John Blandford v. Exxon Mobil Corporation

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 12a0572n.06
No. 10-5795
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT FILED
JOHN R. BLANDFORD, ) Jun 05, 2012
) LEONARD GREEN, Clerk
Plaintiff-Appellant, )
)
v. ) ON APPEAL FROM THE UNITED
) STATES DISTRICT COURT FOR THE
EXXON MOBIL CORPORATION d/b/a ) EASTERN DISTRICT OF TENNESSEE
EXXON MOBIL FUELS MARKETING )
COMPANY, )
)
Defendant-Appellee. )
Before: GIBBONS and SUTTON, Circuit Judges; DUGGAN, District Judge.*
DUGGAN, District Judge. In this suit, Plaintiff John Blandford asserts claims of age
discrimination under the Age Discrimination in Employment Act (“ADEA”) and the Tennessee
Human Rights Act (“THRA”) against his employer, Exxon Mobil Corporation (“ExxonMobil”).
Blandford appeals the district court’s grant of summary judgment in favor of ExxonMobil with
respect to his claims. For the reasons set forth below, we affirm the district court’s decision.
I.
ExxonMobil sales representatives are known within the company as “Territory Managers”
(“TMs”). The general class of TMs can be further subdivided based on the type of customers served.
Two groups of TMs that are particularly relevant to this suit are those who service “Company
*
The Honorable Patrick J. Duggan, United States District Judge for the Eastern District of
Michigan, sitting by designation.
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Operated Retail Stores” (“CORS TMs”) and those who service independent distributors of
ExxonMobil products (“Distributor TMs”). The company has typically assigned new recruits and
recent college graduates to the CORS TM position to allow them to learn the business. R. 49-1 at
29-30. As these employees gain experience, they often become Distributor TMs. Appellant App’x
53. At all times relevant to this litigation, Blandford was employed as a Distributor TM.
ExxonMobil considers several factors in determining employees’ compensation: the
employee’s (1) “classification level” (“CL”); (2) performance, represented by a Rank Group
Percentile; and (3) work experience, measured in years. R. 25 at ¶¶ 3-4. Each CL corresponds to
a minimum and maximum salary. The Rank Group Percentile and work experience values are used
to define a number of “salary reference curves” within each CL. Id. at ¶ 4. The curves are defined
so that compensation rises at a decreasing rate as the employee gains experience. Thus, the trajectory
of the salary curve “flattens out.” See Appellee App’x 179. ExxonMobil has also at times created
salary curves for specific positions based on surveys of competitive data. R. 25 at ¶ 5. These salary
curves follow the same basic trajectory, with compensation rising at a decreasing rate.
By January 2003, ExxonMobil perceived a need to align the pay of the TM job family more
closely with the pay offered in the marketplace for comparable positions. To accomplish this, the
company conducted internal studies and gathered competitive data from consulting organizations
William A. Mercer, Inc. and Towers Perrin. Id. at ¶ 6. Through these efforts, the company
determined that the pay structure of the TM job family was not aligned with the market. Appellee
App’x 193. ExxonMobil defined a new salary structure for the TM job family, which became known
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as the “TM Salary Curve.” Id. at ¶ 8. The decision was made to apply the TM Salary Curve to a
number of positions, including the CORS TM and Distributor TM positions. Appellee App’x 420.
The TM Salary Curve was implemented in January 2003. Id. As a part of this change,
positions in the TM job family were given a new CL with a salary range of $45,000 through $77,000.
At the time, many TMs, including Blandford, had salaries above the $77,000 target maximum. R.
25 at ¶ 10-11. ExxonMobil implemented a program called “merit transition,” where TMs with
salaries above the target maximum would obtain annual “merit transition increases” of $800 to
$1,200. Id. at ¶ 14. The merit transition increase was expected to be smaller than the merit raises
given to TMs whose salaries were below the maximum level. Appellant App’x 33. Because the
salary ranges for each CL tended to increase from year to year, the result was that the salaries of all
TMs would eventually fall within the minimum and maximum range of the TM Salary Curve.
