Opinion
No. C99-2097
January 19, 2001.
ORDER
This matter comes before the court pursuant to defendant ALLTEL Communications Inc.'s October 31, 2000 motion for summary judgment (docket number 29). For the reasons set forth below, the defendant's motion for summary judgment is granted in part and denied in part.
I. Background Facts
ALLTEL is a communications-related corporation which includes the sale of wireless telephone service and equipment. Annette Galloway applied for a sales position at ALLTEL's Waterloo store during the Fall of 1997. Galloway is a Mormon. Chad McFadden, the manager of the Waterloo store, interviewed Galloway. During her interview, Galloway mentioned that she was active in her church and preferred not to work on Sundays. McFadden consulted with the then-Vice President and General Manager of the East Iowa Region, Bobby Stearns, and later told Galloway that her request to forego working on Sundays would not be a problem.
ALLTEL hired Galloway on October 6, 1997 as a customer service representative (CSR) in the Waterloo store. Galloway sold wireless ALLTEL telephone equipment and telephone service packages, and collected payments from customers. When she was first hired, McFadden was Galloway's immediate supervisor. Her sales figures during this time were very high. McFadden also assigned Galloway additional duties, including inventory and scheduling duties. In August 1998, Leslie George replaced McFadden as the Waterloo store manager and became Galloway's immediate supervisor. When George became the new store manager, she changed some of the prior work rules and practices. For example, George assumed the scheduling duties McFadden had assigned to Galloway, she instituted a "no denim" dress code, and she removed a bulletin board where McFadden had posted CSR sales figures in order to promote competition.
Galloway was fired from her position on November 5, 1998. At the time of her termination, she was the second highest sales representative in her region. Galloway filed this suit alleging she was terminated on the basis of her religion in violation of 42 U.S.C. § 2000e et seq. and Iowa Code Chapter 216, and on the basis of her age in violation of Iowa Code Chapter 216. ALLTEL moves for summary judgment on all claims. Galloway does not resist ALLTEL's motion for summary judgment on the age discrimination claim.
II. Disputed Facts
During September 1998, while Leslie George was out of town, Galloway and another CSR, Connie Jensen, had a verbal dispute in the store lobby. The parties dispute the actual extent of the altercation. However, apparently a customer was unable to reach Galloway by telephone and therefore chose to speak to Jensen. After the customer left, Galloway and Jensen argued about how the situation had been handled. When George learned about the dispute, she instructed Galloway and Jensen to meet and resolve their differences in private. After meeting with each other, Galloway told George that they had not been able to resolve their differences. Galloway and Dallas Martz, another CSR at the Waterloo store, also reportedly had two verbal confrontations regarding Martz' suspicions that Galloway was reading his e-mail and about the storage of personal items in the employee's personal cabinets.
In the Fall of 1998, George claims that Galloway improperly inventoried a TracFone in violation of company policy. TracFones are wireless telephones which use minutes purchased with a pre-paid card, similar to a pre-paid long-distance calling card. Once a card is purchased by a customer, a code number impressed on the card must be scratched off and the card must be activated by calling a central ALLTEL number. TracFones are treated as inventory and are only to be removed from a store's stock by releasing the card as sold merchandise. When Martz discovered missing cards in the store's inventory, Galloway produced one of the missing cards. Galloway claims another sales associate called from a Wal-Mart kiosk and asked for a TracFone code number to sell to a customer, and that Galloway then placed the card in her purse. ALLTEL claims that Galloway did not release the card from inventory, which it claims violated company policy. ALLTEL also claims that Galloway improperly inventoried a damaged pager that had been returned to the Waterloo store.
On approximately October 10, 1998, ALLTEL sent Martz, Galloway and another CSR, Sandy Augustine, to a training seminar in Chicago, Illinois. On one evening, several ALLTEL employees, including Martz, Galloway and Augustine, ate dinner together at a hotel restaurant. During their dinner, Galloway remarked that she did not drink alcoholic beverages, apparently for religious reasons. Galloway also asked to use the company van to visit a local Mormon Temple, and claims that Martz made a remark to the effect of "I know about you guys and your funny little hats" when he found out about her planned visit to the temple. Galloway claims later that week after returning to Iowa, she reminded Leslie George that she did not want to work on Sundays when the store had special Christmas hours because she wanted to attend church. Galloway claims that when she said this to George, Rick Milks, an assistant store manager responded, "ah, church smirch." Galloway claims that she then talked to Leslie George about Milks' comments and the Chicago trip, and that she expected George to do something about the situation. George said she would speak to Martz about Galloway's concerns.
