Williams v. Pharmacia, Inc.

• Decision Date: 26 February 1998
• Docket Number: No. 96-4221,96-4221
• Citation: 137 F.3d 944,1998 WL 81258
• Parties: 76 Fair Empl.Prac.Cas. (BNA) 310, 72 Empl. Prac. Dec. P 45,206, 49 Fed. R. Evid. Serv. 49 Evelyn WILLIAMS, Plaintiff-Appellee, v. PHARMACIA, INC., a/k/a Pharmacia Ophthalmics, Inc., Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 944

137 F.3d 944

76 Fair Empl.Prac.Cas. (BNA) 310,

72 Empl. Prac. Dec. P 45,206,

49 Fed. R. Evid. Serv. 49

Evelyn WILLIAMS, Plaintiff-Appellee, v. PHARMACIA, INC., a/k/a Pharmacia Ophthalmics, Inc. Defendant-Appellant.

No. 96-4221.

United States Court of Appeals, Seventh Circuit.

Argued Nov. 7, 1997.

Decided Feb. 26, 1998.

John C. Hamilton (argued), Doran, Blackmond, Ready, Hamilton & Williams, South Bend, IN, Tamara L. Renner, Banik & Renner, Elkhart, IN, for Plaintiff-Appellee.

Thomas J. Brunner, Jr. (argued), Paul J. Peralta, Kari A. Gallagher, Baker & Daniels, South Bend, IN, for Defendant-Appellant.

Before COFFEY, FLAUM, and DIANE P. WOOD, Circuit Judges.

FLAUM, Circuit Judge.

A jury found that Pharmacia, Inc. had discriminated against Evelyn Williams, a sales representative, on the basis of her sex when it refused to promote her and, later, fired her after she complained that the company paid men in her position more than it paid women. On appeal, Pharmacia argues that the district court should have entered judgment in its favor as a matter of law on Williams's Title VII claims. Pharmacia also challenges one of the district court's evidentiary rulings and the court's decision to award both front pay and Williams's lost future earnings as damages. We affirm.

I. Background

Evelyn Williams began her career as a sales representative in Pharmacia's ophthalmic division in 1985. Pharmacia's primary business was manufacturing and distributing intraocular lenses, which are implanted into a cataract patient's eyes to improve vision, and "Healon," which is a substance that keeps a patient's eyes open during cataract surgery. Williams's sales territory consisted of parts of Illinois, Indiana, Michigan, and Ohio. Mike Baker, Pharmacia's regional sales manager for the Midwest territories, directly supervised Williams from 1987 to 1993. Baker answered in turn to Paul Lopez, who became the Vice President of Sales and Marketing in 1990.

Williams initially received strong performance reviews, and she had a good relationship with Baker. Her ratings started to slip, however, beginning with her January 1992 review. Baker testified at trial that although he had wanted to give Williams a two (on a scale ranging from a high of one to a low of seven), he ultimately gave her a three after Paul Lopez overruled him. Williams again received a two in each of her next two evaluations. In her July 1993 performance review, Williams rated only a four. Baker testified that, again, he had wanted to rate Williams higher but was overruled by Lopez. According to Baker, Lopez disliked Williams because she had complained about a company policy that imposed certain recordkeeping requirements on Pharmacia's sales force.

By this point, Baker's own relationship with Lopez had soured, and Baker began making plans to leave Pharmacia. Before he left, Baker recommended three people who, in his view, were best qualified to succeed him as the regional sales manager for the Midwest: Evelyn Williams and two men. Pharmacia interviewed the two men for the job, as well as four other men not recommended by Baker, but it did not interview Williams. At least one of the men who was interviewed had scored lower on his July 1993 evaluation than Williams had scored. In October 1993, Pharmacia selected Steve Wienecke, a former regional manager who had been serving as a national accounts manager, to fill Baker's position.

In late January 1994, Williams asked Pharmacia to adjust her base salary after learning from a sales representative in New York that her salary, which was $44,199, was below the average salary of $46,000 received by salespersons in similar positions. Pharmacia declined to adjust her salary and also informed Williams in February that, because of her declining performance ratings, she would not be receiving her regular merit increase in pay in 1994.

In March, Williams received her January 1994 performance review from her new supervisor, Steve Wienecke. Williams's rating had slipped lower than ever, down to a five. In addition, Wienecke also imposed on Williams a set of "interim objectives" regarding the level of sales she was expected to make in the coming months. The document conveying the interim objectives to Williams warned her that "[f]ailure to accomplish the above objectives within the specified time-frames will result in further discipline up to and including possible termination."

