Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.

Adams v. CDM Media, USA, Inc.

Supreme Court of Hawai'i

February 24, 2015

CHRISTIE ADAMS, Petitioner/Plaintiff-Appellant,
v.
CDM MEDIA USA, INC., Respondent/Defendant-Appellee

As corrected March 11, 2015.

Page 71

[Copyrighted Material Omitted]

Page 72

CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS. CIV. NO. 11-1-0931.

Charles H. Brower, for petitioner.

Diane W. Wong, for respondent.

McKENNA AND POLLACK, JJ., AND CIRCUIT JUDGE ALM, IN PLACE OF ACOBA, J., RECUSED, WITH RECKTENWALD, C.J., CONCURRING AND DISSENTING, WITH WHOM NAKAYAMA, J., JOINS.

OPINION

Page 73

[135 Hawai'i 4] POLLACK, J.

I. Background

Page 74

Christie Adams (Adams) filed a complaint in the Circuit Court of the First Circuit (circuit court) alleging that she had been subjected to employment discrimination in violation of Hawai'i Revised Statutes (HRS) § 378-2. The discriminatory act claimed by Adams was CDM Media, USA, Inc.'s (CDM) decision not to hire Adams due to her age. CDM's motion for summary judgment was granted by the circuit court on the basis that Adams had failed to demonstrate that CDM's reasons for not hiring her were pretextual. In a summary disposition order, the Intermediate [135 Hawai'i 5] Court of Appeals (ICA) affirmed the holding of the circuit court, and Adams sought review of the ICA judgment in this court.

For the reasons set forth below, we hold that summary judgment was improperly granted as CDM did not satisfy its burden to articulate a legitimate, nondiscriminatory reason for declining to hire Adams, and therefore pretext was not required to be considered by the circuit court. Accordingly, we vacate the judgments of the ICA and the circuit court and remand the case to the circuit court for further proceedings.

A. Employment action and HCRC decision

On January 12, 2009, CDM published an online solicitation seeking applicants for its International Media Sales Executives positions. CDM described the International Media Sales Executive position as " an inside [telephone] sales person job that . . . requires 200 to 250 cold calls a day." The relevant portions of the advertisement stated as follows:

We're looking for motivated, hungry people to join our ever expanding sales team in the role of advertising sales. We offer recognized training to build upon your formal education/experience and teach you the business of advertising and summit sales in order for you to progress and build your career quickly.
We offer great base salary, health/dental insurance and very attractive bonus scheme to ensure we have a high level of achievers applying (Realistic OTE 1st year- $70K).
The heart of CDM Media is based on a commitment to innovation, so if you are looking for a business environment that's conducive to creativity and challenge, please inquire about this unique advertising sales opportunity.

Here are a few key benefits to working at CDM Media:

o Competitive starting salary aggressive commission and bonus package (Realistic first year OTE 70k)
o First-class Sales Training Program from the best in the industry
o Lucrative sales prizes for top-performers
o Generous paid time off programs ' Comprehensive training sessions
o Health/Dental benefits
o Career development opportunities
o Referral bonuses for bringing in new sales talent
o Being a contributor to REAL growth

Requirements

o Sales experience preferred

o Detail-oriented and organized

o Strong communication skills
o Willingness to take on new challenges
o MOST IMPORTANTLY, a true determination to succeed!

( Emphasis in original). On February 11, 2009, a local newspaper posted a story stating that CDM was looking to hire " energetic and driven professionals" and was planning to put them " through an eight-week comprehensive training course." Adams saw this article and online advertisements related to the position.[1]

CDM's hiring procedure at the time was as follows:

a. Brandon Bera, CDM HR Director, calls all applicants to speak for a 5 minute phone screening with very basic questions regarding what interested them about CDM Media. It is then determined who will be brought in for a first round face-to-face interview.
b. Brandon Bera, CDM HR Director, hosts the first round of interviews and reviews all candidates that came in for the interview and narrows down the list of potential candidates to meet with the CEO, Glenn Willis. This is meant to be an interview focusing on experience, personality, characteristics, professional appearance of the candidate, and to determine if they [135 Hawai'i 6]

Page 75

seem like team players. Usually, there are hundreds of applicants that are narrowed down to around 4-5 dozen that will be met in person.
c. Those select few that stick out from the first round interview are then moved on to the second round where they will meet with CDM's CEO, Glenn Willis, and often times CDM's VP of Sales, Nick Backhouse in the same day. This is meant to focus on more in-depth personality characteristics to and detailed questions about experience to make sure what was said in the first interview aligns to the second interview.
d. Those that impress all parties involved in the hiring process (CDM's CEO and President Glenn Willis, HR Director Brandon Bera and sometimes Sales Vice President/Director Nick Backhouse if reassurance is needed) are then made an offer within a couple weeks of the final interview.

On February 13, 2009, Adams sent an email to CDM Human Resources Director, Brandon Bera (Bera), applying for the position. The email included a list of awards Adams won while working for Verizon in Hawai'i, which included awards for " inside/telephone" sales and " outside" sales and at least one award exclusively for telephone sales:

President's Award for Professional Salesmanship, Premise Sales Representative, for the Calendar Year 2000 This award is presented to the top outside sales representative (of about 23 outside sales reps) in Verizon Information Services' Honolulu Division based 80% on customer growth and 20% on customer satisfaction.
Hall of Fame Award for the Calendar Year 2000 One of the most coveted and prestigious of all Verizon sales awards, this award is presented to outside and telephone sales representatives who achieve a net increase of 25% for two consecutive years. . . .
1999-2000 Silver Prize Tip [sic] Winner to Montreal and Quebec City, Canada During the one-year period of the contest, winning sales representatives must achieve a minimum of 115% to sales net goal performance and a minimum of 100% to performance selling items on superpages.com, must participate in at least one Quality Improvement Team (QIT), and must have an error percentage less than 1/2 of one percent of all advertising revenue handled. Of about 23 telephone sales reps and 23 outside sales reps, I was the only sales rep in the Hawaii Division to win this prize trip, which was based upon meeting all four goals in the Hawaii marketplace.
Top Producer, Premise Sales Reps, Kauai 2000 Telephone Directory Canvass For 195.51% performance to goal (of about 23 outside sales reps).
ZEAM Award for the Calendar Year 1999 This award is presented to sales reps who achieved or exceeded their annual sales goal with zero errors or mistakes over a one-year period of time. . . .
Top Producer, Telephone Sales Reps, Big Island 1999 Telephone Directory Canvass For 217% performance to goal (from about 23 telephone sales reps).
Eagle Award, 1999 This award is given to sales representatives who perform at 100% or higher consistently for 26 weeks in a row.

( Underlining added). On February 18, 2009, Bera had a five-minute phone call with Adams. After the call, Adams sent Bera another email, this one including Adams' professional resume and a list of her computer, clerical, and office skills, which stated Adams had " used computers on a daily basis for the past 25 years."

The resume attached to this second email stated that Adams had " [m]ore than 20 years of full-time, hands-on experience in nearly all aspects of sales and marketing, including inside and outside sales." Adams had received a B.A. from Stanford University and " complet[ed] additional college courses taken in Switzerland and at the University of Hawai'i at Manoa."

Page 76

Adams' resume indicated that from 1984 to 1986, she was the Executive Director of The Hawai'i Society/The American Institute of Architects, where she managed the affairs of the 550-member non-profit. From 1986 to 1998, Adams was the President of Christie Adams & Associates Marketing and Public [135 Hawai'i 7] Relations, where she worked directly with many clients, including owners of businesses, executives of nonprofits and governmental managers, to develop public relations programs and organize special events. From September 1998 to 2003, Adams worked for Verizon selling advertising in Verizon's print and online Yellow Pages, contacting customers in person and by phone. While working at Verizon, Adams won the sales achievement awards described in her email to Bera.

From May 2004 to September 2004, Adams was a Loan Officer with Hawaii HomeLoans where she met with prospective home loan clients " over the phone and/or in person." Lastly, from October 1, 2004, to May 15, 2007, Adams' resume lists her as a " Caregiver for Terminally-ill parent" and, from August 2007 to August 2008, as a " Home Organizer for the Lillian B. Adams Trust."

On or about February 19, 2009, Adams was interviewed in person by Bera. On the date of the interview Adams was 59 years old. As described by Adams, " [a]t the end of the interview I asked Bera what the next step would be and he seemed hesitant to pass me along for the next interview. He said Glenn Willis would decide." Glenn Willis (Willis) was the President and Chief Executive Officer (CEO) of CDM at the time. The only notes from the interview were notations made on an attachment to Adams' first email, one of which was a box drawn around " Verizon/Yellow Pages" with the words " 1/2 inside" and " 1/2 outside" written beside it.[2]

Adams was not asked to return for the second interview and received no other contact from CDM until March 1, 2009. On that date, Adams received a rejection letter from CDM. On March 30, 2009, CDM hired four persons for the position sought by Adams, who ranged in age from 24 to 38. On May 15, 2009, CDM hired three more persons for the position, ranging in age from 23 to 40. By October 19, 2009, only the two youngest of the new hires were still employed by CDM.[3]

On August 27, 2009, Adams filed a Charge of Discrimination against CDM with the Hawai'i Civil Rights Commission (HCRC). In her submission to HCRC, Adams stated, " I believe that if not for my age I would have been hired for the International Media Sales Executive position." CDM filed " Respondent's Answer to Charge of Discrimination Filed on August 27, 2009" (Answer). The Answer stated, inter alia, that sales executives in the position for which Adams applied made " 200 to 250 cold calls a day" and that one criteria CDM used to evaluate candidates was whether or not they had " [e]xperience in dealing with VP and C-level executives in Fortune 500 organizations." The Answer also included a list of all employees hired around the time Adams was interviewed and a list of " current employees." On February 9, 2011, the HCRC issued a Notice of Dismissal and Right to Sue Letter.

B. Circuit Court

On May 10, 2011, Adams filed a complaint in the circuit court. The complaint alleged that CDM had violated HRS § 378-2 by discriminating against Adams due to her age. Adams alleged CDM posted advertisements seeking applicants who were " youthful" and " recent college graduates." Adams claimed she was entitled to loss of income because she was not hired as a result of discrimination and " was not able to become employed for a long period of time despite her efforts to find employment." Adams requested an order that CDM hire her, and she also sought general damages, special damages (such as lost wages, punitive damages, and litigation costs), and attorney's fees, as well as other appropriate relief.

Page 77

On June 20, 2011, CDM filed an answer to the complaint. CDM denied that Adams was qualified for the position, denied placing any ads for " youthful" people or " recent college graduates" to join its sales team, and denied [135 Hawai'i 8] that Adams was not hired because CDM " was advertising for 'youthful' applicants and 'recent college graduates.'"

On February 21, 2012, CDM filed a motion for summary judgment (MSJ). CDM claimed it was " entitled to summary judgment on [Adams'] age discrimination claim because the record lacked substantial evidence that either: (1) Adams was qualified for the sales position, or (2) CDM Media's reasons for not hiring Adams for the sales position were a pretext for age discrimination." The only relevant document attached to the MSJ is a declaration from Willis (Willis' Declaration or Declaration). In his Declaration, Willis states that it was his decision not to hire Adams in February 2009. Willis declares it was his " belief" that Adams was not qualified for the position. Willis also states that he " did not consider any criteria stated in any advertising or posting in making my decision not to hire" Adams. (Emphasis added).

The content of Willis' Declaration is as follows:

1. I am the President and CEO of CDM Media USA, Inc.
2. CDM Media provides business to business technology marketing services. In particular, it provides global marketing assistance to information technology executives from Fortune 1000 companies by way of (1) web products, (2) interactive media campaigns, (3) workshops and (4) a variety of invitation-only custom technology marketing events. All of these products are aimed at an audience of C-Level corporate executives (for example CEOs, CIOs and CFOs) with information technology responsibility for their companies.
3. I decided not to hire Plaintiff Christie Adams in February of 2009.
4. The inside sales person job that Ms. Adams applied for involves cold calling C-Level executives of Fortune 1,000 companies responsible for information technology, can be tedious and requires a team player.
5. It was my belief that [Adams] was not qualified for the job because:
a. She had no sales experience in the prior five years;
b. As far as I understood, most of her recent (previous 10-15 years) sales experience was in publishing and/or selling phone book advertising which incorporated outside sales and face to face communication;
c. As far as I understood, she had little or no sales experience that involved selling to C-Level corporate executives of Fortune 1,000 companies; and
d. I was advised that she had said that she disliked tedious work.[4]
6. The company did not hire any younger applicants with equal or lower qualifications for the position.
7. I was not involved in creating, reviewing or approving any advertising or posting for the position for which [Adams] applied, nor was I aware of the content of such advertising or posting, and I did not consider any criteria stated in any advertising or posting in making my decision not to hire [Adams].

( Emphases added).

Page 78

Citing to Willis' Declaration, CDM argued the record lacked substantial evidence of Adams' qualification for the position. CDM made four arguments to establish that Adams was not qualified: (1) Adams had no sales experience in the five years prior to applying for the CDM position; (2) " very little of what Adams did more than five years before she applied for the inside sales job at CDM Media had anything to do with that job, because she spent much of her time before her more than five year hiatus as an outside sales person" ; (3) Adams' " prior sales experience did not involve selling to C-level executives of Fortune 1,000 companies" ; and (4) " the work at CDM Media can be tedious" and Adams had expressed a dislike of tedious work. CDM maintained that it was justified in considering recent sales experience as an important job qualification because Adams had " no relevant work experience" " that [was] sufficient ground to hold [135 Hawai'i 9] that she was not qualified for the sales position."

CDM argued further that Adams failed to establish that CDM's reasons for not hiring her were a " pretext" for discrimination. CDM contended that to establish pretext, Adams must show that CDM's explanation was " unworthy of belief," " a dishonest explanation," or " deceit used to cover one's tracks." CDM claimed that " Willis' honest belief in the reasons he had for deciding that Adams was not qualified prevents Adams from showing pretext." CDM also claimed that " [n]o one who was hired was similarly unqualified." Even if CDM misjudged Adams' qualifications, CDM contended that it had discretion in making hiring decisions and " [i]n order to overcome this discretion, Adams would have to show that she was 'clearly superior' or 'significantly' or 'markedly' better than chosen candidates." CDM argued that Adams made no such claims.

On June 27, 2012, Adams filed a memorandum in opposition to the MSJ. Adams attached a declaration to her submission, stating " I had provided Bera with sufficient information of my qualifications before and during the phone interview to set up an in-person interview, and at the in-person interview." Adams noted, " CDM did not state that job applicants needed to be currently employed in sales." Adams represented that none of the " online classified ads placed by Defendant for employees that I saw" mentioned that the position required sales experience selling to C-Level corporate executives of Fortune 1,000 companies. Likewise, Adams declared this " area of expertise" was not " mentioned to me during my telephone interview by Bera, nor during my in-person interview with Bera."

Adams also declared that, contrary to Willis' statement, her sales experience in the ten to fifteen years prior to the interview was not limited to outside, face-to-face sales of printed phone book advertising, but also included " online, selling websites and links for customers," as well as " print and online advertising full-time in an inside sales position over the phone from September of 1998 to about May of 2000, when our management promoted me into outside sales." Adams stated that she possessed twenty-five years of " computer experience" at the time of the interview.

Adams additionally set forth in her declaration that she " previously had dealt with many high-level executives dating back to my first full-time job in 1974." Adams stated, " [e]ven though I was well qualified for the position, was a top sales associate when employed by the yellow pages, had won numerous sales awards there, and had traveled all over the world, I feel that CDM did not hire me because I was not 'young' enough for CDM Media."

In Adams' memorandum in opposition, she argued first that it was " obviously not true" that she was unqualified for the job as she " was highly qualified for the job due to her experience in sales." Adams maintained that " the job did not require sales experience," and thus the argument that Adams did not have the required sales experience is " pure pretext to cover age discrimination." Adams also denied stating that she did not like tedious work.

On June 29, 2012, CDM filed a reply. CDM contended that Willis' Declaration supported the fact that CDM had " presented evidence that it did not hire younger applicants than Adams who had qualifications equal to or lower than hers." CDM maintained that Adams presented no admissible evidence " that any person CDM Media hired is younger and/or equally or less qualified than Adams."

On July 5, 2012, a hearing was held on the MSJ. The court explained that " the question in the Court's mind boiled down to the third prong of the McDonnell Douglas test." The court's view was that Adams had not raised a genuine issue of material fact with regard to pretext.

Page 79

Adams responded that she did not need to prove pretext because CDM had not satisfied its burden of showing that it had legitimate nondiscriminatory reasons not to hire Adams. CDM replied that the five-year gap in Adams' work experience was a sufficient nondiscriminatory reason not to hire Adams. Adams' counsel countered that the five-year gap was irrelevant because Adams " was a good, an excellent, a terrific, a fantastic [135 Hawai'i 10] salesperson. . . ." Counsel noted, " [y]ou know, this is not rocket science. You get on the phone. You have a very good personality. You know what the script is to talk to people about, which is provided by the company. So how does that have any relationship to a decision not to hire her?"

Adams maintained that CDM's contention that she said she did not like " tedious" work was not only false but was also " created to substantiate their pretext for not hiring her." Adams argued that although Willis stated the job required a " team player," " he didn't say anything about why [Adams was] not a team player."

