UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
___________________________
No. 97-20584
___________________________
W.G. BENNETT,
Plaintiff-Appellee-Cross-Appellant,
VERSUS
TOTAL MINATOME CORPORATION,
Defendant-Appellant-Cross-Appellee.
___________________________________________________
Appeals from the United States District Court
For the Southern District of Texas
___________________________________________________
April 29, 1998
Before DAVIS, WIENER, and PARKER, Circuit Judges.
W. EUGENE DAVIS, Circuit Judge:
W.G. Bennett brought this employment discrimination suit
against his employer, Total Minatome Corporation (“TMC”). Bennett
alleged that TMC unlawfully discriminated against him in violation
of Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et
seq., the Age Discrimination in Employment Act (“ADEA”), 29 U.S.C.
§§ 621 et seq., and 42 U.S.C. § 1981. The district court entered
judgment in favor of Bennett on each of his claims. For the
reasons that follow, we reverse.
I.
TMC, an oil and gas company incorporated in Delaware, is the
wholly owned subsidiary of TOTAL, S.A. (“TOTAL”), a French
corporation headquartered in Paris, France. Bennett, an American
citizen born in Mississippi, was hired as a manager by TMC on April
1, 1987, less than one month before his 51st birthday. Over the
next four years, Bennett was promoted twice, at age 52 and at age
54.
For some time, TOTAL has maintained a practice of assigning
TOTAL employees to TMC on a temporary basis. These French
“expatriates” generally occupy key executive or technical positions
at TMC, including president. Between 1987 and 1991, in response to
a decline in the oil business, TMC undertook several corporate
“restructurings.” In May 1989, during one such restructuring, TMC
terminated three American managers over the age of 50. In March
1991, during another restructuring, TMC laid off approximately 15%
of its workforce, including four American managers over the age of
40 and a fifth who was six months shy of his 40th birthday.
In July 1991, TOTAL replaced TMC’s then-president, Jean Pierre
Donnet, with another French expatriate, Jean Michel Fonck, who was
sent with the mandate to “to reorganize completely the company.”
In September 1991, as part of his reorganization efforts, Fonck
decided to replace Bennett, who then held the position of
Production Manager, with a younger French expatriate, Jean Granger.
Bennett was transferred to the position of Manager of Acquisitions
and Divestments. Although he had been responsible for supervising
150 employees in his former position, he did not supervise any
employees in his new position. In his new position he had no
purchasing authority, whereas in his former position he had
2
signature authority up to $150,000. His new position also required
that he occasionally perform manual tasks such as moving boxes of
documents and operating a copy machine.
In September 1993, TOTAL recalled Granger to France.
Bennett’s request for reinstatement was denied, and the title of
Bennett’s former position was changed to Drilling and Production
Manager. At TOTAL’s direction, Granger was replaced by another
younger French expatriate, Jean Louis Geyelin. In the summer of
1996, Geyelin rotated back to France. Pursuant to a budgetary
directive from TOTAL, TMC did not replace Geyelin and eliminated
the position.
Bennett filed suit on September 1993, complaining that his
transfer was a demotion and that TMC continued to discriminate
against him1 on account of his age, in violation of the ADEA;
national origin, in violation of Title VII; and race, in violation
of § 1981.2 Bennett’s Title VII claim, to the extent it was based
1
Bennett claimed that TMC continued to discriminate
against him by, among other things, requiring him to perform manual
tasks, placing him in a smaller office, reducing the number of
employees he supervised, deleting him from distribution lists for
internal memoranda, and denying him a raise in 1992 and a bonus in
1993. He also claimed that TMC discriminated against him in
refusing to reinstate him to his former position after Granger
rotated back to France.
2
Bennett claimed that TMC discriminated against him
because he was “not of French ancestry.” Racial discrimination
under § 1981 encompasses discrimination against “identifiable
classes of persons who are subjected to intentional discrimination
solely because of their ancestry or ethnic characteristics.” St.
