United States Court of Appeals,
Eleventh Circuit.
No. 95-9576.
Cecile L. MADDOW, individually and on behalf of those similarly
situated persons named below: Nancy A. Gattone, Shirley M. Wesson,
Richard J. Gress, Gary W. Coble, Fran Silverman, Renate Washburn,
Sandra Record, Joann Maste, Plaintiffs-Appellants,
v.
PROCTER & GAMBLE COMPANY, INC., Noxell Corporation, Defendants-
Appellees.
March 19, 1997.
Appeal from the United States District Court for the Northern
District of Georgia. (No. 1:93-CV-2790-WBH), Willis B. Hunt, Jr.,
District Judge.
Before BIRCH, Circuit Judge, and HILL and FARRIS *, Senior Circuit
Judges.
FARRIS, Senior Circuit Judge:
Cecile Maddow, individually and on behalf of eight opt-in
plaintiffs, brought suit against the Procter and Gamble Company and
the Noxell Corporation, a subsidiary, for violation of the Age
Discrimination in Employment Act, 29 U.S.C. §§ 621-634 (1994). The
plaintiffs appeal the district court's 1) grant of summary judgment
against them on the claim of discrimination, 2) grant of summary
judgment against Maddow on the claim of adverse affect, 3) order
compelling discovery and awarding attorney fees for failure to
comply with discovery, and 4) denial of joinder of additional
plaintiffs.
We have jurisdiction pursuant to 28 U.S.C. § 1291. We reverse
in part and affirm in part.
*
Honorable Jerome Farris, Senior U.S. Circuit Judge for the
Ninth Circuit, sitting by designation.
BACKGROUND
Plaintiffs, each age forty or above, were sales
representatives for Max Factor, a cosmetics company. In July 1991,
Procter and Gamble acquired Max Factor and assigned it to Noxell
Corporation, a wholly-owned subsidiary. Noxell decided to
terminate a substantial number of the former Max Factor sales
representatives but none of its own original sales force.
Noxell and Max Factor had used different sales strategies.
Noxell used a data-based market strategy relying on demographics
and other data. Max Factor used little data and was more
relationship-based. Noxell generally hired college graduates,
while most Max Factor representatives lacked a college education.
In January 1992, Larry Anderson, Noxell's Vice President of
Sales, addressed the company's sales personnel. He stated that the
image of the new division would be "new and young.' He also
remarked that the Noxell representatives were "young and energetic'
and that the Max Factor personnel were "old, mature, and
well-trained.'
In March 1992, a Noxell district manager interviewed each Max
Factor sales representative. Based on the interview, the manager
rated each interviewee in seven categories. These ratings were
summed to produce a Recruiting Quality Index for each candidate.
Noxell depositions and affidavits state that this Index has been
reliable in predicting future sales performance.
According to Noxell depositions and affidavits, the Recruiting
Quality Index was the sole factor in the selection process. Prior
sales experience and performance were not considered. Employment
was offered to anyone who scored sixteen or higher. In addition,
Noxell decided to retain at least one former Max Factor employee at
each level in each geographical sales district. To meet this goal
Noxell retained some former Max Factor employees who received
scores of fourteen or fifteen. The plaintiffs offered evidence
that six employees receiving these scores were retained, only one
of whom was over forty, and that all three employees receiving
these scores who were not retained were over forty.
Maddow received an Index rating of sixteen. One other
plaintiff received a rating of fourteen. The rest were each below
thirteen. During Maddow's interview she stated that she would not
accept a sales position that was not based in Atlanta, her current
location. Maddow's interviewer, who believed she was under forty
at the time of the interview, noted that Maddow's likelihood of
accepting a job offer as "high."
After Maddow's interview, former Max Factor manager Wade
McLelland left a message on her answering machine stating that the
company needed to know her age because of an "age factor." She
responded that she was forty-one. Noxell then offered Maddow a
sales position in Huntsville, Alabama, which she turned down. Two
younger Max Factor sales representatives in the same district as
Maddow with higher Index scores were offered positions in locations
other than their Max Factor districts. None of the plaintiffs
besides Maddow was offered a position.
