MOONEY v. ARAMCO SERVICES CO.

DUHÉ, Circuit Judge:

Appellants appeal from the "decertification" of their Age Discrimination in Employment Act representative action and from certain rulings made by the district court during the trial of six individual plaintiffs. We affirm.

I. BACKGROUND

Appellants1 are eighty-five2 former managerial and skilled employees terminated under Aramco's "Manpower Control Program" during 1984-87. In 1987, Robert Mooney, William Holcomb and John Marcum filed their representative complaint alleging unlawful termination in violation of the Age Discrimination in Employment Act (ADEA). Other plaintiffs filed similar ADEA complaints in the same court and in the District of Delaware.

On Aramco's motion, the Delaware court transferred its cases to Texas. After the transfer, on Appellants' motion, the Texas court (hereinafter district or trial court) ordered consolidation of the cases. In November 1989, Judge Lynn Hughes authorized notice of the ADEA class proceeding to persons age 40 and over who were terminated under the Aramco Manpower Control Program on or after October 9, 1984.3 Eventually, 154 persons (including the original 18 plaintiffs in the consolidated action) elected to "opt-in" to the representative action. Thereafter, the case proceeded on a collective basis. Aramco deposed many of the plaintiffs, and all parties conducted extensive, class-wide discovery.

In June 1992, the consolidated cases were reassigned to Judge Ewing Werlein. In response to a request from Judge Werlein, Plaintiffs proposed a two-phase "pattern or practice" trial, modeled on International Brotherhood of Teamsters v. United States, 431 U.S. 324, 97 S.Ct. 1843, 52 L.Ed.2d 396 (1977). Aramco argued that the cases should proceed as individual actions, and moved that the "class" be dissolved because plaintiffs were not "similarly situated." In May 1993, the district court ordered the parties to select eight "party plaintiffs" for "the first trial" in October 1992.

In August 1992, approximately six weeks before trial, the district court granted Aramco's motion to dissolve the "class" and dismissed all of the opt-in plaintiffs, including six of the eight plaintiffs who had been selected for trial. In September 1992, the district court denied Aramco's motion to dismiss Appellants' pattern and practice claim, and six individual plaintiffs proceeded to trial on October 4, 1992. The jury found for Aramco on all six claims.

II. DENIAL OF REPRESENTATIVE ACTION

The ADEA, at 29 U.S.C. § 626(b), explicitly incorporates section 16(b) of the Fair Labor Standards Act,4 which provides that a person may maintain an action on "behalf of himself ... and other employees similarly situated. No employee shall be a party plaintiff to any such action unless he gives his consent in writing to become such a party and such consent is filed in the court in which such action is brought." 29 U.S.C. § 216(b) (emphasis supplied). A difference between an ADEA representative action and a Fed.R.Civ.P. 23 class action is that the ADEA action follows an "opt-in" rather than an "opt-out" procedure. See La Chapelle v. Owens-Illinois, Inc., 513 F.2d 286, 289 (5th Cir.1975). However, in discussing the representative action, most courts utilize class action terminology from Rule 23 cases.

A. Standard of Review

In the Fed.R.Civ.P. 23 context, a district court's class certification or decertification decision is reviewed under a clearly erroneous standard. See Merrill v. Southern Methodist University, 806 F.2d 600, 607 (5th Cir.1986),

(citations omitted); Briggs v. Anderson, 796 F.2d 1009, 1017 (8th Cir.1986) (abuse of discretion review of district court's decision to decertify the class). Appellee argues that the same standard should be applied to an ADEA certification/decertification determination.

Appellants, on the other hand, argue that this court should exercise plenary review because the district court employed an incorrect legal standard. For this proposition, Appellants cite Forbush v. J.C. Penney Co., 994 F.2d 1101, 1104-06 (5th Cir.1993). Therein, we employed a de novo standard to review whether the district court properly applied Fed.R.Civ.P. 23 to a class certification question.