Francis College v. Al-Khazraji, 481 U.S. 604, 613 (1987). Although
TMC argues that Bennett failed to allege membership in an
identifiable ethnic group, that is an issue we need not decide.
3
on acts occurring prior to November 21, 1991,3 was tried to the
court. His remaining claims were tried to a jury. The court and
the jury found for Bennett on each of his claims. On November 8,
1996, the court entered judgment awarding Bennett $152,100 in
backpay; $300,000 in compensatory damages; $970,000 in punitive
damages; and $391,722.73 in attorneys’ fees. The court denied
TMC’s post-trial motion for judgment as a matter of law on
Bennett’s claims and Bennett’s motion to amend the judgment to
include an award of front pay. Both TMC and Bennett appeal.
II.
TMC contends that Bennett’s claims are barred by Article VI of
the Convention of Establishment between the United States and
France, (the “Convention”), one of a series of commercial treaties
negotiated by the United States with a number of other countries in
the years following World War II. See 106 Cong. Rec. 16561-63
(1960).4 Id. Article VI of the Convention provides in pertinent
part:
Nationals and companies of either High Contracting Party
shall be permitted to engage, at their choice, within the
territories of the other High Contracting Party,
accountants and other technical experts, lawyers, and
3
The effective date of the Civil Rights Act of 1991.
Prior to the passage of the Act, Title VII plaintiffs could seek
only equitable relief. See, e.g., Hampton v. IRS, 913 F.2d 180,
182 (5th Cir. 1990).
4
The central purpose of the treaties was to encourage
investment abroad by granting companies of each signatory legal
status in the territory of the other country and by allowing them
to conduct business in the other country on a comparable basis with
domestic firms. See Sumitomo Shoji America, Inc. v. Avagliano, 457
U.S. 176, 185-88 (1982); MacNamara v. Korean Air Lines, 863 F.2d
1135, 1142-43 (3d Cir. 1988); 106 Cong. Rec. 16563 (1960).
4
personnel who by reason of their special capacities are
essential to the functioning of the enterprise.
11 U.S.T. 2398, 2405. TMC argues that Article VI thus permits
French companies conducting business in the United States to
discriminate in favor of French citizens in filling the positions
specified therein without running afoul of domestic laws such as
Title VII or the ADEA.
The parties’ dispute centers on whether TMC, the wholly owned
U.S. subsidiary of a French company, may assert rights under the
Convention. In Sumitomo Shoji America, Inc. v. Avagliano, 457 U.S.
176, 189 (1982), the Supreme Court held that a wholly owned U.S.
subsidiary of a Japanese company was not covered by Article VIII(1)
of the Friendship, Commerce and Navigation Treaty between the
United States and Japan (the “Japan FCN treaty”), a provision
similar to Article VI.5 The Court, however, expressly reserved the
question of whether the U.S. subsidiary could assert any of its
parent’s rights under the treaty. Id. at 189-90 n.19.
In Fortino v. Quasar Co., 950 F.2d 389, 393 (7th Cir. 1991)
(Posner, J.), the Seventh Circuit concluded that a wholly owned
U.S. subsidiary of a Japanese company could assert its parent’s
rights under Article VIII(1) of the Japan FCN treaty to the extent
that the parent dictated the subsidiary’s alleged discriminatory
conduct. In Fortino, the parent company maintained a practice of
5
Article VIII(1) of the Japan FCN treaty provides in
pertinent part: “[C]ompanies of either Party shall be permitted to
engage, within the territories of the other Party, accountants and
other technical experts, executive personnel, attorneys, agents and
other specialists of their choice.” See Sumitomo, 457 U.S. at 181.
5
assigning several of its financial and marketing executives to the
subsidiary on a temporary basis. These “expatriates” were
employees of the subsidiary and were under its day-to-day control,
yet they also retained their status as employees of the parent
company. The parent evaluated their performance, kept their
personnel records, fixed their salaries, and assisted with the
relocation of their families to the United States. The expatriates
entered the United States under “E-1" or “E-2" temporary visas,
which permitted the holder to work in the United States provided,
among other things, that the work was executive or supervisory in
character, that the worker was a Japanese citizen, and that the
worker was doing work authorized by the Japan FCN Treaty.
