Court Opinion

ID: 804321
Source: CourtListenerOpinion
Date Created: 2012-07-13 16:05:00+00
Date Added: 2024-06-11T18:00:11.887325
License: Public Domain

United States Court of Appeals
                      For the First Circuit
No. 11-2186

                 PAUL J. CAMERON; PAUL T. FERRIS;
              PAUL M. GLEASON; KENNETH W. ROSENTHAL,

                     Plaintiffs, Appellants,

                          KEVIN O'KEEFE,

                            Plaintiff.

                                v.

                       IDEARC MEDIA CORP.,

                       Defendant, Appellee,

     LOCAL 1301 COMMUNICATIONS WORKERS OF AMERICA, AFL-CIO;
            GEORGE ALCOTT; ED RAAD; KIMBERLY DONAHUE;
             TODD SANISLOW; HEWITT ASSOCIATES, INC.,

                           Defendants.

          APPEAL FROM THE UNITED STATES DISTRICT COURT
                FOR THE DISTRICT OF MASSACHUSETTS

          [Hon. Leo T. Sorokin, U.S. Magistrate Judge]

                              Before

                       Lynch, Chief Judge,
                Selya and Boudin, Circuit Judges.

     Francis G. Gleason, Jr. with whom Gleason & Gleason was on
brief for appellants.
     Arthur G. Telegen with whom Jean M. Wilson and Seyfarth Shaw
LLP were on brief for appellee.

                          July 13, 2012
             BOUDIN, Circuit Judge.       Appellants Paul J. Cameron, Paul

T. Ferris, Paul M. Gleason, and Kenneth W. Rosenthal are former

directory-advertising sales representatives in the Premise Sales

unit of appellee Idearc Media Corporation ("Idearc").                 Each was

discharged in July 2007.        Idearc says they were let go for poor

performance;    the   employees    allege       that   the   terminations    were

motivated by age discrimination and a desire to negate pension

benefits, and they also advance a retaliation claim.               The district

court rejected all of their claims.

             The lawsuit revolves around Idearc's Minimum Standards

Plan ("MSP") included in its 2002 collective bargaining agreement

(the "2002 CBA") with Local 1301 of the Communications Workers of

America     ("the   Union").      The    2002    CBA's   terms    governed    the

employment relationship between appellants and the company from

June 2, 2002 to June 23, 2007.          After the 2002 CBA expired, no CBA

was in effect until December 7, 2008, when Idearc and the Union

agreed to a new collective bargaining agreement (the "2008 CBA").

             The 2002 CBA's MSP authorized Idearc to terminate under-

performing employees as specified by the plan.                   Employees were

divided into three "channels"--Premise Sales, Senior Telephone

Sales, and Telephone Sales--which were subdivided into seven "peer

groups."1      Employees   in   each     peer    group   were    ranked   within

     1
      The Premise Sales and Senior Telephone Sales channels were
each divided into three peer groups that corresponded to geographic
areas in New England. The Telephone Sales channel constituted one

                                        -2-
six-month periods by "percent net gain"--which was calculated by

comparing a salesperson's revenues against the revenue produced by

his accounts in the previous year.               Until January 2005, the bottom

30th percentile of each peer group in any semester "failed" that

semester unless the employee met an alternative company-set net

gain objective.        2002 CBA, art. 43.02.

              Idearc was permitted to terminate employees failing 4 out

of 7 consecutive semesters--with the caveat that no more than 7.5

percent of a peer group could be terminated in any given semester.

2002 CBA, art. 43.03(d).             The CBA also provided for appeals of

terminations under the MSP to a joint union/management Performance

Plan Review Board.         Id. at art. 46.        In substance, the MSP aimed to

cull those sales representatives who were weaker performers but

only if they were regularly at the bottom of the tally and also

below the company's net gain objective target.

              The    MSP   was    designed    to    identify   10-15    percent   of

employees for termination per year.                The 2002 CBA required Idearc

and the Union to revise the "failing" percentile (originally 30

percent) in January 2005 and 2007--so as to better achieve the

middle   of    the    10-15      percent   target     range--if   the   number    of

employees qualified for termination fell outside the 10-15 percent

range.    2002 CBA, art. 43.06.                  As of January 2005, only one

employee had been terminated under the MSP. Idearc then raised the

peer group.

