LYTLE V MALADY
Docket No. 102515
Supreme Court of Michigan
Decided July 31, 1997
Rehearing granted post, 1202.
456 MICH 1
Argued January 16, 1997 (Calendar No. 16).
In an opinion by Justice RILEY, joined by Chief Justice MALLETT, an opinion by Justice CAVANAGH, joined by Justice KELLY, an opinion by Justice BOYLE, joined by Justice WEAVER, and an opinion by Justice BRICKLEY, the Supreme Court held:
Even when an employer‘s decision to reduce its work force is determined to be bona fide, an employee still may establish a genuine issue of material fact that the employer‘s justification for the discharge was not the true reason for its decision. In order to establish a genuine issue of material fact when an employer contends that its decision to discharge the employee was based on a work-force reduction, a discharged employee may not rely merely on unsubstantiated allegations or denials in the pleadings, but, rather, must come forward with admissible evidence, affidavits, or other evidentiary materials, demonstrating the existence of a factual dispute that the employer‘s articulated reason was merely a pretext to discrimination.
- Employment contracts for an indefinite duration are presumed to be terminable at the will of either party. To overcome the presumption, any verbal assurances or statement of policy and procedure regarding job security must be clear and unequivocal. A just-cause policy may be changed unilaterally to one of employment at will by giving reasonable notice to all affected employees. In this case, the method of notification instituted was not reasonably calculated to uniformly assure awareness of the change from
termination only for just cause to employment at will for all the affected employees. Thus, the plaintiff‘s legitimate expectation of just-cause employment was left undisturbed. - A reduction in work force for economic reasons constitutes termination for just cause; however, layoffs that are conducted must be bona fide, i.e., necessitated by business conditions. To establish a genuine issue of material fact that the employer‘s decision was not bona fide, the employee may not rely merely on unsubstantiated allegations or denials in the pleadings, but, rather, must comе forward with admissible evidence, affidavits, or other evidentiary materials, demonstrating the existence of a factual dispute.
- The plaintiff‘s relief, if any, rests in the Civil Rights Act. Under the act, to survive a motion for summary judgment, once an employer articulates a legitimate, nondiscriminatory reason for laying off a plaintiff, the plaintiff must introduce sufficient evidence to support two findings: that the employer‘s articulated reason for laying off the plaintiff is a pretext, and that the true reason is discriminatory. Under some circumstances, a plaintiff may not need to introduce additional evidence because the plaintiff‘s prima facie case may establish that the employer‘s articulated reason for its adverse employment action is a pretext and, in so establishing, the plaintiff may have created a question of fact regarding whether the true reason is discriminatory. A plaintiff will not always present a triable question of pretext simply by disputing the employer‘s stated reasons. Simply disproving the employer‘s articulated reason will suffice if, and only if, disproving the employer‘s reason also proves discrimination. In other instances, simply disproving an employer‘s articulated reason will not establish discrimination, and the plaintiff would then have to introduce additional evidence. In all actions involving claims of discrimination, there must be evidence upon which reasonable minds could conclude that discrimination was the true motive for the employer‘s adverse conduct against the plaintiff. That there may be a triable question of falsity does not necessarily mean that there is a triable question of discrimination.
- The plaintiff need not show that age was the determining factor in the defendant‘s decision to discharge her; rather, she need only prove that it was a determining factor. Despite the defendant‘s claim that it based its decision on economic necessity, the plaintiff produced evidence that would permit reasonable persons to conclude that age more likely than not was a determining factor in the adverse employment action the defendant took against the plaintiff. This evidence suggests that the defendant‘s reason for discharging
the plaintiff was only a pretext for favoring the younger hirees over the older plaintiff. - Viewing the evidence in a light most favorable to the plaintiff and drawing every reasonable inference in her best regard, the plaintiff created a genuine issue of material fact whether the defendant considered her sex in its decision to discharge her.
Justice CAVANAGH, joined by Justice KELLY, concurring in part and dissenting in part, stated that it is premature to decide whether defendants’ alleged reduction in work force was bona fide because it is clear that discovery in this matter was not complete. Thus, remand to the trial court is required for the completion of discovery and to afford the plaintiff an equal opportunity to present further evidence.
In order for a defendant to show that it discharged a plaintiff for bona fide economic reasons, it must demonstrate that adverse business conditions existed and that the elimination of the plaintiff‘s position was necessitated by those conditions. Where a plaintiff‘s proofs show that the elimination of the position was not motivated by the alleged reduction in work force, but rather by some other illegal reason, summary disposition should be precluded.
Justice BOYLE, joined by Justice WEAVER, concurring in part and dissenting in part, stated that the plaintiff is not entitled to assert a legitimate expectation of just-cause employment where the handbook on which she relies disclaims any intent on the part of the employer to bind itself to the contents of the handbook. In conjunction with the disclaimer of contractual obligation, the policy language is insufficient to overcome the presumption of at-will termination. If the disclaimer were found to be inapplicable because it does not expressly mention plaintiff‘s department, then the entire handbook must be found inapplicable.
Because the plaintiff did not present evidence sufficient to raise a triable issue of fact that her position would not have been eliminated but for her age, summary disposition for the defendant was appropriate.
Justice BRICKLEY, concurring in part and dissenting in part, stated that summary disposition of the wrongful-termination claim was properly awarded to the defendant. Justice WEAVER joined Justice BRICKLEY to further state that the lead opinion‘s finding with respect to the discrimination claims misapplies the governing law regarding the discrimination claims, and oversimplifies the facts of a complex case. Essentially, it allows a plaintiff to overcome summary disposition if the plaintiff can identify anyone who has less seniority, receives greater compensation, and does not share in the plaintiff‘s characteristics. Apparently, it is now irrelevant if the retained per
Affirmed in part and reversed in part.
209 Mich App 179; 530 NW2d 135 (1995) affirmed in part and reversed in part.
Bott & Spencer, P.C. (by Timothy J. Bott), for the plaintiff.
Varnum, Riddering, Schmidt & Howlett (by Joseph J. Vogan and Paul M. Kara) for the defendants.
OPINION
RILEY, J. In the matter now before us, this Court is asked to clarify the evidentiary threshold a discharged employee must satisfy in order to create a genuine issue of material fact when an employer аsserts that its decision to discharge an employee was precipitated by business conditions. We are also asked to decide whether a discharged employee may challenge an employer‘s decision to reduce its work force charging discrimination, even when the reduction in work force (RIF) decision has been deemed bona fide.
We hold that even when an employer‘s RIF decision is concluded to be bona fide, an employee may still establish a genuine issue of material fact that the employer‘s justification for discharging him was not the true reason for its decision to discharge. We also hold that in order for a discharged employee to establish a genuine issue of material fact when an employer contends that its decision to discharge the employee was based on a work-force reduction, the employee may not merely rely on unsubstantiated allegations or denials in the pleadings. Rather, he
In the instant case, we conclude that defendant‘s policy statement could have reasonably created a legitimate expectation of just-cause employment. We also conclude that defendant did have just cause to reduce its work force as a matter of law, but not with respect to this plaintiff. Rather, we hold that plaintiff did sufficiently establish a genuine issue of material fact regarding whether age was a determining factor in defendant‘s decision to discharge her. We also conclude that plaintiff presented evidence sufficient to establish a genuine issue of material fact regarding whether defendant considered her sex in its decision to discharge her.
We affirm the decision of the Court of Appeals finding that plaintiff could have reasonably had a legitimate expectation of just-cause employment. We also affirm its ruling that plaintiff raised a genuine issue of fact with respect to whether defendant discriminated against her on the basis of her age, as well as its decision concluding that plaintiff raised a genuine issue of material fact regarding her claim of sex discrimination.
FACTS AND PROCEEDINGS
On January 29, 1973, plaintiff Nancy Lytle was hired by defendant Howmet Turbine Components
The contents of this booklet are not intended to establish, and should not be interpreted to constitute any contract between the Misco Whitehall Division, Product Support Operations, Reactive Metal Operations or the Technical Center of Howmet Turbine Components Corporation and any employee, or group of employees.
For over twenty years we have concentrated on the production of the finest investment castings, with the development of policies and principles which aim at the attainment of pride in every day‘s work for every employee, plus the satisfaction of finding opportunities for individual growth and security. [Emphasis added.]
