Opinion
Case No. 98 C 0076.
March 2, 2000.
MEMORANDUM OPINION AND ORDER
The plaintiff, Norman B. Olefsky, was a sales manager for the defendant, William Grant Sons, Inc., a company that markets liquor, wine and spirits. He was hired at age 42 and then let go ten years later, at age 52. Olefsky claims that he was fired because of his age and is suing his employer under the Age Discrimination in Employment Act (ADEA). Grant says he was fired for cause and moves for summary judgment.
Facts
Grant markets alcoholic beverages — its own brands and imported wine and spirits. On April 21, 1986, when Olefsky was 42, Grant hired him as a sales manager, a job involving promotion of the sale of Grant's products together with a sales force from Grant's distributors. He directed sales and marketing programs and was required to make in-person calls to his distributors as well as wholesalers and retailers in his region.
In the early 1990's Olefsky received above average bonuses and was routinely commended for his sales performance. Grant claims, however, that by 1994 Olefsky's performance had begun to slip. In March 1994, Grant's National Sales Manager Joe Gosler sent Olefsky a memo informing him that his bonus for the previous year was "very poor," that he was not happy with Olefsky's work, and that Olefsky had a "problem of blaming [others]." Around the same time, Olefsky's territory was cut back, and part of it was taken over by Tim McNichols, who was 36 years old and had just been promoted from a sales manager position to the supervisory position of Regional Director of the Midwest region.
Olefsky's Local Rule 12(N) Statement (now Local Rule 56.1 (b)) implied that there was an "unlawful reduction" in his covered territory. But Olefsky testified that his territory was decreased because the strength of the Chicago market increased and he needed to concentrate his selling there. Moreover, Olefsky's complaint does not allege that the reduction constituted an adverse employment action.
On November 10, 1994, the company president Derek Anderson sent a memo to all sales managers, including Olefsky, stating that as of January 1, 1995, they should spend only one day per week in the office, as it was vital for them to spend as much time as possible with retailers and distributors. In late January 1995, Anderson sent another memo reiterating this goal. Despite these directives, McNichols says Olefsky was at home for much of the first three weeks of January 1995 when he should have been out working his accounts. Olefsky admits this but says he was completing year-end paperwork, as was his standard practice at the beginning of the year. McNichols says that even after Olefsky was given several verbal warnings, he again caught him at home that month. McNichols reported Olefsky's conduct to both Gosler and Anderson.
The next month McNichols received complaints from managers at Continental Distributing Company, one of Grant's distributors and Olefsky's former employer, that Olefsky was spending too much time there. Gosler received a similar complaint from Continental's president, who said his employees were complaining that Olefsky was hanging around and socializing and that he had personally observed Olefsky hanging around Continental's offices. Gosler says he admonished Olefsky in response to these reports, but Olefsky denies being told he was spending too much time at Continental.
In February 1995 Grant put Olefsky on 90 days probation. In a written memo Olefsky was informed that he had to spend four days a week in the market and only one day (if necessary) in the office. He was also required to complete daily sales reports documenting his activities. It is undisputed that Olefsky successfully completed the probationary term, and the probation was terminated. In July 1995, Anderson met with Olefsky and assured him that his job was not in jeopardy and that he was being given a clean slate.
But Olefsky's slate stayed clean for only a few months. In late October, McNichols says Olefsky told him he had worked with Jay Sartor at Continental on a particular day; Sartor told McNichols this was untrue. Olefsky, however, denies having this conversation with McNichols. McNichols also received complaints that Olefsky was again spending too much time socializing at Continental. Olefsky admits he spent more time than usual at Continental in October but claims this was because his key accounts met there to go over holiday programs.
Because Grant believed Olefsky was back to his old routine, in November 1995 he was once again placed on probation. Gosler sent Olefsky a memo telling him that his performance had slipped again. Among other things, Gosler advised Olefsky that he was not spending enough time working the downstate Illinois market and that for this reason his sales figures were down. He told Olefsky that his performance "must improve" and warned him that if it did not, the next step was termination. McNichols followed up with a memo to Olefsky explaining the areas in which his performance had to improve, including spending four days a week in the market — three of those days with distributor sales persons — and at least four days every eight weeks in downstate Illinois. Olefsky acknowledged receiving this memo but disputes that he was spending insufficient time with his non-Chicago accounts. He says that in September and October of 1995 he had worked six days on Rockford and other downstate accounts.
