Phillips v. TXU Corp. , 194 F. App'x 221 ( 2006 )

United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT August 18, 2006
_____________________
Charles R. Fulbruge III
No. 05-11299 Clerk
(Summary Calendar)
_____________________
LILLIAN PHILLIPS,
Plaintiff - Appellant,
v.
TXU CORP., TXU ENERGY CO. LLC, TXU ENERGY RETAIL CO. LP,
Defendants - Appellees.
________________________________________
Appeal from the United States District Court
for the Northern District of Texas
No. 3:03-CV-2736
________________________________________
Before SMITH, GARZA, AND PRADO, Circuit Judges.
PER CURIAM:*
Lillian Phillips appeals from the district court’s order
granting summary judgment in favor of her employer, TXU Energy
Retail Co. (“TXU Retail”),1 on all her claims: sex discrimination
in violation of the Equal Pay Act (“EPA”), 29 U.S.C. § 206(e),
and Title VII, 42 U.S.C. § 2000e-2000e-17, and race
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
1
TXU Energy and TXU Retail are wholly-owned subsidiaries of
TXU Corp. Throughout this opinion, “TXU” refers to Defendants
collectively.
1
discrimination and retaliation in violation of Title VII.2 For
the following reasons, we AFFIRM.
I. Background
On May 21, 2001, Duane Lock, Director of Product Management
at TXU Retail, and Jim Hess, Vice-President of Strategic
Businesses at TXU Retail, hired Lillian Phillips, a black female,
for the position of Product Manager in the Product Management
Group. Product Management was a sub-group within TXU Retail’s
Strategic Accounts Department. Throughout her employment with
TXU Retail, Phillips reported to Lock, a black male, who reported
to Hess, a white male.
During the time of Phillips’s employment, TXU Retail
employed five Product Managers and paid them a salary within the
range of $6,420 to $9,640 per month. Phillips earned the second
highest salary at $7,916 per month. Chuck Wyse, a white male,
earned $8,666 per month. Wyse received a $2,500 signing bonus;
Phillips received a $2,000 signing bonus. A February 2002 raise
brought Phillips’s monthly salary to $8,235, and Wyse’s to
$8,930.
In December 2001, TXU Energy formed an ad hoc committee to
address issues of supplier diversity, and Lock assigned Phillips
to represent TXU Retail on the committee. In April 2002,
Phillips helped present a “Supplier Diversity Plan” to the
2
Phillips brought one claim in the district court that is
not subject to this appeal.
2
president of TXU Retail. In addition to her efforts on the
supplier diversity committee, Phillips volunteered as a member of
TXU Corp.’s Diversity Advisory Council (“DAC”). The DAC met
quarterly with the Diversity Steering Committee to present ideas
and give feedback regarding improving workplace diversity.
In January 2002, Phillips received an employee review that
indicated she met expectations. At the performance review
meeting, according to Phillips, Lock told Phillips that Hess “did
not like aggressive women but especially not aggressive black
women.”
In March 2002, Cheryl Stevens, Vice-President of Workforce
and Supplier Diversity at TXU Business Services Company,3 invited
the DAC members to a “get-to-know-you” lunch. Phillips had a
conflicting obligation but appeared briefly at Stevens’s luncheon
to introduce herself and said that she felt like she had “stepped
back in time” when coming to work at TXU. It is unclear how Lock
learned of Phillips’s statement; but after he did, Lock said to
Phillips that she “needed to be careful making those kinds of
statements in this company.” Lock denies making such a
statement.
Stevens and Phillips’s relationship became tense as they
quibbled over the turf of Supplier Diversity. At one point,
according to Phillips, after she and Stevens had a tense
3
Phillips did not report to Stevens, either directly or
indirectly.
3
discussion about Supplier Diversity, Stevens said to her, “You’d
better be more afraid of me than of [Lock] because [Lock] can
leave the company, but I will still be here and you will have to
deal with me.”
In the summer of 2002, TXU Retail underwent a reduction in
force: It terminated Phillips and 33 other Strategic Accounts
employees, including two white males from Product Management.
Phillips complained of her termination to TXU’s General Counsel
in September 2002. An investigation by Pat Dixon, Employee
Relations Manager, and Tommy Lee, Human Resources Manager of TXU
Retail, ensued. They concluded that there was no evidence of
discriminatory or retaliatory conduct with respect to Phillips’s
treatment while at TXU or her termination. Phillips filed suit
on November 10, 2003. After discovery, TXU filed and won summary
judgment on all of Phillips’s claims. Phillips appeals.4
II. Discussion
We review the grant of a summary judgment motion de novo,
and apply the same standard as the district court. Rachid v.
