Court Opinion

ID: 4069574
Source: CourtListenerOpinion
Date Created: 2016-09-30 00:40:56.328843+00
Date Added: 2024-06-11T14:27:39.261108
License: Public Domain

ACCEPTED
                                                                                  14-15-00024-CV
                                                                  FOURTEENTH COURT OF APPEALS
                                                                               HOUSTON, TEXAS
                                                                              7/6/2015 5:12:55 PM
                                                                            CHRISTOPHER PRINE
                                                                                           CLERK

                          No. 14-15-00024-CV

                                                           FILED IN
                                                    14th COURT OF APPEALS
                 IN THE FOURTEENTH COURT OF APPEALS    HOUSTON, TEXAS
                           HOUSTON, TEXAS            7/6/2015 5:12:55 PM
                                                    CHRISTOPHER A. PRINE
                                                             Clerk
                       MICROSOFT CORPORATION,
                                       Appellant/Cross-Appellee,
                                   v.

                          MICHAEL MERCIECA,
                                       Appellee/Cross-Appellant.

      On Appeal from the 353rd District Court, Travis County, Texas
               Trial Court Cause No. D-1-GN-11-00130
                  The Honorable Tim Sulak, Presiding

                    APPELLANT’S REPLY BRIEF

BECK REDDEN LLP                         BECK REDDEN LLP
   Russell S. Post                         Eric J.R. Nichols
   State Bar No. 00797258                  State Bar No. 14994900
   rpost@beckredden.com                    enichols@beckredden.com
   Kate Skagerberg                         Gretchen S. Sween
   State Bar No. 24058578                  State Bar No. 24041996
   kskagerberg@beckredden.com              gsween@beckredden.com
1221 McKinney, Suite 4500               515 Congress Avenue, Suite 1900
Houston, TX 77010                       Austin, TX 78701
(713) 951-3700                          (512) 708-1000
(713) 951-3720 (Fax)                    (512) 708-1002 (Fax)

       Counsel for Appellant/Cross-Appellee, Microsoft Corporation

                       Oral Argument Requested
                                             TABLE OF CONTENTS

                                                                                                                  PAGE

TABLE OF CONTENTS ...................................................................................................i

INDEX OF AUTHORITIES..............................................................................................iv

INTRODUCTION ............................................................................................................ 1

ARGUMENT IN REPLY .................................................................................................. 4

         I.       MERCIECA PROVIDES NEITHER LAW NOR EVIDENCE TO
                  SUPPORT A CONCLUSION THAT MICROSOFT RETALIATED
                  AGAINST HIM BY COMPELLING HIS CONSTRUCTIVE
                  DISCHARGE. ........................................................................................... 4

                  A.        Mercieca Provides Neither Law Nor Evidence to
                            Support the Jury’s Constructive Discharge Finding. .................. 4

                            1.       Mercieca has no law to support the constructive
                                     discharge finding. ............................................................. 4

                            2.       Mercieca has no facts to support the
                                     constructive discharge finding. ......................................... 8

                            3.       Mercieca’s scattershot approach to proving
                                     constructive discharge is legally impermissible. ............ 13

                  B.        Mercieca Has No Evidence of Good Faith
                            Engagement in a Protected Activity. ........................................ 18

                            1.       Mercieca’s first HR complaint does not
                                     evidence good-faith engagement in a TCHRA-
                                     protected activity. ........................................................... 19

                            2.       Mercieca’s second HR complaint does not
                                     evidence good-faith engagement in a TCHRA-
                                     protected activity. ........................................................... 22

                  C.        Mercieca Has No Evidence of Actionable Retaliation. ............ 24

                            1.       Mercieca has no evidence of causation. ......................... 24
                                                   i
                          2.       Mercieca has no cognizable theory, only
                                   impermissibly stacked inferences to support his
                                   so-called “secret anti-Mercieca campaign.” ................... 26

        II.      ALTERNATIVELY, MERCIECA’S DAMAGES EVIDENCE IS SO
                 TAINTED THAT THE ONLY REMEDY IS TO REVERSE AND
                 RENDER JUDGMENT FOR MICROSOFT. .................................................. 31

                 A.       The Back-Pay Award Is Unsustainable. ................................... 32

                 B.       The Compensatory Damages Award Is Unsustainable. ........... 32

                 C.       The Attorneys’ Fee Award Is Unsustainable. ........................... 37

CONCLUSION AND PRAYER FOR RELIEF .................................................................... 38

CERTIFICATE OF SERVICE .......................................................................................... 40

CERTIFICATE OF COMPLIANCE .................................................................................. 41

APPENDIX*

        Jury Charge/Verdict ................................................................................ TAB A

        Findings of Fact and Conclusions of Law .............................................. TAB C

        Internal HR Submission styled “Formal Complaint of Michael
        Mercieca,” dated April 19, 2010 (18RR:MSFT90) .................................TAB E

        Employee Relations Investigations Intake Form, dated May 10,
        2010 (18RR:MSFT108) ........................................................................... TAB F

        Internal HR Submission styled “Supplementation,” dated June 9,
        2010 (18RR:MSFT121) .......................................................................... TAB G

        Plaintiff’s Third Amended Petition (CRS499-519)................................ TAB H

        Letter announcing Mercieca’s resignation, dated February 22,
        2012, effective April 2, 2012” (18RR:MSFT221) ................................... TAB I

        2011 Performance Review for Michael J.B. Mercieca, dated
        September 8, 2011 (18RR:MSFT216) .................................................... TAB J

                                                         ii
      Employee Relations Investigations Summary Memo, dated
      October 4, 2010 (18RR:MSFT180) ....................................................... TAB M

      Email string from M. Mercieca to G. Houston, dated May 5, 2010
      (19RR:MSFT297) ................................................................................... TAB N

* The Tabs included here are among those in the Appendix to the Appellant’s
Brief; for the Court’s convenience, those cited in this brief are attached here using
the same Tab numbers along with Tabs M & N, which contain additional material
drawn from the record.

                                                    iii
                                          INDEX OF AUTHORITIES

CASE                                                                                                        PAGE(S)

Akin, Gump, Strauss, Hauer & Feld, L.L.P. v. Nat’l Dev. and
   Research Corp.,
   299 S.W.3d 106 (Tex. 2009) .............................................................................. 26
Azubuike v. Fiesta Mart, Inc.,
   970 S.W.2d 60 (Tex. App.—Houston
   [14th Dist.] 1998, no pet.) ................................................................................... 23

Bates v. Dallas Indep. Sch. Dist.,
   952 S.W.2d 543 (Tex. App.—Dallas
   1997, writ denied) ................................................................................................. 6
Bennett v. Grant,
  2015 WL 1324857 (Tex. App.—Austin
  Mar. 20, 2015, no pet.)........................................................................................ 35
Bose Corp. v. Consumers Union of U.S., Inc.,
  466 U.S. 485 (1984) ............................................................................................ 31

Burlington N. & Santa Fe Ry. Co. v. White,
  548 U.S. 53 (2006) ................................................................................................ 1
Carlton v. Houston Cmty. Coll.,
  2012 WL 3628890 (Tex. App.—Houston
  [1st Dist.] Aug. 23, 2012, no pet.) (mem. op.) ..................................................... 5
Chandler v. CSC Applied Techs., LLC,
  376 S.W.3d 802 (Tex. App.—Houston
  [1st Dist.] 2012, pet. denied).......................................................15, 21, 24, 25, 31

City of Keller v. Wilson,
   168 S.W.3d 802 (Tex. 2005) ........................................................................30, 36
City of Laredo v. Montano,
   414 S.W.3d 731 (Tex. 2013) .............................................................................. 37

EEOC v. La. Office of Cmty. Servs.,
  47 F.3d 1438 (5th Cir 1995) ................................................................................. 1

                                                           iv
El Apple I, Ltd. v. Olivas,
   370 S.W.3d 757 (Tex. 2012) ........................................................................37, 38

Emeritus Corp. v. Blanco,
  355 S.W.3d 270 (Tex. App.—El Paso
  2011, pet. denied).............................................................................................. 7, 8
Faragher v. City of Boca Raton,
  524 U.S. 775 (1998) .............................................................................................. 8
Hancock v. Variyam,
  400 S.W.3d 59 (Tex. 2013)................................................................................. 35

Harris-Childs v. Medco Health Solutions, Inc.,
  169 F. App’x 913 (5th Cir. 2006) .................................................................19, 23
Hensley v. Echerhart,
  461 U.S. 424 (1983) ............................................................................................ 37
Houston Unlimited, Inc. v Mel Acres Ranch,
  443 S.W.3d 820 (Tex. 2014) .............................................................................. 31

Jefferson Cnty v. Davis,
   2014 WL 4262184 (Tex. App.—Houston
   [14th Dist.] Aug. 28, 2014, pet. filed) (mem. op.) .............................................. 33
Lozano v. Lozano,
   52 S.W.3d 141 (Tex. 2001)................................................................................. 26
Marathon Corp. v. Pitzner,
  106 S.W.3d 724 (Tex. 2003) ........................................................................26, 30

Mathis v. Lockwood,
  166 S.W.3d 743 (Tex. 2005) .............................................................................. 31

Methodist Hosp. v. Zurich Am. Ins. Co.,
  329 S.W.3d 510 (Tex. App.—Houston
  [14th Dist.] 2009, pet. denied) ............................................................................ 32

Mission Consol. Indep. Sch. Dist. v. Garcia,
  372 S.W.3d 629 (Tex. 2012) ................................................................................ 9

                                                          v
Passons v. Univ. of Tex. at Austin,
  969 S.W.2d 560 (Tex. App—Austin
  1998, no pet.) ........................................................................................................ 6

Pegram v. Honeywell,
  361 F.3d 272 (5th Cir. 2004) .............................................................................. 18
Ptomey v. Tex. Tech Univ.,
   277 S.W.3d 487 (Tex. App.–Amarillo
   2009, pet. denied)................................................................................................ 18

San Antonio Water Sys. v. Nicholas,
   -- S.W.3d --, 2015 WL 1873217
   (Tex. Apr. 24, 2015) .....................................................................................18, 19
Satterwhite v. City of Houston,
   602 F. App’x 585 (5th Cir. 2015) (per curiam) ................................................ 8, 9
Schlumberger Well Surveying Corp. v. Nortex Oil and Gas Corp.,
   435 S.W.2d 854 (Tex. 1968) .............................................................................. 26

Seminole Pipeline Co. v. Broad Leaf Partners, Inc.,
  979 S.W.2d 730 (Tex. App.—Houston
  [14th Dist.] 1998, no pet.) ................................................................................... 33

Soledad v. U.S. Dep’t of Treasury,
   304 F.3d 500 (5th Cir. 2002) .............................................................................. 24
T.O. Stanley Boot Co. v. Bank of El Paso,
   847 S.W.2d 218 (Tex. 1992) .............................................................................. 26

Tiner v. Tex. Dep’t of Transp.,
   294 S.W.3d 390 (Tex. App.—Tyler
   2009, no pet.) ................................................................................9, 10, 11, 12, 13

United Nat’l Ins. Co. v. AMJ Invests., LLC,
  447 S.W.3d 1 (Tex. App.—Houston
  [14th Dist.] 2014, pet. dism’d) ............................................................................ 38
Univ. of Texas-Pan Am. v. Miller,
  2013 WL 4818355 (Tex. App.—Austin
  Aug. 28, 2013, no pet.) (mem. op.)..................................................................... 18

                                                            vi
Vaughan v. Hartman Mmgt.,
  2010 WL 5514335 (Tex. App.—Houston
  [14th Dist.] Dec. 28, 2010, pet. denied) (mem. op.) ............................................. 4

Wal–Mart Stores, Inc. v. Itz,
  21 S.W.3d 456 (Tex. App.—Austin
  2000, pet. denied).................................................................................................. 7

Warrick v. Motiva Enter., L.L.C.,
  2014 WL 7405645 (Tex. App.—Houston
  [14th Dist.] Dec. 30, 2014, no pet.) (mem. op.) ...........................................19, 21

Winters v. Chubb & Son, Inc.,
  132 S.W.3d 568 (Tex. App.—Houston
  [14th Dist.] 2004, no pet.) ................................................................................... 37

Wright v. Wal-Mart Stores, Inc.,
  73 S.W.3d 552 (Tex. App.—Houston
  [1st Dist.] 2002, no pet.) ..................................................................................... 26

Zaffuto v. City of Hammond,
   308 F.3d 485 (5th Cir. 2002) .............................................................................. 24

                                                          vii
                                     INTRODUCTION

      State and federal law encourages employees to come forward in good faith

to report instances of discrimination and sexual harassment they experience in the

workplace.       These profoundly important civil rights laws are not intended,

however, to be vehicles for recovering enormous damages based on subjective

distress about workplace communication problems or for “judicial second-guessing

of employment decisions.” EEOC v. La. Office of Cmty. Servs., 47 F.3d 1438,

1448 (5th Cir 1995) (citation omitted); see also Burlington N. & Santa Fe Ry. Co.

v. White, 548 U.S. 53, 68 (2006) (reminding that Title VII “does not set forth ‘a

general civility code for the American workplace.’”) (quoting cases).

      Mercieca’s case rests solely on a subjective suspicion that a co-worker

complained about him because, at some undefined time, for some unexplained

reason, his entire management chain “conspired to launch their secret anti-

Mercieca campaign,” as he puts it, and used the co-worker as a pawn in their

“secret” scheme. Appellee’s Br. at 36. This theory—even if it had any factual

basis, which it does not—does not correspond to a claim under the Texas Labor

Code (“TCHRA”). Therefore, in response to Microsoft’s appeal, Mercieca does

not offer a coherent, linear narrative explaining how the evidence he adduced

provides     a    legally   sufficient   basis   to   satisfy   the   elements   of   a

retaliation/constructive discharge claim under Section 21.055 of the TCHRA.

Instead, he does what he did at trial: masks the absence of relevant facts with a
                                            1
scattershot recitation of his subjective take on various isolated incidents, some

dating back a decade before he engaged in the claimed “protected activity,” and

some that date well after he filed suit—and even after he finally left his job with

Microsoft voluntarily seven months later.1

       In struggling to defend the jury’s findings, Mercieca grossly misrepresents

the actual substance of the hodgepodge of evidence adduced at trial. For instance:

    He insists that his performance “became an issue for the first time in his
     career at Microsoft” only after he complained about his managers on April
     19, 2010. Appellee’s Br. at 51. In fact, the evidence shows that his annual
     review for 2005—five years earlier—noted that his current “role was not
     going to work out as a career choice” and indicated that he “did not meet
     expectations.” 18RR:MSFT7. Thereafter, his 2006 midyear review still
     noted “needs improvement” in multiple categories. 18RR:MSFT8.

    Similarly, he claims that he only got a poor review in September 2011
     because Eddie O’Brien, a Microsoft vice president, issued an “edict” to rate
     him at the lowest performance level. Appellee’s Br. at 15, 51. But Mercieca
     entirely ignores the uncontroverted evidence about how and why he was
     ranked as he was relative to his larger sales group by the person who
     actually prepared the review. See TAB J; 10RR20-29.

    Further, Mercieca asserts that, in “mid-2009 to early 2010,” his managers
     “made unsolicited comments about Mercieca needing a job.” Appellee’s Br.
     at 27. The incidents to which he alludes happened well before he claims to
     have engaged in any protected activity and thus, as explained below, cannot
     be “retaliation” under the TCHRA. Moreover, no one ever told him that he
     “needed to find a new job,” as Mercieca spins it. Id. He relies, for instance,
     on a joke O’Brien made in the summer of 2009 after Mercieca had
     performed with a band at a Microsoft event. Mercieca testified that,
     “[O’Brien] said that -- he said that if -- I could get my friend, Bono, from U2

       1
          In a two-week trial, Mercieca testified for days about his subjective perception of
isolated incidents spanning over a decade. 5RR92-268; 6RR220-278; 7RR6-277; 8RR5-221;
9RR6-67.

                                             2
      to give you a job.” That Mercieca found it “strange” in 2009 that O’Brien
      teased Mercieca about joining one of the most popular bands in history is
      hardly evidence that Mercieca was constructively discharged in 2012.
      8RR81-82.

    Additionally, to support the incorrect assertion that he was told to look for
     another job, Mercieca refers to announcements regarding positions within
     Microsoft, sent to him before April 19, 2010, that would have resulted in
     promotions. 18RR:MSFT39, 18RR:MSFT63. That he, who had initially
     worked for Microsoft in Australia and was from England, thought it “weird”
     that he was invited to apply for significant promotions to positions in New
     Zealand (on October 6, 2009) and in Europe (on February 11, 2010) is not
     evidence that he was constructively discharged in 2012.

    Equally inaccurate is his claim that, in a phone call on April 15, 2010, his
     direct supervisor “told Mercieca he needed to find a new job.” Appellee’s
     Br. at 27. The transcript of that call, which Mercieca secretly recorded,
     reveals that Mercieca spent over 40 minutes haranguing his supervisor, who
     hardly spoke. 11RR9-52. After he had reduced her to tears, he was the one
     who demanded: “Are you telling me to look for another job?,” to which she
     answered, “No.” 11RR30-31. Mercieca later told HR that she had
     threatened to fire him during this conversation, 7RR238-39, but that
     characterization was as untrue then as it is now.

    He also incorrectly asserts that a Microsoft HR director told his managers
     that they should “let it go” with respect to the co-worker’s complaints about
     Mercieca because there was “nothing there.” See Appellee’s Br. at 51. To
     support this reputed “fact,” he cites nothing but his own testimony—
     8RR217—when he attempted to explain the basis for his view that a
     “conspiracy” had been launched against him; his testimony is, however,
     nothing more than rank speculation.

      Ultimately, the most compelling “evidence” to which Mercieca’s brief refers

does not exist. The evidence actually adduced at trial does not satisfy the standard

of legal sufficiency to support a finding of retaliatory constructive discharge, as a

matter of law.

                                         3
                               ARGUMENT IN REPLY

      Mercieca’s brief pays relatively little attention to the core issue of whether

there was legally sufficient proof to support the jury’s liability findings. This is

because the record is bereft of evidence to support the findings of (1) constructive

discharge, (2) good faith engagement in a protected activity, or (3) but-for

causation; thus there are three distinct reasons for reversing and rendering a take-

nothing judgment for Microsoft. Additionally, if the Court were to reach the

multiple damages issues raised in the appeal and cross-appeal—which Microsoft

respectfully suggests will be unnecessary—the damages evidence is so flawed that

it amounts to no evidence at all, thus also warranting reversal and rendition.

I.    MERCIECA PROVIDES NEITHER LAW NOR EVIDENCE TO SUPPORT A
      CONCLUSION THAT MICROSOFT RETALIATED AGAINST HIM BY
      COMPELLING HIS CONSTRUCTIVE DISCHARGE.

      A. Mercieca Provides Neither Law Nor Evidence to Support the Jury’s
         Constructive Discharge Finding.

         1. Mercieca has no law to support the constructive discharge
            finding.

      Mercieca has no legal support for his position that the proof adduced at trial

is sufficient to sustain the jury’s finding that he was constructively discharged. In

responding to Microsoft’s legal sufficiency challenge, Mercieca instead leans

heavily on a breach of contract case. Appellee’s Br. at 25-26 (citing Vaughan v.

Hartman Mmgt., 2010 WL 5514335 (Tex. App.—Houston [14th Dist.] Dec. 28,

2010, pet. denied) (mem. op.)). The charge-error issue in Vaughan is irrelevant to
                                          4
the issue of the quantum and quality of proof required to support a constructive

discharge finding. Microsoft has not raised a charge-error issue in this appeal.

The issue is whether Mercieca adduced a scintilla of evidence that satisfies the

correct legal standard, which was accurately articulated by the trial court in the

jury charge: did his employer make “conditions so intolerable that a reasonable

person in the employee’s position would have felt compelled to resign.” TAB A,

Question 7.

      None of the constructive discharge cases cited in Mercieca’s brief supports

the notion that (1) the evidence of workplace incidents Mercieca adduced represent

conditions so “intolerable” as to reasonably compel a resignation or (2) a person

can sue his employer and then resign months later, as he did, declaring his

unilateral decision a retaliatory constructive discharge. For example, Mercieca

cites Carlton v. Houston Cmty. Coll., 2012 WL 3628890 (Tex. App.—Houston [1st

Dist.] Aug. 23, 2012, no pet.) (mem. op.), which affirmed the trial court’s decision

to grant summary judgment for defendant on plaintiffs’ retaliation claims. The

Carlton plaintiffs had complained of: being passed over for promotions, “effective

demotions and reduced responsibilities,” an “unfair” investigation of “sexual

harassment complaints,” and other “hostile acts.” Id. at *12. “[A]s a matter of

law,” the allegations did “not rise to the level of an adverse employment action.”

Id. at *13.

                                         5
      One of Mercieca’s few reported TCHRA cases, Passons v. Univ. of Tex. at

Austin, 969 S.W.2d 560, 564-65 (Tex. App—Austin 1998, no pet.), is also a

charge-error case—again, not an issue that Microsoft has raised. In Passons, the

court of appeals reversed based on the trial court’s erroneous instruction that the

plaintiff was required to show that the claimed discrimination was the “sole cause”

or “the basis” for the reputed constructive discharge.       Id. at 562 (emphasis

retained). To determine whether the charge error was harmful, the court evaluated

the record and concluded that “we cannot say that the cumulative effect of the

conduct here could not support a jury finding of constructive discharge.” Id. at

564. In reaching this conclusion, Passons notes evidence that, during a discrete

period following an audit, the plaintiff was “more harshly punished than were her

male counterparts for engaging in” the same misconduct, that she “was threatened

with criminal and financial sanctions which she contends were unjustified and

humiliating,” and that “her supervisors belittled and demeaned her in front of her

own staff, preventing her from effectively doing her job.” Id. As discussed below,

Mercieca adduced no comparable evidence. But even Passons recognized that

“mere harassment, without more, is insufficient” to create an issue of material fact

as to whether workplace conditions were objectively intolerable. Id. (citing Bates

v. Dallas Indep. Sch. Dist., 952 S.W.2d 543, 551 (Tex. App.—Dallas 1997, writ

denied)).

                                         6
      By contrast, Wal–Mart Stores, Inc. v. Itz illustrates what can constitute

legally sufficient evidence of constructive discharge. 21 S.W.3d 456 (Tex. App.—

Austin 2000, pet. denied). In Itz, the court of appeals relied on evidence, in

affirming judgment for the plaintiff, that the plaintiff’s supervisor: repeatedly

called her at home at night to ask about her relationship status; promised to put her

up in an apartment if she broke up with her boyfriend; complimented her body;

touched her inappropriately during a one-on-one back-room meeting; was “‘always

hovering around her and following her’”; gave her a “‘very forceful’” “‘body-to-

body’” hug; pressed her to break up with her boyfriend; and after she reported this

conduct, the employer did not respond to her at all.        Id. at 462-65, 473-75.

Mercieca did not adduce evidence of anything remotely akin to such conduct.

      Surprisingly, Mercieca suggests that the jury was “entitled” to adopt his

constructive discharge theory because his situation at Microsoft resembles the

circumstances presented in Emeritus Corp. v. Blanco, 355 S.W.3d 270 (Tex.

App.—El Paso 2011, pet. denied). Appellee’s Br. at 30. Emeritus affirmed a

constructive discharge claim brought by a whistleblower against an assisted living

facility. Plaintiff Blanco, an administrator, was brought in to try to right a non-

compliant facility. Id. at 272. She left her job after less than one year, thereafter

filing suit. The evidence showed that, during her brief tenure, her employer failed

to take action to remedy the following: “medications [were] not being properly

documented or dispensed, proper medical attention [was] not being provided and
                                         7
addressed, documentation to the residents charts [was] not being properly charted,

communication to the doctors [was] not up to date[.]” Id. at 275. At one point,

Blanco was called to an Alzheimer patient’s room, where the patient was lying in

bed with a mass protruding from her body. Id. at 273. Blanco had to track down a

nurse in another facility because hers did not have a single nurse on staff; she then

agonized as the patient “suffered from multiple issues while waiting for surgery.”

Id. at 274. Instead of responding to Blanco’s requests for support, her employer

“formally reprimanded” Blanco for permitting the facility to get “behind on

billing.” Id. She thereafter resigned, providing a detailed list of the concerns that

had shaken her, with an entreaty “that you immediately address these concerns to

ensure the safety and well being of the residents.” Id. at 275.

      No evidence in the record supports the notion that Mercieca experienced any

comparable “conditions so intolerable” that his after-the-fact resignation can be

deemed objectively reasonable. Id. at 281.

         2. Mercieca has no facts to support the constructive discharge
            finding.

      “‘[I]solated incidents (unless extremely serious)’ do not amount to

actionable conduct” under either Title VII or the TCHRA. Satterwhite v. City of

Houston, 602 F. App’x 585, 588 (5th Cir. 2015) (per curiam) (quoting Faragher v.

City of Boca Raton, 524 U.S. 775, 788 (1998)).        TCHRA and Title VII claims

“based on isolated incidents of non-extreme conduct” are routinely rejected “as

                                          8
insufficient as a matter of law.” Id. (citing cases and finding plaintiff failed to

make a prima facie case of retaliation).2 This is true under both federal and state

law. See, e.g., Tiner v. Tex. Dep’t of Transp., 294 S.W.3d 390, 395 (Tex. App.—

Tyler 2009, no pet.) (finding that the plaintiff “did not show that the working

conditions were unbearable, or that her employer was attempting to encourage her

to resign.”)

