SCOTT v. OCÉ INDUSTRIES

536 F. Supp. 141 (1982) | Cited 0 times | N.D. Illinois | March 2, 1982

FINDINGS OF FACT AND CONCLUSIONS OF LAW

This action has been tried upon the facts without a jury.After considering all the evidence and the briefs andarguments of counsel, in accordance with Fed.R.Civ.P. 52(a)the Court finds the facts and states its conclusions of law asfollows:

Findings of Fact ("Findings")

I. Introduction

A. Nature of the Case and Prior Proceedings

1. Patricia Marshall Scott ("Scott") filed this action April30, 1980 charging that Océ Industries, Inc. ("Océ") hadviolated Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000eto 2000e-17, and the Equal Pay Act, 29 U.S.C. § 206(d).Before trial Scott withdrew her Equal Pay Act claimsand proceeded solely on her Title VII charges. Scott allegedthat Océ had discriminated against her on the basis of sex, inthat her compensation and terms and conditions of employmentwere determined by unlawful considerations and she wassubjected to harassment that forced her resignation.

2. Scott's Complaint was timely, having been filed within 90days of her receipt of a right-to-sue letter from the EqualEmployment Opportunity Commission ("EEOC"). Scott's initialand amended charges before the EEOC were also timely filed:

(a) Her initial charge was filed March 18, 1977, within 180 days of the events complained of.

(b) Her amended charge, filed in September 1978, was based on her claimed constructive discharge. It therefore alleged additional unlawful employment practices related to or growing out of the original charge.

3. Trial commenced October 23, 1981 and concluded October29, 1981 with final arguments taking place November 2, 1981.

B. Parties

4. At the time of her Océ employment Scott was a widowedwhite female using the name Patricia Marshall (she has sincemarried and changed her last name to Scott). Scott beganworking at Océ in January 1974 as the credit secretary. FromDecember 1, 1974 through the termination of her employmentApril 25, 1977 she was employed as Assistant Credit Manager ofthe Repro division ("ACM-Repro").

5. Océ, headquartered in Chicago, Illinois, is an employerwithin the meaning of Title VII. During the entire time periodrelevant to this action Océ had two divisions, the Repro andICP divisions.

II. Scott's Employment Record

6. Scott's predecessor as ACM-Repro was a man named RonaldNorton ("Norton"). Norton had been hired in October 1973 at astarting salary of $12,000, subject to a review and anincrease if his performance were found satisfactory four tosix months after hiring. Instead Norton was fired in May 1974.From the pattern of Océ's increases (both on merit and to meetinflation) reflected in the record, it is reasonable toconclude that had Norton performed satisfactorily as ACM-Reprohe would have been earning not less than 10% more (or $13,200)by December 1, 1974 (more than a year after hiring).

7. Scott was qualified to perform the duties of ACM-Reproeffective December 1, 1974. Indeed she had handled theassignment on a trial basis since July 1, 1974 and hadvoluntarily asked to wait to assume the ACM title until shewas adequately trained. Scott's initial salary as an ACM was$9,460 (all salaries in these Findings are stated on an annualbasis). That was increased July 14, 1975 to $10,465. At thattime Océ's personnel action form for Scott (P. Ex. 3) stated,"Since Patricia is doing all of the credit work for the ReproDivision, the above requested increase still brings in the costof this position at substantially less than her predecessor,Ron Norton." Océ's personnel action forms for Scott datedJanuary 19, 1976 (P. Ex. 4) and January 19, 1977 (P. Ex. 5)reflect that her performance was "excellent" and "outstanding."

8. Norton had substantially more experience in handlingcredit than did Scott. However the job of ACM, although itrequires intelligence and application, is not anextraordinarily complex or highly skilled activity for whichsubstantial experience is either necessary or relevant. Indeedthe fact is that Scott performed the ACM job in an "excellent"and "outstanding" way while Norton had not. Scott hasestablished that in comparison with Norton she performed equalwork for unequal compensation. Océ's offered reasons for thedifference, in the light of this and subsequent Findings, arepretextual. This Finding is not vitiated by the fact thatScott, as a conscientious employee wanting to continue toincrease her skills, continued to seek and obtain furtheron-the-job training from her superior (Credit Manager PaulCalhoun) on dealing with credit problems.

