Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-95-06180/USCOURTS-ca10-95-06180-0/pdf.json

Parties Involved:
Jack L. Doan
Appellee
Seagate Technology, Inc.
Appellant

Document Text:

PUBLISH FILED 

United States Court of Appc::l1 

UNITED STATES COURT OF APPEALS Tenth Circuit 

TENTH CIRCUIT 

MAY 01 1996 

-----------------------PATR!CKnSHER 

Cler!; 

JACK L. DOAN, on behalf of himself 

and others similarly situated, 

Plaintiff- Appellee, 

vs. No. 95-6180 

SEAGATE TECHNOLOGY, INC., 

Defendant - Appellant. 

APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE WESTERN DISTRICT OF OKLAHOMA 

(D.C. No. CIV -93-121 0-R) 

Gary C. Pierson (Tony G. Puckett and Rochelle L. Huddleston with him on the brief), of 

Lytle Soule & Curlee, Oklahoma City, Oklahoma, for Defendant-Appellant. 

Mark Hammons of Hammons & Associates, Oklahoma City,.Oklahoma, for PlaintiffAppellee. 

Before BALDOCK, McWILLIAMS and KELLY, Circuit Judges. 

KELLY, Circuit Judge. 

Plaintiff-Appellee Jack L. Doan alleges that his employment with DefendantAppellant Seagate Technology, Inc. was terminated because of his age in violation of the 

• 

Appellate Case: 95-6180 Document: 01019276539 Date Filed: 05/01/1996 Page: 1 
Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. §§ 621-34, and Oklahoma 

public policy. 1 The case was tried to a jury, which returned a verdict in favor of the 

Plaintiff. Seagate filed a motion for judgment as a matter of law or a new trial, which was 

denied by the district court. This appeal followed. 

I. Background 

Seagate designs, manufactures and markets hard disk drives for computer systems. 

It has plants in 17 countries and over 30,000 employees worldwide. Seagate commenced 

operations in Oklahoma City on October 1, 1989, after purchasing an existing facility 

from another disk drive company. The Oklahoma City plant employed approximately 

2,000 people. 

In June 1991, Seagate's senior management determined that certain costcontainment measures would have to be taken to address an anticipated decline in profit 

margins. These measures included a company-wide reduction-in-force ("RIF"). The RIF 

was not undertaken as a desperate measure, but rather as a strategic business decision 

aimed at improving the company's position in the highly competitive hard disk drive 

market. 

Plaintiff concedes that the intervening case of List v. Anchor Paint Mauufacturin~ 

~' 910 P.2d 1011 (Okla. 1996), disallows his state law claim. In 1m, the Oklahoma Supreme 

Court held that Oklahoma does not recognize a wrongful discharge claim predicated on 

Oklahoma public policy where the plaintiff has a statutory cause of action. hL. at 1013. 

-2-

Appellate Case: 95-6180 Document: 01019276539 Date Filed: 05/01/1996 Page: 2 
t .. 

The initial RIF occurred in July 1991, with a second, smaller RIF in August 1991. 

Approximately 1,200 employees were laid off from Seagate nationwide, including fiftyfour from Oklahoma City. 

Mr. Doan was employed by Seagate at its Oklahoma City plant. Although he did 

not possess an engineering degree, his job title was Manufacturing Engineer. He was, 

however, primarily responsible for coordinating the shipment of products and computer 

test equipment to Seagate's facility in Singapore. Mr. Doan's immediate supervisor was 

David Howe, Manager of Manufacturing Engineering, who also supervised 25 other 

employees. Mr. Howe reported to Doug DeHaan, Director of Manufacturing 

Engineering, who supervised a total of seven managers, all of whom had a number of 

subordinate employees. 

In early July 1991, Mr. DeHaan was informed that a RIF would take place in midJuly. He met with his subordinate managers, including Mr. Howe, advised them of the 

RIF and explained the RIF selection criteria as performance, potential, and seniority, in 

that order. 

Mr. Howe selected Mr. Doan for the RIF. Mr. Howe testified that he selected Mr. 

Doan because of his poor performance in the areas of engineering skills, problem solving 

and communication. Mr. Howe informed Mr. DeHaan of his selection, and Mr. DeHaan 

gave final approval. 

After Mr. Doan was laid off, his position was eliminated. His former job duties 

-3-

• 

Appellate Case: 95-6180 Document: 01019276539 Date Filed: 05/01/1996 Page: 3 
were absorbed by the remaining project engineers, and no one was transferred into his 

former position or hired to take his place. 

II. Waiver 

As an initial matter, Mr. Doan contends that Seagate has waived its right to 

appellate review by failing to include, among other things, the motion or brief for 

judgment as a matter of law or a new trial. "When the record on appeal fails to include 

copies of the documents necessary to decide an issue on appeal, the Court of Appeals is 

unable to rule on that issue." United States v. Vasquez, 985 F.2d 491, 494 (lOth Cir. 

