Free Response in Opposition to Motion - District Court of Arizona - Arizona

EXHIBIT 3

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LITTLER MENDELSON"
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August 23, 2002

Dawn A. Noble Direct: 602.474.3611 Direct Fax: 602.957.1801 [email protected]

BY HAND DELIVERY
Maria Rojas

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Investigator
U.S. Equal Employment Opportunity Commission Phoenix District Office 3300 North Central Avenue, Suite 690 Phoenix, AZ 85008 Re: Connie E. Alms v. AdvancePCS EEOC Charge No. 350-A2-01814

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Dear Ms. Rojas: This letter is in response to the Charge of Discrimination, alleging age discrimination under the Age Discrimination in Employment Act of 1967 ("ADEA"), filed in your office by Connie Alms against AdvancePCS on April 22, 2002. Please be advised that Littler Mendelson represents AdvancePCS. Thus, we have undertaken an extensive investigation of the allegations made in Ms. Alms' Charge. In short, we found no support whatsoever for Ms. Alms' allegations; therefore, AdvancePCS denies that it engaged in age discrimination. Please also consider this letter as our notice of representation and direct all further correspondence and inquiries to my attention. Ms. Alms claims the Company laid her off on March 28,2002 from her position as a Senior Information Security Analyst because of her age. To the contrary, AdvancePCS laid off six employees in Ms. Alms' department during a reorganization. These reorganization efforts ultimately led to a Company-wide reduction in force of over 150 employees. Like many other positions, Ms. Alms' position was eliminated as part of a larger reorganization and downsizing. The decision to eliminate her position was not based on her age, 51. Therefore, AdvancePCS ardently denies that it discriminated against Ms. Alms based on her age. Company History AdvancePCS provides integrated pharmacy benefit management and certain clinical and formulary services in connection with its clients' prescription drug health benefit plans. AdvancePCS' clients include employers, insurance companies, HMOs, and other organizations that pay for health care products and services. Essentially, AdvancePCS acts as an automated, non-discretionary processor of requests for reimbursement from pharmacies
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Maria Rqjas August 23, 2002 Page 2

on behalf of various sponsors of prescription programs. AdvancePCS also assists plans with the management of their formularies and provides clinical programs designed to help lower overall drug costs for plan customers. AdvancePCS currently serves more than 75 million Americans, and manages approximately 525 million health care claims. AdvancePCS is an equal opportunity employer with clear policies prohibiting any form of discrimination against applicants for employment and employees. All employment decisions including hiring, compensation, discipline, terminations, and promotions are based on the qualifications and abilities of each individual, without regard to race, color, religion, national origin, sex, age or disability. The Company's Employee Handbook includes a policy prohibiting illegal discrimination. (Exhibit 1). Factual Background A. AdvancePCS's Reorganization

In March-April 2002, based on the general business climate and other economic factors, AdvancePCS decided to undergo a reorganization. That effort resulted in a significant reduction in force. The Company laid off approximately 150 employees throughout the United States. In the Information Security department, the Company eliminated six positions in the Scottsdale facility. The department went from eight to two employees. All department employees were given an opportunity to apply for other open positions in the Scottsdale facility and in facilities in other parts of the country. AdvancePCS selected employees to fill the two remaining positions based on experience, technical knowledge of multiple systems, production levels, performance evaluations, interpersonal skills, temperament, critical thinking skills, ability to work independently and cross-training experience. Age was not used as a criterion or even considered in eliminating job positions or in selecting employees for the available positions of Information Security Analyst. Finally, the employees whose jobs were eliminated in the reduction in force were offered a severance package. B. Ms. Alms* Employment History

AdvancePCS hired Ms. Alms on May 15, 2000 as a Senior Information Security Analyst, with a monthly base salary of $4,583.33. (Ex. 2, offer letter). Upon commencement of her employment, Ms. Alms received an Employee Handbook, among other documents, and signed acknowledgements of receipt for the documents she received. (Ex. 3, new hire checklist and acknowledgements). In January 2002, Ms. Alms was informed that six positions in her department were being transitioned to the Texas office and only two positions would remain in Scottsdale. Unfortunately, AdvancePCS was faced with the need to eliminate positions in a