                                           -3-
"failing" figure to the 70th percentile and also lowered the

alternative net gain objective target, making the latter figure

much more important (but still subject to the 7.5 percent limit on

terminations within a single peer group).2

             Appellants in this case each qualified for termination

under the MSP after failing the first semester of 2007 (as well as

the necessary number of prior semesters) and were terminated in

July 2007.    Each plaintiff was over 40 years old at the time of

termination, and each had between 18 and 28 years of service at

Idearc.   Rosenthal and Gleason were about two years away from

qualifying for service pensions that respectively vested after 20

and 30 years of service; Ferris was about 4.5 years from his

service pension; and Cameron was 7 years from his service pension

and less than 2 years from his deferred vested pension.

          Appellants brought the present lawsuit against Idearc in

December 2008. Without denying that they had failed under the MSP,

they alleged that they were fired not because of the MSP but

because of their age, in violation of the Age Discrimination in

Employment Act ("ADEA"), 29 U.S.C. § 621 et seq. (2006), and in

order to deprive them of pension benefits, in violation of the

     2
      Quantitative analysis indicated that even raising the
"failing" percentile from 30 to 100, making all employees subject
to the net gain objective requirements, would not achieve the
aimed-for 10-15 percent target range; but, with the revision, those
employees regularly in the top 30 percent remained immune to
discharge under the plan even if they failed the now lowered
objective net gain figure.

                                 -4-
Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001

et seq. (2006).         Appellants also allege Idearc later retaliated

against them for filing this suit, also in violation of ERISA, 29

U.S.C. § 1140, by refusing to reinstate them as required by the

2008 CBA.3

             On summary judgment, the district court assumed arguendo

that appellants could establish a prima facie case for their

discrimination      theories.      But,        Idearc   having   proffered   a

performance-based explanation for the terminations, the court found

that appellants had not provided evidence from which a reasonable

jury could conclude that Idearc's reason was pretextual; neither

was there sufficient evidence of retaliation for filing this suit.

Accordingly, the court granted summary judgment to the defendants.

             In   the    alternative,    the    district   court   considered

appellants' claims barred by section 301 of the LMRA, primarily

because the court found that the discrimination claims, if they

went forward, depended on interpreting the CBA (thus arguably being

subject to the CBA's dispute resolution            provisions).    Cf. Lingle

v. Norge Div. of Magic Chef, Inc., 486 U.S. 399, 407 n.7 (1988).

     3
      Appellants also brought state law claims against Idearc–for
tortious interference with contract--that were grounded in alleged
breaches of the CBA, and against the Union for breach of its duty
of fair representation--what is known as a "hybrid" claim--under
section 301 of the Labor Management Relations Act ("LMRA"), 29
U.S.C. § 185.        Other state law claims, including age
discrimination, were also advanced. Only the federal ADEA, ERISA
and retaliation claims are pressed on this appeal.

                                        -5-
Because we affirm on the ground that appellants' claims failed to

present   a   jury   issue   on     the     charges    of   discrimination    or

retaliation, the question of LMRA preemption need not be pursued.

           The ADEA protects employees against, among other things,

discriminatory discharge based on age.                29 U.S.C. § 623(a)(1).

Absent direct evidence of discrimination--of which there is just

about none here--ADEA claims are evaluated under the familiar

burden-shifting standard of McDonnell Douglas Corp. v. Green, 411

U.S. 792 (1973).     Vélez v. Thermo King de Puerto Rico, Inc., 585

F.3d 441, 447 n.2      (1st Cir. 2009).               A plaintiff must first

establish a prima facie case, which is fairly easy to do, by

showing

           --that he or she was at least 40 years old at
           the time of discharge;

           --that he or she was qualified for                      the
           position but was nevertheless fired; and

           --that the employer subsequently filled the position.

Id. at 447.

           The   employer    must     then     produce      a   legitimate   non-

discriminatory reason for termination; and, if this is done, the

plaintiff bears the ultimate burden of proving, by a preponderance

of the evidence, that the defendant's proffered reasons were a

pretext for discrimination.          Vélez, 585 F.3d at 447-48.              This

brings the plaintiff back to having to prove his or her case but

                                      -6-
with the added, often critical, advantage to the employee of having

pinned down the defendant's purported justification.

