Simple, Eric D. v. Walgreen Company ( 2007 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 06-3990
ERIC D. SIMPLE,
Plaintiff-Appellant,
v.
WALGREEN COMPANY,
Defendant-Appellee.
____________
Appeal from the United States District Court
for the Central District of Illinois.
No. 04-1305—Michael M. Mihm, Judge.
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ARGUED NOVEMBER 14, 2007—DECIDED DECEMBER 26, 2007
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Before POSNER, WOOD, and WILLIAMS, Circuit Judges.
POSNER, Circuit Judge. The district court granted sum-
mary judgment in favor of the defendant in this suit for
racial discrimination in employment in violation of Title
VII and 42 U.S.C. § 1981, and the plaintiff appeals. He had
been hired by Walgreen in 1995, initially as a manage-
ment trainee. Four years later he was promoted to assist-
ant store manager and two years after that he was offered
the job of manager of a Walgreens store in Kankakee,
Illinois. He declined the offer because the store was in a
“socioeconomically challenged” area with a high “shrink,”
which means a gap between expected and actual profits
2 No. 06-3990
that is due to shoplifting. The offer was made by Michael
Palmer, the district manager for the region in Northern
Illinois that includes Kankakee. The following year
Palmer offered the plaintiff a store manager job in
Normal, but the plaintiff rejected that offer too. Walgreen’s
demographic tracking records show that the average
annual income of the customers of both the Kankakee
store and another store, in Peoria, that the plaintiff was
also offered and declined is “low” (defined as less than
$40,000) and that more than 40 percent of the customers
are black. Although the store in Normal that the plaintiff
was also offered had a more affluent customer base and
80 percent of its customers were white, the defendant
makes nothing of the demographic differences between
that store and the ones in Kankakee and Peoria.
A few years later, Palmer, though aware of the plaintiff’s
wanting to manage a store in Palmer’s district (which
contains 28 Walgreen stores), hired a white woman,
Melissa Jonland, as manager of a store in Pontiac, Illinois,
without notifying the plaintiff of the opening. The custom-
ers of this store have an average income of $40,000 to
$60,000 and more than 80 percent of them are white. It is
a more desirable store to manage than the Kankakee and
Peoria stores that had been offered to the plaintiff—it is
more profitable (in part because of less shrinkage), and
store managers’ bonuses are based on their stores’ profits.
It may seem odd that a store would be less profitable
just by virtue of being in a poorer neighborhood, even if
that means greater losses from shoplifting; there might
well be offsetting cost savings, such as in rent or wages.
But Walgreen has not made an issue of relative profit-
ability.
By the time Jonland was appointed to manage the
Pontiac store, the plaintiff had been an assistant store
No. 06-3990 3
manager for four years and Jonland for only two. (Only
assistant store managers are eligible for promotion to store
manager.) The company considered both to be highly
qualified for appointment as store managers. Only the
difference in experience—which favored the plain-
tiff—seems to have distinguished them. Jonland had not
expressed interest in the Pontiac store, and Palmer had
not offered her a store manager’s job at one of the pre-
dominantly black/low-income stores.
Shortly after Jonland’s appointment, Leanne Turley, the
manager of the store of which the plaintiff was assistant
manager, had a conversation with him in which, she
testified in her deposition, “I may have stated that Pontiac
was possibly not ready to have a black manager. It is well
known in this area that some of the smaller, outlying
towns have some very racist tendencies, and I was
simply trying to make [the plaintiff] feel better because my
feeling was he may not have been very happy working
there.” Turley had previously been the manager of a
store of which Jonland had been assistant manager; and
in an answer to an interrogatory propounded by the
plaintiff, Palmer stated that his assessment of Jonland’s
performance, in deciding to promote her to store manager,
had been “supported by” Turley.
