Maxine E. ACREY, Plaintiff-Appellee, v. AMERICAN SHEEP INDUSTRY ASSOCIATION, a Corporation, Defendant-Appellant

981 F.2d 1569, 1992 U.S. App. LEXIS 33783, 60 Empl. Prac. Dec. (CCH) 41,944, 60 Fair Empl. Prac. Cas. (BNA) 833, 1992 WL 384930

• Court: Court of Appeals for the Tenth Circuit
• Decided: December 29, 1992
• Docket: 91-1321
• Status: Published

Opinions

LOGAN, Circuit Judge.

Defendant American Sheep Industry Association (ASI) appeals from judgment entered following a jury verdict in favor of plaintiff Maxine E. Acrey in her action brought under the Age Discrimination in Employment Act (ADEA), 29 U.S.C. § 621 et seq. The jury found not only discrimination but willful violation of the ADEA. The award included $147,000 in front pay in lieu of reinstatement, $76,000 for willful violation, attorneys’ fees of $55,168, and interest. ASI appeals from the district court’s denial of its motion for judgment notwithstanding the verdict, or in the alternative, for new trial.

ASI argues on appeal that plaintiff did not produce sufficient evidence to meet her burden of proof in four respects: (1) to establish that she was satisfactorily performing her job, (2) to support a finding of constructive discharge, (3) to rebut ASI’s articulated nondiscriminatory business reasons for its handling of plaintiff, and (4) to support a finding of willfulness. ASI also asserts that the district court erred in allowing testimony from another former employee, in awarding front pay, and in not reducing the damages award for plaintiff’s failure to mitigate damages.

I

Plaintiff was hired in 1984 at the age of forty-five as operations manager for the American Sheep Producers Council (ASPC). She had had more than twenty years of accounting and administrative experience, including work as an auditor with a major CPA firm and as an assistant financial director for IT & T. II R. 36-37. Her responsibilities with ASPC included finance, accounting, building maintenance, benefits, personnel, and general operations. Early in her tenure with ASPC she computerized the manual bookkeeping system, working with the in-house programmer to develop the accounting procedures. II R. 38.

On January 24, 1989, ASPC voted to merge with the National Wool Growers Association (NWGA) to form ASI. The merger of the ASPC and NWGA necessitated many corporate changes. Among those were making personnel decisions, relocating the organization, relinquishing existing office space, complying with United States Department of Agriculture regulations, and merging the accounting records of the two organizations. Changing ASPs accounting method from a cash basis system to a more complex accrual accounting system was a major result of the merger. VII R. 120. Some of these merger activities, including finalizing the new accounting system, went on for several months.

Plaintiff resigned effective September 29, 1989. She was replaced shortly thereafter by a twenty-seven year old male, Paul Zulauf. Evidence at the trial focused principally upon whether plaintiff could satisfactorily perform the job she held after the merger, whether her termination was a constructive discharge, and, if so whether plaintiff rebutted the employer’s alleged nondiscriminatory business reasons for the termination. We discuss below the relevant evidence on these points that the jury could rely upon to support its verdict in favor of plaintiff.

ASI’s motion for judgment notwithstanding the verdict challenged the sufficiency of the evidence to support the verdict. The standard of review for denial of a motion for judgment notwithstanding the verdict requires us to “view the evidence most favorably to the non-moving party and give that party the benefit of all reasonable inferences to be drawn from the evidence.” Spulak v. K Mart Corp., 894 F.2d 1150, 1153 (10th Cir.1990). We must affirm denial of defendant’s motion if the record reveals sufficient evidence for the jury to have found in favor of plaintiff. Cooper v. Asplundh Tree Expert Co., 836 F.2d 1544, 1547 (10th Cir.1988). We were unable to evaluate the appeal satisfactorily on the basis of the appendices provided by the parties. Therefore, we obtained and read the entire transcript of the trial. See Fed.R.App.P. 10(e), 11(f). Record citations herein are to the trial transcript.

II

ASI challenges whether plaintiff made a prima facie case, contending she did not establish that she was satisfactorily performing her job at the time of her termination of employment. We have carefully examined the record and believe that a jury could conclude that plaintiff was performing satisfactorily before the merger and that any post-merger deficiencies were a consequence of her receiving a less than adequate opportunity during the transition period to become adept at her new and more complex job responsibilities.

