Filed: Feb. 11, 1999
Latest Update: Mar. 02, 2020
Summary: Revised February 9, 1999 UNITED STATES COURT OF APPEALS For the Fifth Circuit _ No. 97-30795 _ BRENDA SMITH, Plaintiff-Appellee-Cross Appellant, VERSUS THE BERRY CO., ET AL, Defendants, L. M. BERRY AND COMPANY, Defendant-Appellant-Cross-Appelee. _ Appeals from the United States District Court for the Eastern District of Louisiana _ February 1, 1999 Before REAVLEY, DAVIS, and DUHÉ, Circuit Judges. W. EUGENE DAVIS, Circuit Judge: Defendant L.M. Berry & Company (“Berry”) challenges the district cou
Summary: Revised February 9, 1999 UNITED STATES COURT OF APPEALS For the Fifth Circuit _ No. 97-30795 _ BRENDA SMITH, Plaintiff-Appellee-Cross Appellant, VERSUS THE BERRY CO., ET AL, Defendants, L. M. BERRY AND COMPANY, Defendant-Appellant-Cross-Appelee. _ Appeals from the United States District Court for the Eastern District of Louisiana _ February 1, 1999 Before REAVLEY, DAVIS, and DUHÉ, Circuit Judges. W. EUGENE DAVIS, Circuit Judge: Defendant L.M. Berry & Company (“Berry”) challenges the district cour..
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Revised February 9, 1999
UNITED STATES COURT OF APPEALS
For the Fifth Circuit
___________________________
No. 97-30795
___________________________
BRENDA SMITH,
Plaintiff-Appellee-Cross Appellant,
VERSUS
THE BERRY CO., ET AL,
Defendants,
L. M. BERRY AND COMPANY,
Defendant-Appellant-Cross-Appelee.
___________________________________________________
Appeals from the United States District Court
for the Eastern District of Louisiana
___________________________________________________
February 1, 1999
Before REAVLEY, DAVIS, and DUHÉ, Circuit Judges.
W. EUGENE DAVIS, Circuit Judge:
Defendant L.M. Berry & Company (“Berry”) challenges the
district court’s judgment, entered on a jury verdict, awarding
damages because Berry discriminated against the Plaintiff, Brenda
Smith, on the basis of her sex and her age. Berry argues that
Smith produced insufficient evidence of discrimination for the case
to have gone to the jury and thus the district court should have
granted Berry’s motion for judgment as a matter of law. In
addition, Berry challenges several of the damage awards.
Alternatively, Berry seeks a new trial because of various trial
errors. Smith cross-appeals, challenging the district court’s
denial of front pay and its decision not to award the maximum
punitive damages permitted under Title VII. We affirm in part and
reverse in part.
I. Facts and Prior Proceedings
The important facts of this case, when viewed in the light
most favorable to the verdict, are as follows. Berry, a subsidiary
of BellSouth, sells advertisements for the Yellow Pages. From 1983
through February 1996, Plaintiff Brenda Smith was a salesperson for
Berry. During her first eleven years with Berry, she was very
productive and enjoyed an excellent relationship with her coworkers
and superiors. However, from 1994 through the end of her
employment in February 1996, Smith’s relationship with Berry
deteriorated, eventually leading to Smith’s resignation--or, as she
claims, her constructive discharge. Smith filed this suit against
Berry alleging that the demise of her successful career was caused
by Berry’s age and sex discrimination. In response, Berry argued
that Smith’s attitude and negative reaction to the restructuring of
Berry’s salary system were the cause of her problems, not her age
or her sex.
Brenda Smith began working for Berry in November 1983. In
August 1990, Smith was promoted to Account Manager.1 While in this
new position, Smith was one of Berry’s leading salespersons and won
numerous awards for her work. At trial, Smith testified that when
1
The title “Account Manager” was subsequently renamed
“Senior Account Manager,” and then “Sales Leader.”
2
she was promoted in 1990, Dale Granda, her manager at that time,
stated that he “really had some concerns whether or not a woman
could handle the job because it was a lot of stress and a lot of
responsibility.” Despite this remark, Smith concedes that Granda
promoted her twice and recommended her for BellSouth’s highest
achievement award.
