LYTLE v. MALADY
Case Details
- Citation
- 456 Mich. 1
- Judge(s)
- Mallett, C.J., concurred with Riley, J.; Kelly, J., concurred with Cavanagh, J.; Weaver, J., concurred with Boyle, J.; Weaver, J., concurred with Brickley, J., only with respect to the discussion of age and sex discrimination.
- Procedural Posture — the stage the case had reached
- appeal
- State
- Michigan
Related Laws
No specific laws identified for this ruling.
Claim Types
Outcome
Michigan Supreme Court affirmed in part and reversed in part the Court of Appeals decision. The court held that plaintiff could have a legitimate expectation of just-cause employment based on the employer's policy manual, and that plaintiff raised genuine issues of material fact regarding age and sex discrimination claims, but the decision was split among the justices on the contractual and discrimination components.
Excerpt
LYTLE v MALADY Docket No. 102515. Argued January 16, 1997 (Calendar No. 16). Decided July 31, 1997. Rehearing granted post, 1202. Nancy Lytle brought an action in the Muskegon Circuit Court against Michael Malady, her supervisor, and Howmet Corporation, her employer, after she was discharged from her employment, alleging breach of a contract providing for termination of employment for just cause only, and age and sex discrimination. Howmet asserted that the discharge was the result of a company-wide reduction in its work force. The court, R. Max Daniels, J., granted summary disposition for the defendants on all counts. The Court of Appeals, D. E. Holbrook, Jr., EJ., and Murphy and J. C. Kingsley, JJ., reversed (Docket No. 157627). The defendants appeal. In an opinion by Justice Riley, joined by Chief Justice Mallett, an opinion by Justice Cavanagh, joined by Justice Kelly, an opinion by Justice Boyle, joined by Justice Weaver, and an opinion by Justice Brickley, the Supreme Court held: Even when an employer’s decision to reduce its work force is determined to be bona fide, an employee still may establish a genuine issue of material fact that the employer’s justification for the discharge was not the true reason for its decision. In order to establish a genuine issue of material fact when an employer contends that its decision to discharge the employee was based on a work-force reduction, a discharged employee may not rely merely on unsubstantiated allegations or denials in the pleadings, but, rather, must come forward with admissible evidence, affidavits, or other evidentiary materials, demonstrating the existence of a factual dispute that the employer’s articulated reason was merely a pretext to discrimination. 1. Employment contracts for an indefinite duration are presumed to be terminable at the will of either party. To overcome the presumption, any verbal assurances or statement of policy and procedure regarding job security must be clear and unequivocal. A just-cause policy may be changed unilaterally to one of employment at will by giving reasonable notice to all affected employees. In this case, the method of notification instituted was not reasonably calculated to uniformly assure awareness of the change from termination only for just cause to employment at will for all the affected employees. Thus, the plaintiff’s legitimate expectation of just-cause employment was left undisturbed. 2. A reduction in work force for economic reasons constitutes termination for just cause; however, layoffs that are conducted must be bona fide, i.e., necessitated by business conditions. To establish a genuine issue of material fact that the employer’s decision was not bona fide, the employee may not rely merely on unsubstantiated allegations or denials in the pleadings, but, rather, must come forward with admissible evidence, affidavits, or other evidentiary materials, demonstrating the existence of a factual dispute. 3. The plaintiff’s relief, if any, rests in the Civil Rights Act. Under the act, to survive a motion for summary judgment, once an employer articulates a legitimate, nondiseriminatory reason for laying off a plaintiff, the plaintiff must introduce sufficient evidence to support two findings: that the employer’s articulated reason for laying off the plaintiff is a pretext, and that the true reason is discriminatory. Under some circumstances, a plaintiff may not need to introduce additional evidence because the plaintiff’s prima facie case may establish that the employer’s articulated reason for its adverse employment action is a pretext and, in so establishing, the plaintiff may have created a question of fact regarding whether the true reason is discriminatory. A plaintiff will not always present a triable question of pretext simply by disputing the employer’s stated reasons. Simply disproving the employer’s articulated reason will suffice if, and only if, disproving the employer’s reason also proves discrimination. In other instances, simply disproving an employer’s articulated reason will not establish discrimination, and the plaintiff would then have to introduce additional evidence. In all actions involving claims of discrimination, there must be evidence upon which reasonable minds could conclude that discrimination was the true motive for the employer’s adverse conduct against the plaintiff. That there may be a triable question of falsity does not necessarily mean that there is a triable question of discrimination. 