Miller v. Am. Family Mut. Ins. Co.

• Decision Date: 16 February 2000
• Docket Number: No. 99-1537,99-1537
• Citation: 203 F.3d 997
• Parties: (7th Cir. 2000) Kimberly Miller, Plaintiff-Appellant, v. American Family Mutual Insurance Company, Defendant-Appellee
• Court: U.S. Court of Appeals — Seventh Circuit

Page 997

203 F.3d 997 (7th Cir. 2000)

Kimberly Miller, Plaintiff-Appellant, v. American Family Mutual Insurance Company, Defendant-Appellee.

No. 99-1537

In the United States Court of Appeals For the Seventh Circuit

Argued September 29, 1999

Decided February 16, 2000

Appeal from the United States District Court for the Western District of Wisconsin. No. 98 C 168--Barbara B. Crabb, Judge. [Copyrighted Material Omitted]

[Copyrighted Material Omitted] Before Harlington Wood, Jr., Manion, and Evans, Circuit Judges.

Manion, Circuit Judge.

Kimberly Miller worked for American Family Mutual Insurance Company for eight years. She was a good employee who was twice promoted and who regularly received raises. Unlike her co-workers, she also gave birth to four children during her tenure. It was because of her pregnancies, she suspected, that she was not being paid as highly as her co-workers. After confronting her supervisors over her salary disparity, Miller was terminated. She sued American Family under Title VII, asserting that it discriminated against her with respect to her pay because of her pregnancies, and then fired her when she complained about it. In a thorough and well-reasoned opinion, the district court granted American Family's motion for summary judgment on both of Miller's claims. We affirm.

I. Background

The following facts are undisputed for purposes of summary judgment.

American Family hired Miller in 1988 as a Special Projects Clerk at $5.70/hr. Over the next eighteen months, it twice increased her wages (first to $6.10/hr. and then to $6.53/hr.). In 1990, American Family promoted her to Advertising Coordinator in the Direct Marketing Unit of its Advertising Department at an annual salary of $19,965. It gave her four raises over the next four years, with her salary reaching $28,073 by 1994.

On April 15, 1994, American Family promoted Miller to Direct Marketing Specialist-Advertising at an annual salary of $32,994. This promotion occurred about three months after the birth of her third child and one month after she returned from maternity leave. American Family raised Miller's salary to $36,323 in 1995 and to $38,473 in 1996. Her salary increases for 1994, 1995, and 1996 were the highest increases each year of any employee in her department.

Nevertheless, Miller was the lowest-paid person in her department in each of those years. American Family has three ranges of salaries for each position: minimum, mid-range, and maximum. Her 1994 and 1995 raises were needed to bring Miller up to the minimum range salary for her position. And her 1996 raise left her salary almost $2,000 below the bottom cut-off for her position's mid-range salary. Still, during her eight-year tenure, Miller received two promotions and a total pay increase from $11,115.00/year in 1988 (as an hourly employee) to $38,473/year in 1996 (as a salaried employee), and she was making progress with respect to American Family's three salary categories (rising from "minimum" in 1994 and 1995 to approaching "mid-range" in 1996). During this eight-year period, Miller gave birth to four children. She took four maternity leaves totaling thirty weeks in addition to 87 vacation and personal days.

From the time Miller was promoted to Specialist until she was fired, none of her four, female co-workers became pregnant or took maternity leave, and all were paid more than she, even those whom Miller had helped train. American Family explains that it paid Miller's colleagues more because they were in a higher position (and had been in that position longer); had been with the company much longer; had earned M.B.A.s (which Miller did not have); or had more experience in direct marketing and benefitted from "salary compression"--a condition where to attract employees from outside the company, American Family has to pay them more to perform the same job than it pays its existing employees who have equal or more experience. In this way, the salaries of its existing employees (in this case, Miller) are "compressed" relative to those of its newer hires.

By January 1995, Miller had discovered that she was the lowest-paid member of her unit and asked Ann Knapstein (then the head of Direct Marketing) whether it was because of her pregnancies. Miller asserts that Knapstein responded by "simply turn[ing] around, mad, and slamm[ing] one of the drawers on her desk."¹

On July 31, 1995, Andy King succeeded Knapstein as head of Direct Marketing. He had not previously worked for American Family. King thought all five of Direct Marketing's employees deserved raises, but he had a fixed pool of money to allocate among them. As a matter of company policy, he could not withhold raises from deserving, newer employees (in order to award Miller a higher raise) simply because they benefitted from "salary compression" vis-a-vis Miller. King would give Miller the largest raise in her unit, although this would still leave her almost $2,000 below mid-range.

