UNITED STATES COURT OF APPEALS For the Fifth Circuit
No. 93-8628
ENRIQUE A. ARMENDARIZ,
Plaintiff-Appellee, Cross-Appellant,
VERSUS
THE PINKERTON TOBACCO COMPANY,
Defendant-Appellant, Cross Appellee.
Appeals from the United States District Court for the Western District of Texas
(June 28, 1995) Before JONES and DeMOSS, Circuit Judge and TRIMBLE1, District Judge. DeMOSS, Circuit Judge: In March 1991, Pinkerton Tobacco Company made a decision to
dissolve its Denver sales division. As a result, several field
sales personnel, including 53 year-old Enrique Armendariz, were
discharged. Pinkerton claimed that Armendariz was discharged
both because his job was being eliminated and the division he
worked in was being rearranged. Armendariz claimed that he was
1 District Judge for the Western District of Louisiana, sitting by designation. discharged because of his age, in violation of the Age
Discrimination in Employment Act (ADEA), 29 U.S.C. §§ 621 - 34
(West 1985).
At trial, the jury: (1) found that age was a determining
factor in Pinkerton's decision to discharge Armendariz; (2)
awarded $50,000 in back pay and wages; (3) declined to award
damages for lost future wages and benefits; and (4) found that
Pinkerton's decision to terminate Armendariz constituted willful
discrimination. After the verdict, Pinkerton renewed its
previous motion for judgment as a matter of law or in the
alternative for new trial. Armendariz moved to amend the
judgment, or in the alternative for new trial, challenging the
district court's failure to award other equitable relief, such as
front pay or reinstatement, and the district court's failure to
award liquidated damages based on the jury's willfulness finding.
The district court denied both motions and entered judgment for
$50,000 plus costs and attorney's fees. The district court
declined to award liquidated damages based on its judgment that
the jury's determination of willfulness was not supported by the
evidence.
Pinkerton Tobacco Company appeals from the jury findings
that its decision to discharge Enrique Armendariz amounted to
willful discrimination on the basis of age and from the district
court's denial of its motion for judgment as a matter of law.
Armendariz cross-appeals from the district court's failure to
award liquidated damages or other equitable relief. Because we
2 find insufficient evidence to support the jury's verdict, we
REVERSE and RENDER judgment in favor of Pinkerton that plaintiff
Armendariz take nothing.
I. BACKGROUND
Enrique Armendariz worked for Pinkerton Tobacco Company for
about eight and one-half years selling smokeless tobacco and pipe
tobacco products.2 In March 1991, at age 53, Armendariz was
discharged. Pinkerton claims that he was discharged because his
job was being eliminated. Armendariz claims he was discharged
because of his age.
Pinkerton was organized into five regions which were
subdivided into 29 divisions. Armendariz worked in the Denver
division which was in the Dallas region. In March 1991 there
were six field sales representatives in the Denver division:
Ardrey, age 35; Allison, age 34; Brown, age 43; Tucker, age 41;
Boyd, age 48 and Armendariz, age 53. Each salesperson serviced a
distinct geographic territory near his or her home. Armendariz
lived in El Paso and his territory was composed of a large
sparsely-populated area that included southwest Texas and
Southern New Mexico.
Whenever the cost of sales in a given territory exceeded 10
cents per dollar, Pinkerton would consider converting the direct
sales area into one serviced by an independent broker. It was
undisputed that in 1990, the Denver division's selling costs, and
2 Armendariz was employed in 1982 by Liggit & Myers, Pinkerton's predecessor. When Pinkerton split off from Liggit and Myers in 1984, it retained Armendariz' services.
3 Armendariz' selling costs in particular, far exceeded both the
national average for the company and the target maximum of 10
cents per dollar of sales.3 Therefore, Dallas regional manager
Darrell Peters asked Denver division manager Jerry Salentine to
suggest ways to reduce those costs. Salentine responded that
costs could not be significantly reduced because they were
attributable to the large geographic area and relatively sparse
population of the Denver division. After meeting with all Denver
division sales personnel and working individual routes with the
majority of the sales personnel, Peters recommended to Pinkerton
management that the Denver division be dissolved.
