EEOC v. Otero

F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS DEC 21 1999
TENTH CIRCUIT PATRICK FISHER
Clerk

EQUAL EMPLOYMENT
OPPORTUNITY COMMISSION,

Plaintiff/Appellee,
No. 98-2122
JOHN OTERO, (D.C. No. CV-95-1199-JP)
(D. New Mexico)
Plaintiff/Intervenor/Appellee,

vs.

WAL-MART STORES, INC.,

Defendant/Appellant.

ORDER AND JUDGMENT*

Before BRORBY, Circuit Judge, McWILLIAMS, Senior Circuit Judge, and WEST,
District Judge.1

__________________________________

Plaintiff/appellee Equal Employment Opportunity Commission (“EEOC”) filed this

action against defendant/appellant Wal-Mart Stores, Inc. (“WalMart”), and alleged WalMart

*
This order and judgment is not binding precedent, except under the doctrines of law of
the case, res judicata, and collateral estoppel. Citation of orders and judgments is generally
disfavored; nevertheless, an order and judgment may be cited under the terms and conditions of
10th Cir. R. 36.3.
1
The Honorable Lee R. West, Senior United States District Judge for the Western District
of Oklahoma, sitting by designation.
discriminated against John Otero in violation of the Americans with Disabilities Act of 1990

(“ADA”), 42 U.S.C. § 12101 et seq. Otero intervened in the lawsuit and he likewise alleged

violations of the ADA against WalMart.

Otero was injured in an automobile accident in June 1988. As a result of the accident,

Otero’s right arm below the elbow joint was amputated. Although Otero has been fitted with

a cosmetic prosthetic device, the device has “no mechanical functions to it.” Volume I, Trial

Transcript [hereinafter “TT”, preceded by volume number] at 23.

In August 1992 and again, in October 1992, Otero applied for the position of night

receiving clerk at the WalMart Store in Las Cruces, New Mexico. On October 28, 1992,

Otero was interviewed by Gloria Reyes, WalMart’s personnel manager. Using a prepared

“interview comment” sheet, Reyes asked Otero:

“What current or past medical problems might limit your ability to do a job?”

In response to the question, Otero told Reyes about his arm and, according to Reyes,

asked her if she knew about the ADA. Until that time, Reyes had been unaware of his

prosthesis. Reyes and her immediate supervisor, assistant manager Diane Bingham,

ultimately recommended that Otero not be hired. The stated reason for non-employment was

Otero’s rudeness, which allegedly occurred after his statements about his physical

impairment and the ADA.

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 The EEOC and Otero both claimed that WalMart discriminated against Otero when

it asked the question and again, when it failed to hire Otero, based on information obtained

in response to the question.

The EEOC moved for summary judgment on the “improper inquiry” claim, arguing

that WalMart’s interviewing practices constituted a per se violation of the ADA. WalMart

likewise moved for summary judgment on this claim. It argued that the district court lacked

jurisdiction over the claim because Otero had failed to exhaust his administrative remedies

in connection with such claim. The district court denied WalMart’s motion and granted

summary judgment to the EEOC on the issue of liability.

The matter then came on for trial. The district court awarded nominal damages to

Otero on the “improper inquiry” claim and submitted the issue of punitive damages to the

jury. The jury found WalMart acted with “reckless indifference to [Otero’s] federally

protected rights” during the interview and awarded Otero punitive damages in the amount

of $100,000.00. The jury likewise found in favor of the EEOC and Otero on the “failure to

hire” claim and awarded Otero compensatory damages in the amount of $7500.00 and

punitive damages in the amount of $50,000.00 on that claim. Judgment was entered

accordingly.

In a Memorandum Opinion and Order, the district court denied WalMart’s post-

judgment motions and granted the EEOC’s request for injunctive relief. The district court

permanently enjoined WalMart at its store in Las Cruces “from failing or refusing to hire a

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qualified individual with a disability because of his or her disability[]” and “from making

inquiries of job applicants, before a job offer is made, which are likely to elicit information

about a disability, unless[] (a) the question relates to the applicant’s ability to perform job-

related functions, and (b) the question is not phrased in terms of disability.” The district

court further ordered WalMart to inter alia “conduct ADA compliance training for all

supervisory and managerial employees,” and upon completion of the training, to provide the

EEOC “a summary of the training given and a list of all attendees . . . .”