Depositions and affidavits from McLelland and other Noxell
employees state that tentative decisions had been made when
McLelland called about the "age factor' and he was getting the
information to assess the impact of proposed terminations for
federal equal employment opportunity laws and affirmative action
regulations. However, Noxell manager Strause stated that he had
directed the McLelland inquiry, as the result of a request from
another manager or Human Resources, and that he was not given any
reason for the inquiry.
One of the plaintiffs was told at the time he was informed of
his termination that he did not fit the Procter and Gamble profile
and that at his age he should consider retirement.
An affidavit of Mary Nelson, a former Max Factor sales
representative who is not a plaintiff, states that she was told by
her former Max Factor sales manager that the interviews were a
formality and she would not be hired by Noxell because she was over
forty. The sales manager attributed this statement to her boss.
The former sales manager was not a decision-maker regarding Nelson
or any of the plaintiffs, and denies making the statement.
While Noxell was terminating former Max Factor sales
representatives, it was hiring new, inexperienced sales
representatives. Most were college graduates. Noxell followed a
different interview procedure with these recruits than with the
former Max Factor employees, part of which was more objective than
the Max Factor interviews.
Sixty-eight former Max Factor sales representatives were
interviewed by Noxell. Thirty-two of the sixty-eight received
offers (not including Maddow and one other sales representative who
claim they were constructively discharged). Of those receiving
offers, twenty-seven were under age forty and five were over. Of
those not receiving offers, fourteen were under forty and
twenty-two were over. The plaintiffs' expert testified that the
standard deviation for this distribution was 3.83, or a less than
a one in one thousand chance of having randomly occurred. His
statistical analysis did not account for individuals' Recruiting
Quality Index scores. Ninety-one percent of Noxell's original 112
person sales force was under age forty.
The district court granted summary judgment for the
defendants, holding that the plaintiffs had not raised a genuine
issue of material fact that the defendants' use of Recruiting
Quality Index scores was a pretext for age discrimination. The
court also held that Maddow had not been adversely affected because
she had been offered the position in Alabama.
During discovery, the defendants requested plaintiffs' tax
returns and sent an interrogatory seeking detailed attorney fee
arrangement information. Plaintiffs objected to the tax return
request on privilege and relevance grounds, and instead provided
alternative documentation of earnings such as W-2 and 1099 forms.
In response to the interrogatory, the plaintiffs stated that the
fee agreement was a contingency and the individual plaintiffs were
responsible for costs, but did not disclose the precise contingency
percentage.
The district court granted the defendants' motion to compel
discovery of these two items, and granted $3,000 in attorney's fees
to the defendants.
On March 2, 1994 the parties filed a stipulated Scheduling
Order, which was approved by the district court on March 14. One
paragraph of the Order allowed individuals similarly situated to
the plaintiff to file opt-in notices within sixty days. On March
18, defendants informed plaintiffs that information on Max Factor
employees could be obtained from defendants' personnel files.
Plaintiffs did not obtain the necessary information until late May
and early June due to their own scheduling difficulties.
Plaintiffs did not seek a modification of the Scheduling Order. On
July 5, 1994; August 16, 1994; and August 26, 1994 plaintiffs
filed motions to join a total of eight additional persons. The
August 16 motion included a motion to modify the Scheduling Order
to extend the joinder deadline. The district court held that these
individuals were similarly situated to plaintiffs, but denied their
motions to join as untimely.
DISCUSSION
I. Summary Judgment on Discrimination Claim
We review a district court's grant of summary judgment de
novo. Jameson v. Arrow Co., 75 F.3d 1528, 1531 (11th Cir.1996).
In analyzing a motion for summary judgment, we must view the facts
in the light most favorable to the nonmoving party and make all
factual inferences in favor of that party. Hairston v. Gainesville
Sun Publishing Co., 9 F.3d 913, 918 (11th Cir.1993).