In response to the court's specific inquiry into what Adams' arguments were concerning pretext, Adams argued the following: (1) the contentions that she did not have sales experience for five years or experience calling C-level executives were both pretext for discrimination because the posted job advertisements did not state that sales experience or experience in calling executives was required; (2) the " tedious work" comment was clearly a material issue of fact as anyone who heard such a comment would not hire a person for the job, and Willis based his decision on that comment; and (3) no evidence was presented that Adams was not a team player. Adams concluded that material issues of fact existed and that summary judgment was inappropriate.

The circuit court orally ruled that, under McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973), Adams had made a prima facie case of discrimination: " This Court, under the pertinent McDonnell Douglas test . . . concludes that the plaintiff did meet their initial burden of establishing the prima facie showing." Thus, the burden shifted to the employer, and " [t]he employer, based on the paper submitted to the Court, did establish legitimate nondiscriminatory reason [sic] for not hiring the plaintiff." The circuit court concluded that Adams " did not raise triable issues of material fact as to the employer's reason that the non-hiring was pretextual."

Concerning the " tedious work" comment, the circuit court ruled " there may be a material -- there may be a disputed fact there. But in this Court['s] view, that alone is not enough to meet plaintiff's burden, once we hit the third prong of the McDonnell Douglas test."

Concerning Adams' argument that the persons hired instead of Adams " had no sales experience, or sales experience that was less than that of the plaintiff," the circuit court ruled " all that's submitted in support of that assertion is her own declaration." The circuit court viewed that evidence as " not admissible." Accordingly, the circuit court granted summary judgment in favor of CDM.

The circuit court did not make separate findings of fact and conclusions of law. The July 24, 2012 Order Granting Defendant's Motion for Summary Judgment Filed February 21, 2012, affirmed the circuit court's oral ruling.

[T]he [circuit court] finds and orders as follows:

That [Adams] has met her burden of showing a prima facie case of age discrimination. That [CDM] has met its burden to articulate a legitimate nondiscriminatory reason for not hiring [Adams]. That the burden therefore shifted to [Adams] to demonstrate [CDM's] reasons were pretextual. That [Adams] failed to raise a genuine issue of material fact as to whether [CDM's] reasons were pretextual. That [CDM's MSJ] should therefore be granted and [Adams'] Complaint dismissed.

Also on July 24, 2012, the circuit court entered its final judgment in favor of CDM. On August 23, 2012, Adams filed a timely notice of appeal to the ICA.

C. Appeal to the ICA

On December 26, 2012, Adams filed her Opening Brief with the ICA contending that the trial court erred in granting summary judgment in favor of CDM. Adams requested the ICA reverse the circuit court's decision and remand for trial.

Page 80

Adams first argued that " CDM did not meet its initial burden of establishing a legitimate, nondiscriminatory justification for not hiring [Adams]." Adams contended that Willis' statements concerning CDM not hiring any younger, equally or less qualified [135 Hawai'i 11] individuals than Adams, and " Adams did not have enough sales experience for the job," " are conclusory statements not supported by evidence." Adams maintained that she had no " duty to rebut these statements until the statements themselves had been properly supported by evidence." Adams also maintained that " Willis' conclusory statements that Adams didn't measure up should have been supported by the resumes of the individuals who were hired."

On April 15, 2013, CDM filed its Answering Brief. CDM reasserted its contention that Adams was not qualified for the position. CDM argued that Adams " [i]n particular, [] failed to establish the second element for a prima facie case, i.e., that she was qualified for the position for which she applied." CDM maintained that it had articulated a legitimate, nondiscriminatory reason for not hiring Adams. Relying on Willis' Declaration, CDM maintained the legitimate reason was that:

Willis decided that [Adams] was not qualified for the job because [Adams] had no sales experience in the prior five years. Willis understood that [Adams'] recent sales experience (the previous 10-15 years) was in publishing and selling phone book advertising which involved outside sales and face to face communication. Willis understood [Adams] had little or no sales experience that involved selling to C-level executives of Fortune 1,000 companies. Willis was advised that [Adams] said that she disliked tedious work.

Furthermore, CDM argued it " was entitled to use subjective hiring criteria." CDM maintained that " contrary to [Adams'] contentions, CDM does not have the burden of proving that the persons it hired were more qualified than [Adams]." CDM argued that it could " appropriately consider factors not listed in the advertisement" in making hiring decisions.

D. ICA decision

On October 18, 2013, the ICA issued its Summary Disposition Order (SDO). The ICA held that CDM stated a legitimate nondiscriminatory reason for not hiring Adams, pursuant to McDonnell Douglas. The ICA found that " Adams did not produce persuasive, admissible evidence that CDM's reasons were pretextual and thus failed to satisfy her burden under McDonnell Douglas." Thus, the ICA affirmed the circuit court's rulings. Aside from the introductory paragraphs, the ICA's decision was as follows:

Adams was 59 years old when CDM declined her application to a sales position in their Honolulu office. CDM stated that its decision was based on Adams' lack of recent and relevant work experience in inside sales to high level corporate executives in Fortune 1,000 companies. By articulating this " legitimate, nondiscriminatory reason" for refusing to hire Adams, CDM satisfied its burden under the pertinent McDonnell Douglas test for age discrimination. Shoppe v. Gucci Am., Inc., 94 Hawai'i 368, 378, 14 P.3d 1049, 1059 (2000) (citing McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973)); (holding modified by Hazen Paper Co. v. Biggins, 507 U.S. 604, 113 S.Ct. 1701, 123 L.Ed.2d 338 (1993)); and (holding modified by Wilmot v. Forest City Auto Parts, 2000 WL 804616 (Ohio Ct. App. Jun. 22, 2000)). Adams did not produce persuasive, admissible evidence that CDM's reasons were " pretext" and thus failed to satisfy her burden under McDonnell Douglas. Shoppe, 94 Hawai'i at 378-79, 14 P.3d at 1059-60. Accordingly, the circuit court concluded that Adams " did not raise triable issues of material fact as to [CDM's reasons for not hiring her]" and granted summary judgment for CDM.
Therefore,
IT IS HEREBY ORDERED that the July 24, 2012 Final Judgment granting the July 24, 2012 " Order Granting Defendant's Motion For Summary Judgment Filed February 21, 2012" is affirmed.

Adams v. CDM Media USA, Inc., 130 Haw. 435, 312 P.3d 311, 2013 WL 5707278 (App. 2013) (SDO). The ICA issued its final judgment on November 21, 2013.

Page 81

[135 Hawai'i 12] E. Application for Writ of Certiorari

On December 23, 2013, Adams filed her Application for Writ of Certiorari (Application).[5] Adams presented two questions for decision:

A. Whether the [ICA] committed a grave error of law or fact in affirming the Circuit Court grant of summary judgment?
B. Whether the decision of the [ICA] contains inconsistencies with those of this court of a magnitude dictating the need for further appeal?

Adams maintains, inter alia, that " CDM failed to meet its initial burden of establishing a legitimate nondiscriminatory justification for not hiring Adams." Adams contends that the evidence, viewed in the light most favorable to her, " leads to the conclusion that Willis did not even make the decision not to hire Adams." Adams argues that " it was actually Bera who decided not to hire Adams as it would have been impossible for Willis to hire Adams without having interviewed her." [6] Adams requests that this court review the ICA's affirmation of the circuit court's decision.

II. Standard of Review

" We review a circuit court's award of summary judgment de novo under the same standard applied by the circuit court." Shoppe v. Gucci Am., Inc., 94 Hawai'i 368, 376, 14 P.3d 1049, 1057 (2000) (alteration omitted) (quoting Amfac, Inc. v. Waikiki Beachcomber Inv. Co., 74 Haw. 85, 104, 839 P.2d 10, 22 (1992)). " [S]ummary judgment is appropriate if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Id. " A fact is material if proof of that fact would have the effect of establishing or refuting one of the essential elements of a cause of action or defense asserted by the parties." Id. " [T]he evidence must be viewed in the light most favorable to the non-moving party." Id.

III. Discussion

A. HRS Chapter 378 and the Shoppe-McDonnell test

HRS § 378-2(1)(A) (1999) states, " It shall be an unlawful discriminatory practice: [] Because of . . . age . . . [f]or any employer to refuse to hire . . . any individual." [7]

In enacting Revised Laws of Hawai'i (RLH) § 90A-1 (1963), the precursor to HRS § 378-2, HRS Tables of Disposition, at 8 (1968), the legislature stated that the purpose of the bill was

to protect and safeguard the right and opportunity of all persons to seek, obtain, and hold employment or membership in a labor organization without discrimination or abridgement on account of race, sex, age, religion, color or ancestry. It is not the intent of this bill to tell an employer whom to hire, but to declare it to be unlawful for an employer to refuse to employ, or to discharge from employment, any individual because of race, sex, age, religion, color or ancestry, nor is it the intent of this bill to interfere with management or an employer's prerogative to select the best qualified person for any given position in [135 Hawai'i 13]

Page 82

accordance with established occupational qualifications that are applied equally to all persons.

S. Stand. Comm. Rep. No. 573, in 1963 Senate Journal, at 866 (emphases added) (hereinafter 1963 Senate Journal); see 1963 Haw. Sess. Laws Act 180, § 1 at 223. The purpose of the bill is to " afford[s] all persons equal opportunities in employment . . . , with the qualifications of the applicants being the sole test in selecting employees." 1963 Senate Journal at 866.

HRS Chapter 378 endorses an employer's authority to decline to hire employees based on legitimate job qualifications. That chapter does not " [p]rohibit an employer . . . from refusing to hire . . . any individual for reasons relating to the ability of the individual to perform the work in question." HRS § 378-3(3) (Supp. 1999) (emphasis added). Therefore, when hiring employees, an employer may consider any reason related to the ability of an individual to perform the work in question, but the employer is not permitted, subject to exceptions not relevant to this case,[8] from considering age, as well as the other categories set forth in HRS § 378-2(1).

A plaintiff can prove age discrimination " by adducing circumstantial evidence of discrimination." [9] Shoppe, 94 Hawai'i at 378, 14 P.3d at 1059. When analyzing a claim of age discrimination relying on circumstantial evidence, this court has set forth a three-step analysis, modifying the test adopted in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973). Shoppe, 94 Hawai'i at 378-79, 14 P.3d at 1059-60. " First, the plaintiff must establish a prima facie case of discrimination by demonstrating, by a preponderance of the evidence, the following four elements: (1) that plaintiff is a member of a protected class; (2) that plaintiff is qualified for the position for which plaintiff has applied . . . ; (3) that plaintiff has suffered some adverse employment action . . . ; and (4) that the position still exists." [10] Id. at 378, 14 P.3d at 1059.

Page 83

In the second step, " [o]nce the plaintiff establishes a prima facie case of discrimination, the burden of production shifts to the defendant to articulate a legitimate, nondiscriminatory reason for the adverse employment action." Id. " The employer's explanation must be in the form of admissible evidence and must clearly set forth reasons that, if believed by the trier of fact, would support a finding that unlawful discrimination was not the cause of the challenged employment action." Id. " Although the burden of production is shifted to the employer, the ultimate burden of persuading the trier of fact that the employer intentionally discriminated against the plaintiff remains at all times with the plaintiff." Id. at 378-79, 14 P.3d at 1059-60 (alteration omitted) (internal quotation marks omitted) [135 Hawai'i 14] (quoting Texas Dep't of Cmty. Affairs v. Burdine, 450 U.S. 248, 253, 101 S.Ct. 1089, 67 L.Ed.2d 207 (1981)).

In the third step, " if the employer rebuts the prima facie case, the burden reverts to the plaintiff to demonstrate that the defendant's proffered reasons were 'pretextual.'" Id. at 379, 14 P.3d at 1060. A plaintiff may establish pretext by " persuading the court that a discriminatory reason more likely motivated the employer or . . . by showing that the employer's proffered explanation is unworthy of credence." Id.

B. Prima facie case

In the present case, Adams clearly established a prima facie case of discrimination and therefore satisfied the first step of the Shoppe-McDonnell standard.

At the hearing on the motion for summary judgment, the circuit court made a specific finding that Adams established a prima facie case, thus expressly determining that Adams was qualified for the position. " This Court . . . concludes that the plaintiff did meet their [sic] initial burden of establishing the prima facie showing." The court reiterated this finding in the written order granting the MSJ: " the [circuit court] finds and orders as follows: That [Adams] has met her burden of showing a prima facie case of age discrimination."

The record amply demonstrates that Adams clearly satisfied all four elements of the first prong of the Shoppe-McDonnell test. In its Answering Brief to the ICA, CDM argued that Adams " [i]n particular, [] failed to establish the second element for a prima facie case, i.e., that she was qualified for the position for which she applied." CDM did not contest the first, third, and fourth requirements of Adams' prima facie case.

In any event, establishment of the first, third, and fourth elements are beyond dispute. First, Adams was fifty-nine years old at the time when she applied with CDM, so she is part of a protected class.[11] As to the third element, Adams suffered an adverse employment action when CDM decided not to hire her. In regard to the fourth element, the position continued to exist after she received a rejection letter on March 1, 2009, because later that year CDM hired seven persons as International Media Sales Executives.

As to the second element, it is also clear that Adams was qualified. CDM argued to the ICA that Adams was not qualified for the position because she did not have recent or relevant sales experience. However, the phone sales position did not require sales experience.

First, the advertisement CDM posted for the job stated that sales experience was " preferred," but not required. If sales experience was a " preference" and not a minimum qualification, then Adams could have had no sales experience and she still would have been qualified for the job.

Second, the hiring solicitation posted by CDM promised extensive training. " We offer recognized training to build upon your formal education/experience and teach you the business of advertising and summit sales in order for you to progress and build your career quickly." " Here are a few key benefits of working at CDM Media: . . . First-class Sales Training Program from the best in the industry." Similarly, newspaper articles regarding CDM's solicitation indicated " [a]ll sales hires will go through an eight-week comprehensive training course." The offer of extensive training underscores the fact that no sales experience was required.

Page 84

Moreover, Adams had extensive sales experience. Adams owned and operated her own marketing company for twelve years, [135 Hawai'i 15] during which time she " [w]orked directly with owners of businesses, executives of nonprofits and governmental managers." Subsequently, Adams worked for five years with Verizon. During that time, Adams worked in both " inside" and " outside" sales. Viewed in the light most favorable to Adams, this fact was specifically recognized by CDM when one of its agents made the hand-written notes " 1/2 inside" and " 1/2 outside" on Adams' first email besides the boxed-in words " Verizon/The Yellow Pages." While employed as a sales person at Verizon, Adams won at least one award specifically for her inside/telephone sales work. In addition, Adams won six other awards, all for outperforming her peers and maintaining consistently positive sales results. Adams denied stating that she disliked tedious work, and thus this evidence is not weighed against Adams on summary judgment. Because sales experience was merely " preferred" and Adams had extensive sales experience, Adams was qualified for the position and clearly satisfied the second element of the prima facie test.

Therefore, because the circuit court made an express determination that Adams established a prima facie case, and the evidence in the record, viewed in the light most favorable to Adams, demonstrates that she met the four elements of the Shoppe-McDonnell prima facie test, Adams established a prima facie case of age discrimination.

C. Legitimate, nondiscriminatory reason

Once Adams established a prima facie case of age discrimination, a burden of production shifted to CDM to " articulate a legitimate, nondiscriminatory reason" for not hiring Adams. Shoppe, 94 Hawai'i at 378, 14 P.3d at 1059.

In this case, Willis articulated four reasons in paragraph 5 of the Declaration for not hiring Adams:

5. It was my belief that the Plaintiff was not qualified for the job because:
a. She had no sales experience in the prior five years;
b. As far as I understood, most of her recent (previous 10-15 years) sales experience was in publishing and/or selling phone book advertising which incorporated outside sales and face to face communication;
c. As far as I understood, she had little or no sales experience that involved selling to C-Level corporate executives of Fortune 1,000 companies; and
d. I was advised that she had said that she disliked tedious work.

Accordingly, we consider whether Willis' Declaration articulates a legitimate, nondiscriminatory reason for the adverse employment action.

1. Defining " legitimate" in the context of HRS Chapter 378

" Legitimate" is defined as " lawful," or " genuine." Black's Law Dictionary 984 (9th ed. 2009). " [A] 'legitimate' reason must be one that is justifiable in view of the purposes of the [statute]." Hill v. Mississippi State Emp't Serv., 918 F.2d 1233, 1243-44 (5th Cir. 1990) (Rubin, J., dissenting).

In applying the second step of the analysis, " [t]he employer's explanation must be in the form of admissible evidence and must clearly set forth reasons that, if believed by the trier of fact, would support a finding that unlawful discrimination was not the cause of the challenged employment action." Shoppe, 94 Hawai'i at 378, 14 P.3d at 1059. However, if the employer's articulated reason is not legitimate (or is discriminatory) or if the articulated reason is not in the form of admissible evidence, then the burden of production has not been met.[12]

a. Legislative intent of HRS § 378-2

Legislative history is a valuable indicator of the purpose of a statute. " This court's primary duty in interpreting and applying statutes is to ascertain and give effect to the legislature's intention to the fullest degree." Nat'l Union Fire Ins. Co. v. Ferreira,

Page 85

[135 Hawai'i 16] 71 Haw. 341, 345, 790 P.2d 910, 913 (1990); HRS § 1-15(2) (2009) (" The reason and spirit of the law, and the cause which induced the legislature to enact it, may be considered to discover its true meaning." ). In interpreting statutes, " this court 'must read statutory language in the context of the entire statute and construe it in a manner consistent with its purpose.'" Schmidt v. HSC, Inc., 131 Hawai'i 497, 508, 319 P.3d 416, 426 (2014) (emphasis added) (quoting Blaisdell v. Dep't of Pub. Safety, 113 Hawai'i 315, 318, 151 P.3d 796, 799 (2007)).

