Curry, Sylvia v. Menard, Incorporated ( 2001 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 00-4219
Sylvia Curry,
Plaintiff-Appellant,
v.
Menard, Inc.,
Defendant-Appellee.
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 99 C 8333--George W. Lindberg, Judge.
Argued April 25, 2001--Decided October 29, 2001
Before Coffey, Manion, and Rovner, Circuit
Judges.
Manion, Circuit Judge. Sylvia Curry
filed suit under Title VII of the Civil
Rights Act of 1964, 42 U.S.C. sec. 2000e,
et seq., and 42 U.S.C. sec. 1981,
alleging that her employer, Menard, Inc.,
discharged her because of her race. The
district court granted summary judgment
for Menard and Curry appeals. We vacate
the judgment of the district court and
remand for further proceedings.
I. Background
Curry, who is black, started working as
a cashier at Menard’s Skokie, Illinois
store in January 1996. Menard terminated
her in March 1998. While the alleged
cause of her termination was her third
cash drawer discrepancy, Curry claims
that it was due to her race. From the
onset of her employment, Curry claims she
did not have a good relationship with her
immediate supervisor, Susan Horvath, who
was the office manager in charge of
cashiers throughout Curry’s tenure at the
Skokie store. Their relationship
allegedly became even more strained in
June or July 1997 when Curry confronted
Horvath about certain comments and
actions by Horvath that Curry thought
inappropriate and racially motivated.
Specifically, according to Curry’s
testimony (which was disputed by Menard),
Horvath had a practice of calling the
store’s department managers and security
personnel to warn them when black or
Hispanic customers came into the store.
Curry testified that she overheard such
phone calls at least 10 to 20 times.
Curry further testified that Horvath once
stated that "blacks don’t like to work as
much as Mexicans" and that "Mexicans will
work for little or nothing." She also
allegedly asked Curry to explain why
black customers would wear weaves or
extensions in their hair and commented
once on the "naps" in the hair of a black
employee. When Curry confronted Horvath
about these actions and statements,
Horvath allegedly did not respond and
continued to make what Curry perceived to
be inappropriate comments.
In March 1998 the assistant store
manager, Timm McDaniel, informed Curry
that she was being discharged for
violating the store’s unwritten
"progressive discipline" policy. The
terms of this policy were as follows:
every day the cash in each cashier’s
register would be counted and compared
against a master computer printout. The
first time a cashier’s register count
differed from the printout by $3.00 or
more, the cashier would receive a written
warning. If another discrepancy occurred
within 30 days of receipt of the written
warning, the cashier would be suspended.
A third discrepancy occurring within 60
days from the suspension would result in
termination.
The parties do not dispute that Curry’s
register had cash discrepancies of more
than $3.00 on January 4, February 9, and
February 28 of 1998. Curry believes that
her termination was at least partially
motivated by Horvath’s attitude toward
minorities in general and toward her in
particular. In fact, Horvath herself
discovered the January 4 discrepancy, in
the amount of $12.37, and attempted to
reconcile the shortage. According to
Horvath’s testimony, however, her efforts
were unsuccessful, and she therefore
issued a written disciplinary warning on
January 13. Horvath did not speak to any
other managers prior to taking such
action. Indeed, as the parties agree, it
was assistant manager McDaniel’s practice
to allow Horvath to take disciplinary
action on her own when cash discrepancies
were involved.
Horvath also counted down Curry’s cash
drawer on February 9 and found a $21.47
discrepancy. After both Horvath and Curry
were unsuccessful in their attempts to
reconcile the difference, Horvath wrote
up a suspension form. She then consulted
with McDaniel, and together they talked
to Curry and suspended her for three
days.
On February 28 assistant office managers
Tammie Davis and Matthew Rosner counted
down Curry’s drawer and discovered a
discrepancy of $5.70. At that time Rosner
had not yet been instructed on the
store’s disciplinary policy. He therefore
proceeded to consult with Horvath,
whoinformed him about the proper
discipline to be imposed. Soon
thereafter, on March 6, McDaniel
terminated Curry for violating the
progressive discipline policy. According
to McDaniel he discharged Curry based
solely on the three writeups he had
received, without investigating their
validity or whether they were issued in
an even-handed manner. In fact, McDaniel
testified that he never exercised his own
discretion in disciplining an employee
for cash discrepancies, relying instead
on the recommendations he would receive
from Horvath.
