Craig Waters v. Logistics Management Institute

• Court: Court of Appeals for the Fourth Circuit
• Decided: February 9, 2018
• Docket: 16-2353
• Status: Unpublished

Opinion

UNPUBLISHED

UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT

No. 16-2353

CRAIG WATERS,

Plaintiff - Appellant,

v.

LOGISTICS MANAGEMENT INSTITUTE,

Defendant - Appellee.

________________

No. 17-1056 ________________

Plaintiff - Appellee,

Defendant - Appellant.

Appeal from the United States District Court for the Eastern District of Virginia, at Alexandria. Claude M. Hilton, Senior District Judge. (1:15-cv-01655-CMH-JFA)

Argued: January 23, 2018 Decided: February 9, 2018 Before WILKINSON, AGEE, and WYNN, Circuit Judges.

Affirmed by unpublished per curiam opinion.

ARGUED: Adam Augustine Carter, EMPLOYMENT LAW GROUP, PC, Washington, D.C., for Appellant/Cross-Appellee. Lincoln Owens Bisbee, MORGAN, LEWIS & BOCKIUS LLP, Washington, D.C., for Appellee/Cross-Appellant. ON BRIEF: R. Scott Oswald, EMPLOYMENT LAW GROUP, PC, Washington, D.C., for Appellant/Cross- Appellee. Grace E. Speights, MORGAN, LEWIS & BOCKIUS LLP, Washington, D.C.; Andrew G. Sakallaris, LOGISTICS MANAGEMENT INSTITUTE, Tysons, Virginia, for Appellee/Cross-Appellant.

Unpublished opinions are not binding precedent in this circuit.

2 PER CURIAM:

Plaintiff-appellant Craig Waters brought this age discrimination suit against his

former employer, Logistics Management Institute (LMI). Waters alleges that the district

court erred in granting summary judgment to LMI. Specifically, he argues that he

presented an issue of triable fact on whether he was terminated because of his age or, in

the alternative, as retaliation for expressing concerns about his job security. LMI,

however, had a consistent and non-pretextual business explanation for its decision to fire

Waters. We thus affirm the judgment.

I.

LMI is a nonprofit organization that offers consulting services to the government.

When this suit was filed, the firm employed around 1,200 employees. Two-thirds of the

company’s workforce was over the age of forty, and forty percent of the employees were

over fifty.

LMI hired Waters in October 1988. His job was to provide computer support for

various company teams. Ten years later, Waters moved to LMI’s Corporate Information

Systems (CIS) department, where he was promoted to supervisor of CIS’s Applications

Development group. In that role, Waters was responsible for supervising three

programmers who designed and maintained business applications that LMI used

internally.

Although Waters’ performance reviews were generally positive, his yearly

evaluations indicated that he did not take to his supervisory role. When asked about

Waters during an internal company review of the CIS department, at least three LMI

3 executives complained about his inability to turn around projects in a timely manner and

about his reluctance to adequately supervise the programmers in his group.

In May 2013, LMI hired Lori Becker as Chief Financial Officer (CFO). As CFO,

she was responsible for overseeing CIS. Because Becker felt that CIS was costly and

prone to unnecessary delays, she brought in G2SF, a technology consulting firm, to

evaluate the CIS department. G2SF concluded that CIS was not operating efficiently and

recommended that it be reorganized. Based on G2SF’s analysis, Becker hired William

Brydges to replace Robert Bertha as the director of CIS. Becker tasked Brydges with

making the department run more efficiently.

Shortly before Brydges began his review of CIS, Waters met with Becker

informally to discuss his future at LMI. Bertha’s resignation had left Waters concerned

about his own job security, and he expressed this concern to Becker in late September

2014. During the meeting, Becker asked Waters why the Applications Development

group needed four programmers. Waters left fearful that he would no longer have a role

at LMI.

