Finding of age discrimination upheld

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The Seventh Circuit held on Aug. 28 that the evidence was sufficient to support a jury’s finding of age discrimination, where the employer had previously attempted to lay off the employee during a reduction in force (RIF), gave shifting reasons for the discharge, and had treated a younger employee less severely for a similar infraction.

Doris Appelbaum’s employment with the Milwaukee Metropolitan Sewerage District (MMSD) began in 1983. Beginning in 1991 and through the date of her termination, she was assigned to MMSD’s Human Resources department. As of 1996, Appelbaum was one of three secretaries in that department.

However, in August 1996, MMSD’s number two official, Kristine Hinrichs, decided that the number of secretaries in the department should be reduced from three to two, during an RIF that reduced MMSD’s overall workforce from a total of between 600 and 700 employees down to 200.

Of the three secretaries in the Human Resources Department, Hinrichs selected Appelbaum for layoff. In choosing Appelbaum, Hinrichs rejected the advice of department managers, who felt that she should instead lay off a younger employee, Cassandra Reynolds-Taylor, whose work was regarded as poor.

Originally, Appelbaum was to be laid off effective Jan. 1, 1997, but that date subsequently was extended to July 1, 1997, so that Appelbaum, who in July turned 60, could retire with full pension benefits.

Ultimately, Appelbaum’s job was saved when the third secretary in the department resigned, obviating the need for a layoff. The next month, Don Schriefer became the new Manager of Human Resources.

Shortly after he took over the department, Schriefer fired Reynolds-Taylor based on repeated complaints about her performance; Schriefer would later describe her work as “[p]retty egregious,” adding, “Almost everything that she did was done erroneously or wrong or not done at all.”

The discharge of Reynolds-Taylor left Appelbaum as the only secretary in the department, with a heavy workload.

Employees of the Human Resources department were obligated to keep in confidence the private information regarding other MMSD employees with whom they dealt in the course of their work. Nevertheless, confidential information leaked from the department on a number of occasions.

In one instance, Schriefer imposed a five-day suspension on Trina DeLeon, an employee in his department, for refusing to answer questions about a leak, and ordering him out her office.

While investigating another leak, when Schriefer spoke with Appelbaum, she revealed that one day, an MMSD employee by the name of Sheila Ashley had stopped Appelbaum and asked whether she had heard about DeLeon’s suspension. Appelbaum responded to Ashley, “[Y]es, I heard,” and added that she was not at liberty to discuss the matter.

Schriefer then fired Appelbaum, for breach of confidentiality, adding work performance as a second ground. Appel-baum unsuccessfully appealed the termination through MMSD’s internal grievance procedure. Appelbaum then retired, receiving full benefits, but a monthly pension that was less than it would have been had she stayed until the age of sixty-five, as she had planned.

Appelbaum sued MMSD for age discrimination in federal court, and the case proceeded to trial. At trial, Schriefer testified that, although he initially gave both the breach of confidentiality and poor work as the reasons for discharge, in fact, her performance played “zero role” in her termination.

The jury found in Appelbaum’s favor, and awarded $115,000 in lost wages, and $87,660 in liquidated damages for wilful violation of the ADEA. MMSD appealed, but the Seventh Circuit affirmed in a decision by Judge Ilana D. Rovner.

Pretext

The court acknowledged that a perceived breach of confidentiality would suffice as a nondiscriminatory reason for discharge. Nevertheless, the court concluded that the evidence permitted the jury to conclude that the breach was not the true reason for termination.

First, the court noted the shifting reasons for the termination. The court noted that, when he first advised Appelbaum of his decision to fire her, Schriefer indicated that she was being discharged for both her allegedly poor performance and for the confidentiality breach. Later, he backed off from the performance rationale.

At the review hearing, he again asserted the work performance as an issue, but then testified at trial that it played “zero role.” From these shifting explanations, the court concluded the jury could reasonably infer pretext on Schriefer’s part.

Second, the court noted the earlier decision to lay off Appelbaum, rather than the younger Reynolds-Taylor, “notwithstanding glaring problems with Reynolds-Taylor’s performance (problems that would soon culminate in Schriefer’s decision to fire her) and the recommendations of MMSD’s own managers that Reynolds-Taylor be the one laid off.”

The court reasoned, “Only the unexpected departure of the department’s third secretary had saved Appelbaum’s job on that occasion. The fact that MMSD had chosen to lay off someone on the verge of retirement eligibility rather than someone substantially younger and so evidently less qualified supports the inference that its decision-making (at least as to Appel-baum) was tainted by considerations of age, and along with the other circumstances supports the inference that she was later discharged based on her age.”

The court acknowledged that the earlier layoff decision was not made by Schriefer, but by Kristine Hinrichs. Nevertheless, Schriefer reported to Hinrichs and consulted her in deciding to fire Appelbaum.

Finally, the court concluded that the jury also could have inferred pretext from the disparate way in which Schriefer had disciplined Appelbaum as compared to DeLeon.

To prove discrimination based on disparate disciplinary actions, an employee must show that the two employees dealt with the same supervisor, were subject to the same standards, and had engaged in similar conduct without such differentiating or mitigating circumstances as would distinguish their conduct or the employer’s treatment of them.

Both Appelbaum and DeLeon worked in the same department, had the same supervisor, and were subject to the same standards for confidentiality.

The court acknowledged that they did not engage in similar conduct. DeLeon not only had refused to answer Schriefer’s questions about the previous leak, but had ordered him out of her office. Schriefer decided to suspend her for five days. Appelbaum, on the other hand, cooperated with the later investigation.

The court acknowledged that DeLeon’s offense was one of insubordination rather than breach of confidentiality, and that insubordination could be viewed as less serious conduct than a breach of confidentiality by a human resources employee.

Nevertheless, the court found DeLeon and Appelbaum to be similarly situated. The court reasoned, “DeLeon’s conduct arose from Schriefer’s inquiry into just such a breach, and her refusal to cooperate with Schriefer could be seen to pose as much of a threat to the integrity of the Human Resources department as Appelbaum’s inadvertent confirmation of a rumor.”

Noting that Appelbaum had never before been disciplined for any rule infraction, the court concluded, “The fact that she was fired for her breach of the department’s confidentiality policy, while DeLeon was merely suspended for an insubordinate refusal to cooperate with the enforcement of that same policy, could be viewed as a disparate treatment of two similarly situated employees.”

Wilful Violation

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The court next held that the liquidated damages for wilful discrimination were properly awarded. MMSD argued that the termination decision was made not by Schriefer, whom it acknowledged either knew or was recklessly indifferent to the possibility that the decision to discharge Appelbaum violated the ADEA, but by Mike McCabe, who conducted the grievance hearing and sustained the discharge decision.

Rejecting the argument, the court concluded, “A pragmatic view of the facts makes plain that Schriefer was the pertinent decisionmaker, however. McCabe may have rendered the decision to discharge Appelbaum final and official in his role as the hearing examiner charged with resolving her internal protest of the discharge decision.

But the person who actually made the decision to fire Appelbaum was Schriefer … He was … the person who ‘wielded the axe.’ (citing Wallace v. SMC Pneumatics, Inc., 103 F.3d 1394, 1401 (7th Cir. 1997)).”

The court added, “McCabe simply reviewed Schriefer’s rationale and sustained it as reasonable; he did not actually make the decision to discharge Appelbaum or cause that decision to be made.”

Thus, the court held that the jury was free to impute Schriefer’s mindset to MMSD, and affirmed the jury finding that the decision was wilful.

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David Ziemer can be reached by email.