Stalter v. Wal-Mart Stores

• Decision Date: 30 September 1999
• Docket Number: WAL-MART,No. 98-3453,98-3453
• Citation: 195 F.3d 285
• Parties: (7th Cir. 1999) ROLAND STALTER, Plaintiff-Appellant, v.STORES, INCORPORATED, Defendant-Appellee
• Court: U.S. Court of Appeals — Seventh Circuit

Page 285

195 F.3d 285 (7th Cir. 1999)

ROLAND STALTER, Plaintiff-Appellant, v. WAL-MART STORES, INCORPORATED, Defendant-Appellee.

No. 98-3453

United States Court of Appeals, Seventh Circuit

Argued March 29, 1999

Decided September 30, 1999

Appeal from the United States District Court for the Western District of Wisconsin. No. 97 C 866--John C. Shabaz, Chief Judge.

Before RIPPLE, ROVNER and EVANS, Circuit Judges.

ILANA DIAMOND ROVNER, Circuit Judge.

Roland Stalter maintains he was fired by Wal-Mart because he is African- American. Wal-Mart counters that it fired him because he stole a handful of taco chips from another employee. The district court said that Stalter had no evidence that Wal-Mart's stated reason was pretextual, and granted summary judgment to Wal-Mart. We reverse and remand.

I.

In October 1994, Wal-Mart hired Stalter to work as an Unloader in the Night Receiving Department in its Wausau, Wisconsin store. Stalter received a performance review in December of that year rating his work as "standard," which meant he was "consistent in performance, completes all assigned tasks, [and his] area runs smoothly and in order." Stalter had some difficulties with two Caucasian employees in the Receiving Department, Calla Sowinski and Becky Jo Ellenbecker. Stalter believed that Sowinski and Ellenbecker were treating him differently from other employees and were harassing him. Although he reported this conduct to his supervisor, John Pruss, Wal-Mart did not investigate his complaint.

Wal-Mart had an employee break room, which contained a countertop with a microwave, a refrigerator and a number of tables. Employees often left food in the break room, on the tables or the countertop, and would often share food, or eat food which appeared to be abandoned.¹ On occasion, a supervisor would order pizza for his or her department, and the pizza would be left in the break room for employees to eat as they wished. Some employees complained about food which had not been abandoned disappearing from the refrigerator in the break room, and Wal-Mart considered these possible thefts to be the source of a morale problem. In late January or early February 1995, Stalter ate a handful of taco chips from an open bag on the countertop in the break room. As he was munching, Ellenbecker and Sowinski entered the break room. The bag of chips apparently belonged to Ellenbecker, and she took the bag from Stalter and placed it in her locker. When Stalter realized the chips had not been abandoned but belonged to a particular individual, he apologized to Ellenbecker and offered to buy her a new bag of chips or a cup of coffee. Ellenbecker considered the incident "no big deal" and told Stalter to "forget about it."

Several days later, Stalter's supervisor, John Pruss, overheard Sowinski telling other employees that Stalter had eaten Ellenbecker's chips. Pruss asked Sowinski and Ellenbecker to provide written accounts of the incident, and they did so. In its entirety, Ellenbecker's statement reads as follows:

Calla and I had punched out for a morning break and as we entered the breakroom we both saw Roland S. eating my chips. He had gotten his coffee and sat down so I took the bag of chips and put then in my locker, with him walking behind me, now knowing they were mine, yet did not say a word. The next night he came up to me and did apologize and offered to buy me another bag or coffee, but I said no, for him just to forget about it.

R. 30, Ex. C. Sowinski's statement is even more brief:

I walked in to go on break, and when I came into the lounge--I saw Roland eating Becky Jo's Dorito's w/out anyone's permission. After we saw this--she went to get her chips, closed the bag and put them in her locker.

R. 30, Ex. E.

From this molehill of taco chips, Wal-Mart endeavored to make a mountain. Pruss took these statements to the store manager, and together they determined that Stalter committed theft, which was a form of "gross misconduct" under Wal-Mart's policies. An employee who committed gross misconduct was subject to immediate termination, according to Wal-Mart's view of its policy. Pruss also raised the incident with Wal-Mart's district manager, who agreed Stalter's act constituted theft and that termination was appropriate. On February 7, 1995, Pruss held a meeting with Stalter, during which Stalter admitted eating the chips. Pruss explained that this was theft and gross misconduct under Wal-Mart's policy and that Stalter was being terminated immediately.

