Court Opinion

ID: 168784
Source: CourtListenerOpinion
Date Created: 2010-08-14 16:50:59+00
Date Added: 2024-06-11T12:29:09.035838
License: Public Domain

F I L E D
                                                                  United States Court of Appeals
                                                                          Tenth Circuit
                      UNITED STATES CO URT O F APPEALS
                                                                      February 15, 2007
                             FO R TH E TENTH CIRCUIT                 Elisabeth A. Shumaker
                                                                         Clerk of Court

    STEPHEN R. M ERRITT,

              Plaintiff-Appellant,
                                                          No. 06-1198
     v.                                        (D.C. No. 04-CV-01565-EWN-PAC)
                                                            (D . Colo.)
    TELLABS OPERATIO NS, IN C., a
    Delaware corporation,

              Defendant-Appellee.

                              OR D ER AND JUDGM ENT *

Before HO LM ES, M cKA Y, and BROR BY, Circuit Judges.

          Stephen R. M erritt appeals the district court’s grant of summary judgment

to his former employer, Tellabs Operations, Inc., on his claims of age

discrimination. W e have jurisdiction under 28 U.S.C. § 1291, and we AFFIRM .

*
       After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist the determination of
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is
therefore ordered submitted without oral argument. This order and judgment is
not binding precedent, except under the doctrines of law of the case, res judicata,
and collateral estoppel. It may be cited, however, for its persuasive value
consistent w ith Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
                                          I.

      Tellabs sells products to telephone companies, including independent local

exchange carriers (ILECs) such as Qwest Communications, Verizon, SBC

Corporation, and BellSouth. In November 2000, Tellabs employed M r. M erritt,

then 47 years old, to head the Qwest sales team as a Vice President and General

M anager in the North American Sales Organization. There were three other vice

presidents in the ILEC sales group, one each for the Verizon, SBC, and BellSouth

accounts.

      The years 2001 and 2002 were difficult in the telecommunications industry,

and Tellabs’s ILEC sales dropped. In 2001, M r. M erritt was given responsibility

for a Canadian territory and apparently he met the quota for that territory until it

was reassigned in September 2002. Qwest’s purchasing diminished, however, and

he met only 24.35% of his Q west quota for 2001 and 23.21% for 2002. Aplt.

App. I at 282. None of the other sales vice presidents met their quotas, with the

most successful achieving 55.72% of his quota in 2001 and 60.89% in 2002. Id.

No other ILEC sales vice president, however, had as low of a quota achievement

as M r. M erritt; each achieved over 50% of his quota in one of the two years,

while M r. M erritt achieved less than 25% in both years.

      In O ctober or November 2002, Charles Bernstein became M r. M erritt’s

direct supervisor. M r. Bernstein was supervised by Robert Pullen, who was in

charge of Tellabs’s sales groups. M r. Bernstein began informing M r. M erritt,

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orally and in writing, of M r. Bernstein’s dissatisfaction with M r. M erritt’s

performance soon after he began supervising M r. M erritt. M r. Pullen decided to

end M r. M erritt’s employment with Tellabs. His employment was terminated on

February 5, 2003, when he was 49 years old. Tellabs replaced him with an

employee in his early forties who met the Qwest sales quota only after it was

further reduced. Neither the replacement employee nor any of the other sales vice

presidents, who apparently were all younger than M r. M erritt, were selected for

termination of employment.

      M r. M erritt sued under the Age Discrimination in Employment Act

(ADEA), 29 U.S.C. §§ 621-634, and Tellabs moved for summary judgment. The

district court held that M r. M erritt had not presented direct evidence of

discrimination. Relying on the M cDonnell Douglas burden-shifting test

applicable to cases involving indirect evidence, the district court held that

M r. M erritt had established his prima facie case and that Tellabs proffered a

legitimate non-discriminatory reason for the termination by asserting

M r. M erritt’s poor performance. 1 The district court then determined that

M r. M erritt had not created a genuine issue of material fact regarding pretext and

granted Tellabs’s motion for summary judgment on the A DEA claim. It also

dismissed M r. M erritt’s state law claims without prejudice. M r. M erritt appeals.

1
      M cDonnell Douglas Corp. v. Green, 411 U.S. 792, 802 (1973).

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                                         II.

