Rhett v Carnegie Center Brief Plaintiff-Appellant

    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 A uthorities................................................................................................... in

Statement of Subject Matter and Appellate Jurisdiction................................... 1

STATEMENT OF THE ISSUES PRESENTED FOR REV IEW ..................  2

STATEMENT OF THE CASE............................................................................ 4

STATEMENT OF THE FACTS.........................................................................  5

Summary of the A rgum 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

i



II. THE COURTS BELOW ERRED AS A MATTER OF LAW BY 
FAILING TO EVALUATE WHETHER PLAINTIFF SUFFERED 
DISCRIMINATION ON ACCOUNT OF HER RACE AND 
G E N D E R .........................................................................................  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 Position ................................  37

2. Secretarial Position.......................................................  39

3. Receptionist Position ..................................................  40

CONCLUSION ..................................................................................................... 41

Local Appellate Rule 28(d) Certification...............................................................42

Certificate of Service ................................................................................................42



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

1 X 1



Pages:

Hogan v. Pierce, 31 Fair Empl. Prac. Cases 115
(D.D.C. 1983) .......................................................................................  11, 23

Jacobs v. Martin 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

I V



Pages:

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

v



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 a w .................................................. 33

Pages:

VI



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 title 11 of 

the Bankruptcy Act. 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 at 6 (finding no. 20) and 10 (findings nos. 39 and 40), and by the District 

Court in its Memorandum Opinion 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. 10/20 Tr. 156, 157, 
160.

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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. A.

__ ; 10/20 Tr. 65, 67, 68. She was recommended for and hired as a permanent

Secretary on or about July 17, 1989, A .__ ; 10/20 Tr. 67, 71 and was assigned to

defendant’s Accounting/Finance Department. 10/20 Tr. 72.

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. Ex. C-2. In January 1990, based on her satisfactory 

performance, Rhett was given a salary increase of $1,500. Id.; 10/20 Tr. 51-65, 79.

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. 10/20 Tr. 93-94. 

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" 

(10/20 Tr. 94; 11/30 Tr. 117).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, Bankruptcy Court Op. at 3 (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." (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 would not tread on thin ice."

2Rhett felt hurt and embarrassed by Gorminsky’s comments and questions 
concerning her marital intentions. 10/20 Tr. 94, 97, 98.

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10/20 Tr.99. When plaintiff asked him what he meant by that, he told her to "read 

between the lines," 10/20 Tr. 99-100, and when further pressed said, "lLeave me 

alone and get out of my office," 10/20 Tr. 100.3

In fact, defendant hired a temporary secretary to fill in during Rhett’s 

absence, 10/20 Tr. 105-07, whom Rhett herself trained during her last week prior to 

taking leave, id. at 106. 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.

(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 10/20 Tr. 69-71, 

117-22, 11/30 Tr. 132-33; Ex. C-10, Tab J, at 2 (Barbara MacGreagor, on pregnancy 

leave twice, including from January-June, 1991); 11/30 Tr. 91; Ex. C-10, Tab J, at 2;

3Plaintiff was again hurt and bewildered by Gorminsky’s comments (which the 
Bankruptcy Court erroneously attributed to Turndorf, Op. at 7, A. ). 10/20 Tr. 
100- 01.

4See also Dist. Ct. Mem. Op. at 4, A .__ , quoting Turndorf s 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, Gorminsky conceded that if a woman employee went out on 
pregnancy leave he did not consider her to be terminated, see Ex. C -ll, Tab B, at 
17 (Gorminsky Dep.): "I view it as the employee just isn’t there . . . .  I view it as 
she is taking a leave."

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Bankruptcy Court Op. at 5 no. 17 (Brenda Sirkus); Bankruptcy Court Op. at 6 no. 

19 (Linda Kraus); 10/20 Tr. 69-71 (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. Bankruptcy Court Op. at 8 (nos. 8, 9) and 9 (no. 12); see also 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. (Ex. C-5). As of that date, Rhett was under 

continued medical care for post-partum depression, a pregnancy-related medical 

condition. 10/20 Tr. 147, 11/29 Tr. 95-96. During the period of her leave, up until 

March 26, 1991, her medical insurance coverage as a Carnegie employee had 

continued in force, 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, 

10/20 Tr. 123-24; 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, 

(Ex. C-ll).

