Court Opinion

ID: 71540
Source: CourtListenerOpinion
Date Created: 2010-04-26 07:19:44+00
Date Added: 2024-06-11T09:39:16.517940
License: Public Domain

United States Court of Appeals,

                        Eleventh Circuit.

                           No. 95-9576.

 Cecile L. MADDOW, individually and on behalf of those similarly
situated persons named below: Nancy A. Gattone, Shirley M. Wesson,
Richard J. Gress, Gary W. Coble, Fran Silverman, Renate Washburn,
Sandra Record, Joann Maste, Plaintiffs-Appellants,

                                v.

 PROCTER & GAMBLE COMPANY, INC., Noxell Corporation, Defendants-
Appellees.

                         March 19, 1997.

Appeal from the United States District Court for the Northern
District of Georgia. (No. 1:93-CV-2790-WBH), Willis B. Hunt, Jr.,
District Judge.

Before BIRCH, Circuit Judge, and HILL and FARRIS *, Senior Circuit
Judges.

     FARRIS, Senior Circuit Judge:

     Cecile Maddow, individually and on behalf of eight opt-in

plaintiffs, brought suit against the Procter and Gamble Company and

the Noxell Corporation, a subsidiary, for violation of the Age

Discrimination in Employment Act, 29 U.S.C. §§ 621-634 (1994). The

plaintiffs appeal the district court's 1) grant of summary judgment

against them on the claim of discrimination, 2) grant of summary

judgment against Maddow on the claim of adverse affect, 3) order

compelling discovery and awarding attorney fees for failure to

comply with discovery, and 4) denial of joinder of additional

plaintiffs.

     We have jurisdiction pursuant to 28 U.S.C. § 1291. We reverse

in part and affirm in part.

     *
      Honorable Jerome Farris, Senior U.S. Circuit Judge for the
Ninth Circuit, sitting by designation.
                                     BACKGROUND

      Plaintiffs,      each       age     forty      or      above,    were        sales

representatives for Max Factor, a cosmetics company. In July 1991,

Procter and Gamble acquired Max Factor and assigned it to Noxell

Corporation,     a    wholly-owned        subsidiary.         Noxell    decided       to

terminate a substantial number of the former Max Factor sales

representatives but none of its own original sales force.

      Noxell and Max Factor had used different sales strategies.

Noxell used a data-based market strategy relying on demographics

and   other   data.        Max   Factor    used     little    data    and    was    more

relationship-based.          Noxell generally hired college graduates,

while most Max Factor representatives lacked a college education.

      In January 1992, Larry Anderson, Noxell's Vice President of

Sales, addressed the company's sales personnel. He stated that the

image of the new division would be "new and young.'                           He also

remarked that the Noxell representatives were "young and energetic'

and   that    the    Max    Factor      personnel    were     "old,    mature,       and

well-trained.'

      In March 1992, a Noxell district manager interviewed each Max

Factor sales representative.            Based on the interview, the manager

rated each interviewee in seven categories.                    These ratings were

summed to produce a Recruiting Quality Index for each candidate.

Noxell depositions and affidavits state that this Index has been

reliable in predicting future sales performance.

      According to Noxell depositions and affidavits, the Recruiting

Quality Index was the sole factor in the selection process.                        Prior

sales experience and performance were not considered.                       Employment
was offered to anyone who scored sixteen or higher.              In addition,

Noxell decided to retain at least one former Max Factor employee at

each level in each geographical sales district.             To meet this goal

Noxell retained some former Max Factor employees who received

scores of fourteen or fifteen.          The plaintiffs offered evidence

that six employees receiving these scores were retained, only one

of whom was over forty, and that all three employees receiving

these scores who were not retained were over forty.

     Maddow    received    an   Index   rating   of   sixteen.      One    other

plaintiff received a rating of fourteen.          The rest were each below

thirteen.   During Maddow's interview she stated that she would not

accept a sales position that was not based in Atlanta, her current

location.     Maddow's interviewer, who believed she was under forty

at the time of the interview, noted that Maddow's likelihood of

accepting a job offer as "high."

