TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-23-00327-CV
Appellant, Orlando Lopez// Cross-Appellant, Texas Capital Bank
v.
Appellee, Texas Capital Bank// Cross-Appellee, Orlando Lopez
FROM THE 201ST DISTRICT COURT OF TRAVIS COUNTY NO. D-1-GN-21-005627, THE HONORABLE LAURIE EISERLOH, JUDGE PRESIDING
MEMORANDUM OPINION
Appellant Orlando Lopez appeals from the trial court’s grant of summary
judgment in favor of Texas Capital Bank on his age discrimination claim under the Texas
Commission on Human Rights Act. See Tex. Lab. Code § 21.051. Cross-Appellant Texas
Capital Bank appeals the trial court’s denial of its request for attorney’s fees. For the following
reasons, we affirm the final judgment.
BACKGROUND 1
In January 2000, Lopez began working as a branch services officer at Texas
Capital Bank (the Bank). He was subsequently promoted to manager and senior manager. As
senior manager, Lopez oversaw bank operations and personnel.
1 The facts are taken from the summary-judgment evidence. The Bank’s employees are governed by a code of conduct, violation of which
might subject an employee “to disciplinary action up to and including termination of
employment.” The code of conduct requires “honest and ethical conduct,” compliance with all
“applicable government laws, rules, and regulations,” and “accountability for compliance with
the code.” Lopez signed an acknowledgment that he had read, understood, and would comply
with the code of conduct.
In 2009, Lopez was investigated and written up for “inappropriate behavior,”
including unequal treatment of employees and failure to enforce bank policies uniformly. In
2018, Lopez was again investigated and written up for failures to follow operational and
regulatory policies, including by mishandling cash, and was given a “final warning,” that further
problems “will result in further disciplinary action, up to and including immediate termination of
employment.”
In January 2021, a branch employee reported that employees were improperly
altering deposit agreements. Following another investigation, the Bank terminated Lopez’s
employment along with that of another employee who had failed to follow proper banking
procedures. After Lopez’s termination, a fifty-one-year-old female was assigned to manage the
branch until the position was permanently filled a few months later, by a fifty-two-year-old male.
Lopez, aged sixty-four at the time of his termination, sued the Bank, alleging that
age was a determining or motivating factor in the decision to terminate his employment. The
Bank filed a no-evidence and traditional motion for summary judgment, attaching as evidence
affidavits from bank employees, the Bank’s code of conduct, Lopez’s acknowledgment of that
policy, formal warnings given to Lopez and documented in his employment file, documentation
of the 2021 investigation of Lopez, and responses obtained in discovery. Lopez filed a response
2 opposing the motion, attaching as evidence his own affidavit, a complaint filed with the state
employment commission, and discovery disclosures. The trial court signed a final order
(1) granting the Bank’s motion for summary judgment without specifying the grounds,
(2) denying the Bank’s request for attorney’s fees, and (3) dismissing the cause with prejudice.
This appeal followed.
ANALYSIS
In two issues, Lopez argues that the trial court erred in admitting summary-
judgment evidence over his hearsay objection, evidence without which he asserts the Bank
would not have been able to establish a legitimate, non-discriminatory basis for his termination,
and that the trial court erred in granting the Bank’s motion for summary judgment because he
raised a genuine issue of material fact regarding the reason for his termination.
Hearsay
In his first issue, Lopez argues the trial court erred in overruling his hearsay
objections to (1) paragraph 7 in the affidavit of Bank supervisor Roxanne Bishop and (2) the
entirety of Bishop’s notes from her investigation, which were attached to her affidavit as
Exhibit B-2, on the basis that they contained “inadmissible hearsay statements as to what other
employees allegedly said” and he urges the same objection on appeal.
We review a trial court’s evidentiary rulings for an abuse of discretion. U-Haul
Int’l, Inc. v. Waldrip, 380 S.W.3d 118, 132 (Tex. 2012). A trial court abuses its discretion when
it acts without regard for guiding rules or principles. Downer v. Aquamarine Operators, Inc.,
701 S.W.2d 238, 241–42 (Tex. 1985).
3 Hearsay is an out-of-court statement offered “in evidence to prove the truth of the
matter asserted.” Tex. R. Evid. 801(d). Hearsay is inadmissible unless it falls under some
exception provided by rule or statute. Tex. Evid. R. 802. If an out-of-court statement is offered
for a purpose other than to prove the truth of the matter asserted, it is not hearsay. McCraw
v. Maris, 828 S.W.2d 756, 757 (Tex. 1992).