In 1981, defendant placed a disclaimer in its policy manual: “[T]he Company reserves the right to terminate employees without assigning cause; therefore,
At the time of plaintiff‘s hiring, John Ozar was the human resources director, serving as her immediate supervisor. Under Ozar‘s supervision, plaintiff received exemplary performance evaluations and was rewarded with a succession of promotions. In 1979, plaintiff spoke with Ozar about resigning and seeking employment elsewhere. Ozar assured plaintiff that her employment with defendant was secure and that she could expect advancement. Soon after that conversation, plaintiff was promoted to employment manager of the entire human resources department. Additionally, about the same time, Ozar hired Walter Boczkaja. Boczkaja became plaintiff‘s subordinate trainee. For approximately two years, Boczkaja trained under plaintiff, receiving promotions to various positions within the personnel department, and continued to be one of plaintiff‘s subordinates until 1989.
During the 1984-85 fiscal year, Ozar retired and was replaced by William Roof. In March 1987, Roof determined a need to decentralize the human resources department. He plannеd for each of the Whitehall divisions to have its own human resources representative. Roof hired defendant Michael Malady to head the Whitehall Machined Products Division and to serve as plaintiff‘s supervisor. Plaintiff was reassigned to serve as human resources representative for defendant‘s Ti-Ingot Division.2
In January 1989, on Malady‘s recommendation and with Roof‘s approval, plaintiff‘s job title was changed from human resources representative to human resources specialist. Plaintiff‘s duties, as well as her salary, remained the same. Malady suggests that the change was necessary to reduce the number of direct reports he had to address, in addition to “centraliz[ing] the total employment function under one person instead of having it split with two different people doing part of it.” He also asserts that he had “some performance concerns . . . with [plaintiff‘s] supervisory abilit[ies],” as reflected in his latest performance evaluation.
Plaintiff held her new position from January 1989, until her discharge on November 1, 1991.
Plaintiff contends defendant‘s policy manual created an expectation that her employment would not be terminated unless there was sufficient cause to do so. Also, she claims that she relied on verbal assurances by Ozar that her employment with defendant was secure.
At the same time reductions were being sought, defendant was embarking on a plan that would use work cells as the primary facility structure, where employees would be working in teams instead of in the traditional hierarchical order. Notwithstanding the fact that he had to eliminate fifteen percent of his projected 1992 budget, Roof was told by the Operhall management to somehow compile a list of employees from the human resоurces department to head an independent department. From that list someone was to be selected to oversee the development of the work-cell plan.
After reviewing the qualifications of those listed, Operhall management identified Malady and Boczkaja as the two most promising candidates. Malady was not available and Boczkaja, who was interviewed by Operhall management, later decided to stay on in his
By November 1, 1991, in an effort to comply with Wright‘s mandate, Roof had eliminated approximately $300,000. Roof needed to cut $439,950 in costs in order to meet Wright‘s directive of a fifteen-percent reduction in expenditures for the human resources department‘s 1992 operating budget. Roof eliminated four positions in the human resources department, which included two plant medical staff, the employee assistance program assistant, and plaintiff‘s position as human resources specialist. Roof contended that in terminating these four individuals, he focused on “functions” rather than “individuals or relative qualifications.” He suggested that the decision was based on who was absolutely critical and what they could get by without. Roof claimed that he terminated plaintiff because the primary function of her position involved hourly employees, where a substantial portion of the reduction in work force had already occurred, and the fact that little, if any, hiring was forecasted in the near future.
The same day plaintiff was discharged, defendant hired Jeff Billingsley to work in the training program for the work-cell project. As far as plaintiff understood, Billingsley “worked for the corporate office” and was merely assigned to take an office where
On November 22, 1991, Boczkaja completed a final performance evaluation on plaintiff, which Malady accepted, indicating that she would be rehired in the event a nonsupervisory, administrative position became available. When plaintiff was finally discharged, her duties were assigned to other persons within the human resources department.7
On January 7, 1992, plaintiff filed a complaint in the Muskegon Circuit Court against defendant Howmet, alleging: (I) breach of a contract providing for termination for just cause only, (II) age discrimination, and (III) sex discrimination.
Following some discovery, defendants Howmet and Malady moved separately for summary disposition pursuant to
The Court of Appeals reversed,8 and this Court granted defendant‘s application for leave to appeal.9
A motion for summary disposition under
I. JUST-CAUSE EMPLOYMENT
A
Employment contracts for an “indefinite” duration are presumed to be terminable at the will of either party, unless they contain distinguishing attributes or consideration in addition to the services to be rendered. Lynas v Maxwell Farms, 279 Mich 684, 687;
[T]he presumption provides assurance that oral contracts for an indefinite term, which fall outside the statute of frauds, will be recognized only where circumstances suggest both parties intended to be bound. [Rowe v Montgomery Ward & Co, Inc, 437 Mich 627, 636; 473 NW2d 268 (1991).]
The presumption of employment at will may be overcome by proof of “a contractual provision for a definite term of employment or a provision forbidding discharge absent just cause.” Rood v General Dynamics Corp, 444 Mich 107, 117; 507 NW2d 591 (1993), citing Rowe, supra at 636-637. A contract for just-cause employment may be established in three ways. First, it may be formed by an “explicit” promise. Rowe, supra at 668 (BOYLE, J., concurring), citing Perritt, Employee Dismissal Law & Practice (2d ed), § 4.1, p 173. Second, it may be “manifested by the words or other conduct” of the parties assenting to the agreement. Rood, supra at 117, n 17. Third, it may be “implied by law” because the employer‘s statement regarding its “policies and procedures instill[ed] [a] ‘legitimate expectation[]’ of job security in [the]
Under the third, when a policy manual is at issue, the court decides whether those sections that address employee discharge “are reasonably capable of being interpreted as promises of just-cause employment,” that is, whether an ordinary individual, marked by reason and sensibility, viewing the objective manifestations of the pаrties’ intent, could conclude that discharge would be only for just cause. Rood, supra.13
The fact that certain acts were identified as conduct that might lead to discharge did not indicate that these acts were the exclusive permissible grounds for discharge. Moreover, the Sears handbook had no language similar to that relied upon in Toussaint: “to treat employees leaving Blue Cross in a fair and consistent manner and to release employees for just cause only.”
Any verbal assurances or statements of policy and procedure regarding job security must be clear and unequivocal to overcome the presumption of employment at will. Rowe, supra at 640-641, quoting Bullock v Automobile Club of Michigan, 432 Mich 472, 517; 444 NW2d 114 (1989), and Farnsworth, Contracts, § 7.10, p 492. To reach this threshold, “the statements must clearly permit a construction which supports the asserted meaning.” Rowe, supra at 641.
In evaluating verbal expressions, the court considers “all the relevant circumstances surrounding the transaction, including all writings, oral statements, and other conduct by which the parties manifested their intent.” Id., citing Farnsworth, Contracts, § 7.10, p 492.
If the employer has manifested a just-cause policy, the employer may unilaterally change it to one of employment at will, regardless of whether such right was reserved by the employer from the outset:
The very definition of “policy” negates a legitimate expectation of permanence . . . a “policy” is commonly understood to be a flexible framework for operational guidance, not a perpetually binding contractual obligation. In the modern economic climate, the operating policies of a business enterprise must be adaptable and responsive to change. [In re Certified Question (Bankey v Storer Broadcasting Co), 432 Mich 438, 455-456; 443 NW2d 112 (1989).]
If the employer so chooses, then reasonable notice must be given to all those affected. “Reasonable notification is not necessarily actual notification“;14 rather, the method instituted must be calculated in its objective of providing notice to those affected and not invoke the appearance of bad faith in its assurance of actually giving notice. In re Certified Question, supra at 457 (“for the revocation of a discharge-for-cause policy to become legally effective, reasonable notice of the change must be uniformly given to affected employees“).
B
Plaintiff makes two arguments. First, plaintiff argues that certain representations were made by management regarding job security. She claims that when she was called by another company about employment, Archer and Joseph Sheehan, the persons who originally hired her and Ozar, plaintiff‘s initial supervisor, told her that “they did not want [her] to leave . . . . You do a good job. You‘re very secure here. We‘d like you to stay for long-term employment . . . .” She adds that individually, Ozar told her that “he would really like [her] to stay. [She] had a
We conclude that these claimed assurances plaintiff received from Archer, Sheehan, and Ozar were not sufficiently ” ‘clear and unequivocal to overcome the presumption of employment at will,’ ” Rood, supra at 119, quoting Rowe, supra at 645, but, rather, represented that they “hoped” the employment relationship would “have a significant duration.” Rowe, supra at 640, quoting Carpenter v American Excelsior Co, 650 F Supp 933, 936, n 6 (ED Mich, 1987) (“any orally grounded contractual obligation for permanent employment ‘must be based on more than an expression of an optimistic hope of a long relationship’ “) (emphasis previously supplied).
