Equal Employment Opportunity Commission v. HBE Corp. ( 1998 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
Nos. 96-4107; 97-1656
___________
Equal Employment Opportunity *
Commission, *
*
Plaintiff - Appellee, *
*
Bruce M. Ey, *
*
Intervenor Below - Appellee, *
*
v. *
*
HBE Corporation, doing business as *
Adam’s Mark Hotel, *
*
Defendant - Appellant. * Appeals from the United States
* District Court for the
------------------------- * Eastern District of Missouri.
*
Equal Employment Opportunity *
Commission, *
*
Plaintiff - Appellee, *
*
Dewey R. Helms, *
*
Intervenor Below - Appellee, *
*
v. *
*
HBE Corporation, doing business as *
Adam’s Mark Hotel, *
*
Defendant - Appellant. *
___________
Submitted: September 8, 1997
Filed: January 27, 1998
___________
Before McMILLIAN, BRIGHT, and MURPHY, Circuit Judges.
___________
MURPHY, Circuit Judge.
HBE Corporation, doing business as Adam’s Mark Hotel (Adam’s Mark), appeals
from a judgment in favor of the Equal Employment Opportunity Commission (EEOC)
and former employees Dewey Helms and Bruce Ey on claims of racial discrimination
and retaliatory discharge. Appellees were awarded front pay and injunctive relief under
Title VII, 42 U.S.C. §§ 2000e-2 and 2000e-3, and back pay, lost benefits, and punitive
damages under the Missouri Human Rights Act (MHRA), Mo. Ann. Stat. §§ 213.055
and 213.070 (West 1997). Appellant seeks judgment in its favor on the retaliatory
discharge claim and a new trial on the racial discrimination claim. It also objects to the
awards of front pay, punitive damages, and attorney fees and to the scope of injunctive
relief. We affirm in part and reverse in part.
I.
Helms and Ey were employees at the Adam’s Mark until they were discharged on
September 12, 1991. At that time Dewey Helms, an African American, had been the
employment manager since February 12, 1990, and Bruce Ey had been the director of
personnel since April 8, 1991. Helms’ initial performance review had rated him
“satisfactory plus” and reflected “very good feedback” from management. An August,
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1991 performance review said he "exceeds standards" although it was later changed to
"meets standards" when Maurice Briquet, the general manager of the hotel, said he did
not want managers described as exceeding standards. The turnover rate of hourly
employees steadily declined during Helms’ tenure at the Adam's Mark. Managers of
various divisions said he was easy to work with and that he consistently referred
qualified, reliable applicants for employment positions. Based on this record Bruce Ey,
who was Helms' superior in the personnel department, recommended that Helms receive
an 8.7 percent salary increase, an above average raise.
On September 5, 1991 Ey recommended to Erick Ohlsson, the corporate director
of personnel, that Helms be promoted to the vacant position of assistant director of
personnel. The Adam's Mark executive committee coordinated operations at the hotel,
and it supported the promotion. Helms was the first African American to be employment
manager and was one of four blacks among the seventy nine managers at the hotel. The
four black managers were among the lowest paid. Ey testified at trial that blacks held
about half of the non-management positions at the hotel and that the labor pool in St.
Louis was predominantly black.
Fred Kummer, the chief executive officer and primary owner of the Adam’s Mark
corporate parent, controlled personnel decisions at the hotel and was closely involved
in employment matters. Kummer testified at trial that he decided to fire Helms because
the personnel department was "a disaster.” He stated that in the personnel files for
which Helms was responsible there were incomplete applications and reference checks,
unexplained gaps in employment histories, and failures to note changes in applicants’
compensation patterns. After Kummer expressed his desire to terminate Helms, Ohlsson
audited seven of his personnel files on September 10, 1991. He discovered that all seven
met company requirements for employment histories, reference checks, and full
completion. They did not reveal the deficiencies given as a reason to fire Helms.
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When Ohlsson told Ey that the corporate office wanted to fire Helms, Ey
objected. Ey believed that the decision to fire Helms was racially motivated. On
September 6, Briquet had told him that Kummer wanted to get rid of Helms because it
was getting "too dark" in Chestnut's (a cafe near the front entrance in the Adam's Mark)
since Helms was "hiring too many blacks." Briquet had earlier told Ey at his job
interview that Helms was “a good man, but they’re worried about two blacks in there”
and that “I think we can handle that.” Mike Hess, a former director of corporate
personnel, told Ey that Kummer's policy was to exclude blacks from important positions
at the hotel such as general manager or director of personnel. Ey spoke with general
manager Briquet and other members of the executive committee in an attempt to prevent
Helms' discharge.