     After Maddow's interview, former Max Factor manager Wade

McLelland left a message on her answering machine stating that the

company needed to know her age because of an "age factor."                  She

responded that she was forty-one.          Noxell then offered Maddow a

sales position in Huntsville, Alabama, which she turned down.                Two

younger Max Factor sales representatives in the same district as

Maddow with higher Index scores were offered positions in locations

other than their Max Factor districts.            None of the plaintiffs

besides Maddow was offered a position.

     Depositions and affidavits from McLelland and other Noxell

employees   state   that   tentative     decisions    had    been   made    when

McLelland called about the "age factor' and he was getting the
information to assess the impact of proposed terminations for

federal equal employment opportunity laws and affirmative action

regulations.     However, Noxell manager Strause stated that he had

directed the McLelland inquiry, as the result of a request from

another manager or Human Resources, and that he was not given any

reason for the inquiry.

     One of the plaintiffs was told at the time he was informed of

his termination that he did not fit the Procter and Gamble profile

and that at his age he should consider retirement.

     An   affidavit     of   Mary     Nelson,   a    former    Max   Factor   sales

representative who is not a plaintiff, states that she was told by

her former Max Factor sales manager that the interviews were a

formality and she would not be hired by Noxell because she was over

forty.    The sales manager attributed this statement to her boss.

The former sales manager was not a decision-maker regarding Nelson

or any of the plaintiffs, and denies making the statement.

     While     Noxell    was     terminating        former    Max    Factor   sales

representatives,        it     was    hiring    new,     inexperienced        sales

representatives.      Most were college graduates.             Noxell followed a

different interview procedure with these recruits than with the

former Max Factor employees, part of which was more objective than

the Max Factor interviews.

     Sixty-eight    former      Max    Factor   sales    representatives       were

interviewed by Noxell.           Thirty-two of the sixty-eight received

offers (not including Maddow and one other sales representative who

claim they were constructively discharged).                   Of those receiving

offers, twenty-seven were under age forty and five were over.                    Of
those    not    receiving   offers,    fourteen   were    under     forty   and

twenty-two were over.       The plaintiffs' expert testified that the

standard deviation for this distribution was 3.83, or a less than

a one in one thousand chance of having randomly occurred.                   His

statistical analysis did not account for individuals' Recruiting

Quality Index scores.       Ninety-one percent of Noxell's original 112

person sales force was under age forty.

        The    district   court    granted   summary     judgment    for    the

defendants, holding that the plaintiffs had not raised a genuine

issue of material fact that the defendants' use of Recruiting

Quality Index scores was a pretext for age discrimination.                  The

court also held that Maddow had not been adversely affected because

she had been offered the position in Alabama.

        During discovery, the defendants requested plaintiffs' tax

returns and sent an interrogatory seeking detailed attorney fee

arrangement information.          Plaintiffs objected to the tax return

request on privilege and relevance grounds, and instead provided

alternative documentation of earnings such as W-2 and 1099 forms.

In response to the interrogatory, the plaintiffs stated that the

fee agreement was a contingency and the individual plaintiffs were

responsible for costs, but did not disclose the precise contingency

percentage.

        The district court granted the defendants' motion to compel

discovery of these two items, and granted $3,000 in attorney's fees

to the defendants.

        On March 2, 1994 the parties filed a stipulated Scheduling

Order, which was approved by the district court on March 14.                One
paragraph of the Order allowed individuals similarly situated to

the plaintiff to file opt-in notices within sixty days.            On March

18, defendants informed plaintiffs that information on Max Factor

employees could be obtained from defendants' personnel files.

Plaintiffs did not obtain the necessary information until late May

and     early   June   due   to   their   own   scheduling    difficulties.

Plaintiffs did not seek a modification of the Scheduling Order. On

July 5, 1994;      August 16, 1994;       and August 26, 1994 plaintiffs

filed motions to join a total of eight additional persons.              The

August 16 motion included a motion to modify the Scheduling Order

to extend the joinder deadline. The district court held that these

individuals were similarly situated to plaintiffs, but denied their

motions to join as untimely.

                                  DISCUSSION

I. Summary Judgment on Discrimination Claim

      We review a district court's grant of summary judgment de

novo.     Jameson v. Arrow Co., 75 F.3d 1528, 1531 (11th Cir.1996).

In analyzing a motion for summary judgment, we must view the facts

in the light most favorable to the nonmoving party and make all

factual inferences in favor of that party. Hairston v. Gainesville

Sun Publishing Co., 9 F.3d 913, 918 (11th Cir.1993).

