United States District Court, W.D. Pennsylvania
RUDOLPH A. KARLO, MARK K. McLURE, WILLIAM S. CUNNINGHAM, JEFFREY MARIETTI, DAVID MEIXELSBERGER, BENJAMIN D. THOMPSON and RICHARD CSUKAS, on behalf of themselves and all others similarly situated,  Plaintiffs,
PITTSBURGH GLASS WORKS, LLC, Defendant.
MEMORANDUM OPINION AND ORDER OF COURT
TERRENCE F. McVERRY, District Judge.
Pending before the Court is a MOTION FOR DECERTIFICATION OF THE PROPOSED COLLECTIVE ACTION (ECF No. 288) filed by Defendant Pittsburgh Glass Works, LLC ("PGW" or "Defendant") with a redacted (ECF No. 289) and a sealed (ECF No. 293) brief in support. Plaintiffs filed a brief in opposition (ECF No. 300); PGW filed a reply (ECF No. 307); and Plaintiffs filed a surreply (ECF No. 315). The factual record with regard to this motion has been thoroughly developed via the submission of PGW's redacted (ECF No. 290) and sealed (ECF No. 294) statement of facts and accompanying exhibits; and Plaintiffs' numerous appendices and attached exhibits. The Court heard oral argument on September 10, 2013. (ECF No. 342). Afterward, Plaintiffs filed a post-argument brief (ECF No. 337) with leave of Court (ECF No. 338); and PGW filed a memorandum in response (ECF No. 341) with leave of Court (ECF No. 340).
The Court also has the following six motions pending in this matter:
(1) PLAINTIFFS' RENEWED MOTION FOR LEAVE TO FILE SECOND AMENDED COMPLAINT (ECF No. 299) in which they incorporate by reference their earlier briefs in support of their prior motion for leave to amend (ECF Nos. 251, 255) and which PGW opposes (ECF No. 308);
(2) DEFENDANT'S MOTION TO BAR PROPOSED EXPERT TESTIMONY OF ANTHONY G. GREENWALD RELATED TO PURPORTED IMPLICIT SOCIAL BIAS (ECF No. 316);
(3) DEFENDANT'S MOTION TO BAR DR. CAMPION'S EXPERT OPINION ON REASONABLE HUMAN RESOURCE PRACTICES (ECF No. 317);
(4) DEFENDANT'S MOTION TO BAR DR. MICHAEL CAMPION'S STATISTICAL ANALYSIS (ECF Nos. 318, 321);
(5) DEFENDANT'S MOTION TO BAR EXPERT OPINION OF DAVID DUFFUS REGARDING THE O'DONOGHUE EXPERT REPORT (ECF Nos. 319, 322); and
(6) PLAINTIFFS' MOTION TO STRIKE MOTIONS TO BAR EXPERT TESTIMONY (ECF Nos. 323, 324) which PGW opposes (ECF No. 333); Plaintiffs have filed a reply brief (ECF No. 336).
The issues have been fully briefed and well-argued on behalf of the parties. Accordingly, the motions are ripe for disposition.
For the reasons that follow, the Court will grant in part and deny in part PGW's motion for decertification; grant in part and deny in part Plaintiffs' renewed motion for leave; and deny as moot and without prejudice Defendant's expert challenges and Plaintiffs' motion to strike the motions to bar expert testimony.
This case arises from the March 2009 reduction in force ("RIF") by PGW which resulted in the termination of approximately one-hundred of its salaried employees. The gravamen of the First Amended Complaint is that the terminations were the result of age discrimination.
Plaintiffs Rudolph A. Karlo, Mark K. McLure, William S. Cunningham, Jeffrey Marietti, David Meixelsberger, Benjamin D. Thompson, and Richard Csukas (the "Representative Plaintiffs") initiated this action against PGW on behalf of themselves and all others similarly situated. Eleven individuals were later permitted to opt-in to this lawsuit: Michael Breen, Matthew Clawson, Colleen Conway, John DeAngelis, Robert Diaz, Charles Fellabaum, Paul Marcelonis, Stephen Shaw, John Titus, Charles Voetzel, and Ronald Wickire (the "Opt-in Plaintiffs"). Of those eighteen party-plaintiffs, nine remain in this litigation: Representative Plaintiffs Karlo, McLure, Cunningham, Marietti, and Meixelsberger; and Opt-in Plaintiffs Breen, Clawson, Shaw, and Titus.
A. Factual Background
The following background is taken from the Court's independent review of the motions, the filings in support and opposition thereto, and the record as a whole.