We hold that the ADEA decertification decision requires a two-part standard of review. The initial question — i.e. what legal standard should the district court have used — is a question of law to be reviewed de novo. Once the correct legal standard is ascertained, the district court's application of the standard must be reviewed for abuse of discretion.

B. The Meaning of "Similarly Situated"

The center of this dispute is what "similarly situated" means in the ADEA context. Although there are many district court cases addressing the issue, the proper class certification procedure for an ADEA representative action is largely a matter of first impression for the circuit courts. The district court cases seem to divide along two basic lines.

1. Two-Stage Class Certification

The first line of cases is typified by Lusardi v. Xerox Corp.,5 and represents the method followed by the trial court in this matter.6 Lusardi and its progeny are remarkable in that they do not set out a definition of "similarly situated," but rather they define the requirement by virtue of the factors considered in the "similarly situated" analysis.7 In other words, this line of cases, by its nature, does not give a recognizable form to an ADEA representative class, but lends itself to ad hoc analysis on a case-by-case basis.

Under Lusardi, the trial court approaches the "similarly situated" inquiry via a two-step analysis. The first determination is made at the so-called "notice stage." At the notice stage, the district court makes a decision — usually based only on the pleadings and any affidavits which have been submitted — whether notice of the action should be given to potential class members.

Because the court has minimal evidence, this determination is made using a fairly lenient standard,8 and typically results in "conditional certification" of a representative class. If the district court "conditionally certifies" the class, putative class members are given notice and the opportunity to "opt-in." The action proceeds as a representative action throughout discovery.

The second determination is typically precipitated by a motion for "decertification" by the defendant usually filed after discovery is largely complete and the matter is ready for trial. At this stage, the court has much more information on which to base its decision, and makes a factual determination on the similarly situated question. If the claimants are similarly situated, the district court allows the representative action to proceed to trial. If the claimants are not similarly situated, the district court decertifies the class, and the opt-in plaintiffs are dismissed without prejudice. The class representatives — i.e. the original plaintiffs — proceed to trial on their individual claims. Based on our review of the case law, no representative class has ever survived the second stage of review.

2. Spurious Class Action

The second line of cases is typified by Shushan v. University of Colorado, 132 F.R.D. 263 (D.Colo.1990). Shushan espouses the view that § 16(b) of the Fair Labor Standards Act (FLSA) merely breathes new life into the so-called "spurious" class action procedure previously eliminated from Fed. R.Civ.P. 23. Building on this foundation, the court determined that Congress did not intend to create a completely separate class action structure for the FLSA and ADEA context, but merely desired to limit the availability of Rule 23 class action relief under either Act. In application, the court determined that Congress intended the "similarly situated" inquiry to be coextensive with Rule 23 class certification. In other words, the court looks at "numerosity," "commonality," "typicality" and "adequacy of representation" to determine whether a class should be certified. Under this methodology, the primary distinction between an ADEA representative action and a Fed.R.Civ.P. 23 class action is that persons who do not elect to opt-in to the ADEA representative action are not bound by its results. In contrast, Rule 23 class members become party to the litigation through no action of their own, and are bound by its results.

C. The District Court's Approach

The Lusardi procedure was followed in this case. Judge Hughes made an initial determination that the claimants were similarly situated, and permitted notice to be given to the putative class. Later, after 154 persons had "opted-in," and after extensive discovery had been conducted, Aramco moved to decertify the class. Judge Werlein determined that the claimants were not similarly situated, granted Aramco's motion and dismissed the opt-in plaintiffs without prejudice.

Judge Werlein set out extensive reasons for his finding.

(citations and footnotes omitted).

D. Analysis

We find it unnecessary to decide which, if either, of the competing methodologies should be employed in making an ADEA class certification decision. From the record, it is apparent that in this case, no matter how we analyze the similarly situated requirement, we cannot say that the district court abused its discretion in finding that the "opt-in" plaintiffs were not similarly situated. In so holding we specifically do not endorse the methodology employed by the district court, and do not sanction any particular methodology. We simply need not decide the appropriate methodology under these facts, and therefore leave that inquiry for another day.

