     Case: 12-10104   Document: 00512051017    Page: 1   Date Filed: 11/13/2012




        IN THE UNITED STATES COURT OF APPEALS
                 FOR THE FIFTH CIRCUIT  United States Court of Appeals
                                                 Fifth Circuit

                                                                  FILED
                                                            November 13, 2012

                                No. 12-10104                     Lyle W. Cayce
                                                                      Clerk

RONALD P. REED,

                                          Plaintiff-Appellant,

v.

NEOPOST USA, INCORPORATED,

                                          Defendant-Appellee.


                Appeal from the United States District Court
                     for the Northern District of Texas



Before STEWART, Chief Judge, GARZA, and ELROD, Circuit Judges.
JENNIFER WALKER ELROD, Circuit Judge:
      Plaintiff-Appellant Ronald Reed appeals the district court’s grant of
summary judgment on his age-discrimination claims under Chapter 21 of the
Texas Labor Code (formerly known as the Texas Commission on Human Rights
Act (the “TCHRA”)). Because Reed fails to present a genuine issue of material
fact that his age was a motivating factor in his termination or that Defendant-
Appellee Neopost USA, Inc. (“Neopost”) created a hostile work environment, we
AFFIRM.
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                                        No. 12-10104

                                               I.
        Reed worked for Neopost for approximately five years. His position
required him to cold-call companies, obtain information regarding their postage
equipment, and log that information into a survey. Neopost compensated Reed
based, in part, on the number of surveys that he completed each month. In
addition, Neopost awarded in-kind bonuses, such as stereo systems and trips, to
the employee(s) with the highest survey totals. On the heels of a contest for a
cruise getaway, one of Reed’s coworkers accused him of submitting falsified
surveys.      Neopost investigated the allegation, determined that it was
meritorious, and terminated Reed’s employment.1 Reed was 60 years old at the
time.
        According to Reed, certain coworkers called him names like “old man,” “old
fart,” “pops,” and “grandpa” at various times in the course of his employment.
Reed struggled, however, to always identify who made which comment or when
certain comments were made. He never reported the alleged workplace remarks
to Neopost and his alleged harassers had no decision-making authority
regarding his termination.
        Reed filed an age-discrimination claim in Texas state court pursuant to the
TCHRA and/or the Age Discrimination in Employment Act (“ADEA”).2 Neopost


        1
        At the same time, Neopost investigated alleged fraud by five other employees, two of
whom were fired (including one that was in the protected class at age 44), and three of whom
received warnings (aged 52, 47, and 37). Neopost replaced the three terminated employees
with four new hires (aged 52, 51, 41, and 25).
        2
         Reed’s original petition, filed in state court, did not specify whether he sought relief
under state law, federal law, or both. He raised a generic age-discrimination claim, asserting
that “all conditions precedent to filing this action for age discrimination under state and
federal law have been met.” The district court addressed Reed’s claims under the ADEA and,
in a footnote, stated: “as the same analysis and evidence applies under the TCHRA, the Court
will address only the ADEA claim.” Now, on appeal, Reed suggests that he never pled an
ADEA claim, stating: “this case is clearly pled under state law.” Reed’s pleadings are not so
clear. In any event, we address this case only under the TCHRA, as Reed has abandoned any
potential ADEA claim he may have had.

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                                  No. 12-10104