9. In February 1976 the relevant credit department personneland their respective salaries were as follows:

Terry Harrigan Credit Manager $20,000

Repro ICP

Patricia Marshall (Scott) Donald McNeilAssistant Credit Manager Assistant Credit Manager$11,544 $16,500

Pamela DiMaria Amy WolfCredit Correspondent Assistant Credit Manager$7,800 $8,060

As of January 19, 1976 Scott had received a 10.3% increase. Asfor the ACMs in the ICP division, there were substantialdifferences between them in age and experience. However thefact that in large part their job content and responsibilitieswere equivalent leads to the inference that the grossdisparity in compensation levels was attributable in part tothe difference in sex between the two ACMs in ICP. Amy Wolf("Wolf") like Scott had also been promoted from a secretarialposition to ACM. Both the Scott and Wolf situations reflect aviewpoint on the part of Océ's relevant supervisory personnelthat a male ACM was an ACM, while a female ACM was little morethan a glorified secretary.

10. Terry Harrigan ("Harrigan") was Credit Manager fromAugust 12, 1975 through September 24, 1976 (his predecessorPaul Calhoun had held the position from sometime in 1974). Inthe spring of 1976 Harrigan informed Océ Treasurer RonaldLarson ("Larson") he was thinking of leaving Océ. Larsondelegated to Harrigan the task of finding his own replacement.Océ placed no advertisements for Harrigan's successor.

11. Harrigan hired Edward Regal ("Regal"), who began workingfor Océ August 6, 1976 at a salary of $18,000. Harrigan andRegal were former co-workers at Admiral Corporation's creditdepartment and were friends. Regal's initial title was ACM,replacing Donald McNeil ("McNeil"), who was then earning$16,536. On September 24, 1976 Regal became Credit Manager andhis salary was increased to $19,000.

12. Regal hired John Gonzales ("Gonzales"), another formerco-worker from Admiral, in late August 1976. Gonzales beganworking as an ACM-ICP September 13, 1976 at a $15,500 salary.

13. There was some difference in the skills required for theACM jobs for the Repro division (held by Scott) and the ICPdivision (held by Gonzales and Wolf). However that differencewas not of such a material nature (even taking into accountGonzales' greater experience) as to call for the differentialthat existed between the Gonzales and Scott salaries.1

14. Until about January 21, 1977 Scott and Regal had asatisfactory working relationship.2 Regal authorizedappropriate business travel for Scott, and about January 1977he properly corrected an unjust criticism of Scott's work byOcé's Dallas branch manager (the complained-of incident hadbeen caused by the Dallas office, not Scott).

15. About January 21, 1977 Scott had a conference with Regalas to her annualreview. During the conference Scott raised the wide disparitybetween her salary and that of Gonzales. Regal consultedLarson as to Scott's complaint about her salary.

16. After conferring with Larson, Regal told Scott that an8% increase was the best Océ could do, because it was seekingto adhere to an 8% guideline for increases. However both Regaland Gonzales received raises in excess of 8% during 1977. OnApril 25, 1977 Gonzales received a raise to $17,000 (a 9.7%increase), a salary higher than his predecessor McNeil hadreceived. On July 1, 1977 Regal received a raise to $22,000 (an11.1% increase), a salary higher than his predecessor Harriganhad received.

17. There is a sharp dispute in the testimony as to whetherRegal told Scott her salary was more than most executivesecretaries and later asked her to replace Inez Dolatowski,who resigned as the credit secretary in February 1977. Scott'sEEOC charge related both incidents. This Court has observedthe demeanor of both witnesses and has taken into account theadditional fact that Pamela DiMaria testified to aconversation in which Regal told her, during a salary review,that she was at a dead end at Océ and didn't need to worryabout her salary because she was just going to get married andhave children. This Court credits Scott's testimony that thedisputed conversations took place.

