United States Court of Appeals,
Fifth Circuit.
No. 93-8632.
Bruce T. SHATTUCK, Plaintiff-Appellee/Cross-Appellant,
v.
KINETIC CONCEPTS, INC., Defendant-Appellant/Cross-Appellee.
April 13, 1995.
Appeal from the United States District Court for the Western
District of Texas.
Before POLITZ, Chief Judge, GARWOOD and BENAVIDES, Circuit Judges.
POLITZ, Chief Judge:
Kinetic Concepts, Inc. appeals an adverse judgment on a jury
verdict in Bruce T. Shattuck's age discrimination suit. Shattuck
cross appeals the grant of summary judgment dismissing his state
law claims and the denial of front pay. Finding no reversible
error, we affirm.
Background
In 1984 KCI, a marketer of medical products, hired Shattuck,
then 52 years old, as a product manager. Shattuck invented a new
device for KCI and thereafter was promoted to Director of National
Account Sales. In that capacity he secured accounts with the
majority of large hospital groups, winning a special company award
for his efforts. Younger people were placed under Shattuck for
guidance and training. In due course one of these younger
employees, 37-year-old Willie Williams, was promoted over Shattuck
to Executive Director of National Accounts. According to Shattuck,
John Bardis, a senior vice-president, explained that the new
1
position was too demanding for someone of Shattuck's age and that
the younger Williams was better able to "come in early and stay
late." Shattuck continued in his assignment, earning a year-end
bonus in 1989 and a raise in September 1990, for which he thanked
his superior, Williams, with a memorandum citing his earlier
conversation with Bardis about "dinosaurs," as he considered he was
viewed, and promising to step aside when and if his age became an
impediment to his job performance. Williams forwarded the memo to
Bardis; two weeks later Shattuck was discharged, purportedly as
part of a reduction in force.
After satisfying administrative prerequisites, Shattuck
brought suit under the Age Discrimination in Employment Act, 29
U.S.C. §§ 621 et seq., appending state law claims thereto. The
district court granted summary judgment for KCI on the state law
claims but Shattuck prevailed at trial on the age discrimination
claim, obtaining liquidated damages upon the jury's finding that
the ADEA violation was willful. After unsuccessfully seeking
post-judgment relief, KCI appealed. Shattuck cross appealed the
dismissal of his state law claims and the denial of front pay.
Analysis
1. After-acquired evidence.
This case requires application of the Supreme Court's recent
teachings in McKennon v. Nashville Banner Publishing Co.1 that
evidence of employee wrongdoing acquired by the employer after
termination does not provide immunity from liability but may affect
1
--- U.S. ----, 115 S.Ct. 879, 130 L.Ed.2d 852 (1995).
2
the remedy. On the eve of trial KCI learned that Shattuck had
falsely represented on his employment application that he was a
college graduate when in fact he had completed less than a year of
college work. The company maintains that it would not have hired
Shattuck had it known of this falsification and would have fired
him upon its discovery.
"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."2 KCI presented no such evidence. Rather, it
contends that the relevant question is whether it would have hired
Shattuck had it known he did not have a college degree. As proof
thereof, it cites Shattuck's testimony that he falsified the
application because he felt such would be a requirement for getting
hired. This is not sufficient; to hold otherwise would eviscerate
McKennon. We are persuaded that the pertinent inquiry, except in
refusal-to-hire cases, is whether the employee would have been
fired upon discovery of the wrongdoing, not whether he would have
been hired in the first instance.3 The rationale underlying
consideration of after-acquired evidence is that the employer
should not be impeded in the exercise of legitimate prerogatives
2
Id. at ----, 115 S.Ct. at 886-87.
3
The McKennon Court applied a "would have been fired"
standard but did not reach the question presented herein because
the plaintiff's wrongdoing—theft of company documents—did not
occur until after hiring.
3
and the employee should not be placed in a better position than he
would have occupied absent the discrimination.4 Cutting off relief
at the time that a legitimate discharge would have occurred
accomplishes these ends. Merely asking whether the employee would
have been hired fails to recognize that an employer may retain an
individual who has performed successfully, despite lack of formal
qualification.5 KCI did not establish that it would have
discharged Shattuck upon discovering that he was not a college
graduate. It therefore cannot obtain the relief it seeks solely on
account of its after-acquired evidence.
2. Sufficiency of the evidence and other evidentiary matters.
KCI also challenges the sufficiency of the evidence. It
discounts Shattuck's testimony that Bardis cited age as the reason
for not naming him executive director, contending that a
failure-to-promote claim was time-barred. Nonetheless, Bardis's
explanation was relevant to the issue of the motivation for
Shattuck's subsequent discharge.6 Shattuck also testified to a
post-termination conversation in which Williams attributed the
firing to Shattuck's failure to conform to a youthful corporate
4
Id.
