Tyler v. Union Oil Co. of California , 304 F.3d 379 ( 2002 )

REVISED SEPTEMBER 16, 2002
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 00-51112
Consolidated with No. 01-50479
DONALD RAY TYLER; DONALD R. POWERS;
M. LEON EARLES; THOMAS L. HOUGH;
DAVID BURKETT,
Plaintiffs-Appellees-Cross-Appellants,
JESSIE G. PRICE,
Plaintiff-Appellant,
versus
UNION OIL COMPANY OF CALIFORNIA,
doing business as UNOCAL,
Defendant-Appellant-Cross-Appellee-Appellee.
------------------------
DONALD RAY TYLER; DONALD R. POWERS;
JESSIE G. PRICE; M. LEON EARLES;
THOMAS L. HOUGH; DAVID L. BURKETT,
Plaintiffs-Appellees-Cross-Appellants,
versus
UNION OIL COMPANY OF CALIFORNIA,
doing business as UNOCAL,
Defendant-Appellant-Cross-Appellee.
Appeals from the United States District Court
for the Western District of Texas
August 27, 2002
Before KING, Chief Judge and GARWOOD and HIGGINBOTHAM, Circuit
Judges.
GARWOOD, Circuit Judge:
These appeals and cross-appeals bring before us a variety of
issues in this suit under the Age Discrimination in Employment Act
(ADEA), 29 U.S.C. §§ 621 et seq., and the Fair Labor Standards Act
(FLSA), 29 U.S.C. §§ 201 et seq.
The plaintiffs, former employees of Union Oil Company of
California (Unocal), filed this suit against Unocal on March 19,
1998, alleging violations of the ADEA and the FLSA. A jury trial
was held on the ADEA claims. On December 12, 1999, the jury
returned a verdict in favor of all plaintiffs on their ADEA claims.
Beginning on December 12, 1999, a bench trial was held on the FLSA
claims. On September 19, 2000, the district court granted in part
and denied in part Unocal’s motion for judgment as a matter of law
(JMOL) on the ADEA claims. The court set aside the verdict in
favor of plaintiff Jessie G. Price (Price) and rendered judgment
for Unocal on Price’s claims. It upheld the liability verdicts in
favor of each of the other plaintiffs, but lowered the jury’s
2
damage awards. Also on September 19, 2000, the district court
issued its ruling on the FLSA claims, ruling in favor of plaintiff
Donald R. Powers (Powers) and against plaintiffs Price, M. Leon
Earles (Earles), and Thomas Hough (Hough).
The plaintiffs moved for an award of attorneys’ fees and
expenses. On May 11, 2001, the district court granted in part and
denied in part that motion.
Plaintiff Price appeals the JMOL in favor of Unocal on his
ADEA claims. Unocal appeals the judgments in favor of plaintiffs
Donald Ray Tyler (Tyler), Powers, Earles, Hough, and David Burkett
(Burkett) on their ADEA claims. Plaintiffs Tyler, Powers, Earles,
Hough, and Burkett cross-appeal the damage award and the judgment
against Earles and Hough on their FLSA claims. Unocal filed a
separate appeal contesting the award of attorneys’ fees and costs.
Plaintiffs cross-appealed the amount of the fees and costs award.
The fees and costs appeal has been consolidated with the appeals on
the merits.
We affirm in part. We vacate and remand as to the amount of
liquidated damages.
Facts and Proceedings Below
For clarity, this section is divided into sub-sections, some
presenting facts generally relevant to the entire case, others
specific to particular plaintiffs or issues. Also for clarity,
the following designations are used hereinafter: The Appellees
3
will refer collectively to all the plaintiffs except Price (who
was the only plaintiff to lose on all his claims at trial). The
Plaintiffs will refer collectively to all the plaintiffs,
including Price.
1. General Background Facts
In late 1996, Unocal, an oil company, began a reorganization
of its domestic operations in the lower forty-eight states. The
reorganization resulted in a new business unit, Spirit Energy 76
(Spirit). The reorganization involved a reduction in force (RIF)
plan. Under the RIF, employees who did not get positions in
Spirit were eligible to be placed in a “redeployment pool” (the
pool), from which Unocal could choose employees for available
jobs. Employees who were laid off and placed in the pool
received, in addition to other benefits, salary for up to four
months, depending on length of service. The Plaintiffs were
eligible to receive redeployment benefits and remain on Unocal’s
payroll until April 30, 1997. Employees could also opt to
participate in Unocal’s Termination Allowance Plan (TAP), which
provided termination pay for employees displaced by the RIF in
exchange for signing a release that purported to waive
permanently all potential claims against Unocal relating to the
adverse employment decision.
At the time of the RIF, the Plaintiffs were Unocal employees
in the Permian Basin region in West Texas. Their positions, ages
4
at the time of the RIF, and their years of service at Unocal were
as follows: Price: Production Foreman over the Moss Unit, age
fifty-five, thirty-three years; Hough: Health, Environment &
Safety (HES) Coordinator in Andrews, age fifty-five, twenty-four
years; Earles: Production Technician in Andrews, age fifty-three,
twenty-two years; Burkett: Senior General Clerk in Midland, age
fifty-five, thirty-seven years; Powers: Production Clerk in
Andrews, age fifty-five, thirty-four years; Tyler: Field
Superintendent, age fifty-five, twenty-seven years.
The Appellees all ended their job assignments with Unocal on
December 31, 1996. Price ended his assignment on January 15,
1997. Tyler and Hough were officially terminated on January 31,
1997. Burkett, Earles, Powers, and Price remained on the payroll
until April 30, 1997. Each plaintiff participated in the TAP
and, after signing the required releases, received termination
pay.
Jack Schanck, age forty-five, was made president of Spirit.
As part of their attempt to show discriminatory animus, the
Plaintiffs produced, inter alia, a memorandum from Schanck, dated
March 14, 1996, which contained the following:
“Keep in mind that although you may consider that less
experienced employees may not currently have as much of
an impact on the company as those at higher T C P
levels, their performance may actually be superior, and
they may have greater technical potential.”
This memorandum was issued to managers and directed the forced
5
ranking of employees prior to the RIF. The Plaintiffs also
pointed to excerpts from a letter written by Schanck to all
employees in August 1996 which stated that Spirit Energy would be
a “lean, quick-reacting organization” that would “not be
constrained by an old Unocal way.”
The Plaintiffs produced a Unocal policy manual that advised
employees conducting a reorganization to ensure that plans
“minimize the risk that personnel decisions can be viewed as
being illegal employment discrimination” and that stressed the
need to document non-discriminatory reasons for personnel
decisions. In connection with the 1996 reorganization, Larry
Love, a Senior Resources Consultant at Unocal, prepared an
adverse impact study of the proposed RIF (the Love analysis).
The Love analysis showed that there was a possibility the RIF
would have an adverse impact correlated with age. Love submitted
his analysis to Vice President of Human Resources Peter Vincent.
2. Equitable Estoppel Issue Facts
Texas is a “deferral” state (i.e., a state with a state law
prohibiting age discrimination in employment and a state
authority to grant or seek relief from such discriminatory
practice, 29 U.S.C. §§ 626(d) and 633(b)). Conaway v. Control
Data Corp., 955 F.2d 358, 363 & n.3 (5th Cir. 1992). Under the
ADEA, in a deferral state the limitations period for filing an
age discrimination charge with the EEOC is effectively 300 days.
6
29 U.S.C. § 626(d). Thus, a Texas employee’s ADEA claims are
normally time-barred if the employee fails to file an age
discrimination charge with the EEOC within 300 days from the date
of the unlawful employment practice. Plaintiffs Tyler, Powers,
Price, Earles, and Hough filed their EEOC claims on March 9,
1998; Burkett filed his on March 13, 1998. The EEOC issued the
Plaintiffs notices of right to sue on March 19, 1998, and the
Plaintiffs filed their complaint on the same day. The Plaintiffs
do not dispute that their EEOC claims were filed outside the
applicable 300 day window. The district court held that
equitable estoppel barred Unocal from asserting a limitations
defense. The district court had previously denied earlier (pre-
verdict) motions by Unocal to dismiss the Plaintiffs’ claims as
time-barred.
The Plaintiffs testified that they believed they had signed
away all potential claims and rights under the ADEA when they
signed their release forms. Each of the Plaintiffs had signed a
release form purporting to discharge Unocal from “all claims,
liabilities, demands and causes of action” related directly or
indirectly to the termination of employment. Hough signed an
older version of the form that did not contain a specific
reference to the ADEA. The other plaintiffs signed a newer
version, drafted in 1996, that added a specific reference to the
ADEA (the 1996 Release). In 1990, the Older Workers Benefits
7
Protection Act (OWBPA), 29 U.S.C. § 626(f), amended the ADEA.
Under the OWBPA, for a release of ADEA claims to be effective,
the release must meet certain requirements, including making
specific mandatory disclosures. Blakeney v. Lomas Info. Sys., 65
F.3d 482, 484 (5th Cir. 1995). Richard Ettensohn, an in-house
attorney for Unocal and an employment law specialist, testified
that he had drafted the release language and that it did not
comply with the OWBPA. He admitted that the releases were not
effective to release the Plaintiffs’ ADEA claims. Unocal does
not dispute that the releases were not effective as to ADEA
claims.