                                Standard of Review

      W e review a grant of summary judgment de novo. Simms v. Okla. ex rel.

Dep’t of Mental Health & Substance Abuse Servs., 165 F.3d 1321, 1326 (10th Cir.

1999). As this court has often explained:

      Summary judgment is appropriate “if the pleadings, depositions,
      answers to interrogatories, and admissions on file, together with the
      affidavits, if any, show that there is no genuine issue as to any
      material fact and that the moving party is entitled to a judgment as a
      matter of law.” Fed. R. Civ. P. 56(c). W hen applying this standard,
      we view the evidence and draw reasonable inferences therefrom in
      the light most favorable to the nonmoving party.

Id. But the nonmoving party must have more than “a scintilla of evidence” in

support of his position: “an issue of material fact is genuine only if the

nonmovant presents facts such that a reasonable jury could find in favor of the

nonmovant.” Id. (quotation omitted).

                                      Analysis

      After rejecting M r. M erritt’s claim of direct evidence of discrimination, the

district court granted summary judgment at the third step of the M cDonnell

Douglas burden-shifting framew ork. Thus, this appeal focuses on (1) whether

M r. M erritt presented direct evidence of discrimination, and (2) whether he

presented sufficient evidence to create a genuine issue of material fact concerning

pretext.

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                                A. Direct Evidence

      M r. M erritt first argues that he presented direct evidence of discrimination

in the form of a statement by Tellabs’s CEO, M ichael Birck, that was published in

a new spaper article five w eeks after M r. M erritt’s employment ended. In

discussing the promotions of Edw ard Kennedy to chief operating officer for

Tellabs’s North American Operation and Anders G ustafsson to lead Tellabs’s

international business, M r. Birck stated, “[w]e’re reducing the average age of

senior management with this announcement. . . . That’s a good thing as far as I’m

concerned.” A plt. App., Vol. I at 283. M r. Birck, however, did not directly

supervise M r. M erritt and did not take part in the decision to terminate

M r. M erritt’s employment. Id. at 80, ¶ 71; id., Vol. II at 300, ¶ 71.

      This statement reflects M r. Birck’s opinion. “Statements w hich on their

face are expressions of personal opinion . . . can only support an inference of

discrimination if the trier of fact finds the inference reasonable, and so constitute

only circumstantial or indirect evidence of discrimination against the plaintiff.”

Stone v. Autoliv ASP, Inc., 210 F.3d 1132, 1136 (10th Cir. 2000) (quotation

omitted). At best, then, the Birck statement would be indirect evidence rather

than direct evidence. Consequently, the district court did not err in proceeding to

the M cDonnell Douglas framew ork applicable to cases involving indirect

evidence of discrimination. See id. at 1137.

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                                      B. Pretext

      A plaintiff may show pretext through various means:

      Under Tenth Circuit precedent, pretext may be shown by “such
      weaknesses, implausibilities, inconsistencies, incoherencies, or
      contradictions in the employer’s proffered legitimate reasons for its
      action that a reasonable factfinder could rationally find them
      unworthy of credence and hence infer that the employer did not act
      for the asserted non-discriminatory reasons.” A plaintiff can make a
      showing of pretext with evidence that the defendant’s stated reason
      for termination was false.

Bryant v. Farmers Ins. Exch., 432 F.3d 1114, 1125 (10th Cir. 2005) (quoting

M organ v. Hilti, Inc., 108 F.3d 1319, 1323 (10th Cir. 1997) (further citation

omitted)). “Evidence of pretext may include ‘prior treatment of plaintiff; the

employer’s policy and practice regarding minority employment (including

statistical data); disturbing procedural irregularities (e.g., falsifying or

manipulating . . . criteria); and the use of subjective criteria.’” Jaramillo v. Colo.

Judicial Dept., 427 F.3d 1303, 1308 (10th Cir. 2005) (quoting Garrett v.

Hewlett-Packard Co., 305 F.3d 1210, 1217 (10th Cir. 2002) (further citation

omitted)).

