Lytle v. Household Manufacturing Inc. Appellant's Reply Brief

    IN THE
UNITED STATES COURT OF APPEALS 

FOR THE FOURTH CIRCUIT

No. 86-1097

JOHN S. LYTLE,
Plaintiff-Appellant,
v.

HOUSEHOLD MANUFACTURING, INC. 
d/b/a/ SCHWITZER TURBOCHARGERS

Defendant-Appellee.

On Appeal from the United States 
District Court for the Western District 
of North Carolina, Asheville, Division

APPELLANT'S REPLY BRIEF

JULIUS CHAMBERS 
RONALD L. ELLIS 
PENDA D. HAIR^S9 Hudson Street 

16th FloorNew York,New York 10013 
(212) 219-1900

REGAN MILLER600 South College Street 
Charlotte, North Carolina28202
(704) 372-9870

November 20, 1985



TABLE OF CONTENTS
Table of Authorities ii
STATEMENT OF THE FACTS 1

A. Lytle's Discharge 1

1. Lytle gave notice of his need for 
sick leave on Friday and Saturday,
August 12-13, 1983. 1

2. Lytle attempted to give notice of 
his personal emergency on Thursday
afternoon, August 11, 1983. 2

3. Absence Record of White Employees 3
C. Mr. Lytle's Excused Absence Record 3
D. Lytle's Performance Record 3

ARGUMENT
I. PLAINTIFF'S CLAIMS OF DISCRIMINATORY DISCHARGE AND 

RETALIATION ARE ACTIONABLE CONCURRENTLY UNDER BOTH 
TITLE VII AND SECTION 1981 4

II. PLAINTIFF PRESENTED TRIABLE JURY ISSUES ON HIS § 1981
CLAIM OF DISCRIMINATORY DISCHARGE 7

III. PLAINTIFF PRESENTED TRIABLE JURY ISSUES ON HIS CLAIM
OF RETALIATION UNDER § 1981 11

IV. PLAINTIFF ESTABLISHED A PRIMA FACIE CASE OF
DISCRIMINATORY DISCHARGE UNDER TITLE VII 13

V. THE DISTRICT COURT CORRECTLY DETERMINED THAT 
PLAINTIFF'S CLAIMS OF RACIAL DISCRIMINATION ARE NOT BARRED BY THE DOCTRINE OF COLLATERAL ESTOPPEL 15
A. NORTH CAROLINA STATE COURTS DO NOT GIVE 

PRECLUSIVE EFFECT TO UNEMPLOYMENT
COMPENSATION ADJUDICATIONS 16

3. NORTH CAROLINA'S REQUIREMENTS FOR APPLICATION OF 
THE DOCTRINE OF COLLATERAL ESTOPPEL ARE NOT 
PRESENT IN INSTANT CASE 19



C. DEFENDANT HAS NOT ESTABLISHED THAT PLAINTIFF 
HAD A "FULL AND FAIR OPPORTUNITY TO LITIGATE"
HIS RACE DISCRIMINATION CLAIMS SEFORE THE 
EMPLOYMENTSECURITY COMMISSION 22

CONCLUSION 25

12



TABLE OF AUTHORITIES

CASES: Page
Allen v. McCurry, 449 U.S. 90 (1980) .....................  22
Brady v. Thurston Motor Lines, Inc., 753 F.2d 

1269 (4th Cir.), cert, denied, 84 L.Ed.2d
53 ( 1984 )............................. ..............  22

Brown v. A.J. Gerrard Mfg. Co., 643 F.2d 273
(5th Cir. 1981) ..................................... 15

Carolina Power & Light Co., v. Merritt, 41 
N.C. App. 238, 255 S.E. 2d 225 (N.C.
Ct. App. 1979)   20

Cicala v. Disability Review Board, 288 Md.
254, 418 A.2d 205 (1980) ............................  13

Gairola v. Virginia Dept, of General Serv.,
753 F. 2d 1281 (4th Cir. 1985)........................  6

Goldstein v. Manhattan Industries, Inc. 758 
F.2d 1435 (11th Cir.), cert denied, 88
L.ed. 2d 457 (1985)   8

Haring v. Prosise, 462 U.S. 306 (1983) ...................  23
Hussey v. Cheek, 31 N.C.App. 148, 228 S.E.2d

519 (1976)   22
King v. Grindstaff, 284 N.C. 348, 200 S.E.

2d 799 (1973) ...................................... 19, 21
King v. Neese, 233 N.C. 132, 63 S.E. 2d123 (1951) .......................................... 20
Kremer v. Chemical Construction Corp., 456U.S. 451 (1982) .................................... 16, 22
Mack v. South Bay Beer Distributors, 41 FEPCases (BNA) 1224 (9th Cir. 1986) ...................  23, 24

Miller v. Guiford County Schools, 64 N.C.
App. 729, 303 S.E. 2d 411, cert 
denied, 309 N.C. 321, 307 S.E. 2d
165 ( 1983) ......................................... 21

iii



CASES: Page
Montana v. United States, 440 U.S. 147

163 (1979) ......................................... 23
Moore v. City of Charlotte, 754 F.2d 1100 

(4th Cir.), cert, denied, 105 S. Ct.3489 (1985) ........................................ 13, 15
Roberts v. Wake Forest University, 55 N.C.

