Ercegovich v. Goodyear Tire & Rubber Co.,
154 F.3d 344, (6^th Cir. (Tenn.) Aug. 31, 1998)

The plaintiff, Ercegovich, was 57 years old when Goodyear fired him. At the time of his termination, Ercegovich was a Quality Systems Coordinator in Human Resources Development in the Retail Sales Division of Goodyear. In 1994, Goodyear decided to eliminate Ercegovich’s position and transfer his duties to the District Managers. Ercegovich was told of the decision and offered retirement or recallable layoff status. Ercegovich retired so he could receive his pension and medical benefits. Goodyear later said that it had been willing to offer Ercegovich a transfer to another job. Ercegovich maintained that Goodyear told him that no positions were available. As part of the reorganization that displaced Ercegovich, two other jobs were eliminated. The incumbents of those jobs, aged 40 and 32, were transferred to other positions within the company. After accepting retirement, Ercegovich brought this suit.

The Plaintiff’s complaint raised two related but separate claims of age discrimination. First, Ercegovich claimed that his termination was not because of economic reasons, but because of his age. Second, he claimed that he was denied a transfer because of his age. The district court found that several age-based comments made by high-level Goodyear employees were irrelevant to the Plaintiff’s case. The district court granted Goodyear’s motion for summary judgment on both claims on the grounds that Ercegovich failed to establish a prima facie case of age discrimination. Alternatively, the district court said that, even if Ercegovich had made a prima facie case, he failed to show that Goodyear’s proffered explanation for the elimination of his position was pretextual. The Plaintiff appealed.

On review, the Sixth Circuit began by noting that age discrimination claims under the ADEA are analyzed under the McDonnell Douglas test. The Court of Appeals found that the Plaintiff had produced evidence adequate to satisfy the first three requirements of the prima facie case in that he was over 40, was qualified for his position, and had been discharged. The court noted that, when a person is claiming wrongful discharge because of age during a workforce reduction, that employee must show, as the fourth prong of the test, that she was singled out for termination because of her age.

For purposes of its analysis, the Sixth Circuit assumed that the Plaintiff had met his prima facie burden. The Court of Appeals focused on Goodyear’s non-discriminatory explanation for the elimination of the Plaintiff’s position and the Plaintiff’s evidence of pretext. The court found that Goodyear demonstrated that the Plaintiff’s position was redundant and inefficient. The Plaintiff responded that the proffered reason was pretextual and offered as evidence of that allegation the fact that Goodyear had been inconsistent in explaining its decision and had offered three different reasons for the elimination of the position: (1) economics, (2) restructuring, and (3) redundancy. The Sixth Circuit noted that the district court properly found no inconsistency among those assertions because they all revolved around the single idea that the Plaintiff’s position could no longer be justified as being cost-effective. That being the case, the Sixth Circuit affirmed the district court’s judgment on Ercegovich’s claim that he had been terminated because of his age.

The court next addressed the Plaintiff’s claim that he was not given an opportunity to transfer because of his age. The Sixth Circuit said that, although an employer is under no obligation to transfer an employee whose position has been eliminated, the employer cannot fail to transfer a displaced employee to a new position because of her age. The court noted that the fourth prong of the McDonnell Douglas test for claims of failure to transfer because of age requires a showing that a similarly situated person outside the protected class received more favorable treatment, or other evidence supporting an inference of discrimination.

Ercegovich claimed that at the time of his termination there were two positions open for which he was qualified and that Goodyear failed to offer him either one. The Plaintiff believed that his previous experience qualified him for these positions, which were later assumed by the younger employees who were transferred. The district court rejected this argument because it concluded that the plaintiff was not similarly situated to either of the two people who were transferred in that neither of them performed the same job functions as Ercegovich.

The Sixth Circuit disagreed, holding that the district court misconstrued the meaning of similarly situated. The court held that courts should make independent determinations as to the relevance of a particular aspect of a plaintiff’s job and that of the non-protected employee. The plaintiff need not demonstrate an exact correlation with the employee receiving more favorable treatment in order to be considered similarly situated.

The court went on to say that, when an employer makes selective offers of transfer following a reduction in force, differences in the job activities previously performed by transferred and non-transferred employees do not automatically constitute a meaningful distinction that explains the employer’s differential treatment of the two employees. The Court of Appeals held that, because Ercegovich and the two younger transferred employees all held related human resources positions that were all eliminated pursuant to the same workforce reduction, Ercegovich was similarly situated to the younger employees who were transferred. Thus, the plaintiff met the fourth prong of the prima facie case

With the prima facie case established, the Court of Appeals turned to Goodyear’s proffered reason for the differential treatment. Goodyear’s "proffered reason" was that it had in fact offered Ercegovich the opportunity to transfer to other positions within the corporation, but the Plaintiff was unwilling to relocate to another city. The burden then returned to Ercegovich to prove the reason was a pretext. The court ultimately felt that a jury could believe the Plaintiff’s version of the events. This conclusion was based in part on the fact that one human resources consultant employed by Goodyear testified that she informed the Plaintiff of the two open positions while another witness contradicted this testimony. Whether a jury chose to believe the Plaintiff or the Defendant would depend on the credibility of each party’s witnesses, and credibility determinations are for the jury to make. That being the case, the Court of Appeals reversed the district court’s judgment regarding the Plaintiff’s failure-to-transfer claim.

In further support of his age discrimination claim, the Plaintiff relied on several age-based statements made by persons occupying high positions in Goodyear’s Retail Sales division, including the Vice-President overseeing the entire division, Ed Gallagher. The Court of Appeals held that age-based comments are relevant only when the speaker is in a position to influence the employment decision. Since there was testimony that Ed Gallagher was involved in the discussions regarding the termination of the Plaintiff’s position, the Court of Appeals held that Gallagher’s statements would be admissible.

The court next held that to be admissible the comments must also not be overly vague, ambiguous, or isolated. Examining the comments of Gallagher and his staff, the Court of Appeals found that statements such as, "This company is being run by white haired old men and this has to change," and, "There will be some people losing their jobs but they will be replaced by college graduates for less money," were of sufficient specificity to be relevant to Ercegovich’s case. The Sixth Circuit, therefore, reversed the district court’s holding that the statements were of no evidentiary value.

- Back to Sixth Circuit Court Cases -