Court Opinion

ID: 7023
Source: CourtListenerOpinion
Date Created: 2010-04-25 05:24:05+00
Date Added: 2024-06-11T16:46:14.996420
License: Public Domain

United States Court of Appeals,

                             Fifth Circuit.

                              No. 93-8632.

     Bruce T. SHATTUCK, Plaintiff-Appellee/Cross-Appellant,

                                    v.

   KINETIC CONCEPTS, INC., Defendant-Appellant/Cross-Appellee.

                             April 13, 1995.

Appeal from the United States District Court for the Western
District of Texas.

Before POLITZ, Chief Judge, GARWOOD and BENAVIDES, Circuit Judges.

     POLITZ, Chief Judge:

     Kinetic Concepts, Inc. appeals an adverse judgment on a jury

verdict in Bruce T. Shattuck's age discrimination suit.              Shattuck

cross appeals the grant of summary judgment dismissing his state

law claims and the denial of front pay.            Finding no reversible

error, we affirm.

                               Background

     In 1984 KCI, a marketer of medical products, hired Shattuck,

then 52 years old, as a product manager.          Shattuck invented a new

device for KCI and thereafter was promoted to Director of National

Account Sales.      In that capacity he secured accounts with the

majority of large hospital groups, winning a special company award

for his efforts.     Younger people were placed under Shattuck for

guidance   and   training.    In   due   course   one   of   these    younger

employees, 37-year-old Willie Williams, was promoted over Shattuck

to Executive Director of National Accounts. According to Shattuck,

John Bardis, a senior vice-president, explained that the new

                                    1
position was too demanding for someone of Shattuck's age and that

the younger Williams was better able to "come in early and stay

late."     Shattuck continued in his assignment, earning a year-end

bonus in 1989 and a raise in September 1990, for which he thanked

his superior, Williams, with a memorandum citing his earlier

conversation with Bardis about "dinosaurs," as he considered he was

viewed, and promising to step aside when and if his age became an

impediment to his job performance.     Williams forwarded the memo to

Bardis;     two weeks later Shattuck was discharged, purportedly as

part of a reduction in force.

     After     satisfying   administrative    prerequisites,   Shattuck

brought suit under the Age Discrimination in Employment Act, 29

U.S.C. §§ 621 et seq., appending state law claims thereto.          The

district court granted summary judgment for KCI on the state law

claims but Shattuck prevailed at trial on the age discrimination

claim, obtaining liquidated damages upon the jury's finding that

the ADEA violation was willful.        After unsuccessfully seeking

post-judgment relief, KCI appealed.        Shattuck cross appealed the

dismissal of his state law claims and the denial of front pay.

                                Analysis

1. After-acquired evidence.

         This case requires application of the Supreme Court's recent

teachings in McKennon v. Nashville Banner Publishing Co.1 that

evidence of employee wrongdoing acquired by the employer after

termination does not provide immunity from liability but may affect

     1
      --- U.S. ----, 115 S. Ct. 879, 130 L. Ed. 2d 852 (1995).

                                   2
the remedy.      On the eve of trial KCI learned that Shattuck had

falsely represented on his employment application that he was a

college graduate when in fact he had completed less than a year of

college work.     The company maintains that it would not have hired

Shattuck had it known of this falsification and would have fired

him upon its discovery.

         "Where an employer seeks to rely upon after-acquired evidence

of wrongdoing, it must first establish that the wrongdoing was of

such severity that the employee in fact would have been terminated

on those grounds alone if the employer had known of it at the time

of the discharge."2     KCI presented no such evidence.    Rather, it

contends that the relevant question is whether it would have hired

Shattuck had it known he did not have a college degree.      As proof

thereof, it cites Shattuck's testimony that he falsified the

application because he felt such would be a requirement for getting

hired. This is not sufficient; to hold otherwise would eviscerate

McKennon.     We are persuaded that the pertinent inquiry, except in

refusal-to-hire cases, is whether the employee would have been

fired upon discovery of the wrongdoing, not whether he would have

been hired in the first instance.3          The rationale underlying

consideration of after-acquired evidence is that the employer

should not be impeded in the exercise of legitimate prerogatives

     2
      Id. at ----, 115 S.Ct. at 886-87.
     3
      The McKennon Court applied a "would have been fired"
standard but did not reach the question presented herein because
the plaintiff's wrongdoing—theft of company documents—did not
occur until after hiring.

