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Severe v. O'Reilly Automotive Stores, Inc.

United States District Court, N.D. Iowa, Central Division

March 23, 2015

STEVEN M. SEVERE, Plaintiff,
v.
O'REILLY AUTOMOTIVE STORES, INC., Defendant

Page 893

For Steven M Severe, Plaintiff: Patrick D Smith, LEAD ATTORNEY, Bradshaw, Fowler, Proctor & Fairgrave, PC, Des Moines, IA; Mitchell G. Nass, Bradshaw Fowler Proctor Fairgrave, Des Moines, IA.

For O'Reilly Automotive Stores, Inc., Defendant: Thomas M Cunningham, LEAD ATTORNEY, Nyemaster Goode, PC, Des Moines, IA; David T Bower, Nyemaster Goode, Des Moines, IA.

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MEMORANDUM OPINION AND ORDER ON DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

LEONARD T. STRAND, UNITED STATES MAGISTRATE JUDGE.

TABLE OF CONTENTS

I. INTRODUCTION

II. PROCEDURAL HISTORY

III. RELEVANT FACTS

IV. SUMMARY JUDGMENT STANDARDS

V. ANALYSIS

A. Age Discrimination

1. Applicable Standards

2. Discussion

a. Who made the decision to terminate, and when?

b. Would Severe have been discharged solely

because of the Trickle Pay Arrangement?

[BO]d.[EO]c. Martin's alleged role

B. FMLA Discrimination

1. Applicable Standards

2. Discussion

VI. CONCLUSION

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I. INTRODUCTION

This case is before me on a motion (Doc. No. 22) for summary judgment filed by defendant O'Reilly Automotive Stores, Inc. (O'Reilly). Plaintiff Steven Severe (Severe) has filed a resistance (Doc. No. 28) and O'Reilly has filed a reply (Doc. No. 33). I heard oral arguments on February 20, 2015. Patrick Smith appeared for Severe while Thomas Cunningham and David Bower appeared for O'Reilly. The motion is now fully submitted and ready for decision.

II. PROCEDURAL HISTORY

Severe commenced this action by filing a petition and jury demand in the Iowa District Court for Hamilton County. O'Reilly filed a notice (Doc. No. 1) of removal to this court on October 16, 2013. Severe then filed an amended complaint and jury demand (Doc. No. 4) on October 23, 2013. In his complaint, as amended, Severe contends that he was employed by O'Reilly until he was unlawfully discharged due to his age and his use of medical leave. He asserts the following causes of action:

Count I: Age discrimination in violation of the Iowa Civil Rights Act (ICRA)
Count II: Age discrimination in violation of the Age Discrimination in Employment Act (ADEA)
Count III: Discrimination in violation of the Family and Medical Leave Act (FMLA)[1]

Doc. No. 4. O'Reilly denies Severe's operative factual allegations, denies liability and asserts various affirmative defenses. Doc. No. 6. This case was referred to me after the parties consented to trial, disposition and judgment by a United States Magistrate Judge pursuant to 28 U.S.C. § 636(c)(3). Doc. No. 7. Trial is scheduled to begin May 4, 2015. Doc. No. 9.

III. RELEVANT FACTS

Except as otherwise noted, the following facts are not in dispute:

Background.

O'Reilly is a Missouri corporation that operates over 4,000 retail auto parts stores throughout the country. Severe was born March 25, 1952, and was employed by O'Reilly from January 1999 until November 2012. Severe previously owned a company that operated three auto parts stores in Iowa. O'Reilly purchased Severe's Webster City, Iowa, store in January 1999.

O'Reilly organizes its retail stores into Districts, Regions and Divisions. There are over four hundred Districts, which are comprised of a number of retail stores all located in a particular geographic area. Each District is overseen by a District Manager. There are over fifty Regions, which include a number of Districts. Each Region is overseen by a Region Director. Each District Manager reports to his or her respective Region Director. There are eight Divisions encompassing a number of Regions. Each Division is overseen by a Division Vice President. Each Region Director reports to his or her respective Division Vice President. The O'Reilly store in Webster City is, and has been since its acquisition, located in District 22. Since Severe began his employment with O'Reilly, District 22 has been located in Region 7. Region 7 has been a part of the Northern Division since 2006.

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Severe's Employment History.

When O'Reilly purchased Severe's Webster City store, it hired him to serve as that store's manager. In November 1999, Severe was promoted to District Manager for District 22, a position he held until his discharge in November 2012. Severe continued to live in Webster City and used the Webster City store as the District Office. During his tenure as District Manager, District 22 grew from about eight stores to thirteen, all located in north central Iowa.

Severe reported to three different Region 7 Directors during his employment: (1) Allen Alexander through late 2005, (2) Billy Harris from approximately October 2005 through the end of 2008 and (3) Chris Lewis from early 2009 through November 30, 2012. Ken Martin has been the Division Vice President for the Northern Division since 2006, with the exception of a one year period in 2009 and 2010.

Martin's Promotion Recommendations.

