Taylor v. Home Ins. Co.

CourtUnited States Courts of Appeals. United States Court of Appeals (4th Circuit)
Citation777 F.2d 849
Docket NumberNos. 84-1851,84-1960,s. 84-1851
Parties39 Fair Empl.Prac.Cas. 769, 38 Empl. Prac. Dec. P 35,742, 18 Fed. R. Evid. Serv. 1428 Howard TAYLOR, Appellee, v. The HOME INSURANCE COMPANY, Appellant. Howard TAYLOR, Appellant, v. The HOME INSURANCE COMPANY, Appellee.
Decision Date14 January 1986

John F. Gibbons (Kelley Drye & Warren, New York City, George R. Hodges; Moore, Van Allen, Allen & Thigpen, Charlotte, N.C., on brief, for appellant/cross-appellee.

George Daly (Walter Bennett, Bennett & Lawson, Charlotte, N.C., Norman B. Smith, Smith, Patterson, Follin, Curtis, James & Harkavy, Greensboro, N.C., on brief), for appellee/cross-appellant.

Before RUSSELL and SPROUSE, Circuit Judges, and BUTZNER, Senior Circuit Judge.

BUTZNER, Senior Circuit Judge:

Home Insurance Company appeals the judgment entered in Howard Taylor's action, which is based on the Age Discrimination in Employment Act, 29 U.S.C. Sec. 621 et seq. Taylor, a Home employee, sought back and front pay, liquidated damages, and equitable relief arising from two demotions. In a pendent state claim, Taylor sought compensatory and punitive damages for intentional infliction of emotional distress. The jury found that each demotion was on account of age, that each was willful, and that Home engaged in a policy or practice of age discrimination between the first and second demotions. It awarded back pay. The district court entered judgment on the verdict, awarded liquidated damages in double the amount of the verdict, and ordered equitable relief. The court dismissed the pendent claim before the case was submitted to the jury, and Taylor assigns error to this ruling in his cross appeal.

Home challenges the sufficiency of the evidence, assigning error to the district court's denial of its motions for summary judgment, a directed verdict, judgment notwithstanding the verdict, and a new trial. It asserts that it was prejudiced by the admission of evidence of Taylor's emotional suffering. It also contends: it could not be liable for the first demotion because the claim based on this event was untimely, the back pay award was excessive, the order for equitable relief was based on clearly erroneous factual findings and errors of law, and the cumulative effect of the district court's evidentiary rulings warrants reversal. Finally, it asserts that the court erred in instructing the jury to take evidence of emotional distress into account in determining whether Home willfully violated the Act. Finding merit in Home's final assignment of error, we vacate the judgment for liquidated damages and remand for a new trial on the issue of willfulness. In all other respects, we affirm the judgment. We find no merit in Taylor's cross-appeal.

I Sufficiency of the Evidence

Home contends that the evidence is insufficient to support the jury's verdict that the company discriminated against Taylor because of his age when it demoted him in 1979 and again in 1981. In Lovelace v. Sherwin-Williams Co., 681 F.2d 230 (4th Cir.1982), we explained the elements and means of proof of an age discrimination claim. There is no question that both Taylor and Home were covered by the Act and that Taylor was twice demoted. These elements of the Act need not detain us. The critical issue is whether Home demoted Taylor because of his age. Taylor has the burden of proving that "but for" Home's motive to discriminate against him because of his age he would not have been demoted. EEOC v. Western Electric Co., 713 F.2d 1011, 1014 (4th Cir.1983). Taylor may rely on direct or indirect evidence. Also, in the initial stages of the trial, he could rely on the judicially created presumptions adapted from Title VII cases. See Lovelace, 681 F.2d at 238-241. The evidence was in sharp conflict. Its resolution required the jury to assess the credibility of witnesses and to draw reasonable inferences from the facts.

Taylor managed Home's Charlotte, North Carolina, regional office for nine years until his demotion in March, 1979, at age 53. Taylor's evidence showed him to be a capable and successful manager. For the two years prior to his demotion, Home rated his performance "excellent." In 1978, the manager of Home's southern region, having earlier praised Taylor's ability to train people and his consistently excellent results, noted that he was "qualified for managing a larger field office." From 1970 through 1978 Taylor's office exceeded the budgeted level of written premiums in every year and turned an underwriting profit every year but one. The overall company performance was not as good. In December, 1978, a new manager of the Southern region raised Taylor's salary while noting: "Mr. Taylor continues to perform his duties in a professional manner. Even in the face of a highly adverse rate regulatory climate Mr. Taylor has produced an underwriting pre-tax profit. Recruits and keeps a highly qualified staff."

