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Noreen v. PharMerica Corp.

United States Court of Appeals, Eighth Circuit

August 19, 2016

Loren Noreen, Plaintiff-Appellant,
PharMerica Corporation, Defendant-Appellee.

          Submitted: May 17, 2016

         Appeal from United States District Court for the District of Minnesota - Minneapolis

          AARP, Amicus on Behalf of Appellant

          Before RILEY, Chief Judge, COLLOTON and KELLY, Circuit Judges.

          COLLOTON, Circuit Judge.

         Loren Noreen sued his former employer, PharMerica Corporation, alleging that the company terminated his position and then refused to rehire him because of his age, in violation of federal and Minnesota law. The district court1 granted summary judgment for PharMerica. We agree that there is no genuine issue of material fact for trial, and we therefore affirm.


         PharMerica is a national pharmaceutical company that employs more than 4, 500 people and provides pharmacy services to nursing homes and hospitals. From 1975 through December 30, 2013, PharMerica employed Noreen as a pharmacist. During the time relevant here, Noreen worked at PharMerica's office in Fridley, Minnesota. His responsibilities included evaluating medication orders, making recommendations to physicians and staff for changes in therapy, and working with pharmacy technicians in monitoring inventory.

         In 2012, one of PharMerica's clients terminated its corporate contract with PharMerica. Due to the loss of business, PharMerica implemented a reduction in force ("RIF") at the Fridley location in September 2012.

         PharMerica has guidelines that set forth a process for selecting which employees are terminated in a RIF. The guidelines state presciently that "[t]o protect the Company, it is imperative that this process be followed consistently, " and that "[e]ach step must be documented." RIF decisions are to be "made in a non-1The Honorable Richard H. Kyle, United States District Judge for the District of Minnesota. discriminatory manner." Because of federal regulations, however, the decisions are reviewed by the company "for adverse impact on protected classes."

         The guidelines describe a multi-step approach for carrying out a RIF. First, the company identifies affected locations and the positions to be eliminated in each job category at those locations. Next, a reviewer fills out a "RIF Decision Matrix form, " a multi-tabbed spreadsheet that "rank[s] employees within the affected job categories based on their current documented Annual Performance Evaluation rating." Each employee receives a letter grade (O, E, M, NI, U) in a column on the matrix form according to his or her last performance evaluation rating. These letters translate to Outstanding, Exceeds Expectations, Meets Expectations, Needs Improvement, and Unacceptable. If an employee has not been with PharMerica long enough to receive an annual performance evaluation rating, the reviewer should assign a rating based on two checkups, a ninety-day evaluation, and input from supervisors and co-workers.

         At the third step of the guidelines, the reviewer should "[s]ub-rank ALL employees within the Performance Evaluation rating from highest to lowest." In other words, according to Noreen, the reviewer should sub-rank all employees who received an "NI" grade in one group, all employees who received an "M" rating in a second, all employees rated at "E" in a third, and so forth. The matrix form provides multiple columns, wherein a reviewer can score various work-related factors, including an employee's productivity, versatility, communication, self-management, and reliability. Those factors are averaged, and a reviewer relies on them when calculating a sub-ranking.

         Once completed, the matrix form is sent to a human resources generalist along with any appropriate documentation. The generalist then reviews the matrix form and analyzes it for adverse impact on "protected classes per Federal guidelines" before submitting the form for final review and approval.

         The guidelines provide that if the rankings are upheld after review, then "persons will be selected for RIF based on being the lowest ranking." The most natural reading of this instruction is that employees in a lower performance evaluation rating group-say "Needs Improvement"-would be terminated first, starting with the lowest ranked in the group. If more terminations are required, then the reviewer would proceed to the next highest rating group, say "Meets Expectations, " and proceed according to rankings within that group.

         Corey Rife, the regional pharmacy director, filled out the matrix form for the September 2012 RIF at the Fridley office. Rife sub-ranked all thirteen pharmacists as a single group. Eleven pharmacists had a last performance rating of "Meets Expectations." Two recently hired pharmacists did not have an annual performance evaluation rating; Rife neglected to follow the guidance to give them a letter grade based on other data, but he included them in the sub-rankings. The company ...

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