1993). Seagate did include the entire trial transcript, as well as the district court's order 

denying its motion for judgment as a matter of law, or in the alternative, for a new trial, 

and for remittitur. Because Seagate's appeal is based upon challenges to the evidence and 

to the sufficiency of the evidence, this is a sufficient record to allow appellate 

consideration ofthe issues raised. See lOth Cir. R. 10.1.1, 10.3. In any event, Seagate 

supplemented the record on appeal with the motion and brief, and we discern no prejudice 

to the appellees from this submission. 

III. Judgment As a Matter of Law 

Sea gate moved for judgment as a matter of law at the close of Plaintiffs case and 

again at the close of the evidence. The district court denied Sea gate's motion for 

-4-

Appellate Case: 95-6180 Document: 01019276539 Date Filed: 05/01/1996 Page: 4 
t 

judgment as a matter of law though it found Mr. Doan' s evidence "pretty thin." Seagate 

contends that it should have been granted judgment as a matter of law because Mr. Doan 

failed to present sufficient evidence to meet his burden of proving intentional age 

discrimination. We review the denial of a motion for judgment as a matter of law !k 

DQYQ. Considine v. Newspaper A~ency Corp., 43 F.3d 1349, 1363 (lOth Cir. 1994). We 

construe the evidence and inferences most favorably to the nonmoving party. I!L. 

Seagate concedes that Mr. Doan met his initial burden of proving a prima facie 

case under the McDonnell Dou2las standard. ~ McDonnell Dou2las Corp. v. Green, 

411 U.S. 792, 802 (1973); In2els v. Thiokol Corp., 42 F.3d 616, 621 (lOth Cir. 1994) 

(setting out the prima facie elements in the reduction-in-force context). However, the 

existence of a prima facie case does not necessarily preclude judgment as a matter of law 

against the Plaintiff. U In2els, 42 F.3d at 621-23. As we stated in Fallis v. Kerr-McGee 

~, 944 F.2d 743, 744 (lOth Cir. 1991): 

[A ]fter a full trial on the merits, the sequential analytical model adopted 

from McDonnell Dou~las ... drops out and we are left with the single 

overarching issue whether plaintiff adduced sufficient evidence to warrant a 

jury's determination that adverse employment action was taken against him 

on the basis of age. 

Seagate has advanced a legitimate, nondiscriminatory reason for its decision to lay off 

Mr. Doan, namely the company-wide reduction-in-force. The fact finder may only infer 

discrimination if Mr. Doan produces evidence that the Seagate's proffered explanation is 

pretextual and unworthy of credence. In2els, 42 F.3d at 621-22. 

- 5-

Appellate Case: 95-6180 Document: 01019276539 Date Filed: 05/01/1996 Page: 5 
t 

Mr. Doan attempted to prove discrimination by attacking the RIF as pretextual. 

Mr. Doan does not dispute the existence of a company-wide RIF, but he presented 

evidence that Sea gate was hiring both before and after the RIF, suggesting that Sea gate 

was not actually reducing the size of its workforce. Mr. Doan claimed that the RIF was 

merely a pretext for pruning away unwanted employees. Speculation, however, will not 

suffice for evidence. 

Mr. Doan's attempt to use Seagate's pre- and post-RIF hirings as evidence of 

pretext ignores the timing of the hirings. The uncontroverted testimony revealed that no 

one at Seagate's Oklahoma City plant learned of the RIF until three weeks before it 

occurred. The fact that Sea gate's managers were hiring before they learned of the RIF is 

irrelevant to proving that the RIF was pretextual. Accord Viola v. Phillips Medical Sys. 

ofNorth America, 42 F.3d 712, 718 (2d Cir. 1994) (employee's first adverse performance 

review occurred on the eve of a RIF, but this was not evidence of pretext because the 

supervisor was unaware of the impending RIF at the time of the review). One·person 

with a job title similar to Mr. Doan's was hired in July 1991, but that person was hired 

into a highly specialized job in robotics which Mr. Doan admitted was not comparable to 

his job and which he admitted he was not capable of performing. 

Mr. Doan's evidence of Seagate's post-RIF hirings fails to show pretext because 

the people hired were not similarly situated to him. The evidence reveals that Seagate did 

not hire anyone for two months after the RIF, and then after hiring a single 49-year-old 

-6-

Appellate Case: 95-6180 Document: 01019276539 Date Filed: 05/01/1996 Page: 6 
t 

for a job dissimilar to Mr. Doan's, did not hire anyone for another two months. Seagate 

did hire several people beginning in mid-November 1991, more than four months after 

the RIF, but the evidence reveals that no new Manufacturing Engineers were hired 

between November 1991 and December 1992. Most of the newly hired individuals were 

hired for the direct labor pool, which was not subject to the RIF. 2 The fact that a 

company is hiring accounting clerks shortly after reducing its engineering workforce does 

not indicate that the engineering RIF is pretextual. U Cone v. LoniWlont United Hosp. 

