Lytle v. Malady

Michigan Supreme Court

Lytle v. Malady

566 N.W.2d 582, 456 Mich. 1

Michigan Supreme Court·Decided July 31, 1997·No. 102515, Calendar No. 16·Published·Cited by 26 cases

Opinions

Riley, J.

In the matter now before us, this Court is asked to clarify the evidentiary threshold a discharged employee must satisfy in order to create a genuine issue of material fact when an employer asserts that its decision to discharge an employee was precipitated by business conditions. We are also asked to decide whether a discharged employee may challenge an employer’s decision to reduce its work force charging discrimination, even when the reduction in work force (rif) decision has been deemed bona fide.

We hold that even when an employer’s rif decision is concluded to be bona fide, an employee may still establish a genuine issue of material fact that the employer’s justification for discharging him was not the true reason for its decision to discharge. We also hold that in order for a discharged employee to establish a genuine issue of material fact when an employer contends that its decision to discharge the employee was based on a work-force reduction, the employee may not merely rely on unsubstantiated allegations or denials in the pleadings. Rather, he [5] must come forward with admissible evidence, affidavits, or other evidentiary materials, demonstrating the existence of a factual dispute that the employer’s articulated reason was merely a pretext to discrimination.

In the instant case, we conclude that defendant’s policy statement could have reasonably created a legitimate expectation of just-cause employment. We also conclude that defendant did have just cause to reduce its work force as a matter of law, but not with respect to this plaintiff. Rather, we hold that plaintiff did sufficiently establish a genuine issue of material fact regarding whether age was a determining factor in defendant’s decision to discharge her. We also conclude that plaintiff presented evidence sufficient to establish a genuine issue of material fact regarding whether defendant considered her sex in its decision to discharge her.

We affirm the decision of the Court of Appeals finding that plaintiff could have reasonably had a legitimate expectation of just-cause employment. We also affirm its ruling that plaintiff raised a genuine issue of fact with respect to whether defendant discriminated against her on the basis of her age, as well as its decision concluding that plaintiff raised a genuine issue of material fact regarding her claim of sex discrimination.

FACTS AND PROCEEDINGS

On January 29, 1973, plaintiff Nancy Lytle was hired by defendant Howmet Turbine Components [6] Corporation¹ as a general clerk in its human resources department, which at that time served all divisions making up the Whitehall operation. Plaintiff received a manual containing a statement of defendant’s policies and procedures regarding employment. In the section containing defendant’s policy regarding the relationship it sought with each of its employees, defendant expressed that a probationary period existed that afforded it time to decide whether it was in its interest as well as the employee’s interest to continue the relationship following the probationary period. In that same section, the manual also stated that “[n]o employee will be terminated without proper cause or reason and not until management has made a careful review of all facts.” The last two paragraphs of the manual stated:

The contents of this booklet are not intended to establish, and should not be interpreted to constitute any contract between the Misco Whitehall Division, Product Support Operations, Reactive Metal Operations or the Technical Center of Howmet Turbine Components Corporation and any employee, or group of employees.

For over twenty years we have concentrated on the production of the finest investment castings, with the development of policies and principles which aim at the attainment of pride in every day’s work for every employee, plus the satisfaction of finding opportunities for individual growth and security. [Emphasis added.]

In 1981, defendant placed a disclaimer in its policy manual: “[T]he Company reserves the right to terminate employees without assigning cause; therefore, [7] the employee serves at the will of the employer.” Direct notification of the disclaimer was provided only to new employees, but plaintiff was involved in placing the disclaimer in new employee manuals.

At the time of plaintiffs hiring, John Ozar was the human resources director, serving as her immediate supervisor. Under Ozar’s supervision, plaintiff received exemplary performance evaluations and was rewarded with a succession of promotions. In 1979, plaintiff spoke with Ozar about resigning and seeking employment elsewhere. Ozar assured plaintiff that her employment with defendant was secure and that she could expect advancement. Soon after that conversation, plaintiff was promoted to employment manager of the entire human resources department. Additionally, about the same time, Ozar hired Walter Boczkaja. Boczkaja became plaintiffs subordinate trainee. For approximately two years, Boczkaja trained under plaintiff, receiving promotions to various positions within the personnel department, and continued to be one of plaintiffs subordinates until 1989.

During the 1984-85 fiscal year, Ozar retired and was replaced by William Roof. In March 1987, Roof determined a need to decentralize the human resources department. He planned for each of the Whitehall divisions to have its own human resources representative. Roof hired defendant Michael Malady to head the Whitehall Machined Products Division and to serve as plaintiffs supervisor. Plaintiff was reassigned to serve as human resources representative for defendant’s Ti-Ingot Division.²

[8] A personality conflict between Malady and plaintiff soon developed. In June 1987, Malady requested all female employees under his supervision to wear dresses to a company picnic. Plaintiff wore slacks. Shortly thereafter, in September 1987, Malady submitted an unfavorable evaluation of plaintiffs job performance.³

In January 1989, on Malady’s recommendation and with Roof’s approval, plaintiff’s job title was changed from human resources representative to human resources specialist. Plaintiff’s duties, as well as her salary, remained the same. Malady suggests that the change was necessary to reduce the number of direct reports he had to address, in addition to “centraliz[ing] the total employment function under one person instead of having it split with two different people doing part of it.” He also asserts that he had “some performance concerns . . . with [plaintiff’s] supervisory abilities],” as reflected in his latest performance evaluation.

Plaintiff held her new position from January 1989, until her discharge on November 1, 1991.

Plaintiff contends defendant’s policy manual created an expectation that her employment would not be terminated unless there was sufficient cause to do so. Also, she claims that she relied on verbal assurances by Ozar that her employment with defendant was secure.

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Riley, J.

In the matter now before us, this Court is asked to clarify the evidentiary threshold a discharged employee must satisfy in order to create a genuine issue of material fact when an employer asserts that its decision to discharge an employee was precipitated by business conditions. We are also asked to decide whether a discharged employee may challenge an employer’s decision to reduce its work force charging discrimination, even when the reduction in work force (rif) decision has been deemed bona fide.

We hold that even when an employer’s rif decision is concluded to be bona fide, an employee may still establish a genuine issue of material fact that the employer’s justification for discharging him was not the true reason for its decision to discharge. We also hold that in order for a discharged employee to establish a genuine issue of material fact when an employer contends that its decision to discharge the employee was based on a work-force reduction, the employee may not merely rely on unsubstantiated allegations or denials in the pleadings. Rather, he [5] must come forward with admissible evidence, affidavits, or other evidentiary materials, demonstrating the existence of a factual dispute that the employer’s articulated reason was merely a pretext to discrimination.

In the instant case, we conclude that defendant’s policy statement could have reasonably created a legitimate expectation of just-cause employment. We also conclude that defendant did have just cause to reduce its work force as a matter of law, but not with respect to this plaintiff. Rather, we hold that plaintiff did sufficiently establish a genuine issue of material fact regarding whether age was a determining factor in defendant’s decision to discharge her. We also conclude that plaintiff presented evidence sufficient to establish a genuine issue of material fact regarding whether defendant considered her sex in its decision to discharge her.

We affirm the decision of the Court of Appeals finding that plaintiff could have reasonably had a legitimate expectation of just-cause employment. We also affirm its ruling that plaintiff raised a genuine issue of fact with respect to whether defendant discriminated against her on the basis of her age, as well as its decision concluding that plaintiff raised a genuine issue of material fact regarding her claim of sex discrimination.

FACTS AND PROCEEDINGS

On January 29, 1973, plaintiff Nancy Lytle was hired by defendant Howmet Turbine Components [6] Corporation¹ as a general clerk in its human resources department, which at that time served all divisions making up the Whitehall operation. Plaintiff received a manual containing a statement of defendant’s policies and procedures regarding employment. In the section containing defendant’s policy regarding the relationship it sought with each of its employees, defendant expressed that a probationary period existed that afforded it time to decide whether it was in its interest as well as the employee’s interest to continue the relationship following the probationary period. In that same section, the manual also stated that “[n]o employee will be terminated without proper cause or reason and not until management has made a careful review of all facts.” The last two paragraphs of the manual stated:

The contents of this booklet are not intended to establish, and should not be interpreted to constitute any contract between the Misco Whitehall Division, Product Support Operations, Reactive Metal Operations or the Technical Center of Howmet Turbine Components Corporation and any employee, or group of employees.

