Rhett v. Carnegie Center Associates Brief for Plaintiff-Appellant
Public Court Documents
January 23, 1997
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Brief Collection, LDF Court Filings. Rhett v. Carnegie Center Associates Brief for Plaintiff-Appellant, 1997. 431f48d6-ac9a-ee11-be37-00224827e97b. LDF Archives, Thurgood Marshall Institute. https://ldfrecollection.org/archives/archives-search/archives-item/a4f7ae0b-5e8e-4536-9e2d-c30f1a1caf15/rhett-v-carnegie-center-associates-brief-for-plaintiff-appellant. Accessed April 27, 2025.
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IN THE
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
IN RE:
CARNEGIE CENTER ASSOCIATES, )
Debtor )
)
DEBORAH RHETT, )
Appellant ) NO. 96-5566
V- )
)
CARNEGIE CENTER ASSOCIATES, )
Appellee )
BRIEF FOR PLAINTIFF-APPELLANT
ELAINE R. JONES LANIER E. WILLIAMS
Director-Counsel CHRISTOPHER MORKIDES
P.O. Box 6584
CHARLES STEPHEN RALSTON Philadelphia, PA
NORMAN J. CHACHKIN (215) 848-7239
CATHERINE POWELL
NAACP Legal Defense And
Educational Fund, Inc.
99 Hudson Street
Suite 1600
New York, New York 10013
(212) 219-1900
Attorneys for Plaintiff-Appellant
TABLE OF CONTENTS
Pages
Table of Authorities................................................................................................iij
Statement of Subject Matter and Appellate Jurisdiction................................. 1
STATEMENT OF THE ISSUES PRESENTED FOR REVIEW .................. 2
STATEMENT OF THE CASE............... 4
STATEMENT OF THE FACTS....................................................................... 5
Summary of the Argum ent................................................................................ 10
ARGUMENT .................................................................................................... 13
I. THE UNDISPUTED FACTS IN THIS CASE
ESTABLISHED A PER SE VIOLATION OF THE
PREGNANCY DISCRIMINATION A C T ................................. 13
A. The evidence establishes a violation of
Title VII under the rule of Trans World
Airlines v. Thurston, 469 U.S. I l l (1985)............................... 13
1. Plaintiff was a woman "affected by
pregnancy, childbirth, or related
medical conditions." ................................................. 13
2. Plaintiff was not "treated the same for all
employment-related purposes . . . as other
persons not so affected.".......................................... 14
3. Plaintiff was similar in her ability to work to
persons not affected by pregnancy............................. 15
B. Plaintiff is entitled to judgment under the
rule of McDonnell Douglas v. Green ................................. 21
1
II. THE COURTS BELOW ERRED AS A MATTER OF LAW BY
FAILING TO EVALUATE WHETHER PLAINTIFF SUFFERED
DISCRIMINATION ON ACCOUNT OF HER RACE AND
GENDER...................................................................................... 24
A. A claim of discrimination based upon race
and gender is not the same as, nor is evidence
offered to support it properly analyzed as,
a claim of discrimination based either upon
race or upon gender............................................................ 26
B. The failure of the courts below to apply this
principle to the present case resulted in erroneous
factual analysis and the incorrect conclusion that
plaintiff suffered no discrimination...................................... 29
III. THE RULING OF THE COURTS BELOW, THAT PLAINTIFF
WAS NOT QUALIFIED FOR OTHER POSITIONS THAT
BECAME VACANT AT CARNEGIE DURING HER
PREGNANCY LEAVE OR IMMEDIATELY AFTER HER JOB
WAS ELIMINATED, AND THEREFORE WAS NOT TREATED
DIFFERENTLY BECAUSE OF HER RACE OR SEX BY NOT
BEING CONSIDERED FOR THOSE POSITIONS, WAS
CLEARLY ERRONEOUS............................................................ 34
1. Administrative Assistant P osition ............................... 37
2. Secretarial Position..................................................... 39
3. Receptionist Position ................................................. 40
CONCLUSION .................................................................................................. 41
Local Appellate Rule 28(d) Certification.............................................................42
Certificate of Service .............................................................................................42
1 1
TABLE OF AUTHORITIES
Cases: Pages
Betsey v. Turtle Creek Assocs.,
736 F.2d 983 (4th Cir. 1984) .................................................................. 24
Chambers v. Omaha Girls Club,
834 F.2d 697 (8th Cir. 1987) .................................................................. 26
Connecticut v. Teal,
457 U.S. 440 (1982) ................................................................................ 27
EEOC v. Ackerman, Hood & McQueen,
956 F.2d 944 (10th Cir. 1992) ............................................................ 30, 32
EEOC v. Metal Serv. Co.,
892 F.2d 341 (3d Cir. 1990) ....................................................... 36, 37, 38
UAW v. Johnson Controls,
499 U.S. 187 (1991) ................................................................................ 17
Felts v. Radio Distributing Co.,
637 F. Supp. 229 (N.D. Ind. 1985) ................................................... 14, 33
Florsheim Shoe Co. v. Illinois Fair Employment Practices
Commn.,
99 111. App. 3d 868, 425 N.E.2d 1219 (1981) ........................................ 20
Garcia v. Woman’s Hosp. of Texas,
97 F.3d 810 (5th Cir. 1996) ..................................................................... 23
Griffin v. Carlin,
755 F.2d 1516 (11th Cir. 1985)............................................................ 11, 23
Hayes v. Shelby Memorial Hosp.,
726 F.2d 1543 (11th Cir. 1984)................................................................ 23
Hicks v. Gates Rubber Co.,
833 F.2d 1406 (10th Cir. 1987)................................................................ 26
i i i
Pages:
Hogan v. Pierce, 31 Fair Empl. Prac. Cases 115
(D.D.C. 1983) .................................................................................... H, 23
Jacobs v. Martfn Sweets Co.,
550 F.2d 364 (6th Cir.), cert, denied,
431 U.S. 917 (1979).................................................................................. 28
Jefferies v. Harris County Community Action Ass’n,
615 F.2d 1025 (5th Cir. 1980) ............................................................passim
Lam v. University of Hawaii,
40 F.3d 1551 (9th Cir. 1994) .............................................................. passim
Marzano v. Computer Science Corp.,
91 F.3d 497 (3d Cir. 1996).................................................................. passim
Massarsky v. General Motors Corp.,
706 F.2d 111 (3d Cir.), cert, denied, 464 U.S. 937
(1983)........................................................................................................ 22
McDonnell Douglas Corp. v. Green,
411 U.S. 792 (1993) ..................................................................... 11,21,36
McKenna v. Pacific Rail Service,
32 F.2d 820 (3d Cir. 1994)....................................................................... 22
Moore v. Hughes Helicopters, Inc.,
708 F.2d 475 (9th Cir. 1983) ................................................................... 26
Newport News Shipbuilding & Dry Dock Co. v. EEOC,
462 U.S. 669 (1983) ............................................................................... 29
Phillips v. Martin Marietta Corp.,
400 U.S. 542 (1971) ............................................................................... 28
Segar v. Smith,
738 F.2d 1249 (D.C. Cir. 1984) .......................................................... 20, 23
IV
Smith v. F.W. Morse & Co.,
76 F.3d 413 (1st Cir. 1996) ..................................................................... 19
Sprogis v. United Air Lines, Inc.,
444 F.2d 1194 (7th Cir. 1971) ................................................................ 28
St. Mary’s Honor Ctr. v. Hicks,
509 U.S.__ , 125 L. Ed. 2d 407 (1993) ...................................... 23, 24, 25
Texas Dep’t of Community Affairs v. Burdine,
450 U.S. 248 (1981) ................................................................................ 23
Torre v. Casio, Inc.,
42 F.3d 825 (3d Cir. 1994)....................................................................... 22
Trans World Airlines, Inc. v. Thurston,
469 U.S. I l l (1985) ........................................................................... passim
Universal Minerals, Inc. v. C.A. Hughes & Co.,
669 F.2d 98 (3d Cir. 1982)..................................................................... 2, 3
Statutes:
11 U.S.C. § 362(a) ............................................................................................... 4
28 U.S.C. § 157(b)(2)(B), ( O ) ............................................................................. 1
28 U.S.C. § 158 .................................................................................................... 1
28 U.S.C. § 1291 ................................................................................................. 1
28 U.S.C. § 1334(b) ............................................................................................. 1
42 U.S.C. § 1981 ................................................................................................. 4
42 U.S.C. §§ 2000e et s e q .................................................................................... 4
Pages:
42 U.S.C. § 2000e(k) ......................................................................................... 13
42 U.S.C. § 2000e-5(j) ......................................................................................... 1
N.J.S.A. §§ 10:5-12(a) et s e q ................................................................................ 4
N.J.S.A. § 34:llB-7............................................................................................. 19
Rules:
Fed. R. App. P. 28.1(a)(ii) .................................................................................. 2
3d Cir. L.A.R. 28(d) ........................................................................................... 42
3d Cir. L.A.R. 46.1................................................................................................. 42
Other Authorities:
Lisa A. Crooms, Stepping Into the Projects: Lawmaking,
Storytelling, and Practicing the Politics of
Identification, 1 Mich. J. of Race & L aw .................................................33
Pages:
V I
IN THE
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
IN RE:
CARNEGIE CENTER ASSOCIATES )
Debtor )
)DEBORAH RHETT, )
Appellant, ) NO. 96-5566
v- )
CARNEGIE CENTER ASSOCIATES, )
Appellee )
BRIEF FOR PLAINTIFF-APPELLANT
Statement of Subject Matter and Appellate Jurisdiction
The Bankruptcy Court had subject matter jurisdiction pursuant to 28 U.S.C.
§ 157(b)(2)(B), (O) and 28 U.S.C. § 1334(b) because plaintiffs discrimination claims
were pending when defendant began reorganization proceedings under Chapter 11
of the Bankruptcy Code. The District Court had appellate jurisdiction over the
plaintiffs appeal from the final order of the Bankruptcy Court pursuant to 28 U.S.C.
§ 158.
This Court has appellate jurisdiction over this appeal from the final order of
the District Court pursuant to 28 U.S.C. § 1291 and 42 U.S.C. § 2000e-5(j). Plaintiff
filed a timely notice of appeal with this Court on August 23, 1996.
Related Cases and Proceedings
Plaintiff-appellant is not aware of any related cases or proceedings in this
Court within the scope of Rule 28.1(a)(ii) of this Court.
STATEMENT OF THE ISSUES PRESENTED FOR REVIEW
1. Whether the defendant company’s decision, in implementing a reduction
in force, to abolish plaintiffs job, rather than the job of one of three other
secretaries performing similar work, based solely on her absence from work as a
result of having taken a pregnancy leave, violated the plain language of Title VII,
as amended by the Pregnancy Discrimination Act, and constituted actionable
discrimination as a matter of law.
(This issue was raised below in the District Court Brief for Plaintiff-Appellant
Deborah Rhett at 14-16, 17-24, 28, 39-41, and 50-54. It was ruled upon by the
Bankruptcy Court in its Opinion (reproduced infra) at 16, 18, and by the District
Court in its Memorandum Opinion (also reproduced infra) at 8-19.)
The decision below on this issue was a determination of an issue of law, and
the standard of review in this Court is therefore plenary. Universal Minerals, Inc. v.
C.A. Hughes & Co., 669 F.2d 98, 103 (3d Cir. 1982) (in appeal from district court
judgment reversing bankruptcy court, this Court "must exercise a plenary review of
the trial court’s choice of interpretation of legal precepts and its application of those
precepts to historical facts").
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2. Whether the courts below erred as a matter of law by failing to evaluate
whether plaintiff suffered discrimination on account of her race and gender, instead
of analyzing the evidence to determine, separately, whether plaintiff was
discriminated against because of her race or because of her gender.
(This issue was raised below in the District Court Brief for Plaintiff-Appellant
Deborah Rhett at 2-3 and 12. It was ruled upon by the Bankruptcy Court in its
Opinion (Bankr. Ct. Op) at 6 (finding no. 20) and 10 (findings nos. 39 and 40), and
by the District Court in its Memorandum Opinion (Dist. Ct. Mem. Op.) at 5-6, 10,
14, 16-19.)
The decision below on this issue was a determination of an issue of law, and
the standard of review in this Court is therefore plenary. Universal Minerals, Inc. v.
C.A. Hughes & Co.
3. Whether the finding of the courts below, that plaintiff was not qualified
for positions that became vacant at defendant’s company during her pregnancy leave
or immediately after her job was eliminated as part of a reduction in force, and
therefore was not treated differently because of her race or sex by not being
considered for those positions, was clearly erroneous.
(This issue was raised below in the District Court Brief for Plaintiff-Appellant
Deborah Rhett at 41-54. It was ruled upon by the Bankruptcy Court in its Opinion
at 12-14, and by the District Court in its Memorandum Opinion at 5, 18-19.)
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This Court’s review of factual findings is subject to the clearly erroneous
standard.
STATEMENT OF THE CASE
Deborah Rhett, the plaintiff-appellant in this case, filed a lawsuit against
Carnegie Center Associates ("Carnegie") on November 26, 1993, in the United
Stated District Court for the District of New Jersey, Civil Action No. 93-5251
(AET).1 In her Complaint, Ms. Rhett alleged that Carnegie violated her statutory
rights under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. §§
2000e et seq.\ 42 U.S.C. § 1981; and the New Jersey Law Against Discrimination,
N.J.S.A. §§ 10:5-12(a) et seq. Specifically, Ms. Rhett alleged that Carnegie
discriminated against her on the bases of her sex, race, and marital status by
terminating her employment and denying her other employment opportunities.
By letter dated February 2, 1994 from counsel for the defendant, Rhett was
notified that pursuant to 11 U.S.C. § 362(a), her claim was automatically stayed,
pending proceedings to reorganize the company in Bankruptcy Court. On February
19, 1994. Rhett filed a proof of claim in the Bankruptcy Court. Pursuant to the
notification to the District Court of the automatic stay, the District Court issued an
‘Plaintiff commenced this action in District Court with a timely complaint filed
within 90 days of receipt of a Notice of Right to Sue from the EEOC, with whom
she had filed a timely charge of discrimination against Carnegie. Joint Appendix
(J.A.) 104-06.
- 4 -
Order, dated May 20, 1994, directing the Clerk to "administratively terminate the
action in his records, without prejudice to the right of the parties to reopen the
proceedings . . .
The Bankruptcy Court conducted a bench trial on Carnegie’s motion to
expunge Rhett’s claim on October 20, November 29 and November 30, 1995.
Following the trial the Bankruptcy Court issued its opinion finding in defendant’s
favor on December 21, 1995, and entered an Order, dated January 9, 1996,
expunging Rhett’s claim of discrimination. Rhett filed a timely notice of appeal with
the District Court from the Bankruptcy Court’s Order.
The District Court heard oral argument on the appeal on July 15, 1996, and
issued a Memorandum Opinion affirming the Bankruptcy Court on August 5, 1996.
Plaintiff filed a timely notice of appeal with this Court on August 23, 1996
STATEMENT OF THE FACTS
Deborah Rhett ("Rhett") commenced her employment with defendant as a
temporary Secretary placed through a private employment agency in April 1989.
J.A. 45, 47, 48. She was recommended for and hired as a permanent Secretary on
or about July 17, 1989, J.A. 47-48, and was assigned to defendant’s
Accounting/Finance Department. J.A. 52.
According to Rhett, at the time Carnegie agreed to hire her as a permanent
employee, it was agreed that she would get a performance review within six months
of her hire, and if her performance was satisfactory she would receive a salary
- 5 -
increase of $1,500. J.A. 176 (Ex. C-2). In January 1990, based on her satisfactory
performance, Rhett was given a salary increase of $1,500. J.A. 51-53, 176.
