Zapata-Matos v. Reckitt & Colman

• Citation: 277 F.3d 40
• Decision Date: 06 November 2001
• Docket Number: No. 00-2546,P,ZAPATA-MATO,00-2546
• Parties: (1st Cir. 2002) RAM Nlaintiff, Appellant, v. RECKITT & COLMAN, INC., f/k/a L&F PRODUCTS, Defendant, Appellee. Heard
• Court: U.S. Court of Appeals — First Circuit

Page 40

277 F.3d 40 (1st Cir. 2002)

RAM N ZAPATA-MATOS, Plaintiff, Appellant, v. RECKITT & COLMAN, INC., f/k/a L&F PRODUCTS, Defendant, Appellee.

No. 00-2546

United States Court of Appeals For the First Circuit

Heard Nov. 6, 2001

Decided January 14, 2002

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO. Hon. Aida M. Delgado-Colon, U.S. Magistrate Judge

Jane Becker Whitaker for appellant.

Graciela J. Belaval with whom Martinez Odell & Calabria was on brief for appellee.

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

LYNCH, Circuit Judge.

Ramon 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 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 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 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 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.

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 Jesus, 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, 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 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 months of Zapata's termination. Dunn had been Vice...