       In Tiner, the court painstakingly considered the various incidents upon

which the employee relied, in the light most favorable to the employee, and found

those incidents, taken together, did not amount to intolerable conditions as a

matter of law. Id. at 394-97. Tiner merits considerable attention, because the

isolated incidents at issue there are comparable to those upon which Mercieca

relies. See Appellee’s Br. at 27-29, 33-35.

       First, Tiner insisted that her employer had mishandled a conflict with one of

her co-workers. Tiner, 294 S.W.3d at 396. Likewise, Mercieca claims that his

managers mishandled Tracy Rummel’s internal complaint about his conduct, that

       2
          In Satterwhite, the plaintiff was actually demoted and received a salary cut at the
recommendation of the supervisor about whom the plaintiff had complained for allegedly saying
“Heil Hitler” in a meeting. 602 F. App’x at 586. By contrast, Mercieca experienced no
demotion or salary cut. Satterwhite and the precedent upon which it rests are persuasive. While
Mercieca takes issue with Microsoft’s reliance on federal cases, this critique is unfounded, as the
Supreme Court of Texas has “consistently held that those analogous federal statutes and the
cases interpreting them guide [its] reading of the TCHRA.” Mission Consol. Indep. Sch. Dist. v.
Garcia, 372 S.W.3d 629, 634 (Tex. 2012). Similarly, he asserts that Microsoft has no “on-point
authority” to support the type of constructive discharge theory pursued here. Appellee’s Br. at
19, 37. What is true is that neither party can point the Court to any case in which a constructive
discharge claim has been maintained based on facts similar to those Mercieca adduced at trial.

                                                9
he felt “marginalized” as a result, and that he had to file his own internal complaint

against his management chain to learn what had happened to Rummel’s complaint.

TAB E; Appellee’s Br. at 8, 9, 27. But the evidence shows that, after Rummel took

her initial concerns to Mercieca’s manager, to her own Microsoft manager, and to

its HR department, Microsoft directed her to follow up with the contracting agent

then employing her.3 18RR:MSFT48-50. Then, after Rummel became a full-time

employee, she reached out again to Microsoft’s HR department after experiencing

what she saw as repercussions attributable to Mercieca. TAB F. While Mercieca

threatened “legal escalation” unless he was told what Rummel had said about him

during her confidential interview, Microsoft explained that doing so would violate

company policy; however, Microsoft kept him fully informed as the investigation

moved       forward.      18RR:MSFT105;           18RR:MSFT126;           18RR:MSFT97;

18RR:MSFT115.

       Second, Tiner insisted that her own complaints were ignored, despite

evidence that the employer conducted an internal investigation, as Mercieca does.
294 S.W.3d at 396.         The evidence here shows that Microsoft conducted an

extensive investigation into both Rummel’s and Mercieca’s HR complaints.

18RR:MSFT260. Microsoft found insufficient evidence that its anti-discrimination

       3
         As noted in the Appellant’s brief, when Rummel first raised her concerns about
Mercieca, she was employed as a contract employee through an agency and assigned to work
with Mercieca on marketing issues for some of Mercieca’s Microsoft “partner”/client accounts.
Appellant’s Br. at 6-7.

                                             10
or anti-harassment policies had been violated in either instance, but reprimanded

Aulds for failing to disclose that she had once had a brief romantic relationship

with Mercieca, which they had both kept to themselves until 2010 when he

produced evidence of photocopied love letters and voicemails from 2001-2002

during the ERIT investigation. 18RR:MSFT178; 18RR:MSFT189. Aulds was

then removed from his management chain. 6RR83-85; 10RR68-69. No evidence

supports Mercieca’s insistence that she was “promoted” after the reprimand.4

Likewise, no adverse employment action against Mercieca resulted from the

internal investigation,5 although the investigator found reason to suspects his

motives. 18RR:MSFT178; 6RR75-79; TAB M.

       Third, Tiner insisted that the co-worker with whom she had difficulty was

“abusive, threatening, and unpleasant”—which Mercieca cannot reasonably

claim—yet the court of appeals found the proffered evidence “no basis to conclude

that [the employer] somehow created unendurable working conditions” or that this

situation “caused Tiner to resign months later.” 294 S.W.3d at 397. Similarly,

Mercieca complains that Aulds was permitted to give him a review in 2010

       4
         Appellee’s Br. at 14 (citing testimony that contradicts the contention that she was
“promoted,” 6RR183-84; 11RR86-87, and Mercieca’s subjective testimony that he nevertheless
regarded the change as a promotion, 6RR218-19).
       5
          As addressed in the Appellant’s brief, poor performance evaluations, which an
employee views as unfair, cannot form the basis of a constructive discharge claim. Appellant’s
Br. at 20-21, 30-31, 36-37. Regardless, Mercieca did not receive the poor review about which he
complains until September 8, 2011, well after members of his management chain had changed
and long after Rummel’s HR complaint against him had been resolved. 18RR:MSFT216; TAB J.

                                              11
(Appellee’s Br. at 14, 28) while his HR complaint about her was pending. Yet (1)

that review was largely positive; and (2) he did not resign until nearly two years

later, well after Aulds had been removed from his management chain entirely and

replaced by someone he liked and admired. 18RR:MSFT166; 7RR144;

18RR:MSF394; TAB I.

      Fourth, Tiner insisted “that her supervisor got into an argument with her,

ended her access to his email, and stopped talking to her”—yet the court of appeals

held that this conduct did “not rise to the level of conduct designed to badger,

harass, or humiliate Tiner,” and found no basis to “conclude that the conduct was

calculated to encourage her resignation.” Id. at 395. Here Mercieca relies heavily

on these kinds of communication issues, including his subjective interpretation of

emails as unduly “scrutinizing” his work. See, e.g., 18RR:MSFT57-60.

      Fifth, Tiner complained about the tone of meetings with her supervisors, as

Mercieca does. 294 S.W.3d at 396. Mercieca, however, points to nothing in any

meeting that could be viewed objectively as “badgering, harassing, or humiliating

or that [] was calculated to encourage [him] to resign.” Id. Indeed, the meetings

and phone calls with his colleagues that Mercieca secretly recorded show his

managers talking with him about business concerns and trying to resolve

communication issues as he raised them. 18RR:MSFT58-MSFT61. Furthermore,

as in Tiner, the meetings with his direct supervisor (Lori Aulds) and skip-level

                                        12
manager (David Tannenbaum) about which Mercieca complains “took place

months before [he] resigned.” 294 S.W.3d at 396.

      In short, Tiner, like Mercieca, “was not satisfied with the way her supervisor

handled [a] situation.” Id. at 397. But such subjective frustration “does not rise to

the level of an adverse employment action.” Id. Like Tiner, Mercieca “was not

fired or demoted, [he] was not reassigned or suspended. The minor actions that did

occur do not represent meaningful changes in the conditions or privileges of [his]

employment.” Id.; 8RR65-70.

         3. Mercieca’s scattershot approach            to   proving    constructive
            discharge is legally impermissible.

      Tiner helps to illuminate the fundamental failings of Mercieca’s constructive

discharge proof. But Mercieca’s constructive discharge theory is burdened by

additional analytical problems not present in Tiner. First, the incidents upon which

Tiner focused all happened within a discrete timeframe, while Mercieca’s

perceived slights are scattered over a period of years. Second, Tiner’s incidents all

happened before she resigned, thus conceivably supporting a claim that they

compelled her departure.      Mercieca did not resign until months after suing

Microsoft. CRS11-33; TAB J.

      The isolated incidents about which Mercieca complains were (and remain)

untethered to any discrete time that could rationally be relevant to his reputed

constructive discharge. Many of the incidents listed in his brief as comprising the

                                         13
“constructive discharge puzzle” can be disregarded, in accordance with basic rules

of cause and effect. Appellee’s Br. at 27-30. To begin with, Mercieca’s initial HR

“formal complaint,” dated April 19, 2010, describes concerns that do not relate to

any anti-discrimination or anti-harassment policy. TAB E; TAB M at MS37863.

Although Mercieca now tries to recast the April 2010 complaint as a “charge of

gender discrimination,”6 events that predate his April 2010 complaint cannot

logically show that he was constructively discharged as retaliation for making that

complaint. Appellee’s Br. at 32.

       For instance, Mercieca relies on the brief affair he had with Aulds in 2001.7

He then describes comments Aulds made to him in 2008, when he fully supported

her for the position of manager of his sales group.8 Id. at 5-6; 33-35.

       After emphasizing the 2001 affair, Mercieca restarts his narrative in “mid-

2009 and early 2010,” stating that “[o]n April 15, 2010”—several days before he

had lodged any complaint against his managers—“Aulds told Mercieca he needed

to find a new job.” Id. at 27. To support this statement, Mercieca cites his own

testimony in which he refers to a phone call he had with Aulds, which he secretly

recorded. Id. (citing 9RR61). The transcription of that phone call does not support

       6
         At trial, Mercieca asked the jury to find that his alleged constructive discharge was
motivated by his age or his national origin, which the jury declined to do. Tab A, Question 8.
       7
         Mercieca continues to reference a “sexual harassment” claim made in June 2010
premised on his 2001 relationship with Auld, which Microsoft investigated and found baseless
and which even Mercieca dropped before the formal charge conference. CRS520-521; TAB A.
       8
           See, e.g., 8RR259-61; 8RR264-65; 8RR267; 18RR:MSFT10.

                                             14
his representation that she told him he “needed to find a new job.” 11RR9-52.

Moreover, the call cannot be evidence of retaliatory constructive discharge, as

Mercieca had not yet made the reputed charge of discrimination. Even Mercieca’s

self-serving (and inaccurate) testimony about this call shows that he was having

communication problems with Aulds in “e-mail traffic going backwards and

forwards” about his expense reports or “T&Es.” 5RR238. Mercieca’s prickliness

in communications with his supervisor predated any alleged protected activity and

had nothing to do with allegations of discrimination.       16RR:PX35; see also

11RR9-52; 18RR:MSFT20; 18RR:MSFT21; 18RR:MSFT40; 18RR:MSFT55;

18RR:MSFT57. This dispute about expense reports cannot reasonably be deemed

part of what “compelled” him to resign years later.

       Similarly, Mercieca cites his own testimony, in which he states that, leading

up to March 26, 2010, he felt “subjected to a lot of harassment, bullying, and

retaliation.”   9RR7.   First, Mercieca’s subjective beliefs “are insufficient to

establish a prima facie case” of an unlawful employment practice. Chandler v.

CSC Applied Techs., LLC, 376 S.W.3d 802, 814 (Tex. App.—Houston [1st Dist.]

2012, pet. denied). Second, even Mercieca did not attribute his discomfort in the

months leading up to his HR “formal complaint” to discrimination. In that HR

complaint, he claimed that he felt “marginalized” because Rummel’s concerns

about him had “led to an escalation within HR” and to his management team, and

he found it “extremely upsetting” that “[a]t no time was I ever consulted about this
                                         15
by anyone.” TAB E. Feeling “marginalized” and distressed because Rummel had

voiced concerns about him cannot be evidence that Microsoft unlawfully retaliated

against him for memorializing those feelings in an HR complaint that had not yet

been made. Whatever Mercieca felt before April 19, 2010 when he engaged in the

alleged protected activity does not prove that afterwards Microsoft retaliated by

making circumstances so “intolerable” that a reasonable person would have been

compelled to resign two years later.

       Additionally, some of Mercieca’s purported evidence that he was

“constructively discharged” hinges on material that he only learned of through

litigation.   For instance, he refers obliquely to a “plan” to “eliminate” him.

Appellee’s Br. at 8, 27. His reputed proof of this “plan” is an internal Microsoft

document—emailed on April 16, 2010 between two upper-level managers—

describing a proposed “FY11 Field Sales Team Structure.”              16RR:PX152

(proposing, inter alia, eliminating Mercieca’s sales position as duplicative). There

is no evidence that Mercieca ever saw this document while he worked at

Microsoft. The document was prepared in response to a directive from upper

management about the need to consider workforce reductions throughout the

organization—and the proposal was never implemented.          6RR57-62.     Despite

Mercieca’s post-resignation efforts to seize upon this document as confirming his

suspicions, this internal discussion about a potential workforce reduction is

unremarkable.      Regardless, this evidence does not and cannot support a
                                        16
constructive discharge finding. Mercieca did not know about this document and,

as is evident by the fact that Microsoft continued to employ him for another two

years until he voluntarily left, the plan was not implemented. Furthermore, as the

proposal was made before Mercieca had lodged any HR complaint against his

managers, it cannot conceivably be considered “retaliation” against Mercieca for

an HR complaint he had not yet made. Compare 16RR:PX152 with TAB E.

      Equally unsound is Mercieca’s reliance on incidents that occurred after he

had already sued Microsoft and even after he finally announced his departure. For

instance, Mercieca cites as evidence of intolerable conditions his testimony about a

potential “FY2012” evaluation that never took place. Appellee’s Br. at 16, 29.

Mercieca’s last review was a mid-year review conveyed to him on March 9,

2012—several days after he had already resigned (via a letter sent from his

litigation counsel to Microsoft’s outside counsel on February 22, 2012).

Mercieca’s manager at that time, Joe Sahagian, only commenced giving the review

because Mercieca had not told Sahagian about the decision to resign, “effective

April 2, 2012,” until they were in the middle of the review. TAB I; 10RR216. An

event that never occurred and another that occurred only after a person has already

resigned cannot evidence “intolerable” conditions that compelled the resignation.

      Mercieca’s alleged constructive discharge is premised entirely on his

subjective interpretation of isolated incidents scattered over a ten-year period. This

is an insurmountable problem. He cannot articulate specific events, related in time
                                         17
to his decision to leave Microsoft, that the law recognizes as supporting a finding

of objectively intolerable workplace conditions sufficient to compel a reasonable

person to resign.    Even if the isolated incidents in Mercieca’s “constructive

discharge puzzle” could be amassed together, they are legally insufficient to show

intolerable conditions and thus actionable retaliation under the TCHRA.          But

isolated incidents “cannot be lumped together” to try to prove a discrete act, like a

constructive discharge. Univ. of Texas-Pan Am. v. Miller, 2013 WL 4818355, *8

(Tex. App.—Austin Aug. 28, 2013, no pet.) (mem. op.); see also Pegram v.

Honeywell, 361 F.3d 272, 280-81 (5th Cir. 2004) (finding various discrete

employment actions not actionable under continuing violations doctrine); Ptomey

v. Tex. Tech Univ., 277 S.W.3d 487, 494 (Tex. App.–Amarillo 2009, pet. denied)

(rejecting reliance on “events occurring between 1997 and [plaintiff’s] termination

in 2002” to prove employment experience was one of continuous discrimination).

      B.     Mercieca Has No Evidence of Good Faith Engagement in a
             Protected Activity.

      The    TCHRA      “protects   from      retaliation   employees   who   oppose

discriminatory employment practices.” San Antonio Water Sys. v. Nicholas, --

S.W.3d --, 2015 WL 1873217, *1 (Tex. Apr. 24, 2015). As the Texas Supreme

Court has recently stated, when “no reasonable person could have believed” that

the complained-of conduct “gave rise to an actionable sexual-harassment [or

discrimination] claim,” the employee cannot show that he “engage[d] in a

                                         18
protected activity under the TCHRA.” Id. at *1, *2 (vacating jury finding for

plaintiff on retaliation after concluding plaintiff “did not engage in a protected

activity under the TCHRA”).

      This Court recently articulated the correct standard for satisfying the

protected-activity element.    See Warrick v. Motiva Enter., L.L.C., 2014 WL
7405645, *7 (Tex. App.—Houston [14th Dist.] Dec. 30, 2014, no pet.) (mem. op.).

To qualify as a protected activity, “[t]he employee must put the employer on notice

that the employee is opposing practices that the [employee] believes constitute

prohibited discrimination.” Id. (quoting numerous cases). “[T]he relevant inquiry

is not [the employee’s] intentions in sending [for instance an] e-mail, but whether

her opposition to proscribed discriminatory practices was discernible in the e-mail

itself.” Id. at *8 (citing Harris-Childs v. Medco Health Solutions, Inc., 169 F.

App’x 913, 916 (5th Cir. 2006) (holding employee produced no evidence that

“when she made her complaints to management, [she] ever mentioned that she felt

she was being treated unfairly due to her race or sex”)).

             1. Mercieca’s first HR complaint does not evidence good-faith
                engagement in a TCHRA-protected activity.

      Mercieca now endeavors to recast his first HR complaint, submitted on April

19, 2010, as a charge of “gender-based discrimination.” Appellee’s Br. at 32. To

support this characterization, Mercieca directs the Court away from the HR

complaint itself—which says nothing about discrimination of any kind. TAB E.

                                         19
Instead, Mercieca points to a subsequent complaint that Mercieca made, which he

mentioned at some point during the internal ERIT investigation that commenced

after June 9, 2010. Appellee’s Br. at 32. During that investigation, Mercieca

suggested that he had been offended by an email that O’Brien had sent to his entire

U.S. sales team touting “Two Female Promotions to Director in USOEM!” TAB N.

Mercieca does not direct the Court to the reputedly offending email, but to a

summary of the entire internal investigation of his HR complaints. Appellee’s Br.

at 32 (citing 16RR:PX125). The summary upon which Mercieca relies notes that

he did not mention discrimination of any kind until after he was notified in May

2010 that Rummel’s allegations were to receive an ERIT investigation:

Tab M at MS37863.

      Regardless of whether O’Brien’s May 2010 email could be read objectively

as offensive—as opposed to an effort to celebrate gender diversity within company

management—it is not evidence that Mercieca’s April 2010 HR complaint alleged

discrimination.   First, his April 2010 HR complaint was made weeks before
                                        20
O’Brien’s email was sent. TAB G. A complaint about an email sent in May 2010

cannot support a finding that his April 2010 complaint informed Microsoft of a

charge of “gender discrimination.” Second, Mercieca’s invocation of the O’Brien

email would not have put Microsoft on notice that Mercieca was claiming

discrimination or sexual harassment.    “For workplace comments to provide

sufficient evidence of discrimination, the comments must be,” inter alia, “(1)

related to the plaintiff’s protected class, (2) proximate in time to the adverse

employment decision, … and (4) related to the employment decision at issue.”

Chandler, 376 S.W.3d at 816. The O’Brien email was not about a class to which

Mercieca belonged; the email was sent nearly two years before Mercieca resigned;

and the email was unrelated to any employment decision that affected Mercieca.

TAB N.

      Mercieca’s April 2010 HR complaint speaks for itself and confirms what the

record otherwise shows: that in late February 2010, Mercieca learned from Aulds

that Rummel had raised a concern about Mercieca’s behavior and that Rummel had

reported her concerns; he then began demanding an “exoneration” regarding a

“baseless rumor” about him that he felt Rummel had authored and Aulds had

needlessly referred to HR. 7RR159; 7RR161-64. An objective reading of the

April 2010 complaint (TAB E) and his communications with HR leading up to the

emailing of that complaint (18RR:MSFT64; 18RR:MSFT67) show that his conduct

did not qualify as a TCHRA-protected activity. See, e.g., Warrick, 2014 WL
21
7405645 at *8-*9 (explaining that employee’s email did not qualify as TCHRA-

protected activity because it only accused a co-worker of “unethical conduct,”

stated that she had written “the EEOC about how the [other] employee” was

“stealing time,” and “alleged serial bullying” but did not notify employer of

mistreatment “based on a protected characteristic”).     Instead, the April 2010

complaint confirms, as Mercieca later testified, that he felt “betrayed” that his

managers had been “talking behind his back” about Rummel’s concerns and had

not come first to him—a long-time employee—about the concerns of a mere

“contract” worker. 7RR168-170. During his initial conversations with HR, he did

not mention sexual harassment or discrimination based on gender or national origin

or any other protected ground. 12RR19-27; 12RR31-32; 12RR35. As he said at

the time, he was motivated to submit a counter HR complaint, directed against his

managers, to “play the percentage shot.” 7RR183.

            2. Mercieca’s second HR complaint does not evidence good-faith
               engagement in a TCHRA-protected activity.

      As explained in the Appellant’s brief, the “supplementation” that Mercieca’s

lawyer submitted to Microsoft’s HR department on June 9, 2010 on Mercieca’s

behalf does not evidence a good faith claim of discrimination. Appellant’s Br. at

41-43; see also TAB M at MS37863 (noting “it was not until [Mercieca] was

notified of the ERIT investigation in May 2010 [of Rummel’s allegations] that he

raised his allegations of discrimination.”). The “supplementation” does not add

                                       22
any concrete information regarding his grievances; it contains only conclusory

assertions that he is complaining of “harassing, discriminatory, and retaliatory

conduct based on his gender and national origin” and “sexual harassment,” words

invoked solely to trigger a Microsoft ERIT investigation of his grievances. TAB G;

8RR41-41;       11RR216-217;        18RR:MSFT97;         18RR:MSFT313.          The

“supplementation” was only submitted after Mercieca and his lawyer had learned

from a Microsoft ERIT investigator that Mercieca’s April 2010 complaint did not

fall within the scope of the company’s anti-discrimination and anti-harassment

policies. 18RR:MSFT97; 18RR:MSFT115; 18RR:MSFT74; 18RR:MSFT78-80.

Only after the investigator had explained at length precisely why Mercieca’s

grievances fell outside ERIT’s scope did Mercieca’s lawyer prepare the June 9

“supplementation” including, for the first time, vague charges of discrimination.

      As this Court has explained, “[a] vague charge of discrimination will not

invoke protection under the statute.” Azubuike v. Fiesta Mart, Inc., 970 S.W.2d
60, 65 (Tex. App.—Houston [14th Dist.] 1998, no pet.). Vague references to

discrimination and harassment do not “put the employer on notice that the

complaint was based on” unlawful employment practices. Harris-Childs, 169 F.

App’x at 916.

      Even assuming that Mercieca subjectively believed that what he had

experienced was unlawful “discrimination” or “sexual harassment,” his belief is

                                        23
insufficient as a matter of law. “Subjective beliefs of discrimination alone are

insufficient to establish a prima facie case.”

      C.     Mercieca Has No Evidence of Actionable Retaliation.

             1.     Mercieca has no evidence of causation.

      An employer cannot conceivably retaliate against an employee for engaging

in a protected activity until after the employee engages in something that qualifies

as TCHRA-protected conduct. See, e.g., Zaffuto v. City of Hammond, 308 F.3d
485, 493 (5th Cir. 2002) (holding that the plaintiff failed to state a Title VII

retaliation claim where the record demonstrated that his suspension occurred

before he engaged in the protected activity); Soledad v. U.S. Dep’t of Treasury,

304 F.3d 500, 507 (5th Cir. 2002) (affirming grant of summary judgment on

retaliation claim where there was little evidence to show that the defendant “took

certain actions because of [plaintiff’s] protected activity”). Further, Texas law

requires evidence of but-for causation: “plaintiff must establish ‘but for’ causal

nexus between the protected activity and the prohibited conduct.” Chandler, 376
S.W.3d at 823 (finding “no evidence [plaintiff] engaged in the protected activity of

complaining that he was not included [on trip list] because of his race and was then

subsequently terminated”) (emphasis retained).

      To try to elude his causation problem, Mercieca has continuously shifted this

retaliation theory. For instance, in his opening statement, Mercieca’s counsel

suggested that his managers’ motivation for “retaliating” against him was “because
                                          24
he’s got no high school education, he’s got no college education.” 3RR205. In

closing, Mercieca’s counsel argued that Microsoft was motivated by Mercieca’s

age (which no one at trial knew) and his national origin (British). 12RR121-22.

Age discrimination was not even mentioned in his EEOC charge or in either of his

internal HR complaints. TAB E & TAB G.

      Now, on appeal, Mercieca suggests that Microsoft “conspired to launch their

secret anti-Mercieca campaign” after he “report[ed] the O’Brien incidents.”

Appellee’s Br. at 36. Indeed, that “campaign” was so “secret” that he has no

evidence to support it. Moreover, this newest theory does not help him establish

causation because Mercieca only complained about O’Brien’s comments (which

were neither about, nor directed at, Mercieca) after Rummel had expressed

concerns about his conduct and after he had complained to HR because his

managers had listened to her. Compare TAB E with TAB N. Moreover, his alleged

“constructive discharge” was nearly two years thereafter. TAB I. In short, there is

no evidence of any adverse employment action proximate to any protected activity,

thus no causation. See Chandler, 376 S.W.3d at 816 (finding plaintiff presented

“no evidence” that racially derogatory comments “were made close to the time of

the adverse employment decision at issue” and thus could not support TCHRA

claims).

                                        25
             2. Mercieca has no cognizable theory, only impermissibly stacked
                inferences to support his so-called “secret anti-Mercieca
                campaign.”

      Mercieca’s brief confirms that he has never had a cognizable retaliation

theory. He relies on a conspiracy theory based entirely on suspicion and stacked

inferences. 8RR211-12. “[A]n inference stacked only on other inferences is not

legally sufficient evidence.” Marathon Corp. v. Pitzner, 106 S.W.3d 724, 728

(Tex. 2003) (citing Lozano v. Lozano, 52 S.W.3d 141, 148 (Tex. 2001)).

