Zapata-Matos v. Reckitt & Colman

United States Court of Appeals
For the First Circuit

No. 00-2546

RAMÓN ZAPATA-MATOS,

Plaintiff, Appellant,

v.

RECKITT & COLMAN, INC., f/k/a L&F PRODUCTS,

Defendant, Appellee.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO

[Hon. Aida M. Delgado-Colón, U.S. Magistrate Judge]

Before

Boudin, Chief Judge,
Kravitch,* Senior Circuit Judge,
and Lynch, Circuit Judge.

Jane Becker Whitaker for appellant.
Graciela J. Belaval with whom Martinez Odell & Calabria was
on brief for appellee.

*
Of the Eleventh Circuit, sitting by designation.
 January 14, 2002

LYNCH, Circuit Judge. Ramón Zapata-Matos was

terminated in 1993 from his position with L&F Products as

General Manager for all operations in Puerto Rico, Mexico, and

the Caribbean. He had been with the company since 1983 and had

received a number of promotions, although in 1992 the company

declined to create and promote him to a Regional Director's

position as he had requested. Zapata's employment was

terminated on September 28, 1993. He sued under Title VII of

the Civil Rights Act of 1964, 42 U.S.C. § 2000e-2 (1994), saying

he had been discriminated against on the basis of his national

origin as a Puerto Rican.

In a thoughtful opinion and order, the magistrate judge

granted summary judgment for defendant L&F.1 The court concluded

that Zapata had "presented insufficient evidence from which a

rational fact finder could conclude that in failing to promote,

and subsequently terminating Zapata, L&F Products discriminated

1 L&F is now known as Reckitt & Colman, Inc.

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against him on the basis of his Puerto Rican heritage." We

agree, and affirm. In so doing we clarify what is meant by

evidence of pretext and the ultimate issue of discrimination.

I.

We review the grant of summary judgment de novo and

draw all reasonable inferences from the facts in plaintiff’s

favor. Lennon v. Rubin, 166 F.3d 6, 8 (1st Cir. 1999).

The undisputed facts tell the story. Zapata was hired

in 1983, as a Manager for Givenchy Products, a division of

Sterling Products, Inc., itself a subsidiary of Eastman Kodak

Corporation. He was hired by a Sterling vice president with the

approval of Michael Gallagher, the company's President.

In 1989, Zapata was promoted to the position of General

Manager of L&F Products, Caribbean, also an Eastman Kodak

subsidiary. Gallagher, again, was involved in his appointment.

In addition, with Gallagher’s blessing, Zapata's

responsibilities were increased to include Mexico as well as

Puerto Rico and the Carribean. In recognition of his greater

responsibilities, Zapata received a salary increase, again with

Gallagher’s approval. Indeed, in 1992, Zapata's immediate

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supervisor stated that he anticipated promoting Zapata to

Regional Director in a year.2

In 1992, in light of his new responsibilities, Zapata

actively sought to be named Regional Director for L&F for Mexico

and the Caribbean. Gallagher told Zapata that he was not going

to create a Regional Director position for Zapata's region.

Nonetheless, Zapata continued to receive very positive

performance evaluations, and Gallagher rated his work as "very

good."

But a serpent lurked in this happy scene. The prices

charged by L&F for its goods in Puerto Rico were as much as 30%

lower than for the same goods on the U.S. mainland. This led

potential mainland buyers to buy from third party middlemen, who

bought low in Puerto Rico and resold stateside. The resale

prices were still lower than mainland prices. The company was

very concerned about this "diversion problem" and Zapata was

ordered at a meeting in Montvale, New Jersey early in 1992, and

later by memo dated July 8, 1992, to make Puerto Rico prices

2 He had earlier recommended that the company send Zapata
to a management development program at a business school like
Wharton or Harvard.

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equal to mainland U.S. prices. He balked and predicted this

strategy would cause the Caribbean Division to lose at least

$2.4 million in operating profits. He asked for time to present

an alternative plan. Zapata’s direct supervisor, A.J. Brown,

responded in a July 8, 1992 memo that while he was willing to

listen to alternatives, he would not change his position on

price parity. Brown told Zapata it was unfortunate he had to

"order" Zapata to do this, that Zapata had known of the urgency

of the problem for nine months, and that he should have come up

with a plan earlier. Gallagher was copied on the

correspondence.

In an August 1992 budget meeting, Zapata tried to get

the price parity directive reconsidered and expressed his fear

about the negative effect it would have on the Puerto Rican

market. According to Zapata, Gallagher responded "Fuck Puerto

Rico . . . . We’ve got to change and we’ve got to fix this

situation, because we don’t want this happening." Zapata says

this remark showed discrimination against Puerto Ricans. It is

the only such remark alleged.

