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United States District Court, Northern District of Illinois, E.D

August 16, 1985


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


Charles Dale ("Dale") has filed a three-count Complaint against the Chicago Tribune Company ("Tribune"), asserting violations of (1) the Age Discrimination in Employment Act of 1967 ("ADEA"), 29 U.S.C. § 621-634, (2) the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001-1381, and (3) an Illinois common-law duty of good faith and fair dealing. Dale's claims stem from termination of his employment as Tribune's Purchasing Manager in April 1982.

Tribune now moves for summary judgment under Fed.R.Civ.P. ("Rule") 56. In addition to responding to that motion, Dale's counsel seeks to expand the scope of this action by adding a named party plaintiff under the representative action provision of ADEA, 29 U.S.C. § 626(b). For the reasons stated in this memorandum opinion and order, Tribune's Rule 56 motion is granted and Dale's motion to add a named party plaintiff is accordingly dismissed as moot.


Dale began working for Tribune as a copywriter in 1956. He held a succession of positions (leading to the department managership beginning in 1963) in the Art and Copy Department, later renamed the Creative Services Department. In 1975 Dale recommended to Tribune President Robert Hunt ("Hunt") that the Creative Services Department and the Promotions Department be merged to increase efficiency. Hunt accepted the recommendation, and Dale became assistant manager of the new entity, known as the Creative Division.

Three years later Dale met again with Hunt and reported the merger was not yielding the expected benefits because the two pre-existing departments had not been functionally merged and because there were too many managers. During the course of that meeting Hunt asked whether Dale had any interest in becoming Tribune's Purchasing Manager. Dale said he was interested in the change, and following discussions with General Manager Harold Lifvendahl ("Lifvendahl") he accepted the position. Though the Purchasing Manager had previously reported to Building Manager Bruce Cerling ("Cerling"), Dale was directed to report to Lifvendahl and to address himself to what Lifvendahl saw as serious personnel problems in the Purchasing Department. Dale's shift into Purchasing — a field in which he had no prior experience or training apart from his general managerial experience — was considered a lateral move involving no increase in compensation.

During his first months in the new position Dale participated in a three-day workshop on purchasing. He also joined the Chicago Purchasing Managers Group. Within a year of Dale's becoming Purchasing Manager, responsibility for newsprint traffic, travel planning and telephone operations were transferred to the Purchasing Department.

Throughout that period Dale continued to report to Lifvendahl, but in February 1981 Lifvendahl moved to become president of a Tribune newspaper in Florida. Thomas O'Donnell ("O'Donnell") replaced him as General Manager. For some five months Dale then reported to O'Donnell, but in June 1981 O'Donnell asked Dale to report to Cerling instead. O'Donnell said there had been too many people reporting to him, so he had to reorganize the administrative structure to make his own responsibilities manageable. Dale was apprehensive about the change because Cerling had been supervising the Purchasing Department before 1978, when Lifvendahl brought Dale in to address the serious personnel problems. Nevertheless Dale accepted the organizational change.

Those shifts in managerial structure coincided with the first several months of the tenure of Charles Brumback ("Brumback") as Tribune President. Brumback began an overall effort to reduce Tribune costs and increase corporate profits. Department heads had to commit themselves to cost and personnel reductions to meet budget reduction goals, and cost-saving equipment improvements were undertaken. In short Brumback began to make substantial changes in Tribune's management philosophy. As Dale described the change (Dale Dep. I-96):

  [The existing management team was] a long, long
  time Tribune group. We knew one another. We
  worked up through the ranks together. And I think
  we worked well together, all with problems. You
  are never without problems or personality

  But we pretty well knew how the other person
  operated, and tried to work within the system. I
  do not think Mr. Brumback wanted that kind of a
  system. I think he wanted to bring in a different
  kind of Management Team.

  And I think he would have called it, quote, a
  modern Management Team, one that is attuned to
  innovation, to new ideas, change.

