F I L E D United States Court of Appeals Tenth Circuit PUBLISH August 25, 2006 UNITED STATES CO URT O F APPEALS Elisabeth A. Shumaker Clerk of Court TENTH CIRCUIT
RO BERT CO RTEZ,
Plaintiff-Appellee,
v. No. 05-2169
W AL-M ART STORES, IN C.,
Defendant-Appellant.
A PPE AL FR OM T HE UNITED STATES DISTRICT COURT FOR T HE D ISTRICT OF NEW M EXICO (D .C . N o. C IV -03-1251-BB/LFG )
Submitted on the briefs: *
Charles R. Peifer, Lauren Keefe, Peifer, Hanson & M ullins, P.A., Albuquerque, New M exico, for Appellant.
Augustine M . Rodriguez, Rodriguez Law Firm, Albuquerque, New M exico, for Appellee.
Before H E N RY, BR ISC OE, and M U RPH Y, Circuit Judges.
* After examining the briefs and appellate record, this panel has determined unanimously to grant the parties’ request for a decision on the briefs without oral argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore ordered submitted without oral argument. M U RPH Y, Circuit Judge.
Plaintiff Robert Cortez sued defendant Sam’s C lub for discrimination in
violation of the Age Discrimination in Employment Act, 29 U.S.C. §§ 621-34
(ADEA), on account of the company’s failure to promote him to the position of
general manager. 1 During the trial, the district court twice denied Sam’s Club’s
motions for judgment as a matter of law under Rule 50 of the Federal Rules of
Civil Procedure, and the case went to the jury. The jury found that Sam’s Club
had violated the ADEA and awarded damages to Cortez. Sam’s Club challenges
the district court’s denial of its Rule 50 motions, arguing that Cortez failed to
prove that he was qualified for a promotion and also failed to establish that his
complaint was timely filed. Exercising our jurisdiction under 28 U.S.C. § 1291,
we affirm.
2 BACKGROUND
C ortez w orked for Sam’s Club from April 28, 1986, to April 29, 2003. O n
the day he resigned, he was 48 years old and had been an assistant manager of
1 Sam’s Club is a wholly-owned division of W al-M art, Inc., the named defendant in this action. Since the plaintiff worked for Sam’s Club, and the parties referred to the defendant throughout their briefs as Sam’s C lub, we will continue to do so here. 2 Since we are review ing a jury verdict, we must view the record on appeal in the light most favorable to Cortez, the prevailing party at trial, and give him the benefit of all reasonable inferences to be drawn from the evidence. See Abuan v. Level 3 Commc’ns, Inc., 353 F.3d 1158, 1164 (10th Cir. 2003).
-2- several Sam’s Club stores in Texas and New M exico. The highest level that he
reached in the company was the position of co-general manager of a store in
Puerto Rico, where he worked from 1996 to 1998. W hen Cortez returned to the
United States from his Puerto Rico assignment, he let it be known generally
throughout the company that he wished to be promoted to general manager. He
specifically asked Carlos Doubleday, the director of operations for Sam’s Club
stores in El Paso and Albuquerque, if any general manager positions were
available in his region. Doubleday told him there were not. Accordingly, Cortez
accepted a demotion and took a position as assistant manager of a store in
El Paso.
From 1998 until his resignation in 2003, Cortez continued to press for
promotions that never materialized. During that same time period, however, at
least three other Sam’s Club assistant managers were promoted to general
manager positions in Texas and New M exico. Two of those promoted were in
their early 30’s and the other was in his late 20’s. Cortez told several executives
in the company that he was concerned that he was being passed over because of
his age. However, only one, Stephanie Sallinger, the personnel manager, ever
followed up with him. W hen she did, she was under the apparently mistaken
impression that a promotion for Cortez was imminent.
