FILED
United States Court of Appeals Tenth Circuit
UNITED STATES CO URT O F APPEALS November 2, 2007
Elisabeth A. Shumaker
TENTH CIRCUIT Clerk of Court
DA RRELL R. HA RE,
Plaintiff-Appellant, No. 06-1270 v. District of Colorado DEN VER M ERCH AN DISE M AR T, (D.C. No. 04-CV-02416-PSF-M EH ) INC., DEN VER M ERCH ANDISE M ART EM PLOYERS, INC., and AM ERICA N REALTY INVESTO RS,
Defendants-Appellees.
OR D ER AND JUDGM ENT *
Before M U RPH Y, BROR BY, and M cCO NNELL, Circuit Judges.
Plaintiff-Appellant Darrell Hare was employed as the general manager of the Denver M erchandise M art, Inc. (“the M art”) for nearly thirty years. Beginning in 2001, his relationship with higher management began to break down. He was terminated from his position as general manager on December 29, 2003, at the age of 64. He brought this suit under the Age Discrimination in Employment Act
*
This order and judgment is not binding precedent, except under the doctrines of law of the case, res judicata, and collateral estoppel. The court generally disfavors the citation of orders and judgments; nevertheless, an order and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
(“ADEA”) and Colorado common law , alleging that his termination was the result of illegal age discrimination and that he was discharged in violation of public policy. Although the defendants provided substantial evidence that M r. Hare was legitimately terminated for business reasons, that is not the question for this Court on summary judgment. Employing the analytical structure of M cDonnell Douglas v. Green, 411 U.S. 792, 802 (1973), as we must, we conclude that M r. Hare has pointed to sufficient inconsistencies in the employer’s explanation for his termination, that the case must go to a jury. W e therefore reverse the district court’s grant of summary judgment on the A DEA claim, while affirming summary judgment of the wrongful discharge claim.
I. Background
The Denver M erchandise M art is a trade show venue that provides temporary space for events as well as permanent showrooms for the display of wholesale merchandise. It is a subsidiary of A merican Realty Investors (“ARI”), headquartered in D allas, Texas. M r. Hare was the general manager of the M art until his termination on December 29, 2003. As general manager, M r. Hare oversaw daily operations at the M art and paid employee wages and bonuses.
In 2001, ARI’s Asset M anager, John Cook, investigated the executive bonus plan in place at the M art and concluded that it produced excessive compensation for some company officials, including M r. Hare. M r. Cook found that although M r. Hare’s base salary ranged between $155,000 to $210,000 per
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year, M r. Hare’s total annual compensation including bonuses and other payments was w ell over $300,000. He reported these findings to Gene Phillips, advisor to the trust that is the controlling shareholder of ARI. ARI decided to implement a revised bonus plan for 2002. In December 2001, M r. Cook informed Roger Klein, the M art’s Controller, of the change and told him that bonus payments should not be released without prior authorization. In spite of this directive, M r. Hare issued, though he did not release, bonus checks in April 2002 for amounts that would have been due under the prior plan. M r. Hare informed M r. Cook by letter, with a legal memorandum attached to support his position, that he believed the bonus payments were earned and vested and therefore required to be paid under Colorado law. After considering the legal memorandum, M r. Cook directed first quarter bonuses to be paid to all employees except M r. Hare and M r. Klein. M r. Hare nonetheless released bonus checks to himself and M r. Klein contrary to M r. Cook’s directive. M r. Cook did not immediately respond, but rather made clear in a letter dated December 2, 2002 that executive bonuses would be eliminated as of January 2003 and a new bonus program put in place.
On December 3, 2003, M r. Hare and M r. Klein attended a meeting in Dallas with M r. Phillips, M r. Cook, and Karl Blaha to discuss the M art’s operations, the budget, and the new bonus program for 2003. At the meeting, M r. Phillips informed M r. Hare that there would be changes to the management agreement between ARI and the M art, and M r. Cook presented the proposed bonus plan for
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2003. M r. Hare was visibly upset by the discussion. M r. Phillips, himself 69 years old, then asked M r. Hare, “How old are you[?] 65, 66 years old[?]” App. 163. M r. Hare replied, “No.” Id. M r. Phillips asked, “W ell, how old are you?” to which M r. Hare responded that he was 63, and M r. Phillips asked “How long do you expect to continue to work?” Id. M r. Hare replied that he didn’t know, and that he hadn’t thought about retiring because his daughter was in college and he enjoyed working. M r. Phillips then commented that he would like M r. Hare to assist in finding a successor to fill his position as general manager, “someone younger to teach.” Id. Shortly thereafter M r. Hare and M r. Klein abruptly walked out on the meeting.
