govinfo:USCOURTS-txwd-5_23-cv-00292-4

IN THE UNITED STATES DISTRICT COURT 
FOR THE WESTERN DISTRICT OF TEXAS 
SAN ANTONIO DIVISION 
 
MARIA NAVARRO, 
Plaintiff 
 
-vs- 
 
NEWLEAF HOMES, LLC, CENTER 
POINT REALTY COMPANY, FRED 
GHAVIDEL, 
Defendants 
 
§ 
§ 
§ 
§ 
§ 
§ 
§ 
§ 
§ 
 
 
SA-23-CV-00292-XR 
 
Consolidated with: 
SA-23-CV-00293-XR 
SA-23-CV-00477-XR 
 
 
 
ORDER ON REPORT AND RECOMMENDATION 
On this date the Court considered United States Magistrate Judge Elizabeth S. Chestney’s 
Report and Recommendations filed on March 12, 2026 (ECF No. 93) and March 23, 2026 (ECF 
No. 94), and the parties’ objections thereto (ECF Nos. 9 6, 97). After careful consideration, the 
Court issues the following order. 
BACKGROUND 
I. Factual Background1 
Plaintiffs Maria Navarro, Howard Rhoder, and Donald Brown each filed a separate cause 
of action in state court against their former employer, Defendant NewLeaf Homes, LLC 
(“NewLeaf”), a builder and residential community developer, and its owner, Fred Ghavidel 
(“Ghavidel”). Navarro, Rhoder, and Brown filed separate actions in state court against Defendants, 
which were then removed based on federal question jurisdiction.2 Navarro’s suit also names a third 
Defendant, Center Point. All three Plaintiffs were sales agents assigned to sell, monitor, and 
service new homes in a NewLeaf community subdivision. 
 
1 The following facts are undisputed unless otherwise noted. 
2 Navarro, Rhoder, and Brown filed separate actions in state court against Defendants, which were then removed based 
on federal question jurisdiction. See Navarro v. NewLeaf Homes, LLC et al. , No. 5:23 -cv-292-XR [hereinafter, the 
“Navarro Action”]; Rhoder v. NewLeaf Homes, LLC et al., No. 5:23-cv-293-XR [hereinafter, the “Rhoder Action”]; 
Brown v. NewLeaf Homes, LLC et al., No. 5:23-cv-477-XR [hereinafter, the “Brown Action”]. 

 
2 
All three Plaintiffs worked as sales agents for NewLeaf for a period of years until March 
and April 2021, when they —and two non -party sales agents —were laid off. Plaintiffs received 
severance payments but were not required to execute releases. 
Plaintiffs assert that NewLeaf (and the other Defendants) misclassified them as 
independent contractors, failed to pay them earned commissions in violation of their contract, and 
discriminated against them based on various protected characteristics. 
It is undisputed that there are a significant number of real estate transactions for which 
Plaintiffs never received commissions because the transaction closed after their termination. 
Defendants created and produced a spreadsheet in discovery, identifying “yellow” properties for 
which each Plaintiff procured the buyer and executed the purchase agreement and the same buyer 
ultimately closed on the property. Plaintiffs further assert that there are properties for which they 
were paid a commission, but the commission was underpaid. 
A. Plaintiffs’ Agreements with NewLeaf 
The parties executed several agreements during their employment relationship, and these 
agreements bear on whether NewLeaf lawfully withheld commissions from the Plaintiffs. 
All three Plaintiffs signed an identical Independent Contractor Agreement (“ NewLeaf 
ICA”) with NewLeaf in late 2016 or early 2017. See, e.g., ECF No. 65 -1. The NewLeaf ICA 
provides that as a salesperson for NewLeaf, Plaintiffs are employed to “sell, monitor and service 
each new home sale through closing” and that these responsibilities were to cover the assigned 
model homes in NewLeaf developments and subdivisions from 12 p.m. to 6 p.m. every day, for 
seven days a week. In return, NewLeaf agreed to pay Plaintiffs a commission based on the “base 
sales price” of the home: 2.75% if the purchaser did not have a representative agent. Plaintiffs did 

 
3 
not receive any hourly wages for the work they performed or other compensation aside from their 
earned commissions. 
The Agreement set forth certain criteria that must be accomplished regarding each sale to 
entitle the sales agent to an earned commission, to be paid upon closing in accordance with 
NewLeaf’s regular payroll practices. 3 The NewLeaf ICA further provides that, while NewLeaf 
retained the right to change its policies for paying commissions at its sole discretion, “[s]uch 
amendments or modifications [would] be effective if set forth in writing, signed by the President 
of NewLeaf Homes, and distributed to Sales” and would not ap ply retroactively to a purchase 
contract signed by a buyer before the effective date of such a change. See ECF No. 65-1 at 3. Still, 
it appears that NewLeaf reduced the commission percentage at least twice during Plaintiffs’ 
tenure—once to 2% by oral agreement and, again to 1%, just before Plaintiffs were terminated. 
Ghavidel acknowledged that he was unable to find any documentation of this change in writing. 
ECF No. 65-7, Ghavidel Dep. at 45:25–46:10, 157:14–20. 
 
