McCarthy v. Kemper Life Ins. Companies

• Decision Date: 06 February 1991
• Docket Number: No. 90-1082,90-1082
• Citation: 924 F.2d 683
• Parties: 55 Fair Empl.Prac.Cas. 115, 55 Empl. Prac. Dec. P 40,559 Dion McCARTHY, Plaintiff-Appellant, v. KEMPER LIFE INSURANCE COMPANIES, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 683

924 F.2d 683

55 Fair Empl.Prac.Cas. 115,

55 Empl. Prac. Dec. P 40,559

Dion McCARTHY, Plaintiff-Appellant, v. KEMPER LIFE INSURANCE COMPANIES, Defendant-Appellee.

No. 90-1082.

United States Court of Appeals Seventh Circuit.

Argued Nov. 1, 1990.

Decided Feb. 6, 1991.

Donald G. Weiland, Decker & Associates, Chicago, Ill., for plaintiff-appellant.

Paul R. Garry, Gail A. Chaney, and Gwen V. Carroll, Katten, Muchin & Zavis, Chicago, Ill., for defendant-appellee.

Before CUMMINGS, FLAUM and RIPPLE, Circuit Judges.

CUMMINGS, Circuit Judge.

In June 1987 plaintiff Dion McCarthy filed a four-count complaint against defendant Kemper Life Insurance Companies alleging that he was discharged in violation of the Civil Rights Act of 1866 (42 U.S.C. Sec. 1981) and Title VII of the Civil Rights Act of 1964 (42 U.S.C. Sec. 2000e et seq.), and in breach of a settlement contract. Plaintiff appeals from the district court's summary judgment in favor of defendant as to Counts I, II, and IV of his complaint. 735 F.Supp. 251. He does not allege error in the district court's earlier dismissal of Count III which had alleged that his termination constituted a retaliatory discharge in contravention of Illinois public policy.

In July of 1981, Kemper hired McCarthy, a black male, as a trainee for the position of "Regional Director of Agency" (RDA). In December of 1983 McCarthy was promoted to that position. As an RDA, McCarthy served as liaison between Kemper and independent insurance agents who sold Kemper products. Every two weeks RDAs must travel to their assigned territories to recruit new agents, meet with current agents and terminate non-productive agents. McCarthy's territory consisted of Virginia, Pennsylvania, Maryland, the District of Columbia and West Virginia.

In April 1985, McCarthy filed a charge of discrimination against Kemper with the Equal Employment Opportunity Commission (EEOC) claiming inter alia that Kemper was paying him less than white RDAs. Without admitting liability, Kemper settled the EEOC charge in July 1985 by compensating McCarthy for the alleged disparity and raising his annual salary to $31,000.

After the EEOC settlement, McCarthy was assigned to work under supervisor Larry Luett. Luett first reported that McCarthy was not performing to his fullest capability, but later he believed that McCarthy was improving.

The parties predictably dispute the events preceding McCarthy's discharge in January 1986. Kemper claims that it discharged McCarthy solely because it found that McCarthy submitted numerous fraudulent expense reports in 1985. Kemper discovered the expense account fraud after McCarthy made a trip to Richmond, Virginia, in December 1985. McCarthy had wanted to make a side trip from Richmond to Greensboro. He intended to sell Kemper insurance products to a church group there. Luett advised McCarthy before his trip not to go to Greensboro unless he kept his Richmond appointments. McCarthy did not keep any of his three Richmond appointments but did proceed to Greensboro. After this trip, McCarthy billed Kemper for expenses of his Greensboro visit, though he had been warned that he would bear the expenses of any detour from Richmond. The following week a Richmond agent phoned Luett to ask about McCarthy's failure to show up for their scheduled meeting. Luett phoned other Richmond agents and found that McCarthy had missed all three of his appointments on December 13th and four or five other appointments that week. He reviewed McCarthy's expense records for the Richmond trip and submitted those records to Vince Inserra, Kemper's Director of Internal Security, for further investigation. Luett and Inserra discovered that McCarthy had charged to Kemper his Richmond to Greensboro airfare, a rental car in Greensboro and a dinner in Greensboro. On December 20, 1985, Kemper suspended McCarthy with pay pending further investigation.

Luett asked Inserra to review McCarthy's expense account for the entire year of 1985 to see if other improprieties existed. Inserra reported in the first week of January 1986 that McCarthy had falsified many expense reports in the past. Among other things, McCarthy had rented cars for entire weekends without any business purpose and had submitted inflated hotel bills. Jim Bickler, Kemper Vice-President of Sales and Marketing, terminated McCarthy on January 7, 1986.

