Fidel Salgado v. Graham Enterprise Inc.

NONPRECEDENTIAL DISPOSITION
To be cited only in accordance with Fed. R. App. P. 32.1
United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
Argued April 27, 2021
Decided June 16, 2021
Before
DIANE S. SYKES, Chief Judge
FRANK H. EASTERBROOK, Circuit Judge
MICHAEL Y. SCUDDER, Circuit Judge
No. 20-2978
FIDEL SALGADO, Appeal from the United States District
Plaintiff-Appellant, Court for the Northern District of Illinois,
Eastern Division.
v. No. 18-cv-8119
GRAHAM ENTERPRISE INC., Sara L. Ellis,
Defendant-Appellee. Judge.
ORDER
In the three years leading up to his discharge by Graham Enterprise Inc., Fidel
Salgado endured derogatory comments about his Mexican heritage from his supervisor.
After he was fired, Salgado sued the company under Title VII of the Civil Rights Act of
1964 for national-origin discrimination. The district court entered summary judgment
for Graham Enterprise, and we affirm.
No. 20-2978 Page 2
I
For 25 years, Salgado worked for Graham Enterprise, a company that owns and
operates gas stations in and around Chicago. The company’s owner, Patrick Graham,
hired Salgado in 1993 as a cashier at one of the stations. Two years later, Salgado was
promoted from cashier to general manager, a position he held until his discharge in
2018.
Salgado’s complaints of discrimination date back to 2015, when Clifford Scott, a
district manager, became his supervisor. Salgado recalled that Scott made several
derogatory comments about his heritage. Scott asked him, for instance, why he did not
take the day off for Cinco de Mayo. And during meetings at Graham Enterprise’s
corporate office, Scott commented to him, “[O]h, sorry, there’s no Mexican food. We
didn’t order no Mexican.” Scott allegedly also mocked Salgado while in the bathroom
by observing, “You know, you Mexicans have a small pecker.”
While under Scott’s supervision, Salgado’s misconduct at work resulted in three
“final” warnings. First, in April 2016, Salgado received a warning from Scott and Keyur
Bhatt, the company’s human resources director, in response to an incident that occurred
the previous month at the Skokie Citgo station. Video footage from that day shows a
woman who did not work at the station entering the back office with Salgado. The
video then shows Salgado moving a cardboard box in front of the surveillance camera
attached to or near the office ceiling. Bhatt believed that the two then engaged in sexual
activity—an allegation Salgado denies. After being confronted with the video
surveillance, Salgado signed the written warning and admitted to knowing that it was
against company policy to take nonemployees into a gas station’s back office.
The second warning to Salgado came in May 2016. It was then that he received a
two-week disciplinary suspension and probationary demotion for two incidents. First,
Salgado left his assigned store with a woman and her children while still on the clock.
Upon returning about 90 minutes later, Salgado continued to socialize until clocking
out. The second incident occurred just days later. Salgado returned to work an hour late
from an approved absence, and he was again found to have obstructed the surveillance
camera in the back office while accompanied by a woman who did not work for
Graham Enterprise. Bhatt, Scott, and Brian Kappel, the operations manager, prepared
this second warning, and Salgado signed it, acknowledging that he understood his job
was in “serious jeopardy.” After his suspension, Graham Enterprise reassigned Salgado
to a customer service representative’s role, though the company later reinstated him as
general manager on Scott’s recommendation.
No. 20-2978 Page 3
Salgado received his third warning more than a year later in November 2017.
Company management discovered that he had been clocking in and out of the Forest
View gas station for more than eight months despite being assigned to another location.
Salgado signed the warning, acknowledging not only that he had punched in and out at
unauthorized sites, but also that falsifying time was grounds for dismissal. Indeed,
Graham Enterprise had fired another general manager for falsifying time, and Bhatt
recommended that the company follow suit with Salgado. Patrick Graham overrode
Bhatt’s recommendation, however, wanting to give Salgado one last chance.