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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, Ex. C-ll, Tab B, at 62-65 (Gormisky Dep.), even though at least one other 

secretary was junior to and had less work experience than plaintiff,5 and even 

though plaintiff s 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," 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." Op. at 15. The District Court affirmed, 

holding that the Bankruptcy Court’s findings that Carnegie had financial difficulties

510/20 Tr. 111-12; 11/29 Tr. 90; compare Ex. C-l (Rhett’s resume) with 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. 10/20 Tr. 50-67; 11/29 Tr. 
23; Ex. C-l; Ex. C-14.

6See plaintiffs testimony regarding the virtually interchangeable nature of the 
positions held by Kirsten Wolf, Kathy Buchanan, and Brenda Sirkis, 11/29 Tr. 57-59, 
83-93, A .__ - , - .

- 9 -



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." 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. 11/30 Tr. 90, 174-75. The courts below found that 

appellant was not qualified for any of the vacancies. See infra Argument III.

Summary of the Argument

L 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 McDdonnell 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 inMarzano 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 of 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,

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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 (10/20 Tr. 104- 

05; 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

8Gorminsky 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," 11/30 Tr. 167. Turndorf, when 
asked why Rhett’s position was eliminated, stated only that "It was economically 
driven," Id. at 70. (Although Alan Landis made the decision to eliminate Rhetf s 
job and neither Turndorf or Gorminsky had authority to hire or fire any employee, 
Bankruptcy Court Op. at 3 no. 2, they were the only witnesses presented by 
defendant at trial, Op. 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, 
Gorminsky 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. 11/30 Tr. 153; see also id. at 167.

- 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, plaintiff did 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]," Op. at 15. See also District Court Mem. Op. at 5 n.3.

- 18 -



her position has been eliminated for reasons unrelated to her pregnancy.11 Here, 

the only reason plaintiffs 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

nN.J.S.A. § 34:llB-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." Bankruptcy Court Op. at 4 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. 

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 could

12See 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 VTI in Nashville 
Gas Co. v. Satty, 434 U.S. 136 (1977)).

- 20 -



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 VTI 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 Bankruptcy Court Op. at 12, and District 
Court 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 of 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 positon because she was absent 

due to her pregnancy. Since, as discussed above, that reason is illegal under Title 

VII, it is discriminatory perse 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. of 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 McDonnel 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 E V A L U A T E  W H E T H E R  P L A I N T I F F  S U F 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 

Bankruptcy Court Opinion at 10 (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 

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 plaintiffs 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), aff’g 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 of 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," 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 Bankruptcy Op. at

18"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 of fact no. 39 that "[t]here 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") and id. (separate finding of 

fact 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," 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 

plaintiff s 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

I9Erica Campbell worked not for Carnegie Center Associates, which employed 
the plaintiff, but for a separate entity controlled by Alan Landis known as Peoca 
(10/20 Tr. 43). 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") (10/20 Tr. 125-45).

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," Op. at 12, completely overlooking the 

fact that as a matter of practice,20 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:

20Cf 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).

21As 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.

(11/29 Tr. 93)(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 Gorminsky (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 VTI, 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 of 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; Bankruptcy Court Op. at 6 no. 

23; District Court 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 thee 
is an opening for that position, then the individual would be re-employed.

- 34 -



(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 posessed the required qualifications to 

perform all three positions. 10/20 Tr. 115-20. 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. 11/30 Tr. 90, 174- 

75.

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 Gorminsky, 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 Bankruptcy Court Op. at 7 (no. 25). In fact, 
when plaintiff spoke with Gorminsky 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." 10/20 Tr. 99. However, because the Bankruptcy Court mistakenly believed 
that Turndorf had made these remarks, it drew the inference that they referred to

- 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 
with Gorminsky’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 
119, 161. ‘ ’

- 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. 10/20 Tr. 112, 113.