Despite the terms of his probation, Olefsky spent most of January 1996 doing year-end paperwork, as he had in January 1995. Because he was busy with paperwork, Olefsky did not work the required four days per week on the street that month. He also failed to work his downstate accounts that month.
The last straw for McNichols came the next month — in February 1996. McNichols claims Olefsky fabricated one of his daily sales reports: his February 13, 1996 report was nearly identical to Tim McLees' January 15, 1996 report. McLees was another sales manager in Olefsky's region. McNichols says he confirmed the report was bogus because it reported that Olefsky worked with Mary Anne Wilczewski, his contact at Continental. Wilczewski's supervisor told McNichols that Wilczewski did not work with Olefsky on February 13, 1996. McNichols says that when he confronted Olefsky, he changed his story three times before finally admitting that he did not work with Wilczewski that day.
Olefsky insists that the February 13 report was not fabricated. He says the report was similar to McLees' earlier report because he had to track McLees' sales to confirm that shipments were in fact made. Olefsky says he actually went to see each of the accounts listed but admits he did not talk to the buyers for those accounts. He also says he listed Wilczewski on the report as the sales person he worked with because that was what he was instructed to do. In January 1996, part of Continental's business was sold, and Olefsky says it was difficult communicating with the sales force during this transition. He says that McNichols told him he could report the name of his contact at the distributor even if he didn't actually work with that sales person. Olefsky denies McNichols' claim that he gave several varying explanations for the report.
After checking up on Olefsky's February 13 report, McNichols scrutinized other daily reports to determine if they were fabricated. He says that his investigation uncovered two more false reports. Joe Rogers and John Vickery, both sales persons from Olefsky's distributor, had not worked with Olefsky on the days he had reported. Olefsky denies falsifying these reports. He agrees he did not meet with Rogers on December 12, 1995 but says he spoke with him on the phone and then listed him on the report as McNichols instructed him to do. Olefsky offers no explanation for listing Vickery on his December 13, 1995 report other than to deny that the report was falsified.
As a result of his concerns about Olefsky's credibility, McNichols recommended that Olefsky be terminated. The decision to terminate was made jointly by Anderson, Gosler and McNichols. Grant appears to maintain that the decision was based on Olefsky's falsification of sales reports. See Grant Mem. at 11 (saying that McNichols recommended termination because he "[d]oubt[ed] Plaintiff's credibility and trustworthiness"); Grant Rule 12(M) Statement ¶¶ 63-64 (McNichols "had serious credibility concerns regarding Plaintiff"; he "discussed these matters with Anderson and recommended termination of Plaintiffs employment"); Grant Reply at 13 (characterizing the alleged falsification as "the incident that `broke the camel's back'"). Grant gave Olefsky the option to leave voluntarily, and on February 28, 1996, he resigned. His duties were assumed by McNichols (age 36) and another sales manager, John Morahan (age 30). Olefsky claims his termination was based on age discrimination.
Cross Motions to Strike
As a preliminary matter we must address the evidentiary issues raised in the parties' cross motions to strike. Olefsky has moved to strike the affidavit of Fred Cooper, Continental's President, on hearsay grounds. We deny the motion to strike. In his affidavit Cooper says he "received complaints from Continental personnel that Olefsky was spending an inordinate amount of time in our office" and reported this to Gosler. (Cooper Aff. ¶¶ 7, 10). The statements in Cooper's affidavit offered not for the truth of the matters reported to Gosler, but to show Gosler's state of mind. See Scherer v. Rockwell International Corp., 975 F.2d 356, 358 n. 2 (7th Cir. 1992); Neal v. Honeywell Inc., 995 F. Supp. 889, 893 (N.D. Ill. 1998) (threatening statement of another that was made to whistle blower employee was admissible over hearsay objection; evidence was introduced not to prove truth of statement, but to show state of mind of whistle blower), aff'd, 191 F.3d 827 (7th Cir. 1999).
