Spagnuolo v. Whirlpool Corp.

• Decision Date: 26 February 1981
• Docket Number: No. 80-1035,80-1035
• Citation: 641 F.2d 1109,25 FEP Cases 376
• Parties: 25 Fair Empl.Prac.Cas. 376, 25 Empl. Prac. Dec. P 31,596 Colombo A. SPAGNUOLO, Appellee, v. WHIRLPOOL CORPORATION, Appellant.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 1109

641 F.2d 1109

25 Fair Empl.Prac.Cas. 376,

25 Empl. Prac. Dec. P 31,596

Colombo A. SPAGNUOLO, Appellee, v. WHIRLPOOL CORPORATION, Appellant.

No. 80-1035.

United States Court of Appeals Fourth Circuit.

Argued Oct. 8, 1980.

Decided Feb. 26, 1981.

Jeffrey K. Ross, Chicago, Ill. (Charles J. Griffin, Jr., Seyfarth, Shaw, Fairweather & Geraldson, Chicago, Ill., Weinstein, Sturges, Odom, Bigger, Jonas & Campbell, Charlotte, N. C., on brief), for appellant.

Samuel M. Millette, Ernest S. DeLaney, III, Charlotte, N. C. (DeLaney, Millette, DeArmon & McKnight, P. A., Charlotte, N. C., on brief), for appellee.

Before WINTER, Circuit Judge, FIELD, Senior Circuit Judge, and ERVIN, Circuit Judge.

WINTER, Circuit Judge:

In a suit against his former employer, Whirlpool Corporation (Whirlpool), asserting a claim under the Age Discrimination in Employment Act, 29 U.S.C. §§ 621 et seq., Colombo A. Spagnuolo obtained a jury verdict establishing that he had willfully been discriminated against in employment because of his age and that he had suffered damages in the amount of $51,977. On the verdict and its additional findings, the district court gave judgment for the damages assessed by the jury, an additional amount of $51,977 as liquidated damages, attorneys fees of $60,000, costs, reinstatement, and pre- and post-judgment interest. Whirlpool appeals. We affirm except as to the item of pre-judgment interest.

I.

After almost twenty-four years of employment, plaintiff, when he was one month short of his fifty-third birthday, was demoted from his position as Manager of the Builder Department of the Charlotte Sales Division and assigned as Territory Manager of the Greensboro-Durham territory. When demoted, plaintiff sought but was denied the position of Territory Manager of the Charlotte territory. The demotion, which was to a position that plaintiff had formerly supervised, occurred on November 9, 1977, ostensibly because Whirlpool decided to combine the duties of Builder Sales Manager and that of Heating and Cooling Sales Manager. Plaintiff's duties were assumed by the Charlotte Heating and Cooling Sales Manager, a man forty-years old. Plaintiff immediately began working in the lesser position, but on January 4, 1978 he submitted a letter of resignation and accepted employment in an equivalent salesman position for one of Whirlpool's competitors.

We need not state further facts except with respect to some of the contentions to which they relate. It suffices to say that if submitted to the jury under legally correct instructions, the conflicting evidence amply permitted the jury to return its verdict finding liability on the part of Whirlpool under the Act and finding that plaintiff had sustained actual damages of $51,977. We turn therefore to the legal issues.

II.

Whirlpool's first argument for reversal is directed at the district court's instructions to the jury regarding what factual determination it was required to make to justify a verdict that Whirlpool had violated the Act. Specifically, Whirlpool contends that the jury should have been instructed that plaintiff's age must have been the determinative factor in Whirlpool's decision to demote him in order for the jury to find a violation of the Act.

Whirlpool's argument is foreclosed by our decision in Smith v. Flax, 618 F.2d 1062, 1066 (4 Cir. 1980). There, in prescribing the standard of causation that must be met to show a violation of the Act we said that a plaintiff is required "to show that age was a determining factor in his discharge." (emphasis added) The phrase was derived from Loeb v. Textron, Inc., 600 F.2d 1003 (1 Cir. 1979), and other language in that opinion defines what is meant. There it was said that for an employee to recover under the Act it is not enough that he show merely that his age was a factor that affected the decision to discharge him. Rather, he must show that "but for" his employer's motive to discriminate against him because of his age, he would not have been discharged. Id. at 1019. It is in this sense that we, too, use the phrase "a determining factor." The only question then is whether the district court's instructions embodied the standard as articulated in Smith. Taken as a whole, we think that they did. ¹ There was on this point no error.

III.

