Lead Opinion
Robert G. Courtney brought this action against his former employer, Biosound, Inc., under the Age Discrimination in Employment Act (ADEA), 29 U.S.C. § 626(c), alleging that Biosound failed to rehire him because of his age. The district court granted summary judgment in favor of Biosound, concluding that Courtney failed to produce evidence from which a finder of fact could reasonably conclude that the reasons proffered for the refusal to rehire were pretextual. We reverse and remand.
I. Background
Biosound markets ultrasound, cardiovascular imaging and electrocardiography equipment that is manufactured by its Italian parent corporation Esaote Biomedica (Esaote) and which is subject to classification and regulation by the Food and Drug Administration (FDA). Courtney began his employment with Biosound in 1979 when he was 49 years old. He was promoted to Manager of Quality Assurance and Regulatory Affairs sometime between 1981 and 1983. As for regulatory affairs, according to Biosound, Courtney was responsible for preparing, filing and maintaining submissions (such as 510(k) notifications)
Courtney continued to work for Biosound when its ownership changed in January 1989, but was terminated 10 months later as part of a reduction in force. During the month prior to Courtney’s termination, there were discussions among Biosound’s executives about Courtney’s age and health. When discussing Courtney’s severance, the management asked Courtney to sign a general release, which included release of ADEA claims. Although Courtney claims that he was the only one asked to sign such a release, Biosound’s then human resources manager could not recall whether other employees terminated in the reduction in force were asked to sign a release. Biosound eventually gave Courtney his severance payment without requiring him to sign the release.
After Courtney was terminated, Bio-sound’s president, Gerald Richardson, took over the company’s regulatory affairs. Richardson engaged Courtney as a regulatory consultant on several occasions during the eight to nine months following Courtney’s termination. The last time was in August 1990 when one of Biosound’s devices was impounded because of Biosound’s failure to make a required FDA fifing. Courtney’s submission resolved the immediate problem but was rejected later by the FDA, which instructed Biosound to cease its introduction of the product in question. Biosound then engaged another outside consultant, William McKay, to complete the necessary submission to the FDA. Biosound continued to retain McKay, who then reviewed and reorganized the regulatory files created by Courtney.
In February 1991, Biosound took over the regulatory affairs work for all of Esaote’s products. In this connection, Biosound solicited applications for the position of Manager of Regulatory Affairs. Biosound’s president, Richardson, interviewed four candidates including Courtney, who was 61 years old at the time. Richardson selected one candidate, 28-year-old Wayne Nethereutt, to meet
II. Analysis
We review a grant of summary judgment de novo, Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248,
In order to prove discrimination under the burden-shifting framework of McDonnell Douglas Corp. v. Green, 411 U.S. 792,
Because Biosound concedes on appeal that Courtney has established a prima facie case for age discrimination, the key inquiry here is whether Courtney has produced evidence from which a rational juror could infer that Biosound was untruthful about its proffered reasons for not rehiring Courtney. That is, whether Courtney has offered evidence showing either that a discriminatory reason more likely motivated Biosound’s decision or that Biosound’s proffered explanations are unworthy of credence. See Texas Dep’t. of
We agree with the district court that the first category of evidence on which Courtney has relied to establish pretext is insufficient. In proving that Biosound’s adverse decision was more likely motivated by his age, Courtney relied on the following direct evidence: 1) Garrett’s interview notes characterizing Nethereutt as being “young and [having] good growth potential;” 2) the discussions by the management of Courtney’s age and health prior to Courtney’s termination; 3) the fact that Courtney was asked to sign a release; and 4) a chart of Biosound’s 1987-92 hirings, which supposedly shows that Bio-sound was reducing the composite age of its workers.
