Jin Ku Kim v. Nash Finch Co. ( 1997 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
____________
Nos. 95-2012/2074
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Jin Ku Kim, *
*
A p p e l l a n t / C r o s s - a p p e l l e e ,
*
*
Appeals from the United States
v . *
District Court for the
*
Northern District of Iowa
Nash Finch Company, *
*
A p p e l l e e / C r o s s - a p p e l l a n t .
*
____________
Submitted: December 14, 1995
Filed: August 20, 1997
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Before McMILLIAN and BEAM, Circuit Judges, and PERRY,*
District Judge.
____________
McMILLIAN, Circuit Judge.
Jin Ku Kim appeals from a final judgment entered in
the District Court1 for the Northern District of Iowa,
*The Honorable Catherine D. Perry, United States District Judge for the
Eastern District of Missouri, sitting by designation.
1
The Honorable Michael J. Melloy, Chief Judge, United States District Court for
the Northern District of Iowa.
upon a jury verdict, finding in his favor and against
Nash Finch Co. in his employment discrimination case but
reducing the amount of damages
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awarded by the jury. For reversal, Kim argues the
district court erred in denying his motion to amend the
pleadings to conform to the evidence under Fed. R. Civ.
P. 15(b) and in applying the Title VII cap, 42 U.S.C. §
1981a(b)(3), to limit compensatory and punitive damages.
On cross-appeal, Nash Finch argues the district court
erred in holding (1) Kim’s claim that he was unlawfully
denied a promotion from leadman to foreman in November
1990 was actionable under 42 U.S.C. § 1981, (2) there was
sufficient evidence of intentional discrimination, (3)
there was sufficient evidence of retaliation, (4) there
was sufficient evidence of malice or reckless
indifference to support punitive damages, and (5) the
jury verdict awarding damages for lost wages and
compensatory damages was supported by sufficient evidence
or, in the alternative, was not excessive. For the
reasons discussed below, we affirm the judgment of the
district court.
BACKGROUND FACTS
Nash Finch is a wholesale and retail food
distributor. In 1978 Kim, an American citizen of Korean
ancestry, began working as a grocery picker in Nash
Finch’s Cedar Rapids warehouse. A superintendent runs
the warehouse. During the period of time at issue Bill
Mund was the warehouse superintendent. The four
warehouse departments-- receiving, shipping, maintenance,
and transportation-- are each supervised by a salaried
“foreman.” By October 1979, Kim was one of six hourly
“leadmen” who assisted the warehouse shipping foreman;
Kim also acted as shipping foreman on Saturdays and
filled in when the shipping foreman was absent. The
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shipping department has 80-90 employees; the full
shipping crew can consist of up to 70 employees; on
Saturdays, however, the shipping crew is smaller, about
25-40 employees. For more than 10 years, Kim received
“superior” or “outstanding” annual performance
evaluations.
The position of shipping foreman became vacant in
November 1990 and in April 1992. Kim applied for both
vacancies, but in each instance Nash Finch promoted
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someone else. The individual promoted in November 1990
was white, younger than Kim, had less than a year’s
experience as a leadman, had been trained by Kim, and had
no formal education beyond high school. The individual
promoted in April 1992 was white, younger than Kim, had
not worked in the warehouse for 10 years, had been
trained by Kim, and had no formal education beyond high
school. In comparison, Kim was a college graduate and
the senior leadman in the shipping department. Nash
Finch told Kim that he had not been promoted because of
his inability to control costs and manhours, lack of
aggressiveness, difficulty in controlling large crews,
and poor temperament. When Kim objected to being passed
over for promotion, the Nash Finch EEO compliance officer
advised Kim to file a complaint or consult a lawyer. In
May 1992 Kim filed an employment discrimination charge
against Nash Finch with the Iowa Human Rights Commission
and the Equal Employment Opportunity Commission, alleging
Nash Finch unlawfully failed to promote him in November
1990 and in April1992 on the basis of race, national
origin and age.
According to Kim, immediately after he filed his
employment discrimination charge in May 1992, Nash Finch
began to systematically retaliate against him. For
example, Nash Finch supervisors no longer assigned Kim to
fill in for the shipping foreman, gave him much lower
performance evaluations, orally warned him about his poor
“attitude” (toward management), characterized him as
unwilling to assume more job responsibility when he
declined a Sunday shipping crew assignment, placed him
under constant surveillance at work, and excluded him from
meetings at work. Nash Finch mischaracterized a September
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1992 incident involving Kim and another employee as
race-based, gave Kim a written reprimand about the
incident, and placed the written reprimand in Kim’s
personnel file. Kim alleged Nash Finch fabricated the
race basis of the incident in order to discredit him when
the local civil rights commission was investigating his
(Kim’s) employment discrimination charge. In November
1992, after another incident involving a co-worker and
another meeting with management, Nash Finch issued Kim a
written reprimand about the incident. During the summer
and fall of 1993, Nash Finch reviewed its warehouse
operations with the
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assistance of a consultant and discovered what it
regarded as productivity problems, particularly with
respect to the Saturday shipping crew, which Kim
supervised, and required Kim to attend special retraining
in order to improve productivity on Saturdays. Kim
regarded this special retraining as punitive and
humiliating in light of his status as a leadman,
seniority and experience.
Kim continues to work for Nash Finch and has not been
discharged, demoted, reduced in compensation, or
reassigned; however, as noted above, he has received oral
and written reprimands and has been required to attend
special retraining. Brief for Appellee/ Cross-Appellant
at 1.
DISTRICT COURT PROCEEDINGS
In November 1992 Kim received a right-to-sue letter
and filed this lawsuit in federal district court. In
count I Kim alleged that Nash Finch unlawfully
discriminated against him on the basis of race, color,
national origin, and age when it failed to promote him to
the position of shipping foreman in April 1992 in
violation of Title VII of the Civil Rights Act of 1964
(Title VII), as amended, 42 U.S.C. § 2000e, and the Age
Discrimination in Employment Act (ADEA), as amended, 29
U.S.C. § 621 et seq. In count II Kim alleged that Nash
Finch unlawfully discriminated against him on the basis
of race, color, national origin, and age when it failed
to promote him to the position of shipping foreman in
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November 1990 in violation of 42 U.S.C. § 1981.2 In count
III Kim alleged that Nash Finch unlawfully retaliated
against him for filing an employment discrimination
charge in violation of Title VII, 42 U.S.C. § 2000e-3(a).
Kim sought back pay, promotion and other equitable
relief, and compensatory and
2
This claim was not barred by the two-year statute of limitations under Iowa
Code Ann. § 614.1(2) (West Supp. 1997) because the failure-to-promote occurred on
November 18, 1990, and the complaint was filed on November 16, 1992.
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punitive damages, as well as attorney’s fees and costs,
including expert witness fees.
Nash Finch filed a motion for summary judgment,
asserting that Kim had not been promoted because he had
no transportation experience and because of his
relatively weak management skills. The district court
denied the motion for summary judgment and in September
1994 the case was tried to a jury. At trial Mund
testified that he never seriously considered Kim for
promotion because Kim lacked personal loyalty to him
(Mund). Kim, his wife and his son testified about how
Kim had suffered physically and emotionally from his
adverse treatment by Nash Finch. Kim developed high
blood pressure and headaches from stress and became
anxious, withdrawn and depressed; he had difficulty
sleeping and felt humiliated and ostracized at work.
In special verdicts, the jury found Nash Finch had
discriminated against Kim on the basis of race but not
age in failing to promote him to shipping foreman in
November 1990 and in April 1992, and had retaliated
against him for filing employment discrimination charges.
The jury awarded Kim $15,000 in lost wages and benefits
and $100,000 in non-economic damages (for emotional
distress and loss of enjoyment of life) for the 1990
promotion claim, $21,000 in lost wages and benefits and
$150,000 in non-economic damages for the 1992 promotion
claim, and $1.5 million in non-economic damages for the
retaliation claim. Finally, the jury awarded Kim $7
million in punitive damages. The special verdict
permitted the jury to award punitive damages for either
the 1992 promotion or the retaliation claim. Both
parties filed post-trial motions.