In 1994, shortly after her fortieth birthday, Smith was
suspended for one day for mishandling an account. Both then and at
trial, Smith challenged the grounds for this suspension. Smith’s
suspension and that of another woman over forty were announced
publicly to the entire company. A similar suspension of a male
salesperson was not publicly announced. Notwithstanding this
suspension, Smith continued to be a productive member of Berry’s
workforce.
In May 1995, Berry’s Gulf Coast Division instituted a new
compensation plan. Under the new “segmentation” plan, an
employee’s bonus now depended not on the individual employee’s
sales, but on the total sales of a team of employees. Brenda Smith
and a number of other employees expressed concern that this new
compensation package would drastically reduce their earnings. At
trial, Smith contended that she was no more vocal in her complaints
than any other salesperson. Berry argued, however, that Smith
complained to a much greater and more public extent than any other
employee. Berry also claimed to be especially concerned about
Smith’s complaints because of her leadership position within the
office.
3
From 1992 onward, Smith suffered recurring medical problems
with her knee and shoulder as a result of a skiing accident. At
the time of the accident in 1992, Smith’s doctors had recommended
surgery. However, she did not have the surgery because Berry
indicated that they “could not spare her.” Finally, in September
1995, following the recommendations of three doctors, Smith
scheduled the surgery.
On September 27, 1995, Smith informed her immediate superior,
Team Leader Lester Ann Smith, that she had scheduled surgery for
October 3, 1995. That same afternoon, Brenda Smith met with Lester
Ann Smith, Dale Granda (Division Manager of Sales), and Tom Bruno
(Operations Manager). At this meeting, Brenda Smith was accused of
several specific incidents where she had complained about the new
compensation plan. In response, she told Lester Ann Smith, Granda,
and Bruno that some of the accusations were unfair
mischaracterizations of events and others were just plain wrong.
She requested that they investigate the validity of the
accusations. Smith was not informed that she was being demoted.
Smith was out on medical leave from October 3, 1995 through
January 15, 1996. During her absence, her Sales Leader position
was advertised within the company. Also during her absence, Smith
traveled extensively in a manner that Berry claimed violated
company policy. Smith, however, testified that Berry’s personnel
department was aware of, and in some cases explicitly approved of,
her travels. She also pointed out that she had notified the
company of her Australian vacation six months prior to taking it.
4
On January 16, 1996, Smith returned to Berry and met with
management again. At this meeting, Smith was informed that she was
being demoted. The demotion entailed a substantial cut in pay and
a serious decrease in responsibilities and status. She was moved
off important accounts and given new, small accounts. She was told
that if she complained about her demotion she would be sent on the
road to the least important parishes in Berry’s Gulf Coast region.
In addition, in her absence, her belongings had been moved into a
box and had been placed at a cubicle with no chair, no phone, and
no supplies. Smith saw the failure of Berry to properly prepare
her workstation--along with her demotion and the other events that
had taken place since her return from medical leave--as a sign that
she was being constructively discharged.
After these events occurred, Smith asked to look at her
employment file. She then read five memoranda from her file that
recorded complaints against her. Upon determining that Berry had
conducted no investigation of these accusations, as she had
requested in the September 27, 1995 meeting, she tendered her
resignation from the company. She soon received a job offer from
Sprint. She accepted this offer on January 24, 1996.
An important Berry memorandum relevant to Smith’s age
discrimination claim was introduced at trial. This memorandum (the
“Luongo Memorandum”) was written in 1989 by Peter Luongo while he
was Vice President of Sales in Smith’s region.2 In this
2
At the time of the trial, Mr. Luongo was the Executive Vice
President of the entire company.
5
memorandum, marked PERSONAL & CONFIDENTIAL, Luongo divided “low-end
performers” into three groups, based upon their age. The
memorandum categorized younger employees as “easiest . . . to deal
with” and noted that older employees are a “very, difficult group”
and “more difficult to terminate.” The memo stated that “[e]ach of
these groups will require very sensitive handling.” Of the eight
people named in this memorandum, four were no longer with the firm
at the time of trial and one had been demoted.
Although technically Smith’s position was filled by a lateral
transfer, the jury could have determined that Smith was effectively
replaced as a Sales Leader by Joe Pearce, a younger male. Pearce
was promoted to Sales Leader while Smith was on medical leave
recuperating from her surgery.
