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Noreen v. Pharmerica Corp.

United States District Court, D. Minnesota

July 31, 2015

Loren Noreen, Plaintiff,
v.
Pharmerica Corp., Defendant

Stephen J. Snyder, Brent C. Snyder, Snyder & Brandt, P.A., Minneapolis, Minnesota, for Plaintiff.

Heather M. Muzumdar, Deborah S. Brenneman, Keith P. Spiller, Thompson Hine LLP, Cincinnati, Ohio, Jessica S. Pecoraro, John Thomas Duffey, R. Christopher Sur, Maslon LLP, Minneapolis, Minnesota, for Defendant.

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MEMORANDUM OPINION AND ORDER

RICHARD H. KYLE, United States District Judge.

INTRODUCTION

Plaintiff Loren Noreen worked for Defendant Pharmerica Corporation (" Pharmerica" ) as a staff pharmacist in Fridley, Minnesota, for more than 38 years. After Pharmerica terminated his employment in December 2013, he commenced this action alleging age discrimination in violation of federal and state law. Presently before the Court is Pharmerica's Motion for Summary Judgment. For the reasons that follow, the Motion will be granted.

BACKGROUND

When viewed in the light most favorable to Noreen, the record reveals the following facts. The Court notes, however, that most of the pertinent facts are undisputed.

I. Pharmerica and Noreen

Pharmerica is an institutional pharmacy, meaning it provides pharmaceuticals and related supplies to institutional clients such

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as long-term care facilities and nursing homes. (Rife Decl. ¶ 2.) It has pharmacies throughout the country, including one in Fridley, Minnesota. (Id. ¶ 3; Noreen Dep. at 14.)

Noreen is a licensed pharmacist who was hired to work at Pharmerica's Fridley pharmacy in 1975. (Noreen Dep. at 14.) In 1983 he was promoted to manager, a position he held until a corporate reorganization in 1999. (Id. at 15, 19.) Generally speaking, he received positive performance reviews, although in the 1990s he was placed on a performance improvement plan due to several deficiencies in his management of the Fridley pharmacy; his personnel file and reviews also document, from time to time, communication issues with his co-workers. (Muzumdar Decl. Exs. 7, 17-21.)

II. Declining business in Fridley, the first RIF, and the RIF Matrix

Pharmerica's staffing needs at a given pharmacy are tied to the number of patients the pharmacy serves. (Rife Dep. at 56.) Starting in mid-2012, the number of patients served by the Fridley pharmacy declined as a result of Pharmerica's loss of several large clients. (Rife Decl. ¶ 4; Muzumdar Decl. Ex. 8.) As a result, it decided to reduce the number of pharmacists in Fridley. (Rife Dep. at 55-56.)

The first reduction in force (RIF), consisting of one pharmacist, took place in September 2012. (Rife Decl. ¶ 6; Muzumdar Decl. Ex. 9.) Corey Rife, Pharmerica's Regional Pharmacy Director for the West Central Region, made the decision which pharmacist would be laid off. (Rife Decl. ¶ 6.) To do so, he used a " RIF Matrix" that had been prepared by Pharmerica's outside counsel and was sent to him by Jesse Nelson, a Pharmerica Human Resources (HR) Generalist. (Nelson Dep. at 45-47; Muzumdar Decl. Ex. 9.) Before sending the Matrix to Rife, Nelson filled in demographic information for each pharmacist, including his or her age. (See Muzumdar Decl. Ex. 9.)

The Matrix's Guidelines set forth sequential steps a manager was supposed to follow. (Id.) At the first step, the manager was to identify the departments and jobs to be affected, determine a timeline for the RIF and the number of positions to be eliminated, and notify HR. (Id.) Next, the manager was to rank employees in affected job categories by the overall grades they had received at their most recent annual performance appraisals; from highest to lowest, the grades were O (outstanding), E (exceeds expectations), M (meets expectations), NI (needs improvement), and U (unacceptable). (Id.; Norvold Aff. Ex. 22.) At the next step, the manager was to " [s]ub-rank ALL employees within the Performance Evaluation rating from highest to lowest," while " indicat[ing] what documentable reasons [were] used in assigning the [sub-]rankings." (Muzumdar Decl. Ex. 9.) In other words, if four employees had received an O grade at their most recent appraisals, those employees were to be sub-ranked within that grade from 1 to 4. The employees having received an E grade would then be sub-ranked in the same fashion, and so on through the grades M, NI, and U. Once the sub-rankings were complete, persons were to be " selected for RIF based on being the lowest rating." (Id.) The Matrix was then to be sent to HR, along with " documentation to support rankings and Sub-[rankings]," in order to be " analyze[d]" for " adverse impact on protected classes per Federal guidelines." (Id.)

