Town v. Michigan Bell Telephone Co.

568 N.W.2d 64, 455 Mich. 688

• Court: Michigan Supreme Court
• Decided: July 31, 1997
• Docket: Docket Nos. 102845, 103476, Calender Nos. 10-11
• Status: Published

Opinions

Brickley, J.

The issue presented in these consolidated cases is whether the plaintiffs, McConnell and Town, have presented sufficient evidence of age or sex discrimination to surmount a motion for summary disposition and a motion for a directed verdict, respectively. We conclude in both cases that the plaintiffs failed to present sufficient evidence that discrimination had been a determining factor in their employers’ decisions.

i

McCONNELL v. ROLLINS BURDICK HUNTER

In July of 1988, Ted McConnell accepted a job as a sales representative with Rollins Burdick Hunter (rbh). Rbh sold health insurance and provided insurance-related consulting services. At the time that he was hired, McConnell was fifty-five years old.

In January of 1989, the plaintiff was informed that he needed to improve his sales production. The plaintiff’s next review was in September of 1989. Because the plaintiff’s sales revenue had not significantly improved by that time, he was informed that if his revenue did not increase that “there will have to be some adjustment made.” The plaintiff was unable to improve his production.

Rbh discharged McConnell in January of 1990. At that time, the plaintiff was fifty-seven years old. The plaintiff brought suit against defendants RBH and Miller, Mason, and Dickenson, Inc.,¹ alleging breach of employment contract, promissory estoppel, and age discrimination. The trial court granted summary disposition for the defendants on each of the plaintiff’s claims.

On appeal, the Court of Appeals initially affirmed the decision of the trial court. The plaintiff then moved for a rehearing on the age discrimination claim which was granted. On rehearing, the Court affirmed, but remanded the case for trial of the plaintiff’s age discrimination claim in an unpublished opinion per curiam. The defendants appealed that decision in this Court. We granted leave and consolidated this case with Town v Michigan Bell.

TOWN v MICHIGAN BELL TELEPHONE COMPANY

In 1980, Veronica Town sought a departmental transfer from her position of product-line manager with the Michigan Bell Telephone Company. She was interviewed by the assessment center and was offered á position. She turned it down, however, when she learned of the assessment center’s schedule, which consisted of a four-day work week, with twelve-hour shifts. This schedule was unacceptable to her because she needed to be home in the evenings to care for her husband, who was suffering from severe health problems.

Instead, the plaintiff accepted a position as manager of market administrators. After one year, the plaintiff’s supervisor notified her that she was being transferred to the assessment center because her position was being consolidated with that of another manager. The person who held the other position was leaving the company. A thirty-five-year-old male, James Aveck, assumed the consolidated position.

Still under the impression that the assessment center’s schedule was incompatible with her husband’s needs, the plaintiff resigned and accepted early retirement. The plaintiff was forty-nine years old at the time she resigned.

The plaintiff filed suit against Michigan Bell in 1983, alleging constructive discharge and age and sex discrimination. After removal to federal court, reinstatement in state circuit court, summary disposition motions, and mediation, the case was tried by a jury in April, 1991. At the close of the plaintiff’s proofs, the defendant moved for a directed verdict, which was taken under advisement by the trial court. After the jury returned a verdict for the plaintiff, defendant renewed its motion for directed verdict, which the trial court granted.

The Court of Appeals affirmed the trial court’s directed verdict. Although it concluded that the plaintiff had been constructively discharged, it agreed with the trial court that the plaintiff had not proven that age was a determining factor in the defendant’s decision. One judge dissented, arguing that the plaintiff had presented adequate evidence of discrimination by discrediting the defendant’s explanation of its decision. Citing St Mary’s Honor Center v Hicks,2 the dissenting judge argued that, once the employer’s explanation was discredited, the jury could, but was not required to, find that the real explanation for the employer’s decision was discriminatory.

We granted leave to appeal and consolidated this case with McConnell v Rollins Burdick Hunter.

n

A claim of age discrimination may be shown under ordinary principles of proof by the use of direct or indirect evidence.³ Alternatively, many courts, including this one,⁴ have used the prima facie test articulated by the United States Supreme Court in McDonnell Douglas Corp v Green⁵ as a framework for evaluating age-discrimination claims. Originally applied to cases of race discrimination, the test has been modified to accommodate cases of age and sex discrimination.⁶

The modified McDonnell Douglas prima facie approach requires an employee to show that the employee was (1) a member of a protected class, (2) subject to an adverse employment action, (3) qualified for the position, and that (4) others, similarly situated and outside the protected class, were unaffected by the employer’s adverse conduct.