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. Tr. 512 (Ex. C-10, Tab A, at 

66) (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 (Ex. C-10, Tab P), the 

day before Rhett s termination. (Ex. C-5) The position vacancy created by Cohen’s 

departure was not advertised by Carnegie. 11/30 Tr. 92. Such word-of-mouth

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 -



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. 10/20 Tr. 114. She was fully qualified to perform 

the duties of the position. Id. at 115-17.25 Rhett was familiar with the duties of 

the position by virtue of her working with Ms. Cohen and observing her 

performance of her duties. Id. at 115. 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 Ex. C-6. 
The position was little more than a secretarial position. 10/20 Tr. 33; 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. 10/20 Tr. 65. 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. 10/20 Tr. 32.

- 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, Bankruptcy Court Op. at 3 (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. 10/20 Tr. 50-67, 187; Ex. C-l; 

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. 11/30 Tr. 133-34; Ex. C-ll, Tab J, at 1. Drexinger was brought in from a 

temporary agency in December 1990. 11/30 Tr. 132. No one at Carnegie contacted 

Rhett to find out if she was interested in the Secretary to Landis position. 10/20 Tr. 

120. Had she been contacted, she would have expressed interest in the position. 

10/20 Tr. 118-19. She was fully qualified to perform the duties for the position, 

given her extensive secretarial experience. Id. at 50-65, 119; 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. Ex. C-11, Tab K, at 1. No one at Carnegie contacted Rhett to find out if 

she was interested in the Receptionist position. 10/20 Tr. 120. 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. 10/20 Tr. 50-65; 11/29 Tr. 45-46, 57-58. See also Bankruptcy Court 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.

- 4 0 -



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 

P.O. Box 6584 
Philadelphia, PA 
(215) 848-7239

CHARLES STEPHEN RALSTON 
NORMAN J. CHACHKIN

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 24th day of 

December, 1996, 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 COURT ORDER



UNITED STATES DISTRICT COURT 
DISTRICT OF NEW JERSEY

DEBORAH RHETT; 

Appellant,

-v-

CARNEGDE 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;

IT IS on this 3 > /  of j  J U l  ,1996,

ORDERED that the January 6, 1996 Order of the Bankruptcy Court be and hereby is 

AFFIRMED in all respects.

entered
COQCP

WlLUAM h A

(DeputyCW)

dmdlNAL PILED
AUG 5 1996

WILLIAM T. WALSH, CLERK



DISTRICT COURT MEMORANDUM OPINION



NOT FOR PUBLICATION

UNITED STATES DISTRICT COURT 
DISTRICT OF NEW JERSEY

DEBORAH RHE7T; 

Appellant,
Civ. No. 96-0852 (GEB) —
Bankr. No. 92-30385 (WHG)

-v-

CARNEGTE CENTER ASSOCS.;

Appellee.

AUG 5 1996

MEMORANDUM OPINION WALSH, C i f

BROWN, District Judge

This matter conies before the Court on the appeal of plaintiff Deborah Rhett from the January 

9, 1996 Order 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 affirm the Bankruptcy Court’s 

decision and January 9, 1996 Order in all respects.

I. BACKGROUND

In this action, appellant Deborah Rhett ("appellant" or "Rhett") claims that she was discharged 

from employment by appellee because of her race and gender. Rhett is an African-American female who 

was employed by appellee Carnegie Center Associates ("appellee" or "CCA") from April, 1989 to March 

26, 1991.2 She is a graduate of Burlington H;t?h School and b:-3 considerable secretarial and clerical

1 The January 9, 1996 Older was based on findings of fact and conclusions of law that, the 
Bankruptcy Court rendered in a decision filed on or around December 21, 1995.

