Keelan v. Majesco Software, Inc.

• Decision Date: 12 April 2005
• Docket Number: No. 04-10317.,04-10317.
• Citation: Keelan v. Majesco Software, Inc., 407 F.3d 332 (5th Cir. 2005)
• Parties: Ivor KEELAN and David Sullivan, Plaintiffs-Appellants, v. MAJESCO SOFTWARE, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

407 F.3d 332

Ivor KEELAN and David Sullivan, Plaintiffs-Appellants, v. MAJESCO SOFTWARE, INC., Defendant-Appellee.

No. 04-10317.

United States Court of Appeals, Fifth Circuit.

April 12, 2005.

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Durwood Douglas Crawford (argued), Goins, Underkofler, Crawford & Langdon, Dallas, TX, for Plaintiffs-Appellants.

John L. Ross (argued), Lisa Ann Royee, Thompson, Coe, Cousins & Irons, Dallas, TX, for Defendant-Appellee.

Joseph A. Seiner (argued), E.E.O.C., Washington, DC, for E.E.O.C., Amicus Curiae.

Appeal from the United States District Court for the Northern District of Texas.

Before REAVLEY, DeMOSS and PRADO, Circuit Judges.

DeMOSS, Circuit Judge:

Plaintiffs-Appellants Ivor Keelan ("Keelan") and David Sullivan ("Sullivan") (together, "Appellants") appeal from the district court's granting of summary judgment in favor of Defendant-Appellee Majesco Software, Inc. ("Majesco" or the "company") in Appellants' Title VII national origin employment discrimination case. For the following reasons, we AFFIRM the district court's order.

BACKGROUND

Majesco is a U.S. wholly owned subsidiary of Mastek Ltd. ("Mastek"). Majesco has an office in Irving, Texas. Mastek was founded in 1982; is headquartered in Bombay, India; and is publicly traded on the Bombay Stock Exchange. Mastek's business is outsourcing software/IT solutions and technicians for its business customers. Majesco is one of several wholly owned international subsidiaries of Mastek. Majesco sells Mastek's IT products and services to its customers based locally in the United States.

Keelan, a citizen of the United Kingdom, began working as a regional sales director for Majesco on or about August 7, 2000, in the Irving office. He was hired as an employee-at-will, with a base salary of $110,000, plus a commission structure. He was terminated in late November 2001 for nonproduction. A female Canadian national was offered his position but did not accept it.

Sullivan, a U.S. citizen born in El Paso, applied to work at Majesco in early 2001. Majesco president and Indian national Atul Vohra ("Vohra") (former marketing director for Mastek) was one of Sullivan's interviewers. Sullivan began working as a director of alliances for Majesco, as an employee-at-will, on or about March 1, 2001, in the Irving office with a base salary of $120,000, plus a commission structure. Sullivan signed an employee confidentiality and inventions agreement and an IRS W-4 withholding certificate with another software/IT company, AppWorx Corp. ("AppWorx"), on June 20, 2001. Sullivan took an extended leave from Majesco the first week of July 2001. He submitted his letter of resignation dated July 26, 2001. Sullivan's W-2s from 2001 indicate he earned more at AppWorx in the five months he worked there than in the five months he worked for Majesco.

During his first four months on the job, Keelan generated no sales. His then-supervisor Gary Hart ("Hart"), a U.S. national, counseled Keelan concerning his sales performance. Keelan made three sales between February and April 2001. He made no sales after that. Sullivan's initial supervisor was also Hart. Sullivan produced no sales while at Majesco. Both Keelan and Sullivan allege that their sales performances were hindered and obstructed at Majesco due to the fact they are non-Indian. Appellants also contend Majesco's inadequate marking materials and website hindered their sales performance.

Keelan said he encountered staffing problems because when no technician employed by Majesco was available for projects, Majesco only brought in Mastek's Indian technicians on work visas and would not staff projects with local non-Indian hires. Keelan stated one time he lost repeat business because the Indian workers' visas expired and they left in the middle of a project.

Sullivan said he encountered similar staffing problems. Sullivan stated he was told that the company would not staff one of his projects because it could not get the required people from India. Sullivan stated a pattern developed where sales brought to the table by non-Indians probably were not going to be successful.