3 The NewLeaf ICA sets forth the following criteria earning a commission on a sale: 
 
 [T]he sale must be initiated by the Salesperson or salesperson’s partner when working in multi -
salesperson communities in which commissions are shared. 
A contract between NewLeaf and the purchaser(s) must be obtained and the purchase agreement 
form must be ratified by an authorized officer of NewLeaf Homes. 
An earnest money deposit in an amount and form acceptable to NewLeaf Homes must be obtained 
at the time the purchase agreement is executed by the purchaser(s). 
The salesperson must conduct all required communications with the: purchaser(s), construction 
department, lender, realtor(s), NewLeaf Homes personnel, and any other applicable person and/or 
entity in an appropriate and effective manner so as to coordinate the efforts of all in accomplishing 
a timely and successful closing on the sale. 
The salesperson must assist in ensuring completion of all required contract documentation. 
The actions and conduct of the salesperson must be consistent with the policies and procedures of 
NewLeaf Homes. 
 
See ECF No. 65-1 at 2. 

 
4 
The NewLeaf ICA defines the parties’ employment as “at will” and provides that Plaintiffs’ 
employment “may be terminated by the Salesperson or NewLeaf Homes at any time, with or 
without cause.” ECF No. 65-1 at 1. The Agreement also contains a clause entitled “Separation of 
Employment”, which provides: 
If salesperson is terminated or leaves his or her relationship with NewLeaf Homes, 
the Company has the right to withhold all unpaid Commissions. Cause shall mean 
but not limited to: (a) any fact of fraud, intentional misrepresentation embezzlement 
or misap propriation or conversion of the assets or business opportunities of the 
Company, (b) conviction of the Employee of a felony, or (c) the Employee’s willful 
refusal to substantially perform assigned duties. 
 
Id. at 3. 
 NewLeaf has not asserted that Plaintiffs were terminated for any of these three enumerated 
causes. All three Plaintiffs allege that NewLeaf breached the Independent Contractor Agreement 
by failing to pay them their earned commissions under the governing contract. 
B. Plaintiffs’ Agreements with Center Point Realty 
In April 2017, Navarro and Rhoder also signed an Independent Contractor Agreement with 
Center Point Realty, a real estate company founded and managed by Ghavidel to bring sales 
activity “in house.” 4 See ECF No. 65 -2 (the “Center Point ICA”). Although Center Point and 
NewLeaf were separate and distinct entities, Ghavidel supervised Navarro and Rhoder in both 
roles. As brokers with Center Point, Navarro and Rhoder could sell homes outside of NewLeaf 
developments and subdivisions, although they earned lower commissions on outside sales. Upon 
the sale of a NewLeaf home, NewLeaf paid Center Point, which then distributed the commissions. 
 
4 Brown did not sign the Center Point ICA because it required all licensed real estate agents working for NewLeaf to 
have their license with Center Point Realty , and Brown did not have a real estate license. See ECF No. 65-4, Brown 
Dep. at 43:16–44:16. 

 
5 
The Center Point ICA also contains a termination provision: 
If an agent is terminated or leaves his or her relationship with Center Point Realty. 
Company has the right to withhold all unpaid commission. It will be at the 
discretion of Center [P]oint on any outside listings at the time of his or her leaving. 
 
ECF No. 65 -2 at 1. Navarro alone alleges that Center Point breached this agreement by 
underpaying commissions earned and paid prior to her termination. 
C. Plaintiffs’ Termination in Spring 2021 
Plaintiffs were laid off in March and April 2021, along with two other sales agents who are 
not involved in this litigation. It is undisputed that Navarro is Hispanic and of Mexican origin and 
Rhoder and Brown are Black/African American. When Plaintiffs were terminated, the onl y sales 
agents who kept their positions were three white women (Tina Nielson , Beverly Moretta, and 
Jeanine Turney) and one white man (Zale Fletcher).5 
As to their unpaid commissions, Plaintiffs identify as a comparator Svetlana ( “Lana”) 
Marinin, a white agent who received her commissions upon separation of employment . ECF No. 
62-10, Ghavidel Dep. at 84:17 –85:16; ECF No. 84-16, Ghavidel Dep. at 133:9 –134:8; Brown 
Action, ECF No. 42-7, Ghavidel Dep. at 86:11–12, 98:2–24. Further, there is evidence that other 
white agents, such as Nielson, received commissions without completing all the prerequisites 
under the NewLeaf ICA. ECF No. 84-14, Ghavidel Dep. at 179:21–180:7, 182:16–24, 183:16–24; 
ECF No. 84-15, Ghavidel Dep. at 188:22–189:1. 
 
