USCA1 Opinion
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
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No. 95-1523
WILLIAM R. LEHMAN,
Plaintiff, Appellant,
v.
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
Defendant, Appellee.
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APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Bailey Aldrich,1 Senior Circuit Judge]
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Before
Stahl, Circuit Judge,
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Campbell, Senior Circuit Judge,
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and Lynch, Circuit Judge.
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Scott A. Lathrop for appellant.
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Alice E. Richmond with whom John Foskett and Deutsch
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Williams Brooks DeRensis Holland & Drachman were on brief for
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appellee.
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January 22, 1996
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1Of the United States Court of Appeals for the First
Circuit, sitting by designation.
CAMPBELL, Senior Circuit Judge. William R. Lehman,
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a former employee of the Prudential Insurance Company of
America ("Prudential"), sued in the district court for age
discrimination in violation of the Massachusetts Fair
Employment Practices Act, Mass. Gen. L. ch. 151B, 4, and
for pension discrimination in violation of section 510 of the
Employment Retirement Income Security Act ("ERISA"), 29
U.S.C. 1140. The district court granted Prudential's
motion for summary judgment on both counts and denied
plaintiff's motion for reconsideration. Lehman appealed. We
affirm.
I.
We summarize the facts in the light most favorable
to Lehman, the party opposing summary judgment. Barbour v.
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Dynamics Research Corp., 63 F.3d 32, 36 (1st Cir. 1995).
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Prudential hired Lehman in late 1974 to work as a
brokerage manager for the Greater New York Brokerage Agency.
In 1978, Lehman was relocated and promoted to agency manager
of the brokerage agency in Boston, Massachusetts. In 1986,
Prudential expanded the territory of the agency run by
Lehman, making him director of its New England Brokerage
Agency which included all of New England except Fairfield
County in Connecticut. Even after the expansion, the New
England agency was relatively small; nevertheless, it
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performed very well under Lehman's direction. In 1988,
Prudential created Pru Select, a separate sales division of
Prudential's life insurance business, to supervise the twelve
regional brokerage agencies. Ira Kleinman was appointed
President of Pru Select, and he hired Roger Dunker as Pru
Select's Senior Vice President. Dunker, along with Lehman's
prior supervisors, gave Lehman glowing performance reviews.
Effective January 1, 1990, Pru Select revised its
pension plan by changing the commencement year for
calculating average eligible earnings from 1979 to 1983,
benefitting more senior employees, and by providing a 50%
annuity to widows without charge to the employee, benefitting
Lehman whose wife is fifteen years younger than he. Lehman
projected the additional cost to Prudential of his pension,
in light of the above modifications, to be $500,000.
Also at that time, Pru Select overhauled and
streamlined its brokerage agencies. It consolidated its
twelve regions and directors into five regions and seven
directors. In December of 1990, Dunker told Lehman that as
of April 1, 1991, his New England office was going to be
consolidated with the entire New York territory and part of
the New Jersey territory. Lehman was to assume the duties
and compensation scheme of a brokerage manager and report to
the co-managing directors in the newly created Northeast
region: Robert Kiley, the pre-consolidation director of the
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New York office, and the newly hired David Dietz. According
to Lehman, his income potential as brokerage manager could be
less than 25% of what it had been as a director. Lehman was
instructed to formulate his own unit of brokers in New
England from whom he could solicit business. However, he did
not feel that this was possible, and after several meetings
in which he attempted to define his new unit, he wrote to
Dunker stating that the reassignment of his responsibilities
constituted involuntary termination motivated by age
discrimination. Lehman then accepted an early retirement
package.
Before the merger, Lehman, aged 61, directed the
New England office, and Kiley, aged 57, directed the New York
office. After consolidation of the two offices into the new
Northeast region, the latter was headed jointly by Kiley and
the 42-year-old Dietz. According to Lehman, the post-
consolidation directors had the same responsibilities as the
pre-consolidation directors, but instead of being
geographically separated, their responsibilities were now
more specialized. The overall results of the various
regional consolidations were that four of the twelve pre-
consolidation directors, aged 63, 57, 57, and 42, were
appointed to director positions. One of the pre-
consolidation directors, aged 62, retired. The remaining
seven pre-consolidation directors, aged 61 (Lehman), 47, 45,
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45, 45, 41, and 37, were demoted to brokerage managers. The
three newly appointed directors were aged 42, 42, and 40.
