Adamson v. Multi Community Diversified Services, Inc.

FILED
United States Court of Appeals
Tenth Circuit

February 1, 2008
PUBLISH Elisabeth A. Shumaker
Clerk of Court
UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

BARRY B. ADAMSON,
PATRICIA ADAMSON, and
JESSICA CURL,

Plaintiffs-Appellants, No. 05-3478

v.

MULTI COMMUNITY DIVERSIFIED
SERVICES, INC., and
CARTRIDGE KING OF KANSAS, INC.

Defendants-Appellees.

Appeal from the United States District Court
for the District of Kansas
(D.C. No. 03-CV-04191-RDR)

Beth Regier Foerster, McCullough, Wareheim & LaBunker, PA, Topeka, Kansas, for
Plaintiffs-Appellants.

Arthur E. Palmer, Goodell Stratton Edmonds & Palmer LLP, Topeka, Kansas, for
Defendants-Appellees.

Before TACHA, Circuit Judge, EBEL, Senior Circuit Judge, and KANE,* Senior District
Judge.

KANE, Senior District Judge.

*
The Honorable John L. Kane, Jr., Senior United States District Judge for the District
of Colorado, sitting by designation.
 This is an appeal from the entry of summary judgment in a non-profit corporate

employer’s favor on federal age and sex discrimination claims brought by plaintiff family

members after they were simultaneously terminated from their employment by the

corporation’s board of directors. Plaintiffs also appeal from the district court’s decision

declining to exercise supplemental jurisdiction over their state law claims for breach of

implied contract and defamation.

In the proceedings below, Barry Adamson, Patricia Adamson and daughter Jessica

Curl claimed they were terminated based on their status as “husband, wife and daughter”

in contravention of the prohibition against sex-discrimination in Title VII of the Civil

Rights Act of 1964. Mr. Adamson, 56 at the time of his termination, also claimed

discrimination on the basis of age in violation of the Age Discrimination in Employment

Act. Defendants moved for summary judgment, asserting that, while no cause was

required to terminate any of the Adamsons, who were at-will employees, Mr. Adamson

was terminated based on legitimate concerns over money transfers and other unilateral

actions he had taken as the corporation’s Chief Executive Officer, and because his hiring

and direct supervision of his wife and daughter to work for the new corporation were ill-

advised under the company’s discretionary anti-nepotism policy. Defendants also argued

daughter Jessica’s position was simply eliminated as unnecessary. Defendants denied sex

or age discrimination entered into the board’s employment decisions.

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 Applying the standard analysis under McDonnell Douglas v. Green, 411 U.S. 792

(1973), the district court rejected Plaintiffs’ claims on various grounds, including that Mr.

Adamson had failed to establish a prima facie case of age discrimination and that none of

the Plaintiffs had adduced sufficient evidence of pretext to avoid summary judgment on

their sex discrimination claims. The district court also determined Jessica had failed to

come forward with sufficient evidence to support even a prima facie case of gender-based

discrimination in her termination under Amro v. Boeing Co., 232 F.3d 790, 797 (10th Cir.

2000), and concluded Defendants were entitled to summary judgment on this alternate

basis as well.

We affirm the district court’s determination that Barry Adamson failed to establish

a prima facie case of age discrimination. We generally affirm the entry of summary

judgment against Plaintiffs on their Title VII sex-discrimination claims, but articulate

additional and alternate reasons for that decision. Specifically, we reject the assertion that

“familial status” is a protected classification under Title VII and therefore dismiss

Plaintiffs’ claims that they were discriminated against because they were “husband, wife

and daughter” as outside Title VII’s scope. Our de novo review of the record convinces

us, moreover, that no independent claims for gender-discrimination survive this ruling

because, as presented by Plaintiffs, those claims are inextricably entwined with their

“familial status” theory of relief.

Alternatively, and because the district court engaged in the analysis, we review

Plaintiffs’ individual gender discrimination claims under the traditional McDonnell

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Douglas framework as well. The female Adamsons’ claims are analyzed under the

standards for assessing Title VII discriminatory discharge claims under Kendrick v.

Penske Transp. Servs., Inc., 220 F.3d 1220 (10th Cir. 2000) and Plotke v. White, 405 F.3d

1092 (10th Cir. 2005), while Barry’s claim is properly analyzed as one for reverse

discrimination under Notari v. Denver Water Dep’t, 971 F.2d 585, 588-91 (10th Cir.

1992).

Both analyses require Plaintiffs to present facts giving rise to an inference that

each was terminated on the basis of his or her gender. Because reverse discrimination

requires a determination that defendant is the “unusual” employer that discriminates

against the traditionally favored class of men, rather than women, Barry’s burden is

higher, requiring proof of “background circumstances” tending to establish that fact or, in

the alternative, that but for his status of being a man, he would not have been terminated.

Notari, 971 F.2d at 591. Mr. Adamson’s evidence falls short of either standard, and

Defendants are entitled to summary judgment on his Title VII claim without reference to

pretext.

