Jordan v. Shaw Industries Inc ( 1997 )


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  • UNPUBLISHED
    UNITED STATES COURT OF APPEALS
    FOR THE FOURTH CIRCUIT
    JANICE F. JORDAN,
    Plaintiff-Appellee,
    v.                               No. 96-2189
    SHAW INDUSTRIES, INCORPORATED,
    Defendant-Appellant.
    E. A. MYERS, JR.,
    Plaintiff-Appellee,
    v.                               No. 96-2190
    SHAW INDUSTRIES, INCORPORATED,
    Defendant-Appellant.
    RICHARD A. JENSEN,
    Plaintiff-Appellee,
    v.                               No. 96-2191
    SHAW INDUSTRIES, INCORPORATED,
    Defendant-Appellant.
    MICHAEL JACOBS,
    Plaintiff-Appellee,
    v.                               No. 96-2192
    SHAW INDUSTRIES, INCORPORATED,
    Defendant-Appellant.
    JANICE F. JORDAN,
    Plaintiff-Appellee,
    v.                                                             No. 96-2371
    SHAW INDUSTRIES, INCORPORATED,
    Defendant-Appellant.
    RICHARD A. JENSEN,
    Plaintiff-Appellant,
    v.                                                             No. 96-2373
    SHAW INDUSTRIES, INCORPORATED,
    Defendant-Appellee.
    Appeals from the United States District Court
    for the Middle District of North Carolina, at Winston-Salem.
    N. Carlton Tilley, Jr., District Judge.
    (CA-93-542-6, CA-93-543-6, CA-93-544-6, CA-93-545-6,
    CA-93-542-6, CA-93-544-6)
    Argued: October 2, 1997
    Decided: November 26, 1997
    Before LUTTIG and MOTZ, Circuit Judges, and MICHAEL,
    Senior United States District Judge for the
    Western District of Virginia, sitting by designation.
    _________________________________________________________________
    Affirmed by unpublished per curiam opinion.
    _________________________________________________________________
    COUNSEL
    ARGUED: Charles Daniel Barrett, EDWARDS, BALLARD,
    CLARK, BARRETT & CARLSON, P.A., Winston-Salem, North
    2
    Carolina, for Appellant. Norwood Robinson, Carl Ray Granthan, Jr.,
    ROBINSON & LAWING, L.L.P., Winston-Salem, North Carolina,
    for Appellees. ON BRIEF: Kenneth P. Carlson, Jr., Jonathan W. Yar-
    brough, EDWARDS, BALLARD, CLARK, BARRETT & CARL-
    SON, P.A., Winston-Salem, North Carolina, for Appellant. H.
    Stephen Robinson, ROBINSON & LAWING, L.L.P., Winston-
    Salem, North Carolina, for Appellees.
    _________________________________________________________________
    Unpublished opinions are not binding precedent in this circuit. See
    Local Rule 36(c).
    _________________________________________________________________
    OPINION
    PER CURIAM:
    I. CHRONOLOGY
    A. Factual
    These consolidated age discrimination, sex discrimination and
    common law fraud actions arise out of the merger of two large,
    national carpet manufacturers and distributors. In 1992, Shaw Indus-
    tries, Inc. ("Shaw") purchased Salem Carpet Mills, Inc. ("Salem").
    Prior to the merger, the four plaintiffs were vice-presidents at Salem.
    E.A. Myers ("Myers"), Richard A. Jensen ("Jensen") and Michael
    Jacobs ("Jacobs") were divisional vice-presidents ("DVP's") and
    Janice F. Jordan ("Jordan") was vice-president of the outlet division.
    The plaintiffs and Shaw's other employees first learned of the cor-
    porate merger proposal in February 1992 when the news was
    announced to all Salem employees. Shaw took control of much of
    Salem's business at this point although Salem's shareholders did not
    approve the merger until late May 1992. During this time, Kim Holm,
    Salem's executive vice-president, and Ernie Ferrell, Salem's senior
    vice-president, acted as liaisons between Shaw and Salem manage-
    ment. Ms. Holm and Mr. Ferrell repeated reassurances from Shaw
    3
    management that the plaintiffs and other Salem employees would
    retain their jobs after the merger.
    At one point before the merger approval, Holm dissuaded Jacobs
    from pursuing an employment opportunity with a third party
    employer telling Jacobs that he "had a job at Shaw." Also during this