         "In an employment discrimination case, the plaintiff must

produce sufficient evidence to support an inference that the

defendant employer based its employment decision on an illegal

criterion."     Jameson, 75 F.3d at 1531.       We "generally ... eschew[

] an overly strict formulation of the elements of a prima facie

case, particularly in age discrimination cases."             Id.
      In age discrimination cases, once a plaintiff has made a

prima facie case, the employer may then rebut the inference of

discrimination by providing legitimate, non-discriminatory reasons

for its decision.      The burden than shifts back to the plaintiff to

raise a genuine factual question as to whether defendant's stated

reason is mere pretext.       Hairston, 9 F.3d at 920.        However, "The

grant of summary judgment, though appropriate when evidence of

discriminatory intent is totally lacking, is generally unsuitable

... [where] plaintiff has established a prima facie case because of

the "elusive factual question' of intentional discrimination." Id.

at 921 (citing Texas Dep't of Community Affairs v. Burdine, 450
U.S. 248, 256, 101 S. Ct. 1089, 1095, 67 L. Ed. 2d 207 (1981)).

       A   plaintiff    may   establish   a   prima   facie   case   of   age

discrimination in a reduction-in-force case by (1) demonstrating

that he was in a protected age group and was adversely affected by

an employment decision;        (2) showing he was qualified for his

former position or another position at the time he was adversely

affected; and (3) producing circumstantial or direct evidence from

which a reasonable factfinder could conclude that his employer

intended to discriminate on the basis of age in reaching the

decision at issue.       Verbraeken v. Westinghouse Elec. Corp.,          881
F.2d 1041, 1045-46 (11th Cir.1989).           Plaintiffs were all in a

protected age group, were adversely affected (Maddow is discussed

in part II, infra), and were qualified. Therefore, the question is

whether    the   plaintiffs   produced    sufficient    evidence     of   age

discrimination.

      Evidence submitted by the plaintiffs satisfies their burden
of establishing a prima facie case of age discrimination.                     The

defendants rebutted the prima facie inference with the alleged

legitimate,      non-discriminatory    reason      of    basing    termination

decisions on the Recruiting Quality Index.               The plaintiffs thus

have the burden of establishing that defendants' proffered reason

is a pretext.

       Because this is a summary judgment motion, the plaintiffs

need only raise a genuine issue of material fact that the reason

was a pretext;     they do not need to actually prove it.            Hairston,
9 F.3d at 921.     The plaintiffs' evidence clears this hurdle.               Any

reading of prior case dicta to the effect that plaintiffs need to

prove pretext at the summary judgment stage is incorrect.

        Defendants'      contention   that   the    evidence      used   by   the

plaintiffs to establish the prima facie case may not be used to

raise a genuine issue as to pretext, and their implication that a

genuine issue as to pretext cannot be raised circumstantially, are

unsupportable.      Evidence offered in the prima facie case may be

sufficient to raise a genuine issue of material fact regarding

pretext.   Id.

      The statistical evidence plaintiffs offered is sufficient for

a reasonable person to infer discrimination based on age and that

the   reasons    given   were   pretextual.        The   plaintiffs'     expert

testified that the standard deviation for the distribution of

terminations based on age was 3.83.          This distribution has a less

than one in one thousand chance of occurring randomly.              A standard

deviation of two or three is enough to support an inference of

discrimination.     Kilgo v. Bowman Transp., Inc., 789 F.2d 859, 871
n. 18 (11th Cir.1986) (citing Castaneda v. Partida, 430 U.S. 482,

496 n. 17, 97 S. Ct. 1272, 1281 n. 17, 51 L. Ed. 2d 498 (1977)).                     The

defendants failed to rebut this evidence or the expert.                           Two

reasonable conclusions can be drawn from statistical evidence this

strong:         the   defendants      intentionally      discriminated      or    the

Recruiting Quality Index system unintentionally favored younger

people.     Despite defendants' plausible claim that there was no

discrimination, the former is a reasonable inference, and satisfies

plaintiffs' burden at this stage.