When Ohlsson asked Ey on September 12 how he planned to terminate Helms,
Ey said he would not do it because he thought the decision was racially motivated.
Ohlsson then called Kummer and Robert Coleman, the vice president of operations, to
inform them about Ey's position. They directed Ohlsson to discharge both Ey and
Helms, and he did so immediately. Helms was the first employment manager to be fired
at the hotel; all previous managers had either left voluntarily or been promoted. Kummer
testified at trial that he was angry when Ey recommended Helms for assistant director
of personnel because that position was being eliminated to save money. He claimed it
was for this reason that he decided to discharge Ey and that he told Ohlsson and
Coleman to terminate him at an appropriate time.
Helms and Ey filed complaints with the EEOC which decided to file these
lawsuits under Title VII on their behalf. Helms and Ey then intervened, asserting claims
under both Title VII and the MHRA. The two cases were consolidated for trial which
lasted over three weeks. The jury found for Helms on his MHRA claim of racial
discrimination and awarded him $52,657 in back pay and lost benefits and $3,800,000
in punitive damages. The jury also found in favor of Ey on his claim of retaliatory
discharge and awarded him $60,000 in back pay and benefits and $1,000,000 in
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punitive damages. On the Title VII claims the court awarded front pay to Helms in the
amount of $68,239 and to Ey in the amount of $131,571. The court also granted a
permanent injunction against Adam’s Mark to prevent future discrimination, to provide
for reporting to the EEOC, and to redress the harm to Helms and Ey. Finally, the court
awarded Helms and Ey attorney fees and costs: $89,313.50 to Helms and $158,204.43
to Ey.
Adam’s Mark filed a motion for judgment as a matter of law or, alternatively, for
a new trial, as well as a request for remittitur. The district court denied these motions,
and Adam’s Mark appealed from the judgment and the denial of its post trial motions.1
Adam’s Mark claims the two cases should not have been consolidated, objects to certain
evidentiary rulings, and argues that the evidence was insufficient for a retaliatory
discharge claim or for punitive damages. It also objects to the amount of the punitive
damage and front pay awards and to the scope of equitable relief.
II.
Adam’s Mark argues that the district court erred in consolidating the cases of
Helms and Ey, in allowing a jury trial on their MHRA claims, and in failing to bifurcate
the issues of liability and punitive damages. It complains that the consolidation
permitted evidence relevant only to Helms to be considered in connection with Ey and
permitted the MHRA claims to be heard by a jury. It also argues that trying liability at
the same time as punitive damages led to the introduction of inflammatory evidence
which improperly affected the result.
1
This appeal was docketed as case 96-4107. A separate appeal from the
judgment for attorney fees and costs was docketed as case 97-1656 and consolidated
with the main appeal.
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All claims and issues sharing common aspects of law or fact may be consolidated
to avoid unnecessary cost or delay, Fed. R. Civ. P. 42(a), and consolidation should be
upheld unless there has been a clear abuse of discretion, EPA v. City of Green Forest,
Arkansas, 921 F.2d 1394, 1402 (8th Cir. 1990). Consolidation is inappropriate,
however, if it leads to inefficiency, inconvenience, or unfair prejudice to a party. Fed.
R. Civ. P. 42(b).
These cases have common questions of law and fact. Appellees all sought to
present similar evidence about a climate of racial hostility at the Adam’s Mark and the
events immediately preceding and following Helms discharge. This evidence was
relevant to establish both why Helms was fired and why Ey had a reasonable belief that
it was because of racial discrimination. Evans v. Kansas City, Missouri School District,
65 F.3d 98, 100 (8th Cir. 1995), cert denied 116 S. Ct. 1319 (1996) (retaliatory discharge
plaintiffs can show they engaged in protected conduct by opposing employer practices
based on a reasonable belief of discrimination); Estes v. Dick Smith Ford, 856 F.2d
1097, 1103 (8th Cir. 1988) (evidence of employer's racial bias permits inference of racial
discrimination in employment decision). It was therefore appropriate to consolidate
these claims and avoid the inefficiency of separate trials involving related parties,
witnesses, and evidence.
Adam’s Mark argues that consolidation allowed the MHRA claims to be tried to
a jury when they could not have been in state court. The availability of a jury trial is a
question of federal law, however, even when state claims are being tried. Gipson v.
KAS Snacktime Co., 83 F.3d 225, 230 (8th Cir. 1996). Because MHRA permits the
recovery of money damages, it is considered a traditional legal action for which a jury
trial is available in federal court. Id. In the circumstances here where Helms and Ey
sought money damages, a jury trial of both their federal and state law claims was not
improper. Id.