    time, Robert Shaw, Chief Executive Officer ("CEO") of Shaw, told
    Ms. Jordan that all Salem employees, except Salem's CEO, would
    have jobs at Shaw after the merger. Later, Mr. Jensen, Mr. Myers, and
    Mr. Jacobs attended a group meeting during which Robert Shaw wel-
    comed them all to the Shaw company and explained that he thought
    that past decisions to fire employees after corporate mergers had been
    mistakes. The plaintiffs understood from these comments that they
    would have jobs with Shaw after the merger.1
    Following the May 31, 1992 shareholder approval of the merger,
    meetings for the former Salem DVP's and Shaw regional vice-
    presidents ("RVP's") were held in Dalton, Georgia at Shaw's head-
    quarters. Each plaintiff was given an itinerary for the week and told
    to plan to stay in Dalton for up to four days. Each plaintiff, however,
    was told to come first to Salem's office in Ringgold, Georgia on June
    1 before going on to Dalton; no plaintiff was told of the reason for
    the side trip. Upon arriving in Ringgold, each plaintiff was fired by
    Randy Merritt, Shaw's Vice-President of Sales, and Elbert Shaw,
    Shaw's Director of Human Resources.
    B. Procedural
    On September 13, 1992, Ms. Jordan, Mr. Myers, Mr. Jensen, and
    Mr. Jacobs filed four separate complaints against Shaw Industries and
    Robert Shaw, individually. Each complaint alleged, inter alia, age
    discrimination in violation of the Age Discrimination and Employ-
    _________________________________________________________________
    1 As well, after the merger proposal was announced, plaintiffs Jensen,
    Jacobs, and Jordan traveled to Las Vegas, Nevada to attend a carpet man-
    ufacturers convention. During the convention, Vance Bell, Shaw's Vice-
    President of Marketing, invited Mr. Jacobs to attend meetings with
    Shaw's sales personnel. During the same convention, Robert Shaw, CEO
    of Shaw Industries, told Ms. Jordan that all Salem employees, save its
    CEO, would have jobs with Shaw after approval of the merger.
    4
    ment Act ("ADEA"), 
    29 U.S.C. § 621
     et seq., common law fraud,
    and, in the case of Ms. Jordan, sex discrimination in violation of Title
    VII of the 1964 Civil Rights Act ("Title VII"), 42 U.S.C. § 2000e et
    seq.2
    The four cases were consolidated for a bifurcated trial on liability
    and damages held January 8, 1996 to February 9, 1996. The jury
    returned a verdict finding Shaw liable to all plaintiffs for age discrim-
    ination and fraud, and liable to Ms. Jordan for sex discrimination. As
    to damages, the jury found that Shaw had wilfully violated the ADEA
    and awarded back pay in the amounts of $219,661 to Ms. Jordan,
    $242,457 to Mr. Myers, $436,583 to Mr. Jensen, and $351,859 to Mr.
    Jacobs. On the fraud claims, the jury awarded compensatory damages
    in the amounts of $32,000 to Ms. Jordan, $12,000 to Mr. Myers,
    $50,750 to Mr. Jensen, and $2500 to Mr. Jacobs; the jury also
    awarded each plaintiff $1,222,250 in punitive damages. Finally, as to
    Ms. Jordan's Title VII claim, the jury awarded her $57,000 in com-
    pensatory damages and $344,000 in punitive damages.
    In July 1996, the court awarded the plaintiffs liquidated damages
    under the ADEA in amounts equal to the jury's award of back pay.
    Plaintiffs' claims for ADEA front pay were denied and Ms. Jordan
    and Mr. Jacobs were ordered reinstated with Shaw. By Order and
    Memorandum Opinion, the court on August 13, 1996 denied, in part,
    Shaw's three post trial motions (1) for judgment as a matter of law,
    (2) to alter or amend the judgment, and (3) for a new trial. Shaw's
    instant appeal is from this Order.
    By the same August 13, 1996 Order, the court also directed that the
    jury verdict on Ms. Jordan's fraud claim be set aside, judgment
    vacated, and the claim dismissed under Georgia law because of Ms.
    Jordan's status as an at-will employee without a written contract; that
    the jury's award of compensatory and punitive damages in Mr. Jen-
