Heldwein v. ZMD America, Inc.

Filing 48

MEMORANDUM DECISION AND ORDER granting in part and denying in part 31 Motion for Summary Judgment. Count One is dismissed but all other claims survive. Signed by Judge B. Lynn Winmill. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (st)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO
ANDREAS HELDWEIN,
Case No. 4:13-cv-00440-BLW
Plaintiff,

MEMORANDUM DECISION AND
ORDER

v.
ZMD AMERICA, INC.,
Defendant.

INTRODUCTION
Before the Court is Defendant ZMD America, Inc.’s Motion for Summary
Judgment (Dkt. 31). This case stems from the demotion and termination of Plaintiff
Andreas Heldwein by Defendant ZMD America, Inc. (“ZMDA”), a subsidiary of ZMDI,
Inc. Heldwein alleges that his demotion and termination violated the Uniformed Services
Employment and Reemployment Rights Act of 1994 (“USERRA”), 38 U.S.C. §§ 4301–
4333.1 ZMDA’s motion for summary judgment was argued on May 20, 2015, and taken
under advisement. For the reasons set forth below, the Court will deny ZMDA’s Motion.

1

Plaintiff Heldwein has agreed to dismiss all other claims than the USERRA
claims. Plaintiff’s counsel confirmed this agreement at oral argument. The Court will
therefore dismiss all other claims, including ___.

MEMORANDUM DECISION AND ORDER - 1

BACKGROUND
This case stems from the demotion and termination of Andreas Heldwein by ZMD
America, Inc. (“ZMDA”). ZMDA is a California corporation specializing in the design
and sale of analog mixed-signal semiconductor solutions and is wholly-owned subsidiary
of Zentrum Mikroelecktronik Dresden, AG (“ZMDI”), a German corporation.
Heldwein was originally hired by ZMDI as a Business Line Manager in 2007 and
subsequently transferred to ZMDA on August 11, 2008. In late March 2009, Heldwein
became the president of ZMDA and managed 27 employees.
ZMDA, however, claims that it became concerned with Heldwein’s job
performance in early 2009. Specifically, CEO Thilo Von Selchow, who was acting as
Heldwein’s immediate supervisor, says he was concerned with Heldwein’s lack of new
business development, his leadership skills, and what Von Selchow described as an
overall decline in performance. But Von Selchow positively reviewed Heldwein’s
performance for each year prior to 2011. Heldwein also received several raises between
initially joining ZMDA in 2008 and 2010, when he began earning a salary of $160,000 a
year. In addition, at the end of 2010 fiscal year, Heldwein received a bonus of $75,000,
which was substantially more than the $20,000 bonus he received in 2009.
On March 15, 2011, Heldwein joined the Idaho Army National Guard. He then
attended basic combat training for 11 weeks from April 6, 2011, through June 19, 2011,
and attended Officer Candidate School for the last two weeks of July 2011. The first

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documented incident suggesting that Von Selchow was considering firing Heldwein was
on August 12, 2011, when Von Selchow inquired into the terms of Heldwein’s
employment contract.
Around the same time that Von Selchow inquired into the terms of Heldwein’s
employment, another man named Frantz Saintellemy, who had known Von Selchow
since 2004, officially began working at ZMDA as the Vice President of Corporate
Strategy, Business Development, and Sales North America. Saintellemy signed a letter
agreement to join ZMDA back in April 2011. Saintellemy apparently was hired to fill the
shoes of Carlo Reburghini, who was about to retire. Von Selchow never informed
Heldwein of his decision to hire Saintellemy, which Heldwein found upsetting and
inconsistent with the trust and communication that had previously existed between him
and Von Selchow during the prior four years.
A few months later, in October 2011, Saintellemy and Von Selchow discussed
hiring Ed Lam as the Vice President of Marketing for Analog Products. During these
discussions, Von Selchow sent an email to Saintellemy, who had been working at ZMDA
for only two months, asking whether they could “take out Andreas [Heldwein] instead?”
Ex. 10 to Heldwein Decl., Dkt. 40. Eight days later, the Medical Line was merged with
another line and Heldwein was “demoted” to a Product Manager under the Power and
Analog Business Line. In his new position, Heldwein no longer managed employees and
now reported to Saintellemy instead of Von Selchow. Heldwein was also told to no
longer attend executive planning meetings.

