                                                                                                                           Opinions of the United
2002 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


10-24-2002

Fakete v. Aetna Inc
Precedential or Non-Precedential: Precedential

Docket No. 01-2494




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PRECEDENTIAL

       Filed October 24, 2002

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

No. 01-2494

STEPHEN FAKETE,

       Appellant

v.

AETNA, INC.,
d/b/a AETNA/US HEALTHCARE

Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civil Action No. 00-cv-01391)
District Judge: Honorable John R. Padova

Argued February 7, 2002

Before: SLOVITER and AMBRO, Circuit Judges
SHADUR,* District Judge

(Opinion filed October 24, 2002)

       Andrew M. Smith, Esquire (Argued)
       Marcino, Bowman & Smith
       275 Commerce Drive, Suite 126
       Fort Washington, PA 19034-2408

        Attorney for Appellant

_________________________________________________________________

* Honorable Milton I. Shadur, United States District Judge for the
Northern District of Illinois, sitting by designation.



       John M. Elliott, Esquire
       Eric J. Bronstein, Esquire (Argued)
       Raymond J. Santarelli, Esquire
       Elliott, Reihner, Siedzikowski &
        Egan
       925 Harvest Drive, Suite 300
       Blue Bell, PA 19422

        Attorneys for Appellee

OPINION OF THE COURT

AMBRO, Circuit Judge:

We decide whether Stephen Fakete introduced sufficient
evidence to survive summary judgment in his suit against
Aetna, Inc. ("Aetna") under the Age Discrimination in
Employment Act ("ADEA"). The District Court ruled that he
did not, even though he presented evidence that the
supervisor responsible for firing him wanted "younger"
employees and warned him that, because of his age, he
"wouldn’t be happy there in the future." We hold that the
Court erred in determining that Fakete failed to offer direct
evidence of discrimination under Price Waterhouse v.
Hopkins, 490 U.S. 228 (1989). Accordingly, we reverse its
grant of summary judgment in favor of Aetna and remand
for further proceedings.

I. Background

Because this case is at the summary judgment stage, we
view the record in the light most favorable to Fakete, the
non-moving party. Smith v. Mensinger, 293 F.3d 641, 647
(3d Cir. 2002). Fakete began working for U.S. Healthcare
("USHC") as an audit consultant in 1992. USHC merged
with Aetna in 1996. At that time Fakete was fifty-four years
old and was the oldest audit consultant at USHC. The
merger agreement provided that, unless a USHC executive
approved, Aetna could not fire any USHC employee until
two years after the merger. When this provision expired in
July 1998, Fakete was fifty-six years old and three years

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away from becoming eligible to retire with a substantial
pension.

Aetna reorganized its audit department in July 1998.
After the reorganization, Thomas Larkin announced that
Fakete would be reporting to him. Sometime during the end
of July or the beginning of August 1998, Fakete spoke with
Larkin. Fakete inquired about his future with the company.
According to Fakete, Larkin responded that "the new
management [which included Larkin]--that it wouldn’t be
favorable to me because they are looking for younger single
people that will work unlimited hours and that I wouldn’t
be happy there in the future." A few months later, Larkin
issued Fakete a written warning alleging unexplained
absences from the workplace. Larkin threatened to place
Fakete on "probation" if he did not explain future absences,
obtain Larkin’s approval before changing his travel plans,
and provide Larkin a daily summary of the tasks he
completed. On December 7, 1998, three months before
Fakete’s pension would have vested, Larkin fired him,
charging that he violated the terms of the warning, falsified
travel expense reports, and failed to reimburse Aetna for
personal phone calls charged to his company card.

On June 18, 1999, Fakete timely filed a formal charge
with the Equal Employment Opportunity Commission. See
Bailey v. United Airlines, 279 F.3d 194, 197 (3d Cir. 2002)
(stating that 300-day period for filing charge applies in
Pennsylvania). Fakete received a right to sue notice six
months later. On March 16, 2000, Fakete sued Aetna in the
United States District Court for the Eastern District of
Pennsylvania, alleging, inter alia, that he was terminated
and denied a transfer request in violation of the ADEA.1 The
Court entered summary judgment in favor of Aetna on all
of Fakete’s claims, and he timely appealed. We have
jurisdiction under 28 U.S.C. S 1291.
_________________________________________________________________

1. The District Court had jurisdiction under 28 U.S.C. S 1331. Fakete
also alleged ADEA retaliation, ADEA reduction-in-force, and state law
claims, but does not raise these claims on appeal.

