This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (1996).

STATE OF MINNESOTA

IN COURT OF APPEALS

C6-98-894

Lee Jordan,

Appellant,

vs.

Jostens, Inc.,

Respondent.

Filed December 29, 1998

Affirmed

Holtan, Judge[*]

Hennepin County District Court

File No. 96-9858

Karla R. Wahl, Karla R. Wahl, P.A., 4840 IDS Center, 80 South Eighth Street, Minneapolis, MN 55402 (for appellant)

R. Scott Davies, Jason M. Hedican, Briggs and Morgan, P.A., 2400 IDS Center, 80 South Eighth Street, Minneapolis, MN 55402 (for respondent)

Considered and decided by Lansing, Presiding Judge, Short, Judge, and Holtan, Judge.

U N P U B L I S H E D O P I N I O N

HOLTAN, Judge

Appellant argues the district court erred when it sua sponte dismissed his claim for breach of contract, ruling that the disclaimers contained in respondent's employee handbook precluded it from forming a unilateral employment contract. Appellant also claims that the district court erred when it ruled that he had failed to establish a prima facie case of age discrimination. We affirm.

FACTS

Appellant Lee Jordan filed suit against respondent Jostens, Inc. in Hennepin County District Court, alleging breach of contract and age discrimination. Jostens moved for summary judgment. The district court granted partial summary judgment, ruling that appellant's claim that he was denied promotional opportunities based on age discrimination was time-barred by the one-year statute of limitations contained in the Minnesota Human Rights Act. The court, however, found that genuine issues of material fact existed on Jordan's breach of contract claim and his claim that he was terminated because of age discrimination. However, on the first day of trial, the district court, sua sponte, dismissed Jordan's breach of contract claim.

Following a court trial, the district court ruled that Jordan had failed to make a prima facie showing of age discrimination. The district court denied Jordan's motions for a new trial and amended findings. This appeal follows.

D E C I S I O N

I.

On appeal from summary judgment, this court asks (1) whether there are any genuine issues of material fact and (2) whether the district court erred in its application of the law. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990). This court must view the evidence in the light most favorable to the party against whom the district court granted summary judgment. Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993). Summary judgment is appropriate only where is no genuine issue of material fact and one party is entitled to judgment as a matter of law. Minn. R. Civ. P. 56.03.

Jordan argues that the district court erred when it sua sponte dismissed his breach of contract claim. Jordan alleged that the employee handbook he received when he began working for Jostens in 1974 constituted a unilateral employment contract that Jostens breached when it failed to follow the termination procedures contained in the handbook. Jordan was unable to produce the 1974 handbook, and instead relied on a 1985 handbook. The district court found that no unilateral employment contract was formed because the 1985 employee handbook contained disclaimers that "were clear and understandable in their intent and effect," that the terms contained in the employee handbook could not form the basis of a contract, and that Jordan was an at-will employee at all relevant times. The district court also found that Jordan was offered another position the day he was terminated and his termination was not based on work-related performance problems that would implicate the procedures set forth in the employee handbook.

Where a hiring is for an indefinite term, the employment is "at-will," and the "employer can summarily dismiss an employee for any reason or no reason, and the employee is under no obligation to remain on the job." Audette v. Northeast State Bank, 436 N.W.2d 125, 126 (Minn. App. 1989) (citation omitted). Minnesota has long recognized that "at-will" employment may be modified by a company's policy manual or handbook. Id.

[A]n employee handbook may constitute terms of an employment contract if (1) the terms are definite in form; (2) the terms are communicated to the employee; (3) the offer is accepted by the employee; and (4) consideration is given.

Feges v. Perkins Restaurants, Inc., 483 N.W.2d 701, 707 (Minn. 1992) (citing Pine River State Bank v. Mettille, 333 N.W.2d 622, 626-27 (Minn. 1983)). Whether the terms contained in an employee handbook constitute an offer for a unilateral employment contract is to be "determined by the outward manifestations of the parties, not by their subjective intentions." Pine River, 333 N.W.2d at 626 (citation omitted).

An employer may include a contract disclaimer in its employee handbook that the terms contained in the handbook do not constitute a contract for employment. In Audette, this court held that the employer's personnel manual did not constitute a unilateral contract where it contained a disclaimer, stating that, "`[t]he polices described here are not conditions of employment, and the language is not intended to create a contract between [employer] and its employees.'" 436 N.W.2d at 126. The court rejected the employee's contention that wording of the disclaimer and its location in chapter 2 of the personnel manual created an ambiguity as to its scope and meaning, holding that "the language in question is `understandable in [its] intent and effect.'" Id. at 127 (quoting Harvet v. Unity Med. Ctr., Inc., 428 N.W.2d 574, 577 (Minn. App. 1988)).

