criteria   to   apply   in   determining   which   MPS’s   to
terminate, but concluded that eliminating the least senior MPS in each of
the Western, Northwestern, and Dalbo regions, and the two least senior
MPS’s in the Southeastern region, would be the most equitable method of
implementing the RIF.    The number of positions to be eliminated was based
on geography, milk volume, and producer numbers.           LOL’s legal and human
resource departments approved the planned RIF.
     On October 13, 1993, LOL announced the planned reduction to the MPS
staff.   LOL solicited volunteers, but because no one accepted the voluntary
severance package, management carried through with the RIF as planned.
Management notified the terminated employees on October 22, 1993 of the
impending terminations and severance packages.2          Reynolds was the least

     2
      The severance package allowed terminated employees to remain
on full-time active status for twelve weeks from the date of
severance (October 22, 1993, through January 14, 1994). Management
allowed 60% of terminated employees’ time to be dedicated to
searching for new jobs. Pay and insurance coverage would continue
for ten weeks after January 14, 1994, and terminated employees
could elect to continue insurance coverage for up to eighteen
months if they were willing to pay the premiums. LOL also agreed
to pay terminated employees for 100% of their accrued personal flex
time (five weeks for Reynolds).

                                        -3-
senior MPS in the Western region and was therefore eliminated in the RIF.
Three of the five MPS’s eliminated were under forty years of age.         At
forty-five, Reynolds was the oldest MPS terminated in the RIF.

       LOL has a policy of awarding a hiring preference to employees who are
terminated in a RIF.     Terminated employees have access to a posting board
which lists current available positions within the company.         However,
employees terminated in a RIF may not simply “transfer” to another
position.   They must go through the application process to be eligible for
the rehire preference.    Ray Cherry notified Reynolds of available temporary
assignments in Poland and Cottonwood, Minnesota; Scott Gottschalk also
informed Reynolds of the Cottonwood assignment.   Reynolds did not apply for
either position.    Reynolds applied for one position with LOL after his
termination, but that space was filled by a part-time LOL employee who was
apparently more qualified for the position.       Immediately following his
termination, Reynolds began searching for positions within and outside of
LOL.

       Reynolds commenced a civil action against LOL on March 20, 1995,
alleging age discrimination in violation of the ADEA, see 29 U.S.C. §§
621-634, and deceit in violation of S.D. Codified Laws § 20-10-1.        LOL
filed a motion for summary judgment on December 18, 1995.     On February 2,
1996, the district court granted LOL’s motion for summary judgment,
concluding that Reynolds failed to establish a prima facie case of either
age discrimination or deceit.

II.    DISCUSSION
       We review a grant of summary judgement de novo.     See Aucutt v. Six
Flags Over Mid-America, Inc., 85 F.3d 1311, 1315 (8th Cir.

                                      -4-
1996).     We must determine, after viewing the record in the light most
favorable to the nonmoving party, whether there is a genuine issue as to
any material fact.        See id.   If there is not, “[t]he moving party is
‘entitled to a judgment as a matter of law.’”             Celotex Corp. v. Catrett,
477 U.S. 317, 323 (1986) (quoting Fed. R. Civ. P. 56(c)); accord Aucutt,
85 F.3d at 1315.

