Opinion
Civil Action No. SA-00-CA-0623 NN
April 23, 2002
FINDINGS OF FACTS AND CONCLUSIONS OF LAW
I. Introduction
Upon the consent of the parties, this employment discrimination suit was reassigned to me for all purposes, including trial and entry of final judgment, pursuant to 28 U.S.C. § 636(c). Having concluded a bench trial on this case, and having reviewed the parties' post-trial submissions, I hereby enter my findings of facts and conclusions of law.
Docket Entry 10.
Docket Entries 40 41.
As set forth more fully below, it is my opinion that plaintiff has not satisfied his burden of establishing that defendants intentionally discriminated against him on the bases of his age and/or race as required under the applicable legal standards. The record also fails to support plaintiff's allegations that defendants committed a civil rights violation for which they are liable under 42 U.S.C. § 1981, nor does the record support a violation of state law. Accordingly, plaintiff's requested relief is DENIED .
II. Factual Findings: Summary of Relevant Trial Testimony
Plaintiff, Rex D. McCombs, filed this lawsuit on June 14, 2000 alleging unlawful discrimination on the bases of his age (over forty) and race (White/Caucasian). Defendant MS Communications America, Inc. ("MS Communications") employed plaintiff for the position of manager of the company's first San Antonio store, and he worked in that capacity for approximately three months. Defendants terminated plaintiff's employment after receiving allegations by at least two of plaintiff's female subordinates that he had sexually harassed them. The crux of plaintiff's complaint against MS Communications and President Mark Saenz concerns the circumstances surrounding, and leading to, his termination from employment.
During the relevant time period made the basis of plaintiff's suit, MS Communications was in the business of selling activation fees for wireless phone service providers such as ATT and Voice Plus, as well as selling phone accessories. The company, headquartered in Austin, had three stores in that city and one store in New Braunfels. At the time, the company was considering rapid expansion in the San Antonio area. Also, during this time, the company employed over fifteen employees, making it subject to the requirements of the anti-discrimination statutes at issue in this case.
At the time of trial, however, all of the company's stores had closed and the company was no longer doing business.
No dispositive motions having been filed by the parties, the case proceeded to a bench trial. Plaintiff relied mostly on his trial testimony to prove his allegations of intentional discrimination by the defendants. To rebut plaintiff's allegations and proffer their "legitimate non-discriminatory reason" for their termination decision, the defendants presented the testimony of former regional manager Ernest Brown, company executive Shannon Saenz and defendant Mark Saenz. In reaching my conclusions of law, I have considered the following trial testimony:
• Plaintiff testified that he initiated contact with the defendants by answering a newspaper advertisement concerning a job opening for a managerial position in San Antonio, Texas. He was sixty-two years old at the time he applied for the position.
• According to plaintiff, he had two employment interviews with defendant Saenz. During those interviews, plaintiff alleges that defendant Saenz told him the following: (a) that MS Communications had "strict employment policies" to comply with the law, (b) that plaintiff would be treated fairly by MS Communications, (c) that defendant Saenz and MS Communications wanted plaintiff to grow with the company as it developed its nation-wide marketing strategy, (d) that it was MS Communications' policy to provide heath-care benefits to its employees after fulfilling their ninety-day probationary period with the company, and (e) that plaintiff would have the opportunity to advance within the managerial level of the company. Plaintiff testified that health-care coverage was an essential employment benefit for him, as he suffered from high cholesterol and high blood pressure and needed prescribed medication to keep them under control.
See Docket Entry 41, Plaintiffs Proposed Findings of Fact No. 7.
Id.
• Plaintiff believed he was perfectly suited for the position offered by MS Communications in San Antonio based on his extensive sales and business management experience.
• During the second interview meeting, defendant Saenz, on behalf of MS Communications, offered plaintiff the position of manager of its first San Antonio store. The offer consisted of a monthly base salary of $2,500.00, a commission of 5% of the gross sales of the store, a bonus incentive, and full benefits, including health care coverage at the end of the ninety-day probationary period. For plaintiff, this offer meant he had the potential to earn with MS Communications a monthly income of "up to $8,000.00." Without hesitation, plaintiff accepted the offer.
Id. at Plaintiff's Proposed Findings of Fact No. 8.
• Upon acceptance of defendant Saenz' offer of employment, plaintiff commenced his employment on November 12, 1999.
Id. at Plaintiffs Proposed Findings of Fact No. 14.
• Plaintiff's employment, however, terminated three months later, on February 9, 2000. His termination occurred on the eighty-ninth day of his probationary employment period with the company. The company's main reason for terminating plaintiff was its receipt of sexual harassment complaints made against him by two former female employees who worked under his supervision. The sexual harassment allegations were corroborated in part by a male employee who also complained of plaintiff's managerial style.
Id. at Plaintiffs Proposed Findings of Fact Nos. 18 20. According to plaintiffs testimony, his base salary for the month of December was $2,500.00 plus $1,685.00 in commissions. Then, in January, he received the same base salary as in the previous month, but his commissions increased to $4,200.00. During this month, plaintiff also received a bonus of $3,000.00. For the first nine days in February, plaintiff collected the pro-rated amount of $833.33 as base salary and $2,735.00 in commissions. Id. at Plaintiffs Proposed Findings of Fact Nos. 15-17 22.
• Plaintiff testified that his termination was unexpected as the San Antonio store was the number one store in revenue sales for the company. Plaintiff in fact attributed the store's high level of success to his management skills. He even alluded to the praise he received from defendant Saenz a week before his termination.
• According to plaintiff's testimony, the store's level of success required that plaintiff make some critical personnel decisions. In fact, during his short tenure with the company, plaintiff terminated some employees because, in his view, they did not work well as a team and were a hindrance to the store's financial success. At least one of the female employees who complained of sexual harassment had been terminated by the plaintiff.
