Opinion
No. 2 CA-CV 2015-0003
11-18-2015
JOAN KELLY, A SINGLE WOMAN, Plaintiff/Appellant, v. CANYON RANCH, INC., AN ARIZONA CORPORATION, AND ZC MANAGEMENT, LLC, AN ARIZONA LIMITED LIABILITY COMPANY, Defendants/Appellees.
COUNSEL Waterfall, Economidis, Caldwell, Hanshaw & Villamana, P.C., Tucson By Jenne S. Forbes Counsel for Plaintiff/Appellant Bossé Rollman PC, Tucson By Richard M. Rollman and Richard A. Brown Counsel for Defendants/Appellees
Appeal from the Superior Court in Pima County
No. C20126675
The Honorable Charles V. Harrington, Judge
AFFIRMED
COUNSEL Waterfall, Economidis, Caldwell, Hanshaw &
Villamana, P.C., Tucson
By Jenne S. Forbes
Counsel for Plaintiff/Appellant
Bossé Rollman PC, Tucson
By Richard M. Rollman and Richard A. Brown
Counsel for Defendants/Appellees
MEMORANDUM DECISION
Judge Howard authored the decision of the Court, in which Presiding Judge Vásquez and Judge Kelly concurred. HOWARD, Judge:
The Hon. Virginia C. Kelly, a retired judge of this court, is called back to active duty to serve on this case pursuant to orders of this court and our supreme court.
¶1 Joan Kelly appeals from the trial court's grant of summary judgment in favor of Canyon Ranch, Inc. and ZC Management, LLC ("Canyon Ranch") on her claim of gender discrimination. On appeal, Kelly argues the court erred because it applied an incorrect standard to evaluate the evidence and that, under the correct standard, she presented a genuine issue of material fact as to whether Canyon Ranch's purported legitimate, nondiscriminatory reason for her termination was pretextual. Because we find no error, we affirm.
Factual and Procedural Background
¶2 We view the facts in the light most favorable to Kelly, the nonmoving party below. See Keonjian v. Olcott, 216 Ariz. 563, ¶ 2, 169 P.3d 927, 928 (App. 2007). Kelly began working for Canyon Ranch in 1994 as Chief Engineer. In 2000, she transferred to the Lenox, Massachusetts facility and received a promotion which was equivalent to the Facilities Director position at the Tucson location. Five years later, she returned to Canyon Ranch's Tucson location as Project Manager, overseeing residential construction.
¶3 In 2007, the Facilities Director at the time, Larry Erzen, was re-assigned to oversee various special projects around the facility, and Kelly was promoted to Facilities Director. The Facilities Director oversees both the engineering and grounds departments. In 2009, Erzen's special projects ended and he returned to the position of Facilities Director. Kelly was re-assigned as Chief Engineer.
¶4 Carl Goforth began his employment at Canyon Ranch in 1995 as a carpenter. He later was promoted to Building Maintenance Supervisor, then Assistant Chief Engineer, and then Chief Engineer in 2003. When Kelly was re-assigned as Chief Engineer in 2009, Goforth became the Senior Maintenance Supervisor.
¶5 In 2011, Erzen announced his plan to retire and Kelly expressed her interest in taking over the position to Jerrold Cohen, Vice-Chairman and Chief Executive Officer of Canyon Ranch. Erzen officially retired on July 1, and a few days later Kelly was named the interim Facilities Director. She received a temporary pay increase to reflect her new responsibilities.
¶6 Prior to Erzen's retirement, Cohen, Sandra Foyil—vice-president of human resources at Canyon Ranch—and Mel Zuckerman—co-owner of Canyon Ranch, along with his wife, Enid—met to discuss Erzen's replacement. They considered Kelly and Goforth for the position or, alternatively, conducting a search outside of Canyon Ranch.
¶7 Around the same time discussions over Erzen's successor were taking place, Cohen and Foyil discussed the use of 360 Degree "Leadership Mirror" Reviews ("360 Reviews") to evaluate the management staff. They had used 360 Reviews previously but the engineering and grounds departments had not been included in the last survey. Initially, they selected approximately twenty managers from four different departments to be subjects of the survey. Because they were unable to secure funding to complete twenty reviews, Cohen and Foyil decided to focus on the engineering and grounds departments, selecting Kelly, Goforth, three other engineering supervisors, and the grounds supervisor.
¶8 360 Reviews are given to employees for the purpose of evaluating their supervisors, particularly the supervisor's leadership ability. The reviews can help "determine how a leader is doing with their own department" and if they are "motivating people that they supervise, . . . providing a vision for those people, [and] . . . properly communicating the company culture." And they can also "be used to evaluate whether a candidate is well suited for a promotion opportunity . . . if the leadership ability is very important to that position." And because the reviews were conducted anonymously, they also provided "a vehicle for employees to express concerns that they didn't feel otherwise able to express."