                                    3
and the employee should not be placed in a better position than he

would have occupied absent the discrimination.4 Cutting off relief

at    the    time    that    a    legitimate        discharge      would    have   occurred

accomplishes these ends.             Merely asking whether the employee would

have been hired fails to recognize that an employer may retain an

individual who has performed successfully, despite lack of formal

qualification.5             KCI    did    not       establish      that    it   would   have

discharged Shattuck upon discovering that he was not a college

graduate. It therefore cannot obtain the relief it seeks solely on

account of its after-acquired evidence.

2. Sufficiency of the evidence and other evidentiary matters.

           KCI also challenges the sufficiency of the evidence.                            It

discounts Shattuck's testimony that Bardis cited age as the reason

for    not    naming        him    executive         director,      contending     that    a

failure-to-promote claim was time-barred.                        Nonetheless, Bardis's

explanation         was   relevant       to   the     issue   of    the    motivation     for

Shattuck's subsequent discharge.6                     Shattuck also testified to a

post-termination conversation in which Williams attributed the

firing to Shattuck's failure to conform to a youthful corporate

       4
        Id.
       5
      Our decision is consistent with that of our Seventh Circuit
colleagues in Washington v. Lake County, Ill., 969 F.2d 250 (7th
Cir.1992). We are not aware that any other circuit has discussed
this precise issue, although the Eighth Circuit, after noting
Washington, inquired whether the employee would have been hired.
Welch v. Liberty Machine Works, Inc., 23 F.3d 1403 (8th
Cir.1994).
       6
      See Cortes v. Maxus Exploration Co., 977 F.2d 195 (5th
Cir.1992) (time-barred conduct may be relevant to show current
discrimination).

                                                4
image and to the memorandum reiterating Bardis's prior age-related

comments;     Shattuck's son likewise testified to an admission by

Williams that the firing was motivated by age.                     Contrary to KCI's

arguments, these were not mere figures of speech at which we have

looked     askance,    but     direct   statements         of     motivation.7       The

testimony    was    amenable     to   the        usual   challenge    on   grounds    of

interest, but that is a jury question which was resolved in

Shattuck's favor.       There also was evidence that Shattuck was not

targeted for layoff until after he had written the fateful memo to

Williams.     KCI contends that discharge on account of the memo is

not   necessarily      equivalent       to       discharge   on     account   of   age;

hypothetically, Bardis could have been angry because the memo was

untrue.     That may be so but the testimony also would support an

inference    that     Bardis    acted    because         Shattuck    challenged      his

attitude about age.      In reviewing a sufficiency challenge, we must

draw all reasonable inferences in favor of the verdict.8

          In addition, Shattuck presented the testimony of Larry

Simonsen, KCI's former chief of Human Resources, and Tomas Diaz,

      7
      KCI's reliance on Simmons v. McGuffey Nursing Home, Inc.,
619 F.2d 369 (5th Cir.1980), is misplaced. In Simmons, we
affirmed summary judgment for the defendant where the
uncontradicted evidence established that the plaintiff was fired
because of strained personal relations with certain board
members, to-wit, his former wife and her sisters, notwithstanding
testimony by the plaintiff's daughter that one board member
indicated a preference for a younger replacement. There, the
age-related reference related only to the new hire. Here, the
age-related statements bear directly on the reason that Shattuck
was discharged.
      8
       Boeing Co. v. Shipman, 411 F.2d 365 (5th Cir.1969) (en banc
).