On appeal, WalMart has argued first that the EEOC and Otero failed to present a

prima facie case of discrimination in connection with the “failure to hire” claim. WalMart’s

argument is based on its contention that absent evidence that Otero was replaced by a non-

disabled person, this claim should not have been submitted to the jury.

In ADA cases where there is an absence of direct evidence of discrimination, courts

generally employ the burden-shifting framework established in McDonnell Douglas Corp.

v. Green, 411 U.S. 792 (1973), to evaluate a plaintiff’s claim. Butler v. City of Prairie

Village, 172 F.3d 736, 747 (10th Cir. 1999)(citation omitted). Under McDonnell Douglas,

a plaintiff claiming disability discrimination must first establish a prima facie case by

demonstrating by a preponderance of the evidence,

“‘(1) that he is “disabled” within the meaning of the ADA, (2) that he is
qualified–with or without reasonable accommodation[,] and (3) that he was
discriminated against because of his disability.’”

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Id. at 748 (quoting Siemon v. AT&T Corp., 117 F.3d 1173, 1175 (10th Cir. 1997)(footnotes

and other citations omitted)). There is no requirement imposed upon a plaintiff alleging a

violation of the ADA in this circuit to show replacement by a person outside of the protected

class, id. at 748-49, and WalMart has cited no persuasive authority which holds otherwise.

Accordingly, the district court committed no error by denying WalMart’s request for

judgment as a matter of law to the extent it was based on this argument.

WalMart has also argued that the EEOC and Otero failed to establish that Otero was

disabled within the meaning of the ADA. The jury in this case was instructed that

“[t]he term ‘disability’ means, one, a physical impairment that substantially
limits one or more of the major life activities of the individual. Or, two, being
regarded as having such an impairment.”

III TT at 13. The jury was further instructed that the phrase “substantially limits” for

purposes of the ADA

“means, one, unable to perform a major life activity that the average person in
the general population can perform. Or, two, significantly restricted as to the
condition, manner or duration under which an individual can perform any
major life activity as compared to the condition, manner or duration under
which the average person in the general population can perform that same
major life activity.”

III TT at 14.

The jury was also advised to consider the following factors in determining whether

Otero was substantially limited in any major life activity.

“One, the nature and severity of the impairment. Two, the duration or
expected duration of the impairment. And, three, the permanent or long-term

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 impact or the expected permanent or long-term impact resulting from the
impairment.”

III TT at 14.

Finally, the jury was instructed that the phrase “major life activity”

“means functions such as caring for oneself, performing manual tasks, lifting,
walking, seeing, hearing, speaking, breathing, learning and working.”

III TT at 14.

Otero testified about the effect of his physical impairment on his life and on his ability

to perform certain tasks. Based upon this evidence, the jury found Otero was disabled.

WalMart thereafter unsuccessfully challenged this finding in its post-judgment motions.

We review the district court’s denial of WalMart’s Motion for Judgment as a Matter

of Law de novo. Judgment as a matter of law is appropriate only if the nonmoving party

“‘has been fully heard on an issue and there is no legally sufficient evidentiary basis for a

reasonable jury to find for that party on that issue.’” Davis v. United States Postal Service,

142 F.3d 1334, 1339 (10th Cir. 1998)(quoting Rule 50(a), F.R.Civ.P.). Examining the

evidence in the light most favorable to the EEOC and Otero, and extending to them the

benefit of all reasonable inferences, we find the evidence on this issue does not conclusively

favor WalMart and that a reasonable jury could have determined that Otero was disabled

within the meaning of the ADA.

WalMart has further argued that the EEOC and Otero failed to present evidence of an

intent to discriminate against Otero on the basis of his disability. The district court, in

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denying WalMart’s Motion for Judgment as a Matter of Law, outlined what it considered to

be “sufficient direct and indirect evidence” presented by the EEOC and Otero “from which

it could be inferred” that WalMart acted with the necessary discriminatory intent.