From January 1, 1997, to December 31,
1998, Curry was the only cashier to be
suspended or terminated for violating the
store’s progressive discipline policy.
The record shows, however, that had the
policy been strictly enforced sixteen
other cashiers should have been suspended
or terminated in that same time period.
Although Menard asserted in its statement
of facts submitted pursuant to Northern
District of Illinois Local Rule
56.1(a)(3)(B) that it did not know the
race of eight of those sixteen
individuals, it conceded that only one of
the others was black. The record also
establishes that out of a total of 35
cashiers employed by the Skokie store,
only three, including Curry, were black.
The record does not indicate how many
among these numbers were Hispanic.
Nevertheless, at least fourteen of those
sixteen cashiers were not black.
Menard maintains that Curry’s
termination was the result of a new
stricter approach to cashier discipline
that was imposed on January 5, 1998, when
new manager Michael Stanley began working
at the store. Regardless of their race,
it appears that the 14 cashiers who could
or should have been suspended or
terminated before January 5, 1998 and
after May 12, 1998 were not so
disciplined. However, the record shows
that during the short time period that
Stanley was manager (January 5, 1998, to
May 12, 1998), one employee, Anne
Mercurio, who was not black, had two cash
discrepancies within a 30-day period.
Another non-black employee, Margaret
Venetico, had three discrepancies within
the applicable time period. Although
Mercurio and Venetico received written
warnings, neither was suspended or
discharged.
II. Discussion
We review a grant of summary judgment de
novo, construing the evidence in the
light most favorable to the nonmoving
party. Gordon v. United Airlines, Inc.,
246 F.3d 878, 885 (7th Cir. 2001).
Summary judgment is appropriate if there
is no genuine issue as to any material
fact and the moving party is entitled to
judgment as a matter of law. Id.
As the district court correctly noted,
Curry failed to provide any direct
evidence of discrimination. Although
Curry testified to "inappropriate" racial
remarks made by Horvath, those remarks,
while made in Curry’s presence, were not
made to or about her and were not related
to the employment decision in question.
See Gorence v. Eagle Food Ctrs., Inc.,
242 F.3d 759, 762 (7th Cir. 2001) (stray
remarks of a derogatory character do not
show direct discrimination unless they
are related to the adverse employment
action). Thus, to survive summary
judgment Curry had to prove a prima facie
case of discrimination under the burden-
shifting method, which required her to
show that: (1) she belongs to a protected
class, (2) she performed her job
according to Menard’s legitimate
expectations, (3) she suffered an adverse
employment action, and (4) similarly
situated employees outside the protected
class were treated more favorably.
Gordon, 246 F.3d at 885-86. Establishing
a prima facie case creates a presumption
of discrimination and shifts the burden
to the employer to produce evidence of a
legitimate, race-neutral reason for the
adverse action. Id. at 886. If the
employer meets this burden of production,
the plaintiff then has the burden to show
that the stated nondiscriminatory reason
is pretextual. Id.
The parties do not dispute that elements
(1) and (3) of the prima facie test were
met. Thus, in determining whether Curry
established a prima facie case, we need
consider only whether she was meeting
Menard’s legitimate expectations and
whether similarly situated non-black
employees received more favorable
treatment.
Menard maintains that Curry was not
meeting its legitimate performance
expectations because she had accumulated
three violations under the store’s
progressive discipline policy. On this
point, however, the facts of this case
are similar to those in Flores v.
Preferred Technical Group, 182 F.3d 512,
515 (7th Cir. 1999). In Flores the
plaintiff, an Hispanic woman, was
discharged for participating in an
unlawful work stoppage. Id. at 514.
Although admitting she had broken the
rules, the plaintiff claimed that she had
been disciplined more harshly than non-
Hispanic rule-breakers. Id. at 515. The
employer argued from this that the
plaintiff was not fulfilling its
legitimate expectations because when she
was fired she was admittedly
participating in the unlawful work
stoppage. Id. This court reasoned,
however, that such an argument fails to
take into account the flexibility of the
McDonnell Douglas analysis. Id. Rather,
where the issue is whether the plaintiff
was singled out for discipline based on a
prohibited factor, it "makes little sense
. . . to discuss whether she was meeting
her employer’s reasonable expectations."
