HERMAN J. WEBER, Senior District Judge.
This matter is before the Court upon the defendant's "Motion for Summary Judgment" (doc. no. 38), which plaintiff opposes. Defendant has submitted "Proposed Findings of Fact and Conclusions of Law" (doc. no. 37), which the plaintiff has highlighted as true, false, or irrelevant (doc. no. 45). The Magistrate Judge has entered a Report and Recommendation (doc. no. 48), recommending that the defendant's motion be
The facts are fully set forth in detail in the Magistrate Judge's Report and Recommendation (doc. no. 48) and need only be summarized here. Defendant Schaeffer's Investment Research, Inc. ("SIR") is a company that researches investments and sells informational products, such as home study programs, DVDs, CDs, and newsletters, for use by its customers in options trading. SIR maintains a confidential database of subscribers, prospective subscribers, their contact information, their buying history, and other account information (doc. no. 45 at ¶¶ 1-3; see also, 38-1 at 11-12).
On October 31, 2006, plaintiff Larry Green (at age 52) was hired to work at SIR as a sales consultant. His role was to sell SIR's products and services over the telephone to individuals in SIR's existing subscriber database (doc. no. 45 at 2, ¶¶ 8-10). When hired, plaintiff signed two agreements as a condition of his employment: a "Non-Disclosure Agreement" and an "Email and Internet Policy" (¶ 11, 14). The Non-Disclosure Agreement provides in relevant part:
(doc. 45 at ¶ 12, citing Green Dep. at Ex. 3; doc. no. 33-2 at 23 "Non-Disclosure Agreement"). The Email Policy further provided:
(Doc. 33-2 at 24-25).
While plaintiff was working for SIR, the company filed a lawsuit against a former employee (Chris Johnson) for his alleged misappropriation of SIR's confidential information in violation of these policies. Plaintiff was aware of this and acknowledged at deposition that he knew this misappropriation of company data was a "pretty big deal" at SIR (doc. no. 33 at 5, Green Dep. at 20, lines 1-4).
In June of 2008, SIR restructured and divided its sales force into two teams: the Alert Team and the Conversion Team. As part of this restructuring, SIR terminated six sales associates, five of whom were over the age of forty (40). Plaintiff survived the reduction in force ("RIF") and was assigned to work on the Conversion Team, supervised by Jason Kuykendall. Plaintiff's duties included converting "leads" (i.e people who had expressed interest but not paid for any services) into paid subscribers of SIR's products and services. Although plaintiff had previously received several warnings about his work habits, plaintiff subsequently improved his performance and was the highest producing representative on the Conversion Team for the month of July 2008.
On August 13, 2008, while Kuykendall was training two new employees who had been hired the previous week, he was monitoring the sales consultants' phone calls with customers. Kuykendall noticed that plaintiff's phone had a busy signal for several minutes. He also noticed that, although plaintiff was typing, plaintiff's computer screen was set to email, rather than the SIR system that sales consultants must use when recording information about each telephone call with a customer. Kuykendall believed the situation was unusual and asked the IT department to send him plaintiff's emails for review. Kuykendall discovered that plaintiff was missing entire months of records for email sent, even though it was against company policy for employees to delete these (doc. no. 38-1 at 34). In plaintiff's remaining emails, Kuykendall discovered that plaintiff had sent e-mails with subscriber and company information to his personal email address and had sent stock rankings ("Zacks Lists") to a former subscriber several times without authorization (
Specifically, on March 20, 2008 and April 4, 2008, plaintiff had sent contact information for former SIR subscriber Julius Adams to plaintiff's personal email address (doc. no. 45 at ¶ 22). On April 4, 2008, he had sent the contact information and birth date of SIR subscriber Tim Blodgett to his personal email address (¶ 23). On April 17, 2008, plaintiff had forwarded account information about SIR customer Rob Hillman to plaintiff's personal email address (¶ 25). Plaintiff had also sent SIR progress reports, consultant activity reports, and sales commission reports to his personal email in 2008 (¶ 29). Kuykendall also discovered that plaintiff had asked Chris Prybal in SIR's quantitative analysis department to send him "Zacks Lists" (lists of the best and worst stock profitability rankings) and "Sales Commentaries" on August 6, 11, and 12, 2008. In turn, plaintiff had forwarded that information via email to former SIR subscriber Julius Adams (doc. no. 45 at ¶¶ 30, 32, 33).