The purpose of HRS Chapter 378 is to ensure that hiring criteria are " in accordance with established occupational qualifications that are applied equally to all persons." 1963 Senate Journal at 866. When the law was initially enacted as Act 180, section (1)(a) of the law read as follows:

(1) It shall be unlawful employment practice or unlawful discrimination:
(a) For an employer to refuse to hire or employ or to bar or discharge from employment, any individual because of his race, sex, age, religion, color or ancestry, provided that an employer may refuse to hire an individual for good cause relating to the ability of the individual to perform the work in question . . . .

See 1963 Haw. Sess. Laws Act 180, § 1 at 223, codified at RLH § 90A-1, recodified to HRS § § 378-2 and 378-3 (emphasis added).[13] Thus, as enacted, the law explicitly linked the authority to refuse to hire or discharge to " good cause relating to the ability of the individual to perform the work in question." As explained by the Senate committee report, specifically referring to section (1)(a) of Act 180, the policy supported by the law was to " afford all persons equal opportunities in employment . . . with the qualifications of the applicants being the sole test in selecting employees." 1963 Senate Journal at 866 (emphasis added).[14]

Section 1(a) of the bill provides in part that an employer may refuse to hire an individual for good cause relating to the ability of the person to perform the work in question[]. An employer may refuse to hire an individual for justifiable and reasonable cause. In this connection, the employer may, depending on the job, consider the training, experience, intelligence, personality and appearance of the applicant where any or all of these factors are applied equally to all applicants and are determinative in the selection of the best qualified.[15]

Id. at 867 (emphases added) (internal quotation marks omitted). Chapter 378 therefore does not prohibit an employer from refusing to hire an individual for reasons that are applied equally to all applicants and are " relat[ed] to the ability of the individual to perform the work in question." HRS § 378-3(3) (emphasis added). Thus, a " legitimate, nondiscriminatory reason" not to hire a person, in view of the purposes and statutory provisions of HRS Chapter 378, must be a reason related to the " ability of the individual to perform the work in question."

b. Subsequent recodification did not alter the intent of the legislature

Page 86

RLH § 90A-1 was recodified to HRS Chapter 378 in 1981 and reorganized with the addition of protections for women and government workers. 1981 Haw. Sess. Laws Act 94, § § 1-3 at 184-89. Reformation or reenactment of a statute does not alter the purpose or intent of a law unless that is the express intent of the legislature. Muniz v. Hoffman, 422 U.S. 454, 470, 95 S.Ct. 2178, 45 L.Ed.2d 319 (1975) (" It will not be inferred that the legislature, in revising and consolidating the laws, intended to change their [135 Hawai'i 17] policy, unless such an intention be clearly expressed." (emphasis added)).

If a revised statute is ambiguous or susceptible of two constructions, reference may be made to the prior statute for the purpose of ascertaining intent. But mere differences in words or arrangement should not generate an inference of legislative intent to change the former rule. A revision will not be construed as altering a particular statute absent a clear, unmistakable legislative intent.

Le Mars Mut. Ins. Co. of Iowa v. Bonnecroy, 304 N.W.2d 422, 424 (Iowa 1981) (emphasis added) (citations omitted); see also Pye v. State, 397 Md. 626, 919 A.2d 632, 637 (Md. 2007) (" [A] change in a statute as part of a general re-codification will ordinarily not be deemed to modify the law unless the change is such that the intention of the Legislature to modify the law is unmistakable." ).

As stated by the legislature, the purpose of the 1981 revisions was to " extend coverage of Part I (Discriminatory Practices) of the Employment Practices Act, Chapter 378, Hawaii Revised Statutes, to Employees of the State and county governments to help ensure that women are provided equal treatment in employment when disabled because of pregnancy-related conditions, and to clarify policies and procedures in the area of enforcement with respect to unlawful or discriminatory employment practices." H. Stand. Comm. Rep. No. 549, in 1981 House Journal, at 1166 (emphases added). Thus, the express intent of the 1981 legislature was to expand the safeguards offered by the employment discrimination provision of HRS Chapter 378. In contrast, the legislative history does not reveal any intention to alter the fundamental purposes of the employment discrimination law or to reduce its protections. Therefore, the 1963 legislative history continues to provide a significant and reliable averment that the purpose of HRS § 378-2 is to " afford all persons equal opportunities in employment . . . with the qualifications of the applicants being the sole test in selecting employees." 1963 Senate Journal at 866; see Muniz, 422 U.S. at 470.

As recodified, HRS § 378-3(3) preserves the intent of the legislature. In the 1981 revision, the legislature shifted language " provid[ing] that an employer may refuse to hire an individual for good cause relating to the ability of the individual to perform the work in question," 1963 Haw. Sess. Laws Act 180, § 1 at 223, to " Nothing in this part shall be deemed to . . . [p]rohibit . . . an employer . . . from refusing to hire . . . any individual for reasons relating to the ability of the individual to perform the work in question." HRS § 378-3. Thus, following the recodification, the substance of the statute is identical: in 1963 the language provided an exception to the prohibition against discriminatory hiring or discharging practices and the language continues to do so in the 1981 revision, underscoring the fact that the legislature has provided no indication that the purpose of the statute has been altered.

Nonetheless, the minority maintains that the purpose and intent of HRS § 378-2 was transformed based on the 1981 recodification. Minority at 24-25. However, the minority does not provide any legislative history to support its contention that the 1981 revision was intended to alter the purpose of HRS Chapter 378. See Minority at 22-26. Thus, the interpretation of the minority must be rejected as the legislature did not express any intent to change the policy of the statute. Muniz, 422 U.S. at 470; Le Mars Mut. Ins. Co., 304 N.W.2d at 424 (" A revision will not be construed as altering a particular statute absent a clear, unmistakable legislative intent." ).[16]

Page 87

[135 Hawai'i 18] The minority alternatively argues, " Even if the Majority is correct that the purpose of the current statute remains the same as the 1963 version, our plain reading interpretation of the current statute is consistent with that legislative purpose when viewed in light of the whole legislative history." Minority at 26 (emphasis added). The minority's argument does not provide the context by which to understand its reference to the " light of the whole legislative history" or provide legislative history that contradicts the 1963 legislature's intent as described above. Thus, if the purpose of the current statute " remains the same as the 1963 version," then the minority's " plain reading interpretation" of the current statute is pointedly inconsistent with the " whole legislative history."

Finally, the minority contends that when the 1963 legislature made the statement that the qualifications of the applicants shall be the sole test in selecting employees,[17] " the legislature was addressing concerns that the statute might create special preferences (such as hiring quotas) for minorities." Minority at 26 n.6. The minority does not present any authority in support of a legislative concern regarding " special preferences." Surely, the right of individuals protected under HRS § 378-2 to expect that their ability to perform the work in question will be the " sole test" in an employment decision, subject to the exceptions of HRS § 378-3, which is not a " special preference" but rather the embodiment of the protection that HRS Chapter 378 guarantees.

c. Principles of statutory construction reinforce the legislature's intent

When construing a statute, our foremost obligation is to ascertain and give effect to the intention of the legislature, which is to be obtained primarily from the language of the statute itself. Kauai Springs, Inc. v. Planning Comm'n of Cnty. of Kaua'i, 133 Haw. 141, 163, 324 P.3d 951, 973 (2014). We must read statutory language in the context of the entire statute and construe it in a manner consistent with its purpose. Id. Additionally, " Laws in pari materia, or upon the same subject matter, shall be construed with reference to each other." HRS § 1-16. Further, when construing a statute, courts are " bound to give effect to all parts of a statute, and no clause, sentence, or word shall be construed as superfluous, void, or insignificant if a construction can be legitimately found which will give force to and preserve all words of the statute." Fagaragan v. State, 132 Hawai'i 224, 241, 320 P.3d 889, 906 (2014) (citation and alteration omitted).

HRS § § 378-2 and 378-3 both concern lawful employment practices. Thus, in order to give effect to HRS § 378-2, the prohibitions of that section must be read together with HRS § 378-3. See HRS § 1-16. In HRS § 378-3, the legislature has provided a list of eleven specific exceptions to the employment discrimination prohibition of HRS § 378-2. For instance, as stated, the legislature permits an adverse employment decision when the reason for that decision is related to the person's ability to perform the work in question. HRS § 378-3(3). Other exceptions, inter alia, allow religious organizations to give employment preference to individuals of the same religion, HRS § 378-3(5), and exempt employers from having to make " unreasonable" structural changes or " expensive" equipment alterations to accommodate a person with a disability.[18] HRS § 378-3(7).

Page 88

Statutory lists may be interpreted under the principle of expressio unius est exclusio alterius; i.e., the express inclusion of certain items in a statutory list implies the exclusion of others and of alternatives. Fagaragan, 132 Hawai'i at 242, 320 P.3d at 907. This principle applies equally to a statutory list of exceptions; when the legislature has [135 Hawai'i 19] created certain exceptions, " it does not follow that courts have authority to create others." United States v. Johnson, 529 U.S. 53, 58, 120 S.Ct. 1114, 146 L.Ed.2d 39 (2000). The " proper inference" from a list of exceptions to a statute is that the legislature " considered the issue of exceptions and, in the end, limited the statute to the ones set forth." Id.; see also Thurston v. Bishop, 7 Haw. 421, 442 (Haw. Kingdom 1888) (" The rule of construction, expressio unius est exclusio alterius, then, ought to exclude all other exceptions." ). In Hawai'i, the principle of expressio unius est exclusio alterius is applicable " where in the natural association of ideas the contrast between a specific subject matter which is expressed and one which is not mentioned leads to an inference that the latter was not intended to be included within the statute." Int'l Sav. & Loan Ass'n, Ltd. v. Wiig, 82 Haw. 197, 201, 921 P.2d 117, 121 (1996).

Thus, in applying the rule of construction, expressio unius est exclusio alterius, this court looks to the contrast provided by the natural association of ideas expressed in the statutory list. Id. Here, there is a decided contrast between the eleven specific exceptions presented by HRS § 378-3 and potential exceptions that are not mentioned. For example, there is a clear delimitation intended by the legislature's reference in HRS § 378-3(5) to " religious or denominational institution[s] or organization[s]," such that a contrast is clearly implied that the legislature did not intend that private businesses could also give employment preference to individuals who share a common religion or denomination. Similarly, the legislature's use of " unreasonable structural changes or expensive equipment alterations" in HRS § 378-3(7) describes a standard that contemplates a clear contrast to reasonable structural changes or non-expensive alterations of equipment; thus, it may be inferred that the legislature plainly intended that an alteration involving a minimal or nominal cost may not be asserted as a basis to not hire a person with a disability.

Accordingly, the contrast between the exceptions listed in HRS § 378-3 and those not listed admits the firm conviction that the legislature " considered the issue of exceptions and, in the end, limited the statute to the ones set forth." Johnson, 529 U.S. at 58. By the same analysis, the legislature's permission to allow an employer to refuse to hire, refer or discharge an individual " for reasons related to the ability of the individual to perform the work in question," HRS § 378-3(3) (emphasis added), implies a clear contrast to reasons that have no relation to the ability to perform the job. Thus, in accordance with the principle of expressio unius est exclusio alterius, the exceptions of HRS § 378-3 do not permit an adverse employment decision to be based on reasons unrelated to the ability of the individual to perform the work in question.

The minority offers the criticism that our decision treats HRS § 378-3 " as an exclusive list," and " the legislature was merely attempting to ensure that a particular group of key rights remained protected without listing every possible basis for an adverse employment decision." Minority at 23, 27. Under the minority's reasoning, " [n]othing in either [HRS § § 378-2 or 378-3] tells the employer that it must limit its hiring decisions to reasons related to the 'ability of the individual to perform the work in question.'" Minority at 23; see also minority at 25. This analysis is flawed for several reasons.

Page 89

First, the treatment of the eleven exceptions provided in HRS § 378-3 as an exclusive list is in full accordance with the principle of expressio unius est exclusio alterius, based upon the self-evident contrast between the eleven exceptions prescribed by HRS § 378-3 and unspecified possible exceptions. Johnson, 529 U.S. at 58. Second, if nothing tells the employer that it must limit its hiring decisions to reasons related to the ability of the individual to perform the work in question, then " all" nondiscriminatory reasons are permitted. If all nondiscriminatory reasons are permitted, then there would be no purpose for an exception involving a subset of nondiscriminatory reasons " relating to the ability of the individual to perform the work in question." See [135 Hawai'i 20] HRS 378-3(3). Thus, the contention of the minority renders the exception provided in HRS § 378-3(3) as superfluous, contrary to our duty to give effect to all parts of a statute when a construction can be legitimately found that will give force to and preserve all words of the statute. See Fagaragan, 132 Hawai'i at 241, 320 P.3d at 906. Third, it is plain that by construing the exceptions in HRS § 378-3 to have unlimited expansion for " possible bas[es]" not listed by the legislature, the minority's analysis renders not just HRS § 378-3(3), but all non-discriminatory exceptions in HRS § 378-3 as superfluous. The practical effect of a boundless expansion of the bases for exceptions listed in HRS § 378-3 is to eliminate the protections afforded by HRS § 378-2.

In order to give proper effect to the intention of the legislature, HRS § 378-2 must be construed in the context of the entire statute and consistent with its purpose to afford all persons equal opportunities in employment. See 1963 Senate Journal at 866. When read to limit lawful adverse employment decisions to those based on reasons related to the ability of the individual to perform the work in question, both HRS § § 378-2 and 378-3(3) are enforced and preserved, in accordance with the mandate that laws on the same subject " shall be construed with reference to each other." See HRS § 1-16. Further, when read in the context of the exceptions provided by HRS § 378-3, the prohibitory language of HRS § 378-2 is consistent with the purpose identified in its legislative history " that the qualifications of the applicants be[] the sole test in selecting employees." 1963 Senate Journal at 866; see Kauai Springs, Inc., 133 Haw. at 163, 324 P.3d at 973.

d. Requirement of a legitimate, nondiscriminatory reason in our prior decisions

The requirement that legitimate, nondiscriminatory reasons for an adverse employment action must pertain to the individual's inability to perform the work in question is supported by our prior analysis of HRS § 378-2. In Shoppe, the employee, Shoppe, alleged age discrimination when she was terminated by her employer, Gucci. Shoppe, 94 Hawai'i at 381, 14 P.3d at 1062. The reason articulated by Gucci for firing Shoppe was that she was not performing her job in a satisfactory manner. Shoppe, 94 Hawai'i at 374-76, 381, 14 P.3d at 1055-57, 1062. Shoppe's supervisor, Perreira, testified that she had visited Shoppe's Maui store and found important inventory documents lying on the floor, which needed to be filled out and faxed to the Gucci warehouse on O'ahu in order for inventory to be shipped to Maui that day. Shoppe missed the deadline for faxing the papers and had done so numerous times, resulting in Perreira personally reprimanding Shoppe on several occasions for her tardiness. Id.

The reasons Gucci articulated for firing Shoppe were therefore related to timely report filing, an important function of Shoppe's position at Gucci. Under these circumstances, the Shoppe court found that Gucci had articulated legitimate nondiscriminatory reasons:

[T]here does not appear to be a genuine issue of fact regarding Plaintiff's failure to perform the duties of [a] store manager satisfactorily. Therefore Defendants have articulated legitimate, nondiscriminatory reasons for the adverse employment action against Plaintiff.

Shoppe, 94 Hawai'i at 381, 14 P.3d at 1062 (emphases added). In other words, because the reasons Gucci articulated for the adverse employment action were related to Shoppe's inability to adequately perform the job in question, Gucci articulated a legitimate, nondiscriminatory reason for firing Shoppe.

Page 90

Similarly, in Simmons v. Aqua Hotels & Resorts, Inc., 130 Hawai'i 325, 310 P.3d 1026 (App. 2013), an employee alleged, inter alia, age discrimination under HRS § 378-2(1)(A). Id. at 328, 310 P.3d at 1029. The reasons given by the employer for the adverse employment action was that the employee's position had been restructured as part of cost-cutting measures following bankruptcy. [19] Id. [135 Hawai'i 21] The employee was informed she could apply for the restructured position. Id. at 327-28, 310 P.3d at 1028-29. The employee declined to apply and the employer hired a different person for the new position. Id. The ICA found that the employee established a prima facie case of discrimination. Id. at 330-31, 310 P.3d at 1031-32. The ICA next found that the employer met its burden to produce legitimate, nondiscriminatory reasons for the adverse employment action because the employer's restructuring plan eliminated the employee's original position, the job description for the new position had been redefined, and the job holder was required to be readily available on-site. Id. at 331, 310 P.3d at 1029, 1032. The reasons provided were related to a person's ability to perform the work in question because they defined the requirements of the job. Therefore, the explanation given for the adverse employment action was legitimate because it was related to the ability of the employee to perform the work in question.[20]

In Dir., Dep't of Labor & Indus. Relations v. Si-Nor, Inc., No. 27497, 2009 WL 405926 (App. Feb. 18, 2009) (mem.), an employee alleged discrimination and a prima facie case of discrimination was established.[21] [WL] at *8. The Hawai'i Labor Relations Board (HLRB) found testimony regarding the employee's insubordination and involvement in altercations with others more credible than the employee's testimony. [WL] at *9. The ICA determined that " based on the testimony that the HLRB found credible, [the employer] had legitimate reasons for firing [the employee]." Id. The reasons given by the employer in Si-Nor -- the ability of the employee to work without insubordination and disruptive altercations -- were related to the employee's ability to perform the work in question and were therefore legitimate.

