Hamann v. Gates Chevrolet, Inc.

• Decision Date: 14 September 1990
• Docket Number: No. 89-2465,89-2465
• Citation: 910 F.2d 1417
• Parties: 116 Lab.Cas. P 56,379, 5 Indiv.Empl.Rts.Cas. 1099 Shirlee L. HAMANN, Plaintiff-Appellant, v. GATES CHEVROLET, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1417

910 F.2d 1417

116 Lab.Cas. P 56,379, 5 Indiv.Empl.Rts.Cas. 1099

Shirlee L. HAMANN, Plaintiff-Appellant, v.GATES CHEVROLET, INC., Defendant-Appellee.

No. 89-2465.

United States Court of Appeals Seventh Circuit.

Argued May 31, 1990.

Decided Aug. 15, 1990.

Rehearing and Rehearing En Banc Denied Sept. 14, 1990.

Robert J. Palmer, E. Spencer Walton, Jr., Lance M. Clark, May, Oberfell & Lorber, South Bend, Ind., for plaintiff-appellant.

Douglas D. Small, Seth D. Linfield, Barnes & Thornburg, John T. Mulvihill, South Bend, Ind., for defendant-appellee.

Before WOOD, Jr., and EASTERBROOK, Circuit Judges, and ESCHBACH, Senior Circuit Judge.

ESCHBACH, Senior Circuit Judge.

Indiana is an "employment at will" state.See, e.g., Morgan Drive Away, Inc. v. Brant, 489 N.E.2d 933, 934(Ind.1986);Ryan v. J.C. Penney Co., 627 F.2d 836(7th Cir.1980).Generally, employers may terminate employees for no cause whatsoever or for any cause at all without incurring liability.E.g., Call v. Scott Brass, Inc., 553 N.E.2d 1225, 1227(Ind.Ct.App.1990);Lawson v. Haven Hubbard Homes, Inc., 551 N.E.2d 855, 860(Ind.Ct.App.1990);Wilmington v. Harvest Ins. Cos., 521 N.E.2d 953, 955(Ind.Ct.App.1988);Rice v. Grant County Board of Comm'rs, 472 N.E.2d 213, 214(Ind.Ct.App.1984)."Generally," however, is not always.There are exceptions to the general rule.One of them is the "refusal to act illegally" retaliatory discharge exception: If an employer fires an employee in retaliation for the employee's refusal to commit an illegal act for which the employee would be personally liable, the employee may successfully sue the employer.SeeMcClanahan v. Remington Freight Lines, Inc., 517 N.E.2d 390(Ind.1988).

This diversity case concerns the "refusal to act" exception.Shirlee Hamann says that her former employer, Gates Chevrolet, Inc., fired her in retaliation for her refusal to commit illegal acts for which she would be personally liable, i.e., the altering, or aiding, inducing, causing, or agreeing to the altering, of certificates of title.Gates says otherwise.In the district court, the issue came to a head on Gates's motion for summary judgment.For the district court's ruling below ¹, 723 F.Supp. 63, and our ruling on this appeal, Gates has conceded that Hamann's version of the facts are true.Those facts follow.

Hamann was hired by Gates on December 7, 1982.Originally, her job was in the title department, her position that of a title clerk.After several months she was reassigned to Gates's accounting department, where she obtained a job handling Gates's accounts payable.Despite her place in the accounting department, Hamann occasionally worked in the title department, where she processed titles (certificates of origin, or "CO's") and assisted title clerks in the performance of their job responsibilities.Part of these responsibilities, apparently, was the altering of titles, the forging of signatures, and the notarizing of false documents, all of which is illegal.At the behest of her superiors, Hamann joined in this unhappy activity.Soon, however, she refused to participate.She notified her superiors, among whom were Sam Sweeden(Gates's general manager) and Mike Wheeler(Gates's used car sales manager), and told them that she would no longer perform illegal acts.

Despite this notification, Hamann still was asked to participate in title alterations.Around October, 1983, she was asked to notarize a group of 28 altered CO's.She refused.During the next two years Hamann similarly was asked on an additional 10 to 20 occasions.Ten to 20 more times, she refused.Yet Hamann was not fired.She peacefully coexisted with Gates's management.

In September, 1985, Hamann was approached by Cindy McMillan, ² a Gates employee.McMillan had been asked by either Sweeden or Wheeler to obtain a title for Gates by illegally removing from the title multiple assignments.McMillan was unsure of what to do; she went to Hamann for advice.Hamann advised McMillan that "jumping title" was wrong.Further, Hamann telephoned Patti Guskowski, an employee of Downtown Gates, which is a separate but related Gates business entity.Hamann told Guskowski about the illegal methods by which Gates's title clerks obtained "clean" titles for Gates.Guskowski opined that those methods were illegal and that McMillan should not employ them to remove the assignments.Guskowski stated that she needed to speak to someone, that she would call Hamann back, and that in the interim Hamann should do nothing.After the call Hamann returned the title to McMillan, presumably with Guskowski's opinion.Hamann had no further contact with either McMillan or Guskowski.She was never informed about how the title ultimately was processed.