Olefsky has also moved to strike parts of McNichols' affidavit. McNichols says he spoke with Joe Rogers, a sales representative from Continental (now Judge Dolph, Ltd.), who told him he did not work with Olefsky on the day reported. He also says he spoke with John Vickery's supervisor at Continental and learned that Vickery also did not work with Olefsky on the day he reported. (McNichols Aff. ¶¶ 5-7). Olefsky says that this evidence is inadmissable hearsay. Again, we deny the motion. Like Cooper's affidavit, the information reported to McNichols during his investigation is not hearsay, as it is offered to show McNichols' state of mind in recommending Olefsky's discharge. See Scherer, 975 F.2d at 358 n. 2; see also Schmucker v. Data-Link Systems, Inc., No. 3:96-CV-138RP, 1997 WL 348061, at *7 (N.D. Ind. June 5, 1997) (information reported by plaintiffs co-workers during an investigation was admissible on motion for summary judgment to show company president's "state of mind and good faith belief that he terminated [plaintiff] because of his inappropriate and intimidating behavior.").
Grant has filed its own motions to strike. It first requests that we strike on hearsay and foundation grounds certain Trans Union employment verification forms submitted by Olefsky. We need not address these issues. As explained in the discussion of Olefsky's ADEA claim below, this document does not give rise to a reasonable inference that Grant believed Olefsky was performing satisfactorily. We therefore deny as moot Grant's motion to strike.
We also deny Grant's motion to strike Olefsky's affidavit. Grant argues that four statements in the affidavit are hearsay or lack foundation. The foundational objections are denied because we believe Olefsky had personal knowledge of the statements in his affidavit. To the extent Grant disagrees with Olefsky's averments — e.g., that he increased his total sales — that goes to the weight of the evidence, not its admissibility. Grant also says that the statement in Olefsky's affidavit that he spoke with Joe Rogers and went out in his territory at his request is hearsay. We disagree. This evidence is admissible to show Olefsky's state of mind. It was offered to explain why Olefsky listed Rogers name on his report without having had worked with him in person that day.
Olefsky's ADEA Claim
Resolving Grant's summary judgment motion involves "the threshold inquiry of determining whether there is the need for a trial — whether, in other words, there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Hong v. Children's Memorial Hospital, 993 F.2d 1257, 1260-61 (7th Cir. 1993) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986)). To show a violation of the ADEA, Olefsky must demonstrate that his age was a determining factor in Grant's decision to terminate his employment. E.g., Wolf v. Buss (America) Inc., 77 F.3d 914, 919 (7th Cir. 1996). Olefsky can meet his burden with either direct evidence of discrimination or by proceeding under the indirect burden-shifting method set out in McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973). Id. Olefsky attempts to proceed under both methods.
A. Direct evidence of discrimination
Under the direct method of proof, Olefsky must present evidence of age discrimination that "will prove the particular fact in question without reliance on inferences or presumption." Pitasi v. Gartner Group, Inc., 184 F.3d 709, 714 (7th Cir. 1999) (internal citations and quotations omitted). Olefsky offers as direct evidence two alleged "ageist" remarks and a comment about McNichols' youth, but none of these statements are sufficient to make out a case of age discrimination.
First, at a 1990 sales meeting, Anderson, Grant's president, told the attendees (whose ages ranged from 30 to 60) that they should start hiring their replacements. Second, in 1992, Olefsky says Gosler told him that another sales manger named Gene Billik seemed old and could not perform his job at his age. Third, in announcing McNichols' promotion, Gosler described McNichols — then 36— as a "very bright, energetic, young man." Even assuming these three remarks were indeed ageist comments, they were made several years before Olefsky's termination and were not directed towards him. "[A] proffer of direct evidence `must not only speak directly to the issue of discriminatory intent, it must also relate to the specific employment decision in question.'" Wold v. Fellows Corp., 987 F. Supp. 662, 665-66 (N.D. Ill. 1997) (citing Cowan v. Glenbrook Security Services, Inc., 123 F.3d 438, 443 (7th Cir. 1997)); see also Cianci v. Pettibone Corp., 152 F.3d 723, 727 (7th Cir. 1998) (direct evidence excludes stray remarks not made in the context of an adverse employment decision); Hong, 993 F.2d at 1266 (alleged discriminatory remarks, when unrelated to the employment decision in question, are not evidence that the employer relied on illegitimate criteria in making employment decision).
