Palasota v. Haggar Clothing Co.

• Decision Date: 06 September 2007
• Docket Number: No. 05-10576.,05-10576.
• Citation: 499 F.3d 474
• Parties: Jimmy PALASOTA, Plaintiff-Appellee-Cross-Appellant, v. HAGGAR CLOTHING CO., Defendant-Appellant-Cross-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

499 F.3d 474

Jimmy PALASOTA, Plaintiff-Appellee-Cross-Appellant, v. HAGGAR CLOTHING CO., Defendant-Appellant-Cross-Appellee.

No. 05-10576.

United States Court of Appeals, Fifth Circuit.

September 6, 2007.

Order to Clarify September 27, 2007.

Scott Alan Scher, Law Offices of Scott A. Scher, Kim Juanita Askew, Danny S. Ashby (argued), Christopher Donald Kratovil, James Hunter Birch, Hughes & Luce, Dallas, TX, for Palasota.

David Wallace Holman (argued), The Holman Law Firm, P.C., Houston, TX, Hilaree A. Casada, Hermes Sargent Bates, Donald E. Godwin, Godwin Pappas Ronquillo, Dallas, TX, for Haggar Clothing Co.

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

Before HIGGINBOTHAM, DENNIS and CLEMENT, Circuit Judges.

DENNIS, Circuit Judge:

This is the second round of appeals in this Age Discrimination in Employment Act ("ADEA") case. 29 U.S.C. § 621 et seq. In the first appeal, this court's panel reversed the district court's judgment as a matter of law ("JMOL") for the Defendant, Haggar Clothing Co. ("Haggar"), reinstated the jury verdict in favor of Plaintiff, Jimmy Palasota ("Palasota"), and remanded for decision of pretermitted issues. Palasota v. Haggar Clothing Co., 342 F.3d 569 (5th Cir.2003) ("Palasota I"). On remand, the district court denied Haggar's amended motion for JMOL and upheld the jury verdict awarding Mr. Palasota $842,218.96 in back pay and $842,218.96 in liquidated damages. Additionally, the district court awarded Mr. Palasota equitable remedies of lump sum front pay of $524,999.98, reinstatement of Mr. Palasota to Haggar's first available sales associate vacancy in the Dallas area, and interim front pay of $14,583.33 per month commencing on the date of entry of the judgment and continuing until Mr. Palasota is reinstated, as well as post-judgment interest and costs of court. Palasota v. Haggar Clothing Co., No. 3:00-CV-1925-G, 2005 WL 221221 at *5 (N.D.Tex., Jan. 28, 2005) ("Palasota Remand"). Both parties appealed.

We now affirm the district court's judgment denying Haggar's amended motion for JMOL, awarding Palasota back pay and liquidated damages based on the jury verdict, and awarding Palasota post-judgment interest, and costs of court. We reverse and render judgment in favor of Haggar, rejecting Palasota's claims for reinstatement and interim monthly front pay. We vacate and remand for further proceedings with respect to Palasota's claim for lump sum front pay.

I.

Jimmy Palasota worked for Haggar as a men's clothing sales associate for 28 years, until May 10, 1996, when, at the age of 51, he was terminated. Over his years of service, he was referred to as an "outstanding" employee, and performed his work exceptionally well. In 1995 his accounts netted him an annual income of $175,000. His territory at that time included a key account with Dillard's, some trade accounts,¹ and eight Dallas/Ft. Worth-area J.C. Penney stores.

During the 1990s, as the clothing industry was restructuring, Haggar overhauled its company image, in part by replacing older sales associates with younger individuals. Haggar also changed its compensation plan in the early 1990s, paying associates a guaranteed monthly income based on the prior year's sales. In the fall of 1995, however, Haggar resumed paying its associates on a straight commission basis without any guarantee.

In 1995, through no fault of Palasota, Haggar lost its account with Dillard's Department Stores, which had generated around 85% of Palasota's income (between $148,750 and $157,500 per year). Haggar's manager over Palasota proposed assigning him a new sales territory including 51 additional J.C. Penney stores in Houston, San Antonio, and Austin, which would have allowed him to maintain his earnings at the same level. In December 1995, however, Haggar replaced that manager, and Palasota's new manager refused to assign the proposed territory to Palasota. Instead, Palasota was relegated to less lucrative accounts in East Texas and Louisiana. That assignment allowed him to earn no more than $85,600 per year.

Moreover, in February 1996, the new manager informed Mr. Palasota that he could accept either the less lucrative territory or a severance package. Mr. Palasota declined the severance package and refused to resign. As a part of the transition to the less profitable territory, Haggar provided Mr. Palasota with a salary bridge, effective from January through April of 1996, that guaranteed him 80% of his 1995 salary (about $139,860).

