Kern v. Kollsman CV-93-612-SD 02/09/95 P UNITED STATES DISTRICT COURT FOR THE

DISTRICT OF NEW HAMPSHIRE

Gabriel R. Kern

v. Civil No. 93-612-SD

Kollsman

O R D E R

In this civil action, plaintiff Gabriel R. Kern alleges a

federal claim of age discrimination in violation of the Age

Discrimination in Employment Act of 1967 (ADEA), Pub. L. No. 90-

202,

(codified at

, et sea. (1985))

and a common-law breach of employment contract claim against

defendant Kollsman, a division of Segua Corporation.1

The court's jurisdiction, premised upon the federal guestion

raised, envelops the supplemental state-law contract issue as

well.

, 1367(a).

Presently before the court is defendant's motion for summary

Plaintiff's complaint included a third count for loss of consortium filed on behalf of Pearl Kern, plaintiff's wife. On January 20, 1994, defendant filed a Rule 12(b)(6), Fed. R. Civ. P., motion contending that loss of consortium damages were not recoverable either under the ADEA or in a breach of contract action by an individual not a party to the contract. The court granted said motion by margin order on March 15, 1994. judgment, to which plaintiff objects.

Background

Kollsman is a defense, avionics, and medical equipment

manufacturer with its principal place of business located in

Merrimack, New Hampshire. Affidavit of Ronald H. Wright 5 3

(attached as Exhibit A to Defendant's Motion for Summary

Judgment). Plaintiff, having attained a masters degree in

electrical engineering, was originally hired by Kollsman on July

18, 1966, to fill the position of Principal Engineer,

Electronics. Complaint 5 6. In 1977, plaintiff was promoted to

Project Engineer, and in 1978 to Program Manager, a position he

held until 1990.

at 5 7. In 1990, plaintiff was transferred

from Engineering to Marketing,

5 8, where he was employed as

a Manager of International Marketing, Exempt Employee Performance

Appraisal at 1 (Performance Appraisal) (attached as Exhibit 14 to

Plaintiff's Objection to Kollsman's Motion for Summary Judgment).

On April 8, 1993, Kern, then 60 years of age and earning an

annual salary of $79,542, was terminated by Kollsman after nearly

27 years of continuous employment. Complaint $[$[ 4-5.

"Kollsman's business has traditionally been in the defense

area," Wright Affidavit I 3, with the military systems division

comprising approximately "70 percent" of all business. Deposition

2 of Charles Bernhardt at 11 (attached as Exhibit 4 to Plaintiff's

Objection). Due to a variety of reasons, both global and

domestic, "[i]t became clear that defense expenditures around the

world would decline and that the defense business would become

more difficult." Wright Affidavit 5 5.

As an alleged result of such reduced defense expenditures,

Kollsman experienced a 50 percent drop in sales between 1990 and

1992, posting a loss of over $23 million in 1991.

$[$[ 6-9.

Consistent with such decreasing sales, defendant began to "reduce

the number of Kollsman employees in order to save the business

and save jobs . . . ."

1 8. Between November 198 9 and April

1993, when Kern was terminated, Kollsman reduced its work force

by approximately 1100 employees on five separate occasions.

Affidavit of Richard E. Merkle I 4 (attached as Exhibit B to

Defendant's Motion for Summary Judgment).2 It was understood by

Kollsman employees, and Kern in particular, that the reason for

such reductions was declining sales in the defense business.

Deposition of Gabriel Kern at 47, 50 (attached as Exhibit G to

Defendant's Motion for Summary Judgment).

2The particular dates and number of employees included in the reductions are as follows: November 1989, 214 employees; May 1991, 356 employees; January 1992, 239 employees; April 1992, 207 employees; April 1993, 7 employees. Merkle Affidavit 5 4. No statistical data for the 1989-1992 reductions has been presented to the court.

3 Despite such fiscal belt-tightening, sales and prospective

orders "in the military area [for 1993] were way behind budget."

Wright Affidavit 5 18; Kollsman Inter-Office Correspondence

Memorandum from Daniel Guerrette to Richard Delk (attached as

Exhibit 5 to Plaintiff's Objection). Determining that further

cuts in manufacturing and engineering were no longer feasible,

Ronald Wright, President of Kollsman, targeted marketing as the

area for further appropriate downsizing. Wright then asked

Charles Bernhardt, Vice President of Marketing and Kern's direct

supervisor, to prepare a list of individuals recommended for

elimination.3 Wright Affidavit 5 19.

