Weaver v. Casa Gallardo, Inc.

• Decision Date: 01 February 1991
• Docket Number: No. 89-3245,89-3245
• Citation: Weaver v. Casa Gallardo, Inc., 922 F.2d 1515 (11th Cir. 1991)
• Parties: 55 Fair Empl.Prac.Cas. 27, 55 Empl. Prac. Dec. P 40,540 Ronald R. WEAVER, Plaintiff-Appellee, v. CASA GALLARDO, INC., A Foreign Corporation doing business in the State of Florida, Defendant-Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1515

922 F.2d 1515

55 Fair Empl.Prac.Cas. 27, 55 Empl. Prac.

Dec. P 40,540

Ronald R. WEAVER, Plaintiff-Appellee, v.CASA GALLARDO, INC., A Foreign Corporationdoing business in the State of FloridaDefendant-Appellant.

No. 89-3245.

United States Court of Appeals, Eleventh Circuit.

Feb. 1, 1991.

Richard H. Sinkfield, Atlanta, Ga., for defendant-appellant.

Kaydell O. Wright Douglas, Tampa, Fla., for plaintiff-appellee.

Appeal from the United States District Court for the Middle District of Florida.

Before CLARK, EDMONDSON and RUBIN^*, Circuit Judges.

ALVIN B. RUBIN, Circuit Judge:

Casa Gallardo, Inc., appeals a finding of liability and the award of damages under Title VII ¹ of the Civil Rights Act of 1964 and Sec. 1981² for discriminatory and retaliatory employment actions against Ronald R. Weaver, a black male, formerly employed by Casa Gallardo.For the reasons detailed below, we affirm the judgment of liability under Title VII for both of Weaver's failure-to-promote claims and for his claim of retaliatory and discriminatory discharge, reverse the district court's judgment of liability under Sec. 1981 for Casa Gallardo's failure to promote Weaver on two occasions, and for its termination of Weaver, and remand for the district court's reevaluation of the failure-to-promote claims under Sec. 1981 in the wake of Patterson v. McLean Credit Union.³We also remand for reevaluation of its award of damages.

I.

Ronald Weaver joined Casa Gallardo in 1980 as an experienced manager in the restaurant business, transferring from an Area Supervisor position with Red Lobster, a business then owned through Casa Gallardo by General Mills, Inc. Weaver spent three months at Casa Gallardo as a Manager Trainee, then became a restaurant manager, then in July, 1981, was promoted to Area Supervisor.

In November, 1982, Jim Bunting, the Director of Operations for Casa Gallardo and Weaver's immediate supervisor, created the Operations-Manager position.Operations Managers were to rank between Area Supervisors and the Director of Operations in the Casa Gallardo hierarchy.Bunting considered for promotion each of the four Area Supervisors, including Weaver, and selected Ted Geiger, a white male.

By the summer of 1983, Bunting had decided to create a second Operations-Manager position and he again reviewed the performance of each Area Supervisor.Again, he selected a white male, William Matseas, one of Weaver's former trainees.On October 10, Weaver filed a charge of discrimination relating to both promotions with the Equal Employment Opportunity Commission.

On April 4, 1984, David Lane, Casa Gallardo's Vice President of Operations, terminated Weaver's employment.Weaver filed a second charge of discrimination with the EEOC following his dismissal.

Weaver asserted that he was denied both promotions and eventually discharged because of his race and in retaliation for filing a complaint against Casa Gallardo with the EEOC, and that he was entitled to relief under Title VII and Sec. 1981.After a bifurcated bench trial, the district court found Casa Gallardo liable to Weaver for all three employment decisions under both Title VII and Sec. 1981.After hearing evidence relating to damages, the court awarded Weaver $230,972.00 plus prejudgment interest of $41,815.58 for losses of back pay and benefits, $160,305.00 for three years of front pay damages, $5,000 for compensatory damages pursuant to Sec. 1981, and attorney's fees in the amount of $26,730.00, a total of $464,822.58.Casa Gallardo appeals each determination of liability and challenges the damages award on a number of grounds.

II.

A.Section 1981 Claims

Weaver challenged each of the employment decisions on both Title VII and Sec. 1981 theories.The district court's judgment in his favor awarded him compensatory damages for the consequences of each decision without explicitly recognizing that compensatory damages may not be awarded for a violation of Title VII.⁴We must therefore review the correctness of the award for each claim under Sec. 1981.