During the time Martin was Division Vice President, every candidate he recommended for promotion from District Manager to Region Director was, in fact, promoted. O'Reilly maintained " high potential" lists of potential candidates for various positions and Severe was on the " high potential" list for promotion to Region Director. In 2008, Martin interviewed Severe for a Region Director position. However, Martin had already decided, before the interview, that Severe would not be chosen for the position. Martin did not consider Severe for any other Region Director positions. Instead, Martin recommended five other District Managers for promotion to Region Director during the relevant period of time. One of the recommended District Managers was not on the " high potential" list. Each of the five were considerably younger than Severe, ranging from 13 to 27 years younger than Severe at the time of their respective promotions. The District Managers recommended for promotion by Martin were 29, 35, 40, 40 and 42 years old, respectively, when they were promoted, while Severe was in his mid-50's. Severe relies on these undisputed facts to allege that Martin improperly took age into account when making promotion recommendations. O'Reilly denies this allegation and cites various facts suggesting otherwise. For example, O'Reilly's records indicate that Severe was not willing to relocate and Martin testified that he believed this to be true. Severe denies that he advised O'Reilly that he was not willing to relocate.

Storm Lake Store Events.

The Storm Lake store was part of District 22, which Severe managed. In October 2012, the store's manager and assistant manager resigned within days of each other. The store manager indicated he was leaving O'Reilly in order to open an auto parts store that would be in direct competition with O'Reilly. Severe alerted Lewis of this situation on October 28, 2012. Lewis determined that O'Reilly would need to accept the store manager's resignation in full by October 31, 2012, due to his intention to open a competing business.

On October 30 and 31, 2012, Severe took sick days. Lewis sent Severe an email on October 31, 2012, concerning the staffing of the Storm Lake store. Lewis proposed a plan that included Severe assuming management duties for that store on an interim basis the following week until a new management team could be put in place. Lewis suggested that Severe may have to fill this interim role for about one month. During that time, Severe would have been actively involved with sales and the day-to-day operations of the store until new staffing arrangements were made.

Lewis called Severe later in the evening on October 31, 2012, to follow up on the

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email and discuss the plan for the Storm Lake store. After the conversation ended, Lewis documented it in a memo. According to that memo, Lewis told Severe he expected him to serve as the store manager and Severe became very upset and complained about being " micro-managed." The memo states Severe told Lewis " he had spent a lot of years in front of the customer working the counter, and that he was beyond that now," and that if Lewis expected him to run the Storm Lake store he would give Lewis his resignation.

The memo further states that Lewis asked Severe if he " was drawing a line in the sand," to which Severe responded that Lewis could call it what he chose but Lewis would have " 13 more stores to run" if he expected Severe to run the Storm Lake store. After further discussion, Lewis told Severe he was expected to run the Storm Lake store. Severe finished the conversation by telling Lewis he would call back in the morning after discussing the plan with his wife. Severe testified that he does not remember this conversation, including whether he told Lewis he would resign.

After the conversation, Lewis called his supervisor, Martin, to report what had happened. Martin instructed Lewis to contact Jon Stahl, the Region's Human Resources Manager. Martin also asked Lewis to set up a conference call between Severe, Martin and Lewis. Martin then sent an email message to his supervisor, Vice President of Sales and Operations Jeff Shaw, to report the situation. Lewis spoke with Stahl that same evening and forwarded him the email he sent to Severe earlier in the day. Stahl responded by saying " I think the best bet is to wait for him [Severe] to call you in the morning. The ball is in his court right now."

Severe's Medical Leave.

The next day, which was November 1, 2012, Severe took another sick day and let Lewis know he would be visiting his doctor later that afternoon. Lewis responded that he hoped Severe felt better and indicated that Martin wanted to set up a conference call. Severe suggested November 2, 2012, would be better for him. Severe, Lewis and Martin then had a conference call on the morning of November 2, at which time Severe informed Lewis and Martin that his physician had instructed him to take two weeks off from work. Martin told Severe that it was fine to take time off, that he wanted Severe to get better before he returned to work and that O'Reilly would make whatever accommodations were necessary at the Storm Lake store.

Severe then faxed a note from his physician to Lewis, which Lewis forwarded to Human Resources with a cover letter stating:

Here is the doctor's note requesting Steve Severe be off work for a minimum of 2 weeks. I contacted Steve, and he will be expecting the LOA Packet to be sent to him. Please let me know if you need anything from my end.

O'Reilly mailed Severe a letter on November 7, 2012, explaining his rights under the FMLA and enclosing a " Leave of Absence" application. On November 14, 2012, Severe was placed on FMLA leave with an effective date of October 31, 2012. An email was sent to District and Corporate Management on November 2, 2012, announcing Severe would be out on a leave of absence and Lewis would be acting as the interim District Manager for District 22 until Severe's return.

After the conference call on November 2, 2012, Martin directed an email message about the situation to his supervisor, Shaw, and to three top O'Reilly executives: Ted Wise, Co-President and Chief Operating Officer, Greg Henslee, Chief Executive Officer, and Phyllis Evans, Vice President of Administration. The next day, Wise responded

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with an email message to Martin stating:

Kenny, how has Steve been doing in the DM job leading up to this incident? I know Steve has always been temperamental, but thought he was pretty [dedicated] and got good results from his stores. I have known Steve for a long time and would like to call him at the appropriate time if it's ok with you. It's a shame to lose a long term manager like Steve which knows his market so well, unless we are having performance issues.

Martin responded the same day, identifying some concerns with Severe's recent performance but stating that Severe " has done a lot for the company and I want to give him every opportunity" and that " maybe this sabbatical will refresh him and he can come back and redeem himself." Wise responded by stating that the company may be better off if Severe elected to resign. Henslee responded by expressing agreement with Wise's assessment. Martin then forwarded the entire email chain to Lewis with the comment " FYI."

On November 16, 2012, Severe called Lewis and indicated his physician had recommended he take an additional two weeks off from work. Severe provided Lewis with a second note from his physician that day, which stated that Severe would be unable to return to work until the end of November. Lewis forwarded this note to the ...


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