Ehrhardt v. Haddad Restaurant Group, Inc.

FILED
U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
OCTOBER 18, 2011
JOHN LEY
CLERK
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 11-10228
Non-Argument Calendar
________________________
D.C. Docket No. 2:08-cv-02130-WMA
ALAIN J. EHRHARDT,
llllllllllllllllllllllllllllllllllllllllPlaintiff-Appellant,
versus
HADDAD RESTAURANT GROUP, INC.,
llllllllllllllllllllllllllllllllllllllllDefendant-Appellee.
________________________
Appeal from the United States District Court
for the Northern District of Alabama
________________________
(October 18, 2011)
Before BARKETT, MARCUS and BLACK, Circuit Judges.
PER CURIAM:
Alain Ehrhardt appeals the district court’s grant of summary judgment in
favor of Haddad Restaurant Group, Inc. (Haddad), in his lawsuit alleging a

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violation of the Alabama Age Discrimination in Employment Act (AADEA),
Alabama Code § 25-1-20, et seq., breach of contract, and fraud. Ehrhardt asserts
the district court erred in granting summary judgment on his AADEA claim
because he presented evidence that age was the “but-for” reason for his
termination. He further contends the district court erred in granting summary
judgment on his contract claim because even if he was an at-will employee, the
terms of his compensation contract with his former employer were still binding
and Haddad expressly agreed to honor those terms. Lastly, Ehrhardt asserts the
district court erred in granting summary judgment on his fraud claim because
Haddad’s words and actions constituted a material misstatement and he relied on
Haddad’s promises of the same compensation scheme he had with his former
employer. After review, we affirm the district court.1
We review the district court’s ruling on summary judgment de novo. Rojas v. Florida,1
285 F.3d 1339, 1341 (11th Cir. 2002). “When deciding whether summary judgment is
appropriate, all evidence and reasonable factual inferences drawn therefrom are reviewed in a
light most favorable to the non-moving party.” Id. at 1341-42. “Summary judgment is
appropriate if the record shows no genuine issue of material fact and that the moving party is
entitled to a judgment as a matter of law.” Id. at 1341.
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I.
Under the AADEA, “[n]o employer . . . shall discriminate against a worker
40 years of age and over in hiring, job retention, compensation, or other terms or
conditions of employment.” Ala. Code § 25-1-21. The AADEA uses the same
analytical framework as the federal Age Discrimination in Employment Act
(ADEA). Robinson v. Ala. Cent. Credit Union, 964 So. 2d 1225, 1228 (Ala.
2007).
In Gross v. FBL Fin. Servs., Inc., the Supreme Court held to establish a
disparate treatment claim under the ADEA, “[a] plaintiff must prove by a
preponderance of the evidence . . . that age was the ‘but-for’ cause of the
challenged employer decision.” 129 S. Ct. 2343, 2351 (2009); see also Mora v.
Jackson Mem’l Found., Inc., 597 F.3d 1201, 1204 (noting “an ADEA plaintiff
must establish ‘but for’ causality . . . the employer either acted ‘because of’ the
plaintiff’s age or it did not”). Even so, the Supreme Court expressly reserved the
question of “whether the evidentiary framework of [McDonnell Douglas Corp. v.
Green, 93 S. Ct. 1817 (1973)] . . . is appropriate in the ADEA context.” Gross,
129 S. Ct. at 2349 n.2.
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We have used the analytical framework from McDonnell Douglas in ADEA
cases, like this one, where a plaintiff offers circumstantial evidence to prove a
claim of discrimination. See Cofield v. Goldkist, Inc., 267 F.3d 1264, 1268 n.6
(11th Cir. 2001) (noting “[a]lthough the McDonnell Douglas framework originally
applied to Title VII cases, it is now widely accepted that the framework applies to
claims of discrimination under the ADEA as well”). Since the Supreme Court did
not explicitly overrule our precedent in applying the McDonnell Douglas test to
ADEA cases involving circumstantial evidence, we review Ehrhardt’s claims
under both McDonnell Douglas and Gross. See Gandara v. Bennett, 528 F.3d
823, 829 (11th Cir. 2008) (stating “we are bound by the holdings of earlier panels
unless and until they are clearly overruled en banc or by the Supreme Court”).
