Rasheed v. Chrysler Corp.

Decision Date17 May 1994
Docket NumberNo. 10,Docket Nos. 95122,95774,10
Citation445 Mich. 109,517 N.W.2d 19
PartiesMuhammad RASHEED, Plaintiff-Appellant, v. CHRYSLER CORPORATION and James Senart, Defendants-Appellees. Calendar
CourtMichigan Supreme Court
Durant & Durant, P.C. by Richard Durant, Detroit, for the plaintiff
OPINION

RILEY, Justice.

Today the Court is called upon to consider a host of issues surrounding a claim for discriminatory termination of employment brought under the Michigan Civil Rights Act. 1 Resolution of these issues requires us to explore the legal and procedural parameters of a discriminatory termination claim involving subsequent offers of reinstatement as they relate to the theory of damage mitigation. We conclude that because the trial court made its decision regarding the appropriate remedy before all factual issues were decided, we remand for resolution of the reasonableness of rejection issue and a reassessment of the appropriate remedy. We also find that because defendants waived the statute of limitations defense, it is unnecessary to deal with plaintiff's continuing violations claim. Finally, we affirm the trial court's denial of defendants' motion for a directed verdict on the intentional discrimination claim.

I

Plaintiff began his employment with Chrysler in 1967 at the Huber facility in Detroit. In 1978, plaintiff converted to the Muslim faith. Three years later, plaintiff was transferred to Chrysler's Trenton engine plant where, according to plaintiff, he was subjected to religious and racial harassment from the first day when guards at the plant allegedly attempted to stop him from taking an Islamic newspaper into the facility because it was "subversive," being called "Ayatollah Cockamania" by his supervisor and alleged major antagonist James Senart, the purposeful placing of pork near his work station during the holy month of Ramadan, 2 numerous remarks about how Muslims should stay in Detroit, attempts to incite anti-Muslim sentiments from the other employees, refusal to replace plaintiff's broken tools while other employees got new tools, several suspensions with racial and religious overtones, and for other similar acts. Plaintiff reported these incidents to union officials and Chrysler managerial employees on numerous occasions. Although the record contains evidence of several meetings between Chrysler management and plaintiff or his union representatives regarding these alleged occurrences, no legal action was taken by plaintiff before his termination. 3

According to plaintiff, the anti-Muslim atmosphere culminated on July 12, 1984, in a setup orchestrated by Senart and intended to get plaintiff fired from his employment. Senart was allegedly baiting plaintiff, 4 and other employees were improperly removing a storage bin, called a head divider, from plaintiff's work area. When plaintiff retrieved the head divider, Senart allegedly rebuked him for taking it away from another work station. According to defendants, plaintiff kicked the head divider and threw two engine heads onto the ground with such damaging force that they could not be repaired. Senart wrote up a report on the incident, alleging that plaintiff purposefully destroyed company property, which is a ground for immediate discharge. Shortly thereafter, plaintiff was escorted out of the plant by security guards and placed on disciplinary leave.

Charles Fern, the labor relations manager at the Trenton plant, reviewed Senart's report and attempted to interview plaintiff's co-workers. 5 Fern inspected the two engine heads that were indeed damaged, and he looked at two grooves in the floor of plaintiff's work area that were allegedly caused by plaintiff's act of hurling the engine heads to the ground. Fern also spoke to union representatives and other supervisors. As a result of his investigation, Fern concluded that plaintiff had destroyed company property, and the disciplinary leave was upgraded to termination of employment.

Plaintiff filed the instant action in Wayne Circuit Court against Chrysler and Senart for wrongful discharge based on racial and religious discrimination, for intentional infliction of emotional distress, and for fraud or misrepresentation on the part of Senart. Before trial, the court ruled that any damages awarded to plaintiff would be limited to the thirteen-month period of his unemployment preceding his rejection of Chrysler's reinstatement offer. 6 At trial, the court granted defendants' motion for a directed verdict on all but the religious discrimination claim. The jury returned a verdict in favor of plaintiff on the religious discrimination claim and awarded him $51,300 for lost wages and $10,000 for embarrassment or humiliation. In a subsequent hearing conducted without a jury, the court exercised its equitable powers to order Chrysler to reinstate plaintiff as newly hired, with no seniority, within sixty days of the decision.

