ALVIN B. RUBIN, Circuit Judge:
Casa Gallardo, Inc., appeals a finding of liability and the award of damages under Title VII
Ronald Weaver joined Casa Gallardo in 1980 as an experienced manager in the restaurant business, transferring from an Area Supervisor position with Red Lobster, a business then owned through Casa Gallardo by General Mills, Inc. Weaver spent three months at Casa Gallardo as a Manager Trainee, then became a restaurant manager, then in July, 1981, was promoted to Area Supervisor.
In November, 1982, Jim Bunting, the Director of Operations for Casa Gallardo and Weaver's immediate supervisor, created the Operations-Manager position. Operations Managers were to rank between Area Supervisors and the Director of Operations in the Casa Gallardo hierarchy. Bunting considered for promotion each of the four Area Supervisors, including Weaver, and selected Ted Geiger, a white male.
By the summer of 1983, Bunting had decided to create a second Operations-Manager position and he again reviewed the performance of each Area Supervisor. Again, he selected a white male, William Matseas, one of Weaver's former trainees. On October 10, Weaver filed a charge of discrimination relating to both promotions with the Equal Employment Opportunity Commission.
On April 4, 1984, David Lane, Casa Gallardo's Vice President of Operations, terminated Weaver's employment. Weaver filed a second charge of discrimination with the EEOC following his dismissal.
Weaver asserted that he was denied both promotions and eventually discharged because of his race and in retaliation for filing a complaint against Casa Gallardo with the EEOC, and that he was entitled to relief under Title VII and § 1981. After a bifurcated bench trial, the district court found Casa Gallardo liable to Weaver for all three employment decisions under both Title VII and § 1981. After hearing evidence relating to damages, the court awarded Weaver $230,972.00 plus prejudgment interest of $41,815.58 for losses of back pay and benefits, $160,305.00 for three years of front pay damages, $5,000 for compensatory damages pursuant to § 1981, and attorney's fees in the amount of $26,730.00, a total of $464,822.58. Casa Gallardo appeals each determination of liability and challenges the damages award on a number of grounds.
A. Section 1981 Claims
Weaver challenged each of the employment decisions on both Title VII and § 1981 theories. The district court's judgment in his favor awarded him compensatory damages for the consequences of each
Subsequent to the rendition of the district court judgment, the Supreme Court held in Patterson v. McLean Credit Union
Notwithstanding Patterson's obvious pertinence to dual section 1981/Title VII claims, applying the decision requires two preliminary determinations. The first is whether the mode of analysis suggested by Patterson should be applied retroactively to cases that had been tried before it was decided but in which the judgment was not yet final. In Lytle v. Household Manufacturing,
1. Applying § 1981 to Weaver's Promotion Claims. Patterson, in dicta, stated
The parties had no opportunity to develop the record with an eye toward determining whether the promotion given Geiger would in fact, as to Weaver, have entailed a "new contract" within the meaning of § 1981, and the district court had no opportunity to make an initial finding. We, therefore, remand for consideration of the question whether the failure to promote Weaver to Operations Manager denied him the opportunity to enter into a new contract with Casa Gallardo as contemplated by Patterson.
2. Applying § 1981 to Weaver's Discharge Claims. This circuit has previously determined that Patterson's interpretation of § 1981 precludes claims for retaliatory discharge, and our reasoning necessarily applies to discriminatory-discharge claims as well.
B. Weaver's Title VII Promotion Claims
Weaver might have characterized his case as one presenting direct evidence of discrimination, thereby triggering the analysis articulated by Price Waterhouse v. Hopkins,
Under McDonnell Douglas and Texas Department of Community Affairs v. Burdine,
To establish a prima facie case, the plaintiff "must prove by a preponderance of the evidence that she applied for an available position for which she was qualified, but was rejected under circumstances which give rise to an inference of unlawful discrimination."
1. The Geiger Promotion. Weaver first asserts that Casa Gallardo practiced racial discrimination in promoting Ted Geiger in preference to him in November, 1982.