Second, plaintiff contends that she was told that the disclaimer15 she helped affix in newly hired employees’ policy manuals in 1981, applied only to new employees and that she “reasonably relied upon the written . . . statements and representations made by defendant[]” in its policy manual. When plaintiff was originally hired, the policy manual she received expressed that “[n]o employee will be terminated without proper cause or reason.”16
This language, standing alone, instilled in plaintiff a legitimate expectation of just-cause employment.
The contents of this booklet are not intended to establish, and should not be interpreted to constitute any contract between the Misco Whitehall Division, Product Support Operations, Reactive Metal Operations or the Technical Center of Howmet Turbine Components Corporation and any employee, or group of employees.
We conclude that a question of fact exists regarding whether defendant‘s pre-1981 manual permitted plaintiff to have a legitimate expectation of just-cause employment. See Rood, supra at 140-141.17 Defendant failed to clearly manifest an intent because of the contradictory language within the manual. The average employee may not have interpreted the penultimate paragraph to contradict the language of the just-cause provision. Furthermore, the penultimate paragraph specifically lists several divisions within defendant‘s Whitehall operation. Plaintiff‘s division, human resources, was not listed. See n 2. This alone could allow plaintiff to reasonably believe that the penultimate paragraph did not apply to her.18
Despite the contradictory provisions, defendant asserts that plaintiff had actual knowledge of the disclaimer she helped affix in newly hired employees’ manuals in 1981, extinguishing any expectations she may have had regarding just-cause employment. We agree she had knowledge of the disclaimer. She worked in defendant‘s human resource department and helped place the disclaimer in handbooks to be given to new employees. Notwithstanding, it is undisputed that plaintiff did not receive a new handbook, nor was she told that the disclaimer applied to her. At the September 14, 1992, summary proceeding, the following exchange took place between the trial court and defense counsel:
The Court: Did [defendant] give any notice to [plaintiff]?
[Defense Counsel]: There was no direct notice to her in terms of a memorandum, but she was involved in the company putting the sticker in the book.
The Court: Well, she didn‘t put it in her book, did she?
Justice BOYLE also contends, citing Heurtebise v Reliable Business Computers, Inc, 452 Mich 405; 550 NW2d 243 (1996), that “[a] conclusion that similar language does not protect a defendant from a just-cause claim would be logically inconsistent.” Post, p 59. Again, we observe that Justice BOYLE fails to account for the contradictory language within defendant‘s policy manual. Furthermore, this Court‘s decision in Heurtebise does not apply because that case concerned the enforceability of an arbitration provision found in a manual containing a contractual disclaimer. Accordingly, Heurtebise does not control because plaintiff‘s claim relies on the legitimate expectation test under Rood, supra at 137-140. Moreover, in Heurtebise, supra at 414, the defendant clearly manifested its intent not to “be bound to any provision contained in the handbook.”
[Defense Counsel]: Well, that‘s true.
Accordingly, because defendant could have easily provided notice to all those it intended to be affected by the disclaimer, we conclude that the method of notification instituted was not reasonably calculated to uniformly assure awareness of the change for all defendant‘s affected employees,19 as well as hold that plaintiff‘s legitimate expectation of just-cause employment was left undisturbed.
II. REDUCTION IN WORK FORCE
A
A reduction in a work force for economic reasons constitutes termination for “just cause.” McCart v J Walter Thompson USA, Inc, 437 Mich 109, 114; 469 NW2d 284 (1991), citing Friske v Jasinski Builders, Inc, 156 Mich App 468, 472; 402 NW2d 42 (1986).20 In Friske, supra at 472, the Court of Appeals held:
[D]ischarge for economic reasons, as determined by and within the complete discretion of the board of directors of defendant corporation, constitutes termination for sufficient cause. To hold otherwise would impose an unworkable economic burden upon employers to stay in business to the point of bankruptcy in order to satisfy employment contracts and related agreements terminable only for good or sufficient cause.21
Therefore, where a defendant asserts work-force reduction in defense of its decision to discharge an employee, that employee, to establish a genuine issue of material fact that the employer‘s decision was not bona fide, may not merely rely on unsubstantiated allegations or denials in the pleadings, but, rather, must come forward with admissible evidence, affidavits, or other evidentiary materials, demonstrating the existence of a factual dispute.
Having set forth the controlling principles, we now turn to plaintiff‘s contention that defendant lacked just-cause to discharge her.
B
Plaintiff contests the genuineness of defendant‘s economic motivation in discharging her. Plaintiff claims that her review of defendant‘s corporate salary reports evidences that defendant had actually hired more people from 1988 to 1990. However, this docu
In addition, plaintiff herself admits that defendant had been conducting an RIF from January 1988, until the time of her discharge, “as a method of dealing with [the] economic downturn . . . .” Notwithstanding, plaintiff submits that a Pechiney report called “Direct Magazine” published in May 1991, claimed sales figures for defendant corporation in the amount of $973 million, sales backlogs in excess of $1 billion, anticipated sales for 1991 of over $1 billion, as well as projected overall continued upward growth. We conclude, however, that defendant evidenced that Pechiney is a huge French-owned conglomerate. Sеe n 1. Defendant could have overall profitability, yet require reductions in operating and capital expenditures in its subsidiaries.23 Thus, our attention is
Plaintiff also asserts that her testimony in a case brought against defendant involving another employee supports her contention. See n 24. But, her allegations are based solely on “information and belief” or inadmissible evidence, and, as such, even though we are required to view plaintiff‘s case in its most favorable light, we are given nothing to view that would permit us to conclude that the record before us could be developed at trial to the extent that it would leave open an issue on which reason
Therefore, because we choose not to second-guess employers’ decisions regarding day-to-day management operations,25 and because plaintiff failed to present evidence demonstrating the existence of bad faith on behalf of defendant in its aim to reduce costs, we hold that defendant‘s decision to conduct a reduction in work force was proper as a matter of law.
C
We conclude that plaintiff‘s relief, if any, rests in the Civil Rights Act. See
In this instance, the Court of Appeals provided relief to plaintiff by concluding that defendant‘s decision to reduce its work force was a mere pretext to discrimination. It stated:
Bona fide economic reasons are just cause for discharge. McCart [supra at 114]. However, an employer may not use economic necessity as a pretext for unlawful discrimina
tion. Id. at 115. When the parties dispute the genuineness of the economic necessity, the question of just cause is one for the trier of fact. Ewers v Stroh Brewery Co, 178 Mich App 371, 378-379; 443 NW2d 504 (1989). Here, plaintiff has presented documentary evidence that Howmet was not in an economic downturn during this period and that in reality its sales and net income were increasing and that it continued to hire personnel while it was discharging current employees. Giving the benefit of every reasonable doubt to plaintiff, we find that she has raised a genuine issue of material fact concerning whether Howmet‘s proffered economic justification was a mere pretext for discrimination, and this issue is best left to the jury to resolve. McCart, supra at 115-116; Ewers, supra at 373-374. [209 Mich App 179, 198-199; 530 NW2d 135 (1995).]
In so holding, the Court of Appeals erred by confusing just-cause analysis with discrimination analysis under the Civil Rights Act. It held that plaintiff‘s discharge constituted a breach of contract. Id. at 199.27
Accordingly, we now turn to plaintiff‘s contention that she presented evidence establishing that, notwithstanding defendant‘s claim of economic necessity, its actual motive for discharging her was to discriminate against her on the basis of her age and sex.
III. DISCRIMINATION
A. CIVIL RIGHTS ACT
The Civil Rights Act is codified in
(1) An employer shall not do any of the following:
(a) Fail or refuse to hire or recruit, discharge, or otherwise discriminate against an individual with respect to employment, compensation, or a term, condition, or privilege of employment, because of religion, race, color, national origin, age, sex, height, weight, or marital status.
Ever since our decision in Matras v Amoco Oil Co, 424 Mich 675, 683; 385 NW2d 586 (1986), we have looked to McDonnell Douglas Corp v Green, 411 U.S. 792; 93 S Ct 1817; 36 L Ed 2d 668 (1973), and its progeny for guidance when addressing the Civil Rights Act.
In McDonnell Douglas, the Supreme Court promulgated a presumption-based approach that encompassed special rules governing the order of proof when a plaintiff attempts to establish his claim by circumstantial evidence. The McDonnell Douglas approach has been applied to other matters involving employee discharge as well as other types of disparate treatment cases, notwithstanding that McDonnell Douglas arose under the context of
The approach was not meant to be inflexible, but, rather, was developed to serve as “a sensible, orderly way to evaluate the evidence in light of common experience as it bears on the critical question of discrimination.”28 See Adama v Doehler-Jarvis, 115 Mich App 82, 95; 320 NW2d 298 (1982), citing Loeb v Textron, Inc, 600 F2d 1003, 1016-1017 (CA 1, 1979)
[W]e are willing to presume this largely because we know from our experience that more often than not people do not act in a totally arbitrary manner, without any underlying reasons, especially in a business setting. Thus, when all legitimate reasons for rejecting an applicant have been eliminated as possible reasons for the employer‘s actions, it is more likely than not the employer, who we generally assume acts only with some reason, based his decision on an impermissible consideration such as race.
