Several members discussed trying to secure reversal of the decision to dismiss Mr. Kerwood. The matter was presented to the Board which did not take any action.
Upon plaintiff's dismissal, Dr. Riedy assumed the duties of director of the education department, pending selection of a successor.
The vacancy was advertised; more than 300 applicants submitted resumes. The median age of those listed was 41; only 8 were over 55. All applications were initially screened by MBA's personnel director, and then forwarded to Dr. Riedy. Of 60-70 initial candidates for consideration nine "finalists" were selected, ranging in age from 34 to 58.
The position, offered to one in his early forties who rejected the offer, was accepted subsequently by a 58 year old business school dean of a local university who commenced his MBA employment in February 1979.
There is no evidentiary basis for plaintiff's contention that this person was hired solely to provide a defense to this lawsuit.
In part, plaintiff has based his claim of age discrimination on the fact that several older staff members were dismissed or directed to resign by Dr. Riedy and that their replacements were younger. He contends that by this turnover that MBA realized substantial economic savings in pensions and salaries.
In addition to Mr. Kerwood and Robert Gray (above discussed) plaintiff proffered the situations of four other such employees who were discharged: Mssrs. Williams, Wetmore, Hart, and Herron. The latter three testified in this action; several witnesses referred to Mr. Williams' situation.
Peter M. Williams, age 51, had served as interim chief of operations since the spring of 1977, when Dr. Jones announced his impending resignation, and then as chief of staff between Jones' actual resignation in October and Dr. Riedy's arrival in January 1978. He had had no assurance he would have an official position upon the appointment of the new executive vice-president. His former position as head of the management service department had been replaced one-half year earlier. Accordingly, Mr. Williams was placed in a new position as director of administration but his interpersonal relations with the staff were so ineffective that despite his brilliance no one questioned the justification of his demanded resignation.
John Wetmore, senior director of the economics and research department, was 52 at time of severance from MBA. Dr. Riedy, also an economist, notified Mr. Wetmore of his intention to rely on the Wetmore economics department for policy advice. Dr. Riedy instituted operational changes in that department, creating the title of supervisory statistician, demanding prompt replacements for the existing vacancies, insisting that salaries be increased, and assuming responsibility himself to clear these budget increases with the Board. In early March Dr. Riedy advised Mr. Wetmore of his dissatisfaction with implementation of the administrative changes, including lack of compliance with the directive to hold staff meetings for the dispersion of information about this and other departmental operations. Mr. Wetmore felt he was complying to the best of his ability but was constrained by time limitations. Without prompt, demonstrated change Mr. Wetmore knew discharge was imminent; he was terminated in late March 1978. Dr. Riedy offered to let him remain in his present position on the staff until May (although he would receive benefits through July) to provide Mr. Wetmore an improved opportunity to locate other employment.
Since Wetmore remained on payroll status beyond April 30 he benefitted by an additional year's pension contribution. Other than his eventual replacement by a thirty-six year old, Mr. Wetmore has offered no support to justify his conclusion that he was dismissed because of his age.
John Hart, 61, complained his dismissal was based on age, also without supporting facts. Initially employed at age 58 as Dr. Jones' administrative assistant and with MBA for less than three years, he was Assistant Director of Administration with "insufficient work to keep him occupied" when his resignation was requested by his then supervisor. (Dr. Riedy was not directly involved in this resignation.) MBA refused Mr. Hart's request to extend the termination date by six weeks to provide a 10% increase in his pension plan rights.
It is most significant that plaintiff proffers the case of Paul Herron as evidence of the pattern of age discrimination practice at MBA. Mr. Herron, then age 57, had been with MBA approximately six years and was editor of the Mortgage Banker, its trade magazine publication, when Dr. Riedy assumed leadership at MBA.