The plaintiffs in Fortino were American executives discharged
by a Japanese expatriate put in charge of the subsidiary by the
parent to prevent the recurrence of a massive loss and who
proceeded to do so by reorganizing the company and reducing the
workforce, including management, by half. No Japanese expatriate
executive were terminated, although two were rotated back to Japan
and replaced by a single new expatriate. The court held that the
subsidiary was entitled to judgment in its favor, reasoning that
“[a] judgment that forbids [the subsidiary] from giving
preferential treatment to the expatriate executives that its parent
sends would have the same effect on the parent as it would have if
it ran directly against the parent: it would prevent [the parent]
from sending its own executives to manage [the subsidiary] in
preference to employing American citizens in such posts.” Id. at
6
393.
In Papaila v. Uniden America Corp., 51 F.3d 54, 56 (5th Cir.
1995), following the lead of the Seventh Circuit in Fortino, we
held that a wholly owned U.S. subsidiary of a Japanese entity could
invoke its parent’s rights under Article VIII(1) of the Japan FCN
Treaty with respect to employment decisions dictated by the parent.
In Papaila, the parent company also assigned “expatriate” employees
to work for the subsidiary on a temporary basis. The expatriates
were sent to protect the parent’s rights in the subsidiary and were
subject to transfer at the parent’s request. The parent set the
expatriate’s salaries, wages, benefits and hours, directed that the
subsidiary maintain a separate payroll account for the expatriates,
and evaluated their job performance. The plaintiff in Papaila
alleged that Japanese expatriates received favorable treatment in
terms of salaries, benefits, and job protection. We affirmed the
district court’s grant of summary judgment in favor of the
subsidiary because the parent was responsible for the alleged
discriminatory conduct.
TMC contends that it is clear from the record that TOTAL
dictated the decision to replace Bennett with Granger, as well as
the decision not to reinstate him after Granger rotated back to
France. Bennett, on the other hand, contends that there is no
evidence that these decisions were dictated by TOTAL. We conclude
that the record indeed discloses that the decisions were dictated
by TOTAL and that, under Papaila, TMC may assert TOTAL’s rights
under the Article VI of the Convention.
7
Like the foreign parents in Papaila and Fortino, TOTAL
assigned its own executives to TMC on a temporary basis.
Expatriate executives maintained their status as TOTAL employees
and could not be fired by TMC. Similar to what occurred in
Fortino, Fonck was put in charge of TMC by TOTAL with the mandate
to completely reorganize TMC. As part of his reorganization
efforts, he replaced Bennett with Granger. Later, Granger was
called back to France and TOTAL directed that he be replaced by
Geyelin.
As mentioned above, TMC contends that Article VI of the
Convention permits French companies operating in the United States
to discriminate in favor of French citizens in filling the
positions specified therein without running afoul of domestic laws
such as Title VII or the ADEA. The Convention is patterned after
the post-World War II commercial treaties that preceded it,
including the Japan FCN Treaty and the Treaty of Friendship,
Commerce, and Navigation between the United States and Korea
(“Korea FCN treaty”).6 See 106 Cong. Rec. 16561-63 (1960). Those
treaties each contain a provision similar to Article VI.7 Courts
6
The Convention was signed on November 25, 1959. The
Japan FCN treaty and the Korea FCN treaty were signed on April 2,
1953 and November 28, 1956, respectively.
7
As noted above, Article VIII(1) of the Japan FCN treaty
provides in pertinent part: “[C]ompanies of either Party shall be
permitted to engage, within the territories of the other Party,
accountants and other technical experts, executive personnel,
attorneys, agents and other specialists of their choice.”
