Hague, Mark v. Thompson Distrib Co , 436 F.3d 816 ( 2006 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 05-1654
MARK HAGUE, CYNTHIA HAGUE, MARK BROWN, et al.,
Plaintiffs-Appellants,
v.
THOMPSON DISTRIBUTION COMPANY, d/b/a MUTUAL PIPE
AND SUPPLY COMPANY, MUTUAL PIPE AND SUPPLY
COMPANY, and JOHN T. THOMPSON,
Defendants-Appellees.
____________
Appeal from the United States District Court
for the Southern District of Indiana, Indianapolis Division.
No. 02 C 1744—Richard L. Young, Judge.
____________
ARGUED SEPTEMBER 20, 2005—DECIDED FEBRUARY 7, 2006
____________
Before EASTERBROOK, MANION, and SYKES, Circuit Judges.
MANION, Circuit Judge. Thompson Distribution’s owner,
John Thompson, who is black, fired five white employees.
Those employees, Mark Hague, Cynthia Hague, Mark
Brown, Bernard Dubois, and Anna Perrey, then sued
Thompson Distribution Co., alleging race discrimination in
violation of 42 U.S.C. § 1981. The district court granted
2 No. 05-1654
Thompson Distribution summary judgment. The plaintiffs
appeal and we affirm.
I.
On November 26, 2001, John Thompson, who is black,
purchased at a public sale the assets of Mutual Pipe &
Supply Company, Inc., after Mutual Pipe defaulted on a
bank loan. Prior to purchasing Mutual Pipe, Thompson had
met with its Vice President and General Manager, Mark
Hague. Hague had worked for Mutual Pipe for thirty-two
years and his grandfather had started the business. Unfortu-
nately for the Hague family, one of its major customers
went bankrupt, and Mutual Pipe never recovered from the
substantial financial hit it took as a result of its customer’s
bankruptcy. After several years of losing money, and finally
defaulting on a bank loan, it became clear that Mutual Pipe
could not remain in business.
Although Thompson originally considered buying Mutual
Pipe, he realized that the asking price was significantly
greater than its value and decided instead to wait until the
company went into bankruptcy or the bank auctioned off its
assets. In anticipation of the pending sale, Thompson
established Thompson Distribution Company. If and when
the bank auctioned off Mutual Pipe’s assets, Thompson
Distribution would attempt to acquire the assets. If success-
ful, it would begin operations as a distributing company,
distributing plumbing supplies and equipment to industrial,
construction, and institutional firms.
In the months leading up to the public auction, Thompson
met with Mark Hague several times to discuss Mutual
Pipe’s operations. Thompson also expressed interest in
hiring Mark Hague and other Mutual Pipe employees, and
he asked Mark Hague to make a list of the Mutual Pipe
No. 05-1654 3
employees whom he should hire. On November 27, 2001,
the day after he was the successful bidder for the assets of
Mutual Pipe, Thompson met with all of the Mutual Pipe
employees who had expressed an interest in continuing to
work for Thompson Distribution, including those employ-
ees Hague had recommended.
Thompson Distribution eventually decided to hire about
fourteen employees, of whom about twelve (the record is
unclear on the exact number) had previously worked for
Mutual Pipe. Thompson Distribution then began operations
on November 28, 2001. Among those hired were plaintiffs
1
Mark Hague and his wife, Cynthia Hague, Mark Brown,
Bernard Dubois, and Anna Perrey, all of whom were white.
Thompson Distribution also hired Mary Coleman and Bob
McClellan, both of whom were white, along with John’s
wife, Norma Thompson, David Bigsby, Jimmy Ford, and
Dwayne Springfield, all of whom were black. The following
week Thompson Distribution hired another black employee.
Including Thompson himself, this made up Thompson
Distribution’s initial labor force.
These employees were all hired on an at-will basis.
Additionally, in hiring the plaintiffs, Thompson Distribu-
tion provided the plaintiffs with an “Employee Handbook,”
which stated: “A ninety-day trial period is provided for new
employees to evaluate the opportunities of continued
service with the company and, likewise, for the company to
evaluate the new employee for continued service with the
company.” Before the ninety-day period expired, Thompson
1
Thompson Distribution originally employed Cynthia Hague
on a contract basis, but on January 11, 2001, hired her as a full-
time employee.
4 No. 05-1654
2
Distribution fired the five plaintiffs. Thompson Distribution
fired Mark and Cynthia Hague on February 15, 2002.
According to Mark Hague, in firing him, Thompson merely
told him that his services were no longer needed in the
future of Thompson Distribution. Similarly, Cynthia
testified in her deposition that in firing her, Thompson
simply said that she did not fit in the future of Thompson
Distribution. Thompson Distribution fired Brown, Dubois,
and Perrey on February 22, 2001, telling Brown and Perrey
they did not fit in the company, and informing Dubois that
Thompson Distribution is “moving ahead without you.”
Thompson Distribution replaced Mark Hague, Brown, and
Perrey with three new employees, all of whom were black.
Thompson’s wife Norma (who is also black) took over
Cynthia Hague’s duties. Thompson Distribution did not
replace Dubois.