1. The Formation and Corporate Structure of PGW
PGW was formed on October 1, 2008 from PPG Industries, Inc.'s ("PPG") auto-glass assets. PPG initially retained a forty-percent ownership in PGW; Kohlberg & Company ("Kohlberg"), a private equity firm, owned the remaining sixty-percent and later acquired the remainder of PPG's interest in the venture. James Wiggins, a Kohlberg principal, was named Chairman and CEO of PGW. Unless otherwise noted, the remaining PGW employees transitioned from PPG to PGW.
One of PGW's core businesses is the production of automotive glass to car and truck manufacturers as an original equipment manufacturer ("OEM"). Aside from OEM, PGW consists of GTS Services, a software business ("GTS"); PGW Auto Glass ("AG"), an automotive-replacement-glass distribution business ("ARG"); LYNX Services, an insurance claims administrator ("LYNX"); and Aquapel, a glass treatment supplier. At a corporate level in Pittsburgh, Pennsylvnia, PGW's business share departments for finance, IT, and Human Resources, functions previously filled by PPG and provided to PGW by contract during a transition period.
Each business is comprised of additional stand-alone operations. PGW operates the ARG business, run by President Marc Talbert, through a nationwide network of approximately ninety branch facilities, each of which employs truck drivers, managers, and other support staff. Those branches rely on customer service representatives employed by PGW at centralized call centers in Irving, Texas and Ft. Myers, Florida. LYNX, headed by General Manger Gary Eilers and Director of Service Solutions John Wysseier, provides outsourced insurance cell-center operations to insurance companies from its base of operations in Ft. Myers and another location in Paducah, Kentucky. Most of its employees work as customer service representatives. GTS provides software products and services to glass manufacturers and retailers from a single facility in Portland, Oregon. Most of it employees are programmers and developers.
2. The Decline of the Automobile Industry
Around the time that PGW was formed, General Motors, Ford, and Chrysler (the North American "Big Three") appeared before the United States Congress to request bailout funds. Given the direction of the industry and economic forecast, PGW took several steps to combat deteriorating sales: it closed two manufacturing facilities in Canada and another in Evart, Michigan; consolidated distribution systems; identified about $100-$200 million of necessary capital expenditures; reconfigured its distribution strategy; commenced process improvement actions; and undertook supply chain optimization. PGW also terminated the employment of roughly ten to twelve percent of its salaried workforce in early December 2008. The decision for this RIF-not the subject of this litigation-was made by Wiggins in consultation with his leadership team, forty-five to fifty persons in senior management positions at PGW. The decisions regarding which positions to eliminate were, however, left to the discretion of the individual directors who were assigned a targeted percentage by which they had to reduce their workforce.
PGW undertook several additional measures in early 2009 to meet the challenges of lower demand: it put hourly employees on temporary layoff; it operated its largest plant only four of the thirteen weeks in the first quarter; it trained leadership at each plant in Lean Six Sigma principles; it suspended merit salary increases; it implemented a hiring freeze except for critical positions; it suspended a 401k matching contribution program and bonuses; and cut salaries company-wide.
3. The March 2009 RIF
Kevin Cooney became Acting HR Director for PGW after the then-Vice President of Human Resources resigned from the company sometime in late-2008 or early-2009. Around mid-February 2009, Wiggins asked Cooney to take a "fresh look" at the organization and formulate a reorganization plan.
Cooney enlisted the assistance of a consultant, Ed Dunn, an organizational specialist to make recommendations regarding the restructuring of the company into a more lean and effective organization. Dunn later prepared an "Organization Assessment" presentation and a summary of his observations/recommendations, which Cooney reviewed before they were finalized. See Mem. from Dunn to Cooney, ECF No. 303-5. In his memorandum, Dunn noted that "[m]arket conditions continue to deteriorate and more cost reductions are required as soon as possible[, ] and this would include certain organization changes;" that "[i]t would not be efficient or effective at this time to undertake a formal or time-consuming organization study or process;" and that "[i]nstead, the Executive Team... would do an ASAP organization assessment and identify cost-saving organization structure changes to be made that are in addition to the changes and reductions already identified." Id. at 3. See also id. ("The mindset needs to be: Be bold and aggressive. Risk going too far, too fast... verses the opposite. We can revisit and re-load as needed when conditions and results improve.") (ellipses in original). These suggestions were not binding on PGW, and Dunn had no role in the decision-making process or implementation of later reductions.
By early-March 2009, PGW decided to conduct another RIF. See generally Dep. of Cooney, ECF No. 301-1 at 7 ("THE WITNESS: [I]t became clear that the target was going to be about a 30-percent reduction in jobs, not people, but jobs.... And it was to - to [Wiggins'] explanation was that, you know, that business was off 30 percent, plants, we're going to lose 30 percent of our plants and so forth."). Although this decision was made by Wiggins and upper management, the employees were again selected for termination on a decentralized basis.