True to form, the company repeated its policy against

diversion in a memorandum dated November 13, 1992. As Zapata

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predicted, the raising of prices in Puerto Rico and the

Caribbean substantially hurt his Division’s sales. Zapata says

sales in Puerto Rico dropped by about 40%. He also says that

when he did the budget review in 1992 he was told by Gallagher

not to worry about the profit decline because they had the

Mexican market. Zapata felt he should "get Mexico growing."

Then, he says, by mid-year 1993 the emphasis was switched back

to Puerto Rico, and he was put under severe pressure to increase

profits. A goal of $500,000 in profits for the Division was set.

Zapata, in response, worked on what he called a

"reengineering plan" to downsize and eliminate the positions of

some key employees. Zapata says he was initially told not to

prepare a budget for 1993, but as the annual budget meeting for

the upcoming 1993 year -- to be held in Puerto Rico on September

26-28 -- approached, Zapata was reminded of needed financial

information by a September 20 memo from Peter Black, the Group

Vice President for North America. Zapata immediately met with

his key staff. On the same day, after the meeting, four of the

key staff members resigned: the managers for Marketing, Sales,

and Products. The four sent letters to the company.

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 The magistrate judge’s opinion and order capture the

essence of the letters. Gloria Castillo, a Marketing Manager,

wrote that she could not "continue to work under the conditions

now prevailing at L&F Products, where decisions are taken

impulsively and the course of action is changed from day to

day." Edgardo De La Torre, a Sales Manager, wrote that he was

resigning due to "a series of irreconcilable differences with

the top management of L&F Products Caribbean." Yvette De Jesús,

a Product Manager, expressed her belief that "some of the

actions taken by the company could hamper [her] future

professional growth in this market." Sylvia Rivera, also a

Product Manager, stated that she was resigning due to "[t]he

atmosphere of instability and uncertainty that has prevailed in

L&F during the last few weeks."

After receiving these letters, Zapata spoke with the

four employees. Each expressed different reasons for leaving

the company, but none of the reasons stated to Zapata concerned

his own management style. Several of the employees indicated

that they were leaving the company due to the company’s new

pricing policy, which had resulted in monetary losses to the

Puerto Rico operation. In light of these four resignations,

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the review scheduled for September 26, 1993, did not take place.

The four resignations eliminated the top level of management

under Zapata in the Division. Zapata had planned to eliminate

two of the positions as part of his reengineering plan, but not

all four.

Caught by surprise by the four employees' resignation

letters, L&F sent its Vice President of Human Resources, Gary

Pearl, and Peter Black to Puerto Rico. Pearl and Black

interviewed those four employees and others. Black told Zapata

that the four employees were "renegades." Black also said they

had a "tough situation." Black did not, however, say what the

four employees had told him. After the interviews, Pearl and

Black recommended to Gallagher that Zapata be terminated

immediately. Pearl stated that he was told by the four

employees that Zapata’s management style was deficient and did

not foster an effective work atmosphere. Even more seriously,

Pearl stated that he was told Zapata "implemented plans contrary

to stated marketing and sales philosophies and strategies of the

parent company."

Gallagher agreed to terminate Zapata. Gallagher, who

had approved the hiring and promotion of Zapata in earlier

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years, and who thought Zapata's performance had been very good,

said at deposition:

The organization in Puerto Rico had resigned in
a major and surprising move with a letter to Ramon
that was faxed up to our offices from several of the
senior managers, which indicated that they, the
organization, had lost confidence in Ramon as their
leader and didn’t want to work for the company any
more.
Obviously, this was a major concern to us, a
surprise, and as I recall, Peter Black and Gary Pearl,
who was vice president of HR, called down there,
talked to some people and they went down there
immediately, and in discussions with the people found
out that the management style of Mr. Zapata was
abusive, disrespectful, to the point that these people
were very unhappy and decided to leave, and from what
we could tell, the organization had lost confidence in
Ramon; he was not managing the way we wanted our
managers to manage.

Zapata was told the news on September 28, 1993. He

says he was given no reason for his termination. He was given

a severance package which included payment of his full regular

salary for six months. A September 27, 1993 letter addressed to

Black, and signed by more than twenty L&F employees, expressed

support for and solidarity with Zapata.

Faced with vacancies in the top management, L&F moved

a long-term manager within the corporate family, Kevin Dunn, in

to oversee the Caribbean and Mexican operations within a few

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months of Zapata's termination. Dunn had been Vice President of

Marketing of consumer products for L&F, and he took the position

of Regional Director for the Caribbean, Puerto Rico and Mexico

with L&F. The Puerto Rican and Mexican markets were later

separated and a Puerto Rican, Alberto Fernández Comas, was named

General Manager of the Puerto Rican market. Within a year, L&F

Products itself was sold.

II.

Before the district court, this case was governed by

the burden-shifting framework set out in McDonnell Douglas Corp.

v. Green, 411 U.S. 792, 802-05 (1973).

