Cerros v. Steel Technologies, Inc.

• Decision Date: 07 May 2002
• Docket Number: No. 01-1293.,01-1293.
• Citation: 288 F.3d 1040
• Parties: Tony CERROS, Plaintiff-Appellant, v. STEEL TECHNOLOGIES, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

288 F.3d 1040

Tony CERROS, Plaintiff-Appellant, v. STEEL TECHNOLOGIES, INC., Defendant-Appellee.

No. 01-1293.

United States Court of Appeals, Seventh Circuit.

Argued September 19, 2001.

Decided May 7, 2002.

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F. Amin Istrabadi (argued), Boesch & Istrabadi, Valparaiso, IN, for Plaintiff-Appellant.

Larry G. Evans, Hoeppner, Wagner & Evans, Valparaiso, IN, John M. Baumann, Jr. (argued), Steel Technologies, Louisville, KY, for Defendant-Appellee.

Before EASTERBROOK, DIANE P. WOOD, and WILLIAMS, Circuit Judges.

DIANE P. WOOD, Circuit Judge.

Hispanic employees were few and far between at the Porter County, Indiana, facility operated by defendant Steel Technologies, Inc. ("Steel"). Plaintiff Tony Cerros was one, and he found the environment at Steel to be exceedingly hostile. He filed this suit under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e, et seq., alleging that Steel discriminated against him and created a hostile work environment because of his national origin and race. After a bench trial before a magistrate judge (sitting by consent under the authority of 28 U.S.C. § 636(c)), Steel prevailed, and Cerros appealed. We conclude that further proceedings are necessary and therefore remand this case to the district court.

I

Cerros began his employment as a full time employee at Steel in October 1995. By July 1996, he had risen to the position of slitter operator. Although one might think that Cerros's various promotions were evidence of a positive work environment, that was far from true. The district court found that some of the supervisors as well as other employees overtly espoused the offensive philosophy "if it ain't white it ain't right." Cerros himself was frequently subjected to verbal harassment. During 1996 and 1997, employees, including supervisors, referred to him by such racialized derogatory names as "brown boy," "spic," "wetback," "Julio" and "Javier" (these are not Cerros's given or nicknames), talked down to him and muttered comments under their breath. Among the supervisors using racial epithets was Jeff Colvin. In October 1996, Cerros transferred to the first shift to avoid Colvin's harassment. His respite was short-lived: over his protests, Colvin also transferred to the first shift, and the epithets continued.

In addition to the verbal harassment, racist graffiti was painted on the bathroom walls. It included racial remarks and symbols such as "spic," "Go Back to Mexico," "Tony Cerros is a Spic," "KKK," and "White Power." Although the graffiti was cleaned off the walls, Steel never conducted any investigation, nor did it attempt to ascertain who was responsible for the defacement of the room. On another occasion, the tires on Cerros's car were slashed. This severe harassment continued until December 1997, and even beyond.

In addition to harassment based upon his race and national origin, Cerros suffered other disadvantages in the workplace. One that he emphasizes is Steel's failure to train him properly for his position as slitter operator, even as it was providing better training for its white employees. The district court found that Steel used informal, on-the-job training to train its slitter operators. The extent of the training depended upon the trainee's experience, ability, aptitude, and time on the job as slitter helper, as well as on the trainer's experience, ability, and aptitude. Cerros learned to operate the slitter by observing and performing some of the slitter operator functions while he was a slitter helper. He also received supervised instruction when needed. Cerros did not have enough slitter helpers, however, and he believed he was deprived of a slitter helper because of his race and national origin.

In early September 1996, management learned that production was dropping off on the slitter Cerros operated. On September 10, 1996, Colvin met with Cerros to discuss this problem. When he asked how Cerros was doing, Cerros explained that he needed more training on the machine and that another employee sometimes set his machine up incorrectly when supervisors were not around. Colvin told Cerros that he would be happy to help him, but that production slow-downs would not be tolerated. The following day, Cerros approached Colvin, following up on the previous meeting. During the conversation, Cerros told Colvin that he felt discriminated against as the only Latin-American operator. (Steel employed 150 employees at the Portage site, but it had only 10 Hispanic employees.) Cerros went on to state to Colvin's face that he thought Colvin was racist. Colvin (not surprisingly) denied the accusation, but he also suggested that Cerros speak with the General Manager, Todd Bennett, about the problem.

