Gross v. Fbl Financial Services, Inc.

• Decision Date: 14 May 2008
• Docket Number: No. 07-1490.,No. 07-1492.,07-1490.,07-1492.
• Citation: 526 F.3d 356
• Parties: Jack GROSS, Appellant/Cross-Appellee, v. FBL FINANCIAL SERVICES, INC., Defendant, FBL Financial Group, Inc., Appellee/Cross-Appellant, Iowa Farm Bureau Federation; Farm Bureau Mutual Insurance Company; William Oddy, Defendants.
• Court: U.S. Court of Appeals — Eighth Circuit

526 F.3d 356

Jack GROSS, Appellant/Cross-Appellee, v. FBL FINANCIAL SERVICES, INC., Defendant, FBL Financial Group, Inc., Appellee/Cross-Appellant, Iowa Farm Bureau Federation; Farm Bureau Mutual Insurance Company; William Oddy, Defendants.

No. 07-1490.

No. 07-1492.

United States Court of Appeals, Eighth Circuit.

Submitted: November 1, 2007.

Filed: May 14, 2008.

Frank Boyd Harty, argued, Des Moines, IA, Debra L. Hulett, on the brief, Des Moines, IA, for Appellant/Cross-Appellee.

Michael J. Caroll, Des Moines, IA, Beth A. Townsend, on the brief, West Des Moines, IA, for Appellee/Cross-Appellant.

Before MELLOY, COLLOTON, and BENTON, Circuit Judges.

COLLOTON, Circuit Judge.

FBL Financial Group (FBL) appeals a jury verdict in favor of Jack Gross, an employee who alleged that FBL violated the Age Discrimination in Employment Act (ADEA) by demoting him because of his age in 2003. FBL challenges the final jury instructions adopted by the district court, the district court's decision to exclude certain testimony, and the court's denial of FBL's motions for judgment as a matter of law. Gross cross-appeals the district court's order denying an award of attorney's fees. Because we conclude that the jury was not instructed correctly on a material issue, we reverse and remand for a new trial.

I.

Jack Gross was born in 1948. He has worked at FBL Financial Group since 1987. He was promoted up the ranks in 1990, 1993, 1997, and 1999, arriving ultimately at the position of Claims Administration Vice President. During a company reorganization in 2001, Gross was reassigned to the position of Claims Administration Director. His job responsibilities did not change, but Gross viewed this reassignment as a demotion, because it reduced his points under the company's point system for salary grades. In 2003, FBL reassigned Gross to the position of Claims Project Coordinator. At that time, many responsibilities associated with the Claims Administration Director position were transferred to a new position, entitled Claims Administration Manager, which was assigned to Lisa Kneeskern, an employee in her early forties. Gross's new Claims Project Coordinator position had the same salary points and pay grade as Kneeskern's position, but Gross contends that the reassignment was a demotion, because Kneeskern assumed the functional equivalent of Gross's former position, and his new position was ill-defined and lacked a job description or specifically assigned duties.

Gross brought suit in April 2004, alleging that FBL demoted him in 2003 because of his age, in violation of the ADEA. After a five-day trial, a jury found in favor of Gross, and awarded him $46,945 in lost compensation. During trial, the district court excluded testimony from FBL's vice president of claims concerning information he had received from Gross's co-workers regarding Gross's performance. The court also overruled FBL's objections to final jury instructions, including those that set forth the elements of the claim and the burdens of proof, and denied FBL's motion for judgment as a matter of law. After trial, the district court denied FBL's renewed motion for judgment as a matter of law based on sufficiency of the evidence, and FBL's motion for a new trial based on the alleged evidentiary errors. These matters give rise to the present appeal.

II.

We consider first FBL's objection to the final jury instructions concerning the elements of the claim and the burden of proof. The ADEA makes it unlawful for an employer to take adverse action against an employee "because of such individual's age." 29 U.S.C. § 623(a). This prohibition was "derived in haec verba from Title VII," Lorillard v. Pons, 434 U.S. 575, 584, 98 S.Ct. 866, 55 L.Ed.2d 40 (1978), which makes it unlawful to discriminate against an individual "because of such individual's race, color, religion, sex, or national origin." 42 U.S.C. § 2000e-2(a).

The Supreme Court, in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973), and Price Waterhouse v. Hopkins, 490 U.S. 228, 109 S.Ct. 1775, 104 L.Ed.2d 268 (1989), addressed the burdens of proof and persuasion that apply to a plaintiff's claim that he was discriminated against "because of" an enumerated factor under Title VII. Given the similarity of language between Title VII and the ADEA, we have applied both decisions to our analysis of claims under the ADEA. Thomas v. First Nat'l Bank of Wynne, 111 F.3d 64, 66 (8th Cir. 1997); see also Holley v. Sanyo Mfg., Inc., 771 F.2d 1161, 1164 (8th Cir.1985) (applying McDonnell Douglas to an ADEA case, "[b]ecause the ADEA grew out of Title VII ... and because much of the language of the ADEA parallels that of Title VII").