  And, this is an opinion, I believe Mr. Brumback
  did not think the Management Team at the Tribune
  was capable of doing this. I believe he was

Dale's difficulties began soon after Brumback became Tribune President. Before August 1981 Brumback had apparently pressed Dale more than once as to his performance. On August 31 Dale wrote to Lifvendahl (Dale Dep. Ex. 3):

  The problem in brief, is that I think Brumback is
  setting the groundwork for my termination. It may
  come two weeks from now, or two months, but I
  think he's getting me programmed.

  It's too long to go into all the detail, other
  than he's given me a major going over on
  everything he's questioned me about — and the
  things he's picked on have been minor and basically
  have been matters of opinion. He seems to be doing
  this to a whole clutch of Tribune executives and
  managers: things we've done in the past, are
  proposing now, or have planned for the future are
  archaic and disorganized according to his lights.

When deposed three years later Dale was unable to remember the specific nature of Brumback's criticisms, noting only that Brumback was upset because Dale did not know the difference in height between a computer table and a typewriter table (Dale Dep. II-66). Dale stressed however that he would not have written to Livfendahl as he did had that been the extent of Brumback's criticism (Dale Dep. II-66-67).

On October 5, 1981 Cerling prepared a list of projects he expected Dale to complete in the upcoming months. Dale testified (Dale Dep. II-79) the list was accompanied by a letter indicating the projects were designed to remedy deficiencies Cerling perceived in Dale's performance as Purchasing Manager. All items on the list dealt with the basic purchasing operation: They included such things as preparing a purchasing manual, drafting ethical guidelines for buyers, scheduling regular staff meetings and developing a recordkeeping system, through computerization, to enable management to make informed decisions. Dale said in his deposition (Dale Dep. II-83-106) a number of those projects had been discussed and even initiated before Cerling assumed supervisory control, but few had been carried to fruition and none of the matters in issue had been routinely handled in a fashion satisfactory to Cerling.

On November 18, 1981 Cerling sent Dale a memorandum (Dale Dep. Ex. 5) beginning:

  On October 5, we had a meeting at which I gave
  you a number of projects to be completed with
  dates (attached).

  I thought it would be helpful if I documented
  other conversations and my concerns.

  Since acquiring responsibilities of Purchasing
  and Telephone, I have observed a lack of
  fundamental management techniques; these are,
  poor organization, planning, control, leadership,
  direction and knowledge.

Next the memorandum proceeded to list particular examples of Dale's shortcomings, focusing on his handling of the installation of a new telephone system designed to reduce substantially Tribune's telephone costs. Among the matters Cerling criticized were a failure to plan adequately for the space requirements of the new system;
a failure to consult adequately with the various Tribune departments in order to determine their telephone needs; errors in the instruction manual and directory; a lack of plans for training new employees in the use of the system; and a failure to follow through on plans for the handling of night calls. Again Dale acknowledged the existence of the problems detailed in the memorandum, though he denied they were as serious as Cerling portrayed them to be (Dale Dep. II-106-32).

In addition, the November 18 memorandum criticized Dale for his lack of specific familiarity with the several computer systems under his management and repeated a number of the criticisms set out in the October 5 list. Dale's deposition testimony responded to the criticism about his lack of computer expertise with an analogy (Dale Dep. II-136):

  I can type, but that doesn't mean that I as a
  manager should necessarily know how to use a

Similarly, answering Cerling's charge Dale had "not become a professional purchasing person" and had no "buying subjects," Dale said (Dale Dep. II, 136-37):

  I believe a manager — let's put it this way, I
  believe if you take on a number of assignments it
  — that can be better done by other people[,
  y]ou're not utilizing your talents or to the best
  of your ability. If I were to take up my day
  actively purchasing, would this detract from my
  management responsibilities; and also remember the
  time this was being done, we had two major systems
  coming on board. I was in meetings. I had all sorts
  of things going on. If a person in Production,
  Editorial needed a rush item, I'm not at my desk,
  it's delayed.

On December 14, 1981 Cerling sent Dale a third memorandum (Dale Dep. Ex. 7) detailing a number of specific failings on Dale's part in the conduct of his department. Dale believed a number of those charges may have been either unwarranted or premature (Dale Dep. II-145-53). For example the December 14 memorandum contained the following item:

  The Rohm (sic — should be Rolm) installation shows
  the same lack of planning that you have
  demonstrated on other projects.

    a. The meeting to firm up the installation was
  on 12/8. You promised installation and turn-over
  during the holidays — this will be very difficult.

