Dell, Inc. v. William Wise, Jr. , 424 S.W.3d 100 ( 2013 )

Opinion filed August 22, 2013
In The
Eleventh Court of Appeals
__________
No. 11-11-00106-CV
__________
DELL, INC., Appellant
V.
WILLIAM WISE, JR., Appellee
On Appeal from the 250th District Court
Travis County, Texas
Trial Court Cause No. D-1-GN-09-001942
OPINION
Because William Wise, Jr. believed that his age was a motivating factor
when Dell, Inc. fired him, he sued Dell for wrongful termination. After a jury trial,
the trial court entered a judgment upon the jury’s verdict. The trial court in its
judgment specified damages against Dell in the amount of $668,019, plus trial
court attorneys’ fees of $221,000 and appellate attorneys’ fees up to a maximum of
$25,000.
On appeal, Dell complains that there is no evidence to support the jury’s
finding that age was a motivating factor in Wise’s termination, that the evidence is
legally and factually insufficient to support the jury’s findings on economic and
compensatory damages, and that the trial court should not have submitted the issue
of future or “front” pay to the jury. We affirm.
I. Background Facts
Dell is an American multinational computer technology corporation. Dell
develops, sells, and services personal computer systems (including laptops and
desktops, monitors, printers, and other hardware); enterprise systems (including
servers, network switches, data storage devices, routers, and bridges); software;
peripherals; and other electronics. Wise was an eleven-year employee of Dell. He
worked as a technical sales representative on three sales teams that supported three
United States Air Force accounts that were part of the federal sales division.
A. Organization of Dell’s Sales Teams and Divisions
Dell’s sales teams are composed of four people performing various
functions. An account executive is Dell’s face-to-face contact with the customer.
The account executive travels, builds sales relationships, and—to use Dell’s
parlance—is “customer facing.” A systems consultant travels with the account
executive and provides technical support and assistance. The inside sales
representative is an office employee who has less technical knowledge than a
technical sales representative. The technical sales representative also works in the
office and has more sophisticated knowledge of Dell’s enterprise systems and
supports the whole team. Inside sales representatives and technical sales
representatives do not meet directly with customers in the field; they rely on the
account executive’s skills and the skills of the systems consultant as a part of the
overall success of the team.
2
Typically, the effort to sell Dell’s products begins when an account
executive, a systems consultant, or an inside sales representative sends a
customer’s quote request to a technical sales representative. After a technical sales
representative receives a customer quote request, he determines the products that
are needed to meet the request; prepares and generates quotes related to the
request; answers technical questions; follows up on quotes; and generally interacts
with the account executive, systems consultant, and inside sales representative in
an effort to obtain a purchase order from the proposed customer. If the customer
accepts the quote, the inside sales representative enters the purchase order, and the
order is placed in production. After the process is complete and after the customer
has paid for the order, the team members who worked on the sale, including the
technical sales representative, receive credit for the sale.
Dell had several sales divisions that operated under that format. Three of
those divisions were the educational sales division, the health care sales division,
and the federal sales division. Kelly Wilhelm worked for Dell as a regional inside
sales manager and, as such, was the leader of each of those three divisions. There
were two groups within the federal sales division that Wilhelm supervised. One of
those groups consisted of Wise and sixteen other technical sales representatives.
Andrew Napora, a technical service representative manager, actually managed that
group under Wilhelm’s direction. There were four technical sales representatives
in the other group in the federal division, and this group reported directly to
Wilhelm.
Wilhelm oversaw five Air Force accounts in Dell’s federal division. Wise
supported three of those five accounts; another technical sales representative, Nick
Kelley, supported the other two accounts. Each of the three Air Force sales teams
with which Wise worked in the federal sales division consisted of an account
executive, a systems consultant, an inside sales representative, and himself.
3
B. Technical Sales Representatives’ Performance and Evaluations
Dell had adopted a method by which it gauged performance of its sales
teams, including technical sales representatives like Wise. Dell’s finance depart-
ment personnel used two-year historical sales data to arrive at a sales quota for
various teams. Dell personnel then determined whether a team met that sales quota
and by what margin. That review comprised 66% of the total performance review.
The remainder of this segment of the evaluation of a technical sales representative
involved customer interaction, teamwork, communication, implementation of
strategic initiatives, and other skills.
Dell personnel tracked a technical sales representative’s performance based
60% on core enterprise product sold, 20% on the profit margin generated, and 20%
on the amount of peripherals involved in a particular sale. By the use of those
figures, Dell personnel arrived at an average blended quota attainment. Technical
sales representatives were rated “exceptional,” “valued,” or “below,” in part, based
on the number of quarters that they attained their quotas and exceeded blended
attainment goals, as well as other factors. On the other hand, their annual
performance reviews focused on the complete picture of quotas, attainments, and
other factors.
There are a number of reasons why technical sales representatives might
miss their sales quotas. Economic conditions, including military spending cycles,
could differ from Dell’s projections and negatively affect sales. Reduced end-of-
fiscal-year government spending for military appropriations would adversely affect
sales in Dell’s fourth quarter (November to January) because military budgets
would be depleted. Further, having new members on the team can make it “more
challenging” for a team to make sales and for technical sales representatives to
meet their quotas. Napora testified that the two-year historical data that Dell used
to set quotas could be incorrect, that the quotas could be set too high for sales
4
teams to meet those unrealistic quotas, and that that would not be the fault of the
sales team or its technical sales representative.
Napora agreed that a “group effort” is required for technical sales
representatives to meet their quotas. Napora testified that, when he was
employed as a technical sales representative for approximately twenty-nine
months, he had not always met his sales quotas. Napora acknowledged that there
are factors that are beyond one’s control that will affect adversely one’s ability to
meet quotas and that a failure to meet a quota does not automatically mean that
technical sales representatives are not doing their jobs.