In Michaelson v. Minnesota Mining & Mfg. Co., 474 N.W.2d 174, (Minn. App. 1991), af''d mem., 479 N.W.2d 58 (Minn. 1992), the introductory page of the employer's operating manual provided that "`[t]he contents contained herein shall not, under any circumstances, be considered a part of any employment agreement, with any employee.'" Id. at 180. This court held that "[a]n employer may include such a contract disclaimer as a valid expression of its intentions." Id. (citations omitted).

The language used by Jostens in its handbook is clear, unambiguous, and prominently placed at the beginning of the employee handbook and at the start of the section on employee termination. There is little to distinguish it from the language contained in the employee manuals at issue in Audette and Michaelson. The district court correctly concluded that the employee handbook did not create a unilateral contract. We note further that Jordan was not terminated for poor performance, but rather because of corporate restructuring. Thus, the termination procedures relied on by Jordan were not implicated and Jostens was not required to follow the procedures set forth in the manual.

II.

The decision to grant a new trial is within the sound discretion of the district court and will not be reversed absent a clear abuse of discretion. Halla Nursery, Inc. v. Baumann-Furrie & Co., 454 N.W.2d 905, 910 (Minn. 1990). On appeal from a denial of a motion for a new trial, this court is to view the evidence in the light most favorable to the verdict, and "the verdict must stand unless it is manifestly and palpably contrary to the evidence." ZumBerge v. Northern States Power Co., 481 N.W.2d 103, 110 (Minn. App. 1992) (citation omitted), review denied (Minn. Apr. 29, 1992).

The MHRA prohibits an employer from discharging an employee on the basis of age. Minn. Stat. § 363.03, subd. 1(2)(b) (1996). When reviewing claims arising under the MHRA, Minnesota has adopted the three-part test established in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S. Ct. 1817 (1973). Danz v. Jones, 263 N.W.2d 395, 399 (Minn. 1978). Under this test, plaintiff has the burden of proving by a preponderance of the evidence a prima facie case of discrimination; if plaintiff succeeds in proving a prima facie case, the burden shifts to the employer to present evidence of some legitimate, nondiscriminatory reason for its actions; and if the employer carries its burden, plaintiff must then be given the opportunity to prove by a preponderance of the evidence that the legitimate reasons proffered by the employer are a pretext for discrimination. Texas Dep't of Community Affairs v. Burdine, 450 U.S. 248, 252-53, 101 S. Ct. 1089, 1093 (1981) (summarizing three-part McDonnell Douglas test).

Jordan insists that the district court improperly disregarded direct evidence of age discrimination by Jostens. A plaintiff alleging age discrimination may establish a prima facie case by introducing direct evidence of discrimination. Sigurdson v. Isanti County, 386 N.W.2d 715, 720 (Minn. 1986). Direct evidence is evidence that, if believed, proves the existence of the fact in issue without the use of inference or presumption. Merritt v. Dillard Paper Co., 120 F.3d 1181, 1189 (11th Cir. 1997).

Here, Jordan offered as direct evidence of age discrimination: (1) a senior Jostens executive's comment that one of the employees who reported to him was that "old gray haired, fang toothed person"; (2) the comments of senior vice president of human resources, Jack Jones, that he wanted a "young" manager to get off to a good start with Jordan and that Jostens needed "new blood"; (3) a senior executive's request for a list of independent sales representatives who were 50 years of age or older; and (4) the one-time existence of succession planning documents used by Jostens.

Because the senior executive in the first instance was not a decisionmaker in this case, his remarks are considered stray remarks and cannot serve as direct evidence of discriminatory motives by Jostens. See Diez v. Minnesota Mining & Mfg., 564 N.W.2d 575, 579 (Minn. App. 1997) (holding stray remarks made in workplace and remarks by individuals who do not take part in decision to discharge employee cannot serve as direct evidence of discrimination), review denied (Minn. Aug. 21, 1997). Similarly, the statements by Jones are ambiguous and do not necessarily refer to age or reflect any age animus. See Hill v. St. Louis Univ., 123 F.3d 1114, 1119 (8th Cir. 1997) (holding statement by discharged employee's supervisor that "he wanted to hire someone new to bring `fresh blood' to the position" was not sufficient to give rise to inference of age discrimination); Cone v. Longmont United Hosp. Ass'n, 14 F.3d 526, 531 (10th Cir. 1994) (holding comment by chief executive officer that two women over 40 years old were fired because hospital "`need[s] some new young blood'" and statement by CEO and personnel director that "`long-term employees have a diminishing return'" were stray remarks). The evidence presented also established that the list of independent sales representatives 50 years of age or older was requested in response to an unrelated charge by Equal Employment Opportunity Commission and was never in any way used in the decision to terminate Jordan.