¶9 The process originally was described to the management staff, including Kelly and Goforth, as follows: employees would receive an e-mail with an identification code and password which would allow them to complete the reviews on a computer or, alternatively, the employee could choose to complete the review manually. If an employee did not have access to a company e-mail address or a computer, a paper survey would be distributed. The reviews would be completed anonymously and, once completed, sent to a third-party for input into a computerized system which would generate a report for management at the Tucson location. The supervisors were told they would rate themselves and each other, and they each could select the staff members who would evaluate them. Supervisory staff also was told the reviews were being used "to assess competencies and [determine] what training would be needed after that and to develop manager training."
¶10 On July 28, 2011, the engineering department was asked to gather the staff in order to distribute paper versions of the review. Staff members were told to fill out the reviews and return them to either Cohen or the human resources mailbox by August 1. Staff members who were not present at that meeting were sent the reviews by overnight mail. After the reviews were completed, but before they were sent to the third-party for data entry, Cohen opened and reviewed a majority of Kelly's reviews.
¶11 Foyil received the report memorializing the 360 Review results in mid-September 2011. The rating scale used by participants ranged from 1, which meant "very low level" of proficiency, to 5, which meant "very high level" of proficiency. According to Foyil, a score of five is very rare, four is what she would look for in a department head, "[t]hree is average [and] . . . [t]wo is low."
¶12 Kelly's scores ranged from 2.97 to 3.21. Although she received several positive comments from the respondents, the comments were overwhelmingly negative. Comments included, for example:
• "In the many years working with [Kelly] her inability to effectively run the department has become apparent. Needs tremendous improvement in all areas. . . . [Her m]anagement style is extremely ineffective."
• "I firmly believe if she is left in this position the facilities and grounds department[s] are in serious trouble."
• "Kelly is not a very competent leader in most all aspects of the Facilities and Grounds department[s]. She overreacts . . . on matters that have little importance . . . . [and s]eems to only make things important if it will make her look good"; "She only worries about things that make her look good."
• She is "[u]nable to make decisions without other staff's opinions"; She "can't make a decision without Carl"; "[S]he can't handle making wise decisions without a 'side kick'"; "Does not have the ability to think by herself and come up with sound decisions."
• Erzen "made a big mistake when he put [Kelly] in charge of the department."
• Kelly "spent so much time showing all of us a deep hatred for the way things are done here - Housekeeping are idiots, [Treat] is an idiot, [Canyon Ranch] is run by a group of women haters, etc. . . . We are all so worried she will see these reviews and figure out who wrote them that we are having others write[] them or typing them. She does not have our respect as a professional and is not a good choice to replace Larry Erzen."
• Kelly "tends to panic at times over small projects"; "[e]very project considered panic situation"; "[s]he panics very easily."
• "[Kelly] has a habit of saying one thing to you and the minute [you're] gone, it's completely the opposite. I cannot trust her verbal word. I am not confident in her ability."
• "Talks about everyone behind their backs, not professional. Lacks ability to build teamwork. Lowers morale of employees."
• Kelly "has demonstrated poor judgment in making decisions time and time again. It's scary to see what we have built in the Engineering Department go down the drain so to speak due to someone's inability to manage."
• "She places blame on staff when things don't go her way"; "If something goes wrong, she blames someone else for it"; "She will not accept fault. Someone else is always to blame."
¶13 Goforth's scores ranged from 3.55 to 4.00. The comments on Goforth were mixed, but overall he received more positive than negative comments.
¶14 After receiving the report, Canyon Ranch offered Goforth the Facilities Director position and planned to terminate Kelly. Goforth initially said his acceptance would depend on the compensation, but later declined the position outright and said he and Kelly were a "team." Canyon Ranch then offered Kelly and Goforth a "co-directorship," which they both accepted at the time. Kelly and Goforth's new salaries were calculated by combining Kelly and Goforth's base salaries, adding $5,000 and dividing that total in half. The result was that Goforth would receive an annual raise of approximately $16,000, while Kelly's annual salary would be reduced by nearly $12,000.
¶15 The following day, Goforth and Kelly indicated they were not happy with the proposed salaries. Kelly stated she would take the co-directorship position, but for slightly more than her current salary. Before she received an answer, Kelly withdrew that offer, and stated she wished to "be promoted to sole director of facilities" and receive an annual raise of $16,000. Two days later, Cohen sent Kelly a letter stating that the co-directorship was the only position available to her, and because she had declined it, he had concluded she was resigning and accepted that resignation.
¶16 Kelly subsequently sued Canyon Ranch alleging, among other claims, it had discriminated against her on the basis of her gender in violation of Title VII, 42 U.S.C. § 2000e-2. Canyon Ranch moved for summary judgment, contending that it had met its burden of providing a legitimate and nondiscriminatory reason for not promoting Kelly, and that Kelly had failed to meet her burden of showing that reason was pretextual. Kelly conceded that Canyon Ranch had met its burden, but argued that the reason given was "unworthy of credence," which raised the inference that it was a pretext for discrimination. The trial court granted Canyon Ranch's motion. We have jurisdiction over Kelly's appeal pursuant to A.R.S. §§ 12-120.21(A)(1) and 12-2101(A)(1).