Bernhardt returned to Wright with a list of five individuals

whose average age was 57.2. Bernhardt Deposition at 73; Merkle

Affidavit 5 12. Wright agreed with Bernhardt in part, but chose

to keep two of the five--Herb Sandberg, then aged 69, and A1

Friedrich, then aged 65--since they "both performed important

functions for Kollsman." Wright Affidavit 5 21. Wright

3In April 1993 eight individuals directly reported to Bernhardt: Charles Richmond, Vice President of International Marketing; Charles Torrey, Vice President of Marketing, Avionics & Domestic Military Systems; Thomas Henry, Vice President of Avionics; Henry Warren, Director of Marketing, Pacific Region; Steven Russell, Director of Marketing, Market Research & Planning; John Tuttle, Avionics; A1 Friedrich, Washington office; and Gabriel Kern. Kern Deposition at 133; Bernhardt Deposition at 27. The average age of these individuals at the time of the work force reduction was 56.75 years, excluding Bernhardt. When Bernhardt is included, the average age increases to 57.33 years.

4 concluded, however, that since he was reducing the size of

Kollsman's marketing department, it was now unnecessary to

maintain the "Vice President of Marketing" position, and thus

"decided to release Mr. Bernhardt." Merkle Affidavit 5 14.

Since Kern worked as an "assistant" to Bernhardt, Bernhardt

Deposition at 43, Wright "also decided that Gabe Kern could also

be let go," Merkle Affidavit 5 14. The average age of those

marketing personnel ultimately included in the April 1993 layoffs

was 54.6 years.4

Discussion

1. Summary Judgment Standard

Summary judgment shall be ordered when "there is no genuine

issue as to any material fact and . . . the moving party is

entitled to a judgment as a matter of law." Rule 56(c), Fed. R.

Civ. P. Since the purpose of summary judgment is issue finding,

not issue determination, the court's function at this stage "'is

not [] to weigh the evidence and determine the truth of the

4This final group consisted of Charles Bernhardt, then aged 62; Gabriel Kern, then aged 60; Thomas Henry, then aged 59; Henry Warren, then aged 51; and Robert Coleman, then aged 41. Wright Affidavit 55 20-23. Robert Coleman, who worked in Marketing, Training Devices, reported to Charles Torrey, who in turn reported to Bernhardt. Bernhardt Deposition at 27. The average age of the five individuals who previously reported to Bernhardt but remained after the reduction (Richmond, Torrey, Tuttle, Friedrich, and Russell) was 56.8.

5 matter but to determine whether there is a genuine issue for

trial.'" Stone & Michaud Ins., Inc. v. Bank Five for Savings,

(D.N.H. 1992) (quoting Anderson v.

Liberty Lobby, Inc.,

(1986)). Although

"motions for summary judgment must be decided on the record as it

stands, not on litigants' visions of what the facts might some

day reveal," Maldonado-Denis v. Castillo-Rodriquez,

(1st Cir. 1994), the entire record will be scrutinized in the

light most favorable to the nonmovant, with all reasonable

inferences indulged in that party's favor. Smith v. Stratus

Computer, Inc.,

(1st Cir. 1994); see also Woods v.

Friction Materials, Inc.,

(1st Cir. 1994);

.

The respective roles of the movant and the nonmovant in

summary judgment practice are precisely choreographed. "The

movant must put the ball in play, averring 'an absence of

evidence to support the nonmoving party's case.' The burden then

shifts to the nonmovant to establish the existence of at least

one fact issue which is both 'genuine' and 'material.'"

(citing Garside v. Osco

Drug, Inc.,

(1st Cir. 1990) (citing and quoting,

inter alia, Celotex Corp. v. Catrett,

(1986),

and Anderson v. Liberty Lobby, Inc.,

(1986)

6 (other citations omitted)))

When a party fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party bears the burden of proof at trial, there can no longer be a genuine issue as to any material fact: the failure of proof as to an essential element necessarily renders all other facts immaterial, and the moving party is entitled to judgment as a matter of law.

(citing

;

).

Finally, although "in an employment discrimination case,

'"[e]lusive concepts such as motive or intent are at issue,

summary judgment may be appropriate if the nonmoving party rests

merely upon conclusory allegations, improbable inferences, and

unsupported speculation."'" Id. at 13 (guoting Goldman v. First

Na t '1 Bank of Boston,

(1st Cir. 1993)

(guoting Medina-Munoz v. R.J. Reynolds Tobacco Co.,

(1st Cir. 1990) )) .

2. Evaluating Age Discrimination Claims Under the "Burden

Shifting" Paradigm

Where, as here, there is no direct or overt evidence of age

discrimination--no "smoking gun"--the Supreme Court has

established a burden shifting analysis to facilitate the

evaluation of employment discrimination claims. E.g., McDonnell

7 Douglas Corp. v. Green,

(1973); Texas Pep't

of Community Affairs v. Burdine,

(1981).

Under said framework, the plaintiff must initially make out a

prima facie showing of age discrimination. See, e.g., McDonnell

Douglas, supra,

; LeBlanc v. Great American Ins.