Kuykendall reported his findings to Senior Vice President of SIR, Denise Wilson (doc. no. 45 at ¶ 41). Wilson considered plaintiff's acts to be clear-cut violations of company policy (doc. no. 38-1 at 16). With the approval of Bernie Schaeffer (owner of SIR), she decided to fire plaintiff that day, August 13, 2008 (¶ 44). Wilson informed plaintiff that he was terminated for violating SIR's Non-Disclosure Agreement and Email Policy (¶ 45). Wilson would not discuss details with him. Despite being fired for cause, plaintiff sought unemployment compensation.
At a subsequent unemployment hearing, Wilson testified that plaintiff was terminated for violating company policy, for unauthorized use of company data, and for breach of the Non-Disclosure Agreement (doc. no. 38-1 at 10, Transcript). She explained that it was common knowledge within the company that client information was confidential. She explained that the investment information that plaintiff had sent to Adams for free was also confidential, was for internal use only, was not in finished form for use by SIR customers, and moreover, when in proper publication form, would be "the kind of information that we charge for" (doc. no. 38-1 at 11-15). She explained that this subscription typically cost $995.00 (
Although plaintiff claims that the Zacks Lists did not indicate they were confidential (doc. no. 33 at 10, Green Dep. at 37, line 2 ), Wilson testified that the Zacks Lists indicated on their face that the information was "for internal use only" (doc. no. 38-1 at 14). Wilson testified that people in the sales department did not have access to this information (
After his termination, plaintiff obtained a "right to sue" letter and timely filed this federal lawsuit, alleging that his employer had terminated him due to age discrimination. After discovery concluded, defendant moved for summary judgment. The Magistrate Judge recommended that plaintiff had failed to establish a prima facie case of age discrimination. Additionally, the Magistrate Judge recommended that, even assuming a prima facie case, the employer had articulated legitimate nondiscriminatory reasons for plaintiff's termination (i.e., his multiple violations of SIR's Email Policy and Non-Disclosure Agreement), but that plaintiff had failed to show that these reasons were merely a pretext for age discrimination. Plaintiff filed objections, defendant responded, and additional briefs were filed. This matter is ripe for consideration.
Rule 56(a) of the Federal Rules of Civil Procedure provides in relevant part:
Rule 56(c)(1) further provides that:
Under Rule 56, the moving party bears the initial burden of showing the absence of a genuine dispute of material fact.
The Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. § 621 et seq., provides that an employer may not "discharge any individual ... because of such individual's age." 29 U.S.C. § 623(a)(1). Similarly, Ohio Rev. Code § 4112.02(A) prohibit an employer from discharging any individual because of his age. The same evidentiary framework applies to claims under the federal and Ohio statutes.
A plaintiff may establish an age discrimination claim by either direct or circumstantial evidence.
"Circumstantial evidence, on the other hand, is proof that does not on its face establish discriminatory animus, but does allow the factfinder to draw a reasonable inference that discrimination occurred."
If plaintiff fails to make a prima facie case based on circumstantial evidence, the employer is entitled to summary judgment. If plaintiff establishes a prima facie case, the employer can overcome the prima facie case by articulating a legitimate, nondiscriminatory reason for the adverse employment action.
