JEFFREY L. VIKEN, District Judge.
Plaintiffs Dennis Hothem and Kendell Stevens filed a complaint alleging the defendants, Dave Schneider, individually and as Mayor, and the City of Belle Fourche (the "City") engaged in age discrimination in violation of the Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq., ("ADEA") (alleging both disparate treatment and disparate impact); violated plaintiffs' First Amendment constitutional rights in violation of 42 U.S.C. § 1983; and wrongfully discharged plaintiffs in violation of South Dakota public policy. (Docket 1). Plaintiffs seek punitive damages against defendant Schneider, individually. Id. Both defendants filed answers denying plaintiffs' claims. (Dockets 16 & 17). Defendants filed separate motions for summary judgment on all claims. (Dockets 47 & 57). The court referred the motions to Magistrate Judge Veronica L. Duffy for a report and recommendation pursuant to 28 U.S.C. § 636(b)(1)(B). (Docket 82).
On January 20, 2012, Magistrate Judge Duffy filed a report and recommendation. (Docket 103). The magistrate judge recommended the court (1) deny the City's motion for summary judgment on plaintiffs' ADEA-disparate treatment claims; (2) grant the City's motion for summary judgment on plaintiffs' ADEA-disparate impact claims; (3) grant defendants' motions for summary judgment on plaintiffs' civil rights claims; (4) grant the City's motions for summary judgment on plaintiffs' state law public policy claims; (5) grant defendant Schneider's motion for summary judgment on plaintiffs' official capacity claims; (6) grant defendant Schneider's motion for summary judgment as to plaintiffs' ADEA claims; and (7) grant defendant Schneider's motion for summary judgment on plaintiffs' state law public policy claims. Id. at pp. 53, 54, 63, 65, 67 & 70. Plaintiffs and the City filed objections. (Dockets 104 & 106). All parties filed responses and replies to the opposing
The court reviews de novo those portions of the report and recommendation which are the subject of objections. Thompson v. Nix, 897 F.2d 356, 357-58 (8th Cir.1990); 28 U.S.C. § 636(b)(1). The court may then "accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge." 28 U.S.C. § 636(b)(1)(C). For the reasons stated below, plaintiffs' objections are granted in part and overruled in part and the City's objections are granted in part and overruled in part. The report and recommendation of the magistrate judge is adopted in part, modified in part, and rejected in part as explained by this order.
Plaintiffs' objections to the magistrate judge's findings of fact are summarized as:
(Docket 106) (passim).
Defendant City's objections ("defendant's objection(s)" or "City's objection(s)") to the magistrate judge's findings of fact are summarized as:
(Docket 104 at pp. 2-5). Each of the parties' objections will be addressed separately.
Magistrate Judge Duffy set out the background facts regarding the issue of asbestos tile removal at the City's police department. (Docket 103, pp. 6-10). Those facts need not be restated here.
Plaintiffs' objection focuses on whether the DENR issued a "written reprimand" to the City regarding asbestos removal. (Docket 106 at p. 1). Plaintiffs' statement of material facts does not refer to any type of reprimand or warning from the DENR, let alone a written reprimand. (Docket 68) (sealed) (passim).
Erin Schmidt, a DENR employee, described DENR's contact with the City and its employees relating to the asbestos removal issue. (Docket 60). Her affidavit states "[t]o my knowledge, no notice of violation, written reprimand or any other type of disciplinary action or sanction whatsoever was issued against the City of Belle Fourche, its officials or employees, as a result of the [asbestos] incident." Id.
Plaintiffs have not produced a "warning letter" or "reprimand letter" from DENR. Sufficient time to complete discovery was allowed to locate such a letter if it existed. There are no other citations to the record which support plaintiffs' objection.
Plaintiffs' objection is overruled.
Plaintiffs' objections to defendant Schneider's SUMF ¶ 14 claims "SDDENR specifically instructed the City of Belle Fourche to perform air monitoring...." (Docket 95 at ¶ 14). On September 27, 2009, Mayor Schneider issued directives that all renovations and demolitions be coordinated with Building Inspector Wierzbicki and that employees follow state law. (Docket 94 at ¶¶ 164-65). One of those directives certainly would include complying with the DENR fax regarding proper asbestos removal. (Docket 60-1). The instructions for asbestos removal were faxed by DENR to Mr. Hothem on January 7, 2008. Id. Among other requirements for removing asbestos, the instructions contain the following provisions:
(Docket 60-1). This instruction sheet is the only evidence presented by either party addressing air monitoring. Plaintiffs have not produced any evidence DENR required air monitoring by the City.
