One employee from each age group was discharged. The fact that plaintiff was discharged and younger employees were retained therefore does not in itself establish discriminatory intent sufficient to state a prima facie case.
Plaintiff also argues that defendant's subsequent hires in the post-RIF period included people who were mainly in their twenties and thirties. This statistical information has been held to be irrelevant by several courts. Simpson v. Midland Ross Corp., 823 F.2d 937, 943-44 (6th Cir. 1987); O'Neal v. Riceland Foods, Inc., 684 F.2d 577, 581 (8th Cir. 1983). The relevant comparison is between those terminated and those employed by defendant at that time. The fact that subsequent hires were younger than the terminated employees merely reflects a younger available work force, and is not evidence of discriminatory intent.
Plaintiff next argues that a prima facie case may be established through indirect evidence without providing any evidence that the employer's motivation was based on age. Plaintiff cites Graefenhain v. Pabst Brewing Co., 827 F.2d 13, 18 (7th Cir. 1987) for the proposition that "a showing that the proffered justification is pretextual may itself be equivalent to a finding that the employer intentionally discriminated." Id. at 18. Graefenhain does not support that position. The Seventh Circuit was not addressing the plaintiff's burden of establishing a prima facie case, but rather the ultimate burden of proof. Once a prima facie case is established, a plaintiff may prevail without presenting actual evidence of discrimination:
if a plaintiff convinces the trier of fact that it is more likely than not that the employer did not act for its proffered reasons, the employer's decision remains unexplained and the inferences from the evidence from the inferences produced by the plaintiff may be sufficient to prove the ultimate fact of discriminatory intent.
Id. at 18. Plaintiff's argument is actually an attempt to establish a prima facie case by attacking the employer's justification for termination. The burden does not shift to the employer to produce evidence of justification until after plaintiff establishes a prima facie case. Watson, 487 U.S. 977, 101 L. Ed. 2d 827 , 108 S. Ct. 2777 . Plaintiffs suggested approach does not comport with Graefenhain or the law in this circuit. See Rose, 902 F.2d at 1421.
Plaintiff argues that defendant's stated reason for his discharge (RIF) was pretextual. That argument, discussed above, is not properly considered in determining whether plaintiff has met his initial burden. However, even were this court to consider plaintiff's arguments in that context, plaintiff has not established that the business reasons for reorganizing and reducing the size of NCB's former staff were pretextual. The number of CAM's in the department was reduced from seven to five, and remained at five for over a year.
Plaintiff argues that defendant terminated his employment even though it knew that attrition would necessitate future hiring. This argument essentially states that Pepsico should have continued to employ plaintiff indefinitely until one of the other CAM's quit. Plaintiff cites no law to support this position. Plaintiff has not shown that Pepsico had specific knowledge that certain CAM's would be leaving within a reasonable period of time. No reasonable inference of age discrimination arises from defendant's decision not to continue to employ additional workers in order to fill vacancies that may or may not occur in the future.
Plaintiff argues that defendant's failure to rehire plaintiff when a position later became available creates an inference of pretext and discriminatory intent. Two months after the RIF, one CAM voluntarily left Pepsico, and was replaced by a 39 year old. Plaintiff's argument is answered by Rose. The Ninth Circuit stated than "an inference of discrimination is raised where the terminated employee 'can show that others not in the protected class were treated more favorably.'" 902 F.2d 1422 at 1422-23 (emphasis in original) (citation omitted). In this case, plaintiff has not shown that any other terminated employees in the younger age group were rehired. In fact, defendant replaced the fifth CAM with a 39 year old, even though Mr. Cox, age 38, had recently been terminated.
Plaintiff attempts to establish an inference of discrimination from a magazine article quoting Rodney King, Pepsico's Senior Vice President for Human Resources.
Defendant moved to strike the evidence as inadmissible hearsay.