C o .,

(1st Cir. 1993), cert, denied, ___ U.S. ___

114 S. C t . 1398 (1994); Vega v. Kodak Caribbean, Ltd.,

(1st Cir. 1993). At this stage of the analysis,

however, "[t]he burden of making out a prima facie case is 'not

onerous.'" Mesnick v. General Elec. Co.,

(1st

Cir. 1991), cert, denied, ___ U.S. ___, 112 S. C t . 2965 (1992)

(guoting

).

"The elements of the prescribed prima facie case vary,

within the age discrimination context, depending upon whether or

not the plaintiff was dismissed as part of a reduction in force.

LeBlanc, supra,

. When a work force reduction is

the alleged cause of the dismissal, plaintiff's prima facie case

is satisfied upon a showing that: (1) plaintiff was at least

forty years of age; (2) he met the legitimate job performance

expectations; (3) he experienced an adverse employment action;

and (4) the employer did not treat age neutrally or that younger

employees were retained in the same position. See

(citing

Herbert v. Mohawk Rubber Co.,

(1st Cir. Moreover, " [e]stablishment of the prescribed prima facie

case creates a presumption that the employer engaged in

impermissible age discrimination."

(citing

;

. The employer

can rebut said presumption by "'articulat[inql a legitimate

nondiscriminatory reason for the employee's termination.'"

(guoting Lawrence v. Northrop Corp.,

(1st Cir.

1992)) (emphasis in LeBlanc) . The employer's burden is thus

simply one of production, whereas the burden of persuasion

"remains [the employee's] at all times."

950

F .2d at 823.

"[0]nce the employer has proffered a legitimate,

nondiscriminatory reason for its adverse employment decision, the

presumption generated by the employee's prima facie case

disappears . . . ." LeBlanc, supra,

; see also St.

Mary's Honor Ctr. v. Hicks, ___ U.S. ___, ___ , 113 S. C t . 2742,

2749 (1993) (once an employer succeeds "in carrying its burden of

production, the McDonnell Douglas framework--with its

presumptions and burdens--is no longer relevant."). The burden

thus "falls back upon the employee to prove that the reason

advanced by the employer for the adverse employment action

constituted a mere pretext for unlawful age discrimination." LeBlanc, supra,

(citations omitted).

With regard to pretext, the First Circuit requires plaintiff

to put forth both "'minimally sufficient evidence of pretext,'"

as well as "evidence that overall reasonably supports a finding

of discriminatory animus."

at 843 (quoting

). Summary judgment may ensue, therefore,

provided "the record is devoid of adequate direct or

circumstantial evidence of discriminatory animus on the part of

the employer."

(citing

).

See also Medina-Munoz, supra,

(to survive a motion

for summary judgment, nonmovant must present evidence of

"specific facts which would enable a jury to find that the reason

given was not only a sham, but a sham intended to cover up the

employer's real motive: age discrimination").

3. Kern's Prima Facie Case

As noted previously, plaintiff's burden at this stage is

"not onerous,"

. Plaintiff, being

60 years old at his termination, is clearly a member of the class

protected by the ADEA; as of his last employment evaluation,

dated March 2, 1993, plaintiff performed his job in a fully

competent manner and thus met Kollsman's expectations for a

person of like age, training, and position; plaintiff was.

10 however, part of Kollsman's work force reduction, and thus

experienced an adverse employment action on April 8, 1993;

notwithstanding such termination, plaintiff's duties were assumed

by other Kollsman employees with whom he worked who were younger

than he yet spared adverse employment action.

4. Kollsman's Articulated Reasons for Discharge

Since Kern's prima facie case of age discrimination is not

challenged, the court must next address the second prong of the

McDonnell Douglas framework--whether Kollsman has articulated a

legitimate, nondiscriminatory reason for Kern's dismissal.

Kollsman maintains that the April 1993 layoffs merely

represented one episode in a series of work force reductions

which the company experienced in the five-year period between

1989 and 1994. Richard E. Merkle, then-Vice President of Human

Resources for Kollsman during the April 1993 layoffs, stated in

an affidavit that declining sales and financial losses forced

Kollsman to reduce its work force in an effort to remain

financially viable. Merkle Affidavit 5 3.

Kollsman asserts that because it could not afford to make

further cuts in manufacturing or engineering, it looked to

marketing for the necessary reductions. Wright Affidavit 5 19.

After discussing the situation with senior marketing personnel

11 and Merkle, Wright identified five positions that could be

eliminated. According to Wright, the inclusion of Bernhardt on

the final list counseled for Kern's termination as well, since

the majority of Kern's responsibilities and duties were comprised

of providing support for Bernhardt.5

Wright's proffered explanation for Kern's discharge fully

satisfies Kollsman's burden at this time. See, e.g., Menard v.