ALLTEL also alleges that Galloway made inappropriate rate changes to her husband's account. ALLTEL charges customers $10 to change rate plans, but the company has discretion to waive the charge as a retention tool to keep existing customers. Leslie George claims that Galloway used promotions on her husband's account that were typically reserved for attracting new customers and did not charge the $10 change fee. ALLTEL also claims that Galloway violated the company's 90-day disconnect-reconnect policy by allowing two customers to disconnect service and then reconnect a new line within 90 days.
After learning of the problems with these accounts, George contacted her superiors. At this time, Mike Reasoner was Vice President and General Manager of the East Iowa Market and Donney Jackson was the Retail Sales Manager who managed the Waterloo store. Leslie George reported to Donney Jackson, who then reported to Mike Reasoner. Reasoner was ultimately responsible for all termination decisions in the Waterloo store. Donney Jackson reviewed the account information and believed Galloway had violated ALLTEL policy. George informed Reasoner of the account problems, Galloway's interpersonal conflicts with co-workers, and the inventory problems. Reasoner asked George to document the issues. George submitted a three-page memorandum outlining her concerns. After Reasoner reviewed the information and talked to George and Jackson, he recommended to the company's human resources division that Galloway be terminated. Reasoner conferred with the Area Director for Human Resources Don Daniels, then talked with George and Jackson. Reasoner then decided to discharge Galloway. George drafted a termination memorandum dated November 4, 1998. George alleges that she met with Galloway to give Galloway a chance to explain her actions. When she did not provide sufficient reasons, George and Jackson signed the termination memorandum and gave it to Galloway on November 5, 1998. Following her termination, Galloway eventually stopped looking for work and enrolled as a full-time student at the University of Northern Iowa.
III. Summary Judgment Standard
A motion for summary judgment may be granted only if, after examining all of the evidence in the light most favorable to the nonmoving party, the court finds that no genuine issues of material fact exist and that the moving party is entitled to judgment as a matter of law. Kegel v. Runnels, 793 F.2d 924, 926 (8th Cir. 1986). Once the movant has properly supported its motion, the nonmovant "may not rest upon the mere allegations or denials of [its] pleading, but . . . must set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e). "To preclude the entry of summary judgment, the nonmovant must show that, on an element essential to [its] case and on which [it] will bear the burden of proof at trial, there are genuine issues of material fact." Noll v. Petrovsky, 828 F.2d 461, 462 (8th Cir. 1987) (citing Celotex Corp. v. Catrett, 477 U.S. 317 (1986)). Although "direct proof is not required to create a jury question, . . . to avoid summary judgment, `the facts and circumstances relied upon must attain the dignity of substantial evidence and must not be such as merely to create a suspicion.'" Metge v. Baehler, 762 F.2d 621, 625 (8th Cir. 1985) (quoting Impro Prod., Inc. v. Herrick, 715 F.2d 1267, 1272 (8th Cir. 1983)). In applying these standards, the court must give the nonmoving party the benefit of all reasonable inferences to be drawn from the evidence. Krause v. Perryman, 827 F.2d 346, 350 (8th Cir. 1987). "Because employment discrimination cases frequently turn on inferences rather than direct evidence, the court must be particularly deferential to the party opposing summary judgment." Bell v. Conopco, Inc., 186 F.3d 1099, 1101 (8th Cir. 1999).