Should technical sales representatives need to improve their performance,
Dell developed a procedure, operated through its human resources department, to
assist them. A technical service representative manager, like Napora, or a regional
inside sales manager, like Wilhelm, could, within certain guidelines, initiate a
Performance Improvement Plan. The plan was to be considered and used with
discretion in cases where the technical sales representative had (1) quarterly blends
below 90% for two or more consecutive quarters, (2) overall inconsistent
attainment: a history of hit and miss on quotas, (3) consistently missed strategic
initiatives, and (4) consistent quality issues (customer complaints). Dell’s goal was
to improve performance and foster a winning culture that increased sales.
Managers were to follow Dell guidelines and procedures in using
Performance Improvement Plans. First, managers were required to consider quota-
setting issues, external business conditions, backlog, and other reasons determined
by those in sales leadership before requiring that someone participate in a
Performance Improvement Plan. Second, Dell required that the department of
human resources validate all facts used to support the Performance Improvement
Plan and attend the Performance Improvement Plan meeting as a neutral party to
answer questions. This validation requirement was designed to confirm “whether
5
or not it would be appropriate to place the employee on a PIP.” Third,
Performance Improvement Plans had to be documented and delivered to an
employee within one week of the quarterly Performance Improvement Plan
meeting. Fourth, managers were to meet weekly with the employee and provide
written feedback on the employee’s Performance Improvement Plan progress.
Fifth, Dell’s own policies and procedures required that technical sales
representatives operating under a Performance Improvement Plan should be
allowed at least one full quarter in which to show improvement. Finally, general
managers, sales leaders, and human resources personnel were to review and
approve Performance Improvement Plans.
C. Wise’s Performance and Evaluations Compared to Other TSRs
Wise received a quota that was a “roll up” of the enterprise quota assigned to
his three teams. In 2007,1 Wise met or exceeded his sales quotas in two quarters,
and he had a blended attainment of 136.62%. Wise’s performance record included
an August 2006 customer e-mail in which the customer praised his
performance. Wise’s manager, Napora, wrote, “Bill has had an excellent year, he
has delivered on the required numbers, he won a Circle of Excellence award and
helped deliver a $10m deal to the Federal organization.” Napora testified that
Wise “did well” and did not have any customer satisfaction or quality-of-work
issues. For 2008, Napora recommended that Wise voice his opinions and focus
more on leadership skills. A few months later, Phyllis Pate, a Dell employee,
wrote to Napora that Wise stepped up to help when a team member was out and
the team was shorthanded. Shortly thereafter, Wilhelm wrote in an e-mail that Bill
had done awesome work and concurred that Wise “was a good TSR.”
1
Dell has a fiscal year that starts in February but is numbered a year ahead of the actual calendar
year. Fiscal Year 2007 would have begun in February 2006 and concluded in January 2007.
6
Although Wise always wanted to help his teams meet their quotas, it was
not always possible. Napora testified that technical sales representatives did not
always have control over their sales teams and whether they met their quotas.
Managers were the ones who assigned team members and accounts, and Napora
said that a new team member may not make his or her sales quota and that that
would affect the technical sales representative’s numbers as well. In 2008, Dell
added six new members to Wise’s teams.
Napora testified that the federal sales teams were “challenged” because the
Air Force customers were simply not buying what Dell had forecast. Wise
confirmed the existence of sales difficulties, stating that “everybody was having a
hard time selling at that point in time” and that high turnover had made it difficult
to meet his quota. Napora admitted that he could not recall another time when so
many technical sales representatives failed to make 100% of their quotas; that, in
setting the quotas, the financial department is sometimes wrong; and that
sometimes the failure to meet the quota is outside the employee’s control.
Napora completed Wise’s annual performance evaluation for 2008 and gave
him a rating of “below.” Wise had $40 million in sales and $10 million in profit in
2008. Wise’s blended attainment was 88.28%: his best quarter was 92%, while the
worst was 82%. Wise achieved these figures despite having two new account
executives, two new systems consultants, and two new inside sales representatives
join his account set. Napora rated him “below” because Wise did not attain more
than 90% average blended attainment and did not have at least one quarter at 90%
or better. But Napora did not mention new team members, unrealistic quotas, slow
sales, and turnover issues when he evaluated Wise in 2008. Further, in his
evaluation, Napora did not mention the recent praise Wise received from
customers and Dell employees. Because of the “below” rating, Napora put Wise
on a Performance Action Plan in January 2008.
7
D. Dell’s Disciplinary Action Against Wise
Because he and his teams actually exceeded their quarterly monetary goals
for enterprise products, Wise disagreed with Napora’s conclusion that Wise had
not met his quota in the first quarter of 2008. Napora acknowledged that, in the
first quarter of 2008, Wise’s actual sales numbers for his “revenue attainment”
were over $8 million—110.73% of th e qu ot a — wit h more than $1.9 million in
profit—102% of the quota. But Napora said that Wise fell short on his “software
and peripherals” component, which lowered the overall average to 88.85%.
However, Napora refused to provide Wise with data to verify this claim and failed
to list “software and peripherals” numbers on Wise’s Performance Action Plan.
Nevertheless, the evidence shows that Dell placed a requirement in Wise’s
Performance Action Plan that Wise was to sell an additional $2.2 million in the
fourth quarter of 2008 in order to achieve over 100% of his quarterly quota.