On October 30, 2003, Cortez filed a complaint against Sam’s Club under
the ADEA alleging that despite his qualifications Sam’s Club consistently failed
-3- to promote him because of his age. 3 He also alleged that he had filed a charge of
discrimination with the Equal Employment Opportunity Commission (EEOC) on
or about June 11, 2003, and had received a right-to-sue letter on or about August
4, 2003, within 90 days of filing his district court complaint. In its answer, Sam’s
Club denied that it had discriminated against Cortez and it also denied C ortez’s
allegations concerning the timeliness of his complaint. Sam’s Club asserted
statute of limitations as one of its affirmative defenses.
The case was tried to a jury in February 2005. At trial, Cortez argued that
although he was qualified for the position of general manager, Sam’s Club
consistently denied him promotional opportunities in favor of younger employees,
many of whom he had helped to train. W ith respect to his qualifications, Cortez
argued that his long years of assistant managerial experience taught him the
requisite skills to be a general manager. He also argued that he had already
demonstrated his ability to be a general manager in his position as co-general
manager of the store in Puerto Rico. In addition, he adduced evidence of his
laudable role in opening a new store in Albuquerque in record time for the
company.
Cortez also adduced evidence of w hat he argued was D oubleday’s
discrim inatory motive for not promoting him to the general manager position. H e
3 Cortez also brought a Title VII race discrimination claim, but that claim was dismissed on summary judgment.
-4- testified that in November 1999 in a conversation with Doubleday and Charles
W right, an assistant manager, Doubleday compared him and W right to Troy
Aikman of the Dallas Cowboys. Doubleday told them that just like Troy Aikman
had reached a point in his career when it was time to step aside for a better,
younger quarterback, so too was it time for Cortez and W right to step aside in
favor of younger managers. W right corroborated this story with nearly identical
testimony concerning the “Aikman conversation.” D oubleday testified, however,
that age never factored into his decision when it came to filling the general
manager positions.
Sam’s Club argued that Cortez was not promoted not because of his age,
but because of the active performance “coaching” in his file, in accordance with
its “Coaching for Improvement” policy. According to the Club M anual,
“Coaching for Improvement occurs when an Associate’s behavior (job
performance or misconduct) fails to meet the Company’s expectations.” 4 Aplee.
App. at 179. The manual goes on to explain that coaching for job performance is
appropriate w hen an associate’s behavior “does not meet the reasonable
expectations/standards set for all Associates in the same or similar position.” Id.
at 183. M isconduct is defined as “behavior other than job performance, which
falls below stated expectations, or violates C ompany policy, does or may interfere
with safe, orderly, or efficient operations or which creates a hostile or offensive
4 Sam’s Club calls its employees associates.
-5- environment for Associates, Customers, and/or Vendors.” Id. The Coaching for
Improvement section of the Club M anual also has a subheading entitled “File
Retention/Active Period.” That section provides that “Coaching for Improvement
documentation must be maintained in the Associate’s personnel file for 12 months
under an ‘active’ status. Twelve months after the last Coaching for Improvement
session, if the behavior does not reoccur, the Coaching for Improvement
documentation becomes ‘inactive’.” Id. at 185.
Sam’s Club adduced evidence that Cortez had received a written coaching
on April 2, 2001, within one year of the promotion opportunities at issue, and it
argued that under company policy, employees w ith an active coaching in their file
are not eligible for promotion. This promotion eligibility aspect of the company’s
coaching policy is not mentioned in the Coaching for Improvement section of the
Club M anual. Nonetheless, Sam’s Club argued that it is a well-known, unwritten
policy, and Cortez admitted on cross examination that there was such a policy
when he was employed at Sam’s Club. Cortez argued, however, that the coaching
he received on April 2, 2001, was undeserved.
The written coaching itself, which was admitted into evidence, was issued
by Greg Garner, Cortez’s general manager. Garner’s stated reason for the
coaching was as follow s:
I am challenging Robert’s [Cortez’s] overall performance as a merchandise manager. There are certain duties Robert is responsible [sic]. Robert went on vacation and did not plan his business
-6- accordingly. Robert did not leave any notes to be carried out. Robert did not complete the alcohol [move] that was asked of him. Robert did not leave specific training plans for his new associates to do. Robert’s team leader ended up on vacation at the same time he was on vacation. Robert’s overall performance as a manager needs to improve. These issues and opportunities w ere discussed with Robert in mid-February.
