Heard v. Lockheed Missiles & Space Co.

• Decision Date: 03 May 1996
• Docket Number: No. H013353,H013353
• Citation: 44 Cal.App.4th 1735,52 Cal.Rptr.2d 620
• Court: California Court of Appeals Court of Appeals
• Parties: , 78 Fair Empl.Prac.Cas. (BNA) 335, 96 Cal. Daily Op. Serv. 3177, 96 Daily Journal D.A.R. 5181 Jeffrey S. HEARD, Plaintiff and Appellant, v. LOCKHEED MISSILES & SPACE CO., INC., et al., Defendants and Respondents.

Page 620

52 Cal.Rptr.2d 620

44 Cal.App.4th 1735, 78 Fair Empl.Prac.Cas. (BNA) 335,

96 Cal. Daily Op. Serv. 3177,

96 Daily Journal D.A.R. 5181

Jeffrey S. HEARD, Plaintiff and Appellant, v. LOCKHEED MISSILES & SPACE CO., INC., et al., Defendants and Respondents.

No. H013353.

Court of Appeal, Sixth District, California.

May 3, 1996.

William N. Woodson, III and Thomas E. Kotoske, Palo Alto, for Appellant.

Sheppard, Mullin, Richter & Hampton, Daniel P. Westman, Palo Alto, Anna E. Goodwin, San Francisco, Angela M. Nolan, San Jose, and Thomas A. Counts, San Francisco, for Respondents.

ELIA, Associate Justice.

Jeffrey S. Heard filed suit against Lockheed Missiles & Space Co. ("Lockheed") alleging that Lockheed discriminated against him based upon his race. Heard alleged claims for disparate treatment and retaliation.

After a jury trial, the jurors were told to respond to questions set forth in the special verdict. In response to the first special verdict question on the issue of race discrimination--"Did plaintiff prove by a preponderance of the evidence that a prima facie case of discrimination existed concerning the terms and conditions of his employment as they existed prior to December 31, 1991?"--the jurors responded "yes." In response to the second special verdict question--"Did plaintiff establish by a preponderance of the evidence that similarly situated non-African-American employees, as defined under the California Fair Employment and Housing Act, were treated differentially in the terms and conditions of their employment prior to December 31, 1991?"--the jurors answered "no." The jurors were then instructed to consider the special verdict questions regarding Heard's retaliation claim. In response to those questions, the jurors found for Lockheed.

Judgment was entered for Lockheed and Heard appeals. Among other things, Heard argues the jury was incorrectly instructed that he was required to establish as part of his prima facie case that similarly situated non-African-American employees received the employment terms and conditions that Heard sought. Heard also contends he was the prevailing party because the jurors found in the special verdict that he established a prima facie case of race discrimination.

For reasons we shall explain, we will reverse.

Factual and Procedural Background

Heard is an African-American male. He graduated from San Jose State University in 1983 with a bachelors degree in radio and television broadcasting. In 1984, Heard began working for Lockheed.

Heard worked in Lockheed's Missiles Systems Division ("MSD") Training Department making video training packages regarding the Fleet Ballistic Missile. The films were produced for both the military and Lockheed employees.

Lockheed held a "top secret" facility security clearance from the United States Department of Defense ("DOD") Defense Investigative Service. To retain that clearance, Lockheed was required to comply with the DOD Industrial Security Manual ("Manual"). The Manual required that Lockheed report to the DOD "adverse information" about employees with clearances. Adverse information included criminal activities and the illegal use of drugs. Once adverse information was submitted, the DOD conducted an investigation, and could revoke the employee's clearance.

Since 1985, Heard had a security clearance to perform his duties. Heard was required to travel to high security military bases in order to tape footage for the training films.

In 1985, Heard's superior stated, "Jeff's production skills are very good...." By 1986, Heard was producing approximately 15 video training films. By 1987, Heard was producing video films on nuclear warheads. His performance was rated "fully effective" to "highly effective."

In 1987, Heard was arrested and charged with possessing 56 grams of cocaine. Subsequently, the criminal charge related to Heard's arrest was "thrown out of court." Heard did not inform his manager, Elmer Stovall, of his arrest.

In 1988, after his arrest, Heard voluntarily entered drug rehabilitation which he successfully completed. Heard completed the program in 1989 but continued to counsel other individuals with drug problems.

From 1987 to 1990, Heard continued to work at Lockheed producing videos for the military. By 1988, Heard's performance was rated "fully effective" to "highly effective." Heard's superior stated "Another area Jeff excelled in was his performance as ethics training facilitator. His evaluations were outstanding. Appreciate Jeff's willingness and versatility. Thanks, Jeff."

