Jesse H. Ferguson Phillip Miller v. Guyan MacHinery Company, A West Virginia Corporation, 46 F.3d 1123, 4th Cir. (1995)
Jesse H. Ferguson Phillip Miller v. Guyan MacHinery Company, A West Virginia Corporation, 46 F.3d 1123, 4th Cir. (1995)
Jesse H. Ferguson Phillip Miller v. Guyan MacHinery Company, A West Virginia Corporation, 46 F.3d 1123, 4th Cir. (1995)
3d 1123
Guyan Machinery Company (Guyan) appeals the district court's denial of its
post-trial motion for judgment as a matter of law (JAMOL), pursuant to
Fed.R.Civ.P. 50(b), contending that the evidence was insufficient to support the
jury's verdicts on the claims of age discrimination in employment, asserted by
the Appellees, Jesse Ferguson (Ferguson) and Phillip Miller (Miller), pursuant
to Sec. 5-11-9(1) of the West Virginia Human Rights Act, W. Va.Code Ann.,
Secs. 5-11-1 to 5-11-19 (Michie 1994 & Supp.1994). After careful review of
the record, we vacate the judgment of the district court with respect to the age
discrimination in employment claims and remand for a new trial on those
claims.1
I.
2
Guyan manufactures machine parts. Ferguson, who was fifty-one years old
when Guyan terminated him, worked for Guyan for thirty years; and Miller,
who was forty-seven when Guyan terminated him, worked for Guyan for
twenty-three years. Both men had excellent employment records with Guyan.
In 1990, Ferguson and Miller set up a small business on the side which
manufactured machine parts, but not the same kind of parts manufactured by
Guyan, some of which parts it sold to Guyan. Subsequently, Guyan twice
approached Ferguson and Miller for assurance that their side business would
not begin competing with Guyan, and both times, Ferguson and Miller assured
Guyan that it would not. A few months later, Guyan presented Ferguson and
Miller with non-competition agreements that would take effect if their
employment with Guyan ceased, and informed them that unless they signed the
agreements, they would be terminated. Desiring to keep their jobs, Ferguson
and Miller signed the agreements.
In May 1991, Bob Shell (Shell), Guyan's chief executive officer, and Joe Worth
(Worth), Guyan's president, informed Ferguson and Miller that they would be
terminated unless they shut down their side business. Ferguson and Miller
retorted that they did not intend to shut down their side business because they
believed it was their only source of financial security, considering what they
believed to be their impending discharge. When, after several weeks, Ferguson
and Miller still refused to shut down their side business, Worth terminated
Ferguson and Miller, but asked them to train their replacements, who were both
approximately fifteen years younger than Ferguson and Miller and under the
age of forty.
On March 27, 1992, Ferguson and Miller filed complaints against Guyan in
West Virginia state court, alleging Guyan terminated them because of their age
in violation of Sec. 5-11-9(1) of the West Virginia Human Rights Act, W.
Va.Code Ann., # 8E8E # 5-11-1 to 5-11-19 (Michie 1994 & Supp.1994) and
Sec. 623 of the Age Discrimination in Employment Act of 1967 (ADEA), 29
U.S.C.A. Secs. 621-34 (West 1985 & Supp.1994), and further alleging four
breach of contract claims related to their employment, which included Guyan's
wrongfully refusing to pay them length of service bonuses. Guyan removed the
case to the United States District Court for the Southern District of West
Virginia based on a federal question. In its answers, Guyan denied that it
terminated Ferguson and Miller because of their age, and stated as an
affirmative defense that it terminated them because their "job performance[s]
had deteriorated due, in part, to another business plaintiff[s] operated." (J.A. 44,
51).
5
At trial, Ferguson and Miller only tried their age discrimination claims under
the West Virginia Human Rights Act and their breach of contract claims
alleging that Guyan wrongfully refused to pay their length of service bonuses.
Their remaining ADEA and breach of contract claims were dismissed by the
district court.