Stalter first brought a state administrative action, and the ALJ in that proceeding found in Wal-Mart's favor. In that proceeding, Wal-Mart initially took the position that Ellenbecker complained about the incident to Wal-Mart management.² Wal-Mart later abandoned that position. Acknowledging that Ellenbecker did not care about the incident, Wal-Mart instead claimed that the viewpoint of the alleged victim of the theft was irrelevant. What was unknown at that time, and did not come to light until the discovery phase of the instant proceeding is that Ellenbecker had also committed "gross misconduct" under Wal-Mart's policy by not showing up for work at her scheduled time and lying to her supervisor about the reason for her absence. Instead of immediate termination, Ellenbecker was "counseled," a procedure in Wal-Mart's policy involving an employee meeting with management to discuss the incident and management indicating the need for improvement.

Stalter then sued in federal court, claiming his termination was race-based. The district court assumed for the purposes of Wal-Mart's summary judgment motion that Stalter met his burden of establishing a prima facie case of racial discrimination. Wal-Mart met its burden of articulating a legitimate, non-discriminatory reason, according to the district court, by explaining that it terminated Stalter for theft, and not because of his race. This explanation shifted the burden back to Stalter to show that the reason stated was a pretext for race discrimination. Stalter argued to the district court that Wal-Mart's stated reason was pretextual, as evidenced by (1) Wal-Mart's failure to investigate his claim of racial harassment by Sowinski and Ellenbecker; (2) Wal-Mart's use of the theft provision in circumstances where it clearly should not apply; and (3) Wal-Mart's more favorable treatment of Ellenbecker, a Caucasian employee, who committed another form of gross misconduct near the time of the taco chip incident. The district court rejected each of these arguments, finding that there was no evidence that Stalter had informed Wal-Mart that Ellenbecker's and Sowinski's mistreatment of him was race-based, that Stalter did technically commit theft under Wal-Mart's policy, and that lying to a supervisor was readily distinguishable from and less serious than theft. The district court therefore granted summary judgment in favor of Wal-Mart.

II.

On appeal, Stalter raises as evidence of pretext: (1) that Wal-Mart did not actually believe that Stalter engaged in theft; (2) that the punishment was grossly excessive in relation to the offense committed; (3) that Wal-Mart treated a Caucasian employee who had committed a similar offense much more leniently; and (4) that Wal-Mart failed to respond to Stalter's complaints of racial harassment by co-workers. Wal-Mart, in turn, contends that Stalter has not even made out a prima facie case of racial discrimination, much less shown that Wal-Mart's proffered reason for the termination was pretext.

Stalter seeks to prove his case under the McDonnell Douglas burden shifting method. See McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973). To make out a prima facie case under this framework, Stalter must show that he is a member of a protected class, that he suffered an adverse employment action, that he was meeting his employer's legitimate performance expectations, and that his employer treated similarly situated employees who were not in the protected class more favorably. Johnson v. Zema Systems Corp., 170 F.3d 734, 742-43 (7th Cir. 1999). To defeat summary judgment on the prima facie case, Stalter need only demonstrate that there is a genuine issue of material fact regarding these factors. No one disputes that Stalter, an African-American person, is in a protected class, and suffered an adverse employment action when he was terminated. Stalter raises a genuine issue of material fact on the remaining two prongs with evidence that he received a satisfactory performance review shortly before his firing, and with evidence that Wal-Mart counseled a Caucasian employee who committed a similar offense instead of terminating her. Wal-Mart makes much of the difference between theft and lying, but its policy for gross misconduct encompasses both, and Wal-Mart's dispute with Stalter's evidence cannot be resolved on summary judgment. Stalter therefore carries his burden on the prima facie case.

Under McDonnell Douglas, the burden then shifts back to Wal-Mart to state a legitimate, non- discriminatory reason for the firing. Johnson, 170 F.3d at 742. Wal-Mart claims that it fired Stalter not because of his race, but because he committed theft, and that company policy regarding gross misconduct such as theft, requires immediate dismissal. Stalter believes that Wal-Mart's argument fails at this point because part of meeting the legitimate, nondiscriminatory reason criteria is that the stated reason be credible. According to Stalter, Wal-Mart could not have believed that he committed theft based on the statement of the alleged victim, who did not care that her property had been taken. Stalter's argument really applies to the third part of the McDonnell Douglas test, whether the...