Under the McDonnell Douglas framework, once the

plaintiff has met the low standard of showing prima facie

discrimination, the employer must articulate a legitimate

nondiscriminatory reason in response. Texas Dep't of Comty.

Affairs v. Burdine, 450 U.S. 248, 252-53 (1981). Once that

reason is articulated, the presumption of discrimination drops

out of the picture, St. Mary's Honor Ctr. v. Hicks, 509 U.S.

502, 511 (1993), the McDonnell Douglas framework with its

presumptions and burdens disappears, and the sole remaining

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issue is of discrimination vel non. Reeves v. Sanderson

Plumbing Prods., Inc., 530 U.S. 133, 142 (2000); Melendez-

Arroyo v. Cutler-Hammer De P.R. Co., Inc., 273 F.3d 30, 33 (1st

Cir. 2001).

The McDonnell Douglas framework having dropped out of

the case, "the ultimate burden is on [Zapata] to persuade the

trier of fact that [he was] treated differently because of [his

national origin]." Thomas v. Eastman Kodak Co., 183 F.3d 38, 56

(1st Cir. 1999). On summary judgment, the question is whether

plaintiff has produced sufficient evidence that he was

discriminated against due to his national origin to raise a

genuine issue of material fact. Melendez-Arroyo, 273 F.3d at

33; Dominguez-Cruz v. Suttle Caribe, Inc., 202 F.3d 424, 430-31

(1st Cir. 2000).

Reeves reinforced the prior law in this circuit that

even if the trier of fact disbelieves the nondiscriminatory

explanation given by the employer, the trier is not compelled to

find that the real reason was discrimination. 530 U.S. at 147;

Thomas, 183 F.3d at 57. That is because the ultimate question

is not whether the explanation was false, but whether

discrimination was the cause of the termination. We have

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adhered to a case by case weighing. Thomas, 183 F.3d at 58.

Nonetheless, disbelief of the reason may, along with the prima

facie case, on appropriate facts, permit the trier of fact to

conclude that the employer had discriminated. Reeves, 530 U.S.

at 146-47; Thomas, 183 F.3d at 57 ("[E]vidence showing that the

employer's articulated reason is false" can be sufficient to

overcome the third stage in the McDonnell Douglas framework, but

"there can be no mechanical formula . . . . everything depends

on the individual facts."). Ultimately, the question is one of

the sufficiency of plaintiff’s evidence. Id. at 61. As the

Supreme Court said in Reeves:

[A]n employer would be entitled to judgment as a
matter of law if the record conclusively revealed some
other, nondiscriminatory reason for the employer's
decision, or if plaintiff created only a weak issue of
fact as to whether the employer's reason was untrue
and there was abundant and uncontroverted independent
evidence that no discrimination had occurred.

530 U.S. at 148. The facts of each case are important. Thomas,

183 F.3d at 57.

We dispose of a preliminary matter where Zapata argues

that the magistrate judge used an erroneous standard. Zapata argues

that the magistrate judge incorrectly relied on Mesnick v. Gen. Elec.

Co, 950 F.2d 816 (1st Cir. 1991), in analyzing the question of pretext

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by focusing on the employer's belief about the truth of its stated

reason. In part, Mesnick states that in analyzing whether an

"employer's proffered reason is actually a pretext for discrimination

. . . . a court's 'focus must be on the perception of the

decisionmaker,' that is, whether the employer believed its stated

reason to be credible." 950 F.2d at 823-24 (quoting Gray v. New England

Tel. and Tel. Co., 792 F.2d 251, 256 (1st Cir. 1986)) (emphasis

omitted).

We agree that the employer might believe its stated

reason for its action and honestly believe that the reason was

nondiscriminatory, while the jury might find that the same

reason was honestly held but conclude that it constituted

discrimination (e.g., stereotyping). To that extent, the

employer's good faith belief is not automatically conclusive;

but this refinement on Mesnick is likely to be rare and is in

any event irrelevant here. Conversely, there may be pretextual

explanations -- ones not honestly believed by the decisionmaker

-- which do not lead to liability because the actual unadmitted

reason still does not constitute discrimination.

With that clarification, we turn to the analysis of the

facts. Zapata's theory of discrimination was that this was a

glass-ceiling case: that at L&F a Puerto Rican could hold the

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title of General Manager but not the title of Regional Director.

The implications of the theory are that the company officials

engineered, or took advantage of, a situation where they could

terminate Zapata’s employment rather than promote him to

Regional Director. The proof, Zapata says, is that Dunn, an

Anglo, was named Regional Director, and he, Zapata, a Puerto

Rican, was not.

Plaintiff’s case resolves to three themes from the

evidence that he says permit the ultimate inference of

discrimination: one comment by Gallagher, the company president;

the fact that some months after Zapata's termination a non-

Puerto Rican assumed his duties, and held the Regional Director

title that Zapata had sought; and the fact that the company’s

stated reasons for his termination could be found to be untrue.