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The district court denied Nash Finch’s motion for
judgment as a matter of law or, in the alternative, for
new trial, reduced the damages award, granted in part
Kim’s motion for equitable relief (for promotion to
shipping foreman when available and front pay at the rate
of $447 per month), denied Kim’s motion for prejudgment
interest, granted Kim’s motion for attorney’s fees and
expenses, and entered judgment accordingly. Jin Ku Kim
v. Nash Finch Co., No. C92-0204 (N.D. Iowa Apr. 13, 1995)
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(opinion and order). The district court held the
evidence was sufficient to support the jury’s finding
that Nash Finch had intentionally discriminated against
Kim on the basis of race, color or national origin when
it failed to promote him in November 1990 and in April
1992. Slip op. at 4-6. The district court also held the
evidence was sufficient to support the jury’s finding
that Nash Finch had retaliated against Kim for filing an
employment discrimination charge. Id. at 6-10. The
district court also held that the evidence was sufficient
to support the jury’s finding that Nash Finch had acted
with malice or reckless indifference to Kim’s federally
protected right not to be retaliated against for filing
a civil rights complaint. Id. at 11-12.
As discussed below, the parties disputed whether the
1992 promotion and retaliation claims were submitted
under both Title VII and 42 U.S.C. § 1981 or only Title
VII. The district court found that Kim had waived any
argument that these claims had been brought under both
statutes because Kim did not object to the jury
instructions and the special verdict forms which
submitted the 1992 promotion and retaliation claims under
Title VII without referring to 42 U.S.C. § 1981. Id. at
15 (noting plaintiff failed to object to jury
instructions). The district court also held that the
Title VII statutory damages cap applied, thus limiting
the award for non-economic damages and punitive damages
for those claims to a maximum of $300,000. Id. at 16
(jury awarded $150,000 for the 1992 promotion claim and
$1.5 million for the retaliation claim and $7 million in
punitive damages; it was not disputed that Nash Finch has
more than 500 employees; see 42 U.S.C. § 1981a(b)(4)
($300,000 maximum for compensatory and punitive
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damages)). The district court did not review the
punitive damages award for excessiveness. Id. at 14
(noting nonetheless that $300,000 was not excessive in
view of duration of discrimination, level of retaliation
and financial well-being of employer).3 This appeal and
cross-appeal followed.
3
The district court reduced the jury verdict to a total of $421,000 ($21,000 for
lost wages, $100,000 for compensatory damages for the 1990 promotion, and $300,000
for compensatory and punitive damages for the 1992 promotion and the retaliation
claims). The district court also ordered front pay ($447 per month), promotion to the
next available foreman position (plus seniority from November 1990), attorney’s fees,
costs and expenses, and post-judgment interest.
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ACTIONABLE § 1981 CLAIM-- 1990 PROMOTION
Nash Finch argues the district court erred in denying
its motion for judgment as a matter of law on the 1990
promotion claim. Nash Finch argues the 1990 promotion
claim is not actionable under 42 U.S.C. § 1981 because
the promotion from leadman to foreman did not involve a
significant change in duties, compensation or
responsibility. We disagree.
In Patterson v. McLean Credit Union, 491 U.S. 164,
176-77, 182 (1989) (Patterson), the Supreme Court held 42
U.S.C. § 1981 prohibited racial discrimination in the
formation of an employment contract but did not apply to
“problems that may arise later from the conditions of
continuing employment,” that is, in the employment
relationship. After Patterson, courts held that claims
alleging discriminatory discharge could not be brought
under § 1981. E.g., Taggart v. Jefferson County Child
Support Enforcement Unit, 935 F.2d 947, 948 (8th Cir.
1991) (banc). Congress later enacted the Civil Rights
Act of 1991 in part to correct what it regarded as the
Court’s erroneous construction of the scope of 42 U.S.C.
§ 1981 in Patterson. In § 101(2)(b) of the Act, 42
U.S.C. § 1981(b), Congress redefined the term “make and
enforce contracts” specifically to include “the making,
performance, modification, and termination of contracts,
and the enjoyment of all benefits, privileges, terms, and
conditions of the contractual relationship.” The 1991
Act became effective on November 21, 1991. However, in
Rivers v. Roadway Express, Inc., 511 U.S. 298 (1994), the
Supreme Court held that § 101 should not be applied
retroactively to pending cases or pre-enactment conduct.
For this reason, Patterson and not the 1991 Act applies
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to the 1990 claim because it occurred before November 21,
1991, the effective date of the 1991 Act.
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Patterson held that the denial of a promotion is not
actionable under § 1981 unless “the promotion rises to
the level of an opportunity for a new and distinct
relation between the employee and the employer.” 491
U.S. at 185, citing Hishon v. King & Spaulding, 467 U.S.
69 (1984) (challenging refusal of law firm to promote
associate to partnership under Title VII). Not every
refusal to promote violates Patterson because “each step
down the path of one’s career does not create a new and
distinct relation with the employer for purposes of the
Patterson test.” Fray v. Omaha World Herald Co., 960
F.2d 1370, 1373 (8th Cir. 1992) (footnote omitted).
“[Patterson] strongly suggests that, in addition to an
increase in pay and duties, an actionable promotion claim
must involve a meaningful, qualitative change in the
contractual relationship.” Sitgraves v. Allied-Signal,
Inc., 953 F.2d 570, 573 (9th Cir. 1992) (noting as
examples of actionable promotion claim moves from
non-supervisory to supervisory position and from hourly
to salaried compensation); see Rodriguez v. General
Motors Corp., 27 F.3d 396, 399-400 (9th Cir. 1994)
(holding essentially lateral change not actionable
refusal to promote); Butts v. City of New York Department
of Housing Preservation & Development, 990 F.2d 1397,
1411-12 (2d Cir. 1993) (Butts) (noting inquiry should not
be confined to job titles but should examine actual
changes in responsibility and status); cf. Winbush v.
Iowa, 66 F.3d 1471, 1477 (8th Cir. 1995) (issue noted but
not decided).
We agree with the district court that the promotion
from leadman to foreman involved a sufficiently new and
fundamentally different contractual relationship to
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constitute an actionable promotion claim under § 1981.
This was not the kind of promotion “understood by the
parties to be given routinely upon satisfactory job
performance.” Butts, 990 F.2d at 1412. Nor was it the
kind of promotion that involved merely “moving an employee
from one position to another as part of a reallocation of
personnel resources, not involving a substantial increase
in status or responsibility.” Id. The promotion involved
a change from limited supervisory duties and limited
authority over employees to additional supervisory duties
and greater authority, from hourly to salaried
compensation, and from non-management to management
status, as
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well as an increase in pay and a change of position in the
chain of authority. There were many leadman positions
(six in the shipping department alone) but only four
foreman positions, each in charge of one department in the
warehouse, who reported directly to the superintendent.
Unlike leadmen, foremen performed traditional supervisory
functions like making work assignments, planning and the
hiring, evaluation and discipline of employees. The
relatively modest difference in pay between the two
positions and the supervisory nature of both positions did
not outweigh the other factors. The district court did
not err in denying Nash Finch’s motion for judgment as a
matter of law on the 1990 promotion claim.
INTENTIONAL DISCRIMINATION
Nash Finch next argues Kim failed as a matter of law
to make a submissible case that he was not promoted in
1990 and 1992 because of intentional discrimination on the
basis of race, color or national origin. This argument
has two points. First, Nash Finch argues instruction No.
12 incorrectly permitted the jury to find in favor of Kim
if it found only that Nash Finch’s asserted legitimate,
nondiscriminatory reason for not promoting him was false.
Nash Finch argues that the instruction failed to require
the jury to find that the asserted reason was a pretext
for intentional discrimination. Nash Finch also argues
there was insufficient evidence of intentional
discrimination, that is, that it failed to promote Kim
because of race, color or national origin. In sum, Nash
Finch argues that Kim failed to show that its articulated
legitimate, nondiscriminatory reason was false and that,
even assuming it was false, such a finding alone cannot
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support a finding of intentional discrimination. Nash
Finch’s argument correctly states the applicable law;
however, we hold the instruction was not erroneous and the
evidence was sufficient to support the jury’s verdict that
Nash Finch intentionally discriminated against Kim.
The analysis applicable to Title VII disparate
treatment and 42 U.S.C. § 1981 claims in employment cases
is the familiar three-part framework initially set out in
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McDonnell Douglas Corp. v. Green, 411 U.S. 792, 800-06
(1973) (McDonnell Douglas), and further refined in Supreme
Court cases, most recently St. Mary’s Honor Center v.
Hicks, 509 U.S. 502 (1993) (Hicks). This court recently
clarified the analysis in Ryther v. KARE 11, 108 F.3d 832,
836 (8th Cir.) (banc) (Ryther), cert. denied, 117 S. Ct.