5 Plaintiffs have not directed the Court to evidence confirming the race of all retained employees; however, Ghavidel’s 
testimony on behalf of NewLeaf indicates that Defendants agree Nielson is white . ECF No. 84-13, NewLeaf Dep. at 
155:6–25. Nor do Defendants dispute that Moretta and Fletcher are white. See ECF No. 93-1, Ghavidel Dep. at 94:1–
5. On the other hand, Ghavidel testified that Turney is Hispanic. Id. 
 
There is some dispute about the race of the two other agents who were terminated at around the same time —Jeff and 
Ron Belshaw, a father-son team who Navarro characterized as “Korean-ish” in her deposition. ECF No. 65-5, Navarro 
Dep. at 54:7 –55:25. Yet Ghavidel described the Belshaws as “White, Anglo” in his testimony. ECF No. 84 -13, 
NewLeaf Dep. at 154:10–24. And Brown testified that he was unsure of the Belshaws’ ethnicity and posited that they 
might be German. Brown Dep. ECF No. 79-12, at 116:14–18. 

 
6 
At the time of their termination, Plaintiffs were not given any reason for their termination. 
Navarro was told by her supervisor that “[t]here’s no friends” in business and was let go without 
notice. Navarro Action, ECF No. 79 -7, Navarro Dep. at 48:1–7. Brown was told “a highschool 
[sic] student could do” his job. Brown Action, ECF No. 49-3 at 3. Rhoder was told he was being 
let go and that Defendants would create a superintendent position for him . Id., ECF No. 65 -6, 
Rhoder Dep. at 52:8–53:1. 
 After all three Plaintiffs filed EEOC charges, Defendants attributed the layoffs to economic 
conditions: Navarro and Brown were told it was the “unforeseen housing market,” while Rhoder 
was told it was “changes in the business environment caused by the COVID -19 pandemic.” See 
Navarro Action, ECF No. 91-4; Brown Action, ECF No. 49-2; Rhoder Action, ECF No. 58-2. 
Plaintiffs dispute this explanation, pointing to (1) an April 2021 announcement on 
NewLeaf’s website stating, “Due to Exceptionally High Demand, We Will Not Be Taking 
Contracts Until Late August –Early September 2021 ,” (2) a San Antonio Board of R ealtors 
(“SABOR”) report reflecting “double digit year-over-year growth in the San Antonio real estate 
market during March and April 2021 ”—the precise months of Plaintiffs ’ terminations; and (3) 
evidence of NewLeaf’s purportedly increased costs show price hikes in 2022 —over a year after 
Plaintiffs’ termination. ECF No. 91 at 11 n.3; see ECF No. 91-5 at 10 (showing a 27% increase in 
the sale of single-family homes and a 157% increase in the sale of residential lots and acreage from 
the previous year); Brown Action, ECF No. 49 at 8 n.3 (citing ECF No. 49-5). 
After all three Plaintiffs filed suit, Ghavidel asserted in his deposition—for the first time—
that Plaintiffs were terminated due to performance issues. Despite describing Navarro as a “great 
employee” and “great salesperson” in his deposition, Ghavidel also testified that she had i ssues 
with customers, not returning phone calls, required a lot of “hand holding,” and was the target of 

 
7 
several customer complaints (at least one of which was communicated in writing and is in the 
record). ECF No. 65-8, NewLeaf Dep. at 149:13–24; ECF No. 92-1, Ghavidel Dep. at 75:24–76:5; 
ECF No. 92-1 at 1279 (email feedback). Ghavidel testified that Rhoder at times became “stagnant” 
with sales, requiring conversations about how to improve, ECF No. 92-1, Ghavidel Dep. at 80:3–
10, and that Brown was not very “computer savvy,” completed all contracts by hand, and had not 
obtained his realtor’s license, id. at 160:13–161:6. Ghavidel conceded, however, that there were 
never any written complaints regarding Plaintiffs ’ work performance, noting they were not that 
formal as a company. Id. at 153:25–154:8, 196:15–21. 
II. Procedural History 
Plaintiffs filed separate actions, each asserting claims for breach of contract, violations of 
the Fair Labor Standards Act (“FLSA”), and discrimination under 42 U.S.C. § 1981, Title VII of 
the Civil Rights Act of 1964 (“Title VII”), and the Texas Labor Code. 6 This Court consolidated 
the cases in August 2024, and referred the consolidated cases to the Magistrate Judge for all pretrial 
matters pursuant to Local Rule CV-72 and Appendix C. ECF No. 73. 
Following consolidation, the parties filed ten cross -motions for summary judgment .7 In 
September 2025, the Court adopted the Magistrate Judge’s first recommendation to deny the 
parties’ cross -motions for summary judgment as to the breach -of-contract and FLSA claims 
against NewLeaf. See ECF No. 89. In particular, the Court found (1) an ambiguity as to whether 
Plaintiffs were owed commission payments under the NewLeaf ICA’s “Separation of 
 