McDonnell Douglas established a burden-shifting framework for evaluating claims of discrimination. Under this framework, a plaintiff must first establish a prima facie case of discrimination, which creates a rebuttable presumption of a statutory violation, and shifts the burden of production to the employer. The employer must rebut this presumption by producing a legitimate, non-discriminatory reason for its actions. When it does so, the presumption disappears, and "the sole remaining issue is discrimination vel non." Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 143, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000) (internal quotation omitted). The burden of persuasion remains with the plaintiff throughout this analysis. Id.

Price Waterhouse was a splintered decision that addressed the proper approach to causation where an employer is motivated by both permissible and impermissible considerations. We have held that Justice O'Connor's opinion concurring in the judgment is the controlling opinion that sets forth the governing rule of law. See Erickson v. Farmland Indus., Inc., 271 F.3d 718, 724 (8th Cir.2001). According to this rule, to justify shifting the burden of persuasion on the issue of causation to the defendant, a plaintiff must show "by direct evidence that an illegitimate factor played a substantial role" in the employment decision. Price Waterhouse, 490 U.S. at 275, 109 S.Ct. 1775 (O'Connor, J., concurring in judgment). "Direct evidence" for these purposes is evidence "showing a specific link between the alleged discriminatory animus and the challenged decision, sufficient to support a finding by a reasonable fact finder that an illegitimate criterion actually motivated" the adverse employment action. Thomas, 111 F.3d at 66 (internal quotation and brackets omitted). It does not extend to "stray remarks in the workplace," "statements by nondecisionmakers," or "statements by decisionmakers unrelated to the decisional process itself." Price Waterhouse, 490 U.S. at 277, 109 S.Ct. 1775 (O'Connor, J., concurring in judgment).

When a plaintiff makes the requisite showing of direct evidence, the "burden then rests with the employer to convince the trier of fact that it is more likely than not that the decision would have been the same absent consideration of the illegitimate factor." Id. at 276, 109 S.Ct. 1775. Under this approach, a district court should receive all of the evidence in a case, and then determine "whether the McDonnell Douglas or Price Waterhouse framework properly applies to the evidence before it." Id. at 278, 109 S.Ct 1775. If a plaintiff fails to present "direct evidence" that an illegitimate criterion played a "substantial role" in the employment decision, then the case should be decided under McDonnell Douglas framework, and the burden of persuasion should remain at all times with the plaintiff. Id. at 278-79, 109 S.Ct. 1775.

The district court in this case charged the jury that Gross had the burden to prove that (1) FBL demoted Gross to Claims Project Coordinator on January 1, 2003, and (2) that Gross's age was "a motivating factor" in FBL's decision to demote Gross. Final Jury Instruction No. 11. The instruction continued that the jury's verdict must be for FBL, however, "if it has been proved by a preponderance of the evidence that defendant would have demoted plaintiff regardless of his age." Id.

Under our court's application of Price Waterhouse, this instruction was not correct. The Price Waterhouse rule calls for a shift in the burden of persuasion only upon a demonstration by direct evidence that an illegitimate factor played a substantial role in an adverse employment decision. See 490 U.S. at 275, 109 S.Ct. 1775 (O'Connor, J., concurring in judgment); Erickson, 271 F.3d at 724. The disputed instruction, however, provided that if Gross proved by any evidence — direct or otherwise — that age was "a motivating factor" in the employment decision, then the burden shifted to FBL to prove that its decision would have been the same absent consideration of Gross's age.¹ Gross conceded that he did not present "direct evidence" of discrimination, (Appellant's App. 596), so a mixed motive instruction was not warranted under the Price Waterhouse rule. Gross's claim should have been analyzed under the McDonnell Douglas framework. The burden of persuasion should have remained with the plaintiff throughout, and the jury should have been charged to decide whether the plaintiff proved that age was the determining factor in FBL's employment action. See Rockwood Bank v. Gaia, 170 F.3d 833, 842-43 (8th Cir.1999).

Gross contends that there was no error, because the Civil Rights Act of 1991 and the Supreme Court's decision in Desert Palace, Inc. v. Costa, 539 U.S. 90, 123 S.Ct. 2148, 156 L.Ed.2d 84 (2003), supersede Price Waterhouse and our precedents applying Price Waterhouse to the ADEA. Section 107 of the 1991 Act amended Title VII by adding § 2000e-2(m): "Except as otherwise provided in this subchapter, an unlawful employment practice is established when the complaining party demonstrates that race, color, religion, sex, or national origin was a motivating factor for any employment practice, even though other factors also motivated the...