Plaintiffs' objection is overruled.
Ms. Pummel, the City's insurance agent and wife of City Councilman David Pummel, provided health insurance quotes to the City for all of its employees as part of the 2010 budget process. (Docket 87 at ¶¶ 47 & 48). City employees were separated into age brackets for premium analysis. (Docket 78-2). On the health premium analysis table there are four sections highlighted: "Quoted Coverage Ultra $1000 80/20 4100"; "Four Tier Rate Table"; in the age brackets 55-59 "Family $1,512.07"; and in the age bracket 60-64 "Family $1,980.70." Id. at p. 16. Plaintiffs argue Ms. Pummel highlighted the costs of insurance for individuals falling in the 55-64 age brackets. (Docket 106 at p. 2). Plaintiffs' citation to the deposition of Mr. Hothem is not helpful to resolve the
Gloria Landphere, the City's finance officer, e-mailed Councilman Pummel saying "by the way I did those insurance numbers person by person...." (Docket 77-4 at p. 25). But there is no testimony Ms. Pummel, or the City's agents, Councilman Pummel or Finance Officer Landphere, highlighted the insurance premium table.
Plaintiffs' argument, without more, does not create either an undisputed material fact or allow the court to consider plaintiffs' assertion as a fact for summary judgment purposes.
Plaintiffs' objection is overruled.
Plaintiffs' objection asserts a series of e-mail communications occurred in "late August of 2009." (Dockets 106 at p. 2; 71 at ¶¶ 52-53 & 55; 77-4 at pp. 8-9 & 32-33). Plaintiffs claim these discussions were prior to an e-mail of September 6, 2009, in which Councilman Pummel suggested the city council "eliminate [the] assistant superintendent [and] put (Hothem) on probation with bi-weekly reviews and monthly reviews." (Docket 71 at ¶ 55).
Each of the e-mails which are the subject of plaintiffs' objection are properly referenced and considered in the report and recommendation. (Docket 103 at p. 16 n. 12).
Plaintiffs' objection is overruled.
The report and recommendation stated "[t]he unemployment figure attributable to Mr. Hothem and Mr. Stevens as of July 20, 2010, was $5,567." (Docket 103 at p. 19). Plaintiffs object to the use of this expense figure, as the City's 2010 total unemployment expense for Mr. Hothem and Mr. Stevens was $11,000. (Docket 106 at p. 2). The City acknowledges the minutes for the December 10, 2010, city council meeting reflect the total unemployment for the calendar year for the custodial-maintenance department was $11,000. (Docket 107 at p. 7). This amount was an additional appropriation request by the City Finance Officer for the 2010 year. Id. The report and recommendation is modified consistent with this order.
Plaintiffs' objection is granted.
Plaintiffs' objection asserts "assisting with asbestos removal" was not part of plaintiffs' job descriptions, but rather
Plaintiffs' objection is overruled.
Based on the court's finding in plaintiffs' objection number 6, the court finds Mr. Hothem's speech regarding asbestos removal was part of his job duties. The report and recommendation at page 58 is modified consistent with this analysis.
Plaintiffs' objection is overruled.
Plaintiffs argue "some individuals are better about hiding their feelings than others." (Docket 106 at p. 4). Neither plaintiffs' objection nor their justification for the objection direct the court to evidence which would support plaintiffs' position. Argument, without supporting evidence, does not create a genuine issue of material fact. Thomas v. Corwin, 483 F.3d 516, 527 (8th Cir.2007).
Plaintiffs' objection is overruled.
The report and recommendation indicates the first asbestos issue arose "[i]n the fall of 2008...." (Docket 103 at p. 5). Mr. Hothem called DENR on January 7, 2008, to inquire about the proper methods for asbestos removal. (Docket 60-2). In response to his inquiry, DENR faxed its instructions for asbestos removal to Mr. Hothem on January 7, 2008. (Docket 60-1). On January 31, 2008, DENR received a third-person complaint about asbestos tiles being improperly removed from the City's police department. (Docket 60-2). Mr. Baldwin from DENR completed an investigation of the removal then in progress. Id. The undisputed evidence clearly discloses asbestos removal first came up in January of 2008, which prompted Mr. Hothem's communications with DENR.
