United States Court of Appeals
Fifth Circuit
F I L E D
UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT September 3, 2003
Charles R. Fulbruge III
Clerk
02-10844
JIMMY PALASOTA,
Plaintiff-Appellant,
VERSUS
HAGGAR CLOTHING CO.,
Defendant-Appellee,
Appeal from the United States District Court
for the Northern District of Texas
Before DAVIS, SMITH, and DUHÉ, Circuit Judges.
PER CURIAM:
The sole issue before us in this age discrimination in
employment case is whether the district court erred in granting
Judgment as a Matter of Law to Defendant, Haggar Clothing Co.
(“Haggar”) after the jury returned a verdict in favor of Plaintiff
Jimmy Palasota (“Palasota”). Our review of the record convinces us
that the district court did err. Accordingly, we reverse the
judgment of the district court, reinstate the jury verdict in favor
of Palasota and remand for further proceedings.
FACTS AND PROCEDURAL HISTORY
1
Palasota was employed as a Sales Associate by Haggar for
twenty-eight years. When terminated on May 10, 1996, he was fifty-
one years old. For most of his career, Palasota oversaw one of
Haggar’s key accounts, Dillard’s Department Stores.1 Palasota also
serviced eight J.C. Penney’s key accounts and various trade
accounts. He was considered an “outstanding” employee who “had
great relationships with customers” and “was second to none in his
sales professionalism.” R. 29:37, 43.
In the 1990s, Haggar’s management sought to portray a younger
image for the company. R. 30:147. Haggar created the Retail
Marketing Associate (“RMA”) program, and transferred many of the
sales functions previously performed by Sales Associates to the RMA
employees.2 Indeed, ninety-five percent of the RMAs were females
in their late twenties and early thirties, whereas ninety-five
percent of the Sales Associates were males between forty-five and
fifty-five years of age. R. 29:57.
1
A key account is a high volume sales account that Haggar
assigns only to its best Sales Associates. Unlike a high-volume
key account, a trade account territory is made up of numerous
lower-volume stores.
2
The former head of the J.C. Penney account for Haggar testified
that “there was no difference” between the Sales Associates and the
RMAs; individuals in both positions “were being asked to sell
clothing for the Haggar Clothing Company,” and the transfer of the
sales function “was a continuing plan” to move the Sales
Associate’s responsibilities to the RMAs, who “were all much
younger, primarily female gender.” R. 29:45; 32:471-72; 32:510.
Roxanne Jilek, a former RMA, stated that RMAs assumed the sales
duties of the Sales Associates, resulting in an elimination of the
latter’s position. R. 30:206-07.
2
From 1993 to 1996, Haggar hired between 32 and 51 sales
people, all of them RMAs and all, but four, of whom were under
forty years of age. R. 29:73-74. During this same period, Haggar
terminated 17 Sales Associates, all of whom were males over forty
years of age. Plaintiff Ex. 81-85. Between December 1, 1996, and
March 31, 1998, Haggar terminated 12 Sales Associates forty years
of age or older, including Palasota, while hiring 13 new RMAs, only
one of whom was over forty years of age. Plaintiff Ex. 67, 68.
Haggar’s chief financial officer testified that the increase in the
number of RMAs and the decrease in the number of Sales Associates
were related and offset each other in the company’s sales budget.
R. 32:508-09.
In late 1995, Haggar lost its account with Dillard’s which
comprised approximately 85% of Palasota’s commissions. National
Sales Manager James Thompson created a new territory consisting of
J.C. Penney stores in Houston, San Antonio, and Austin, that would
have generated 85% to 90% of Palasota’s 1995 commission amount. R.
30:169; 32:479. However, Thompson left Haggar in December of 1995.
Palasota contends that Thompson’s replacement, Alan Burks, and Vice
President of Sales/Casual Tim Lyons, refused to grant him the
territory proposed by Thompson, relegating him to less lucrative
trade accounts in East Texas and Louisiana.3 R. 31:325.
3
Thompson testified that this territory was not appropriately
matched to Palasota’s background and experience level, R. 32:482
and that Palasota was the best candidate to assume the accounts of
the J.C. Penney stores located in San Antonio, Houston, and Austin.
