Labor and Employment Law Trends

IN TWO HOURS, JURY RETURNS VERDICT IN A CLASS ACTION AGE DISCRIMINATION CASE THAT TOOK SEVEN YEARS

On August 2, 2002, a federal district court jury in Chicago returned a verdict for Vedder Price client R.R. Donnelley & Sons Company in Gerlib v. R.R. Donnelley, an Age Discrimination in Employment Act class action case that took seven years to get to trial. The outcome at once resoundingly vindicates Donnelley from the allegations of age discrimination and underscores a number of important points for employers facing the potential of big-case litigation in this era of public skepticism about corporate America.

The case arose from the closing of Donnelley's Chicago Manufacturing Division ("CMD") in 1993 and 1994. Printing Sears catalogs was the bulk of the work of Donnelley's CMD. When Sears announced in early 1993 that it was discontinuing its catalog operations, the CMD was no longer economically viable and Donnelley decided to close it.

Donnelley offered the CMD employees, many of whom had long service, a package of attractive separation and enhanced early retirement benefits and undertook an extensive counseling and outplacement program. Among other things, Donnelley established a Clearinghouse at the CMD where positions at other Donnelley divisions around the country were posted so CMD employees could apply for them. Of the 659 permanent employees at the CMD, only 213 applied for transfer, and 115 employees actually received transfers. The total cost of separation and enhanced retirement benefits alone was well in excess of $20 million.

Proving the axiom that no good deed goes unpunished, Donnelley soon found itself sued for age discrimination by over 340 CMD employees (many of whom never applied for transfers at all) who claimed that they were denied transfer to other Donnelley divisions because of age. Seven years of motions and discovery ensued until the case finally went to trial in July 2002.

After a two-week trial on the plaintiffs' claim of classwide age discrimination, the jury returned its verdict for Donnelley in under two hours. The jury's decision shows that even in this time of outcry about corporate wrongdoing exemplified by the likes of Enron and WorldCom, it is possible to obtain a jury that will not be swayed by the popular prejudices about the motives and honesty of corporations and their officials.

The verdict also shows that large class action cases do not have to be settled and can be tried and won. Of course, before any class or other case is taken to trial, its strengths and weaknesses must be assessed and the determination made that the case is at once legally sound and one where the employer's actions will be perceived as fair by the jury. In the Gerlib case, Donnelley was more than fair to its employees, as the jury's prompt verdict indicates. One improvidently drafted memo, which plaintiffs argued showed that Donnelley favored younger employees for transfer, was overcome by the weight of Donnelley's evidence that there was no bias against older workers (many of whom did transfer to other divisions) and by the convincing testimony of its author, who explained that his memo meant no such thing. A single piece of evidence (even one repeatedly proclaimed in this case by the plaintiffs' attorney to be a "smoking gun") does not mean an employer with an otherwise sound case must throw in the towel.

Careful preparation is indispensable. Among other things, the Vedder Price trial team of partners Richard Schnadig and Michael Cleveland (both of whom have tried and won other employment discrimination class actions) and associate Rachel Barner used mock juries to test themes and arguments prior to trial. Plaintiffs placed substantial weight on the testimony of their statistical expert, and it was necessary for Donnelley to identify and develop testimony from a topflight expert to undercut plaintiffs' expert and to present statistical and economic evidence supporting Donnelley's case. Working with trial consultants, the trial team developed profiles of acceptable jurors as well as demonstrative evidence to help communicate Donnelley's position and actions to the jury in a persuasive visual fashion.

Should you have any questions about this case or about class action litigation in general, please call any member of the Gerlib case trial team, Richard Schnadig (312/609-7810), Michael Cleveland (312/609-7860) Rachel Barner (312/609-7836) or any other Vedder Price attorney with whom you have worked.

A SECOND LOOK AT WHO'S ON FIRST AT THE NLRB: AN UPDATE

In our January 2002 issue (Vol. 22, No. 1), we explained how political affiliation traditionally determines who is appointed to serve on the five-member National Labor Relations Board, and we identified those then serving on a shorthanded Board. The Bush Labor Board: Who's on First? We noted that President Bush has the opportunity to appoint a majority of Board members with conservative judicial and labor philosophies who might revisit some of the decisions of the liberal Clinton Board.

For much of last year, the Board limped along with a bare quorum of three members needed to issue decisions: Peter J. Hurtgen, named Chairman by President Bush in May 2001, and two former union attorneys, Wilma B. Liebman and Dennis P. Walsh. Walsh departed in December, leaving the Board without a quorum. In January, President Bush named William B. Cowen, a former management attorney, and Michael J. Bartlett, a former U.S. Chamber of Commerce official (and before that an attorney with Vedder Price), to recess appointments, giving the Board its first Republican tilt since 1993.

Has this shift in political composition made a...