Article VIII(1) of the Korea FCN treaty provides in
pertinent part: “Nationals and companies of either Party shall be
permitted to engage, within the territories of the other Party,
8
have interpreted these provisions as granting foreign businesses
operating in the United States the right to discriminate in favor
of citizens of their home countries because of their citizenship.
See Papaila, 51 F.3d at 55 (interpreting similar provision in Japan
FCN treaty); MacNamara v. Korean Air Lines, 863 F.2d 1135, 1144-46
(3d Cir. 1988) (interpreting similar provision in Korea FCN treaty
and expressly rejecting argument that the treaty grants Korean
companies immunity from liability under Title VII and the ADEA
insofar as they discriminate in favor of Korean citizens in filling
certain positions specified therein). Thus, we conclude that, at
the very least, Article VI grants French companies operating in the
United States the right to discriminate in favor of French citizens
because of their citizenship in filling the positions specified
therein. We need not decide whether Article VI immunizes French
companies to the extent urged by TMC because the record contains no
evidence that Bennett was discriminated against on any basis other
than his citizenship.
III.
As discussed above, Article VI of the Convention grants TOTAL
the right to discriminate in favor of French citizens in selecting,
among other things, technical experts essential to its
functioning.8 Because we have concluded that TOTAL was responsible
accountants and other technical experts, executive personnel,
attorneys, agents and other specialists of their choice.” See
MacNamara, 863 F.2d 1135, 1138 (3d Cir. 1988).
8
It is undisputed that Granger and Geyelin were “technical
experts” within the meaning of the Convention.
9
for the decision to replace Bennett, TMC may assert TOTAL’s rights
under Article VI. As the court noted in Fortino, “[t]he exercise
of a treaty right may not be made the basis for inferring a
violation of Title VII.” 950 F.2d at 393. Here, there is no
evidence that TOTAL did anything other than exercise its treaty
right to select French citizens as technical experts.
In support of his Title VII and § 1981 claims, Bennett points
to evidence that he claims shows that “the French,” -- i.e., French
citizens -- received preferential treatment at TMC.9 He does not
point to any evidence, however, that shows that “the French” were
treated preferentially because of their national origin or race, as
opposed to their citizenship. For example, he does not point to
any evidence that American citizens of French ancestry were shown
favoritism. See, e.g., Fortino, 950 F.2d at 393 (no evidence of
national origin discrimination where there was no evidence of
favoritism shown Japanese-American employees). Although
citizenship and national origin may be highly correlated, they
should not be equated with one another, particularly in light of
the Convention. See id. at 393. By themselves, the facts on which
Bennett relies simply do not support an inference of national
origin or race discrimination. Accordingly, we conclude that TMC
9
Bennett claims that the evidence adduced at trial shows
that: 1) the French received preferential treatment; 2) the French
met among themselves regardless of seniority; 3) junior French
employees knew more at TMC than senior Americans; 4) TMC required
poor evaluations of Frenchman to be adjusted; and 5) French raises
and bonuses were adjusted upward at the expense of Americans.
10
is entitled to judgment on Bennett’s Title VII and § 1981 claims.10
IV.
That leaves us with Bennett’s age discrimination claim.
Bennett alleged that TMC discriminated against him on the basis of
age in demoting him, denying him a raise in 1992 and a bonus in
1993, and refusing to reinstate him after his former position
became available. We will first address Bennett’s contention that
TMC discriminated against him in demoting him and in refusing to
subsequently reinstate him.