• Plaintiff adamantly denied having harassed anyone. Indeed, he maintains that had defendant Saenz made an effort to contact him personally to get his side of the story, defendant Saenz would have realized that the allegations were false.
• Plaintiff, however, admitted having made an inappropriate comment to a female manager who worked at another store at the company's Christmas party. Plaintiff conceded his comment was inappropriate and stated he had immediately apologized to the employee for his actions. Nevertheless, this employee apparently complained to the company and her statement became part of the allegations of sexual harassment made against plaintiff.
• According to plaintiff, defendant Saenz' action of abruptly terminating his employment without first conducting a proper investigation of the allegations made against him, was a pretext for unlawfully discriminating against him on the bases of his age and race.
• Indeed, it is plaintiff's position that defendants, along with their former regional manager Ernest Brown, fabricated the allegations of sexual harassment in an attempt to create a pretext for terminating his employment. According to plaintiff, this was done so that defendants did not have to pay health-care benefits to the plaintiff. It is plaintiff's contention that these benefits would have been expensive for the company because of his age and health history.
• Plaintiff further testified that from the very beginning, defendant Saenz intended to take advantage of his vast business knowledge and experience, firing him before he became an "expensive liability" for the company. It is plaintiff's belief that defendant Saenz never intended to give him health-care benefits.
• Regarding his racial discrimination claim against the company, plaintiff primarily relies on his review of the 2000 Census, which reflected that the majority of the population (about 58.7%) in Bexar County was Hispanic. Therefore, since Caucasians were a minority in Bexar County in 2000 when he was terminated, plaintiff contends he should be entitled to rely on that fact as proof of his race discrimination claim against the defendants.
Id. at Plaintiffs Proposed Findings of Fact No. 6.
• Plaintiff's reliance on the 2000 Census, however, fails to explain the undisputed fact that while the company was a Hispanic-owned business, the majority of the employees at the San Antonio store (and company-wide), were non-Hispanic. Plaintiff's trial testimony did not include any evidence that defendant Saenz had a pattern of treating Caucasian (or non-Hispanic) employees any different than his other (Hispanic) employees. Plaintiff only speculated on the stand that in light of his successful record as store manager, race must have been the reason for his termination. Plaintiff also made reference to the fact that his successor to the position was a younger Hispanic male employee.
For instance, according to plaintiffs testimony, the racial make up of the workforce at the San Antonio store was: five White employees (including one Italian), plus one who was one-half Chinese, one Black employee, and four Hispanic employees, for a total of eleven employees.
Docket Entry 41, Plaintiffs Proposed Findings of Fact No. 19.
• Besides alleging discrimination based on his age and race, plaintiff also testified that defendant Saenz defamed his name and reputation by communicating to others outside the company, including prospective employers, the "fabricated" reason for his termination. This, plaintiff maintains, has caused a "chilling effect"on plaintiff's pursuit of subsequent employment.
• Plaintiff nevertheless testified that he has obtained subsequent employment with Outdoor Golf Greens and with Verizon Wireless and does not believe these employers were aware of the sexual harassment allegations.
When I asked plaintiff at trial what causes of action he was pursuing in this suit, plaintiff responded: a contract claim under § 1981, a breach of contract claim under Texas common law, an age discrimination claim, a race discrimination claim, and a fraud under Texas law. Plaintiff did not mention defamation or "libel and slander" as were pleaded in his First Amended Complaint. Docket Entry 29, at Count IV. Thus, I find that plaintiff has abandoned any claim he had previously asserted for defamation or libel and slander, and for that reason, I will not address the substantive merits of same.
• Plaintiff testified that as a direct result of defendants' unlawful actions, he has suffered: an inordinate amount of stress, anger and resentment for the way in which he was terminated, worsening of his diabetes and high blood pressure necessitating an increase in prescribed medication, difficulty sleeping, and loss in appetite. Plaintiff testified that he cannot live with the wrongful accusation of sexual harassment unfairly lodged against him. He finds it very difficult to accept how a false accusation can ruin years of hard work and dedication to build a solid name and fine reputation.
Docket Entry 41, Plaintiffs Proposed Findings of Fact No. 25.
• Besides plaintiff's testimony, a fact witness testified regarding plaintiffs character, business reputation and the mental anguish and physical damage plaintiff suffered as a result of the termination.
• After the plaintiff finished presenting his case, defendant Saenz took the stand on behalf of himself and as President of MS Communications. He primarily testified about his concerns related to the allegations of sexual harassment brought against plaintiff. He stated that it was his understanding the complaining employees had already retained legal counsel and at least one of them was contemplating suing the company.
• At the time the company received notice of the sexual harassment complaints, defendant Saenz was in Florida on business. He asked his regional manager at the time, Ernest Brown, to temporarily remove plaintiff from the San Antonio store until his return to Texas. Instead of a temporary removal, however, Mr. Brown proceeded to terminate plaintiff's employment.
• Defendant Saenz stated that while termination was not what he originally intended, he did not make an effort to reinstate plaintiffs employment. He testified that he attempted to contact plaintiff by telephone to explain the situation but was unable to reach plaintiff. Upon cross-examination, Defendant Saenz was confronted with the fact that his telephone logs did not reflect that he made those calls to the plaintiff's home telephone number.
Id. at Plaintiff's Disputed Facts No. 2.
Id.
• Even though defendant Saenz admitted that in hindsight he would have handled the situation differently, he testified that age and/or race played no role in his decision to terminate plaintiff's employment. As the owner of a small company, he was primarily concerned with the very real prospect of a sexual harassment lawsuit(s) against the company by the former female employees.
• With respect to the racial makeup of MS Communications' total workforce, defendant Saenz testified that from a workforce of approximately forty employees, 85% were White and 25% were Hispanic.