IV. Religious Discrimination
Galloway argues she was subjected to disparate treatment on the basis of her religion in violation of Title VII. Galloway's claim is analyzed under the three-step burden-shifting framework set forth inMcDonnell Douglas v. Green, 411 U.S. 792 (1973). First, Galloway must establish a prima facie case of religious discrimination. She must show that she was "treated less favorably than others because of her religious beliefs. In a disparate treatment case, the plaintiff must prove that she is a member of a protected class and must compare her treatment to that of a similarly situated member of a non-protected class." Mann v. Frank, 7 F.3d 1365, 1370 (8th Cir. 1993) (citation omitted). Once a plaintiff establishes the prima facie case, the employer must then rebut the plaintiff's prima facie case with evidence of a legitimate, non-discriminatory reason for taking the adverse employment action.McDonnell Douglas, 411 U.S. at 802-03. "The employer's explanation of its action must be `clear and reasonably specific,' but the employer does not have to prove to the court that it was motivated by the proffered reason."White v. McDonnell Douglas Corp., 985 F.2d 434, 436 (8th Cir. 1993) (quoting Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 254 (1981)) (internal citations omitted). If the employer can rebut the plaintiff's prima facie case, the plaintiff must show "sufficient admissible evidence from which a rational factfinder could find that the [employer]'s proffered nondiscriminatory reason was either untrue or not the real reason, and that intentional discrimination was the real reason." Lang v. Star Herald, 107 F.3d 1308, 1311 (8th Cir. 1997) (applying McDonnell Douglas framework to sex discrimination under Title VII).
1. Galloway's Prima Facie Case
ALLTEL argues that Galloway is unable to establish a prima facie case of religious discrimination because she cannot show that she was treated worse than similarly-situated employees outside of her protected status. Galloway, however, has raised a factual dispute regarding how she was treated compared to other similarly-situated employees. Galloway contends that the situations in which Leslie George claimed that Galloway violated ALLTEL policy were situations in which no policy was violated, or no policy existed. Galloway claims that her handling of the TracFone did not violate company policy. She claims similar transactions were done by other CSRs who were not fired and that George did not even speak to the other party involved in this transaction, Tim Eckert. She also claims that any allegations of a fraudulent transaction are false because the customer to whom Tim Eckert sold the TracFone paid for it and thus the TracFone was properly released from inventory.
Galloway also claims no policy prohibited her from waiving rate plan changes or providing promotions to her husband's account. She alleges that rate plan changes were customary and CSRs were permitted to waive changes for all customers, including family members. In regards to communication difficulties Galloway had with co-workers, Galloway alleges that progressive discipline was not followed to warn her about her difficulties with communicating to other employees. Connie Jensen and Dallas Martz were not disciplined for their communication difficulties with Galloway, and Martz was never disciplined for the comments he made in Chicago about Galloway's religion.
ALLTEL also argues that Galloway cannot establish a prima facie case of religious discrimination because Reasoner, Jackson and Daniels did not know Galloway was Mormon when the decision to terminate Galloway was made. It argues that unlike other protected classes, religion is not readily discernable; thus, the decision-makers must have known of Galloway's protected status before her termination. However, Galloway's immediate supervisor, Leslie George, was aware of Galloway's religion because Galloway had told her she did not wish to work on Sundays and because she had complained about negative remarks made to her by co-workers. George then made the recommendation that Galloway be terminated. Ms. George set the process in motion. But for her conduct, plaintiff would not have been terminated. If motivated by religious discrimination, it is actionable under Title VII. Galloway has provided a factual dispute regarding her treatment compared to other non-Mormon employees.
2. ALLTEL's Reason for Terminating Galloway
Having established a prima facie case, the burden shifts to ALLTEL to present evidence of a legitimate, non-discriminatory reason for discharging Galloway. "The defendant need not persuade the court that it was actually motivated by the proffered reasons. It is sufficient if the defendant's evidence raises a genuine issue of fact as to whether it discriminated against the plaintiff." Burdine, 450 U.S. at 254 (citation and footnotes omitted). ALLTEL claims it terminated Galloway because she violated company policies. It claims Galloway improperly inventoried a TracFone and a damaged pager, made improper rate changes to Josh Galloway's account, and violated company policies regarding disconnecting and reconnecting phone services.
3. Evidence of Pretext
Because ALLTEL has presented a legitimate, non-discriminatory reason for the discharge, the presumption of discrimination disappears and Galloway must show "sufficient admissible evidence from which a rational factfinder could find that the [employer]'s proffered nondiscriminatory reason was either untrue or not the real reason, and that intentional discrimination was the real reason." Lang, 107 F.3d at 1311. ALLTEL claims that Galloway is unable to present evidence that her termination was a pretext for religious discrimination. ALLTEL claims that Leslie George had specific information from which she actually believed that Galloway had violated company policy. ALLTEL claims Galloway should have been fired because she had inappropriately disconnected and reconnected lines on the Sanache and Wolfe accounts; she applied promotional minutes on her husband's account without charging the change in service fee; she had violated inventory policy with the TracFone card and a pager; and she had communication difficulties with co-workers. Galloway claims these reasons were pretextual.