The decision in Lightfoot v. Union Carbide Corp., 110 F.3d 898 (2nd Cir. 1997), relied on by Jordan to argue that the succession planning documents used by Jostens is direct evidence of age discrimination is distinguishable. In that case, the employee was terminated after receiving low ratings prepared as part of an involuntary workforce reduction. Id. at 903-04. Unlike Lightfoot, the succession planning documents in the present case were not used for staffing purposes; they were not used and had no relationship with discipline or termination procedures; and there is no corroborating evidence that age was actually used in the decision to terminate him or any other Jostens employees. The mere existence of the succession planning documents, without more, is insufficient to serve as direct evidence of age discrimination.

Viewing the evidence in the light most favorable to the verdict, we conclude that the district court did not abuse its discretion when it found that Jordan failed to introduce any direct evidence of age discrimination by Jostens.

Where direct evidence is not available, a plaintiff may establish a prima facie case of age discrimination by demonstrating

(1) that plaintiff is a member of a protected group; (2) that plaintiff sought and was qualified for opportunities that the employer made available to others; (3) that plaintiff, despite [his or] her qualifications, was denied those opportunities; and (4) the opportunities remained available or were given to other persons with plaintiff's qualifications.

Dietrich v. Canadian Pac. Ltd., 536 N.W.2d 319, 323-24 (Minn. 1995) (citations omitted). When a plaintiff's termination takes place in the context of a reduction-in-force, "`some additional showing should be necessary to make a prima facie case' because the employer's reason for discharging the employee is not otherwise unexplained." Id. at 324 (quoting Holley v. Sanyo Mfg., Inc., 771 F.2d 1161, 1165 (8th Cir. 1985)).

"`The mere termination of a competent employee when an employer is making cutbacks due to economic necessity is insufficient to establish a prima facie case of age discrimination' and that the `plaintiff in such reorganization cases must come forward with additional * * * evidence that age was a factor in his termination in order to establish a prima case.'"

Id. (quoting Holley, 771 F.2d at 1166 (quoting LaGrant v. Gulf & W. Mfg. Co., 748 F.2d 1087, 1090-91 (6th Cir. 1984)) (footnote & citations omitted)).

Here, the evidence in the record establishes that Jostens was undergoing substantial organizational restructuring when Jordan was terminated; Jordan's position was being eliminated as part of this restructuring; Jordan did not have the skills Jostens required for the corporate human resources position; and corporate management provided negative feedback on Jordan's ability to provide the necessary corporate human resources support. The testimony also established that the duties of Jordan's position changed and the complexity of the position increased.

Viewing the evidence in the light most favorable to the verdict, we conclude that the record evidence supports the district court's decision that Jones failed to establish a prima facie case of age discrimination by Jostens.

Even if we were to conclude that Jordan did establish a prima case of age discrimination, Jostens has established legitimate nondiscriminatory business reasons for Jordan's termination. A reviewing court will not second-guess the legitimate business decisions of an employer. Hutson v. McDonnell Douglas Corp., 63 F.3d 771, 781 (8th Cir. 1995); see also Geraci v. Eckankar, 526 N.W.2d 391, 396 (Minn. App. 1995) (concluding no fact question existed on issue of pretext where employer's action to pay plaintiff less than others in same position was based on "legitimate business decision"), review denied (Minn. Mar. 14, 1995). The evidence presented established that the human resources department at Jostens was undergoing major restructuring and that senior level management did not believe Jordan had the necessary skills for the corporate human resources position. According to Jones, Jordan's skills were best utilized at the plant level. When Jordan declined the State College position, no positions remained within the company for him.

Viewing the evidence in the light most favorable to the verdict, we conclude that the district court did not err when it concluded that Jostens' decision to terminate Jordan was based on legitimate, nondiscriminatory business reasons. In addition, Jordan has made no showing that the reasons proffered by Jostens for his termination are pretextual.

III.

Finally, Jordan insists that by failing to produce the succession planning documents, Jostens spoliated evidence necessary to establish his claim of age discrimination. Even though these documents were never produced by Jostens, the district court received considerable testimony regarding the nature, purpose, and composition of the succession planning documents. This testimony revealed that the succession planning documents were used for organizational purposes and never used as the basis for any disciplinary or termination decisions. There is no evidence that the succession planning documents presently exit or that the documents were destroyed by Jostens in bad faith. Likewise, there was no evidence that the documents were in any way linked to Jordan's termination. We conclude that Jordan was not in any way prejudiced by the absence of the succession planning documents.

Affirmed.

[*] Retired judge of the district court, serving as judge of the Minnesota Court of Appeals pursuant to Minn. Const. art. VI, § 10.