Smith v. Berry Co., 97-30795

• Decision Date: 01 February 1999
• Docket Number: No. 97-30795,97-30795
• Parties: 79 Fair Empl.Prac.Cas. (BNA) 52, 75 Empl. Prac. Dec. P 45,788 Brenda SMITH, Plaintiff-Appellee-Cross-Appellant, v. The BERRY CO., et al., Defendants, L.M. Berry and Company, Defendant-Appellant-Cross-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 390

165 F.3d 390

79 Fair Empl.Prac.Cas. (BNA) 52, 75 Empl.

Prac. Dec. P 45,788

Brenda SMITH, Plaintiff-Appellee-Cross-Appellant, v. The BERRY CO., et al., Defendants, L.M. Berry and Company, Defendant-Appellant-Cross-Appellee.

No. 97-30795.

United States Court of Appeals, Fifth Circuit.

Feb. 1, 1999.

Rehearing and Suggestion for Rehearing En Banc Denied April 28, 1999.

William Martin McGoey, Evans & Clesi, New Orleans, LA, for Plaintiff-Appellee-Cross-Appellant.

H. Mark Adams, Pauline F. Hardin, Virginia W. Gundlach, Mary Ellen Jordon, Jones, Walker, Waechter, Poitevent, Carrere & Denegre, New Orleans, LA, for Defendant-Appellant-Cross-Appellee.

Appeals from the United States District Court for the Eastern District of Louisiana.

Before REAVLEY, DAVIS and DUHE, Circuit Judges.

W. EUGENE DAVIS, Circuit Judge:

Defendant L.M. Berry & Company ("Berry") challenges the district court's judgment, entered on a jury verdict, awarding damages because Berry discriminated against the Plaintiff, Brenda Smith, on the basis of her sex and her age. Berry argues that Smith produced insufficient evidence of discrimination for the case to have gone to the jury and thus the district court should have granted Berry's motion for judgment as a matter of law. In addition, Berry challenges several of the damage awards. Alternatively, Berry seeks a new trial because of various trial errors. Smith cross-appeals, challenging the district court's denial of front pay and its decision not to award the maximum punitive damages permitted under Title VII. We affirm in part and reverse in part.

I. Facts and Prior Proceedings

The important facts of this case, when viewed in the light most favorable to the verdict, are as follows. Berry, a subsidiary of BellSouth, sells advertisements for the Yellow Pages. From 1983 through February 1996, Plaintiff Brenda Smith was a salesperson for Berry. During her first eleven years with Berry, she was very productive and enjoyed an excellent relationship with her coworkers and superiors. However, from 1994 through the end of her employment in February 1996, Smith's relationship with Berry deteriorated, eventually leading to Smith's resignation--or, as she claims, her constructive discharge. Smith filed this suit against Berry alleging that the demise of her successful career was caused by Berry's age and sex discrimination. In response, Berry argued that Smith's attitude and negative reaction to the restructuring of Berry's salary system were the cause of her problems, not her age or her sex.

Brenda Smith began working for Berry in November 1983. In August 1990, Smith was promoted to Account Manager. ¹ While in this new position, Smith was one of Berry's leading salespersons and won numerous awards for her work. At trial, Smith testified that when she was promoted in 1990, Dale Granda, her manager at that time, stated that he "really had some concerns whether or not a woman could handle the job because it was a lot of stress and a lot of responsibility." Despite this remark, Smith concedes that Granda promoted her twice and recommended her for BellSouth's highest achievement award.

In 1994, shortly after her fortieth birthday, Smith was suspended for one day for mishandling an account. Both then and at trial, Smith challenged the grounds for this suspension. Smith's suspension and that of another woman over forty were announced publicly to the entire company. A similar suspension of a male salesperson was not publicly announced. Notwithstanding this suspension, Smith continued to be a productive member of Berry's workforce.

In May 1995, Berry's Gulf Coast Division instituted a new compensation plan. Under the new "segmentation" plan, an employee's bonus now depended not on the individual employee's sales, but on the total sales of a team of employees. Brenda Smith and a number of other employees expressed concern that this new compensation package would drastically reduce their earnings. At trial, Smith contended that she was no more vocal in her complaints than any other salesperson. Berry argued, however, that Smith complained to a much greater and more public extent than any other employee. Berry also claimed to be especially concerned about Smith's complaints because of her leadership position within the office.

From 1992 onward, Smith suffered recurring medical problems with her knee and shoulder as a result of a skiing accident. At the time of the accident in 1992, Smith's doctors had recommended surgery. However, she did not have the surgery because Berry indicated that they "could not spare her." Finally, in September 1995, following the recommendations of three doctors, Smith scheduled the surgery.

