                                                                                                                           Opinions of the United
2006 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


6-27-2006

Seasonwein v. First Montauk
Precedential or Non-Precedential: Non-Precedential

Docket No. 03-4666




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                                                                   NOT PRECEDENTIAL


                          UNITED STATES COURT OF APPEALS
                               FOR THE THIRD CIRCUIT

                                          No: 03-4666

                                   JEROME SEASONWEIN
                                                    Appellant
                                               v.
                      FIRST MONTAUK SECURITIES CORPORATION

                          Appeal from the United States District Court
                                 for the District of New Jersey
                               District Court No: 03-cv-00459

                        District Judge: Honorable Anne E. Thompson

                     Submitted Pursuant to Third Circuit LAR 34.1(a)*
                                      November 12, 2004

                      Before: McKee, Chertoff,** Circuit Judges, and
                          Buckwalter, Senior District Judge,***
                                  Filed June 27, 2006

                                           OPINION
PER CURIAM



       *
         The case was held CAV, pending the Supreme Court’s decision in Smith v. City of
Jackson, 544 U.S. 228 (2005).
       **
           Judge Chertoff was part of the panel that initially considered this case, but resigned
prior to the time the opinion was filed. The opinion is filed by a quorum of the panel. 28 U.S.C.
§ 46(d).
       ***
           Honorable Ronald L. Buckwalter, Senior United States District Judge for the Eastern
District of Pennsylvania, sitting by designation.
       Jerome Seasonwein appeals the district court’s grant of summary judgment to First

Montauk Securities in the suit he brought alleging age discrimination under the Age

Discrimination in Employment Act (“ADEA”), and the New Jersey Law Against

Discrimination (“NJLAD”). For the reasons that follow, we will affirm in part, reverse in

part, and remand for further proceedings consistent with this opinion.1

                                              I.

       Since we write primarily for the parties who are familiar with this dispute, we need

only set forth the procedural and factual background to the extent that is helpful to our

brief discussion. In reviewing a grant of summary judgment, we apply the same test the

district court should have applied. Summary judgment is appropriate only if there is no

genuine issue of material fact and the moving party is entitled to judgment as a matter of

law. Walling v. Brady, 125 F.3d 114, 116 (3d Cir. 1997). In making that determination,

we review the facts in the light most favorable to the non-moving party, Beers-Capital v.

Whetzel, 256 F.3d 120, 130 n.6 (3d Cir. 2001).

       Both parties discuss the familiar allocation of the burden of proof set forth in

McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973). Seasonwein argues that the

district court erred in concluding that he had not offered sufficient evidence of pretext to


       1
         The district court granted summary judgment on Seasonwein’s ADEA claim and then
dismissed his state claim under the NJLAD for lack of subject matter jurisdiction. Inasmuch as
we are reversing the grant of summary judgment on the federal claim and remanding for further
proceedings, the district court will have subject matter jurisdiction to consider seasonwein’s
claim under the NJLAD.

                                               2
overcome First Montauk’s nondiscriminatory explanation that he was terminated as part

of a reduction in force (“RIF”), necessitated by a downturn in business and reduced

revenues. First Montauk argues that there is no evidence from which a reasonable jury

could conclude that “discriminatory animus was . . . the motivating factor behind the

RIF.” Appellee’s Br. at 19. First Montauk insists that the evidence “conclusively

indicates” that it “discharged SEASONWEIN as part of an RIF, and . . . for no other

reason.” Id., at 24.

       SEASONWEIN does not dispute that he was terminated as part of First Montauk’s

RIF, and it is clear that he was. However, that does not end our inquiry. First Montauk

continually stresses the business reasons for the layoffs without addressing the

fundamental issue raised by Seasonwein’s claim of age bias. The issue here is not

whether Seasonwein was terminated pursuant to a RIF undertaken to address Fist

Montauk’s declining financial situation. Rather, the issue is whether there is a genuine

issue of material fact about whether Seasonwein’s age was a factor in selecting him for

layoff pursuant to First Montauk’s RIF.2

                                                 A.




       2
         Accordingly, we are not impressed by the fact that “Seasonwein admitted that, at the
time of the initial lay-offs, he had already observed a decline in business and . . . ‘production at
First Montauk had dropped.’” Appellee’s Br. at 4. We noted in Olson v G.E. Astrospace, 101
F.3d 947 (3d Cir. 1996), that a plaintiff’s initial belief that he was not discriminated against is not
determinative of the ultimate issue of the employer’s motivation for an adverse employment
action.

                                                  3
       Under the McDonnell Douglass analysis, an ADEA plaintiff confronted with a

motion for summary judgment must first establish a prima facie case. The burden then

shifts to the defendant to produce a legitimate, non-discriminatory reason for the adverse

action. If the defendant satisfies that burden, the plaintiff may only survive summary

judgment by coming forward with sufficient evidence to establish that either the

employer’s articulated reasons are not believable, or that an invidious discriminatory

reason was more likely than not a motivating or determinative cause of the employer’s

actions.

