## F I L E D United States Court of Appeals Tenth Circuit 

### FEB 10 2000 

### PATRICK FISHER Clerk PUBLISH
UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

FREDERICK A. JONES, KATHERINE PRESTON, AND LILLIAN B. TURNER,

Plaintiffs - Appellants,

v. DENVER POST CORPORATION, a Colorado corporation,

Defendant - Appellee. No. 98-1458

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLORADO

(D. Ct. No. 96-S-2359)
Scot Melvin Peterson (Michael H. Berger with him onthe briefs), Waldbaum, Corn, Koff, Berger & Cohen, P.C., Denver, Colorado, appearing for PlaintiffsAppellants. Mary H. Stuart, Holme, Roberts & Owen, LLP, Denver, Colorado, appearing for Defendants-Appellees.

Before TACHA , McKAY , and ANDERSON , Circuit Judges.

TACHA , Circuit Judge.-2-

The district court granted summary judgment to defe ndants on plaintiffs’ claims of racial discrimination in employment. Pla intiffs filed a timely appeal and we exercise jurisdiction pursuant to 28 U.S.C. § 1291. We affirm in part and reverse in part.
I. “We review the district court’s grant of summary j udgment de novo, applying the same legal standard used by the district court.” Simms v. Oklahoma ex rel. Dep’t of Mental Health & Substance Abuse Servs. , 165 F.3d 1321, 1326 (10th Cir.), cert. denied , 120 S. Ct. 53 (1999). Summary judgment is approp riate “if the pleadings, depositions, answers to interrog atories, and admissions on file, together with the affidavits, if any, show that the re is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed. R. Civ. P. 56(c). “‘We view the eviden ce and draw any inferences in a light most favorable to the party opposing summary judgment, but that party must identify sufficient evidence which would requi re submission of the case to a jury.’” Aramburu v. Boeing Co. , 112 F.3d 1398, 1402 (10th Cir. 1997) (quoting Williams v. Rice , 983 F.2d 177, 179 (10th Cir. 1993)). In an emplo yment discrimination case, the trial court finding of int entional discrimination against a protected class is a finding of fact. EEOC v. Flasher Co. , 986 F.2d 1312, 1317 (10th Cir. 1992). We review this finding for clear error. Id

.1 Denesia Bey was also a plaintiff in the district court. Ms. Bey did not

appeal from the final judgment of that court and th erefore is not a party to this appeal. -3- II. The three plaintiffs allege that defendants’ employ ment practices violated 42 U.S.C. § 2000e-2(a)(1) (“Title VII”). 1 We review each plaintiff’s claims individually.
A. Frederick Jones 1. Background Frederick Jones, an African-American, began working at the Denver Post (“Post”) in 1989. Between 1989 and 1996, Jones worked primarily as a voluntary sales representative, processing phone requests forclassified advertisements. Beginning in 1992, Jones received letters from Postmanagement regarding his absenteeism. On August 11, 1992, Rhonda Canin o, one of Jones’s supervisors, issued him a written reprimand for ins ubordination concerning an extended lunch hour. On August 27, Canino advised Jones in writing that he had abused the company’s sick leave policy by taking an unauthorized medical absence. On January 3, 1995, Rosemary Reitz, another of Jon es’s supervisors, issued him a written warning for long-distance tele phone calls made on company time and at company expense. On September 20, 1995 , Jones received an2 In his First Amended Complaint, Jones raised addit ional claims that the

district court found unrelated to his discriminatio n charge. The court dismissed these claims for failure to exhaust, and Jones does not appeal the dismissal of these additional claims. -4- additional written warning from Nancy Allen, anothe r Post supervisor. Allen reprimanded Jones for using Post phones to conduct outside business. Allen cautioned Jones that future violations would resultin his immediate termination. From late 1995 to early 1996, Jones worked at the P ost’s fax desk, taking fax orders from advertisers. During this period, R eitz approached Jones about complaints regarding his work. Reitz advised Jones that if the situation at the desk did not improve, changes would be made. Aftera few months at the fax desk, Jones was sent back to the voluntary classif ied sales department. On April 22, 1996, Jones filed a discrimination charge with the Colorado Civil Rights Division (CCRD) and the Equal Employme nt Opportunity Commission (EEOC). On August 1, 1996, the EEOC iss ued Jones a Notice of Right to Sue. Jones’s discrimination charge allege d that the Post disciplined him differently than other employees and that the Post demoted him from the fax desk without warning. Based on the scope of the charge, the district court limited its jurisdiction to Jones’s claims of disparate treatme nt and discriminatory demotion based on race. 2 2. Analysis-5-

