Deborah D. Skinner v. Maritz, Inc. ( 2001 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 00-2569
___________
Deborah Denise Skinner, *
*
Appellant, *
* Appeal from the United States
v. * District Court for the
* Eastern District of Missouri.
Maritz, Inc., *
*
Appellee. *
___________
Submitted: February 12, 2001
Filed: June 12, 2001
___________
Before WOLLMAN, Chief Judge, BOWMAN, and MORRIS SHEPPARD ARNOLD,
Circuit Judges.
___________
BOWMAN, Circuit Judge.
Deborah Skinner, an African-American woman, was an at-will employee of
Maritz, Inc., for nineteen years. In 1997, Maritz terminated Skinner's employment for
unsatisfactory performance. Skinner sued under 42 U.S.C. § 1981 (1994), claiming
that Maritz discriminated against her and ultimately terminated her employment on the
basis of her gender and race. The District Court granted Maritz summary judgment
after concluding that at-will employees do not have sufficient contractual rights under
Missouri law to sustain a § 1981 claim. We disagree and hold that Skinner's
employment relationship with Maritz was contractual and thus was encompassed under
§ 1981.
I.
Skinner worked in various capacities for Maritz from May 1978 to August 1997.
On August 15, 1997, Maritz, citing Skinner's "unsatisfactory performance," terminated
her employment. On April 5, 1999, Skinner filed a § 1981 claim against Maritz that
alleged she was discriminated against because of her race and gender. Specifically,
Skinner alleged that Maritz condoned racial slurs in the workplace, demanded that she
not communicate with other minority employees, refused to pay her for overtime,
allowed a hostile work environment, and retaliated against her for her previous race-
discrimination complaints.
The District Court granted Maritz's summary judgment motion, holding that
Skinner's § 1981 claim failed as a matter of law. The court concluded that "[u]nder
Missouri law 'at will' employees do not have contractual rights enforceable in the event
of termination." Skinner v. Maritz, Inc., No. 4:99CV156, at 6 (E.D. Mo. May 19,
2000) (order granting summary judgment). Because at-will employment agreements
are not "contractual," the court held, Skinner did not have a "contract" as required by
§ 1981 and she therefore failed to state a cause of action.
We review a district court's grant of summary judgment de novo and apply the
same standards as the district court. Rothmeier v. Inv. Advisers, Inc., 85 F.3d 1328,
1331 (8th Cir. 1996). Summary judgment is proper if the evidence, viewed in the light
most favorable to the nonmoving party, demonstrates that there is no genuine issue as
to any material fact and that the nonmoving party is entitled to judgment as a matter of
law. Fed. R. Civ. P. 56(c); Fisher v. Pharmacia & Upjohn, 225 F.3d 915, 919 (8th Cir.
2000).
-2-
II.
The parties agree that Skinner did not have a written employment contract with
Maritz and was an at-will employee under Missouri law. Employers may discharge at-
will employees without cause and without incurring liability for wrongful discharge
unless the employee falls within a statutory provision that provides to the contrary. See
Panther v. Mr. Good-Rents, Inc., 817 S.W.2d 1, 3 (Mo. Ct. App. 1991). The sole issue
here, then, is whether an at-will employee, employed without a written contract in an
agreement terminable at will by either party, has a "contract" within the meaning of
§ 1981.
Section 1981 guarantees that "[a]ll persons within the jurisdiction of the United
States shall have the same right in every State and Territory to make and enforce
contracts . . . as is enjoyed by white citizens." 42 U.S.C. § 1981(a). In 1989, the
Supreme Court interpreted the "make and enforce" language of § 1981 narrowly,
construing the section to prohibit only discriminatory conduct at the "making" of the
contract and not covering discrimination after the contract's inception. Patterson v.
McLean Credit Union, 491 U.S. 164, 176-77 (1989). In response to Patterson,
Congress amended § 1981 through the Civil Rights Act of 1991, Pub. L. No. 102-166,
105 Stat. 1071. The Act broadened, inter alia, the phrase "make and enforce
contracts": "For purposes of this section, the term 'make and enforce contracts'
includes the making, performance, modification, and termination of contracts, and the
enjoyment of all benefits, privileges, terms, and conditions of the contractual
relationship." 42 U.S.C. § 1981(b) (1994) (emphasis added). Section 1981, as
amended, now clearly prohibits racially discriminatory conduct that occurs from the
inception through the end of a contract.