Plaintiffs submit there is a temporal proximity between the asbestos complaints and the terminations of plaintiffs because "[o]ne of the complaints about asbestos was made August 24, 2009." (Dockets 71 at ¶ 139 & 75-2 at p. 23). Ms. Schmidt's e-mail of April 1, 2011, reflects the content of the August 24, 2009, complaint. (Docket 60-3). This complaint was from Nicole Shifar, a former police department secretary. Id. On August 25, 2009, Mr. Hothem explained the process of tile removal to Ms. Schmidt at DENR and encouraged her to come look to make sure the work was done correctly. Id. More important to the asbestos complaint issue, Chief of Police Maunders told Ms. Schmidt the next day that the complaining witness was "a disgruntled employee." Id.
Mr. Hothem claims he was terminated because he spoke out and challenged Mayor Schneider over the initial decision to complete the asbestos tile removal by using City employees. (Docket 1 at ¶ 44). That "speech" occurred in the spring of 2008
Plaintiffs' objection presents no evidence which was not already considered and rejected by the magistrate judge. The court concludes there was no temporal proximity between the asbestos removal issue and Mr. Hothem's termination.
Plaintiffs' objection is overruled.
The report and recommendation, as modified by this order, accurately sets out the nature of the contact between the City and DENR. Plaintiffs' objection presents no evidence which was not already considered and rejected by the magistrate judge.
Plaintiffs' objection is overruled.
The report and recommendation, as modified by this order, accurately concludes there was no relationship between the asbestos removal issues and plaintiffs' terminations. Plaintiffs' objection presents no evidence which was not already
Plaintiffs' objection is overruled.
The report and recommendation found Mr. Hothem returned to employment with the City in January 2006. (Docket 103 at p. 3). Defendant's objection asserts the parties agreed his date of return to City employment occurred in January 2007. (Docket 104 at p. 2 ¶ 1).
Mr. Hothem testified he was offered a job and came back to work for the City in January 2006. (Docket 53-12 at p. 22:19-21). Mr. Hothem admitted his resume was wrong about his re-hire date with the City. (Id. at p. 33:1-13). Plaintiffs' statement of facts, admitted by the City, states "[a]t the request of Mayor Schneider, Councilmember [sic] Tim Bennett approached Hothem in January of 2006 and requested that Hothem leave his job ... and return to the City of Belle Fourche to serve as working supervisor to head up the Custodial and Maintenance Department." (Dockets 68 at ¶ 2; 87 at ¶ 2). The City's statement of undisputed facts, admitted by plaintiffs, states "Dennis Hothem returned to employment with the City in January of 2007 as the supervisor of a newly-formed department known as the custodial/maintenance department." (Dockets 52 at ¶ 2; 69 at ¶ 2). The City's Legal and Finance Committee voted on January 5, 2007, to hire Mr. Hothem as "Maintenance & Custodial Department Working Supervisor...." (Docket 53-1).
The court finds Mr. Hothem was hired in January 2007. (Docket 86-1 at ¶ 6) (sealed) He was then 59 years of age. Id. The report and recommendation is modified consistent with this order.
Defendant's objection is granted.
The purpose of a custodial-maintenance department is traditionally "to do custodial and maintenance work ... at buildings owned or occupied by the City." (Docket 52 at ¶ 5). Whether the work of the custodial-maintenance department was "formerly performed by the ... City Recreation Center" is not a fact material to the summary judgment motion. Id. Defendant does not indicate the significance of its proposed undisputed fact or its materiality.
Defendant's objection is overruled.
Defendant asserts the job descriptions of the custodial-maintenance department before restructuring are material to the "replacement issue" raised later in defendant's objections. (Docket 104 at ¶ 3). Those job descriptions are: "custodial/maintenance supervisor (Dennis Hothem), custodial/maintenance assistant supervisor (Kendall Stevens) and all other employees were custodial maintenance technicians." (Docket 52 at ¶ 9).
The court finds the City's "job descriptions" are not job descriptions, in fact, but rather job titles. Whether a person
Defendant's objection is overruled.
Defendant's SUMF No. 10 does not describe "work performed by custodial-maintenance technicians" but provides a summary of some of the work performed by these employees. Regardless, defendant acknowledges "it is not a material issue of fact that will affect the outcome of the case if Pearson, Hothem, and Stevens handled most or all of the heavy work." (Docket 86 at ¶ 10) (emphasis in original).
Defendant's objection is overruled.
The City objects to the magistrate judge's reference to plaintiffs' responses to the City's SUMF No. 37. (Docket 104 at pp. 2-3). The City would prefer there be no discussion of plaintiffs' generalized objection. In reviewing the City's SUMF No. 37, plaintiffs' objection (Docket 86 at ¶ 37), and the footnote at page 15 of the report and recommendation, the court finds the footnote to be a fair comment on the state of the evidence. The City's claim of saving approximately $37,754.54 is accepted for what it was intended to be a-budget estimated savings for 2010.