Id.; accord Oest v. Ill. Dep’t of Corr.,
240 F.3d 605, 612 n.3 (7th Cir. 2001)
("legitimate expectations" prong of the
prima facie test is not necessary to the
analysis, where the people judging the
plaintiff’s performance were the same
people she accused of discriminating
against her). Thus, the plaintiff in
Flores did not have to show she was
meeting the employer’s legitimate
expectations to establish a prima facie
case of discrimination.
Similarly here, although Curry admits
that she violated Menard’s policy, she
claims that she was disciplined more
harshly than non-black employees who also
violated the policy. As in Flores,
therefore, it makes little sense in this
context to determine whether she was
meeting Menard’s legitimate expectations.
Rather, Menard’s argument is more
appropriately considered in our analysis
of pretext. See Vakharia v. Swedish
Covenant Hosp., 190 F.3d 799, 807 (7th
Cir. 1999) (court can assume that the
plaintiff has met the "legitimate
expectations" element of the prima facie
test where that element dovetails with
the issue of pretext).
We therefore turn to the last element of
the prima facie test: whether Curry
showed that she was treated differently
than similarly situated employees not in
her protected class. Curry’s evidence,
which included a series of daily cash
flow reports documenting cash
discrepancies for Menard’s cashiers,
established that from January 1, 1997, to
December 31, 1998, sixteen other
individuals, at least fourteen of whom
were not black, should have been
suspended or terminated under Menard’s
progressive discipline policy, if the
policy had been strictly enforced. Curry
claims that this evidence proved that at
least fourteen similarly situated
employees outside her protected class
were treated more favorably by Menard.
But this statistic does not tell the
whole story. Whether the discipline
policy was enforced depended on who was
managing the store, and all but two of
the sixteen violations that Curry cites
occurred either before or after the
tenure of Michael Stanley, who Horvath
testified was brought to the Skokie store
to improve discipline and the store’s
general operation. Before Stanley showed
up, several preceding store managers had
not enforced the policy. In fact, Curry
herself had three cash discrepancies in
1997 (on February 16, May 24, and August
17), but she was not disciplined.
Further, as Curry concedes, no one else
was disciplined before Stanley arrived.
And after he left, the store returned to
its lax enforcement.
This leaves in question the four-plus
months that Stanley was in charge. For
that limited time period Curry offered
sufficient evidence to survive summary
judgment because she established that two
employees--Margaret Venetico and Anne
Mercurio--had two or more cash
discrepancies during Stanley’s tenure at
the store but were neither suspended nor
terminated. See Russell v. Bd. of Tr. of
the Univ. of Ill. at Chi., 243 F.3d 336,
342 (7th Cir. 2001) (female employee
alleging sex discrimination satisfied
"similarly situated" element of prima
facie test by presenting evidence that
one male employee was treated more
favorably by the employer). Although
Menard asserts that Curry did not present
any evidence regarding the race of those
other two cashiers, Menard admitted in
its Rule 56.1 response that neither
Mercurio nor Venetico is black. Menard
further maintains that Curry failed to
show whether Venetico and Mercurio were
in fact disciplined, but this argument is
directly contradicted by several pieces
of evidence in the record. First, Menard
admitted in its Rule 56.1 response that
Curry was the only cashier terminated for
cash drawer discrepancies between January
1, 1996, and December 31, 1998. Obviously
that includes the several months still in
question. The record also contains a
letter from Menard to the Illinois
Department of Human Rights stating that
no employee except for Curry was
suspended or terminated for cash register
errors from 1996 through 1998. And final
ly, in response to an interrogatory
asking for identification of every
instance of cashier discipline during the
period of January 1, 1997, to December
31, 1998, Menard stated that each
instance was reflected in the documents
it produced. None of those documents
contains evidence that any cashier other
than Curry was suspended or discharged.
Menard also argues that without knowing
the background circumstances behind each
cash discrepancy, no conclusion can be
made as to what discipline should have
been imposed. In other words, Menard
asserts that the discrepancies referenced
in the cash flow reports could have been
later reconciled or found to be not
attributable to cashier error, in which
case disciplinary action would not have
been appropriate. But as the moving
party, the burden was on Menard to
present evidence showing that the cash
flow reports were reconciled, cancelling
any need for disciplinary action. At that
point any presumption of discrimination
would drop and Curry must then prove
pretext. See Crim v. Bd. of Educ. of
Cairo Sch. Dist. No. 1, 147 F.3d 535, 540
(7th Cir. 1998). But Menard failed to
meet that burden of production. Most of
the reports in fact state that the
discrepancies were due to "cashier
error," with some providing more detailed
explanation such as cashier "gave
incorrect change." Furthermore, Horvath
testified that when a discrepancy was
discovered she would conduct an
investigation to determine the cause, and
only after the investigation was complete
would she write an explanation for the
discrepancy on the cash flow report.