But Dale Dep. II-147 says the telephone system in question was in fact installed over the holidays.

For next few months the paper record is silent, but on March 3, 1982 Cerling sent Dale a memorandum (Dale Dep. Ex. 9) assessing Dale's performance since November. It began:

  I would like to say that I have seen some
  improvement, but I have not.

Then the memorandum listed a number of criticisms related to Dale's management of the telephone system and of the Purchasing Department. Some of the problems had been mentioned in prior memoranda but had yet to be dealt with to Cerling's satisfaction: plans for dealing with night calls had not yet been implemented; a timetable for improving recordkeeping in the Purchasing Department still had to be delivered to Cerling; and a plan for course and seminar attendance designed to enhance the professional skills of the Purchasing Department staff apparently had yet to be developed. In addition the March 3 memorandum pointed to several new examples of Dale's poor management skills, including problems in budgeting for the telephone system, failure to take account of the complexity of moving from one segment of the new telephone system to another or of the fact the new system would not accommodate message unit billing by telephone, failure to obtain a formal contract with warranties or guaranties covering the telephone system, and payment of the total amount due for a portion of the telephone system before it was fully operational (rather than withholding the normal 10% pending acceptable performance). Once again Dale's deposition testimony acknowledged the existence of most of the problems identified in the March 3 memorandum, though in several instances he ascribed
the difficulties not to his own mismanagement but to inconsistent information from, or delay by, others in the Tribune organization (Dale Dep. III-535). Dale concluded (Dale Dep. III-36-37):

  [Cerling] really said here are the points that I
  think you should review. And I had gone over them
  with him point by point.

  He obviously wasn't satisfied. I obviously did
  not realize or I didn't see where I was not
  performing, because I tried to answer his
  questions, and had supplied him with information
  showing that I was trying to comply with what he
  was doing or what he requested.

Slightly over a month after the March 3 memorandum, Dale was called into Brumback's office and told his employment was to be terminated because he was unable to function efficiently as Purchasing Manager. He was given the option of accepting termination with severance pay or remaining on the payroll until his 55th birthday in July, when he would become eligible for early retirement. Dale elected the latter.

ADEA Claim

As plaintiff in an age discrimination lawsuit, Dale bears the ultimate burden of proving age was a "determining factor" in his discharge — that "but for the employee's age he would not have been fired" (Matthews v. Allis-Chalmers, 769 F.2d 1215, 1217 (7th Cir. 1985)), or (expressing the same concept) "that he would not have been discharged `but for' his employer's motive to discriminate against him because of his age" (LaMontagne v. American Convenience Products, Inc., 750 F.2d 1405, 1409 (7th Cir. 1984)). As LaMontagne went on to explain (id.) (footnotes omitted):

  By far the more common method of proof, however,
  is that set forth in McDonnell Douglas Corp. v.
  Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668
  (1973). This indirect proof, as elaborated and
  clarified in Texas Department of Community Affairs
  v. Burdine, 450 U.S. 248, 101 S.Ct. 1089, 67
  L.Ed.2d 207 (1981), requires the plaintiff first to
  prove a prima facie case of discrimination, by
  showing (1) that he was in the protected class, (2)
  that he was doing his job well enough to meet his
  employer's legitimate expectations, (3) that in
  spite of his performance he was discharged, and (4)
  that the employer sought a replacement for him.
  Huhn v. Koehring, 718 F.2d 239, 243 (7th Cir.
  1983); Loeb v. Textron, Inc., 600 F.2d 1003, 1013
  (1st Cir. 1979). Success gives rise to a rebuttable
  presumption of discrimination, and the burden then
  falls on the defendant to articulate lawful reasons
  for the discharge. The defendant's burden is only
  one of production; the burden of persuasion rests
  at all times on the plaintiff. If the defendant
  articulates lawful reasons, the presumption is
  dissolved, and the burden falls on the plaintiff to
  prove that the proffered reasons are a pretext, by
  showing either that a discriminatory reason more
  likely motivated the employer or that the
  employer's proffered explanation is unworthy of
  credence. See Burdine, 450 U.S. at 253-56, 101
  S.Ct. at 1093-95.

