Walther v. Lone Star Gas Co.

• Decision Date: 30 January 1992
• Docket Number: No. 90-4662,90-4662
• Citation: 952 F.2d 119
• Parties: 59 Fair Empl.Prac.Cas. (BNA) 848, 58 Empl. Prac. Dec. P 41,258 Melvin WALTHER, Plaintiff-Appellee, v. LONE STAR GAS COMPANY, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 119

952 F.2d 119

59 Fair Empl.Prac.Cas. (BNA) 848,

58 Empl. Prac. Dec. P 41,258

Melvin WALTHER, Plaintiff-Appellee, v. LONE STAR GAS COMPANY, Defendant-Appellant.

No. 90-4662.

United States Court of Appeals Fifth Circuit.

Jan. 30, 1992.

William O. Ashcraft, Thomas M. Callan, Susan Laurea, Dallas, Tex., for defendant-appellant.

Larry R. Daves, San Antonio, Tex., for plaintiff-appellee.

Appeal From the United States District Court for the Eastern District of Texas.

Before POLITZ, Chief Judge, HIGGINBOTHAM, Circuit Judge, and KAZEN, ¹ District Judge.

PATRICK E. HIGGINBOTHAM, Circuit Judge:

A Texas jury found that Lone Star Gas Company discriminated against Melvin Walther because of his age. Lone Star here contends that the district court should have entered judgment notwithstanding the jury's verdict because Walther failed to establish a prima facie case. Alternatively, Lone Star argues that errors in the court's jury instructions require a new trial. We find sufficient evidence to support the jury's verdict and affirm the denial of a new trial. We are not persuaded that any error in the court's instructions to the jury warrant reversal. We vacate the district court's award of front pay, however, and remand for reconsideration.

I.

In 1986, Melvin Walther was a fifty-year-old regional office manager for the Greenville region of Lone Star Gas Company. During his thirty year tenure with the company, Walther had received regular promotions and pay increases and was never told that his job performance was unsatisfactory. On the contrary, his personal file contained a number of favorable reports and letters of commendation. In 1986, however, Lone Star discharged Walther as part of a six percent reduction in force. Although Walther was first told that his job had been eliminated, he later learned that Lone Star replaced him as Greenville office manager with another employee from the Dallas office who was older than Walther.

Walther sued Lone Star, contending that he had been discharged because of his age in violation of the Age Discrimination in Employment Act, 29 U.S.C. § 623(a). Lone Star introduced evidence tending to show that Walther's termination was part of a carefully considered program to reduce costs at the company by selectively eliminating those employees the company could most easily do without. This program responded to fundamental changes in the economic conditions of the energy industry. According to Lone Star, it terminated Walther for valid business reasons based on his performance record and not because of his age. Roy Roberts, vice-president of the Dallas distribution division, testified that he listed Walther for termination because he had received oral reports that Walther, although competent and qualified, "was very, very weak in construction and maintenance and lacked ... leadership skills."

Walther, on the other hand, relied heavily on evidence that several other younger, less qualified employees whose positions had been eliminated were retained and transferred or promoted to positions that Walther was qualified to fill and had in fact filled in the past. Charles Ferguson, director of regional operations for Lone Star and Walther's immediate supervisor, testified that Walther was more qualified to fill some of these positions than those who were selected. Walther also testified that he was more qualified than these younger individuals. Thus even though Walther's position as regional office manager was taken by an older employee, Walther argued that the fact that he was denied the opportunity to continue in his job or to fill other vacancies despite relatively strong qualifications showed that he was discharged because of his age.

Walther also sought to impeach Lone Star's assertions that it included him in the RIF based on his performance record. Roberts, the individual listing Walther for termination, admitted that he did not consult any performance evaluations in making the decision but relied on prior oral reports. Nor did he use any other documents to compare Walther's performance to that of other employees. Nor did he consult Ferguson, Walther's immediate supervisor, at the time he made his decision. Of twenty-seven people on Roberts' list for termination, only two were under the age of forty.

Walther also introduced statistical evidence showing that of seventy-four employees over the age of forty in the Greenville region, twelve were terminated in the RIF, whereas of ninety-three employees under forty in the region, only one was terminated in the RIF. The probability of obtaining this result by chance was apparently .00027. Similarly, of 1,093 employees over the age of fifty company-wide, 94 were terminated and not rehired, whereas of 3,184 employees under the age of fifty, 151 were terminated and not rehired. The probability of obtaining this result by chance was less than four in a million.

