Goudeau v. National Oilwell Varco, L.P: The importance and use of “stray remarks” in employment discrimination cases.

Goudeau v. National Oilwell Varco, L.P: The importance and use of “stray remarks” in employment discrimination cases.

by Siju Philip

In Goudeau v. National Oilwell Varco, L.P., the Fifth Circuit addressed stray remarks in age-based discrimination claims. 793 F.3d 470 (5th Cir. 2015). Goudeau, the plaintiff, brought age discrimination claims against his former employer, National Oilwell Varco (NOV) under the ADEA and the TCHRA.1 The Fifth Circuit reversed in part and affirmed in part the Southern District of Texas, Houston Division, decision, reversing summary judgment in favor of NOV on Goudeau’s age-based discrimination claims.

Goudeau sued NOV after he was terminated at the age of 57. He had worked for ReedHyaclog, which was purchased by NOV, for 18 years, working his way up from mechanic to maintenance supervisor. 17 of those 18 years, three of which were with NOV, were without disciplinary action. About one year before Goudeau was terminated, Perkins became Goudeau’s supervisor. Subsequently, Perkins and Goudeau had the following interactions:

  • Perkins said, “there sure are a lot of old farts around here;”
  • Perkins said that he planned to fire two older employees, after asking Goudeau their ages and how long they had been working there (both were fired, one for performance problems and one for failing a random alcohol test);
  • Perkins, knowing Goudeau smoked, asked if the smoking area was, “where the old people meet;”
  • Perkins remarked that Goudeau wore, “old man clothes;” and
  • Perkins referred to Goudeau as an “old fart.”

After learning that Perkins intended to fire his older colleagues, Goudeau complained to human resources. Perkins then began taking disciplinary action against Goudeau. In January 2011, Goudeau got a written warning for failure to complete a task Perkins asked him to do. In March 2011, Perkins gave Goudeau a bad performance review. Perkins created three additional disciplinary action warnings for Goudeau for events in June and July 2011, though all were dated July 15, 2011. Perkins created another written warning dated August 10, 2011. All of the warnings were related to insubordination or poor job performance, though some did not relate to Goudeau’s job responsibilities. In contravention of company policy, Goudeau did not see any of the June–August warnings until the August 11, 2011 meeting at which he was terminated.

The Court analyzed the issues under Federal law, applying the McDonnell Douglas test, because Texas law was less stringent. See McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802 (1973); see also Machinchik v. PB Power, Inc., 398 F.3d 345, 350 (5th Cir. 2005). Under McDonnell Douglas, a plaintiff claiming discrimination must show he was: (1) discharged; (2) qualified for the position; (3) within a protected class at the time of discharge; and (4) either (a) replaced by someone outside the protected class; (b) replaced by someone younger; or (c) otherwise discharged due to his age. McDonnell Douglas, 411 U.S. at 803; Machinchik, 398 F.3d at 350. If a plaintiff makes this showing, then the burden shifts to the employer to articulate a legitimate, non-discriminatory reason for the termination. McDonnell Douglas, 411 U.S. at 803; Machinchik, 398 F.3d at 354. If the employer does so, the burden shifts back to the employee to show that these reasons are merely pretext for discrimination. McDonnell Douglas, 411 U.S. at 804; Machinchik, 398 F.3d at 354. The parties did not dispute that the first three elements of the McDonnell Douglas test were satisfied, but disputed whether there was sufficient evidence that Goudeau was otherwise discharged because of his age. Goudeau’s only summary judgment evidence of discrimination was the stray remarks above, and Perkins’ discharge of the two other older employees Perkins mentioned he wanted to fire. The parties also disputed whether there was sufficient evidence that the reasons asserted for termination were pretextual.