6 Plaintiffs have abandoned claims for quantum meruit, promissory estoppel, unjust enrichment, fraud, money had and 
received, theft of services, willful filing of fraudulent tax forms, and violation of the Texas Payday Law. ECF No. 87. 
7 At a status conference in April 2025, the Magistrate Judge announced that she would take up the motions bearing on 
Plaintiffs’ claims against NewLeaf (other than their claims of discrimination ). Based on this phased approach, 
Defendants filed a consolidated response (ECF No. 79) to Plaintiffs’ motions for partial summary judgment, and 
Plaintiffs filed a consolidated reply (ECF No. 82). Plaintiffs likewise filed their consolidated response to NewLeaf’s 
three motions (ECF No. 80), and NewLeaf filed a consolidated reply (ECF No. 81). 

 
8 
Employment” provision, and (2) a genuine fact dispute as to whether Plaintiffs were subject to the 
“outside sales exemption” to the FLSA. See id. at 11–12. 
The Court now considers the Magistrate Judge’s recommendations as to the remaining 
motions, issued in two phases: (1) the “Compensation R&R” (ECF No. 93), addressing the breach-
of-contract and FLSA claims again st Ghavidel and Center Point, and (2) the “Discrimination 
R&R” (ECF No. 94), addressing Plaintiffs’ claims for employment discrimination. 
LEGAL STANDARD 
A party may serve and file objections to a Report and Recommendation within fourteen 
days. FED. R. CIV. P. 72(a), (b)(2). “Parties filing objections must specifically identify those 
findings objected to. Frivolous, conclusive or general objections need not be considered by the 
district court.” Nettles v. Wainwright, 677 F.2d 404, 410 n.8 (5th Cir. 1982), overruled on other 
grounds by Douglass v. United States Auto. Ass’n, 79 F.3d 1415 (5th Cir. 1996). 
Courts must review de novo any of the Magistrate Judge’s conclusions to which a party 
has specifically objected. See 28 U.S.C. § 636(b)(1) (“A judge of the court shall make a de novo 
determination of those portions of the report or specified proposed findings or recommendations 
to which objection is made.”). Any sections that were not clearly objected to are reviewed for clear 
error to determine whether they are contrary to law. Id.; see also United States v. Wilson, 864 F.2d 
1219, 1221 (5th Cir. 1989), cert. denied, 492 U.S. 918 (1989). 

 
9 
DISCUSSION 
I. Compensation R&R (ECF No. 93) 
A. Summary of Recommendations 
On March 13, 2026, the Magistrate Judge addressed five motions for summary judgment,8 
recommending that the Court (1) grant Ghavidel’s motions as to Plaintiffs’ breach -of-contract 
claims, (2) deny his motions as to Plaintiff’s FLSA claims, and (3) grant Center Point’s motion for 
summary judgment on Navarro’s breach-of-contract claim. 
First, as to Plaintiffs’ breach -of-contract claims against Ghavidel, the Magistrate Judge 
found no evidence that he should be held personally liable for violations of the NewLeaf ICA 
under an alter-ego/veil-piercing theory. ECF No. 93 at 10–12. 
 As to Plaintiffs ’ FLSA claims, however, the Magistrate Judge rejected Ghavidel’s 
argument that Plaintiffs were properly classified as outside -sales agents , based on the Court’s 
September 2025 order denying NewLeaf’s motion for summary judgment on the same basis.9 See 
id. at 16; ECF No. 89 at 12 . Because Ghavidel did not proffer any reason to depart from that 
analysis in his motion, the Magistrate Judge concluded that Ghavidel, likewise, had not carried his 
burden of showing that the exemption “plainly and unmistakenly” applied . Meza v. Intelligent 
Mexican Mktg., Inc., 720 F.3d 577, 580–81 (5th Cir. 2013)). 
Finally, the Magistrate Judge concluded that Navarro’s breach -of-contract claim against 
Center Point failed because, unlike the NewLeaf ICA—in which a termination-for-cause clause 
created ambiguity about NewLeaf’s right to withhold commissions, see ECF No. 89 at 11 —the 
Center Point ICA clearly gives Center Point discretion to withhold all unpaid outside -sale 
 
8 Navarro Action, ECF Nos. 62, 67, 74; Rhoder Action, ECF No. 48; Brown Action, ECF No. 40. 
9 Ghavidel did not challenge his joint -employer status or assert that Plaintiffs were subject to the independent -
contractor exemption to the FLSA’s protections. 

