Flanagan v. Aaron E. Henry Community Health Services Center

• Decision Date: 13 July 1989
• Docket Number: No. 88-4310,88-4310
• Citation: 876 F.2d 1231
• Parties: 51 Fair Empl.Prac.Cas. 1483, 50 Empl. Prac. Dec. P 39,137 Karen FLANAGAN, Plaintiff-Appellee, v. AARON E. HENRY COMMUNITY HEALTH SERVICES CENTER, et al., Defendants-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1231

876 F.2d 1231

51 Fair Empl.Prac.Cas. 1483,

50 Empl. Prac. Dec. P 39,137

Karen FLANAGAN, Plaintiff-Appellee, v. AARON E. HENRY COMMUNITY HEALTH SERVICES CENTER, et al Defendants-Appellants.

No. 88-4310.

United States Court of Appeals Fifth Circuit.

July 13, 1989.

Johnnie E. Walls, Jr., Tyree Irving, Greenville, Miss., for defendants-appellants.

Charles M. Merkel, John H. Cocke, Clarksdale, Miss., for plaintiff-appellee.

Appeal from the United States District Court for the Northern District of Mississippi.

Before ALDISERT ^*, REAVLEY, and HIGGINBOTHAM, Circuit Judges.

REAVLEY, Circuit Judge:

Dr. Karen Flanagan, a white physician, alleged claims of racial discrimination and breach of contract against the Aaron E. Henry Community Health Services Center (Center) and its administrators, Dr. William Booker and Alpha Richard. The jury found in favor of Flanagan and awarded a total of $70,000 in compensatory and punitive damages. The defendants challenge the judgment claiming that Flanagan presented insufficient evidence to support the claims of liability and the damages awarded. We affirm but modify the damages award.

I. Background

During her medical training, Flanagan received financial assistance from the National Health Service Corps, which was to be repaid with money or service. Pursuant to a settlement on terms of her obligation to the Corps, the Corps gave Flanagan the option of paying over $180,000 or serving three years in a medically deprived area. Flanagan opted for service and was matched with defendant Center. The Center serves primarily black and indigent patients in Clarksdale, Mississippi.

Flanagan began work at the Center in June 1986. The professional staff at the Center consisted of Richard as Executive Director, Dr. Booker as Medical Director, Flanagan as Staff Physician, and a number of nurses. Soon after her arrival, problems arose between Flanagan, Booker, and Richard. Neither Flanagan nor Richard had arranged for malpractice insurance to cover Flanagan at the Center; therefore, Flanagan was unable to work for the two weeks immediately following her arrival. In late August, Richard suspended Flanagan for four days without pay for infractions of the Center's policies; Richard found the discipline warranted by Flanagan's failure to follow a dress code, failure to get authorization for a dietician's lecture to the nurses during business hours, and failure to get adequate approval before leaving the Center during business hours. It is clear that the parties did not work in harmony.

Soon after the disciplinary suspension was served, Richard gave Flanagan a set of conditions for continued employment and placed her on 30 days probation. Flanagan responded without promising total compliance with the conditions and was soon served with 30 days notice of termination. At her request Flanagan received a hearing before the Center's board of directors. The board voted 5 to 4 to uphold Richard's actions. Flanagan's termination was effective October 31, 1986.

Flanagan brought this action in federal district court alleging a breach of contract and racial discrimination in her employment violative of 42 U.S.C. Sec. 1981 and Title VII, 42 U.S.C. Sec. 2000e-2. The jury found in favor of Flanagan against Richard and Booker on the claim of racial discrimination and awarded $25,000 in damages; on the breach of contract claim, the jury found in favor of Flanagan against the Center and awarded $25,000 in damages; on the claim for punitive damages under Sec. 1981, the jury assessed $10,000 against Richard and $10,000 against Booker.

The district court amended the judgment, upon Flanagan's motion, to extend liability to the Center for compensatory and punitive damages based on the findings of racial discrimination. The defendants' motions for judgment notwithstanding the verdict, a new trial, and a reduction in damages were denied. The defendants appeal from the judgment against them claiming the district court erroneously denied their motions on the contract and discrimination claims; further, the defendants contend insufficient evidence exists to support the award of damages.