• Shortly after plaintiff's termination, plaintiff hired attorney Ron Golloway, who immediately wrote a due diligence letter to defendant Saenz seeking more information about the sexual harassment allegations made against the plaintiff which resulted in his termination. According to plaintiff, defendant Saenz never responded to the letter. While not clear from the record, it appears that plaintiff's counsel may have also sent defendants a separate settlement letter to which defendants' previous attorney acknowledged, but failed to formally respond.
Id. at Plaintiffs Proposed Findings of Fact No. 27 Exhibit 2.
Id.
• Unable to obtain a satisfactory response from defendants regarding the circumstances surrounding his termination, plaintiff filed a charge of discrimination with the Equal Employment Opportunity Commission (the "EEOC"), asserting violations of the Age Discrimination in Employment Act ("the ADEA"), 29 U.S.C. § 621 et seq., the Civil Rights Act of 1964 ("Title VII"), 42 U.S.C. § 2000e et seq., and chapter 21 of the Texas Labor Code violations. Plaintiff received his right to sue letter from the EEOC on December 21, 2000.
Id. at Plaintiff's Proposed Findings of Fact No. 5.
Section 623(a) of the ADEA states:
It shall be unlawful for an employer —
(1) to fail or refuse to hire or to discharge any individual or otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's age;
(2) to limit, segregate, or classify his employees in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual's age; or
(3) to reduce the wage rate of any employee in order to comply with this chapter.29 U.S.C. § 623(a)(1999).
Section 2000e-2(a) of Title VII provides:
It shall be an unlawful employment practice for an employer —
(1) to fail or refuse to hire or discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's race, color, religion, sex, or national origin; or
(2) to limit, segregate, or classify his employees or applicants for employment in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual's race, color, religion, sex, or national origin.
Section 21.051 of the Texas Labor Code provides:
An employer commits an unlawful employment practice if because of race, color, disability, religion, sex, national origin, or age, the employer:
(1) fails or refuses to hire an individual, discharges an individual, or discriminates in any other manner against an individual in connection with compensation or the terms, conditions, or privileges of employment; or
(2) limits, segregates, or classifies an employee or applicant for employment in a manner that would deprive or tend to deprive an individual of any employment opportunity or adversely affect in any other manner the status of an employee.
TEX. LAB. CODE ANN. § 21.051 (Vernon 1998).
Docket Entry 29. It appears that this lawsuit, filed in June of 2000, was prematurely brought as plaintiff had not yet received his right to sue letter from the EEOC. Exhaustion of administrative remedies is a jurisdictional pre-requisite for the filing of a Title VII lawsuit in federal court. 42 U.S.C. § 2000e-5. Nevertheless, I will address the substantive merits of plaintiff's suit.
• In addition to the causes of action raised in his EEOC charge, plaintiff also asserts a civil rights violation in the making of a contract under the Civil Rights Act of 1866, as amended, 42 U.S.C. § 1981, and state law causes of action for breach of an oral contract and fraud in the inducement.
42 U.S.C. § 1981 reads as follows:
(a) Statement of equal rights All persons within the jurisdiction of the United States shall have the same right in every State and Territory to make and enforce contracts, to sue, be parties, give evidence, and to the full and equal benefit of all laws and proceedings for the security of persons and property as is enjoyed by white citizens, and shall be subject to like punishment, pains, penalties, taxes, licenses, and exactions of every kind, and to no other.
(b) "Make and enforce contracts" defined For purposes of this section, the term "make and enforce contracts" includes the making, performance, modification, and termination of contracts, and the enjoyment of all benefits, privileges, terms, and conditions of the contractual relationship.
(c) Protection against impairment The rights protected by this section are protected against impairment by nongovernmental discrimination and impairment under color of State law.42 U.S.C. § 1981 (1994).
Docket Entry 41, Plaintiffs Disputed Facts Nos. 4 7; and Docket Entry 29.
• In terms of the relief sought in this suit, plaintiff testified at trial that his lost wages and his health care benefits, with offsets, through September 30, 2000, amount to $212,083.47. His future lost earnings until his retirement age on June 2, 2002, are $47,187.52. In addition, plaintiff requests an award of "compensatory and punitive damages" in the amount of $50,000.00, and an award of court costs and reasonable attorneys' fees.
Id. at Plaintiff's Proposed Findings of Fact No. 29.
Id.
Id. at Plaintiff's Disputed Facts Nos. 5 8. In support of his request for court costs and reasonable attorneys' fees, plaintiff offered the testimony of his trial attorney.
III. Jurisdiction
This court has original and supplemental jurisdiction. 28 U.S.C. § 1331, 1343 and 1367.IV. Issues Presented
This case presents two main issues:
1. Whether plaintiff has established that defendants intentionally discriminated against him on the bases of his age and/or race, under the pleaded statutory authority?
2. Whether plaintiff has established a violation of state law under the theories of breach of contract and/or fraud in the inducement?
V. Conclusions of Law
A. Analytical FrameworkClaims of racial discrimination under Title VII and Section 1981, age discrimination under the ADEA, and racial and age discrimination under the Texas Labor Code can be proven by either direct or circumstantial evidence. Because plaintiffs case relies exclusively on circumstantial evidence, I must follow the analytical framework set forth by the United States Supreme Court in the seminal case of McDonnell Douglas Corp. V. Green, . "First, the plaintiff must establish a prima facie case of discrimination." Second, the employer must respond with a legitimate, nondiscriminatory reason for its decision. This burden on the employer is only one of production, not persuasion, involving no credibility assessments. Third, if the employer carries its burden, the "mandatory inference of discrimination" created by the plaintiff's prima facie case "drops out of the picture" and the fact finder must "decide the ultimate question: whether [the] plaintiff has proven [intentional discrimination]." In making his showing on this ultimate question, "the plaintiff can rely on evidence that the employer's reasons were a pretext for unlawful discrimination," and the fact-finder "may still consider the evidence establishing the plaintiffs prima facie case `and inferences properly drawn therefrom.'" An employer is entitled to judgment as a matter of law on this ultimate question "if the evidence taken as a whole would not allow a [fact-finder] to infer that the actual reason for the [employer's decision] was discriminatory."