2510 (1997). The elements of a Title VII disparate
treatment claim and a § 1981 claim are identical. Hicks,
509 U.S. at 506 n.1 (noting McDonnell Douglas framework
also applies to claims of purposeful employment
discrimination on the basis of race under 42 U.S.C. §
1983). First, the plaintiff must establish a prima facie
case. Second, if the plaintiff establishes a prima facie
case, the defendant must “rebut the presumption of
discrimination [raised by the prima facie case] by
producing evidence that the plaintiff was rejected, or
someone else was preferred, for a legitimate,
nondiscriminatory reason.” Texas Department of Community
Affairs v. Burdine, 450 U.S. 248, 254 (1981) (Burdine)
(noting the employer must only articulate legitimate,
nondiscriminatory reason, but need not persuade the
factfinder that it was actually motivated by the proffered
reasons). Third, if the defendant carries this burden,
the plaintiff is entitled to the opportunity to show that
the defendant’s articulated reason was in fact “not the
true reason for the employment decision” and a “pretext
for discrimination.” Id. at 256; see Hicks, 509 U.S. at
216 & n.6 (“pretext for discrimination” means both that
the proffered reason was false and that discrimination was
the real reason).
“This burden [of demonstrating that the proffered
reason was not the true reason for the employment
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decision] now merges with the ultimate burden of
persuading the [trier of fact] that [the plaintiff] has
been the victim of intentional discrimination.” Burdine,
450 U.S. at 256. The plaintiff can establish that he or
she has been the victim of intentional discrimination
“either directly by persuading the [trier of fact] that a
discriminatory reason more likely motivated the employer
or indirectly by showing that the employer’s proffered
explanation is unworthy of credence.” Id.
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The factfinder’s disbelief of the reasons put
forward by the defendant (particularly if
disbelief is accompanied by a suspicion of
mendacity) may, together with the elements of
the prima facie case, suffice to show
intentional discrimination. Thus, rejection of
the defendant’s proffered reasons, will permit
the trier of fact to infer the ultimate fact of
intentional discrimination, and . . . , upon
such rejection, “[n]o additional proof of
discrimination is required.”
Hicks, 509 U.S. at 511 (footnote omitted).
Thus, according to Hicks, when the
plaintiff’s evidence . . . challenges the
defendant’s articulated nondiscriminatory
reason, such evidence may serve as well to
support a reasonable inference that
discrimination was a motivating reason for the
employer’s decision. As the Supreme Court has
observed, “when all legitimate reasons for
rejecting an applicant have been eliminated as
possible reasons for the employer’s actions, it
is more likely than not the employer, who we
generally assume acts only with some reasons,
based [its] decision on an impermissible
consideration such as [race].”
. . . .
In sum, when the employer produces a
nondiscriminatory reason for its actions, the
prima facie case no longer creates a legal
presumption of unlawful discrimination. The
elements of the prima facie case remain,
however, and if they are accompanied by evidence
[showing that the defendant’s proffered
explanation is false] and disbelief of the
defendant’s proffered explanation, they may
permit the jury to find for the plaintiff. This
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is not to say that, for the plaintiff to
succeed, simply proving [that the defendant’s
proffered explanation is false] is necessarily
enough. We emphasize that evidence [that the
defendant’s proffered explanation is false] will
not be enough to make a submissible case if it
is, standing alone, inconsistent with a
reasonable inference of [unlawful]
discrimination. [T]he plaintiff must still
persuade the jury, from all the facts and
circumstances, that the employment decision was
based upon intentional discrimination.
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Ryther, 108 F.3d at 836-38 (citation and footnotes
omitted). “Thus, Hicks makes it clear that the plaintiff
must show ‘both that the [proffered] reason was false,
and that discrimination was the real reason.’” Id. at
838 n.5, citing Hicks, 509 U.S. 515. “It is not enough,
in other words, to disbelieve the employer; the
factfinder must believe the plaintiff’s explanation of
intentional discrimination.” Hicks, 509 U.S. at 519.
Jury Instructions
We address the instruction issue first. “[W]e review
the district court’s jury instructions for abuse of
discretion and on review must determine simply ‘whether
the instructions, taken as a whole and viewed in light of
the evidence and applicable law, fairly and adequately
submitted the issues in the case to the jury.’” Karcher
v. Emerson Electric Co., 94 F.3d 502, 510 (8th Cir. 1996)
(citing Sherbert v. Alcan Aluminum Corp., 66 F.3d 965,
968 (8th Cir. 1995)), cert. denied, 117 S. Ct. 1692, 1693
(1997). “[W]e will not find error in instructions simply
because they are technically imperfect or are not a model
of clarity.” Hastings v. Boston Mutual Life Insurance
Co., 975 F.2d 506, 510 (8th Cir. 1992). We will reverse
only if we find that “the jury instructions contained an
error or errors that affected the substantial rights of
the parties.” Id.
Instruction No. 12 provided in part that “[a] false or
pretextual reason for the decision not to promote the
plaintiff is one form of evidence from which you may, but
are not required, to find that the defendant discriminated
against the plaintiff.” Nash Finch argues that this part
of instruction No. 12 improperly permitted the jury to
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find in favor of Kim if it found only that Nash Finch’s
asserted legitimate, nondiscriminatory reason for not
promoting him was false. We disagree because, when read
as a whole, instruction No. 12 correctly set forth the
applicable law. The paragraph immediately preceding the
sentence to which Nash Finch objected provided that “you
may find Defendant Nash Finch intentionally discriminated
against Plaintiff Jin Kim if you reject the Defendant’s
stated reasons for not promoting him and you find
Defendant’s stated reasons for its decision not to promote
Plaintiff were given to hide an intent by Nash
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Finch to discriminate on the basis of his race, color or
national origin.” This part of instruction No. 12
correctly instructed the jury, as required by Hicks, that
it had to find both that the stated reason was false and
that intentional discrimination on the basis of race was
the real reason in order to return a verdict in favor of
Kim, not only that the stated reason was false. Ryther,
108 F.3d at 838 & n.5 (noting Hicks makes it clear that
the plaintiff must show both that the reason was false and
that intentional discrimination was the real reason). The
instructions for the 1990 promotion claim (No. 9) and the
ADEA claim (No. 14) similarly provided that the jury could
find race or age was a determining factor if it found Nash
Finch’s stated reason for its decision was “not the true
reason, but [was] a ‘pretext’ to hide discriminatory
motivation.” These instructions correctly premised
liability on a finding of discrimination and not merely on
a finding that Nash Finch’s proffered reason was false.
Sufficiency of the evidence-- failure to promote
Next, we address the sufficiency of the evidence.
Nash Finch argues that it is entitled to judgment as a
matter of law because Kim failed to make a submissible
case that racial discrimination motivated the decisions
not to promote him. Nash Finch argues that there was
evidence that its proffered reason was false but no
evidence of racial discrimination. We disagree.
“[W]e will not reverse a jury’s verdict for
insufficient evidence unless, after viewing the evidence
in the light most favorable to the verdict, we conclude
that no reasonable juror could have returned a verdict for
the non-moving party.” Ryther, 108 F.3d at 836. Our role
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on appeal is to determine whether there is an evidentiary
basis for the jury’s verdict. Id. at 844-45. “[W]hen
that evidentiary basis becomes apparent, it [is]
immaterial that the court might draw a contrary inference
or feel that another conclusion is more reasonable.”
Lavender v. Kurn, 327 U.S. 645, 653 (1946). “Whether an
issue was properly before the jury, however, is a legal
question which is
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reviewed de novo.” Kimzey v. Wal-Mart Stores, Inc., 107
F.3d 568, 573 (8th Cir. 1997) (citation omitted).
We have reviewed the evidence in the light most
favorable to Kim as the prevailing party, assumed that all
conflicts in the evidence were resolved in his favor,
assumed as proved all facts that his evidence tended to
prove, and given him the benefit of all reasonable
inferences that may reasonably be drawn from the facts
proved. We hold the record as a whole-- specifically, the
combination of the undisputed evidence as to the elements
of the prima facie case and the strong evidence that Nash
Finch’s proffered reason was false, which, when considered
with the strong evidence of retaliation-- clearly provided
sufficient evidence as a matter of law to allow the jury
to find Nash Finch intentionally discriminated against Kim
on the basis of race in failing to promote him. This
reasonable inference is the logical result of the
application to the evidence of the McDonnell Douglas
analytical framework for the allocation of the burden of
production and the order for the presentation of proof.