Tribune contends:

    1. Dale fails to establish a prima facie case
  of age discrimination, because he cannot show he
  was meeting Tribune's legitimate performance

    2. Even if Dale has made out a prima facie
  case, Tribune has articulated a legitimate,
  nondiscriminatory reason for its actions, and
  Dale has offered no evidence indicating that
  reason is pretextual.

Of course Tribune's first argument, on its Rule 56 motion, must be understood not in terms of what Dale must "show," but rather in terms of whether he has shown a genuine issue of fact. But even from that perspective Tribune's assertion has substantial force. As Tribune contends and Dale acknowledges, neither Cerling nor Brumback was satisfied with Dale's performance as Purchasing Manager. That dissatisfaction was based in large part on what Cerling and Brumback perceived to be Dale's inadequate handling of particular assignments, as expressed in the late 1981 and early 1982 memoranda.

Both managers also reflected the view that Dale was not adapting himself to the new management philosophy Brumback sought to introduce to the Tribune. On that score, a management review performed by New York consulting firm Organization Research Counselors, Inc. ("ORC") in August 1981 had identified several problems with Tribune's existing approach to management (Tribune Doc. 2 at 2), including such items as:

  Departments have tended to operate like

  A key problem at the department-head level is a
  lack of cohesiveness regarding organizational
  skills and little meaningful interaction on
  management issues. "Politeness" and
  submissive/passive obedience at any level are
  dysfunctional to achieving significant business

In the course of its survey of Tribune's individual departments, the same report later said (id. at 18):

  Purchasing employees perceive themselves as
  "order takers."

To the extent that many of Cerling's criticisms of Dale state his failure to anticipate problems and to head them off before they arose, as well as his failure to initiate procedures and systems designed to enhance efficiency and profitability — the foremost goals of the new management philosophy (id. at 2) — they bespeak major doubts (by both Cerling and Brumback) as to Dale's ability to perform within the emerging Tribune environment. Indeed, Dale himself acknowledges as much in the deposition testimony quoted earlier in this opinion (Dale Dep. I-96) and in the August 31, 1981 letter to Lifvendahl.

Dale attempts to call into question all that evidence of his not meeting his employer's legitimate expectations by arguing that he was truly performing adequately. And — at least with inferences drawn in Dale's favor — there may in fact be lingering questions as to whether some of the specific criticisms made by Cerling were entirely warranted. But on the record before this Court, there can be no question either (1) that Cerling and Brumback were dissatisfied with Dale's performance or (2) that their dissatisfaction had its roots in their view of the kind of job a Purchasing Manager should be doing. On that evidence — even with all the reasonable inferences running in Dale's favor — there is no basis for concluding age was a determining factor in his termination. As Kephart v. Institute of Gas Technology, 630 F.2d 1217, 1223 (7th Cir. 1980) teaches (in the District Court opinion adopted per curiam) (citations omitted):

  [ADEA] . . . was not intended as a vehicle for
  judicial review of business decisions. . . . The
  question before the court is not whether the
  company's methods were sound, or whether its
  dismissal of Kephart was an error of business
  judgment. The question is whether he was
  discriminated against because of his age.
  Although an employer may not make unreasonable
  expectations, and must make the employee aware of
  just what his expectations are, beyond that the
  court will not inquire into the defendant's
  method of conducting its business.

By the same token, the fact that in the eyes of an objective observer an employer may have misjudged the quality of a discharged employee's work does not itself give rise to an inference of discrimination — that is, in the absence of evidence indicating age was a basis for the employer's conduct. Huhn v. Koehring Co., 718 F.2d 239, 242-43 (7th Cir. 1983); see also Burdine, 450 U.S. at 259, 101 S.Ct. at 1096.