In March, 1996, Mr. Palasota's manager informed him that he would be terminated. On April 29, 1996, Haggar notified Mr. Palasota in writing of his pending termination. The termination notice included the tender of a severance package of 12 months' pay and a requirement that he release Haggar from liability to him for his ADEA claims. Mr. Palasota did not accept the severance package and was officially terminated on May 10, 1996. He promptly stopped working and sent transition letters to his customers informing them that he had left the company. Because Mr. Palasota refused to release Haggar from ADEA liability, Haggar suspended his severance pay after three months.

II.

In this second appeal, of course, Haggar may not challenge the jury's finding that it terminated Palasota's employment because of his age in violation of the ADEA. That issue was conclusively resolved against Haggar by the previous panel's decision in Haggar's first appeal and is therefore the law of this case. Free v. Abbott Labs., Inc., 164 F.3d 270, 272 (5th Cir.1999). In its present appeal, however, Haggar can and does challenge issues not reached in the first appeal, viz., the jury's finding that Haggar acted willfully in its ADEA violation (which formed the basis of the liquidated damages award), the jury's calculations of Palasota's financial loss caused by the violation (used as a basis for the back pay award), as well as the district court's decision to order Haggar to reinstate Palasota and pay him both lump sum and monthly front pay. We turn first to Haggar's challenge to the parts of the district court's judgment that denied Haggar's motion for judgment as a matter of law, and that, instead, sustained Palasota's jury verdict on financial loss (which determines back pay) and employer wilfulness (which determines whether liquidated damages are awarded).

We review a district court's denial of a motion for judgment as a matter of law de novo. Flowers v. S. Reg'l Physician Servs. Inc., 247 F.3d 229, 235 (5th Cir.2001) (citing Ford v. Cimarron Ins. Co., 230 F.3d 828, 830 (5th Cir.2000)); Brown v. Bryan County, Okla., 219 F.3d 450, 456 (5th Cir.2000). As set out by Federal Rule of Civil Procedure 50, we may only render judgment as a matter of law where "the court finds that a reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that issue." FED.R.Civ.P. 50(a); see also Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 149, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000); Ford, 230 F.3d at 830.

"In entertaining a Rule 50 motion for judgment as a matter of law [we] must review all of the evidence in the record, draw all reasonable inferences in favor of the nonmoving party, and may not make credibility determinations or weigh the evidence." Ellis v. Weasler Eng'g Inc., 258 F.3d 326, 337 (5th Cir.2001). "`Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge.'" Reeves, 530 U.S. at 150-51, 120 S.Ct. 2097 (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). While we review the record as a whole, we must "disregard all evidence favorable to the moving party that the jury is not required to believe." Ellis, 258 F.3d at 337 (citing Reeves, 530 U.S. at 151, 120 S.Ct. 2097). Thus, we are required to "give credence to the evidence favoring the nonmovant as well as that `evidence supporting the moving party that is uncontradicted and unimpeached, at least to the extent that that evidence comes from dis interested witnesses.'" Id. (quoting 9A WRIGHT & MILLER § 2529).

After reviewing the record, we conclude that the district court correctly analyzed the evidence and applied Rule 50, not simply for the district court's stated reasons, but also because of additional evidence in the record from which the jury reasonably could have found that Haggar's violation was willful and reasonably could have calculated the amount of his resulting financial loss.

A.

In this appeal, Haggar's arguments with regard to willfulness merely parallel its previous argument on the violation issue, viz., that Haggar's employment decisions were not discriminatory or intended to cause Palasota to suffer economic loss or employment termination; and that Haggar believed Palasota had resigned voluntarily rather than being forced out of the company by Haggar's employment decisions. It is possible for an employer to violate the ADEA without doing so willfully, i.e., without knowingly or recklessly disregarding whether its conduct was prohibited by the statute. Hazen Paper Co. v. Biggins, 507 U.S. 604, 616, 113 S.Ct. 1701, 123 L.Ed.2d 338 (1993); West v. Nabors Drilling USA, Inc., 330 F.3d 379, 391 (5th Cir.2003). Here, however, there existed a fully sufficient evidentiary basis for the jury to reasonably find Haggar guilty of a willful violation. The previous panel, in reversing the district court's judgment as a matter of law in favor of Haggar, concluded that the jury reasonably found Haggar had violated the ADEA, based on, inter alia, the following evidence:

Between December 1, 1996, and March 31, 1998, Haggar terminated 12 Sales Associates forty years of age or older, including Palasota, while hiring 13 new [Retail Marketing Associates (RMAs)], only one of whom was over forty years of age. Haggar's chief financial officer testified that the increase in...