                                                                                                                           Opinions of the United
2007 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


8-16-2007

Embrico v. US Steel Corp
Precedential or Non-Precedential: Non-Precedential

Docket No. 05-5495




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                                                                NOT PRECEDENTIAL

                       UNITED STATES COURT OF APPEALS
                            FOR THE THIRD CIRCUIT


                                       No. 05-5495


            NICK EMBRICO, FRANK VITUCCI, and ROY WILLIAMS*,

                                                  Appellants,

                                             v.

                           UNITED STATES STEEL CORP.

                       *(Pursuant to Court Order dated 11/27/06)




                    On Appeal from the United States District Court
                       for the Eastern District of Pennsylvania
                             (D.C. Civil No. 03-cv-5571)
                      District Judge: Honorable Anita B. Brody


                               Argued July 9, 2007
             Before: SLOVITER, HARDIMAN, and ROTH Circuit Judges.

                                  (Filed: August 16, 2007)

Patrick J. McDonnell (Argued)
McDonnell & Associates
601 South Henderson Road
Suite 152
King of Prussia, PA 19406
       Attorneys for Appellants

Mary B. Taylor
Michael P. Duff
Kiley Clark
M. Cristina Sharp (Argued)
United States Steel Corporation
Law Department
600 Grant Street
U. S. Steel Tower, Room 1500
Pittsburgh, PA 15219

Daniel C. Moraglia
Bennett, Bricklin & Saltzburg
1601 Market Street
16 th Floor
Philadelphia, PA 19103

      Attorneys for Appellee




                                OPINION OF THE COURT




HARDIMAN, Circuit Judge.

      This is an appeal from the District Court’s grant of summary judgment in favor of

United States Steel Corp. (U.S. Steel) and against Appellants Nick Embrico (Embrico),

Frank Vitucci (Vitucci), and Roy Williams (Williams). Appellants are three former U.S.

Steel managers who, after accepting a voluntary early retirement plan (VERP), brought

claims under the Age Discrimination in Employment Act (ADEA), 29 U.S.C. §§ 621 et

seq., the Pennsylvania Human Relations Act, Pa. Stat. Ann. Tit. 43 §§ 951 et seq.

(PHRA), and the Employee Retirement Income Security Act, 29 U.S.C. §§ 1001 et seq.

(ERISA). Appellant Williams, an African-American, also brought claims of race

discrimination in violation of the PHRA and Title VII of the Civil Rights Act of 1964, 42

                                            2
U.S.C. § 2000e-5 (Title VII). Because we conclude that Appellants cannot meet the

heavy burden of proving that they were constructively discharged, we will affirm.

                                               I.

       “Our standard of review over the District Court’s grant of summary judgment is

plenary, and we apply the same standard that the District Court should have applied.” In

re Color Tile Inc., 475 F.3d 508, 512 (3d Cir. 2007). “Summary judgment is appropriate

when the pleadings, depositions, answers to interrogatories, and admissions on file,

together with the affidavits, if any, show that there is no genuine issue as to any material

fact and that the moving party is entitled to a judgment as a matter of law.” Andreoli v.

Gates, 482 F.3d 641, 647 (3d Cir. 2007) (quoting Fed. R. Civ. P. 56(c)) (internal

quotation marks omitted). Under Rule 56 of the Federal Rules of Civil Procedure, we

“must view the facts in the light most favorable to the nonmoving party and draw all

inferences in that party’s favor.” Id. (citation omitted).

                                              II.

       Because we write for the parties, and because the District Court provided a

thorough recitation of the facts in its published opinion, see Embrico v. U.S. Steel Corp.,

404 F. Supp. 2d 802, 806-17 (E.D. Pa. 2005), we repeat only the facts essential to our

decision. Appellants are former non-union managerial employees of U.S. Steel’s Fairless

Works (Fairless) in Bucks County, Pennsylvania. At the beginning of the 1990s, Fairless




                                               3
operated a “Tin Line” and a “Galvanized Line,” but U.S. Steel decided in the late 1990s

to cease operating the Tin Line.

