Smith v. The Berry Co.

Revised February 9, 1999

UNITED STATES COURT OF APPEALS
For the Fifth Circuit

___________________________

No. 97-30795
___________________________

BRENDA SMITH,

Plaintiff-Appellee-Cross Appellant,

VERSUS

THE BERRY CO., ET AL,

Defendants,

L. M. BERRY AND COMPANY,

Defendant-Appellant-Cross-Appelee.

___________________________________________________

Appeals from the United States District Court
for the Eastern District of Louisiana
___________________________________________________
February 1, 1999

Before REAVLEY, DAVIS, and DUHÉ, Circuit Judges.

W. EUGENE DAVIS, Circuit Judge:

Defendant L.M. Berry & Company (“Berry”) challenges the

district court’s judgment, entered on a jury verdict, awarding

damages because Berry discriminated against the Plaintiff, Brenda

Smith, on the basis of her sex and her age. Berry argues that

Smith produced insufficient evidence of discrimination for the case

to have gone to the jury and thus the district court should have

granted Berry’s motion for judgment as a matter of law. In

addition, Berry challenges several of the damage awards.

Alternatively, Berry seeks a new trial because of various trial
errors. Smith cross-appeals, challenging the district court’s

denial of front pay and its decision not to award the maximum

punitive damages permitted under Title VII. We affirm in part and

reverse in part.

I. Facts and Prior Proceedings

The important facts of this case, when viewed in the light

most favorable to the verdict, are as follows. Berry, a subsidiary

of BellSouth, sells advertisements for the Yellow Pages. From 1983

through February 1996, Plaintiff Brenda Smith was a salesperson for

Berry. During her first eleven years with Berry, she was very

productive and enjoyed an excellent relationship with her coworkers

and superiors. However, from 1994 through the end of her

employment in February 1996, Smith’s relationship with Berry

deteriorated, eventually leading to Smith’s resignation--or, as she

claims, her constructive discharge. Smith filed this suit against

Berry alleging that the demise of her successful career was caused

by Berry’s age and sex discrimination. In response, Berry argued

that Smith’s attitude and negative reaction to the restructuring of

Berry’s salary system were the cause of her problems, not her age

or her sex.

Brenda Smith began working for Berry in November 1983. In

August 1990, Smith was promoted to Account Manager.1 While in this

new position, Smith was one of Berry’s leading salespersons and won

numerous awards for her work. At trial, Smith testified that when

1
The title “Account Manager” was subsequently renamed
“Senior Account Manager,” and then “Sales Leader.”

2
she was promoted in 1990, Dale Granda, her manager at that time,

stated that he “really had some concerns whether or not a woman

could handle the job because it was a lot of stress and a lot of

responsibility.” Despite this remark, Smith concedes that Granda

promoted her twice and recommended her for BellSouth’s highest

achievement award.

In 1994, shortly after her fortieth birthday, Smith was

suspended for one day for mishandling an account. Both then and at

trial, Smith challenged the grounds for this suspension. Smith’s

suspension and that of another woman over forty were announced

publicly to the entire company. A similar suspension of a male

salesperson was not publicly announced. Notwithstanding this

suspension, Smith continued to be a productive member of Berry’s

workforce.

In May 1995, Berry’s Gulf Coast Division instituted a new

compensation plan. Under the new “segmentation” plan, an

employee’s bonus now depended not on the individual employee’s

sales, but on the total sales of a team of employees. Brenda Smith

and a number of other employees expressed concern that this new

compensation package would drastically reduce their earnings. At

trial, Smith contended that she was no more vocal in her complaints

than any other salesperson. Berry argued, however, that Smith

complained to a much greater and more public extent than any other

employee. Berry also claimed to be especially concerned about

Smith’s complaints because of her leadership position within the

office.

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 From 1992 onward, Smith suffered recurring medical problems

with her knee and shoulder as a result of a skiing accident. At

the time of the accident in 1992, Smith’s doctors had recommended

surgery. However, she did not have the surgery because Berry

indicated that they “could not spare her.” Finally, in September

1995, following the recommendations of three doctors, Smith

scheduled the surgery.