It was not disputed that Kim established a prima facie
case: (1) Kim was a member of a racial minority, (2) he
was qualified for promotion, (3) he was not promoted, and
(4) Nash Finch promoted a non-minority. The prima facie
case created a legal presumption of unlawful
discrimination. Because Nash Finch articulated
nondiscriminatory reasons for promoting someone else, the
legal presumption of unlawful discrimination, created by
the prima facie case, then dropped out of the case.
However, the elements of the prima facie case remained in
the case. The evidence refuted Nash Finch’s articulated
nondiscriminatory reasons and strongly suggested that Nash
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Finch had lied about those reasons. Nash Finch conceded
at trial that Kim was qualified for promotion but argued
the successful candidates were better qualified. There
was evidence that Kim was relatively better qualified for
promotion in terms of education, seniority and supervisory
experience than the successful candidates. There was also
evidence from which the jury could conclude that Nash
Finch’s managers were not particularly credible. Mund
initially told Kim that the 1990 promotion had
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been made at a higher level even though Mund had made the
decision himself. Mund then told Kim that he had not been
promoted because he was not qualified. However, Mund
testified at trial that he never seriously considered Kim
for promotion because Kim lacked personal loyalty to him
(Mund).
The evidence challenged Nash Finch’s articulated
nondiscriminatory reasons for not promoting Kim and
supported a reasonable inference that unlawful
discrimination was a motivating reason for Nash Finch’s
failure to promote Kim. This evidence was sufficient to
permit the jury to infer the ultimate fact of intentional
discrimination. Hicks, 509 U.S. at 511; Ryther, 108 F.3d
at 836-37. This is because “when all legitimate reasons
for rejecting an applicant have been eliminated as
possible reasons for the employer’s actions, it is more
likely than not the employer, who we generally assume acts
only with some reasons, based [its] decision on an
impermissible consideration such as race.” Furnco
Construction Co. v. Waters, 438 U.S. 567, 577 (1978).
This is not a case in which the evidence showing the
employer’s proffered reason was false was inconsistent
with a reasonable inference of unlawful discrimination.
Here, Nash Finch contended the real reason Kim was not
promoted was that the successful candidates were better
qualified. Kim’s evidence showed that the proffered
reason was false; it did not show that some reason other
than unlawful discrimination was the real reason he was
not promoted. See Ryther, 108 F.3d at 837 n.4 (discussing
cases in which evidence showing employer’s proffered
reason was false was inconsistent with reasonable
inference of unlawful discrimination and citing Rothmeier
v. Investment Advisers, Inc., 85 F.3d 1328, 1337 (8th Cir.
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1996) (evidence showed real reason for discharge was
confrontation about SEC violations), Barber v. American
Airlines, Inc., 791 F.2d 658, 660 (8th Cir.) (evidence
showed real reason for disparate treatment was not age
discrimination), cert. denied, 479 U.S. 885 (1986), and
Visser v. Packer Engineering Assocs., 924 F.2d 655, 657
(7th Cir. 1991) (banc) (explaining “pretext” in employment
law means a reason that employer offers for action claimed
to be discriminatory and that factfinder disbelieves,
allowing inference that employer is trying to conceal a
discriminatory reason and not some other unethical
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reason or even a mask for such a reason; evidence showed
that plaintiff was fired because he was disloyal to CEO;
thus real, albeit unethical, reason for firing was not age
discrimination but plaintiff’s loyalty to company rather
than to CEO personally)).
In addition to the elements of the prima facie case
and the evidence showing Nash Finch’s proffered reason was
false, there was also evidence that, out of more than
3,500 employees, only 2 management employees in 25 years
were non-white. Those employees were not warehouse
supervisory employees; they were assistant retail grocery
store managers. There was also evidence that the only
Asian-American employee at the Cedar Rapids warehouse
other than Kim was employed as a janitor. There was also
some evidence that Nash Finch disciplined Kim more
severely than non-Asian employees for comparable incidents
and that the disciplinary action was in retaliation for
his filing discrimination charges. As noted above, direct
evidence of intentional discrimination was not required;
case law recognizes that intentional discrimination may be
proven by circumstantial evidence because “[t]here will
seldom be ‘eyewitness’ testimony as to the employer’s
mental processes.” United States Postal Service Board of
Governors v. Aikens, 460 U.S. 711, 714 n.3 (1983). “After
all, the McDonnell Douglas framework exists to provide
discrimination plaintiffs a way to prove their case when
they do not have ‘explicit, inculpatory evidence of
discriminatory intent.’” Shannon v. Ford Motor Co., 72
F.3d 678, 682 (8th Cir. 1996), citing Hutson v. McDonnell
Douglas Corp., 63 F.3d 771, 776 (8th Cir. 1995).
In sum, the record as a whole in this case-- the
evidence showing that Nash Finch’s proffered reason was
false, plus the evidence establishing the elements of the
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prima facie case-- was sufficient to permit the jury
reasonably to find that Nash Finch intentionally
discriminated against Kim on the basis of race in refusing
to promote him to shipping foreman in November 1990 and in
April 1992. Consistent with Hicks, no additional evidence
of discrimination was required. The evidence in this case
presented inconsistent inferences to the jury, and the
resolution of this conflicting evidence was a matter for
the jury to resolve. E.g., Ryther, 108 F.3d at 845
(citing cases). The
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district court did not err in denying Nash Finch’s motion
for judgment as a matter of law on the discrimination
claims.
RETALIATION
Nash Finch next argues Kim failed to make a
submissible retaliation claim. Nash Finch argues that, as
a matter of law, Kim suffered no adverse employment action
because he was not demoted, terminated, reassigned, or
suspended, did not lose any compensation or privileges,
and in fact is still employed by Nash Finch. Nash Finch
also argues that, assuming there was an adverse employment
action, there was no evidence of a causal relationship
between to Kim’s filing a race discrimination charge and
any adverse employment action. Nash Finch also argues
that any adverse employment action was justified under the
circumstances.
Like the substantive claim of racial discrimination,
a claim of retaliation, in a racial discrimination
context, can violate both Title VII and 42 U.S.C. § 1981.
Setser v. Novack Investment Co., 638 F.2d 1137, 1146-47
(8th Cir. 1981) (Setser) (subsequent history omitted)
(holding retaliation by employer against plaintiff for
filing race-based EEOC complaint would be based on racial
discrimination for purposes of 42 U.S.C. § 1981 claim);
see also Greenwood v. Ross, 778 F.2d 448, 455-56 (8th Cir.
1985); Sisco v. J.S. Alberici Construction Co., 655 F.2d
146, 150 (8th Cir. 1981) (applying Setser), cert. denied,
455 U.S. 976 (1982). We apply the same McDonnell Douglas
analytical framework to a retaliation claim under § 1981
and Title VII. See, e.g., Evans v. Kansas City, Missouri,
School District, 65 F.3d 98, 101 (8th Cir. 1995) (§ 1981
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retaliation claim), cert. denied, 116 S. Ct. 1319 (1996);
Kobrin v. University of Minnesota, 34 F.3d 698, 704 (8th
Cir. 1994) (Title VII retaliation claim) (Kobrin). The
elements of a retaliation claim under § 1981 and Title VII
are (1) protected activity, (2) subsequent adverse
employment action, and (3) a causal relationship between
the two. See Barge v. Anheuser-Busch, Inc., 87 F.3d 256,
259 (8th Cir. 1996) (§ 1981 retaliation claim); Kobrin, 34
F.3d at 704 (Title VII retaliation claim).
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Adverse employment action
Nash Finch argues that the district court erred in
denying its motion for judgment as a matter of law because
Kim failed to show any adverse employment action. Nash
Finch argues Kim was not demoted, terminated, reassigned,
or suspended, did not lose any compensation or privileges,
and in fact is still employed by Nash Finch. We hold Nash
Finch’s actions did rise to the level of adverse
employment action.
Typically, it is obvious whether an employer took
adverse employment action when, for example, the employee
has been terminated or discharged. However, retaliatory
conduct may consist of “action less severe than outright
discharge.” Dortz v. City of New York, 904 F. Supp. 127,
156 (S.D.N.Y. 1995) (allegations that employer’s actions
disadvantaged and interfered with employee’s ability to
perform her job). What happened to Kim was much “‘more
disruptive than a mere inconvenience or an alteration of
job responsibilities’ [or] [c]hanges in duties or working
conditions that cause no materially significant
disadvantage.” Harlston v. McDonnell Douglas Corp., 37
F.3d 379, 382 (8th Cir. 1994) (citation omitted) (no
adverse employment action where plaintiff was reassigned
without diminution in title, salary or benefits); see
Thomas v. St. Luke’s Health Systems, Inc., 869 F. Supp.
