Patterson v. P.H.P. Healthcare Corp.

• Citation: 90 F.3d 927
• Decision Date: 25 July 1996
• Docket Number: No. 95-50319,95-50319
• Parties: 72 Fair Empl.Prac.Cas. (BNA) 613 Donna PATTERSON; Nicholas Brown, Plaintiffs-Appellees, and Michael L. Adams, Plaintiff, v. P.H.P. HEALTHCARE CORPORATION; Mark Kennedy, Defendants-Appellants.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

Page 927

90 F.3d 927

72 Fair Empl.Prac.Cas. (BNA) 613

Donna PATTERSON; Nicholas Brown, Plaintiffs-Appellees, and Michael L. Adams, Plaintiff, v. P.H.P. HEALTHCARE CORPORATION; Mark Kennedy, Defendants-Appellants.

No. 95-50319.

United States Court of Appeals, Fifth Circuit.

July 25, 1996.

Rehearing Denied Sept. 11, 1996.

William V. Dunnam, Jr., Dunnam & Dunnam, Waco, TX, for Patterson.

Christopher L. Thetford, Salter and Thetford, Gatesville, TX, for Patterson, Adams and Brown.

David Joseph Guillory, Nacogdoches, TX, David Weiser, Kator, Scott and Heller, Austin, TX, for Brown.

Gary L. Ingram, David C. Myers, Michael Lee Knapek, Sunny L. Hilliard, Phillip R. Jones, Jackson & Walker, Dallas, TX, for defendants-appellants.

Appeal from the United States District Court for the Western District of Texas.

Before DUHE, BARKSDALE and DeMOSS, Circuit Judges.

DeMOSS, Circuit Judge:

Nicholas Brown, Michael Adams ¹ and Donna Patterson brought suit against PHP Healthcare Corporation and Mark Kennedy in state court alleging various employment discrimination and retaliation claims. PHP Healthcare and Kennedy removed the case to federal court pursuant to 28 U.S.C. § 1441(b). Brown, a black male, alleged that he was constructively discharged from his position as a mental health technician and discriminated against because of his race in violation of 42 U.S.C. § 1981. ² Patterson, the head nurse at PHP Healthcare's Fort Hood facility, alleged violations of 42 U.S.C. § 2000e-3 for retaliatory discharge based on her opposition to Mark Kennedy's discriminatory hiring practices and Kennedy's discrimination against Brown. ³ After a bench trial, the district court entered judgment in favor of Brown and Patterson and awarded compensatory and punitive damages. For the forthcoming reasons, we affirm in part and reverse in part.

I.

On July 1, 1991, PHP Healthcare began providing psychiatric services under a fixed price contract for the United States Army personnel at the Darnell Army Community Hospital in Fort Hood, Texas. PHP Healthcare, a private corporation employing more than 500 employees, assembled the following people as the "core" staff for this new project in Fort Hood: the project manager, Mark Kennedy; the head nurse, Donna Patterson; and the psychologist, Dr. Michael Adams. Donna Hood worked as Kennedy's administrative assistant.

In this two day trial, the district court heard testimony from Kennedy, Patterson, Brown, Dr. Adams and four other witnesses, and determined the validity and credibility of their statements. The district court heard testimony that in late July 1991, less than one month after the facility opened, Kennedy met individually with each of his black employees to discuss a complaint that had been filed with the EEOC. Patterson testified that Kennedy, who is Caucasian, warned his black employees that he would not tolerate any EEOC complaints filed against PHP Healthcare. After the meetings, Kennedy told Patterson that "these stupid niggers need to understand I carry a big stick." At trial, Kennedy could not recall the reason for these meetings and did not refute Patterson's testimony.

Brown and Patterson testified that Kennedy scheduled black mental health technicians almost exclusively to the less desirable night shift. Further, Brown was forced to wait six months before receiving his shift differential upon becoming a full-time employee, while PHP Healthcare promptly resolved a similar problem with a white employee after one month. The district court also heard testimony that a white technician, James Tzcap, received a promotion to mental health technician supervisor while Brown was overlooked for the job.

In March 1992, a meeting was held at which black employees complained about being assigned to the less desirable night shift. Dr. Adams and Patterson testified that, after this meeting, Kennedy told Patterson that "not another nigger is to be hired." The district court also heard testimony from Dr. Adams, Patterson and Janet Berry (a current employee of PHP Healthcare) that Kennedy regularly referred to black employees as "porch monkeys," and "niggers" and considered black employees to be "shiftless" and "lazy." Kennedy did not dispute using the term "porch monkey," however, he testified that he was only joking when he used the term and attributed his use of the term to a joke told by Patterson. He also denied ever referring to his employees as "niggers."