As evidence that Guyan terminated them because of their age, Ferguson and
Miller offered trial testimony of six former Guyan employees who were over
forty years of age when Guyan terminated them. Guyan contended that it
terminated these employees pursuant to a reduction-in-force plan (RIF) which it
had implemented to cut costs and offered evidence that it operated at a loss
during the time it terminated these six employees. Guyan also offered statistical
evidence which it contended established that it did not terminate persons over
forty years of age in greater proportion to persons under forty years of age
while executing its RIF. Shell testified that Guyan fired Ferguson and Miller
because he perceived that their job performances were deteriorating and would
continue to deteriorate due to their side business.2
At the close of Ferguson and Miller's evidence, Guyan made a motion for
JAMOL with respect to the age discrimination claims, contending that they had
not presented sufficient evidence to succeed on these claims. The district court
denied the motion. At the close of the evidence, Guyan renewed its motion for
JAMOL, and again, the district court denied it. The jury returned a verdict in
favor of Ferguson, awarding him $375,000 for lost wages, $50,000 for
emotional distress, $1,250 for his unpaid bonus, and $10,000 in punitive
damages, for a total of $436,250. The jury returned a verdict in favor of Miller,
awarding him $510,000 for lost wages, $50,000 for emotional distress, $1,500
for his unpaid bonus, and $10,000 in punitive damages, for a total of $571,500.
Again, Guyan unsuccessfully moved for a JAMOL, and the district court
entered judgment on the jury verdicts. Guyan appeals.
II.
8
We review the denial of a motion for JAMOL de novo, see Goodwin v. Metts,
885 F.2d 157, 160 (4th Cir.1989), cert. denied, 494 U.S. 1081 (1990), and in
the case of a jury verdict entered as judgment, we must sustain the jury's verdict
unless the evidence is not of such quality and weight that " 'reasonable and fairminded [people] in the exercise of impartial judgment could reasonably return a
verdict for the nonmoving party.' " Id. (quoting Wyatt v. Interstate & Ocean
Transp. Co., 623 F.2d 888, 891 (4th Cir.1980)). We must review the evidence
in the light most favorable to the party against whom the motion is made,
giving that party the benefit of all reasonable inferences from the evidence. Id.
We may not weigh the credibility of the witnesses or substitute our judgment
for that of the jury. Charleston Area Med. Ctr., Inc. v. Blue Cross and Blue
Shield, 6 F.3d 243, 247-48 (4th Cir.1993).
A.
9
Under West Virginia law, an employee has the initial burden of establishing a
prima facie case of age discrimination. Conaway v. Eastern Associated Coal
Corp., 358 S.E.2d 423 (W. Va.1986). In order to establish a prima facie case of
age discrimination, under West Virginia law, an employee must establish that:
(1) he is a member of a protected class; (2) he suffered an adverse employment
decision; and (3) but for his age, the adverse employment action would not
have been taken. Id. at 429. In Conaway, the Supreme Court of Appeals of
West Virginia noted that the first two parts of the test are easy, but that the third
will cause controversy:
10
Because
discrimination is essentially an element of the mind, there will probably be
very little direct proof available. Direct proof, however, is not required. What is
required of the plaintiff is to show some evidence which would sufficiently link the
employer's decision and the plaintiff's status as a member of a protected class so as to
give rise to an inference that the employment decision was based on an illegal
discriminatory criterion.
11
12
Conaway, 358 S.E.2d at 430. "The reason need not be a particularly good one.
It need not be one the judge or jury would have acted upon. The reason can be
any other reason except that the [employee] was a member of a protected
class." Id. If the employer meets this burden, then the burden shifts to the
employee to prove by a preponderance of the evidence that the reason proffered
by the employer was pretextual. See Heston v. Marion County Parks &
Recreation Comm'n, 381 S.E.2d 253, 256 (W. Va.1989); Conaway, 358 S.E.2d
at 429-30.
13
B.
14
Guyan argues that we should reverse the district court's judgment because: (1)
Ferguson and Miller did not present sufficient evidence at trial to establish the
third element of the prima facie case (i.e., that but for their age, Guyan would
not have terminated Ferguson or Miller), and (2) they did not prove by a
preponderance of the evidence that the legitimate nondiscriminatory reason
proffered by Guyan was pretextual. Ferguson and Miller, as Guyan concedes,
clearly met the first two elements of a prima facie case. Ferguson, age fifty-one,
and Miller, age forty-seven, were members of a protected class, and both
suffered an adverse employment decision. See Conaway, 358 S.E.2d at 429.