                                3


II. Standard of Review

We review the District Court’s grant of summary
judgment de novo. Fogleman v. Mercy Hosp., Inc., 283 F.3d
561, 566 n.3 (3d Cir. 2002). Summary judgment was
proper if, viewing the record in the light most favorable to
Fakete, there is no genuine issue of material fact and Aetna
is entitled to judgment as a matter of law. Fed. R. Civ. P.
56(c); Bailey, 279 F.3d at 198. "A factual dispute is
material if it ‘bear[s] on an essential element of the
plaintiff ’s claim,’ and is genuine if ‘a reasonable jury could
find in favor of the nonmoving party.’ " Cloverland-Green
Spring Dairies, Inc. v. Pa. Milk Mktg. Bd., 298 F.3d 201, 210
(3d Cir. 2002) (quoting Abraham v. Raso, 183 F.3d 279,
287 (3d Cir. 1999)) (alteration in original).

III. Discussion

The ADEA makes it unlawful, inter alia, for an employer
to fire a person who is at least forty years old because of
his or her age. 29 U.S.C. SS 623(a), 631(a). To prevail on an
ADEA termination claim, a plaintiff must show that his or
her age "actually motivated" and "had a determinative
influence on" the employer’s decision to fire him or her.
Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133,
141 (2000); Hazen Paper Co. v. Biggins, 507 U.S. 604, 610
(1993). An ADEA plaintiff can meet this burden by (1)
presenting direct evidence of discrimination that meets the
requirements of Justice O’Connor’s controlling opinion in
Price Waterhouse,2 or (2) presenting indirect evidence of
_________________________________________________________________

2. We have previously recognized that Justice O’Connor’s opinion
concurring in the judgment represents the holding of the fragmented
Court in Price Waterhouse. See, e.g., Anderson v. Consol. Rail Corp., 297
F.3d 242, 248 (3d Cir. 2002).

In the past, we often described employment discrimination cases
governed by Price Waterhouse (i.e., based on direct evidence) as "mixed
motive" cases, even though we recognized that the adjective was
"misleading" because indirect evidence (also referred to as pretext) cases
under McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973), like Price
Waterhouse cases, often involve a combination of legitimate and
illegitimate motives. See, e.g., Miller v. CIGNA Corp., 47 F.3d 586, 597

                                4
discrimination that satisfies the familiar three-step
framework of McDonnell Douglas Corp. v. Green , 411 U.S.
792 (1973).3 See Keller v. Oriz Credit Alliance, Inc., 130 F.3d
_________________________________________________________________

n.9 (3d Cir. 1995) (en banc). Our more recent cases, however, eschew
the "mixed motives" label in favor of the more accurate "direct evidence"
description. See Anderson, 297 F.3d at 248; Connors, 160 F.3d at 976.
Yet this description, too, is imprecise. See, e.g., Walden v. Georgia Pacific
Corp., 126 F.3d 506, 513 (3d Cir. 1997) (noting that circumstantial
evidence can support a Price Waterhouse case if it directly reflects the
allegedly unlawful basis for the challenged employment decision).
Further, while courts agree on what is not direct evidence--e.g.,
statements by non-decisionmakers, statements by decisionmakers
unrelated to the contested employment decision, and other "stray
remarks"--there is no consensus on what is. See, e.g., Fernandes v.
Costa Bros. Masonry, 199 F.3d 572, 581-82 (1st Cir. 1999) (surveying
circuit courts’ different approaches); Troupe v. May Dep’t Stores Co., 20
F.3d 734, 736-7 (7th Cir. 1994) (defining and distinguishing acceptable
forms of direct and circumstantial evidence in employment
discrimination cases). Nevertheless, because this case does not require
us to break new ground, because our Court has used the "direct
evidence" designation in recent cases, and because coming up with a
new term may do more harm than good, we shall use the "direct
evidence" label throughout this opinion.
3. In an ADEA suit alleging unlawful termination, step one of the
McDonnell Douglas framework requires the plaintiff to present evidence
sufficient for a reasonable trier of fact to find each element of a prima
facie case. Keller, 130 F.3d at 1108. Thus the plaintiff must show (1)
that he was at least forty years old, (2) that he was fired, (3) that he was
qualified for the job from which he was fired, and (4) that he "was
replaced by a sufficiently younger person to create an inference of age
discrimination." Id. If the plaintiff offers evidence sufficient to support a
prima facie case, he reaches step two, and the defendant has the burden
of producing evidence that it had "a legitimate, nondiscriminatory reason
for the discharge." Id. If the defendant does not produce such evidence,
the plaintiff wins. Id. But if the defendant satisfies its burden of
production, step three is reached, and the plaintiff must submit evidence
"from which a factfinder could reasonably either (1) disbelieve the
employer’s articulated legitimate reasons[,] or (2) believe that an
invidious discriminatory reason was more likely than not a motivating or
determinative cause of the employer’s action." Id. (quoting Fuentes v.
Perskie, 32 F.3d 759, 763 (3d Cir. 1994)).