Plaintiff’s three supervisors during her employment, Rita Kourlis (1984-86), Rodger Wasson (1986) and Eldon White (1987-89), all testified. Although Wasson and White presented testimony about plaintiff’s performance problems before the merger, White also indicated those performance deficiencies had been rectified. Ill R. 90. White, plaintiff’s immediate supervisor at the time of her alleged constructive discharge, and representatives from defendant’s independent accounting firm, Dol-linger, Smith & Co. (Dollinger firm), confirmed that plaintiff was properly performing her job before the merger, VII R. 106; that they were unaware of significant deficiencies, III R. 33, 43; and that plaintiff was needed to facilitate the merger. V R. 54.

Much of plaintiff’s evidence concerned her treatment during the months following the January 1989 merger vote, focusing on her exclusion from merger decisions, ASI’s failure to provide her with training on the new accounting system, and ASI’s communication in both words and deeds that her services were no longer needed. Plaintiff testified that she was excluded from pre-merger meetings; that she was told not to work with the Dollinger firm on the new accounting system; that information she needed to formulate the new budget was withheld from her; that her role in attending Board of Directors meetings was curtailed; that she received minimal training on the new Solomon computerized accounting system; and that White again began criticizing her work performance. II R. 54-65, 70, 76, 98; III R. 9.

ASI’s responsive evidence concerning plaintiffs treatment during the seven or eight months immediately preceding her alleged constructive discharge was somewhat inconsistent. Much of ASI’s evidence about plaintiffs performance consisted of testimony concerning a meeting in the middle of February 1989 in which plaintiffs performance was evaluated in her absence, and a second meeting in August 1989 attended by plaintiff, Wasson and White, in which they discussed plaintiffs alleged performance deficiencies. Despite plaintiffs satisfactory work record when the merger was approved, both her supervisor and Dol-linger firm representatives concluded in February 1989, only a few days after the merger, that plaintiff lacked the ability to assist in creating and utilizing the new and more complex accounting system developed as a consequence of the merger. Ill R. 37-38; V R. 77; VII R. 86-87. See also Y R. 44. White testified that the Dollinger firm objected to having plaintiff involved in the development of the new accounting system, despite his and Wasson’s insistence that she remain involved. V R. 41; VI R. 26-27. White further stated that plaintiff attended numerous meetings regarding the merger of the accounting functions. VI R. 8. But he also testified that as early as the February 1989 meeting he had determined that plaintiff lacked the ability to manage the creation of the new accounting system. VI R. 9. Plaintiff testified that White asked her to quit on at least two occasions, February 8 and April 12, 1989, stating that she was “too old ... and did not fit the image [ASI] wished to project.” II R. 55, 63, 81, 157.

Wasson testified that he depended upon the Dollinger firm to evaluate whether plaintiff had the ability to “carry out the new job.” VI R. 27. Larry Dollinger reported to Wasson that plaintiff lacked the vision to manage the new accounting system, and he continued to believe she was incapable. VI R. 26-27; VII R. 97. Paul Zulauf, a senior auditor with the Dollinger firm, testified that plaintiff lacked the ability to manage the Solomon system, which was to be the replacement software. Zu-lauf, who was apparently the principal individual charged with training ASI employees on the new system, see VII R. 134, testified that he did train plaintiff during the implementation of the new computer system, III R. 38-41, 52, but he was unable to identify that training specifically. He agrees she was not given training on the Solomon software system. Ill R. 58. Zu-lauf also admitted to meeting with White in August 1989, before plaintiffs termination, to discuss his being hired to replace plaintiff. Ill R. 29, 48.

Although the Dollinger firm representatives testified that they worked with plaintiff extensively, their billings to ASI reflected the ongoing training they provided to plaintiffs younger counterpart at NWGA, Sue Sharnas, but none for training plaintiff. VII R. 114.

We believe that from this evidence the jury could conclude plaintiff was performing satisfactorily before the merger. We also believe the jury could conclude that proper training to enable her to operate under the new accounting system was deliberately withheld from her during the transition period. The jury was entitled to infer that one reason for this was White’s desire to force plaintiff to quit or to have an excuse to fire her. The jury was entitled to infer that another reason may have been Zulauf’s interest in securing plaintiff’s job for himself. We conclude that sufficient evidence exists to support plaintiff’s burden to establish that she was able to perform her job at the time of her termination.