4. The plaintiff need not show that age was the determining factor in the defendant’s decision to discharge her; rather, she need only prove that it was a determining factor. Despite the defendant’s claim that it based its decision on economic necessity, the plaintiff produced evidence that would permit reasonable persons to conclude that age more likely than not was a determining factor in the adverse employment action the defendant took against the plaintiff. This evidence suggests that the defendant’s reason for discharging the plaintiff was only a pretext for favoring the younger hirees over the older plaintiff. 5. Viewing the evidence in a light most favorable to the plaintiff and drawing every reasonable inference in her best regard, the plaintiff created a genuine issue of material fact whether the defendant considered her sex in its decision to discharge her. Justice Cavanagh, joined by Justice Kelly, concurring in part and dissenting in part, stated that it is premature to decide whether defendants’ alleged reduction in work force was bona fide because it is clear that discovery in this matter was not complete. Thus, remand to the trial court is required for the completion of discovery and to afford the plaintiff an equal opportunity to present further evidence. In order for a defendant to show that it discharged a plaintiff for bona fide economic reasons, it must demonstrate that adverse business conditions existed and that the elimination of the plaintiff’s position was necessitated by those conditions. Where a plaintiff’s proofs show that the elimination of the position was not motivated by the alleged reduction in work force, but rather by some other illegal reason, summary disposition should be precluded. Justice Boyle, joined by Justice Weaver, concurring in part and dissenting in part, stated that the plaintiff is not entitled to assert a legitimate expectation of just-cause employment where the handbook on which she relies disclaims any intent on the part of the employer to bind itself to the contents of the handbook. In conjunction with the disclaimer of contractual obligation, the policy language is insufficient to overcome the presumption of at-will termination. If the disclaimer were found to be inapplicable because it does not expressly mention plaintiff’s department, then the entire handbook must be found inapplicable. Because the plaintiff did not present evidence sufficient to raise a triable issue of fact that her position would not have been eliminated but for her age, summary disposition for the defendant was appropriate. Justice Brickley, concurring in part and dissenting in part, stated that summary disposition of the wrongful-termination claim was properly awarded to the defendant. Justice Weaver joined Justice Brickley to further state that the lead opinion’s finding with respect to the discrimination claims misapplies the governing law regarding the discrimination claims, and oversimplifies the facts of a complex case. Essentially, it allows a plaintiff to overcome summary disposition if the plaintiff can identify anyone who has less seniority, receives greater compensation, and does not share in the plaintiff’s characteristics. Apparently, it is now irrelevant if the retained person’s job was different than that held by the plaintiff or if that person was qualified for the job. The lead opinion second-guesses the employer’s decisions on the basis of its assumptions concerning which employee was more qualified. Affirmed in part and reversed in part. 209 Mich App 179; 530 NW2d 135 (1995) affirmed in part and reversed in part. Bott & Spencer, P.C. (by Timothy J. Bott), for the plaintiff. Vamum, Riddering, Schmidt & Howlett (by Joseph J. Yogan and Paul M. Kara) for the defendants. Riley, J. In the matter now before us, this Court is asked to clarify the evidentiary threshold a discharged employee must satisfy in order to create a genuine issue of material fact when an employer asserts that its decision to discharge an employee was precipitated by business conditions. We are also asked to decide whether a discharged employee may challenge an employer’s decision to reduce its work force charging discrimination, even when the reduction in work force (rif) decision has been deemed bona fide. We hold that even when an employer’s rif decision is concluded to be bona fide, an employee may still establish a genuine issue of material fact that the employer’s justification for discharging him was not the true reason for its decision to discharge. We also hold that in order for a discharged employee to establish a genuine issue of material fact when an employer contends that its decision to discharge the employee was based on a work-force reduction, the employee may not merely rely on unsubstantiated allegations or denials in the pleadings. Rather, he must come forward with admissible evidence, affidavits, or other evidentiary materials, demonstrating the existence of a factual dispute that the employer’s articulated reason was merely a pretext to discrimination. In