At the fourth step of the prima facie case, plaintiff objects to the Magistrate Judge's recommendations that 1) plaintiff did not show he was "replaced" by a substantially younger person; or 2) that he was treated less favorably than any "similarly situated" substantially younger employees (doc. no. 51 at 6-10). Plaintiff also contends (inaccurately) that the Magistrate Judge recommended that "that the Sixth Circuit has not adopted the `flexible' approach to the establishment of a prima facie case" and therefore objects (
It is undisputed that plaintiff (1) is over forty years of age; (2) was terminated; and (3) was qualified for his job as a sales consultant (doc. 38 at 3, "SIR assumes that Green can satisfy the first three elements of the prima facie case"). The parties argue at step (4) of the analysis. The Magistrate Judge recommended that plaintiff had not established a prima facie case of age discrimination because plaintiff did not show that he was "replaced" by a substantially younger employee or that he was treated less favorably than any "similarly situated" substantially younger employee. Plaintiff objects and points out that the defendant "hired two young employees on August 8, 2008 who were in the process of being trained when plaintiff was terminated on August 13, 2008" (doc. no. 51 at 1).
The Magistrate Judge correctly recommended that plaintiff has not shown that he was replaced, much less that he was replaced by a substantially younger employee. Although plaintiff contends that five of six employees terminated in the June 2008 restructuring were over the age of forty (
In an attempt to show he was "replaced," plaintiff points to some statistical evidence regarding the firing of some older workers and the hiring of some younger workers that year. Although plaintiff contends that some younger employees were hired at various times in 2008, the Magistrate Judge correctly points out that these employees were hired
The Magistrate Judge correctly noted that plaintiff's supervisor, Jason Kuykendall, testified at deposition that plaintiff was not replaced and that there was "zero connection" between plaintiff's termination and the previous hiring of any employees (doc. no. 48 at 11; Kuykendall Dep. at 49, lines 12-22). All of the "substantially younger" employees referred to by plaintiff were hired
The Magistrate Judge aptly pointed out that plaintiff had cited no case where a court had "permitted a plaintiff to use this type of statistical analysis to show that he was `replaced' by a younger employee in a case where the plaintiff was fired `for cause,' and not during the period of restructuring" (doc. no. 48 at 12). Plaintiff's statistical evidence is also problematic because, as the Magistrate Judge correctly observed, it involves only a very small sample size and incomplete data (
Plaintiff also complains that his claim of age discrimination under Ohio law was not "separately" addressed (doc. no. 51 at 7). Plaintiff argues that under Ohio law, the fourth step can be met by showing that the termination of a protected-age employee allowed the retention of a substantially younger employee. This objection fails for the simple reason that the record is completely devoid of any evidence that plaintiff's termination allowed the retention of a younger employee. The Magistrate Judge fully discussed the plaintiff's faulty arguments regarding the RIF evidence and plaintiff's termination for cause (doc. no. 48 at 10-12). The Court notes that plaintiff offered the RIF statistics in an attempt to raise an inference that SIR held older employees in disfavor, not to show that plaintiff's discharge allowed retention of a younger employee. Plaintiff has shown no error in the Magistrate Judge's analysis on such basis.
At the fourth step, plaintiff also contends that he was "similarly situated" to Chris Prybal (age 31), but that he was treated more harshly, i.e, he was terminated for the "same" conduct. The evidence, however, belies such contention. As the Magistrate Judge correctly discussed, plaintiff has pointed to no "similarly situated" employee who repeatedly violated SIR's Email and Non-Disclosure policies and was not terminated (doc. no. 48 at 16). Plaintiff and Prybal were not similarly-situated as they worked in different departments and committed different acts. The Magistrate Judge correctly pointed out that plaintiff and Prybal held very different jobs (i.e. plaintiff was a sales consultant, whereas Prybal was an analyst in the quantitative research department, with no customer contact), and that they committed substantially different infractions (i.e. Prybal emailed some information in-house to a co-worker, whereas plaintiff sent multiple external emails to himself and to a former subscriber). Plaintiff sent himself confidential client information and sent a former subscriber ("friend") some investment profitability rankings for free. Prybal did not do this. Plaintiff committed numerous infractions, whereas Prybal sent only a few in-house emails. The Magistrate Judge appropriately recommended that plaintiff has not shown that Prybal's misconduct was "as serious as his own" (doc. no. 48 at 16). Plaintiff's objection to the Magistrate Judge's analysis at step four is meritless.