Paragraph 7 of Bishop’s affidavit states that Bishop interviewed Lopez’s “team
members” regarding the allegation that employees had been improperly altering deposit
agreements and that the “investigation confirmed” that Lopez “had improperly and incorrectly
trained his staff with respect to bank policy.” Paragraph 7 does not contain an out-of-court oral
or written verbal expression by Lopez’s staff members. See Tex. R. Evid. 801. Because it did
not contain hearsay, the trial court did not abuse its discretion in overruling Lopez’s objection to
Paragraph 7 of Bishop’s affidavit.
Exhibit B-2 consists of typewritten notes documenting Bishop’s investigation of
reports that employees were improperly altering deposit agreements. The notes document her
meetings with Lopez as well as meetings with three other branch employees and conclude with
recommendations, including to terminate Lopez’s employment “for lack of confidence, lack of
oversight, lack of judgment,” and “not following banking processes and procedures.” The notes
contain summaries of statements by the employees, including their statements explaining in
detail how they performed their work. The Bank, however, did not offer the statements to prove
that employees worked in the way they asserted, but to show how Bishop’s investigation was
performed and the basis for her employment recommendations following the investigation.
Because the statements in B-2 were not offered for the truth of the matter asserted, they did not
constitute hearsay and the trial court did not abuse its discretion in admitting them. See id. R.
4 801(d) (defining hearsay); Austin v. Austin, No. 03-18-00678-CV, 2019 Tex. App. LEXIS 8255,
at *10 (Tex. App.—Austin Sep. 12, 2019, no pet.) (mem. op.) (concluding statements offered for
purpose other than proving truth of matter asserted in statements were not hearsay).
We overrule Lopez’s first issue on appeal.
Grant of Summary Judgment
In his second issue, Lopez challenges the trial court’s grant of the Bank’s motion
for summary judgment alleging he raised a genuine issue of material fact regarding the
discriminatory reason for his termination.
Standards of Review
We review the grant of summary judgment de novo. Wal-Mart Stores, Inc.
v. Xerox State & Local Sols., Inc., 663 S.W.3d 569, 576 (Tex. 2023). When the trial court does
not specify the grounds for its ruling, we will affirm the summary judgment if any of the grounds
on which judgment is sought are meritorious. Merriman v. XTO Energy, Inc., 407 S.W.3d 244,
248 (Tex. 2013). The reviewing court must take as true all evidence favorable to the nonmovant
and indulge every reasonable inference in the nonmovant’s favor. JLB Builders, L.L.C
v. Hernandez, 622 S.W.3d 860, 864 (Tex. 2021). When a party moves for both traditional and
no-evidence summary judgment, we consider the no-evidence motion first. KMS Retail Rowlett,
LP v. City of Rowlett, 593 S.W.3d 175, 181 (Tex. 2019).
To prevail in a traditional summary judgment, the movant must prove there is no
genuine issue as to any material fact and they are entitled to judgment as a matter of law. Tex.
R. Civ. P. 166a(c), Zive v. Sandberg, 644 S.W.3d 169, 173 (Tex. 2022). Under the no-evidence
standard for summary judgment, when a defendant’s motion states elements to which there is no
5 evidence, the trial court must grant the motion unless the non-movant produces summary
judgment evidence sufficient to raise a genuine issue of material fact as to those elements.
Tex. R. Civ. P. 166a(i); JLB Builders, 622 S.W.3d at 864.
Applicable Law
The Texas Commission on Human Rights Act (the Act) protects employees from
unlawful employment practices on account of the employee’s “race, color, disability, religion,
sex, national origin, or age.” Tex. Lab. Code § 21.051; see Texas Tech Univ. Health Scis. Ctr.-El
Paso v. Flores, 612 S.W.3d 299, 304 (Tex. 2020). The protections for discrimination based on
age apply to discrimination against an individual 40 years of age or older. Tex. Lab. Code
§ 21.101.
