Wheeler v. Snyder Buick, Inc.

• Decision Date: 03 July 1986
• Docket Number: 84-2512,Nos. 84-2499,s. 84-2499
• Citation: 794 F.2d 1228
• Parties: 41 Fair Empl.Prac.Cas. 341, 41 Empl. Prac. Dec. P 36,507, 55 USLW 2079 Frances WHEELER, Plaintiff-Appellee, v. SNYDER BUICK, INC., Defendant-Appellant. Frances WHEELER, Plaintiff-Appellant, v. DOUBLE K, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1228

794 F.2d 1228

41 Fair Empl.Prac.Cas. 341,

41 Empl. Prac. Dec. P 36,507, 55 USLW 2079

Frances WHEELER, Plaintiff-Appellee, v. SNYDER BUICK, INC., Defendant-Appellant.

Frances WHEELER, Plaintiff-Appellant, v. DOUBLE K, INC., Defendant-Appellee.

Nos. 84-2499, 84-2512.

United States Court of Appeals Seventh Circuit.

Argued Feb. 27, 1985.

Decided July 3, 1986.

Danney E. Glass, Fine Hatfield Sparrenberg & Fine, Evansville, Ind., for plaintiff.

Frank R. Hahn, Cedric Hustace, Bowers Harrison Kent & Miller, Evansville, Ind., for defendants.

Before ESCHBACH, Senior Circuit Judge, FLAUM, Circuit Judge, and DOYLE, Senior District Judge. ^*

JAMES E. DOYLE, Senior District Judge.

Frances Wheeler brought this action alleging defendant Snyder Buick, Inc. (Snyder) discharged her on account of her sex, thereby violating Title VII, 42 U.S.C. Sec. 2000e et seq. A bench trial in the district court resulted in a judgment against Snyder, but the court absolved from liability Double K, Inc., the corporate successor to Snyder. On this appeal, Snyder disputes the determination of liability under Title VII and also the court's calculation of backpay awarded to Wheeler. Wheeler appeals from the court's holding that Double K is not liable to Wheeler for the unlawful actions of Snyder.

Facts

In its written opinion, the district court found the facts as follows:

Wheeler became a new car salesperson at Snyder in June, 1977, where she remained until discharged on January 13, 1979. During her tenure, Wheeler was the only female salesperson at Snyder; previously, two other females had been salespersons briefly.

Wheeler was a capable salesperson. Her sales of new cars earned her several awards, including "Salesman of the Year" in 1978. However, Wheeler was not an ideal employee. Her aggressiveness led her colleagues to suspect she took their sales prospects at times, and Wheeler appeared to resent the requirement that management had to approve all car deals. Her habits of not keeping her demonstrator car clean and of smoking while waiting on customers also annoyed her employer. As a result, there was friction between Wheeler and some of her colleagues, including Timothy Lutz, leading to an "antagonistic atmosphere" on the sales staff.

Wheeler's actions were not wholly responsible for the antagonistic environment. Lutz, the supervisor who fired Wheeler, "barely concealed his resentment about Wheeler's presence on the sales staff;" he possessed an "animus toward women in the new car business." Shortly before his promotion from salesperson to sales manager, Lutz stated to Jon Boasso, a former Snyder employee, that upon becoming sales manager his first task was to get rid of the " 'dirty slut working as a car salesman.' " Lutz made other negative statements such as "there was 'no damn room in the new car business for a woman' and that car sales was 'a man's field.' " Four witnesses testified Lutz had made anti-female remarks in their presence, and Lutz, who testified, never denied making any of them. ¹

Former employee Boasso, whose duties at Snyder included appraising customers' trade-in automobiles, was instructed by Jack Hughes, another Snyder employee, to lower appraisals of Wheeler's customers' potential trade-ins by $250 to $400.

In the summer of 1978, the Snyder sales staff began to suspect someone was leaking customer information to a competitor, Hendrickson and Sons; in particular, there had been significant losses of sales to Hendrickson salesperson Jack Tucker, a former Snyder employee and a friend of Wheeler. In one instance "Tucker did receive customer information from Wheeler," but otherwise Tucker did not obtain the names of prospective customers from Wheeler.

In January 1979, Michael Tooke, a Snyder salesperson and brother-in-law of Lutz, devised a scheme to catch Wheeler passing information to a competitor. Tooke filled out a phone customer information card listing the name and phone number of a friend of Tooke's, Mark Calvin. Calvin was not in the market for a new car. Tooke placed the card on the showroom desk and asked Wheeler to watch the desk temporarily. Calvin received a phone call that evening from someone identifying himself as Jack Tucker, but there was no evidence Tucker made such a call. ² Tooke informed Lutz of the "Tucker" call to Calvin, and the next day Lutz fired Wheeler after accusing her of passing Calvin's name to Tucker. Wheeler denied the allegation, and Snyder never investigated Lutz's accusation.