The female Adamsons’ claims have marginally more heft based on allegations that

(1) the company applied its anti-nepotism policy to terminate them while it did not apply

it to terminate a set of similarly situated male employees and (2) assertions that Plaintiffs’

terminations were premised in part on concerns Mr. Adamson would exercise “undue

influence” over them if they remained with the company. Applying the appropriate

standards under Kendrick and Plotke, however, we conclude this evidence, too, fails to

4
support a claim for gender discrimination independently of Plaintiffs’ claims of “familial

status” discrimination because neither gives rise to the requisite inference of gender-

based discriminatory animus.

Alternatively, we agree with the district court that the facts marshaled fail to

establish Defendants’ stated reasons for firing Patricia and Jessica were but pretexts for

gender (rather than family-based) discrimination, and affirm the grant of summary

judgment on that alternate basis as well.

We perceive no error or abuse of discretion in the district court’s decision to

decline to exercise supplemental jurisdiction over Plaintiffs’ state law claims.

I. FACTS AND PROCEDURAL HISTORY

Barry Adamson, his wife Patricia and daughter Jessica Curl appeal the district

court’s rejection of their employment discrimination claims arising out of their

termination by the board of directors of Multi Community Diversified Services (MCDS)

– a nonprofit corporation with a mission to assist disabled persons – and MCDS’s wholly-

owned franchise, Cartridge King of Kansas, Inc. (CKK). Barry and Patricia Adamson,

together with their daughter, Jessica Curl, filed suit against MCDS and CKK, asserting

both federal and state law claims related to their terminations by the MCDS board of

directors on the same day in October 2002. The terminations occurred just three months

after Barry, as MCDS’s Chief Executive Officer, acted to incorporate the company’s

Cartridge King operations as a separate entity and to hire his wife and daughter as CKK’s

business manager and sales representative, respectively. At the time of their terminations,

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Barry had been with MCDS for nine years and Patricia had been with the company for 16

months. Jessica, a college student at the time, had worked at MCDS off and on

throughout her high school years.

Plaintiffs contend the board approved the hiring of Patricia Adamson as CKK’s

business manager knowing she was Barry’s wife and that Barry would be supervising her.

Jessica’s position did not require board approval. According to Plaintiffs, their

terminations came without warning and without explanation. Reasons later given were

that Mr. Adamsons’ unilateral management style and actions with respect to CKK, and in

particular money transfers from MCDS to CKK, had raised eyebrows and alienated

employees, and that the board was concerned the family’s employment relationships were

ill-advised and within the scope of the company’s anti-nepotism policy.1 The board

replaced Adamson as CEO with Sherry Plenert, a long-term female employee of the

company, who was 63 at the time.

1
In the employee handbook, the anti-nepotism policy is stated as follows:

Employment of Relatives

We have no general prohibition against hiring relatives. However, a few
restrictions have been established to help prevent problems of safety,
security, supervision and morale.

We will accept and consider applications for employment from relatives of
current employees. Parents, grandparents, children, spouses, brothers,
sisters, or in-laws will, generally, not be hired or transferred into positions
where they directly supervise or are supervised by another close family
member . . . .

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 The Adamsons filed suit, claiming their terminations pursuant to the anti-nepotism

policy constituted unlawful sex-based discrimination against them as “husband, wife and

daughter” in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000(e) et

seq. (“Title VII”). Mr. Adamson also claims his termination was the result of age-

discrimination in violation of the Age Discrimination in Employment Act, 29 U.S.C. §

621 et seq. (the “ADEA”). Plaintiffs deny Mr. Adamson engaged in any wrongdoing in

his activities related to CKK and, pointing to the “undue influence” comment and the fact

Defendants did not terminate a father-son duo who worked for the company pursuant to

the anti-nepotism policy, contend Defendants’ anti-nepotism concerns were but pretexts

for age and sex-based discrimination. Barry Adamson also contends the fact he

mentioned an intent to retire sometime in the “near future” to a board member shortly

before his termination gives rise to an independent inference of age-discrimination

sufficient to withstand summary judgment.

Each of the Plaintiffs also asserted state law breach of implied employment

contract claims premised on a failure of the company’s progressive discipline policy and

claims for violations of the Kansas Wage Payment Act. Mr. Adamson also asserted a

claim of defamation against the board based on members’ statements regarding funds

transferred from MCDS to CKK.

The district court granted Defendants’ motion for summary judgment on the

federal discrimination claims and dismissed the state law claims without prejudice

pursuant to 28 U.S.C. § 1376. In rejecting Mr. Adamson’s ADEA claim, the court

7
determined Mr. Adamson had failed to establish a prima facie case that his termination

was related to his age for purposes of inferring discriminatory animus. The district court

analyzed the parties’ sex-discrimination claims under the three-part framework

established in McDonnell Douglas v. Green, 411 U.S. 792 (1973).