Leslie George reviewed the Sanache and Wolfe accounts and believed that Galloway had inappropriately disconnected and reconnected phone lines on these accounts. Donney Jackson reviewed these accounts and also believed they showed improprieties warranting discipline. In its motion for summary judgment, ALLTEL admits that Mr. Sanache may have changed his telephone number and not disconnected his line; therefore, Galloway did not in fact violate the disconnection-reconnection policy. However, ALLTEL claims what actually happened is irrelevant because, based on information on the computer, Leslie George believed company policy had been violated. On the other hand, Galloway contends George failed to review all of the computer screens and that a review of the entire account would have revealed the true nature of the transaction. Regarding the Wolfe account, Galloway claims that she gave Ms. Wolfe a new phone when she lost her original phone. When the original phone was found, service was disconnected to the new phone and no policy was violated.
Galloway has provided sufficient evidence from which the fact-finder could infer ALLTEL's reasons were pretextual. In Reeves v. Sanderson Plumbing Products, Inc., ___ U.S. ___, 120 S.Ct. 2097 (2000), the Supreme Court addressed the quantum of evidence necessary to create a jury question at this stage of the McDonnell Douglas burden-shifting analysis. It held that "a plaintiff's prima facie case, combined with sufficient evidence to find that the employer's asserted justification is false, may permit the trier of fact to conclude that the employer unlawfully discriminated."Id. at 2109. This statement in Reeves made clear that additional, independent evidence of discriminatory animus is not always required to support an inference of discrimination, and that evidence supporting the plaintiff's prima facie case and exposing as pretextual the employer's reason for an adverse employment action should be considered, along with any other evidence that may exist, in determining whether an inference of discrimination has been raised.
The Reeves case involved an age discrimination claim under the Age Discrimination in Employment Act (ADEA) and arose in the context of a judgment as a matter of law following a trial on the merits. Reeves, 120 S.Ct. at 2103-04. The Court applied the McDonnell Douglas framework to the plaintiff's age discrimination claim. Id. at 2105. Furthermore, the Court made it clear that its McDonnell Douglas analysis under the Reeves case also applies to motions for summary judgment. See id. at 2110.
Fisher v. Pharmacia Upjohn, 225 F.3d 915, 922 (8th Cir. 2000). Galloway has provided sufficient facts from which the fact-finder could infer that she was fired for discriminatory reasons. Galloway was the second-highest sales associate in her region at the time she was terminated. She has offered evidence that the improprieties alleged by Leslie George were false and that other employees were treated differently. The defendant's reliance on Ms. George's good faith belief is simply too subjective for summary judgment.
V. Retaliation
ALLTEL argues that Galloway cannot establish the elements of a prima facie retaliation claim. The prima facie elements of a retaliation claim are: "(1) the plaintiff filed a charge of harassment or engaged in other protected activity; (2) the plaintiff's employer subsequently took adverse employment action against the plaintiff; and (3) the adverse action was causally linked to the plaintiff's protected activity." Cross v. Cleaver, 142 F.3d 1059, 1071 (8th Cir. 1998); Smith v. Riceland Foods, Inc., 151 F.3d 813, 818 (8th Cir. 1998). After the plaintiff establishes the prima facie case, "[a] defendant must then rebut the plaintiff's prima facie case by presenting evidence of a legitimate, non-retaliatory reason for the action it took against the plaintiff." Smith, 151 F.3d at 818 (citing Coffman v. Tracker Marine, 141 F.3d 1241, 1245 (8th Cir. 1998)). "[I]f the employer meets that burden, the presumption of retaliation disappears. The factfinder is then `left to determine if the employee presented evidence capable of proving that the employer's proffered reasons for termination were a pretext for illegal retaliation.'" Cross, 142 F.3d at 1071-72 (quoting Harris v. Secretary, U.S. Dep't of the Army, 119 F.3d 1313, 1318 (8th Cir. 1997)) (citations and alterations omitted).