III. MIXED-MOTIVES THEORY9

Trial Plaintiffs first assert that the district court erred by failing to instruct the jury on a "mixed-motives" theory of ADEA discrimination under Price Waterhouse v. Hopkins, 490 U.S. 228, 109 S.Ct. 1775, 104 L.Ed.2d 268 (1989).

A. Standard of Review

The standard of review for objections to the district court's jury instructions are set out in FDIC v. Mijalis, 15 F.3d 1314, 1318 (5th Cir.1994):

B. Mixed-Motives Theory

In general, a plaintiff can prove age discrimination in two ways. A plaintiff can prove discriminatory animus by direct evidence or by an indirect or inferential method of proof. Discrimination can be shown indirectly by following the "pretext" method of proof set out in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973). "The shifting burdens of proof set forth in McDonnell Douglas are designed to assure that the `plaintiff [has] his day in court despite the unavailability of direct evidence.'" Trans World Airlines, Inc. v. Thurston, 469 U.S. 111, 121, 105 S.Ct. 613, 622, 83 L.Ed.2d 523 (1985).

If, however, plaintiff produces direct evidence of discrimination, the McDonnell Douglas test is "inapplicable." Id., 469 U.S. at 119, 105 S.Ct. at 621. The Price Waterhouse, mixed-motives theory of discrimination comes into play where direct evidence of discrimination is presented, but the employer asserts that the same adverse employment decision would have been made regardless of discrimination.10 Although Price Waterhouse can be characterized as a method to prove discrimination, the mixed-motives theory is probably best viewed as a defense for an employer.11

Unlike McDonnell Douglas, which simply involves a shifting of the burden of production, Price Waterhouse involves a shift of the burden of persuasion to the defendant. In other words, under Price Waterhouse, once a plaintiff presents direct evidence of discrimination, the burden of proof shifts to the employer to show that the same adverse employment decision would have been made regardless of discriminatory animus. If the employer fails to carry this burden, plaintiff prevails.

Our prior case law and the Price Waterhouse opinion make clear that the mixed-motives and pretext theories require different elements of proof. See Price Waterhouse, 490 U.S. at 243 n. 12, 109 S.Ct. at 1787 n. 12,

See also, Waltman v. International Paper Co., 875 F.2d 468, 481 (5th Cir.1989) ("[T]he elements of proof in a sex discrimination claim will vary depending on whether the evidence leads to a discrimination claim based on `mixed motives' or `pretext.'"). In summary, Price Waterhouse and McDonnell Douglas are alternative methodologies for proving discrimination. To be entitled to an instruction, under either theory, plaintiff must demonstrate that he has submitted evidence of its requisite elements.

C. Application

In this case, Trial Plaintiffs requested an instruction which purported to combine the Price Waterhouse and McDonnell Douglas theories into a single instruction. While the district court gave the jury a McDonnell Douglas instruction, the Price Waterhouse instruction was rejected. We must determine whether Trial Plaintiffs were entitled to a Price Waterhouse instruction.

As mentioned above, the fundamental prerequisite to the mixed-motives instruction is the presentation of direct evidence of discrimination.

Davis v. Chevron U.S.A., Inc., 14 F.3d 1082, 1085 (5th Cir.1994) (per curiam).12 Before the Price Waterhouse methodology can be employed, plaintiff bears the "burden of persuasion on the issue of whether [improper factors] played a part in the employment decision." Price Waterhouse, 490 U.S. at 246, 109 S.Ct. at 1788.

Trial Plaintiffs advanced several items that they argue constitute direct evidence of discrimination. First is a memorandum by a senior vice president purporting to encourage the early retirement or dismissal of older employees. The memo, however, explicitly excludes American employees from its scope, and therefore does not provide direct evidence of discrimination against Trial Plaintiffs, all of whom are American.

The remaining evidence relates to allegedly discriminatory statements made to four of the Trial Plaintiffs by their supervisors. Specifically, Trial Plaintiffs state,

These statements fail to constitute Price Waterhouse "direct evidence."