The purpose of the prima facie test is to 1) remove the most common nondiscriminatory reasons for the employer’s action,⁷ such as poor employee performance, and 2) to force the employer to articulate a nondiscriminatory reason for the discharge.⁸ Once the employer produces evidence of a nondiscriminatory reason for the discharge, even if that reason later turns out to be incredible, the presumption of discrimination evaporates.⁹

After the employer has met its burden of production, the employee must proceed without the benefit of the earlier presumptions. However, elimination of the presumption does “not imply that the trier of fact no longer may consider evidence previously introduced by the plaintiff to establish a prima facie case.”¹⁰ As the United States Supreme Court explained:

A satisfactory explanation by the defendant destroys the legally mandatory inference of discrimination arising from the plaintiff’s initial evidence. Nonetheless, this evidence and inferences properly drawn therefrom may be considered by the trier of fact on the issue of whether the defendant’s explanation is pretextaal. Indeed, there may be some cases where the plaintiff’s initial evidence, combined with the effective cross-examination of the defendant, will suffice to discredit the defendant’s explanation. [¹¹]

Therefore, “the evidence and inferences that properly can be drawn from the evidence presented during the plaintiff’s prima facie case may be considered in determining whether the defendant’s explanation is pretextual.”¹²

Once the presumption drops out of the case, the plaintiff retains the ultimate burden of proving discrimination. Plaintiff has the opportunity to come forward with evidence, including the previously produced evidence establishing the prima facie case, sufficient to permit a reasonable factfinder to conclude that the discrimination was defendant’s true motive in making the adverse employment decision.¹³

To prevail, the employee must submit admissible evidence to prove that the employer’s nondiscriminatory reason was not the true reason for the discharge and that the plaintiff’s age was a motivating factor in the employer’s decision.¹⁴ Thus, the employee must prove that the employer’s explanation was a pretext for discrimination. The proofs offered in support of the prima facie case may be sufficient to create a triable issue of fact that the employer’s stated reason is a pretext, as long as the evidence would enable a reasonable factfinder to infer that the employer’s decision had a discriminatory basis.¹⁵ “The strength of the prima facie case and the significance of the disbelieved pretext will vary from case to case depending on the circumstances. In short, everything depends on the individual facts.”¹⁶

Ultimately, the plaintiff will have the burden of producing evidence, whether direct or circumstantial, that proves that discrimination was a determining factor in the employer’s decision. Although the majority decision in Hicks appeared to be unambiguous, “many readers have found it to be otherwise.”¹⁷

The effect of Hicks on employer-brought summary judgment motions has been a matter of particular debate. Some employers have argued that, in order to defeat an employer’s motion for summary judgment, Hicks requires plaintiffs to offer substantial evidence 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.[¹⁸]

We decline to adopt either extreme, and, instead, favor an intermediate position, which is the predominant view among the federal circuits. We would hold that when viewed in the light most favorable to the plaintiff, the evidence must create a material issue of fact on which reasonable minds could conclude that the employer’s stated reason is a pretext for discrimination for summary judgment to be precluded. Thus, plaintiff will not always present a triable issue of fact merely by rebutting 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.”¹⁹ Furthermore, we note that in accordance with nine other federal circuits, “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 require) a finding of discrimination.’’²⁰ “Where . . . either direct or circumstantial evidence from which a fact-finder could rationally conclude that the employer’s stated reason is a pretext for discrimination, summary judgment normally should be denied.”²¹

m

In light of these principles, we turn to McConnell’s case. Defendants RBH and MMD argue that the plaintiff was not qualified to perform his job, and is therefore unable to satisfy the qualification element of the prima facie case. An employee is qualified if he was performing his job at a level that met the employer’s legitimate expectations.²² By all accounts, the plaintiff’s performance was less than stellar. Indeed, the plaintiff failed to generate enough revenue to pay his own salary. In his first full year, 1989, the plaintiff generated $70,505.11 in revenue while drawing a salary of $84,351.25 during the same period. He was terminated at the end of that year.