411 U.S. 792 (1973). "Although McDonnell Douglas is a Title VII case, [the Fifth Circuit has] previously held that its framework is applicable to ADEA cases." See Woodhouse v. Magnolia Hospital , 92 F.3d 248, 252 n. 3 (5d Cir. 1996); and Bauer v. Albemarle Corp ., 169 F.3d 962, 966 (5th Cir. 1999). See also Evans v. City of Houston , 246, F.3d 344, 349 (5th Cir. 2001) ("Claims of racial discrimination under Title VII, age discrimination under the ADEA, and racial and age discrimination under the [Texas Labor Code] are all evaluated within the same analytical framework.") (citations omitted). Also, the allocation of burdens under Title VII applies to proving intentional discrimination under Section 1981. See Patterson v. McLean Credit Union , 491 U.S. 164 (1989).
See Reeves v. Sanderson Plumbing Products, Inc ., 530 U.S. 133, 120 S.Ct. 2097, 2106 (2000).
McDonnell Douglas , 411 U.S. at 802.
See Tex. Department of Community Affairs v. Burdine , 450 U.S. 248, 255-56 (1981).
St. Mary's Honor Center v. Hicks , 509 U.S. 502, 511-12 (1993);and Burdine , 450 U.S. at 255-56 n. 10 ("The ultimate burden of persuading the trier of fact that the defendant intentionally discriminated against the plaintiff remains at all times with the plaintiff.").
St. Mary's Honor Center , 509 U.S. at 511-12.
Reeves , 120 S.Ct. at 2106.
Vadie v. Mississippi State University et al ., 218 F.3d 365, 372 (5th Cir. 2000).
B. Application of the Analytical Framework
Plaintiff's case of intentional discrimination is based on three main factual allegations: (1) that defendants intentionally terminated him to deny him the employment benefit of health-care coverage; (2) that defendants failed to properly conduct an investigation of the sexual harassment allegations made against him prior to terminating his employment; and (3) that defendants took advantage of his business experience and then unexpectedly terminated his employment. Plaintiff contends that defendants' decision to terminate his employment was unlawful because it was motivated by his age and race. These factual assertions, while perhaps unfair, do not rise to the level of employment discrimination that is actionable under the pleaded statutes.
i. Plaintiff's Claim of Age Discrimination
According to the McDonnell Douglas circumstantial evidence framework, plaintiff is required to establish the following prima facie elements under the ADEA and the Texas Labor Code: (1) that he was terminated; (2) that he was qualified for his position; (3) that he was within the protected class; and (4) that he was replaced by someone outside the protected class, someone younger, or was otherwise terminated because of age. I find that plaintiff has presented enough evidence to satisfy his prima facie burden.
Brown v. CSC Logic, Inc ., 82 F.3d 651, 654 (5th Cir. 1996) (citations omitted).
For instance, there is no dispute that plaintiff was qualified for the position of store manager and that he was successful in managing the San Antonio store. There is also no question that he meets the "protected class" requirement because he is over the age of forty. While the ultimate issue becomes whether he was terminated because of his age, plaintiff has brought forth sufficient evidence demonstrating element four of his case, that is, that he was replaced by a male employee who was younger than him and not in his protected class. Accordingly, the burden has shifted to the defendants to articulate a non-discriminatory reason for plaintiff's termination.
The defendants met this burden, relying on the sexual harassment accusations made by two former female employees against the plaintiff as justification for plaintiff's termination. This justification, on its face, is a legitimate non-discriminatory reason for defendants' actions. The burden, therefore, returned to plaintiff to prove that the defendants' reason was a pretext for age discrimination. This plaintiff cannot do.
Plaintiff, for instance, asserts that he has met his ultimate burden of proving intentional discrimination by showing that: (1) the allegations of sexual harassment were untrue, and had defendants properly investigated the same, they would have come to that conclusion; (2) defendants fabricated the sexual harassment allegations to create an excuse to terminate him before he became eligible to receive health-care benefits; (3) his termination, prior to conducting a thorough investigation of the sexual harassment charges, was unwarranted and in violation of the law; and (4) the defendants, particularly defendant Saenz, took advantage of his vast business experience prior to terminating his employment.
Plaintiff refers to the decision made by the Texas Workforce Commission to award him unemployment compensation benefits despite defendants' reason justifying his termination. See Docket Entry 41, Plaintiff's Proposed Findings of Fact No. 28 and Plaintiffs Trial Exhibit No. 1. According to Texas statutory authority, however, findings made by the Texas Workforce Commission are inadmissible in subsequent proceedings. See Waggoner v. City of Garland, Texas, , 987 F.2d 1160, 1164-65 (5th Cir. 1993).
It should be noted that plaintiffs trial testimony failed to elicit specific examples of how defendants purportedly benefitted from plaintiffs business experience to his detriment.
Regarding the first two allegations, case authority from the Fifth Circuit Court of Appeals provides that whether the allegations of sexual harassment were true or false, is irrelevant. The critical issue in those cases, as in this case, is whether the defendants believed in good faith that plaintiff had committed the offensive behavior and that plaintiff was terminated for that reason.
See Waggoner , 987 F.2d at 1165.