~, 14 F.3d 526, 532 (lOth Cir. 1994) ("To make a comparison demonstrating 

discrimination, the plaintiff must show that the employees were similarly situated."). 

Mr. Doan attempted to attack the RIF as pretextual by challenging its necessity. 

To that end, Mr. Doan presented much evidence tending to show Sea gate's financial 

health and profitability. However, as we have noted before, the wisdom of a RIF is not 

for a court or jury to decide. A RIF is a business decision, and "[t]he ADEA is not a 

vehicle for reviewing the propriety of business decisions." Faulkner v. Super Valu 

Stores. Inc., 3 F.3d 1419, 1426 (lOth Cir. 1993). 

Mr. Doan attempts to rely on Denison v. Swaco Geolograph Co., 941 F.2d 1416 

(lOth Cir. 1991), for the proposition that business judgment may be challenged by 

2 Seagate classified its employees as either "direct labor" or "indirect labor." 

Indirect labor included employees performing concept and design work, such as engineering. 

Direct labor included "hands on" type work, such as facilities maintenance. It was undisputed 

that only indirect labor employees were at risk during the July 1991 RIF. 

-7-

.. 

Appellate Case: 95-6180 Document: 01019276539 Date Filed: 05/01/1996 Page: 7 
t 

• financial evidence. In Denison, the company attempted to justify Plaintiffs termination 

based on sales figures indicating that Plaintiffs division was less profitable than another. 

The Plaintiff showed this explanation unworthy of credence with evidence that neither the 

Plaintiff nor his replacement was involved in sales, the sales figures were not truly 

comparative, the company had strong financial potential, and the company considered the . 

higher employment cost of older employees in deciding who to retain. The Plaintiff in 

Denison presented considerable evidence of pretext other than mere evidence of financial 

health. Denison, 941 F .2d at 1421. "' [T]his court will not second guess business 

decisions made by employers, in the absence of some evidence of impermissible 

motives."' Faulkner, 3 F.3d at 1427 (quoting Lucas v. Dover Corp .. Norris Div., 857 F.2d 

1397, 1403-04 {lOth Cir. 1988)). Financial evidence suggesting that a decision, in 

hindsight, may not have been prudent is not evidence of improper motive; the ADEA is 

not violated by erroneous or even illogical business judgment. U Sanchez v. Phillip 

Morris Inc., 992 F.2d 244, 247 (lOth Cir. 1993) (Title VII case). 

Mr. Doan also seeks to infer pretext from the lack of a formal RIF plan and 

instructions. However, it was undisputed that the RIF criteria were position elimination, 

performance, potential, and seniority, in that order. Further, the manner in which a 

company chooses to conduct a RIF is within the company's sound business discretion, 

and Mr. Doan has failed to adduce any evidence that the RIF criteria were a pretext for 

discriminatory motive. Q:. In2els, 42 F.3d at 623 (company may alter the rules it uses for 

-8-

Appellate Case: 95-6180 Document: 01019276539 Date Filed: 05/01/1996 Page: 8 
conducting a RIF). 

Mr. Doan contends that "potential" is a subjective criteria and that the use of 

subjective criteria creates an inference of discrimination. ~Burrus v. United Telephone 

~' 683 F.2d 339, 342 (lOth Cir.), cert. denied, 459 U.S. 1071 (1982). We find this 

contention unpersuasive. Even if "potential" is somewhat subjective, the use of 

subjective criteria does not suffice to prove intentional discrimination. Pitre v. Western 

Elec. Co .. Inc., 843 F.2d 1262, 1272 (lOth Cir. 1988). Future job potential is certainly 

something that a company might legitimately want to consider in its RIF decision. 

Indeed, Congress has recognized potential as a legitimate factor distinct from age; 

Congress enacted the ADEA to combat "the setting of arbitrary age limits regardless of 

potential for job performance." 29 U.S.C. § 62l(a)(2) (emphasis added). Mr. Doan failed 

to present any evidence that "potential," as interpreted by Seagate's managers, was 

correlated to age, and even if a correlation between age and potential exists, this would 

not preclude the use of potential as a selection criteria. ~Hazen Paper Co. v. Bi~~ins, 

507 u.s. 604, 611-12 (1993). 

Mr. Doan relies heavily on Seagate's 1992 salary forecast and a forced ranking 

document which was the precursor to the salary forecast as evidence of pretext; these 

documents were Mr. Doan's only evidence of specific discrimination against him. Mr. 