Standard of Review
¶17 On appeal from summary judgment, we determine de novo whether the trial court correctly applied the law and whether there are any genuine disputes as to any material fact. See Dayka & Hackett, LLC v. Del Monte Fresh Produce N.A., Inc., 228 Ariz. 533, ¶ 6, 269 P.3d 709, 711-12 (App. 2012). In a de novo review, "we are not bound by any issues of law decided by the trial court and will determine such issues anew." Anderson v. Country Life Ins. Co., 180 Ariz. 625, 628, 886 P.2d 1381, 1384 (App. 1994). Summary judgment is appropriate when "the moving party shows that there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law." Ariz. R. Civ. P. 56(a).
"Specific" and "Substantial" Evidence
¶18 Kelly first argues the trial court "misinterpreted the concept of 'specific, substantial evidence of pretext' and created an impossibly, and impermissibly, high threshold on summary judgment." She appears to contend that "the court seems almost to have equated 'specific' and 'substantial' with direct evidence of discrimination and thus applied an elevated and improper standard."
¶19 Claims of gender discrimination brought under Title VII are subject to the burden-shifting framework established in McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973). The employee carries the initial burden of establishing a prima facie case of gender discrimination by showing (1) she belongs to a protected class, (2) she was qualified for the position, (3) she was subject to adverse employment action, and (4) similarly situated individuals outside her protected class were treated more favorably. Id. at 802. Once the prima facie case is established, a presumption arises that the employer unlawfully discriminated against the employee. Wallis v. J.R. Simplot Co., 26 F.3d 885, 889 (9th Cir. 1994). Canyon Ranch concedes that Kelly has met her initial burden.
¶20 The burden then "shift[s] to the employer to articulate some legitimate, nondiscriminatory reason for the employee's rejection." McDonnell Douglas, 411 U.S. at 802. The parties do not dispute that Canyon Ranch's reasons—Kelly's negative 360 Reviews, along with a few previous incidents which gave Cohen doubt as to Kelly's ability to lead the departments—are sufficient to meet its burden. Once the employer offers a non-discriminatory reason, it has carried its burden of production, and any presumption of discrimination created by the prima facie case "'simply drops out of the picture.'" Wallis, 26 F.3d at 889, quoting St. Mary's Honor Ctr. v. Hicks, 509 U.S. 502, 511 (1993).
¶21 The next phase of the McDonnell Douglas framework is at issue here: after the employer proffers a legitimate, nondiscriminatory reason for the adverse employment action, the burden shifts back to the employee to show that the employer's purported reason is a pretext for discriminatory conduct. McDonnell Douglas, 411 U.S. at 804. "[A] plaintiff can prove pretext in two ways: (1) indirectly, by showing that the employer's proffered explanation is 'unworthy of credence' because it is internally inconsistent or otherwise not believable, or (2) directly, by showing that unlawful discrimination more likely motivated the employer." Chuang v. Univ. of Calif., Bd. Of Trustees, 225 F.3d 1115, 1127 (9th Cir. 2000), quoting Godwin v. Hunt Wesson, Inc., 150 F.3d 1217, 1220 (9th Cir. 1998); see also Texas Dep't of Cmty. Affairs v. Burdine, 450 U.S. 248, 256 (1981).
¶22 At this stage, "the only issue remaining in a disparate treatment case . . . is 'discrimination vel non.'" Cornwell v. Electra Cent. Credit Union, 439 F.3d 1018, 1030 (9th Cir. 2006), quoting McGinest v. GTE Serv. Corp., 360 F.3d 1103, 1123 (9th Cir. 2004). Thus, "[u]nder either approach, [the employee] must produce some evidence suggesting that [the employer's] failure to promote [her] was due in part or in whole to discriminatory intent, and so must counter" the employer's nondiscriminatory explanation for its action. McGinest, 360 F.3d at 1123.
¶23 When a plaintiff relies on circumstantial evidence to show "the employer's motives were different from its stated motives, [courts] require 'specific' and 'substantial' evidence of pretext to survive summary judgment." Stegall v. Citadel Broadcasting Co., 350 F.3d 1061, 1066 (9th Cir. 2003), quoting Godwin, 150 F.3d at 1222. Specific, substantial evidence is that which would create "a genuine issue of material fact as to pretext." Wallis, 26 F.3d at 890; see also Ariz. R. Civ. P. 56(a).
¶24 At the summary judgment stage, "'very little[] evidence is necessary to raise a genuine issue of fact regarding an employer's motive; any indication of discriminatory motive . . . may suffice to raise a question that can only be resolved by a fact-finder.'" McGinest, 360 F.3d at 1124, quoting Schnidrig v. Columbia Mach., Inc., 80 F.3d 1406, 1409 (9th Cir. 1996) (alterations in McGinest). When a number of factors "cast doubt upon [the employer's] proffered explanation . . . , while providing support for [the employee's] contention regarding [gender] discrimination, [the employee] has met his burden of showing" a genuine issue of material fact regarding discriminatory intent. Id. at 1124; see also St. Mary's Honor Ctr., 509 U.S. at 515 ("[A] reason cannot be proved to be 'a pretext for discrimination' unless it is shown both that the reason was false, and that discrimination was the real reason."). Conversely, if an employee fails "to produce any specific, substantial evidence of pretext and that [gender] was a determining factor in the decision," summary judgment is appropriate. Steckl v. Motorola, Inc., 703 F.2d 392, 393 (9th Cir. 1983).