While our Court has held that the McDonnell Douglas framework
applies in ADEA cases, see, e.g., id. , the Supreme Court has not decided
this question, though it has assumed arguendo that our approach is
correct. See Reeves, 530 U.S. at 142; O’Connor v. Consol. Coin Caterers
Corp., 517 U.S. 308, 311 (1996).

                                5


1101, 1108, 1113 (3d Cir. 1997) (en banc). Though Fakete
maintains that he can survive summary judgment on either
theory, we need discuss only his Price Waterhouse claim.

Under Price Waterhouse, when an ADEA plaintiff alleging
unlawful termination presents "direct evidence" that his age
was a substantial factor in the decision to fire him, the
burden of persuasion on the issue of causation shifts, and
the employer must prove that it would have fired the
plaintiff even if it had not considered his age. See Price
Waterhouse, 490 U.S. at 265-66, 276-77; Walden v.
Georgia-Pacific Corp., 126 F.3d 506, 512-13 (3d Cir. 1997).
"Direct evidence" means evidence sufficient to allow the jury
to find that "the ‘decision makers placed substantial
negative reliance on [the plaintiff ’s age] in reaching their
decision’ " to fire him. Connors v. Chrysler Fin. Corp., 160
F.3d 971, 976 (3d Cir. 1998) (quoting Price Waterhouse,
490 U.S. at 277); see also Anderson v. Consol. Rail Corp.,
297 F.3d 242, 248 (3d Cir. 2002) (same). Such evidence
"leads not only to a ready logical inference of bias, but also
to a rational presumption that the person expressing bias
acted on it" when he made the challenged employment
decision. Starceski v. Westinghouse Elec. Corp. , 54 F.3d
1089, 1097 (3d Cir. 1995).

As pointed out, see supra note 2, the adjective "direct" is
imprecise because "certain circumstantial evidence is
sufficient [to shift the burden of proof regarding causation],
if that evidence can ‘fairly be said to directly reflect the
alleged unlawful basis’ for the adverse employment
decision." Walden, 126 F.3d at 513 (quoting Hook v. Ernst
& Young, 28 F.3d 366, 374 (3d Cir. 1994)) (emphasis in
original). One form of evidence sufficient to shift the burden
of persuasion under Price Waterhouse is"statements of a
person involved in the decisionmaking process that reflect
a discriminatory or retaliatory animus of the type
complained of in the suit," Hook, 28 F.3d at 374 (quoting
Ostrowski v. Atlantic Mut. Ins. Cos., 968 F.2d 171, 182 (2d
Cir. 1992)), even if the statements are not made at the
same time as the adverse employment decision, and thus
constitute only circumstantial evidence that an
impermissible motive substantially motivated the decision.
See Rose v. N.Y. City Bd. of Educ., 257 F.3d 156, 158, 162

                                6


(2d Cir. 2001) (holding that supervisor’s statements, several
months before he demoted employee, that he might replace
her with someone "younger and cheaper" were sufficient to
shift the burden of persuasion under Price Waterhouse).