When these themes are moved from the abstract to the particulars

of the case, they prove to be unimpressive.

The Comment About Puerto Rico

Gallagher's comment is best analyzed in context.

Zapata sold L&F products in Puerto Rico at prices up to 30%

lower than prices charged to retail outlets in the mainland of

the United States. This led potential U.S. buyers to buy from

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secondary sellers in Puerto Rico (such as K-Mart), still at

lower prices than U.S. prices, thus diverting profits to third

parties. Concerned about the losses to its United States

markets, the company, on July 8, 1992, directly ordered Zapata

to raise prices to the same level as in the continental United

States. Zapata resisted but was again ordered to have the new

prices in place by September 1, 1992. Nonetheless, later in

August, Zapata again tried to get the company President, Michael

Gallagher, to change course because his sales in Puerto Rico

would decline if prices rose. An obviously frustrated Gallagher

responded "Fuck Puerto Rico . . . . We’ve got to change and

we’ve got to fix this situation, because we don’t want this

happening." The comment was clearly directed to Zapata’s view

that the company’s concerns about mainland market losses should

be subordinate to Zapata’s concern about his division. No

rational fact finder could, in this context, conclude that this

comment expressed discrimination against the company’s Puerto

Rican employees.

The Replacement

When the four top employees resigned and the company

fired Zapata, it was left without management for its Puerto

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Rican operations. In early 1994, a long-term company employee,

Kevin Dunn, was named Regional Director of L&F Products for the

Caribbean and Mexico. Dunn thus took over Zapata’s

responsibilities, and received the title that Zapata wanted.

Dunn, however, was already a Vice President at L&F, a

position higher in rank than the one of Regional Director, when

the company looked to him to fill the void at L&F. Under these

circumstances, we think no rational inference of discrimination

against Puerto Ricans can be drawn from Dunn’s assumption of

these responsibilities as Regional Director. Further, when a

new permanent manager was named to cover the Puerto Rican

market, it was Alberto Fernández Comas, a Puerto Rican who was

hired from outside the company.

The Stated Reason as Pretext

An assertion of pretext requires an examination of the

employer’s articulated reason for termination. Where and when

that reason is articulated has significance. In Dominguez-Cruz

v. Suttle Caribe, Inc., 202 F.3d 424 (1st Cir. 2000), this court

found sufficient evidence of pretext to survive summary judgment

where the reasons given at termination and in contemporaneous

documents appeared to be inconsistent with the defendant's

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answer to the complaint and with deposition testimony. Further,

the depositions themselves appeared to be inconsistent. All of

this was buttressed by extrinsic evidence that undercut the

proffered reason. Id. at 431-32.

In this case, by contrast, no reasons were given at

termination and no contemporaneous documents stating a reason at

the time of termination have been introduced. No reasons are

given in the answer to the complaint, save for a pleading that

plaintiff was terminated for just cause. We thus turn to the

explanations that the managers involved gave at their

depositions for terminating Zapata. Those explanations,

described above, are themselves consistent and not contradicted

by either contemporaneous documents or statements made at

termination, or statements made later. Further, the

explanations are quite credible in light of the preceding

events.

Zapata argues that the four L&F employees who resigned

right before his termination did not make negative comments

about his management style to the decisionmakers, because

neither the four employees nor the management voiced these

complaints to him. That is not a serious argument. It is human

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nature for a person not to tell someone to his face about

complaints he has just made about him. And management did not

give him any reasons, he says.

More serious is the argument that nothing in the prior

work history suggests that Zapata was a poor manager. A trier

of fact could reasonably think that this raises questions about

the sudden emergence, albeit in a time of extreme pressure, of

a managerial style problem on Zapata’s part. On the other hand,

a trier of fact could much more readily conclude that the

employer’s explanation was not a pretext, was quite true,3 and

was reinforced by two facts: four top employees had just

resigned rather than work with Zapata in a difficult period, and

the company well knew Zapata had been balking at the directives

from the parent company.

The question on summary judgment is whether the slight

suggestion of pretext present here, absent other evidence from

which discrimination can be inferred, meets plaintiff’s ultimate

burden. We hold it cannot. This case fits into the category

3 Zapata also did not, by deposition testimony or
affidavits from the four former employees, refute the
management's assertions about the employees' reasons for
resignation.

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Reeves described of plaintiff creating (at best) a weak issue of

fact as to pretext on the face of strong independent evidence

that no discrimination occurred. 530 U.S. at 148. Considering,

as Reeves, 530 U.S. at 158, mandates, the strength of

plaintiff's prima facie case, the probative value of the proof

that the employer's explanation is false, and other evidence

supporting the employer's case, the employer is entitled to

judgment as a matter of law.

Affirmed.

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