North v. Madison Area Ass'n for Retarded Citizens-Developmental Centers Corp.

• Decision Date: 04 April 1988
• Docket Number: No. 86-3145,CITIZENS-DEVELOPMENTAL,86-3145
• Citation: 844 F.2d 401
• Parties: 46 Fair Empl.Prac.Cas. 943, 46 Empl. Prac. Dec. P 37,930 James C. NORTH, Plaintiff-Appellant, v. MADISON AREA ASSOCIATION FOR RETARDEDCENTERS CORPORATION, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 401

844 F.2d 401

46 Fair Empl.Prac.Cas. 943,

46 Empl. Prac. Dec. P 37,930

James C. NORTH, Plaintiff-Appellant, v. MADISON AREA ASSOCIATION FOR RETARDED CITIZENS-DEVELOPMENTAL

CENTERS CORPORATION, Defendant-Appellee.

No. 86-3145.

United States Court of Appeals, Seventh Circuit.

Argued June 1, 1987.

Decided April 4, 1988.

Jacqueline Macaulay, Borns Macaulay & Jacobson, Madison, Wis., for plaintiff-appellant.

Jane A. Edgar, Jenswold, Studt, Hanson, Clark & Kaufmann, Madison, Wis., for defendant-appellee.

Before CUMMINGS and CUDAHY, Circuit Judges, and GRANT, Senior District Judge. ^*

GRANT, Senior District Judge.

James North, a black male, brought suit under Title VII of the Civil Rights Act of 1964, 42 U.S.C. Sec. 2000e et seq. ("Title VII"), and 42 U.S.C. Sec. 1981, alleging that his former employer, Madison Area Association for Retarded Citizens ("MAARC"), discriminated against him on the basis of his race. More specifically, North alleged that he was wrongfully discharged from his employment on the basis of his race; was subjected to racial harassment; and, was disparately treated at the time of his termination. ¹

Upon demand, and without objection, all issues were tried to a jury. ² The jury, however, became deadlocked in its deliberations, and was unable to return a verdict. As a result, the district court declared a mistrial and thereafter directed a verdict in favor of MAARC on each count of the complaint, denying North's motion for a new trial. North filed a motion for reconsideration, which the district court denied. This appeal followed. For the following reasons, we now affirm the judgment of the district court.

I. STANDARD OF REVIEW

"In reviewing a district court's grant of a motion for directed verdict ... the standard to be applied is the same as that applied by the trial court." Panter v. Marshall Field & Co., 646 F.2d 271, 281 (7th Cir.), cert. denied, 454 U.S. 1092, 102 S.Ct. 658, 70 L.Ed.2d 631 (1981). We must determine whether the evidence presented at trial, when viewed in the light most favorable to the non-moving party and combined with all reasonable inferences that may be drawn therefrom, provides a sufficient probative basis for a verdict free from speculation over claims which are legally unfounded. Webb v. City of Chester, Illinois, 813 F.2d 824, 828 (7th Cir.1987); Panter v. Marshall Field & Co., 646 F.2d at 281. It is well-established that:

A mere scintilla of evidence is not enough to require the submission of an issue to the jury. The decisions establish a more reasonable rule "that in every case, before the evidence is left to the jury, there is a preliminary question for the judge, not whether there is literally no evidence, but whether there is any upon which a jury can properly proceed to find a verdict for the party producing it, upon whom the onus of proof is imposed."

Gunning v. Cooley, 281 U.S. 90, 94, 50 S.Ct. 231, 233, 74 L.Ed. 720 (1930), quoting Improvement Co. v. Munson, 81 U.S. (14 Wall.) 442, 448, 20 L.Ed. 867 (1871); Van Houdnos v. Evans, 807 F.2d 648, 650 (7th Cir.1986); Hohmann v. Packard Instrument Co., 471 F.2d 815, 819 (7th Cir.1973). A motion for directed verdict thus raises only a question of law, for which our review is de novo. Webb v. City of Chester, Illinois, 813 F.2d at 827; McMahon v. Eli Lilly and Company, 774 F.2d 830, 832 (7th Cir.1985). ³

II. FACTS

The facts, viewed in a light most favorable to North, are as follows. MAARC is a nonprofit, publicly-funded corporation that serves developmentally disabled adults. As a corporate entity, MAARC acts primarily through its Board of Directors, a group of about twelve volunteers, most of whom have an adult child or relative who is a MAARC client. Among its other powers, the Board has the sole authority to make employment decisions, including the authority to hire and fire personnel, and to award employment benefits. MAARC receives the majority of its funding, approximately one million dollars, from the Unified Services Board, a county agency, and the rest from Title XIX (a federal program serving the handicapped), donations and income from subcontract work performed by MAARC clients.

