Hayes v. Community General Osteopathic Hosp.

• Decision Date: 21 February 1990
• Docket Number: Civ. A. No. 1:CV-89-1600.
• Citation: 730 F. Supp. 1333
• Parties: Talmadge W. HAYES, Plaintiff, v. COMMUNITY GENERAL OSTEOPATHIC HOSPITAL, and Bert McBrayer, Defendants.
• Court: U.S. District Court — Middle District of Pennsylvania

730 F. Supp. 1333

Talmadge W. HAYES, Plaintiff, v. COMMUNITY GENERAL OSTEOPATHIC HOSPITAL, and Bert McBrayer, Defendants.

Civ. A. No. 1:CV-89-1600.

United States District Court, M.D. Pennsylvania.

February 21, 1990.

Elliot A. Strokoff, Strokoff & Cowden, P.C., Harrisburg, Pa., for plaintiff.

Vincent Candiello, Morgan, Lewis & Bockius, Harrisburg, Pa., for defendants.

MEMORANDUM

CALDWELL, District Judge.

Pursuant to Fed.R.Civ.P. 12(b)(6), defendants, Community General Osteopathic Hospital (CGOH) and Bert McBrayer, have filed a "motion for partial dismissal," seeking to dismiss count II of plaintiff's complaint.¹ Plaintiff's two count complaint alleges he was discriminatorily discharged from employment with CGOH because of race. Count I is based upon Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e, et seq., and count II on 42 U.S.C. § 1981. Defendants argue that in light of the Supreme Court's decision in Patterson v. McLean Credit Union, ___ U.S. ___, 109 S.Ct. 2363, 105 L.Ed.2d 132 (1989), plaintiff has no cause of action under section 1981 for his discriminatory discharge claim.

According to the complaint, plaintiff, Talmadge Hayes, a black male, was employed by defendant CGOH as its purchasing manager. He was the only black management employee, and had been employed by CGOH for over 19 years. Plaintiff alleges that he was discriminatorily discharged from his employment after his immediate supervisor, defendant McBrayer, accused him of misrepresenting his reasons for taking a paid personal day off from work. (complaint, ¶ 9). Plaintiff further alleges that defendant CGOH, in addition to terminating him because of his race, also on the basis of racial animus, failed to provide plaintiff with due process and an unbiased and unprejudiced hearing in accordance with the procedures set forth in the CGOH Personnel Policy and CGOH Personnel Policy Handbook (complaint ¶¶ 12, 29).²

Defendants' argue that under Patterson, plaintiff's allegations of discriminatory discharge do not state a cause of action under § 1981 since such conduct does not implicate his right to make or enforce contracts within the meaning of the statute. In Patterson, the Supreme Court clarified the scope of § 1981 in redressing racial discrimination. The section offers two protections. It protects: 1) the right to make contracts; and 2) the right to enforce contracts.³ In discussing the right to make contracts, the Court stated that this right "does not extend, as a matter of logic or semantics, to conduct by the employer after the contract relation has been established." ___ U.S. at ___, 109 S.Ct. at 2372-73, 105 L.Ed.2d at 150-51. Thus, post-formation conduct such as breach of contract, or the imposition of discriminatory working conditions, does not implicate the right to make a contract and is therefore not within the scope of the statute's first protection. See id.

Based upon the foregoing analysis, although Patterson did not specifically address the issue of whether an alleged discriminatory discharge is actionable under § 1981, courts construing Patterson have embraced an interpretation of the section which excludes discharge from its protection for the making of contracts. See, e.g., Hall v. County of Cook, 719 F.Supp. 721 (N.D.Ill.1989); James v. Dropsie College, 1989 WL 143171 (E.D.Pa.); Owens v. Foot Locker, 1989 WL 138839 (E.D.Pa.); Eklof v. Bramalea Ltd., 1989 WL 129357 (E.D. Pa.); Leong v. Hilton Hotels Corp., 1989 WL 116880 (D.Haw.1989); Copperidge v. Terminal Freight Handling Co., 1989 WL 112829 (W.D.Tenn.1989). There are cases to the contrary. Plaintiff cites Padilla v. United Airlines, 716 F.Supp. 485 (D.Colo. 1989) and Asare v. Syms, Inc., 1989 WL 113162 (E.D.N.Y.) in support of his contention that termination affects the making of a contract and is thus actionable under section 1981. We disagree with these cases. We think the better rule was stated by the court in Hall, supra, 719 F.Supp. at 723-24. We therefore reject plaintiff's contention that a racially motivated discharge is actionable under section 1981 as interfering with the right to make a contract.