Ill

ASI also challenges whether plaintiff established constructive discharge. We have defined the standard for constructive discharge as whether the employer’s illegal discriminatory acts fostered a climate in the workplace that would compel a reasonable person to resign. Derr v. Gulf Oil Corp., 796 F.2d 340, 344 (10th Cir.1986).

Plaintiff was evaluated negatively immediately after the merger was approved. The jury could conclude she was treated as incapable and uneducable throughout the final months of her employment. As noted above, plaintiff testified that on at least two occasions White, her immediate supervisor, asked her to quit, citing her age and her “image.” Plaintiff testified that on August 22, 1989, Rodger Wasson asked her to resign and told her that “if I didn’t I would be fired.” Ill R. 9; II R. 94-95. White and Wasson denied these charges, but conflicting testimony is a matter for the jury to determine. It is clear from the record that Zulauf, charged with training plaintiff, wanted her job, and eventually got it. See III R. 29, 48, 63.

The jury could believe that by August 1989 plaintiff reasonably believed she was at risk of losing her job. Her supervisor had confronted her with a litany of performance shortcomings; long-standing job responsibilities were taken from her; and she received inadequate information and training to perform her new duties. ASI presented evidence that plaintiff was not performing her job satisfactorily by August 1989, but at a meeting that month she was discouraged from resigning. VI R. 10, 33-35. That meeting covered several alleged problems, but some could have stemmed from less than adequate training by ASI and the Dollinger firm in her more complex job responsibilities, and her inexperience operating the new computerized accounting system which apparently was not yet fully implemented. Plaintiff testified that although she tendered her resignation it was because she was “too tired” to fight. II R. 96. We conclude that plaintiff presented sufficient evidence to support the jury’s determination that she was constructively discharged.

IV

Once a plaintiff establishes a prima facie case, the burden of producing evidence shifts to the defendant employer to rebut plaintiff’s case by articulating legitimate nondiscriminatory reasons for the challenged employment action. Plaintiff, of course, carries the ultimate burden of persuasion to prove age was a determinative factor, and, if the employer presents nondiscriminatory reasons for the action, to show that the employer’s stated explanation is merely a pretext for discrimination. Cooper, 836 F.2d at 1547. See also Texas Dep’t of Community Affairs v. Burdine, 450 U.S. 248, 256, 101 S.Ct. 1089, 1095, 67 L.Ed.2d 207 (1981).

ASI argues that plaintiff did not successfully rebut its evidence of legitimate business reasons for denying plaintiff the right to continue in her position. We acknowledge the record presents a close case. The employer presented evidence of plaintiff’s problems with persons under her supervision, and principals in the Dollinger firm advised ASI that they thought plaintiff was incapable of managing the changeover to the new accounting system. But we think the jury is entitled to believe that management’s lack of confidence in plaintiff was in part based upon her age. There is support for this view in plaintiff’s testimony that White told her she was too old and did not fit the image the merged organization wanted to project. It is particularly notable that the negative evaluation of plaintiff’s post-merger job performance occurred so quickly after the approval of the merger. The evidence permitted a finding that management prematurely concluded plaintiff was not capable of functioning within the merged ASI organization, and consequently provided her no reasonable opportunity to succeed within that new entity. A jury could infer that defendant’s presumptions in this regard were based in part upon plaintiff’s age. All of the individuals with whom plaintiff worked at ASI and the Dollinger firm were substantially younger than she was. Dollinger, Zulauf and John Smith of the Dollinger firm; White, Wasson, Kourlis and Richard Wertheimer of ASPC; and Sharnas of NWGA, were all under age forty. II R. 34,152; VI R. 66; VII R. 167, 172. Beverly Fay contended she was forced to resign from ASPC in 1985 at the age of fifty-four, after approximately eight years of employment. This left plaintiff as the oldest member of the group of ASI managers with whom she interacted on a regular basis. Sharnas, plaintiffs younger counterpart at NWGA, apparently received training on the Solomon system and plaintiff did not.

The record contains sufficient evidence to permit the trier of fact to be persuaded plaintiff was discriminated against on the basis of her age.

V

Although we uphold the jury’s finding that age was a determinative factor in plaintiffs constructive discharge, we have a different view concerning the sufficiency of the evidence to support a finding of willfulness. A willful violation of the ADEA entitles a plaintiff to liquidated damages, 29 U.S.C. § 626(b). We have defined the standard for finding willful age discrimination as whether the fact-finder could conclude that the plaintiffs age was the predominant factor in the employer’s treatment. Cooper, 836 F.2d at 1551. Under that test, we are convinced here that the record does not contain sufficient evidence for the jury to have concluded defendant’s violation of the ADEA was willful, and we must vacate the $76,000 award for willfulness.

