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Magloire K. Placide Ayissi Etoh v. Fannie Mae

September 23, 2011


The opinion of the court was delivered by: Ellen Segal Huvelle United States District Judge


Plaintiff Magliore K. Placide Ayissi Etoh, an African-American male and former employee of the Federal National Mortgage Association ("Fannie Mae"), brings this pro se action against Fannie Mae, Michael J. Williams, Fannie Mae's President and Chief Executive Officer ("CEO"), and three current or former Fannie Mae employees: Jacqueline K. Wagner, the former Chief Audit Executive, Thomas Cooper, a former Vice-President in the Internal Audit division, and Sanda Pesut, a Manager in the Internal Audit division (collectively "defendants"). His complaint includes federal claims for racial discrimination, racial harassment, and retaliation, all in violation of 42 U.S.C. § 1981, and state law claims for defamation and intentional or negligent infliction of emotional distress. Before the Court is defendants' joint motion to dismiss or, in the alternative, for summary judgment. For the reasons set forth herein, defendants' motion for summary judgment will be granted.



Plaintiff is a foreign-born black citizen of the United States, originally from Cameroon, Africa. (Compl. ¶ 7; Etoh Aff. ¶ 2.) In February 2008, Fannie Mae called plaintiff to ask him to interview for a position as a Senior Financial Modeler in the Internal Audit department. (Etoh Aff. ¶ 3.) On March 3, 2008, the Director of the Modeling Team, then Philip Schlemmer, interviewed plaintiff. (Etoh Aff. ¶ 4.) On March 12, 2008, plaintiff had a second interview with Schlemmer and also interviewed with Pesut, who was then a Senior Auditor who reported to Schlemmer, and two other members of the department. (Etoh Aff. ¶ 4; Pesut Aff. ¶¶ 2-3.) Pesut recommended that plaintiff be hired even though he "did not have an audit background . . . because of his experience and familiarity with financial models used in banking and mortgage finance." (Pesut Aff. ¶ 2). Plaintiff was offered the job at an annual salary of $98,600, and he started work on April 28, 2008. (Etoh Aff. ¶¶ 5, 7; Defs.' Ex. 3*fn1 ; Etoh Aff. ¶ 7.) Between the time plaintiff interviewed and started working at Fannie Mae, Wagner was hired as the Chief Audit Executive to manage the Internal Audit department and Pesut was promoted to a Manager position on the Internal Audit Modeling Team (still reporting to Schlemmer), making her plaintiff's direct supervisor. (Pesut Aff. ¶¶ 3, 4; Wagner Decl. ¶ 2; Etoh Aff. ¶ 16.)

A. Plaintiff's Employment as a Senior Financial Modeler

From March 2008 to June 2008, plaintiff worked in the Modeling Review Unit as a Senior Financial Modeler and reported directly to Schlemmer. (Garza Aff. ¶ 3; Etoh Aff. ¶¶ 7-8.) Schlemmer assigned plaintiff to work for Anna Garza, the Director of Internal Audit of Single Family, on the Real Estate Owned Audit. (Garza Aff. ¶¶ 2, 4.) According to Garza, plaintiff "performed well in this engagement"; he "received praises from [the Director of the Model Developer Unit] for his model review, his insight and suggestions for improvement of the models"; he "worked well with my staff and project team members"; he "worked overtime to get the workpapers completed early at [Garza's] request"; and he "was a team player and was eager to help the team." (Garza Aff. ¶¶ 5-8.) Schlemmer was pleased with plaintiff's work (Pl.'s Ex. B.1.8), and, at the end of the project, Garza submitted a reward request for plaintiff, which was approved by the Vice President of Internal Audit, Curtis Doss. (Garza Aff. ¶ 9; Etoh Aff. ¶¶ 9, 20; Pl.'s Exs. B.1.8, B.1.10.)

B. Restructuring of Internal Audit to Create Team Lead Positions

In July 2008, Wagner restructured the Internal Audit department. (Wagner Decl. ¶ 2; Pesut Aff. ¶ 4). She laid off most of the Internal Audit Management Team, including Garza. (Garza Aff. ¶ 11.) She brought in Cooper, then an Ernst and Young employee, on a contract basis to run the Capital Markets, Finance and Modeling practice groups. (Defs.' Ex. 15; Etoh ¶ 21.) In addition, fourteen new "Team Lead" positions were created, each to be assigned a particular part of the business within the department. (Wagner Decl. ¶ 5; Pesut Aff. ¶ 5; Etoh Aff. ¶ 19.) Each Team Lead was to be "responsible for ensuring that audits were completed accurately and on time through diligent planning on the scope of an audit, efficient execution of the audit work and managing the audit staff assigned to the project." (Wagner Decl. ¶ 5.)