      On appeal, “M r. M erritt concedes that he failed to meet his sales quota and

that sales performance could have motivated his dismissal; however, an illegal

motivation, i.e., age discrimination, was the more likely reason for his

termination.” Reply Br. at 2. He points to (1) other evidence of his good

performance, despite extremely difficult market conditions; (2) Tellabs’s

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favorable treatment of younger employees, including his replacement and the

other ILEC vice presidents, and an alleged pattern of replacing older employees

with younger persons; (3) the Birck statement and age-related comments and

actions by M r. M erritt’s supervisors; and (4) procedural irregularities in his

termination. But whether taken singly or collectively, these issues do not create a

genuine issue of material fact regarding pretext.

                                   1. Performance

      M r. M erritt contends that, although he did not meet his Qwest quota, he

demonstrated good performance in other areas of his job. But it is the employer

defendant’s “perception . . . that is relevant, not the [employee] plaintiff’s

subjective evaluation of his own relative performance.” Kelley v. Goodyear Tire

& Rubber Co., 220 F.3d 1174, 1178 (10th Cir. 2000) (quotation and alteration

omitted). It was Tellabs’s prerogative to determine which areas of performance

were most important. Further, in the district court M r. M erritt conceded that his

sales performance “could have been better” and he was “‘not bringing the

numbers in.’” A plt. App., Vol. I at 71, ¶ 15; id., Vol. II at 297, ¶ 15; id., Vol. I at

72, ¶ 16; id., Vol. II at 297 ¶ 16. On appeal, he concedes that his sales

performance “could have motivated his dismissal.” Reply Br. at 2. His

subjective evaluations of his performance in other aspects of his job are

insufficient to create a genuine issue of material fact as to w hether Tellabs’s

asserted reasons for terminating his employment are pretextual.

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                       2. Treatment of Younger Employees

      M r. M erritt argues that Tellabs demonstrated a pattern of replacing older

employees with younger employees. He also highlights the favorable treatment

given younger employees, including his replacement and other ILEC sales-team

leaders.

      W hile a pattern of replacing older employees with younger persons may

constitute a “thread of evidence” to support a finding of discrimination, Greene v.

Safeway Stores, Inc., 98 F.3d 554, 561 (10th Cir. 1996), here there was

insufficient evidence to establish a pattern. As the district court noted,

M r. M erritt submitted only his own deposition testimony to support the alleged

pattern of replacements, and his testimony generally was based on “secondhand

inform ation,” “scuttlebutt,” “w ater-cooler type conversations” and his own

perceptions and opinions. Aplt. App., Vol. I at 77-78, ¶¶ 51-58; id., Vol. II at

299-300, ¶¶ 51-58. Such unsupported information is insufficient to establish

pretext. See Jaramillo, 427 F.3d at 1314 (“Hearsay testimony that would not be

admissible at trial is not sufficient to defeat a motion for sum mary judgment.”).

      M r. M erritt also contends that his younger replacement and the younger

ILEC sales vice presidents w ere treated more favorably than he was, because their

employment was not terminated even though they also failed to meet their quotas.

But M r. M erritt’s sales performance w as worse than the performance of these

                                         -8-
employees, which provides a basis other than age for distinguishing Tellabs’s

treatment of them.

      M oreover, in addition to the failure to meet the Qwest quota, Tellabs

identified other performance deficiencies underlying the termination of M r.

M erritt’s employment, including his failure to sell new products to Qwest. Aplt.

App., Vol. I at 253, 265. The record does not establish that the other employees

were cited for similar conduct, which again provides a basis for distinguishing

Tellabs’s decision to terminate M r. M erritt’s employment while retaining the

other employees. Thus, Tellabs’s alleged failure to dismiss younger employees

does not create a genuine issue of fact concerning pretext.

                     3. Age-Related Comm ents and Actions

      M r. M erritt also points to several age-related remarks and actions by

Tellabs personnel. In addition to the Birck statement, he avers that M r. Bernstein

and M r. Pullen promoted a youth movement by giving accolades to M r. M erritt’s

younger colleagues, but not to him, and by conducting sales meetings geared to

younger salespeople. He also notes that Edward Kennedy told him that

M r. Pullen and M r. Bernstein perceived him to be part of the “‘old guard’” and

that he “‘should possess more of the traits of this young Ben Shat.’” Aplt. Br. at

33 (quoting Aplt. A pp. II at 422-23).