Every pharmacist working at Fridley had received an M grade at his or her performance appraisal immediately prior to the September 2012 RIF, except for two hired in 2012 who had not yet been reviewed. (Id.) As all the pharmacists were essentially " tied," Rife, who was based in

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Nebraska, sub-ranked them jointly using information provided to him by Mike Koski, a long-time Fridley employee and former Chief Pharmacist there. (Rife Decl. ¶ 6.) Based on that information, Noreen ranked 10th out of the 11 staff pharmacists; the last-ranked pharmacist, who was also the youngest and the newest hire, was laid off. (Muzumdar Decl. Ex. 9.)

III. Teich is hired and RIFs continue

Shortly after the September 2012 RIF, Pharmerica hired Dan Teich, then 29 years old, to manage the Fridley pharmacy; Teich reported to Rife. (Teich Dep. at 20; Rife Dep. at 9-10.) Business in Fridley continued to fall after Teich was hired, however, leading him to RIF additional pharmacists.

In December 2012, Teich laid off two pharmacists. (Muzumdar Decl. Ex. 10.) To do so, he used the same Matrix Rife had used for the September 2012 RIF. And once again, Nelson prepopulated the Matrix with the pharmacists' ages before sending it to Teich. (Id.) At the time, the pharmacists ranged in age from 36 to 64, but only two were under 50 (36 and 48) and three, including Noreen, were over 60. (Id.)

As in September 2012, all of the pharmacists had received an M grade at their most recent annual reviews, except for one too new to have been reviewed, so they were all grouped together. (Id.) Teich then sub-ranked them based on ten criteria, including communication skills, accuracy, organizational knowledge, and reliability. (Id.) Noreen placed 8th out of the 10 pharmacists in the sub-rankings, with good scores for productivity and customer service but poor scores for versatility, communication, and being a team player. (Id.) Ultimately, the two lowest-ranked pharmacists, ages 48 (the second-youngest) and 61 (the third-oldest), were laid off. (Id.)

Then, Teich RIFed another pharmacist in October 2013, again using the RIF Matrix. (Id. Ex. 11.) Between the December 2012 and October 2013 RIFs, however, the pharmacists had received their annual evaluations. Hence, this time they did not all fall within one grade -- rather, one had an E grade; four had an M grade, including Noreen; and three had an NI grade. (Id.) One of the three NI pharmacists, 55-year-old Michael Kelly, was chosen for layoff; the two others with NI grades, who were retained, were younger (52) and older (62) than Kelly. (Id.)

As a result, following the October 2013 RIF, seven staff pharmacists remained at Fridley with ages ranging from 36 to 65. Only one was younger than 52 and three, including Noreen, were over 60. (Id.)

IV. The December 2013 RIF

By December 2013, business in Fridley had fallen 30% from the same period in 2012. Accordingly, Rife determined that two additional pharmacists should be laid off, and he left the task of selecting those pharmacists to Teich. (Rife Decl. ¶ 4; Rife Dep. at 68.) As before, Nelson sent Teich a RIF Matrix to determine which pharmacists would be chosen, and once again he prepopulated the Matrix with the pharmacists' ages (then 36, 52, 53, 54, 61, 62, and 65). (Muzumdar Decl. Ex. 12.) Of the seven, one had an E grade; four, including Noreen, had M grades; and two had NI grades. (Id.) Therefore, if the Matrix Guidelines had been strictly followed, the two NI-graded pharmacists (David Pelto, age 52, and David Tschida, age 62) should have been laid off.

But that is not what happened. Instead, Teich sub-ranked all of the pharmacists together as one group, even though they had received three different grades in their most recent annual reviews.[1] And

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when he sub-ranked the seven pharmacists, Noreen and Tschida had the lowest rankings; Noreen's poor showing was largely due to low scores for communication and being a team player. (Muzumdar Decl. Ex. 12.) Teich then selected Noreen (age 61) and Tschida (age 62) for the RIF, passing over 52-year-old Pelto, even though he had received the lowest grade of ...


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