Whatley v. Skaggs Companies, Inc.

• Decision Date: 09 May 1983
• Docket Number: Nos. 81-1303,81-1357,s. 81-1303
• Citation: 707 F.2d 1129
• Parties: 31 Fair Empl.Prac.Cas. 1202, 31 Empl. Prac. Dec. P 33,596, 13 Fed. R. Evid. Serv. 133 Louis WHATLEY, Plaintiff-Appellee, and Cross-Appellant, v. SKAGGS COMPANIES, INC., Defendant-Appellant, and Cross-Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1129

707 F.2d 1129

31 Fair Empl.Prac.Cas. 1202,

31 Empl. Prac. Dec. P 33,596,

13 Fed. R. Evid. Serv. 133

Louis WHATLEY, Plaintiff-Appellee, and Cross-Appellant, v. SKAGGS COMPANIES, INC., Defendant-Appellant, and Cross-Appellee.

Nos. 81-1303, 81-1357.

United States Court of Appeals, Tenth Circuit.

May 9, 1983.

Earl K. Madsen of Bradley, Campbell & Carney, Golden, Colo., for defendant-appellant, cross-appellee.

Paul A. Baca, Attorney, Denver, Colo., for plaintiff-appellee, cross-appellant.

Before SETH, Chief Judge, and HOLLOWAY and McWILLIAMS, Circuit Judges.

HOLLOWAY, Circuit Judge.

Defendant-appellant Skaggs Companies, Inc., brings a timely appeal in No. 81-1303 from a judgment, following a trial to the court, in favor of plaintiff-appellee Louis Whatley, a former Skaggs employee, on his employment discrimination claim against defendant for allegedly discriminatory treatment of plaintiff because of his status as a Mexican-American. Plaintiff bases his claims on Title VII of the Civil Rights Act of 1964, 42 U.S.C. Secs. 2000e, et seq., ¹ as amended, and the Civil Rights Act of 1870, 42 U.S.C. Sec. 1981. ² Plaintiff Whatley cross-appeals in No. 81-1357, asserting error in an off-set against the back pay award, exclusion of profit-sharing income from the award, and failure to award interest.

The district court entered findings, conclusions, and judgment for plaintiff and further ordered that the parties confer in an attempt to reach an agreement on the proper amount of back pay to be awarded. 502 F.Supp. 370. The court withheld entry of final judgment until after determination of back pay and attorney's fees awards.

The parties were unable to reach agreement. Consequently, the court held a hearing to determine the appropriate level of back pay and attorney's fees. It then made supplemental findings and conclusions, entered judgment in favor of plaintiff for $89,236.15, plus costs, and attorney's fees in the amount of $5,115.00. 508 F.Supp. 302. The appeal and cross-appeal followed.

I

Defendant operates a large chain of retail stores. During the time of plaintiff's employment, most of the stores sold prescription drugs, over-the-counter drugs, and sundries. The organizational district containing the stores in which plaintiff worked consisted of ten stores.

Management in each of defendant's stores consisted of a general manager who was responsible for the entire store; an assistant general manager directly responsible for the drug sales area which constituted the bulk of the sales floor in each store and who was responsible for the entire store in the general manager's absence; and a lobby manager who was directly responsible for candy, tobacco, and film counters which were usually located in the front of the store beyond the line of checkout counters. The lobby manager ordered merchandise, organized displays, and scheduled employees for work in his area. Defendant's stores were staffed by clerks assigned to each area. A district manager oversaw the operations of a number of different stores.

Promotions to the lowest managerial position were usually made from among the clerks. Lobby managers could be promoted to assistant general managers and assistant general managers to general managers. Promotion usually also meant transfer to another store in defendant's chain. Recommendations for promotion or demotion were made by a store's general manager, sometimes accompanied by an assistant general manager's recommendation, to the district manager. Recommendations were always made orally. Defendant had no formal employee evaluation procedure; there were no written, objective standards or tests.

District managers forwarded recommendations from general managers to defendant's home office in Salt Lake City for approval or disapproval. During the time of plaintiff's employment, the district manager supervising the stores in which he worked was Arnold Ford. Ford testified that he consistently supported recommendations made by the general managers under his supervision.

II

The trial court's findings on plaintiff's claim were essentially as follows:

Plaintiff, a Mexican-American, began his employment with defendant as a clerk at defendant's Store No. 22 during the 1965 Christmas season. In January 1966 plaintiff accepted full-time employment as a clerk in that store. Store 22's general manager was then Gus Roe. Plaintiff worked through 1966 as a sales clerk. During 1966 Eldred Jensen became general manager of Store No. 22. In late 1966 or early 1967 plaintiff was involuntarily reassigned by Jensen to the shipping department.

