Branch v. Cemex, Inc.

• Decision Date: 20 June 2012
• Docket Number: CIVIL ACTION NO. H-11-1953
• Parties: CLAIR M. BRANCH, Plaintiff, v. CEMEX, INC., Defendant.
• Court: U.S. District Court — Southern District of Texas

CLAIR M. BRANCH, Plaintiff,

v.CEMEX, INC., Defendant.

CIVIL ACTION NO. H-11-1953

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION

Dated: June 20, 2012

MEMORANDUM AND OPINION

This is an age discrimination suit. The plaintiff, Clair M. Branch, worked as a regional manager for CEMEX, Inc. and Rinker Materials Corporation ("CEMEX").¹ CEMEX terminated Branch's employment as regional manager and entered into a one-year consulting agreement with him that was not renewed. Branch alleges that the defendants terminated his employment agreement and ended the consulting arrangement because of his age. (Docket Entry No. 4). CEMEX has moved for summary judgment. (Docket Entry No. 20). Branch has responded, CEMEX has replied, and Branch has surreplied. (Docket Entry Nos. 21-22, 24). CEMEX has also moved to strike some of Branch's summary judgment evidence, and Branch has responded to that motion. (Docket Entry Nos. 23, 25).²

Based on the motions and related filings, the record, and the applicable law, this court grants CEMEX's motion for summary judgment and denies as moot its motion to strike. Final judgment is entered by separate order. The reasons for these rulings are explained below.

I. Background

CEMEX supplies building materials. In January 1985, CEMEX hired Branch as a general manager. Branch, who was born on March 30, 1937, was 47 at the time. Two years later, in 1987, CEMEX promoted Branch to regional manager. (Docket Entry No. 20, Ex. F). On August 1, 2001, Branch and CEMEX signed an Employment Agreement under which Branch would be the "General Manager Hydro Conduit Houston," reporting directly to the "Southern Region Manager, Hydro Conduit Division." (Docket Entry No. 20, Ex. A, ¶ 2). The parties refer to this position as the "regional manager" position. Under the 2001 Employment Agreement, Branch was responsible for "sales and production, bottom line profit, and market share" for CEMEX's facilities in the Houston market. (See Docket Entry No. 20, Ex. C, at 32-37). The Agreement stated that Branch's employment would end on July 1, 2004 but would automatically extend annually unless either Branch or CEMEX gave 180 days' notice of intent not to extend. (Docket Entry No. 20, Ex. A, ¶ 1). The Employment Agreement also specified what benefits Branch would receive if CEMEX terminated his employment or he resigned, including retirement and salary continuation benefits. (Id., ¶ 4).

From 1996 through 2001, Branch reported directly to Ron Metzger, who then served as vice president of sales and marketing. Metzger's title later changed to chief operating officer of CEMEX's concrete pipe division. (Docket Entry No. 20, Ex. G, at 10-11, 22-24). After 2001, Metzger did not directly supervise Branch. Beginning in December 2007, Branch reported to Francisco Aguilera, vice president and general manager for CEMEX's concrete pipe division. (Docket Entry No. 20, Ex. H, at 9, 13). In 2008, Metzger's title reverted to vice president of salesand marketing, but his responsibilities remained the same. (See Docket Entry No. 20, Ex. G, at 10-11, 22-24).

Undisputed evidence shows that Branch performed well under the Employment Agreement for an extended period. Metzger testified that Branch was a "productive employee" from 1996 through 2001. (Docket Entry No. 20, Ex. G, at 23). Branch's 2007 performance evaluation stated that he was "clearly performing to expectations and exceeding requirements often." In 2008 and 2009, Branch was evaluated as "on target," "above target," or "significantly above target" in meeting his performance objectives. (Docket Entry No. 21, Ex. C, ¶ 5).

Metzger testified that he became concerned about Branch's work beginning in 2008. Metzger believed that Branch did not show "any great in-depth knowledge" about matters for which he was responsible and was not as interested in the business as he had been in the past. Metzger was also concerned that Branch might be providing him inaccurate information. (Docket Entry No. 20, Ex. G, at 39-42, 46-47). Metzger voiced these concerns to Aguilera several times. Metzger also told Branch at least once that he was worried about getting inaccurate information. (Id., at 39-42, 50-51; see also id., at 46). At least one employee who worked under Branch, however, testified that he saw no decline in Branch's work performance during this period. (Docket Entry No. 21, Ex. O, at 11).