MEMORANDUM DECISION AND ORDER - 3

During a discussion on December 5, 2011, Heldwein told Saintellemy that he
would be attending Officer Candidate School in the summer 2012, and could be deployed
in fall 2012 as part of his National Guard duties. In response, Saintellemy said that
ZMDA would work out a way for Heldwein to "exit" if he had to be gone for an extended
period. Heldwein immediately told Saintellemy that he did not want to leave the
company. Soon thereafter, in January 2012, Saintellemy informed Heldwein that his new
supervisor would be the recently-hired Ed Lam. Heldwein considered this a demotion
because he was now at least two positions removed from his long time supervisor, CEO
Von Selchow.
In June 2012, Heldwein informed Lam that he would be commissioned as an
officer in September 2012, and then would be absent for several months for officer
training. Heldwein advised Lam that they should start planning on how to cover
Heldwein’s absence, to which Lam retorted that ZMDA is “running very lean and no one
can pick up work for another person" and asked "how do you think you can get your job
done if you are gone with the military all the time?" On an earlier occasion, Lam joked
about “military intelligence” being an oxymoron.
Heldwein attended a second two-week training in late July and returned August 4,
2012. He also attended a weekend OCS Graduation on September 9, 2012, where he was
commissioned as an officer. Three days later, Heldwein’s analog product line merged
with the LED line and his position was eliminated. David Hubanks, the PPM over the
LED line, was tasked with managing the merged product line. Heldwein trained Hubanks

MEMORANDUM DECISION AND ORDER - 4

on the products that Hubanks would be taking over. In the spring of 2013, ZMDA hired
two employees to support Hubanks and Lam in analog products. These employees’
responsibilities were similar to those previously held by Heldwein.
The actions which Heldwein contends violated the USERRA are: 1) ZMDA hired
a new product manager following Heldwein’s attendance at basic training; 2) ZMDA
demoted Heldwein from an executive position to a product manager; 3) Heldwein was
again demoted after he informed ZMDA of pending obligations at Officer Candidate
School; and 4) ZMDA terminated Heldwein’s employment once he became a
commissioned officer. See Compl. at ¶¶38, 41, 44, 46, Dkt. 1.
LEGAL STANDARD
Summary judgment is appropriate where a party can show that, as to any claim or
defense, “there is no genuine dispute as to any material fact and the movant is entitled to
judgment as a matter of law.” Fed. R. Civ. P. 56(a). One of the principal purposes of the
summary judgment “is to isolate and dispose of factually unsupported claims . . . .”
Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986). It is “not a disfavored procedural
shortcut,” but is instead the “principal tool[ ] by which factually insufficient claims or
defenses [can] be isolated and prevented from going to trial with the attendant
unwarranted consumption of public and private resources.” Id. at 327. “[T]he mere
existence of some alleged factual dispute between the parties will not defeat an otherwise
properly supported motion for summary judgment.” Anderson v. Liberty Lobby, Inc., 477

MEMORANDUM DECISION AND ORDER - 5

U.S. 242, 247-48 (1986). There must be a genuine dispute as to any material fact – a fact
“that may affect the outcome of the case.” Id. at 248.
The evidence must be viewed in the light most favorable to the non-moving party,
and the Court must not make credibility findings. Id. at 255. Direct testimony of the
non-movant must be believed, however implausible. Leslie v. Grupo ICA, 198 F.3d
1152, 1159 (9th Cir. 1999). On the other hand, the Court is not required to adopt
unreasonable inferences from circumstantial evidence. McLaughlin v. Liu, 849 F.2d
1205, 1208 (9th Cir. 1988).
The moving party bears the initial burden of demonstrating the absence of a
genuine dispute as to material fact. Devereaux v. Abbey, 263 F.3d 1070, 1076 (9th Cir.
2001)(en banc). To carry this burden, the moving party need not introduce any
affirmative evidence (such as affidavits or deposition excerpts) but may simply point out
the absence of evidence to support the nonmoving party’s case. Fairbank v. Wunderman
Cato Johnson, 212 F.3d 528, 532 (9th Cir.2000).
This shifts the burden to the non-moving party to produce evidence sufficient to
support a jury verdict in her favor. Deveraux, 263 F.3d at 1076. The non-moving party
must go beyond the pleadings and show “by her [ ] affidavits, or by the depositions,
answers to interrogatories, or admissions on file” that a genuine dispute of material fact
exists. Celotex, 477 U.S. at 324.
However, the Court is “not required to comb through the record to find some
reason to deny a motion for summary judgment.” Carmen v. San Francisco Unified Sch.