      A claim cannot withstand a legal sufficiency challenge by recourse to

inferences derived “from meager circumstantial evidence.” Wright v. Wal-Mart

Stores, Inc., 73 S.W.3d 552, 555 (Tex. App.—Houston [1st Dist.] 2002, no pet.).

“[A] vital fact may not be established by piling inference upon inference.”

Schlumberger Well Surveying Corp. v. Nortex Oil and Gas Corp., 435 S.W.2d 854,

858 (Tex. 1968). Evidence that is “‘so weak as to do no more than create a mere

surmise or suspicion’” of its existence is, in legal effect, no evidence. Akin, Gump,

Strauss, Hauer & Feld, L.L.P. v. Nat’l Dev. and Research Corp., 299 S.W.3d 106,

115 (Tex. 2009) (citation omitted). “‘[S]ome suspicion linked to other suspicion

produces only more suspicion, which is not the same as some evidence.’”

Marathon, 106 S.W.3d at 728 (citations omitted). Mercieca’s evidence equates to

nothing more than what the cases describe as “mere surmise or suspicion.” T.O.

Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 222 (Tex. 1992).

                                         26
      One aspect of Mercieca’s disparate retaliation theories has been consistent:

he believes that his managers listened to Rummel’s concerns about him and then

later “encouraged” her to “revive” those concerns by going to HR after he

submitted his April 2010 HR complaint objecting to his managers’ failure to

“consult” with him about Rummel’s concerns first.           8RR252; 8RR257-58;

11RR70-76.     He has repeatedly characterized Rummel’s concerns as a “false

sexual harassment” complaint. For instance, in Mercieca’s statement of the case,

he describes his retaliation claim this way: “Microsoft retaliated against him …

[and] caused or encouraged another Microsoft employee to file a false sexual

harassment charge against him.” Appellee’s Br. at 1; see also CRS6-10; TAB H

¶53 (alleging a “campaign of retaliation against” him).

      Even if such a theory could form the basis of actionable retaliation, no

evidence, only rank speculation, supports Mercieca’s theory that some “secret anti-

Mercieca campaign” was launched against him through Tracy Rummel.

Appellee’s Br. at 36. There is no evidence that anyone “caused or encouraged”

Rummel to complain about Mercieca. 4RR150-51.

      Moreover, there is no evidence that Rummel ever filed a “false sexual

harassment charge.” The uncontested evidence shows that, starting in November

2009, Rummel spoke to various Microsoft personnel about her concerns. She

spoke to Mercieca directly about her concerns. Then, after she joined Microsoft as

a full-time employee, Rummel experienced repercussions from having told
                                        27
Mercieca about her concerns, including being removed from an account that she

worked on with him. Therefore, she took these concerns to an HR director.

9RR201; 16RR:P25-A; 4RR95-106; TAB F. The HR intake form that resulted

does not support an inference that Rummel had been “encouraged” to bring

“sexual harassment” allegations against Mercieca, as he suggests. The intake form

notes the same issues Rummel had raised a few months earlier: that Mercieca had

tried to diminish her in front of a client by suggesting that she and he were dating

and by making inappropriate comments that were sexual in nature. TAB F. The

form also notes her new concern that, a few days after she spoke to Mercieca, a

Microsoft business partner asked that she be removed from his account. Id.

      Mercieca cites nothing in the record to support the contention that Rummel’s

statements, as recorded by HR, were actually false. For instance, when Rummel

called Mercieca to discuss her concerns about comments he had made at a client

dinner, Mercieca threatened to “circle back” to those who had attended the event.

9RR57; 16RR:P25-A. Mercieca followed through on his threat; and the client

representative to whom Mercieca “circled back” was Jason von Cordsen of Bass

Computers. Von Cordsen, called by Mercieca at trial as a witness, admitted that

nine days after the client event in question, he declared publicly at a Microsoft-

sponsored meeting that he was not “getting any value” from Rummel so he wanted

her taken off the account she was working on with Mercieca. 10RR84-86. In light

                                        28
of this testimony,9 Mercieca has no basis for suggesting that Rummel’s statement,

as reported on the HR intake form, was false:

TAB F.

          Mercieca also admitted at trial that he had invited Rummel—a young, single

woman—to stay at his house when she was in town and that he had made

comments at a client dinner that made her uncomfortable, as the HR intake form

states.       Compare id. with 8RR45-46, 9RR32, 4RR86-90.              Indeed, the partial

recording he secretly made of his conversation with Rummel shows that he knew

he had said things at a client dinner, for instance, about “playing guitar in [her]

bedroom,” that had caused her concern. 4RR87.

          The “evidence” Mercieca offered to buttress his suspicion that Rummel was

put up to making a complaint against him is no evidence at all: (1) a cell phone

record showing that Rummel, a Microsoft employee, called Aulds, a Microsoft

manager in Rummel’s division, at various times, including the day that Rummel

          9
         Von Cordsen also admitted that he was told about the confidential HR complaints
brought by and about Mercieca and that his sole source of information about these internal HR
matters was Mercieca himself. 10RR123-124.

                                             29
followed-up with HR about Mercieca (PX243); and (2) an indemnification

agreement that Microsoft executed with Rummel after Mercieca sued her (PX245).

Appellee’s Br. at 12, 16.10         A “secret anti-Mercieca campaign” (let alone

actionable retaliation) cannot reasonably be inferred from this evidence.

Marathon, 106 S.W.3d at 728 (reminding that suspicion “is not the same as some

evidence”).

       These efforts to spin a conspiracy out of stacked inferences epitomizes the

concerns described in the seminal legal sufficiency case City of Keller v. Wilson,

168 S.W.3d 802, 813-14 (Tex. 2005). In Keller, the Texas Supreme Court used, as

an example, evidence that a macaroni salad was spilled on a grocery store’s floor.

The court considered whether that fact could be used to support an inference that

the grocery store was on notice of the spill: “one might infer from cart tracks in

spilled macaroni salad that it had been on the floor a long time, but one might also

infer the opposite—that a sloppy shopper recently did both.” Id. at 814. As the

court explained, the competing inferences negate each other and amount to no

evidence: “When the circumstances are equally consistent with either of two facts,

neither may be inferred.” Id. at 813.

       Rummel and Aulds independently denied talking about Rummel’s complaint

against Mercieca after Rummel first sought guidance from Aulds in November
       10
          The Appellee’s brief only mentions the indemnification agreement, which was
improperly admitted, in passing, but the agreement was a focal point for Mercieca at trial.
4RR157; 4RR276-78; 12RR106-107; 12RR112-133.

                                            30
2009 and Aulds referred Rummel to HR. 4RR150-51; 11RR74.                   Moreover,

Mercieca admitted that he had no evidence that his complaints were “leaked” to

Aulds or Rummel to help prepare a complaint against him. 9RR38. Even if the

jury disregarded Rummel’s testimony about why she went back to HR when she

did, that would “[n]ormally . . . not [be] considered a sufficient basis for drawing a

contrary conclusion.” Mathis v. Lockwood, 166 S.W.3d 743, 745 (Tex. 2005)

(quoting Bose Corp. v. Consumers Union of U.S., Inc., 466 U.S. 485, 512 (1984)).

Rummel, like Mercieca, had a right to go to HR about her concerns under the

company’s open-door policy.       18RR:MSFT235B; 11RR227-229.            There is no

evidence showing that Microsoft would have done anything differently but for

Mercieca’s internal HR complaints. See Chandler, 376 S.W.3d at 823 (finding no

evidence of but-for causation to support a retaliation claim).

II.   ALTERNATIVELY, MERCIECA’S DAMAGES EVIDENCE IS SO TAINTED THAT
      THE ONLY REMEDY IS TO REVERSE AND RENDER JUDGMENT FOR
      MICROSOFT.

      The damages problems in this case, should the Court reach them, are so

fundamental as to warrant a reversal and rendering of judgment in Microsoft’s

favor. See Houston Unlimited, Inc. v Mel Acres Ranch, 443 S.W.3d 820 (Tex.

2014) (finding damages evidence legally insufficient and reversing and rendering a

take-nothing judgment in the defendant’s favor).

                                         31
      A. The Back-Pay Award Is Unsustainable.

      Back pay, as Mercieca acknowledges, may be awarded by a district court

under the TCHRA to compensate for a “prohibited employment action.”

Appellee’s Br. at 38. Here, there was no prohibited employment action, so no

back-pay award was proper. Moreover, the court had no discretion to make this

$623,065 award based on a jury finding that utterly ignored the instruction to

account for Mercieca’s failure to mitigate his damages. Mercieca’s only response

is that he had no duty to mitigate his damages while still employed by Microsoft.

Appellee’s Br. at 41. This is correct—a fortiori, he cannot, as a matter of law or

equity, recover for a claim alleging a “constructive discharge” brought when he

was still gainfully employed by Microsoft.      Additionally, Mercieca cites no

evidence of any job search other than Mercieca’s unsubstantiated testimony that he

looked at “a great many” job prospects. Id. at 41-42. He cannot cite anything

specific because no evidence of any job applications exists.       “A conclusory

statement is one that does not provide the underlying facts to support the

conclusion.” Methodist Hosp. v. Zurich Am. Ins. Co., 329 S.W.3d 510, 530 (Tex.

App.—Houston [14th Dist.] 2009, pet. denied). And a conclusory statement does

not even create a fact issue. Id.

      B. The Compensatory Damages Award Is Unsustainable.

      The compensatory damages award (of $300,000) is based on two jury

findings devoid of evidentiary support: a finding of $1,000,000 in mental anguish
                                       32
damages and $9,999,999.24 in punitive damages. The capped amount, although

well below what the jury awarded,11 cannot stand because no evidence supports it.

       Mercieca incorrectly insists that the jury was free to make whatever mental

anguish award it liked since the charge did not define the term. Appellee’s Br. at

42. For this proposition he cites Jefferson Cnty v. Davis, 2014 WL 4262184 (Tex.

App.—Houston [14th Dist.] Aug. 28, 2014, pet. filed) (mem. op.). This citation is

an odd choice as the case resulted in zeroing-out a $500,000 mental anguish award.

Id. at *9-*10.

       The more apt authority is Seminole Pipeline Co. v. Broad Leaf Partners,

Inc., 979 S.W.2d 730, 753 (Tex. App.—Houston [14th Dist.] 1998, no pet.), in

which this Court noted that “[e]motional distress is a subjective injury that is hard

to predict, often speculative, easily fabricated, difficult to verify, and almost

impossible to refute.” These pitfalls are precisely why the Supreme Court has

taken pains “to fashion principles permitting recovery for severe emotional distress

while maintaining constraints and safeguards against those who are merely

disappointed, embarrassed, or angry.” Id. Mercieca’s alleged distress does not

satisfy the standard because “liability does not extend to mere insults, indignities,

threats, annoyances, petty oppressions, or other trivialities[.]” Id. at 753-54.

       11
          Mercieca’s counsel invited error by urging the jury to award $1,000,000 in mental
anguish and “ten million or more” in punitive damages knowing full well that this was a capped
case. 12RR125; 12RR131.

                                             33
      Mercieca expressed his view that his experience at Microsoft was “soul

destroying,” and his brief, citing his own testimony as evidence, states that he

“now suffers from depression, for which he takes medication, and his sleep is

erratic.” Appellee’s Br. at 44. Yet his personal therapist/expert acknowledged at

trial that the only mental disorder with which Mercieca had been diagnosed,

starting in 2003, was “adjustment disorder,” not depression, for which he was

prescribed Lexapro, an anti-depressant, which he first took in 2001 after his

divorce. 9RR110-118; 9RR15. This diagnosis—which was consistent through

2011—was made over a decade before his alleged “constructive discharge.” Id.

Additionally, the “stressors” to which Mercieca’s therapist attributed his condition

were, initially, a dysfunctional sexual relationship and then a child-custody dispute

with his ex-wife that had required police intervention and resulted in Mercieca

being placed in handcuffs.     Id.   Mercieca’s therapist’s testimony established

uncontrovertibly that Mercieca’s mental-health issues began years before Rummel

raised concerns about his conduct in November 2009. As Mercieca’s brief states,

“the Bass Computers function” in November 2009 was “the event that started it

all” with respect to his grievances against Microsoft. Appellee’s Br. at 13. His

long-standing mental distress, which predates the Bass Computers event by over

six years, cannot be evidence of compensable “mental anguish damages” that

resulted from a constructive discharge that he claims occurred two years

thereafter. TAB A, Question 14.
                                         34
       Moreover, to support an award of mental anguish damages, “[t]here must be

both evidence of the existence of compensable mental anguish damages and

evidence to justify the amount awarded.” Hancock v. Variyam, 400 S.W.3d 59, 68

(Tex. 2013) (emphasis added).      Mercieca’s testimony regarding his anxieties

cannot justify the $1,000,000 finding that is the basis for the trial court’s award.

Indeed, a case Mercieca suggests is analogous—where the court found sufficient

evidence to uphold a mental anguish award—is completely inapposite.             See

Bennett v. Grant, 2015 WL 1324857 (Tex. App.—Austin Mar. 20, 2015, no pet.).

Bennett affirmed an award of only $5,000 in mental anguish damages where the

plaintiff had had to move repeatedly to protect himself from threats of violence

from the defendant and had evidence of pronounced symptoms engendered by the

stress. Id. at *11.

      Likewise, in seeking to defend the punitive damages finding, Mercieca

rattles off a selective list of his subjective view of events entirely denuded of

context. Appellee’s Br. at 51-52. His description of these events cannot withstand

scrutiny upon looking at the evidence itself. For example, Mercieca refers to

Tannenbaum’s answer to a hypothetical question from Mercieca’s lawyer about

what Aulds might have intended when she discussed Mercieca’s “mental state with

Mercieca’s partner”—i.e., with Jason von Cordsen, a client representative of Bass

Computers. Appellee’s Br. at 52. By looking at the testimony of von Cordsen

himself—the only witness, other than Aulds, privy to the conversation to which
                                        35
Mercieca alludes—one finds that he did not view the conversation as retaliatory,

malicious, or in any way negative:

          . . . it sounded like [Aulds] was
      genuinely concerned about Michael's state of
      paranoia, that -- that Michael -- Michael was
      just overdocumenting things and – and asking
      questions of other people, if you know, to --
      to where it just seemed to her that he was
      extremely paranoid and -- and something was
      going on.

          And I know that there was a taped
      conversation between me and Michael that
      evening and -- over the phone and I -- I had
      brought up to Michael that I genuinely thought
      -- at the time, I genuinely thought that --
      that they were -- they were concerned for him.

10RR92. Von Cordsen also described Aulds as “very professional” during this

conversation.    10RR127. Therefore, Mercieca’s reliance on how a different

witness, with no personal knowledge of this conversation, responded to a leading

question is no evidence of Microsoft’s “malice.”

      When the standard is “clear and convincing,” as it is with punitive damages,

courts “must consider all the evidence,” not just the evidence favorable to the

jury’s finding. Keller, 168 S.W.3d at 817 (emphasis retained). That would include

the evidence of Microsoft’s independent internal investigation, which revealed that

Mercieca, not his managers, seemed animated by suspect motives. See, e.g., TAB

M. Even if Mercieca’s self-serving and inaccurate representatives of the evidence

                                        36
are believed, on their face, these events do not amount to clear and convincing

evidence of malice or reckless indifference on Microsoft’s part.

       C. The Attorneys’ Fee Award Is Unsustainable.

       Finally, the attorneys’ fees award (of $769,505.98 plus $192,376.50

enhancement) cannot stand because it reflects an exercise of discretion that was

“‘so arbitrary and unreasonable as to amount to a clear and prejudicial error of

law.’” Winters v. Chubb & Son, Inc., 132 S.W.3d 568, 580 (Tex. App.—Houston

[14th Dist.] 2004, no pet.) (citation omitted). As explained in the Appellant’s

brief, the evidence used to support the fee award, which was calculated based on

the lodestar method, is so facially suspect that it amounts to no evidence.

Therefore, relying on that evidence in the wake of the Texas Supreme Court’s

recent mandates regarding the proof required to support an attorneys’ fee award is

indefensible. See El Apple I, Ltd. v. Olivas, 370 S.W.3d 757 (Tex. 2012);12 City of

Laredo v. Montano, 414 S.W.3d 731, 736 (Tex. 2013) (reaffirming El Apple and

confirming that hyperbolic testimony as “evidence” of attorneys’ fees is

unacceptable). Mercieca’s counsel admitted before the trial court that they had

manufactured their billing records instead of relying on contemporaneous records

that they claimed existed, yet failed to produce; and the trial court’s fee award fails

to account for the rampant improprieties and defects in those “records” that are
       12
          El Apple begins its analysis by citing Hensley v. Echerhart, 461 U.S. 424 (1983), which
first required attorneys seeking fee awards in employment discrimination cases to present
detailed hourly time records and to segregate issues and claims in their bills.

                                               37
evident on their face. 19RR:MSFT411. The court then inexplicably enhanced the

award, without indicating what, if any, factors might justify that decision, despite

Microsoft’s request for findings and conclusions. TAB C.

       Mercieca devotes substantial space to arguments under the relevant lodestar

factors to suggest what the trial court might have had in mind. Appellee’s Br. at

59-83. But see El Apple, 370 S.W.3d at 765 (accepting that a lodestar derived from

a “legitimate base” is presumptively reasonable while noting that an enhancement

must be justified). None of Mercieca’s arguments can redeem the illegitimate base

used to support his request for a fee award. Indisputably, a trial court abuses its

discretion by awarding fees based on flagrantly unreliable evidence. United Nat’l

Ins. Co. v. AMJ Invests., LLC, 447 S.W.3d 1, 16 (Tex. App.—Houston [14th Dist.]

2014, pet. dism’d) (holding that party choosing to use lodestar method is “required

to introduce sufficient evidence to allow the factfinder to apply it.”).

       Because every aspect of the damages award made to Mercieca is based on

legally insufficient evidence, the only appropriate relief is to reverse and render a

take-nothing judgment—should the Court even reach those issues.

                      CONCLUSION AND PRAYER FOR RELIEF

       For the foregoing reasons, as well as those described in the Appellant’s

brief, Microsoft asks that the Court reverse and render a take-nothing judgment for

Microsoft and award any other relief to which Microsoft shows itself justly

entitled.
                                          38
Respectfully submitted,

BECK REDDEN LLP

By: /s/ Gretchen S. Sween
   Eric J.R. Nichols
   State Bar No. 14994900
   enichols@beckredden.com
   Gretchen S. Sween
   State Bar No. 24041996
   gsween@beckredden.com
515 Congress Avenue, Suite 1900
Austin, TX 78701
(512) 708-1000
(512) 708-1002 (Fax)

   Russell S. Post
   State Bar No. 00797258
   rpost@beckredden.com
   Kate Skagerberg
   State Bar No. 24058578
   kskagerberg@beckredden.com
1221 McKinney Street, Suite 4500
Houston, TX 77010
(713) 951-3700
(713) 951-3720 (Fax)

COUNSEL FOR
APPELLANT/CROSS-APPELLEE
MICROSOFT CORPORATION

39
                             CERTIFICATE OF SERVICE

      I hereby certify that on July 6, 2015, a true and correct copy of the foregoing
Appellant’s Reply Brief has been served on all counsel of record by the e-filing
service provider, if registered, otherwise by email, as follows:

                                   Paul T. Morin
                               pmorin@austin.rr.com
                                  Roy A. Pollack
                              roypollack@yahoo.com
                                 503 W. 14th Street
                                 Austin, TX 78701

                                 D. Todd Smith
                            Smith Law Group, P.C.
                            todd@appealsplus.com
                      1250 Capital of Texas Highway South
                         Three Cielo Center, Suite 601
                               Austin, TX 78746

           Counsel for Appellee/Cross-Appellant, Michael Mercieca

                                          /s/ Gretchen S. Sween
                                          Gretchen S. Sween

                                         40
                          CERTIFICATE OF COMPLIANCE

      1.    On July 2, 2015, the Court granted Appellant’s motion to exceed the
previously established word limit for this reply brief. This brief complies with the
Court’s order because it contains 9,361 words, excluding the parts of the brief
exempted by Tex. R. App. P. 9.4(i)(2).

      2.    This brief complies with the typeface requirements of Tex. R. App. P.
9.4(e) because it has been prepared in a proportionally spaced typeface using
Microsoft Word 2007 in 14 point Times New Roman font.

      Dated: July 6, 2015.

                                          /s/ Gretchen S. Sween
                                          Gretchen S. Sween
                                          Counsel for Appellant

                                        41
                        No. 14-15-00024-CV

               IN THE FOURTEENTH COURT OF APPEALS
                         HOUSTON, TEXAS

                     MICROSOFT CORPORATION,
                                     Appellant/Cross-Appellee,
                                 v.

                        MICHAEL MERCIECA,
                                     Appellee/Cross-Appellant.

    On Appeal from the 353rd District Court, Travis County, Texas
             Trial Court Cause No. D-1-GN-11-00130
                The Honorable Tim Sulak, Presiding

                       APPENDIX TO
                  APPELLANT’S REPLY BRIEF

Tab

A     Jury Charge/Verdict

C     Findings of Fact and Conclusions of Law

E     Internal HR Submission styled “Formal Complaint of Michael
      Mercieca,” dated April 19, 2010 (18RR:MSFT90)

F     Employee Relations Investigations Intake Form, dated May 10, 2010
      (18RR:MSFT108)

G     Internal HR Submission styled “Supplementation,” dated June 9, 2010
      (18RR:MSFT121)

H     Plaintiff’s Third Amended Petition (CRS499-519)
I   Letter announcing Mercieca’s resignation, dated February 22, 2012,
    effective April 2, 2012 (18RR:MSFT221)

J   2011 Performance Review for Michael J.B. Mercieca, dated
    September 8, 2011 (18RR:MSFT216)

M   Employee Relations Investigations Summary Memo, dated October 4,
    2010 (18RR:MSFT180)

N   Email string from M. Mercieca to G. Houston, dated May 5, 2010
    (19RR:MSFT297)
  Tab A
Jury Charge/Verdict
                                                     DC         BK141 28 PG380

                                                  NO. D-l-GN- 11 -001030                        O~q~
         MICHAEL MERCIECA,                                  §
                                                            §
                                                                          IN THE DISTRICT COURT OF             'A//
                                    Plaintiff,              §
                                                            §
         vs.                                                §             353RD JUDICIAL DISTRICT
                                                            §
         TRACY RUMMEL and                                   §
         MICROSOFT CORPORATION,                             §
                                                            §
                                    Defendants.             §            TRAVIS COUNTY, TEXAS

                                           COURT'S CHARGE TO THE JURY

         LADIES AND GENTLEMEN OF THE JURY:

                After the closing arguments, you will go to the jury room to decide the case, answer the
         questions that are attached, and reach a verdict. You may discuss the case with other jurors only
         when you are all together in the jury room.

                Remember my previous instructions: Do not discuss the case with anyone else, either in
         person or by any other means. Do not do any independent investigation about the case or
         conduct any research. Do not look up any words in dictionaries or on the Internet. Do not post
         information about the case on the Internet. Do not share any special knowledge or experiences
         with the other jurors. Do not use your phone or any other electronic device during your
         deliberations for any reason.

                 Any notes you have taken are for your own personal use. You may take your notes back
         into the jury room and consult them during deliberations, but do not show or read your notes to
         your fellow jurors during your deliberations. Your notes are not evidence. Each of you should
         rely on your independent recollection of the evidence and not be influenced by the fact that
         another juror has or has not taken notes.

                 You must leave your notes with the bailiff when you are not deliberating. The bailiff will
         give your notes to me promptly after collecting them from you. I will make sure your notes are
         kept in a safe, secure location and not disclosed to anyone. When you are released from jury
         duty, the bailiff will promptly destroy your notes so that nobody can read what you wrote.

                  Here are the instructions for answering the questions:

                            1. Do not let bias, prejudice, or sympathy play any part in your ~~rn1Tha District Court
                                                                                             of Travis County, Texas
Flied In The District Court
 of Travis County, Texas                                    1

      MAY -5 2014
M                S'iiS(p./>M,                                                    1185
Arnall• Rodrfguez-Mendoza, Cleric
                        DC           BK141 28 PG381

2. Base your answers only on the evidence admitted in court and on the law that
   is in these instructions and questions. Do not consider or discuss any evidence
   that was not admitted in the courtroom.

3. You are to make up your own minds about the facts. You are the sole judges
   of the credibility of the witnesses and the weight to give their testimony. But
   on matters of law, you must follow all of my instructions.

4. If my instructions use a word in a way that is different from its ordinary
   meaning, use the meaning I give you, which will be a proper legal definition.

5. All the questions and answers are important. No one should say that any
   question or answer is not important.

6. Answer "yes" or "no" to all questions unless you are told otherwise. A "yes"
   answer must be based on a preponderance of the evidence unless you are told
   otherwise. Whenever a question requires an answer other than "yes" or "no,"
   your answer must be based on a preponderance of the evidence unless you are
   told otherwise.

   The term "preponderance of the evidence" means the greater weight of
   credible evidence presented in this case. If you do not find that a
   preponderance of the evidence supports a "yes" answer, then answer "no." A
   preponderance of the evidence is not mea5ured by the number of witnesses or
   by the number of documents admitted in evidence. For a fact to be proved by
   a preponderance of the evidence, you must find that the fact is more likely
   true than not true.

