Shapiro v. Kelly ( 1998 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
______________________
No. 97-30183
______________________
LEO SHAPIRO,
Plaintiff - Appellee,
versus
JOHN J. KELLY; ET AL,
Defendants,
TEXTRON INCORPORATED,
Defendant - Appellant.
_________________
Appeal from the United States District Court
for the Eastern District of Louisiana
(95-CV-4083)
_________________
April 1, 1998
Before HIGGINBOTHAM and STEWART, Circuit Judges, and WALTER,* District Judge.
PER CURIAM:**
At trial in the United States District Court for the Eastern District of Louisiana, a jury
returned a unanimous verdict in favor of Plaintiff-Appellee Leo Shapiro ("Shapiro") and against
*
District Judge of the Western District of Louisiana, sitting by designation.
**
Pursuant to 5TH CIR. R. 47.5, the Court has determined that this opinion should not be published and
is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
Defendant-Appellant Textron, Inc. ("Textron"), on Shapiro’s Age Discrimination in Employment
Act ("ADEA") claim of discriminatory termination based upon age.
Textron appeals. Finding no merit in Textron’s arguments, we affirm.
I.
FACTS AND PROCEEDINGS
Shapiro was laid off by Textron, effective January 31, 1995, when Shapiro was seventy-
three (73) years of age. Shapiro began working for Textron in New Orleans in March 1986, as a
business manager, with what is now Textron’s Marine and Land Systems Division. Shapiro was
sixty-four (64) years old at that time. In February 1987, Shapiro was promoted to the position of
Director of Program Planning and Control. It is agreed that Shapiro was a highly qualified
employee and that his job performance was excellent. He received salary increases and bonuses
throughout his tenure at Textron.
During 1987, James Kratzer ("Kratzer"), Textron’s Executive Vice President of Finance,
became Shapiro’s immediate supervisor. In a 1991 performance appraisal of Shapiro, Kratzer
wrote: "Mr. Shapiro’s job performance certainly indicates that he is promotable to a higher level
position in program management, however, his age is a factor in this consideration. It is noted
that considering the age factor, Mr. Shapiro’s longer-term opportunities for promotion are
somewhat limited." Further, Kratzer wrote: "There are no qualified replacements within the
organization and the Division is currently searching for a manager who can be developed to
succeed Mr. Shapiro." At that time Shapiro had indicated no desire to retire.
In his May 1992 appraisal of Shapiro’s performance, Kratzer wrote: "Would desire that
Mr. Shapiro accelerate the development of a qualified replacement."
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In January 1994, Kratzer offered Robert Akroyd ("Akroyd"), eighteen (18) years younger
than Shapiro, a position in Shapiro’s department. In April 1994, Textron’s Marine Systems
Division, in which Shapiro was employed, underwent a merger with Textron’s Cadillac Gage
Division.
In June 1994, Kratzer began asking Shapiro about his retirement plans and began speaking
about Kratzer’s need to find a replacement for Shapiro. Despite Shapiro’s insistence that he told
Kratzer that he had no plans to retire, in a September 1994 performance appraisal of Shapiro,
Kratzer suggested that "Mr. Shapiro may be near retirement and would not be considered for
further promotion." Further, the appraisal suggested that given that Shapiro might be near
retirement, no developmental plans were identified for him.
In mid-1994, the combat vehicle unit of Textron’s Cadillac Gage Division was realigned
for production in New Orleans; as a result, Textron reassigned and transferred a number of
personnel. Akroyd had served as Cadillac Gage Division’s Chief Financial Officer, vice-president,
and Controller prior to the merger. Textron claims that in June 1994, it demoted Akroyd--who
was then fifty-four (54) years old--and transferred him to New Orleans, where he assumed the
position of Director of Financial Services of the newly merged division, now known as Textron
Marine and Land Systems (hereinafter, "Textron"). Akroyd’s new position was at the same pay
rate and executive grade level as Shapiro.
From June 1994 through November 1994, Akroyd and Shapiro both reported directly to
Kratzer. In late 1994, Textron President John Kelly ("Kelly") made personnel changes, including
a reduction in the number of people reporting to Kratzer. As of December 1, 1994, although
Shapiro retained his position as Director of Program Planning and Control, he began reporting to
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Akroyd.
Shortly after the merger Textron underwent a series of "reduction-in-force" and in early
January 1995, Kelly and Kratzer advised Textron’s Executive Director of Human Resources,
Thomas Corcoran ("Corcoran"), of the decision to layoff Shapiro. Corcoran analyzed the layoff
lists for possible adverse impact on protected groups and for compliance with Textron’s policies,
found no adverse impact on protected groups, and confirmed that the layoff complied with
Textron’s policies.