      A.     ADEA claim

      The Title VII burden-shifting analysis set forth in McDonnell Douglas
Corp. v. Green, 411 U.S. 792, 802-04 (1973), and refined in Texas Dep’t.
of   Community   Affairs    v.   Burdine,    450 U.S. 248   (1981),   applies    to
discrimination cases brought under the ADEA.              See Holley v. Sanyo Mfg.,
Inc., 771 F.2d 1161, 1164 (8th Cir. 1985).            Under the McDonnell Douglas
analysis, the plaintiff must first establish a prima facie case.                    See
McDonnell Douglas, 411 U.S. at 802; Hutson v. McDonnell Douglas Corp., 63
F.3d 771, 776 (8th Cir. 1995).              To establish a prima facie case, a
plaintiff must show: (1) he is within the protected age group; (2) he met
the applicable job qualifications; and (3) he was discharged.             See Hutson,
63 F.3d at 776.       A RIF plaintiff must also “provide some ‘additional
showing’ that age was a factor in the termination.”             Id. (quoting Holley,
771 F.2d at 1165.).    Once the plaintiff has established a prima facie case,
the burden of production shifts to the defendant to show a legitimate,
nondiscriminatory reason for terminating the plaintiff.           Burdine, 450 U.S.
at 255.    The burden then shifts back to the plaintiff to establish that the
employer’s proffered reason is merely a pretext for discrimination.
Hutson, 63 F.3d at 777.      At all times, the plaintiff bears the burden of
persuading the trier of fact that intentional discrimination occurred.              Id.

                                        -5-
       The district court granted summary judgment in favor of LOL because
it determined that Reynolds failed to provide “additional evidence” that
age was a factor in his termination.       For the purpose of this appeal, we
will assume that Reynolds has made the required “additional showing” that
age was a factor in his termination.       However, we affirm the decision of
the district court because even if Reynolds presented a prima facie case
of age discrimination, he failed to establish that LOL’s RIF was a mere
pretext for discrimination.

       Reynolds raises several factual issues which he claims sufficiently
establish that the RIF was a pretext for age discrimination.          First,
Reynolds asserts that inconsistent explanations of the manner in which the
RIF was to be implemented show a discriminatory animus toward Reynolds.
Specifically, he asserts management decided to implement the RIF by
geographic region at the last minute as a way to include Reynolds in the
RIF.       LOL eliminated five MPS positions:   one in each of the Western,
Northwestern, and Dalbo regions and two in the Southeastern region.
Reynolds points out that Don Berg stated in his deposition that to
orchestrate the RIF, management would “just go to the date of hire.
. . . It’s just looking up dates.”         Reynolds reasons that if the vice
president of procurement was unaware that MPS’s were to be eliminated by
region, the locational consideration must have been added at the eleventh
hour to include Reynolds in the group to be terminated.3    However, Reynolds
fails to acknowledge the portion of Berg’s deposition where he specifically
mentioned the necessity of considering regions in the RIF:

       3
      If LOL had considered the date of hire only in determining
which MPS’s to eliminate, Reynolds would not have been terminated
in the RIF.

                                     -6-
     We were experiencing a continual decline in milk volume, a
     continual decline in producer numbers and the first realization
     was that the declines in our business [were] very different by
     geographical region. . . . [T]he position we took is that we
     needed to remove or have a work force reduction that was
     geographically sensitive that would have a positive impact of
     removing unnecessary costs from our system. So we embarked on
     a program in 1993 in which we identified how much resource
     needed to be deployed from each region and announced by letter
     that those who wished to consider a voluntary layoff could come
     forth and if the numbers weren’t hit we would have to go to a
     mandated layoff.

Berg Dep. at 22-23 (emphasis added).        Berg recognized at the outset that
the RIF would be implemented by region.

     Reynolds   asserts   that   pretext    is   especially   pronounced   because
management failed to inform the MPS’s that geography was one of the factors
to be considered in the RIF.     In fact, Reynolds claims that “a memo dated
October 13, 1993 was provided to the MPS’s setting forth the terms of the
RIF without regard to geographical location.”            Reynolds’s Br. at 34
(emphasis omitted).   First, we note that seniority, see Bright v. Standard
Register Co., 66 F.3d 171, 173 (8th Cir. 1995) (per curiam), and geography,
see Smith v. Goodyear Tire & Rubber Co., 895 F.2d 467, 471-72 (8th Cir.
1990), are legitimate factors for businesses to consider when determining
the manner in which to execute a RIF.       We also feel compelled to point out
that appellant blatantly misstates the record on this issue.         The October
13, 1993 memorandum from Ray Cherry specifically notified the MPS staff
that the RIF would be geographically sensitive:
     To adequately meet the needs of our Dairy Foods system we have
     determined that a reduction of Milk Production Specialists must
     take place within the following areas:

           *     Southeast Minnesota - 2 MPS positions
           *     Western - 1 MPS position

                                      -7-
              *      Northwest Area - 1 MPS position
              *      Dalbo - 1 MPS position

Appellee’s App. at Tab 6.         We do not know how Cherry could have more
clearly stated that geographic regions would be considered in the RIF.               We
conclude     that LOL did not proffer geography as a mere pretext for
discrimination.4      LOL’s consideration of seniority5 and geography as a
means to determine which MPS’s to eliminate in the RIF were business
decisions which we will not second guess.             See Goodyear, 895 F.2d at 472.

     In    previous    years,   LOL    had    offered    voluntary   early   retirement
packages to interested and eligible employees.            At forty-five, Reynolds was
the second oldest MPS at LOL.         Reynolds essentially argues that because he
was not yet eligible for early retirement, LOL chose the most convenient
way to eliminate him as part of a plan to flush older MPS’s from the
workforce.    However, an employer’s offer of voluntary “early retirement to
other protected employees does not violate the ADEA and does not support
an inference of age discrimination.”               Serben v. Inter-City Mfg. Co., 36
F.3d 765, 766 (8th Cir. 1994) (per curiam) (citing Gray v. New England Tel.
& Tel. Co., 792 F.2d 251, 255 (1st Cir. 1986)), cert. denied, 115 S. Ct.
1402 (1995).      Therefore, LOL’s previous offers of early retirement do not
establish that the RIF was a pretext for discrimination.

     4
      Reynolds also asserts that LOL’s pretextual motive is evident
because the regions considered in the RIF were eliminated following
the RIF. However, the record indicates that regions were renamed
and adjusted following the RIF rather than eliminated.        MPS’s
continue to work within specific regions.
     5
      Reynolds argues that because LOL did not have a bona fide
seniority system in place, see 29 U.S.C. § 623(f)(2)(A) (1994), it
violated the terms of the ADEA.      However, section 623(f)(2)(A)
applies only when an employer seeks to establish the existence of
a bona fide seniority system to otherwise avoid liability under the
ADEA. See id. LOL does not claim to have a bona fide seniority
system in place. It merely implemented the RIF in question using
years of service as one neutral, nondiscriminatory factor in
determining which employees to eliminate. See Bright, 66 F.3d at
173.

                                             -8-
     In 1990, LOL implemented a marketing plan to attract milk producers
who were likely to remain in the milk production industry for a substantial
period of time.    The “ideal producer” is forty-four years of age or
younger, a production manager, has more than one hundred cows, and produces
more than one million pounds of milk per year.    Reynolds conceded at oral
argument that marketing a product or business to a particular age group is
acceptable and commonly practiced.       However, Reynolds asserts that by
targeting younger producers, LOL created an age sensitive environment,
where older age was considered a negative characteristic.       For example,
MPS’s referred to milk producers who were likely to remain in the business
for a long period of time as “survivors,” while milk producers who were not
likely to persevere were referred to as “nonsurvivors.”    Reynolds contends
that the negative attitude toward older milk producers seeped into the work
environment and became directed toward older MPS’s.   Therefore, the RIF was
merely a pretext for discriminatorily ousting Reynolds, the second oldest
employee, from the workforce.   We disagree.    First, the terms “survivor”
and “nonsurvivor” were slang terms developed by the MPS’s, not management.
Second, there is no evidence that LOL management believed that MPS’s had
to fall within the age range of the “ideal producer” to be able to attract
the “ideal producer.”   The record does not indicate that LOL’s marketing
plan played any role at all in determining which MPS’s to terminate.
     Reynolds asserts that Don Berg and Ray Cherry referred to him as an
“old fart” two or three times over a nine-year period.    Reynolds also heard
Berg and Cherry refer to other workers as “old