Acknowledging it was “peculiar” for a husband and wife to be arguing

simultaneously that their respective terminations by a single employer were the result of

anti-male discriminatory animus on the one hand and anti-female discriminatory animus

on the other (Aplt. App. III at 572 (11/17/05 Mem. & Order)), the district court

nevertheless presumed each had made a prima facie case of sex-discrimination and ruled

against them on the issue of pretext.2 While we agree with the end result reached by the

district court, we confront head-on the Adamsons’ “familial status” theory of relief to

determine whether discrimination on the basis of individuals’ status as “husband, wife

and daughter”(id. Vol. II at 395 (Response to Defs.’ Mot. Summ. J.)) fit within Title VII’s

scope in the first instance. Concluding it does not, we then assess whether any of the

2
By contrast, the district court held Jessica to her burden of establishing a prima
facie case, concluding she had failed to raise the requisite initial inference of gender-
based discrimination under Amro v. Boeing Co., 232 F.3d 790, 797 (10th Cir. 2000) and
Plotke v. White, 405 F.3d 1092, 1099 (10th Cir. 2005)(while a prima facie test for sex
discrimination is flexible, at a minimum plaintiff must demonstrate the adverse
employment action occurred “under circumstances giving rise to an inference of unlawful
discrimination”). Aplt. App. III at 575-76. Specifically, the court rejected Jessica’s
assertion that the failure to apply the anti-nepotism policy to a father and son also
working for the company gave rise to an inference either that the policy was used to
promote sex-discrimination or that, but for her gender, Jessica would not have been fired.
Id. at 574-75. Without any evidence of other circumstances giving rise to an inference of
unlawful discrimination, the court concluded summary judgment under Amro was
appropriate. Id. at 578.

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Plaintiffs has established a prima facie case of gender-based discrimination. While we

understand the utility of district courts skipping the prima facie inquiry on motions for

summary judgment in order to proceed directly to the question of pretext, we believe the

approach ill-applied in the context of reverse discrimination claims, where heightened

standards are necessary for a prima facie showing to preserve the integrity of the statute

and Congress’s intent in enacting it, or in cases where, as here, female plaintiffs’ claims

are presented under circumstances where the discriminatory intent asserted is not

actionable and where true gender-based discrimination is not apparent from the facts

alleged.

Finally, and while we agree generally with the assertion that pretext evidence –

i.e., the fact that Defendants applied the anti-nepotism policy inconsistently with regard to

the Adamson family – may be useful in multiple stages of a Title VII case and may be

considered under appropriate circumstances in assessing the prima facie case, see

Mickelson v. New York Life Inc. Co., 460 F.3d 1304, 1317 (10th Cir. 2006)(considering

employer’s proffered reason for firing plaintiff at causal-connection stage of retaliation

prima facie case), we reject Plaintiffs’ assertion that such evidence satisfies their

individual prima facie burdens here. By conflating evidence tending to cast doubt on an

employer’s stated reasons for an employment decision with the burden of establishing an

inference of actionable discriminatory animus in the first instance, Plaintiffs seek to gain

the benefit of that inference without having to establish it. Without a demonstrable nexus

between dispersions cast on an employer’s stated reasons and invidious intent, evidence

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of “pretext” merely establishes that an employer’s stated reason for its actions may not be

its real or only reason. It does not establish that the real or “but-for” reason was unlawful

discrimination.

II. DISCUSSION

The issues presented by the individual family members on appeal are: (1) whether

the district court properly granted summary judgment for MCDS on Barry Adamson’s

age discrimination claim; (2) whether the district court properly granted summary

judgment for MCDS on Plaintiffs’ individual claims for “familial status” and sex

discrimination; and (3) whether the district court properly declined to exercise

supplemental jurisdiction over the state claims. While the Adamsons agree generally that

the three-step McDonnell Douglas framework applies to their claims, they alternately

suggest their evidence of pretext constitutes direct evidence of both age and sex

discrimination obviating the need for a prima facie showing, or that it is sufficient,

without more, to make that showing in the first instance.

While we agree a trier of fact may infer discriminatory intent from facts that also

support a finding of pretext, we reject the reverse assertion that evidence of “pretext,” i.e.

that an employer’s stated reasons for an employment decision are inaccurate or untrue,

compels it. See St. Mary’s Honor Ctr. v. Hicks, 509 U.S. 502, 510 (1993)(proof of

pretext does not automatically entitle a discrimination plaintiff to judgment because,

occasionally, the reason given for a decision that turns out to be pretextual may

nonetheless be nondiscriminatory). Here, for example, where Plaintiffs’ sex-

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discrimination claims are premised on an inactionable claim based on anti-family animus,

proof of pretext will not, without more, transform those claims into actionable claims for

gender-discrimination.

A. Applicable Legal Standards.

We review the district court's decisions on motions for summary judgment

de novo, applying the same standard as the district court. See Trujillo v.

University of Colo. Health Sciences Ctr., 157 F.3d 1211, 1213 (10th Cir.1998).

Summary judgment is appropriate only if “there is no genuine issue as to any

material fact and ... the moving party is entitled to a judgment as a matter of law.”

Fed.R.Civ.P. 56(c). A fact is “material” if, under the governing law, it could have

an effect on the outcome of the lawsuit. Anderson v. Liberty Lobby, Inc., 477 U.S.

242, 248 (1986). A dispute over a material fact is “genuine” if a rational jury

could find in favor of the nonmoving party on the evidence presented. Id.

The burden of showing that no genuine issue of material fact exists is borne

by the moving party. Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 670 (10th

Cir.1998). Where, as here, the moving party does not bear the ultimate burden of

persuasion at trial, it may satisfy this burden by identifying “a lack of evidence

for the nonmovant on an essential element of the nonmovant's claim.” Id. at 671.