Plaintiff argues that a discriminatory discharge creates "a much more dramatically new and distinct relation between the employee and the employer than does a promotion," and thus should be deemed related to the employee's ability to make or enforce an employment contract. (plaintiff's memorandum in opposition to defendants' motion for partial dismissal at p. 8). This contention is based upon language in Patterson indicating that a failure to give a promotion may be actionable under section 1981. But the Supreme Court recognized this possibility only when "the nature of the change in position was such that it involved the opportunity to enter into a new contract with the employer." ___ U.S. at ___, 109 S.Ct. at 2377, 105 L.Ed.2d at 156. Admittedly, subsequent language was more broad: "Only where the promotion rises to the level of an opportunity for a new and distinct relation between the employee and the employer is such a claim actionable under § 1981." Id. at ___, 109 S.Ct. at 2377, 105 L.Ed.2d at 156. But it was clearly tied into the need for a new contractual relationship. See Malhotra v. Cotter and Company, 885 F.2d 1305, 1311 (7th Cir.1989) ("The Court's reference to contract and its citation to Hishon v. King & Spalding, 467 U.S. 69, 81 L.Ed.2d 59 (1984) suggest that in deciding whether a promotion would create `a new and distinct relation between the employee and the employer,' the focus of inquiry should be on whether the promotion would change the terms of the contractual relationship between the employee and the employer."). A discharge does not create a new and distinct contractual relationship. To the contrary, it destroys and terminates any prior relationship. Accordingly, a discharge claim is untenable under section 1981. See also Jordan v. U.S. West Direct, 716 F.Supp. 1366 (D.Colo.1989) (wrongful demotion not actionable under § 1981); Alexander v. New York Medical College, 721 F.Supp. 587 (S.D.N.Y.1989) (demotion and then discharge not actionable under section 1981).

Plaintiff also argues that the discharge comes within the other prong of section 1981 — the right to enforce contracts. In Patterson, the Supreme Court interpreted that second prong to prohibit "efforts to impede access to the courts or obstruct nonjudicial methods of adjudicating disputes about the force of binding obligations." ___ U.S. at ___, 109 S.Ct. at 2373, 105 L.Ed.2d at 151. Plaintiff has cited one case, Booth v. Terminix International, Inc., 722 F.Supp. 675 (D.Kan.1989), which has held that a discriminatory discharge is redressable under section 1981 as part of contract enforcement. See also Birdwhistle v. Kansas Power and Light Co., 723 F.Supp. 570 (D.Kan.1989). We disagree with these cases. Discharge may be a breach of contract but it does not interfere with or obstruct an employee's access to, or use of, judicial or nonjudicial methods of adjudicating disputes. See Alexander, supra. We must also reject plaintiff's reliance on Johnson v. Railway Express Agency, 421 U.S. 454, 95 S.Ct. 1716, 44 L.Ed.2d 295 (1975) and McDonald v. Santa Fe Trail Transportation Co., 427 U.S. 273, 96 S.Ct. 2574, 49 L.Ed.2d 493 (1976). Neither dealt directly with the issues raised in the instant case. Johnson was limited only to the issue of whether a timely filed charge of employment discrimination with the Equal Employment Opportunity Commission tolls the statute of limitations for a § 1981 claim under the same facts. McDonald held that whites could sue for discrimination under section 1981. Both cases, of course, pre-date Patterson and in the aftermath of that decision allegations of racial harassment or discriminatory discharge alone are not actionable under § 1981. See Hall, supra, and other cases cited above.

We must now decide whether the remaining averments of the complaint can rescue plaintiff's section 1981 claim. Unlike most of the prior cases, plaintiff is not relying solely upon his discharge to support his claim. He also avers that, because of racial prejudice, he did not receive the unbiased hearing provided for by the CGOH Personnel Policy and its Handbook. Significantly, plaintiff alleges in this regard that "white employees are disciplined" in accordance with the policy and handbook, that these provide for progressive discipline, and list only a few dischargeable offenses which are far more serious than the charge against plaintiff. (complaint, ¶ 13) (brackets added). Further, no white employee was ever discharged for plaintiff's alleged offense. (Id., ¶ 14). The implication is that, if plaintiff had been white, these procedures would have preserved his employment, regardless of whether it was at will or not.

The defendants contend that these allegations do not avail plaintiff. They argue that the right to enforce contracts protected by section 1981 is limited to access to legal remedies such as the ability to initiate a lawsuit. Any defect in implementing the CGOH procedures did not impede plaintiff's access to the courts. Plaintiff has not even alleged that he was denied access to the grievance procedure. Further, employee handbooks are not contracts under Pennsylvania law and there is no requirement, in any event, that an employee exhaust the remedies provided in the handbook before suing for breach of an employment contract under Pennsylvania law.

Defendants' position has some support in the Patterson opinion and the case law. See Matthews v. Northern Telecom, Inc., 1989 WL 131343 at pps. 3-4 (S.D.N.Y.) (section 1981's protection of the right to enforce contracts is limited to private action causing a legal obstruction to plaintiff's case, noting the court's limitation in Patterson to the removal of legal disabilities to sue, be a party, testify or enforce a contract); Carter v. O'Hare Hotel Investors, 1989 WL 153338 at p. 6 (N.D.Ill.) (section 1981...