For over twenty years we have concentrated on the production of the finest investment castings, with the development of policies and principles which aim at the attainment of pride in every day’s work for every employee, plus the satisfaction of finding opportunities for individual growth and security. [Emphasis added.]

In 1981, defendant placed a disclaimer in its policy manual: “[T]he Company reserves the right to terminate employees without assigning cause; therefore, [7] the employee serves at the will of the employer.” Direct notification of the disclaimer was provided only to new employees, but plaintiff was involved in placing the disclaimer in new employee manuals.

At the time of plaintiffs hiring, John Ozar was the human resources director, serving as her immediate supervisor. Under Ozar’s supervision, plaintiff received exemplary performance evaluations and was rewarded with a succession of promotions. In 1979, plaintiff spoke with Ozar about resigning and seeking employment elsewhere. Ozar assured plaintiff that her employment with defendant was secure and that she could expect advancement. Soon after that conversation, plaintiff was promoted to employment manager of the entire human resources department. Additionally, about the same time, Ozar hired Walter Boczkaja. Boczkaja became plaintiffs subordinate trainee. For approximately two years, Boczkaja trained under plaintiff, receiving promotions to various positions within the personnel department, and continued to be one of plaintiffs subordinates until 1989.

During the 1984-85 fiscal year, Ozar retired and was replaced by William Roof. In March 1987, Roof determined a need to decentralize the human resources department. He planned for each of the Whitehall divisions to have its own human resources representative. Roof hired defendant Michael Malady to head the Whitehall Machined Products Division and to serve as plaintiffs supervisor. Plaintiff was reassigned to serve as human resources representative for defendant’s Ti-Ingot Division.²

[8] A personality conflict between Malady and plaintiff soon developed. In June 1987, Malady requested all female employees under his supervision to wear dresses to a company picnic. Plaintiff wore slacks. Shortly thereafter, in September 1987, Malady submitted an unfavorable evaluation of plaintiffs job performance.³

In January 1989, on Malady’s recommendation and with Roof’s approval, plaintiff’s job title was changed from human resources representative to human resources specialist. Plaintiff’s duties, as well as her salary, remained the same. Malady suggests that the change was necessary to reduce the number of direct reports he had to address, in addition to “centraliz[ing] the total employment function under one person instead of having it split with two different people doing part of it.” He also asserts that he had “some performance concerns . . . with [plaintiff’s] supervisory abilities],” as reflected in his latest performance evaluation.

Plaintiff held her new position from January 1989, until her discharge on November 1, 1991.

Plaintiff contends defendant’s policy manual created an expectation that her employment would not be terminated unless there was sufficient cause to do so. Also, she claims that she relied on verbal assurances by Ozar that her employment with defendant was secure.

[9] Defendant argues that plaintiff was terminated pursuant to a company-wide reduction in work force. Defendant asserts that as a result of declines in military spending and a downturn in the commercial airline industry between 1988 and 1991, it was forced to institute a series of reductions in its work force. Defendant suggests that it initially sought to cut costs in the 1992 budget without terminating any employees. In an August 21, 1991, intracompany memorandum to all the personnel support departments,⁴ Dr. Thomas Wright, vice president in charge of the Whitehall operations, directed all department supervisors to cut their respective 1992 budgets by fifteen percent.⁵

At the same time reductions were being sought, defendant was embarking on a plan that would use work cells as the primary facility structure, where employees would be working in teams instead of in the traditional hierarchical order. Notwithstanding the fact that he had to eliminate fifteen percent of his projected 1992 budget, Roof was told by the Operhall management to somehow compile a list of employees from the human resources department to head an independent department. From that list someone was to be selected to oversee the development of the work-cell plan.

After reviewing the qualifications of those listed, Operhall management identified Malady and Boczkaja as the two most promising candidates. Malady was not available and Boczkaja, who was interviewed by Operhall management, later decided to stay on in his [10] current position. Then Roof went to the private sector and found Andrea Achterhoff.⁶ She was thirty-one years old and had previous experience as a production supervisor, personnel manager, and human resources manager. Plaintiff never was interviewed for the position.

By November 1, 1991, in an effort to comply with Wright’s mandate, Roof had eliminated approximately $300,000. Roof needed to cut $439,950 in costs in order to meet Wright’s directive of a fifteen-percent reduction in expenditures for the human resources department’s 1992 operating budget. Roof eliminated four positions in the human resources department, which included two plant medical staff, the employee assistance program assistant, and plaintiff’s position as human resources specialist. Roof contended that in terminating these four individuals, he focused on “functions” rather than “individuals or relative qualifications.” He suggested that the decision was based on who was absolutely critical and what they could get by without. Roof claimed that he terminated plaintiff because the primary function of her position involved hourly employees, where a substantial portion of the reduction in work force had already occurred, and the fact that little, if any, hiring was forecasted in the near future.

The same day plaintiff was discharged, defendant hired Jeff Billingsley to work in the training program for the work-cell project. As far as plaintiff understood, Billingsley “worked for the corporate office” and was merely assigned to take an office where [11] plaintiff previously worked so that he would have a place to work. Moreover, plaintiff admitted that she had no idea how Whitehall’s operation budget and personnel were allocated among all the Pechiney subsidiaries.

On November 22, 1991, Boczkaja completed a final performance evaluation on plaintiff, which Malady accepted, indicating that she would be rehired in the event a nonsupervisory, administrative position became available. When plaintiff was finally discharged, her duties were assigned to other persons within the human resources department.⁷

On January 7, 1992, plaintiff filed a complaint in the Muskegon Circuit Court against defendant How-met, alleging: (I) breach of a contract providing for termination for just cause only, (II) age discrimination, and (III) sex discrimination.

Following some discovery, defendants Howmet and Malady moved separately for summary disposition pursuant to MCR 2.116(C)(10), which the circuit court granted on all counts.

The Court of Appeals reversed,⁸ and this Court granted defendant’s application for leave to appeal.⁹

[12] A motion for summary disposition under MCR 2.116(C)(10) tests whether there is factual support for a claim or defense. Adkins v Thomas Solvent Co, 440 Mich 293, 302; 487 NW2d 715 (1992); General Motors Corp v Detroit, 372 Mich 234, 239-240; 126 NW2d 108 (1964). The affidavits, pleadings, depositions, admissions, and other material supporting and opposing the motion must be considered,¹⁰ so that it may be decided whether “ ‘it is impossible for the claim or defense to be supported at trial because of some deficiency which cannot be overcome.’ ” Stevens v McLouth Steel Products Corp, 433 Mich 365, 370; 446 NW2d 95 (1989), quoting Rizzo v Kretschmer, 389 Mich 363, 372; 207 NW2d 316 (1973). ¹¹ If the court concludes that it is impossible for the record to be developed any further, summary disposition is appropriate. Radtke v Everett, 442 Mich 368, 374; 501 NW2d 155 (1993).

I. JUST-CAUSE EMPLOYMENT

A

Employment contracts for an “indefinite” duration are presumed to be terminable at the will of either party, unless they contain distinguishing attributes or consideration in addition to the services to be rendered. Lynas v Maxwell Farms, 279 Mich 684, 687; [13] 273 NW 315 (1937). This presumption is founded on the fact that the parties technically possess complete freedom to contract before entering into the agreement. Toussaint v Blue Cross & Blue Shield of Michigan, 408 Mich 579, 600; 292 NW2d 880 (1980). It is not considered substantive in nature, but, rather, was judicially created to serve as a rule of construction in deducing the parties’ intentions when no other indications exist:

[T]he presumption provides assurance that oral contracts for an indefinite term, which fall outside the statute of frauds, will be recognized only where circumstances suggest both parties intended to be bound. [Rowe v Montgomery Ward & Co, Inc, 437 Mich 627, 636; 473 NW2d 268 (1991).]