    sen's fraud claim be set aside; and that the total amount of Ms. Jor-
    dan's compensatory and punitive damages for her Title VII claim be
    _________________________________________________________________
    2 These three causes of action are those that survived a December 14,
    1995 Order of the district court granting summary judgment for defen-
    dants, dismissing all other claims, and dismissing Robert Shaw as a
    defendant.
    5
    reduced to $300,000. Plaintiffs Jordan and Jensen filed their instant
    cross appeal from this Order.3
    II. STANDARDS OF REVIEW
    As to questions of law, which here include the district court's
    denial, in part, of Shaw's motion for judgment as a matter of law,
    review is de novo. Benesh v. Ampherol Corp. (In re Wildewood
    Litigation), 
    52 F.3d 499
    , 502 (4th Cir. 1995). The abuse of discretion
    standard governs the district court's denial of a motion for a new trial
    and its denial, in part, of a motion to alter or amend judgment. Bristol
    Steel & Iron Works v. Bethlehem Steel Corp., 
    41 F.3d 182
    , 186 (4th
    Cir. 1994); Collison v. Intern. Chemical Workers Union, 
    34 F.3d 233
    ,
    236 (4th Cir. 1994).
    III. DISCUSSION
    A. Choice of Law on the Fraud Claims
    The Supreme Court of North Carolina consistently has held that the
    lex loci delicti doctrine applies to actions sounding in tort. Boudreau
    v. Baughman, 
    368 S.E.2d 849
    , 854 (N.C. 1988). Under this doctrine,
    the tort is deemed to have taken place, for choice of law purposes, in
    the jurisdiction in which the last event necessary to impose liability
    occurs. 
    Id.
     The lex loci delicti rule applies in fraud actions, as in most
    tort actions. Food Lion, Inc. v. Capital Cities/ABC, Inc., 
    951 F.Supp. 1217
    , 1219 (M.D.N.C. 1996) ("It should be noted that resolution of
    the fraud . . . claim[ ] is governed by the law of the `forum in which
    the acts giving rise to the claim occurred.'"), citing and quoting
    Tatham v. Hoke, 
    469 F.Supp. 914
    , 916 (W.D.N.C. 1979), aff'd, 
    622 F.2d 587
     (4th Cir. 1980), and Charnock v. Taylor , 
    26 S.E.2d 911
    (N.C. 1943).
    In the case below, however, the district court instead applied the
    "significant relationship" test to plaintiffs' State law fraud actions and
    held that the laws of New York, North Carolina, and Illinois governed
    _________________________________________________________________
    3 Plaintiffs Myers and Jacobs filed a motion to dismiss their appeals
    which this court granted by Order of November 8, 1996.
    6
    the fraud actions of Mr. Jacobs, Mr. Myers and Mr. Jensen, respec-
    tively, as "the place of the wrong." Charnock, 26 S.E.2d at 913.
    Although the district judge erred in applying the significant relation-
    ship test, the error was harmless because even under the lex loci rule,
    those same States' laws would govern the fraud actions.
    Again, under the lex loci rule, the place of the wrong is the locale
    in which the last act by a defendant occurs which makes him liable
    in tort. Brendle v. General Tire and Rubber Company, 
    408 F.2d 116
    ,
    117 n.3 (4th Cir. 1969) ("The traditional lex loci rule is that tort
    actions are governed by the law of the place of the wrong, which is
    `the [S]tate where the last event necessary to make an actor liable for
    an alleged tort takes place.'"), quoting Restatement of Conflict of
    Laws § 377 (1934).
    "When a person sustains loss by fraud, the place of the wrong is
    where the loss is sustained, not where fraudulent representations are
    made." Id. at n.4. The elements of fraud are: (1) a false representation
    of a past or existing fact; (2) made with knowledge that the represen-
    tation was false when made or made recklessly without any knowl-
    edge of its truth; (3) with the intent that it be relied on by the plaintiff;
    and (4) which caused injury to the plaintiff through his reasonable
    reliance on the false representation. Soules v. General Motors Corp.,
    