In contrast, this court evaluated the reason articulated by the employer in Sam Teague, Ltd. v. Hawai'i Civil Rights Commission, 89 Hawai'i 269, 971 P.2d 1104 (1999), and determined that the articulated reason was not legitimate.[22] Id. at 277-79, 971 P.2d at 1112-14. In Sam Teague, a female employee was terminated after taking a leave of absence for pregnancy, in violation of the employer's policy of not allowing leave in the first year of employment. Id. at 272-74, 971 P.2d at 1107-09. This court held that the employer's " no leave" policy violated Hawai'i law and administrative rules that required employers to provide a leave of absence for a " reasonable period of time" for " pregnancy, childbirth, or related medical conditions." Id. at 277-79, 971 P.2d at 1112-14.

Page 91

In addition to specifically holding that the policy was invalid, the court also evaluated the legitimacy of the employer's articulated reason for the termination: that the employee was terminated because she intentionally failed to disclose her pregnancy before accepting a job where leave was not permitted in the first year. Id. at 278-79, 971 P.2d at 1113-14. The court in Sam Teague found that the " no leave" policy had not been communicated to the employee, nor was she informed that the employer's requested " one-year commitment" meant " working twelve consecutive months with no extended leave." Id. at 273, 278-79, 971 P.2d at 1108, 1113-14. The court found that the employee " could have reasonably believed that a one-year commitment simply meant that she would [135 Hawai'i 22] remain employed with the business for at least a term of one year" and that the employee intended to return to work after the birth of her child. Id. at 279, 971 P.2d at 1114.

Based on those findings, the court concluded that the employer " failed to establish a legitimate nondiscriminatory explanation of the adverse employment action." Id. This conclusion is consistent with the principle that the reason articulated by an employer is not legitimate when it is not related to the ability of the individual to perform the work in question. That is, because the employee in Sam Teague was able to perform the job in conformance with the criteria as conveyed by the employer, the reason given by the employer -- that the employee could not work 12 months consecutively -- was unrelated to the ability of the employee to meet the requirements of the position as conveyed to the employee.

Thus, the review of the cases of our courts addressing the second step of the Shoppe-McDonnell framework reflect that that the nondiscriminatory reason articulated by the employer for the adverse employment action must be related to the ability of the individual to perform the work in question.

2. Reasons provided by CDM were not legitimate

Paragraph (5)(a) of the Declaration states it was Willis' belief that Adams was not qualified for the job because " [Adams] had no sales experience in the prior five years." [23] Under the Shoppe-McDonnell analysis, we are required to determine whether the fact that " [Adams] had no sales experience in the prior five years" was a legitimate, nondiscriminatory reason for CDM not to have hired Adams. Specifically, the analysis must consider whether sales experience in the prior five years was related to Adams' ability to perform as a telephone sales person at CDM.

a. CDM disavowed consideration of " sales experience"

In determining whether " sales experience in the prior five years" was related to the ability to perform the duties of the position, we note that the ultimate decision-maker in this case, Willis, specifically stated in his Declaration that he " did not consider any criteria stated in any advertising or posting in making [his] decision not to hire [Adams]." (Emphasis added). However, " sales experience preferred" was one of the listed " requirements" in the online employment solicitation published by CDM. Since " sales experience" was a " criteria stated in [] advertising," which Willis expressly disavowed as a consideration in his decision not to hire Adams, Willis' proffered reason not to hire Adams because she had no sales experience in the prior five years is plainly contradicted by his own statement that he did not consider sales experience.

As " sales experience in the past five years" was refuted as a consideration in the hiring decision by CDM's own admission, the criterion was not related to the job in question and thus was not a legitimate reason for the adverse employment action. Therefore, the Declaration's articulated criterion of " sales experience in the prior five years" did not satisfy CDM's burden to produce a legitimate, nondiscriminatory reason for its hiring decision in this case.

b. " Sales experience" was not shown to be related to the ability to perform the job in question

Page 92

Second, even assuming the proffered justification that " sales experience in the prior five years" had not been disavowed by CDM, this justification was not related to an individual's ability to perform as a telephone sales person because it is controverted by the advertised qualifications for the job. CDM's posted solicitation for the position stated " Sales experience preferred," but the solicitation did not indicate that sales experience in [135 Hawai'i 23] the last five years was required in order to be qualified for the position.

The justification in the Declaration is also contradicted by the employee-training program highlighted in CDM's posted solicitation. CDM's solicitation stated, " We offer recognized training to build upon your formal education/experience and teach you the business of advertising and summit sales . . . ." " Here are a few key benefits of working at CDM Media: . . . First-class Sales Training Program from the best in the industry." Similarly, a newspaper article regarding CDM's employment solicitation stated " [a]ll sales hires will go through an eight-week comprehensive training course."

" Sales experience in the prior five years" was not shown to be related to Adams' ability to perform the duties of a telephone sales person because CDM's hiring advertisements indicated that sales experience was not required to be qualified for the position and also promised to provide extensive sales training. Thus, the criterion of " sales experience in the prior five years" was not a required qualification for the position, not a legitimate reason for the adverse employment action, and not related to Adams' ability to perform the job in question. Therefore, CDM failed to meet its burden of production in the second step of the Shoppe-McDonnell analysis.

c. " Legitimate" is integral to the Shoppe-McDonnell analysis

The employer's burden to articulate a legitimate, nondiscriminatory reason is not a burden to prove the truth of the legitimate, nondiscriminatory reason. That is, the requirement in the second step is that the " explanation" articulated be legitimate, Shoppe, 94 Hawai'i at 378, 14 P.3d at 1059, not that the employer prove that the reason was true or correct.

Further, the evaluation of the legitimacy of the articulated reason is distinct from an evaluation of the credibility of a defendant. The evaluation of the legitimacy of a nondiscriminatory reason for an adverse employment action in the context of the Shoppe-McDonnell test is only whether the reason is related to the ability of the individual to perform the work in question; in contrast, an evaluation of credibility looks to whether the reason was believed or is worthy of credence. Thus, the evaluation of legitimacy does not transform the burden to produce a legitimate reason into a burden to prove that reason.[24]

However, the minority would go further, essentially reading " legitimate" out of the Shoppe-McDonnell test. See minority at 16-18. The minority would hold that " an employer's proffered reason must be taken as true." Id. at 18, 19 (emphasis added); see also id. at 31 (" [W]e must assume that the proffered evidence is true." ). Under the minority's analysis, no analysis of the legitimacy of the reason is permissible; a court is required to accept any nondiscriminatory reason and one completely unrelated to the qualifications of the individual to perform the job. Respectfully, the authority cited for this proposition, Mary's Honor Center v. Hicks, 509 U.S. 502, 113 S.Ct. 2742, 125 L.Ed.2d 407 (1993), and Shoppe, 94 Hawai'i at 378, does not mandate unexamined acceptance of any nondiscriminatory reason.

Page 93

Hicks states that in the second step of the McDonnell Douglas analysis, the employer must " introduce evidence which, taken as true, would permit the conclusion that there was a nondiscriminatory reason for the adverse action." Hicks, 509 U.S. at 509 (emphasis in original). Some examination by the court is implied by the directive that the evidence presented must be sufficient to " permit the conclusion." See also Texas Dep't of Cmty. Affairs v. Burdine, 450 U.S. 248, 255, 101 S.Ct. 1089, 67 L.Ed.2d 207 (1981) (holding that the " explanation provided must be legally sufficient to justify a judgment for the defendant" and noting that the " sufficiency of the defendant's evidence [135 Hawai'i 24] should be evaluated" (emphasis added)).[25] Similarly, Shoppe states, " The employer's explanation must be in the form of admissible evidence and must clearly set forth reasons that, if believed by the trier of fact, would support a finding that unlawful discrimination was not the cause of the challenged employment action." Shoppe, 94 Hawai'i at 378, 14 P.3d at 1059 (emphasis added). Thus, Shoppe, too, indicates that the nondiscriminatory reason must be evaluated for legitimacy.

The Shoppe decision undertook just such an analysis:

Under these circumstances, there does not appear to be a genuine issue of fact regarding Plaintiff's failure to perform the duties of store manager satisfactorily. Therefore, Defendants have articulated legitimate, nondiscriminatory reasons for the adverse employment action against Plaintiff.

Shoppe, 94 Hawai'i at 381, 14 P.3d at 1062 (emphasis added); see also Sam Teague, 89 Hawai'i at 279, 971 P.2d at 1114 (" Therefore, [employer] has failed to establish a legitimate nondiscriminatory explanation of the adverse employment action." ). Thus, our examination of legitimacy is consistent with this court's prior holdings.

The minority's analysis is inconsistent with these prior decisions. Our case law has not provided any decision in which a reason unrelated to the ability of the person to perform the job has been accepted as satisfying the second step of the Shoppe-McDonnell analysis. The minority's reasoning would impose new constraints on our law by unreasonably restricting the power of a court to evaluate the legitimacy of a defendant's articulated reason. Thus, the analysis of the minority is contrary to Hawai'i law that the hiring or discharge decision of an individual protected under HRS § 378-2 shall be related to the ability of the person to perform the work in question.

Page 94

The minority maintains that the McDonnell Douglas test represents a " universally accepted framework." Minority at 31. However, McDonnell Douglas has been the subject of significant academic criticism. [26] It has been objected to by prominent [135 Hawai'i 25] state jurists for its lack of clarity and effect of undermining its own purpose and provoked a line of criticism over its use in the summary judgment context. In Trott v. H.D. Goodall Hosp., 2013 ME 33, 66 A.3d 7 (Me. 2013), Justice Silver wrote separately to reaffirm his position that the Maine Supreme Court " should not apply the three-step, burden-shifting [McDonnell Douglas] analysis . . . to discrimination claims at the summary judgment stage" because " it unnecessarily complicates the courts' already difficult task." Id. at 16 (Silver, J., concurring). " This rigid and artificial . . . analysis confuses rather than clarifies the ultimate issue in employment discrimination cases: whether there is evidence of discrimination." Id. (internal quotation marks omitted); see Curlee v. Kootenai Cnty. Fire & Rescue, 148 Idaho 391, 224 P.3d 458, 463 (Idaho 2008) (concluding that while the burden-shifting analysis is applicable at trial, it should not be applied at summary judgment); Heng v. Rotech Med. Corp., 2004 ND 204, 688 N.W.2d 389, 401 (N.D. 2004) (stating that McDonnell Douglas has " little or no application at the summary judgment stage" ).

Federal jurists, too, have raised similar concerns. Judge Magnuson of the Eighth Circuit expressed in Griffith v. City of Des Moines, 387 F.3d 733 (8th Cir. 2004), that " [a]bsent from [McDonnell Douglas] was any justification or authority for this scheme" and observed that McDonnell Douglas has " confused courts across the nation." Id. at 740 (Magnuson, J., concurring specially). " [C]ourts have failed to thoroughly examine the language of the statute and congressional intent, and instead have fought to keep an arbitrary paradigm alive." Id. at 747 (emphasis added). Judge Wood of the Seventh Circuit Court of Appeals called " attention to the snarls and knots" of the McDonnell Douglas test, referring to it as an " allemande worthy of the 16th century." [27] Coleman v. Donahoe, 667 F.3d 835, 863 (7th Cir. 2012) (Wood, J., concurring). " The original McDonnell Douglas decision was designed to clarify and to simplify the plaintiff's task . . . unfortunately, both of those goals have gone by the wayside." Id. Judge Hartz of the Tenth Circuit Court of Appeals stated, " The use of the McDonnell Douglas framework [] readily lends itself to consideration of formalities instead of the essence of the issue at hand." Wells v. Colo. Dep't of Transp., 325 F.3d 1205, 1225 (10th Cir. 2003) (Hartz, J., concurring). Judge Tymkovich, also of the Tenth Circuit Court of Appeals, stated adoption of the McDonnell Douglas framework " has left the entire area of law confused" and that the McDonnell Douglas " inquiry distracts the court from what it should be focusing its attention on: determining whether the plaintiff produced sufficient evidence of discrimination." [28] The Honorable Timothy M. Tymkovich, The Problem with Pretext, 85 Denv. U. L. Rev. 503, 505, 522 (2008).

Page 95

The McDonnell Douglas framework, (or, in Hawai'i, the Shoppe-McDonnell test), is an analysis adopted by courts to apply an [135 Hawai'i 26] anti-discrimination law. The Shoppe-McDonnell test does not establish or modify HRS § 378-2, but instead it is a court-designed tool to effectuate the statute. Thus, what constitutes as a legitimate, nondiscriminatory reason under HRS § 378-2 ultimately must be discerned by an examination of the statute, its legislative history, and other principles of statutory construction. See Griffith, 387 F.3d at 747 (Magnuson, J., concurring specially). The relevance of the manner in which other courts may have interpreted the McDonnell Douglas framework is limited to the extent that the analyses of these courts were not designed to give effect to HRS § 378-2 and did not take into account the purpose and protections afforded by the Hawai'i legislature, which has specifically informed our analysis.

The minority's effective elimination of " legitimate" from the Shoppe-McDonnell analysis would place Hawai'i employees eligible for protection because of race, sex, sexual orientation, age, religion, color, ancestry, disability, marital status, or status as a victim of domestic or sexual violence at a significant disadvantage. Under the minority's analysis, the employer could posit any nondiscriminatory reason in order to rebut the plaintiff's prima facie case, contrary to Hawai'i law, the intent of the legislature, and the prior holdings of this court, all in defense of a test that, as one jurist phrased it, " readily lends itself to consideration of formalities instead of the essence of the issue at hand." [29]

d. Hypotheticals posed by the minority are insubstantial

The minority posits a series of strained hypotheticals that it argues would result from a court's examination of " legitimate; " however, each lacks substance and is readily answerable.

The minority first suggests that " whenever the number of equally qualified applicants exceeds the number of positions, those qualified applicants not hired could have a cause of action" because " the only legitimate hiring consideration is whether the person is qualified." Minority at 37. However, it is clear that the purpose of HRS Chapter 378 is not to prohibit selection among applicants; it is to set forth the acceptable criteria for selection upon qualifications related to the position offered. HRS § 378-3(3) (" Nothing in this part shall be deemed to . . . [p]rohibit or prevent an employer from refusing to hire . . . any individual for reasons relating to the ability of the individual to perform the work in question . . . ." ). Thus, an employer may select an employee from a pool of applicants to fill a limited number of positions by comparing and contrasting job-related qualifications without creating a cause of action.

The minority also suggests that under our definition of legitimate, the employer could not take an applicant's " personality" into consideration in its decisions. Minority at 38. To the contrary, an individual's personality may be a legitimate reason for an adverse employment decision when the personality trait is related to the ability to perform the work in question. On the other hand, an employee's burden to show discrimination would be insurmountable if an employer could make adverse hiring decisions based on personality traits that were unrelated to the ability to perform the job.[30]

Page 96

[135 Hawai'i 27] Similarly, the minority suggests that an employer could face liability for incorrectly assigning a high score on an employment exam to the wrong person. Minority at 38-39. However, it would seem probable that such an exam would test qualities related to the ability to perform the work in question; thus the exam results would be related to the job, even if mistakenly applied to the wrong individual.[31]

3. Undisclosed criteria may weigh against finding of legitimate

Although not necessary to its primary holding based on illegal pregnancy discrimination, this court's decision in Sam Teague focused in part on the employer's failure to inform the employee of the " no leave" policy or the meaning of the one-year commitment. 89 Hawai'i at 273, 279, 971 P.2d at 1108, 1114. The ruling in Sam Teague that failing to communicate the existence of a job criterion is a factor that weighs against an employer's use of that criterion as a legitimate nondiscriminatory reason for an adverse employment action is consistent with HRS Chapter 378's purpose of ensuring that employment decisions are made based on " factors [that] are applied equally to all applicants." 1963 Senate Journal at 866.

If an employer discloses the criteria that the employer actually uses to evaluate candidates, it is more likely that the employer is applying these criteria to all applicants. Conversely, " informal, secretive and subjective hiring or promotion decision processes tend to facilitate the consideration of impermissible criteria." Roberts v. Gadsden Mem'l Hosp., 835 F.2d 793, 798 (11th Cir. 1988).

