Laxton v. Gap Inc.

• Citation: 333 F.3d 572
• Decision Date: 06 June 2003
• Docket Number: No. 02-40406.,02-40406.
• Parties: Joanna LAXTON, Plaintiff-Appellant, v. GAP INC., doing business as Old Navy, Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

333 F.3d 572

Joanna LAXTON, Plaintiff-Appellant, v. GAP INC., doing business as Old Navy, Defendant-Appellee.

No. 02-40406.

United States Court of Appeals, Fifth Circuit.

June 6, 2003.

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Andy Wade Tindel (argued), Provost, Umphrey, Youngdahl & Sadin, Charles H. Clark, Clark, Lea & Ainsworth, Tyler, TX, for Plaintiff-Appellant.

Maria B. Sowders, Ramey & Flock, Tyler, TX, Stephanie Ann Doria (argued), Paul William Cane, Jr., Paul Hastings Janofsky & Walker, San Francisco, CA, for Defendant-Appellee.

Appeal from the United States District Court for the Eastern District of Texas.

Before KING, Chief Judge, DAVIS, Circuit Judge, and VANCE^*, District Judge.

VANCE, District Judge:

Plaintiff-Appellant Joanna Laxton appeals from the district court's order granting defendant-appellee Gap, Inc. judgment as a matter of law in this case brought under the Pregnancy Discrimination Act. For the following reasons, we REVERSE and REMAND.

I. BACKGROUND

Drawing all inferences in favor of the non-moving party, as we must when reviewing the grant of judgment as a matter of law, the factual background of this lawsuit is as follows. In March 1999, Gap recruited Laxton, the general manager of a Stein Mart department store in Tyler, Texas, to become the general manager of an Old Navy store that Gap intended to open in Tyler. Laxton had worked for Wal-Mart for eight years, climbing the management ranks and helping to open a Wal-Mart Super Center in Henderson, Texas. She then became an assistant manager for Stein Mart and was soon promoted to general manager. At first, Laxton declined Gap's offer, but Gap persisted. Only after Gap offered her $45,000 plus bonuses — $10,000 more than she made at Stein Mart — did Laxton accept. Two Stein Mart employees followed her to the new Old Navy store to become assistant managers.

After accepting the offer but before starting work, Laxton, aged 39 at the time, learned that she was pregnant. On her first day of work, March 29, 1999, she informed Lisa Haverstick, Gap's Regional Assistant Manager, of her pregnancy. She informed her direct supervisor, Karen Jones, of her pregnancy on June 1, 1999. That was "the first real time [Laxton] was able to sit down with [Jones] and talk to her." It was also the day before the Old Navy store was due to open. Specifically, Laxton informed Jones that she was pregnant and was due around Thanksgiving. Laxton did not discuss with Jones her plans for maternity leave. She had not yet thought through the issue and was not yet familiar with Gap's maternity leave policy. Jones became visibly angry. Laxton testified that Jones "didn't appreciate the fact, I guess, that she was going to have to have someone come in during the holidays and fill in for me." Jones said, "You realize this means that I have to pull other management out of other stores to cover your store, when, basically, you know, this store should have been taken care of. What management do you think we're supposed to use?" After this conversation, Jones was "usually unpleasant" toward Laxton.

Under Laxton's management, the store timely opened on June 2, 1999. By all accounts, the store earned strong revenues. It won a national tech vest sales contest, and Laxton received monthly bonuses of over $1,000.

On July 8, 1999, the mall notified Laxton that it needed to cut power to her store between 9:00 and 10:00 p.m. The store usually closed at 9:00 p.m, after which time employees served the customers that remained in the store, closed all the registers, counted the money, and opened a back door to receive deliveries. Laxton feared that problems could arise if the store's power was cut while her employees were counting money because the back door would be open for deliveries and the alarm system would be dead. She called Jones to ask for permission to close the store 30 minutes early. Jones told Laxton to keep the store open. Laxton decided to close the store early anyway. For this incident, Jones gave Laxton a "Written Warning," the first strike in Gap's "three-strikes-you're-out" policy.

