Furr v. Seagate Technology, Inc.Furr v. Seagate Technology, Inc.
- Reporters:
- ,
- Before:
- Kelly Judge., Baldock, McWilliams
Mark Hammons of Hammons & Associates, Oklahoma City, Oklahoma, for Plaintiffs Appellees.
Before BALDOCK, McWILLIAMS and KELLY, Circuit Judges.
KELLY, Circuit Judge.
Plaintiffs-Appellees Robert S. Furr, Leslie Woosley, and Bernard E. Ozinga allege that their employment with Defendant-Appellant Seagate Technology, Inc. was terminated because of their age in violation of the Age Discrimination in Employment
I. Background
Seagate designs, manufactures and markets hard disk drives for computer systems. It has plants in 17 countries and over 30,000 employees worldwide. Seagate commenced operations in Oklahoma City on October 1, 1989, after purchasing an existing facility from another disk drive company. The Oklahoma City plant employed approximately 2,000 people.
In June 1991, Seagate‘s senior management determined that certain cost-containment measures would have to be taken to address an anticipated decline in profit margins. These measures included a company-wide reduction-in-force (“RIF“). The RIF was not undertaken as a desperate measure, but rather as a strategic business decision aimed at improving the company‘s position in the highly competitive hard disk drive market.
The initial RIF occurred in July 1991, with a second, smaller RIF in August 1991.
Plaintiffs Furr, Woosley, and Ozinga were employed by Seagate at its Oklahoma City plant, and all three were ultimately selected for the RIF. All three worked in separate departments in a hierarchy of about 240 employees called Design Engineering headed by vice-president Miran Sedlacek. Design Engineering included a variety of diverse talents and disciplines, and the three Plaintiffs worked for different managers and performed vastly different jobs.
Mr. Furr, 53, was a senior drafter who performed electrical drafting. James Becker was Furr‘s immediate supervisor. Mr. Becker reported to Bill Diffin, Director of Engineering Services, who in turn reported to Mr. Sedlacek.
Mr. Woosley, 58, was an engineering support specialist who worked in the photo lab, photocopying artwork master prints for other employees to use in making printed circuit boards. Stan Young was Mr. Woosley‘s immediate supervisor. Mr. Young, like Mr. Becker, also reported to Mr. Diffin.
Mr. Ozinga, 62, was a senior consulting mechanical engineer who worked on the mechanical areas of disk drive design. David West, Director of Advanced Technology and Concepts, was Mr. Ozinga‘s immediate supervisor, and Mr. West reported directly to Mr. Sedlacek.
In early July, 1991, Mr. Sedlacek was informed about the planned RIF and was
After the directors talked to their managers, and the managers and supervisors made their selections, Mr. Sedlacek held two meetings with all of his directors to discuss their selections. The focus of these meetings was to ensure that the functions selected would cause the least harm to the company.
A. Mr. Furr‘s Selection
After meeting with Mr. Sedlacek, Mr. Diffin met with the five managers under him, including Mr. Becker and Mr. Young, to inform them of the RIF. Mr. Diffin explained that each department would still have the same amount and type of work after the RIF and instructed his managers to select those that would least harm their department‘s ability to continue their operations. Each manager was required to select only employees from his own department. Mr. Diffin informed Mr. Becker that he would have to select two employees for the RIF.
Mr. Becker supervised 14 employees, 9 engineers and 5 technicians. He determined that his two selections had to be from the technicians because the engineers could perform the work of the technicians, but the converse was not true. Mr. Becker
B. Mr. Woosley‘s Selection
Mr. Young also learned of the RIF in the early July meeting with Mr. Diffin, and Mr. Diffin told Mr. Young that he would have to select one person for the RIF. Mr. Young selected a temporary employee who would eventually depart anyway. It was unclear at the time whether the termination of a temporary employee would count toward the RIF requirements. Although the temporary employee was approved for the July RIF, Mr. Young reviewed his department to determine who he would pick if another selection
Mr. Young‘s department consisted of nine employees, including the temporary. Three were scientists with degrees in chemistry; three employees, including the temporary, worked in the SMT lab; one independently operated the printed circuit lab; one maintained the specialized inventory of components used in the engineering department; and Mr. Woosley ran the photo lab. Mr. Young determined that the scientists, with their specialized knowledge, were indispensable, as were the employees operating the printed circuit lab and maintaining the specialized inventory. Mr. Young did not think that he could operate the SMT lab with only a single person (after losing the temporary), making the two remaining SMT lab employees vital. Thus, Mr. Young reasoned that Mr. Woosley was the next most expendable individual, behind the temporary, especially because other people under Mr. Diffin‘s management umbrella could, and had, performed Mr. Woosley‘s job in the photo lab.
