Sears v. Zions ( 2022 )

Case: 21-10448 Document: 00516341547 Page: 1 Date Filed: 06/02/2022
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
FILED
No. 21-10448 June 2, 2022
Lyle W. Cayce
Clerk
Larry L. Sears,
Plaintiff—Appellant,
versus
Zions Bancorporation NA, formerly known as ZB NA, doing
business as Amegy Bank of Texas,
Defendant—Appellee.
Appeal from the United States District Court
for the Northern District of Texas
USDC No. 3:19-CV-2810-C
Before Richman, Chief Judge, and Clement and Engelhardt,
Circuit Judges.
Kurt D. Engelhardt, Circuit Judge:*
In this case, we must determine whether a 64-year-old banker
provided sufficient evidence of age discrimination to survive summary
judgment. We hold that he did. Accordingly, we reverse and remand.
*
Pursuant to 5th Circuit Rule 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opinion should not be published and is not precedent except under the limited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 Circuit Rule 47.5.4.
Case: 21-10448 Document: 00516341547 Page: 2 Date Filed: 06/02/2022
No. 21-10448
I.
Larry Sears was hired by Zions Bancorporation (d/b/a/ Amegy Bank
of Texas, or “Amegy”) on October 1, 2012, as a Senior Vice President
(“SVP”) in the Dallas bank energy lending department. Sears was hired by
the group’s manager, Terry McCarter, and Amegy’s Head of Energy, Steve
Kennedy. Sears initially reported to McCarter, who in turn reported to
Kennedy. McCarter left the bank in late 2016, after which Sears reported
directly to Kennedy. Sears’s primary role was business development; his role
as an SVP was described as the “hunter” of the group.
In early 2018, Amegy had four SVPs in its Dallas energy lending
group: Sears (aged 64), John Murray (aged 63), Jill McSorley (aged 54-55),
and J.B. Askew (aged 31). Askew had been promoted to the role only in
February 2018. The Dallas energy lending group also included Vice
President Matt Lang, an employee in his thirties who had been promoted by
Kennedy in February 2018, and Assistant Vice President Jack Bush, an
employee in his thirties that had been promoted by Kennedy in October 2017.
Amegy concedes that Kennedy was “broadly satisfied” with Sears’s
performance, though his performance review scores began to falter after
McCarter left. For example, while Sears’s 2015 and 2016 reviews placed him
at a 4.5/5 and 4.8/5 rating, respectively, his 2018 score fell to 3.5/5, a “meets
expectations” review. Amegy states that “Kennedy’s opinion of Sears’
management and marketing skills had become less favorable in 2017” once
Kennedy began working directly with Sears.
According to Amegy, in late 2017 it began to consider hiring a new
manager for the Dallas energy lending group. A January 2018 email between
bank executives states that the bank was putting “feelers” out for a new
manager and “once found, [Amegy] would consider transitioning Larry
out.” According to the bank, it determined that it needed to eliminate one of
2
Case: 21-10448 Document: 00516341547 Page: 3 Date Filed: 06/02/2022
No. 21-10448
the four SVP positions to make room in the budget for such a manager. To
determine which SVP to eliminate, Kennedy performed an informal ranking.
Kennedy ranked Sears last and decided to eliminate his position. Amegy
finalized this decision by April 2, 2018. On April 30, 2018, Kennedy traveled
to Dallas to tell Sears that he was terminated. In August 2018, Amegy
suspended its search for an outside candidate and assigned Scott Collins, the
manager of Amegy’s Houston energy lending department, the role of
managing the Dallas department.
Sears sued Amegy alleging that he was terminated because of his age.
Amegy removed the suit to federal court and later moved for summary
judgment. The district court granted Amegy’s motion, finding that Sears
failed to establish a prima facie case of age discrimination and failed to
demonstrate that Amegy’s proffered reason for Sears’s termination was
pretextual. Sears timely appealed.
II.
This court reviews a grant of a motion for summary judgment de novo,
and applies the same standard as the district court, viewing the evidence in
the light most favorable to the nonmovant. First Am. Title Ins. Co. v. Cont’l
Cas. Co., 709 F.3d 1170, 1173 (5th Cir. 2013). Summary judgment is
appropriate where “there is no genuine dispute as to any material fact and
the movant is entitled to judgment as a matter of law.” Fed. R. Civ.
