Miller v. Fairchild Industries, Inc.

• Citation: 885 F.2d 498
• Decision Date: 19 September 1989
• Docket Number: No. 87-6325,87-6325
• Parties: 58 Fair Empl.Prac.Cas. 915, 51 Empl. Prac. Dec. P 39,432 Diane MILLER and Pamela Lewis, Plaintiffs-Appellants, v. FAIRCHILD INDUSTRIES, INC., a Maryland Corporation, Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

Page 498

885 F.2d 498

58 Fair Empl.Prac.Cas. 915,

51 Empl. Prac. Dec. P 39,432

Diane MILLER and Pamela Lewis, Plaintiffs-Appellants, v. FAIRCHILD INDUSTRIES, INC., a Maryland Corporation Defendant-Appellee.

No. 87-6325.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Aug. 1, 1988.

Withdrawn from Submission

Aug. 2, 1988.

Resubmitted May 23, 1989.

Decided May 23, 1989.

As Amended on Denial of Rehearing and Rehearing En Banc

Sept. 19, 1989.

Tyron J. Sheppard, Los Angeles, Cal., for plaintiffs-appellants.

Andrew C. Peterson, Los Angeles, Cal., for defendant-appellee.

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

Before FLETCHER, PREGERSON and CANBY, Circuit Judges.

FLETCHER, Circuit Judge:

Pamela Lewis and Diane Miller appeal the district court's dismissal of their Title VII claim alleging that Fairchild Industries discharged them in retaliation for filing discrimination charges with the Equal Employment Opportunity Commission (EEOC). They also appeal the district court's dismissal of their claims for the negligent and intentional infliction of emotional distress, the directed verdict on their retaliation claims brought under 42 U.S.C. Sec. 1981 and the California Fair Employment and Housing Act (CFEHA), and the directed verdict on their claims for breach of contract, tortious breach of the implied covenant of good faith and fair dealing, and fraud. Finally, they appeal a number of the district court's pretrial rulings and evidentiary rulings during trial. We affirm the directed verdict on the tortious breach claim, but reverse the dismissal of the Title VII claim and the emotional distress claims and the directed verdict on the breach of contract, fraud, Section 1981, and CFEHA claims. We remand for a new trial. ¹

BACKGROUND

Fairchild Control Systems, Inc., a division of Fairchild Industries, is primarily a government contractor. At the time of their discharge, Diane Miller worked for Fairchild as a contracts administrator and Pamela Lewis was employed as a junior designer. Both were the only black women in their respective positions.

Miller was first employed by Fairchild in 1974 as a clerk typist. In 1980, she was promoted to the non-clerical position of contracts administrator. Miller maintained a good relationship with her supervisor, Stan Peterson, until December 1981 when the work space for the Contracts Department was redesigned and Miller expressed dissatisfaction with the location of her new office. Shortly thereafter, Miller received a good overall performance evaluation, but was denied a merit increase due to her record of absenteeism. After complaining to Supervisor Peterson and other Fairchild management personnel and receiving an unsatisfactory response, Miller filed an EEOC charge alleging race and sex discrimination.

Fairchild denied the discrimination charge, and the EEOC held a fact-finding conference on September 1, 1982. At that conference, Fairchild entered into a settlement agreement with Miller whereby Miller gave up her right to sue for discrimination under Title VII, and Fairchild promised to review the denial of Miller's merit increase and to provide Miller with training opportunities on an equal basis with similarly situated employees. ²

Pamela Lewis began working in Fairchild's Engineering Department in 1979 as a draftsperson, and in 1981, she was promoted to junior designer. Lewis's supervisor, Glenn Ray, repeatedly denied her requests to take training courses, including classes to train on Fairchild's newly purchased computer-aided design and computer-aided manufacturing system (Cad/Cam). Lewis filed an EEOC charge of race and sex discrimination alleging that Ray denied her training opportunities provided to male Caucasian designers.

Fairchild denied the discrimination charge and the EEOC held a fact-finding conference on September 24, 1982. Fairchild entered into an agreement with Lewis in which it promised to transfer Lewis to a different supervisor within the Engineering Department, to allow Lewis to begin Cad/Cam training and to attend subsequent courses, and to remove any negative materials from Lewis's personnel file. Lewis, for her part, waived her right to file a Title VII lawsuit for discrimination.

On November 5, 1982, less than two months after Miller and Lewis signed their settlement agreements with Fairchild, the company laid them off, citing economic reasons. Although other Fairchild employees were laid off at the same time, Miller was the only contracts administrator and Lewis was the only designer discharged.

On May 27, 1983, Miller and Lewis brought this action alleging that Fairchild discharged them in retaliation for filing EEOC complaints, in violation of (1) Title VII of the 1964 Civil Rights Act, (2) 42 U.S.C. Sec. 1981 (Section 1981), and (3) the California Fair Employment and Housing Act (CFEHA). Miller and Lewis also allege that Fairchild breached the EEOC settlement agreements and the implied covenant of good faith and fair dealing, committed fraud, and intentionally or negligently inflicted serious emotional distress.