Rather than evaluate plaintiff’s case at the prima facie stage, however, in this case we elect to presume that plaintiff has established a prima facie case. The purpose of the prima facie case is to force the defendant to provide a nondiscriminatory explanation for the adverse employment action. That purpose having been served, we move to the plaintiff’s evidence that the defendant’s proffered nondiscriminatory reason is a pretext for discrimination.

We conclude that plaintiff’s evidence of pretext would have been insufficient to overcome the defendant’s motion for summary judgment. First, the plaintiff argues that his alleged replacement, Lucinda Lawrence, was held to a different standard of performance than he was. To create an inference of disparate treatment, McConnell must prove that he and Lawrence were similarly situated, i.e., “all of the relevant aspects” of his employment situation were “nearly identical” to those of Lawrence’s employment situation.²³ One relevant aspect of the two employees, their salaries, was far from identical. McConnell was paid a base salary of $67,481, while Lawrence’s base salary was $24,000. Additionally, McConnell received benefits that Lawrence did not, such as a private club membership and a leased car. Further, McConnell had over twenty-five years of experience, while Lawrence had much less comparable experience. The most significant distinction between the two employees, however, is that McConnell failed to generate enough sales to cover his own salary, while Lawrence generated sales equivalent to nearly 2.3 times her salary in her first year. Thus, Lawrence was not similarly situated to McConnell because her performance was proportionately higher. A more apt comparison would have been for McConnell to compare himself to another employee who failed to generate enough sales to cover his salary, but who was retained. Accordingly, we conclude that the two employees were not “nearly identical” on a “relevant aspect” of their respective jobs, namely, performance.

Second, we also acknowledge the fact that the plaintiff was employed with the defendant for a relatively brief time.

[I]n cases where the hirer and the firer are the same individual and the termination of employment occurs within a relatively short time span following the hiring, a strong inference exists that discrimination was not a determining factor for the adverse action taken by the employer.[²⁴]

The plaintiff has argued that the “same actor” inference should not apply because he was transferred, not hired, as the result of a merger between MMD and rbh. The characterization of plaintiff’s job change is not determining, however, because the same person who discharged the plaintiff, Sandy McMillan, had sole authority to bring plaintiff into his organization. Thus, the “same actor” inference applies because McMillan both approved plaintiff’s “transfer” from MMD and discharged plaintiff within a period of eighteen months. Because the possibility that the manager at rbh would “develop [] an aversion to older people” within an eighteen-month period is remote, at best, we conclude that the plaintiff’s brief tenure with rbh creates an inference that rbh’s decision did not have a discriminatory basis.²⁵ Taking the above inference in combination with the paucity of McConnell’s other evidence, we conclude that he did not submit evidence of pretext sufficient to enable a reasonable factfinder to infer that the employer’s decision had a discriminatory basis.

Accordingly, we would reverse the decision of the Court of Appeals and reinstate the trial court’s grant of summary disposition in this case.

IV

The plaintiff in Town v Michigan Bell alleges both age and sex discrimination in violation of the Michigan Civil Rights Act.²⁶

The defendant, Michigan Bell, contends that the plaintiff was transferred because of an overall reduction in its workforce. The plaintiff’s supervisor, Tom Rodgers, testified that he was advised that he had to reduce the number of managers in the department. This fact was not disputed by the plaintiff. Further, Rodgers offered a plausible explanation for transferring the plaintiff. According to the defendant, Aveck’s marketing skills were superior to those of the plaintiff. Additionally, the defendant claimed that the plaintiff had taken too long to develop her staff and had not spent adequate time visiting customers at their places of business. Because the defendant’s burden of production is met by the introduction of evidence that would “support a finding that unlawful discrimination was not the cause of the employment action,” we conclude that the defendant presented sufficient evidence to sustain its burden of production and dissolve the plaintiff’s prima facie case.²⁷

In Matras, we held that if an employee is discharged because of a reduction in the employer’s workforce, the employee must also present “sufficient evidence on the ultimate question,” namely, whether the employee’s age or sex was a determining factor in the employer’s decision to discharge that employee.²⁸

A layoff in the context of an overall workforce reduction provides a nondiscriminatory explanation for the plaintiff’s discharge. This puts the plaintiff’s case in the same posture as it would be after the employer articulates any legitimate nondiscriminatory explanation in response to the plaintiff’s prima facie case. Once the employer offers such an explanation, the presumption of the prima facie case — that the employee’s discharge was discriminatory — evaporates and is no longer relevant.²⁹ The plaintiff can no longer rely on the inference of discrimination in the prima facie case, and the evidence must be evaluated in light of the rational inferences it will support.