II.
II.
This court reviews the district court's grant of
summary judgment de novo. Goldman v. First Nat'l Bank of
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Boston, 985 F.2d 1113, 1116 (1st Cir. 1993). Summary
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judgment is appropriate when the record, viewed in the light
most favorable to the nonmoving party, shows no genuine issue
of material fact, the moving party being entitled to judgment
as a matter of law. Fed. R. Civ. P. 56(c); United States v.
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Diebold, Inc., 369 U.S. 654, 655 (1962); Lareau v. Page, 39
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F.3d 384, 387 (1st Cir. 1994). "Even in cases where elusive
concepts such as motive or intent are at issue, summary
judgment may be appropriate if the nonmoving party rests
merely upon conclusory allegations, improbable inferences,
and unsupported speculation." Medina-Munoz v. R.J. Reynolds
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Tobacco Co., 896 F.2d 5, 8 (1st Cir. 1990).
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Age Discrimination Claim
Age Discrimination Claim
Lehman alleges that his employer, Prudential,
unlawfully discriminated against him on the basis of his age,
in violation of Mass. Gen. L. ch. 151B, 4.1 Under
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1. The Massachusetts age discrimination statute states in
relevant part:
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Massachusetts law, discrimination claims are analyzed and
reviewed under a three stage order of proof. See Wheelock
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College v. Massachusetts Comm'n Against Discrimination, 371
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Mass. 130, 355 N.E.2d 309, 313-14 (1976) (citing McDonnell
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Douglas Corp. v. Green, 411 U.S. 792, 802 (1973)). The first
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stage consists of ascertaining whether the plaintiff has made
out a prima facie case of discrimination. If so, the burden
shifts to the employer to provide a legitimate,
nondiscriminatory reason for its employment decision. In the
third stage, the plaintiff must establish either that the
employer's reason was a pretext or that the actual reason for
the adverse employment decision was discrimination.2 Blare
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It shall be an unlawful practice: . . .
1B. For an employer in the private
sector, by himself or his agent, because
of the age of any individual, to refuse
to hire or employ or to bar or to
discharge from employment such
individual, or to discriminate against
such individual in compensation or in
terms, conditions or privileges of
employment, unless based upon a bona fide
occupational qualification.
Mass. Gen. L. ch. 151B, 4.
2. In this third stage, the burden on the plaintiff is less
under Massachusetts law than it is under federal law. To
survive summary judgment under federal law, the plaintiff is
required to show that the employer's reason was pretextual
and that the actual reason for the adverse employment
decision was discrimination. Under Massachusetts law,
showing that an employer's proffered reason for an adverse
employment action is merely pretextual is sufficient by
itself to survive summary judgment. See Blare, 646 N.E.2d at
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116-17.
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v. Husky Injection Molding Sys. Boston, 419 Mass. 437, 646
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N.E.2d 111, 115-17 (1995).
To make out a prima facie case, Lehman had to show
by a preponderance of the evidence that (1) he was a member
of the protected class;3 (2) he was qualified for the
position in question; (3) he was denied the position; and (4)
his employer sought to fill the position by hiring a younger
individual with qualifications similar to those of the
plaintiff.4 See McDonnell Douglas, 411 U.S. at 802; Beal,
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646 N.E.2d at 136; Blare, 646 N.E.2d at 115. "[T]he burden
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of establishing a prima facie case of disparate treatment is
not onerous." Texas Dep't of Community Affairs v. Burdine,
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3. The protected class includes all individuals over forty
years of age. Mass. Gen. L. ch. 151B, 1(8).
4. "[T]he facts necessary to establish a prima facie case of
discrimination will vary depending on the circumstances of
each case." Beal v. Board of Selectmen of Hingham, 419 Mass.
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535, 646 N.E.2d 131, 136 (1995). See also McDonnell Douglas,
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411 U.S. at 802 n. 13; Wheelock College, 355 N.E.2d at 313
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n.5. Lehman argues that this is a termination case rather
than a promotion case, and, therefore, he should only be
required to show that he was performing his job in a
satisfactory manner and then was replaced by a younger person
with similar qualifications. However, the facts of this case
are more akin to a promotion case than to a termination case.