7. A fact may be established by direct evidence or by circumstantial evidence or
   both. A fact is established by direct evidence when proved by documentary
   evidence or by witnesses who saw the act done or heard the words spoken. A
   fact is established by circumstantial evidence when it may be fairly and
   reasonably inferred from other facts proved.

8. Do not decide who you think should win before you answer the questions and
   then just answer the questions to match your decision. Answer each question
   carefully without considering who will win. Do not discuss or consider the
   effect your answers will have.

9. Do not answer questions by drawing straws or by any method of chance.

10. Some questions might ask you for a dollar amount. Do not agree in advance
    to decide on a dollar amount by adding up each juror's amount and then
    figuring the average.

11. Do not trade your answers. For example, do not say, "I will answer this
    question your way if you answer another question my way."
                                 2

                                                      1186
                                        DC          BK14128 PG382

               12. Unless otherwise instructed, the answers to the questions must be based on the
                   decision of at least ten of the twelve jurors. The same ten jurors must agree on
                   every answer. Do not agree to be bound by a vote of anything less than ten
                   jurors, even if it would be a majority.

               13. You are the sole judges of the credibility or believability of each witness and
                   the weight to be given to his or her testimony. In weighing the testimony of a
                   witness you should consider his or her relationship to the Plaintiffs or to the
                   Defendants; his or her interest, if any, in the outcome of the case; his or her
                   demeanor or manner of testifying; his or her opportunity to observe or acquire
                   knowledge concerning the facts about which he or she has testified; his or her
                   candor, fairness and intelligence; and the extent to which he or she has been
                   supported or contradicted by other credible evidence. You may in short,
                   accept or reject the testimony of any witness in whole or in part.

       As I have said before, if you do not follow these instructions, you will be guilty of juror
misconduct, and I might have to order a new trial and start this process over again. This would
waste your time and the parties' money, and would require the taxpayers of this county to pay for
another trial. If a juror breaks any of these rules, tell that person to stop and report it to me
immediately.

                                                3

                                                                    1187
                                      DC           BK14128 PG383

Other Instructions and Definitions:

1.    Microsoft Corporation may act only through natural persons as its agents or employees.
      Any agent or employee of Microsoft Corporation may bind Microsoft Corporation by
      his/her acts and declarations made while acting within the scope of his/her authority
      delegated to him/her by Microsoft Corporation, or within the scope of his/her duties as an
      employee of Microsoft Corporation.

      "Course and scope" means that the employee committing the act was acting within the
      scope of his/her general authority and the act was in furtherance of Microsoft
      Corporation's business and for the accomplishment of the object for which the employee
      was hired.

2.    "Clear and convincing evidence" means the measure or degree of proof that produces a
      firm belief or conviction of the truth of the allegations sought to be established.
3.    "Malice" means a specific intent by the defendant to cause substantial injury or harm to
      Michael Mercieca.

4.    "Gross negligence'' means an act or omission by the defendant, which when viewed
      objectively from the standpoint of that defendant at the time of its occurrence involves an
      extreme degree of risk, considering the probability and magnitude of the potential harm
      to others; and of which that defendant has actual, subjective awareness of the risk
      involved, but nevertheless proceeds with conscious indifference to the rights, safety, or
      welfare of others.

5.    "Exemplary damages" means an amount that you may in your discretion award as a
      penalty or by way of punishment.

                                               4

                                                                   1188
                                       DC           BK14128 PG384

                                         QUESTION 1

Did Tracy Rummel publish the following in or after May 201 O?

       "Publish" means intentionally or negligently communicating the matter to a person other
       than Michael Mercieca who is capable of understanding its meaning.

       "Negligence" means failure to use ordinary care, that is, failing to do that which a person
       of ordinary prudence would have done under the same or similar circumstances or doing
       that which a person of ordinary prudence would not have done under the same or similar
       circumstances.

       "Ordinary care" means that degree of care that would be used by a person of ordinary
       prudence under the same or similar circumstances.

Answer "Yes" or "No" for each of the following:

   a. That Michael Mercieca sexually harassed her.

   Answer:

   b. That Michael Mercieca retaliated against her by getting her removed as marketing
      consultant from the Bass Computer account.

   Answer:

       If you answered "Yes" to any subpart in Question 1, then answer the following question
for each corresponding subpart. Otherwise, do not answer the following question.

                                         QUESTION 2

Were any of the statements in Question 1 defamatory concerning Michael Mercieca?

       "Defamatory" means an ordinary person would interpret the statement in a way that tends
       to injure a living person's reputation and thereby expose the person to public hatred,
       contempt or ridicule, or financial injury or to impeach the person's honesty, integrity,
       virtue, or reputation.

       In deciding whether a statement is defamatory, you must construe the statement as a
       whole and in light of the surrounding circumstances based upon how a person of ordinary
       intelligence would perceive it.

                                                5

                                                                    1189
                                         DC           BK14128 PG385

Answer "Yes" or "No" for each of the following you have found in Question 1, if any:

   a. That Michael Mercieca sexually harassed her.

   Answer:     _\-+-j_;_~----
   b. That Michael Mercieca retaliated against her by getting her removed as marketing
      consultant from the Bass Computer account.
Answer:      -~"!._~_(___

        If you answered "Yes" to any subpart in Question 2, then answer the following question
for each corresponding subpart. Otherwise, do not answer the foJJowing question.

                                          QUESTION3

Were any of the following statements in Question 1 substantially true at the time it was made as
it related to Michael Mercieca?

         A statement is "substantially true" if it varies from the literal truth in only minor details
or if, in the mind of the average person, the gist of it is no more damaging to the person affected
by it than a literally true statement would have been.

       In connection with this question, you are instructed that Tracy Rummel has the burden to
prove substantial truth by a preponderance of the evidence.

Answer "Yes" or "No" for each of the following you have found in Question 1, if any:

   a. That Michael Mercieca sexually harassed her.

   Answer:     _ _.#.___o_ __
   b. That Michael Mercieca retaliated against her by getting her removed as marketing
      consultant from the Bass Computer account.
                     A/ i)
   Answer:           t"

       If you answered "No" to any subpart in Question 3, then answer the following question
for each corresponding subpart. Otherwise, do not answer the following question.

                                                  6

                                                                      1190
                                        DC           BK14128 PG386

                                          QUESTION 4

Did Tracy Rummel convey any of the statements to persons other than those having an interest
or duty in the matter to which the communications relate?

Answer "Yes" or "No" for each of the following you have found in Question 1, if any:

   a. That Michael Mercieca sexually harassed her.

   Answer:             N   c.I

   b. That Michael Mercieca retaliated against her by getting her removed as marketing
      consultant from the Bass Computer account.

   Answer:

       If you answered "No" to either subpart of Question 4, then answer the corresponding
subpart of the following question. Otherwise, do not answer the following question.

                                          QUESTIONS

Do you find that, at the time Tracy Rummel made the statements below, she

       1.     Knew the statement was false as it related to Michael Mercieca, or

       2.     Made the statement with a high degree of awareness that it was probably false, to
              an extent that Tracy Rummel in fact had serious doubts as to the truth of the
              statement?

       "False" means that a statement is (i) not literally true and (ii) not substantially true. A
       statement is "substantially true" if it varies from the literal truth in only minor details or
       if, in the mind of the average person, the gist of it is no more damaging to the person
       affected by it than a literally true statement would have been.

Answer "Yes" or "No" as to each statement to which you found in Question l, if any.

   a. That Michael Mercieca sexually harassed her.

   Answer:
   b. That Michael Mercieca retaliated against her by getting her removed as marketing
      consultant from the Bass Computer account.

   Answer:        t1   0

                                                 7

                                                                     1191
                                       DC          BK14128 PG387

       If you answered "Yes" to either subpart of Question 1, then answer the corresponding
subpart of the following question. Otherwise, do not answer the following question.

                                        QUESTION6

Do you find that Michael Mercieca consented to, authorized, procured, or invited the publication
of the statements you found in Question I?

Answer "Yes" or "No" for each of the following you have found in Question 1, if any:

   a. That Michael Mercieca sexually harassed her.

   Answer:        Al    0

   b. That Michael Mercieca retaliated against her by getting her removed as marketing
      consultant from the Bass Computer account.

   Answer:         AJO

                                        QUESTION7

Was Michael Mercieca constructively discharged from Microsoft?

       An employee is considered to have been "constructively discharged" when an employer
       makes conditions so intolerable that a reasonable person in the employee's position
       would have felt compelled to resign.

Answer "Yes" or "No."

       Answer:   --"+-l.,-~---
       If you answered "Yes" to Question 7, then answer the following question. Otherwise, do
not answer the following question.

                                               8

                                                                   1192
                                       DC          BK141 28 PG388

                                        QUESTION 8

Were any of the following motivating factors in Michael Mercieca's constructive discharge, if
any?

       A "motivating factor" in an employment decision is a reason for making the decision at
       the time it was made. There may be more than one motivating factor for an employment
       decision.

Answer "Yes" or "No" for each of the following:

   a. Michael Mercieca's age:

   b. Michael Mercieca's national origin:

        If you answered "Yes" to any subpart of Question 8, then answer the following question
for that corresponding subpart. Otherwise, do not answer the following question.

                                        QUESTION9

Would Microsoft have taken the same action inquired about in Question 8 when it did, in the
absence of the following impermissible motivating factor(s) you have found in Question 8, if
any?

Answer "Yes" or "No" for each corresponding subpart yo have found in Question 8, if any:

   a. Michael Mercieca 's age:

   b. Michael Mercieca 's national origin:

                                       QUESTION 10

Did Michael Mercieca oppose a discriminatory practice, make or file a complaint of
discrimination, or assist or participate in an investigation concerning a complaint of
discrimination based on a reasonable, good faith belief that the conduct he complained of
actually violated anti-discrimination, anti-harassment laws, even if he was ultimately mistaken?

Answer "Yes" or "No."

       Answer: --~.f-f-~---

                                               9

                                                                    1193
                                       DC        BK141 28PG389

      If you answered "Yes" to Questions 7 AND 10, then answer the following question.
Otherwise, do not answer the following question.

                                        QUESTION 11

Was Michael Mercieca constructively discharged because he opposed a discriminatory practice,
made or filed a complaint of discrimination, or assisted or participated in an investigation
concerning a complaint of discrimination?

       Michael Mercieca must establish that without his opposition to a discriminatory practice,
       making or filing a complaint of discrimination, or assisting or participating in an
       investigation concerning a complaint of discrimination, if any, Michael Mercieca would
       not have been constructively discharged when, and if, he was. There may be more than
       one cause for an employment decision. Michael Mercieca need not establish that his
       filing a complaint of discrimination or participating in an investigation concerning a
       complaint of discrimination, if any, was the sole cause of the constructive discharge, if
       any.

Answer "Yes" or "No."

       Answer:   --i---'-5____
        If you answered "Yes" to subpart (a) to Question 4 OR "Yes" to subpart (a) of Question
5, then answer the following question. Otherwise, do not answer the following question.

                                        QUESTION 12

What sum of money, if paid now in cash, would fairly and reasonably compensate Michael
Mercieca for his injuries, if any, that were proximately caused by the statement that Michael
Mercieca sexually harassed her?

        Consider the elements of damages listed below and none other. Consider each element
separately. Do not award any sum of money on any element if you have otherwise, under some
other element, awarded a sum of money for the same loss. That is, do not compensate twice for
the same loss, if any. Do not include interest on any amount of damages you find.

Answer separately in dollars and cents for damages, if any.

                                               10

                                                                 1194
                                        DC           BK14128 PG390

       I.     Injury to reputation sustained in the past.

              Answer:$           5J    Ob    o

       2.     Injury to reputation that, in reasonable probability, Michael Mercieca will sustain
              in the future.

              Answer:$- - - - - - -

       3.     Mental anguish sustained in the past.

              Answer: $     '5 J o o o
                        -----------
      4.      Mental anguish that, in reasonable probability, Michael Mercieca will sustain in
              the future.

              Answer:$- -- l)- - - -

        If you answered "Yes" to subpart (b) to Question 4 OR "Yes" to subpart (b) of Question
5, then answer the following question. Otherwise, do not answer the following question.

                                         QUESTI~ 13
                                                 I
What sum of money, if paid now in cash, would fairly and reasonably compensate Michael
Mercieca for his injuries, if any, that were proximately caused by the statement that Michael
Mercieca retaliated against her by getting her removed as marketing consultant from the Bass
Computer account?

        Consider the elements of damages listed below and none other. Consider each element
separately. Do not award any sum of money on any element if you have otherwise, under some
other element, awarded a sum of money for the same loss. That is, do not compensate twice for
the same loss, if any. Do not include interest on any amount of damages you find.

      Answer separately in dollars and cents for damages, if any.

       1.     Injury to reputation sustained in the past.

              Answer: $- - - - - --

      2.      Injury to reputation that, in reasonable probability, Michael Mercieca will sustain
              in the future.

              Answer:$- - - - - - -
                                                 11

                                                                     1195
                                                    DC     BK141 28PG391

       3.     Mental anguish sustained in the past.

              Answer:$- - - - - - -

       4.     Mental anguish that, in reasonable probability, Michael Mercieca will sustain in
              the future.

              Answer:$- - - - - - -

        If you answered "No" to any subpart to Question 9 or "Yes" to Question 11, then answer
the following question. Otherwise, do not answer the following question.

                                                     QUESTION 14           ~~

What sum of money, if any, if paid now in cash,                   ~fairly
                                                                    and reasonably compensate
Michael Mercieca for his damages, if any, that resulted such conduct?
        Consider the following elements of damages, if any, and none other. Do not include
interest on any amount of damages you may find. Do not include back pay or interest in
calculating compensatory damages, if any. Do not include in your answer any amount that you
find Michael Mercieca could have avoided by the exercise of reasonable care.

       You are instructed that any monetary recovery for "back pay" is subject to federal income
taxes. Any recovery for mental anguish in the past and future is not subject to federal income
taxes.
Answer in dollars and cents for damages, if any.

1.     Back pay.
       "Back pay" is that amount of wages and employment benefits that Michael Mercieca
       would have earned if he had not been subjected to his employer' s unJawful conduct less
       any unemployment compensation benefits he has received in the interim.
       "Employment benefits" include sick-leave pay, vacation pay, profit-sharing benefits,
       stock options, pension fund benefits, housing or transportation subsidies, bonuses,
       monetary losses incurred as a result of the loss of health, life, dental, or similar insurance
       coverage.
       Answer: $ (p       Qi    ~/ 0 h5
2.     Mental anguish damages in the past.
       Answer: $      l        i> "
                                      0
                                      J
                                          0 "   a

                                                         12

                                                                           1196
                                        DC         BK141 28 PG392

3.     Compensatory damages in the future, which include loss of benefits, bonuses, stock
       options, 401k matching contributions, and any profit-sharing plan contributions, that, in
       reasonable probability, will be sustained in the future.
                      0
       Answer:$- - -- - --
4.     Mental anguish that, in reasonable probability, will be sustained in the future.
       Answer:$- - - -0--          -

Answer the following question only if you answered:

       (1) "Yes" unanimously to any subpart of Question I

       (2) AND "Yes" unanimously to the corresponding subpart of Question 2;

       (3) AND "No'' unanimously to the corresponding subpart of Question 3;

       (4) AND "Yes" unanimously to the corresponding subpart of Question 4; OR ''No" to
           the corresponding subpart of Question 4 and "Yes" unanimously to the
           corresponding subpart of Question 5;

       (5) AND answered any subpart of Questions 12 OR 13 with a number greater than zero.
Otherwise, do not answer the following question.

       To answer "Yes" to the following question, your answer must be unanimous. You may
answer "No" to the following question only upon a vote of ten or more jurors. Otherwise, you
must not answer the following question.

                                         QUESTION 15

Do you find by clear and convincing evidence that the harm to Michael Mercieca resulted from
malice or gross negligence attributable to Tracy Rummel?
Answer "Yes" or "No."

       Answer: --~-+--e_S____

      Answer the following question only if you unanimously answered "Yes" to Question 15.
Otherwise, do not answer the following question.
      You must unanimously agree on the amount of any award of exemplary damages.
Otherwise, you must not answer the following question.

                                                13

                                                                    1197
                                         DC         BK1~1 28   PG393

                                         QUESTION 16
What sum of money, if any, if paid now in cash, should be assessed against Tracy Rummel and
awarded to Michael Mercieca as exemplary damages, if any, for the conduct found in response to
Questions I and 2?

Factors to consider in awarding exemplary damages, if any, are-

       l . The nature of the wrong.

       2. The character of the conduct involved.

       3. The degree of culpability of Tracy Rummel.

       4. The situation and sensibilities of the parties concerned.

       5. The extent to which such conduct offends a public sense of justice and propriety.

       6. The net worth of Tracy Rummel.

Answer in dollars and cents, if any.
       Answer:$     I   bJ i1   ~   f7

       Answer the following question if you have answered "Yes" to Question 8. Otherwise, do
not answer the following question.

                                         QUEST.6N 17
                                                I
Did Microsoft make a good-faith effort to prevent discrimination in its workplace?

Answer " Yes" or "No."

       Answer: - - -- - - -

       Answer the following question only if you:

       ( l) unanimously answered "Yes" to any subpart of Question 8;

       (2) OR unanimously answered "Yes" to Question 11

       (3) OR unanimously answered "No" to Question 17

       (4) AND answered any subpart of Question 14 with a number greater than zero.

Otherwise, do not answer the following question.

                                                14

                                                                       1198
                                           DC        BK14128 PG394

       To answer "Yes" to the following question, your answer must be unanimous. You may
answer "No" to the following question only upon a vote of ten or more jurors. Otherwise, you
must not answer the following question.

                                            QUESTION 18
Do you find by clear and convincing evidence that Microsoft Corporation engaged in the
discriminatory practice(s) that you have found in answer to Question 8 or I 1, with malice or with
reckless indifference to the right of Michael Mercieca to be free from such practices?
Answer "Yes" or "No."

       Answer:       ~ i .S
      Answer the following question only if you unanimously answered "Yes" to Question I 8.
Otherwise, do not answer the following question.

       You must unanimously agree on the amount of any award of exemplary damages.

                                            QUESTION 19
What sum of money, if any, if paid now in cash, should be assessed against Microsoft
Corporation and awarded to Michael Mercieca as exemplary damages, if any, for the conduct
found in response to Question 8 or 11?

       I. Factors to consider in awarding exemplary damages, if any, are-

       2. The nature of the wrong.
       3. The character of the conduct involved.

       4. The degree of culpability of Microsoft Corporation.

       5. The situation and sensibilities of the parties concerned.

       6. The extent to which such conduct offends a public sense of justice and propriety.

       7. The net worth of Microsoft Corporation.

Answer in dollars and cents, if any.
       Answer: $     't   Cf   q 'f. 'I IfIf, d Y
                                 J

                 f    M///,·o~

                                                    15

                                                                     1199
                                        DC         BK14128 PG395

        When you go into the jury room to answer the questions, the first thing you will need to
do is choose a presiding juror.

       The presiding juror has these duties:

           1. Have the complete charge read aloud if it will be helpful to your deliberations;

           2. Preside over your deliberations, meaning manage the discussions, and see that
              you follow these instructions;

           3. Give written questions or comments to the bailiff who will give them to the judge;

           4. Write down the answers you agree on;

           5. Get the signatures for the verdict certificate; and

           6. Notify the bailiff that you have reached a verdict.

       Unless otherwise instructed, you may answer the questions on a vote of ten jurors. The
same ten jurors must agree on every answer in the charge. This means you may not have one
group of ten jurors agree on one answer and a different group of ten jurors agree on another
answer.

       If ten jurors agree on every answer, those ten jurors sign the verdict.

       If eleven jurors agree on every answer, those eleven jurors sign the verdict.

        If all twelve of you agree on every answer, you are unanimous and only the presiding
juror signs the verdict.

       All jurors should deliberate on every question. You may end up with all twelve of you
agreeing on some answers, while only ten or eleven of you agree on other answers. But when
you sign the verdict, only those ten, or eleven, who agree on every answer will sign the verdict.

       Submitted to the jury the   s:'"" day of May, 2014, at       !;;: S:{, o'clock i.m.

                                                16

                                                                   1200
                                            DC        BK141 28 PG396

..

                                  CERTIFICATE OF JURY'S VERDICT

                                                          Printed Name of Presiding Juror

     _ _ Our verdict is not unanimous. Eleven of us have agreed to each and every answer and
     have signed the certificate below.

     _ _ Our verdict is not unanimous. Ten of us have agreed to each and every answer and have
     signed the certificate below.

                   (To be signed by those rendering the verdict if the jury is not unanimous.)

     Jurors' Signatures                                   Jurors ' Printed Names

     8. _ _ _ _ _ _ _ _ _ __                     _

     11. ~~~~~~~~~~~~~~

     Received from the jury the   ~day of May, 20 J4, at '-'.I/ "S"°"o'clock -f.m.

                                                                              esiding Judge

                                                     17

                                                                       1201
                                               DC        BK14128 PG397
     •
..

                                        ADDITIONAL CERTIFICATE

         I certify that the jury was unanimous in answering the following questions. All twelve of us
         agreed to each of the following answers. The presiding juror has signed the certificate for all
         twelve of us.

         Any subpart of Question 1.

                                                            Printed Name of Presiding Juror

         The corresponding subpart of Question 2 to Question 1.

         8~~~                                               Printed Name of Presiding Juror

         The corresponding subpart of Question 3 to Question 1.

         §":v-L:-       v\Vl ~
         Signature of Presidi~g Juror                       Printed Name of Presiding Juror

                                                    4 and the corresponding subpart of Question 5 to

                                                               5 u IL; s Lit ""        AA
                                                                                       0 (' (.(.. 1 r'   ""'·
                                                            Printed Name of Presiding Juror

                                                            Printed Name of Presiding Juror

         Question 16.
                                                               S     <.L K.is"   ,,_   M or ~ ,    /1 €-
                                                            Printed Name of Presiding Juror

         Any subpart of Question 8.

                               vv--
                                                             Printed Name of Presiding Juror

                                                       18

                                                                         1202
                                   DC    BK14128 PG398

•'

                                             Printed Name of Presiding Juror

                                             Printed Name of Presiding Juror

     lg11ature of Presidiilguror             Printed Name of Presiding Juror

                                             Printed Name of Presiding Juror

                                        19

                                                         1203
           Tab C
Findings of Fact and Conclusions of Law
                                                                                 Filed fn The District Court
                                                                                  of Trav!s County, Texas

                                                                                      NOV - 4 2014
                                 CAUSE NO. D-1-GN-1 1-001030                    Ai             {I  ;301s M
                                                                                Amalia Rodriguel-Mendoza, Clerk
MICHAEL MERCIECA,                                §               IN THE DISTRICT COURT OF
                                                 §
       Plaintiff,                                §
                                                 §
v.                                               §               TRAVIS COUNTY, TEXAS
                                                 §
MICROSOFT CORPORATION,                           §
                                                 §
       Defendant.                                §               353rd JUDICIAL DISTRICT

                    FINDINGS OF FACT AND CONCLUSIONS OF LAW

       On April 21, 2014, this case was called for trial. Plaintiff Michael Mercieca and

Defendants Tracy Rummel and Microsoft Corporation appeared in person and through their

attorneys and announced ready for trial. On May 5, 2014, the Court submitted liability and

damages issues to the jury, which returned a verdict for Plaintiff. Fact issues relating to attorney

fees, expert fees, and costs were tried to the Court on JuJy 25 and September 5, 2014. The Court

rendered a final judgment for Plaintiff on October 2, 2014.

       With respect to attorney fees, expert fees, costs, and other issues related to rendition of

the Court's final judgment, the Court makes the fo llowing findings of fact by a preponderance of

the evidence and issues the following conclusions of law.

                                      FINDINGS OF FACT

       I.      The evidence supports a lodestar attorney fee in the amount of $795,505.98 for

legal services provided to Plaintiff through rendition of the final judgment on October 2, 2014.

       2.      The evidence supports an upward adjustment to the lodestar by a multiplier of

1.25 (an additional $1 92,376.50) to reach a reasonable fee for legal services provided to Plaintiff

through rendition of the final judgment on October 2, 20 14.

       3.      The sum of $76,000.00 is a reasonable attorney fee for legal services provided to

Plaintiff if this case is successful on appeal to the Court of Appeals.

                                                                1778
         4.     The sum of $7,500.00 is a reasonable attorney fee for legal services provided to

Plaintiff if Plaintiff is successful following oral argument in the Court of Appeals.

         5.     The sum of $6,000.00 is a reasonable attorney fee for legal services provided to

Plaintiff if Plaintiff is successful following a motion for rehearing/for en bane reconsideration in

the Court of Appeals.

         6.     The sum of $30,000.00 is a reasonable attorney fee for legal services provided to

Plaintiff if Plaintiff is successful following a petition for review with the Supreme Court of

Texas.

         7.     The sum of $30,000.00 is a reasonable attorney fee for legal services provided to

Plaintiff if Plaintiff is successful at the Supreme Court of Texas following briefing on the merits.

         8.     The sum of $15,000.00 is a reasonable attorney fee for legal services provided to

Plaintiff if Plaintiff is successful following oral argument in the Supreme Court of Texas.