After they were fired, the Hagues, Brown, Dubois and
Perrey sued Thompson Distribution for race, age, and
disability discrimination under Title VII of the Civil Rights
3
Act of 1964, 42 U.S.C. §§ 2000e et seq., 42 U.S.C. § 1981, the
2
The plaintiffs maintain that Thompson Distribution never told
them that their employment was on a 90-day probationary
period. The Handbook, however, clearly provides for an initial
trial period. Moreover, upon hiring the plaintiffs, Thompson
Distribution provided letters to the plaintiffs which referenced
the trial period, noting that health benefits would begin following
the ninety-day trial period. Thus, the plaintiffs were on notice
that Thompson Distribution considered them probationary
employees for the initial ninety days. In any event, the plaintiffs
were at-will employees.
3
The plaintiffs later dropped their Title VII claims, proceeding
instead under § 1981, because Thompson Distribution did not
have the requisite fifteen or more employees to fall under the
(continued...)
No. 05-1654 5
Age Discrimination in Employment Act, 29 U.S.C. §§ 621 et
seq., and the Americans with Disabilities Act, 42
U.S.C. §§ 12101 et seq., and state law, and for interfering
with their ability to attain health benefits in violation of the
Employee Retirement Income Security Act of 1974, 29 U.S.C.
§§ 1001 et seq. The plaintiffs also sued Thompson, individu-
ally, for tortious interference with their contractual relation-
ship with Thompson Distribution. The district court granted
the defendants summary judgment on all counts. As to the
§ 1981 claims—the only claims challenged on appeal—the
district court concluded either that the plaintiffs failed to
establish that they were meeting Thompson Distribution’s
business expectations, or that they failed to present suffi-
cient evidence of pretext. The plaintiffs appeal.
II.
The district court granted Thompson Distribution sum-
mary judgment on the plaintiffs’ § 1981 race discrimination
claims. This court reviews the grant of summary judgment
de novo, viewing the evidence in the light most favorable to
the non-moving party. Amadio v. Ford Motor Co., 238 F.3d
919, 924 (7th Cir. 2001).
On appeal, the plaintiffs initially argue that the district
court improperly disregarded evidence they presented in
opposing summary judgment and did not consider the
evidence in the light most favorable to their claims. To
support this assertion, the plaintiffs point to a footnote in
the district court’s opinion in which the district court
scolded the plaintiffs for including a “17 page narrative
which is full of immaterial facts and citations to affidavit
paragraphs which contain speculation, opinion, hearsay and
3
(...continued)
auspices of federal discrimination law. See 42 U.S.C. § 2000e(b).
6 No. 05-1654
conclusory statements.” District Court Opinion at 3, n.2. The
district court also reprimanded the plaintiffs for offering up
factual “spin” and for “failing to specify what material facts
are truly in dispute . . . .” Id. The plaintiffs maintain that this
footnote shows that the district court seemingly adopted
Thompson Distribution’s factual assertions as though they
had gone unrebutted. However, in their brief, the appellants
do not identify any specific evidence the district court
disregarded. In any event, since our review is de novo,
whether the district court improperly ignored the plaintiffs’
proffered evidence is irrelevant now. See Smith v. Cook
County, 74 F.3d 829, 834 (7th Cir. 1996) (“Since we have
conducted a de novo review of the motion for summary
judgment we need not tarry long over these objections.”).
Moving on to the merits: To succeed on a race discrimina-
tion claim under § 1981, plaintiffs may proceed under either
the direct or indirect method. Dandy v. United Parcel Serv.
Inc., 388 F.3d 263, 272 (7th Cir. 2004). Here, the plaintiffs did
not present direct or circumstantial evidence of discrimina-
tion. Instead they rely on the McDonnell Douglas indirect
burden-shifting method. McDonnell Douglas Corp. v. Green,
411 U.S. 792 (1973). This requires plaintiffs to first present
evidence to establish a prima facie case of discrimination,
namely: that they are members of a protected class; that they
were meeting Thompson Distribution’s business expecta-
tions; that they were fired; and that they were replaced by
someone outside the protected class. Foster v. Arthur
Andersen, LLP, 168 F.3d 1029, 1035 (7th Cir. 1999).
This framing of the prima facie case makes the first
element—that the plaintiffs are members of a protected
class—in essence a non-issue, because everyone has a race
(or sex, or national origin). See Steinhauer v. DeGolier, 359
F.3d 481, 484 (7th Cir. 2004). However, in setting forth the
prima facie case in several reverse discrimination suits, i.e.,
No. 05-1654 7
cases brought by a white plaintiff or a man, this court has
required the white/male plaintiffs to “show ‘background
circumstances’ sufficient to demonstrate that the particular
employer has ‘reason or inclination to discriminate invidi-
ously against whites’ [or men] or evidence that ‘there is
something “fishy” about the facts at hand.’ ” See Ineichen v.
Ameritech, 410 F.3d 956, 959 (7th Cir. 2005) (quoting Phelan
v. City of Chicago, 347 F.3d 679, 684 (7th Cir. 2003)). See also
Mills v. Health Care Serv. Corp., 171 F.3d 450, 457 (7th Cir.
1999); Ballance v. City of Springfield, 424 F.3d 614, 617 (7th
Cir. 2005).