Horvath’s testimony therefore contradicts
Menard’s allegation that some cash flow
reports show the final results of a
drawer count, while others reflect
discrepancies that may be reconciled at
some later, unspecified time.
For similar reasons we conclude that
Curry presented sufficient evidence of
pretext to preclude summary judgment.
Menard’s proffered nondiscriminatory
justification for Curry’s termination is
that it was simply following its uniform
disciplinary policy, which was being
strictly enforced during Stanley’s tenure
at the store. But as discussed above,
Curry presented evidence that Mercurio
and Venetico, both non-black cashiers,
were not suspended or terminated despite
the fact that they also accumulated at
least two cash discrepancies during the
same time period. This inconsistency
creates a genuine issue of material fact
as to whether Menard’s stated reason for
discharging Curry was a pretext for
discrimination. See Gordon, 246 F.3d at
892 ("A showing that similarly situated
employees belonging to a different racial
group received more favorable treatment
can also serve as evidence that the
employer’s proffered legitimate,
nondiscriminatory reason for the adverse
job action was a pretext for racial
discrimination.") (quotation marks and
citation omitted); Russell, 243 F.3d at
342 (female employee presented genuine
issue of material fact as to whether
employer’s stated nondiscriminatory
reason for suspending her--that she
falsified her time sheet-- was
pretextual; employee pointed to similar
time sheet error incidents involving male
employees, where no disciplinary action
was taken); Lynn v. Deaconess Med. Ctr.,
160 F.3d 484, 488-89 (8th Cir. 1998)
(male employee produced sufficient
evidence of pretext to survive summary
judgment, where he showed that employer
disciplined similarly situated female
employee less severely for more egregious
conduct); Williams v. City of Valdosta,
689 F.2d 964, 975 (11th Cir. 1982) ("It
is undisputed . . . that the City’s
adherence to its formal promotional
policy was inconsistent and arbitrary at
best. This inconsistency supports the
conclusion that resort to the [policy]
was a pretext for singling out Williams
for unfavorable treatment.").
In short, before and after Stanley’s
term as manager, none of the cashiers who
had discrepancies, including Curry, was
disciplined under the "progressive
discipline" policy. But during Stanley’s
tenure there were apparently three
violators, but only Curry was fired. This
leaves a material question of fact of
whether terminating Curry for breaching
the policy was a pretext.
As a final note we emphasize that on
remand nothing prevents Menard from
presenting further evidence comparing
Curry’s violations to those of Mercurio
and Venetico. If despite the distinctions
among them Menard still can marshal
undisputed evidence establishing the
existence of a policy that was even-
handedly applied, then summary judgment
may yet be appropriate. But if there
remains a dispute as to whether Curry was
treated more harshly than the other two
for like violations, a jury should
decide.
The judgment of the district court is
VACATED, and the case is REMANDED for
further proceedings.
Rovner, Circuit Judge, concurring in the
judgment. Like the majority, I believe
that Curry presented enough evidence to
raise a material dispute as to whether
similarly situated, non-African American
employees received preferential treatment
from Menard. I disagree, however, with
the majority’s conclusion that the number
of potential comparatives is necessarily
limited to those individuals who had cash
discrepancies during Michael Stanley’s
approximately four-month tenure at the
store. The majority rests its decision on
the assumption that Stanley intended to
enforce the progressive discipline policy
more strictly while he was in charge. But
that point is disputed. For instance,
Curry presented testimony from assistant
manager McDaniel (who started working at
Menard one month after Stanley) that he
never discussed the progressive
discipline policy with Stanley or Horvath
and could not recall any conversations he
had with Horvath to the effect that the
new manager wanted to "get tougher" on
employees. Assistant office manager
Rosner also testified that neither
Stanley nor McDaniel ever spoke to him
about the policy and that the policy was
never discussed at any manager meeting.
