Smith v. F.W. Morse CV-90-361-M 04/24/95 P UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Kathy Smith, Plaintiff,

v. Civil No. 90-361-M

F . W . Morse & C o ., Defendant.

O R D E R

This matter was tried before the court. Plaintiff, Kathy

Smith, brought breach of contract and sexual discrimination (42

U.S.C. § 2000e-2(k)) claims against her employer, F.W. Morse &

Co. The court dismissed plaintiff's breach of contract claim but

tried her discrimination claim. Plaintiff alleges that F.W.

Morse & Co. ("F.W. Morse") discriminated against her based on

pregnancy and an expressed intent to have additional children in

the future.

BACKGROUND

On December 23, 1988, F.W. Morse purchased Damar Plastic and

Metal Fabrications, Inc. ("Damar"). As a "contract

manufacturer," Damar built custom components for a variety of industries, including telephones, computers, and medical

instruments.

Plaintiff's brother started Damar, and she had been employed

there in various capacities since 1975. At the time of

defendant's acquisition, plaintiff served as Damar's schedular.

Her duties included tracking and expediting customer orders.

Soon after the acquisition plaintiff approached Christopher Bond

("Bond"), F.W. Morse's president, and informed him that she was

pregnant and would be requesting maternity leave. Bond assured

plaintiff that she would be given maternity leave and he assured

her that neither pregnancy nor maternity leave would cause her to

lose her job, and that she was considered a valued employee

performing a valuable function.

As the new owner, F.W. Morse naturally conducted its own

general assessment of Damar's operations and concluded that it

Damar was burdened with a highly inefficient management

structure. Led by Maryann Guimond ("Guimond"), who was brought

in as the new general manager, F.W. Morse almost immediately

embarked upon a complete overhaul of Damar's management

structure. Within a month Guimond eliminated the positions of

2 production and shipping managers, and promoted plaintiff to a

newly created position of "Materials Manager," to fill the void

created by the two managerial eliminations. As the new materials

manager plaintiff retained her scheduling duties, and took on

additional responsibilities for production/inventory control,

purchasing, shipping, and receiving. Plaintiff was awarded pay

raises of 13.3% in January and 11.11% in March, which increased

her weekly salary from $381.60 per week to $480.77 per week by

March of 1989.

Plaintiff met with Guimond in mid-March, before going on

maternity leave, at which time Guimond told her that she would be

promoted again upon her return, and that either Ron Paradise or

Marc Shevenell, mechanical and sheet metal experts respectively,

would be let go. Guimond also said that the Engineering Manager,

Gary Bickford, would likely be demoted. Guimond also asked

plaintiff to assume some of the Engineering Manager's duties upon

her return.

On April 7, 1989, plaintiff began her maternity leave. She

gave birth approximately two weeks later. Plaintiff originally

intended to resume work on Monday, May 22, 1989, however, on May

3 1, 1989, she visited the plant and asked Guimond if she could

return one week earlier than planned. Guimond approved the

earlier return date. During the course of that conversation,

Guimond asked plaintiff whether she planned to have additional

children. Plaintiff responded that she did. Guimond did not

indicate why she asked the question and she registered no outward

sign of pleasure or displeasure with plaintiff's response.

The following day, Guimond approached plaintiff's co-worker

(and sister), Karen Vendasi ("Vendasi"). Guimond also asked

Vendasi about plaintiff's plans to have additional children.

Vendasi was uncomfortable with the question and soon thereafter

telephoned plaintiff to let her know that Guimond had inquired

about her plans for future children. Vendasi also told plaintiff

of a rumor circulating among the employees that plaintiff was not

returning to work because she wanted to stay at home with her

children.

Plaintiff immediately called Guimond, demanding to know the

source of the rumor and whether her job was in jeopardy. Guimond

assured plaintiff that her job was secure and that she was

4 unaware of any such rumor. On May 4, 1989, plaintiff again saw

Guimond and received similar assurances.

One week later, on May 11, 1989, Guimond telephoned to tell

plaintiff that her job was going to be eliminated in a further

reorganization. Guimond asked plaintiff if she wanted people to

be told that she had unilaterally decided to stay home with her

infant child, rather than that she had been terminated.

Plaintiff refused to allow Guimond to tell the company's

customers the "story" that she decided to stay home. However,

soon thereafter Elaine Nadeau ("Nadeau"), one of defendant's

employees, did tell some customers that plaintiff had chosen to

remain at home with her child. Guimond asserted and the court

finds that Nadeau's comments were not authorized; that Nadeau

merely assumed that was the case; and that Nadeau received a

disciplinary warning as a result of her conduct.

The decision to eliminate plaintiff's job, and terminate her

employment was entirely Guimond's; she had the authority to hire

and fire without Bond's approval.