App. 430, 236 S.E. 2d 120 cert, denied,305 N.C. 586, 292 S.E. 2d 571 (1982)   16, 17, 18
Ross v. Communications Satellite Corp.,759 F. 2d 355 (4th Cir. 1985)  ....16, 18, 19
State v. Warren, 313 N.C. 254, 328 S.E. 2d256 (N.C. 1985)   16, 17, 20
Texas Dept, of Community Affairs v. Burdine,

450'U.S. 248 (1981) ................................  12, 23
Warren v. Halstead Industries, No. 85-1575,

__ F. 2d __ , 41 FEP Cases (BNA) 1665 ........ 4, 5, 6 , 7, 14
Warren v. Halstead Industries, 613 F.Supp.

499 (M.D.N.C. 1985), aff'd in part,
rev'd in part, 41 FEP Cases (BNA) 1665 .............  5, 7

STATUTES AND RULES:
28 U.S.C. § 1738 ........................................  16
42 U.S.C. § 1981 .........................................passim

§ 1983 ........................................  23
§ 2000e ....•.................................. 12 , 23

Fed. Rule Civ. Proc. 3(c)................................ 16
COMMITTEE REPORTS:
S. Rep. No. 415, 92 Cong., 1st Sess. (1971) .............  6

H.R. Rep. No. 238, 92d Cong., 1st Sess.
(1971) .............................................  6

IV



STATEMENT OF THE FACTS
Defendant asks the Court to accept its version of the facts 

on many issues where the record either provides no support for 
defendant's version or shows that plaintiff introduced 
substantial evidence and that the facts were disputed. Because 
this appeal involves the denial of plaintiff's right to a jury 
trial, the discussion below sets out in detail the evidence which 
was introduced to support plaintiff's factual claims and which 
establishes plaintiff's right to a jury determination on these 
issues.

A . Lytle's Discharge

1. Lytle gave notice of his need for sick leave on Friday 
and Saturday, August 12-13, 1983.

On Thursday, August 11, 1983, John Lytle, who was ill and 
had scheduled a doctor's appointment for the next day, asked to 
take Friday, August 12, 1983, as a vacation day. TR 129-31. It 
was common for employees to request and be granted permission to 
take a vacation day when they were sick, because vacation days 
were not counted as absences under Schwitzer's absence policy.
TR 208. When supervisor Miller stated "if you're off Friday you 
have to work Saturday," Lytle "explained to him that I wanted 
Friday off to go to see the doctor, and I wouldn't be able to 
work Saturday because I was ohvsicallv unfit." TR 131-32.

In addition to informing supervisor Miller, on Thursday 
afternoon Lytle also informed the Human Resources Counselor, 
Judith Boone, of the various problems that he had experienced 
with Miller, including: "I had to go to the doctor on Friday.



And he wanted me to work Saturday and I was unfit —  I was 
unable, physically unable, to work that Saturday." TR 137.
Boone "said she would have a talk with Mr. Miller." TR 138.

Lytle's testimony on this point is supported by his doctor. 
There is no doubt that Lytle was actually ill. In fact, Dr. 
Caldwell advised him to take even more time off from work. TR 
139-41 (Lytle), 199-200 (Dr. Caldwell). Defendant has never 
explained why an employee who was actually sick, who had a 
doctor's appointment and who could have obtained a doctor's 
excuse if one were needed, 1 would seek to mislead his employer 
about those facts.

2. Lytle attempted to give notice of his personal
emergency on Thursday afternoon, August 11, 1983.

Lytle left work at his normally scheduled time on Thursday, 
August 11, 1983. The record does not reflect whether Lytle was 
scheduled to work overtime on that date. See TR 170-71.2 
However, in any event, Lytle attempted to inform Miller of his 
need to take care of a family emergency and was prevented from 
doing so by Miller's yelling and refusal to listen. TR 133-36. 
When Miller acted abusively, Lytle took appropriate action to 
notify his employer by discussing the incident with the Human

1Nothing in defendant's absence policy or otherwise in the 
record suggests that Schwitzer required a written doctor's excuse 
for a two-day sick leave. Thus, it is not surprising that Lytle 
did not seek such an excuse from Dr. Caldwell. Lytle followed 
the standard procedure of giving his supervisor oral notice of 
the medical reason for the absence. See TR 194.

2The fact that supervisor Miller saw Lytle preparing to 
leave and said nothing about overtime suggests that Lytle was not 
scheduled for overtime on that Thursday. See TR 136.

2



Resources Counselor, Ms. Boone. TR 137-33.
3. Absence Record of White Employees
Defendant claims that Greg Wilson, a white employee who 

received a warning for "excessive unexcused absence," had only 
eight hours and six minutes of unexcused absence. Appellant's 
3rief at 18 n.12. This assertion is not supported by the record. 
Wilson had one day unexcused and one day excused absence, of 
eight hours each. TR 33-34, PX 14-3, 14-C. In the same twelve 
month period, Wilson had three tardies. PX 14-B.3 The record 
does not indicate the number of hours of absence for these 
tardies.

C. Lytle's Excused Absence Record
Defendant erroneously asserts that Lytle violated the 

company's absence policy by having excused absences in excess of 
4% of total work time. Appellee's Brief at 17 & n.ll. One of 
the computer printouts introduced by plaintiff shows that for a 
one month period, Lytle had excused absences in excess of the 4% 
limit. PX 26-B. However, "excessive absence" is not computed on 
a monthly basis, but rather on a 12 month rolling average. PX 
22,p.3; TR 32, 34, 51.

D . Lytle's Performance Record
Defendant attempts to paint Lytle as an unproductive, 

problematic employee. In fact, the record establishes that

■^Notwithstanding the lack of any factual basis, the District 
Court erroneously treated Wilson's three unexcused tardies as 
only 2 minutes each. TR 258. The Court may have confused Wilson, 
with Charles Owens, who was warned for an absence of .2 hours. TR 
39-40. See also TR 251-52.

3



Lytle's inability on some occasions to meet a production quota 
was not his fault, but was caused by mechanical problems with the 
machines over which he had no control. TR 126, 128-29, 187-89,
PX 26-B.4 Plaintiff presented evidence that he "was producing 
as well as anybody else within the department." TR 219. The 
record also establishes that the minor disciplinary warnings 
given to Lytle were no more serious than the disciplinary records 
of white machinists who were not fired. 5

ARGUMENT
I. PLAINTIFF'S CLAIMS OF DISCRIMINATORY DISCHARGE AND 

RETALIATION ARE ACTIONABLE CONCURRENTLY UNDER BOTH 
TITLE VII AND SECTION 1981
On October 2, 1986, this Court in Warren v. Halstead

Industries, No. 85-1575, ___ F.2d ___, 41 FEP Cases (BNA) 1665,
decided two of the major issues raised on this appeal. The Court 
concluded both that § 1981 claims can be litigated concurrently 
with similar Title VII claims, and that § 1981 encompasses claims

defendant improperly relies upon alleged facts not in the 
record regarding Lytle's production levels. See Appellee's Brief 
at 5 n.3.

