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

### JAN 8 2003 

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

TENTH CIRCUIT

FELIPE G. JUAREZ,

Plaintiff - Appellee,

v. ACS GOVERNMENT SOLUTIONS GROUP, INC., and AFFILIATED COMPUTER SERVICES, INC.,

Defendants - Appellants. No. 02-6069

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF OKLAHOMA

(D.C. No. CIV-00-1703-L)
Robert G. Chadwick, Jr. (Jeff A. Taylor, Oklahoma C ity, Oklahoma, with him on the briefs) of Chadwick, Taylor & Eisenbraun, Addis on, Texas, for DefendantsAppellants. Raymond C. Durbin, Oklahoma City, Oklahoma, for Pla intiff-Appellee.

Before SEYMOUR , McKAY and MURPHY , Circuit Judges.

McKAY , Circuit Judge.-2-

This employment discrimination action stems from a reduction in force (RIF) in which Appellant terminated several employe es including Appellee. As of May 25, 2000, Appellant ACS employed fifteen ski ll-level-sixteen computer operators at Fort Sill Army Base in Lawton, Oklahom a, pursuant to a contract with the United States. On May 25, 2000, the Chief of Support Division notified the ACS Group Manager, Mr. Odland, and the ACS Site Manager, Mr. Nesmith, that a total of nine positions would need to be eli minated by June 5, 2000. Five of these positions were classified as skill-level-s ixteen computer operators. To accomplish the RIF, Appellant used a spreadsheetcompiled by the Human Resources Department with six merit-based cat egories: accuracy of documentation, ability to follow established proced ures, communications/teamwork, reliability, timely comple tion of assignments, and attendance/tardiness. The ratings were based on th e prior six months and did not consider any past performance reviews. Appellant c laims that the data from the merit spreadsheet were the sole criteria used to de termine which employees would be terminated. ACS states that the Group Manager m ade the final decisions based solely on the merit spreadsheet. However, Appellee presented evidence that the decision was made by a committee and that it was ba sed on longevity and job performance. Appellee also presented evidence that the original merit spreadsheet-3-

provided by Human Resources had two additional cate gories, tenure and recent performance review score. ACS claimed that these t wo categories were only for information-review and tie-breaking purposes. Ther e was conflicting evidence about whether a tie occurred. Finally, the final f orm contains a justification at the bottom, which was suggested by Human Resources, stating that all five computer operators selected for termination “were not self-s tarters.” Aplt. App., Vol. II, at
342. Appellee Felipe Juarez, a Hispanic computer operato r, began working for ACS in October 1995. During his employment, ACS co nsistently gave him high scores in formal performance evaluations. He recei ved ratings of mostly “outstanding” and “exceeds requirements” in evaluat ion categories. In his last comprehensive performance evaluation, his immediate supervisor specifically stated that “Mr. Juarez is a self starter.” Aple. Supp. App., at 12. On June 5, 2000, Messrs. Odland and Nesmith told Ap pellee that he was being terminated due to a layoff. Appellee present ed evidence that ACS had retained non-Hispanic computer operators with less experience and tenure than Appellee and who had lower recent performance evalu ations. Appellee also presented evidence that Mr. Nesmith had made derogatory remarks about Mexicans in the past. A jury reached a verdict in favor of Appellee on hi s claims of race, color,-4-

and national-origin discrimination under Title VII and awarded him $22,500 in back pay and $250,000 in punitive damages. Appella nt filed a Motion for Judgment as a Matter of Law, New Trial and/or Remittitur. The district court denied the motion in its entirety. The issues raised on appeal are: (1) whether the d istrict court properly denied Appellant’s JMOL Motion to overturn the jury verdict granting Appellee compensatory damages for his claim of intentional d iscrimination on the basis of race, color, or national origin, and (2) whether th e district court properly denied Appellant’s JMOL Motion to overturn the jury verdic t granting Appellee punitive damages for his claim that Appellant acted with mal ice or reckless indifference under 42 U.S.C. § 1981a. We review de novo the district court’s denial of a Rule 50 JMOL motion asking whether there is evidence upo n which a jury could return a verdict in favor of the party opposing the motion . Fed. R. Civ. P. 50(a); Griffin v. Steeltek, Inc. , 261 F.3d 1026, 1028 (10th Cir. 2001). “A § 1981 or § 1982 plaintiff must prove by a prepo nderance of the evidence that the defendant intentionally discrimin ated against him or her on the basis of race. . . . Such proof may come from eith er direct or indirect evidence.” The Guides, Ltd. v. The Yarmouth Group Prop. Mgmt., Inc. , 295 F.3d 1065, 1073 (10th Cir. 2002). At trial, Appellee proved a prim a facie case of intentional discrimination. The required elements of a prima f acie case of intentional race-5-