In mid-2008, Aguilera took steps to terminate Branch's Employment Agreement. On July 29, 2008, he e-mailed Marla Roberson, CEMEX's vice president for human resources, stating his desire to make a termination offer to Branch. Aguilera wrote that he had three goals in making this offer: first, keeping Branch involved with CEMEX for one year after the termination to help Branch's customers in the transition to working with others at CEMEX; second, ensuring anoncompete period of at least 18 months; and third, providing Branch with "good terms, and fair to what it was established in his employment contract." Aguilera asked Roberson to submit a proposed termination offer consistent with these goals as soon as possible. Aguilera concluded the e-mail by writing: "We still have Ron [Metzger]'s, and Mike Shook's contracts which should be next on the list. Now, my priority is Clair." (Docket Entry No. 21, Ex. H). At the time, Branch was in his seventies, Metzger in his sixties, and Shook in his fifties. (Docket Entry No. 21, Ex. C, ¶ 3).

During his deposition, Aguilera cited numerous reasons for deciding to terminate Branch's Employment Agreement.³ They included the following:

• Branch "was difficult to manage due to his strong personality."

• Branch did not demonstrate a clear understanding of the production side of the business, which he was responsible for overseeing.

• Branch did not adequately engage in efforts or plans to reduce production costs.

• Branch was not actively participating in ensuring safety at the CEMEX plants under his supervision.

• Branch was mismanaging (or ignoring) one of these plants.

• Branch had engaged in "questionable management practices" by allowing relatives to work in the same chain of command.

• Branch missed an important meeting of regional managers in July 2008 to go on vacation. Though Aguilera told Branch it was "okay" for him to miss the meeting, the meeting had been organized in May and Branch had waited until June to ask if he could take his planned vacation.

(See Docket Entry No. 20, Ex. H, at 42-51, 89-90).

Aguilera also emphasized that because of the bad economic climate, CEMEX was reducing its workforce and looking for ways to cut costs and improve profitability. (See id., at 51-55). As part of a reduction in force, CEMEX consolidated its regions from twelve to nine, demoting three regional managers to general managers in the process. (Id., at 58). CEMEX's reduction in force and need to cut costs and increase profits were additional reasons for Aguilera's decision to terminate Branch's employment. Aguilera testified that he shared these reasons with Roberson. (Id., at 62-65). Aguilera also testified that he had told Branch more than once about the need to reduce production costs. (Id., at 41-42).

On December 23, 2008, Aguilera sent Branch a letter, which reads in relevant part as follows:

As we discussed, this letter serves as formal notice that Cemex, Inc. is terminating your Employment Agreement, as amended, when the employment period expires on July 1, 2009. The Date of Termination shall be July 1, 2009.

Although your employment will terminate next year, you have several obligations which will continue after your employment ends. Under Section 7 of the Employment Agreement, for a period of eighteen months following the Date of Termination (until December 31, 2010), you cannot compete with Cemex, solicit Cemex employees, divulge confidential information or disparage Cemex. I enclose a copy of the Employment Agreement for your review.

Cemex is interested in retaining you as a consultant following the termination of the Employment Agreement. We propose that the consulting arrangement have an initial 12-month duration, subject to extension if mutually agreeable. If you are interested in this arrangement, we will formalize it with a written Consulting Agreement prior to July 1, 2009.

(Docket Entry No. 20, Ex. B).

After receiving this letter, Branch told Aguilera "that [he] was not interested in retiring and that as long as [his] health was good [he] would like to continue to work as long as [he] could."⁴ Branch did not recall Aguilera's response. (Docket Entry No. 20, Ex. C, at 43). Branch testified that he had previously told Aguilera and Metzger at least half a dozen times that he did not want to retire and instead wanted to continue working under the Employment Agreement as long as he remained in good health. (Docket Entry No. 20, Ex. C, at 125).⁵ Metzger testified that he was neither involved in nor consulted about the decision to terminate Branch's Employment Agreement. (Docket Entry No. 20, Ex. G, at 34-35).

On May 15, 2009, in response to Branch's inquiry about what benefits he was eligible to receive, Roberson wrote a letter explaining the benefits detailed in paragraph four of Branch's Employment Agreement. She explained that the benefits included 18 months of salary continuation "[f]rom the date of termination." (Docket Entry No. 20, Ex. D). On June 25, 2009, a week before the Employment Agreement was to end, a human resources manager e-mailed Branch to have him complete an exit-interview form. (Docket Entry No. 20, Ex. E).

On July 1, 2009—the termination date listed in the December 2008 letter from Aguilera—Roberson sent an e-mail to CEMEX's concrete pipe division announcing that, "[a]fter more than 25 years, Clair Branch is retiring." The e-mail also announced that Metzger—who wasthen 60, 13 years younger than Branch⁶ —would assume Branch's regional manager position in addition to continuing as vice president. (Docket Entry No. 20, Ex. J).

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