With this background, we consider the import of Larkin’s
statement that he was "looking for younger single people"
and that, as a consequence, Fakete "wouldn’t be happy [at
Aetna] in the future." The District Court concluded in a
single sentence, without analysis, that the statement "was
a stray remark that did not directly reflect the
decisionmaking process of any particular employment
decision." We believe that a reasonable jury might disagree.

Aetna acknowledges that Larkin made the decision to fire
Fakete.4 Thus the only matter requiring discussion is
whether a reasonable jury could find, based on Larkin’s
statement, that Fakete’s age was more likely than not a
substantial factor in Larkin’s decision to fire him. We have
little difficulty concluding that it could so find.

Viewed favorably to Fakete, the statement shows that
Larkin preferred "younger" employees and planned to
implement his preference by getting rid of Fakete. Larkin
made his statement in direct response to a question from
Fakete about how he fit into Larkin’s plans. In this context,
a reasonable jury could find that Larkin’s statement was a
clear, direct warning to Fakete that he was too old to work
for Larkin, and that he would be fired soon if he did not
leave Aetna on his own initiative. See Rose, 257 F.3d at
162.

Cases in which we have deemed a plaintiff ’s evidence
insufficient to satisfy Price Waterhouse do not support the
District Court’s ruling. In contrast to the offensive remarks
in Hook, which were made by a decisionmaker during
conversations that "had nothing to do with" the plaintiff ’s
job, 28 F.3d at 375, Larkin’s statement was about Fakete’s
prospects for continued employment with Aetna. Unlike the
_________________________________________________________________

4. Hence this is not a case where the plaintiff relies on statements by a
person not involved in the allegedly unlawful decision. See Walden, 126
F.3d at 515-16; Armbruster v. Unisys Corp., 32 F.3d 768, 779 (3d Cir.
1994).

                                7


"vague" statement in Walden, which referred to the
plaintiffs’ "loyalties" without directly referencing the
allegedly unlawful decisionmaking criterion, 126 F.3d at
516, Larkin’s statement told Fakete unambiguously that
Larkin viewed him as a less desirable employee because of
his age.5 Finally, we cannot dismiss the statement as
merely "random office banter," Robin v. Espo Eng’g Corp.,
200 F.3d 1081, 1089 (7th Cir. 2000), or an innocuous
"conversational jab[ ] in a social setting," Hoffman v. MCA,
Inc., 144 F.3d 1117, 1122 (7th Cir. 1998), as Larkin
informed Fakete of his preference for "younger" employees
in a serious one-on-one conversation about Fakete’s future
under Larkin’s watch.6

As Fakete has presented sufficient evidence with respect
to his unlawful termination claim to survive summary
judgment under a Price Waterhouse theory, we need not
consider whether that claim may proceed under a
McDonnell Douglas theory. See Swierkiewicz v. Sorema N.A.,
534 U.S. 506, 511 (2002) (" ‘[T]he McDonnell Douglas test is
inapplicable where the plaintiff presents direct evidence of
discrimination.’ ") (alteration in original) (quoting Trans
World Airlines, Inc. v. Thurston, 469 U.S. 111, 121 (1985)).

Conclusion

Because the District Court resolved a genuine factual
dispute over whether Fakete’s age was a substantial
motivating factor in Larkin’s decision to fire him, we reverse
_________________________________________________________________

5. Therefore, even if comments an appellate court perceives as
"ambiguous" are not enough to get past summary judgment, see
Fernandes, 199 F.3d at 583 (holding that employer’s remark that "I don’t
need minorities" was susceptible of a benign interpretation and thus
could not constitute direct evidence of discrimination), Larkin’s
statement contains no ambiguity.

6. We note, however, that the District Court correctly granted summary
judgment in favor of Aetna on Fakete’s denial-of-transfer-request claim,
which was based only on a McDonnell Douglas theory, because Fakete
did not offer evidence that Aetna granted a transfer request by a
similarly situated younger employee, and thus failed to make out a prima
facie case. See Torre v. Casio, Inc., 42 F.3d 825, 831 (3d Cir. 1994).

                                8


the Court’s grant of summary judgment and remand for
further proceedings consistent with this opinion.

A True Copy:
Teste:

       Clerk of the United States Court of Appeals
       for the Third Circuit

                                9