removed the case on diversity and federal question grounds and moved for
summary judgment. The district court granted Neopost’s motion and entered a
final judgment dismissing Reed’s claims. Reed timely appealed.
                                        II.
      We review a district court’s grant of summary judgment de novo. Jones
v. Robinson Prop. Grp., L.P., 427 F.3d 987, 991–92 (5th Cir. 2005). Summary
judgment is proper when there is no genuine dispute as to any material fact and
the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P.
56(a). A panel may “affirm summary judgment on any ground supported by the
record, even if it is different from that relied on by the district court.” Moss v.
BMC Software, Inc., 610 F.3d 917, 928 (5th Cir. 2010) (quoting Holtzclaw v. DSC
Comm’n Corp., 255 F.3d 254, 258 (5th Cir. 2001)).
      On appeal, Reed argues that the district court: (1) used the wrong
causation standard in analyzing his termination-based age-discrimination claim
under the TCHRA, and (2) erred in granting summary judgment on his hostile
work environment claim. We address each argument in turn.
                                        A.
      The Texas Supreme Court recently described the TCHRA in an age-
discrimination case, noting its parallel to federal anti-discrimination statutes:
      Under the TCHRA, “an employer commits an unlawful employment
      practice if because of race, color, disability, religion, sex, national
      origin, or age the employer . . . discharges an individual or
      discriminates in any other manner against an individual in
      connection with compensation or the terms, conditions, or privileges
      of employment.” Section 21.051 is effectively identical to Title VII,
      its federal equivalent, except that Title VII does not protect against
      age and disability discrimination. (Those forms of discrimination
      are addressed in separate statutes.) Because one of the purposes of
      the TCHRA is to “provide for the execution of the policies of Title
      VII of the Civil Rights Act of 1964,” we have consistently held that
      those analogous federal statutes and the cases interpreting them
      guide our reading of the TCHRA.

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                                   No. 12-10104

Mission Consol. Indep. Sch. Dist. v. Garcia, 372 S.W.3d 629, 633–34 (Tex. 2012)
(footnotes and internal citations omitted). Where, as here, a plaintiff relies on
circumstantial evidence, Texas courts apply the familiar McDonnell Douglas
burden-shifting framework to age-discrimination claims under the TCHRA. See
id. (citing McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802–05 (1973)
(establishing the three-part procedure for assessing a disparate-treatment claim
in the absence of direct evidence of discrimination)); Hernandez v. Grey Wolf
Drilling, L.P., 350 S.W.3d 281, 284 (Tex. App.—San Antonio 2011, no pet.).
      Under the McDonnell Douglas analysis, a plaintiff is entitled to a
“presumption of discrimination” if he can meet the “‘minimal’ initial burden” of
establishing a prima facie case. Mission Consol., 372 S.W.3d at 633–34 (citing
Tex. Dep’t of Cmty. Affairs v. Burdine, 450 U.S. 248, 254 (1981); Wal–Mart
Stores, Inc. v. Canchola, 121 S.W.3d 735, 739 (Tex. 2003)). “Although the precise
elements of this showing will vary depending on the circumstances, the
plaintiff’s burden at this stage of the case ‘is not onerous.’” Id. (quoting Burdine,
450 U.S. at 253). Upon a showing of a prima facie case, the “burden shifts to the
employer to show a legitimate, nonretaliatory reason for the adverse
employment action.” Black v. Pan Am. Labs., L.L.C., 646 F.3d 254, 259 (5th Cir.
2011) (citing McCoy v. City of Shreveport, 492 F.3d 551, 556 (5th Cir. 2007)). If
the employer meets its burden, then the burden shifts back to the plaintiff to
make an ultimate showing of intentional discrimination. See Machinchick v. PB
Power, Inc., 398 F.3d 345, 350 (5th Cir. 2005); Michael v. City of Dallas, 314
S.W.3d 687, 691 (Tex. App.—Dallas 2010, no pet.).
      Here, the district court assumed, without deciding, that Reed articulated
a prima facie case. Neopost responded with a legitimate nondiscriminatory
reason for Reed’s termination: that he falsified customer surveys. Thus, the
central question facing the court was whether Reed could demonstrate a genuine
issue of material fact that Neopost intentionally discriminated against him.

