Smith v. F.W. Morse & Co., Inc., 95-1556

Decision Date06 November 1995
Docket NumberNo. 95-1556,95-1556
Citation76 F.3d 413
Parties69 Fair Empl.Prac.Cas. (BNA) 1687, 67 Empl. Prac. Dec. P 43,884, 64 USLW 2563 Kathy SMITH, Plaintiff, Appellant, v. F.W. MORSE & CO., INC., Defendant, Appellee. . Heard
CourtU.S. Court of Appeals — First Circuit

On December 23, 1988, defendant-appellee F.W. Morse & Co., Inc. (Morse), a firm owned by Chris Bond, acquired Damar's business and assets. Damar then had fewer than forty employees, including seven managers reporting directly to Robinson: Michael Hickman (production control); Robert Lane (shipping); Ronald Paradis (production/machining); Marc Shevenell (production/sheet metal); Gary Bickford (engineering); Michael Seeger (sales); and Smith. Though not titled, Smith testified that she was considered to be a de facto manager who, largely because of Hickman's inadequacies, performed many of the duties of the production control manager.

Bond promptly concluded that Damar had too many chiefs and too few Indians. Within days of the closing, he fired Hickman. Then, in concert with Maryann Guimond, the new general manager (who had authority to hire, fire, and discipline personnel), he interviewed a number of employees, including Smith. In the aftermath of this review, the company cashiered Lane. To fill the void created by the two executive-level departures, Morse promoted Smith to the newly created position of materials manager, consolidating responsibilities for scheduling, production control, inventory control, purchasing, shipping, and receiving that had previously been spread among three managers.

All told, Morse's initial reorganization efforts substituted Guimond for Robinson and pared second-echelon management from seven to five. In addition to Guimond, the reconfigured management team comprised Paradis (machining); Shevenell (sheet metal); Bickford (engineering); Seeger (sales); and Smith (materials). In recognition of Smith's increased responsibilities, Morse twice hiked her pay (once in January and again in March), thus increasing her weekly stipend by roughly twenty-five percent.

At about the time of the takeover, Smith informed Bond that she had become pregnant and would need a maternity leave. Morse, a tiny company, had no formal maternity leave policy. Bond nonetheless honored Smith's request and assured her that her position was "secure." In preparation for her leave, Smith held several meetings with Guimond, Shevenell, and Paradis. The company temporarily distributed her managerial duties among other supervisors and arranged for a newly-hired secretary, Kelly Gilday, to perform her clerical functions. Along the way, Guimond informed Smith that either Paradis or Shevenell likely would be discharged, and told her that she would be promoted again upon her return from maternity leave. Guimond also indicated that, in all probability, Bickford would be demoted, and Smith would be asked to assume a portion of his duties. While these changes presumably would warrant increased remuneration, Guimond did not mention an amount.

On April 7, 1989, Smith began her maternity leave, planning to return to work in approximately six weeks. She gave birth two weeks later. Meanwhile, Guimond, expecting the "sky to fall," held regular "reality check" meetings with Shevenell and Paradis. To her surprise, the plant functioned very well. 1 Guimond reported the good news to Bond.

Smith visited the plant on May 1 and informed Guimond that she wished to return to work one week earlier than originally anticipated. Guimond inquired about whether Smith desired more children, and Smith replied affirmatively. The following day, Guimond queried Karen Vendasi, Smith's sister and co-worker, about Smith's plans to have a larger family. Vendasi relayed this conversation to Smith and told her of nascent rumors to the effect that she might not return to work. Smith contacted Guimond and demanded an explanation. Guimond denied any knowledge of the rumors, dismissed them as idle buzznacking, and again assured Smith that her job was secure. Guimond repeated these assurances during a chance meeting on May 4.

A few days later, Guimond concluded that the materials manager's position was superfluous and decided to eliminate it. She told Smith of her decision on May 11. During this telephone conversation, Guimond asked Smith if she preferred people to be told that she had decided to stay at home with her infant child rather than that she had been discharged. Smith rejected the suggestion. Nevertheless, a Morse employee repeated this canard to several customers. 2

Following Smith's severance, Guimond gave most of her duties to Paradis in his new capacity as operations manager. Shevenell assumed the role of manufacturing manager (in charge of both machining and sheet metal work). Guimond also promoted two lower-ranking employees, Peter Lapanne and Brian Hoffman, to assistant manager positions (though evidence adduced at trial demonstrated that Lapanne had been an assistant manager as far back as 1984, and that neither man assumed any new responsibilities or received any salary increase in connection with his new title). Gilday continued to perform the clerical functions associated with Smith's former position. When the second round of the reorganization wound down, the plant had three second-echelon managers--Paradis (operations); Shevenell (manufacturing); and Seeger (sales)--in lieu of the original seven.

