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CHIARAMONTE v. FASHION BED GROUP

July 11, 1996

NICHOLAS A. CHIARAMONTE, Plaintiff,
v.
FASHION BED GROUP, INC., a Division of LEGGETT & PLATT, INC., Defendant.



The opinion of the court was delivered by: NORGLE

 CHARLES R. NORGLE, SR., District Judge:

 Before the court is Defendant Fashion Bed Group, Inc.'s motion for summary judgment. For the following reasons, the motion is granted.

 I.

 Plaintiff Nicholas A. Chiaramonte ("Chiaramonte") contends that FBG fired him because of his age. *fn1" Chiaramonte was born on November 29, 1932. He worked as a manager of engineering for a bed and home furnishing manufacturer, Dresher, Inc. ("Dresher"), from 1976 to 1985. In 1985, when Chiaramonte was fifty-two years old, he voluntarily left Dresher to work for its direct competitor, Berkshire Furniture Co., Inc. ("Berkshire"). John Elting ("Elting"), the President of Berkshire, and Dick Singer ("Singer"), the Chief Executive Officer of Berkshire, made the decision to hire Chiaramonte. Chiaramonte eventually became Berkshire's Vice President of Engineering.

 Leggett and Platt, Inc. ("L&P"), FBG's parent company, acquired Berkshire in 1988. After the acquisition, Berkshire, as a wholly-owned subsidiary of L&P, acquired another bed manufacturer, J.B. Ross ("Ross"). L&P also acquired Dresher, Chiaramonte's former employer, in 1990. L&P operated Berkshire, Dresher and Ross as separate entities until 1991, when L&P merged the operations of all three entities into a single entity operating under the name Fashion Bed Group ("FBG"). The Berkshire management staff headed FBG; Elting and Singer remained as President and CEO, respectively, of FBG.

 Following the mergers, FBG integrated the workforces of Berkshire, Dresher, and Ross. FBG President Elting personally selected which salaried employees from Dresher and Berkshire would be retained. In 1990, Elting terminated many employees, but appointed Chiaramonte as FBG's Vice President of Engineering and elected not to hire the Dresher employee who held the parallel position. Elting promoted Chiaramonte, who was then fifty-seven years of age.

 Beginning in July 1990, Chiaramonte played a "key role" in the absorption of Dresher's equipment into Berkshire's manufacturing plants. Chiaramonte and Elting both began exploring new manufacturing methods for use in their plants. After research and investigation, Elting decided to implement one method at various FBG plants. As a result of the method change, Elting also changed the responsibilities of Chiaramonte and another coworker. Elting split the Vice President of Engineering position (once held by Chiaramonte) in half: Elting named Chiaramonte Vice President of Research and Development, thus relieving Chiaramonte of his responsibility for "mundane detail and day-to-day things," and assigned the rest of the position to Rob Cummins ("Cummins"), whom Chiaramonte originally hired at Berkshire, to the Director of Engineering position. Chiaramonte continued to report directly to Elting, while Cummins was to report to the Vice President of Operations, a position at the same organizational level to that of Chiaramonte's. However, at that time, the Vice President of Operations position was vacant and, as a result, Cummins reported directly to Elting.

 Elting explains his decision to eliminate Chiaramonte's old position and create the two new jobs by stating that Chiaramonte would "flourish [at the new position] instead of getting bogged down in trying to figure out a lot of detail stuff." Instead, with the division of responsibilities, Chiaramonte could focus on the "work . . . he did best; and that was on the continuing process of trying to get [FBG] into [the new method of manufacturing]."

 FBG's financial records, including its general ledger, financial statements, balance sheets, and other accounting information, reveal that its sales and profits were much lower than originally expected. In 1991, FBG's sales were $ 8.5 million lower than anticipated. Moreover, FBG operated at a $ 6.6 million loss, $ 10.2 million less than the forecasted operating income of $ 3.6 million. These losses were attributed to problems in distribution, production planning, manufacturing operations, administrative support, and customer service. FBG received more orders than it could fill; as Elting put it, FBG was like a "runaway train." Chiaramonte offers nothing to dispute these facts.

 Changes in the brass bed market further compounded FBG's internal problems. Customer preferences began to shift away from the high cost genuine brass beds manufactured by FBG towards lower cost plated brass or painted color beds. Additionally, foreign competitors began importing lower cost beds in direct competition with FBG. The problems resulted in several large customers either rescinding or reducing their orders. In an effort to guarantee that it could meet each order, and to prevent the steady erosion of customers, FBG utilized the "brute force" method: hire more employees to meet customers' orders and worry "what to do with all the employees later." The "later" was November 1991; the "what to do with all the employees" was reduce the FBG workforce.

 In November and December 1991, FBG set out to reduce its total workforce by a third. FBG decided to terminate 227 of its 679 employees. Of the 227 total layoffs, 190 were unionized hourly factory workers and the other thirty-seven were non-union employees. Of the thirty-seven non-union employees, eight were salaried workers whose ages ranged from sixty-six to twenty-six.