Subsequently, Rhett (who was unmarried) became pregnant. In June 1990,
Rhett separately informed each of her supervisors and various other management-
level employees who assigned her work that she was pregnant. J.A. 55-56. When
she informed Keith Gormisky, the company’s Controller who assigned her work, and
Gary Turndorf, the company’s Chief Financial Officer and Counsel, that she was
pregnant, both asked her whether she intended to get married and Gormisky
suggested that her unmarried status was inappropriate "[i]n society’s eyes" J.A. 56,
144.2
By memorandum dated December 19, 1990, Rhett informed her superiors
including, inter alia Alan Landis (who owned the business and made all employee
termination decisions, Bankr. Ct. Op. at 3 (finding no. 2)), Gary Turndorf, and
Keith Gormisky that she intended to commence her pregnancy leave as of
December 21, 1990 and that she expected to return to work on or about April 15,
1991,"pending [her] doctor’s evaluation." J.A. 177 (Ex. C-4). Although none of her
supervisors suggested that she would not be able to return to Carnegie after her
leave, when she spoke to Gormisky about hiring a temporary employee to cover her
responsibilities while she was on leave, he responded by saying, "If I were you, I
2Rhett felt hurt and embarrassed by Gormisky’s comments and questions
concerning her marital intentions. J.A. 59-60.
- 6 -
would not tread on thin ice." J.A. 61. When plaintiff asked him what he meant by
that, he told her to "read between the lines," J.A. 61-62, and when further pressed
said, "Leave me alone and get out of my office," J.A. 62.3
In fact, defendant hired a temporary secretary to fill in during Rhett’s
absence, J.A. 65-67, whom Rhett herself trained during her last week prior to taking
leave, J.A. 66. Turndorf testified in his deposition, admitted at trial as an exhibit:
And, in fact, in Debbie Rhett’s case, we kept a desk open for her and we put
temps in there because we assumed that when she was done with whatever
maternity time she wanted to take, if she wanted to come back, she could
have come back to work with us.
J.A. 187 (Ex. C-10, Tab A, at 15 (Turndorf Dep.)).4 This was consistent with the
company’s practice of resuming the employment of white married members of the
staff who had taken pregnancy leaves in the same or similar positions. See J.A. 49-
50, 74-79, 150-51, 199 (Ex. C-10, Tab J, at 2) (Barbara MacGreagor, on pregnancy
leave twice, including from January-June, 1991); J.A. 140, Bankruptcy Court Op. at
5 (finding no. 17) (Brenda Sirkus); J.A. 74-79, 140-41, 199 (Ex. C-10, Tab J, at 2)
^Plaintiff was again hurt and bewildered by Gormisky’s comments (which the
Bankruptcy Court erroneously attributed to Turndorf, Bankr. Ct. Op. at 7). J.A. 62,
63.
4See also Dist. Ct. Mem. Op. at 4. quoting Turndorfs statement that "I think
Ms. Rhett had expressed a desire [to return] after she had her baby, and we tried
to accommodate that desire by hiring temporaries to keep the position open for
her"). Similarly, Gormisky conceded that if a woman employee went out on
pregnancy leave he did not consider her to be terminated, see J.A. 194 (Ex. C-10,
Tab B, at 17 (Gormisky Dep.)) ("I view it as the employee just isn’t there . . . . I
view it as she is taking a leave").
- 7 -
Bankruptcy Court. Op. at 6 (finding no. 19) (Linda Kraus); J.A. 49-51 (Kathleen
Cohen).
From the time that Rhett commenced employment with Carnegie as a
temporary Secretary through the date of her departure for maternity leave, Rhett
had performed her duties, as well as extra duties she assumed, in a satisfactory
manner. Bankr. Ct. Op. at 8 (findings nos. 8, 9) and 9 (no. 12); see also J.A. 200
(Ex. C-10, Tab K, at 1) (Carnegie advised EEOC during agency’s investigation that
Rhett had been satisfactory employee).
However, by letter to Ms. Rhett, dated March 26, 1991, she was notified that
her position had been abolished due to the company’s financial difficulties and that
she was thereby terminated, but that if there was a change in the company’s
situation, she would be contacted. J.A. 178 (Ex. C-5). As of that date, Rhett was
under continued medical care for post-partum depression, a pregnancy-related
medical condition. J.A. 103, 125-26. During the period of her leave, up until March
26, 1991, her medical insurance coverage as a Carnegie employee had continued in
force, J.A. 195 (Ex. C-10, Tab B. at 65 (Gormisky Dep.)), but within two weeks of
the notice that her position had been eliminated, she was sent information regarding
her COBRA rights to continued medical benefits at her own expense, J.A. 80-81,
196 (Ex. C-10, Tab B, at 80 (Gormisky Dep.)). The company informed the EEOC
that Rhett’s "date of separation" from employment was March 26, 1991, J. A. 205
(Ex. C-ll).
- 8 -
At the time the decision was made to abolish the secretarial position that
Rhett occupied, no consideration was given to terminating any secretary other than
Rhett, J.A. 188-90 (Ex. C-10, Tab A, at 62-64 (Turndorf Dep.)), even though at least
one other secretary was junior to and had less work experience than plaintiff,5 and
even though plaintiffs position was similar to at least four other secretarial
positions.6 As the Bankruptcy Court found, "[t]he operation of Carnegie was very
loose. There were a limited number of employees and all secretaries and office
personnel covered for one another to the extent that they were able," Bankr. Ct. Op.
at 4. The Bankruptcy Court accepted the company’s explanation that financial
difficulties required Carnegie in the spring of 1991 to reduce its work force and that:
"[T]he uncontradicted testimony of the debtor establishes that the debtor had to let
someone in the secretarial group go and the fact that Rhett was not working for the
company at the time made it logical that she be the one." Id. at 15. The District
Court affirmed, holding that the Bankruptcy Court’s findings that Carnegie had
5J.A. 68, 69, 121; compare J.A. 174-75 (Ex. C-l) (Rhett’s resume) with J.A. 207
(Ex. C-14) (Wolfs resume). Wolf had only been a secretary for about four months,
in contrast to Rhett’s twenty months in the position. Bankruptcy Court Op. at 3
(no. 6), 5 (no. 14). Moreover, whereas Rhett had extensive secretarial work
experience before going to work at Carnegie (extending from her high school
graduation date in 1978) , Wolf had none and had in fact graduated from high
school only a year before starting as a receptionist with the company in July, 1989.
J.A. 30-45, 107, 174 (Ex. C-l;), 207 (Ex. C-14).
6See plaintiffs testimony regarding the virtually interchangeable nature of the
positions held by Kirsten Wolf, Kathy Buchanan, and Brenda Sirkis, J.A. 111-12,
114-24.
- 9 -
financial difficulties and reduced its work force on both the management and
support levels, as well as freezing remaining executives’ salaries, in late 1990 and
early 1991, "compelled the conclusion that the secretarial position held by appellant
was abolished for legitimate, non-discriminatory reasons" and "appellant’s ‘discharge’
claim under Title VII is meritless." Dist. Ct. Mem. Op. at 18.
At the time the decision was made to terminate Rhett’s employment, and
during the period of time immediately following her termination, no consideration
was given by defendant to rehiring her for another vacant position, whether
temporary or permanent. J.A. 139, 171-72. The courts below found that appellant
was not qualified for any of the vacancies. See infra Argument III.
Summary of the Argument
I. The undisputed facts - that plaintiffs employer decided, in implementing
a reduction in force, to eliminate the secretarial position which she held because
plaintiff was at that time absent from work due to pregnancy, rather than because
her position was different from that of other secretaries or because her
qualifications or performance was less adequate than other secretaries’ - compel a
finding that her termination was discriminatory under the plain meaning of the
language of Title VII, as amended by the Pregnancy Discrimination Act. In that
respect, this case is governed by Trans World Airlines, Inc. v. Thurston, 469 U.S. I l l
(1985). Alternatively, plaintiff was entitled to judgment in her favor under the rule
- 10-
of McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1993), because she made out
a prima facie case of disparate treatment in the context of a reduction in force, in
accordance with this Court’s decision in Marzano v. Computer Science Corp., 91 F.3d
497 (3d Cir. 1996), and the reason for her termination articulated by the defendant
-- plaintiffs absence from work because of pregnancy, is discriminatory per se and
therefore not legitimate. Even if that reason were to be considered facially neutral,
its application to the reduction-in-force among the company’s secretarial positions
had a racially disparate impact that could not be justified by business necessity, and
it therefore was insufficient to rebut the prima facie case. Griffin v. Carlin, 755 F.2d
1516, 1526-28 (11th Cir. 1985); Hogan v. Pierce, 31 Fair Empl. Prac. Cases 115, 126
(D.D.C. 1983).
II. It was reversible error as a matter of law for the courts below to evaluate
the evidence only in terms of plaintiffs claims of race discrimination or sex
discrimination, without also considering whether plaintiff had proved her claim of
race and sex discrimination. Lam v. University o f Hawaii, 40 F.3d 1551 (9th Cir.
1994); Jefferies v. Harris County Community Action Ass’n, 615 F.2d 1025,1032-34 (5th
Cir. 1980). The failure to consider plaintiffs claim of discrimination at the
intersection of race and gender unquestionably affected the ultimate determination
by the courts below that plaintiff was entitled to no relief.
III. The findings of the lower courts that plaintiff was not qualified for other
positions that became vacant at Carnegie during the same time period that she was
- 11 -
on pregnancy leave and that the company implemented its reduction in force, and
that plaintiff therefore was not treated differently from other employees out on
leave (who were not pregnant, and/or who were not black) were clearly erroneous.
- 12-
ARGUMENT
I. THE UNDISPUTED FACTS IN THIS CASE ESTABLISHED A PER SE
VIOLATION OF THE PREGNANCY DISCRIMINATION ACT
A. The evidence establishes a violation of
Title VII under the rule of Trans World
Airlines v. Thurston. 469 U.S. I l l (1985).
The Pregnancy Discrimination Act of 1978 amended Title VII of the Civil
Rights Act of 1964 to provide, inter alia, that:
women affected by pregnancy, childbirth, or related medical conditions shall
be treated the same for all employment-related purposes . . . as other persons
not so affected but similar in their ability or inability to work . . . .
42 U.S.C. § 2000e(k). The undisputed facts of this case, as found by the District
Court, establish a violation of the Act. It is clear that plaintiff-appellant was
selected for termination when the secretarial position she held, one of four such
positions in the company for which she was employed, was eliminated because she
was absent from work due to her pregnancy at the time the reduction-in-force
decision was made. This action violated the clear language of the statute and
constituted an intentional act of discrimination. This conclusion, and judgment in
favor of the plaintiff, is mandated by an analysis of the factors set out in the statute.
1. Plaintiff was a woman "affected by pregnancy, childbirth, or related
medical conditions."
Plaintiff was absent from her job solely because of her pregnancy, the birth
of her child, and the ensuing medical condition of post-partum depression. Thus,
- 13 -
she was clearly a woman "affected by pregnancy, childbirth, or medical condition."7
As both the evidence and the findings of the Bankruptcy Court and the District
Court establish, she informed her superiors that she was pregnant and intended to
return to work after a brief leave. It is also clear that the defendant company
treated her, in accord with its standard practice, as temporarily absent because of
pregnancy and due to return to work, until March 26, 1991 when it decided to
terminate her. Defendant continued her medical benefits and hired temporary help
for her position, and, according to its own personnel records submitted to the
EEOC, did not terminate her until March 26, several months after her leave began.
2. Plaintiff was not "treated the same for all employment-related purposes
as . . . other persons not so affected."
It is undisputed that the employer, because of adverse financial conditions,
7As recognized by the district court in Felts v. Radio Distributing Co., 637 F.
Supp. 229, 233 (N.D. Ind. 1985), the discharge of an employee who is absent due to
pregnancy is evidence of a discriminatory motive:
To satisfy the intent element of Title VII, it is not necessary that
plaintiff prove the employer had an animus for pregnant women and
that the pretext of economic conditions was erected to mask bias or
dislike for pregnant women. The Pregnancy Discrimination Act makes
clear that women are discriminated against when their pregnant
conditions forms the basis of an adverse employment decision.
Defendant conceded that had Shirley Felts not earlier taken maternity
leave, there would have been no reason to remove her in July, 1982.
She was, therefore, discriminated against on the basis of pregnancy
hence sex.
- 14 -
decided to downsize its workforce. It decided to eliminate one of a number of
secretarial positions in the company for which Ms. Rhett worked. This meant that
one of the secretaries — Ms. Rhett or one of the other persons -- would lose her job.
Of the persons whose employment would be impacted, only one, Ms. Rhett, was
"affected by pregnancy, childbirth or related medical conditions" at the time of the
reduction in force; that is, she was temporarily absent from work because of the
reasons specified in the statute. The other persons were "not so affected." The
reason plaintiff was the one chosen to be terminated, was, according to the company
and to the courts below, because she was absent as a result of her pregnancy. The
other persons were not considered for termination precisely because they were not
affected by pregnancy, childbirth or a related medical condition in that they were
not absent from work as a result of any of those reasons. Thus, plaintiff was not
"treated the same" for an "employment-related purpose" as persons "not affected"
by pregnancy.
3. Plaintiff was similar in her ability to work to persons not affected by
pregnancy.
At the time plaintiff was terminated, she was on the verge of returning to her
job. and had expected to do so shortly after March 26. Both the Bankruptcy Court
and the District Court found that she was a satisfactory employee, and the employer
did not purport to make its decision to terminate her on the basis of performance.
Indeed, it is clear that the decision to terminate her was not based on a weighing
- 15 -
of the comparative qualifications and performances of all the secretaries involved,
but solely on the fact that she was absent because of her pregnancy.8
In short, it is clear that the decision to terminate plaintiff (by abolishing her
position rather than the position held by another person not affected by pregnancy)
violated the explicit terms of the statute. The decision maker, Mr. Landis, knew she
was pregnant and that that was the reason she was absent from work (J.A. 64-65,
177 (Ex. C-4), but nevertheless decided to terminate her.
This case is governed by the decision of the Supreme Court in Trans World
Airlines, Inc. v. Thurston, 469 U.S. I l l (1985), since the termination decision was
based on the effects of plaintiffs pregnancy. That is, persons unaffected by
pregnancy were retained while plaintiffs position was eliminated solely because she
was affected by pregnancy. In Thurston, captains disqualified as pilots for reasons
8Gormisky agreed that he "didn’t participate in any process whereby anybody
evaluated [Rhetf s] qualifications against the qualifications of other secretaries at the
time, to decide which secretary should be let go," J.A. 169-70. Turndorf, when asked
why Rhetf s position was eliminated, stated only that "It was economically driven,"
J.A. 127. (Although Alan Landis made the decision to eliminate Rhetf s job and
neither Turndorf or Gormisky had authority to hire or fire any employee, Bankr. Ct.
Op. at 3 (finding no. 2), they were the only witnesses presented by defendant at
trial. Id. at 2.)
While defendant presented some evidence at the hearing that one of the other
persons had proved, after plaintiff s termination, to be a superior secretary, as noted
above, the decision to terminate plaintiff was not, at the time it was made, based on
any comparison between her and any other person who was retained. Indeed,
Gormisky agreed that at the time plaintiff was terminated, he would not have been
able to make a comparison between Rhett and Kirsten Wolf, whose performance
he later rated highly. J.A. 166; see also id. at J.A. 169-70.
- 16 -
other than age were allowed to bump less senior flight engineers, while captains
disqualified by reason of age were not. Although TWA was not prohibited from
retiring all disqualified captains, the Court held that it could not make the
availability of a transfer to another job "dependent upon the age of the individual"
without violating the law against age discrimination.9 469 U.S. at 124. Similarly
here, Carnegie Center Associates, while it could eliminate some or all of the jobs
in question, could not make the decision whether to eliminate a particular job
dependent on whether the person occupying the job was affected by pregnancy.
Under Thurston, the burden shifted to the defendant employer to prove that
the action was justified by an affirmative defense recognized by Title VII (such as
a BFOQ). 469 U.S. at 121-22. Here, although the lower courts did not explicitly
analyze the situation under Thurston, the record is clear that defendant could not
meet that burden. Moreover, none of the other justifications for the company’s
actions advanced by the courts below are legally sound.