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Finally, Adam’s Mark challenges the district court’s failure to bifurcate the issues
of liability and punitive damages since Missouri law permits separation upon request by
either party. See Mo. Stat. Ann. §510.263(1). The federal rules govern all civil actions
tried in federal court, however, and they control over conflicting state law. Fed. R. Civ.
P. 1.; Hanna v. Plumer, 380 U.S. 460, 473-474 (1965). Consolidation of issues and
claims is committed to the discretion of the trial court. Fed. R. Civ. P. 42(a). The
evidence of racially discriminatory conduct was relevant on issues of liability, Estes, 856
F.2d at 1103, racial animus of managers, and punitive damages, Burnett v. Griffith, 769
S.W.2d 780, 787 (Mo. banc 1989). Adam’s Mark was therefore not prejudiced by
admission of such evidence in a single proceeding, and the district court did not abuse
its discretion in declining to bifurcate the issues.
III.
Adam’s Mark asserts that it is entitled to a new trial because of erroneous
evidentiary rulings. We review a district court's evidentiary rulings for abuse of
discretion, and a new trial should only be granted on the basis of incorrect rulings if it
would be likely to produce a different outcome. Campbell v. Vinjamuri, 19 F.3d 1274,
1276 (8th Cir. 1994).
A.
Adam’s Mark complains that hearsay and irrelevant evidence was admitted. A
timely and specific objection is necessary for a successful evidentiary appeal in the
absence of plain error. Fed. R. Evid. 103. Bruce Ey testified without objection about
several statements made by Adam’s Mark managers. There was no objection raised to
his testimony that Maurice Briquet told him "they want me to get rid of Dewey”; that
Fred Kummer said Chestnut's was getting "too dark" because Helms was hiring too many
blacks; or that Robert Schultz, another mid-level manager, told him that Anton Piringer,
the president of the hotel, made such a statement about Chestnut’s. Guest
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services manager Donna Killion also testified that she heard Piringer express this
concern about too many black employees in Chestnut’s, and no objection was made.
Schultz testified that Briquet said that having two blacks in the employment office would
drive away white applicants, but Adam’s Mark did not object until after several
questions were answered and never moved to strike the previous testimony.
The failure to make timely objections precludes Adam’s Mark from now
challenging this testimony since its admission was not plain error, but these statements
were admissible even over objection. The testimony was relevant to establish that racial
bias on the part of management was the actual motive for discharging Dewey Helms,
Estes, 856 F.2d at 1103, and that it was not unreasonable for Bruce Ey to refuse to carry
out the termination because of a belief that the decision was racially motivated, Evans,
65 F.3d at 100. The statements were not hearsay because they were made in the course
of employment by Adam’s Mark managers with authority for management and
employment decisions. Fed. R. Evid. 801(d)(2).
Adam’s Mark also challenges several statements to which it did make timely
hearsay objections. Bruce Ey testified that Mike Hess said Kummer's policy was to
exclude blacks from positions at the hotel which had “the” as part of their title (the
general manager, the director of personnel, etc). Donna Killion testified that her
immediate supervisor told her to hire only "older black gentlemen" as doormen because
that was what Kummer wanted. Paul Nicoloro testified that Kummer did not like blacks
and that Briquet had said Kummer feared Helms would hire too many. Nicoloro also
testified that Kummer did not want a black woman working in the hotel flower shop.
These statements were not inadmissible. Fred Kummer was the controlling figure in the
running of the hotel, and all aspects of the operation including personnel decisions were
within the scope of his authority. The fact that some of the statements came through
multiple declarants does not matter so long as the test for double hearsay is met. Fed.
R. Evid. 805. This testimony all involved statements by Adam’s Mark
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agents regarding activities within the scope of their employment and is therefore
admissible. Fed. R. Evid. 801(d)(2).
Statements attributed to Maurice Briquet were properly admitted under this same
rationale. Killion testified that Briquet told her it was hotel hiring policy to exclude
black waitresses from a hotel bar known as AJ's and that "black music" should not be
played there.2 These statements dealt with bar operations, a matter within Briquet’s
authority as general manager of the hotel. Moreover, not all of the statements fit the
rule's definition of hearsay where they were not offered for the truth of the matter
asserted, but rather only to show that the statements were made. Fed. R. Evid. 801(c).
Killion’s testimony that Briquet had said that Dewey Helms would not be
promoted because the corporate office did not want a black to be assistant personnel
director was objected to both as hearsay and for lack of attribution. Briquet's attribution
to "the corporate office," however, was sufficient for admission where the original
speaker's identity can be inferred from the context. See Emmel v. Coca-Cola Bottling
Co. of Chicago, 95 F.3d 627, 631-632 (7th Cir. 1996). Other testimony showing
Kummer's controlling method of operating and the racially biased statements directly
linked to him would have permitted the jury to infer that this statement was made by him.