         9.     The sum of $6,000.00 is a reasonable attorney fee for legal services provided to

Plaintiff if Plaintiff is successful fo llowing the Supreme Court of Texas' requests for a response

to any motion for rehearing.

         10.    The sum of $16,060.00 is a reasonable fee for services provided to Plaintiff by

experts Brad Coffey, Thomas Glass, and Joel Fleschman.

         '11.   The evidence supports taxing traditional court costs to Defendant Microsoft

Corporation in the sum of $21 ,229.30.

         12.    The evidence supports assessing additional costs of $5,963.12 to Defendant

Microsoft Corporation pursuant to an agreement of the parties or as costs recoverable under

Texas Labor Code Section 21.259.

         13.    Any finding of fact that is more properly characterized as a conclusion of law

shall be considered a conclusion of law.
                                                  2

                                                               1779
                                       CONCLUSIONS OF LAW

        1.      Plaintiff was the prevailing party in this Jawsuit.

       2.       Texas Labor Code Section 21.259 allows the Court to award Plaintiff a reasonable

attorney fee as part of the costs.

        3.      Attorney fees to be awarded under Texas Labor Code Section 21.259 may be

determined according to the lodestar method.

       4.       The Court has discretion to apply a multiplier and enhance the lodestar figure to

arrive at a reasonable attorney fee.

        5.      Texas Labor Code Section 21.259 allows the Court to award Plaintiff reasonable

expert fees.

                    l"fTH
       Signed this /"_ day of November, 2014.

                                                                        Sulak
                                                   Judge Presiding

                                                   3

                                                                 1780
APPROVED AS TO FORM ONLY:

PAUL T. MORIN, P.C.
503 W. 14th Street
Austin, Texas 78701
Tel. (5 12) 499-8200
Fax. (512) 499-8203

By:_ _ _ _ _ _ __ _ _ _ __
       Paul T. Morin
       State Bar No. 14460550
       pmorin@austin.rr.com
Trial Counsel ofRecord for Plaintiff

Roy A. Pollack
Law Offices of Roy A. Pollack
Texas Bar No. 16092900
503 W. 14th Street
Austin, Texas 78701
Tel. (512) 472-6381; Fax (512) 499-8203
Trial Counsel ofRecordfor Plaintiff

D. Todd Smith
State Bar No. 00797451
SMITH LAW GROUP, P.C.
1250 Capital of Texas Highway South
Three Cielo Center, Suite 601
Austin, Texas 78746
(512) 439-3230
(512) 439-3232 (fax)
todd@appealsplus.com
Appellate Counsel for Plaintiff

Eric J.R. Nichols
State Bar No. 14994900
Gretchen S. Sween
State Bar No. 24041996
Kate Skagerberg
State Bar No. 24058578
BECK REDDEN LLP
S15 Congress Ave., Suite 1750
Austin, Texas 78701
Attorneys for Defendant Microsoft Corporation
                                                4

                                                    1781
                           Tab E
Internal HR Submission styled “Formal Complaint of Michael Mercieca,”
                dated April 19, 2010 (18RR:MSFT90)
••   To:
     Cc:
     From:
     Sent:
            Dan Shea (HR){Daniel.Shea@microsoft.com)
            Michael Mercieca[michmer@microsoft.com}
                           Michael Mell:ieca
                           Mon 4/1912010 6:39:35 PM
     Importance:           Normal
     Sensitivity:         None
     Subject:             RE: Still not letting me open the document...
     Categories:          Internal

     Formal Complaint from Michael Mercieca.docx

     Ok try this.

     My apologies.

     Michael Mercieca

     Microsoft US Partner Group-South Central OEM Team

     michmer@microsoft.com

     512-795-5366 wk

     512-795-5301 fax

     512-779-8646 mb

     fi.iml And rm running Windows. 7!
     ~                                        Win7 Signature

       t:>i~~
                     cid:image001.png@01C9E9DB.6C022B901 bing .... so go bing

                                                                                 Exhibit

••                                                                              MSFT090 .

                                                                                    MS00158
\
    ... -.
             From: Dan Shea (HR)
             Sent~ Monday, April 19, 20101:38 PM
             To: Michael Mercieca
             Subject: Still not letting me open the document...
                                                                                                                     •
             Michael,

             t have tried to open but it still says I do not have perrniss>on. Can you re-send or adjust
             the rights restriction. Thanks,

             Dan Shea

             HR Manager -ER Investigations

             Employee Relations Investigations Team {ERJT)

             (425) 538-4011    x84011

             daniel.shea@microsoft.com                                                                               •

                                                                                                                     •
    l.

                                                                                                           MS00159
••
'•,·
       Formal Complaint from Michael Mercieca

       It is with a deep sense of sadness, much trepidation and soul searching, and after many conversations with HR &
       LCA, that I find myself with no alternative other than to lodge a formal complaint with Microsoft.

       Ttiis complaint is based on situations, discussions and experiences which have occurred over the past 5 months
       following an event at Ol'lol! of my paum
                     d.   Eddie 0'8ti~n
           s.    lVly maf\ag@r also confirmed that Ms ~ummei was &iven   the option to file a formal complaint which she
                 declined to do

       On hearing this information, I stated to my manager that my thoughts; feelings and e>:perlenc~s over the past few
       months now made sens~ and the negativity and change in behavior by my management team was related to this
       "informal" complaint. My manager stated eieing marginalized
                    and bting tre.-ited as a performance issue and part of my a~rve 1n lodging this complaint, is to seek the truth
                    and at ate an environment of transp.lrency.

                    I am confident that the result will be a complete exoneratiort of fault on my part. I also l\ape that this
                    mistreatment; negativity and harassment will stop and my former stellar reputation, which has been impi.gllli!d,
                    will be restored. I h~ that I can continue to work in a professional ind healthy environment, within whic:h I"""
                    able to represent this great company and t eam in the exemplary profe~sional fashiOn, and with the utmost p;mion
                    that I have consistently displayed since joining Microsoft if' 1994.

                                                                                                                                           MS00161
                                                                                                                                                     •
                         Tab F
Employee Relations Investigations Intake Form, dated May 10, 2010
                       (18RR:MSFT108)
•   To:
    From:
    Sent:
            ERIT-SMSG[eritsmsg@microsoft.com]

    Importance:
    Sensitivity:
    Subject:
                          Micky Shields
                          Tue 5/11/2010 2:06:25 PM
                          Normal
                          None
                          Intake form
    Categories:           Internal

    ERIT lntakeForm.doc

    I've attached an ERIT intake form for your review and action.

    Thanks.

    Micky

    Micky Shields/HRBP Manager/ US SMS&P and OEM/ Microsoft

•   425-703-1902

•                                                                    Exhibit

                                                                    MSFJ 108 ,
HR Generalist: Please forward this completed intake form to the appropriate ERIT alias
listed on the ERIT Aliases by Lines of Business form located on HRconf

EMPLOYEE RELATIONS INVESTIGATIONS INTAKE FORM
                                                                                                                       •
Date                                                5/10/10
HR Business Partner                                 MICKY SHIELDS
                                                                                     ,p,
                                                                                                       =+· ,,_
Source of allegation(s) (e.g.                       HRBP
Employee, Manager, HRBP (peer),
Diversity Consultan~ Benefits, Securiry,
Legal, etc.)
Date source appraised of                            MAY 7, 2010
al legation Cs)
   ~,,                                   ~r;.                               ,-;;_   '~(                {~        ·J.
Summary of allegation as                            Michael Mercieca made advances towards Tracy
stated by complaining party,                        including asking her to stay at his home when she was in
including supporting                                town for business and talking to her about sex. In
facts/incidents. (Attach any                        working together with a partner account, they arranged
supporting documentation provided by                for a dinner prep meeting with the partner and when
Compfainant)
                                                    Tracy arrived for dinner, the partner was not there, just
                                                    Michael. Michael made this sound like it was a date.
                                                    Tracy talked to Michael about this and he apologized.
                                                    Within days of the dinner, the partner told Tracy that she
                                                    was not adding any value and didn't want to have her

                                                                                                                       •
                                                    participating on the account. Tracy is continues to be
                                                    concerned that Michael's relationship with the partner
                                                    and her asking him to stop making advances is now
                                                    impacting her work relationship with the partner.

                                                                                      ""
Complainant(s)/Level/Title/Or                       TRACY RUMMEL/L63/SEN10R MARKETING MANAGER/ OEM
g
(Person raisina alleaationJ
Subject(s )/Level/Title/Org                         MICHAEL MERClECA/L63/0EM ACCOU NT MANAGER/OEM
(Person who is the subject of the
al/eaation)
Potential witnesses           (Title, Group
andOrg)
                                                .,,,.                                                   ~

HR advice given       (1fanyJ                      MICROSOFT TAKES THIS SERIOUSLY AND WE WILL
                                                   FOLLOW UP WITH YOU ABOUT NEXT STEPS.

                                                                                                                       •
                         Tab G
Internal HR Submission styled “Supplementation,” dated June 9, 2010
                         (18RR:MSFT121)
•   I
    I;
    I                                              1.Aw on-1c•: o~·
    I                                            ROY A. POLLACK
                                                 50:3 WEST i'!Tli S'J'1m1~·r

    I                                             AUS'l'IN. TgXAS 78701
                                                                                     'l'f;t, (512) 172.(,':l8 I
                                                                                      r i\X (!i 12) '199·8'203

                                                       June9,2010

         Ilia emnll: mf(!$f1i(QlmicrgJ·o(l com

         Microsoft Corporation
         ATIN: Micky Shields (HR)

         Microsoft Corporation
         AlTN: Dan Shea(ERIT)

         Yia enmil: ER!I@microsoft.com

         Microsoft Corporation

•
         ATTN: Employee Relations Investigation Team

                RE: Michael Mercieca

         To Whom It May Concern:

                 As you know, { represent Michael Mercieca regarding his f'ormol Complaint, tiled with
         Microsoft Human Resources. Please consider this correspondence a supplementation to Mr.
         Mercieca's original Formol Complaint (lodged on April 19, 2010-attached hereto for your
         convenience) This supplementation is intended to bypass rJie emotional tone of Mr. Mercicca's
         original complaint--due, understandably, to his dedication to Microsoft coupled with Microsoft's
         inexplicable treatment of him- and to set out in no uncertain tenns the serious nature of Mr.
         Mercieca's situation.

                 Mr. Mercieca is formally complaining about Microsoft's harassing, discriminatory, and
         retaliatory conduct based on his gender and national origin, which has surfaced since
         approximately November, 2009.

                Mr. Mercieca is formally complaining about sexual harassment in the workpla.ce.

                                                             l                                                            Exhi~it

                                                                                                                       MSFT ~21
                                                                                                     MER 001321

•                                                                                                                 No. _.__13_.&_ __
                                                                                                                  Date cg'~ f ~ ' ( 3
                                                                                                                  .~caa:?~=
                                                                                                                    ( :; 1<~pur!i111;
                                                                  ·- - - --- · - -·- - --··- - - - - ---;I
                                                                                                         I
                                                                                                         I

       Moreover, Mr. Mercieca is formally complaining about rhe conflict of interest that exists         I
                                                                                                         I
between Lori Aulds, his direct manager, and Tracy Rummel's, a former contractor and newly
hired employee, who is a close friend of Ms. Aulds.

        Mr. Mercieca is formally complaining about the patent breach of confidentiality, in
addition to the breach of personnel information that has occurred between, among others, Lori
Aulds and Tracy Rummel, prior to Ms. Rummel's hiring by Microsoft.

        Mr. Mercieca is formally complaining about Microsoft's steady course of retaliation
pertaining to various aspects of bis employment with Microsoft.

       Mr. Mercieca is also complaining about the hostile work environment that has
surrounded him since the undisclosed allegations pertaining to him started to covertly spread
throughout the infrastructure ofMicrosofl.

        Microsoft represents to its employees that it "strongly supports an open door policy for
resolving problems qu ickly and fairly." Yet in the situation at hand, Microsoft has constructively
ignored the formal complaint of its Joyal employee of l 6 years (Michael Mercieca), while wholly
embracing the suspect complaint, tainted with retaliation, by a newly hired employee (Tracy
Rummel). Approximately seven (7) weeks has passed since Mr. Mercieca's initial Formal
Complailll and virtually nothing has been done to inform him as to what allegations have
specifically been made and/or to ascertain his account of events in relation to such specific
allegations. As of June 8'11, Ms. Shields is just "getting back to" Mr. Mcrcieca under the email
beading which aptly summarizes Microsoft's continued inaction to minimize Mr. Mercieca's

                                                                                                             •
situation, "Follow-up on your concern."

         One would hope that after employing such an outstanding employee, repre.sentative, and
ambassador, Microsoft would kmJ\v Michael Meccieca after l 6 years of service. To that end, the
most important thing to Mr. Mercieca is his name and reputation. It is paramount to him that he
is cl.eared of any and all accusations and that his reputation is wholly restored. We sincerely
hope that l'vficrosoft will start to address Mr. Mercicca's complaint with the attention that it
deserves.

                                                     Sincerely,

                                                     Roy A. Pollack

cc: Michael Mercieca

                                                 2

                                                                                           MER001322

                                                                                                             •
•   ~--~·-~----·~           ---                   ------- ... .. ---

            Formal CDmplafnt from Michael Mercieg

            It Is with ll dt~ fl!nse cf s.idness. mcch ~?idalion ar.d soul surchrnc, 11nd lifter many ccnwrs.itionswith HR &
           lCA. that I tind myself wtth n:>.alternatiW other ~n to lodp a formal compl11lnt wi:h Mkrosoft.

           This complaint is based on situations, di$CUSSlons and eicperlences which h.M! occurred over che past S months
           fotlow1nc an event ac one or my partnets, Bass Computers, on November S"/ 6"' 2009 ~nd the most recent
           occurrtnc1 April 141"/1s" with mv manager, which I see as the tipping point.

           A strlns of events began following an informal discussion I underst;ind took place bttwten Tmy Rummel and my
           direct manager lori Aulds, whilst they spent weekend tocelher as ltlends following the above mentioned event.

           Unknown to me untH February 2010, this led to an escala1lon within HR or 1 claim of ln1pproprlatc actions/
           comments I was alleged to have made towards Ms. Rummel 1nd this was i lso escalated to many if not all of the US
           OCM mtnagement team. (To this day I do not know speclfleID.     JURISDICTION AND VENUE

       4.      The subject matter in controversy is within the jurisdictional limits of this court.

       5.      This court has jurisdiction over the parties because Plaintiff and the individual

                                                  1
                                                                                                        499
Defendant are both Texas residents, and some or all of the employees and agents of Mjcrosoft

Corporation that committed the acts described below work and reside in Travis County, Texas.

Additionally, Microsoft Corporation has four offices within the State of Texas, located in Austin,

Dallas, Houston and San Antoruo.

        6.      Venue in Travis County is proper in this cause under the mandatory venue provision

§15.017 of the Texas Civil Practice and Remedies Code because it is the county in which Plaintiff

resided at the time of the accmal of Plaintiff's slander cause of action. Under such Code §15.004

and 15.005, venue for all of Plaintiffs other causes of action also lies in Travis County because

such other causes of action arise out of the same transaction, occurrence or series of transactions or

occurrences as Plaintiff's slander cause of action.

        Alternatively, venue in Travis County is proper under the general venue provision of Code

§15.002(a) (1) because it is the county in which all or a substantial part of the events or omissions

giving 1ise to Plaintiffs claim occurred.

                                            IV.       FACTS

        7.     Plaintiff is an individual residing in Travis County, Texas. He turned 50 years of

age as of his birthday on August 22, 2010. He was born in London, England, has British, Australian

and New Zealand citizenship status, and became a nationalized USA citizen in September 2010.

Plaintiff was a Senior Sales Executive for Microsoft Corporation and wasa employed with

Microsoft around the globe for 17 years. Plaintiff consistently excelled with over quota sales

performance to much critical acclaim. Plaintiff received awards and much positive feedback from

Microsoft for his customer service and sales excellence and was widely recognized by his

customers, partners, and his peers as one of the most passionate advocates for Microsoft and one

of the most generous, compassionate, and supportive team players. Plaintiff was acknowledged

                                                      2
                                                                                                         500
as a leader amongst his peers- he was a loyal, selfless, and inspiring friend and colleague and

recognized as the very embodiment of integrity. During his time at Microsoft, Plaintiff received

a number of Sales Recognition Awards, Long Service Awards and Customer Service Awards and

was the first recipient of the Sales District "Spirit of the District Award" at Microsoft. In

addition, Plaintiff received numerous letters and e-mails of commendation from Microsoft

partners and customers, and from his peers and colleagues.

       8.      In or about September or October 2007, Lori Aulds, a Microsoft employee, became

Plaintiff's direct manager. Plaintiff and Ms. Aulds had had a sexual relationship over a period of

years prior to her promotion as Plaintiff's direct manager. Plaintiff had ended such relationship

some time prior to Ms. Aulds's promotion to his manager. Ms. Aulds remained Plaintiff's direct

manager until in or about December 2010.

       9.      Defendant. Rummel was an independent contractor hired through Xtreme

Consulting to work for Microsoft as a contingent staffer "CS" and marketing consultant from on or

about November 2008 through on or about February 15, 2010. In February 15, 2010, she was hired

by Microsoft as a full-time employee. Prior to being hired by Microsoft, Ms. Rummel had such a

close personal relationsfop with Ms. Aulds that they spent overnights together either at Ms. Aulds'

home or while away on business. In or about November 8, 2009, Ms. Rummel and Ms. Aulds

spent the night together and allegedly Ms. Rummel advised Ms. Aulds that she was subjected to

sexual harassment comments and actions by Mr. Mercieca.          Until Plaintiff filed this suit and

conducted discovery, Plaintiff had not been told the substance of the actual allegations made by Ms.

Rummel to Ms. Aulds in November 8, 2009. Based upon information and belief, Ms. Rummel, in

this conversation with Ms. Aulds during this sleepover, accused Plaintiff of sexually harassing

her. However, any statement made by Ms. Rummel to Ms. Aulds in or about November 8, 2009

                                                 3
                                                                                                       501
accusing Plaintiff of "sexual harassment" was never communicated to Plaintiff by anyone,

including by Ms. Rummel, until after Ms. Rummel's deposition was taken after this suit was filed.

         10. It is undisputed that Ms. Rummel was not an employee of Microsoft in November of

2009 and that Ms. Aulds was not a member of Microsoft's Human Resources at all times relevant

to this suit.

          11. Thereafter, in late 2009 and early 2010, Ms. Aulds began to unduly scrutinize and

criticize Plaintiff relative to his job performance and to discriminate against him in her treatment of

him as an employee versus the treatment received from her by other employees that she supervised.

Plaintiff met with Ms. Aulds in or about February 2010 to discuss his concerns over such treatment,

and his concerns about the hiring of Ms. Rummel since Plaintiff had heard complaints from

Microsoft partners/customers about Ms. Rummel. Ms. Aulds discouraged Plaintiff from going to

Human Resources with such concerns. Ms. Aulds specifically told Plaintiff that Ms. Rummel had

not filed any complaint against him. Ms. Aulds advised Plaintiff for the first time that Tracy

Rummel had related complaints of sexual harassment to her and that she had advised Human

Resources. In or about November of 2009, although Micky Shields told Ms. Aulds that the matter

was not an Human Resources issue since no complaint had been raised and no one had contacted

her about any facts or complaint and that the matter would be closed and confidential, Ms. Aulds

took it upon herself to republish the false allegations made by Tracy Rummel and she passed it on

to her boss David Tannebaum and then to his boss Eddie Obrien.

         12. After the false allegations were passed on to Mr. Mercieca' s upper management by Lori

Aulds, Plaintiff began to be treated differently by his manager and upper management. On or about

April 19, 2010, Plaintiff filed a complaint against Lori Aulds and other managers with Microsoft's

Human Resources department, complaining of harassment, hostile work environment, and

                                                  4
                                                                                                          502
discrimination based on sex, age and national origin. From that point on, Mjcrosoft's mistreatment

and discriminatory treatment of Plaintiff intensified to include but not be limited to, a bad faith

investigation by was perfonned on Plaintiff's formal complaint.

       13 .   Ms. Aulds' s mistreatment and discriminatory actions towards Plaintiff included,

without limitation, the following actions or omissions, some of which occurred after Plaintiff filed

his complaint with Microsoft Human Resources:

               a.       Ms. Aulds did not have one-to-one meetings with Plaintiff in the same

               amount and same frequency that she had with other employees she supervised;

               b.       She urged Plaintiff to apply for a transfer within Mjcrosoft to a position in

               Europe    or Australia/New Zealand,        and to Plaintiff's knowledge,        never

               recommended him for a promotion to a position in the United States;

               c.       She cut his expense budget when other employees similarly situated to

               Plaintiff did not have their expense budgets cut;

               d.       She prohibited him from attending important meetings, and important

               conferences which he had attended in previous years, that were necessary for

               Plaintiff to maintain good relationships with his Microsoft accounts, whereas other

               employees she supervised who were younger than Plaintiff or less experienced than

               Plaintiff, or had been employed for less time with Microsoft than Plaintiff, were

               allowed to attend such conferences and meetings;

               e.       She met and talked with Plaintiffs account customers without Plaintiff's

               knowledge and participation to discuss their accounts and to tty and obtain adverse

               infonnation about Plaintiff;

               f.       She promised to support Plaintiff's request for a promotion, but then failed

                                                  5
                                                                                                        503
                to do so;

                g.      She deliberately failed to foiward to Plaintiff communications from his

                customer accounts;

                h.      She falsely accused Plaintiff of expense irregularities;

                1.      She unduly scrutinized and questioned his request for vacation time;

                J.      She failed to recognize project accomplishments of Plaintiff while

                recognizing the accomplishments of other employees she supervised;

                k.      She failed to assign lead roles to Plaintiff that should have been assigned to

                him and that were assigned to similarly situated employees;

                I.      She made disparaging comments about Plaintiffs nation of origin and

                questioned his green card status and right to work for Microsoft;

                k.      She falsely accused Plaintiff of improper office behavior; and,

                I.      She conspired with David Tannebaum to give Mr. Mercieca a bad final

review, which ultimately David Tannebaum used to demote Mr. Mercieca to a level 5 OEM team

member when his manager at the time, Joe Sahagian, recommended Mr. Mercieca to a level 3.

        14.     Ms. Aulds has admitted to Plaintiff that she could not handle her relationship to

Plaintiff as his boss and insisted that Plaintiff look for another job.

        15.     During Microsoft Human Resource' s official investigation of Plaintiff's complaint,

Ms. Aulds lied to the investigator, Dan Shea, and said that she had not had a prior sexual

relationship with Plaintiff in order to show Plaintiff as a liar. The lies Ms. Aulds told were key to

the investigation. Even though Microsoft subsequently became aware of Ms. Aulds lies during an

official investigation, Microsoft subsequently promoted Ms. Aulds and demoted Mr. Mercieca.

While the investigation was still ongoing David Tannebaum demanded the investigation end before

                                                     6
                                                                                                         504
it was completed and before all of Mr. Mercieca's supporting witnesses were contacted.

        16..   At or about the same time that Ms. Aulds was engaging in the above-described

behavior towards Plaintiff, other Microsoft managers engaged in similar mistreatment and

discriminatory treatment of Plaintiff including, without limitation, the following acts and omissions,

some of which occurred after Plaintiff filed his complaint with Mjcrosoft Human Resources:

               a.      Plaintiff was chastised by manager David Tannebaum for missing a deadline

               by three hours, when other employees were not chastised for missing deadlines by

               such short time frames;

               b.      Plaintiff was accused by manager David Tannenbaum of not pe1fonning his

               job adequately because of the length of time he remained at a certain grade whereas

               other similarly situated employees were not similarly criticized;

               c.      Plaintiff did not receive promotions which he should have received and

               which were awarded to similarly situated employees and to American employees;

               d.      Microsoft delayed its investigation and engaged in a bad faith investigation

               of Plaintiff's complaint;

               e.      Microsoft's Human Resources summarily dismissed Plaintiffs complaint

               without speaking to Plaintiff;

               f.      Microsoft reported to Plaintiff that it had found no basis for his complaint;

               g.      Microsoft promoted Ms. Aulds, even after discove1ing that she had lied

               during the investigation of Plaintiff's complaint;

               h.       In announcing the promotion of Ms. Aulds, Manager Eddie O'Brien

               emphasized her gender;

               1.      Microsoft managers, including without limitation, Ms. Aulds, David

                                                  7
                                                                                                         505
Tannenbaum, and Eddie O'Btien, communicated with Plaintiff's customer accounts

without Plaintiff's knowledge and participation to discuss their accounts which

marginalized Plaintiff's position with his accounts;

J.      Microsoft managers, including without limitation, Ms. Aulds and David

Tannenbaum, communicated with Plaintiff's customer accounts without Plaintiff's

knowledge and participation to try and obtain adverse infonnation about Plaintiff;

k.     Microsoft managers, including without limitation, David Tannenbaum,

made job assignments that discriminated against Plaintiff and one other person of

approximately the same age as Plaintiff;

I.     In Plaintiff's annual review conducted by Microsoft in or about August

2010, he received a vastly reduced pay raise even though his performance numbers

were better than the previous year. He also received a bonus and stock options that

were 70% lower than the previous year even though his petformance numbers

placed him among the top six sales representatives. Another sales representative of

approximately the same age as Plaintiff also received reduced compensation during

the same annual review. An American sales representative who finished towards if

not at the bottom of the sales representatives in terms of performance numbers and

who is far younger and less experienced than Plaintiff received the same rating as

Plaintiff.-" achieved"-even though he did not achieve his performance quota.