Citing Zipes v. Trans World Airlines, Inc.,
Weaver plainly satisfied his burden of offering a prima facie case relative to the Geiger promotion. He established without contradiction that he belonged to a racial minority and that he applied for the position eventually awarded Geiger, a white man. Casa Gallardo concedes that Weaver applied and was considered for the position before Geiger was selected, and does not contend that the deficiencies in Weaver's performance that it stresses in rebuttal rendered him unqualified for purposes of establishing his prima facie case under McDonnell Douglas.
Casa Gallardo, in turn, discharged its burden of rebutting the presumption of discrimination by articulating "some legitimate, non-discriminatory reason" for its decision not to promote Weaver.
To prevail, therefore, Weaver must demonstrate by a preponderance of the evidence that he was the victim of intentional racial discrimination, "either directly by persuading the court that a discriminatory reason more likely motivated the employer or indirectly by showing that the employer's proffered explanation is unworthy of credence."
The evidence that "race was a significant factor in the defendant's decision"
Second, Weaver testified that at his first meeting with Wayne Jones, President of Casa Gallardo, on July 18, 1983, Jones commented that, because of his rearing, he had to be careful in the presence of articulate black men. Weaver testified that he found the comment shocking and demoralizing.
Fourth, Weaver presented evidence suggesting that Geiger was a racist. Weaver testified that Geiger, after inquiring about an employee's progress and being assured that the employee's performance was acceptable, stated, "Well good, because we have had so much trouble with our Hispanic employees." Weaver also reported that he had heard of another employee calling Geiger a racist upon being terminated. Raymond Johnson testified that his supervisor had told him "jokingly" that Geiger would not promote Johnson because Johnson was black and Geiger was a racist, and that this supervisor routinely hinted that Geiger was racist. Johnson also testified that his observation of his own career and those of other blacks at Casa Gallardo indicated to him that Geiger was racist.
Fifth, Weaver and others suggested that certain incidents demonstrated racism among lower management at Casa Gallardo, citing an incident at a Charlotte restaurant when a manager destroyed a black's application for a position at Casa Gallardo and threw it into the garbage.
Casa Gallardo presented evidence to contradict the occurrence of some of these events and the interpretation placed by Weaver on others. The district court simply did not accept this rebuttal. While Weaver's evidence was hardly overwhelming, the case was tried by an experienced and able trial judge, who had the opportunity to observe the witnesses and appraise the credibility of the claims that Weaver was not as well qualified as Geiger. The record before us is but typed words. The trial judge may well have concluded that the testimony of Casa Gallardo's witnesses, however plausible when read, was designed to protect the employer and to mask the truth. We cannot, therefore, say that we are left with the firm conviction that the district court erred in finding that Weaver had demonstrated that race was a significant factor in Casa Gallardo's denying him the promotion awarded Geiger.
Casa Gallardo contends that the district court applied an incorrect legal standard by finding only that race was a factor, not a "significant" one. The court correctly stated the legal standard and its opinion as a whole reflects application of the significant-factor test. Its failure on every occasion to add the adjective "significant" does not portend legal error.
2. The Matseas Promotion. With regard to the Matseas promotion, Weaver's prima facie case, Casa Gallardo's rebuttal, and Weaver's attempt to demonstrate pretext take much the same form as they did with the Geiger promotion. Although Casa Gallardo certainly articulated a legitimate reason for promoting Matseas to rebut Weaver's McDonnell Douglas presumption, the evidence of Matseas's superiority is less compelling than the evidence with regard to Geiger, indicating a greater possibility that illegitimate considerations played a significant part in Matseas's promotion.
The second Operations Manager position was created and filled in August, 1983. Subsequent to the decision to promote Geiger, Weaver had received one performance review, rating him overall as "needs improvement/satisfactory". Matseas had only recently become one of Weaver's peers, having been promoted by Weaver to Assistant Manager, Manager, and General Manager. As General Manager, Matseas received two "above average" ratings from Weaver, and was then promoted to Area Supervisor in November, 1982. Matseas assumed what had been Weaver's area of supervision, a development that Weaver regarded as a demotion. Geiger's first and only review of Matseas in that capacity appears to give him a rating of "satisfactory" or "needs improvement/satisfactory."