5
Our decision is consistent with that of our Seventh Circuit
colleagues in Washington v. Lake County, Ill., 969 F.2d 250 (7th
Cir.1992). We are not aware that any other circuit has discussed
this precise issue, although the Eighth Circuit, after noting
Washington, inquired whether the employee would have been hired.
Welch v. Liberty Machine Works, Inc., 23 F.3d 1403 (8th
Cir.1994).
6
See Cortes v. Maxus Exploration Co., 977 F.2d 195 (5th
Cir.1992) (time-barred conduct may be relevant to show current
discrimination).
4
image and to the memorandum reiterating Bardis's prior age-related
comments; Shattuck's son likewise testified to an admission by
Williams that the firing was motivated by age. Contrary to KCI's
arguments, these were not mere figures of speech at which we have
looked askance, but direct statements of motivation.7 The
testimony was amenable to the usual challenge on grounds of
interest, but that is a jury question which was resolved in
Shattuck's favor. There also was evidence that Shattuck was not
targeted for layoff until after he had written the fateful memo to
Williams. KCI contends that discharge on account of the memo is
not necessarily equivalent to discharge on account of age;
hypothetically, Bardis could have been angry because the memo was
untrue. That may be so but the testimony also would support an
inference that Bardis acted because Shattuck challenged his
attitude about age. In reviewing a sufficiency challenge, we must
draw all reasonable inferences in favor of the verdict.8
In addition, Shattuck presented the testimony of Larry
Simonsen, KCI's former chief of Human Resources, and Tomas Diaz,
7
KCI's reliance on Simmons v. McGuffey Nursing Home, Inc.,
619 F.2d 369 (5th Cir.1980), is misplaced. In Simmons, we
affirmed summary judgment for the defendant where the
uncontradicted evidence established that the plaintiff was fired
because of strained personal relations with certain board
members, to-wit, his former wife and her sisters, notwithstanding
testimony by the plaintiff's daughter that one board member
indicated a preference for a younger replacement. There, the
age-related reference related only to the new hire. Here, the
age-related statements bear directly on the reason that Shattuck
was discharged.
8
Boeing Co. v. Shipman, 411 F.2d 365 (5th Cir.1969) (en banc
).
5
formerly a member of the Human Resources staff. Simonsen
reiterated his concern about the impact of the reduction-in-force
on older employees and other protected groups within the workforce,
and Diaz reported a statement by Bardis that a particular job
applicant was too old. KCI strenuously claims error in the
admission of the Diaz and Simonsen testimony. To the extent that
KCI complains of testimony about race or gender bias, such
testimony was assiduously excluded by the district court and the
isolated instances in which references were made did not taint the
verdict. To the extent that KCI contests the admission of evidence
of age discrimination against other employees, it misconstrues the
law. There is no proscription of evidence of discrimination
against other members of the plaintiff's protected class; to the
contrary, such evidence may be highly probative, depending on the
circumstances.9 The Bardis statement falls in that category. Diaz
also testified to a similar statement by a district manager outside
Shattuck's chain of command; that statement, further afield but
merely cumulative, did not prejudice KCI's substantial rights.
The evidence amply supports not only a finding of
9
See, e.g., Lindsey v. Prive Corp., 987 F.2d 324 (5th
Cir.1993) (finding evidence of age discrimination in the fact
that three other dancers over 40 were dismissed at the same time
as plaintiff); Reeves v. General Foods Corp., 682 F.2d 515 (5th
Cir.1982) (testimony of another older employee who was forced to
resign bolstered the inference of age discrimination); accord
Visser v. Packer Engineering Associates, Inc., 924 F.2d 655 (7th
Cir.1991) (en banc ) (fellow employees may testify to racial
slurs and acts of racial discrimination against them, subject to
limitations designed to prevent the trial from fragmenting into
multiple mini-trials); Hawkins v. Hennepin Technical Center, 900
F.2d 153 (8th Cir.) (same), cert. denied, 498 U.S. 854, 111 S.Ct.
150, 112 L.Ed.2d 116 (1990).
6
discrimination but also of willfulness. As the Court recently
reaffirmed in Hazen Paper Co. v. Biggins,10 a violation of the ADEA
is willful if the employer either knew or showed reckless disregard
for the fact that its conduct was prohibited by statute. Viewed in
the light most favorable to the verdict, the evidence herein
establishes that KCI knew age discrimination was unlawful but,
notwithstanding, discharged Shattuck because of his age without
even colorable grounds to believe the ADEA did not apply.
3. Damages.
KCI launches several attacks on the $159,467 damage award.