         In addition to the statistical evidence, there is also

circumstantial evidence of age discrimination.                  This includes the

Vice-President of Sales' statement that the new division would have

a "new and young' image and that the original Noxell employees were

"young'    while      the   former   Max     Factor   employees    were   "old    and

mature';    the phone message for Maddow mentioning an "age factor';

the interviewer's listing Maddow as highly likely to accept an

offer and then offering her a position that she had already stated

she would turn down; the employment offers to some representatives

who   scored     only   fourteen     or    fifteen;      the    statement    to   one

plaintiff that he should consider retiring at his age;                      Noxell's

use of an interview procedure for former Max Factor employees that

was different from the usual procedure;               and Noxell's decision to

retain    its    predominantly       young    original   sale    representatives.

Taken alone, any one of these may not be enough.                    However, as a

whole, a reasonable person could infer discrimination.

       Finally, Mary Nelson's statement that she was told Noxell was

only hiring representatives under forty and the interviews were
only a formality is direct evidence of discrimination.                           Viewing

this evidence in the light most favorable to the plaintiff, it

creates a genuine issue of material fact.                The statement may not be

credible, but that is a decision for the factfinder, not for

summary judgment.

         The defendants' explanation for their termination decisions

is entirely plausible.            However, the statistical, circumstantial,

and direct evidence in the record, when viewed in the light most

favorable to the plaintiff, creates a genuine issue of material

fact that defendants proffered reason is a pretext and that there

was discrimination. Summary judgment against the plaintiffs on the

issue of discrimination must therefore be reversed.

II. Summary Judgment on Adverse Affect Claim

       To make a prima facie case of age discrimination, an employee

must   show   that        she    was   adversely     affected    by       an   employment

decision.     Verbraeken, 881 F.2d at 1045-46.                  The district court

held that Maddow was not adversely affected because she was offered

the    position      in     Alabama,        and   thus   was    not       constructively

discharged.

          However,    requiring         a    transfer    can    be    a    constructive

discharge.    Stamey v. Southern Bell Telephone & Telegraph Co., 859
F.2d 855,   860    n.     11    (11th     Cir.1988).     Further,        constructive

discharge is not the only possible adverse affect in employment

cases.     Id. at 860.           Under the Age Discrimination in Employment

Act, it is unlawful for an employer "to fail or refuse to hire or

to discharge any individual or otherwise to discriminate against

any individual with respect to his compensation, terms, conditions,
or privileges of employment because of such individual's age."         29

U.S.C. § 623(a) (emphasis added).

      Maddow presented evidence that when her interviewer believed

she was under forty he gave her a Recruiting Quality Index score of

sixteen.   The interviewer noted that she had a high likelihood of

accepting an offer after being told explicitly that she would only

accept an offer in Atlanta.      Maddow was then left a message asking

her age.     After Maddow told Noxell she was forty-one, she was

informed that the only position she was being offered was in

Alabama.

     Maddow has created a reasonable inference that the terms and

conditions of her employment were affected because of her age.

This is an adverse affect.         Stamey, 859 F.2d at 860.       It is

inapposite that a job Maddow has since accepted involves travel to

Alabama.   Summary judgment against Maddow on the issue of adverse

affect is reversed.

III. Discovery and Costs

      We review district court rulings on discovery motions and

discovery sanctions for abuse of discretion. Harris v. Chapman, 97
F.3d 499, 506 (11th Cir.1996).

     Plaintiffs initially did not comply with defendants' discovery

requests for income tax forms and details of their attorney fee

arrangement.     Plaintiffs supplied defendants with W-2 and 1099

forms as evidence of earnings, but argued that the tax records

would reveal irrelevant and qualifiedly privileged information.

Plaintiffs     also   informed   defendants   that   the   attorney   fee

arrangement was contingent and plaintiffs were responsible for
costs, but did not supply the contingency percentage on the grounds

that it was irrelevant.

     The district court held that the tax records would reveal

income       information     not   contained   in    W-2   forms    and    that   the

information would be protected by the Protective Order entered into

by the parties. The court held that the contingency percentage was

relevant       because   plaintiffs     sought      attorney's     fees,   and    the

percentage would be relevant to calculating reasonable attorney's

fees.    The court therefore compelled discovery of these two items,

and sanctioned plaintiffs $3,000 in attorney's fees for their

initial failure to comply.

