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McNeil v. Economics Laboratory Inc.

decided: August 27, 1986.


Appeals from the United States District Court for the Northern District of Illinois, Western Division, No. 81 C 20150 - Stanley J. Roszkowski, Judge.

Author: Cudahy

Before CUDAHY and COFFEY, Circuit Judges, and EVANS, District Judge.*fn*

CUDAHY, Circuit Judge. Plaintiff John McNeil brought an action pursuant to the Age Discrimination in Employment Act of 1967 (the "ADEA"), 29 U.S.C. § 621 et seq., against his employer, Economics Laboratory, Inc., for his discharge from employment. The district court, in a bench trial, granted judgment for the plaintiff in the amount of $88,000, plus costs and attorney's fees. The defendant appeals and plaintiff cross appeals. We affirm.


In 1949 McNeil began working for Klenzade-New York, a company that specialized in the production and sale of sanitation chemicals and equipment for the dairy, beverage and food industries. In 1962 Economics Laboratory purchased Klenzade-New York. McNeil continued to work for Klenzade as manager of Klenzade's New England Division. In 1966 McNeil was transferred from this position to the position of Eastern Area Sales Manager for the Klenzade Division. In this position he managed a sales staff that sold chemical cleaning compounds to various industries. In 1972 McNeil became the Assistant Vice President and Sales Manager of the Engineering Division. There was some evidence of friction between McNeil and his co-workers, but the district court found that his personnel file contains only favorable performance appraisals. Dist. Ct. Order at 11. Plaintiff underwent treatment at an alcoholism treatment center in 1978, apparently as a result of pressure by his superiors. After his completion of the rehabilitation program, McNeil was given the position of Assistant Vice President-Original Equipment Manufacturer Sales Manager for the Equipment Engineering Department of the Klenzade Division. In this position he sold cleaning systems to third party distributors of Klenzade equipment.

At the time of plaintiff's discharge he was supervised by James Watson, who reported to Robert Sistowicz, who in turn reported to Henry Snyder. Synder testified that in January 1981 he was instructed by his superior to reduce expenses as part of a corporation-wide expense reduction effort. Snyder claims to have directed Richard Rintelmann, Vice President of Marketing for the Klenzade Division, to make recommendations for the expense reduction. Rintelmann later recommended that eleven positions be eliminated, including plaintiff's. Snyder adopted Rintelmann's recommendation that McNeil be terminated. McNeil was sixty-one at the time of his discharge. McNeil's duties were taken over by Robert Price and Watson.

Although others whose positions were eliminated were offered other positions, plaintiff was not. Defendant argues that, although positions were available in Chemical Sales, plaintiff was not offered one because the friction that plaintiff had previously created made such a position inappropriate for plaintiff. Plaintiff, however, was offered a nonsalaried, commission-based position as a sales representative.


Section 623 of the ADEA 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)(1). To establish a violation of the ADEA plaintiff must prove that he was discharged because of his age. See Dorsch v. L.B. Foster Co., 782 F.2d 1421, 1423-24 (7th Cir. 1986); La Montagne v. American Convenience Products, Inc., 750 F.2d 1405, 1409 (7th Cir. 1984). The plaintiff "must prove not that age was the sole factor motivating the employer to discharge him but that age was a 'determining factor,' in the sense that he would not have been discharged 'but for' his employer's motive to discriminate against him because of his age." La Montagne, 750 F.2d at 1409. The plaintiff may meet this burden by presenting either direct or circumstantial evidence. Id.

When the plaintiff offers indirect proof of discrimination we apply the analysis set forth in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 36 L. Ed. 2d 668, 93 S. Ct. 1817 (1973) and Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 67 L. Ed. 2d 207, 101 S. Ct. 1089 (1981). The plaintiff must first prove a prima facie case of discrimination by showing 1) that he or she was in the protected class; 2) that the plaintiff was doing the assigned job well enough to meet the employer's legitimate expectations; 3) that in spite of performance the plaintiff was discharged and 4) that the employer sought a replacement. Id. We have noted, however, that in a reduction-in-force case the last element is irrelevant. See Stumph v. Thomas & Skinner Inc., 770 F.2d 93, 96 (7th Cir. 1985); Matthews v. Allis-Chalmers, 769 F.2d 1215, 1217 (7th Cir. 1985). We have held that a prima facie case is established in a reduction-in-force case by 1) showing that the plaintiff was within the protected age group; 2) showing that the plaintiff was adversely affected, either by discharge or demotion; 3) showing that the plaintiff was qualified to assume another position at the time of discharge or demotion; and 4) producing circumstantial or direct evidence from which a fact finder might reasonably conclude that the employer intended to discriminate in making the employment decision in issue.*fn1 See Dorsch, 728 F.2d at 1424; Matthews, 769 F.2d at 1217.

Once the plaintiff has established a prima facie case, the burden falls on the defendant to articulate lawful reasons for the discharge. La Montagne, 750 F.2d at 1409. If the defendant meets its burden of production, the plaintiff must 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." Id.

Defendant argues that a reduction-in-force analysis should be applied to this case. We will assume, without reaching the issue, that the discharge occurred as part of a reduction in force. The district court held that plaintiff had established a prima facie case under a reduction-in-force analysis:

When the defendant in an age discrimination case has a reduction in force, a prima facie case of age discrimination may be established if the plaintiff shows that he was within the protected age bracket, that he was discharged, that he was qualified to assume another position at the time, and that there is direct or circumstantial evidence of the defendant's ...

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