3
On February 23, 1996, Lyons told Palasota that he could accept
the trade account territory or a severance package.4 Supp 2:5; R.
31:300-01. Palasota declined the severance offer and refused to
resign. On February 23, 1996, after the meeting, Lyons sent a memo
to four other members of Haggar’s management. After noting
Palasota’s 28 years of service and his refusal to accept the
severance package, Lyons wrote that “we have approximately 14
associates with this same amount of tenure who are in their early
fifties or older. I strongly recommend that Human Resources look at
developing a severance package for these individuals. . . . This
could provide us the ability to thin the ranks in a fashion that
will create good will and ease the anxiety of this transition
period . . . .” The memo concluded that “[t]he end result will be
a sales organization that has its best people in a healthy account
environment . . . .” Lyons Dep. Ex. 16. Of the 14 associates
listed in the memo, all but two subsequently ended their employment
with Haggar. Supp. R. 2:16.
In March of 1996, without denying that the additional J.C.
Penney stores were available, Lyons informed Palasota that he would
R. 29:80; 32:482.
4
In response to Palasota’s concerns that the East Texas and
Louisiana territory would yield smaller commissions, Lyons
guaranteed Palasota, from January 1996 through may 1996, eighty
percent of his 1995 salary of $175,000. R. 31:328, 330; Supp 2:48,
49. Haggar contends this decision insulated Palasota from its
decision in the Fall of 1995 to pay its Sales Associates on
straight commission, without a minimum guaranteed salary.
4
be terminated. R. 31:301-02. On April 29, 1996, Palasota was
notified in writing that his position was being “eliminated” due to
a “reconfiguration of the sales force.” Plaintiff Ex. 9.
Following Palasota’s termination, other Sales Associates were given
the J.C. Penney account that Thompson had slated for Palasota, and
in 1997, these Sales Associates were terminated and replaced by
younger RMAs. R. 29:91-92; 33:692; Supp. R. 2:13-14.
Haggar portrays Palasota’s termination as an effective
resignation, resulting from his dissatisfaction with the low
commission yield of his new territory and the severance package
offer. Haggar notes that Palasota never told management that he
believed the company was treating him unfairly or that RMAs were
taking over his position. Palasota’s only complaint was that he
wanted 28 months’ severance, rather than the standard 12 months’.
Haggar disputes Palasota’s testimony that Thompson and other
members of management5 promised Palasota additional J.C. Penney
stores in San Antonio, Austin, or Houston. Haggar contends that
Vice President of Retail Merchandising Ray Pierce, with whom
Palasota never spoke about the subject, retained sole authority to
open J.C. Penney stores to Haggar’s Sales Associates. R. 31:334.
Palasota produced further evidence that Haggar’s management
was concerned with the appearance of its aging sales force. In
5
Besides Thompson, Palasota testified that in the Fall of 1995
he spoke to Douglas Moore, Tim Markham, and Joe Schlesinger about
the possibility of adding J.C. Penney stores to his territory.
5
late 1995, Haggar’s President, Frank Bracken, stated that he wanted
“race horses” and not “plow horses,” R. 32: 477, 512, while telling
Palasota that he was out of the “old school” of selling. R.
32:478. Bracken announced at a sales meeting that there was a
significant “graying of the sales force.” R. 31:290, 405. Alan
Burks, a member of management, stated at a sales executive meeting:
“Hey, fellows, let’s face it, we’ve got an ageing, graying sales
force out there. Sales are bad, and we’ve got to figure out a way
to get through it.” R. 29:66.
After his termination, Palasota filed a charge of age and sex
discrimination with the EEOC, which issued a determination finding
cause on the age claim. At trial, a jury found Haggar liable under
the Age Discrimination in Employment Act (ADEA), 29 U.S.C. § 621 et
seq., awarding Palasota $842,218.96 in backpay; the jury found no
liability as to Palasota’s Title VII claim.
Some months after the verdict, the district court granted
Haggar’s Motion for Judgment as a Matter of Law. The district
court found that Palasota failed to demonstrate that Haggar had
given preferential treatment to a younger employee and that
evidence of treatment of other Sales Associates after Palasota left
Haggar was not probative of whether age was a determinative factor
in Palasota’s discharge. Relying on a case predating Reeves v.