The presumption of employment at will may be overcome by proof of “a contractual provision for a definite term of employment or a provision forbidding discharge absent just cause.” Rood v General Dynamics Corp, 444 Mich 107, 117; 507 NW2d 591 (1993), citing Rowe, supra at 636-637. A contract for just-cause employment may be established in three ways. First, it may be formed by an “explicit” promise. Rowe, supra at 668 (Boyle, J., concurring), citing Perritt, Employee Dismissal Law & Practice (2d ed), § 4.1, p 173. Second, it may be “manifested by the words or other conduct” of the parties assenting to the agreement. Rood, supra at 117, n 17. Third, it may be “implied by law” because the employer’s statement regarding its “policies and procedures instillfed] [a] ‘legitimate expectation!]’ of job security in [the] [14] employees.” Rood, supra at 117-118, citing Toussaint, supra at 615.¹²

Under the third, when a policy manual is at issue, the court decides whether those sections that address employee discharge “are reasonably capable of being interpreted as promises of just-cause employment,” that is, whether an ordinary individual, marked by reason and sensibility, viewing the objective manifestations of the parties’ intent, could conclude that discharge would be only for just cause. Rood, supra.

Footnotes

13

[15] A just-cause obligation will not automatically arise where the manual lists conduct that constitutes a just basis for termination. In Reid v Sears, Roebuck & Co, 790 F2d 453, 460 (CA 6, 1986), quoting in part Toussaint, supra at 617, the United States Court of Appeals for the Sixth Circuit remarked:

The fact that certain acts were identified as conduct that might lead to discharge did not indicate that these acts were the exclusive permissible grounds for discharge. Moreover, the Sears handbook had no language similar to that relied upon in Toussaint: “to treat employees leaving Blue Cross in a fair and consistent manner and to release employees for just cause only.”

Any verbal assurances or statements of policy and procedure regarding job security must be clear and unequivocal to overcome the presumption of employment at will. Rowe, supra at 640-641, quoting Bullock v Automobile Club of Michigan, 432 Mich 472, 517; 444 NW2d 114 (1989), and Farnsworth, Contracts, § 7.10, p 492. To reach this threshold, “the statements must clearly permit a construction which supports the asserted meaning.” Rowe, supra at 641.

In evaluating verbal expressions, the court considers “all the relevant circumstances surrounding the transaction, including all writings, oral statements, and other conduct by which the parties manifested their intent.” Id., citing Farnsworth, Contracts, § 7.10, p 492.

If the employer has manifested a just-cause policy, the employer may unilaterally change it to one of employment at will, regardless of whether such right was reserved by the employer from the outset:

[16] The very definition of “policy” negates a legitimate expectation of permanence ... a “policy” is commonly understood to be a flexible framework for operational guidance, not a perpetually binding contractual obligation. In the modem economic climate, the operating policies of a business enterprise must be adaptable and responsive to change. [In re Certified Question (Bankey v Storer Broadcasting Co), 432 Mich 438, 455-456; 443 NW2d 112 (1989).]

If the employer so chooses, then reasonable notice must be given to all those affected. “Reasonable notification is not necessarily actual notification”;¹⁴ rather, the method instituted must be calculated in its objective of providing notice to those affected and not invoke the appearance of bad faith in its assurance of actually giving notice. In re Certified Question, supra at 457 (“for the revocation of a discharge-for-cause policy to become legally effective, reasonable notice of the change must be uniformly given to affected employees”).

B

Plaintiff makes two arguments. First, plaintiff argues that certain representations were made by management regarding job security. She claims that when she was called by another company about employment, Archer and Joseph Sheehan, the persons who originally hired her and Ozar, plaintiffs initial supervisor, told her that “they did not want [her] to leave .... You do a good job. You’re very secure here. We’d like you to stay for long-term employment . . . .” She adds that individually, Ozar told her that “he would really like [her] to stay. [She] had a [17] very secure job at Howmet. [She] had a lot of potential,” she would be missed, and he and Archer and Sheehan “hoped” she would decide to stay.

We conclude that these claimed assurances plaintiff received from Archer, Sheehan, and Ozar were not sufficiently “ ‘clear and unequivocal to overcome the presumption of employment at will,’ ” Rood, supra at 119, quoting Rowe, supra at 645, but, rather, represented that they “hoped” the employment relationship would “have a significant duration.” Rowe, supra at 640, quoting Carpenter v American Excelsior Co, 650 F Supp 933, 936, n 6 (ED Mich, 1987) (“any orally grounded contractual obligation for permanent employment ‘must be based on more than an expression of an optimistic hope of a long relationship’ ”) (emphasis previously supplied).

Second, plaintiff contends that she was told that the disclaimer¹⁵ she helped affix in newly hired employees’ policy manuals in 1981, applied only to new employees and that she “reasonably relied upon the written . . . statements and representations made by defendant^” in its policy manual. When plaintiff was originally hired, the policy manual she received expressed that “[n]o employee will be terminated without proper cause or reason.”¹⁶

This language, standing alone, instilled in plaintiff a legitimate expectation of just-cause employment. [18] However, the penultimate paragraph of the manual stated:

The contents of this booklet are not intended to establish, and should not be interpreted to constitute any contract between the Misco Whitehall Division, Product Support Operations, Reactive Metal Operations or the Technical Center of Howmet Turbine Components Corporation and any employee, or group of employees.

We conclude that a question of fact exists regarding whether defendant’s pre-1981 manual permitted plaintiff to have a legitimate expectation of just-cause employment. See Rood, supra at 140-141.¹⁷ Defendant failed to clearly manifest an intent because of the contradictory language within the manual. The average employee may not have interpreted the penultimate paragraph to contradict the language of the just-cause provision. Furthermore, the penultimate paragraph specifically lists several divisions within defendant’s Whitehall operation. Plaintiff’s division, human resources, was not listed. See n 2. This alone could allow plaintiff to reasonably believe that the penultimate paragraph did not apply to her.¹⁸

[19] We conclude that the contradictory provisions are open to differing, but reasonable, interpretations. Thus, a question of fact exists regarding whether plaintiff had a legitimate expectation of just-cause employment.

Despite the contradictory provisions, defendant asserts that plaintiff had actual knowledge of the disclaimer she helped affix in newly hired employees’ manuals in 1981, extinguishing any expectations she may have had regarding just-cause employment. We agree she had knowledge of the disclaimer. She worked in defendant’s human resource department and helped place the disclaimer in handbooks to be given to new employees. Notwithstanding, it is undisputed that plaintiff did not receive a new handbook, nor was she told that the disclaimer applied to her. At the September 14, 1992, summary proceeding, the following exchange took place between the trial court and defense counsel:

The Court: Did [defendant] give any notice to [plaintiff]?

[Defense Counsel]: There was no direct notice to her in terms of a memorandum, but she was involved in the company putting the sticker in the book. . . .

The Court: Well, she didn’t put it in her book, did she?

[20] [Defense Counsel]: Well, that’s trae.

Accordingly, because defendant could have easily provided notice to all those it intended to be affected by the disclaimer, we conclude that the method of notification instituted was not reasonably calculated to uniformly assure awareness of the change for all defendant’s affected employees,¹⁹ as well as hold that plaintiff’s legitimate expectation of just-cause employment was left undisturbed.

H. REDUCTION IN WORK FORCE

A

A reduction in a work force for economic reasons constitutes termination for “just cause.” McCart v J Walter Thompson USA, Inc, 437 Mich 109, 114; 469 NW2d 284 (1991), citing Friske v Jasinski Builders, Inc, 156 Mich App 468, 472; 402 NW2d 42 (1986).²⁰ In Friske, supra at 472, the Court of Appeals held:

[Discharge for economic reasons, as determined by and within the complete discretion of the board of directors of defendant corporation, constitutes termination for sufficient cause. To hold otherwise would impose an unworkable economic burden upon employers to stay in business to the point of bankruptcy in order to satisfy employment contracts and related agreements terminable only for good or sufficient cause.[21]

[21] Layoffs that axe conducted must be bona fide, that is, business conditions must have necessitated the reduction in work force. McCart, supra at 115. In McCart, the defendant sought summary disposition, contending that the plaintiff was discharged as part of a work-force reduction. Despite all the plaintiffs allegations regarding why he was wrongfully discharged, he “conceded” that the “defendant was instituting layoffs for economic reasons . . . .” Id. This Court concluded that “[i]n the absence of any sufficient response from [the] plaintiff, [the] defendant’s proofs . . . were adequate to support summary disposition on the ground that [the] plaintiff’s termination was for bona fide economic reasons.” Id. at 116.

