On appeal from the United States District Court for the Western District of Pennsylvania; D.C. Civil No. 88-02645.
Greenberg and Cowen, Circuit Judges, and Buckwalter, District Judge*fn* Sloviter, Chief Judge, and Becker, Stapleton, Mansmann, Greenberg, Hutchinson, Scirica, Cowen, Nygaard, and Alito, Circuit Judges.
Jack Colgan appeals from the district court's order of August 29, 1990, which granted summary judgment to Fisher Scientific Company in his suit under the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. §§ 626-633a, following his discharge from employment by Fisher. The summary judgment was granted on the procedural ground that Colgan's charge filed with the Equal Employment Opportunity Commission ("EEOC") was untimely as he filed it more than 300 days after he received a poor rating in a performance evaluation and he thus failed to preserve his claim. In the alternative on the merits, the district court held that Colgan did not establish that there was a genuine issue of material fact to undermine the nondiscriminatory reason advanced by Fisher to justify its actions. Colgan v. Fisher Scientific Co., 747 F. Supp. 299 (W.D. Pa. 1990). We cannot say that the limitations period under the ADEA started to run on the date Colgan received his performance evaluation and thus we cannot conclude that the charge was untimely. Furthermore, we hold that because of a genuine dispute of material fact summary judgment on the merits should not have been granted. Accordingly, we will vacate and remand the matter.
Fisher hired Colgan as a machine operator in its Indiana, Pennsylvania, facility on December 8, 1952.*fn1 During Colgan's employment with Fisher his salary was raised 42 times for various reasons, including cost-of-living adjustments, provisions in union contracts, annual increments, and his promotion on April 28, 1975, to Machine Shop Foreman, a supervisory position. Between 1975 and 1982, Colgan received evaluations of his performance as a supervisor on a sliding scale for each rated attribute. These individual ratings were generally good, approaching outstanding. Each year's evaluation form also included his supervisor's written remarks; the evaluations frequently stated that Colgan was cooperative and dependable, adapted to change well, and had leadership qualities, good judgment, and a good attitude.*fn2 In 1983, Fisher changed its evaluation form to provide a single numerical scale indicating the employee's overall performance, in addition to the supervisor's written comments. The scale ranged from 1.0, "exceptionally high--rarely achieved," to 5.0, "unsatisfactory," with a midpoint of 3.0 indicating "typical. " In 1983, Colgan received a numerical rating of 3.0.
The following year, Fisher changed the terminology on the scale: 1.0 became "outstanding;" 3.0 became "met requirements," and 5.0 remained "unsatisfactory." Edmund Zalewski, the Manager of Component Manufacturing and Colgan's direct supervisor, prepared Colgan's 1984 evaluation and gave Colgan a rating of 2.5, falling between "exceeded requirements" and "met requirements." In February 1985, Fisher gave Colgan the additional responsibility of supervising the tool room. In September 1985, Colgan received a 2.75 rating from Zalewski, which fell in the same range as the previous year's rating, but was obviously somewhat less favorable. Zalewski wrote that Colgan "has shown capacity for additional responsibility by taking over supervision of tool room and establishing procedural changes within it to make it a more effective support department." On November 25, 1985, Fisher offered its employees an early retirement program for which Colgan qualified, but on January 15, 1986, he declined to participate in the program.
In early 1986, Fisher implemented the Kaelin "just-in-time" program which relies on stringent production schedules and coordination among departments so that at each stage of production parts are received only as needed. Fisher hired outside consultants to implement the program. Claus P. Parow, Zalewski's supervisor, discussed the Kaelin system with Colgan in March or April 1986, because Colgan was falling behind in his responsibilities relating to the system. Nonetheless, on March 31, 1986, Fisher gave Colgan the additional responsibility of supervising the castaloy department. Robert F. Hundley, the plant manager, made the decision to give Colgan this responsibility but Thomas F. Mittelhauser, Fisher's Manager of Human Resources, and Zalewski approached Colgan about the change. According to Hundley, while Colgan did not refuse to supervise the castaloy department, he did express concern that supervising three departments was too much for one person. Mittelhauser promised Colgan before he took over the castaloy group that he would get whatever help he needed to perform the job. The previous castaloy supervisor retired pursuant to the early retirement program, but stayed on until June 1986 to assist Colgan with the transition.
That month George Kowchuck replaced Zalewski as Colgan's immediate supervisor. Although Zalewski had supervised Colgan from September 1985 to May 1986, he did not participate in Colgan's August 1986 performance evaluation; rather, Kowchuck, who had supervised Colgan for ten weeks, excluding a two-week plant shutdown in July, wrote the evaluation. The 1986 performance evaluation stated that Colgan's performance had declined since his last evaluation. While the evaluation made some positive comments on quality awareness and safety, under the category "Results not meeting expectations or which present opportunities for improvement," Kowchuck's written remarks were:
INTERACTING DEPT. TO DEPT.