1413, 1435 (S.D. Iowa 1994) (holding employer’s initial
demands that employee take drug test, which was
subsequently withdrawn, and accept another position had no
impact on continued employment and did not rise to level
of adverse employment action), aff’d, 61 F.3d 908 (8th
Cir. 1995) (table) (No. 94-4081). Kim’s duties had been
reduced; he received much lower performance evaluations
-35-
than he had received before filing his employment
discrimination charge; he was required to undergo special
remedial training. There was also evidence that Nash
Finch had “papered” his personnel file with negative
reports, including two written reprimands. These are the
kind of serious employment consequences that adversely
affected or undermined Kim’s position, even if he was not
discharged, demoted or suspended.
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In any event, we need not decide in the present case
whether each act in itself constituted actionable “adverse
employment action” because Kim essentially claimed that
Nash Finch had systematically retaliated against him, that
is, that all the acts were taken in response to his filing
the employment discrimination charge and were thus
connected to one another. Cf. Caliendo v. Bentsen, 881 F.
Supp. 44, 48 (D.D.C. 1995) (alleging personnel actions
such as removal from undercover operation, failure to
receive monetary award, removal as acting group
supervisor, receipt of letter of reprimand, etc.
constituted series of adverse employment actions in
retaliation for EEOC activities). We hold that, as a
matter of law, Nash Finch’s conduct, which included
reduction of duties, disciplinary action and negative
personnel reports, as well as required remedial training,
constituted adverse employment action.
Sufficiency of the evidence
Nash Finch also argues that the district court erred
in denying its motion for judgment as a matter of law
because there was no evidence of a causal connection
between Kim’s filing a race discrimination charge and any
adverse employment action and that any adverse employment
action was justified under the circumstances. We have
reviewed the evidence in the light most favorable to Kim
as the prevailing party, assumed that all conflicts in the
evidence were resolved in his favor, assumed as proved all
facts that his evidence tended to prove, and given him the
benefit of all reasonable inferences that may reasonably
be drawn from the facts proved. We hold the record as a
whole-- specifically, the elements of the prima facie case
and the evidence showing that Nash Finch’s proffered
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reason was false-- provided a sufficient basis from which
reasonable jurors could find that Nash Finch retaliated
against Kim for filing an employment discrimination
charge. This permissible inference is the logical result
of the application to the evidence of the McDonnell
Douglas analytical framework for the allocation of the
burden of production and the order for the presentation of
proof.
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Filing an employment discrimination charge is activity
protected by Title VII, §704(a), 42 U.S.C. § 2000e–3(a).
Nash Finch knew in May 1992 that Kim had filed an
employment discrimination charge. In fact, Nash Finch
justified disclosure of Kim’s personnel file, which
contained a report of a disciplinary action based on a
race-related incident, as part of its response to the
local civil rights commission investigation. Kim had
received high performance evaluations and had had no
disciplinary problems. However, after Kim filed the
employment discrimination charge, his Saturday and fill-in
shipping foreman duties were immediately eliminated, he
began to receive markedly lower performance evaluations,
he was orally cautioned about a poor attitude toward
management, he was placed under surveillance and excluded
from meetings at work, he was disciplined following a
September 1992 incident in which Nash Finch found Kim had
made racial slurs against a co-worker, and in late 1993 he
was required to participate in special remedial training.
This circumstantial evidence-- that the employer was aware
of the protected activity and that adverse employment
action “followed the protected activity so closely in time
as to justify an inference of retaliatory motive”-- was
sufficient to establish the requisite causal connection
between the protected activity and the adverse employment
action. Rath v. Selection Research, Inc., 978 F.2d 1087,
1090 (8th Cir. 1992); see Kobrin, 34 F.3d at 704; cf.
Barge v. Anheuser-Busch, Inc., 87 F.3d at 259-60 (holding
plaintiff failed to make prima facie case of retaliation
because she produced no evidence connecting her prior EEOC
claim to alleged harassment, denial of assistance with
job-related tasks, or denial of disability benefits).
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Nash Finch defended its post-May 1992 actions as a
legitimate, continuing “dialogue” between an employee and
management about adherence to company work rules and
respect for company equal employment opportunity policies.
However, Kim produced evidence that refuted the negative
reports in his personnel file, including evidence that
Nash Finch had “papered” his personnel file with negative
reports. Some of the negative reports involved petty and
insignificant incidents; however, some of the negative
reports supported Nash Finch’s claim that Kim lacked
management ability and
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had refused opportunities for additional supervisory
responsibility. More seriously, as noted above, there was
evidence that the initial reports about the September 1992
incident did not include any reference to racial
discrimination. However, in November 1992, after Kim had
requested a right-to-sue letter, senior management issued
a written reprimand to Kim about the September 1992
incident. This written reprimand specifically described
the racial context of the incident and stated that the
company would not tolerate discrimination which would be
in violation of Title VII and that Kim’s actions had
probably violated his co-worker’s civil rights. The jury
could have reasonably found that Nash Finch placed the
written reprimand in Kim’s personnel file in order to
discredit Kim when the local civil rights commission was
investigating his employment discrimination charge. There
was also evidence that Nash Finch did not handle in the
same way a similar dispute about work assignments
involving the same co-worker and another foreman and a
complaint about sexual harassment by another employee.
Unlike the incident involving Kim, these incidents did not
result in written reprimands.
In sum, we hold the evidence as a whole-- evidence
that the employer’s proffered reasons were false, as well
as the evidence establishing the elements of the prima
facie case-- was sufficient to permit the jury to find the
ultimate fact of retaliation. Consistent with Hicks, no
additional evidence of retaliation was required. The
evidence in this case presented inconsistent inferences to
the jury, and the resolution of this conflicting evidence
was a matter for the jury to resolve. The district court
did not err in denying Nash Finch’s motion for judgment as
a matter of law on the retaliation claim.
-41-
AMENDMENT OF PLEADINGS
This is Kim’s principal contention on appeal. Kim
argues the district court abused its discretion in denying
his motion to amend his pleadings to conform to the
evidence under Fed. R. Civ. P. 15(b) by adding 42 U.S.C.
§ 1981 as a theory for recovery for the 1992 promotion and
retaliation claims. Nash Finch, however, characterizes
this issue as an instruction issue and argues the
instructions and the special verdict forms submitted the
1992 promotion and retaliation claims to the jury under
Title VII only. Nash Finch argues the district court
correctly concluded that Kim’s failure to object to the
instructions or the special verdict forms under Fed. R.
Civ. P. 51 waived any argument that those claims should
have been submitted to the jury under § 1981 as well as
Title VII.
Whether the 1992 promotion and retaliation claims
should have been (or actually were) submitted to the jury
under § 1981 as well as Title VII is critical because
compensatory and punitive damages are “capped” under Title
VII but not under §1981. Thus, under Title VII, Kim’s
compensatory and punitive damages would be limited to
$300,000, but the amount of damages could be much greater
under § 1981. (The jury awarded Kim a total of $8,650,000
for compensatory and punitive damages for the 1992
promotion and retaliation claims.) This is because 42
U.S.C. § 1981a(b)(3)-- the statutory cap-- limits the
amount of any award of compensatory and punitive damages
for Title VII claims for intentional discrimination. Cf.
Kimzey v. Wal-Mart Stores, Inc., 107 F.3d at 575-76
(applying statutory cap to Title VII claims but not to
state anti-discriminatory claims); Luciano v. Olsten
-42-
Corp., 912 F. Supp. 663, 675 (E.D.N.Y. 1996) (same),
aff’d, 110 F.3d 210 (2d Cir. 1997).4 However, the Title
VII statutory cap does not apply to § 1981 claims; the
1991 Civil Rights Act, which made
4
The Iowa civil rights statute does allow for compensatory damages but not
punitive damages. E.g., Chauffeurs Local Union No. 238 v. Iowa Civil Rights
Comm’n, 394 N.W.2d 375, 382-84 (Iowa 1986).
-43-
compensatory and punitive damages available under Title
VII, specifically provides that “[n]othing in this section
shall be construed to limit the scope of, or the relief
available under, section 1981 of this title.” 42 U.S.C.