Jack in the Box, Inc., 376 F.3d 305, 308 (5th Cir. 2004); FED. R.
CIV. P. 56. We resolve any factual inferences in favor of
Phillips, the nonmovant, and ask whether TXU, the movant, is
entitled to judgment as a matter of law. Id.
4
In her complaint, Phillips also alleged TXU discriminated
against her by failing to hire her for several new positions
after her termination. She does not appeal the district court’s
grant of summary judgment to TXU on that claim.
4
The McDonnell-Douglas burden shifting standard for both
discrimination and retaliation claims in the Fifth Circuit is
well-settled. See, e.g., Manning v. Chevron Chem. Co., 332 F.3d
874, 881 (5th Cir. 2003); Davis v. Dallas Area Rapid Transit, 383
F.3d 309, 319 (5th Cir. 2004). First, Phillips must state a
prima facie case of discrimination or retaliation. Id. If she
succeeds, the burden shifts to TXU to provide a legitimate,
nondiscriminatory and nonretaliatory reason for paying her
differently from others in the same position and terminating her.
Id. If TXU satisfies this burden, the burden again shifts to
Phillips to prove that TXU’s proferred reason was pretextual.
Id. Phillips may also prove that sex or race was a motivating
factor for the pay differential or her termination, even if TXU’s
reason is true. Rachid v. Jack in the Box, Inc., 376 F.3d 305,
312 (5th Cir. 2004). “The plaintiff retains the ultimate burden
of persuasion throughout the case.” Faruki v. Parsons S.I.P.,
Inc., 123 F.3d 315, (citing Tex. Dep’t of Cmty. Affairs v.
Burdine, 450 U.S. 248, 253 (1981)).
A. Sex Discrimination
Phillips alleges that TXU discriminated against her on the
basis of sex by paying Wyse more than she was paid for the same
position. She asserts these facts for her sex discrimination
claim under both the EPA and Title VII.
“Title VII states that it is unlawful ‘to discriminate
against any individual with respect to his compensation . . .
5
because of such individual’s [. . .] sex.’” Siler-Khodr v. Univ.
of Tex. Health Sci. Ctr. San Antonio, 261 F.3d 542, 545-46 (5th
Cir.), cert. denied 537 U.S. 1087 (2002) (quoting 42 U.S.C. §
200e-2(a)). “[T]he EPA has a higher threshold [than Title VII],
requiring that an employer not discriminate ‘between employees on
the basis of sex . . . for equal work on jobs the performance of
which requires equal skill, effort, and responsibility, and which
are performed under similar working conditions. In short, it
demands that equal wages reward equal work.’” Id. at 546 (citing
29 U.S.C. 206(d)(1); Corning Glass Works v. Brennan, 417 U.S.
188, 195 (1974). Phillips’s burden to show that TXU’s
legitimate, nondiscriminatory reason is pretextual applies to
both theories. Plemer v. Parsons-Gilbane, 713 F.2d 1127, 1136
(5th Cir. 1983). The EPA defines the range of legitimate,
nondiscriminatory reasons available to an employer: An employer
may pay different wages under these circumstances based on one of
the four statutory exceptions to the EPA: (1) a seniority system;
(2) a merit system; (3) a system that measures earning by
quantity or quality of production; or (4) a differential based on
any other factor other than sex. Id.
TXU does not contest that Phillips established a prima facie
case for sex discrimination under both the EPA or Title VII.
Assuming she did,5 we proceed to TXU’s asserted legitimate,
5
The district court did not decide the issue, and TXU does
not contest that Phillips has established a prima facie case with
6
nondiscriminatory reason for its acts: Wyse had an MBA, unlike
Phillips, and had more years of marketing experience than she
did.6 TXU produced a witness from its human resources department
who testified that employees’ salaries, including Wyse’s and
Phillips’s, depended on their education and experience, and that
he placed Wyse in a higher pay range because of Wyse’s education
and experience. Lock testified he determined what amount to
offer to each Wyse and Phillips based on the salary ranges
established by the human resources department.
Phillips makes three arguments that TXU’s reason is
pretextual: she claims (1) that TXU did not consider education
and experience in determining salaries; (2) that Lock never
compared her education and experience to Wyse’s; and (3) that
TXU’s nondiscriminatory reason does not actually explain
Phillips’s salary at the time that decision was made. In support
of her first argument, she points to another Product Manager,
Trey Beasley, who earned less than Phillips despite Beasley’s
regard to her claim for sex discrimination under the EPA. To
establish a prima facie case under Title VII, Phillips must show
that she was (1) a member of a protected class, and (2) she was
paid less than a nonmember for work requiring substantially the
same responsibility. See Plemer at 1136. To establish a prima
facie case under the EPA, Phillips must show that: (1) TXU is
subject to the EPA; (2) she performed work in a position
requiring equal skill, effort, and responsibility under similar
working conditions as an employee of the opposite sex; and (3)
she was paid less than the employee of the opposite sex. See
Chance v. Rice Univ., 984 F.2d 151, 153 (5th Cir. 1993).