6
Sanderson Plumbing Prods., Inc., 530 U.S. 133 (2000),6 the court
ruled that a reasonable jury could not conclude “without any
inferences or presumptions” that age was a determinative factor in
the company’s termination decision. Further, the court found that
all of the age-related comments made by Haggar’s management were
“stray remarks” and therefore not probative of discriminatory
intent.
ANALYSIS
We review the district court’s grant of judgment as a matter
of law de novo. Raggs v. Miss. Power & Light Co., 278 F.3d 463,
467 (5th Cir. 2002). We must examine all the evidence in the record
as a whole and draw all reasonable inferences in favor of Palasota.
Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 137, 151, 1205
S. Ct. 2097 (2000). We do not, however, assess credibility of
witnesses or otherwise weigh the evidence. Lytle v. Household Mfg.
Inc., 494 U.S. 545, 554-55, 110 S. Ct. 1331 (1990).
Under the ADEA, it is “unlawful for an employer . . . to
discharge any individual or otherwise discriminate against any
individual with respect to compensation, terms, conditions, or
privileges of employment, because of such individual’s age.” 29
U.S.C. § 623(a)(1). “When a plaintiff alleges disparate treatment,
liability depends on whether the protected trait (under the ADEA,
6
Wyvill v. United Cos. Life Ins. Co., 212 F.3d 296 (5th Cir.
2000), cert. denied, 531 U.S. 1145 (2001).
7
age) actually motivated the employer’s decision.”7 In other words,
the plaintiff’s age “must have actually played a role” in the
employer’s decision making process. Id.
Where a case has been fully tried, it is unnecessary to “parse
the evidence into discrete segments corresponding to the different
stages” of the McDonnell Douglas framework. Scott v. Univ. of
Mississippi, 148 F.3d 493, 504 (5th Cir. 1998) (citation omitted).
Rather, the panel should examine whether the plaintiff has met his
ultimate burden of proving that the employer terminated him because
of age.8 Id.
Judgment as a Matter of Law should not be granted unless “the
facts and inferences point so strongly and overwhelmingly in the
movant’s favor that reasonable jurors could not reach a contrary
conclusion.” Flowers v. S. Reg’l Physician Servs., Inc., 247 F.3d
229, 235 (5th Cir. 2001) (quotations and citations omitted). The
7
Reeves, supra, (quoting Hazen Paper Co. v. Biggins, 507 U.S.
604, 610 (1993)) (internal quotation marks omitted).
8
See also United States Postal Serv. Bd. v. Aikens, 460 U.S.
711, 713-14 (1983) (“Because this case was fully tried on the
merits it is surprising to find the parties and the Court of
Appeals still addressing the question whether Aikens made out a
prima facie case. We think that by framing the issue in these
terms, they have unnecessarily evaded the ultimate question of
discrimination vel non.”); Woodhouse v. Magnolia Hosp., 92 F.3d
248, 252 (5th Cir. 1996) (“When a case has been fully tried on the
merits, the adequacy of the showing at any stage of the McDonnell
Douglas framework is unimportant; rather, the reviewing court must
determine whether there was sufficient evidence from which a
reasonable trier of fact could have concluded that age
discrimination occurred.”).
8
panel must “disregard all evidence favorable to the moving party
that the jury is not required to believe.” Reeves, 530 U.S. at
151; see also FED. R. CIV. P. 50(a)(1).
Our reading of the record and the district court’s opinions
convinces us that it erred by: (1) holding that Palasota was
required to show that a younger employee was given preferential
treatment; (2) ignoring much evidence which supports the jury’s
verdict, including the February 23, 1996 memo; and (3) discounting
the probative value of management’s remarks, despite Palasota’s
establishment of a prima facie case. Under Reeves, Palasota’s
establishment of a prima facie case combined with doubt cast on
Haggar’s proffered supposed non-discriminatory explanation for
terminationSSthat Palasota voluntarily resignedSSare sufficient to
support liability. 530 U.S. at 147.
