Jackson v. GTE Directories Service Corp.

• Decision Date: 02 April 1990
• Docket Number: Civ. A. No. CA3-87-2705-D.
• Parties: Kenneth D. JACKSON, Stella Jo Soderblom, and Lannie D. Moore, Plaintiffs, v. GTE DIRECTORIES SERVICE CORPORATION, Defendant.
• Court: U.S. District Court — Northern District of Texas

734 F. Supp. 258

Kenneth D. JACKSON, Stella Jo Soderblom, and Lannie D. Moore, Plaintiffs, v. GTE DIRECTORIES SERVICE CORPORATION, Defendant.

Civ. A. No. CA3-87-2705-D.

United States District Court, N.D. Texas. Dallas Division.

April 2, 1990.

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William C. Isbell of Wilson, Williams & Molberg, Dallas, Tex., for plaintiffs.

Richard M. Kobdish and Allan G. King of Johnson & Gibbs, Dallas, Tex., for defendant.

FITZWATER, District Judge:

The instant motion for partial summary judgment presents questions that pertain to the law of employment discrimination, including whether retaliatory discharge and discriminatory demotion claims are actionable under the Supreme Court's interpretation of 42 U.S.C. § 1981 in Patterson v. McClean Credit Union, ___ U.S. ___, 109 S.Ct. 2363, 105 L.Ed.2d 132 (1989), and whether Patterson should be applied retroactively in this action.

I

Kenneth D. Jackson ("Jackson"), Stella Jo Soderblom ("Soderblom"), and Lannie D. Moore ("Moore") bring this suit against GTE Directories Service Corporation ("GTE Service"),¹ alleging claims pursuant to 42 U.S.C. § 1981, Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., and the Age Discrimination in Employment Act of 1967 ("ADEA"), 29 U.S.C. § 621 et seq. Jackson, an African-American male, has been employed by GTE Service since 1980.² In December 1980 Jackson was promoted from his position as a collector in the Commercial Collections Department to the position of Collections Supervisor. In 1983 Jackson's job title was changed to Credit Supervisor. As Credit Supervisor, Jackson had the managerial duty of supervising approximately eight employees.

As of January 1, 1984 Moore, an African-American male, was employed by GTE Service as Customer Credit Manager in the collections department. Moore was Jackson's immediate supervisor. In July 1985 Moore became head of GTE Service's Commercial Credit Group, a unit specializing in commercial collections from third parties. Pierre St. Germain ("St. Germain") succeeded Moore as manager of the Commercial Collections Department and thereby became Jackson's supervisor. In November 1985 St. Germain completed a performance plan and appraisal of Jackson, rating Jackson's performance as a "5", the lowest rating on a five-point scale. Shortly thereafter, Jackson was stripped of his managerial responsibilities and reassigned to the Commercial Credit Group as a collector, where he once again reported directly to Moore.

Unsatisfied with the November 1985 appraisal,³ Jackson requested that Moore conduct an independent evaluation. Moore did so in December 1985, assigning Jackson a rating of "4" on the five-point scale. In October 1986 Moore conducted an additional performance appraisal of Jackson. Moore initially gave Jackson a rating of "4", but changed the rating to a "5" at the direction of Kenneth Long ("Long"), Moore's supervisor. Jackson refused to sign the October 1986 performance appraisal. Moore informed Long of Jackson's refusal to sign, and was told to terminate Jackson if he persisted in his refusal. Moore subsequently determined that an employee could not be discharged for failing to sign a performance appraisal, and so informed Long. Long terminated Moore the same day. Following Moore's firing, Jackson was transferred from his position at the Commercial Credit Group to the position of collector in recovery operations of Commercial Collections Department.

Soderblom, a caucasian female, replaced Moore as manager of the Commercial Credit Group in December 1986. She avers that Long had initially contacted her regarding Moore's position in September 1986. Long allegedly made numerous age and race-related comments to Soderblom about Moore and Jackson. Soderblom initially informed Long that she did not want Moore's position. In October 1986 Long asked Soderblom to review Moore's performance appraisal of Jackson, allegedly telling her to "get the goods" on Jackson. According to Soderblom, Long threatened to discipline her if she did not uncover information that would allow Long to "get rid of" Jackson. In November 1986 Soderblom was reprimanded by Long for not completing her "audit" of Jackson. Soderblom was terminated by Long on February 12, 1987.⁴ Jackson and Moore filed claims with the Equal Employment Opportunity Commission ("EEOC") in November 1986. Soderblom filed her EEOC claim in May 1987. This action followed.

