905 F.3d 1162
10th Cir.2018Background
- Charles Payan, a Hispanic UPS manager since 1991, was downgraded from “Ready Now” to “Retain at Current Level” by his Hispanic supervisor, Charles Martinez, in early 2010; Payan alleges the downgrade blocked promotions.
- Martinez gave Payan poor subjective scores on biannual Quality Performance Reviews despite strong objective metrics; Payan documented interactions and complained to HR beginning in 2010 and filed an internal complaint in February 2012.
- UPS investigated, found no discrimination, offered dispute resolution (Payan declined), and in Nov. 2012 placed Payan on a Management Performance Improvement Plan (MPIP) for communication, organization, and subordinate development concerns.
- After failing to meet MPIP requirements, Payan was transferred in Oct. 2013 to a Business Manager role with equivalent authority, no relocation, a pay increase, and no longer under Martinez’s supervision; Payan viewed the transfer as punitive.
- Payan filed an EEOC charge (March 2013), received a right-to-sue, and sued in May 2014 asserting Title VII and § 1981 claims (disparate treatment, hostile work environment, retaliation) and Utah state-law breach-of-contract and implied-covenant claims.
- The district court granted summary judgment for UPS on all claims; the Tenth Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Disparate-treatment (Title VII) — failure to exhaust | Payan argued discrimination via downgrade and failure to promote was covered by his EEOC charge | UPS argued Payan didn’t exhaust administrative remedies for the downgrade | Court held Title VII disparate-treatment claim was unexhausted; dismissal affirmed (treated as affirmative defense) |
| Disparate-treatment (§ 1981) — statute of limitations | Payan argued the limitations period began when downgrade took effect (Oct. 2010) | UPS argued downgrade occurred when notified in early 2010, so claim is time-barred | Held § 1981 claim untimely; suit filed after four-year limitations period |
| Hostile work environment (Title VII & § 1981) — causation and severity | Payan argued Martinez’s comments, corrections of Spanish names, and differential treatment showed racial animus and pervasive harassment | UPS argued evidence insufficient to show race-based motive or objectively severe/pervasive conduct; many notes were hearsay | Held Payan failed to show harassment was race-based or objectively severe/pervasive; summary judgment affirmed |
| Retaliation (Title VII & § 1981) — adverse action | Payan argued MPIP placement and transfer were materially adverse, retaliatory actions | UPS argued MPIP and transfer were non- adverse: MPIP was remedial and transfer involved no loss of pay/location/authority | Held MPIP and transfer were not materially adverse; retaliation claim failed |
| Breach of contract / implied covenant (Utah) | Payan relied on UPS non-retaliation language in Code of Business Conduct as creating an implied-in-fact contract | UPS relied on a clear, conspicuous disclaimer in the Code negating contractual rights; Payan also disclaimed belief that Code created contract | Held disclaimer precluded an implied contract; summary judgment for UPS affirmed |
Key Cases Cited
- McDonnell Douglas Corp. v. Green, 411 U.S. 792 (establishes burden-shifting framework for discrimination claims)
- Burlington N. & Santa Fe Ry. Co. v. White, 548 U.S. 53 (defines materially adverse action for retaliation)
- Jones v. R.R. Donnelley & Sons Co., 541 U.S. 369 (§ 1981 four-year statute of limitations)
- Sandoval v. City of Boulder, 388 F.3d 1312 (10th Cir.) (elements for race-based hostile work environment)
- Thomas v. Int’l Bus. Machs., 48 F.3d 478 (10th Cir.) (inadmissible hearsay cannot defeat summary judgment)
- Cole v. Illinois, 562 F.3d 812 (7th Cir.) (placement on improvement plan not necessarily a materially adverse action)
- Shikles v. Sprint/United Mgmt. Co., 426 F.3d 1304 (10th Cir.) (exhaustion as jurisdictional rule prior to later en banc clarification)