Juarez v. ACS Government Solutions Group, Inc.

F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
JAN 8 2003
UNITED STATES COURT OF APPEALS
PATRICK FISHER
Clerk
TENTH CIRCUIT

FELIPE G. JUAREZ,

Plaintiff - Appellee,

v.
No. 02-6069
ACS GOVERNMENT SOLUTIONS
GROUP, INC., and AFFILIATED
COMPUTER SERVICES, INC.,

Defendants - Appellants.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF OKLAHOMA
(D.C. No. CIV-00-1703-L)

Robert G. Chadwick, Jr. (Jeff A. Taylor, Oklahoma City, Oklahoma, with him on
the briefs) of Chadwick, Taylor & Eisenbraun, Addison, Texas, for Defendants-
Appellants.

Raymond C. Durbin, Oklahoma City, Oklahoma, for Plaintiff-Appellee.

Before SEYMOUR, McKAY and MURPHY, Circuit Judges.

McKAY, Circuit Judge.
 This employment discrimination action stems from a reduction in force

(RIF) in which Appellant terminated several employees including Appellee. As

of May 25, 2000, Appellant ACS employed fifteen skill-level-sixteen computer

operators at Fort Sill Army Base in Lawton, Oklahoma, pursuant to a contract

with the United States. On May 25, 2000, the Chief of Support Division notified

the ACS Group Manager, Mr. Odland, and the ACS Site Manager, Mr. Nesmith,

that a total of nine positions would need to be eliminated by June 5, 2000. Five

of these positions were classified as skill-level-sixteen computer operators.

To accomplish the RIF, Appellant used a spreadsheet compiled by the

Human Resources Department with six merit-based categories: accuracy of

documentation, ability to follow established procedures,

communications/teamwork, reliability, timely completion of assignments, and

attendance/tardiness. The ratings were based on the prior six months and did not

consider any past performance reviews. Appellant claims that the data from the

merit spreadsheet were the sole criteria used to determine which employees would

be terminated. ACS states that the Group Manager made the final decisions based

solely on the merit spreadsheet. However, Appellee presented evidence that the

decision was made by a committee and that it was based on longevity and job

performance.

Appellee also presented evidence that the original merit spreadsheet

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provided by Human Resources had two additional categories, tenure and recent

performance review score. ACS claimed that these two categories were only for

information-review and tie-breaking purposes. There was conflicting evidence

about whether a tie occurred. Finally, the final form contains a justification at the

bottom, which was suggested by Human Resources, stating that all five computer

operators selected for termination “were not self-starters.” Aplt. App., Vol. II, at

342.

Appellee Felipe Juarez, a Hispanic computer operator, began working for

ACS in October 1995. During his employment, ACS consistently gave him high

scores in formal performance evaluations. He received ratings of mostly

“outstanding” and “exceeds requirements” in evaluation categories. In his last

comprehensive performance evaluation, his immediate supervisor specifically

stated that “Mr. Juarez is a self starter.” Aple. Supp. App., at 12.

On June 5, 2000, Messrs. Odland and Nesmith told Appellee that he was

being terminated due to a layoff. Appellee presented evidence that ACS had

retained non-Hispanic computer operators with less experience and tenure than

Appellee and who had lower recent performance evaluations. Appellee also

presented evidence that Mr. Nesmith had made derogatory remarks about

Mexicans in the past.

A jury reached a verdict in favor of Appellee on his claims of race, color,

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and national-origin discrimination under Title VII and awarded him $22,500 in

back pay and $250,000 in punitive damages. Appellant filed a Motion for

Judgment as a Matter of Law, New Trial and/or Remittitur. The district court

denied the motion in its entirety.

The issues raised on appeal are: (1) whether the district court properly

denied Appellant’s JMOL Motion to overturn the jury verdict granting Appellee

compensatory damages for his claim of intentional discrimination on the basis of

race, color, or national origin, and (2) whether the district court properly denied

Appellant’s JMOL Motion to overturn the jury verdict granting Appellee punitive

damages for his claim that Appellant acted with malice or reckless indifference

under 42 U.S.C. § 1981a. We review de novo the district court’s denial of a Rule

50 JMOL motion asking whether there is evidence upon which a jury could return

a verdict in favor of the party opposing the motion. Fed. R. Civ. P. 50(a); Griffin

v. Steeltek, Inc., 261 F.3d 1026, 1028 (10th Cir. 2001).

“A § 1981 or § 1982 plaintiff must prove by a preponderance of the

evidence that the defendant intentionally discriminated against him or her on the

basis of race. . . . Such proof may come from either direct or indirect evidence.”

The Guides, Ltd. v. The Yarmouth Group Prop. Mgmt., Inc., 295 F.3d 1065, 1073

(10th Cir. 2002). At trial, Appellee proved a prima facie case of intentional

discrimination. The required elements of a prima facie case of intentional race

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discrimination involving an RIF are (1) a plaintiff was within the protected group,

(2) plaintiff was doing satisfactory work, (3) plaintiff was discharged despite the

adequacy of his work, and (4) there is some evidence that the employer intended

to discriminate against the plaintiff in reaching its RIF decision. Beaird v.

Seagate Tech., Inc., 145 F.3d 1159, 1165 (10th Cir. 1998). The fourth element

can be satisfied by showing that the employer could have retained plaintiff but

instead chose to keep someone of a different race. Id. at 1167. We note that the

Supreme Court’s decision in Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S.

