John Delaney v. Bank of America Corp. , 766 F.3d 163 ( 2014 )

13-184-cv
John Delaney v. Bank of America Corp., et al.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
_____________________
August Term, 2013
(Argued: January 14, 2014 Decided: September 5, 2014)
Docket No. 13-184-cv
_____________________
JOHN DELANEY,
Plaintiff-Appellant,
-v.-
BANK OF AMERICA CORPORATION, MERRILL LYNCH, PIERCE, FENNER & SMITH, INC.,
Defendants-Appellees.
_______________________
Before: WINTER, WESLEY and HALL, Circuit Judges.
_______________________
On appeal from a judgment of the United States District Court for the Southern
District of New York (Paul A. Engelmayer, J.), entered on December 11, 2012, granting
summary judgment in favor of plaintiff’s former employer on plaintiff’s claims of age
discrimination, under the Age Discrimination in Employment Act of 1967, 29 U.S.C. § 621 et
seq., and breach of contract.
AFFIRMED.
_______________________
JONATHAN HONIG, Feder Kaszovitz LLP, New York, NY, for Plaintiff-
Appellant.

Defendants-Appellees have indicated in their brief on appeal that Defendant-Appellee
Merrill Lynch, Pierce, Fenner & Smith, Inc. was improperly pled as Bank of America Merrill
Lynch f/k/a Banc of America Securities, LLC. The Clerk of the Court is therefore
requested to amend the caption as above.
PATRICK J. LAMPARELLO, III (STEVEN D. HURD, on the brief), Proskauer Rose
LLP, New York, NY, for Defendants-Appellees.
_______________________
PER CURIAM:
Plaintiff-Appellant John Delaney (“Plaintiff-Appellant” or “Delaney”) appeals from
the December 11, 2012 judgment of the United States District Court for the Southern
District of New York (Paul A. Engelmayer, J.) granting summary judgment in favor of
Appellant’s former employers, Defendants-Appellees Bank of America Corporation, and
Merrill Lynch, Pierce, Fenner & Smith, Inc.1 (collectively “Defendants-Appellees” or
“BoA”), on his claims of age discrimination, under the Age Discrimination in Employment
Act of 1967 (“ADEA”), 29 U.S.C. § 621 et seq., and breach of contract. For the reasons that
follow, we affirm the judgment of the district court.
BACKGROUND
Delaney began working for BoA’s predecessors in 1988 and continued to be
employed by them through multiple mergers and acquisitions until his termination in
September 2010. At all relevant times, Delaney remained an at-will employee. From 1996 to
2006, Delaney worked in the High Yield Sales Group in which he predominantly sold “high
yield products.” His compensation included a base salary and, where applicable, an annual
award of discretionary incentive compensation.
In 2005, Delaney was transferred to the Fixed Income Middle Markets Sales Group
(“Middle Markets”). Although employees of this group “were expected to sell a wider array
1 See supra n.*.
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of products and cover smaller accounts,” Delaney continued to sell the same high yield
products. He also remained in the same physical location with other members of the High
Yield group. Delaney, however, was assigned to a different reporting line and became
eligible for compensation under the Middle Markets Sales Compensation Plan whereby he
received an annual salary and quarterly commission on the basis of his production credits.
While working for Middle Markets, his commissions exceeded $1.6 million in 2009. That
same year, Delaney also received a rating of “exceeds/meets” expectations on his annual
performance review.
In March 2010, Delaney was transferred back to the High Yield group. According to
Delaney, this transfer “was a reward for [his] outstanding work developing middle markets
accounts into higher revenue, institutional accounts.” Appellant Br. 6. Delaney also claims
that BoA “agreed that his compensation would not suffer from the transfer because he
would be awarded sufficient accounts to generate production credits so that his
compensation would remain at least level and, hopefully, increase.” Id. at 7. For BoA,
however, this transfer was the result of an institutional re-organization aimed at removing all
High Yield sales personnel from Middle Markets, which closed in 2012. As a result of this
transfer, although Delaney remained in the same physical location and continued to manage
the same accounts, his compensation reverted to the one associated with High Yield
employees, i.e., a base salary and, if eligible, a discretionary incentive compensation award.
Delaney also received two additional accounts upon his transfer.
In July 2010, Delaney received a negative mid-year performance review. According
to the review, his production had decreased by seven percent, while the High Yield group’s
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production as a whole had increased by twenty percent. The weaknesses cited included that
he was a “momentum sales man, [who] could improve [his] credit skills,” had “difficulty
multi-tasking,” “should cover less accounts,” and “need[ed] to focus”. The review also
noted a concern as to whether Delaney was able to handle the accounts assigned to him.