On September 27, 1995, Smith informed her immediate superior,

Team Leader Lester Ann Smith, that she had scheduled surgery for

October 3, 1995. That same afternoon, Brenda Smith met with Lester

Ann Smith, Dale Granda (Division Manager of Sales), and Tom Bruno

(Operations Manager). At this meeting, Brenda Smith was accused of

several specific incidents where she had complained about the new

compensation plan. In response, she told Lester Ann Smith, Granda,

and Bruno that some of the accusations were unfair

mischaracterizations of events and others were just plain wrong.

She requested that they investigate the validity of the

accusations. Smith was not informed that she was being demoted.

Smith was out on medical leave from October 3, 1995 through

January 15, 1996. During her absence, her Sales Leader position

was advertised within the company. Also during her absence, Smith

traveled extensively in a manner that Berry claimed violated

company policy. Smith, however, testified that Berry’s personnel

department was aware of, and in some cases explicitly approved of,

her travels. She also pointed out that she had notified the

company of her Australian vacation six months prior to taking it.

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 On January 16, 1996, Smith returned to Berry and met with

management again. At this meeting, Smith was informed that she was

being demoted. The demotion entailed a substantial cut in pay and

a serious decrease in responsibilities and status. She was moved

off important accounts and given new, small accounts. She was told

that if she complained about her demotion she would be sent on the

road to the least important parishes in Berry’s Gulf Coast region.

In addition, in her absence, her belongings had been moved into a

box and had been placed at a cubicle with no chair, no phone, and

no supplies. Smith saw the failure of Berry to properly prepare

her workstation--along with her demotion and the other events that

had taken place since her return from medical leave--as a sign that

she was being constructively discharged.

After these events occurred, Smith asked to look at her

employment file. She then read five memoranda from her file that

recorded complaints against her. Upon determining that Berry had

conducted no investigation of these accusations, as she had

requested in the September 27, 1995 meeting, she tendered her

resignation from the company. She soon received a job offer from

Sprint. She accepted this offer on January 24, 1996.

An important Berry memorandum relevant to Smith’s age

discrimination claim was introduced at trial. This memorandum (the

“Luongo Memorandum”) was written in 1989 by Peter Luongo while he

was Vice President of Sales in Smith’s region.2 In this

2
At the time of the trial, Mr. Luongo was the Executive Vice
President of the entire company.

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memorandum, marked PERSONAL & CONFIDENTIAL, Luongo divided “low-end

performers” into three groups, based upon their age. The

memorandum categorized younger employees as “easiest . . . to deal

with” and noted that older employees are a “very, difficult group”

and “more difficult to terminate.” The memo stated that “[e]ach of

these groups will require very sensitive handling.” Of the eight

people named in this memorandum, four were no longer with the firm

at the time of trial and one had been demoted.

Although technically Smith’s position was filled by a lateral

transfer, the jury could have determined that Smith was effectively

replaced as a Sales Leader by Joe Pearce, a younger male. Pearce

was promoted to Sales Leader while Smith was on medical leave

recuperating from her surgery.

Smith sued Berry alleging violations of the Age Discrimination

in Employment Act (“ADEA”), 29 U.S.C. §§ 621 et seq. (1994), Title

VII of the Civil Rights Act of 1964, as amended (“Title VII”), 42

U.S.C. §§ 2000e et seq. (1994), the Family and Medical Leave Act

(“FMLA”), 29 U.S.C. 2601 §§ et seq. (1994), and Louisiana

Employment Discrimination Statutes, La. Rev. Stat. Ann. §§ 23:1006,

51:2231 (West 1992). Smith further alleged Louisiana state law

claims for intentional infliction of emotional distress. She later

amended her complaint and alleged claims of defamation and

retaliation against Berry and Sandra Peterson, Berry’s Corporate

Employee Relations Manager. Before trial, the district court

granted Berry’s motion for summary judgment on the defamation and

intentional infliction of emotional distress claims. The remaining

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claims were then tried to a jury.