A few days later Oscar Cashwell, a top-level liaison to M r. Phillips, called M r. Hare and expressed his concern that M r. Hare had left the D ecember 3 meeting angrily. M r. Hare’s notes of the phone call record that M r. Cashwell started the conversation by noting, “[y]ou are starting to get old like I am,” and suggested that M r. Hare enter a consulting agreement with the M art while M r. Hare picked a replacement and trained him. Id. These comments by M r. Phillips and the follow-up phone call by M r. Cashwell were the only age-related remarks made by ARI’s management to M r. H are.
In January 2003, M r. Klein resigned from his position as Controller of the M art and M r. Hare resigned his corporate positions as President, Officer and Director of D enver M erchandise M art, Inc., Denver M erchandise M art Employers,
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Inc., and Valley Corporation. 1 M r. Cook and M r. Phillips testified that they believed that M r. H are would soon also resign his position as general manager. App. 267, 324. As a result, M r. Phillips directed the head of ARI’s human resources department to search for a replacement. Believing that the M art might soon be left without a general manager, M r. Cook began to take a more active role in management of the M art.
In July 2003, Lisa Fogg joined the M art’s management team to replace M r.
Klein. As the M art’s new Controller, M s. Fogg investigated the M art’s accounting and reported to M r. Cook that M r. Hare had taken payroll advances and made vacation payouts to himself that may have violated the M art’s employee policies. She also reported that many of the M art’s employees were intimidated by M r. Hare and that M r. Hare arrived for work late and left early. M r. Cook testified that although he had until mid-2003 considered M r. Hare to be a very good manager, he learned from M s. Fogg and his own investigation that in fact M r. Hare “did not exhibit positive management skills, and he did not take an active role in managing the M art . . . the actual manager of the M art operation for years had been Roger K lein. . . .” App. 159.
During the fall of 2003, M r. Cook, M r. Blaha, and M r. Phillips decided to terminate M r. Hare, and on December 28, 2003, M r. Blaha and ARI’s head of
1 Denver M erchandise M art Employers, Inc. is a separate entity that manages the M art’s payroll. The Valley Corporation holds the M art’s liquor license.
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hum an resources traveled to D enver to inform Mr. Hare of his termination. No one directly replaced M r. Hare, and the position of general manager was formally eliminated. M r. Cook assumed the responsibilities of general manager of the M art, which he performed during two days each week in D enver.
The reasons for the decision to terminate M r. Hare are disputed, as is the degree of involvement by M r. Phillips in the termination decision. M r. Hare claims that he was terminated because of his age and in retaliation for his decision to make bonus payments to himself and the M art’s employees in April 2002. M r. Hare also claims that M r. Phillips was the de facto final decision maker at ARI and was an active participant in the decision to terminate him. The Defendants respond that M r. Hare’s termination was based on his poor performance as general manager of the M art and (or possibly or) because M r. Cook determined that the position could be eliminated. The D efendants also claim that M r. Phillips held merely an advisory role in the decision to terminate M r. H are.
M r. Hare filed suit in the District Court of Colorado under the ADEA, 29 U.S.C. § 621, et seq., and for violation of Colorado common law prohibiting an employer from discharging an employee in violation of public policy. The district court granted summary judgment in favor of the Defendants on both claims. Hare v. Denver M erchandise M art, Inc., No. 04-cv-02416-PSF-DES, 2006 W L 1517730, at *13 (D. Colo. M ay 31, 2006). The district court found that
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M r. Hare had failed to establish a prima facie case under the ADEA and that even if he had satisfied the burden of demonstrating a prima facie case, he failed to provide evidence that the defendants’ reasons for firing him were pretextual. The district court granted summary judgment on M r. Hare’s common law wrongful discharge claim because he failed to provide evidence of a causal connection betw een his refusal to withhold bonuses and his termination twenty months later. W e reverse the district court’s grant of summary judgment on M r. Hare’s AD EA claim, and affirm summary judgment on his wrongful discharge claim.