                                             5
formerly     a   member     of   the   Human   Resources     staff.      Simonsen

reiterated his concern about the impact of the reduction-in-force

on older employees and other protected groups within the workforce,

and Diaz reported a statement by Bardis that a particular job

applicant was too old.             KCI strenuously claims error in the

admission of the Diaz and Simonsen testimony.                To the extent that

KCI    complains    of    testimony    about   race     or   gender   bias,     such

testimony was assiduously excluded by the district court and the

isolated instances in which references were made did not taint the

verdict. To the extent that KCI contests the admission of evidence

of age discrimination against other employees, it misconstrues the

law.       There is no proscription of evidence of discrimination

against other members of the plaintiff's protected class;                  to the

contrary, such evidence may be highly probative, depending on the

circumstances.9      The Bardis statement falls in that category.               Diaz

also testified to a similar statement by a district manager outside

Shattuck's chain of command;            that statement, further afield but

merely cumulative, did not prejudice KCI's substantial rights.

           The   evidence    amply     supports   not    only    a    finding     of

       9
      See, e.g., Lindsey v. Prive Corp., 987 F.2d 324 (5th
Cir.1993) (finding evidence of age discrimination in the fact
that three other dancers over 40 were dismissed at the same time
as plaintiff); Reeves v. General Foods Corp., 682 F.2d 515 (5th
Cir.1982) (testimony of another older employee who was forced to
resign bolstered the inference of age discrimination); accord
Visser v. Packer Engineering Associates, Inc., 924 F.2d 655 (7th
Cir.1991) (en banc ) (fellow employees may testify to racial
slurs and acts of racial discrimination against them, subject to
limitations designed to prevent the trial from fragmenting into
multiple mini-trials); Hawkins v. Hennepin Technical Center, 900
F.2d 153 (8th Cir.) (same), cert. denied, 498 U.S. 854, 111 S. Ct.
150, 112 L. Ed. 2d 116 (1990).

                                         6
discrimination but also of willfulness.                  As the Court recently

reaffirmed in Hazen Paper Co. v. Biggins,10 a violation of the ADEA

is willful if the employer either knew or showed reckless disregard

for the fact that its conduct was prohibited by statute.                  Viewed in

the light most favorable to the verdict, the evidence herein

establishes that KCI knew age discrimination was unlawful but,

notwithstanding, discharged Shattuck because of his age without

even colorable grounds to believe the ADEA did not apply.

3. Damages.

         KCI launches several attacks on the $159,467 damage award.

At the threshold it disingenously argues that back pay should be

ended as of the date of Shattuck's resignation from a higher paying

job at the Mediscus Group, Inc., a KCI competitor.                   It neglects to

mention that the resignation was prompted by a letter from KCI's

attorneys seeking compliance with a noncompetition agreement it had

with Shattuck.      KCI also cites numerous offsets that it contends

the jury failed to consider.       We agree with the district court that

KCI's calculations omit several of Shattuck's losses, including

lost wages during 1990 and medical and other compensable expenses.

We are not persuaded that the award was excessive.

          Shattuck cross appeals the district court's decision to

offset     front   pay   of   $112,606       by   the   award   of    $159,467   for

liquidated damages, resulting in a zero figure for the front pay

     10
          --- U.S. ----, 113 S. Ct. 1701, 123 L. Ed. 2d 338 (1993).

                                         7
award. Relying on Seventh Circuit cases,11 Shattuck argues that the

availability of liquidated damages is relevant to the decision

whether to award front pay only if, unlike the case at bar, the

front pay     award   is    speculative.         We    recently      reaffirmed     the

principle that "a substantial liquidated damage award may indicate

that    an   additional    award   of     front       pay   is    inappropriate     or

excessive"     without     adopting   a       bright-line        limitation.12      The

district court made the appropriate evaluation and we perceive no

abuse of discretion.