A magazine is hearsay under Federal Rule of Evidence 801. Plaintiff argues that the statement is nonetheless admissible as an admission of a party's agent under Fed. R. Evid. 801(d)(2)(D). As the proponent of this evidence, plaintiff must demonstrate it is "a statement by [Pepsico's] agent or servant concerning a matter within the scope of the agency or employment. . . ." OKI America, Inc. v. Microtech Inter., Inc., 872 F.2d 312, 314 (9th Cir. 1989). Plaintiff has not established King's capacity, that he was acting within the scope of his employment when the statement was made, or that his capacity in any way affected those who made the decision to terminate plaintiff. The court can not presume that a foundation for the evidence exists when plaintiff has not established the necessary foundation.
Plaintiff also argues that the statement is admissible as evidence of defendant's discriminatory attitude, rather than for the truth of the matter asserted, citing Hopkins v. Price Waterhouse, 490 U.S. 228, 109 S. Ct. 1775, 1791, 104 L. Ed. 2d 268 (1989). This argument falls within the domain of Rule 801(c), evidence offered solely to prove that a statement was made. Plaintiff has produced no evidence, however, to connect Mr. King or his statement to anyone involved in the decision to terminate plaintiff. This distinguishes this case from those cited by plaintiff, where the discriminatory statements were made by individuals involved in the decision-making process. It is undisputed that Mr. King did not make the decision to terminate plaintiff. Thus, "plaintiff has failed to establish a nexus between the alleged [discriminatory statement] and the decision to terminate." DeHorney v. Bank of America Nat. Trust and Sav., 879 F.2d 459, 468 (9th Cir. 1989). The statement would at best constitute a "stray remark" of arguably discriminatory character. Such remarks do not raise an inference of discrimination. Merrick v. Farmers Ins. Group, 892 F.2d 1434, 1438-39 (9th Cir. 1990).
Plaintiff argues that the fact Heylinger, a younger and less qualified employee, was retained by Pepsico gives rise to an inference of discriminatory intent. There is no dispute in the record, however, that performance rating was not a factor in the decision. The decision to terminate plaintiff was allegedly based on the characteristics of the accounts serviced by each CAM and the risk, or lack thereof, in consolidating account assignments. Heylinger, at age 42, was also in the "protected" age group. His retention does not reflect a discriminatory intent based on age. Indeed, had defendant sought to discriminate on the basis of age, it would have discharged Heylinger at age 42, rather than Mr. Cox at age 38. Plaintiff has failed to show that the retention of Heylinger infers any discriminatory animus.
Plaintiff contends that Nosek, the new Business Development Manager, interviewed all CAM's except for plaintiff on a trip to Northern California. Nosek testified that he was unable to meet with plaintiff because the other meetings ran overtime, and he had to catch a plane flight; but he held a meeting with plaintiff by telephone at a later date. This does not give rise to an inference of age discrimination.
Plaintiff proffers a statement made by Steve Lawrence at a personnel meeting. Plaintiff asked Lawrence whether employees should only wear blue and grey suits. At the end of his answer Lawrence added that, "Pepsi didn't necessarily like grey hair." Plaintiff has grey hair. Both Lawrence and plaintiff testified at their depositions that those in attendance generally laughed. In context, this statement must be viewed as a "stray remark." Merrick v. Farmers Ins. Group, 892 F.2d 1434, 1438-39 (9th Cir. 1990). It does not create a triable issue of fact of intent to discriminate. And plaintiffs have not shown that Lawrence participated in any way in the decision to terminate plaintiffs.
Finally, plaintiff argues that a severance offer, made by Pepsico contingent upon plaintiff signing a waiver and release of rights under age discrimination laws, establishes an inference of discriminatory intent. In Mundy v. Household Finance Corp., 885 F.2d 542, 547 (9th Cir. 1990), the Ninth Circuit stated that "the mere offer of money in exchange for a release of all claims cannot in itself raise an inference that [defendant's] articulated reasons for discharging [plaintiff] are pretext." All salaried employees released in the RIF by defendant, regardless of age, were offered the same severance conditioned upon signing the waiver.
