In arguing that TWA used the four-week cap as the stick to force senior employees to accept the VTP "carrot," this court assumes, plaintiffs are not attempting to raise a constructive discharge claim. In the first place, none of the plaintiffs left TWA following imposition of the cap; the three former employees who aver that they felt compelled to elect the VTP as a result of the imposition of the four-week cap (Pl. Exs. 38-40) are not parties to this case. Moreover, while it is mere common sense to assert that employees immediately affected by the four-week cap were upset by the loss, to claim that their jobs were made intolerable as a result does not even begin to approach the objective standard necessary to constitute an act of constructive discharge. This, however, is what plaintiffs claim motivated TWA; at its heart is the allegation that TWA adopted the cap, at least in part, because of the age of the employees who likely would be most affected. Accordingly, this court will consider plaintiffs' summary judgment evidence to this effect as probative of TWA's intent.
The Supreme Court has set forth two "evidentiary paths" by which plaintiffs claiming to have been victims of intentional employment discrimination may prove their case.
The path followed is determined in large part by the nature of the case the plaintiff attempts to prove. Randle v. LaSalle Telecommunications, Inc., 876 F.2d 563, 569 (7th Cir. 1989). Where a plaintiff is able to prove affirmatively that an illegitimate consideration such as age was a substantial factor in an employment decision, the burden of proof then shifts to the defendant to prove by a preponderance of the evidence that it would have made the same decision in the absence of the illegitimate motive. Price Waterhouse v. Hopkins, 490 U.S. 228, 104 L. Ed. 2d 268, 109 S. Ct. 1775 (1989). If the plaintiff cannot demonstrate affirmatively that age was a substantial factor, the appropriate analytical framework becomes that established in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 36 L. Ed. 2d 668, 93 S. Ct. 1817 (1973), and reaffirmed in Texas Dept. of Community Affairs v. Burdine, 450 U.S. 248, 67 L. Ed. 2d 207, 101 S. Ct. 1089 (1981), under which the plaintiff may, by proving the employer's proffered legitimate reason to be a pretext, support the negative inference that the "true" reason for the employer's decision was illegitimate. Price Waterhouse, 490 U.S. at 247 (Brennan, J., plurality), 490 U.S. at 260 (White, J., concurring), 490 U.S. at 278-79 (O'Connor, J., concurring). See Smith v. Firestone Tire and Rubber Co., 875 F.2d 1325, 1330 (7th Cir. 1989) (applying the Burdine framework after plaintiff failed to meet the Price Waterhouse requirement of proving race was a substantial factor underlying his demotion).
A. Mixed-Motive Analysis Under Price Waterhouse
Plaintiffs first attempt to make out a prima facie case under Price Waterhouse. In order to do so, they must at a minimum present some direct evidence demonstrating that age was a substantial factor in TWA's decision to adopt the four-week vacation cap. Plaintiffs' sole direct evidence comes from the deposition of Charles Glass:
I don't remember a lot of discussion on the subject [of whether a vacation cap would impact older workers more than younger workers]. I may have been my own comment in a meeting, but I did remember someone saying if it really is offensive to them, they do have early retirement options.
(Pl. Ex. 2 at 51-52). To say that this remark constitutes direct evidence of discriminatory intent would be attenuated; to the extent that it does, however, plaintiffs must do more than state that the remark was made in order to support their claim. They must prove that it was made by a decisionmaker in connection with the decision to adopt the challenged employment practice. Plaintiffs, however, present no evidence that Richard Pearson, who as TWA's president was the final decisionmaker with regard to the vacation cap, made the statement, heard it, or in any way agreed with it.
Glass himself cannot identify who made the statement or, for that matter, when it was made (it could have been made after the decision to adopt the four-week cap). At best, the statement on which plaintiffs rely so heavily is nothing more than a stray remark. "Such remarks . . . when unrelated to the decisional process, are insufficient to demonstrate that the employer relied on illegitimate criteria . . . ." Smith v. Firestone Tire and Rubber Co., 875 F.2d 1325, 1330 (7th Cir. 1989). See Price Waterhouse, 490 U.S. at 277 (O'Connor, J., concurring) ("statements by nondecisionmakers, or statements by decisionmakers unrelated to the decisional process itself [cannot] suffice to satisfy the plaintiff's burden in this regard.").
Plaintiffs also contend that TWA's discriminatory intent may be inferred circumstantially from evidence 1) that TWA knew that the most senior employees would be hit the hardest by the vacation cap and would be upset by the reduction; 2) that TWA considered the impact its cost-reduction plan would have on employee morale in estimating the number of employees who would elect the VTP; and 3) that TWA sought through the VTP to reduce the ranks of its senior management, a feat it could not accomplish by way of a furlough.
Plaintiffs first contend that TWA knew that the vacation cap would impact most heavily upon the more senior employees, who would be upset at the loss of vacation time. Specifically, they point to a transcript of a meeting between TWA president Richard Pearson and unidentified employee representatives who protested the vacation cap approximately three weeks after it was imposed (Pl. Ex. 12 at 54-55, 105). Plaintiffs assert that this transcript indicates that TWA's decisionmakers had been aware that the four-week cap would impact most heavily upon those senior in the vacation system who had been enjoying vacations of greater length, and that those whose vacations were cut likely would be unsatisfied.