Moreover, Matseas appears to have been a problematic Area Supervisor during his
While it is possible that the decision to promote Matseas instead of Weaver was based on a legitimate assessment of their relative abilities or commitment to excellence, given the evidence of their rough comparability as Area Supervisors, coupled with indirect evidence of possible racist contamination of the decision-making process, we cannot fault the district court for arriving at the conclusion that racial discrimination was a significant factor in the decision not to promote Weaver.
C. Weaver's Title VII Termination Claims
Weaver alleged that his termination was the result of racial discrimination and in retaliation for the filing of his initial charge with the EEOC in October, 1983. The district court, although recognizing the retaliation claim, did not specifically advert to it in its liability order, and mentioned only in conclusion the claim that the termination resulted from racial discrimination. Because the two claims are closely interrelated, we will discuss them together.
"To establish a prima facie case of discharge in retaliation for filing charges with the EEOC, a plaintiff must show (1) statutorily protected expression, (2) adverse employment action, and (3) a causal link between the protected expression and the adverse action."
Although the district court did not address itself to the issue, we believe that Weaver satisfied the third element as well. First, Weaver met with Casa Gallardo President Wayne Jones, Director of Operations Jim Bunting, and his supervisor, Operations Manager Ted Geiger, on July 18, 1983. Jones told Weaver that he was not going to be promoted to the new Operations-Manager position that eventually went to Matseas. It was at this same meeting that Jones made his remark about having to be wary around "articulate black men." Weaver protested the decision denying him the promotion, claiming that it was racially motivated — a protest that may be considered statutorily protected expression.
More important, however, was management's behavior after Weaver's filing of the charge with the EEOC, which was communicated to Gallardo sometime after October 12, 1983. Although a meeting had already been held on October 11, before the company received notice of the charge, two participants in the meeting thereafter wrote memos to Weaver's personnel file regarding the content of the meeting. These primarily concerned Weaver's poor relations with Matseas (by then his supervisor) and his poor compliance with company reporting, paperwork, and inventory protocols. The meeting apparently ended with Weaver asking, "Why don't you just terminate me?", and Bunting informing Weaver that he had 30 days to improve in the discussed areas or he would be terminated. A follow-up meeting for October 28 was scheduled at that time, but Bunting met
The pronounced increase in negative reviews and the careful scrutiny of Weaver's performance, coupled with testimony suggesting that management personnel were acutely aware of Weaver's EEOC charge, is sufficient to establish a causal link for Weaver's prima facie case of retaliatory discharge. As this court observed in Simmons v. Camden County Board of Education,
A prima facie case of racially discriminatory discharge is generally established by a plaintiff proving "(1) that he is a member of a protected minority, (2) that he was qualified for the job from which he was discharged, (3) that he was discharged, and (4) that his former position was filled by a non-minority."
The plaintiff's prima facie case of both retaliatory
Weaver introduced exhibits praising certain aspects of his management of restaurants under his supervision. He also introduced evidence that he was at least minimally competent.
The actual decision to terminate Weaver was made by David Lane, Casa Gallardo's Vice President of Operations. While Weaver does not suggest that Lane, to whom he attributed sole responsibility for the termination decision, had made any racist comments, had been involved in any social exclusion of Weaver, or was himself racially insensitive, the district court might well have concluded that he was influenced by Jones, Bunting, and Geiger in making his decision to terminate Weaver, and may in particular have been influenced by their racism or desire to retaliate against Weaver for filing the EEOC charge. Lane admitted discussing the charge with all three men and with others in the Casa Gallardo organization, although he denied any negative influence on his decision. Given the lengthy record and the credibility choices necessary to properly evaluate the testimony, we conclude that the district court had sufficient evidence to support its finding of pretext.
