Macgregor v. Mallinckrodt, Inc.

• Decision Date: 30 June 2004
• Docket Number: No. 03-3166.,03-3166.
• Citation: 373 F.3d 923
• Parties: Ann MacGREGOR, Appellee, v. MALLINCKRODT, INC., a Delaware Corporation; Tyco International, Ltd., a Bermuda Based Corporation; Jerry Mattys; and Hans Stover, Appellants.
• Court: U.S. Court of Appeals — Eighth Circuit

373 F.3d 923

Ann MacGREGOR, Appellee, v. MALLINCKRODT, INC., a Delaware Corporation; Tyco International, Ltd., a Bermuda Based Corporation; Jerry Mattys; and Hans Stover, Appellants.

No. 03-3166.

United States Court of Appeals, Eighth Circuit.

Submitted: May 10, 2004.

Filed: June 30, 2004.

COPYRIGHT MATERIAL OMITTED

David J. Duddleston, argued, Minneapolis, MN (Natalie Wyatt-Brown and Mary L. Senkeil on the brief), for appellant.

Steve G. Heikens, argued, Minneapolis, MN, for appellee.

Before MURPHY and FAGG, Circuit Judges, and GOLDBERG,¹ Judge.

GOLDBERG, Judge.

Appellants Mallinckrodt, Inc., Tyco International, Inc., Jerry Mattys, and Hans Stover (collectively "Mallinckrodt") appeal from a jury award to Appellee Ann MacGregor ("MacGregor") in a gender discrimination suit. Mallinckrodt charges as error denial of its motions for remittitur, new trial, and judgment as a matter of law by the district court.² Mallinckrodt also claims that the district court abused its discretion by taking judicial notice of the company's size. For the following reasons, we affirm.

I. Statement of Facts

Mallinckrodt, Inc. ("the company"), a producer and seller of health care products, employed MacGregor, who was the senior female in marketing and the only female among the three Business Segment Directors ("BSDs") at the Plymouth, Minnesota facility. Her compensation was significantly less than the two male BSDs, and she had fewer direct reports. The company justified the higher salary for Leon Narem, a BSD, because he produced the most revenue, and though David Baker, another BSD, accounted for the least revenue, his higher compensation was justified because he had sold his Canadian company to the company in 1995.

Jerry Mattys, MacGregor's initial supervisor, was promoted to national vice president in early 1999. Mattys reorganized his chain of command from seventeen direct reports, four of whom were female, to twelve direct reports, none of whom were female. Mattys also named Hans Stover, formerly MacGregor's peer, to succeed Mattys in his former post. At his first meeting, Stover commented that there were "too many women at the table." The remark was reported to Tina Cronin, the Director of Human Resources. Instead of reprimanding him, Cronin told Stover to be careful with such comments because they could be taken "out of context." Additionally, when a female manager proposed hiring a female candidate in her department, Stover refused, stating that "there are too many women in marketing."

Stover decided to consolidate the BSD positions into one Director of Marketing, and, according to MacGregor, held an ongoing presentation contest to determine which BSD would be promoted. Stover also allowed David Gast, who worked in sales rather than marketing and outside the Plymouth facility, to enter the contest after it had started. Although MacGregor's scores exceeded those of Narem and Gast, Stover promoted Gast based on his higher energy level and better rapport with others.

Stover then offered MacGregor a new position, Director of Market Development. This new position had no budgetary or supervisory responsibilities. MacGregor engaged in negotiations with Stover and Mattys about her continued employment. Given her success with a recent project, MacGregor requested a $12,000 per year pay increase to $105,000 per year, a $15,000 signing bonus, the title of Senior Director, and confirmation that her position would lead to advancement. Stover refused the signing bonus and offered only a $7,000 per year pay increase. He declined the higher title because he wanted his direct reports at the same level. Stover told MacGregor that his offer was the best he could do. On September 1, 1999, MacGregor left Stover a message rejecting the position as offered.

Meanwhile, MacGregor had complained to Mattys, alleging Stover had discriminated against her. Mattys alerted Cronin, who responded by interviewing MacGregor, Mattys, Stover, and various witnesses and by consulting with Mallinckrodt's in-house counsel. Cronin determined there had been no discrimination. Mallinckrodt contends that the results of this investigation were communicated to MacGregor, but MacGregor denies such a report.

On September 2, 1999, Stover sent a memo to Mallinckrodt employees stating that MacGregor was leaving the company. He offered the Director of Market Development position to Narem. Narem had been making $100,000 per year, and after Stover acquiesced to his request for his annual merit increase, Narem took the position at $104,000 per year. He remained there until the Plymouth facility closed on December 31, 2000.