6
Phillips does not contest these facts.
7
MBA. Philips contends TXU could not have considered Wyse’s MBA
in determining his salary because Beasley’s MBA did not secure
him a larger salary than Phillips. Phillips ignores that
education was but one of the two factors cited by TXU as
variables that explain salary differences. The differences in
pay between Wyse, Phillips, and Beasley also depend on their
respective experience.
Regarding Phillips’s second argument, it is uncontested that
Lock did not make a side-by-side comparison of Wyse’s and
Phillips’s education and experience. Phillips recounts Lock’s
testimony that “[i]f there was a difference [in the salary
offered to Wyse and Phillips], it could have pretty much been
primarily two things, education and experience.” Phillips makes
much of Lock’s ostensible uncertainty in this testimony. Her
main contention is that Lock offers this explanation for the
salary difference as a possibility, not an actual fact. First,
neither the EPA nor Title VII requires employers to make side-by-
side comparisons. TXU’s identification of a differential basis
other than sex to explain the difference in Wyse’s and Phillips’s
salaries suffices to meet the EPA’s threshold. Second, Lock’s
testimony does not prove that he did not rely on Wyse’s and
Phillips’s education and experience in determining what salary to
offer each. Lock explained that he did not remember whether
there was a pay differential. He also explained the human
resources department’s role in compensation decisions during his
8
deposition:
Q: Do you remember in relation to Ms. Phillips’ offer
whether Mr. Wyse’s offer was higher or lower than hers?
A: At the time I had no idea whether it was higher or lower.
I was given a scale by HR; and based upon background,
experience, education, and consensus with HR, an offer was
made.
Lock relied on the human resources department to set appropriate
salary ranges for potential employees. Phillips does not allege
that TXU’s human resources witness discriminated against her when
he set her salary range. Clearly, when Lock accepted Human
Resource’s recommended salary ranges for each employee, he relied
on Wyse’s and Phillips’s education and experience in determining
their respective salary offers.7
Phillips fails to establish TXU’s nondiscriminatory reason
as pretextual. We affirm the district court’s grant of summary
judgment to TXU on her claim for sex discrimination under both
the EPA and Title VII.
B. Race Discrimination and Retaliation under Title VII
Assuming Phillips established a prima facie case for Title
7
In addition to the aforementioned arguments, Phillips
quotes Patrick v. Ridge, 394 F.3d 311 (5th Cir. 2004), and Uviedo
v. Steves Sash & Door Co., 738 F.2d 1425 (5th Cir. 1984), to
argue that TXU did not proffer sufficient evidence to support its
nondiscriminatory reason. Phillips’s reliance is misplaced.
Unlike in Patrick, the testimony of TXU’s witness from its human
resources department supports Lock’s explanation for the pay
differential and squarely places the reason behind the pay
differential at the time Lock made Phillips the salary offer.
Unlike in Uviedo, TXU timely offered evidence to support its
nondiscriminatory reason for paying Phillips a lower salary than
Wyse.
9
VII race discrimination and retaliation,8 we turn to TXU’s
proffered nondiscriminatory reason for Phillips’s termination.
TXU states that it terminated Phillips as part of a reduction-in-
force (“RIF”), termed “Project OPUS.” Upper level managers
received training and evaluated employees in an assessment
process that examined their job-related competencies. Lock
scored Phillips lowest among the Product Managers. Hence, she
was one of three who were terminated.9
Phillips concedes that terminating an employee in a RIF can
be a legitimate, nondiscriminatory reason for terminating an
employee, but contends that TXU did not offer further evidence in
support of its decision to terminate Phillips instead of other
employees. On the contrary, TXU offered evidence that Phillips
received the lowest score on the assessment because of Lock’s
perception of her lack of experience in product management and
8
A prima facie case of race discrimination requires that
Phillips show that (1) she belonged to a protected group; (2) she
was qualified for her position; (3) she was terminated; and (4)
others who were not members of the protected class remained in
similar positions. See Bauer v. Albemarle Corp., 169 F.3d 962,
966 (5th Cir. 1999).
Although TXU contests that Phillips demonstrated a prima
facie case of retaliation, for purposes of this review, we assume
that she did. Her prima facie case of retaliation requires
evidence that (1) she engaged in an activity protected by Title
VII; (2) that an adverse employment action occurred; and (3) that
a causal link exists between the protected activity and the
adverse employment action. Roberson v. Alltel Info. Servs., 373
F.3d 647, 655 (5th Cir. 2004).