                                   -9-
farts” on several occasions over the same nine-year period.                      Reynolds
contends that these remarks are sufficient to establish pretext.                         In
Hutson, we stated that at the pretext stage of the McDonnell Douglas
burden-shifting       analysis   “some    causal      relationship      is   necessary   to
demonstrate     the    significance      of    non-contemporaneous       statements,     or
statements made by persons other than the relevant decision-maker, to the
resolution of the ultimate issue of intentional discrimination.”                    Hutson,
63 F.3d at 779 (emphasis in original).                  Berg and Cherry referred to
Reynolds as an “old fart” two to three times over a nine-year period.                  Even
viewing the record in the light most favorable to Reynolds, we have no
reason to believe any of those references were made contemporaneously to
the decision to reduce staff.       As for the statements directed toward other
employees, Reynolds stated in his deposition that he could not remember who
the statements were directed to, where they were made, or how many times
Cherry or Berg referred to other employees in such a manner.                 Reynolds has
failed to establish a causal relationship between those statements and his
termination.     Because these statements were stale and unrelated to the
decision-making process, we conclude that they were “stray remarks,”
insufficient to establish pretext.             See Aucutt, 85 F.3d at 1315-16.
     Reynolds further contends that LOL’s failure to rehire him in
accordance with company policy establishes pretext.              Reynolds asserts that
LOL “transferred” other MPS’s eliminated in the RIF to other positions
within   the company but did not afford Reynolds the same treatment.
However,   it   is    undisputed   that       LOL’s   rehire   policy    requires    former
employees to actually apply for other positions within the company to be
eligible for the rehire preference.              MPS’s who moved to other positions
within the company applied for those positions.            Reynolds only applied for
one position at LOL following his termination.            He applied for a case dock
worker position at

                                          -10-
LOL’s Sioux Falls Plant.            LOL hired David Hoop to fill the opening.                  Hoop
had    fifteen years of experience with a dairy in Phoenix performing
essentially the same duties as a case dock worker.                           At the time he was
hired,     Hoop was employed as a part-time case dock worker for LOL.
Reynolds, on the other hand, did not have experience performing the duties
required of a case dock worker.                This was the only position Reynolds
applied for at LOL after he was transferred.

       Ray     Cherry    informed      Reynolds      of     two       open   positions,   one    in
Cottonwood, Minnesota and one in Poland.                  Reynolds did not apply for either
position.      LOL retained Reynolds as an MPS from the date he was notified
of his termination, October 22, 1993, until January 14, 1994.                       During that
twelve-week time period, LOL allowed and encouraged Reynolds to spend 60%
of his on-the-job hours searching for employment opportunities.                           During
that time period, Reynolds also had free access to the LOL posting board
on which available positions were listed.                  Overall, the evidence does not
establish that LOL failed to rehire Reynolds because of a discriminatory
motive.      Rather, it suggests that LOL did not rehire Reynolds because he
did not exert sufficient efforts to gain reemployment with the company.

       Reynolds contends that Harlan Heidebrink, a procurement manager at
LOL,    told    him    that   age    “might   have    been        a   playing   factor”   in    his
termination.6         Heidebrink did not give a deposition

       6
      Reynolds also asserts that Tim Raasch and Jamie Kulesa told
him age may have been a factor in his termination.         However,
Reynolds acknowledges that these statements are merely opinions and
neither Raasch nor Kulesa was a decision-maker in his termination.
Such opinions by nondecision-makers are insufficient to establish
pretext. Furthermore, in his deposition, Raasch stated that he
believed the terminations were based on seniority and did not
mention the possibility that Reynolds’s age could have been a
factor.

                                              -11-
in this case.         However, most of the other decision-makers, including
Cherry, Berg, Steve Sneer, and Jeff Johnson, stated in their depositions
that within the separate regions, years of service with the company was the
only    factor    considered.       We   first      note   that    Reynolds’s   report   of
Heidebrink’s statement appears to be an inadmissible hearsay statement,
which    standing     alone,   “may   not     defeat   a   summary    judgment    motion.”
Fireman’s Fund Ins. Co. v. Thien, 8 F.3d 1307, 1310 (8th Cir. 1993).
Combined      with   the   other   evidence    in    the   case,   Heidebrink’s    alleged
statement is not sufficient to establish pretext and overcome LOL’s motion
for summary judgment.

