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Perry v. Hagemeyer North America, Inc.

United States District Court, N.D. Alabama, Southern Division

March 31, 2017

DOUGLAS R. PERRY, Plaintiff,
v.
HAGEMEYER NORTH AMERICA, INC., Defendant.

          MEMORANDUM OPINION

          KARON OWEN BOWDRE CHIEF UNITED STATES DISTRICT JUDGE

         Plaintiff Douglas R. Perry claims that his employer discriminated against him on the basis of his age in violation of the federal Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq., and its Alabama counterpart, Ala. Code § 25-1-20 et seq. This matter is before the court on Defendant's Motion for Summary Judgment (doc. 25) and accompanying Memorandum of Law. (Doc. 26). Plaintiff filed a response (doc. 31), and Defendant filed a reply. (Doc. 33).

         For the reasons stated in this Memorandum Opinion, the court will GRANT Defendant's Motion for Summary Judgment.

         I. Standard of Review

         Summary judgment allows a trial court to decide cases when no genuine issues of material fact are present and the moving party is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56. When a district court reviews a motion for summary judgment, it must determine two things: (1) whether any genuine issues of material fact exist; and if not, (2) whether the moving party is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(c).

         The moving party “always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of ‘the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, ' which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (quoting Fed.R.Civ.P. 56).

         Once the moving party meets its burden of showing the district court that no genuine issues of material fact exist, the burden shifts to the non-moving party to produce sufficient favorable evidence “to demonstrate that there is indeed a material issue of fact that precludes summary judgment.” Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991). “If the evidence [on which the nonmoving party relies] is merely colorable, or is not significantly probative, summary judgment may be granted.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50 (1986) (internal citations omitted).

         When ruling on a motion for summary judgment, the court should view all evidence and inferences drawn from the underlying facts in the light most favorable to the non-moving party. See Graham v. State Farm Mut. Ins. Co., 193 F.3d 1274, 1282 (11th Cir. 1999). The evidence of the non-moving party “is to be believed, and all justifiable inferences are to be drawn in [its] favor.” Anderson, 477 U.S. at 255. “If reasonable minds could differ on the inferences arising from undisputed facts, then a court should deny summary judgment.” Allen v. Tyson Foods, Inc., 121 F.3d 642, 646 (11th Cir. 1997) (internal quotation marks and citations omitted). This standard exists because “the drawing of legitimate inferences from the facts are jury functions, not those of a judge.” Reeves v. Sanderson Plumbing Products, Inc., 530 U.S. 133, 150 (2000) (quoting Anderson, 477 U.S. at 255).

         After both parties have addressed the motion for summary judgment, the court must grant the motion only if no genuine issues of material fact exist and if the moving party is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56.

         II. Statement of Facts

         Plaintiff Douglas R. “Randy” Perry was born in 1956. Mr. Perry worked for Defendant Hagemeyer's corporate predecessor, Vallen Safety Supply, from 1983 until Hagemeyer purchased Vallen between 1999 and 2001. Mr. Perry then worked for Hagemeyer until his termination on April 1, 2013, when he was 56 years old. While working for Vallen, Mr. Perry held the position of sales office supervisor for approximately three years and then became branch operations supervisor for approximately ten years. Mr. Perry was made an outside sales/account representative after Hagemeyer purchased Vallen and held that role until his termination. Throughout his entire employment, Mr. Perry was based in Birmingham, at his employer's Pelham, Alabama branch.

         Hagemeyer is a business-to-business distributor of industrial, safety, and electrical services and products to customers in the utilities, heavy equipment manufacturing, transportation services, and metal industries. Hagemeyer provides to its customers a range of procurement and inventory management services, including automated vendor-managed inventory (VMI) systems, customized on-site storeroom management, and integrated supply specialists. As an account representative, Mr. Perry's primary responsibilities included selling and servicing VMI services; maintenance, repair and operations (MRO) products; and electrical products to industrial customers in the Birmingham territory. From 2001 until his termination, Mr. Perry's direct supervisor was Jay Hooten, the District Manager of the Memphis/Alabama District.