9
One white male volunteered for termination; and the
employee with the next lowest score on the OPUS assessment,
another white male, was terminated with Phillips.
10
financial acumen.
Phillips does not contest that she received the lowest score
but argues that TXU’s reason is pretextual. She maintains that
her score is inaccurate and that TXU has given inconsistent
reasons for her termination. Phillips argues her score was
inaccurate because it was based on an inaccurate assessment, the
January 2002 performance reviews. She alleges that the January
performance reviews were biased. Even if we were persuaded by
Phillips’s arguments, TXU denies that the January performance
reviews were used in the decision-making process for the RIF, and
Phillips offers no evidence in support of her contention.
Next, Phillips argues that TXU gave conflicting reasons for
her termination. While each reason on its face may differ from
some others, Phillips ignores their relevancy to one another.
For example, she quotes Lock: “[The] two reasons why [Phillips]
was let go . . . [are] lack of experience with product
developmental [sic] management and lack of experience [with]
financial acumen.” She recounts TXU’s summary judgment motion:
“Phillips was selected to be terminated in the [RIF] based on her
low assessment scores, her limited knowledge of the Energy
Sentinel suite of products, and lack of financial skills.”
Phillips also cites to Dixon and Lee’s report to demonstrate what
she deems is another conflicting explanation: “[Phillips’s
termination] was due in large part to [her] lack of success in
completing two product development initiatives.” Phillips argues
11
that these ostensibly different reasons demonstrate their
falsity, relying on Thornbrough v. Columbus & Greenville R.R.
Co., 760 F.2d 633 to support this assertion.
Unlike in Thornbrough, reversal and remand is not warranted
in the instant case because Phillips did not refute any of the
quoted reasons; she thus fails to raise a genuine issue of
material fact with regard to pretext. See id. at 646.
Furthermore, the record demonstrates that Lock’s and TXU’s
reasons support one another: Lock admitted that he used the
assessment he prepared in deciding who he would terminate, and he
attributed Phillips’s low score on the assessment to her lack of
experience with product development management and lack of
financial experience. TXU’s summary judgment motion mentioned
both the assessment and Phillips’s lack of financial experience.
Even if Dixon’s and Lee’s roles were relevant to Phillips’s
termination, the reason they cite in their report is not
necessarily inconsistent with the others.
Phillips next contends that even if TXU’s reason is true,
TXU was motivated by her race in terminating her. She recounts
the tension between her and Stevens in the wake of Phillips’s
comment that she felt like she “stepped back in time.” She
reminds the court of Lock’s admonition that she “be careful
making those kinds of statements in this company,” as well as his
earlier statement that Hess “did not like black women but
especially not aggressive black women.” Phillips contends that
12
Lock is a “cat’s paw” for Hess, and that Lock terminated Phillips
to please his boss.
A remark is considered probative of discrimination if it
demonstrates discriminatory animus and was made by a person
primarily responsible for the adverse employment action or by a
person with influence or leverage over the formal decisionmaker.
Laxton v. Gap, Inc., 333 F.3d 572, 583 (5th Cir. 2003); See
Sandstad v. CB Richard Ellis, Inc., 309 F.3d 893, 899 (5th Cir.
2002).
Lock’s remark about Hess suggests that Hess held the
discriminatory animus, not the speaker. As it was Lock who was
responsible for Phillips’s termination, not Hess, Lock’s remark
about Hess’s alleged dislike is not probative of discrimination.
Phillips fails to produce any evidence to support her contention
that Lock was acting at Hess’s behest when he terminated
Phillips.10 Lock’s “better be careful” remark, assuming arguendo
that it evidences discriminatory animus, stands alone as the only
evidence of pretext. It does not raise a genuine issue of
material fact that TXU discriminated against Phillips. See
Palasota v. Haggar Clothing, Inc., 342 F.3d 569, 577 (5th Cir.
2003) (“After Reeves . . . so long as remarks are not the only
evidence of pretext, they are probative of discriminatory
10
Phillips’s “cat’s paw” argument consists of conclusory
allegations. The facts in this case do not raise the suspicion
generated in Russell v. McKinney Hospital Venture, 235 F.3d 219
(5th Cir. 2000), on which Phillips relies.
13
intent.”).
Phillips also points to Stevens’s remark, “[y]ou’d better be
more afraid of me than of [Lock]” as evidence of retaliation.
Phillips does not offer any evidence that Stevens had influence
or leverage over the formal decisionmaker, Lock.
III. Conclusion
We AFFIRM the district court’s grant of summary judgment.
14