In February 1968 Robert Benedict, general manager of defendant's Store No. 50, told Jensen that he needed a shipping clerk. Jensen reassigned plaintiff to Store No. 50. Plaintiff spent one year in the shipping department at Store No. 50, and in early 1969 plaintiff requested and received reassignment to the sales floor.

Benedict eventually recommended plaintiff to Ford for promotion. In November 1969 plaintiff was named lobby manager and reassigned to Store No. 22 where Jensen was still general manager. In April or May 1970, Store No. 22's then assistant general manager was replaced by Coleman Nay. Jensen and Nay worked as general manager and assistant general manager over plaintiff until plaintiff was fired as lobby manager.

On September 17, 1971, plaintiff was called to Jensen's office to meet with Ford and Jensen. Ford ordered plaintiff to surrender his keys to the store and informed him that he was no longer a lobby manager. Ford testified that these actions terminated plaintiff's employment with defendant. ³ Ford, Nay, and Jensen had participated in the decision to dismiss plaintiff. Nay and Jensen both told Ford that plaintiff was performing poorly as lobby manager. Based on their opinions, Ford recommended plaintiff's termination to his superiors. With their approval, Ford dismissed plaintiff. When plaintiff asked why he was being fired, Jensen told him that, in his opinion, he would never be able to handle the position of general manager at one of defendant's stores. Plaintiff asked for reassignment to another position in defendant's organization, and Ford sent him to work in defendant's central Denver warehouse.

Plaintiff remained as a warehouseman with defendant until his resignation on June 8, 1973. Plaintiff gave as the reason for his resignation his inability to support his family on his wages. Plaintiff held part-time jobs until he found full-time employment with Gold Star Beef Company. A 1975 on-the-job back injury at Gold Star, however, resulted in his temporary total disability and he currently has a partial disability. Plaintiff now resides in Mesa, Arizona, in part for health reasons.

In explaining its rulings, the trial court first found that defendant failed to articulate a legitimate, nondiscriminatory reason for plaintiff's dismissal to rebut the inference raised by plaintiff's prima facie showing of discrimination. The court based this finding upon its judgment that the testimony of defendant's witnesses Jensen and Nay as to a nondiscriminatory reason for their recommendations of dismissal was not credible. The court found that Jensen's testimony that plaintiff lacked good business sense was both unsupported and highly subjective. The specifics of Nay's testimony that plaintiff simply did not do his job were contradicted by plaintiff's witnesses, whom the court found to be credible, and defendant's attempts to impeach plaintiff were unsuccessful. Thus, the court found that the testimony offered by defendant purporting to establish a legitimate, nondiscriminatory reason for plaintiff's dismissal was not credible. (I R. 81-83).

Alternatively, the court found that even if defendant did articulate a legitimate reason for plaintiff's dismissal, plaintiff had rebutted the defense case by showing that defendant discriminated against him in making its decision to discharge him. The court found that although testimony from defendant's numerous Hispanic witnesses established that defendant had no company-wide policy of discrimination against Hispanics, this was of little comfort to plaintiff for it appeared that discrimination "played a major part in his firing-demotion," I R. 84, and he was not claiming a company-wide policy of discrimination. The court found as a fact that both Jensen and Nay used racial slurs in referring to Blacks, that both of them made ethnic jokes, some of which were directed at plaintiff and his wife, and that Nay had a history of problems with members of minority groups, both employees and customers. Defendant contested much of plaintiff's evidence regarding these matters, but the court resolved questions of credibility in favor of plaintiff and ultimately found that Jensen and Nay made their recommendations that plaintiff be dismissed as a result of their prejudice against him as a Mexican-American. (I R. 83-85).

The court's findings regarding the circumstances of plaintiff's dismissal buttressed the inference of discrimination. Neither Jensen nor Nay discussed with plaintiff the deficiencies in his performance which they said were responsible for his dismissal; none of defendant's officers or supervisory employees warned defendant that his position was in jeopardy; and plaintiff received no reprimand, warning, or counselling on how to improve. Hence the court determined that defendant's claims of deficiencies in plaintiff's performance were merely pretextual.

The trial court found that the proof adduced to establish defendant's liability on the Title VII claim was also sufficient to establish his Sec. 1981 claim. In some instances the discriminatory intent required to establish Title VII liability is different than that required to establish Sec. 1981 liability. For a Title VII claim of disparate impact of employment practices, the required intent is less than that for a Sec. 1981 claim. The court found that for this disparate...