Lehman contends that Prudential should have hired him for the
newly created co-managing director position of the Northeast
region. The elimination of Lehman's position as director of
the New England region in the consolidation did not entitle
him to the newly created co-managing director position. As
the district court found, the two positions were not
identical. The Northeast territory, including New York, New
Jersey, and most of New England, was much larger than
Lehman's New England territory. Moreover, the duties of the
co-managing directors were more specialized than the duties
of the pre-consolidation directors had been.
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450 U.S. 248, 253 (1981). See also Villanueva v. Wellesley
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College, 930 F.2d 124, 127 (1st Cir.), cert. denied, 502 U.S.
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861 (1991). The district court found that Lehman failed to
present evidence showing that he was qualified for the
co-managing director position and that the individual who was
hired had qualifications similar to his. The court held,
therefore, that Lehman had not presented a prima facie case
against Prudential. Since we find plaintiff did not meet his
burden, in the context of summary judgment, of establishing
pretext, we need not tarry over the prima facie case issue.
See Vega v. Kodak Caribbean, Ltd., 3 F.3d 476, 479 (1st Cir.
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1993) (a court of appeals may affirm "on any independently
sufficient ground made manifest by the record").
Even assuming a prima facie case was made, the
burden shifted to Prudential to provide a legitimate business
reason for its hiring decision.5 As the district court
found, Prudential's stated business reason for not hiring
Lehman as co-managing director was legitimate and non-
discriminatory; it was also sufficiently supported in the
record to satisfy the requirements of Massachusetts law. See
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Woods v. Friction Materials, Inc., 30 F.3d 255, 263 (1st Cir.
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1994).
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5. This burden is one of production, not persuasion. The
burden of proving discrimination remains with the plaintiff
at all times. See Burdine, 450 U.S. at 253.
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Prudential's asserted reason for hiring Dietz was
that Dietz's qualifications were more in line with its needs
than those of Lehman. See id. at 261. Kleinman and Dunker
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believed that Dietz would best add the qualities required for
the Northeast co-managing director position alongside of
Kiley. In support of Prudential's asserted reason was a
considerable body of evidence indicating that Dietz could
reasonably be regarded as better suited to that position than
Lehman: (1) Dietz had greater experience in the supervision
of national marketing efforts; (2) Dietz had greater
experience in managing large insurance organizations; (3)
Dietz had greater recognition as a leader in the life
insurance industry; and (4) Dietz got along better with the
other co-managing director, Kiley. Prudential, therefore,
met its second stage burden.
In the third stage, the burden returned to Lehman
to produce evidence sufficient to support a jury verdict that
it was more likely than not that (1) Prudential did not offer
Lehman the position he desired because of his age; or (2)
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Prudential's reason for not offering Lehman that position was
a "pretext." See Blare, 646 N.E.2d at 118. "'[E]vidence
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which may be relevant to the plaintiff's showing of pretext
may include application of a certain criterion to employees
[not within the protected category]; the employer's general
practice and policies concerning employment of [those within
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the protected category]; and the employer's treatment of the
plaintiff during [his] employment.'" Id. (quoting Lewis v.
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Area II Homecare for Senior Citizens, Inc., 397 Mass. 761,
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493 N.E.2d 867, 872 (1986) (alterations in original)).
Attempting to show that Prudential's reason was
pretextual, Lehman pointed out that Dietz, the individual
offered the co-managing director position in the Northeast
region, was younger than he, and that the previous New
England agency had performed consistently well under Lehman's
leadership.6 However, the fact that Lehman had been
successfully directing the New England agency was
insufficient, by itself, to show that Prudential's reason for
hiring Dietz was pretextual. As already described, Dietz had
important qualifications of his own that could reasonably
lead to the belief that he was superior to Lehman for this
job. The position of co-managing director of the large,
reorganized Northeast region involved different
responsibilities and could reasonably be thought to require a
different blend of talents than those required for solo
management of the smaller New England office.
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6. To demonstrate that the New England agency was successful
under his leadership, Lehman reports that (1) since 1986 the
New England agency was consistently in the top 40% of all
agencies; (2) the agency had very good policy persistency and
very low expenses; (3) he had hired and trained six brokerage
managers in New England; and (4) he had solicited work from
brokerage general agencies.