In short, no facts (as contrasted with Dale's own self-evaluation) appear to warrant the conclusion Dale was really meeting the legitimate expectations of his employer — the prerequisite to a prima facie showing of age discrimination. Nevertheless, out of an abundance of caution, this Court will give Dale the benefit of the doubt at the first (prima facie) step of the three-stage Burdine approach. This opinion therefore goes on to assess the strength of Dale's case in summary judgment terms at the last stage of the analysis, where the question becomes whether Tribune's stated nondiscriminatory reason for Dale's termination — his inefficiency and ineffectiveness as a manager — was merely a pretext for age discrimination.

Normally a plaintiff establishes an employer's nondiscriminatory reason is unworthy of credence by pointing to direct evidence of age discrimination. Because Dale acknowledges he has no such direct evidence, he must offer evidence giving rise to an inference that Tribune had a discriminatory motive in terminating him. See LaMontagne, 750 F.2d at 1414-15. In that regard this Court "is not required to evaluate every conceivable inference which can be drawn from evidentiary matter, but only reasonable ones." Matthews, at 1218, quoting Parker v. Federal National Mortgage Association, 741 F.2d 975, 980 (7th Cir. 1984) (emphasis in original), which affirmed this Court's grant of an employer's summary judgment motion in a like ADEA case, 567 F. Supp. 265 (N.D.Ill. 1983).

Apart from his own subjective belief he was the victim of age discrimination — an insufficient basis for finding pretext in the context of a summary judgment motion, see Elliot v. Group Medical & Surgical Service, 714 F.2d 556, 564 (5th Cir. 1983) — Dale points to the fact a number of other older workers also left Tribune at or around the time of his discharge. Dale claims that pattern of departures raises an inference of age discrimination.

In inference terms, though, that really represents a quantum leap. It ignores — skips directly over — the most reasonable inference to be drawn from the departures. As the ORC report demonstrates and as Dale acknowledges, Brumback sought to refashion the management of Tribune by placing new emphasis on profitability, planning and interaction among departments (Tribune Doc. 2 at 2-3). ORC found a major obstacle in Tribune's existing management culture, in which departments operated as fiefdoms and managers themselves tended to be passive, awaiting instructions from top management (Tribune Doc. 2 at 2). It would scarcely be surprising if the employees least adaptable to such a change turned out to include a number in the later stages of their careers. And a number of those managers might well choose to leave voluntarily rather than contend with the announced — and of course legitimate — change of direction. Others might opt to remain but still prove incapable of adhering to the new management plan, in which event their termination or early retirement would properly be perceived as necessary to the overall success of the undertaking. In sum, it is not at all surprising that the toll of such a reorganization should be heaviest among longer-term (and thus older) employees — without connoting any ADEA-forbidden motivation.

In light of that far more reasonable inference from the employee departures Dale points to — an inference that fits all the evidence before this Court — Dale's mere assertion of age discrimination as a possible explanation for the departures does not suffice to meet his evidentiary burden under Rule 56(e). Absent any specific evidence to indicate employees were selected for termination because of their ages, rather than because of their performance or their adaptability to the new management philosophy, there is simply no rational basis for imputing a discriminatory motive to Tribune.

Huhn, 718 F.2d at 242-43 quoted the District Court's recapitulation of the reasons supporting summary judgment in the employer's favor after making the third-step pretext analysis. Its language (adapted solely by substituting Dale's name for Huhn's) could well have been written for this case:

  Whether or not [Dale] raises an issue of material
  fact as to just how good or bad his performance
  would look to an outside observer, the company
  was not satisfied. . . .

  The issue here is not whether [Dale] was
  performing satisfactorily. The company did not
  think that he was. So long as age was not the
  basis of the company's decision — and absolutely
  no evidence exists in this record that it was —
  the company can make a decision to terminate, even
  if the decision is unwise. The only

  thing it cannot do for purposes of this lawsuit
  is discriminate on the basis of age.

  [Dale] is arguing that because to him the
  company's decision did not make sense, he is the
  victim of age discrimination. A plaintiff
  claiming age discrimination has a larger burden.
  He must affirmatively show that "but for" his
  age, he would not have been fired. [Dale] has not
  met his burden.