       On August 2, 2001, Fairless Operating Manager Dennis Jones (Jones) prepared

two documents in anticipation of a reduction-in-force (RIF) that he thought would follow

the Tin Line shutdown. The first document listed operating and administrative positions

that would need to be staffed on the Galvanized Line. The second document, which

Jones characterized as a “roster” (Roster), consisted of two parts. The top half of the

Roster was captioned “Galvanize Only Management Staff” and listed administrative

positions with the names of one or two Fairless managers beside each position. The

bottom half of the Roster, where all of Appellants’ names appeared, was captioned

“Others Not Included in Above.” 1

       On August 14, 2001, U.S. Steel publicly announced its intention to close the

Fairless Tin Line. Rather than lay off employees through a RIF, however, the company

decided to offer its Fairless employees a VERP similar to one it had offered at its

corporate headquarters in Pittsburgh. Because the Fairless VERP was open to all non-




       1
              Although the Roster did not state the ages or races of any of those listed,
              beside the names of some of those on this “Not Included” half of the Roster
              were performance evaluations and handwritten notations. Next to Embrico’s
              name was a performance rating of “5A” (i.e., satisfactory) and the word
              “pension.” Beside Williams’s name was a rating of “6A” (i.e., above average)
              and the word “transferable.” Vitucci’s name was matched to a rating of “4A”
              (i.e., satisfactory) and the word “pension.”

                                             4
union employees aged 21 and over who had been working for the company for at least

one year, all of the Appellants were eligible.

       In mid-October 2001, U.S. Steel distributed written materials which itemized the

pension benefits to which each employee was entitled, both with and without the VERP

enhancement. Appellants’ VERP enhancements were worth between $130,000 and

$222,000 each. Other written materials that U.S. Steel distributed to the Fairless

employees informed them that, “in the event that sufficient reductions are not attained

through this [VERP], layoffs may result.” Embrico, 404 F. Supp. 2d at 808. On

November 8, 2001, U.S. Steel held two information sessions for employees to discuss the

VERP during which it neither disclosed how many jobs would remain at Fairless after the

shutdown, nor revealed the criteria that it would use should layoffs be required.

Appellants and the other eligible employees had until November 30, 2001 to decide

whether to take the VERP.

       Although Appellants stood to receive substantial sums for retiring early under the

VERP, initially they were unsure whether to accept it, or take their chances and hope to

be offered positions at Fairless following the Tin Line shutdown. Appellants attempted to

dispel some of their uncertainty with pointed inquiries about their prospects to U.S.

Steel’s upper management. Appellants’ questions were met with noncommittal

responses, however, which made them uneasy because upper management had given

Appellants assurances of continued employment with the company and asked them about



                                                 5
their transfer preferences during prior downsizings at U.S. Steel. Appellants became even

more convinced that their days with U.S. Steel were numbered when they learned that

some of the other VERP-eligible Fairless managers had received private assurances that

they would have jobs after the closure of the Tin Line. Ultimately, 43 of the 64 eligible

employees — including all three Appellants — accepted the VERP.

                                            III.

       At the conclusion of extensive discovery, U.S. Steel moved for summary judgment

arguing that Appellants had not created a triable issue that the company’s implementation

of the Fairless VERP amounted to a constructive discharge. For that reason, and because

Appellants had not alleged any other adverse employment action, U.S. Steel contended

that they could not state a prima facie case for any statutory violation. The District Court

agreed with U.S. Steel, and set forth its reasons in a published opinion. See Embrico, 404

F. Supp. 2d at 818, 828-35. We agree with the District Court’s opinion.

       Disparate treatment claims brought under Title VII, the ADEA, the PHRA, and

ERISA all are analyzed using the familiar three-step framework of McDonnell Douglas

Corp. v. Green, 411 U.S. 792 (1973). At issue here is whether Appellants suffered an

adverse employment action, which includes constructive discharge. See Hill v. Borough

of Kutztown, 455 F.3d 225, 247 n.32 (3d Cir. 2006) (citation omitted). Appellants claim

that U.S. Steel administered the VERP in such an unfair manner that they were

constructively discharged.



                                             6
       “Constructive discharge occurs when an employer knowingly permit[s] conditions

of discrimination in employment so intolerable that a reasonable person subject to them

would resign.” See Spencer v. Wal-Mart Stores, Inc., 469 F.3d 311, 317 n.4 (3d Cir.

2006) (internal citation and quotation marks omitted). Stated another way, the plaintiff

must show that the alleged discrimination goes beyond a “threshold of intolerable

conditions.” Duffy v. Paper Magic Group, Inc., 265 F.3d 163, 169 (3d Cir. 2001) (internal

quotation marks omitted). “[I]ntolerability . . . is assessed by the objective standard of

whether a reasonable person in the employee’s position would have felt compelled to

resign — that is, whether he would have had no choice but to resign.” Connors v.

Chrysler Financial Corp., 160 F.3d 971, 976 (3d Cir. 1998) (citation, internal quotation

marks, and alteration omitted). We apply this same standard to all of Appellants’ claims.