On September 27, 1995, Smith informed her immediate superior, Team Leader Lester Ann Smith, that she had scheduled surgery for October 3, 1995. That same afternoon, Brenda Smith met with Lester Ann Smith, Dale Granda (Division Manager of Sales), and Tom Bruno (Operations Manager). At this meeting, Brenda Smith was accused of several specific incidents where she had complained about the new compensation plan. In response, she told Lester Ann Smith, Granda, and Bruno that some of the accusations were unfair mischaracterizations of events and others were just plain wrong. She requested that they investigate the validity of the accusations. Smith was not informed that she was being demoted.

Smith was out on medical leave from October 3, 1995 through January 15, 1996. During her absence, her Sales Leader position was advertised within the company. Also during her absence, Smith traveled extensively in a manner that Berry claimed violated company policy. Smith, however, testified that Berry's personnel department was aware of, and in some cases explicitly approved of, her travels. She also pointed out that she had notified the company of her Australian vacation six months prior to taking it.

On January 16, 1996, Smith returned to Berry and met with management again. At this meeting, Smith was informed that she was being demoted. The demotion entailed a substantial cut in pay and a serious decrease in responsibilities and status. She was moved off important accounts and given new, small accounts. She was told that if she complained about her demotion she would be sent on the road to the least important parishes in Berry's Gulf Coast region. In addition, in her absence, her belongings had been moved into a box and had been placed at a cubicle with no chair, no phone, and no supplies. Smith saw the failure of Berry to properly prepare her workstation--along with her demotion and the other events that had taken place since her return from medical leave--as a sign that she was being constructively discharged.

After these events occurred, Smith asked to look at her employment file. She then read five memoranda from her file that recorded complaints against her. Upon determining that Berry had conducted no investigation of these accusations, as she had requested in the September 27, 1995 meeting, she tendered her resignation from the company. She soon received a job offer from Sprint. She accepted this offer on January 24, 1996.

An important Berry memorandum relevant to Smith's age discrimination claim was introduced at trial. This memorandum (the "Luongo Memorandum") was written in 1989 by Peter Luongo while he was Vice President of Sales in Smith's region. ² In this memorandum, marked PERSONAL & CONFIDENTIAL, Luongo divided "low-end performers" into three groups, based upon their age. The memorandum categorized younger employees as "easiest ... to deal with" and noted that older employees are a "very, difficult group" and "more difficult to terminate." The memo stated that "[e]ach of these groups will require very sensitive handling." Of the eight people named in this memorandum, four were no longer with the firm at the time of trial and one had been demoted.

Although technically Smith's position was filled by a lateral transfer, the jury could have determined that Smith was effectively replaced as a Sales Leader by Joe Pearce, a younger male. Pearce was promoted to Sales Leader while Smith was on medical leave recuperating from her surgery.

Smith sued Berry alleging violations of the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. §§ 621 et seq. (1994), Title VII of the Civil Rights Act of 1964, as amended ("Title VII"), 42 U.S.C. §§ 2000e et seq. (1994), the Family and Medical Leave Act ("FMLA"), 29 U.S.C. 2601 §§ et seq. (1994), and Louisiana Employment Discrimination Statutes, La.Rev.Stat. Ann. §§ 23:1006, 51:2231 (West 1992). Smith further alleged Louisiana state law claims for intentional infliction of emotional distress. She later amended her complaint and alleged claims of defamation and retaliation against Berry and Sandra Peterson, Berry's Corporate Employee Relations Manager. Before trial, the district court granted Berry's motion for summary judgment on the defamation and intentional infliction of emotional distress claims. The remaining claims were then tried to a jury.

At the close of evidence, Berry moved for judgment as a matter of law on all counts. The judge granted the motion as to the retaliation claim and denied it for all other claims. The jury, by special verdict, found that Berry discriminated against Smith by demoting and constructively discharging her from its employment on the basis of age in violation of the ADEA, on the basis of gender in violation of Title VII and Louisiana antidiscrimination laws, and in violation of the FMLA. The jury further found that Berry's violations of the ADEA and the FMLA were willful. The jury awarded Smith $24,000 in back pay, $76,000 in compensatory damages, and $500,000 in punitive damages. The district court then entered a judgment on the verdict.

Berry filed a post-trial motion for judgment as a matter of law or, in the alternative, for a new trial. The district court held that there was insufficient evidence to...