C. Team Lead Selection Process

According to Wagner, her goal was to "promote qualified candidates who demonstrated 'executive presence,' i.e. an ability to communicate with business leaders effectively, demonstrate business knowledge and show an ability to identify emerging business risks, and to take ownership of projects." (Wagner Decl. ¶ 8.) In addition, she sought only "domestic workers" to avoid the expense and uncertain success of H1-B sponsorship. (Wagner Decl. ¶ 9.)

According to plaintiff, the term "executive presence" was "a code [Wagner] used to avoid saying white or talks like whites." (Etoh Aff. ¶¶ 14, 23.)

Generally, Fannie Mae employees are not permitted to apply for other positions within the company until they have completed twelve months with the company, but for the newly created Team Lead positions that restriction was lifted. (Wagner Decl. ¶ 6; Defs.' Ex. 1 (Fannie Mae Internal Staffing Policy); Pesut Aff. ¶ 6.) Two employees applied for the position of "Modeling Team Lead" -- plaintiff and a white female, Karla Kucerkova, who was a Senior Auditor. (Wagner Decl. ¶ 6; Pesut Aff. ¶ 6.) Kucerkova had more auditing experience than plaintiff; plaintiff had a stronger educational background and more experience with financial models. (Wagner Decl. ¶ 7.) Pesut interviewed both candidates. (Pesut Aff. ¶ 7.) She "did not believe either candidate was well-suited for the job," but she rated Kucerkova slightly higher than plaintiff because "she was more familiar with audit practices and procedures." (Pesut Aff. ¶ 7.) A panel reviewing the applicants recommended plaintiff "primarily due to his educational background." ( Pesut Aff. ¶ 7; Wagner Decl. ¶ 7.) Pesut then supported the panel's decision and recommended plaintiff for the position. (Pesut Aff. ¶ 7.) Wagner accepted the panel's recommendation and, on July 30, 2008, offered plaintiff the position of "Auditor Team Lead" for the Modeling Team with a transfer date of August 17, 2008. (Wagner Decl. ¶ 7; Defs.' Ex. 2.) In all, twelve*fn2 individuals were promoted to Team Lead positions. (Wagner Decl. ¶ 8.) Of the twelve, six were African-American, three were Asian, two were White and one was Hispanic. (Defs.' Ex. 3.) Prior to promotion, ten had been "Senior Auditors"; one had been a Financial Analyst, Julie Kley; and one, plaintiff, had been a "Senior Financial Modeler." (Defs.' Ex. 3.)

D. Team Lead Salaries

Of the twelve individuals promoted to Auditor Team Lead positions, only plaintiff was not given a salary increase. (Defs.' Exs. 2, 3.) According to the Director of Compensation, Nicole Harris Westbrook, who is African-American, Wagner "consulted with [her] department on recommendations for salary increases for these promotions." (Westbrook Aff. ¶ 5.) Initially, Wagner proposed giving each new Team Lead a 2% increase in salary. (Wagner Decl. ¶ 10; Westbrook Aff. ¶ 5.) However, after reviewing Wagner's proposal, the Compensation department suggested alternatives (Westbrook Aff. ¶ 6) in order "to ensure a meaningful increase is given," which was "defined as an increase of 5% or above." (Defs.' Ex. 3, at 2 (e-mail from Jim Deng,*fn3 Compensation department, to Darlene Slaughter, Human Resources Director, and Kimberly Chavez, Human Resources department, with a copy to Nicole Harris*fn4 ); see also Wagner Decl. ¶ 11 ("representatives from the Fannie Mae[] Compensation Team advised me that a 2% increase would not be meaningful and that I should consider a minimum 4-5% salary increase").)

As to plaintiff, the Compensation department recommended not to provide [him] with a salary increase because he had recently joined the Company and his salary was well within range of the other newly promoted Team Leads. Moreover, [his] then current salary was commensurate with the complexity of the position that he held and his experience as an auditor. (Westbrook Aff. ¶ 6; see Wagner Decl. ¶ 11.) Wagner accepted the recommendation of the Compensation department and did not raise plaintiff's salary (Westbrook Aff. ¶ 7; Wagner Decl. ¶ 11), because "he had recently joined the Company," "his salary was within range of the other newly promoted Team Leads," and his "salary was commensurate with the complexity of the position he held and his minimum experience as an auditor." (Wagner Decl. ¶ 11.)

