MEMORANDUM AND ORDER
This case presents a dispute concerning the termination of plaintiff's employment as president of one of the defendant corporations, Fire Control, Inc. Plaintiff's amended complaint asserts three basis for liability: age discrimination; breach of employment contract, and intentional infliction of emotional distress. Defendants have moved for summary judgment on all three counts.
In deciding a motion for summary judgment the court must determine whether the moving party has carried its burden of showing that there are no genuine issues of material fact and that it is entitled to judgment as a matter of law. See Hollinger v. Wagner Mining Equipment Co., 667 F.2d 402, 405 (3d Cir. 1981). All reasonable inferences from the evidentiary material of record must be drawn in favor of the nonmoving party. Small v. Seldows Stationery, 617 F.2d 992, 994 (3d Cir. 1980). A response to a properly supported summary judgment motion may not rest upon the allegations of the pleading but must present, by affidavit or otherwise, specific facts sufficient to create a genuine issue of material fact. Fed. R. Civ. P. 56(e); Sunshine Books, Ltd. v. Temple University, 697 F.2d 90, 96 (3d Cir. 1982).
In the present case, defendants are corporations engaged in the fire control sprinkler industry: The Williard Company (Williard); Fire Control, Inc. (FCI); Fire Protection Industries (FPI), and Worsham Sprinkler Company, Inc. (Worsham). During the time relevant to this case, Williard owned all the stock in FCI, and FCI was the parent company of both FPI and Worsham.
Plaintiff, Steven A. Madreperla (Madreperla) had been the president of FPI before it was acquired by Williard. FCI was set up by Williard to oversee the operations of both FPI and Worsham. Madreperla was given a five-year contract as president of FCI.
During the summer of 1981, new management took control of Williard and its subsidiaries. Bernard Jourdan became president of Williard in November 1981. There was a considerable degree of friction between Madreperla and Jourdan concerning the operation of FCI, FPI and Worsham. Eventually, Madreperla's employment was terminated, and he brought this action.
I. Age Discrimination Claim
The Age Discrimination in Employment Act (ADEA) makes it unlawful for an employer "to discharge any individual or otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's age." 29 U.S.C. § 623(a)(1). To recover under the ADEA, a plaintiff must prove by a preponderance of evidence that age was "a determinative factor" in the employer's decision. See Smithers v. Bailar, 629 F.2d 892 (3d Cir. 1980). Plaintiff need not prove that age was the employer's sole or exclusive consideration but must prove that "age made a difference" in that decision. Id. at 898.
A plaintiff can establish a prima facie case of age discrimination using statistical information, direct evidence of discrimination and/or circumstantial evidence. Miller v. General Electric Co., 562 F. Supp. 610 (E.D. Pa. 1983). A prima facie case can be established by showing: (1) that the plaintiff was within the protected age group; (2) that the plaintiff was qualified for the position; (3) that the plaintiff was removed from the position; and (4) that the position was filled by a younger person. Smithers, 629 F.2d at 894-95. These guidelines are borrowed from the Supreme Court's Title VII decision in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802, 36 L. Ed. 2d 668, 93 S. Ct. 1817 (1973).
If the plaintiff succeeds in establishing a prima facie case, the burden shifts to the employer "to articulate some legitimate, nondiscriminatory reason for the employee's rejection." Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 253, 67 L. Ed. 2d 207, 101 S. Ct. 1089 (1981). If the defendant satisfies that burden of production, the inference or presumption of discrimination dissolves, and the plaintiff must satisfy its burden of persuasion by convincing the trier of fact that (1) a discriminatory reason actually motivated the employer or (2) the employer's proffered explanation is unworthy of credence. Miller v. General Electric Co., 562 F. Supp. at 617; see also Blackwell v. Sun Electric Corp., 696 F.2d 1176 (6th Cir. 1983).
Simply establishing a prima facie case is not necessarily sufficient to survive a summary judgment motion. The prima facie showing establishes a presumption which is destroyed upon defendant's satisfaction of its burden of production. Reeves v. General Foods Corp., 682 F.2d 515 (5th Cir. 1982). "The initial evidence introduced to support the prima facie case may or may not be adequate, after the presumption has disappeared, for a jury to draw a permissible inference of intentional discrimination." Id. (citing Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 255, 67 L. Ed. 2d 207, 101 S. Ct. 1089 n.10 (1981)).
In the present case, defendants claim that plaintiff has not established a prima facie case of age discrimination. They claim that Madreperla was not removed from his position and replaced by a younger person. Rather, they assert that Madreperla's position was effectively eliminated and that he refused the offered replacement position.