ERISA and Duty-of-Fair-Dealing Claims

During the course of his deposition Dale said Tribune's overall employee pension obligation would be most substantially reduced by the termination or early retirement of long-term employees. Thus he speculated the prospect of such cost reductions may have motivated Tribune's termination of older employees around the time of his own termination. Accordingly Complaint Count II asserts claims under ERISA § 502 and 510, 29 U.S.C. § 1132 and 1140.*fn2

But as Tribune correctly points out, no claimant may bring suit under ERISA without first exhausting all administrative claim-resolution procedures required by the statute. Kross v. Western Electric Co., 701 F.2d 1238, 1244-45 (7th Cir. 1983) (quoting Amato v. Bernard, 618 F.2d 559, 567-68 (9th Cir. 1980)). Tribune Personnel Manager Robert Musil's Aff. ¶ 6 states Dale did not resort to those remedies before filing the Complaint:

  Each benefit and/or pension plan of the Chicago
  Tribune has an internal dispute resolution
  mechanism as required by law whereby eligible or
  covered employees may protest or seek review of
  payments made or denied to them under the plans.
  At no time, either during his tenure with the
  Chicago Tribune or thereafter, did Charles Dale
  ever internally protest, seek review of, or
  challenge in any way any benefit payment made or
  denied him under any Tribune benefit or pension

Dale has offered no contrary evidence. In fact, he has not even argued the ERISA issue in his memorandum opposing Tribune's motion. No predicate exists for denying Tribune's Rule 56 motion as to Dale's ERISA-based claim.

That is equally true of the common-law duty-of-fair-dealing claim advanced in Complaint Count III. As Tribune Mem. 23 says, Dale was an employee at will, dischargeable for any reason or for no reason at all. Dale offers no evidence to refute that characterization, though he argued the Tribune's policies and benefit packages created a duty of fair dealing that was breached by his termination. But absent a breach of Tribune's contractual obligations to Dale — something Dale has not asserted — Illinois law does not recognize an action for breach of an implied covenant of fair dealing. As Martin v. Federal Life Insurance Co., 109 Ill. App.3d 596, 605-07, 65 Ill.Dec. 143, 150-51, 440 N.E.2d 998, 1005-06 (1st Dist. 1982) teaches:

  Various authorities have discussed the general
  principle that contracting parties have a good
  faith and fair dealing covenant implicit in their
  agreements; however, according to our
  understanding of the principle, it is essentially
  used as a

  construction aid in determining the parties'
  intent. Hence, in Martindell v. Lake Shore National
  Bank (1958), 15 Ill.2d 272, 286, 154 N.E.2d 683,
  the supreme court stated, "Every contract implies
  good faith and fair dealing between the parties to
  it, and where an instrument is susceptible of two
  conflicting constructions, one which imputes bad
  faith to one of the parties and the other does not,
  the latter construction should be adopted. (I.L.P.,
  Contracts, § 217.)"

  While we agree that the same conduct may give
  rise to both tort and contract theories of
  recovery in some cases, we do not believe that
  Illinois law recognizes a tort remedy based on an
  employer's "bad faith" breach of an implied
  contract covenant of fair dealing.

  Care must be taken to prevent the transmutation
  of every breach of contract into an independent
  tort action through the bootstrapping of the
  general contract principle of good faith and fair
  dealing. We conclude that existing principles of
  tort law are adequate without our creating a new
  action based on a vague notion of fair dealing.

Once again, Dale has made no effort to raise a factual question with respect to Tribune's alleged breach or otherwise to refute Tribune's argument in support of its motion. Summary judgment must be granted on the Illinois common-law claim as well.

Motion To Add Party Plaintiff

Because the granting of Tribune's summary judgment motion compels dismissal of this action, Dale's motion to add a named party plaintiff is moot. Of course John Hanneman, the individual seeking to join, is free to pursue his claims against Tribune in a separate action.


There is no genuine issue of material fact as to any of the claims set out in Dale's Complaint, and Tribune is entitled to a judgment as a matter of law. This action is therefore dismissed with prejudice. Dale's motion to add a named party plaintiff is dismissed as moot.

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