Kern v. Levolor Lorentzen, Inc.

• Citation: 899 F.2d 772
• Decision Date: 09 March 1990
• Docket Number: No. 87-6689,87-6689
• Parties: 115 Lab.Cas. P 56,266 Ada S. KERN, Plaintiff-Appellee, v. LEVOLOR LORENTZEN, INC., Defendant-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

Page 772

899 F.2d 772

115 Lab.Cas. P 56,266

Ada S. KERN, Plaintiff-Appellee, v. LEVOLOR LORENTZEN, INC., Defendant-Appellant.

No. 87-6689.

United States Court of Appeals Ninth Circuit.

Argued and Submitted April 7, 1989.

Decided March 9, 1990.

Robert H. Brown, Laner, Muchin, Dombrow and Becker, Chicago, Ill., for defendant-appellant.

Carrie MacMillin, Newport Beach, Cal., for plaintiff-appellee.

Appeal from the United States District Court for the Central District of California.

Before FLETCHER and KOZINSKI, Circuit Judges, and LEGGE, ^* District Judge.

FLETCHER, Circuit Judge:

Levolor Lorentzen, Inc. ("Levolor") appeals from an adverse judgment in favor of plaintiff-appellee Ada Kern. Kern obtained a general verdict against Levolor on claims of wrongful termination, breach of the implied covenant of good faith and fair dealing, and age discrimination. Kern's claims all arise under California law; jurisdiction is based on diversity. Levolor argues several grounds for reversal: (1) the district court's refusal to grant it judgment notwithstanding the verdict; (2) the district court's failure to order a new trial on the ground that the verdict and damages were against the manifest weight of the evidence; (3) judicial misconduct; (4) evidentiary error; and (5) error in the jury instructions. We find none of Levolor's arguments meritorious and affirm the judgment of the district court.

FACTS

Kern was employed by Levolor to make wands for window blinds. [R.T. 7/27 at 37]. She began her employment in 1979, and was discharged on February 4, 1985, when she was 59 years old. [R.T. 7/27 at 37, 40]. Levolor employed three wandmakers, one on each shift. [R.T. 7/28 at 35]. Kern worked the third shift. [R.T. 7/27 at 37]. All three wandmakers were over 40 years old. [R.T. 7/29 at 50]. All had received the highest possible employee rating at Levolor ("AAA"). [R.T. 7/28 at 39; S.E.R. 1]. Of the three, Kern had the least seniority. [R.T. 7/28 at 45].

In late 1984 or early 1985, because of a slowdown in orders for window blinds, Levolor decided to reduce its work force. [R.T. 7/28 at 39]. Management held meetings with employees to discuss the possibility of layoffs. [R.T. 7/28 at 41]. Levolor intended to meet with all employees who might be subject to this layoff. [Id. at 42]. However, Kern was never informed about these meetings or about the possibility of layoff. [R.T. 7/27 at 97].

Employees were rated with a "golf score" to determine who would be laid off. [R.T. 7/28 at 41]. This score was based on employee rating, production and attendance. [S.E.R. 55-66]. The employees with the highest scores in each department were to be laid off first. [S.E.R. 55; R.T. 7/28 at 45-46]. Kern was not rated. [R.T. 7/28 at 45]. Levolor contends that Kern was not given a golf score because she was the only member of her department on the third shift. [Id.] However, Levolor did rate other employees who were the only people in their department. At trial, Levolor could not explain this disparity in treatment. [Id. at 103-04]. Although Levolor purported to compare golf scores only within departments, [Id. at 47-48], it did transfer two people between job classifications during the layoff. [Id. at 48].

Levolor had an express, written policy of laying off AAA-rated employees last. [S.E.R. 32]. Three other AAA-rated employees besides Kern were laid off in February. [S.E.R. 70]. These three employees all were laid off voluntarily [Id.]; Kern, by contrast, was not given the opportunity to take voluntary layoff. [R.T. 7/27 at 97]. Although Kern had the least seniority of the three wandmakers, Levolor's own Employee Handbook stated that seniority would not be a determinative factor in layoff decisions. [S.E.R. 32]. In addition, trial exhibits indicated that layoff decisions, in fact, were made solely on the basis of the employee's grade ("AAA", "AA", etc.), production, and attendance. [S.E.R. 55-66].

On February 4, 1985, Levolor laid off several employees, including Kern. [S.E.R. 70]. As Levolor's orders again increased, it began recalling the workers. [R.T. 7/28 at 53-54]. By May 3, 1985, the plant was again operating at essentially the same capacity as before the layoffs. [R.T. 7/29 at 70]. During the summer, Levolor hired In June 1985, Kern received a letter from the Levolor profit-sharing office notifying her that she had been "terminated" as of February 4, 1985. [S.E.R. 72]. She telephoned Levolor to determine her status, and was told she was on layoff. [R.T. 7/27 at 114]. However, the plant manager never responded to her written inquiry about her job status. [Id. at 114-15].

several temporary employees to perform odd jobs, including wandmaking on third shift. [R.T. 7/28 at 59]. Levolor also advertised for unskilled workers. [S.E.R. 74-75]. However, although most or all of the other employees laid off in February were recalled by June 5, 1985, Kern was not. [R.T. 7/29 at 70; 7/28 at 110]. Before her layoff, Kern had been given a positive rating for "adaptability", [R.T. 7/27 at 59-60], and had performed various tasks besides wandmaking on an as-needed basis. [Id. at 65]. Nevertheless, Levolor did not offer to recall Kern to work in some position other than wandmaker.

