Schweigert v. Provident Life Ins. Co., a Div. of United Services Life Ins. Co. (USLICO)

• Decision Date: 01 July 1993
• Docket Number: No. 920350,920350
• Citation: 503 N.W.2d 225
• Parties: 62 Fair Empl.Prac.Cas. (BNA) 443, 62 USLW 2079 Phyllis SCHWEIGERT, Plaintiff, and Jocelyn Martin, Plaintiff and Appellant, v. PROVIDENT LIFE INSURANCE COMPANY, A DIVISION OF UNITED SERVICES LIFE INSURANCE COMPANY (USLICO), Defendant and Appellee. Civ.
• Court: North Dakota Supreme Court

Page 225

503 N.W.2d 225

62 Fair Empl.Prac.Cas. (BNA) 443, 62 USLW 2079

Phyllis SCHWEIGERT, Plaintiff and Jocelyn Martin, Plaintiff and Appellant, v. PROVIDENT LIFE INSURANCE COMPANY, A DIVISION OF UNITED SERVICES LIFE INSURANCE COMPANY (USLICO) Defendant and Appellee.

Civ. No. 920350.

Supreme Court of North Dakota.

July 1, 1993.

Deborah J. Carpenter of Carpenter Offices, Bismarck, for plaintiff and appellant.

Patrick J. Ward of Zuger, Kirmis & Smith, Bismarck, for defendant and appellee.

LEVINE, Justice.

Jocelyn Martin appeals from a district court judgment dismissing her sex discrimination claim against Provident Life Insurance Company. We affirm.

Provident Life was acquired by United Services Life Insurance Company (USLICO) in 1982. As part of reorganizing its satellite companies, USLICO undertook to reduce expenses by streamlining operations at Provident Life, which ultimately resulted in the elimination of a significant number of positions, including Martin's. Martin filed a sex discrimination claim against Provident Life with the North Dakota Department of Labor. See NDCC Sec. 14-02.4-03. The Department rejected her claim, finding "no evidence to support [Martin's] allegation[ ] she was discharged because of her sex." Martin then commenced a discrimination action against Provident Life in state court, alleging that she had been terminated because of her sex in violation of Chapter 14-02.4, NDCC. After a bench trial, the district court found in favor of Provident Life. Martin appealed.

On appeal, Martin contends that the district court's finding of no sex discrimination is clearly erroneous. We disagree.

"It is the policy of this state to prohibit discrimination on the basis of race, color, religion, sex, national origin, age, the presence of any mental or physical disability, status with regard to marriage or public assistance, or participation in lawful activity off the employer's premises during nonworking hours." NDCC Sec. 14-02.4-01. ¹ Section 14-02.4-03 of our Human Rights Act says, in part, that "[i]t is a discriminatory practice for an employer to ... discharge an employee ... because of ... sex...." In Moses v. Burleigh County, 438 N.W.2d 186 (N.D.1989), we grappled with the issue of the effect federal law should have on our analysis of the North Dakota Human Rights Act. Obviously, federal law is not binding on our interpretation or application of state law, and the weight to be given it is a fair subject for debate, in part, because "[o]ur act is broader in scope and more generous in the protection it affords than federal civil rights statutes...." Id. at 197 (Levine, J., concurring and dissenting). However, given the obvious parallels between our state law and federal law, we will rely on federal law when it is helpful and sensible to do so, rather than "indiscriminately." Id. at 196 (VandeWalle, J., concurring in part and dissenting in part).

In Moses, supra, we applied the analytical framework utilized by the federal courts in cases alleging discriminatory treatment:

"First, the plaintiff has the burden of proving by the preponderance of the evidence a prima facie case of discrimination. Second, if the plaintiff succeeds in proving the prima facie case, the burden shifts to the defendant 'to articulate some legitimate, nondiscriminatory reason for the [employment decision].' Third, should the defendant carry this burden, the plaintiff must then have an opportunity to prove by a preponderance of the evidence that the legitimate reasons offered by the defendant were not its true reasons, but were a pretext for discrimination." Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 252-53 [101 S.Ct. 1089, 1093, 67 L.Ed.2d 207] (1981) [quoting McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802, 93 S.Ct. 1817, 1824, 36 L.Ed.2d 668 (1973) ].

The formula does two important things. First, it allocates the order of presentation of proof. Second, it ascribes the burden of proof each party bears. The plaintiff has the initial burden of persuading the fact finder that she has met the elements of her prima facie case. ² Burdine, 450 U.S. at 253, 101 S.Ct. at 1093. "Establishment of the prima facie case in effect creates a presumption that the employer unlawfully discriminated against the employee." Id. at 254, 101 S.Ct. at 1094.