Unpublicized or undisclosed criteria are not likely to be established occupational qualifications, nor can it be assumed that they are applied equally to all persons. See Rowe v. Gen. Motors Corp., 457 F.2d 348, 359 (5th Cir. 1972) (recognizing mechanisms for employment discrimination that involved promotion/transfer criteria " which can be covertly concealed" ); Porter v. Milliken & Michaels, Inc., No. CIV. A. 99-0199, 2001 WL 1315435 (E.D. La. June 28, 2001) (noting that " [c]ourts have found that informal, secretive and subjective hiring or promotion decision processes tend to facilitate the consideration of impermissible criteria" ). Therefore, undisclosed criteria measuring a person's ability to perform the work in question are less likely to form the basis of legitimate and nondiscriminatory reasons for adverse employment actions.

Page 97

Here, " sales experience in the prior five years" was not publicized or disclosed as a hiring criterion in any materials in the record other than in Willis' Declaration. CDM presented no evidence that the requirement of " sales experience in the prior five years" was applied or disclosed to any other applicant. [32] Thus, the criterion of " sales experience in the prior five years" may have been an informal and undisclosed hiring criterion applied only to Adams. [33] Second, Willis' Declaration expressly states that he did not use " any criteria stated in any advertising or posting in making my decision not to hire [Adams]." However, the Declaration does not indicate whether this was also true for other applicants. Therefore, it is not clear if the hiring [135 Hawai'i 28] criteria used to evaluate applicants were publicized or disclosed to any person applying for the position. CDM's rejection of its own publicized hiring criteria may also indicate that an informal, undisclosed, and individualized hiring criterion was applied to Adams. Consequently, the undisclosed hiring criterion relied upon by CDM to conclude that Adams was unqualified for the position, which may or may not have been applied to any other applicant, also weighs against a finding that the proffered reason was a legitimate, nondiscriminatory reason for the adverse employment action against Adams.

4. Additional reasons provided by CDM are inadmissible hearsay

Willis also set forth three additional reasons for not hiring Adams, which can be considered collectively. The Willis Declaration states:

5. It was my belief that the Plaintiff was not qualified for the job because:
. . .
b. As far as I understood, most of her recent (previous 10-15 years) sales experience was in publishing and/or selling phone book advertising which incorporated outside sales and face to face communication;
c. As far as I understood, she had little or no sales experience that involved selling to C-Level corporate executives of Fortune 1,000 companies; and
d. I was advised that she had said that she disliked tedious work.

(Emphases added).

Affidavits submitted by parties in support of a motion for summary judgment " shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein." HRCP Rule 56(e) (2000) (emphasis added). " It is axiomatic that a motion for summary judgment should be decided on the basis of admissible evidence." Munoz v. Yuen, 66 Haw. 603, 605, 670 P.2d 825, 826 (1983) (per curium).

Thus, " [t]he rule in Hawai'i is that an affidavit consisting of inadmissible hearsay cannot serve as a basis for awarding or denying summary judgment." Hawai'i Cmty. Fed. Credit Union v. Keka, 94 Haw. 213, 221, 11 P.3d 1, 9 (2000) (alterations omitted) (internal quotation marks omitted) (quoting GE Capital Hawai'i, Inc. v. Miguel, 92 Haw. 236, 242, 990 P.2d 134, 140 (App. 1999)); see also HRE Rule 801 (2002); HRE Rule 802 (1980); Fuller v. Pac. Med. Collections, Inc., 78 Hawai'i 213, 224, 891 P.2d 300, 311 (App. 1995) (" [HRCP Rule 56(e)] requires that facts set forth in the affidavits be admissible in evidence. . . . These requirements are mandatory." ). " A witness may not testify to a matter unless evidence is introduced sufficient to support a finding that the witness has personal knowledge of the matter." HRE Rule 602 (1992); see also Miller v. Manuel, 9 Haw.App. 56, 66, 828 P.2d 286, 292 (1991) (" Affidavits in support of a summary judgment motion are scrutinized to determine whether the facts they aver are admissible at trial and are made on the personal knowledge of the affiant." ). Personal knowledge means " the witness perceived the event about which [the witness] testifies and [] has a present recollection of that perception." HRE Rule 602 Commentary.

Therefore, an affidavit from an employer supporting a motion for summary judgment must be based on personal knowledge of the matter, i.e., admissible evidence. " The employer's explanation must be in the form of admissible evidence and must clearly set forth reasons that, if believed by the trier of fact, would support a finding that unlawful discrimination was not the cause of the challenged employment action." Shoppe, 94 Hawai'i at 378, 14 P.3d at 1059 (emphasis added).

Page 98

Correlatively, inadmissible evidence or hearsay cannot support an affidavit in a motion for summary judgment that purports to show a legitimate, nondiscriminatory reason for an adverse employment action in a discrimination-based claim applying the three-part Shoppe-McDonnell analysis. [34] [135 Hawai'i 29] Takaki v. Allied Mach. Corp., 87 Hawai'i 57, 69, 951 P.2d 507, 519 (App. 1998) (stating, in the context of discrimination claims based on race and work injury, " a motion for summary judgment may be decided only on the basis of admissible evidence" ); see also Lales v. Wholesale Motors Co., 133 Hawai'i 332, 361-62, 328 P.3d 341, 370-71 (2014) (discussing how, in the context of the third step of the Shoppe-McDonnell analysis of discrimination claims based on retaliatory discharge under HRS § 378-2(2), evidence must be admissible in order to be relied upon in a HRCP Rule 56(e) motion for summary judgment).

If a legitimate, nondiscriminatory reason could be shown by evidence not based on personal knowledge and the plaintiff was unable to demonstrate pretext in the third step of the Shoppe-McDonnell test, the consequence would be that a motion for summary judgment would be granted based on inadmissible evidence, contrary to the fundamental law of this jurisdiction. See HRCP Rule 56(e) (" Supporting and opposing affidavits [in a motion for summary judgment] . . . shall set forth such facts as would be admissible in evidence . . . ." ); Fuller, 78 Hawai'i at 224, 891 P.2d at 311 (" [T]he circuit courts should ascertain whether a foundation has been established for the admissibility of evidence offered in support of the motion before an order granting summary judgment is filed." ); Munoz, 66 Haw. at 605, 670 P.2d at 826; Keka, 94 Haw. at 221, 11 P.3d at 9; Miller, 9 Haw.App. at 66, 828 P.2d at 292. Thus, the principle that evidence supporting a motion for summary judgment must be admissible applies in a motion for summary judgment upon a discrimination-based claim as it does in any other motion for summary judgment.

In the Willis declaration, subparagraphs (b) and (c) begin with the following: " [a]s far as I understood," which indicates that the basis for the information is from an unidentified third person or external source. Likewise, subparagraph (d) states: " I was advised," again indicating that the source of the information is an unidentified third party. The reasons stated in subparagraphs (b), (c), and (d) of Willis' Declaration do not demonstrate that they are based on Willis' personal knowledge because the bases for the information are unidentified third persons or external sources. Therefore, the proffered reasons in subparagraphs (b), (c), and (d) are not admissible statements and, accordingly, do not articulate legitimate, nondiscriminatory reasons for the adverse employment action against Adams.

Further, the facts of the case belie that Willis' statements were based on " personal knowledge," as asserted by the minority. Minority at 34-35. A mere recitation that the witness " understood" or was " advised" of a fact is insufficient, in itself, to establish that the witness perceived the facts for which testimony is offered, i.e. that the testimony is based on personal knowledge. See Addison M. Bowman, Hawai'i Rules of Evidence Manual § 602-1[3] (2014-15 ed.) (finding testimony of a person on O'ahu regarding weather on the Big Island is objectionable on lack of personal knowledge grounds); State v. Apollonio, 130 Hawai'i 353, 362, 311 P.3d 676, 685 (2013) (striking testimony of a witness where nothing in evidence would support a finding that the witness had personal knowledge of the fact at issue).

Page 99

Here, it is uncontroverted that Willis never met Adams; Adams' only interview was with Bera, CDM's Human Resources Director. [35] According to CDM's established hiring procedure, Bera " host[ed] the first round of interviews and review[ed] all candidates that came in for [an] interview and narrow[ed] down the list of potential candidates to meet with [Willis]." (Emphasis added). [135 Hawai'i 30] Thus, based on established hiring procedures and the fact that Adams only met with Bera, Willis' two statements indicating " as far as I understood" and the statement " I was advised" are clearly not based on Willis' personal knowledge. Further, it would appear that Bera had significant input in the decision not to hire Adams, if he did not make the decision outright.

Additionally, Willis' Declaration states in paragraph six that CDM did not hire any younger applicants with equal or lower qualifications for the position. Although not specifically stated as a reason for Adams not being qualified for the position, paragraph six is entirely conclusory, and no admissible evidence was adduced to establish this " fact." [36] " Ultimate or conclusory facts or conclusions of law are not to be utilized in a summary judgment affidavit." Miller, 9 Haw.App. at 66, 828 P.2d at 292. Accordingly, Willis' statement that no younger, equally or less qualified applicants were hired cannot form the basis of a legitimate reason not to hire Adams.

The minority acknowledges that " [a]n employer satisfies this second step through admissible evidence of the employer's reason for its decision." Minority at 18 (emphasis added). The minority does not assert that Willis had any interaction with Adams or contest that Willis must have obtained the information contained in subparagraphs (b), (c), and (d) of his Declaration from some other source. According to the minority, these subparagraphs " were offered for the limited non-hearsay purpose of articulating a reason why he made the decision not to hire Adams." Id. at 34-35. Thus, as the minority contends that subparagraphs (b), (c), and (d) of the Willis Declaration are admissible non-hearsay, the minority is asserting that the statements in Willis' Declaration were not offered for the truth of the reasons contained within those statements but only to demonstrate that Willis had reasons for his decision.

However, the minority also insists the reasons proffered by the employer " must be taken as true," minority at 18-19, without evaluation of the substance of those reasons. See, e.g., id. at 32 (" [W]e must assume that the proffered evidence is true." ). If the reasons proffered by a defendant-employer must be taken as true, then the argument of the minority that the employer's reasons are not offered for their truth, is logically precluded.

Additionally, if the proffered reasons are not offered for their truth and only offered to demonstrate that the employer had a legitimate reason, then a plaintiff could never prove pretext in the third step of the Shoppe-McDonnell test. That is, if the proffered reason is not offered for its truth, then it could not be shown as a pretext for discrimination because it was not offered as a true reason for the defendant-employer's action.

Page 100

It is manifest that the reasons of the employer are proffered for their truth, as it is unassailable that a court would not accept as a legitimate, nondiscriminatory reason the bare statement by an employer that an individual was not hired because of an unspecified reason. Rather, an employer's statement could only provide a legitimate, nondiscriminatory reason to the court if the employer identifies and provides the basis for that reason. Here, the substantive reasons proffered were that Adams' previous sales experience was in outside sales, Adams had little to no experience selling to C-level corporate executives, and Adams had said she disliked tedious work. These statements were offered upon a central disputed issue in the summary judgment proceeding for application in the second prong of the Shoppe-McDonnell test and were intended by the employer to be duly considered by the trial court as CDM's articulation of its legitimate, nondiscriminatory reasons for not hiring Adams. [37] Consequently, in compliance [135 Hawai'i 31] with our law of summary judgment, Willis was required to have personal knowledge of the matters asserted in his statements in order to satisfy the burden of production imposed on CDM.

The minority further indicates that Willis' Declaration was admissible " even if the . . . reasoning is based on third-party information." Id. at 35 (emphasis added). However, there is no alternate standard by which evidence is admitted under the Shoppe-McDonnell test. If the statement of a party is offered to prove the truth of the matter asserted, the report from a party not present in the court -- i.e. " third-party information" -- remains inadmissible. HRE Rules 801, 802. The undisputed facts are that Willis had no interaction with Adams. As Willis could only have gained the information in his declaration from Bera, his declaration is based on third-party information; it is thus hearsay and is inadmissible.[38] HRE Rule 802.

The minority does not contend that Willis' statements would be admissible at trial. If Willis were to testify at a trial, he could only testify that he had acted based on information provided to him without describing the substance of that information. The information itself would be admissible only through another witness with personal knowledge. Thus, the contention of the minority that hearsay is admissible for the " limited non-hearsay purpose" of articulating a legitimate, nondiscriminatory reason for an adverse employment action is contrary to HRCP Rule 56(e), which governs summary judgment proceedings and unequivocally requires " facts as would be admissible in evidence." HRCP Rule 56(e) (2000) (emphasis added).

Affidavits or testimony pertaining to employment discrimination are not exceptions to the rule disallowing hearsay. HRE Rule 802. As stated, allowing summary judgment to be rendered on evidence that includes inadmissible hearsay is contrary to Hawai'i law. See Munoz, 66 Haw. at 605, 670 P.2d at 826; Takaki, 87 Hawai'i at 69, 951 P.2d at 519; Lales, 133 Hawai'i at 361-62, 328 P.3d at 370-71. The minority's analysis, therefore, would create an exception with regard to employment discrimination claims, allowing summary judgment to be based on an affidavit that was premised upon inadmissible hearsay statements. This would create a lower standard for evaluating employment discrimination claims, contrary to the purpose of the law to " protect and safeguard the right and opportunity of all persons to seek . . . employment . . . without discrimination." 1963 Senate Journal at 866.

Page 101

[135 Hawai'i 32] Weakening the evidentiary standard in this context would create an additional layer of confusion to this already complicated test and weaken the ability of individuals to avail themselves of the protection of our laws; a danger that has been previously recognized. See H.D. Goodall Hosp., 66 A.3d at 16 (Silver, J., concurring) (criticizing the use of the McDonnell Douglas test in summary judgment); City of Des Moines, 387 F.3d at 740 (Magnuson, J., concurring specially) (same); Coleman, 667 F.3d at 863 (Wood, J., concurring) (same); Colo. Dep't of Transp., 325 F.3d at 1225 (Hartz, J., concurring) (same); see also Tymkovich, The Problem with Pretext, 85 Denv. U. L. Rev. at 505, 522 (2008).

5. CDM did not articulate a legitimate, nondiscriminatory reason

In summary, the justification of " no sales experience in the prior five years" was not related to Adams' ability to perform as a telephone sales person at CDM because it was negated as a hiring criterion by Willis, and it was controverted as a required qualification for the position by statements in the solicitation. " Sales experience in the prior five years" also may have been an undisclosed hiring criterion that may have been applied only to Adams. The remaining reasons proffered by Willis' Declaration in subparagraphs (b), (c), and (d) were inadmissible statements that may not be considered by a court. Therefore, we conclude that CDM did not satisfy its burden to produce a legitimate, nondiscriminatory reason for declining to hire Adams as an International Media Sales Executive.[39]

IV. Conclusion

Based on the foregoing reasons, the ICA erred in affirming the circuit court's granting of summary judgment. The ICA's November 21, 2013 Judgment on Appeal and the circuit court's July 24, 2012 Final Judgment are vacated, and this case is remanded to the circuit court for further proceedings consistent with this opinion.

Sabrina S. McKenna, Richard W. Pollack, Steven S. Alm

CONCUR BY: Mark E. Recktenwald

DISSENT

RECKTENWALD, C.J., IN WHICH NAKAYAMA, J., JOINS

Christie Adams applied for a sales position with CDM Media USA, Inc. At the time, she was fifty-nine years old. CDM Media did not hire Adams, and she subsequently filed an age discrimination complaint under Hawai'i Revised Statutes (HRS) § 378-2. The circuit court granted summary judgment to CDM Media, and the Intermediate Court of Appeals affirmed.

I agree with the majority that summary judgment should not have been granted to CDM Media, but I respectfully disagree with the majority's reasoning. The disagreement centers on a seemingly technical question of employment discrimination law: how to apply the second step of the three-step burden-shifting framework set forth in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973), and adopted by this court in Shoppe v. Gucci Am., Inc., 94 Hawai'i 368, 378, 14 P.3d 1049, 1059 (2000). The framework was established to assist plaintiffs, who often find it difficult to present direct evidence of discrimination, by permitting them to establish a prima facie case of unlawful discrimination with minimal evidence. Further, by requiring the employer to provide specific, non-discriminatory reasons for its actions, which the plaintiff must then disprove, the issues are narrowed and the scope of the plaintiff's potential evidentiary search is greatly reduced. However, the framework was never intended to shift the burden of proof to the defendant, which is effectively what the majority's decision requires.

Page 102

Moreover, in enacting our employment discrimination law, the legislature prohibited employers from basing their decisions on discriminatory grounds, but otherwise left them with discretion to make employment decisions. The majority's approach would effectively eliminate that discretion, by ignoring [135 Hawai'i 33] the plain language of the current version of the statute.

The majority's test would accordingly unsettle what has become a well-established standard both in federal courts and in Hawai'i. The McDonnell Douglas framework has never been a means for the employer to escape liability simply by offering a nondiscriminatory reason for its actions, as the majority appears to believe, but is instead intended to " bring the litigants and the court expeditiously and fairly" to the ultimate question of whether the employer intentionally discriminated against the employee. Texas Dep't of Cmty. Affairs v. Burdine, 450 U.S. 248, 253, 101 S.Ct. 1089, 67 L.Ed.2d 207 (1981). The framework has established a careful balance between the sometimes conflicting policies of ensuring that employees have recourse to remedy discriminatory practices, and ensuring that employers have the ability to make business decisions regarding their employees. Thus, as the test has become established over the past forty years in federal courts and seventeen years in Hawai'i, employees, employers, and courts have come to know what is expected of them in employment discrimination cases. Today, however, the majority's revision of the second step of the McDonnell Douglas framework upsets the careful balance that our precedent has established and unnecessarily creates uncertainty for all parties as to what is required to prove or disprove an employment discrimination claim.