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It is undisputed that several of the pre-
consolidation directors were promoted and several were not,
and their relative ages and performance records do not
suggest that those decisions were aged-based. The average
age of pre-consolidation directors appointed to be post-
consolidation directors was older than the average age of
those pre-consolidation directors, including Lehman, who were
not appointed.7 Lehman was treated the same as the other
six directors, all under 50, who were not promoted. We
refuse to second guess Prudential's hiring decision for a
management position of this nature absent clearer evidence of
irrationality. See Villanueva, 930 F.2d at 129; Odom v.
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Frank, 3 F.3d 839, 847 (5th Cir. 1993) ("[U]nless disparities
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in curricula vitae are so apparent as virtually to jump off
the page and slap us in the face, we judges should be
reluctant to substitute our views for those of the
individuals charged with the evaluation duty by virtue of
their own years of experience and expertise in the field in
question").
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7. The average age of the four pre-consolidation directors
appointed to post-consolidation director positions was 55
years, while the average age of the seven pre-consolidation
directors (including Lehman) not appointed to director
positions was 46 years.
Including the three newly hired directors in the
analysis does not change the result. The average age of the
seven post-consolidation directors was 49 years, while the
average age of the seven pre-consolidation directors not
promoted was 46 years.
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In addition to attempting to show Prudential's
reason pretextual, Lehman provided what he considers indirect
evidence of age discrimination. Lehman pointed to a
statement made during the May 1990 Directors' Meeting, while
Kleinman was explaining changes in the expense formula used
to calculate agency profitability. Kleinman stated that the
previous expense component representing benefits was 31% of
all compensation paid to employees and added that using 31%
"was a gift" because of "the age of some of the Directors."
Contrary to Lehman's allegations, this statement does not
show animus based on age, but rather merely states that the
formula that had been employed was favorable to older
directors and points out that the use of actual costs under
the modified method might result in higher assessments. This
statement -- which did not mention Lehman, and in no way
indicated that older directors were lacking in competence --
provides insufficient basis for an inference that Prudential
did not offer Lehman the position he wanted because of his
age.8 Isolated, ambiguous remarks are insufficient, by
themselves, to prove discriminatory intent. See Gagne v.
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Northwestern Nat'l Ins. Co., 881 F.2d 309, 314 (6th Cir.
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8. Unlike remarks made in Blare by a supervisor, Kleinman's
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comment could not reasonably be construed to reveal a belief
that Lehman lacked the ability to perform well because of his
age. See Blare, 646 N.E.2d at 118.
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1989); cf. Leichihman v. Pickwick Int'l, 814 F.2d 1263, 1271
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(8th Cir.), cert. denied, 484 U.S. 855 (1987).
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Lehman also pointed to a photostat entitled
"Organizational Man, New Manager." The photostat came from a
presentation to Prudential's Individual Insurance Business
Unit by a business consultant, Dr. Paul Lienberger. Dr.
Lienberger discussed the need to adapt products and marketing
to demographic changes in the marketplace. One of several
slides shown by Dr. Lienberger depicted the "Organizational
Man" of the "Ozzie and Harriet" generation as being
pessimistic, being cautious, being oriented to bureaucracies,
and having a 30-year career plan; in contrast, the "New
Manager" of the "Kuzak & Gracie of L.A. Law" generation was
depicted as risk taking, optimistic, well educated and
hardworking. Dunker, who had attended Dr. Lienberger's
presentation, decided to include a videotape of the
presentation and photostats of the slides as part of a
discussion in the November 1990 Directors' Meeting. Due to
time constraints, the videotape was not shown; nonetheless,
the directors, including Lehman, received a copy of the
photostats. Lehman argued that the comparisons made on the
"Organizational Man" photostat indicated an age-stereotyped
mentality. However, we think it too long a stretch to
interpret a photostat generated by a marketing consultant in
an entirely different context as indicating that Prudential
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was biased when placing its older brokerage employees. There
is no evidence in the record before us that the photostat and
its context had any relation to the decision of whom to hire
as co-managing brokerage directors. We conclude that
Lehman's evidence, taken at its best, was insufficient to
show that, in not appointing Lehman to the co-managing
director position, Prudential was motivated by age
discrimination or that its asserted reason for not appointing
him was pretextual.
Pension Discrimination Claim (ERISA)
Pension Discrimination Claim (ERISA)
Lehman's second claim against Prudential was for
unlawful pension discrimination in violation of section 510
of ERISA. 29 U.S.C. 1140.9 Lehman alleged that
Prudential hired a younger person for the co-managing
director position to avoid the high cost of funding his
pension. This circuit, along with most others, analyzes
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9. Section 510 of ERISA provides that it is unlawful for:
any person to discharge, fine, suspend,
expel, discipline, or discriminate
against a participant or beneficiary for
exercising any right to which he is
entitled under the provisions of an
employee benefit plan . . . for the
purpose of interfering with the
attainment of any right to which such
participant may become entitled under the
plan.
