Payan v. United Parcel Serv.

• Decision Date: 04 October 2018
• Docket Number: No. 16-4188,16-4188
• Citation: 905 F.3d 1162
• Parties: Charles PAYAN, Plaintiff - Appellant, v. UNITED PARCEL SERVICE; Charles Martinez, Defendants - Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

905 F.3d 1162

Charles PAYAN, Plaintiff - Appellant,

v.UNITED PARCEL SERVICE; Charles Martinez, Defendants - Appellees.

No. 16-4188

United States Court of Appeals, Tenth Circuit.

October 4, 2018

April L. Hollingsworth, Hollingsworth Law Office, LLC, Salt Lake City, Utah, for Plaintiff-Appellant.

Steven M. Gutierrez, Holland & Hart, LLP, Denver, Colorado, (Bradford J. Williams, Holland & Hart, LLP, Denver, Colorado and Cecilia M. Romero, Holland & Hart, LLP, Salt Lake City, Utah, with him on the brief) for Defendants-Appellees.

Before BRISCOE, SEYMOUR, and LUCERO, Circuit Judges.

SEYMOUR, Circuit Judge.

Charles Payan appeals the district court’s grant of summary judgment in favor of United Parcel Service ("UPS") in relation to his claims for racial discrimination and retaliation arising under Title VII and 42 U.S.C. § 1981, as well as his state law claims for breach of contract and breach of the covenant of good faith and fair dealing. Exercising jurisdiction pursuant to 28 U.S.C. § 1291, we affirm.

I.

Mr. Payan, who is Hispanic, has worked for UPS since 1991. He worked his way through the ranks and in 2006 was promoted to Security Manager of the Desert Mountain Salt Lake City Division. Around 2009, Charles Martinez, also Hispanic, became the supervisor of UPS’s Great Basin District, which encompassed the Salt Lake City security division. This made Mr. Martinez Mr. Payan’s direct supervisor.

Mr. Payan was considered a "Ready Now" candidate until Mr. Martinez informed him in early 2010 that he no longer considered him to be "ready now." UPS uses the "Ready Now" list to determine candidates for promotions, so Mr. Payan’s removal from the list meant that he could no longer be considered for promotions. Mr. Martinez continued thereafter to rate Mr. Payan’s promotion status as "Retain at Current Level," meaning he believed Mr. Payan needed more time to develop before being promoted. After Mr. Payan’s downgrade, two UPS employees with similar credentials were promoted to Security Division Managers, positions that Mr. Payan wanted but was not eligible for in light of his promotion status downgrade.

Mr. Martinez also consistently gave Mr. Payan poor Quality Performance Reviews ("QPR"). A QPR is performed biannually and is how UPS evaluates its employees. The QPR has both an objective and subjective component, the results of which impact salary increases and opportunities for promotion. While Mr. Payan scored incredibly well on the objective component of his 2009 QPR, performing at 106% of his goals, Mr. Martinez rated him very poorly on the subjective component of the QPR. For instance, Mr. Martinez gave him a .58 out of 1 rating on the Leadership Competency Assessment.

Mr. Payan asserts that Mr. Martinez was constantly harassing him, and he documented most of those interactions with hand-written notes. Some of those interactions raised allegations of harassment concerning Mr. Payan’s race or national origin, which are the focus of this action. The district court recounted those instances:

First, on one occasion, Martinez and Payan had a heated conversation during which Martinez indicated that Payan had an integrity issue and called him a kid who doesn’t even speak Spanish. Second, Payan asserts that Martinez would often correct his pronunciation of Hispanic surnames. Finally, Payan points to Martinez’s friendship with another Hispanic manager who speaks fluent Spanish as evidence of Martinez’s racial animus towards Payan. One of Martinez’s best friends growing up was a Cuban-American, and Martinez expressed his fondness for the Cuban accent of the other Hispanic manager.

Aplt. App. at 182-83.

The district court documented UPS’s reaction to Mr. Payan’s claims of racial discrimination as follows:

In 2010, Payan contacted Human Resources Manager Carl Wesley to discuss his concern that Martinez was discriminating against him on the basis of his race. Wesley worked down the hall from Martinez in UPS’s Phoenix office. Wesley was good friends with Martinez and the two socialized together outside of work. Payan raised the issue of his poor performance evaluation with Wesley, and Wesley acknowledged that the conflict between Payan’s objective numbers and Martinez’s rating were a cause for concern. In light of his continuing concerns about racial discrimination, Payan filed a complaint with UPS Human Resources in February 2012. Wesley assigned Payan’s complaint to Human Resources Operations Manager Darren Moore and Area Manager Carolee Streeper to investigate Payan’s complaint. Payan continued to object to Martinez’s conduct throughout 2012 and 2013. UPS investigated Payan’s claims but determined that Martinez had neither discriminated against nor harassed Payan. Following this investigation, UPS initiated a meeting between Payan and Martinez in an effort to clear the air. UPS also offered Payan an opportunity to participate in the Company’s Employee Dispute Resolution process, but Payan declined. During this timeframe, in 2012, Wesley had a discussion with Martinez regarding Payan. Following this discussion, Martinez decided to document the perceived performance issues intertwined with Payan’s complaints to Human Resources. Ultimately, Martinez recommended to Wesley that Payan be transferred and not retained at his current management level. As a basis for his recommendation, Martinez pointed to perceived integrity and communications issues.