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reorganization and the Information Security department was one of the first steps. Six of the eight positions in Ms. Alms' department were selected for elimination. At the time of the layoff, Ms. Alms' department had eight employees: five in the protected 40+ age category, 3 not in the protected age category. The following chart represents the employees in the department at the time of the layoff: Title Senior Info. Security Analyst Information Security Analyst Senior Info. Security Analyst Information Security Tech Information Security Analyst Senior Info. Security Analyst Senior Data Security Analyst Information Security Tech DOH 05/15/00 < 02/05/01.08/22/94 03/22/99 05/15/00 11/23/98 , 5/22/00 . Gender F F F F F £ M F Race Caucasian Caucasian Caucasian Caucasian Caucasian Black Hispanic Caucasian

Age
51 39 53 47 49 4£ 37 25

Review Score 5 Not available 3 5 3 5_ 4 5

01/04/99 ,

The Charging Party's information is noted in bold and the two employees selected for the remaining open positions in Scottsdale are noted in italics. In addition, the employee that is noted by underscore applied for and received a position in the Texas office. All three employees selected for positions (two in Scottsdale, one in Texas) had worked for the Company as long as Ms. Alms. The employee that Ms. Alms claims wrongfully received her position had worked for the Company 16 months longer than Ms. Alms. It also should be noted that one of the three employees who remained employed is nearly as old (46) as Ms. Alms. Of the eight employees in the Scottsdale facility, all applied for the two positions in that facility. Rick Wenban, Director of Information Security, conducted the interviews and selected the candidates. He informed Ms. Alms and the other applicants that he was looking for employees with the most experience on various platforms/systems and that he was looking for enthusiastic individuals who were excited by the challenge of the new, reorganized department. Ms. Alms was not selected for one of the two Scottsdale positions. The three individuals selected had high review scores, had been employed with the Company as long as Ms. Amis, had experience on multiple platforms/systems and had demonstrated

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enthusiasm, ability to work well with their peers and a willingness to conform to a new system. Experience was important, but interpersonal skills, temperament and critical thinking skills also were very important because in the new positions, the employees would be required to deal with employees who were often upset because their system was inoperable. The employees who took the new positions would have to remain calm and handle crisis situations on a regular basis, while doing so with tact and a bright and comforting attitude. In essence, the remaining positions were internal "customer service" positions requiring tactfulness and good interpersonal skills. A 25-year-old female was hired into the position of Senior Information Security Analyst due to her extensive knowledge of various platforms/systems and her impressive interpersonal skills. In filling the second position - Information Security Analyst -- the Company focused on selecting an individual with good communication skills, an even temperament, strong critical thinking skills, extensive and diverse knowledge of platforms/systems, and someone who would work well with the candidate selected for the Senior Analyst position. The Company selected a 37-year-old Hispanic male. For the third position (located in Texas), the Company selected a 46-year-old Black female. After Mr. Wenban made the selections, Gina Wise, supervisor, and Rick Gounaris, Vice President of IT Production Services, reviewed and agreed with the selections. The current Information Security team, located primarily in Texas, consists of six males and three females. One team member is 25, four team members are in their 30s, and four team members are in their 40s. On March 31, 2002, a Human Resources Representative met with Ms. Alms to perform an exit interview and inform her of the option of a severance package. (Ex. 4, Separation Process Report). Ms. Alms' last day of work was March 31, 2002. (Ex. 4). Ms. Alms* Age Discrimination Claim Fails as a Matter of Law Because She Cannot Establish a Prima Facie Case of Age Discrimination. Ms. Alms asserts in her Charge of Discrimination that she was laid off from her position as a Senior Information Security Analyst and she was replaced by a 25-year-old. The ADEA prohibits discrimination in employment against individuals who are at least forty (40) years of age. See 29 U.S.C. § 631 (a). To prove a prima facie case of age discrimination, a complainant must prove that she is 40 or over, she was qualified for or adequately performing the position in question and, despite being qualified, was adversely affected, and someone younger, with similar or lesser qualifications, received the position. See, e.g.. McDonnell Douglas Corp. v. Green. 411 U.S. 792 (1973): Texas Dept. of Community Affairs v. Burdine. 450 U.S. 248 (1981).