Id. at 187. Cortez testified that he challenged this coaching when he received it
because it was issued while he was on vacation and he believed that Garner had
mischaracterized his performance. Specifically, Cortez testified that he had not
completed the alcohol move that Garner mentioned because the store had been
waiting for a layout from the home office. W ith respect to his vacation
overlapping with his team leader’s, Cortez testified that Garner had approved the
team leader’s vacation w ithout his knowledge after he had left for vacation. H e
further testified that he confronted Garner when he returned from vacation and
“told him that basically he should be doing the things that are needed to be done
in the club while I’m gone in my absence or move another one of the managers
over to my area to make sure that the area does not deteriorate.” Id. at 40.
Cortez also adduced evidence of Sam’s Club’s unwritten policy of coaching
employees “out the door.” He testified that Garner would encourage an employee
to quit, i.e., coach him out the door, “if he didn’t like the associate or the
associate did have a performance issue or for any other reason he wanted that
associate removed from the club.” Id. at 50. He testified that he believed Garner
was trying to coach him out the door in 2001 because his store was performing
-7- badly and Garner did not want to accept full responsibility. Cortez further
testified that Doubleday went along with Garner’s plan to coach him out the door
because Doubleday wanted to “wash his hands” of Cortez and his allegations of
discrimination. Id. at 76-77.
Garner testified that the “coaching out the door” policy was directed at
employees who consistently failed to meet expectations. Such employees, he
testified, are “either going to perform or they’re not going to perform, and
sometimes w e have to coach people out the door because they’re not successful in
our business.” Id. at 170. Garner also testified that the decision of whether to
coach an employee out the door was not always based on a supervisor’s subjective
criteria, but could be based on company expectations. He testified that he issued
the April 2, 2001, coaching because Cortez went on vacation without leaving any
specific instructions and left the alcohol display in an unpresentable condition.
At the close of evidence, the jury was instructed that in order to find for
Cortez on the age discrimination claim, it would have to find that Cortez proved
the following elements by a preponderance of the evidence: (1) that he was at
least 40 years of age at the time he was denied a promotion; (2) that he applied
for or sought an available promotion, and was qualified for that position; (3) that,
despite his qualifications, he was not promoted to the position; and (4) that his
age was a motivating factor or determining factor in Sam’s C lub’s decision not to
promote him. Sam’s Club argues that it is entitled to judgment as a matter of law
-8- because Cortez admitted that he was ineligible for promotion, and therefore failed
to meet the second element of his claim.
D ISC USSIO N
I. Standard of Review
“[W]e review de novo the district court’s denial of a motion for judgment
as a matter of law.” Anaeme v. Diagnostek, Inc., 164 F.3d 1275, 1278 (10th Cir.
1999). “[W]e do not weigh the evidence, evaluate the credibility of witnesses, or
substitute our conclusions for those of the jury. W e may reverse a jury
determination only if the evidence points but one way and is not susceptible to
any reasonable inferences supporting the nonmoving party.” Abuan v. Level 3
Commc’ns, Inc., 353 F.3d 1158, 1168 (10th Cir. 2003) (citation and quotation
omitted). W hether judgment as a matter of law is appropriate in a discrimination
case depends on a number of factors, including “the strength of the plaintiff’s
case, the probative value of the proof that the employer’s explanation is false, and
any other evidence that supports the employer’s case and that properly may be
considered on a motion for judgment as a matter of law.” Reeves v. Sanderson
Plumbing Prods. Inc., 530 U.S. 133, 148-49 (2000).
-9- II. Legal Framew ork
The ADEA makes it unlawful for an employer to “discriminate against any
individual with respect to his compensation, terms, conditions, or privileges of
employment, because of such individual’s age.” 29 U.S.C. § 623(a)(1).
