Denison v. Swaco Geolograph Co.

• Decision Date: 16 August 1991
• Docket Number: No. 90-6021,90-6021
• Citation: 941 F.2d 1416
• Parties: 59 Fair Empl.Prac.Cas. (BNA) 795, 57 Empl. Prac. Dec. P 40,920, 33 Fed. R. Evid. Serv. 1066 Richard Paul DENISON, Plaintiff-Appellee, v. SWACO GEOLOGRAPH COMPANY, Defendant-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1416

941 F.2d 1416

59 Fair Empl.Prac.Cas. (BNA) 795,

57 Empl. Prac. Dec. P 40,920,

33 Fed. R. Evid. Serv. 1066

Richard Paul DENISON, Plaintiff-Appellee, v. SWACO GEOLOGRAPH COMPANY, Defendant-Appellant.

No. 90-6021.

United States Court of Appeals Tenth Circuit.

Aug. 16, 1991.

John Michael Johnston (David Morse and Jay D. Adkisson with him on the brief), of Claro & Johnston, Oklahoma City, Okl., for plaintiff-appellee.

Howard Janco, Dallas, Tex. (Ronald R. Hudson and J. William Archibald of Holloway Dobson Hudson & Bachman, Oklahoma City, Okl., Terry A. Hall, Tulsa, Okl., on the brief), for defendant-appellant.

Before BRORBY and EBEL, Circuit Judges, and KANE, Senior District Judge ^*.

KANE, Senior District Judge.

Swaco Geolograph Company appeals the district court's denial of its motion for judgment notwithstanding the verdict, new trial, or remittitur in an action under the Age Discrimination in Employment Act of 1967 (ADEA), as amended, 29 U.S.C. §§ 621-634. The jury returned a verdict in favor of the plaintiff, Richard Denison, on his ADEA claim, awarding damages in the amount of $369,005.87. That amount was subsequently reduced to $285,338.24. On appeal, Swaco argues that its motion should have been granted because (1) Denison did not establish a prima facie case of discrimination under the ADEA, (2) he did not show that Swaco's reasons for terminating him were pretextual or that age was a determining factor in his termination, (3) the court erred in its evidentiary rulings, (4) the court did not enforce the pretrial order, (5) the court improperly submitted the issue of front pay to the jury, (6) in combination, the above rulings constituted reversible error. We affirm.

Denison was employed by Dresser Industries, Inc. ("Dresser") or one of its affiliates since 1958. He received several promotions through 1975, when he was named Area Manager of the Mid-Continent Division of the Swaco Division of Dresser. In the summer of 1987, Dresser and Geolograph Pioneer, Inc. ("Geolograph"), a competitor of Dresser, began discussions of a possible merger of certain operations. On September 1, 1987, the two companies formed a joint venture by combining the Swaco Division of Dresser with Geolograph. The new company was called the Swaco Geolograph Company ("Swaco"). Denison was transferred and became an employee of that company.

Shortly after Swaco was formed, corporate officials decided to eliminate redundant staff positions. Denison's equivalent at Geolograph was Frank Ludwell. On September 4, 1987, Denison was notified of his termination from Swaco, and Ludwell was retained to fill Denison's former position. At the time of the termination, Denison was 49 years old and Ludwell was 34 years old. Swaco officials testified that Ludwell was chosen over Denison solely on the basis of comparative sales figures between the equivalent pre-merger divisions of Swaco and Geolograph. It is undisputed that neither Denison nor Ludwell were involved in sales; both worked in the service departments of their respective divisions.

On October 11, 1988, Denison commenced the instant action, naming as defendants Dresser, Geolograph and Swaco and alleging violations of ERISA, breach of implied employment contract, fraudulent misrepresentation and age discrimination under the ADEA. All claims except the ADEA claim against Swaco were dismissed voluntarily or by the court before trial. After a two-day trial, the jury reached a verdict in favor of Denison, awarding him $18,588.65 in back pay, $18,588.65 in liquidated damages and $331,828.57 in future damages. The latter amount was subsequently reduced by the court to $248,160.94 to account for present value. Swaco then moved for judgment notwithstanding the verdict, new trial or remittitur. The court denied the motion, and Swaco now appeals.

In an appeal from the denial of a motion for judgment notwithstanding the verdict, we "must view the evidence and indulge all inferences in favor of the party opposing the motion and ' " 'cannot weigh the evidence, consider the credibility of witnesses or substitute [our] judgment for that of the jury.' " ' " Lucas v. Dover Corp., Norris Div., 857 F.2d 1397, 1400 (10th Cir.1988) (citations omitted). Such motions should be sparingly granted and are proper "only when 'the evidence points but one way and is susceptible to no reasonable inferences which may sustain the position of the party against whom the motion is made.' " Id. (citation omitted). We now consider whether error as to the following matters required the trial court to grant Swaco's motion for judgment notwithstanding the verdict, remittitur or a new trial.