At first blush, it might seem that this line of cases altered
the “member of the protected class” element of the prima
facie case for white/male plaintiffs. However, that is not the
case. Rather, this court adopted the background circum-
stances standard because in setting forth the indirect
method in McDonnell Douglas, the Supreme Court stated
that a prima facie case of racial discrimination required the
plaintiff to show, “(i) that he belongs to a racial minority; (ii)
that he applied and was qualified for a job for which the
employer was seeking applicants; (iii) that, despite his
qualifications, he was rejected; and (iv) that, after his
rejection, the position remained open and the employer
continued to seek applicants from persons of complainants’
qualifications.” 411 U.S. at 802 (emphasis added). Thus, as
this court recognized in Hill v. Burrell Com. Group, Inc., 67
F.3d 665, 668 (7th Cir. 1995), overruled on other grounds,
O’Connor v. Consolidated Coin Caterers Corp., 517 U.S. 308(1996), “applying the McDonnell Douglas standard literally
in reverse discrimination cases such as this would prevent
any plaintiff from making out a prima facie case.”
However, “[i]t is well settled law that the protections of
Title VII are not limited to members of historically
8 No. 05-1654
discriminated-against groups.” Ballance, 424 F.3d at 617.
Moreover, the Supreme Court made clear in McDonnell
Douglas that the prima facie case is not inflexible and as
“[t]he facts necessarily will vary in Title VII cases, . . . and
the specification above of the prima facie proof required
from respondent is not necessarily applicable in every
respect in differing factual situations.” McDonnell Douglas,
411 U.S. at 802, n.13. Accordingly, in Mills this court held
that in a reverse-discrimination case the formulation of the
first element, i.e., that “he belongs to a racial minority” as
set forth in McDonnell Douglas, needed modification. Mills,
171 F.3d at 456. As noted above, the modified standard,
adopted by this and other circuits, requires a white/male
plaintiff to establish “ ‘background circumstances sufficient
to demonstrate that the particular employer has ‘reason or
inclination to discriminate invidiously against whites’ or
evidence that ‘there is something “fishy” about the facts at
hand.’ ” Ineichen, 410 F.3d at 959; see also Mills, 171 F.3d at
456; see also Ballance, 424 F.3d at 617. See, e.g., Woods v. Perry,
375 F.3d 671, 673 (8th Cir. 2004); (noting that “[i]n reverse
discrimination cases the plaintiff has also been expected to
show that ‘background circumstances support the suspicion
that the defendant is that unusual employer who discrimi-
nates against the majority.’”) (quoting Duffy v. Wolle, 123
F.3d 1026, 1036 (8th Cir. 1997)); Russell v. Principi, 257 F.3d
815, 818 (D.C. Cir. 2001) (accord); Notari v. Denver Water
Dep’t, 971 F.2d 585, 589 (10th Cir. 1992) (accord) ; Murray v.
Thistledown Racing Club, Inc., 770 F.2d 63, 67 (6th Cir. 1985)
(accord). But see, Iadimarco v. Runyon, 190 F.3d 151, 159-63
(3d Cir. 1999) (rejecting the “background circumstances”
standard, reasoning that it impermissibly imposes a height-
ened standard on white/male plaintiffs, and holding that in
a reverse discrimination case, the plaintiff must merely
“present sufficient evidence to allow a fact finder to con-
clude that the employer is treating some people less favor-
No. 05-1654 9
ably than others based upon a trait that is protected under
4
Title VII”). These same principles apply in the context of a
§ 1981 action. See Bennett v. Roberts, 295 F.3d 687, 697 (7th
Cir. 2002) (“The same standards governing liability under
Title VII apply to § 1981 claims.”) (internal citation omitted).
Therefore, because the plaintiffs are white, we must initially
consider whether they satisfied the modified standard of
proof.
In this case, the plaintiffs, all of whom are white, pre-
sented evidence that their black boss fired them and re-
placed three of them with black employees, the fourth
plaintiff’s job was assumed by a black employee, and the
fifth was not replaced. These facts are sufficient to satisfy
the modified McDonnell Douglas test, applicable to reverse
discrimination cases. That is because, although the plaintiffs
in this case are white, the background circumstances show
that this case is no different than the more typical discrimi-
nation case. Typical discrimination cases often see members
of a racial minority challenging their non-minority em-
ployer’s decision to fire them and hire white replacements.
Analogously, here we have a black employer terminating
white employees and hiring black replacement workers.
These circumstances create the same inference of discrimi-
nation flowing from the more straightforward discrimina-
5
tion cases. Cf. Preston, 397 F.3d at 542 (explain
4
The plaintiffs do not seek reconsideration of the Phelan/Mills
line of cases that established this modified standard in reverse
discrimination, in light of Iadimarco v. Runyon, 190 F.3d 151 (3d
Cir. 1999).
5
In cases involving white decision-makers favoring minorities
over whites, other background circumstances may satisfy the
plaintiffs’ prima facie case. For instance, evidence that those
(continued...)
10 No. 05-1654
ing “[i]t is not surprising when women discriminate in favor
of women any more than it is surprising when men discrim-
inate in favor of men”). Therefore, under these circum-
stances, we conclude that sufficient “background circum-
stances” exist to allow the white plaintiffs to satisfy the
modified first prong of the prima facie case.
