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Lockhart v. Westinghouse Credit Corp.

filed: June 13, 1989.


On Appeal from the United States District Court for the Western District of Pennsylvania (Pittsburgh), D.C. Civil Action No. 85-873.

Higginbotham, Jr., Mansmann and Garth, Circuit Judges.

Author: Higginbotham



This is an appeal from an action arising under the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. § 621 et seq. (1982) ("ADEA"), and the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. § 201 et seq. (1982) ("FLSA"). The suit involved multiple plaintiffs, former employees of the appellant-defendant, Westinghouse Credit Corporation ("WCC"), who alleged that they were unlawfully terminated from their jobs because of their ages, and that their terminations were done in willful violation of the ADEA. The jury returned verdicts in favor of two of the plaintiffs, additionally finding that WCC had willfully discriminated against one of them. Upon our review of the record, we find insufficient evidence to support the jury's verdict of willful discrimination. Accordingly, we will vacate that portion of the district court's judgment order awarding liquidated damages.


In an effort to increase its profitability, WCC decided to undertake a corporate reorganization. In May 1983, WCC engaged McKinsey and Company, Inc. (the "McKinsey Group"), a management consulting firm, to assist in that effort. After the McKinsey Group released its report in January 1984, WCC merged its four corporate divisions -- Industrial Equipment Financing, Financial Services, Real Estate Financing and Business Financing -- into two larger bodies: Commercial Services and Capital Financing. During the process of restructuring, a number of management positions within WCC were eliminated.

Contemporaneous with WCC's commissioning of the McKinsey Group, Phillip N. Lockhart, who was employed in the Financial Services division as District Manager of WCC's Pittsburgh Office, was terminated from his position on May 3, 1983, ostensibly because of an unfavorable audit of his office. He was 58 years old at the time and had been an employee of WCC's since 1960. On July 21, 1983, Lockhart filed a formal written charge with the Equal Employment Opportunity Commission ("EEOC"), alleging that WCC discriminated against him on the basis of his age because several WCC branches were being consolidated with the Pittsburgh Office, and the resulting new management position was being filled by an employee who was 34 years old and who had less experience than Lockhart. In September 1984, the EEOC informed Lockhart that it would take no further action on his charge; he then proceeded on his own behalf.

Lockhart commenced this suit on April 11, 1985, claiming that he was discharged from his position with WCC on account of his age, in violation of 4(a)(1) of the ADEA,*fn1 29 U.S.C. § 623(a)(1), and § 16(b) of the FLSA,*fn2 29 U.S.C. § 216(b). On December 6, 1985, Lockhart filed a motion to join additional parties pursuant to the opt-in class action provision in 16(b) of the FLSA. The motion sought to add James Durham,*fn3 Charles Wilson, Thomas Bradley and James Lowery on the basis that they were "similarly situated" to Lockhart, in that each one was "terminated from his employment because of his age." Appellant's Appendix ("App.") at 14-15. The district court granted the motion without prejudice to WCC's right to challenge the joinder upon completion of discovery. The amended complaint alleged that WCC's terminations were part of a plan, pattern or practice of unlawful age discrimination in which WCC conspired and willfully terminated each plaintiff.

At the close of discovery, WCC moved for summary judgment against Wilson, Bradley and Lowery on the basis that since they had failed to file charges with the EEOC, and since Lockhart's charge did not allege class-based discrimination, they could not opt into the suit under § 16(b).*fn4 The district court granted the motion as to Lowery, concluding that if he had sought to file his own charge, it would have been time-barred by the time Lockhart filed his charge with the EEOC.*fn5

The cases of the four remaining plaintiffs proceeded to trial. Answering special interrogatories, the jury returned a verdict as to liability and found that WCC had violated the ADEA in discharging Lockhart and Durham, and that WCC had not violated the ADEA in discharging Wilson and Bradley. The jury further found that WCC's termination of Durham was in willful violation of the ADEA. By agreement of the parties, the issue of damages was submitted to the trial court. Based on the stipulation of the parties as to backpay damages, the court awarded $197,885.83 in backpay to Lockhart and $102,381.69 in backpay to Durham. The court then determined that Lockhart was entitled to $96,000 in frontpay, and that Durham was entitled to $43,000 in frontpay. Moreover, with respect to the jury's finding of willfulness, the court awarded Durham $102,381.69 in liquidated damages, equalling his award of backpay as prescribed by statute. See 29 U.S.C. § 626(b) (1982). In total, the court awarded $293,885.83 to Lockhart and $247,763.38 to Durham, plus their attorneys' fees and costs.

