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Abernathy v. Southern Star Central Gas Pipeline

United States District Court, Tenth Circuit

June 17, 2013



ERIIC F. MELGREN, District Judge.

In this case, Plaintiff Fred Abernathy asserts claims for retaliatory termination and refusal to rehire under the Age Discrimination in Employment Act of 1967 ("ADEA")[1] and Title VII of the Civil Rights Act of 1964 ("Title VII").[2] Before the Court is the Motion for Summary Judgment (Doc. 38) filed by Defendant Southern Star Central Gas Pipeline ("Southern Star"). For the reasons stated herein, the Court grants Southern Star's motion for summary judgment.

I. Factual and Procedural Background[3]

Defendant Southern Star is a natural gas transmission and storage corporation organized under the laws of Delaware, with its principal place of business in Kentucky. Plaintiff Fred Abernathy is a Kansas resident who worked for Southern Star from January 14, 2008, until his termination on March 23, 2011. Southern Star owns easements for the majority of its operations and interacts with the landowners associated with these easements through various land representatives. These land representatives are responsible for negotiating landowner agreements, resolving landowner disputes, and addressing other issues that arise in connection with Southern Star's easements. Over the years, Southern Star has retained land representatives in fluctuating proportions of employees and independent contractors. The amount and character of work in Southern Star's land department changes from season to season. Historically, construction projects begin in March, often making spring and summer the busiest seasons for land representatives.

A. Plaintiff's Employment and First EEOC Charge Against Southern Star

Plaintiff began working for Southern Star as an independent contractor land representative on August 7, 2007. Plaintiff continued to work as an independent contractor until Southern Star hired him as an employee land representative on January 14, 2008, when he was forty-seven years old. In the course of his employment with Southern Star, Plaintiff was disciplined on two occasions for hostile and abusive interactions with co-workers, including a last-chance written warning issued on November 16, 2009.

At all times relevant to this dispute, Southern Star maintained an Equal Employment Opportunity Statement and Non-Discrimination Policy (the "Policy"), which prohibited unlawful discrimination and harassment. The Policy included procedures for employees to report unlawful behavior, and it prohibited retaliation against employees who made good-faith reports under those procedures. The Policy also provides that "[i]ntentionally filing a false report of a violation of this policy will be deemed a violation of this policy."[4]

On March 26, 2010, Plaintiff filed a charge of discrimination against Southern Star with the Equal Employment Opportunity Commission ("EEOC"). In this charge (the "First Charge"), Plaintiff accused Southern Star of age discrimination for subjecting him to discipline for verbal outbursts while giving younger employees more deferential treatment. Plaintiff also claimed that this discipline constituted retaliation for previously reporting another employee's ethics violations. On May 10, 2010, Southern Star's Human Resources Manager and General Counsel, Gayle Hobbs, prepared and submitted a response to the First Charge, indicating that "[t]he Company vehemently denies the Charge."[5] When asked what he thought when Plaintiff filed his First Charge in 2010, Vice President of Operations for Southern Star's Kansas City division, Richard Reischman, responded, "Well, I didn't think much of it in the fact that everybody has a right to do what they feel is right. So I knew it would just work its way out."[6] When Southern Star's President and Chief Executive Officer, Jerry Morris, learned of Plaintiff's First Charge, he found it "very surprising" and "couldn't see what the basis for it might be."[7]

In the year after he filed his First Charge, Plaintiff continued to work as a land representative without any significant discipline or further complaints. On January 20, 2011, the EEOC issued a Dismissal and Notice of Rights with respect to the First Charge, but Plaintiff did not exercise his right to file a lawsuit.

B. Southern Star's Reorganization and Reduction in Force

In 2010 and 2011, Southern Star executed a company-wide reorganization. On October 5, 2010, Morris issued a memorandum to Southern Star's board of directors explaining that the purpose of the reorganization was to streamline operations and to reduce expenses. Before the reorganization, Southern Star had division offices in both Kansas City and Hesston, Kansas, which together oversaw fifteen independent districts. The reorganization closed these two division offices and collapsed the fifteen districts into five geographic regions. The reorganization also organized company leadership into five chief officer positions, including a newly-created "Chief Compliance Officer, " who had responsibility for land operations and a variety of compliance matters.