We look to federal law to interpret the Act’s provisions. AutoZone, Inc. v. Reyes,
272 S.W.3d 588, 592 (Tex. 2008). In a discrimination claim relying on circumstantial evidence,
Texas follows the burden-shifting framework the United States Supreme Court established in
McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973). Mission Consol. Indep. Sch. Dist.
v. Garcia, 372 S.W.3d 629, 634 (Tex. 2012). This framework requires that (1) the plaintiff
establish a prima facie case of discrimination, (2) the defendant then must rebut the presumption
by producing evidence of a legitimate, non-discriminatory reason for the action, and (3) the
plaintiff must then overcome the rebuttal evidence with evidence that the defendant’s reason is
pretextual. Flores, 612 S.W.3d at 305. “[T]he burden of persuasion remains at all times with the
employee.” Alamo Heights Indep. Sch. Dist. v. Clark, 544 S.W.3d 755, 782 (Tex. 2018).
“In an age-discrimination case, the plaintiff establishes a prima facie case with
evidence that she (1) was a member of the protected class (that is, 40 years of age or older),
6 (2) was qualified for the position at issue, (3) suffered a final, adverse employment action, and
(4) was either (a) replaced by someone significantly younger or (b) otherwise treated less
favorably than others who were similarly situated but outside the protected class.” Flores,
612 S.W.3d at 305 (citing Mission Consol., 372 S.W.3d at 632; Reyes, 272 S.W.3d at 592).
“Texas courts have reconciled [the McDonnell-Douglas burden-shifting]
framework with our summary judgment procedure by requiring an employer moving for
traditional summary judgment to establish as a matter of law a legitimate, nondiscriminatory
reason for its adverse employment action, at which point the burden shifts to the employee to
raise a fact issue regarding whether the employer’s reason was a pretext for discrimination.”
Haver v. Coats, 491 S.W.3d 877, 883 n.3 (Tex. App.—Houston [14th Dist.] 2016, no pet.)
(citing M.D. Anderson Hosp. & Tumor Inst. v. Willrich, 28 S.W.3d 22, 24 (Tex. 2000); Niu
v. Revcor Molded Prods. Co., 206 S.W.3d 723, 728 (Tex. App.—Fort Worth 2006, no pet.)).
Application
Lopez established a prima facie case for discrimination.
The Bank argues that Lopez failed to establish a prima facie case of
discrimination for two reasons: that (1) Lopez was not qualified for the position at issue and
(2) Lopez was not replaced by a significantly younger employee. Lopez asserts that his affidavit
detailing his past employment at the Bank and the age difference with his replacements was
sufficient to meet his burden to establish a prima facie case. We agree with Lopez.
Evidence of Qualification
The Fifth Circuit has held that “a plaintiff challenging his termination or demotion
can ordinarily establish a prima facie case of age discrimination by showing that he continued to
7 possess the necessary qualifications for his job at the time of the adverse action.” Bienkowski
v. American Airlines, Inc., 851 F.2d 1503, 1506 (5th Cir. 1988). “By this,” the court explained
“we mean that plaintiff had not suffered physical disability or loss of a necessary professional
license or some other occurrence that rendered him unfit for the position for which he
was hired.” Id. at 1506 n.3; see also Kaplan v. City of Sugar Land, 525 S.W.3d 297, 305
(Tex. App.—Houston [14th Dist.] 2017, no pet.) (explaining and following “the
Bienkowski standard”).
In his sworn affidavit, Lopez stated that he worked for the Bank for twenty years
and was given positive yearly reviews, salary increases and performance bonuses. The affidavit
evidence of Lisa Jacobs, a senior vice president at the Bank, established that Lopez began as a
branch services officer and was subsequently promoted to manager and senior manager.
Although Jacobs’s affidavit details multiple investigations and reprimands leading up to Lopez’s
termination, there was no evidence in the record of a status change or disability impacting
Lopez’s qualification for the position he held.
The Bank argues that Lopez was no longer qualified to serve as a senior manager
because of his disciplinary history, but evidence of poor performance reviews “does not prove a
lack of qualifications at the prima facie stage.” Berquist v. Washington Mut. Bank, 500 F.3d 344,
350–51 (5th Cir. 2007) (citing Medina v. Ramsey Steel Co., 238 F.3d 674, 681 (5th Cir. 2001);
Lindsey v. Prive Corp., 987 F.2d 324, 327 (5th Cir. 1993)); see also Bienkowski, 851 F.2d
at 1505 (“Placing a plaintiff’s ‘qualifications’ in issue at both the prima facie case and
pretext stages of a termination case is an unnecessary redundancy.”); Gold v. Exxon Corp.,
960 S.W.2d 378, 382 (Tex. App.—Houston [14th Dist.] 1998, no pet.) (“[T]he courts have
generally reserved questions of poor work performance for the second and third phases of the
8 employment discrimination burden-shifting analysis.”). We conclude that for the purpose of
establishing a prima facie case, Lopez demonstrated that he was qualified for his position.