In March 1991 Pinkerton decided to dissolve the Denver
division. The plan called for elimination of the Division
manager's position, conversion of the two highest cost
territories (Armendariz' and Brown's) to service by independent
brokers and reassignment of the remaining four viable territories
to existing adjacent divisions. Thus, division manager Salentine
and salesmen Brown and Armendariz were discharged. The four
remaining salespeople were reassigned to managers in other
divisions but continued to work the same territories.
Independent brokers assumed all of Brown's territory and the vast
majority, both by geographic area and population, of Armendariz'
3 Selling costs nationwide in Pinkerton's 29 divisions averaged 8 cents per dollar of sales and 43 cents per pound of product sold. Selling costs in the Denver division averaged 17.9 cents per dollar of sales and $1.01 per pound of product sold. Armendariz selling costs were 32 cents per dollar of sales and $1.95 per pound of product sold.
4 territory. Five eastern counties from Armendariz' territory were
assumed by Jim Fowler, a 34 year-old Pinkerton salesman who had
been servicing adjacent parts of Texas for about one year.
Pinkerton did not consider reassigning Armendariz to a different
division in his existing territory and subsequently refused to
hire him for positions open in other territories.
II. STANDARD OF REVIEW
Pinkerton moved for judgment as a matter of law both before
and after the verdict. Therefore we review the district court's
denial of Pinkerton's motion for judgment as a matter of law
using the standard enunciated in Boeing Company v. Shipman, 411
F.2d 365, 374-75 (1969) (en banc). Under Boeing, judgment as a
matter of law is appropriate if the facts and inferences point so
strongly and overwhelmingly in favor of one party that a
reasonable jury could not have concluded that the ADEA was
violated. 411 F.2d at 374; Molnar v. Ebasco Constructors, Inc.,
986 F.2d 115, 117-18 (5th Cir. 1993); Little v. Republic Refining
Co., Ltd., 924 F.2d 93, 95 (5th Cir. 1991). A mere scintilla of
evidence is insufficient to present a question for the jury.
Boeing, 411 F.2d at 374. There must be a conflict in substantial
evidence to create a jury question. Id. at 375. Applying Boeing
to this case, the district court's judgment should be reversed
only if the facts and accompanying inferences would not permit
reasonable people to conclude that Pinkerton discharged
Armendariz because of his age.
III. ELEMENTS OF PROOF UNDER THE ADEA
5 The ADEA makes it "unlawful for an employer ... to discharge
any individual ... because of such individual's age." 29 U.S.C. §
623(a)(1). To prove a violation, a plaintiff must prove
intentional discrimination. Absent direct evidence, the
plaintiff can create a rebuttable presumption of discrimination
by presenting a prima facie case. Molnar, 986 F.2d at 118. A
plaintiff demonstrates a prima facie case by showing that: (1) he
was discharged; (2) he was qualified for the position; (3) he was
within the protected class; and (4) he was either (i) replaced by
someone outside the protected class, (ii) replaced by someone
younger, or (iii) otherwise discharged because of his age.
Bodenheimer v. PPG Indus., Inc., 5 F.3d 955, 957 (5th Cir. 1993).
Once a plaintiff demonstrates a prima facie case, the burden of
production shifts to the defendant to establish a legitimate,
nondiscriminatory reason for its decision. Id. Once defendant
meets this burden, the presumption dissolves and the plaintiff
must prove by a preponderance of the evidence that the employer's
articulated reason is but a pretext for age discrimination. St.
Mary's Honor Ctr. v. Hicks, 113 S. Ct. 2742, 2749 (1993). When,
as here, the case has been fully tried on the merits, the
adequacy of the showing at any particular stage of this
evidentiary process is unimportant. Molnar, 986 F. 2d at 118.
Instead, the Court must focus on whether a reasonable trier of
fact could have concluded as the jury did. Id. In an ADEA case,
the critical test is that the plaintiff must prove that age
"actually played a role in" and "had a determinative influence
6 on" the employer's decision-making process. Hazen Paper Co. v.
Biggins, 118 S. Ct. 1701, 1706 (1993). With these principles in
mind, we review the evidence presented in this case.