5 APPLICABLE STANDARD

Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e-

2, states in pertinent part:

(a) it shall be an unlawful employment practice for an employer (1) to fail or refuse to hire or to discharge an individual, or otherwise to discriminate against any individual with respect to his or [her] compensation, terms, conditions, or privileges of employment, because of such individual's race, religion, sex, or national origin . . . .

The 1978 enactment of the Pregnancy Discrimination Act (PDA)

amended the definitional section of Title VII, providing in part:

The terms "because of sex" or "on the basis of sex" include but are not limited to, because of or on the basis of pregnancy, childbirth, or related medical conditions shall be treated the same for all employment- related purposes . . . as other persons not so affected but similar in their ability or inability to work . . . .

42 U.S.C. § 200Oe(k) .

An employee plaintiff is not reguired to "identify the

precise causal role played by the legitimate and illegitimate

motivations in the employment decision she challenges." Fields

v. Clark University,

(1st Cir. 1992); guoting

6 Price Waterhouse v. Hopkins,

(1989). Instead

" [a] plaintiff can establish a violation of Title VII under a

'mixed motives' theory by showing that [gender] discrimination

played a role in the challenged employment decision. Tolefree

v. City of Kansas City, Mo.,

(8th Cir. 1993).

Upon proving gender played a motivating role in an

employer's decision, "the [employer] may avoid liability only by

proving by a preponderance of the evidence that it would have

made the same decision even if it had not taken the plaintiff's

gender into account." Price Waterhouse,

. At the

same time though "[a]n employer may not . . . prevail in a mixed-

motives case by offering a legitimate and sufficient reason for

its decision if that reason did not motivate it at the time of

the decision."

.

Job elimination is a legitimate reason for an employer to

terminate an employee. Employee's are legitimately terminated

where "'business considerations cause an employer to eliminate

one or more positions within the company.1" LeBlanc v. Great

American Insurance Co.,

(1st Cir. 1993);

(guoting) Barnes v. Gencorp, Inc.,

(6th Cir.

7 1990). Employee's, however, are not legitimately "'eliminated

as part of a work force reduction when . . . replaced after . .

. discharge.1"

While job elimination followed by

replacement hirings is impermissible, employer's may redistribute

the terminated employee's duties within the company. See

("A discharged employee 'is not replaced when another employee is

assigned to perform the plaintiff's duties in addition to other

duties, or when the work is redistributed among other existing

employees already performing related work.")

DISCUSSION

Under the Price Waterhouse analysis, the fact finder must

first decide whether plaintiff has proven that gender

discrimination was a factor in defendant's decision. See

If

so, the burden then falls upon the defendant to prove by a

preponderance of the evidence that plaintiff would have been

terminated without regard to gender considerations.

The evidence establishes that the downsizing of Damar's "top

heavy" management structure began immediately upon its

acguisition by F.W. Morse. Only four days after F.W. Morse took

over it eliminated the position of Control Manager. One month later the Shipping Manager's position was eliminated. Plaintiff

was assigned duties previously assigned to each of the eliminated

positions, and she in turn became the new Materials Manager.

As plaintiff's maternity leave approached, Guimond became

concerned that the daily operations of the plant would suffer in

her absence. Guimond was concerned, and was led by other

managers to believe, that plaintiff's maternity absence would

likely cause a serious disruption in the company's operations.

Conseguently, Guimond hired a new employee to handle plaintiff's

clerical duties, and she redistributed plaintiff's more

substantive responsibilities to Paradise and Shevenell. As

plaintiff left on maternity leave, the temporary managerial

structure consisted of the following people and positions:

Paradise (Operations Manager); Shevenell (Manufacturing Manager);

Michael Seeger (Sales Manager); Gary Bickford (Engineering

Manager).

Guimond met with managers regularly to insure that any

problems arising from plaintiff's absence were being addressed

and resolved. Both Paradise and Shevenell reported that there

were no problems. Guimond held similar meetings weekly during plaintiff's absence, at which similar determinations were made.

Realizing that nothing was falling through the cracks in

plaintiff's absence, and operations were not adversely affected,

Guimond saw an opportunity to further streamline the managerial

structure. Guimond decided to eliminate plaintiff's position,

terminate her employment and permanently redistribute her

managerial duties. That decision was based on her judgment that

the plant was able to operate and was operating efficiently in

plaintiff's absence.

Guimond's general and overriding goal was to overhaul the

entire managerial structure of F. W. Morse. Accordingly, Guimond

eliminated a position she determined the company could do

without. Plaintiff's duties, such as production control,

purchasing, inventory, shipping, and receiving, were in fact

redistributed to Ron Paradise ("Paradise"). Paradise had been

one of the two manufacturing managers, but his title was changed

to Operations Manager after plaintiff's position was consolidated

into his own. Guimond did not hire a managerial replacement to

fill plaintiff's position or one similar to it.