WCC subsequently moved for judgment notwithstanding the verdict with respect to the claims of Durham and Lockhart on the basis of insufficiency of evidence. In the alternative, WCC moved for a new trial based on various alleged pre-trial and trial errors. The district court denied these motions and this appeal followed.



WCC's first contention on this appeal is that the evidence proffered at trial was insufficient to support the findings of age discrimination and, therefore, that the district court erred by denying its motion for judgment n.o.v. with respect to the jury's verdicts in favor of Lockhart and Durham. In reviewing the court's denial of WCC's motion, "we must determine whether the evidence and justifiable inferences most favorable to the prevailing party afford any rational basis for the verdict." Anastasio v. Schering Corp., 838 F.2d 701, 705 (3d Cir. 1988).

The ADEA protects individuals who are 40 and older from employment discrimination based upon their age. See 29 U.S.C. § 631(a) (Supp. IV 1986). Under the ADEA, the plaintiff has the ultimate burden of proving that age was the determinative factor in his or her discharge from employment. Chipollini v. Spencer Gifts, Inc., 814 F.2d 893, 897 (3d Cir.) (in banc), cert. dismissed, 483 U.S. 1052, 108 S. Ct. 26, 97 L. Ed. 2d 815 (1987). Age need not be the sole factor, but it must have "made a difference in the [employer's] decision." Id. The plaintiff can prevail on his or her claim by proffering direct evidence of specific intent to discriminate, but there is usually no "smoking gun" evidence of intentional discrimination. See Gavalik v. Continental Can Co., 812 F.2d 834, 852-53 (3d Cir.), cert. denied, 484 U.S. 979, 108 S. Ct. 495, 98 L. Ed. 2d 492 (1987).

Consequently, the Supreme Court has developed a method of indirect proof involving presumptions and shifting burdens of production in order that the "plaintiff [can have] his [or her] day in court despite the unavailability of direct evidence." Loeb v. Textron, Inc., 600 F.2d 1003, 1014 (1st Cir. 1979). This three-part formula was first articulated in McDonnell-Douglas Corp. v. Green, 411 U.S. 792, 802-804, 36 L. Ed. 2d 668, 93 S. Ct. 1817 (1973), and enunciated again in Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 253-56, 67 L. Ed. 2d 207, 101 S. Ct. 1089 (1981).*fn6

First, the plaintiff must present a prima facie case of age discrimination. This is accomplished "by proving by a preponderance of the evidence that (1) he belongs to a protected class; (2) he was qualified for the position; (3) he was dismissed despite being qualified; and (4) he ultimately was replaced by a person sufficiently younger to permit an inference of age discrimination." Chipollini, 814 F.2d at 897. The establishment of the prima facie case creates a presumption of unlawful discrimination. The burden then shifts to the defendant to come forth with a legitimate non-discriminatory reason for the plaintiff's discharge in order to rebut the presumption. If the defendant is successful, the plaintiff must then prove by a preponderance of the evidence that the defendant's purported justification for his dismissal is not credible.*fn7

In the present action, each plaintiff established his prima facie showing*fn8 of age discrimination and WCC presented legitimate, nondiscriminatory reasons for his termination. Each plaintiff then had the burden of proving that WCC's rationale for his discharge was pretextual. WCC argues that neither Lockhart nor Durham proffered any direct evidence to discredit WCC's asserted justifications for their discharge. We have noted, however, that under McDonnell-Douglas, direct evidence of discriminatory intent is not necessary. "[A] plaintiff can prevail by means of indirect proof that the employer's reasons are pretextual without presenting evidence specifically relating to age." Chipollini, 814 F.2d at 898. We now address whether there is sufficient indirect evidence on the record to support the jury's verdicts in favor of Lockhart and Durham.