Respectfully, this case should be resolved using the third step of the McDonnell Douglas framework. Under that step, the question is whether the plaintiff has shown that the employer's proffered reason is pretextual. As I set forth below, Adams has raised a question of material fact on that issue here, and thus CDM Media's motion for summary judgment should have been denied.

I. Background

A. Background facts and circuit court proceedings

CDM Media is a Hawai'i corporation that provides global marketing assistance to information technology executives from Fortune 1,000 companies. In January 2009, CDM Media posted an online advertisement for an International Media Sales Executive position. The " requirements" section of the posting stated, " sales experience preferred[,] detail-oriented and organized[,] strong communication skills[,] willingness to take on new challenges[, and] " most importantly, a true determination to succeed."

Adams, who was fifty-nine at the time, applied for the position in February 2009. As a result, Adams had an initial 5-minute telephone interview on February 18, 2009, with Brandon Bera, CDM Media's HR director. After the conversation, Adams emailed Bera her resume, which stated that she had " [m]ore than 20 years of full-time, hands-on experience in nearly all aspects of sales and marketing, including inside and outside sales (award-winning sales rep), public relations, advertising (print, broadcast and online), online research, newswriting, copywriting, editing (award-winning editor), photojournalism (photo credits in more than 100 newspapers, magazines, newsletters and other publications), news media relations, publicity, promotions, special events productions, etc."

Under " business experience," Adams stated that from October 2004 to August 2008, she was a caregiver and home organizer for her mother; from May 2004 to September 2004, she was a loan officer; from September 1998 to November 2003, she was a sales representative for Verizon Information Services (then GTE Directories); and before then she ran her own marketing company. At Verizon, Adams sold advertising in the white and yellow pages, as well as " online advertising, including web sites [], links and other advertising products . . . to current, new and former customers working in a wide variety of industries[.]" Adams also " presented new and standard advertising products and explained the benefits and features of them to customers in face-to-face meetings or by telephone[.]" Adams's resume listed numerous performance-based sales awards she won while at Verizon. Bera scheduled an in-person interview with Adams for the following day.

Page 103

[135 Hawai'i 34] On February 19, 2009, Adams interviewed with Bera at CDM Media's offices. According to Adams, " [a]t the end of the interview, I asked Bera what the next step would be and he seemed hesitant to pass me along for the next interview. He said Glenn Willis [CEO and president of CDM Media] would decide." CDM Media decided not to hire Adams, and sent her a letter on March 1, 2009, notifying her of its decision.

On August 27, 2009, Adams filed a charge of discrimination against CDM Media with the Hawai'i Civil Rights Commission (HCRC). Upon reviewing Adams's charge and CDM Media's answer, the HCRC issued a notice of dismissal and a right to sue letter. On May 10, 2011, Adams filed a complaint against CDM Media in circuit court, alleging age discrimination in violation of HRS § 378-2.[1]

CDM Media filed a motion for summary judgment on February 21, 2012, arguing that Adams could not prove age discrimination under the McDonnell Douglas burden shifting framework.[2] Specifically, CDM Media argued that it had articulated legitimate nondiscriminatory reasons for not hiring Adams under the framework's second step, and that Adams had failed to proffer evidence that such reasons were pretext for age discrimination under the third step. To articulate CDM Media's reasons for not hiring Adams, it proffered the declaration of Willis, who stated that he made the decision not to hire Adams for the sales position. According to Willis, " The inside sales person job that Ms. Adams applied for involves cold calling C-Level executives of Fortune 1,000 companies responsible for information technology, can be tedious and requires a team player." Willis also stated:

It was my belief that the Plaintiff was not qualified for the job because:
a. [S]he had no sales experience in the prior five years;
b. As far as I understood, most of her recent (previous 10-15 years) sales experience was in publishing and/or selling phone book advertising which incorporated outside sales and face to face communication;
c. As far as I understood, she had little or no sales experience that involved selling to C-Level corporate executives of Fortune 1,000 companies; and
d. I was advised that she had said that she disliked tedious work.

Willis declared that CDM Media " did not hire any younger applicants with equal or lower qualifications for the position." He also stated that he " was not involved in creating, reviewing or approving any advertising or posting for the position for which [Adams] applied, nor was [he] aware of the content of such advertising or posting, and [he] did not consider any criteria stated in any advertising or posting in making [his] decision" to not hire Adams.

Page 104

CDM Media argued that Adams made no showing that CDM Media's decision was motivated by discrimination, or that its stated reasons were unworthy of credence and therefore likely to be pretext. CDM Media further submitted that, " even if the Court believed that CDM Media misjudged Adams's qualifications, there would be no basis for suspecting age discrimination because [135 Hawai'i 35] 'the employer has discretion to choose among equally qualified candidates.'" CDM Media offered no other evidence besides Willis's declaration, and copies of Adams's circuit court complaint and a written decision of the Intermediate Court of Appeals in an unrelated matter.

In her opposition, Adams argued that all of CDM Media's stated reasons for its hiring decision were untrue and therefore " pure pretext." Attached to Adams's opposition were her declaration and various exhibits, many of which consisted of unauthenticated screen shots of online articles and purported CDM Media advertisements on third-party websites. In her declaration, Adams stated that she could tell that CDM Media only hired " young" people based on her having looked around the office at her in-person interview, and that those people " did not have the kind of experience represented to be necessary" for the sales job based on her search of their profiles at www.LinkedIn.com. Adams also denied that she told Bera she disliked tedious work. In addition to her declaration and the unauthenticated screen shots, Adams also included CDM Media's answer to her HCRC complaint, which outlined its hiring procedure and included the ages, but not the qualifications, of the people hired instead of Adams. These individuals were twenty-four, twenty-eight, twenty-eight, and thirty-four years old, respectively, at the time of their hiring.

During a hearing on July 5, 2012, the circuit court granted CDM Media's motion for summary judgment.[3] In explaining its decision, the circuit court noted that Adams had established a prima facie case under the McDonnell Douglas framework, and that CDM Media articulated a legitimate nondiscriminatory reason for its hiring decision, but that Adams then failed to raise triable issues of material fact as to whether or not CDM Media's reasons were pretextual.

The circuit court issued an order granting CDM Media's motion for summary judgment, and entered final judgment in favor of CDM Media on July 24, 2012. Adams timely filed a notice of appeal.

B. ICA Appeal

In her opening brief, Adams argued that " CDM [Media] did not meet its initial burden of establishing a legitimate, non-discriminatory justification for not hiring Adams." Adams also argued that all of CDM Media's stated reasons were pretext for age discrimination. In particular, Adams argued that (1) Willis's claim that he made the decision not to hire Adams was inconsistent with CDM Media's stated hiring process; (2) the factors Willis used to evaluate Adams differed from the published qualifications in the advertisement; (3) the lack of interview notes suggested pretext; (4) Adams was far more qualified than the hirees thus her non-hiring must have been based on age bias; (5) Adams not having been employed for the past five years was pretext; (6) Adams's lack of inside sales experience was pretext; (7) Adams's alleged dislike of tedious work was pretext; (8) Willis's claim that he was not involved in creating the advertising was pretext; and (9) all the grounds expressed by CDM Media were extremely subjective and thereby suggested pretext.

Page 105

CDM Media's answering brief stated that CDM Media had articulated several legitimate and nondiscriminatory reasons for not hiring Adams. CDM Media noted that Adams had not presented any direct evidence of discrimination, thus, Adams had to show that CDM Media's stated reasons were pretextual. To rebut Adams's arguments as to pretext, CDM Media contended that even if it considered factors not listed in the advertisement, that fact alone did not raise the inference of discrimination sufficient to overcome summary judgment. CDM Media also stated that an employment decision based upon an honestly held belief, even if mistaken, was legitimate and non-pretextual. Thus, [135 Hawai'i 36] CDM Media argued that even if Adams never said she disliked tedious work, that would not create a dispute of material fact because it did not go to whether or not Willis believed that she disliked tedious work.

In a summary disposition order, the ICA affirmed the circuit court's order granting CDM Media's motion for summary judgment. The ICA explained that " CDM [Media] satisfied its burden of proof to rebut Adams' charge of age discrimination under the pertinent McDonnell Douglas test for age discrimination" by " articulating [the] 'legitimate, nondiscriminatory reason' for refusing to hire Adams," namely, her " lack of recent and relevant work experience in inside sales to high level corporate executives in Fortune 1,000 companies." The ICA also added that " Adams did not produce persuasive, admissible evidence that CDM [Media]'s reasons were 'pretext' and thus failed to satisfy her burden under McDonnell Douglas."

II. Standard of Review

A. Summary Judgment

" 'On appeal, the grant or denial of summary judgment is reviewed de novo.'" First Ins. Co. of Haw. v. A& B Props., 126 Hawai'i 406, 413, 271 P.3d 1165, 1172 (2012) (quoting Nuuanu Valley Ass'n v. City & Cnty. of Honolulu, 119 Haw. 90, 96, 194 P.3d 531, 537 (2008) (citation omitted)). Furthermore,

[S]ummary judgment is appropriate if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. A fact is material if proof of that fact would have the effect of establishing or refuting one of the essential elements of a cause of action or defense asserted by the parties. The evidence must be viewed in the light most favorable to the non-moving party. In other words, we must view all of the evidence and inferences drawn therefrom in the light most favorable to the party opposing the motion.

First Ins. Co. of Haw., 126 Hawai'i at 413-14, 271 P.3d at 1172-73.

III. Discussion

HRS § 378-2(1)(A) (Supp. 1999) prohibits an employer from discriminating against an individual because of his or her age. HRS § 378-2(1)(A) provides in relevant part that:

It shall be an unlawful discriminatory practice:

(1) Because of race, sex, sexual orientation, age, religion, color, ancestry, disability, marital status, or arrest and court record:
(A) For any employer to refuse to hire or employ or to bar or discharge from employment, or otherwise to discriminate against any individual in compensation or in the terms, conditions, or privileges of employment[.]

In the instant case, Adams is alleging " individual disparate treatment," i.e., " intentional discrimination against an individual who belongs to a protected class." See, e.g., Shoppe, 94 Hawai'i at 377-78, 14 P.3d at 1058-59 (footnotes omitted). A plaintiff may attempt to prove individual disparate treatment by adducing direct or circumstantial evidence of discrimination. See id. at 378, 14 P.3d at 1059. Adams offers no direct evidence of age discrimination. She therefore is attempting to prove age discrimination with circumstantial evidence. As this court stated in Shoppe, " When analyzing an individual's disparate treatment claim that relies on circumstantial evidence of employer discrimination, we have previously applied the burden-shifting analysis set forth by the United States Supreme Court in McDonnell Douglas[.]" Shoppe, 94 Hawai'i at 378, 14 P.3d at 1059.

The McDonnell Douglas framework involves three steps. First, the plaintiff must set forth a prima facie case of discrimination by demonstrating by a preponderance of the evidence:

that (1) plaintiff is a member of a protected class; (2) that plaintiff is qualified for the position for which plaintiff has applied or from which plaintiff has been discharged; (3) that plaintiff has suffered some adverse [135 Hawai'i 37]

Page 106

employment action, such as a discharge; and (4) that the position still exists.[4]

Shoppe, 94 Hawai'i at 378, 14 P.3d at 1059 (citing McDonnell Douglas, 411 U.S. at 802; Burdine, 450 U.S. at 253 n.6).

" Once the plaintiff establishes a prima facie case of discrimination, the burden of production shifts to the defendant to articulate a legitimate, nondiscriminatory reason for the adverse employment action." Shoppe, 94 Hawai'i at 378, 14 P.3d at 1059 (emphases added) (citing McDonnell Douglas, 411 U.S. at 802-03). " Finally, if the employer rebuts the prima facie case, the burden reverts to the plaintiff to demonstrate that the defendant's proffered reasons were 'pretextual.'" Shoppe, 94 Hawai'i at 379, 14 P.3d at 1060. " If the plaintiff establishes that defendant's proffered reasons were pretextual, the trier of fact may, but is not required to, find for the plaintiff." Id.

Although the burden of production shifts under the McDonnell Douglas framework, " [a]t all times, the burden of persuasion remains on the plaintiff." Shoppe, 94 Hawai'i at 379, 14 P.3d at 1060 (citing Sam Teague, Ltd. v. Hawai'i Civil Rights Comm'n, 89 Hawai'i 269, 279 n.10, 971 P.2d 1104, 1114 n.10 (1999)).

The circuit court granted summary judgment in favor of CDM Media after concluding that (1) Adams set forth a prima facie case; (2) CDM Media rebutted the prima facie case by satisfying its burden of production of articulating a legitimate nondiscriminatory reason for its hiring decision; and (3) Adams failed to show that the employer's reason was pretext for discrimination. Because the briefs submitted to this court do not challenge the circuit court's determination that Adams made out a prima facie case under the first step of this analysis,[5] focus on the second and third steps under the McDonnell Douglas framework.

A. The employer met its burden of production to articulate a legitimate nondiscriminatory reason for its hiring decision

Adams contends the circuit court erred in granting summary judgment on her claim for age discrimination because " CDM [Media] failed to meet its initial burden of establishing a legitimate non-discriminatory justification for not hiring Adams."

Page 107

Under the second step of the McDonnell Douglas framework adopted by this court, " [o]nce the plaintiff establishes a prima facie case of discrimination, the burden of production shifts to the defendant to articulate a legitimate, nondiscriminatory reason for the adverse employment action." Shoppe, 94 Hawai'i at 378, 14 P.3d at 1059 (emphases added) (citing McDonnell Douglas, 411 U.S. at 802-03). As Shoppe makes clear, this is a burden of production and not a burden of proof. See, e.g., Krenik v. Cnty. of Le Sueur, 47 F.3d 953, 958 (8th Cir. 1995). Moreover, " [t]he defendant's burden at this stage is relatively light: it is satisfied if the defendant articulates any legitimate reason [135 Hawai'i 38] for the discharge; the defendant need not prove that the articulated reason actually motivated the discharge." Woodson v. Scott Paper Co., 109 F.3d 913, 920 n.2 (3d Cir. 1997) (emphasis added).

In Burdine, the United States Supreme Court clarified that the employer's burden is essentially one of producing an explanation for its hiring decision. According to Burdine, which Shoppe cited when adopting the McDonnell Douglas framework, see Shoppe, 94 Hawai'i at 378, 14 P.3d at 1059,

The burden that shifts to the defendant, therefore, is to rebut the presumption of discrimination by producing evidence that the plaintiff was rejected, or someone else was preferred, for a legitimate, nondiscriminatory reason. The defendant need not persuade the court that it was actually motivated by the proffered reasons. It is sufficient if the defendant's evidence raises a genuine issue of fact as to whether it discriminated against the plaintiff. To accomplish this, the defendant must clearly set forth, through the introduction of admissible evidence, the reasons for the plaintiff's rejection.

450 U.S. at 254-55 (emphasis added).

The Burdine Court further explained that " [a]n articulation not admitted into evidence will not suffice. Thus, the defendant cannot meet its burden merely through an answer to the complaint or by argument of counsel." Id. at 255 n.9. Stated otherwise, an employer satisfies this second step through admissible evidence of the employer's reasons for its decision, such as a declaration or affidavit of the decision maker stating why he or she made the employment decision at issue.

In St. Mary's Honor Center v. Hicks, 509 U.S. 502, 506-07, 113 S.Ct. 2742, 125 L.Ed.2d 407 (1993), the United States Supreme Court further clarified that, under this second step, " the McDonnell Douglas presumption places upon the defendant the burden of producing an explanation to rebut the prima facie case -- i.e., the burden of 'producing evidence' that the adverse employment actions were taken 'for a legitimate, nondiscriminatory reason.'" (Quoting Burdine, 450 U.S. at 254). Under this second step, the employer's reason must be taken as true because the burden on the employer is one of production, not proof. Hicks, 509 U.S. at 509. Indeed, " the determination that a defendant has met its burden of production (and has thus rebutted any legal presumption of intentional discrimination) can involve no credibility assessment. For the burden-of-production necessarily precedes the credibility-assessment stage." Id. (emphasis in original).

Our case law is consistent with this burden of producing admissible evidence that articulates a legitimate nondiscriminatory reason for a hiring decision. In Shoppe, this court stated that, " The employer's explanation must be in the form of admissible evidence and must clearly set forth reasons that, if believed by the trier of fact, would support a finding that unlawful discrimination was not the cause of the challenged employment action." 94 Hawai'i at 378, 14 P.3d at 1059 (citing Burdine, 450 U.S. at 254-55) (emphases added). In other words, Shoppe makes plain that the employer's burden under the second step of the McDonnell Douglas analysis is to produce its explanation for the hiring decision, not to prove or establish that the decision was based on true or correct information. Like Hicks, Shoppe states that an employer's proferred reason must be taken as true because the burden at this stage is one of production, not proof. See Shoppe, 94 Hawai'i at 378, 14 P.3d at 1059.

