United States Court of Appeals
For the First Circuit
No. 11-2186
PAUL J. CAMERON; PAUL T. FERRIS;
PAUL M. GLEASON; KENNETH W. ROSENTHAL,
Plaintiffs, Appellants,
KEVIN O'KEEFE,
Plaintiff.
v.
IDEARC MEDIA CORP.,
Defendant, Appellee,
LOCAL 1301 COMMUNICATIONS WORKERS OF AMERICA, AFL-CIO;
GEORGE ALCOTT; ED RAAD; KIMBERLY DONAHUE;
TODD SANISLOW; HEWITT ASSOCIATES, INC.,
Defendants.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Leo T. Sorokin, U.S. Magistrate Judge]
Before
Lynch, Chief Judge,
Selya and Boudin, Circuit Judges.
Francis G. Gleason, Jr. with whom Gleason & Gleason was on
brief for appellants.
Arthur G. Telegen with whom Jean M. Wilson and Seyfarth Shaw
LLP were on brief for appellee.
July 13, 2012
BOUDIN, Circuit Judge. Appellants Paul J. Cameron, Paul
T. Ferris, Paul M. Gleason, and Kenneth W. Rosenthal are former
directory-advertising sales representatives in the Premise Sales
unit of appellee Idearc Media Corporation ("Idearc"). Each was
discharged in July 2007. Idearc says they were let go for poor
performance; the employees allege that the terminations were
motivated by age discrimination and a desire to negate pension
benefits, and they also advance a retaliation claim. The district
court rejected all of their claims.
The lawsuit revolves around Idearc's Minimum Standards
Plan ("MSP") included in its 2002 collective bargaining agreement
(the "2002 CBA") with Local 1301 of the Communications Workers of
America ("the Union"). The 2002 CBA's terms governed the
employment relationship between appellants and the company from
June 2, 2002 to June 23, 2007. After the 2002 CBA expired, no CBA
was in effect until December 7, 2008, when Idearc and the Union
agreed to a new collective bargaining agreement (the "2008 CBA").
The 2002 CBA's MSP authorized Idearc to terminate under-
performing employees as specified by the plan. Employees were
divided into three "channels"--Premise Sales, Senior Telephone
Sales, and Telephone Sales--which were subdivided into seven "peer
groups."1 Employees in each peer group were ranked within
1
The Premise Sales and Senior Telephone Sales channels were
each divided into three peer groups that corresponded to geographic
areas in New England. The Telephone Sales channel constituted one
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six-month periods by "percent net gain"--which was calculated by
comparing a salesperson's revenues against the revenue produced by
his accounts in the previous year. Until January 2005, the bottom
30th percentile of each peer group in any semester "failed" that
semester unless the employee met an alternative company-set net
gain objective. 2002 CBA, art. 43.02.
Idearc was permitted to terminate employees failing 4 out
of 7 consecutive semesters--with the caveat that no more than 7.5
percent of a peer group could be terminated in any given semester.
2002 CBA, art. 43.03(d). The CBA also provided for appeals of
terminations under the MSP to a joint union/management Performance
Plan Review Board. Id. at art. 46. In substance, the MSP aimed to
cull those sales representatives who were weaker performers but
only if they were regularly at the bottom of the tally and also
below the company's net gain objective target.
The MSP was designed to identify 10-15 percent of
employees for termination per year. The 2002 CBA required Idearc
and the Union to revise the "failing" percentile (originally 30
percent) in January 2005 and 2007--so as to better achieve the
middle of the 10-15 percent target range--if the number of
employees qualified for termination fell outside the 10-15 percent
range. 2002 CBA, art. 43.06. As of January 2005, only one
employee had been terminated under the MSP. Idearc then raised the
peer group.