Following the implementation of the TM Salary Curve, Blandford was given annual merit transition
increases of between $800 and $1,200. R. 49-5.
In August 2006, ExxonMobil conducted a “TM job family evaluation workshop” attended
by several executives of the Fuels Marketing organization. The workshop’s purpose was to review
the application of the TM Salary Curve. Human Resources executive Benjamin Buckland served
as the workshop’s facilitator. Workshop attendees evaluated and compared the positions subject to
the TM Salary Curve to determine whether changes should be made. After this discussion, the
executives recommended the removal of several positions from the TM Salary Curve, but not the
Distributor TM position. Appellee App’x 434.
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At some point, Blandford raised a concern that the TM Salary Curve was discriminatory
based on age. In October 2006, Blandford participated in a conference call with Buckland, Area
Manager Jim Coleman, and Distributor Business Manager Kendall MacGibbon to discuss this issue.
R. 44-2 at 15. Blandford was told that his concerns were investigated, but that no discrimination was
found. Id. at 16. During this phone call, Buckland allegedly stated, “intuitively . . . we all know that
the value of experience goes down with age.” R. 44-1 at 15.
In August 2008, Blandford filed his complaint in the Circuit Court of Knox County,
Tennessee, alleging age discrimination under the ADEA and THRA. ExxonMobil removed the case
to the Eastern District of Tennessee and moved for summary judgment. The district court granted
ExxonMobil’s motion in an opinion dated June 3, 2010. Blandford now appeals that decision.
II.
A district court’s grant of summary judgment is reviewed de novo. Provenzano v. LCI
Holdings, Inc., 663 F.3d 806, 811 (6th Cir. 2011). Summary judgment is appropriate when “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). The moving party has the burden of proving the absence of a genuine
issue of material fact and its entitlement to summary judgment as a matter of law. Celotex Corp. v.
Catrett, 477 U.S. 317, 323 (1986). All facts, including inferences, are viewed in the light most
favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,
587 (1986). The central inquiry is “whether the evidence presents a sufficient disagreement to
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require submission to a jury or whether it is so one-sided that one party must prevail as a matter of
law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986).
III.
“The ADEA prohibits an employer from failing or refusing to hire, discharging, or
discriminating ‘against any individual with respect to his compensation, terms, conditions, or
privileges of employment, because of such individual’s age . . . .’” Geiger v. Tower Auto., 579 F.3d
614, 620 (6th Cir. 2009) (quoting 29 U.S.C. § 623(a)(1)). “A plaintiff may establish a violation of
the ADEA by either direct or circumstantial evidence.” Id. (citing Martin v. Toledo Cardiology
Consultants, Inc., 548 F.3d 405, 410 (6th Cir. 2008)). “‘Direct evidence of discrimination is that
evidence which, if believed, requires the conclusion that unlawful discrimination was at least a
motivating factor in the employer’s actions.’” Id. (quoting Wexler v. White’s Fine Furniture, Inc.,
317 F.3d 564, 570 (6th Cir. 2003) (en banc)). “‘Circumstantial evidence, on the other hand, is proof
that does not on its face establish discriminatory animus, but does allow a factfinder to draw a
reasonable inference that discrimination occurred.’” Id. (quoting Wexler, 317 F.3d at 570).
“Regardless of the type of evidence submitted, the burden of persuasion remains on ADEA plaintiffs
to demonstrate ‘that age was the but-for cause of their employer’s adverse action.’” Provenzano, 663
F.3d at 811 (quoting Gross v. FBL Fin. Servs., Inc., 557 U.S. 167, 178 n.4 (2009)). Age
discrimination claims brought under the THRA are evaluated using the same analysis. Bender v.
Hecht’s Dep’t Stores, 455 F.3d 612, 620 (6th Cir. 2006).