In disparate treatment cases such as this, where the plaintiff alleges that he was
singled out for discrimination, “liability depends on whether the protected trait
(under the ADEA, age) actually motivated the employer’s decision. That is, the
plaintiff’s age must have actually played a role in the employer’s decisionmaking
process and had a determinative influence on the outcome.” Reeves, 530 U.S. at
141 (citation, quotation, and alteration omitted). The plaintiff need not present
direct evidence of discrimination, however, because we have held that the indirect
method of proving discrimination set forth in M cDonnell Douglas Corp. v. Green,
411 U.S. 792, 803-04 (1973), applies in ADEA cases. Ellis v. United Airlines,
Inc., 73 F.3d 999, 1004 (10th Cir. 1996); see Reeves, 530 U.S. at 142 (assuming
arguendo that the M cDonnell Douglas framew ork applies in ADEA cases). The
Supreme Court held in Reeves that “a plaintiff’s prima facie case, combined with
sufficient evidence to find that the employer’s asserted justification is false, may
permit [but does not require] the trier of fact to conclude that the employer
unlawfully discriminated.” 530 U.S. at 148.
W e have traditionally distinguished between employment decisions based
on objective criteria, which are generally immune to employer manipulation, and
-10- those based on subjective criteria, “which are particularly easy for an employer to
invent in an effort to sabotage a plaintiff’s prima facie case and mask
discrimination.” Ellis, 73 F.3d at 1006, n.8. Under this dichotomy, a plaintiff
who cannot meet objective hiring or promotion criteria cannot establish a prima
facie case of discrimination, and the employer is entitled to judgment as a matter
of law. See, e.g., York v. AT&T, 95 F.3d 948, 954 (10th Cir. 1996) (upholding
jury verdict for employer where plaintiff failed to meet education and experience
requirements); Ellis, 73 F.3d at 1006, n.8 (noting in dicta that the plaintiffs’
failure to meet weight limit requirement for new flight attendants w as fatal to
their prima facie case).
On the other hand, a plaintiff’s failure to meet subjective hiring or
promotion criteria is not automatically fatal to the plaintiff’s prima facie case.
EEOC v. Horizon/CM S Healthcare Corp., 220 F.3d 1184, 1193 (10th Cir. 2000);
Thom as v. Denny’s, Inc., 111 F.3d 1506, 1510 (10th Cir. 1997). In order to show
that he is qualified for the position sought, the plaintiff need only establish that he
does not suffer from “an absolute or relative lack of qualifications.” Horizon,
220 F.3d at 1194. The plaintiff can make such a showing by presenting credible
evidence that he possesses “the objective qualifications necessary to perform the
job at issue.” Id. The factfinder is free to consider the employer’s subjective
hiring or promotion criteria in the mix of plaintiff’s circumstantial evidence of
discrimination, but is not required to accept the employer’s version of its
-11- motivation. See, e.g., M cKnight v. GM Corp., 908 F.2d 104, 114 (7th Cir. 1990)
(“[T]he company’s lack of objective criteria for layoffs and recalls placed it at the
mercy of the jury, which w as free to disbelieve the company’s testimony.”).
III. The No-Coaching Q ualification
It is undisputed that Cortez received a written coaching on April 2, 2001,
and Cortez admitted that Sam’s Club has a policy with respect to promotions
whereby employees are not eligible for a promotion within one year of receiving a
written coaching. The question, therefore, is whether this no-coaching
qualification is a truly objective criterion, such that Cortez’s failure to establish it
defeated his prima facie case. Sam’s Club maintains that its no-coaching
qualification is an objective measure that forms part of its promotion criteria.
Since Cortez failed to establish its objective criteria, it argues that evidence of his
other qualifications and evidence purporting to show Sam’s Club’s bias was
irrelevant. W e disagree.
Sam’s Club cites M onfort, Inc. v. NLRB, 965 F.2d 1538 (10th Cir. 1992),
for the proposition that an employee’s disciplinary record is per se an objective
measure. In that case, M onfort appealed from an NLRB finding that it had
discriminated against former employees in rehiring based on union activity.