In the typical age discrimination claim, the employer's proffered reason for termination will rely on the employer's own evaluation of the employee, i.e., his work performance was unsatisfactory, he was a discipline problem, or another employee was better qualified. In Thornbrough v. Columbus G.R. Co ., a case in which the employer justified the employee's termination on the basis of qualifications, the Fifth Circuit stated:
760 F.2d 633, 639 (5th Cir. 1985).
Of course the issue in this case is not whether Thornbrough or the retained employees were better qualified. The [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 personal managers . . . However, if the fact finder determines that [the discharged employee] was clearly better qualified than the employees who were retained, it is entitled to conclude that the [employer's] articulated reasons are pretexts.
Id . at 647.
In other discrimination cases, however, the employer begins an investigation and terminates an employee based on complaints lodged by one or more other employees, such as complaints of sexual harassment. In those cases, the validity of the initial complaint is not the central issue, because the ultimate falseness of the complaint proves nothing as to the employer, only as to the complaining employee.
Waggoner , 987 F.2d at 1165.
For example, in Waggoner v. City of Garland, Texas , the plaintiff filed an ADEA claim against his former employer arguing that the allegations of sexual harassment made by a co-worker against him were fabricated and used as pretext to have him terminated. The Fifth Circuit, in affirming the district court's decision granting summary judgment in favor of the employer, held that the plaintiff had failed to show that his termination, following his employer's investigation of the sexual harassment allegations made against him, was a pretext for age discrimination. Significantly, the Waggoner court stated that the determinative issue is "whether the employer reasonably believed the employee's allegation and acted on it in good faith, or to the contrary, the employer did not actually believe the co-employee's allegation but instead used it as a pretext for an otherwise discriminatory dismissal." Following Waggoner , the inquiry in this case is limited to whether the defendants believed the sexual harassment allegations made against plaintiff in good faith and whether their decision to terminate plaintiff was based on that belief.
987 F.2d 1160 (5th Cir. 1993).
Id . at 1165-67.
Id . at 1165.
Id . at 1165-66 fn. 21. See also Jones v. Flagship Int'l , 793 F.2d 714, 729 (5th Cir. 1986) (holding that a termination decision is not pretextual if the employer had reasonable grounds [for the decision], or in good faith thought it did."); De Anda v. St. Joseph Hospital , 671 F.2d 850, 854 n. 6 (5th Cir. 1982) ("Whether St. Joseph was wrong in its determination that [employee] should have checked [the origins of the incompatibility of two solutions which were being administered together to hospital patients through an IV] is irrelevant, as long as its belief, though erroneous, was the basis for termination."); and Dickerson v. Metropolitan Dade County , 659 F.2d 574. 581 (5th Cir. 1981 Unit B) ("Even if [the employer] [was] wrong in its evaluation of the seriousness of the injury and the justifiability of the absences, it did not violate Title VII if it acted on the reasonable belief about the absences.").
According to his sworn testimony at trial and his proposed findings of fact submitted post-trial, plaintiff in this case (as the plaintiff did in Waggoner ) relies on his alleged innocence to the sexual harassment allegations made against him. This evidence, however, is irrelevant. Plaintiff, instead, must produce evidence demonstrating that defendant Saenz, along with former regional manager Ernest Brown, did not in good faith believe the allegations, but relied on them in bad faith, as a pretext to discriminate against plaintiff on the basis of his age. Indeed, plaintiff alleges, as the plaintiff in Waggoner , that defendant Saenz and Brown not only knew the allegations were false, but that they in fact fabricated them for the purpose of discriminating against him because of his age. Particularly, plaintiff contends that the timing of his termination, one day before he became fully vested to receive health-care coverage by the company as a permanent employee, establishes that the sexual harassment allegations were used as pretext to deny him that employment benefit on the basis of his age. Contrary to plaintiff's position, however, the mere timing of his termination, without more, is not probative evidence of intentional discrimination based on age.
Docket Entry 41, Plaintiffs Proposed Findings of Fact Nos. 23 33.
In fact, besides plaintiff's conclusionary statements that age must have been the reason for his termination, there was no evidence adduced at trial showing a nexus between the sexual harassment allegations and plaintiffs entitlement to health-care benefits. The evidence is undisputed that defendant Saenz offered plaintiff the job, irrespective of his age and related health issues. It also appears based on the evidence of record that the company and defendant Saenz applied the ninety-day probationary policy to all its new employees, regardless of their age. There is simply no evidence that plaintiff was treated differently because of his age in the terms and conditions of his probationary period with the company.
With respect to the allegations of sexual harassment, even if the allegations were not valid or did not lead to litigation against the company, the defendants' good faith beliefs, even if incorrect, were nevertheless reasonable under the circumstances presented in the case. Further, while plaintiff claims the sexual harassment allegations did not warrant his termination, plaintiff fails to recognize that in an at-will employment relationship, such as the one existing in this case, an employer could terminate an employee with or without cause. Further, although most companies have a progressive disciplinary procedure applicable to permanent employees, there is no case authority cited by the plaintiff, or found by me, requiring that similar procedures be implemented by an employer when dealing with probationary employees. More importantly, plaintiff has failed to present any evidence that other (permanent or temporary) employees, who were subjects of similar allegations of misconduct, were not immediately terminated from employment by the defendants as plaintiff was.
See Montgomery County Hospital District v. Brown , 965 S.W.2d 501, 502 (Tex. 1998) ("The general rule is that, absent a specific agreement to the contrary, employment may be terminated by the employer or the employee at will, for good cause, bad cause, or no cause at all.").
Plaintiff takes issue with the fact that defendants terminated him without first having conducted an investigation of the allegations made against him. While many employers have internal procedures to effectively handle employee complaints of discrimination in their workplaces, the courts, including the United States Supreme Court, have declined to set a bright line rule as to what constitutes "prompt and remedial action" by an employer when faced with a complaint of discrimination. The courts in that regard have recognized that the reasonableness of an employer's action in handling such complaints internally, is dependent upon the size and resources of the company or business. In this case, it can be said that as soon as the company became aware of the sexual harassment allegations, it acted promptly by removing the plaintiff from his managerial position. Whether a better management practice would have been to temporarily suspend the plaintiff pending an investigation, there is no indication that defendants' termination decision was motivated by age-based animus. "Misfeasance, malfeasance, or nonfeasance-without nexus to age [. . .] — is not actionable . . . [under the ADEA]."