Defendant's objection is overruled.
The City's SUMF No. 38 is, in part, a restatement of SUMF No. 37, discussed above. The hourly wage increases for Mr. Smoot and Mr. Hoffman are addressed in the report and recommendation. (Docket 103 at pp. 21-22). SUMF No. 39 focuses on the City's budget work relating to the library-resulting in a $21,696 savings, and the receptionist-secretary position in the City Engineer's Office being reduced to part-time with a savings of $13,023. These positions are mentioned at pages 16, 17, and 18 of the report and recommendation. (Docket 103 at pp. 16-18). SUMF No. 40 discussed dispatch savings and health insurance premium reductions city-wide. Reduction of dispatch costs and employee health insurance premiums are generally mentioned at page 46 of the report and recommendation. Id. at p. 46. SUMF No. 41 discusses reducing full-time positions to part-time positions to save wages and benefits. These types of budget saving activities are mentioned at pages 15, 16, 18, 22, 41, 42, and 45 of the report and recommendation. Id. at pp. 15, 16, 18, 22, 41, 42 & 45. While the costs of the activities mentioned in SUMF No. 42 may not be separately identified, the report and recommendation acknowledges "[u]nder the comprehensive budgetary plan voted on by the council, the council eliminated positions in the library and in custodial/maintenance; reduced hours of employees in the finance office and the engineering
Defendant's objection is overruled.
The report and recommendation specifically mentions Mr. Smoot was promoted "to the position of custodial/maintenance technician IV/foreman...." Id. at p. 21. The elimination of the custodial-maintenance department and transfer of duties to the public works department would necessarily require a new position in the public works department. The creation of the new position in the public works department is implied in the general discussion of the report and recommendation.
Defendant's objection is overruled.
Mr. Smoot was given a $2.06 per hour raise, from $12.46 to $14.52 per hour, at the time of his promotion on December 7, 2009. (Docket 103 at pp. 21, n. 18 & 22). He was then given a 3% cost of living increase on January 1, 2010, bringing his hourly wage rate to $14.96. Id. at p. 21, n. 18. This is a $3 per hour raise in 24 days. Each of the elements of this raise calculation is adequately explained in the report and recommendation.
Defendant's objection is overruled.
The record discloses when Penny Herman resigned in August 2009, Mr. Hothem interviewed Jeff Hauf on September 3, 2009, to fill her position as a custodial maintenance technician in the custodial-maintenance department. (Docket 86 at ¶¶ 61 & 62). The report and recommendation specifically noted "[o]n or about September 3, 2009, Mr. Hothem interviewed Jeff Hauf for this position and recommended to the council that Mr. Hauf be hired." (Docket 103 at p. 42 n. 25).
Defendant's objection is overruled.
Mr. Hoffman received a salary increase from $23.96 per hour to $27.51 per hour effective December 7, 2009. (Docket 86 at ¶ 66). He then received a 3% cost of living increase on January 1, 2010, which brought his total hourly rate to $28.34 per hour. The report and recommendation is modified accordingly.
Defendant's objection is sustained.
Defendant objects to the magistrate judge including a statement from Mr.
Defendant's objection is overruled.
The magistrate judge simply referred to the City's disciplinary and grievance procedures as plaintiffs claim they were terminated in violation of the City's own policies. (Docket 103 at p. 20). The report and recommendation does not make the City's disciplinary and grievance procedures a part of the ultimate conclusion in the case.
Defendant's objection is overruled.
Plaintiffs' statement of material facts states "[o]n November 16, 2009, Hothem and Stevens were told to bring their keys and then were terminated during an Open [sic] session of the City Council at the end of the meeting without explanation, notice or the opportunity to give reasons why the action should not be taken." (Docket 87 at ¶ 86). The City admits this statement is true. Id. The magistrate judge simply referred to this statement as plaintiffs' claim they were terminated in violation of the City's own policies. (Docket 103 at p. 20). The report and recommendation does not make the City's disciplinary and grievance procedures a part of the ultimate conclusion in the case. Nor does the report and recommendation condemn the City's action even though its action was taken "without explanation, notice or the opportunity to give reasons why the action should not be taken." (Docket 87 at ¶ 86). This is a fair statement of the undisputed facts, even without reference to the City's own policies and procedures.
Defendant's objection is overruled.