II. Discussion

A. Racial Discrimination

To prove an allegation of racial discrimination Flanagan must show that she belonged to a racial minority within the Center, she was terminated from a position for which she was qualified, and she was replaced with someone not in her protected class; the defendants can rebut the resulting inference of discrimination by articulating a nondiscriminatory reason for Flanagan's termination; Flanagan, then, must show that the defendants' purported reason is a pretext for discrimination. See Whiting v. Jackson State University, 616 F.2d 116, 120-21 (5th Cir.1980); see also McDonnell Douglas Corporation v. Green, 411 U.S. 792, 802-03, 93 S.Ct. 1817, 1824, 36 L.Ed.2d 668 (1973); Guillory v. St. Landry Parish Police Jury, 802 F.2d 822, 824 (5th Cir.1986), cert. denied, 482 U.S. 916, 107 S.Ct. 3190, 96 L.Ed.2d 678 (1987). When 42 U.S.C. Sec. 1981 and Title VII are alleged as parallel bases of relief, the same elements of proof are required for both actions. See Comeaux v. Uniroyal Chemical Corp., 849 F.2d 191, 192 n. 1 (5th Cir.1988); Hamilton v. Rodgers, 791 F.2d 439, 442 (5th Cir.1986) (citing Whiting v. Jackson State Univ., 616 F.2d 116, 121 (5th Cir.1980)). Most of the elements of Flanagan's claim are not contested. Flanagan was the only white employee at the Center; she was terminated from her position as staff physician; she was a qualified and competent physician; and, she was replaced by a black doctor. The defendants' only contention is that the evidence is insufficient to support the jury's finding that Flanagan's termination was the result of racial discrimination.

All the evidence must be reviewed in the light most favorable to the jury's verdict and the verdict must stand unless the evidence points "so strongly and overwhelmingly in favor of one party that the Court believes that reasonable men could not arrive at a contrary verdict." Boeing Co. v. Shipman, 411 F.2d 365, 374 (5th Cir.1969). Flanagan presented evidence of her disparate treatment in relation to other black employees. For instance, Ellery Gray, the director of the Center prior to Richard, informed Flanagan that her salary would be $50,000. The amount of federal funds budgeted to the Center for Flanagan's salary, and the amount for the individual salaries of two more doctors at an affiliated clinic in Tunica, was $50,000. Richard later drafted Flanagan's contract, however, to provide a salary of $46,000. The two new doctors at the Tunica clinic, both black, received $50,000 annual salaries. The Center raised the salary of Dr. Jefferson, the black physician who replaced Flanagan at the center, to $51,000 less than a week after her arrival.

In other aspects, the defendants handled Flanagan's employment differently than the employment of black employees. Flanagan was refused continuing education time while Dr. Booker took a number of trips for seminars and conferences. The evidence tended to prove a lackadaisical attitude of Richard and Booker toward violations of the rules by the doctors at the Tunica clinic while imposing harsh reprimands and suspensions on Flanagan for seemingly minor infractions of the rules. For example, the doctors in Tunica did not receive hospital privileges as required by their contracts until after this litigation was initiated. This meant they were not on call for the hospital emergencies of their patients. The doctors were not pressured to correct the situation nor were their salaries adjusted downward as provided by their contracts. Flanagan, on the other hand, was on call every other night and every other weekend.

In addition, Flanagan provided witnesses who testified that both Booker and Richard displayed racial animosity toward her. Dr. Harris, a black physician at the Clarksdale hospital received a call from Booker about the care provided to a patient. Booker allegedly accused Dr. Harris, in reference to Dr. Flanagan, of "siding with the white bitch." A nurse at the center testified that Richard prepared the staff for Flanagan's arrival by telling them that Flanagan was prejudiced and would be difficult to work with.

Other incidents of animosity, with each side telling its own version, were recounted to the jury. The defendants presented evidence of Dr. Flanagan's insubordination and misconduct, which they claimed to be the basis of her termination. The jury credited Flanagan's evidence of racial discrimination and dismissed the reasons presented by the defendants as pretextual. We hold that Flanagan presented sufficient evidence of intentional discrimination to support the jury's verdict on this claim.

The defendants next challenge the district court's post-verdict order applying the doctrine of respondeat superior and holding the Center to be jointly and severally liable with Booker and Richard on the claims of racial discrimination. Title VII liability is based on the actions of the employer. See 42 U.S.C. Sec. 2000e-2(a)(1). Richard and Booker are liable only as agents of their employer, the Center. See Meritor Savings Bank, FSB v. Vinson, 477 U.S. 57, 72, 106 S.Ct. 2399, 2408, 91 L.Ed.2d 49 (1986); Hamilton, 791 F.2d at 442-43. The authority of both Booker and Richard over the employment status of Flanagan, and their almost unfettered control over the operations of the Center, place them in an agency relationship with the Center. Therefore, the Center's liability as principal under Title VII is clear.

Because punitive damages are not available under Title VII, see Bennett v. Corroon & Black Corp., 845 F.2d 104, 106 (5th Cir.1988), cert. denied, --- U.S. ----, 109 S.Ct. 1140, 103 L.Ed.2d 201 (1989), we also should determine whether, under Sec. 1981, the district court correctly held the Center, a private employer, liable for the acts of Richard and Booker, supervisory...