The other Team Leads all received salary increases of varying percentages. (Defs.' Ex. 3; Westbrook Aff. ¶ 7.)*fn5 The largest increase went to Julie Kley, who was the only person besides plaintiff who had not previously been an auditor, although she had been employed by Fannie Mae since 2006; her salary was the lowest of the Team Leads, both before and after the increase. The highest paid Team Lead was Hispanic, and the second and third highest paid Team Leads were African American. (Defs.' Ex. 3; Westbrook Aff. ¶ 7.) Before the promotions and salary increases for the other Team Leads, plaintiff had the sixth highest salary; after the promotions, plaintiff had the second lowest salary, although it was very close (only $1,400 less) than the three Team Leads ahead of him in the salary rankings. (Defs.' Ex. 3.) Other than plaintiff, the relative rankings among Team Leads based on salary did not change. (Defs.' Ex. 3.) Naveen Fernandes was the only Team Lead who was, like plaintiff, new to Fannie Mae, but he had ten years of prior audit experience. (Defs.' Reply Ex. 2.) Kucerkova, who had been plaintiff's competition for the position of Modeling Team Lead, received a 2% salary increase, raising her salary from $85,000 to $86,700. Oluwaseyi Awoga, a black employee who was not selected as a Team Lead, did not get a pay raise. (Awoga Decl. ¶ 17.)

E. Plaintiff's Performance in the Modeling Team Lead Position (August - September 2008)

Soon after plaintiff became the Modeling Team Lead, Pesut began to have "concerns" about his "performance." (Pesut Aff. ¶ 8.) According to her affidavit, "his testwork documentation was incomplete, he did not support audit conclusions, and his writing was unclear." (Pesut Aff. ¶8.) She also "received reports that he was inattentive in meetings and fell asleep during an auditor orientation session." (Pesut Aff. ¶8.) At some point, Pesut conveyed her concerns to her "supervisor," Cooper. (Pesut Aff. ¶8.)

Wagner was first advised in late September 2008 that plaintiff was "experiencing performance problems in the Team Lead role." (Wagner Decl. ¶ 13.) On September 23, 2008, there was an Audit Leadership Team Meeting at which the possibility of terminating plaintiff was discussed. (Etoh Aff. ¶ 34.) Wagner asked the management team to consult with Human Resources. (Wagner Decl. ¶ 13.) Thereafter, on September 25, 2008, Wagner's Chief of Staff, Craig Krimbill, sent an e-mail to Slaughter, the Human Resources Director, informing her that "[plaintiff] is still in his six month probationary period and the leadership is leaning toward exiting him out due to his performance," and asking if she "ha[d] time tomorrow to discuss . . . so that I can convey the process to the rest of the ALT [Audit Leadership Team]." (Defs.' Ex. 4, at 2.) Slaughter responded with an e-mail that said:

Hopefully the manager has been keeping notes on what is and isn't happening, in terms of his performance and has communicated that he's not performing at an acceptable level. When is the probation end date - let's not wait until close to the end. I'll review the information with legal, once that's completed we can have a conversation with the employee. We can talk tomorrow. (Defs.' Ex. 4, at 1.) Krimbill responded to Slaughter that "we'd have until Oct 27 -- I agree we do not want to delay until that point in time." (Defs.' Ex. 4, at 1.) Krimbill then forwarded his e-mail exchange with Slaughter to Pesut and Cooper with the note: "can we discuss in the morning?" (Defs.' Ex. 4, at 1.) According to Pesut, she understood Krimbill's email to her as a suggestion from Slaughter that she "begin documenting [p]laintiff's performance deficiencies." (Pesut Aff. ¶ 9; see also Wagner Decl. ¶ 13 (Slaughter "opined that there was not enough information to make any decisions and that we should begin documenting any perceived performance deficiencies").

On September 29, 2008, Pesut met with plaintiff to discuss what she describes as his "performance shortcomings." (Pesut Aff. ¶ 14 & n.4; Etoh Aff. ¶ 57.) According to Pesut, plaintiff "did not respond well to any criticism," "was easily angered, prone to raising his voice," and "accused [Pesut] of creating a poisonous environment" and "retaliating against him because he was selected for the Team Lead position over Karla Kucerkova." (Pesut Aff. ¶ 14.) In addition, plaintiff "complained about performing audit testwork, which he felt was a duty for staff auditors" and told Pesut that "as a Team Lead his responsibilities were limited to planning the audit and reviewing the testwork performed by the staff auditors." (Pesut Aff. ¶ 15; Etoh Aff. ¶ 57.) Pesut "told [p]laintiff that as the Team Lead it was his responsibility to ensure that the Modeling team's work on any audit was performed satisfactorily and in a timely manner" and that "[i]f accomplishing that overall objective required him to perform testwork then he would be expected to do whatever necessary to compete the task." (Pesut Aff. ¶ 15.)

F. Plaintiff's Work on the Single Family Underwriting and Quality Assurance Audit (September - October 2008)

During September 2008, plaintiff worked primarily on the Single Family Underwriting and Quality Assurance Audit ("Single Family Audit"). At that time, the department used a software program known as "TeamMate," "an audit management software system that allow[ed] personnel in the Internal Audit department to store and share documents, including audit workpapers." (Geisbert Aff. ¶ 3.) On September 29, 2008, Pesut reviewed plaintiff's workpapers on the TeamMate program, and she also looked at the stored information he had received from the customer.*fn6 (Pesut Aff. ¶ 11.)