When Wise did not meet the Performance Action Plan quota, Napora put
Wise on a Performance Improvement Plan in March 2008. Napora also noted that
Wise had missed two quarters in 2007 and four in 2008 and that those facts
supported his decision to put Wise on a Performance Improvement Plan. Napora
failed to note that Wise had the highest technical sales representative quota
average in 2007. In addition, Napora managed sixteen other technical sales
representatives: six of them failed to attain their quotas, two had unknown values,
and five had worse numbers than Wise. But Wise was the only technical sales
representative whom Dell placed on a Performance Action and a
Performance Improvement Plan.
8
In Wise’s Performance Improvement Plan, Dell required improvement in six
areas in seven weeks:
1. Attain his midpoint core enterprise revenue number;
2. Carry two and one-half times his left-to-sell quota in pipeline
at all times in the quarter and one time in weighted;
3. Follow up his ten largest quotes from the previous week and
document in sales force;
4. Convert two acquisition customers in the quarter;
5. Grade out at 75 or better on the score card for Q1 and Q2;
6. Meet with Napora biweekly (twice a month) to review
progress on attainment and “how’s.”
Napora testified that the midpoint core enterprise revenue number is not a
definite figure because the company reports to Wall Street on a quarterly basis but
had moved to a semiannual plan. Wise testified that he thought he was close to
meeting the second requirement because he had developed almost $84 million
worth of business in his pipeline and expected $62 million of that to come
through. Wise said that, once “everybody got used to their account sets and we
started working as a team,” they would have “kept the ball rolling” and “we would
have done okay. . . . [I]t was just a matter of time.”
Wise also said that he followed up on quotes and worked with his team
members on closing those deals. But as a technical sales representative, Wise was
not in the field and could only use the telephone and e-mail to develop business.
More importantly, Dell had an acquisition team for this purpose, and account
executives and systems consultants were extremely protective of the leads they
developed. Napora admitted that it took a team effort of inside and outside
members to convert a customer and that he did not require his other technical
9
sales representatives to “actually convert” any customers; he “just wanted them to
try.” Finally, Wise and Napora scheduled the meeting dates as required in the
Performance Improvement Plan, but those meetings and follow-up did not occur.
Wise did not meet the sales quotas and other requirements in the Performance
Improvement Plan.
E. Dell’s Termination of Wise
Dell maintains that Napora and Wilhelm, each of whom was thirty-four
years old, fired the 61-year-old Wise for poor performance in meeting the
Performance Action Plan and Performance Improvement Plan requirements. After
Wise was fired, Kelley took over his accounts. Dell’s Involuntary Termination
Summary contained a statement that Dell fired Wise for failure to improve
performance under the Performance Action Plan and the Performance
Improvement Plan.
The record also shows that Wise was the oldest technical sales representative
who worked under Wilhelm’s supervision. The average age was thirty-seven.
Wise was a certified network engineer and a Dell file-server support technician
with a strong technical acumen and specialized knowledge of Dell’s products.
Wise, a United States Navy veteran and an eleven-year Dell employee with
extensive computer industry experience and training, received praise for his work
from coworkers and supervisors. Dell named Wise “TSR of the Quarter” in 2003
and 2006.
In 2006 and 2007, Dell awarded Wise its annual “Circle of Excellence”
award. Wise attained 136% of his annual goal in 2007, higher than any other
technical sales representative in his group. 2 As part of the Circle of Excellence
2
The “ESL/HCLS/FED” Group had 100 employees spread over its seven divisions.
10
awards, Dell sent Wise and his wife, Vicki, to Puerto Rico and Cabo San Lucas.3
Dell fired Wise twelve months after Dell awarded him the second Circle of
Excellence trip.
F. Wise’s Economic and Compensatory Damages
Dr. Thomas Glass, a certified public accountant with a doctorate in
economics, testified as an expert witness on Wise’s economic damages. Wise and
Vicki testified at trial on the issue of his compensatory damages. Dr. Glass
testified that back pay for fiscal years 2008–2010 totaled $249,911, and that front
pay for fiscal years 2010–2014 totaled $408,708. He did not deduct any post-
termination earnings because there were none. Wise and Vicki testified about the
psychological, physical, social, economic, and emotional toll he suffered because
of Dell’s conduct.
Wise testified that Dell fired him after he had returned from vacation, the
week of his daughter’s wedding, and that he could not believe Dell had treated him
this way; he felt “really bad” and was worried. Wise also testified that he had
suffered from stress and depression as well as loss of sleep and any desire to
participate in family or recreational activities. Wise said that he had not planned to
retire and that he worried constantly about how he would provide for his family
without salary, benefits, or job prospects. Vicki testified that, when Dell fired
Wise, it had a severe physical and emotional toll on him. She further testified that
she had to “walk on eggshells” because Wise did not want to do any family
activities, paced in his study late at night, and often cried when the issue of Dell’s
firing him was discussed.
II. Issues Presented
Dell complains in its first issue that there was no evidence upon which the
jury could find that age was a motivating factor in Wise’s termination because
3
Other Circle of Excellence winners also went on these two trips.
11
there was no direct evidence of age discrimination. Dell maintains that they
terminated Wise because he failed to meet sales quotas. Dell further argues that
Wise presented no evidence that he was treated differently from other sales
personnel outside his protected class or that he was replaced by a younger
employee. In addition, Dell argues that the evidence established that Wise was
treated more favorably than required by Dell policy. Dell maintains in its second
issue that the evidence is legally and factually insufficient to support the jury’s
award of damages awarded for back and front pay and that the finding cannot be
supported by the testimony of Wise’s expert, Dr. Glass. Dell also argues that the
award of damages for mental anguish is not supported by Wise’s and Vicki’s
testimony. Dell’s final issue is that the trial court erred when it submitted the
front-pay issue to the jury.