Evidence of Replacement by Younger Employee
To establish a prima facie case of age discrimination, the plaintiff must
additionally prove replacement by “someone significantly younger.” Flores, 612 S.W.3d at 305.
An inference that an employment decision was based on discrimination cannot be made by the
replacement of a worker with another worker “insignificantly younger.” O’Connor
v. Consolidated Coin Caterers Corp., 517 U.S. 308, 313 (1996). A showing that the employee
was replaced with someone outside of the protected class, however, is not required. Id. at 312
(“The fact that one person in the protected class has lost out to another person in the protected
class is thus irrelevant, so long as he has lost out because of his age.”) (emphasis in original).
The Fifth Circuit has not settled on a “bright-line” rule allowing for an inference
of age discrimination to establish a prima facie case. Flanner v. Chase Inv. Servs. Corp.,
600 F. App’x 914, 919 (5th Cir. 2015). Nonetheless, in the federal courts, “[a]ge differences of
ten or more years have generally been held to be sufficiently substantial to meet the requirement
of the fourth part of age discrimination prima facie case.” Grosjean v. First Energy Corp.,
349 F.3d 332, 336 (6th Cir. 2003); see id. (listing cases); see also Hudgens v. University of Tex.
MD Anderson Cancer Ctr., 615 S.W.3d 634, 651 (Tex. App.—Houston [14th Dist.] 2020, no
pet.) (Poissant, J., concurring and dissenting) (citing cases holding that age difference of ten or
more years is generally considered significant in federal courts and advocating application of “a
zone of discretion in age-discrimination cases involving replacement by a person who is between
six and ten years younger than the plaintiff”).
9 The undisputed evidence was that Lopez’s temporary and permanent
replacements were 12 and 13 years younger than him. Considering the evidence in the light
most favorable to the nonmovant, the evidence was sufficient to establish a prima facie case
Lopez was replaced by someone “significantly younger.”
Legitimate, Nondiscriminatory Reason
Because Lopez established a prima facie case, the Bank was required to
“articulate a legitimate, non-discriminatory reason for its decision to terminate” his employment.
Berquist, 500 F.3d at 356. “Poor performance . . . is the quintessential legitimate,
non-discriminatory reason for termination[.]” Bertsch v. Overstock.com, 684 F.3d 1023, 1029
(10th Cir. 2012); see also Singleton v. YMCA of Greater Hous., 788 F. App’x 292, 292 (5th Cir.
2019) (“Assuming a prima facie case arguendo, the court further convincingly explained that the
employer had articulated a legitimate, nondiscriminatory reason for the termination, namely,
‘poor job performance[.]’”); Perez v. Region 20 Educ. Serv. Ctr., 307 F.3d 318, 326 (5th Cir.
2002) (“Poor work performance is a legitimate, non-discriminatory reason for discharge.”);
Texas Dep’t of Motor Vehicles v. Bustillos, 630 S.W.3d 316, 333 (Tex. App.—El Paso 2021,
no pet.) (holding violation of employer’s policy was legitimate, non-discriminatory reason
for termination).
The Bank’s undisputed summary judgment showed at least three documented
incidents of poor work performance by Lopez that led to disciplinary action. The evidence also
demonstrated that Lopez was given a written warning that failure to follow Bank policies and
procedures would result in additional disciplinary action, possibly to include termination. Lopez
does not dispute the Bank’s evidence that bank employees under his supervision violated Bank
10 policies and procedures, that he was warned he might be fired for such failures if they recurred,
and that following that warning, Bank employees under his supervision again failed to follow
bank procedures and policies.
This undisputed evidence of a legitimate, non-discriminatory reason for Lopez’s
firing is sufficient to shift the burden back to Lopez to demonstrate that the Bank’s reason is
pretextual. See Burton v. Freescale Semiconductor, Inc., 798 F.3d 222, 233 (5th Cir. 2015).
Pretext
To survive the Bank’s no-evidence motion for summary judgment, Lopez had to
produce more than a scintilla of evidence that the Bank’s reason for firing him was pretextual.
