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Johnson v. Securitas Security Svcs., No. 12-2129 and Tramp v. Associated Underwriters, Inc., No. 13-2546 (8th Cir. Oct. 7, 2014)

The Eighth Circuit, en banc (9-3), today affirms summary judgment in an ADEA case. The surprise is not so much in the outcome as the vote split, which is not along ordinary lines. In second case, a panel reverses (in part) summary judgment on another ADEA claim, finding that pointed inquiries into an employee's Medicare eligibility and health-plan costs were probative evidence of age bias.

Johnson v. Securitas Security Svcs., No. 12-2129 (8th Cir. Oct. 7, 2014) (en banc): Lawyers and observers in the civil rights field are accustomed to partisan divides among federal courts of appeals judges, with Republican-appointed judges tending to lean pro-management, and Democratic-appointed judges pro-employee. That is not quite what happened in this case today.

The case itself is straightforward. The plaintiff Johnson, hired at age 70, had a clean work record for five years. He did allegedly encounter friction with his supervisor, Mr. Hesse, who commented to both Johnson and Johnson's wife that Johnson was "too old" to be working and it was "time to hang up [Johnson's] Superman cape and retire." He made similar remarks to executives at the company about Johnson's age.

The company terminated Johnson in 2009, allegedly for being involved in an automobile accident with a company vehicle at a client's workplace and abandoning his post. Hesse, a human resources executive (Ms. Parker), and a service manager (Mr. Bunch) all participated in the decision. Before terminating Johnson, Parker called him and asked him over the phone if "he had been born in 1932."

The majority - reviewing the summary judgment decision in Securitas' favor - assumes that Johnson could establish a prima facie case of age discrimination, but holds as a matter of law that he could not prove that the reason given for his termination was pretextual. The majority concludes that (1) any dispute over whether Johnson actually abandoned his post was immaterial because the employer had a good-faith reason to believe that he had; (2) Johnson had not shown that Parker and Bunch shared Hesse's age bias; (3) Parker's awareness of Johnson's age alone did not raise an inference of bias; (4) Johnson identified no comparable younger employees who were treated relatively better under similar circumstances; (5) the employer did not offer "shifting" explanations; (6) Johnson was not entitled to an inference of spoliation owing to the employer's accidental destruction of notes; and (7) the record as a whole did not support Johnson.

Judge Bye, a Clinton Administration appointee, wrote for the majority.

Judge Smith, a George W. Bush Administration appointee, wrote for the dissent. He found that Hesse's history of making age-biased statements about Johnson, and participation in the decision, was enough to create a jury issue:

"In response to an interrogatory, Securitas stated that Parker, Bunch, and Hesse participated in the decision to terminate Johnson. Parker testified that she did not know how old Johnson was at the time of his termination. Johnson testified, however, that Parker was aware of his age and confirmed Johnson's birth year during the phone call when she terminated Johnson. Whether Parker knew Johnson's age at the time of his termination goes to Parker's credibility-a determination that a jury-not judge-must make. ... If Parker's statement that she did not know Johnson's age at the time of termination is demonstrably false, then a reasonable factfinder could conclude that Johnson was not credible and draw a reasonable inference that Parker's motivation in agreeing to Johnson's termination was age related."

Democratic and Republican appointed judges appeared on both sides. (The original panel had Judge Smith in the majority, with Judge Melloy - another Bush appointee - and Judge Bye in dissent.)

So absent the typical partisan divide, what happened here? To offer a guess, and only a guess, it may be that some federal appeals judges, such as those in the dissent - Republican as well as Democratic-appointed - are wearying of a civil justice system that steadily denies citizen juries their fundamental role as fact-finders. This neither a pro-plaintiff nor pro-defendant view, but simply a pro-constitutional one. Unfortunately for Mr. Johnson, not quite enough to help him get a trial on his case.

Tramp v. Associated Underwriters, Inc., No. 13-2546 (8th Cir. Oct. 7, 2014): In some kind of karma, though, the Eighth Circuit closes one ADEA case while opening another one.

Ms. Tramp served as an underwriter for the defendant; her precise age is not given in the opinion, other than that she was over age 65. According to the summary judgment record, she was far from a perfect employee. Due to various clerical errors, for instance, Tramp was formally reprimanded and placed on probation. Yet at the same time, the company - which was in financial straits - put pressure on Tramp to exit the company's health insurance policy in favor of Medicare supplemental coverage. Emails were exchanged between management and the insurance plan tracking the ages and health of the employees who were leaving the company. Eventually, in 2009, Tramp was terminated as part of a general reduction in force.

The district court thought this case closely resembled Hazen Paper Co. v. Biggins, 507 U.S. 604 (1993), which held that termination of employees for economic reasons that might be associated with age - in particular, vesting in retirement benefits - does not necessarily constitute age discrimination. But the Eight Circuit reverses, holding that the record - showing that the employer equated health-care costs with age - was susceptible to an interpretation of age bias:

"As noted above, during the summer of 2008, seven months prior to Tramp's termination, it became apparent to management that its health care premiums were affected by the demographics of its employees. In correspondence with the health care provider, [Associated Underwriter executive] Gurbacki wrote: 'We have lost several of the older, sicker employees and should have some consideration on this. If you have provided us with your final rates then that is what we will use in our decision.' Then, in August 2008, Hallgren met with Tramp and others and suggested that they utilize Medicare instead of the company's health care plan. Nearly five months after Tramp's termination, there is again email correspondence between Gurbacki and the health care provider discussing the high renewal rates for Associated Underwriters. In it, as relevant here, Gurbacki writes, '[s]ince last year we have lost our oldest and sickest employees . . . .Please let me know if this the best we can do . . . .'"

In this case, the panel holds the employers "perception of [health] insurance premiums are not divorced from age in the same sense that pension benefits are divorced from age. ... Certain considerations, such as health care costs, could be a proxy for age in the sense that if the employer supposes a correlation between the two factors and acts accordingly, it engages in age discrimination."

addition ally, the panel finds evidence of pretext in the unusual circumstances of Associated Underwriters' decision to single out Tramp for disciplinary action, which teed up her eventual termination:

"Tramp has addition ally created an issue of fact as to pretext. Associated Underwriters claim that it terminated Tramp due to the 2009 RIF and that Tramp was chosen because she was the poorest performer in her group. Yet, if believed, Tramp's written reprimand probationary status were imposed contrary to Associated Underwriters' practice. That is, she argues that there was no such practice prior to the process imposed on Tramp in the fall of 2008."

Nevertheless, the panel affirmed summary judgment in Tramp's parallel ADA case. "Tramp offers no evidence other than her own testimony that others were 'generally aware' of her scheduled [knee] surgery, that anyone else knew about the surgery or, more importantly, that such knowledge affected decisions regarding Tramp's employment or that they regarded her as impaired."

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