Skinner argues on appeal that at-will employees have "contracts" under Missouri
law sufficient to maintain a § 1981 claim. Maritz counterargues that Missouri law
clearly provides that at-will employees do not have any contractual rights, and that
-3-
Skinner, therefore, cannot maintain a § 1981 claim premised upon a contract. Both
parties agree that Skinner's authority to maintain her claim turns on the meaning of the
word "contract" as used in § 1981.
This is an issue of first impression in this Circuit. The district courts in this
Circuit that have addressed the issue disagree on the result. Compare Nofles v. State
Farm Mut. Auto Ins. Co., 101 F. Supp. 2d 805, 820 (E.D. Mo. 2000) (holding at-will
employment not contractual under Missouri law and, therefore, plaintiff cannot
maintain § 1981 claim), and Jones v. Becker Group of O'Fallon Div., 38 F. Supp. 2d
793, 796-97 (E.D. Mo. 1999) (same), with Foster v. BJC Health Sys., 121 F. Supp. 2d
1280, 1288-89 (E.D. Mo. 2000) (holding that at-will employee may state claim under
§ 1981), Filbern v. Habitat for Humanity, 57 F. Supp. 2d 833, 835-36 (W.D. Mo. 1999)
(same), and LaRocca v. Precision Motorcars, Inc., 45 F. Supp. 2d 762, 774-77 (D.
Neb. 1999) (same).
Each federal court of appeals that has explicitly decided the issue has held,
however, that an at-will employee may maintain a claim under § 1981 for racially
discriminatory employment practices. See Lauture v. Int'l Bus. Machs. Corp., 216 F.3d
258, 261-62 (2d Cir. 2000) (holding that at-will employee may state § 1981 claim);
Perry v. Woodward, 199 F.3d 1126, 1133 (10th Cir. 1999) (same), cert. denied, 529
U.S. 1110 (2000); Spriggs v. Diamond Auto Glass, 165 F.3d 1015, 1018-19 (4th Cir.
1999) (same); Fadeyi v. Planned Parenthood Ass'n of Lubbock, Inc., 160 F.3d 1048,
1051-52 (5th Cir. 1998) (same). But see Gonzalez v. Ingersoll Milling Mach. Co., 133
F.3d 1025, 1034-35 (7th Cir. 1998) (expressing doubt, in dicta, that at-will employees
may state § 1981 claims).
The parties agree that the federal courts must look to the state-law definition of
"contract" in adjudicating § 1981 claims. Under Missouri law, we find that Skinner's
at-will employment agreement with Maritz had all the essential elements of a valid
contract: offer, acceptance, and bargained-for consideration. See Johnson v.
-4-
McDonnell Douglas Corp., 745 S.W.2d 661, 662 (Mo. 1998). Maritz offered, either
implicitly or explicitly, to pay Skinner for performance of services. Skinner accepted
that offer by performance; she worked for Maritz for nineteen years and Maritz
presumably paid her in regular intervals for the work that she had completed since the
previous pay period. Skinner's performance of services for Maritz served as
consideration for Maritz's promise to pay her for her services. Likewise, Maritz's
promise to pay Skinner for work completed served as adequate consideration for her
performance of her job. The agreement between Skinner and Maritz served both
parties for nineteen years, and—while not in writing—embodied the essential
components of a valid contract. So long as both parties fulfilled their respective duties
and neither party terminated the agreement, as either party was legally free to do
without cause, Skinner and Maritz shared a contractual relationship.1
Maritz cites a multitude of cases for the proposition that at-will employment
relationships are not contractual under Missouri law. See, e.g., Luethans v.