The following month, as part of a company-wide reduction-in-force (“RIF”), High
Yield managers were instructed to select underperforming employees whose dismissal would
have the least impact on the business going forward. Delaney’s performance continued to
suffer. He was ranked 136th across all BoA sales personnel for the year in September 2010,
and his performance in the High Yield group was the worst of all employees at his level.
Delaney, along with 418 other BoA employees, was selected for inclusion in the September
2010 RIF process. BoA terminated Delaney’s employment that same month. At the time,
Delaney was fifty-six (56) years old, the oldest member of the High Yield group and the only
member of that group to be terminated.
Following his termination, Delaney brought this employment discrimination action
against BoA, alleging claims of age discrimination in violation of the ADEA and breach of
contract. With respect to the breach of contract claim, Delaney alleges that BoA breached
an oral promise made to him “that his compensation would not suffer from [his] transfer [to
the High Yield group] because he would be awarded sufficient accounts to generate
production credits so that his compensation would remain at least level and, hopefully,
increase.” Appellant Br. 7. BoA moved for summary judgment, which the district court
granted after determining that Delaney failed to establish a prima facie age discrimination case.
Then assuming arguendo that Delaney had established a prima facie case, the district court
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further ruled that Delaney’s evidence was insufficient “to permit a reasonable fact-finder to
conclude that he would not have been terminated but for his age,” and thus that he failed to
establish that BoA’s legitimate nondiscriminatory reason—that Delaney was terminated as
part of a RIF and selected based on his poor performance—was a pretext for age
discrimination. Delaney v. Bank of Am. Corp., 908 F. Supp. 2d 498, 513 (S.D.N.Y. 2012).
Having dismissed Delaney’s federal claim, the district court, pursuant to 28 U.S.C. § 1367,
exercised supplemental jurisdiction over his state law claim and determined that none of the
conversations and statements identified on the record constituted an enforceable contract.
Id. at 517-18. Judgment was entered in favor of BoA. Delaney timely appealed.
DISCUSSION
On appeal, Delaney argues that in granting summary judgment in favor of BoA, the
district court failed to view the evidence in the light most favorable to him as the non-
moving party. Specifically, Delaney contends that if the district court had properly applied
this Court’s decision in Weiss v. JP Moran Chase & Co., 332 F. App’x 659, 661 (2d Cir. 2009)
(summary order), to the proffered evidence, it would have concluded that BoA’s legitimate
nondiscriminatory reason lacked credence and was instead a pretext for age discrimination.
Delaney also challenges the district court’s decision to exercise supplemental jurisdiction
over his contract law claim and further contends that if the district court had properly
considered the submitted evidence, it would have concluded that he had established a breach
of contract claim against BoA.
We review de novo a district court’s grant of summary judgment. Allianz Ins. Co. v.
Lerner, 416 F.3d 109, 113 (2d Cir. 2005). In so doing, we “construe the facts in the light
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most favorable to the non-moving party and . . . resolve all ambiguities and draw all
reasonable inferences against the movant.” Aulicino v. N.Y.C. Dep’t of Homeless Servs., 580
F.3d 73, 79-80 (2d Cir. 2009) (internal quotation marks omitted). “A dispute about a
‘genuine issue’ exists . . . where the evidence is such that a reasonable jury could decide in the
non-movant’s favor.” Beyer v. Cnty. of Nassau, 524 F.3d 160, 163 (2d Cir. 2008). We uphold a
grant of summary judgment “if the evidence, viewed in the light most favorable to the party
against whom it was entered, demonstrates that there are no genuine issues of material fact
and that the judgment is warranted as a matter of law.” Global Network Commc’ns, Inc. v. City
of New York, 562 F.3d 145, 150 (2d Cir. 2009).
I.
We consider first Delaney’s age discrimination claim. It is well established that the
burden-shifting framework set forth by the Supreme Court in McDonell Douglas Corp. v. Green,
411 U.S. 792 (1973) applies to claims bought under the ADEA. Gorzynski v. JetBlue Airways
Corp., 596 F.3d 93, 106 (2d Cir. 2010). “Under McDonell Douglas, the plaintiff bears the initial
burden of establishing a prima facie case of discrimination.” Id. Once this burden is met,
the defendant must then “articulate ‘some legitimate, nondiscriminatory reason’ for its
action.” Id. (internal quotation marks omitted). “The defendant need not persuade the
court that it was actually motivated by the proffered reason[ ]. It is sufficient if the
defendant’s evidence raises a genuine issue of fact as to whether it discriminated against the
plaintiff.” Tex. Dep’t of Cmty. Affairs v. Burdine, 450 U.S. 248, 254 (1981) (citation omitted).