133 (2000), which underscored the significance of the prima facie inquiry not

only to the initial determination regarding the employer’s burden of production,

but also to the ultimate determination of whether the evidence supports a finding

of intentional discrimination did not undermine validity of the Beaird decision.

Appellee’s evidence showed that he was a Hispanic, Mexican-American;

that he was qualified for the position of computer operator and performed his job

duties in a satisfactory manner; that he was terminated during a reduction in

force; and that ACS retained other computer operators who were not Hispanic or

Mexican-American and who had less experience, less tenure, and lower prior

performance evaluations. Appellee introduced evidence that ACS retained two

computer operators that were frequently tardy or absent and one that slept on the

job. Appellee also introduced evidence that a retained computer operator was

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drinking on the job.

Appellee also presented evidence at trial that the spreadsheet used to justify

the RIF decision was inaccurate and did not contain the actual selection criteria.

The jury heard contradictory evidence about whether or not there was a tie

between certain employees selected for termination and about who made the

decision to include Appellee in the RIF. Additionally, despite language on the

spreadsheet that Appellee and others selected for termination were not self-

starters, Appellee’s most recent performance evaluation identified him as being a

self-starter.

Appellee further presented evidence that Mr. Nesmith, ACS’s Site Manager

in charge of both operations and human resources at the facility where Appellee

worked, had made derogatory remarks about Mexican employees shortly before

the RIF. Although ACS argues that Mr. Nesmith had no role in the selection of

Appellee for termination, Appellee presented sufficient evidence allowing the jury

to reasonably infer that Mr. Nesmith actually did participate in the termination

decision.

Based on the evidence presented by Appellee, the jury could determine that

the shifting reasons given by ACS for Appellee’s discharge were pretextual and

that ACS’s self-proclaimed merit spreadsheet, devised by its line management and

Human Resources Department, was fraudulent and merely a sham used to justify

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Appellee’s termination. Therefore, we hold that the evidence was sufficient to

support the jury’s findings that ACS intentionally discriminated against Appellee

because of his race, color, and/or national origin.

We next turn to the issue of whether the district court correctly denied

ACS’s motion for judgment as a matter of law as to the $250,000 in punitive

damages awarded to Appellee. “Whether sufficient evidence exists to support

punitive damages is a question of law reviewed de novo.” The Guides, 295 F.3d

at 1077 (quoting Fitzgerald Mountain States Tel. & Tel. Co., 68 F.3d 1257, 1262

(10th Cir. 1995)).

Punitive damages are available under the Civil Rights Act of 1991, Title

VII, if the plaintiff proves that an employer engaged in intentional discrimination

“with malice or with reckless indifference to the federally protected rights of an

aggrieved individual.” 42 U.S.C. § 1981a(b)(1) (1994).

[The] standard for punitive damages cannot be satisfied by a showing of
intentional discrimination alone. Otherwise, every jury verdict in a
successful § 1981 or § 1982 claim would include an award of punitive
damages. Instead, . . . a plaintiff must prove that the defendant acted with
malicious, willful or gross disregard of a plaintiff’s rights over and above
intentional discrimination.

The Guides, 295 F.3d at 1077; see also Kolstad v. American Dental Ass’n, 527

U.S. 526, 534 (1999) (“Congress plainly sought to impose two standards of

liability–one for establishing a right to compensatory damages and another, higher

standard that a plaintiff must satisfy to qualify for a punitive award.”). A

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plaintiff must present evidence that the defendant intentionally discriminated

against him on the basis of race with malice or “in the face of” a perceived risk

that its actions would violate federal law. See Kolstad, 572 U.S. at 535-36 (“The

employer must act with malice or with reckless indifference to the [plaintiff’s]

federally protected rights.”).

Applying these standards, we hold that Appellee presented sufficient

evidence that ACS terminated Appellee despite a recognized risk of violating

Title VII. Appellee presented evidence that Mr. Nesmith and other supervisory

employees had received some EEO training and that Mr. Nesmith was the Equal

Employment Opportunity Officer at the Fort Sill site. In conjunction, Appellee

presented evidence that could lead the jury to conclude that Mr. Nesmith was

involved in the RIF decision.

In addition, Appellee presented evidence of cover-up after the

discriminatory action. Appellee introduced evidence that the Human Resources

Department actively participated with management-level employees to cover up

the discriminatory discharge of Appellee by giving a false reason for his

discharge. Even though cover-up after the fact does not necessarily import

previous evil intent, in the instant case, the jury could infer that the cover-up was

planned prior to the discriminatory discharge.

Based on the evidence presented, the jury could determine that the merit

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spreadsheet was used merely in an attempt to justify the termination of certain

individuals. Even though eight categories were supplied by Human Resources,

ACS chose to use only six of those categories in rating employees. Aplt. App.,

Vol. II, at 200. The two categories supposedly not used in the RIF decision were

tenure and past performance evaluation score. The jury could infer that these

categories were intentionally excluded in an attempt to justify terminating

Appellee.

Appellee also presented proof that ACS’s Human Resources Department

failed to provide more detailed instructions and guidelines in the RIF or to review

and monitor the RIF selection process. The totality of the evidence allowed the

jury to determine “that the defendant acted with malicious, willful or gross

disregard of a plaintiff’s rights over and above intentional discrimination.” The

Guides, 295 F.3d at 1077.

For the foregoing reasons, the decision of the district court is AFFIRMED.

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