Even if we accept the statements at face value, they do not provide discriminatory animus "without inference or presumption." As we have stated previously, "[t]o shift the burden on the employer to show by a preponderance of the evidence that it would have made the same decision even without the forbidden factor, the employee must show that `the employer actually relied on [the forbidden factor] in making its decision.'" Langley v. Jackson State University, 14 F.3d 1070, 1075 (5th Cir.1994) (emphasis in original).

Although the statement allegedly made to Thim13 and the statement allegedly overheard by Mooney14 create inferences that age played a part in their terminations, when taken in their entirety, both statements are primarily indicative of a desire to save money by employing persons at lower pay. The statements to Olson15 and Williams16 merely constitute speculation as to possible discrimination in the termination of Trial Plaintiffs. There is no evidence that Appellee "actually relied on" Trial Plaintiffs' age in making the decision. While we could infer such a conclusion from these statements, we cannot say that they provide "direct evidence" of age related animus.17

IV. PATTERN OR PRACTICE CLAIM

A. Pattern or Practice Jury Instruction

Trial Plaintiffs argue that their pattern and practice instruction was erroneously excluded.

1. Standard of Review

We apply the same standard of review to the district court's exclusion of the requested pattern and practice instruction as we applied in our analysis of the omitted mixed motives instruction.

2. Analysis

A "pattern or practice" claim is not a separate cause of action, but merely another method by which disparate treatment can be shown. The Supreme Court has set out the burden of establishing a "pattern or practice of discrimination."

Cooper v. Federal Reserve Bank of Richmond, 467 U.S. 867, 875-76, 104 S.Ct. 2794, 2799, 81 L.Ed.2d 718 (1984) (citations omitted, emphasis supplied). Trial Plaintiffs' proposed instruction stated, in relevant part,

Trial Plaintiffs' proposed instruction failed to properly state the law. In the first instance, the instruction fails to state that Trial Plaintiffs must show disparate treatment by a preponderance of the evidence. Second, the instruction fails to include the Supreme Court's caveat that "isolated and individual" acts of discrimination are not sufficient to establish a pattern or practice. Finally, the instruction improperly states that Appellees must prove by "clear and convincing evidence that it would have terminated the plaintiff even if it had not maintained a pattern or practice of age discrimination."18 (emphasis supplied).

However, even assuming — as the Trial Plaintiffs contend — that the district court erred by rejecting rather than modifying the requested instruction, Trial Plaintiffs have failed to show that they were entitled to the instruction. Trial Plaintiffs simply failed to show, either through statistics or anecdotal evidence, that anything other than "sporadic and individual" acts of discrimination occurred. In fact, the jury reasonably concluded that Trial Plaintiffs had failed to show any individual discrimination.

B. Pattern or Practice Evidence

1. Standard of Review

Next Trial Plaintiffs complain of the exclusion of certain witnesses.

A trial judge's ruling on the admissibility of evidence is generally reviewed for an abuse of discretion. Jon-T Chems., Inc. v. Freeport Chem. Co., 704 F.2d 1412, 1417 (5th Cir.1983). When the admissibility determination necessarily involves a legal decision, this Court should consider the validity of the underlying legal analysis. See United States v. Beechum, 582 F.2d 898, 909-18 (5th Cir.1978) (en banc), cert. denied, 440 U.S. 920, 99 S.Ct. 1244, 59 L.Ed.2d 472 (1979); United States v. Robinson, 700 F.2d 205, 210 (5th Cir.1983), cert. denied, 465 U.S. 1008, 104 S.Ct. 1003, 79 L.Ed.2d 235 (1984). "We will not reverse a district court's evidentiary rulings unless they are erroneous and substantial prejudice results. The burden of proving substantial prejudice lies with the party asserting error." FDIC v. Mijalis, 15 F.3d at 1318-19.