At the threshold it disingenously argues that back pay should be
ended as of the date of Shattuck's resignation from a higher paying
job at the Mediscus Group, Inc., a KCI competitor. It neglects to
mention that the resignation was prompted by a letter from KCI's
attorneys seeking compliance with a noncompetition agreement it had
with Shattuck. KCI also cites numerous offsets that it contends
the jury failed to consider. We agree with the district court that
KCI's calculations omit several of Shattuck's losses, including
lost wages during 1990 and medical and other compensable expenses.
We are not persuaded that the award was excessive.
Shattuck cross appeals the district court's decision to
offset front pay of $112,606 by the award of $159,467 for
liquidated damages, resulting in a zero figure for the front pay
10
--- U.S. ----, 113 S.Ct. 1701, 123 L.Ed.2d 338 (1993).
7
award. Relying on Seventh Circuit cases,11 Shattuck argues that the
availability of liquidated damages is relevant to the decision
whether to award front pay only if, unlike the case at bar, the
front pay award is speculative. We recently reaffirmed the
principle that "a substantial liquidated damage award may indicate
that an additional award of front pay is inappropriate or
excessive" without adopting a bright-line limitation.12 The
district court made the appropriate evaluation and we perceive no
abuse of discretion.
4. KCI's remaining assignments of error.
KCI raises three objections to the jury charge. Only one
warrants mention. KCI assigns error to the omission of an element
of a prima facie reduction-in-force case articulated in Williams v.
General Motors Corp.13—whether the plaintiff was qualified to assume
another position at the time of discharge. We do not agree. When
an employment discrimination case reaches the fact finder, the
pertinent inquiry is whether the plaintiff has proven
discrimination, not whether he has made a prima facie case.14
11
Price v. Marshall Erdman & Associates, Inc., 966 F.2d 320
(7th Cir.1992); E.E.O.C. v. Century Broadcasting Corp., 957 F.2d
1446 (7th Cir.1992); Hybert v. Hearst Corp., 900 F.2d 1050 (7th
Cir.1990).
12
Hadley v. VAM P T S, 44 F.3d 372, 376 (5th Cir.1995),
quoting Walther v. Lone Star Gas Co., 952 F.2d 119, 127 (5th
Cir.1992).
13
656 F.2d 120 (5th Cir.1981), cert. denied, 455 U.S. 943,
102 S.Ct. 1439, 71 L.Ed.2d 655 (1982).
14
See, e.g., Armstrong v. City of Dallas, 997 F.2d 62 (5th
Cir.1993).
8
Finally KCI contests the denial of its motion for a mistrial
after a member of the jury venire on voir dire recounted, within
the hearing of the entire panel, his experience with layoffs.
Although the offending individual was removed for cause, KCI
maintains that his comments tainted the entire jury. We perceive
no abuse of discretion. The comments were not presumptively
prejudicial15 and KCI requested neither questioning of the jurors
to determine any taint16 nor an admonition to disregard the
comments.
5. Summary judgment on the state law claims.
Shattuck contends that the district court erred by deciding
KCI's motion for partial summary judgment without affording him an
opportunity to respond. In fact, Shattuck chose not to respond
because the motion was filed late. At the district court's
invitation, Shattuck filed a motion for reconsideration; after
considering his arguments, the court denied the motion. Shattuck
suffered no prejudice from the procedural complications.
On the merits, Shattuck did not present a triable issue with
respect to the state law claims. His claim of intentional
infliction of emotional distress founders because KCI's actions do
not rise to the level of extreme and outrageous conduct. His
15
See United States v. Webster, 750 F.2d 307 (5th Cir.1984)
(the presumption of prejudice generally is reserved for jury
panels tainted by outside influence, and perhaps for premature
juror discussions about guilt or innocence), cert. denied, 471
U.S. 1106, 105 S.Ct. 2340, 85 L.Ed.2d 855, 471 U.S. 1106, 105
S.Ct. 2341, 85 L.Ed.2d 856 (1985).
16
See White v. Smith, 984 F.2d 163 (6th Cir.), cert. denied,
--- U.S. ----, 113 S.Ct. 2367, 124 L.Ed.2d 273 (1993).
9
failure to establish a factual dispute about KCI's intentions or
its right to enforce the noncompetition agreement bars the claim
for tortious interference with contract;17 even if the agreement
was overbroad, it was subject to reformation.18 The duress claim
fails for similar reasons.19
AFFIRMED.
17
Sakowitz, Inc. v. Steck, 669 S.W.2d 105 (Tex.1984), as
modified by Sterner v. Marathon Oil Co., 767 S.W.2d 686
(Tex.1989).
18
Tex.Bus. & Comm.Code §§ 15.50-15.51.
19
Griffith v. Geffen & Jacobsen, P.C., 693 S.W.2d 724
(Tex.App.1985) (a threat to bring suit does not constitute duress
if the defendant has a legal right to do so).
10