18. After the Scott-Regal conferences as to Scott's salaryincrease, Regal's and Océ's treatment of Scott underwent asharp change. As a witness Regal evinced both defensiveness anda kind of insecurity that, coupled with his narrow view ofemployed women already referred to, is consistent with hisaltered treatment of Scott. Among other matters:

(a) Regal began to inform Scott of various changes in her duties only by memos, placed on her desk while she was out of the office. Both the nature and effect of this and other conduct by Regal may best be judged by the fact that Regal and Scott (and others) were in the same small office, with their desks no more than 20 feet apart.

(b) Regal avoided speaking to Scott except to respond to direct inquiries she brought to him.

(c) Regal told Scott she would no longer be able to travel as part of her duties. Regal told her he felt it was unsafe for a woman to travel by herself (though that was not Océ's reason for the change, which was a general cutback — not elimination — of travel to economize).

(d) On February 8, 1977 Regal informed Scott by memo that she could no longer approve lease orders. Regal did not believe Scott had previously mishandled any such orders.

(e) On March 8, 1977 Regal directed Scott by memo to turn over any orders being held in credit longer than seven days. Thereafter Scott no longer had any involvement with such orders, and Regal did not discuss them with her.

It is unnecessary to decide whether some of the changes hadpossible business justification, as Océ contends. Both theinitiation of a number of such changes in a short time span,significantly reducing Scott's responsibilities, and theextraordinary means of communicating such changes and all otherbusiness matters reflected employer activity justifying thefiling, and confirming the validity, of Scott's EEOC charges.

19. On March 18, 1977 Scott filed EEOC charges. On March 22Scott informed Carolyn Morgan (Océ's one-person personnel"department") she had done so.3 Morgan immediately toldLarson, and Morgan and Larson jointly informed Regal that sameafternoon. Larson instructed Morgan to consult with Océ'sattorneys that day.

20. Regal read Scott's EEOC charge at some point while shewas still employed at Océ. Regal testified that hisunderstanding, both at that time and at trial, was that thebasis of Scott's complaint was that Regal made changes in thecredit departmentwithout Scott's approval. That reading of the charge isuntenable and further undermines Regal's credibility as awitness.

21. After Regal was informed of Scott's EEOC filing, he madeno effort to change his method of communicating with her orwith Pamela DiMaria. When asked at trial about any changes hemade to improve the relationship, he responded that he didnothing and then asked, "What was I supposed to do?" In facthis pattern of making Scott's job less meaningful, and herworking conditions less tolerable, continued. Moreover histestimony that Scott resisted change was rebutted by his ownacknowledgement on cross-examination that she fully compliedwith any changes he initiated in the credit department.

22. Sometime in March 1977 Regal began to open the mail eachmorning and to send checks directly to the bank. Regal did notdiscuss any need for, or the adoption of, that new procedurewith either Scott or Pamela DiMaria. That change added to theadverse conditions of Scott's job by reducing the volume ofmail she received to a very low level, further diminishing herfunctions.

23. After Scott filed her EEOC charge other Océ personneljoined Regal in "building a record" to denigrate Scott'sperformance as ACM-Repro and also joined Regal in furtherisolating her as an employee. Thus for example:

(a) Herbert Russell (Océ's Vice President of sales-marketing) wrote an April 15, 1977 memorandum to Larson (P. Ex. 35) whose sole purpose was to build a record to make Scott appear both incompetent and uncooperative.4 In fact no evidence was introduced that she failed in either respect.

(b) Robert Fortune (Océ's national sales manager for marketing) told McNeil ("between you and I" [sic]) that it would be in McNeil's own best interest not to be seen associating with Scott in the Océ offices because she had filed an EEOC charge.