In Title VII cases, the inquiry is whether defendan t intentionally discriminated against plaintiff based on protected class characteristics. Flasher , 986 F.2d at 1317. A plaintiff may prove intentiona l discrimination “‘either directly by persuading the court that a discriminat ory reason more likely motivated the employer or indirectly by showing that the employer’s proffered explanation is unworthy of credence.’” EEOC v. Wiltel, Inc. , 81 F.3d 1508, 1513 (10th Cir. 1996) (quoting United States Postal Service v. Aikens , 460 U.S. 711, 716 (1983)) (second citation omitted). A personnel policy which is discriminatory on its face provides direct evidence of intentional discrimination.
See Trans World Airlines, Inc. v. Thurston , 469 U.S. 111, 121-22 (1985). Since Jones offers no evidence of “an existing policy whi ch itself constitutes discrimination,” Ramsey v. City & County of Denver , 907 F.2d 1004, 1008 (10th Cir. 1990), his claim rests on indirect evidence o f discrimination. In Title VII cases based on indirect evidence, plai ntiff has the initial burden of establishing a prima facie case. McDonnell Douglas Corp. v. Green , 411 U.S. 792, 802 (1973). If plaintiff does so, then defend ant must “articulate some legitimate, nondiscriminatory reason” for the challenged personnel action. Id

. Plaintiff then bears the ultimate burden of demonst rating that defendant’s stated reason is in fact a pretext for unlawful discrimination. Id . at 804. The district court found that Jones failed to estab lish a prima facie case of-6-

disparate treatment regarding his discipline by the Post. We agree. A prima facie case of disparate discipline may be establish ed if the plaintiff proves by a preponderance of the evidence that (1) the plaintif f is a racial minority, (2) the plaintiff was disciplined by the employer, and (3) the employer imposed the discipline under circumstances giving rise to an in ference of racial discrimination. Cf. Texas Dep’t of Community Affairs v. Burdine , 450 U.S. 248, 253 (1981) (articulating prima facie case for discriminatory t reatment in context of failure to promote claim); id. , at 254 n.6 (The prima facie “standard is not infl exible, as ‘[t]he facts necessarily will vary in Title VII cas es, and the specification above of the prima facie proof required from respondent is n ot necessarily applicable in every respect in differing factual situations.”) (quoting McDonnell Douglas , 411 U.S. at 802 n.13). One of the ways this third pron g may be met, and the method chosen by Jones here, is by attempting to show thatthe employer treated similarly situated employees differently. In the instant case, Jones contends that Rhonda Can ino took orders for pastries from her husband’s business during busines s hours, but the Post did not discipline her for this alleged conduct. Since the Post reprimanded Jones for using Post phones to conduct his outside business, Jones claims disparate treatment. However, the comparison Jones makes between himself and Canino is not legally relevant. Canino was one of Jones’s supervisors and therefore cannot-7-