Plaintiff Tyler testified that, in August or September 1997,
he happened to discuss the release forms when he visited with an
attorney on an unrelated matter. The attorney suggested that
Plaintiffs consult with an employment attorney to determine
whether the releases were valid. Plaintiffs met with an attorney
to discuss the matter in early 1998 and discovered that the
releases were not effective to release ADEA claims. In March
1998, on the attorney’s advice, they filed their EEOC charges.
The issue whether Unocal’s conduct induced the Plaintiffs to
refrain from filing their claims within the 300 day window was
submitted to the jury, which found in the affirmative. The
district court found that the testimony given at trial was
sufficient to support the jury’s finding. According to the
8
district court’s opinion in ruling on Unocal’s JMOL motion, the
language of the releases would have misled most laymen to believe
that they had released their ADEA claims and Unocal should have
“unmistakably understood” that Plaintiffs would have been so
misled. Thus, the district court held that Unocal was equitably
estopped from asserting the limitations defense. Unocal appeals
this ruling and argues that the ADEA claims of all Plaintiffs
were time barred.
3. The Plaintiffs’ Statistical Evidence
At trial, the Plaintiffs offered expert statistical evidence
from Dr. Blake Frank. Dr. Frank’s expert testimony was presented
to support an inference of motive for disparate treatment.
Dr. Frank is an industrial/organizational psychologist. He
testified that his analysis showed that Unocal employees over age
fifty were less likely to be promoted and more likely to be
placed in the pool. Dr. Frank also testified that his analysis
showed that the relationship between superior performance
evaluations and retention was statistically insignificant.
Unocal challenged the admissibility of Dr. Frank’s testimony
in a Daubert v. Merrell Dow Pharmaceuticals, 113 S. Ct. 2786
(1993), motion and in a motion in limine. At the close of the
Plaintiffs’ case and again after presentation of all the
evidence, Unocal made Rule 50 motions for JMOL. After the
verdict was returned, Unocal filed its post-verdict JMOL motion.
9
The district court considered Unocal’s objections and overruled
them. On appeal, Unocal challenges the court’s finding that this
statistical evidence was admissible.
4. Price
Price appeals the district court’s holding, in its JMOL,
that he did not prove that he suffered an adverse employment
action. Prior to the December 1996 RIF, Price was employed as a
production foreman at Unocal’s South Cowden location known as the
Moss Unit. Don Umsted, age 39, served as production foreman at
the North Cowden location. During the RIF, Unocal consolidated
these two locations into a single unit with a single production
foreman. In mid-December 1996, field superintendent Diane Van
Deventer, Price’s supervisor, informed Price that Umsted had been
chosen to be production foreman over the new combined unit. She
further informed Price that he had been reassigned to work as an
HES coordinator, with the same salary and benefits. Price had no
previous formal experience in HES and asserts that he would have
lost seniority and supervisory responsibility.1 Price expressed
his dissatisfaction with the reassignment, but agreed to take the
HES position. Price testified that he was discouraged by the
amount of training he needed for the new position. After working
for a few days, he resigned and asked for the redeployment
1
In his brief, Price also asserts that he would have lost salary
in the new position. But Price testified that he was told his salary
would remain the same.
10
package. On his unemployment compensation form, Price noted that
he “quit – I volunteered for a package and was accepted.” Price
testified that he viewed the reassignment as a deliberate attempt
to humiliate him into quitting.
Price produced evidence that, as production foreman, he had
received positive evaluations from his supervisors, including Van
Deventer. The decision to name Umsted as the production foreman
for the new combined unit was made by D.J. Ponville, Unocal’s new
Onshore Operations Manager, with input from Van Deventer. In
November 1996, Ponville had chaired a meeting with field
superintendents Van Deventer, Craig Van Horn, and Greg
Leyendecker to discuss filling positions, including production
foreman positions. Ponville and other Unocal decision-makers
testified that they made personnel decisions on factors other
than age. There was testimony that Van Deventer had made age-
related remarks to Price and others on several occasions.2
Evidence at trial, including Van Deventer’s own testimony,
indicated that Van Deventer was heavily involved in personnel
2
Plaintiff Earles testified that Van Deventer told him, in the
mid 1990s, that “she didn’t think that anyone would be able to
retire with Unocal at that point in time” and that he understood
this to mean that Unocal would push senior employees into early
retirement. Earles also testified that Van Deventer often referred
to Price as “the old man” or a “senior citizen” and that she had
referred to “the geriatric group”. Price also testified that she
had referred to him as “the old man.” Powers testified that, when
he asked Van Deventer whether she would be the office boss after
the reorganization, she replied “You old son-of-a-bitch, your ass
will be gone before that ever happens.”
11
decisions.
With regard to Price, the district court found that it did
not need to consider Price’s evidence of discriminatory intent
because Price had not suffered an adverse employment action. He
was not discharged. He was transferred to a different position
with the same salary and benefits and then voluntarily decided to
resign rather than learn new skills. The district court found
that Price’s reassignment was the sort of business decision,
typical in a reorganization, that the courts will not second
guess.
5. Hough
In the district court, Unocal asserted that plaintiff Hough
did not suffer an adverse employment action and that he
voluntarily elected to leave Unocal. Unocal argued that Hough
was offered a job and declined it. Hough argued that any offer
made to him was so vague and uncertain that it did not qualify as
a real job offer.
Hough was the Health, Environment, & Safety (HES)
coordinator in South Andrews. Hough testified that, on the
morning of December 11, 1996, field superintendent Van Horn came
to his office “to tell me that I would have a job with Unocal but
it would no longer be in HES.” Van Horn told Hough that he was
uncertain as to what the job would be, how much it would pay, or
where it would be located. Van Horn said it was likely that it
12
would be some type of technician job in Midland and pay less than
Hough was earning as an HES coordinator. Van Horn requested a
decision by noon that day, but extended the deadline to two
o’clock p.m. That morning, Hough conferred with Steve Gregory,
the head of HES at Unocal, about the availability of other HES
positions. Gregory informed him that none were available at that
time, but he would be notified if one became available. Hough
testified that he ultimately declined Van Horn’s offer because of
the uncertainty regarding what the job, salary, and location
would be. Hough was also concerned about losing a significant
percentage of his retirement if he accepted the new position.
Hough took the redeployment package instead. Hough further
testified that he felt he should have been offered the HES
position that opened when Price left and that his former duties
were assigned to a person he considered less qualified than
himself.
The district court found that there was sufficient evidence
to permit the jury to find that Van Horn did not actually make a
firm employment offer to Hough.
6. Earles
Unocal asserted that plaintiff Earles also declined an offer
of employment and thus did not suffer an adverse employment
action.
Earles was a production technician. On November 19, 1996,
13
Van Deventer notified Earles, by letter, that he was being placed
in the redeployment pool. The letter stated that he might still
be offered a position, but that his continued employment was
doubtful. It said that Earles would be notified of a final
decision by December 20, 1996.
Earles testified that, at that time, he asked Van Deventer
if she knew of any available positions and she said that she did
not. Earles spoke to Gary Dupriest, the South Permian Asset
Manager, and told Dupriest that he had an offer from another
company. Earles asked Dupriest to level with him about his
chances of being offered another position at Unocal and Dupriest
advised him to try to find something outside of Unocal.
Later, Van Horn contacted Earles by telephone. Earles and
Van Horn offered conflicting testimony about the conversation.
Earles testified that Van Horn told him “That he didn’t really
have anything to offer me, but if there was a job, and he wasn’t
sure what it was going to be . . . it might be HES.” According
to Earles, Van Horn further said that any possible job would
“almost certainly involve some salary compression” and Van Horn
asked Earles if he would have any interest. Van Horn demanded an
answer before he hung up the telephone. Van Horn testified that
he did not want to make Earles ineligible for retirement benefits
by making him a formal offer of employment before knowing whether
Earles was interested in the new position, so he contacted Earles
14
to gauge his interest. Van Horn testified that he told Earles
that an HES position was being vacated by Hough in Andrews and
Van Horn asked Earles if he would be interested in the position
if it were offered to him. Van Horn testified that Earles asked
only what the job entailed and where he would be located, and did
not inquire into the salary. According to Van Horn, Earles told
him that he had a foreman position with another oil company and
that he was not interested in the Unocal HES job. Van Horn
reported to Ponville that he did not extend a formal employment
offer to Earles because Earles was not interested in the possible
offer.
The district court determined that, since several witnesses
testified almost no one was hired out of the redeployment pool,
sufficient evidence was presented to allow the jury to conclude
that placement in the pool constituted a discharge. Unocal does
not challenge that determination. The court concluded that the
jury could find that the phone call from Van Horn did not
constitute a true offer of employment and that Earles, for all
practical purposes, was terminated by being placed in the pool
against his will.
7. Burkett
Unocal asserts that Burkett was terminated because of a good
faith mistake, not because of age discrimination.
Burkett was a senior general clerk in Midland with thirty-
15
seven years of experience at Unocal. In December 1996, Burkett
was given the redeployment package. Unocal does not dispute that
Burkett suffered an adverse employment action, but argues that
Ponville had a mistaken belief that Burkett wanted the package
rather than reassignment. Burkett contends that he made it clear
to Ponville and other decision-makers that he wanted any job in
the new Unocal organization.
Burkett testified that, in November 1996, Ponville held a
meeting of the clerical staff and told them that the RIF would
reduce the number of clerical jobs in the organization.
According to Burkett, Burkett then approached Van Deventer and
told her that he would take any clerical position that was
available. On December 11, Ponville gave Burkett a redeployment
package. Burkett testified that he met with Dupriest after he
received the package and told him that he needed a job and would
take any position available. Ponville, Dupriest, and Van
Deventer all testified that they thought Burkett wanted the
package rather than reassignment.