Shortly after the July RIF, Mr. Diffin called a meeting of his managers, including Mr. Young, and announced that the group needed to lose another person. Mr. Diffin told Mr. Young that his department would lose the additional person, and Mr. Young agreed with that decision because every other department under Mr. Diffin had lost a permanent employee while he had only lost a temporary. Mr. Young selected Mr. Woosley, focusing exclusively on position elimination. Mr. Woosley‘s photo lab position was eliminated, although the photo lab duties still needed to be performed. A four-person, weekly
C. Mr. Ozinga‘s Selection
Mr. West, Mr. Ozinga‘s manager, first learned of the RIF at the early July meeting with Mr. Sedlacek. Mr. West‘s organization consisted of eight specialized departments and developed integrated circuits. The technical employees in Mr. West‘s group were all electrical engineers, except Mr. Ozinga who was a mechanical engineer. Mr. Ozinga and one other consulting engineer reported directly to Mr. West.
Mr. West attempted to determine which specialities could be selected that would least impact his organization. He met with his managers and developed a RIF list, which included Mr. Ozinga because he was underutilized. Mr. West testified that as a mechanical engineer, Mr. Ozinga was an unnecessary luxury for his group, and he was unable to keep Mr. Ozinga busy, relying on other departments to provide work for him. In part due to his underutilization, Mr. Ozinga was considered a moderate to low performer, ranked among the bottom 15% of employees in Mr. West‘s department in performance.
Mr. West and the other directors under Mr. Sedlacek met with Mr. Sedlacek to discuss the people selected for the RIF. At that meeting Mr. West argued for the retention of some of his employees, including Mr. Ozinga. Mr. West succeeded in having one
II. Waiver
As an initial matter, Plaintiffs contend that Seagate has waived its right to appellate review by failing to include, among other things, the motion or brief for judgment as a matter of law, a new trial, or remittitur. “When the record on appeal fails to include copies of the documents necessary to decide an issue on appeal, the Court of Appeals is unable to rule on that issue.” United States v. Vasquez, 985 F.2d 491, 494 (10th Cir. 1993). Seagate did include the entire trial transcript, as well as the district court‘s order denying its motion for judgment as a matter of law, or in the alternative, for a new trial, and for remittitur. Because Seagate‘s appeal is based upon challenges to the evidence and to the sufficiency of the evidence, this is a sufficient record to allow appellate consideration of the issues raised. See 10th Cir. R. 10.1.1, 10.3. In any event, Seagate supplemented the record on appeal with the motions and briefs, and we discern no prejudice to the appellees from this submission.
III. Judgment As a Matter of Law
Seagate concedes that Plaintiffs met their initial burden of proving a prima facie case under the McDonnell Douglas standard. See McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802 (1973); Ingels v. Thiokol Corp., 42 F.3d 616, 621 (10th Cir. 1994) (setting out the prima facie elements in the reduction-in-force context). However, the existence of a prima facie case does not necessarily preclude judgment as a matter of law against the Plaintiffs. Cf. Ingels, 42 F.3d at 621-23. As we stated in Fallis v. Kerr-McGee Corp., 944 F.2d 743, 744 (10th Cir. 1991):
[A]fter a full trial on the merits, the sequential analytical model adopted from McDonnell Douglas . . . drops out and we are left with the single overarching issue whether plaintiff adduced sufficient evidence to warrant a jury‘s determination that adverse employment action was taken against him on the basis of age.
Seagate has advanced a legitimate, nondiscriminatory reason for its decision to lay off the Plaintiffs, namely the company-wide reduction-in-force. The fact finder may only infer discrimination if the Plaintiffs produce evidence that the Defendant‘s proffered explanation is pretextual and unworthy of credence. Ingels, 42 F.3d at 621-22.
Plaintiffs’ attempt to use Seagate‘s pre- and post-RIF hirings as evidence of pretext ignores the timing of the hirings. The uncontroverted testimony revealed that no one at Seagate‘s Oklahoma City plant learned of the RIF until late June 1991, a few weeks before it occurred. The fact that Seagate‘s managers were hiring before they learned of the RIF is irrelevant to proving that the RIF was pretextual. Accord Viola v. Phillips Medical Sys. of North America, 42 F.3d 712, 718 (2d Cir. 1994) (employee‘s first adverse performance review occurred on the eve of a RIF, but this was not evidence of pretext because the supervisor was unaware of the impending RIF at the time of the review).
Plaintiffs’ evidence of Seagate‘s post-RIF hirings fails to show pretext because the people hired were not similarly situated to the Plaintiffs. The evidence reveals that Seagate did not hire anyone for two months after the RIF, and then after hiring a single 49-year-old for a job dissimilar to the Plaintiffs‘, did not hire anyone for another two months. Seagate did hire several people beginning in mid-November 1991, more than four months after the RIF, but Plaintiffs’ evidence reveals that the newly hired individuals
Plaintiffs attempted to attack the RIF as pretextual by challenging its necessity. To that end, Plaintiffs presented much evidence tending to show Seagate‘s financial health and profitability. However, as we have noted before, the wisdom of a RIF is not for a court or jury to decide. A RIF is a business decision, and “[t]he ADEA is not a vehicle for reviewing the propriety of business decisions.” Faulkner v. Super Valu Stores, Inc., 3 F.3d 1419, 1426 (10th Cir. 1993).
