Fray v. Omaha World Herald Co.

• Decision Date: 31 March 1993
• Docket Number: Nos. 91-2439,91-2443 and 91-2713,s. 91-2439
• Citation: 960 F.2d 1370
• Parties: 58 Fair Empl.Prac.Cas. (BNA) 786, 58 Empl. Prac. Dec. P 41,384, 60 USLW 2624 Georgianna FRAY, Appellee/Cross-Appellant, v. The OMAHA WORLD HERALD COMPANY, publisher of the Omaha World Herald Newspaper, a Nebraska corporation, Appellant/Cross-Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1370

960 F.2d 1370

58 Fair Empl.Prac.Cas. (BNA) 786,

58 Empl. Prac. Dec. P 41,384, 60 USLW 2624

Georgianna FRAY, Appellee/Cross-Appellant, v. The OMAHA WORLD HERALD COMPANY, publisher of the Omaha World

Herald Newspaper, a Nebraska corporation,

Appellant/Cross-Appellee.

Nos. 91-2439, 91-2443 and 91-2713.

United States Court of Appeals,

Eighth Circuit.

Submitted Jan. 7, 1992.

Decided April 3, 1992.

Rehearing and Rehearing En Banc

Denied March 31, 1993.

Soren S. Jensen, Omaha, Neb., argued (J. Russell Derr, on brief), for appellant/cross-appellee.

Michael B. Kratville, Omaha, Neb., argued, for appellee/cross-appellant.

Before BEAM, Circuit Judge, HEANEY, Senior Circuit Judge, and LOKEN, Circuit Judge.

LOKEN, Circuit Judge.

This appeal requires us to decide whether § 101 of the Civil Rights Act of 1991 (the "Act") applies retroactively to cases pending when it was enacted. The Omaha World Herald appeals a judgment entered after a jury verdict in favor of Georgianna Fray, a former employee. The jury found that the World Herald violated 42 U.S.C. § 1981 when it failed to promote and then constructively discharged Fray, claims that are precluded by Patterson v. McLean Credit Union, 491 U.S. 164, 109 S.Ct. 2363, 105 L.Ed.2d 132 (1989). Fray contends that the Act preserved her judgment by legislatively overruling Patterson. Concluding that the Act does not apply retroactively to pending cases, we reverse the district court's judgment on Fray's § 1981 claims and remand for a redetermination of whether she should be afforded equitable relief on the parallel judgment in her favor under Title VII.

I.

Fray was hired as a part-time production worker in the World Herald's mailroom on August 24, 1984. As a part-time employee, she worked approximately thirty hours per week at this minimum wage position, primarily operating a machine that inserts advertising supplements into the newspapers.

Fray applied to be a full-time mailroom apprentice in June 1985. The posted job notice described the apprentice duties as "counting, addressing, inserting, stacking, and bundling of newspapers," and advised that mechanical aptitude is necessary and mailroom experience preferred. The apprentice position paid $6.05 per hour and offered a full-time employee's benefits package and the opportunity to become a journeyman after four years. Fray was interviewed for the position, but the World Herald promoted a white male truck driver who, though familiar with local zip codes, had no mailroom experience.

Fray filed employment discrimination claims with the Nebraska Equal Opportunity Commission and the Equal Employment Opportunity Commission, alleging that sex and race discrimination tainted the failures ¹ to promote. She subsequently filed an additional charge alleging retaliatory discrimination as a result of her initial charges. On May 5, 1986, while these charges were pending, the World Herald promoted Fray to a full-time mailroom position (though not an apprentice position). She nevertheless left the company on May 20, 1986.

After receiving notices of her right to sue, Fray commenced this action in June 1987, alleging race, sex, and retaliation discrimination in violation of § 1981, Title VII, and state law. ² In June 1989, the Supreme Court decided in Patterson that § 1981 is limited to claims involving "a refusal to enter into an employment contract on the basis of race." 491 U.S. at 182. In October 1989, one month before trial, the World Herald moved for partial summary judgment, arguing that Fray's § 1981 claims were foreclosed by Patterson. The district court summarily denied the motion as untimely, and the § 1981 claims were tried to a jury on November 28-29, 1989.

At trial, in addition to presenting evidence on her claims of failure to promote, Fray described a number of incidents of alleged racial harassment that contributed to her decision to leave the World Herald, including her car being vandalized near the plant and the World Herald's alleged failure to remove obscene graffiti about her in the men's bathroom. The World Herald presented testimony contradicting these allegations and defending its promotion decisions.