Another non-Indian Majesco salesperson, Jennifer Walsh ("Walsh"), based out of New Jersey, also testified to similar staffing problems. When Walsh asked management why the company would not use local people, she stated she was told that "Americans need too much handholding." Walsh was terminated in November 2001 for nonproduction.

Appellants provided other evidence alleging discrimination. Keelan stated that Vohra (then marketing director for Mastek) announced at a sales meeting held in India in November 2000 that he could foresee a time when Mastek would be a totally Indian company. On April 1, 2001, Vohra was appointed president of Majesco. Shortly after Vohra became president, Hart resigned and was replaced by Lokesh Bhagwat, an Indian. Keelan stated that in April 2001, immediately prior to Hart's leaving, he asked Hart if the company had a policy of forcing the Americans out and that Hart replied, "Is there a document out there somewhere that states that, no; is it practice, of course it is." Appellants also complained about their working environment, including the lack of windows, the small size of their cubicles, and Majesco's requirement that they work from the office instead of home.

Yvette Winfrey ("Winfrey"), a non-Indian, was the assistant human resources director for Majesco. Winfrey testified that both Keelan and Sullivan complained to her about discrimination at Majesco. Keelan said Winfrey directed him to the EEOC, but that he had not yet gone to the EEOC at the time of his termination in November 2001. Keelan and Sullivan also complained to P.N. Prasad ("Prasad"), an Indian Majesco executive, about what they perceived to be discrimination against non-Indians. Keelan said Prasad also stated that "Americans have never worked out" at the company. Sullivan spoke to Ketan Mehta ("Mehta"), Majesco's CEO and an Indian, about the apparent discrimination; Mehta's response was, "I can see how you would feel that way."

Majesco alleges it fell upon hard financial times beginning in fiscal year 2000. The loss of revenues in fiscal year 2001 was almost $20 million, and the company suffered a net loss of over $1.4 million. Because of this, on July 16, 2001, Majesco announced a new pay plan. This plan consisted of an across-the-board pay cut: all rank-and-file employees earning more than $60,000 per year received a ten percent pay cut, with senior management receiving an even larger decrease. The plan also modified the commission structure across the board for salesmen. Salaries were changed to require draws against commission. For example, if a commission employee had a $75,000 salary and earned $100,000 in commission, he would receive the difference of only $25,000 in commission. The plan also specifically excluded commissions on projects over $5 million. Appellants claim the plan gave Majesco discretion to divide commissions among salesmen as management saw fit and, in some instances, not even pay commissions, and thus would be a vehicle for favoritism and discrimination.

Appellants filed charges of national origin discrimination with the EEOC. They then filed this action against Majesco in district court on August 6, 2002, alleging discrimination in the terms and conditions of their employment and in Keelan's termination and Sullivan's constructive discharge. The court rejected Appellants' urging that it analyze their case under the mixed-motive theory. The court determined this was a pretext case under McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973).¹ With regard to Appellants' terms and conditions claims, the court found that the evidence did not support a prima facie case; that is, nothing showed Appellants were denied any compensation due them or that Majesco treated similarly situated Indian employees better. As to Keelan's discharge claim, the court found he did not meet his prima facie case because nothing showed that similarly situated Indian salesmen were treated more favorably than he; that is, that they were not also counseled and then terminated for poor sales performance. The court stated that even if Keelan had met his prima facie case, Majesco rebutted with a legitimate nondiscriminatory reason for his termination, and "stray remark" evidence did not raise an issue of pretext. As to Sullivan's constructive discharge claim, the court found he did not raise a genuine issue of fact on constructive discharge because he was not subjected to objectively intolerable working conditions and because he left Majesco for what he perceived to be a better job. The district court granted summary judgment to Majesco and dismissed Appellants' claims. Appellants timely appealed Keelan's discharge claim and Sullivan's constructive discharge claim.

DISCUSSION

This Court reviews a district court's grant of summary judgment de novo, applying the same standards as the district court. Patrick v. Ridge, 394 F.3d 311, 315 (5th Cir.2004). Under Federal Rule of Civil Procedure 56(c), summary judgment is proper when the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." FED. R. CIV. P. 56(c); see Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). When making its determination, the court must draw all justifiable inferences in favor of the nonmovant. Bodenheimer v. PPG Indus., Inc., 5 F.3d 955, 956 (5th Cir.1993).

I. Whether the district court erred by requiring that Appellants provide evidence of similarly situated Indian employees receiving preferential treatment...