      Given that M r. Birck’s statement reflects a personal opinion and that

M r. Birck did not participate in terminating M r. M erritt’s employment, the district

                                         -9-
court did not err in characterizing the Birck comment as a “stray remark” that

does not satisfy M r. M erritt’s burden of production. “Isolated comments,

unrelated to the challenged action, are insufficient to show discriminatory animus

in termination decisions.” Cone v. Longmont United Hosp. Ass’n, 14 F.3d 526,

531 (10th Cir. 1994); see also Heno v. Sprint/United M gmt. Corp., 208 F.3d 847,

856 (10th Cir. 2000) (“[S]tray . . . comments should typically not be admitted

unless the plaintiff can link them to personnel decisions or the individuals making

those decisions.”). W ithout more, M r. M erritt’s subjective belief that he was

within the class of “senior management” identified by M r. Birck does not

establish the necessary link between comment and termination.

      Likew ise, M r. M erritt’s allegations about M r. Pullen’s and M r. Bernstein’s

promoting a youth movement are too attenuated to show pretext in connection

with the termination. M r. M erritt’s belief that the training sessions were

inappropriate because the supervisors made statements like “what motivates you

as a young man” and used other “touchy feely” phrases is his subjective opinion.

Aplt. App., Vol. II at 306, ¶ 38; id., Vol. I at 76, ¶ 42. And given that M r.

M erritt’s performance ranked lower than the other sales vice presidents, the fact

that M r. Bernstein praised the other employees but not M r. M erritt during

M onday morning revenue calls is not probative of age discrimination. The other

incidents to which M r. M erritt refers, such as M r. Bernstein’s occasional use of

the terms “young guys” or “younger guys,” id., Vol. I at 76, ¶¶ 45-47; id., Vol. II

                                          -10-
at 306, ¶¶ 39-40, appear to be stray remarks that would be insufficient to allow a

jury to find for M r. M erritt.

       As for M r. Kennedy’s statements, they are hearsay, and thus they cannot

defeat summary judgment. Jaramillo, 427 F.3d at 1314.

                             4. Procedural Irregularities

       Finally, M r. M erritt argues that his termination involved disturbing

procedural irregularities because Tellabs failed to follow its written Employee

Guidelines, which provide for progressive discipline “[i]n most cases” of poor

performance. Aplt. App., Vol. I at 183-84. This court has recognized that

“‘disturbing procedural irregularities’” can constitute evidence of pretext,

Jaramillo, 427 F.3d at 1308 (quoting Garrett, 305 F.3d at 1217), and that

“deviations from normal company procedure” can be a disturbing procedural

irregularity, Garrett, 305 F.3d at 1220.

       Tellabs’s failure to follow the Employee Guidelines, however, is not such

an irregularity that it constitutes evidence of pretext, because Tellabs was not

obligated to follow the Employee Guidelines in every case. See Jaramillo,

427 F.3d at 1312-13. Further, consistent with the progressive disciplinary policy,

M r. M erritt was w ell aw are of his supervisors’ dissatisfaction with his

performance at least several months prior to the termination of his employment.

M r. M erritt originally was selected for layoff in August 2002 before being

removed from the layoff list. Aplt. App., Vol. I at 72, ¶ 19; id., Vol. II at 297,

                                           -11-
¶ 19. M r. M erritt admits that every time M r. Bernstein met with him,

M r. Bernstein told him that “he must meet his sales quota numbers,” and

M r. Bernstein told him three or four times between November and December

2002 that “his performance had to improve.” Id., Vol. I at 72-73, ¶¶ 21, 23; id.,

Vol. II at 297-98, ¶¶ 21, 23. In December, M r. Bernstein sent M r. M erritt at least

two e-mail messages relaying his concern about M r. M erritt’s performance and

the importance of meeting his year-end quota. Id., Vol. I at 73, ¶¶ 24-25; id.,

Vol. II at 298, ¶¶ 24-25. In January 2003, M r. M erritt and M r. Bernstein met to

discuss M r. M erritt’s performance. Id., Vol. I at 73, ¶ 26; id., Vol. II at 298, ¶ 26.

Thus, M r. M erritt was given notice of Tellabs’s expectations and opportunities to

improve, even though Tellabs chose not to employ formal progressive discipline.

                                          III.

      The judgment of the district court is AFFIRM ED.

                                                       Entered for the Court

                                                       Jerome A. Holmes
                                                       Circuit Judge

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