       To establish a prima facie case, Seasonwein “must prove that (1) he was

discharged; (2) was qualified for the position; (3) was within the protected class at the

time of discharge; and (4) was replaced by someone outside the protected class.” Dreyer

v. Arco Chemical Company, 801 F.2d 651 (3 rd Cir. 1986). The district court found that

Seasonwein had successfully made out a prima facie case. He was discharged, he was

qualified for his position, and he is clearly within the class of workers protected by the

ADEA. The court also held that Seasonwein had produced evidence that he was replaced

by a younger employee, Larry Romeu. However, First Montauk claims that Romeu was

already an employee when Seasonwein was laid off and that he (Romeu) was merely

transferred to the Red Bank N.J. office from New York after Seasonwein left. See

Appellee’s Br. at 14, n. 2. Seasonwein’s complaint actually alleges that First Montauk

“transferred a substantially younger person, Lawrence Romeu, from another branch office



                                              4
that Defendant had closed,” and that First Montauk afforded Romeu an opportunity that it

denied to Seasonwein based upon the latter’s age. Compl. at ¶ 6. However, given the

circumstances here, and Seasonwein’s claim that he was treated less favorably because of

his age, our analysis does not turn on whether Seasonwein was actually replaced by a

younger employee. “The elements of [the] prima facie case , . . . must not be applied

woodenly, but must rather be tailored flexibly to fit the circumstances of each type of

illegal discrimination.” Geraci v. Moody-Tottrup, International, 82 F.3d 578, 581 (3d.

Cir. 1996). We believe Seasonwein has produced is sufficient to raise a genuine issue of

material fact regardless of the circumstances surrounding Romeu’s transfer.

       Seasonwein essentially argues that although First Montauk could clearly layoff

employees as part of the RIF that was necessitated by the downturn in revenues, it could

not do so in a manner that discriminated against him based upon his age.

       As noted at the outset, we initially held this case “CAV” to await the Supreme

Court’s decision in Smith v. City of Jackson because the viability of Seasonwein’s

disparate impact argument was not at all clear. In fact, as First Montauk notes in its brief,

in DiBiase v. SmithKline Beecham Corp., 48 F.3d 719,734 (3d Cir. 1995), we expressed

skepticism about whether the ADEA encompassed a disparate impact claim.3 However,


       3
          Two members of the panel in DiBiase refused to join the portion of the opinion that cast
doubt upon the viability of a disparate impact theory. Judge McKee and Judge Becker both felt
that section of the opinion was not necessary. DiBiase, 48 F.3d at 71 n. 16, 732 n. 17.
Accordingly, the section addressing disparate impact only expressed the opinion of Judge
Greenberg, who authored the opinion for the panel. See Id. (“Judge Greenberg writes this
subsection only for himself.”).

                                                5
given the Court’s holding in City of Jackson, it is now established that the ADEA does

prohibit employment practices that have a disparate impact on older workers who are

protected by the ADEA.

       In arguing for summary judgment, and in arguing before us, First Montauk relies

on the undisputed evidence that it was forced to layoff workers because of an economic

downturn. However, as Seasonwein correctly notes, First Montauk has not offered any

explanation of how it determined which workers would be selected for layoff. See

Appellant’s Br. at 5. (“First Montauk’s express reasons for the reduction in force are

significant stock declines and substantial decline in firm revenues. It provided no reason

for how the determination was made to terminate or retain anyone.”).

       Seasonwein now argues that he has presented sufficient proof of disparate

treatment, and disparate impact to survive a motion for summary judgment. In reviewing

a claim of disparate treatment, we determine if the evidence supports a plaintiff’s claim

that he/she, was discriminated against because of age. In contrast, in evaluating a claim of

disparate impact, we focus on whether a facially neutral employment practice had a

disparate impact on older workers in violation of the ADEA. Smith v Xerox, 196 F.3d

358, 371 (2 nd Cir. 1999).

       Seasonwein relies in part on evidence of each series of layoffs undertaken by First

Montauk, in arguing that “[t]he combined salaries of those employees who were retained

who were younger than age 40 was over $14,000 higher than the combined salaries of



                                             6
those employees who were terminated during the reduction in force of mostly employees

who were over age 40 . . .”. Appellant’s Br. at 6. We realize that totaling salaries is not

extremely helpful to the issue of discriminatory animus or disparate impact because any

apparent discrepancy may simply result from a greater number of employees being

included in either group of employees, thereby skewing the salary totals in their favor.

However, Seasonwein also points to evidence that “the average salary of those employees

who were retained who were under age 40 was nearly $3,000 higher than the average

salary of those employees over age 40 who were terminated during the reduction in

force.” Id.