The award of damages must be based solely on the authority of Title VII. The purpose of Title VII relief is to "make whole" victims of unlawful discrimination.
A. Back Pay
Weaver sought back pay at the operations-manager-salary level from his termination date in April, 1984, up to the date of trial. Having found that Casa Gallardo discriminated against him, Weaver is "presumptively entitled to back pay."
Casa Gallardo contends that Weaver is not entitled to any back pay award or damages. It first asserts that Weaver sought only promotion to the Operations-Manager position awarded to Matseas. That position, Casa Gallardo argues, was eliminated by David Lane in a corporate reorganization. The district court, however, determined in the first phase of the trial that Weaver had applied for and was unlawfully denied the operations manager position awarded Geiger as well as the position awarded Matseas. The position held by Geiger was never eliminated.
Casa Gallardo next contends that the sale of its assets to the El Torito restaurant chain in November, 1985, severs all of its back pay liability as of that date. The sale of corporate assets to a successor corporation does not necessarily limit the predecessor corporation's liability for back pay subsequent to the sale. Indeed, a Title VII plaintiff may be barred from seeking back-pay liability from a successor corporation if the predecessor corporation is fully able to provide relief.
When General Mills sold the assets of Casa Gallardo to the El Torito chain, those Casa Gallardo employees working in Operations-Manager positions, including Geiger, as well as many other employees, transferred to and were employed by El Torito. The record thus supports the district court's conclusion that, had Weaver held the position of Operations Manager at the time of the sale to El Torito, he would have been transferred in that position to El Torito.
Casa Gallardo also asserts that, in any event, Weaver failed to mitigate his damages by using reasonable diligence to find substantially equivalent employment. Title VII requires that "interim earnings or amounts earnable with reasonable diligence by the person ... discriminated against shall operate to reduce the back pay otherwise allowable...."
Casa Gallardo has the burden of showing that Weaver did not make reasonable efforts to obtain work.
The district court found that Weaver did not earnestly begin looking for a substantially similar position in the restaurant industry until September of 1985, but that he then diligently began seeking work in the hospitality and restaurant industries in Atlanta. Weaver thereafter took reasonable steps to look for a managerial position in the restaurant industry substantially equivalent to his job at Casa Gallardo, but could not find such work. He therefore took a non-equivalent management trainee position with Pizza Inn at a salary of $26,000.00 a year. Weaver testified, however, that he was forced to leave that job and move home to Detroit after six months because of financial pressures and old debts. Since that time plaintiff has been employed selling tile, a job paying far less than Casa Gallardo. The district court held that Weaver had failed to reasonably mitigate his damages during the period between May, 1984, through September, 1985, and that this failure should simply reduce the damages awarded by the amount Weaver could have earned.
Casa Gallardo contends that the management-trainee position at Pizza Inn
Accordingly, the district court held that Weaver should receive back pay (salary and bonuses) until the date of the judgment, December 31, 1988, deducting the amounts by which he might have mitigated his damages and his actual interim earnings, accumulated from April 1984, computed as follows:
1984 $50,409 - $29,368 = $21,041 1985 $62,600 - $26,000 = $36,600 1986 $59,389 - $13,124 = $46,265 1987 $62,778 - $17,225 = $45,563 1988 $63,892 - $21,384 = $42,508
The court also awarded Weaver the following damages for other benefits that he lost during this period:
Social Car Profit
Security Allowance Sharing Total1984 $1,804 $2,000 $735 $ 4,539 1985 $2,792 $3,000 $843 $ 6,635 1986 $2,065 $3,000 -0- $ 5,065 1987 $1,900 $3,000 -0- $ 4,900 1988 $2,153 $3,000 -0- $ 5,153 TOTAL $26,292
The total back pay award amounted to $218,259. The court also awarded Weaver lost retirement benefits, which it calculated at present value to be $12,713, and prejudgment interest, calculated pursuant to the IRS adjusted prime rates, and compounded annually.
