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BERNSTEIN v. CONSOLIDATION FOODS CORP.

December 18, 1984

DAYTON BERNSTEIN, ET AL., PLAINTIFFS,
v.
CONSOLIDATED FOODS CORPORATION, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Rovner, District Judge.

MEMORANDUM OPINION AND ORDER

Dayton Bernstein ("Bernstein") and Harry Nissenson ("Nissenson") (collectively "Plaintiffs") brought this action under the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. § 621, et seq. ("ADEA") against Consolidated Foods Corporation ("Consolidated Foods"), Douwe Egberts Company ("Douwe Egberts"), Douwe Egberts Superior Company ("DESC"), and Superior Coffee Company ("Superior") (collectively "Defendants"), seeking various forms of relief for Defendants' alleged age discrimination against Plaintiffs. Subject matter jurisdiction is based on 28 U.S.C. § 1331, 1343, and is not contested.

Presently before the court is Defendants' motion, pursuant to Fed.R.Civ.P. Rule 56, for summary judgment on all claims raised in Plaintiffs' Complaint ("Complaint") or, in the alternative, for partial summary judgment with respect to Consolidated, Douwe Egberts and DESC. For the reasons set forth below, Defendants' motion is denied except as to DESC.

Factual Background

For purposes of a motion for summary judgment, this Court must, of course, view all pleadings and supporting papers in the light most favorable to the non-moving party. Trulson v. Trane Co., 738 F.2d 770 (7th Cir. 1984). Thus, the facts are stated below in the light most favorable to Plaintiffs. See Vaught v. R.R. Donnelley & Sons Co., 745 F.2d 407 (7th Cir. 1984); Trulson, 738 F.2d at 771.

Plaintiff Bernstein, born on December 8, 1927, began working for Superior Tea and Coffee Company ("Superior Tea") in 1953. Plaintiff Nissenson, born on November 11, 1919, started working for Superior Tea in 1958. Both men advanced themselves in the company: Bernstein became Vice President of Operations in 1968, then Senior Vice President of Operations in 1972; Nissenson became Vice President of Finance in the early 1970's.

In January, 1979, Douwe Egberts, a Dutch corporation, purchased Superior Tea, renamed it Douwe Egberts Superior Company ("DESC"), and began to operate it as a wholly-owned subsidiary. Before the purchase, 95% of Superior Tea had been owned by two brothers, Earl and Sanford Cohn, who were Chairman and President, respectively. Shortly after the acquisition, Bernstein and Nissenson signed three year employment contracts with Douwe Egberts' American identity, Moccomat Beverage Systems. Under these contracts, DESC's Board of Directors and Chief Executive Officer retained the right to change their titles or duties. In all other respects, the management structure remained unchanged.

In May, 1979, Douwe Egberts initiated a series of changes. Antoine Beumer was installed as Vice Chairman of DESC; upon Sanford Cohn's retirement in January, 1980, Beumer was appointed President. Also in mid-1979, Hans Van der Linden came from Douwe Egberts for the purpose of conforming DESC's accounting report to the requirements of its new Dutch parent company. He was appointed Director of Financial Control, reporting to Nissenson. At the same time, Nat Zivin was transferred to DESC from Consolidated, Douwe Egbert's parent company, as a consultant. In October, 1980, upon the retirement of Earl Cohn, Zivin became Chairman of the Board and Chief Executive Officer of DESC. Soon after, the new leadership of DESC substantially changed the responsibilities of both Mr. Bernstein and Mr. Nissenson.

1. Mr. Bernstein's Claims

In October, 1980, Zivin told Bernstein that he would no longer be Senior Vice President of Operations but instead would assume a new position, Vice President of Corporate Planning and Development. Zivin contends that he made the change because of Bernstein's allegedly autocratic management style and a perceived need for long-range planning. When informed of the change by Zivin, Bernstein expressed concern that he would not be able to operate in that position effectively because he would have no access to inside information concerning the corporation. In response, Zivin told Bernstein that he had no choice but to give the new position a try.

Several weeks later, Bernstein met with Zivin again and complained that his new position was a sham: there was nothing to do, and no one would provide him with any information. Bernstein asked Zivin "where [he] stood in the organization" and Zivin told him to "take time over the weekend to determine how [he] would fit into the company." Based on a rumor that Beumer was returning to Holland, Bernstein prepared a memorandum proposing that he be considered for President or Executive Vice President. In response, Zivin and Beumer told Bernstein that they would not consider him for either position. According to Bernstein, Zivin and Beumer would not disclose the reason for their refusal. They merely told him that no other place existed for him in the company, and they suggested that he "find employment elsewhere." In addition, they told Bernstein that he could use their telephone to make calls, that he could take time off for interviews, and that it would be in his best interest to start searching. At the same time, according to Bernstein, they said that there was nothing wrong with his abilities or job performance.

Shortly thereafter, Bernstein's secretary was transferred to someone else, and he spent the next five months working only approximately one hour per day. In March, 1981, Bernstein decided to resign from the company because of stress-related health reasons. At a meeting that included Beumer, Zivin and Bernstein negotiated a resignation agreement. By the resignation agreement, the company gave Bernstein approximately $50,000, in return for his agreement not to seek "any other remuneration, compensation or payments from [DESC] or Douwe Egberts relating to [his] employment. . . ." No discussion occurred regarding any potential age discrimination claim or any other legal claims Bernstein might have against the company. The resignation was effective March 6, 1981.

2. Mr. Nissenson's Claims

In early 1980, Nissenson found that he was sharing responsibilities for the accounting function with Hans Van der Linden, the Douwe Egberts accountant. Later that year, Dan Kulik was brought in from Consolidated Foods as a consultant. Kulik worked directly with Van der Linden, rather than with Nissenson. In October, 1980, Zivin informed Mr. Nissenson that he would be relieved of all current major responsibilities except over the credit department, and that instead he would be responsible for the equipment service department and a new cost-cutting program. Zivin contends he made the change for two reasons: Kulik had advised Zivin that a restructuring of the financial reports was necessary to improve the company's position, and Zivin believed that Nissenson's experience was well-suited to the important job of reviewing and cutting costs. In his place, Dan Kulik assumed responsibility over the Financial Control and Management Information Services departments. In January, 1981, 39-year-old Kulik was appointed to the new position of Executive Vice President of Administration, responsible for coordinating all financial and administrative functions of the company.

Mr. Nissenson began working on his new duties, spending a great deal of time reviewing expenses, preparing memoranda, and making recommendations. He was frustrated in performing his job, however, by a total lack of information and authority to make changes. Moreover, he could not work directly with those whose work he was supposed to analyze.

Nissenson began to complain to Zivin that he had no real responsibility. Nissenson recalled one such meeting where Zivin said to him, "Why don't you and I retire and go fishing." In early May, 1981, Nissenson met with Zivin and told him: "You've made a nothing out of me. . . . You've taken the job away and on that basis I feel I'm forced to retire." According to Nissenson, Zivin replied, "Harry, I'm sorry you feel that way, but maybe it would be for the best." Nissenson and Zivin discussed the terms of a resignation agreement. Again, no discussion occurred regarding Nissenson's waiver of any potential claims he might have against the company. Nissenson's resignation became effective May 8, 1981.

Discussion

Under Section 623(a) of the ADEA, it is 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). In cases brought under the ADEA, the courts have applied uniformly the test for causation established in McDonnell Douglas v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973). See Parker v. FNMA, 741 F.2d 975 (7th Cir. 1984) (and cases cited therein). Using this method:


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