First, the court below relied on the proposition that in the absence of a formal
maternity leave policy, plaintiff was not an employee at the time she was terminated
and had no expectation of returning to work and therefore, there was no violation
9See UAW v>. Johnson Controls, 499 U.S. 187, 199 (1991) ("Whether an
employment practice involves disparate treatment through explicit facial
discrimination does not depend on why the employer discriminates but rather on the
explicit terms of the discrimination.").
- 17 -
of Title VII.10 This conclusion was in error as a matter of law for a number of
reasons. In the first place, under Title VII, plaintiffs technical employment status
is irrelevant. The statute simply provides that it is illegal to treat a woman who is
affected by pregnancy differently from persons who are not so affected for all
"employment-related purposes." Whether or not Ms. Rhett was an "employee," the
position she had held was targeted for elimination because of her pregnancy, and
the positions held by employees not affected by pregnancy were not even considered
for elimination. In the second place, the defendant clearly treated her as an
employee on leave. For example, it hired temporary employees to perform her
duties, it provided her medical benefits up until March 26, 1991, it did not send her
COBRA information until after that date, and it carried her as an employee until
her termination on that date. See Statement of the Facts, supra, at pp. 7-8. Finally,
under New Jersey law, p la in tiff^ have an expectation that she would return to her
job. The New Jersey Family Leave Act specifically provides that a person absent
because of pregnancy must be offered her job back unless, because of downsizing.
10The Bankruptcy Court found that "the fact that Rhett was not working for the
company at the time made it logical that she be the one [whose job was
eliminated]," Bankr. Ct., Op. at 15. See also Dist. Ct. Mem. Op. at 5, n.3.
- 18 -
her position has been eliminated for reasons unrelated to her pregnancy.11 Here,
the only reason plaintiff’s position was eliminated was because of her pregnancy.
Second, the District Court held that since the reason plaintiffs position was
eliminated was because she was absent, her termination was not based on her
pregnancy. This conclusion, however, ignores the plain language of the statute,
which prohibits treating an employee affected by pregnancy differently from
employees who are not so affected. Since the sole reason for plaintiffs absence was
pregnancy, she was beyond question a woman "affected by pregnancy." The
employer was required to make its judgment as to which position to eliminate as if
she were not "affected by pregnancy," that is, as if she were not absent. Compare
Smith v. F.W. Morse & Co., 76 F.3d 413 (1st Cir. 1996) (defendant justified in
eliminating the particular position of an employee who was on maternity leave
"N.J.S.A. § 34:1 IB-7 states (emphasis added):
An employee who exercises the right to family leave under section 4 of
this act shall, upon the expiration of the leave, be entitled to be restored
by the employer to the position held by the employee when the leave
commenced or to an equivalent position of like seniority, status,
employment benefits, pay, and other terms and conditions of
employment. If during a leave provided by this act, the employer
experiences a reduction in force or layoff and the employee would have
lost his position had the employee not been on leave, as a result of the
reduction in force or pursuant to the good faith operation of a bona
fide layoff and recall system including a system under a collective
bargaining agreement where applicable, the employee shall not be
entitled to reinstatement to the former or an equivalent position.
- 19 -
during retraction because it had made a specific determination that the particular
position was redundant and that the position would have been eliminated even had
she not been on leave). Smith, of course, has no application to this case. "The
operation of Carnegie was very loose . . . all secretaries and office personnel covered
for one another." Bankr. Ct. Op. at 4 findings no. 7).
Third, the District Court noted that plaintiff was no longer pregnant when she
was terminated and suggested that for this reason, her termination was lawful. Dist.
Ct. Mem. Op. at 15. This conclusion also ignores the plain language of the statute,
which is not limited to pregnancy, but includes the effects of childbirth and "related
medical conditions." Plaintiffs leave involved all three and nothing else.
In sum, when defendant decided to eliminate one of the secretarial positions,
it was required by Title VII, as amended by the Pregnancy Discrimination Act, to
do so uninfluenced by plaintiffs pregnancy and its effects on her. The employer had
to use pregnancy-neutral criteria to determine whether her position, as opposed to
other equivalent positions, should have been eliminated. Clearly if plaintiff were
pregnant but still on the job and scheduled to go on leave in the future, her
employer could not terminate her because of that effect of her pregnancy.12 It
nSee Florsheim Shoe Co. v. Illinois Fair Employment Practices Commn., 99 111.
App. 3d 868, 425 N.E.2d 1219 (1981) (policy of laying off pregnant employees on
the ground that it was thought "they would be leaving anyway" violated Illinois’
analogue to Title VII; state court relied on interpretation of Title VII in Nashville
Gas Co. v. Satty, 434 U.S. 136 (1977)).
- 20-
could also not terminate her because she was already on leave due to her pregnancy,
and scheduled to return.
Carnegie Center Associates has advanced no other reason or justification for
its decision to terminate Ms. Rhett. Therefore, this case must be remanded with
instructions that judgment must be entered in her favor under the rule of Trans
World Airlines, Inc. v. Thurston.
B. Plaintiff is entitled to judgment under the
rule of McDonnell Douglas v. Green.____
The court below analyzed this case based on the scheme set out in McDonnell
Douglas Corp. v. Green, 411 U.S. 792 (1973), and its progeny. As discussed above,
the proper basis for analysis is Trans World Airlines, Inc. v. Thurston, since the facts
establish a per se violation of Title VII without resort to circumstantial evidence.
See 469 U.S. at 121. However, even under a McDonnell Douglas analysis plaintiff
is entitled to judgment according to law, since the defendant has offered no
"legitimate, nondiscriminatory reason" for its action.
To begin with, it is clear that the plaintiff made out a prima facie case of
discrimination under the McDonnell Douglas analysis as explicated by this Court in
Marzano v. Computer Science Corp., 91 F.3d 497 (3d Cir. 1996). Marzano also dealt
with a layoff in the context of a reduction in force. In those circumstances, a prima
facie case is established by evidence that (1) plaintiff belongs to a protected class;
(2) she was qualified for the position; and (3) she was terminated despite being
- 21 -
qualified, while (4) at the same time persons outside of the class were retained.13
Here, plaintiff belongs to the protected class of women affected by pregnancy,
childbirth, or related medical conditions, she was fully qualified for the position she
had held as demonstrated by her satisfactory performance over a period of time, and
she was terminated despite her qualifications while persons unaffected by pregnancy
were retained.14
Under McDonnell Douglas, proof of a prima facie case creates a presumption
that the challenged employment action was motivated by discrimination.15 The
plaintiff is entitled to a judgment in her favor unless the employer meets its burden
of producing evidence of a legitimate, nondiscriminatory reason for the action.
13In the context of a reduction in force, Marzano holds that it is not necessary,
because it is impossible, to show that the plaintiff was ultimately replaced by a
person outside of the protected class. 91 F.3d at 503 (citing cases).
14Contrary to the approach of the courts below, it is not necessary for plaintiff
to prove, in order to establish a prima facie case, that she was "singled out."
Compare Marzano, 91 F.3d at 497 with Bankr. Ct. Op. at 12, and Dist. Ct. Mem. Op.
at 10.
15'The evidentiary burden [at the prima facie stage] is rather modest: it is to
demonstrate to the court that plaintiffs factual scenario is compatible with
discriminatory intent -- i.e., that discrimination could be a reason for the employer’s
action. As we have held on numerous occasions, this initial burden is not intended
to be onerous." Marzano, 91 F.3d at 508 (internal quotes omitted) (citing Sempier
v. Johnson & Higgins, 45 F.3d 724. 728 (3d Cir.), cert, denied, __ U .S.___ , 115 S.
Ct. 2611 (1995) and Burdine, 450 U.S. at 253). See also, Torre v. Casio, Inc., 42 F.3d
825. 829 (3d Cir. 1994) (describingprima facie case as "relatively simple"); McKenna
v. Pacific Rail Service, 32 F.2d 820, 825 (3d Cir. 1994) (same); Massarsky v. General
Motors Corp., 706 F.2d 111, 118 (3d Cir.) (describing prima facie case as "easily made
out"), cert, denied, 464 U.S. 937 (1983).
- 22-
Texas Dep’t o f Community Affairs v. Burdine, 450 U.S. 248 (1981); St. Mary’s Honor
Ctr. v. Hicks, 509 U.S.__ , 125 L. Ed. 2d 407 (1993). The defendant has not met
its burden because its reason is neither legitimate nor nondiscriminatory.
The only reason advanced by Carnegie Center Associates is that plaintiff was
selected for termination through elimination of her position because she was absent
due to her pregnancy. Since, as discussed above, that reason is illegal under Title
VII, it is discriminatory per se and cannot be legitimate and nondiscriminatory within
the meaning of Burdine.
Further, if arguendo the reason were to be considered nondiscriminatory, the
action defendant took for this reason had a discriminatory impact based on race,
and, therefore, cannot rebut the prima facie case of intentional discrimination absent
an adequate justification. See Griffin v. Carlin, 755 F.2d 1516, 1526-28 (11th Cir.
1985) (in class action, test with disparate impact on Blacks cannot be used to rebut
prima facie case of disparate treatment without a showing of business necessity);
accord Segar v. Smith, 738 F.2d 1249, 1268-70 (D.C. Cir. 1984); Hogan v. Pierce, 31
Fair Empl. Prac. Cases 115, 126 (D.D.C. 1983) (in individual discrimination case,
McDonnell Douglas prima facie case cannot be rebutted by evidence that a criterion
with disparate impact on Blacks was used).16
16The disparate impact analysis applies to claims of pregnancy discrimination
under Title VII as well as to claims of racial discrimination. E.g., Garcia v. Woman’s
Hosp. o f Texas, 97 F.3d 810 (5th Cir. 1996); Hayes v. Shelby Memorial Hosp., 726
F.2d 1543 (11th Cir. 1984).
- 23 -
Although the evidence in this case involves only one small company and four
jobs, disparate impact analysis is appropriate. See Betsey v. Turtle Creek Assocs., 736
F.2d 983 (4th Cir. 1984) (in housing discrimination suit, disparate impact analysis
applied to single unit of housing) (relying upon Connecticut v. Teal, 457 U.S. 440,
453 (1982)). In the present case, the issue is whether the criterion of absence from
the job site had a disparate impact as to race, sex, or a combination of both. In the
universe of secretaries whose jobs were at risk of elimination during downsizing, the
use of this criterion affected only pregnant Black women, viz., Ms. Rhett.
Therefore, the criterion had a discriminatory impact and cannot be used to rebut
her prima facie case.
Since Carnegie Center Associates failed to produce evidence of a legitimate,
nondiscriminatory reason for terminating Ms. Rhett, the presumption created by her
prima facie case of discrimination remains unrebutted, and under McDonnell Douglas
as under Thurston, she is entitled to judgment as a matter of law. St. Mary’s Honor
Ctr. v. Hicks, 125 L. Ed. 2d at 416, 417-18.
II. THE COURTS BELOW ERRED AS A MATTER OF LAW BY FAILING
TO EVALUATE WHE T HE R P LAI NTI FF S UF F E R E D
DISCRIMINATION ON ACCOUNT OF HER RACE AND GENDER
The Bankruptcy Court, which conducted a bench trial of plaintiffs
discrimination claims, made a fundamental error in analyzing the evidence that
fatally infected its conclusion that plaintiff had failed to prove her case. That error
- 24 -
was to evaluate the matter as though plaintiff had solely alleged alternative claims
of race or gender discrimination, rather than to assess her claim that she suffered
discrimination because of her status as a black woman who became pregnant. See
Bankr. Ct. Op. at 10 (finding no. 39) (no evidence that plaintiff discriminated
against "on the basis of race"); id. (no. 40) (no evidence that plaintiff discriminated
against "on the grounds that she was a single and/or unwed mother"). The District
Court affirmed the Bankruptcy Court on the basis of the same misconception, see
Dist Ct. Mem. Op. at 14 ("This Court agrees with the Bankruptcy Court that Rhett
did not establish [even] a prima facie case of direct discrimination on the basis of
either race or her gender") (emphasis added in part), 16 (District Court would
consider correctness of Bankruptcy Court’s "conclusion that plaintiff failed to
establish [even] a prima facie case of discrimination, based on either race or the
PDA" through circumstantial evidence) (emphasis added in part); see id. at 16-19
(concluding no error in rejecting plaintiff s circumstantial claim with respect to gender
discrimination under PDA) (emphasis added), 19 (District Court "similarly
constrained to reject Rhett’s argument that the Bankruptcy Court failed to consider
her circumstantial case of racial discrimination") (emphasis added). This critical
conceptual error skewed the lower courts’ assessment of the evidence, as we
demonstrate below, and it requires that the judgment of the District Court be
reversed.
- 25 -
A. A claim of discrimination based upon race
and gender is not the same as, nor is evidence
offered to support it properly analyzed as,
a claim of discrimination based either upon
race or upon gender____________________
Although this Court has not yet had occasion to decide the question, other
federal Courts of Appeals have held that in cases alleging race and gender
discrimination, trial courts must evaluate whether there was discrimination at the
intersection of race and gender, rather than limiting the analysis to whether there
was race discrimination or gender discrimination. See, e.g., Lam v. University of
Hawaii, 40 F.3d 1551 (9th Cir. 1994); Chambers v. Omaha Girls Club, 834 F.2d 697,
701 (8th Cir. 1987), affg 629 F. Supp. 925, 946 n.34 (D. Neb. 1986); Hicks v. Gates
Rubber Co., 833 F.2d 1406, 1416 (10th Cir. 1987); Jefferies v. Harris County
Community Action Ass’n, 615 F.2d 1025, 1032-34 (5th Cir. 1980); cf Moore v. Hughes
Helicopters, Inc., 708 F.2d 475, 480 (9th Cir. 1983) (no error in limiting class
certification to "black females" based upon inadequacy of representation where
plaintiffs EEOC charge claimed discrimination only as a "black female" and her
deposition testimony raised doubt as to whether she believed black males suffered
discrimination).
In Lam . the Ninth Circuit rejected the district court’s attempt to "view racism
and sexism as separate and distinct elements . . . so that evaluating discrimination
against an Asian woman became a simple matter of performing two separate tasks:
looking for racism ‘alone’ and looking for sexism ‘alone,’ with Asian men and white
- 26 -
women as the corresponding model victims," 40 F.3d at 1561, holding that "[a]s other
courts have recognized, where two separate bases for discrimination exist, they
cannot be neatly reduced to distinct components," id. at 1562 (citing cases). The
Lam court explained that "[rjather than aiding the decisional process, the attempt
to bisect a person’s identity at the intersection of race and gender often distorts or
ignores the particular nature of their experiences." Id. (citing Kimberle Crenshaw,
Demarginalizing the Intersection o f Race and Gender: A Black Feminist Critique of
Antidiscrimination Doctrine, Feminist Theory and Antiracist Politics, 1989 U. Chi.
Legal F. 139). Thus, the court concluded, "when a plaintiff is claiming race and sex
bias, it is necessary to determine whether the employer discriminates on the basis
of that combination of factors, not just whether it discriminates against people of the
same race or the same sex." Id. at 1562 (emphases in original), citing Connecticut
v. Teal, 457 U.S. 440, 455 (1982) ("Title VII does not permit the victim of a facially
discriminatory policy to be told that he has not been wronged because other persons
of his or her race or sex were hired").
Similarly, the court in Jefferies recognized "that discrimination against black
females can exist even in the absence of discrimination against black men or white
women," 615 F.2d at 1032. It therefore concluded that black women may be
considered to be a class separate and distinct from the class of women and the class
of Blacks where both race and sex discrimination are alleged, and that the district
court in that case had erred in failing to evaluate the evidence at trial in light of
- 27 -
plaintiffs’ separate claim of race and sex discrimination, id. The Court of Appeals
in Jefferies relied upon "the holdings of the Supreme Court and this Court in the ‘sex
plus’ cases," id. at 1033, discussing, inter alia, Phillips v. Martin Marietta Corp., 400
U.S. 542 (1971) (error for Court of Appeals to sustain ruling that no question of
gender bias presented in case involving discrimination against subclass of women
with pre-school-age children by employer which maintained different policy for men
with pre-school-age children), Jacobs v. Martin Sweets Co., 550 F.2d 364, 371 (6th
Cir.) (company violated Title VII by firing single women who became pregnant),
cert, denied, 431 U.S. 917 (1979), and Sprogis v. United Air Lines, Inc., 444 F.2d 1194
(7th Cir. 1971) (discrimination against subclass of women who were married violates
Title VII where employer had different policy for married men).17 "Therefore," the
Fifth Circuit ruled in Jefferies, "when a Title VII plaintiff alleges that an employer
discriminates against black females, the fact that black males and white females are
not subject to discrimination is irrelevant and must not form any part of the basis
for a finding that the employer did not discriminate against the black female
plaintiff." 615 F.2d at 1034.