In 1989, Heard received special recognition for his outstanding performance: "I would like to recognize and commend the efforts of Jeff Heard in support of the MSD Training Television Network. In the last month Jeff has demonstrated versatility, diligence and a positive attitude in adapting to the various tasks to which he has been assigned." In August 1989, the manager of Lockheed's Weapon Systems Plans and Evaluation also commended Heard's outstanding performance.

Heard's performance review for 1989 rated his performance as "highly effective" to "exceptional." In November 1989, Heard received special recognition for his outstanding performance from the Director of System Concepts and Analysis. In 1989, Heard received an award from Lockheed's Management Association for his work in the community with "at-risk" children. In March 1990, Heard received special recognition for his performance, along with the other members of his team, from the manager of the Missiles Space Division. In June 1990, the President of Lockheed Missiles System Division presented Heard with an award for outstanding performance. By June 1990, Heard's yearly performance review rated Heard's performance as "highly effective" to "exceptional."

In December 1990, the charges relating to Heard's 1987 arrest for possessing cocaine were reinstated. ¹ Heard pleaded guilty to the charges. On December 11, 1990, Heard was sentenced to one year in county jail (unsuspended), three years probation, and fined $100. The court also ordered Heard to undergo substance abuse counseling. Heard's jail sentence was stayed until February 27, 1991 and stayed again after that. On December 13, 1991, the court suspended the jail sentence.

On December 17, 1990, Heard first advised Stovall, his manager, of his conviction and sentence. Stovall, who is African-American, informed Lockheed's Government Security Department about Heard's conviction. The Government Security Department reported the conviction to the DOD as "adverse information."

Heard testified that Stovall checked with Lockheed's legal department concerning Heard's conviction. According to Heard, the legal department informed Stovall that under the circumstances there was nothing to prevent Heard from continuing his employment with Lockheed as usual.

Stovall testified that he reassigned Heard to projects which did not involve classified work or travel. Stovall decided to remove Heard from the START program, which involved a trip to the White House. With respect to removing Heard from the START Treaty trip to the White House, Heard admitted that "I think that Mr. Stovall did the right thing due to the subject at hand."

Stovall consulted "extensively" with Heard about the effect of the conviction on Heard's career. He told Heard that "in any classified program it would be very difficult for him to ... be evaluated as good a prospect as someone who had not been convicted or had a felony."

By December 1990, Stovall was no longer the manager of Heard's department.

In early 1991, Joseph Parisi became the manager of Heard's department. Parisi is Caucasian.

Heard alleged that Parisi took four discriminatory employment actions against Heard based on Heard's race: These were (1) travel restrictions; (2) Heard's performance appraisal; (3) his "stack" position; and (4) his merit wage increase.

According to Heard, Parisi re-stacked or re-ranked the department. Heard was ranked near the bottom of the stacking. Heard was therefore vulnerable to being laid off. Heard also testified that Parisi denied Heard a pay raise. The raise was given to other employees in the department. Heard testified that Parisi unnecessarily restricted Heard's ability to travel in connection with his work. Finally, Heard testified that Parisi gave Heard a false performance review.

Heard testified that he complained to Parisi. Heard told Parisi that he thought Parisi's actions were based upon Heard's race. Heard believed Parisi was racist. Heard testified that Parisi never attended the award ceremonies recognizing Heard's receipt of performance awards. Heard testified that Parisi told Heard he was lazy. According to Heard, Parisi's belief that he was lazy was based upon Heard's race.

At Parisi's first meeting with the supervisors of the department, supervisor Mel Jones, who is African-American, testified that Parisi stated that "minorities in the organization are low performers." According to Jones, this statement was dramatic. Jones also stated that he told Parisi there was absolutely no basis for such a statement. Jones said he met with Richard Cannon, who was manager of MSD human resources, to discuss Parisi's statement about minorities being low performers.

Chris Fleming, who is African-American, testified that Parisi said "the management of the organization was all screwed up." According to Fleming, Parisi was referring to Stovall, who was African-American. Fleming testified that Parisi did not attend a ceremony recognizing Fleming's receipt of a performance award. Fleming testified that Parisi attended the award ceremonies of "white" employees. Fleming stated that he felt that Parisi devalued Fleming's work. Fleming testified that Parisi referred to Stovall as "wonton," "as in ... wonton, Chinese fortune cookie." Fleming testified that he had heard Parisi tell racial jokes. There was evidence that Fleming was ranked number one in the...