¶25 Here, the trial court, in its ruling, quoted Coleman v. Quaker Oats Co., for the proposition that a plaintiff must produce "'specific, substantial evidence of pretext'" when attempting to show an employer's proffered reasons were pretextual. 232 F.3d 1271, 1282 (9th Cir. 2000), quoting Steckl, 703 F.2d at 393. It then went on to point out that Kelly was relying primarily on purported irregularities in the administration of the 360 Reviews to meet her burden. In doing so, the court noted that, "[f]or an inference of pretext to arise on the basis of procedural irregularity, . . . there must be some evidence that the irregularity 'directly and uniquely disadvantaged a minority employee.'" Johnson v. Weld County, Colo., 594 F.3d 1202, 1213 (10th Cir. 2010), quoting Randle v. City of Aurora, 69 F.3d 441, 454 n.20 (10th Cir. 1995). Kelly has not argued that either of these cases are incorrect or misrepresent the law.
¶26 The trial court then analyzed each of the irregularities Kelly pointed out and discussed whether they raised the inference that the surveys were pretextual or whether the procedure uniquely and directly disadvantaged her. The court ultimately concluded that "none of these irregularities, alone or taken together, constitutes the kind of specific and substantial evidence that Ms. Kelly requires to sustain her burden of production."
¶27 Kelly's argument appears to be that the trial court incorrectly refused to infer "that Cohen had tampered with the raw surveys when they were in his possession . . . from all the surrounding circumstances relating to the survey administration as well as the reactions from personnel intimately familiar with Kelly's performance." "'An inference is a fact which may be presumed from the proof of the existence or non-existence of other facts. It is a conclusion from a proven fact o[r] facts.'" Martin v. Schroeder, 209 Ariz. 531, ¶ 15, 105 P.3d 577, 581 (App. 2005), quoting Buzard v. Griffin, 89 Ariz. 42, 48, 358 P.2d 155, 159 (1960); see also Black's Law Dictionary 897 (10th ed. 2014) (inference is "[a] conclusion reached by considering other facts and deducing a logical conclusion from them.").
¶28 The facts Kelly points to—changes in the administration of the 360 Reviews and her co-workers' surprise at the results—do not reasonably lead to the inference that Cohen tampered with the reviews he had opened. Testimony from respondents that their answers to the reviews had been changed, on the other hand, would be specific and substantial circumstantial evidence supporting an inference that Cohen changed them. But Kelly did not provide that evidence. Rather, she relies solely on speculation and "[s]peculation that some slight doubt, scintilla of evidence, or dispute over irrelevant or immaterial facts might blossom into a real controversy at trial is insufficient to forestall summary judgment." Menendez v. Paddock Pool Constr. Co., 172 Ariz. 258, 269, 836 P.2d 968, 979 (App. 1991).
¶29 Therefore, the trial court applied the correct legal standard when it found that Kelly did not provide specific and substantial circumstantial evidence, and did not, as Kelly claims, equate the specific and substantial standard with direct evidence of discrimination. See Dayka & Hackett, 228 Ariz. 533, ¶ 6, 269 P.3d at 711-12. Furthermore, we review the trial court's legal conclusions de novo. Anderson, 180 Ariz. at 628, 886 P.2d at 1384. Thus, any defect in that reasoning would be rendered harmless by our decision. Byars v. Ariz. Pub. Serv. Co., 24 Ariz. App. 420, 425, 539 P.2d 534, 539 (1975) (summary judgment reviewed for harmless error); see also Logerquist v. Danforth, 188 Ariz. 16, 18, 932 P.2d 281, 283 (App. 1996) (court of appeals will affirm trial court's ruling on summary judgment if "correct for any reason").
Canyon Ranch's Honest Belief
¶30 Kelly next contends the trial court erred in applying the "honest belief" concept articulated in Villiarimo v. Aloha Island Air, Inc., 281 F.3d 1054, 1063 (9th Cir. 2002), when analyzing Canyon Ranch's other purported reasons for its actions. Cohen testified in his deposition that the 360 Reviews confirmed his suspicions that Kelly was not suitable for the Facilities Director position based primarily on three prior incidents.
¶31 In one incident, Cohen had read a guest survey that mentioned the breakfast muffins were not ready on a particular date. According to Erzen, on that particular date, the ovens had not been working and no engineering personnel were available until 8:00 a.m., although the muffins typically were prepared around 5:00 or 6:00 a.m. Erzen said that Kelly had rearranged the engineers' schedules because she "didn't trust the employees" to work when she was not directly supervising them, and thus did not schedule the engineers to start until she arrived each day. Cohen never discussed the issue with Kelly and relied on Erzen's version of events.
