Appeal from the United States District Court for the Northern District of Illinois, Western Division. No. 91 C 20361--Philip G. Reinhard, Judge.
Before COFFEY, FLAUM and EASTERBROOK, Circuit Judges.
Shirley Mills filed suit against her former employer, First Federal Savings and Loan Association of Belvidere ("First Federal"), alleging that her discharge from the position of Quality Control Auditor at First Federal violated the Age Discrimination in Employment Act ("ADEA"). 29 U.S.C. sec. 621 et seq. The district court granted summary judgment in favor of First Federal. We affirm.
First Federal, the defendant in this age-discrimination lawsuit, is a savings and loan association ("S & L") whose principal place of business is in Belvidere, Illinois. The parties agree that First Federal is an "employer" within the meaning of the ADEA (i.e., that it is engaged in an industry affecting commerce and has twenty or more employees). See 29 U.S.C. sec. 630(b).
The plaintiff, Shirley Mills, started as a teller at First Federal in 1970 and subsequently earned a promotion to bookkeeper. In 1985, she received a lateral transfer to the position of Quality Control Auditor. Her responsibilities in this new position included the reviewing of policies, procedures, regulations, and schedules for First Federal's auditors, overseeing the mortgage and cash accounts, and supervising branch security. Every three months, Mills was required to submit a written report to First Federal's Audit Committee ("the Committee"), summarizing her findings in each of the aforementioned areas. The Committee was comprised of three outside directors who served on First Federal's Board of Directors: Jack Manley, Morton Silver, and Richard Winkelman.
The Audit Committee met with Mills on September 26, 1986 to discuss the quality of her reports. The gist of this meeting was later reported to the Board of Directors as follows:
The [Audit] Committee members discussed the following concerns with Shirley Mills . . . :
1. The Quality Controller's independence from Management in order to ensure the effectiveness of the Quality Control program.
2. The quality of the reporting generated by the Quality Controller to ensure the acceptability of the Quality Control procedure by the Association's independent auditors.
3. The progress in the development of the Quality Control program.
Mr. Silver stated that Shirley [Mills] was quite responsive to these concerns and that she did assure the committee that she will maintain her independence from Management, and that she will make every effort to improve her reporting to the Board, and that she will strive to implement more of the Quality Control program.
During the plaintiff's 1988 annual review, David Beasley and Steven Derr, President and Secretary-Treasurer of First Federal respectively, informed Mills that she needed to improve the substance of her reports by including more thorough explanations of governmental regulations affecting the banking industry, including, for example, those associated with the recently-enacted Competitive Equality Banking Act of 1987 ("CEBA"), Pub. L. No. 100-86, 101 Stat. 552 (codified as amended in scattered portions of 12 U.S.C.). In response to these criticisms, Mills wrote a statement of her goals for 1989, declaring that she would attempt "[t]o develop [sic] a method of communicating with the Audit Committee to adequately explain [her] activities and findings during a month." Mills also agreed to "study the CEBA manual" and corresponding materials until she "completely underst[ood] CEBA and [could] verify [First Federal's] compliance."
During the following year (1989), however, problems with Mills' work were the subject of comment and/or discussion at no fewer than half a dozen meetings of the Audit Committee. Mills herself was present during four of these meetings and acknowledged her presence at three of them by signing the minutes. *fn1 On January 11, 1989, for example, the Audit Committee asked Mills to expand the content of her reports to include more detailed information concerning policies and procedures. Mills was present and signed the minutes.
The July 12, 1989 meeting of the Audit Committee, at which Mills was again present, also included a review of Mills' reports, which Committee members considered too similar in content from month to month. Although the plaintiff explained that some similarity was unavoidable because she was reviewing the same topics in each report, she was specifically asked to include her observations concerning any perceived weaknesses or shortcomings at First Federal.
On October 11, 1989, again with Mills present:
The Audit Committee reviewed and discussed the Quality Control Reports. Certain areas are reviewed every month, therefore the reports are similar but need to be enhanced. The members want to know if there are weaknesses in the Association. Different areas are being reviewed and will be appearing in the reports.
First Federal's Board of Directors held a meeting on November 14, 1989, during which three directors "questioned the clarity of Ms. Mills' report on the teller shortage." *fn2 The Asset/Liability Committee, comprised of David Beasley, Larry Hall, Tom Montgomery, Steven Derr and Pam Palmer, also met in November of 1989 and discussed Mills' job performance. Palmer, First Federal's Comptroller, opined that the plaintiff's reports were redundant and needed to be expanded in order to inform the Audit Committee and Board of Directors in a more comprehensive manner about the S & L's compliance with federal banking regulations. Palmer also noted that she had asked Mills to submit her reports earlier in the month (so that Board members might have an opportunity to review them thoroughly before their meetings), but that in spite of this request Mills' reports were always the last Palmer received each month.
In 1988 and again in 1990, First Federal's outside auditors (KPMG Peat Marwick), recommended that the "quality control function" be "strengthen[ed]" through more comprehensive reporting and better efforts to keep current with "changes in reporting requirements and the thrift industry." These suggestions were general in nature and noted no particular weaknesses in Mills' performance.
In response to the continuing complaints about Mills' job performance and the persistent deficiencies in her reports, the Audit Committee held a special meeting on December 13, 1989, to discuss the plaintiff's future with First Federal. Mills was not present at this meeting. Committee members spoke about their displeasure with Mills' reports, and the fact that despite their instructions, she failed to make the requested improvements in her reports. At this time, as noted at the meeting, Mills' 1989 annual audit agenda was over a month late. Finally, the Committee expressed concern about Mills' ability to keep up with regulatory changes affecting the thrift industry. The members believed that Mills would be unable to ensure First Federal's compliance with the new standards.
Desiring a stronger employee in the Quality Control position, the Committee (which had hiring and firing authority over the Quality Control Auditor position) unanimously recommended Mills' termination to the Board of Directors. The Board accepted and approved the Committee's recommendation and Beasley, President of First Federal, was instructed to inform the plaintiff of the decision. Beasley met with Mills on December 15, 1989 and notified her that her last day of work with First Federal ...