 After the late 1991 reductions in force, Elting believed that FBG was "top-heavy" in management. Chiaramonte agrees; in late 1991, according to Chiaramonte, FBG was "dying" financially because FBG had "too many people, too much product, too much everything." FBG lost another $ 900,000 in the first two months of 1992. Faced with a top-heavy management structure and the company's serious financial trouble, once again, FBG needed to "downsize." Chiaramonte testified that this need was "very obvious" because FBG "had two people in every slot." Recognizing the obvious need for force reduction, Chiaramonte "thought his job was secure," however.

 Unfortunately for Chiaramonte, he thought wrong. Elting made the decision to terminate additional employees, including twelve salaried professionals. Elting realized that eliminating salaried positions would result in losing skills and talents other employees did not have. However, those skills and talents were, according to Elting, "a luxury [FBG] could not afford . . . [FBG] was in a do or die situation." In Elting's words, "[FBG was] out of time . . . [FBG] had no luxuries to afford any extra costs."

 In selecting the employees that he would terminate, Elting reviewed FBG's payroll register. The register listed every employee at FBG, in addition to each employee's salary and their previous rate increases. The register did not include the employees' dates of birth. Elting took the register home and, while sitting at his kitchen table, created a list of twelve employees that would eventually be terminated. Elting stated that he looked at three factors when determining which employee to terminate: the employee's salary, performance, and value to FBG. Age was not a factor. At the time Elting assembled the list, Chiaramonte's salary was $ 73,000 per year, while Cummins' salary was $ 35,440 per year. Elting then submitted the list of twelve employees to FBG's corporate staff and L&P's legal staff. While Elting had authority to terminate employees without approval from L&P management officials, Elting discussed his evaluations with L&P's Senior Vice President before implementing his decisions. Thereafter, Elting terminated all twelve of the employees on this list. Those terminated ranged in ages from sixty-one to thirty-two. Chiaramonte was among the names on that list. As of March 13, 1992, Chiaramonte was terminated from employment at FBG. He was fifty-nine years old.

 Elting alone made the decision to terminate Chiaramonte. Both Elting and Singer testified that Elting was the sole decision-maker with regard to the twelve management layoffs. Chiaramonte submitted no evidence to dispute their testimony. In addition, FBG produced memoranda regarding employee personnel changes. All such memoranda were authored and distributed by Elting. The CEO of FBG, Singer, had no involvement in that decision. In fact, Singer's daughter, Candace Singer, was also terminated by Elting on March 13, 1992. Elting testified by deposition that the first and third factors were at issue in Chiaramonte's termination. Neither Chiaramonte's performance nor his health history were factors. Chiaramonte carried a "huge salary" and had a "wealth of talent that [FBG] could get by without." (After Chiaramonte's termination, Elting wrote a letter of reference indicating that Chiaramonte's "strong work ethic and vast knowledge in combination with his creative abilities should make him a valuable addition to any organization.") Elting notified Chiaramonte of the termination in person and told Chiaramonte that "downsizing" was the reason for it.

 After Chiaramonte's termination, Elting eliminated the Vice President of Research and Development position and divided the duties among several people. Among the people acquiring some of Chiaramonte's former duties was Cummins. Elting chose not to terminate Cummins because Cummins (1) was detail-oriented, a quality necessary to FBG's engineering department, and (2) had a salary much lower than Chiaramonte.

 II.

 Summary judgment is appropriate only where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c); GCIU Employer Retirement Fund v. Chicago Tribune Co., 66 F.3d 862, 864 (7th Cir. 1995). When considering a motion for summary judgment, the court may review the entire record, drawing all reasonable inferences from the record in the light most favorable to the non-moving party. Cornfield by Lewis v. School Dist. No. 230, 991 F.2d 1316, 1320 (7th Cir. 1993). The burden of establishing the lack of any genuine issue of material fact rests with the movant. Jakubiec v. Cities Serv. Co., 844 F.2d 470, 473 (7th Cir. 1988).

 The nonmovant, however, must make a showing sufficient to establish any essential element for which it will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). The non-moving party cannot rest on the pleadings alone, but must identify specific facts which establish that there is a genuine triable issue. Cornfield, 991 F.2d at 1320. The non-movant must do more than simply "show there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586, 89 L. Ed. 2d 538, 106 S. Ct. 1348 (1986). It is not sufficient to show evidence of purportedly disputed facts if those facts are not plausible in light of the entire record. Covalt v. Carey Canada, Inc., 950 F.2d 481, 485 (7th Cir. 1991); Collins v. Associated Pathologists, Ltd., 844 F.2d 473, 476-77 (7th Cir. 1988). Motions for summary judgment in employment discrimination cases "must be decided with particular care, given the extent to which the merits often turn on questions of credibility and intent." Veprinsky v. Daniel, Inc., 87 F.3d 881, 1996 U.S. App. LEXIS 15323, No. 95-2197, 1996 WL 348212, *13 (7th Cir. 1996).

 It is well-established that an employee may be terminated for "any reason, good or bad, or for no reason at all, as long as the employer's reason is not proscribed by a Congressional statute." Kahn v. U.S. Sec. of Labor, 64 F.3d 271, 279 (7th Cir. 1995). The Age Discrimination in Employment Act ("ADEA") is an example of such a proscriptive statute. The ADEA *fn2 ...


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