Plaintiffs filed no objections to the magistrate judge's conclusions of law and recommendations. Defendant City's objections to the magistrate judge's conclusions of law and recommendations are summarized as:
(Docket 104 at pp. 6-49). Each of the City's objections to the conclusions of law in the report and recommendation will be addressed separately.
The City argues the magistrate judge used the wrong standard in evaluating step three of the McDonnell Douglas
Jelsma was a case evaluating summary judgment under both the Americans with Disabilities Act ("ADA") and the ADEA. Jelsma, 744 F.Supp.2d at 1003. The court acknowledged the standard language of step three of the burden-shifting analysis under the ADEA requires a plaintiff to establish a prima facie case by proving "(3) was meeting the employer's reasonable expectations at the time of the adverse action...." Id. at 1013. The court concluded that is the same analysis required on an ADA claim. Id. Under the ADEA, the court said "[t]he third element is similar to the essential duties analysis in the ADA claim as discussed above and Jelsma has put forth sufficient evidence to meet this element." Id. Without further explanation of the difference between an ADEA and ADA analysis, the court found under the ADA claim Mr. Jelsma presented sufficient facts he was "qualified to perform the essential functions of his position with a reasonable accommodation when he submitted his resignation."
In Riley v. Lance, Inc., 518 F.3d 996 (8th Cir.2008), an ADEA case, the United States Court of Appeals for the Eighth
The court accepts the magistrate court's analysis and use of the standard "plaintiff must show only that he possesses the basic skills necessary for performance on the job, not that he was doing it satisfactorily." (Docket 103 at p. 32) (citing Haigh v. Gelita USA, Inc., 632 F.3d 464, 469 (8th Cir.2011) (citing McGinnis v. Union Pacific Railroad, 496 F.3d 868, 874 n. 2 (8th Cir.2007)). To require plaintiffs to "disprove the reasons given for the discharge during [plaintiffs'] prima facie case, [would] short-circuit[] the analysis under McDonnell Douglas." Haigh, 632 F.3d at 470 (citing McGinnis, 496 F.3d at 875 n. 3). The Haigh court accepted the reasoning of McGinnis, concluding its reasoning was "more sound under the burden-shifting framework because the plaintiff should not be tasked with anticipating and disproving his employer's reasons for termination in his prima facie case." Id.
The logic of McGinnis and Haigh has been accepted in other employment discrimination settings since Haigh. In Lake v. Yellow Transportation, Inc., 596 F.3d 871 (8th Cir.2010), a racial discrimination in employment case, the court examined whether plaintiff was required to show he met his employer's "legitimate expectations" versus the "qualified for the position" standard of McDonnell Douglas. Id. at 874. The court ruled "Lake is not required to disprove Yellow's reason for firing him at this stage of the analysis.... If he were, the McDonnell Douglas burden-shifting analysis would collapse into the second element of the prima facie case." Id. at 874. Similarly, in an ADEA case involving a reduction-in-force ("RIF"), Rahlf v. Mo-Tech Corporation, Inc., 642 F.3d 633 (8th Cir.2011), the Eighth Circuit looked to the element "he met the applicable job qualifications." Id. at 637. The court ruled Rahlf was "qualified for a position at the company after the RIF.... Rahlf satisfies the ... element of the prima facie case." Id. (referencing Arnold, 471 F.3d at 846 ("finding that employees were required to show only that they were qualified for the job, not that they would excel or even meet reasonable expectations.").
Defendant's objection to the step three analysis is denied.
The parties acknowledge the process the City used in terminating plaintiffs' positions was a work force reduction or reduction in force (collectively "RIF"). (Dockets 54 at p. 18; 67 at p. 6; 68 at ¶ 56). The magistrate judge concluded genuine issues of material fact exist as to whether Mr. Hothem and Mr. Stevens were replaced by Mr. Smoot and Mr. Hauf, respectively. (Docket 103 at pp. 40 & 42 n. 25). Defendant objects to these
In their analysis, plaintiffs focused the court on the elements of an ADEA claim set out in Roeben v. BG Excelsior Ltd. Partnership, 545 F.3d 639 (8th Cir.2008). (Docket 67 at p. 12). However, Roeben was not an ADEA claim based on a RIF, but rather termination allegedly involving theft of hotel property. Roeben, 545 F.3d at 642. Plaintiffs then base the remainder of their ADEA argument on Riley, 518 F.3d at 999 (poor job performance), Arnold, 471 F.3d at 846 (patient abuse), and McGinnis, 496 F.3d at 873 (poor job performance). (Docket 67 at p. 12). Plaintiffs do not focus on the elements of an ADEA claim in a RIF setting in their resistance to defendant City's motion for summary judgment.