In considering a motion for summary judgment, this court draws all reasonable

inferences in favor of the nonmoving party. See Curtis v. Oklahoma City Public

Sch. Bd. of Ed., 147 F.3d 1200, 1214 (10th Cir.1998). If no genuine issue of

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material fact is in dispute, this court then determines whether the substantive law

was correctly applied by the district court. See Kaul v. Stephan, 83 F.3d 1208,

1212 (10th Cir.1996).

A plaintiff can prove age or sex discrimination with direct or circumstantial

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

evidence demonstrates on its face that the employment termination was discriminatory.

Ramsey v. City & County of Denver, 907 F.2d 1004, 1008 (10th Cir. 1990).

Circumstantial evidence permits the fact finder to draw a reasonable inference from facts

indirectly related to discrimination that discrimination, in fact, has occurred. Stone, 210

F.3d at 1136. Plaintiff has the ultimate burden of proving, either directly or indirectly,

that defendant intentionally discriminated against him. Texas Dep't of Cmty. Affairs v.

Burdine, 450 U.S. 248, 260 (1981).

Where a plaintiff relies on circumstantial evidence, the Supreme Court has

established a three step burden-shifting framework for determining whether a plaintiff’s

evidence raises an inference of invidious discriminatory intent sufficient to survive

summary judgment. McDonnell Douglas, 411 U.S. at 802-05. See Garrett v. Hewlett-

Packard Co., 305 F.3d 1210, 1216 (10th Cir. 2002). This three-step analysis first requires

the plaintiff to prove a prima facie case of discrimination. Id. If plaintiff establishes a

prima facie case, the burden of going forward shifts to the defendant to produce a

legitimate, nondiscriminatory reason for its actions. Id. “If the defendant does so, the

plaintiff must either show that his race, age, gender, or other illegal consideration was a

12
determinative factor in the defendant's employment decision, or show that the defendant's

explanation for its action was merely pretext.” Id.

A plaintiff may establish pretext by showing that the employer’s proffered reason

for acting adversely towards him is unworthy of belief. See Randle v. City of Aurora, 69

F.3d 441, 451 (10th Cir. 1995). Plaintiff may also survive summary judgment by

introducing affirmative evidence of a discriminatory motive. Danville v. Reg’l Lab

Corp., 292 F.3d 1246, 1249-50 (10th Cir. 2002); Stone, 210 F.3d at 1137. The plaintiff

does not have the burden of proving a defendant’s proffered reasons were false, or

that a discriminatory factor was the "sole” motivating factor in the employment

decision. James v. Sears Roebuck & Co., Inc., 21 F.3d 989, 992 (10th Cir. 1994).

Instead, the employee must show that unlawful intent was a “determining factor”

and that the decision violates the statute. Sanchez v. Philip Morris, Inc., 992 F.2d

244, 246-47 (10th Cir. 1993) (citing E.E.O.C. v. Flasher Co., Inc., 986 F.2d 1312

(10th Cir. 1992)).

B. Barry Adamson’s ADEA Claim.

In termination cases, a prima facie case of age discrimination ordinarily requires

the plaintiff to show that he or she was: (1) within the protected class of individuals 40 or

older; (2) performing satisfactory work; (3) terminated from employment; and (4)

replaced by a younger person, although not necessarily one less than 40 years of age.

Greene v. Safeway Stores, Inc., 98 F.3d 554, 557-60 (10th Cir. 1996)(citing cases)).

While the elements of a prima facie case under the McDonnell-Douglas framework are

13
neither rigid nor mechanistic, their purpose is the establishment of an initial inference of

unlawful discrimination warranting a presumption of liability in plaintiff’s favor. See id.

at 558 (citing O’Connor v. Consol. Coin Caterers Corp., 517 U.S. 308, 312 (1996)). In

the absence of facts tending to establish this initial inference, plaintiff is not entitled to the

presumption of discrimination and a defendant is not required to defend against the

charge. Id.

In the instant case, the district court granted MCDS summary judgment on Barry

Adamson’s age discrimination claim based on his failure to establish the fourth element

of his prima facie case. Age 56 at the time of his termination, Adamson was replaced as

CEO by MCDS’s then-CFO, Sherry Plenert, who was 63. While replacement by an older

or insignificantly younger worker does not per se doom a prima facie case if both are

within the protected age group, the evidence must nevertheless be adequate to create an

inference that the adverse employment decision was, in fact, motivated by plaintiff’s age.

O’Connor at 312 (fact one person in protected class has lost out to another person in

protected class “irrelevant, so long as he has lost out because of his age”)(emphasis

added)). We agree that in this case, in the absence of any other direct or circumstantial

evidence establishing the requisite inference, replacement by an undisputedly qualified

individual seven years older than plaintiff fails, a fortiori, to satisfy the fourth element of

a prima facie case.