Brydges proceeded to evaluate every group in CIS, including Infrastructure,

Information Security, and Applications Development. He met with numerous CIS

employees, including Waters, and also with a number of executives from other

departments.

During his evaluation of CIS, Brydges concluded that the division would operate

more effectively if the Applications Development group did not build and maintain

custom business applications, but instead purchased existing software from other

4 companies. For this reason, he felt that CIS needed employees who could work with

internal clients using software that was already available. After discussing his plan with

Waters, Brydges felt that Waters did not understand the strategy he intended to

implement. Brydges also concluded that Waters did not adequately perform his

supervisory duties, and that he was effectively a fourth programmer who was paid

approximately twenty percent more than the other programmers in the group.

After finishing his review of CIS, Brydges decided to reorganize the department.

As part of this restructuring, he recommended disbanding the Applications Development

group and eliminating Waters’ position as supervisor of that group. Brydges terminated

Waters in January 2015. Waters was the only employee who was fired in this

restructuring. He was fifty-two at the time.

Eleven months later, Waters filed a suit against LMI, claiming that his termination

violated the Age Discrimination in Employment Act (ADEA), 29 U.S.C. § 621 et seq.

First, he argued that his termination constituted unlawful age discrimination under 29

U.S.C. § 623(a). And second, he argued that his termination constituted unlawful

retaliation for complaining about his job security, which he claimed was protected

activity under 29 U.S.C. § 623(d).

Waters relied on the following facts to support his claim. First, Waters pointed out

that during a Town Hall meeting in July 2014, LMI’s CEO, Nelson Ford, said that

“people with gray hair are probably not the future” of the firm. J.A. 608-10. Three

months before Waters was terminated, Ford apologized for his remarks and clarified that

he only intended his words to be understood in connection with succession planning.

5 Second, Waters noted that LMI reduced certain benefits such as retirement contributions

and annual leave accrual for employees with more than fifteen years of service. And

third, Waters claimed that he engaged in protected activity when he met with Becker to

discuss his job security, and that a jury could reasonably find that he was fired in

retaliation for opposing LMI’s allegedly discriminatory employment policies.

Following discovery, LMI filed a motion for summary judgment, which the

district court granted. The court found that LMI had a “legitimate, non-discriminatory

reason for terminating Plaintiff’s employment.” J.A. 506. Specifically, it determined that

Waters was fired because he failed to perform his job satisfactorily, and because LMI did

not see a place for him in the reorganized CIS group. LMI also filed an eleventh-hour

motion for sanctions and attorney’s fees, which the district court denied.

II.

A.

On appeal, Waters contends that he presented an issue of triable fact about

whether he was terminated because of his age. As a result, he argues that the district court

erred in granting summary judgment to LMI. We review de novo the district court’s

decision to grant summary judgment to LMI. See Medical Waste Assocs. v. Mayor & City

Council of Balt., 966 F.2d 148, 150 (4th Cir. 1992).

The ADEA forbids an employer from taking an adverse employment action

against an employee “because of” that employee’s age. 29 U.S.C. § 623(a)(1). A plaintiff

bringing a disparate-treatment suit under the ADEA must prove that his age was a

motivating factor in the challenged adverse employment action. See Gross v. FBL Fin.

6 Servs., Inc., 557 U.S. 167, 180, (2009). In the absence of direct evidence of

discrimination, a plaintiff must proceed under the burden-shifting framework in

McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802-07 (1973).

There are three steps in the McDonnell Douglas framework: (1) the plaintiff must

establish a prima facie case of discrimination; (2) if the plaintiff presents a prima facie

case, then the burden shifts to the defendant to show a legitimate and non-discriminatory

reason for the adverse employment action; and (3) if the defendant shows such a reason,

then the burden shifts to the plaintiff to prove that the reason is pretextual. See

McDonnell Douglas Corp., 411 U.S. at 802-04.