First Sec. Servs. Corp.,

(1st Cir. 1988) (once

plaintiff established prima facie case, "the burden then shifts

to the employer to articulate, not prove, a non-discriminatory

reason for its action"). "'"[TJhrough the introduction of

admissible evidence," [Kollsman has presented] reasons for its

actions which, if believed by the trier of fact, would support a

finding that unlawful discrimination was not the cause of the

employment action.'" LeBlanc, supra,

(guoting

Hicks, supra, ___ U.S. at , 113 S.C t . at 2747 (guoting

)). Conseguently, the

presumption of age discrimination raised by Kern's prima facie

case has vanished, and the court must finally determine "whether

the evidence, in its entirety, would permit a reasonable fact-

5Although Wright initially discussed the forthcoming economically driven reductions with both Merkle and Bernhardt, the list of those employees ultimately terminated was compiled-- for obvious reasons--by Wright and Merkle.

12 finder to infer that [Kollsman's] decision to terminate [Kern]

was inspired by age animus." Id.

5. Kern's Evidence of Age Animus

As proof that Kollsman's decision to terminate him was

motivated by intentional age discrimination, Kern alleges, inter

alia, that his termination was improperly characterized as a job

elimination and that defendant's work force reduction was not

based on legitimate business reasons.

In order to survive summary judgment, however, Kern must do

more than "simply refute or guestion the employer's reasons."

Gadson v. Concord Hosp.,

(1st Cir. 1992) (per

curiam). Rather, he must put forth "'definite, competent

evidence' fortifying [his] version of the truth." Vega, supra,

(guoting

) .6

6The court pauses at this point to note that much of plaintiff's argument is based upon the deposition testimony of Charles Bernhardt. Contrary to plaintiff's numerous references to "statements made by the defendant's own employees," Plaintiff's Objection at 16, and invocation of Rule 801(d)(2), Fed. R. Evid., Bernhardt's deposition answers are not accorded the status of "admission by party-opponent." As subsection (d)(2)(D) makes clear, such statements are deemed admissions only if made "by the party's agent or servant concerning a matter within the scope of the agency or employment [and] made during the existence of the relationship." Rule 802 (d)(2)(D), Fed. R. Evid. (emphasis added); see also Oki Am., Inc. v. Microtech Int'1, Inc.,

(9th Cir. 1989) (discussing reach of Rule 802(d)(2)). Bernhardt's deposition testimony, taken after his April 1993 termination, may provide relevant evidence.

13 "Merely casting doubt on the employer's articulated reason does not suffice to meet the plaintiff's burden of demonstrating discriminatory intent, for '[t]he defendant need not persuade the court that it was actually motivated by the proffered reasons' in the first place. To hold otherwise would impose on the defendant an almost impossible burden of proving 'absence of discriminatory motive.'"

Pea v. Look,

(1st Cir. 1987) (guoting White v.

Vathally,

(1st. Cir.), cert, denied,

(1984) (guoting

)).

Kern claims that he was not dismissed pursuant to a

reduction in force because many of his previous responsibilities

were not eliminated with his position, but rather were allocated

to younger employees. Such a redistribution of responsibilities,

Kern argues, proves that his position was not "eliminated" and

thus Kollsman's purported work force reduction is merely a

pretext for age discrimination. In the alternative, Kern argues

that his position was subject to a job combination rather than a

job elimination and, as such, a peer ranking should have been

performed.7 The failure of Kollsman to conduct such a ranking.

but it does not rise to the "admission by party-opponent" level.

7When economic and business conditions necessitated a reduction in force, Kollsman identified three job action categories in order to facilitate the lay-off process--job elimination, job reduction, and job combination. Deposition of Richard Merkle at 15 (attached as Exhibit 6 to Plaintiff's

14 according to Kern, is further evidence of discriminatory animus.

a. Discriminatory Pretext

Kern initially proffers the following deposition testimony

of Bernhardt to establish pretext:

Q. In terms of the thinking that went into deciding who to put on the layoff list, was their impact on the payroll a consideration? A. Yeah.

Q. . . . A person's cost to the company was figured by reference not only to his salary, but by reference to other things, as well; would you agree? A. That's correct. Q. Okay. And some of those other things would be his employee benefits? A. Yes . Q. Secretary? A. Yes . Q. Expense accounts? A. Yes .

Objection). According to the "Reduction in Force Procedures" memorandum, a job elimination

is the cleanest of the three job actions. In its simplest application, it too can be purely objective. If the decision is made that a job is no longer necessary and thus eliminated, it is not necessary to make people decisions if it is also decided that incumbents will be terminated with the job.

Memorandum from Richard Delk to Rolph Pagel at 3 (attached as Exhibit J to Defendant's Motion for Summary Judgment). Alternatively, a job combination "occur[s] where two or more jobs are combined to form one single job reguiring skills in the two or more individual jobs." Id. at 4.