II. ADEA Claim
Under the ADEA, an employer cannot “discharge any individual . . .
because of such individual's age.” 29 U.S.C. § 623(a)(1). Thus, a plaintiff suing under the ADEA must prove that the challenged employment action was motivated, at least in part, by his age. Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 141 (2000). The plaintiff may carry this burden either by presenting direct evidence of the employer's discriminatory intent or by presenting circumstantial evidence creating an inference of a discriminatory motive using the tripartite M cDonnell Douglas burden-shifting analysis. M cDonnell Douglas v. Green, 411 U.S. 792, 802 (1973); see Munoz v. St. M ary- Corwin Hosp., 221 F.3d 1160, 1165 (10th Cir. 2000) (applying the M cDonnell Douglas framew ork to an ADEA claim). M r. Hare provides only circumstantial evidence of alleged age discrimination.
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Under the M cDonnell Douglas burden-shifting framew ork, the plaintiff must first establish a prima facie case by showing that (1) he belonged to a protected class; (2) he was qualified for the position; (3) he was discharged; and (4) the position was not eliminated after his discharge. Kendrick v. Penske Transp. Servs., Inc., 220 F.3d 1220, 1229 (10th Cir. 2000). If the plaintiff cannot show that his position was not eliminated, the plaintiff may provide other evidence that the termination occurred under circumstances that give rise to an inference of unlawful discrimination. Plotke v. White, 405 F.3d 1092, 1100 (10th Cir. 2005). In this Circuit “the fourth element of a prim a facie case is a flexible one that can be satisfied differently in varying scenarios.” Id. at 1100.
If the plaintiff successfully makes a prima facie showing, the employer must articulate a legitimate, nondiscriminatory reason for the adverse employment action. Id. at 1099. The burden then shifts back to the employee to demonstrate that the proffered reasons are pretextual. Id. To survive summary judgment, M r. Hare need only show that there is a genuine issue of material fact as to whether he has satisfied each element of the M cDonnell Douglas framework.
1. Prima Facie Case
The defendants do not dispute that M r. Hare has satisfied the first three elements of the prima facie test, but contend that M r. Hare’s position was eliminated by his discharge and therefore that M r. Hare fails to satisfy the fourth elem ent. M r. H are claims that his position was not eliminated, and makes two
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independent arguments in support. First, he alleges that he was essentially replaced by M r. Cook. However, there is no evidence in the record showing that M r. Cook gave up his former duties to take over M r. Hare’s position as general manager. Second, M r. Hare claims that although the title of general manager was eliminated, the duties of the general manager were simply reassigned to other employees. This argument fails as a legal matter. To reassign the responsibilities of a position to a number of other individuals is to eliminate the position. Furr v. Seagate Tech., Inc., 82 F.3d 980, 988 (10th Cir. 1995) (“[T]he test for position elimination is not whether the responsibilities were still performed, but rather whether the responsibilities still constituted a single, distinct position.”). Therefore M r. Hare does not provide sufficient evidence to create a genuine issue of material fact as to whether his position was eliminated after his discharge.
M r. Hare can still satisfy the fourth element of the prima facie test and survive summary judgment if he can demonstrate that his termination occurred “under circumstances which give rise to an inference of unlawful discrimination.” Plotke, 405 F.3d at 1100 (internal quotation marks omitted). The plaintiff is required, however, to proffer evidence that his discharge did not result from the most common legitimate reasons that an employer might terminate an employee, including elimination of his position. Penske, 220 F.3d at 1226–27. W e have found that a plaintiff may establish a prima facie case even though his position w as elim inated w hen there is a general reduction in force and the plaintiff shows
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that he was treated less favorably than similarly situated employees, Ingels v. Thiokol Corp., 42 F.3d 616, 621 (10th Cir. 1994), or if the defendant does not claim that the plaintiff’s termination was based on elimination of his position. Plotke, 405 F.3d at 1100. A plaintiff can also show circumstances w hich give rise to an inference of unlawful discrimination by proffering
actions or remarks made by decisionmakers that could be viewed as reflecting a discriminatory animus, preferential treatment given to employees outside the protected class, in a corporate downsizing, the systematic transfer of a discharged employee's duties to other employees, or a pattern of recommending the plaintiff for positions for w hich she is not qualified [or over-qualified] and failure to surface plaintiff's name for positions for which she is well-qualified.