17The Jefferies court said, 615 F.2d at 1034:
It is beyond belief that, while an employer may not discriminate against the
subclasses of women [involved in the "sex plus" cases], he could be allowed to
discriminate against black females as a class. This would be a particularly
illogical result, since the "plus" factors in the former category are ostensibly
"neutral" factors, while race itself is prohibited as a criterion for employment.
- 28 -
B. The failure of the courts below to apply this
principle to the present case resulted in erroneous
factual analysis and the incorrect conclusion that
plaintiff suffered no discrimination.____________
Both the Bankruptcy Court and the District Court in this case failed to
recognize that plaintiff had raised a claim of discrimination at the intersection of race
and gender.18 Although it initially recited that plaintiff "claims that she was
discharged from employment by [defendant] because of her race and gender," Dist.
Ct. Mem. Op. at 1 (emphasis added), the District Court throughout the remainder
of its opinion repeatedly refers to race or gender in its analysis. See, e.g., id. at 14
("This Court agrees with the Bankruptcy Court that Rhett did not establish a prima
facie case of direct discrimination on the basis of either race or gender") (emphasis
added in part), 16 ("[Plaintiff] also challenges the Bankruptcy Court’s conclusion
that plaintiff failed to establish a prima facie case of discrimination, based on either
race or the PDA, under McDonnell Douglas") (emphasis added in part).
That, of course, was the only way in which the District Court could have
affirmed the determination of the Bankruptcy Court, for that court also had erred
by evaluating race and pregnancy discrimination separately. See Bankr. Ct. Op. at
1K,The Pregnancy Discrimination Act has now made clear that, for all Title VII
purposes, discrimination based on a woman’s pregnancy is on its face, discrimination
because of her sex." Newport News Shipbuilding & Dry Dock Co. v. EEOC, 462 U.S.
669, 684 (1983). See Marzano v. Computer Science Corp., 91 F.3d 497, 506 (3d Cir.
1996) ("pregnant employees" are protected class under provision of New Jersey Law
Against Discrimination barring refusal to hire or discharge "because of the . . . sex
. . . of any individual," N.J.S.A. 10:5-12(a)).
- 29 -
10 ("The question before this court is whether or not Deborah Rhett found herself
without a job because of her race or her position as an unwed pregnant woman)
(emphasis added); id. at 10 (separate finding no. 39 that "[tjhere is not a scintilla
evidence that any person at Carnegie who had the power to hire or fire,
discriminated against Rhett on the basis of her race") and id. (separate finding no.
40 that "[tjhere is not a scintilla of evidence that any person at Carnegie who had
the power to hire or fire discriminated against Rhett on the grounds that she was
a single and/or unwed mother").
This erroneous interpretation of plaintiffs’ claim fatally infected both lower
courts’ assessment of the evidence in this case. The Bankruptcy Court, for example,
took race out of the equation in considering whether a "disparate treatment"
violation had been proven, based upon its observations that (1) plaintiff did not
accuse the company of discriminating against all of its black employees, and (2)
other black employees were "well treated," Bankr. Ct. Op. at 12. As to the former
point, it merely underscores the fact that plaintiff claimed discrimination on account
of her race and gender, not that black male and pregnant black female employees
suffered equally from discrimination. As to the latter, a comparison of the plaintiff
to co-workers who did not suffer adverse employment actions is simply irrelevant
unless the comparison group consists of other black employees who were also in the
protected class, i.e., were also pregnant. See, e.g., EEOC v. Ackerman, Hood &
McQueen, 956 F.2d 944, 948 (10th Cir. 1992) (rejecting defendant’s claim that
- 30 -
treatment of plaintiff, a pregnant female, should be compared to that of male co
workers, in case where there was evidence that non-pregnant female employees were
treated better than plaintiff). The Bankruptcy Court, however, made no such
relevant comparison or finding, and it could not have done so because the only
evidence offered by defendant on this issue concerned a non-pregnant black
employee who in any event worked for an affiliated but separate company.19
The defendant might also have sought to have the trier of fact compare
plaintiffs experience with that of other company employees who did suffer adverse
employment actions in an effort to demonstrate that non-black employees who were
not pregnant but who were otherwise similarly situated to plaintiff received similar
treatment. There was no such proof in this case, however. Pregnant white women
who took leave from their positions for childbirth got their jobs back, unlike
19Erica Campbell worked not for Carnegie Center Associates, which employed
the plaintiff, but for a separate entity controlled by Alan Landis known as Peoca
J.A. 26-27). Although the Bankruptcy Court permitted evidence concerning
Campbell’s work history to be introduced by defendant (in spite of the fact that the
reduction in force to which defendant attributed the decision to terminate plaintiff
was limited to Carnegie Center Associates), the court also announced that it would
not receive statistical information proffered by plaintiffs’ counsel showing the racial
composition of the workforce of other entities owned by Alan Landis (collectively
referred to as the "Landis group") J.A. 82-102.
In any event, Campbell did not become pregnant while employed by a Landis-
controlled company until 1994, when she got married - well after the events in
question here and after plaintiff had filed suit claiming race and sex discrimination.
Campbell’s experience in 1990 and 1991, when she was not pregnant and not
employed by Carnegie Center Associates, is therefore hardly an appropriate subject
for comparison to the plaintiffs treatment.
- 31 -
plaintiff. See Statement of the Facts, supra pp. 7-8. While the existence of evidence
of an adverse decision against individuals not in the protected class would not
necessarily have undermined plaintiffs case, see Marzano, 91 F.3d at 506, 508 n.4 &
accompanying text, the absence of such evidence strengthens the discriminatory
inference that similarly situated individuals were treated more favorably.
Turning separately to the gender discrimination question, the Bankruptcy
Court opined that the evidence "clearly showed that an individual who left to have
a baby had no absolute right to keep her job," Bankr. Ct. Op. at 12, completely
overlooking the fact that as a matter o f p r a c t i c e the only employee whose
employment was interrupted21 for pregnancy and childbirth and who was not
permitted thereafter to return to work for Carnegie Center Associates was a black
pregnant employee. As to employees unable to work because of medical conditions
other than pregnancy, the only evidence of defendant’s practice indicated that such
employees were also allowed to return to their jobs — although, again, the element
of race was excluded from consideration:
™Cf EEOC v. Ackerman, Hood & McQueen, 956 F.2d at 946 (finding company
that did not have any "written policies governing either medical or personal leave"
nevertheless violated PDA by treating pregnant employee differently with respect
to requested exemption from overtime work than it had consistently treated other
employees seeking schedule adjustments for personal or medical reasons).
‘‘As we have argued above, the only rational interpretation of the evidence is
that plaintiff was still an "employee" but was merely on leave until March 26, 1991,
when the decision to eliminate her position was made. See Statement of the Facts,
supra at pp. 3-5.
-3 2 -
Q. Now, do you recall any individual in the company, be it male or female,
who had any disability of any duration, let’s just say over 30 days, that left and
then came back to the same position?
A. We had people over the course of time that had operations or illnesses,
but I can’t think of any protracted situation.
Q. Protracted being several months?
A. Well, I can’t think of one. You know, we’ve had people have, you
know, calamities in their life, injuries, illnesses, and they would take a little
time, and we didn’t track it very well. But I can’t think of any protracted one,
though.
J.A. 142 (emphasis added).22
Thus, it is only by virtue of its error in compartmentalizing the evidence and
treating plaintiffs claim as if she had made separate allegations of discrimination
based on race and discrimination based on sex, that the Bankruptcy Court could
have concluded that there was "not a scintilla" of evidence of discriminatory
“Similarly, the lower courts' focus on separate consideration of plaintiffs claims
of race and sex discrimination led them to consider the negative comments made to
plaintiff about her pregnancy by Turndorf and Gormisky (see Statement of the
Facts, supra pp. 2-3) only with respect to the sex discrimination issue, without
recognizing that such comments could also reflect negative stereotypical assumptions
about black women. Dist. Ct. Mem. Op. at 15. See Lam, 40 F.3d at 1562 ("Like
other subclasses under Title VII, Asian women are subject to a set of stereotypes
and assumptions shared neither by Asian men nor white women"); Felts v. Radio
Distributing Co., 637 F. Supp. 229. 231 (N.D. Ind. 1985) (holding demotion of
plaintiff while she was on pregnancy leave to violate Title VII in light of other
evidence, including employer's comment that "we don’t have to take her back,
especially if she’s not married"). See also Lisa A. Crooms, Stepping Into the Projects:
Lawmaking, Storytelling, and Practicing the Politics o f Identification, 1 Mich. J. of
Race & Law 1, 6 n.6 & accompanying text, 13 n.13 & accompanying text (1996)
(discussing stereotypes of single black mothers as bad mothers "leading passive lives
of reproduction and consumption").
- 33 -
treatment in this record — a conclusion that was adopted and affirmed by the
District Court on the basis of the same error. That conclusion unmistakably
affected the Bankruptcy Court’s ultimate determination whether, on the record as
a whole, plaintiff had demonstrated discrimination by a preponderance of the
evidence, and the District Court’s acceptance of that ultimate determination. The
judgment below therefore should be reversed and the case remanded for application
of the proper legal standards to this claim of race and gender discrimination.
III. THE RULING OF THE COURTS BELOW, THAT PLAINTIFF WAS NOT
QUALIFIED FOR OTHER POSITIONS THAT BECAME VACANT AT
CARNEGIE DURING HER PREGNANCY LEAVE OR IMMEDIATELY
AFTER HER JOB WAS ELIMINATED, AND THEREFORE WAS NOT
TREATED DIFFERENTLY BECAUSE OF HER RACE OR SEX BY
NOT BEING CONSIDERED FOR THOSE POSITIONS, WAS CLEARLY
ERRONEOUS.
As previously noted, the evidence in this case showed that defendant’s
consistent practice, prior to the events which gave rise to this lawsuit, had been to
allow employees who took pregnancy leaves to resume their old jobs or fill other
positions. See Statement of the Facts, supra pp. 7-8; Bankr. Ct. Op. at 6 (finding
no. 23): Dist. Ct. Mem. Op. at 3. Turndorf described the company’s practice
regarding pregnancy leave as follows:
In the event the position is available as such time as they return to
employment, they will be offered their original position. In the event that
position has been filled and they are qualified for another position and there
is an opening for that position, then the individual would be re-employed.
- 34 -
J.A. 185-86 (Ex. C-10, Tab A, at 13-14 (Turndorf Dep.)). Plaintiff testified at trial
that during the period that she was out on maternity leave, at least three positions
became open: (1) Property Management Administrative Assistant; (2) Secretary to
Mr. Landis; and (3) Receptionist - and that she possessed the required
qualifications to perform all three positions. J.A. 72-77. However, at the time the
decision was made to terminate her employment no consideration was given to
placing plaintiff in any other position, whether temporary or permanent. J.A. 139,
171-72.
The courts below rejected plaintiffs claim that she was subjected to disparate
treatment based on her race and gender because the company refused to consider
her for any of the job openings because they found Rhett was unqualified for these
openings. See Bankruptcy Court Op. at 13; District Court Mem. Op. at 18-19.
These findings rest upon faulty analysis of the evidence and are clearly erroneous.
Both the lower courts erroneously described the Administrative Assistant job as an
"assistant to Landis," even though there was no trial testimony to this effect.23 The
23There were other factual errors in the Bankruptcy Court’s opinion, most of
which we do not discuss here in order not to unduly lengthen this brief. For
instance, it was clear error for the Bankruptcy Court to attribute to Turndorf, rather
than Gormisky, a comment made to plaintiff (in December, 1990) that she was on
"thin ice," and then to minimize the significance of this remark by placing it in the
context of Turndorf s testimony. See Bankr. Ct. Op. at 7 (finding no. 25). In fact,
when plaintiff spoke with Gormisky in December, 1990 about her impending
pregnancy leave, it was he who said to plaintiff, "if I were you, I would not tread on
thin ice." J.A. 61. However, because the Bankruptcy Court mistakenly believed that
Turndorf had made these remarks, it drew the inference that they referred to with
- 35 -
lower courts further failed to take into account the fact that the Administrative
Assistant position was filled through word-of-mouth recruitment, and that such
"informal, secretive and subjective hiring practices are suspect because they tend to
facilitate the consideration of impermissible criteria[,]" EEOC v. Metal Serv. Co.,
892 F.2d 341, 350 (3d Cir. 1990). Moreover, the Bankruptcy Court failed to even
consider Rhett’s claim with respect to the Receptionist position, and the District
Court did no more in reviewing the Bankruptcy Court’s ruling than to aver that the
record supported the conclusions that the Bankruptcy Court stated. Cumulatively
these errors fatally undermine the District Court’s ultimate conclusion that plaintiff
suffered no discrimination by not being hired into one of the vacant positions.
Plaintiff made out a prima facie case of discrimination by demonstrating that
she (i) belonged to a racial minority; (ii) was qualified for these three positions; (iii)
despite her qualifications, she was not hired for these positions; and (iv) the
employer sought applicants from persons of plaintiffs qualifications. McDonnell
Douglas, 411 U.S. at 802. The third and fourth prongs of the McDonnell Douglas
analysis must be relaxed, because plaintiff was never actually given an chance to
Turndorfs assessment of plaintiffs job performance consistent with Turndorfs
testimony on this subject, and the Court did not evaluate their significance, along
Gormisky's other comments, as reflective of stereotypical thinking about pregnant
black female employees by defendant’s officers. Such attitudes are directly relevant
to the company’s unwillingness to consider Rhett for other vacancies at the time her
position was abolished. The comments were made within the decision-making
process by company officials who had input into that process. 11/30 Tr. 87, J.A. 136
145, 167.
- 36 -
even apply for these positions, and in fact there was proof that at least one of these
positions, the Administrative Assistant job, was filled through word-of-mouth hiring.
See Metal Serv. Co., 892 F.2d at 347-51 (citing cases).24
1. Administrative Assistant Position
On March 28, 1996, upon receiving the letter announcing her termination
from the company, plaintiff had a telephone conversation with Gormisky, who
reiterated that her job had been abolished. Rhett inquired why she had not been
considered for the Administrative Assistant position vacated by Kathleen Cohen.
Mr. Gormisky told her that he did not know why; that he did not hire for the
position. J.A. 69-70.
In fact, prior to vacating her position as Administrative Assistant, Kathleen
Cohen advised Tammi Medoff, a white woman Cohen had already known from
outside the company, of the vacancy for her position. J.A. 192 (Ex. C-10, Tab A,
at 73) (Turndorf Dep.). Medoff applied for the position held by Cohen on March
23, 1991 and she was hired into the position on March 25, 1991, J.A. 204 (Ex. C-10,
Tab P), the day before Rhett’s termination. J.A. 178 (Ex. C-5) The position
vacancy created by Cohen’s departure was not advertised by Carnegie. J.A. 141.
24As this Court there said, referring to word-of-mouth recruiting and hiring: "A
relaxation of the application element of the prima facie case is especially
appropriate when the hiring process itself, rather than just the decision-making
behind the process, is implicated in the discrimination claim or is otherwise suspect,"
892 F.2d at 349.
- 37 -
Such word-of-mouth recruitment and hiring "may raise an inference of intentional,
racially-disparate treatment without proving that [plaintiff] technically applied for
[the position]." Metal Serv. Co., 892 F.2d at 350 {quoting Roberts v. Gadsden
Memorial Hosp., 835 F.2d 793, 797 (11th Cir. 1988) (finding that "[although the
plaintiff was qualified for the position, the white worker landed the job primarily,
it seems, because of his attendance at the hospital administrator’s barbecues and his
becoming the administrator’s ‘drinking buddy’")).