       Evidence that the average salary of the employees who were retained was greater

than that of the employees who were laid off is inconsistent with First Montauk’s claim

that it selected employees for layoff under the RIF only to improve the companies

financial situation. A reasonable jury could therefore reject the proffered explanation of

why Seasonwein was laid off. Although First Montauk claims that Seasonwein is not

comparing average salaries of employees who were similarly situated, that only raises an

issue that must be determined by a fact finder. Thus, under the shifting burden of the

McDonnell Douglas analysis, First Montauk had to go further and articulate how it

decided which employees would be included in the RIF. Given its failure to do that, there

is not enough on this record to grant summary judgment to First Montauk. The evidence

is insufficient to defeat Seasonwein’s claim that younger workers were favored during the



                                              7
RIF.

       Seasonwein relies in part on statistical evidence that he claims could establish that

First Montauk was motivated by an age bias in selecting him for the final round of

layoffs, and that the layoffs had a disparate impact on older workers. Courts have long

recognized that statistical evidence can be used in disparate treatment as well as disparate

impact cases. See Age Discrimination in Employment Law, Linderman and Kadue (BNA

2003), see also, Bullington v. United Air Lines, Inc., 186 F. 3d 1301, 1319 (10 th Cir 1999)

(“In a disparate impact case, statistical evidence plays a central role because the plaintiff

is attempting to show a particular practice had a disproportionate impact on a particular

group, and not the employer's discriminatory intent.”).

       In reviewing Seasonwein’s evidence, the district court relied in part upon the fact

that First Montauk also “discharged a substantial number of employees outside of the

protected class.” See Appellant’s Br. at 18. Seasonwein argues that the district court

should have focused on comparing only those licensed traders who were laid off because

only they are situated similarly to him. See Anderson v. Consolidated, 297 F.3d 242 (3d.

Cir. 2002). As noted above, he then claims that the average salaries of the licensed traders

who were retained was actually higher than the average of the licensed salaries who were

laid off, and that the number of older workers laid off shows that First Montauk was

trying to get a younger group of licensed traders, not just reduce expenses.

       We realize, of course, that a jury might not be convinced by this evidence. We



                                              8
also realize that there is evidence that First Montauk previously made special efforts to

retain Seasonwein and support him during the course of his employment. However, that

does not negate the fact that the evidence presented by Seasonwein combined with First

Montauk’s failure to provide any explanation of how it selected workers that would

ultimately be laidoff raises a genuine issue of material fact sufficient to allow

Seasonwein’s claim of disparate treatment under the ADEA to survive summary

judgment. It was therefore error to grant summary judgment in favor of Fist Montauk on

that claim. However, we think the district court was correct in granting summary

judgment on Seasonwein’s disparate impact claim.

       As we noted above, the Supreme Court confirmed that a disparate impact claim is

cognizable under the ADEA. However, the Court also clarified that a “failure to identify

the specific practice . . .” that resulted in a particular action having a disparate impact is

fatal to a disparate impact claim under the ADEA. 544 U.S. at 241. In reviewing the

allegations at issue there, the Court observed:

              petitioners have done little more than point out that the pay
              plan at issue is relatively less generous to older workers than
              to younger workers. They have not identified any specific test,
              requirement, or practice within the pay plan that has an
              adverse impact on older workers. . . . it is not enough to
              simply allege that there is a disparate impact on workers, or
              point to a generalized policy that leads to such an impact.
              Rather, the employee is responsible for isolating and
              identifying the specific employment practices that are
              allegedly responsible for any observed statistical disparities.

Id. (internal quotation marks omitted) (emphasis in original). The same is true here. In

                                               9
his brief on appeal, Seasonwein does argue that First Montauk favored younger

employees and targeted older ones in deciding who would be laid off. Those allegations

may be sufficiently specific to allow a disparate impact claim to survive summary

judgment under the City of Jackson inquiry. However, that is not what he alleged in his

complaint. Rather, the complaint that was provided to us as part of Appellant’s Appendix

in this appeal only contains allegations of disparate treatment. For example, the

Complaint states: “[First Montauk] . . . illegally terminated him because of his age,”

Complt at ¶ 1; “Plaintiff, . . . alleges that he has been discriminated against . . because of

his age, . . .” Id., at ¶ 9; “Seasonwein’s forced termination was motivated solely by

Defendant’s intent to discriminate against Plaintiff on the basis of age,” Id., at ¶ 11; and

he requests injunctive relief and damages “solely as a result of Defendant’s discrimination

against plaintiff on account of his age,. . .” Id., at ¶ 14. Those allegations of

discriminatory animus against him do not state a claim of disparate impact with any

precision, let alone with the precision required under City of Jackson.

       Although Seasonwein now argues a disparate impact theory to us, he must state a

cause of action in his Complaint, not merely in his appellate brief, or in opposing a

defendant’s motion for summary judgment. Accordingly, we will reverse the district

court’s grant of summary judgment to First Montauk, insofar as it dismissed

Seasonwein’s claim of disparate treatment under the ADEA, and affirm summary




                                               10
judgment insofar as it dismissed a claim of disparate impact.4




       4
        The district court did not address Seasonwein’s disparate treatment claim because it
appeared at the time to have been foreclosed by the decision in DiBiase. A10.
                                               11