Meanwhile, Kern looked for work but was unable to find any. [R.T. 6/30 at 28]. She stopped her job search when she developed a skin rash and a nervous problem. [R.T. 7/27 at 113]. In September, 1985, she moved with her husband to Ohio to live with their children. [R.T. 7/27 at 29]. On October 18, 1985, Levolor sent Kern a brief letter stating that they had a job opening to discuss with her. [S.E.R. at 79]. By this time, Kern had already filed a complaint with the EEOC. [R.T. 7/27 at 115]. Levolor admitted that it intended to employ Kern in cutting an entirely new piece, called a "vogue valance", in addition to performing her old job as wandmaker. [R.T. 7/28 at 54].

Levolor asserted that Kern was chosen for layoff because she had the least seniority and lowest production among the three wandmakers, and that the layoff was consistent with Levolor's contractual obligations to Kern. Kern asserted that Levolor had a contractual obligation to lay off AAA-rated employees last, that it failed to follow its own procedures in marking her for layoff, and that she was the victim of age discrimination.

The case was tried to a jury which found in favor of Kern and assessed damages of $237,000. The district court ordered a remittitur and entered judgment for Kern in the amount of $137,000. The district court declined to award attorney's fees. [R.T. 10/01 at 5]. The district court had jurisdiction under 28 U.S.C. Sec. 1332 (diversity); we have jurisdiction under 28 U.S.C. Sec. 1291. The Notice of Appeal was timely filed. This case primarily requires us to determine whether the evidence is sufficient to support the jury's verdict. Our review is narrow and limited.

I. JUDGMENT NOTWITHSTANDING THE VERDICT

Jury verdicts are due considerable deference. In reviewing the district court's denial of JNOV, we apply the same standard as the district court. We may reverse the district court only if we find that the evidence and its inferences, considered as a whole and viewed in the light most favorable to the nonmoving party, can support only one reasonable conclusion--that the moving party is entitled to judgment notwithstanding the adverse verdict. The verdict must be affirmed if supported by substantial evidence. William Inglis & Sons Baking Co. v. ITT Continental Baking Co., 668 F.2d 1014, 1026 (9th Cir.1982).

A. Wrongful Termination

Levolor contends that Kern failed to produce evidence that it breached an implied-in-fact employment contract. This argument has two parts: first, Levolor argues there was no contract, i.e., that Kern could be discharged at will; second, Levolor argues that even if there was a contract, it was not breached.

1. Existence of a Contract

California provides by statute that "[a]n employment, having no specified term, may be terminated at the will of either party on notice to the other." Cal.Labor Code Sec. 2922. Nevertheless, judicial decisions by California courts have established Although the evidence of an employment contract was not overwhelming, it was adequate to allow the issue to go to the jury. There was evidence that Levolor had a policy of laying off "AAA" employees last; that Kern was "AAA" rated; that Levolor had a policy of rating each employee before deciding on layoffs; and that Kern was not given a rating. Trial exhibits indicated that layoff decisions were based solely on the employee's "grade" (AAA, A, B, etc.), "average" (production) and "points" (attendance). Seniority was not a determinative factor, either in the ratings actually made or as indicated by the Employee Handbook.

                beyond cavil that an employer's course of conduct can create implied-in-fact contractual terms of employment, including a covenant not to discharge an employee except for good cause or to discharge an employee only under certain conditions.  See Pugh v. See's Candies, Inc., 116 Cal.App.3d 311, 171 Cal.Rptr. 917 (1981);  Foley v. Interactive Data Corp., 47 Cal.3d 654, 254 Cal.Rptr. 211, 222, 765 P.2d 373, 383-84 (1988).  The existence of such implied promises is a question of fact for the jury to decide.  Foley, 254 Cal.Rptr. at 223, 765 P.2d at 384-85.    In determining whether such promises exist, the jury must look to the entire relationship of the parties.  Id. at 224, 765 P.2d at 385.    Factors include, but are not limited to, the terms of the employment manual, the employer's personnel policies or practices, the longevity of plaintiff's service, acts or communications by the employer reflecting assurances of continued employment, and whether plaintiff has received consistent promotions or salary increases.  Id. at 225, 765 P.2d at 386. 1
                

The evidence in favor of Levolor does not compel upsetting the jury's verdict. The jury could have concluded from the...