        Reynolds’s evidence viewed cumulatively, does not establish that
LOL’s RIF was a mere pretext for discrimination.                      Of the five MPS’s
terminated in the RIF, three were under the age of forty, and Reynolds, at
forty-five years of age, was the oldest.             LOL implemented a legitimate RIF
and considered only neutral, nondiscriminatory criteria in determining
which MPS’s to eliminate.          Reynolds failed to present a genuine issue of
material fact regarding pretext.          Therefore, the district court correctly
granted LOL’s motion for summary judgment.

        B.     Deceit Claim
        Reynolds claims that LOL deceived him in violation of S.D. Codified
Laws § 20-10-1.       Section 20-10-1 states that one is liable for deceit if
he “willfully deceives another, with intent to induce him to alter his
position to his injury or risk.”              S.D. Codified Laws § 20-10-1 (Michie
1995).       Reynolds asserts that he was deceived by LOL management because
they failed to inform him of available positions within the company.
Because an employment

                                            -12-
relationship was clearly established, section 20-10-1 required LOL to
reveal facts to Reynolds which it was “bound to disclose.”                      Moss v.
Guttormson, 551 N.W.2d 14, 16 (S.D. 1996). Reynolds claims to have asked
several LOL managers about possible job openings within the company.                  On
most occasions, the managers simply responded that they were not aware of
any available positions. Reynolds claims that the managers intentionally
deceived him by failing to inform him of employment opportunities as
required under LOL’s rehire policy.            However, the rehire preference did not
require individual managers to have knowledge of all the possible job
openings within LOL, nor did it create a duty for the managers to find out
about       job openings on Reynolds’s behalf.             Reynolds should have and
                                                      7
reportedly      did   inquire   from    Job    Service    about   potential   employment
opportunities.        Reynolds claims that in an eighteen-month period, Job
Service      did not give him a single application.                 Yet in Reynolds’s
deposition, he admitted that he did not ask Job Service for a single
application.      Ray Cherry and Scott Gottschalk informed Reynolds of a job
opening in Cottonwood, Minnesota and a temporary position in Poland.                  Yet
Reynolds failed to apply for either of these positions.                In fact, during
the eighteen-month period Reynolds searched for employment opportunities
within LOL, he applied for only one position.             LOL hired a more experienced
and more qualified part-time LOL employee to fill the opening.

        Furthermore, Reynolds fails to present a genuine issue of material
fact as to whether he detrimentally relied on LOL’s rehire policy as
required under section 20-10-1.          See Taggart v. Ford Motor Credit Co., 462
N.W.2d 493, 502 (S.D. 1990).              The following exchange occurred during
Reynolds’s deposition and shows that he did not rely to his detriment on
the rehire policy:

        7
      Job Service is an                employment    search       service   located   in
Brookings, South Dakota.

                                              -13-
     Q.    When did you first start looking for another job?

     A.    Right after I got my notice.

                               *      *     *

     Q.    Did you start looking outside of Land O’Lakes?

     A.    Yes.

     Q.    Tell me how you went about your job search efforts.

     A.    I went outside of Land O’Lakes.        Not only inquired
           through the Land O’Lakes system with several people, but
           I went to Job Service.      I registered myself at Job
           Service, which I checked every week for 18 months. I was
           in there every week checking for a job.

Reynolds Dep. at 80-81.   Later Reynolds stated that he had sent out 150-170
job applications following his termination.        Needless to say, it is
unfortunate that Reynolds would have such difficulty finding reemployment
after the RIF.    However, Reynolds has not established that he relied on
LOL’s rehire policy to his detriment. The district court properly granted
summary judgment on Reynolds’s deceit claim.

III. CONCLUSION

     For the reasons stated above, we affirm the decision of the district
court.

     A true copy.

           Attest:

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

                                    -14-