Under the McDonnell Douglas approach, the burden of persuasion always rests with the plaintiff to prove that the prohibited discriminatory treatment by the employer was a determining factor used in its decision to discharge. St Mary‘s Honor Center v Hicks, 509 US 502, 507; 113 S Ct 2742; 125 L Ed 2d 407 (1993), citing Texas Dep‘t of Community Affairs v Burdine, 450 US 248, 253; 101 S Ct 1089; 67 L Ed 2d 207 (1981).29 Thus, the plaintiff must prove that the employer‘s explanation was a pretext to discrimination. The plaintiff can rely on the same evidence to prove both pretext and discrimination as long as the evidence would enable a reasonable factfinder to infer that the employer‘s decision had a discriminatory basis. Udo v Tomes, 54 F3d 9, 13 (CA 1, 1995).
The approach involves three stages. In the first stage, the plaintiff must establish a prima facie case
In the second stage, following the plaintiff establishing a prima facie case, the burden shifts to the defendant-employer to articulate a legitimate, nondiscriminatory reason for its decision. McDonnell Douglas, supra at 802. If the employer is unable to satisfy its burden of production, it is presumed that the basis of the employer‘s decision was discriminatory. Burdine, supra at 253.
If the defendant rebuts the presumption, then, in the third stage, the burden of production shifts back to the plaintiff creating “a new level of specificity.” United States Postal Service Bd of Governors v Aikens, 460 US 711, 715; 103 S Ct 1478; 75 L Ed 2d 403 (1983), quoting Burdine, supra at 255; see also McDonnell Douglas, supra at 802-805. At this point, the plaintiff must establish that the employer‘s articu
B. ST MARY‘S HONOR CENTER v HICKS
Since the inception of the McDonnell Douglas approach, for the judiciary, “[f]inding a balance between protecting victims of subtle prejudice on the one hand, and overreaching into legitimate decision-making of business on the other,” has proven itself a difficult task.33 This is because in McDonnell Douglas the “[Supreme] Court did not . . . attempt to give any meaningful guidance as to how the specification of the required prima facie proof would be determined” for the third stage. Malamud, The last minuet: Disparate treatment after Hicks, 93 Mich L R 2229, 2245 (1995).
The Supreme Court‘s most recent attempt to provide guidance came in Hicks. In that case, the Court addressed whether a trier of fact may issue judgment as a matter of law in favor of a plaintiff when the plaintiff has proven that an employer‘s proffered reason for its employment action is false. In ruling that this alone is not adequate, the Court rewrote the third stage of the McDonnell Douglas approach. According
Although the Hicks majority appeared to be unambiguous, “many readers have found it to be otherwise.” 1 Lindemann & Grossman, Employment Discrimination Law (3d ed), p 24. Consequently, it is not surprising that
However, the majority in Hicks rejected both extremes. See Equal Employment Opportunity Comm v Yenkin-Majestic Paint Corp, 1997 US App LEXIS 4348. Instead, it favored an intermediate position. See Hicks, supra at 510-511. The majority held that “[e]ven though (as we say here) rejection of the defendant‘s proffered reasons is enough at law to sustain a finding of discrimination, there must be a finding of discrimination.” Id. at 511, n 4. We, too, favor such a position and hold that when viewed in a light most favorable to the plaintiff, the evidence must create a material issue of fact on which reasonable minds could find that the employer‘s stated reason is a pretext for discrimination for summary judgment to be precluded. Furthermore, we hold that “evidence sufficient to discredit a defendant‘s proffered nondiscriminatory reasons for its actions, taken together with the plaintiff‘s prima facie case, [may be] sufficient to support [but not compel] a finding of discrim
In other words, we expressly adopt the intermediate approach endorsed by the United States Supreme Court in Hicks. For a plaintiff to survive summary disposition, he must always present an issue of fact regarding whether the defendant impermissibly discriminated. In some contexts, this may be shown merely by disproving the employer‘s articulated reason, if, and only if, disproving the employer‘s reason also shows discrimination. See Hicks, supra at 511, 519. See also Combs, supra at 1535. In other contexts, merely disproving an employer‘s articulated reason will not prove discrimination. The bottom line is that there must always be evidence upon which reasonable minds could conclude that discrimination was the true motive for the decision. At summary proceedings, the evidence must always be taken in the light most favorable to the nonmoving party.
C. MATRAS v AMOCO OIL CO
In Matras, the plaintiff was discharged as a result of the defendant‘s lay-off plan. In that case, we observed that “[a] jury c[ould] find that the discharge was ‘because of age’ even if age was not the sole factor“:
To establish a prima facie case of age discrimination when an employer lays off employees for economic reasons, the . . . employee [must] present sufficient evidence on the ultimate question—whether age was a determining factor in the decision to discharge the older protected employee. Accordingly, in the instant case, the McDonnell Douglas prima facie case approach folds into the traditional directed verdict/judgment notwithstanding the verdict standard. [Id. at 684-685.]
We concluded that the McDonnell Douglas approach folds into the traditional summary disposition or directed verdict standard because in the context of an RIF we assume that the burdens of production required by the respective parties under the approach have already been met.35 As a result, because the burdens of production have been satisfied by the respective parties, all its presumptions “drop out” and the plaintiff is left to prove that reasonable persons could draw differing conclusions regarding whether discrimination was the true moti
Even though our decision in Matras, as well as the Supreme Court decisions in McDonnell Douglas and Hicks came after full trials, the principle is the same in summary proceedings:
[O]nce the employer has advanced a legitimate, nondiscriminatory basis for its adverse employment decision, the plaintiff, before becoming entitled to bring the case before the trier of fact, must show evidence sufficient for the factfinder reasonably to conclude that the employer‘s decision to discharge him or her was wrongfully based on age. “Direct or indirect evidence of discriminatory motive may do, but ‘the evidence as a whole . . . must be sufficient for a reasonable factfinder to infer that the employer‘s decision was motivated by age animus.‘” Thus, the plaintiff cannot avert summary judgment if the record is devoid of adequate direct or circumstantial evidence of discriminatory animus on the part of the employer. [Woods v Friction Materials, Inc, 30 F3d 255, 260 (CA 1, 1994) (citations omitted, emphasis added).]36
We recognize, however, in the context of an RIF, that merely showing someone similarly situated to the plaintiff who is outside the protected class will not be sufficient. In concluding sо, we are guided by the decision of the Supreme Court in O‘Connor v Consolidated Coin Caterers Corp, 517 US 308, 311-313; 116 S Ct 1307; 134 L Ed 2d 433 (1996). In O‘Connor, the Court noted that a “substantially younger [person] than the plaintiff is a far more reliable indicator of age discrimination than is the fact that the plaintiff
As the very name “prima facie case” suggests, there must be at least a logical connection between each element of the prima facie case and the illegal discrimination for which it establishes a “legally mandatory, rebuttable presumption,” Burdine, supra at 254, n 7. The element of replacement by someone under 40 fails this requirement. The discrimination prohibited by the
ADEA is discrimination “because of [an] individual‘s age,”29 USC 623(a)(1) , though the prohibition is “limited to individuals who are at least 40 years of age,”§ 631(a) . This language does not ban discrimination against employees because they are aged 40 or older; it bans discrimination against employees because of their age, but limits the protected class to those who are 40 or older.* * *
Because the [Civil Rights Act] prohibits discrimination on the basis of age and not class membership, the fact that a replacement is substantially younger than the plaintiff is a far more reliable indicator of age discrimination than is the fact that the plaintiff was replaced by someone outside the protected class. [Id. at 311-313 (emphasis added).]
For these reasons, to survive a motion for summary disposition, once “the employer articulates a legitimate, non-discriminatory reason [for laying off the plaintiff,] . . . [t]he plaintiff must then introduce sufficient evidence to support two additional findings: (1) that the employer‘s articulated reason for [laying off the plaintiff] is a pretext, and (2) that the true reason is discriminatory.” Smith v Stratus Computer, Inc, 40 F3d 11, 16 (CA 1, 1994).