Therefore, where a defendant asserts work-force reduction in defense of its decision to discharge an employee, that employee, to establish a genuine issue of material fact that the employer’s decision was not bona fide, may not merely rely on unsubstantiated allegations or denials in the pleadings, but, rather, must come forward with admissible evidence, affidavits, or other evidentiary materials, demonstrating the existence of a factual dispute.

Having set forth the controlling principles, we now turn to plaintiff’s contention that defendant lacked just-cause to discharge her.

B

Plaintiff contests the genuineness of defendant’s economic motivation in discharging her. Plaintiff claims that her review of defendant’s corporate salary reports evidences that defendant had actually hired more people from 1988 to 1990. However, this docu[22] mentation is not part of the record.²² In spite of plaintiff’s failure to present this evidence, it would be of no consequence because the evidence related to the period from 1988 through December 1990. Plaintiff was discharged on November 1, 1991. Defendant’s decision to institute a work-force reduction was based on a forecasted economic decline in 1992. See n 5 and accompanying text.

In addition, plaintiff herself admits that defendant had been conducting an rif from January 1988, until the time of her discharge, “as a method of dealing with [the] economic downturn . . . .” Notwithstanding, plaintiff submits that a Pechiney report called “Direct Magazine” published in May 1991, claimed sales figures for defendant corporation in the amount of $973 million, sales backlogs in excess of $1 billion, anticipated sales for 1991 of over $1 billion, as well as projected overall continued upward growth. We conclude, however, that defendant evidenced that Pechiney is a huge French-owned conglomerate. See n 1. Defendant could have overall profitability, yet require reductions in operating and capital expenditures in its subsidiaries.²³ Thus, our attention is [23] directed at the economic disposition of defendant’s Whitehall operation.²⁴

Plaintiff also asserts that her testimony in a case brought against defendant involving another employee supports her contention. See n 24. But, her allegations are based solely on “information and belief” or inadmissible evidence, and, as such, even though we are required to view plaintiff’s case in its most favorable light, we are given nothing to view that would permit us to conclude that the record before us could be developed at trial to the extent that it would leave open an issue on which reason[24] able minds could differ. Durant v Stahlin, 375 Mich 628, 639; 135 NW2d 392 (1965); Rizzo, supra at 371.

Therefore, because we choose not to second-guess employers’ decisions regarding day-to-day management operations,²⁵ and because plaintiff failed to present evidence demonstrating the existence of bad faith on behalf of defendant in its aim to reduce costs, we hold that defendant’s decision to conduct a reduction in work force was proper as a matter of law.

c

We conclude that plaintiff’s relief, if any, rests in the Civil Rights Act. See MCL 37.2202; MSA 3.548(202).²⁶

In this instance, the Court of Appeals provided relief to plaintiff by concluding that defendant’s decision to reduce its work force was a mere pretext to discrimination. It stated:

[25] Bona fide economic reasons are just cause for discharge. McCart [supra at 114]. However, an employer may not use economic necessity as a pretext for unlawful discrimination. Id. at 115. When the parties dispute the genuineness of the economic necessity, the question of just cause is one for the trier of fact. Ewers v Stroh Brewery Co, 178 Mich App 371, 378-379; 443 NW2d 504 (1989). Here, plaintiff has presented documentary evidence that Howmet was not in an economic downturn during this period and that in reality its sales and net income were increasing and that it continued to hire personnel while it was discharging current employees. Giving the benefit of every reasonable doubt to plaintiff, we find that she has raised a genuine issue of material fact concerning whether Howmet’s proffered economic justification was a mere pretext for discrimination, and this issue is best left to the jury to resolve. McCart, supra at 115-116; Ewers, supra at 373-374. [209 Mich App 179, 198-199; 530 NW2d 135 (1995).]

In so holding, the Court of Appeals erred by confusing just-cause analysis with discrimination analysis under the Civil Rights Act. It held that plaintiffs discharge constituted a breach of contract. Id. at 199.²⁷ [26] However, defendant presented evidence of the economic necessity to conduct an rif, e.g., a decline in military and commercial aircraft, as well as a more competitive market. See n 5 and accompanying text, and n 23. Therefore, we are persuaded that the Court of Appeals should have addressed plaintiffs claim in light of the Civil Rights Act, so that it could determine whether defendant relied on prohibited criteria in making its decision to discharge plaintiff.

Accordingly, we now turn to plaintiffs contention that she presented evidence establishing that, notwithstanding defendant’s claim of economic necessity, its actual motive for discharging her was to discriminate against her on the basis of her age and sex.

m. DISCRIMINATION

A. CIVIL RIGHTS ACT

The Civil Rights Act is codified in MCL 37.2202; MSA 3.548(202). In particular, subsection 202(1) provides, in pertinent part:

(1) An employer shall not do any of the following:

[27] (a) Fail or refuse to hire or recruit, discharge, or otherwise discriminate against an individual with respect to employment, compensation, or a term, condition, or privilege of employment, because of religion, race, color, national origin, age, sex, height, weight, or marital status.

Ever since our decision in Matras v Amoco Oil Co, 424 Mich 675, 683; 385 NW2d 586 (1986), we have looked to McDonnell Douglas Corp v Green, 411 US 792; 93 S Ct 1817; 36 L Ed 2d 668 (1973), and its progeny for guidance when addressing the Civil Rights Act.

In McDonnell Douglas, the Supreme Court promulgated a presumption-based approach that encompassed special rules governing the order of proof when a plaintiff attempts to establish his claim by circumstantial evidence. The McDonnell Douglas approach has been applied to other matters involving employee discharge as well as other types of disparate treatment cases, notwithstanding that McDonnell Douglas arose under the context of title VII of the Civil Rights Act, 42 USC 2000 et seq. Hence, this Court’s analysis in Matras, supra, suggests that McDonnell Douglas applies to plaintiff’s claims of discrimination based on sex as well as age.

The approach was not meant to be inflexible, but, rather, was developed to serve as “a sensible, orderly way to evaluate the evidence in light of common experience as it bears on the critical question of discrimination.’’²⁸ See Adama v Doehler-Jarvis, 115 Mich App 82, 95; 320 NW2d 298 (1982), citing Loeb v Textron, Inc, 600 F2d 1003, 1016-1017 (CA 1, 1979) [28] (emphasis added). The underlying purpose in viewing “the evidence in light of common experience” was set forth by the Supreme Court in Furnco Construction Corp v Waters, 438 US 567, 577; 98 S Ct 2943; 57 L Ed 2d 957 (1978):

[W]e are willing to presume this largely because we know from our experience that more often than not people do not act in a totally arbitrary manner, without any underlying reasons, especially in a business setting. Thus, when all legitimate reasons for rejecting an applicant have been eliminated as possible reasons for the employer’s actions, it is more likely than not the employer, who we generally assume acts only with some reason, based his decision on an impermissible consideration such as race.

Under the McDonnell Douglas approach, the burden of persuasion always rests with the plaintiff to prove that the prohibited discriminatory treatment by the employer was a determining factor used in its decision to discharge. St Mary’s Honor Center v Hicks, 509 US 502, 507; 113 S Ct 2742; 125 L Ed 2d 407 (1993), citing Texas Dep’t of Community Affairs v Burdine, 450 US 248, 253; 101 S Ct 1089; 67 L Ed 2d 207 (1981).²⁹ Thus, the plaintiff must prove that the employer’s explanation was a pretext to discrimination. The plaintiff can rely on the same evidence to prove both pretext and discrimination as long as the evidence would enable a reasonable factfinder to infer that the employer’s decision had a discriminatory basis. Udo v Tomes, 54 F3d 9, 13 (CA 1, 1995).

The approach involves three stages. In the first stage, the plaintiff must establish a prima facie case [29] in order to create the rebuttable presumption of discrimination. The prima facie showing itself involves four parts.³⁰ The plaintiff must show that (1) he was a member of a protected class,³¹ (2) he suffered an adverse employment action, (3) he was qualified for the position, and (4) others, similarly situated and outside the protected class, were unaffected by the employer’s adverse conduct, suggesting that discrimination was a determining factor in defendant’s adverse conduct toward the plaintiff.

