The opinion of the court was delivered by: CARTER
Background Facts and Issues
These are five actions commenced by individual plaintiffs -- Alfred Pirone, Charles A. Barker, Jr., Vito Ferrara, Daniel Guthrie and Charles Buchheit -- all former employees of defendant, The Home Insurance Co. ("Home"), alleging that their terminations violated the Age Discrimination in Employment Act ("ADEA" or "the Act"), 29 U.S.C. § 621 et seq. The five cases were consolidated for all purposes. On June 17 and 18, 1982, prior to proceeding to trial on the merits, an evidentiary hearing was held to determine whether Guthrie, Ferrara, Barker and Buchheit had met the statutory requirements permitting them to process their claims in this forum.
At the close of the hearing, the court dismissed Guthrie's and Ferrara's claims as untimely but held that Barker and Buchheit had met the ADEA jurisdictional requisites. Accordingly, their claims proceeded to trial on the merits along with those of Pirone.
The terminations of Pirone, Barker and Buchheit resulted from a change in command at Home. In February, 1978, Peter Huang became de facto chief executive of the company, although that title was not officially conferred on him until several weeks later. Nonetheless, he asserted his putative authority at once. Huang testified that when he took command of the company, he considered Home's operations inefficient and top heavy. He regarded the payroll as unduly burdensome and the overhead excessive. He disapproved of power being concentrated in New York and characterized as wasteful the committee system through which all the company's decision-making was accomplished before he took control. He abolished the committee structure immediately and took steps to transfer some operational and decision-making authority from New York to the field. Huang asked the senior officers to look at their departments to determine which of their operations could function just as efficiently and effectively with fewer employees. He testified that he set no guidelines because he thought the senior officers would know what yardsticks to use to comply with his directive.
In purported compliance with Huang's orders, Pirone and Barker were terminated by their superiors. The issue to be determined is whether their termination was based on valid non-discriminatory criteria or was motivated by considerations of age offensive to the Act.
Huang and Buchheit seem to have clashed from the outset. Huang asked Buchheit for an accurate head count of Home employees, was dissatisfied with the method Buchheit employed in getting the figures, and regarded the total Buchheit gave him as unreliable. Moreover, Huang was not happy with the personnel department, which was Buchheit's operation, and felt it had to be overhauled. In determining whether Buchheit's termination was legitimate or discriminatory, the court, unlike in the case of Pirone and Barker, cannot look to objective criteria alone. In light of the highest reaches of management which Buchheit occupied, the personal and subjective determination of Home's chief executive that Buchheit was not competently performing his duties and responsibilities cannot be discounted. Indeed, Huang's subjective evaluation concerning Buchheit, unless shown to be pretextual, insincere or irrational, may be sufficient in his case to defeat a charge of purposeful discrimination in this disparate treatment claim. Rogers v. International Paper Co., 510 F.2d 1340, 1345-46 (8th Cir.), vacated on other grounds, 423 U.S. 809, 96 S. Ct. 19, 46 L. Ed. 2d 29 (1975).
Plaintiffs' Employment and Termination
Alfred Pirone first became a Home employee on August 7, 1944. He worked as an examiner in the underwriting department for the bulk of his career with the company. He worked in various supervisory positions in the central processing department before being transferred to the systems department in 1973. He was released on April 14, 1978, without prior notice but remained on the payroll until July 31, 1978. At the time of his termination, he was 59 years of age and had been with Home for nearly 34 years of uninterrupted employment.
Charles Barker began his employment at Home on July 7, 1969. He served in the casualty administration, systems and policy administration departments before being transferred in December, 1976, to the personal lines underwriting department. Although he remained on the payroll until April 28, 1978, his employment at Home was terminated physically on April 21, 1978, without prior notice. He was 49 years of age when discharged and had not acquired vested pension rights at the time. Thus his loss of employment at Home is not cushioned by receipt of any pension benefits.
Charles Buchheit, Jr. began his employment at Home on June 1, 1949. He became an assistant secretary on December 1, 1959, and served thereafter as secretary, vice president and senior vice president. When he became vice president in 1972, he was assigned the position of personnel officer of the company. He was advised of his termination by Joseph Quinn, then senior vice president in charge of internal services. Buchheit was physically terminated on May 31, 1978, but remained on the payroll until December 31, 1978. Quinn testified that Buchheit had stated that he was going to retire at age 62. He was only 60 years old in 1978. Quinn arranged for Buchheit to receive monies from the company's corporate funds to supplement his regular pension benefits under the Home Retirement Plan. Under this arrangement, Buchheit, as of January 1, 1979, began to receive the same monthly payments to which he would have been entitled had he in fact retired at age 62.
Prior to being terminated, Pirone does not appear to have had any indication from his superiors that his work was unsatisfactory. However, Pirone's upward movement had stopped in 1972. Thereafter he was demoted from manager to senior expense analyst in 1972, and from senior expense analyst to senior analyst microfilm in 1973. When terminated, Pirone was assistant project coordinator in the claims redesign project unit. The unit was staffed by four employees -- Patricia Martini, who headed the unit, Pirone, Helena Grebis and Dolores Mangold. Both Grebis and Mangold were considerably younger than Pirone.
The decision to terminate Pirone was made by Edward Murray, vice president in charge of the systems department. Murray testified that he chose to let Pirone go because the unit could function adequately with two rather than three employees, and it was his belief that Pirone's termination would have the least impact on the unit's operational capabilities. He believed the two women retained had performed better and had greater future potential. In addition to these two women, a number of employees in other units in the systems department younger than Pirone were retained. Pirone was never offered the opportunity to accept one of the positions in which these younger employees were retained.
Barker, at termination, was a personal lines supervisor in the auto casualty unit of the personal lines underwriting department. Prior to April, 1978, Barker had had several confrontations with his supervisors for misinforming them about what had happened in the field and for disregarding explicit instructions. In December, 1977, he did an assigned risk audit in Philadelphia. Some of his criticisms were found to be invalid, and he was said to have been guilty of activities in connection with that assignment that violated company rules and regulations. In 1978, he was sent to a field office in New Jersey with specific orders not to get involved in the audit which was underway at that location. Disregarding these instructions, he interjected himself into the auditing process and criticized the manner in which the audit was being conducted. Thus, not only was Barker guilty of insubordination, but his supervisor testified that Barker's criticisms had no merit. Early in 1978, Barker scheduled an assigned risk audit of the Metropolitan field office although his superiors had given him specific instructions not to conduct any audits after the problems which resulted from his 1977 assignment in Philadelphia.
John J. Kennedy, an assistant vice president, was asked by Robert Sink, senior vice president in charge of the personal lines underwriting department, to determine what employees and positions could be eliminated with the least adverse impact on the operations of the department. At the time, three units were functioning in the department. Kennedy, after a conversation with David Brooks, Barker's immediate supervisor, and Vincent Buda, Brooks' boss, decided to let Barker go. Kennedy testified that he had taken the Philadelphia, New Jersey and Metropolitan field office incidents into account in deciding to terminate Barker. Moreover, he complained that Barker had spent time ...