Defendant City urges the court to accept the rationale and rules of the United States Court of Appeals for the Sixth Circuit in Barnes v. GenCorp Inc., 896 F.2d 1457 (6th Cir.1990). (Dockets 54 at p. 18; 104 at 10). Barnes was an ADEA case involving a RIF.
Barnes, 896 F.2d at 1465. "Of course an employer could not avoid liability by changing the job title or by making minor changes to a job indicative of an attempt to avoid liability. Further, a plaintiff could attempt to show that the force reduction was itself pretextual." Id. In a RIF analysis, "a plaintiff could establish a prima facie case by showing that he ... possessed qualifications superior to those of a younger co-worker working in the same position as the plaintiff." Id. at 1466.
The magistrate judge initially cited two cases which were not RIF based ADEA cases: Richmond v. Bd. of Regents of University of Minnesota, 957 F.2d 595 (8th Cir.1992), and Lewis v. St. Cloud State University, 467 F.3d 1133 (8th Cir.2006). (Docket 103 at pp. 30-31). Based on Lewis, the magistrate judge concluded plaintiffs could establish a prima facie case of age discrimination by proving the following elements:
(Docket 103 at pp. 30-31) (citing Lewis, 467 F.3d at 1137). But then, the magistrate judge acknowledged "[i]n a reduction-in-force analysis, under the fourth prong, the plaintiff must "come forward with additional evidence that age was a factor in his termination in order to establish a prima facie case." Id. at p. 31 n. 21 (citing Holley v. Sanyo Manufacturing, 771 F.2d 1161, 1165-66 (8th Cir.1985)).
The magistrate judge focused her analysis on Cova v. Coca-Cola Bottling Co. of St. Louis, Inc., 574 F.2d 958 (8th Cir.1978). (Docket 103 at p. 35). Cova was a ADEA case based on a RIF. Id. at 960. The court used the following ADEA elements:
Id. at 959.
Notwithstanding the analysis required in an ADEA case based on a RIF, the magistrate judge changed focus to a non-RIF ADA-ADEA case, Christensen v. Titan Distribution, Inc., 481 F.3d 1085 (8th Cir. 2007). (Docket 103 at p. 35). With the shift in focus, the magistrate judge failed to return to the ultimate issue in plaintiffs' case — the issue is not whether plaintiffs were "replaced" by younger workers, but rather, whether "after the discharge the position remained open and the employer continued to seek applications from persons with similar qualifications." Cova, 574 F.2d at 959. "In a non-RIF ADEA case, [the fourth step] requirement may be met by producing evidence that a substantially younger worker replaced the plaintiff.... In a RIF case, however, the plaintiff's job is eliminated and/or redistributed to other workers." Ward, 509 F.3d at 461.
The question remaining in the analysis of this case is whether plaintiffs were "qualified for any position existing after the RIF...." Rahlf, 642 F.3d at 637. Plaintiffs were originally qualified for the positions they held before the RIF and, with the separation of the administrative duties over to Mr. Hoffman, it would appear Mr. Hothem and Mr. Stevens would be qualified to work within the public works department and still qualify to perform the manual labor type of activities which Mr. Smoot and Mr. Hauf were hired to perform. "Absent the administrative duties that Mr. Hothem performed, the duties of Mr. Smoot are very similar to those of Mr. Hothem's position." (Docket 103 at p. 39). "Mr. Hauf performed many of the same duties that Mr. Stevens performed. The city acknowledges that other than the few administrative duties Mr. Stevens assisted Mr. Hothem with that Mr. Stevens did the same custodial work the custodial/maintenance technicians did."
Id. at pp. 44-45. "Mr. Hothem and Mr. Stevens point out that the only individuals whose positions were terminated or had their hours reduced were all older than 55." Id. at p. 45. "Though not determinative of age discrimination, this fact is sufficient to make a prima facie case." Rahlf, 642 F.3d at 638.
Applying the proper analysis standard required by Cova, Ward, and Rahlf, defendant's objection is overruled. The report and recommendation is modified to reflect this analysis. That part of the report and recommendation in conflict with this analysis is rejected.
Defendant's objection focuses on the age comparison between Mr. Hothem and Mr. Smoot.