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"failing" figure to the 70th percentile and also lowered the
alternative net gain objective target, making the latter figure
much more important (but still subject to the 7.5 percent limit on
terminations within a single peer group).2
Appellants in this case each qualified for termination
under the MSP after failing the first semester of 2007 (as well as
the necessary number of prior semesters) and were terminated in
July 2007. Each plaintiff was over 40 years old at the time of
termination, and each had between 18 and 28 years of service at
Idearc. Rosenthal and Gleason were about two years away from
qualifying for service pensions that respectively vested after 20
and 30 years of service; Ferris was about 4.5 years from his
service pension; and Cameron was 7 years from his service pension
and less than 2 years from his deferred vested pension.
Appellants brought the present lawsuit against Idearc in
December 2008. Without denying that they had failed under the MSP,
they alleged that they were fired not because of the MSP but
because of their age, in violation of the Age Discrimination in
Employment Act ("ADEA"), 29 U.S.C. § 621 et seq. (2006), and in
order to deprive them of pension benefits, in violation of the
2
Quantitative analysis indicated that even raising the
"failing" percentile from 30 to 100, making all employees subject
to the net gain objective requirements, would not achieve the
aimed-for 10-15 percent target range; but, with the revision, those
employees regularly in the top 30 percent remained immune to
discharge under the plan even if they failed the now lowered
objective net gain figure.
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Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001
et seq. (2006). Appellants also allege Idearc later retaliated
against them for filing this suit, also in violation of ERISA, 29
U.S.C. § 1140, by refusing to reinstate them as required by the
2008 CBA.3
On summary judgment, the district court assumed arguendo
that appellants could establish a prima facie case for their
discrimination theories. But, Idearc having proffered a
performance-based explanation for the terminations, the court found
that appellants had not provided evidence from which a reasonable
jury could conclude that Idearc's reason was pretextual; neither
was there sufficient evidence of retaliation for filing this suit.
Accordingly, the court granted summary judgment to the defendants.
In the alternative, the district court considered
appellants' claims barred by section 301 of the LMRA, primarily
because the court found that the discrimination claims, if they
went forward, depended on interpreting the CBA (thus arguably being
subject to the CBA's dispute resolution provisions). Cf. Lingle
v. Norge Div. of Magic Chef, Inc., 486 U.S. 399, 407 n.7 (1988).
3
Appellants also brought state law claims against Idearc–for
tortious interference with contract--that were grounded in alleged
breaches of the CBA, and against the Union for breach of its duty
of fair representation--what is known as a "hybrid" claim--under
section 301 of the Labor Management Relations Act ("LMRA"), 29
U.S.C. § 185. Other state law claims, including age
discrimination, were also advanced. Only the federal ADEA, ERISA
and retaliation claims are pressed on this appeal.
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Because we affirm on the ground that appellants' claims failed to
present a jury issue on the charges of discrimination or
retaliation, the question of LMRA preemption need not be pursued.
The ADEA protects employees against, among other things,
discriminatory discharge based on age. 29 U.S.C. § 623(a)(1).
Absent direct evidence of discrimination--of which there is just
about none here--ADEA claims are evaluated under the familiar
burden-shifting standard of McDonnell Douglas Corp. v. Green, 411
U.S. 792 (1973). Vélez v. Thermo King de Puerto Rico, Inc., 585
F.3d 441, 447 n.2 (1st Cir. 2009). A plaintiff must first
establish a prima facie case, which is fairly easy to do, by
showing
--that he or she was at least 40 years old at
the time of discharge;
--that he or she was qualified for the
position but was nevertheless fired; and
--that the employer subsequently filled the position.
Id. at 447.
The employer must then produce a legitimate non-
discriminatory reason for termination; and, if this is done, the
plaintiff bears the ultimate burden of proving, by a preponderance
of the evidence, that the defendant's proffered reasons were a
pretext for discrimination. Vélez, 585 F.3d at 447-48. This
brings the plaintiff back to having to prove his or her case but
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with the added, often critical, advantage to the employee of having
pinned down the defendant's purported justification.
Section 510 of ERISA prohibits inter alia discharge for
the purpose of interfering with the attainment of rights under an
employee benefit plan. 29 U.S.C. § 1140. Again the McDonnell
Douglas framework is used when direct evidence of discrimination is
lacking. Kouvchinov v. Parametric Tech. Corp., 537 F.3d 62, 67
(1st Cir. 2008). A plaintiff must establish a prima facie
case--that he was prospectively entitled to ERISA benefits, was
qualified for his position, and was discharged "under circumstances
that give rise to an inference of discrimination." Lehman v.