B. Reinstatement and Front Pay
In addition to back pay, prevailing Title VII plaintiffs are presumptively entitled to either reinstatement or front pay.
The district court found that Weaver had established base-year damages of $53,435 per year and that it would "be quite hard, if not impossible," for Weaver to obtain the "substantially equivalent position" of Operations Manager in a restaurant. Considering Weaver's experience with Red Lobster and Casa Gallardo, however, Weaver should have been able, with diligent effort and pursuit of the position, to work up into a higher management position within the restaurant field during a three year period following 1988. The district court therefore found that he was entitled to an additional three years of front pay at $53,435 a year.
Back pay and front pay are not independent and severable items of damages. They are each part of the remedy the court is charged with fashioning, a remedy that, as a whole, achieves the remedial purposes of the Act. A monetary award of front pay is calculated to terminate on the date a victim of a discrimination attains an opportunity to move to his "rightful place."
The district court did not state any reason why, within the period beginning in September, 1985, and ending in 1988, Weaver should not have been able to work his way up from management trainee to a supervisory position. The allowance of back pay for 1986, 1987, and 1988 deducted a modest amount for failure to mitigate damages. Taking this into account, we see no reason to award him front pay in addition.
C. Compensatory Damages
The court awarded compensatory damages pursuant to § 1981 for the emotional distress suffered as a result of Casa Gallardo's conduct.
D. Attorney's Fees
The district court awarded Weaver's attorneys fees. Weaver does not seek an additional award for attorney's services on appeal, and Casa Gallardo does not contest the amount awarded for trial-court services, seeking vacation of the award only on the basis that the district court incorrectly decided the liability issues. We therefore affirm the judgment insofar as it awarded attorney's fees.
For the reasons stated, we:
1. AFFIRM the judgment of liability under Title VII for both of Weaver's failure to promote claims and for his claim of retaliatory and discriminatory discharge;
2. REVERSE the district court's judgment of liability under Section 1981;
3. REMAND to the district court to reevaluate the question of liability under Section 1981 for the failure-to-promote claims;
4. AFFIRM the award of back pay;
6. VACATE the award of front pay;
7. VACATE the award of compensatory damages; and
8. AFFIRM the award of attorney's fees.
The case is REMANDED for further proceedings consistent with this opinion.
CLARK, Circuit Judge, specially concurring:
I cannot concur in the majority's conclusion that the Supreme Court's holding in Patterson v. McLean Credit Union
The Court in Patterson, as a prelude to deciding the issue before it, reconsidered its opinion and holding in Runyon v. McCrary
Patterson follows Runyon and holds that "a refusal to enter into an employment contract on the basis of race ... would be actionable under § 1981 as an impairment of `the same right ... to make ... contracts ... as ... white citizens,' 42 U.S.C. Sec. 1981."
It defies commonsense and logic to hold that section 1981 permits an action for a discriminatory refusal to hire and then deny an action for a discriminatory discharge. Consider, for example, what would have occurred in Runyon if the defendant private schools had enrolled minority students pursuant to the court order and then discharged them from the school two months later for reasons of race. Would the parents upon return to the court be told that section 1981 did not authorize a suit for discriminatory dismissal? The statute specifically prohibits discrimination in the making and enforcement of contracts. It stands to reason that since schools and employers are forbidden from refusing to make contracts (admitting children to schools or hiring employees) for racial reasons, a person discriminated against in either of these contexts can enforce the contract under section 1981 in the
The Supreme Court in Patterson specifically recognizes this, acknowledging that:
It must be remembered that Johnson, cited by the Supreme Court in the reference above, included a claim by the plaintiff of a discriminatory discharge from employment. The Supreme Court unanimously stated:
The Court in Patterson briefly discussed Johnson but at no point overruled it. The Court in Patterson specifically held only that racial harassment was not cognizable under section 1981. When the Supreme Court does not overrule one of its prior precedents, are we authorized to do so? I would hold not. When Weaver filed this lawsuit, Johnson authorized it and Johnson is still the law. We are controlled by that decision.