At the close of evidence, Berry moved for judgment as a matter

law on all counts. The judge granted the motion as to the

retaliation claim and denied it for all other claims. The jury, by

special verdict, found that Berry discriminated against Smith by

demoting and constructively discharging her from its employment on

the basis of age in violation of the ADEA, on the basis of gender

in violation of Title VII and Louisiana antidiscrimination laws,

and in violation of the FMLA. The jury further found that Berry’s

violations of the ADEA and the FMLA were willful. The jury awarded

Smith $24,000 in back pay, $76,000 in compensatory damages, and

$500,000 in punitive damages. The district court then entered a

judgment on the verdict.

Berry filed a post-trial motion for judgment as a matter of

law or, in the alternative, for a new trial. The district court

held that there was insufficient evidence to support Smith’s claims

under the FMLA. The district court, however, did conclude that the

evidence was sufficient to support the jury’s verdict on the age

and sex discrimination claims. In addition, the district court

declined to disturb the back pay award of $24,000, granted an

additional $24,000 under the liquidated damage provisions of the

ADEA, remitted the compensatory damage award to $50,000, and

remitted the punitive damage award to $100,000. The district court

denied Smith’s request for front pay and prejudgment interest.

Thus, the overall judgment was reduced from $600,000 to $198,000.

In this appeal, Berry seeks judgment as a matter of law in its

7
favor or, alternatively, a new trial. Smith cross appeals,

requesting that we reverse the district court’s reduction of

punitive damages,3 the district court’s ruling of no liability

under the FMLA, and the district court’s denial of front pay.

Berry’s fundamental claim is that the evidence is insufficient

to support the findings of the jury and the district court. We

review the denial of a motion for judgment as a matter of law using

the same standard that the district court used in ruling on the

motion. Deffenbaugh-Williams v. Wal-Mart Stores, Inc., 156 F.3d

581, 588 (5th Cir. 1998). We look at

all of the evidence--not just that evidence which
supports the non-mover’s case--but in the light and
with all reasonable inferences most favorable to the
party opposed to the motion. If the facts and
inferences point so strongly and overwhelmingly in
favor of one party that the Court believes that
reasonable men could not arrive at a contrary verdict,
granting [judgment as a matter of law] is proper.

Boeing Co. v. Shipman, 411 F.2d 365, 374 (5th Cir. 1969) (en banc),

overruled in part on other grounds by Gautreaux v. Scurlock Marine,

Inc., 107 F.3d 331 (5th Cir. 1997) (en banc).

Moreover, when, as here, a case has been fully tried on its

merits, we do not focus on the McDonnell Douglas burden-shifting

scheme. See McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.

Ct. 1817, 36 L. Ed. 2d 668 (1973). Instead, we inquire whether the

record contains sufficient evidence to support the jury’s ultimate

3
Smith acknowledges that the statutory maximum for punitive
damages is $300,000, 42 U.S.C. § 1981a(b)(3)(D) (1994), and thus
asks that we grant that amount, not the $500,000 awarded by the
jury.

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findings. Patterson v. P.H.P. Healthcare Corp., 90 F.3d 927, 933

(5th Cir. 1996).

II. Age Discrimination

Berry argues first that the evidence is insufficient to

support the jury finding that Berry had discriminated against Smith

because of her age and that this discrimination was willful. When

faced with the same argument, the district court disagreed,

pointing to: (1) the promotion of Pearce into the position

previously held by the older Smith; (2) the Luongo memorandum,

which even though six years old, provided clear evidence of

categorization by age; and (3) the fact that Smith and another

woman were suspended soon after their fortieth birthdays for

actions that Smith claimed, both then and at trial, did not justify

suspension. We agree with the district court that this evidence,

while not overwhelming, is sufficient to support the jury’s finding

of age discrimination.