§ 1981a(b)(4); see Johnson v. Metropolitan Sewer District,
926 F. Supp. 874, 876 (E.D. Mo. 1996), citing West v.
Boeing Co., 851 F. Supp. 395, 399-01 & nn.4, 5 & 7 (D.
Kan. 1994) (reviewing legislative history of § 1981a(a)(1)
as expanding remedies available under Title VII for
intentional discrimination); cf. Reynolds v. Octel
Communications Corp., 924 F. Supp. 743, 747 (N.D. Tex.
1995) (holding recovery of both liquidated damages under
ADEA and punitive damages under Title VII would be double
recovery for same conduct); Bradshaw v. University of
Maine System, 870 F. Supp. 406, 407-08 (D. Me. 1994)
(holding plaintiff who could have but did not plead race
discrimination claim under §1981 was not barred from
bringing Title VII race discrimination claim for
compensatory and punitive damages by § 1981a).
As a threshold matter, we do not agree that Kim waived
this argument by failing to object to the instructions or
the special verdict forms. The focus of Kim’s argument is
not on the jury instructions or the special verdict forms
themselves (indeed, Kim argues he had no grounds to object
to the jury instructions or the special verdict forms
because they correctly stated the applicable law), but on
the denial of his motion to amend the pleadings to conform
to the evidence. Cf. City of St. Louis v. Praprotnik, 485
U.S. 112, 119-20 (1988) (holding failure to timely object
to jury instructions was no obstacle to appellate review
of same legal issue raised in motions for summary judgment
and directed verdict). Motions to amend the pleadings to
conform to the evidence under Rule 15(b) can be made at
-44-
any time, even after judgment. If the issue of § 1981
liability was tried by implied consent, the district court
should have considered it raised by the pleadings and
should have allowed amendment upon Kim’s request.
Amendments are allowed when the parties have
had actual notice of an unpleaded issue and have
been given an adequate opportunity to
-45-
cure any surprise resulting from the change in
the pleadings. And, when evidence relating to
issues outside the pleadings is introduced and
tried without objection, the parties will be
deemed to have acquiesced.
Nielson v. Armstrong Rubber Co., 570 F.2d 272, 275 (8th
Cir. 1978) (citations omitted).
An amended complaint that “merely amplifies some
of the allegations that have been proven” should
be allowed. On the other hand, however, a
district court is not required to grant a motion
to amend on the basis of some evidence that
would be relevant to the new claim if the same
evidence was also relevant to a claim originally
pled. The introduction of such evidence does
“not provide the defendant any notice” that the
implied claim was being tried.
Gamma-10 Plastics, Inc. v. American President Lines,
Ltd., 32 F.3d 1244, 1256 (8th Cir. 1994) (citations
omitted), cert. denied, 513 U.S. 1198 (1995).
In the present case, the same evidence relevant to the
new theory of recovery-- § 1981-- was relevant to the
theory of recovery originally pled-- Title VII. This is
because, as discussed above, Title VII and § 1981 set
forth parallel, substantially identical, legal theories of
recovery in cases alleging intentional discrimination in
employment on the basis of race. This is particularly so
after the enactment of the 1991 Civil Rights Act. Before
1991, compensatory and punitive damages were available
under § 1981 but not under Title VII. Among other things,
the 1991 Civil Rights Act expanded the definition of “make
and enforce contracts” in § 1981 to include the terms and
-46-
conditions of employment, including discharge, added the
right to jury trial to Title VII, and, most importantly,
expanded the remedies available to Title VII plaintiffs to
include compensatory damages (for emotional pain,
suffering, mental anguish, etc.) and punitive damages.
Compensatory and punitive damages are only available under
Title VII if the plaintiff cannot recover under § 1981.
42 U.S.C. § 1981a(a)(1). The
-47-
elements of claims alleging disparate treatment on the
basis of race under Title VII and intentional employment
discrimination on the basis of race under § 1981 are
identical. Hicks, 509 U.S. at 506 n.1. The standard for
punitive damages is the same under Title VII, 42 U.S.C. §
1981a(b)(1) (malice or reckless indifference to federally
protected rights), and § 1981. E.g., Kolstad v. American
Dental Ass’n, 323 U.S. App. D.C. 402, 108 F.3d 1431, 1437
(1997) (holding standard of proof for punitive damages
under 42 U.S.C. § 1981a is the same as that previously
established for punitive damages under 42 U.S.C. §§ 1981
and 1983), citing Smith v. Wade, 461 U.S. 30, 56 (1983) (§
1983), and Williamson v. Handy Button Machine Co., 817
F.2d 1290, 1296 (7th Cir. 1987) (§ 1981). The elements of
a retaliation claim under § 1981 and Title VII are the
same as well. See Barge v. Anheuser-Busch, Inc., 87 F.3d
at 259 (§ 1981 retaliation claim); Kobrin, 34 F.3d at 704
(Title VII retaliation claim). However, there are still
differences between the two statutes. They are not
co-extensive in coverage (for example, Title VII does not
cover all employers). Title VII requires exhaustion of
administrative remedies, and the statutes of limitations
are different. Most importantly, the amount of
compensatory and punitive damages is limited under Title
VII but not under § 1981.
“We have held that the admission of evidence bearing
on a pleaded issue cannot form the basis for an amendment
under Rule 15(b) unless the defendant knew of the
plaintiff’s intent to inject the unpleaded issues.”
McLaurin v. Prater, 30 F.3d 982, 986 (8th Cir. 1994). In
the present case there is no doubt that Kim intended the
evidence to support § 1981 in addition to Title VII
because the complaint itself alleged that Nash Finch’s
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conduct had violated both Title VII and § 1981 (as well as
the ADEA and state law). Counts I and II, the
failure-to-promote counts, are broadly stated, but the
parties and the district court treated count I as alleging
the April 1992 failure-to-promote violated Title VII (as
well as the ADEA and state law) and count II as alleging
the November 1990 failure-to-promote violated § 1981.
Count III alleged Nash Finch retaliated against Kim for
filing an administrative charge. The caption and text of
Count I referred to Title VII; the caption and text of
Count II referred to § 1981 expressly and to Title VII by
incorporation (the first paragraph of count II “repleaded”
-49-
the paragraphs of count I; recovery under Title VII for
the November 1990 failure-to-promote was precluded because
Kim did not file his administrative charge within 300
days; the complaint was timely filed (within 2 years) for
purposes of §1981). The caption and text of count III
alleged retaliation in violation of only Title VII
expressly, but, like count II, also incorporated the
previous paragraphs, including the reference therein to §
1981. The allegations in the complaint were sufficient to
put Nash Finch on notice of Kim’s claim that Nash Finch’s
conduct violated both Title VII and § 1981, certainly so
that Nash Finch cannot claim surprise.
In addition, Kim moved several times to amend the
pleadings, in pre-trial proceedings (opposing Nash Finch’s
motion for summary judgment), immediately before trial
began and then during the trial. Each time Kim explained
why he sought to amend the pleadings to add § 1981 as a
theory for recovery for the April 1992 failure-to-promote
and retaliation claims, specifically referring to the
statutory cap on damages under Title VII but not under §
1981. Moreover, on the third day of trial, near the close
of the evidence, in ruling on Kim’s renewed motion, the
district court found that the case had been tried on the
basis of both § 1981 and Title VII and granted the motion
to amend the pleadings to add § 1981 as a theory of
recovery. It was only after the case had been submitted
to the jury (following an extensive instructions
conference during which, among other issues, the standard
of proof for punitive damages under Title VII and § 1981
was discussed) that the district court reconsidered and
then denied the motion to amend the pleadings. It would
seem that if any party was surprised by this turn of
events, it was Kim.
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We think the record shows that, even though § 1981 as
a theory of recovery was not pleaded, it was fairly tried
by the parties. Moreover, because of the substantial
identity of Title VII and § 1981 as theories of recovery
for claims of intentional discrimination, Nash Finch was
not prejudiced by the amendment because it had a fair
opportunity to defend § 1981 as a theory of recovery. We
are satisfied that, given the substantial identity of
Title VII and § 1981 as theories of recovery, the jury’s
finding
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of intentional discrimination under Title VII also
constituted a finding of intentional discrimination under
§ 1981, even though the instructions for the April 1992
promotion and retaliation claims (as well as the punitive
damages instruction) did not refer to §1981. Thus, we
hold the district court abused its discretion in denying
the motion to amend the pleadings to conform to the
evidence. See, e.g., Gamma-10 Plastics, Inc. v. American
President Lines, Ltd., 32 F.3d at 1255-57 (holding abuse
of discretion to deny motion to amend complaint to add
claim for punitive damages under general maritime law);
McLaurin v. Prater, 30 F.3d at 985-86 (suggesting on
remand that district court should grant motion to amend
complaint to add state law claims to constitutional claim
based on same facts); Corsica Livestock Sales, Inc. v.