Thus, the issues on appeal are whether Ferguson and Miller satisfied the third
element of the prima facie case and whether they proved by a preponderance of
the evidence that Guyan's proffered reason was pretextual.
15
Ferguson and Miller offered the following indirect evidence as proof that, "but
for" their age, Guyan would not have terminated them: (1) undisputed evidence
that Guyan filled both their positions with men under forty years of age, and (2)
evidence of a noticeable trend in Guyan's RIF to lay off older workers first and
not promote the ones they kept, thus encouraging them to retire. Id. at 430;
Raber, 423 S.E.2d at 899. As proof of this noticeable trend, Ferguson and
Miller offered the testimony of six former Guyan employees who were over
forty years of age at the time Guyan terminated them pursuant to the RIF. None
of the employees had any direct evidence that Guyan had terminated them
because of their age, but all testified that they had good job performance
records and had more experience than other younger employees that Guyan
retained. Guyan denied terminating the six employees because of their age, and
offered evidence that it terminated these people pursuant to the RIF
necessitated by operating losses beginning in 1981. Guyan also offered
statistical evidence that during the years 1988, 1989, 1990, and 1991, it
terminated employees under forty years of age at a higher rate than employees
over forty years of age. Our review of the statistical evidence presented by
Guyan reveals that it was not conclusive. Ferguson and Miller offered evidence
that Guyan's statistics were fundamentally flawed because Guyan counted
probationary employees, the great majority of which were under forty years old,
in the number of employees who were terminated. This circumstance, Ferguson
and Miller argued, skewed the ratio of under forty year old employees
terminated to over forty year old employees terminated during the RIF.
16
17
We hold that the evidence presented by Ferguson and Miller was insufficient to
sustain the jury's finding that "but for" their age, Guyan would not have
terminated Ferguson and Miller. Conaway, 358 S.E.2d at 429-30. First, Guyan
never admitted terminating Ferguson and Miller because of their age. See id.
Instead, the evidence was undisputed that Guyan informed Ferguson and Miller
upon their termination that Guyan was terminating them because they refused
to shut down their side business after several requests. Second, Ferguson and
Miller did not present any evidence that Guyan permitted other, younger
employees to operate a side business without terminating them.4 See id. Third,
Ferguson and Miller did not offer any evidence to rebut Guyan's legitimate
nondiscriminatory reason that it actually perceived their job performances were
deteriorating or likely to deteriorate due to their operating a side business.
Finally, Ferguson and Miller did not present any statistics that showed that
older employees at Guyan received substantially different treatment than
younger employees. See id.
18
Ferguson and Miller was that it perceived their job performances to have been
deteriorating and that such deterioration would continue. As previously
mentioned, Shell testified at trial that he terminated them because he "didn't
feel that [Guyan] could run a company without everybody giving [it] onehundred percent," and he "didn't feel [Guyan was] getting that." (J.A. 157).
Ferguson and Miller argue that Guyan cannot utilize this reason to rebut their
prima facie case because under West Virginia law, Guyan's nondiscriminatory
reason is an affirmative defense which must have been pled in its answer, id. at
430 & n. 13, and thus Guyan was wedded to the reason it gave in its answer
with no evidence at trial to rebut it (i.e., that Ferguson's and Miller's job
performances had actually deteriorated due to their operation of a side
business).
19
Because the Federal Rules of Civil Procedure apply in this case, see Hanna v.