The plaintiff’s lawyer does not help his cause by arguing
that Walgreen’s tracking of the racial composition of its
customers shows discriminatory intent, that Jonland but
not the plaintiff was once reprimanded for speaking in a
vulgar manner to a coworker, that Palmer’s admission
that he consulted Turley about the appointment of Jon-
land constitutes evidence that his decision was influenced
by racism on Turley’s part, and that the plaintiff has made
out a prima facie case both by direct evidence of discrimi-
4 No. 06-3990
nation and by the indirect method of the McDonnell Douglas
case. Retailers are naturally very interested in the racial
makeup of their customer population because people of
different races often have different tastes and sensitivities;
Jonland’s episode of vulgarity could hardly be thought a
career impediment; all that Palmer admitted was that
he was influenced by Turley’s assessment of Jonland’s
performance when Turley had been Jonland’s boss; and
when a plaintiff in a discrimination case has direct evi-
dence of discrimination as well as the indirect evidence
required to make out a prima facie case under McDonnell
Douglas he does not have to show that either approach,
taken in isolation from the other, makes out a prima
facie case—he can combine them. “Any demonstration
strong enough to support a judgment in the plaintiff’s
favor if the employer remains silent will do, even if the
proof does not fit into a set of pigeonholes.” Carson v.
Bethlehem Steel Corp., 82 F.3d 157, 159 (7th Cir. 1996) (per
curiam); see also Leffel v. Valley Financial Services, 113
F.3d 787, 793 (7th Cir. 1997). “Despite the minutiae of
the various proof schemes set forth in McDonnell
Douglas . . . the straightforward question to be answered
in discrimination cases is whether the plaintiff has suc-
cessfully demonstrated that she was the victim
of . . . discrimination on the part of the employer.” Burns
v. Aaf-McQuay, Inc., 96 F.3d 728, 732-33 (4th Cir. 1996).
McDonnell Douglas creates an “exploding” presumption.
It puts pressure on the defendant to explain his motive
for the employment action of which the plaintiff com-
plains. Once the explanation is given, the presumption
falls away and the judge has to decide whether there is
enough evidence of unlawful conduct to entitle the plain-
tiff to a trial. There is some question about the literal
No. 06-3990 5
applicability of the McDonnell Douglas test in this case
because it is uncertain (though likely) that Palmer knew
that the plaintiff would have liked to be considered for
the Pontiac store. No matter; the defendant was unable to
give a coherent reason for appointing Jonland rather
than the plaintiff. Palmer gave inconsistent explanations,
on one occasion saying that Jonland “outshines you [the
plaintiff] in market appeal” and on another that she
would be better at improving “employee morale.” The
inconsistency is suggestive of pretext and thus is evidence
of discrimination, and it does not stand alone, but instead
reinforces the other evidence of a racial motive. A finding
of pretext can complete the prima facie case under
McDonnell Douglas, but it can also be independent evid-
ence of discrimination. St. Mary’s Honor Center v. Hicks,
509 U.S. 502, 511 (1993); Forrester v. Rouland-Borg Corp.,
453 F.3d 416, 417 (7th Cir. 2006).
Despite the weaknesses of some of the arguments made
by the plaintiff’s lawyer, it is apparent that the district
judge should not have granted summary judgment. A
reasonable jury, if the evidence gathered in the sum-
mary judgment proceedings were the evidence at a trial,
could find that the plaintiff was denied the promotion to
manage the store in Pontiac because he is black. The
evidence suggests that Palmer wanted to steer his highly
regarded black assistant manager to a store in a predomi-
nantly black, low-income neighborhood; when the plain-
tiff balked, Palmer suggested that he might prefer to
move to a big city, where there are more Walgreens stores.