        The court's decision to compel discovery was not an abuse of

discretion: both items of information are arguably relevant to the

case.    The award of sanctions, however, was.

         A    court   must    impose   attorney's     fees   and    expenses      when

compelling discovery unless the party was substantially justified

in resisting discovery.            Fed.R.Civ.P. 37(a)(4)(A).        Substantially

justified means that reasonable people could differ as to the

appropriateness of the contested action.              Pierce v. Underwood, 487
U.S. 552, 565, 108 S. Ct. 2541, 2550, 101 L. Ed. 2d 490 (1988).

        Here, the plaintiffs were substantially justified in relying

on Supreme Court dictum regarding the attorney's fees issue, and

relying on out-of-circuit district court caselaw, where there was

no in-circuit caselaw, regarding the tax form issue. See Blanchard

v. Bergeron, 489 U.S. 87, 93, 109 S. Ct. 939, 944, 103 L. Ed. 2d 67

(1989) (evidence of specific details of contingency fee arrangement

is not necessary for a court to calculate reasonable attorney's
fees;    it is at most one factor); City of Burlington v. Dague, 505
U.S. 557, 565, 112 S. Ct. 2638, 2643, 120 L. Ed. 2d 449 (1992)

(contingency fee is not grounds for a fee enhancement); Lemanik v.

McKinley Allsopp, Inc., 125 F.R.D. 602, 609 (S.D.N.Y.1989) (there

is a public policy of confidentiality of tax returns;                       to require

discovery, a party must establish relevancy and the court must find

a compelling need for the returns because the information is not

otherwise obtainable);                Biliske v. American Live Stock Inc., 73
F.R.D. 124,      126   n.    1     (W.D.Okla.1977)     (public    policy    against

unnecessary disclosure of tax returns).

     The      plaintiffs       were     substantially     justified    in    initially

refusing discovery.            The award of attorney's fees was an abuse of

discretion.         We affirm the district court's decision to compel

discovery but reverse its sanction of attorney's fees.

IV. Joinder or Intervention of Additional Opt-in Plaintiffs

         We    review     the       denial   of   a   motion   to   join    additional

plaintiffs for abuse of discretion.                   See Nolin v. Douglas County,

903 F.2d 1546 (11th Cir.1990), overruled on other grounds, McKinney

v. Pate, 20 F.3d 1550 (11th Cir.1994) (ruling on motion to amend

pretrial order is reviewed for abuse of discretion). We review the

denial    of    a    motion     for    permissive     intervention    for     abuse   of

discretion.         United States v. Dallas County Comm'n, 850 F.2d 1433,

1443 (11th Cir.1988).

         The district court has authority to manage the process of

joining additional parties.               Hoffmann-La Roche, Inc. v. Sperling,

493 U.S. 165, 170-71, 110 S. Ct. 482, 486-87, 107 L. Ed. 2d 480

(1989).       Federal Rule of Civil Procedure 16(b) requires a district
court judge to enter a scheduling order that limits the time to

join additional parties.     Here, the parties entered a Scheduling

Order on March 2, 1994 that stated all parties would be joined

within sixty days.     The additional plaintiffs did not file their

motion to join until more than two months after this deadline.   No

motion to extend the time in Scheduling Order was filed until even

later.

      In their reply brief to the district court on the motion to

join additional opt-in plaintiffs, the plaintiffs apparently tried

to convert it into a motion to intervene under Federal Rule of

Civil Procedure 24.    However, no official intervention motion was

ever filed.     Further, whether a motion to intervene is timely is

within the district court's discretion.     Stallworth v. Monsanto

Co., 558 F.2d 257, 263 (5th Cir.1977).     Stallworth requires the

district court to explicitly rule on four different factors to deny

a motion to intervene.    However, this is not required where it is

not even clear that the motion was one to intervene.

         The district court did not abuse its discretion in denying

the additional opt-in plaintiffs' motion to join.

     We reverse the district court's summary judgment order against

Maddow and the opt-in plaintiffs on both discrimination and adverse

affect grounds;    we affirm the district court's order compelling

discovery, but reverse its sanction of attorney's fees against

plaintiffs;    we affirm the district court's order denying joinder

or intervention of the additional opt-in plaintiffs.

     REVERSED in part and AFFIRMED in part.