No one at Carnegie contacted Rhett to find out if she was interested in the
Administrative Assistant position. If Rhett had been contacted, she would have
expressed interest in the position. J.A. 71 She was fully qualified to perform the
duties of the position. J.A. 72-74.25 Rhett was familiar with the duties of the
position by virtue of her working with Ms. Cohen and observing her performance
of her duties. J.A. 72. Moreover, throughout her active employment as a Secretary,
Rhett satisfactorily performed aspects of the position while Cohen was absent. Id.
“’The duties of the position of Administrative Assistant are set forth in J.A. 179-
83 (Ex. C-6). The position was little more than a secretarial position. J.A. 24, 173.
11/30 Tr. 178. The position of administrative assistant, which previously was called
Property Management Secretary, had on several occasions been performed by
temporary employees from an outside agency. Ms. Rhett recalled that a temporary
employee had occupied the position for a year when Rhett came to Carnegie as a
temporary employee herself. J.A. 50. Brenda Sirkis, who was employed by
Carnegie as a Secretary, recalled the position being filled by a temporary employee
on two occasions: on one occasion for three months and on the other occasion for
a period of one month. J.A. 23.
- 38 -
Furthermore, after Tammi Medoff, Kirsten Wolf eventually advanced to the
position of Administrative Assistant. At the time of the reduction in force, Wolf
had only been a secretary for about four months, in contrast to Rhett’s twenty
months in the position, Bankr. Ct. Op. at 3 (finding no. 6); id. at 5 (no. 14).
Moreover, whereas Rhett had extensive secretarial work experience before starting
her employment at Carnegie (extending from her high school graduation date in
1978), Wolf had none and had in fact graduated from high school only a year before
starting as a receptionist at Carnegie in July, 1989. J.A. 30-145, 107, 174-75 (Ex. C-
1), 207 (Ex. C-14). Despite these facts. Wolf was retained and eventually promoted
to Property Management Administrative Assistant.
2. Secretarial Position
The opening for a Secretary to Mr. Landis, which was created by Barbara
MacGregor’s taking pregnancy leave, was temporarily filled by Rachael Drexinger,
a white woman, until MacGreagor's return. Drexinger, who had previously been a
temporary Receptionist, filled in for MacGreagor between January 1991 to June
1991. J.A. 151-52, 199 (Ex. C-10, Tab J, at 1). Drexinger was brought in from a
temporary agency in December 1990. J.A. 150. No one at Carnegie contacted
Rhett to find out if she was interested in the Secretary to Landis position. J.A. 77.
Had she been contacted, she would have expressed interest in the position. J.A. 75-
76. She was fully qualified to perform the duties for the position, given her
extensive secretarial experience. J.A. 30-45, 76, 174-75 (Ex. C-l).
- 39 -
3. Receptionist Position
The Receptionist opening was first filled by Rachael Drexinger (before she
filled in for MacGreagor) and after Ms. Drexinger vacated the position, by white
temporary employees, all of who were from and outside temporary employment
agency. J.A. 201 (Ex. C-10, Tab K, at 1). No one at Carnegie contacted Rhett to
find out if she was interested in the Receptionist position. J.A. 77. She would have
expressed an interest in the position had she been contacted. Id. She was fully
qualified to perform the duties of the position, as she had experience answering
phones and sitting in for the receptionist during periods that she was out; and it was
not unusual for individuals to be promoted from Receptionist to Secretary as the
latter position, which plaintiff had held, required additional skills beyond answering
phones. J.A. 30-45, 109-12. See also Bankr. Ct. Op. at 4 ("all secretaries and office
personnel covered for one another to the extent that they were able").
The clear errors in subsidiary fact-finding outlined above fatally undermine
the lower courts’ conclusion that plaintiff was not subjected to discrimination by not
being offered the opportunity to fill one or more of the positions at Carnegie which
became vacant during her pregnancy leave and at the time of the company’s
reduction in force in its secretarial ranks. The judgment below should therefore be
reversed on that claim and the matter remanded for reconsideration in light of a
correct appreciation of the subsidiary facts.
- 40 -
CONCLUSION
For the foregoing reasons, the judgment below should be reversed and the
case remanded to the District Court with instructions to enter judgment in plaintiffs
favor on her termination claim and to reconsider, in light of a correct understanding
of the facts, plaintiffs’ claim of discriminatory treatment by defendant in not offering
her the opportunity to fill vacant positions when her job was eliminated.
CATHERINE POWELL
NAACP Legal Defense And
Educational Fund, Inc.
99 Hudson Street
Suite 1600
New York, New York 10013
(212) 219-1900
Respectfully submitted,
ELAINE R. JONES
Director-Counsel
LANIER E. WILLIAMS
CHRISTOPHER MORKIDES
CHARLES STEPHEN RALSTON
NORMAN J. CHACHKIN
P.O. Box 6584
Philadelphia, PA
(215) 848-7239
Attorneys for Plaintiff-Appellant
-41 -
Local Appellate Rule 28fd) Certification
I hereby certify, in accordance with 3d Cir. L.A.R. 28(d), that Norman J.
Chachkin is a member of the bar of this Court, and that I have filed an application
for admission in the instant case pursuant to 3d Cir. L.A.R. 46.1.
Catherine Powell
Certificate of Service
I hereby certify that I served two (2) copies of the foregoing Brief for
Plaintiff-Appellant upon counsel for defendant-appellee on this 23rd day of January,
1997, by first-class mail, postage prepaid, addressed as follows:
James E. Stahl, Esq.
Borrus, Goldin, Foley, Vignuolo, Hyman & Stahl
2875 U.S. Highway One
North Brunswick, New Jersey 08902
Catherine Powell
- 4 2 -
DISTRICT AND BANKRUPTCY COURT ORDERS
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
DEBORAH RHETT;
Appellant,
-v-
CARNEGIE CENTER ASSOCS.;
Appellee.
Civ. No. 96-0852 (GEB)
Bankr. No. 92-30385 (WHG)
ORDER
For the reasons set forth in the Memorandum Opinion issued on this same date;
‘ ' U * (7 . 1996,IT IS on this j -day of
ORDERED that the January o, 19% Order o f the Bankruptcy Court be and hereby is
AFFIRMED in all respects.
entered
TWlDpacr«DOUc. o/
WIU1AM f w M j J ’J L
By
CJerkJ
I ORIGINAL BLED
AUG S 1996
WILLIAM T.WAL8H, CLERK
on
- WJOCKET/O//
i9_Z£LWISH. CURK UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
filed
' ' r 2 0 19541
€ >
Cfart)
DEBORAH RHETT
v.
CARNEGIE CENTER ASSOCIATES
A T 8 :3 0 .___
WILLIAM T. WAlSh
CLERK
Civil No. 93-5251
cr -
o r d e r
5C1.'.
ZL.; o
T-r 1
I t appearing that proceedings under the Bankruptcy Act
having been filed by the above defendant(s) and that all further
proceedings having been atayed^pending a final disposition;
It is on this day of MAY, 1994,
ORDERED that the Clerk administratively terminate the action in
his records, without prejudice to the right of the parties to
reopen the proceedings for good cause shown for the entry of any
stipulation or order, or for any other purpose required to obtain
a final determination of the litigation.
Trenton, New Jersey
pflGE.ei
DISTRICT COURT MEMORANDUM OPINION
N O T FO R P U B L IC A T IO N
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
DEBORAH RHETT;
Appellant,
Civ. No. 96-0852 (GEB) —
Bankr. No. 92-30385 (WHG)
-v-
AUG 5 1996
CARNEGIE CENTER ASSOCS.;
Appeliee. MEMORANDUM OPINION vIluAM T. WALSH, Cu
BROWN, District Judge
This matter comes before the Court on the appeal of plaintiff Deborah Rhett from the January
9, 1996 OrJer of the United States Bankruptcy Court for the District of New Jersey in the above-
captioned matter.1 For the reasons set forth herein, the Court will aftlivn the Bankruptcy Court's
decision and January' 9, 1996 Order in all respects.
I. BACKGROUND
In this action, appellant Deborah Bl eu ("appellant" or "Rhett’1) claims that she was discharged
from employment by appellee lecauv. of her tuc-e and gen-L-r. Rhett is an African-American female who
v as employed by appellee Carnegie Center Ais*viatss ("appellee" or "CCA") from April, 1989 to March
26. 1991. 2 She is a gr\ Juste of Uuri'nptcn H.ch Crl.ool and b considerable see retar ia I and clerical
1 Die January 9, 1>,'6 Order uas based on findings of fact ui.J conclusions of law that the
Bankruptcy Com-' -cadeied in a decision, tiled .in or around December 21, 1995.
: Appellant challenges only tire Bankruptcy Court's ultimate factual conclusions, not the
Bankruptcy Court's findings as to the underlying facts, all of winch are set out in its written decision of
1
experience. Throughout her various employment experiences, she received training in computer
operations and in other areas.
CCA is owned and controlled by Alan Landis, and is operated from an office in Carnegie Center
in Princeton, New Jersey. There is no dispute that Landis has final authority over all significant
employment decisions. Thus, the parties agree that "(njeither Gary Tumdorf [n]or Keith Gormisky [was]
involved in the decision to terminate Rhett's employment; the decision was made solely by Alan Landis.”
See Appellant's Brief at 9 122; Appendix to Brief of Appellant Vol. II, at 329-10 to 329-329-12 (direct
testimony of Gary Tumdorf).
When Rhett commenced employment with CCA in April, 1989, she worked a full-time schedule
as a temporary secretary. On July 17, 1989, CCA hired Rhett as a permanent secretary in its
accounting/finance department. Her duties included, inter alia, word processing, filing, statistical typing
and answering the telephone. She worked for several CCA executives, including Geoff Hammond.
Rhett alleges that when she was promoted to a full time position, she was promised a performance review
in six months and an annual raise of $1500 if her performance was satisfactory.
In January, 1990, she received a favorable review and her salary was raised by $1500, to
$25,000 per year. She also received in 1990 an additional $5000 for overtime work. At no time did
CCA tell Rhett that her performance was deficient.
Rhett worked with several other employees, all of whom are white. Evelyn Angulites was a
secretary already employed by CCA when Rhett began work there. Barbara MacGregor was Landis's
personal secretary, and had longer tenure as such than Rhett had in her job. When MacGregor took
maternity leave, Rachel Drexinger replaced her from January, 1991 to June, 1991. MacGregor sought
to return to CCA as Drexinger was leasing the company, and MacGregor thus regained her position.
December 21, 1995. See Appendix to Brief of Appellant Deborah Rhett Vol. I, at 6-14.
2
Kathy Buchanan was also a secretary for CCA, and had been employed there longer than Rhett. Kristen
Wolf started with CCA when Rhett began to work full-time. In December, 1990, Wolf became a
secretary for several senior officers at CCA, and later an administrative assistant. Kathleen Cohen was
also Landis's personal secretary and administrative assistant. Cohen left CCA in April, 1991, and
Tammi Medoff, who was not previously employed by CCA, replaced her. Linda Kraus was an accounts
payable supervisor who, after maternity leave, returned as an accounts payable clerk.
In June, 1990, Rhett informed her supervisor and other management employees that she was
pregnant. Specifically, she informed Keith Gormisky, the Controller of CCA and an executive who
assigned her work. Rhett alleges that Gormisky responded by asking her whether she intended to get
married. She further alleges that when siie answered no, he said "[ijn society's eyes that's the right thing
to do. You should get married." Rhett also asserts that when she informed Gary Tumdorf, Chief
F-inancial Officer and General Counsel to CCA that she was pregnant, he also asked whether she would
get married. Tumdorf claims he only commented on the difficulty of being a single parent.
On or around December 18, 1990, Rhett sent a memorandum to her supervisors, including
Gormisky, Tumdorf, Landis, John Dempsy and Robert Mack, notifying them that she was about to take
maternity leave and that she intended to return on or Tocut April 15, 1991. Appendix to Brief of
Appellant Deborah Rhett ("Appellant's Appendix”) Vol. II, at 471. She took maternity leave on or
around December 18th or 20th.
CCA had no formal policy regarding maternity leave. Instead, the record indicates, and the
Bankruptcy Court correctly concluded, that CCA typically tiied to rehire or find a position for someone
seeking to return from maternity leave. That does not mean, however that someone taking maternity
leave was guaranteed a position when she was prepared to return to CCA. In appellant's case,
unrebutted testimony indicates that CCA sought to keep appellant's position open by placing a temporary
3
employee in Rhett's position until CCA abolished it in March, 1991. Testimony of Gary Tumdorf,
Appellant's Appendix Vol. II, at 75-23 to 76-76-1 ("I think that Ms. Rhett had expressed a desire after
she had her baby, and we tried to accommodate that desire by hiring temporaries to keep the position
open for her.").
At some point while Rhea was still employed by CCA, the company began to experience severe
financial difficulties. The trial testimony makes clear that by 1990, CCA was receiving many calls daily
from vendors seeking satisfaction of overdue payments. CCA asserts that in an effort to contract its
operations and reduce its operating expenses, it eliminated several positions, including Rhea's. On or
about March 26, 1991, Gormisky sent a lener to Rhett informing her as follows:
Before you left to have your baby, I am sure you were aware of the financial difficulties
which we were experiencing at Carnegie Center and elsewhere. We have been
struggling to meet our obligations, and have made a number of contractions in our staff.
Unfortunately, th's includes your position. I am writing to tell you this so that you can
male other plans.
If there is a change in our situation, I will contact you. In the meantime, if we can help
you in any way, we will try to do so.
March 26, 1991 I-etter from Keith Gormisky to Deborah Rhett, Appellant's Appendix Vol. II, at 472.
CCA also released several supervisory employees around 'his period. These included Hammond,
who was released in December, 1990, Eugene Gold in March, 1991, Dave O'Connor in April, 1991,
and Peter Clark in June, 1991. Additionally, CCA froze all salaries and deceased the remaining
executives' compensation.
Rhett sued CCA in this Court cn or about November 26, 1993, and the action was docketed as
Civ. No. 93-5251 (AET). Rhett alleges that CCA discriminated against her based on her race and
gender, in violation of Title VII of the Civil Rights Act of 1964, as amended 42 U.S.C. § 2000e et scq.
anJ the New Jersey Law Against Discrimination, N.J.S.A. 10:5-12(a) et seq., by terminating her
employment arid denying her other employment opportunities. She claims that she was terminated, and
4
not considered for other employment positions with CCA, because of her race and because she was on
maternity leave.3 Rhett asserted that CCA should have considered her for the following positions: (1)
property management administrative assistant; (2) secretary to Landis; and (3) receptionist.4 She seeks
reinstatement, back pay, front pay, compensatory damages, punitive damages, attorneys fees and costs.
CCA subsequently filed a petition pursuant to Chapter 11 of the Bankruptcy Code, and Rhett's
prepetition claim was automatically stayed pursuant to 11 U.S.C. § 362(a). Rhett filed her proof of
claim with the Bankruptcy Court on February 19, 1994. On May 19, 1994, the District Court entered
an Order administratively terminating Civ. No. 93-5251 without prejudice.
CCA moved to expunge Rhett's claim before the Bankruptcy Court, which conducted a-bench
trial on Rhett's claims on October 20, 1995, November 29, 1995 and November 30, 1995.5 In a written
decision filed on or around December 21, 1995, the Bankruptcy Court found that "[tjhere is not a
scintilla of evidence that any person at Camegie who had the power to hire or fire, discriminated against
Rhett on the basis of her race. The evidence is to the contrary." Memorandum Opinion of Hon. William
H. Gindin, Appellant's Appendix Vol. I, at 14. The Bankruptcy Court also found that "[tjhere is not
a scintilla of evidence that any person at Camegie who had the power to hire or fire discriminated against
3 The gist of Rhett's gender discrimination claim is that she was discharged, and not considered for
other positions with CCA, because she was out on maternity leave when CCA began to decrease its staff.