be deemed similarly situated in a disciplinary matt er such as this one. Jones points to no other individual who was disciplined d ifferently. Thus, the district court correctly granted defendants’ motion for summ ary judgment on this count. Jones also contends that his transfer from the fax desk back to voluntary sales constituted a discriminatory demotion. To es tablish a prima facie case of discriminatory demotion, plaintiff must show (1) th at he was within a protected group, (2) adversely affected by defendant’s employ ment decision, (3) qualified for the position at issue, Hooks v. Diamond Crystal Specialty Foods, Inc. , 997 F.2d 793, 799 (10th Cir. 1993), overruled on other grounds by Buchanan v. Sherrill , 51 F.3d 227, 229 (10th Cir. 1995), and (4) that t he job from which he was demoted was not eliminated, Perry v. Woodward , Nos. 97-2343, 98-2003, 1999 WL 1256340, at *13 (10th Cir. Dec. 20, 1999). The district court did not evaluate Jones’s prima f acie case under the standard outlined above. Instead, the judge focuse d on Jones’s lack of evidence concerning similarly situated non-African-American employees. We therefore assume without deciding that Jones established a pr ima facie case, and the burden shifted to the Post to articulate a legitimate, non discriminatory reason for returning him to voluntary sales. At this stage , defendant need only “explain its actions against the plaintiff in terms that are notfacially prohibited by Title VII.” Flasher , 986 F.2d at 1317. Jones had a long history of pr oblems at the Post: he-8-

received both verbal and written warnings and was d isciplined for various workplace violations. In addition, there were spec ific complaints about his performance at the fax desk. Thus, on this record, the Post has met its burden. Jones bears the ultimate burden of demonstrating th at defendant’s proffered reasons for his demotion were pretextual. The district court concluded that the evidence as a whole was insufficient to create a ge nuine issue of material fact regarding pretext. We agree. Jones’s replacement at the fax desk apparently was passed over for another position at the Post. Base d on this singular objective fact, Jones offers his personal belief that the replaceme nt was less qualified than he was for the fax position. “It is the manager’s per ception of the employee’s performance that is relevant, not plaintiff’s subje ctive evaluation of his own relative performance.” Furr v. Seagate Tech., Inc. , 82 F.3d 980, 988 (10th Cir. 1996). Based on documented workplace violations an d specific complaints, a Post manager returned Jones to voluntary sales. We find no evidence of pretextual behavior and thus affirm the district co urt’s grant of summary judgment on Jones’s discriminatory demotion claim.
B. Katherine Preston 1. Background Katherine Preston, an African-American, began worki ng full-time at the Post in December 1995 as a voluntary sales representative. In February and May-9-

of 1996, Preston applied for a promotion to the rea l estate contract desk. On both occasions, the Post selected another employee for t he position. On May 29, 1996, Preston filed a discrimination charge with the CCRD and the EEOC. On August 1, 1996, the EEOC issued Preston a Notice of Right to Sue. In the discrimination charge, she alleged that she was denied a promotion based on her race. The charge specifically limited the date of discriminat ion to May 22, 1996. 2. Analysis In dismissing Preston’s single claim for failure to promote, the district court assumed she had established her prima facie c ase. The court then found that defendant set forth a legitimate, nondiscriminatoryreason for its personnel decision, and Preston could not make a sufficient s howing of pretext. We affirm the district court’s dismissal of Preston’s claim. The Post hired Tara Wagner, a white female, to the position Preston sought in May 1996. Nolan Epple, a Post manager, cited th e following factors in support of his decision to hire Wagner: (1) Wagner’s experi ence for one year within the department, (2) recommendations from both her supervisors, (3) her rapport with clients, and (4) her ability to work in the team en vironment at the Post. We agree with the district court that Epple’s testimony conc erning Wagner’s superior qualifications constitutes a legitimate, nondiscrim inatory reason for the Post’s decision not to promote Preston.3 In her brief, Preston also relies on affidavit te stimony from two coworkers. However, this testimony only relates to aclaim Preston failed to exhaust below. -10- We also agree that Preston has not carried her ulti mate burden in demonstrating genuine issues of material fact conce rning pretext. Preston counters Epple’s objective criteria with her subjec tive belief that Wagner contributed to the demotion of a fellow employee, t hereby casting doubt on her abilities as a team player. 3 “[P]laintiff’s ‘mere conjecture that [her] emplo yer’s explanation is a pretext for intentional discrimination is an insufficient basis for denial of summary judgment.’” Panis v. Mission Hills Bank, N.A. , 60 F.3d 1486, 1491 (10th Cir. 1995) (quoting Branson v. Price River Coal Co. , 853 F.2d 768, 772 (10th Cir. 1988)). We therefore affirm the di strict court’s dismissal of Preston’s May 1996 failure to promote claim. In the First Amended Complaint, Preston alleged num erous additional discriminatory practices at the Post. Based on the scope of the discrimination charge, the district court limited its jurisdiction to the single claim of failure to promote in May 1996 and dismissed Preston’s other c laims for failure to exhaust. On appeal, Preston contends that the district courterred in dismissing two of these claims. First, Preston claims that the district court shoul d have considered her claim of failure to promote in February 1996. We d isagree. A plaintiff must-11-