Plaintiff believes that this younger, less experienced, and under achieving sales

representative received similar or more generous compensation as Plaintiff during

the August 2010 annual review. During Plaintiff's 2010 annual review, which was

attended by two managers and a human resources representative, Microsoft raised

                                  8
                                                                                      506
unsubstantiated and unsupported claims of negative job performance as a pretext for

Plaintiffs reduced compensation increases. To Plaintiffs knowledge, no other sales

representative was "ganged up" on in this manner;

m.      Microsoft increased its scrutiny of Plaintiff's job petformance and work

product to an extent that exceeded the scrutiny of similarly situated employees or of

younger, less experienced employees, and to such an extent that Plaintiff's customer

accounts have told him that they fear they will suffer adverse consequences if they

support Plaintiff;

n.      Plaintiff was prohibited from attending a key conference with customers,

which then resulted in Plaintiff being left out of subsequent meetings with his

customer accounts. Instead of attending the conference, Plaintiff was required to

attend a six hour internal training program;

o.      Microsoft manager Eddie O'Brien prohibited Plaintiff from attending a sales

meeting with one of Plaintiffs customer accounts even though other, younger

American employees are allowed to attend the sales meetings where senior

executives at Microsoft meet with their customer accounts;

p.      Job anniversary milestones and project accomplishments of other employees

are recognized by Microsoft, but Plaintiff does not receive such recognition for his

anniversary milestones or project accomplishments;

q.      Constructive criticism offered by Plaintiff concerning Microsoft services or

products, which in the past was readily accepted by Microsoft managers, is now

treated as evidence of Plaintiff's alleged "bad attitude" concerning his job;

r.      Plaintiff was forced to perform duties that were clearly too much for one

                                   9
                                                                                        507
               person to perform ;

               s.     Disparaging comments were made about Plaintiffs nation of origin. One

               of the managers, Eddie O'Brien, is known throughout the company, for his

               disparaging comments about ctifferent nationalities, including one time when

               shortly after the recent tsunami in Japan, he said that " I would have zero pity for

               Japan. I would push them right under the bus and create another tsunami;" and,

               t.     At off-site gatherings of Microsoft employees Plaintiff was ostracized by

               .Microsoft managers, whereas the same managers were clearly engaging socially

               with other employees.

       17.     Within approximately 18 days of Plaintiff filing his complaint with Microsoft

Human Resources, Plaintiff was notified by Microsoft, on or after May 12, 2010, that a Microsoft

employee had filed a complaint against him. Plaintiff subsequently learned, on or about June 17,

2010, that Defendant Tracy Rummel had filed a sexual harassment complaint and retaliation

complaint against him with Microsoft Human Resources, alleging that Plaintiff had been sexuaJ

harassing her for approximately from on or about November 8, 2008 through November 9, 2009.

       18      Despite Ms. Rummel's claim of sexual harassment by Plaintiff occurring prior to

her being employed by Microsoft, she sought to join the very sales team at Microsoft which

included Plaintiff

       19. After this lawsuit was filed and through discovery, Plaintiff learned that Ms. Rummel

filed her complaint against him with Microsoft on or about May 7, 2010. Through ctiscovery

Plaintiff has learned that Ms. Rummel never contacted anyone at Microsoft Human Resources from

November 2009 until she was persuaded to file her complaint against Mr. Mercieca on or about

May 7, 2010 by Ms. Aulds. And in retaliation for Mr. Mercieca' s complaint against Ms. Aulds.

                                                10
                                                                                                      508
        20. Microsoft investigated the Ms. Rummel's complaint and found it to be baseless and

"unsupported'', yet Ms. Rummel received no adverse consequences for engaging in such activity.

The only reason Ms. Aulds received any disciplinary conduct was because after she got caught in

her lies, she ultimately admitted to the lies, and of course, Microsoft was forced to admonish her.

        21 .    After the onset of the above-described mistreatment and disc1iminato1y treatment,

some of Plaintiff's colleagues at Microsoft have noticed changes in Plaintiff's behavior at work,

commenting to Plaintiff that he appeared withdrawn during conference calls and did not ask

questions and discuss issues in the same manner and with the same enthusiasm as in the past.

        22.     One coIIeague whom Plaintiff highly respects has told Plaintiff that it is obvious or

clear to him that Microsoft managers are treating Plaintiff differently and negatively, and are

attempting to undermine anything that plaintiff says or does.

        23 .    The environment at work has become so intolerable and stressful that Plaintiff could

no longer work in Microsoft's Austin office unless it was absolutely necessary to get the job done,

preferring to work instead from his home office or at customer' s offices. The environment at work

continued to be so intolerable and stressful that Plaintiff's employment with Microsoft was

constructively terminated on or about February 22, 2012 and as a result of Plaintiff being ordered to

be unjustly placed at a level 5.

                  V.      RESPONDEAT SUPERIOR AND RATIFICATION

        24.     Whenever in this complaint it is alleged that the Defendant Microsoft did any act

or thing, or failed to do any act or thing, it is meant that the Defendant's officers, agents,

servants, employees or representatives did such act with full authorization or ratification of the

Defendant, or was done in the normal and routine course and scope of employment of

Defendant's officers, agents, servants, employees, or representatives including Tracy Rummel ,

                                                  11
                                                                                                        509
Marketing Manager, Marc Pisan, Marketing Director U.S. OEM, Lori Aulds, Regional Sales

Director U.S. OEM, David Tannebaum National Sales Director U.S. OEM, and Eddie O'Brien, a

Vice President U.S. OEM. Whenever it is alleged in this petition that a Microsoft employee did

any act or thing or failed to do any act or thing, it is meant that such employee acted or fai led to

act with full authorization or ratification of Defendant, or was done in the normal and routine

course and scope of employment by Defendant, or was done in a capacity or manner that makes

Microsoft vicariously liable for such conduct.

                       VI.     SLANDER & CONSPIRACY TO SLANDER

        25.     Plaintiff adopts and incorporates by reference into this section of his petition the

statements set forth above in the Facts section as if set forth in this section.

        26.     During the deposition of Tracy Rummels in this case, Plaintiff learned that

Defendant Rummels had published false statements to Micky Shields in the Human Resources

Department at Microsoft in November 2009 in that she accused Plaintiff of sexually harassing her

and of retaliati ng against her while she was a C.S. (i.e., non-employee) of Microsoft. Rummels' s

allegations were not investigated by Microsoft at the time. Upon information and belief, Aulds

repeated these false allegations of sexual harassment David Tannebaum and Eddie O"Brien.

        27.     On or about May 7 or 10, 2010, false statements were published and/or republished

by Defendant Rummel in that she accused Plaintiff of sexually harassing her and of retaliating

against her while she was a vendor for Microsoft.

        28.     Plaintiff asserts the discovery rule.

        29.     After Rummel published or republished the false statements in May 2010, her

allegations were for the first time investigated by employees of Microsoft and determined to be"

unsupported."

                                                    12
                                                                                                        510
        30.    As a result of the false allegations, Plaintiff has been subjected to undue st1ict

scrutiny of his job performance, hostile work environment, continued harassment by Microsoft,

retaliation, demotion and constmctive discharge.

        31.    Defendant Microsoft, by and through its officers, agents, servants, employees, or

representatives, including, but not limited to, manager, Lori Aulds, acting within the course and

scope of her employment or under conditions that make Microsoft vicariousl y liable for her

conduct, conspired with Defendant Rummel , to slander Plaintiff by making false statements of

fact referring to Plaintiff, i.ncluding without limitation, false allegations of sexual harassment an.d

retaliation.

      32.      The false statements constitute defamation per se because they accuse Plaintiff of

engaging in illegal activity and/or sexual misconduct and/or they directly bear on his fitness as a

sales agent and businessman and/or they constitute injury to his personal and business reputation

and to his occupation and/or impeach his honesty, integiity or virtue. Furthermore, these statements

are defamatory because they tend to injure Plaintiff's reputation and occupation in the sales and

business community and expose him to public hatred, contempt, ridicule, and financial inj ury, and

impeach his honesty and integrity.

        33 .   The defamatory statements are false, slanderous, and libelous. At all times relevant

hereto, Plaintiff was an employee of Microsoft for 17 years and engaged in outside sales.

Defendants made, or conspired with each other to make, the defamatory statements with the

knowledge that they were false or with substantial grounds for knowing that they might be false and

with recldess disregard to whether they were true or false. AJtematively, the defamatory statements

were negligently published by Defendants. Upon information and belief, Defendant Rummel

published her sexual harassment complaint against Plaintiff at the insistence of Microsoft and in

                                                   13
                                                                                                          511
retaliation for Plaintiff filing a complaint against Microsoft.

        34.     As a direct and proximate result of Defendants' publication of, and/or conspiracy to

publish, the defamatory statements, Plaintiff's business sales reputation has been severely injured.

The false allegations contained in the defamatory statements have caused Plaintiff to suffer severe

mental anguish, public humiliation and embarrassment as a result of Defendants' intentional and/or

negligent acts since the truth was known to Defendants. As a direct and proximate result of

Defendants' acts, Plaintiff has suffered pecuniary losses, including without limitation, loss of

income as a result of his constructive discharge, loss of future income, and loss of employee

benefits. Plaintiff seeks compensatory damages for these injuiies in an amount that exceeds the

minimum jurisdictional limits of this Court.

        35.     Plaintiff is entitled to exemplary damages from Defendants because they acted with

a specific intent to cause injury to Plaintiff or with conscious indifference to the rights, safety, or

welfare of Plaintiff and with actual, subjective awareness that their conduct involved an extreme

degree of risk of harm to Plaintiff Plaintiff seeks exemplary damages in an amount not to exceed

three times the amount of his actual damages as determined by the fact finder.

        36.     The publication and republication of the false statements by Defendants was not

ptivileged.

        37.     Defendants were not acting m good faith m publishing and republishing the

statements.

        38.     Plaintiff did not consent to the publishing or republisfong of the false statements

about him. Plaintiff sought a fair investigation of his formal complaint yet Microsoft engaged in a

bad faith investigation of his complaints in an effort to hide the truth.

                                                   14
                                                                                                          512
                 VII.    EXHAUSTION OF ADMINISTRATIVE REMEDIES

        39.     Plaintiff adopts and incorporates by reference into this section of his petition the

statements set forth above in the Facts section as if set forth in this section.

        40.     Plaintiff timely filed a charge of discrimination against Defendant Microsoft with

the Austin Human Rights Division, a division of the Civil Rights Division of the Texas

Workforce Commission (" TWC"), and made a dual filing with the EEOC. Plaintiff exhausted

his administrative remedies, received a right to sue letter from the appropriate State agency, and

this suit has been timely filed under the Texas Labor Code. All conditions precedent to filing

this claim have been performed by Plaintiff or have occurred.

                      VIIl. DISCRIMINATION IN VIOLATION OF
                   THE TEXAS COMMISSION ON HUMAN RIGHTS ACT

        41.     Plaintiff adopts and incorporates by reference into this section of his petition the

statements set forth above in the Facts section as if set forth in this section.

        42.     During the course of his employment, Defendant Microsoft discriminated against

Plaintiff because of age and/or sex and/or national origin.

        43.     Specifically, and without limitation, Defendant subjected Plaintiff to undue

scrutiny, denied him promotions, denied him bonuses and other compensation, question his green

card status and right to work in the United States, subjected him to isolation and ostracized him,

undermined him vis-a-vis other employees and his customers, and subjected him to a hostile

work environment, retaliation, and/or constructive discharge, based upon his age, sex and/or

national origin, or a combination of each.

        44.     Through such actions, Defendant Microsoft intentionally discriminated against

Plaintiff in connection with the compensation, terms, conditions, and privileges of employment,

or limited, segregated or classified Plaintiff in a manner that would deprive or tend to deprive

                                                    15
                                                                                                       513
him of any employment opportunity or adversely affect his status as an employee, including

without limitation, unjustly demoting him to a level 5 when his manager at the time had ranked

him at a level 3, resulting in a constructive discharge.

       45.        Age and/or sex and/or national origin were motivating factors m Defendant

Microsoft's treatment of Plaintiff.

       46.        Such conduct constitutes unlawful employment practices in violation of the Texas

Commission on Human Rights Act, including without limitation, Texas Labor Code §21.051

and/or 21 .056.

       47.        Plaintiff was proximately damaged as a result of the conduct of Microsoft, its

agents and employees, in an amount within the jurisdictional limits of this court. Plaintiff seeks

recovery of such damages, including without limitation, the damages provided by Texas Labor

Code Sec. 21.2585.

                                  IX.    SEXUAL HARASSlVIENT

       48.        Plaintiff adopts and incorporates by reference into this section of his petition the

statements set forth above in the Facts section as if set forth in this section. Additionally, Defendant

Aulds, acting within the course and scope of her employment or in a manner that makes Microsoft

vicariously liable for her conduct, made sexual comments to Plaintiff about her sex life (such as

"you have ruined me for sex with my boyfriends"), commented on her sexual relationships with her

boyfriends, and insisted that Plaintiff get involved in her and her boyfriend' s relationship and

disputes, even though on several occasions Plaintiff told Aulds that it made him uncomfortable

being told and involved in these things, and handled her relationship with Plaintiff more like a

"boyf1iend/girlfriend" relationship rather than an employer/employee relationship.

       49.        The above-described conduct of Defendant Microsoft's manager employee, Lori

                                                   16
                                                                                                           514
Aulds, was sufficiently severe and pervasive so as to alter the conditions of Plaintiffs

employment and create an abusive work environment. The accumulated effect of her repeated

verbal attacks and caustic comments to and about Plaintiff (which became known to Plaintiff)

undermined Plaintiffs ability to succeed at his job, and caused harm to his emotional stability

and health. Such gender-based animus exhibited by Ms. Aulds to Plaintiff constitutes sexual

harassment of Plaintiff in violation of his rights under the law. Defendant Microsoft knew or

should have known of the harassment and abusive work environment, yet failed to take prompt

remedial action.

        50.     Plaintiff alleges that Defendant Microsoft, by and through its manager employee,

sexually harassed Plaintiff and created an abusive work environment for Plaintiff with malice or

with reckless indifference to the legally protected rights of Plaintiff.

        51.     Such harassment proximately caused damages to Plaintiff in an amount within the

jurisdictional limits of this court.

                                       X.       RETALIATION

        52.     Plaintiff adopts and incorporates by reference into this section of his petition the

statements set forth above in the Facts section as if set forth in this section.

        53.     Plaintiff alleges that Defendant Microsoft, by and through its officers, agents,

servants, employees or representatives, including without limitation, Tracy Rummel, Marketing

Manager, Marc Pisan, Marketing Director U.S. OEM, Lori Aulds, Regional Sales Director U.S.

OEM, David Tannebaum National Sales Director U.S. OEM, and Eddie O'Brien, a Vice

President U.S. OEM instituted a campaign of retaliation against Plaintiff due to Plaintiff filing

his formal complaint against Lori Aulds, Regional Sales Director U.S. OEM, David Tannebaum

National Sales Director U.S. OEM, and Eddie O'Brien, a Vice President U.S. OEM and

                                                    17
                                                                                                       515
exercising his rights by filing a charge of discrimination with the Austin Commission on Human

Rights, a branch of the Texas Commission of Human Rights, and EEOC. This retaliation

included the filing of a bogus sexual harassment and retaliation complaint by Defendant Rummel

while employed by Microsoft, and Microsoft causing or encouraging Tracy Rummel to file a

false and misleading charge of sexual harassment and retaliation against Plaintiff

        54.     Such conduct violates Texas Labor Code Sec. 21.055 and/or 21 .056.

        55.     Such conduct proximately caused Plaintiff to suffer damages in an amount within

the jurisdictional limits of this court.

                                 XI.       INVASION OF PRIVACY

        56.     Plaintiff adopts and incorporates by reference into this section of his petition the

statements set forth above in the Facts section as if set forth in this section.

        57.     Defendant Microsoft, by and through its officers, agents, servants, employees or

representatives, intentionally invaded Plaintiffs privacy by intruding on his solitude, seclusion,

or private affairs. The invasion was highly offensive to Plaintiff and would be highly offensive

to a reasonable person. Plaintiff was injured because of the conduct of Defendant. Plaintiff

proximately suffered damages in an amount within the jurisdictional limits of this court for

which Plaintiff herein sues.

        58.     Defendant Microsoft, by and through its officers, agents, servants, employees or

representatives, verbally publicized facts regarding Plaintiff's private life which were not of

legitimate public concern. The publicity was highly offensive to Plaintiff and would be highly

offensive to a reasonable person. Plaintiff was injured as a result of the conduct of Defendant.

Plaintiff proximately suffered damages as a proximate cause and result of Defendants' actions in

an amount within the jurisdictional limits of this court for which Plaintiff herein sues.

                                                    18
                                                                                                       516
                                      Xll.    DAMAGES

       59.    Plaintiff sustained the following damages or elements of damage in an amount

within the jurisdictional limits of this court for which he seeks compensation as a result of the

actions and/or omissions of Defendants described above:

       a.     Back pay from the date that Plaintiff was denied equal pay for equal work, and
              interest on the back pay, in an amount of compensation to Plaintiff as the Court
              deems equitable and just, and/or loss of earnings in the past;
              AND, lost income resulting from Plaintiffs constructive discharge;
       b.     Front pay in an amount the court deems equitable and just to make Plaintiff
              whole, and/or loss of earning capacity which will, in all reasonable probability, be
              incutTed in the future;
       c.     Loss of benefits, including bonuses, stock options, 401 k matching contributions
              and any other pension plan contributions, and any profit-sharing plan
              contributions;
       d.     Loss of enjoyment oflife;
       e.     Mental anguish in the past;
       f.     Mental anguish which will , in all reasonable probability, be suffered in the future;
       g.     Reasonable medical care and expenses in the past. These expenses were incurred
              by Plaintiff and such charges are reasonable and were usual and customary
              charges for such services in Travis County, Texas;
       h.     Reasonable medical care and expenses which Plaintiff will incur, in all reasonable
              medical probability, in the future;
       1.     Deprivation of seclusion;
       J.     Humiliation;
       k.     Loss of time and Inconvenience;
       I.     Physical discomforts; and,
       m.     Injury to reputation.

                              xm.    EXEMPLARY DAMAGES

       60.    Plaintiff would further show that the acts and/or omissions of Rummel and of

Defendant Microsoft, by and through its officers, agents, servants, employees or representatives,

including Manager Lori Aulds and co-worker Tracy Rummel , which are complained of herein

were committed with malice or reckless indifference to the protected rights of the Plaintiff. In

order to punish Defendants, and to deter such actions and/or omissions in the future by

Defendants or anyone else, Plaintiff also seeks a recovery of exemplary damages from

                                               19
                                                                                                      517
Defendants.

                                     XIV. ATTORNEY'S FEES

        62.     Pursuant to Texas Labor Code Sec. 21.259, Plaintiff requests his attorney' s fees and

costs, and reasonable expert fees.

                               XV.     CONDITIONS PRECEDENT

        63.     All conditions precedent to bringing this action have been performed or have

occurred, or have been waived.

        WHEREFORE, PREMISES CONSIDERED, Plaintiff, Michael Mercieca, respectfully

prays that upon a final hearing of the cause, judgment be entered for the Plaintiff against

Defendants for actual damages in an amount within the jwisdictional limits of the Court; exemplary

damages; pre-judf,>ment interest at the maximum rate allowed by law; post-judgment interest at the

legal rate; attorney's fees; costs of court; and such other and further relief to which the Plaintiff may

be entitled at law or in equity.

                                                        Respectfully submitted,

                                                        Roy A. Pollack
                                                        Law Offices of Roy A. Pollack
                                                        Texas Bar No. 16092900
                                                        503 W. 14th Street
                                                        Austin, Texas 78701
                                                        Tel. (512) 472-6381 ; Fax (512) 499-8203
                                                        Attorneys for Plaintiff, Michael Mercieca

                                                   20
                                                                                                            518
                                CERTIFICATE OF SERVICE

        I certify that on April 12, 2013 a true and correct copy of the foregoing was served upon
the following as follows, and/or via the court's electronic notice system:

Via Facsimile 512-708-1002
Eric J.R. Nichols
Kate Skagerberg
Beck, Redden & Secrest LLP
515 Congress Ave. Suite 175 0
Austin, Texas 78701
Attorneys for Microsoft

Via Facsimile 512-499-3660
Robert M. O' Boyle, Mitchell Zoll and
Derek Quick
Strasburger & Price, LLP
720 Brazos Street, Suite 700
Austin, Texas 78701
Attorneys for Tracy Rummel

                                                     ' "" o~ uf rJ.11 T. Mort_·
                                                                          11. P:· : .· . _

                                                                 / ,f/ , 1«'
                                                                /I       //,.
                                                           I / -'
                                                     By:_!!__        I   ~-               .....
                                                                         /
                                                     Paul T. Morin '

                                               21
                                                                                                    519
                                 Tab I
Letter announcing Mercieca’s resignation, dated February 22, 2012, “effective April
                          2, 2012” (18RR:MSFT221)
       .
    ... ?   4' •

•                                                             LAW OFFlCB OF
                                                           ROY A. POLLACK
                                                          GOS WEST l4ftl S'l'REET
                                                          AUST!N, TEXAS 18701
                                                                                                          TEL (1512) 472·6381
                                                                                                          PAX (612) 499-8203

                                                             February 22, 2012

                    fie ftg; .> 12•208· I QQl
                   Seek., RedJen &: S¢cre:st. LL.P.
                   Mt. EricJ. R. Nichols
                   S l S CongTe85 A venue, Si.Ute l 750
                   Austin. Texas 78701

                          RE: Cau.st No. Men:ieca v. Microsoft, Et. Al.
                          Michael Memeca -Constructive Termination

                   Dear Mr. i'ttchols:

•                         As you know. Mr. Morin Ind I rqi~t Michael Mm:ieca in a pclldiog laMuit against
                   Microsoft.

                          Microsoft's inimical treatment of Mr. Me:rci"a., coupled with iU inexplic&,blc conduct
                   pertaining to other c.m.ployees who directly affect Mr. Mimi~ bas cndw-ed for too long. A$ we
                   approach nearly two (2) years of a consistently hostile envirocmem, Mr. Mereiec:a has reach.eel. a
                   point where he can no longer be subjected to such abusive conditions. Ac::.c.ordmgly, consider
                   MicroSQft's hostile actions a constructive termination of Mr. Mercieca•s employmeo.t It follows
                   that Mic~) Mcrcieca will not be rctwning to work. eLrcc:tivc April 2, 2012.                           ·

                          Some hiabliJbts of Microsoft's enigmatic bdiavior include. but a.re .aot limiced 10. the
                   following:

                          1) From tbe onset, Microsoft breached WI policies by mini:matirinB and ma:ginalizing Mr.
                   Mercieca's initial complaiot to Human Resources when Micky Shieldll claimed                to have
                   ..conducted an ur11~1tigalion," but delayed any action and subsequ.e:nt.ly, summarily dismissed the
                   complaint without ever interviewing the complainant. Michael Me:rcieca.

                            2) Next, Microsoft violated its own policies and duties to its employees by braching
                   c:onfidentiahty wbicb is :nipposed to be implicit in internal iovestiptiOM (6.lld unt limited to. Dawt
          Tannenbaum alld Eddie O'Brien.

                  7) Eddie o•Brien, a Senior Vice President in the U.S. OF.M team. publicly made                       •
          (:gxegious sexist. ~crimioatory, and racist wmmcata, publicly and W'ough e--a:iails, over a
          period of nearly two (2} years. including:

                     •   "l will g~t "'1 /rlatb i1r tAe IRA (Ind Rqllbllct111 Army), "' />law 11p tlle
                         F1T11cla 1""414Muy" - Team. Offsite .Pn::sezit,ation, ~ 8. 2009;
                     •   "1Wo F~ Promotd to DWdor lit U.S. OEM" - Company announcement
                         e·mail. May 3, 2010; and
                     •   "Tlrlll soill,, wAm IJ comes to tlle U.S. SllJ> ofdu yllll'" l wo"'4 laaH Un pity for
                         Japmt ON/ I wllJ pull. 'an rl&ltJ IUUler tAI! bus tllU/ crt!DU! 01tolllel' t$IUUJIJl/. If I
                         ltave IQ/,,- US OEM Team conference call, April 27, 2011.

                This reprehensible behavior was reported by Mr. Mercieca multiple tiJne$ to both Gwen
          Huston (GM of Diversity & Inclusion) and Lisa Brummel (Chief People Officer), to no avail.