James North began his employment with MAARC in May 1974, as an instructor. In 1977, he became coordinator of a new project known as Property Maintenance Services ("PMS") in which eligible clients were divided into crews and sent into the community to perform generally maintenance-type services on a subcontract basis. The program thus generated both income and expenses for MAARC. In 1979, North's position was upgraded to that of PMS manager, in which capacity he performed both administrative and client-related duties. The greater percentage of North's time as manager was spent working with the clients. There were two non-management supervisory positions under North in the PMS program: a work coordinator and a work supervisor. Both positions were "union jobs" and involved only client-related responsibilities.

In August 1981, the Board of Directors appointed Richard Berling as the new Executive Director of MAARC. MAARC had been experiencing financial difficulties prior to Berling's arrival, with the corporation showing a net loss in 1980. Those difficulties continued in 1981 when MAARC was notified by the Unified Services Board that its funding would be cut for the last three months of 1981. In October 1981, MAARC lost a quarter million dollar transportation contract with Dane County, Wisconsin, for the upcoming year. In 1982, the Unified Services Board again proposed a decrease in funding to MAARC, and recommended that MAARC meet the financial demands placed upon it by reducing its administrative staff where possible, without reducing client services. ⁴

In accordance with the Unified Services Board directive, MAARC undertook a reorganization of its administrative staff at the end of 1981 and beginning of 1982. The positions of marketing manager, personnel officer, assistant executive director and transportation officer were eliminated. ⁵ In addition, the position of business manager was downgraded to an accounting position with a reduction in salary. All of these positions were held by white individuals.

The Unified Services Board recommended further reduction of MAARC's administrative staff as part of its 1983 budget proposal. Faced with potential funding cutbacks, Richard Berling prepared a list of proposed alternatives for dealing with the problem and presented it to the Board of Directors and its respective committees for their review. Eighteen alternatives were listed, including the proposed reduction of administrative staff. Five options were listed for reducing administration, one of which was the elimination of the position of PMS manager, the position held by North.

The Board of Directors subsequently voted to eliminate North's position and to terminate his employment. North was notified of the Board's decision on January 5, 1983, with termination to be effective January 31, 1983. North thereafter made a written request for termination benefits in the form of vacation pay, compensatory time, and severance pay. With the exception of vacation pay, North's request was rejected by the Board. At the time of his termination, North was earning an annual salary of $15,793.00.

North argues on appeal that sufficient evidence was introduced at trial from which a jury could have found in his favor as to each of the claims presented, and that the district court therefore erred in granting a directed verdict for MAARC. North premises his argument with two conclusions which he deems to have been conceded by the district court: first, that a reasonable jury could have found that Richard Berling harbored some discriminatory animus toward him, and that Berling's recommendation to eliminate North's position was motivated by an intent to discriminate against North because of his race; and second, that the district court, in reaching its original decision, applied an inappropriately strict standard when it required North to show that the Board acted in "complete reliance" on Berling's recommendation when it eliminated North's position. North maintains that on reconsideration, the district court acknowledged that it had set an improperly high standard, and, accordingly, modified its order on reconsideration to apply a "but for" analysis. North, however, did not deem it necessary to identify for this court the standard(s) which he maintains would be applicable in this case. It is only after MAARC sets out the standards for determining employer liability and intentional discrimination in its response, that North addresses his arguments in light of those standards. North argues in his reply that MAARC could be held strictly liable for the Board's action if Berling's racially discriminatory motive influenced the Board's decision, and was thus a determining factor in that decision. North concludes that this is true regardless of whether the Board had knowledge of Berling's discriminatory motive. ⁶

North maintains that Berling did exert such influence over the Board, and that there was no evidence to support the district court's conclusion that the Board actively investigated matters on its own or acted on its own initiative without Berling's guidance, or that it considered alternatives other than those offered by Richard Berling when it voted to eliminate North's position. North would have the court infer from this lack of evidence that the Board would not have eliminated his position but for Berling's recommendation.

North proceeds by challenging the credibility of MAARC's proffered reasons for his termination. He maintains that the evidence does not support the conclusion that MAARC was under severe financial restraints at the time of his termination; or that there was any shift in the clientele and the programs in which they were involved which would have required administrative reorganization of the type proposed...