¶32 The next incident involved a maintenance truck that had not been repaired. Kelly chose not to have the truck repaired immediately because her department had exceeded its maintenance budget for the month, and so the repairs were being delayed. Cohen did not discuss the issue directly with Kelly and instead spoke to Erzen, who was supervising Kelly at the time. Mel Zuckerman later spoke with Kelly about the incident and explained that the "budget was a guide to follow and not the final word."
¶33 The last incident involved a conversation between Cohen, Kelly, Foyil, and Kyle Treat—general manager of Canyon Ranch—during which Cohen stated he was upset with an action Goforth had taken and that he wanted to terminate Goforth. Kelly repeated that statement to Goforth, who then confronted Cohen about it. Cohen considered Kelly's actions a breach of confidentiality.
¶34 Kelly claims these stories are inaccurate. She contends the "muffin incident" occurred because she changed the schedule of the employee who normally would have been available at 5:00 a.m. to a later start time "so that he would be present to handle problems that often came up after he would otherwise have left." Additionally, she asserts, the baker was unable to make muffins that day because the lock on the pantry was broken, and not because the oven was broken.
¶35 As for the truck incident, Kelly claims that because "we were right at our spending limit in the Auto line of the department budget . . . I decided to park a truck rather than immediately send[] it out for service." She contends the truck "would have been parked for less than 10 days [and] . . . there was never any issue with guest or employee safety or convenience." Lastly, as for the breach of confidentiality, Kelly contends "[t]here was absolutely no indication that the discussion or Cohen's threat was confidential in any way."
¶36 In Villiarimo, the plaintiff was a ramp supervisor for Aloha Island Air, Inc. ("Aloha"). 281 F.3d at 1058. During one of her shifts, she and another employee seriously damaged an airplane. Id. During the ensuing investigation, Villiarimo claimed she had left her position at the front of the aircraft to assist the other employee. Id. Three witnesses claimed, however, she never left her position. Id. According to Aloha, Villiarimo was terminated, in part, for lying during the ensuing investigation about leaving her post. Id. at 1063. Villiarimo attacked the credibility of those three witnesses. Id. The court found that attack futile because it did not matter "whether Aloha's justifications were . . . objectively false (e.g., whether Villiarimo actually lied)," but only whether Aloha "'honestly believed its reasons for its actions, even if its reason is foolish or trivial or even baseless.'" Id., quoting Johnson v. Nordstrom, Inc., 260 F.3d 727, 733 (7th Cir. 2001). Because Villiarimo had not presented any evidence that Aloha did not honestly believe the witnesses, her attacks on the witness's credibility were "unavailing." Id.
¶37 Kelly similarly has not presented any evidence, outside of her conclusory accusation, that Canyon Ranch did not honestly believe the three incidents happened as described. The question is not whether the versions Canyon Ranch relied upon were "objectively false." Id. Even if the reasons were "'foolish or trivial or even baseless,'" the pertinent question is whether Canyon Ranch "'honestly believed'" them. Id., quoting Nordstrom, 260 F.3d at 733-34. Other than Kelly's denials, which confirm substantial parts of the allegations, no evidence indicates that Canyon Ranch did not honestly believe these three incidents occurred as Cohen described and that they reflected poorly upon Kelly's ability to be the Facilities Director. See Cornwell, 439 F.3d at 1028 n.6 ("A plaintiff may not defeat a defendant's motion for summary judgment merely by denying the credibility of the defendant's proffered reason for the challenged employment action."). Accordingly, the trial court correctly applied Villiarimo and we reject Kelly's argument.
¶38 Kelly additionally argues Canyon Ranch cannot rely upon the honest belief doctrine because neither Cohen's declaration prepared for the Equal Employment Opportunity Commission ("EEOC") nor Canyon Ranch's EEOC statement mention these incidents. She reasons the omission demonstrates the reliance on these incidents "was an afterthought and that they were fabricated to bolster Canyon Ranch's decision not to promote Kelly." It thus appears her contention is that Canyon Ranch in fact did not honestly believe those incidents had occurred when it decided to not promote her.
¶39 An employer who "simply supplement[s] its explanations in the context of EEOC charges and litigations" but does not retract any of its reasons, does not give rise to an inference of pretext. Nordstrom, 260 F.3d at 733-34; see also Nidds v. Schindler Elevator Corp., 113 F.3d 912, 918 (9th Cir. 1997) (presence of "shifting" or different justifications for employer's actions not sufficient to defeat summary judgment when those justifications are "not incompatible"). In its statement to the EEOC, Canyon Ranch stated that, based on the 360 Reviews "and because Canyon Ranch's senior executives questioned [Kelly's] ability to perform the Director of Facilities job," she was not offered the position. It goes on to note that when Kelly was named interim Facilities Director, Cohen "did not fully trust Ms. Kelly's leadership skills and he did not have faith and confidence in her ability to fulfill the duties of the Director of Facilities position . . . based on her more recent performance at the Tucson facility." Additionally, Foyil testified that Cohen had mentioned to her, prior to Erzen's retirement, his concerns about Kelly related to these three incidents. Treat also testified Cohen had expressed his concerns based on the muffin incident.