A plaintiff may establish a prima facie case of age
discrimination with respect to a demotion or a failure to promote
by demonstrating that: 1) he was demoted or not promoted, as the
case may be; 2) he was qualified for the position he occupied or
sought; 3) he was within the protected class at the time of the
demotion or failure to promote; and 4) either i) the position he
occupied or sought was filled by someone outside the protected
10
We realize that Bennett’s Title VII and § 1981 claims are
not based solely on TMC’s decision to replace him with Granger and
its refusal to subsequently reinstate him after his former position
became available. Bennett claimed that TMC continued to
discriminate against him after demoting him by, among other things,
requiring him to perform manual tasks, placing him in a smaller
office, and reducing the number of employees he supervised. Title
VII, however, was “`designed to address ultimate employment
decisions, not to address every decision made by employers that
arguably might have some tangential effect upon those ultimate
decisions.’” Mattern v. Eastman Kodak Co., 104 F.3d 702, 707 (5th
Cir. 1997) (citation omitted). “`Ultimate employment decisions’
include acts ‘such as hiring, granting leave, discharging,
promoting, and compensating.’” Id. (citation omitted). Most of the
conduct of which Bennett complains does not constitute an “ultimate
employment decision.” In any event, the evidence to which Bennett
points does not raise a reasonable inference of national origin or
race discrimination with respect to such conduct.
11
class; ii) the position he occupied or sought was filled by someone
younger; or iii) he was otherwise demoted or not promoted because
of his age. See Rhodes v. Guiberson Oil Tools, 75 F.3d 989, 992
(5th Cir. 1996) (en banc). Once established, the prima facie case
raises an inference of unlawful discrimination. Id. The burden of
production then shifts to the defendant to proffer a legitimate,
nondiscriminatory reason for the challenged employment action. Id.
at 992-93. The plaintiff is then accorded the opportunity to
demonstrate that the defendant’s articulated rationale was merely
a pretext for discrimination. Id. at 993.
A jury may be able to infer discriminatory intent in an
appropriate case from substantial evidence that the employer’s
proffered reasons are false. Id. at 994. For example, the
evidence may strongly indicate that the employer has introduced
fabricated justifications for an employee’s discharge, and not
otherwise suggest a credible nondiscriminatory explanation. Id.
In contrast, if the evidence put forth by the plaintiff to rebut
the employer’s reasons is not substantial, a jury cannot reasonably
infer discriminatory intent. Id. In some cases, for instance, the
fact that one of the nondiscriminatory reasons in the record has
proved highly questionable may not be sufficient to cast doubt on
the remaining reasons. Id. An employer is entitled to judgment in
its favor if the evidence taken as a whole would not allow a jury
to infer that the actual reason for the adverse employment action
was discriminatory. Id.
Our review of the record leads us to conclude that Bennett
12
failed to produce substantial evidence of pretext and that the
evidence is otherwise insufficient to support a reasonable
inference of age discrimination. TMC proffered several legitimate,
nondiscriminatory reasons for replacing Bennett with Granger and
for subsequently refusing to reinstate him. One reason TMC claimed
it replaced Bennett with Granger and, subsequently, Geyelin was the
ability of both men to speak French and thereby communicate more
effectively with TOTAL personnel in France.11 Rather than present
evidence to rebut this rationale, however, Bennett sought to
establish Granger’s ability to speak French as a significant factor
in the decision to replace him with Granger. He thus queried of
Fonck:
Q. [Y]ou would agree that it was a motivating factor?
A. Yes, it was a significant factor.
And questioned Douglas Burgess, Vice President of Operations, thus:
Q. Now, Mr. Burgess, isn’t it true that one of the reasons
that Mr. Granger was placed in the production manager
position was because it was believed that he could
communicate more effectively with the people in Paris?
A. I’m sure that was considered. I don’t know that it was
the controlling criteria.
Q. Well, in fact, you testified, didn’t you, that it was a
consideration in putting Mr. Granger, a Frenchman, in the
spot held by Mr. Bennett?
A. And I believe that to be the case.
11
The other reasons proffered by TMC were that Bennett had
insufficient offshore experience; that he lacked team-building
skills; and that he failed to run certain studies on three onshore
projects. An additional reason proffered by TMC for refusing to
subsequently reinstate Bennett was that he lacked drilling
experience.
13
Q. Okay. In fact, when you talked to Mr. Fonck, that was
one of the things that you and he had discussed? That’s
what he had told you?