B. Procedural History.

Smith sued Morse in a New Hampshire state court alleging, inter alia, wrongful discharge based on gender discrimination, intentional infliction of emotional distress, and breach of contract. Morse removed the case to federal district court on the ground that Smith's claim "arose under" Title VII, thus prompting federal question jurisdiction. See 28 U.S.C. §§ 1331, 1343(a)(3), 1441, 1446; see also 28 U.S.C. § 1367 (conferring ancillary jurisdiction over appended nonfederal claims). Smith thereafter filed an amended complaint that made her Title VII claim explicit.

Early in the proceedings, Morse moved for partial summary judgment. The district court (Stahl, J.) granted the motion on the common law wrongful discharge and emotional distress claims. See Smith v. F.W. Morse & Co., No. 90-361-S, slip op. at 12 (D.N.H. Sept. 26, 1991) (unpublished) (Smith I ).

Several years later, the parties simultaneously tried the Title VII claim to the bench (McAuliffe, J.) and the breach of contract claim to a jury. 3 At the close of the plaintiff's case, the district court entered judgment as a matter of law in the defendant's favor on the breach of contract claim and disbanded the jury. The Title VII case proceeded before the district judge. Morse asserted that it scrapped the materials manager's position and laid off the appellant as part of an overarching strategy to streamline a top-heavy managerial structure, and that even if Smith had not been on maternity leave she would have been flattened by the downsizing steamroller. The district court agreed and entered judgment accordingly. See Smith v. F.W. Morse & Co., 901 F.Supp. 40, 45 (D.N.H.1995) (Smith II ). This appeal ensued.


The crown jewel of the appellant's asseverational array is her contention that the district court erred in finding that Morse did not discriminate against her on the basis of her sex. Our appraisal of this contention is in three parts.

A. Standard of Review.

Following a bench trial, the court of appeals reviews the trier's factual determinations for clear error, see Cumpiano v. Banco Santander P.R., 902 F.2d 148, 152 (1st Cir.1990); Fed.R.Civ.P. 52(a), but affords plenary review to the trier's formulation of applicable legal rules, see Johnson v. Watts Regulator Co., 63 F.3d 1129, 1132 (1st Cir.1995). The jurisprudence of clear error constrains us from deciding factual issues anew. See, e.g., Jackson v. Harvard Univ., 900 F.2d 464, 466 (1st Cir.), cert. denied, 498 U.S. 848, 111 S.Ct. 137, 112 L.Ed.2d 104 (1990); Keyes v. Secretary of the Navy, 853 F.2d 1016, 1019 (1st Cir.1988). Indeed, we may not disturb the district court's record-rooted findings of fact unless on the whole of the evidence we reach the irresistible conclusion that a mistake has been made. See Cumpiano, 902 F.2d at 152; RCI Northeast Servs. Div. v. Boston Edison Co., 822 F.2d 199, 203 (1st Cir.1987).

This deferential standard extends not only to factual findings simpliciter but also to inferences drawn from the underlying facts. See Cumpiano, 902 F.2d at 152. Similarly, findings regarding an actor's motivation fall within the shelter of Rule 52(a), and, therefore, if the trial court's reading of the record on such an issue is plausible, appellate review is at an end. See Foster v. Dalton, 71 F.3d 52, 56-57 (1st Cir.1995); Anthony v. Sundlun, 952 F.2d 603, 606 (1st Cir.1991).

B. The Jurisprudence of Title VII.

Title VII provides, inter alia, that it is an unlawful employment practice for an employer to discharge an individual because of her sex. See 42 U.S.C. § 2000e-2(a)(1). After the Supreme Court held that this phraseology did not proscribe discrimination on the basis of pregnancy, see General Elec. Co. v. Gilbert, 429 U.S. 125, 145-46, 97 S.Ct. 401, 412-13, 50 L.Ed.2d 343 (1976), Congress augmented Title VII by enacting the Pregnancy Discrimination Act of 1978 (PDA), Pub.L. 95-555, § 1, 92 Stat. 2076, 2076 (1978) (codified at 42 U.S.C. § 2000e(k)). The PDA made clear that:

The terms "because of sex" or "on the basis of sex" include, but are not limited to, because of or on the basis of pregnancy, childbirth, or related medical conditions; and women affected by pregnancy, childbirth, or related medical conditions shall be treated the same for all employment-related purposes, including receipt of benefits under fringe benefit programs, as other persons not so affected but similar in their ability or inability to work.

42 U.S.C. § 2000e(k). Thus, at the time Smith and...

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