15 Q. Going back to the employee benefits, how close they'd be to retirement, that is when the pension would have to be paid? A. I would assume that's a consideration, because under the new laws, you have to reserve for that type of thing. And I think that is a factor, and it could be a very large factor. Q. And in terms of the pensions, Kollsman had a so-called defined benefit -- A. Yes. Q. -- type of plan; is that correct? A. Yes, that's correct. Q. And the longer a person served at Kollsman, the higher his pension benefits would be once he retired? A. That's correct.

Bernhardt Deposition at 84-86. However, the mere reference to a

correlation between pension and age, standing alone, is

insufficient to sustain plaintiff's burden of demonstrating

pretext. As the Supreme Court recently illustrated:

When the employer's decision i_s wholly motivated by factors other than age, the problem of inaccurate and stigmatizing stereotypes [about older workers] disappears. This is true even if the motivating factor is correlated with age, as pension status typically is. . . . Our holding [therefore] is simply that an employer does not violate the ADEA just by interfering with an older employee's pension benefits . . . .

Hazen Paper Co. v. Biggins, ___ U.S. ___ , , 113 S.C t . 1701,

1706-08 (1993) .

b. Job Elimination

Kollsman does not dispute that Kern's responsibilities have

16 been redistributed. In response to interrogatories propounded by

plaintiff, defendant indicates that the majority of plaintiff's

duties were allocated as follows:

Charles Torrey and Charles Richmond have assumed responsibility for tasks which Mr. Kern previously performed for them. Steve Russell and Marion Dube now assist in responding to bids and proposals and assist in preparing Master Authorizations. Louis Liuzzo and Steve Russell apply for temporary export licenses. Cheryl Poulin and Jeanette Motzko help prepare some of the reports previously done by Mr. Kern. Many marketing employees help with customer demonstrations and respond to customer inguiries. Charles Punte reviews teaming agreements.

Plaintiff's First Set of Interrogatories and Reguests for

Production of Documents at 3 (attached as Exhibit 7 to

Plaintiff's Objection).

The truism that "' [a]n employee is not eliminated as part of

a work force reduction when he or she is replaced after his or

her discharge,'" LeBlanc, supra,

(guoting Barnes v.

GenCorp, Inc.,

(6th Cir.), cert, denied,

(1990)), is inapplicable due to the following rationale.

"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.'" Id. (guoting

17 Barnes, supra, 896 F.2d at 1465) . Replacement occurs "only when

another employee is hired or reassigned to perform the

plaintiff's duties."

. As the

above-quoted interrogatory response makes plain, Kern was not

replaced, as contemplated by the cited cases, but rather his

position was eliminated.

c. Job Combination

Kern next argues that further evidence of the pretextual

nature of Kollsman's explanation for his termination lies in the

following excerpt from Richard Merkle's deposition:

Q. Did you make any effort with reference to Mr. Kern to familiarize yourself with all responsibilities he performed? A. N o . Q. And as far as you're concerned, you didn't have to? A. Correct. The emphasis being in "all." Q. How familiar were you . . . with what Mr. Kern did? A. Somewhat, but not really in great detail. He did not work for me.

Merkle Deposition at 34-35.8

According to Richard Merkle, Kollsman was directed by its

8The evidence as to who at Kollsman made the ultimate decision to terminate Kern is unclear, but for purposes of the instant motion all inferences, as required, will be drawn in plaintiff's favor. As illustrated infra, such a determination is irrelevant to the ultimate issue of whether plaintiff's age was a substantial motivating factor in the termination calculus.

18 corporate parent to reduce its general and administrative

expenses--which encompassed marketing, financial, and human

resources--by one million dollars. Merkle Deposition at 17-18.

In order to meet this guota, Bernhardt testified that he "was,

essentially, told how many people [he] had to eliminate and in

what categories, generally." Bernhardt Deposition at 86. Merkle

and Wright, after initial consultation with Bernhardt, decided

that it would be necessary to eliminate five positions from the

marketing department.

The court's role in this proceeding is not "to second-guess

the business decisions of an employer." Petitti v. New England

Tel. & Tel. C o .,

(1st Cir. 1990) . Whether it

would have been more prudent for Merkle to completely familiarize

himself with the precise details of Kern's job description is

immaterial to the issue before the court--and insufficient to

sustain plaintiff's burden at this stage.

Plaintiff continues to carry the burden of showing discriminatory intent, and the relevant guestion is whether the given reason was a pretext for discrimination: It is not enough for the plaintiff to show that the employer made an unwise business decision, or an unnecessary personnel move. Nor is it enough to show that the employer acted arbitrarily or with ill will. These facts, even if demonstrated, do not necessarily show that age was a motivating factor.

Pea v. Look, supra,

(guoting Gray v. New England

19 Tel. & Tel. C o .,

, 255 (1st Cir. 1986) (emphasis in

Gray)). The court finds the evidence as it relates to job

elimination or combination to be completely devoid of any

suggestion that defendant's asserted reasons for the discharge

are masking an underlying discriminatory animus.9

d. Declining Sales Figures

Kern also disputes Kollsman's claim that it was experiencing

financial difficulties during 1993 and, more specifically, that

such fiscal distress necessitated a reduction in Kollsman's work

force.

