Taylor v. Western and Southern Life Ins. Co.

• Decision Date: 13 July 1992
• Docket Number: Nos. 90-3859,91-1057,s. 90-3859
• Citation: 966 F.2d 1188
• Parties: 59 Fair Empl.Prac.Cas. (BNA) 625, 59 Empl. Prac. Dec. P 41,638, 61 USLW 2143 John L. TAYLOR and Carolyn M. Taylor, Plaintiffs-Appellees/Cross-Appellants, v. WESTERN AND SOUTHERN LIFE INSURANCE COMPANY and Western-Southern Life Assurance Company, Defendants-Appellants/Cross-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1188

966 F.2d 1188

59 Fair Empl.Prac.Cas. (BNA) 625,

59 Empl. Prac. Dec. P 41,638, 61 USLW 2143

John L. TAYLOR and Carolyn M. Taylor Plaintiffs-Appellees/Cross-Appellants, v. WESTERN AND SOUTHERN LIFE INSURANCE COMPANY and Western-Southern Life Assurance Company Defendants-Appellants/Cross-Appellees.

Nos. 90-3859, 91-1057.

United States Court of Appeals, Seventh Circuit.

Argued Sept. 20, 1991.

Decided July 13, 1992.

Arthur J. Martin (argued) Schuchat, Cook & Werner, St. Louis, Mo., for plaintiffs-appellants.

Richard J. Pautler, Bradley S. Hiles (argued), Mary Tonkin, Peper, Martin, Ensen, Maichel & Hetlage, St. Louis, Mo., for defendants-appellees.

Before BAUER, Chief Judge, RIPPLE, Circuit Judge, and FAIRCHILD, Senior Circuit Judge.

RIPPLE, Circuit Judge.

John Taylor and Carolyn Taylor, husband and wife, each sold life insurance as employees of Western and Southern Life Insurance Company and Western-Southern Life Assurance Company (collectively "Western-Southern"). After a series of racially discriminatory incidents, Mrs. Taylor was fired and Mr. Taylor resigned. Mr. Taylor filed a race discrimination claim with the EEOC and received a right to sue letter. Together, Mr. and Mrs. Taylor brought suit against Western-Southern, alleging that the conditions of their employment and termination violated 42 U.S.C. § 1981, constituted breach of contract and wrongful discharge, and, with respect to Mr. Taylor, violated Title VII of the 1964 Civil Rights Act. On April 6, 1989, the district court granted Western-Southern's 12(b)(6) motion to dismiss the section 1981, breach of contract, and wrongful discharge claims as barred by a six-month limitation-of-actions period in the Taylors' employment contracts. On May 9, 1990, after a bench trial, the district court ruled in favor of Mr. Taylor on his Title VII claim against Western-Southern. On December 3, 1990, after a hearing on damages, the district court entered final judgment in favor of Mr. Taylor on the Title VII claim. Western-Southern appeals from the court's judgment in favor of Mr. Taylor's Title VII claim, and Mr. and Mrs. Taylor cross-appeal from the court's judgment dismissing their section 1981 claims. For the following reasons, we affirm in part and vacate and remand in part.

I BACKGROUND

A. Facts

On December 8, 1980, Western-Southern hired Mr. Taylor, a black man, as a sales representative assigned to the Peoria office. Mr. Taylor signed an employment contract that contained the following limitation of actions clause:

Section III. Legal Proceedings

You agree:

C. Not to commence any action or suit relating to your employment with Western-Southern more than six months after the date of termination of such employment, and to waive any statute of limitation to the contrary.

R.1 Ex.A at 2. Mr. Taylor was at the time, and continues to be, married to Mrs. Taylor, a white woman. During the entire time Mr. Taylor worked in the Peoria district, he was the only black employee of Western-Southern in the district.

Mr. Taylor performed well as a sales agent and, in October 1981, was promoted to sales manager. In 1982, Jack O'Neal was assigned as the new district manager in the Peoria district office; O'Neal became Mr. Taylor's immediate boss. During the first week of O'Neal's directorship, O'Neal said to Mr. Taylor, "[Y]ou are all right because I know you are married to a white." Tr.I at 43. Soon thereafter, however, O'Neal called Mr. Taylor into his office and accused him of lying about having worked a full day the previous day. While displaying a gun, O'Neal told Mr. Taylor, "I'm the boss ... don't come in here lying to me again" (Tr.I-44). After several further O'Neal continued his abusive acts. He told racist jokes at work, including one which Mrs. Taylor overheard that ended with the punch line, "[M]ay all your babies be white." Tr.I at 175. In October 1982, during a sales promotion in which agents paired up to sell insurance as teams, O'Neal arranged to have Mr. Taylor as his partner for a day. Riding together in O'Neal's car, O'Neal asked Mr. Taylor if he minded stopping by O'Neal's house for a moment. Mr. Taylor agreed, and accompanied O'Neal into his house, where O'Neal pulled a chair back from the kitchen table and told Mr. Taylor to have a seat while he got something from another room. Mr. Taylor sat down and was reading a magazine when, a minute later, O'Neal returned with a handgun which he turned on Mr. Taylor. Over the next several moments, O'Neal placed the gun to Mr. Taylor's temple and held it there while he triggered a flash camera to take a series of photographs. O'Neal then backed off and said, "John, I was just playing with you." Tr.I at 57. At Mr. Taylor's request, O'Neal drove Mr. Taylor back to the office. A week later, at the office staff meeting, O'Neal passed the photographs around the office saying, "[T]his is what a nigger looks like with a gun to his head." Tr.I at 60. After Mrs. Taylor was hired as a sales representative in the same office, O'Neal asked the Taylors to join him and assistant vice president Max Pearson at a bar in Peoria. At the bar, Pearson fondled Mrs. Taylor's leg in a manner that embarrassed Mrs. Taylor and angered Mr. Taylor. Tr.I at 62-63.