MEMORANDUM DECISION AND ORDER - 6

Dist., 237 F.3d 1026, 1029 (9th Cir. 2001) (quotation omitted). Instead, the “party
opposing summary judgment must direct [the Court’s] attention to specific triable facts.”
Southern California Gas Co. v. City of Santa Ana, 336 F.3d 885, 889 (9th Cir. 2003).
ANALYSIS
USERRA “prohibit[s] discrimination against persons because of their service in
the uniformed services.” 38 U.S.C. § 4301(a)(3). Congress enacted USERRA to “clarify,
simplify, and, where necessary, strengthen the existing veterans' employment and
reemployment rights provisions.” Leisek v. Brightwood Corp., 278 F.3d 895, 898 (9th
Cir. 2002) (citation omitted). A violation of USERRA occurs when a person's
“membership, application for membership, service, application for service, or obligation
for service in the uniformed services is a motivating factor in the employer's action,
unless the employer can prove that the action would have been taken in the absence of
such membership, application for membership, service, application for service, or
obligation for service.” 38 U.S.C. § 4311(c)(1).
Under USERRA, the employer’s discriminatory motive may be reasonably
inferred from a variety of factors, including (1) proximity in time between the employee's
military activity and the adverse employment action, (2) inconsistencies between
proffered reason and other actions of the employer, (3) an employer's expressed hostility
towards members protected by the statute together with knowledge of the employee's
military activity, and (4) disparate treatment of certain employees compared to other
employees with similar work records or offenses.”Leisek, 278 F.3d at 900 (quoting

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Sheehan v. Dep't of the Navy, 240 F.3d 1009, 1014 (Fed. Cir. 2001). The court may
consider “all record evidence,” including the employer's “explanation for the actions
taken.” Id.
Heldwein’s first claim alleges that: “On or about June 11, 2010, Plaintiff's
responsibilities and authority were reduced by Defendant hiring a new product manager
following Plaintiff's attendance at basic training constituting a willful and intentional
violation of U.S.E.R.R.A.” Compl. at 7, Dkt. 1. The Court presumes that the date is
intended to refer to June 2011 since Heldwein attended basic training from April 6 to
June 18, 2011. In its brief, ZMDA claims that no additionally information has been
provided about this product manager. See Def.’s Br. at 5, Dkt. 31-1. Heldwein has not
clarified the identity of this alleged product manager. Heldwein’s claim cannot refer to
Saintellemy, who was hired as an Executive Vice President, because negotiations were
ongoing before Heldwein even announced he would be joining the National Guard.
Heldwein also refers briefly to Uwe Guenther, who was hired by Von Selchow in June
2011. However, no further connection is made between how this reduced Heldwein’s
responsibilities and authority. Because Heldwein has not provided any evidence to
substantiate this claim, Count One will be dismissed.
Heldwein’s other claims relate to his two demotions and his termination.
Construing the evidence in a light most favorable to the non-moving party, the Court
finds that there is a genuine issue of material fact about whether Heldwein’s time spent
with the National Guard was a motivating factor in these actions.

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In reaching this conclusion, the Court examined the proximity in time between the
employee’s military activity and the adverse employment action. Leisek, 278 F.3d at 900.
There are compelling correlations between ZMDA’s actions and Heldwein’s military
activities. Heldwein joined the National Guard in March 2011 and completed Officer
Candidate School on July 29, 2011. Two weeks later, Von Selchow began considering
whether he could terminate Heldwein’s employment and reviewed his employment
contract. Additionally, Heldwein’s second “demotion” was shortly after he spoke with
Saintellemy concerning his extended training. Moreover, the decision to terminate
Heldwein’s employment was made shortly after he returned from training in August
2012. Finally, ZMDA terminated Heldwein a mere three days after he was commissioned
as on officer and shortly before Heldwein was scheduled to leave for a four-month
training.
Additionally, the Court may infer an employer’s motive from his acts and remarks.
See Leisek, 278 F.3d at 900. Yet stray remarks alone are insufficient to establish
discrimination in the employment context. See Merrick v. Farmers Ins. Grp., 892 F.2d
1434, 1438 (9th Cir. 1990). Furthermore, mere frustration with an employee’s enlistment
is insufficient to support an inference that the employee’s protected status was a
motivating factor. See Rademacher v. HBE Corp., 645 F.3d 1005, 1011 (8th Cir. 2011).
In Rademacher, the court found that remarks expressing frustration with an enlisted
employee’s availability were insufficient because the employer “handled [the