P. 56(a). “Courts do not disfavor summary judgment, but, rather, look upon
it as an important process through which parties can obtain a ‘just, speedy
and inexpensive determination of every action.’” Goldring v. United States,
15 F.4th 639, 644 (5th Cir. 2021) (quoting Celotex Corp. v. Catrett, 477 U.S.
317, 327 (1986)). “A party asserting that there is no genuine dispute as to any
material fact must support its assertion by citing to particular parts of
materials in the record.” Id. at 644–45.
3
Case: 21-10448 Document: 00516341547 Page: 4 Date Filed: 06/02/2022
No. 21-10448
III.
Sears claims he was discharged because of his age in violation of the
Texas Labor Code. Texas law provides that, “An employer commits an
unlawful employment practice if because of . . . age the
employer . . . discharges an individual.” Tex. Lab. Code § 21.051.
Although Sears brings only a state law claim, the Texas Labor Code is
designed “to correlate state law with federal law in employment
discrimination cases,” including the federal Age Discrimination in
Employment Act. Ysleta Indep. Sch. Dist. v. Monarrez, 177 S.W.3d 915, 917
(Tex. 2005) (citation omitted); see also Lindsley v. TRT Holdings, Inc., 984
F.3d 460, 466–67 (5th Cir. 2021). Accordingly, we may turn to federal case
law for guidance in assessing Sears’s claim.
As the parties acknowledge, Sears’s employment discrimination claim
is governed by the burden shifting framework established in McDonnell
Douglas Corp. v. Green, 411 U.S. 792 (1973). Under McDonnell Douglas, the
plaintiff has the initial burden to establish a prima facie case of age
discrimination. Id. at 802. If he does so, the burden shifts to his employer to
put forth a legitimate, non-discriminatory reason for the adverse employment
action. Id. at 802–03. If the employer provides such a reason, the burden
shifts back to the plaintiff to demonstrate that the stated reason is pretextual.
Id. at 804–05.
A. Prima Facie Case
To establish a prima facie case of age discrimination under Texas law,
a plaintiff must demonstrate that he “(1) was a member of the protected class
(that is, 40 years of age or older), (2) was qualified for the position at issue,
(3) suffered a final, adverse employment action, and (4) was either
(a) replaced by someone significantly younger, or (b) otherwise treated less
favorably than others who were similarly situated but outside the protected
4
Case: 21-10448 Document: 00516341547 Page: 5 Date Filed: 06/02/2022
No. 21-10448
class.” Tex. Tech Univ. Health Scis. Ctr.-El Paso v. Flores, 612 S.W.3d 299,
305 (Tex. 2020). Only the fourth prong is disputed here. We have previously
held that “[o]nly a minimal showing is necessary to meet this burden” of
establishing a prima facie case. Bauer v. Albemarle Corp., 169 F.3d 962, 967
(5th Cir. 1999); see also Prestige Ford Co. v. Gilmore, 56 S.W.3d 73, 82 (Tex.
App.—Houston [14th Dist.] 2001, pet. denied.).
“Employees are similarly situated if their circumstances are
comparable in all material respects, including similar standards, supervisors,
and conduct.” Flores, 612 S.W.3d at 312 (citation omitted). “Though their
circumstances need not be ‘identical,’ they must be ‘nearly identical.’” Id.
(citations omitted). “Employees with different responsibilities, supervisors,
capabilities, work rule violations, or disciplinary records are not considered
to be ‘nearly identical.’” Id. (citation omitted).
Here, Sears has produced sufficient evidence to create a dispute of
material fact regarding whether he was treated less favorably than younger
and similarly situated SVPs. First, a jury could find that Sears and Askew
were similarly situated. 1 See County of El Paso v. Aguilar, 600 SW.3d 62, 77
(Tex. App.—El Paso 2020, no pet.) (noting that whether two employees are
similar situated is a question of fact for the jury). Both were SVPs, both
reported and Kennedy, and Sears attested to the fact that Askew performed
nearly identical job duties based on his resume, which described Askew’s job
1
We acknowledge that two of the other SVPs were over the age of forty. Murray,
who was near Sears’s age, was involuntarily terminated shortly after Sears. Further,
although McSorley is over the age of forty, her age difference with Sears can still give rise
to an inference of age discrimination. This is because the “outside the protected class”
element does not always have a logical connection to age discrimination when a younger
(but still protected) employee is favored over an older employee. See O’Connor v. Consol.