2 Appellant challenges only tire Bankruptcy Court's ultimate factual conclusions, not the 
Bankruptcy Court’s findings as to the underlying facts, all of which 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 "[n]either 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/fmance 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 annua! 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 leaving 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 she answered no, he said "[i]n society's eyes that's the right thing 

to do. You should get married." Rhett also asserts that when she informed Gary Tumdorf, Chief 

Financial 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 about 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 Coart correctly concluded, that CCA typically tried to rehire or find a position for someone 

seeking to return from maternity leave. Tint does not mean, however, tint 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 Rhett 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 Rhett's. On or

about March 26, 1991, Gormisky sent a letter 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 
make 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 letter from Keith Gormisky to Deborah Rhett, Appellant's Appendix Vol. II, at 472.

CCA also released several supervisory employees around fhis 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 decreased the remaining 

executives' compensation.

Rhett sued CCA in this Court on 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 seq. 

and the New Jersey Law Against Discrimination, N.J.S.A. 10:5- 12(a) et seq., by terminating her 

employment and 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, backpay, 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 Carnegie 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 "ftjhere is not 

a scintilla of evidence that any person at Carnegie 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 Court 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 Title VII or NJLAD issue.

4 The Bankniptcy Court concluded that "the testimony of the debtor, through the statements of 
Turndorf, make it clear that she was not qualified for any of those jobs. Each of the positions required 
persona! qualities that Rhett had not previously demonstrated." Appellant's Appendix Vol. I, at 13.

5 At an initial hearing on debtor's motion to expunge the claim, the Bankruptcy Court determined 
that it was a contested matter as defined by Fed. R. Ban Kit. 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(b) and 28 U.S.C. § 157(b)(2)(B) & (O). 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 prima 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 pretextual.

II. DISCUSSION

A. Standard of Review

In an appeal from a bankmptcy court's decision, the district court applies two different standards 

of review. The district court reviews factual findings of the bankruptcy courts under a clearly erroneous 

standard. Sec In re Sharon Steel Corp., 87i F.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; Fed . 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, 

604 (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. Martin Luther Home, Inc., 824 F.2d 643, 646 (8th Cir. 

1987)).6 See also California Fed. Sav. & 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 condidons differently than other conditions. Newport News Shipbuilding and Dry Dock 

Co. v. EEOC, 462 U.S. 669, 684 (1983) ("The 19/8 Act makes clear that it is discriminatory to treat 

pregnancy-related conditions less favorably than other medical conditions.").

The New Jersey Law Against Discriminauon 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 Title 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); Shaner v. Horizon Bancorp., 116 N.J. 433 (1989); Peperv. Princeton Univ. Board o f 

Trustees, 77 N.J. 55 (1978). See also Abrams v. LightoUer 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 VII claimant can demonstrate an alleged violation in either of two ways. First, a plaintiff 

can argue a disparate impact theoiy 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, 644 (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) ("[W]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. Internal'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. Burdine, 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., Inc., 76 F.3d 413, 420-21 (9th Cir. 1996); Carney v. Martin Luther Home, 

Inc., 824 F.2d 643, 648 (8th Cir. 1987) (noting that the McDonnell Doughs 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 prima 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 causa! nexus between the adverse

7 The Bankruptcy Court did not consider plaintiffs' Tide VTI claims under a disparate impact 
analysis. Appellant contends that die Bankruptcy Court committed error in not doing so, stating that ”[t]he 
Court improperly limited its analysis of the evidence to the disparate treatment method." Appellant's Brief 
at 17. However, she does not allege a facially neutral employment practice adversely impacting a 
protected group, nor a suiastical imbalance in the CCA workforce, nor does she make any further 
argument regarding a disparate impact theory. Therefore, the Court can not find that the Bankruptcy 
Court committed error in finding no prima facie case under the disparate impact theory.

10



employment action and plaintiffs status as a member of the protected class. McDonnell Douglas Corp., 

411U.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 & Young, 28 F.3d 366, 373- 

74 (3d Cir. 1994) ("Absent evidence that could 'fairly bo 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-U; Ezold v. Wolf, Block, Schorr & Solis-Cohen, 983 F.2d 509, 521-22 

(3d Cir. 1992).