exhaust her administrative remedies before bringing suit under Title VII. Aramburu , 112 F.3d at 1409. “The suit may include allegati ons of discrimination reasonably related to the allegations listed in the administrative charge, including new acts occurring during the pendency of the administrative charge.” Id

. Preston expressly limited the allegation in the cha rge to May 22, 1996. She now attempts to plead past acts not documented in that charge. Exhaustion gi ves the charged party notice of the alleged violation. Ingels v. Thiokol Corp. , 42 F.3d 616, 625 (10th Cir. 1994). Here, Preston gave noti ce of a singular failure to promote and apparently declined to allege a pattern of discrimination. The district court therefore properly dismissed this cl aim for failure to exhaust. Second, Preston argues that the district court shou ld have considered her claim that the Post retaliated against her for fili ng an administrative charge. Preston contends that, after the charge was filed, the Post limited her opportunities to substitute on other desks for extr a pay. It is true that “‘an act committed by an employer in retaliation for the fil ing of an EEOC complaint is reasonably related to that complaint, obviating the need for a second EEOC complaint.’” Id . (quoting Brown v. Hartshorne Pub. Sch. Dist. No. 1 , 864 F.2d 680, 682 (10th Cir. 1988)). Thus, the district cou rt should have considered the retaliation claim on the merits. The Post asserts that Preston did not raise her ret aliation claim before the-12-

district court and therefore cannot maintain it on appeal. We disagree. Both the First Amended Complaint and Preston’s brief opposin g summary judgment raised this claim, and the district court ruled on it. We therefore hold that Preston’s retaliation claim is not barred for failure to exha ust, and that Preston adequately raised it below. We thus remand the claim for cons ideration by the district court on the merits.
C. Lillian Turner 1. Background Lillian Turner, an African-American, joined the Pos t in 1984 as a contract sales representative in the automotive department. During the course of her employment with the Post, Turner has received numer ous verbal and written warnings concerning absenteeism and performance pro blems. On February 29, 1988, M. Jean O’Toole, a manager in the classified department, expressed concern in writing about Turner’s attendance record . In the spring of 1995, Rhonda Canino counseled Turner about an error in a particular advertisement. On June 9, 1995, Canino issued Turner a written warnin g based on additional errors in published advertisements. On June 20, 1995, Bob Haddad, another Post supervisor, suspended Turner for one day without pay as a result of continued customer complaints. Finally, on August 16, 1995, after another customercomplaint, the Post4 In her First Amended Complaint, Turner raised addit ional claims that the

district court found unrelated to the administrativ e charge. The court dismissed these claims for failure to exhaust, and Turner doe s not appeal the dismissal of these additional claims. -13- moved Turner from contract to voluntary sales. Herbase salary remained the same but was frozen for a period of time. Accordin g to plaintiff, she was eventually promoted back to contract sales. Defend ant neither admits nor denies this fact. On April 17, 1996, Turner filed a discrimination ch arge with the CCRD and the EEOC. On August 1, 1996, the EEOC issued Turne r a Notice of Right to Sue. Given Turner’s allegations in the charge, the distr ict court limited its jurisdiction to Turner’s claims of disparate treatment and discr iminatory demotion in violation of Title VII. 4 2. Analysis The district court did not expressly evaluate Turne r’s prima facie case for discriminatory demotion under the controlling criteria set forth in Hooks and Perry . We therefore assume without deciding that Turne r established a prima facie case and the burden shifted to the Post to articulate a legitimate, nondiscriminatory reason for returning Turner to vo luntary sales. As set forth above, Turner had a history of discipline problems at the Post. The company imposed progressive discipline for continued violat ions, which culminated in the-14-