In the second stage, following the plaintiff establishing a prima facie case, the burden shifts to the defendant-employer to articulate a legitimate, nondiscriminatory reason for its decision. McDonnell Douglas, supra at 802. If the employer is unable to satisfy its burden of production, it is presumed that the basis of the employer’s decision was discriminatory. Burdine, supra at 253.

If the defendant rebuts the presumption, then, in the third stage, the burden of production shifts back to the plaintiff creating “ ‘a new level of specificity.’ ” United States Postal Service Bd of Governors v Aikens, 460 US 711, 715; 103 S Ct 1478; 75 L Ed 2d 403 (1983), quoting Burdine, supra at 255; see also McDonnell Douglas, supra at 802-805. At this point, the plaintiff must establish that the employer’s articu[30] lation was merely a pretext to discrimination. Id. at 804; Burdine, supra at 256.³²

B. ST MARYS HONOR CENTER v HICKS

Since the inception of the McDonnell Douglas approach, for the judiciary, “[f]inding a balance between protecting victims of subtle prejudice on the one hand, and overreaching into legitimate decision-making of business on the other,” has proven itself a difficult task.³³ This is because in McDonnell Douglas the “[Supreme] Court did not . . . attempt to give any meaningful guidance as to how the specification of the required prima facie proof would be determined” for the third stage. Malamud, The last minuet: Disparate treatment after Hicks, 93 Mich L R 2229, 2245 (1995).

The Supreme Court’s most recent attempt to provide guidance came in Hicks. In that case, the Court addressed whether a trier of fact may issue judgment as a matter of law in favor of a plaintiff when the plaintiff has proven that an employer’s proffered reason for its employment action is false. In ruling that this alone is not adequate, the Court rewrote the third stage of the McDonnell Douglas approach. According [31] to the Court, once the employer rebuts the presumption, McDonnell Douglas is no longer relevant — having fulfilled its role of forcing the defendant to come forward with some response, the presumption “simply drops out of the picture.” Hicks, supra at 511, quoting Burdine, supra at 255. After the defendant’s rebuttal, “the trier of fact proceeds to decide the ultimate question: whether plaintiff has proven ‘that the defendant [was] intentionally discriminated against . . .’ because of his race . . . .’’Id. Once the defendant satisfies its burden of production, the factfinder must then decide not whether that evidence is credible but “ ‘whether the rejection was discriminatory within the meaning of Title VIL’ ” Hicks, supra at 519. “It is not enough ... to disbelieve the employer; the factfinder must believe the plaintiff’s explanation of intentional discrimination.” Id. Thus, the Court held, regarding the plaintiff’s establishment of pretext, that “proving the employer’s reason false becomes part of (and often considerably assists) the greater enterprise of proving that the real reason was intentional discrimination.” Hicks, supra at 517 (emphasis added). The Court concluded that the factfinder’s disbelief of the employer’s proffered reasons, together with the elements of the prima facie case, might suffice to show intentional discrimination. Hicks, supra at 511.

Although the Hicks majority appeared to be unambiguous, “many readers have found it to be otherwise.” 1 Lindemann & Grossman, Employment Discrimination Law (3d ed), p 24. Consequently, it is not surprising that

[32] [s]ome employers have argued that, in order to defeat an employer’s motion for summary judgment, Hicks requires plaintiffs to offer . . . both that the employer’s articulated reason was false and that the employer’s true reason was discriminatory — i.e., a “pretext-plus” standard. Some plaintiffs, on the other hand, have argued that once a prima facie case of discrimination is put forward, summary judgment for the employer never is appropriate, even if no evidence is put forward to refute the employer’s articulated nondiscriminatory reason, because the factfinder’s disbelief alone should be enough to permit a finding of pretext. [Id., p 25 (citation omitted; emphasis in original).]

However, the majority in Hicks rejected both extremes. See Equal Employment Opportunity Comm v Yenkin-Majestic Paint Corp, 1997 US App LEXIS 4348. Instead, it favored an intermediate position. See Hicks, supra at 510-511. The majority held that “[e]ven though (as we say here) rejection of the defendant’s proffered reasons is enough at law to sustain a finding of discrimination, there must be a finding of discrimination.” Id. at 511, n 4. We, too, favor such a position and hold that when viewed in a light most favorable to the plaintiff, the evidence must create a material issue of fact on which reasonable minds could find that the employer’s stated reason is a pretext for discrimination for summary judgment to be precluded. Furthermore, we hold that “evidence sufficient to discredit a defendant’s proffered nondiscriminatory reasons for its actions, taken together with the plaintiff’s prima facie case, [may be] sufficient to support [but not compel] a finding of discrim[33] ination.” Combs v Plantation Patterns, 106 F3d 1519, 1535 (CA 11, 1997).³⁴

In other words, we expressly adopt the intermediate approach endorsed by the United States Supreme Court in Hicks. For a plaintiff to survive summary disposition, he must always present an issue of fact regarding whether the defendant impermissibly discriminated. In some contexts, this may be shown merely by disproving the employer’s articulated reason, if, and only if, disproving the employer’s reason also shows discrimination. See Hicks, supra at 511, 519. See also Combs, supra at 1535. In other contexts, merely disproving an employer’s articulated reason will not prove discrimination. The bottom line is that there must always be evidence upon which reasonable minds could conclude that discrimination was the true motive for the decision. At summary proceedings, the evidence must always be taken in the light most favorable to the nonmoving party.

C. MATRAS v AMOCO OIL CO

In Matras, the plaintiff was discharged as a result of the defendant’s lay-off plan. In that case, we observed that “[a] jury c[ould] find that the discharge was ‘because of age’ even if age was not the sole factor”:

[34] Evidence that a competent older employee was terminated and a younger employee was retained, is insufficient standing alone to establish a prima facie case when the employer reduces his work force because of economic necessity. The rationale behind the McDonnell Douglas formula is that its four-part test alone “eliminates the most likely legitimate causes for the employer’s adverse action.” This formulation is incomplete in the work-force-reduction situation.

To establish a prima facie case of age discrimination when an employer lays off employees for economic reasons, the . . . employee [must] present sufficient evidence on the ultimate question — whether age was a determining factor in the decision to discharge the older protected employee. Accordingly, in the instant case, the McDonnell Douglas prima facie case approach folds into the traditional directed verdict/judgment notwithstanding the verdict standard. [Id. at 684-685.]

We concluded that the McDonnell Douglas approach folds into the traditional summary disposition or directed verdict standard because in the context of an RIF we assume that the burdens of production required by the respective parties under the approach have already been met.³⁵ As a result, because the burdens of production have been satisfied by the respective parties, all its presumptions “drop out” and the plaintiff is left to prove that reasonable persons could draw differing conclusions regarding whether discrimination was the true moti[35] vation underlying the employer’s adverse action rather than an rif.

Even though our decision in Matras, as well as the Supreme Court decisions in McDonnell Douglas and Hicks came after full trials, the principle is the same in summary proceedings:

[O]nce the employer has advanced a legitimate, nondiscriminatory basis for its adverse employment decision, the plaintiff, before becoming entitled to bring the case before the trier of fact, must show evidence sufficient for the factfinder reasonably to conclude that the employer’s decision to discharge him or her was wrongfully based on age. “Direct or indirect evidence of discriminatory motive may do, but ‘the evidence as a whole . . . must be sufficient for a reasonable factfinder to infer that the employer’s decision was motivated by age animus. ’ ” Thus, the plaintiff cannot avert summary judgment if the record is devoid of adequate direct or circumstantial evidence of discriminatory animus on the part of the employer. \Woods v Friction Materials, Inc, 30 F3d 255, 260 (CA 1, 1994) (citations omitted, emphasis added).][36]

We recognize, however, in the context of an RIF, that merely showing someone similarly situated to the plaintiff who is outside the protected class will not be sufficient. In concluding so, we are guided by the decision of the Supreme Court in O’Connor v Consolidated Coin Caterers Corp, 517 US 308, 311-313; 116 S Ct 1307; 134 L Ed 2d 433 (1996). In O’Connor, the Court noted that a “substantially younger [person] than the plaintiff is a far more reliable indicator of age discrimination than is the fact that the plaintiff [36] was replaced by someone outside the protected class”:

As the very name “prima facie case” suggests, there must be at least a logical connection between each element of the prima facie case and the illegal discrimination for which it establishes a “legally mandatory, rebuttable presumption,” Burdine, supra at 254, n 7. The element of replacement by someone under 40 fails this requirement. The discrimination prohibited by the adea is discrimination “because of [an] individual’s age,” 29 USC 623(a)(1), though the prohibition is “limited to individuals who are at least 40 years of age,” § 631(a). This language does not ban discrimination against employees because they are aged 40 or older; it bans discrimination against employees because of their age, but limits the protected class to those who are 40 or older.

