Bradley v. Philip Morris Inc.

• Decision Date: 28 April 1992
• Citation: 194 Mich.App. 44,486 N.W.2d 48
• Parties: Ronald BRADLEY and Cynthia Carsley, Plaintiffs-Appellants, v. PHILIP MORRIS INCORPORATED, W. Allen Graham and Barry Hopkins, Defendants-Appellees. Dockets 112019, 112807.
• Court: Court of Appeal of Michigan — District of US

Page 48

486 N.W.2d 48

194 Mich.App. 44

Ronald BRADLEY and Cynthia Carsley, Plaintiffs-Appellants, v. PHILIP MORRIS INCORPORATED, W. Allen Graham and Barry Hopkins, Defendants-Appellees.

Dockets 112019, 112807.

Court of Appeals of Michigan.

Submitted June 11, 1991, at Detroit.

Decided October 29, 1991.

Approved for Publication

April 28, 1992, at 9:00 a.m.

Released for Publication Aug. 3, 1992.

Sachs, Nunn, Kates, Kadushin, O'Hare, Helveston & Waldman, P.C. by Kathleen L. Bogas, Detroit, for plaintiffs-appellants.

Miller, Canfield, Paddock & Stone by W. Mack Faison, Gerald E. Rosen, and Diane M. Soubly, Detroit, for defendants-appellees.

Before JANSEN, P.J., and SULLIVAN and WEAVER, JJ.

SULLIVAN, Judge.

Plaintiffs' suit against their former employer, defendant Philip Morris, Inc., and two of its employees, defendants W. Allen Graham and Barry Hopkins, arose out of the termination of plaintiffs' employment. Plaintiffs alleged wrongful discharge and tortious interference with contractual relationships. Following a jury trial, the jury returned a verdict for plaintiffs on both theories. Plaintiff Bradley was awarded $906,000 against Philip Morris, $10,600 against Hopkins, and $14,500 against Graham. Plaintiff Carsley was awarded $500,000 against Philip Morris, $10,600 against Hopkins, and $14,500 against Graham. A judgment was entered in accordance therewith. Defendants' posttrial motions were denied. They now appeal as of right. We reverse and remand for a new trial on plaintiffs' claims against Philip Morris, and reverse the judgment against defendants Graham and Hopkins with no new trial.

At the outset, we note that reversal of the judgment against Philip Morris is based on the exclusion of evidence we believe Philip Morris was entitled to present to the jury for a proper determination--evidence of misconduct of plaintiffs, which was not discovered until after their employment was terminated, and evidence of Philip Morris' duties under title VII of the Civil Rights Act of 1964, 42 U.S.C. Sec. 2000e et seq., and the Civil Rights Act, M.C.L. Sec. 37.2101 et seq.; M.S.A. Sec. 3.548(101) et seq.

The termination of plaintiffs' employment arose out of events that allegedly occurred on a Detroit Grand Prix weekend in a hotel room paid for by Philip Morris. Philip Morris arranged to have hotel rooms available in the Westin Hotel for its employees and for the purpose of entertaining clients. Plaintiff Ronald Bradley and defendants Graham and Hopkins all were supervisors in Philip Morris' Farmington Hills office.

On the evening in question, two secretaries who worked in the Farmington Hills office--plaintiff Cynthia Carsley and Gina Stauch--met other Philip Morris employees in the Renaissance Center for drinks. Bradley, Carsley, and Stauch ended up in Bradley's hotel room, which was paid for by Philip Morris. Briefly put, Stauch alleged that she fell asleep in a chair in the room, and when she awoke a few hours later, Bradley and Carsley were having sexual intercourse in the bed located a few feet away.

Out of concern over what would happen if they knew she had seen them, Stauch ignored the situation. Eventually, however, Stauch's allegations were made known to Graham and Hopkins. Stauch's work performance and attitude had allegedly declined and she no longer respected Bradley or Carsley. Graham testified that he believed Bradley was favoring Carsley by not assigning her work when she did not appear to be busy. Although Bradley and Carsley testified that they did not have sexual intercourse on the night in question, they were both fired for misconduct--offensive action to another employee.

Plaintiffs' theory at trial was threefold. First, they argued that Stauch had lied, they did not have intercourse in the hotel room in front of Stauch, and therefore just cause to terminate their employment did not exist. Then they argued that even if Stauch was not lying, the misconduct was not work-related. Finally, they argued that Philip Morris did not follow its six-step procedure in terminating their employment--the rules were not uniformly applied as promised. The jury found in favor of plaintiffs.

Before trial, plaintiffs moved to exclude any evidence of previous misconduct that was discovered after their employment was terminated. The trial court ruled that such evidence was irrelevant and highly prejudicial. We disagree.

Evidence of employee misconduct occurring before termination is admissible as substantive evidence even if the former employer did not know of the misconduct until after the termination. Just cause for termination may include facts and circumstances existing at termination but not known to the employer. See 53 Am.Jur.2d, Master and Servant, Sec. 46, pp. 120-121; Leahey v. Federal Express Corp., 685 F.Supp. 127 (E.D.Va.1988); Summers v. State Farm Mutual Automobile Ins. Co., 864 F.2d 700, 708 (C.A.10, 1988); and Pugh v. See's Candies, Inc., 203 Cal.App.3d 743; 250 Cal.Rptr. 195 (1988). Moreover, this type of evidence is relevant to the issue of damages. Having reviewed the record, we conclude that the trial court abused its discretion in excluding this type of evidence and in not permitting defendants' attorney to make a corresponding argument to the jury.

Furthermore, the trial court precluded defendants' attorney from presenting evidence regarding defendants' duties under title VII and the Civil Rights Act with regard to claims of sexual harassment and defendants' concern over its potential liability to Stauch. ¹ An employer may avoid liability for a sexual discrimination claim based on a hostile work environment if it adequately investigated and took prompt and remedial action upon notice of the alleged hostile work environment. Downer v. Detroit Receiving Hosp., 191 Mich.App. 232, 477 N.W.2d 146 (1991).

In the recent decision in Reisman v. Regents of Wayne State University, 188 Mich.App. 526, 470 N.W.2d 678 (1991), involving reverse discrimination, a panel of this Court held that the trial court's instruction that if race was at least one of the reasons for not renewing the plaintiff's contract, the defendant could not avoid liability to the plaintiff by claiming that the defendant's acts were done pursuant to an unapproved affirmative action plan precluded the jury from considering the defendant's possible affirmative action motivation as a justification for the decision not to renew the plaintiff's contract. The Court reasoned that unapproved affirmative action plans are not invalid and that actions taken pursuant to such plans are not discriminatory per se. To hold that an unapproved plan is void ignores the purpose of the Civil Rights Act and fails to consider the duty of public employers under the federal constitution to implement affirmative action programs to remedy the effects of past discrimination. Id., p....