Subsequent to the rendition of the district court judgment, the Supreme Court held in Patterson v. McLean Credit Union⁵ that Sec. 1981 as an earlier statute should not be read "broadly where the result is to circumvent the detailed remedial scheme constructed in a later statute,"Title VII, ⁶ and "covers only conduct at the initial formation of the contract and conduct which impairs the right to enforce contract obligations through legal process," excluding "postformation conduct unrelated to an employee's right to enforce her contract, such as incidents relating to the conditions of employment."⁷The petitioner in Patterson did not present a discriminatory-discharge claim, nor did the Court directly address such a situation.Moreover, the Court did not resolve the question whether Sec. 1981 applied to Patterson's failure-to-promote claim, since the defendant had never argued at any stage that Sec. 1981 excluded such a claim, but noted:

[W]hether a promotion claim is actionable under Sec. 1981 depends on whether the nature of the change in position was such that it involved the opportunity to enter into a new contract with the employer.If so, then the employer's refusal to enter the new contract is actionable under Sec. 1981.In making this determination, a lower court should give a fair and natural reading to the statutory phrase "the same right ... to make ... contracts," and should not strain in an undue manner the language of Sec. 1981.⁸

Notwithstanding Patterson's obvious pertinence to dual section 1981/Title VII claims, applying the decision requires two preliminary determinations.The first is whether the mode of analysis suggested by Patterson should be applied retroactively to cases that had been tried before it was decided but in which the judgment was not yet final.In Lytle v. Household Manufacturing, ⁹the Supreme Court indicated its belief that the Fourth Circuit would find it appropriate to apply the intervening decision of Patterson upon its reconsideration of the petitioner's Sec. 1981 claims, although the issue had not been properly presented to the Court itself.¹⁰This court has not explicitly resolved the issue of Patterson's retroactivity, but we have previously applied it as an intervening decision in cases on appeal, ¹¹ and other circuits have concluded extensive retroactivity analyses in favor of its retroactive application.¹²We therefore conclude that Patterson governs this case.This application of Patterson is not precluded by the fact that Casa Gallardo raised no objection to the application of Sec. 1981 in the trial court.Casa Gallardo did properly raise the Patterson issue on appeal, ¹³ and Weaver has failed to argue that Casa Gallardo waived the issue, thus waiving his right to do so.¹⁴

1.Applying Sec. 1981 to Weaver's Promotion Claims.Patterson, in dicta, stated that "[o]nly where the promotion rises to the level of an opportunity for a new and distinct relation between the employee and the employer is such a claim actionable under Sec. 1981," and referred to the refusal of a law firm to promote an associate to partner considered in Hishon v. King & Spalding.¹⁵Patterson's discussion of Sec. 1981 makes the focus of the test fairly clear: a plaintiff's failure-to-promote claim is cognizable under Sec. 1981 if the promotion would have entailed a new contractual relationship between the employee and the employer, "involving in effect the opportunity to enter into a new contract with the employer."¹⁶

The parties had no opportunity to develop the record with an eye toward determining whether the promotion given Geiger would in fact, as to Weaver, have entailed a "new contract" within the meaning of Sec. 1981, and the district court had no opportunity to make an initial finding.We, therefore, remand for consideration of the question whether the failure to promote Weaver to Operations Manager denied him the opportunity to enter into a new contract with Casa Gallardo as contemplated by Patterson.¹⁷

2.Applying Sec. 1981 to Weaver's Discharge Claims.This circuit has previously determined that Patterson's interpretation of Sec. 1981 precludes claims for retaliatory discharge, and our reasoning necessarily applies to discriminatory-discharge claims as well.¹⁸This establishes the law of the circuit and Weaver does not present any argument on appeal for distinguishing his circumstances.In addition, the Second, Fifth, Sixth, Seventh, and Ninth Circuits have found that Patterson bars Sec. 1981 relief for discriminatory discharge, ¹⁹ the Fourth Circuit has so held in an unpublished opinion, ²⁰ and a panel of the Eighth Circuit has criticized that circuit's prior holding that Patterson does not bar such relief.²¹Accordingly, Weaver's termination claim is not cognizable under Sec. 1981.

B. Weaver's Title VII Promotion Claims

Weaver might have characterized his case as one presenting direct evidence of discrimination, thereby triggering the analysis articulated by Price Waterhouse v. Hopkins, ²² but both he and the district court regarded his case as one squarely invoking the presumption approach of McDonnell Douglas Corporation v. Green.²³Although the distinctions, if any, between a direct-evidence case ²⁴ and a circumstantial-evidence case ²⁵ are in doubt Weaver's consistent preference for the McDonnell Douglas characterization leads us to examine his case in that fashion.²⁶

Under McDonnell Douglas and Texas Department of Community Affairs v. Burdine, ²⁷"a plaintiff has the initial burden of establishing a prima facie case of racial discrimination by a preponderance of the evidence."Once established, this raises a presumption that the defendant racially discriminated against the plaintiff."[T]he burden then shifts to the defendant to rebut the presumption by producing sufficient evidence to raise a genuine issue of fact as to whether the defendant discriminated...