demotion at issue. By documenting a pattern of per formance problems, the Post has met its burden at this stage of the McDonnell Douglas analysis. To survive summary judgment, Turner must demonstrat e that “there is a genuine dispute of material fact as to whether the employer’s proffered reason for the challenged action is pretextual – i.e. unworthy of belief.” Randle v. City of
Aurora , 69 F.3d 441, 451 (10th Cir. 1995). Turner has no t done so on the record before us. Turner concedes that she was the lowestproducer on the automotive desk and admits to making numerous errors with her adve rtisements. The gravamen of her allegation is that other employees on the contract desk made similar errors and were not disciplined accordingly . However, Turner has produced only generic and conclusory testimony to s upport this allegation. When opposing a motion for summary judgment, the non-mov ant may not rest upon “mere allegations” but must “set forth specific fac ts showing that there is a genuine issue for trial.” Fed. R. Civ. P. 56(e). The affidavits Turner produced are wholly devoid of any specific instances of disp arate treatment. Beyond that, there is no evidence in the record that any supervisor was aware of the alleged mistakes committed by fellow e mployees. In fact, one supervisor, in his written reprimand, expressly inf ormed Turner that other sales representatives with comparable responsibilities were not having the same problems. Turner even acknowledged that she does n ot know if advertisers were-15-

making similar complaints about other employees. T hus, Turner has not demonstrated that there is a genuine issue of mater ial fact concerning pretext, and we therefore affirm the district court’s dismissal of this count. Turner’s claim of disparate treatment fails for the same reasons. One method plaintiff may employ to give rise to an infe rence of racial discrimination is to show that she was treated differently than other similarly situated employees. The record contains the affidavits of similarly sit uated employees who state that, in their opinion, the Post subjected Turner to disp arate treatment. However, these employees reference no particular incidents to supp ort the charge. Without specific examples of unlawful discrimination, Turne r cannot withstand a motion for summary judgment. See id . at 1408 n.7 (stating that fellow employees’ subjective belief that employer discriminated again st plaintiff is not sufficient to preclude summary judgment). In addition, we have f ound no objective evidence of disparate treatment in the record. For example, there is no independent evidence that a white employee made the same mistak es as Turner and that this white employee’s supervisor knew about the mistakes but did not discipline the employee. Thus, we also affirm the district court’ s dismissal of Turner’s disparate treatment claim.-16-

D. Attorney Fees to Canino Finally, plaintiffs contend that the district courterred in awarding attorney fees to defendant Canino. We review the factual fi ndings underlying an attorney fee award for abuse of discretion. Mann v. Reynolds , 46 F.3d 1055, 1062 (10th Cir. 1995). However, we review de novo the legal c onclusions supporting the award. Bryan v. Office of Personnel Mgmt. , 165 F.3d 1315, 1320 (10th Cir. 1999). In the First Amended Complaint, Turner asserted a s ingle claim against Canino for “Aggravation of Preexisting Medical Cond itions.” The district court found that this self-styled allegation did not stat e a claim for relief under Colorado law. The court thus dismissed the claim p ursuant to Fed. R. Civ. P. 12(b)(6). “When exercising jurisdiction over pendent state cl aims, we must apply the substantive law of the forum state . . . just as we would if our jurisdiction rested on diversity of citizenship.” Lytle v. City of Haysville , 138 F.3d 857, 868 (10th Cir. 1998). In the Tenth Circuit, attorney fee statutes are c onsidered substantive.
See Boyd Rosene & Assocs. v. Kansas Mun. Gas Agency , 174 F.3d 1115, 1118 (10th Cir. 1999) (finding that attorney fees are su bstantive for diversity purposes). Therefore, the district court properly consulted C olo. Rev. Stat. Ann. § 13-17-5 At one point in its order, the district court cite s both state and federal law

concerning fee recovery. However, the court clearl y relied upon Colorado law in its final order awarding fees to Canino. We theref ore review the district court’s application of Colorado law and do not address the court’s reference to federal law.