Notwithstanding this laudatory evaluation, three months later the regional manager gave Taylor the choice of resigning, accepting a demotion to underwriter manager in Atlanta, or seeking work in the company's other regions. This proposition to Taylor was preceded by a widely circulated memorandum disparaging the leadership in Charlotte. The regional manager stated the memorandum was inadvertently circulated, but he gave Taylor no warning that his services in Charlotte were unsatisfactory. Another company official recalled that shortly before Taylor was demoted, the manager remarked: "Mr. Taylor's work has been satisfactory there ... we have no main reasons. We are just not satisfied with him and we are going to remove him." Taylor's replacement in Charlotte was a 38 year old man with lower job appraisals.

Taylor moved to Atlanta as underwriting manager, but his tenure there lasted only from April 1979 to January 1981, when he was again demoted. Within a few months after Taylor began work in Atlanta, the office manager, age 54, was demoted and replaced by a younger man. Soon after his arrival, the new office manager told Taylor that the Atlanta marketing manager, age 57, "was no good and too old." Speaking of Taylor, he added, according to Taylor's testimony, "in my case he said my age, we'll have to find something possibly different for you." The marketing manager was soon demoted and replaced by a younger employee. Taylor's authority and duties were curtailed, and the new office manager hired and fired some of Taylor's subordinates without consulting Taylor.

Taylor's performance was adversely affected by two other events. His wife had to undergo surgery for cancer in Charlotte while he was in Atlanta and his son was killed in an automobile accident. Taylor missed nine days of work, and for a time his distress was apparent while he was at work. On one occasion, he openly cried in his office over his son's death. Several times he was emotionally unable to deal with his subordinate's inquiries.

Nevertheless, Taylor overcame these adversities. His former supervisor observed at trial that "Mr. Taylor was beginning to accomplish exactly what we wanted in the Atlanta office." Another employee characterized Taylor as the "best [underwriting manager] probably we have ever had." Their assessment was corroborated by Taylor's work. During Taylor's only full year as underwriting manager, he produced a profit. In contrast during a span of five years before and after Taylor's tenure, the Atlanta office had an underwriting loss.

In the latter part of 1980, Taylor's superior began looking for a younger man to replace Taylor without advising him of any impending change. Early in January 1981, Taylor was called from his work and told by the regional manager that he was being transferred to a newly created position in the Charlotte office because the Atlanta office manager did not want him. In the meantime, Taylor's replacement was being introduced to the staff. When Taylor returned to his office, he found his belongings in a box outside his office door. In contrast to the reason given Taylor for the transfer, the regional manager testified that Taylor was transferred to Charlotte for "humanitarian reasons, since Mr. Taylor's wife had moved back and since his emotional state was still not good." Taylor's replacement, although much younger, was incapable of filling the position, and in due time he was terminated.

Taylor's new position in Charlotte was a demotion. Moreover, he was given a sales quota which a company official described as a "challenge, but for a man of your caliber, it is not unreasonable." Assignment of the quota concluded with the written proviso that "[f]ailure to meet your goal will result in your performance being considered unsatisfactory, and appropriate action will be taken." Taylor's authority to recruit new accounts was then curtailed in such a way as to make the quota unattainable. He testified that he had never seen such a goal imposed on anyone during his tenure at Home. His supervisor admitted when testifying that he had never sent a similar memo to any other employee. In June 1981, Taylor filed a complaint with the EEOC charging age discrimination. Subsequently, he was granted a raise and he has remained with the company.

In addition to showing the sequence of events in his own situation, Taylor introduced other evidence to support his claim that Home engaged in a continuing practice of age discrimination. In 1978, a new president of Home set about to change the company. He testified that the following statement attributed to him in an interview published in the National Underwriter was generally accurate:

[T]he industry over the next five years will 'have to become less inbred, it will have to do what the banks did a quarter century ago,' that is, bring in smart young people.

Pressed for amplification, the president testified:

Now, if you want to imply...

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