Opinion ID: 10951
Heading Depth: 2
Heading Rank: 3

Heading: The EEOC's Evidence of Pretext

Text: 41 (1) TI's Age-Based Comments 42 EEOC first relies on three age-related comments allegedly made by TI employees as proof of TI's discriminatory motivation. 7 Plaintiff Rains testified that Blair, a TI personnel director, explained the decision to terminate Rains by suggesting that it's just that you've reached that age and years of service that we can bridge you to retirement. The two remaining statements were allegedly made by Horn to Tencza, a supervisor discharged in the RIF who is not represented by the EEOC. Horn allegedly said of Tencza, his age hot him, and that TI had to make room for younger supervisors. 43 This court has repeatedly held that stray remarks do not demonstrate age discrimination. See, e.g., Waggoner v. City of Garland, 987 F.2d 1160, 1166 (5th Cir.1993) (a statement by a decisionmaker that an employee was an old _______ and that a younger person could complete his work faster was a stray remark insufficient to establish age discrimination); Guthrie v. Tifco Industries, 941 F.2d 374, 378-79 (5th Cir.1991) (holding that such statements are too vague to be accepted as direct evidence of age-bias.); Turner v. North American Rubber, Inc., 979 F.2d 55, 59 (5th Cir.1992) (vague and remote remarks cannot establish age discrimination). In order for an age-based comment to be probative of an employer's discriminatory intent, it must be direct and unambiguous, allowing a reasonable jury to conclude without any inferences or presumptions that age was an impermissible factor in the decision to terminate the employee. Bodenheimer v. PPG Industries Inc., 5 F.3d 955, 958 (5th Cir.1993). 44 The statement allegedly made by Blair to Rains is a stray remark that does not demonstrate age bias. Blair's statement simply recognized a fact concerning Rains's seniority, an observation which did not imply seniority was the reason for discharge. This interpretation of the statement is consistent with the context in which it was allegedly made, as Rains's duty was to explain termination benefit packages to employees. See, e.g., Guthrie, 941 F.2d at 378-79 (statement that founder of company suggested to his son that he needed to surround himself with people his age is not direct evidence of age discrimination); Turner, 979 F.2d at 59 (comment that an employee needed three young tigers to assist with operations is not probative of discrimination). TI also notes that Blair was not a decisionmaker at TI with respect to the RIF and that he had no input into the decision to terminate any of the Six Supervisors. Blair's stray remark is thus not probative of whether TI's decision to terminate Rains was motivated by age discrimination. See, e.g., Rhodes, 75 F.3d at 994; Cone v. Longmont & United Hosp., 14 F.3d 526, 529 (10th Cir.1994) (age-related comment by non-decisionmakers are not material to showing employer's age discrimination.) 45 Further, the statements allegedly made concerning Tencza's termination are not probative in themselves or relevant to TI's decision to terminate the Six Supervisors. Horn, who allegedly make the remarks, recommended replacing Tencza, age 55, with Garner, age 51, an action which speaks louder about Horn's motivation than the words attributed to him. Moreover, the statement about TI's need to make room for younger supervisors reflects the kind of truism this court and others have held does not evidence discrimination. See, e.g., Birkbeck v. Marvel Lighting Co., 30 F.3d 507, 512 (4th Cir.1994), cert. denied U.S. , 115 S. Ct. 666, 130 L. Ed. 2d 600 (1994) (statement that there comes a time when we have to make room for younger people creates no inference of age discrimination). But even if Horn's alleged remarks were probative of discrimination against Tencza, they cannot carry the heavier burden of condemning the motivation of TI toward the Six Supervisors: Horn was a first-tier evaluator of layoffs whose recommendations had to be approved by Dial and Douthit, and Horn was partly responsible for recommendations on only two of the Six Supervisors. In short, the alleged statements about Tencza's termination are no more probative of disparate treatment of the Six Supervisors than whatever was said to the numerous supervisors over 40 years old whom TI did not discharge. 