Before this reorganization, Robert Carlton served as Southern Star's Vice President of Human Resources and Administration. When the reorganization took effect in early 2011, Carlton stepped into the newly-created role of Chief Compliance Officer, which managed Southern Star's land operations. Upon assuming this position, Carlton evaluated various efficiency and cost-saving opportunities in land operations. He noted that Southern Star's practice of hiring more employee land representatives and using fewer independent contractor land representatives failed to generate the expected savings. Carlton also believed that the land representatives were too isolated and geographically restricted, which he believed led to inefficiency and an unequal distribution of work.

To address the inefficiencies that he perceived, Carlton decided to implement a reorganization and reduction in force (the "RIF") in land operations. Carlton reduced Southern Star's land operations from six employee land representatives and one land supervisor to only five employee land representatives who would flexibly cover the five newly-created regions. These five employee land representatives would be geographically dispersed to perform work throughout the entire system. Carlton planned to use independent contractors to handle any work overflow or seasonal projects that arose. Morris did not impose any target numbers or staffing requirements for Carlton to execute, and Southern Star issued a Frequently Asked Questions document that assured employees that the reorganization was not a mandate to eliminate a certain number of jobs. As a result of the reorganization within the land department, Southern Star streamlined its use of land representatives and realized a cost savings of approximately $500, 000.00.

C. Reischman's E-mail Concerning Plaintiff

On July 12, 2010, Reischman sent an e-mail to Hobbs and Carlton that said, "After today, I am ready to cut the cord on Fred and Lawanna."[8] Reischman's e-mail did not expressly contemplate Plaintiff's First Charge, but instead referenced Reischman's frustration with Plaintiff's behavior and outburst at a staff meeting earlier that day. In the e-mail, Reischman made multiple indications that his frustration was temporary and that he felt better after writing the e-mail. Neither Hobbs nor Carlton responded to Reischman's e-mail. Reischman also testified that he never followed up on the subject with Carlton or Hobbs because he was only temporarily upset with Plaintiff's outburst and he assumed that the problems would eventually work themselves out.

During this time, Hobbs provided legal advice on a wide range of issues in the Kansas City division. Hobbs testified that in addition to two EEOC charges, "[t]here was a lot of unrest - it was a toxic environment, it was a toxic office environment."[9] Due to these varied issues, Hobbs indicated that "we had management there attempting to work their way through what was a bit of a minefield."[10]

D. Plaintiff's Termination and Inquiry Regarding Rehire

In accordance with his plans to implement the reorganization and RIF, Carlton demoted the existing Land Supervisor, Terry Blanding, to an employee land representative, thereby eliminating the supervisory position altogether. Carlton then eliminated two of the seven employee land representative positions. As a result, on March 23, 2011, Southern Star terminated Plaintiff and another employee land representative, Welsey Pekarek. Plaintiff was fifty years old when Southern Star eliminated his position. While Carlton reviewed a number of statistics, he testified that his ultimate decision to terminate Plaintiff and Pekarek was based solely on seniority. Southern Star hired Plaintiff and Pekarek in 2008, while the remaining employee land representatives each had at least twenty years of tenure with the company and its predecessors.

In addition to Plaintiff and Pekarek, Southern Star terminated seven other employees as a result of its reorganization and RIF. These seven individuals each held discrete positions that were not shared by others with the same title in the same division. Robert Beaulieu, Richard Reischman, and Chris Ellison each held supervisory and administrative roles at Southern Star's division offices, which were eliminated when Southern Star closed those offices as part of its reorganization. Roy Hershberger, Ken Bengston, and Richard Stocke held managerial or technical positions in departments that were eliminated or consolidated through Southern Star's reorganization. Finally, William Wilson was a part-time facility technician when Southern Star determined that this position required a full-time worker. Southern Star offered Wilson a full-time position, but he declined the offer because he wanted to work part-time.

At the time of Plaintiff's termination, Southern Star's Kansas City division had the heaviest workload, and Plaintiff and Pekarek were among the busiest land representatives in the company. After Plaintiff's termination, other employee land representatives absorbed many of Plaintiff's and Pekarek's duties. In June 2011, Southern Star temporarily engaged two independent contractor land representatives to perform seasonal work in the summer months of ...

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