change in the nature of the business enterprise, more than a "mere restructuring of the hours or conditions of employment." Systems Manag., Inc. v. NLRB, 901 F.2d 297, 304 (3d Cir. 1990).
LEI is looking at the trees rather than the forest by picking out each minor change made with respect to benefits and policies. Companies universally change such benefits and policies of an acquired business to conform with their own way of doing business. The changes must be substantial; they were not substantial in this case.
Similarity of Supervisory Personnel
Ann Keough remained the manager responsible for local day-to-day operations. Though a new team of administrators were put into place as part of LEI' s acquisition, such a change in upper level personnel is not enough. Only when such a change in upper management has a "substantial transformation in the basic operations" of a facility is there a "change" which would impact this analysis. See United Food, 768 F.2d at 1473. There was no such "substantial transformation" here.
Similarity in Machinery, Equipment, and Production Methods
This prong is irrelevant in a nonmanufacturing context and will not be considered.
Similarity of Products or Services
LEI seeks to rewrite this prong of the analysis as "similarity of clientele." Much is made about LEI's shedding of EHG's "low-priced, high-volume patrons, and replacing them with LEI's targeted 'upscale' clientele." The type of service offered, however, remained the same. Whether those services were provided to executives or minimum wage workers matters not.
The Ability of the Predecessor to Provide Relief
This element is irrelevant here, as Vanderhoof's request for leave under the FMLA occurred months after the acquisition by LEI.
Based upon a weighing of all of the elements, the Court must conclude that LEI was a successor employer as contemplated by the FMLA and that Vanderhoof had the requisite length of time of employment to come within the protections of the FMLA. Vanderhoof was an "eligible employee" and, consequently, plaintiff's motion for summary judgment on that issue is GRANTED.
AGE DISCRIMINATION CLAIM
Defendants move for summary judgment to dismiss plaintiff's complaint, which includes a count alleging that plaintiff was the victim of age discrimination, in violation of the New Jersey Law Against Discrimination ("NJLAD"), N.J.S.A. § 10:5-1 et seq. A NJLAD claim such as this is governed by the same standards and burden of proof analysis as are applied under the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. § 621 et seq.
To succeed on a claim of age discrimination, a plaintiff first must establish a prima facie case of age discrimination by proving that she: (1) is over forty years of age; (2) is qualified for the position in question; (3) suffered an adverse employment action; and (4) was replaced by a sufficiently younger person to permit an inference of age discrimination. Brewer v. Quaker State Oil Refining Corp., 72 F.3d 326, 330 (3d Cir. 1995).
In a reduction in force ("RIF") case, as the Court is faced with here, the prima facie elements are somewhat modified because it is improbable that a plaintiff would be replaced by someone from outside the organization. Therefore, in RIF cases, a prima facie case is established where the plaintiff can show that the plaintiff was in the protected class, was qualified, was laid off, and that other unprotected workers were retained. See Marzano v. Computer Science Corp., Inc., 91 F.3d 497, 506 (3d Cir. 1996) (quotation omitted).
The burden then shifts to the defendant, which must rebut this presumption by articulating a legitimate, nondiscriminatory reason for the adverse employment action. See St. Mary's Honor Center v. Hicks, 509 U.S. 502, 506-07, 125 L. Ed. 2d 407, 113 S. Ct. 2742 (1993); Brewer, 72 F.3d at 330. The burden then shifts back to the plaintiff to satisfy her ultimate burden of proving that the defendant's proffered reason is not the "true reason" for the decision, but instead is merely a pretext for age discrimination. Hicks, 509 U.S. at 511; Bray v. Marriott Hotels, 110 F.3d 986, 990 (3d Cir. 1997).
The plaintiff can meet this ultimate burden by proving, by circumstantial evidence, that the defendant's reason is "unworthy of credence." Armbruster v. Unisys Corp., 32 F.3d 768, 783 (3d Cir. 1994). The plaintiff must point to evidence such that "a reasonable factfinder could rationally find them 'unworthy of credence' and hence infer 'that the employer did not act for [the asserted] nondiscriminatory reasons." Fuentes v. Perskie, 32 F.3d 759, 765 (3d Cir. 1994) (citation omitted).
The Court finds that plaintiff is clearly able to make out a prima facie case in the first instance. It is stipulated that Vanderhoof was in the protected class, she was qualified, and that she was laid off. It is also clear that other unprotected workers were retained in the "front office" where Vanderhoof was employed.
Defendants confuse Third Circuit precedent by continuing to maintain that the retained workers also be "similarly situated." It is incontestable that such a requirement is not a sine qua non for a prima facie case in the context of a RIF.
In Marzano, the Third Circuit rejected a similar argument by the defendants in that case, which argued that a plaintiff must show that other "similarly situated, unprotected employees" must be treated more favorably. The court rejected the defendants' premise, which they derived from a mistaken reading of Torre v. Casio, Inc., 42 F.3d 825, 830 (3d Cir. 1994). The court stated that "Torre did not create any legal requirement such as the one that Defendants attempt to impose." Marzano, 91 F.3d at 510.
The fact that similarly situated employees were retained certainly strengthens the plaintiff's case, and makes more urgent the employer's task of providing a reason other than discrimination for its different treatment of plaintiff. But the Court [in Torre ] did not create a new legal requirement in the process, and Defendants can cite no case in this Circuit, nor do we know of any, where it was described as a requirement.