On January 23, 1995, Kratzer notified Shapiro that he would be laid off, effective January
31, 1995. At the time of the lay off, Shapiro (then seventy-three (73) years old) had for two years
drawn a pension from Textron and two former employers, in addition to his salary.
Shapiro was the only Textron employee terminated on January 23, 1995. Corcoran
admitted that during 1995 there were "individual" terminations at Textron which were not part of
the reduction in force. Corcoran was asked whether the language of Kratzer’s September 1994
performance appraisal of Shapiro was an indication of age discrimination by Textron, and
admitted that "it depends on how you interpret it." Responding to the Equal Employment
Opportunity Commission’s ("EEOC") request for information regarding this action, Corcoran
denied any discrimination on Textron’s part regarding the layoff of Shapiro; however, Corcoran
did not send a copy of the September 1994 performance appraisal to the EEOC. In Textron’s
response to the EEOC, Corcoran reported that Akroyd replaced Shapiro and assumed all of
Shapiro’s job duties.
Textron maintains that there were legitimate business reasons for laying off Shapiro,
including the loss of a contract with the government of Kuwait and a projected drop in 1995 sales.
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Textron asserts that after his layoff, Shapiro waited approximately four months before he
forwarded his resume! to prospective employers. Shapiro maintains that he began a diligent job
search after he was notified that he would be fired; that he updated his resume!, monitored
newspapers, contacted acquaintances within the industry, registered with headhunters and
employment agencies, sent out letters and resume!s to potential employers, and hired a job
rehabilitation specialist to help him apply for additional job positions. In affidavit, Textron’s
rehabilitation specialist, Jennifer Palmer, opined that Shapiro’s job search was flawed due to its
untimeliness and due to the lack of quantity and quality of contacts whom Shapiro approached.
Nathaniel Fentress, Shapiro’s rehabilitation specialist, opined that Shapiro’s search for
employment was reasonable, due to the lack of opportunities for someone his age.
Shapiro filed suit in Louisiana state court against Kelly, Kratzer, and Textron. Textron
subsequently removed the action to the United States District Court for the Eastern District of
Louisiana. Kelly and Kratzer were dismissed from the case in February 1996.
At trial, at the close of Shapiro’s evidence, Textron unsuccessfully moved for judgment as
a matter of law. Textron renewed its motion for judgment as a matter of law at the close of all of
the evidence, and in response, the district court dismissed Shapiro’s failure to promote, failure to
rehire, and retaliation claims. The jury then returned a unanimous verdict in Shapiro’s favor on
the discriminatory termination claim and awarded him back pay of $160,239.48.
After trial, Textron filed a renewed motion for judgment as a matter of law or,
alternatively, for a new trial, and Shapiro filed a memorandum seeking reinstatement or,
alternatively, front pay if the district court held that reinstatement was not feasible. Shapiro also
filed an application for attorney’s fees and costs. The district court denied Textron’s post-trial
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motions and entered judgment in favor of Shapiro in the amount of $398,954.93, including
attorney’s fees in the amount of $60,313.70, back pay in the amount of $160,239.48, and front
pay in the amount of $178,401.75, based on Shapiro’s work life expectancy of 1.39 years. The
parties stipulated to the amount of costs ($5,907.91) to be awarded Shapiro.
Textron appeals the district court’s decision: (1) denying Textron’s motion for judgment
as a matter of law on Shapiro’s discriminatory termination claim; (2) in not presenting a special
interrogatory to the jury concerning Textron’s mitigation of damages defense; and (3) awarding
front pay.
II.
ANALYSIS
A. The Record Contains Sufficient Evidence for a Reasonable Jury to Conclude Shapiro Was
Laid Off Because of His Age
1. Standard of Review
The standard of review applicable to factual issues in an age discrimination case is
determined by whether motions for judgment as a matter of law were filed in compliance with
Fed. R. Civ. P. 50. When a pre-verdict Rule 50(a) Motion for a Judgment as a Matter of Law and
a post-verdict 50(b) Renewed Motion for Judgment are not filed in compliance with the Federal
Rules, the appellant waives the right to argue the "insufficiency of the evidence" standard, and the
standard of review is "plain error." Cone v. West Virginia Pulp & Paper Co., 330 U.S. 212, 217-
18, 67 S. Ct. 752, 755-56 (1947).