See Burlington Industries, Inc. v. Ellerth , 118 S.Ct. 2257, 2270 (1998); and Faragher v. City of Boca Raton , 118 S.Ct. 2275, 2292-93 (1998).
Id .
See Odom v. Frank , 3 F.3d 839, 850 (5th Cir. 1993).
For these reasons, I find that defendants are entitled to judgment as a matter of law with respect to plaintiff's age discrimination claim. The evidence adduced at trial taken as a whole does not allow me, as the fact-finder, to infer that the defendants' proffered non-discriminatory reason for plaintiff's termination was a pretext for age discrimination. To the extent that plaintiff asserts an age discrimination claim under the Texas Labor Code, that claim fails as a matter of law as well, for the same reasons I articulated above regarding plaintiff's claim under the ADEA.
Vadie , 218 F.3d at 372.
ii. Plaintiffs Claim of Race Discrimination
Plaintiff's prima facie burden to prove race discrimination under Title VII, § 1981 and the Texas Labor Code, is similar to his burden under the ADEA. That is, in order to prove race discrimination, plaintiff must establish that: (1) he is a member of a protected class; (2) he was qualified for the position that he held; (3) he was terminated or suffered some other adverse employment decision; and (4) that after having been terminated, defendants replaced him with a person who is not a member of the protected class. The only prima facie element disputed by defendants is the first element, namely, whether plaintiff, a White or Caucasian individual, can be considered a member of the protected class for purposes of bringing an action under Title VII and § 1981. While there is no question that white plaintiffs can bring an action for reverse discrimination under Title VII, the same cannot be said for Section 1981. Enacted as part of the Civil Rights Act of 1866, § 1981 was doubtless adopted as a means for protecting the civil rights of the former black slaves. In that regard, the literal language of § 1981 refers to the entitlement of "all persons" to the same right "to make and enforce contracts" and "to the full and equal benefit of all laws . . . as is enjoyed by white citizens." Nevertheless, in keeping with the general Congressional purpose for enacting the statute, that is, to ensure that all persons be treated equally, without regard to color or race, I will assume, for purposes of entering this Order only, that plaintiff has met his burden of showing that he is a member of a protected class under § 1981.
See Meinecke v. H R Block of Houston , 66 F.3d 77, 82 (5th Cir. 1995).
Docket Entry 40, at 3.
See Alizadeh v. Safeway Stores, Inc ., 802 F.2d 111, 114 (5th Cir. 1986).
See quoted statute at note 23, supra (Emphasis added).
See McDonald v. Santa Fe Trial Transportation Co ., 427 U.S. 273 (1976), where the United States Supreme Court specifically rejected the argument that § 1981 protects only blacks, holding that white plaintiffs alleging reverse discrimination could bring an action under the statute.
Further, it should be noted that in Evans v. City of Houston , 246 F.3d 344, 356-59 (5th Cir. 2001), the Court stated that when a plaintiff relies on the same discriminatory conduct for both Title VII and § 1981 claims, he may seek redress under both statutes, as long as the complained-of conduct violates both Title VII and a separate statutory or constitutional right. Id . In this case, it does not appear that plaintiff has asserted any other statutory or constitutional right besides his Title VII claim of discrimination.
Having said that, however, the defendants have proffered the same legitimate non-discriminatory reason to rebut plaintiff's race discrimination claim as the one brought to rebut plaintiff's age discrimination claim; that is, that plaintiffs termination resulted from the sexual harassment allegations made against him by two former female employees. As with plaintiff's age discrimination claim, there is no evidence that plaintiff's race played a factor in defendants' decision to terminate his employment. Further, the uncontroverted evidence adduced at trial, through plaintiffs own testimony as well as that of defendant Saenz, demonstrates that the majority of the San Antonio store employees were non-Hispanic. In fact, defendant Saenz testified that the racial make-up of his employees company-wide was 85% White and 25% was Hispanic. Moreover, there is no evidence that defendants in any way treated their White or non-Hispanic employees any different than their Hispanic employees.
Despite this evidence, plaintiff relies on the purported data from the 2000 Census to argue that because the majority of Bexar County residents was Hispanic, it must then follow that as a White or Caucasian individual working in Bexar County, he was discriminatorily terminated because of his race. Plaintiff's testimony regarding his interpretation of the 2000 Census data is not competent proof of anything, much less of whether he was discriminated against at his workplace because of his race. Plaintiff's subjective belief that race must have been the reason for his termination is based on pure speculation and conjecture and does not amount to competent circumstantial evidence.
For these reasons, I hereby find that defendants are entitled to judgment as a matter of law with respect to plaintiff's race discrimination claim under the three pleaded statutes. The evidence adduced at trial taken as a whole does not allow me, as the fact-finder, to infer that the defendants' proffered non-discriminatory reason for plaintiffs termination was a pretext for race discrimination. iii. Plaintiffs Breach of Contract Claim
Odom , 3 F.3d at 849-50.
Plaintiff's claim under Texas common law is premised on the theory that defendants breached their oral contract with plaintiff to continue his employment for as long as he performed his job, when they wrongfully terminated him.
Docket Entry 29, at Count Five.
To establish his cause of action for wrongful termination, plaintiff must prove: (1) that he and his employer had a contract that specifically provided that the employer did not have the right to terminate the employment contract at will, and (2) that the employment contract was in writing. The first requirement stems from the common law in Texas that employment contracts are "at will" unless the parties agree otherwise. The second requirement, stems from the statute of frauds, which provides that contracts not to be completed within one year are not enforceable unless in writing.