the instant case, we conclude that defendant’s policy statement could have reasonably created a legitimate expectation of just-cause employment. We also conclude that defendant did have just cause to reduce its work force as a matter of law, but not with respect to this plaintiff. Rather, we hold that plaintiff did sufficiently establish a genuine issue of material fact regarding whether age was a determining factor in defendant’s decision to discharge her. We also conclude that plaintiff presented evidence sufficient to establish a genuine issue of material fact regarding whether defendant considered her sex in its decision to discharge her. We affirm the decision of the Court of Appeals finding that plaintiff could have reasonably had a legitimate expectation of just-cause employment. We also affirm its ruling that plaintiff raised a genuine issue of fact with respect to whether defendant discriminated against her on the basis of her age, as well as its decision concluding that plaintiff raised a genuine issue of material fact regarding her claim of sex discrimination. FACTS AND PROCEEDINGS On January 29, 1973, plaintiff Nancy Lytle was hired by defendant Howmet Turbine Components Corporation as a general clerk in its human resources department, which at that time served all divisions making up the Whitehall operation. Plaintiff received a manual containing a statement of defendant’s policies and procedures regarding employment. In the section containing defendant’s policy regarding the relationship it sought with each of its employees, defendant expressed that a probationary period existed that afforded it time to decide whether it was in its interest as well as the employee’s interest to continue the relationship following the probationary period. In that same section, the manual also stated that “[n]o employee will be terminated without proper cause or reason and not until management has made a careful review of all facts.” The last two paragraphs of the manual stated: The contents of this booklet are not intended to establish, and should not be interpreted to constitute any contract between the Misco Whitehall Division, Product Support Operations, Reactive Metal Operations or the Technical Center of Howmet Turbine Components Corporation and any employee, or group of employees. For over twenty years we have concentrated on the production of the finest investment castings, with the development of policies and principles which aim at the attainment of pride in every day’s work for every employee, plus the satisfaction of finding opportunities for individual growth and security. [Emphasis added.] In 1981, defendant placed a disclaimer in its policy manual: “[T]he Company reserves the right to terminate employees without assigning cause; therefore, the employee serves at the will of the employer.” Direct notification of the disclaimer was provided only to new employees, but plaintiff was involved in placing the disclaimer in new employee manuals. At the time of plaintiffs hiring, John Ozar was the human resources director, serving as her immediate supervisor. Under Ozar’s supervision, plaintiff received exemplary performance evaluations and was rewarded with a succession of promotions. In 1979, plaintiff spoke with Ozar about resigning and seeking employment elsewhere. Ozar assured plaintiff that her employment with defendant was secure and that she could expect advancement. Soon after that conversation, plaintiff was promoted to employment manager of the entire human resources department. Additionally, about the same time, Ozar hired Walter Boczkaja. Boczkaja became plaintiffs subordinate trainee. For approximately two years, Boczkaja trained under plaintiff, receiving promotions to various positions within the personnel department, and continued to be one of plaintiffs subordinates until 1989. During the 1984-85 fiscal year, Ozar retired and was replaced by William Roof. In March 1987, Roof determined a need to decentralize the human resources department. He planned for each of the Whitehall divisions to have its own human resources representative. Roof hired defendant Michael Malady to head the Whitehall Machined Products Division and to serve as plaintiffs supervisor. Plaintiff was reassigned to serve as human resources representative for defendant’s Ti-Ingot Division. A personality conflict between Malady and plaintiff soon developed. In June 1987, Malady requested all female employees under his supervision to wear dresses to a company picnic. Plaintiff wore slacks. Shortly thereafter, in September 1987, Malady submitted an unfavorable evaluation of plaintiffs job performance. In January 1989, on Malady’s recommendation and with Roof’s approval, plaintiff’s job title was changed from human resources representative to human resources specialist. Plaintiff’s duties, as well as her salary, remained the same. Malady suggests that the change was necessary to reduce the number of direct reports he had to address, in addition to “centraliz[ing] the total employment function under one person instead of having it split with two different people doing part of it.” He also asserts that he had “some performance concerns . . . with [plaintiff’s] supervisory abilities],” as reflected in his latest performance evaluation. Plaintiff held her new position from January 1989, until her discharge on November 1, 1991. Plaintiff contends defendant’s policy manual created an expectation that her employment would not be terminated unless there was sufficient cause to do so. Also, she claims that she relied on verbal assurances by Ozar that her employment with defendant was secure. Defendant argues that plaintiff was terminated pursuant to a company-wide reduction in work force. Defendant asserts that as a result of declines in military spending and a downturn in the commercial airline industry between 1988 and 1991, it was forced to institute a series of reductions in its work force. Defendant suggests that it initially sought to cut costs in the 1992 budget without terminating any employees. In an August 21, 1991, intracompany memorandum to all the personnel support departments, Dr. Thomas Wright, vice president in charge of the Whitehall operations, directed all department supervisors to cut their respective 1992 budgets by fifteen percent. At the same time reductions were being sought, defendant was embarking on a plan that would use work cells as the primary facility structure, where employees would be working in teams instead of in the traditional hierarchical order. Notwithstanding the fact that he had to eliminate fifteen percent of his projected 1992 budget, Roof was told by the Operhall management to somehow compile a list of employees from the human resources department to head an independent department. From that list someone was to be selected to oversee the development of the work-cell plan. After reviewing the qualifications of those listed, Operhall management identified Malady and Boczkaja as the two most promising candidates. Malady was not available and Boczkaja, who was interviewed by Operhall management, later decided to stay on in his current position. Then Roof went to the private sector and found Andrea Achterhoff. She was thirty-one years old and had previous experience as a production supervisor, personnel manager, and human resources manager. Plaintiff never was interviewed for the position. By November 1, 1991, in an effort to comply with Wright’s mandate, Roof had eliminated approximately $300,000. Roof needed to cut $439,950 in costs in order to meet Wright’s directive of a fifteen-percent reduction in expenditures for the human resources department’s 1992 operating budget. Roof eliminated four positions in the human resources department, which included two plant medical staff, the employee assistance program assistant, and plaintiff’s position as human resources specialist. Roof contended that in terminating these four individuals, he focused on “functions” rather than “individuals or relative qualifications.” He suggested that the decision was based on who was absolutely critical and what they could get by without. Roof claimed that he terminated plaintiff because the primary function of her position involved hourly employees, where a substantial portion of the reduction in work force had already occurred, and the fact that little, if any, hiring was forecasted in the near future. The same day plaintiff was discharged, defendant hired Jeff Billingsley to work in the training program for the work-cell project. As far as plaintiff understood, Billingsley “worked for the corporate office” and was merely assigned to take an office where plaintiff previously worked so that he would have a place to work. Moreover, plaintiff admitted that she had no idea how Whitehall’s operation budget and personnel were allocated among all the Pechiney subsidiaries. On November 22, 1991, Boczkaja completed a final performance evaluation on plaintiff, which Malady accepted, indicating that she would be rehired in the event a nonsupervisory, administrative position became available. When plaintiff was finally discharged, her duties were assigned to other persons within the human resources department. On January 7, 1992, plaintiff filed a complaint in the Muskegon Circuit Court against defendant How-met, alleging: (I) breach of a contract providing for termination for just cause only, (II) age discrimination, and (III) sex discrimination. Following some discovery, defendants Howmet and Malady moved separately for summary disposition pursuant to MCR 2.116(C)(10), which the circuit court granted on all counts. The Court of Appeals reversed, and this Court granted defendant’s application for leave to appeal. A motion for summary disposition under MCR 2.116(C)(10) tests whether there is factual support for a claim or defense. Adkins v Thomas Solvent Co, 440 Mich 293, 302; 487 NW2d 715 (1992); General Motors Corp v Detroit, 372 Mich 234, 239-240; 126 NW2d 108 (1964). The affidavits, pleadings, depositions, admissions, and other material supporting and opposing the motion must be considered, so that it may be decided whether “ ‘it is impossible for the claim or defense to be supported at trial because of some deficiency which cannot be overcome.’ ” Stevens v McLouth Steel Products Corp, 433 Mich 365, 370; 446 NW2d 95 (1989), quot
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