¶40 Therefore, although Canyon Ranch did not explicitly describe the three incidents in Cohen's declaration or the EEOC statement, the record shows that Canyon Ranch did not fabricate these incidents only after the start of litigation. Moreover, even had Canyon Ranch raised these issues only after the start of litigation, they are not incompatible with Canyon Ranch's reliance on the 360 Reviews. The 360 Reviews raised concerns about Kelly's ability to lead the engineering and grounds departments. These three prior incidents supported those results. Consequently, Kelly's argument that Canyon Ranch could not have honestly relied on those incidents fails. Nordstrom, 260 F.3d at 733-34; Nidds, 113 F.3d at 918. The trial court thus did not err in applying the honest belief concept as articulated in Villiarimo. See Dayka & Hackett, 228 Ariz. 533, ¶ 6, 269 P.3d at 711-12.
Kelly also appears to argue that Villiarimo stands for a "faulty" honest-belief standard, and that the better approach was articulated by the Sixth Circuit in Smith v. Chrysler Corp., 155 F.3d 799, 807 (6th Cir. 1998). She did not, however, contend Villiarimo was incorrect below or cite Smith to the trial court. Rather, she simply argued that, based on Villiarimo, "Canyon Ranch is not entitled to rely on its alleged honest belief." Thus, any argument related to whether the court should have used the standard articulated in Villiarimo or Smith is waived and we do not address it. Hahn v. Pima County, 200 Ariz. 167, ¶ 13, 24 P.3d 614, 619 (App. 2001).
Specific and Substantial Evidence of Pretext
¶41 Kelly lastly argues the trial court should not have granted summary judgment because "there are disputed issues of material fact requiring resolution by the jury" which give rise to the inference that Canyon Ranch discriminated against her on the basis of her gender. As noted above, we review de novo whether there are any genuine disputes as to any material fact. See Dayka & Hackett, 228 Ariz. 533, ¶ 6, 269 P.3d at 711-12.
¶42 "[I]n the context of Title VII claims, the burden on plaintiffs to raise a triable issue of fact as to pretext is 'hardly an onerous one.'" Noyes v. Kelly Servs., 488 F.3d 1163, 1170 (9th Cir. 2007), quoting Payne v. Norwest Corp., 113 F.3d 1079, 1080 (9th Cir. 1997). Even with this in mind, the plaintiff still must present "specific, substantial evidence of pretext and that [gender] was the determining factor in the decision." Steckl, 703 F.2d at 393.
¶43 For example, in Godwin, the employer's proffered legitimate, nondiscriminatory reason for hiring two male candidates over the female candidate was "because of [the males'] better experience and more 'easygoing' personalities." 150 F.3d at 1220. The court found the plaintiff had provided specific and substantial evidence of pretext by showing that all the evidence supporting the employer's proffered reasons "came from statements, depositions, and declarations prepared after the employment decision was made and while this litigation was in progress," evidence from the time the decision was made was inconsistent with reasons later given, the plaintiff had received generally positive recommendations during the review process, and one of the male employees who ultimately was offered the job had received poor evaluations. Id. at 1222; see also Stegall, 350 F.3d at 1069-72 (finding specific and substantial evidence in timing of termination, discriminatory remarks from manager, and fact only females discharged).
¶44 Conversely, in Steckl, the plaintiff "produced no facts which, if believed, would have shown pretext and thus tendered an issue for trial." 703 F.2d at 393. The employer in that case, Motorola, had stated that Steckl did not receive the management position for which he had applied because the other, younger, candidate had substantially more education, training and experience in the technical areas necessary for the job. Id. at 392-93. "Steckl failed to refute Motorola's evidence that [the other candidate's] experience was compatible with the requirements for the new job." Id. at 393.
¶45 Furthermore, Steckl did not rebut Motorola's contention that, although managers generally needed more "supervisory rather than technical skills, . . . the new position was unique and required a manager with enough technical expertise to be able to develop new product lines and technology with a limited staff and budget." Id. The court noted that "courts are generally reluctant to grant summary judgment in a case in which motivation and intent of a party are at issue." Id. But because Steckl had produced "'no indications of motive and intent, supportive of his position, to put on the scales for weighing,'" summary judgment in Motorola's favor was appropriate. Id., quoting Kephart v. Inst. Of Gas Technology, 630 F.2d 1217, 1218 (7th Cir. 1980).