Adamson relies on Greene to argue his case presents the “extraordinary” situation

in which the failure to establish the fourth element of a prima facie case is not fatal to his

14
claim. Specifically, Adamson contends comments he made to a board member regarding

plans to retire some time in the future give rise to an inference that the board’s subsequent

decision to terminate his employment was discriminatorily motivated independent of any

inference established or not established by meeting the fourth prong of the prima facie

case. Adamson conflates the analytical schemes applicable when a plaintiff sets out to

prove discriminatory intent via direct, as opposed to indirect, evidence and misapplies

Greene. See Timmerman v. U.S. Bank, N.A., 483 F.3d 1106, 1118 (10th Cir. 2007)(where

plaintiff relied exclusively on the McDonnell Douglas burden-shifting framework, not on

direct evidence of discrimination, any value Greene had to her case was “strictly through

analogy”).

Greene involved a situation in which plaintiff, a 52 year-old Safeway store

manager who had worked for the company for 33 years, was replaced in his management

position by a 57 year-old co-worker. At trial on his age discrimination claim, plaintiff

adduced evidence establishing that, given his long tenure with the company, he had been

grandfathered into the company’s pension plan and was 28 months away from vesting in

the plan at the time he was replaced. Through the direct testimony of company managers

and others, Greene established that his replacement, by contrast, was not eligible for a

pension and that this was a factor in Safeway’s decision to replace him. On Safeway’s

Rule 50(a) motion at the close of the evidence, however, the district judge agreed

plaintiff’s replacement by an older, not younger, worker was “‘problematic’” for purposes

15
of the prima facie case and entered judgment as a matter of law in Safeway’s favor. Id. at

556.

We reversed, finding that based on the evidence submitted at trial, Greene had

presented a submissible case of discrimination independent of the McDonnell Douglas

framework and the fourth prong of the prima facie case based on other direct and

circumstantial evidence of age discrimination, i.e., that Safeway replaced Greene, on the

basis of age, in order to avoid having to pay him grandfathered pension benefits. Greene,

98 F.3d at 560. The fact that his replacement was older than he was not relevant to this

independent evidence of age-based discrimination, and hence Greene’s failure to comport

with the fourth prong of his prima facie case under McDonnell Douglas was not fatal to

his claim and could not be used to take the case from the jury. See id. In the instant case,

Adamson does not offer his statements regarding plans to retire as affirmative evidence of

discrimination independent of the McDonnell Douglas analysis or his prima facie case.

More importantly, he does not link his statements regarding retirement either to Plenert or

to the board’s motivation in replacing him. Instead, Adamson leaps from the fact of his

statements to the holding in Greene, saying the board’s knowledge of his plans to retire

“some time” in the future creates the inference of age discrimination irrespective of the

prima facie case. The argument, if accepted, would vitiate the ADEA itself: the

contemplation of retirement “some time” in the future is common throughout the

protected class by definition.

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 Facts demonstrating Adamson had disclosed to board members some months

before his termination an unspecified plan to retire have no nexus to, and fall short of any

independent evidence of, the discriminatory animus evidenced in Greene. They do not,

without additional facts tending to distinguish Plenert on that basis and linking the

distinction to the board’s replacement decision, provide a basis for allowing Adamson to

proceed independently of the McDonnell Douglas framework or otherwise excuse him

from having to make his prima facie case. See Timmerman at 1118 (failure to come forth

with evidence that might arguably show nexus between employer’s alleged bias against

older employees and plaintiff’s termination fatal to age discrimination claim).

We affirm the entry of summary judgment in Defendants’ favor on Mr. Adamson’s

ADEA claim.

C. Title VII Sex Discrimination Claims.

Plaintiffs’ Title VII claims are two-fold. First, Plaintiffs collectively contend that,

because their terminations were made based on their individual status as “husband, wife

and daughter,” which they contend are inherently sex-based, they have stated a prima

facie case of sex-based discrimination for purposes of the McDonnell Douglas

framework. Plaintiffs deny the company is entitled to summary judgment on this claim

because its proffered reason for their terminations – concerns about Mr. Anderson’s

management decisions and monetary transfers to CKK and his direct supervision of his

wife and daughter as CKK staff – are not only unworthy of belief, but constitute direct

evidence of the company’s intent to discriminate against them as “husband, wife and

17
daughter.” Mr. Adamson denies any misfeasance or wrongdoing as CEO and together

with his wife and daughter, asserts the fact the anti-nepotism policy was not applied to a

father and son also working for the company establishes they were targeted on the basis

of their familial, i.e., gender-based, status. Each also contends a board member’s stated

concern that Barry would exert “undue influence” over his wife and daughter constitutes

direct evidence of sex-based discrimination – against Barry as a man who ostensibly

would unduly influence women and Patricia and Jessica as women who would be so

influenced. We address both assertions below.

Discrimination based on “familial status.”

Plaintiffs’ contrary assertion notwithstanding, Title VII protects neither the family

unit nor individual family members from discrimination based on their “familial status”

alone. The district court avoided the issue, simply stating the Adamsons’ sex-

discrimination claims based on their status as “husband, wife and daughter” was “even

more enigmatic than Barry’s age discrimination claim” but opting to presume the

existence of a prima facie case in order to rule definitively on the issue of pretext. The

district court recognized this approach was “somewhat peculiar” given the implicit

assertion that MCDS was the type of employer that discriminated both against men and

women simultaneously, but proceeded in this manner because Defendants would prevail

on the issue of pretext in any event. Aplt. App. III at 570, 572.

