Hennessy v. Penril Datacomm Networks, Inc.

• Citation: 69 F.3d 1344
• Decision Date: 13 November 1995
• Docket Number: 94-3565 and 94-3868,Nos. 94-3475,s. 94-3475
• Parties: 69 Fair Empl.Prac.Cas. (BNA) 398, 64 USLW 2383, 43 Fed. R. Evid. Serv. 409 Patricia HENNESSY, Plaintiff-Appellee, Cross-Appellant, v. PENRIL DATACOMM NETWORKS, INCORPORATED and Richard Burns, Defendants-Appellants, Cross-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)

Page 1344

69 F.3d 1344

69 Fair Empl.Prac.Cas. (BNA) 398, 64 USLW 2383,

43 Fed. R. Evid. Serv. 409

Patricia HENNESSY, Plaintiff-Appellee, Cross-Appellant, v. PENRIL DATACOMM NETWORKS, INCORPORATED and Richard Burns Defendants-Appellants, Cross-Appellees.

Nos. 94-3475, 94-3565 and 94-3868.

United States Court of Appeals Seventh Circuit.

Argued Sept. 8, 1995.

Decided Nov. 13, 1995.

Elizabeth Hubbard (argued), John C. O'Connor, Chicago, IL, for Patricia Hennessy.

Malcolm S. Kamin, Abramson & Fox, Chicago, IL, Ginger McGaffie, Penril Datacomm Networks, Incorporated, Vienna, VA, Ginger McGuffie (argued), McGuffie & Handal, Vienna, VA, for Penril Datacomm Networks, Incorporated.

Gwendolyn Young Reams, John P. Rowe, Carolyn L. Wheeler, Gail S. Coleman, Equal Employment Opportunity Commission, Office of General Counsel, Washington, DC, for Equal Employment Opportunity Commission, Amicus Curiae.

Malcolm S. Kamin, Abramson & Fox, Chicago, IL, for Richard Burns in No. 94-3565.

Before BAUER, COFFEY, and EVANS, Circuit Judges.

TERENCE T. EVANS, Circuit Judge.

A hotly contested trial, especially one raising explosive issues like claims of discrimination, often produces significant factual evidence capable of being interpreted in more than one way. Patricia Hennessy's suit against Penril Datacomm Networks, Inc. was such a case. A jury heard the case for ten days in 1994. Penril, which generally lost the battle below, is now here looking for relief from the judgment.

Appellate courts, viewing the sort of claims Penril is now making, must be mindful of their limited role in reviewing factual determinations made by juries and trial judges. And the discharge of those duties is not aided by the kind of partisan statement of facts laid out by Penril in its brief. After reading Penril's version of the facts one has to wonder not only how Hennessy ever got the jury to see the case her way but how she avoided getting tagged with sanctions under Rule 11 as well. Penril's statement of facts, it seems to us, is more like a reiteration of its closing argument to the jury. The jury rejected Penril's view of the facts, and so do we. Instead, we view all facts in the light most favorable to Ms. Hennessy.

Penril sells computer hardware, such as modems and networking equipment for computer communications. The company, headquartered in Gaithersburg, Maryland, maintains a staff of sales and support personnel throughout the United States. Ms. Hennessy, who holds a Masters Degree in Communications from Northwestern University, was hired by Penril in 1988 to do sales work out of its office in Rockford, Illinois. The employment relationship was to last a little less than four years.

Richard Burns supervised Hennessy during her first three months with Penril. She then was supervised, for the next three years, by Terry McFadden. While under McFadden, however, Hennessy continued to see Burns every now and then, although he worked in a different part of the country. Burns returned as Hennessy's supervisor in July of 1991 and remained in that spot until Hennessy was terminated in April of 1992.

Two incidents involving Burns when he was not Hennessy's supervisor are prominently mentioned in the evidence. In the summer of 1990, a number of Penril employees were in Portland, Oregon, on business. One evening, Burns took McFadden, Hennessy, another sales rep, Judy Marshall, and two other men (whether or not they also worked for Penril is unclear) to a striptease bar on the outskirts of town. During a "performance," Burns and other male customers began yelling and cheering for Hennessy and Marshall, the only women in the bar who were not entertainers, to get up on stage and perform with the bar's dancers. They didn't. As the group drove home, Burns mentioned how other women's breasts compared with the breasts of the dancers. Hennessy says she was uncomfortable during the evening and got the impression that Burns viewed her and other women as sex objects.

The second incident occurred in connection with a Penril Christmas party in December of 1990 at the Stouffer hotel in Seattle, Washington. After the party broke up, Burns invited Hennessy to join him for a drink in the hotel's cocktail lounge. After some chitchat, Burns engaged Hennessy in a conversation and confessed to her that he was no longer sexually attracted to his wife, but that he had always found Hennessy, who he said was intelligent, to be very sexually attractive. He said he was sexually attracted to her, but Hennessy did not take the bait. She said her marriage was happy, and the topic was abandoned. The conversation, Hennessy said, left her feeling "very uncomfortable."