Before December 11, Unocal had offered a clerical position
to Tammy Kennedy, who turned it down. According to Burkett,
Unocal never offered this position to Burkett or to co-plaintiff
Powers. Burkett presented evidence that Unocal had retained four
younger employees with less experience in the Permian Basin area
– Tamara Powers (age 37), Amanda Armstrong (24), and Tina Carter
16
(31). The district court determined that this evidence was not
probative of age discrimination because, although these employees
were clearly younger and less experienced, there was insufficient
evidence that they were actually less qualified that Burkett.
Nevertheless, the court held that Burkett had presented
sufficient evidence that Unocal’s mistake defense was a mere
pretext for discrimination.
8. Damages
The district court reduced the back pay damages awarded by
the jury. The jury had not reduced the gross back pay amount
awarded by the amount of the interim wages that the Appellees had
earned since their employment with Unocal ended. The Appellees
conceded that this adjustment was appropriate and required by
law. The district court denied Unocal’s request to offset the
damage awards by the amount of the termination allowances that
the Appellees received in exchange for signing the releases.
Unocal does not challenge that holding on appeal.
The district court entered final judgment on September 19,
2000. The court extended the back pay period from the date the
verdict was returned – December 21, 1999 – to May 25, 2000. As
of May 25, Unocal and Spirit ceased to exist in the Permian
Basin. Unocal’s Permian Basin assets were sold as part of a
transaction that resulted in the creation of a new company, Pure
Energy Resources, Inc. (Pure). Unocal terminated all of its
17
employees in the region on or before May 25, 2000. According to
Unocal, approximately thirty percent of those terminated were not
hired into Pure. Unocal admitted that it was possible that some
or all of the Plaintiffs would have been hired by Pure if they
had still been employed by Unocal. The Appellees note that
Unocal owns sixty-five percent of Pure and controls its board of
directors. The district court held a hearing and heard evidence
regarding the cessation of Unocal’s operations and the creation
of Pure. The district court held that, because the Appellees
would have been terminated by Unocal by May 25, that date was the
appropriate cut-off date for the extension of back pay awards.
The Appellees challenge this holding on appeal.
The district court denied the Appellees’ request for front
pay awards. Reinstatement was not a feasible remedy since some
of the Appellees’ positions were eliminated during the RIF and
the rest were eliminated when Unocal ceased operations in the
Permian Basin on May 25, 2000. Thus, the district court found,
any front pay award would be purely speculative and require the
court to guess whether each plaintiff would have been hired by
Pure. The Appellees appeal the denial of front pay.
The district court awarded each of the Appellees $2,500 in
liquidated damages. To receive liquidated damages under the
ADEA, a plaintiff must prove that the violation was willful. 29
U.S.C. § 626(b). The district court found that there was
18
sufficient evidence to support the jury finding that Unocal’s
violations were willful. Specifically, the court found that the
evidence that Unocal ignored the in-house adverse impact study
conducted by Love, the evidence of age-based remarks by Van
Deventer, and the secrecy surrounding Unocal’s decision-making
process were sufficient to permit the jury to infer willfulness.
The district court found that, though this evidence of
willfulness was sufficient, it was still sparse. Thus the court
limited the liquidated damages amount to $2,500 per Appellee. On
appeal, Unocal argues that there was insufficient evidence of
willfulness and thus there should have been no liquidated damages
award. The Appellees argue that, once the district court had
found the evidence sufficient to support a willfulness finding,
liquidated damages were mandatory in an amount equal to the back
pay award.
9. FLSA Claims
Plaintiffs Price, Hough, Earles, and Powers asserted FLSA
claims for unpaid overtime compensation. The district court
severed these claims from the ADEA claims and held a bench trial
on the FLSA claims. The court found that production foreman
Price, HES coordinator Hough, and production technician Earles
all fell within the administrative exemption to the FLSA. Under
the administrative exemption, employees in “bona fide executive,
administrative, or professional” positions are not statutorily
19
entitled to overtime pay. 29 U.S.C. § 213(a)(1). The district
court found that plaintiff Powers, who worked as a production
clerk, was non-exempt and thus entitled to an award of $7,700.32
for unpaid overtime. Unocal does not challenge the award to
Powers, and Price does not challenge the determination that he
was an exempt employee. However, Hough and Earles each challenge
the ruling that they were exempt employees.
10. Attorneys’ Fees and Expenses
In their motion for fees and expenses, the Plaintiffs
requested $946,366.12 in attorneys’ fees. They arrived at this
figure as follows: $559,574.75 for 3,257.95 attorney hours billed
at rates varying from $100 to $225 per hour plus $71,336.00 for
1,115.20 hours of legal assistant work billed at rates from $30
to $80 per hour yielded a sum of $630,910.75. The Plaintiffs
urged that this sum be enhanced by fifty percent, pursuant to the
twelve factors listed in Johnson v. Georgia Hwy. Express, Inc.,
488 F.2d 714, 717-19 (5th Cir. 1974), for a total lodestar amount
of $946,366.12. Unocal argued that the Johnson enhancement was
improper and that fifteen percent of the Plaintiffs’ billing
could be attributed to the unsuccessful claims.
The district court found that the twelve Johnson factors did
not warrant enhancement of the lodestar figure. The court agreed
with Unocal that a fifteen percent reduction was proper due to
the limited nature of the Plaintiffs’ success. The court
20
accepted the Plaintiffs’ contention that the $630,910.75 figure
already included about a ten percent reduction from the hours
actually billed. Reducing it by a further five percent, the
court set the lodestar fee figure at $590,000.
The court agreed with Unocal that the Plaintiffs could not
recover $75,424.81 attributable to expert witness fees. Thus the
court awarded the Plaintiffs $45,841.94 in trial costs, rather
than the $121,266.75 the Plaintiffs had requested. The court
also awarded the Plaintiffs their requested fees and costs for
preparation of the motion and for anticipated appeal. The total
fees and costs award was $694,141.94.
On appeal, Unocal argues that its successful appeal on the
merits would render the Plaintiffs ineligible to recover any fees
and, in the alternative, that the total fees and costs award set
by the district court was appropriate. The Plaintiffs ask this
court to grant a delay enhancement and appeal the district
court’s holding that expert witness fees are not recoverable.
Discussion
I. Standards of Review
Armendariz v. Pinkerton Tobacco Co., 58 F.3d 144 (5th Cir.
1995), describes the general standard of review for a JMOL when
the defendant moved for JMOL both before and after the verdict:
“[J]udgment as a matter of law is appropriate if the facts
and inferences point so strongly and overwhelmingly in favor
of one party that a reasonable jury could not have concluded
that the ADEA was violated. A mere scintilla of evidence is
21
insufficient to present a question for the jury. There must
be a conflict in substantial evidence to create a jury
question. . . . [T]he district court's judgment should be
reversed only if the facts and accompanying inferences would
not permit reasonable people to conclude that” the ADEA was
violated. Id. at 148 - 49 (internal citations omitted).
See also Boeing Co. v. Shipman, 411 F.2d 365, 374 - 75 (5th Cir.
1969) (en banc); Fed. R. Civ. P. 50(a).
“The district court's determination of attorney's fees is
reviewed for abuse of discretion, and the findings of fact
supporting the award are reviewed for clear error.” Shipes v.
Trinity Industries, 987 F.2d 311, 319 (5th Cir. 1993).
Specific considerations related to the standard of review
for particular questions arising in this appeal are noted below
as appropriate.
II. Equitable Estoppel
Unocal challenges the district court’s holding that
equitable estoppel saved the Plaintiffs’ ADEA claims from being
time-barred. We affirm the district court on this issue.
There is no dispute that the Plaintiffs failed to file their
discrimination charges with the EEOC within 300 days from the
date of the allegedly unlawful employment practice and that their
ADEA claims would be time-barred unless equitable estoppel or
equitable tolling operated to save them.3
3
Because Texas is a “deferral” state, see Conaway, 955 F.2d at
363 & n.3, under the ADEA, the limitations period for filing an age
discrimination charge with the EEOC is 300 days, 29 U.S.C. §
626(d).
22
“The EEOC filing requirement functions as a statute of
limitations rather than a jurisdictional prerequisite. . . . The
filing deadline is thus subject to equitable modification, i.e.
tolling or estoppel, when necessary to effect the remedial
purpose of ADEA.” Rhodes v. Guiberson Oil Tools, 927 F.2d 876,
878 (5th Cir. 1991) (Rhodes I) (internal citations omitted).
The doctrine of equitable estoppel “may properly be invoked when
the employee's untimeliness in filing his charge results from
either the employer's deliberate design to delay the filing or
actions that the employer should unmistakably have understood
would result in the employee's delay.” Clark v. Restistoflex
Co., 854 F.2d 762, 769 (5th Cir. 1988) (internal quotation marks
omitted) (emphasis added).
The equitable estoppel inquiry involves questions of fact
and law. Questions such as whether the employer misled the
employee are questions of fact and determinations by the trier of
fact are reviewed for clear error. See Rhodes I, 927 F.2d at
880; Clark, 854 F.2d at 769. The applicability of equitable
estoppel to the facts is a question of law that this court
reviews de novo. Rhodes I, 927 F.2d at 881. Equitable estoppel
“does not hinge on intentional misconduct on the defendant's
part. Rather, the issue is whether the defendant's conduct,
innocent or not, reasonably induced the plaintiff not to file
suit within the limitations period.” McGregor v. Louisiana State
23
Univ. Bd. of Supervisors, 3 F.3d 850, 865 - 66 (5th Cir. 1993).