Nonetheless, Thompson Distribution argues that it is
entitled to summary judgment because the plaintiffs did not
present sufficient evidence to satisfy the second prong of the
prima facie case—that they were meeting Thompson
Distribution’s business expectations. Alternatively, Thomp-
son Distribution argues that even if the plaintiffs established
a prima facie case, it is still entitled to summary judgment
because it produced evidence of legitimate, non-discrimina-
tory reasons for firing the plaintiffs and the plaintiffs did
not present any evidence of pretext. For each plaintiff,
Thompson Distribution points to evidence to support its
view that the plaintiffs did not meet its business expecta-
tion, or, alternatively, that Thompson Distribution fired
them for legitimate, non-discriminatory reasons. Because
Thompson Distribution’s rationale differs with each plain-
tiff, we will consider them separately below.
5
(...continued)
“running the company are under pressure from affirmative action
plans, customers, public opinion, the EEOC, a judicial decree, or
corporate superiors imbued with belief in ‘diversity’ to increase
the proportion of [minorities] in the company’s workforce,”
would satisfy the modified McDonnell Douglas standard. Preston
v. Wis. Health Fund, 397 F.3d 539, 542 (7th Cir. 2005). See, e.g., id.,(explaining that in a case involving a male discriminating against
another male in favor of a woman, such facts would provide the
necessary background circumstances).
No. 05-1654 11
Before continuing, however, we pause to first discuss the
appropriate analysis for this case. Here, the employer
maintains that the plaintiffs were not qualified for the
position (the second prong of the prima facie case) and that
it fired the plaintiffs for a legitimate non-discriminatory
reason. The plaintiffs respond by arguing that the employer
is lying about both its business expectations and about the
proffered reasons for their termination. Normally a court
should first determine if a plaintiff has established a prima
facie case before subjecting the employer to the pretext
inquiry. Peele v. Country Mut. Ins. Co., 288 F.3d 319, 327 (7th
Cir. 2002) (quoting Coco v. Elmwood Care, Inc., 128 F.3d 1177,
1178 (7th Cir. 1997) (“[I]f a plaintiff fails to demonstrate that
he was meeting his employer’s legitimate employment
expectations, the employer may not be ‘put to the burden of
stating the reasons for his termination.’ ”)). However, if the
plaintiffs argue that they have performed satisfactorily and
the employer is lying about the business expectations
required for the position, the second prong and the pretext
question seemingly merge because the issue is the
same—whether the employer is lying. See Coco, 128 F.3d at
1179 (“The defendant’s expectations are not legitimate if
they are phony; so if they are argued to be phony, the issue
of legitimate expectations and the issue of pretext seem to
merge.”) The plaintiffs still must meet their burden. Id.However, when faced with this same situation in Rummery
v. Ill. Bell Tel. Co., 250 F.3d 553, 556 (7th Cir. 2001), we
reasoned that “[b]ecause the issue of satisfactory job
performance, which lies at the heart of this dispute, must be
analyzed in detail at both stages of the McDonnell Douglas
test, it is therefore simpler to run through that analysis only
once.” See also Gordon v. United Airlines, Inc., 246 F.3d 878,
886 (7th Cir. 2001). Accordingly, as in Rummery, we focus on
the question of pretext, while keeping in mind that if the
12 No. 05-1654
plaintiffs did not present sufficient evidence of pretext, they
also did not show that they were meeting their employer’s
expectations.
A. Mark Brown
Mark Brown worked for Thompson Distribution as a
warehouse manager. Thompson testified in his deposition
that Thompson Distribution fired Brown for two main
reasons: 1) Brown repeatedly cursed and yelled at his
subordinates; and 2) Brown allowed a supplier to remove
boilers from Thompson Distribution which Thompson
believed belonged to him and not the supplier. This evi-
dence satisfied Thompson Distribution’s burden under
McDonnell Douglas to produce evidence of a legitimate non-
discriminatory reason for Brown’s firing. See Rand v. CH
Indus., Inc., 42 F.3d 1139, 1145 (7th Cir. 1994) (explaining
that an employer’s mere production of a legitimate non-
discriminatory reason for its action rebuts the presumption
of discrimination created by the prima facie showing).
At this point, the burden shifts back to Brown to present
sufficient evidence that Thompson Distribution’s reason
was pretextual. Statler v. Wal-Mart Stores, Inc., 195 F.3d 285,
289 (7th Cir. 1999). Pretext “means a dishonest explanation,
a lie rather than an oddity or an error.” Kulumani v. Blue
Cross Blue Shield Ass’n, 224 F.3d 681, 685 (7th Cir. 2000).
Thus, to show pretext, Brown must show more than that
Thompson Distribution’s “decision was ‘mistaken, ill
considered or foolish,’ [and] so long as [the employer]
honestly believes those reasons, pretext has not been
shown.” Ballance, 424 F.3d at 617 (quoting Jordan v. Summers,
205 F.3d 337, 343 (7th Cir. 2000)).
While arguing that Thompson Distribution’s proffered
reasons for his firing were pretextual, Brown admits that he
used profanity at work, but he claims it was nothing more
No. 05-1654 13
severe than “hell” or “damn,” and that he needed to yell
and use this “shop talk” to motivate the individuals hired
by Thompson Distribution, whom Brown claims were
inexperienced and incompetent. As to allowing the supplier
to remove the boiler, Thompson claims that he purchased all
of the assets physically located at Mutual Pipe on November
26, 2001, including the boilers. Brown argues in response
that the supplier owned the boilers and therefore he did
nothing wrong. Specifically, Brown claims that prior to
Thompson’s purchase of Mutual Pipe’s assets, Hague had
arranged to return the boiler to the supplier for credit on its
account, but that the supplier was unable to pick up the
boiler prior to Thompson Distribution taking over. Brown
thus maintains that the boiler belonged to the supplier and
not Thompson Distribution.