In August 1992, Patterson hired another black mental health technician, Eddie Harris. A few days later, Kennedy left for PHP headquarters for a meeting. When he returned on August 17, 1992, Kennedy fired Patterson. Appellants PHP Healthcare and Kennedy contend that Patterson was fired because she took a three hour lunch while Kennedy was at corporate headquarters. Appellants also argue that Patterson reported for work late on August 10 and that she did not show up for work on August 11. Because of her absence on August 11, a patient escaped from the hospital.

After her termination, Patterson filed a claim with the Texas Employment Commission. Kennedy submitted a document at the T.E.C. hearing which listed PHP Healthcare's reasons for firing Patterson. Kennedy admittedly created this document and back-dated it for use at the T.E.C. hearing. The document included the above details of Patterson's alleged inappropriate conduct. PHP Healthcare and Kennedy contend that the document, in concert with Patterson's inability to work constructively with Hood (Kennedy's assistant), her regular tardiness in March, April and May 1992, and Patterson's insubordinate attempts to assist Brown, were valid reasons to terminate her employment.

Patterson never saw this document until the T.E.C. hearings because Kennedy created it expressly for the hearing. Further, one month before her termination, Patterson had received favorable marks in all categories on her employment evaluation. PHP Healthcare's employment manual also required two verbal warnings and a written warning prior to termination. Patterson received no such reprimands.

PHP Healthcare and Kennedy attempted to identify problems with Brown's performance as well. Brown received numerous disciplinary actions, including verbal counseling from Patterson about his tardiness and his tendency to call in sick before and after scheduled days off. Patterson also counseled Brown about agreeing to work for other technicians and then failing to show up. Brown received a written warning about his attendance problems in June 1992 and was placed on probation in July.

However, Kennedy threatened to impose disciplinary action on Brown under highly unusual circumstances involving falsified memos and other documents based on unexcused absences. Brown testified that Kennedy twice threatened him with disciplinary actions based on falsified memos and reports. Patterson corroborated Brown's testimony and Kennedy did not refute his use of questionable documentation of Brown's conduct. After Patterson was fired, the new head nurse, Becky Simpson, told Brown that she had no interest in hearing from any mental health technician except for the white technician, James Tzcap.

Based on this ongoing array of work related problems, Brown tendered his resignation on September 1, 1992, effective September 4, 1992. On September 1, Brown received a call from John Bucur, a PHP Healthcare official from the corporate headquarters, who arranged a telephone conference with Brown and Kennedy later that afternoon. In this meeting, Brown explained his problems with the work environment. Bucur assured Brown that the work environment would change. Later that afternoon, Brown asked to withdraw his resignation. Kennedy told him that he was no longer needed at PHP Healthcare and that his position had been filled. At the time of trial Kennedy was no longer an employee of PHP Healthcare having been terminated on April 27, 1994. Kennedy was terminated from PHP Healthcare after he gave the primary part of his deposition in this lawsuit.

The district court entered the following findings of fact and conclusions of law in favor of Brown and Patterson: The district court found that Kennedy repeatedly and routinely used racial slurs, including "porch monkey" and "nigger," and used these terms in referring to Brown as well as other black employees. When black employees were terminated or left PHP Healthcare, Kennedy routinely replaced them with white employees.

The district court also found that PHP Healthcare and Kennedy discriminated against Brown on the basis of his race by limiting his work schedule, assigning him to certain menial duties that were not performed by white employees, denying him an opportunity for promotion, falsifying documents in order to take disciplinary actions against him, and by constructively terminating him. With respect to Brown's resignation, the district court found that Brown withdrew his resignation in a timely manner after PHP Healthcare's headquarters convinced him that the hostile work environment would be improved. Kennedy then refused to allow Brown to withdraw the resignation which constituted a constructive discharge. Essentially, Brown was retaliated against and terminated for his complaints of racial problems at the hospital. He was replaced by a white employee. The district court found the reasons given by PHP Healthcare and Kennedy for Brown's dismissal to be pretexts for racial discrimination.

The district court entered a final judgment in favor of Brown against PHP Healthcare and Kennedy holding them jointly and severally liable for intentional discrimination in violation of 42 U.S.C. § 1981. The district court awarded damages of $22,648 in lost income and benefits, ⁴ $40,000 for emotional damage and $150,000 in punitive damages to Brown. The court based its award of punitive damages on the willful and malicious discrimination evidenced in this case.

As to Patterson, the district court found that she...