"In an employment discrimination case, the plaintiff must
produce sufficient evidence to support an inference that the
defendant employer based its employment decision on an illegal
criterion." Jameson, 75 F.3d at 1531. We "generally ... eschew[
] an overly strict formulation of the elements of a prima facie
case, particularly in age discrimination cases." Id.
In age discrimination cases, once a plaintiff has made a
prima facie case, the employer may then rebut the inference of
discrimination by providing legitimate, non-discriminatory reasons
for its decision. The burden than shifts back to the plaintiff to
raise a genuine factual question as to whether defendant's stated
reason is mere pretext. Hairston, 9 F.3d at 920. However, "The
grant of summary judgment, though appropriate when evidence of
discriminatory intent is totally lacking, is generally unsuitable
... [where] plaintiff has established a prima facie case because of
the "elusive factual question' of intentional discrimination." Id.
at 921 (citing Texas Dep't of Community Affairs v. Burdine, 450
U.S. 248, 256, 101 S.Ct. 1089, 1095, 67 L.Ed.2d 207 (1981)).
A plaintiff may establish a prima facie case of age
discrimination in a reduction-in-force case by (1) demonstrating
that he was in a protected age group and was adversely affected by
an employment decision; (2) showing he was qualified for his
former position or another position at the time he was adversely
affected; and (3) producing circumstantial or direct evidence from
which a reasonable factfinder could conclude that his employer
intended to discriminate on the basis of age in reaching the
decision at issue. Verbraeken v. Westinghouse Elec. Corp., 881
F.2d 1041, 1045-46 (11th Cir.1989). Plaintiffs were all in a
protected age group, were adversely affected (Maddow is discussed
in part II, infra), and were qualified. Therefore, the question is
whether the plaintiffs produced sufficient evidence of age
discrimination.
Evidence submitted by the plaintiffs satisfies their burden
of establishing a prima facie case of age discrimination. The
defendants rebutted the prima facie inference with the alleged
legitimate, non-discriminatory reason of basing termination
decisions on the Recruiting Quality Index. The plaintiffs thus
have the burden of establishing that defendants' proffered reason
is a pretext.
Because this is a summary judgment motion, the plaintiffs
need only raise a genuine issue of material fact that the reason
was a pretext; they do not need to actually prove it. Hairston,
9 F.3d at 921. The plaintiffs' evidence clears this hurdle. Any
reading of prior case dicta to the effect that plaintiffs need to
prove pretext at the summary judgment stage is incorrect.
Defendants' contention that the evidence used by the
plaintiffs to establish the prima facie case may not be used to
raise a genuine issue as to pretext, and their implication that a
genuine issue as to pretext cannot be raised circumstantially, are
unsupportable. Evidence offered in the prima facie case may be
sufficient to raise a genuine issue of material fact regarding
pretext. Id.
The statistical evidence plaintiffs offered is sufficient for
a reasonable person to infer discrimination based on age and that
the reasons given were pretextual. The plaintiffs' expert
testified that the standard deviation for the distribution of
terminations based on age was 3.83. This distribution has a less
than one in one thousand chance of occurring randomly. A standard
deviation of two or three is enough to support an inference of
discrimination. Kilgo v. Bowman Transp., Inc., 789 F.2d 859, 871
n. 18 (11th Cir.1986) (citing Castaneda v. Partida, 430 U.S. 482,
496 n. 17, 97 S.Ct. 1272, 1281 n. 17, 51 L.Ed.2d 498 (1977)). The
defendants failed to rebut this evidence or the expert. Two
reasonable conclusions can be drawn from statistical evidence this
strong: the defendants intentionally discriminated or the
Recruiting Quality Index system unintentionally favored younger
people. Despite defendants' plausible claim that there was no
discrimination, the former is a reasonable inference, and satisfies
plaintiffs' burden at this stage.