IV. THE EVIDENCE
Pinkerton argues that Armendariz' evidence neither
demonstrated a prima facie case of discrimination nor created a
jury issue related to whether Pinkerton's articulated reason for
Armendariz' discharge was in fact a pretext for unlawful
discrimination.4 We agree.
A. The Prima Facie Case
The first two elements of Armendariz' prima facie case ,
that he was within the protected age class and that he was
discharged, were not disputed. Further, there was substantial
evidence at trial from all sides that Armendariz had been a loyal
and competent employee who was qualified for the position that
was being eliminated. The parties disagree, however, about
whether this is a "replacement" or a "job elimination" case and,
consequently, about which version of the final prong of the prima
facie case applies. We cannot agree with Armendariz' contention
that this is a "replacement" case. It is true that the five most
4 Although our concern is not with the sufficiency of the evidence at any particular stage but with the sufficiency of the evidence in the case as a whole to establish intentional discrimination, the parties presented their evidence below and their arguments on appeal with reference to the McDonnell Douglas procedural framework. We therefore employ that format to respond to their various arguments. See, e.g., Elliot v. Group Medical & Surgical Svc., 714 F.2d 556 (5th Cir. 1983), cert. denied, 467 U.S. 1215 (1984) (analyzing the sufficiency of the evidence with reference to the McDonnell Douglas format).
7 eastern counties of Armendariz' territory were assumed by
existing Pinkerton sales representative Jim Fowler (34 years-old)
who had been servicing adjacent areas out of the Abilene division
for about one year. The evidence established, however, that the
vast majority of Armendariz' territory, both in terms of
geographic area and population, was assumed by an independent
broker.5 The fact that a small percentage of Armendariz' work
was assumed by another Pinkerton employee (at no increase in pay)
does not change the fact that Armendariz' position itself was
eliminated.
Pinkerton correctly characterizes Armendariz' discharge as a
"reduction in force" or "job elimination," in which case
Armendariz was required to present evidence that would allow the
jury to conclude that Pinkerton did not treat age as a neutral
factor in its decision as to whether to retain or relocate
Armendariz. Amburgey v. Cohart Refractories Corp., 936 F.2d
805, 812 (5th Cir. 1991). Armendariz responded to that burden by
alleging that Pinkerton did not relocate him or rehire him for
positions that subsequently became open in other territories.
Apparently this was offered both as to Armendariz prima facie
case and as circumstantial evidence that age, in addition to
purely economic factors, motivated Pinkerton's decision. The
evidence is not probative on either point. Armendariz did not
5 Armendariz did not present any evidence to substantiate his claim that the area assumed by Fowler included the most populous and therefore most profitable portion of his territory. Pinkerton produced evidence that the assumed area constituted only fourteen percent, by population, of Armendariz' territory.
8 allege or offer proof that there were openings, even in other
territories, at the time he was terminated. Pinkerton testified
that there were none, and it was undisputed that Pinkerton did
not relocate any field sales personnel when the Denver office
closed. Further, Pinkerton produced evidence that it has a
longstanding policy against relocating its field sales personnel
both because of the high costs involved and because they prefer
salesmen who have established relationships within their assigned
geographic territories. Armendariz offered no evidence that
Pinkerton had ever transferred a field sales representative,
either before or after Armendariz' termination. Finally, the
fact that Pinkerton did not offer Armendariz subsequently
available positions in other cities within the Dallas region is
not probative, at least in this case, on the issue of whether
Pinkerton discharged Armendariz because of his age.
B. Pinkerton's Legitimate Nondiscriminatory Reason
Pinkerton claimed at trial that it reluctantly discharged
Armendariz, whom it considered a competent salesman, as part of a
job elimination arising from dissolution of the Denver division.
Job elimination or office consolidation is a sufficient
nondiscriminatory reason for discharge under the ADEA.
Bodenheimer, 5 F.3d at 957-58; Hanchey v. Energas Co., 925 F.2d
96, 98 (5th Cir. 1990).