 
10 
commissions upon separation, at Center Point’s discretion. ECF No. 93 at 12–15 (citing ECF No. 
65-2 at 1). Nonetheless, the Magistrate Judge clarified that dismissing Navarro’s breach -of-
contract claim against Center Point would not foreclose Plaintiffs from pursuing claims for unpaid 
commissions against NewLeaf, even if NewLeaf pays commissions through Center Point. 
B. Analysis 
Plaintiffs did not object to the Compensation R&R. Defendants filed untimely objections 
on March 31, 2026 —four days after the deadline. ECF No. 96. Although Defendants purport to 
object to both R&Rs, see id. at 1 n.1, their objections all bear on Plaintiffs’ FLSA claims, with no 
reference to the discrimination claims addressed in the later R&R, see generally id. 
Moreover, as Plaintiffs correctly observe, some of Defendants’ purported objections to the 
Compensation R&R attempt to revive arguments that have already been foreclosed by previous 
Court orders. See ECF No. 98. Their objections, for example, insist that NewLeaf and Ghavidel 
are not joint employers and that Plaintiffs were independent contractors, see ECF No. 96 at 3 –6, 
and seek to relitigate the interpretation of the termination clause in the NewLeaf ICA, id. at 7–11. 
But Ghavidel did not argue that he was entitled to summary judgment on Plaintiffs’ FLSA claims 
based on Defendants’ joint-employer status or Plaintiffs’ independent-contractor status. See ECF 
No. 93 at 16. And, given that Ghavidel cannot be held personally liable under the NewLeaf ICA, 
he has no standing to object to the Court’s construction of the termination clause. 
Defendants’ objections are overruled as untimely and otherwise meritless. The Court has 
reviewed the Compensation R&R and finds it to be neither clearly erroneous nor contrary to law 
and, accordingly, adopts the Magistrate Judge’s recommendations in full . Wilson, 864 F.2d at 
1221. 

 
11 
II. Discrimination R&R (ECF No. 94) 
A. Summary of Recommendations 
Despite identifying material fact issues as to whether Plaintiffs were employees or 
independent contractors, the Magistrate Judge recommended tha t the Court grant Defendants’ 
motions fo r summary judgment on all employment-discrimination claims because (1) Plaintiff 
abandoned certain claims, (2) neither Title VII nor the Texas Labor Code provide for individual 
liability, and (3) there was no evidence that the reasons proffered for Plaintiffs’ termination were 
pretext for discrimination on the basis of race or national origin. 
1. Abandoned Claims 
The Magistrate Judge concluded that, by failing to respond to Defendants’ motions for 
summary judgment, Plaintiffs abandoned their hostile-work-environment claims under Title VII, 
the ADEA, Section 1981, and the Texas Labor Code . ECF No. 94 at 9 –10. For the same reason, 
she found that Brown had abandoned his ADEA claim and that Rhoder and Brown had abandoned 
their sex-discrimination claims. Id. at 11. 
2. Individual Liability 
The Magistrate Judge recommended that the Court grant summary judgment on Plaintiffs’ 
employment discrimination claims against Ghavidel because there is no individual liability for 
race discrimination under Title VII or the Texas Labor Code. Id. at 12 (citing Indest v. Freeman 
Decorating, Inc., 164 F.3d 258, 262 (5th Cir. 1999) and City of Austin v. Gifford, 824 S.W.2d 735, 
742 (Tex. 1992)). She noted, however, that Ghavidel did not seek summary judgment on this basis 
as to Plaintiffs’ Section 1981 claims. Individual liability is available under Section 1981 where the 
individual is a supervisor personally involved in the discriminatory activity and is “essentially the 
same” as the employer in exercising authority over the plaintiff. Foley v. Univ. of Hous. Sys., 355 
F.3d 333, 337 (5th Cir. 2003). 