8 46 (2) TI's Conscious Departure from its own Procedures 47 The EEOC urges that TI's conscious decision to ignore its usual policies and procedures when conducting the RIF demonstrates that its expressed reasons for terminating the six supervisors are post hoc pretexts for age discrimination. The district court rejected this inference, concluding that the EEOC had not shown a discriminatory connection between TI's failure to follow its policies and its selection of supervisors subject to the RIF. 48 This court has observed that an employer's disregard of its own hiring system does not of itself conclusively establish that improper discrimination occurred or that a nondiscriminatory explanation for an action is pretextual. Risher v. Aldridge, 889 F.2d 592, 597 (5th Cir.1989); see also, Moore v. Eli Lilly & Co., 990 F.2d 812, 819 (5th Cir.), cert. denied, 510 U.S. 976, 114 S. Ct. 467, 126 L. Ed. 2d 419 (1993). This court elaborated in Moore that 49 [p]roof that an employer did not follow correct or standard procedures in the termination or demotion of an employee may well serve as the basis for a wrongful discharge action under state law. As we have stated, however, the ADEA was not created to redress wrongful discharge simply because the terminated worker was over the age of forty. A discharge may well be unfair or even unlawful and yet not be evidence of age bias under the ADEA. To make out an ADEA claim, the plaintiff must establish some nexus between the employment actions taken by the employer and the employee's age. [A] bald assertion that one exists ... simply will not suffice. 50 Id. 990 F.2d at 819 (citing Bienkowski, 851 F.2d at 1508 n. 6). 51 The EEOC has not demonstrated such a nexus; rather, as in Moore, its argument rests on a bald assertion that one exists. What happened in this case, without dispute, is that TI created a new layoff policy regarding supervisors that disregarded seniority; the company did not simply fail to follow the usual seniority-protective policy. As previously summarized, TI carefully outlined why it disregarded the seniority protections typically afforded to its employees in a RIF and why it did not consider performance evaluations or KPAs when determining which supervisors to retain. The EEOC failed to undermine this decision. Specifically, Douthit testified at his deposition that under pre-existing TI policy he was not permitted to lay off individuals with more than 15 years of seniority without gaining the approval of the president of the company. Douthit lamented that the economic costs of the seniority policy were extreme since the mix of [TI's] job grades was becoming more and more concentrated towards the higher end, which was driving our average pay up, which was driving our cost up, which was making us less competitive in the marketplace. Additionally, TI's seniority rule would force TI to displace a disproportionate number of employees with college degrees since the majority of [TI's] degree people had less than 15 years of service while ... a high percentage of people [had] greater than 15 years of service [but no] degrees. Instead of this expensive, inflexible protection of seniority, Douthit favored a RIF policy which would make those decisions on a merit basis ... as opposed to, you know, a fixed set of rules that did not allow [TI] the flexibility to make decisions that were dictated by business conditions. 52 Douthit advocated a merit-based retention policy to the CEO of TI and the president of the DSEG organization. Douthit documented the present concentration of supervisors in higher pay grades, the skills that TI most needed to retain in its RIF, and the senior employees who would be discharged if seniority protections were waived. The company agreed to modify its traditional RIF policy in part because technology had changed. [A] lot of high seniority people had skill sets that were ... grounded in the 1960s and 1970s technology. Products of the future were going to require 1980s and 1990s technology. [Some senior employees] had not or could not ... make the transition to those new technologies and required skills. 53 Before TI undertook the difficult task of selecting employees to terminate during its RIF, the company recognized that its traditional protection of seniority would hamper future performance. As a result, after identifying the skills most vital to the company's ability to adapt to a rapidly changing technological environment, TI waived its seniority protections and laid off supervisors who might have otherwise been retained because of their seniority. TI's decision to replace a seniority policy that would impede its ability to reduce its workforce while maximizing the efficiency and expertise of the remaining employees does not, without a clear nexus to discrimination, create an inference of age discrimination. 