Washington Univ., 894 S.W.2d 169 (Mo. 1995) (en banc); Johnson, 745 S.W.2d at
1
Aside from the fact that Skinner's agreement with Maritz contains all the
requirements of a contract, the legislative history of § 1981 underscores Congress's
intent to include at-will employees; to do otherwise would open a gateway for
employers to harbor a community of employees to which the federal employment
discrimination laws could not apply. Persons employed under an at-will agreement by
companies with fifteen or less employees would be outside the protections of both Title
VII, see 42 U.S.C. § 2000e(b), and § 1981 and, accordingly, without a federal right or
remedy for race discrimination in the workplace. See H.R. Rep. No. 102-40(II), at 2
(1991) ("By restoring the broad scope of Section 1981, Congress will ensure that all
Americans may not be harassed, fired or otherwise discriminated against in contracts
because of their race."); S. Rep. No. 101-315, at 14 (1990) ("The Committee finds that
there is a compelling need for legislation to overrule the Patterson decision and ensure
that federal law prohibits all race discrimination in contracts."). Failing to encompass
at-will employees under the statute runs contrary to Congress's intent in amending
§ 1981, which was to provide a vehicle for every employee to remedy racial
discrimination in the workplace. See, e.g., Fadeyi, 160 F.3d at 1052.
-5-
661; Brown v. Mo. Pacific R.R. Co., 720 S.W.2d 357 (Mo. 1986), cert. denied, 481
U.S. 1049 (1987); McCoy v. Spelman Mem'l Hosp., 845 S.W.2d 727 (Mo. Ct. App.
1993); Morsinkhoff v. De Luxe Laundry & Dry Cleaning Co., 344 S.W.2d 639 (Mo.
Ct. App. 1961). We find these cases inapposite. The great majority of at-will
employment cases in Missouri are wrongful-discharge claims that involve employees
attempting to expand their at-will status to require that the employer provide "cause"
for the employee's discharge. These cases hold that because at-will employees may be
discharged at any time without cause, they cannot successfully sue to vindicate a
contractual right that they do not have. None of the Missouri cases goes as far as
Maritz suggests they all do—that an at-will employee never had, and never could have,
a contract at all. Here, Skinner does not need to show that she could sue Maritz under
Missouri state law for breach of contract or wrongful discharge. She only needs to
show the existence of a contract, which she has done by showing her at-will
employment relationship with Maritz.2 See Main v. Skaggs Cmty. Hosp., 812 S.W.2d
185, 189 (Mo. Ct. App. 1991) ("We therefore hold that under the contract here,
plaintiff was an employee at will.") (emphasis added).
Maritz emphasizes the Missouri Supreme Court's statement in Luethans that
"[a]n essential element to an employment contract is a statement of duration" and
contends that it is fatal to Skinner's § 1981 claim. 894 S.W.2d at 172. We disagree.
The district court in Foster correctly noted that much of the confusion about whether
Missouri at-will employment relationships are based in contract flows from the state
courts' imprecise use of shorthand to differentiate between at-will employees and
employees who may be discharged only "for cause." See 121 F. Supp. 2d at 1288-89.
We understand the court in Luethans to have held not that every Missouri employment
2
Despite the District Court's conclusion to the contrary, § 1981 does not require
an employee to have an exercisable "contractual right" to sue her employer under state
law once the employee is discharged. Patterson rejected the notion that § 1981 requires
a plaintiff to have an independent contractual right to sue under state law. See 491 U.S.
at 182. Section 1981 only requires that the employee have a "contract."
-6-
agreement that fails to include a statement of duration is not a contract, but rather that
an employee must have a statement of duration embodied in his or her employment
contract in order to maintain a state-law claim for breach of the contractually expressed
term of duration. The Missouri courts, in Luethans and elsewhere, merely have limited
the circumstances wherein an employee may sue an employer for wrongful termination
of an employment contract. The Missouri courts thereby have been faithful to the at-
will doctrine, which posits that in an at-will employment relationship either party may
end the relationship at any time without any need to show cause. This cannot be taken
to mean that at-will employees are bereft of any and all contractual rights, e.g., the right
to treat the employer's failure to pay for work done by the employee prior to
termination of the employment relationship as a breach of contract.
III.
Under Missouri law, an employer may discharge an at-will employee for any
reason or no reason, but the employer may not violate § 1981 by discharging an at-will
employee for a racially discriminatory reason.3 We reverse the judgment of the District
Court and remand for further proceedings.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
3
In addition to Skinner's discharge claim, her claim of racially discriminatory
conduct that occurred during her employment is also encompassed by § 1981.
-7-