Id. at 183-84.

In November 2012, and in response to the recommendations of Mr. Martinez, UPS put Mr. Payan through a Management Performance Improvement Process ("MPIP"). An MPIP is designed to "help employees who are not performing well go through a formalized training with their manager to help them improve their skill sets so they can perform effectively and eliminate whatever those deficiencies are." Id. at 305. "UPS tasked Payan with improving his communication, organization, and development of subordinates." Id . at 184.

The MPIP required Mr. Payan to meet with Mr. Martinez and UPS’s HR department to track his progress. These meetings took place in November 2012 and January, February, and March 2013. After his second review, UPS determined that Mr. Payan was not meeting the plan’s requirements. Shortly thereafter, Mr. Payan filed a charge of discrimination with the Equal Employment Opportunity Commission ("EEOC"). Mr. Payan alleged that he had been subjected to harassing and degrading behavior from Mr. Martinez and that his non-Hispanic coworkers were not treated in such a way. He also alleged that UPS retaliated against him by placing him on an MPIP. The EEOC ultimately dismissed Mr. Payan’s charge of discrimination and issued him a right-to-sue letter.

After the MPIP concluded in October 2013, "UPS transferred Mr. Payan to a Business Manager position in the operations department." Id . at 184. The new position had the same management authority, and he continued to lead his own team of employees. Moreover, Mr. Payan was not required to change work locations, the transfer came with a pay increase, and Mr. Martinez would no longer be his supervisor. Nevertheless, Mr. Payan perceived the transfer to be a punishment, and in May 2014 he filed the current lawsuit. He alleged hostile work environment, disparate treatment, and retaliation claims under both Title VII and 42 U.S.C. § 1981. He also alleged state law claims for breach of contract, breach of the covenant of good faith and fair dealing, and violation of Utah public policy. The district court granted summary judgement in favor of UPS on all of Mr. Payan’s claims.

II.

"We ‘review a district court’s grant of summary judgment de novo, applying the same legal standard as the district court,’ " viewing "the evidence and the reasonable inferences to be drawn from the evidence in the light most favorable to the nonmoving party." City of Eudora v. Rural Water Dist. No. 4, Douglas Cty., Kan. , 875 F.3d 1030, 1034 (10th Cir. 2017) (quoting Parker Excavating, Inc. v. Lafarge W., Inc. , 863 F.3d 1213, 1220 (10th Cir. 2017) ). Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a).

A. Disparate Treatment Race Discrimination Under Title VII and § 1981

"In racial discrimination suits, the elements of a plaintiff’s case are the same whether that case is brought under §§ 1981 or 1983 or Title VII." Carney v. City & Cty. of Denver , 534 F.3d 1269, 1273 (10th Cir. 2008) (quoting Baca v. Sklar , 398 F.3d 1210, 1218 n.3 (10th Cir. 2005) ). The analysis for both claims starts with the familiar burden-shifting framework set out in McDonnell Douglas Corp. v. Green , 411 U.S. 792, 802, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973). Under this framework, "the plaintiff must first prove a prima facie case of discrimination." Khalik v. United Air Lines, 671 F.3d 1188, 1192 (10th Cir. 2012). "Only after the plaintiff clears this initial hurdle does the burden shift to the employer to prove a ‘legitimate, non-discriminatory reason for the adverse employment action.’ " Barlow v. C.R. England, Inc ., 703 F.3d 497, 505 (10th Cir. 2012) (quoting Khalik , 671 F.3d at 1192 ). "To make out a prima facie case of discrimination, the ... Plaintiffs must demonstrate (1) membership in a protected class, (2) adverse employment action, and (3) disparate treatment among similarly situated employees." Orr v. City Of Albuquerque , 417 F.3d 1144, 1149 (10th Cir. 2005) (citation omitted). Unlike a hostile work environment claim, where the "claim is composed of a series of separate acts that collectively constitute one ‘unlawful employment practice,’ " Nat’l R.R. Passenger Corp. v. Morgan , 536 U.S. 101, 117, 122 S.Ct. 2061, 153 L.Ed.2d 106 (2002) (quoting 42 U.S.C. § 2000e-5(e)(1) ), a claim for disparate treatment is based on a discrete act, id . at 114, 122 S.Ct. 2061.

The district court determined that Payan’s Title VII claim was unexhausted and that his Section 1981 claim...