Under some circumstances, however, as we previously observed, a plaintiff may not need to introduce additional evidence, aside from the evidence he
D. APPLICATION
We will assume that plaintiff established a prima facie case under McDonnell Douglas because her claim centers on defendant‘s assertion that it was conducting an RIF. Accordingly, we must give the benefit of every reasonable doubt to plaintiff and determine whether she might sufficiently develop the record now before us to permit a jury to find that defendant‘s proffered explanation as applied to her38 was a pretext to discrimination.39
As evidence of age discrimination, plaintiff notes that it was only when Ozar retired and was replaced by Malady that problems arose. Thus, for approximately the first thirteen years with defendant corporation it is undisputed that she excelled in her duties as employment manager. We are unpersuaded that
Aside from plaintiff‘s problems with Malady, it is undisputed that approximately six weeks before plaintiff‘s discharge, defendant hired Achterhoff for the new position created at defendant‘s Operhall Research Center. Achterhoff was a thirty-one-year-old woman who was paid ten thousand dollars more a year than plaintiff.40 Conversely, plaintiff, who was forty-four years old at the time of her discharge, had nineteen years of experience in the human resources department.41 Further, over those nineteen years, it is undisputed that she had been awarded a succession of promotions. Yet, in September before her formal discharge, defendant, while conducting an RIF, decided to hire Achterhoff and discharge plaintiff.42 Furthermore, defendant‘s hiring of Achterhoff must be considered in light of the fact that plaintiff and
Plaintiff also evidenced defendant‘s inconsistency in its hiring Billingsley.44 Roof testified that he discharged plaintiff to reduce the 1992 fiscal budget for the human resources department, yet it is undisputed that at least part of Billingsley‘s salary was paid out of that budget.45 We note that plaintiff‘s proofs regarding Billingsley standing alone would present a rather weak case. Nevertheless, we consider it along with
the other evidence she presented with respect to her age-discrimination claim.46
Plaintiff need not show that age was the determining factor in defendant‘s decision to discharge her. Rather, she need only prove that it was ”a determining factor.” (Emphasis added.) Therefore, we are persuaded that, despite defendant‘s claim that it based its decision on economic necessity, plaintiff produced evidence that would permit reasonable persons to conclude that age more likely than not was a determining factor in the adverse employment action defendant took against plaintiff. She presented proof that defendant hired individuals, Achterhoff and Billingsley, who were younger and, thus, along with the inconsistencies in defendant‘s proffered explanation, created a reliable indication that “but for” plaintiff‘s age, she would not have been discharged. See O‘Connor, supra.
Thus, this case is distinguishable from Matras, supra, in which there was a lack of “evidence that management favored younger workers
Accordingly, this evidence suggests that defendant‘s reason for discharging plaintiff was only a pretext for favoring the younger hirees over the older plaintiff.48 We are persuaded that plaintiff‘s proofs make it more likely than not that “[defendant‘s] proffered explanation [as applied to this plaintiff] is unworthy of
As evidence of sex discrimination, plaintiff points to her dealings with Malady. The Court of Appeals agreed that this evidence was sufficient to raise “a genuine issue of material fact with respect to a prima facie case of gender discrimination, i.e., that she was treated more harshly than similarly situated male employees.” Id. at 193.49
While we agree that these facts raise suspicion, we are persuaded that the Court of Appeals erred by exclusively focusing on the confrontations plaintiff had with Malady. We conclude that it failed to properly determine whether defendant considered plaintiff‘s sex in its decision to discharge her. This is not to say that plaintiff‘s confrontations with Malady are irrelevant. Instead, these confrontations must be considered in light of the ultimate question—whether plaintiff‘s sex was a determining factor in defendant‘s decision to discharge her.
Standing alone, we believe that plaintiff‘s confrontations with Malady do not create a question of fact regarding whether sex was a determining factor in defendant corporation‘s decision to discharge her. However, these facts must not be viewed in a vacuum, but, rather, in light of the other facts now before us. The same day plaintiff was discharged, defendant hired Billingsley to work in the training program for the work-cell project. Billingsley had worked several different jobs, mostly involving manufacturing, yet was promoted to manager of training. Moreover, Roof stated that Billingsley‘s new position was to be included in his budget, despite defendant‘s
Reinforcing the genuineness of plaintiff‘s claim is the fact that plaintiff was not considered fairly for the position Achterhoff ultimately assumed. Inexplicably, plaintiff, who was fully qualified and possessed substantially more experience than Boczkaja, who had been her subordinate at one time, was not even considered for the new position the management of defendant‘s Operhall Research Center sought to create.51 In his deposition, Roof admitted that he never considered plaintiff for the new position, even though it included duties she could have assumed considering her nineteen years of experience at Howmet, as well as her “comparative qualifications” to those of Achterhoff, who eventually was hired.52 Of course, we
Thus, the record as a whole suggests, in light of common experience, that a genuine issue of material fact exists regarding whether defendant‘s proffered explanation for discharging plaintiff was merely a pretext to age and sex discrimination.54
In this case, we conclude that defendant‘s policy statement could have reasonably created a legitimate expectation of just-cause employment. However, defendant‘s reduction in work force was bona fide as a matter of law. Notwithstanding, we conclude that a genuine issue of material fact exists regarding whether age was a determining factor in defendant‘s decision to discharge plaintiff. Also, we conclude that a genuine issue of fact exists regarding whether defendant considered plaintiff‘s sex in its decision to terminate her.
Thus, we reverse the Court of Appeals decision holding that the trial court erred in summarily dismissing plaintiff‘s claim for breach of contract of just-cause employment. We affirm both the decision of the Court of Appeals concluding that plaintiff raised a genuine issue of material fact regarding whether defendant considered plaintiff‘s age as a determining factor in its decision to terminate her and its decision that a genuine issue exists regarding whether defendant considered plaintiff‘s sex in its decision to terminate her.
MALLETT, C.J., concurred with RILEY, J.
CAVANAGH, J. (concurring in part and dissenting in part). I agree with the lead opinion with respect to all sections except parts II(B) and II(C). Because discov
As to section II(B), the lead opinion claims that certain allegations plaintiff makes regarding whether defendant‘s RIF was bona fide are “not part of the record” or had not been presented by the date of the hearing on defendant‘s motion for summary disposition. See ante at 22. Furthermore, the lead opinion holds that plaintiff‘s “allegations are based solely on ‘information and belief’ or inadmissible evidence” and “we are given nothing to view that would permit us to conclude that the record before us could be developed at trial. . . .” Id. at 23.
I respectfully disagree. In a similar case against the same defendant, plaintiff was allowed to proceed to the jury regarding whether defendant‘s RIF was bona fide. In Krantz v Howmet Corp (Circuit Court No. 90-026815-CK; Court of Appeals No. 159045), defendant Howmet was sued under a wrongful discharge theory. Defendant maintained the same arguments and presented the same evidentiary material regarding the RIF as it has done here. However, plaintiff here has not had the same opportunity to present her evidence that the RIF was not bona fide.
Economic expert William King, Ph.D., provided key testimony in Krantz that, in his opinion, the RIF was not bona fide. However, before Dr. King had the opportunity to be deposed in this case, the court prematurely granted defendants’ motion for summary disposition. Dr. King‘s discovery deposition was scheduled for October 10, 1992, but was canceled in conjunction with the trial court‘s decision on summary disposition, received by plaintiff on October 7,
It is premature for this Court to decide whether defendants’ alleged RIF was bona fide because it is clear that discovery in this matter was not complete, and, as indicated by the jury verdict in plaintiff‘s favor in Krantz, it is certainly possible that a record may have been developed so that summary disposition for defendants should have been precluded. Therefore, I would remand this issue to the trial court for the completion of discovery so that plaintiff can have an equal opportunity to present evidence that defendants’ alleged RIF was not bona fide.
I also respectfully dissent from portion II(C) of the lead opinion, which states that “the Court of Appeals erred by confusing just-cause analysis with discrimination analysis under the Civil Rights Act.” Ante at 25. The Court of Appeals stated that “an employer may not use economic necessity as a pretext for unlawful discrimination. [McCart v J Walter Thompson USA, Inc, 437 Mich 109, 115; 469 NW2d 284 (1991).] When the parties dispute the genuineness of the economic necessity, the question of just cause is one for the trier of fact.” 209 Mich App 179, 198; 530 NW2d 135 (1995).
In McCart, we stated that in order for a defendant to show that it discharged plaintiff for bona fide economic reasons, it must demonstrate two things: that “adverse business conditions existed and that the elimination of plaintiff‘s position was necessitated by those conditions.” Id. at 115 (emphasis added). Therefore, where a plaintiff‘s proofs show that the elimination of his position was not motivated by the alleged
My position has been supported by two state supreme courts. In Coelho v Posi-Seal Int‘l, Inc, 208 Conn 106, 122; 544 A2d 170 (1988), the Connecticut Supreme Court stated:
We conclude that the question of whether an employer has terminated an employee because of a legitimate reduction in force or for other reasons is an issue to be determined by the trier of fact. An employer‘s contention that some employees were terminated as a result of a legitimate reduction in force does not necessarily establish that all employees were discharged for the same reason. An employer may not use a reduction in force as a pretext to terminate other employees in violation of contractual obligations, public policy or statutory rights. [Emphasis added.]