In making these arguments, however, Brown does not
comprehend his legal burden. Brown must establish that
Thompson Distribution lied about its reasons for firing
him—not that Thompson Distribution was wrong for firing
him for the reasons it gave. See Stewart v. Henderson, 207
F.3d 374, 378 (7th Cir. 2000) (explaining that our role is
solely to assess whether the justifications given are honest,
not whether the sanction imposed was accurate, wise or
well considered). See also Jordan, 205 F.3d at 344 (“Discrimi-
nation laws serve only to prevent consideration of forbidden
characteristics—like race—but they are not, as we have
repeatedly noted, court-enforced merit selection pro-
grams.”) By admitting to the conduct at issue—swearing,
yelling, and returning the boilers—Brown is left attacking
Thompson Distribution’s leadership and business judgment.
That will not suffice. See Ballance, 424 F.3d at 621 (“We do
not sit as a super-personnel department with authority to
review an employer’s business decision as to whether
14 No. 05-1654
someone should be fired or disciplined . . . .”) Accordingly,
Brown did not present sufficient evidence of pretext.
B. Bernard Dubois
In addition to firing Brown, Thompson Distribution fired
Dubois. In his deposition testimony, Thompson explained
that Thompson Distribution fired Dubois because sales of
hydraulic heating equipment—Dubois’s area of sales—were
very low. This satisfied Thompson Distribution’s burden of
production. The burden then shifted to Dubois to present
evidence that Thompson Distribution’s rationale was
pretextual. Dubois, however, like Brown, admits to the
underlying deficiency—Dubois acknowledges that his sales
were low. Instead, Dubois claims that low sales of hydronic
systems were not “attributable to any failure on his part,”
but rather because Thompson had neither the inventory nor
a vendor for these systems. However, “simply shifting the
blame for a problem does not establish pretext.” Wohl v.
Spectrum Mfg., Inc., 94 F.3d 353, 357 (7th Cir.1996) (citing
Schultz v. General Elec. Capital Corp., 37 F.3d 329, 334 (7th Cir.
1994)). That is because, as explained above, “in determining
whether an employer’s proffered reason for an employment
action was pretextual, we are not concerned with the
correctness or desirability of reasons offered for employ-
ment decisions, but rather the issue of whether the employer
honestly believes in the reasons it offers.” Grayson v. O’Neill,
308 F.3d 808, 820 (7th Cir. 2002). Dubois did not present
“specific evidence from which the finder of fact may
reasonably infer that the proffered reasons do not represent
the truth,” Collier v. Budd Co., 66 F.3d 886, 893 (7th Cir.
1995). Therefore, Thompson Distribution was entitled to
No. 05-1654 15
6
summary judgment on Dubois’s § 1981 claim.
C. Anna Perrey
As to Perrey, Thompson Distribution claims it fired her
because she was insubordinate and unwilling to recognize
Thompson as the new leader. In his deposition, Thompson
stated that when he asked Perrey to perform certain func-
tions, she responded along the lines of “we don’t do it that
way,” or stated that she had to check with Mark Hague. In
response, Perrey claims that she never refused to follow
Thompson’s directions, but rather that she did not know
how to perform the tasks Thompson requested and thus she
needed to check with Mark Hague for guidance. At most,
this means that Thompson was mistaken in his belief that
Perrey was being insubordinate. However, as noted above,
“[p]retext requires more than showing that the decision was
‘mistaken, ill considered or foolish.’ ” Ballance, 424 F.3d at
617 (quoting Jordan v. Summers, 205 F.3d 337, 343 (7th Cir.
2000). To avoid summary judgment, a plaintiff must present
evidence showing that the employer did not honestly
believe his proffered reason. Jordan, 205 F.3d at 343. Perrey
has not done this. Moreover, the record confirms that
Thompson honestly believed that Perrey was being insubor-
dinate. Specifically, in his affidavit, Mark Hague stated that
6
Because Dubois was not replaced, his claim also fails because
he lacks evidence that a similarly situated individual outside the
protected class was treated more favorably. See, e.g., Gadsby v.
Norwalk Furniture Corp., 71 F.3d 1324 (7th Cir. 1995) (holding that
the district court properly granted the defendant summary
judgment where the plaintiff failed to present evidence that he
was replaced by someone outside the protected class).
16 No. 05-1654
Thompson approached him to discuss Perrey’s refusal to
follow his directions. Hague further stated that he told
Thompson that Perrey just did not know how to do what he
was asking her to do. Although Hague did not believe
Perrey was being insubordinate, this testimony confirms
that Thompson did. Without any evidence of pretext, then,
Thompson Distribution was entitled to summary judgment
on Perrey’s race discrimination claim, as well.