That last chance proved short lived. Graham Enterprise terminated Salgado in
March 2018. The final straw came after the company’s bank reported cash shortages of
$20 each with seven consecutive deposits from the Rock ‘n’ Roll gas station in Chicago,
where Salgado worked. As general manager, Salgado shouldered responsibility for
counting and depositing money each day. Scott investigated the missing money: he
reviewed the deposit slips and confirmed from the Rock ‘n’ Roll station’s surveillance
footage (which no longer exists) that Salgado was the only employee who had handled
the deposits. When Salgado could not explain the discrepancies, Graham Enterprise
fired him for failing to protect company assets. All employees up the chain of
command, including Scott, Bhatt, Kappel, and Graham, participated in and agreed with
the decision.
Salgado sued Graham Enterprise for discrimination based on his national origin
and a hostile work environment in violation of Title VII. At the pleading stage, the
district court dismissed without prejudice the hostile-work-environment claim for
failure to state a claim. Discovery ensued, and in time Graham Enterprise moved for
summary judgment. For his part, Salgado responded that Scott’s derogatory comments
created a genuine factual dispute over whether Scott’s discriminatory animus tainted
the decision to fire him. Salgado also sought leave to amend his complaint to add a Title
VII retaliation claim and a state-law spoliation-of-evidence claim based on the
company’s failure to preserve the surveillance videos from the Rock ‘n’ Roll station.
The district court granted Graham Enterprise’s motion, concluding that Salgado
had not raised a question of fact over the role that national origin played in his firing.
The only evidence that Salgado presented to support his claim included Scott’s
derogatory comments about his Mexican heritage, but Salgado failed to specify when
Scott made those comments and did not connect the comments to his discharge.
Further, Salgado had not raised any fact question to suggest pretext in Graham
Enterprise’s proffered reason for firing him—the discrepancies in the bank deposits
after he already had received three warnings. The court also denied Salgado’s request to
No. 20-2978 Page 4
amend his complaint, explaining that the proposed retaliation claim would be futile and
any spoliation claim would be untimely.
II
Before turning to the merits, we consider a concern raised by Graham Enterprise
over our appellate jurisdiction. In light of the district court’s failure to enter a final
judgment under Federal Rule of Civil Procedure 54(b), Graham Enterprise worries that
Salgado could seek to amend his hostile-work-environment claim, which the district
court dismissed without prejudice at the pleading stage. That concern is unfounded.
“The true test for determining finality under 28 U.S.C. § 1291 is not the adequacy of the
judgment, but whether the district court has finished with the case.” Hernandez v. Dart,
814 F.3d 836, 841 (7th Cir. 2016) (cleaned up). Here, the court signaled that it was done
with the case when it wrote in its final order: “The Court enters judgment for Graham
Enterprise on Salgado’s complaint and terminates this case.” Because the district court’s
action makes clear that it was finished with the case, our jurisdiction is secure.
III
As for the merits, the record lacks evidence supporting Salgado’s only claim, his
contention that Graham Enterprise fired him because of his national origin. He insists
the claim should proceed to trial because, as he sees the evidence, there remains a
material factual dispute about whether Scott’s discriminatory animus—reflected in the
derogatory comments about Salgado’s Mexican heritage—tainted the company’s
disciplinary investigations and ultimate decision to fire him. Salgado contends that
Scott initiated or influenced the investigation against him, so a reasonable jury could
infer that his termination of employment stemmed from Scott’s hostility toward his
national origin.
The record shows otherwise. Scott’s remarks, without more, do not create a
triable fact issue over the role that Salgado’s national origin played in his firing. For
biased comments to reflect discriminatory motive, they must have been made by the
decisionmaker around the time of, and in reference to, the adverse employment
decision. See Bagwe v. Sedgwick Claims Mgmt. Servs., Inc., 811 F.3d 866, 885 (7th Cir.
