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FARRELL v. PLANTERS LIFESAVERS CO.

October 5, 1998

Susan Farrell, Plaintiff,
v.
Planters Lifesavers Company and Nabisco, Inc., Defendants.



The opinion of the court was delivered by: GREENAWAY

GREENAWAY, JR., District Judge,

 This matter comes before the Court on four motions: (1) the motion for summary judgment of Roberts & Finger, LLP, counsel for defendants Planters LifeSavers Company ("PLC") and Nabisco, Inc. ("Nabisco") (collectively "Defendants"); (2) the cross-motion of Kaiser, Saurborn & Mair, P.C., counsel for plaintiff Susan Farrell ("Farrell"), to compel discovery and preclude evidence withheld by Defendants; (3) Defendants' motion appealing Magistrate Judge Haneke's February 19, 1998 order denying their motion to compel discovery; and (4) Defendants' motion appealing Magistrate Judge Haneke's May 27, 1998 rulings with respect to the pretrial order.

 This is an employment discrimination and breach of contract action. Farrell alleges sex discrimination in her title, grade and pay. She also alleges that Defendants terminated her employment in retaliation for her allegations of sex discrimination and because she rebuffed her supervisor's sexual advances. Farrell also claims that Defendants fired her without cause in breach of an implied employment agreement. For the reasons set forth below, the Court shall grant Defendants' motion for summary judgment but deny as moot (1) Farrell's cross-motion to compel discovery and to preclude evidence withheld by Defendants; (2) Defendants' motion appealing Magistrate Judge Haneke's February 19, 1998 decision denying Defendants' motion to compel discovery; and (3) Defendants' motion appealing Magistrate Judge Haneke's May 27, 1998 rulings with respect to the pretrial order.

 FACTS

 In 1994, PLC was an operating company of Nabisco. *fn1" At that time, PLC's facility was located in Winston-Salem, North Carolina. *fn2" Beginning in the early 1990s and continuing until 1997, PLC undertook a series of cost-cutting measures. These measures included the elimination of middle-management positions and the overall reduction of its work force. As part of this cost cutting process, in 1992, PLC hired Douglas DeLong ("DeLong") as Director of Materials Management. DeLong's responsibilities included, inter alia, formulating new approaches for reducing operating costs in the Materials Management department. DeLong reorganized the Materials Management department and brought the Packaging Services, Purchasing, Graphic Design and Production Planning departments under his supervision in Materials Management. The heads of these four above-mentioned departments reported to DeLong, who in turn reported to a Vice-President.

 In or about August 1993, DeLong's supervisor, Norm Jungmann, PLC's Vice-President of Operations, instructed DeLong to prepare a proposal setting forth those measures that he (DeLong) believed would result in cost savings for the Materials Management department. In his proposal, *fn3" DeLong recommended, inter alia, consolidating the Packaging Services and the Graphic Design departments and restructuring the Purchasing department. See DeLong Aff., Ex. A. However, due to various business factors including the implementation of certain cost saving initiatives such as a new Supply Chain System, *fn4" DeLong recommended that this particular suggestion in his proposal not be implemented until late 1994 or early 1995.

 In November or December 1993, Gary Eckenroth, Vice-President of Human Resources and Administration for PLC, and Bruce Wood, President of PLC, decided to discharge the Director of Packaging Services, Ronald Yonker, for unsatisfactory performance. Yonker had reported directly to DeLong.

 At some point before Yonker's termination became effective, the Human Resources department at PLC decided to eliminate Yonker's title of 'Director, Packaging Services" and retitle the position "Senior Manager, Packaging Services". *fn5" PLC made this decision, in part, because after DeLong reorganized the Materials Management department, Yonker's peers in that department were titled "Senior Manager" *fn6" or below and reported to a Director, DeLong. PLC preferred that a director not report to another director. *fn7" However, PLC did not downgrade Yonker's title when DeLong reorganized the Materials Management department because it was Nabisco's policy to avoid downgrading an incumbent's title or grade *fn8" after restructuring a department where a substantial part of the responsibilities remain with the position. *fn9" Further, Yonker had held the title of "Director" since the beginning of his employment with PLC in 1974. Thus, Yonker's title was "grandfathered" as a "Director" title despite the fact that his position ranked lower in the Materials Management department after the reorganization. *fn10"

 PLC's Hiring of Farrell

 In late 1993 or early 1994, PLC began recruiting for both a packaging engineer and another person to replace Yonker as the head of the Packaging Services department. Acting through a recruitment agency, PLC approached Farrell about the packaging engineer position. At the time, Farrell was working as a packaging engineer for McCormick and Company in Hunt Valley, Maryland. Farrell agreed to go to Winston-Salem on January 25, 1994, to interview for the packaging engineer position at PLC.