    402 N.E.2d 599
    , 601 (Ill. 1980); New York University v. Continental
    Ins. Co., 
    662 N.E.2d 763
    , 769 (N.Y. 1995); Claggett v. Wake Forest
    University, 
    486 S.E.2d 443
    , 447 (N.C. 1997).
    Here, the pivotal event relevant to the "reasonable reliance" fraud
    element occurred not in Georgia when the plaintiffs were fired, but
    earlier in the States of their respective workplaces when they received
    Shaw's direct or indirect reassurances that they would keep their jobs.
    The "last act" necessary for a fraud claim is the reasonable reliance
    on the false representation which causes the injury. It is not the firing
    itself which, instead, is the last act necessary for both the Title VII
    and ADEA discriminatory termination claims. To invoke the termina-
    tion as the last act would be to conflate plaintiffs' fraud actions into
    their employment discrimination actions. Thus, the district court did
    not err in choosing, as the law governing the fraud claims, the law of
    the State in which each plaintiff respectively was headquartered and
    received defendant's various reassurances of continued employment.
    7
    B. Ms. Jordan's Fraud Claim
    The law of the State of Georgia applied to Ms. Jordan's fraud
    count. Because Ms. Jordan was an at-will employee without a written
    contract, Shaw was entitled, under Georgia law, to fire her for good
    reason, bad reason, or no reason. Thus, the district court correctly
    granted Shaw judgment as a matter of law on Ms. Jordan's fraud
    claim, set aside the jury's verdict, vacated the judgment, and dis-
    missed the claim. See Wheeling v. Ring Radio Co. , 
    444 S.E.2d 144
    ,
    146 (Ga. 1994).
    C. Other Plaintiffs' Fraud Claims
    Shaw argues that, like Ms. Jordan, Mr. Jacobs was an at-will
    employee under New York law and that such an employee cannot
    state a claim for fraud based on an alleged promise of future employ-
    ment. New York courts, however, have held that at-will employment
    status does not bar a fraud claim, but does bar a breach of contract
    claim. See Navaretta v. Group Health Inc., 
    595 N.Y.S.2d 839
    , 840
    (N.Y. App. Div. 1993); Stewart v. Jackson & Nash , 
    976 F.2d 86
    , 88
    (2d Cir. 1992). Similarly, in North Carolina and Illinois, an at-will
    employee may bring an action alleging a fraudulent promise of future
    or continued employment. See Fortsmann v. Culp , 
    648 F.Supp. 1379
    ,
    1383 (M.D.N.C. 1986) (holding that employee's at-will status defeats
    contract claim but not fraud claim); Johnson v. George J. Ball Inc.,
    