Pinkerton claimed that it traditionally considered
dissolving a direct sales area and converting it to independent
brokers when the selling cost per dollar exceeded 10 cents. At
9 the time that Armendariz was discharged the Denver division's
selling cost per dollar was 17.9 cents, significantly higher than
both the 10 cent maximum benchmark and the 8 cent company-wide
average. In addition, the Denver division's selling cost per
pound was $ 1.01, higher than all but one of the 29 divisions and
also substantially higher than the company-wide average of 43
cents per pound. Armendariz and Brown had the highest expenses
and the lowest sales volume of any of the six Denver division
salesmen, by a substantial margin.6 The bottom line, Pinkerton
states, was that the Denver division could be more economically
serviced.
Peters, the Dallas regional manager, cautioned Denver
division manager, Jerry Salentine, in 1990 that Denver would have
to find ways to reduce its selling costs. Salentine responded
that this could not be done. In the fall of 1990, at least two
meetings were held, with Armendariz in attendance, in which
Peters advised Denver division sales personnel that the high
costs were unacceptable. During that time Peters also worked
individual routes with the majority of the Denver division sales
representatives, including Armendariz, to determine whether costs
6 Selling costs for individual Denver division field sales representatives were as follows:
Salesperson Total Sales Sales Cost/Pound Sales Cost/Dollar Ardrey $866,306.00 $ .3226 $ .0551 Tucker $650,488.00 $ .3952 $ .0703 Boyd $522,035.00 $ .4873 $ .0868 Allison $230,970.00 $1.3230 $ .2255 Armendariz $166,594.00 $1.9577 $ .3279 Brown $100,439.00 $3.6908 $ .5996
10 could be reduced. Finally, in early 1991 Peters concluded that
Salentine was right and proposed to Pinkerton management the plan
that was eventually approved for reducing marketing costs in the
geographic area that made up the Denver division.
The plan proposed by Peters called for elimination of the
Denver division, conversion of the two highest cost territories,
Brown's and Armendariz', to independent broker sales and
reassignment of the remaining four territories to other
divisions. After the plan was approved by Peter's superiors in
Pinkerton management, Salentine, Brown and Armendariz were
terminated and the remaining four salesmen were reassigned to new
managers but continued servicing their home territories. By
converting Armendariz territory to independent broker service,
Pinkerton reduced the cost of selling in Armendariz' territory
from $ 55,000 in 1990 to $ 24,000 in the year before trial.
C. Evidence that Pinkerton's Reason was a Pretext for Unlawful Discrimination
Armendariz did not attack at trial, and does not attack on
appeal, the objective truth or accuracy of the financial figures
advanced by Pinkerton to justify its decision. To demonstrate that
Pinkerton's reason was a pretext for unlawful discrimination,
Armendariz offers evidence from which he argues the jury could have
found that: (1) Pinkerton's reason lacked veracity; and (2) that
unlawful discrimination was Pinkerton's real motivation.
Armendariz argues the jury could have found that Pinkerton's
asserted reason lacked veracity from evidence that: (1) Peters was
not candid about the fact Armendariz' job was in jeopardy when
11 asked by Armendariz in the fall of 1990; (2) Peters testimony that
Armendariz was eligible for rehire conflicted with the termination
report which indicated that Armendariz would not be considered for
rehire; and (3) Peters inability to testify at trial that Pinkerton
was loosing money on the Denver division as a whole or on
Armendariz' territory in particular. Armendariz relies on language
from Texas Department of Community Affairs v. Burdine, 101 S. Ct.
1089, 1095 (1981), which suggests that pretext can be established
merely "by showing that the employer's proffered explanation is
unworthy of credence."7 However as Armendariz has failed to
produce sufficient evidence from which the jury could disbelieve
the employer's stated reason, we need not reach the question of
whether Armendariz' construction of Burdine is correct.
In any event, whether Armendariz was warned that his job was
in jeopardy is immaterial in this case to a finding of age
discrimination. The ADEA does not prohibit termination without
warning. Further, Armendariz himself testified that he
participated in the two meetings in which Dallas regional manager
Peters expressed grave concern about the high costs of doing
business in the Denver division. Second, Peters testified at trial
7 By doing so, Armendariz has chosen to ignore the Supreme Court's disavowal of that quote in St. Mary's Honor Center v. Hicks, 113 S. Ct. 2742, 2753 (1993), which states: "we think the [Burdine] dictum at issue here must be regarded as an inadvertence, to the extent that it describes disproof of the defendant's reason as a totally independent, rather than an auxiliary, means of proving unlawful intent." As the Court made abundantly clear in St. Mary's, the employee at all times has the burden of proving, not only that the employer's stated reasons were false, but also that those reasons were a pretext for unlawful discrimination. St. Mary's, 113 S. Ct. at 2751-53. Otherwise, the ADEA would be converted into a statute prohibiting employers from firing people within the protected class without cause. See Burns v. Texas City Refining, 890 F.2d 747, 750 (5th Cir. 1989); Bienkowski v. American Airlines, Inc., 851 F.2d 1503, 1508 n.6 (5th Cir. 1988).