Further, in Flanigan v Prudential Federal Savings & Loan Ass‘n, 221 Mont 419, 426; 720 P2d 257 (1986), the Montana Supreme Court hеld that it was a matter for the trier of fact to determine whether an employee had been terminated as a result of a legitimate reduction in force or because of other factors.
Therefore, even if under the lead opinion‘s reasoning that the RIF was bona fide, where plaintiff has presented sufficient facts to show that she was not fired because of a legitimate RIF, but, rather, she was fired because of other illegal reasons, her claim for wrongful discharge should go to the jury.
KELLY, J., concurred with CAVANAGH, J.
BOYLE, J. (concurring in part and dissenting in part). I write separately because I agree that plaintiff‘s wrongful-discharge claim fails, but disagree with
I
The lead opinion concludes that plaintiff had a legitimate expectation of just-cause employment on the basis of a statement in the employee handbook, that stated, “No employee will be terminated without proper cause or reason and not until management has made a careful review of all facts.” Absent any qualifying language, this language would be sufficient to raise a legitimate expectation that employees would not be terminated without good cause. However, in an equally conspicuous segment, the final page of the handbook stated:
The contents of this booklet are not intended to establish, and should not be interpreted to constitute any con
tract between the Misco Whitehall Division, Product Support Operations, Reactive Metal Operations or the Technical Center of Howmet Turbine Components Corporation and any employee, or group of employees.
The lead opinion apparently concludes that the disclaimer of contractual obligation was ineffective with respect to plaintiff because she was employed by Howmet in the human resоurces department, which is not specifically mentioned in the disclaimer. I disagree.
The handbook‘s title appeared on the cover substantially as follows:
YOUR FUTURE WITH HOWMET
MISCO WHITEHALL DIVISION
PRODUCT SUPPORT OPERATIONS
REACTIVE METAL OPERATIONS
TECHNICAL CENTER
These are the same divisions mentioned in the disclaimer. It is true that plaintiff‘s department is not specifically mentioned in the disclaimer. However, plaintiff‘s department is also not mentioned anywhere else in the handbook. In short, plaintiff cannot have it both ways. Either the handbook applied to her employment relationship, in which case the just-cause language and the disclaimer must be read together, or it did not apply to her because the handbook was only intended to apply to those divisions specifically mentioned on the cover and in the disclaimer. In the latter case, of course, plaintiff could not assert the handbook as evidence of a just-cause policy for
A
Viewing the evidence in a light most favorable to the plaintiff, plaintiff has not created a reasonable question of fact that the handbook was intended to
The handbook‘s language indicates that it was intended to apply to plaintiff‘s employment relationship with her employer, just as it was intended to cover defendant‘s relationship with all employees to whom the handbook was distributed out of plaintiff‘s human resources department. On page 4 the handbook states:
WELCOME!
We are pleased to have you with Howmet Turbine Components Corporation. [Emphasis added.]
On page 5 the handbook states:
OUR PLEDGE
We believe Howmet is a good place to work. We pledge that we will honor the following principles in our relations with you . . . . [Emphasis added.]
Throughout this handbook we have outlined Howmet‘s obligations to you and the methods by which the Company will fulfill these obligations. . . .
There are regulations which govern our conduct as employees while on Company property, just as there are regulations governing us as citizens in the community in which we live or as members of clubs to which we belong. . . . [Emphasis added.]
Later, on page 24, the handbook states:
Your badge identifies you as an employee of Howmet and serves as your pass in and out of the plant. It must be worn in a visible position at all times while you are on Company property. [Emphasis added.]
Finally, just before the contractual disclaimer on page 25, the handbook states:
This handbook briefly outlines your privileges, benefits and responsibilities as an employee of Howmet. . . .
It is not possible in any one booklet to list all the benefits and mutually helpful regulations, which come to or govern all types of employees. If any portion of the information given is not completely clear to you, tell your foreman or supervisor what further information you want. [Emphasis added.]
Throughout the handbook, the terms “Howmet,” “the Company,” and “Howmet Turbine Components Corporation” are used interchangeably, indicating an intent to describe Howmet‘s relationship with the industry, its neighbors, and its employees, without differentiating among the various divisions or depart
B
I would conclude that the relevant statements in the handbook, the just-cause language and the disclaimer of contractual obligation, when read together, do not (1) “justify [an employee] in understanding that a commitment ha[d] been made,” and (2) “instill[] a legitimate expectation of just cause employment . . . .” Rood v General Dynamics Corp, 444 Mich 107, 139; 507 NW2d 591 (1993). In Rood we stated, “[W]e need not reach the question whether a disclaimer of intent to create contractual liability contained in an employee handbook is sufficient to disclaim liability under the legitimate expectations theory of Toussaint.” Id. at 142. See Toussaint v Blue Cross & Blue Shield of Michigan, 408 Mich 579; 292 NW2d 880 (1980). I would reach the question here and conclude that the disclaimer was effective to protect defendant from this type of liability.
[W]e therefore hold that, in all claims brought under the legitimate expectations theory of Toussaint, the trial court should examine employer policy statements, concerning employee discharge, if any, to determine, as a threshold matter, whether such policies are reasonably capable of being interpreted as promises of just-cause employment. If the employer policies are incapable of such interpretation, then the court should dismiss . . . . If, however, the employer‘s policies relating to employee discharge are capable of two reasonable interpretations, the issue is for the jury. [Id. at 140-141.]
In this case, the employer‘s relevant manifestations amounted to two separate representations. One demonstrated its termination policy; the other demonstrated that it intended no expression of a binding obligation to adhere to any stated policy. Thus, it cannot be said that the employer‘s actions were sufficient to justify an ” ‘understanding that a commitment ha[d] been made.’ ”3 Id. at 139. Moreover, although Rood
In Heurtebise v Reliable Business Computers, Inc, 452 Mich 405; 550 NW2d 243 (1996), we held that an arbitration clause in an employee handbook was unenforceable where the handbook also included a disclaimer of contractual intent. A conclusion that similar language does not protect a defendant from a just-cause claim would be logically inconsistent. In Edwards v Whirlpool Corp, 678 F Supp 1284, 1291 (WD Mich, 1987), relying on Dell v Montgomery Ward & Co, Inc, 811 F2d 970 (CA 6, 1987) (holding that a disclaimer of contractual intent and reservation of right to terminate at will is sufficient to overcome
The Toussaint holding created an exception to the general rule that employment relationships are terminable at the will of either party . . . . The Michigan Supreme Court suggested that a company could protect itself from liability by expressly disclaiming its intent to create anything but an at-will employment relationship. It did not find, however, that a company creates a just cause contract if it issues an employee handbook without including the magical phrase that the employment relationship remains an “at will” relationship. In this case, I find that defendant adequately protected itself by stating that it did not intend for the employee handbook to create a contract of employment.
Additionally, in Rowe v Montgomery Ward & Co, Inc, 437 Mich 627, 649-650; 473 NW2d 268 (1991), this Court approved the reasoning offered by the United States Court of Appeals for the Sixth Circuit in Dell, while holding that a reservation of at-will termination is sufficient to defeat any language that might give rise to an expectation of just-cause termination. In Dell, the employer disclaimed contractual intent regarding a progressive discipline process, stating that “[t]his procedure does not form an employment contract.” Id. at 972. The employer‘s clear disclaimer of contractual intent here, as in Edwards and Dell, was sufficient to defeat any expectation of just-cause termination arising out of other language in the handbook.
In In re Certified Question (Bankey v Storer Broadcasting Co), 432 Mich 438, 441; 443 NW2d 112 (1989), “this Court held that a company‘s written policy statements, which created legitimate expectations in the employee of discharge for cause only, could be
Thus, I would conclude рlaintiff is not entitled to assert a legitimate expectation of just-cause employment where the handbook on which she relies disclaims any intent on the part of the employer to bind itself to the contents of the handbook. In conjunction with the disclaimer of contractual obligation, the policy language is insufficient to overcome the presumption of at-will termination. Finally, I note again that if the disclaimer were found to be inapplicable because it does not expressly mention plaintiff‘s department, then the entire handbook must be found inapplicable for the same reason.4
I concur with part III of Justice RILEY‘S opinion to the extent that she adopts the “intermediate position” set forth in St. Mary‘s Honor Center v. Hicks, 509 U.S. 502, 510-511; 113 S. Ct. 2742; 125 L. Ed. 2d 407 (1993), and explained in the excerpts she references from 1 Lindemann & Grossman, Employment Discrimination (3d ed), ante at 30-33. I also concur with Justice BRICKLEY‘S analysis of the civil rights claims. As noted by Justice RILEY, the intermediate position we adopt today is the majority rule in the circuit courts of appeal. In Hicks, the Court stated:
The factfinder‘s disbelief of the reasons put forward by the defendant (particularly if disbelief is accompanied by a suspicion of mendacity) may, together with the elements of the prima facie case, suffice to show intentional discrimination. Thus, rejection of the defendant‘s proffered reasons will permit the trier of fact to infer the ultimate fact of intentional discrimination, and the Court of Appeals was correct when it noted that, upon such rejection, “[n]o additional proof of discrimination is required” . . . [Id. at 511.]