¶46 Additionally, in Coleman, the plaintiffs alleged, in part, that the subjective rating system used by the employer was "a cover" for illegal discrimination based on their age. 232 F.3d at 1285. They claimed "it did not do a good job of evaluating the employees and other methods, such as standardized testing, would have done better" and offered an expert witness to testify to that same assertion. Id. The court concluded, however, an employer's "unwise business judgments" or use of "a faulty evaluation system" does not support the inference the employer engaged in illegal discrimination. Id. In order to raise the inference that evaluations were used to systematically rank employees of the protected group lower than other employees, plaintiffs would need to provide additional evidence, such as statistical evidence showing "'a stark pattern of discrimination unexplainable on grounds other than age.'" Id. at 1283, quoting Rose v. Wells Fargo & Co., 902 F.2d 1417, 1423 (9th Cir. 1990). Because the plaintiffs failed to do so, their attempt to show the evaluation system was a pretext for discrimination was unavailing. Id. at 1285.
¶47 Kelly first argues disputed issues of material fact exist because she "was by far the most qualified candidate in terms of her background and experience, both before and during her Canyon Ranch employment." Kelly did not raise this point to the trial court, however, and therefore has waived it for review on appeal. See Hahn v. Pima County, 200 Ariz. 167, ¶ 13, 24 P.3d 614, 619 (App. 2001).
¶48 Furthermore, even if the issue were not waived, "[t]he question is not whether [Kelly] in the abstract had better qualifications than [Goforth]. The question is whether [Goforth was] more qualified with respect to the criteria that [Canyon Ranch] actually employs." Cotton v. City of Alameda, 812 F.2d 1245, 1249 (9th Cir. 1987). And, when an employee suggests that "an employer's claim that it hired someone else because of superior qualifications is pretext for discrimination rather than an honestly (even if mistakenly) held belief, a plaintiff must come forward with facts showing an 'overwhelming' 'disparity in qualifications.'" Weld County, 594 F.3d at 1211, quoting Jaramillo v. Colo. Judicial Dep't, 427 F.3d 1303, 1309 (10th Cir. 2005).
¶49 Cohen testified that an important qualification for the Facilities Director position was that a candidate's "overall management style" keeps the staff happy and morale high because "it's critically important to have a dedicated, loyal, competent staff." Kelly has not pointed to any disparity in her and Goforth's qualifications to account for that aspect of the job. And the comments in the 360 Reviews demonstrate Kelly did not keep the staff happy and morale high. Kelly's "'subjective personal judgments of [her] competence alone do not raise a genuine issue of material fact.'" See Coleman, 232 F.3d at 1285, quoting Bradley v. Harcourt, Brace and Co., 104 F.3d 267, 270 (9th Cir. 1996).
¶50 Kelly next contends she never was considered a replacement for Erzen, and Canyon Ranch instead wanted Goforth in the position from the beginning. At oral argument, she pointed to Enid Zuckerman's deposition testimony that, before Erzen retired and before the survey was conducted, she thought Goforth should be promoted. But Enid also testified that she was not involved in managing the facility and was not a decision maker. Her testimony, therefore, does not support Kelly's theory.
¶51 Kelly also reasons her placement as interim Facilities Director raises the reasonable inference that the move "was intended to give Canyon Ranch ownership breathing room to undermine Kelly's candidacy and justify not promoting her." First, we fail to see how Canyon Ranch's decision to give Kelly the interim position shows that it intended to undermine her candidacy. A more reasonable interpretation or inference is that having the interim position improved Kelly's, or any qualified candidate's, chances of receiving the promotion. Second, the record shows that Kelly was considered for the position. Cohen and Foyil each testified in their depositions that both Goforth and Kelly were considered for the position. And Enid Zuckerman only testified that she and Mel did not consider Kelly the "number one" candidate for the position based on their opinion of her past work at Canyon Ranch. This evidence, along with the fact that Kelly was named interim Facilities Director, does not raise the reasonable inference Kelly contends it does.
¶52 Kelly next argues the administration of the 360 Reviews "was modified to permit Canyon Ranch to skew the results against Kelly and thereby justify not promoting her." She contends that some of the irregularities, such as the "rushed" administration, the uncertainty of whom staff members were supposed to review, the use of results for promotional and not solely training purposes, "the lack of confidentiality and anonymity," and the possibility that staff whose primary language was Spanish may not have comprehended the English reviews, undermined the validity of the results.
Kelly contends the 360 Reviews were not anonymous or confidential. However, Foyil testified that staff was instructed to not put their name on the top or otherwise identify themselves in any way. Additionally, the actual reviews themselves do not contain any identifying information indicating who completed the review and the phrase "Confidential Survey" is printed at the bottom of each page of the review.
¶53 These irregularities, however, affected all of the supervisors who were being reviewed. Weld County, 594 F.3d at 1213. They did not "'directly and uniquely disadvantage[]'" her and thus do not give "rise to an inference of pretext for invidious discrimination." Id., quoting Randle, 69 F.3d at 454 n.20. Kelly has not explained, and we fail to see, how the minor procedural irregularities she has identified above lead to the conclusion that the administration of the reviews had been modified. See Martin, 209 Ariz. 531, ¶ 15, 105 P.3d at 581 (inference is fact presumed from existence of other facts).