Assuming for purposes of summary judgment that Pearson and other members of TWA's senior management were aware of the impact and the dissatisfaction that could be expected to result, such knowledge is not sufficient to create a genuine issue of fact with regard to the issue at hand: whether TWA adopted the cap for legitimate reasons, albeit with an awareness of this possible side effect, or whether TWA adopted the cap in substantial part because it would have this result. Contrary to plaintiffs' assertions, TWA's knowledge is not dispositive of its intent. See Visser, 924 F.2d at 660 (awareness that discharging employee would lead to denial of pension benefits does not mean that this necessarily motivated employee's discharge and is insufficient to establish a prima facie case of age discrimination under Price Waterhouse); Weihaupt v. American Medical Association, 874 F.2d 419, 426 (7th Cir. 1989) (while employer was aware demotion might embarrass employee, there was no evidence that employer demoted employee with intent to force his resignation).
Plaintiffs next argue that TWA's discriminatory intent may be inferred from the fact that, in attempting to estimate the number of employees who would elect the VTP, Glass considered the impact the cost reduction measures would have on employee morale. Plaintiffs emphasize Glass' testimony that he and the personnel department considered the impact of the "many onerous things happening in the October time frame" (Pl. Ex. 64 at 45), and expected slightly higher numbers of employees to opt for the VTP than would have "in a less adverse environment" (Pl. Ex. 14 at 55-56). Plaintiffs apparently would have this court infer from this evidence that the environment for workers in the protected group was intentionally made "adverse" and "onerous" by way of the vacation cap. Such an inference, however, would not be reasonable. It is undisputed that the "environment" into which TWA introduced the VTP in October 1985 did not consist of the vacation cap alone. Among the cutbacks in the compensation packages of the noncontract employees announced simultaneously in addition to the vacation cap and VTP, were a 14% wage reduction, elimination of floating and birthday holidays (totalling some eleven days per year) and revision of the medical and dental plans (Def. Fact 22). To infer from Glass' statements that TWA expected its employees to decide whether to elect the VTP solely on the basis of the four-week cap would be unreasonable.
Finally, plaintiffs offer summary judgment evidence concerning TWA's plans to reduce its noncontract management by 15%, and its noncontract nonmanagement employees by 2%. According to plaintiffs, documentary evidence demonstrates that TWA hoped that these reductions would come from senior management, who would take advantage of the incentives offered by the VTP and who, upon leaving, would be replaced by promoting more junior employees who remained (Pl. Ex. 33 at 2; Pl. Ex. 18). As further support, plaintiffs point to an October 18, 1985 analysis conducted by John Gaiser, TWA's director of compensation and benefits, to determine the number of employees eligible for the VTP (Pl. Ex. 42). Noting Gaiser's subsequent deposition testimony that an age analysis would have been "totally irrelevant" to the VTP -- which was based solely on years with the company rather than age -- plaintiffs contend that they at least have raised a genuine issue as to why the analysis was conducted (Pl. Ex. 14 at 60-61). Even accepting the inferences drawn by plaintiffs as true for purposes of summary judgment, however, their evidence in this regard is probative only of TWA's motivation in adopting the VTP, which is not at issue in this litigation.
Plaintiffs have presented no direct or circumstantial evidence to demonstrate the existence of a genuine issue of material fact as to whether a substantial factor underlying TWA's decision to adopt the four-week vacation cap was to induce the retirement of older employees. Accordingly, the burden-shifting framework of Price Waterhouse is inapplicable and this court must consider whether the legitimate reasons proffered by TWA for imposition of the vacation cap were its "true" reasons under the framework of McDonnell Douglas and Burdine. Smith v. Firestone Tire and Rubber Co., 875 F.2d 1325, 1330 (7th Cir. 1989).
B. Pretext Analysis Under McDonnell Douglas
Neither side disputes whether plaintiffs have satisfied their prima facie case under McDonnell Douglas. Accordingly, the primary issue before this court is whether plaintiffs can demonstrate a genuine issue of material fact as to whether TWA's proffered legitimate reasons for its decision to adopt the four-week vacation cap were in fact a pretext for age discrimination. Plaintiffs may demonstrate pretext either by direct evidence that TWA was more than likely motivated by a discriminatory reason, or by indirectly showing that TWA's proffered explanations are not entitled to credence. Mechnig v. Sears, Roebuck & Co., 864 F.2d 1359, 1364 (7th Cir. 1988). Having previously failed to present any probative direct evidence, plaintiffs' sole recourse is to demonstrate that TWA's reasons were not worthy of credence. This they may do by demonstrating 1) that TWA's reasons had no basis in fact; 2) that TWA's reasons did not actually motivate their decision; or 3) that TWA's reasons were insufficient to motivate their decision. Mechnig, 864 F.2d at 1365 (quoting Kier v. Commercial Union Insurance Companies, 808 F.2d 1254, 1259 (7th Cir.), cert. denied, 481 U.S. 1029, 95 L. Ed. 2d 528, 107 S. Ct. 1955 (1987)).
