E.E.O.C. v. Farmer Bros. Co.

• Decision Date: 03 August 1994
• Docket Number: Nos. 92-56012,92-56123,s. 92-56012
• Citation: 31 F.3d 891
• Parties: 65 Fair Empl.Prac.Cas. (BNA) 857, 63 USLW 2163 EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff, v. FARMER BROTHERS COMPANY, Defendant-Appellant-Cross-Appellee, v. Diana ESTRADA, Plaintiff-Intervenor-Appellee-Cross-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 891

31 F.3d 891

65 Fair Empl.Prac.Cas. (BNA) 857, 63 USLW 2163

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff, v. FARMER BROTHERS COMPANY, Defendant-Appellant-Cross-Appellee, v. Diana ESTRADA, Plaintiff-Intervenor-Appellee-Cross-Appellant.

Nos. 92-56012, 92-56123.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Feb. 1, 1994.

Decided Aug. 3, 1994.

Stephen P. Pepe, O'Melveny & Meyers, Los Angeles, CA, for defendant-appellant-cross-appellee.

Theresa M. Traber, Bert Voorhees, Traber & Voorhees, Pasadena, CA, for plaintiff-intervenor-appellee-cross-appellant.

Appeal from the United States District Court For the Central District of California.

Before: D.W. NELSON, REINHARDT, and BRUNETTI, Circuit Judges.

Opinion by Judge D.W. NELSON; Concurrence by Judge BRUNETTI.

D.W. NELSON, Circuit Judge:

The district court found appellant/cross-appellee Farmer Brothers ("Farmer Bros.") liable for intentional gender discrimination against appellee/cross-appellant Diana Estrada ("Estrada") in violation of Title VII and the California Fair Employment and Housing Act ("FEHA"). The district court awarded Estrada $83,343.48 in backpay and $833,434.80 in punitive damages.

Farmer Bros. filed a timely appeal and Estrada cross-appealed. We have jurisdiction over the appeals pursuant to 28 U.S.C. Sec. 1291. We affirm the district court on all claims, with the exception of the district court's calculation of Estrada's lost health and life insurance benefits, which we reverse and remand for further proceedings.

FACTUAL AND PROCEDURAL BACKGROUND

In January of 1980, Estrada began working as an unskilled machine operator in Farmer Bros.'s Allied Production Department. Her first supervisor, Jack Lesser, testified that Estrada was a satisfactory employee without attendance problems. On June 28, 1982, Estrada was moved to the Coffee Department, where she was supervised by Jess Ward, who also indicated that he had no problems with her performance. Although Farmer Bros. maintains that Estrada In June, 1982, Farmer Bros.'s president, Roy F. Farmer, decided to reduce permanently the percentage of women employed in production jobs. To achieve this goal, President Farmer implemented a three-step plan, which he hoped would enable him both to circumvent the agreement with the unions and also to create the appearance that his employment decision was gender neutral. Pursuant to the plan, 21 Farmer Bros. employees, 10 men and 11 women, were laid off; and, during the nine-month period following the layoffs, no one was recalled and no new employee was hired. At the end of the nine month period, however, as soon as the laid-off employees' recall rights had expired, Farmer Bros. began hiring new employees. In the course of just a few months, the company filled the vacancies that had been created by the earlier layoffs by hiring only men. Although Farmer Bros.'s vice-president, George Bennett, and its plant managers, Gene David and Jess Ward, knew of President Farmer Bros.'s plan in advance, they sent a "layoff notice" to all Farmer Bros.'s employees, telling them that several employees temporarily were being laid off due to a reduction in work force. When the layoffs began, several of the male employees were able to retain their employment with Farmer Bros. by "bumping" a less senior employee and assuming that employee's job classification. No woman was even given the option of continuing her employment in this manner. At least one of the men who continued to work at Farmer Bros. by bumping a less senior employee was himself less senior than eight of the women who were laid off. On September 17, 1982 the last employee was laid off.

had a poor attendance record, the record reveals that during her employment at Farmer Bros., Estrada received oral commendations and was never reprimanded or cited for any reason. Throughout the period of her employment, Estrada was a member of one of the unions that represented Farmer Bros.'s production plant employees. Pursuant to a collective bargaining agreement (the "agreement") between the unions and Farmer Bros., laid-off employees retained their seniority and recall rights for a period of nine months after the date of their layoff.