The district court correctly concluded that the evidence was
sufficient to support the jury’s finding that Unocal’s conduct
induced Plaintiffs from timely filing their claims.4 Ettensohn,
an in-house attorney for Unocal and an employment law specialist,
testified that he prepared the language used in the 1996 Release.
He also testified to his belief that the releases signed by the
Plaintiffs specifically referenced age discrimination claims.
Ettersohn admitted that the releases were not actually effective
to release the ADEA claims because they did not fully comply with
the OWBPA’s requirements. But the release language could easily
suggest to a layman that all ADEA claims had been effectively
waived. They state affirmatively that Unocal is discharged from
“all claims, liabilities, demands and causes of action.” With
the exception of the release signed by Hough, all the release
forms specifically referenced the ADEA as one type of claim being
released. (The release signed by Hough expressly purported to
release all claims, which would include ADEA claims.) The
Plaintiffs testified that they did in fact believe that they had
signed away all potential claims and rights under the ADEA.
Plaintiff Tyler testified that he only began to think otherwise
4
The jury instruction on this issue were as follows: “For each
of the following plaintiffs, do you find that the defendant’s
conduct induced him to refrain from filing his claim with the EEOC
within 300 days of the alleged unlawful practices?” The jury
answered “yes” with regard to each plaintiff.
24
when he happened to mention the releases to an attorney in August
or September 1997. As the district court found, the evidence
supported a finding that Unocal should have “unmistakably have
understood,” that the releases would mislead the Plaintiffs in
this way.5
III. Admission of the Plaintiffs’ Statistical Evidence
We apply an abuse of discretion standard when reviewing a
trial court’s decision to admit or exclude expert testimony.
Kumho Tire Co. Ltd. v. Carmichael, 119 S. Ct. 1167, 1176 (1999).
The district court’s ruling will be sustained unless manifestly
erroneous. Boyd v. State Farm Ins. Cos., 158 F.3d 326, 331 (5th
Cir. 1998).
Unocal attacks the statistical evidence presented by Dr.
Frank on five specific grounds: (1) the statistical groupings;
(2) assumptions that terminations were involuntary; (3)
unreliable data; (4) failure to control for factors other than
age; (5) use of age as a continuous variable; and (6) Unocal’s
own statistical analysis does not indicate discrimination.6
5
The jury charge did not ask for a specific finding as to what
Unocal “unmistakably understood.” But Unocal did not object to the
form of the jury question on equitable estoppel. The district
court was entitled to make the finding on this issue in light of
the jury’s finding that each plaintiff was induced from timely
filing his claim. See Fed. R. Civ. P. 49(a).
6
Unocal’s objections to the statistical evidence were adequately
preserved. Among other things, the district court granted a running
objection to Dr. Frank’s testimony.
25
Under the abuse of discretion standard, the district court
did not commit manifest error in admitting Dr. Frank’s testimony.
As the district court noted, many of Unocal’s arguments go to the
weight of Dr. Frank’s testimony rather than to its admissibility.
Some of Unocal’s arguments are simply without merit.
Unocal’s argument that Dr. Frank’s testimony should be
excluded because his statistical groupings compared employees
over fifty with those under fifty, rather than comparing those
over forty with those under forty, is without merit. Although
the ADEA protects employees over the age of forty, this court and
the Supreme Court have recognized that the relevant age groupings
for a particular ADEA case will vary by the circumstances of the
case. See O’Connor v. Consolidated Coin Caterers Corp., 116
S. Ct. 1307, 1310 (1996) (fact that one person in the ADEA
protected class has lost out to another person in the protected
class is not determinative as long as the person lost out because
of his age); Fields v. J.C. Penney Co., Inc., 968 F.2d 533, 536 &
n.2 (5th Cir. 1992) (per curiam) (ADEA plaintiff may prove prima
facie case by showing he was replaced by someone younger, even if
replacement was within the protected class); Bienkowski v.
American Airlines, Inc., 851 F.2d 1503, 1506 (5th Cir. 1988)
(same). In the instant case, each of the Plaintiffs was over age
fifty at his termination and each plaintiff who was replaced was
replaced with an employee under age fifty.
26
Unocal’s argument that Dr. Frank improperly counted as
“terminated” all employees who received the redeployment package
is without merit. There was sufficient evidence that almost no
one who was placed in the redeployment pool was rehired and that
placement in the pool was effectively equivalent to termination.
Under the evidence here, Unocal’s objection that Dr. Frank
created his own database, which was unreliable, goes to probative
weight rather than to admissibility. Dr. Frank compiled his
database from documents provided by Unocal during discovery.
Unocal did not show that Dr. Frank’s compilation of the data
provided him was itself unreliable. Cf. Munoz v. Orr, 200 F.3d
291, 301 (5th Cir. 2000) (“Both the determination of reliability
itself and the factors taken into account are left to the
discretion of the district court consistent with its gatekeeping
function under Fed. R. Evid. 702.”). Unocal instead attempts to
show that the underlying data – provided by Unocal -- was itself
unreliable. This is an issue that Unocal could – and did – raise
in cross-examination.
Unocal asserts that Dr. Frank failed to control for factors
other than age. But Dr. Frank did control for other relevant
variables. Dr. Frank ran tests showing that the correlation
between employee performance evaluations and retention was
statistically insignificant. Dr. Frank also controlled for
geographical location by confining his analysis to the Permian
27
Basin Asset Group. Omission of variables may render an analysis
less probative than it might otherwise be, but, absent some other
infirmity, an analysis that accounts for the major factors will
be admissible. Bazemore v. Friday, 106 S. Ct. 3000, 3009 (1986)
(Brennan, J., joined by all other members of the Court,
concurring in part).
Unocal criticizes Dr. Frank’s use of age as a continuous
variable. The tests run using age as a continuous variable were
far from the only tests Dr. Frank performed on the data. Cf.
Koger v. Reno, 98 F.3d 631, 636 - 37 (D.C. Cir. 1996) (regression
analysis that was the sole evidence presented in support of age
discrimination and which used age as a continuous variable was
not legally relevant). Even if flawed, these tests do not render
Dr. Frank’s entire analysis irrelevant. Further, Dr. Frank
verified that the ages of Unocal’s employees were normally
distributed.
Finally, Unocal asserts that its own statistical analysis,
performed by Dr. Baxter, does not support an inference of
discrimination. The district court, acting within its
discretion, found that Dr. Baxter’s opinion was not conclusive
enough to discredit entirely Dr. Frank’s methodologies. Cf.
Daubert v. Merrell Dow Pharms., 113 S. Ct. 2786, 2795 (1993) (it
is the trial judge’s function to ensure that expert testimony is
reliable). Given that finding, Dr. Baxter’s conflicting opinion
28
goes to the weight of Dr. Frank’s testimony, not its
admissibility.
The district court did not abuse its discretion by admitting
Dr. Frank’s statistical evidence.
IV. Price’s ADEA Claim
We agree with the district court that Price did not produce
sufficient evidence of an adverse employment action to support
the jury’s award of damages on his ADEA claim.
The district court held that Price “did not establish a
prima facie case.” Price relies on several cases, e.g., U.S.
Postal Service Bd. of Govs. v. Aikens, 103 S. Ct. 1478 (1983);
Russell v. McKinney Hospital Venture, 235 F.3d 219 (5th Cir.
2001), to argue that the prima facie case is no longer relevant
after a case has gone to the jury. These cases on which Price
relies are distinguishable because they involved elements of the
prima facie case that went to proving discrimination, not injury.
Aikens, 103 S. Ct. at 1481 (ultimate question was discrimination
vel non); Russell, 235 F.3d at 224 (issue was plaintiff’s proof
of discrimination). The McDonnell Douglas evidentiary framework
is primarily concerned with the plaintiff’s initial burden when
attempting to prove discrimination by circumstantial evidence.
Reeves v. Sanderson Plumbing Prods., Inc., 120 S. Ct. 2097, 2105
(2000). A plaintiff who proves discrimination must still prove
injury to recover damages. Armstrong v. Turner Indus., 141 F.3d
29
554, 560 (5th Cir. 1998) (to recover, a discrimination plaintiff
will have to prove a cognizable injury, usually an adverse
employment decision).
It is clear from the district court’s discussion that the
district court found that the employment actions Price
established – his transfer and subsequent resignation – did not
amount to adverse employment action. Adverse employment action
is part of the prima facie showing in an ADEA case because that
is normally an element that the plaintiff will have to prove in
order to receive a remedy under the ADEA. See 29 U.S.C. §
623(a)(1) (under ADEA, it is unlawful for employer “to fail or
refuse to hire or to discharge any individual or otherwise
discriminate against any individual” because of age); Armstrong,
141 F.3d at 560. The money damages awarded to Price by the jury
verdict were compensatory damages for the loss of his job with
Unocal. To support this verdict, Price had to prove that his
termination was a cognizable injury caused by the age
discrimination. See Armstrong, 141 F.3d at 562 (when plaintiff
did not identify any cognizable and compensable injury caused by
the allegedly discriminatory act, he could not recover).
When, as here, a plaintiff resigned, he may satisfy the
injury element by proving constructive discharge. See Faruki v.