Because the stray remarks at issue were circumstantial, not direct, evidence of discrimination, and were just one part of the evidence, the Court applied a more flexible standard than the CSC Logic test proposed by the parties. See Brown v. CSC Logic, Inc., 82 F.3d 651, 655 (5th Cir. 1996).2 Stray remarks can be sufficient circumstantial evidence of discrimination, when they show: (1) discriminatory animus, (2) on the part of a person who (a) is primarily responsible for the challenged employment action, or (b) has influence or leverage over the decision-maker. See Squyres v. Heico Cos., L.L.C., 782 F.3d 224, 236 (5th Cir. 2015). The Fifth Circuit noted that the Texas Supreme Court has not spoken on this issue, but that state courts would likely follow this test for considering discriminatory remarks in circumstantial cases. See Reed v. Neopost USA, Inc., 701 F.3d 434, 442 n.6 (5th Cir. 2012); see also Machinchik; 398 F.3d at 353. Perkins’ comments, easily meet this standard.  Evidence that Perkins did fire the two “old farts” who Perkins told Goudeau he planned to fire, supported the finding that Goudeau was discharged due to his age, satisfying the fourth element of the McDonnell Douglas test.

Once Goudeau made this prima facie showing, under the McDonnell Douglas test, the burden shifted to NOV to provide a non-discriminatory reason for the termination. NOV asserted that Goudeau was fired not for his age, but due to poor performance and insubordination. The burden then shifted back to Goudeau to show that these reasons were not the true reasons for his discharge, but merely a pretext for discrimination. See Squyres, 782 F.3d at 231. The Court advised that the pretext inquiry asks whether there is sufficient evidence demonstrating the falsity of the employer’s explanation, along with the prima facie case, to allow a jury to find that discrimination was the but-for cause of the termination. The Court found that a jury could determine that Goudeau was fired due to his age, based on the following evidence: (1) the warnings regarding his job performance were, (a) not related to tasks within his job duties, and (b) were largely not given to him until the day he was fired though they occurred prior to that meeting; (2) Perkins’ ageist remarks; and (3) Perkins firing two other “old farts.” The Fifth Circuit therefore reversed summary judgment on this issue.

The Court reached this conclusion because it considered the evidence in two ways that the Southern District did not. First, the lower court did not consider the stray ageist remarks in determining whether the non-discriminatory reasons for Goudeau’s termination were pretextual, though the strength of the prima facie case of discrimination may be considered at the pretext stage. Reeves v. Sanderson Plumbing Prods. Inc., 530 U.S. 133, 143, 147–48 (2000); Russell v. McKinney Hosp. Venture, 235 F.3d 219, 225 n.9 (5th Cir. 2000). Second, the lower court did not consider that NOV had a disciplinary system which involves warnings (presumably to give the employee an opportunity to correct the problem and keep his job), which it did not follow in this instance. Goudeau’s evidence showed NOV’s failure to follow steps in its discipline policy, as well as possible steps taken to conceal such failure, by papering the file after the termination decision. This may give rise to an inference of pretext.

The Goudeau decision shows how important stray remarks can be to a plaintiff’s case, especially if they are paired with discriminatory conduct.

However, Goudeau must be considered in its procedural context. Goudeau came to the Fifth Circuit on appeal of a summary judgment in the defendant’s favor. The Court noted more than once that its decision was rooted in its obligation to credit Goudeau’s testimony and make inferences regarding the evidence in Goudeau’s favor. Had this been an appeal from a decision granting summary judgment in favor of Goudeau, the outcome may have been different. That said, Goudeau makes clear that stray remarks can serve as circumstantial evidence of both discriminatory motive in the termination and of the pretextual nature of non-discriminatory reasons for the termination, under Federal and Texas law.

No information in this article is intended to constitute legal advice. For specific legal advice, please contact an attorney.

If you have any questions or would like more information about stray remarks in the context of employment discrimination or employment discrimination claims, please contact Jessica Levy  at 713.220.9107 or jlevy@hirschwest.com.

[1] The Fifth Circuit affirmed the district court’s dismissal of Goudeau’s retaliation claim, so it is not addressed herein.

[2] The CSC Logic test is not used in the Fifth Circuit where stray remarks are used as circumstantial evidence of discrimination. Ihegword v. Harris Cnty. Hosp. Dist., 929 F. Supp. 2d 635, 647 (S.D. Tex. 2013); see also Russell v. McKinney Hosp. Venture, 235 F.3d 219, 226 (5th Cir. 2000).