Tex. R. Civ. P. 166a(i); Kaplan, 525 S.W.3d at 308. A plaintiff must rebut each
nondiscriminatory reason articulated by the employer. Laxton v. Gap Inc., 333 F.3d 572, 578
(5th Cir. 2003). “An explanation is false or unworthy of credence if it is not the real reason for
the adverse employment action.” Id. An employee’s “own subjective belief is insufficient to
establish discriminatory intent.” Flores, 612 S.W.3d at 313.
To establish that the Bank’s stated reason for his termination was pretextual,
Lopez points to the affidavit he filed in response to the summary judgment motion in which he
asserted that the incidents leading to his firing were minor, that the mistakes leading to
disciplinary action were made by subordinates, that staff errors were attributable to a lack of
training, and that he had asked the Bank to provide more employee training. In a sworn
complaint, Lopez also asserted his belief that he was discriminated against based on his age.
Taking all these allegations as true, they would not constitute any evidence of
pretext—that the reasons given by the Bank for his termination were “not the real reason for the
11 adverse employment action.” Laxton, 333 F.3d at 578. Even if Lopez was correct about the
relative lack of gravity of his conduct and his level of culpability in the failures of the employees
he managed, Lopez offered no evidence beyond his subjective belief that his termination was
motivated by his age, which was insufficient to constitute evidence of discriminatory intent. See
Flores, 612 S.W.3d at 313.
Viewing the evidence in the light most favorable to Lopez, he failed to produce a
scintilla of evidence regarding pretext and therefore the trial court did not err in granting
summary judgment on behalf of the Bank. See Tex. R. Civ. P. 166a(i); JLB Builders,
622 S.W.3d at 864.
We overrule Lopez’s second issue on appeal.
Attorney’s Fees
In its sole cross-issue on appeal, the Bank argues that the trial court erred in
denying its request for attorney’s fees. The Bank asserts that because Lopez failed to provide
any evidence of discrimination, the case was groundless and without foundation and therefore
merited the award of attorney’s fees to them.
We review the district court’s denial of attorney’s fees in this case for an abuse of
discretion. See Texas Health & Human Servs. Comm’n v. Wolfe, No. 03-08-00413-CV,
2010 Tex. App. LEXIS 5566, at *6–7 (Tex. App.—Austin July 14, 2010, pet. denied) (mem. op.)
(“[W]e review relief awarded under Labor Code sections 21.125 and 21.259, including
declaratory judgments, injunctions, and attorney’s fees, for abuse of discretion.”)
In an age discrimination proceeding under the Texas Labor Code, the district
court “may allow the prevailing party, other than the commission, a reasonable attorney’s fee as
12 part of the costs.” Tex. Lab. Code § 21.259(a). If an employer is the prevailing party, a district
court may award attorney’s fees when the plaintiff’s claims were “frivolous, meritless, or
unreasonable, or the plaintiff continued to litigate after it became clear that his claim
was frivolous.” Elgaghil v. Tarrant Cnty. Junior Coll., 45 S.W.3d 133, 144–45 (Tex. App.—
Fort Worth 2000, pet. denied) (citing Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 421–
22, (1978)).
Here, although Lopez failed to produce evidence of the Bank’s discriminatory
motivation in firing him, he brought evidence sufficient to allow us to conclude he established a
prima facie of age discrimination. Given this, and applying the applicable deferential standard of
review, we cannot conclude that the trial court abused its discretion by declining to award
attorney’s fees to the Bank in this case. See United States v. Mississippi, 921 F.2d 604, 609 (5th
Cir. 1991) (considering whether a plaintiff established a prima facie case as important factor to
frivolity determination); Miskevitch v. 7-Eleven, Inc., No. 05-17-00099-CV, 2018 Tex. App.
LEXIS 5680, at *7 (Tex. App.—Dallas July 25, 2018, no pet.) (mem. op.) (upholding trial
court’s denial of employer’s request for fees and declining to engage in “‘post hoc reasoning’
leading to the conclusion that because a plaintiff did not prevail, her suit was necessarily
unreasonable or without foundation”).
We overrule the Bank’s cross-issue on appeal.
CONCLUSION
Having overruled the issues on appeal we affirm the trial court’s final judgment.
13 __________________________________________ Rosa Lopez Theofanis, Justice
Before Chief Justice Byrne, Justices Smith and Theofanis
Affirmed
Filed: May 23, 2024