5For example, Donald Rancourt was counseled regarding low 
efficiency and excessive down time on eight occasions between 
April, 1983 and March, 1984. PX 15-D. Both Greg Wilson, PX 14-D, 
and Donald Rancourt, PX 15-C, had the same annual performance 
evaluation —  "very nearly meets position requirements" —  and 
the same types of suggestions for improvement as did Lytle.

It is clear that defendant's detailed recitation of Lytle's 
few disciplinary warnings over several years of employment is for 
the sole purpose of prejudicing this Court against Lytle. 
Defendant has never claimed that Lytle's prior performance or 
disciplinary record had anything to do with his discharge.
Rather, defendant has consistently maintained that Lytle was 
fired solely because of his absences on August 11-13, 1983.

4



of retaliation for filing EEOC charges.
Plaintiff® in Warren joined causes of action under both 

Title VII and § 1981, alleging that he was discharged in 
retaliation for filing EEOC charges. 41 FEP Cases (BNA) at 1666. 
The District Court expressed doubt "whether a claim for 
retaliatory discharge for filing a charge of discrimination with 
the EEOC is actionable under 42 U.S.C. § 1981," but nonetheless 
"for purposes of its decision ... considered the retaliatory 
discharge claims to be properly before it under both Section 1981 
and Title VII." 613 F. Supp. 499, 501 n.l (M.D.N.C. 1985).

This Court first concluded:
Both Title VII and section 1981 claims are independent 
of each other, and the remedies available under each, 
although related, are separate, distinct and 
independent. ... For purposes of this appeal, we will
treat proof of the Title VII and section 1981 claims 
together.

41 FEP Cases (BNA) at 1671. After finding that the District 
Court's dismissal of plaintiff's retaliation claim was clearly 
erroneous, the Court remanded both the Title VII and the § 1981 
claims to the District Court for consideration of relief. 41 FEP 
Cases (3NA) at 1677.

The decision in Warren v. Halstead constitutes an 
unambiguous rejection of defendant's argument that Title VII and 
§ 1981 claims based on the same facts are not actionable in the 
same proceeding. The Court analyzed plaintiff's Title VII and §

®Although two plaintiffs —  Alfred and Alvin Warren —  were 
involved in the Warren case, only Alvin raised a § 1981 claim on 
appeal. Thus, this brief will discuss the facts of only Alvin's 
case.

5



1981 claims "together," and concluded that plaintiff is entitled 
to relief on both claims.

In addition, Warren holds that retaliation is actionable 
under § 1981. The only claim with regard to plaintiff’s 
discharge that was considered by this Court was retaliation for 
the filing of EEOC charges. See 41 FEP Cases (SNA) at 1666. In 
concluding that plaintiff's discharge violated § 1981, the Court 
implicitly held that such retaliation constitutes discrimination 
on the basis of race, within the meaning of § 1981.

In arguing that Title VII preempts § 1981, defendant asserts 
that the Supreme Court has misinterpreted the legislative history 
of Title VII. Appellee's Brief at 29-33, 36 n.25. In view of 
the fact that Supreme Court precedents are binding upon this 
Court, plaintiff will not engage in a lengthy reply to 
defendant's reading of this legislative history. Plaintiff 
simply notes that defendant's strained reading of the legislative 
history ignores both the House and Senate Reports —  the most 
authoritative source of congressional intent —  wherein Congress 
emphasized that "the individual's right to file a civil action in 
his own behalf pursuant to ... § 1981 ... is in no way affected 
[by Title VII]." H.R. Rep. No. 238, 92d Cong., 1st Sess. 18-19 
(1971). See also S. Rep. No. 415, 92 Cong., 1st Sess. 24 (1971). 
Plaintiff's opening brief refutes defendant's further contention 
that Title VII and § 1981 claims based on the same facts may not 
be joined in the same proceeding. See also Gairola v. Virginia 
Pent, of General Serv., 753 F.2d 1281, 1283 (4th Cir. 1985)

6



(concurrent bench trial on Title VII claims and jury trial on § 
1981 claims).

Defendant's arguments that § 1981 dees not encompass 
retaliation are similarly flawed. Defendant relies on several 
district court cases which were later discredited by more recent 
Court of Appeals decisions binding on those district courts. See 
Appellant's Brief at 32, n.20. 7 Defendant asserts, without any 
explanation, that the more recent Court of Appeals decisions "are 
not in keeping with the statutory intent of Section 1981." 
Appellee's Brief at 38 n.27. Defendant fails to note that all 
five of the federal Courts of Appeals that have considered this 
question (not counting this Court's recent decision in Warren v. 
Halstead), as well as numerous federal district courts, have 
found coverage of retaliation essential to achievement of the 
purpose of § 1981. See cases cited in Appellant's Brief at 32, 
nn. 18-19.
II. PLAINTIFF PRESENTED TRIABLE JURY ISSUES ON HIS SECTION 1981

CLAIM OF DISCRIMINATORY DISCHARGE
Defendant appears to suggest that a trial court's dismissal 

under Title VII for failure to establish a prima facie case also 
requires dismissal under § 1981. As discussed in plaintiff's 
opening brief and in Part IV below, the District Court 
erroneously concluded that plaintiff had not established a prima

7The only other authorities cited by defendant on this point 
are the District Court opinion in Warren v. Halstead, which was 
overturned by this Court 29 days before the filing of defendant's 
brief, and a lone district court decision from the Western 
District of Wisconsin that includes no analysis of the question. 
See Appellee's Brief at 38-39.

