Randle v. Lasalle Telecommunications, Inc., 86 C 3290.

• Court: U.S. District Court — Northern District of Illinois
• Writing for the Court: James Betke, Julie Badel, McDermott, Will & Emery, Chicago, Ill., for defendant
• Citation: Randle v. Lasalle Telecommunications, Inc., 697 F.Supp. 1474 (N.D. Ill. 1988)
• Decision Date: 14 October 1988
• Docket Number: No. 86 C 3290.,86 C 3290.
• Parties: Casell RANDLE, George Austin and Holmes Communications, Plaintiffs, v. LaSALLE TELECOMMUNICATIONS, INC., d/b/a Chicago Cable TV, Defendant.

697 F. Supp. 1474

Casell RANDLE, George Austin and Holmes Communications, Plaintiffs, v. LaSALLE TELECOMMUNICATIONS, INC., d/b/a Chicago Cable TV, Defendant.

No. 86 C 3290.

United States District Court, N.D. Illinois, E.D.

October 14, 1988.

COPYRIGHT MATERIAL OMITTED

Robert Pincham and Anthony DiVincenzo, Chicago, Ill., for plaintiffs.

James Betke, Julie Badel, McDermott, Will & Emery, Chicago, Ill., for defendant.

MEMORANDUM OPINION AND ORDER

ZAGEL, District Judge.

The plaintiffs, Holmes Communications (HC), Casell Randle and George Austin, brought this action against the defendant LaSalle Telecommunications, Inc., d/b/a Chicago Cable TV (LaSalle), alleging claims under 42 U.S.C. sec. 1981 and pendent state claims for breach of contract. LaSalle has moved for summary judgment on all of the claims. See Fed.R.Civ.P. 56(c).

I

On 16 March 1984, LaSalle entered into an agreement with the City of Chicago. The City granted LaSalle a franchise "to construct, install, maintain and operate a cable television system" within a specified section of Chicago. Para. 2.1. Among the terms and conditions in the franchise agreement are two relating to minority business enterprises (MBEs) and women's business enterprises (WBEs), which obligate LaSalle to use its "best efforts" to ensure that MBEs receive 25% and WBEs 5% of the total dollar value of the contracts LaSalle awarded in exercising its franchise. Franchise Agreement, paras. 25.2 and 25.3. Enter Holmes Communications.

Robin Holmes, a black woman, owned HC, which was therefore an MBE and a WBE; she began HC in 1986 with approximately $8,000. While she was preparing to establish HC during 1985 she was also employed as a sales supervisor by Group W, a cable television operator. She wanted to work at Group W for at least one year "for resume fodder." Group W management was aware of this and believed she was there solely to disrupt and steal its sales force. While employed there Holmes learned that Group W had a policy of prohibiting its employees from working at another sales position at the same time. (Austin and Randle also were aware of this policy.)

In preparation to start her own business Holmes met several times with LaSalle representatives, and held discussions with Austin (while he was employed by Group W) about coming to work for her incipient company. The meetings with LaSalle resulted in a contract: HC would market LaSalle's cable service in areas specified by LaSalle in return for a commission on the sales. HC started selling cable subscriptions for LaSalle in January of 1986.

Austin and Randle started selling cable for HC while still employed by Group W, in violation of Group W's policy. When confronted with the fact, both lied. And both were fired.

Holmes, as well as Austin and Randle, also was aware that Group W and LaSalle had "an understanding or agreement" that people who left Group W for greener pastures could not work for another cable company for 60 days. Holmes was unfazed; and on behalf of HC she hired several Group W salesmen (including Austin and Randle) despite the fact they were still employed by Group W. And at some point after Group W fired Austin and Randle, a LaSalle representative "reminded" Holmes of Group W's 60-day policy and "suggested" that "it would be a good idea" if HC laid them off for 60 days. Holmes was persuaded; she felt it was in HC's best interests to send Randle and Austin packing for two months: LaSalle was paying HC's invoices much faster than it was contractually obligated to; and Holmes believed that if she did not lay off Randle and Austin the turnaround time on payment would increase; this in turn would jeopardize her nascent business by creating serious cash-flow problems. The payment period was so important to HC's continued survival that Holmes, in a subsequent contract modification, agreed to accept a reduced commission on certain cable subscription packages in return for quicker payment.

Worse came to worse, however, and by August of 1986 HC had been locked out of its office for failing to pay the rent. Holmes "threw in the sponge and went into seclusion * * *." On 5 August 1986 LaSalle, unaware of HC's difficulties, notified Holmes by letter that it was concerned that HC was not fulfilling its part of the contract: a number of HC salesmen had approached LaSalle for jobs claiming that they had not been paid for as many as four weeks, and HC had picked up only one sale out of approximately 40 leads; hardly indicia of a thriving business. The letter concluded that if Holmes did not respond to these concerns by the morning of August 7, LaSalle would reissue the sales routes it had previously assigned to HC.