Following her discharge from Snyder, Wheeler was hospitalized briefly, and then experienced a personal tragedy, the death of her son. Had she had a job to return to, Wheeler's period of grief would have been reduced. Wheeler kept her resume updated, and she applied for jobs both in person and by responding to advertisements. She did not seek employment in other new car establishments in Evansville; she had a fear of being blackballed. The fear was legitimate. There were few female new car salespersons in Evansville. Wheeler worked some as a substitute teacher and in the insurance business, which she left in December, 1981. Her insurance jobs "never netted her a living wage," and thus did not constitute employment comparable to her car sales position. Had Wheeler remained with Snyder, based on her seniority she would have been laid off from July 23, 1980 to March 4, 1981.

On May 2, 1983, Snyder Buick sold all or nearly all of its assets to Double K, Inc. The transaction included no purchase of stock. Double K proceeded to employ many of the persons who had been employed by Snyder, and Double K continued to engage in the business of selling automobiles. Double K represented an entirely different ownership; the previous owners had no control over the business entity after the sale of assets. At the time of trial, Snyder remained a viable corporate entity with a net value of approximately $196,000. At the time of the transaction, Double K had no notice or knowledge of Wheeler's claim against Snyder.

District Court Decision

In holding that Snyder had discriminated against Wheeler on account of her sex, the district court followed the analysis established in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973). The court decided Wheeler had established a prima facie case of discriminatory discharge by showing "that she belongs to a protected class, that she was qualified for the job in question, and performing as normally required, that she was discharged, and that she was replaced by a nonprotected class member." The court decided that Snyder had articulated legitimate business reasons for the discharge, namely, Wheeler's passing of customer information to a competitor--or Snyder's good faith belief she had done so--and the personality conflict between Wheeler and her co-workers and supervisor. The court then proceeded to reject these articulated nondiscriminatory reasons as pretexts for discrimination. First, no evidence at trial established Tucker made the alleged incriminating phone call to Calvin; in discharging Wheeler, Snyder relied on a suspect report. Second, although "Wheeler was not a perfect employee ... any personality conflict which arguably developed was created by the overt hostility and scurrilous behavior manifested by Lutz."

The district court refused to impose liability on Double K. The lack of notice to Double K prevented the imposition of successor liability under the test established in Equal Employment Opportunity Commission v. MacMillan Bloedel Containers, Inc., 503 F.2d 1086 (6th Cir.1974) (applying successorship liability doctrine to Title VII context). Moreover, the facts fit none of the exceptions to the general common law rule that an asset purchase for cash does not impose liability on the successor corporation for liabilities of the seller corporation. Travis v. Harris Corp., 565 F.2d 443, 446 (7th Cir.1977). According to the district court, the exception arguably closest--continuity of the business enterprise--is inapplicable because while many Snyder employees remained and became employees of Double K, the ownership and overall control of the two corporations were entirely distinct.

The district court's refusal to hold Double K liable necessarily limited the remedies available to Wheeler: first, reinstatement was unavailable; and second, May 2, 1983, the date of the purchase, marked the end of Wheeler's backpay award.

The court awarded backpay to Wheeler covering the entire period between her termination, January 13, 1979, and May 2, 1983, the date of the purchase of assets, except for the one week in January 1979 when she was hospitalized and the period in which Wheeler would have been laid off (July 23, 1980 to March 4, 1981). The court calculated the amount of backpay to which Wheeler was entitled by inferring that had she remained at Snyder during that period, she would have continued to receive the proportion of total Snyder sales commissions she earned in 1978--28.8%. Wheeler also received pension and health insurance payments. The total damages awarded, excluding attorney fees and costs, were $49,405.04.

Title VII Violation

Snyder challenges, on a number of grounds, the district court's conclusion that Wheeler's termination was intentionally discriminatory. Since "a finding of intentional discrimination is a finding of fact," Anderson v. City of Bessemer City, N.C., 470 U.S. 564, 105 S.Ct. 1504, 1511, 84 L.Ed.2d 518 (1981), under Fed.R.Civ.P. 52(a) we may not overturn it unless clearly erroneous. Moreover, the conclusory finding of discrimination is itself based on findings of fact, generally involving credibility determinations made by the court. Under Rule 52 these credibility-based factual determinations require "even greater deference" than do findings not based on credibility: "when a trial judge's finding is based on his decision to credit the testimony of one of two or more witnesses, each of whom has told...