More specifically, upper management relied on the individual directors of each functional unit to identify the work that needed to be done and the personnel that were necessary to perform that work. As Cooney recounted,
[t]he instructions were, what Jim Wiggins said is that we want to have an organization that we can, you know, it's going to be a small organization, but it's got to be one that we can do the work that must be done. So you get the best people that you can get, the people with the most experience and the breadth of experience and education and so forth to - to populate the company.
Dep. of Cooney, ECF No. 301-1 at 9. Cooney likewise cited "[e]ducation, background, breadth of experience, and so forth" when asked what the "general criteria" were in selecting employees for the RIF. See id. at 17.
PGW did not specifically train its directors with regard to the RIF or employ any written guidelines or policies as to how they were to conduct the RIF. The upper management instead issued a generalized directive for each department to cut a targeted percentage from their budget, a downsizing with which each unit director had to comply. See, e.g. , Dep. of Keith Holmes, [Plant Manager at the Evansville plant], ECF No. 290-13 at 6-7 ("Q. You were just told, essentially, you need to find a way to cut out 20 percent in SG&A [Sales, General and Administration] cost. A. That's generically the truth. That's exactly where we were, and how we got that done was sort of up to us. But you can only cut so many paper clips and different things before you, obviously, have to get to more meat of the issue.... Q. Who gave you that direction that you needed to cut 20 percent? Was that Mr. Stas [the then-Executive Vice President of Operations and COO at PGW] or Mr. Wiggins or both of them? A. That information came through Mr. Stas to me."); Decl. of David King [the then-Director of Enterprise Excellence & Quality], ECF No. 290-39 at 3 ("¶ 9. I did not receive any specific direction from upper management regarding any individual employees who should be terminated, but did determine that I would need to include headcount reductions to achieve the necessary savings."); Dep. of Mark Bulger, ECF No. 301-4 at 3-4 ("Q. Were you given any RIF guidelines for the March, 2009, RIF? A. No. The only instruction I received was we had to reduce one person that was under my supervision."). Thus, the unit directors in the company were afforded broad discretion in determining which of their reports to select for the RIF. See generally Decl. of Joseph Stas, ECF No. 290-2.
On March 31, 2009, PGW terminated approximately one-hundred salaried employees. This RIF affected over forty locations and/or divisions of PGW, including the sites in the OEM, ARG, and LYNX businesses at which the nine remaining party-plaintiffs worked. Moreover, as PGW highlights, the RIF impacted almost every part of the company with the widespread job cuts: forty-four from ARG at over twenty locations; twenty-four from OEM including individuals from Creighton, Pennsylvania, Crestline, Ohio, Evansville, Indiana Tipton, Pennsylvania and O'Fallon, Missouri plus seven from Manufacturing Technology, one from Satellite Engineering, and two from Enterprise Excellence; thirteen from ARG Truckload & Services; eight from the company's sales organization; and one from New Product Development. See PGW's Br., ECF Nos. 289 at 4. PGW also closed the Evart, Michigan plant on March 31, 2009, leading to the elimination of eighteen salaried employees.
As part of the RIF, a Human Resources employee of PGW with a long tenure at PPG, Diana Jaden, was tasked by Cooney to consolidate data from various locations and unit managers, calculate the amount of severance, identify those who were impacted, and prepare paperwork for the exit interviews. The paperwork included a cover letter that explained that the individual was being terminated and outlined the severance being offered; a "Separation Agreement and Release" that employees could sign to receive certain benefits in exchange for waiving their right to bring a claim against PGW; and two multipage documents with Decisional Unit Matrices ("DUMs") per the Older Workers' Benefit Protection Act ("OWBPA"). See Def.'s Answer to First Am. Compl., ECF Nos. 73-1; 73-2; 73-9.
4. The Terminations of the Remaining Party-Plaintiffs
Relevant here, six unit managers across five locations made the decisions to include the nine remaining party-plaintiffs in the RIF: Gary Cannon, Jason Skeen, Keith Holmes, Gary Eilers, John Wysseier, and Todd Fencak.
a. Cannon (Karlo, McLure, Cunningham, Marietti & Meixelsberger)
In early 2009, Cannon was the Director of Manufacturing Technology for PGW's Manufacturing Glass Technology Department ("Manufacturing Technology") in Harmarville, Pennsylvania at which the five remaining Representative Plaintiffs worked. See PowerPoint Presentation - Operations Organization Restructuring March 2009, Revised 3/25/09, ECF No. 290-7 at 36. Before the RIF, Manufacturing Technology was comprised of twenty-seven salaried associates. Compare id. (depicting the organizational structure of Manufacturing Technology before the RIF) with id. at 38 (depicting same after the RIF).