                     In the la.lest ccmplaint,. Microsoft's investigation team chose to not investigate these
          incidc.ats. Tbcte 'M!l'e btl repm:ussions and. in &u:t. Eddie o>Brien n:iceived a strategic
          promotion to Vice President of U.S. Operator Channels. Mr. Mercieca rccch1ed rcuiliation
          consistent" with Microsoft s behavior in this matter.
                                     1

                8) Microsoft has circulated numerous derogatory and defamatory emails concerning
          Michael Mercieca for no sound reason. This again is in direet violation of its own policies &:r:td
          Standazds of Business Conduct
    • '   :0 "'

•                           9) l,)espitc pieclng togetba' 11 stteigb! quartl.ra. (33 tnoodil) of ov•budset performimce,
                  Microsoft imliated against Mr. Mcn:ieca and in sivins him the lo'M:St rmow ~ ~olo-a
                  fi'¥'C (5). Clearly, be deserved a ranking in the 1-2 rqe. A:J a resull,, be c:a.m:iot tmnsCcr
                  intc:mally and is csscatially, cemented in place. Such malicioua coiuiuct cau oa.ly be viewed u
                  retaliation and furtlu:r pnuurc t.o furce Mr. Mcrcieca t.o lave hiJ c:mploymciit at Microsoft.

                          10) The early round.9 of disCoveryldo~~ prod\lction of the la~uit nm::al vatiaus ·
                  cover-ups within the Microsoft infrasttucture. To say lhis is disappoladng t.o a tenured,
                  dodicatcd. r:mplo)'CIO ~ aa Mt. MCl'Cieca would be a vut ~em.
                         It ia vnforttmato Chat Microsoft bas ~ dUa courx of action l&8iost one of the lt8lly
                  aood &"YI who bas a.od aintioum to be a Y&lv.ablo aaw:c ad loyal cmplo~ fi>r almost 18 ~
                  end who ~ves to "J'hofd the very Stand.arcb of Business Conduct be is asked to~~
                  dle neptiw treatment to which he b,a., been subjected. Ba:d on tb.e hostile mvir:ooJllmt <:reated
                  by Mic:ro90.ft.. the ~ treatment of Mr. Mercieaa and Mia:Oaoa•a rctallatory ICCioDJ have
                  ca'WICd a constructive wnaination of Michael M.en:i«a•s employment.

                   ·     In keepin&. 'With Mr. Mercieca's 18 yein of positive ped'ormanco. ~
                  consistcut profeasioaal approach, and work ethic,, and in <>ir&;r t.o mirrimia. ~Oil to .
                  Microsoft. his tam, partnc:rs. and diam, he is p:epe.Nd co work with his d.iniet ~ Joo

•                 SahaaJan. to provide a smooth ~in~ way is mutually acoommodating.

                         Pfeasc do act hesitate to cont:act the U\:l(ltem·gn~ if yuu haw an,y queistiou or commcnes.

                  cc: Michllcl Me:tei.cca
                  c:c: Paul T. Moria.~

••                                                                                                              R..P      s-o
."   ... .

                    PAUL T. MORIN and ROY A. POLI.ACK
                                                                                                                      •
                                                  A'ITORN£YS AT LAW

                            503 West 1'1 street                                    (512)-499-8200
                            Aoslin, Texas 78701                              FAX: (512) 499-8203

                                      FACSCIMILE COVER LE'l*I'ER
                                    To:            M!;. ~ric J.R; ~i~
                                    Facsimile: 512-708-1002

                                    From:          Paul T. Morin
                                    Date: "l/?J.ll2                           Time:    4;~m

                                                                                                                      •
             RE:
             Ciuse No. D-1-GN-11-QQ1Q30; Mi,chael Mercieca ~·Microsoft et al.

                                    Number of pages (including oover sbeet):_4_
             Message/instructions:_ _ _ _ _ _ _ _ _ _ _ _ _ _~------

               TW2 INFOR~1101'f CQHl'.tJHEO lN THfS F"CSJMU.J! ~AGE AND IX>CUM'E>o"TS M:COMPAHYTl«:i TKB
             S.-.ME AIU: l..HOAl.1.Y PRJVU...ECW AND COMf'IDENnAL J"'1"01UdA.nON IM'IENDE.D ONLY FOR nm use OP 1llE
                   INDTVlt>UAL OR ENTITY NAMED HE'RBTN. TF TRE READER Of  nns     ~E IS NCITTRE JN'TVtOJm
             R!CJPlF.tll' YOU AJtE .YER.EBY NOTIPIED A.~Y DLSSFMJNATION, DISTJUBtmON OR COPY OFTKIS "l'ELJ?COfY IS
              STRICTLY PROHIBITSO. lP YOU HAVE RECEIVEDlHJSTBUCOl'Y IN .ERROR PU!ASE IMNEDIATLE.'I' NOTtFY
                US BY TELE.PKONE AND R.ETlJRN THE ORIGINAL MFSSAOE TO US AT1l«E AD RESS ABOVE VIA UNmID
                                            STATES POSTAL SERVICE. THANK YOU.

             l1' YOlJ DO NOT RECEIVE ALL PAOES AS INDICATE.I) ABOVE P~I: 'raLEPRONE US IMM.EOlATU:Y AT

                                                                                                                      •
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                                             PAUL T. MOltlN .MCI ROY A. POUACK

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•
                             Tab J
2011 Performance Review for Michael J.B. Mercieca, dated September 8, 2011
                            (18RR:MSFT216)
     Per(ormanct@Microsoft                                         Performance@Microsoft Home          t
                    Status: Pending Employee Completion· • Last Updated : September 08, 2011 3:20 AM

 2011 Performance Review for Michael J.B. Merdeca

 Title:                 loEM ACCOUNT MANAGER
 Personnel
                        199472                        Manager:              !Joseph A. Sahagian
 Number·

 Department Name~ USW* OtEM SB Account Mgmt                                             Exhibit
                  - es

                                                                                     MSFT 216
          Drive Partner Satisfaction: Drive Pa.rtner satisfaction to maximize
 1
          o.istomer and partner experience (CPE).

Execution Plan;                                      Accountabilities:
    • Drive managed account planning through             • Achieve 50% OEM partlcipation on poll
      CRM tool.                                          • Acl'lieve OEM team NSAT goal of 151 for
    • Increase Executive engagements with key               US Local 0€M Division
      partners .                                         .. Written Conditions of SatisfactiOn {COS)
    • Drrve specific activities with managed OEM            meets or exceeds account plann1n9 criteria
      partners to address key drivers of                    for all managed partners and posted in CRM
      satisfaction.                                         by September 15, 2010.
    • Represent One Microsoft with approach to           • Update (quarterly) status of progress
      partners                                              against COS quarterly and add new COS as
Drive LINC attendance with applicable partners              necessary Current quarter field must be
                                                            updated before last day of fiscal quarter
                                                            end.
                                                     Increase exec.utive engagements via Redmond,
                                                     LINC, PAC, WPC, and/or CES.
Alignment (optiOnal): No Alig.n ment

Employee's Comment on Results A·gainst tfns Commitment
Poll partlcipatron was not 50% On further Investigation tt1ere were a number of contacts that were
removed from CRM without input from myself. I escalated this to our CRM team and th is continues to be 1
investigated. That said, with Joe Sahaglan's support, I re-entered data in CRM for the third time this past
year. I have already stated that some of my partners elected not to respond because they felt they could
not be truthful In the assessment of the relationship with Microsoft - some feel a sense of fear of
receiving punitive responses for any perceived negative feedbacic to Microsoft. Nothing I can do about
that except try to assure them the feectback rs vah.ied and we will change things 1f necessary. Not
responding doesn't help anyone. C have plenty of examples of executive engagement however, what is
troub llng to me 1s t hat I have Ileen cut-out of these executive engagements w ith Robert Young.}Ohns;
Ke.vin Turner etc ·this has been a source of frustrat ion but I am confident this will change now r have a
new manager 1n Joe Sahagian. This included the rnost recent event with the Microsoft Houston Store
Opening - the EPG reps were Invited and I was not and Lori Aulds drove the invitation to my Top Partner
and CEO David Altounian from Motion Computing.

Since Joe came on board - I have received much more support and useful coaching and direction on key
strategic Issues. I have also received more inclusion with direct support from Joe and Peter Han our new
GM. Joe and Peter have met all my partners collectively 3-4 times this year and based on the meetings I
have coordinated, have created great relationships with the Texas partner ecosystem.

Unlike Lor• Aulds who even in her n~ role has continued to marglna'llze and confuse my partners and
many t imes intemal Microsoft people with her actions - Joe and Peter have been very transparent and
supportive in cementing my postt1on with my partners as the lead.

                                                                                                       MS14285
My COS statements have been first rate with regular follow-up w1ttl my accounts and proactive CRM
updates - I exceeded CR~1 updating beyond what was required by the subsidiary, including post
scorecard timeline, w ith a view to ensuring continuity and preparedness for FY 12.

My CRM quality was one of the highest on my direct tean1 and Natlonl!llly with the following statistics :

     • Exceeded US Team Average Score
     • Exceeded Direct team Average Score - only Wayne Carey and myself achieved this with the rest
       being below team average
     • Ranked 2nd on direct team on overall quality score
     • Ranked 2nd on team for full completion of CRM

The level of Executive enga9ement Is extremely high with one of if not the best attendance records at
WWPC this year.

     • 100% Partner organization participation at WWPC - this is at least the 4th year I have achieved
       thiS
     • At time of w11.tlng this my partners contributed to:
           • 21 %+ of the total OEM o rganrzations represented
           • over 13% of the total people represented
           • Motion Computing received nomination for a WW Partner Award
           • Motion Computing received a US nomlnatio n and Award fur US l'i"obility Partner of the Year •
             last year they were ranked as US OEM Partner of the Year

The overall team attendanc~ numbers for WWPC overall were struggling and a change was made that
Mi crosoft would subsidize the reg tstrat.ion costs - my results were achieved prior to this decision and
were based on a) my positioning of the value of WWPC and b) the long term personal and professional
relation ships I have developed over many years. having my complete set of partners represented is a
consistent performance result in my territory over many consecutive years showmg consistent and
proven capability over a number of years.

The CPE comments I received from the responders t know were excellent ~ once again this is consistent
and shows another element of my long term proven capabilities in this category.

Optional Manager comment on Emptovee Results against this Commitment
Michael d id not achieve this commitment, as he did not meet the accountability of 50% poll par ticipation
in FY1 l. His partner partici pation was at 36%, the lowest on the team, this demonstrates a lack of effort.
The poll participation goal for FY12 is going to oe significantly higher and he will need to put more time
and effort into driving higher poll participation numbers. As a team we achieved our NSAT goal of 151
which 1s the highest it's been in many years. Michael's Condition of Satisfaction statements needed
improvernent in Hl, but he showed noted improvements in H2 on his wri tten conditions of satisfaction
statements in CRM. As noted Michael drove strong WWPC attendance results getting all of his partners
to attend WWPC where Michael's largest account (Motion Computing) was awarded the US Mobility
Partner of the Year.
        Win Customers: Inaease Windows BOS Attach leveraging WGA in
 2      UPC reduction while complying with the terms of the Consent
        Decree

Execution Plan:                                        Accountabilit1es:
   • Drive Windows 7 adoption and mix                      • Achieve Windows Pro Mix of 80%
   • Drive Office conversions via PKC and FPP              • Achieve or exceed Embedded scorecard
   • Renewed vigor for rnis·l ieensing with                  metrics
     deeper Industry sales team integration in             • Update Attach & Segmentation (PC
     support of AAA                                          shipments to include MNA) fields in GRM
Partnership with lo1..al Intel/AMO reps to m1ne for          quarterly. Current quarter field must be
new partners and ensure rig ht territory coverage            updated before last day of fiscal quarter
and attach opportunities                                     end (used to determine BOS attach rates).
                                                             Ensure attach goals and actions a~
                                                             included tn Busines.s Plan .

                                                                                                            MS14286
                                                         • Achie....e BOS attach metric for US local
                                                            OEM DiVision
                                                      Achieve IW Attach of 5%
Alignment (optional): No Alignment

Employee's Comment on Results Again$t this Commitment
                                                                                                                  I
     • Windows Pro Mix conservatively 90 .86%
     • Embedded Scorecard metrics:
          •  100% Achieved
          • exceeded Design Wins by SO%                                                                  I
          • t.xceeded On-Ramp of new OEM's by 50%                                                        I
          • 2nd to complete OED Scorecard on the whole National team - NB: Some reps still have not I
             cO'Tlpleted a I segments
          • By MYCD - No rep had completed all OED Tasks&. Out of 10 reps 7/10 still had red taskS
          • My MYCD Embedded stc:itus was Sth out of 10 reps and Jrd on our own team out of c;
          • By QJ only myself and Wayne Carey had completed ALL segments Including Q4 aa1vltles In       I
             advance
          • As stated above I was the one rep whom exceeded oeslqn Wins and On-Ramp
          • l'he relatiOnship I have with my OED colleague is first rate and has been for many years and
             continues in that vein                                                                      I
     • CRM - All updates were made In or ahead of time
                                             =
     • IW Attach exceeded 5% - Total Market 7 .5% - COEM market (Only Partners who sell Office) =        I
       29.46%
     • Additional lnfornatlon!
          • Leveraged UPC and my deep background in Microso~ lk:cnsing in the Clearcube TRADOC deal
             which resulted in over 3,000 seats of licensed Windows Client avoiding an unlicensed/mis-            I
             licensed customer/partner s..itistaction AND legal issue                                    '
          • This deal was also h ig hi ig hted with in Marketing for the AAA program

Optional Manager Comment on Employee Results against this Commitment
Michael showed solid Windows pro mix of 90%+ exceeding his goal by more than 10 percentage points. I
He has also updated the A & S fields in CRM in the required time and fashion. Michael's met or exceeded
alJ of the e•nbedoed scorecarc: metrics. frn~a9ement with the Embedded territory PAM is very strong and
µarmers have! commented that they both work well together and represent ttie right "One Micros9ft"
approach. A~ a tenured ievel 63 I would like to see Michael take a more visible role on our MiS$·llcensing
                                                                                                           I
and AAA Framework.                                                                                         t
        Grow the Business: Grow the business and exceed our FY11                                           ....
 3
        re"'enue and unit goals.
Execution Pinn:                                      Accountabilities:
   • Work closely and collaboratively with MS            • Achle....e or exceed 100% attainment of final
     Field to enable partner wins in local                 FYl l revenue based incentive Quota.
     business                                            • Meet or exceed quarterly account based
   • Execi..te account growth ptaootng across              Rev$ In Pill
     business groups: Client, 1W, and Server.                  •   S2,10S.812    in Ql
   • Explore growth opportunities across                       •   s2.4 75,709
                                                                             in Q2
     busint!ss groups with your managed                        •   s2,364,755in Q3
     partner.                                                  •   $2,960,888In Q4
   • Where applieable: Successfully launch new           • Meet or exceed Product Group Budgets
     Server products partners.                                 • Cllcnt budget of $7,757,000
   • Execute on MS Advantage and drive Office                  • IW budget of sl,584,164
     c.o vera9e and Office Conversions.                        • Server budget of $566,000
   • ~e11erage E&D team to drive FPP/PKC sales           • Coordinate comprehensive Server launch
     w;th str8tegic: E&O partners.                         plan encompassing technical, sales and
De11elopment of new product designs.                       marketing components. Checkpoints
                                                           recorded monthly (CRM)

                                                                                                        MS14287
                                                       Joint planning and v-team meetings with E&D
                                                       team
Ajjgnmeot (optiOnal): No Alignment

Employee's Comment on Results Against this CQmmitment
   • Exceeded Final FYl 1 quota for the 2nd consecutive year
         • 2 reps did not make quota on the National teani
         • 1 rep did not make quota for the 2nd consecutive year on the NatJonal team
         • At MYCO two reps were below quota
         • 1 at under 42% and 1 .!!t under 71 %
         • At MYCD my attainment was 109.07%
         • At MYCD I ranked 10th out of 16 reps
         • At MYCD 1 rep on my direct team ranked 16th out of 16 and had not made quota the
           previous Fiscal year.
         • At full yeM my attainment closed at 112 .83%
         • I ranked 10th out of 16
   • Exceeded Quota for 8 consecutive quarters - only 1 of 6 reps nationally have achieved this.
   • Client Budget was exceeded@ 120.72%
   • IW and Server numbers were not made
   • JW - I have highlighted this a number of times that my quota for IW was Incorrectly set
         • National Team lW quota reducey 52 customers representing 30% of the total ACE accounts
     • Motion covers 73 devices or 14.5% of the ACE pool
     • Xplore with strong di~ction by Joe and Wayne Care, are now in contract with NCS to co brand
       their r abfets and breakthrou~p the tug hfy lucrative Military market

Since Joe Sahagian has become my manager I am more motivated and inclined to nominate myself but
more probably other individuals for awards and have done so thiS semester as ne is simply supportive of            j
the activities l undertake

I am also diligent in leveraging the new KUDOS tool and have been told that £ am the only pemon known
by my manager who actually uses that tool to provide feedback on my peers and other 9roups In the
company.
Optional Menag er Comment on Employee llestJlts against this Commitment
Michael did 'lot fully achieve this comm.tment and he did not submit a !>ubstantiaf submiSston :n 111 for
either a CSI or CPE MSNA award. This did not meetthe expecrat1ons of the commitment. In H} Michael
did submit severa I award nominations and as noted iS qu iclc to no m1nate others for their work either            [
through formal local awards, the kudos tool or an email highlighting what has been done. I am
encouraged by the amount of activity in H2 and the nominations he made. It will be important to keep
that same level of intensity throug hOut the year and as we look to the future.
        Sales Excellence Integral to the achievement of comnutments is
        the method in how they were achieved and the approach we take
 5
        to ou,.. job with regards delivel"ing and living up to those
        commitments

Execution pjan:                                       Accountabiities:
     • Ut1lizati0n of Account plans and CRM tool to       • Acrount plans (GOSA RT) populated in CRM

                                                                                                        MS14289
       driYe business relationship and growth with             for 100% of accounts by 8/31. Achieve an
       a strategic 3 year vision.                              average account plan rating of 20 for FY'll.
     • Utilization of forecasting process and tools         • Forecast accuracy +/-5'% quarterly (set at
       to deliver timely and quality forecast                  day 1 of new quarter from dash board)
     • Leverage of technical &. marketing                   • Conduct at minimum quarterly business
       resources to provide comprehensive growth               review with l!ll accounts; marketing and
       strategies into account planning and                    technical team participation in Q6R process
       engagement                                              with designated marketing and technically
     • Drive all up team strategy for designated               engaged accounts as evidenced by
       product group or vertical.                              shared/posted QBR documents
Deep knowledge of business drhlers/inslg hts for            • Demonstrate effective fund utilization
each and every account and commu11icate them                   targeted at driving new customers and
tl~ru quality MBR~.                                            maximizing revenue
                                                            • opportu nlty arid deliver targeted ROI
                                                            • Review remainin9 content In CRM lx per
                                                               half to ensure content 1s populated&.
                                                               current. Check points on 11/1 & 4/1. CPE
                                                               Contacts are top priority
                                                            • Achieve 100% of all Named contract and
                                                               MDA deadhnt!s are met within stated
                                                               timelines.
                                                         Deliver quality MBRs by designated deadlines.
Alignment (optional): No Afignment

Employee• s Comment on Resufts Against this           c:o mmitm ent
   • Account Plans were completed before reQuired deadline and my initial average accOCJnt plan score
     exceeded commitment goal - this improved as the year went on and that was a goal I had set
     myself
   • Forecast Accuracy is solid - my rhythm of updatin9 r-orecasts is timely and oroactive using multiple
     mediums to update business changes to my manager to ensure accurate up-line reporting
   • I do not have the final forecasting accuracy numbers but am confident that I am In llne with
     expectations or pretty close to it.
   • Regular account meeti11gs and business reviews executal which is emphasized by a) my
     knowledge ot the business and accounts b) by the relationships I have with my accounts
   • CRM statistics:
         • Exceeded US national Team Average Account Plan quality score
         • Exceeded direct t~am Average Ac:count Plan quality Scor~ · only myself and Wayne Carey
            achie'lied this
         • l1) time
                                                           • Career development plan i11 place,
                                                             proactlvely dt1ve Quarterly career
                                                             dtsc..iss10n with Mgr, compiete"less of Mtd-
                                                             Ycar career Otscusslon (MYCD} on time.
                                                           • Complete 2 optional on line Role Guide
                                                             e-o urse5 du nng FY l l; 1 in each half
                                                        Spend In line with allocated travel and experses
                                                        (T&f} budget at .no greater tnan 100 6/o
Alignment (oe>tionar): No Alignment

Emptovee's Comment on Rea1lts Aq~inst this Commitment
     •   Readiness Plan Completed - consistently First to meet FRI deadlines                                  I
     •   Completed All required Courses
     •   Exceeaed Optional On-Une course req...1 rement ·see below
     •   Actively mvol~d in FRr Alpha Course testing
     •   Selected for 6cst Practice Case Study and use of FRr for Cloud Computl11g positioning - Case Study
         written up
     •   Actively involved in shaping/designing content for Mandel Storytelling Courses
     •   OPEX management is first rate with spendin9 below Expense budget
     •   Wils ask~d lo tlg hten spending to mitigate over budget spend Ing of others on the team and
         managed my business accordingly to help in this regard - slmply my budget management skills
         helped mitigate overspending by ether!> on the team
     •   Received excelle'lt feedback on "1.y MSR's and also rfly weekly up/downs in tenrs oF riqht 03lance
         of Quantity; quality and business insight
     •   Gave my new mana~er my semester rev ew - this is unreQuested by him and i!> something l do i1
         the norrnal course of business.

Colrses Completed

                                                                                                          MS14291
 Course Title                                                                                    ...
 ::1.22546JC!ood SeMces Readtoess Dav (la.s Col111as. TX'i
 -s 504"18/Mandei Communicating Microsoft Value nirough Storiitelltng - for OEM
  -;Cloud Services Readiness {Pre-Read}
1
  :!Cloud Se1w:es Readiness (ReQtonallv Faohtated)
. =·Cloud Services Readmess Test
I ::iCommurucallflQ Microsoft Valu~ Throuqh StorvtellmQ· for OEM
    --1FY11 tncent1ve Compensation (R8fl
I ::rFY11 Pnorities and Comoete Stratoov
  ;;:<'.;lobal Diversity_ and Inclusion at Micsosoft 2.0
                                                                                                       '
  .::1Leantinuat1on of poor revenue performance ashed kl not make budget (1 of only 2
     reps) in a launch year fiscal f"Y 10 when everyone else made and exceeded quota.

I have to thf!n hypotheslTe that a) this individual was receiving special concessions and/orb) I was
receiving unnecessary and unwarranted negative focus as a rct~liatory measure to "build" a case
against me. In short, why was I placed on weekly performance reviews and this individual was not
despite his poorer performance record and trending and over budget expense spendin9?

Despite the negativity; hara~sment; the uncomfortable and untenable environment that forced me to
elect to worl< from home and the ever increasing negative pre~sure and additional workload review

                                                                                                       MS14293
requirements placed oo myself, I have still chosen to rise above this ant:: put Microsoft; Partners;
Customers and my colleagues first and continue to drive attainment in llne and often in excess of
commitment levels.

Whilst not perfect, ( I will and always will continue to strive fbr that level), I will not allow the
detractors to sway my performance to a negative route - I am paid by Microsoft to manage a
business and all the previously mentioned teams and individuals rely on that perfonnaoce.

Despite unilaterally not being given any leadership projects th is year by the management team, l
continue to operate as a leader and in line with our Standards of Business Conduct highlighting to my
manager and GM when others (Directors' and above) have not. I take my role extremely seriously
and see myself as an ambassador of Microsoft in everyt,in9 I do 24/7.

I have almost completed 18 years at Microsoft and I continue to execute my responsibilities
diligently; consistently and with comp;,ssion and integrity and with a high degree of business acumen.
My consistency and proven capabilities over each role In almost two decades and in this role, despite
the toxic environment that I find myself in, - have been nothing short of assiduous and I am
confident that should Microsoft in thiS review and beyond tlnd otherwise, that the investigations and
information that will continue to ring information to light mme to light will fully support my excellent
record of proven performance and cap.abilities.

To my manager Joe Sahagian I will formally go on record in thanking him for managing this delieate
situation with integrity and poise and a hi9h degree of professionalism wtlieh from my experience of
him over the years is of no surprise.