Because the [Civil Rights Act] prohibits discrimination on the basis of age and not class membership, the fact that a replacement is substantially younger than the plaintiff is afar more reliable indicator of age discrimination than is the fact that the plaintiff was replaced by someone outside the protected class. [Id. at 311-313 (emphasis added).]

For these reasons, to survive a motion for summary disposition, once “the employer articulates a legitimate, non-discriminatory reason [for laying off the plaintiff,] . . . [t]he plaintiff must then introduce sufficient evidence to support two additional findings: (1) that the employer’s articulated reason for [laying off the plaintiff] is a pretext, and (2) that the true reason is discriminatory.” Smith v Stratus Computer, Inc, 40 F3d 11, 16 (CA 1, 1994).

Under some circumstances, however, as we previously observed, a plaintiff may not need to introduce additional evidence, aside from the evidence he [37] presented to support these findings in the first stage under McDonnell Douglas, because (1) the plaintiff’s prima facie case may establish that the employer’s articulated reason for its adverse employment action is a pretext and (2) in establishing that the articulated reason was pretext, the plaintiff may have created a question of fact regarding whether the true reason is discriminatory. In other words, under such circumstances, simply disproving the employer’s articulated reason will suffice if, and only if, disproving the employer’s reason also proves discrimination.³⁷ In other instances, however, simply disproving an employer’s articulated reason will not establish discrimination, and, as such, the plaintiff would then have to introduce additional evidence, aside from that which had already been presented in the first two stages of the McDonnell Douglas approach, to support these two findings. We recognize that additional evidence may be necessary because a plaintiff will not always present “a triable question of pretext simply because the plaintiff disputes the employer’s stated reason(s); put differently, that there may be a triable question of falsity does not necessarily mean that there is a triable question of discrimination.” Employment Discrimination Law, supra, p 26 (emphasis added and in original), citing, e.g., inter alia, Udo, supra at 13 (“to avoid summary judgment, the plaintiff [must prove both] that the employer’s articulated reason ... is a pretext, and . . . that [38] the trae reason is discriminatory”). Therefore, we hold that in all actions involving claims of discrimination, there must always be evidence upon which reasonable minds could conclude that discrimination was the true motive for the employer’s adverse conduct against the plaintiff.

D. APPLICATION

We will assume that plaintiff established a prima facie case under McDonnell Douglas because her claim centers on defendant’s assertion that it was conducting an RIF. Accordingly, we must give the benefit of every reasonable doubt to plaintiff and determine whether she might sufficiently develop the record now before us to permit a jury to find that defendant’s proffered explanation as applied to her³⁸ was a pretext to discrimination.³⁹

As evidence of age discrimination, plaintiff notes that it was only when Ozar retired and was replaced by Malady that problems arose. Thus, for approximately the first thirteen years with defendant corporation it is undisputed that she excelled in her duties as employment manager. We are unpersuaded that [39] this permits an inference of discriminatory animus on the basis of age.

Aside from plaintiffs problems with Malady, it is undisputed that approximately six weeks before plaintiff’s discharge, defendant hired Achterhoff for the new position created at defendant’s Operhall Research Center. Achterhoff was a thirty-one-year-old woman who was paid ten thousand dollars more a year than plaintiff.⁴⁰ Conversely, plaintiff, who was forty-four years old at the time of her discharge, had nineteen years of experience in the human resources department.⁴¹ Further, over those nineteen years, it is undisputed that she had been awarded a succession of promotions. Yet, in September before her formal discharge, defendant, while conducting an RIF, decided to hire Achterhoff and discharge plaintiff.⁴² Furthermore, defendant’s hiring of Achterhoff must be considered in light of the fact that plaintiff and [40] Achterhoff both “had very similar employment histories . . . [with] comparative qualifications.”⁴³ Post, pp 71-72. Hence, if both had similar qualifications, the fact that Achterhoff received greater pay than that of plaintiff at a time defendant asserts it was conducting an RIF creates a question of fact regarding defendant’s motive.

Plaintiff also evidenced defendant’s inconsistency in its hiring Billingsley.⁴⁴ Roof testified that he discharged plaintiff to reduce the 1992 fiscal budget for the human resources department, yet it is undisputed that at least part of Billingsley’s salary was paid out of that budget.⁴⁵ We note that plaintiff’s proofs regarding Billingsley standing alone would present a rather weak case. Nevertheless, we consider it along with [41] the other evidence she presented with respect to her age-discrimination claim.⁴⁶

Plaintiff need not show that age was the determining factor in defendant’s decision to discharge her. Rather, she need only prove that it was “« determining factor.” (Emphasis added.) Therefore, we are persuaded that, despite defendant’s claim that it based its decision on economic necessity, plaintiff produced evidence that would permit reasonable persons to conclude that age more likely than not was a determining factor in the adverse employment action defendant took against plaintiff. She presented proof that defendant hired individuals, Achterhoff and Billingsley, who were younger and, thus, along with the inconsistencies in defendant’s proffered explanation, created a reliable indication that “but for” plaintiff’s age, she would not have been discharged. See O’Connor, supra.

Thus, this case is distinguishable from Matras, supra, in which there was a lack of “evidence that management favored younger workers . . . , tended to fire older workers ... , or suggested that older [42] workers were disfavored” and where the defendant employer’s RIF was felt by workers of all ages. Matras, supra at 713 (Riley, J., dissenting). Rather, here, defendant contends it discharged plaintiff out of economic necessity, but it then hired substantially younger persons at higher rates of pay with markedly less experience than that possessed by plaintiff, despite its claim that it was reducing its work force out of economic necessity. Plaintiff demonstrated the anomaly in defendant’s assertion that it was conducting an RIF.⁴⁷

Accordingly, this evidence suggests that defendant’s reason for discharging plaintiff was only a pretext for favoring the younger hirees over the older plaintiff.⁴⁸ We axe persuaded that plaintiff’s proofs make it more likely than not that “[defendant’s] proffered explanation [as applied to this plaintiff] is unworthy of [43] credence.” La Montagne v American Convenience Products, Inc, 750 F2d 1405, 1409 (CA 7, 1984).

As evidence of sex discrimination, plaintiff points to her dealings with Malady. The Court of Appeals agreed that this evidence was sufficient to raise “a genuine issue of material fact with respect to a prima facie case of gender discrimination, i.e., that she was treated more harshly than similarly situated male employees.” Id. at 193.⁴⁹

While we agree that these facts raise suspicion, we are persuaded that the Court of Appeals erred by exclusively focusing on the confrontations plaintiff had with Malady. We conclude that it failed to properly determine whether defendant considered plaintiffs sex in its decision to discharge her. This is not to say that plaintiffs confrontations with Malady are irrelevant. Instead, these confrontations must be considered in light of the ultimate question — whether plaintiff’s sex was a determining factor in defendant’s decision to discharge her.

[44] Hence, viewing the evidence in a light most favorable to plaintiff and drawing every reasonable inference in her best regard, we conclude that plaintiff created a genuine issue of material fact whether defendant considered her sex in its decision to discharge her. Plaintiffs confrontations with Malady were not isolated incidents. Before Roofs hiring of Malady in March 1987, plaintiff had a succession of promotions, culminating in her appointment to the position of “Employment Manager.” When Roof became plaintiffs direct supervisor in 1985, because of Ozar’s retirement, she continued to receive favorable employment evaluations, indicating that her performance was outstanding. Then, in March 1987, Roof hired Malady as his direct subordinate and plaintiffs supervisor. Plaintiff retained her job title as “Employment Manager,” even though Malady only served as a supervisor of the Whitehall Machined Products Division. See n 2. In June 1987, defendant corporation’s annual picnic was held. Before the picnic, Malady requested that all female employees in the human resources department wear dresses. Plaintiff, having attended the picnic in previous years, was aware of no company requirement that mandated that all female employees wear dresses. Accordingly, because she had never worn a dress in the past, and being unhappy with the inconvenience of being forced to wear a dress to an outdoor picnic, plaintiff wore slacks. Soon after the picnic, Malady inexplicably conducted a performance evaluation of plaintiff. He did so despite standard operating procedures for the human resources department, recognizing that performance evaluations were to be conducted in December of each calendar year as a precursor to [45] evaluations and decisions regarding merit pay raises, as well as promotions. Malady’s negative evaluation of plaintiff was the first she ever received while employed by defendant corporation, i.e., from the time plaintiff was hired in 1973 until this evaluation, fourteen years, she had never received a negative performance appraisal. Other confrontations between Malady and plaintiff soon ensued,⁵⁰ which finally culminated with Boczkaja replacing plaintiff as employment manager and plaintiff being given the new title of human resources specialist. This is in light of the fact that Boczkaja was trained by plaintiff and had been her subordinate for the previous ten years.