    617 N.E.2d 1355
    , 1362 (Ill. Ct. App. 1993).
    Accordingly, the district court did not err in denying Shaw's
    motion for judgment as a matter of law as to Messrs. Myers, Jensen,
    and Jacobs. Because the jury's finding was supported by adequate
    evidence that Shaw made actionable misrepresentations to these
    plaintiffs and because that evidence must be interpreted in the light
    most favorable to the plaintiffs in a motion to set aside the judgment,
    the district court, similarly, did not err in refusing to grant the motion.
    D. Punitive Damages
    1. New York Law and the Public Wrong Requirement
    Under New York law, "[p]unitive damages may only be recovered
    in a fraud action where the fraud is aimed at the public generally, is
    8
    gross, and involves high moral culpability." Kelly v. Defoe Corp., 
    636 N.Y.S.2d 123
    , 124 (N.Y.App.Div. 1996), citing Walker v. Sheldon,
    
    179 N.E.2d 497
     (N.Y. 1961). In Walker, the Court of Appeals of New
    York imposed the "public wrong" requirement"as a limitation on the
    availability of punitive damages where a cause of action in fraud was
    stated. . . ." Rocanova v. Equitable Life Assurance Society of the
    United States, 
    634 N.E.2d 940
    , 945 (N.Y. 1994) (a breach of contract
    claim that restates the general rule against the availability of punitive
    damages). Mr. Jacobs presented no evidence below that the misrepre-
    sentations by Shaw were aimed at anyone other than the plaintiff
    employees of Salem; certainly no fraudulent statements were made to
    the public at large.
    Shaw, however, never objected to the district court's jury instruc-
    tions which lacked any mention of the public harm requirement for
    punitive damages. Indeed, Shaw never requested that such an instruc-
    tion be given. Because Shaw did not preserve the point for appeal,
    this court will leave undisturbed the district court's jury instructions
    as to punitive damages under New York law.
    2. Mr. Jensen's Punitive Damages Award
    Illinois law does not recognize an independent cause of action for
    punitive damages. Kemner v. Mansanto Co., 
    576 N.E.2d 1146
    , 1153
    (Ill.Ct.App. 1991) (citation omitted). Punitive damages, therefore,
    may be awarded only to a fraud plaintiff who can prove compensatory
    damages; a plaintiff who can establish but nominal damages is not
    entitled to punitive damages. 
    Id. at 1153-54
    .
    Because Mr. Jensen failed to present sufficient evidence of com-
    pensatory damages,4 the district court did not err in setting aside the
    jury's award of both compensatory and punitive damages.
    _________________________________________________________________
    4 While Mr. Jensen did prove the elements of his fraud claim below
    and, therefore, ordinarily would be entitled to an award of nominal dam-
    ages, at least, Mr. Jensen never sought a jury instruction respecting nomi-
    nal damages. Even if Mr. Jensen had sought such an instruction and even
    if the jury had awarded him nominal damages, however, the district cor-
    rectly concluded that the jury award of punitive damages must be set
    9
    3. Punitive Damages and Amendment XIV
    In the trial below, the jury awarded the plaintiffs punitive damages
    on their fraud counts. The ratio of punitive damages to compensatory
    damages ranged from 101:1 in the case of Mr. Myers (compensatory
    damages of $12,000 and punitive damages of $1,222,250) to 488:1 in
    the case of Mr. Jacobs (compensatory damages of $2500 and punitive
    damages of $1,222,250).
    In BMW of North America v. Gore, ___ U.S. ___, 
    116 S.Ct. 1589
    (1996), the United States Supreme Court most recently addressed the
    issue of the potential excessiveness of punitive damages awards. The
    court outlined a three-pronged test to assess whether an award of
    punitive damages is so disproportionately greater than an award of
    compensatory damages as to violate the Due Process Clause of
    Amendment XIV to the United States Constitution. The factors to be
    considered are: (1) the degree of reprehensibility of the defendant's
    conduct;5 (2) the ratio of punitive damages to the actual harm inflicted
    on the plaintiff; and (3) a comparison of the punitive damages award
    and the civil and criminal penalties that could be imposed for compa-
    rable conduct. BMW, 
    116 S.Ct. at 1599-1603
    . The court held that an
    award of $2 million in punitive damages when an automobile distrib-
    utor merely had failed to disclose to a car purchaser that his car had
    been repainted prior to the purchase was "grossly excessive" and vio-
    lated the Due Process Clause. 
    Id. at 1598
    . The court reasoned that
    punitive damages are especially suspect when the compensated harm
    is only "economic harm," as in the case of the repainted car.
    The court below found that Shaw's conduct in this case "involves
    _________________________________________________________________
    aside because of the plaintiff's failure to prove compensatory damages.
    As the district court found, Mr. Jensen's injuries owed not to his reliance
    on Shaw's fraudulent misrepresentations but to his termination from the
    company. As an at-will employee, Mr. Jensen had to show a causational
    relationship between the fraud, not the termination, and any consequent
    damages.
    5 "Perhaps the most important indicium of the reasonableness of a puni-
    tive damages award" is the degree of reprehensibility of defendant's con-
    duct. BMW, 
    116 S.Ct. 1599
    .
    10
    a greater level of reprehensibility" than was the case in BMW. Indeed,
    the district court concluded that the harm inflicted was more than
    purely economic. Although the ratios of punitive to compensatory
    damages here approach the 500:1 ratio that "`rais[ed] a suspicious
    judicial eyebrow'" in BMW, 
    116 S.Ct. at 1602
    , citing and quoting
    TXO Production Corp. v. Alliance Resources Corp., 
    509 U.S. 443
    ,
    482 (1993) (O'Connor, J. dissenting), far more disparate punitive
    damages award ratios have been countenanced even in the wake of
    BMW. See Lee v. Edwards, 
    101 F.3d 805
     (2nd Cir. 1996) (punitive
    to compensatory ratio of 75,000:1 allowed in 
    42 U.S.C. § 1983
     and
    common law assault case).6
    The jury's award of punitive damages does not contravene the
    Fourteenth Amendment under the governing BMW analysis. The jury,
    after weighing all the evidence and judging the reprehensibility of
    Shaw's conduct, imposed punitive damages in the amount it deemed
    justified. Considering the reprehensibility of the conduct at issue, the
    ratio of the punitive damages to actual harm, and the civil and crimi-
    nal penalties7 that could be imposed for comparable conduct, the
    punitive damages award cannot be said to have denied Shaw the Due
    Process of law.
    E. All Plaintiffs' ADEA Age Discrimination Claims and
    Ms. Jordan's Title VII Sex Discrimination Claim
    1. The Governing Law
    The ADEA provides that "[i]t shall be unlawful for an employer
    . . . to fail or refuse to hire or to discharge any individual . . . because
    of such individual's age. 
    29 U.S.C. § 623
    . The age-based protections
    _________________________________________________________________
    6 Indeed, the Supreme Court clarifies in BMW that it has "consistently
    rejected the notion that the constitutional line is marked by a simple
    mathematical formula, even one that compares actual and potential dam-
    ages to the punitive award. . . . A higher ratio[of punitive damages to
    compensatory damages] may . . . be justified in cases in which the injury
    is hard to detect or the monetary value of non-economic harm might have
    been difficult to determine." 
    116 S.Ct. at 1602
    .
    7 See, e.g., N.Y. Penal Law§ 70.15 (individual subject to imprisonment
    for criminal fraud); N.C. Gen. Stat. § 15A-1340.17 (same).
    11
    of the ADEA are "limited to individuals who are at least 40 years of
    age." Id. at § 631.
    Title VII establishes that "[i]t shall be an unlawful employment
    practice for an employer . . . to discriminate against any individual
    with respect to [her] compensation, terms, conditions, or privileges of
    employment because of such individual's . . . sex." 42 U.S.C.
    § 2000e-2(a)(1).
    The same proof scheme applies both to claims of age and sex dis-
    crimination in cases of alleged employment discrimination.
    McDonnell-Douglas Corp. v. Green, 
    411 U.S. 792
     (1973) (establish-
    ing the general Title VII discrimination proof scheme in race discrim-
    ination context); Texas Department of Community Affairs v. Burdine,
    