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Under the TCHRA, Reed could do so by showing “either (1) the reason stated by
the employer was a pretext for discrimination, or (2) the defendant’s reason,
while true, was only one reason for its conduct and discrimination is another
motivating factor (‘mixed motive’).” See Michael, 314 S.W.3d at 691 (citing
Rachid v. Jack in the Box, Inc., 376 F.3d 305, 312 (5th Cir. 2004); McCoy v. Tex.
Instruments, Inc., 183 S.W.3d 548 (Tex. App.—Dallas 2006, no pet.)); see also
Black, 646 F.3d at 259–60 (stating the TCHRA standard).
       Importantly, the TCHRA and the ADEA involve a different causation
inquiry at the third stage of the McDonnell Douglas analysis. Under the ADEA,
a plaintiff must prove that age was the “but for” cause of the challenged adverse
employment action. Moss, 610 F.3d at 928 (citing Gross v. FBL Fin. Servs., Inc.,
557 U.S. 167, 167, 173–80). Under the TCHRA, however, a plaintiff need only
show that age was a “motivating factor” in the defendant’s decision. Quantum
Chem. Corp. v. Toennies, 47 S.W.3d 473, 480 (Tex. 2001); see also Arismendez v.
Nightingale Home Health Care, Inc., 493 F.3d 602, 607 (5th Cir. 2007) (“Under
the Texas statute, to establish an unlawful employment practice, [the plaintiff]
need only prove that discrimination was ‘a motivating factor’ in the employer’s
decision, rather than a ‘but for’ cause as Title VII requires.” (internal citations
omitted).3


       3
         In Gross, the Supreme Court rejected the application of Title VII’s “motivating factor”
standard to ADEA cases, holding that an ADEA plaintiff must show that age was the but-for
cause of the challenged adverse employment action. See Moss, 610 F.3d 928 (citing Gross, 557
U.S. at 173–80). In light of Gross, one Texas court of appeals has noted that Texas law is
“unsettled” with respect to whether or not the “but for” standard applies to pretext-based age-
discrimination claims under the TCHRA. Hernandez, 350 S.W. at 284 (citing Houchen v.
Dallas Morning News, No. 3:08-CV-1251-L, 2010 WL 1267221, at *11–12 (N.D. Tex. Apr. 1,
2010)). The Hernandez court determined that it does not, noting that the statutory text of the
TCHRA, unlike the ADEA, expressly includes the “motivating factor” standard. Id. at 285; see
Tex. Lab. Code Ann. § 21.125(a). We reached the same conclusion in an unpublished opinion.
Jackson v. Host Int’l, Inc., 426 F. App’x 215, 219 n.2 (5th Cir. 2011) (unpublished) (per curiam).
Although we note the issue here, we need not address it because Reed’s evidence fails to create
a genuine issue of material fact under either causation standard.

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                                        No. 12-10104

       Reed argues that the district court wrongly applied the “but for” ADEA
causation standard to his TCHRA claim. A careful review of the district court’s
opinion suggests otherwise. Although it resolved Reed’s TCHRA claim based on
the “same evidence and analysis” that it applied to Reed’s ADEA claim, the
district court expressly evaluated Reed’s allegation that Neopost’s reason for his
termination was “false and pretextual and that age was a motivating factor” in
Neopost’s decision. But even assuming the district court applied the wrong
causation standard, summary judgment is appropriate. The evidence on the
record is insufficient to create a genuine issue of material fact under either the
“but for” or the “motivating factor” standard. After reviewing the record, we
agree with the district court’s ultimate conclusion that “viewing the evidence as
a whole and drawing all reasonable inferences in [Reed’s] favor . . . he has
created no issue of material fact regarding [Neopost’s] discriminatory animus in
terminating him.”4