         A. U.S. Steel Account

         Soon after he became an account representative, Mr. Perry was assigned to Hagemeyer's U.S. Steel account. In 2005, Hagemeyer obtained an on-site service contract with U.S. Steel at its Fairfield, Alabama mill, under which Hagemeyer conducted drug testing and other safety activities for U.S. Steel contractors. Mr. Perry was the primary account representative for the Fairfield mill and so benefitted from the contract in the form of increased commissions, although other employees actually managed Hagemeyer's daily operations at the mill. Originally, Hagemeyer contracted with U.S. Steel to provide various kinds of safety equipment at its Fairfield mill; as account representative, Mr. Perry added other products and services to the contract and played a large role in building up the U.S. Steel account.

         The U.S. Steel account comprised a significant portion of Mr. Perry's sales. For example, in 2003, U.S. steel sales accounted for approximately half of Mr. Perry's annual sales of $2.5 million. In 2005, sales to U.S. Steel made up almost $2.5 million of Mr. Perry's $3.2 million in total territory sales and boosted his gross margin percentage from 26.74% in 2004 to 30.36% in 2005. These numbers remained similarly high through 2008, when U.S. Steel sales accounted for roughly 89% of Mr. Perry's total annual sales.

         In late 2008, Hagemeyer learned of the risk of losing the Fairfield mill contract. Effective June 1, 2009, Hagemeyer designated the U.S. Steel account a “house account, ” which meant that neither Mr. Perry nor any other account representative received commission credit for U.S. Steel sales from that point forward. Mr. Hooten stated in his declaration that the account was taken from Mr. Perry to encourage him to focus on generating new business and new customers. Mr. Perry contends that Mr. Hooten did not communicate this purpose to him until the next year and that, at various times, he was told this change was made to save jobs and because Mr. Perry “was the only one making any money” while Mr. Hooten and another employee were not going to receive bonuses that year. (Doc. 27-2 at 77:8). Mr. Hooten denies that he ever told Mr. Perry the change was made to save jobs or to increase bonuses.

         Hagemeyer reduced Mr. Perry's salary upon designation of the U.S. Steel account as a house account. In June 2009, Mr. Perry was 52 years old and was the second-oldest account representative Mr. Hooten supervised. By late 2009, Hagemeyer had lost the Fairfield service contract, resulting in a sharp decline in U.S. Steel sales numbers.

         B. Job Performance Prior to Loss of the U.S. Steel Account

         Mr. Perry received praise and recognition for his job performance before and after he became an account representative. In 2008, he received an award from Hagemeyer “for [his] outstanding sales performance in 2008”; he had received the same or a similar sales award prior to 2008. (Doc. 32-1 at 54). Mr. Hooten commented in Mr. Perry's 2008 performance evaluation that Mr. Perry had “a tremendous year” and that “[h]is sales number alone is impressive, but coupled with the GM% it is awesome! Randy also capitalized on an opportunity with Alabama Power . . . . Their sales were unplanned and help [sic] push Randy over the top of his budget. . . . GREAT YEAR !!” (Doc. 32-1 at 57).

         Mr. Perry became Hagemeyer's leading Alabama account executive several years prior to 2008 and held that spot until Hagemeyer made the U.S. Steel account a house account in 2009. Prior to the designation of the U.S. Steel account as a house account, Mr. Perry gave a number of his accounts to other account executives upon the request of Mr. Hooten; he did so because “[he] still had U.S. Steel.” (Doc. 27-2 at 37:15). Mr. Perry affirmed in his 2010 performance review that he “gave up over 40 accounts over the past 3 years to help jr. sales reps have some established accounts, ” and noted in his 2011 performance evaluation that “[a]ccounts were taken from me over the past several years.” (Doc. 27-1 at 16, 20). Mr. Perry was not disciplined during his 30 years of employment.

         C. Job Performance After Loss of the U.S. Steel Account

         None of Mr. Perry's other accounts were made house accounts or given to other account representatives at the time the U.S. Steel account was taken from him. Mr. Perry's account base did not decrease from 2010 through 2012. Mr. Perry's sales, as measured by his yearly gross margin, declined from 2009 through 2012. During this time, he failed to replace the U.S. Steel business and other decreasing revenue accounts with new customers. None of his quarterly gross margin numbers from 2010 through 2013 were as low as his gross margin numbers for the last two quarters of 2009.