III. Standard of Review
When we conduct a legal sufficiency review, we review the evidence in a
light that tends to support the disputed finding and disregard all evidence and
inferences to the contrary. Bradford v. Vento, 48 S.W.3d 749, 754 (Tex. 2001).
We “assess all the evidence in the light most favorable to the prevailing party,
indulging every reasonable inference in favor of the judgment.” City of Austin
Police Dep’t v. Brown, 96 S.W.3d 588, 593 (Tex. App.—Austin 2002, pet. dism’d)
(citing Associated Indem. Corp. v. CAT Contracting, Inc., 964 S.W.2d 276, 285–86
(Tex. 1998)). If more than a scintilla of evidence supports the challenged finding,
the no-evidence challenge must fail. See Gen. Motors Corp. v. Sanchez, 997
S.W.2d 584, 588 (Tex. 1999); Wal-Mart Stores, Inc. v. Canchola, 121 S.W.3d 735,
739 (Tex. 2003).
For a factual sufficiency review, we examine all the evidence in the record,
both for and against the lower court’s findings. Ortiz v. Jones, 917 S.W.2d 770,
772 (Tex. 1996). We must consider and weigh all such evidence in a neutral light.
12
Golden Eagle Archery, Inc. v. Jackson, 116 S.W.3d 757, 761 (Tex. 2003). But
“[j]urors are the sole judges of the credibility of the witnesses and the weight to
give their testimony. They may choose to believe one witness and disbelieve
another.” City of Keller v. Wilson, 168 S.W.3d 802, 819 (Tex. 2005) (footnotes
omitted). If the evidence at trial would enable reasonable minds to differ in their
conclusions, we do not substitute our judgment, so long as the evidence falls within
a zone of reasonable disagreement. Id. at 822. In considering and weighing all of
the evidence, we will set aside the judgment only if it is so contrary to the
overwhelming weight of the evidence as to be clearly wrong and unjust. Wal-Mart
Stores, Inc. v. Davis, 979 S.W.2d 30, 35 (Tex. App.—Austin 1998, pet. denied)
(citing Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986)).
IV. Discussion and Analysis
Dell argues that there was no evidence to support the jury’s conclusion that
age discrimination was a “motivating factor” in Wise’s termination. We disagree.
Texas courts recognize two methods of proof in discriminatory treatment
cases. Mission Consol. Indep. Sch. Dist. v. Garcia, 372 S.W.3d 629, 634 (Tex.
2012) (citing Quantum Chem. Corp. v. Toennies, 47 S.W.3d 473, 476 (Tex. 2001)).
The first is proof by direct evidence; the second is proof by indirect or pretext
evidence. Id.; see McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802 (1973).
Direct evidence, if believed, proves the fact of discriminatory animus without
inference or presumption. Sandstad v. CB Richard Ellis, Inc., 309 F.3d 893, 897
(5th Cir. 2002). But proof through direct evidence is difficult. U.S. Postal Serv.
Bd. of Governors v. Aikens, 460 U.S. 711, 716 (1983) (seldom is there an
eyewitness to employer’s mental processes evincing discriminatory intent); see
also Mission Consol., 372 S.W.3d at 634 (covert motives make direct forbidden
animus “hard to come by”). When there is no direct evidence, discrimination can
13
be proven indirectly by the “pretext” method. See McDonnell Douglas, 411 U.S.
at 802–05.
When a case has not been fully tried on the merits, we apply the burden-
shifting analysis established by the United States Supreme Court. Canchola, 121
S.W.3d at 739 (citing Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133,
142–43 (2000)). When a case has been fully tried on the merits, as in this case, we
do not engage in the burden-shifting analysis but, instead, determine whether the
evidence is legally sufficient to support the jury’s ultimate finding. Id. At trial,
Wise had the burden to prove that his age was a motivating factor in Dell’s
decision to terminate him. Id.
A. Sufficiency of Evidence of “Age as Motivating Factor in Wise’s
Termination”
Dell argues that the evidence is insufficient to establish pretext through a
showing of disparate treatment. Dell contends that there is no similarly situated
employee for comparison because no one else missed six consecutive quotas.
Wise contends that there were similarly situated employees because Wise would
not have missed as many quotas if Napora had properly considered whether the
quota was reasonable.
1. Similarly Situated Employees
“Similarly situated” means that the employees’ circumstances were
comparable in all material respects, including similar standards, supervisors, and
conduct. Ysleta Indep. Sch. Dist. v. Monarrez, 177 S.W.3d 915, 917 (Tex. 2005).
To prove discrimination based on disparate discipline, the misconduct of both
disciplined and undisciplined employees “must be of ‘comparable seriousness.’”
AutoZone, Inc. v. Reyes, 272 S.W.3d 588, 594 (Tex. 2008) (quoting Monarrez, 177
S.W.3d at 917).
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Napora testified at trial that he placed Wise on a Performance Improvement
Plan because Wise had not “hit his quota more than two times in the last eight
quarters.” The last eight quarters included the four quarters in 2007 and the four
quarters in 2008. Wise was the highest performing technical sales representative in
all of 2007. In fact, because of those numbers in 2007, Wise was given the Circle
of Excellence Award and an “all-expense-paid” vacation. Napora testified that
Wise’s numbers in 2007 were “really good” and agreed that his numbers that year
were “not something to be counted against him.” However, Wise could not miss
six consecutive quotas unless Napora included part of 2007 in his calculation.
Moreover, when Napora placed Wise on a Performance Improvement Plan for the
fourth quarter of 2008, he required Wise to sell an additional $2.2 million in order
to reach his quota. The jury could have concluded that this contributed to the
reason that Wise missed his quota that quarter.