2016). Although Scott was among the decisionmakers in Salgado’s discharge, Salgado
could not remember when Scott made the derogatory comments, and he cannot trace
his discharge to any of them. Even more, Salgado has not called into question the
objective evidence that triggered his disciplinary actions and his ultimate termination of
employment—another employee’s report that Salgado had brought an unauthorized
No. 20-2978 Page 5
nonemployee into the back office, the records showing that Salgado clocked in and out
at unauthorized locations, and reports from the company’s bank about the missing cash
from the seven deposits. See Egonmwan v. Cook County Sheriff’s Dep’t, 602 F.3d 845, 850
(7th Cir. 2010) (explaining that a superior’s stray remarks were insufficient to support
an inference of discrimination when an investigation initiated by a superior revealed
evidence of plaintiff’s misconduct).
Salgado further contends that a fact question remains over the honesty of
Graham Enterprise’s stated reason for firing him—the disappearance of the deposit
money. Salgado asks us to infer pretext from the incongruity between the company’s
disciplinary actions against him and his successful 25-year career and progression to
general manager—steps that, he contends, reflect the company’s satisfaction with his
job performance. Here, too, we disagree.
No reasonable jury could conclude that Graham Enterprise’s proffered reason for
firing Salgado was untruthful, as is needed to establish pretext. See Formella v. Brennan,
817 F.3d 503, 513–14 (7th Cir. 2016). At the time of the incident involving cash shortfalls
with the bank deposits, Salgado already had received three written warnings. He has
not pointed to any record evidence calling into question the reasonableness of the
company’s investigation of the missing cash or its conclusion that, as the person who
counted the money every day, Salgado bore the responsibility for ensuring an accurate
and complete accounting of cash receipts and related deposits from the Rock ‘n’ Roll
station. As for the length of his tenure, Salgado’s “belief that he was performing his job
adequately is not relevant to the question of whether [the company] believed it had a
legitimate, non-discriminatory basis to terminate him.” Lauth v. Covance, Inc., 863 F.3d
708, 715–16 (7th Cir. 2017).
IV
Salgado’s remaining arguments also fail. He asserts that the district court
inappropriately resolved a material fact issue against him by concluding from the
Skokie Citgo station videotape that he obstructed the camera in the back office
intentionally—the incident that led to his first warning. But any dispute over Salgado’s
state of mind regarding his intent to obstruct the camera is immaterial. Regardless of his
intent, no one disputes that the video showed Salgado violating company rules by
bringing a woman who did not work at the station into the back office. The district
court grounded it summary judgment analysis in Salgado’s well-documented history of
violating company policies, culminating in the missing cash from the bank deposits.
No. 20-2978 Page 6
Nor do we see any abuse of discretion in the district court’s denial of Salgado’s
request to amend his complaint to add two claims. Salgado first sought leave to amend
his complaint during the summary judgment phase, when he asked the court for
permission to add a Title VII retaliation claim based on Graham’s deposition testimony
that he likely would not rehire Salgado. Salgado interpreted this statement to mean that
Graham intended to retaliate against him for suing the company. But the district court
reasonably viewed the proposed claim as futile because Salgado cannot show that he
suffered an adverse employment action. For starters, Graham never said he would not
rehire Salgado. Rather, Graham testified only that he would not be comfortable making
that decision without input from his management team. And nothing in the record
suggests that Salgado ever applied for reemployment or that the company’s
discriminatory practices deterred him from doing so. See Hudson v. Chi. Transit Auth.,
375 F.3d 552, 558 (7th Cir. 2004).
Salgado also sought leave to add a state-law spoliation claim regarding the
surveillance video that no longer exists from the Rock ‘n’ Roll station. Illinois law does
not recognize spoliation of evidence as an independent, freestanding cause of action,
but rather “an action for negligent spoliation can be stated under existing negligence
law.” Boyd v. Travelers Ins. Co., 652 N.E.2d 267, 269–70 (Ill. 1995). Regardless, the district
court appropriately exercised its discretion by denying the request as untimely. Salgado
knew about the video footage long before bringing this action—indeed, the final
warnings and discharge decision referred to the footage—and his proposal simply came
too “late in the game.” Hukic v. Aurora Loan Servs., 588 F.3d 420, 432 (7th Cir. 2009).
AFFIRMED