A plaintiff might also rely upon the fact that the defendant, following plaintiff's termination, continued to seek applicants to fill the position, or, more generally, upon the timing or sequence of events leading to plaintiff's termination.
Id. (emphasis added)(internal quotation marks and alterations omitted)
M r. Hare points to the age-related remarks made by M r. Phillips and M r.
Cashwell to show circumstances that give rise to an inference of discrimination. For actions or remarks to support such an inference of discriminatory intent, the plaintiff must demonstrate a nexus between the actions or remarks and the decision to terminate. Id. To show a nexus, the remarks must be made by someone involved in the decision to terminate the plaintiff. M r. Cook testified that M r. Phillips ultimately made the decision to terminate M r. Hare, showing a genuine issue of material fact as to w hether M r. Phillips was a primary decisionmaker in M r. Hare’s termination.
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Another element necessary to establish a nexus is temporal connection between the remarks and the decision to terminate. The district court did not find M r. Phillips’ statements at the D ecember 2002 meeting and M r. Cashwell’s follow up phone call to be sufficient evidence of discriminatory intent because they were made more than a year prior to M r. Hare’s termination. W e agree that because of the temporal distance, without more, the remarks would not be sufficient to support an inference of discrimination. 2 However, ARI began searching for a replacement for M r. Hare in January 2003, less than a month after the comments were made. App. 310. ARI had also suspended the bonus program that made up more than half of M r. Hare’s yearly compensation prior to the meeting, and did not establish a new bonus plan for 2003. The temporal nexus between the age-related remarks and these more immediate actions by ARI is relatively close and sufficient to support an inference of discriminatory motive that satisfies the burden of describing a prima facie case. See Butler v. City of Prairie Vill., KA, 172 F.3d 736, 749 (10th Cir. 1999) (finding that a decline in work evaluations leading up to discharge may contribute to an inference of discriminatory intent); M arx v. Schnuck M kts., Inc., 76 F.3d 324, 329 (10th Cir.
2 The Defendants cite cases in their brief that address the temporal proximity necessary to support the causation prong of a prima facie case on a motion to dismiss when bringing a retaliation claim. Although informative, those cases are not entirely persuasive here because M r. Hare need not show causation to establish a prima facie case under the ADEA. M r. Hare need only show that the circumstances of his termination give rise to an inference of discrimination.
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1996) (“[A] pattern of retaliatory conduct [that] begins soon after the filing of the FLSA complaint and only culminates later in actual discharge” is sufficient to support an inference of retaliatory motive); Ostrowski v. Atlantic M ut. Ins. Cos., 968 F.2d 171 (7th Cir. 1992) (stating that allegedly discriminatory statements may be sufficient to present a prima facie case under M cDonnell Douglas).
The burden on M r. Hare to establish a prima facie case under the M cDonnell Douglas framework is not onerous, Plotke, 405 F.3d at 1099, and the “nonmovant is only required to bring forth evidence tending to establish or show the material fact at issue.” Riggs v. AirTran Airways, Inc., 497 F.3d 1108, 1116 (10th Cir. 2007). W e acknowledge that a reasonable jury could interpret M r. Phillips’ retirement questions as a matter of succession planning rather than a reflection of age-related animus, as the district court did, but on summary judgment all reasonable inferences must be drawn in favor of the party opposing the motion. The burden of establishing a prima facie case is “one of production, not persuasion and involves no credibility assessment.” Plotke, 405 F.3d at 1101. W hatever may be the most persuasive interpretation, M r. Phillips’ age-related statements are evidence that he, as the de facto head of the ARI management chain of command, was interested in replacing M r. Hare with a younger employee and M r. Hare’s termination was motivated at least in part by age.