Having failed to establish a prima facie case, plaintiff further objects that "even if plaintiff was not replaced, and even if Prybal was not similarly situated to plaintiff, "the attendant circumstances present sufficient evidence to establish a prima facie case" (doc. no. 51 at 10). Plaintiff relies on a case that is readily distinguishable, as it involved actual statements by management indicating that the company wanted to "shed low performers" to make way for "new younger" growth.
The Court observes that the plaintiff's characterization of the Magistrate Judge's recommendation is inaccurate. Plaintiff objects on the basis that the Magistrate Judge purportedly recommended that "the Sixth Circuit has not adopted the `flexible' approach to the establishment of a prima facie case" (doc. no. 51 at 6). In fact, the Magistrate Judge actually recommended that "Plaintiff's theory is insufficient under existing Sixth Circuit case law to show that he was replaced by a younger worker" (doc. no. 48 at 13)(citing
Similarly, in the present case, plaintiff's circumstantial evidence is insufficient to establish a prima facie case under the applicable framework or under the "attendant circumstances" urged by plaintiff. As evidence, plaintiff depends largely on questionable inferences drawn from limited statistics from a prior RIF and some new hires in the months prior to plaintiff's unrelated termination for cause. This is insufficient to avoid summary judgment. "The mere existence of a scintilla of evidence in support of the [plaintiff's] position will be insufficient; there must be evidence on which the jury could reasonably find for the [plaintiff]."
Although the Court of Appeals for the Sixth Circuit recognizes that "the McDonnell Douglas test should not be formalistically applied," the test does apply.
As plaintiff has not established a prima facie case, it is unnecessary to proceed further. However, as the plaintiff has also objected to the Magistrate Judge's analysis of "pretext," the Court will consider those objections as well.
Even supposing that plaintiff had made a prima facie case, the defendant has articulated a legitimate non-discriminatory reason for plaintiff's discharge, i.e. his multiple violations of SIR's Email Policy and Non-Disclosure Agreement. The burden of production then shifts to plaintiff to show that the employer's stated reason was merely a pretext for age discrimination. A reasons is pretextual if it: 1) had no basis in fact; 2) did not actually motivate the employer's decision; or 3) was insufficient to warrant the decision.
Under the heading of "no basis in fact" and "insufficient to motivate the termination," plaintiff generally objects to the Magistrate Judge's recommendation that plaintiff did not make either showing (doc. no. 51 at 14). The Magistrate Judge pointed out that the employer had cited plaintiff's multiple breaches of the Email Policy and Non-Disclosure Agreement as the reason for his immediate termination (doc. no. 48 at 21, citing doc. no. 45 at ¶¶ 12-14, 22, 26, 32). The Magistrate Judge correctly pointed out that the plaintiff
Although it is undisputed that plaintiff sent the emails and information, he disputes whether the information was "confidential" and whether his acts violated company policy (doc. no. 45, ¶¶ 15, 21, 25, 29, 30, 33, 36, 40, 42, 43). The Magistrate Judge fully addressed this in considerable detail. In his objections, plaintiff continues to deny that he violated any policies (doc. no. 51 at 14). He claims he had "no reason to believe that the items in question were confidential" (
Even viewing the evidence in the light most favorable to plaintiff, he admittedly sent stock profitability rankings (i.e. Zacks Lists) to Julius Adams several times. Plaintiff has acknowledged that SIR customers generally had to pay for this kind of proprietary information (doc. no. 33-1 at 3-4 "I sold Zacks to customers who basically had that trading package . . ."). Plaintiff's supervisor, Kuykendall, testified that it was "common knowledge within the company" that such information was confidential and proprietary (doc. no. 38-1 at 34). Kuykendall testified that he had never authorized plaintiff to send this information to a subscriber (
Wilson also testified that plaintiff had transmitted customer information from a "print screen" page from the subscriber database which indicated at the top that it was "Confidential and Proprietary," but that it appeared plaintiff had cut off that line when he transmitted those pages (doc. no. 38-1 at 10-13). With or without an express designation of confidentiality, Wilson testified that all such proprietary company information was confidential (
Plaintiff acknowledges that the stock ranking information he sent to Adams was not in final form for customers (doc. no. 38-1 at 41 "it was raw data"). The Non-Disclosure Agreement plainly states that: "Divulging to anyone investment recommendations or possible investment recommendations of the Company before publication is prohibited" (doc. no. 33-2 at 23, ¶ 3). Plaintiff's employer reasonably believed that plaintiff had also violated the Non-Disclosure Agreement on this basis. Both the Email Policy and Non-Disclosure Agreement expressly warned that violation could result in termination.