 Either shortly before or during Farrell's interview, PLC decided that based on her qualifications, *fn11" she should interview for the newly created Senior Manager, Packaging Services, position rather than the packaging engineer position for which PLC had recruited her. Farrell agreed to interview for the Senior Manager, Packaging Services, position.

 Due to an error on PLC's part, one of Farrell's interviews was with Yonker, the person she would be replacing. PLC had not yet notified Yonker of his termination so Yonker believed that Farrell was interviewing for another position other than his own. As a result of seeing how PLC treated Yonker, Farrell sought assurances regarding the job security she would have if she accepted the position. DeLong assured her that PLC had repeatedly warned Yonker about his performance. DeLong added that she would only be fired for poor performance.

 By letter dated February 4, 1994, Larry Norvell, Manager of Human Resources at PLC, formally extended an offer of employment to Farrell for the position of Senior Manager, Packaging Services. The yearly salary for the position was $ 90,000 and a signing bonus of $ 7,500. As part of its hiring relocation package, PLC agreed to purchase Farrell's home in Maryland for $ 240,000. Norvell's letter also added that PLC would pay for relocation back to Farrell's place of origin or closer, if her employment with PLC ended within the first 24 months of employment "due to performance concerns or position elimination". Farrell Cert., Ex. B. Farrell accepted the offer of employment by letter dated February 11, 1994.

 Farrell commenced her employment at PLC on March 28, 1994. PLC gave her a copy of its employee handbook. Farrell assumed most of the responsibilities that Yonker had previously performed and she reported directly to DeLong. Seven employees reported directly to Farrell, including five packaging engineers. Farrell's department serviced all of the packaging design and implementation requirements for the Planters and LifeSavers product lines.

 Farrell's Proposal to Reevaluate her Title and Grade

 During the hiring process, Farrell had requested the title of "Associate Director"instead of "Senior Manager". PLC told her that the title of the position was "Senior Manager" but she could seek a reevaluation of the title after she was hired if she felt it was appropriate. In April or May 1994, Farrell asked DeLong and Eckenroth how she should go about requesting a reevaluation of her job title and salary grade, as well as the salary grades of her direct reports. Eckenroth told her to contact Tony Brown, Manager of Employee Relations, who would assist her with the process of making a review request to Nabisco's Compensation Group. *fn12"

 Eckenroth, DeLong and Brown assisted and supported Farrell in her efforts in requesting a reevaluation of her position, as well as the salary grades of her direct reports. Karen Felix-McAllister, a Compensation Analyst in Nabisco's Compensation Group, told Farrell what information she needed to submit to Nabisco in order to have her request evaluated. From June through August 1994, Farrell gathered information including job descriptions relating to those individuals at PLC and Nabisco whom she believed performed functions comparable to her and her direct reports. Farrell concluded that her position and the positions of her direct reports were not titled and/or graded properly as compared to other employees within Nabisco.

 In or about September 1994, PLC's Human Resources department submitted Farrell's formal reevaluation proposal to Nabisco's Compensation Group. Farrell proposed that the managers who reported to her be upgraded from a grade 10 to a grade 12. In addition, she requested that her own title, "Senior Manager, Packaging Services", be upgraded to the title of "Director, Packaging Services", and that her grade level of 14 be upgraded commensurate with the change in title. DeLong and Eckenroth reviewed and approved Farrell's proposal before its submission.

 Felix-McAllister reviewed Farrell's proposal. Felix-McAllister was responsible for position evaluations and reevaluations in several areas (including materials management) within Nabisco and its operating companies, including PLC.

 Nabisco's process for re-evaluating job positions in 1994 is set forth in Nabisco's 1993-1994 Salaried Employees Compensation Guidelines. Felix-McAllister Aff., Ex. A. The guidelines require that a Compensation Analyst develop a scope and impact of the position that she is evaluating so that she can make internal and external comparisons to other positions. Some of the factors that may be used to determine the scope and impact of a position include: (1) sales dollars; (2) profits; (3) number of people in the department that the position is responsible for; (4) the budget for the department; (5) the function that the individual is performing; (6) the responsibilities of the position; and (7) the number of levels down from the President of the business.