Prudential Ins. Co. of Am., 74 F.3d 323, 330 (1st Cir. 1996).
On summary judgment, the district court assumed without
deciding that the appellants could establish a prima facie case of
age discrimination and interference with prospective pension
rights; but, given Idearc's performance-based explanation for
termination, the court found that appellants had not provided
evidence from which a reasonable jury could conclude Idearc's
reason for the discharges--poor performance under the MSP--was
pretextual and that age or pension related concerns were the actual
reason for the discharges.
Whatever one thinks of eliminating weaker performing
sales personnel in middle age or near to their pensions, poor
performance in a job is a conventional business motive and not age
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discrimination or purposeful interference under ERISA. Appellants
do not deny that they were subject to discharge under the MSP.
Instead, they argue that the MSP's percentile figure was raised to
the 70th percentile level without a mathematical basis in January
2005 and left unchanged in January 2007, in alleged violation of
the CBA, and that Idearc knew the revised MSP would capture too
many employees for termination.
Reducing the "safe harbor" from the top 70 percent of
employees ranked by performance to the top 30 percent (which was
the effect of the January 2005 change) was amply explained not by
age discrimination but by experience showing that the earlier safe
harbor was so large that it prevented the MSP from capturing all
but a few employees--far from the aimed-for removal target. In
deposition testimony below, the Union conceded that Idearc acted
with legal authority under the CBA in raising the MSP standards as
it did.
Appellants argue, relying in part on the views of their
expert, that the company and Union both misunderstood what the CBA
required to justify the new 70 percent figure; but this is beside
the point: the question here is not the CBA's meaning but the
appellants' need to show that Idearc had fired them because of
their age or to target their pension rights; merely to show that
the parties to the CBA misunderstood their own document would remit
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appellants to their CBA-based claims which they have not sought to
appeal. See note 3, above.
Indeed, Idearc attempted to terminate only 28 employees
for performance-based reasons over the life of the MSP, out of
about 300 employees in the bargaining unit. Among the 28 employees
Idearc attempted to terminate under the MSP, 22 appealed and 8 were
successful. There was no significant difference between the
average age of employees with successful and unsuccessful
appeals--at 51.375 and 47.33 years old, respectively--and the fact
that employees with successful appeals were slightly older on
average tends to negate, rather than support, an inference of
discrimination. The number of terminated employees does not come
close to Idearc's original target of 10-15 percent, or about 30-45
per year.
In proffering these figures, Idearc did not count two
employees, who were identified for termination and denied relief on
appeal, but were kept on briefly to qualify for their service
pensions after the Union alerted the company that these two were
very close to vesting. Adding these employees to the mix does not
significantly change the average ages already discussed, and
Idearc's accommodation hardly supports the notion that Idearc was
using the MSP to interfere with pension benefits.
Appellants point out that among Idearc's three sales
channels as of 2007, Premise Sales (in which appellants worked) had
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the highest average age at 51.5 years old, highest average years of
service, and the highest termination rate under the MSP; Senior
Telephone Sales followed in average age, service, and terminations;
Telephone Sales employees were the youngest at an average age of
37.3 years old, the least experienced, and saw zero terminations
under the MSP.
As it happens, Idearc says that the Telephone Sales
channel was informally exempted from the MSP by agreement with the
Union, but that many young, inexperienced, provisional employees in
the group were dismissed outside the procedures of the MSP in
numbers that would have raised that group's discharge rate above
all others. Appellants say that proof of such an agreement is
weak, but the whole dispute is beside the point.
