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Parker v. Federal National Mortgage Association

August 14, 1984


Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 82-C-4254 -- Milton I. Shadur, Judge.

Pell, and Flaum, Circuit Judges, and Henley, Senior Circuit Judge.*fn*

Author: Pell

PELL, Circuit Judge

Defendant-appellee Federal National Mortgage Association (FNMA) dismissed appellant Cletus Parker after a sweeping staff reorganization eliminated twenty-three positions at FNMA's Chicago office. Parker brought this suit against his former employer alleging that FNMA's decision whom to dismiss was discriminatorily motivated in violation of the Age Discrimination in Employment Act, 29 U.S.C. §§ 621-634 (ADEA). The district court entered summary judgment in favor of FNMA, and Parker appeals maintaining that trial was necessary to resolve disputed factual issues. At issue on appeal is whether the submissions of the parties give rise to a reasonable inference of discriminatory motive.


The undisputed facts in this case are complex, but for purposes of deciding the narrow issue on appeal, we may distill them to an essential few. FNMA is a publicly held United States corporation with its headquarters in Washington, D.C., and regional offices in Philadelphia, Dallas, Los Angeles, Atlanta, and Chicago. The corporation purchases mortgages from primary lenders and services the discounted obligations. Our principal concern is with the Chicago office, where six divisions of FNMA operated until 1981. One of these divisions, the Project Mortgage Division, serviced mortgages on multi-unit properties such as hospitals, nursing homes, and apartment buildings. Prior to 1981, the Project Mortgage Division comprised four servicing teams and one purchasing team. Each team consisted of one Senior Loan Representative (SLR), who supervised the team, one Loan Representative, one or more Loan Technicians, one Secretary, and one or more Clerks. In 1981, Parker (age 62) was one of the five SLR's in the Project Mortgage Division, the others being Thomas Monico (age 31), Meredith Wright (age 55), Craig Bromann (age 31), and Robert Haren (age 57, SLR for the purchasing team). Since at least 1978, Parker's supervisor Howard Morton annually evaluated Parker and summarized his opinions in a formal document called an "Employee Performance and Development Review." Parker received marks of "excellent" and "superior" in all seven evaluation categories, but he never received a mark of "exceptional," the highest possible evaluation. Morton also praised Parker for his technical abilities in accounting and auditing. The only consistently negative comment about Parker was that he had a somewhat autocratic personality and had difficulty "interfac[ing] with subordinates." Morton also wrote formal evaluations of Monico, who received marks of "excellent," "superior," and, not infrequently, "exceptional." In 1978, Morton entered the following description of Monico on the Employee Performance and Development Review: "This is one of the younger members of the Regional staff who, with the others, comprise [sic] a strong asset base that portends well for the Corporation."

In 1978, FNMA officials in Washington directed the Chicago regional office to reduce the number of Project Mortgage service teams from four to two. The Washington office ordered the reduction because the economic recession of the late 1970's had reduced the number of mortgage obligations lenders desired to discount. The task of selecting whom to retain as supervisors of the remaining two teams fell to Morton. Morton selected Monico and Wright because, in his words, "Mr. Monico's job performance had always been consistently rated as superior, . . . [and] I felt that Mr. Wright's performance and qualifications were better than the other two Senior Loan Representatives." Rather than dismiss Parker and Bromann, Morton elected to retain them as SLR's on the remaining two servicing teams. Their positions, however, were designated "overfill," and Morton contemplated that Parker and Bromann would be placed in other positions within the Chicago office as soon as vacancies occurred through the normal course of attrition.

In November 1981, a more pervasive change came to the Chicago regional office. FNMA officials in Washington decided that the Atlanta and Los Angeles regional offices should service project mortgages from all regions of the nation. The Chicago office transferred its loan portfolio to Los Angeles and Atlanta, and it consolidated its Project Mortgage Division into one new division called the Production and Loan Administrative Division. The consolidation resulted in the elimination of twenty-three positions in the Chicago office, eighteen of which were to come from the former Project Mortgage Division.