McCarthy, without denying that he defrauded Kemper on the numerous occasions identified in Inserra's final report, argues that he was fired because of his race. McCarthy testified at his deposition that he was the target of racial and ethnic jokes and remarks at Kemper. McCarthy believes that Kemper selectively investigated his expense account records and that Kemper fired him in retaliation for the favorable settlement he received in 1985 as a result of his EEOC complaint.

In view of McCarthy's expense fraud, the district court held as to Count I that his Title VII claims were not acceptable, as to Count II Kemper's decision to terminate him was for cause and not retaliatory under Section 1981, and as to Count IV the agreement settling his EEOC charge was not violated since he was discharged for a legitimate nondiscriminatory reason. Consequently summary judgment was entered for Kemper. We affirm.

Title VII claim

The gravamen of Count I of the complaint is that plaintiff was discharged in violation of 42 U.S.C. Sec. 2000e(2) of Title VII of the Civil Rights Act of 1964 because he was black. Plaintiff has disavowed the indirect method of proof of race discrimination sanctioned by McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973) (see Br. 19, 26), and instead relies on direct evidence that his discharge was caused by racial discrimination (Br. 19, 20, 25, 26, 29, 30). In a direct evidence case, plaintiff initially must prove "through direct evidence that the employment decision at issue was based upon an impermissible factor." Randle v. LaSalle Telecommunications, Inc., 876 F.2d 563, 568 (7th Cir.1989). Once the prima facie case has been made, "the defendant must respond by proving by a preponderance of the evidence that it would have made the same employment decision even if it had not taken the impermissible factor into account." Id. at 569. ¹

Plaintiff failed to establish a prima facie case of discrimination. McCarthy relies on stereotyped anti-black remarks made by fellow employees to show racial animus. However, as explained in the plurality opinion in Price Waterhouse v. Hopkins, 490 U.S. 228, 109 S.Ct. 1775, 1791, 104 L.Ed.2d 268 (1989):

[r]emarks at work that are based on sex [here race] stereotypes do not inevitably prove that gender played a part in a particular employment decision. The plaintiff must show that the employer actually relied on her gender [here race] in making its decision.

Justice O'Connor's concurring opinion expanded on this Hopkins theme by stating:

Stray remarks in the work place ... cannot justify requiring the employer to prove that its ... decisions were based on legitimate criteria. Nor can statements by non-decision makers or statements by decision makers unrelated to the decisional process itself suffice to satisfy the plaintiff's burden in this regard.

109 S.Ct. at 1804; see also Smith v. Firestone Tire and Rubber Co., 875 F.2d 1325, 1330 (7th Cir.1989). Unless the remarks upon which plaintiff relies were related to the employment decision in question, they cannot be evidence of a discriminatory discharge. ² 2]

The bulk of the remarks McCarthy recalls are of marginal relevance to a Title VII inquiry because they were not made by decision makers. La Montagne v. American Convenience Products, Inc., 750 F.2d 1405, 1412 (7th Cir.1984). For example, one of McCarthy's co-workers prepared a "satire" announcement about McCarthy's promotion to RDA. In this announcement, which the writer circulated to other RDAs, McCarthy was the target of several racial and ethnic slurs. While racial slurs are always deplorable, the article ³ is not evidence of a discriminatory employment decision. No Kemper decision maker created the announcement. Also, the incident preceded McCarthy's firing by two years.

McCarthy noted in his affidavit opposing summary judgment some possibly racist remarks that he alleges were made by superiors involved in his firing. Plaintiff relies heavily on comments supposedly made by Jim Bickler, the Kemper vice-president who fired McCarthy, and Larry Luett, McCarthy's immediate supervisor at the time of McCarthy's discharge. McCarthy claims that Bickler told him, "Your days are numbered here," and that Luett said on a separate occasion, "You piss some of the boys upstairs off." Even if these comments were made, both were unrelated to McCarthy's firing. They came on the heels of the EEOC settlement and referred to the surprise of some Kemper officers that McCarthy had obtained a favorable settlement.

As the district judge pointed out, McCarthy's claims with respect to the Luett and Bickler statements were largely unsupported allegations. At his deposition, McCarthy conceded that he himself made the statement "I feel like my days are numbered here" to Larry Luett. R. Item 57, Exh. 8 at 106. When asked if Bickler had made any comments to him, McCarthy replied that he could not remember any. R. Item 65 at 5. A party opposing summary judgment cannot rest on the pleadings and must affirmatively set forth facts that show that there is a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 322-326, 106 S.Ct. 2548, 2552-2554, 91 L.Ed.2d 265 (1986). McCarthy cannot effectively oppose a motion for summary judgment by contradicting his own deposition testimony. Miller v. A.H. Robins Co., 766 F.2d 1102, 1104 (7th Cir.1985).

In sum, while plaintiff is basing his Title VII case on direct evidence of a racially motivated discharge, no such evidence was adduced. McCarthy did not establish facts from which a...