Hagan v. Warner/Elektra/Atlantic Corp.

Citation: 92 F. App'x 264Docket: No. 02-3602

Court: Court of Appeals for the Sixth Circuit; March 9, 2004; Federal Appellate Court

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Peter M. Hagan appeals the district court's grant of summary judgment favoring Warner/Elektra/Atlantic Corporation (WEA) regarding his claims of reverse race, reverse gender, and age discrimination. Hagan contends that discrimination was the basis for his 1995 demotion and the denial of a transfer in 1999. The court affirmed the judgment, noting Hagan failed to provide direct evidence of discrimination or demonstrate that WEA's stated nondiscriminatory reasons were pretextual.

Hagan was employed as Branch Sales Manager for WEA's Cleveland office in the early 1990s, ranking below Branch Manager Richard Froio. In 1995, following a restructuring, Hagan's title changed to Field Sales Manager, and he remained in that position until Froio's departure, after which WEA hired Dale Hill, an African-American who was sixteen years younger than Hagan. Hagan did not contest this hiring decision at the time.

When WEA closed the Cleveland office in 1999, Hagan was offered three alternatives: a sales representative position, a consulting role, or a severance package, all of which he rejected. He filed suit alleging violations of the Age Discrimination in Employment Act, Title VII of the Civil Rights Act, and the Ohio Revised Code, claiming unlawful discrimination in his demotion and the failure to transfer him to available positions, including a preferred Field Sales Manager role in Philadelphia.

The district court found no evidence supporting Hagan's claims of discrimination, leading to the summary judgment. The standard for summary judgment requires that there be no genuine issue of material fact, and in employment discrimination cases, plaintiffs must present either direct evidence of discrimination or circumstantial evidence that permits an inference of discriminatory treatment. Hagan did not meet these criteria, as he lacked both direct and sufficient circumstantial evidence to support his claims.

If Hagan presents direct evidence of discrimination, the burden shifts to WEA to show its actions would have occurred regardless of any discriminatory motive. Hagan does not claim direct evidence of age or gender discrimination; instead, he argues that WEA’s affirmative action plan provides a basis for inferring race discrimination. However, existing legal precedent indicates that the mere existence of an affirmative action plan does not prove discrimination unless the employer acted discriminatively under that plan. Hagan fails to demonstrate a causal link between the plan and his demotion, merely asserting that a factual dispute exists regarding WEA’s motives, which does not suffice to create a genuine issue of material fact. Consequently, the district court's conclusion that Hagan lacks direct evidence of discrimination stands.

Regarding circumstantial evidence, Hagan contends the district court erred in determining he did not present sufficient evidence. Applying the McDonnell Douglas/Burdine framework, his claim of a materially adverse employment action due to his demotion in 1995 is weakened by the fact that his salary and benefits remained unchanged, indicating only a minor change in status and responsibility. Even assuming a prima facie case of discrimination could be established, summary judgment would still be appropriate because Hagan cannot rebut WEA's non-discriminatory justifications for his demotion. WEA explains that Hagan was not selected for the District Sales Manager position due to his lack of interest, a request from a key customer against his leadership, negative recommendations from a former office head, and concerns regarding his leadership effectiveness, including inappropriate behavior at company events.

Hagan contests the district court's consideration of Schone's reservations regarding his capability to lead the Cleveland office, labeling it as inadmissible hearsay. While Hagan correctly asserts that hearsay cannot be considered during summary judgment, the court deemed Schone's testimony admissible since it was presented to demonstrate its impact on Schone rather than to assert the truth of the coworkers' observations. The court found that WEA provided legitimate, plausible reasons for Schone's decision to select another candidate over Hagan, thus meeting its burden of proof. For Hagan to succeed, he must demonstrate by a preponderance of evidence that WEA's reasons were pretextual, either by showing they lacked factual basis, were not actual motivating factors, or were insufficient on their own to motivate the decision.

Hagan first argues that WEA's reasons lack factual basis, claiming his clean disciplinary record and positive feedback from his former boss, Froio, support his position. However, the court noted that Hagan does not dispute that concerns about his leadership were raised to WEA, including incidents of inappropriate behavior. As these issues could reasonably form the basis of Schone's decision, Hagan's assertion fails. Hagan also argues that WEA's reasons did not genuinely motivate his 'demotion,' yet he provides only speculative claims regarding potential discriminatory motives. The court found this speculation insufficient to establish pretext, concluding that Hagan presented no evidence to counter WEA's legitimate reasons for its actions in 1995, thereby affirming the summary judgment in favor of WEA.

Regarding Hagan's 1999 claims, he asserts he should have been considered for positions when WEA closed its Cleveland office. WEA initially offered the Field Sales Manager position to Hill, who declined, and then hired Jeanne White, an African-American female, for the role, followed by hiring Mary Ressner, also an African-American female, for White's previous position.

An employer is not required to transfer employees during a workforce reduction for economic reasons, as established in Godfredson v. Hess, Clark, Inc. However, if an employer does transfer some displaced employees, it must do so without unlawful discrimination (Scott v. Goodyear Tire, Rubber Co.). Employees alleging discrimination in such transfers must present additional evidence that they were unfairly singled out (Barnes v. Gen-Corp Inc.). In Hagan's case, he failed to provide sufficient evidence to counter WEA's legitimate reasons for its transfer decisions. Specifically, Raymond Milanese, responsible for the managerial position, had a better understanding of Hill's abilities than Hagan's, which justified Hill's selection. Hagan's speculation regarding the impact of Hill's earlier management role was deemed irrelevant. Furthermore, Hagan lacked the necessary expertise in black music for the Field Sales Manager position, which he acknowledged, and he declined a higher-paying sales job, undermining his claim of discrimination. Hagan's assertion that he should have transferred to the Detroit position was unsupported; WEA stated that the position was not open, as the previous holder continued in that role. Hagan's claim of a policy allowing senior employees to "bump" into lower positions was based only on his own uncorroborated claims and an affidavit lacking substantial evidence. With no rebuttal to WEA's legitimate reasons for denying Hagan's transfer or evidence of discriminatory practices, the district court's summary judgment favoring WEA was affirmed.