7



However,facie case of discriminatory discharge under Title VII. 
regardless of this Court's ruling on the Title VII issue 
plaintiff should have been granted a jury trial on the § 1981
claim of discriminatory discharge.

The question is not whether the standard for a prima facie 
case is that same under Title VII and § 1981, but rather who 
decides the facts that determine whether a prima facie case has 
been established. As set forth in detail in plaintiff's opening 
brief, the trial court decided disputed issues of fact in ruling 
on defendant's motion to dismiss. Under § 1981, these issues of 
fact are for the jury. 8 The Court's role in a jury trial is 
limited to instructing the jury on the standards for establishing
a prima facie case.

Defendant appears to suggest that the question whether 
Schwitzer treated "excessive excused absences" and "excessive 
unexcused absences" of equal seriousness is not triable to the 
jury. As discussed in Part IV below, there was absolutely no 
evidence to support the trial court's conclusion that Schwitzer 
had a policy of treating these types of excessive absence 
differently. On the other hand, plaintiff at least submitted 
sufficient evidence to go to the jury on this question.
Plaintiff presented the absence policy itself and the testimony 
of defendant's Human Resources Counselor, both of which estaolish

3See On 1 ristein v. Manhattan Industries^Inc^., 758 F.2d 1435,
1 4 4 3 (llth Cir.), cert, denied, 88 L.Ed.2d 457 (1985). ( Whethe.
a prima facie case of discrimination has been shown m  any given 
situation is essentially a factual question. ).

3



that in terms of penalty, defendant drew no distinction between 
the two categories of "excessive" absences. PX 22, p.3, TR 19.9

Plaintiff also is entitled to a jury trial because the 
district court made findings of fact on disputed issues in 
concluding that plaintiff had excessive unexcused absence of 9.8 
hours. Defendant argues 1) that Lytle did not inform supervisor 
Miller of his reason for leaving on the afternoon of Thursday, 
August 11, 1983; and 2) that Lytle never asked to take Friday,
August 12 or Saturday, August 13, as a sick day. Appellee's 
Brief at 19-20.

The admitted fact that Lytle did not inform supervisor 
Miller of his reason for leaving at the normally scheduled time 
on Thursday, August 11, is irrelevant, since Miller's 
unreasonable conduct made such notice impossible. Miller's 
abusive conduct in refusing to listen to Lytle surely could be 
accepted by a reasonable jury as a sufficient reason for Lytle's 
technical failure to give notice to Miller. Moreover, when 
Miller would not listen, Lytle informed the Human Resources 
Counselor of his reason for leaving, thus doing as much as he 
possibly could to satisfy Schwitzer's notice requirement. See TR 
60 .

Defendant's assertion that Lytle failed to ask for sick

defendant implicitly concedes that this is a question of 
fact for the jury under §1981, by arguing that the District 
Court's Rule 41(b) dismissal of the Title VII claim rested on 
fact findings subject to the clearly erroneous rule. Appellee's 
3rief at 13.

9



leave is not supported by the record. 1 0 Lytle testified that he 
informed Miller that he was "physically unable to work" on Friday 
and Saturday, August 12-13. Although Lytle apparently did not 
add the words "and therefore I request to treat those days as 
sick leave," a reasonable jury could conclude that Lytle had 
adequately informed Miller of his need for a medical absence. 
Schwitzer's own absence policy does not require that the employee 
use the words "sick leave," but merely that the absence be
"scheduled" with the supervisor. 1 1

Defendant also relies upon the fact that Lytle did not call
in his absences on Friday or Saturday morning. However, when 
notice has previously been given, the absence policy does not 
require same-day reconfirmation of scheduled absences. Rather, 
the policy requires that "anticipated" absences be scheduled in 
advance. PX 22, p. 1. Only "[u]nplanned circumstances requiring 
time off" must be called in "no later than the start of the 
employee's work shift." Id.

All of the factual issues discussed above are classic jury 
questions. Resolution of the factual disputes will turn almost 
totally on credibility determinations. Such determinations are

10To suooort its factual allegation on this point, aefenaant 
improperly relies upon testimony that it wouid^haye introduce 
had the trial court not dismissed the complain^ at the ciose 
plaintiff's evidence. See Appellee's Brief at 6 n.5.

11The absence policy requires that "employees should attempt 
to schedule anticipated absence ... with their supervisor as soon 
as possible in advance of the time lost, out no late than th 
end of the shift on the previous work day. PX 22, p.

10



the constitutional province of the jury. 1 2

III. PLAINTIFF PRESENTED TRIABLE JURY ISSUES ON HIS SECTION 1981 
CLAIM OF RETALIATION
Plaintiff agrees with the District Court that the § 1981 

retaliation claim raised triable questions of disputed fact. See 
TR 257 (denying defendant's motion for Rule 41(b) dismissal of 
Title VII retaliation claim). Plaintiff submitted evidence that 
on at least one occasion close in time to Lytle's discharge, 
defendant gave a very favorable letter of reference to an 
involuntarily terminated employee. TR 214, PX 10. The only

12In addition, plaintiff established triable issues of fact 
for the jury as to whether he was granted a vacation day for at 
least one of days he was absent. . Lytle testified that Miller 
granted Friday as a vacation day. TR 132, 191. If even one day 
of Lytle's absences was properly excused, he would have at most 
slightly over one day of unexcused absence. In considering 
these facts, particularly when compared to the unexcused absence 
record of Greg Wilson, a reasonable jury could easily conclude 
that Lytle's termination was discriminatory. In fact, Mr.
Wilson's situation is almost identical to what defendant claims 
is Mr. Lytle's situation. As noted above, Mr. Wilson had 
somewhat more than one day of unexcused absence.