       4
         Reed vehemently denies that he falsified the surveys at issue and, instead, argues
that the allegations were “instigated by a ring of related employees inside Neopost who wanted
to win the award for themselves as a means of taking a free family vacation together.” Reed’s
denial of wrongdoing, standing alone, is insufficient to create a fact issue. “In cases in which
an employer discharges an employee based on the complaint of another employee, the issue
is not the truth or falsity of the allegation, but ‘whether the employer reasonably believed the
employee’s allegation and acted on it in good faith.’” Jackson v. Cal-W. Packaging Corp., 602
F.3d 374, 379 (5th Cir. 2010) (quoting Waggoner v. City of Garland, 987 F.2d 1160, 1165 (5th
Cir. 1993)) (emphasis added); see also Vais Arms, Inc. v. Vais, 383 F.3d 287, 294 (5th Cir.
2004) (concluding that self-serving statements were insufficient to overcome summary
judgment); United States v. Lawrence, 276 F.3d 193, 197 (5th Cir.2001) (same); BMG Music
v. Martinez, 74 F.3d 87, 91 (5th Cir. 1996) (same). In addition, to the extent that Reed
complains that the real reason for his termination was his coworkers’ “setup job” so that they
could oust him out of a competition for a free cruise, his claim is not cognizable. The TCHRA
does not protect an employee against unfair business decisions, only discriminatory ones. Cf.
Nieto v. L & H Packing Co., 108 F.3d 621, 624 (5th Cir. 1997) (holding that an employee’s
claim that his employer was “out to get him” because he was successful at “what he was
doing,” even if true, did not support a discrimination claim, as “Title VII ... do[es] not protect
against unfair business decisions[,] only against decisions motivated by unlawful animus.”);
accord Jones v. Overnite Transp. Co., 212 Fed. App’x 268, 276 (5th Cir. 2006); see also
Burlington N. & Santa Fe Ry. Co. v. White, 548 U.S. 53, 68 (2006) (“[S]lights or minor
annoyances that often take place at work and that all employees experience, . . . personality
conflicts at work that generate antipathy” and “ ‘snubbing’ by supervisors and co-workers are

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                                    No. 12-10104

       We note that Reed relied, in part, on allegedly discriminatory comments
by his coworkers in asserting his age-discrimination claim. In evaluating federal
discrimination claims, this court has distinguished between workplace comments
presented as direct evidence of discrimination and those presented as additional
(i.e., circumstantial) evidence in the course of a McDonnell Douglas analysis.
Where a plaintiff offers remarks as direct evidence, we apply a four-part test to
determine whether they are sufficient to overcome summary judgment. See
Brown v. CSC Logic, Inc., 82 F.3d 651, 655 (5th Cir. 1996) (holding that
“[r]emarks may serve as sufficient evidence of age discrimination if the offered
comments are: 1) age related; 2) proximate in time to the terminations; 3) made
by an individual with authority over the employment decision at issue; and 4)
related to the employment decision at issue.”); see also Laxton v. Gap, 333 F.3d
572, 583 n.4 (5th Cir. 2003) (noting that, in light of the Supreme Court’s decision
in Reeves v. Sanderson Plumbing Products, Inc., 530 U.S. 133 (2000), the CSC
Logic test applies only when a remark is presented as direct evidence of
discrimination). Where a plaintiff offers remarks as circumstantial evidence
alongside other alleged discriminatory conduct, however, we apply a more
flexible two-part test. Russell v. McKinney Hosp. Venture, 235 F.3d 219, 226 (5th
Cir. 2000). In that circumstance, a plaintiff need only show (1) discriminatory
animus (2) on the part of a person that is either primarily responsible for the
challenged employment action or by a person with influence or leverage over the
relevant decisionmaker. See Laxton, 333 F.3d at 583 (citing Russell, 235 F.3d
at 226).
       Here, the district court found that Reed based his claim on circumstantial
evidence alone. Reed does not challenge that finding or the application of the
McDonnell Douglas framework to his age-discrimination claim. Thus, the proper



not actionable” under Title VII).