Jackson contends he was discriminated against on the basis of race with respect to his sub-par performance appraisals and subsequent demotion in November 1985 and October 1986. Jackson asserts claims under § 1981 and Title VII. Moore contends he was discriminated against on the basis of race in connection with his October 1986 discharge. Specifically, Moore asserts he was terminated in retaliation for refusing to violate Jackson's rights under § 1981. Moore asserts claims under § 1981 and Title VII. Soderblom contends she was discriminated against on the basis of race, sex, and age. She alleges there exists direct evidence of age discrimination and that she was discharged at least in part in retaliation for refusing to violate Jackson's rights under § 1981. Soderblom asserts claims under § 1981, Title VII, and the ADEA.

GTE Service now moves for partial summary judgment, contending plaintiffs' claims allege only post-formation conduct and are therefore not actionable under § 1981 pursuant to the Supreme Court's recent Patterson decision. GTE Service further contends Jackson's Title VII claim should be dismissed because Jackson has no evidence to rebut the legitimate, nondiscriminatory reasons GTE Service offers for Jackson's demotion, and avers Soderblom's ADEA claim fails because she cannot make out a prima facie case of age discrimination. Plaintiffs respond that Patterson should not be applied retroactively, and otherwise argue that summary judgment is not appropriate.

II

A

The court turns first to the question whether § 1981⁵ is available to remedy post-formation conduct.

In Patterson plaintiff filed suit in federal court alleging her employer had violated § 1981 by harassing her, failing to promote her, and ultimately discharging her because of her race. 109 S.Ct. at 2369. The district court determined that a claim for racial harassment is not actionable under § 1981 and thus withheld that portion of the case from the jury. The jury found in favor of the employer on both the failure to promote and discharge claims. On appeal the Fourth Circuit affirmed the district court's holding that a claim of racial harassment in employment is not actionable under § 1981.⁶ The Supreme Court granted certiorari to consider the question. Id.

The Court carefully examined § 1981 and concluded that the statute by its plain terms protects two rights: (1) the right to make contracts; and (2) the right to enforce contracts. Id. at 2372. The right to make contracts "extends only to the formation of a contract, but not to problems that may arise later from the conditions of continuing employment." Id. Thus the right protected by § 1981 "to make contracts" prohibits the race-based refusal to enter into a contract with someone, as well as a racially discriminatory contract offer, but does not extend to prohibit conduct by an employer after the contract relation has been established. Id. at 2372, 2373. The Court recognized that such "postformation conduct does not involve the right to make a contract, but rather implicates the performance of established contractual obligations and the conditions of continuing employment, matters more naturally governed by state contract law and Title VII." Id. at 2373.

As to the "right to enforce" contracts, the Court determined that this right "embraces protection of a legal process, and of a right of access to a legal process, that will address and resolve contract-law claims without regard to race." Id. Hence, the right to enforce contracts protected by § 1981 prohibits discrimination that prevents the legal access necessary to enforce contract rights, and additionally prohibits private efforts to impede access to the courts. This protection does not "extend beyond conduct by an employer which impairs an employee's ability to enforce through legal process his or her established contract rights." Id.

Applying these principles to the case before it, the Court held that the employee's racial harassment claims were not actionable under § 1981, but instead must be brought pursuant to Title VII. Id. at 2373, 2374. Recognizing the overlap between Title VII and § 1981, the Court declined to "twist the interpretation of § 1981" to cover conduct "forbidden by a clearly applicable law Title VII." Thus, the Court adopted a construction of § 1981 that preserves the "detailed and well-crafted procedures for conciliation and resolution of Title VII claims," without sacrifice of "any significant coverage of civil rights laws." Id. at 2374, 2375.

GTE Service contends plaintiffs' § 1981 claims all rest on post-formation conduct and thus do not survive Patterson. Plaintiffs respond that Patterson should not be applied retroactively and that Patterson does not bar their demotion and retaliatory discharge claims regardless. The court considers each of these contentions in turn.

Several courts have considered whether Patterson should be applied retroactively to cases pending before them and a substantial majority have concluded that it should.⁷ The Fifth Circuit recently applied Patterson retroactively in Carroll v. General Accident Ins. Co. of Am., 891 F.2d 1174, 1175-77 (5th Cir.1990). The court now turns to the facts of the instant case to determine whether Patterson should be applied retroactively here.

The general rule is that a court will apply an intervening decision to all cases not final on the day the intervening decision is rendered. 1B J. Moore, Moore's Federal Practice, ¶ 0.402 at 82 (1988); see Carroll, ...