Rule 50(b) reads, in part: "The movant may renew its request for judgment as a matter of
law by filing a motion no later than 10 days after entry of judgment . . . ." (emphasis added). At
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trial, Textron moved for a 50(a) motion for judgment at the close of Shapiro’s evidence and again
at the close of all of the evidence. The jury returned its verdict on November 6, 1996. Textron
filed a Rule 50(b) motion for judgment as a matter of law and alternative motion for new trial on
November 15, 1996. Textron filed no further Rule 50(b) motion. The district court entered
judgment on the jury’s verdict on February 4, 1997.
Shapiro argues that Textron did not comply with Rule 50(b), because Textron filed its
Rule 50(b) motion within ten days after the jury’s verdict, instead of within ten days after entry of
judgment by the court. Shapiro argues that since Textron did not file or renew its Rule 50(b)
motion within ten days after the court entered judgment, on February 4, 1997, Textron did not
comply with the Rule and, thus, that the plain error standard of review should apply.
The 1995 Advisory Comments to the 1995 Amendment to Rule 50 ("Comments") explain
the meaning of the phrase "no later than 10 days after entry of judgment." The Comments note:
"The phrase 'no later than' is used--rather than 'within'--to include post-judgment motions that
sometimes are filed before actual entry of the judgment by the clerk."
Textron filed its Rule 50(b) motion on November 15, 1996. This was "no later than 10
days after entry of judgment," in fact, almost three months before entry of judgment by the court.
Textron complied with Rule 50(b).
As such, the standard of review is whether there is sufficient evidence on which a
reasonable jury could have concluded as it did. Sherrod v. Sears, Roebuck & Co., 785 F.2d
1213, 1314 (5th Cir.1986). We review the district court’s denial of Textron’s motion for a
judgment as a matter of law under the standard enunciated in Boeing Co. v. Shipman, 411 F.2d
365, 374-75 (5th Cir.1969) (en banc). A "conflict in substantial evidence" must be present to
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create a question for the jury. Id. at 375. Judgment as a matter of law is only appropriate if the
facts and inferences point so strongly in the movant’s favor "that a reasonable jury could not have
concluded that the ADEA was violated." Armendariz v. Pinkerton Tobacco Co., 58 F.3d 144,
148 (5th Cir.1995) (citing Boeing, 411 F.2d at 374).
2. Evidence of Age Discrimination
In order to make a prima facie showing of discriminatory termination due to age, a
plaintiff must demonstrate that: (1) he was discharged; (2) he was qualified for the position; (3) he
was a member of the protected class at the time of the discharge; and (4) he was either replaced
by someone outside of the protected class, replaced by someone younger, or otherwise discharged
because of his age. Bodenheimer v. PPG Indus., Inc., 5 F.3d 955, 957 (5th Cir.1993).
The parties extensively analyze the evidence under the framework enumerated in
McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802-04, 93 S. Ct. 1817, 1824-25 (1973). The
framework involves a burden shifting analysis: (1) the plaintiff must demonstrate a prima facie
case of discrimination; (2) the burden of production shifts to the employer to establish a legitimate
and nondiscriminatory basis for the adverse employment decision; and (3) the plaintiff must then
prove by a preponderance of the evidence that the employer’s proffered reason is pretext.
McDonnell Douglas, 411 U.S. at 802-04, 93 S.Ct. at 1824-25.
Textron argues that Shapiro failed to make out a prima facie case of discrimination.
However, we have noted that whether a plaintiff made out:
a prima facie case of age discrimination . . . is not the correct focus of our review.
When a case has been fully tried on the merits, the adequacy of the showing at any
stage of the McDonnell Douglas framework is unimportant; rather, the reviewing
court must determine whether there was sufficient evidence from which a
reasonable trier of fact could have concluded that age discrimination occurred. To
make this determination, we must examine the sufficiency of both the direct and
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circumstantial evidence to support the jury verdict that the employer used age as a
determinative factor in making the adverse employment decision. Although age
need not be the sole reason for the adverse employment decision, it must actually
play a role in the employer’s decision making process and have a determinative
influence on the outcome.
Woodhouse v. Magnolia Hospital, 92 F.2d 248, 253 (5th Cir.1996) (internal citations omitted).
See also Weaver v. Amoco Production Co., 66 F.3d 85, 87 (5th Cir.1995).
An analysis of the evidence presented at trial reveals that Shapiro presented sufficient
evidence from which a reasonable jury could have concluded that age discrimination occurred.