About a month later, on October 3, 1985, Hamann was fired.She was called into Sweeden's office and asked several questions by Sweeden, one of which was whether Hamann had telephoned Patti Guskowski at Downtown Gates.Hamann said that she had; Sweeden said that Hamann had a problem.At that, Hamann's employment ended.³

As previously mentioned, Gates has conceded Hamann's version of the facts.It has not, however, conceded the reasonable inferences that may be drawn from those facts, and therein lies this dispute.In order to make out a claim for retaliatory discharge, a plaintiff must allege and prove more than that she was fired; she must allege and prove that her firing was caused by a prohibited retaliatory motive.SeeMcClanahan, 517 N.E.2d at 393.Without the requisite causation there might be a discharge, but not an actionable discharge.Hamann argues that a reasonable inference from the above stated facts is that her firing was caused by Gates's retaliation for her refusal to illegally alter titles.Gates argues that such an inference is mere speculation and that the most a rational juror could deduce from the facts above is that Hamann was fired for telling Patti Guskowski about Gates's title activities.Upon Gates's motion for summary judgment, the court below concluded that Hamann had failed to bring forth evidence from which a rational juror reasonably could infer that Gates's motive in firing her was to retaliate for her refusal to do something illegal.Consequently, it granted summary judgment in favor of Gates.⁴

Hamann argues that the court erred.In three ways, she asserts, the evidence implies the existence of Gates's illicit motive.First, she asserts that Gates's illicit motive is shown by the mere fact that she was fired, coupled with the fact that for two years prior to the McMillan incident she had refused to alter or notarize titles illegally (or counsel others to do so).But this is not enough.In Title VIIcases, which seem to be analogous, seeIndiana Civil Rights Comm'n v. Culver Ed. Found., 535 N.E.2d 112, 115(Ind.1989);Peru Daily Tribune v. Shuler, 544 N.E.2d 560, 564(Ind.Ct.App.1989), a plaintiff must show three things to establish a case of retaliatory discharge: (1) that (among other things)she opposed an unlawful employment practice; (2) that she was the object of adverse employment action; and (3) that the adverse employment action was caused by her opposition.SeeKlein v. Trustees of Indiana University, 766 F.2d 275, 280(7th Cir.1985);Rucker v. Higher Educ. Aids Bd., 669 F.2d 1179, 1182(7th Cir.1982).The third requirement--causation--would seem to be a superfluous element if causation could be inferred from the first two.Of course, the causation element is not superfluous: it is there for a reason.Thus, causation must be proved in its own right; its existence cannot be bootstrapped from the existence of the other two elements.Before a Title VII retaliatory action claim can pass a summary judgment challenge, then, facts other than those showing opposition and discharge must be adduced.SeeKlein, supra.See alsoCollins v. Illinois, 830 F.2d 692(7th Cir.1987)(j.n.o.v.).We think the same goes for a Indiana state law retaliatory action claim.There must be facts of a "causal connection" between the refusal to act and the discharge, facts other than the refusal and the discharge themselves.But Hamann has shown us little else.Besides the fact of her refusals and her discharge, all Hamann points us to is the timing between the two.

When considered with other circumstances, the fact of "rapidity and proximity in time" between refusal and discharge sometimes can create the necessary inference of prohibited motive.See, e.g., Collins, 830 F.2d at 705.But there is no such "rapidity and proximity" in this case.Hamann refused to notarize altered titles over two years before she advised McMillan, and she continued to refuse--10 to 20 times in fact--during the two year time period before she advised McMillan.Despite these refusals, Gates took no action against Hamann during this period.To us, this indicates that Gates could care less about Hamann's ethical stance.Hamann argues otherwise, however, claiming that these "timing" facts actually support her case, that they give rise to an inference that her continued opposition wore Gates's tolerance thin.We admit that the inference is there: hypotheses are free; a thousand can arise to explain any event.But our job is to determine if the hypothesis proffered is reasonable.Hamann's certainly is not.The "timing" evidence cuts against her; it shows the opposite of what she claims.Cf.Clark v. Chrysler Corp., 673 F.2d 921, 930(7th Cir.), cert. denied, 459 U.S. 873, 103 S.Ct. 161, 74 L.Ed.2d 134(1982).Like the district court, we think that the timing of Hamann's refusals and her discharge fails to give rise to any reasonable inference that Hamann was fired because she refused to participate in the illegal alteration of titles.

Hamann asserts, secondly, that the necessary inference is raised by "the Cindy McMillan incident."The district court found from the facts that it was reasonable to infer that Hamann's discharge was caused by "her...