According to Kern, "[i]t is unlikely that the defendant's

financial problems could be solved by a reduction of [only seven

employees]." Plaintiff's Objection at 43. However, it is

immaterial as a matter of law that the April 1993 work force

reduction resulted only in the release of seven10 Kollsman

90n the contrary, defendant has put forth substantial evidence that Kern's position with the company was salvaged numerous times from the previous rounds of layoffs. In particular, at the time when Kollsman was making cuts in engineering, Kern's department between 1966 and 1990, Wright authorized his transfer to marketing--an option unavailable to Kollsman's younger engineers. Wright Affidavit 5 14.

10Two security guard positions were also eliminated in the April 1993 reductions. Although these individuals were also members of the class protected by the ADEA, 52 and 62 years old, respectively, the evidence indicates that Kollsman's entire security staff is between 52 and 73 years old. Guerrette

20 employees.11 "An employer need not dismiss any particular number

of employees, or terminate a set percentage of the work force, to

institute a reduction in force. Rather, '[a] work force

reduction situation occurs when business considerations cause an

employer to eliminate one or more positions within the company.'"

LeBlanc, supra,

(quoting

) (emphasis added in LeBlanc) .

Kern further asserts "[t]he uncontested facts are that the

defendant had an operating profit of 3.5 million dollars in 1992

Affidavit 5 5 (attached as Exhibit E to Defendant's Motion).

110f more potential relevance is the fact that all seven employees--the five marketing personnel and both security guards- -are in the class protected by the ADEA. Upon reviewing the evidence before it, the court notes the following: (1) Prior to the April 1993 termination, twenty-two people were employed at Kollsman's marketing department in Merrimack, New Hampshire; (2) of said twenty-two, only four were not in the class protected by the ADEA; and (3) the April 1993 terminations caused the average age of the marketing department to decrease approximately 1^ years from 49.45 years old to 47.94 years old. Plaintiff's First Set of Interrogatories at 14. Whatever probative effect this evidence may have, the court further notes that "statistical evidence . . ., in and of itself, rarely suffices to rebut an employer's legitimate, nondiscriminatory rationale for its decision to dismiss an individual employee." LeBlanc, supra,

(citation omitted). Thus, "'[w]ithout an indication of a connection between the statistics, ' the practices of the employer, and the employee's case, statistics alone are likely to be inadequate to show that the employer's decision to discharge the employee was impermissibly based on age."

(citing and quoting Gadson, supra,

) .

21 and 4.0 million dollars in 1993." Plaintiff's Objection at 43.12

The court has reviewed the Operational Report and notes that the

actual profit figures belie plaintiff's characterization. In

pressing his case, plaintiff chooses to rely on profit figures

which do not take interest charges or taxes into account.13

Kollsman's financial outlook is less optimistic when the pre-

tax/post-interest figures are employed. Despite showing a pre­

tax profit of approximately $1.1 million for 1993 overall, the

first two guarters of 1993--the time frame during which Kollsman

was considering the work force reduction--actually resulted in

sizable losses.

When considering financial data in an age discrimination

case, the First Circuit has held that

12Plaintiff draws these figures from the "Kollsman Operational Report for 1992 and 1993" (Operational Report), attached as Exhibit 13 to Plaintiff's Objection. Defendant produced said document pursuant to a motion to compel, with the condition that the document be placed under seal. The court unsealed said document on January 30, 1995, in order to address the particulars of the current motion for summary judgment.

13To assert that pre-interest and pre-tax profit figures accurately represent a business's financial position is to deny the very profound impact such numbers have on a corporation's "bottom line." In more general terms, a variety of costs and factors must be accounted for when establishing a corporation's profitability. Because interest charges must be paid regardless of whether the corporation is showing a profit, such amounts cannot be ignored when evaluating the balance sheet. In order to accurately assess the financial condition of Kollsman, therefore, the court will utilize the pre-tax, but post-interest, figures of the Operational Report.

22 [t]he question for a jury would not be whether [the employer's] finances, viewed by one yardstick, might arguably be seen by someone else in a more optimistic light than did its managers, but whether there was evidence of profitable performance sufficient to permit a reasonable jury to infer that [the employer's] proffered pessimistic analysis--given as a reason for the layoffs-- was a mere pretense.

LeBlanc, supra,

. On the basis of the evidence

before it, the court "find[s] no triable issue over [Kollsman's]

assertion that unprofitability concerns fueled its decision to

lay off [Kern] and the others."