Nor do we think that there was error in the district court's refusal to instruct the jury that it must find that the Act was not violated if it found that Whirlpool merely articulated or stated a legitimate nondiscriminatory reason or explanation for plaintiff's demotion, unless it also found that the reason or explanation was mere pretext. Whirlpool's argument is based upon its reading of Sweeney v. Board of Trustees of Keene State College, 439 U.S. 24, 99 S.Ct. 295, 58 L.Ed.2d 216 (1978). It reads Sweeney as holding that the mere articulation of a legitimate nondiscriminatory reason is sufficient for the employer to be entitled to judgment. We, however, read Sweeney to hold that the articulation of a legitimate nondiscriminatory reason is sufficient to insulate an employer from a directed verdict against it, i. e., it dispels the adverse inference from a plaintiff's prima facie case. The jury in its consideration of all of the evidence may still find that the wrong occurred in the manner established by plaintiff.

Moreover, in this case, plaintiff did not rely on statistical data or any other kind of inferential proof of discriminatory motive. This is therefore not the type of case contemplated by McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973), from which the requested instruction was obviously drawn. Plaintiff produced direct evidence of the purpose and conduct of Whirlpool, demonstrating discrimination against him and others because of age, that the jury clearly found persuasive. The reliance on direct evidence instead of inferences obviated any need for an independent showing that Whirlpool's asserted justifications were "pretextual." See Loeb v. Textron, Inc., 600 F.2d 1003, 1017-18 (1 Cir. 1979). ²

Our decision in this regard also answers Whirlpool's argument that the district court improperly excluded evidence to support Whirlpool's business justification for plaintiff's demotion. As we read the record, Whirlpool amply proved its asserted reasons for consolidating two of its sales divisions and appointing someone other than plaintiff to head them. The excluded evidence merely derogates plaintiff's achievements with Whirlpool. At best the evidence is cumulative so that its exclusion constitutes no reversible error.

IV.

The jury found that Whirlpool's violation of the Act was "willful" and this finding was essential to the district court's assessment of liquidated damages in an amount equal to plaintiff's actual losses as found by the jury. In essence, the jury was told that Whirlpool's violation was willful if the jury found that "the demotion or transfer of the plaintiff was knowingly and intentionally done by the Whirlpool Corporation with the knowledge that the Age Discrimination Act applied" and that the actions taken were not "accidental, or mistaken, or unknowing, or (taken) for some innocent reason ..." Whirlpool argues that it was entitled to an instruction that "Whirlpool must have known that its actions would violate the law" for its conduct to have been "willful."

The instruction given by the district court was in accord with the construction placed upon the meaning of "willful" applied in the enforcement of the Fair Labor Standards Act as amended by the Portal-to-Portal Pay Act, 29 U.S.C. §§ 216, 260 (1976). The liquidated damages provision of the Age Discrimination in Employment Act derives the concept of willfulness from these analogous provisions of the FLSA. We think an instruction as to "willful" guided by experience under the Fair Labor Standards Act is the appropriate one under the legislation which concerns us here. Brennan v. Heard, 491 F.2d 1, 3 (5 Cir. 1974), accurately describes what is required to show willfulness:

Defendants contend that in order for a violation of the FLSA to be willful, the employer must have proceeded with knowledge that his actions were contrary to the requirements of the Act. This statutory interpretation cannot withstand the decisions of this Court in Coleman v. Jiffy June Farms, Inc., 5 Cir. 1972, 458 F.2d 1139, and Brennan v. J. M. Fields, Inc., 5 Cir. 1973, 488 F.2d 443. Those cases establish that neither a good faith belief in the lawfulness of his wage and overtime regulations nor complete ignorance of their invalidity shields the employer from the additional year of liability. Such nescience and naivete are not determinative on the question of willfulness under this Act. An employer acts willfully and subjects himself to the three year liability provision if he knows, or has reason to know, that his conduct is governed by the Fair Labor Standards Act.

Thus, we think that the district court's instruction here was proper. Certainly the evidence supported the jury's finding. In addition to the direct evidence that plaintiff's age was an operative factor in his demotion, Whirlpool admitted that it was aware of the Act when plaintiff was demoted.

V.

Whirlpool contends that the district court should have instructed the jury that plaintiff could recover loss of salary only if it found that he had been "constructively discharged" by Whirlpool. Its theory is that when plaintiff resigned from his position at Whirlpool and went to work for one of its competitors, the termination of his employment was voluntary, and plaintiff had no claim to lost wages unless he proved that Whirlpool deliberately made his job as Greensboro Territory Manager so intolerable that he was forced to quit.

Although the district court declined to give the requested "constructive discharge" instruction, it did instruct the jury about plaintiff's duty to mitigate damages and in that connection told the...