Page 108

Given the above, it is clear that Adams misconstrues the employer's burden under the second step as the " burden of establishing a legitimate non-discriminatory justification for not hiring Adams." (Emphasis added). Even at the hearing on CDM Media's summary judgment motion, Adams argued that, " We have to present a prima facie case. . . . We have presented evidence to show that. . . . So then the burden shifts to [CDM Media] to prove that they had a legitimate reason." (Emphasis added). Adams incorrectly contends that CDM Media had the burden to prove that its reasons for not hiring her were legitimate and nondiscriminatory. CDM Media's burden was merely to [135 Hawai'i 39] articulate legitimate nondiscriminatory reasons for its hiring decision, not to prove the legitimacy of those reasons. Adams's formulation not only blends the second and third steps of the McDonnell Douglas framework, but more to the point, it disregards the fundamental tenet of the framework, that " [a]t all times, the burden of persuasion remains on the plaintiff." Shoppe 94 Hawai'i at 379, 14 P.3d at 1060 (citing Sam Teague, 89 Hawai'i at 279 n.10, 971 P.2d at 1114 n.10).

Applying these well-established principles to the instant case, CDM Media satisfied its burden of articulating a legitimate nondiscriminatory reason for its hiring decision. CDM Media introduced the declaration of the purported decision maker, Willis, who stated that he chose not to hire Adams because he " was advised that she had said that she disliked tedious work." Willis also stated that other reasons motivated his decision not to hire Adams, i.e., that " she had no sales experience in the prior five years," he understood she had little or no experience selling to C-Level corporate executives of Fortune 1,000 companies, and that he believed most of her sales experience in the previous 10-15 years was outside sales related to publishing or selling phone book advertising space. Consistent with Shoppe's second step analysis, the Willis declaration was admissible as evidence of CDM Media's reasoning for not hiring Adams. 94 Hawai'i at 378, 14 P.3d at 1059 (" The employer's explanation must be in the form of admissible evidence and must clearly set forth reasons that, if believed by the trier of fact, would support a finding that unlawful discrimination was not the cause of the challenged employment action." ); see also Hicks, 509 U.S. at 516. Under the second step of the McDonnell Douglas framework, CDM Media met its burden to produce evidence articulating a legitimate, non-discriminatory explanation for not hiring Adams.

Respectfully, in concluding that CDM Media failed to articulate a legitimate, nondiscriminatory reason for its hiring decision, the majority misapplies the relevant version of chapter 378 and misconstrues the second step under McDonnell Douglas.

First, the majority wholly disregards the plain language of the current statute in contending that a legitimate, non-discriminatory reason " must be a reason related to the 'ability of the individual to perform the work in question.'" Majority at 34-35. Simply put, this is not what the statute says. Under the plain language of HRS § 378-2:

(a) It shall be an unlawful discriminatory practice:
(1) Because of race, sex including gender identity or expression, sexual orientation, age, religion, color, ancestry, disability, marital status, arrest and court record, or domestic or sexual violence victim status if the domestic or sexual violence victim provides notice to the victim's employer of such status or the employer has actual knowledge of such status:
(A) For any employer to refuse to hire or employ or to bar or discharge from employment, or otherwise to discriminate against any individual in compensation or in the terms, conditions, or privileges of employment[.]

HRS § 378-2.

The plain language of HRS § 378-2 unmistakably prohibits discriminatory hiring decisions based on " race, sex including gender identity or expression, sexual orientation, age, religion, color, ancestry, disability, marital status, arrest and court record, or domestic or sexual violence victim status[.]" HRS § 378-2. Nowhere in HRS § 378-2 does it say that the hiring decision has to relate directly to the applicant's qualifications.

Whereas HRS § 378-2 tells the employer what it cannot do, HRS § 378-3 (1993), on the other hand, tells the employer what it can do. Section 378-3 is the " Exceptions" provision to Hawaii's anti-discrimination statute, and states in relevant part that:

Nothing in this part shall be deemed to:

(1) Repeal or affect any law, ordinance, or government rule having the force and effect of law;
(2) Prohibit or prevent the establishment and maintenance of bona fide occupational [135 Hawai'i 40]

Page 109

qualifications reasonably necessary to the normal operation of a particular business or enterprise, and that have a substantial relationship to the functions and responsibilities of prospective or continued employment;
(3) Prohibit or prevent an employer, employment agency, or labor organization from refusing to hire, refer, or discharge any individual for reasons relating to the ability of the individual to perform the work in question;
. . . .

HRS § 378-3 (emphasis added).

The majority reads HRS § 378-3 as an exclusive list of things the employer may do. However, nothing in either section tells the employer that it must limit its hiring decisions to reasons related to the " ability of the individual to perform the work in question." The majority's reading is therefore inconsistent with the plain language of the current statute. Leslie v. Bd. of Appeals of Cnty. of Hawai'i, 109 Hawai'i 384, 393, 126 P.3d 1071, 1080 (2006) (" This court's primary obligation in construing a statute is to ascertain and give effect to the intention of the legislature, which is to be obtained primarily from the language contained in the statute itself." ) (Quotation marks omitted) (citing Franks v. City & Cnty. of Honolulu, 74 Haw. 328, 334, 843 P.2d 668, 671 (1993)).

Having glossed over the plain language of the relevant version of HRS § 378-2, the majority instead heavily relies on the 1963 version and an accompanying 1963 senate committee report, to claim that a legitimate, non-discriminatory reason must be solely related to the ability of the individual to perform the work in question. Majority at 34. The 1963 version of HRS § 378-2 reads:

(1) It shall be unlawful employment practice or unlawful discrimination:
(a) For an employer to refuse to hire or employ or to bar or discharge from employment, any individual because of his race, sex, age, religion, color or ancestry, provided that an employer may refuse to hire an individual for good cause relating to the ability of the individual to perform the work in question[.]"

1963 Haw. Sess. Laws Act 180, § 1(a) at 223 (emphasis added).

However, to the extent that the majority interprets this provision as requiring employers to base their decisions solely on an individual's ability to perform the work in question, the legislature subsequently saw fit to do otherwise. In 1981, the legislature moved the underlined language relating to " the ability of the individual to perform the work in question" from HRS § 378-2 to HRS § 378-3. 1981 Haw. Sess. Laws Act 94, § 2 at 185-86. The " Exceptions" provision, HRS § 378-3, now provides in relevant part that:

Nothing in this part shall be deemed to:
. . . .
(3) Prohibit or prevent an employer, employment agency, or labor organization from refusing to hire, refer, or discharge any individual for reasons relating to the ability of the individual to perform the work in question[.]

HRS § 378-3 (emphasis added).

Now it is evident that this language, upon which the majority so heavily relies, is in fact an exception to the statute. In other words, this language now falls within the provision that exempts certain employer conduct from the operation of the statute. The operative provision of the statute is HRS § 378-2, which prohibits employment actions taken " because of" certain characteristics of the affected individual. Nothing in the statute requires an employer to base every employment decision solely on the qualifications of the applicant. To the extent that the 1963 version was unclear about the obligations of the employer when hiring, the legislature clarified that in 1981. The current version of HRS § 378-2 simply cannot be read to require that a hiring decision must be related to " the ability of the individual to perform the work in question." The majority's contention, that qualifications of the applicant are the sole test for whether a hiring decision is discriminatory, is incorrect.

Page 110

The majority states that the 1981 changes to the statute do not alter its analysis because there is no indication that the purpose [135 Hawai'i 41] of the statute changed and because the 1981 version of the statute is substantively identical to the 1963 version. Majority at 34-36. Respectfully, the majority effectively ignores the 1981 changes. Moreover, although the majority explains that the 1981 changes did not change the legislative intent or purpose behind the statute, the analysis proposed here is not based upon a change in legislative purpose, but upon the plain language of the current statute. Even if the majority is correct that the purpose of the current statute remains the same as the 1963 version, our plain reading interpretation of the current statute is consistent with that legislative purpose when viewed in light of the whole legislative history.[6]

The majority suggests that an interpretation of the statutes that allows an employer to decline to hire an individual for a non-discriminatory reason not relating to his or her ability to perform the work renders the exceptions in HRS § 378-3 superfluous. Majority at 42. This is because the majority reads HRS § 378-3 as an exclusive list of things an employer may do, even when the employer has not engaged in discrimination prohibited under HRS § 378-2. However, the plain language of the statute does not indicate that the list is exclusive, and furthermore the language " [n]othing in this part shall be deemed to" suggests that the opposite is true -- that the legislature was merely attempting to ensure that a particular group of key rights remained protected without listing every possible basis for an adverse employment decision.[7]

The majority next converts the McDonnell Douglas framework from a means of facilitating the proof of claims to a new substantive interpretation of the statute, which is not supported by its plain language. In doing so, the majority would subvert forty-plus years of settled jurisprudence. See, for example, McDonnell Douglas Corp., 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668, as adopted by this court in Furukawa v. Honolulu Zoological Soc'y, 85 Hawai'i 7, 936 P.2d 643 (1997), Shoppe, and several other cases.

Page 111

The " shifting burdens of proof set forth in McDonnell Douglas are designed to assure that the plaintiff has his [or her] day in court despite the unavailability of direct evidence." Trans World Airlines, Inc. v. Thurston, 469 U.S. 111, 121, 105 S.Ct. 613, 83 L.Ed.2d 523 (1985) (quotation marks, brackets, and citation omitted). In cases where the employee or applicant has no direct evidence of discrimination, " applying the McDonnell Douglas method allows the plaintiff to proceed with an action with bare bones information and to force the hand of the employer as it [135 Hawai'i 42] must then put forward a reason or risk judgment in favor of the plaintiff." Ruth I. Major, McDonnell Douglas: The Oft-Misunderstood Method of Proof, Fed. Law., May 2012, at 14, 15. Because employment discrimination oftentimes is not overt, the McDonnell Douglas framework enables plaintiffs " who often have little inside information[,] . . . entry into the courthouse and the opportunity to obtain discovery to determine whether the decision was in fact unlawfully motivated." Id.

Equally important, however, McDonnell Douglas was never meant to shift the burden of proof onto the employer-defendant once the plaintiff has established his or her prima facie case. Burdine, 450 U.S. at 253-54. A prima facie case, in effect, creates a presumption that the employer unlawfully discriminated against the employee. Nevertheless, until now, this court and every federal court has been unequivocal in stating that, " [a]t all times, the burden of persuasion remains on the plaintiff" under the McDonnell Douglas framework. Shoppe, 94 Hawai'i at 379, 14 P.3d at 1060 (citing Sam Teague, 89 Hawai'i at 279 n.10, 971 P.2d at 1114 n.10); see also Burdine, 450 U.S. at 253 (" The ultimate burden of persuading the trier of fact that the defendant intentionally discriminated against the plaintiff remains at all times with the plaintiff." ); Lindemann, Age Discrimination in Employment Law at 612 (" Any legitimate, nondiscriminatory reason will rebut the presumption created by the prima facie case. The burden is not difficult to satisfy, as the employer is not required to prove by a preponderance of the evidence that it actually was motivated by the proffered reasons, but only to articulate those reason(s)." ).

The purpose of the second step was to force the employer-defendant to articulate the reason for its hiring decision. This would benefit the plaintiff and the trier of fact " by presenting a legitimate reason for the action and to frame the factual issue with sufficient clarity so that the plaintiff will have a full and fair opportunity to demonstrate pretext." Burdine, 450 U.S. at 255-56. However, once the employer carries its burden (a burden of production, not persuasion), then the McDonnell Douglas presumption of discrimination " drops from the case." Wright v. Southland Corp., 187 F.3d 1287, 1291 (11th Cir. 1999). " At this point, the case is placed back into the traditional framework -- in other words, the plaintiff still bears the burden of proving, more probably than not, that the employer took an adverse employment action against him on the basis of a protected personal characteristic." Id.; see also Hicks, 509 U.S. at 507-08 (" If the defendant carries its burden of production [at the second stage of the McDonnell Douglas framework], the presumption raised by the prima facie case is rebutted, and 'drops from the case.' The plaintiff then has the full and fair opportunity to demonstrate, through presentation of his [or her] own case and through cross-examination of the defendant's witnesses, that the proffered reason was not the true reason for the employment decision and that race was. [The Plaintiff] retains that ultimate burden of persuading the trier of fact that [the Plaintiff] has been the victim of intentional discrimination." ) (Quotation marks, brackets, and citations omitted). " The McDonnell Douglas presumption, however, has made the plaintiff's task somewhat easier: The plaintiff now has evidence of the employer's proffered reasons for the adverse employment action, and can attempt to show that these proffered reasons are a pretext for discrimination." Wright, 187 F.3d at 1291.

Page 112

Instead of applying this carefully considered and universally accepted framework, the majority converts the McDonnell Douglas framework from a means of facilitating the proof of claims to a new substantive interpretation of the statute, which is not supported by its plain language. In this regard, despite stating that its evaluation of " legitimacy" under the second step does not transform the burden of production into one of proof, the majority several times implies that the burden of production is in fact a burden of proof. For example, the majority contends that one of CDM Media's reasons was controverted as a criterion by statements in CDM Media's solicitation, therefore, the majority concluded that CDM Media did not satisfy its burden to articulate a legitimate, nondiscriminatory reason for declining [135 Hawai'i 43] to hire Adams. Majority at 75-76. Stated otherwise, despite Hawai'i and federal case law making clear that the employer's burden under the second step is merely to articulate a legitimate, nondiscriminatory reason, not prove it, the majority concludes that CDM Media did not satisfy its burden under the second step because it could not prove that it honestly relied on the reason articulated. As discussed below, it is at the third step of the McDonnell Douglas analysis that the validity of an employer's reasons can be called into doubt. See Hicks, 509 U.S. at 509 (" [T]he determination that a defendant has met its burden of production [at the second step of the McDonnell Douglas framework] (and has thus rebutted any legal presumption of intentional discrimination) can involve no credibility assessment. For the burden-of-production determination necessarily precedes the credibility-assessment stage." ).

The majority states that if we held that at the second step of the McDonnell Douglas framework the employer's proffered reasons must be taken as true, we would be essentially reading the word " legitimate" out of the test. Majority at 52. However, this is inaccurate. The majority correctly states that when determining whether the employer's reason is " legitimate," we must analyze whether it is legally sufficient, which means that, if believed by the trier of fact, it must be sufficient to support a finding that unlawful discrimination was not the cause of the adverse employment action. To do this, we must assume that the proffered evidence is true. Although the majority confusingly states that there is no credibility assessment at this step of the analysis, majority at 51-52. it then suggests that we need not take the employer's proffered reason as true when evaluating the sufficiency of the evidence proffered by the employer, and concludes that CDM Media did not articulate a legitimate reason because its offered reasons were controverted by other evidence, which appears to be a credibility assessment. Majority at 52-53, 75-76.

By concluding that CDM Media did not succeed at the second step because its reasons were controverted by other evidence, the majority blends the second and third step inquiries under McDonnell Douglas despite our clear case law establishing that " the ultimate burden of persuading the trier of fact that the employer intentionally discriminated against the plaintiff remains at all times with the plaintiff." See Shoppe, 94 Hawai'i at 378-79, 14 P.3d at 1059-60. Under the majority's rule, once the plaintiff establishes its prima facie case, the burden shifts to the employer-defendant to prove that the reasons for its decision were solely related to the position's qualifications, communicated to the applicants beforehand, and not based on the employer's understanding or belief.

It is far from clear how the majority's test will impact employers in Hawai'i. The result of the majority's test will be, at best, confusion about how an employer can lawfully hire employees and turn down applicants. Take for example the majority's conclusion that an employer cannot rely on its " understanding" or " belief" regarding the applicant unless the employer has direct personal knowledge of the factual basis underlying the employer's belief. Majority at 67-77. Based on this premise, the majority concludes that several of CDM Media's stated reasons were inadmissible hearsay because the basis for the information is from an unidentified third person or external source. Majority at 67-77. These reasons, stated by Willis in his declaration, were:

b. As far as I understood, most of [Adams's] recent (previous 10-15 years) sales experience was in publishing and/or selling phone book advertising which incorporated outside sales and face to face communication;
c. As far as I understood, [Adams] had little or no sales experience that involved selling to C-Level corporate executives of Fortune 1,000 companies; and
d. I was advised that [Adams] had said that she disliked tedious work.

Page 113

As discussed above, CDM Media's burden of production under the second step of [135 Hawai'i 44] McDonnell Douglas was to articulate its legitimate nondiscriminatory reasoning for its hiring decision. An employer satisfies this second step by admissible evidence of the employer's reasoning for its decision, such as a declaration or affidavit of the decision maker stating why he or she made the employment decision at issue. See, e.g., Rivera v. City & Cnty. of Denver, 365 F.3d 912, 918 (10th Cir. 2004). Willis's statements were offered for the limited non-hearsay purpose of articulating a reason why he made the decision not to hire Adams and were based on his own personal knowledge as the ultimate decision maker on Adams's application. Shoppe, 94 Hawai'i at 378, 14 P.3d at 1059; see also Hicks, 509 U.S. at 516. Contrary to the majority's contention, Willis's statements were not offered to prove whether Adams's sales experience was in outside sales or that she had little to no experience selling to C-level corporate executives, for that is the inquiry under the third step of the McDonnell Douglas test. It is the majority's erroneous analysis under the second step of the test that leads to its conclusion that Willis's statements were inadmissable hearsay.