ESTABLISH A FIRM FOLLOW UP PROCEDURE.
HAS NOT ADAPTED TO A CHANGING WORK REQUIREMENT, CASTALOY AREA, PRODUCTIVITY PROGRAM, POSITIVE OBJECTIVITY.
Further comments provide:
HAS A GOOD WORKING KNOWLEDGE OF PRODUCT, BUT NEEDS TO DEVELOP A POSITIVE ATTITUDE, WITH ENTHUSIASM, TO ACHIEVE THE NECCESSARY (sic) REQUIREMENTS FOR EXPANDING HIS CAREER HORIZONS. NEEDS TO ANALYZE ONES (sic) SELF AND GAIN POSITIVE MOTIVATION.
Kowchuck placed a checkmark next to the statement on the form: "Unless there is a significant improvement in performance, demotion, reassignment or separation is indicated." His written comments provided "JACK'S PERFORMANCE WILL BE REVIEWED AGAIN IN THE NEXT 60 TO 90 DAY'S (sic). IF A DEFINITE IMPROVEMENT IS NOT SHOWN IN THAT TIME FRAME, ADDITIONAL ACTION WILL BE TAKEN."
In this evaluation, Colgan's overall performance was originally rated on the scale at about 3.5; however, this mark was crossed out and 4.0 "below requirements," was marked instead. Parow had instructed Mittelhauser, the human resources manager, to downgrade the rating from 3.5 to 4.0, and Mittelhauser initialed the change because Parow believed he was not allowed to touch the form. Mittelhauser stated at his deposition that he did not recall any instance in which either he or another supervisor downgraded an employee's initial numerical evaluation and that a numerical rating of 4.0 was the lowest evaluation he had ever seen. Despite this evaluation, Colgan received a raise of $13.00 per week on September 1, 1986. In their depositions, the various Fisher personnel offer three general explanations for Colgan's poor evaluation: his failure to embrace and to follow the Kaelin "just-in-time" program; his leaving work early; and his refusal and/or failure to produce budgets for his three departments when requested by his supervisor, Kowchuck.
However, the primary basis for the poor evaluation was that Colgan did not adequately implement the Kaelin program in his departments. Parow stated that he received complaints from the consultants hired to implement the Kaelin system because Colgan "was not following the program, and his attitude seems that he does not want to." The second alleged problem with Colgan's performance, which is not mentioned on the performance evaluation, is that Colgan generally left the plant early. Mittelhauser, Parow, Kowchuck, and Hundley each stated that Colgan often left during the seven-minute "wash-up time" before the 4:00 p.m. close of the shift so he could beat the traffic. The third alleged problem involved a dispute between Kowchuck and Colgan in which Colgan alleges that Kowchuck asked for Colgan's budgets for his three departments overnight even though Kowchuck had three to four weeks to produce those budgets and had given other supervisors two weeks to complete theirs. Kowchuck told Parow that Colgan refused to do the budget for his three departments. Parow stated, however, that Colgan had never before refused to do a budget in his previous 12 to 13 years as a supervisor.
Colgan appealed his performance evaluation to a committee comprised of Parow, Kowchuck, and Mittelhauser, but it declined to change the evaluation. During the meeting, Parow asked Colgan why he did not stay late if he was overworked. Additionally, Mittelhauser said to Colgan "You don't seem to care about your job, your company or your people." Parow also stated that Colgan's appeal of his performance evaluation was the only appeal in which he had ever participated.
On November 24, 1986, Fisher implemented a "Workforce Reduction Policy for Salaried Employees" ("reduction policy"), setting forth the factors to be considered in laying off employees. It previously had not had such a written policy. On December 5, 1986, 11 days later, Colgan was notified of his termination pursuant to section III(C)2c of Fisher's reduction policy which provided that, after agency and temporary part-time personnel, those regular employees who received a performance rating less favorable than 3.0 would be selected for termination first. Colgan's duties were added to those of two younger Fisher employees, ages 44 and 27 years. Four other employees in the same category as Colgan (regular, full-time) let go on the same day were 31, 33, 37, and 34 years old.
Colgan filed a charge of age discrimination with the EEOC on July 16, 1987, and he filed his complaint in this action in the United States District Court for the Western District of Pennsylvania on December 5, 1988. In the district court he asserted claims under the ADEA and under state law for intentional infliction of emotional distress and alleged that he had "duly exhausted his administrative remedy and satisfied all jurisdictional prerequisites to suit."
Colgan moved to withdraw voluntarily his claim for intentional infliction of emotional distress in August 1989 and Fisher moved for summary judgment on the ADEA claim. On August 17, 1989, the district court filed a memorandum order dismissing the emotional distress claim and denying Fisher's motion for summary judgment even though Fisher had not yet filed a reply brief to Colgan's answering brief on its motion. At a subsequent pretrial conference, the court recognized that it had ruled before Fisher filed its reply brief and at that time it granted Fisher's motion for summary judgment and dismissed Colgan's complaint in its entirety.
