Hernandez v. Exxon Corp.
| Decision Date | 24 October 1996 |
| Docket Number | Civil Action No. H-94-cv-4418. |
| Citation | 943 F.Supp. 740 |
| Parties | Rafael G. HERNANDEZ, Plaintiff, v. EXXON CORPORATION, Defendant. |
| Court | U.S. District Court — Southern District of Texas |
Mark La Spina, Able & Monroe, Houston, TX, for Plaintiff.
Anthony P. Rosenstein, Baker & Botts, Houston, TX, for Defendant.
Pending before the court is Exxon Corporation's ("Exxon") Motion for Summary Judgment (# 35). Exxon seeks summary judgment on Rafael G. Hernandez's ("Hernandez") claims of racial discrimination under Title VII of the Civil Rights Act of 1964 ("Title VII") and 42 U.S.C. § 1981 as well as on Hernandez's breach of contract claim. Having reviewed the motion, the submissions of the parties, the pleadings, and the applicable law, this court is of the opinion that Exxon's motion for summary judgment should be granted in part and denied in part.
In 1977, Exxon hired Hernandez, an Hispanic-American, as an employee in its Marketing Department in Houston, Texas. Hernandez's sixteen and one-half year tenure at Exxon was marked by "frequent promotions and outstanding evaluations," and Hernandez was normally ranked higher than his Anglo-American peers in terms of performance. During the last four years of his employment, he was ranked within the top quarter of his peer group. Hernandez was also competitively ranked within the top quarter of his peer group when he was terminated in 1994.
By 1991 — the time of the conduct cited as the grounds for his dismissal — Hernandez had risen to the position of district manager, with oversight responsibility for Exxon's company-owned retail stores ("CORS") for the State of Florida. At that point, he had attained job classification level ("CL") 28. When he was terminated in 1994, he had been further promoted to a staff manager position with a job classification of CL 29. He was then earning $125,000.00 per year, and, according to Exxon, was scheduled to receive another promotion to an "executive level" (CL 30) position in August 1995.
While serving as district manager in 1991, Hernandez had supervisory responsibility over a number of territory managers, who were responsible for stores in "defined territories throughout the state." These territory managers, in turn, had supervisory responsibility over store managers who were in charge of individual stores. Other staff persons reported either to the territory managers or to the district manager. Hernandez reported to the Southern Region Manager, whose oversight area encompassed several states, including Florida.
In 1993, Exxon "discovered that it had been the victim of a major defalcation in the Tampa area." Tom Martino ("Martino"), who was hired by Hernandez, had created a fictitious "vendor" and had "diverted payments to this fictitious entity, and converted them to his own use." Martino was ultimately convicted and sentenced to prison for his conduct. As a result of this defalcation, Exxon launched an extensive audit investigation of the store managers, territory managers, and staff in Tampa, as well as others in management. The investigation revealed "numerous lapses in financial and business controls." Ultimately, Exxon discharged twenty-two individuals. Hernandez was terminated in February 1994. According to Exxon, everyone who was discharged, with the exception of Hernandez, was white. Hernandez maintains that "Exxon did not terminate similarly situated individuals who permitted an alleged conflict of interest, made the basis of Plaintiff's termination, and who were directly responsible for the major breakdown of business controls in Tampa, Florida." Additionally, Hernandez asserts:
Exxon needed to ensure that an upper level manager was held accountable for the embarrassing economic and administrative breakdowns which occurred. Management chose to terminate Hernandez, the hispanic, almost three years after Hernandez had transferred to Houston. In doing so, they protected their white cronies whose conduct was far more culpable than Hernandez.
According to Exxon, the audit established that, in April 1992, Hernandez had approved an Employment Data Notice ("EDN") promoting Martino to store manager of a CORS location, thereby "establishing a direct reporting relationship to Gasper Martino, his father." Gasper Martino ("Gasper") was a territory manager with responsibility for a number of stores, including, according to Exxon, Store # 49101, where Martino was manager. Exxon asserts that this situation violated the company's conflict of interest policy. Exxon maintains that it has a strong policy against conflicts of interest and offers an excerpt from its policy manual in support of its position:
An employee may not approve or administratively control contracts or other business arrangements between the company and a member of the employee's immediate family ... [A]pproval ... of such contract should be referred to higher management. Full information concerning these relationships should be furnished to the manager of the appropriate Headquarters Department.