Waters did not establish a prima facie case of age discrimination. To do so, a

plaintiff must show that he “was performing [his] job duties at a level that met [his]

employer’s legitimate expectations,” and either that his position remained open or that he

was replaced by a “substantially younger” person. Hill v. Lockheed Martin Logistics

Mgmt., Inc., 354 F.3d 277, 285 (4th Cir. 2004). Waters did neither.

First, Waters did not perform his job duties to LMI’s satisfaction. Waters’ primary

responsibility as supervisor of Applications Development was to “[s]upervise, organize,

and control the activities of department staff responsible for developing, maintaining, and

modifying application programs.” J.A. 177-80. For ten years, he received poor

performance reviews concerning his ability to manage his subordinates. These concerns

were corroborated by both of his direct supervisors, and by at least three other LMI

executives.

7 Second, LMI did not replace Waters with a “substantially younger” employee. As

a preliminary matter, it is worth noting that in a corporate reorganization, the “fact that

the duties of a terminated older employee were assumed by a younger individual is not

conclusive of age bias.” Birkbeck v. Marvel Lighting Corp., 30 F.3d 507, 512 (4th Cir.

1994). Moreover, LMI did not actually replace Waters. While it is true that some of

Waters’ programming duties were assigned to other LMI employees, LMI eliminated the

role of supervisor for the Applications Development group. In fact, Waters’ old role

remained unfilled when the district court issued its ruling more than twenty months after

he was terminated. LMI simply decided to restructure the Applications Development

group in a manner that resulted in the elimination of Waters’ position.

Even if Waters could establish a prima facie case of age discrimination, his claim

would still fail because LMI had a legitimate reason for terminating him. A decision to

reorganize or restructure management responsibilities constitutes a non-discriminatory

business decision. See Brown v. Maryland Nat’l Capital Park, Planning Comm’n, 162

F.3d 1154 (4th Cir. 1998). As noted, Brydges terminated Waters after deciding to

eliminate Waters’ position as supervisor of the Applications Development group. This

decision was based on three related concerns. The first was that Waters was not actually

leading the group; the second was that the company should eliminate Waters’ position;

and the third was that Waters was not suited to a position in the reorganized department.

In the end, Brydges simply did not feel that Waters was suited to transition to a business

consultant role. Brydges’ analysis was informed by conversations with all of the

employees in Waters’ department, as well as numerous other department heads. Brydges’

8 conclusion about Waters’ management skills was consistent with the criticisms that were

made in writing over a ten-year period by Waters’ prior supervisor. Waters himself

testified that he was a supervisor in name only. LMI therefore had a valid, non-

discriminatory reason for terminating Waters as part of its internal reorganization.

Against all of this, Waters relied upon a few scattered facts to argue that LMI’s

justification was merely a front for its discriminatory intent. First, Waters claimed that

LMI offered inconsistent explanations for its decision to discharge Waters. This is

incorrect. LMI justified Waters’ termination by explaining that (1) Waters did not fit into

the reorganized CIS department, and (2) he exhibited performance deficiencies. These are

not mutually incompatible explanations. Waters’ professional performance was relevant

to Brydges’ determination that Waters was unsuited for any of the remaining positions in

the restructured department. Moreover, an employer is well within its rights to terminate

someone for more than one non-discriminatory reason.

Second, Waters argued that LMI acted in a hostile manner to elderly employees by

reducing retirement contributions and limiting annual leave accrual for employees with

more than fifteen years of experience. The Supreme Court has found that a given benefits

plan will only be found to be discriminatory if the plan was “actually motivated” by bias

against older workers. Kentucky Retirement Systems v. EEOC, 554 U.S. 135, 139 (2008).

LMI decided to make these benefits changes only after an outside consultant suggested

that it do so to cut costs. The retirement contribution limits affected young and older

workers alike, and the limitations on annual leave accruals were based on tenure, not age.

This was plainly a business decision.