Doan was listed above five younger employees in both documents. Doan contends that 

the ranking was based on the same criteria used in the RIF and thus the employees at the 

-9-

Appellate Case: 95-6180 Document: 01019276539 Date Filed: 05/01/1996 Page: 9 
• 

bottom of the list should have been laid off first. However, this argument ignores the 

undisputed evidence that Mr. Howe's regular practice was to rank new employees at the 

bottom. Mr. Howe automatically placed new employees at the bottom because they had 

not been there long enough for him to properly evaluate their performance, and the 

uncontroverted evidence revealed that this had been his regular practice for years. Mr. 

Doan's evidence confmns this; the people below Mr. Doan on the list had all been 

employed by Seagate for less than six months. Mr. Doan was ranked last of the 

employees who were not new hires and had been last in prior years as well. 

In light of Mr. Howe's regular listing procedures, the fact that younger, newly 

hired engineers were listed below Mr. Doan on salary forecast documents is not evidence 

that he was selected for the RIF because of his age. This court addressed a similar 

situation in~ where all employees rated "4" or "5" were selected for a RIF but firstyear employees were not rated and thus were exempt. The Fallis court, reversing a jury 

verdict in favor of the Plaintiff, found this policy did not raise any inference of age 

discrimination, stating: 

[A]ge may have entered indirectly into the decision to terminate [the 

plaintiff], but plaintiff fails to establish that the decision was not controlled 

by other nondiscriminatory factors. Not evaluating first-year employees 

when there is no basis upon which to assess their performance does not 

suggest age discrimination. 

~, 944 F.2d at 745. Similarly, in this case Mr. Howe excluded new hires from the 

RIF because he had not had enough time to evaluate them. ~ liL. Because new hires 

- 10-

Appellate Case: 95-6180 Document: 01019276539 Date Filed: 05/01/1996 Page: 10 
were automatically placed at the bottom of the salary forecast, the fact that one of the 

newly hired employees below Mr. Doan was not selected for the RIF instead of Mr. Doan 

does not suggest age discrimination. 

Further, and perhaps more importantly, there was no evidence that the five 

employees below Mr. Doan on the list were similarly situated to him. While their job 

titles may have been similar, it was uncontroverted that the other five employees were 

degreed electrical engineers, which Mr. Doan was not. g: Rea v. Martin Marietta Corp., 

29 F.3d 1450, 1458 (lOth Cir. 1994) (lower-ranking younger employee was more 

qualified because he possessed a college degree which plaintiff did not have). Mr. 

Doan' s broad job title encompassed many different types of engineers, and a de greed 

electrical engineer is not similarly situated to an undegreed industrial engineer who 

coordinates shipping, even if both have the same job title. Mr. Doan failed to show that 

he was similarly situated to the younger employees not selected for the RIF, or that his 

selection was due to his age. 

Mr. Doan suggests that age discrimination can be inferred because a greater 

percentage of older workers were selected for the RIF while a greater percentage of 

younger people were hired afterwards. While statistical evidence may create an inference 

of discrimination, the evidence may be so flawed as to render it insufficient to raise a jury 

question. ~' 944 F .2d at 7 46. "Statistics taken in isolation are generally not probative 

of age discrimination." Jones v. Unisys Corp., 54 F.3d 624, 632 {lOth Cir. 1995). In this 

- 11 -

Appellate Case: 95-6180 Document: 01019276539 Date Filed: 05/01/1996 Page: 11 
• 

case, Mr. Doan's statistical evidence is flawed because it failed to compare similarly 

situated individuals and failed to eliminate nondiscriminatory reasons for the numerical 

disparities. Mr. Doan's statistics grouped employees together regardless of specialty or 

skill and ignored the fact that only the indirect labor force was at risk for the RIF while 

most of the new hires were direct labor. '"A plaintiffs statistical evidence must focus on 

eliminating nondiscriminatory explanations for the disparate treatment by showing 

disparate treatment between comparable individuals."' ~, 14 F.3d at 532 (quoting 

~, 944 F.2d at 746) (emphasis in original). Statistical evidence which fails to 

properly take into account nondiscriminatory explanations does not permit an inference of 

pretext. Rea v. Martin Marietta Corp., 29 F.3d 1450, 1456 (lOth Cir. 1994). 

After a careful review of the record in this case, we have determined that even in 

the light most favorable to him, Mr. Doan has failed to produce evidence sufficient to 

demonstrate pretext and to carry his burden of proving intentional age discrimination. 

Accordingly, we hold that the district court erred in denying Seagate's motion for 

judgment as a matter of law. Because we find that judgment as a matter of law should be 

granted in favor of the Defendant, we need not reach the other issues raised in this appeal. 

REVERSED and REMANDED for entry of judgment in accordance with this 

opinion. 

- 12-

Appellate Case: 95-6180 Document: 01019276539 Date Filed: 05/01/1996 Page: 12