Craig v. Y & Y Snacks, Inc.

• Decision Date: 02 December 1983
• Docket Number: 82-1508,Nos. 82-1486,s. 82-1486
• Citation: 721 F.2d 77
• Parties: 33 Fair Empl.Prac.Cas. 187, 32 Empl. Prac. Dec. P 33,922 Valerie A. CRAIG, Appellee-Cross-Appellant, v. Y & Y SNACKS, INC. a/k/a Popcorn Supply Co., Appellant-Cross-Appellee.
• Court: U.S. Court of Appeals — Third Circuit

Page 77

721 F.2d 77

33 Fair Empl.Prac.Cas. 187,

32 Empl. Prac. Dec. P 33,922

Valerie A. CRAIG, Appellee-Cross-Appellant, v. Y & Y SNACKS, INC. a/k/a Popcorn Supply Co., Appellant-Cross-Appellee.

Nos. 82-1486, 82-1508.

United States Court of Appeals, Third Circuit.

Argued June 9, 1983.

Decided Nov. 7, 1983.

Rehearing and Rehearing En Banc Denied Dec. 2, 1983.

Howard Wallner (argued), Germaine Ingram (argued), Community Legal Services, Inc., Philadelphia, Pa., for appellee-cross-appellant.

Wendy L. Tice-Wallner, San Francisco, Cal., for appellant-cross-appellee.

Before SEITZ, Chief Judge, SLOVITER, Circuit Judge and SAROKIN, District Judge ^*.

OPINION OF THE COURT

SLOVITER, Circuit Judge.

Before us are cross-appeals following a judgment for the employee in an action alleging sexual harassment in violation of Title VII of the Civil Rights Act of 1964, Sec. 701 et seq., as amended, 42 U.S.C. Sec. 2000e et seq. The district court found that the plaintiff below was fired by her supervisor for rebuffing his sexual advances. The employer, while not disputing plaintiff's account of events leading up to her dismissal, maintains that she was discharged for independent, legitimate reasons. On the separate issue of damages, the employee cross-appeals from the deduction of unemployment compensation from her gross back pay award.

I. Facts and Procedural History

Valerie A. Craig worked for Y & Y Snacks, Inc. in the packaging department, where popcorn and other snack foods were packed and bagged in a small assembly-line operation. Her supervisor at all relevant times was Harris Hughes, who, by his own testimony and that of the company president, exercised "complete discretion" over hiring, firing, scheduling and disciplining employees in the department.

On July 15, 1978, Hughes joined Craig and several other employees for drinks after work, and then gave Craig a lift. In the car Hughes proposed that they go to Craig's house for the purpose of sexual relations. Craig refused. Hughes persisted, Craig persisted in refusing, and before he dropped her off Hughes said he would "get even" with her. Craig's account of the events of July 15 stand uncontradicted.

The following week Hughes was noticeably cool to Craig and several times refused to excuse her to use the restroom, a departure from his previous practice. On July 25 Craig did not report to work, having left a message before the shift started that she was ill and had gone to her doctor's office. She returned the next day with a doctor's note to find that Hughes had dismissed her.

Craig testified, and the district court found, that she immediately told David Yaffe, Y & Y's President, of her discharge and of her suspicion that it was motivated by the events of July 15. Yaffe told her he would look into the matter, but when she called him several days later he said that her record justified her dismissal and that he would not reinstate her. Yaffe testified he knew nothing of the incident until months later, when he received a complaint that Craig had filed with the Equal Employment Opportunity Commission. The district court credited Craig's account regarding notice, and determined liability in her favor. The court subsequently issued an order directing Craig's reinstatement, enjoining Y & Y from making future reprisals against Craig, and granting Craig back pay, reduced by the amount of interim earnings and unemployment compensation that she received after her dismissal.

II. Liability

Y & Y's quarrel with the district court's finding of liability is twofold. First, Y & Y contends that Craig failed to meet her burden of proof. Second, Y & Y claims that the court failed to apply the requirement of Tomkins v. Public Service Electric & Gas Co., 568 F.2d 1044 (3d Cir.1977), that the employer have actual or constructive knowledge of the harassment before it may be held liable.

1. We turn briefly to the first point, essentially a sufficiency-of-the-evidence question. Our scope of review is quite narrow. In sexual harassment cases, where there are frequently serious credibility issues, we are bound to accept the trial court's findings, as we are in all Title VII cases, unless they are clearly erroneous. Henson v. City of Dundee, 682 F.2d 897, 906 (11th Cir.1982); Bundy v. Jackson, 641 F.2d 934, 950 (D.C.Cir.1981); cf. Croker v. Boeing Co., 662 F.2d 975, 993-94 (3d Cir.1981) (Title VII racial discrimination claim); McNeil v. McDonough, 648 F.2d 178, 180 (3d Cir.1981) (same); Ostapowicz v. Johnson Bronze Co., 541 F.2d 394, 400 (3d Cir.1976), cert. denied, 429 U.S. 1041, 97 S.Ct. 741, 50 L.Ed.2d 753 (1977) (sex discrimination in job classification).