    450 U.S. 248
    , 254 n.6 (1980) (applying the McDonnell-Douglas
    framework to sex discrimination claims); Lovelace v. Sherwin-
    Williams Co., 
    681 F.2d 230
    , 238 (4th Cir. 1982) (adopting the
    McDonnell-Douglas framework for use in ADEA cases). To establish
    a prima facie case of either type of discrimination, a plaintiff must
    show that (1) he or she was a member of a protected age or sex group;
    (2) he or she was discharged; (3) at the time of his discharge, he or
    she was meeting his employer's legitimate expectations; and (4) he or
    she was replaced by a substantially younger person of comparable or
    lesser qualifications (in the ADEA context) or she was replaced by a
    male of comparable or lesser qualifications (in the sex discrimination
    context). See McDonnell-Douglas, 
    411 U.S. at 802
    ; Lovelace, 
    681 F.2d at 238
    ; Fink v. Western Electric Co., 
    708 F.2d 909
    , 915 (4th Cir.
    1983).
    Under the McDonell-Douglas framework, an employment discrim-
    ination plaintiff has the initial burden of production. Mitchell v. Data
    General Corp., 
    12 F.3d 1310
    , 1315 (4th Cir. 1993). If such a plaintiff
    brings forth indirect evidence that establishes a prima facie case of
    age or sex discrimination, a presumption in favor of the existence of
    the unlawful discrimination arises and the burden of production shifts
    to the defendant-employer who then must articulate a legitimate, non-
    discriminatory reason for the adverse employment decision "which, if
    believed by the trier of fact, would support a finding that unlawful
    discrimination was not the cause of the employment action." St.
    Mary's Honor Center v. Hicks, 
    509 U.S. 502
    , 507 (1993) (emphasis
    12
    in original). Assuming that the employer demonstrates such a reason,
    the burden of production then shifts back to the plaintiff to show that
    the employer's reason was merely pretextual. 
    Id.
     If the plaintiff fails
    to produce evidence showing both that the defendant's proffered rea-
    son was pretextual and that the evidence creates a reasonable infer-
    ence that age or sex was actually the determinative factor in the
    adverse employment decision, the discrimination claim must fail. 
    Id.
    Notwithstanding the shifting burden of production, at all times the
    plaintiff retains the ultimate burden of persuasion. Id.
    2. The Law Applied
    In its motion for judgment as a matter of law, Shaw asserted that
    the Salem vice-presidents were "downsized" after Shaw, the acquiring
    company in the corporate merger, simply chose to retain its own
    employees while eliminating duplicative middle management posi-
    tions held by former competitors. This decision, Shaw argued, consti-
    tuted a legitimate, non-discriminatory reason for the terminations
    under the McDonnell-Douglas standard.
    Shaw's argument, however, in focusing on the second step of the
    McDonnell-Douglas test, presupposes that the plaintiffs met their ini-
    tial burden of producing evidence of prima facie age and sex discrim-
    ination. This presupposition is inconsistent with Shaw's present
    contention that each plaintiff below failed to make out prima facie
    cases of age or sex discrimination under McDonnell-Douglas. As a
    matter of logic, the burden of production never would have shifted to
    Shaw to articulate a legitimate non-discriminatory justification for the
    plaintiffs' firings had the former Salem employees not met their
    respective initial burdens.8
    At trial, the plaintiffs adduced evidence of prima facie age and sex
    discrimination. Shaw then rebutted the presumption of discriminatory
    _________________________________________________________________
    8 With respect to the plaintiffs' ADEA claims, Shaw's answers to the
    plaintiffs' interrogatories admitted that Messrs. Myers, Jacobs and Jensen
    and Ms. Jordan, all over the age of forty, were replaced by persons all
    under the age of forty. With respect to Ms. Jordan's Title VII sex dis-
    crimination claim, she presented sufficient evidence that she was
    replaced by a man of comparable or less qualifications.
    13
    motive with evidence that corporate downsizing accounted for the fir-
    ings and constituted a legitimate non-discriminatory justification. The
    jury, as the factfinder, however, ultimately concluded that Shaw's
    proffered legitimate reason was pretextual and that discriminatory
    considerations based on age and sex actually accounted for the plain-
    tiffs losing their jobs.
    In fact, the jury heard varying and, at times, inconsistent testimony
    from Shaw officials concerning their reason for firing the plaintiffs.
    For instance, witnesses of Shaw variously testified that the ADEA
    plaintiffs either (1) had been fired, (2) had not been offered positions
    after the merger, (3) had never been Shaw employees, or (4) had
    resigned of their own accord. As to Ms. Jordan, the Title VII plaintiff,
    Shaw witnesses variously testified either (1) that the plaintiff was
    unqualified for the position of regional sales manager because she had
    never been a sales manager, or (2) that Jordan's experience as a sales
    manager was well known to Shaw witnesses. Moreover, Shaw wit-
    nesses offered conflicting testimony as to whether the company ini-
    tially recommended that Ms. Jordan be retained or not with such
    affirmative testimony militating against Shaw's contention that Ms.
    Jordan was merely part of a workplace "tier" eliminated without
    regard to the sexes of its members. As the district court reasoned
    below, "`[f]rom such discrepancies a reasonable juror could infer that
    the explanations given by [Shaw Industries] at trial were pretextual,
    developed over time to counter the evidence suggesting . . . discrimi-
    nation. . . .'" Jordan, et al. v. Shaw Industries, Inc., Mem. Op. at 26
    (August 13, 1996), citing and quoting E.E.O.C. v. Ethan Allen, Inc.,
    