Similarly, Lytle presented a triable issue as to whether 
Schwitzer applied a uniform policy of mandatory overtime.
Although Schwitzer's absence policy suggested that overtime could 
be mandatory, Lytle testified that this had never been the actual 
practice. TR 94. Defendant's own evidence supports Lytle's 
understanding that mandatory overtime was not enforced.
Defendant (improperly relying upon alleged facts not in the 
record) asserts that Lytle "had worked only 17 of 28 scheduled 
overtime hours in the previous three weeks."

Moreover, even under Schwitzer's policy, an exemption from 
mandatory overtime will be granted if a replacement employee can 
be found. TR 223; PX 22, p.3. Lytle presented evidence that a 
replacement employee was available and actually worked Lytle's 
machine on Saturday, August 13. TR 183, 224-25; PX 26-C, p.ll.
On these facts, a reasonable jury could conclude that Schwitzer's 
application of its overtime policy to Lytle was a discriminatory 
aberration.



evidence to rebut this showing of retaliatory disparate treatment 
was the testimony of two of defendant's employees. Judith Boone, 
the Human Resources Counselor, testified that defendant had given 
"neutral" references to other employees. TR 265. Significantly, 
however, Boone did not produce copies or state the date of these 
alleged neutral references. Thus, Boone's personal credibility 
is at stake on this issue and should be determined by the jury. 
See e.q., Texas Dept. of Community Affairs v. Burdine, 450 U.S. 
248, 256 (1981)(plaintiff can establish pretext by convincing 
trier of fact that defendant's articulated reason for disparate 
treatment is not credible).

Similarly, Lane Simpson testified that the favorable 
letter of reference was a mistake, but produced no written policy 
statement or other corroborative evidence. TR 270. Again, the 
credibility issue should be submitted to the jury.

Defendant argues that plaintiff did not establish that the 
so-called "neutral" job reference was an "adverse action." 
Appellee's Brief at 23-24. However, defendant's extremely 
narrow definition of an "adverse action" is unwarranted. Any 
action that treats the plaintiff less favorably than employees 
who did not file EEOC charges is "adverse. " 1 3

Defendant also suggests that plaintiff did not show that 
prospective employers relied upon the so-called "neutral"

13Title VII prohibits any "discrimination" in retaliation 
for protected activity, 42 U.S.C. § 2000e-3. Plaintiff presented 
evidence that a letter of reference such as that given to Joe 
Carpenter would have been helpful to Lytle's employment search.
TR 116-18.

12



reference in denying him employment. This is not true. For 
example, Steven Yates testified that although Lytle was qualified 
for a warehouse worker position for which his company was hiring, 
he had difficulty obtaining a reference from Schwitzer and thus 
decided not to pursue Lytle's application. TR 108-112, 114-15. 
Moreover, this point goes to the damages that plaintiff suffered, 
and not to the existence of retaliation.
IV. PLAINTIFF ESTABLISHED A PRIMA FACIE CASE OF DISCRIMINATORY

DISCHARGE UNDER TITLE VII
As discussed in detail in plaintiff's opening brief, 

defendant's own absence policy treated "excessive" excused and 
unexcused absences the same. Appellant's Brief at 3S-41. 
Plaintiff further pointed out that the case upon which defendant 
primarily relies, Moore v. City of Charlotte, 754 F.2d 1100 (4th 
Cir.), cert, denied, 105 S.Ct. 3489 (1985), mandates that the 
District Court defer to the employer's characterization of the 
seriousness of disciplinary offenses.

Defendant's only response to these arguments is the 
factually unsupported assertion that "Schwitzer is justified in 
treating excused and unexcused absences differently." Appellee's 
Brief at 16 (emphasis in original) . 1 4 However, as plaintiff has 
explained, there is absolutely nothing in the record to support 
the assertion that Schwitzer as a general matter treated

14Defendant makes the further unsupported factual assertion 
that Lytle's conduct was insubordinate. Appellee's 3rief at 17. 
This reason for Lytle's discharge was not asserted in the trial 
court and the District Court made no such finding.

13



"excessive" excused and unexcused absences differently.
Plaintiff also noted in his opening brief that evidence of

other incidents of race discrimination against Lytle supported
the prima facie case. Defendant responds that such use of
general evidence of discriminatory conduct by an employer would
render the prima facie case requirement "meaningless."
Appellee's Brief at 19 n. 13. However, in a discriminatory
discharge case this Court recently ruled:

Evidence of a general atmosphere of discrimination may 
also be considered. ... Even where such past 
discriminatory acts are time barred for purposes of a 
particular claim, the Supreme Court has stated that 
this type of showing 'may constitute relevant 
background evidence in a proceeding in which the status 
of a current practice is at issue, [citation omitted].

Warren v. Halstead Industries, 41 FEP Cases (BNA) at 1670.
Warren v. Halstead also establishes that the requirements

set out in Moore v. City of Charlotte for proof of discriminatory
discharge are not to be rigidly applied regardless of the
circumstances. The Court in Warren did not require proof that
other employees committed offenses "similar" to those allegedly
committed by plaintiff and were not fired. Rather, the Court
apparently found that a prima facie case of discriminatory
discharge had been established by proof of "the timing of his
EEOC charge and his discharge which occurred approximately two
weeks later, together with the subjective nature of many of his
alleged job deficiencies." 41 FEP Cases (BNA) at 1673 (emphasis

14



added).15
V. THE DISTRICT COURT CORRECTLY DETERMINED THAT PLAINTIFF'S 

CLAIMS OF RACIAL DISCRIMINATION ARE NOT BARRED BY THE 
DOCTRINE OF COLLATERAL ESTOPPEL
While strenuously maintaining that plaintiff's Title VII and 

§ 1981 claims of discriminatory discharge1 6  * are barred by the 
doctrine of collateral estoppel, defendant's brief fails to 
mention that this argument was rejected by the District Court.
The District Court denied defendant's motion for summary judgment 
on the ground that "there is a genuine issue as to material 
facts." Order dated May 17, 1985 (Pleading No. 19).
Thereafter, defendant did not introduce any additional evidence 
to support its collateral estoppel argument. 1 8

16The Court did not indicate precisely what facts 
established a prima facie case, but recited the District Court's 
conclusion that the facts described above "possibly" established 
a prima facie case. However, it is clear that the Court 
determined that a prima facie case existed, because it went on to 
analyze the defendant's articulated reasons for pretext. Compare 
Moore v. City of Charlotte, 754 F.2d at 1110. See also Brown v.
A.J. Gerrard Mfq. Co., 643 F.2d 273, 276 (5th Cir. 1981).