Galloway argues that she acted in opposition to discrimination when she informed Leslie George of her arrangement with the previous store manager to not work on Sundays. She alleges that George told her "she was the manager now" and would manage the store as she chose. In addition, Galloway argues she was fired because she complained to George about the religious comments made to her by Dallas Martz and Rick Milks. ALLTEL argues that Galloway cannot establish a causal connection between this activity and her termination because Reasoner made the ultimate decision to terminate Galloway, not Leslie George. While Reasoner was the ultimate decisionmaker, Reasoner relied on information provided to him by Leslie George. Galloway has raised a factual dispute regarding the extent of George's investigation into whether Galloway in fact violated company policy.
Galloway alleges that the timing of her termination is sufficient to causally link her protected activity with her termination. Courts generally require the existence of "more than a temporal connection between protected activity and an adverse employment action . . . to show a genuine factual issue on retaliation . . . ."Buettner, 216 F.3d at 716. The Eighth Circuit has declined to specifically determine "whether temporal proximity alone would be sufficient to create an inference of a causal connection . . . ." Id.; Stuart v. General Motors Corp., 217 F.3d 621, 635 (8th Cir. 2000). Instead, courts consider the pretext state of theMcDonnell Douglas inquiry together with the temporal proximity of the adverse action. Id.; see also Hocevar v. Purdue Fredrick Co., 223 F.3d 721, 726 (8th Cir. 2000). Galloway was terminated after complaining to Leslie George about not wanting to work on Sundays and after complaining about disparaging remarks made by other employees. Galloway's personnel file did not contain any record of prior inappropriate behavior under the previous store manager and her sales figures had been exceptional. As discussed previously, Galloway has raised a factual dispute regarding a pretextual reason for her termination. Taken together, this is sufficient to establish a her retaliation claim.
VI. Mitigation of Damages
ALLTEL claims it is entitled to summary judgment on its affirmative defense that Galloway failed to mitigate her damages. An employee who has been wrongfully terminated has a duty to attempt to mitigate her damages. Henderson v. Simmons Foods, Inc., 217 F.3d 612, 617 (8th Cir. 2000). "The duty to mitigate `requires that the plaintiff use reasonable diligence in finding suitable employment and not refuse a position substantially equivalent to the one at issue. The defendant bears the burden of showing that there were suitable positions and that the plaintiff failed to use reasonable care in seeking them.'" Id. at 617-18 (quoting Denesha v. Farmers Insurance Exchange, 161 F.3d 491, 502 (8th Cir. 1998)). The employee is required to use reasonable diligence, but the law does not require her to be successful in her attempt. Id. at 618.
ALLTEL claims that Galloway failed to seek comparable employment, and that she should not be permitted to recover because she removed herself from the job market by enrolling in school full-time. At the time of her termination in November 1998, Galloway claims that she was on track to reach an income of approximately $60,000. Galloway had a high school education at the time. After her termination, Galloway alleges that she applied for a similar position with Iowa Wireless, but was not hired in part because of the circumstances surrounding her termination from ALLTEL. She was later offered a job in a sales position by USOP, but determined the position was not financially feasible because the commissions would have been approximately $15,000 and she would have had to travel without reimbursement. She then enrolled at the University of Northern Iowa in order to attain a bachelor's degree.
The general rule is that "[w]hen an employee opts to attend school, curtailing present earning capacity in order to reap greater future earnings, a backpay award for the period while attending school . . . would be like receiving a double benefit." Taylor v. Safeway Stores, Inc., 524 F.2d 263, 268 (10th Cir. 1975);Washington v. Kroger Co., 671 F.2d 1072, 1079 (8th Cir. 1982). The Eighth Circuit has recognized this general rule, but has declined to hold "that back pay either does or does not continue to run in every case of a plaintiff who has chosen to go to school full-time."Washington, 671 F.2d at 1079. Instead, the court has adopted a case-by-case determination of whether the employee's actions preclude a backpay award. Id. One court summed up the dilemma in which an employee is placed:
The employee can continue what has been a fruitless search for comparable employment, and hope that her employment claims will be successful. Or, the employee can go to school in an attempt to gain an education and marketable skills, risking the loss of back pay if her employment claims prove to be unsuccessful. The difficulty is exacerbated by the delay inherent in the deliberative processes of the judicial system. If the employee continues the fruitless search for employment and then loses the employment claim, she may have lost months or years in which she could have obtained marketable skills by returning to school. Because it is the employer's violation of the law that puts such an employee in this predicament, the former employee should be given some latitude by the courts in reviewing her post-termination actions.