54 (3) Criticisms of TI's Particularized Reasons 55 This court has already summarized the criticisms advanced by the EEOC of TI's reasons for discharging each of the Six Supervisors. Rather than demonstrate the likely falsehood of those reasons, EEOC responds that each of the supervisors had competent performance evaluations and KPAs and was considered an effective employee by TI. Critically, the EEOC's criticisms rest on information found in TI's annual performance evaluations and its KPAs, measures which are misleading guides to the RIF decisions TI had to make. 56 TI rejected use of the performance evaluations and KPAs after determining that neither report provided worthwhile information about the comparative worth of a particular employee. Stephen Leven (Leven), Vice President of Human Resources at TI, attested that 57 [t]he performance evaluations completed annually for TI's employees have tended to be quite uniform. It was intended by TI that the vast majority of employees would receive similar performance ratings, with only exceptionally good or poor performers deviating from this norm. The purpose of this common rating is to avoid making fine distinctions among employees who are performing adequately when no pending business decisions turn directly on such ratings. 58 For instance, of the 135 evaluations performed on a group of 45 manufacturing supervisors during the three years preceding the RIF, only two evaluations gave a summary rating below the group median. 9 Another drawback of the performance evaluations is that they provide no useful information regarding the ability of an employee to adapt to changing technology. Leven explained that 59 the written performance evaluations typically rate an individual with respect to the job he or she currently performs, but are silent with respect to the value to TI of the job they are performing, or the usefulness of their skills as applied to future operations and technology. 60 Given the tendency of these evaluations to cluster employee performance ratings and their lack of focus on the company's future technological needs, TI had a legitimate business basis not to rely on the evaluations in conducting its RIF. 61 The KPAs were also deficient for TI's RIF decisions. Leven explained that 62 [t]he KPA is performed annually and provides a top to bottom ranking of exempt employees in each organization, including manufacturing operations, according to their perceived value. The KPAs, however, are closely tied to salary determinations and reflect considerations in addition to performance. 63 Indeed, the KPA rankings were often simply reiterations of the pay gradations at TI; the greater the pay, the higher the KPA. Also, because they are merely top-to-bottom rankings, the KPAs do not provide information about the proper mix of employees and specialties that should be retained in a RIF. As Douthit explained in his deposition, it is entirely conceivable that you could have somebody that would be high on the KPA, you know, good performer, but may reside in a skill category that was no longer or was not critical to the success of the business. 64 In sum, the EEOC's proof fails to undermine TI's legitimate, non-discriminatory, and individualized reasons for terminating the Six Supervisors for several reasons. First, the agency makes general assertions that the supervisors were competent employees, but it does not directly challenge TI's individualized explanations for not retaining the Six Supervisors. The agency showed only that the supervisors were qualified, not that they were clearly better qualified than the supervisors retained in the RIF. See Walther, supra; 10 see also EEOC v. Manville Sales Corp., 27 F.3d 1089, 1096 n. 5 (5th Cir.1994), cert. denied, U.S. , 115 S. Ct. 1252, 131 L. Ed. 2d 133 (1995). Second, the EEOC's showing is premised on the performance evaluations and KPAs, data irrelevant to the RIF decisions. Thus, while some of TI's criticisms of individual supervisors' performances appear to be contradicted by the ratings and comments on their annual evaluations, the record demonstrates that the annual evaluations were not designed to compare or differentiate among employees, the critical task for management conducting a RIF. Third, the EEOC has not offered proof to indict TI's logic for abandoning either the KPAs of the performance evaluations. 65 (4) Statistical Evidence 66 The EEOC finally contends that its statistical tests indicating that age was a significant predictor of the likelihood of layoff permit a genuine inference of pretext. The district court summarily rejected this contention, reasoning that statistics will only rarely rebut an employer's particularized, legitimate, and nondiscriminatory reasons for the adverse employment decision. 67 The district court relied extensively on this court's opinion in Walther v. Lone Star Gas Co., 977 F.2d 161, 162 (5th Cir.1992). In Walther, this court explained that statistical evidence usually cannot rebut the employer's articulated nondiscriminatory reasons. The court observed thatgross statistical disparities resulting from a reduction in force or similar evidence may be probative of discriminatory intent, motive or purpose. Such statistics might in an unusual case provide adequate circumstantial evidence that an individual employee was discharged as part of a larger pattern of layoffs targeting older employees. This is not to say that such statistics are enough to rebut a valid, nondiscriminatory reason for discharging a particular employee. Generally, they are not.... Proof of pretext, hence of discriminatory intent, by statistics alone would be a challenging endeavor. 