Holmes, of course, never received the letter. After being locked out of the office she did not even try to pick up the mail. Having received no response, LaSalle sent Holmes a second letter on August 8; this one declaring that the contract terminated due to HC's "default." Holmes never received this letter either. The plaintiffs claim they were the victims of invidious race discrimination.

II

The plaintiffs allege four specific acts of discrimination: (1) LaSalle forced Holmes to terminate Randle and Austin for 60 days, (2) LaSalle unilaterally reduced HC's commission amount, (3) LaSalle arbitrarily limited the territories HC could work, and (4) LaSalle improperly terminated its contract with HC.

A

To prevail under sec. 1981¹, a plaintiff must show he is the victim of intentional discrimination. Friedel v. City of Madison, 832 F.2d 965, 972 (7th Cir.1987). And he may do so by direct or indirect proof. Id. LaSalle argues that the plaintiffs cannot establish a prima facie case of discrimination under the shifting-burdens-of-production method set out in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973); and that even if they could, LaSalle could articulate legitimate nondiscriminatory reasons for its actions which the plaintiffs could not show to be pretextual. The plaintiffs do not quarrel with LaSalle's position. Rather, they maintain that they have direct evidence of discrimination; and that the McDonnell Douglas test applies only when a plaintiff attempts to prove discrimination through indirect methods of proof. See Trans World Airlines, Inc. v. Thurston, 469 U.S. 111, 121, 105 S.Ct. 613, 621, 83 L.Ed.2d 523 (1985) ("The McDonnell Douglas test is inapplicable where the plaintiff presents direct evidence of discrimination. * * * The shifting burdens of proof set forth in McDonnell Douglas are designed to assure that the plaintiff has his day in court despite the unavailability of direct evidence."). See also Fields v. Clark University, 817 F.2d 931, 935 (1st Cir.1987); Furr v. AT & T Technologies, Inc., 824 F.2d 1537, 1549 (10th Cir.1987); Sims v. Cleland, 813 F.2d 790, 794 (6th Cir.1987); McCarthney v. Griffin-Spalding County Bd. of Ed., 791 F.2d 1549, 1553 (11th Cir.1986); Goodman v. Lukens Steel Co., 777 F.2d 113, 130 (3d Cir.1985), aff'd, ___ U.S. ___, 107 S.Ct. 2617, 96 L.Ed.2d 572 (1987). But see Abasiekong v. City of Shelby, 744 F.2d 1055, 1058 (4th Cir.1984) (burden of persuasion remained with plaintiff who introduced evidence of racially offensive remarks directed at him by the decisionmaker); Mullen v. Princess Anne Volunteer Fire Co., Inc., 853 F.2d 1130, 1138 (4th Cir.1988). We find it unnecessary to decide what method of proof is applicable in direct evidence cases, however, because we are convinced that the plaintiffs have not produced direct evidence of discrimination.²

Direct evidence is "proof which speaks directly to the issue, requiring no support by other evidence." Black's Law Dictionary 413 (5th ed. 1979). It "directly proves a fact, without an inference or presumption³; and which, if true, conclusively establishes that fact." Id. See also Blalock v. Metals Trades, Inc., 775 F.2d 703, 707 (6th Cir.1985) (where "direct" evidence is offered "no inference is required."); Furr v. AT & T Technologies, Inc., 824 F.2d 1537, 1549 (10th Cir.1987) (discriminatory statements were not direct evidence because they did not relate to the particular employment decisions at issue and thus required an inference). For purposes of determining whether the McDonnell Douglas test applies, evidence is direct if (1) it speaks directly to the issue of discrimination, and (2) it concerns the specific employment decisions in question. Neither is a sufficient condition; both are necessary.

Here the plaintiffs point to a number of racial slurs allegedly made by LaSalle personnel. There is deposition testimony, for example, that Bruce Ellis, LaSalle's general manager, stated in a meeting that "if he had his way he wouldn't deal with any women or blacks." Holmes Dep. at 129. On another occasion Ellis observed that the way "things were going, LaSalle would soon be all black." Hernandez Aff. para. 8. The plaintiffs contend that "this is certainly direct evidence of racial bias." Plaintiffs' Resp. at 10. And so it may be. But it is not direct evidence of racial bias with respect to HC. These remarks, while racially repugnant, do not directly establish that LaSalle discriminated against HC; at most, they show that Ellis, an apparent decisionmaker at LaSalle, harbored racially offensive attitudes; and in order for the plaintiffs' theory to succeed the trier of fact must make the further inference that his attitudes led him to discriminate against HC. This is not direct evidence.

The next item of direct evidence is that LaSalle "purposefully hired whites to work in white areas to the exclusion of blacks." Plaintiffs' Resp. at 10. See the Memorandum from Maria Diaz to Joe Hernandez, dated March 12, 1986. This evidence, like Ellis's comments, is circumstantial: it requires the fact-finder to infer the proposed conclusion that LaSalle discriminated against HC from the fact that LaSalle treated its own employees discriminatorily. The same holds true of the plaintiffs'...