McDonnell Douglas established a three-step process for analyzing
discrimination claims: first, a plaintiff must establish a prima facie case of
discrimination; second, the defendant must articulate a legitimate,
nondiscriminatory reason for the adverse employment action; and third, the
plaintiff must proffer evidence sufficient to permit a reasonable factfinder to
conclude that the reasons given by the employer were not the real reasons for the
adverse employment action. Chapman v. AI Transp., 229 F.3d 1012, 1024 (11th
Cir. 2000) (en banc). “If the plaintiff does not proffer sufficient evidence to create
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a genuine issue of material fact regarding whether each of the defendant
employer’s articulated reasons is pretextual, the employer is entitled to summary
judgment on the plaintiff’s claim.” Id. at 1024-25. Rather than “simply quarreling
with the wisdom of [the employer’s] reason,” the plaintiff “must meet that reason
head on and rebut it.” Id. at 1030. A plaintiff may demonstrate that an employer’s
reason is pretextual by identifying “such weaknesses, implausibilities,
inconsistencies, incoherencies or contradictions in the employer’s proffered
legitimate reasons for its action that a reasonable factfinder could find them
unworthy of credence.” Combs v. Plantation Patterns, 106 F.3d 1519, 1538 (11th
Cir. 1997) (quotations omitted).
As to his demotion from General Manager, Ehrhardt established a prima
facie case of age discrimination under McDonnell Douglas. Further, Haddad
proffered legitimate, non-discriminatory reasons for demoting Ehrhardt from
General Manager: (1) poor sales and profits at the restaurant; and (2) Ehrhardt’s
poor management of employees. Ehrhardt has arguably challenged “head on” and
rebutted one of Haddad’s proffered reasons for the demotion. As to Haddad’s
reason that Ehrhardt poorly handled staff, there is little in the record indicating
Ehrhardt had problems with staff.
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However, Ehrhardt has failed to create a genuine issue of material fact
regarding Haddad’s other proffered reason for his demotion from General
Manager–his poor performance as manager in terms of sales and profits at the
restaurant. Rather than rebutting that reason, Ehrhardt simply second-guesses
Haddad’s business judgment in determining that his poor performance as General
Manager was the reason for its declining sales. See Chapman, 229 F.3d at 1030
(providing a plaintiff may not substitute his business judgment for that of his
employer’s). Ehrhardt has not countered Haddad’s determination that the
restaurant had poor sales and profits during his tenure as General Manager. Thus,
Ehrhardt has failed to establish that the decision to demote him from General
Manager was pretext for age discrimination. See id. at 1037 (providing that if the
employer proffers more than one legitimate, nondiscriminatory reason for an
employment decision, the plaintiff must rebut each of the reasons to survive a
motion for summary judgment).
As to the decision to terminate him as Beverage Director, we assume,
arguendo, that Ehrhardt established a prima facie case of age discrimination.
Haddad then proffered a legitimate, non-discriminatory rationale for the decision
to terminate Ehrhardt–the elimination of the Beverage Director position based
upon an economic determination that there was no reason to continue to employ
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and pay commissions to a Beverage Director in a restaurant that was losing
money. Again, rather than rebutting that reason, Ehrhardt second-guesses
Haddad’s business judgment in determining the position of Beverage Director was
no longer economically prudent. Ehrhardt presented no evidence to show
decisionmakers Nabil Haddad and Tony Karabaich did not believe the role of
Beverage Director no longer made economic sense when they terminated his
employment. See Alvarez v. Royal Atlantic Developers, Inc., 610 F.3d 1253, 1266
(11th Cir. 2010) (providing the inquiry into pretext centers on the employer’s
beliefs, not the employee’s beliefs). Ehrhardt has thus failed to establish the
decision to terminate him as Beverage Director was pretext for age discrimination.
Further, Nabil Haddad and Karabaich, the individuals who made the
decision to demote and ultimately terminated Ehrhardt, were within the class of
people protected by the AADEA. See Elrod v. Sears, Roebuck & Co., 939 F.2d
1466, 1471 (11th Cir. 1991) (explaining the plaintiff’s burden to show the
discharge is motivated by age is more difficult when the decisionmaker is also
within the class protected by the ADEA). Ehrhardt presented no evidence that
either Nabil Haddad or Karabaich exhibited any age bias.