discrimination involving an RIF are (1) a plaintiff was within the protected group, (2) plaintiff was doing satisfactory work, (3) plai ntiff was discharged despite the adequacy of his work, and (4) there is some evidenc e that the employer intended to discriminate against the plaintiff in reaching i ts RIF decision. Beaird v. Seagate Tech., Inc. , 145 F.3d 1159, 1165 (10th Cir. 1998). The fourth element can be satisfied by showing that the employer could have retained plaintiff but instead chose to keep someone of a different race. Id. at 1167. We note that the Supreme Court’s decision in Reeves v. Sanderson Plu mbing Prods., Inc. , 530 U.S. 133 (2000), which underscored the significance of t he prima facie inquiry not only to the initial determination regarding the emp loyer’s burden of production, but also to the ultimate determination of whether t he evidence supports a finding of intentional discrimination did not undermine val idity of the Beaird decision. Appellee’s evidence showed that he was a Hispanic, Mexican-American; that he was qualified for the position of computer operator and performed his job duties in a satisfactory manner; that he was termin ated during a reduction in force; and that ACS retained other computer operato rs who were not Hispanic or Mexican-American and who had less experience, less tenure, and lower prior performance evaluations. Appellee introduced evide nce that ACS retained two computer operators that were frequently tardy or ab sent and one that slept on the job. Appellee also introduced evidence that a reta ined computer operator was-6-

drinking on the job. Appellee also presented evidence at trial that the spreadsheet used to justify the RIF decision was inaccurate and did not contain the actual selection criteria. The jury heard contradictory evidence about whetheror not there was a tie between certain employees selected for termination and about who made the decision to include Appellee in the RIF. Additiona lly, despite language on the spreadsheet that Appellee and others selected for t ermination were not selfstarters, Appellee’s most recent performance evaluation identified him as being a self-starter. Appellee further presented evidence that Mr. Nesmit h, ACS’s Site Manager in charge of both operations and human resources atthe facility where Appellee worked, had made derogatory remarks about Mexican e mployees shortly before the RIF. Although ACS argues that Mr. Nesmith had no role in the selection of Appellee for termination, Appellee presented suffic ient evidence allowing the jury to reasonably infer that Mr. Nesmith actually did p articipate in the termination decision. Based on the evidence presented by Appellee, the ju ry could determine that the shifting reasons given by ACS for Appellee’s di scharge were pretextual and that ACS’s self-proclaimed merit spreadsheet, devis ed by its line management and Human Resources Department, was fraudulent and mere ly a sham used to justify-7-

Appellee’s termination. Therefore, we hold that th e evidence was sufficient to support the jury’s findings that ACS intentionally discriminated against Appellee because of his race, color, and/or national origin. We next turn to the issue of whether the district c ourt correctly denied ACS’s motion for judgment as a matter of law as to the $250,000 in punitive damages awarded to Appellee. “Whether sufficient ev idence exists to support punitive damages is a question of law reviewed de n ovo.” The Guides , 295 F.3d at 1077 (quoting Fitzgerald Mountain States Tel. & Tel. Co. , 68 F.3d 1257, 1262 (10th Cir. 1995)). Punitive damages are available under the Civil Righ ts Act of 1991, Title VII, if the plaintiff proves that an employer engag ed in intentional discrimination “with malice or with reckless indifference to the f ederally protected rights of an aggrieved individual.” 42 U.S.C. § 1981a(b)(1) (19 94). [The] standard for punitive damages cannot be satis fied by a showing of intentional discrimination alone. Otherwise, every jury verdict in a successful § 1981 or § 1982 claim would include an award of punitive damages. Instead, . . . a plaintiff must prove tha t the defendant acted with malicious, willful or gross disregard of a plaintif f’s rights over and above intentional discrimination. The Guides , 295 F.3d at 1077; see also Kolstad v. American Dental Ass’n , 527 U.S. 526, 534 (1999) (“Congress plainly sought to i mpose two standards of liability–one for establishing a right to compensat ory damages and another, higher standard that a plaintiff must satisfy to qualify f or a punitive award.”). A-8-

plaintiff must present evidence that the defendant intentionally discriminated against him on the basis of race with malice or “in the face of” a perceived risk that its actions would violate federal law. See Ko lstad , 572 U.S. at 535-36 (“The employer must act with malice or with reckless indi fference to the [plaintiff’s] federally protected rights.”). Applying these standards, we hold that Appellee pre sented sufficient evidence that ACS terminated Appellee despite a rec ognized risk of violating Title VII. Appellee presented evidence that Mr. Ne smith and other supervisory employees had received some EEO training and that M r. Nesmith was the Equal Employment Opportunity Officer at the Fort Sill sit e. In conjunction, Appellee presented evidence that could lead the jury to conc lude that Mr. Nesmith was involved in the RIF decision. In addition, Appellee presented evidence of cover-up after the discriminatory action. Appellee introduced evidenc e that the Human Resources Department actively participated with management-le vel employees to cover up the discriminatory discharge of Appellee by giving a false reason for his discharge. Even though cover-up after the fact doe s not necessarily import previous evil intent, in the instant case, the jury could infer that the cover-up was planned prior to the discriminatory discharge. Based on the evidence presented, the jury could det ermine that the merit-9-

spreadsheet was used merely in an attempt to justif y the termination of certain individuals. Even though eight categories were sup plied by Human Resources, ACS chose to use only six of those categories in rating employees. Aplt. App., Vol. II, at 200. The two categories supposedly notused in the RIF decision were tenure and past performance evaluation score. The jury could infer that these categories were intentionally excluded in an attemp t to justify terminating Appellee. Appellee also presented proof that ACS’s Human Res ources Department failed to provide more detailed instructions and gu idelines in the RIF or to review and monitor the RIF selection process. The totality of the evidence allowed the jury to determine “that the defendant acted with ma licious, willful or gross disregard of a plaintiff’s rights over and above in tentional discrimination.” The Guides , 295 F.3d at 1077. For the foregoing reasons, the decision of the dist rict court is AFFIRMED

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