The First Circuit has admonished that "'[c]ourts may not sit

as super personnel departments, assessing the merits--or even

the rationality--of employers' nondiscriminatory business

decisions.'"

at 847 (quoting

). After considering the "aggregate package of proof offered

by the plaintiff,"

, the court

finds inescapable the ultimate conclusion "that a reasonable

factfinder could not infer pretext or age discrimination from

these circumstances," LeBlanc, supra,

. In

consequence thereof, defendant's motion for summary judgment on

plaintiff's ADEA claim must be and herewith is granted.

23 6. Breach of Contract

a. Discretion to Adjudicate

Having granted defendant's motion for summary judgment on

the ADEA claim, the court is thereupon entitled, at its

discretion, to either retain supplemental jurisdiction and

continue to adjudicate the state-law claim or decline same,

leaving the plaintiff to seek relief in state court. See

(c) (1993). Such discretion is "considerable" and

should be evaluated "in light of such considerations as judicial

economy, convenience, fairness to litigants, and comity." Newman

v. Burgin,

(1st Cir. 1991) (citing Carnegie-

Mellon Univ. v. Cohill,

, 350 n.7 (1988) . Although

"in the usual case in which all federal-law claims are eliminated

before trial, the balance of factors to be considered . . . will

point toward declining to exercise jurisdiction over the

remaining state-law claims," Carnegie-Me11on, supra,

n.7, "the doctrine of [supplemental] jurisdiction . . . is a

doctrine of flexibility, designed to allow courts to deal with

cases involving [supplemental] claims in the manner that most

sensibly accommodates a range of concerns and values,"

at

350 .

Plaintiff's contract claim raises neither novel nor complex

issues of state law. In point of fact, the New Hampshire Supreme

24 Court has recently addressed the issues raised in plaintiff's

complaint on two distinct occasions. See Butler v. Walker Power,

Inc.,

,

(1993); Panto v. Moore Business

Forms, Inc.,

, 547A.2d 260(1988). Furthermore, a

dismissal of the state-law claim at this stage of theproceedings

would only serve to waste precious judicial resources and

needlessly prolong the resolution of the instant controversy.

Upon consideration of the competing concerns and values, the

court, in its discretion, finds and rules that a dismissal is not

warranted and thus will proceed to resolve the entire matter in

this unitary proceeding.

b. The Merits

Plaintiff contends that on several occasions defendants

promulgated literature which either expressly or impliedly served

to modify his status as an at-will employee. More specifically,

Kern asserts that, based on alleged oral and written

representations from Kollsman, he developed "an expectation of

continued employment unless the application of [peer ranking]

procedures and [other] objective criteria indicated that my

termination was warranted." Affidavit of Gabriel Kern 5 14

(attached as Exhibit 2 to Plaintiff's Objection).

Defendant's employment handbook contains the following

25 disclaimer:

EMPLOYMENT-AT-WILL STATEMENT It is understood that nothing contained in the employment application, in the granting of an interview, or in this handbook is intended to create an employment contract between Kollsman and the individual either for employment or for providing any benefit. It is understood that no employment guarantee is binding upon Kollsman unless the terms and conditions are specified in writing. If an employment relationship is established, it is understood that the employee has the right to terminate his/her employment at any time and that Kollsman retains a similar right.

Kollsman Handbook for New Hampshire Employees at iv (attached as

Exhibit L to Defendant's Motion). Defendant asserts that the

clear meaning of said disclaimer is that it "did not alter the

at-will relationship of the parties. It created no employment

contract." Defendant's Motion at 17.

In

the New Hampshire Supreme Court held that

the at-will status of an employment relationship is "one of prima

facie construction," not "substantive law."

130

N.H. at739-40,

. Although the Panto court did

not have the issue of durational modification of the at-will

employment relationship properly before it, the court noted that

an employer "could simply . . . avoid[] the entire issue [of

contractual liability] by announcing in the written policy itself

that [the policy] was not an offer, or a policy enforceable as a

contractual obligation."

,

.

26 The Panto dictum was adopted and affirmed in Butler, wherein the

court limned "[b]y virtue of the disclaimer, . . . the bare

employment contract remains with a presumptive at-will status."

,

. The court finds

and rules, therefore, that the "Employment-At-Will Statement"

contained in Kollsman's employee handbook sufficiently disclaims

any durational modification to the contract between Kollsman and

its at-will employees. The "right to arbitrary termination,

absent [a] violation of public policy, [therefore] remains in the

hands of the employer."

This conclusion, however, does not end the matter. Kern

further submits that certain documents promulgated by Kollsman

regarding reduction in force procedures lack any disclaiming

language, can be found to be contractual promise eguivalents, and

are thus valid and enforceable modifications to his at-will

status. See, e.g., Kollsman Division Policy and Procedure

Reduction in Force (Policy and Procedure) (attached as Exhibit 3A

to Plaintiff's Objection); Employee Peer Ranking Assessment Forms

(Peer Assessment Form) (attached as Exhibit 3B to Plaintiff's

Obj ection) .