The Bankruptcy Coun stated that "the uncontradicted testimony of the debtor establishes that the debtor
had to let someone in the secretarial group go and the fact that Rhett was not working for the company at
the time made it logical that she be the one." Appellant's Appendix Vol. I, at 15. The Bankruptcy Court
did not find that termination under those circumstances presented any Tide Vll or NJLAD issue.
4 The Bankruptcy Court concluded that "die testimony of the debtor, through the statements of
Turr.dorf, make it clear that she was not qualified for any of those jobs. Each of the positions required
personal qu.il.ties that Khet; had not previously demonstrated." Appellant's Appendix Vul. I, at 13.
5 At an initial hearing on debtor's motion to expunge the claim, the Bankruptcy Court determined
tiut it was a contested matter as defined by Fed. R. Bankj*. P. 9014, and that it should proceed as an
adversary proceeding. The Bankruptcy Court had jurisdiction over the matter pursuant to 28 U.S.C. §
1334(h) and 28 U.S.C. § 157(b)(2)(B) & (0). Appellant's Appendix Vol. I, at 2.
5
Rhett on the grounds that she was a single and/or unwed mother. The evidence is to the contrary." Id.
The Bankruptcy Court entered an Order, dated January 9, 1996, expunging Rhett's discrimination claims.
Rhett filed a timely appeal from the Bankruptcy Court's January 9, 1996 Order. Rhett argues
that the Bankruptcy Court's decision must be reversed for several reasons. First, she contends that the
Bankruptcy Court applied incorrect legal principles to her claims by limiting its consideration to the
disparate treatment analysis set forth in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802 (1973),
instead of also considering the disparate impact analysis that she insists is the appropriate standard for
discharge claims. Second, Rhett maintains that the Bankruptcy Court committed factual and legal error
by failing to find that CCA violated Title VII and the New Jersey Law Against Discrimination
("NJLAD") under the direct and mixed-motive standards. Third, she contends that the Bankruptcy Court
erred as a matter of law and fact in finding that she had not established a prirna facie case of gender and
race discrimination. Fourth, Rhett argues that the Bankruptcy Court erred as a matter of law and fact
by finding that CCA had articulated a legitimate, non discriminatory reason to terminate Rhett. Finally,
Rhett argues that the Bankruptcy Court failed to consider whether Rhett had established that CCA's
proffered justification for her termination was pretcxtual.
II. DISCUSSION
A. Standard of Rrvilw
In an appeal from a bankruptcy court's decision, the district court applies two different standards
of review. The district court reviews factual f.rdir.js of the bankruptcy courts under a clearly erroneous
standard. Sec In re Sharon Steel Corp ,87» I .2d 1217. 1222 (3d Cir. 1989); Fed. R. Bankr. P. 8013.
A bankruptcy court's conclusions of law, however, are subject to de novo review. See In re Sharon Steel
Corp., 871 F.2d at 1222; Fld. R. Bankr. P. 8013.
6
The matter before the Court requires us to determine whether the Bankruptcy Court correctly
found no direct or circumstantial case of discrimination against appellant. This determination involves
reaching a conclusion as to an ultimate fact. See Memorandum Opinion of Hon. William H. Gindin,
Appellant's Appendix Vol. I, at 14. An ultimate fact "'is a legal concept with a factual component' .
. . and 'is usually expressed in the language of a standard enunciated by case-law rule or by statute, e .g .,
an actor's conduct was negligent; the injury occurred in the course of employment; the rate is reasonable
. . . . ' " In re Sharon Steel Corp., 871 F.2d 1217, 1223 (3d Cir. 1989) (quoting Universal Minerals, Inc.
v. C.A. Hughes & Co., 669 F.2d 98, 102 (3d Cir. 1981)).
When reviewing an ultimate finding, the Court "'must accept the trial court's findings of
historical or narrative facts [as to which there is no dispute here] unless they are clearly erroneous, but
[it] must exercise a plenary review of the trial court's choice and interpretation of legal precepts and its
application of those precepts to the historical facts.'" Id. (quoting Universal Minerals, Inc., 669 F.2d
at 103). See also United States v. McCombs, 30 F.3d 310, 317 (2d Cir. 1994) ("[W]hen the issue is the
trial court's application of a legal standard to facts undisputed or reasonably found out review is not
limited by the clearly erroneous standard and we will not shy away from plenary review . . . . " ) (quoting
In re Hygrade Envelope Corp., 366 F.2d 584, 588 (2d Cir. 1966)); De La Cruz v. Cohen, 191 B.R. 599,
6(M (D.N.J. 1996) (same).
B. Overview of Title VII and NJLAD
Title VII of the Civil Rights Act of 1964 reads in pertinent part as follows:
(a) It shall be an unlawful employment practice for an employer—
(1) to fail or refuse to hire or to discharge any individual, or otherwise to discriminate
against any individual with respect to his compensation, terms, conditions, or privileges
of employment, because of such individual's race, color, religion, sex, or national
origin; or
(2) to limit, segregate or classify [its] employees or applicants for employment in any
7
way which would deprive or tend to deprive any individual of employment opportunities
or otherwise adversely affect his status as an employee, because of such individual's
race, color, religion, sex or national origin.
42 U.S.C. § 2000e-2(a) (1982).
In 1978, Congress added the Pregnancy Discrimination Act ("PDA") to the definitional section
of Title VII. It provides in relevant part as follows:
The terms "because of sex" or "on the basis of sex" include, but are not limited to,
because of or on the basis of pregnancy, childbirth, or related medical conditions; and
women affected by pregnancy, childbirth, or related medical conditions shall be treated
the same for all employment-related purposes, including receipt of benefits under fringe
benefit programs, as other persons not so affected but similar in their ability or inability
to work. . . .
Id. § 2000e(k).
Congress enacted the PDA "'to prevent the differential treatment of women in all aspects of
employment based on the condition of pregnancy.'" EEOC v. Ackerman, Hood & McQueen, 956 F.2d
944 , 947 (10th Cir. 1992) (quoting Carney v. Manin Luther Home, Inc., 824 F.2d 643 , 646 (8th Cir.
1987)).6 See also California Fed. Sav. d Loan Ass'n v. Guerra, 479 U.S. 272, 285-86 (1987) ("The
Reports, debates, and hearings make abundantly clear that Congress intended the PDA to provide relief
for working women and to end discrimination against pregnant workers.").
The PDA therefore requires courts to determine whether the employer treats pregnancy or
pregnancy-related conditions differently than other conditions. Newport News Shipbuilding and Dry Dock
Co. v. EEOC, 462 U.S. 669 , 684 (1983) ("The 1978 Act makes clear that it is discriminatory to treat
pregnancy-related conditions less favorably than other medical conditions.").
The New Jersey Law Against Discrimination similarly prohibits discrimination based on gender,
6 Congress took this legislative action after the Supreme Court, in General Electric Co. v. Gilbert,
429 U.S. 125-145-46 (1976), held that Tide VII did not proscribe discrimination based on pregnancy.
Pregnancy Discrimination Act of 1978, Pub. L. 95-555, § 1, 92 Stat. 2076, 2076 (1978).
8
race, religion or national origin, and recognizes that individuals have a civil right in not being
discriminated against. N.J.S.A. 10:5-4. NJLAD provides as well that employers may not "because of
the race . . . marital status or sex . . . of any individual . . . refuse to hire or employ or to bar or to
discharge . . . from employment such individual. . . ." N.J.S.A. 10:5- 12(a). The analysis of a claim
under NJLAD is similar to that under Title VII. See, e.g., Erickson v. Marsh & McLennan Co., 117
N.J. 539 (1990); Shanerv. Horizon Bancorp., 116 N.J. 433 (1989); Peper v. Princeton Univ. Board of
Trustees, 77 N.J. 55 (1978). See also Abrams v. Lightolier Inc., 50 F.3d 1204, 1212 (3d Cir. 1995);
Khair v. Campbell Soup Co., 893 F. Supp. 316, 331 (D.N.J. 1995).
A Title VTI claimant can demonstrate an alleged violation in either of two ways. First, a plaintiff
can argue a disparate impact theory of discrimination. A disparate impact violation requires the claimant
to show that the employer utilized a specific employment practice that, while facially neutral, caused "a
substantial adverse impact on a protected group, and which cannot be justified as serving a legitimate
business goal of the employer." EEOC v. Metal Service Co., 892 F.2d 341, 346 (3d Cir. 1990). See
also Wards Cove Packing Co., Inc. v. Atonio, 490 U.S. 642, 6-44 (1989). The claimant need not prove
that the employer intended to discriminate. Wards Cove Packing, 490 U.S. at 644; Metal Service Co.,
892 F.2d at 346-47. Under the disparate impact theory, a statistical imbalance alone will not suffice;
plaintiff must point to a specific discriminatory hiring or employment practice. See Watson v. Fort Worth
Bank and Trust, 487 U.S. 977, 994 (1988) ("fW]e note that the plaintiffs burden in establishing a prima
facie case goes beyond the need to show that there are statistical disparities in the employer's work force.
The plaintiff must begin by identifying the specific employment practice that is challenged. . . .
Especially in cases where an employer combines subjective criteria with the use of more rigid
standardized rules or tests, the plaintiff is in our view responsible for isolating and identifying the specific
9
employment practices that are allegedly responsible for any statistical disparities.”).7
Alternatively, a plaintiff may establish that she suffered discrimination under the disparate
treatment analysis. To establish a disparate treatment violation, an individual of a protected group must
demonstrate that she was singled out and treated less favorably than similarly situated colleagues because
of an impermissible criterion under Title VII. Interna:'l Brotherhood o f Teamsters v. United States, 431
U.S. 324, 335-36 & n.15 (1977); Metal Service Co., 892 F.2d at 347. "Unlike the disparate impact
theory, proof of the employer's discriminatory motive is critical under this analysis." Id.
The means by which a plaintiff can establish disparate treatment will depend on the availability
of direct evidence. If she can not establish intentional discrimination by the evidentiary equivalent of a
"smoking gun," she may resort to the burden-shifting analysis set forth in McDonnell Douglas Corp. v.
Green, 411 U.S. 792 (1973) and Texas Dep't o f Community Affairs v. Burditic, 450 U.S. 248, 254-56
(1981), which allows the plaintiff to establish a Title VII violation through circumstantial evidence. See
Smith v. F. W. Morse & Co., I/ic., 76 F.3d 413, 420-21 (9th Cir. 19%); Carney v. Martin Luther Home,
Inc., 824 F.2d 643, 618 (8th Cir. 1987) (noting that the McDonnell Douglas test is inappropriate where
there is direct evidence of discrimination).
A plaintiff bringing a Title VII or NJLAD claim for disparate treatment via circumstantial
evidence must first set forth a priina facie case by showing that: (1) she is a member of a protected class;
(2) she was qualified for the position of employment from which she was terminated; (3) she suffered
some sort of adverse employment action; and (4) there was some causal nexus between the adverse
7 The bankruptcy Court did not consider plaintiffs' Title VII claims under a disparate impact
analysis. Appellant contends that the Bankruptcy Court committed error in not doing so, suiting that "[t]he
Court improperly limited its analysis of the evidence to the disparate treaunent method." Appellant's Brief
at 17. However, she does not allege a facially neutral employment practice adversely impacting a
protected group, net a siuiisiioul imbalance in the CCA workforce, nor does she make any further
argument regarding a dispatate impact theory. Therefore, the Court can not find that the Bankruptcy
Court committed error in finding no prime facie case under the disparate impact theory.
10
employment action and plaintiff s status as a member of the protected class. McDonnell Douglas Corp.,
411 U.S. at 802-05; Andersen v. Exxon Co., U.S.A., 89 N.J. 438, 492 (1982) (adopting the McDonnell
Douglas Corp. test). See also Gorham v. Amer. Tel. & Tel Co., 762 F. Supp. 1138, 1143 (D.N.J.
1991). In the context of the PDA,
a plaintiff can establish a prima facie case of pregnancy discrimination by showing that
(1) she is pregnant (or has indicated an intention to become pregnant), (2) her job
performance has been satisfactory, but (3) the employer nonetheless dismissed her from
her position (or took some other adverse employment action against her) while (4)
continuing to have her duties performed by a comparably qualified person.
Smith, 76 F.3d at 421 (citations omitted).
In a pretext case, after plaintiff has established her prima facie case, the burden shifts to
defendant to advance a legitimate, nondiscriminatory justification for its actions. St. Mary's Honor
Center v. Hicks, 509 U.S. 502, 515-16 (1993); Rurdine, 450 U.S. at 252-54. See also McKenna v.
Pacific Rail Service, 32 F.3d 820 (3d Cir. 1994) (predicting that the New Jersey Supreme Court would
adopt the United States Supreme Court's decision in St. Mary's Honor Center v. Hicks). If defendant
carries its burden, any presumption of discrimination drops from the case, and plaintiff must prove that
the justifications proffered by defendant were merely a pretext for discrimination. Burdine, 450 U.S.
at 256 (holding that plaintiff must then satisfy ultimate burden of proving discrimination "by showing that
the employer's proffered explanation is unworthy of credence"); Griffiths, 988 F.2d at 469; Lockhart v.
Westinghouse Credit Corp., 879 F.2d 43, 49 (3d Cir. 1989). In this sense, it should be noted that "the
defendant, rather than attempting to prove an affirmative defense, supplies an explanation." Griffiths,
988 F.2d at 469. It is not enough for plaintiff to shed doubt on the proffered nondiscriminatory
justification advanced by the employer; rather, the plaintiff must establish her theory of intentional
discrimination. Mardell v. Harleysville Life Insur. Co., 31 F.3d 1221, 1225 (3d Cir. 1994); Sorba v.
Pennsylvania Drilling Co.. 821 F.2d 200, 202 (3d Cir. 1987), cert, denied, 484 U.S. 1019 (1988). That
11
the factfinder might reject the proffered nondiscriminatory reason does not compel a verdict for the
plaintiff, who still must prove that the illegitimate factor was a determinative reason for the adverse
employment action. Mardell, 31 F.3d at 1225 (citing Hicks. 113 S. Ct. at 2749).
In a mixed-motive case, plaintiff seeks to prove that the adverse employment decision was a
consequence of both legitimate reasons and discriminatory motives. Griffiths v. CIGNA Corp., 988 F.2d
457, 469 (3d Cir.), cert, denied, 114 S. Ct. 186 (1993). The plaintiff asserts not that legitimate reasons
proffered by the employer were untrue or not a factor in the employer's action, but that other,
discriminatory motives were also factored into the decision. Price Waterhouse v. Hopkins, 490 U.S.
228, 241-45 (1989). A plaintiff in a mixed-motives case relying on circumstantial evidence, to shift the
burden to the employer, must tie the evidence directly to the alleged discriminatory animus. See
Ostrowski v. Atlantic Mutual Insur. Co., 968 F 2d 171, 182 (2d Cir. 1992) ("[PJurely statistical evidence
would not warrant [shifting the burden]; nor would evidence merely of the plaintiffs qualification for
and the availability of a given position; nor would 'stray' remarks in the workingplace by persons who
are not involved in the pertinent decisionmaking."). See also Hook v. Ernst A Young, 28 F.3d 366, 373-
74 (3d Cir. 1994) ("Absent evidence that could 'fairly he said to "directly reflect'" the alleged unlawful
basis, the case should be treated as a pretext case.") (quoting Griffiths, 988 F.2d at 470; Ostrowski, 968
F.2d at 181-82).
If the mixed-motives plaintiff bears her initial burden of establishing a prima facie case of
employment discrimination, defendant may avoid liability by showing that it would have reached the
same decision even had the forbidden consideration not been a factor in the employment action. Price
Waterhouse. 490 U.S. at 243-44; Ezold v. Wolf. Block, Schorr A Solis-Cohen, 983 F.2d 509, 521-22
(3d Cir. 1992).
12
C. Rhett's Appeal
1. Direct Evidence
Rhett first contends that the Bankruptcy Court should have measured her claims against the direct
evidence standard. She posits that with respect to her claims of discharge due to race and gender
discrimination, the Bankruptcy Court should have applied the standards for either a direct evidence or
a mixed-motives situation. Rhett makes a similar argument with respect to whether CCA's failure to
consider her for other positions violated Title VII and NJLAD.