The policy manual also states:
C. Employment of relatives of Company employees: Relatives of Company employees may be employed on a nonpreferential basis; however, an employee normally should not be employed by or assigned to work under the direct supervision of a relative.
Hernandez testified at deposition that he understands the policy's prohibition on relatives supervising their kin. According to Exxon, the conflict of interest policy applied to "Hernandez's situation because managers like him are expected to implement the COI policy." Exxon underscores the gravity with which the company views conflicts of interest by proffering that Exxon employees are asked each year to "sign an affirmation that they have not violated it." Hernandez confirmed that he had signed such statements. According to John Killian, Senior Human Resources Manager for the "marketing function," violations of the conflict of interest policy normally result in termination of employment. Exxon cites Hernandez's approval of the conflict of interest involved in the Martino situation as one reason for his termination.
Exxon further asserts that Hernandez's failure to cooperate and his evasiveness during the audit investigation also led to his termination. Specifically, when the topic of Martino arose, Hernandez, normally "articulate and incisive," became, according to the auditors, "defensive, evasive, and uncooperative." As one auditor, Wayne Wilkerson ("Wilkerson"), observed, Additionally, Wilkerson testified that Hernandez's recounting of the Martinos' work assignments "did not seem consistent with the facts."
The auditors conducted a second meeting with Hernandez in January 1994. By that time, the auditors had noted that it "appeared" that Hernandez had violated the conflict of interest policy. According to Wilkerson, in spite of "specific evidence" to the contrary, Hernandez continued to maintain that Martino had never reported to his father and that Martino had never been a store manager in Gasper's territory. After the auditors produced a document ostensibly reflecting Hernandez's approval of the reporting relationship among the Martinos, Hernandez acknowledged that the signature on the document was his. He now disputes the authenticity of the document as well as the signature appearing on it.
At the close of the second meeting, Wilkerson proposed that Hernandez draft a memorandum to him "setting forth Hernandez's position as to what had occurred in the Tampa area," taking into account the representations that he would like the auditors to make to management, and taking a few days to "consider the facts and his best recollection." In Hernandez's resulting memorandum, he maintained that Martino had never reported to his father; rather, Martino had been a CAAP representative, involved in introducing retail automation procedures to the CORS locations, reporting directly to Hernandez, not a store manager reporting to a territory manager.
The marketing management group established a standing committee to make disciplinary decisions stemming from the investigatory audit. According to Exxon, the auditors, while apprising management of their findings, played no role in the disciplinary actions imposed. The committee concluded:
1. Hernandez had given information to the auditors (both verbally and later confirmed in writing) which turned out to be false;
2. Hernandez had approved a conflict of interest, i.e., a son working for his father; and
3. Hernandez had been evasive and uncooperative with the auditors.
Gordon Thomson ("Thomson"), Vice-President of Marketing for Exxon, testified at deposition that Hernandez's being "uncooperative and nonforthcoming" during the investigatory audit was a "matter that concerned [Thomson] greatly and certainly was one piece of information which weighed heavily in [his] mind in this termination." According to Thomson, being uncooperative with the auditors is tantamount to "unacceptable performance," and, in light of this, Thomson had no choice but to terminate Hernandez. While Thomson ultimately made the decision, the other members of the committee testified that there was a consensus among them that Hernandez should be terminated.
Bill Cash ("Cash"), Hernandez's direct supervisor, who is African-American, met with Hernandez in February 1994 to inform him that he was going to be terminated. Cash had no role in the investigation, and, therefore, had no real background in the events that led up to Hernandez's discharge. Cash wrote a memorandum noting that Hernandez had acknowledged making an error in judgment, but nevertheless...
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