Court: Court of Appeals for the Seventh Circuit; December 16, 2003; Federal Appellate Court
Allen Andree filed three claims against his former employer, Siemens Energy and Automation, Inc.: unjust enrichment, breach of contract, and age discrimination under the Age Discrimination in Employment Act (ADEA). The common law claims were dismissed via summary judgment, and the court ruled in favor of Siemens on the age discrimination claim before it reached the jury. Andree appealed the judgments on all three claims, but the appellate court affirmed the lower court's decisions.
Federal jurisdiction for the age discrimination claim was established under 29 U.S.C. 626(b), 29 U.S.C. 216(b), and 28 U.S.C. 1331, while supplemental jurisdiction over the common law claims was based on 28 U.S.C. 1367. The appellate court had jurisdiction under 28 U.S.C. 1291.
On appeal, Andree raised three issues: 1) whether the district court erred in ruling he could not demonstrate that Siemens' reason for his termination was a pretext for age discrimination; 2) whether the court correctly granted summary judgment on the breach of contract claim; and 3) whether the court properly awarded summary judgment on the unjust enrichment claim.
Factual background indicates that Andree, hired as an Account Manager at age 52 in 1996, initially received positive performance ratings. However, following a change in supervision in 1998, he received a disciplinary memorandum citing significant deficiencies in his technical abilities and interpersonal skills. He was placed on a performance improvement plan but failed to meet the required standards. Despite receiving additional training, he did not improve in subsequent evaluations.
Vanek issued a disciplinary memorandum to Andree due to his inadequate performance in a second technical review, stating he had two weeks to improve. After failing a third technical skills review on June 29, 1999, Andree was reassigned to making 'cold calls' instead of servicing existing accounts, with a warning of potential termination if he did not meet expectations. He was required to develop a customer list and submit weekly 'call plans' and 'call reports.' In August 1999, discrepancies in these reports were identified by Joseph Schneider, leading to a confrontation with Andree, who admitted to inaccuracies but denied intentional falsification. On August 30, 1999, Siemens terminated Andree for falsifying call reports while on a performance improvement plan. During termination, Siemens offered him $44,265 in unpaid commissions in exchange for releasing legal claims, which he declined. Notably, Andree did not raise an age discrimination claim during the termination meeting. After being replaced by a younger employee, he filed suit alleging age discrimination under the ADEA. The case went to trial in July 2002, where Siemens moved for judgment as a matter of law, arguing that Andree could not prove pretext in their reason for termination.
The court approved Siemens' motion, discharging the jury after determining that Andree's termination was motivated by the filing of false call reports, not age discrimination. Andree appeals the trial court's Rule 50(a) judgment, which is reviewed de novo. A Rule 50(a) judgment may be granted when there is insufficient evidence for a reasonable jury to rule in favor of a party. To succeed in an Age Discrimination in Employment Act (ADEA) claim, a plaintiff must demonstrate that age was a determining factor in the discharge. The key issue is whether Andree would have been terminated for falsifying reports if he were younger than 40, with the same circumstances. Direct evidence of age discrimination was absent, prompting Andree to use circumstantial evidence through the McDonnell Douglas framework, which involves establishing a prima facie case, shifting the burden to the employer to provide a legitimate reason for termination, and allowing the plaintiff to show that this reason was a pretext for discrimination. The prima facie case requires showing that the plaintiff is over 40, met job expectations, was discharged, and that a significantly younger person was hired or similar evidence indicating age was the likely reason for discharge. Both parties agree that Andree established a prima facie case and that Siemens provided a legitimate reason for his discharge. However, Andree contends that the court erred in ruling that he failed to prove the reason for his termination was a pretext for discrimination. Pretext is defined as a false reason for an employment decision, requiring more than merely showing a mistaken decision; it necessitates evidence that the employer did not honestly believe the stated reason for the action.
An employee can challenge a termination by showing that the reasons provided for their discharge are: 1) factually unfounded; 2) not the true motivation for the termination; or 3) insufficient to justify the termination. In the case of Andree, he claims his age motivated his discharge, contrary to Siemens' assertion that it was due to falsifying call reports. However, the evidence—primarily Andree's own admissions—indicates he had fraudulently reported interactions with individuals who were not available, undermining his argument. Siemens had documented Andree's poor performance and provided multiple warnings and opportunities for improvement prior to his termination, affirming that his dishonesty in reporting was a legitimate basis for discharge, more serious than merely inadequate job performance. Additionally, coworker testimony supported Siemens' rationale, noting that honesty in reporting is critical for business operations. Andree's prior satisfactory performance ratings and merit raises are deemed irrelevant, as the focus must be on his performance at the time of discharge in August 1999. The court emphasizes that it does not act as a personnel review board, underscoring the validity of Siemens' concerns about Andree's conduct and performance at the time of his firing.
The court determined that the plaintiff-appellant did not provide a legally sufficient basis for a jury to disbelieve Siemens’ reasons for his termination. In a breach of contract claim, Andree sought $44,265 in commissions offered by Siemens, which he declined in exchange for a release of legal claims per the Sales Compensation Plan. The district court granted summary judgment for Siemens, concluding Andree did not establish a contract for the commissions, as the plan disavowed a right to incentive payments, which were at management's discretion. Under Wisconsin law, the burden to prove a contract lies with the claimant, and Andree failed to present evidence of a written or oral contract for commissions.
Additionally, Andree's claim of unjust enrichment was deemed abandoned since he did not respond to Siemens’ summary judgment motion on that matter. The court emphasized that a party must inform the trial judge of reasons against summary judgment, and failing to do so waives the right to argue the issue on appeal. Although Andree mentioned quantum meruit in response to the motion, he did not include it in his complaint, which must clearly state the claims. The court clarified that unjust enrichment and quantum meruit are separate causes of action with distinct elements, thus affirming the district court's refusal to consider the quantum meruit argument.
The July 1, 1999, memorandum defines 'cold calls' as efforts to acquire new customers, mandating Andree to conduct at least four new account calls daily. Prior to his third technical skills review, there was no documented quota for Andree's cold calls. Joseph Schneider was appointed as the Manager of Application Engineers for Siemens' Milwaukee division around July 1, 1998. Andree attempted to justify discrepancies in his call reports by claiming they were 'living documents' intended for future follow-up calls, asserting he included potential client representatives even if he had not met them on the reported dates. During his deposition, Vanek indicated that Andree's termination was a collective decision involving himself, Staehelski, Human Resources Manager Mike Nobles, and Schneider. Additionally, 29 U.S.C. 631 provides age discrimination protection for individuals aged 40 and older. As of June 30, 1999, Andree ranked in the top 10% of the company's sales performance.