Kratzer wrote in his 1991 appraisal of Shapiro’s performance that: "Mr. Shapiro’s job
performance certainly indicates that he is promotable to a higher level position in program
management, however, his age is a factor in this consideration. It is noted that considering the
age factor, Mr. Shapiro’s longer-term opportunities for promotion are somewhat limited." In the
same 1991 appraisal, Kratzer noted: "There are no qualified replacements within the organization
and the Division is currently searching for a manager who can be developed to succeed Mr.
Shapiro." However, Shapiro stated that at that time, he had indicated no desire to retire.
Further, in his May 1992 appraisal of Shapiro’s performance, Kratzer wrote: "Would
desire that Mr. Shapiro accelerate the development of a qualified replacement."
In the September 1994 performance appraisal of Shapiro, Kratzer suggested that "Mr.
Shapiro may be near retirement and would not be considered for further promotion" and that no
developmental plans were identified for him. Again, Shapiro alleges that he had no plans for
retirement at that time, and Kelly testified at trial that there was no policy at Textron requiring
Shapiro to retire. When asked whether such language in the 1994 appraisal could be indicative of
age discrimination, Corcoran admitted, "it depends on how you interpret it."
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We believe that a reasonable jury could find that the language in the performance
appraisals suggests that Textron closely regarded Shapiro’s age and was watchful for someone--a
younger person--who could assume Shapiro’s job duties, Akroyd. Further, a reasonable jury
could find--in light of the language in the performance appraisals--that the termination of Shapiro
evidenced age discrimination by Textron, especially given the fact that Textron had no policy
requiring Shapiro to retire and given Shapiro’s assertion that he had no plans to retire.
Based on the trial testimony, a reasonable jury could have concluded that Textron’s
alleged business reasons for terminating Shapiro were pretextual. Textron claimed that its Marine
& Land Systems division had a $40 million projected revenue decline shortly before the January
1995 layoff and that its projected revenue declined from $215 million to $175 million. Further, at
trial, Kelly testified that the delay and/or loss of a contract which Textron had with the
government of Kuwait was another reason for laying off Shapiro. See Trial Transcript
("Transcript"), pp. 245-47.
However, the cross examination of Kelly and Kratzer at trial, and the testimony of
Shapiro, demonstrated that there was great uncertainty about whether the $40 million revenue
decline had even been projected by the time that Shapiro was fired. See Transcript, pp. 58-63,
261-71. Testimony also demonstrated that in January 1995, the month that Shapiro was fired,
Textron was still in negotiations with the government of Kuwait regarding their contract. Id. at
pp. 261-71, 360-61. In sum, a reasonable jury could have found that the supposed legitimate
business reasons offered by Textron for its termination of Shapiro were pretextual.
Judgment as a matter of law is only appropriate if the facts and inferences point so
strongly and overwhelmingly in the movant’s favor "that a reasonable jury could not have
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concluded that the ADEA was violated." Armendariz, 58 F.3d at 148. A reasonable jury could
indeed have concluded that the ADEA was violated. The district court’s decision denying
Textron’s motion for judgment as a matter of law was not in error.
B. The District Court Did Not Commit Error in Choosing Not To Present a Special Jury
Interrogatory Concerning Textron’s Mitigation of Damages Defense
Textron argues that the district court committed reversible error by not presenting an
interrogatory to the jury concerning Textron’s mitigation of damages defense. Under Fed. R. Civ.
P. 49, district courts are given broad discretion in the formulation of jury interrogatories. As
such, we review the adequacy of the formulation of jury interrogatories under an "abuse of
discretion" standard. EEOC v. Manville Sales Corp., 27 F.3d 1089, 1096 (5th Cir.1994), cert.
denied, 513 U.S. 1190, 115 S. Ct. 1252 (1995).
In determining the adequacy of jury verdict forms, we examine: "(1) whether read as a
whole and in conjunction with the general charge the interrogatories adequately presented the
contested issues to the jury; (2) whether the submission of the issues to the jury was 'fair'; and (3)
whether the 'ultimate questions of fact' were clearly submitted to the jury." Barton’s Disposal
Serv., Inc. v. Tiger Corp., 886 F.2d 1430, 1435 (5th Cir.1990), quoting Dreiling v. General Elec.
Co., 511 F.2d 768, 774 (5th Cir.1975). "Abuse of the discretion is established if the Charge and
Interrogatories fail to meet [these] factors." Barton’s, 886 F.2d at 1435. "An alleged error in the
charge is reversible only if the charge, when viewed in its entirety, misstated the state substantive
law and thereby prejudicially misled the jury." Nance v. Gulf Oil Corp., 817 F.2d 1176, 1180 (5th
Cir.1987).