 
12 
3. Race/National Origin Discrimination Claims 
The Magistrate Judge found that Plaintiffs established a prima facie case of race/national 
origin discrimination as to the withheld commissions. While the terminations presented a “closer 
call,” the Magistrate Judge concluded that any doubts about the prima facie case were immaterial 
because Plaintiffs had not established sufficient evidence of pretext. ECF No. 94 at 19–21. 
“Pretext can be proven by any evidence that casts doubt on the credence of the employer’s 
proffered justification for the adverse employment action.” Harris v. FedEx Corp. Servs., Inc., 92 
F.4th 286, 297 (5th Cir. 2024) (quotation omitted). “An explanation is false or unworthy of 
credence if it is not the real reason for the adverse employment action.” Laxton v. Gap Inc., 333 
F.3d 572, 578 (5th Cir. 2003). “If the trier of fact does not believe the employer to have given a 
truthful account of its decision, it is reasonable to infer that the most likely explanation is the one 
the employer cannot admit—that it acted for . . . discriminatory reasons.” Ameristar Airways, Inc. 
v. Admin. Rev. Brd., 650 F.3d 562, 569 –70 (5th Cir. 2011). Thus, “a plaintiff’s prima facie case, 
combined with sufficient evidence to find that the employer’s asserted justification is false, may 
permit the trier of fact to conclude that the employer unlawfully discriminated.” Id. at 570 (quoting 
Reeves v. Sanderson Plumbing Prods., Inc. , 530 U.S. 133, 148 (2000) ). Similarly, w hen an 
employer’s statements have “not remained the same” over the course of a dispute, a jury can infer 
that the stated reason for the adverse action is pretextual. Nasti v. CIBA Specialty Chem. Corp. , 
492 F.3d 589, 594 (5th Cir. 2007). 
The Magistrate Judge found that NewLeaf had provided a legitimate , non-discriminatory 
reason for the terminations—a change in the market post COVID-19—and that Plaintiffs’ various 
performance issues justified their selection for termination once Defendants decided to downsize 
their sales force. Id. at 21 (citing ECF No. 65-8, NewLeaf Dep. at 149:13–24, 150:6–19); see Price 

 
13 
v. Fed. Exp. Corp., 283 F.3d 715, 720 (5th Cir. 2002) (“The defendant’s burden during th[e] second 
step is satisfied by producing evidence, which, taken as true, would permit the conclusion that 
there was a nondiscriminatory reason for the adverse action.”); McCoy v. City of Shreveport, 492 
F.3d 551, 559 (5th Cir. 2007) (“The employer’s burden is one of production, not persuasion, and 
does not involve a credibility assessment.”) . Further, Defendants produced a non-discriminatory 
reason for withholding commissions : other agents requested payment of a specifi c commission 
and the exception was granted. Brown Action, ECF No. 42-7, Ghavidel Dep. at 98:25–99:14. 
Thus, the burden returned to Plaintiffs to prove that Defendants’ justification s were 
pretextual or that their race/national origin was one of the reasons for New Leaf’s decision to 
terminate them and withhold commissions. Rachid v. Jack in the Box, Inc., 376 F.3d 305, 312 (5th 
Cir.2004) (alteration in original) . Under the pretext alternative, the plaintiff “bears the ultimate 
burden of proving that the employer ’s proffered reason is not true but instead is a pretext for the 
real discriminatory . . . purpose. To carry this burden, the plaintiff must rebut each 
nondiscriminatory . . . reason articulated by the employer.” McCoy, 492 F.3d at 557. Under the 
mixed-motive alternative, if the plaintiff shows that the plaintiff's protected characteristic was a 
motivating factor, then the burden shifts to the employer to show that the adverse employment 
decision would have been made regardless of the characteristic. See Rachid, 376 F.3d at 312. 
The Magistrate Judge found insufficient evidence that Defendants ’ housing-market 
justification was pretextual, stating, “There is no evidence of the website itself in the record, only 
a statement about it by Plaintiffs themselves in their EEOC filing.” Id. at 22. She further found that 
performance issues (customer complaints about Navarro, Rhoder ’s stagnant sales, and Brown’s 
lack of real estate license and computer skills) were supported by record evidence. Id. at 23. 

 
14 
 The Magistrate Judge further rejected Plaintiffs’ argument that the shifting explanations 
for their termination was evidence of pretext , reasoning that “the record establishes only that no 
reason was provided to Plaintiffs when they were terminated —not that a particular reason was 
provided that was later contradicted by Defendants.” ECF No. 94 at 23–24. 
B. Analysis 
Although Defendants purported to file objections to the Discrimination R&R, see ECF No. 
96 at 1 n.1 , none of their objections address the Magistrate Judge’s recommendations as to 
Plaintiff’s claims for employment discrimination, see generally id. 
Plaintiffs filed a timely objection, but only to the Magistrate Judge’s recommendation that 
the Court dismiss their disparate-treatment claims based on race. See ECF No. 97. 
 Thus, neither party has objected to the Magistrate Judge’s recommendations to dismiss 
Plaintiffs’ claims for hostile work environment, age discrimination, and sex discrimination, and 
discrimination claims against Ghavidel individually. The Court has reviewed those 
recommendations and, finding them t o be neither clearly erroneous nor contrary to law , adopts 
them in full. Wilson, 864 F.2d at 1221. 
 As to their race -discrimination claims , Plaintiffs object that the Magistrate Judge 
overlooked material evidence of pretext, including several exhibits contradicting the “economic-
downturn” explanation for their termination. Specifically, Plaintiffs point to three separate filings 
of a screen capture of the NewLeaf Homes website from April 2021 ( drawn from the Wayback 
Machine archive) attached to EEOC filings submitted by each Plaintiff. See Navarro Action, ECF 
No. 91-5 at 7; Rhoder Action, ECF No. 58-3 at 6; Brown Action, ECF No. 49-3 at 8. While the 
screenshot attached to Navarro’s EEOC filing is illegible because it is too small, the images 
attached to Rhoder and Brown’s filings clearly display NewLeaf’s public-facing homepage banner 