Parsons S.I.P., Inc., 123 F.3d 315, 319 (5th Cir. 1997). Because
Price was transferred to another position and then resigned, a
30
constructive discharge analysis is appropriate for determining
whether Price suffered an adverse employment action. Price did
not request a constructive discharge jury instruction and Price
did not produce evidence sufficient to support an implied finding
of constructive discharge.
“To prove constructive discharge, a plaintiff must establish
that working conditions were so intolerable that a reasonable
employee would feel compelled to resign.” Id.
“Stated more simply, [the plaintiff’s] resignation must
have been reasonable under all the circumstances.
Whether a reasonable employee would feel compelled to
resign depends on the facts of each case, but we
consider the following factors relevant, singly or in
combination: (1) demotion; (2) reduction in salary; (3)
reduction in job responsibilities; (4) reassignment to
menial or degrading work; (5) reassignment to work
under a younger supervisor; (6) badgering, harassment,
or humiliation by the employer calculated to encourage
the employee's resignation; or (7) offers of early
retirement on terms that would make the employee worse
off whether the offer was accepted or not.” Barrows v.
New Orleans S.S. Ass’n., 10 F.3d 292, 297 (5th Cir.
1994).
Price did not produce evidence that his transfer from
production foreman to HES coordinator created conditions so
intolerable that a reasonable employee would feel compelled to
resign. Price testified that the HES job was to be at the same
salary.7 Although Price asserts that the HES job was a demotion,
7
On appeal, Price asserts that he would have lost salary.
However, Price testified that he understood “[t]he salary was to be
the same.” He went on to state, “I also felt like that I probably
wouldn’t get any more raises.” Price offered no testimonial or
other evidence to prove that his salary was lower or that his
31
there was no evidence presented sufficient for a jury to reach
this conclusion. Cf. Sharp v. City of Houston, 164 F.3d 923, 933
(5th Cir. 1999) (transfer may be a demotion if the new position
proves objectively worse). The HES job was not menial or
degrading. Hough, Price’s co-plaintiff and a former HES
coordinator, provided testimony suggesting that the
responsibilities of an HES coordinator, though different in kind
from those of a production foreman, were at least comparable in
degree. Hough testified that he worked as a production foreman
from 1979 to 1990. He then moved over to work in HES. Hough
testified, “[B]eing an HES is quite different than being a
production foreman. Grant you, a production foreman has to know
a lot of things as far as regulations of environmental laws and
safety regulations, but being responsible for all the individuals
in the area where you work, it’s a whole lot different.” There
is no evidence that Price’s new position was objectively worse
than his old one.
Although Price testified that Van Deventer made age-based
comments to him at various times, there was no evidence of
anything approaching “badgering” during the HES job. Price was
not specific regarding the dates of Van Deventer’s comments, so
it cannot be simply assumed that they occurred during the HES
concern about a lack of future raises was anything but speculative.
32
job, which Price only held for a few days. The only evidence
Price presented that the HES job was intolerable was his
testimony as to his subjective belief that he was set up to fail
in this job which would require him to get new training. That
does not meet the objective “reasonable employee” standard
articulated in Barrows. See Guthrie v. J.C. Penney Co., Inc.,
803 F.2d 202, 207 (5th Cir. 1986).
We affirm the district court’s holding that the evidence did
not support an award of damages to Price.
V. The Appellees’ ADEA Claims
With regard to plaintiffs Hough, Earles, and Burkett,
Unocal’s argument asserts particularized non-discriminatory
reasons for their terminations: Unocal asserts that Hough and
Earles were offered new jobs and voluntarily chose to take the
severance package instead and that Burkett was placed in the
redeployment pool because of a good faith mistake. Unocal argues
that there was insufficient evidence to prove that these three
plaintiffs were discriminated against based on age. Unocal’s
arguments regarding Hough and Earles also raise issues as to
whether they actually suffered adverse employment actions.
A. Sufficiency of Discrimination Evidence
When the defendant employer comes forward with evidence of a
legitimate, non-discriminatory reason for an adverse employment
action, the presumption of discrimination raised by the
33
plaintiff’s prima facie case drops out and the plaintiff may
attempt to prove discrimination by offering evidence that the
employer’s stated reason is pretextual. Reeves, 120 S. Ct. at
2106. The burden of persuasion at all times remains on the
plaintiff. Id. In a disparate treatment case, such as the case
at bar, a plaintiff must produce sufficient evidence to rebut a
showing by the employer that there was a legitimate, non-
discriminatory reason for discharging a particular employee. See
Bauer v. Albemarle Corp., 169 F.3d 962, 968 (5th Cir. 1999). In
the instant case, Hough, Earles and Burkett produced sufficient
evidence for a reasonable jury to conclude that Unocal’s asserted
reasons were pretextual and that the real reason was intentional,
age-based discrimination. See Reeves, 120 S. Ct. at 2109 (“[A]
plaintiff's prima facie case, combined with sufficient evidence
to find that the employer's asserted justification is false, may
permit the trier of fact to conclude that the employer unlawfully
discriminated.”).
In November 1996, Ponville, Unocal’s new Onshore Operations
Manager, chaired a several-hour long meeting with field
superintendents Van Deventer, Van Horn, and Leyendecker at which
decisions affecting the Plaintiffs were made. All four of the
meeting participants were in their thirties. Although Ponville
testified that he did not really know any of the Plaintiffs
34
except Tyler,8 he asserted generally that employment decisions
about who would fill the positions in the reorganized business
unit were based on employee performance.
Van Horn testified that he did not recall any discussion
regarding any of the Plaintiffs at the November meeting. In her
testimony, Van Deventer acknowledged that she participated in the
meeting but was not asked to go into detail with regard to
discussions at the meeting. Ponville admitted that he did not
retain any documentation reflecting reasons for employment
decisions resulting from the meeting.
With the exception of Tyler, Ponville did not state any
specific performance-based reasons why any of the individual
Plaintiffs were not assigned positions in the reorganized unit.
With regard to Tyler, Ponville provided some specific comparisons
between Tyler’s performance as a field superintendent and that of
Van Horn, Van Deventer, and Leyendecker.9 Ponville admitted that
8
Ponville testified that he had seen Burkett in the office and that
he may have participated in a meeting with Hough.
9
In its reply brief, Unocal argues for the first time that there
was insufficient evidence of age discrimination against Tyler. Unocal
Red Brief at 46. In its initial brief to this court, Unocal’s only
assignments of error with respect to the judgment in favor of Tyler were
the claims that the entire suit was time-barred and that, in the
alternative, there was insufficient evidence to support the willfulness
finding. Only for Hough, Earles, and Burkett did Unocal initially
assert that there was conclusive evidence of legitimate, non-
discriminatory reasons for the adverse employment actions. Unocal’s
argument that Tyler did not prove age discrimination came too late.
“This Court will not consider a claim raised for the first time in
a reply brief.” Yohey v. Collins, 985 F.2d 222, 225 (5th Cir. 1993).
35
Tyler was ranked ahead of Van Horn in the forced ranking and that
Ponville had never reviewed Tyler’s performance appraisals in
detail or spoken with Tyler’s supervisors about Tyler. Following
the meeting, four former field superintendent positions were
consolidated into three positions, which were filled by Van Horn,
Van Deventer, and Leyendecker. Van Horn took over the field that
had previously been under Tyler.
As evidence of Unocal’s policies, the Plaintiffs proffered
Unocal’s Human Resources Policies and Procedures manual. The
manual included, inter alia, a statement that “planning [for a
RIF] should include . . . Documentation of non-discriminatory
reasons for adverse personnel decisions.” Ponville testified
that he was aware that Unocal policy called for keeping such
documentation. Ponville admitted that, the policy
notwithstanding, he failed to keep documentation of non-
discriminatory reasons for adverse decisions. Ponville shredded
whatever documentation he had. Ponville further conceded that
the human resources department would have no way of knowing the
reasons for the adverse personnel decisions.
An employer’s conscious, unexplained departure from its
usual polices and procedures when conducting a RIF may in
appropriate circumstances support an inference of age
discrimination if the plaintiff establishes some nexus between
36
employment actions and the plaintiff’s age. See EEOC v. Texas
Instruments, 100 F.3d 1173, 1182 (5th Cir. 1996); Moore v. Eli
Lilly Co., 990 F.2d 812, 819 (5th Cir.), cert. denied, 114 S. Ct.
467 (1993). Here, such a nexus was established. Ponville
testified that he based his decisions on performance, yet he
testified that he was not familiar with Hough, Earles and Burkett
and their job performance. Hough, Earles and Burkett introduced
evidence that they had received positive performance appraisals
in recent years. Cf. Risher v. Aldridge, 889 F.2d 592, 598 - 98
(5th Cir. 1989) (plaintiff failed to allege a nexus with failure
to consider written performance appraisals when employer
explained why the written appraisals were unreliable and that
decision-maker was personally familiar with plaintiff’s
performance). Ponville knew that he was supposed to keep
documentation of the reasons for adverse employment decisions,
yet he did not do so.
Hough, Earles and Burkett’s evidence of satisfactory
performance, Ponville’s failure to keep documentation and his
admission that he was not familiar with Hough, Earles and Burkett
and their job performance, were sufficient to permit an inference
that the performance rationale was a pretext for intentional
discrimination in the conduct of the RIF. But, Hough, Earles,
and Burkett still had to rebut Unocal’s evidence of
particularized, non-discriminatory reasons for their discharges.