When the employer meets its burden, “the plaintiff can no longer rely on the prima facie
case,” Gorzynski, 596 F.3d at 106, but “must prove that the employer’s proffered reason was
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a pretext for discrimination,” McPherson v. N.Y.C. Dep’t of Educ., 457 F.3d 211, 215 (2d Cir.
2006). Since the Supreme Court’s decision in Gross v. FBL Financial Services, Inc., 557 U.S.
167, 173 (2009), eliminating the mixed-motive analysis as to ADEA claims, “a plaintiff
bringing a disparate-treatment claim pursuant to the ADEA” satisfies this burden by
presenting facts, which “taken in [his] favor, suffice to . . . [show that] a triable issue [exists]
as to whether [his] age was a ‘but for’ cause of [his] termination.” Gorzynski, 596 F.3d at 106
(quoting Gross, 557 U.S. at 180) (internal quotations omitted).
The district court determined that Delaney failed to establish a prima facie case of age
discrimination, but because this burden is “not onerous,” Burdine, 450 U.S. at 253, we will
assume arguendo that Delaney has met this burden. We agree with the district court that BoA
has satisfied its burden to articulate a legitimate, nondiscriminatory reason for Delaney’s
termination. We have previously held that a RIF constitutes a legitimate, nondiscriminatory
reason for termination of employment. See, e.g., Roge v. NYP Holdings, Inc., 257 F.3d 164, 168-
69 (2d Cir. 2001); Carlton v. Mystic Transp., Inc., 202 F.3d 129, 136 (2d Cir. 2000). Here, BoA
has explained that Delaney’s employment was terminated as part of a company-wide RIF to
eliminate positions that generated insufficient value and that could be eliminated with little
impact to the company’s functioning and further that Delaney was selected for termination
based on his poor performance. Specifically, the record evidence shows that two months
prior to his termination Delaney received a negative mid-year performance review that raised
concerns about his productivity level. Moreover, the evidence indicates that in September
2010, Delaney was ranked 136th across all BoA sales personnel for the year and his
performance in the High Yield group was the worst of all employees at his level.
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We must now decide whether “the evidence, viewed in the light most favorable to the
plaintiff, would permit a jury to find . . . . ‘that age was the ‘but-for’ cause of the challenged
adverse employment action.’”2 Gorzynski, 596 F.3d at 106 (quoting Gross, 557 U.S. at 180).
“The condition that a plaintiff’s age must be the ‘but for’ cause of the adverse employment
action is not equivalent to a requirement that age was the employers only consideration, but
rather that the adverse employment action[ ] would not have occurred without it.” Fagan v. U.S.
Carpet Installation, Inc., 770 F. Supp. 2d 490, 496 (E.D.N.Y. 2011) (citing Gross, 557 U.S. at
175-77) (emphasis added). As the district court correctly determined, the evidence on the
record establishes that BoA engaged in a RIF in September 2010 and that 418 other
2 In his Reply Brief, Delaney contends that the “but-for” causation standard is a “trial proof
burden [having] . . . no bearing on the burden at issue on summary judgment.” Reply Br. 23.
Specifically, Delaney relies relentlessly on a summary order of this Court, Weiss v. JP Morgan
Chase & Co., which states that “[a]n employee may satisfy the ultimate burden of proving
pretext ‘either directly by persuading the court that a discriminatory reason more likely
motivated the employer or indirectly by showing that the employer’s proffered explanation is
unworthy of credence,’” to argue that the evidence taken in a light most favorable to him
supports his claim that the RIF was a “subterfuge” designed to disguise BoA’s
discriminatory animus. 332 F. App’x 659, 661 (2d Cir. 2009) (summary order); Reply Br. 21.