Smith sued Berry alleging violations of the Age Discrimination
in Employment Act (“ADEA”), 29 U.S.C. §§ 621 et seq. (1994), Title
VII of the Civil Rights Act of 1964, as amended (“Title VII”), 42
U.S.C. §§ 2000e et seq. (1994), the Family and Medical Leave Act
(“FMLA”), 29 U.S.C. 2601 §§ et seq. (1994), and Louisiana
Employment Discrimination Statutes, La. Rev. Stat. Ann. §§ 23:1006,
51:2231 (West 1992). Smith further alleged Louisiana state law
claims for intentional infliction of emotional distress. She later
amended her complaint and alleged claims of defamation and
retaliation against Berry and Sandra Peterson, Berry’s Corporate
Employee Relations Manager. Before trial, the district court
granted Berry’s motion for summary judgment on the defamation and
intentional infliction of emotional distress claims. The remaining
6
claims were then tried to a jury.
At the close of evidence, Berry moved for judgment as a matter
law on all counts. The judge granted the motion as to the
retaliation claim and denied it for all other claims. The jury, by
special verdict, found that Berry discriminated against Smith by
demoting and constructively discharging her from its employment on
the basis of age in violation of the ADEA, on the basis of gender
in violation of Title VII and Louisiana antidiscrimination laws,
and in violation of the FMLA. The jury further found that Berry’s
violations of the ADEA and the FMLA were willful. The jury awarded
Smith $24,000 in back pay, $76,000 in compensatory damages, and
$500,000 in punitive damages. The district court then entered a
judgment on the verdict.
Berry filed a post-trial motion for judgment as a matter of
law or, in the alternative, for a new trial. The district court
held that there was insufficient evidence to support Smith’s claims
under the FMLA. The district court, however, did conclude that the
evidence was sufficient to support the jury’s verdict on the age
and sex discrimination claims. In addition, the district court
declined to disturb the back pay award of $24,000, granted an
additional $24,000 under the liquidated damage provisions of the
ADEA, remitted the compensatory damage award to $50,000, and
remitted the punitive damage award to $100,000. The district court
denied Smith’s request for front pay and prejudgment interest.
Thus, the overall judgment was reduced from $600,000 to $198,000.
In this appeal, Berry seeks judgment as a matter of law in its
7
favor or, alternatively, a new trial. Smith cross appeals,
requesting that we reverse the district court’s reduction of
punitive damages,3 the district court’s ruling of no liability
under the FMLA, and the district court’s denial of front pay.
Berry’s fundamental claim is that the evidence is insufficient
to support the findings of the jury and the district court. We
review the denial of a motion for judgment as a matter of law using
the same standard that the district court used in ruling on the
motion. Deffenbaugh-Williams v. Wal-Mart Stores, Inc., 156 F.3d
581, 588 (5th Cir. 1998). We look at
all of the evidence--not just that evidence which
supports the non-mover’s case--but in the light and
with all reasonable inferences most favorable to the
party opposed to the motion. If the facts and
inferences point so strongly and overwhelmingly in
favor of one party that the Court believes that
reasonable men could not arrive at a contrary verdict,
granting [judgment as a matter of law] is proper.
Boeing Co. v. Shipman, 411 F.2d 365, 374 (5th Cir. 1969) (en banc),
overruled in part on other grounds by Gautreaux v. Scurlock Marine,
Inc.,
107 F.3d 331 (5th Cir. 1997) (en banc).
Moreover, when, as here, a case has been fully tried on its
merits, we do not focus on the McDonnell Douglas burden-shifting
scheme. See McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.
Ct. 1817,
36 L. Ed. 2d 668 (1973). Instead, we inquire whether the
record contains sufficient evidence to support the jury’s ultimate
3
Smith acknowledges that the statutory maximum for punitive
damages is $300,000, 42 U.S.C. § 1981a(b)(3)(D) (1994), and thus
asks that we grant that amount, not the $500,000 awarded by the
jury.
8
findings. Patterson v. P.H.P. Healthcare Corp., 90 F.3d 927, 933
(5th Cir. 1996).