1. Lockhart

Lockhart testified that prior to his termination, he had been with WCC for 22 years, and in each year he had received a merit salary increase and satisfactory performance evaluations. He further testified that he had never received a demotion or salary decrease, and had never received a reprimand. WCC's proffered explanation for Lockhart's discharge was that certain discrepancies were found in the annual audit of his office. In rebuttal, Lockhart explained why each alleged discrepancy did not constitute any wrongdoing. He also explained that he was not given adequate time to answer the charges made against him in this audit, as was the customary procedure, before being fired.

In defense of its actions, WCC called Lockhart's former immediate supervisor, Robert Nazworth, to testify. But on cross-examination Nazworth conceded that he considered Lockhart to have been a good and dependable worker; that confusion on his part may have contributed to some of the charges against Lockhart; and that WCC had a policy of "progressive discipline" whereby any employee would receive various stages of reprimand before being dismissed. WCC also called Benjamin Russell, the second person responsible for Lockhart's termination, to testify. On cross-examination, Russell conceded that Lockhart had never been insubordinate and had never deliberately violated company policy. Notwithstanding Lockhart's reputation, Russell testified that he did not request that Nazworth conduct an investigation into the audit's allegations against Lockhart, and that he did not believe that Lockhart, after 22 years with WCC, deserved a second chance.

On the basis of our review of the record, we conclude that Lockhart's proffered evidence was sufficient to provide a rational basis for the jury's conclusion that WCC's purported justification was not credible and, therefore, that age was the determinative factor in Lockhart's discharge.*fn9

2. Durham

Durham, at age 50, was terminated on February 17, 1984, from his position as Regional Administrative Manager in Atlanta, Georgia. He had been employed by WCC since 1960; had received various promotions throughout his tenure; and had received merit salary increases and satisfactory performance evaluations in each year with the company.

The legitimate, non-discriminatory reason given by WCC for terminating Durham was that it had to reduce its working force because of corporate reorganization. Albert Rowe, who at the time of the reorganization was WCC's Eastern Zone Manager, testified that in January 1984, Durham's former position, Regional Administrative Manager, was combined with that of Regional Manager to form the consolidated position of Regional Operations Manager. Durham allegedly competed with Robert Johnson, a person similar in experience and age, to be Operations Manager. WCC avers that since Johnson received the new position, this fact negates any possible inference that age was the determinative factor in Durham's discharge.

Durham testified, however, that in June 1983, he was informed by James Hyche, former Regional Manager, that he was to have the newly created position of Atlanta Area Business Center Manager. Durham also testified that in August 1983, he assumed the responsibilities of this new position while continuing as the Regional Administrative Director. Although Rowe initially denied that Durham served as Area Business Center Manager, he conceded upon cross-examination that documentary evidence supported Durham's assertion. Durham further testified, and documents supported, that when the reorganization formally went into effect, his promised position -- retitled Division Manager -- was given to Lawrence Kramb who was 34 years old. Rowe testified that Kramb, who was from the WCC's Industrial Division, possessed certain skills that made him more qualified than Durham, who was from the Inventory Division. Rowe had to concede upon cross-examination, however, that Edgar Middlebrooks, who was Kramb's counterpart in Tampa, Florida, was from the supposedly inept Inventory Division.

Based upon our review of the record, we conclude that Durham proffered sufficient evidence from which a jury could rationally conclude that WCC's purported justification for his dismissal was pretextual, and thus that age was the determinative factor in Durham's termination.