TWA advances several legitimate reasons for its decision to adopt the four-week vacation cap: 1) that its management considered the existing vacation benefits to be "excessively generous;" 2) that an across-the-board cut would drop its minimum vacation benefit below two weeks -- which TWA considered to be the accepted minimum in American industry; and 3) that an across-the-board cut would fall more harshly on employees entitled to less vacation -- which TWA considered an unfair result. To these plaintiffs add a fourth reason -- on which TWA no longer relies but on which plaintiffs base their primary pretext argument -- that TWA adopted the cap to bring its vacation benefits in line with those of other airlines. It is to plaintiffs' attack on this last reason that this court first turns.
In answering plaintiffs' first set of interrogatories, TWA stated that "the change in vacation policy was part of a comprehensive program to reduce [TWA's] operating expenses, to maintain [TWA] as an economically viable carrier, and to bring TWA vacation benefits more in line with vacation benefits provided by other airlines." (Pl. Ex. 59). Plaintiffs contend that their evidence clearly demonstrates that this explanation was pretextual. In support of this contention plaintiffs offer evidence that TWA made no investigation of the vacation benefits offered by other airlines before it adopted the four-week vacation cap (Pl. Ex. 3 at 28; Pl. Ex. 13 at 20-21; Pl. Ex. 27 at 118-19). Accepting plaintiffs' evidence as undisputed, it nonetheless fails to demonstrate a genuine issue as to pretext when placed in context by TWA. Ranesh Punwani, TWA's vice-president of financial controls at the time, has testified that his department conducted an annual industrywide comparison of salaries and benefits. According to Punwani, this annual report had revealed that before the $ 300 million cost-reduction plan TWA was offering higher salaries and benefits than other airlines (Def. Punwani Dep. at 104-05). In light of this preexisting knowledge, that TWA did not conduct a narrow survey limited to vacation benefits in assembling its comprehensive cost-reduction package is not surprising.
As further support, plaintiffs present a May 1987 Air Conference Negotiator's Summary of the vacation benefits offered by other major airlines that, they claim, indicates that rather than bringing TWA in line with other carriers, the vacation cap actually placed TWA below its competition in terms of vacation benefits (Pl. Ex. 26). In their insistence on assessing the validity of the four-week vacation cap in a vacuum, plaintiffs fail to account for Punwani's further statement that, while TWA sought to remain competitive in pay and benefits with the rest of the industry, its primary goal was "to be competitive while ensuring that the bottom line was acceptable. That's a very strong qualification" (Def. Punwani Dep. at 49-50) (emphasis added). From this perspective, a comparison of vacation benefits alone becomes relatively meaningless.
This court will not infer an unlawful motive on so slim a premise.
Plaintiffs contend that TWA's explanation that it believed vacation benefits in excess of four weeks were excessively generous is insufficient as a matter of law. Plaintiffs are wrong. A subjective basis does not convert an otherwise legitimate reason for an employment decision into an illegitimate reason. Dorsch v. L.B. Foster Co., 782 F.2d 1421, 1427 (7th Cir. 1986). In the absence of any evidence of bad faith, this court will not question TWA's business judgment of how much vacation time was reasonable in light of the airline's overall economic health. Dorsch, 782 F.2d at 1426. The ADEA was not intended as a vehicle for judicial review of business decisions. Kephart v. Institute of Gas Technology, 630 F.2d 1217, 1223 (7th Cir. 1980), cert. denied, 450 U.S. 959, 67 L. Ed. 2d 383, 101 S. Ct. 1418 (1981).
Finally, TWA also claims to have been motivated by a desire to keep its minimum vacation benefit at two weeks, and to avoid an across-the-board plan that would fall more harshly on the most junior employees. From TWA's perspective, decreasing the vacation time of those who had little to begin with would have had a far greater real impact than decreasing the vacation time of those who, under the old policy, had much more. Plaintiffs, however, contend that TWA's concern for its junior employees was a discriminatory, rather than nondiscriminatory, reason for adopting the four-week vacation cap.
Plaintiffs essentially contend that because TWA at one time provided its most senior noncontract employees with more vacation days than its most junior employees, the ADEA obligated TWA to perpetuate that quantum of preferential treatment. The ADEA mandates equal -- not preferential -- treatment for those in its protected age group. Tice v. Lampert Yards, Inc., 761 F.2d 1210, 1217 (7th Cir. 1985). As the Seventh Circuit has recognized:
Economic imperatives must be continually balanced against the requirements of the age discrimination law. . . . For this reason, we think general pay reductions are less a threat to senior employees than terminations would be (in part because employers are less likely to cut pay unless economic circumstances absolutely require it). Certainly, however, in the case before us, we lay down no general rules about what circumstances might justify pay cuts for older employees. We only suggest that the language of the statute does not require that in this case we regard discharge or reduction in pay as the same thing (although they may have economic similarities and, under proper circumstances, they can both result in a successful ADEA claim).