PUBLISH

UNITED STATES COURT OF APPEALS

Filed 5/1/96

TENTH CIRCUIT

JACK L. DOAN, on behalf of himself

and others similarly situated,

Plaintiff - Appellee,

vs.

SEAGATE TECHNOLOGY, INC.,

Defendant - Appellant.

 

No. 95-6180

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF OKLAHOMA

(D.C. No. CIV-93-1210-R)

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

Lytle Soulé & 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
1 Plaintiff concedes that the intervening case of List v. Anchor Paint Manufacturing

Co., 910 P.2d 1011 (Okla. 1996), disallows his state law claim. In List, 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. Id. at 1013.

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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. 

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

were absorbed by the remaining project engineers, and no one was transferred into his
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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 (10th 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 of the issues raised. See 10th 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

Seagate moved for judgment as a matter of law at the close of Plaintiff’s case and

again at the close of the evidence. The district court denied Seagate’s motion for

judgment as a matter of law though it found Mr. Doan’s evidence “pretty thin.” Seagate
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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 de

novo. Considine v. Newspaper Agency Corp., 43 F.3d 1349, 1363 (10th Cir. 1994). We

construe the evidence and inferences most favorably to the nonmoving party. Id.

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

case under the McDonnell Douglas standard. See McDonnell Douglas Corp. v. Green,

411 U.S. 792, 802 (1973); Ingels v. Thiokol Corp., 42 F.3d 616, 621 (10th 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. Cf. Ingels, 42 F.3d at 621-23. As we stated in Fallis v. Kerr-McGee

Corp., 944 F.2d 743, 744 (10th Cir. 1991):

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

from McDonnell Douglas . . . 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. Ingels, 42 F.3d at 621-22.

Mr. Doan attempted to prove discrimination by attacking the RIF as pretextual. 
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Mr. Doan does not dispute the existence of a company-wide RIF, but he presented

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

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 Seagate’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.

of North 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

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

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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. Cf. Cone v. Longmont United Hosp.

Ass’n, 14 F.3d 526, 532 (10th 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 Seagate’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 (10th Cir. 1993). 

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

(10th Cir. 1991), for the proposition that business judgment may be challenged by

financial evidence. In Denison, the company attempted to justify Plaintiff’s termination

based on sales figures indicating that Plaintiff’s division was less profitable than another. 
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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 (10th 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. Cf. Sanchez v. Phillip

Morris Inc., 992 F.2d 244, 247 (10th 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. Cf. Ingels, 42 F.3d at 623 (company may alter the rules it uses for

conducting a RIF).

Mr. Doan contends that “potential” is a subjective criteria and that the use of
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subjective criteria creates an inference of discrimination. See Burrus v. United Telephone

Co., 683 F.2d 339, 342 (10th 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 (10th 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. § 621(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. See Hazen Paper Co. v. Biggins,

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

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
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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 confirms 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 Fallis 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.

Fallis, 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. See id. Because new hires

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
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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. Cf. Rea v. Martin Marietta Corp.,

29 F.3d 1450, 1458 (10th 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 degreed

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. Fallis, 944 F.2d at 746. “Statistics taken in isolation are generally not probative

of age discrimination.” Jones v. Unisys Corp., 54 F.3d 624, 632 (10th Cir. 1995). In this

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
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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 plaintiff’s statistical evidence must focus on

eliminating nondiscriminatory explanations for the disparate treatment by showing

disparate treatment between comparable individuals.’” Cone, 14 F.3d at 532 (quoting

Fallis, 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 (10th 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.