                unpleasant exchanges with O'Neal, Mr. Taylor asked to be demoted from his position as sales manager, and to resume his original job as sales representative, in order to avoid having direct contact with O'Neal.   On June 2, 1982, Mr. Taylor stepped down.   The associate sales manager position vacated by Mr. Taylor was immediately filled by a white agent who was a friend of O'Neal's
                

Mr. Taylor complained about O'Neal to Lester Rafferty, who had been the district manager and Mr. Taylor's immediate boss, but was demoted when O'Neal was transferred in as district manager. Rafferty suggested to Mr. Taylor that he talk with divisional vice president Charles Douglas, who also is black. Mr. Taylor later had a long discussion with Douglas, who responded that he had always known that O'Neal was a racist and that he would try to get Mr. Taylor transferred to another office. In the spring of 1983, Douglas told Mr. Taylor that he had a position available for him in East St. Louis. In July 1983, Max Pearson met with Mr. Taylor and explained that the sales manager's position on the East St. Louis staff was a good opportunity for Mr. Taylor, particularly because everyone on the East St. Louis staff was black. Douglas also informed Frank Harp, the district manager of the East St. Louis office, that Mr. Taylor was black and that he was married to a white woman. According to Douglas, he told Harp this because "I didn't want to have a lot of turmoil and problems when transferring a family like this." Tr.II at 117.

Mr. Taylor and Mrs. Taylor were both from Peoria and had family still living there. Nevertheless, in July 1983, the Taylors transferred to East St. Louis, and Mr. Taylor took the position of associate sales manager of the East St. Louis staff. ¹ Despite Pearson's characterization of the East St. Louis post as a good career opportunity, Mr. Taylor soon discovered that there were serious problems with the staff for which he became responsible. Some of the agents had been defrauding the company by submitting bogus policies. Other agents had been defrauding customers by pocketing premiums and allowing policies to lapse. Several agents had to be fired after Mr. Taylor discovered that money was missing from their accounts. In addition, Mr. Taylor learned first-hand that the East St. Louis neighborhoods were dangerous to service; while he and a fellow agent were making a sales call, a homeowner As associate manager, Mr. Taylor's income depended upon the success of the agents he managed. While he had some success turning the East St. Louis staff around, he was earning less as a manager than he knew he could as an agent. After eight months as associate sales manager, he sought demotion to sales representative. In July 1984, he learned of a sales manager's opening on the Alton staff, which was part of the East St. Louis District but worked out of a detached office nearby. Mr. Taylor asked Douglas to be promoted and transferred to the associate sales manager on the Alton staff. Douglas told Mr. Taylor that there might be a problem assigning him to the position because the Alton staff was all white. At Douglas' direction, East St. Louis district manager Frank Harp held a meeting with the Alton sales staff, at which he asked each agent if they would have a problem being managed by Mr. Taylor. No one objected, and Mr. Taylor moved into the position of sales manager on the Alton staff on August 6, 1984.

                displayed a gun and told them that if they ever came back he would kill them.   Tr.I at 76
                

For the remainder of 1984 and the first few months of 1985, things in the Alton office went very well. In late 1984, while Douglas was visiting offices in the St. Louis area, he met with Mr. Taylor and Harp and discussed, among other things, Mr. Taylor's success. Mr. Taylor inquired about his chances of becoming a district manager or otherwise advancing with Western-Southern. At one point in the conversation, after Harp had stepped away for a moment, Douglas told Mr. Taylor that his chances for advancement were limited because he was married to a white woman.

In July 1985, the president and the executive vice president of Western-Southern visited the area. At this time, Mrs. Taylor had transferred to the Alton staff and was working as a sales representative. When they visited the Alton office, the president and the executive vice president were introduced first to Mr. Taylor, as the manager, and then to Mrs. Taylor, as his wife and one of the agents, and then to each of the other agents. Sometime thereafter, Western-Southern republished a rule--which had been ignored for over ten years--against family members working together in the same office. Around the same time, Douglas convinced...