On October 1, 2008, Pesut sent an e-mail to Cooper with two attachments. The first attachment was a one-page document that Pesut identified as one of plaintiff's workpapers from the TeamMate program; the second attachment was a copy of the customer's response to an earlier inquiry from plaintiff. (Pesut Aff. ¶ 11; Defs.' Exs. 10, 11.) The text of the first attachment was identical to part of the text in the second attachment. (Defs.' Exs. 10, 11.) Pesut's e-mail to Cooper stated in its entirety:

Thomas, see attached:

1. email from customer - in a Word file attached to that email there is a list of all our procedures with some notes and answers - customer notes that she provided answers to audit questions

2. word file - one of the workpapers in TeamMate where reasonableness of data inputs is assessed - bulleted part is exactly the same as customer's response on page 2 => word file attached to the email above this is SF Underwriting and Quality Assurance audit.

I am pretty much done with the first round workpaper review, but they will need some more work after this first round of review notes is addressed.

Let me know if you want to discuss. (Defs.' Ex. 10.) According to Pesut, she sent the e-mail to Cooper because "[f]rom my review of the documents [p]laintiff represented as his own work-product, it appeared that plaintiff copied the customer's response to our inquiries regarding the soundness of the variables used in the financial model and represented the work as his own." (Pesut Aff. ¶ 11.)*fn7

On October 8, 2008, plaintiff edited the workpapers for the Single Family Audit. (Defs.' Exs. 9, 12; Pl.'s Ex. D.6.7.b.) On October 10, 2008, Pesut had another meeting with plaintiff about his performance (Pesut Aff. ¶ 14 & n.4; Etoh Aff. ¶ 57) and a meeting with Wagner about plaintiff. (Etoh Aff. ¶ 58; Wagner Decl. ¶ 14.)*fn8

On October 14, 2008, Pesut "presented [p]laintiff with short form evaluations to document [her] concerns with his performance on two audits: Single Family Underwriting and Quality Assurance and Multifamily Model Review." (Pesut Aff. ¶ 10; Defs.' Exs. 5, 6.) In the first evaluation, Pesut wrote that plaintiff's "work is below expectations in several areas: modeling technical skills, and workpaper documentation." (Defs.' Ex. 5, at 2.) In the second evaluation, Pesut wrote that plaintiff's "work is below expectations in the following areas: modeling technical skills, workpaper documentation . . . and communication skills." (Defs.' Ex. 6, at 2.) In addition to a number of other criticisms, Pesut also noted in the first review that plaintiff "signed-off in the system on the related workpapers as his own work, and did not note that the responses were provided by the customer." (Defs.' Ex. 5, at 2.) Plaintiff's written objections to each evaluation stated that it was "not true" and "just the continuation of a vendetta." (Defs.' Exs. 5, 6; Pesut Aff. ¶ 10.)

On October 15, 2008, plaintiff met with Wagner and learned that he was being denied a "retention bonus." (Etoh Aff. ¶ 65.)

On October 16, 2008, Wagner again met with plaintiff and discussed Pesut's email to Cooper and the possibility that plaintiff had committed plagiarism. (Etoh Aff. ¶ 66; Pl.'s Ex. B.1.5.) She also explained that Pesut's e-mail was the reason she denied plaintiff a retention bonus. (Etoh Aff. ¶ 66; Pl.'s Ex. B.1.5.) Plaintiff told Wagner that he believed the document sent by Pesut was false and that the "audit trail" in TeamMate would establish that the "workpaper" of his in TeamMate was a 7-page document. (Etoh Aff. ¶ 69.)

At some point, Wagner advised plaintiff that she would have his testwork reviewed by Cooper, who was "on-board to oversee assigned audit projects in the audit plan, review workpapers and audit reports to ensure the accuracy and reliability of the work performed, and to help the staff with technical audit issues." (Wagner Decl. ¶ 15.) Cooper conducted an independent review of plaintiff's documentation for the Single Family Audit. He concluded, and informed Wagner, that plaintiff's papers were "illogically organized and incomplete," but found no evidence of plagiarism. (Wagner Aff. ¶ 16; Etoh Aff. ¶ 72.) On October 31, 2008, Wagner met with plaintiff and advised him of Cooper's findings. (Wagner Decl. ¶ 17; Etoh Aff. ¶ 72; Pl.'s Ex. A.6.3.) During that meeting, plaintiff also asked Wagner about a salary increase. According to plaintiff, she refused to talk about it, saying to him: "for a young black man smart like you, we are happy to have your expertise; I think I'm already paying you a lot of money."*fn9

(Etoh Aff. ¶¶ 46, 73.)

G. November - ...

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