2. Analysis

Trial Plaintiffs assert that the district court abused his discretion by excluding ten19 anecdotal witnesses relating to their pattern or practice claim. We must start with the district court's ruling on the issue.

We next note that, as a general rule, anecdotal testimony of individual acts of discrimination is admissible to bolster statistical evidence of disparate treatment. See e.g. Teamsters, 431 U.S. at 338, 97 S.Ct. at 1856. However, to be relevant the evidence must have a "tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence." Fed.R.Evid. 401.

As set forth above, Trial Plaintiffs' burden under the "pattern or practice" methodology was to show that discrimination "was the company's standard operating procedure — the regular rather than the unusual practice." Teamsters, 431 U.S. at 336, 97 S.Ct. at 1855. Thus, to show relevancy, Trial Plaintiffs had to show that the proffered anecdotal witnesses were sufficiently similar to themselves so that the witnesses' testimony would have a tendency to show "standard [discriminatory] operating procedure" and a "regular rather than unusual practice" of discrimination.

Testimony of anecdotal witnesses with different supervisors, working in different parts of the company was simply too attenuated to relate to this threshold issue. Because of their dissimilarity to the Trial Plaintiffs, instead of providing testimony of a company-wide pattern or practice, the excluded anecdotal witnesses' testimony would simply have been evidence of "sporadic and isolated" occurrences. Because the witnesses were not relevant to the Trial Plaintiffs' burden, we find no abuse of discretion in their exclusion.

V. EXCLUSION OF REBUTTAL TESTIMONY

Trial Plaintiffs next argue that the district court erred by refusing to allow Dr. Erich Prien (Prien) to testify as a rebuttal witness.

A. Standard of Review

While our review is for abuse of discretion, we have previously developed a four part test to determine whether the district court properly excluded expert testimony.

EEOC v. General Dynamics Corp., 999 F.2d 113 (5th Cir.1993).

B. Analysis

Trial Plaintiffs failed to designate Prien prior to the district court's deadline for designation of expert witnesses. As excuse for the late designation, Trial Plaintiffs asserted that they could not have recognized the necessity of his testimony prior to the designation of Appellee's experts. Trial Plaintiffs made no effort to have Prien designated as an expert for their case in chief, but instead moved to designate him as a rebuttal expert witness. In their motion for leave, Appellants set forth the scope of their designation of Prien:

(citations to record omitted). At trial, Appellees elected not to call Jeanneret, and the court ruled that Trial Plaintiffs could not call Prien as a rebuttal witness.

Trial Plaintiffs contend that although Jeanneret was not called by Appellees, they should have been allowed to call Prien to rebut the testimony of William Walker who, in part, testified to his experience with the Aramco performance appraisal system. After reviewing the relevant portions of Walker's testimony, we conclude that he did not testify to matters within the scope of the designation set out by Trial Plaintiffs. Walker did not testify as an expert witness, did not testify to the use of the force ranking system to determine terminations,20 did not testify to performance appraisal procedures outside of his own department and certainly did not testify to the age neutrality or validity of the performance appraisal system. In short, Prien's testimony was wholly "unimportant" because Appellees' witness provided no testimony within the scope of Prien's designation.

In addition, Appellees would have been greatly prejudiced by Prien's testimony. Although he had been deposed, Appellee's deposition was limited to questions concerning Prien's reaction to Jennerete's report. In other words, at deposition Appellees only questioned Prien regarding matters within the scope of his designation. Because Appellees offered no testimony within the scope of his designation, Prien had nothing to rebut, and any testimony would have been unavoidably prejudicial. We find no abuse of discretion in the district court's exclusion of Prien's testimony.