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Although Ms. Alms had been performing well in her previous position as a Senior Information Security Analyst, the individuals selected also had high performance scores and had been employed as long or longer than Ms. Alms. Additionally, the Company selected the most qualified candidates based on experience, technical knowledge of multiple systems, production levels, performance evaluations, interpersonal skills, temperament, critical thinking skills, ability to work independently and cross-training experience. In fact, the 25year-old female of whom Ms. Alms complains had been with the Company 16 months longer than Ms. Alms and had broader technical experience on a variety of systems. Even if Ms. Alms could set forth a prima facie case of age discrimination, which she cannot, AdvancePCS had a legitimate, non-discriminatory reason for her termination -- a reorganization and Company-wide reduction in force. Her position was eliminated for budgetary reasons. In addition, Ms. Alms' age was not a factor in determining whether her position would be eliminated. Three candidates from the Scottsdale group were given positions - two were not in the protected age category, one was in the protected age category. Thus, the Company has demonstrated a willingness to employ those in the protected age category as well as a commitment to hiring the most qualified candidates regardless of their ages. Clearly, the facts do not support a claim of discrimination based on age or any other grounds. Accordingly, as a matter of law, Ms. Alms' claim is without merit and AdvancePCS requests that her Charge be dismissed. AdvancePCS understands that it is never easy for an employee to be terminated during a reorganization or reduction in force. The decision to eliminate Ms. Alms' position and select other employees to fill the limited positions available was based exclusively on legitimate, non-discriminatory business reasons. AdvancePCS did not discriminate against Ms. Alms based on her age or in any manner whatsoever. Conclusion I trust that this information will suffice for your investigation. Please contact me if you have any additional questions.

)awn A. Noble
DAN

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Employment
Nature of Employment & At-Will Status
All employees of AdvancePCS and its subsidiaries, unless they have entered into a written employment agreement, are employees at-will. Offer letters do not constitute employment agreements. No manager, supervisor, or employee, of the Company has any authority to enter into any agreement for any specified period of time or to make any agreement for employment other than at will. Only the chairman of the board and CEO, David D. Halbert, has the authority to make any such agreement, and then only in writing. Employment is voluntarily entered into, and the employee is free to resign at-will at any time, with or without cause. Similarly, the Company may terminate the employment relationship at-will at any time, with or without notice or cause.

Equal Employment Opportunity
The Company provides equal employment opportunities to all employees and applicants for employment without regard to age (40 and over), race, color, national origin, religion, gender, pregnancy, sexual orientation, disability, veteran status or any characteristic protected by federal, state or local law where we operate. This policy applies to all employees and applicants for employment and in all phases of employment including hiring, placement, promotion, demotion, transfer, recruiting, advertising, treatment during employment, rates of pay and other forms of compensation, selection for training and termination of employment. If a request is made, the Company will make every effort to provide qualified disabled applicants and employees with reasonable accommodations necessary for performing essential functions of a job. Company Human Resources policies and affirmative actions plans are designed to help in the successful implementation of our equal employment opportunity policy. Members of management, assisted by our Human Resources area, are responsible for its implementation, but the help and cooperation of all employees are necessary to fulfill our Company commitment. If you have any questions or concerns about any type of discrimination in the workplace you are strongly encouraged to bring these issues to the attention of your immediate supervisor, Human Resources Manager, the Company's EEO Officer, Barbara Nichols at 480-314-8484, or the ECHO Program Advisory line toll-free at 1-866-5ADVPCS (1-866523-8727), immediately. Employees can raise concerns and make reports without fear of reprisal. The Company will not tolerate or allow any other employee to retaliate against an employee who has reported discrimination. Any employee found to be engaging in any type of unlawful discrimination would be subject to disciplinary action, up to and including termination of employment.

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