12 that Armendariz was qualified to be rehired and explained that the
intra-company report indicated otherwise because Pinkerton did not
anticipate hiring anyone else in the El Paso area. Finally,
Peters' inability to furnish profit and loss figures at trial is
likewise immaterial. Armendariz argues that profit and loss
evidence was necessary to establish the "business necessity" of
Pinkerton's decision to dissolve the Denver division. Armendariz
has apparently confused Title VII disparate impact case law with
his own ADEA claim. Surely the ADEA does not require that an
employer prove that it is in fact loosing money before it can take
a nondiscriminatory and legitimate course of action to make more.
Armendariz did not offer substantial evidence that Pinkerton's
asserted reason lacked veracity.
Armendariz next offers several equally unavailing lines of
evidence that Pinkerton's decision to discharge him was motivated
by impermissible factors. Ample time at trial and a considerable
portion of the plaintiff's closing argument was devoted to whether
Armendariz' high salary or fast-approaching eligibility for
retirement benefits motivated Pinkerton's decision. Even if proven
true, that would not be sufficient alone to support a finding of
age discrimination because the ADEA prohibits discrimination on the
basis of age, not salary or seniority. See Hazen Paper Co. v.
Biggins, 113 S. Ct. 1701, 1706-08 (1993); Amburgey v. Cohart
Refractories Corp., Inc., 936 F.2d 805, 813 (5th Cir. 1991).
Further, undisputed and strikingly clear evidence established that
Armendariz' salary (which exceeded that of the lowest paid
13 salesperson in the division by only ten percent) was not the cause
of the high costs associated with servicing Armendariz' territory.
In fact, even if Armendariz had been paid no salary at all, his
cost per dollar of sales would still have exceeded both the
national average for all Pinkerton divisions as well as Pinkerton's
10 cents per dollar of sales maximum figure for direct service
areas. Similarly, the undisputed evidence at trial was that
Armendariz was fully vested in Pinkerton's retirement plan when he
was discharged and that he became eligible for early retirement
benefits in December 1992.
Armendariz did not offer evidence that Pinkerton
systematically disfavored older employees. In fact he seemed to be
unaware at trial just what the ages of the discharged and retained
employees were. Armendariz' initial EEOC complaint (which was
returned with a finding of "no discrimination") claimed that the
two oldest sales representatives in the Denver region were selected
for termination while the retained employees were all younger. At
trial, however, it was established that Boyd, who was retained, was
in fact four years older than Brown, who was discharged. Of the
four salespeople retained and reassigned to other divisions, two
were younger than forty and two were older than forty. In
addition, Armendariz was under the impression that all of the
division managers in the Dallas region were under forty. In fact,
two of the four managers were over forty years of age. Finally,
Armendariz cited as evidence of age discrimination the fact that he
had not been offered Ardrey's position when that salesman resigned
14 several months after Armendariz' discharge. Aside from the fact
that Ardrey's territory was some distance away from Armendariz'
own, Ardrey was replaced by a salesman who, at age 48, was well
within the protected class.
Armendariz' case ultimately rests on his own subjective belief
and the belief of another Pinkerton employee, Sheila Ratliff, that
Armendariz had been discriminated against on the basis of age. We
have traditionally been very cautious about self-serving and
conclusory testimony based on a subjective belief that age
discrimination occurred. See, e.g., Little v. Republic Refining
Co., 924 F.2d 93, 96 (5th Cir. 1991). Armendariz own belief that
he was discriminated against is further undermined by his admission
that his assumptions about the ages of other employees hired and
fired were inaccurate and by his failure to rebut in any way
Pinkerton's demonstrated reason for his discharge. See Molnar v.