I. Prima Facie Case.

Swaco's first argument in this appeal is that Denison failed to establish a prima facie case of discrimination because he did not offer direct evidence that his age was considered by those who terminated him and instead he relied substantially on circumstantial evidence to prove his case. As we noted in Lucas v. Dover Corp., Norris Division, the plaintiff in an ADEA case need not bring forth direct evidence of his employer's discriminatory intent to establish a prima facie case:

A party may attempt to "meet his burden directly, by presenting direct or circumstantial evidence that age was a determining factor in his discharge." Or, more typically, a party may rely on the proof scheme established in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802-04, 93 S.Ct. 1817, 1824-25, 36 L.Ed.2d 668 (1973) and Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 252-56, 101 S.Ct. 1089, 1093-35, 67 L.Ed.2d 207 (1981) and applicable to ADEA cases. Under that proof scheme, to set forth a prima facie case of age discrimination, a plaintiff must ordinarily prove that "(1) the affected employee was within the protected age group; (2) [he] was doing satisfactory work; (3) [he] was discharged despite the adequacy of this work; and (4) a younger person replaced [him]."

Id. at 1400 (citations omitted). The McDonnell Douglas proof scheme is necessary because in most discrimination cases, whether based on age or other factors, there is rarely direct evidence that the employer's motive was discriminatory. See Summers v. Communication Channels, Inc., 729 F.Supp. 1234, 1237 (N.D.Ill.1990). Therefore, the plaintiff is permitted to use circumstantial evidence to show discrimination by establishing the above elements of a prima facie case. Id. Contrary to Swaco's suggestion, there was no requirement that Denison present direct evidence of discrimination to establish a prima facie case. See Merrick v. Northern Natural Gas Co., 911 F.2d 426, 429 (10th Cir.1990) ("The plaintiff is not required to come forward with direct evidence of discriminatory intent. He is only required to show 'that the employer's proffered justification is unworthy of credence.' "); Krause v. Dresser Indus., Inc., 910 F.2d 674, 677 (10th Cir.1990) (same).

Swaco also asserts that Denison did not make out a prima facie case because he did not present persuasive evidence that his job performance was satisfactory under the second element of McDonnell Douglas proof scheme. Swaco acknowledges that Denison offered evidence that he had received promotions and pay increases during his tenure, was given no warnings about unsatisfactory performance, and the divisions he worked for were generally profitable. Swaco contends, however, that "plaintiff's evidence was not as probative as he claims," because his last promotion was in 1975, he received a demotion in 1980 and had several lateral transfers with no increase in responsibilities.

Swaco's arguments go to the weight of the evidence of satisfactory performance, not Denison's initial burden to produce such evidence. Clearly, Denison met his burden of production by introducing some evidence of good performance. As the court observed in Powell v. Syracuse University, 580 F.2d 1150, 1155 (2d Cir.), cert. denied, 439 U.S. 984, 99 S.Ct. 576, 58 L.Ed.2d 656 (1978), to require the plaintiff in an age discrimination case to demonstrate that his performance was flawless

unnecessarily collapses the steps suggested by McDonnell Douglas by shifting considerations which are more appropriate to the employer's rebuttal phase to the earlier requirement that the employee demonstrate competence to perform the specified work. This not merely of formal consequence, for it has the practical effect of requiring the employee to prove not merely that he possesses the basic skills necessary for the job, but rather that he is the best-qualified candidate for the job, under the criteria suggested by the employer.... [T]his burden is extremely difficult to meet if the employer's claim that the employee did not meet some unstated level of performance is sufficient to negate the employee's offer of proof.

Thus, the Powell court, and others since, have required the plaintiff to show only that " 'his performance was of sufficient quality to merit continued employment, thereby raising an inference that some other factor was involved in the decision to discharge him.' " Id. (citing Flowers v. Crouch-Walker Corp., 552 F.2d 1277, 1283 (7th Cir.1977)); see also La Montagne v. American Convenience Prods., Inc., 750 F.2d 1405, 1413-14 (7th Cir.1984) (plaintiff established prima facie case by introducing evidence that job performance was generally satisfactory, despite other evidence to the contrary).

We agree with the Powell court that "proof of competence sufficient to make out a prima facie case of discrimination was never intended to encompass proof of superiority or flawless performance. If an employer is dissatisfied with the performance of an employee, he can properly raise the issue in rebuttal of the plaintiff's showing." Powell, 580 F.2d at 1155. We conclude that Denison made a prima facie showing under the second element of the McDonnell Douglas test.

II. Sufficiency of Evidence of Pretext and that Age was a Determining Factor.

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