Garrett’s remark as to Nethereutt’s youth is not probative of Biosound’s discriminatory intent not to hire Courtney. Garrett’s interview notes of Nethereutt stated: “[g]ood discussion, speaks well, neat, shares a philosophy of ‘team’ approaches, seems to have a good grasp on FDA procedures. Seems well motivated — says he enjoys interaction with FDA, et cetera, on regulatory affairs matters. — Young, good growth potential — .” Because “young” was grouped with “good growth potential,” the notation could lead a reasonable fact-finder to infer that Garrett considered Nethercutt’s youth as one of his positive attributes and that Garrett preferred a young candidate over an old one. Cf. Parker v. Federal National Mortgage Ass’n,
Similarly, Biosound executives’ discussions of Courtney’s age and health immediately prior to the reduction in force in 1989 are not probative of Biosound’s discriminatory intent not to rehire him in 1991. The company’s then human resources manager testified that prior to Courtney’s termination, there were concerns over Courtney’s age and health as related to the need for eliminating his job. The human resources manager stated: “the concern was for [Courtney’s] general welfare. This was not an easy decision on our part, on Biosound’s part, and there was a concern for — for him occupying that particular position that needed to be cut....” Apparently, Courtney had suffered a heart attack in 1987. As the district court correctly found, a reasonable inference from the human resources manager’s testimony is that the discussions of Courtney’s age and health militated against terminating Courtney. Given the context of those discussions, no reasonable juror could find the discussions probative of Biosound’s discriminatory intent to eliminate Courtney’s job, much less a discriminatory intent not to hire him in 1991.
Courtney’s last piece of direct evidence is a chart of Biosound’s 1987-92 hir-ings. Courtney’s theory is that Biosound’s hiring practice shows a trend to reduce the age of its workers. The ehart, however, seems unilluminating. Of the 59 people hired during 1987 to 1992, 13 were in the protected group. Of the 30 people hired in 1991 to 1992, the period during which Courtney was allegedly a victim of Biosound’s discriminatory hiring practice, 7 were in the protected group. Although the newly hired employees in the protected group were all in their forties, Courtney produced no evidence of the applicant pool or any related evidence that substantial numbers of older workers had actually applied for jobs with Biosound. See Mays v. Chicago Sun-Times,
Despite the failure to produce any direct evidence of Biosound’s discriminatory intent, Courtney has produced sufficient evidence to cast doubt on Biosound’s business reasons for its hiring decision. Biosound gave the following reasons for its decision to hire Nethercutt instead of Courtney: (1) Nethercutt has the communication skills Bio-sound was looking for (Biosound had placed a “high premium” on this characteristic because the poor communication skills of Es-aote’s outside consultants caused Esaote to consolidate its regulatory affairs with Bio-sound); (2) Nethercutt has the clinical trial experience required to handle products previously not marketed by Biosound such as Class III invasive devices, whereas Courtney has no clinical trial experience; (3) Courtney’s prior job performance was unsatisfactory as evidenced by the mishap in August
Biosound’s president, Richardson, claimed that he chose Nethercutt because Nethercutt had superior communication skills, whereas Courtney’s prior performance revealed that Courtney has poor communication skills. Richardson claimed that he had intended to find an individual with good communication skills because the non-approval of Esaote’s products was attributed to poor communication and because one of the new manager’s most challenging duties would be to “obtain complex technical information from two Italian facilities ... and communicate it to the FDA.” Yet, the non-technieal requirements listed in the job advertisement included only the ability to work independently, be organized and be attentive to details. The advertisement stated that an ideal candidate must be research-oriented but said nothing about communication skills. Given Biosound’s claim that it had placed a “high premium” on finding an individual who could satisfy its “unique communication needs,” a reasonable juror could conclude that Biosound would have included this qualification in the job listing had it honestly believed that it was of primary importance for the new position. See Gallo v. Prudential Residential Services,
