Pruet Production Co. v. Ayles

• Decision Date: 17 March 1986
• Docket Number: No. 84-4686,84-4686
• Citation: 784 F.2d 1275
• Parties: 40 Fair Empl.Prac.Cas. 619, 39 Empl. Prac. Dec. P 36,035 PRUET PRODUCTION CO. and Pruet Oil Company, Plaintiffs-Appellees, Cross-Appellants, v. Roy G. AYLES, Defendant-Appellant, Cross-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1275

784 F.2d 1275

40 Fair Empl.Prac.Cas. 619,

39 Empl. Prac. Dec. P 36,035

PRUET PRODUCTION CO. and Pruet Oil Company Plaintiffs-Appellees, Cross-Appellants, v. Roy G. AYLES, Defendant-Appellant, Cross-Appellee.

No. 84-4686.

United States Court of Appeals Fifth Circuit.

March 17, 1986.

Cupit & Maxey, John L. Maxey, II, Jackson, Miss., for defendant-appellant, cross-appellee.

Jolly, Miller & Milam, Armin J. Moeller, Jr., W. Thomas Siler, Jr., Jackson, Miss., for plaintiffs-appellees, cross-appellants.

Appeals from the United States District Court for the Southern District of Mississippi.

Before POLITZ, HIGGINBOTHAM and JONES, Circuit Judges.

EDITH HOLLAN JONES, Circuit Judge:

A terminated employee and his former employer appeal from adverse directed verdicts on their respective Title VII age discrimination and pendent state law breach of contract claims. For the reasons set forth below, we affirm the trial court's granting of both directed verdicts.

FACTS AND PROCEDURAL BACKGROUND

Roy G. Ayles, who had both an accounting and a law degree, began working for Pruet family entities in 1970, when he was hired as the sole accountant for a predecessor company. He became controller and secretary-treasurer of the company, and retained The rapid growth, however, placed increasing strains on the company's accounting capabilities. The company turned to outside consultants who found the largely manual method of recordkeeping inadequate and recommended an integrated computer system. In November 1980, a 32-year old accountant with computer experience, Chuck Bridges, was interviewed by Ayles and hired to assist him in accounting. Within a few months, Ayles was devoting 80 percent of his time to division order work.

                these offices when the present Pruet entities (hereinafter collectively the "company") were formed in 1978. 1   As secretary-treasurer and controller, Ayles was in charge of the accounting and division order departments and also performed most of the personnel functions.  In addition to receiving an annual salary of $33,000 at the time of the suit, Ayles participated in a profit-sharing program, whereby he received 10 percent of company profits before taxes.  A substantial portion of the company's profits was derived from a system, instituted by Ayles in 1974, of investing income from the well properties in short-term securities, and retaining the interest earned before the payments were disbursed to the interest holders.  As the oil business boomed in the late 1970's, the company prospered, so that by 1980, Ayles's profit-sharing payment had risen dramatically to approximately $120,000
                

Problems with the accounting systems continued to mount, particularly around tax time in April. Ayles suffered a heart attack that month and underwent heart surgery. In early May, the partners, Chesley Pruet, and his two sons-in-law Ricky Calhoon and Randy James, decided to convert to an in-house computer system. A month later, Pruet, upon the advice of an outside consultant, decided to remove Ayles as controller and secretary-treasurer and place Bridges in charge of all accounting matters.

On June 17, 1981, Pruet, Calhoon and James met with Ayles and informed him of their decision. Ayles, who was then 56, was told that he could continue working as division order manager at his same salary until the end of the year, but that his profit-sharing plan would terminate effective June 30, 1981. Pruet offered to enter into an employment agreement with Ayles whereby he would receive $120,000 at the end of the year. In mid August, Ayles met again with the partners and asked point blank if he was being let go because of the profit-sharing plan. Both sides agree that Pruet emphatically denied that was the reason. The partners and outside counsel who were at the meeting testified that the change was prompted by their belief that Ayles would not be able to handle the change over to the proposed computer system and that this belief was communicated to Ayles. Ayles denies being told this, and testified that the only explanation ever given was a subsequent offhand comment by James about "changing times." Ayle's former assistant, Chuck Bridges, became controller on July 1, 1981, and James and Calhoon, then 31 and 28 years old respectively, took over Ayles's mostly pro forma duties as secretary-treasurer.