In the first instance, pursuant to Local Rule 32.1.1., “a summary order is not citable as
precedent.” U.S. v. Branch, 538 F.2d 314, 314 n.* (2d Cir. 1976). Second, this particular
summary order was issued thirteen (13) days prior to the Supreme Court’s decision in Gross
establishing that a “but-for” causation standard applies to ADEA claims, Gross, 557 U.S. at
180. Since Gross has come down, this Court has, as it must, continuously applied a
requirement of “but-for” causation in the pretext analysis of the McDonnell Douglas
framework in the ADEA context, including at the summary judgment stage. See, e.g., Taddeo
v. L.M. Berry & Co., 526 F. App’x 121, 122-23 (2d Cir. 2013) (summary order); Timbie v. Eli
Lilly & Co., 429 F. App’x 20, 21-22 (2d Cir. 2011) (summary order); Gorzynski, 596 F.3d at
101, 106; Bolmer v. Oliveira, 594 F.3d 134, 148 (2d Cir. 2010). Additionally, we note that the
cases cited in Weiss and relied upon by Delaney do not involve age discrimination under the
ADEA, but instead involve an alleged Employee Retirement Income Security Act of 1974
violation and a Title VII gender-based discrimination claim. See Burdine, 450 U.S. at 250-51;
see also Dister v. Cont’l Grp., Inc., 859 F.2d 1108, 1109 (2d Cir. 1988). Accordingly, we
disregard Delaney’s arguments as to Weiss’s purported application to the pretext analysis in
this case particularly in light of the fact that it does not state the law of this Circuit.
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employees were included on that month’s RIF list. Although Delaney was the only member
of the High Yield group to be terminated and also the oldest, the evidence supports BoA’s
assertion that Delaney was terminated because of his poor performance. In fact, as noted
above, in September 2010, Delaney was ranked 136th among all other BoA sales personnel
and had the worst performance of employees in his group at his level. Although Delaney
makes much of his 2009 annual performance review in which he received a rating of
“exceeds/meets” expectations, the evidence demonstrates that his performance suffered in
2010 after his return to the High Yield group.
While we must ensure that employers do not act in a discriminatory fashion, we do
“not sit as a super-personnel department that reexamines an entity’s business decisions.”
Scaria v. Rubin, 117 F.3d 652, 655 (2d Cir. 1997) (citation omitted). The only age-related
evidence that Delaney seeks to introduce is the draft Equal Employment Opportunity
Commission (“EEOC”) discrimination charge filed by C.G.,3 the second-oldest member of
the High Yield group, who was terminated six months after Delaney in March 2011. In the
draft EEOC charge, C.G. alleges that he was terminated on the basis of his age and that
colleagues and managers made repeated comments concerning his age. As the district court
correctly held, however, this evidence is inadmissible on hearsay grounds. See Fed. R. Evid.
801(c), Fed. R. Civ. P. 56(e). As the district court correctly held, the draft EEOC charge is
inadmissible hearsay—an out-of-court statement that Delaney would rely on to show the
truth of the matter asserted. See Fed. R. Evid. 801(c). Materials submitted in support of or
in opposition to a motion for summary judgment “must be admissible themselves or must
3We, like the district court, use C.G.’s initials so as to respect his privacy. See Delaney, 908 F.
Supp. 2d at 505 n.5.
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contain evidence that will be presented in admissible form at trial.” Santos v. Murdock, 243
F.3d 681, 683 (2d Cir. 2001) (per curiam); accord Fed. R. Civ. P. 56(c), (e). Even assuming,
however, that Delaney could present the evidence from the EEOC charge in admissible
form at trial by calling C.G. as a witness, the evidence would not call into doubt the
nondiscriminatory reason BoA has proffered for Delaney’s termination. Comments about
another employee’s age, removed from any context suggesting that they influenced decisions
regarding Delaney’s own employment, do not suffice to create a genuine issue of fact as to
whether age was the but-for cause of Delaney’s termination.
Delaney’s remaining arguments center on his claims that BoA engaged in a
“campaign against the oldest High Yield Sales group members” and a “simultaneous action
against the two oldest members of the High Yield” group. Appellant Br. 16, 28 n.10; Reply
Br. 1. Delaney, however, does not point to any admissible evidence in support of these
claims. “Even in the discrimination context . . . a plaintiff must provide more than
conclusory allegations to resist a motion for summary judgment.” Gorzynski, 596 F.3d at
101. Delaney’s allegations do not suffice to create a genuine issue of fact as to whether his
age was the but-for cause of his termination, id. at 106; his ADEA claim therefore fails.
II.
We turn next to Delaney’s breach of contract claim. First, we review the district
court’s exercise of supplemental jurisdiction for abuse of discretion. Carlsbad Tech., Inc. v.