I understand this language, especially the reference to “suspicion of mendacity,” and its application by both Justice RILEY and Justice BRICKLEY, to refer to the
While I generally concur with Justice RILEY‘S statement of the law, I dissent from her application of the law in this case. For unknown reasons, her opinion eschews any analysis of plaintiff‘s proofs regarding pretext in the context of the civil rights claim. Ante at 28. The plaintiff‘s evidence rebutting defendant‘s presentation of its reasons for eliminating plaintiff‘s position was the overall profitability of the parent organization. As the majority recognizes, it was insufficient, standing alone, to raise a triable issue of falsity. At this point in the analysis, the question becomes whether a reasonable trier of fact could find from plaintiff‘s remaining proofs that, more likely than not, plaintiff‘s age or gender was a reason for the elimination of her position, i.e., that defendant‘s reduction in force was a pretext for discrimination.
Plaintiff‘s proofs consisted at best of equivocal evidence that she was more qualified than younger persons who were paid from different budgets. While an employer may not hide behind a termination by parceling out plaintiff‘s jobs, there is no dispute that defendant engaged in a work force reduction. Although some of plaintiff‘s duties were reassigned among other employees, the younger persons she points to also performed some different tasks from those involved in the eliminated position. Some of plaintiff‘s duties appear to have been assigned to persons other than those she references as evidence of discrimination, and some of plaintiff‘s duties, for example, hourly training, appear to have been elimi
Certainly, if Justice RILEY believed that the evidence produced by the plaintiff in Matras v. Amoco Oil Co., 424 Mich. 675; 385 N.W.2d 586 (1986), was insufficient to show “age was a determining factor in [the plaintiff‘s] discharge,” id. at 715 (RILEY, J., dissenting), the
I fail to understand how plaintiff‘s evidence here shows discriminatory animus. Rather, because the evidence of the RIF proves “the discharge . . . would have taken place without regard to age [or gender] discrimination, age [and gender were] not . . . determining factor[s] in [plaintiff‘s] discharge.” Matras at 691. Given the fact that Justice RILEY concluded in Matras that the civil rights laws were “‘not intended as a vehicle for judicial review of business decisions,‘” id. at 715, I am unable to understand how she can find this plaintiff‘s evidence sufficient to survive summary disposition under the articulated standard. In short, plaintiff‘s evidence does not create “a genuine dispute about [defendant‘s] intent or motive . . . sufficient . . . to permit a jury to find that the defendant‘s proffered reason [the RIF] is
If the plaintiff chooses to rebut defendant‘s offer of a legitimate business reason with evidence of falsity, she must do more than create a triable question of falsity. Stripped to its essentials, plaintiff‘s proofs, when viewed in a light most favorable to her, consist of evidence that she was replaced during a reduction in force by employees who were younger and possibly less qualified than she was.7 The proofs raise no suspicion of mendacity and are not sufficient to survive summary disposition. Therefore, I dissent from the lead opinion‘s result and would conclude that summary disposition was proper on all counts.
WEAVER, J., concurred with BOYLE, J.
BRICKLEY, J. (concurring in part and dissenting in part).
I. WRONGFUL TERMINATION
I agree with the lead opinion‘s resolution of the plaintiff‘s wrongful termination claim. The plaintiff created a question of fact whether she was a just-cause employee because she had a legitimate expectation of just-cause employment under Rood v. General Dynamics Corp., 444 Mich. 107; 507 N.W.2d 591 (1993). However, the plaintiff failed to raise a question of material fact that the defendant had just cause
II. DISCRIMINATION
I am unable to agree with the lead opinion‘s disposition of the plaintiff‘s claims of age and sex discrimination. As an initial matter, I do agree with the lead opinion‘s adoption of the intermediate approach. Ante at 32-33. I also agree that “‘[t]he plaintiff must then introduce sufficient evidence to support two additional findings: (1) that the employer‘s articulated reason for [laying off the plaintiff] is a pretext, and (2) that the true reason is discriminatory.’ Smith v. Stratus Computer, Inc., 40 F.3d 11, 16 (CA 1, 1994).” Ante at 36.
Though I agree with the lead opinion‘s statement of the law, I disagree with its application of the law to the facts of this case. The lead opinion finds that the plaintiff presented sufficient evidence of both age and sex discrimination to survive the defendant‘s summary disposition motion. Although I agree with the lead opinion‘s conclusion that this plaintiff has stated a prima facie case, she has offered little evidence which shows that the defendant‘s proffered business reason is false. Rather, she must rely on her evidence of the prima facie elements to prove that the defendant‘s proffered reason was a pretext for discrimination. I would find that this evidence was not enough to survive the motion.1
The lead opinion bases its holding on findings that the defendant hired two “substantially younger persons,” Ms. Achterhoff and Mr. Billingsley, at higher rates of pay at the same time that it terminated plaintiff. Ante at 42. The lead opinion concludes that this “anomaly in defendant‘s assertion that it was conducting an RIF” provided sufficient evidence that the plaintiff was terminated as a result of age discrimination. Id. However, this finding greatly oversimplifies the facts and ignores the defendant‘s evidence.
As the lead opinion points out, the plaintiff has stated a prima facie case, and the defendant has met its burden of production by stating a nondiscriminatory business reason for the plaintiff‘s termination. Thus, all presumptions have “dropp[ed] out of the picture.” St. Mary‘s Honor Center v. Hicks, 509 U.S. 502, 511; 113 S. Ct. 2742; 125 L. Ed. 2d 407 (1993). At this point, the plaintiff must show discrimination in one of two ways. First, she may offer direct or circumstantial evidence showing that the defendant was motivated by discriminatory animus. If persuasive, this will show that the employer‘s real reason was discrimination, thus disproving the proffered nondiscriminatory reason. Second, the plaintiff may also meet this burden by presenting evidence of falsity sufficient to show that the employer possessed a discriminatory intent. 1 Lindemann & Grossman, Employment Discrimination Law (3d ed), pp 26-27. However, because this defendant has stated a nondiscriminatory business justification for its actions, the plaintiff will only survive summary disposition if there is sufficient evidence to create a question of material fact that the defendant acted out of a discriminatory
1) THE HIRING OF ANDREA ACHTERHOFF
The hiring of Ms. Achterhoff does not provide evidence of age discrimination. Indeed, it is irrelevant for several reasons. First, Ms. Achterhoff took a newly created position as human resources representative for the Operhall Research Center.2 Indeed, Ms. Achterhoff was hired six to eight weeks before the plaintiff was terminated.3 Thus, the plaintiff‘s claims amount to an assertion that she should have been given Ms. Achterhoff‘s position rather than being laid off. However, civil rights laws do not require an employer to retain older workers during a reduction in force at the expense of younger employees with less seniority.4 Barnes v. GenCorp, Inc., 896 F.2d 1457, 1471 (CA 6, 1990) (“An employer is free to retain the younger, less senior employee if the employer reasonably believes he or she is better qualified for the position“). The retention of younger employees during a
Second, crucial decisions regarding the hiring of Ms. Achterhoff were made by people other than those who terminated the plaintiff. The plaintiff does not contest Mr. Roof‘s narration of the events surrounding this decision. Accordingly, it is undisputed that Operhall was not interested in any of the human resources staff, save Mr. Malady and Mr. Boczkaja. Thus, the decision not to consider Ms. Lytle for this position was made by individuals at Operhall, not Mr. Roof. Therefore, any discrimination was not committed by the person who terminated the plaintiff, and is not relevant to this case. McDonald v. Union Camp Corp., 898 F.2d 1155, 1161 (CA 6, 1990).
