McPheeters v. Black & Veatch Corp.

Decision Date04 November 2005
Docket NumberNo. 04-2268.,04-2268.
PartiesMichael E. McPHEETERS, Appellant, v. BLACK & VEATCH CORPORATION, Appellee.
CourtU.S. Court of Appeals — Eighth Circuit

Gene P. Graham, Jr., argued, Independence, MO (Deborah J. Blakely, on the brief), for appellant.

Thomas R. Buchanan, argued, Kansas City, MO (Linda C. McFee, on the brief), for appellee.

Before WOLLMAN, HANSEN, and BENTON, Circuit Judges.

HANSEN, Circuit Judge.

Michael E. McPheeters filed this lawsuit against his former employer, Black & Veatch Corporation, alleging age discrimination in violation of the Age Discrimination in Employment Act, 29 U.S.C. § 621-634 (2000), and the Missouri Human Rights Act, Mo. Rev. Stats. § 213.010-.137 (2000). Mr. McPheeters now appeals the judgment entered by the district court1 following a jury verdict in favor of Black & Veatch. After carefully reviewing the record, we affirm.

I.

Mr. McPheeters presented evidence at trial that he was fired after working 28 years for Black & Veatch Corporation, an engineering/construction firm in Kansas City, Missouri, that specializes in large, coal-fired power plants and municipal water and wastewater plants. In 1988, he was promoted to Director of Photography, a division within the Corporate Communications Department. In the 1990s, he supervised a staff of two other photographers until the two staffers were fired in 1996 in an effort to cut company costs. Mr. McPheeters worked long hours and traveled all around the world to complete his photographic assignments. By all accounts, his photography work was outstanding. Nevertheless, Black & Veatch terminated his employment in 2001, when Mr. McPheeters was 54 years old, after several cost-benefit studies recommended outsourcing the photography work.

Mr. McPheeters attempted to prove that he was fired on the basis of age discrimination. He presented evidence that in August 2000, William Cole, Vice President of Corporate Development, allegedly instructed Laura Luckert, Director of Creative Resources in the Corporate Communications Department and Mr. McPheeters' supervisor at the time, to try to eliminate the "gray hairs" in her department. Specifically, Luckert testified that Cole told her, "You've got a lot of gray hairs in your department, and I think we could save some money in that area. I'd like you to do a cost-analysis on those folks." (Trial Tr. at 329.) She said she was offended by the comment, and when she asked what he meant by "gray hairs," Cole named Bruce Erickson, a videographer, as an example. "He's been there a long time. He's older. He's at the top of his pay scale.... I think we could get what he does for us cheaper." (Trial Tr. at 335.) Luckert said that Cole told her to check into outsourcing the work and also asked her to work on drawing up a freelance photography contract to "see if we can get Mike McPheeters off the payroll." (Trial Tr. at 337.) Luckert testified that she was shocked and offended by the alleged "gray hairs" comment and said that she immediately determined to leave Black & Veatch. Luckert voluntarily ended her employment with Black & Veatch on November 2, 2000.

Black & Veatch discredited Luckert's testimony and presented evidence of a legitimate business judgment to justify Mr. McPheeters' termination. The evidence demonstrated that during the five years preceding Mr. McPheeters' termination, Black & Veatch had been considering the cost effectiveness of its in-house photography department. Several cost analysis studies recommended that outsourcing photography would be more cost-efficient for the company. Ms. Luckert was involved in a 1996 cost-benefit analysis of several administrative functions within the area of marketing communications, which included the three photographers. At the conclusion of this study, Ms. Luckert herself had recommended outsourcing all of the photography work as a cost efficient measure. Black & Veatch eliminated two of its three photographers on her recommendation, but chose to retain Mr. McPheeters at that time.

In 1999, Black & Veatch contracted with a communications consulting firm to conduct another study of the operational efficiency of certain communications functions within Black & Veatch. This study concluded that strategically outsourcing certain services, including graphic design and photography, would be more cost-effective than retaining those functions in-house. Again in 2000, Dave Thompson, an independent consultant, provided input regarding outsourcing certain communications functions, including photography. Vice President Cole asked Thompson to draft a contract that could be used for freelance photography services, considering Mr. McPheeters as potentially filling that role.