See Webber v. M.W. Kellog Company , 720 S.W.2d 124, 127 (Tex.App. — Houston [14th Dist.] 1986, no writ) (statute of frauds barred claim based on oral agreement that employment was permenent).
Id . (citation omitted).
Tex. Bus. COM. CODE ANN. § 26.01(b)(6) (Vernon 1987).
Conflicting views exist under Texas law regarding the enforceability of oral agreements purporting to limit an employer's right to terminate an employee. One line of authority holds that any agreement limiting employment-at-will must be in writing. Another line of authority holds that oral agreements restricting an employer's right to discharge an employee are enforceable as long as the oral agreement does not violate the statute of frauds. Under this line of authority, to succeed on a wrongful discharge claim, the employee must prove an oral modification of his employment-at-will status by a person who had authority to make the modification. It is my understanding that the Texas Supreme Court has yet to render a definitive ruling on the issue.
See e.g., Conaway v. Control Data Corp ., 955 F.2d 358, 361 (5th Cir.), cert. denied , 506 U.S. 864 (1992); and Wilhite v. H.E. Butt Co ., 812 S.W.2d 1, 5 (Tex.App.-Corpus Christi 1991, no writ).
See e.g., Zimmerman v. H.E. Butt Grocery Co ., 932 F.2d 469, 471 (5th Cir.), cert. denied , 502 U.S. 984 (1991); Pruitt v. Levi Strauss Co ., 932 F.2d 458, 463 (5th Cir. 1991); Goodyear Tire Rubber Co. v. Portilla , 836 S.W.2d 664 (Tex.App.-Corpus Christi 1992); Moore v. Office of the Attorney General , 820 S.W.2d 874, 877 (Tex.App. — Austin 1991, no writ); and Johnson v. Ford Motor Co ., 690 S.W.2d 90, 93 (Tex.App.-Eastland 1985, writ ref'd n.r.e.).
Portilla , 836 S.W.2d at 664; Moore , 820 S.W.2d at 877; and Johnson , 690 S.W.2d at 93.
Under both approaches, some oral agreements fail, either because the limitations are not in writing or because they violate the statute of frauds on their face. For example, an employer's agreement to employ a person permanently, for life, for a stated terms of years, until retirement, or until age sixty-five is unenforceable unless it is in writing because it cannot be performed within one year. Where the oral promise made by the employer is that the employee will be retained as long as his work is satisfactory, the result is different. Such an agreement obviously is unenforceable under that line of authority requiring a written contract. However, oral agreements contingent only on the employee's satisfactory performance have been upheld in some instances by courts that recognize the enforceability of oral limitations on employment-at-will. These courts reason that the employee can be terminated at any time his performance becomes unsatisfactory, a contingency that could occur within the first year. Therefore, such agreements do not violate the statute of frauds because they need not last longer than a year. In Pruitt v. Levi Strauss Co ., for instance, the Fifth Circuit concluded that the Texas Statute of Frauds did not bar the enforceability of an oral promise of employment as long as the employee performed his job satisfactorily. Nevertheless, because another panel of the Fifth Circuit held to the contrary in Falconer v. Soltex Polymer Corp ., the Pruitt court felt constrained to follow Falconer because one "panel may not overrule the decision, right or wrong, of a prior panel." Thus, it appears there is no clear Fifth Circuit precedent on the issue.
See Zimmerman , 932 F.2d at 473.
See e.g., Falconer v. Soltex Polymer Corp ., 886 F.2d 1312 (5th Cir. 1989) (unpublished opinion); Perez v. Vinnell Corp ., 763 F. Supp. 199, 200 (S.D. Tex. 1991); and Rodriguez v. Benson Properties, Inc ., 716 F. Supp. 275, 277 (W.D. Tex. 1989).
See Portilla , 836 S.W.2d at 664; and Johnson , 690 S.W.2d at 93.
Id .
932 F.2d 458 (5th Cir. 1991).
Id . at 464.
886 F.2d 1312 (5th Cir. 1989) (unpublished opinion)
Pruitt , 932 F.2d at 465 (citation omitted).
Nevertheless, despite the lack of clear precedent on the issue, plaintiffs assertions fail under either approach. The gist of plaintiffs oral contract claim is that when he was terminated, he was wrongfully deprived of the long-standing employment he had been promised. His first amended complaint as well as his proposed findings of fact submitted post-trial, make reference to the long term prospect of employment with the company. It is evident that plaintiff expected to work with the company for at least three years until he reached retirement age. Plaintiff in that regard avers: "The term of the employment contract commences on November 12, 1999. Plaintiff was entitled to benefits from Defendants, including a salary, a commission based upon the store's production, vacation pay, retirement benefits, sick leave, and health care." Plaintiffs Proposed Findings of Fact submitted post-trial also make reference to the long term prospect of employment with the company, of at least three more years until plaintiff reached his retirement age.
Docket Entries 29 and 41.
Docket Entry 29, at Count Five.
Docket Entry 41.
Plaintiffs efforts to allege an enforceable oral contract are unsuccessful. A review of the record reveals that oral representations upon which plaintiff relies are in essence promises of permanent employment, employment until retirement, and long-standing employment. Oral agreements founded on promises of that nature are unenforceable under the Texas Statute of Frauds.
Zimmerman , 932 F.2d at 473.