Girten, 337 F.3d at 982. The Girten court questioned the nine-year age difference
In Chambers v. Travelers Companies, Inc., 668 F.3d 559 (8th Cir.2012), the court concluded an eight-year difference in an ADEA claim was not "sufficiently younger." Id. at 566 (referencing Schiltz, 115 F.3d at 1413 (a five-year age difference is insufficient to establish a prima facie case)). The court in Chambers also referenced Grosjean v. First Energy Corp., 349 F.3d 332, 338-39 (6th Cir.2003), cert. denied, 541 U.S. 1010, 124 S.Ct. 2069, 158 L.Ed.2d 620 (2004). Id. The court in Grosjean collected cases from other circuits in which an age difference "of less than ten years [is] not significant enough to make out the fourth part of the age discrimination prima facie case." Id. at 338. Some of the cases referenced in Grosjean were:
Id. at 338-339. "Without more" the nine-year difference between Mr. Hothem and Mr. Smoot may not satisfy the "substantially younger" criteria of Chambers.
Defendant's objection is overruled.
The magistrate judge concluded "The city's proffered reasons for the elimination of Mr. Hothem's and Mr. Stevens' positions are legitimate and nondiscriminatory." (Docket 103 at p. 46). At the next step of the McDonnell Douglas burden-shifting analysis, plaintiffs are required to show the City's reasons for termination of plaintiffs' positions were pretextual. Id.
In Gross v. FBL Financial Services, Inc., 557 U.S. 167, 129 S.Ct. 2343, 174 L.Ed.2d 119 (2009), the United States Supreme Court declared:
Id. at 2352. The Eighth Circuit incorporated the "but-for" requirement into its burden-shifting analysis. Haigh, 632 F.3d at 468. "[T]he showing of pretext necessary to survive summary judgment requires more than merely discrediting an employer's asserted reasoning for terminating an employee. A plaintiff must also demonstrate that the circumstances permit a reasonable inference of discriminatory animus." Id. at 470 (internal citation omitted). "At all times, the plaintiff retains the burden of persuasion to prove that age was the "but-for" cause of the termination." Rahlf, 642 F.3d at 637.
"In determining whether a plaintiff has met its burden with respect to pretext in a summary judgment motion, a district court is prohibited from making a credibility judgment or a factual finding from conflicting evidence." Yates v. Rexton, Inc., 267 F.3d 793, 800 (8th Cir.2001). "In a reduction-in-force case, two additional general rules apply. The ADEA does not authorize a court to judge the wisdom of a company's business decision to reduce its workforce in response to economic pressures.... However, even within the context of a legitimate reduction-in-force, an employer may not fire an employee because of his age." Id.
The magistrate judge accepted six reasons given by plaintiffs that the City's termination decision was pretextual. Those reasons, together with the analysis of each, are:
Plaintiffs acknowledge the City was properly concerned about an anticipated short-fall for the 2010 budget year but do not believe a RIF was necessary or, in fact, occurred. The magistrate judge properly noted the City was entitled to the business judgment rule. (Docket 103 at p. 47). The court is not authorized to "judge the wisdom of [the City's] business decision to reduce its workforce in response to economic pressures." Yates, 267 F.3d at 800. Furthermore, the court "may not second-guess an employer's personnel decisions, and we emphasize that employers are free to make their own business decisions, even inefficient ones, so long as they do not discriminate unlawfully." Haigh, 632 F.3d at 471 (internal citation omitted). The ADEA "do[es] not prohibit employment decisions based upon ... unsound business practices." Id. (internal citation omitted). The court finds any claim the City's decision to engage in a RIF was pretextual fails.
The undisputed evidence disclosed only three employees were terminated in the RIF-plaintiffs, plus the assistant librarian who was over 55 years of age. (Docket 103 at p. 51 n. 27). The magistrate judge concluded this "smacks of age discrimination." (Docket 103 at p. 52). "Employment decisions motivated by characteristics other than age (such as salary and pension benefits), even when such characteristics correlate with age, do not constitute age discrimination." Hanebrink v. Brown Shoe Co., 110 F.3d 644, 647 (8th Cir.1997). The remainder of the relevant evidence, particularly focused upon the three positions, is the assistant librarian's position was terminated and never reinstated, Mr. Smoot was 53 (which caused a marginally lower health insurance premium expense to the City), and Mr. Hauf was initially hired for less than 20 hours per week and was later increased to 35 hours per week without insurance benefits. These actions support the City's argument its focus was the reduction of expenses and not elimination of older employees. The City's efforts at reducing employee benefits by terminating three positions and either not filling or involving part-time or less-than-full time employees to avoid employee benefits costs is not evidence of pretext by the City.
Defendant's objection is sustained and the report and recommendation is modified to reflect this conclusion.