Before requiring a Performance Improvement Plan, Dell’s internal policies
require managers to consider “quota setting issues, external business conditions,
backlog and other reasons determined by sales leadership.” When conducting
annual reviews, the managers are to consider the number of quarters that an
employee missed his quota as well as the average blended quota attainment for the
year. Dell’s analysts used historical sales data for the prior two years to arrive at
the quota.
Trial testimony showed that the Air Force must spend the remainder of its
budget at the end of the year or else risk losing that amount from its budget during
the following year. The fourth quarter of the federal government’s fiscal year is
the third quarter of Dell’s fiscal year; the Air Force traditionally spends more of its
budget during Dell’s third quarter. For example, in 2007, Wise’s sales percentages
were 69.81% in the first quarter, 159.16% in the second quarter, 247.41% in the
third quarter, and 70.09% in the fourth quarter.
15
Although Wise did not reach 100% during two quarters in 2007, he still had
the highest percentage, at 136.62%, of any other technical sales representative,
including four technical sales representatives who had only missed one quarterly
quota. And, if the jury concluded that Wise would not have missed his fourth-
quarter quota each year had it been properly adjusted, Wise would have only
missed five of his last ten quarters at Dell. During that same period, another
technical sales representative missed five of those ten quarters, while yet another
missed six.4 This is some evidence that would allow the jury to conclude that, if
Wise’s quota had been adjusted to conform to the spending habits of the Air Force,
he may not have missed six consecutive quarters.
In conducting annual reviews, supervisors first rate the employee’s
performance based on the number of quarters that quota was attained. An
employee received a rating of exceptional, valued, or below expectation,
depending on the frequency that the quarterly quota was missed. Attainment of
less than 100% constitutes a “missed” quota. If the employee attains one out of
four, he rates “below average.” Two out of four quotas rates as “valued,” and four
out of four rates as “exceptional.” Then the supervisor must rate performance
based on average blended attainment. The employee would receive another rating
of exceptional, valued, or below expectation, depending on the percentage of
attainment. Attaining more than 105% warrants an exceptional rating, earning
between 90% and 105% warrants a valued rating, and earning below 90% warrants
a rating of below expectation.
Even though Wise missed two out of four quarters in 2007, he nonetheless
had the highest average blended attainment for the year. The same is true in 2006.
Although Wise was the only technical sales representative who missed all four
quarters in 2008, he did not have the lowest annual blended attainment for the year.
4
Scott Hargrove missed five out of ten. Jason Lozada missed six out of ten.
16
This is some evidence that Napora failed to consider, in accordance with Dell’s
internal policies, whether the quota was realistic or whether Wise’s failure should
be excused in light of factors outside his control. Therefore, the jury could have
concluded that “missed quarters” were not the benchmark for determining whether
other employees were similarly situated.
2. Disparate Treatment
Dell contends that, to establish pretext, there must be evidence of a nexus
between the failure to follow procedures and the decision to terminate the
employee. Dell further contends that any failure to follow internal policies
amounted to mere sloppiness because there was no evidence that “the policies were
not followed due to Wise’s age.” However, when establishing that Dell’s reason
for terminating Wise was pretext, a plaintiff is not required to provide direct
evidence that the failure was “due to” age. A plaintiff can show that the employer
followed policies in a similar situation and failed to here, or vice versa. See
Toennies, 47 S.W.3d 473. The question is whether the failure to follow policies
indicates that the reason for terminating the employee was a pretext for
discriminatory intent. See McDonnell Douglas, 411 U.S. at 802.
The evidence shows that there were undisciplined employees with similar
numbers as Wise. Catherine Sims and David Kell both missed three consecutive
quarterly quotas, but they were never disciplined. Jason Lozada’s attainment was
inconsistent; he missed his quota in the first quarter of 2009, two quarters in 2008,
and two quarters in 2007. Although Kell missed his quota during three out of four
quarters in 2007 and had an annual blended attainment of 78.05%, he received a
valued rating. Yet, when Wise missed his quota in four quarters the following
year, with a higher annual blended attainment of 88.28%, he was rated below
expectations. Scott Hargrove also missed his quota during three of the quarters in
17
2008, but Napora testified that Wise was the only employee that he had ever
disciplined or fired.
In addition, evidence that an employer is pleased with an employee’s work
performance supports a finding of pretext when that evidence contradicts the
reason given by the employer of poor performance. In Toennies, the supreme court
reached such a conclusion based on the testimony of a senior project manager that
the employee was diligent, very competent, and an above-average engineer and
that he rated the employee’s knowledge of the profession as a ten on a scale of one
to ten. 47 S.W.3d at 481. Additionally, several e-mails from coworkers were
admitted at trial that praised the employee’s performance. Id.
Here, e-mails from Wise’s coworkers and supervisors praised his effort and
performance during the alleged period of poor performance. Wise was the highest
performing technical sales representative in 2006 and 2007 and was given the
Circle of Excellence award both years. When conducting Wise’s annual review in
2007, Napora praised Wise as having had “an excellent year,” and the only areas
Napora identified for development were “demonstrating more leadership” and the
“acquisition of new business.” Napora also noted in his 2007 review that Wise had
won the “Circle of Excellence Award and helped deliver a $10 [million] deal to the
Federal organization.” Furthermore, Napora admitted that Wise had no customer
service or quality issues, and Wilhelm said that Wise had shown “[a]wesome
work” and “leadership” and was a “good TSR.” But, when Napora was asked to
name the worst technical sales representative that he ever managed, Napora said,
“Mr. Bill Wise.” This is more than a scintilla of evidence that Dell regarded
Wise’s job performance as satisfactory, which contradicts the company’s argument
that he was fired for poor performance. “Proving the employer’s stated reason for
the firing is pretext is ordinarily sufficient to permit the trier of fact to find that the
employer was actually motivated by discrimination.” Id. at 481–82.