Olefsky claims that Wold is analogous here. We disagree. When Wold was discharged he was told by his employer that it was because they wanted a "young guy with fire coming out of his ass." Wold, 987 F. Supp. at 665. This ageist comment was contemporaneous with Wold's discharge. Unlike in Wold, Olefsky cannot show any nexus between these alleged "ageist" remarks and an adverse employment action. Id. Moreover, a common and benign phrase like "young man," made about another employee and not in the context of an adverse employment action, does not constitute direct evidence of age discrimination. See, e.g., Beatty v. Wood, ___ F.3d ___, No. 98-4226, 2000 WL 190268, at *3 (7th Cir. Feb. 17, 2000) (employer's statement that they needed "new blood" "does not, in isolation, evidence age-based discriminatory animus."); Pitasi, 184 F.3d at 714-15 (holding that an employer's suggestion of retirement would not alone give rise to an inference of discrimination).
Finally, Olefsky offers Grant's forced retirement policy as direct evidence of age-based discrimination. But there is no evidence here that anyone other than an officer had been asked to retire, which is consistent with testimony by Anderson, Grant's president, who says that the policy applies only to senior level executives. This policy does not show that Grant fired Olefsky (who was not a senior level executive) because he was old. See, e.g., Fairchild v. Forma Scientific Inc., 147 F.3d 567, 573-74 (7th Cir. 1998) (plaintiff failed to connect employer's "trend" of hiring young people with his termination). We therefore find Olefsky's purported direct evidence of discrimination insufficient to require a trial.
B. In direct evidence of discrimination
Without direct evidence of discrimination, Olefsky must proceed under the indirect McDonnell Douglas burden-shifting method of proof. Under this method, Olefsky must first establish a prima facie case of age discrimination. See Robin v. Espo Engineering Corp., ___ F.3d ___, No. 98-3909, 2000 WL 28121, at *5 (7th Cir. Jan 13, 2000). A prima facie case gives rise to a presumption of discrimination. Fairchild, 147 F.3d at 572. The employer must then produce a legitimate non-discriminatory reason for its employment action. If the employer does so, the burden shifts back to the employee to show that the employer's stated reason for its action is pretextual. Id.
To establish a prima facie case of age discrimination, Olefsky must show (1) he was within the protected age group (over 40), (2) he was performing his job satisfactorily, (3) he was discharged, and (4) Grant hired someone to replace him who was substantially younger, or there is other evidence indicating that it is more likely than not he was discharged because he was over 40. Robin, 2000 WL 28121, at *5; see also Fairchild, 147 F.3d at 571.
Olefsky easily meets the first and third elements: he was discharged by Grant at age 52, well within the protected age group. The fourth element is also easily met here. Olefsky's duties were assumed by McNichols (age 36) and the then Indiana Sales Manager, John Morahan (age 30). And Morahan was later replaced by two employees ages 30 and 29. All of Olefsky's successors were younger than him by at least fifteen years. This disparity in ages is sufficient to satisfy this element of Olefsky' s prima facie case. See O'Connor v. Consolidated Coin Caterers Corp., 517 U.S. 308, 309 (1996) (plaintiff can make a prima facie case of disparate treatment by showing that he or she was replaced by a significantly younger employee).
Olefsky was also hired by Grant when he was a member of the protected class — at age 42, which somewhat undercuts his claim that Grant has an age bias and fired him because he was old. See Ritter v. Hill `N Dale Farm, Inc., No. 98 C 2895, 1999 WL 569566, at *3 (N.D. Ill. July 28. 1999), and cases cited therein.
Lastly, Olefsky must introduce evidence sufficient to permit a jury to find that he was performing his job satisfactorily, in other words, that he was meeting Grant's legitimate performance expectations. Grant says Olefsky cannot satisfy this element because during 1995, Olefsky had been placed on probation twice for not meeting performance directives, for spending too much time socializing at Continental, and for not working his non-Chicago accounts enough. Yet this is actually some evidence that Olefsky was meeting Grant's basic performance expectations; he was not fired but instead was placed on probation so his activities could be monitored. Moreover, Olefsky disputes that he was spending insufficient time with his non-Chicago accounts and denies socializing at Continental. Because the burden of establishing prima facie case is minimal, there is a genuine dispute as to whether Olefsky was meeting his employer's expectations during 1995. O'Connor, 517 U.S. at 312-13 (prima facie case simply requires "`evidence adequate to create an inference that an employment decision was based on a[n] [illegal] discriminatory criterion. . . .'") (citing Teamsters v. United States, 431 U.S. 324, 358 (1977)); Roberts v. Separators, Inc., 172 F.3d 448, 451 (7th Cir. 1999) ("because this is a prima facie case with minimal burdens, the plaintiffs self-serving statements may create a material dispute about . . . [his own] ability.") (internal citations and quotations omitted).