Berry also challenges the size of the award. Berry argues

that if Smith had not voluntarily left the company, she would have

been terminated because she violated company policy by attempting

to record the September 27, 1995 meeting and by going on unapproved

travel while on medical leave. Thus, Berry asks that Smith’s award

of back pay be limited because she would have been terminated

anyway.

Because the evidence for Berry’s argument was discovered after

the alleged discriminatory actions took place, for Berry to win on

this argument, Berry must satisfy the requirements set forth in

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McKennon v. Nashville Banner Publishing Co., 513 U.S. 352, 115 S.

Ct. 879, 130 L. Ed. 2d 852 (1995). In McKennon, the Supreme Court

held that, “Where an employer seeks to rely upon after-acquired

evidence of wrongdoing, it must first establish that the wrongdoing

was of such severity that the employee in fact would have been

terminated on those grounds alone if the employer had known of it

at the time of the discharge.” Id. at 362-63, 115 S. Ct. at 886-

87. In denying Berry’s post-trial motion for judgment as a matter

of law, the district court stated that the jury could have

reasonably found that Berry failed to satisfy its burden of proving

that Smith would have been fired for her violations of company

policy alone. In light of the factual disputes over travel and the

fact that the antirecording policy focused on phone calls with

clients, we agree with the district court’s conclusion.

In addition to its finding of age discrimination, the jury

determined that Berry’s violation of the ADEA was willful, exposing

the company to liquidated damages under the ADEA. 29 U.S.C. §

626(b) (1994). Unlike Title VII, the ADEA does not provide for

punitive damages. See Dean v. American Security Ins. Co., 559 F.2d

1036, 1039 (5th Cir. 1977) (holding that punitive damages are not

available under the ADEA). Instead, the ADEA provides for

“liquidated damages” if the violation was willful. These

liquidated damages may not exceed the back pay award. That is, a

finding of willfulness can double the damages awarded to a

successful ADEA plaintiff. 29 U.S.C. § 626(b), incorporating 29

U.S.C. § 216(b) (1994). The jury found that Berry’s violation of

10
the ADEA was willful and the district court declined to upset this

finding.

A violation of the ADEA is willful if the employer knew or

showed reckless disregard for whether its conduct was prohibited by

the ADEA. Trans World Airlines, Inc. v. Thurston, 469 U.S. 111,

128, 105 S. Ct. 613, 625, 83 L. Ed. 2d 523 (1985); see also

Woodhouse v. Magnolia Hospital, 92 F.3d 248, 256 (5th Cir. 1996)

(“liquidated damages are not recoverable only if there is evidence

that the intentional violation of the ADEA was based on the

employer’s good-faith, albeit mistaken, belief that the statute

allowed an age-based decision”). We agree with the district court

that there was sufficient evidence for the jury to conclude that

Berry’s conduct was willful. The Luongo Memorandum indicates that

Berry categorized its employees by age. It also supports an

inference that Berry targeted older employees as prime candidates

for demotion and relegation to smaller markets once they were

identified as “low-end performers.” Thus, we decline to disturb

the district court’s award of $24,000 for back pay and $24,000 for

liquidated damages under the ADEA.

III. Sex Discrimination

Berry argues next that the evidence was insufficient to

support the jury finding of sex discrimination. Berry also

challenges the various awards of back pay, compensatory damages,

and punitive damages based on the sex discrimination claim. We

turn first to the sufficiency question.

We begin by observing that during the time under

11
consideration, four of the seven Sales Leaders at Berry were women.

Numerous women, including Smith, enjoyed successful careers at

Berry, receiving a variety of promotions and awards. Indeed, the

record indicates that Berry placed a substantial number of women in

both mid-level and managerial positions.