After that conversation, Colvin himself informed Bennett directly about Cerros's allegation of national origin discrimination. Soon after, Bennett spoke with Cerros about the situation. That was where matters seemed to stop. No one ever investigated Cerros's complaint; it was never passed along to the human resources department; and no remedial steps were taken.

Steel's official policy encourages employees who feel discriminated against first to inform their supervisor of inappropriate behavior. If an employee does not receive a response from her immediate supervisor, she is then encouraged to make an appointment with the Plant Manager. If the problem still remains unresolved, a Step Three procedure is available under which the employee may submit a written summary of the situation to the Plant Manager. The Plant Manager submits his own report to the General Manager, who reviews the situation, discusses it with the employee, and renders a decision within seven days. Last is Step Four, under which there is a final appeal to the Vice President if the employee remains dissatisfied.

Cerros began by informing not only his own supervisor, Colvin, but also other supervisors such as Dan Beal, Kevin Meyers and Russell Harrington of the harassment. Later, as noted above, both Colvin and Cerros discussed the situation with Bennett, the General Manager. There is no evidence that Cerros sought to appeal Bennett's lack of action to the Vice President. In any event, the epithets continued and nothing was done. It was not until Cerros filed a charge of discrimination with the EEOC that there was an investigation into the harassment, conducted by John Baumann, corporate counsel and manager of human resources during 1996-1997. After interviewing managers and supervisors, who denied the allegations, Baumann concluded that Cerros was not subject to discrimination or harassment. In time, Cerros received his right-to-sue letter from the EEOC and this case followed.

II

Because there was a full bench trial in this case, our standard of review is the one found in Fed.R.Civ.P. 52(a), under which "[f]indings of fact shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge of the credibility of the witnesses." Anderson v. City of Bessemer City, 470 U.S. 564, 573, 105 S.Ct. 1504, 84 L.Ed.2d 518 (1985). We review the district court's legal conclusions de novo. Johnson v. West, 218 F.3d 725, 729 (7th Cir.2000).

For the most part, Cerros does not argue the district court's findings of fact were clearly erroneous. His disagreement is with the ultimate conclusion that he was not subject to impermissible discrimination nor to a hostile work environment. As the Supreme Court made clear in Pullman-Standard v. Swint, 456 U.S. 273, 102 S.Ct. 1781, 72 L.Ed.2d 66 (1982), however, the question whether intentional discrimination occurred itself calls for a finding of fact, and thus the district court's decision on that point must be assessed under the clear error standard. Id. at 287.

A. Race and National Origin Discrimination

Cerros begins by arguing that the district court should not have applied the indirect framework of McDonnell Douglas v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973), to his case, and instead should have analyzed his claim under a direct method of proof. But this is the wrong perspective for a case that had a full trial. United States Postal Serv. Bd. of Governors v. Aikens, 460 U.S. 711, 714-15, 103 S.Ct. 1478, 75 L.Ed.2d 403 (1983). We will review the record instead to see whether there was clear error in the district court's conclusion that Cerros failed to prove his discrimination claims.

Although the district court found that there was evidence that co-employees as well as managers directed racial epithets towards Cerros and perpetuated an "if it ain't white it ain't right" philosophy at the plant, the district court did not find that Cerros's supervisors or other agents of Steel used this philosophy in connection with an adverse employment action. In fact, the district court found that Cerros was not subject to any adverse employment action at all.

If the record supports this conclusion, it is fatal to Cerros's claim of discrimination. And on this record, we cannot find that the district court clearly erred. Cerros was promoted twice, and he received a pay increase. Markel v. Bd. of Regents of Wisconsin Sys., 276 F.3d 906, 911-12 (7th Cir.2002). Even though these are the opposite of adverse employment actions, Cerros argues that he was nevertheless injured when Steel denied him proper training for the position of slitter operator. His theory was that the promotion was a cynical one, and by failing to train him as well as it trained white employees (in keeping with the "if it ain't white it ain't right" philosophy), Steel made sure that he would fail in the new job.

The question is then whether there was evidence of the alleged substandard training, and whether this alone could constitute an adverse employment action. This court has defined an adverse employment action as a "materially adverse change in the terms and conditions of employment [that is] more...