16There is no claim that plaintiff's retaliation claims are 
barred by collateral estoppel, since those claims arose after his 
discharge and were not before the North Carolina Employment 
Security Commission.

^Defendant's motion for summary judgment raised several 
different arguments and the District Court did not address each 
issue separately. Thus, it is not clear whether the District 
Court's rejection of the collateral estoppel argument was based 
on legal or factual deficiencies in the argument. As discussed 
below, the District Court's ruling is supported on both grounds.

18The only evidence submitted by defendant to support its 
collateral estoppel argument was a copy of decisions on 
plaintiff's claims for unemployment compensation, rendered by the 
State Employment Security Commission (ESC) and the Superior 
Court. However, defendant did not submit any transcripts or other 
parts of the record before the ESC or the Superior Court.



The "full, faith and credit" mandate of 28 U.S.C. §1738, 
requires federal courts to give preclusive effect to state 
administrative or judicial determinations to the extent that 
state courts themselves would do so. Kremer v. Chemical 
Construction Coro., 456 U.S. 461, 466 (1982). As this Court 
recently noted, the role of a federal court in deciding a motion 
for collateral estoppel "is to determine what the state courts 
would do, confronted with an identical situation." Ross 
Communications Satellite Corp._, 759 F. 2d 355, 361 (4th Cir.
1985) .

Under both federal and North Carolina law, the party seeking 
to establish a collateral estoppel bar bears the burden of proof 
that such a bar is warranted. E.g., Fed. Rule Civ. Proc. 8 (c); 
State v. Warren, 313 N.C. 254, 328 S.E.2d 256, 263-64 (N.C.
1985). Thus, defendant must establish both that North Carolina 
courts would give preclusive effect to decisions of the 
Employment Security Commission and that this case satisfies the 
factual requirements established under North Carolina law for 
application of collateral estoppel. Defendant can meet neither
of these burdens.

A. NORTH CAROLINA STATE COURTS DO NOT GIVE PRECLUSIVE 
EFFECT TO UNEMPLOYMENT COMPENSATION ADJUDICATIONS

The only relevant precedent under North Carolina law 
establishes that the courts of that State do not give preclusive 
effect to unemployment compensation adjudications. In Roberts ,y_ 
Wake Forest University, 55 N.C. App. 430, 286 S.E.2d 120, 124,
cert, denied, 305 N.C. 586, 292 S.E.2d 571 (1982), the North

16



is inapplicable to adjudication by unemployment compensation 
agencies."

Defendant argues that this Court should limit the Roberts 
decision to the facts of that case. However, the appropriate 
role of this Court is to defer to state court determinations of 
state law. The Roberts decision gives no hint that its broad 
conclusion that res judicata is inapplicable to unemployment 
compensation adjudications is in any way limited by that 
particular facts of the case. 1 9 The North Carolina Supreme Court 
denied the petition for a writ of certiorari in Roberts. 305 N.C. 
586, 292 S.E.2d 571 (1982). Roberts is the law of North Carolina 
and must be followed by this Court.

Even if defendant were successful in limiting Roberts to its 
facts, the burden is on the movant affirmatively to establish the 
applicability of collateral estoppel. Fed. Rule Civ. Proc. 8 (c); 
State v. Warren, 328 S.E.2d at 263-64. While criticizing the 
Roberts court for failing to conduct an "examination of the 
relevant statutory or common law of North Carolina," defendant 
can point to nothing in North Carolina law that even remotely 
suggests that North Carolina courts would, in fact, give 
preclusive effect to Employment Security Commission (ESC) 
determinations.

19Defendant argues that Roberts should be limited to 
unappealed ESC determinations. However, defendant cites no 
authority that North Carolina law treats appealed administrative 
decisions any differently from unappealed decisions, for 
collateral estoppel purposes.

Carolina Court of Appeals ruled: "the doctrine of res judicata

17



The North Carolina court's ruling in Roberts is supported by
similar determinations by other jurisdictions. In circumstances 
identical to the instant case, this Court recently held that an 
unemployment compensation decision by the Maryland Employment 
Security Administration (ESA) did not estop a federal court from 
adjudicating a Title VII claim based on the same discharge. Ross 
v. Communications Satellite Coro., 759 F.2d 355, 361 (4th Cir. 
1985). In Ross, the Maryland agency denied unemployment 
compensation on the ground that the claimant was discharged for 
misconduct. The Appeals Referee specifically concluded that 
"[t]he evidence in this unemployment insurance case, without 
commenting on what may be the result in his District Court case, 
does not substantiate the claimant's charge that he was 
discriminated against on the basis of sex." 759 F. 2d at 358.