A. Disparate Treatment Claim
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“The ultimate question in every employment discrimination case involving a claim of
disparate treatment is whether the plaintiff was the victim of intentional discrimination.” Reeves v.
Sanderson Plumbing Prods., 530 U.S. 133, 153 (2000). In an age discrimination case, this means
that the plaintiff’s age “must have ‘actually played a role in [the employer’s decisionmaking] process
and had a determinative influence on the outcome.’” Id. at 141 (quoting Hazen Paper Co. v.
Biggins, 507 U.S. 604, 610 (1993)) (alteration in original).
1. Direct Evidence
Blandford argues that Buckland’s statement, “intuitively . . . we all know that the value of
experience goes down with age,” R. 44-1 at 15, is direct evidence of age discrimination. When
examining statements allegedly showing employer bias on the basis of age, courts should consider
“whether the comments were made by a decision maker or by an agent within the scope of his
employment; whether they were related to the decision-making process; whether they were more
than merely vague, ambiguous, or isolated remarks; and whether they were proximate in time” to the
challenged action. Cooley v. Carmike Cinemas, Inc., 25 F.3d 1325, 1330 (6th Cir. 1994).
It is undisputed that Buckland was involved in neither the design nor the initial
implementation of the TM Salary Curve. Blandford argues that Buckland’s comment is significant,
however, because Buckland facilitated the 2006 workshop at which ExxonMobil executives decided
not to remove the Distributor TM position from the TM Salary Curve. Blandford thus concludes that
Buckland has a “connection to the decision-making process.” Appellant Br. 29. This “connection”
is tenuous at best. Buckland may have had access to the decision makers, but there is no evidence
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indicating that he influenced their decision in any meaningful way. There is also no evidence
suggesting that these decision makers shared Buckland’s views with respect to age and experience.
Buckland’s remark also does not reflect a discriminatory attitude toward older workers, as
Blandford suggests. By stating that “the value of experience goes down with age,” Buckland merely
expressed the view that experience is subject to diminishing returns. Put differently, an employee
can be expected to gain much of the knowledge necessary to his position early in his assignment.
Once the employee has developed considerable expertise, each additional year of experience makes
less of a difference. This does not imply that older TMs are any less capable of performing their
jobs; in fact, it seems to suggest the opposite. The premise for the diminishing return is that more
experienced employees have already established expertise in their jobs, while less experienced
employees are still developing their skills. This assumption appears to be one of the foundations of
ExxonMobil’s general compensation system, as its salary reference curves tend to flatten out as
experience increases. See Appellee App’x 179. Blandford testified that he does not believe that the
general compensation system was discriminatory based on age. R. 26-1 at 5. It is difficult, if not
impossible, to reconcile this position with Blandford’s assertion that Buckland’s remark was facially
discriminatory. Buckland’s remark was ambiguous at worst, and certainly does not require the
conclusion that unlawful discrimination motivated ExxonMobil’s decision. The district court
correctly concluded that Blandford failed to present direct evidence of age discrimination.
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2. Circumstantial Evidence
“The three-step framework developed in McDonnell Douglas Corp. v. Green and modified
by Texas Dep’t of Community Affairs v. Burdine guides the analysis of age discrimination claims
based upon circumstantial evidence.” Provenzano, 663 F.3d at 811-12 (citations omitted). “In the
first step, the employee carries the initial burden of establishing a prima facie case of age
discrimination; if the employee meets this burden, the second step requires the employer to respond
by articulating some legitimate, nondiscriminatory reason for the adverse employment action at
issue.” Id. at 812 (citing McDonnell Douglas, 411 U.S. 792, 802 (1973)). “Third, assuming such
a response is made, the employee then bears the burden of rebutting this proffered reason by proving
that it was pretext designed to mask discrimination.” Id. (citing McDonnell Douglas, 411 U.S. at
804). “At all times, the ultimate burden of persuasion remains on the plaintiff to demonstrate that
age was the ‘but-for’ cause of their employer’s adverse action.” Id. (citing Burdine, 450 U.S. 248,
253 (1981)).