On September 3, 1999, MacGregor received a letter stating October 3, 1999 as her last day; the letter offered her severance pay and notice of her rights under COBRA. MacGregor stayed until October 31, 1999 to launch a new product her team had created and developed.

On summary judgment, the district court dismissed all of MacGregor's claims against Mallinckrodt except for gender discrimination under Title VII of the Civil Rights Act of 1964 ("Title VII") and all claims against Mattys³. After a week-long trial, a jury awarded MacGregor a total of $1,000,000 in damages: $68,802 for lost wages, $102,000 for lost stock options, $1 for other damages, and $829,197 in punitive damages. Mallinckrodt's motions for judgment as a matter of law, new trial, and remittitur were denied. However, applying the statutory damages cap under the Civil Rights Act of 1991, 42 U.S.C. § 1981a(b)(3)(D), the district court reduced the punitive damages award to $300,000.

II. Discussion

A. The District Court Properly Denied Judgment as a Matter of Law on Liability

1. There Was Sufficient Evidence To Find Mallinckrodt Liable

Mallinckrodt asserts that the district court erroneously denied its motion for judgment as a matter of law on MacGregor's claim for gender discrimination. Mallinckrodt contends that MacGregor's rejection of the Director of Market Development position restricts her to a constructive discharge theory to prove adverse action.

This Court reviews the district court's denial of Mallinckrodt's motion for judgment as a matter of law de novo and in the light most favorable to the jury verdict for MacGregor. Coffman v. Tracker Marine, L.P., 141 F.3d 1241, 1245, 1247 (8th Cir.1998) (internal citations omitted). This Court will not set aside a jury verdict "unless there is a complete absence of probative facts to support the verdict." Browning v. President Riverboat Casino-Missouri, Inc., 139 F.3d 631, 634 (8th Cir.1998) (internal citation omitted).

A prima facie case of discrimination requires the employee to present evidence of an adverse employment action brought on by the employer's discriminatory motive. Kerns v. Capital Graphics, Inc., 178 F.3d 1011, 1016 (8th Cir.1999) (internal citation omitted). Whether there has been an adverse action is an issue of fact for a jury to determine. See Kim v. Nash Finch Co., 123 F.3d 1046, 1061-62 (8th Cir.1997); Davis v. City of Sioux City, 115 F.3d 1365, 1369 (8th Cir.1997).

In this case, where there is a conflict over whether MacGregor quit or was fired after having received an alternative offer of employment, there are two ways the jury could have found liability. First, the jury could have found that MacGregor was discharged and that her termination was motivated by her gender. See Manual of Model Civil Jury Instructions for the District Courts of the Eighth Circuit, § 5.01 (2001) (modified). Alternatively, the jury could have found that MacGregor resigned under circumstances amounting to constructive discharge. See Tidwell v. Meyer's Bakeries, Inc., 93 F.3d 490, 494 (8th Cir.1996). Because MacGregor did not present evidence to support a theory of constructive discharge, the second method was not available. Accordingly, the jury's finding of liability equates to a finding of adverse action with discriminatory motive.

As the district court found, MacGregor presented ample evidence of discrimination. She was passed over for a promotion which was instead given to a less qualified male employee. The alternate position offered to her, Director of Market Development, had previously been discontinued as non-feasible. Additionally, Stover's two references to "too many women" would support a reasonable inference of discriminatory motive.

2. MacGregor Was Not Required to Prove Constructive Discharge to Show Liability

A constructive discharge theory of liability allows an employee to sue for discrimination even after she has voluntarily resigned. See Tidwell, 93 F.3d at 494. A constructive discharge occurs when an employee resigns after the employer has created an intolerable working environment in a deliberate attempt to compel such a resignation. See Smith v. Goodyear Tire & Rubber Co., 895 F.2d 467, 472 (8th Cir.1990) (internal citation omitted).

However, where an employer offers to substitute a new job for one that has been eliminated, the employee's rejection of the new job does not necessarily indicate that the employee has resigned. Establishing an adverse action requires the employee to show a materially significant disadvantage including "[t]ermination, cuts in pay or benefits, and changes that affect an employee's future career prospects [as well as] circumstances amounting to a constructive discharge." Kerns, 178 F.3d at 1016 (internal citations omitted). Thus, constructive discharge is but one incident by which an employee can demonstrate an adverse action.

Mallinckrodt presented evidence that could reasonably have shown that MacGregor resigned and that there was no adverse action. The elimination of MacGregor's position may have been part of an overall streamlining of the reporting structure at the Plymouth plant. The appointment of a seemingly lesser qualified male as Director of Marketing may have been the result not of discrimination but rather of his higher energy level and better rapport with...