See Gray v. New York Newspapers, Inc., 957 F.3d 1070, 1079 n.5 (3d Cir. 1992).

       “[T]he use of an early retirement program to dismiss redundant or

underperforming employees is not by itself” unlawfully discriminatory. See Sempier v.

Johnson & Higgins, 45 F.3d 724, 732 (3d Cir. 1995) (citations omitted); see also Colgan

v. Fisher Scientific Co., 935 F.2d 1407, 1422 (3d Cir. 1991). In the context of a forced

retirement claim, the issue of voluntariness is the factor distinguishing a discharge from a

mere early retirement. See Baker v. Consolidated Rail Corp., 835 F. Supp. 846, 852

(W.D. Pa. 1993) (citing Henn v. National Geographic Soc’y, 819 F.2d 824, 828 (7th Cir.

1987)). To be considered voluntary, the decision to retire must be “informed, free from


                                              7
fraud or misconduct, and made after due deliberation.” Baker, 835 F. Supp. at 852; see

also Gray, 957 F.2d at 1081.

       Viewing the evidence in the light most favorable to Appellants, there is no triable

issue of material fact to support their claim that their VERP elections were involuntary.

A reasonable jury could conclude that upper management privately assured the Fairless

managers listed on the top half of the Roster that they would still have jobs at the

company following the Tin Line shutdown, and that none of the employees on the bottom

half of the Roster received similar assurances.2 The evidence also would permit a jury to

find that U.S. Steel was aware that rumors of these selective assurances began to spread at

Fairless and that Appellants learned of those rumors. Given the evidence that U.S. Steel

had extended assurances of continued employment during VERPs which preceded prior

downsizings, a jury could find that employees who did not receive assurances during the

Fairless VERP rationally could assume that they were less likely to have jobs at the

company in the event of a RIF than those who had received such assurances.

Nevertheless, this evidence would not sustain a jury finding that U.S. Steel’s



       2
              As the District Court noted, eight of the nineteen employees listed on the top
              half of the Roster — and thus, under Appellants’ characterization of the
              evidence, pre-selected for retention — declined the VERP. See Embrico, 404
              F. Supp. 2d at 811. Although this evidence seems to vitiate Appellants’
              contention that all of the managers on the top half of the Roster received
              private assurances of continued employment, we assume that the jury could
              find that these managers took the VERP notwithstanding any assurances they
              may have received.

                                              8
administration of the Fairless VERP created conditions “so intolerable that a reasonable

person subject to them would resign.” See Spencer, 469 F.3d at 317 n. 4 (internal citation

and quotation marks omitted). We reach this conclusion for several reasons.

       First, although we recognize that a jury could find “misconduct” in the form of

U.S. Steel’s admitted deviation from its policy of refraining from communicating with

members of its workforce who would have positions after any RIF that followed a VERP,

see Baker, 835 F. Supp. at 852, the company’s misconduct is only one “factor” in

ascertaining the voluntariness of Appellants’ decision to take the VERP. See Gray, 957

F.2d at 1085. Appellants’ own theory of the case shows why U.S. Steel’s violation of its

company policy is not dispositive of this issue. Appellants complain that at least some of

those listed on the top half of the Roster received assurances of continued post-VERP

employment at the company, whereas none of those on the bottom half of the Roster

received similar assurances. If U.S. Steel’s misconduct had created “intolerable” working

conditions, one would have expected all of those listed on the bottom half of the Roster to

accept the VERP. In point of fact, however, five of those whose names appeared on the

bottom half of the roster refused the VERP and two of those five were retained after the

VERP. See Embrico, 404 F. Supp. 2d at 811. This evidence confirms that, although

reasonable employees in Appellants’ situation could have resigned — as Appellants did

— a reasonable employee also could have taken his chances and waited to see how many

colleagues accepted the VERP. The plausibility and indeterminacy of each of these


                                            9
contingencies precludes Appellants from meeting their burden of showing that a

reasonable person in their situation would resign. See Spencer, 469 F.3d at 317 n.4; see

also Gray, 957 F.2d at 1082 (“the issue is whether the reasonable inferences from this

record would allow a jury to infer that [Appellants] would have been fired (in violation of

the ADEA) had [they] turned down the offer of early retirement.”) (citation, internal

quotation marks, and alterations omitted) (emphasis added).