Therefore, plaintiff in the first instance is able to make out a prima facie case, which merely means that plaintiff's factual scenario shows however slightly that "discrimination could be a reason for the employer's action." Id.
As a second step, the Court must look to the defendants' proffer of a legitimate, nondiscriminatory reason for the adverse employment action to rebut the prima facie case. Here, defendants maintain that a RIF was necessary because of "business conditions" and that LEI's business plan from the outset of the acquisition was to downsize the workforce, achieve immediate economies of scale, and eliminate EHG overstaffing.
Plaintiff has the ultimate burden of rebutting this contention by providing evidence that it is a pretext for discriminatory practices. The question of why an employer took an adverse employment action against a particular plaintiff is clearly a factual question. See Chipollini, 814 F.2d at 899. By pointing to evidence "which calls into question the defendant's intent, the plaintiff raises an issue of material fact which, if genuine, is sufficient to preclude summary judgment." Id. Plaintiff need not provide "additional evidence" of discrimination; this requirement would "topple the complex evidentiary edifice constructed by the Supreme Court." Marzano, 91 F.3d 497 at 510.
Plaintiff herein makes several points. First, Vanderhoof claims that she was relieved of her job because she did not fit the "youthful" image that LEI wished to project. She points to the ages of the front office employees at Morristown who remained after her termination, all of whom were younger than 35. Vanderhoof also points to the trend towards younger front office staff members at other LEI facilities and even the officers of LEI.
Additionally, plaintiff points to monthly management reports and testimony of LEI officers to allege that the Morristown operation was profitable and that because she was the only employee to be terminated in the Morristown office,
the RIF explanation was a pretext.
Based upon all of plaintiff's responses to defendants' proffer, the Court is convinced that summary judgment on the issue of age discrimination would be inappropriate. Defendants would have this Court grant summary judgment because Vanderhoof is unable to provide additional evidence to support her contentions of pretext. Defendants rely for this proposition on cases from other circuits which seemingly require more evidence to get past the summary judgment hurdle than the Third Circuit does. Because the Third Circuit does not require such additional evidence, plaintiff's rebuttal is sufficient to withstand summary judgment on her age discrimination claim.
Defendants move for summary judgment dismissing plaintiff's claim that the defendants violated the FMLA by not reinstating her.
Under the FMLA, an employer need not provide an employee "any right, benefit, or position of employment other than the right, benefit, or position to which the employee would have been entitled had the employee never taken leave." 29 U.S.C. § 2614(a)(3). "An employee has no greater right to reinstatement or to other benefits and conditions of employment than if the employee had been continuously employed during the FMLA leave period." 29 C.F.R. § 825.216(a).
Defendants allege that plaintiff was validly terminated due to a RIF and such a termination is not a violation of the FMLA.
Because the Court found above that there was a sufficient question of fact as to the validity of defendants' contention that plaintiff was terminated due to a RIF, summary judgment dismissing the FMLA claim is inappropriate at this time. See Marzano, 91 F.3d at 511-12.
BREACH OF EMPLOYMENT CONTRACT
In the Third Count of plaintiff's Amended Complaint, she alleges that LEI's "handbooks, manuals, brochures, and other written material" conferred upon her "job security," such that LEI could not terminate her without good cause. Defendants have moved for summary judgment seeking to dismiss this Count.
New Jersey is an at-will employment state, meaning that an employer has the right to terminate an employee at any time, with or without notice and with or without cause, subject to certain exceptions. "Today, both employers and employees commonly and reasonably expect employment to be at-will, unless specifically stated in explicit, contractual terms." Bernard v. IMI Systems, Inc., 131 N.J. 91, 106, 618 A.2d 338 (1993).
The LEI Employee Handbook is a twenty-nine page document which plaintiff admits having received. The first ten pages are an overview of the various divisions of LEI's parent company, United Medical Corporation. The section regarding the employer's policies and procedures begins on page eleven, where it reads:
This handbook is not an employment contract. These policies represent general guidelines and if they are changed or not followed in a particular case, your recourse shall be the Problem Resolution Procedure explained elsewhere in this handbook.
Employment at United Medical and/or its divisions is at-will. That is, either you or United Medical and/or its divisions for whom you are employed may terminate the employment relationship at any time, with or without cause. The at-will relationship remains in full force and effect regardless of any statements to the contrary made by company personnel or set forth in any documents other than those signed by the Chairman or President of United Medical Corporation.
LEI Employee Handbook, attached as Exhibit 16 to Defendants' Appendix to Statement of Material Undisputed Facts ("Def. App.").
Additionally, on May 16, 1995, Vanderhoof filled out an "Application for Employment" form for LEI, which included the statement that "any employment relationship with this organization is of an 'at-will' nature, which means that the Employee may resign at any time and the Employer may discharge Employee at any time with or without cause." Application for Employment, Def. App. Ex. 50.
The seminal case in New Jersey regarding whether an employment manual constitutes a valid contract of employment is Woolley v. Hoffmann-La Roche, Inc., 99 N.J. 284, 491 A.2d 1257 (1985), modified, 101 N.J. 10, 499 A.2d 515 (1985). In Woolley, the court stated:
When an employer of a substantial number of employees circulates a manual that, when fairly read, provides that certain benefits are an incident of employment (including, especially, job security provisions), the judiciary, instead of "grudgingly" conceding the enforceability of those provisions, should construe them in accordance with the reasonable expectations of the employees.