Brown v. J. Kaz, Inc.

• Decision Date: 11 September 2009
• Docket Number: No. 08-2713.,08-2713.
• Parties: Kimberly BROWN, Appellant v. J. KAZ, INC. t/d/b/a Craftmatic and Craftmatic of Pittsburgh.
• Court: U.S. Court of Appeals — Third Circuit

581 F.3d 175

Kimberly BROWN, Appellant v. J. KAZ, INC. t/d/b/a Craftmatic and Craftmatic of Pittsburgh.

No. 08-2713.

United States Court of Appeals, Third Circuit.

Argued July 8, 2009.

Filed: September 11, 2009.

Rufus A. Jennings, (Argued), Timothy M. Kolman, Timothy M. Kolman & Associates, Attorneys for Appellant.

William G. Merchant, Hilary W. Taylor, (Argued), Papernick & Gefsky, Monroeville, Pa Attorneys for Appellee.

Before: SLOVITER, AMBRO, and JORDAN, Circuit Judges.

OPINION OF THE COURT

SLOVITER, Circuit Judge.

Appellant Kimberly Brown appeals the District Court's grant of summary judgment in favor of appellee J. Kaz, Inc., d/b/a Craftmatic of Pittsburgh ("Craftmatic"), on her employment discrimination claims under Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq., the Civil Rights Act of 1866, 42 U.S.C. § 1981, and the Pennsylvania Human Relations Act ("PHRA"), 43 Pa. Cons.Stat. §§ 951 et seq.

We will affirm the District Court's grant of summary judgment on Brown's claims under Title VII and the PHRA because, as the District Court concluded, Brown was an independent contractor, rather than an employee, of Craftmatic and therefore outside the protections of those statutes. In contrast, Brown's claim under section 1981 requires more extended consideration, as that claim presents us with a matter of first impression in this circuit.

I.

Craftmatic is a distributor of adjustable beds. Craftmatic sells its products through sales representatives who visit potential customers' homes to demonstrate the beds and attempt to make sales. In the summer of 2006, Brown, an African-American female, responded to a Craftmatic advertisement seeking sales representatives and spoke twice by telephone with Jay Morris, Craftmatic's recruiting manager, regarding a job.

Morris invited Brown to attend a training session at Craftmatic's Pittsburgh, Pennsylvania, office in August 2006. During these conversations, Brown, a resident of Cleveland, Ohio, told Morris that she would take the bus to Pittsburgh because she preferred not to drive in unfamiliar places. Morris testified at his deposition that he was concerned about Brown's ability to meet the transportation requirements of the sales representative position in light of Brown's unwillingness to drive to Pittsburgh, but nonetheless invited her to training because she was well-spoken and showed enthusiasm for the position.

Brown attended a training session, which was held from August 8-10, 2006, with two other trainees, Ronald Gibbs and Daryl Rinehart, neither of whom was African-American. Brown, Gibbs and Rinehart were met at Craftmatic by Morris. Brown contends that, during that initial meeting, Morris stated that "I know she [Brown] is going to be a problem" and that "She's going to be a headache. She asks a lot of questions." App. at 324.

Craftmatic's training manager, Daniel Pesta, conducted the training session, during which the trainees were introduced to the product they would be selling and Craftmatic's business practices. As part of the training, Pesta gave the trainees an assignment to complete between the first and second days of training and another assignment between the second and third days; the assignments required the trainees to complete standard sales contracts and similar activities. According to Pesta, Brown failed to complete both assignments. However, Craftmatic's owner, John Girty, testified at his deposition that Pesta told him that Brown completed her assignments; Brown also contends that she completed her assignments. In any event, Pesta provided Brown with a copy of Craftmatic's "Independent Contractor Agreement" at the end of the second day of training, and Brown signed the agreement on the final day of training.

Later the final training day, Brown, Gibbs and Rinehart took a break on a deck outside of Craftmatic's office. Morris approached them, extended his hand to all three, shook hands with Gibbs and Rinehart, and exchanged pleasantries with them. However, for reasons that are unclear, Brown refused to shake Morris' hand.