D. Cynthia Hague
Thompson Distribution also fired Cynthia Hague. In his
deposition, Thompson explained that he fired Cynthia
Hague because she was not proficient in the accounting
system used by Thompson Distribution and because she
spent office hours working on tasks related to wrapping up
matters pertaining to the predecessor company, Mutual
Pipe. Like the other plaintiffs, Cynthia Hague responds, not
with evidence of pretext, but by complaining about being
fired for these deficiencies. As to the accounting system,
Cynthia admits she was not well versed in the program, but
claims that Thompson knew that when he hired her.
However, Thompson explained in his deposition that he
believed Cynthia was more skilled at the accounting
program than she turned out to be. Cynthia does not
present any evidence to call into question Thompson’s
veracity. Cynthia also admits that she worked on closing out
Mutual Pipe’s books and drawing up a final financial report
for Mutual Pipe, but claims that it was necessary to close
down Mutual Pipe’s records before inputting data relative
to Thompson Distribution. Again, this merely calls into
question Thompson’s judgment—it does not constitute
evidence of pretext.
No. 05-1654 17
E. Mark Hague
Finally, Thompson Distribution fired Mark Hague. In his
deposition, Thompson explained several reasons for Mark
Hague’s firing: Mark Hague (along with Brown) allowed a
boiler that Thompson believed belonged to him to be
returned to a vendor; he sold products to customers at a
margin below that set by Thompson Distribution; and he
believed that Hague had informed several suppliers that
Thompson Distribution would pay for goods and services
that they had supplied to Mutual.
In response, Mark Hague, like the other plaintiffs, focuses
not on whether Thompson honestly fired him for the
proffered reasons, but rather on whether Thompson was
right to fire him for those reasons. For instance, like Brown,
Hague claims that the vendor owned the boilers, not
Thompson Distribution. However, that does not address the
question of whether Thompson honestly believed that he
owned the boilers. Similarly, Mark Hague admits that he
sold products below the margin Thompson set, but claims
that was necessary because he would not be able to obtain
any sales at a higher level. However, that was Thompson
Distribution’s decision and not Hague’s call, and Hague
cannot avoid summary judgment by challenging the
wisdom of that choice. Hague finally claims that he did not
tell suppliers that Thompson would pay for products
Mutual had ordered. The record, however, shows that
Thompson believed that to be the case, so at most, Hague
has shown that Thompson was mistaken—not that he lied.
Because Hague has not presented any evidence of pretext,
Thompson Distribution is entitled to summary judgment on
Mark Hague’s race discrimination claim.
To this point, we have focused on the individual plaintiffs
and their specific responses to Thompson Distribution’s
proffered reasons for their firings. As detailed above, the
18 No. 05-1654
plaintiffs admit to their personal performance problems and
rather than present any evidence showing that Thompson
Distribution did not honestly believe the reasons asserted,
they merely rationalize their deficiencies. In addition to
minimizing their personal performance problems, the
plaintiffs argue that without documentation confirming the
reasons Thompson proffered in his deposition testimony, a
jury trial is required because a jury could disbelieve Thomp-
son.
In support of their position, the plaintiffs cite Dunn v.
Nordstrom, Inc., 260 F.3d 778, 785-86 (7th Cir. 2001), asserting
that in Dunn, this court observed that an employer’s
“inability to produce any documentary—rather than
testimonial—evidence . . . is troubling.” The plaintiffs,
however, misrepresent the holding in Dunn by taking this
quotation out of context and by slicing off the end of the
quote. In Dunn, the employer claimed that it had changed
the plaintiff’s job title, not in retaliation for complaining
about discrimination, but because it had changed the job
titles of all of its midwest employees. In response to that
assertion, this court noted: “Nordstrom’s apparent inability
to produce any documentary—rather than testimo-
nial—evidence relating to the alleged across-the-board
demotion of midwest region internal loss prevention leads
is troubling because one would expect a large corporation to
document the decision to demote so many employees.” Id.(emphasis added) Conversely, with small businesses, one
would not expect the owner to spend the time, or incur the
7
expense, to document individual employment decisions.
7
The added expense of defending employment decisions in
court has an obvious impact on small business owners. In this
(continued...)
No. 05-1654 19
Moreover, in arguing that a lack of documentation
supports a finding of pretext, the plaintiffs confuse Thomp-
son Distribution’s burden with their own burden. An
employer’s burden is a burden of production (not the
burden of proof). Mills v. First Fed. Sav. & Loan Ass’n of
Belvidere, 83 F.3d 833, 845 (7th Cir. 1996). This “burden is not
difficult to satisfy.” Id. An employer need only “articulate[
] lawful reasons for the action; that is, to satisfy this interme-
diate burden, the employer need only produce admissible
evidence which would allow the trier of fact rationally to
conclude that the employment decision had not been
motivated by discriminatory animus. Tex. Dep’t. of Cmty.
Affairs v. Burdine, 450 U.S. 248, 257 (1981). Here, Thompson
Distribution produced admissible evidence in the form of
Thompson’s deposition testimony, and in that testimony,
Thompson explained several lawful reasons justifying the
firing of the five plaintiffs. This satisfied Thompson Distribu-
tion’s burden of production. See, e.g., Rand, 42 F.3d at 1145(mere production of a legitimate non-discriminatory reason
rebuts the presumption of discrimination created by the
prima facie showing).