In addition to the statistical evidence, there is also
circumstantial evidence of age discrimination. This includes the
Vice-President of Sales' statement that the new division would have
a "new and young' image and that the original Noxell employees were
"young' while the former Max Factor employees were "old and
mature'; the phone message for Maddow mentioning an "age factor';
the interviewer's listing Maddow as highly likely to accept an
offer and then offering her a position that she had already stated
she would turn down; the employment offers to some representatives
who scored only fourteen or fifteen; the statement to one
plaintiff that he should consider retiring at his age; Noxell's
use of an interview procedure for former Max Factor employees that
was different from the usual procedure; and Noxell's decision to
retain its predominantly young original sale representatives.
Taken alone, any one of these may not be enough. However, as a
whole, a reasonable person could infer discrimination.
Finally, Mary Nelson's statement that she was told Noxell was
only hiring representatives under forty and the interviews were
only a formality is direct evidence of discrimination. Viewing
this evidence in the light most favorable to the plaintiff, it
creates a genuine issue of material fact. The statement may not be
credible, but that is a decision for the factfinder, not for
summary judgment.
The defendants' explanation for their termination decisions
is entirely plausible. However, the statistical, circumstantial,
and direct evidence in the record, when viewed in the light most
favorable to the plaintiff, creates a genuine issue of material
fact that defendants proffered reason is a pretext and that there
was discrimination. Summary judgment against the plaintiffs on the
issue of discrimination must therefore be reversed.
II. Summary Judgment on Adverse Affect Claim
To make a prima facie case of age discrimination, an employee
must show that she was adversely affected by an employment
decision. Verbraeken, 881 F.2d at 1045-46. The district court
held that Maddow was not adversely affected because she was offered
the position in Alabama, and thus was not constructively
discharged.
However, requiring a transfer can be a constructive
discharge. Stamey v. Southern Bell Telephone & Telegraph Co., 859
F.2d 855, 860 n. 11 (11th Cir.1988). Further, constructive
discharge is not the only possible adverse affect in employment
cases. Id. at 860. Under the Age Discrimination in Employment
Act, it is unlawful for an employer "to fail or refuse to hire or
to discharge any individual or otherwise to discriminate against
any individual with respect to his compensation, terms, conditions,
or privileges of employment because of such individual's age." 29
U.S.C. § 623(a) (emphasis added).
Maddow presented evidence that when her interviewer believed
she was under forty he gave her a Recruiting Quality Index score of
sixteen. The interviewer noted that she had a high likelihood of
accepting an offer after being told explicitly that she would only
accept an offer in Atlanta. Maddow was then left a message asking
her age. After Maddow told Noxell she was forty-one, she was
informed that the only position she was being offered was in
Alabama.
Maddow has created a reasonable inference that the terms and
conditions of her employment were affected because of her age.
This is an adverse affect. Stamey, 859 F.2d at 860. It is
inapposite that a job Maddow has since accepted involves travel to
Alabama. Summary judgment against Maddow on the issue of adverse
affect is reversed.
III. Discovery and Costs
We review district court rulings on discovery motions and
discovery sanctions for abuse of discretion. Harris v. Chapman, 97
F.3d 499, 506 (11th Cir.1996).
Plaintiffs initially did not comply with defendants' discovery
requests for income tax forms and details of their attorney fee
arrangement. Plaintiffs supplied defendants with W-2 and 1099
forms as evidence of earnings, but argued that the tax records
would reveal irrelevant and qualifiedly privileged information.
Plaintiffs also informed defendants that the attorney fee
arrangement was contingent and plaintiffs were responsible for
costs, but did not supply the contingency percentage on the grounds
that it was irrelevant.
The district court held that the tax records would reveal
income information not contained in W-2 forms and that the
information would be protected by the Protective Order entered into
by the parties. The court held that the contingency percentage was
relevant because plaintiffs sought attorney's fees, and the
percentage would be relevant to calculating reasonable attorney's
fees. The court therefore compelled discovery of these two items,
and sanctioned plaintiffs $3,000 in attorney's fees for their
initial failure to comply.
The court's decision to compel discovery was not an abuse of
discretion: both items of information are arguably relevant to the
case. The award of sanctions, however, was.