Vice President Cole testified that at his August 10, 2000, meeting with Luckert, when the alleged "gray hairs" comment was made, he instructed Luckert to perform another cost-analysis study considering outsourcing certain functions and to work with Thompson in drawing up a freelance photography contract. Cole denied making the "gray hairs" remark and denied any intent to eliminate Mr. McPheeters' position because of his age. Cole said that his discussion with Luckert concerned exploring the possibility of outsourcing photography for cost-efficiency purposes, not age. He was aware of the term, however, and cited a management book that he owns which uses the term in a positive context to refer not to age but to an employee with experience and an ability to work effectively.

When Luckert resigned in November 2000, she had not taken any action on Cole's latest requests, and Cole had never pressured her to do so. She admitted that she had never reported the alleged "gray hairs" comment to human resources or anyone at the company during her employment, and she did not tell any coworker that she was leaving because of a remark made by Cole. In fact, the evidence supports an inference that she left because she learned in July that she would not be qualified to interview for a newly created position of communications supervisor and that she soon would be relocated from her private office to a cubicle. She did not reveal the alleged "gray hairs" comment until August 2001, after learning that Mr. McPheeters, Mr. Erickson, and others had been terminated.

In December 2000, Black & Veatch hired Corrine Smith, who was 53 years old, to fill the new communications supervisory role of Director of Communications, Marketing, and Branding. She worked under Cole and supervised Mr. McPheeters' department. In January 2001, Smith hired John Schaefer, who was 30 years old, as Director of Creative Services to fill the vacancy left by Laura Luckert. Upon advice that the company was trying to reduce overhead expenses, Smith began to evaluate whether some functions within the department could be more cost-effective if outsourced. She instructed Schaefer to conduct a cost-analysis on positions in graphic design and photography to determine if there were opportunities to reduce overhead costs by outsourcing those functions. In May 2001, Schaefer recommended outsourcing the photography position.

Ms. Smith drafted an overall plan to restructure the Corporate Communications Department, which included transferring some employees from the communications department to different areas and positions within the company and terminating others. The plan included outsourcing the photography work, thereby eliminating the one remaining in-house photographer, Mr. McPheeters. Vice President Cole approved the preliminary proposal and asked Smith to consult Diane Retzke, Director of Employee Relations for Human Resources. Retzke reviewed the proposal to ensure that it was fair and that any plan to change or eliminate a position was based on objective business reasons. For a period of time following his termination, Mr. McPheeters continued to work for Black & Veatch on a contract basis. Black & Veatch has not since employed a staff photographer.

Following the trial, the jury entered a verdict in favor of Black and Veatch. On appeal, Mr. McPheeters challenges several rulings made by the district court both before and during trial.

II.

No error in either the admission or the exclusion of evidence and no error or defect in any ruling or order or in anything done or omitted by the court ... is ground for granting a new trial or for setting aside a verdict ... unless refusal to take such action appears to the court inconsistent with substantial justice. The court at every stage of the proceeding must disregard any error or defect in the proceeding which does not affect the substantial rights of the parties.

Fed.R.Civ.P. 61; see also Fed.R.Evid. 103(a)(1),(2) (stating error may not be predicated on a ruling admitting or excluding evidence unless a substantial right is affected and an objection or offer of proof is made). Consistent with this standard we accord the district court "wide discretion in admitting and excluding evidence, and its decision will not be disturbed unless there is a clear and prejudicial abuse of discretion." Bennett v. Hidden Valley Golf and Ski, Inc., 318 F.3d 868, 878 (8th Cir.2003) (internal quotations omitted). We will not reverse a judgment on the basis of erroneous evidentiary rulings absent a showing that those rulings had a substantial influence on the jury's verdict. Nichols v. Am. Nat'l Ins. Co., 154 F.3d 875, 889 (8th Cir.1998).

A. Pretrial Rulings.

Prior to trial, Mr. McPheeters' attorney sought a ruling on the admissibility of three types of evidence regarding other complaints of discrimination that he wanted to reference in his opening statement: (1) a 27-minute videotape of the deposition testimony of Diane Retzke, Director of Employee Relations for Human Resources; (2) the company's answer to Interrogatory No. 7, requesting every complaint of age discrimination brought against...

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