A week after Williams received her January performance review, she filed a grievance through Pharmacia's internal grievance procedure to protest both the review and the decision not to adjust her salary. The grievance procedure consisted of a series of meetings, which proved unproductive, between Williams, Paul Lopez, and Pharmacia's vice-president in charge of personnel. Two months later, in May, Williams filed a grievance with the Equal Employment Opportunity Commission (EEOC). Concurrently, Williams struggled to meet the interim sales objectives that Wienecke had set for her. She failed to meet the objectives, which, according to Williams's expert witness, set unreasonably high expectations given the limitations of Williams's sales territory and the company's overall decline in sales. Pharmacia terminated Williams's employment in August 1994, citing her failure to meet the interim objectives. Williams brought suit against the company on August 17, 1994 and later added additional Title VII claims after receiving a "notice of the right to sue" from the EEOC in November.

Williams brought her suit under both Title VII and the Equal Pay Act. Count I alleged that Pharmacia violated the Equal Pay Act by paying Williams less than similarly situated male employees and by retaliating against her for filing a grievance challenging this salary differential. Counts II and III contained allegations under Title VII that Pharmacia had engaged in sex discrimination and unlawful retaliation against Williams by failing to promote her, retaliating against her because of her grievance, and terminating her employment. The jury rejected Williams's claims under the Equal Pay Act. However, the jury found in Williams's favor on the Title VII claims and awarded compensatory damages of $500,000, of which $250,000 were attributed to lost future earnings. The jury also awarded Williams $750,000 in punitive damages.

The district court vacated the punitive damages award and reduced the compensatory damages to $300,000, which is the statutory maximum under 42 U.S.C. § 1981a. The court also awarded equitable relief. The court ordered that Williams receive back pay in the amount of $180,000. Furthermore, although the court denied Williams's request for reinstatement because her position had subsequently been eliminated in a merger between Pharmacia and the Upjohn Company, the court gave Williams a front pay award of $115,530, which was equivalent to one year's wages and benefits.

On appeal, Pharmacia contends that the district court erred in failing to enter judgment as a matter of law in its favor. It also argues that the court committed reversible error by failing to exclude hearsay evidence that other women besides Williams felt that Paul Lopez had discriminated against them. Finally, Pharmacia claims that the front pay and lost future earnings awards should be vacated because they are not compensable under Title VII; in addition, the company argues that the two awards overlap and constitute double compensation. For the reasons that follow, we conclude that Pharmacia was not entitled to judgment as a matter of law; that the district court committed only harmless error in failing to exclude the hearsay testimony; and that the lost future earnings and front pay awards were appropriate.

II. Discussion

A. Judgment as a Matter of Law

We review the denial of a motion for judgment as a matter of law de novo. Emmel v. Coca-Cola Bottling Co., 95 F.3d 627, 629 (7th Cir.1996). We limit our inquiry to "whether the evidence presented, combined with all reasonable inferences permissibly drawn therefrom, is sufficient to support the verdict when viewed in the light most favorable to the party against whom the motion is directed." Tapia v. City of Greenwood, 965 F.2d 336, 338 (7th Cir.1992). We will overturn a judgment for the plaintiff only if we conclude that "no rational jury could have found for the plaintiff." Emmel, 95 F.3d at 630. We apply this standard stringently in discrimination cases, where witness credibility is often crucial. Id.

Applying this standard to each of Williams's Title VII claims, we conclude that a rational jury could have found in Williams's favor based on the evidence presented at trial.

1. Failure to Promote

Williams's failure to promote claim arises under 42 U.S.C.2000e-2(a), which makes it unlawful for an employer to "discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's ... sex". Williams was passed over for promotion to the regional sales manager position vacated by Mike Baker. Although Baker recommended that Pharmacia interview Williams and two male employees for the position, Pharmacia declined to offer Williams an interview. Pharmacia did, however, interview the two men recommended by Baker, as well as four other men. Williams presented evidence at trial that at least one of the candidates who was interviewed, Mark Altenburger, had received a lower score on his July 1993 evaluation than Williams had. She also presented evidence that she had more years of experience with the company than all but one of the interviewees. Finally, Williams presented evidence that no female salesperson had been promoted to management from a sales position during Williams's nine-year tenure with Pharmacia until after Williams filed her grievance with the company. Shortly after the grievance was filed, Pharmacia promoted Amy Haines to a management position even though she...