A court must impose attorney's fees and expenses when
compelling discovery unless the party was substantially justified
in resisting discovery. Fed.R.Civ.P. 37(a)(4)(A). Substantially
justified means that reasonable people could differ as to the
appropriateness of the contested action. Pierce v. Underwood, 487
U.S. 552, 565, 108 S.Ct. 2541, 2550, 101 L.Ed.2d 490 (1988).
Here, the plaintiffs were substantially justified in relying
on Supreme Court dictum regarding the attorney's fees issue, and
relying on out-of-circuit district court caselaw, where there was
no in-circuit caselaw, regarding the tax form issue. See Blanchard
v. Bergeron, 489 U.S. 87, 93, 109 S.Ct. 939, 944, 103 L.Ed.2d 67
(1989) (evidence of specific details of contingency fee arrangement
is not necessary for a court to calculate reasonable attorney's
fees; it is at most one factor); City of Burlington v. Dague, 505
U.S. 557, 565, 112 S.Ct. 2638, 2643, 120 L.Ed.2d 449 (1992)
(contingency fee is not grounds for a fee enhancement); Lemanik v.
McKinley Allsopp, Inc., 125 F.R.D. 602, 609 (S.D.N.Y.1989) (there
is a public policy of confidentiality of tax returns; to require
discovery, a party must establish relevancy and the court must find
a compelling need for the returns because the information is not
otherwise obtainable); Biliske v. American Live Stock Inc., 73
F.R.D. 124, 126 n. 1 (W.D.Okla.1977) (public policy against
unnecessary disclosure of tax returns).
The plaintiffs were substantially justified in initially
refusing discovery. The award of attorney's fees was an abuse of
discretion. We affirm the district court's decision to compel
discovery but reverse its sanction of attorney's fees.
IV. Joinder or Intervention of Additional Opt-in Plaintiffs
We review the denial of a motion to join additional
plaintiffs for abuse of discretion. See Nolin v. Douglas County,
903 F.2d 1546 (11th Cir.1990), overruled on other grounds, McKinney
v. Pate, 20 F.3d 1550 (11th Cir.1994) (ruling on motion to amend
pretrial order is reviewed for abuse of discretion). We review the
denial of a motion for permissive intervention for abuse of
discretion. United States v. Dallas County Comm'n, 850 F.2d 1433,
1443 (11th Cir.1988).
The district court has authority to manage the process of
joining additional parties. Hoffmann-La Roche, Inc. v. Sperling,
493 U.S. 165, 170-71, 110 S.Ct. 482, 486-87, 107 L.Ed.2d 480
(1989). Federal Rule of Civil Procedure 16(b) requires a district
court judge to enter a scheduling order that limits the time to
join additional parties. Here, the parties entered a Scheduling
Order on March 2, 1994 that stated all parties would be joined
within sixty days. The additional plaintiffs did not file their
motion to join until more than two months after this deadline. No
motion to extend the time in Scheduling Order was filed until even
later.
In their reply brief to the district court on the motion to
join additional opt-in plaintiffs, the plaintiffs apparently tried
to convert it into a motion to intervene under Federal Rule of
Civil Procedure 24. However, no official intervention motion was
ever filed. Further, whether a motion to intervene is timely is
within the district court's discretion. Stallworth v. Monsanto
Co., 558 F.2d 257, 263 (5th Cir.1977). Stallworth requires the
district court to explicitly rule on four different factors to deny
a motion to intervene. However, this is not required where it is
not even clear that the motion was one to intervene.
The district court did not abuse its discretion in denying
the additional opt-in plaintiffs' motion to join.
We reverse the district court's summary judgment order against
Maddow and the opt-in plaintiffs on both discrimination and adverse
affect grounds; we affirm the district court's order compelling
discovery, but reverse its sanction of attorney's fees against
plaintiffs; we affirm the district court's order denying joinder
or intervention of the additional opt-in plaintiffs.
REVERSED in part and AFFIRMED in part.