The relevant evidence on the issue of discriminatory intent was conflicting and again,

we find that a reasonable jury could have determined that WalMart intentionally

discriminated against Otero because of his disability. Thus, the district court did not err in

denying WalMart’s request for judgment as a matter of law to the extend the request was

based on this argument.

WalMart has also argued that the district court lacked jurisdiction to consider the

“improper inquiry” claim. This argument is based on the fact that the charge of

discrimination filed by Otero with the EEOC did not refer to the “interview comment” sheet

or any questions thereon.

WalMart did not raise this issue in its answers to the EEOC’s first amended complaint

and Otero’s complaint-in-intervention. Rather, WalMart admitted that “[a]ll conditions

precedent to the institution of this lawsuit ha[d] been fulfilled,” and that “[a]ll preconditions

to jurisdiction . . . ha[d] been satisfied.” WalMart also failed to raise the issue in the parties’

Final Pretrial Order. As stated, the issue was however the subject of WalMart’s unsuccessful

Motion for Summary Judgment.

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 Exhaustion of administrative remedies is a prerequisite to bringing suit under the

ADA.2 To exhaust such remedies, a plaintiff must present his claims to the EEOC in a

timely-filed written charge of discrimination. The charge must both “identify the parties,”

29 C.F.R. § 1601.12(b), and “describe generally the action or practices complained of.” Id.

The charge “provide[s] notice of the alleged violation to the charged party, and . . . provide[s]

the . . . [EEOC] with the opportunity to conciliate the claim.” Seymore v. Shawver & Sons,

Inc., 111 F.3d 794, 799 (10th Cir. 1997)(citation omitted).

There is however a limited exception to the exhaustion rule. If an unexhausted claim

is “reasonably related” to an exhausted claim, district courts may consider it. Judicial

consideration of claims “not expressly included in an EEOC charge is appropriate where the

conduct alleged would fall within the scope of an EEOC investigation which would

reasonably grow out of the charges actually made.” Martin v. Nannie and the Newborns,

Inc., 3 F.3d 1410, 1416 n.7 (10th Cir. 1993)(citations omitted). A review of the instant

record clearly indicates that the “improper inquiry” claim could reasonably fall within this

limited exception. An investigation of Otero’s “failure to hire” claim would necessarily

include an investigation of Otero’s alleged rudeness, the stated reason for his non-selection,

which occurred, if at all, as a result of, and after being asked, the “improper inquiry.”

2
In light of our holding on this issue, we need not revisit the issue of whether exhaustion
is jurisdictional or whether it may be waived. See Roe v. Cheyenne Mountain Conference
Resort, Inc., 124 F.3d 1221, 1228 (10th Cir. 1997).

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 WalMart has further argued that the district court erred when it granted summary

judgment in favor of the EEOC and Otero on the “improper inquiry” claim. We review the

grant of summary judgment de novo, applying the same legal standard as the district court.

E.g., Butler, 172 F.3d at 745. Summary judgment is appropriate only if there are no genuine

issues of material fact and the movant is entitled to judgment as a matter of law. Rule 56(c),

F.R.Civ.P.

The law is clear that an employer is prohibited from making “inquiries of a job

applicant as to whether such applicant is an individual with a disability or as to the nature or

severity of such disability.” 42 U.S.C. § 12112(d)(2)(A). The law is equally clear that an

employer “may make preemployment inquiries into the ability of an applicant to perform job-

related functions.” Id. § 12112(d)(2)(B).

The parties stipulated that Reyes never explained to Otero the duties and

responsibilities of a night receiving clerk or asked Otero to describe or demonstrate how he

might perform such duties. The question therefore did not concern Otero’s ability to perform

specific job-related functions and was prohibited by section 12112(d)(2)(A). Accordingly,

the district court did not err in granting summary judgment on this claim in favor of the

EEOC.

WalMart has also taken issue with the district court’s refusal to permit WalMart to

present evidence of current or previous employees with disabilities. The EEOC and Otero

objected to the proposed evidence and the district court sustained their objections.

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 We review the district court’s decision to exclude WalMart’s proposed evidence for

abuse of discretion. Curtis v. Oklahoma City Public Schools Board of Education, 147 F.3d

1200, 1217 (10th Cir. 1998). That decision will not be disturbed unless we have “‘a definite

and firm conviction that the . . . [district] court made a clear error of judgment or exceeded

the bounds of permissible choice in the circumstances.’” Id. (quoting McEwen v. City of

Norman, 926 F.2d 1539, 1553 (10th Cir. 1991)).