In earlier denying Haggar’s Motion for Summary Judgment, the
district court correctly found that Palasota established a prima
facie case: (1) he was discharged; (2) he qualified for the
position; (3) he was a member of a protected class; and (4) there
was a material issue of fact as to whether he was discharged
because of his age. Order of September 24, 2001, p. 6-8. On
appeal, Haggar does not argue that Palasota failed to establish a
prima facie case, nor, as discussed below, does it defend the
district court’s mistaken observation that Palasota was required to
demonstrate preferential treatment of a younger employee. Instead,
9
Haggar argues that Palasota’s stated dissatisfaction with the loss
of his Dillard’s account and request for severance prove that he
voluntarily resigned. Yet, the April 26, 1996, termination letter
states that Palasota’s “position has been eliminated” as a means of
“re-configuring the sales staff.” Plaintiff’s Ex. 9. Haggar
explains this inconsistency by contending that termination language
was necessary for Palasota to receive extended medical benefits and
severance pay.9 However, given the plain language of the
termination letter, Palasota’s previous rejection of Haggar’s
severance offer, and Haggar’s refusal to link the loss of the
Dillard’s account to an overall down-sizing in its sales staff (the
only other plausible non-discriminatory explanation for Palasota’s
termination), a reasonable jury could have “infer[red] from the
falsity of the explanation that the employer is dissembling to
cover up a discriminatory purpose.” Reeves, 530 U.S. at 147.10
The court also erred by holding that Palasota had to show that
Haggar had given preferential treatment to a younger employee under
“nearly identical” circumstances. Without discussing evidence
9
Haggar contends that its insurance company required this
designation for employees who sought extended benefits. Haggar
also contends that it was necessary to include this language in the
termination letter “so that Palasota could receive severance pay
under what Lyons believed was Haggar’s company policy.” The jury
was entitled to disbelieve this explanation for want of
credibility.
10
See also Nichols v. Lewis Grocer, 138 F.3d 563, 568 (5th Cir.
1998) (noting that “a reasonable juror certainly may infer
discrimination when an employer offers inconsistent explanations
for the challenged employment action”).
10
favorable to Palasota, the court summarily concluded that his
theory of the caseSSthat Haggar sought to replace its largely older,
male sales force with a younger female sales forceSSwas insufficient
to prove disparate treatment. The court stated that Palasota’s
“attempted comparison with the RMAs, general and conclusory as it
was, does not” show preferential treatment under “nearly identical
circumstances.” Memorandum Order June 26, 2002, at 12.
Treating younger workers more favorably is not the only way to
prove age discrimination. A plaintiff must show that “(1) he was
discharged; (2) he was qualified for the position; (3) he was
within the protected class at the time of discharge; and (4) he was
either i) replaced by someone outside the protected class,
ii) replaced by someone younger, or iii) otherwise discharged
because of his age.” Bodenheimer v. PPG Indus., Inc., 5 F.3d 955,
957 (5th Cir. 1993) (emphasis added). Accepting Haggar’s
characterization of this dispute as a reduction-in-force case, the
plaintiff need only show “evidence, circumstantial or direct, from
which a factfinder might reasonably conclude that the employer
intended to discriminate in reaching the decision at issue.”
Nichols v. Loral Vought Sys. Corp., 81 F.3d 38, 41 (5th Cir. 1996)
(quoting Amburgey v. Corhart Refractories Corp., 936 F.2d 805, 812
(5th Cir. 1991)).11 Therefore, Palasota was not required to
11
In Amburgey, this court further noted that, in reduction-in-
force cases, the plaintiff must “produce some evidence that an
employer has not treated age neutrally. . . . Specifically the
11
demonstrate that the Sales Associates and RMAs were given
preferential treatment or that he was immediately replaced by an
RMA.
The district court observed that, though replacement by a
younger worker was not a necessary component of Palasota’s prima
facie case, Palasota still “[a]t the end of the day . . . has to
compare himself to a younger worker under ‘nearly identical’
circumstances to show that he was treated ‘disparately’ because of
his age.” Memorandum Order supra at 12 n.3. This runs counter to
Reeves, which holds that the establishment of a prima facie case
and evidence casting doubt on the veracity of the employer’s
explanation is sufficient to find liability. 530 U.S. at 147.