    44 F.3d 116
    , 120 (2d Cir. 1994).
    In short, the parties presented ample conflicting evidence to the
    jury for resolution of the ultimate question in discrimination cases--
    whether a discriminatory motive or a legitimate non-discriminatory
    reason accounted for the adverse employment decision at issue.
    Because the witness testimony during the trial below was conflicting
    and determinations of credibility are particularly within the preroga-
    tive of the finder of fact, this court shall not disturb the conclusions
    of the jury. "Determination of [discriminatory] motive is ordinarily a
    function within the purview of the fact finder because so much
    depends on an assessment of the credibility of the witnesses." Herold
    v. Hajoca Corp., 
    864 F.2d 317
     (4th Cir. 1988). The district court did
    14
    not err in denying Shaw's motion to set aside the jury's finding of dis-
    criminatory motive on Shaw's part because the evidence did not
    clearly compel rejection of that finding.9
    3. Ms. Jordan's Title VII Compensatory and Punitive Damages
    Title 42, United States Code, Section 1981A, amended to Title VII
    by the Civil Rights Act of 1991, provides for compensatory and puni-
    tive damages in cases of intentional discrimination in employment.
    Those damages, however, are limited by 42 U.S.C.§ 1981A(b)(3) in
    that "[t]he sum of the amount of compensatory damages awarded
    under this section . . . and the amount of punitive damages awarded
    under this section, shall not exceed . . . in the case of a respondent
    who has more than 500 employees in each of 20 or more calendar
    weeks in the current or preceding calendar year, $300,000."
    Accordingly, the district court did not err by reducing Ms. Jordan's
    award of compensatory and punitive damages for her Title VII claim
    to the statutory cap of $300,000 from the jury's award of $57,000 in
    compensatory damages and $344,000 in punitive damages.
    IV. CONCLUSION
    For the reasons stated herein, we hold that the district court did not
    err by denying and granting, in part, defendant Shaw's motion for
    judgment as a matter of law, by denying and granting, in part, Shaw's
    motion to alter or amend judgment, and by denying Shaw's motion
    for a new trial. We further hold that the district court did not err by
    setting aside the jury verdict on Ms. Jordan's fraud count, by setting
    aside the jury's award of compensatory and punitive damages in Mr.
    Jensen's fraud claim, and by reducing Ms. Jordan's compensatory and
    punitive damages in her Title VII claim to the applicable statutory
    cap. It is so ordered.
    AFFIRMED
    _________________________________________________________________
    9 Nor did the district court judge abuse his discretion by denying
    Shaw's motion for a new trial. Shaw failed to meet its burden of showing
    harmful error resulting from the court's decision to admit as evidence
    statements of Salem vice-presidents Holm and Ferrell that they acted as
    Shaw's agents when they provided the plaintiffs with reassurances that
    they would be given jobs with Shaw after the merger.
    15
    