4. KCI's remaining assignments of error.

        KCI raises three objections to the jury charge.                       Only one

warrants mention.       KCI assigns error to the omission of an element

of a prima facie reduction-in-force case articulated in Williams v.

General Motors Corp.13—whether the plaintiff was qualified to assume

another position at the time of discharge.                  We do not agree.       When

an employment discrimination case reaches the fact finder, the

pertinent     inquiry      is   whether         the     plaintiff       has      proven

discrimination, not whether he has made a prima facie case.14

       11
      Price v. Marshall Erdman & Associates, Inc., 966 F.2d 320
(7th Cir.1992); E.E.O.C. v. Century Broadcasting Corp., 957 F.2d
1446 (7th Cir.1992); Hybert v. Hearst Corp., 900 F.2d 1050 (7th
Cir.1990).
       12
      Hadley v. VAM P T S, 44 F.3d 372, 376 (5th Cir.1995),
quoting Walther v. Lone Star Gas Co., 952 F.2d 119, 127 (5th
Cir.1992).
       13
      656 F.2d 120 (5th Cir.1981), cert. denied, 455 U.S. 943,
102 S. Ct. 1439, 71 L. Ed. 2d 655 (1982).
       14
      See, e.g., Armstrong v. City of Dallas, 997 F.2d 62 (5th
Cir.1993).

                                          8
       Finally KCI contests the denial of its motion for a mistrial

after a member of the jury venire on voir dire recounted, within

the hearing of the entire panel, his experience with layoffs.

Although the offending individual was removed for cause, KCI

maintains that his comments tainted the entire jury.                  We perceive

no abuse of discretion.             The comments were not presumptively

prejudicial15 and KCI requested neither questioning of the jurors

to   determine    any   taint16     nor   an   admonition   to   disregard   the

comments.

5. Summary judgment on the state law claims.

      Shattuck contends that the district court erred by deciding

KCI's motion for partial summary judgment without affording him an

opportunity to respond.           In fact, Shattuck chose not to respond

because the motion was filed late.                 At the district court's

invitation, Shattuck filed a motion for reconsideration;                   after

considering his arguments, the court denied the motion.                 Shattuck

suffered no prejudice from the procedural complications.

      On the merits, Shattuck did not present a triable issue with

respect    to   the   state   law    claims.      His   claim    of   intentional

infliction of emotional distress founders because KCI's actions do

not rise to the level of extreme and outrageous conduct.                     His

      15
      See United States v. Webster, 750 F.2d 307 (5th Cir.1984)
(the presumption of prejudice generally is reserved for jury
panels tainted by outside influence, and perhaps for premature
juror discussions about guilt or innocence), cert. denied, 471
U.S. 1106, 105 S. Ct. 2340, 85 L. Ed. 2d 855, 471 U.S. 1106, 105
S. Ct. 2341, 85 L. Ed. 2d 856 (1985).
      16
      See White v. Smith, 984 F.2d 163 (6th Cir.), cert. denied,
--- U.S. ----, 113 S. Ct. 2367, 124 L. Ed. 2d 273 (1993).

                                          9
failure to establish a factual dispute about KCI's intentions or

its right to enforce the noncompetition agreement bars the claim

for tortious interference with contract;17       even if the agreement

was overbroad, it was subject to reformation.18       The duress claim

fails for similar reasons.19

     AFFIRMED.

     17
      Sakowitz, Inc. v. Steck, 669 S.W.2d 105 (Tex.1984), as
modified by Sterner v. Marathon Oil Co., 767 S.W.2d 686
(Tex.1989).
     18
          Tex.Bus. & Comm.Code §§ 15.50-15.51.
     19
      Griffith v. Geffen & Jacobsen, P.C., 693 S.W.2d 724
(Tex.App.1985) (a threat to bring suit does not constitute duress
if the defendant has a legal right to do so).

                                   10