Standing alone, we believe that plaintiff’s confrontations with Malady do not create a question of fact regarding whether sex was a determining factor in defendant corporation’s decision to discharge her. However, these facts must not be viewed in a vacuum, but, rather, in light of the other facts now before us. The same day plaintiff was discharged, defendant hired Billingsley to work in the training program for the work-cell project. Billingsley had worked several different jobs, mostly involving manufacturing, yet was promoted to manager of training. Moreover, Roof stated that Billingsley’s new position was to be included in his budget, despite defendant’s [46] assertion that the human resources department had to reduce its budget by over $400,000 for the 1991 fiscal year. In light of defendant’s contention that it was conducting an rif, a reasonable trier of fact could conclude that its hiring of Billingsley, at a higher rate of pay, even though he had substantially less experience than that possessed by plaintiff, was merely a pretext to discrimination. It is uncontested that a portion of Billingsley’s salary was paid out of the human resources department’s budget.

Reinforcing the genuineness of plaintiff’s claim is the fact that plaintiff was not considered fairly for the position Achterhoff ultimately assumed. Inexplicably, plaintiff, who was fully qualified and possessed substantially more experience than Boczkaja, who had been her subordinate at one time, was not even considered for the new position the management of defendant’s Operhall Research Center sought to create.⁵¹ In his deposition, Roof admitted that he never considered plaintiff for the new position, even though it included duties she could have assumed considering her nineteen years of experience at Howmet, as well as her “comparative qualifications” to those of Achterhoff, who eventually was hired.⁵² Of course, we [47] are not ruling that the Civil Rights Act mandates that employers establish an interdepartmental transfer program during the course of an RIF. See Jameson v Arrow Co, 75 F3d 1528, 1532-1533 (CA 11, 1996).⁵³ Rather, we observe, in the face of the evidence presented by plaintiff, that it appears pretextual that defendant would only consider Boczkaja and defendant Malady as candidates for the new position and ultimately hire Achterhoff. Moreover, it appears pretextual that defendant would hire Billingsley over the more qualified plaintiff to assume responsibility regarding training and development for the “Whitehall training function.”

Thus, the record as a whole suggests, in light of common experience, that a genuine issue of material fact exists regarding whether defendant’s proffered explanation for discharging plaintiff was merely a pretext to age and sex discrimination.⁵⁴

[48] In this case, we conclude that defendant’s policy statement could have reasonably created a legitimate expectation of just-cause employment. However, defendant’s reduction in work force was bona fide as a matter of law. Notwithstanding, we conclude that a genuine issue of material fact exists regarding whether age was a determining factor in defendant’s decision to discharge plaintiff. Also, we conclude that a genuine issue of fact exists regarding whether defendant considered plaintiff’s sex in its decision to terminate her.

Thus, we reverse the Court of Appeals decision holding that the trial court erred in summarily dismissing plaintiff’s claim for breach of contract of just-cause employment. We affirm both the decision of the Court of Appeals concluding that plaintiff raised a genuine issue of material fact regarding whether defendant considered plaintiff’s age as a determining factor in its decision to terminate her and its decision that a genuine issue exists regarding whether defendant considered plaintiff’s sex in its decision to terminate her.

Mallett, C.J., concurred with Riley, J.

12

The contract may be enforceable, although neither party signed the policy statement, because of the benefit that accrues to an employer when it establishes desirable personnel policies. Toussaint, supra. Hence, under Toussaint, written personnel policies are not enforceable because they have been “offered and accepted” as a unilateral contract; rather, their enforceability arises from the benefit the employer derives by establishing such policies. In re Certified Question (Bankey v Storer Broadcasting Co), 432 Mich 438, 453; 443 NW2d 112 (1989). See also Toussaint, supra at 613. In Bankey, supra at 453, this Court explained that when an employer establishes personnel policies in which it gamers a benefit for the burden it has voluntarily accepted, the employer has then created a situation “instinct with an obligation.” See also Renny v Port Huron Hosp, 427 Mich 415, 429; 398 NW2d 327 (1986).

13

In Rood, supra at 140-141, we explained:

The common thread running through our decisions in Toussaint and Renny is the presence of clear and specific employer policy statements, regarding employee discharge. Otherwise stated, the handbooks in both Toussaint and Renny contained statements reasonably capable of being interpreted as promises to discharge only for just cause. Consistent with Toussaint and Renny, we therefore hold that, in all claims brought under the legitimate expectations theory of Toussaint, the trial court should examine employer policy statements, concerning employee discharge, if any, to determine, as a threshold matter, whether such policies are reasonably capable of being interpreted as promises of just-cause employment. If the employer policies are incapable of such interpretation, then the court should dismiss the plaintiff’s complaint on defendant's motion for summary disposition. MCR 2.116(C)(10). If, however, the employer’s policies relating to employee discharge are capable of two reasonable interpretations, the issue is for the jury. [Emphasis added.]

18

Justice Boyle asserts that “the employer's relevant manifestations amounted to two separate representations.” Post, p 58. We agree and conclude that defendant did not manifest a clear intent. Defendant left contradictory language in its policy manual. Hence, a question of fact exists regarding whether plaintiff had a legitimate expectation of just-cause employment. See Rood, supra at 138-141.

[19] Justice Boyle also contends, citing Heurtebise v Reliable Business Computers, Inc, 452 Mich 405; 550 NW2d 243 (1996), that “[a] conclusion that similar language does not protect a defendant from a just-cause claim would be logically inconsistent.” Post, p 59. Again, we observe that Justice Boyle fails to account for the contradictory language within defendant’s policy manual. Furthermore, this Court’s decision in Heurtebise does not apply because that case concerned the enforceability of an arbitration provision found in a manual containing a contractual disclaimer. Accordingly, Heurtebise does not control because plaintiff’s claim relies on the legitimate expectation test under Rood, supra at 137-140. Moreover, in Heurtebise, supra at 414, the defendant clearly manifested its intent not to “be bound to any provision contained in the handbook.”

21 If a plaintiff can prove “fraud, bad faith or subterfuge on the part of the board in its decision,” the layoffs will not be bona fide. See Friske, supra at 472.

23

It is undisputed that defendant was conducting reductions in its work force elsewhere. In his deposition, Wright stated that not only was defendant conducting an rip at its Whitehall facility division-wide, but it was also conducting “similar reductions . . . elsewhere in the Howmet organization.” More particularly, Wright said:

In Tennessee in the past year, the employment had dropped from the neighborhood of 650 employees down to around 400. LaPorte recently had a rather major layoff. The exact number of people, I’m not sure, but I understand it was fairly large. In the meantime, we have also closed a plant in Plymouth, Michigan, and moved that to Dover, New Jersey.

[23] We closed Whitehall Machining here and moved that operation to Winstead, Connecticut, and we also recently closed the Reno, Nevada, plant and moved that operation to Whitehall. I know that Dover’s employment has dropped from the neighborhood of 1600 people a few years back to about 1100 people now. I know that our employment is down in the neighborhood, I think, around 2450 or somewhere in that neighborhood here in Whitehall from a high, I believe, of around 4100 a few years back. [Emphasis added.]