The details of what happened next are disputed, although it is undisputed that Brown and Morris had a heated argument. According to Brown, after she refused to shake his hand, Morris stated, "Well, you ain't nothing but a black person anyway" and "Well, you ain't nothing but the N word." App. at 329. Brown states that, after she asked, "Are you calling me a nigga," Morris "smirked and shook his head." App. at 329-30. Morris, on the other hand, testified at his deposition that he told Brown that "not shaking a man's hand is like calling a black person a derogatory name" and that "it's like calling a black person the N-word." App. at 157-58. After this exchange, as summarized by the District Court, "the two engaged in some discussion about slapping or hitting people, although it is unclear, but irrelevant, as to who initiated this topic of discussion." App. at 4.

Brown thereafter returned to the training room. Morris entered the room and told Brown that, if he had anything to say about it, she would not work for Craftmatic. Morris then reported the incident to Girty and told him that he did not want Brown to be a sales representative. Girty told Morris that he had used a bad choice of words. Pesta, who was not present at the incident, also met with Girty following the incident and also believed that Brown should not be permitted to act as a sales representative for Craftmatic, although it is unclear whether he so informed Girty at that meeting.

After meeting with Morris and Pesta, Girty decided that Craftmatic would not use Brown as a sales representative. Pesta informed Brown of Girty's decision and provided a check from Craftmatic to reimburse her for the expenses she incurred in attending the training session.

Brown thereafter timely filed charges of discrimination with the Equal Employment Opportunity Commission ("EEOC") and the Pennsylvania Human Relations Commission. The EEOC issued a dismissal and notice of rights to Brown on March 27, 2007, and Brown then filed the instant action alleging violations of Title VII, section 1981 and the PHRA based on theories of disparate treatment, hostile work environment, and retaliation. Following discovery, the District Court granted summary judgment to Craftmatic on all of Brown's claims.

The District Court granted summary judgment on the claims under Title VII and the PHRA because Brown was an independent contractor and therefore outside the protections of those acts. On the other hand, the District Court concluded that Brown's claims under section 1981 were not barred because of her independent contractor status. However, the Court held that Brown could not prove that the termination of her contractual relationship with Craftmatic violated section 1981 under either the mixed-motive analysis of Price Waterhouse v. Hopkins, 490 U.S. 228, 109 S.Ct. 1775, 104 L.Ed.2d 268 (1989), or pretext analysis of McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973). According to the Court, even assuming that Brown produced direct evidence of discriminatory racial animus that was causally related to Girty's decision to terminate her employment, Craftmatic was entitled to summary judgment because it proved that the same decision would have been made regardless of Brown's race.

Specifically, the Court concluded that Girty had two concerns regarding Brown that justified her termination. First, based on the altercation with Morris, Girty was concerned that "Brown would exhibit inappropriate behavior in a customer's home." App. at 17. The Court reasoned that, "[h]ad Morris uttered no racial slurs during the argument, but reported the same incident to Girty, Girty would have been equally concerned with Brown's attitude and behavior" because sales representatives must enter customers' homes and "Girty would need to be comfortable knowing that his sales representative could remove himself or herself from the altercation swiftly and without escalating it." App. at 17-18. Second, Girty was concerned "that Brown, who admittedly does not like to drive in unfamiliar places, could not perform the job of a traveling sales representative." App. at 17.

Finally, the Court granted Craftmatic summary judgment on Brown's hostile work environment claim because Brown produced no evidence that racial discrimination was regular or pervasive at Craftmatic and on Brown's retaliation claim because she had not engaged in any protected activity before her contractual relationship with Craftmatic was terminated. Brown timely appealed.

II.

The District Court had jurisdiction under 28 U.S.C. § 1331. This court has jurisdiction under 28 U.S.C. § 1291. "On an appeal from a grant or denial of summary judgment, our review is plenary and we apply the same test the district court should have utilized initially." Giles v. Kearney, 571 F.3d 318, 322 (3d Cir.2009). "A court may grant summary judgment only when the record `shows that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.'" Id. (quoting Fed.R.Civ.P. 56(c)). We must construe the evidence in favor of the non-moving party, and summary judgment must be denied if there exists enough evidence "to enable a jury to reasonably find for the nonmovant on the issue." Id. (citation omitted).

III.

A. Title VII and PHRA Claims

Brown contends that the District Court erred in concluding that she was an independent contractor of Craftmatic, rather than an employee, and therefore not protected by Title VII or the PHRA.¹ The term "employee" is defined in Title VII as "an individual employed by an employer." 42 U.S.C. § 2000e(f). In Nationwide Mutual Insurance Co. v. Darden, a case arising under the Employee Retirement Income Security Act, the Supreme Court construed an identical provision to incorporate traditional agency law principles. 503 U.S. 318,...