And, as the majority acknowledges, even
while Stanley was in charge there were
two non-African American employees,
Mercurio and Venetico, who should have
been disciplined but were not. In fact,
the only evidence supporting the
majority’s assumption is hearsay of
questionable admissibility--Horvath’s
testimony that Stanley told her the
policy was to be rigidly enforced--and,
even more dubious, Curry’s "admission"
during her deposition that there was a
"rumor going around" that Stanley was
brought in to tighten up discipline.
Curiously, Menard did not offer any
testimony from Stanley himself (or for
that matter from McDaniel, who was
second-in-charge) that Stanley had
implemented a policy of strict
enforcement. Thus, in light of all the
evidence of record and our obligation to
view it in the light most favorable to
Curry, I think that the majority unduly
restricts the relevant time frame to the
four-month period when Stanley was
managing the store. I therefore
respectfully disagree with that portion
of the majority’s decision.
I offer two additional comments. First,
regardless whether the number of other
similarly situated individuals is 2 or 16
for purposes of the prima facie test, I
note that nothing precludes Curry from
offering evidence of all 16 at trial. As
we have often stated, the burden-shifting
approach of McDonnell Douglas applies
only to pretrial proceedings and drops
out once a case goes past the summary-
judgment stage. E.g., Hamner v. St.
Vincent Hosp. and Health Care Ctr., Inc.,
224 F.3d 701, 705 n.3 (7th Cir. 2000);
Hasham v. Cal. State Bd. of Equalization,
200 F.3d 1035, 1044 (7th Cir. 2000); Diaz
v. Fort Wayne Foundry Corp., 131 F.3d
711, 712 (7th Cir. 1997).
Second, although I agree with the
majority that Curry’s testimony regarding
Horvath’s racial remarks was not direct
proof of discrimination, that should not
prevent Curry from introducing the same
evidence to prove pretext should Menard
renew its motion for summary judgment.
Pafford v. Herman, 148 F.3d 658, 666 (7th
Cir. 1998); Huff v. UARCO, Inc., 122 F.3d
374, 385 (7th Cir. 1997). Menard argues
otherwise, citing cases such as Hong v.
Children’s Memorial Hospital, 993 F.2d
1257 (7th Cir. 1993), for the proposition
that, before a plaintiff may rely on
circumstantial evidence, she must show
that there is a nexus between that
evidence and the allegedly discriminatory
decisions at issue. But those cases
simply hold that such circumstantial
evidence, without more, is insufficient
to give rise to an inference of
discrimination. See, e.g., id. at 1266.
And here, Curry’s circumstantial evidence
was not offered alone but in conjunction
with other proof of pretext. See Huff,
122 F.3d at 385 ("When a plaintiff uses
the indirect method of proof, no one
piece of evidence need support a finding
of . . . discrimination, but rather the
court must take the facts as a whole.").
Menard also contends that Horvath’s
comments may not be considered because
she "was not even present when Curry was
terminated and there is no evidence
whatsoever that either of the managers
who were present (McDaniel or Rosner) had
made any derogatory comments or acted in
any way which would even suggest that
their actions were motivated by racial
animus." But Menard does not dispute that
Horvath personally imposed the written
warning and the suspension on Curry
(actions upon which the termination was
based), and that Rosner, who discovered
Curry’s third cash discrepancy, consulted
with Horvath about the proper
disciplinary action to be taken.
Furthermore, McDaniel testified that he
exercised no discretion in determining
whether to discipline an employee for
cash discrepancies; instead, he based his
decisions solely on the writeups he would
receive from Horvath, without
investigating their validity or whether
they were issued in a consistent manner.
Horvath was therefore in effect the
decision-maker in Curry’s termination,
and so evidence of any racial animus she
harbored may be considered in the pretext
analysis. See Russell v. Bd. of Tr. of
the Univ. of Ill. at Chi., 243 F.3d 336,
342 (7th Cir. 2001) ("[A]ny improper
motives [the plaintiff’s supervisor]
harbored had to be imputed to the other
members of the disciplinary committee
because of [that supervisor’s] extensive
role in initiating and carrying out the
disciplinary process."); Hunt v. City of
Markham, Ill., 219 F.3d 649, 652 (7th
Cir. 2000) (expressions of discriminatory
feelings by "those who provide input into
the [adverse employment] decision" are
evidence of actionable discrimination).