Noyes v. Kelly Services

• Decision Date: 29 May 2007
• Docket Number: No. 04-17050.,04-17050.
• Citation: 488 F.3d 1163
• Parties: Lynn NOYES, Plaintiff-Appellant, v. KELLY SERVICES, a corporation, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

488 F.3d 1163

Lynn NOYES, Plaintiff-Appellant, v. KELLY SERVICES, a corporation, Defendant-Appellee.

No. 04-17050.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted November 15, 2006.

Filed May 29, 2007.

M. Catherine Jones, Law Office of M. Catherine Jones, Nevada City, CA, for the plaintiff-appellant.

Tyler M. Paketau, Winston & Strawn LLP, San Francisco, CA, for the defendant-appellee.

Appeal from the United States District Court for the Eastern District of California; Garland E. Burrell, District Judge, Presiding. D.C. No. CV-S-02-02685-GEB/PAN.

Before: PROCTER HUG, JR. and M. MARGARET MCKEOWN, Circuit Judges, and BARRY TED MOSKOWITZ,^* District Judge.

McKEOWN, Circuit Judge.

In this employment discrimination case, we address the plaintiff's burden to raise a triable issue of fact as to pretext under the familiar McDonnell Douglas burden-shifting regime in the context of a less familiar claim of "reverse" religious discrimination. Lynn Noyes alleges that a supervisory employee at her former employer, Kelly Services, Inc. ("Kelly Services"), was a member of a small religious group, the Fellowship of Friends ("Fellowship"), and that he repeatedly favored and promoted other Fellowship members. Noyes claims that she was passed over for a promotion because she does not adhere to the religious beliefs of the Fellowship, and that a Fellowship member was promoted instead. She appeals 6295 the district court's order granting summary judgment in favor of Kelly Services on her Title VII disparate treatment claim and dismissing her state law claims for lack of subject matter jurisdiction.

We reverse the grant of summary judgment as to Noyes' disparate treatment claim because the district court misapplied the applicable standard on summary judgment and because genuine issues of material fact exist as to pretext. We also reverse the dismissal of Noyes' state law claims and remand with instructions to the district court to consider whether it may exercise diversity or supplemental jurisdiction over those claims.

BACKGROUND¹

A. NOYES' EMPLOYMENT HISTORY WITH KELLY SERVICES

Kelly Services provides temporary workers to other companies. Noyes worked as a permanent employee at Kelly Services in its computer software and multimedia department from October 1994 until May 2004, when she was laid off. At the time of the lay-off, she held the title of Software Developer. In April 2001, Noyes was passed over for a promotion to the position of Software Development Manager. Noyes challenges Kelly Services' failure to promote her in April 2001, not her termination in May 2004.

B. THE FELLOWSHIP OF FRIENDS

The Fellowship, founded in the 1970s, is a religious organization whose followers adhere to "Fourth Way" principles. The Fellowship describes itself as focusing on "an esoteric interpretation of religion associated with teachings of the Old and New Testaments, traceable also in Greek philosophy, and probably originating in Egypt and Asia." The Fellowship characterizes itself as "more than a philosophy or theory . . . it comprises a system of ideas that, when fully embraced, is a way of life." The Fellowship has approximately 2000 members, about one-third of whom live near or on a Fellowship-owned compound in Apollo, California. Fellowship members are required to donate at least ten percent of their gross monthly income to the Fellowship.

C. THE DISPUTED PROMOTION DECISION

In April 2001, the position of Software Development Manager became available at Kelly Services. William Heinz, a top-level management employee and a member of the Fellowship, was in charge of filling the position. Several employees were considered for the position — Noyes, Donna Walker and Joep Jilesen. Neither Noyes nor Walker are members of the Fellowship; Jilesen is a member of the Fellowship. No outside candidates were considered for the position.

Although Heinz had final decision-making authority over the promotion, during the selection process, he received input from other employees. Heinz told at least two of those employees that Noyes was not interested in receiving the promotion. For example, Maya Bonhoff, a manager, testified that she did not consider Noyes for the promotion because Heinz told her that Noyes did not want to be a manager and that Heinz had "something else that he really needed[Noyes] to do." From Bonhoff's perspective, Noyes had been "taken off the table" as a candidate for the Software Development Manager position. When William Galvin suggested that Noyes would be "very good" as Software Development Manager, Heinz told him that Noyes was not interested in the position.