Hennessy became pregnant in March of 1991, but she kept the news to herself because she thought it might make her "life very difficult at Penril." Her feelings were arguably justified because the philosophy at Penril, according to some of the testimony at trial, was that sales reps were expected to "get up and put on their suits and tie and go to the office."

In July of 1991, Burns replaced McFadden as Hennessy's supervisor. As a farewell note to Hennessy, McFadden sent her a letter on July 16, 1991, which said:

Dear Pat:

I want to take a moment to express my appreciation for your efforts on behalf of Penril's Western Area, over the last three years. You have been an important part of Penril's remarkable recovery in an unforgiving market.

Thanks to District Sales Managers like you, Penril Datacomm Networks will again set new company records in sales and profitability.

I have enjoyed working with you and hope that the new changes will offer you new dynamic opportunities.

Again Pat, thanks for the past three years and good luck in the coming fiscal year.

In August of 1991, Burns saw Hennessy, who by this time was obviously pregnant, at a sales meeting at Penril's headquarters in Maryland. He said he was surprised to see her pregnant because he always thought she was a "career woman." According to other testimony during the trial, Dave Johnson, Penril's president, stated around this time that he does not like to hire women in the field because they get pregnant.

After the August sales meeting in Maryland, Burns asked Hennessy to come to Dallas to help him train two new male sales reps. Hennessy went to Dallas, but when the work was done she was not invited to accompany Burns and the two men on Burns' sailboat because he did not think it was a place for pregnant women to be.

Hennessy gave birth on November 6, 1991, and took maternity leave from that day until January 2, 1992. Prior to taking the leave, Hennessy's sales numbers generally ranked her second among Burns' four sales reps. When Hennessy returned to work, Burns told her she was on probation. She says she repeatedly tried, without success, to discuss her probationary status with Burns. Meanwhile, Burns was writing memoranda critical of Hennessy's performance to his supervisor, to Penril's human resources department, and to Hennessy's personnel file. Hennessy was not told that the negative reports were filed.

Penril's lease for its Rockford office, the one where Hennessy worked, expired at the end of February 1992. Burns decided not to renew the lease but never told Hennessy of the decision. Then on February 25, 1992, Hennessy learned she had three days to vacate her office. On this short notice, Hennessy was forced to move her office files to the basement of her home, where she continued her duties for Penril without the aid of telephone answering, computer, secretarial, or photocopying services. She was, at that time, the only Penril sales rep, out of about 35, without an outside-the-home office.

Finally, in March 1992, Burns decided to terminate Hennessy. The decision was approved by Sean Belanger, his supervisor, and by Mr. Johnson. Hennessy, unaware that her fate had been decided, wrote to Burns on March 27, 1992, voicing concerns about her probationary status and what she believed to be sex discrimination. Eleven days later, on April 7, 1992, Burns met with Hennessy at a hotel in Rosemont, Illinois, and fired her. Burns subsequently hired a male sales rep to replace Hennessy and moved him into an office in Oak Brook, Illinois.

Hennessy's suit against Penril and Burns raised allegations of, among other things, sex and/or pregnancy discrimination in violation of Title VII of the Civil Rights Act of 1964, as amended by the Civil Rights Act of 1991. 42 U.S.C. Sec. 2000e et seq. The jury returned a verdict finding that as to both Penril and Burns, sex was a motivating factor in the decision to terminate Hennessy. The jury awarded Hennessy no compensatory damages, but it found that both Penril and Burns acted with malice or reckless indifference to her rights. Punitive damages were assessed against Penril at $300,000 and against Burns at $50,000.

In his decision on motions after the verdict, Judge Alesia awarded Hennessy back pay and ordered Penril to reinstate her as an employee. Burns, because the court concluded that Title VII does not cover supervisor liability, was dismissed from the case. The court also reduced the punitive damage assessment against Penril to $100,000 and granted Ms. Hennessy's petition for attorney's fees and costs.

On appeal, Penril asserts that it was improperly subjected to retroactively increased liability for past conduct; that the district court erred in refusing to vacate the punitive damage award; that without a jury finding of "but for" causation, Hennessy did not qualify for damages or other relief under Title VII; and that the district court erred by awarding unreasonable and excessive attorney's fees. In her cross-appeal, Hennessy maintains that the district court erred by so greatly reducing the punitive damage award against Penril. ¹

Penril's first claim is that it was improperly subjected to retroactively increased liability for past conduct because the trial court allowed Hennessy to present evidence...