To the extent that WalMart has preserved this argument for appeal, e.g., Polys v.

Trans-Colorado Airlines, Inc., 941 F.2d 1404 (10th Cir. 1991)(to preserve argument that trial

court erred in excluding evidence, party is required to make offer of proof), we find WalMart

has failed to show that the district court abused its discretion by excluding the proposed

evidence.

WalMart has also complained about the awards of punitive damages. WalMart has

argued first that the actions of its employees, described by WalMart as “low level

employees,” cannot support an award of punitive damages against WalMart. We disagree.

Reyes was not only the personnel manager at the time she interviewed Otero in

October 1992 but also the training coordinator at the Las Cruces store. As indicated,

Bingham was the assistant store manager and Reyes’ supervisor. Both were authorized to

make discretionary recommendations about employment and indeed, in October 1992, were

responsible for making the personnel decisions at the Las Cruces store. E.g., Kolstad v.

American Dental Association 67 U.S.L.W. 4552 (June 29, 1999);
, EEOC v. Wal-Mart Stores,

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Inc., 187 F.3d 1241 (10th Cir. 1999). The evidence is clear that Reyes and Bingham were

serving in a sufficiently “‘“managerial capacity,”’” e.g., id. at 1247 (quoting Kolstad, 67

U.S.L.W. at 4556 (quoting Restatement (Second) of Agency § 217 C (1957)), and within the

scope of their employment, id. at 1247-48; e.g., Kolstad, 67 U.S.L.W. at 4556, to hold

WalMart liable in this instance for their actions.

WalMart has further challenged the punitive damages awarded by the jury in

connection with the “improper inquiry” claim. It has argued that such damages are not

supported by the evidence and that the amount awarded is excessive and violates the due

process clause of the fourteenth amendment to the United States Constitution.

Punitive damages are justified in an ADA case where there is evidence that the

employer “engaged in a discriminatory practice . . . with . . . reckless indifference to the

federally protected rights of an aggrieved individual.” 42 U.S.C. § 1981a(b)(1). “‘Whether

sufficient evidence exists to support punitive damage is a question of law reviewed de

novo.’” Wal-Mart Stores, 187 F.3d at 1244 (quotingFitzgerald v. Mountain States Telephone

and Telegraph Co., 68 F.3d 1257, 1262 (10th Cir. 1995)). In reviewing the evidence in this

case, we conclude that a reasonable jury clearly could have found that WalMart discriminated

against Otero “in the face of a perceived risk that its actions [would] . . . violate federal law

. . . .” Kolstad, 67 U.S.L.W. at 4555; e.g., WalMart Stores, Inc., 187 F.3d at 1245.

We further find that the amount of punitive damages awarded by the jury on the

“improper inquiry” claim was supported by the facts and authorized by law. It is neither “‘so

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excessive as to shock the judicial conscience and to raise an irresistible inference that

passion, prejudice, corruption or other improper cause invaded the trial,’” Wal-Mart Stores,

187 F.3d at 1249 (quoting Malandris v. Merrill Lynch, 703 F.2d 1152, 1168 (10th Cir.

1981)), nor so excessive to be violative of the fourteenth amendment’s due process clause.

In its final argument on appeal, WalMart has challenged the injunctive relief ordered

by the district court. Injunctive relief, after a finding of unlawful discrimination, is

appropriate if “the moving party . . . demonstrate[s] that there exists some cognizable danger

of recurrent violations . . . .” EEOC v. General Lines, Inc., 865 F.2d 1555, 1565 (10th Cir.

1989). Unless the district court has abused its discretion by relying on clearly erroneous

factual findings or by committing an error of law, we may not set aside an injunction. Upon

review of the record, we find the district court did not abuse its discretion in concluding that

there was a cognizable danger of a recurrent violation and thus, that injunctive relief was

warranted. We further find that the scope of the injunctive relief ordered is neither overly

broad nor impermissibly intrusive.

AFFIRMED.

Entered for the Court

Lee R. West
Senior District Judge

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