Ebasco Constructors, Inc., 986 F.2d 115, 119 (5th Cir. 1993)
(employee's subjective belief that age discrimination occurred is
insufficient to create jury issue when employer articulates an
adequate nondiscriminatory reason for the discharge).
Sheila Ratliff, age 51, is a Pinkerton field sales coordinator
who works with regional manager Peters, also age 51, on a daily
basis. She testified at trial by deposition summary only. Ratliff
testified that Peters had "programmed her for failure" and
repeatedly humiliated her on the job. As a result of the stress,
she began having problems with her memory. At that point Peters
began harassing her with comments about how she was "getting old"
15 and "losing her memory." Ratliff stated that she had filed
numerous complaints about Peters with Pinkerton's Human Resources
Department because she felt his behavior jeopardized her job. Such
remarks, if they were made, were "stray remarks" which were too
remote and vague to be probative of age discrimination against
Armendariz. See Waggoner v. City of Garland, 987 F.2d 1160, 1166
(5th Cir. 1993); Turner v. North Am. Rubber, Inc., 979 F.2d 55, 59
(5th Cir. 1992) (age related comments that are vague and remote in
time are not sufficient to establish age discrimination).
As to Armendariz, Ratliff expressed the opinion that Peters
had "blatantly discriminated" against Armendariz on the basis of
age by discharging him to avoid paying retirement benefits. As
discussed above, the ADEA does not provide a cause of action for
interference with retirement benefits that are based on seniority,
without evidence the decision was motivated by age. Hazen Paper,
113 S. Ct. at 1706-08. In any event, Ratliff admitted that her
opinion about Armendariz was "only conjecture" and stated that she
concurred with the decision to close the Denver office as well as
the decision to allow independent brokers to handle high-cost
territories in the division.
Neither Armendariz' nor Ratliff's subjective belief that
Armendariz had been discriminated against was sufficient to create
a jury issue as to whether Pinkerton's reason was a pretext for age
discrimination. Molnar, 986 F.2d at 119 (subjective belief that age
discrimination was basis of discharge is insufficient to make an
issue for the jury when employer articulates an adequate
16 nondiscriminatory reason); Little, 924 F.2d at 96 (subjective
belief of employee and co-worker that age motivated the employer's
action is of little value and can not be the basis of judicial
relief); Amburgey v. Cohart Refractories Corp., Inc. 936 F.2d 805,
814 n.40 (5th Cir. 1991); Elliot v. Group Medical & Surgical
Service, 714 F.2d 556, 567 (5th Cir. 1983) (when the employee does
not seriously dispute the objective truth of rational reasons
articulated by the employer, pretext can not be established by a
subjective belief that discrimination motivated the employer's
action), cert. denied, 476 U.S. 1215 (1984).
V. CONCLUSION
After a thorough review of the entire record, we conclude that
the jury's verdict was not supported by substantial evidence. The
jury could not have reasonably concluded that Armendariz met his
burden of establishing a violation of the ADEA. Armendariz did not
produce evidence sufficient to meet his prima facie burden of
showing that Pinkerton did not treat age neutrally in its decision
to dissolve the Denver division and eliminate his position.
Although he complains that Pinkerton did not offer him a transfer
to another Pinkerton territory, Armendariz did not produce evidence
that Pinkerton had relocated any other salesmen and Pinkerton
adduced evidence that it had not. Significantly, Armendariz did
not offer evidence that attacked the truth or accuracy of the
evidence presented by Pinkerton concerning its financial objective
of reducing the cost of sales in the ailing Denver division.
Basically, all Armendariz offered to rebut Pinkerton's articulated
17 reason was the subjective belief of a fellow employee, along with
his own, that unlawful age discrimination drove Pinkerton's
decision to discharge him. In the face of overwhelming evidence to
the contrary, that evidence is insufficient to support the jury's
verdict in his favor. Because we find the evidence insufficient to
support the jury's verdict, Armendariz' points on cross appeal
concerning damages are necessarily without merit. The district
court's judgment based on the jury finding is REVERSED and judgment
is RENDERED that the plaintiff take nothing.
wjl\opin\93-8628.opn ves 18