Spulak v. K Mart Corp., 86-2156

Citation894 F.2d 1150
Decision Date18 January 1990
Docket NumberNo. 86-2156,86-2156
Parties51 Fair Empl.Prac.Cas. 1652, 52 Empl. Prac. Dec. P 39,584, 29 Fed. R. Evid. Serv. 1078 Frank L. SPULAK, Plaintiff-Appellee, v. K MART CORPORATION, Defendant-Appellant.
CourtUnited States Courts of Appeals. United States Court of Appeals (10th Circuit)

Charles W. Newcom of Sherman & Howard, Denver, Colo., for defendant-appellant.

Richard G. Sander of Zerobnick & Sander, P.C., Denver, Colo. (Martin Zerobnick and Gwen Jarahian Young of Zerobnick & Sander, P.C., Denver, Colo., and John O. Walker, Fort Collins, Colo., with him on the brief), for plaintiff-appellee.

Before SEYMOUR and EBEL, Circuit Judges, and RUSSELL, * District Judge.

SEYMOUR, Circuit Judge.

Frank Spulak sued K Mart Corporation under the Age Discrimination in Employment Act (ADEA), 29 U.S.C. Secs. 621 et seq. (1982), alleging that he was constructively discharged from his employment with K Mart as a result of illegal age discrimination. He also asserted a pendent state claim for age discrimination and for extreme and outrageous conduct. The jury returned a verdict in favor of Spulak on the ADEA claim and awarded him back pay and liquidated damages. The court ruled post-trial that Spulak was entitled to front pay in lieu of reinstatement. The jury resolved the state claims adversely to Spulak. On appeal, K Mart contends that: 1) the evidence is insufficient to support the jury's findings that Spulak was constructively discharged and that age was a determining factor in K Mart's conduct; 2) the district court made a number of erroneous trial rulings; 3) the court erred in assessing the amount of damages; 4) the evidence does not support an award of liquidated damages; and 5) the court erred in calculating the amount of attorney's fees awarded to Spulak. We affirm.

I. BACKGROUND

Spulak was in his late fifties when he left his position as an auto service department manager with K Mart on April 30, 1985. He had been with the company almost eleven years. K Mart underwent a corporate restructuring in February 1985, in part to improve the profitability of its auto parts and service departments, most of which were losing money. As a result of this reorganization, Spulak came under the supervision of a new district manager, James Price. Spulak testified that in the two months before he left, he began to feel his Spulak was subsequently accused of violating company policy by using the store's back door, failing to sign in and out properly, using improper invoicing procedures for work done on his car, and paying for merchandise four days after taking it from the store. These accusations were first made to Spulak by Jean Harp, who was K Mart's Loss Prevention Manager. Spulak then turned to Price, who initially said he did not know what was going on, but moments later returned to Spulak and told him that he had authorized the investigation. Price then told Spulak, "I am going to call the Personnel Manager and tell him that I am going to fire you," rec., vol. III, at 258, and that he was "fired or going to be fired," rec., vol. IV, at 313. Spulak testified that at that point he was given an ultimatum either to be fired or to take early retirement. Rec., vol. III, at 258, 261. He knew that he would lose his benefits if he was fired so he had no alternative except to take early retirement. Id. at 258. Price advised Spulak to "just run over to the Personnel right quick and make out the application for [his] retirement," id. at 261, and Spulak did so. There was other testimony that Price merely told Spulak that he had "enough on him to fire him," id. at 187, and, in fact, Price ultimately decided to write up the violations as a written reprimand rather than as a termination. The reprimand warned Spulak that any further violations would result in termination. The written reprimand apparently occurred after Spulak had said he would take early retirement, however, and Spulak's theory of the case was that he submitted his resignation without knowing that the written reprimand only advised him that he would be fired in the future if he committed further infractions. Rec., vol. II, at 56.

employment was threatened because of the conduct of Price and one of the mechanics who worked for Spulak, Gary Chisholm. Consequently, Spulak made a telephone inquiry to a K Mart retirement specialist and determined what his benefits would be if he took early retirement as of May 1, 1985. The next day Price asked the K Mart loss prevention manager to investigate Spulak.

Although Spulak apparently announced his resignation on or about March 27, it was not to become effective until May 1, 1985. Some time in April, Spulak approached Price and asked him what would happen if he changed his mind about taking early retirement. Price told him that if he tried to withdraw his retirement, Price would find some other way to fire him. Rec., vol. III, at 261. Price denied making that statement.