Manager's Overatl Performance Assessment: Summarize both the employee's results
against commitments, and how weU this employee demonstrated an ability to collaborate
across boundaries, impact and influence others, and exhibit interpersonal awareness and
confidence. tn addition to these core competencies, indude any other profession-related
competenc:ies that were key to hrs or her deliverable5. When asseHing overall performance
con5ider the. environmenl in which results were achieved and the impact of perlormanca
relative to peers. •summari~e the employee's proven cctpability based on a longer-term
demonstrated history of taking on more chatlenging work while continuing to deliver resu9ls
(*proven capability is not applicable for an employee's first review at MS).
Michael, you did a good job meeting each of your all up revenue quarterly accountabilities, as an
account manager, this is very important. Another area that you showed solid performance was
around driving WWPC attendance and across being an alpha tester on our FRI murses. Some
commitment areas where you need to stay focused on in FY12 are meeting all of your Product
Groups, driving better poll participation and keeping your plans In CRM up to date with quahty short
and long term goals and objectives. You atso have done a good job of staying in front of the trends
within your business especially as it relates to Motion Computing and Xplore Technologies tablet
opportunities and chal1enges.
Despite some of the above areas of success, there are number of areas where you dia oot achieve
your commitments and I expect to see consistent and sustained improv~ment. An area for
development and opportunity around Microsoft competencies is product and technok:>gy expertise.
Managing our largest tablet partner provlde:s the opportunity for yo1J to bring real time Intelligence
back to the broader team around compete and competitive trends within the market place. Another
area of development is cross group collaboration. Over the past year you have not been able to
generate support from others. Feed back - both verbal and from the feedback tool -- indicates that
others are having trouble partnering with you. You have engaged with others in a way that makes
then not want to partner with you. How you perform your job is just as critical as your end
results. Your inability to partner with your team is not good for our internal team dynamics, external
team dynamics and customers.
Flnafly, I note that your overall self·assessmmt contalr.s spec..i atlon and hypothesis about other
employees. Again, this is not appropriate content for your annual review. You also suggest that the

                                                                                                           MS14294
performance coaching we- have worked on over the last year iS rE'taliatory 10 some way. I can assure
you tl'\at 1 talce the development of employees very seriously, alld that r initiated this action as a way
to help yo1.. improve both the "what" and "howH of your performance. Any coaching and management
J have provided you was a msult of IEQltlrnate l>uslness anti perfonnance concerns.
I am gi\o/lng Michael a score of S for his work in FVl 1. This ratln9 Is ln'
Witnesses and documentary evidence did not corToborate Michael's assertion that Lori alluded to
their past romantic relationship in 1: 1s, made a statement regarding their past sex.ual relationship
at his cubicle, asked him to go out dancing (as his manager), or threatened ttis job if he revealed
their past romantic relationshlp. Documentary evjdence did corroborate that Michael voluntarily
involved himself in Lori's domestic issues with her ex-boyfriend and that Lori permitted that to
occur.
The investigation revealed there was a close personal (non-romantic) friendship between Lori
                                                   4
and Michael after she became his manager in 2007. The investigation did not find evidence

4
 For example, in illl email dated October 2, 2008, Michael stated to Lori: "I have dropped everything when you had

                                                                                                                               •
your problems with Chris whatever times of the day or night and come over and called you to check on you-when

                                                                                                                     MS37858
•   supporting the unwelcome verbal conduct by Lori cited by Michael in support of his allegation
    of sexual harassment. lbe comments related to the past romantic/sexual relationship were
    denied by Lori and there were no witnesses/documentary evidence corrnborating them. Also,
    Michael's involvement in Lori's domestic issue appeared voluntary on his pa.rt.

    Analysis and Conclusion

    Although Lori and Michael did have a past romantic relationship in 2002 and a close personal
    (non-romantic) friendship that deteriorated in FYlO, I did not find support for Michael's
    allegation that he was sexually harassed by Lori. There are a number of factors that led to this
    conclusion: Michael supported Lori's hiring as his manager in 2007 and conununicated that
    support to the hiring manager; Michael praised Lori's management in emails and in the FY09
    WHI poll in contradiction of his subsequent allegation; Witnessffhompson observed a
    professional and congenial working relationship between Lori and Michael since Lori became
    Michael's manager and no discomfort on the part of Michael; and Michael did not raise this
    allegation or inform HR of the past romantic relationship until after he was identified as a subject
    in an ERIT investigation alleging sexual harassment and after issuc:s were raised by Lori about
    his performance thereby raising significant question regarding his motive. Therefore> based on
    tbe totality of the evidence, I do not find that Lori's treatment of Michael violated Microsoft's
    Anti-Harassment and Anti-Discrimination Policy.

    I do find that Lori exercised extremely poor judgment as a manager. She should have disclosed
    the past rum.antic relationship and the close personal (non-romantic) relationship to Human

•
    Resources or management at Microsoft at the time she was hired as Michael's manager, shortly
    thereafter, or when Micky was looking into Michael's concerns in March 20JO. She also should
    have answered truthfully when I first asked her in this ER1T investigation whether she had been
    romantically involved with Michael in the past.

    Alle&ation: Gender and National Origin Discrimination Under Mkrosoft•s Anti-
    Harassment & Anti·Discrimination Policy-Unsupported

    On August l l, 2010, Michael also alleged that Lori, David Tannenbaum, and Eddie O'Brien had
    discriminated against him because of his gender and his national origin. s In support of this
    allegation, Michael rajsed some of the following issues:

          •   Subjects pressured him to leave his job
          •   Subjects increased tbeir focus on his performance
          •   Subjects provided no positive affinnations or promotions
          •   Subjects marginalized him
          •   Subjects made derogatory conunents

    was the la.~t time you called to actually just check on me and not return one of my calls or call me for a non work
    fdated issue? l have always been there for you. I have even covered for you in !he office when you were tired or
    upset to come in - no judgment - no expectations - just pucling friendship first knowing you will talc~ can: of
    business as l will and have always done."

    ~Michael and his attorney had previously stated treatment from his management was related to Tracy Rummel's
    allegations against him in November 2009 .

•                                                                                                                         MS37859
,
    harassment by Lori. The matter was referred back to Micky for further handling by HR and a
    number of additional calls/emails between Micky and Michael occurred.

    On April 19, 2010, Michael emailed to Micky and ERlT a document titled, "Form.al Complaint
                                                                                                                                        •
    from Michael Mercieca." The document again raised Michael's concerns about the fact that
    allegations were raised against him by Tracy Rummel and that his management chain was aware
    of the allegations: "I have become a victim of a malicious baseless rumor which has assassinated
    my character and marginalized my role on the US Local OEM Team"; "A baseless rumor has
    escalated, unknown to myself, throughout the management structure and HR. which I believe is
    the catalyst for the treatment I have been subjected to." In the document, Michael did not raise
    any concerns regarding discrimination because of gender and/or national origin and Michael did
    not raise any concerns regarding sexual harassment by Lori. The matter was referred back to
    Micky for further handling and follow-up by HR.

    On May 25, 2010, Michael was notified by ERIT that he was the subject of an l::RIT
    investigation related to Tracy's allegations. In response to I.hat notice, Michael stated: "I am
    beginning to think that given Ms. Rummel is receiving increased focus and I am now being
    discriminated against as well as harassed. I will obtain advice from counsel on this point."

    On June 9, 2010, Michael's attorney forwarded correspondence to Microsoft stating: "Please
    consider this correspondence a supplementation to Mr. Mercieca's original Formal Complaint
    (lodged on April 19, 20 l 0)." That correspondence included broad alleged violations of
    Microsoft's Anti-Harassment/Anti-Discrimination policy and Non-Retaliation policy, including:

             •

             •
             •
                 " ... Microsoft's harassing, discriminatory, and retaliatory conduct based on his gender
                 and national origin, which has surfaced since approximately N'ovember 2009."
                 " ... seltual harassment in the workplace."
                 " ... Microsoft's steady course of retaliation perta.irung to various aspects of rus
                 employment with Microsoft:'
                                                                                                                                        •
             •   " ... the hostile work environment that has surrounded him since undisclosed
                 allegations pertaining to him started to covertly spread throughout the infra-structure
                 of Microsoft."

    Summan; of AUeeations

    Michael alleged that he had been sexually harassed by Lori. Michael highlighted in support of
    this allegation the fact that he and Lori had been romantically involved (October 2001 through
    January 2002) prior to Lori becoming his manager.

    Michael also alleged that Lori, David Tannenbaum, and Eddie O'Brien had discriminated against
    him because of hls gender and rus national origin.2 Michael also alleged that the subjects had
    retaliated against him.

    2
      In addition to the primary subjects listed, Michael, via his attorney's statement, also raised an allegation that the
    KR.BP, Micky Shields, failed LO involve Michael when looking into his Apnl 19,2010 04 fonnal complaint" and
    before concluding that there was O() support for the com:erns raised within it regarding Michael's work relationships,
    i111d that !his failure/omission was because of Michael's gender and national origin. That allegation wa.s investigated
    by ERIT and the concerns re~rding work performance were escalated to HR management. Neither Michael nor his

                                                                                                                              MS37S6C
                                                                                                                                        •
•   fressure to Leave His Job

    Michael stated that the subjects pressured him to leave his job at Microsoft and/or within US
    OEM. Some of the examples he provided included: Eddie expressing concern to Lori that
    Michael was still in role at end of FY09: Lori sending Michael emails in October 2009 and
    February 2010 suggesting he research an OEM Country Manager/Director position and apply for
    jobs overseas; I.ori suggesting to Michael in December 2009 that he work for a non-profit
    agency; and Lori telling Michael in April 2010 that he need to find another job.
    The subjects denied pressuring Michael to leave his job at Microsoft and/or within US OEM.
    Regarding the specific examples above that Michael identi ficd, subjects, witnesses and
    documentary evidence indicated the following:

    Eddie confirmed that he raised a concern to Lori at end of FY09 that Michael was still in role at
    163. Eddie stated. and documentation corroborated, that Michael had been a L63 for 4+ years,
    that he had observed Michael's performance on partner visits in FY09. and that he saw no
    evidence of an opportunity for advancement for Michael beyond L63 within US OEM based on
    his observations. Eddie stated, and documentation and witnesses confirmed, that he provided
    Michael with a FY l 0 stretch opportunity (UPC project) in order for him to show that he could
    demonstrate the skills and abilities to perform at the next level.

    I .ori denied telling Michael to find another job or work for a non-profit agency. She confirmed
    that she sent emails to Michael regarding open positions at Microsoft.. She stated, and

•
    documentation and witnesses corroborated, that she and Michael have had career discussions,
    that the open positions might provide Michael the advancement to level not available within US
    OEM, and that the same positions have been suggested to other members of her team.
    Witness/Sahagian confirmed that he was notified regarding one of the positions by David and
    had gone for an informal interview.

    lncreased Focussm Performance
    Michael slated that subjects increased their focus on his performance. Some examples he
    provided included the following: David criticized Michael for missing deadline on UPC project
    in February 2010; David and Lori twisted positive feedback from partner into negative feedback
    in April 2010; Lori accused him oflying about partner visit in April 2010; Lori reprimanded
    Michael for an outburst outside her office on August 3, 201 O; and I ,ori questioned the arnowit of
    his vacation in Q4.
    The subjects denied any increased focus on Michael's performance. Regarding the specific
    examples above that Michaei identified, subjects, witnesses and documentary evidence indicated
    the following:
    David confirmed, and witnesses and documentation corroborated, that Michael was appointed
    the lead of the UPC project by Eddie in November 2009 and that he missed an assigned January
    2010 deadline for outlining a plan and strategy on the UPC project. David stated, and
    documentation corroborated, that he subsequently followed up with Michael in February 2010
    after lhe deadline had passed requesting the plan/strategy .

•                                                                                                         MS37861
•

    Lori stated, and documentation corroborated, that she and David were concerned in early April
    2010 about how Michael was positioning T & E budget constraints with his partners based upon
    Michael's statements to them. She stated, and documentation corroborated, that this concern was
    reinforced when she and David received an email from a partner that praised Michael's work but
                                                                                                              •
    also identified their T & E budget as the reason the partner had limited visits from Michael that
    affected their numbers with Microso~ Based upon the statements from Michael and the email
    from the partner, Lori provided constructive feedback to Michael around discussing T & E
    budget issues with partners. She stated. and docwnentation confirmed, that Michael pushed back
    on her and was non-receptive to the feedback.
    Lori confirmed that she confronted Michael on April lS, 2010 as to whether he lied about
    visiting a partner. She stated, and documentation oorroboratcd, that Michael had cancelled a l: 1
    they were scheduled to have on April 14, 2010 in order to make an emergency partner visit and
    that she was later informed by the partner that Michael did not meet with them.

    Lori confirmed that she raised a concern to Michael regarding his treatment of her on August 3,
    2010. She stated, and witnesses corroborated, that Michael was loud and disrespectful during a
    conversation they had regarding Eddie's decision to omit Michael's attendance to a meeting
    between Robert Youngjohns and one of Michael's partners. Witnessffhompson and
    Witness/Dowrnan were working nearby and both stated that Michael was "very loud" and
    "unprofessional" towards Lori during that discussion.

    Lori confirmed that she had discussions with Michael in April 2010 regarding bis request for

                                                                                                                  •
    vacation. She stated, and documentation corroborated, that she approved Michael's vacation but
    followed the guidance of her business leaders when requesting that ~chael and her entire team
    limit their vacation in Q4 in order to focus on closing out the fiscal year.
    No Positive Affirmations or Promotions
    Michael stated that the subjects provided no positive affirmations or promotions. Some of the
    examples he provided included: the subjects failed to acknowledge any of the posili.ve feedback
    he received from partners, the subjects failing to nominate him for awards. and the subjects
    failing to promote him.
    Subjects stated, and documentation corroborated. that they did acknowledge the positive
    feedback he received from some partners and that Lori had nominated him for awards and team
    achievements when warranted by his performance. Subjects stated, and witnesses and
    documentation corroborated, that there were concerns regarding Michael's inconsistency in
    perfonnance, and his ability and willingness to exhibit competencies necessary to promote him
    to nex.1 level. Lori, as well as other subjects, have promoted both male and female employees.
    Witness/Both was Michael's skip-level manager in FY08/FY09 and Michael identified her as his
    primary "supporter" and advocate at ~icrosofi. Witness/both recalled a couple conversations
    they had regarding Michael's desire to be promoted but that he struggled to exhibit competencies
    and desire to up-level from L63 when she was his skip·level maDager. She stated that Michae1
    was a difficult employee to manage and non-receptive to feedback, that Michael would often
    disappear on his accounts, and that Michael would not follow through on stretch assignments.

                                                                                                        MS37862
                                                                                                                  •
    •

•       Marg_inalization

        Michael alleged that the subjects have marginalized !Urn within US OEM and with his partners.
        Some of the examples he cited included: Lori failing to conduct regular 1: 1s with him; Subjects
        cutting him out of emails and a meeting with Robert Youngjobm; related to a partner; Lori and
        David denying his attendance at WPC; and Lori cutting his T & E budget in FYlO.
        The subjects denied marginalizing Michael. Regarding the specific examples above that Michael
        identified, subjects, witnesses and documentary evidence indicated the following:
        Lori confirmed that she and Michael did not have regular l :ls scheduled on their calendars. She
        stated, and witnesses and documentation corroborated, that she and Michael had a close working
        relationship in the Austin office and that the two of them would meet for l: 1s to discuss
        Michael's business often on an ad hoc basis or at lunch.

        Subjects stated, and witnesses and documentation corroborated, that Michael has not been
        included on some communication with his partner, Motion Computing. Subjects explained, and
        witnesses and docwnentation corroborated, that this was due to ( 1) the fact that Lori is leading
        the US OEM's high·level Apple Compete Strategy that involves Motion. as well as other
        Microsoft partners not assigned to Michael and (2) the fact that Michael was on vacation for
        much of June/July 2010 when this Apple Compete Strategy "heated up'' and required
        conununication with Motion. Subjects also seated, and documentation and witnesses
        corroborated, the meeting between Robert Youngjohns and the CEO of Motion was focused on

•       the Apple Compete Strategy and that Robert prefers smaller meetings.
        Lori and David stated, and documentation corroborated, that Michael initially communicated to
        them that he would not be attending WPC because of low partner attendance. They stated> and
        documentation corroborated, that Michael ultimately could not attend V.'PC because it conflicted
        with the only available dates that he could attend in~person BPOS training (due to his vacation
        schedule in July 2010.) Lori stated, and documentation corroborated, that she did not cut
        Michael's T & E budget in FYlO.

        Derogatory Comments

        Michael alleged that at an offshe Eddie seated "I'll get my friends in the IRA to blow up France."
        He stated that lhe commented offended him because his mother's name is French. Eddie denied
        the conunent and no -wimesses present at the offsite, including lhe HR.BP (Witness/Shields),
        corroborated it.
        Michael also alleged that Eddie sent an organization-wide email titled "2 Females Promoted to
        Director". He stated lhat email offended rum because Eddie's organi1,ation does not designate
        when men are promoted. Edcie confinned lhe email and noted that he received coachlng after
        sending it that such email announcements should be more balanced. further, the organization
        has announced other promotions of individuaJs by name via email. the email could be hurtful to
        both men and women in his organization.
        Analvsis and Conclusion

•                                                                                                            MS37863
The investigation did not reveal sufficient evidence supporting MichaePs allegation of
discrimination by the subjects because of his gender or national origin. First, Micha.el provided
no corroborating witnesses or evidence that the treatment he received from subjects was related
to either his gender or national origin. Second, there was a legitimate basis for the subjects'
                                                                                                                          •
management of Michael in terms of career discussions, coaching and feedback on corroborated
deficiencies in performance. Third, many of the items identified by Michael as discrimination
were legitimate business/management decisions made by the subjects that he simply disagreed
with. Fourth, many of the examples of llllfair treaunent by the subjects cited by Michael were
contradicted by the interviews and documentary evidence. Finally, Michael had previously
identified Tracy RwnmePs allegations in November 2009 against him as the catalyst for his
treatment by the subjects and it was not W1til he was notified. of the ERIT investigation in May
20 l 0 that he raised his allegations of discrimination.6

Based on the foregoing, I find that the evidence does not support Michael's aJlegation that his
gender or national origin was/is a factor in the subjects' treatment of him. Accordingly, I did not
find that the subjects' treatment ofMichael violated Microsoft's Anti-Harassment and Anti-
Di.scrimination Policy.

 Allegation: Retaliation under Microsoft,s Anti-Harassment & Anti-Discrimination Policy
-Unsupported

Michael also alleged that Lori, David Tannenbaum, and Eddie O'Brien had retaliated against
him for raising a discrimination allegation against them and for participating in this ERIT

                                                                                                                              •
investigation. ln support of this allegation, Michael cited the following:

    •    Feedback in FYlO Review
    •    Rewards in FY10 Review

Feedback in FY I 0 Review:

Michael alleged that the subjects had retaliated against him by highlighting only
"critical/negative" foedback in his review !hat wa.c; not substantiated and never raised in 1:ls or
in MYCD. An example of this was the feedback that "I 'held hostage' my colleagues to achieve
my objectives.

Subjects denied that they retaliated against Michael in regards to his FYl 0 feedback. Lori stated,
and v.itnesses and documentation corroborat~d, that Michad's FY l 0 written review included
both positive and constructive feedback obtained throughout the year and via the
Perfonnance@Microsoft tool. Lori stated, and wiuiesses and documentation corroborated, tha~
Michael did receive feedback from Witness/Pisan and his team that included the term '•held
host.age" when discussing their feedback on Michael.

Rewards in FY l 0 Review

6
 The irwest;gation did not reveal evidence 54.JJ)portlng the allegation that subjects treated him unfairly and/or
treated him unfairly because of Tracy Rummel's alfegations.

                                                                                                                    MS37864
                                                                                                                              •
...
      "

•         Michael alleged th.at the subjects retaliated against him by awarding him a CBI bonus and Stock
          grant that were a 69-70% reduction of what he received in FY09 despite the fact that he reached
          his quota and had the same rating (Achievcd/70%). Michael highlighted that a colleague
          reporting to Lori, Michael Warren, was awarded equivalent or higher CBUSlock awards despite
          having missed his quota.

          Subjects denied that they retaliated against Michael in regards to his FYI 0 rewards. Regarding
          CBI, subjects stated, and witnesses and documentation corroborated> that there were additional
          factors weighed besides quota attainment that went into the assessment of PA Ms in David's
          organization and Michael scored the lowest of all P AMs in David's organization. Subjects
          stated, and documentation corroborated., that there were significant issues related to Michael
          Warren•s business that resulted in adjustment of his quota attainment to 99% and Michael
          Warren did better than Michael in other factors weighed by subjects when assessing P AMs in
          David's organization. Regarding Stock award, subjects stated, and witnesses and documentation
          corroborated, that Michact•s length of time in role, corroborated deficiencies, and documented
          concerns around the UPC project were considered when assessing his contribution ranking at
          bottom 70% on con!ributioo - thereby resulting in lower stock award.

          Analysis and Conclusion

          The investigation did not reveal sufficient evidence supporting Michael's allegation of retaliation
          by subjects. First, the feedback used in his review was substantiated by witnesses and statements
          within the Perfonnance@.\1icrosoft tool a.nd the issues around the "held hostage" comment was

•         verbatim feedback that had first been raised in early January 2010 with Michael. Socond,
          Michael's CBI and Stock award are supported by witnesses and docwnentary evidence based
          upon his achievements against his commitments for FYl 0 and contribution ranking for FY10.

•                                                                                                               MS37865
                      Tab N
Email string from M. Mercieca to G. Houston, dated May 5, 2010
                      (19RR:MSFT297)
•   To:
    Cc;
    from:
    Sent:
            Gwen Hoi;ston[gwenh@rnicrosofLcomJ
            Michael Mercieca[michmer@microsoft.com]

    lmportanCf):
    Sensitivity:
    Subject:
                             Mic-;lae! Mercieca
                             \/'led 515/2010 3:55:43 PM
                             Normal
                             None
                             RE; Two Female Promotior.s to Directer in USOEMl

    imagc002.ipg
    image004.png

    G'OayGwen,

    l reflected on our conversation of yesterday evening fcr quite a while. J
    wanted to thank you for your empathy regarding th:s cieUcale, but
    nonetheless important issue. I 1horoughty enjoyed !is~ening to yo1,;r
    perspectives o!"l diversity, wt:ich ovetiap mine in many ways. Wrth my o-wn very
    diverse backgrO'Jnd, combined wtt:h the experiences I rave been lbrtuoata to
    have in working around the wor1d: I have grown accustomed to enjoying the
    value of diversity and growing as a result. My own personal quote tor
    diversity is "The difference is in the differerJ:ie".

•   There is extraordinary value in different perspectives and styles. Your
    comments on diverse ''styles" was very comforting to me. J have felt for some
    time that diversity wltr.in Microsoft is governed by major groups such as:
    ~encer; sext1al orientation: race et;.

    'Whilst tt10se: are extreme

512-795-5366wk

512~795-5301   fax

512-779-- mb

Description: Win7 Signah.:re

  DescrlptJon: cld:lmage001.png@01 C9E906.8C022B901
bing ... , so go bing

                                                                            •
From: Michael Mercieca
Sent: Tuesday, May 04, 2010 7:24 PM
To: Gwen Houston
Subject FW: Two Female Promotions to Director in USOEM!

fyi

From: Eddie O'Brien
Sent: Monday, May 03, 2010 2;32 PM
To: lJS OEM
cc: Lauren Gardner; Robert Youngjohns; Micky Shields; John Case
Subject Two Fe.-na!e Promotions to Director in USOEM!

                                                                            •
•   FY10 has been an exciting time to be in OEM. We are executing well,
    capitalizing on the growth in the PC market and the launch of Win 7 thus
    making outslanding traction on attach and revenue while making very strong
    progress on CPE & OHi.

    US OEM is driving hard to build on the Windows 7 momentum to drive share and
    premium mix as part of our overall compete strategy against Apple, Google
    and Linux. Some of owr key objectives are 1) to land Windows on all PCs
    and new form factors; 2) capture the Corporate refresh opportunity; 3} Land
    Professional on business PCs; 4) Land Windows 7 Starter on Netbooks; 5)
    Ensure Office 2010 Starter image is on all PCs and 6) Lend Windows Live Wave
    4 and Bing are on as many PCs as possible and 7) continue to grow Server
    Attach.

    Two roles that are critical to achieving these goals are 1) how we Operate
    Sales and manage the Business overall to drive attach and 2) how we engage
    with our Verticals and Named Accounts. In light of this I am very pleased to
    announce the promotions of Lori Aulds to Director Named and Vertical and
    Jeannine Borgen to Director Sales Operations and Business Management to
    assist in driving these key efforts.

•   Lori has played a critical role in enabling the team to drive 182% of budget
    and 17% YoY growth in our Named Business as Group Manager for tile West
    Region. Lori reads our engagement to WWOEM Named Team and is key
    contributor to WN projects like LINC & LEAP. As Director for the Named &
    Vertical she will deepen Iler focus in this critical part of the business to
    drive longer term growth into the Named Business. Since joining the OEM team
    in FY08, Lori has made a significant contribution first as Sales Manager,
    then Group Manager and I know this will continue es Director. Lori will
    continue to report to David Tannenbaum, Director for US Local OEM Sales, as
    he will continue with his responsibilities for the all up Named and System
    Builder sales in the US.

    Before joining us, Jeannine worked in PCMIT where she oversaw the PC mark.et
    and attach trends for 78 subsidiaries and integrated analysis on MNA,
    Netbook, Apple and UPC into the forecast while managing live direct reports.
    In addition to managing negotiations and discussions with 78 subsidiary GMs
    and several regional VPs, she reported and defended results out to a variety
    of executive stakeholders including from Client, Server and IW BGs, OEM,
    Corporate Strategy and Investor Relations. In tier current role. she has
    ramped quickly and has been a key liaison to working with her former team in
    properly setting the market and attach trends and communicating out those
    trends to the various stakeholders. Jeannine's unique work experience lends
    itself to helping through cross-group and cross-team collaboration to
    facilitate a more streamlined process and continued focus on attach through
    sates operations aM Business Management. Jeannine will continue to report

•   directly to me.

                                                                                   MS00593
Please join me in congratulating Lori and Jeannine on their promotions to
DirectorII
                                                                                •
Thanks

Eddie

Eddie O'Brien

Vice President US OEM

Micro.soft Corpora1ion

eddieob@microsoft.com

Desk: + 1 425 7056447

Cell: + 1 425 7856788

                                                                                •

                                                                                •
                                                                            MS00594