Chaiffetz v. Robertson Research Holding, Ltd.

• Decision Date: 27 August 1986
• Docket Number: No. 85-2533,85-2533
• Citation: 798 F.2d 731
• Parties: 41 Fair Empl.Prac.Cas. 1097, 84 A.L.R.Fed. 103, 41 Empl. Prac. Dec. P 36,525 Michael S. CHAIFFETZ, Plaintiff-Appellant, v. ROBERTSON RESEARCH HOLDING, LTD. and Robertson Research (U.S.), Inc., Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 731

798 F.2d 731

41 Fair Empl.Prac.Cas. 1097, 84 A.L.R.Fed. 103,

41 Empl. Prac. Dec. P 36,525

Michael S. CHAIFFETZ, Plaintiff-Appellant, v. ROBERTSON RESEARCH HOLDING, LTD. and Robertson Research

(U.S.), Inc., Defendants-Appellees.

No. 85-2533.

United States Court of Appeals, Fifth Circuit.

Aug. 27, 1986.

Margaret A. Harris, Stuart M. Nelkin, Carol Nelkin, Houston, Tex., for Michael S. Chaiffetz.

Norman Riedmueller, Houston, Tex., for Robertson Research Holding.

Stanley J. Krist, Houston, Tex., for Robertson Research, Inc.

Appeal from the United States District Court for the Southern District of Texas.

Before GEE, RANDALL and DAVIS, Circuit Judges.

GEE, Circuit Judge:

In this action, Michael Chaiffetz contends that the appellees dismissed him from employment solely because he was an American; this dismissal, he continues, violates both Title VII and 42 U.S.C. Sec. 1981. The district court disagreed, providing a variety of reasons why these provisions are not implicated here. We hold that the district court erroneously found a legitimate, non-discrimatory reason for Chaiffetz's dismissal and that its findings and conclusions do not comport with the requirements of Fed.R.Civ.P. 41(b). We therefore reverse the judgment and remand the case for further proceedings.

Appellee Robertson Research Holding, Ltd. ("RRHL") is the British corporate parent to a worldwide group of companies, including appellee Robertson Research, Inc. ("RRUS"). Founded in 1978, RRUS is a Texas corporation in the business of petroleum exploration consulting. In 1979, it hired appellant Chaiffetz, a white American citizen, as a geologist. He joined a workforce composed chiefly of Americans, with some British and Columbian employees as well.

In 1982, declining oil prices forced RRUS to reduce its workforce, the axe falling primarily on the American contingent. As of June 1982, RRUS employed 66 Americans, 10 British, and four Columbians; two years later, a much smaller workforce consisted of only 40 Americans, 10 British, and three Columbians. One of those let go was Chaiffetz, dismissed in December 1982. This apparently resulted from a decision to release him rather than a Columbian who was a "superstar" for the company, an American woman being paid less than the others, and a British subject.

Chaiffetz brought this action against RRHL and RRUS, alleging that his dismissal constituted discrimination on the basis of his national origin in violation of Title VII, 42 U.S.C. Sec. 2000e et seq. Later adding a 42 U.S.C. Sec. 1981 claim, he sought injunctive, declaratory, and compensatory relief. After he concluded his case-in-chief, both appellees moved for involuntary dismissal under Fed.R.Civ.P. 41(b). Ruling from the bench, the court granted both motions. It later filed written findings of fact and conclusions of law, which provided several grounds for dismissal. On appeal, we review the trial court's conclusions.

Chaiffetz argues that the appellees intentionally discriminated against him because he was an American. Title VII forbids discharging one because of his national origin. 42 U.S.C. Sec. 2000e-2(a)(1). This provision has before been held to prohibit discrimination against American citizens. See Bilka v. Pepe's, Inc., 601 F.Supp. 1254, 1257 (N.D.Ill.1985); Thomas v. Rohner-Gehrig, 582 F.Supp. 669, 674-75 (N.D.Ill.1984). We agree that employment discrimination based only on one's country of birth, "whether that birthplace is the United States or elsewhere, contradicts the purpose and intent of Title VII." Rohner-Gehrig, 582 F.Supp. at 675. Appellees do not really argue otherwise; rather, the debate here concerns whether the court's perceived "legitimate, nondiscriminatory reason" for Chaiffetz's discharge exists in fact. See McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802-04, 93 S.Ct. 1817, 1824-25, 36 L.Ed.2d 668 (1973).