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inquiry regarding the alleged remarks is the two-part test articulated in Russell.
See id. at 583.       The district court applied the CSC Logic test, however,
emphasizing that the comments were “stray remarks,” unrelated to Reed’s
termination and made by individuals who were not responsible for Reed’s
termination.5 Although the court should have applied Russell, we agree with
its ultimate conclusion: the remarks are insufficient to create a fact issue.6 They
are sporadic, in large part untethered to specific speakers or times, and
attributed to harassers who had no responsibility for, or influence over, Reed’s
termination. Thus, they fail under both CSC Logic and Russell. Summary
judgment was therefore appropriate.
                                              B.
       In his second issue on appeal, Reed contends that the district court erred
in granting summary judgment on his hostile work environment claim. Reed

       5
         We admit that this court’s application of this distinction has been somewhat messy,
complicating matters for district courts. Compare, e.g., Jackson, 602 F.3d at 380 (5th Cir.
2010) (applying the CSC Logic test to remarks in assessing whether a plaintiff established a
prima facie case on a pretext claim) with Arismendez, 493 F.3d at 608 (acknowledging the
distinction and applying the CSC Logic test to a plaintiff’s direct evidence of discrimination).
That said, some district courts have focused great attention on the distinction. See Stippick
v. Stone & Webster Servs., LLC, No. H-10-0290, 2011 WL 564081, at *9–10 (S.D. Tex. Feb. 8,
2011); Acker v. Deboer, Inc., 429 F. Supp. 2d 828, 846-47 (N.D. Tex. 2006).
       6
         Although it has cited Russell , the case adopting the more flexible two-part test, the
Texas Supreme Court has not expressly drawn the same direct/circumstantial distinction. See
AutoZone, 272 S.W.3d at 592–93 (citing Russell, 235 F.4d at 226–27). It has applied the CSC
Logic test to workplace remarks presented as direct evidence of discrimination. See id. (citing
Arismendez, 493 F.3d at 608). Relying on Fifth Circuit law, it has held that “[s]tray remarks,
remote in time from [the relevant] termination, and not made by anyone directly connected
with the [termination decision], are not enough to raise a fact question about whether [the
employer’s] reason for terminating [plaintiff] was pretextual.” M.D. Anderson Hosp. & Tumor
Inst. v. Willrich, 28 S.W.3d 22, 25 (Tex. 2000) (citing Nichols v. Loral Vought Sys. Corp., 81
F.3d 38, 41 (5th Cir. 1996); Waggoner v. City of Garland, 987 F.2d 1160, 1166 (5th Cir.1993);
Gold v. Exxon Corp., 960 S.W.2d 378, 384–85 (Tex. App.—Houston [14th Dist.] 1998, no pet.)).
Because Texas courts consistently look to federal case law in interpreting the TCHRA, we
apply the distinction here. See Mission Consol., 372 S.W.3d at 633–34. To the extent that a
Texas court would apply the CSC Logic test on these facts, however, the result would be the
same.

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raised this claim for the first time in his response to Neopost’s motion for
summary judgment. According to Reed, he could not have raised it any sooner,
because our recent decision in Dediol v. Best Chevrolet, Inc., 655 F.3d 435 (5th
Cir. 2011) “handed down a new standard for age discrimination claims involving
a hostile work environment.”7            Although the deadline to file an amended
pleading had passed and Reed had failed to seek leave to pursue a new claim,
the district court addressed Reed’s hostile work environment claim on the
merits. We do the same.
       A plaintiff may state a hostile work environment claim under the TCHRA
(and, analogously, the ADEA), if he can show that: “(1) he was over the age of 40;
(2) the employee was subjected to harassment, either through words or actions,
based on age; (3) the nature of the harassment was such that it created an
objectively intimidating, hostile, or offensive work environment; and (4) there
exists some basis for liability on the part of the employer.” Dediol, 655 F.3d at
441 (citing Crawford v. Medina Gen. Hosp., 96 F.3d 830, 834–35 (6th Cir. 1996));
see also Fletcher, 166 S.W.3d at 489.
       A hostile environment claim is not actionable unless the alleged
discrimination is objectively unreasonable. Dediol, 655 F.3d at 441 (citing
Crawford, 96 F.3d at 834–35); see also Fletcher, 166 S.W.3d at 489. A workplace
environment is hostile when it is “permeated with discriminatory intimidation,