Farmer Bros.'s justification for the layoffs was that it was having financial difficulties. However, in the year ending June 30, 1982, the beginning of the layoff period, Farmer Bros. experienced its highest financial growth rate. In fact, during the nine months following the layoffs, Farmer Bros. had to increase employee overtime to keep up with its increased production demand. In July 1983, just days after the recall rights of the laid-off employees had expired, Farmer Bros. posted notices announcing openings for five production jobs. By the end of 1983, Farmer Bros. had announced 15 job openings and had hired 16 male applicants, two of whom had been laid off in 1982.

In August 1983, Estrada applied for a machine operator job with Farmer Bros. Farmer Bros.'s personnel manager, Beverly Stillson, told Estrada that there were no openings and asked her to fill out an application card instead of a form. Stillson assured Estrada that her application card would be kept on file. No one from Farmer Bros. ever contacted her, and the following month Farmer Bros. hired a man with no prior experience as a machine operator. From September 1983 through February 1988, Farmer Bros. hired 64 production employees--63 men, and 1 woman. ¹ Of that number, 43 were machine operators, all of whom were males. At trial, Stillson admitted that, beginning in 1983, she screened out women who applied for machine operator positions. Stillson reported having told a former co-worker that she "did not like what was going on out there in the plant with managers not hiring any women." [ER:254].

On September 23, 1983, Estrada filed a Charge of Discrimination with the California Department of Fair Employment and Housing ("DFEH"). Less than a month later, Estrada received a letter from the DFEH director informing her that, pursuant to a work-sharing agreement between the two agencies, her claim had been forwarded to the Equal Employment Opportunity Commission ("EEOC") and that, under Cal.Gov'tCode Sec. 12965(b), she had a right to The EEOC ended its investigation and its attempt to conciliate in August 1987, and, on February 20, 1988, filed a class action alleging that Farmer Bros. had discriminated against more than thirty of its former women employees, including Estrada. On June 7, 1988, Estrada filed a motion to intervene in the EEOC's lawsuit, which the district court granted. On September 27, 1989, Estrada filed a motion to amend her complaint-in-intervention to include identical gender discrimination claims under the FEHA, which the court granted on December 4, 1989. The district court ruled that the state claims "related back" to June 1988, when Estrada moved to intervene. The EEOC lawsuit was settled on September 17, 1990, when the district court approved a consent decree between Farmer Bros. and the EEOC. Under the decree, the EEOC agreed to dismiss the lawsuit with prejudice and Farmer Bros. agreed to adopt multiple procedures to eliminate gender discrimination in applications, employment, promotions, and training, and to pay the plaintiff class a total of $126,152 to be divided equally among the 30-40 class members.

bring a civil suit under the FEHA within one year of the date of the notice.

The district court found that after September, 1985, Estrada failed to mitigate damages and, therefore, granted partial summary judgment in favor of Farmer Bros. On July 3, 1991, over Estrada's objection, the district court granted Farmer Bros.'s motion to bifurcate the liability and damages phases of the action. Farmer Bros. opted for a bench trial rather than a jury trial.

At the end of an eleven day trial on liability, the district court issued findings of fact and conclusions of law. The district court found that there was substantial direct evidence that Farmer Bros.'s motive for laying off Estrada and her women co-workers was gender discrimination. The court based its conclusion partly on the testimony of officers and managers who had participated in the decision to lay off Estrada. Former Farmer Bros. employee, James Alger, whose testimony the district court found credible, revealed that Ward (one of Estrada's supervisors), had reported that President Farmer announced that he "would spend every last dime" to keep women employees from coming back, and uttered words to the effect that "the only people you will be seeing running the lines will be men; there will be no more women hired." [ER:232]. Farmer Bros.'s Vice-President of Administration, Roy E. Farmer, testified that, after reviewing the gender composition of the plant work force and Farmer Bros.'s hiring statistics, he told his father, President Farmer, that the company employed a statistically low number of women in the plant and that Farmer Bros. would have to "start looking at women in the same way it looked at men." [ER:255]; Bennett, Farmer Bros.'s Vice-President, testified that he had not considered and would not consider women for a whole range of production jobs because he thought women lacked the physical capacity to do the work required. ² The court found that sexist views were common among Farmer Bros.'s managers.

The district court also found that the justifications put forth by Farmer Bros. for its decision to lay off and eventually to terminate Estrada and her co-workers were pretextual. Among the court's express findings were the following: in the year the layoffs started, Farmer Bros. had the greatest growth year in its history, Farmer Bros.'s sole reason for not rehiring Estrada was her gender, and Farmer Bros. failed to show that it would have rejected Estrada based on her attendance record. The court further found that, while Farmer Bros. had a written policy prohibiting discrimination in employment,...