Sumitomo Bank, 726 F.2d 374, 377-78 (8th Cir. 1983)
(holding abuse of discretion to deny motion to amend
complaint to add contract theory of recovery to rule
violation theory of recovery alleged in complaint);
Nielson v. Armstrong Rubber Co., 570 F.2d at 275-76
(holding abuse of discretion to deny motion to amend
complaint to add strict products liability claim to
negligence claim already alleged); cf. Oglala Sioux Tribe
v. Andrus, 603 F.2d 707, 714 (8th Cir. 1979) (noting
federal rules abolished “theory of the pleadings” doctrine
under which plaintiff must succeed on those theories that
are pleaded or not at all).
Because § 1981 was a basis for recovery, the Title VII
cap on compensatory and punitive damages does not apply.
We turn next to Nash Finch’s damages arguments.
COMPENSATORY DAMAGES
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Nash Finch argues there was no evidence to support the
award of $21,000 in back pay (lost wages). Nash Finch
argues that the difference in pay between what Kim was
paid as a leadman and what he would have been paid had he
been promoted to foreman was at most $1932.81. Nash Finch
bases this calculation on the salaries paid to the two
employees who were promoted to the position of shipping
foreman in 1990 and 1992. We hold there was evidence to
support the award of $21, 000 in back pay.
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Kim presented evidence showing that the salaries of
comparable employees and evidence that there was no set
pay scale for the position, that Nash Finch considered a
number of facts in setting salaries, and that he had more
seniority and more experience in the shipping department
(including experience as the Saturday shipping foreman)
than the two individuals who were promoted in 1990 and
1992.
Nash Finch also argues there was no evidence to
support the award of $447 per month in front pay. Nash
Finch argues that at most the difference in pay was about
$360 per month. Nash Finch bases this calculation on the
higher of the salaries paid to the two employees who were
promoted to the position of shipping foreman in 1990 and
1992. (The lower difference in salary was about $240 per
month.) The district court based the amount of the front
pay award on the back pay award ($21,000 over 47 months
(from November 1990 promotion to September 1994 verdict),
or $447 per month). Slip op. at 16-19, 21. We have
already held that the district court’s calculation of back
pay is supported by substantial evidence, and we cannot
disapprove of the calculation of front pay based on the
same evidence.
Nash Finch also argues there was no medical or other
expert testimony to support the finding of emotional
distress. The jury awarded Kim $ 100,000 for mental
anguish and loss of enjoyment of life caused by the
November 1990 failure-to-promote under 42 U.S.C. § 1981.
Medical or other expert evidence is not required to prove
emotional distress. Turic v. Holland Hospitality, Inc.,
85 F.3d 1211, 1215 (6th Cir. 1996) (Title VII). “A
plaintiff’s own testimony, along with the circumstances
-54-
of a particular case, can suffice to sustain the
plaintiff’s burden in this regard.” Id. at 1215-16
(citing cases); see, e.g., Wilmington v. J.I. Case Co.,
793 F.2d 909, 922 (8th Cir. 1986) (42 U.S.C. § 1981)
(testimony of plaintiff and other witnesses about
plaintiff’s deterioration in health, mental anxiety,
humiliation, and emotional distress resulting from
working conditions and discharge); Williams v. Trans
World Airlines, Inc., 660 F.2d 1267, 1272-73 (8th Cir.
1981) (testimony of plaintiff about humiliation or mental
distress); cf. Mardell v. Harleysville Life Insurance
Co., 31 F.3d 1221,
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1232-33 (3d Cir. 1994) (violation of employee rights
frequently results in significant injury to dignity and
demoralizing impairment of self-esteem) (citing cases),
vacated on other grounds, 514 U.S. 1034 (1995); Rush v.
Scott Specialty Gases, Inc., 930 F. Supp. 194, 199 (E.D.
Pa. 1996) (testimony of plaintiff corroborated by
friends, family and expert witnesses, plus evidence of
physical suffering and need for professional care), rev’d
on other grounds, 113 F.3d 476 (3d Cir. 1997). Here,
Kim, his wife and his son testified about the anxiety,
sleeplessness, stress, depression, high blood pressure,
headaches, and humiliation he suffered after he was not
promoted and after he filed the employment discrimination
charge. We hold that medical or other expert evidence
was not required to prove emotional distress and that
there was sufficient evidence of emotional distress.
PUNITIVE DAMAGES
Nash Finch argues the district court erred in
submitting the issue of punitive damages to the jury.
Nash Finch argues the district court should have applied
a heightened standard of proof for punitive damages
because the 1991 Civil Rights Act, 42 U.S.C. §
1981a(b)(1), limits the availability of punitive damages
to “exceptional circumstances of unusual bad motive that
transcends ordinary intentional misconduct.” Brief for
Appellee/ Cross-Appellant at 46.
Under 42 U.S.C. § 1981a(b)(1) a complaining party may
recover punitive damages if the defendant discriminates
“with malice or with reckless indifference to the
federally protected rights of an aggrieved individual.”
We do not agree that the 1991 Civil Rights Act, 42 U.S.C.
-56-
§ 1981a(b)(1), limits the availability of punitive
damages to “exceptional circumstances of unusual bad
motive that transcends ordinary intentional misconduct.”
The Second Circuit rejected a similar argument in Luciano
v. Olsten Corp., 110 F.3d at 219-20. In that case the
employer argued punitive damages required
“extraordinarily egregious” conduct. The court held that
“[n]othing in the . . . text [of § 1981a(b)(1)] indicates
that a heightened standard was meant to
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apply to Title VII cases.” Id. at 220, citing Rowlett v.
Anheuser-Busch, Inc., 832 F.2d 194, 205 (1st Cir. 1987)
(punitive damages under 42 U.S.C. § 1981 available where
defendant’s conduct is motivated by evil motive or
involves reckless indifference to federally protected
rights), Beauford v. Sisters of Mercy-Province of
Detroit, Inc., 816 F.2d 1104, 1108-09 (6th Cir.) (same),
cert. denied, 484 U.S. 913 (1987), and Smith v. Wade, 461
U.S. at 55-56 (punitive damages under 42 U.S.C. § 1983
available under common law when conduct motivated by evil
motive or intent or reckless or callous indifference to
federally protected rights of others); accord Kolstad v.
American Dental Ass’n, 108 F.3d at 1437-39. The court
also noted the legislative history indicated that
Congress intended to make punitive damages available
under § 1981a “to the same extent and under the same
standards that they are available to plaintiffs under 42
U.S.C. § 1981.” 110 F.3d at 220, citing 137 Cong. Rec.
H9527 (1991) (statement of Rep. Edwards), and H.R. Rep.
No. 40(II), 102d Cong., 1st Sess. 24 (1991), reprinted in
1991 U.S.C.C.A.N. 717.
For this reason, we hold the district court correctly
rejected Nash Finch’s argument that a plaintiff must
demonstrate something more than that required by the
statute to recover punitive damages, that is, that the
defendant acted “with malice or with reckless
indifference to the federally protected rights of an
aggrieved individual.” 42 U.S.C. § 1981a(b)(1).5
5
We need not decide whether recovery of punitive damages under Title VII
requires a “heightened” showing beyond intentional discrimination (that is, intentional
discrimination based on disparate treatment as opposed to disparate impact), although
the author would suggest that it does not. See 42 U.S.C. § 1981a(d)(2) (defining
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Nash Finch also argues that there was insufficient
evidence to support the punitive damages award. Nash
Finch argues there was no evidence of willfulness, malice
or reckless indifference to the federally protected
rights of others, much less “exceptional circumstances of
unusual bad motive that transcends ordinary intentional
misconduct.” Nash Finch argues that, at most, there was
only circumstantial evidence of discrimination consisting
of “inconsistent explanations for the allocation of
scarce employment opportunity.” We hold that there was
sufficient evidence to support the punitive damages
award.
Based on the record as discussed above, a reasonable
jury could have found that Nash Finch acted with reckless
indifference to Kim’s federally protected rights. There
was evidence that Nash Finch knew what constituted
unlawful employment practices. There was also evidence
that Nash Finch systematically retaliated against Kim for
filing an employment discrimination charge and attempted
to discredit him by “papering” his personnel file. The
intentional discrimination at issue-- failure to promote
“discriminatory practice” to mean disparate treatment and not disparate impact); cf.