6 Section 13-17-201 expressly applies only to action s dismissed under Rule 12(b) of the Colorado Rules of Civil Procedure. Ho wever, we find the statute applies with equal force when a federal court dismi sses a pendent state tort pursuant to Fed. R. Civ. P. 12(b)(6). -17- 201 (West 1999), the applicable Colorado fee recovery statute. 5 Section 13-17-201 provides that if a court dismisse s a personal injury action pursuant to a 12(b) motion, then “defendant shall have judgment for his reasonable attorney fees.” 6 Because the district court dismissed Turner’s “personal injury” action on a Rule 12(b) motion, th e court properly awarded her fees. See Smith v. Town of Snowmass Village , 919 P.2d 868, 873 (Colo. Ct. App. 1996) (finding that where entire action agains t one defendant was dismissed but claims remained against another defendant, § 1 3-17-201 entitles prevailing defendant to attorney fees). AFFIRMED IN PART, REVERSED IN PART , and REMANDED for further proceedings consistent with this opinion.No. 98-1458, JONES et al. v. DENVER POST CORPORATIO N

McKAY, Circuit Judge, concurring in part and dissenting in part:

I join in the court’s opinion except as to Appellan t Turner. I am persuaded that the trial court erred in treating the affidavi t testimony of fellow employees Jeffry J. Mangin and Gloria K. Smith as conclusory and nonprobative. This testimony, viewed in a light most favorable to Ms. Turner, is sufficient to establish a prima facie claim for disparate treatme nt. Based on this evidence, a trier of fact could find that “the employer imposed the discipline [on Ms. Turner] under circumstances giving rise to an inference of racial discrimination.” Maj. Op. at 6. As noted by the majority, a showing thatshe was treated differently than similarly situated employees is sufficient to demonstrate such circumstances.
See id. The testimony is also sufficient to create a subs tantial fact issue concerning pretext in connection with the discrimin atory demotion claim. Far from being merely conclusory as the majority de termines, the testimony of these fellow employees in the classified adverti sing department represents both specific facts and specific observations which are both relevant and persuasive. Mr. Mangin’s affidavit stated: All of us made mistakes and Lillian made no more mi stakes than the rest of us. . . . . . . When I made errors I was not written up[;] ho wever when Lillian made errors she was written up by Rhonda Canino. The volume was enormous, as I stated above, and everyon e made1 Ms. Smith’s affidavit indicates that the two employ ees who worked at the

automotive contract desk in the same position as Ms . Turner, Mr. Mangin and Ms. Passwalt (or Patzwaldt), were not of minority descent. See Appellant’s App., Vol. 2 at 426. -2- mistakes so why did they single out Lillian. SusanPasswalt and I even had discussions regarding the fact that Lillia n was being singled out. Appellants App., Vol. 2 at 404-05. 1 This is not mere conclusion and allegation. It is statement of fact by one who knows whether hi s mistakes were known to their joint supervisor and who was in a clear posit ion to observe the difference in consequences. Who better to know the facts than th e one receiving preferential treatment. At the summary judgment stage it is notnecessary for a witness who is integral to the environment at issue to submit a co mparative table of errors or even to cite specific cases. When he says he was “ not written up,” that adequately implies that his errors were known. Ms. Smith’s testimony included the fact that “Rhond a was out to get Lillian and some of the charges were minor and common for the people working in that department. It was clear to me and many others in classified that Lillian was being badgered.” Id. at 426. This is not the “vague and conclusory” st uff the trial court held it to be. First of all, “badgerin g” does not lend itself to tables and charts. It is uniquely one of those things any per son can recognize. This is a fellow employee, intimately and uniquely in a posit ion both to observe and-3-

compare. Moreover, the affidavits reveal that the badgering was so open and notorious as to be a matter of common discussion wi thin the office. The detailed differences in the frequency of errors is a matter for cross-examination at trial–not for dismissal at summary judgment. Because Ms. Turner has presented evidence demonstrating genuine issues of material fact, I would reverse and remand for tr ial in her case.