II. Age Discrimination
Berry argues first that the evidence is insufficient to
support the jury finding that Berry had discriminated against Smith
because of her age and that this discrimination was willful. When
faced with the same argument, the district court disagreed,
pointing to: (1) the promotion of Pearce into the position
previously held by the older Smith; (2) the Luongo memorandum,
which even though six years old, provided clear evidence of
categorization by age; and (3) the fact that Smith and another
woman were suspended soon after their fortieth birthdays for
actions that Smith claimed, both then and at trial, did not justify
suspension. We agree with the district court that this evidence,
while not overwhelming, is sufficient to support the jury’s finding
of age discrimination.
Berry also challenges the size of the award. Berry argues
that if Smith had not voluntarily left the company, she would have
been terminated because she violated company policy by attempting
to record the September 27, 1995 meeting and by going on unapproved
travel while on medical leave. Thus, Berry asks that Smith’s award
of back pay be limited because she would have been terminated
anyway.
Because the evidence for Berry’s argument was discovered after
the alleged discriminatory actions took place, for Berry to win on
this argument, Berry must satisfy the requirements set forth in
9
McKennon v. Nashville Banner Publishing Co., 513 U.S. 352, 115 S.
Ct. 879,
130 L. Ed. 2d 852 (1995). In McKennon, the Supreme Court
held that, “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.”
Id. at 362-63, 115 S. Ct. at 886-
87. In denying Berry’s post-trial motion for judgment as a matter
of law, the district court stated that the jury could have
reasonably found that Berry failed to satisfy its burden of proving
that Smith would have been fired for her violations of company
policy alone. In light of the factual disputes over travel and the
fact that the antirecording policy focused on phone calls with
clients, we agree with the district court’s conclusion.
In addition to its finding of age discrimination, the jury
determined that Berry’s violation of the ADEA was willful, exposing
the company to liquidated damages under the ADEA. 29 U.S.C. §
626(b) (1994). Unlike Title VII, the ADEA does not provide for
punitive damages. See Dean v. American Security Ins. Co., 559 F.2d
1036, 1039 (5th Cir. 1977) (holding that punitive damages are not
available under the ADEA). Instead, the ADEA provides for
“liquidated damages” if the violation was willful. These
liquidated damages may not exceed the back pay award. That is, a
finding of willfulness can double the damages awarded to a
successful ADEA plaintiff. 29 U.S.C. § 626(b), incorporating 29
U.S.C. § 216(b) (1994). The jury found that Berry’s violation of
10
the ADEA was willful and the district court declined to upset this
finding.
A violation of the ADEA is willful if the employer knew or
showed reckless disregard for whether its conduct was prohibited by
the ADEA. Trans World Airlines, Inc. v. Thurston, 469 U.S. 111,
128,
105 S. Ct. 613, 625,
83 L. Ed. 2d 523 (1985); see also
Woodhouse v. Magnolia Hospital,
92 F.3d 248, 256 (5th Cir. 1996)
(“liquidated damages are not recoverable only if there is evidence
that the intentional violation of the ADEA was based on the
employer’s good-faith, albeit mistaken, belief that the statute
allowed an age-based decision”). We agree with the district court
that there was sufficient evidence for the jury to conclude that
Berry’s conduct was willful. The Luongo Memorandum indicates that
Berry categorized its employees by age. It also supports an
inference that Berry targeted older employees as prime candidates
for demotion and relegation to smaller markets once they were
identified as “low-end performers.” Thus, we decline to disturb
the district court’s award of $24,000 for back pay and $24,000 for
liquidated damages under the ADEA.
III. Sex Discrimination
Berry argues next that the evidence was insufficient to
support the jury finding of sex discrimination. Berry also
challenges the various awards of back pay, compensatory damages,
and punitive damages based on the sex discrimination claim. We
turn first to the sufficiency question.
We begin by observing that during the time under
11
consideration, four of the seven Sales Leaders at Berry were women.
Numerous women, including Smith, enjoyed successful careers at
Berry, receiving a variety of promotions and awards. Indeed, the
record indicates that Berry placed a substantial number of women in
both mid-level and managerial positions.