Further supporting the inference that Bio-sound’s business reasons lack credence is the fact that the job advertisement also failed to mention the requirement of clinical trial experience, which Biosound now claims to be Nethercutt’s overriding qualification over Courtney. Biosound claims that the regulatory affairs manager faces the new challenge of dealing with “clinical trials to assure bio-compatability” of their invasive products, and Nethercutt, who had majored in biology and worked as a clinical affairs specialist/eoordi-nator, satisfied this job requirement. Again, this allegedly essential qualification was not mentioned in the advertisement, which provided only that “[t]he ideal candidate will possess a degree in Electrical Engineering or equivalent and be familiar with FDA regulations effecting [sic] medical devices (501 submissions, initial reports, etc.) and GMP regulations.” Perhaps the position itself, as Bio-sound now claims, suggested that clinical trials are an essential element of the job. However, Nethercutt, who began his employment with Biosound about July 1991 as the new manager of regulatory affairs, stated that as of April 1993, he had not been involved in any clinical trials at Biosound and that his FDA submissions had been only for Class II devices, the type for which Courtney had been responsible. At a minimum, the disparity between what Biosound claims to be essential elements of the position and what Nethercutt actually performs on the new job could lead a reasonable juror to disbelieve Biosound’s claim that it chose Nethercutt because of Nethereutt’s clinical trial experience. See Gaworski v. ITT Commercial Finance Corp.,
The third business reason asserted by Biosound is that Courtney’s prior job performance was poor. As a preliminary matter, we note that Biosound has stipulated that Courtney is qualified for the new position, since this is one of the elements of the prima facie case. See Hughes v. Derwinski,
Biosound contends that, although Courtney previously had received satisfactory or better performance evaluations, the mishap in August 1990, when he was a consultant, plup subsequent reviews of Courtney’s files by McKay and Richardson revealed that Courtney’s prior FDA submissions were of poor quality, unorganized and difficult to understand. Specifically, Richardson claimed that he had not previously questioned Courtney’s work performance because none of Courtney’s supervisors had reviewed Courtney’s FDA work and because the products were being approved by the FDA, which to Biosound meant that Courtney was doing a good job. Richardson’s claim of ignorance, however, can be called into question by the fact that at least one of Courtney’s prior supervisors, Spencer Vawter, had substantive knowledge of FDA procedures. Moreover, several of Courtney’s performance evaluations by other supervisors referred to Courtney’s “strength” in FDA compliance, and at least one evaluation stated that he was “extremely knowledgeable on regulatory affairs.” It is true that Vawter was the company’s president before Richardson and some of the evaluations were prepared before the new management took over, but that does not change the reasonable inference that Courtney’s regulatory work was a strength, not a weakness, and Richardson’s criticism of his prior performance was an afterthought to justify passing over him. See Dey v. Colt Construction & Development Co.,
With respect to the mishap in August 1990, Biosound suggests that Courtney’s inadequate submission caused the FDA to stop Biosound’s introduction of its principal product. Courtney’s FDA submission, which allegedly caused “potentially disastrous” consequences to Biosound, concerned an ultrasound imaging device that was impounded by the United States Customs Service. The device had not previously been thought to fall under FDA’s regulation of television monitor devices. Richardson retained Courtney to prepare an appropriate letter to the FDA. The letter resolved the immediate problem, but was rejected by the FDA two months later because it did not satisfy certain FDA requirements. According to Richardson, this incident caused Biosound to cease using Courtney as a consultant and contributed to Biosound’s decision not to hire him later. However, as Richardson has conceded, the requisite FDA filing for such television monitors was new to the industry and Richardson’s own research revealed that other companies, including large companies, had never reported such monitoring devices. Moreover, according to Courtney, he had informed Richardson of his lack of familiarity with cathode ray/radiological emission regulations, but Richardson told him to proceed with his general knowledge. Courtney also claimed that McKay, another consultant, was the one who had conducted the preliminary investigation and had advised Richardson and Courtney to proceed in the manner they did. Although it is certainly true that “an employer can set whatever performance standards he
Finally, Biosound emphasizes that the new regulatory affairs manager position was not the same job Courtney had held before, suggesting that Courtney is not as qualified as Nethercutt. It argues especially that while employed by Biosound, Courtney spent only about 20% of his time preparing FDA submissions and that those submissions were for only one type of product, ultrasound devices, most of which were “me too” products that allowed Courtney to rely on existing submissions as well as on the guidelines. Yet, Nethercutt’s deposition revealed that all of his prior FDA submissions also involved only “me too” products. Moreover, Nethercutt stated that he did not have experience in either cardiovascular devices or ultrasound products. It was also uncontested that Nethercutt lacked experience with Good Manufacturing Practices (GMP), which appeared to be a significant part of Biosound’s regulatory practice because Biosound is required under FDA laws to conduct periodic audits of its GMP compliance. Significantly, Biosound had listed GMP experience in the job advertisement.