At the conclusion of the trial, the district court submitted Fray's § 1981 claims to the jury and reserved her Title VII claims. Answering special interrogatories, the jury found that the World Herald had violated § 1981 in failing to promote Fray to mailroom apprentice and awarded $36,907 in compensatory damages, $100,000 in punitive damages, and $5,000 for emotional distress. Based upon this verdict, the district court entered judgment for Fray on her § 1981 and Title VII claims but did not award any relief in addition to the amount awarded under § 1981. The district court denied the World Herald's JNOV motion, which was based in part on Patterson; awarded Fray $38,106.18 in costs and attorneys' fees; and denied Fray's motion to amend the judgment to include interest from the date of the jury verdict. Both parties filed timely notices of appeal.

II.

We first conclude that, if Patterson applies, Fray's § 1981 judgment must be reversed for two reasons. First, the district court charged the jury that it could award increased damages if it found that the alleged instances of racial harassment had resulted in Fray's constructive discharge in May 1986. In Taggart v. Jefferson County Child Support Enforcement Unit, 935 F.2d 947, 948 (8th Cir.1991) (en banc), we held that Patterson precludes an employee from recovering for discriminatory discharge under § 1981. Although Fray argues that her constructive discharge claim went to the jury as a damage theory rather than as a separate cause of action, we fail to see the difference from the standpoint of applying Taggart, and in any event we think it clear that the damages awarded by the jury were based upon constructive discharge as a separate, actionable wrong. For this reason alone, Fray's § 1981 judgment must be reversed under Patterson.

In addition, we conclude that Patterson forecloses Fray's failure-to-promote claim under § 1981 altogether. The Supreme Court in Patterson expressly addressed whether promotions can ever be actionable under its restrictive construction of § 1981:

[T]he question whether a promotion claim is actionable under § 1981 depends upon whether the nature of the change in position was such that it involved the opportunity to enter into a new contract with the employer. If so, then the employer's refusal to enter the new contract is actionable under § 1981.... Only where the promotion rises to the level of an opportunity for a new and distinct relation between the employee and the employer is such a claim actionable under § 1981. Cf. Hishon v. King & Spaulding, 467 U.S. 69 [104 S.Ct. 2229, 81 L.Ed.2d 59] (1984) (refusal of law firm to accept associate into partnership) (Title VII).

491 U.S. at 185-86, 109 S.Ct. at 2377-78 (emphasis added). The promotion sought by Fray from part-time mailroom production worker to mailroom apprentice did not constitute such a new and distinct contractual relation.

If promoted, Fray would have received longer hours, higher wages, increased benefits and career advancement opportunities. But she would have continued to be a non-supervisory employee working at an hourly wage in the same department. Her job duties would have been basically the same--in Fray's own words at trial:

The only thing I would have to learn was the zip code[s] and the tying machine that part-time workers did not work on.

Many circuits have held, and we agree, that each step down the path of one's career does not create a new and distinct relation with the employer for purposes of the Patterson test. ³ As the Ninth Circuit commented in Sitgraves v. Allied-Signal, Inc., 953 F.2d 570, 573 (9th Cir.1992), Patterson "strongly suggests that, in addition to an increase in pay and duties, an actionable promotion claim must involve a meaningful, qualitative change in the contractual relationship," such as the Supreme Court's example of a promotion from law firm associate to partner. The promotion which Fray sought does not meet that test. Therefore, the World Herald is entitled to JNOV on her § 1981 claim under Patterson.

III.

The Civil Rights Act of 1991, Pub.L. No. 102-166, 105 Stat. 1071-1100, was signed into law on November 21, 1991. Section 101(2)(b), to be codified at 42 U.S.C. § 1981(b), amends § 1981 to overrule Patterson:

(b) For purposes of this section, the term "make and enforce contracts" includes the making, performance, modification, and termination of contracts, and the enjoyment of all benefits, privileges, terms, and conditions of the contractual relationship.

The Act states that its purpose is "to respond to recent decisions of the Supreme Court by expanding the scope of relevant civil rights statutes." Pub.L. No. 102-166, § 3(4). Simply put, Fray's § 1981 claims fail under Patterson but would succeed under the Act. ⁴ Our next critical question therefore, is whether this new statute applies retroactively to § 1981 claims, such as Fray's, that were pending on appeal at the time of enactment. To our knowledge, only one circuit court has ruled on this question, holding that the Act does not apply retroactively. Vogel v. City of Cincinnati, 959 F.2d 594 (6th Cir.1992). Numerous district courts faced with the issue have reached conflicting conclusions. ⁵

A. The Law of Statutory Retroactivity.

It was a principle of ancient Roman civil law that legislation must be prospectively applied unless the legislature specifically decreed a retroactive application. This principle was incorporated into the English common law and carried forward through the centuries by venerable common law chroniclers such as Bracton, Coke, Blackstone, and Sir Francis Bacon. See generally Elmer E. Smead, The Rule Against Retroactive Legislation: A Basic Principle of Jurisprudence, 20 Minn.L.Rev. 775, 775-781 (1936).

Prior to 1969, this was a long...