M onfort had developed hiring criteria that considered, among other factors, the
applicant’s disciplinary record. W e stated that “the specific [hiring] criteria
relating to . . . discipline were based on objective factors,” id. at 1541, and Sam’s
-12- Club relies on this language to support its argument. In that case, however, the
focus was not on the objective versus subjective nature of the employer’s hiring
criteria. The focus was on M onfort’s disparate treatment of former employees,
who had accessible disciplinary records, and new applicants, who did not. W e
concluded that the hiring procedure was skewed in favor of new applicants
because they were not evaluated based on a comparable level of information as
former-employee applicants. Id. at 1542. M oreover, we criticized M onfort’s
system of analyzing disciplinary records of new applicants, because it depended
“entirely on the subjective judgment of M onfort’s personnel director.” Id. at
1543. Therefore, our statement in that case that the specific hiring criteria at
issue were based on objective factors should not be interpreted as a broader
holding that employment criteria based on disciplinary history are per se
objective.
Certainly, as Sam’s Club argues, the question of whether an employee has
an active coaching in his file can be objectively answered. The problem,
however, is that the coaching itself can be premised on almost limitless subjective
bases, and in that regard it is only facially objective. Garner’s testimony that a
coaching is “[n]ot always” based on the subjective opinions of a supervisor,
Aplee. App. at 170, leads to the inevitable conclusion that, at least sometimes, it
is. M oreover, Cortez presented evidence that his coaching was based on Garner’s
-13- subjective opinion about his performance. Cortez argued at trial that the coaching
was undeserved and gave specific reasons why.
W e have long respected employers’ wide latitude “in setting job standards
and requirements and in deciding whether applicants meet those standards.”
Hickman v. Flood & Peterson Ins., Inc., 766 F.2d 422, 425 (10th Cir. 1985).
Thus, we have held that “[i]t is not the fact finder’s task to assess which of an
employer’s stipulated qualifications ought to be required of applicants for a
particular position.” York, 95 F.3d at 954. M oreover, a plaintiff cannot prove
that he was discriminated against simply because an employment decision was
based on subjective criteria. As one court aptly put it, however, “just as use of
[subjective] criteria does not establish discrimination, cloaking such criteria w ith
an appearance of objectivity does not immunize an employment decision from a
claim of discrimination.” Goosby v. Johnson & Johnson M ed., Inc., 228 F.3d
313, 321 (3rd Cir. 2000).
There are undoubtedly legitimate business reasons for the no-coaching
aspect of Sam’s Club’s promotion policy. Unlike truly objective criteria,
however, similar to those at issue in York and Ellis, the no-coaching qualification
can be used as a tool for unlaw ful discrimination. That Sam’s C lub chooses to
call the qualification an objective measure does not make it so. Therefore, we
conclude that Cortez’s admission that he received a coaching within one year of
the promotions at issue w as not fatal to his prima facie case, and the district court
-14- did not err by submitting the case to the jury. Under the standard set forth in
Reeves, the jury was entitled to infer discrimination based on Cortez’s prima facie
case, combined with sufficient evidence to find that Sam’s Club’s asserted
justification for not promoting him was false. 530 U.S. at 148.
IV. Sufficiency of the Evidence
W ithin this legal framew ork, we must now decide whether the evidence
supported the jury’s finding of discrimination, keeping in mind that “it is not the
function of the appeals court to reverse merely if it believes the evidence might
have supported a different verdict.” Kenworthy v. Conoco, Inc., 979 F.2d 1462,
1468 (10th Cir. 1992). Unless Sam’s Club can show that there is no evidentiary
basis to support the verdict, we will not disturb the jury’s determination, “even
where there is substantial contradictory evidence that could have supported an
opposite verdict.” Id. Sam’s Club has not made such a showing.