       Second, all Fairless employees on both sides of the Roster were given written

materials which explained the VERP, set forth individualized estimates of the dollar

amounts they could expect to receive with and without the VERP enhancement, and

stated the possibility of layoffs if too few employees accepted the VERP. All Fairless

employees were given the same amount of time — approximately six weeks — to

consider the VERP. Thus, all VERP-eligible employees at Fairless “receive[d]

information about what would happen in response to the choice” and had sufficient time

to weigh their options. See Gray, 957 F.2d at 1081, 1085 (finding no triable issue that an

employee was “bullied” into taking early retirement when she “contemplated the offer for

some 45 days.”). To the extent Appellants complain that they received less information

than those assured of continued employment, we note that the relevant inquiry is not

whether one employee received more information than another while considering a

VERP, which reflects a state of affairs endemic to any such offer. Rather, the relevant

question is whether Appellants received so little information that their decision to accept


                                             10
the VERP was involuntary. As we have explained, there is no genuine issue of material

fact on this issue.

       Finally, we cannot say that the choice posed by the Fairless VERP left Appellants

between a rock and a hard place. See E.E.O.C. v. Westinghouse Elec. Corp., 925 F.2d

619, 634 (3d Cir. 1991) (noting that an “employer’s offer of early retirement may create

[a] prima facie case of age discrimination if it sufficiently alters [the] status quo [such]

that each choice facing employee makes him worse off than he was before [the] offer”)

(citation omitted). On this subject, we have explained:

       [W]e start by assuming that the employer is complying with the ADEA.
       Now the employer adds an offer of early retirement. Provided the employee
       may decline the offer and keep working under lawful conditions, the offer
       makes him better off. He has an additional option, one that may be (as it
       was here) worth a good deal of money. He may retire, receive the value of
       the package, and either take a new job (increasing his income) or enjoy new
       leisure. He also may elect to keep working and forfeit the package. This
       may put him to a hard choice; he may think the offer too good to refuse; but
       it is not Don Corleone’s ‘Make him an offer he can't refuse.’ ‘Your money
       or your life?’ calls for a choice, but each option makes the recipient of the
       offer worse off. When one option makes the recipient better off, and the
       other is the status quo, then the offer is beneficial. That the benefits may
       overwhelm the recipient and dictate the choice cannot be dispositive. The
       question ‘Would you prefer $100,000 to $50,000?’ will elicit the same
       answer from everyone, but it does not on that account produce an
       ‘involuntary’ response.


Gray, 957 F.2d at 1080-81 (citation and ellipsis omitted) (quoting Henn, 819 F.2d at 826).

In the case at bar, we acknowledge that the “status quo” was not perpetual continued

employment. Rather, as of August 14, 2001 — the date the shutdown of the Tin Line


                                              11
became public — the status quo was that Fairless soon would have more employees than

jobs. Thus, by the time the VERP was announced in October 2001, Appellants had two

options: accept early retirement with the VERP enhancement (and receive at least

$130,000 apiece), or decline the VERP and continue to work in the same relative

uncertainty — i.e., the threat of a layoff under a RIF — that existed once the Tin Line

shutdown had been announced in August. Appellants were not faced with a Hobson’s

choice.

       In light of the implications of the Tin Line shutdown for the Fairless workforce,

we have no doubt that Appellants’ uncertainty about their future with U.S. Steel made

their contemplation of the VERP difficult and stressful. But this state of affairs does not,

as a matter of law, rise to the level of “intolerable” conditions resulting in constructive

discharge. See Duffy, 265 F.3d at 170; see also Gartman v. Gencorp Inc., 120 F.3d 127,

130 (8th Cir. 1997) (finding that a company did not create an intolerable condition by

forcing an employee to choose between continuing to work in a plant “with an uncertain

future” or “resigning”). As we have explained:

          “Intolerability” is not established by showing merely that a reasonable
          person, confronted with the same choices as the employee, would have
          viewed resignation as the wisest or best decision, or even that the
          employee subjectively felt compelled to resign; presumably every
          resignation occurs because the employee believes that it is in his best
          interest to resign. Rather, “[i]ntolerability . . . is assessed by the objective
          standard of whether a ‘reasonable person’ in the employee's position would
          have felt compelled to resign,”— that is, whether he would have had no
          choice but to resign.


                                                12
Connors, 160 F.3d at 976 (emphasis in original) (quoting Blistein v. St. John’s College,

74 F.3d 1459, 1468 (4th Cir. 1996)).

         In sum, Appellants have not created a triable issue that they were constructively

discharged. We agree with the District Court’s conclusion that Appellants’ inability to

establish an adverse employment action doomed all of their claims. See Embrico, 404 F.

Supp. 2d at 818, 828, 832, 835. Accordingly, we will affirm the Order of the District

Court.




                                              13