VI. EXCLUSION OF EX GRATIA CLAIMS

A. Background

Appellants' final argument deals with the last-minute exclusion of their ex gratia claims. The ex gratia claims are based on allegations that Aramco paid employees over the age of 49 substantially smaller severance payments than similar, younger employees with the same length of service. On the first day of trial, the district court granted the Appellee's earlier filed motion to vacate the consolidation order and convert the matter back into seven individual actions. The court held that,

Only one of the original named plaintiffs filed an EEOC charge asserting an ex gratia claim. None of the Trial Plaintiffs filed an EEOC charge asserting the claim, nor did any of the Trial Plaintiffs' complaints assert an ex gratia claim. As stated by the district court,

In an attempt to save their ex gratia claims, Trial Plaintiffs attempted to resurrect a previously filed motion for leave to file a second amended complaint (filed in one of the Delaware cases), which had sought to add a class-wide ex gratia claim. Trial Plaintiffs asserted that filing the second amended complaint would bring them under the "single filing rule" and allow all of the complaints to ride on the single EEOC charge. The district court denied the motion, refused to apply the "single filing rule", and ruled that issues of EEOC charges and limitations would have to be resolved on a case-by-case basis. Trial Plaintiffs argue that the district court thus abused its discretion.

B. Analysis

As we have noted previously, "one cannot take legal action in ADEA cases unless one has filed an administrative charge, in cases arising in Texas, within 300 days of the last act of discrimination." Anson v. Univ. of Tex. Health Science Center, 962 F.2d 539, 540 (5th Cir.1992). However, "[t]he federal courts now universally hold that an individual who has not filed an administrative charge can opt-in to a suit filed by any similarly situated plaintiff under certain conditions." Id. at 541. This so-called "single filing rule" generally allows a plaintiff, who did not file an EEOC charge, to piggyback on the EEOC complaint filed by another person who is similarly situated. In this case, all of the named Trial Plaintiffs filed an individual EEOC charge, but failed to include an ex gratia claim. Trial Plaintiffs now attempt to rely on the ex gratia claim contained in the individual EEOC charge of Robert Olson, a named plaintiff who was not included in the group of Trial Plaintiffs. Whether the single filing rule can be used by someone who actually filed a EEOC charge to append an additional claim appears to be a matter of first impression.

"It is uncontroversial that the `single filing rule' is not limited to class actions but also can permit a plaintiff to join individual ADEA actions if the named plaintiff filed a timely administrative charge to permit `piggybacking' by the joining plaintiff." Howlett v. Holiday Inns, 49 F.3d 189, 195 (6th Cir. 1995). Two conditions must be satisfied. First, the person attempting to piggyback must be similarly situated to the person who actually filed the EEOC charge.21 See Anson, 962 F.2d at 541. Second, the charge must provide notice of the collective or classwide nature of the charge. See id. at 541-43. There is no dispute that Olson's EEOC charge contained language purporting to make the ex gratia claim class-wide, however, that does not end our inquiry.

The policy behind the single filing rule is that "[i]t would be wasteful, if not vain, for numerous employees, all with the same grievance, to have to process many identical complaints with the EEOC." Oatis v. Crown Zellerbach Corp., 398 F.2d 496, 499 (5th Cir.1968). As long as the EEOC and the company are aware of the nature and scope of the allegations, the purposes behind the filing requirement are satisfied and no injustice or contravention of congressional intent occurs by allowing piggybacking. However, where the party wishing to piggyback has filed his own EEOC charge, policy cuts the other way.

Once the charge is filed, unless it is permissibly modified, the EEOC and the employer are entitled to rely on the allegations contained therein. To allow a plaintiff to file an EEOC charge, file suit upon that charge and then, at the eleventh hour, when the statute of limitations has run, to amend his complaint in reliance on the charge of another belies the policies behind the single filing rule and controverts congressional intent. The employee, by failing to assert a particular allegation in his charge, has necessarily excluded himself from the class of persons purportedly covered by the charge of another. As a result, the EEOC and the employer are given no notice and no opportunity to remedy his complaint. He is bound by the parameters of his own EEOC charge, and cannot subsequently utilize the single filing rule to avoid the statute of limitations.22 Because the single filing rule was inapplicable, the district court properly denied Trial Plaintiffs' motion for leave to amend.

VII. CONCLUSION

For the reasons set forth herein, we affirm the orders and rulings of the district court.

AFFIRMED.