While we recognize the utility of such an approach in this particular case, where

evidence casting doubt as to the merit of the employer’s proffered reasons is scarce, we

18
cannot endorse it as a general matter. Requiring employers to answer and engage in

costly discovery to refute an inference of “discrimination” that is not otherwise actionable

is both inefficient and unjust.

“Familial status” is not a classification based on sex any more than is being a

“sibling” or “relative” generally. It is, by definition, gender neutral. The use of gender to

parse those classifications into subcategories of “husbands, wives and daughters” is a

social and linguistic convention that neither alters this fact nor elevates those

subcategories to protected status. Discrimination on the basis of “familial status” gains

traction as a sex-based distinction under Title VII only with reference to the anti-nepotism

policy at issue in this case, and the female Adamsons’ contention that the board applied

the policy to promote gender-based discrimination, which we address below.

Mr. Adamson’s claim that he was terminated in violation of Title VII based on his

status as Patricia’s “husband” (and Jessica’s “father”), and Patricia and Jessica’s claims

that they were terminated by virtue of being Barry’s “wife” and “daughter,” respectively,

fall outside the scope of Title VII and its purpose in protecting employees against

invidious discrimination on the basis of sex, and we reject those claims without reference

to McDonnell Douglas or its burden-shifting framework. To the extent the district court

presumed the existence of a prima facie case of sex-based discrimination under Title VII

based on “familial status,” the presumption was erroneous and we reject it. Assertions

that an employer discriminated against an individual on the basis of his or her “familial

status” alone state no cognizable cause of action under Title VII.

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 Reverse Sex-Based Discrimination - Barry Adamson.

As previously stated, Barry Anderson claims the board discriminated against him

on the basis of sex by applying the anti-nepotism policy to target him and out of a

discriminatory concern that he, “as a man,” would exercise “undue influence” over his

wife and daughter as women. The district court approached this claim without reference

to Notari or the heightened standards a plaintiff who is not a member of the traditionally

disfavored class must meet to make a prima facie case of sex discrimination under Title

VII. Instead, the district court presumed the existence of a prima facie case and entered

summary judgment against Adamson based on the failure of his evidence to create an

inference of pretext.

We conclude Barry’s reverse discrimination claim premised on the company’s

selective application of the anti-nepotism policy falls with his claim based on familial

status. While Barry incants the phrase “as a man” in his claim, he makes clear his

purpose in targeting the company’s application of its anti-nepotism policy is not to

demonstrate reverse discrimination under Notari, but to reveal the company’s “true”

purpose was to terminate him on the basis of his familial status as Patricia’s husband and

Jessica’s father. According to Barry, the anti-nepotism policy was applied to fire him, his

wife and daughter while a father and son also working at the company were not fired.

Because discriminating against him as “husband” and “father” is not actionable

discrimination under Title VII, “direct evidence” of such an intent states no cognizable

claim for relief.

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 Viewing Barry’s allegations through the McDonnell Douglas paradigm as stating a

claim for reverse gender discrimination under Notari is similarly to no avail. In Notari v.

Denver Water Dep’t., 971 F.2d 585 (10th Cir. 1992), we noted the presumption of

invidious intent created by establishing a prima facie case under McDonnell Douglas

arises precisely because the plaintiff belongs to a disfavored group. Id. at 589 (quoting

Furnco Constr. Corp. v. Waters, 438 U.S. 567, 577 (1978)(“A prima facie case under

McDonnell Douglas raises an inference of discrimination only because we presume these

acts, if otherwise unexplained, are more likely than not based on consideration of

impermissible factors.”). When plaintiff is a member of a historically favored group, by

contrast, an inference of invidious intent is warranted only when “‘background

circumstances support the suspicion that the defendant is that unusual employer who

discriminates against the majority.’” Id. at 588-89 (quoting Parker v. Baltimore & Ohio

R.R. Co., 652 F.2d 1012, 1017 (D.C. Cir. 1981)). See also Livingston v. Roadway

Express, Inc., 802 F.2d 1250 (10th Cir. 1986)(adopting Parker standard in reverse

disparate impact cases and assuming, in dicta, that the standard would apply in disparate

treatment cases, as well). Mr. Adamson’s facts fall far short of demonstrating

“background circumstances” sufficient to create an inference of reverse discrimination

under Notari’s standards.

In Notari, as in Greene, we recognized that plaintiffs are not limited to the

McDonnell Douglas framework to prove intentional discrimination. A plaintiff may rely

either upon circumstantial evidence and the McDonnell Douglas presumption that arises

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from it or present direct proof of discriminatory intent. 971 F.2d at 589. Thus, Barry is

entitled to prove, through direct evidence and without reference to McDonnell Douglas,

that his termination was, in fact, motivated by the fact that he is a man. It is not enough,

however, for a plaintiff merely to allege that he was a qualified man who was treated

differently than a similarly situated woman. See id. Instead, he must allege and produce

evidence sufficient to support a reasonable inference that, but for his status as a man, the

challenged decision would not have occurred. Id.