Palasota produced evidence which the district court did not
address from which a reasonable juror could conclude that he was
terminated as part of Haggar’s plan to turn Sales Associate duties
over to younger RMAs. For example, it did not address the February
23, 1996, memorandum from Tim Lyons to Haggar executives Frank
Bracken, Joe Haggar, III, and Alan Burks. In that memo, Lyons
discusses Palasota’s displeasure with the company’s offer of a
standard severance package. Lyons then shifts focus, recommending
severance packages for fourteen named Sales Associates, all of whom
evidence must lead the factfinder reasonably to conclude either (1)
that defendant consciously refused to consider retaining or
relocating a plaintiff because of his age, or (2) that defendant
regarded age as a negative factor in such consideration.” 936 F.2d
at 812 (citation omitted).
12
are specifically identified as over fifty years of age, in order to
“thin the ranks” as part of a transition period. The memo states
that, by eliminating employees over fifty years of age, “we will
have the flexibility to bring on some new players that can help us
achieve our growth plans.”
To qualify as direct evidence, a document must be (1) age
related, (2) proximate in time to the termination, (3) made by an
individual with authority over the termination, and (4) related to
the employment decision. Brown v. CSC Logic, Inc., 82 F.3d 651,
655 (5th Cir. 1996). The memo, which is undeniably age-related,
was composed approximately two months before Palasota’s
termination. Lyons, Vice President of Sales/Casual, was empowered
to terminate Palasota, as well as offer severance packages to other
employees. In no uncertain terms, the memo discusses a broad plan
to “thin the ranks” of older Sales Associates in order to “ease the
anxiety of this transition period.”
Haggar contends the memo merely discusses the possibility of
providing severance packages to three employees requesting them,
including Palasota. This ignores the fact that 14 employees over
fifty years of age, at least 11 of whom did not request severance
packages, were targeted for offers. Haggar does not explain why,
as part of its plan to “reconfigure” its sales staff, only older
associates were selected, nor why RMAs were simultaneously hired to
perform sales duties.
13
Though the offer of a severance package is not, by itself,
evidence of age discrimination, Bodnar v. Synpol, Inc., 843 F.2d
190, 192-93 (5th Cir. 1988), cert. denied, 488 U.S. 908 (1988),
such offers assume that employees “may decline the [early
retirement] offer and keep working under lawful conditions.” Id.
(quoting Henn v. Nat’l Geographic Soc’y, 819 F.2d 824, 826 (7th
Cir. 1987)). Within two months after Palasota refused to accept
the severance package, he was “eliminated”; the stated reason for
termination was a “reconfiguration of the sales force.”
Plaintiff’s Ex. 9. Between December 1, 1996, and March 31, 1998,
Haggar terminated twelve Sales Associates, including Palasota.12
Plaintiff’s Ex. 67, 68. Within one year after Palasota’s
termination, the Sales Associates assigned to the J.C. Penney’s
account were terminated and replaced by RMAs. R. 29:91-92; 33:692;
Supp 2:13-14. Ninety-five percent of the Sales Associates were
males over the age forty, while ninety-five percent of the RMAs
were females under forty. Haggar’s chief financial officer
testified that increases in the number of RMAs and declines in
Sales Associates were designed to offset one another. R. 32:508-
09. The former head of Haggar’s J.C. Penney account testified that
12
The record shows that three other Sales Associates ended their
employment on the same day as Palasota. R. 30:163; Plaintiff Ex.
81. Nine of the other fourteen Sales Associates over fifty years
of age were either laid off, or otherwise terminated their
employment, over the next five years. Plaintiff Ex. 67; Plaintiff
Ex. 81.
14
“there was no difference” between the RMAs and Sales Associates,
and that the transition was part of a plan to shift sales
responsibilities to the younger, predominantly female, RMAs. R.