There is no evidence that Jonland was more qualified to
manage the store in Pontiac than the plaintiff, who had
twice her experience as an assistant manager, the manda-
tory stepping stone to store manager. But she is white, and
6 No. 06-3990
the store is in a predominantly white neighborhood,
while the plaintiff is black and so was twice offered a
“black” store—and when the store manager’s job at the
“white” store fell vacant he was ignored. The sig-
nificance of Turley’s remark about racism in Pontiac lies in
the fact that as an experienced Walgreens store manager
(it appears that she had been one for at least four years)
she was undoubtedly aware of what Palmer was look-
ing for in a store manager in Pontiac, and one interpreta-
tion of the remark is that the plaintiff’s race would bar
him from consideration by Palmer. Cf. Collins v. Kibort,
143 F.3d 331, 335-36 (7th Cir. 1998); Village of Bellwood
v. Dwivedi, 895 F.2d 1521, 1530-31 (7th Cir. 1990). The
plaintiff would not feel “happy” among Pontiac’s white
racists, which is a standard euphemism for refusing a
job to someone of a different race from the people he
would be associating with. Cf. Phillips v. Joint Legislative
Committee, 637 F.2d 1014, 1028-29 (5th Cir. 1981). Racial
segregation is obviously a form of racial discrimination.
Collins v. Kibort, supra, 143 F.3d at 335-36.
Turley’s statement was an admission by Walgreen
because it was a statement about a matter within the
scope of her employment, Fed. R. Evid. 801(d)(2)(D)—
remember that she had been consulted by Palmer about
the appointment of a manager for the Pontiac store. And
this means that the plaintiff’s deposition testimony that
Turley had also told him that “race played a factor” in the
decision to appoint Jonland to manage the Pontiac store
was another admission that race had played a role in
Palmer’s decision to appoint Jonland rather than the
plaintiff. “[A] subordinate’s [in this case, the plaintiff’s]
account of an explanation of the supervisor’s [Turley’s]
understanding regarding the criteria utilized by manage-
No. 06-3990 7
ment in making decisions on hiring, firing, compensa-
tion, and the like is admissible against the employer,
regardless of whether the declarant has any involvement
in the challenged employment action.” Marra v. Philadelphia
Housing Authority, 497 F.3d 286, 298 (3d Cir. 2007); see also
Williams v. Pharmacia, Inc., 137 F.3d 944, 951 (7th Cir. 1998);
Hybert v. Hearst Corp., 900 F.2d 1050, 1053 (7th Cir. 1990);
Woodman v. Haemonetics Corp., 51 F.3d 1087, 1090-94
(1st Cir. 1995); Abrams v. Lightolier, Inc., 50 F.3d 1204, 1215-
16 (3d Cir. 1995).
We acknowledge that in apparent contradiction to the
passage from Marra and to the other decisions that we
have just cited (including our own Williams v. Pharmacia,
Inc.), some of our decisions say that “the declarant must
[for his evidence to be treated as an admission of his
employer] be involved in the decisionmaking process
affecting the employment action.” E.g., Keri v. Board of
Trustees of Purdue University, 458 F.3d 620, 630 (7th Cir.
2006); Young v. James Green Management, Inc., 327 F.3d 616,
622 n. 2 (7th Cir. 2003). But the contradiction dissolves
when we note the difference between “employment action”
and “decisionmaking process affecting the employment
action.” Turley was not involved in the employment
action—appointing Jonland to be the Pontiac store man-
ager. But unlike the witnesses in Keri and Young, she
was involved in the process that led up to that action, by
being consulted about the appointment. That was
enough to make her statement—which was confirmed,
moreover, by an internal investigation by Walgreen—an
admission by her employer. See Aliotta v. National Railroad
Passenger Corp., 315 F.3d 756, 761-62 (7th Cir. 2003); Marra
v. Philadelphia Housing Authority, supra, 497 F.3d at 298-99.
8 No. 06-3990
The trial may cast the facts in a different light; we do
not mean to prejudge the outcome. But there is enough
evidence of discrimination to entitle the plaintiff to a trial.
REVERSED AND REMANDED.
A true Copy:
Teste:
_____________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—12-26-07