Coin Caters Corp., 517 U.S. 308, 312–13 (1996); see also Mission Consol. Indep. Sch. Dist. v.
Garcia, 372 S.W.3d 629, 641 (Tex. 2012).
5
Case: 21-10448 Document: 00516341547 Page: 6 Date Filed: 06/02/2022
No. 21-10448
as early as February 2018. Although their reviews were not identical, Amegy
concedes that it was “broadly satisfied” with Sears’s performance.
Moreover, Askew’s performance records are incomplete, making it difficult
to compare the SVP’s review. And Sears’s worst review came only after
certain Amegy executives had discussed “transitioning Larry out.”
A jury could also find that Sears was treated less favorably. Sears, the
oldest SVP, was the only SVP selected for termination. Askew not only kept
his job but was promoted. Indeed, the same day that Sears was fired, Askew
was promoted to team lead. Kennedy’s talking points for his April 30, 2018
trip to Dallas include scripts for both firing Sears and promoting Askew with
a $9,000 raise. Based on this evidence, a jury could reasonably find that Sears
was treated less favorably than a younger, similarly situated employee.
Because we find that Sears has produced sufficient evidence that he
was treated less favorably than others who were similarly situated but outside
the protected class to avoid summary judgment, we do not reach Sears’s
argument that he was replaced by Askew.
B. Non-Discriminatory Reason
Because Sears has produced sufficient evidence of a prima facie case
to survive summary judgment, the burden shifts to Amegy to put forth a
legitimate, non-discriminatory reason for Sears’s termination. McDonnell
Douglas, 411 U.S. at 802–03. This is a burden of production, not persuasion.
Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 142 (2000). The non-
discriminatory reason that Amegy put forth here is that it chose to eliminate
Sears because it needed to eliminate an SVP to make room in its budget for a
new manager to oversee the Dallas energy banking department. Specifically,
Amegy contends that Kennedy ranked the four SVPs and picked Sears last
based on his high compensation, his failure to integrate with other
departments, his past performance reviews, and an internal email that
6
Case: 21-10448 Document: 00516341547 Page: 7 Date Filed: 06/02/2022
No. 21-10448
Kennedy viewed as insubordinate. In the abstract, these are all legitimate
reasons for Sears’s termination.
C. Pretext
Because Amegy has put forth legitimate reasons for Sears’s
termination, the burden shifts back to Sears to demonstrate that “(1) the
reason stated by the employer was a pretext for discrimination, or (2) the
defendant’s reason, while true, was only one reason for its conduct and
discrimination is another motivating factor.” See Reed v. Neopost USA, Inc.,
701 F.3d 434, 439–40 (5th Cir. 2012) (quoting Michael v. City of Dallas, 314
S.W.3d 687, 691 (Tex. App.—Dallas 2010, no pet.)). Under Texas law, a
plaintiff need only show that age was a “motivating factor” in the employer’s
decision, not a “but-for” cause of that decision. See id. at 440 (citing
Quantum Chem. Corp. v. Toennies, 47 S.W.3d 473, 480 (Tex. 2001)).
A plaintiff must “produce substantial evidence indicating that the
proffered legitimate nondiscriminatory reason is a pretext for
discrimination.” Burton v. Freescale Semiconductor, Inc., 798 F.3d 222, 233
(5th Cir. 2015) (quoting Laxton v. Gap Inc., 333 F.3d 572, 578 (5th Cir. 2003)).
“Evidence is substantial if it is of such quality and weight that reasonable and
fair-minded men in the exercise of impartial judgment might reach different
conclusions.” Id. (quoting Laxton, 333 F.3d at 579). “A plaintiff may
establish pretext either through evidence of disparate treatment or by
showing that the employer’s proffered explanation is false or ‘unworthy of
credence.’” Laxton, 333 F.3d at 578 (quoting Wallace v. Methodist Hosp. Sys.,
271 F.3d 212, 220 (5th Cir. 2001)). “At the end of the day, the pretext inquiry
asks whether there is sufficient evidence ‘demonstrating the falsity of the
employer’s explanation, taken together with the prima facie case,’ to allow
the jury to find that discrimination was the . . . cause of the termination.’”