 
15 
stating: “Due to Exceptionally High Demand, We Will Not Be Taking Contracts Until Late 
August—early September 2021.” See id. Thus, the Magistrate Judge ’s finding that “there is no 
evidence of the website itself in the record, only a statement about it by Plaintiffs themselves in 
their EEOC filing,” ECF No. 94 at 22, is erroneous. 
Plaintiffs contend this error “is not harmless ” because the Magistrate Judge’s pretext 
analysis “turned directly on whether Plaintiffs had produced evidence —beyond their own EEOC 
statements—that Defendants’ housing-market justification was false.” ECF No. 97 at 4; see also 
id. at 4–5 (noting that the statement on NewLeaf’s website was corroborated by the SABOR report 
reflecting double digit year-over-year growth in the San Antonio real estate market in March and 
April 2021, see ECF No. 91-5 at 2, and Defendants’ own records showing material cost increases 
in 2022, see ECF No. 49-5). Plaintiffs assert these “direct contradiction[s]” are “precisely the kind 
of evidence that supports a finding that the stated reason is false or unworthy of credence” and that 
“[d]etermining whether to credit that contradiction is the jury ’s function, not the Court ’s on 
summary judgment.” ECF No. 97 at 4. 
To be sure, if Defendants had limited their justification to existing sales in the San Antonio 
real estate market in spring 2021, the record would likely establish a genuine dispute of material 
fact as to whether Defendants’ explanation for the terminations was pretextual. But, as Defendants 
explained in their response to Rhoder’s EEOC charge, the “changes in the business environment 
caused by the COVID -19 pandemic” included a “decline in closing and forecasting trends for 
2022, resulting in the decision to reduce the sales team.” ECF No. 58-2 at 2 (emphasis added). 
In other words, Defendants’ decision was based on an expected downturn in business 
resulting from the COVID-19 pandemic. Indeed, the statement on NewLeaf’s website pausing new 
contracts until Fall 2021 is consistent with Defendants’ decision to reduce NewLeaf’s sales force, 

 
16 
especially in light of its business model. As Ghavidel explained , NewLeaf h ad a backlog of 
contracts for future builds. ECF No. 79 -2, Ghavidel Dep. at 47:2–18. But due to the pandemic, 
NewLeaf found that it “couldn’t deliver houses anymore because of lack of material or pricing 
volatility of materials,” and “what . . . used to take New Leaf six to eight months to build a house 
was taking . . . over a year and a half to build a house.” Id. at 190:21–191:2. In other words, the 
website capture and evidence of cost increases in 2022 corroborate Defendants’ explanation: 
The company laid off five salespersons because it was then holding a large 
inventory of unsold constructed, or partially constructed, homes in its subdivisions 
that were causing it financial strain. It simply didn’t need the number of salespeople 
it currently employed. . . . [T]his was a company-wide scale-down, and people of 
all races were either let go or had their hours reduced mainly due to complications 
caused by the mid -COVID financial stance the business was in, including a large 
inventory of previous contracts that fell through because of the failure of customer 
financing, construction delays caused by severe supply -chain issues, and other 
legitimate business factors. 
 
ECF No. 65 at 9–10. 
Still, Plaintiffs insist that the Magistrate Judge erred by rejecting their argument that a 
reasonable factfinder could infer pretext from NewLeaf’s shifting-explanations for their 
terminations. ECF No. 97 at 5–6. It is true that when an employer’s statements have “not remained 
the same” over the course of a dispute, a jury can infer that the stated reason for the adverse action 
is pretextual. It is true that “[a] court may infer pretext where a defendant has provided inconsistent 
or conflicting explanations for its conduc t.” Nasti, 492 F.3d at 594; Caldwell v. KHOU-TV, 850 
F.3d 237, 242 (5th Cir. 2017). 
But Plaintiffs have not rebutted Defendants’ performance -based explanat ion for their 
terminations—aside from a few generically complimentary statements about their work —or 
proffered any evidence that one of the white comparators who retained their positions exhibited 

