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MURPHY v. GENERAL ELEC. CO.

January 16, 2003

FELIX J. MURPHY, PLAINTIFF,
v.
GENERAL ELECTRIC COMPANY, DEFENDANT.



The opinion of the court was delivered by: David R. Homer, United States Magistrate Judge

MEMORANDUM-DECISION AND ORDER

Plaintiff Felix J. Murphy ("Murphy") brought this action under the Age Discrimination in Employment Act (ADEA), 29 U.S.C. § 621; the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq.; and New York state law alleging in three causes of action that he was transferred and then terminated from his employment with defendant General Electric Company ("GE") because of his age. Am. Compl. (Docket No. 14) at ¶¶ 21, 24-26, 29-30. Murphy seeks declaratory and injunctive relief as well as compensatory and punitive damages. Id. at pp. 10-11. Presently pending are GE's motions (1) to preclude the testimony of Murphy's expert witness (Docket No. 33), and (2) for summary judgment pursuant to Fed.R.Civ.P. 56(b) (Docket No. 41). For the reasons which follow, both motions are granted in part and denied in part.*fn1

I. Background*fn2

The facts are set forth herein in the light most favorable to Murphy as the non-movant. See Section III(A) infra.

Murphy was born on August 24, 1937. On April 27, 1981, Murphy commenced work for GE. Murphy Aff. II (Docket No. 50) at ¶ 1. One year later, then age forty-four, Murphy's employment was terminated. Murphy Dep. I (Docket No. 55, Ex. 18) at 124-25. Murphy filed a complaint with the Equal Employment Opportunity Commission (EEOC) alleging that he was terminated because of his age. Murphy Dep. I at 125. In 1983, at age forty-five, GE rehired Murphy after settling his EEOC complaint and transferred Murphy to Schenectady to work in Power Systems. Murphy Dep. I at 125. Thereafter, Murphy received raises, promotions and favorable evaluations and became an executive-level employee. Murphy Aff. I (Docket No. 55, Ex. 6) at ¶¶ 3, 6; Pl. Exs. P-T; Def. Ex. 10 (Docket No. 55); Jenis Aff. (Docket No. 42) at ¶ 11. At age fifty-two, Murphy was promoted to manager of the Parts Center under the supervision of Donald Jenis. Jenis Aff. at ¶ 14; Def. Ex. 10. In November 1992, Jenis became the manager of the Generator Manufacturing Department and Ellen Smith became Murphy's new manager. Jenis Aff. at ¶ 12.

In March 1994, the Outsourcing Initiative was created with Jenis as its manager. Jenis Aff. at ¶ 17; Dell Orfano Aff. at ¶ 6. This project sought to reduce costs by obtaining components for Power Systems products from manufacturers outside GE rather than manufacturing those components within GE. Jenis Aff. at ¶ 17. The project was expected to take twelve to eighteen months. Id. Smith suggested that Jenis recruit Murphy for Outsourcing. Id. at ¶ 30. Smith told Murphy that he could transfer to Outsourcing or be terminated. Murphy Aff. I at ¶ 8. Murphy complained to Richard Baker, Human Resources Manager, that he was being transferred because of his age. Murphy Aff. I at ¶ 10. Baker told Murphy to take the position and not to worry because it was for five years and Murphy could then retire at age sixty-two. Murphy Aff. I at ¶ 10. Baker also told Murphy that Murphy had no choice but to move to Outsourcing. Id. On June 7, 1994, Jenis hired Murphy, then age fifty-six, to work in Outsourcing. Jenis Aff. at ¶ 30; Murphy Aff. I at ¶ 11, Ex. D.

Employees at GE received rankings for "promotability" on a scale of 1-5 with 1 being the highest ranking. Murphy Aff. II at ¶ 6. Employees were also ranked for "performance" on a scale of A-C with A being the highest ranking. Id. A code of 3-B or lower meant that an employee was not promotable. Id. at ¶¶ 6, 31; Smith Dep. at 50. Prior to August 1994, Murphy had a promotability code of 2. Murphy Aff. II at ¶ 6; Pl. Ex. B. Murphy always received satisfactory or excellent performance reviews. Murphy Aff. II at ¶ 6; Pl. Exs. P-T. On or about August 2, 1994, Murphy learned that he had received a performance/promotability code of 3-B. Murphy Aff. II at ¶ 6, Ex. C. Of the twelve employees in Outsourcing, eleven were age forty or older ("older employees") and eight were given a performance/promotability code of 3-B, . Pl. Ex. G-1.

On June 30, 1995, Robert Dell Orfano formally notified Murphy in writing that Murphy's employment was being terminated as part of the RIF. Def. Ex. 10. On the same day, Murphy's termination date was further extended to August 31, 1995. Murphy Aff. I at ¶ 2. On August 18, 1995, Murphy's termination was suspended until May 3, 1996. Murphy Aff. I at ¶ 2; Bassett Aff. at ¶ 37. Murphy's employment was finally terminated effective November 8, 1996. Murphy Dep. I at 172-73. Murphy received one year of "protected service" and was finally terminated effective November 7, 1997 at age sixty. Murphy Dep. I at 173.