¶54 Kelly states her primary concern with the administration of the reviews was that "funneling . . . [the] raw surveys to Cohen" provided him "the opportunity to modify the raw surveys or substitute others with all the negative comments about Kelly." As evidence of this manipulation, Kelly points out that the results were "completely inconsistent with her history at [Canyon] Ranch," staff had not previously provided any negative feedback about Kelly "despite the many avenues for providing such feedback, and those who worked with her closest and knew her work best found the comments unbelievable."
Kelly conceded in her deposition that the comments in the 360 Reviews, if accurate reflections of the staff's feelings, would justify not promoting her to the position of Facilities Director. She additionally testified that, to her knowledge, no one who completed the 360 Reviews was asked to misstate or misrepresent their opinions.
¶55 However, as discussed above, those facts do not lead to the reasonable inference that Cohen tampered with the reviews. First, the 360 Reviews, unlike Kelly's past performance reviews, were not intended to be a "top down performance evaluation by a supervisor." Rather than rate someone's ability to perform the various skills in their job description, the 360 Reviews are designed to rate leadership skills and to reveal "challenges of a leader within . . . their relationship with their peers, the relationship that they have as a supervisor over subordinates, and the . . . relationship they have with their direct superior." Consequently, the 360 Reviews were purposefully designed to evaluate a different skill set than a traditional performance review. Despite Kelly's contentions, because her past performance reviews by her supervisors were favorable does not allow the court to conclude the negative 360 Reviews by her subordinates necessarily were fabricated by Cohen. See Martin, 209 Ariz. 531, ¶ 15, 105 P.3d at 581.
¶56 Similarly, the fact that those who worked closest with Kelly found the results incredible and that staff previously had not complained about her to human resources or management does not demonstrate the 360 Reviews were necessarily tampered with and manipulated by Cohen. Kelly has not shown any difference in her ratings between reviews Cohen reviewed and those he did not. Also, the 360 Reviews were intended to reveal in an anonymous and confidential setting how those whom Kelly supervised felt about her and her leadership skills. It does not follow necessarily that her peers and supervisors would have the same opinion, or be aware of how the staff felt. Such "weak evidence [is] not enough to create an inference of [gender] discrimination." See Nidds, 113 F.3d at 919; see also Coleman, 232 F.3d at 1285.
¶57 Lastly, Kelly contends that Canyon Ranch's reliance on the muffin, truck, and confidentiality incidents as additional justifications for its decisions are "undermined by [the] fact that these incidents were not raised until this litigation despite [the] opportunity to do so in the EEOC proceeding." As we have already explained, however, the record shows Canyon Ranch did not fabricate these incidents after litigation began. Moreover, these are not incompatible justifications and thus cannot alone defeat summary judgment. See Nidds, 113 F.3d at 918; see also Nordstrom, 260 F.3d at 733-34; Cornwell, 439 F.3d at 1028 n.6.
¶58 Kelly therefore has failed to "cast doubt upon [Canyon Ranch's] proffered explanation for its [actions], while providing support for [her] contention regarding [gender] discrimination." McGinest, 360 F.3d at 1124. She has relied instead only on "mere assertions that [Canyon Ranch] had discriminatory motivation and intent in failing to promote [her]." Steckl, 703 F.2d at 393. Such assertions, "without substantial factual evidence," are insufficient to withstand summary judgment. Id.; see also Modular Mining Sys., Inc. v. Jigsaw Technologies, Inc., 221 Ariz. 515, ¶ 19, 212 P.3d 853, 858 (App. 2009); see also McSherry v. City of Long Beach, 584 F.3d 1129, 1138 (9th Cir. 2009) ("Summary judgment requires facts, not simply unsupported denials or rank speculation."). Because Kelly has failed to create a genuine issue of material fact that Canyon Ranch's reliance on the 360 Reviews, combined with past incidents that had given management concern over her leadership ability, was a pretext for gender discrimination, summary judgment in Canyon Ranch's favor was appropriate. See Ariz. R. Civ. P. 56(a); see also Dayka & Hackett, 228 Ariz. 533, ¶ 6, 269 P.3d at 711-12.
Attorney Fees and Costs
¶59 Kelly has requested her attorney fees and costs on appeal pursuant to 42 U.S.C. § 2000e-5(k). That statute allows a court, in its discretion, to award attorney fees to the prevailing party. Id. Because Kelly is not the prevailing party, the provision does not apply to her. Id.
¶60 Canyon Ranch also has requested its attorney fees and costs on appeal pursuant to A.R.S. § 12-341.01(A). That provision applies to actions arising out of a contract and it has not cited any authority that § 12-341.01(A) applies to a federal discrimination claim. Because this action arose out of an alleged violation of federal law, and not a contract, Canyon Ranch is not entitled to its attorney fees under § 12-341.01(A). See Marsh v. Digital Equip. Corp., 699 F. Supp. 1411, 1412-13 (D. Ariz. 1988) (discrimination and contract claims "discrete issues" falling under different attorney fees provisions).
Kelly was an at-will employee. --------
Disposition
¶61 For the foregoing reasons, the trial court's order granting summary judgment to Canyon Ranch is affirmed.