To the extent statements that Mr. Adamson might “exert undue influence” over his

wife and daughter are offered as “direct evidence” of discriminatory intent, they fall short

of the standard because they are not linked, in any direct manner, to the characteristic

upon which any actionable sex-based claim would be based, i.e., Adamson’s gender.

They are, if anything, tied to Adamson’s “familial status” and assumed supervisory role

over his wife and daughter, neither of which implicate Title VII’s prohibitions. To the

extent Adamson relies on this statement as evidence of MCDS’s bias against men, it is

circumstantial evidence that does not, without additional “background circumstances”

within our contemplation in Notari and Livingston, give rise to any inference that MCDS

terminated him on the basis of his sex. To the contrary, it suggests only that Adamson, an

at-will employee who was terminated from his job, happened to be a man. Absent

evidence tending to demonstrate that but for his being a man he would not have been

terminated, no inference of sex-based discrimination is raised.

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 Mr. Adamson’s Title VII claims fail as a matter of law without reference to

MCDS’s stated reasons for terminating him.

Traditional Sex-Based Discrimination under Title VII -
Patricia and Jessica

As previously noted, neither Patricia nor Jessica articulated their disparate

treatment claims under this standard, opting instead simply to assert that discrimination

against them as wife and daughter was sex-based and therefore within the purview of

prohibited discrimination under Title VII. We have rejected this theory, and look now to

determine whether the female Adamsons have articulated viable claims for discrimination

independently of their claims based on familial status.

Generally stated, a prima facie case of discriminatory discharge under Title VII

requires plaintiff to demonstrate that she (1) belongs to a protected class; (2) was

qualified for her position; (3) was discharged; and (4) her position was not eliminated

after her discharge. Kendrick v. Penske Transp. Servs., Inc., 220 F.3d 1220, 1229 (10th

Cir. 2000)(applying McDonnell Douglas). See Plotke v. White, 405 F.3d 1092 (10th Cir.

2005). The standard is flexible, however, and may vary depending on the context of the

claim and the nature of the adverse employment action alleged. Plotke at 1099 (citing

McDonnell Douglas). Thus, the fact a plaintiff’s job was or was not eliminated after her

discharge is not necessarily conclusive of her prima facie case. “The critical prima facie

inquiry in all cases is whether the plaintiff has demonstrated that the adverse employment

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action occurred ‘under circumstances which give rise to an inference of unlawful

discrimination.’” Id at 1100 (quoting Kendrick and Burdine).

The only evidence offered by Patricia and Jessica to establish this inference is the

“undue influence” remark and the fact Defendants did not apply the MCDS anti-nepotism

policy to fire a father and son also working for the company to support claims that they

were fired because they were women. Neither fact, alone or together, raises the necessary

inference of invidious intent necessary to establish a prima facie case of discrimination.

As previously stated with respect to Mr. Adamson, Plaintiffs revile the “undue

influence” remark less as a sexist statement suggesting discriminatory motives vis á vis

men or women, and more as a judgment disparaging of family members such as

themselves working together as supervisor and subordinates. To the extent it can be

viewed as the former, we note the remark is gender-neutral on its face and will not,

without more, support an inference of discriminatory intent. As the district court noted,

an isolated and ambiguous comment is generally considered too abstract to support an

inference of discrimination. Aplt. App. III at 575 (citing Stone, 210 F.3d at 1140).

Without more, moreover, an employee’s subjective belief in a comment’s invidious

nature also does not support an inference of discriminatory intent. Id. (citing Debs v.

Northeastern Illinois Univ., 153 F.3d 390, 397 (7th Cir. 1998)).

Patricia and Jessica’s reliance on evidence of inconsistencies in Defendants’

application of the anti-nepotism policy raises thornier issues. Plaintiffs articulate this

evidence in terms of pretext, but there is no proscription in an appropriate case against

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using pretext evidence to support a prima facie case if it indeed gives rise to an inference

of actionable discriminatory intent. See Mickelson, 460 F.3d at 1317 (considering the

employer’s proffered reason for firing the plaintiff at the prima facie stage); see also

Wells v. Colo. Dept. of Transp., 325 F.3d 1205, 1216 (10th Cir. 2003)(“[B]y considering

an employer’s proffered reasons for taking adverse action in the causal-connection

portion of the prima facie case, we are assessing pretext evidence typically considered in

a later phase of the McDonnell Douglas analysis.)

Specifically, Patricia and Jessica contend they were “treated differently in the

terms and conditions of their employment as a result of their gender, female, as compared

to male employees . . . [in] the discriminatory application of an anti-nepotism policy with

defendant.” R. I, 50-51. They point to two examples of nepotism at MCDS that they

assert support their position, one involving a lower level male employee who supervised

his part-time employee son, and another involving Sherry Plenert who supervised her

daughter. According to Plaintiffs, Defendants’ use of the anti-nepotism policy to

terminate them and not these other employees creates an inference of discriminatory

intent actionable under Title VII.3

3
Again, the fact Barry as well as Patricia and Jessica use these examples as
evidence of “discriminatory intent” suggest the real and only discrimination being
challenged is Defendants’ alleged animus towards them as family members, which we
have rejected, and not as a man and two women. Indeed, the decision not to terminate in
both cases negates the inference of discriminatory animus at all. Nevertheless, we
continue with our analysis of any residual, independent Title VII claim on the part of the
female Adamsons.