We also note that many of the Berry employees expressing
concern over Smith’s behavior--both prior to Smith’s demotion and
at trial--were women. For example, Lester Ann Smith, Brenda
Smith’s Team Leader, and Katherine LeMaire, the other Sales Leader
on Lester Ann Smith’s team,4 both testified that Smith was behaving
negatively and disrupting the workplace. Furthermore, two of the
four people closely involved in the decision to demote Smith were
women--Lester Ann Smith and Lynn Thomas.5 While these observations
are by no means determinative of the issue, they are significant
considerations in evaluating a claim of sex discrimination. See,
e.g., Travis v. Board of Regents of the University of Texas System,
122 F.3d 259, 264-65 (5th Cir. 1997) (looking to employer’s general
treatment and promotion of men and women).
Smith and the district court point to a number of events that
they argue would permit a jury to infer discrimination on the basis
4
Each of Berry’s sales teams was led by a Team Leader, in
this case, Lester Ann Smith. The Sales Leader worked under this
Team Leader. Because of its size and importance, Lester Ann
Smith’s team had two Sales Leaders--Brenda Smith and Katherine
Lemaire--instead of the usual one.
5
Lynn Thomas made the actual decision to demote Brenda
Smith. Lester Ann Smith, who did not have the power to make such
a decision herself, supported the demotion.
12
of sex. First, Smith points to the comment made to her by Dale
Granda when he promoted her to Sales Leader stating that he doubted
whether a woman could perform the job. Berry points out that the
remark was made six years before Smith’s departure and that both
she and a number of other women had been promoted to mid- and high-
level positions between 1990 and 1996. We agree with Berry that
Granda’s remark is a “stray remark” that cannot support an
inference of sex discrimination. See, e.g., Ray v. Tandem
Computers, Inc., 63 F.3d 429, 434 (5th Cir. 1995) (“[A] single
comment, made several years prior to the challenged conduct, is a
stray remark too remote in time to support an inference of sex
discrimination in later employment actions.”).
Second, Smith argues that Berry did not follow its “Corrective
Performance Plan” in disciplining Smith. Berry concedes this fact,
but points out that the company’s employee handbook clearly states
that Berry reserves the right not to follow the Plan if it so
chooses.
Relatedly, Smith argues that the manner in which she was
disciplined, when contrasted with the manner in which Joe Pearce
was disciplined, points to Berry’s discriminatory motive. The
record indicates that while Pearce was demoted and otherwise
punished for his alcohol-related misbehavior, which included
throwing a colleague into a swimming pool and propositioning a
colleague’s wife, he was treated in a substantially different
manner than Smith. However, we agree with Berry that Pearce’s
conduct was not substantially similar to that of Brenda Smith.
13
Berry had legitimate nondiscriminatory reasons to treat Pearce, an
employee with alcohol problems manifesting in obnoxious behavior
away from the workplace, differently from an employee disrupting
the workplace through her negative attitude. This different
treatment does not raise an inference of sex discrimination.
Finally, Smith points to a pair of remarks made to a pregnant
colleague and the public announcement of her one-day suspension and
that of another women while a similar suspension of a man was kept
quiet. Again, these isolated incidents that occurred well before
Smith’s demotion will not support an inference of sex
discrimination.
In short, when we consider the isolated remarks and incidents
Smith relies on to support an inference of sex discrimination
against the background of Berry’s favorable treatment of Smith and
other women during her thirteen-year employment tenure, we conclude
that the evidence is insufficient to support the verdict on the sex
discrimination claim.
Our reversal of the sex discrimination claim requires us to
vacate the award of punitive damages and damages for mental pain
and suffering. Such damages are not available on the age
discrimination claim alone. Dean, 559 F.2d at 1039.
IV. Other Issues
We have considered the remaining arguments of the parties and
find that none of them have merit.
Conclusion
In sum, we agree with the district court that sufficient
14
evidence supports the jury’s finding of age discrimination. We
also find sufficient evidence to support the award of liquidated
damages under the ADEA. However, for the reasons stated above,
we find the evidence insufficient to support the finding of sex
discrimination. This finding requires us to vacate the award of
punitive damages and compensatory damages for mental pain and
suffering. The case is remanded to permit the district court to
enter judgment consistent with this opinion.
AFFIRMED in part, REVERSED in part, and REMANDED.
15