The critical issue, however, is not whether Olefsky was performing satisfactorily throughout his employment with Grant, but whether he was performing satisfactorily at the time of his termination. See Hong, 993 F.2d at 1262. Grant argues that he was not. Olefsky spent most of January 1996 doing paperwork and admits he did not work the required four days per week on the street that month. He also admits he did not work his non-Chicago accounts during January. Because he went downstate in October and November, he claims it would have been "ludicrous" to go back in January. He planned to go back downstate after he finished his paperwork for the previous year. (Olefsky Dep. at 90).
Olefsky attempts to excuse his failure to meet Grant's requirements during January 1996 by saying that Grant knew it was his common practice in January to spend time organizing and submitting his year-end bills; he had also done this the year before. But Grant had reprimanded him for doing this in January 1995. McNichols warned Olefsky that he had to work the market; indeed, he was put on probation in February 1995. In view of the previous year's reprimand, Olefsky cannot claim Grant acquiesced in his behavior, particularly considering the express terms of his second probation two months earlier: in November 1995 he received two memos explaining that he was required to spend four days per week in the market and at least four days every eight weeks working his downstate accounts. In one of those memos, Olefsky was advised that if he failed again, he would be terminated. In sum, Olefsky has no evidence that Grant accepted his January practice of doing paperwork; all the evidence indicates exactly the opposite.
Olefsky relies on a post-employment verification form to dispute the evidence that he was not performing satisfactorily at the time of his termination. Trans Union, an employment screening service, asked Grant to complete an employment verification form a year after Olefsky was fired. On that form in the category asking about Olefsky's job performance, the "good" box was checked off, but the entry was redacted. Olefsky claims that this completed verification form is evidence that Grant thought he was performing satisfactorily and that he was really fired because he was old. We disagree. First, as Grant point out, there is no evidence that a person with knowledge of Olefsky's performance completed the form. Second, the "good" mark was erased or redacted, and significantly, Grant never sent the completed form to Trans Union. If anything, this evidence suggests that Grant was uncertain about how to handle an employment verification request for an employee who was discharged; it does not show he was performing up to Grant's legitimate expectations, as that would be "too great a reach." See, e.g., Roberts, 172 F.3d at 453 (drawing all inferences in favor of the plaintiff, the court refused to find that a termination letter that simply said plaintiff engaged in "no misconduct" as evidence of pretext where employee had been discharged for his "bad attitude."). We therefore find that there is no genuine issue of fact as to whether Olefsky was performing satisfactorily at the time of his termination; he was not.
It is not clear that this is what actually prompted Olefsky's termination. The materials Grant submitted in support of summary judgment hang the termination decision on the claimed falsification of reports. But even if Olefsky was not fired for violating Grant's performance directives, summary judgment can and should be granted on this basis if there is no genuine issue of fact as to whether he was meeting Grant's legitimate performance expectations. See Coco v. Elmwood Care, Inc., 128 F.3d 1177, 1180 (7th Cir. 1997) (the question of the reason for discharge does not arise if an employee was not performing up to the employer's legitimate expectations, as "that is the end of your case if McDonnell Douglas is all that you have to go on."). We therefore need not consider Grant's stated reasons for firing Olefsky, as that is an inquiry reserved for plaintiffs who have established a prima facie case.
Conclusion
For these reasons, we find that Olefsky has not made out a prima facie case of age discrimination. We therefore grant defendant's motion for summary judgment on Olefsky's ADEA claim. Its motion for summary judgment on punitive damages is denied as moot, and the parties' cross motions to strike affidavits are denied for the reasons set forth above. This case is dismissed.