24. Regal told Scott in March or early April 1977 that hehad been "told I can't fire you, but I can certainly make ittough so you quit." Scott considered resigning but decidedinstead to take her vacation in April 1977, hoping that acooling-off period would bring about a change on Regal's andOcé's part and enable her to keep working at Océ. When shereturned in the latter part of April she found that the filesand "open item book" that represented her principal remainingjob responsibility were no longer at her desk. At that pointher working conditions had become wholly intolerable, amountingto a constructive discharge. On April 25, 1977 Scott toldLarson she had decided to leave Océ, signing a letter ofresignation Larson dictated for her signature.

25. All the cumulative acts discussed in earlier Findings,involving inequity in Scott's salary based on her sex,reduction of her responsibilities, increasing isolation,attempts to set up situations in which Scott would either failto perform or look as though she was failing to perform, andfinally the removal of Scott's files and "open item book"while she was on vacation, amounted to a constructivedischarge of Scott. Accordingly her "resignation" referred toin Finding 24 was effectively forced on her.

26. On the basis of the conflicting testimony in this case,this Court concludes that Scott and her witnesses havepresented the more credible account of the circumstancessurrounding Scott's employment with Océ and that the reasonsarticulated by Océ for the salary disparity are unworthy ofbelief and were in fact a pretext for discrimination.

27. Scott did not immediately seek other employment,believing that Océ would take her back (she discussed thatmatter with the EEOC). She did check newspaper want ads andcommunicated with prospective employers by telephone. Sheregistered with the Illinois Bureau of Employment and aboutJuly 1977 registered with a single employment agencyspecializing in management rather than clerical jobs, advisingthem she was looking for work in the credit field in which shewas skilled. No such jobs were available, nor was she able tofind such jobs through the newspaper want ads or bycommunicating with other employment agencies.

28. Scott performed some work for a company called NuTheme,owned by the son of her then fiance (now her stepson), at theend of August 1977. She worked on collection of delinquentaccounts and reordered the firm's accounting functionsgenerally. At the beginning of September 1977 Scott became illfor a few months and was unavailable for work. Scott's limitedinvolvement in NuTheme has led to her becoming a principal inthat company, increasing to the point in June 1978 when shetook over most of the management functions. It was agreed atthat time that she would operate the business for four years,then would become its owner for a nominal amount (thatarrangement has since been formalized by a written agreement).

29. Scott is not entitled to damages in any case for theperiod after she opted to become an entrepreneur with NuTheme,for her decision to seek a buildup of equity in that company(the amount and value of which is in part intangible and hasnot been proved by her) amounts to a failure to meet herburden of proving damages thereafter. It is reasonable forScott to recover damages from Océ for a period of four monthsafter her termination, until she became ill and was unable towork in any case.

30. There was no evidence as to the amount or duration ofany unemployment compensation benefits received by Scott. Inany event, such benefits will not be applied to reduce Scott'srecoverable damages here.

31. Scott's actual Océ compensation and other earnings, andthe compensation Oce would have paid to a male occupying thesame position as ACM-Repro, are as follows:

Period Involved Scott Male ACM-Repro

12/1/74 - 7/13/75 $5,045.335 $7,04067/14/75 - 1/18/76 5,377.857 6,783.3361/19/76 - 1/18/77 11,544 14,559.6081/19/77 - 4/25/77 3,328 4,259.1794/26/77 - 8/25/77 837.5010 5,323.969 ---------- ---------- Totals $26,132.68 $37,966.06

Conclusions of Law

1. This Court has jurisdiction of the parties and thesubject matter of this action under the Civil Rights Act of1964, 42 U.S.C. § 2000e to 2000e-17.

2. Scott timely filed an EEOC charge of sex discrimination(the "Charge") against Océ March 18, 1977. Océ's last act ofsex discrimination in connection with Scott's level ofcompensation had occurred at the time of her last salary reviewand raise effective January 19, 1977, and Scott had thereafterreceived other sex-related adverse treatment from her immediatesuperior Regal.