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 In an appropriate case, evidence that a gender neutral anti-nepotism policy is

applied in a manner that disproportionately impacts women may give rise to an inference

of sex-based discrimination without proof of discriminatory intent. Thomas v.

Metroflight, Inc., 814 F.2d 1506, 1509-10 (10th Cir. 1987)(citing Dothard v. Rawlinson,

433 U.S. 321 (1977)). To establish a prima facie of discrimination under this theory of

relief, a plaintiff must show that the “facially neutral standards in question selects

applicants for hire in a significantly discriminatory pattern.” Id. at 1509 (quoting

Dothard at 329). Unlike plaintiff’s burden in a disparate treatment case, the burden is

onerous, requiring her actually to “‘prove the discriminatory impact at issue’” before

availing herself of the presumption of discrimination afforded by the establishment of a

prima facie case. Id at 1509 (citing Johnson v. Uncle Ben’s, Inc., 657 F.2d 750, 753 (5th

Cir. 1981), cert. denied, 459 U.S. 967 (1982)(emphasis original)). Once established,

however, a prima facie case of disparate impact shifts the burden of proof and is

conclusive on the issue of discrimination unless defendant “proves” business necessity for

the challenged practice to rebut the prima facie case. Id. (emphasis original).

This is not such a case and Plaintiffs’ evidence falls far short of establishing any

“significant” or statistically supported inference of discrimination in Defendants’

application of their anti-nepotism policy. Under Plaintiffs’ own view, the policy was

applied to fire one man and his wife and daughter who were in a supervisory-subordinate

status (the Adamsons) and not applied to fire a father and son or a mother and daughter in

similar supervisor-subordinate roles. No discriminatory pattern or disproportionality as

26
between men and women is evident at all on these facts, and the inquiry could end on that

basis alone. See Thomas, 814 F.2d at 1509-10 (discussing disagreements among various

authors and authorities regarding what constitutes “substantial” or “significant”

discriminatory impact in a given case, but ruling application of anti-nepotism rule in two

instances to impact two women insufficient to prove violation of Title VII); see Roche v.

Wareham, 24 F. Supp.2d 146, 153 (D. Mass. 1998)(collecting cases).

The different allocations of the burdens of proof and production in disparate

treatment and disparate impact cases stem precisely from the different requirements for

establishing the prima facie case. Thomas at 1509. Allowing Patricia or Jessica to create

their inference of intent in a disparate treatment case with disparate impact evidence that

would not support such an inference in its own right conflates the concepts. Disparate

impact evidence cannot support an inference of sex-based discriminatory intent in a

wrongful discharge case if it is insufficient to support an inference of sex-based

discrimination in a disparate impact case. To hold otherwise allows two of the three

Plaintiffs in this case to turn not-actionable familial status claims into actionable sex-

discrimination claims without any nexus between Defendants’ proffered reason for their

termination and sex-based discrimination.

Based on the foregoing, we conclude that neither Patricia Adamson nor Jessica

Curl has established a prima facie case of sex discrimination and affirm the entry of

summary judgment against them on their claims without reference to MCDS’s proffered

reasons for their terminations. Assuming, for the sake of argument, however, that they

27
had established a prima facie case of discriminatory discharge under Kendrick and Plotke

based on their status as women, we agree with the district court that their circumstantial

evidence is insufficient to raise an inference of pretext under McDonnell Douglas and any

“direct evidence” of discrimination (in the form of comments that they would be “unduly

influenced” by Mr. Adamson) is insufficient to raise an inference of discriminatory intent

independently of McDonnell Douglas. Defendants are entitled to summary judgment on

the female family members’ Title VII discrimination claims.

III. CONCLUSION.

Title VII only prohibits discrimination on the basis of certain, invidious factors.

Employers are free to terminate at-will employees for any other reason – however unfair,

unwise, or even erroneous – so long as it is not unlawful. See Neal v. Roche, 349 F.2d

1246, 1252 (10th Cir. 2003); E.E.O.C. v. Flasher Co., Inc., 986 F.2d 1312, 1321 (10th Cir.

1992). As at-will employees, the Adamsons were not entitled to an explanation from

MCDS or the board of directors for their terminations. Having been given some (the anti-

nepotism policy, concerns about money transfers Mr. Adamson made from MCDS to

CKK, the elimination of Jessica’s job), the assertion that MCDS applied its policy

inconsistently or that Mr. Adamson was later cleared of any malfeasance does not create

an inference that, but for Mr. Adamson’s age or each family members’ respective gender,

the terminations would not have occurred.

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 WE AFFIRM the entry of summary judgment in favor of Defendants and against

Plaintiffs on Barry Adamson’s ADEA claim as well as on each of Barry, Patricia and

Jessica’s Title VII claims. Finding no abuse of discretion in the district court’s decision

to decline to exercise supplemental jurisdiction over the state law wage and defamation

claims under 28 U.S.C. § 1367(c)(3), we also AFFIRM the district court in that regard.

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