A. That’s correct.
Q. And you believe that being able to speak French gave Mr.
Granger an advantage, in terms of being able to
communicate effectively with people in Paris?
A. Yes.
Q. You felt that that was an advantage that he had over the
American?
A. Yes.
Moreover, Bennett did not produce any evidence that would have
called into question the desirability of having someone in his
position be able to communicate in French with TOTAL personnel. In
fact, Bennett presented evidence that French workers had regular
telephone communications with personnel in France.
Assuming arguendo that Bennett produced substantial evidence
that TMC’s other proffered reasons were pretextual, his doing so
would nevertheless be insufficient to cast doubt on TMC’s
articulated rationale that it replaced Bennett because he did not
speak French. This rationale relates to a credible
nondiscriminatory explanation suggested by the evidence for
Bennett’s replacement and TMC’s refusal to subsequently reinstate
him: TOTAL, through TMC, was simply exercising its right under
Article VI of the Convention to select French citizens as technical
experts.
None of the other evidence on which Bennett relies supports a
reasonable inference of age discrimination. First, Bennett relies
on a 1993 article in a magazine published by TOTAL in which Theirry
14
Desmarest, TMC’s chairman of the board of directors, announced:
“It is our intention to continue recruitment, but at a more
moderate rate, focusing exclusively on young people.” This comment
cannot serve as evidence of age discrimination because it does not
refer in any way to Bennett’s age or the employment decisions of
which he complains. See, e.g., Turner v. North American Rubber,
Inc., 979 F.2d 55, 59 (5th Cir. 1992) (comment by plaintiff’s
supervisor that he was sending him “three young tigers” to assist
with operations not sufficient evidence of age discrimination
because it did not refer in any way to plaintiff’s age and was not
in any way related to plaintiff’s discharge).
Bennett also relies on evidence that during the 1989 and 1991
restructurings TMC terminated a number of managers over the age of
40 and that during the 1991 restructuring TMC promoted several
managers under the age of 40. Bennett, however, did not present
any evidence demonstrating that the results of the restructurings
were statistically significant. Although he attempted to elicit
such an admission from Ira Chorush, TMC’s statistical expert,
Chorush testified that he would need additional information before
he could state conclusively whether the results were statistically
significant. Because Bennett failed to demonstrate statistical
significance, he failed to raise a reasonable inference of age
discrimination. See Anderson v. Douglas & Lomason Co., Inc., 26
F.3d 1277, 1291-92 (5th Cir. 1994) (no inference of disparate
treatment where disparities not statistically significant);
Ottaviani v. State Univ. of New York at New Paltz, 875 F.2d 365,
15
371 (2d Cir. 1989) (“Before a deviation from a predicted outcome
can be considered probative [of discrimination], the deviation must
be ‘statistically significant.’”).
We turn now to Bennett’s claim that TMC denied him a raise in
1992 and a bonus in 1993 because of his age. Bennett could have
established a prima facie case of disparate treatment by showing
that younger managers received raises and bonuses under
circumstances “nearly identical” to his. See Mayberry v. Vought
Aircraft Co., 55 F.3d 1086, 1090 (5th Cir. 1995). Bennett,
however, did not produce any evidence that the other managers who
received raises and bonuses were similarly situated to him. Nor
did he present any other evidence that would raise an inference of
age discrimination.
In sum, we conclude that Bennett failed to produce sufficient
evidence to raise a reasonable inference of age discrimination. We
also observe that weighing against a finding of age discrimination
is the fact that TMC hired Bennett at age 50, promoted him at age
52, and then promoted him once again at age 54.
V.
For the reasons set out above, we conclude that there is no
evidence that TOTAL did anything other than exercise its treaty
right to select French citizens as technical experts, and that the
record in this case does not support a reasonable inference of
national origin, race, or age discrimination. We therefore reverse
the judgment of the district court and render judgment in favor of
TMC.
16
REVERSED and RENDERED.
17