On November 26, 1984, the district court granted Fairchild's motion for summary judgment on all causes of action. This court reversed and remanded for trial after concluding that Miller and Lewis had presented triable factual issues on all claims. Miller v. Fairchild Industries, Inc., 797 F.2d 727 (9th Cir.1986).

In pretrial proceedings, the district court granted Fairchild's motion to bifurcate the trial on issues of liability and damages, dismissed the emotional distress claims as preempted by the California Workers Compensation Act, and ruled on Fairchild's eight motions in limine. Miller and Lewis appeal from the district court's pretrial rulings excluding parol evidence, determining the allocation of proof on the retaliation claims, dismissing punitive damages as to their negligence and breach of contract claims, excluding the testimony of four lay witnesses, excluding the testimony of one expert witness, excluding statements regarding "statistical significance," and excluding evidence of hirings after their layoffs.

A three day jury trial commenced on May 5, 1987. The Title VII claim was tried to the court, and the remaining claims were tried to the jury. Miller and Lewis appeal four of the district court's evidentiary rulings during trial.

After both sides rested, the district court granted Fairchild's motion to dismiss appellants' Title VII retaliation claim under Fed.R.Civ.P. 41(b), and directed a verdict for Fairchild on the remaining claims under Fed.R.Civ.P. 50(a). The district court found that no reasonable jury could find in favor of Miller and Lewis based on the evidence presented.

DISCUSSION

I. STANDARD OF REVIEW

We review the district court's involuntary dismissal of appellant's Title VII claim under the same standard applied to a judgment following a bench trial. See Stone v. Millstein, 804 F.2d 1434, 1437 (9th Cir.1986). The district court's findings of fact are reviewed for clear error and its legal conclusions are reviewed de novo. Id. We review for clear error the district court's factual finding that Lewis and Miller were not subject to discriminatory retaliation in violation of Title VII. Unt v. Aerospace Corp., 765 F.2d 1440, 1444 (9th Cir.1985).

We review de novo the propriety of the directed verdict on the remaining claims. See Donoghue v. Orange County, 848 F.2d 926, 932 (9th Cir.1988). We view the evidence in the light most favorable to the appellants, drawing all possible inferences in their favor, to determine if there is substantial evidence supporting a verdict for Miller and Lewis. See Donoghue, 848 F.2d at 932; Lucas v. Bechtel Corp., 800 F.2d 839, 850 (9th Cir.1986). A directed verdict is proper when the evidence permits only one reasonable conclusion. Donoghue, 848 F.2d at 932.

We review the district court's pretrial dismissal of the emotional distress and the punitive damages claims de novo. Fort Vancouver Plywood Co. v. United States, 747 F.2d 547, 552 (9th Cir.1984). The district court's ruling with respect to parol evidence was based on the application of principles of contract interpretation and is reviewed de novo. Miller v. Safeco Title Insurance Co., Inc., 758 F.2d 364, 367 (9th Cir.1985). We review the district court's evidentiary rulings and its decision to bifurcate the trial for an abuse of discretion. Hirst v. Gertzen, 676 F.2d 1252, 1261 (9th Cir.1982) (decision to bifurcate); Kisor v. Johns-Manville Corp., 783 F.2d 1337, 1340 (9th Cir.1986) (evidentiary rulings).

II. RETALIATORY DISCHARGE CLAIMS

Lewis and Miller allege that they were laid off by Fairchild in retaliation for filing charges with the EEOC in violation of Title VII, Section 1981 and the CFEHA.

Under Section 704(a) of Title VII of the Civil Rights Act of 1964, 42 U.S.C. Sec. 2000c-3(a), an employer may not retaliate against an employee for opposing discriminatory employment practices. See Miller, 797 F.2d at 730; EEOC v. Crown Zellerbach Corp., 720 F.2d 1008, 1011 (9th Cir.1983). Section 1981 provides an independent but overlapping federal remedy for intentional racial discrimination in employment. Johnson v. Railway Express Agency, Inc., 421 U.S. 454, 460, 95 S.Ct. 1716, 1720, 44 L.Ed.2d 295 (1975); Lowe v. City of Monrovia, 775 F.2d 998, 1010 (9th Cir.1985), amended by 784 F.2d 1407 (9th Cir.1986). Because facts sufficient to give rise to a Title VII claim may also support a Section 1981 claim, an employee may seek relief for a retaliatory discharge under both provisions. See Miller, 797 F.2d at 733. ³ Finally, Cal.Gov't Code Sec. 12940(f) (West Supp.1988) prohibits an employer from discharging an employee for engaging in protected activities under the CFEHA. See Miller, 797 F.2d at 733.

After the presentation of all evidence, the district court dismissed the Title VII claim and directed a defense verdict on the Section 1981 and CFEHA...