18
The evidence is sufficient to support the conclusion that Dell treated Wise
differently than its younger, similarly situated employees. Moreover, there is some
evidence that Dell regarded Wise’s performance as satisfactory during the period
of Wise’s alleged poor performance. Consequently, we hold that a rational jury
could have inferred that age was a motivating factor in Dell’s decision to fire Wise.
We overrule Dell’s first issue.
B. Sufficiency of Evidence on Wise’s Economic Damages
Dell argues that the evidence is legally and factually insufficient to award
Wise economic damages because the opinion of his expert witness on the issue is
unreliable and inadmissible. Dell argues that the expert ignored key facts, that he
assumed facts directly contrary to known facts when he formulated his opinions,
and that he made impermissible assumptions concerning Dell’s compensation
systems, including annual wage increases, Wise’s length of future employment,
Wise’s projected 401(k) contributions, and Wise’s future sales performance.
We review the trial court’s decision to admit expert testimony for an abuse
of discretion. Gammill v. Jack Williams Chevrolet, Inc., 972 S.W.2d 713, 727
(Tex. 1998); City of Brownsville v. Alvarado, 897 S.W.2d 750, 753 (Tex. 1995)
(abuse of discretion standard on expert testimony).
1. Expert Witness Qualification
Rule 702 of the Texas Rules of Evidence requires that an expert must be
properly qualified and that his opinion must be relevant and based upon a reliable
foundation.5 Trial courts must determine that the expert witness truly has
scientific, technical, or other specialized knowledge or expertise concerning the
5
See TEX. R. EVID. 702; Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 592–93 (1993)
(expert testimony on scientific knowledge must be helpful to factfinder and valid and reliable scientific
testimony); Gammill, 972 S.W.2d at 719–28 (expert must be qualified and reliability standard applies to
all expert testimony); E.I. du Pont de Nemours & Co. v. Robinson, 923 S.W.2d 549, 553 (Tex. 1995)
(expert witness must be qualified and provide reliable opinions).
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actual subject matter about which he is offering an opinion. Gammill, 972 S.W.2d
at 719. Once qualified, an expert must give relevant and reliable opinions. E.I. du
Pont de Nemours & Co. v. Robinson, 923 S.W.2d 549, 556 (Tex. 1995).
Relevance under Rule 702 of the Texas Rules of Evidence requires that expert
testimony be sufficiently tied to the facts of the case and that it assist the jury in
resolving a factual dispute. Id.
Reliability requires a sound foundation for nonscientific evidence, and trial
courts must decide whether there is an “analytical gap” between an expert’s
opinions and the basis for them. Gammill, 972 S.W.2d at 726 (focusing on
experience and knowledge in field for reliability inquiry for nonscientific
evidence); Taylor v. Am. Fabritech, Inc., 132 S.W.3d 613, 619 (Tex. App.—
Houston [14th Dist.] 2004, pet. denied) (focusing on expert’s experience,
education, and literature review in field for reliability analysis of opinion); see also
Exxon Pipeline Co. v. Zwahr, 88 S.W.3d 623, 629 (Tex. 2002) (reliability focuses
on principles, research, and methodology underlying an expert’s conclusions). We
do not determine if the expert’s opinions are correct but, instead, determine only
whether the analysis used to reach those opinions is reliable. Zwahr, 88 S.W.3d at
629 (citing Gammill, 972 S.W.2d at 728).
2. Testimony of Wise’s Expert Witness, Dr. Glass
Wise called Dr. Glass to testify as an expert on economic damages.
Dr. Glass, a 45-year certified public accountant with a bachelor of arts in business
administration, a master’s degree in public accounting, and a doctorate in
economics from the University of Texas at Austin, testified at trial on the issues of
front-pay and back-pay damages. Dr. Glass’s CPA practice employs twenty
people who provide clients with business advice, entity creation and accounting
support, tax preparation, and audit services. Dr. Glass has worked on more than
300 cases, including personal injury, lost profits, lost compensation, and wrongful
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termination cases. He has prepared reports in approximately thirty to forty cases
that included a dozen or more lost compensation reports, and he has testified, in
deposition or at trial, in more than sixty cases.
Dr. Glass testified that, in this case, he reviewed Wise’s age, education,
work history, earnings history, life expectancy, employment benefits, income tax
returns, and applicable rates as well as Social Security Administration wage
increase projections and discount rates from five-year Treasury obligations to
arrive at his opinion. Dr. Glass combined Wise’s annual gross pay from 2003 to
2007 and calculated an average of $107,546, to which he added the cost of health
insurance and a 3% 401(k) match by Dell. Dr. Glass thought it appropriate to
include the 401(k) contribution because Wise had made those contributions in the
past, and Wise testified that he would have continued to do so in the future.
Dr. Glass used a five-year period instead of the two highest years of 2005
and 2006 because he believed that the format was a more reliable standard than
speculating on a future plan or using only the highest salary years. Dr. Glass
viewed the latter as inequitable because it “really skewed the average upwards.”
Dr. Glass said, “History, I think, is a better measure than -- than the many
unknown factors that you have that you’re trying to use this sales plan to figure out
what his future compensation is gonna be.” Dr. Glass stated that, in his experience
and training, Wise’s compensation would have been stable and comparable to the
average he calculated. Napora testified that all technical sales representatives
receive standard benefits like health, dental, vision, and 401(k) retirement accounts
and that his own salary had never decreased in his thirteen years at Dell.