Given that plaintiff had been sending client information to his personal email, the employer reasonably believed that plaintiff had violated the terms of SIR's Email Policy. Plaintiff admitted sending subscriber data to his personal email. Plaintiff did not seek permission to send such information outside the company (doc. no. 38-1 at 49-50). Although plaintiff contends he did not believe he needed permission to send customer account information to his personal email, the Magistrate Judge appropriately pointed out that "an employee's professed ignorance that his behavior constituted a violation does not mean that the violation did not occur" (doc. no. 48 at 22). Although plaintiff argues that he did not disclose the subscriber data to any third parties, his argument misses the mark. His employer reasonably believed the plaintiff's transmission of confidential subscriber information to an external email address violated SIR's Email Policy.
In considering the stated reason for discharge, a court considers whether the employer gave an honest explanation for its decision, not whether the employer's decision is correct or fair.
The United States Supreme Court has explained that "a reason cannot be proved to be a `pretext for discrimination' unless it is shown both that the reason was false, and that discrimination was the real reason."
Under the heading "actual motivation for termination" (the second prong of
Plaintiff attempt to downplay his violations by characterizing them as "innocuous" or "inconsequential." The Magistrate Judge appropriately rejected plaintiff's contention that his purportedly "innocuous" behavior should have been addressed with counseling, rather than termination (doc. no. 48 at 26). In any event, plaintiff's characterization of his own conduct and his subjective beliefs are insufficient to show that the reason for his termination was a pretext for age discrimination. Plaintiff merely speculates that age must have been a "determining factor" in his termination because "why would you treat somebody like this if that wasn't the factor?" (doc. no. 33 at 16, Green Dep. at 61, lines 15-24). Plaintiff's speculation provide no basis to withstand summary judgment. See, e.g.,
The Magistrate Judge discussed the evidence of record showing that SIR fired plaintiff for violating its policies and that SIR took these company policies regarding confidentiality quite seriously. For example, the Magistrate Judge aptly observed that SIR's litigation against a former employee (Chris Johnson) for misappropriation of confidential information "demonstrates the seriousness with which Defendant viewed the policies that it determined Plaintiff had violated" (doc. no. 48 at 24).
Plaintiff acknowledged that he knew was not allowed to send "any internal email to customers" (doc. no. 53-1, Green Dep. at 48, lines 12-14). Although plaintiff quibbles about a typographical error in the quotation of this testimony, namely, the defendant and Magistrate Judge's reference to "an" email instead of "any" email, the this minor discrepancy is inconsequential. Defendant points out that plaintiff's admission regarding
Plaintiff also complains, without adequate explanation, that the Magistrate Judge "reviewed the evidence in isolation rather than as a whole" (doc. no. 51 at 19). He then rehashes all his arguments regarding the statistical evidence from the June 2008 restructuring and any new hiring in 2008 in an effort to show that the defendant "seized on this opportunity to terminate plaintiff" (
In conclusion, plaintiff's circumstantial evidence is insufficient to establish a prima facie case. Moreover, plaintiff has not shown that the employer's legitimate non-discriminatory reason for his termination (i.e. multiple violations of company policies) was merely a pretext for age discrimination. Plaintiff's objections to the Magistrate Judge's analysis of pretext are without merit.
Local Rule 7.1(b)(2) provides that courts have discretion whether to grant requests for oral argument. The parties have extensively briefed the issues and have not requested oral argument. The Court finds that the pleadings and exhibits are clear on their face and that oral argument is not warranted here.
Accordingly, the Court OVERRULES the plaintiff's objections (doc. no. 51);
This case is
IT IS SO ORDERED.