24

On the basis of evidence presented in a similar case, Krantz v Howmet Corp (Circuit Court No. 90-26815-CK; Court of Appeals No. 159045), Justice Cavanagh asserts that plaintiff could establish that defendant’s rif was not bona fide. We disagree. In Krantz, the plaintiff deposed expert Dr. William King. He testified against defendant Howmet. Dr. King stated that “the corporation Howmet located in Greenwich, Connecticut, has been showing increased net worth, increased retained earnings, and increased sales over the past five years . . . so . . . pleading that they have financial difficulties seems unreasonable.” Nevertheless, on being asked whether “it [was] true that a business can be experiencing a decline in orders for its products and taking reasonably prudent business actions to reduce its work force so that the work force is in proportion to the work that it has,” Dr. King answered “Yes.”

Hence, Dr. King’s testimony supports the conclusion that a company can have overall profitability and, yet, in order to maintain profitability, it may also need to reduce its work force. Even if Dr. King were to testify in this case, we are persuaded that his testimony would be of no consequence to invalidating defendant’s company-wide rif. Moreover, he would have an insurmountable burden in demonstrating that defendant’s discharge of approximately fifty percent of its work force at its Whitehall operation was merely a pretext to discharging plaintiff.

25

This Court had long ago decided that courts should be reluctant to second-guess management in its day-to-day operations. See, e.g., Dodge v Ford Motor Co, 204 Mch 459, 507-508; 170 NW 668 (1919) (payment of dividends); Nahikian v Mattingly, 265 Mch 128; 251 NW 421 (1933) (fixing salaries of officers); Barrows v J N Fauver Co, 280 Mch 553, 558; 274 NW 325 (1937) (building plants and purchasing property); Reed v Burton, 344 Mch 126; 73 NW2d 333 (1955) (selling property); Pettengill v Monteith Land Co, 334 Mch 632; 55 NW2d 130 (1952) (entering into contracts); Wayne Co Prosecuting Attorney v Nat’l Memorial Gardens, Inc, 366 Mich 492, 496; 115 NW2d 312 (1962) (the business judgment rule “applies only to cases where there has been no fraud, misconduct, or abuse of discretion by the officers and directors”).

27

The Court of Appeals incorrectly cites McCart, supra, for the proposition that “an employer may not use economic necessity as a pretext for unlawful discrimination.” However, in McCart, supra at 115, we merely noted that “[t]he objective circumstances, as presented by defendant’s proofs, indicate[d] no more than a termination resulting from an economically motivated work-force reduction.” As such, we concluded that the plaintiff failed to present evidence sufficient to establish that the defendant’s rif was not bona fide. We stated that in order to establish an issue of fact, the plaintiff had to “ ‘establish that he has a case on the law and that there are some evidentiary proofs to support his allegations as to any material fact.’ ” Id., quoting Durant, supra at 638. We continued by observing:

This case thus stands in marked contrast to . . . Ewers . . ■, where “plaintiff relied on deposition and documentary evidence which he argued indicated that defendant was experiencing substantial economic growth and operating at a substantial profit before and after his discharge.” Id. at 375. [McCart, supra at 115-116.]

[26] More particularly, in Ewers, supra, the plaintiffs evidence was overwhelming in demonstrating that the defendant’s RIF was not bona fide. “[The] plaintiff showed a pattern of positive net earnings and increased dividends ... [as well as] ... an increase in the total salaried work force from 600 to approximately 2,100.” Id. at 376. He “established that full bonuses were to be paid to participants in the incentive compensation plan based on the company’s profitable performance . . . .” Id. He also presented evidence undercutting the defendant’s assertion that the defendant’s financial condition necessitated the discharge of plaintiff and others. Id. at 379. He showed that “[d]uring the same time period defendant bought Schaefer Brewery for $80,000,000 and Schlitz for $660,000,000.” Further, he proved that “[t]he reduction in force was carried out with little or no advanced planning and with no study of its need or effect on the corporation . . . .” Id. at 376.

In this case, the Legislature has provided plaintiff recourse under the Civil Rights Act. MCL 37.2202; MSA 3.548(202).

43

The dissent, quoting the United States District Court for the Southern District of Alabama in Martin v Teledyne Brown Engineering, 924 F Supp 1131, 1138, n 4 (SD Ala, 1996), concludes that “[t]he fact that Ms. Achterhoff’s salary was not paid from the human resources department’s budget is consistent with the employer’s stated business reason . . . .” Brickley, J., post, p 72, n 8. We disagree. Defendant stated that it eliminated plaintiffs position. Thus, Achterhoffs salary necessarily was going to be paid from a different budget. Given that “everything depends on the individual facts,” Woods v Friction Materials, supra at 260, n 3, the record now before us persuades us to believe a genuine question of fact exists regarding whether defendant decided to discharge plaintiff on the basis of considerations that are prohibited by law.

46

Justice Boyle observes that “the statistical evidence established that between 1987 and 1992, the number of employees in Whitehall declined almost fifty percent, from 4,100 to 2,450, and the rif resulted in termination of ninety-one employees in 1991, fifty-four of whom were under the age of forty and sixty-eight of whom were men.” Post, p 65. We agree that defendant’s rif was bona fide with respect to it having just-cause to discharge plaintiff under her contract. However, “[e]ven though an employer may have grounds to discharge an employee, it may not proceed to unlawfully act against a particular employee.” See Featherly, n 10 supra. Accordingly, merely because defendant’s rif was found to be bona fide, the Court must still determine whether plaintiff established that she was treated differently than “persons situated similarly” to her. Smith, supra at 16.

In this case, the record evidences that plaintiff was not situated similarly to all ninety-one employees.

47

Justice Boyle asserts that “[c]ertainly, if Justice Riley believed that the evidence produced by the plaintiff in Matras [supra], was insufficient to show ‘age was a determining factor in [the plaintiffs] discharge,’ id. at 715 (Riley, J., dissenting), the considerably weaker evidence in this case could not support a finding of discriminatory animus.” Post, pp 65-66. We disagree. First, each case is factually different from the other and must be decided on the basis of its own particular circumstances. See Matras, supra at 707 (Riley, J., dissenting), quoting McDonnell Douglas, supra at 802. Second, the evidence produced by the plaintiff in Matras, supra, was weaker, not stronger, than the evidence produced by plaintiff Lytle. For example, in Matras, supra at 713 (Riley, J., dissenting), “[w]hat the record [did] show [was] that two younger people whose performance was rated the same as plaintiff’s were also discharged.” Accordingly, as compared to plaintiff Lytle, plaintiff Matras presented considerably weaker proof establishing that he was treated differently than others situated similarly to him.

49

The dissent questions why we ignore Achterhoff’s hiring in our analysis. The dissent itself ignores the fact that sex discrimination centers on whether one sex has been treated differently than a similarly situated individual from the opposite sex. Hence, because Achterhoff is female, we briefly reference that she was the individual eventually hired for the new human resources position at defendant Operhall Research Center. Because Malady and Boezkaja are male, they are more significant to our discussion. Roof testified that Malady and Boezkaja were the only ones considered from a list he compiled of potential candidates for the position. Moreover, in compiling the list, Roof admitted that plaintiff was not even considered. Thus, when Malady and Boezkaja were selected as possible candidates by Operhall management, plaintiff’s name was nowhere to be found. Notwithstanding, the dissent contends that because “several of [plaintiff’s] former duties were assigned to female employees,” that this “is inconsistent with sex discrimination.” Post, p 75. On the basis of the dissent’s reasoning, plaintiff could only establish her claim if defendant corporation had discharged all its female employees. Such reasoning is misplaced.

54

Justice Boyle herself concludes that “[s]tripped to its essentials, plaintiff’s proofs, when viewed in a light most favorable to her, consist of evidence that she was replaced during a reduction in force by employees who were younger and possibly less qualified than she was.” Post, p 67.

Justice Boyle fails to appreciate her own conclusion. She agrees that plaintiff sustained her burden, yet concludes that summary disposition [48] was proper. Furthermore, her contention that the lead opinion “eschews any analysis of plaintiffs proofs regarding pretext in the context of the civil rights claim,” is lacking. Id., p 63. We find that her focus on “plaintiffs remaining proofs,” is incorrect. Id. Instead, the issue before us involves whether a reasonable trier of fact may find for plaintiff upon examining all plaintiff’s proofs, not merely “plaintiff’s remaining proofs.”

Lytle v. Malady, 566 N.W.2d 582, 456 Mich. 1 (Mich. 1997).

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