Goudeau v. Nat’l Oilwell Varco, L.P., 793 F.3d 470, 478 (5th Cir. 2015)
7
Case: 21-10448 Document: 00516341547 Page: 8 Date Filed: 06/02/2022
No. 21-10448
(quoting Sandstad v. CB Richard Ellis, Inc., 309 F.3d 893, 897 (5th Cir.
2002)).
Sears calls Amegy’s explanation into doubt with a variety of well-
taken arguments. First and foremost, Amegy’s actions contradict its
proffered explanation. Amegy claims to have terminated Sears in order to
open up room in its budget to hire a manager to oversee the Dallas energy
banking department. But it never hired that manager. Instead, in August
2018, just three months after terminating Sears, it “decided for independent
business reasons to suspend its search for an outside candidate to replace the
long-since departed McCarter.” That Amegy abandoned its search for a new
manager—the purported impetus for firing Sears—only three months after
Sears’s termination undermines the bank’s explanation.
Additional evidence contradicts Amegy’s proffered explanation that
the termination decision was made by Kennedy after he conducted an
informal ranking of the SVPs. Kennedy claimed to have performed his
informal ranking in “the spring of 2018.” Similarly, Amegy represents in its
brief that Kennedy considered Sears’s 2018 performance review, which was
issued on March 1, 2018. But a January 10, 2018 email between Amegy
executives references “transitioning Larry out.” This suggests that the
choice to remove Sears was preordained and calls into question the veracity
of Kennedy’s Spring 2018 ranking of the SVPs.
Finally, Sears presents evidence that Amegy deviated from its own
established policies for reviewing and providing feedback to Sears. A 2016
email from Kennedy describing a “change to [Amegy’s] performance review
process” states that “[m]anagers are being asked to take time to meet
individually with employees on their teams to see how they are doing, both
relative to their goals and with their plans for the rest of the year. This will
also be a time to reinforce any goals that may need extra attention.” At
8
Case: 21-10448 Document: 00516341547 Page: 9 Date Filed: 06/02/2022
No. 21-10448
Kennedy’s deposition he acknowledged that he was required to comply with
the performance review policy but testified that he was “not sure” if he
issued Sears a performance appraisal that complied with Amegy’s policies.
Sears testified that the only feedback that Kennedy ever gave him was in April
2018, after the decision to fire him had already been made.
We have repeatedly held that an employer’s failure to follow its
internal protocols in terminating an employee or in reviewing the employee
before termination can be evidence of pretext. See Goudeau, 793 F.3d at 477;
Machinchick v. PB Power, Inc., 398 F.3d 345, 354–55 (5th Cir. 2005), overruled
on other grounds by Gross v. FBL Fin. Servs., Inc., 577 U.S. 167 (2009); Russell
v. McKinney Hosp. Venture, 235 F.3d 219, 224 (5th Cir. 2000). The failure to
follow even non-mandatory policies can give rise to an inference of pretext.
See Machinchick, 398 F.3d at 354 n.29. Amegy concedes that Sears’s
relatively poor ratings (relative to other SVPs) factored into the decision to
rank him last. The evidence suggests that the ratings were unaccompanied
by a performance review indicating any improvement may be needed,
notwithstanding company policy to the contrary. Indeed, evidence suggests
that only after deciding to terminate Sears did Kennedy comply with this
policy by giving Sears an oral review telling him that improvement was
needed. Viewed in the light most favorable to Sears, this evidence shows that
Kennedy failed to follow the performance review policy that he
acknowledged he was required to follow.
Considering all this evidence cumulatively, we are convinced that a
jury could conclude that age was the reason for Sears’s termination based on
the evidence Sears has produced to undermine the genuineness of Amegy’s
explanations. “[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.”
Reeves, 530 U.S. at 148. This is particularly true under Texas law, where a
9
Case: 21-10448 Document: 00516341547 Page: 10 Date Filed: 06/02/2022
No. 21-10448
plaintiff need only establish that age was a “motivating factor” in the
Amegy’s decision to terminate Sears. Goudeau, 793 F.3d at 475.
Accordingly, the district court erred in granting summary judgment in
Amegy’s favor.
IV.
Sears has provided sufficient evidence to survive summary judgment
on his age discrimination claim. Accordingly, we REVERSE the judgment
of the district court and REMAND for proceedings consistent with this
opinion.
10