              Section 510 of ERISA prohibits inter alia discharge for

the purpose of interfering with the attainment of rights under an

employee benefit plan.          29 U.S.C. § 1140.        Again the McDonnell

Douglas framework is used when direct evidence of discrimination is

lacking.      Kouvchinov v. Parametric Tech. Corp., 537 F.3d 62, 67

(1st   Cir.    2008).     A   plaintiff    must   establish    a   prima   facie

case--that he was prospectively entitled to ERISA benefits, was

qualified for his position, and was discharged "under circumstances

that give rise to an inference of discrimination."                   Lehman v.

Prudential Ins. Co. of Am., 74 F.3d 323, 330 (1st Cir. 1996).

              On summary judgment, the district court assumed without

deciding that the appellants could establish a prima facie case of

age    discrimination     and   interference      with   prospective   pension

rights; but,      given   Idearc's   performance-based        explanation   for

termination, the court found that appellants had not provided

evidence from which a reasonable jury could conclude Idearc's

reason for the discharges--poor performance under the MSP--was

pretextual and that age or pension related concerns were the actual

reason for the discharges.

              Whatever one thinks of eliminating weaker performing

sales personnel in middle age or near to their pensions, poor

performance in a job is a conventional business motive and not age

                                     -7-
discrimination or purposeful interference under ERISA.   Appellants

do not deny that they were subject to discharge under the MSP.

Instead, they argue that the MSP's percentile figure was raised to

the 70th percentile level without a mathematical basis in January

2005 and left unchanged in January 2007, in alleged violation of

the CBA, and that Idearc knew the revised MSP would capture too

many employees for termination.

          Reducing the "safe harbor" from the top 70 percent of

employees ranked by performance to the top 30 percent (which was

the effect of the January 2005 change) was amply explained not by

age discrimination but by experience showing that the earlier safe

harbor was so large that it prevented the MSP from capturing all

but a few employees--far from the aimed-for removal target.     In

deposition testimony below, the Union conceded that Idearc acted

with legal authority under the CBA in raising the MSP standards as

it did.

          Appellants argue, relying in part on the views of their

expert, that the company and Union both misunderstood what the CBA

required to justify the new 70 percent figure; but this is beside

the point: the question here is not the CBA's meaning but the

appellants' need to show that Idearc had fired them because of

their age or to target their pension rights; merely to show that

the parties to the CBA misunderstood their own document would remit

                                  -8-
appellants to their CBA-based claims which they have not sought to

appeal.   See note 3, above.

            Indeed, Idearc attempted to terminate only 28 employees

for performance-based reasons over the life of the MSP, out of

about 300 employees in the bargaining unit. Among the 28 employees

Idearc attempted to terminate under the MSP, 22 appealed and 8 were

successful.       There was no significant difference between the

average     age   of    employees   with    successful   and   unsuccessful

appeals--at 51.375 and 47.33 years old, respectively--and the fact

that employees with successful appeals were slightly older on

average tends to negate, rather than support, an inference of

discrimination.        The number of terminated employees does not come

close to Idearc's original target of 10-15 percent, or about 30-45

per year.

            In proffering these figures, Idearc did not count two

employees, who were identified for termination and denied relief on

appeal, but were kept on briefly to qualify for their service

pensions after the Union alerted the company that these two were

very close to vesting.       Adding these employees to the mix does not

significantly     change    the   average   ages   already   discussed,   and

Idearc's accommodation hardly supports the notion that Idearc was

using the MSP to interfere with pension benefits.

            Appellants point out that among Idearc's three sales

channels as of 2007, Premise Sales (in which appellants worked) had

                                     -9-
the highest average age at 51.5 years old, highest average years of

service, and the highest termination rate under the MSP; Senior

Telephone Sales followed in average age, service, and terminations;

Telephone Sales employees were the youngest at an average age of

37.3 years old, the least experienced, and saw zero terminations

under the MSP.

           As it happens, Idearc says that the Telephone Sales

channel was informally exempted from the MSP by agreement with the

Union, but that many young, inexperienced, provisional employees in

the group were dismissed outside the procedures of the MSP in

numbers that would have raised that group's discharge rate above

all others.   Appellants say that proof of such an agreement is

weak, but the whole dispute is beside the point.