 
17 
similar performance issues. McCoy, 492 F.3d at 557 (“the plaintiff must rebut each 
nondiscriminatory . . . reason articulated by the employer”) (emphasis added). 
Here, the Fifth Circuit’s analysis of an employer’s shifting explanations for its decision to 
promote another employee over the plaintiff in Burrell v. Dr. Pepper/Seven Up Bottling Gr oup, 
Inc. is instructive. 482 F.3d 408 (5th Cir. 2007) . Before the EEOC, the employer stated that the 
plaintiff lacked “purchasing experience.” Id. at 413. But before the district court, the employer 
stated that the plaintiff lacked “bottling experience.” Id. And before the Fifth Circuit, the employer 
stated that that the plaintiff lacked “purchasing experience in the bottling industry.” Id. The Fifth 
Circuit found a genuine issue of fact as to pretext based on what, at first blush, appear to be very 
minor, nuanced differences betw een the employer’s explanations. The key to the panel’s 
reasoning, however, was that the panel evaluated the employer’s evolving explanations in light of 
the plaintiff’s comparator evidence : “[the promoted employee]’s own resume and deposition 
testimony indicates that he lacked significant purchasing experience in the bottling industry.” Id.; 
see also id. at 414 (describing ways in which the plaintiff was better qualified for the promotion 
than his comparator). 
The Fifth Circuit’s approach is consistent with the standard set by the Supreme Court: “a 
plaintiff’s prima facie case, combined with sufficient evidence to find that the employer’s asserted 
justification is false, may permit the trier of fact to conclude that the employer unlawfully 
discriminated.” Reeves, 530 U.S. at 148 ( emphasis added). Put differently, NewLeaf’s shifting 
explanations for the terminations do not create an inference of discrimination because Plaintiffs’ 
prima facie case failed at the fin al step: demonstrating that they were treated less favorably than 
similarly-situated white employees. McDonnell Douglas, 411 U.S. 792; see Lee v. Kan. City S. Ry. 
Co., 574 F.3d 253, 260 (5th Cir. 2009) (“[A]n employee who proffers a fellow employee as a 

 
18 
comparator [must] demonstrate that the employment actions at issue were taken ‘under nearly 
identical circumstances.’”). 
In short, the Court agrees with the Magistrate Judge’s conclusion that “ Defendants’ 
testimony that they selected those agents with performance issues for termination is easily 
harmonized with their assertion that those terminations were necessitated by adverse economic 
circumstances.” ECF No. 94 at 24. Plaintiffs’ objections are overruled, and their claims for 
employment discrimination fail as a matter of law. 
CONCLUSION 
 For the foregoing reasons, the Court ADOPTS the Magistrate Judge’s Compensation R&R 
(ECF No. 93) and Discrimination R&R (ECF No. 94) and issues the following orders in the cases 
identified below. 
Navarro v. NewLeaf et al., No. 5:23-CV-292-XR 
1. Ghavidel’s motion for summary judgment (ECF No. 62) is GRANTED IN PART and 
DENIED IN PART. The motion is denied as to Navarro’s FLSA claim and otherwise 
granted in all respects. 
 
2. NewLeaf’s motion for summary judgment (ECF No. 65) is GRANTED IN PART and 
DENIED IN PART. The motion is granted as to Navarro’s claims for employment 
discrimination and otherwise denied in all respects. 
 
3. Center Point’s motion for summary judgment (ECF No. 67) is GRANTED. 
 
4. Navarro’s motion for partial summary judgment (ECF No. 74) is DENIED. 
 
Rhoder v. NewLeaf et al., No. 5:23-CV-293-XR 
1. Ghavidel’s motion for summary judgment (ECF No. 48) is GRANTED IN PART and 
DENIED IN PART. The motion is denied as to Rhoder’s claims for employment 
discrimination and otherwise denied in all respects. 
 
2. NewLeaf’s motion for summary judgment (ECF No. 51) is GRANTED IN PART and 
DENIED IN PART. The motion is granted as to Rhoder’s claims for employment 
discrimination and otherwise denied in all respects. 
 

 
19 
Brown v. NewLeaf et al., No. 5:23-CV-477-XR 
1. Ghavidel’s motion for summary judgment (ECF No. 40) is GRANTED IN PART and 
DENIED IN PART . The motion is denied as to Brown’s FLSA claim and otherwise 
granted in all respects. 
 
2. NewLeaf’s motion for summar y judgment (ECF No. 42) is GRANTED IN PART and 
DENIED IN PART. The motion is granted as to Brown’s claims for employment 
discrimination and otherwise denied in all respects. 
 
Summary of Remaining Claims 
Plaintiffs’ breach -of-contract claims against NewLeaf and their FLSA claims against 
NewLeaf and Ghavidel remain pending. 
All other claims identified in the operative complaints have either been abandoned or 
DISMISSED WITH PREJUDICE pursuant to this Order and the Court’s order dated September 
23, 2025 (ECF No. 89). 
 It is so ORDERED. 
 SIGNED this 4th day of June, 2026. 
 
 
_________________________________ 
XAVIER RODRIGUEZ 
UNITED STATES DISTRICT JUDGE 

Passage view · GavelSight