37
B. Hough and Earles
With regard to Hough and Earles, Unocal’s position is that
each of these plaintiffs chose the termination package after they
were approached by Van Horn about whether they were interested in
reassignment and expressed to Van Horn that they were not
interested. The testimony concerning the conversations with Van
Horn conflicted. Both Hough and Earles testified that, in their
respective conversations with Van Horn, Van Horn was vague as to
what the new positions would entail and what they would pay.
According to these plaintiffs’ testimony, the only thing Van Horn
was certain about was that the new jobs would likely pay less
than their old jobs. Hough did indicate that Van Horn definitely
said that he would have a job. Earles testified that Van Horn
told him that there was only a possibility that he would have a
job. Van Horn demanded to know whether Earles was interested
before he hung up the telephone. Hough testified that Van Horn
demanded an answer within a few hours, even though Van Horn could
not tell Hough what or where the job would be.
The jury could reasonably have chosen to believe the
plaintiffs’ version of the Van Horn conversations and could infer
that any “job offers” were so indefinite that they were not bona
fide and did not present Hough or Earles with a real choice
between accepting termination or continued employment. Unocal
does not dispute that, at least, new jobs for these plaintiffs
38
would have involved salary compression. An act affecting
compensation is itself a type of adverse employment action that
is actionable in a discrimination case. See Mattern v. Eastman
Kodak Co., 104 F.3d 702, 707 (5th Cir. 1997). The testimony that
Van Horn pressured these plaintiffs to make quick decisions about
these questionable uncertain job “offers” was bolstered by
Earles’s testimony that Van Deventer had admitted that Unocal had
such a practice of pressuring older employees into early
retirement. Cf. Guthrie v. J.C. Penney Co., 803 F.3d 202, 208
(5th Cir. 1986) (jury could infer that repeated inquiries about
plaintiff’s retirement plans were intentional harassment).
The jury could rationally infer that Hough and Earles
suffered adverse employment actions because evidence was
presented that these plaintiffs were not extended bona fide
offers but were offered only a “choice” between uncertain
continued employment, in unspecified jobs at unspecified but
lower pay, and accepting termination benefits. We affirm the
district court’s holding in favor of Hough and Earles on their
ADEA claims.
C. Burkett
With regard to Burkett, Unocal asserts that it gave him the
redeployment package because of a good faith mistaken belief that
he desired the redeployment package rather than reassignment to
another job. Burkett testified that, after a meeting about the
39
RIF and before his redeployment, he told Van Deventer that he
would accept any job. He further testified that right after he
got his redeployment package, he met with Dupriest and said that
he would take any available job. The jury was entitled to
believe Burkett’s testimony and to infer that Unocal’s decision-
makers were on notice that Burkett wanted to keep working. We
affirm the district court’s judgment in favor of Burkett on his
ADEA claim.
VI. Liquidated Damages
The district court awarded $2,500 in liquidated damages to
each of the Appellees. Unocal argues that the evidence was
insufficient to support the finding of willful discrimination
that is necessary for a liquidated damages award under the ADEA.
The Appellees argue that, once there is a finding of willfulness,
the ADEA mandates liquidated damages in an amount that doubles
the back pay award.
A. Willfulness
Under the ADEA, liquidated damages are only payable for
“willful” violations. 29 U.S.C. § 626(b). A violation is
willful “if the employer knew or showed reckless disregard for
the matter of whether its conduct was prohibited by the ADEA.”
Hazen Paper Co. v. Biggins, 113 S. Ct. 1701, 1708 (1993) (quoting
Trans World Airlines, Inc. v. Thurston, 105 S. Ct. 613, 624
(1985)). An employer who knowingly relies on age in reaching a
40
decision does not invariably commit a knowing and reckless ADEA
violation. Id. “If an employer incorrectly but in good faith
and nonrecklessly believes that the statute permits a particular
age-based decision, then liquidated damages should not be
imposed.” Id. at 1709.10 The district court found that there
was sufficient evidence to support the jury’s finding of
willfulness. We affirm this holding.
A finding of willfulness does not require a showing that the
employer’s conduct was “outrageous.” Id. at 1710. We have
upheld jury findings of willfulness when a jury’s finding of
intentional violation of the ADEA necessarily implied a finding
that the employer’s proffered explanation for the adverse
employment action was pretextual. See Burns v. Tex. City
Refining, Inc., 890 F.2d 747, 751 - 52 (5th Cir. 1989); Powell v.
Rockwell Int'l Corp., 788 F.2d 279, 288 (5th Cir. 1986); but see
Russell, 235 F.3d at 230 (plaintiff’s evidence of ADEA violation
was not sufficient to support willfulness finding) (we conclude
that the willfulness evidence here is materially stronger than
that in Russell). Ettensohn’s testimony and the policy manual
make it clear that Unocal was aware that the ADEA applied to the
implementation of the RIF and Unocal does not claim that it
10
For example, the employer may in good faith but mistakenly
believe that an exemption permitting an age-based decision applied. See
Hazen Paper, 113 S. Ct. at 1708.
41
believed any exemption applied permitting it to make age-based
decisions as to the Appellees. Unocal’s proffered explanation
for the employment decisions made during the RIF was that the
decisions were premised on a forced ranking based on performance.
Yet Ponville, the primary decision-maker, testified that he was
not personally familiar with the performance of Earles, Hough or
Burkett. The Appellees presented evidence of their satisfactory
performance records. Ponville destroyed all documentation
relating to the adverse employment decisions, although Unocal
policy called for retention of a record of non-discriminatory
reasons for such decisions. This and the other evidence
discussed above suffices to support the jury’s finding that
Unocal knew or showed reckless disregard for whether its conduct
violated the ADEA.
B. Amount of Liquidated Damages
We must now consider whether the finding of willfulness
necessitated a mandatory liquidated damages award equal to the
amount of the back pay award. We hold that it does.
The ADEA statute provides for liquidated damages by means of
cross-reference to the FLSA. See 29 U.S.C. § 626 (b) (providing
that ADEA remedies shall be enforced in accordance with, inter
alia, 29 U.S.C. § 216 and that back pay under ADEA is treated as
unpaid minimum wages and overtime compensation for purposes of
applying FLSA provisions); 29 U.S.C. § 216(b) (employers who
42
violate minimum wage and overtime compensation provisions of FLSA
shall be liable for the back pay “and in an additional equal
amount as liquidated damages”).11
11
29 U.S.C. § 626(b) provides in full:
“(b) Enforcement; prohibition of age discrimination under
fair labor standards; unpaid minimum wages and unpaid
overtime compensation; liquidated damages; judicial
relief; conciliation, conference, and persuasion.
The provisions of this title shall be enforced in
accordance with the powers, remedies, and procedures
provided in sections 211(b), 216 (except for subsection
(a) thereof), and 217 of this title, and subsection (c)
of this section. Any act prohibited under section 623 of
this title shall be deemed to be a prohibited act under
section 215 of title. Amounts owing to a person as a
result of a violation of this chapter shall be deemed to
be unpaid minimum wages or unpaid overtime compensation
for purposes of sections 216 and 217 of this title:
Provided, That liquidated damages shall be payable only
in cases of willful violations of this chapter. In any
action brought to enforce this chapter the court shall
have jurisdiction to grant such legal or equitable relief
as may be appropriate to effectuate the purposes of this
chapter, including without limitation judgments
compelling employment, reinstatement or promotion, or
enforcing the liability for amounts deemed to be unpaid
minimum wages or unpaid overtime compensation under this
section. Before instituting any action under this
section, the Equal Employment Opportunity Commission
shall attempt to eliminate the discriminatory practice or
practices alleged, and to effect voluntary compliance
with the requirements of this chapter through informal
methods of conciliation, conference, and persuasion.”
29 U.S.C. 216(b) provides:
“Damages; right of action; attorney's fees and costs;
termination of right of action
Any employer who violates the provisions of section 206
or section 207 of this title shall be liable to the
employee or employees affected in the amount of their
unpaid minimum wages, or their unpaid overtime
compensation, as the case may be, and in an additional
equal amount as liquidated damages. Any employer who
43
This circuit has never ruled on the precise question posed
by this case – whether the ADEA mandates an award of liquidated
damages in an amount equal to the back pay award upon a finding
of willfulness.12 In Thurston, the Supreme Court assumed that
violates the provisions of section 215(a)(3) of this
title shall be liable for such legal or equitable relief
as may be appropriate to effectuate the purposes of
section 215(a)(3) of this title, including without
limitation employment, reinstatement, promotion, and the
payment of wages lost and an additional equal amount as
liquidated damages. An action to recover the liability
prescribed in either of the preceding sentences may be
maintained against any employer (including a public
agency) in any Federal or State court of competent
jurisdiction by any one or more employees for and in
behalf of himself or themselves and other employees
similarly situated. No employee shall be a party
plaintiff to any such action unless he gives his consent
in writing to become such a party and such consent is
filed in the court in which such action is brought. The
court in such action shall, in addition to any judgment
awarded to the plaintiff or plaintiffs, allow a
reasonable attorney's fee to be paid by the defendant,
and costs of the action. The right provided by this
subsection to bring an action by or on behalf of any
employee, and the right of any employee to become a party
plaintiff to any such action, shall terminate upon the
filing of a complaint by the Secretary of Labor in an
action under section 217 of this title in which (1)
restraint is sought of any further delay in the payment
of unpaid minimum wages, or the amount of unpaid overtime
compensation, as the case may be, owing to such employee
under section 206 or section 207 of this title by an
employer liable therefor under the provisions of this
subsection or (2) legal or equitable relief is sought as
a result of alleged violations of section 215(a)(3). “
12
In at least two post-Thurston cases, we have commented on the
issue in dicta. See Smith v. Berry Co., 165 F.3d 390, 395 (5th Cir.