       7
         In Deidol, we expressly held that “a plaintiff’s hostile work environment claim based
on age discrimination under the ADEA may be advanced in this court.” 655 F.3d at 441.
Deidol was not the first case to touch on this issue. In Deidol, we noted that the Fifth Circuit
had, at least twice, assumed the existence of a hostile environment claim under the ADEA.
Id. at 440. In addition, a number of district courts in this circuit had held that a hostile work
environment claim was available under the ADEA. See, e.g., Lacher v. West, 147 F. Supp. 2d
538, 542–43 (N.D. Tex. 2001); Graham v. Lear Corp., No. 4:00-CV-694-E, 2001 WL 1658076,
at *3 n.2 (N.D. Tex. Dec. 21, 2001); Scally v. Burlington N. & Santa Fe Ry. Co., No. 4:00-CV-
1849-A, 2001 WL 1577626, at *4 (N.D. Tex. Dec. 10, 2001). Most importantly, a Texas
appellate court (relying primarily on federal law) held in 2005 that “an age-based hostile work
environment claim is actionable under the TCHRA.” City of Hous. v. Fletcher, 166 S.W.3d 479,
489 (Tex. App.—Eastland 2005, pet. denied).

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ridicule, and insult, that is sufficiently pervasive to alter the conditions of the
victim’s employment.” Dediol, 655 F.3d at 441 (quoting Alaniz v. Zamora-
Quezada, 591 F.3d 761, 771 (5th Cir. 2009)). In assessing whether a claim meets
that standard, courts review “all of the relevant circumstances, including the
frequency of the conduct, its severity, whether it is physically threatening or
humiliating or it is a mere offensive utterance, and whether it unreasonably
interferes with the employee’s work performance.” Fletcher, 166 S.W.3d at 489
(citing Butler v. Ysleta Indep. Sch. Dist., 161 F.3d 263, 269 (5th Cir. 1998)); see
also Dediol, 655 F.4d at 441. “Incidental or occasional age-based comments,
discourtesy, rudeness, or isolated incidents (unless extremely serious) are not
discriminatory changes in the terms and conditions of a worker’s employment.”
Fletcher, 166 S.W.3d at 489 (citing Butler, 161 F.3d at 269 n.3).
       Reed relies exclusively on the alleged ageist comments discussed above to
support his hostile work environment claim under the TCHRA.8 Specifically, he
asserts that various coworkers called him names like “old man,” “old fart,”
“pops,” and “grandpa.” By his own admission, Reed cannot “always remember
who said what and when.” Other than the general statement that the comments
occurred at various times between 2004 and 2009, we have very little detail
regarding their nature and context.              Reed presents no evidence that the
comments were physically threatening or humiliating. He testified that he
“didn’t appreciate” the remarks, and responded to them with things like “it takes
one to know one” and “back at you.”                Further, although Reed makes the
conclusory statement that the comments interfered with his job performance, he
does not indicate how. To the contrary, he spends much of his brief reciting the



       8
         To the extent that Reed relied on the workplace remarks as direct evidence of a hostile
environment, the district court correctly rejected them as stray remarks under the CSC Logic
test. Likewise, they are insufficient circumstantial evidence of discrimination for the reasons
discussed above.

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many awards and accolades he received during his tenure at Neopost. See, e.g.,
Appellant’s Br. at 6 (stating that Reed had “five years of formally recognized
exemplary job performance and near-perfect attendance.”). On these facts, Reed
presents no genuine issue of material fact that Neopost was a hostile work
environment for Reed.
                                     III.
      For the foregoing reasons, we AFFIRM the judgment of the district court.




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