 After determining the position's scope, the Compensation Analyst looks at the internal equity of the position. She determines whether the position is correctly aligned within the organizational structure of the position's department in relation to the entire company. In order of importance, the Compensation Analyst looks at the internal equity within the position's (1) business unit (such as the Materials Management department at PLC); (2) similar business units; and (3) all across Nabisco.

 In addition, the Compensation Analyst also conducts an external analysis of the position. Nabisco participates in several external surveys that compile data from other companies and provide comparison information relating to positions in a particular industry. Nabisco used the William M. Mercer Food Industry Group Survey for PLC.

 Once she completes the analysis of internal and external factors, the Compensation Analyst determines whether there should be a change in the title or grade of the position.

 Felix-McAllister reviewed Farrell's proposal in accordance with Nabisco's 1993-1994 Salaried Employees Compensation Guidelines. In determining the scope and impact of Farrell's position, Felix-McAllister considered several factors: the number of employees that reported directly to Farrell; the level of Farrell's supervisor, DeLong; the number of levels that Farrell was below the President of PLC; PLC's sales revenue; and Farrell's job responsibilities.

 Based on the scope of Farrell's position, Felix-McAllister determined that Farrell's position was comparable to the positions within Farrell's business unit (the Materials Management department) held by Phil Bunch and Peggy Bryan, both Senior Managers. Felix-McAllister opined that both Bunch and Bryan had similar areas of responsibility and had comparable reporting obligations compared to Farrell.

 Bunch was the Senior Manager of Purchasing at PLC. His position was graded at a level 14 and he reported to DeLong (Farrell's supervisor). Like Farrell, there were three levels between Bunch and the President of PLC. Fourteen employees reported directly to Bunch whereas only seven employees reported directly to Farrell. Bunch was responsible for purchasing materials (including packaging materials) for PLC.

 Bryan was the Senior Manager of Graphic Design at PLC at a grade level 14. She also reported to DeLong and had three levels between her and the President of PLC. Bryan had five employees reporting directly to her. She was responsible for the graphic design of packaging for PLC.

 Felix-McAllister concluded that Bunch and Bryan were Farrell's peers in her business unit (the Materials Management department) and at PLC. Bunch and Bryan, both Senior Managers like Farrell, reported to the same supervisor as Farrell, had a similar number of persons reporting to them and were the same number of levels (three) below the President of PLC as Farrell. Based on her internal analysis of PLC, Felix-McAllister determined that Farrell's grade and title were appropriate and any change in her title or grade would create inequities within the Materials Management department.

 Felix-McAllister then looked at comparable positions within similar business units at Nabisco. The reevaluation request that Farrell had submitted suggested three individuals for comparison purposes: William Haughey, James Scott and Walter Braun.

 William Haughey held the position of Director of Packaging Engineering in the Engineering and Operating Planning Division of the Nabisco Biscuit Company ("NBC"), an operating company of Nabisco, from 1992 to June 1994. *fn13" Haughey was responsible for designing and implementing packaging systems machinery and special equipment for the manufacturing process. His salary grade level was 16 and he earned $ 119,500 yearly. He reported to Donald Boyle, Senior Director of Package Engineering and Product Control for NBC. Twelve employees reported directly to Haughey. In June 1994, NBC promoted Haughey to Senior Director of Package Engineering and Product Control. NBC increased his salary grade to a level 17 and increased his salary to $ 132,700 per year.

 Felix-McAllister concluded that Haughey's position was not similar to Farrell's position. Farrell's position primarily involved designing and developing appropriate packaging for products. On the other hand, Haughey's position involved designing and implementing package systems machinery and special equipment for the manufacturing process.

 In 1994, James Scott held the position of Director of Package Development at NBC. *fn14" Scott's salary grade was 16 and his salary was $ 118,100 per year. Scott reported directly to W.R. DeLauder, the Vice-President of Product Development for NBC, who in turn reported directly to the President of NBC. Seventeen employees reported directly to Scott.