Clearly the Dollinger firm advised ASI that it considered plaintiff unable to handle the more complicated accounting system of the merged organizations. Some of this advice appears to have been based upon plaintiff’s lack of formal education in accounting. Dollinger, Smith, and Zulauf, of that firm, were all certified public accountants. They seemed to assume only a CPA could do the work after the merger. Their opinion may also have been based in part upon Zulauf’s desire to take over plaintiff’s job. These reasons, however, are not necessarily related to plaintiff’s age.

Further, the record contains evidence that plaintiff had poor interpersonal skills and strained relationships with her subordinates and co-workers. She had strained relations with White, her immediate supervisor, and with Wasson, who was above White in the hierarchy, at least some of which did not appear related to her age. In June 1989, plaintiff forged the signature of a co-worker in an effort to secure a small personal loan against her pension funds. Neither ASI nor the co-worker were placed at financial or other risk as a consequence of this forgery, and plaintiff repaid the borrowed funds. ASI took no disciplinary action against plaintiff because her services were needed during this time to implement the merger of ASPC and NWGA. V R. 54. Plaintiff’s supervisors at ASI were also unhappy with plaintiff for having misread the lease of the building ASPC occupied at the time of the merger; she told them it required sixty days notice to vacate instead of six months, thereby causing ASI to incur some unnecessary costs. See II R. 89-90.

Although we are reluctant to overturn a jury finding on a fact issue, we must conclude, based upon the record as a whole, that no reasonable jury could have found that age was the predominant motive in the constructive discharge of plaintiff.

VI

Defendant objects to the district court’s ruling allowing testimony by a former employee, Beverly Fay. Fay was not listed as a witness for plaintiff in the standard pretrial witness lists, but appeared in a supplemental list ASI received four days before trial as a possible rebuttal witness.

We review rulings as to the admissibility of evidence under an abuse of discretion standard. Agristor Leasing v. Meuli, 865 F.2d 1150, 1152 (10th Cir.1988). Fay’s testimony was very brief. As a rebuttal witness, the scope of her testimony was confined. After review of the record as a whole we cannot conclude that the probative value of this testimony was outweighed by any alleged prejudice to ASI. We hold, therefore, that the district court did not abuse its discretion in permitting Fay’s testimony.

VII

The final issue concerns reducing the damage award, specifically whether front pay was properly awarded in lieu of reinstatement and whether plaintiff exercised due diligence in mitigating her damages. We have held that reinstatement is the preferred remedy in ADEA cases, but that a plaintiff is entitled to front pay when reinstatement is not feasible. Spulak, 894 F.2d at 1157; Cooper, 836 F.2d at 1553. The parties agreed to permit the judge to make this determination. In explaining its reasons for awarding front pay the district court acknowledged defendant’s hostility toward plaintiff, and found that the relationship between the parties had been irreparably damaged. The record contains examples of sharply conflicting evidence about specific incidents reflecting on plaintiffs job performance and treatment. At best, these illustrate a poor working relationship between the parties; at worst, an absence of mutual trust. The district court’s decision that a productive and amicable working relationship between the parties was not feasible is supported by the record and hence not an abuse of discretion. See EEOC v. Prudential Fed. Sav. and Loan Ass’n, 763 F.2d 1166, 1172-73 (10th Cir.1985), cert. denied, 474 U.S. 946, 106 S.Ct. 312, 88 L.Ed.2d 289 (1985); EEOC v. Sandia Corp., 639 F.2d 600, 627 (10th Cir.1980).

Plaintiff does have an obligation to mitigate damages. The employer, however, carries the burden of showing plaintiff failed to exercise due diligence in mitigating any losses. Spulak, 894 F.2d at 1158. ASI did not establish that plaintiff’s efforts to mitigate her damages were unreasonable under the circumstances. The award of front pay in lieu of reinstatement was not clearly erroneous. See Sandia Corp., 639 F.2d at 627.

We therefore REVERSE that portion of the judgment awarding liquidated damages for a willful ADEA violation, and AFFIRM the remainder of the district court’s judgment.

AFFIRMED in part, REVERSED in part, and REMANDED for further proceedings consistent herewith.