Numerous cases have permitted the defendant-employer to articulate its legitimate nondiscriminatory reason through the affidavit or testimony of the decision maker, even if the decision maker's reasoning is based on third-party information. See, e.g., Rivera, 365 F.3d at 918 (employer articulated its legitimate nondiscriminatory reason through affidavit of ultimate decision maker, who terminated plaintiff after " he was informed" about plaintiff's poor work performance); McDonald-Cuba v. Santa Fe Protective Servs., Inc., 644 F.3d 1096, 1103 (10th Cir. 2011) (employer articulated its reason for firing plaintiff through decision maker's testimony, that " she learned of" plaintiff starting rival company).

Indeed, no federal jurisdiction appears to have taken the majority's position. See, e.g., Villiarimo v. Aloha Island Air, Inc., 281 F.3d 1054, 1063 (9th Cir. 2002) (" in judging whether [the employer's] proffered justifications were 'false,' it is not important whether they were objectively false . . . . Rather, courts 'only require that an employer honestly believed its reason for its actions, even if its reason is 'foolish or trivial or even baseless.'" ); Flores v. Preferred Technical Grp., 182 F.3d 512 (7th Cir. 1999) (affirming summary judgment dismissing race discrimination claim where employer honestly believed that Hispanic employee was leader of disruptive protests during work hours); Tesh v. U.S. Postal Serv., 349 F.3d 1270, 1273 (10th Cir. 2003) (" [The employer] reasonably believed that Appellant was dishonest . . . . Whether that belief was erroneous is irrelevant." ); Majewski v. Automatic Data Processing, Inc., 274 F.3d 1106 (6th Cir. 2001) (adopting " honest belief" rule); Sybrandt v. Home Depot, U.S.A., Inc., 560 F.3d 553 (6th Cir. 2009) (employee's claim that his conduct did not violate employer's policy was irrelevant in light of employer's honest belief that employee violated that policy). Willis's statements were thus admissible to articulate CDM Media's reasoning for not hiring Adams, thereby satisfying CDM Media's burden of production under the second step of McDonnell Douglas. Far from " weakening the evidentiary standard in this context," majority at 75, this approach is consistent with well-established precedent. In contending that CDM Media's reasons were inadmissible, the majority overlooks the second step's focus on revealing the employer's reasoning for its decision as opposed to requiring the employer to prove the factual basis for that reasoning.

Page 114

A couple of hypotheticals further illustrate the damage that the majority's rule could inflict on employee hiring in Hawai'i. Under the approach adopted by the majority, whenever the number of equally qualified applicants exceeds the number of positions, those qualified applicants not hired could have a cause of action for employment discrimination because the only legitimate hiring consideration is whether the person is qualified. This is not only unworkable in practice, it also conflicts with the legislative history quoted by the majority, which stated that " the employer may, depending on the job, consider the training, experience, intelligence, personality and appearance of the applicant[.]" majority at 32 (quoting S. Stand. Comm. Rep. No. 573, in [135 Hawai'i 45] 1963 Senate Journal, at 866). The majority states that this is not a concern because " an employer may select an employee from a pool of applicants . . . by comparing and contrasting job-related qualifications without creating a cause of action." Majority at 60. However, under the majority's test, a cause of action may still be created if, when choosing between applicants with similar or identical qualifications, the employer bases its decision on something other than a clearly " job-related" qualification, such as an applicant's personality.

Or, suppose that one applicant among many takes a test to determine who is most qualified and earns the highest score. Then, her test is mistakenly attributed to another person who gets the job. She sues and the employer submits a declaration saying, " I did not hire her for the job because I believed that someone else received the highest score." Under the majority's test, she will prevail at summary judgment in establishing discrimination, even though the hiring decision was merely the result of a mistake, rather than unlawful discrimination. See Burdine, 450 U.S. at 259 (" The fact that a court may think that the employer misjudged the qualifications of the applicants does not in itself expose him [or her] to Title VII liability, although this may be probative of whether the employer's reasons are pretexts for discrimination." ). The majority states that such an exam would probably test qualities related to the ability to perform the work. However, the problem in this hypothetical that is not addressed by the majority is how its conclusion in this case -- that Willis's proffered reasons for not hiring Adams were insufficient because they were just his " belief" -- would not lead to a conclusion that is as troubling as this mistaken-test-score hypothetical.

In sum, the majority unnecessarily establishes a new interpretation of the McDonnell Douglas test, and fails to give effect to the plain language of the version of Hawaii's anti-discrimination statute applicable to Adams's case and currently in effect. By subverting a test that is at the foundation of federal and Hawai'i employment discrimination law, the majority not only threatens to create great uncertainty and instability within Hawaii's employment community, it does so without good reason.

B. Genuine issues of material fact exist as to whether CDM Media's stated reasons were pretext for age discrimination

Under the third step of the McDonnell Douglas framework, if the employer produces evidence which rebuts the prima facie case, the burden reverts to the plaintiff to demonstrate that the defendant's proffered reasons were pretext for discrimination. Shoppe, 94 Hawai'i at 379, 14 P.3d at 1060. " A plaintiff may establish pretext 'either directly by persuading the court that a discriminatory reason more likely motivated the employer or indirectly by showing that the employer's proffered explanation is unworthy of credence.'" Id. (quoting Burdine, 450 U.S. at 256). Specifically with respect to summary judgment, " [a]t the third stage of the McDonnell Douglas analysis, a plaintiff may defeat a motion for summary judgment by either (i) discrediting the proffered reasons, [] circumstantially or directly, or (ii) adducing evidence . . . that discrimination was more likely than not a determinative cause of the adverse action." Anderson v. Wachovia Mortg. Corp., 621 F.3d 261, 277 (3d Cir. 2010) (internal quotation marks and ellipses omitted). " The plaintiff can discredit the proffered reasons by demonstrating such weaknesses, implausibilities, inconsistencies, incoherencies, or contradictions in the defendant's proffered legitimate reasons for its action that a reasonable factfinder could rationally find them unworthy of credence, and hence infer that the defendant did not act for the asserted nondiscriminatory reasons." Id. (internal quotation marks and brackets omitted).

Page 115

" If the plaintiff establishes that defendant's proffered reasons were pretextual, the trier of fact may, but is not required to, find for the plaintiff." Shoppe, 94 Hawai'i at 379, 14 P.3d at 1060 (citing Sam Teague, 89 Hawai'i at 279 n.10, 971 P.2d at 1114 n.10). This is because, " [a]t all times, the burden of persuasion remains on the plaintiff" to prove that the employer's decision was discriminatory. [135 Hawai'i 46] Shoppe, 94 Hawai'i at 379, 14 P.3d at 1060 (citing Sam Teague, 89 Hawai'i at 279 n. 10, 971 P.2d at 1114 n.10); see also Hicks, 509 U.S. at 518 (" [T]he ultimate question [is] discrimination vel non." ). Viewing the record in the light most favorable to the nonmovant Adams, as this court is required to do at the summary judgment stage, demonstrates that genuine issues of material fact preclude summary judgment.

The only evidence CDM Media produced to articulate its reasons for not hiring Adams was the declaration of its CEO, Willis. Willis stated that he was the decision maker who decided not to hire Adams because he believed Adams " was not qualified for the job." Related to this reason, Willis also declared that CDM Media " did not hire any younger applicants with equal or lower qualifications for the position." Willis thus appeared to believe that Adams was simply unqualified for the inside sales job, which primarily involved making 200 to 250 cold calls a day to sell marketing services to businesses, and thus was not better qualified than those hired for the position.

Willis offered several reasons to explain why he believed Adams was unqualified. According to his declaration:

5. It was my belief that Plaintiff was not qualified for the job because:
a. [S]he had no sales experience in the prior five years;
b. As far as I understood, most of her recent (previous 10-15 years) sales experience was in publishing and/or selling phone book advertising which incorporated outside sales and face to face communication;
c. As far as I understood, she had little or no sales experience that involved selling to C-Level corporate executives of Fortune 1,000 companies; and
d. I was advised that she had said that she disliked tedious work.

(Emphasis added).

The evidence in the record calls into doubt some of CDM Media's explanations for why Adams was not qualified for the position. In these circumstances, a reasonable factfinder could rationally find CDM Media's reason unworthy of credence, and hence infer that CDM Media did not act for the asserted nondiscriminatory reason.

First, Willis explained that Adams was not qualified for the job because " most of her recent (previous 10-15 years) sales experience was in publishing and/or selling phone book advertising which incorporated outside sales and face to face communication." However, Adams's resume states in the very first paragraph that she has " more than 20 years of full-time, hands-on experience in nearly all aspects of sales and marketing, including inside and outside sales (award-winning sales rep)[.]" (Emphasis added). Under " business experience," Adams's resume also provided a detailed explanation of her work for Verizon Information Services from 1998 to 2003, which involved sales of " online advertising, including web sites [], links and other advertising products . . . sold to current, new and former customers working in a wide variety of industries[.]" Adams " [s]et appointments with customers, analyzed current advertising programs, researched industry and market information, prepared presentations for new programs, presented new and standard advertising products and explained the benefits and features of them to customers in face-to-face meetings or by telephone[.]" (Emphasis added). Adams also stated in her declaration that:

in the 10 to 15 years prior to the interview I had sales experience in publishing and/or selling phone book advertising which incorporated outside sales and face to face communications. My sales experience during that time was not only in print, but online, selling websites and links for customers. I had 25 years of computer experience at the time. I also sold print and online advertising full-time in an inside sales position over the phone from September of 1998 to about May of 2000, when our management promoted me into outside sales.

In short, the evidence suggests that Adams had several years of experience with inside sales of web-based marketing services in the ten years prior to her submitting an application with CDM Media.

Page 116

[135 Hawai'i 47] Adams also submitted evidence that Bera recognized her inside sales experience. On the Adams resume and application letter that CDM Media included with its HCRC answer, Bera handwrote " 1/2 inside 1/2 outside" next to " Verizon/The Yellow Pages." It is reasonable to infer from these notes that Bera was aware of Adams's inside sales experience with Verizon Information Services. Further, given that Willis likely received his information about Adams's inside sales experience from either her resume and application letter or from Bera, it is unclear how Willis could have come to believe that Adams did not possess the relevant inside sales experience, and, by extension, that she was categorically unqualified for the job.

Additionally, Adams calls into question Willis's explanation that he believed Adams was unqualified for the job because she told Bera that she disliked tedious work. Adams's attorney acknowledged that, " if somebody says I don't like to do tedious work, and it's cold calling, in a telemarketing room basically, of course that's going to be a substantial factor in your decision making." Nevertheless, in her declaration, Adams denied she ever made the tedious work statement. Adams argued that " [v]iewing the evidence in the light most favorable to [her], the court must conclude that the statement was never made."

CDM Media correctly points out that an employer's honestly held belief, even if mistaken, does not automatically establish pretext. See also Rivera, 365 F.3d at 924-25 (stating that the court does not ask " whether the employer's proffered reasons were wise, fair, or correct, but whether it honestly believed those reasons and acted in good faith upon those beliefs" ) (brackets omitted). " In determining whether the proffered reason for a decision was pretextual, we examine the facts as they appear to the person making the decision." Id. However, even assuming Willis honestly relied on incorrect information that Adams said she disliked tedious work, as Adams points out, under a " cat's paw" theory an employer may be liable " where the plaintiff can show that an employee with discriminatory animus provided factual information or other input that may have affected the adverse employment action." Smith v. Bray, 681 F.3d 888, 897 (7th Cir. 2012).

Adams also challenges Willis's statement that he " was not involved in creating, reviewing or approving any advertising or posting for the position for which [Adams] applied, nor was [he] aware of the content of such advertising or posting, and [he] did not consider any criteria stated in any advertising or posting in making [his] decision[.]" Although Willis's involvement and awareness of CDM Media's job advertising is a collateral issue that in and of itself may not be enough to preclude summary judgment, a jury could use the plausibility (or lack thereof) of this statement, and others by Willis concerning his reasons for not hiring Adams, to infer that he " is noncredible, and should not be believed as to other issues[.]" Jaramillo v. Colorado Judicial Dep't, 427 F.3d 1303, 1310 (10th Cir. 2005); see also Tomasso v. Boeing Co., 445 F.3d 702, 707 (3d Cir. 2006) (concluding that " the rejection of some explanations may so undermine the employer's credibility as to enable a rational factfinder to disbelieve the remaining rationales, even where the employee fails to produce evidence particular to those rationales" ). Indeed, according to CDM Media's HCRC answer, " CDM [Media] ha[d] to be careful in their selection as a start up company" because " [a]t the time of [Adams's] interview, CDM [Media] had only 12 employees[.]" CDM Media further explained that because it was at " the infant stage of the company," " every hiring decision that [was] made ha[d] to be met with significant amount of evaluation." A jury could reasonably find that Willis's statement, that he was not aware of or involved in the advertising for the position, was not credible in light of CDM Media's small size and position as a startup, Willis's claim to have been involved in the decision to not hire Adams, and CDM Media's assertion that every hiring decision was made carefully and with a " significant amount of evaluation."

Page 117

Willis's other statement -- that the " company did not hire any younger applicants with equal or lower qualifications for the position" -- could be read as another rationale for not hiring Adams, i.e., CDM Media simply chose more qualified candidates. Adams responds that she was far more qualified than [135 Hawai'i 48] those hired, and thus, CDM Media's hiring decision had to have been based on age bias. As a general rule, " minor differences between a plaintiff's qualifications and those of a successful applicant are not sufficient to show pretext." Jaramillo, 427 F.3d at 1308-09. To show pretext, " disparities in qualifications must be of such weight and significance that no reasonable person, in the exercise of impartial judgment, could have chosen the candidate selected over the plaintiff for the job in question." Cooper v. S. Co., 390 F.3d 695, 732 (11th Cir. 2004) (internal quotation marks omitted), overruled on other grounds by Feliciano v. City of Miami Beach, 707 F.3d 1244 (11th Cir. 2013); see also Bender v. Hecht's Dep't Stores, 455 F.3d 612, 627 (6th Cir. 2006) (" [I]n the case in which there is little or no other probative evidence of discrimination, to survive summary judgment the rejected applicant's qualifications must be so significantly better than the successful applicant's qualifications that no reasonable employer would have chosen the latter applicant over the former." ).

While Adams insists that her qualifications were superior to those hired instead of her, she did not offer admissible evidence to support this contention. Indeed, Adams's attorney never moved the circuit court under Hawai'i Rules of Civil Procedure Rule 56(f) for additional time to seek admissible evidence of the hirees' qualifications through interrogatories or a request for production of documents. Instead, Adams's attorney submitted Adams's declaration that she searched for their qualifications on a third-party website, www.LinkedIn.com. As a result, the circuit court correctly determined that such evidence of the hirees' qualifications was " not admissible evidence to support [Adams's] claim that others, who were less experienced or who lacked experience, were hired instead of [Adams] for this position, and who were younger." Absent such evidence, Adams failed to directly raise a jury question as to CDM Media's other stated reason, that Adams was not as qualified as those hired.

Nevertheless, under the circumstances of this case, a genuine issue of fact exists as to this reason because it is so intertwined with CDM Media's first reason, i.e., that Adams was unqualified. Although the employee generally must raise a triable issue as to each reason offered by the employer, " [i]n some cases, . . . a successful attack on part of the employer's legitimate, non-discriminatory explanation is enough to survive summary judgment even if one or more of the proffered reasons has not been discredited." Jaramillo, 427 F.3d at 1310. " Something less than total failure of the employer's defense is sufficient to create a genuine issue of fact when"

(1) the reasons are so intertwined that a showing of pretext as to one raises a genuine question whether the remaining reason is valid; (2) the pretextual character of one explanation is " so fishy and suspicious," that a jury could " find that the employer (or its decisionmaker) lacks all credibility" ; (3) the employer offers a plethora of reasons, and the plaintiff raises substantial doubt about a number of them; (4) the plaintiff discredits each of the employer's objective explanations, leaving only subjective reasons to justify its decision; or (5) the employer has changed its explanation under circumstances that suggest dishonesty or bad faith.

Id. (citations omitted) (emphasis added).

Here, it is clear that CDM Media's two stated reasons are intertwined. Because Willis believed Adams was unqualified for the position, it follows that he believed those hired were better qualified than her. Given the relation between these reasons, a factfinder may rationally disbelieve CDM Media's second statement if it determines that CDM Media's first statement is unworthy of credence.[8]

Page 118

To summarize, CDM Media articulated legitimate nondiscriminatory reasons for not hiring Adams, thus satisfying its burden of production under the second step of the McDonnell Douglas framework. Even if [135 Hawai'i 49] Adams establishes at trial that CDM Media's stated reasons were unworthy of credence, to prevail she will still have to prove that CDM Media's decision not to hire her was ultimately motivated by age discrimination. Nevertheless, for the purposes of determining whether or not summary judgment was appropriate, I conclude that Adams has done just enough, and CDM Media has done too little, under the third step of the McDonnell Douglas analysis. Accordingly, Adams raised genuine issues of material fact with respect to her age discrimination claim that preclude summary judgment in favor of CDM Media.

IV. Conclusion

Based on the foregoing reasons, I would vacate the ICA's November 31, 2013 Judgment on Appeal and the circuit court's July 24, 2012 Final judgment, and remand this case to the circuit court for further proceedings consistent with this opinion.

Mark E. Recktenwald, Paula A. Nakayama


Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.