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Dreyer v. ARCO Chemical Co.

argued: April 28, 1986.

DOROTHY E. DREYER AND NAOMI D. STRAYER, APPELLEES
v.
ARCO CHEMICAL COMPANY, A DIVISION OF ATLANTIC RICHFIELD COMPANY, APPELLANT



On Appeal from the United States District Court for the Western District of Pennsylvania (Pittsburgh), D.C. Civil No. 83-2001

Author: Sloviter

Before: SLOVITER and STAPLETON, Circuit Judges, and LONGOBARDI, District Judge*fn*

SLOVITER, Circuit Judge.

ARCO Chemical Co. challenges a jury's decision that it violated the Age Discrimination in Employment Act, 29 U.S.C. §§ 621-34 (ADEA), when it terminated the employment of two long-term employees, plaintiffs Naomi Strayer and Dorothy Dreyer. It further contends that there was no evidence to support the jury's finding that its conduct as to Dreyer constituted a "willful" violation of the ADEA, entitling her to double damages.

I.

During a corporate reorganization in 1981 and 1982, ARCO consolidated the sub-units of one of its divisions, and as a consequence reduced the size of its work force at its Beaver Valley plant in Monaca, Pennsylvania. One of the departments of the plant affected by this reduction in force was the Financial Controls Department, which ARCO decided to reduce from 26 employees to 18. Plaintiffs Dreyer and Strayer were both employees in this department, and, according to ARCO, both were terminated as a result of the restructuring. Each had been offered the possibility of voluntary retirement under a special retirement plan applicable to employees over fifty-five years of age, neither volunteered to accept the company's offer, both were then terminated, and, only then, did they accept early retirement under protest. ARCO does not contend that their acceptance of the early retirement benefits precludes them from exercising their rights under the ADEA.

Dreyer and Strayer filed suit together, claiming that ARCO's termination of their employment violated the ADEA and that the violations were intentional and willful. The jury returned a verdict for both plaintiffs. Based on the parties' stipulation as to damages, it awarded $66,043.99 in backpay to Strayer and $68,367.75 to Dreyer. In addition, the jury found that ARCO's discharge of Dreyer was "malicious" by so stating on its verdict sheet and awarded her statutory liquidated damages in the amount of her backpay for total award of $136,725.50. See 29 U.S.C. § 626(b). The district court denied ARCO's motions for judgment notwithstanding the verdict and a new trial.

On appeal, ARCO's principal argument is that the evidence is insufficient to support a finding that it violated the ADEA with respect to the two plaintiffs, or, failing that, to support the jury's finding that it had acted "maliciously" or "willfully" in discharging Dreyer.*fn1

II.

A.

Sufficiency of the Evidence to Support the Verdict

ARCO's principal argument on appeal is that it came forward with legitimate, nondiscriminatory reasons for retiring Dreyer and Strayer and that neither plaintiff proved that these reasons were pretextual. Preliminarily, ARCO also contends that Strayer did not establish a prima facie case of age discrimination.

The ADEA broadly proscribes discrimination against any individual between 40 and 70 with respect to "compensation, terms, conditions, or privileges of employment, because of such individual's age." 29 U.S.C. § 623(a); see id. § 631(a). To recover, "a plaintiff must prove by a preponderance of the evidence that age was a determinative factor in the employer's decision." Berndt v. Kaiser Aluminum & Chemical Sales, Inc., 789 F.2d 253, 256 (3d Cir. 1986).

The order and allocation of proof in an ADEA case alleging disparate treatment on the basis of circumstantial evidence is governed by the three-part division set forth in McDonnell-Douglas Corp. v. Green, 411 U.S. 792, 36 L. Ed. 2d 668, 93 S. Ct. 1817 (1973), for Title VII cases. See Smithers v. Bailar, 629 F.2d 892, 894 (3d Cir. 1980). Under this scheme, the plaintiff must first prove a prima facie case. Then the burden of production shifts to the defendant to articulate a legitimate, nondiscriminatory reason for the plaintiff's discharge. If the employer meets this burden, the plaintiff must show that the articulated reason is a pretext for discrimination.*fn2 At all times, the plaintiff bears the ultimate burden of proving that age was "a determinative factor" in the decision. See Texas Department of Community Affairs v. ...


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