We find that the district court’s charge to the jury contained the relevant law concerning
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mitigation of damages; therefore, a separate interrogatory to the jury was not needed on the issue.
Judge Carr’s charge met the three factors discussed above. The trial court did not abuse its
discretion.
C. The District Court Did Not Abuse Its Discretion in Awarding Front Pay to Shapiro
We review a district court’s award of front pay for abuse of discretion. Deloach v.
Delchamps, 897 F.2d 815, 822 (5th Cir.1990).
Under the ADEA, reinstatement is generally the preferred remedy. Id. at 822. However,
front pay may be awarded "to meet the goal of Title VII to make whole the victims of
discrimination." Floca v. Homecare Health Serv., Inc., 845 F.2d 108, 112 (5th Cir.1988).
Though Shapiro argued in a post-trial memorandum for his reinstatement, instead of front pay, the
district court held that reinstatement was not feasible in this case, given that: (1) Shapiro’s work-
life expectancy was only slightly over one year; (2) Shapiro’s former job position was not
available; and (3) there was animosity between Shapiro and others with whom he would have
worked if he had been reinstated. As such, the trial court found that front pay was a more
appropriate remedy, and awarded front pay of $178,401.75, based on Shapiro’s work life
expectancy of 1.39 years.
Textron argues that the trial court’s front pay award was an abuse of discretion because:
(1) it is not clear from the record that Shapiro would have remained in his position but for the
unlawful discrimination; and (2) the award did not include any reduction for Shapiro’s post-
termination pension and retirement earnings.
Textron argues that it is uncertain whether Shapiro would have remained in his position,
but for the unlawful discrimination. Textron argues that Shapiro’s work life expectancy of 1.39
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years is speculative, because Shapiro could have lost his position in a reduction in force and
because Textron had no position for someone with Shapiro’s skills. The jury concluded that
Shapiro was laid off because of age discrimination. As such, we will not give credence to an
argument that speculative forces in the victim’s future could have endangered his employment,
and that his work life expectancy should be reduced. What is clear from the jury’s verdict is that
Shapiro would have continued to work for Textron, but for Textron’s age discrimination. As
such, the district court did not abuse its discretion in awarding front pay based on Shapiro’s work
life expectancy of 1.39 years.
Finally, Textron urges that we order a remittitur of the front pay award because Shapiro
received significant earnings after his termination. The evidence demonstrated that after his
termination, Shapiro received income from social security, from pension benefits from Textron
and from two former employers, and from stock benefits. However, the evidence at trial
demonstrated--and Textron does not dispute--that had Shapiro not been terminated, he would
have received all of these benefits in addition to his Textron salary.
As we also have upheld a trial court’s failure to deduct social security benefits, the district
court did not abuse its discretion in not deducting Shapiro’s social security benefits from the front
pay award. Guthrie v. J.C. Penney Co., Inc., 803 F.2d 202, 209 (5th Cir.1986); see also
Dominquez v. Tom James Co., 113 F.3d 1188 (11th Cir.1997).
As to a plaintiff’s post-termination income from third parties, we have adopted the
"collateral source" rule, which provides that "a plaintiff’s recovery is not to be reduced by benefits
received from a third party." Smith v. Office of Personnel Management, 778 F.2d 258, 263 (5th
Cir.1985), cert. denied, 476 U.S. 1105, 106 S. Ct. 1949, (1986). "The collateral source rule does
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not apply when the collateral source is the defendant." Id. As such, the district court did not
abuse its discretion by not reducing the front pay award by the amount of Shapiro’s retirement
investments, such as stock, and by the amount of Shapiro’s pensions from employers other than
Textron. As the collateral source rule does not apply when the source of funds is the defendant,
the rule will not apply to the Textron pension, which must be examined separately.
The evidence at trial indicated that Shapiro began receiving his Textron pension and his
pensions from two past employers before he was terminated. See Transcript, pp. 90-91. Textron
cannot argue that Shapiro’s pension payments would not have existed, but for his termination.
Further, Textron has not argued on appeal that the amount of Shapiro’s pensions increased as a
result of his termination. As such, the post-termination pension payments to Shapiro--in addition
to the front pay award--were not a windfall to him. The trial court did not abuse its discretion.
III.
CONCLUSION
For the foregoing reasons, the judgment of the district court is in all respects AFFIRMED.
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