68 Walther, 977 F.2d at 162 (emphasis added) (citations omitted). Other circuits have expressed similar skepticism about the ability of statistics to rebut the employer's nondiscriminatory reasons. See, e.g., LeBlanc v. Great American Ins. Co., 6 F.3d 836, 848 (1st Cir.1993), cert. denied, U.S. , 114 S. Ct. 1398, 128 L. Ed. 2d 72 (1994) (noting that a company's overall employment statistics will have little direct bearing on the specific intentions of the employer when dismissing a particular individual.); Barnes v. Gencorp., Inc., 896 F.2d 1457, 1469 (6th Cir.), cert. denied, 498 U.S. 878, 111 S. Ct. 211, 112 L. Ed. 2d 171 (1990) (when the defendant offers particularized reasons, this cannot be rebutted by reference to the statistics already presented since the statistics here do not tend to establish that age played a factor in any particular decision.) (citations omitted) (emphasis in original). 69 While Walther explains that generalized statistical evidence will rarely rebut a particularized nondiscriminatory rationale, statistical evidence may be probative of pretext in limited circumstances, however. See Deloach v. Delchamps, Inc., 897 F.2d 815, 820 (5th Cir.1990) (Delchamps further claims that while statistical data may be used to establish a prima facie case, it cannot be used to establish pretext. While that may be true when that is the only evidence a plaintiff has to establish pretext ... we do not believe the same rule applies when a plaintiff offers additional evidence.). The probative value of statistical evidence ultimately depends on all the surrounding facts, circumstances, and other evidence of discrimination. International Bd. of Teamsters v. United States, 431 U.S. 324, 340, 97 S. Ct. 1843, 1856-57, 52 L. Ed. 2d 396 (1977). 70 In the instant case, the statistical evidence offered by the EEOC does not support an inference that TI's reasons for terminating the Six Supervisors were merely pretextual. Importantly, TI's expert, Dr. Daniel S. Hamermesh (Hamermesh), showed that the EEOC's results are only statistically significant for a subgroup of supervisors over 50, although the protected class includes all employees over 40 years old. Hamermesh found that the layoffs were not statistically significant for ages between 40 and 45 and those above 52; the layoffs had a statistically significant impact only for ages 46 through 51. Of the Six Supervisors, only Rains, Owens, and Hillis fall in the subgroup for which a statistically significant result was deduced. EEOC did not sue on behalf of the 47 or 49-year old supervisors who were laid off. 71 As this court has recognized, particularly in age discrimination cases where innumerable groupings of employees are possible according to ages and divisions within the corporate structure, statistics are easily manipulated and may be deceptive. Walther v. Lone Star Gas Co., 952 F.2d 119, 124 (5th Cir.), on rehearing, 977 F.2d 161 (5th Cir.1992). EEOC's expert had no explanation for his selection of the arbitrary age 50 cutoff other than that was the group EEOC asked him to consider. EEOC's choice of age groups for statistical review is not probative of age discrimination. 72 Further, the EEOC's own expert admitted during his deposition that his statistical analysis did not consider the specific talents or duties of the manufacturing supervisors at TI. Because the EEOC's statistics do not even purport to analyze the facts concerning individual supervisors, the statistics are impotent, without more, to rebut TI's particularized reasons for the termination of the Six Supervisors. The statistics cannot satisfy the requirement in Rhodes that the EEOC demonstrate a fact issue as to whether each of the TI's stated reasons actually motivated its RIF. Rhodes, 75 F.3d at 994. 73 Moreover, the authorities on which the EEOC relies are inapposite. Several cases considered the proffered statistical evidence probative of pretext only because the plaintiff had offered particularized evidence directly challenging the defendant's announced rationale. See, e.g., Deloach, 897 F.2d at 818-20 (only when coupled with other evidence contradicting employer's reasons was statistical evidence probative of pretext); Freeman v. Package Machinery Co., 865 F.2d 1331, 1342-42 (1st Cir.1988) (statistical evidence is probative when it demonstrated a pattern consistent only with discrimination and it was combined with independent and conflicting testimony of job performance); Krodel v. Young, 242 U.S. App. D.C. 11, 748 F.2d 701, 710 (D.C.Cir.1984), cert. denied, 474 U.S. 817, 106 S. Ct. 62, 88 L. Ed. 2d 51 (1985) (without more, statistical evidence is less significant and ordinarily not dispositive in disparate treatment