Rhett argues that several factors established direct evidence of discrimination of gender
discrimination in violation of the PDA.8 First, she points to the Bankruptcy Court's finding that "the
uncontradicted testimony of die debtor establishes that the debtor had to let someone in the secretarial
group go and the fact that Rhett was not working for the company at the time made it logical that she be
the one." Appellant's Brief at 28 (quoting Memorandum Opinion of William H. Gindin, C.J.,
U .S.B.C., Appellant's Appendix Vol. I, at 15). Appellant also insists that direct evidence of
discrimination lies in CCA's "selection of Rhett for termination for the sole reason that she was the one
on pregnancy leave is evidence of direct discrimination against her." Id. at 29. Finally, appellant asserts
that CCA's failure to consider her for other employment positions, "in contradiction of its policy,"
evidences direct discrimination.
As noted supra, the Bankruptcy Court determined that plaintiff had introduced no evidence to
establish that CCA discriminated against Riiett based on her pregnancy or her race. See supra pages 5-6
(quoting Memorandum Opinion of William H Gindin, C.J., U.S.B.C., Appellant's Appendix Vol. I,
1 Rhett has evidently disregarded her direct evidence theory of racial discrimination in this appeal.
She fails to reference an) direct evidence that the Bankruptcy Court might have overlooked in determining
there was no racial discrimination; nor does she point to any other instance of error by the Bankruptcy
Court in this regard. See In re Abijoc Realty Corp. , 943 F.2d 121, 123 n. 1 (1st Cir. 1991).
13
at 14). Thus, while it may be that the Bankruptcy Court did not specifically assess Rhett’s claims against
the direct evidence standard, it is clear that had the Court done so, it would have reached the same
conclusion. The issue is thus whether the Bankruptcy Court erred as a matter of law in concluding that
the foregoing factors did not directly evidence discrimination.
If Rhett established a prima facie case of direct discrimination, a second issue would arise as to
whether the Bankruptcy Court erred by failing to shift the burden of persuasion to defendant and
requiring CCA to establish, through the production of credible evidence, that it would have made the
same decision even if it had not taken the protected characteristic into account. Smith, 76 F.3d at 421;
Robinson v. Southeastern Pennsylvania Transportation Authority, 982 F.2d 892, 899 (3d Cir. 1993). The
defendant would nonetheless remain liable for declaratory relief, injunctive relief, attorneys' fees and
costs; of suit. See infra note 9. The burden would shift to CCA only if Rhett established a prima facie
case of direct discrimination.
This Court agrees with the Bankruptcy Court that Rhett did not establish a prima facie case of
direct discrimination on the basis of cither race or her gender. While she refers repeatedly to an
established policy of rehiring employees on leave, it is clear the policy, if any, was merely an informal
one by which CCA would rehire individuals if the circumstances at the time of the employee's return
warranted doing so. Appellant has produced no written employment handbook or other policy declaration
in which CCA guarantees that an employee returning from leave, pregnancy or otherwise, will be
rehired. Moreover, the testimony adduced at trial from appellant's former colleagues reinforces the
Bankruptcy Court's conclusion that no such formal policy existed. See, e.g., Testimony of Brenda
Sirkis, Appellant's Appendix Vol. I, at 38-15 to 38-18 ("Q: V/hen you left to have your baby, do you
know whether or not the position was available to you two years later when you went back? A: No. It
wasn't discussed."); Testimony of Gary Tumdorf, Appellant's Appendix Vol. II, at 93-2 to 93-9
14
( ”[A]part from pregnancy, I can't think of a case where people left for any prolonged interval, apart
from just leaving. And so in the case of pregnancy, if an employee indicated a desire to come back, we
would try and hold it open for them if we could, and hold it open. When they wanted to come back, if
they contacted us and there was something open that was suitable, we would offer it to them."). Thus,
the crux of appellant's direct discrimination case—that CCA breached a formal policy of rehiring
employees ready to return from maternity leave because appellant was unmarried and on pregnancy
leave—is entirely unsubstantiated. CCA had no formal leave policy and it sought to hold her position
open for several months after she left in December, 1990. Additionally, it abolished the position only
after she had already given birth and was ready to return, not while she was still pregnant.
The only other evidence to which appellant points in support of her direct discrimination theory
are comments allegedly made by Tumdorf and Gormisky when she told them of her pregnancy. These
are insufficient to support a direct discrimination claim. It is well settled that stray remarks in the
workplace, particularly by those who do not have authority to make personnel decisions such as
Gormisky and Tumdorf, scc supra page 2, do not establish a prima facie case of direct discrimination.
Hook, 28 F.3d at 373; Ostrowski, 968 F.2d at 182. Thus, with respect to Rhett's direct discrimination
case, we agree with the bankruptcy Court that there was no evidence that anyone with authority to hire
or fire CCA personnel discriminated against her. It follows that the Bankruptcy Court did not err in not
requiring defendant to establish that it would have made the same employment decision had it not taken
the impermissible criterion into account.
The remaining facts to which appellant points in support of her direct discrimination case,
including the abolition of her position while she was still on leave and CCA's failure to cuusider her for
other positions, are by no means directly discriminatory and will be considered infra.
15
2. Application o/McDonnell Douglas Factors
Appellant also challenges the Bankruptcy Court’s conclusion that plaintiff failed to establish a
prima facie case of discrimination, based on either race or the PDA, under McDonnell Douglas.
Plaintiffs first argument in this regard is that the Bankruptcy Court erred as a matter of law in applying
the McDonnell Douglas standard here because that test applies only to failure-to-hire, not discharge,
claims. Although Rhett contends that the Bankruptcy Court should have applied a modified standard,
Appellant's Brief at 18, she fails to identify those standards. In any event, this argument is meritless,
as the Supreme Court injected no such limitation in McDonnell Douglas, and numerous subsequent
decisions have utilized that test in discharge cases. See, e.g., Smith, 76 F.3d at 420-21 (applying
McDonnell Douglas test to claims of wrongful discharge and failure to rehire under PDA); Griffiths v.
CIGNA Corp., 988 F.2d 457, 468-69 (3d Cir.) (applying McDonnell Douglas test to pretext claim for
discharge), cert, denied, 114 S. Ct. 186 (1993); Jackson v. Univ. o f Pittsburgh, 826 F.2d 230, 233-34
(3d Cir. 1987) (same), cert, denied, 484 U.S. 1020 (1988). Additionally, her claims appear to present
a failure to rehire case as much as they do one for discharge, particularly since there was unrebutted
testimony at trial that CCA did not consider her to be an employee there on March 26, 1991 when
Gormisky notified her that CCA abolished her position. Testimony of Gary Tumdorf, Appellant's
Appendix Vol. II, at 70-1 to 70-4 (“Well, let go is a funny way to put it in the case of Ms. Rhett,
because we considered that she was not an employee at the time that we terminated that position or
contracted that part of the company.").
The next issue Ls whether the Bankruptcy Court correctly held that CCA's decision to abolish the
secretarial position that appellant had held, because she was out on maternity leave when CCA decided
to contract the support staff, did not establish a case of pretextual discrimination. The Ninth Circuit had
occasion to consider a similar issue in Smith v. F. W. Morse Co., Inc., 76 F.3d 413, 424-425 (9th Cir.
16
19%). In that case, plaintiff Kathy Smith was employed as a manager with defendant F. W. Morse &
Co., a manufacturer of custom components for high technology. Id. at 418. In December, 1988, she
told defendant that she intended to take maternity leave in or around April, 1989. Id. Between
December, 1988 and April, 1989, F.W. Morse & Co. underwent a management reorganization that
reduced the number of second-level managers from seven to five. Id. As Smith was about to begin
maternity leave, the owner of F.W. Morse, which had no formal maternity policy, assured her that her
position was secure. Id.
On May 1, 1989, Smith visited the plant and told the general manager that she would like to
return to work earlier than expected. Id. at 419. The general manager asked Smith whether she wished
to have more children, to which Smith responded affirmatively. Id. The following day, the general
manager asked Smith's sister, also a plant employee, about Smith’s plans to have a larger family. Id.
When Smith learned of this conversation and confronted the general manager about it, the general
manager assured Smith her position was secure. Id. However, on May 11, 1989, the general manager
informed Smith that her position was superfluous and had been eliminated. Id.
The district court entered judgment for defendant, and Smith appealed arguing, inter alia, that
her absence on maternity leave was the primary motivating factor in her discharge and that F.W. Morse
&. Co. consequently discriminated against her in violation of Title VII and the PDA. Id. at 424. The
Ninth Circuit disagreed, noting that while Title VII prohibits an employer from discharging an employee
in retaliation for taking maternity leave, see 42 U.S.C. § 2000e(k), "an employer may discharge an
employee while she is on a pregnancy-induced leave so long as it does so for legitimate reasons unrelated
to her gravidity. * Id. The Ninth Circuit stated as follows:
Title VII mandates that an employer must put an employee's pregnancy (including her
departure on maternity leave) to one side in making its employment decisions—but the
statute does not command that an employer bury its head in the sand and stmthiously
refrain from implementing business judgments simply because they affect a parturient
17
employee. . . . At bottom, Title Vll requires a causal nexus between the employer's state
of mind and the protected trait (here, pregnancy). The mere coincidence between the
trait and the employment decision may give rise to an inference of discriminatory animus
. . . but it is not enough to establish a per se violation of the statute . . . . [The]
employee (pregnant or not) runs a risk of suffering the ordinary slings and arrows that
suffuse the workplace every day she goes to work and every day she stays away. Title
VII is neither a shield against this broad spectrum of employer actions nor a statutory
guaranty of full employment, come what may.
Smith, 76 F.3d at 424-25. See also Troupe v. May Dep't Stores Co., 20 F.3d 734, 738 (7th Cir. 1994)
(holding that the PDA "requires the employer to ignore an employee's pregnancy, but . . . not her
absence from work"); Cmokrak v. Evangelical Health Systems Corp., 819 F. Supp. 737, 743 (N.D. 111.
1993) (noting that "the PDA does not force employers to pretend that absent employees are present
whenever their absences are caused by pregnancy").
Similarly, in this case, the Bankruptcy Court reached several factual findings, which are reviewed
only for clear error, that compelled the conclusion that the secretarial position held by appellant was
abolished for legitimate, non-discriminatory reasons. That CCA was experiencing severe financial
difficulties by PAX) and through 1991 is manifest from the record and further reflected by CCA's current
Chapter 11 status. As a result, CCA contracted its staff on both management and support staff levels,
and decreased or froze the remaining executives' salaries. Based on these factual findings, which are
not clearly erroneous, the Court agrees that appellant's "discharge" claim under Title VII is meritless.
The Bankruptcy Court also found as a matter of fact that appellant was not qualified for the
administrative assistant, accounts payable supervisor or property manager positions. The Bankruptcy
Court stated as follows:
[T]he testimony of the debtor, through the statements of Tumdorf, make it clear that she
was not qualified for any of those jobs. Each of the positions required personal qualities
that Rhett had not previously demonstrated. In the case of the administrative assistant,
the basic requirement of the job was to act as an assistant to Landis. He required
someone who worked with him and anticipated his requirements. Appointment to this
position was his choice and it cannot be said that Rhett showed any of those qualities
which he required. With respect to the job of accounts payable supervisor, it was clear
18
from the cross examination of Rhett that she did not understand the nature of the
position. As indicated in the findings of fact, she claimed not to know that the company
was in trouble. As in many situations where a company is on the brink of financial
collapse, the accounts payable supervisor clearly requires juggling skills in the handling
of trade creditors. One who could not consider the grave financial problems of the
debtor certainly could not make the decisions with respect to the priorities of payment.
There was also some suggestion that Rhett might be able to function as property
manager. There was no evidence that she was even remotely qualified for that position.
Memorandum Opinion of William H. Gindin, C.J., U.S.B.C., Appellant's Appendix Vol. I, at 13-14.
The record and testimony adduced at trial before the Bankruptcy Court support these conclusions.
The foregoing review of the Bankruptcy Court's decision therefore compels the Court to reject
appellant's contention that the Bankruptcy Court failed to consider whether she established a pretextual
discharge case. The bulk of the Bankruptcy Court's analysis clearly involved an application of the
McDonnell Douglas standard and culminated in the Bankruptcy Court's conclusion that she had not
satisfied those factors and thus not succeeded in demonstrating pretextual discrimination. See
Memorandum Opinion of William H. Gindin, C.J., U.S.B.C., Appellant's Appendix Vol. I, at 12-14.
The Court is similarly constrained to reject Rhett's argument that the Bankruptcy Court failed
to consider her circumstantial case of racial discrimination under the McDonnell Douglas standards.
Appellant has referenced no factual or legal error by the Bankrutpcy Court in this regard, beyond an
amorphous assertion that three of the other secretaries were white and other individuals who remained
at CCA after the staff reductions were white. Even if this allegation were sufficient to constitute a
statistical imbalance, which it is not, it is well settled that a statistical imbalance alone will not suffice
to establish a pnma fade disparate impact or circumstantial case of discrimination. See supra pages 9-10
(quoting Watson. 487 U.S. at 994). See also Griffiths. 988 F.2d at 470; Ostrowski, 968 F.2d at 182.
19
3 . M ixed-M otives S tandard
• Finally, appellant argues that the Bankruptcy Court did not properly apply the standard for a
mixed-motives claim of discrimination. While appellant argues that the Bankruptcy Court misstated the
standard,9 we can find no reversible error here. Having concluded that CCA did not discriminate against
plaintiff under the PDA in abolishing her position while she was on leave or in not hiring her for another
position, the Bankruptcy Court found no discriminatory animus that tainted an otherwise legitimate
business decision. For the reasons set forth above, supra pages 16-19, this Court agrees.
III. CONCLUSION
For the reasons set forth above, the Court will affirm the January 9, 1996 Order of the
Bankruptcy Court in all respects. An appropriate form of Order is filed herewith.
9 Relying on Price Waterhouse, the Bankruptcy Court stated that even if the employer took the
protected characteristic into account in rendering the adverse employment decision, it could escape liability
upon a showing that had the employer not, the result would have been the same. Memorandum Opinion of
William H. Gindin, C.J., U.S.B.C., Appellant's Appendix Vol. I, at 15 (citing Price Waterhouse, 490
U.S. at 242). The Civil Rights Act of 1991, however, partially overruled Price Waterhouse by providing
that even if the employer demonstrates that it would have reached the same decision absent discriminatory
motive, the aggrieved party might still recover declaratory and injunctive relief, attorneys' fees and costs.
42 U.S.C. § 2000e-5(g)(2)(B), as amended by the Civil Rights Act of 1991, section 107(b). See also
Robinson v. Southeastern Pennsylvania Transportation Authority. 982 F.2d 892, 899 (3d Cir. 1993).
20
BANKRUPTCY COURT OPINION
N O T FO R PU BLIC A TIO N
U N ITED ST A T E S BANK RUPTCY CO UR T
D IST R IC T OF NEW JERSEY
In Re:
Carnegie Center Associates,
A General Partnership,
Case # 92-30385
Chapter 11 jMAntb J WALOhON, ClcRK
DFC ? 1 1995
Debtor.
OPINION
A P PE A R A N C E S:
BORRIS, GOLDIN, FOLEY, VIGNUOLO, HYMAN & STAHL
James E. Stahl, Esq.
For the Debtor, Carnegie Center Associates, a General Partnership
LANIER WILLIAMS, ESQ.
For the Creditor, Deborah Rhett
HONORABLE W ILLIAM H, GINDIN. CHIEF JUDGE
I
PR O C E D U R A L H IST O R Y
This matter comes before the court on a motion by the debtor (Carnegie or debtor) to
expunge the claim of Deborah Rhett (Rhett or creditor) in the amount of $150,000.00 based upon
a claim o f discrimination on the part of the debtor. The creditor claims that the debtor failed to
permit her to return to work after she gave birth to her child because she was (1) black, (2)
unmarried, and (3) away from work for more than three months as a result of her pregnancy and
delivery. After the hearing, the court determined that the matter was a “contested matter” as
defined by Fed. R. Bankr. P. 9014, that it should proceed in the same manner as an adversary
proceeding, and that Part VII of the said rules should apply. This court has jurisdiction pursuant
to the provisions of 28 U.S.C §J334(b) and 28 U.S.C. §157(b)(2)(B) & (O).