3. Scott's amended EEOC charge filed October 13, 1978,alleging a constructive discharge, is also within the Court'sjurisdiction. Its gravamen is that the discriminatorypractices complained of in the Charge continued after itsfiling, effectively forcing and making reasonable Scott'sresignation. That claim of constructive discharge is properlyincluded within the Complaint in this Court as being "like orreasonably related to" the allegations in the Charge.Jenkins v. Blue Cross Mutual Hospital Insurance, Inc.,538 F.2d 164 (7th Cir. 1976). Alternatively, this Court has jurisdictionover the constructive discharge claim because it allegesunlawful employment practices related to and growing out of thesubject matter of the Charge. Sanchez v. Standard Brands,431 F.2d 455 (5th Cir. 1970). Additionally, because theconstructive discharge occurred during the pendency of theCharge before the EEOC, a second authorization to sue is notrequired. Kirkland v. Buffalo Board of Education, 622 F.2d 1066(2d Cir. 1980).

4. Scott has alleged unlawfully disparate treatment.Accordingly, Scott must prove that Océ intentionallydiscriminated against her. Texas Dept. of Community Affairs v.Burdine, 450 U.S. 248, 253, 101 S.Ct. 1089, 1093, 67 L.Ed.2d207 (1981). Océ need not prove the absence of discriminatorymotive on its part. McDonnell-Douglas Corp. v. Green,411 U.S. 792, 802, 93 S.Ct. 1817, 1824, 36 L.Ed.2d 668 (1973); FurncoConstruction Co. v. Waters, 438 U.S. 567, 578, 98 S.Ct. 2943,2950, 57 L.Ed.2d 957 (1978).

5. Scott has met her burden of establishing a prima faciecase of discrimination on the basis of sex by proving that (a)she is a member of a class of persons protected under TitleVII, (b) she performed her duties as ACM-Repro satisfactorily,(c) she performed substantially equal work for unequalcompensation. McDonnell Douglas Corp. v. Green, 411 U.S. 792,802, 803, 93 S.Ct. 1817, 1824, 1825, 36 L.Ed.2d 668 (1971).Scott has proved that her work was "outstanding" (Océ'scharacterization) but that her salary was lower than a maleACM-Repro would have received due to sex discrimination. Countyof Washington v. Gunther, 452 U.S. 161, 101 S.Ct. 2242, 68L.Ed.2d 751 (1981).

6. Such a prima facie case shifted the burden to Océ torebut the presumption of discrimination by producing evidencethat Scott received a lower salary for legitimate,non-discriminatory reasons. Océ's meeting of that burdenrequires Scott to prove that the proffered reason was not thetrue reason. Texas Dept. v. Burdine, 450 U.S. at 254-55, 101S.Ct. at 1094-95.

7. As reflected in the Findings (including in particularsummary Finding 26), Scott has met all the burdens of proofimposed on her by law as stated in these Conclusions.

8. Scott has proved that she was constructively dischargedby Océ April 25, 1977. Océ had made Scott's workingconditions so difficult and unpleasant that a reasonable personin her position would have felt compelled to resign. Welch v.University of Texas and Its Marine Science Institute,659 F.2d 531, 533 (5th Cir. 1981); Bourque v. Powell Electrical Mfg.Co., 617 F.2d 61, 65 (5th Cir. 1980); Alicea Rosado v. GarciaSantiago, 562 F.2d 114, 119 (1st Cir. 1977).

9. Scott is entitled to an award of back pay for the periodthat commenced two years before the filing of the Charge(March 18, 1975) and ended April 25, 1977. Stewart v. GeneralMotors Corp., 542 F.2d 445, 453 (7th Cir. 1976), cert. denied,433 U.S. 919, 97 S.Ct. 2995, 53 L.Ed.2d 1105. Scott is alsoentitled to her salary, taking into account what she would haveearned absent any discrimination, from April 25, 1977 until shewas no longer available for other employment (which the Courtfinds to have occurred approximately August 25, 1977), reducedby the sum of her interim earnings.