The sales representatives in each channel were performing
their sales tasks in a different context than those in the other
two channels; and appellants were being measured against members of
their peer group within their distinct channel. The desire to keep
the stronger and discharge the weaker performing members of a group
is not the purposeful age discrimination condemned by the ADEA or
interference with pension rights under ERISA. Bennett v. Saint-
Gobain Corp., 507 F.3d 23, 31 (1st Cir. 2007) (requiring
"discriminatory intent" for ADEA claims); Barbour v. Dynamics
Research Corp., 63 F.3d 32, 38 (1st Cir. 1995), cert. denied, 516
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U.S. 1113 (1996) (requiring "specific intent to interfere with the
plaintiff's [ERISA] benefits").
Appellants say their own adequate performance is shown by
accolades they received, some within semesters they failed under
the MSP, or not long before their final failing semester and
termination. But objective measures are used in part to avoid
claims of discrimination; and crafting an MSP that better divides
superior from inferior performance is a subject for collective
bargaining, not a discrimination claim; that the MSP may have been
an imperfect performance metric hardly shows that it was a mask for
age discrimination or interference with pensions.
Two pieces of evidence stressed by appellants deserve
brief comment. One is a statement made by a sales manager to
plaintiff Rosenthal during a meeting in 2005 or 2006: "[T]hat's the
problem with you old guys, you remember the way that it used to
be." Such a stray remark to one person, made on a subject that
Rosenthal could not recall, can hardly serve to show that
discharges under an objective and negotiated merit plan were a
pretext for age discrimination. Straughn v. Delta Air Lines, Inc.,
250 F.3d 23, 36 (1st Cir. 2001).
Appellants also stress that Idearc was concerned about
pension costs and saved a substantial amount in pension benefits as
to the 20 employees who were terminated under the MSP. But
employers, if they remain in business, are always concerned with
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costs--pensions quite as much as salaries or commissions. Nothing
suggests that the termination of the four appellants here was based
on anything except their poorer performance in sales efforts as
measured by the MSP.
Finally, appellants suggest that they were retaliated
against for filing this lawsuit in the district court charging age
discrimination and interference with ERISA rights. Such a
retaliatory purpose by Idearc could create liability under either
of the two statutes. 29 U.S.C. § 1140 (ERISA); 29 U.S.C. § 623(d)
(ADEA). Appellants were discharged before they filed their
lawsuit; but their theory is that the retaliation lay in a refusal
to reinstate based upon an alleged promise to do so reflected in
the 2008 CBA.
The alleged promise appears in a June 24, 2007 Letter
Agreement included as an annex to the 2008 CBA ("the page 53
letter"). The page 53 letter, on its face, exempted from
termination sales representatives failing the MSP in the first
semester of 2007, and instead moved those employees into a
"performance improvement plan." Idearc, say appellants, concealed
the Letter and failed to reinstate them in retaliation for filing
this suit on December 3, 2008--shortly before the 2008 CBA was
adopted on December 7, 2008.
However, while the letter taken without context is
arguably confusing, the evidence gathered in discovery confirms
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Idearc's explanation that the page 53 letter was a proposal made in
negotiating the 2008 CBA that was thereafter rejected by the Union.
Then, after an impasse in negotiations in early December 2008, well
after the preexisting CBA expired, Idearc implemented unilaterally
the new performance improvement plan but applicable only to
employees subject to discharge in the second semester of 2007, thus
excluding persons such as the appellants.
The page 53 letter is (as appellants say) included in the
CBA as an annex but only because, according to Idearc and the
uncontradicted record evidence, the Union's bargaining
representative requested that the letter be included for reference-
-but never as a commitment by the company. In deposition testimony
in the district court, the Union representative confirmed that the
page 53 letter is a "moot document" and she "just wanted people to
see what we had been talking about for 17 months." No contrary
testimony was adduced by appellants.
Appellants say that the tension between the plain
language of the page 53 letter and the bargaining representative's
account at least raises a genuine issue of material fact for trial.
But the relevance of a June 2007 letter annexed to a December 2008
CBA without any explicit adoption of the former by the latter is
hardly self-evident, and appellants have pointed to no evidence to
rebut credible assertions by both parties to the CBA as to the
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limited office of the letter. The premise of the retaliation
claims thus fails.
Affirmed.
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