Noyes claimed that she never told anyone at Kelly Services that she was not interested in becoming a manager, and that Heinz's statements to that effect were simply not true. In fact, Noyes wanted to become a manager and, in 2000, she applied for the only management position that was previously openly advertised in her field. Mario Fantoni, a Fellowship member, received that promotion.²

Heinz originally offered the Software Development Manager position to Walker, who declined the job because she had already held a similar position and thought that it would be a professional step backwards. After Walker declined, Bonhoff recommended to Heinz that he promote Jilesen. Heinz expressed some reluctance because there had been "issues raised in the past with Fellowship members being perceived as being given favoritism." Heinz ultimately offered the promotion to Jilesen, who accepted.

Noyes claimed that she was more qualified for the Software Development Manager position than Jilesen, because she had worked at Kelly Services for nearly six years longer and she had an MBA, which Jilesen did not. According to Noyes, Heinz had also shown other preferential treatment to Jilesen, including paying him a higher salary, which Heinz told Noyes was necessary for Jilesen's "lifestyle."

D. NOYES' COMPLAINTS REGARDING RELIGIOUS DISCRIMINATION

Noyes lodged a verbal complaint about Heinz's discriminatory employment practices with Kelly Services' Human Resources Department in May 2001. She claimed Kelly Services did nothing in response, and Kelly Services pointed to no evidence in the record indicating otherwise. Noyes then filed an administrative charge of discrimination with the California Department of Fair Employment and Housing in August 2001.

In December 2002, Noyes filed this action, alleging claims for: (1) employment discrimination in violation of 42 U.S.C. § 1981a³ and 42 U.S.C. § 2000e-2 ("Title VII"), (2) employment discrimination in violation of California's Fair Employment & Housing Act, Cal. Gov't Code § 12940, (3) failure to promote in violation of public policy, (4) breach of employment contract, (5) breach of the covenant of good faith and fair dealing, and (6) intentional infliction of emotional distress.

The district court granted summary judgment as to the Title VII claims, and dismissed the state law claims for lack of subject matter jurisdiction after declining to exercise supplemental jurisdiction under 28 U.S.C. § 1367.

We review the district court's grant of summary judgment de novo, drawing all reasonable inferences supported by the evidence in favor of Noyes, the nonmoving party. See Bodett, 366 F.3d at 742. A genuine dispute of material fact exists where "a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); see Fed.R.Civ.P. 56. In our de novo review, we also determine "whether the district court correctly applied the relevant substantive law." Stout v. Potter, 276 F.3d 1118, 1121 (9th Cir.2002).

ANALYSIS

I. APPLICATION OF MCDONNELL DOUGLAS BURDEN-SHIFTING REGIME TO NOYES' TITLE VII DISPARATE TREATMENT CLAIM

The Supreme Court's landmark case regarding employment discrimination claims brought under Title VII, McDonnell Douglas v. Green, sets forth a proof framework with two distinct components: (1) how a plaintiff may establish a prima facie case of discrimination absent direct evidence, and (2) a burden-shifting regime once the prima facie case has been established. 411 U.S. 792, 802-04, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973). In the summary judgment context, the plaintiff bears the initial burden to establish a prima facie case of disparate treatment. Chuang v. Univ. of Cal. Davis, Bd. of Trustees, 225 F.3d 1115, 1123 (9th Cir.2000). If the plaintiff succeeds in showing a prima facie case, the burden then shifts to the defendant to articulate a "legitimate, nondiscriminatory reason" for its employment decision. Id. at 1123-24. Should the defendant carry its burden, the burden then shifts back to the plaintiff to raise a triable issue of fact that the defendant's proffered reason was a pretext for unlawful discrimination. Id. at 1124. The central dispute in this case is whether Noyes' evidence was sufficient to raise a triable issue of fact as to pretext.

A. NOYES' PRIMA FACIE CASE

A prima facie case of employment discrimination may be established through direct evidence of discriminatory intent or a presumption arising from a showing of objective factors such as those outlined in McDonnell Douglas and its progeny. See 411 U.S. at 802, 93 S.Ct. 1817. In Godwin v. Hunt Wesson, Inc., 150 F.3d 1217 (9th Cir.1998), we adapted McDonnell Douglas to the failure to promote context, holding that a prima facie case requires the employee to show: "(1) she belongs to a protected class, (2) she was performing according to her employer's legitimate expectations, (3) she suffered an adverse employment action, and (4) other employees with qualifications similar to her own were treated more favorably." Id. at 1220.

Although we have not previously outlined the precise contours of a prima facie showing of reverse religious discrimination, the district court's application of Godwin in this context was appropriate. The district court...