10. This Court need not decide the general question whetheran ex-employee's decision to engage in self-employment is areasonable means of mitigating one's damages. See such cases,in another area of the law, as Heinrich Motors v. NLRB,403 F.2d 145, 148 (2d Cir. 1968); NLRB v. Cashman Auto Co.,223 F.2d 832 (1st Cir. 1955). Where such a decision (as in thiscase) results in the employee receiving both compensation andan equity interest in thebusiness (here Scott will become the owner of NuTheme uponpaying a nominal amount), the appropriate amount to bededucted from the sum the ex-employer is obligated to pay is"the reasonable value of her services . . . for which she didnot receive any specific salary." Armstrong v. Index JournalCo., 647 F.2d 441, 449 (4th Cir. 1981). Under the facts herethat reasonable value must by definition be identical to thereasonable value of her services that Scott is entitled toreceive as damages. Accordingly no damages are recoverable forthe period after she committed herself to NuTheme rather thanthe general employment market.

11. Scott's backpay award need not be reduced in any manneron account of unemployment compensation benefits she receivedduring the period she was unemployed after being discharged byOcé. EEOC v. Sandia Corp., 639 F.2d 600, 624-26 (10th Cir.1980); Marshall v. Goodyear Tire & Rubber Co., 554 F.2d 730,736 (5th Cir. 1977).

It is hereby ordered that Patricia Marshall Scott is awardedjudgment against Océ Industries, Inc. in the sum of $11,833.38plus costs (including reasonable attorneys' fees).

1. Larson's testimony as to the difficulty of the ACM-ICPjob as contrasted with the claimed ease of Scott's ACM-Reprojob was exaggerated and not credible. Larson admitted thattrade acceptances, the most difficult aspect of the ICP work,were also handled by Wolf, one of the lowest paid people inthe credit department. McNeil as well as Scott also testifiedthat the ACM-ICP work was divided on a geographical basis,with Wolf and McNeil performing the same functions. MoreoverLarson's testimony contrasting the cost of equipment sold bythe two divisions and the type of customers served by each wassimilarly exaggerated. As to the former, Larson himselfadmitted that the Repro 3600 model was very popular and soldfor the comparatively low cost of $1,500 in 1977. As for thelatter, Scott's customer compilation, as well as Larson'sdisclosure on cross-examination that he had no basis for hisstatement, belied Larson's testimony that the "vast majority"of the Repro customers were Fortune 500 companies.Océ's failure to produce either comparisons of amountscollected by the ICP and Repro divisions or a breakdown of theICP and Repro customer lists, information readily available toit, further lessens the credibility of its witnesses' claimsthat the ACM-ICP job was materially more difficult than Scott'swork.

2. This was so although Regal on occasion used sexistterminology in the office, such as referring to womenslightingly as "broads." There is no evidence that he directlycalled Scott or any other woman working in the office a"broad."

3. Pamela DiMaria had gone to Morgan complaining aboutproblems with Regal. Morgan then asked Scott to see Morgan andinquired whether Scott had the same kind of problems. Scottsaid she had and advised Morgan she had just filed an EEOCcomplaint.

4. On cross-examination Russell testified that in 1979 thecredit department (Regal was still its manager) had causedmaterial problems for Russell's sales group, discussed at asales managers' meeting for Océ's regional offices. That factaccording to Russell did not lessen his high opinion of Regal'sabilities, and it did not occasion his writing a memo to Océexecutives accusing Regal of "sandbagging" the salesdepartment, as Russell had done to discredit Scott.

5. This is calculated at a $9,460 annual rate.

6. This is calculated at a $13,200 annual rate.

7. This is calculated at a $10,465 annual rate.

8. This represents the same 10.3% increase in annual rategiven Scott in January 1976, which the Court finds a male ACMwould also have reasonably received.

9. This is calculated at a $15,971.88 annual rate,representing the same 9.7% increase given to Gonzales asACM-ICP April 25, 1977 (despite Océ's claim to Scott that an8% increase was "the best it could do"). That annual rate isless than Gonzales' actual salary of $17,000, thereby givingreasonable effect to Océ's exaggerated claim that the ACM-ICPjob was more difficult than the ACM-Repro job.

10. This is the amount Scott received from NuTheme. It doesnot include any unemployment compensation as stated in Finding30 and Conclusion 11.

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