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2. Pretext
In response to M r. Hare’s prima facie case, the defendants successfully articulate a nondiscriminatory reason for M r. Hare’s termination. In fact, the testimony of M r. Phillips, M r. Cook, M r. Blaha, and M ichael Lane provides numerous legitimate reasons why M r. Hare was terminated, including that: M r. Hare’s responsibilities could be managed from Dallas at lower cost, he did not maximize the M art’s earning potential, he kept short working hours and was not actively involved in day-to-day operations at the M art, he displayed an insubordinate attitude towards ARI’s Dallas management, and he employed an intimidating and ineffective management style. Because the defendants have satisfied their burden under M cDonnell Douglas, M r. Hare “can avoid summary judgment only if he is able to show that a genuine dispute of material fact exists as to whether the defendant’s articulated reason[s] [are] pretextual.” M unoz v. St. M ary-Corwin Hosp., 221 F.3d 1160, 1165 (10th Cir. 2000) (internal quotes omitted).
“Pretext can be shown by such w eaknesses, implausibilities, inconsistencies, incoherencies, or contradictions in the employer’s proffered legitimate reasons for its action that a reasonable fact finder could rationally find them unw orthy of credence . . . .” Hardy v. S.F. Phosphates Ltd. Co., 185 F.3d 1076, 1080 (10th Cir. 1999) (internal quotes and alterations omitted). The inquiry goes to the subjective belief of those making the termination decision; “[t]he
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relevant inquiry is not 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.” Rivera v. City and County of Denver, 365 F.3d 912, 924–25 (10th Cir. 2004) (internal quotation marks and alteration omitted).
M r. Hare successfully shows pretext by pointing to an apparent contradiction in the testimony of those involved in the decision to terminate him. The following is an excerpt from M r. Blaha’s deposition regarding his understanding as to why M r. Hare was terminated:
Q: W hy was [M r. Hare] terminated?
A: Because we decided to eliminate the position, that the position was not necessary, that we could run the property out of–out of Dallas.
Q: That decision wasn’t based on the fact that M r. Hare was incompetent or anything, was it?
A: No.
Q: Had nothing to do with M r. Hare’s performance at all, did it?
...
A: No.
App. 277. Yet M r. Phillips states directly in his testimony that M r. Hare was terminated because of his performance. M r. Cook states in his deposition that M r. Hare was terminated because “[h]e wasn’t doing anything. He was completely noneffective in his position . . . he was not participating in the process of managing revenue to a higher achievement or managing expenses to a lower level.” App. 271. M r. Lane states that “he was going to be terminated because he wasn’t working.” A pp. 307. None of these statements can be squared with M r.
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Blaha’s testimony that M r. Hare was not terminated for any reason relating to his performance. A reasonable jury could conclude that the inconsistency in these statements are evidence that all of the reasons proffered are merely pretextual.
To be sure, individual participants in a collective termination decision might well provide a variety of reasons for the termination of an employee. The mere variety in the reasons would not alone undermine their credibility. Each individual may consider a different reason to be the essential factor in a decision to terminate. E.g., Villiarimo v. Aloha Island Air, Inc., 281 F.3d 1054, 1063 (9th Cir. 2002) (upholding grant of summary judgment to employer when employee was fired for two different, but consistent, reasons); Johnson v. Nordstrom, Inc., 260 F.3d 727, 733–34 (7th Cir. 2001) (finding no pretext when the employer's reasons for termination were neither inconsistent nor conflicting); Nidds v. Schindler Elevator Corp., 113 F.3d 912, 918 (9th Cir. 1997) (holding that different justifications for an adverse action are not sufficient to defeat summary judgment when those reasons are “not incompatible”). However, the reasons stated by the ARI management team were not only different but mutually inconsistent. Under the M cDonnell Douglas framework, contradictions of this sort are sufficient to establish pretext for purpose of summary judgment. Randle v. City of Aurora, 69 F.3d 441, 452 (10th Cir. 1995) (stating that the plaintiff need not provide direct evidence of discriminatory motive to survive summary judgment).