           The sales representatives in each channel were performing

their sales tasks in a different context than those in the other

two channels; and appellants were being measured against members of

their peer group within their distinct channel. The desire to keep

the stronger and discharge the weaker performing members of a group

is not the purposeful age discrimination condemned by the ADEA or

interference with pension rights under ERISA.             Bennett v. Saint-

Gobain   Corp.,   507   F.3d   23,    31    (1st   Cir.   2007)   (requiring

"discriminatory intent" for ADEA claims); Barbour v. Dynamics

Research Corp., 63 F.3d 32, 38 (1st Cir. 1995), cert. denied, 516

                                     -10-
U.S. 1113 (1996) (requiring "specific intent to interfere with the

plaintiff's [ERISA] benefits").

            Appellants say their own adequate performance is shown by

accolades they received, some within semesters they failed under

the MSP, or not long before their final failing semester and

termination.     But objective measures are used in part to avoid

claims of discrimination; and crafting an MSP that better divides

superior from inferior performance is a subject for collective

bargaining, not a discrimination claim; that the MSP may have been

an imperfect performance metric hardly shows that it was a mask for

age discrimination or interference with pensions.

            Two pieces of evidence stressed by appellants deserve

brief comment.      One is a statement made by a sales manager to

plaintiff Rosenthal during a meeting in 2005 or 2006: "[T]hat's the

problem with you old guys, you remember the way that it used to

be."   Such a stray remark to one person, made on a subject that

Rosenthal   could   not   recall,    can   hardly   serve   to   show   that

discharges under an objective and negotiated merit plan were a

pretext for age discrimination. Straughn v. Delta Air Lines, Inc.,

250 F.3d 23, 36 (1st Cir. 2001).

            Appellants also stress that Idearc was concerned about

pension costs and saved a substantial amount in pension benefits as

to the 20 employees who were terminated under the MSP.                  But

employers, if they remain in business, are always concerned with

                                    -11-
costs--pensions quite as much as salaries or commissions.                        Nothing

suggests that the termination of the four appellants here was based

on anything except their poorer performance in sales efforts as

measured by the MSP.

            Finally, appellants suggest that they were retaliated

against for filing this lawsuit in the district court charging age

discrimination         and    interference         with    ERISA     rights.     Such    a

retaliatory purpose by Idearc could create liability under either

of the two statutes.           29 U.S.C. § 1140 (ERISA); 29 U.S.C. § 623(d)

(ADEA).     Appellants         were    discharged         before     they    filed   their

lawsuit; but their theory is that the retaliation lay in a refusal

to reinstate based upon an alleged promise to do so reflected in

the 2008 CBA.

            The alleged promise appears in a June 24, 2007 Letter

Agreement included as an annex to the 2008 CBA ("the page 53

letter").        The    page    53    letter,       on    its     face,   exempted   from

termination sales representatives failing the MSP in the first

semester    of   2007,       and     instead    moved      those    employees    into    a

"performance improvement plan."                Idearc, say appellants, concealed

the Letter and failed to reinstate them in retaliation for filing

this suit on December 3, 2008--shortly before the 2008 CBA was

adopted on December 7, 2008.

            However,         while    the   letter        taken    without   context    is

arguably confusing, the evidence gathered in discovery confirms

                                            -12-
Idearc's explanation that the page 53 letter was a proposal made in

negotiating the 2008 CBA that was thereafter rejected by the Union.

Then, after an impasse in negotiations in early December 2008, well

after the preexisting CBA expired, Idearc implemented unilaterally

the   new   performance   improvement      plan   but   applicable    only   to

employees subject to discharge in the second semester of 2007, thus

excluding persons such as the appellants.

            The page 53 letter is (as appellants say) included in the

CBA as an annex but only because, according to Idearc and the

uncontradicted     record       evidence,     the       Union's     bargaining

representative requested that the letter be included for reference-

-but never as a commitment by the company. In deposition testimony

in the district court, the Union representative confirmed that the

page 53 letter is a "moot document" and she "just wanted people to

see what we had been talking about for 17 months."                 No contrary

testimony was adduced by appellants.

            Appellants    say   that   the   tension     between    the   plain

language of the page 53 letter and the bargaining representative's

account at least raises a genuine issue of material fact for trial.

But the relevance of a June 2007 letter annexed to a December 2008

CBA without any explicit adoption of the former by the latter is

hardly self-evident, and appellants have pointed to no evidence to

rebut credible assertions by both parties to the CBA as to the

                                    -13-
limited office of the letter.   The premise of the retaliation

claims thus fails.

          Affirmed.

                            -14-