29:45; 32:471-72; 32:510. Coupled with Haggar’s mid-1990s campaign
to present a more youthful image, a reasonable juror could conclude
that Palasota was terminated because of his age.13
The district court also erred by discounting age-related
remarks attributed to National Sales Manager Alan Burks and
President Frank Bracken as “stray remarks.” Relying on Wyvill, a
pre-Reeves decision, the court found the remarks insufficient to
create an inference of discriminatory intent. Wyvill stated that,
for an age-based comment to be probative of an employer’s
discriminatory intent, it must be “direct and unambiguous, allowing
a reasonable jury to conclude without any inferences or
presumptions that age was a determinative factor in the decision to
terminate the employee.” 212 F.3d at 304. After Reeves, however,
so long as remarks are not the only evidence of pretext, they are
probative of discriminatory intent.14
13
The district court also ignored the EEOC’s determination of
reasonable cause, made after a two and one-half year investigation,
to believe that Palasota and similarly situated Sales Associates
were discharged in violation of the ADEA. “[A]n EEOC determination
prepared by professional investigators on behalf of an impartial
agency, [is] highly probative.” Plummer v. Western Int’l Hotels
Co., 656 F.2d 502, 505 (9th Cir. 1981) (citing Peters v. Jefferson
Chem. Co., 516 F.2d 447, 450-51 (5th Cir. 1975)).
14
See Russell, 235 F.3d at 229 n.19 (“Rubinstein stands only for
the proposition that an overwhelming case that the adverse
15
Haggar argues that Bracken’s comment that Haggar needs race
horses, not plow horses, is not probative because “[r]acehorses and
plowhorses can be young or old.” Similarly, the company argues
that Bracken’s comment that Palasota’s sales techniques were out of
the “old school” of selling relates to traditional practices, not
age. As to Bracken’s sales meeting comment that there was a
“graying of the sales force” and Burks’s statement that “we’ve got
to find a way to get through it,” Haggar contends these are
objective observations, ambiguous, and insufficient to infer
discrimination; the statements were also unconnected in time to
Palasota’s termination.
Post-Reeves, this court has taken a more “cautious” view of
the stray remark doctrine discussed in Wyvill. Russell v. McKinney
Hosp. Venture, 235 F.3d 219, 229 (5th Cir. 2000).15 Age-related
remarks “are appropriately taken into account when analyzing the
evidence supporting the jury’s verdict,” even where the comment is
employment actions at issue were attributable to a legitimate,
nondiscriminatory reason will not be defeated by remarks that have
no link whatsoever to any potentially relevant time frame.”); see
also Auguster v. Vermilion Parish Sch. Bd., 249 F.3d 400, 403 n.7
(5th Cir. 2001) (refusing to consider stray remarks as
circumstantial evidence of age discrimination where no other
evidence of pretext); Rubinstein v. Adm’rs of Tulane, 218 F.3d 392,
401 (5th Cir. 2000), cert. denied, 532 U.S. 937 (2001).
15
Even before the Court decided Reeves, this court noted that
“the ‘stray remark’ jurisprudence is itself inconsistent with the
deference appellate courts traditionally allow juries regarding
their view of the evidence presented and so should be narrowly
cabined.” Vance v. Union Planters Corp., 209 F.3d 438, 442 n.4
(5th Cir. 2000).
16
not in the direct context of the termination and even if uttered by
one other than the formal decision maker, provided that the
individual is in a position to influence the decision. Id.
Bracken and Burks, both members of upper management, were in such
a position. The jury was entitled to believe Palasota’s theory
that older Sales Associates were pushed out in favor of younger
RMAs as part of a plan to bring a more youthful appearance to
Haggar. Alongside Palasota’s establishment of a prima facie case
and a fact issue as to the veracity of Haggar’s stated grounds for
termination, Bracken’s and Burks’s remarks were probative of
discriminatory intent.
In granting the Judgment as a Matter of Law, the district
court was not required to and did not reach the questions whether
the evidence supported the jury’s finding of willful discrimination
and the award of back pay. Therefore we do not reach those issues.
CONCLUSION
The district court erred in granting Judgment as a Matter of
Law. The judgment of the district court is reversed, the verdict
of the jury is reinstated, and the case is remanded to the district
court.
REVERSED, JURY VERDICT REINSTATED, REMANDED.
17