Lone Star countered with its own statistical evidence indicating that before the RIF, individuals over forty years old composed 44.67 percent of the company work force, and after the RIF, individuals over forty still constituted 44.25 percent of the workforce. Lone Star argued that this .4 percent reduction in employees over forty demonstrates that the RIF did not significantly impact older employees. Lone Star's data also showed that although individuals from age fifty-five to sixty-nine were discharged in disproportionately large numbers, so were individuals from ages twenty to twenty-nine. The middle group, constituting employees aged thirty to fifty-four, were discharged in disproportionately small numbers. Furthermore, employees in the smaller category of age fifty to fifty-four, such as Walther, were discharged in disproportionately small numbers. It is only when one combines this smaller group with those employees aged fifty-five and over that a disproportionately large impact emerges. In sum, Lone Star sought to show that the grouping of the employees determines whether an adverse impact from the RIF is demonstrated.

II.

Lone Star first contends that because Walther was replaced by a person in the protected group--a person actually older than him--he cannot establish a prima facie case of age discrimination. This case was fully tried and a jury verdict was rendered. The Supreme Court has explained that "[w]here the defendant has done everything that would be required of him if the plaintiff had properly made out a prima facie case, whether the plaintiff really did so is no longer relevant." United States Postal Service Bd. of Governors v. Aikens, 460 U.S. 711, 715, 103 S.Ct. 1478, 1482, 75 L.Ed.2d 403 (1983). We agree with the Sixth Circuit that when a case has been tried on the merits, a reviewing appellate court need not address the sufficiency of plaintiff's prima facie case, and may instead proceed directly to the ultimate question whether plaintiff has produced sufficient evidence for a jury to find that discrimination has occurred. Brownlow v. Edgecomb Metals Co., 867 F.2d 960, 963 (6th Cir.1989).

Lone Star has offered a valid, non-discriminatory explanation for Walther's discharge: he was part of a reduction in force in which employees were laid off based on their performance records. Walther was therefore required to produce sufficient evidence from which a reasonable trier of fact could conclude that Lone Star's explanation was pretextual. Little v. Republic Refining Co., 924 F.2d 93, 96-98 (5th Cir.1991); Reeves v. General Foods Corp., 682 F.2d 515, 521-23 (5th Cir.1982). A plaintiff may demonstrate pretext either by showing that a discriminatory motive more likely motivated the employer or that the employer's explanation is unworthy of credence. Amburgey v. Corhart Refractories Corp., 936 F.2d 805, 813 (5th Cir.1991). We have recognized that motivation and intent in employment discrimination cases can often be proved only through circumstantial evidence. Thornbrough v. Columbus & Greenville R. Co., 760 F.2d 633, 641 (5th Cir.1985); see also Burns v. Texas City Refining, Inc., 890 F.2d 747, 751 (5th Cir.1989) ("It is certainly not necessary, and indeed is often impossible, for the plaintiff in a discrimination case to prove the defendant's state of mind through direct evidence.") Therefore, although Walther's evidence of age discrimination is entirely circumstantial, we think it is sufficient to support the jury's verdict.

First, we note that the fact that Walther was replaced by an older employee rather than a younger one does not necessarily show that he was not discriminated against because of his age. This is a reduction in force case. Therefore the crucial comparison is not between Walther and his replacement, but between Walther and similarly situated younger employees. See Thornbrough, 760 F.2d at 644 ("What is suspicious in reduction-in-force cases is that the employer fired a qualified, older employee but retained a younger one.") Although the transfer of an older employee to Walther's position may assist Lone Star in rebutting an inference of discrimination, it does not necessarily dispel that inference entirely. "Congress never intended to give an employer license to discriminate against some employees ... merely because he favorably treats other members of the employees' group." Id. at 646 n. 20 (quoting Connecticut v. Teal, 457 U.S. 440, 455, 102 S.Ct. 2525, 2535, 73 L.Ed.2d 130 (1982)).

Walther produced evidence that he was laid off while younger, less qualified employees were retained and transferred or promoted to positions similar to his own. Of course, the issue is not whether Walther or the retained employees were better qualified. An employer is entitled to make that decision for itself. "The ADEA was not intended to be a vehicle for judicial second guessing of business decisions, nor was it intended to transform the courts into personnel managers." Thornbrough, 760 F.2d at 647. Nevertheless, a plaintiff can take his case to a jury...