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employee’s] military absences without comment or incident… and reinstated [him] when
he returned.” Id.
However, even if the employer complies with its obligations, hostility towards the
employee’s military involvement may support an inference that such involvement was a
motivating factor in the employer’s actions. See Staub v. Proctor Hosp., 562 U.S. 411
(2011). In Straub, the court found that actions such as requiring the employee to work
additional shifts to “pay back the department for everyone else having to bend over
backwards to cover his schedule” or telling co-workers that the employee’s “military duty
had been a strain on the department” and they should “get rid of him” supported a finding
that his military status was a motivating factor. Id.
In this case, Lam’s joke about “military intelligence” being an oxymoron was
clearly a stray remark and warrants little weight in the Court’s analysis. However,
Saintellemy’s remark about helping Heldwein “exit” from the company upon deployment
and Lam’s comment that “no one can pick up work for another person” after he learned
of Heldwein’s training obligation are more troubling. Construing the facts in a light most
favorable to Heldwein, a reasonable jury could conclude that these statements are proof
that Heldwein’s military duties were a motivating factor in its decision to demote him and
ultimately terminate his employment. Unlike the employer in Rademacher, who
expressed frustration about an employee’s availability but still accommodated the leave,
Saintellemy and Lam conveyed a preference to terminate Heldwein’s employment rather
than accommodate his extended absence. A reasonable jury could conclude that

MEMORANDUM DECISION AND ORDER - 10

Heldwein’s termination was a fulfillment of Saintellemy’s statement that he would help
Heldwein to exit the company as his leave approached. Accordingly, there is a genuine
issue of material fact as to whether Heldwein’s enlistment and ongoing obligations were
a motivating factor in ZMDA’s decision to demote and ultimately terminate Heldwein’s
employment.
Nevertheless, ZMDA contends that summary judgment is appropriate because it
would have taken the same actions without regard to Heldwein’s protected status. The
USERRA statute provides an affirmative defense to ZMDA if it “can prove that the
action would have been taken in the absence of such membership, application for
membership, service, application for service, or obligation for service.” 38 U.S.C. §
4311(c)(1). ZMDA alleges that organizational changes and Heldwein’s inadequate
performance show it would have taken the same actions regardless of whether Heldwein
was in the National Guard.
The Court, however, finds that too many material facts remain in dispute to grant
summary judgment in favor of ZMDA. ZMDA bears the burden of proving this defense.
And the Court simply cannot find that ZMDA met this burden as a matter of law.
The Ninth Circuit has previously recognized in the context of Title VII retaliation
cases that, “[i]n some cases, temporal proximity can by itself constitute sufficient
circumstantial evidence of retaliation for purposes of both the prima facie case and the
showing of pretext.” Dawson v. Entek, Int’l, 630 F.3d 928, 937 (9th Cir. 2011). Although

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the Court does not employ the McDonnell-Douglas burden-shifting framework in the
context of USERRA, the Title VII cases remain instructive.
Viewing the facts in the light most favorable to Heldwein, each time Heldwein
returned from military leave or advised his supervisors that he would be taking military
leave in the future, he was somehow demoted until he eventually lost his job. This did not
happen just once but on three separate occasions. Based on (1) the positive evaluations
Heldwein received before he joined the National Guard, (2) the close proximity in time
between Heldwein’s military leave and the adverse employment actions taken against
him, and (3) the arguably incriminating comments made by Heldwein’s supervisors
regarding Heldwein’s leave, a jury could logically infer that ZMDA would not have
demoted and ultimately terminated Heldwein absent his membership in the National
Guard.
In addition, Heldwein has come forward with some evidence that his performance
was not suffering to the degree ZMD contends. Heldwein’s maintains that he grew the
Medical and Sensing Business Line revenue by 60% between 2007 and 2011. He also
claims that ZMDA has misrepresented the revenue numbers for 2010 and 2011. If true,
this evidence casts into doubt ZMDA’s alleged reasons for deciding to demote Heldwein
and ultimately terminate his employment. For all of these reasons, the Court will deny
ZMDA’s motion for summary judgment on Heldwein’s remaining claims.

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ORDER
O
IT IS ORDE
T
ERED:
1.

Defen
ndant’s Motion for Sum
mmary Judg
gment (Dkt 31) is GR
t.
RANTED in
n
part and DENIED in part. Count One is dismisse but all ot
a
D
C
ed
ther claims
surviv
ve.

DAT
TED: June 16, 2015

__________
__________
_____
___
B. L
Lynn Winm
mill
Chief Judge
ited
District Cou
urt
Uni States D

MEMORA
ANDUM DECI
ISION AND ORDER - 13
R