The question is whether the plaintiff presented sufficient evidence, taken in a favorable light, to find that age discrimination was a determining factor in the decision to discharge the plaintiff.³⁰ In reviewing a trial court’s grant of a directed verdict, we examine the testimony and all legitimate inferences that may be drawn from it in the light most favorable to the plaintiff.³¹

The plaintiff’s trial strategy was to show that her qualifications were superior to those of Aveck’s. The plaintiff’s former job was as a marketing manager. Although the plaintiff had some marketing experience, her primary experience had been as a manager. Aveck’s experience, on the other hand, had been primarily in marketing and was more extensive than the plaintiff’s. Predictably, much of the trial testimony concerned whether management or marketing skills were more important to the position.

We agree with the Court of Appeals conclusion that Aveck was qualified for the position. In her testimony, the plaintiff conceded that Aveck was “probably qualified” for the position, and Aveck testified that he had trained, in his capacity as an instructor, all the personnel that he would be supervising. Further, marketing experience was relevant to the position. Thus, the plaintiffs argument that she was more qualified than Aveck focused on the soundness of Michigan Bell’s selection of one competent employee over another, as opposed to the veracity of its explanation.

[T]he plaintiff cannot simply show that the employer’s decision was wrong or mistaken, since the factual dispute at issue is whether discriminatory animus motivated the employer, not whether the employer is wise, shrewd, prudent, or competent.[³²]

The comparison was not between an unqualified employee and a qualified employee, but instead between two qualified employees. The plaintiff’s proofs, at most, merely raise questions about Michigan Bell’s business judgment. Accordingly, the plaintiff did not create an issue of fact regarding whether the defendant’s nondiscriminatory explanation for the plaintiff’s transfer was a pretext, much less a pretext for discrimination.³³ Further, the plaintiff never overcame Michigan Bell’s allegation that she had taken too long to develop her staff and had not spent adequate time visiting customers at their places of business. Under these circumstances, this Court will not second-guess an employer’s decision.

The dissenting Court of Appeals judge argued that the trial court improperly entered a directed verdict for the defendants. The dissenter argued that “the jury’s apparent disbelief of Rodgers’ testimony, together with the other evidence in the case, was sufficient to permit the jury to infer the requisite intentional discrimination.”³⁴ Other than the presumptions of the plaintiffs prima facie case, we find no evidence in the record to support an inference of discriminatory animus. Relying on Hicks, supra, the dissenter argued that a jury may draw an inference of discrimination solely from its disbelief of the employer’s reason for the discharge. We agree, however, that this merely acknowledges that evidence of falsity may create an inference of discrimination. The Hicks Court was unequivocal about not replacing the plaintiff’s burden of proving discrimination with the lesser burden of proving falsity, as the following passages demonstrate.

But nothing in law would permit us to substitute for the required finding that the employer’s action was the product of unlawful discrimination, the much different (and much lesser) finding that the employer’s explanation of its action was not believable.[³⁵]

[The plaintiff must show] both that the reason was false, and that discrimination was the real reason. [Emphasis in original.][³⁶]

It is not enough ... to disbelieve the employer; the factfinder must believe the plaintiff’s explanation of intentional discrimination.[³⁷]

Even 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. [Emphasis in original.][³⁸]

“[N]one of this means that trial courts or reviewing courts should treat discrimination differently from other ultimate questions of fact.”[³⁹]

Taken as a whole, Hicks indicates that, under some circumstances, a plaintiff may create an inference of discrimination through the introduction of evidence showing that the employer’s proffered reason is false. Yet, a plaintiff will not always present a triable issue of fact merely by rebutting the employer’s stated reasons. “[T]hat there may be a triable question of falsity does not necessarily mean that there is a triable question of discrimination.”⁴⁰ This point is demonstrated by the final disposition of the Hicks case. On remand, the district court concluded that the defendant’s proffered reason for discharging Hicks — alleged rule violations — was a pretext.⁴¹ The court was not persuaded that the defendant’s actions were based on a discriminatoiy animus, however, and it entered a judgment for the defendant, which was affirmed by the United States Court of Appeals for the Eighth Circuit.⁴²

We conclude that the plaintiff in the present case failed to introduce sufficient evidence for a reasonable jury to conclude that age or sex discrimination was a determining factor in Michigan Bell’s decision to transfer her. Because we would hold that the plaintiff did not present sufficient evidence of discrimination, the issue whether the plaintiff’s transfer constituted a constructive discharge is moot. The judgment of the Court of Appeals should be affirmed.