The City initially concluded termination of the plaintiffs' positions was necessary as part of a RIF based on "economic realities facing the City and the desire for more efficient and cost effective services...." (Dockets 86 at ¶ 52 & 87 at ¶ 42). The magistrate judge thought this changed to include performance-related issues with the testimony of Councilman Pummel. (Docket 103 at p. 50) (citing Docket 53-14 at pp. 35-36). Mr. Pummel testified he was concerned because:
(Docket 53-14 at p. 36:2-16). Finally, the magistrate judge concluded the argument the City got "more bang for its buck with Kim Smoot than it got with Mr. Hothem" was a "varying explanation[]" for the City's elimination of the custodial-maintenance department. (Docket 103 at p. 51).
City counsel's argument that it got "more bang for its buck" is just that, an argument and not a change in the City's position. The court finds the decision of the City to eliminate the custodial-maintenance department was never a "performance" issue against either plaintiff, but rather an efficiency comparison between
Defendant's objection is sustained and the report and recommendation is modified to reflect this conclusion.
The City argues under the business judgment rule it did not have to offer Mr. Hothem the opportunity to fill the position taken by Mr. Smoot. (Docket 104 at p. 39). "[T]he City would get more bang for its buck by transferring some of the administrative duties of Hothem to Hoffman, having Smoot perform some of the duties of Hothem, and have Smoot perform additional duties that Hothem was never able to perform." Id.
Without the administrative duties which were being transferred to the public works director, comparing Mr. Hothem's position to the position which Mr. Smoot assumed before the end of December 2009 shows those job descriptions are nearly identical. Compare Dockets 74-4 at pp. 1-4 and 90-18 at pp. 1-3.
In a summary judgment analysis, plaintiffs are entitled to all reasonable inferences. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587-88, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Mr. Hothem was qualified to take the position of Custodial/Maintenance Technician IV/Foreman. But for Mr. Hothem's age, his seniority with the City would suggest he was entitled to consider the post-RIF position.
In similar fashion, Mr. Stevens' pre-termination job description and the job description for the position Mr. Hauf filled are nearly identical. Compare Dockets 74-4 at pp. 5-7 and 90-30 at pp. 1-3.
The business judgment rule does not allow the City to discriminate based on age. Plaintiffs have presented sufficient evidence that "but-for" their age, plaintiffs were qualified for and should have been offered these newly created positions as part of the RIF process. Rahlf, 642 F.3d at 637.
Defendant's objection is overruled and the report and recommendation is amended to reflect this analysis.
Coupled with plaintiffs' claim Mr. Stevens should have been offered the position filled by Mr. Hauf, the fact Mr. Hauf was rapidly increased from 19 3/4 hours to 35 hours per week creates a strong inference that a "but-for" pretext exists for the decision to terminate Mr. Stevens based on his age.
Defendant's objection is overruled.
Mr. Hothem was making $14.52 per hour and when Mr. Smoot was transferred into the "new" position he was making $14.52 per hour. (Docket 103 at p. 21 n. 18). This was after the City transferred Mr. Hothem's administrative duties to Public Works Director Hoffman and gave him a $3.55 per hour raise. Id. at p. 22. Mr. Stevens was making $11.07 per hour and Mr. Hauf began his work as a custodial
Defendant's objection is overruled.
Based on the above analysis, it is hereby
ORDERED that plaintiffs' objections (Docket 106) are granted in part and denied in part.
IT IS FURTHER ORDERED that defendant City of Belle Fourche's objections (Docket 104) are granted in part and denied in part.
IT IS FURTHER ORDERED that the report and recommendation (Docket 103) is adopted in part, modified in part and rejected in part consistent with this order.
IT IS FURTHER ORDERED that defendant City of Belle Fourche's motion for summary judgment (Docket 47) is granted in part and denied in part.
IT IS FURTHER ORDERED that defendant Schneider's motion for summary judgment (Docket 57) is granted.
IT IS FURTHER ORDERED that defendant City of Belle Fourche's motion for summary judgment as to plaintiffs' purposeful age discrimination claim under the Age Discrimination in Employment Act is denied.
IT IS FURTHER ORDERED that plaintiffs' disparate impact age discrimination claims under the Age Discrimination in Employment Act are dismissed with prejudice.
IT IS FURTHER ORDERED that plaintiffs' First Amendment claims under 42 U.S.C. § 1983 are dismissed with prejudice.
IT IS FURTHER ORDERED that plaintiffs' wrongful discharge in violation of South Dakota public policy claims are dismissed with prejudice.