The allocation of the burden of proof in a Title VII case is well settled; the Supreme Court established the standard in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973), and reaffirmed it recently in Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 101 S.Ct. 1089, 67 L.Ed.2d 207 (1981). The district court followed the McDonnell Douglas/Burdine regimen closely. It found Craig met her burden of establishing by the preponderance of the evidence a prima facie case, a burden the Court characterized in Burdine as "not onerous." Id. at 253, 101 S.Ct. at 1094. The district court found that Craig's dismissal by Hughes was retaliatory. The court, after referring to our decision in Tomkins v. Public Service Electric & Gas Co., supra, also found that Y & Y had both actual and constructive notice of Hughes' actions.

The court found that the defendant articulated a legitimate, nondiscriminatory reason for discharging Craig. Craig's work record was less than exemplary. Though Hughes testified that she was an "outstanding employee" in other respects, she had been absent and tardy many times in the months before her dismissal. Hughes, in the meantime, had received instructions from Yaffe to improve attendance in his department because frequent absences were causing production problems. Under the Supreme Court's decisions, Craig was therefore required "to prove by a preponderance of the evidence that the legitimate reasons offered by the defendant were not its true reasons, but were a pretext for discrimination." Texas Department of Community Affairs v. Burdine, 450 U.S. at 253, 101 S.Ct. at 1093 (citations omitted).

The district court concluded Craig proved pretext by showing that she was never given a three-day suspension before discharge, notwithstanding Hughes' testimony that the employer's practice was to make such a suspension a mandatory predicate for the ultimate sanction of discharge. This finding is amply supported by the fact that Y & Y, while conceding that a suspension would be a matter of record, was unable to produce any record of such a suspension. This led the court to conclude that notwithstanding the stated reason of further absence Hughes terminated Craig "for the actual reason that this was a device to get even" (emphasis added). The district court thereupon found "as a fact and conclude[d] as a matter of law that a discharge which might otherwise have been legitimately supportable was on this record pretextual and in violation of Title VII." We have examined the record and find no error.

2. Y & Y complains next that the district court failed to follow this court's ruling in Tomkins v. Public Service Electric & Gas, supra. In Tomkins, the district court, characterizing sexual harassment as an "abuse of authority ... for personal purposes" outside the scope of Title VII, had dismissed the employee's complaint. In reversing the dismissal and directing reinstatement of the complaint, Judge Aldisert, in a seminal opinion on the issue of sexual harassment, distinguished between "complaints alleging sexual advances of an individual or personal nature" and "those alleging direct employment consequences flowing from the advances", which do constitute Title VII violations. He stated two elements are necessary to find a violation of Title VII: "first, that a term or condition of employment has been imposed and second, that it has been imposed by the employer, either directly or vicariously, in a sexually discriminatory fashion." 568 F.2d at 1048.

Y & Y suggests that Tomkins imposed a requirement that an employer have actual or constructive knowledge of the sexual harassment at the time the advance was made. Y & Y Brief at 13. Nothing in Tomkins imposes such an unreasonable burden on an employee. In the relevant, and oft-quoted, language, the court stated:

Applying these requirements to the present complaint, we conclude that Title VII is violated when a supervisor, with the actual or constructive knowledge of the employer, makes sexual advances or demands toward a subordinate employee and conditions that employee's job status ... on a favorable response to those advances or demands, and the employer does not take prompt and appropriate remedial action ....

568 F.2d at 1048-49 (emphasis added). As the Tomkins opinion noted, the complaint filed in that case alleged that the plaintiff's employer "either knowingly or constructively, made acquiescence in her supervisor's sexual demands a necessary prerequisite of, or advancement in, her job." Id. at 1046. The holding on appeal was that these allegations, if proven, would establish a Title VII violation.

The district court in this case found that Yaffe, Y & Y's President, had actual notice of the harassment immediately after the discharge, and failed to take adequate remedial steps. Actual knowledge at the time of the employment decision at issue satisfies the Tomkins ruling.

Furthermore, when a supervisor who has plenary authority over hiring, discipline and dismissal makes an employment decision, that decision may be imputed to the employer. Title VII itself defines "employer" to include "any agent of such a person." 42 U.S.C. Sec. 2000e(b). It is widely recognized in racial discrimination cases that an employer is liable as a...