Miller v. ATT, 83 F. Supp.2d 700, 707 (S.D.W. Va. 2000). The record indicates that Galloway did try to seek comparable employment on at least two occasions. The duty to mitigate does not require her to be successful. Henderson, 217 F.3d at 617. She enrolled in college in order to be able to achieve the same level of earning capacity she had while at ALLTEL. Her actions are sufficient to create a jury question on whether she use reasonable diligence in seeking comparable employment and the reasons for her college attendance.
VII. Punitive Damages
Title VII limits punitive damages "to cases in which the employer has engaged in intentional discrimination and has done so `with malice or with reckless indifference to the federally protected rights of an aggrieved individual.'" Kolstad v. American Dental Association, 527 U.S. 526, 529-30 (1999) (quoting 42 U.S.C. § 1981a (b)(1)). "The terms `malice' or `reckless indifference' pertain to the employer's knowledge that it may be acting in violation of federal law, not its awareness that it is engaging in discrimination." Id. at 535. In addition to "a showing of the requisite malice or reckless indifference on the part of certain individuals[,] the plaintiff must impute liability for punitive damages to the employer." Ogden v. Wax Works, Inc., 214 F.3d 999, 1008 (8th Cir. 2000) (citing Kolstad, 527 U.S. at 536-37). The Court declined to use strict agency principles to hold employers vicariously liable for punitive damages; instead, the Court held that "an employer may not be vicariously liable for the discriminatory employment decisions of managerial agents where these decisions are contrary to the employer's good-faith efforts to comply with Title VII." Kolstad, 527 U.S. at 545 (quotations omitted).
ALLTEL argues it cannot be held liable for punitive damages under the standard set forth in Kolstad because of its on-going efforts to comply with Title VII through its nondiscrimination policy and its providing employees with several channels to report discrimination. Galloway argues that the good-faith defense from Kolstad is inapplicable and relies on Deters v. Equifax Credit Information Services, Inc., 202 F.3d 1262 (10th Cir. 2000), for the premise that when a case is based on direct liability, the good faith defense does not apply. The plaintiff in Deters had been subjected to on-going sexual harassment and regularly complained to the highest managerial officer at her office. Id. at 1266-67. The highest ranking officer was also the person designated by the corporation to be responsible for enforcing the company's policy against discrimination.Id. at 1270-71. In addition, the corporate headquarters was aware of the on-going sexual harassment. Id. at 1271. The Tenth Circuit held that the good-faith defense in Kolstad was inapplicable because Kolstad involved vicarious liability, whereas Deters was premised on direct liability because the highest-ranking manager in charge of anti-discrimination policy knew of the harassment and failed to correct it.
Deters is not applicable in this case. Leslie George was the store manager, but Mike Reasoner was the ultimate decision-making authority. George was not the sole contact for receiving and processing harassment complaints. When Galloway was hired, she received the company's anti-discrimination policy. This policy stated that discrimination could be reported an immediate supervisor, the next level of management, or an associate contact representative through the human resources department. Galloway complained only to Leslie George and did not utilize any other channels to report to ALLTEL her concerns that she was being discriminated against. Even if Galloway could establish the requisite malice or deliberate indifference to her federally protected rights — which she has not attempted to show — she cannot impute liability to ALLTEL. She has not set forth any evidence suggesting that anyone other than Leslie George was aware of the discrimination she believed she had been subjected to. ALLTEL's efforts to comply with Title VII are sufficient under theKolstad good-faith defense to insulate it from punitive damages.
When Galloway was hired, the company was then known as 360 Communications. When ALLTEL acquired 360 Communications, it continued to apply a substantially identical anti-discrimination policy.
Upon the foregoing,
IT IS ORDERED
The defendant's October 31, 2000, motion for summary judgment (docket number 29) is denied as to all liability and compensatory damage issues and is granted with respect to the claim for punitive damages.