In sum, plaintiff has raised numerous arguments in an attempt to establish a prima facie case of discriminatory intent. Most of the arguments attack defendant's RIF defense as pretext, and are not properly considered in determining whether plaintiff has demonstrated a prima facie case. Yet, even when considered in that context, they do not demonstrate an inference of discriminatory intent.
was, at the time of the acquisition of NCB by Pepsico, one of four members of the Operations Department. Three members of the department were over age forty, the oldest being 62 years old. Plaintiff was 59 when discharged.
Plaintiff attempts to meet the fourth element of the disparate treatment test by alleging that he was replaced by a younger employee, John Edeleanu. There is not sufficient factual support for this claim. Rather, the record demonstrates that upon Selby's departure, those of his tasks which were not eliminated were divided among the remaining members of the department. The fact the Edeleanu and others may have assumed some of his former duties does not establish a prima facie case of age discrimination through "replacement" of older with younger employees. In fact Edeleanu replaced Selby's boss' boss, Chet Grywczynski.
Defendant's reason for terminating Selby was that his job was effectively eliminated, because his job functions were duplicative of those performed elsewhere in the corporation. Specifically, equipment purchasing, one of Selby's employment tasks, was transferred from NCB to Pepsico's New York offices.
Plaintiff argues that Pepsico's reason for his termination was pretextual, and that this evidence is appropriately considered in determining whether a prima facie case has been established. As noted above, the court does not agree with that argument. Even considering this evidence, however, plaintiff has not raised a prima facie case of discrimination.
Plaintiff was not replaced, but rather his position was eliminated. It is uncontested that some of plaintiff's prior tasks were rendered duplicative after the acquisition and were eliminated. The remaining tasks were divided among existing employees or transferred to New York. This does not create an issue of pretext, nor does it establish an issue of fact of discriminatory intent.
Plaintiffs argue that there is a factual dispute on the issue of whether implied-in-fact contracts existed, limiting defendant's right to terminate them to instances of "good cause." Plaintiffs offer the statement of NCB Vice-president Campodonico that it was "common knowledge" or "practice" that employees were only terminated for good cause. This testimony may establish an issue of fact as to the existence of an implied-in-fact contract. However, that issue is not material to plaintiffs' termination in this case.
Assuming that implied-in-fact contracts did exist, they would serve only to limit termination to cases where "good cause" existed. A decision to reduce the size of a work force constitutes good cause. See e.g., Gianaculas v. Trans World Airlines, Inc., 761 F.2d 1391, 1395 (9th Cir. 1985). Pepsico did in fact reduce the work force. Plaintiffs have not established that the reduction was a pretext for age discrimination.
Plaintiff Nesbit also raises the claim that he was terminated because of a handicap. Nesbit suffered a heart attack in 1981, but was considered to be fully recovered at the time of the acquisition in December 1986. Because Nesbit did not suffer from a "physical condition" at the time of his discharge, his prior heart attack is not a handicap under California law, because it was not "disabling." American National Ins. Co. v Fair Employment & Housing Corp., 32 Cal. 3d 603, 608, 186 Cal. Rptr. 345 , 651 P.2d 1151 (1982). Nesbit has offered no evidence that the earlier heart attack was considered by defendant in the decision to terminate his employment.
IT IS SO ORDERED.
Dated: October 16, 1991.
CHARLES A. LEGGE
UNITED STATES DISTRICT JUDGE
ENTERED IN CIVIL DOCKET OCT 18 1991
JUDGMENT - October 18, 1991, Entered
For the reasons stated in the Order Granting Summary Judgment signed and filed this date, IT IS ORDERED that judgment be and is hereby entered in favor of defendant Pepsico and against plaintiff Charles A. Selby.
DATED: October 16, 1991.
CHARLES A. LEGGE
UNITED STATES DISTRICT JUDGE
ENTERED IN CIVIL DOCKET OCT 18 1991