Plaintiffs attempt to rely on Denison v. Swaco Geolograph Co., 941 F.2d 1416 (10th Cir. 1991), for the proposition that business judgment may be challenged by
Plaintiffs also seek to infer pretext from the lack of a formal RIF plan and instructions. However, it was undisputed that the written RIF criteria were position elimination, performance, potential, and seniority, in that order. Further, the manner in which a company chooses to conduct a RIF is within the company‘s sound business discretion, and Plaintiffs have failed to adduce any evidence that the RIF criteria were a pretext for discriminatory motive. Cf. Ingels, 42 F.3d at 623 (company may alter the rules
The Plaintiffs in this case produced statistical evidence purportedly showing a correlation between age and discharge. While statistical evidence may create an inference of discrimination, the evidence may be so flawed as to render it insufficient to raise a jury question. Fallis, 944 F.2d at 746. In this case, Plaintiffs’ statistical evidence is so flawed because it failed to compare similarly situated individuals. Plaintiffs’ statistics grouped all employees together regardless of specialty or skill and failed to take into account nondiscriminatory reasons for the numerical disparities. “‘A plaintiff‘s statistical evidence must focus on eliminating nondiscriminatory explanations for the disparate treatment by showing disparate treatment between comparable individuals.‘” Cone, 14 F.3d at 532 (quoting Fallis, 944 F.2d at 746) (emphasis in original). Statistical evidence which fails to properly take into account nondiscriminatory explanations does not permit an inference of pretext. Rea v. Martin Marietta Corp., 29 F.3d 1450, 1456 (10th Cir. 1994).
Plaintiffs contend that Seagate used subjective criteria in selecting individuals for the RIF and that the use of subjective criteria creates an inference of discrimination. See Burrus v. United Telephone Co., 683 F.2d 339, 342 (10th Cir.), cert. denied, 459 U.S. 1071 (1982). Specifically, Plaintiffs take issue with the use of “potential” as a selection criteria. Plaintiffs argue that “potential” is subjective and that the use of “potential” as a criteria disparately impacts older employees. We find these contentions unpersuasive.
Further, in this case, the uncontroverted testimony of the various managers who chose the Plaintiffs for the RIF shows that the managers looked only to job elimination and performance, not potential, in selecting the Plaintiffs. All three managers responsible for the terminations explained in detail why they believed Plaintiffs’ positions were the
Plaintiffs contend that pretext can be inferred from the fact that not every department was subjected to the RIF. Specifically, Plaintiffs point to eight “predominantly younger” work groups under Sedlacek which were unaffected by the RIF. The undisputed testimony reveals that Sedlacek told his five subordinate directors to make selections from their departments for the RIF and that the individual directors then made their decisions after assessing the needs of their various groups. The fact that Sedlacek‘s managers choose to leave some work groups intact does not necessarily indicate pretext. Sedlacek‘s managers were asked to make business judgments as to which employees they could best do without, and the fact that some departments were unaffected may be a natural consequence of the greater perceived importance of certain departments. Plaintiffs have not produced any evidence indicating that the unaffected departments were similarly situated or performed identical functions to the affected departments, or that the departments were selected because of age. In the absence of any evidence of an illegal ulterior motive, courts and juries cannot presume to question the business judgment of company managers. See Faulkner, 3 F.3d at 1426; Sanchez, 992 F.2d at 247.
Plaintiffs claim that they were better qualified than other younger retained employees, allowing an inference of pretext. However, both Mr. Ozinga and Mr.
Mr. Furr was selected on the basis of position elimination and performance, making his qualifications relevant only in relation to other employees performing the same functions. Mr. Furr‘s manager, Mr. Becker, compared Mr. Furr to the other employee in the department performing the same duties and determined that the other employee was a superior performer. It is the manager‘s perception of the employee‘s performance that is relevant, not plaintiff‘s subjective evaluation of his own relative performance. Branson v. Price River Coal Co., 853 F.2d 768, 772 (10th Cir. 1988).
Plaintiffs rely heavily on Seagate‘s 1992 salary forecasts, arguing that the forecasts were based on the same criteria used in the RIF and thus the employees at the bottom of the forecast should have been laid off first. However, as the Plaintiffs’ own witness conceded, the salary forecasts fail to take into account the possibility of position elimination. Further, Plaintiffs attempt to rely on salary forecasts which combine persons
Finally, as circumstantial evidence of pretext, Plaintiffs claim that Sedlacek, West, and Diffin all ranked their subordinate managers in order of age. While older managers were ranked lower on a whole by these three managers, the uncontroverted testimony was that age was not a factor in the rankings nor were ages included on the rankings. Plaintiffs have produced absolutely no evidence that age was a factor in these rankings, and Plaintiffs each concede that they did not believe their managers would intentionally discriminate on the basis of age. A statistical coincidence does not rise to the level of pretext.
After a careful review of the record in this case, we have determined that even in the light most favorable to the them, Plaintiffs have failed to produce evidence sufficient to demonstrate pretext and to carry their burden of proving intentional age discrimination. Accordingly, we hold that the district court erred in denying Seagate‘s motion for judgment as a matter of law. Because we find that judgment as a matter of law should be
REVERSED and REMANDED for entry of judgment in accordance with this opinion.