Hawkins v. Pepsico, Inc.

• Citation: 10 F.Supp.2d 548
• Decision Date: 06 July 1998
• Docket Number: No. 6:96CV01013.,6:96CV01013.
• Court: U.S. District Court — Middle District of North Carolina
• Parties: Lisa HAWKINS, Plaintiff, v. PEPSICO INC. d/b/a Pepsi-Cola North America, Pepsi-Cola Bottling North America and Pepsi South, Defendant.

10 F.Supp.2d 548

Lisa HAWKINS, Plaintiff, v. PEPSICO INC. d/b/a Pepsi-Cola North America, Pepsi-Cola Bottling North America and Pepsi South, Defendant.

No. 6:96CV01013.

United States District Court, M.D. North Carolina, Winston-Salem Division.

July 6, 1998.

COPYRIGHT MATERIAL OMITTED

Joyce Leigh Davis, Zoe Gabriele Mahood, Joyce L. Davis & Associates, Raleigh, NC, for Plaintiff.

Cecil W. Harrison, Jr., Laura Broughton Russell, Poyner & Spruill, L.L.P., Raleigh, NC, Charisse R. Lillie, Paula Castaldo Colton, Suzanne E. Turner, Debra E. Kohn, Ballard Spahr Andrews & Ingersoll, Philadelphia, PA, for Defendant.

MEMORANDUM OPINION

OSTEEN, District Judge.

This matter is before the court on Defendant Pepsico, Inc.'s Motion for Judgment as a Matter of Law. For the following reasons, the court will grant the Defendant's motion.

FACTS AND PROCEDURE

Plaintiff Lisa Hawkins, who is black, began working for Defendant in 1990 as Brand Manager in retail sales. In 1991, Defendant promoted Plaintiff to Franchise Manager for independently owned bottling facilities. Defendant subsequently transferred Plaintiff to the position of Administrative Manager. In June 1993, Plaintiff became a Customer Sales Manager (Tell-Sell Manager) at Defendant's newly established Customer Service Center (CSC) in Winston-Salem, North Carolina.

Plaintiff's supervisor at the CSC was Sally Price. In October 1993, Price gave Plaintiff written "developmental feedback," which reflected Price's dissatisfaction with Plaintiff's job performance. (Pl.'s Trial Ex. 66.) Plaintiff responded to Price by memorandum, stating that Plaintiff believed Price's criticism was unwarranted and that Plaintiff was experiencing racism and sexual harassment. (Pl.'s Trial Ex. 73.) In December 1993, Plaintiff sent a copy of the memorandum and developmental feedback to Price's supervisor, Brenda Barnes. (Pl.'s Trial Ex. 115.) Further, Plaintiff complained to Ron Parker and Lawrence Jackson, two black Pepsi executives. (Parker Dep. at 156-58; Jackson Dep. at 265-71.) In January 1994, Price formally rated Plaintiff's performance "Below Target," meaning Plaintiff met "some of many but not all position requirements." (Pl.'s Trial Ex. 91.) Price terminated Plaintiff's employment in March 1994. (Pl.'s Trial Ex. 100.) This lawsuit followed.

Plaintiff alleged in her Complaint that Defendant subjected her to a racially hostile work environment, fired her because she is black, and fired her in retaliation for her complaints of racial discrimination, all in violation of 42 U.S.C. § 1981 and North Carolina law. Plaintiff further alleged intentional and negligent infliction of emotional distress, in violation of North Carolina law.

Defendant moved for summary judgment on Plaintiff's hostile work environment and infliction of emotional distress claims only. As an initial matter, the court held barred by the statute of limitations any claims that arose out of Plaintiff's experience at Pepsi prior to the CSC. (Mag. Judge Recommendation, 1/29/98; Order, 3/12/98.) Then, after reviewing Price's treatment of Plaintiff at the CSC, the court granted Defendant's Motion for Summary Judgment on Plaintiff's hostile work environment and infliction of emotional distress claims. Id. Remaining for trial were Plaintiff's discriminatory and retaliatory discharge claims under § 1981 and North Carolina law.

A jury trial began on May 6, 1998. At the close of Plaintiff's evidence, Defendant moved pursuant to Rule 50 of the Federal Rules of Civil Procedure for judgment as a matter of law. Defendant argues that Plaintiff cannot prevail under § 1981 because she failed to establish that she had a contractual relationship with Defendant, and she failed to prove discriminatory and retaliatory discharge. (Def.'s Mem.Supp.Mot.J. Matter Law at 2.) Defendant further argues that Plaintiff cannot prevail under North Carolina law because she failed to prove wrongful or bad faith discharge. Id. at 2-3.

JUDGMENT AS A MATTER OF LAW

Judgment as a matter of law is appropriate when "a party has been fully heard on an issue and there is no legally sufficient evidentiary basis for a reasonable jury to find for that party on that issue." Fed.R.Civ.P. 50(a). "To defeat an employer's motion for judgment as a matter of law as to liability in a discrimination suit, the plaintiff must present substantial evidence to support as a reasonable probability, rather than as a mere possibility, that her employer discriminated against her because of a protected characteristic." DeJarnette v. Corning Inc., 133 F.3d 293, 298 (4th Cir.1998).