Dr. Glass increased gross pay each year by a projected 3.9%, using the
Social Security Administration rate for long-term wage increase, which he relies
on in almost every case. He set July 2014 as Wise’s expected retirement date,
based on standard work-life expectancy tables and Wise’s testimony that he would
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have worked until after his son finished college. Dr. Glass deducted income tax
(using an average tax rate of 13.2%) from projected annual salary and reduced the
figure to present value using a 1.8% discount rate.
Dr. Glass used the above method to determine both “front pay” and “back
pay.” Front pay is lost compensation from trial forward until a reasonable
retirement age, which also is a fact question for the jury. Hansard v. Pepsi–Cola
Metro. Bottling Co., 865 F.2d 1461, 1469 (5th Cir.1989); Davis, 979 S.W.2d at 45
(citing Hansard, 865 F.2d at 1469); Borg-Warner Protective Servs. Corp. v.
Flores, 955 S.W.2d 861, 867 (Tex. App.—Corpus Christi 1997, no pet.); City of
Austin v. Gifford, 824 S.W.2d 735, 743–44 (Tex. App.—Austin 1992, no writ).
The amount of Wise’s loss (front pay and back pay) must be shown by competent
evidence with reasonable certainty. Holt Atherton Indus., Inc. v. Heine, 835
S.W.2d 80, 84 (Tex. 1992). “Back pay” is defined as those lost wages that accrue
from the date of termination through trial. United Servs. Auto. Ass’n v. Brite, 215
S.W.3d 400, 401 (Tex. 2007); Stanley Stores, Inc. v. Chavana, 909 S.W.2d 554,
563 (Tex. App.—Corpus Christi 1995, writ denied).
Front-pay calculations are inherently speculative because of their
prospective nature and are arrived at through intelligent guesswork. See Jackson v.
Host Int’l, Inc., 426 F. App’x 215, 223 (5th Cir. 2011); W. Telemarketing Corp.
Outbound v. McClure, 225 S.W.3d 658, 667 (Tex. App.—El Paso 2006, pet.
granted, judgm’t vacated w.r.m.). A trial court is afforded wide latitude in
determining front-pay issues. Sellers v. Delgado Coll., 781 F.2d 503, 505 (5th Cir.
1986). We will uphold a jury award where there is some evidence that a
substantial loss occurred and there is “a reasonable basis for estimating the amount
of the loss.” Carrow v. Bayliner Marine Corp., 781 S.W.2d 691, 695 (Tex. App.—
Austin 1989, no writ); see also Tex. Dep’t of Pub. Safety v. Williams, No. 03-08-
00466-CV, 2010 WL 797145, at *7 n.13 (Tex. App.—Austin Feb. 19, 2010, no
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pet.) (mem. op.). Absent evidence to the contrary, it should be assumed that an
illegally discharged employee would have continued working for the employer
until retirement. See Gibson v. Mohawk Rubber Co., 695 F.2d 1093, 1101 n.8 (8th
Cir. 1982).
Based upon the method that he outlined, Dr. Glass testified that back pay for
fiscal years 2008–2010 totaled $249,911 and that front pay for fiscal years 2010–
2014 totaled $408,708. He did not deduct any post-termination earnings because
there were none.
We hold that Dr. Glass articulated a reliable and well-accepted method for
evaluating back pay and front pay. Williams, 2010 WL 797145, at *7 n.13, *10
(reliable expert opinion for calculating back pay and front pay based on analysis of
payroll records); Taylor, 132 S.W.3d at 622 n.23 (reliable expert calculation of
future compensation based on past earnings and use of government statistics and
life expectancy tables, discounted for present value).
In Williams, the Third Court of Appeals affirmed jury awards of back pay
and front pay based on expert opinions evaluating past payroll records. Williams,
2010 WL 797145, at *7 n.13, *10. The Eighth Court of Appeals reached a similar
conclusion that front-pay award was calculable by averaging plaintiff’s past
earnings even though hours worked, incentives, premiums, and tenure pay varied.
W. Telemarketing, 225 S.W.3d at 667–68. Other courts have upheld similar
awards. Osborn v. Computer Sci. Corp., No. A-04-CA-158-LY, 2005 WL
5881949, at *3–4 (W.D. Tex. Oct. 20, 2005) (order) (expert’s calculation of
saleswoman’s pay and past commissions discounted for present value was
reliable); Taylor, 132 S.W.3d at 622 n.23 (expert calculation of future
compensation based on past earnings in combination with government statistics
and life expectancy tables, discounted for present value was reliable). In Little v.
Technical Specialty Products, LLC, No. 4:11-CV-00717, 2013 WL 1628390, at *5
23
(E.D. Tex. Apr. 15, 2013), an expert’s methodology was reliable because the
expert used pay stubs and timesheets to calculate weekly pay, used the average
weekly pay for the weeks lost after discharge, and adjusted the amounts for life
expectancy. Although prospective in nature, which involves some uncertainty, Dr.
Glass’s opinions provided “a reasonable expectation” of what Wise would have
earned, had he not been fired, using a well-accepted valuation method.
3. Wise’s Compensatory “Mental Anguish” Damages
Dell has challenged the “mental anguish” element of the jury’s award of
compensatory damages, claiming that Wise’s and Vicki’s testimony is no evidence
under Parkway Co. v. Woodruff, 901 S.W.2d 434 (Tex. 1995). Dell did not object
to the submission of Jury Question Number Three, element “c,” a broad-form
submission that read “Compensatory damages in the past” and included “pain and
suffering, mental anguish, inconvenience and loss [of] enjoyment of life” followed
by the word “Answer” with a corresponding blank for the jury to enter an amount.