Rowlett v. Anheuser-Busch, Inc., 832 F.2d 194, 205-06 (1st Cir. 1987) (rejecting in
pre-1991 Civil Rights Act case argument that punitive damages under § 1981 requires
“aggravating circumstances” or “extraordinary or outrageous” misconduct, noting that
it cannot really be disputed that intentional discrimination on basis of race is “worthy
of some outrage”). But see Varner v. National Super Mkts, Inc., 94 F.3d 1209, 1214
(8th Cir. 1996) (citing with approval Pandazides v. Virginia Bd. of Educ., 13 F.3d 823,
830 n.9 (4th Cir. 1994) (construing “heightened” showing necessary to recover punitive
damages under §1981a(b)(1)), cert. denied, 117 S. Ct. 946 (1997); Karcher v. Emerson
Elec. Co., 94 F.3d 502, 509 (8th Cir. 1996) (same), cert. denied, 117 S. Ct. 1692, 1693
(1997).
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and retaliation-- involved disparate treatment, not
disparate impact, and was undertaken by supervisors or
management. “The requisite level of recklessness or
outrageousness [required to support punitive damages] can
be inferred from management’s participation in the
discriminatory conduct.” Kimzey v. Wal-Mart Stores, Inc.,
107 F.3d at 575, citing Kientzy v. McDonnell Douglas
Corp., 990 F.2d 1051, 1062 (8th Cir. 1993). Direct
evidence of intentional discrimination is not required;
circumstantial evidence may be sufficient. United States
Postal Service Board of Governors v. Aikens, 460 U.S. at
714 n.3. Finally, the record contained more than merely
evidence of inconsistent explanations for Nash Finch’s
conduct, that is, that Nash Finch had lied;
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as discussed above (at some length), there was also
evidence that Nash Finch had intentionally discriminated
against Kim on the bases of race or national origin.
EXCESSIVE VERDICT
Finally, Nash Finch argues the verdict was
unreasonable because it was grossly excessive and grossly
disproportionate to the kind of wrong and the actual
damages. Nash Finch argues that the jury awarded $36,000
for back pay even though the difference in actual wages
was less than $2,000, more than $1.5 million for emotional
distress even though Kim continued to work and lead a
normal life, and $7 million for punitive damages, an
amount which is 3,500 times the actual loss of $2,000 and
almost half of Nash Finch’s annual earnings. Brief for
Appellee/ Cross-appellant at 48; Reply Brief for Appellee/
Cross-appellant at 21 (citing Plaintiff’s Ex. 26 at 2).
Because the district court applied the Title VII
statutory cap, the district court limited the jury’s award
of $150,000 in compensatory damages for emotional distress
for the 1992 failure-to-promote claim, the $1.5 million in
compensatory damages for emotional distress for the
retaliation claim, and the $7 million in punitive damages
to a total of $ 300,000, slip op. at 15-16, and did not
“engage in an analysis as to the excessiveness of the
award except to say that damages in the amount being
awarded are certainly not excessive due to the length of
time the discrimination continued, the level of
retaliation by Nash Finch and the financial well-being of
Nash Finch.” Id. at 14. Thus, as reduced by the district
court, the judgment awarded Kim damages in the amount of
$21,000 for lost wages, $100,000 for emotional distress
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for the 1990 failure-to-promote claim and $300,000,
including punitive damages, for the 1992
failure-to-promote and retaliation claims. Id. at 27.
As discussed above, because the district court abused
its discretion in denying the Rule 15(b) motion to amend,
42 U.S.C. § 1981 was a basis of recovery for the 1992
failure-to-promote and retaliation claims. Because the
Title VII statutory cap does not
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apply to limit the recovery under 42 U.S.C. § 1981, the
district court should not have reduced the amount of
damages awarded pursuant to the Title VII statutory cap.
See 42 U.S.C. § 1981a(b)(4); Johnson v. Metropolitan Sewer
District, 926 F. Supp. at 876. Nonetheless, we think the
district court was correct to reduce the amount of damages
awarded by the jury because the amount was grossly
excessive. In effect, what the district court did
amounted to remittitur, which we review for clear abuse of
discretion. See, e.g., Kientzy v. McDonnell Douglas
Corp., 990 F.2d at 1062. It is not possible to ascertain
what portion of the $300,000 is attributable to
compensatory or punitive damages, so we will assume for
purposes of analysis that the entire amount was for
punitive damages.
After carefully reviewing the evidence, we conclude
that, although an award of $1.75 million for emotional
distress is grossly excessive, an award of $100,000 is
not. See Kimzey v. Wal-Mart Stores, Inc., 107 F.3d at 570
($35,000); Turic v. Holland Hospitality, Inc., 85 F.3d at
1215-16 (listing cases in which damages for emotional
distress ranged from $40,000 to $150,000); Kientzy v.
McDonnell Douglas Corp., 990 F.2d at 1054 ($150,000); Rush
v. Scott Specialty Gases, Inc., 930 F. Supp. at 199
($100,000).
Similarly, we conclude that, although an award of $7
million for punitive damages is grossly excessive, an
award of $300,000 is not. Factors to consider in
determining the reasonableness of a punitive damages award
include the degree of reprehensibility of the defendant’s
conduct, the ratio or relationship between the actual harm
inflicted on the plaintiff and the punitive damages award,
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and civil penalties authorized or imposed for comparable
misconduct. BWM of North America, Inc. v. Gore, 116 S.
Ct. 1589, 1598-99 (1996); see Pulla v. Amoco Oil Co., 72
F.3d 648, 659 (8th Cir. 1995) (White, J.). Nash Finch’s
conduct was reprehensible and involved retaliation and at
least reckless disregard of federal protected rights. It
did not involve violence or the threat of violence, but it
did involve trickery or deceit. The ratio or relationship
between the reduced punitive damages award and the actual
harm inflicted
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as measured by the reduced amount of back pay and
compensatory damages is a relatively unremarkable 3:1.
See BMW of North America, Inc. v. Gore, 116 S. Ct. at 1602
(noting 4:1 ratio of punitive damages to compensatory
damages was described as “close to the line” in Pacific
Mutual Life Insurance Co. v. Haslip, 499 U.S. 1, 23-24
(1991), and that relevant ratio was not more than 10:1 in
TXO Production Corp. v. Alliance Resources Corp., 509 U.S.
443, 462 (1993)); Kimzey v. Wal-Mart Stores, Inc., 107
F.3d at 577-78 (reducing punitive damages award from $5
million to $350,000, an amount 10 times the actual damages
award of $35,000, which the court described as “low”).
Finally, Title VII, which authorizes or imposes liability
for comparable misconduct, caps compensatory and punitive
damages at $300,000 (for the largest employers). 42
U.S.C. § 1981a(b)(3)(D); see, e.g., Rush v. Scott
Specialty Gases, Inc., 930 F. Supp. at 202 (reducing
punitive damages award from $3 million to $300,000). We
think a $300,000 punitive damages award is an adequate
sanction and sufficient to deter future similar conduct,
considering the size and assets of Nash Finch.
CONCLUSION
In sum, we hold the district court should have granted
the motion to amend the pleadings to conform to the
evidence and thus should not have applied the Title VII
cap, 42 U.S.C. § 1981a(b)(3), to limit compensatory and
punitive damages. We also hold the district court did not
err in holding the November 1990 failure-to-promote claim
was actionable under 42 U.S.C. § 1981 under Patterson,
there was sufficient evidence of intentional
discrimination and retaliation, and there was sufficient
evidence of malice or reckless indifference to support
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punitive damages. Finally, we hold the awards of back pay
and compensatory and punitive damages, as reduced by the
district court, were supported by sufficient evidence and
were not excessive.
Accordingly, we affirm the judgment of the district
court.
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BEAM, Circuit Judge, concurring in part and dissenting in
part.
I concur in the result reached by the court and in the
opinion of the court except that I do not agree that the
evidence was sufficient to submit the issue of punitive
damages to the jury. Thus, any award for punitive damages
was error. Since, as noted by the court, “[i]t is not
possible to ascertain what portion of the $300,000 [award]
is attributable to compensatory or punitive damages,”
infra at 33, I would assume, for purposes of analysis,
that the entire amount was for compensatory purposes.
Accordingly, my bottom line of damages is the same as that
of the court.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH
CIRCUIT.
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