In its opinion granting summary judgment the district court explained that Colgan's July 16, 1987, charge with the EEOC was not timely because he filed it more than 300 days after his negative performance evaluation in August 1986. This period is critical because, as we will explain below, 29 U.S.C. § 626(d) provides that in the circumstances of this case an ADEA action may not be commenced unless a charge of unlawful discrimination is filed with the EEOC within 300 days of the alleged unlawful practice. The court stated:
[Colgan] has taken the position in this litigation that [Fisher's] discriminatory employment decision was not his actual termination, but instead was his allegedly false August, 1986 evaluation.
Colgan v. Fisher Scientific Co., 747 F. Supp. at 301 (citing Colgan Affidavit para. 30; Memorandum in Opposition to Defendant's Motion for Summary Judgment at 10 (Aug. 14, 1989); Transcript of Pretrial Conference at 17 (July 30, 1990)).
Having determined that the evaluation was the discriminatory act, the court reviewed the Supreme Court's decisions in United Airlines, Inc. v. Evans, 431 U.S. 553, 97 S. Ct. 1885, 52 L. Ed. 2d 571 (1977) (seniority system that gives present effect to past discriminatory conduct is not a continuing violation absent allegation that the system was intentionally designed to discriminate), Delaware State College v. Ricks, 449 U.S. 250, 101 S. Ct. 498, 66 L. Ed. 2d 431 (1980) (discriminatory denial of tenure, rather than resulting nondiscriminatory termination of employment one year later, triggers limitation period), and Lorance v. AT & T Technologies, Inc., 490 U.S. 900, 109 S. Ct. 2261, 104 L. Ed. 2d 961 (1989) (charge that change to seniority system that allegedly intentionally discriminated on basis of gender must be filed within a time measured from the change in seniority system, the discriminatory event, rather than subsequent demotions, its later effect). The court noted that these Title VII cases were applicable in determining whether there had been a timely exhaustion of administrative remedies in ADEA cases. Colgan, 747 F. Supp. at 301 & n.3. The district court stated that the Lorance Court had upheld the district court's grant of summary judgment for the employer based on untimeliness of the charge in a situation in which in 1979 the employer had adopted a seniority system which was not alleged to be discriminatory on its face or as applied because the plaintiffs did not file their administrative charges until 1983 when they were demoted pursuant to the seniority system. Id. at 302. The district court quoted a negative example discussed in Lorance:
Indeed, a given plaintiff could in theory sue successively for not being promoted, for being demoted, for being laid off, and for not being awarded a sufficiently favorable pension, so long as these acts -- even if nondiscriminatory in themselves -- could be attributed to the 1979 change in seniority. Our past cases, to which we adhere today, have declined to follow an approach that has such disruptive implications.
Id. (quoting Lorance, 490 U.S. at 912-13, 109 S. Ct. at 2269).
The district court rejected Colgan's argument that our decision in Bonham v. Dresser Industries, Inc., 569 F.2d 187 (3d Cir. 1977), cert. denied, 439 U.S. 821, 99 S. Ct. 87, 58 L. Ed. 2d 113 (1978), required that the limitations period run from the date of his discharge. Bonham held that the date of notification of termination if it coincides with the employee's last day of work rather than the date that benefits terminate starts the limitations period. The district court distinguished Bonham on its facts, stating that in Bonham the plaintiff had alleged that his termination was discriminatory; here, Colgan asserted that his performance evaluation, which preceded his termination, was the discriminatory act. Colgan, 747 F. Supp. at 302. Quoting from Bonham, the court stated:
The [limitations] period does not begin to run until the employee knows, or as a reasonable person should know, that the employer has made a final decision to terminate him, and the employee ceases to render further services to the employer.
Id. (quoting Bonham, 569 F.2d at 192). The district court determined that this language had been undercut by the Supreme Court's subsequent decision in Lorance which held that an employee is required to file a timely administrative charge upon suffering a concrete harm from a "patently" discriminatory seniority system. Colgan, 747 F. Supp. at 303 (citing Lorance, 490 U.S. at 907 n.3, 109 S. Ct. at 2266 n.3).
The district court then stated that "we find that [Colgan] was put on notice at the time of his evaluation that his employment status had been impacted." Id. (emphasis added). Noting that Colgan's evaluation expressly provided that he would be reviewed again in 90 days and that, absent significant improvement, he would be subject to demotion, reassignment, or separation, the court concluded that:
in effect, [Colgan] was placed on probationary status by the terms of this evaluation at a time when his employer was suffering severe economic difficulties. Under these circumstances, [Colgan] received unequivocal notice that he had suffered a concrete harm, which ...