If the prima facie case is established, the burden of production shifts to the defendant to rebut the presumption of discrimination by articulating a facially nondiscriminatory reason for its employment decision; the defendant need not, at this stage, litigate the merits of its reasoning for its decision, nor persuade the fact finder that it was actually motivated by its proffered reasoning. Id. at 254, 101 S.Ct. at 1094. See also FedREvid 301 (presumption does not shift burden of persuasion). However, the legitimate nondiscriminatory reason given by the employer must be specific and clear enough to "raise[ ] a genuine issue of fact as to whether it discriminated against the plaintiff." Id.

If the defendant carries its burden of production, the burden of persuasion shifts back to the plaintiff to show that the reason given by the employer was a pretext for intentional discrimination. Id. at 256, 101 S.Ct. at 1095. At this final stage, the plaintiff's burden is said to "merge[ ] with [her] ultimate burden of persuading the [fact finder] that she has been the victim of intentional discrimination." Id. The plaintiff may meet this burden of persuasion "either directly by persuading the court that a discriminatory reason more likely motivated the employer or indirectly by showing that the employer's proffered explanation is unworthy of credence." Id.

The federal courts of appeals had split over whether, under McDonnell Douglas and its progeny, a plaintiff was entitled to judgment as a matter of law when the trier of fact rejected the employer's asserted reasons for its employment decision. The Supreme Court recently settled the controversy in St. Mary's Honor Center v. Hicks, --- U.S. ----, 113 S.Ct. 2742, 125 L.Ed.2d 407 (1993), holding that a plaintiff is not entitled to judgment as a matter of law if he or she proves the employer's proffered reasons for its decision were not its true reasons, because the "fact finder must [also] believe the plaintiff's explanation of intentional discrimination" and make a finding to that effect. Id. at ----, 113 S.Ct. at 2754. The court, therefore, modified stage three of the McDonnell Douglas/Burdine formula, clarifying what a plaintiff must do to prove pretext: "If ... the defendant has succeeded in carrying its burden of production, the McDonnell Douglas framework--with its presumptions and burdens--is no longer relevant." Id. at ----, 113 S.Ct. at 2749. Then, "[t]he defendant's 'production' (whatever its persuasive effect) having been made, the trier of fact proceeds to decide the ultimate question" of whether the employer's action was motivated by intentional discrimination. Id. To prevail, the plaintiff must persuade the trier of fact both that the employer's asserted reasoning "was false, and that discrimination was the real reason" for its action. Id. at ----, 113 S.Ct. at 2752.

The Hicks decision does not disturb the reality that success in establishing the incredibility of the employer's asserted reasons will, in most instances, insure success for the plaintiff, because the incredibility of the employer's reasons "will permit the trier of fact to infer the ultimate fact of intentional discrimination." Id. at ----, 113 S.Ct. at 2749. All Hicks does is hold that discrimination is a matter of fact, not law, because under Rule 301 FREvid, the presumption of discrimination merely shifts the burden of production, not persuasion to the employer. "[T]he Court of Appeals' holding that rejection of the defendant's proffered reasons compels judgment for the plaintiff disregards the fundamental principle of Rule 301 that a presumption does not shift the burden of [persuasion], and ignores our repeated admonition that the Title VII plaintiff at all times bears the 'ultimate burden of persuasion.' " Id. (citations omitted).

Rule 301 of the North Dakota Rules of Evidence, however, is dramatically different. It makes clear that "[a] party against whom a presumption is directed has the burden of proving that the nonexistence of the presumed fact is more probable than its existence." NDREvid 301 (Emphasis added.) Our rule "gives presumptions a stronger effect than they are given under the comparable Federal Rule of Evidence, which imposes only a burden of producing evidence to rebut a presumption." Id. at Explanatory Note. Accordingly, under North Dakota law, if a plaintiff persuades the trier of fact of facts giving rise to a presumption, the burden of persuasion shifts to the defendant to rebut that presumption.

Notwithstanding the contrast between our rule and the federal rule on the impact of a presumption, the McDonnell Douglas/ Burdine formula, as modified in Hicks, provides a useful model, which we reshape to accommodate our rule and which we rely upon to provide a helpful guide to allocate the order of presentation of proof and the burdens each party bears in a case of discrimination under Chapter 14-02.4, NDCC. Our formula should assist litigants in marshalling and presenting relevant evidence and give courts a framework for analysis in discrimination cases. That formula, however, is not meant to be rigid and formalistic.

Accordingly, under our modification of the McDonnell Douglas/ Burdine framework, in a case under Chapter 14-02.4, NDCC, the plaintiff has the initial burden of proving by a preponderance of the evidence a prima facie case of discrimination. Establishment of the prima facie case creates a presumption that the employer unlawfully discriminated against the plaintiff. If the plaintiff meets his or her burden of persuasion, and succeeds in establishing the presumption, then, under Rule 301,...