Although plaintiff tries to inject a performance component to avoid the statute of frauds, his claims are similar to those of the plaintiff in Wal-Mart Stores, Inc. v. Coward . In Coward , the plaintiff alleged that he had an oral agreement in which a management employee said that "[he] had the job as long as [he] wanted it and made a good hand. And he promised [him] a job there for life if [he] wanted it." The court found that the oral promise was not enforceable because Coward's own testimony placed his employment tenure at a term greater than one year. Plaintiff in this case has likewise placed his tenure of promised employment at greater than one year by his testimony that he was told that he had the prospects of long term employment with the company. Based on plaintiff's own testimony and pleadings of record, he expected his term of employment to last longer than a year, making any oral agreement subject to the statute of frauds. While plaintiff alleged in his amended complaint that defendants told him that he would continue to be employed for so long as he performed his job, this was not developed at all at trial. Therefore, plaintiff's alleged oral agreement, if not otherwise unenforceable, is barred by the statute of frauds. iv. Plaintiff's Claim for Fraud in the Inducement
829 S.W.2d 340, 342 (Tex.App.-Beaumont 1992, writ denied).
Id . at 342.
Id . at 343.
See Brown , 965 S.W.2d at 502, where the Texas Supreme Court stated that comments made by the plaintiffs supervisor, that plaintiff-employee would be able to keep her job at the Hospital as long as she was doing her job and that she would not be fired unless there was a good reason or good cause to fire her, did not amount to an enforceable oral contract. "For such a contract to exist, the employer must unequivocally indicate a definite intent to be bound not to terminate the employee except under clearly specified circumstances." Id .
See Rayburn v. The Equitable Life Assurance Society of the United States , 805 F. Supp. 1401, 1403 (S.D. Tex. 1992) (employer's purported oral promise of lifetime employment if employee met certain performance goals was unenforceable under the Texas Statute of Frauds).
Plaintiff contends that defendant Saenz made fraudulent statements during their pre-employment meetings in order to induce plaintiff into accepting employment with the company. According to paragraph ten of plaintiffs proposed findings of fact, plaintiff contends that:
The statements made by defendant Mark Saenz were false in the following manner: a) [MS Communications] did not have any employment policies or procedures to comply with the law or [MS Communications] and Mark Saenz never published the employment policies or procedures to any of its managers or employees, b) that Plaintiff was not treated fairly by his employer since at no time were inquiries made of Plaintiff as to his response to the accusation of sexual harassment nor was any hearing provided to Plaintiff, c) Mr. Saenz and [MS Communications] did not want Plaintiff to grow with MS but simply wanted to secure Plaintiff's expertise to [develop] MS's marketing strategy, d) [MS Communications] did not provide health care benefits to employees at the end of ninety days, but instead had a pattern of terminating employees when they requested health care benefits, and e) Plaintiff was not given the opportunity to increase his management responsibilities at the corporate level, but instead his expertise was used and then he was terminated.
Docket Entry 41, Plaintiff's Proposed Findings of Fact No. 10.
Plaintiff further maintains that defendant Saenz knew the falsity of these statements when he made them, that the statements were made with the intention that plaintiff would rely on them, and that indeed, plaintiff was damaged as a result of acting upon such statements.
Id . at Plaintiffs Proposed Findings of Fact Nos. 11-13.
Under Texas law, a plaintiff establishes a fraudulent inducement claim by showing elements of a simple fraud claim. The elements of fraud and fraudulent inducement are: "(1) a material representation, (2) which was false, and (3) which was either known to be false when made or was asserted without knowledge of the truth, (4) which was intended to be acted upon, (5) which was relied upon, and (6) which caused injury."
See Balogh v. Ramos , 978 S.W.2d 696, 701 (Tex.App. — Corpus Christi 1998, pet. denied) ("The Supreme Court of Texas has defined fraudulent inducement as a simple fraud claim.").
Id. See also Hamilton v. Segue Software Inc ., 232 F.3d 473, 480 (5th Cir. 2000) (court affirmed summary judgment entered in favor of the employer, finding that the employee had failed to establish that the employer's offer to him of a particular management position was a misrepresentation; and thus, defeating the employee's fraud in the inducement claim).
Contrary to plaintiff's position, there was no evidence adduced at trial establishing that defendant Saenz knowingly misrepresented the terms and conditions of plaintiffs employment as an attempt to lure him into accepting the offer of employment. Based on the testimony adduced at trial, defendant Saenz specifically told plaintiff the following regarding his role in the company: (1) that the store manager position may lead plaintiff into becoming the regional manager of other stores in the area; (2) that plaintiff, as store manager, would have overall discretion in the hiring and firing of personnel at his store; (3) that plaintiff would assist in the development of the company's marketing strategy nation-wide; and (4) that the company would offer plaintiff advancement opportunities. Defendant Saenz also informed plaintiff of the entry level salary for the store manager position and other related employment benefits to which employees are entitled to receive after their ninety-day probationary period, including health-care coverage.
It is undisputed that plaintiff performed as store manager for a period of three months. As his testimony showed, he made personnel decisions concerning the hiring and firing of employees at his store. He also earned the salary for the position of store manager as stated by defendant Saenz. There is no reason to believe that had it not been for the sexual harassment allegations made against plaintiff, that defendant Saenz would not have continued to retain plaintiff with the same employment benefits as any other permanent employee of the company. Further, there was no way for defendant Saenz to have foreseen the sexual harassment allegations made against the plaintiff at the time he made plaintiff an offer of employment. The sexual harassment allegations caused defendant to rescind plaintiffs employment and any chances of opportunities within the company. Finding that plaintiff has failed to meet his burden of showing that knowing misrepresentations were made at the time he accepted the offer of employment, plaintiff's claim fails as a matter of law.
This is assuming that the company would have remained in operation, which it did not.
VI. Conclusion
Based on the foregoing, plaintiffs asserted claims against the defendants are hereby DENIED . Plaintiff has failed to meet his burden under the applicable legal standards which would have entitled him to the relief sought. Accordingly, plaintiff's request for reasonable attorneys' fees and court costs is DENIED and this matter is DISMISSED WITH PREJUDICE . The parties shall bear their own costs.
42 U.S.C. § 2000e-2(a) (1994).