Six employees were selected by Cannon for termination in the RIF, which included Karlo, McLure, Cunningham, Marietti and Meixelsberger who were all part of his group. Cannon had worked with each of these individuals for many years at PPG and had full knowledge of their job-related skills, performance, and capabilities. See Decl. of Cannon, ECF knowledge with all of the technology people in his organization, and he alone was qualified to determine what, you know, what the technical - because the work was going to still be there."). According to Cannon, he did not receive any specific direction from upper management regarding how he was to arrive at his decisions or any assistance from other PGW employees with the exception of Jarden who only put together the severance packages for the terminated individuals.
Rather, Cannon contends that he objectively evaluated the group as a whole and independently decided to release certain employees based on the needs of his department. Cannon did not use a forced ranking for his department which was previously compiled with the support of his direct reports: Jim Willey; F.M. Hagan; Jim Schwartz, who supervised Cunningham; David Perry, who supervised Marietti; Phillip Sturman, who supervised Karlo and Meixelsberger; and Julie Bernas, who supervised McLure. Based on those rankings, Cannon testified that two other employees ranked lower than some of the plaintiffs, but that they were retained based on their specialized skills and knowledge which he deemed vital to his group.
Cannon further insists that he never considered the age of an employee in arriving at his decision. As compared to the Representative Plaintiffs, Cannon is older than Karlo, Cunningham and Meixelsberger and one to two years younger than Marietti and McLure-all of whom were in their fifties at the time.
Karlo began working for PPG in its automotive glass division in 1978 as a Construction and Maintenance Research Specialist II. Throughout his thirty-year career, he received several promotions: to Senior Technical Assistant in 1990, to Engineering Specialist in 1995, and finally to Senior Engineering Specialist in 2001, a position he held until his termination. His job duties included working in and later supervising the "mold shop" in which tools for bending glass are built. Karlo also helped to develop eight shared patents and received commendations, pay increases, and bonuses, as well as positive reviews in his annual employee evaluation process, referred to as the Performance & Learning Plan ("P&LP) at PPG. Compliance with the P&LP process waned at PPG in the three years before the RIF, particularly as the sale of its glass assets drew near. See Dep. of Cannon, ECF No. 301-12 at 3. PGW did not reinstitute the P&LP evaluation process, but earlier documents dating back to 1992 demonstrate that Karlo "meets" or "meets " expectations or "Exceeds Requirements."
Cannon testified that Karlo was terminated because most of his work was already being outsourced to other firms and that two other PGW employees could pick up his ongoing tasks. Those employees, Irv Wilson and John Bender, are both older than Karlo.
Karlo recalls that he questioned Cannon after the termination session as to why he was included in the RIF. Cannon allegedly responded that the retained employees were more "adaptable" and remarked that "we don't see you moving forward with the company as it moves forward." See Dep. of Karlo, ECF No. 290-43 at 3-4. Cannon claims that he does not remember the specifics of this conversation. See Dep. of Cannon, ECF No. 290-34 at 11-13. Nevertheless, from Karlo's perspective, these remarks demonstrate that Cannon and the other PGW managers charged with making the termination decisions "held age biases" and "acted with discriminatory intent in selecting Plaintiffs for termination."
Six months after the RIF, PGW rehired Karlo as a contract employee through a placement agency and assigned him to the Creighton facility. Karlo was terminated from that position in July 2010, allegedly at the behest of Vice President of HR Robert McCullogh in retaliation for filing an EEOC charge relating to the RIF.
McLure started his career with PPG as a contractor at the Glass Research & Technology Laboratory ("GRTL") in 1975 and became a full-time employee the following year. In 1980, McLure was terminated when PPG closed that facility. PPG rehired McLure in 1981 to work at its Fiberglass Research facility in O'Hara Township at which he was promoted to Senior Technician in 1990. PPG closed that facility in 1999 and slated McLure for a transfer to North Carolina. McLure instead pursued another opportunity within PPG at its Harmarville facility where he eventually rose to become Senior Technical Assistant. As an employee in this division, McLure was responsible for conducting validation testing, traveling to satellite facilities, and providing customer support and technical services at the facilities. Throughout his thirty-four-year career, McLure received positive P&LP evaluations, regular salary increases, bonuses and commendations and worked as a named contributor on a patent developed for PPG.
Much as with Karlo, Cannon testified that McLure was terminated because validation work was being outsourced to another facility and Wilson/Bender could take over McLure's ongoing tasks. Wilson is older than McLure; Bender is only months younger.
In April 2009, McLure returned to PPG through a third-party placement agency. Three months later, in July 2009, McLure was approached by a PGW employee to return to the company. McLure agreed and split his time between PPG and PGW as a contract employee until he was released from PGW in September 2010, ...