9 And third, Waters pointed to a single comment of LMI CEO Nelson Ford more

than six months before Waters was terminated. That comment was made during a Town

Hall meeting in the context of a discussion about the future direction of the company.

Ford said, “People with gray hair are probably not the future . . . we’ve gotta think about

how we’re going to continue to make sure that this organization is as strong 50 years

from now as it is today.” J.A. 208-10. The remoteness in time between this statement and

Waters’ termination suggests that the statement should not give rise to an inference of age

discrimination. See Birkbeck, 30 F.3d at 512.

More importantly, Ford’s statement provides no evidence of age bias. To begin

with, Ford was not responsible for making the decision about whether to terminate

Waters, and there was no evidence that Ford’s comments influenced Brydges’ decision to

eliminate Waters’ position. While some may have taken exception to the comment, it was

an innocuous remark reflecting the uncontroverted fact that the future of many companies

rests upon bringing in a stream of younger workers. That of course does not justify

stereotypes that older workers are unfamiliar with or unable to adapt to changes in

technology or bereft of new ideas. In this case, however, Ford simply made a

commonplace observation that certainly did not indicate that any kind of purge was going

on or that older workers had no place at LMI. Such remarks do not indicate a

discriminatory policy. See id.

In short, there was no discrimination afoot. LMI simply decided that Waters was

not suited for a remaining position in a restructured department. This was a business

decision that was entirely devoid of any age-based animus.

10 B.

Waters also fails to bring any evidence of retaliation. The ADEA prohibits an

employer from retaliating against an employee for engaging in protected activity, such as

opposing any practice made unlawful by the ADEA. 29 U.S.C. § 623(d).

To establish a prima facie case for retaliation, Waters must show that: “(1) he

engaged in protected activity; (2) an adverse action was taken against him; and (3) there

was a causal link between the protected activity and the adverse action.” Laber v. Harvey,

438 F.3d 404, 432 (4th Cir. 2006). Waters’ retaliation claim fails under this standard.

First, it is questionable that Waters engaged in protected activity. Although

“protected activity” encompasses informal complaints, see Laughlin v. Metro.

Washington Airports Auth., 149 F.3d 253, 259 (4th Cir. 1998), an employee’s conduct is

protected only if he actually voices opposition to discriminatory activities. See Burgess v.

Bowen, 466 F. App’x 272, 282 (4th Cir. 2012).

Waters did not make any formal complaint. Instead, he argued that he engaged in

protected activity on two occasions. The first occurred in a discussion with LMI CFO

Lori Becker when Waters expressed concern about his job security following the

resignation of his long-time supervisor, Robert Bertha. The second was in a conversation

with Brydges in which Waters complained about LMI’s policy for assigning office space.

It is far from clear that these informal discussions conveyed that Waters feared becoming

the victim of age-based discrimination.

Even if Waters could establish a prima facie case of retaliation, LMI still had a

legitimate and non-discriminatory reason for terminating Waters. To prove causation, a

11 plaintiff must show that his employer knew or should have known that the employee

engaged in a protected activity, and that the activity led to the adverse employment

action. See Dowe v. Total Action Against Poverty in Roanoke Valley, 145 F.3d 653, 657

(4th Cir. 1998). The dismissal, as we have explained, was made simply as a byproduct of

the reorganization, not because of any discriminatory or retaliatory motive on the part of

the decision-maker. There was, in other words, no causal link between the activity Waters

claimed to be protected and his termination. LMI just did not have room for Waters in the

restructured CIS department.

III.

Finally, we affirm the district court’s decision to deny LMI’s motion for sanctions

and for attorney’s fees. Although Waters lost on the merits, the district court did not

abuse its discretion in denying the motion for sanctions or attorney’s fees. In this case,

the district court justifiably concluded that a lack of success on the merits of the action

did not warrant an award of fees or the imposition of sanctions.

IV.

The judgment of the district court is accordingly

AFFIRMED.