WCC alleges various pre-trial and trial errors that it contends warrant a trial de novo in both Lockhart's and Durham's case. WCC argues that the district court erred in (1) requiring it to defend four separate and distinct age discrimination cases in one jury trial because of an erroneous interpretation of the "opt-in" plaintiff rule under 16(b) of the FLSA; (2) permitting the testimony of non-party witnesses with regard to the facts and circumstances of their dismissals from WCC's employment; (3) allowing French to testify as to age-related comments made by Barbour, and then striking relevant cross-examination; and (4) instructing the jury that proof of the elements of a prima facie case established a presumption that WCC violated the ADEA. We review the district court's denial of WCC's motion for a trial de novo for abuse of discretion. Honeywell, Inc. v. American Standards Testing Bureau, Inc., 851 F.2d 652, 655 (3d Cir. 1988), cert. denied, 488 U.S. 1010, 109 S. Ct. 795, 102 L. Ed. 2d 787 (1989).

1. The "Opt-In" Plaintiffs

The availability of an opt-in class action suit in this case was governed by 29 U.S.C. § 216(b) (1982), which provides in relevant part that

[an] action to recover [for damages resulting from age discrimination] may be maintained against any employer (including a public agency) in any Federal or State court of competent jurisdiction by any one or more employees for and in behalf of himself or themselves and other employees similarly situated.

29 U.S.C. § 216(b) (1982).

WCC asserts that the district court's interpretation of the opt-in plaintiff rule under § 216(b) was in error. Its first contention is that summary judgment should have been granted against all additional plaintiffs since they were not "similarly situated" to Lockhart within the meaning of § 216(b). Its second contention is that summary judgment should have been granted specifically against Wilson and Bradley since they did not file charges with the EEOC and Lockhart's EEOC charge did not provide notice of class-based discrimination. As a result of the court's error, WCC avers that it was unduly prejudiced in its ability to defend against the plaintiffs' claims.

In making the argument that the additional plaintiffs were not similarly situated to Lockhart for purposes of joinder under 216(b), WCC principally relies upon the district courts' opinions in Plummer v. General Electric Co., 93 F.R.D. 311 (E.D.Pa. 1981), and Lusardi v. Xerox Corp., 118 F.R.D. 351 (D.N.J. 1987), vacated in part and appeal dismissed sub nom. Lusardi v. Lechner, 855 F.2d 1062 (3d Cir. 1988). We conclude, however, that the district court's reasoning in the case at bar is in accordance with the rationales underlying both the holdings in Plummer and Lusardi.

In Plummer, the court reasoned that four additional plaintiffs were similarly situated to the original complainant based on the following three-pronged test: they were all (1) employed in the same corporate department, division and location; (2) advanced similar claims of age discrimination; and (3) sought substantially the same form of relief. 93 F.R.D. at 312. The court held that "[while] these five individuals do not present identical factual assertions, consolidation of their claims into a single representative action would . . . provide an efficient procedure for litigating these related claims." Id. The same analysis underscores the court's opinion in Lusardi. In that case, the court noted that, although there was a common theory of recovery, the claims of the class representatives and the Zerox organizations in which they were employed varied substantially from those of the persons seeking to opt into the lawsuit. Accordingly, the court held that joinder was impermissible under § 216(b). 118 F.R.D. at 377-78.

The opt-in plaintiffs in the present action were all former employees within the Financial Services Division of WCC, albeit in different branch locations. They all claimed that they were terminated from their employment positions as a result of a pattern, plan or practice of willful age discrimination that was conducted by WCC. Moreover, they all claimed the same relief in the form of employment reinstatement, lost wages, liquidated damages and attorneys fees and costs. Balancing the factors as applied in Plummer and Lusardi, we conclude that all the opt-in plaintiffs in this present action were "similarly situated" to Lockhart.*fn10

Contrary to WCC's contention, the fact that it asserted separate defenses with respect to each plaintiff does not vitiate automatically § 16(b) joinder. While the potential for problems with respect to class management may arise from the assertion of individualized defenses, a district court has the discretion to determine whether such problems would make manageability of the class impossible. Cf. Lusardi, 855 F.2d at 1074-75 ("Whether a class action is inappropriate . . . because of the disparate individual defenses . . . [is] entrusted to the district court's sound discretion."). Under the facts of this case, ...

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