The task of deciding whom to retain fell to Morton, once again, and to four other FNMA regional officials. Under the new Chicago organizational structure, there would be one SLR position for the purchasing of mortgages, and that position went to Haren, who had supervised the purchasing of mortgages for the Project Mortgage Division. There would also be a new position, called Manager, Loan Administration, and Monico was designated to fill that position because, in Morton's words, Monico's record showed "prior superior qualifications and performance." The Marketing Division required two new SLR's, and Wright and Bromann were placed in those positions because they had expressed interest in the area and had favorable interviews for the position. Eight other members of the Project Mortgage Division whose positions were eliminated were transferred to other positions within the Chicago office. In some of those eight cases, the transferred members of the Project Mortgage Division forced another employee out of the transferee position. The bumping process was utilized when the transferred employee was considered better qualified than the incumbent in the transferee position. Eight members of the Project Mortgage Division for whom there was no transferee position were terminated. Parker and Virginia O'Rourke (age 59, Project Mortgage Loan Representative) were dismissed. Bumping was considered in the case of Parker, but all the employees in the loan representative positions, the work classification beneath SLR, were considered better qualified for those positions than was Parker. Morton stated he did not consider transferring Parker to the next lower rank, loan technician, because that would have entailed a $20,000 reduction in salary and he doubted Parker would have accepted such a change.

In December 1981, Morton met with Parker and informed him that he could inquire on Parker's behalf into a transfer for Parker to the Atlanta regional office, which perhaps needed an additional SLR. Morton in fact obtained approval for Parker's transfer to Atlanta, but Parker decided to decline the transfer for three reasons. First, he did not want to sell his house at the time because selling prices were depressed. Second, the transfer would require Parker's wife to give up her current position. Third, Parker had no guarantee that his new job in Atlanta would be a permanent one. Parker thus went into involuntary early retirement. As an early retiree, he received a smaller pension from FNMA than the one he would have received had he remained an employee until the customary retirement age.

After exhausting his administrative remedies, Parker brought this suit in August 1982 alleging age discrimination under the ADEA. Following extensive pretrial discovery and the submission of depositions, affidavits, and other documentary evidence to the district court, FNMA moved for summary judgment. Judge Shadur granted FNMA's motion, reasoning that Parker had failed to show the court he was prepared to present evidence at trial that would demonstrate that FNMA discriminated against him because of his age. Judge Shadur acknowledged that summary judgment often is inappropriate when the case turns on an issue of motive and intent, but he held that summary judgment was provident in this case because "plaintiff has no indications of motive and intent supportive of his position to put on the scales for weighing."


Section 623(a) of the ADEA, as codified, makes it unlawful for an employer "to fail or refuse to hire or to discharge any individual or otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's age." 29 U.S.C. § 623(a). [Emphasis added.] Thus, an employer does not violate the ADEA merely by discharging an employee whose age falls within the protected category. Rather, an employer incurs liability under Section 623(a) only if he discharges or otherwise discriminates against an employee "because of" the employee's age. In cases brought under the ADEA, this court has applied the method of showing causation established in McDonnell Douglas v. Green, 411 U.S. 792, 36 L. Ed. 2d 668, 93 S. Ct. 1817 (1973). See Monroe v. EEOC, 736 F.2d 394, slip op. at 12-14 (7th Cir. 1984); Golomb v. Prudential Insurance Co., 688 F.2d 547, 550 (7th Cir. 1982). Cf. Mason v. Continental Illinois National Bank, 704 F.2d 361, 365-66 (7th Cir. 1983). Under the McDonnell Douglas method:

[T]he plaintiff [first] has the burden of proving by the preponderance of the evidence a prima facie case of discrimination. Second, if the plaintiff succeeds in proving the prima facie case, the burden shifts to the defendant "to articulate some legitimate nondiscriminatory reason for the employee's rejection." Third, should the defendant carry this burden, the plaintiff must then have an opportunity to prove by a preponderance of the evidence ...

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