At this point, the burden remains with the plaintiffs to
present evidence of specific facts that call into question the
veracity of Thompson Distribution’s proffered reasons.
Rand, 42 F.3d at 1146. Merely asserting that a jury could
disbelieve an employer’s reason is insufficient. Id. Likewise,
complaining that Thompson Distribution did not document
the performance problems does not create an inference of
pretext. See Rand, 42 F.3d at 1145 (rejecting plaintiff’s
argument that his employer’s proffered reasons for his
7
(...continued)
case, for instance, Thompson stated that as of June 2003, he had
already incurred legal fees associated with this lawsuit which
total nearly half of the profits he earned in 2002.
20 No. 05-1654
termination were pretextual because the employer never
documented or communicated his performance problems).
This is because in complaining about the lack of documenta-
tion, the plaintiffs are not really challenging the veracity of
Thompson Distribution’s proffered reason, but are rather
attempting to impermissibly increase Thompson Distribu-
tion’s burden from a burden of production to a burden of
proof. This is impermissible. See Burdine, 450 U.S. at 256-57(holding that “the employer’s burden is satisfied if he
simply explains what he has done or produc[es] evidence of
legitimate nondiscriminatory reasons[,]” and reversing the
appellate court’s decision which “required much more: it
placed on the defendant the burden of persuading the court
that it had convincing, objective reasons for preferring the
chosen applicant above the plaintiff”) (internal citations
omitted).
Similarly, the plaintiffs’ complaints that Thompson
Distribution failed to provide any written job descriptions
and failed to conduct performance reviews, or provide them
with information about their performance problems, also
does not constitute evidence of pretext. Id. Again, as a small
company, it is not surprising that Thompson Distribution
did not conduct any formal performance reviews or provide
written job descriptions. Such formalities are time-consum-
ing and costly. In fact, Anna Perrey testified that she never
received a performance review while working for Mutual.
The record also indicates that Mutual lacked detailed job
descriptions as well, as in taking over Mutual, Thompson
Distribution asked the employees to fill out desk procedures
for their jobs. Moreover, although Thompson Distribution
did not conduct formal job reviews, the record shows that
Thompson spoke to the plaintiffs on numerous occasions
about their performance problems. Regardless, as noted
above, the failure to communicate performance problems
No. 05-1654 21
does not constitute evidence of pretext. Rand, 42 F.3d at
1145.
The plaintiffs all also complain that at the time of their
firing, Thompson did not tell them why they were being
fired. That is not quite true. In firing the plaintiffs, Thomp-
son told the plaintiffs either that they did not fit in the
company or that the company would be moving forward
8
without their services. Although Thompson did not tell the
plaintiffs the specific reasons they did not “fit,” the fact that
Thompson did not elaborate does not constitute evidence of
9
pretext.
The plaintiffs further attempt to avoid summary judgment
by arguing that because Thompson Distribution did not
follow the progressive disciplinary structure set forth in the
8
On appeal, Perrey also asserts that in firing her Thompson told
her she had not done anything wrong and that that constitutes
evidence that Thompson Distribution’s proffered reasons were
pretextual. That is not quite the exchange that took place, at least
according to Perrey’s deposition testimony. Perrey stated in her
deposition that after Thompson fired her she asked “[d]id I do
something wrong?” Perrey testified that Thompson responded,
“No,” but that when she pressed him further, he explained: “No.
You just don’t fit in with the future of Thompson Distribution.”
That explanation is entirely consistent with the rationale Thomp-
son provides for firing Perrey—that she was insubordinate and
unwilling to recognize Thompson as the new leader.
9
Plaintiffs cite Wilson v. AM General Corp., 167 F.3d 1114, 1116,
1121 (7th Cir. 1999), for the proposition that failing to provide a
reason for a termination constitutes evidence of pretext. Wilson,
however, involved an employee fired after thirteen years of
service, as opposed to a probationary employee. Moreover,
unlike the plaintiffs in this case, Wilson had past exemplary
performance evaluations. Thus, Wilson is distinguishable.
22 No. 05-1654
company handbook, Thompson Distribution’s reasons for
firing them were pretextual. The handbook, while establish-
ing a progressive disciplinary structure, also reserved for
Thompson Distribution the right to fire employees (includ-
ing those who were not probationary) immediately, provid-
ing: “The company may decide, in its discretion, that a first
offense in a specific situation will result in discharge.”
Because Thompson Distribution did not violate its own
policies, this does not constitute evidence of pretext. Rand,
42 F.3d at 1145 (holding that since the employer’s policy did
not obligate the employer to communicate problems, the
failure to do so does not constitute evidence of pretext).
Compare with Pryor v. Seyfarth, Shaw, Fairweather & Geraldson,
212 F.3d 976, 980 (7th Cir. 2000) (holding that where an
employer’s progressive disciplinary policy precluded the
plaintiff’s firing, that constituted evidence of pretext)
10
(emphasis added).
