Barnes v. GenCorp Inc.

896 F.2d 1457, 1990 U.S. App. LEXIS 2392, 52 Empl. Prac. Dec. (CCH) 39,688, 56 Fair Empl. Prac. Cas. (BNA) 1203
CourtCourt of Appeals for the Sixth Circuit
DecidedFebruary 22, 1990
DocketNos. 89-3104, and 89-3192 to 3195
StatusPublished
Cited by436 cases

This text of 896 F.2d 1457 (Barnes v. GenCorp Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Barnes v. GenCorp Inc., 896 F.2d 1457, 1990 U.S. App. LEXIS 2392, 52 Empl. Prac. Dec. (CCH) 39,688, 56 Fair Empl. Prac. Cas. (BNA) 1203 (6th Cir. 1990).

Opinion

KENNEDY, Circuit Judge.

In this consolidated appeal, plaintiffs-appellants challenge the District Court’s grant of summary judgment for the defendants-appellees, their employers, in these age discrimination cases.1 The cases arose from a corporate restructuring in which a number of employees, including the plaintiffs, were permanently discharged. The plaintiffs assert that they created a jury question by establishing a prima facie case of age discrimination under McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973), and by setting forth facts to rebut the defendants’ alleged nondiscriminatory reasons for the discharges. The defendants argue that the District Court correctly found that no pri-ma facie case was established and, in the alternative, argue that the plaintiffs have not rebutted the proffered nondiscriminatory reasons for the discharges. We AFFIRM in part, REVERSE in part, and REMAND for further proceedings.

I. BACKGROUND

A. General Information

In March 1987, GenCorp was the target of a hostile tender offer by General Acquisition, Inc. GenCorp defended against this takeover attempt by instituting a $1.4 billion stock repurchase program financed by the sale of two GenCorp subsidiaries — General Tire, Inc., a tire manufacturing operation and GenCorp’s largest subsidiary, and RKO Bottling, a soft drink bottling operation.2

Prior to the attempted hostile takeover, GenCorp maintained a Research Division headquartered in Akron, Ohio where seven of the plaintiffs were employed. The Research Division conducted research in three areas: (1) tire technology; (2) projects associated with GenCorp’s automotive and polymer-based products; and (3) exploratory and support research. Following the divestiture of its largest subsidiary, GenCorp determined that it should curtail research activity and reduce the size of its Research Division staff. As a result, seven of the plaintiffs, as well as thirty-one other employees, were discharged. The specific decisions on which Research Division employees were to be eliminated were made by upper management employees in the Research Division, including Russell Livigni, Director of the Research Division.

[1462]*1462GenCorp’s other subsidiaries, including DiversiTech, were also affected. Diversi-Tech instituted numerous cost-cutting measures including a hiring freeze, suspension of all training seminars, a 25% reduction in travel expenses, a 50% reduction in overtime, and the termination of all temporary help. Despite these measures, management was still required to reduce the payroll. The four DiversiTech plaintiffs and nine other employees were discharged after DiversiTech management determined that the positions occupied by the plaintiffs could be eliminated with the least disruption to company operations. The specific decisions were apparently made by Polymers Division President Howard Wheeler, who relied in part on recommendations made by upper-level management employees.

At both GenCorp and DiversiTech, no discharged employee whose position was eliminated was allowed to displace any other employee regardless of his or her relative seniority. The plaintiffs describe the so-called no-bump policy as an eleventh-hour change of position designed to enable the company to complete its discriminatory scheme. Both defendants deny that they had a bumping policy prior to the restructuring, but the plaintiffs have produced at least some evidence from which a jury could conclude that a policy existed. Gen-Corp cites the testimony of Russell Livigni, Director of the Research Division, who stated that the Division had never applied a bumping policy during his three-year tenure. Fred A. Deaner, GenCorp’s Director of Staffing, Development, and EEO, stated in his deposition that GenCorp did not have a “published policy” to allow bumping but did have a “practice” of allowing more senior employees to bump less senior employees. According to Deaner, the practice was eliminated “just prior” to the restructuring.3 While Deaner stated later in his deposition that he believed the policy was eliminated much earlier, this only creates a jury issue.

Similarly, there is some support for the existence and withdrawal of a bumping policy at DiversiTech. Richard D. First, DiversiTech’s Director of Personnel, testified that while DiversiTech had no bumping policy, it did circulate a document to company personnel shortly before the reorganization stating that no bumping would be allowed. He explained that this step was taken because bumping had been allowed during a factory closure in 1981 or 1982.

B. Statistical Proof

The plaintiffs presented two statistical reports — one for the GenCorp plaintiffs and one for the DiversiTech plaintiffs — prepared by Harvey S. Rosen and John F. Burke, Jr. The defendants do not here challenge their credentials as expert statisticians. The two reports analyzed the termination patterns of the employees who were discharged during the force reduction. Both reports utilized information provided by the defendants.

1. GenCorp

In the GenCorp cases, Rosen and Burke calculated the termination rates in Gen-Corp’s Research Division for employees age 48-and-over, 52-and-over, and 55- and-over, and for employees under ages 48, 52, and 55. The data included the number and percentage of employees in each age group in the Research Division prior to the work force reduction. The actual termination rates for each group were compared to the expected termination rates had employees been selected randomly for termination.

Data based on the 153 total staff members in the Research Division, 38 of whom were fired, revealed that the 48-and-over age group comprised 43.1% of the total employee population but 63.2% of those discharged. Twenty-four of the 66 employees, 36.4%, age 48-and-over were discharged. But only 14 of the 87 employees, 16.1%, under age 48 were discharged. The 52-and-over age group comprised 28.8% of the total employee population but 50% of those discharged. Nineteen of the 44 employees, 43.2%, age 52-and-older were eliminated. Only 19 of the 109 employees, 17.4%, under age 52 were discharged. The 55-and-over age group comprised 19.6% of [1463]*1463the total employee population but 42.1% of those discharged. Sixteen of the 30 employees, 53.3%, age 55-and-over were eliminated. Only 22 of the 123 employees, 17.9%, under age 55 were discharged.4 This data was presented to the District Court in a series of charts divided by age group. The significance of the data was explained in a cover letter to the plaintiffs’ lawyers, a copy of which was submitted to the court.

In all but the age-48-and-over grouping, Rosen and Burke stated that “the Chi-Square statistic fell beyond three standard deviations from the hypothesized random result, indicating significantly higher-than-expected termination levels in the older age groups.” The age-48-and-over grouping “produced a Chi-Square sufficiently close to three standard deviations that it yielded a probability or confidence level of 99.6 percent, compared with 99.7 percent for three standard deviations.”5

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896 F.2d 1457, 1990 U.S. App. LEXIS 2392, 52 Empl. Prac. Dec. (CCH) 39,688, 56 Fair Empl. Prac. Cas. (BNA) 1203, Counsel Stack Legal Research, https://law.counselstack.com/opinion/barnes-v-gencorp-inc-ca6-1990.