12



C. Rhett's Appeal

1. Dire a  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 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 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 Rhett 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,

* Rhett has evidently disregarded her direct evidence theory of racial discrimination in this appeal. 
She fails to reference any 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 Rcalry Corp., 943 F.2d 121, 123 n. 1 (IstCir. 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 either 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: When 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



("[Ajpart 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, see supra page 2, do not establish a prima fa d e  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 consider her for 

other positions, are by no means directly discriminatory and will be considered infra.

15



2. A pplica tion  of McDonnell Douglas F actors

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 704  ("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.").

I 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 

l  contract the support staff, did not establish a case of pretextual discrimination. The Ninth Circuit had 

■xxasion to consider a similar issue in Smith v. F. W. Morse & Co., Inc. , 76 F.3d 413, 424-425 (9th Cir.



1996). 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 wliile she is on a pregnancy-induced leave so long as it does so for legitimate reasons unrelated

to her gravidity." Id. 'Hie 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 VII 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"); Cmokrakv. Ex-angelical 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 1990 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 cleariy 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 prima facie disparate impact or circumstandal case of discrimination. See supra pages 9-10

(quoting Wasson, 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

1 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



NOT FOR PUBLICATION

UNITED STATES BANKRUPTCY COURT 
DISTRICT OF NEW JERSEY

In Re:

Carnegie Center Associates, 
A General Partnership,

Case # 92-30385 
Chapter 11

HFC ? 1 1995
Debtor. U.S. OM'.'CRUPTCY COURT

OPINION DEP

APPEARANCES:

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 WILLIAM H. GINDIN. CHIEF JUDGE

1



PROCEDURAL HISTORY

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 §1334(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 (Rhett), 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 entities owned or controlled by one Alan Landis 

(Landis) and operated from one office located in Carnegie 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 Tum dorf 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. Rhett 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, statistical 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 -1 and J-2 in evidence) and a further increase of 4% on March 29, 1991 (Exhibit

4



P-12 in evidence). Both of these increases were approved by Landis.

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 o f 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 M edoff 

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 of 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 off married. Gormisky knew that she had a boyfriend who was already married.

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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 of 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 of outstanding bills.

31. While Rhett was out, Carnegie tried 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

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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 o f 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 o f $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.

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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.

DISCUSSION

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.

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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 theoiy 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 o f 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 heed 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.

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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.” Afatal Service Company, Supra at 347. In this type o f 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 Rhett 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 minority; (ii) that he applied and was 
qualified for a job for which the employer was seeking applicants;
(iii) that, despite his qualifications, he was rejected; and (iv) that, 
after his rejection, the position remained open and the employer 
continued to seek applicants from persons of complainant’s quali­
fications.

McDonnell Douglas, Supra at 802. Each o f these elements must be examined in the light o f the 

testimony adduced at the trial. 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 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 o f 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 suggestion that Rhett might be able to 

function as property manager. There was no evidence that she was even remotely qualified for

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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 o f 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 pf proof. St. M ary's  

Honor Center, el al. v. Hicks, 113 S.Ct. 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 

by the employer is “unworthy of credence,” remains on the one complaining o f the 

discrimination. St Mary's, Supra al 2762; Texas Department o f  Community Affairs v. Burdine,

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450 U.S. 248, 252, JO1 S.Ct. 1089, 1093 (1981); See also, McKenna v. Pacific Rail Service, 32 

jF. 3rd 820, 825-6 (3rd Cir., 1994).

It is also important to note that the Supreme Court in Price Waterhouse v. Hopkins, 490 

U.S. 228, 109 S.Ct. 1775 (1989) dealt with the problem which arises when the discrimination 

forms a portion of the reason for the action by the employer. There, Justice Brennan speaking 

for a six to three majority, rejected a “but for” test, and insisted that the employer show by a 

preponderance of the credible evidence that even if the employer had not taken the protected 

class situation, the result would have been the same. Price Waterhouse, Supra at 242. Thus in 

the instant case, 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.

In view of the determination of the factual issues by the court, it is unnecessary to make 

conclusions concerning the damage issues raised by Rhett.

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CONCLUSION

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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