         In his 2009 performance review, after Hagemeyer took away the U.S. Steel account, Mr. Perry was rated as “Needs Improvement” (2.00-2.99 out of 5.00) in the “Customer Focus” and “GM Dollars ($) to Plan” categories and as “Unsatisfactory” (0.00-1.99 out of 5.00) in the “Value Plus Performance” category; he was rated as “Strong Performer” in “New Account Development.” He received an overall performance rating of “Needs Improvement.” In his 2010 performance evaluation, Mr. Perry was rated as “Needs Improvement” in “GM Dollars ($) to Plan, ” “New Account Development, ”and “Value Plus Performance, ” with an overall performance rating of “Needs Improvement.” Mr. Hooten commented, “Although Randy grew his business with APCO, he fell short of his total GM$ plan by $245k. Randy has been in the Birmingham market his entire career and has got to develop new relationships to compliment [sic] his key account. Randy must grow his territory by adding new customers.” (Doc. 27-1 at 15).

         In his 2011 performance review, Mr. Perry was rated as “Needs Improvement” in “Value Plus Performance” and as “Unsatisfactory” in “GM Dollars ($) to Plan” and “New Account Development, ” with an overall “Needs Improvement” rating. Mr. Hooten commented that Mr. Perry “needs to work harder to get more customers” and that he

fell woefully short of his sales and GM dollar goals by $750K and $191K . . . . Plant Miller was down . . . but Randy didn't bring on any new business to replace it other than the VMI vending machines at Gaston. Randy single handily [sic] got us an opportunity to quote on Sabic's PPE contract.[1] I want Randy to create a list of target customers and start calling on them -- he is fully capable of bringing new business to the table.

(Doc. 27-1 at 19).

         In 2012, Mr. Perry's sales numbers fell below his GM dollars goal for the fourth consecutive year; his 2012 goal was $450, 000 and his actual total was $289, 882.19. His 2012 performance evaluation included an “Unacceptable”[2] rating in “GM Dollars ($) to Plan, ” “MRO-Value Plus Performance; C&I- Marketing Initiatives, ” and “New Account Development, ” with an overall “Unsatisfactory” ranking. Mr. Hooten commented in this review: “Another year has passed with Randy underachieving and not growing his territory to an expected level. . . . I have had numerous conversations with Randy expressing my concerns and stressing the need for him to pick up his pace, but to no avail.” (Doc. 27-1 at 23).

         After the U.S. Steel account was designated a house account, the most substantial account assigned to Mr. Perry was the Alabama Power account. Mr. Perry made up to three trips a week to the Alabama Power plant in Wilsonville, Alabama to complete a weekly inventory and restock vending machines. Mr. Perry told Mr. Hooten in January 2013 that he was spending so much time traveling to restock the Alabama Power vending machines that he had difficulty building up other business. Mr. Perry asked Mr. Hooten if a warehouse employee could restock the vending machines instead, but Mr. Hooten declined to designate a warehouse employee to complete that task. However, after Mr. Perry was let go, a warehouse employee took over restocking vending machines for Alabama Power. Mr. Hooten testified that he and other sales representatives regularly restocked inventory for customers.

         D. Performance Improvement Plan

         As a result of his failure to generate new business and improve his sales performance, on January 11, 2013, Hagemeyer placed Mr. Perry on a Performance Improvement Plan (PIP), which set out the following four requirements for Mr. Perry to complete:

1. Create a specific business plan targeting 20 customers explaining how you will penetrate the account (specific products, HTS presentation, VMI, etc.) This can be for existing customers on big pieces of their business you don't have today. Your plan should include contacts and phone numbers, very specific dates you plan to meet the customer, expected revenue, and a timeline for revenue. This should be a very aggressive plan pointed towards $500, 000 in GM$ per year. I expect this plan within 2 weeks.
2. Starting immediately, you will be required to submit a call report for the upcoming week by COB each Friday. Your report will show the day, customer, contact, purpose of call, etc. for minimum of 5 calls per day. I'll provide you a 2013 Success Planner call report for you to use.
3. Contact our key supplier reps and include them in your business plan. At a minimum, you will work with 4 different suppliers each month making joint end user calls. Also, two full days per month shall include ...

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