In conclusion, we would reverse the decision of the Court of Appeals in McConnell v Rollins Burdick Hunter, and reinstate the trial court’s grant of summary disposition. We would affirm the decision of the Court of Appeals in Town v Michigan Bell, upholding the trial court’s grant of a directed verdict.

Boyle and Weaver, JJ., concurred with Brickley, J.

1 The plaintiff worked for Miller, Mason, and Dickenson (MMD) immediately before joining RBH. Both firms were subsidiaries of another corporation. The relationship between these two firms and the circumstances of the plaintiff’s move (it was disputed whether he transferred to RBH or was hired) from one firm to the other is not relevant to our disposition of this case.

2 509 US 502, 525; 113 S Ct 2742; 125 L Ed 2d 407 (1993).

3 Matras v Amoco Oil Co, 424 Mich 675, 683; 385 NW2d 586 (1986).

4 Id.

5 411 US 792; 93 S Ct 1817; 36 L Ed 2d 668 (1973).

6 Matras, n 3 supra.

7 Texas Dep’t of Community Affairs v Burdine, 450 US 248, 253; 101 S Ct 1089; 67 L Ed 2d 207 (1981).

8 Hicks, supra at 510-511.

9 Burdine, n 7 supra at 255.

¹⁰

11 Id., n 10.

12 1 Lindemann & Grossman, Employment Discrimination Law (3d ed), p 23.

13 Id.; McDonnell Douglas, supra at 804; Combs v Plantation Patterns, 106 F3d 1519, 1528 (CA 11, 1997).

14 Hicks, supra at 507-508.

15 Udo v Tomes, 54 F3d 9, 13 (CA 1, 1995).

16 Woods v Friction Materials, Inc, 30 F3d 255, 260, n 3 (CA 1, 1994).

17 Lindemann, n 12 supra at 24.

18 Id. at 25 (emphasis in original).

19 Id. at 26 (emphasis in original).

20 Combs, n 13 supra at 1535.

21 Lindemann, n 12 supra at 26-27.

22 Bouwman v Chrysler Corp, 114 Mich App 670, 679; 319 NW2d 621 (1982); Menard v First Security Services Corp, 848 F2d 281, 285 (CA 1, 1988) (“To establish that he was ‘qualified’ a complainant must show ‘that he was doing his job well enough to rule out the possibility that he was fired for inadequate job performance, absolute or relative’ ”); McDonald v Union Camp Corp, 898 F2d 1155, 1160 (CA 6, 1990) (“at a level which met his employer’s legitimate expectations”).

23 Pierce v Commonwealth Life Ins Co, 40 F3d 796, 802 (CA 6, 1994).

24 Proud v Stone, 945 F2d 796, 797 (CA 4, 1991).

25 Lowe v J B Hunt Transport, Inc, 963 F2d 173, 175 (CA 8, 1992).

26 “An employer shall not . . . discharge ... an individual . . . because of . . . age [or] sex . . . .” MCL 37.2202(l)(a); MSA 3.548(202)(l)(a).

27 Hicks, supra at 507. For purposes of analysis only, we presume that the plaintiff has established a prima facie case of discrimination.

28 Matras, n 3 supra at 684.

29 Hicks, supra at 510.

30 Matras, n 3 supra at 682-683. For purposes of analysis only, we assume that the plaintiffs transfer constituted a constructive discharge.

31 Mulholland v DEC Int’l Corp, 432 Mich 395, 415; 443 NW2d 340 (1989).

32 Fuentes v Perskie, 32 F3d 759, 765 (CA 3, 1994).

33 Dubey v Stroh Brewery Co, 185 Mich App 561, 566; 462 NW2d 758 (1990).

34 Unpublished opinion per curiam, issued February 16, 1995 (Docket No. 144980), slip op at 2.

35 Id. at 514-515.

36 Id. at 515.

37 Id. at 519.

38 Id. at 511, n 4.

39 Id. at 524.

40 1 Lindemann, n 12 supra at 26.

41 1995 WL 879968 (ED Mo).

42 90 F3d 285 (CA 8, 1996).