Blandford’s prima facie case requires him to show that he: (1) is a member of a protected
class; (2) was qualified for his position; (3) suffered an adverse employment action; and (4) suffered
such action under circumstances giving rise to an inference of unlawful discrimination. See Macy
v. Hopkins County Sch. Bd. of Educ., 484 F.3d 357, 364-65 (6th Cir. 2007). The district court
concluded that Blandford satisfied the first three elements, but not the fourth.
Blandford has presented statistical analysis indicating that older workers are treated less
favorably as a result of the TM Salary Curve. “‘Appropriate statistical data showing an employer’s
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pattern of conduct toward a protected class as a group can, if unrebutted, create an inference that a
defendant discriminated against individual members of the class.’” Bender, 455 F.3d at 622 (quoting
Barnes v. GenCorp., Inc., 896 F.2d 1457, 1466 (6th Cir. 1990)) (citation omitted). “‘To do so, the
statistics must show a significant disparity and eliminate the most common nondiscriminatory
explanations for the disparity.’” Id. (quoting Barnes, 896 F.2d at 1466) (citation omitted).
Blandford’s analysis shows that Distributor TMs tended to be, on average, older than CORS TMs.
This is easily explained, as the CORS TM position was often used to train new recruits and recent
college graduates. R. 49-1 at 29-30. Blandford’s analysis also establishes that after the
implementation of the TM Salary Curve, Distributor TMs’ raises were, on average, smaller than
those given to CORS TMs. This disparity is not surprising, because the TM Salary Curve limited
the raises given to TMs whose salaries were above the maximum of the salary range. According to
Blandford, the average Distributor TM’s salary in 2001 was $86,600, which was already above the
$77,000 target ceiling of the TM Salary Curve. Appellant Br. 12. This presents an obvious
explanation for the statistical disparity - the raises given to many Distributor TMs were limited
because those employees’ salaries were already above the target ceiling. “[T]here is no disparate
treatment under the ADEA when the factor motivating the employer is some feature other than the
employee’s age,” even where the motivating factor is correlated with age. Hazen Paper Co., 507
U.S. at 608-09. Age discrimination plaintiffs must establish that they were discriminated against
“because they were old, not because they were expensive.” Allen v. Diebold, Inc., 33 F.3d 674, 677
(6th Cir. 1994). Blandford’s statistical analysis fails to satisfy this burden.
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Blandford points to documents created prior to adoption of the TM Salary Curve in which
it was projected that this change would result in significant cost savings for ExxonMobil. This is
irrelevant, as “[t]he ADEA was not intended to protect older workers from the often harsh economic
realities of common business decisions.” Id. Blandford also notes that ExxonMobil’s pre-
implementation analysis included data on the number of employees in various age groups. See
Appellant App’x 44. Discriminatory intent cannot be implied based solely upon ExxonMobil’s
awareness of its employees’ ages, as it does not necessarily follow that age motivated the company’s
compensation decisions.
Blandford asserts that the Mercer survey was not the most appropriate benchmark for the TM
Salary Curve, and ExxonMobil’s decision to rely on this survey is evidence of discriminatory intent.
Appellant Br. 49-50. “In deciding whether an employer reasonably relied on the particularized facts
then before it, we do not require that the decisional process used by the employer be optimal or that
it left no stone unturned.” Smith v. Chrysler Corp., 155 F.3d 799, 807 (6th Cir. 1998). “[T]he key
inquiry is whether the employer made a reasonably informed and considered decision before taking
an adverse employment action.” Id. (citing Burdine, 450 U.S. at 256). Before creating the TM
Salary Curve, ExxonMobil obtained compensation surveys that contained data from a variety of
businesses, including oil and gas companies. R. 25 at ¶ 6-7. ExxonMobil compared its own salaries
with those identified in the surveys and designed the TM Salary Curve to conform with competitive
benchmarks. Id. at ¶ 10. The company also re-evaluated the positions subject to the TM Salary
Curve in 2006 to determine whether application of the curve to those positions was appropriate.