There is no dispute that Madreperla is in the protected age group or that he was qualified for the position he held. Plaintiff asserts he was removed from his position as president of FCI when he received a letter of termination on June 2, 1982, and that his duties were taken over by newly appointed presidents for FCI and FPI and a vice president of Williard; namely Robert Rambo, Joseph Doody and Ed Caplan, all of whom are significantly younger than Madreperla. Defendants characterize plaintiff's termination differently. They claim that labor disputes and Jourdan's policy of retrenchment to reduce losses made it necessary for FCI to cease its function of controlling the operations of FPI and Worsham. Consequently, defendants "eliminated the essence of the FCI presidency" and offered the successor position, the presidency of FPI, to Madreperla.
Defendant's evidence bears on the motivation for Madreperla's termination, not on the adequacy of plaintiff's prima facie showing. Madreperla was removed from his position by defendants, and he has submitted sufficient evidence to find that he was replaced by younger persons. Whether Madreperla's "position" is viewed formalistically (as the presidency of FCI) or functionally (as responsibility for the operation of FCI, FPI and Worsham), there is sufficient evidence to find that the prima facie case has been established.
Moreover, despite defendants' evidence that there were legitimate business reasons for Madreperla's discharge, they are not entitled to summary judgment on the ADEA claim. Plaintiff has submitted sufficient evidence to create an issue of fact whether age was "a determinative factor" in the decision to discharge.
In addition to the evidence bearing on the prima facie case, plaintiff has presented circumstantial and statistical evidence of age discrimination. Plaintiff has submitted handwritten memoranda and notes and one oral statement of Bernard Jourdan indicating consciousness of and concern about the age of management personnel. Although this evidence by itself is of doubtful weight, see Stendebach v. CPC International, Inc., 691 F.2d 735 (5th Cir. 1982), cert. denied, 461 U.S. 944, 103 S. Ct. 2122, 77 L. Ed. 2d 1302 (1983), it must be taken in conjunction with all of the evidence of record and every inference must be drawn in favor of the plaintiff on the motion for summary judgment. Plaintiff has also submitted evidence that, shortly after new management took over Williard, Larry Shprintz, president of Williard, and George Meany, president of PSG,
were also replaced by younger people. In addition, plaintiff claims that of thirteen individuals in the officer/manager category of employment at FCI, FPI and Worsham only two are above the age of forty.
Defendants vigorously contest the significance of all of this evidence. Taken as a whole with every inference drawn in plaintiff's favor, the evidence creates an issue whether age was a determinative factor in Madreperla's discharge. Defendants are not entitled to summary judgment on the ADEA claim.
II. Contract Claim
Madreperla had a five-year employment contract as president of FCI that was due to expire on June 1, 1986. He was discharged from employment on June 2, 1982. Despite these undisputed facts, defendants seek summary judgment on the contract claim. They assert two basis for summary judgment: first, that Madreperla breached the contract and released defendants from any obligations; and second, that the contract claim is barred by the doctrine of frustration of purpose.
A. The "Best Efforts" Clause
Madreperla's contract required him "to use his best efforts" in carrying out his duties as president of FCI. It further provided that he could be discharged for cause upon "failure . . . to perform or observe any of the terms or provisions of [the] Agreement." Defendants claim that Madreperla failed to use his best efforts in carrying out his duties as president and, therefore, that they were permitted under the contract to discharge him.
Whether someone has used his best efforts in carrying out his duties is an inherently factual determination depending on all of the circumstances. Cf. Commonwealth Department of Property & Supplies v. Berger, 11 Pa. Commw. 332, 312 A.2d 100 (1973) (whether there is a basis for dissatisfaction with performance of a contract is properly a question for the finder of fact). See generally Lowell v. Twin Disc, Inc., 527 F.2d 767, 771-72 (2d Cir. 1975) (noting that the issue whether plaintiff satisfied "best efforts" provision of contract was submitted to jury). On the basis of the evidence of record, defendants are not entitled to summary judgment on grounds of breach of contract by the plaintiff. Plaintiff has submitted substantial evidence indicating that he satisfied the "best efforts" clause. Such evidence includes Madreperla's eight-page memo of December 4, 1981 to Jourdan answering point-for-point each of the concerns raised by Jourdan and various other memos from Madreperla memorializing his activities, directing action from his subordinates and reporting to his superiors. See Exhibits E and F in the Appendix to Plaintiff's Brief Contra Defendants' Motion for Summary Judgment.
B. Frustration of Purpose
The defendants assert that Madreperla's contract claim is barred by the doctrine of frustration of purpose. That doctrine is defined in the Restatement (Second) of Contracts § 261 (1979):
Where, after a contract is made, a party's performance is made impracticable without his fault by the occurrence of an event the non-occurrence of which was a basic assumption on which the contract was made, his duty to render performance is discharged, unless the language or the circumstances indicate the contrary.