II. SUFFICIENCY OF THE EVIDENCE

After the jury returned a verdict for Spulak on his ADEA claim, K Mart moved unsuccessfully for j.n.o.v., contending that Spulak had failed to create a fact issue as to whether he had been constructively discharged and whether age was a determining factor in K Mart's actions. In reviewing the denial of a motion for j.n.o.v., we must view the evidence most favorably to the non-moving party and give that party the benefit of all reasonable inferences to be drawn from the evidence. See Trujillo v. Goodman, 825 F.2d 1453, 1456 (10th Cir.1987).

"[W]e may find error only when the evidence points but one way and is susceptible to no reasonable inferences sustaining the position of the party against whom the motion is made. While a scintilla of evidence is not enough, we must affirm if evidence was before the jury upon which it could properly find against the movant."

Cooper v. Asplundh Tree Expert Co., 836 F.2d 1544, 1547 (10th Cir.1988) (citations omitted).

The framework for assessing the evidence in an age discrimination case parallels that applicable in a Title VII case. Id. at 1547.

"[A] plaintiff establishes a prima facie case by showing (1) he is within the protected age group, (2) he was doing satisfactory work, (3) he was discharged despite the adequacy of his work, and (4) his position was filled by a person younger than he. The burden of production Id. (citations omitted). Spulak presented evidence that he was fifty-eight at the time he left K Mart and that he was replaced by Gary Chisholm, who was in his late twenties or early thirties. The record shows that Spulak rated average or above in the two previous yearly performance reviews and had received average or above average annual merit raises. K Mart contends, however, that the evidence fails to support the jury's finding of constructive discharge.

then shifts to the employer to show a legitimate, nondiscriminatory reason for the challenged action. The plaintiff retains the ultimate burden of persuasion, which he may carry directly by proving that age was more likely than not a determinative factor in the employment decision, or indirectly by establishing that the employer's proffered explanation is mere pretext."

In Derr v. Gulf Oil Corp., 796 F.2d 340, 344 (10th Cir.1986), we clarified the standard for determining whether a constructive discharge has occurred:

"[P]roof of constructive discharge 'depends upon whether a reasonable [person] would view the working conditions as intolerable.' Irving v. Dubuque Packing Co., 689 F.2d 170, 172 (10th Cir.1982). This shift in emphasis is consistent with the District of Columbia Circuit's observation that '[t]o the extent that [the employer] denies a conscious design to force [the employee] to resign, we note that an employer's subjective intent is irrelevant; [the employer] must be held to have intended those consequences it could reasonably have foreseen. See, e.g., Bourque [v. Powell Elec. Mfg. Co.], 617 F.2d at 65 [ (5th Cir.1980) ].' Clark v. Marsh, 665 F.2d 1168, 1175 n. 8 (D.C. Cir.1981) (emphasis added)."

In other words, "the question on which constructive discharge cases turn is simply whether the employer by its illegal discriminatory acts has made working conditions so difficult that a reasonable person in the employee's position would feel compelled to resign." Id. A finding of constructive discharge is supported by evidence that an employee has resigned, rather than waiting to be fired, because of unreasonably harsh conditions that have been applied to him in a discriminatory fashion. See, e.g., Guthrie v. J.C. Penney Co., 803 F.2d 202, 207-08 (5th Cir.1986); Young v. Southwestern S & L Ass'n, 509 F.2d 140, 144 (5th Cir.1975); cf. Bristow v. Daily Press, Inc., 770 F.2d 1251, 1255 (4th Cir.1985) ("An employee is protected from a calculated effort to pressure him into resignation through the imposition of unreasonably harsh conditions, in excess of those faced by his co-workers."), cert. denied, 475 U.S. 1082, 106 S.Ct. 1461, 89 L.Ed.2d 718 (1986).

Spulak presented evidence tending to prove that if he had not taken early retirement he would have been fired, thereby losing his retirement benefits. The record contains evidence that using the back door and failing to sign in and out were widespread policy violations that did not ordinarily precipitate a loss prevention investigation or a written reprimand. Spulak also offered evidence that his delay in paying for the store merchandise, a set of spark plugs, was a practice previously approved by a store manager. Price testified that Spulak had been disciplined not for taking K Mart property but for failing to follow proper invoicing procedures. But Spulak presented evidence to show that the way in which he had invoiced his own auto repairs, which varied approximately ten dollars from the figure suggested by the loss prevention investigation, was proper. Contrary to the warning in Spulak's reprimand that any further violation would result in termination, Spulak's evidence showed that K...

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