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Furthermore, the district court erroneously required M r. Hare to provide not only evidence that the defendants’ proffered reasons for discharging M r. Hare were pretextual, but additional evidence to show that age discrimination was the real reason, citing M acD onald v. E. Wyo. M ental Health Ctr., 941 F.2d 1115, 1122 (10th Cir. 1991) (“W hile the M acDonalds may have created a genuine issue as to whether the proffered reasons were the real reasons for their discharge, they have offered no credible evidence that the real reason was age discrimination.”). Hare, 2006 W L 1517730, at *13. M acDonald is no longer good law. The holding was implicitly overturned by this Court in Randle, 69 F.3d 441, which stated that discriminatory animus may be inferred from the simple showing of pretext. The rule was confirmed by the Supreme Court in Reeves v. Sanderson Plumbing Products, Inc., 530 U.S. 133, 147–49 (2000). The current standard for an age-discrimination claim to survive summary judgment does not necessarily require a plaintiff to provide any evidence that the real reason for his termination was age-related. The Court noted in Reeves that the showing of a prima facie case, “combined with sufficient evidence to find that the employer’s asserted justification is false . . . will [not] always be adequate” to avoid summary judgment. Id. at 148. Yet, the exceptions described in Reeves impose a heavy evidentiary burden on employers in showing an alternative source for the discrepancies in their reasons. Id.
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For instance, an employer would be entitled to judgment as a matter of law if the record conclusively revealed some other, nondiscriminatory reason for the employer’s decision, or if the plaintiff created only a weak issue of fact as to whether the employer’s reason w as untrue and there was abundant and uncontroverted independent evidence that no discrimination had occurred.
Id. (emphasis added). Because the Defendants are unable to provide “abundant and uncontroverted” evidence that no discrimination occurred, M r. Hare’s showing of inconsistencies in the D efendant’s reasons for discharging him are sufficient to satisfy his burden of production and survive summary judgment.
III. W rongful Discharge
M r. Hare also claims that he was wrongfully discharged in violation of public policy under Colorado common law . He argues that ARI’s decision not to permit him to pay out bonuses under the old plan to himself and M r. Klein was somehow illegal and therefore that it violated Colorado public policy to fire him for refusing to carry it out. To survive summary judgment on this claim, M r. Hare must show that (1) his employer directed him to perform an illegal act as part of his w ork related duties; (2) the act directed by his employer w ould violate a specific statute relating to public health, safety or welfare; (3) he was terminated as a result of refusing to perform the act directed; and (4) his employer was aware or reasonably should have been aware that M r. Hare’s refusal to comply with the directive was based on his reasonable belief that the act was illegal, contrary to clearly expressed statutory policy relating to M r. Hare’s duty
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as a citizen, or violative of M r. H are’s legal right or privilege as a worker. Roe v. Cheyenne M t. Conf. Resport, 124 F.3d 1221, 1235 (10th Cir. 1997) (citing M artin M arietta Corp. v. Lorenz, 823 P.2d 100, 109 (Colo. 1992)).
W e are skeptical that M r. Hare has established any of the elements necessary to describe a wrongful discharge claim under Colorado common law. Because failure to show a genuine dispute of material fact as to one of the elements is fatal to M r. Hare’s claim, we shall focus only on the issue of causation.
As the district court held, a reasonable jury could not find on this record that there was a causal connection between M r. Hare’s refusal to follow management’s directive not to pay bonuses and his termination twenty months later. The temporal distance between the two events, without more, cannot support an inference of causation. See Miller v. Auto. Club of N.M ., Inc., 420 F.3d 1098, 1121 (10th Cir. 2005) (finding a six month window between protected activity and adverse action insufficient to satisfy causal connection); Connor v. Schnuck M kts, Inc., 121 F.3d 1390, 1395 (10th Cir. 1997) (finding four month time lag between protected activity and termination insufficient by itself to justify an inference of causation). Although M r. Hare claims that documentation of the bonus dispute was reviewed at the time of his termination, nothing in the record supports such a conclusion. The head of ARI’s human resources, M r. Lane, only testifies that documentation of the dispute between M r. Hare and M r. Cook
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regarding bonuses w as copied to him as the head of human resources. M r. Phillips mentions M r. Hare’s “insubordinate attitude” as one of the reasons for M r. Hare’s termination, but there is no evidence to support the conclusion that M r. Phillips was specifically referring to the bonuses incident. App. 318. Therefore we affirm the grant of summary judgment for the defendants by the district court.
IV.
W e AFFIRM the grant of summary judgment on the wrongful discharge claim, REVERSE the grant of summary judgment on the ADEA claim, and R EM A N D for further proceedings consistent w ith this opinion.
Entered for the Court,
M ichael W . M cConnell
Circuit Judge