cases); Reeves v. General Foods Corp., 682 F.2d 515, 523-25 (5th Cir.1982) (Reeves presented evidence that his performance was such that the jury could have decided that General Foods' admittedly articulated explanation of poor performance was unworthy of credence.). Likewise, in Bienkowski v. American Airlines, Inc., 851 F.2d 1503 (5th Cir.1988), this court recognized that statistical evidence was only probative of intent when the plaintiff had disputed with other evidence the defendant's performance evaluation; in Bienkowski, the plaintiff had produced various affidavits from which a jury could conclude that his supervisors' evaluation of his performance lacked veracity and that their true motivation resided in their age-based comments. Id. at 1508. In other cases cited by the EEOC, the court merely explained in dicta that statistical evidence can be evidence of pretext. See, e.g., EEOC v. Manville Sales Corp., 27 F.3d 1089, 1096 n. 5 (5th Cir.1994); Gusman v. Unisys Corp., 986 F.2d 1146, 1147-48 (7th Cir.1993) (suggesting that claims of discrimination are hard to prove one case at a time, but emphasizing that ample evidence warranted a Conclusion [by the jury] that Gusman's immediate supervisor ... believed that older workers are inferior.). Finally, contrary to the EEOC's suggestion, the court in MacDissi v. Valmont Indus., Inc., 856 F.2d 1054 (8th Cir.1988), relied on statistical evidence merely to conclude that the plaintiff had established a prima facie case of age discrimination; in fact, the court distinguished MacDissi from other cases where the plaintiffs attempted to use statistics to prove pretext. Id. at 1058. None of these cases suggest that statistics which rely on the arbitrarily selected cutoff used here can be probative of pretext in these disparate treatment cases. 74 (5) Cumulative Impact of EEOC's Evidence 75 EEOC strenuously criticizes the district court for having discounted each of its types of evidence separately and ignored that, taken together, all of the agency's evidence bespoke pretext sufficiently to warrant a jury trial. The district court was obliged, however, to consider the admissibility of evidence offered to support the parties' summary judgment positions pursuant to Fed.Rule Civ.P. 56(e). His discharge of that duty led to a separate look at EEOC's categories of evidence: alleged ageist comments; TI's departure from prior procedures and employee evaluation standards; and statistical data. Like the district court, we have undertaken de novo review of the record, including EEOC's attempted refutation of the individualized reasons for terminating each supervisor and the other evidence offered by the agency. We agree with the district court that portions of the agency's proffered evidence, e.g. the statistics and stray remarks, were not probative of age discrimination. The agency failed to join issue on TI's business reasons for using a non-seniority-protective method of selecting which supervisors to lay off. The agency's attempted refutation of TI's individualized, nondiscriminatory reasons for discharging the Six Supervisors misses the mark because it does not undermine the comparative rating of the Six Supervisors among all the supervisors exposed to the RIF. EEOC also fails to cast doubt on TI's explanation that the satisfactory performance of a supervisor during a period of economic stability does not necessarily establish the employee's essentiality to the company and its future in an era of downsizing. Evidence that does not imply pretext taken alone does not do so when cumulated. See Holmberg v. Baxter Healthcare Corp., 901 F.2d 1387, 1391 (7th Cir.1990) (the sum of four nondiscriminatory episodes does not support [a] case anymore than viewing the four episodes separately). The agency's case, in sum, confused a quarrel with the merits of the company's business decision--a quarrel in which the ADEA plays no role--with a case of illegal age discrimination. STATUTE OF LIMITATIONS 76 In July 1994, TI sought leave to amend its answer and expand its plea of limitations as an affirmative defense. The original answer asserted only that non-willful ADEA violations were time-barred. Later that month but before the district court had ruled on the motion to amend, TI moved for summary judgment on the grounds that the EEOC's claims were untimely. On the same day that the district court granted TI summary judgment on the merits of the EEOC's claims, the district court denied TI's motion for leave to amend as moot and denied summary judgment on limitations. 77 TI has attempted to cross-appeal this denial of summary judgment and the court's refusal to rule on its motion to amend. Even if we have appellate jurisdiction over these interlocutory orders, it is unnecessary to discuss the timeliness of EEOC's complaint because, following the district court's lead, we have alternatively ruled on the merits.