As detailed above, the plaintiffs did not present any
evidence that Thompson Distribution’s proffered reasons
for their firing were pretextual. At oral argument, the
10
Thompson testified in his deposition that the progressive
disciplinary mechanism did not apply to employees during the
ninety-day trial period. The plaintiffs argue in response that the
Handbook did not exclude probationary employees from the
progressive disciplinary structure. However, the Handbook
expressly provided that: “A 90-day trial period is provided for
new employees to evaluate the opportunities of continued service
with the company and, likewise, for the company to evaluate the
new employee for continued service with the company.” It would
not make sense to apply a progressive disciplinary structure
during a 90-day trial period, but since the Handbook expressly
provided for discharge for the first offense, whether the progres-
sive disciplinary mechanism applied to probationary employees
is immaterial.
No. 05-1654 23
plaintiffs’ attorney made a last-ditch effort to avoid sum-
mary judgment by repeatedly stressing the racial composi-
tion of Thompson Distribution’s workforce. In fact, after
“may it please the court,” the plaintiffs’ attorney’s next
sentence was: “By admission of even the defendant this is a
case of the only five caucasians working and employed at
Thompson Distribution being fired simultaneously by an
African-American business owner . . . .” We then asked:
“You said they were the only five. There were fourteen
employees, right.” The plaintiffs’ attorney responded,
“exactly,” and this court continued: “And all the rest were
black?” The plaintiffs’ attorney then stated: “That is my
knowledge. And that has not been disputed in the record.”
Later, in the oral argument, when the plaintiffs’ attorney
continued to argue for a jury trial, this court again returned
to the issue of the racial composition of the workforce, by
asking whether the plaintiffs’ attorney’s position was that
without documentation of a performance problem, a jury
trial is required because of “[t]he fact that all of the white
people were fired and replaced by black people.” The
plaintiffs’ attorney responded: “Yes, that’s the fundamental
11
point.”
However, this fundamental point is flawed both factually
and legally. First, contrary to the plaintiffs’ attorney’s
representation, the record, or at least those portions pro-
vided to this court, establishes that when Thompson
Distribution began operations, in addition to the five white
plaintiffs, Thompson Distribution also hired Mary Coleman
and Bob McClellan, both of whom were white, as part of the
11
In concluding his argument, the appellants’ attorney once again
stressed the need for a jury trial, where “you have five whites, the
only whites employed at the time at Thompson Distribution, all
replaced by African-Amercians, except one. . . .”
24 No. 05-1654
12
initial fourteen-person workforce. The record also shows
that although Thompson never replaced Dubois with a
salesperson dedicated to handling hydraulic sales, after
firing Dubois, Thompson Distribution hired David Shank,
who is white, to handle sales. The plaintiffs also ignore
evidence showing that Thompson Distribution, which at the
time of summary judgment only employed nine employees,
had during its time of operations terminated at least six
black employees. Thus, contrary to the plaintiffs’ portrayal,
we do not have here a case of a black business owner firing
only white employees and hiring only black replacements.
Moreover, even if we had that case, legally that is insuffi-
cient to establish pretext. The plaintiffs must do more than
merely point to race and proclaim: “Aha! Discrimination.”
We stressed this point in Millbrook v. IBP, Inc., 280 F.3d 1169,
1176-77 (7th Cir. 2002), wherein the plaintiffs attempted to
create an inference of discrimination by pointing to “the fact
that no blacks were hired during a two-year time frame . . .
.” We held in Millbrook that, at best, such evidence was
anecdotal, and that we “cannot find discrimination on such
a thin basis.” Id. at 1177 (quoting Kuhn v. Ball State Univ., 78
F.3d 330, 332 (7th Cir. 1996)). As we explained, if the
plaintiffs rely on the racial composition of a workforce as
evidence of discrimination it must “subject all of the em-
ployer’s decisions to statistical analysis to find out whether
[race] makes a difference.” Id. (quoting Kuhn, 78 F.3d at
332.) Thus, like Millbrook, without knowing how many
positions became available during the relevant time frame,
the number and race of the candidates applying for those
positions, and the candidates’ relative qualifications, “[s]uch
a list is next to worthless.” Millbrook, 280 F.3d at 1177. See
12
The record also shows that Thompson Distribution did not fire
the plaintiffs simultaneously, but rather fired the Hagues on
February 15, 2001, and the remaining plaintiffs one week later.
No. 05-1654 25
also Odom v. Frank, 3 F.3d 839, 849 (5th Cir. 1993) (raw data
of age, race, and location of persons promoted from
1980-1983, “without more, is not competent to prove
anything”). Lacking such evidence here, the plaintiffs’ focus
on the racial composition of the workforce is misplaced,
both factually and legally.
III.
Thompson Distribution hired the five plaintiffs for a
ninety-day trial period. As that period neared its end,
Thompson Distribution decided that the plaintiffs were not
a good fit, for a variety of reasons. The plaintiffs admit to
the underlying conduct at issue, but rationalize and mini-
mize their failures. However, this court is not a personnel
director, judging the fairness of employment decisions.
Rather, this is a discrimination case, and to avoid summary
judgment, the plaintiffs must present evidence of pretext.
They did not do so. Accordingly, the district court properly
granted Thompson Distribution summary judgment on the
plaintiffs’ § 1981 race discrimination claim. We AFFIRM.
26 No. 05-1654
A true Copy:
Teste:
_____________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—2-7-06