At trial, Cortez presented evidence that he had more than ten years of
assistant managerial experience at Sam’s Club and that he had earned accolades
for his leadership in opening a new store in Albuquerque during the same time
period that he was seeking a promotion. He was also the co-general manager of a
Sam’s C lub store in Puerto Rico for three years w here he shared responsibility
with the general manager for the entire store’s operations. He also testified that
he lost out on promotions even as he was receiving above-average performance
ratings. Sam’s Club challenged Cortez’s qualifications. It adduced evidence that
-15- Cortez had received declining performance evaluations and written coachings
during the relevant time period and that certain of Cortez’s managers had not
recommended him for promotion. Viewed in the light most favorable to Cortez,
however, we conclude that the evidence could have convinced a rational jury that
Cortez was objectively qualified to be a general manager. This evidence,
combined with the relatively young age of the individuals who received the
challenged promotions was sufficient to establish a prima facie case of
discrimination.
There was also sufficient evidence from which the jury could have inferred
that Cortez was not promoted for reasons other than the April 2, 2001, coaching.
Although both Cortez and Garner testified to Sam’s Club’s practice of not
promoting individuals with active coachings, the policy appears nowhere in the
company manual’s detailed description of the “Coaching For Improvement”
policy. M oreover, Sam’s Club points to no evidence that it ever told Cortez that
he was ineligible for promotion even though he approached several company
executives about what he perceived was D oubleday’s unjustified refusal to
promote him. Cortez testified that he believed the coaching was undeserved and
was part of a long line of coachings designed to coach him out the door. Finally,
both Cortez and Charles W right testified that Doubleday specifically told them
that they needed to step aside so that “younger” managers could take over. Aplee.
App. at 5, 102, 105. Given that Cortez established a prima facie case of
-16- discrimination, introduced enough evidence for the jury to reject Sam’s Club’s
explanation, and produced additional evidence of age-based animus, there was
sufficient evidence for the jury to find that Sam’s Club discriminated against him.
See Reeves, 530 U.S. at 153-54.
V. Timeliness of the Complaint
Finally, Sam’s Club contends that it is also entitled to judgment as a matter
of law because Cortez failed to establish at trial that his complaint was filed
within 90 days of receiving his right-to-sue letter from the EEOC. See 29 U.S.C.
§ 626(e). W e conclude, however, that Sam’s Club’s statute of limitations defense
has been waived. Sam’s C lub raised this issue as an affirmative defense in its
answer and again in its Rule 50(a) motion during trial, but nowhere in the pretrial
order did Sam’s Club contest the timeliness of Cortez’s complaint. W e w ere
faced with a similar situation in Youren v. Tintic School District, 343 F.3d 1296,
1304 (10th Cir. 2003). There, we held that the defendants’ assertion of the statute
of limitations defense in its answer and Rule 50(a) motion did not “overcome[]
the Pretrial O rder Rule, embodied in Rule 16(e) of the Federal Rules of Civil
Procedure.”
Rule 16(e) provides that the pretrial order “shall control the subsequent
course of the action unless modified by a subsequent order.” The purpose of the
rule is to “replace the old sporting theory of justice with a policy of putting the
cards on the table.” Wilson v. M uckala, 303 F.3d 1207, 1216 (10th Cir. 2002)
-17- (quotations omitted) (citing Clark v. Penn. R.R. Co., 328 F.2d 591, 594 (2d Cir.
1964)). At the pretrial conference attorneys are expected to fully and fairly
disclose “their views as to what the real issues of the trial will be.” Youren,
343 F.3d at 1304. Accordingly, we have held that issues not contained in the
resulting pretrial order w ere not part of the case before the district court. Id.;
Wilson, 303 F.3d at 1215 (“[C]laims, issues, defenses, or theories of damages not
included in the pretrial order are waived . . . .”). Since Sam’s C lub failed to
challenge the timeliness of Cortez’s complaint in the pretrial order, 5 we hold that
the issue has been waived and decline to reach the merits of this argument.
The judgment of the district court is AFFIRMED.
5 W e note that in the pre-trial order Sam’s Club did challenge the timeliness of Cortez’s EEOC complaint, but that was not sufficient to preserve the issue of whether his district court complaint was timely filed.
-18-