In a Title VII case, the plaintiff "carries the initial burden of showing actions taken by the employer from which one can infer, if such actions remain unexplained, that it is more likely than not that such actions were based on a 'discriminatory criterion illegal under the act.' " Furnco Construction Corp. v. Waters, 438 U.S. 567, 576, 98 S.Ct. 2943, 2949, 57 L.Ed.2d 957 (1978), quoting International Brotherhood of Teamsters v. United States, 431 U.S. 324, 358, 97 S.Ct. 1843, 1866, 52 L.Ed.2d 396 (1977). In presenting his case-in-chief, the Title VII plaintiff usually also introduces evidence suggesting that any explanation the defendant might offer is mere pretext for illegal discrimination. Should the plaintiff meet these burdens, the defendant then "must clearly set forth, through the introduction of admissible evidence, the reasons for the plaintiff's rejection." Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 255, 101 S.Ct. 1089, 1094, 67 L.Ed.2d 207 (1981). For the defendant to meet its burden of production, this evidence must be sufficient to raise "a genuine issue of fact as to whether (the employer) discriminated against the plaintiff." Id. at 256, 101 S.Ct. at 1095.

The record shows that Chaiffetz met the burdens the law imposes. Wallace Dow, a former vice president of RRUS, testified that the company consciously based its dismissals on the nationalities of its employees. Evidence also suggests that any posited costcutting motive would be pretextual; in September 1983, after his discharge, Chaiffetz saw an advertisement in the Oil and Gas Journal describing exactly the job he had held at RRUS. Contacting the Texas Employment Commission to obtain more information, he discovered that RRUS had placed the advertisement and that it was the kind of ad usually placed to help an alien obtain labor certification and a green card. When he queried RRUS, however, Chaiffetz was told that the position did not in fact exist. While we do not say that such evidence, standing alone, suffices to satisfy Chaiffetz's burden of persuasion, it suffices to meet his burden of production. For appellees to prevail, therefore, they must meet the dictates of Burdine, 450 U.S. at 254-56, 101 S.Ct. at 1094-95.

We say this despite the trial court's contrary findings and conclusions. Disregarding the above-mentioned evidence, it seized instead upon an explanation for Chaiffetz's dismissal that we find ourselves unable to follow. In its findings and conclusions, the court ruled that a legitimate reason existed: "Defendants instituted a reduction in work force, there being insufficient work all round and particularly in Plaintiff's specialty and that the employees retained by Defendants were those employees with whom the Defendants had a greater investment." The court had earlier expressed this view in an observation from the bench:

What the heck is the matter with the idea of having invested a great deal of money in bringing people over here when you couldn't find them here and then keeping them. Maybe you'll never get your money back, but at least if there isn't work for everybody to do, keep the ones you've got the most invested in.

We have great difficulty in following this reasoning. In his brief, Chaiffetz describes the "investments" RRUS had in its foreign employees. First, it had paid for legal assistance in obtaining work visas for them. Second, it had paid for accounting assistance to foreign workers preparing their United States tax returns. Third, it gave them expense-paid trips home annually. The first sounds not like an investment but like a start-up cost. Having spent money to obtain a certain work force, RRUS cannot later recoup this cost by deciding whom to keep and whom to fire. The latter two expenses are not investments; rather they are continuing costs that could actually be reduced by keeping Americans and firing foreign workers.

We cannot affirm a dismissal based on such reasoning. In general, Rule 41(b) dismissals are viewed with disfavor:

Except in unusually clear cases the district judge can and should carry the defendant's Rule 41(b) motion with the case--or simply deny it, since the effect will be the same--let the defendant put on his evidence, and then enter a final judgment at the close of the evidence.

Rigel Fiber Corp. v. Anderson Gin Co., 512 F.2d 784, 793 n. 19 (5th Cir.1975). We would certainly act contrary to this spirit should we affirm this conclusion of the trial court. Had RRUS advanced arguments of economic necessity in meeting its burden of production, a different situation might exist; the trial court, however, should not have taken matters into its own hands, especially in the face of evidence suggesting pretext.

The court stated that the investment rationale was not "the total basis of the decision." It did not, however, explain what the additional basis was. It also concluded that Chaiffetz had failed to prove RRUS's intent to discriminate. No further explanation accompanied this conclusion, however; instead, the court simply declared that "there was no intentional discrimination against American employees by defendants because of national origin." As is mentioned above, evidence in the record suggests that, in fact, RRUS intended to discharge the Americans first. This being so, the court's conclusory finding is insufficient as a matter of law.

Fed.R.Civ.P. 41(b) states that "if the court renders judgment on the merits against the plaintiff, the court shall make findings as provided in Rule 52(a)." A finding of intentional discrimination vel non is a finding of fact. Pullman-Standard v. Swint, 456 U.S. 273, 287-90, 102 S.Ct. 1781, 1789-91, 72 L.Ed.2d 66 (1982). We must therefore scrutinize this finding in the light of caselaw applying Rule 52(a). Doing so, we quickly discover that, if the plaintiff...