King met with Miller on April 16, 1996 to discuss her raise. She was disappointed to learn she was going to be paid well below mid-range. She asked King what she needed to do to get up to mid-range. She claims his response was "You just have to stop having kids and I'll get you up to mid-range in a couple of years."² About one month after this meeting, in May 1996, Miller told King and Knapstein that she was pregnant again.

Upset that she was being paid less than her Direct Marketing co-workers, Miller demanded a meeting with her supervisors. On June 27, 1996, Miller met with King and Knapstein and asked them why she was the lowest-paid person in her unit. Knapstein said that she had tried to get Miller a higher salary when Miller was promoted to Specialist in 1994, and King said that Miller had received the highest raise of anyone in Direct Marketing that year. Miller stated that although she was happy with her work, she was not happy with her pay and wanted to be compensated fairly.

But then, according to her own copious notes of the meeting, she told Knapstein and King that the Advertising Department had "flunked every one" of the "10 big mistakes" of management. And she told King that he was a "political hire" who was put in a position where he did not have the knowledge he needed to do his job. Miller added that she had two accordion binders at her home filled with problems concerning one of her co-workers. She then gave King and Knapstein the following ultimatum: she would give them until the end of July to find out whether there was money available to raise her salary to an appropriate level; she added that "[i]f you can't even answer that question, I will be leaving the company."

On July 1, 1996, King and Knapstein met with Miller. King told Miller there was no more money available to give her a higher raise. (Miller claims King made only a half-hearted effort to obtain more money for her because of his anti- pregnancy bias.) Miller responded: "Then I will be leaving the company. Before I make any final decisions on when that will be, I first need to make a few phone calls, check the contract I have with my baby sitter and speak with my husband." She told King she would meet with him in a few days to tell him her decision.

On July 3, Miller sent King an e-mail stating that she had discussed the situation with her husband and decided that "she would not be leaving the company in the near future." (Emphasis added.) On July 8, Miller met with King, Knapstein, and a woman from the company's Human Resources Department. Miller was advised that she was terminated, effective immediately. American Family's reasons were: (1) Miller's "raise-or-quit" ultimatum was inappropriate; (2) it was concerned that she would not be a "team player" in the future, given her views about her supervisors and her file on a co-worker; (3) it feared her lack of commitment to the company, given her statements about leaving; and (4) it felt she was unhappy because she was not getting paid what she felt she deserved and would leave soon anyway.

On October 7, 1996, Miller filed a complaint against American Family with the Wisconsin Equal Rights Division (ERD).³ After receiving a right to sue letter from the EEOC, Miller brought suit against American Family under Title VII of the Civil Rights Act of 1964, 42 U.S.C. sec. 2000e et seq., as amended by the Pregnancy Discrimination Act (PDA), 42 U.S.C. sec. 2000e(k). She claimed that from the day she was promoted to Specialist in Direct Marketing until her termination, American Family paid her less than her co-workers because of her pregnancies. She also claimed that American Family retaliated against her by firing her (a) when she complained about it; and (b) because she was pregnant.⁴

American Family moved for summary judgment. Because Miller filed her discrimination claim with the ERD on October 7, 1996, the district court first held that her claim of pregnancy discrimination prior to December 12, 1995, the date the 300-day statute of limitations expired (note 3, supra), was untimely. With respect to Miller's remaining claims of discrimination, the district court held that Miller failed to show that American Family's proffered non- discriminatory reasons for paying her colleagues more than her were false or "pretextual." The court also rejected Miller's alternative argument of discrimination that she based on the direct evidence of King's alleged "stop having kids" statement because it was not tied to any "adverse action"--at the same time he made this comment, he gave Miller the largest raise in her department. Finally, the district court ruled against Miller on her second claim, retaliatory discharge. It held that Miller failed to establish that she engaged in protected conduct at the June 1996 meeting with her supervisors (that she was complaining about pregnancy discrimination), and that in the alternative, Miller did not establish that American Family's reasons for firing her...