It is true that an employer is free to choose an objectively less qualified candidate over a more qualified one. Indeed, a good deal of the arguments on which Courtney relies tend primarily to show that Biosound may merely have made a mistake or exercised poor business judgment in choosing one candidate over the other: Biosound could not have determined in one interview whether Nethercutt had good communication skills; it ignored glaring omissions in Nethercutt’s resume; and Nethercutt overstated in his resume his familiarity with medical devices. On the other hand, given Nethercutt’s lack of experience in the areas important to the new position and his subsequent training after he was hired, an inference could be drawn that Biosound hired Nethercutt because of his youth and good growth potential. Thus, a reasonable juror could conclude that Bio-sound’s reason for disfavoring Courtney because of his inferior qualifications is pretex-tual. Cf. Gallo,
This court has said that a grant of summary judgment which turns on the issue of discriminatory intent should be approached with “special caution.” Holland v. Jefferson Nat’l Life Ins. Co.,
Notes
. A 510(k) submission is a premarket notification to the FDA for a new or modified product which is substantially equivalent to a product already classified by the FDA.
. A Class II device is a device about which there is sufficient information to establish a performance standard to provide reasonable assurance of its safety and effectiveness. See 21 C.F.R. § 860.3.
.A Class III device is one about which insufficient information exists to establish a performance standard to provide reasonable assurance of its safety and effectiveness, and which is life supporting or life sustaining, or for a use which is of substantial importance in preventing impairment of human health, or which presents a potential unreasonable risk of illness or injury. See 21 C.F.R. § 860.3.
. The dissent argues that where the employee-plaintiff contests the employer's proffered reasons with his own contrary evidence, "[the] district court must still make a judgment as to whether the evidence, interpreted favorably to the plaintiff, would persuade a reasonable jury that the employer had discriminated against the plaintiff. If not, the court must grant the employer's motion for summary judgment.” (quoting Palucki v. Sears, Roebuck & Co.,
Dissenting Opinion
When Biosound expanded its regulatory affairs department, it published the following advertisement in the newspaper.
Biosound, Inc., a leader in cardiovascular imaging and electrocardiography has an opportunity for a Manager of Regulatory Affairs in our Indianapolis home office. This position is responsible for assisting the President with regulatory compliance and GMP activities.
The ideal candidate will possess a degree in Electrical Engineering or equivalent and be familiar with FDA regulations effecting medical devices (501 submissions, initial reports, etc.) and GMP regulations. Candidate must be organized, research oriented, have an attention to detail, and be able to work independently.
If you are interested in this challenging and rewarding opportunity please submit your resume with salary requirements to: Biosound, Inc., Human Resources Department, 7990 Castleway Drive, Indianapolis, IN 46250.
Company president Gerald Richardson, who at the time was directly responsible for regulatory affairs, selected four finalists from a list of about thirteen valid applicants. Appellant Robert Courtney was one of the final four that Richardson interviewed. But when Nethercutt got the job, Courtney sued, alleging age discrimination. The district court granted summary judgment in favor of Bio-sound. This court now reverses. Because I would affirm the decision of the district court, I respectfully dissent.
The court correctly states that “the key inquiry here is whether Courtney has produced evidence from which a rational juror could infer that Biosound was untruthful about its proffered reasons for not rehiring Courtney.” Opn. at 418. In other words, did Courtney offer evidence showing that a discriminatory reason motivated Biosound’s decision not to rehire him, or were Bio-sound’s proffered explanations for not rehiring him unworthy of credence? Opn. at 418. The court correctly knocks most of the wind out of the plaintiffs sails by affirming the district court on several key conclusions concerning alleged direct evidence of discrimination.