1999) (“[L]iquidated damages may not exceed the back pay award.
That is, a finding of willfulness can double the damages awarded to
44
the double recovery was required after any finding of
willfulness. See Thurston, 105 S. Ct. at 625 (observing that too
broad a standard for willfulness “would result in an award of
double damages in almost every case”). In at least one post-
Thurston decision, this court has assumed the same thing. Burns
v. Texas City Refining, 890 F.2d 747, 752 (5th Cir. 1989)
(“Pursuant to 29 U.S.C. § 626(b), a finding of willfulness
entitles the plaintiff to a doubling of any back pay award.”
(emphasis added)). A majority of our sister circuits have
expressly held or have assumed that double damages were mandatory
after a finding of willfulness: Four circuits have expressly
held that this is the case. Mathis v. Phillips Chevrolet, Inc.,
269 F.3d 771, 777 (7th Cir. 2001); Greene v. Safeway Stores,
Inc., 210 F.3d 1237, 1246 (10th Cir. 2000); Spencer v. Stuart
Hall Co., Inc., 173 F.3d 1124, 1129 (8th Cir. 1999); Hill v.
a successful ADEA plaintiff.” (emphasis added)); Purcell v. Seguin
State Bank & Trust Co., 999 F.2d 950, 956 (5th Cir. 1993) (“[E]ven
when the plaintiff has proved willfulness, the court has discretion
about whether to award liquidated damages.”). The precise issue we
decide today was not necessary to the decision of either case. In
Smith, the district court had awarded double damages and the
appellate court affirmed the willfulness finding and the damage
award. Id. at 395. In Purcell, there was no evidence supporting
the willfulness finding, so no liquidated damages were awarded.
Id. at 958. The dicta in Purcell can be further distinguished
because it relied for support on the pre-Thurston case of Elliot v.
Group Medical & Surgical Service, 74 F2d 556, 558 (5th Cir. 1983), which
in turn relied on Hays v. Republic Steel Corp., 531 F.2d 1307 (5th Cir.
1976). Hays was expressly disapproved in Thurston. Thurston, 105 S. Ct.
at 625 n.22.
45
Spiegel, Inc., 708 F.2d 233, 238 (6th Cir. 1983). Three circuits
have at least assumed that it was so. See McGinty v. State, 193
F.3d 64, 71 & n.6 (2d Cir. 1999); Starceski v. Westinghouse Elec.
Corp., 54 F.3d 1089, 1099 (3d Cir. 1995) (“ADEA provides double
damages when the employer's discriminatory conduct is willful”);
Biggins v. Hazen Paper Co., 953 F.2d 1405, 1416 (1st Cir. 1992),
vacated on other grounds, 113 S. Ct. 1701 (1993).13
We hold that the plain language of the statutes requires the
interpretation that liquidated damages in an amount equal to the
back pay award are mandatory upon a finding of willfulness.14
Accordingly, we remand this portion of the case to the district
13
A case from the Eleventh Circuit seems to have assumed that
a willfulness finding “entitles” the plaintiff to liquidated
damages, but did not address whether double recovery was a
mandatory amount. Day v. Liberty Nat. Life Ins. Co., 122 F.3d
1012, 1016 (11th Cir. 1997). Cases from the Fourth and Ninth
Circuits seem to have assumed that liquidated damages were
permitted, but perhaps not mandatory, after a finding of
willfulness. Herold v. Hajoca Corp., 864 F.2d 317, 323 (4th Cir.
1998) (plaintiff “may recover” liquidated damages); AARP v. Farmers
Group, Inc., 943 F.2d 996, 1006 (9th Cir. 1991) (statute
“authorizes” liquidated damages).
14
This conclusion is further bolstered by 29 U.S.C. § 260, which
provides an employer with a “good faith” defense under the FLSA. In an
FLSA case, the liquidated damages provided for in 29 U.S.C. § 216(b) are
mandatory unless the employer satisfies the requirements for the good
faith defense, in which case 29 U.S.C. § 260 expressly provides the
district court with discretion to award no liquidated damages or to
award such damages in an amount not to exceed the amount provided for
in § 216(b). 29 U.S.C. § 216(b); Mireles v. Frio Foods, Inc., 899 F.2d
1407, 1414 - 15 & n.8 (5th Cir. 1990). But “the ADEA does not
incorporate [29 U.S.C. § 260].” Thurston, 105 S. Ct. at 625 n.22. Thus,
there is no provision in the ADEA for discretion in the award of
liquidated damages once a willfulness finding has been made.
46
court with instructions to enter judgment awarding liquidated
damages in an amount equal to the back pay award for each of the
Appellees.
VII. Compensatory Damages – Back Pay and Front Pay
In reviewing a district court’s damage award, this court
reviews all issues of law de novo. Rhodes v. Guiberson Oil Tools
Div’n, 82 F.3d 615, 620 (5th Cir. 1996) (Rhodes II). “Absent an
error of law, a district court's award of compensatory damages
presents an issue of fact, subject to the clearly erroneous
standard of review.” Id. If the district court’s factual
findings are plausible in light of the evidence presented, this
court will not reverse its decision even if this court would have
reached a different conclusion. Patterson v. P.H.P. Healthcare
Corp., 90 F.3d 927, 936 (5th Cir. 1996).
The Appellees, on their cross-appeal, challenge the district
court’s limitation of the back pay award to compensation through
May 25, 2000 – the date Unocal/Spirit’s Permian Basin operation
ceased to exist – rather than through September 29, 2000 – the
date of the final judgment. The Appellees also appeal the
district court’s denial of a front pay award.
A. Backpay
The purpose of ADEA back pay compensation is to restore the
plaintiff to the position he would have been in absent the
discrimination. McKennon v. Nashville Banner Public Co., 115
47
S. Ct. 879, 886 (1995). The purpose is not to restore a plaintiff
to a better position than he would have been in. Cf. id.
(compensatory principle is difficult to apply when there is
after-acquired evidence of plaintiff’s wrongdoing that would have
led the employer to terminate plaintiff anyway for a legitimate
reason). As a matter of law, the district court did not err in
finding that it could award back pay for some period less than
the entire time up to the date of the judgment. Cf. Brunneman v.
Terra Intern. Inc., 975 F.2d 175, n.5 (5th Cir. 1992) (affirming
jury award of back pay up to date of judgment, but not suggesting
such an award was mandatory).
The determination of the proper period for awarding back pay
is a factual matter that should be set aside only if clearly
erroneous. Id. In the instant case, the district court’s
conclusion that back pay should only be awarded through the May
25, 2000 cessation of Unocal/Spirit’s operation was not clearly
erroneous. Cf. McKennon, 115 S. Ct. at 361 (in awarding back pay,
district court can take account of “factual permutations” in the
particular case). The factual finding that the business entity
that employed the Appellees ceased to exist on May 25 is
undisputed. Even absent discrimination, the Appellees would no
longer be employed by Unocal and would not have received wages.
The Appellees argue, however, that Pure was the alter ego of
Unocal. They emphasize that Unocal was the majority shareholder
48
in Pure and controlled Pure’s board of directors and that about
seventy percent of Spirit employees moved to Pure. But the
district court heard the evidence concerning the sale of Unocal’s
operations to Pure and impliedly found that Pure was not Unocal’s
alter ego or agent. The Appellees’ assertions do not, without
more, demonstrate that the district court’s finding was clearly
erroneous.
We decline to disturb the district court’s award of back
pay.
B. Front pay
Front pay is an equitable remedy that is normally employed
when the ADEA’s preferred remedy of reinstatement is
impracticable. Patterson, 90 F.3d at 937 n.8; Brunnemann, 975
F.2d at 180. A front pay award is intended to compensate the
plaintiff for wages and benefits he would have received from the
defendant employer in the future if not for the discrimination.
Burns, 890 F.2d at 753. This court reviews a district court’s
determination regarding a front pay award for abuse of
discretion. Id.
In the instant case, if, as we hold above, the district
court’s back pay finding was not clearly erroneous, then the
district court did not abuse its discretion by holding that the
Appellees were not entitled to front pay. The back pay finding
was effectively a finding that the Appellees would not have
49
received future wages from Unocal, even absent the
discrimination. See id. at 753 (front pay award would be “purely
speculative” when defendant employer sold assets to another
company and many employees were terminated).
We affirm the district court’s holding that the Appellees
were not entitled to an award of front pay.
VIII. Whether Hough and Earles Were Exempt Under the FLSA
Hough and Earles appeal the district court’s bench trial
holding that they were “exempt” administrative employees under
the FLSA and therefore not entitled to compensation for unpaid
overtime.
The FLSA imposes maximum work hour standards and requires
employers to compensate employees who work overtime. 29 U.S.C. §
207. Employees who are classified as “exempt” are not entitled
to such compensation; in pertinent part, 29 U.S.C. § 213(a)(1)
exempts “any employee employed in a bona fide executive,
administrative, or professional capacity.” These exemptions are
construed narrowly against the employer and the employer has the
burden of proving that an employee is exempt. Dalheim v. KDFW-
TV, 918 F.2d 1220, 1224 (5th Cir. 1990) The district court’s
findings as to whether an employee is exempt are reviewed under a
mixed standard of review. In Dalheim, this court recognized that
it can be difficult to discern which issues in this inquiry are
questions of law and which are questions of fact. Id. at 1225.