10 Guimond also eliminated the position of "Engineering

Manager" about the same time. Guimond came to the same

conclusion regarding that position; it was no longer needed and

other managers could handle those duties. Therefore by May of

1989, Guimond had eliminated four (4) managerial positions

leaving three managers in charge of operations, manufacturing,

and sales respectively. Reflecting the substantial reductions in

the managerial staff, Guimond also eliminated a number of general

employee positions.

Of the remaining managers, each had played an integral role

in the daily functioning of the plant. Their respective

expertise mirrored defendant's primary business functions:

manufacturing and selling guality products. The remaining

operations manager. Paradise, had served in a managerial capacity

since shortly after plaintiff's brother founded the company.

Defendant understandably placed a premium on his overall

manufacturing knowledge and technical skill.

Paradise was not only more experienced than plaintiff, but

he was also an expert machinist, responsible for the proper

functioning of the plant's manufacturing eguipment. Paradise'

11 salary, the highest among mangers, reflected the value placed on

his services by the company. Shevenell, the remaining

manufacturing manager, was also essential to the company's

operations. He had been employed since approximately 1978, and

was expert in sheet metal fabrication. He oversaw the actual

pressing, shearing, finishing, and assembly of sheet metal into

the various custom component parts produced by the company.

Michael Seeger, Sales Manager, was the other remaining manager.

His function, sales, was also essential, and did not overlap any

functions performed by plaintiff.

Under these circumstances, the court necessarily finds that

defendant has proven that legitimate business judgment motivated

the elimination of plaintiff's position and that redistribution

of her duties within the existing management structure occurred.

In terms of personnel management, Guimond's behavior was at best

indelicate and insensitive, and it certainly caused plaintiff to

be legitimately suspicious of the motivation behind her

termination. Still, Guimond's decision to eliminate plaintiff's

position, though hard-nosed and perhaps harsh, stemmed from her

conclusion that plaintiff's absence was not only manageable but

that the company could function efficiently without her. The

12 court finds that defendant's decision was motivated by business

judgment and represented an effort to economize by placing the

most gualified personnel in the fewest number of managerial

positions possible, and was not based on plaintiff's gender,

pregnancy, or her expressed desire to have more children.

Defendant has also demonstrated that even if Guimond is assumed

to have considered impermissible gender-based factors, the same

decision to eliminate plaintiff's position would still have been

made at the same time, for the business reasons described if

gender-based factors had not been considered.

That Guimond told plaintiff she intended to eliminate either

Paradise's or Shevenell's position while she was out on maternity

leave does not alter the result. Guimond was free to change her

mind as she realized that plaintiff's duties could be eliminated

without adverse conseguences to the company (plaintiff was an "at

will" employee). Paradise and Shevenell were the only remaining

managers who possessed comprehensive knowledge of both the

mechanical and manufacturing side of the business. Plaintiff's

skill on the other hand was in the field of expediting customer

orders that Paradise and Shevenell filled. Guimond concluded

(whether rightly or wrongly is of little conseguence here) that

13 Paradise and Shevenell could handle plaintiff's expediting,

purchasing, and inventory duties, while at the same time

overseeing the actual manufacturing process. Based on her

conclusion, Guimond was entitled to exercise her discretionary

authority to eliminate plaintiff's position without fear of

violating Title VII.

That the expendability of plaintiff's position was

discovered as a direct result of her being absent on maternity

leave also does not, by itself, convert an otherwise legitimate

business decision into gender-based discrimination. While

plaintiff's perception that Maryann Guimond discriminated against

her is entirely understandable and neither an unreasonable nor a

baseless perception, the evidence did establish that plaintiff's

job was eliminated for legitimate reasons, without regard to

whether plaintiff took maternity leave and without regard to her

future child bearing plans. This is not a case in which job

elimination was merely a pretext for discharging an employee

based on gender bias; the job was in fact eliminated, no one

replaced plaintiff, and her managerial duties were in fact

redistributed to remaining employees.

14 CONCLUSION

Defendant having proven by a preponderance of the evidence

that plaintiff's position was eliminated for legitimate business

reasons and that even assuming gender bias played a role in the

decision, the job still would have been eliminated if

consideration of plaintiff's maternity leave or her expressed

desire to have additional children were disregarded, judgment

shall be entered in favor of defendant.

SO ORDERED.

Steven J. McAuliffe United States District Judge

April 24, 1995

cc: Raymond P. Blanchard, Esg. Debra Weiss Ford, Esg.

15