Upon Robert Gray's dismissal as public relations director, Mr. Herron was promoted to direct the units resulting from merger of the Gray-Herron departments. As director of communications, with a $ 4,000 annual salary increase, his responsibilities enlarged. At time of plaintiff's discharge Dr. Riedy assured Mr. Herron of his future with the organization and as of summer, 1978, Herron concluded "my age was not a detriment." Subsequently Herron requested a reduction in responsibilities and it was Herron himself who suggested a commensurate salary reduction. While acceding to the request in part by reducing the responsibilities, Dr. Riedy nonetheless left the salary increase fully intact. A new senior staff member was hired as director of communications and when that individual became dissatisfied with his performance, Herron was demoted. That director later secured Herron's resignation. It is manifestly unjust even to suggest age as a possible basis for resignation here. The record is not only void of even remote connection, it is wholly to the contrary: Dr. Riedy provided effort to assist and promote Mr. Herron by augmented responsibilities, salary, encouragement and, later at Herron's insistence, accession to his request for reduced duties. Simply put, Mr. Herron could not perform his responsibilities despite substantial support measures.
Dr. Riedy had little or no role in the dismissals of four clerical employees 40 and older whose services were terminated, in most cases by their own immediate supervisors. In one such matter, however, when plaintiff requested additional clerical personnel, Dr. Riedy directed Mr. Kerwood to discharge a secretary admittedly incapable of even answering the telephone, with the caveat that no additional staff position would be allocated to plaintiff's department until Mr. Kerwood improved his use of the existing positions.
Plaintiff contends that both statistics and economic motivation present MBA's pattern of age discrimination.
Dr. Paul Smith, plaintiff's expert mathematical statistician (not expert in the areas of industrial psychology/relations or employment discrimination), demonstrated that nine MBA employees aged 40 or older were dismissed (which, in these findings, includes those whose resignations were demanded) January 1, 1978 August 15, 1979, as compared with none during 1976 and 1977. He testified there is only one chance in ten thousand that this pattern could occur by chance. He had no evidence to indicate the typicality of the 1976-77 figures.
The average age of those hired to replace dismissed employees who were under 40 was closer to the average of the dismissed employees than the average age of those hired to replace dismissed employees who were 40 or older was to the average age of those latter dismissed employees. This situation would be expected if MBA hired without respect to the ages of applicants; it therefore of itself does not support an inference of age discrimination. Moreover, when resignations (not only dismissals) are examined the following pattern emerges:
In other words, the employees who were dismissed tended to be younger, on the average, than all employees who severed their employment with MBA; their replacements, on the average, were older than the replacements for all employees who left.
The expert concluded that
conditions changed after December 15, 1977 and one of the effects of change was that an increasing number of older employees were fired.
The shift is that in the earlier period (1/76 12/14/77) younger employees, under 40, were disfavored, and more likely to be fired; in the second period (12/15/77 8/15/79), older employees, over 40, were disfavored, and more likely to be fired.
MBA, though, does not take the position that dismissals of the plaintiff and the other older employees came about by chance. It contends, persuasively in light of the entire case, that they were the result of a "management shakeup" produced when MBA introduced more efficient management techniques into its staff operations.
Dr. Riedy had a mandate to revitalize MBA with a forceful administration. This direction did not extend to reduction of pension and salary costs for MBA which then had a total annual budget of 4.5 5 million dollars.
MBA's pension plan is funded entirely by the employer's contributions and employees become fully vested after 10 years service. Benefits are normally payable upon the employee's retirement at age 65; the plan provides also for early retirement. The defendant's precise contribution depends on the estimated pension due an employee upon retirement; calculations are made by MBA's actuarial consultants for the eligible participating employees by May 1 of each year. The sum of these individual contributions is placed into the MBA fund shortly thereafter. The greater an employee's salary, the larger the amount MBA must contribute on his/her behalf.
The total annual contribution to the pension fund by MBA was significantly lower ($ 41,974) in fiscal year 1978 than the previous years; it was expected to be yet lower for fiscal year 1979. By comparison, in 1976 and 1977 MBA contributed $ 109,723 and $ 128,044, respectively.
Records and budget proposals published by the defendant attribute this difference to
staff turnover, especially among high salaried and older employees. As a result the Association's pension obligation was reduced by $ 103,000 . . .. The lower pension expense results from a younger staff. Also, since pension eligibility occurs following one year of employment, the newness of the staff holds down pension expense.