We also note that many of the Berry employees expressing

concern over Smith’s behavior--both prior to Smith’s demotion and

at trial--were women. For example, Lester Ann Smith, Brenda

Smith’s Team Leader, and Katherine LeMaire, the other Sales Leader

on Lester Ann Smith’s team,4 both testified that Smith was behaving

negatively and disrupting the workplace. Furthermore, two of the

four people closely involved in the decision to demote Smith were

women--Lester Ann Smith and Lynn Thomas.5 While these observations

are by no means determinative of the issue, they are significant

considerations in evaluating a claim of sex discrimination. See,

e.g., Travis v. Board of Regents of the University of Texas System,

122 F.3d 259, 264-65 (5th Cir. 1997) (looking to employer’s general

treatment and promotion of men and women).

Smith and the district court point to a number of events that

they argue would permit a jury to infer discrimination on the basis

4
Each of Berry’s sales teams was led by a Team Leader, in
this case, Lester Ann Smith. The Sales Leader worked under this
Team Leader. Because of its size and importance, Lester Ann
Smith’s team had two Sales Leaders--Brenda Smith and Katherine
Lemaire--instead of the usual one.
5
Lynn Thomas made the actual decision to demote Brenda
Smith. Lester Ann Smith, who did not have the power to make such
a decision herself, supported the demotion.

12
of sex. First, Smith points to the comment made to her by Dale

Granda when he promoted her to Sales Leader stating that he doubted

whether a woman could perform the job. Berry points out that the

remark was made six years before Smith’s departure and that both

she and a number of other women had been promoted to mid- and high-

level positions between 1990 and 1996. We agree with Berry that

Granda’s remark is a “stray remark” that cannot support an

inference of sex discrimination. See, e.g., Ray v. Tandem

Computers, Inc., 63 F.3d 429, 434 (5th Cir. 1995) (“[A] single

comment, made several years prior to the challenged conduct, is a

stray remark too remote in time to support an inference of sex

discrimination in later employment actions.”).

Second, Smith argues that Berry did not follow its “Corrective

Performance Plan” in disciplining Smith. Berry concedes this fact,

but points out that the company’s employee handbook clearly states

that Berry reserves the right not to follow the Plan if it so

chooses.

Relatedly, Smith argues that the manner in which she was

disciplined, when contrasted with the manner in which Joe Pearce

was disciplined, points to Berry’s discriminatory motive. The

record indicates that while Pearce was demoted and otherwise

punished for his alcohol-related misbehavior, which included

throwing a colleague into a swimming pool and propositioning a

colleague’s wife, he was treated in a substantially different

manner than Smith. However, we agree with Berry that Pearce’s

conduct was not substantially similar to that of Brenda Smith.

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Berry had legitimate nondiscriminatory reasons to treat Pearce, an

employee with alcohol problems manifesting in obnoxious behavior

away from the workplace, differently from an employee disrupting

the workplace through her negative attitude. This different

treatment does not raise an inference of sex discrimination.

Finally, Smith points to a pair of remarks made to a pregnant

colleague and the public announcement of her one-day suspension and

that of another women while a similar suspension of a man was kept

quiet. Again, these isolated incidents that occurred well before

Smith’s demotion will not support an inference of sex

discrimination.

In short, when we consider the isolated remarks and incidents

Smith relies on to support an inference of sex discrimination

against the background of Berry’s favorable treatment of Smith and

other women during her thirteen-year employment tenure, we conclude

that the evidence is insufficient to support the verdict on the sex

discrimination claim.

Our reversal of the sex discrimination claim requires us to

vacate the award of punitive damages and damages for mental pain

and suffering. Such damages are not available on the age

discrimination claim alone. Dean, 559 F.2d at 1039.

IV. Other Issues

We have considered the remaining arguments of the parties and

find that none of them have merit.

Conclusion

In sum, we agree with the district court that sufficient

14
evidence supports the jury’s finding of age discrimination. We

also find sufficient evidence to support the award of liquidated

damages under the ADEA. However, for the reasons stated above,

we find the evidence insufficient to support the finding of sex

discrimination. This finding requires us to vacate the award of

punitive damages and compensatory damages for mental pain and

suffering. The case is remanded to permit the district court to

enter judgment consistent with this opinion.

AFFIRMED in part, REVERSED in part, and REMANDED.

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