Even if Ms. Achterhoff‘s hiring was relevant to the plaintiff‘s claims, the lead opinion oversimplifies the facts and ignores crucial evidence that removes any suggestion of age discrimination. The lead opinion rests its conclusion on the fact that Ms. Achterhoff was less qualified than the plaintiff. However, this conclusion is based solely on the fact that Ms. Lytle had been with the defendant for a longer period. This ignores the fact that Ms. Achterhoff had ten years of supervisory human resources experience with other firms. The plaintiff had a similar number of years in a supervisory capacity with the defendant. Thus, the record actually shows that Ms. Achterhoff and the plaintiff had very similar employment histories. Moreover, Ms. Achterhoff received a degree in a human resources related field. The plaintiff had no such degree and had only partially completed a steno
Finally, the lead opinion also focuses on the fact Ms. Achterhoff received greater pay than the plaintiff. However, Ms. Achterhoff was compensated from the Operhall budget, whereas Ms. Lytle was paid from the human resources budget.7 The fact that the plaintiff was chosen for termination is consistent with the defendant‘s claim that it was motivated by a desire to reduce human resources costs. The lead opinion‘s reliance on the comparative salaries of these individuals fails to account for the significant fact that they were paid from different budgets. Indeed, this point removes the aberration that the lead opinion sees in the defendant‘s presentation.8
2) THE HIRING OF JEFF BILLINGSLEY
Similarly, the assignment of the training responsibilities at the Whitehall Division to Mr. Billingsley does not constitute evidence of discrimination. The lead opinion finds discrimination in the retention of Mr. Billingsley. Ante at 41, 47. However, this ignores several crucial facts. First, Mr. Billingsley was only five years younger than the plaintiff. I fail to see how this difference provides evidence of age discrimination.
Second, Mr. Billingsley had been working with a different department of the corporation since 1986. Thus, he was not hired into the corporation as Ms. Lytle left. Rather, he was merely given a new position as head of training as an expansion of his existing duties. While the lead opinion is correct that Mr. Billingsley had production experience, he had been training and development manager for the year preceding his promotion. Even the plaintiff acknowledged that Mr. Billingsley‘s previous job had been in training and that the new position focused on training as well. Further, the lead opinion ignores testimony that the defendant was changing its production methods, and that this process was going to require exten
The lead opinion also finds evidence of discrimination in the fact that Mr. Billingsley earned a greater rate of pay. However, this ignores the fact that only a part of Mr. Billingsley‘s salary came from the human resources budget. In contrast, the plaintiff‘s salary was paid entirely out of that budget, and she was terminated in an effort to reduce the costs of the human resources department. Thus, despite the lead opinion‘s description of events, Mr. Billingsley was given a newly created post that consolidated functions previously held by different departments. This type of personnel change is inherent in corporate restructuring and does not constitute evidence of discrimination.
I cannot agree that the defendant‘s treatment of Ms. Achterhoff and Mr. Billingsley evidences age discrimination. This defendant was reducing its work force—a process that involved the elimination of jobs and the reassignment of employees. The mere fact that two of the people retained happened to be younger than the plaintiff should not allow the plaintiff to raise a material question of fact concerning age discrimination. Matras, supra at 688.
I also disagree that the record reveals evidence of sex discrimination. I agree with the lead opinion that the isolated confrontations with Mr. Malady are insufficient to constitute evidence of discrimination. However, for the same reasons as discussed above, I do not feel that the hiring of Mr. Billingsley shows evidence of sex discrimination. Further, I fail to understand why the lead opinion ignores the employer‘s evidence that six of the eight people who took over the plaintiff‘s job duties were women. The plaintiff does not dispute this. Indeed, she testified that she was uncertain who had taken over her job duties and acknowledged that several of her former duties were assigned to female employees. This distribution of the plaintiff‘s job duties is inconsistent with sex discrimination. Rather, it is consistent with the employer‘s desire to reduce its payroll by eliminating the number of people working in its human resources department.9 Therefore, I do not believe that the plaintiff has shown that the defendant‘s nondiscriminatory business reason was false or that discrimination on the basis of sex was the true motive for its actions.10
III. CONCLUSION
While I agree that summary disposition of the wrongful-termination claim was properly awarded to the defendant, I disagree with the lead opinion‘s finding on the discrimination claims. That finding misapplies the governing law and oversimplifies the facts of this complex case. Essentially, it allows a plaintiff to overcome summary disposition if the plaintiff can identify anyone who: 1) has less seniority, 2) receives greater compensation, and 3) does not share in the plaintiff‘s characteristics. Apparently, it is irrelevant if the retained individual‘s job was different than that held by the plaintiff or if that individual was qualified for the job. Rather, the lead opinion second-guesses the employer‘s decisions on the basis of its assumptions concerning which employee was more qualified. Under this holding, I fail to see how any employer could conduct a reduction in force without facing an employment discrimination trial for each and every individual it terminates. I cannot agree that this is the correct application of current employment discrimination law.
WEAVER, J., concurred with BRICKLEY, J., only with respect to the discussion of age and sex discrimination.
Notes
Whether a legitimate expectation arises is an equitable issue that inquires into whether it is unjust to allow the defendant to deny the existence of just-cause employment. The issue is whether the language of the handbook would permit reasonable jurors to find that the employer created an expectation that employees would not be discharged except for cause. By its own terms the handbook expressly stated that no binding obligation was created by any statement therein. Thus, since the defendant did not manifest a clear intent, the plaintiff could not have had a legitimate expectation on the basis of statements in the handbook. The lead opinion asserts that I have improperly engaged in fact finding and credibility determinations. Ante at 38, n. 39. However, a court must consider “affidavits, together with the pleadings, depositions, admissions, and documentary evidence” when examining a motion made underIn other words, there are two alternative theories of enforceability that may support a claim of wrongful discharge in Michigan. While the first theory is grounded solely on contract principles “relative to the employment setting,” Rowe [v Montgomery Ward & Co, Inc, 437 Mich 627, 632; 473 NW2d 268 (1991)], the second theory is grounded solely on public policy considerations. As Justice BOYLE noted in her concurring opinion in In re Certified Question (Bankey v Storer Broadcasting Co), 432 Mich 438, 458; 443 NW2d 112 (1989), “the pure legitimate expectations leg of Toussaint was founded on the Court‘s common-law authority to recognize” enforceable obligations that arise ” ‘outside the operation of normal contract principles.’ ”
The common thread running through our decisions in Toussaint and Renny is the presence of clear and specific employer policy statements, regarding employee discharge. Otherwise stated, the handbooks in both Toussaint and Renny contained statements reasonably capable of being interpreted as promises to discharge only for just cause. Consistent with Toussaint and Renny, we therefore hold that, in all claims brought under the legitimate expectations theory of Toussaint, the trial court should examine employer policy statements, concerning employee discharge, if any, to determine, as a threshold matter, whether such policies are reasonably capable of being interpreted as promises of just-cause employment. If the employer policies are incapable of such interpretation, then the court should dismiss the plaintiff‘s complaint on defendant‘s motion for summary disposition.
MCR 2.116(C)(10) . If, however, the employer‘s policies relating to employee discharge are capable of two reasonable interpretations, the issue is for the jury. [Emphasis added.]
In Tennessee in the past year, the employment had dropped from the neighborhood of 650 employees down to around 400. LaPorte recently had a rather major layoff. The exact number of people, I‘m not sure, but I understand it was fairly large. In the meantime, we have also closed a plant in Plymouth, Michigan, and moved that to Dover, New Jersey. We closed Whitehall Machining here and moved that operation to Winstead, Connecticut, and we also recently closed the Reno, Nevada, plant and moved that operation to Whitehall. I know that Dover‘s employment has dropped from the neighborhood of 1600 people a few years back to about 1100 people now. I know that our employment is down in the neighborhood, I think, around 2450 or somewhere in that neighborhood here in Whitehall from a high, I believe, of around 4100 a few years back. [Emphasis added.]
Hence, Dr. King‘s testimony supports the conclusion that a company can have overall profitability and, yet, in order to maintain profitability, it may also need to reduce its work force. Even if Dr. King were to testify in this case, we are persuaded that his testimony would be of no consequence to invalidating defendant‘s company-wide RIF. Moreover, he would have an insurmountable burden in demonstrating that defendant‘s discharge of approximately fifty percent of its work force at its Whitehall operation was merely a pretext to discharging plaintiff.
This case thus stands in marked contrast to . . . Ewers . . . , where “plaintiff relied on deposition and documentary evidence which he argued indicated that defendant was experiencing substantial economic growth and operating at a substantial profit before and after his discharge.” Id. at 375. [McCart, supra at 115-116.]
In this case, the Legislature has provided plaintiff recourse under the Civil Rights Act.
To meet this burden, the [plaintiff] must prove both that the employer‘s articulated reason is false, and that discrimination was the actual reason for its employment action. See Hicks, supra at [511] n 4. If [the] plaintiff “fails to show ‘pretext,’ [for discrimination] the challenged employment action ‘must stand.‘” Id. at [516], n 6 (quoting McDonnell Douglas, [supra] at 807).