Dell has not challenged the other elements: “pain and suffering, inconvenience and
loss [of] enjoyment of life.” We are prohibited from reviewing a no-evidence issue
on only one element of a multielement damage submission; we will affirm the
damage award in a broad-form submission if any one element is supported by the
evidence. Thomas v. Oldham, 895 S.W.2d 352, 359–60 (Tex. 1995). Therefore,
we reject Dell’s legal sufficiency challenge, but will review the aggregate
compensatory damages evidence for sufficiency.
A plaintiff must have evidence of the nature, duration and severity of the
mental anguish and evidentiary support for the amount of damages. Bentley v.
Bunton, 94 S.W.3d 561, 605–07 (Tex. 2002); Parkway, 901 S.W.2d at 444–45. In
Parkway, there was no evidence of the nature, duration, or severity of the
plaintiff’s mental anguish and no circumstantial evidence of the incident that
allegedly caused it. Parkway, 901 S.W.2d at 444–45. In Bentley, the court held
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that there was no evidence to support an award of $7 million for mental anguish
damages, which was forty times more than the amount of damages awarded for
damages to reputation. Bentley, 94 S.W.3d at 605–07.
Wise’s evidentiary proof is more substantial than that in Parkway and
exceeds the proof held legally sufficient in Quinn v. Nafta Traders, Inc., 360
S.W.3d 713, 724 (Tex. App.—Dallas 2012, pet. denied). In Quinn, the court held
that sufficient evidence was presented on compensable mental anguish when
plaintiff described that (1) her termination weighed heavily on her mind; (2) she
had tremendous anxiety and was depressed; (3) she had trouble sleeping; and
(4) she took medicine for her symptoms, which lasted for about six months. 360
S.W.3d at 724.
The jury heard Wise testify that he “felt really bad” when Dell fired him
after eleven years of service and that it had an immediate emotional toll on him and
his family because, among other things, it happened the same week as his
daughter’s wedding. Wise said that he was in shock and could not believe that
Dell would not let him get his personal items from his desk. Wise had not planned
to retire and wanted to work until his son finished college. He applied for jobs, but
worried Dell’s “poor performer” label hurt him. He had no job offers, except for a
joint venture opportunity with no pay, and this circumstance added to his stress,
anxiety, and depression. As a result, Wise said that he worried daily about how he
could fulfill “his purpose in life”: to provide for his family.
Wise and Vicki also testified that the stress to find a job and take care of
finances and health care expenses adversely affected his sleep, appetite, health,
relationships, moods, and activities. Wise testified that he lost sleep, suffered from
depression and took medication, lost forty-four pounds, and frequently got angry
and lost his temper when talking to Vicki. Vicki explained that it was like walking
on “eggshells”; that, although uncommon before Dell fired him, Wise paced his
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study at night and could not sleep; and that the subject of his firing often led him to
tears. He had once been a loving and caring family man, but now had no interest
in doing anything. Wise also testified that he had stopped playing in his band after
being a part of it for more than thirty-two years. The jury heard sufficient evidence
of the nature, duration, and severity of Wise’s mental anguish.
The amount awarded, $44,400 for past compensatory damages, which
included mental anguish as one element in a multielement broad-form submission,
and zero for future compensatory damages, was reasonable in light of Wise’s
testimony that he had applied for more than sixty jobs but still remained
unemployed and Wise’s and Vicki’s testimony detailing his health problems. The
amount that the jury awarded to Wise was modest and not at all like the
unreasonable amount in Bentley. 94 S.W.3d at 605–07. We overrule Dell’s second
issue.
C. Submission of Front Pay to Jury
Dell objected to the trial court’s submission of the front-pay question to the
jury because it argued that only the trial court can award front pay. Although the
trial court must decide whether it is equitable for Wise to recover front pay, the
jury may determine the amount. Davis, 979 S.W.2d at 45 (citing Hansard, 865
F.2d at 1470); see also Jackson, 426 F. App’x at 221 (trial court has discretion to
determine if front pay is warranted and submit that fact question to jury); Williams,
2010 WL 797145, at *8–10 (affirming jury’s award of front pay). To recover front
pay, a plaintiff must show that reinstatement is not feasible as a remedy and must
also show mitigation of damages. Davis, 979 S.W.2d at 45 (citing Hansard, 865
F.2d at 1469). Dell stipulated at trial that it would not reinstate Wise. As we
previously explained, Dr. Glass’s testimony was admissible because it was relevant
and reliable; thus, the trial court properly submitted the front-pay question to the
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jury. The jury heard sufficient evidence of Dr. Glass’s front-pay calculations and
Wise’s attempt to find comparable employment. We overrule Dell’s final issue.
V. Conclusion
We have considered the evidence in the light most favorable to the verdict,
and we hold that there is more than a scintilla of evidence to support a jury finding
that age was a motivating factor in Wise’s termination where (1) other technical
sales representatives, who had missed sales quotas, were neither disciplined nor
fired and (2) Dell failed to follow its own procedures for evaluating and
disciplining Wise. Further, we have considered all of the evidence in a neutral
light, and we hold that the evidence is not so contrary to the overwhelming weight
of the evidence as to be clearly wrong and unjust because reasonable and rational
jurors could have believed Dr. Glass’s, Wise’s, and Vicki’s testimony. Because
damages were disputed, we defer to the jury’s credibility determinations, which
were not so contrary to the overwhelming weight of the evidence as to be clearly
wrong and unjust. Finally, the trial court properly submitted the front-pay question
to the jury because Dell stipulated that Wise’s reinstatement was not feasible.
VI. This Court’s Ruling
We affirm the judgment of the trial court.
MIKE WILLSON
JUSTICE
August 22, 2013
Panel consists of: Wright, C.J.,
McCall, J., and Willson, J.
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