 In 1994, Walter Braun held the position of Director of Packaging Systems (Specialty Products) in the Operations Support division of the Specialty Products and Fleischmann's business units of Nabisco. Braun's salary grade was 16 and his salary was $ 91,000 per year. *fn15" Braun reported directly to James Windland, the Senior Director of Operations Support, who in turn reported to the President of Specialty Products. Seven people reported directly to Braun. According to Nabisco's organizational charts, Braun's position was at the same level as the position of Director of Materials Management for PLC; the position Farrell's supervisor, DeLong, held.

 In comparing Scott's and Braun's positions to Farrell's, Felix-McAllister looked at several factors set forth in the compensation guidelines, including: sales revenue of the business units, the level of their supervisor, number of reports, levels down from the President of the business unit and the budget allocated for packaging materials in each unit. See supra p. 17.

 In 1994, the combined planned sales revenues for Nabisco's Specialty Products and Fleischmann's divisions were $ 973.5 million. The planned sales revenues for NBC was $ 3.247 billion and for PLC, $ 1.174 billion. The combined packaging materials budget for Nabisco's Specialty Products and Fleischmann's divisions was $ 79.9 million. The packaging materials budget for NBC was $ 217.1 million and for PLC, $ 91.3 million.

 Felix-McAllister concluded that, in comparison with Scott, Farrell's position had less scope and impact. Specifically, Scott's business unit (NBC) had more than double the sales revenues and packaging materials budget that PLC had. Moreover, Scott reported directly to a Vice-President, worked only two levels down from the President of NBC and supervised ten more employees than Farrell.

 Felix-McAllister concluded that, in comparison with Braun, Farrell's position also had less scope and impact. Although PLC had a larger packaging materials budget and planned sales revenue than the combined Nabisco Specialty Products and Fleischmann divisions, Braun reported to a higher level supervisor (Senior Director) than Farrell. In addition, Braun was only two levels below the President of Specialty Products and Braun was a peer of DeLong, Farrell's supervisor. *fn16"

 Felix-McAllister also evaluated Farrell's position using the William M. Mercer Food Industry Group Survey, which consisted of data provided by an outside independent consultant. Utilizing this survey data, Felix-McAllister compared Farrell's position to similar positions in the food industry. Incorporating this data into her decision-making process, Felix-McAllister concluded that Farrell's position was properly graded and titled. *fn17"

 On or about October 14, 1994, Felix-McAllister submitted her determination to Joel Goldberg, Nabisco's Director of Compensation. Goldberg approved Felix-McAllister's decision. Felix-McAllister then communicated her decision to PLC's Human Resources department, who in turn notified Farrell.

 After learning that Nabisco's Compensation Group had denied Farrell's request for an increase in job grade and title, DeLong asked Tony Brown in PLC's Human Resources department whether Farrell could appeal the determination. DeLong Dep. at 230:3-10. Brown told him the decision was final. Id.

 Farrell's Allegations of Sex Discrimination

 In November 1994, Farrell attended an annual packaging exposition in Chicago called Pack Expo. While in Chicago, James Scott, Director of Package Development at NBC, invited her to a dinner at which Nabisco would be receiving a packaging award. At the dinner, Scott mistakenly introduced Farrell as "director" to various male employees in the Nabisco organization.

 Shortly thereafter, in late November 1994, Farrell approached Tony Brown and asked him to review her request for an increase in grade and title. Farrell told Brown that at the dinner in Chicago she met various white males whom she considered to be her peers and they all held the title of "director" or above. Farrell told Brown that she "was wondering if there was an attempt at discrimination" based on sex with respect to her title and grade. Farrell Dep. 528:6-22. Brown told her he would look into it. However, he never spoke to DeLong or Eckenroth about Farrell's allegations. Farrell never raised the subject of discrimination with anyone other than Brown. See id. at 531:6-10.

 Farrell's Performance

 Beginning in late summer or early fall of 1994, Eckenroth and DeLong began receiving negative feedback about Farrell from some members of PLC's management concerning her availability, attitude and job performance. Don Valenzano, Director of Financial Planning & Analysis for LifeSavers, testified that Trish McKale, Director of Hard Candy; Candy Borreson, Director of Chewy Candy/New Products; and Marcia Moll *fn18" expressed to him their dissatisfaction with Farrell. McKale, Borreson and Moll, individually complained to Valenzano that Farrell was rarely around to provide guidance and leadership. McKale also told Valenzano that Farrell and her staff ...


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