FACTS
The matter was heard by the court on October 20, November 29 and November 30, 1995.
The creditor offered one witness, Brenda Sirkus (Sirkus), in addition to herself (RLiett), as well
as portions of a deposition taken of the debtor’s witnesses. The debtor relied upon the testimony
of Gary Turndorf (Turndorf), Chief Financial Officer and Counsel to the debtor, as well as Keith
Gormisky (Gormisky), Controller of the debtor partnership.
As a result of the aforesaid testimony, the court makes the following findings of fact:
1 Carnegie is one of a number of entiues owned or controlled by one Alan Landis
(Landis) and operated from one office located in Camegie Center, Princeton (West Windsor),
2
New Jersey. Some of the entities are debtors before this court while others are not.
2. Landis controls all of the entities and makes all of the significant decisions concerning
hiring, firing, and compensation. Neither Tumdorf or Gormisky had any hiring or firing authority.
3. Rhett is a black woman, now approximately thirty-five years old and in apparent good
health.
4. Rhett was employed by Carnegie as a temporary employee beginning in March or
April of 1989.
5. RJiett is a graduate of Burlington High School and has extensive employment
experience as an accounting clerk, billing clerk, payable clerk, and secretary. She has experience
in dealing with clients over the telephone and working on continuity for a radio station. She also
has brief experience in retail, including the supervision of some part-time employees.
6. On July 17, 1989, she became a permanent secretary with the debtor. As a secretary,
her duties included typing of correspondence, statisucal typing, answering the telephone, filing,
and other secretarial duties. On occasion, she did some ordering of supplies and directed
messages of tenant complaints to the appropriate executive. She specifically worked for several
executives, including Geoff Hammond (Hammond)
3
7. The operation o f Carnegie was very loose. There were a limited number of employees
and all secretaries and office personnel covered for one another to the extent that they were able.
8. In January of 1990, Rhett received an increase of $1,500.00 in her salary, bringing her
to $25,000.00. During 1990, she also received an additional $5,000.00 in overtime. Benefits were
minimal, but they included a health plan and a small pension plan to which she was required to
contribute if she wished to participate. She received two weeks of vacation which she took in
daily increments and some sick time which she rarely used. She was allowed no personal days.
On occasion, she did extra typing for others and was given her lunch in lieu of payment. .
9. Rhett’s job performance was adequate, and she was never told that it was deficient in
any way. She apparently never received a performance review.
10 The procedure was that staff employees were given annual raises of 3 to 4%. If their
performance was exceptional, more could be given.
11 In the summer of 1990, Rhett felt that she was doing more work than she had done
when she started and requested a salary increase She was assured that her request would be
given consideration, but she never heard and did not receive a raise.
12 Kristen Wolf (Wolf) was given a retroactive increase of $ 2,000.00 on April 18,
1990, (Exhibits J-l and J-2 in evidence) and a further increase of 4% on March 29, 1991 (Exhibit
4
P - 1 2 in e v id e n c e ) . B o t h o f th e se in c r e a s e s w e re a p p ro v e d b y L a n d is .
13. Evelyn Angulites (Angulites) was a secretary employed at the time Rhett started
working at Carnegie. While she held herself out as the one in charge o f the office, she had in
fact, no more authority than any other secretary. She did some additional ordering of supplies,
but only because she was more familiar with the routine. When she left in the summer of 1990,
Rhett took on some of her tasks.
14. Wolf started as a receptionist at the same time Rhett started on a full time basis. In
December 1990, Wolf was designated as a secretary and worked for several senior people. She
later became an administrative assistant.
15. Barbara MacGregor (MacGregor) served as personal secretary to Landis and, as such,
worked for him in many different ways. She had a longer tenure in the job than Rhett had in
her job When she left, she was replaced by Rachel Drexinger (Drexinger). When she sought
to return, it coincidentally came at the time Drexinger was about to leave voluntarily and she was
given her job back.
16 Kathy Buchanan, was also a secretary and had been employed longer than Rhett.
17. Sirkus left in order to have a baby and returned as a temporary employee.
5
18. Kathleen Cohen (Cohen) was also a personal secretary and administrative assistant
to Landis. She exhibited special skills in handling that job. She was replaced by Tammi Medoff
when she left in April, 1991.
19. Linda Kraus (Kraus) was an accounts payable supervisor when she left to have a
baby. When she returned, she was employed as an accounts payable clerk.
20. There were two other black employees in the Landis groups; one was a supervisor.
There were approximately 25 employees in the entire group.
21. Rhett was not qualified to be an accounts payable supervisor, an administrative
assistant as described in C-6, or a private secretary to Landis.
22. In June of 1990, Rhett informed her co-workers and supervisors that she was
pregnant, and that she would be looking to take maternity “leave”.
23 Carnegie has no regular maternity “leave” policy. As a rule, the debtor tries to rehire
or find a spot for any employee to the best o f its ability when the person returns.
24 When Rhett told Gormisky that she was going to have a baby, he asked her if she
was going to get married. When she told him that she was not, he remarked that she would be
6
25. Turndorf did not think that Rhett was a good employee and in December 1990, he
told her that she was on “thin ice”. Rhett stated that she thought that this had to do with her
return to work, but it appears from the feelings that Turndorf had about her work, that he was
telling her that her work was not as good as it should be.
26. On December 18, 1990, Rhett advised the people for whom she worked that she was
leaving on “maternity leave” on December 21, 1990, and that she planned to return on April 15,
/
1991. Copies of her memorandum were sent to several executives including Turndorf and Landis.
She made it clear that she wanted to return. Rhett received no response to her memorandum. It
is also clear that Rhett was happy in her job and felt that she was a good employee who had no
reason to believe that she could not come back.
27. Rhett left on December 21, 1990. Before she left, she trained a temporary employee
to take her place. The temporary employee remained until March, 1991.
28 Carnegie was one o f several Landis companies which was formed for the financing
and administration of single asset real estate holdings. Beginning with the downturn in real estate
in New Jersey in 1987, the companies began to experience severe financial difficulties. The
existence of such difficulties was known to all employees. Sirkus knew and, in spite of a specific
claim to the contrary, this court finds that Rhett knew of the trouble.
better o f f m arried. G orm isky kn ew that she had a boyfrien d w ho w as already married.
7
29. In December, 1990, several supervisory employees, including Hammond, were let go.
Eugene Gold was let go in March of 1981, Dave O ’Conner in April, 1991, and Peter Clark in
June o f 1991. All salaries were frozen and executives took a substantial decrease in salaries.
30. During the time before Rhett left, there had been many calls from vendors to whom
money was owed seeking payment o f outstanding bills.
31. While Rhett was out, Carnegie tned to keep Rhett’s position open for as long, as it
could with temporary employees.
32. In early March, Rhett visited the premises of Carnegie to show her baby to her co
workers. Nothing was said to her at that time about termination.
33 On March 26, 1991, Gormisky wrote to Rhett telling her that her position had been
eliminated (Exhibit C-5 in evidence). This was the first time that Rhett had knowledge that she
would not have a job.
34 Immediately upon receipt o f the letter from Gormisky, Rhett called him. Gormisky
just reiterated the contents of the letter Rhett also asked about the accounts payable position,
but she was told that it was not available to her She asserts that she asked about the
administrative assistant position and the court finds that she was told that it was not available to
8
her. The court also finds that Rhett did not indicate that she would take a lower paying or
temporary job, and she was not asked.
35. After the letter of March 26, Carnegie sent the necessary information concerning the
continuing benefits (COBRA) to Rhett.
36. Rhett suffered from some form of post-partum depression and was under medical care
until June 1991. No evidence was adduced indicating a relationship between the medical care
and her termination other than the testimony from Rhett that she was hurt and embarrassed and
has yet to tell her family that she was terminated.
37. For the year of 1991, Rhett earned $11,873.00 o f which $8,740.00 was in
unemployment benefits. (Stipulated).
38. On January 29, 1992, Rhett commenced work for the Robert Wood Johnson
Foundation. She earned $22,500 00 in 1992, $23,000.00 in 1993; $24,000.00 in 1994, and
$25,500.00 in 1995. In addition, she has had more vacation time, more sick time and the right
to take personal days She has a significantly better health plan than she had at Carnegie and a
drug plan where previously she had none She gets life insurance and a noncontributing 401k
plan which has a present value in excess of $9,100 00 Most valuable of all is that her
compensation package includes a free lunch Rhett loves her job and considers it better than the
one she left.
9
39. There is not a scintilla of evidence that any person at Carnegie who had the power
to hire or fire, discriminated against Rhett on the basis of her race. The evidence is to the
contrary.
40. There is not a scintilla of evidence that any person at Carnegie who had the power
to hire or fire discriminated against Rhett on the grounds that she was a single and/or unwed
mother. The evidence is to the contrary.
41. A timely complaint was brought by Rhett before the Equal Employment Opportunity
Commission which declined to take action.
D ISC U SSIO N
N.J.S A. 10:5-4 prohibits discrimination on the basis of race. It further provides that the
right not to be discriminated against “is recognized as and declared to be a civil right.” Id.
Furthermore, N.J.S.A. 10:5-12(a) prohibits “an employer, because of the race ... marital status or
sex ... of any individual ... to refuse to hire or employ or to bar or to discharge ... from
employment such individual ...” The law of New Jersey is clear. 42 U.S.C § 2000e-2(a) defines
the same conduct as an “unlawful employment practice." Additionally, 42 U.S.C. 2000e(k) defines
sex to include “pregnancy, childbirth or related medical conditions.” The federal law is likewise
clear The question before this court is whether or not Deborah Rhett found herself without a
job because of her race or her position as an unwed pregnant woman who left her job to have
her child
10
To the extent that the statutes require some act or statement to establish such
discrimination, none has been shown in this case. The issues are, however, far more complex.
Initially, it must be noted that an action before the Equal Employment Opportunity Commission
is a jurisdictional prerequisite to the filing of the claim in this action. An adverse decision or a
failure to act by the Commission, however, does not preclude the assertion of a claim in this
court. McDonnell Douglas Corporation v. Green, 411 U.S. 792, 798, 93 S.Ct 1817, 1822
(1973); Fekete v. United States Steel Corp., 424 F.2d 331, 1336 (3d Cir., 1970).
There are two basic approaches to the determination of discrimination which must be
analyzed. The first of these is known as the disparate impact theory of racial discrimination. A
violation of the statute based upon this theory is shown when an employer uses a specific
employment practice which, although it appears to be neutral on its face, actually causes a
“substantial adverse impact upon a protected group." Equal Opportunity Employment
Commission v. Metal. Service Company, 892 F 2d 341, 346 (3rd Cir., 1990). It must appear that
the practice does not serve a legitimate goal of the employer. Wards Cove Packing Co., Inc. v.
Atonio, 490 U.S. 642, 659, 109 S.Ct 2115, 2126 (1989). The burden of proof of such disparate
impact must be shown by the complainant, and the employer need only produce a legitimate
business justification Id Under this theory, there is no need for proof of intentional
discrimination. Watson v. Fort Worth Bank and Trust, 487 U.S. 977, 985, 108 S.Ct. 2777, 2784
(1988); Wards Cove, Supra at 645
II
The disparate treatment theory takes a different approach. Under this alternative claim,
the employee must show that he or she is a member of a protected group, and that the particular
employee has been “singled out and treated less favorably than others similarly situated on the
basis of an impermissible criterion." Metal Service Company, Supra at 347. In this type of case,
the employee must make a prima facie case showing that the employer’s motive was
discriminatory. Id. No such proof was forthcoming in the trial of the case at bar. In fact,
Rhett's testimony is to the contrary. She felt that there was no discrimination against blacks, and
while there were few blacks in the firm, they were well treated. In fact, a black was promoted
to a supervisory role in a related Landis company. As to the issue of whether Rliett was treated
differently as a single pregnant woman, the only evidence adduced at trial clearly showed that
an individual who left to have a baby had no absolute right to keep her job. In fact, the debtor
here tried to keep the position for her, but was unable to do so.
The. McDonnell Douglas case also establishes the necessary burden of proof and elements
of the cause o f action. The complainant must show:
(i) that he belongs to a racial m inority, (li) 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 complainant's quali
fications.
McDonnell Douglas, Supra at 802 Each of these elements must be examined in the light of the
testimony adduced at the tnal. The first prong of the test is easy. Rhett is black and is clearly
a member of a racial minority. As an unwed pregnant woman leaving work to have her baby,
she likewise fits into a group against which discrimination might take place The second prong
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is less clear. There was no evidence adduced at trial that the employer was actually seeking
applicants. While the position was apparently kept open until the time that the debtor sent the
letter indicating that her job had been eliminated, it is clear that after March 26, 1991, there were
only four secretaries where there had previously been five. The debtor filled other positions such
as the administrative assistant and accounts payable supervisor slots, but no one was hired as a
secretary.
Rhett argues that she was qualified for the positions of administrative assistant, accounts
payable supervisor, or property manager. However, the testimony of the debtor, through the
statements o f Turndorf, make it clear that she was not qualified for any o f those jobs. Each of
the positions required personal qualities that Rhett had not previously demonstrated. In the case
of the administrative assistant, the basic requirement of the job was to act as an assistant to
Landis. He required someone who worked with him and anticipated his requirements.
Appointment to this position was his choice and it cannot be said that Rhett showed any of those
qualities which he required With respect to the job of accounts payable supervisor, it was clear
from the cross examination of Rhett that she did not understand the nature of the position. As
indicated in the findings of fact, she claimed not to know that the company was in trouble. As
in many situations where a company is on the brink of financial collapse, the accounts payable
supervisor clearly requires juggling skills in the handling of trade creditors. One who could not
consider the grave financial problems of the debtor certainly could not make the decisions with
respect to priorities of payment There was also some suggesUon that Rhett might be able to
function as property manager. There was no evidence that she was even remotely qualified for
13
that position. The final part of the test deals with the question of whether or not the employer
continued to seek applicants. It is clear beyond any doubt that the employer did not continue to
seek applicants. In fact, the debtor, whom it was testified hated to fire anyone, let several
administrative and executive employees go and downsized the entire operation in an effort to cut
costs.
Assuming arguendo that the complainant had made out a prima facie case of all four of
the McDonnell Douglas requirements, the burden of proof shifts “to the employer to articulate
some legitimate, nondiscriminatory reason” for its action. Id. Such a reason must, in the words
of Justice Powell, “be recognized as a reasonable basis for a refusal to hire.” Id. at 802-3. This
court, dealing as it does with insolvent and failing businesses on a daily basis, can think of no
more legitimate reason for a discharge than the necessity of reducing the work force o f a
company in trouble. While it is clear that the company did not take final action until such time
as Rhett was almost ready to return, the evidence was that three of the people for whom Rhett
did significant work were let go in December, 1990, March 1991 and April, 1991. It should be
noted that even if the trier of the fact is unable to accept the justification set forth by the debtor
(certainly not the case here), there is not necessarily a requirement that the court find
discrimination without full compliance with the requirements of the burden <?f proof. St. M a ry ’s
Honor Center, et al v Hicks, 113 S Cl 2742, 2755, 125 L Ed.2d 407 (1993). Even the four
dissenting justices in that case concede that the burden of showing that the explanation proffered
■'y the employer is “unworthy of credence," remains on the one complaining of the
discrimination St Mary's, Supra al 2762, Texas Department o f Community Affairs v. Burdine,
14
C O N C L U SIO N
Based upon the findings of fact and conclusions of law set forth herein, this court find
that the creditor, Deborah Rhett, has failed to establish her claim, and that the claim should and
is hereby expunged.
Counsel for the debtor shall submit an appropriate form of order within ten days.
December 1995.
WILLIAM H. GINDIN
CHIEF JUDGE
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