On July 29, 1999, Jones and Carla Dotto, an employee at Gap's corporate headquarters, told Laxton that a "Final Written Warning" — strike two — was on its way. Mary Carr, the Zone Human Resource Manager, also played a significant role in preparing this warning. In the Final Written Warning, Gap charged Laxton with four violations of company policies and procedures: (1) exiting the store by the back door; (2) displaying unacceptable behavior toward an employee, Kerri Vallery, over the store's walkie-talkie system; (3) neglecting to inform the regional office that she had taken a sick day; and (4) hiring a bank robber. The supervisors did not discuss these charges with Laxton in the July 29 conversation. Rather, Laxton learned of the nature of the charges only when she received a copy of the Final Written Warning by fax on Saturday, August 14, 1999, which was a day off for her. The warning alarmed and frightened her, and she suspected that she was the target of pregnancy discrimination. She believed that the asserted violations were false, and that she "hadn't been able to air [her] side of the story to anyone."

As to the allegation that she exited the store by the back door, Laxton testified that once she learned that this was a violation of store policy, she never did so again. As to the walkie-talkie incident, Laxton testified that Vallery had disobeyed her orders about where to place sales associates on the floor of the store. As to the sick day, Laxton testified that she called in to report the sick day, did not reach anyone, and did not leave a message because she intended to talk with headquarters again soon anyway. When she discovered that her hours for the week had been entered improperly, she made efforts to correct them. Regardless, Laxton, despite her pregnancy, was working over 70 hours a week while being paid on a salary based on 40 hours per week, and Gap produced no records indicating a problem with Laxton's overall attendance at work. Finally, Laxton testified that she never hired a bank robber. Vallery recommended that Laxton invite the job applicant to an orientation session. Before the orientation session, Laxton was "amazed" to discover through a conversation with her husband that the applicant was rumored to have robbed a bank. As soon as she discovered the problem, the applicant withdrew his application himself. At no time was the "bank robber" on Gap's payroll.

Before Laxton received the Final Written Warning on August 14, 1999, Laxton's supervisors sent Peg Inglis, a Zone Trainer, to Laxton's store for a visit on August 9, 1999. Based on conversations with three of the store's four assistant managers, Inglis reported that the store suffered from low employee morale. Inglis also reported violations of store policy, including: (1) exceeding the $75 discretionary spending limit by paying $85 for pizza for employees; (2) asking two employees to wear unpurchased Old Navy tech vests during a sales promotion; and (3) failing to permit employees to take lunch breaks. Inglis's report indicates that termination was on Gap's mind, for she wrote that "if Laxton stays in position...." Inglis spoke with Laxton during the store visit, but she did not raise with Laxton the issues of employee morale or the asserted violations of store policy. Instead, Inglis inquired as to Laxton's plans for maternity leave.

At trial, Laxton provided explanations for the three violations cited by Inglis: (1) she bought the pizza for employees during a busy and profitable Tax Free Weekend after Jones had directed her to "do whatever it takes" to make the weekend a success; (2) she directed two employees to wear tech vests during a nationwide tech vest sales contest that Laxton's store won and, relatedly, Gap had "sent down a directive" to have employees wear unpurchased backpacks to increase backpack sales; and (3) Laxton explained that the breaks were not recorded properly because the store's automated punch clock system was broken and employees were too busy with Tax Free Weekend to fill out time sheets manually.

Laxton had previously scheduled a vacation day for Monday, August 16, 1999, the first business day for Gap after Laxton received the Final Written Warning. Gap has a "Zero Tolerance" policy against discrimination, instructing employees to call a human resources representative with concerns. Gap also makes a toll-free telephone line available for anonymous reports. On August 16, Laxton called Chazz Pono, her human resources representative, to discuss her suspicion that she was the target of pregnancy discrimination. The record reflects that Pono took no action.

On August 17, 1999, Carlos Licona, a Gap auditor, arrived at Laxton's store unannounced. Licona testified that he was not aware of Laxton's performance-related issues before his store visit. Inglis's report, however, indicated that the report would be forwarded to Licona. Licona discovered the same violations of store policy that Inglis had identified — the pizza money, the tech vests, and the lunch breaks. Like Inglis, Licona did not discuss the violations with Laxton. He instead called Carr, who, together with Dotto, directed Licona to terminate her. This was the first time that Licona, a store auditor, had ever been asked to fire an employee. Gap replaced Laxton with a male.

Laxton filed suit in federal district court on October 10, 2000, charging Gap with violating Title VII of the Civil Rights Act of 1964, as amended by the Pregnancy Discrimination Act of 1978 (the "PDA"), 42 U.S.C. § 2000e, et seq. The district court conducted a jury trial beginning on November 5, 2001. At the close of Laxton's case, Gap moved for judgment as a matter of law pursuant to Rule 50 of the Federal Rules of Civil Procedure. The district court denied Gap's motion. The jury returned a verdict in favor of Laxton, awarding $127,000 in back pay,...