Plaintiff's argument on this issue, in sum, proceeds as

follows:

Under the circumstances of this case, a jury could find that the defendant's

27 promulgation of the document entitled, "Division Policy and Procedure Reduction in Force" and dated 12/16/91, modified the terms of the parties' employment relationship and agreements, that the plaintiff relied thereon in continuing his employment with the defendant, that the defendant failed to abide by this policy when it terminated the plaintiff in April of 1993, and that the plaintiff was damaged thereby.

Plaintiff's Objection at 50. For the reasons that follow, the

court disagrees.

As an initial matter, plaintiff's contention that "defendant

made enforceable express and implied promises that decisions

regarding lay offs would be based on objective criteria and not

on age-related considerations,"

is unavailing due to the

failure of proof regarding age discussed supra, part 5.

Plaintiff's "failure to follow reduction policy" argument is

likewise prejudiced.

Prior to his termination, plaintiff was employed as a

"salaried exempt employee." See Performance Appraisal at 1.

Where a reduction in force affects salaried exempt employees,

"employees in affected departments will be peer ranked by job

classification." Policy and Procedure at 2 (emphasis added).

However, " [a] Peer Ranking assessment form need not be completed

on an employee who is in a one-of-a-kind position that is being

eliminated." Peer Assessment Form at 1.

The interplay between these two policy positions is

28 illuminated in the following excerpt from Merkle's deposition:

Q. Where in those established procedures is there a category that pertains to Mr. Kern: A. Uhm, reduction in force is reguired. "Employees in affected departments will be peer ranked by job classification." Q . That's the -- A. it was obvious that Mr. Kern was in a one-of-a-kind job. Q. Is it your testimony that that's the provision that pertains to Mr. Kern? A. It's guite obvious there were no peers. Q. My guestion is: Is that the provision that pertains to Mr. Kern? A. Yes. Q. Okay. (Discussion off the record.) Q. With reference to the other employees who were subject to a layoff simultaneous with Mr. Kern, were they subjected to any peer ranking?

A. Mr. Bernhardt was not; Mr. Henry was not; Mr. -- Mr. -- Warren was. Q. Is that Warren Henry? A. That's -- his name is Hank Warren. Q. Oh, okay. A. Mr. Coleman was.

Merkle Deposition at 59-60. The unigue character of Kern's

position at Kollsman is further underscored by the testimony of

Bernhardt:

Q. Was there anyone else in the company who had a job like Mr. Kern's? A. N o . Q. Was it pretty much a one-of-a-kind-type job? A. I would say -- was it a one-of-a-kind- type job? Well, since I had all the marketing, I would have to say it was one of a kind for a guy in that position, yeah. It was things that had to be picked up. If they

29 fell on the floor, you would not be able to

Q. Was there anyone else who sort of had an equivalent job to Gabe Kern's? A. N o .

Bernhardt Deposition at 81. The evidence thus unequivocally

demonstrates that plaintiff's position at Kollsman, whether he

was coqnizant of it or not, was "one-of-a-kind." Plaintiff's

assertion that "defendant failed to abide by [its termination]

policy" simply rinqs untrue.

However, even assuminq arquendo that defendant neqlected to

precisely follow its termination procedures, plaintiff's breach

of implied contract claim is further stymied by the "briqht line"

drawn by the Panto court between "the durational status of an

employee and the incidents of employment14. . . . "

,

(citinq

,

) .

Althouqh the Butler court indicated that a "plaintiff well

miqht make a case assertinq damaqes from failure to follow the

step discipline procedure as a contractual incident of

14In Panto, such "incidents of employment" were post-layoff salary and frinqe benefits.

,

. The "incident of employment" in Butler was a three- step discipline process prior to termination.

,

. The putative "incident of employment" in the case at bar is a peer rankinq prior to work force reduction. Such an "incident of employment" is more akin to that found in Butler rather than Panto. Plaintiff's reliance on Panto for support therefore is misplaced.

30 employment, unrelated to any durational claim . . . [t]he

ultimate act of termination would be a thin reed for such a case

. . .

,

. Since "[d]amages

must arise from failure to follow the procedure short of

termination" and the court failed to identify any "damages

independent of damages flowing from the loss of continued

employment with the employer," the directed verdict for the

defendant was proper.

Plaintiff's case similarly rests on too frail or thin a

reed. The court therefore finds and rules that plaintiff's

breach of express or implied contract claim based on materials

promulgated by his employer is insufficient as a matter of law.

In conseguence thereof, defendant's motion for summary judgment

with respect to said breach of contract claim must be and

herewith is granted.

Conclusion

For the reasons set forth herein, defendant's motion for

summary judgment (document 15) is hereby granted in its entirety.

The clerk of court is thus instructed to enter judgment for the

31 defendant as to all counts.

SO ORDERED.

Shane Devine, Senior Judqe United States District Court

February 9, 1995

cc: Francis G. Murphy, Jr., Esq. James W. Donchess, Esq.

32