Throughout June, July and August, Ayles and the company's outside counsel negotiated the terms of the employment agreement, which was formally executed on August 31, 1981. The agreement provided that as of July 1, 1981, Ayles had relinquished his responsibilities as controller and secretary-treasurer "because of health conditions and work load" (an insertion Ayles had insisted on), and assumed the duties of division order manager. Ayles was to remain employed until December 31, 1981 at the same rate of compensation and fringe benefits, except the profit-sharing plan. The company agreed to pay Ayles $120,000 at the end of the year. The agreement also provided that Around December 22, 1981, the company asked that Ayles sign a release prior to his departure. Ayles requested that the company give him a release also. The parties disagree on whether Ayles ever agreed to sign the release. That afternoon, Ayles went to the local EEOC office and consulted a lawyer. When, on January 4, 1982, Ayles returned to pick up his severance pay, he refused to sign the release. The company, in turn, refused to give him the $120,000. Ayles contends that during this last encounter James finally explained his cryptic "changing times" remark by telling him the company wanted to restructure with younger people. James denies ever making this statement. Calhoon, who was also at the meeting, testified James never said it.

Ayles and the company would negotiate whether and under what conditions Ayles would continue employment after January 1, 1982. Subsequent discussions proved unsuccessful, however, and in November 1981, Ayles announced he would leave the company at the end of the year. The company thereupon hired Stan Kynerd, then 28, to replace Ayles as division order manager in early December.

On January 21, 1982, Ayles filed an EEOC age discrimination charge against the company. While the charge was pending, the company brought a declaratory judgment action in federal district court, requesting declaration of the parties' rights under the Age Discrimination in Employment Act, 29 U.S.C. Secs. 621 et seq. (ADEA), as well as their rights under the employment agreement. Ayles responded with a counterclaim, alleging that the company had breached the employment agreement by failing to pay him his severance pay and had violated the ADEA by terminating him because of his age. When EEOC's unsuccessful conciliation attempts terminated, the parties proceeded with their civil suit.

The company moved to dismiss the age discrimination claim on the grounds that it was time-barred, because Ayles had not filed his charge with EEOC within the 180-day period mandated by 29 U.S.C. Sec. 626(d)(1). Ayles responded that the time period should be equitably tolled because of the company's misleading him as to the reason for his being removed as controller. In pretrial proceedings, the district court denied a summary judgment motion filed by the company on the ground that Ayles's discrimination claim was time-barred, as he had not filed his charge with EEOC within the 180-day period mandated. Following a three-day jury trial, however, the court directed a verdict for the company on the equitable tolling issue and for Ayles on the breach of employment agreement claim. Each side appeals. ²

ANALYSIS

1. Age Discrimination Claim

Ayles initially contends that the trial court's denial of the company's motion for summary judgment precluded a directed verdict on the equitable tolling issue because the evidence that was presented to the jury was essentially the same as the evidence submitted at the pretrial hearing. This contention erroneously assumes that the standards for a summary judgment denial and for a directed verdict ruling are the same. See Boeing Co. v. Shipman, 411 F.2d 365, 374-75 (5th Cir.1969) (en banc ). At the summary judgment stage, the court focusses on whether there exists a genuine issue of material fact; once the evidence is all in, the trial court is entitled to examine the actual proof and determine if the proof falls short of presenting a jury question. Matthews v. Ashland Chemical, Inc., 770 F.2d 1303, 1307 (5th Cir.1985) (quoting Nunez v. Superior Oil Co., 644 F.2d 534, 535 (5th Cir.1981) ). See also 5A Moore's Federal Practice p 50.03 (1985). ³ The standard, then, under which we assess the trial court's directed verdict on the equitable tolling issue is whether "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...." Boeing v. Shipman, 411 F.2d at 374.

Ayles seeks, on equitable grounds, to modify the requirement of ADEA that before an aggrieved party can commence a civil action on an age discrimination claim he must file a charge with EEOC "within 180 days after the alleged unlawful practice occurred." 29 U.S.C. Sec. 626(d)(1). The timely filing of a charge is not a jurisdictional requirement in the sense that failure to do so deprives the district court of subject matter jurisdiction, but is akin to a limitations statute which a plaintiff must satisfy as a condition precedent to filing suit. Zipes v. Trans World Airlines, Inc., 455 U.S. 385, 393, 102 S.Ct. 1127, 1132, 71 L.Ed.2d 234 (1982); Cruce v. Brazosport Ind. Sch. Dist., 703 F.2d 862, 863 (5th Cir.1983); Coke v. General Adjustment Bureau, Inc., 640 F.2d 584 (5th Cir.1981) (en banc ). As with limitations statutes, the 180-day filing period is subject to tolling where equitable considerations are present. Id.

This court established the oft-cited test for equitable tolling in ...