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Blandford’s evidence indicates that ExxonMobil’s decision was perhaps unwise and that a more
appropriate benchmark could have been found. It does not demonstrate, however, that the decision
was so poorly informed as to suggest discriminatory intent.
The district court correctly concluded that Blandford failed to demonstrate an adverse
employment action under circumstances giving rise to an inference of unlawful discrimination. He
has not established a prima facie case of disparate treatment on the basis of age, and for this reason,
summary judgment in ExxonMobil’s favor was appropriate.
B. Disparate Impact Claim
“‘Claims that stress disparate impact involve employment practices that are facially neutral
in their treatment of different groups but that in fact fall more harshly on one group than another.’”
Allen v. Highlands Hosp. Corp., 545 F.3d 387, 403 (6th Cir. 2008) (quoting Smith v. City of Jackson,
544 U.S. 228, 239 (2005)). In City of Jackson, the Supreme Court held that ADEA plaintiffs may
recover under a disparate impact theory. 544 U.S. at 240. The scope of disparate impact liability
under the ADEA is narrower than under Title VII, because “age, unlike race or other classifications
protected by Title VII, not uncommonly has relevance to an individual’s capacity to engage in certain
types of employment.” Id. at 240. The plaintiff must identify “‘specific employment practices that
are allegedly responsible for any observed statistical disparities.’” Id. at 241 (quoting Wards Cove
Packing Co. v. Atonio, 490 U.S. 642, 656 (1989)). If the plaintiff is able to demonstrate disparate
impact, the employer may escape liability by showing that “the differentiation is based on reasonable
factors other than age.” 29 U.S.C. § 623(f)(1). An employer seeking to defend on this basis “must
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not only produce evidence raising the defense, but also persuade the factfinder of its merit.”
Meacham v. Knolls Atomic Power Lab., 554 U.S. 84, 87 (2008).
With respect to Blandford’s disparate impact claim, the district court concluded that
ExxonMobil had demonstrated that its employment practice was based on reasonable factors other
than age. Blandford disagrees with this analysis. He argues that ExxonMobil considered and
rejected the use of a Senior Territory Manager Salary Curve, despite the fact that the proposed curve
would have lessened the impact on older employees. Under the ADEA, the proper inquiry is
whether the employer’s differentiation based on a factor other than age was reasonable, not whether
another course of action would have avoided a disparate impact. See City of Jackson, 544 U.S. at
243 (“Unlike the business necessity test, which asks whether there are other ways for the employer
to achieve its goals that do not result in a disparate impact on a protected class, the reasonableness
inquiry includes no such requirement.”). It is therefore irrelevant that ExxonMobil rejected the
proposed Senior Territory Manager Salary Curve. Blandford also takes issue with ExxonMobil’s
decision to base the TM Salary Curve on the Mercer survey data, but for reasons discussed above,
the evidence supports a conclusion that this decision was reasonably informed and considered.
Blandford has failed to establish grounds for reversing the district court’s decision with respect to
his disparate impact claim.
IV.
Blandford argues in his reply brief that the district court erred in applying the McDonnell
Douglas burden-shifting framework to his THRA claims. Reply Br. 14-19. Blandford points to the
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Tennessee Supreme Court’s decision in Gossett v. Tractor Supply Co., 320 S.W.3d 777 (Tenn.
2010), which held that the McDonnell Douglas framework was inapplicable at the summary
judgment stage because it conflicted with the Tennessee Rules of Civil Procedure. Blandford failed
to raise this argument in his opening brief, which was filed after the Gossett decision was issued.
This court has consistently held that arguments raised for the first time in a reply brief are waived.
Sanborn v. Parker, 629 F.3d 554, 579 (6th Cir. 2010).
V.
For the reasons set forth above, we affirm the district court’s grant of summary judgment.
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