Document Info

Docket Number: 96-2189

Filed Date: 11/26/1997

Precedential Status: Non-Precedential

Modified Date: 10/30/2014

Authorities (21)

Equal Employment Opportunity Commission v. Ethan Allen, Inc.... , 44 F.3d 116 ( 1994 )

James K. Lee v. Michael Edwards , 101 F.3d 805 ( 1996 )

Mary Kate Brendle, Administratrix of the Estate of William ... , 408 F.2d 116 ( 1969 )

Gerald E. FINK, Appellee, v. WESTERN ELECTRIC COMPANY, ... , 708 F.2d 909 ( 1983 )

Bristol Steel & Iron Works, Incorporated v. Bethlehem Steel ... , 41 F.3d 182 ( 1994 )

victoria-a-stewart-v-jackson-nash-laurence-g-bodkin-jr-paul-h , 976 F.2d 86 ( 1992 )

Forstmann v. Culp , 648 F. Supp. 1379 ( 1986 )

Food Lion, Inc. v. Capital Cities/ABC, Inc. , 951 F. Supp. 1217 ( 1996 )

Wilbur L. LOVELACE, Appellant, v. SHERWIN-WILLIAMS COMPANY, ... , 681 F.2d 230 ( 1982 )

Brenda S. Collison v. International Chemical Workers Union, ... , 34 F.3d 233 ( 1994 )

Johnson v. George J. Ball, Inc. , 187 Ill. Dec. 634 ( 1993 )

Soules v. General Motors Corp. , 79 Ill. 2d 282 ( 1980 )

Donald R. MITCHELL, Plaintiff-Appellant, v. DATA GENERAL ... , 12 F.3d 1310 ( 1993 )

in-re-wildewood-litigation-bruce-k-benesh-individually-susan-v-benesh , 52 F.3d 499 ( 1995 )

Navaretta v. Group Health, Inc. , 595 N.Y.S.2d 839 ( 1993 )

Kelly v. Defoe Corp. , 636 N.Y.S.2d 123 ( 1996 )

McDonnell Douglas Corp. v. Green , 93 S. Ct. 1817 ( 1973 )

TXO Production Corp. v. Alliance Resources Corp. , 113 S. Ct. 2711 ( 1993 )

St. Mary's Honor Center v. Hicks , 113 S. Ct. 2742 ( 1993 )

Tatham v. Hoke , 469 F. Supp. 914 ( 1979 )

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