PLAINTIFF'S SECTION 1981 CLAIM

Defendant argues that Plaintiff cannot prevail under § 1981 because she failed to establish that her claims arose out of a contractual relationship. (Def.'s Mem.Supp.Mot.J. Matter Law at 4-5.) Defendant contends that Plaintiff was an at-will employee with no contractual rights defining the term of her employment. Id. Plaintiff counters that she can prevail under § 1981 because "[a]n at-will employment relationship is still a contractual relationship." (Pl.'s Resp.Mot.J. Matter Law at 17.)

Section 1981 states, in relevant part, "[a]ll persons within the jurisdiction of the United States shall have the same right in every State and Territory to make and enforce contracts...." 42 U.S.C. § 1981(a). "Make and enforce contracts" is defined to include "the making, performance, modification, and termination of contracts, and the enjoyment of all benefits, privileges, terms, and conditions of the contractual relationship." 42 U.S.C. § 1981(b). A plaintiff proceeding under § 1981 must prove both intentional discrimination and that the discrimination interfered with a contractual relationship. Murray v. National Broadcasting Co., 844 F.2d 988, 995 (2nd Cir.1988); Krulik v. Board of Educ. of City of N.Y., 781 F.2d 15, 23 (2nd Cir.1986). Citing Murray and Krulik, district courts within the Second Circuit have repeatedly held that a plaintiff alleging employment discrimination under § 1981 cannot succeed without establishing that the discrimination arose from a contractual relationship.

In Moscowitz v. Brown, 850 F.Supp. 1185, 1189 (S.D.N.Y.1994), the plaintiff brought pursuant to § 1981 discriminatory and retaliatory discharge claims against his former employer. The court examined the terms of the plaintiff's employment to determine whether his claims arose out of a contractual relationship. Id. at 1192. Under state law, the plaintiff's employment was terminable at will. Id. Finding no employment contract, the court held that the plaintiff failed to state a § 1981 claim:

[A]ccording to the plain language of Section 1981, plaintiff's claim would have to be based on a contractual relationship with the [employer], and there is no allegation of such a relationship.¹

Id.

In Moorer v. Grumman Aerospace Corp., 964 F.Supp. 665, 667 (E.D.N.Y.1997), the plaintiff brought pursuant to § 1981 a discriminatory employment practices claim against his employer. The employer moved for summary judgment, arguing that no underlying contract existed upon which to base the plaintiff's claim. Id. at 675. Noting that "[b]y its very terms, Section 1981 governs contractual relationships," the court dismissed the plaintiff's claim. Id. The court held that the plaintiff had failed to establish "the existence of a contractual relationship with the defendant sufficient to support a Section 1981 cause of action."² Id. at 676.

Plaintiff argues that the court should not rely on Moorer and Moscowitz because these cases wrongly relied upon Murray and Krulik, Second Circuit decisions that were overruled by the 1991 amendments to § 1981. (Pl.'s Resp.Def.'s Mot.J. Matter Law at 17.) Plaintiff contends that the 1991 amendments broadened the scope of § 1981. Id. While the court agrees that the 1991 amendments broadened the scope of § 1981, the court disagrees with Plaintiff's interpretation of the effect of the amendments.

In Patterson v. McLean Credit Union, 491 U.S. 164, 109 S.Ct. 2363, 105 L.Ed.2d 132 (1989), the Supreme Court held that § 1981 did not provide relief for "any claim based on actions which occur after the contract has been formed." Williams v. First Union Nat'l Bank of N.C., 920 F.2d 232, 234 (4th Cir.1990). The Supreme Court held that "section 1981's right to make contracts provision governs only conduct prior to the formation of the contract." Id. The 1991 amendments to § 1981 overruled Patterson. Beardsley v. Webb, 30 F.3d 524, 527 (4th Cir.1994). Congress broadened the scope of § 1981 to cover post-contract formation discrimination, including "claims of racial discrimination based upon wrongful termination." Douglas v. Evans, 916 F.Supp. 1539, 1555 (M.D.Ala.1996). What Congress did not do in 1991, however, was remove from the language of § 1981 the phrase "make and enforce contracts."

During a hearing on Defendant's Rule 50 motion, the following exchange occurred between the court and Plaintiff's counsel:

Court: Now, why does the word contract appear in 1981? Is there any significance in the fact that that appears —

Defense Counsel: I do not believe so, Your Honor. I think, inherently, all employment relationships, whatever they might be, are contractual in nature.

(Tr. of 5/18/98, at 125). The court cannot agree with Plaintiff's interpretation of the scope § 1981. To determine whether a claim falls within the scope of a statute, a court must look first to the language of the statute. Consumer Prod. Safety Comm'n v. GTE Sylvania, Inc., 447 U.S. 102, 108, 100 S.Ct. 2051, 2056, 64 L.Ed.2d 766 (1980). "[T]he starting point for interpreting a statute is the language of the statute itself." Not only does the language of § 1981(a) employ the phrase "make and enforce contracts," but the statute further defines the phrase to include "the making, performance, modification, and termination of contracts, and the enjoyment of all benefits, privileges, terms, and conditions of the contractual...