Defendants appealed the court's decision not to grant the motion for a directed verdict on the religious discrimination claim, as well as the order requiring plaintiff's reinstatement as a newly hired employee. Plaintiff cross appealed the court's refusal to permit recovery for acts occurring before the three-year period of limitation running from the date of termination and for the decision not to reinstate plaintiff with full seniority rights and backpay.

A majority of the Court of Appeals upheld the trial court's decision not to grant defendants' motion regarding the religious discrimination claim, and it upheld the trial court's "equitable power" to fashion the remedy of reinstatement, albeit without any seniority rights. 196 Mich.App. 196, 200, 493 N.W.2d 104 (1992). The majority also upheld the ruling of the limitation of backpay to the thirteen-month period before plaintiff's refusal to accept Chrysler's reinstatement offer. Finally, the majority concluded that plaintiff failed to establish all of the elements necessary to invoke the "continuing violation" theory, which would have permitted plaintiff to recover for alleged acts that occurred more than three years before the filing of the complaint. The dissenting judge, relying heavily on federal precedent, would have reversed the trial court's decision to reinstate plaintiff for what he considered to be an unreasonable refusal to accept Chrysler's "unconditional" offer of reinstatement. Id. at 210, 493 N.W.2d 104.

This Court granted both parties' application for leave to appeal. 7

II
A

One year and three months after his termination, Chrysler offered to reinstate plaintiff to his former position with full seniority, but without backpay. The offer provided in its entirety:

"In full settlement of this case, M. Rasheed will be offered reinstatement in accordance with his seniority provided he can meet normal requirements. Upon his return to work his discharge shall be reduced to a disciplinary layoff without back pay for the period during which he was away from the plant.

"This action of the Appeal Board shall form no basis or precedent for a decision or settlement in any other case."

On the basis of this offer, defendants moved for partial summary disposition to prevent plaintiff from recovering continued backpay 8 for a failure to accept what they asserted was an "unconditional" offer, as well as to prevent plaintiff's reinstatement. Plaintiff asserted that the offer was conditional because it did not include backpay and because it offered to convert the termination into a disciplinary layoff rather than remove the blemish from his employment record. 9 At the hearing on the motion itself, the trial court concluded as follows:

"IT IS HEREBY ORDERED, ADJUDGED AND DECREED that Defendant's Motion is granted as it concerns limiting backpay that Plaintiff can seek, to that period covering July 19, 1984, up to and including August 26, 1985.

"IT IS FURTHER ORDERED, ADJUDGED AND DECREED that Defendant's Motion as it concerns the preclusion of reinstatement for Plaintiff is denied, and Plaintiff will be allowed to present proofs concerning the equitable issue of reinstatement to the trier of fact.

"IT IS FURTHER ORDERED, ADJUDGED AND DECREED that notwithstanding any ruling on reinstatement of the submission of proofs, Plaintiff's backpay is limited to the aforementioned July 19, 1984 to August 26, 1985 period."

It is unclear from this ruling what was the basis for the trial court's conclusion that plaintiff rejected an unconditional offer so that he was not entitled to continued backpay, but that the issue of reinstatement was a question to be decided by the finder of fact. In addressing this issue, we turn first to a discussion of the relevant case law.

B

The law concerning backpay and other remedies in the employment discrimination context has its roots in provisions of the federal Civil Rights Act of 1964, which amended the Civil Rights Act of 1957. 10 The avowed purpose of the new provisions was to "provide the spur or catalyst which causes employers ... to self-examine and to self-evaluate their employment practices and to endeavor to eliminate, so far as possible, the last vestiges of an unfortunate and ignominious page in this country's history." United States v. N L Industries, Inc., 479 F.2d 354, 379 (C.A. 8, 1973), quoted in Albemarle Paper Co. v. Moody, 422 U.S. 405, 417-418, 95 S.Ct. 2362, 2372, 45 L.Ed.2d 280 (1975). Modeled after a provision in the National Labor Relations Act, the backpay provision was intended to "make whole" anyone suffering from the effects of employment discrimination. Albemarle, supra at 418-419, 95 S.Ct. at 2372.

Almost a decade later, however, the United States Supreme Court...

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