Notwithstanding the specific adverse finding as to sex
discrimination, which was reviewed and affirmed by the Circuit

*

Court, id. at 358-59, this Court concluded that Ross was entitled 
to litigate the sex discrimination issue in federal court. The 
Court relied upon the fact that Maryland courts give a very 
narrow preclusive effect to prior judgments of such 
administrative agencies. 759 F .2d at 359. The Court also 
explained the policies behind this decision: "Different statutes
have different legislative histories, standards, procedures and 
policies which might dictate opposite results." 759 F .2d at 362 
(quoting Cicala v. Disability Review Board, 288 Md. 254, 418 A.2d 
205 (1980)). The Court in Ross concluded that a Title VII claim

18



and an unemployment compensation claim "cannot be construed as 
identical" for the purpose of applying Maryland's res judicata 
rules. Id. 2<-*

B. NORTH CAROLINA'S REQUIREMENTS FOR APPLICATION OF THE 
DOCTRINE OF COLLATERAL ESTOPPEL ARE NOT PRESENT IN 
INSTANT CASE

Even assuming that the North Carolina courts would, in some 
circumstances, give preclusive effect to decisions of the ESC, 
the criteria for application of the doctrine of collateral 
estoppel are not present in this case. Under North Carolina law, 
the doctrine of collateral estoppel applies only when the issue 
on which preclusion is sought was both raised and actually 
litigated in the prior proceeding. E.g ., King v. Grindstaff, 284 
N.C. 348, 200 S.E.2d 799, 806 (1973).* 21 Even where a party 
raises a claim or defense in the first proceeding, if that claim 
or defense is withdrawn or for some other reason not adjudicated 

'on the merits, collateral estoppel does not apply. Carolina

^Defendant now attempts to distinguish this Court's 
decision in Ross as premised on the so-called "unique" law of 
Maryland. However, in the court below, defendant repeatedly 
cited the federal district court's decision in Ross, which was 
overturned by this Court, as the primary authority for its 
collateral estoppel argument. Memorandum in Support of 
Defendant's Motion for Summary Judgment at 22-23 (Pleading No. 
11). Defendant points to no support for its recent conclusion 
that Maryland's law of collateral estoppel is "unique."

21Unlike the doctrine of res judicata, which precludes 
relitigation of ail issues which might have been raised, 
collateral estoppel applies only to issues that were actually 
litigated and decided in the first action. King v. Grindstaff, 
200 S.E. 2d at 805. The broader doctrine of res judicata 
concedealv does not apply in this case, because the federal civil 
rights claims are not the same as the state unemployment 
compensation claim.

19



Power & Light Co. v. Merritt, 41 N.C. App. 238, 255 S.E.2d 225,
227 (N.C. Ct. App. 1979). See also State v. Warren, 328 S.E.2d 
at 263-64 (no collateral estoppel bar where specific theory of 
liability was not raised or decided at first trial).

The burden is on defendant in this case to prove that the 
issue of racial discrimination was actually litigated and decided 
by the ESC. E.g., King v. Neese, 233 N.C. 132, 63 S.E.2d 123,
126 (1951). Defendant has not satisfied that burden. 22 In fact, 
the evidence submitted by defendant shows otherwise. The 
Employment Security Commission explicitly refused to decide any 
race discrimination issue, concluding that "the claimant no 
longer maintains that his discharge was racially motivated and 
therefore, has abandoned such as a basis for his case."
Attachment G to Affidavit of Judith B. Boone, dated April 16,
1985 (Pleading No. 14). 23 Under North Carolina law, the 
Superior Court is not permitted to decide issues of fact, but 
only to determine whether the ESC1s rulings are supported by

22A determination whether a collateral estoppel is warranted 
generally cannot be made without examination of the record of the 
prior proceeding. Thus, the North Carolina Court of Appeals has 
concluded that the movant's failure to provide the second court 
with a transcript of the first proceeding alone justifies refusal 
to apply the doctrine of estoppel. State v. Warren 328 S.E.2d at 
263. Here, defendant supplied no part of the record of the ESC 
and Superior Court proceedings, but merely provided copies of the 
various opinions.

23Defendant argues that the issue of race discrimination 
should be presumed to have been actually litigated and decided, 
because the ESC is required to consider a claim of race 
discrimination, if properly raised, in determining whether the 
employee lost his job through substantial fault. However, this 
presumption, does not apply where a claim or defense is withdrawn 
prior to resolution. Carolina Power & Light, supra..

20



substantial evidence. E.q. Miller v . Guilford County Schools, 64
N.C. App. 729, 303 S.E.2d 411, 413, cert, denied, 309 N.C. 321, 
307 S.E.2d 165 (1983).24 Thus, that Court's affirmance of the 
ESC ruling can only be construed as affirmance of the 
determination that the race discrimination claim was withdrawn. 25

24Defendant asserts that Lytle's counsel made reference to 
the race discrimination issue in argument before the Superior 
Court. Defendant has not produced a transcript of the Superior 
Court argument. Because the question of collateral estoppel 
requires detailed examination of the record of the prior 
proceeding, the District Court's ruling rejection of defendant's 
argument on this record should be affirmed. If a factual record 
had been made on the collateral estoppel issue, plaintiff would 
have shown that his attorney argued in the Superior Court that 
the ESC had improperly concluded that the race discrimination 
issue was withdrawn. In affirming the ESC, the Superior Court 
obviously rejected this argument. Thus, the fact that Lytle's 
counsel may have belatedly attempted to resurrect the race 
discrimination claim does not create a collateral estoppel bar. 
The relevant question is not what arguments were made by Lytle's 
counsel, but what issues were actually decided by the ESC and 
affirmed by the Superior Court.

25An additional requirement under North Carolina law for the 
imposition of a collateral estoppel bar is that "the issues to be 
concluded must be the same as those involved in the prior 
action." King v. Grindstaff, 200 S.E.2d at 806. Even assuming 
that a claim of race discrimination was actually litigated and 
decided by the ESC, defendant has not met its burden of proving 
that this is the same "issue" to be decided by the federal court 
under Title VII and § 1981.

The federal courts have developed comprehensive definitions 
of race discrimination under Title VII, § 1981 and the 
Constitution. For example, the definition of race discrimination 
under Title VII is not the same as the definition of race 
discrimination under the Constitution. Detailed rules concerning 
burdens of proof and presumptions govern adjudication in the 
federal courts of the various types of race discrimination 
claims.