Plumer, 380 U.S. 460, 472-74 (1965), and they do not require such a narrow
reading of the pleadings, we reject this argument. The Federal Rules of Civil
Procedure only require that an affirmative defense be definite enough to put the
plaintiff on fair notice of its nature. Fed.R.Civ.P. 8(c); 5 Charles Wright &
Arthur Miller, Federal Practice and Procedure 2d Sec. 1274 at 455-56 (West
1990 & Supp.1994). The elimination of the stringency under the prior code
pleading is underscored by Fed.R.Civ.P. 8(f), which states simply that "all
pleadings shall be so construed as to do substantial justice." Therefore, the
legitimate, nondiscriminatory reason which Guyan proffered in its answer for
terminating Ferguson and Miller (i.e., their job performances were actually
deteriorating) was definite enough to put Ferguson and Miller on fair notice of
the reason which Guyan proffered at trial (i.e., Guyan perceived that their job
performances were deteriorating). Accordingly, Shell's perception that
Ferguson and Miller's job performances were deteriorating and would continue
to deteriorate due to the operation of their side business constituted Guyan's
proffered legitimate, nondiscriminatory reason.5
20
Turning to the evidence that the jury considered with regard to pretext, we note
that Ferguson and Miller did not offer any evidence, direct or indirect, that
Guyan's proffered, legitimate, nondiscriminatory reason was pretext for their
discriminatory motive, and thus, Ferguson and Miller failed to prove pretext by
a preponderance of the evidence. First, the evidence was undisputed that Guyan
did not make any reference to Ferguson and Miller's age during the
conversation in which Shell and Worth informed Ferguson and Miller that they
would be terminated unless they shut down their side business or in the
conversation a few weeks later when Worth actually terminated them. Rather,
the conversations pertained to Guyan's displeasure over Ferguson and Miller's
operating a side business. Second, although Guyan only bore the burden of
The evidence, thus, was insufficient to sustain the jury's ultimate finding of age
discrimination. Because the standard for proving age discrimination was not
fully appreciated by the parties and therefore, not considered by the court and
jury, it is in the interest of justice that Guyan have the benefit of the articulation
of the standard provided here, and that Ferguson and Miller have an
opportunity to meet the proof. We thus will order a new trial. See Fed.R.Civ.P.
50(d); Neely v. Eby Constr. Co., 386 U.S. 317, 329, reh'g denied, 386 U.S.
1027 (1967); Board of County Comm'rs v. Liberty Group, 965 F.2d 879, 886
(10th Cir.1992); Charles Wright and Arthur Miller, Federal Practice and
Procedure 2d Sec. 2540 at 615 (1971). In Neely, the Supreme Court
specifically recognized the power of appellate courts to grant a new trial in the
event it sets aside the jury's verdict for insufficiency of the evidence: "[i]f
appellee presents no new trial issues in his brief or in a petition for rehearing,
the court of appeals may, in any event, order a new trial on its own motion or
refer the question to the district court based on factors encountered in its own
review of the case." Neely, 386 U.S. at 329.
III.
22
on this issue were likewise void of any guidance as to how the jury should
arrive at a proper calculation for lost wages.6 Since the damages appear to be
wholly excessive, the record is without explanation as to their calculation, and
the jury instructions on this issue were painfully inadequate, we hold that the
damages awarded in this case with respect to Ferguson and Miller's lost wages
were excessive and inconsistent with West Virginia law. Id.
IV.
23
Since Guyan does not appeal the jury's award of the unpaid bonuses to
Ferguson and Miller, our opinion does not affect the judgment in that respect.
We, however, hold that there was insufficient evidence to support the jury's
verdict with respect to liability and damages on Ferguson and Miller's age
discrimination claims under West Virginia law. Specifically, Ferguson and
Miller did not present sufficient evidence to prove that "but for" their age,
Guyan would not have terminated them. Furthermore, Ferguson and Miller did
not present sufficient evidence to prove by a preponderance of the evidence that
Guyan's proffered legitimate, nondiscriminatory reason was pretext for a
discriminatory motive. Finally, we hold that the compensatory damages
awarded to Ferguson and Miller for their lost wages in connection with their
age discrimination claims were excessive. We, therefore, vacate the judgment
entered by the district court on Ferguson and Miller's age discrimination claims
under the West Virginia Human Rights Act and remand the case for a new trial
on liability and damages.
VACATED IN PART AND REMANDED
HALL, Circuit Judge, dissenting:
24
I would affirm the judgment of the district court because the evidence, if we
view it in the light most favorable to the plaintiffs, was sufficient to permit
"reasonable and fair-minded men in the exercise of impartial judgment" to find
that Guyan's decision to fire Ferguson and Miller was based in part on age.
Wyatt v. Interstate & Ocean Transp. Co., 623 F.2d 888, 891 (4th Cir.1980).