After Murphy received the initial notice from Jenis of his termination, Murphy applied for fifty-seven jobs with GE. Pl. Exs. I, J, K; Def. Exs. 29, 32-33.*fn3 Of the fifty-seven jobs, four were canceled, one was filled by a younger person before Murphy sent his application, nine were filled by younger employees, four were filled by persons of an unknown age and eight were filled by persons of unknown identities and ages. Def. Exs. 29-30, 33. There was no information provided regarding the other thirty-two applications. Murphy complained to GE that he was being discriminated against because of his age. Murphy Aff. I at ¶ 15. Murphy was told that once an employee reached age fifty-five at GE, there were no longer any jobs available. Murphy Aff. I at ¶ 15. On May 6, 1996, Murphy commenced employment at another company where he remained until July 13, 1999. Murphy Dep. II at 374, Def. Ex. 28. Murphy also filed a complaint alleging age discrimination with the EEOC, which found that reasonable cause existed to support Murphy's complaint. Pl. Ex. C. This action followed.

II. GE Motions to Preclude

A. Murphy's Expert Report

GE moves to preclude the reports and testimony of Murphy's expert witness, Dr. Harriet Zellner, concerning statistical analyses on the ground that the reports do not satisfy the requirements for relevance or reliability established by Daubert v. Merrell Pharm., Inc., 509 U.S. 579 (1993), and its progeny. Docket No. 36. GE contends that Dr. Zellner's reports used inappropriate methodology, did not indicate if the results were for a disparate treatment or disparate impact claim, and failed to account for non-discriminatory reasons for any variances.

Under Fed.R.Evid. 702, an expert witness' testimony is admissible "if (1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case." A district court is charged with the "task of ensuring that an expert's testimony both rests on a reliable foundation and is relevant to the task at hand." Daubert, 500 U.S. at 597; see also Kumho Tire Co. v. Carmichael, 526 U.S. 137, 141 (1999).

Dr. Zellner first performed a statistical analysis for the 1995 terminations at Power Systems. Zellner Report I (Docket No. 35, Ex. B). The analysis compared the 2,813 active exempt employees with the 259 employees selected for termination. Id. at 1-2, Table 2. Dr. Zellner concluded that 59.2% of the workforce were older but that older employees accounted for 70.3% of those terminated in the RIF. Id. at 4, Table 1. This 11.1% disparity is likely to occur by chance once in 1,000 times. Id. at 4-5. Dr. Zellner concluded that there is less than a 5% probability that age was related to termination by chance. Id. at 5. Dr. Zellner then analyzed the terminations by division within Power Systems. Zellner Report I at 5, Table 2. Dr. Zellner concluded that age was a statistically significant factor in termination decisions when controlling for division. Id. at Table 2. Finally, Dr. Zellner analyzed the terminations by education level in addition to division and concluded that age was a statistically significant factor. Id. at 7, Table 3. This sufficed to satisfy the minimum requirements for relevance and reliability. GE's motion to preclude on this ground is denied.*fn4

Dr. Zellner also performed a statistical analysis of the 1996 terminations at Power Systems. Zellner Report II (Docket No. 35, Ex. C). Dr. Zellner analyzed the 2,660 active exempt and non-exempt employees. Id. at 1. Dr. Zellner also included the list of ninety-three exempt employees who received a termination notice in 1996. Id. at 1. Dr. Zellner admitted that there were inadequacies in the population used and that the results would have been different had she been able to identify and exclude non-exempt employees from her analysis. Id. at 2. Dr. Zellner also could not analyze by division and education in connection with the 1996 terminations. Furthermore, Dr. Zellner found that 62.8% of the employees were older but that such older employees represented 69.8% of the terminated employees. Id. at 5, Table 1. This was not statistically significant. Id. at 6, Table 1. Dr. Zellner did not analyze any other variables in this analysis. Id. Thus, this report was based on insufficient data or facts and fails to meet the requirements of Fed.R.Evid. 702. GE's motion to strike as to those opinions is granted.

B. EEOC Determination

GE contends that the EEOC determination is inadmissible. GE contends that the probative value is outweighed by the danger of unfair prejudice because the EEOC findings are undercut by the evidence of record. GE Reply (Docket No. 53) at 7-8. Murphy contends that the EEOC report is highly probative of the ultimate issue and should be considered. Pl. Mem. of Law at 7-14. It is within the discretion of the district court whether to admit employment agency findings. Paolitto v. John Brown E & C, Inc., 151 F.3d 60, 64 (2d Cir. 1998). The finding of the EEOC will be considered on this motion.

C. Murphy's Affidavit

D. Hearsay

Finally, GE contends that Murphy may not rely on inadmissible hearsay to support his opposition to GE's motion for summary judgment. GE Reply at 6-7. Specifically, GE contends that any statements by GE's Chief Executive Officer, Jack Welch, and statements by Ellen Smith, Murphy's manager, to Walter Foster and Gary Hankin are inadmissble. A party may rely on inadmissible hearsay to oppose a motion for summary judgment upon a showing that the evidence will be available at trial. Burlington Coat Factory v. Esprit De Corp., 769 F.2d 919, 924 (2d Cir. 1985).

Welch's statements were videotaped. Harder Aff. (Docket No. 49) at ¶ 2. Such statements are admissions and are not hearsay. See Fed.R.Evid. 801(d)(2). Foster made a statement to the EEOC that Smith told him that she must terminate older employees. Pl. Ex. E (Docket No. 52); Murphy Aff. II at ¶ 9(a). This statement is an admission and not hearsay if offered through Foster. Hankin's statement to Murphy that Smith told him that she intended to replace Murphy with a younger person because Murphy was too old is likewise admissible as an admission through Hankin. Murphy Aff. II at ¶ 9(b), Murphy Dep. II (Docket No. 55, Ex. 19) at 204. Both Foster and Harkin are subject to subpoena and are, therefore, presumptively available to testify at trial.

GE's motion to preclude evidence of these ...


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