“[A] plaintiff may prove discrimination either directly, by proving that age was a determining factor in the employer’s decision, or indirectly, by proving that the employer’s proffered explanation is pretextual.” Perfetti v. First Nat. Bank of Chicago,
“To establish pretext, an employee must ultimately show by a preponderance of the evidence either ‘(1) that the employer was more likely motivated by a discriminatory reason, or (2) that the employer’s proffered reason is unworthy of credence.’ ” McCoy v. WGN Cont. Broad. Co.,
Courtney’s production falls well short of demonstrating that Biosound’s proffered reasons for hiring Nethercutt are unworthy of credence. Biosound asserted, among other things, that it hired Nethercutt instead of Courtney because Nethercutt had superior communication skills. In support of this assertion, Biosound pointed to evidence that Nethercutt demonstrated excellent communication skills in writing samples and during his job interview, and that his employment references supported this conclusion. Bio-sound also presented evidence that demonstrated that Courtney’s communication skills were more negative. Specifically, Biosound presented evidence that FDA filings written by Courtney were of poor quality, unorganized, and that it was difficult to read and determine the object of the submissions.
The court concludes that this proffered reason was pretextual, because “during Courtney’s employment with Biosound, there was never any criticism of Courtney’s lack of communications skills under either management. Courtney received positive reviews by eight different supervisors, and at least one of the evaluations stated that he had ‘good rapport with all groups.’” Opn. at 421. Courtney’s evidence could raise an inference that Biosound was mistaken in its assessment of Courtney’s skills, as compared with Nethercutt. But that is not enough. Weihaupt v. American Medical Ass’n,
The court also reasons that since the job advertisement failed to list “communication skills” as one of the preferred qualifications, reliance on this factor in hiring Nethercutt instead of Courtney created an inference of pretext. In considering a motion for summary judgment, however, a “court is not required to evaluate every conceivable inference which can be drawn from evidentiary matter, but only reasonable ones.” Parker v. Federal Nat. Mortg. Ass’n,
Moreover, Biosound offered additional reasons for its selection of Nethereutt over Courtney. Specifically, Biosound asserted that it selected Nethercutt instead of Courtney because it became aware of problems concerning work Courtney had previously performed for Biosound. In this regard, Biosound presented evidence that an outside consultant had reviewed Courtney’s past work and determined that FDA filings Courtney prepared were of poor quality, unorganized, and that they were difficult to read and comprehend. Biosound also presented evidence that it was necessary to hire a consultant to correct deficiencies in Courtney’s work. Obviously this was not a totally disqualifying factor since Richardson interviewed him, but the information would legitimately weigh in the balance.
The court rejects these proffered reasons, concluding that there is a reasonable inference that criticism of Courtney’s “prior performance was an afterthought to justify passing over him.” Opn. at 422. In support of this inference, the court cites to performance evaluations which referred to Courtney’s knowledge of regulatory affairs as a strength. These performance evaluations, all of which were prepared in years between 1979 and 1989, do not call into question Bio-sound’s proffered reason. The evidence Bio-sound presented demonstrated that it did not learn of problems with Courtney’s prior work until the consultant discovered them in 1991- — after Courtney had left the company. Where an employer advances specific reasons for an employment decision, rebuttal evidence should focus on those reasons. Lenoir v. Roll Coater, Inc.,
Courtney also failed to present any evidence rebutting Biosound’s contention that it hired another consultant to redo an FDA application that he prepared inadequately. The court addresses this issue by focusing on evidence that tends to show that it was not Courtney’s fault that the application was rejected. The court then reasons that evidence creates an inference that “Biosound did not honestly believe that Courtney was responsible for the mishap but only claimed that the mishap was Courtney’s fault as an excuse not to hire him.” Opn. at 423. This conclusion is unsupported by the law of this circuit. This court has consistently held that evidence which calls into question an employee’s
Where a plaintiff claims that an employer’s proffered reason for an employment decision is “unworthy of credence” it is tempting to think that only a jury — the judge of credibility — can consider that issue. Perfetti v. First Nat. Bank of Chicago,
. The court correctly concluded that (1) Garrett’s interview notes referring to Nethercutt as “young”; (2) management discussions of Courtney's age and health before his earlier termination; (3) the request for Courtney to sign a release; and, (4) a chart showing 1987-1992 hiring trends, were not valid bases for attributing discriminatory intent to Biosound. Opn. at 418-20.