29 U.S.C. 1140.
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ERISA discrimination claims under the same three stage
burden-shifting paradigm described above. Barbour v.
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Dynamics Research Corp., 63 F.3d 32, 37-38 (1st Cir. 1995)
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(collecting cases). In the first stage, Lehman must set
forth a prima facie case by demonstrating that: (1) he had
the opportunity to attain rights under an ERISA benefit plan;
(2) he was qualified for the position at issue; and (3) he
was subjected to adverse action under circumstances that give
rise to an inference of discrimination. Id. at 38. We again
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assume arguendo, without deciding, that Lehman set forth a
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prima facie case.
To dispel the inference of discrimination arising
from a prima facie case, Prudential must only articulate, it
need not prove, a non-discriminatory reason for its hiring
decision. Dister v. Continental Group, Inc., 859 F.2d 1108,
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1115 (2nd Cir. 1988). Lehman conceded that Prudential
"articulated a legitimate, non-discriminatory reason for its
action . . . [namely] that it selected Dietz instead of
Lehman for the position of co-Managing Director because of
Dietz' supposedly superior qualifications for the position."
At the third stage, Lehman must show that
Prudential was motivated by "the specific intent of
interfering with the employee's ERISA benefits." Barbour, 63
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F.3d at 37. See also McGann v. H & H Music Co., 946 F.2d
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401, 404 (5th Cir. 1991); Dister, 859 F.2d at 1111; Gavalik
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v. Continental Can Co., 812 F.2d 834, 851 (3rd Cir.), cert.
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denied, 484 U.S. 979 (1987). ERISA provides no relief if the
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loss of an employee's benefits was incidental to, and not the
reason for, the adverse employment action. Were this not so,
every discharged employee who had been a member of a benefit
plan would have a potential cause of action against his or
her former employer under ERISA. Barbour, 63 F.3d at 37;
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see also Dister, 859 F.2d at 1111. To demonstrate that
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Prudential acted with the specific intention of interfering
with Lehman's ERISA benefits, Lehman must show "(1) that
[Prudential's] articulated reason for its employment actions
was a pretext; and (2) that the true reason was to interfere
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with [Lehman's] receipt of benefits." Barbour, 63 F.3d at 39
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(emphasis added). On this record, we find no genuine issue
of fact either that Prudential was motivated by a
discriminatory purpose or that Prudential's reason for not
hiring Lehman co-managing director was not credible.
Effective January 1, 1990, Prudential made
adjustments to its company-wide pension plan which Lehman
estimates increased Prudential's cost of funding his pension
by about $500,000 over time. Lehman contends that Prudential
was aware of the high cost of his benefits10 and refused to
offer him the co-managing director position in an effort to
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10. Lehman points out that Prudential discovered an "expense
gap" when it was first required to calculate age-related
costs for certain pension plans.
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reduce this cost (pension benefit obligations being lesser
for younger people). Lehman again points to Kleinman's
statement that benefits actually cost more than they had been
estimating because of "the age of some of the Directors."
Viewing the evidence in the light most favorable to
Lehman, we find nothing that would cause a reasonable fact-
finder to doubt Prudential's explanation for its hiring
decision. Prudential's mere awareness of the high cost of
pension obligations combined with the single isolated
ambiguous remark by Kleinman were insufficient, by
themselves, to establish Prudential's discriminatory intent.
Lehman did not contradict deposition testimony that
Prudential's benefit costs were calculated on a company-wide
basis, and that Pru Select's top management, who made the
hiring decision, received no individual employee calculation
of pension costs. Nor did Lehman contradict deposition
testimony that Prudential did not have knowledge of his
wife's age, knowledge that would be necessary to compute his
pension obligation. No material connection appears between
the cost of funding Lehman's pension and Prudential's
decision to hire Dietz rather than Lehman. We are satisfied
that the record would not support a finding that Prudential
did not hire Lehman as co-managing director because of the
cost of funding his pension.
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Affirmed. Costs to Appellee.
Affirmed. Costs to Appellee.
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