25
In West Virginia, the third element of a prima facie case of age discrimination
is a showing that "but for the plaintiff's protected status, the adverse decision
would not have been made." Conaway v. Eastern Associated Coal Corp., 358
S.E.2d 423, 429 (W. Va.1986). This element is, of course, also the ultimate
issue. See id. at 431 (McGraw, C.J., dissenting). However, all that is required at
the prima facie stage "is to show some evidence which would sufficiently link
the employer's decision and the plaintiff's status ... so as to give rise to an infer
ence that the employment decision was based on an illegal discriminatory
criterion." Id. at 429-30.
26
The majority recognizes that Ferguson and Miller adduced some evidence of
the third "but for" element of the prima facie case: they were replaced by men
under forty years of age, and there was a trend of laying off older workers first
or encouraging them to retire early by not promoting them. 1 Ante at 7-8. I
would add the following pieces of evidence: Ferguson and Miller were
performing at satisfactory levels when they were dismissed,2 and, according to
Miller, CEO Shell told them that Guyan would terminate them even if they had
not been running a potentially competitive business on the side.3 JA 534. This
evidence was sufficient to "give rise to an inference" that age was a motivating
factor in the decision to fire the plaintiffs.
27
28
That a facially legitimate reason was given by Guyan merely allowed the case
to proceed. St. Mary's Honor Center v. Hicks, 113 S.Ct. 2742, 2747 (1993).
Contrary to the assertion of the majority, ante at 9-10, the plaintiffs were not
required to adduce additional evidence to prove that the proffered reason was a
pretext. The jurors were certainly able to reject the proffered reason on the
basis of the evidence adduced by the plaintiffs in their case in chief4 and their
observation of Shell on the witness stand. See id. ("The factfinder's disbelief of
the reasons put forward by the defendant ... may, together with the elements of
the prima facie case, suffice to show intentional discrimination").5 I
respectfully dissent.
Guyan does not appeal the judgment in favor of Ferguson and Miller with
Guyan does not appeal the judgment in favor of Ferguson and Miller with
respect to their breach of contract claims alleging Guyan wrongfully refused to
pay their length of service bonuses, and therefore, our opinion does not disturb
the judgment in that respect
Shell, the individual who actually made the decision to terminate Ferguson and
Miller, testified at trial that he terminated them because he "didn't feel that
[Guyan] could run a company without everybody giving [it] one-hundred
percent," and he "didn't feel [Guyan was] getting that." (J.A. 157)
Ferguson and Miller did not offer any statistical evidence of their own
Ferguson and Miller cannot point to the testimony of Harold Hill, a former
Guyan employee who operated a blade sharpening business on the side, as
evidence of unequal treatment because Hill was forty-three years old and in the
protected class under West Virginia law when he began the business, and he did
not testify that Guyan was even aware that he operated the side business
The majority cites the testimony of Miller, (J.A. 534), for the proposition that
"according to Miller, CEO Shell told them that Guyan would terminate them
even if they had not been running a potentially competitive business on the
side." Post at 13. The dissent mischaracterizes Miller's testimony because
Shell's purported statement only reveals that Ferguson and Miller would have
been terminated for operating a filling station as a side business. This fact is, of
course, consistent with Guyan's articulated, legitimate, nondiscriminatory
reason for terminating Ferguson and Miller--that Guyan perceived their job
performances to have been deteriorating due to the operation of a side business
and that such deterioration would continue
The majority recognizes that the statistical evidence offered by Guyan to rebut
the evidence of such a trend was flawed and inconclusive. Ante at 7-8
element of a prima facie case in West Virginia. See, e.g., EEOC v. Western
Elec. Co., 713 F.2d 1011 (4th Cir.1983). Nevertheless, it is certainly evidence
giving rise to an inference of discriminatory motive. 3 Perhaps anticipating that
the company might use the bid loss as a reason for his firing, Miller
persuasively demonstrated in his case in chief that he was not responsible for
the loss. JA 527-30
4
Specific rebuttal would be difficult, given that the reason was the employer's
"perception" that the plaintiffs' moonlighting "might" interfere with their job
performance. 5 There is no reason to believe that West Virginia would not
follow St. Mary's. See Barefoot v. Sundale Nursing Home, ____ S.E.2d ____,
1994 WL 708092 (W. Va.) ("[W]e have consistently striven to construe the
[state discrimination statute] to coincide with the federal courts' interpretation
of Title VII....") (Cleckley, J., dissenting)