50
The Dalheim court explained that questions of “historical fact”
(e.g., whether an employee’s work was reviewed by a supervisor)
and inferences drawn from historical facts (e.g., whether an
employees work is “original and creative”) are fact findings
reviewed for clear error. Id. at 1226. The ultimate finding
whether the employee is exempt, though based on historical fact
and factual inferences, is a legal conclusion subject to plenary
de novo review. Id. Thus, the proper inquiry in the instant
case is (1) whether the district court’s historical factual
findings and factual inferences were clearly erroneous and, (2)
whether they support the district court’s legal conclusion that
Hough and Earles were exempt under the administrative exemption.
The Secretary of Labor has defined the test for the
administrative exemption for employees who, like Hough and
Earles, earned more than $250 per week, in 29 C.F.R. 541.2: An
administratively exempt employee is one whose “primary duty”
consists of “office or nonmanual work directly related to
management policies or general business operations” and who
“customarily and regularly exercises discretion and independent
judgment.”15 The district court made findings of historical
15
The employee must also meet the following criteria:
“(c)(1) Who regularly and directly assists a proprietor, or an
employee employed in a bona fide executive or administrative
capacity (as such terms are defined in the regulations of this
subpart), or
(2) Who performs under only general supervision work along
51
fact concerning Hough and Earles’s employment and reached the
legal conclusion that they met the test for the administrative
exemption.
Hough and Earles assert that they do not seek to set aside
the district court’s factual findings and they do not argue that
the specific findings listed by the district court are erroneous.
They do, however, assert that the record contains additional
evidence supporting further findings of fact. This amounts to
requesting de novo review of the facts and is inappropriate for
this court’s review of the district court’s factual findings made
after a bench trial. See Owsley v. San Antonio Indep. Sch.
Dist., 187 F.3d 521, 523 n.1 (distinguishing Dalheim, in which
the court reviewed factual findings following a bench trial only
for clear error, from Owsley, in which the court was reviewing a
summary judgment de novo). The district court considered the
evidence cited by Hough and Earles in reaching its understanding
of the pertinent facts and implicitly rejected the further
specialized or technical lines requiring special training,
experience, or knowledge, or
(3) Who executes under only general supervision special
assignments and tasks; and
(d) Who does not devote more than 20 percent, or, in the case
of an employee of a retail or service establishment who does
not devote as much as 40 percent, of his hours worked in the
workweek to activities which are not directly and closely
related to the performance of the work described in paragraphs
(a) through (c) of this section.” 29 C.F.R. 541.2.
52
findings that they now urge. Because Hough and Earles have not
shown that the court’s factual findings are clearly erroneous,
and because they have not shown that the district court clearly
erred in refusing to make the additional factual findings that
they now assert, we take the district court’s factual findings as
established and review its conclusions of law de novo.
In Lott v. Howard Wilson Chrysler-Plymouth, 203 F.3d 326
(5th Cir. 2000), this court offered guidance for applying the
administrative exemption:
“The exercise of discretion and independent judgment
necessitates consideration and evaluation of
alternative courses of conduct and taking action or
making a decision after the various possibilities have
been considered. 29 C.F.R. § 541.207(a). This exercise
of discretion and independent judgment must relate to
matters of consequence. 29 C.F.R. § 541.207(b)-(c)(1).
Final decision making authority over matters of
consequence is unnecessary.
As a general rule, an employee's ‘primary duty’
involves over 50% of the employee's work time. And yet,
flexibility is appropriate when applying this rule,
depending on the importance of the managerial duties as
compared with other duties, frequency of exercise of
discretionary power, freedom from supervision, and
comparative wages.” Id. at 331 (case citations
omitted).
Further guidance is found in 29 C.F.R. § 541.201, in which the
Secretary offers examples of staff employees who may typically
qualify for the administrative exemption, provided they meet all
the tests required in 29 C.F.R § 541.2. The district court’s
factual findings concerning Hough’s position as HES Coordinator
accord with the “safety director” position contemplated in 29
53
C.F.R. § 541.201(a)(2)(ii). Earles’s production technician
position is analogous to the “field representatives of utility
companies” and “district gaugers for oil companies” contemplated
in 29 C.F.R. § 541.201(a)(3). The district court did not err in
its legal conclusion that Hough and Earles were exempt employees.
We affirm the district court’s holding that Hough and Earles
were not entitled to compensation for unpaid overtime on their
FLSA claims.
IX. Whether Plaintiffs Were “Prevailing Parties” Entitled to
Legal Fees
The ADEA, by reference to the FLSA, mandates that a district
court award attorneys’ fees to a plaintiff who is a “prevailing
party.” Purcell, 999 F.2d at 961. The court has discretion in
deciding what is reasonable. Id. In the context of a 42 U.S.C.
§ 1988 action in which a plaintiff was awarded only nominal
damages, the Supreme Court explained that “to qualify as a
prevailing party, a civil rights plaintiff must obtain at least
some relief on the merits of his claim.” Farrar v. Hobby, 113
S. Ct. 566, 573 (1992).
As detailed above, we affirm the district court’s judgment
in favor of the Appellees as to several of their claims. These
plaintiffs have obtained “at least some relief on the merits” and
thus qualify as prevailing parties. We have held that liquidated
damages must be awarded in an amount equal to the back pay award.
54
In light of this holding, we instruct the district court to
consider on remand what, if any, adjustment should be made to the
amount of the legal fees award.
X. Expert Witness Fees
The Appellees seek to add their expert witness fees to the
fees and costs award. The Supreme Court has explained that the
interrelation of Fed. R. Civ. P. 54(d)(1) (relating to costs
other than attorneys’ fees), 28 U.S.C. § 1920 (listing “costs”
that may be taxed by a federal court), and 28 U.S.C. § 1821
(authorizing per diem and travel expenses for witnesses) means
that expert witness fees in excess of the standard witness per
diem and travel allowances cannot be taxed in the absence of
express statutory authority to the contrary. Crawford Fitting
Co. v. J.T. Gibbons, Inc., 107 S. Ct. 2494, 2496 (1987);16 see
also Leroy v. Houston, 831 F.2d 576, 584 (5th Cir. 1987)
(applying Crawford to fee-shifting provision of the Voting Rights
Act). There is no express statutory authority in the ADEA or the
16
The wording of Rule 54(d)(1) has been slightly amended since
Crawford. Compare Fed. R. Civ. P. 54(d)(1) (2001) with Crawford,
107 S. Ct. at 2497. But the operative language remains
substantially the same in pertinent part. In relevant part,
current Rule 54(d)(1) reads: “Except when express provision
therefor is made either in a statute of the United States or in
these rules, costs other than attorneys’ fees shall be allowed as
of course to the prevailing party unless the court otherwise
directs.” The Crawford Court explained that § 1920 defines “costs”
as used in Rule 54(d)(1) and enumerates the expenses that a federal
court may tax as costs. Crawford, 107 S. Ct. at 2497. Section 1920
permits compensation for expert witnesses only when those witnesses
are appointed by the court. 28 U.S.C. 1920(6).
55
FLSA to award expert witness fees for other than court-appointed
expert witnesses. The district court did not err in refusing to
award the Plaintiffs expert witness fees.
XI. Delay Enhancement
Following the district court’s judgment on the fees and
costs request, the Appellees moved for a delay enhancement in a
motion to alter or amend the judgment filed pursuant to Fed. R.
Civ. P. 59(e). The district court denied the motion. On appeal,
the Appellees argue that the delay enhancement should be granted
to compensate for the approximately two year (that is, up to the
present time) delay in payment.
Denial of a Rule 59(e) motion to amend or alter a judgment
is generally reviewed for abuse of discretion. Fletcher v.
Apfel, 210 F.3d 510, 512 (5th Cir. 2000). Issues that are purely
questions of law are, however, reviewed de novo. See id.
In the instant case, the Appellees did not request the delay
enhancement in their original motion for attorneys’ fees,
although they did request a lodestar enhancement, which was
denied. Their Rule 59(e) motion was not a motion to reconsider
the judgment on its merits, rather it was a motion to consider a
new issue. The Appellees do not argue that the district court
erred in a question of law. The district court’s application of
the law to the facts is therefore subject to an abuse of
discretion standard of review. The Appellees have not addressed
56
the standard of review for this issue and have not shown that the
district court abused its discretion. The Appellees’ concession
that the district court’s calculation of the lodestar amount was
not an abuse of discretion weighs against finding in their favor
on the delay enhancement issue. See Walker, 99 F.3d at 773
(district court may either grant unenhanced lodestar based on
current rates or calculate lodestar using rates applicable when
work was done and grant delay enhancement, but not both). The
district court already awarded the Appellees $50,000 in
attorneys’ fees and $2,500 in costs for this appeal. We affirm
the district court’s denial of a delay enhancement.
Conclusion
With regard to the appeals on the merits, we affirm the
district court in all respects except as to the amount of
liquidated damages. As we have explained, the ADEA mandates a
liquidated damages award in an amount equal to the back pay
award. We vacate and remand the damages award with instructions
to award liquidated damages to each of the Appellees in an amount
equal to his back pay award.
With regard to the fees and costs appeals, we affirm the
district court in all respects except that we instruct the
district court to consider, on remand, whether (and, if so, to
what extent) an adjustment to the fees award is appropriate in
light of the adjustment to the liquidated damages award.
57
AFFIRMED in part; VACATED in part; and REMANDED with
instructions.
58