Moreover, Ehrhardt has failed to show he would not have been demoted or
terminated “but for” his age, and, therefore, Haddad was entitled to summary
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judgment under Gross. Ehrhardt has not shown age was “‘the ‘reason’ that the
employer decided to act,” and he therefore cannot prevail under the Gross
standard. See Gross, 129 S.Ct. at 2350. As discussed above, Ehrhardt did not
show the reasons given by Haddad for his demotion and termination were not the
actual reasons for his demotion or termination. By failing to establish the
legitimate, nondiscriminatory reasons asserted by Haddad were not the true
reasons for his demotion and termination, Ehrhardt also failed to show he would
not have been demoted or terminated “but for” his age pursuant to Gross.
Accordingly, the district court did not err in granting summary judgment to
Haddad on Ehrhardt’s AADEA claim.
II.
As to Ehrhardt’s breach of contract and fraud claims, as a general rule, we
will not consider on appeal issues that the appellant failed to raise before the
district court. See Narey v. Dean, 32 F.3d 1521, 1526 (11th Cir. 1994). Ehrhardt
filed no objection to the magistrate’s report and recommendation (R&R), even
after the magistrate gave notice to the parties that all objections were due within
14 days of the issuance of the R&R and that failure to object would limit appellate
review. The failure to raise objections to a magistrate’s R&R bars a party from
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attacking on appeal factual findings adopted by the district court except upon
grounds of “plain error or manifest injustice.” See Resolution Trust Corp. v.
Hallmark Builders, Inc., 996 F.2d 1144, 1149 (11th Cir. 1993). Ehrhardt concedes
he is not challenging any of the factual findings of the magistrate on appeal, and
therefore he has abandoned any argument that such factual findings were plainly
erroneous or presented a manifest injustice. See Sepulveda v. U.S. Att’y Gen., 401
F.3d 1226, 1228 n.2 (11th Cir. 2005) (providing that issues not raised on appeal
are deemed abandoned). However, we will review a district court’s conclusions of
law, regardless of whether a party objected to the magistrate’s legal conclusions
before the district court. See United States v. Warren, 687 F.2d 347, 348 (11th
Cir. 1982).
A. Breach of contract
In Alabama, an employment contract is terminable at-will unless it can be
shown: “‘(1) that there was a clear and unequivocal offer of lifetime employment
or employment of definite duration; (2) that the hiring agent had authority to bind
the principal to a permanent employment contract; and (3) that the employee
provided substantial consideration for the contract separate from the services to be
rendered.’” Sanders v. Amerihealth, Inc., 898 F.2d 131, 132 (11th Cir. 1999)
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(quotations omitted). At-will employment may be terminable with or without
cause or justification. Whitfield v. Finn, 731 F.2d 1506, 1508 (11th Cir. 1984).
The magistrate concluded Ehrhardt was an at-will employee. Based on this
unchallenged factual finding, Ehrhardt cannot demonstrate he was not an
employee at-will under Alabama law. It follows that no contract existed between
himself and Haddad, and he cannot establish a breach of contract. Accordingly,
the district court did not err in granting summary judgment to Haddad on
Ehrhardt’s breach of contract claim.
B. Fraud
Under Alabama law, the elements of fraudulent misrepresentation are:
“(1) a misrepresentation of a material fact, (2) made willfully to deceive,
recklessly, without knowledge, or mistakenly, (3) that was reasonably relied on by
the plaintiff under the circumstances, and (4) that caused damage as a proximate
consequence.” Brushwitz v. Ezell, 757 So. 2d 423, 429 (Ala. 2000); see also Ala.
Code § 6-5-101.
The magistrate found Haddad never guaranteed Ehrhardt $50,000, but
instead affirmed that Ehrhardt’s salary would be $18,200, plus commissions,
concluding “Haddad never said as a matter of fact that [Ehrhardt] would receive
$50,000, but rather predicted that it should not be a problem.” The magistrate
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further found: (1) Ehrhardt had not shown that Haddad made that statement with
the intent to deceive; and (2) Ehrhardt acknowledged Haddad likely thought that
statement was true when he made it. Because Ehrhardt failed to establish that
Haddad misrepresented a material fact or did so with the intent to deceive, he thus
failed to state a prima facie case of fraud. Thus, the district court did not err in
granting summary judgment to Haddad on the fraud claim.
III.
The district court did not err in granting summary judgment to Haddad on
Ehrhardt’s AADEA, breach of contract, or fraud claims. Thus, we affirm.
AFFIRMED.
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