HIF Bio, Inc., 556 U.S. 635, 639 (2009). “[I]n any civil action of which the district courts
have original jurisdiction, the district courts shall have supplemental jurisdiction over all
other claims that are so related to claims in the action . . . that they form part of the same
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case or controversy,” 28 U.S.C. § 1367, i.e., “derive from a common nucleus of operative
fact,” City of Chicago v. Int’l Coll. of Surgeons, 522 U.S. 156, 165 (1997) (internal quotation marks
omitted). “In general, where the federal claims are dismissed before trial, the state claims
should be dismissed as well.” Marcus v. AT&T Corp., 138 F.3d 46, 57 (2d Cir. 1998). That
said, a district court does not abuse its discretion where the “values of judicial economy,
convenience, fairness, and comity” support the exercise. Carnegie-Mellon Univ. v. Cohill, 484
U.S. 343, 350 (1988). In this case, Delaney’s federal and state claims are based on his
employment and termination by BoA, and they clearly derive from a common nucleus of
operative facts. Moreover, discovery is complete, and Delaney’s breach of contract claim
does not turn “on novel or unresolved questions of state law.” Cf. Valencia ex rel. Franco v.
Lee, 316 F.3d 299, 306 (2d Cir. 2003) (internal quotation marks omitted). We hold therefore
that the district court did not exceed the bounds of its discretion in exercising supplemental
jurisdiction over Delaney’s non-federal claim.
Second, we review Delaney’s allegation in support of his breach of contract claim.
The district court correctly noted that Delaney’s various statements created an ambiguity as
to the actual nature of the oral promise he asserted was made to him by BoA. Delaney, 908
F. Supp. at 515. On appeal, Delaney contends that the oral promise concerned an
agreement “that his compensation would not suffer from [his] transfer [to the High Yield
group] because he would be awarded sufficient accounts to generate production credits so
that his compensation would remain at least level and, hopefully, increase.” Appellant Br. 7.
Under New York law, a binding contract can be formed without the execution of a
written agreement. See Mun. Consultants & Publishers, Inc. v. Town of Ramapo, 47 N.Y.2d 144,
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148-49 (1979). Nonetheless, and as the district court recognized, the plaintiff must
demonstrate that the terms of any agreement are definite. See Charles Hyman, Inc. v. Olsen
Indus., Inc., 227 A.D.2d 270, 275 (N.Y. App. Div. 1996) (“[T]he burden of establishing the
terms of the verbal contract—which falls to the proponent—presents a formidable obstacle
to its enforcement. Before a court will impose [a] contractual obligation, it must ascertain
that a contract was made and that its terms are definite.” (citing, in relevant part, Cobble Hill
Nursing Home v. Henry & Warren Corp., 74 N.Y.2d 475, 482 (1989) (other citations omitted)).
In this case, Delaney’s allegation that BoA promised that his compensation would not suffer
lacks the definiteness required by New York law. Maffea v. Ippolito, 247 A.D.2d 366, 367
(N.Y. App. Div. 1998) (finding that the terms of an oral agreement to split the proceeds of a
lottery win were “not sufficiently definite to be enforced”); see also Hecht v. Helmsley-Spear, Inc.,
65 A.D.3d 951, 951 (N.Y. App. Div. 2009) (“The oral assurances lacking any actual terms as
to the amount, form, and timing of payment of any compensation, and including no
methodology or custom providing for the determination of the same, failed to manifest a
clear intention on the part of the parties to form a binding, definite severance agreement.”).
Our review of the record yields no evidence of the definite nature and terms of the oral
promise Delaney asserts was given. Moreover, Delaney’s deposition testimony undermines
any allegation that the contract terms were definite:
Q. Was there any discussion about your compensation if you
were to transfer into high yield sales, institutional accounts
desk?
A. Not specifically.
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Q. That answer makes me ask, was there a discussion generally?
A. Well, simply that I would move from the commission basis
of being paid to the salary/bonus structure.
Q. As far as the salary/bonus structure, were you told a specific
salary that you would be earning?
A. No. But there was no change.
Q. There was no change from where you were in middle
markets?
A. Yes.
Q. What about the bonus, was there any discussion about what
bonus you would be paid?
A. Not specifically.
Q. There was no guarantee of a bonus, correct?
A. Right.
J.A. at 129. Additionally, the record contains no evidence of a conversation concerning the
transfer of specific accounts to Delaney as part of his move from Middle Markets to High
Yield. Finally, with respect to his bonus compensation, the district court correctly
determined that Delaney was an at-will employee and that although annual bonuses were
discretionary, there is no record evidence, or even an allegation, indicating that Delaney was
promised a mid-year bonus. We thus affirm the dismissal of Delaney’s breach of contract
claim for substantially the same reasons as did the district court.
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CONCLUSION
For the foregoing reasons, we AFFIRM the judgment of the district court.
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