Although the ESC apparently is required to consider whether 
the employee was a victim of race discrimination in determining 
issues of fault, defendant has made no showing that the ESC's 
definition of race discrimination or the rules of proof that it

21



C. DEFENDANT HAS NOT ESTABLISHED THAT PLAINTIFF HAD A 
"FULL AND FAIR OPPORTUNITY TO LITIGATE" HIS RACE 
DISCRIMINATION CLAIMS BEFORE THE EMPLOYMENT SECURITY 
COMMISSION

Under both Title VII and § 1981, the federal courts may 
give preclusive effect to a state adjudication only if the Title 
VII claimant had a "full and fair opportunity to litigate" the 
civil rights claim in the state proceeding. E.g ., Kremer, 456 
U.S. at 480-81; Allen v. McCurry, 449 U.S. 90, 95 (1980). The 
evidence introduced by defendant does not establish that this 
requirement is met with respect to ESC adjudication of race 
discrimination claims.

The most significant deficiency of the ESC procedures is 
that discovery of witnesses and other evidence is not readily 
available to claimants.2® Employment discrimination claims 
typically involve comparative analysis of the defendant's

applies to race discrimination claims are the same as those 
applied under either Title VII or § 1981. This failure, is fatal, 
since under North Carolina law, collateral estoppel does not 
apply where the burden of proof is different in the two 
proceedings. See Hussey v. Cheek, 31 N.C.App. 148, 228 S.E. 2d 
519, 520-21 (1976). See also Brady v. Thurston Motor Lines,
Inc., 753 F .2d 1269, 1276-77 (4th Cir.), cert, denied, 84 L. Ed. 
2d 53 (1984) (definition of "voluntary" termination of employment 
different for purposes of North Carolina Employment Security Law 
and Title VII; fact that plaintiff found eligible for 
unemployment benefits did not mean plaintiff had not 
"voluntarily" quit within meaning of Title VII backpay doctrine).

“^Because a factual record was never made by defendant on 
this issue, plaintiff did not introduce extensive evidence 
regarding ESC procedural deficiencies. If defendant had 
introduced factual support for its argument, plaintiff would have 
proved that discovery is not automatically available to ESC 
claimants. Although the Commission itself possesses subpoena 
power, that power rarely is exercised on behalf of a claimant.

22



treatment of different employees. The documentary evidence 
necessary to prove such claims almost always is in the hands of 
the employer. The courts have emphasized the importance to 
plaintiffs of liberal discovery. E.q . Texas Dept, of Community 
Affairs v. Burdine, 450 U.S. at 258. In this case, the critical 
documents relied upon by both plaintiff and defendant in the 
federal trial were not before the ESC. The failure of the ESC 
proceeding to afford a right to discovery of relevant evidence 
raises serious questions about the fundamental fairness of the 
proceeding with regard to the issue of race discrimination.27

Finally, the doctrine of res judicata will not be applied to 
a federal civil rights claim unless the claimant "freely and 
without reservation submit[ted] his federal claims for decision 
by the state courts ... and had them decided there." Haring v. 
Prosise, 462 U.S. at 313 n.7 (quoting Montana v. United States, 
440 U.S. 147, 163 (1979)). Such a voluntary submission cannot be

27in addition, "an employee's incentive to litigate an 
unemployment benefits claims is generally much less than his 
incentive to litigate a discrimination claim where generally the 
stakes are much higher. Where the amount in controversy in the 
first action is much less than the amount in controversy at the 
second, preclusion would be unfair." Mack v. South Bay Beer 
Distributors, 41 FEP Cases (BNA) 1224, 1226-27 (1986)."

Finally, the failure of the ESC proceeding to provide for 
either appointment of counsel or recovery of attorneys' fees 
increases the doubt about the procedure's fairness to a race 
discrimination claimant. Congress has recognized the extreme 
difficulty faced by an unrepresented employment discrimination 
litigant. Under Title VII, the federal courts are authorized to 
appoint counsel for claimants. 42 U.S.C. § 2000e-5(f)(1). Under 
both Title VII and § 1981, an award of attorneys' fees is 
available to a prevailing plaintiff, in order to make counsel 
available to such claimants. 42 U.S.C. § 1988.

23



found with respect to ESC adjudications. In order to obtain 
unemployment compensation benefits to which he is entitled, a 
worker is forced to present his claim to the ESC, and to the 
state court if he believes that the ESC committed error. Unlike 
the situation with a state fair employment agency, the employee 
does not have the alternative of opting out of the agency 
proceeding and starting a new action for unemployment 
compensation benefits in federal court. Given the dire need of 
unemployed persons for unemployment benefits and the strong state 
policies behind provision of such benefits, the assertion of a 
claim for such benefits in the only available forum cannot be 
viewed as voluntary submission of the claimant's federal causes 
of action. See Mack v. South Bay, 41 FEP Cases (BNA) at 1227. 
Moreover, serious doubt about the lack of voluntariness arises 
from the fact that a claimant not represented by counsel cannot 
be expected to know that casual mention of a possible race 
discrimination issue will result in a bar to assertion of federal 
civil rights.

Finally, the fact that the North Carolina ESC provides no 
remedy for race discrimination makes it extremely unlikely that a 
federal civil rights claimant would voluntarily submit his 
federal claim to this agency. Even if the claimant prevails, the 
ESC cannot award reinstatement, backpay or any injunction relief 
for employment discrimination. Thus, the claimant will be 
required to bring a separate lawsuit in any event to obtain an 
effective remedy. The claimant would have no reason voluntarily

24



to submit his federal race discrimination claim to the ESC.
Conclusion

For the reasons stated, the judgment of the District Court 
should be reversed. The case should be remanded for a jury trial 
on plaintiff's § 1981 claims and for a decision of plaintiff's 
Title VII claims that is consistent with the jury's verdict.

Respectfully submitted,

\JJ2_ca \tV'TXa_>-
JULIUS CHAMBERS 
RONALD L. ELLIS 
PENDA D. HAIR

99 Hudson Street 
16th Floor
New York,New York 10013 
(212) 219-1900

REGAN MILLER
600 South College Street 
Charlotte, North Carolina

28202
(704) 372-9870

Dated: November 20, 1986*

25