With the exception of several statements attributed to Briquet, all of this testimony
about comments made by managers was properly admitted. Evidence that Briquet
referred to his co-worker Fred Hamileh as a "camel jockey” and made anti-
2
Appellant also objected to Michael Westerfield’s testimony that, while he was
the manager of AJ’s, food and beverage director Joe Dennehy told him the bar was
getting “too dark” and to avoid black liquor and music and to Angela Bilkey’s
testimony that one of her supervisors in hotel security instructed her to monitor black
employees very carefully. We have considered the objections raised to this testimony
and find them to lack merit.
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semitic statements should have been excluded because it was not directly relevant to the
issues in this case. Fed. R. Evid. 402, 403. Admission of these statements in the course
of a three week trial with a great volume of evidence was harmless, however. Its impact
would not have been great, and it cannot be said that it would have affected the outcome.
Campbell, 19 F.3d at 1276.
B.
Adam’s Mark also objects to the admission of Exhibit 94, a chart which
summarized a number of employment application files at the hotel which had defects
such as incomplete information, unexplained gaps in employment histories, and no
reference checks. These files had been prepared by employees other than Helms and
contained the same types of deficiencies as those which were cited as a reason to
terminate him. Adam’s Mark objects that this summary is improper because it did not
merely summarize documents, is hearsay, is not probative of pretext, and did not permit
proper cross examination because the underlying files were not produced at trial.
The primary objection made to Exhibit 94 is that it expresses the conclusion of the
preparer, JoEllen McDonald, rather than summarizing other documents. McDonald
testified at trial about how the exhibit was created. She and several assistants examined
almost two hundred employment application files for the period preceding Helms'
termination and looked for the types of problems cited by management. She then
summarized on the exhibit the objective data taken from the hotel files. The exhibit also
cited those applications with more than one type of deficiency as having “multiple
problems.” Rule 1006 permits summaries of voluminous documents, and Exhibit 94 was
properly admitted under that rule because its overall presentation is straightforward and
accurate, rather than argumentative or conclusory. See U.S. v. Possick, 849 F.2d 332,
339 (8th Cir. 1988). It simply summarized information from the employment files under
objective categories used by the hotel.
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Exhibit 94 is not inadmissible under the hearsay rule. It summarized the records
that were kept for all employment applications at the Adam's Mark and that were
routinely completed by the person who reviewed each application. These reports
underlying the exhibit were regularly kept records within the meaning of Rule 803(6) and
therefore not themselves excludable as hearsay.
The argument that Exhibit 94 is not probative of pretext is also without merit. The
exhibit showed that many of the employment files at the Adam’s Mark had deficiencies
of the sort cited for discharging Helms. The exhibit supports an inference of pretext by
showing that other employees kept their files in a manner similar to Helms. The fact that
only he was discharged suggested that this was not the actual reason he was fired. This
is the sort of evidence that would make a reasonable trier of fact, "raise an eyebrow, and
proceed to assess the employer's explanation for this outcome." MacDissi v. Valmont
Industries, Inc., 856 F.2d 1054, 1058 (8th Cir. 1988).
Finally, Adam’s Mark argues that it was denied the opportunity for effective cross
examination because the original files were not produced at trial. Rule 1006 requires
only that the documents underlying a summary be made available for copying or
examination at a reasonable time and place unless otherwise ordered by the court. The
originals belonged to the hotel, and the summary itself was disclosed three weeks before
trial, providing ample time to compare it with the originals or to request their production
in court. Having done neither, Adam’s Mark cannot now complain that it was unable
to cross examine effectively regarding its own files.
C.
Adam’s Mark also argues that the district court committed reversible error by
excluding some of the evidence it offered. It contends that it was error to exclude
evidence that Bruce Ey had stated on his employment application that he left his previous
employer because his program had been terminated when in fact he left to
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avoid investigation of an affair with a subordinate employee. It says this character
evidence was relevant because of his claim of moral opposition to the discharge of
Helms. Character is in issue only when it is an essential element of a claim or defense,
however, see Advisory Committee's Note to Fed. R. Evid. 404(a), and Ey's moral
character was not an essential element of his retaliatory discharge claim. The district
court did not abuse its discretion in excluding this evidence as irrelevant, and it could
also have been excluded under Rule 403.
Adam’s Mark also argues that it was error to exclude evidence that not many
African Americans were enrolled in the hotel management program at the University of
Missouri in order to show there was a small number available for an applicant pool. Its
offer of proof provided no indication that the number of blacks enrolled in the university
hotel management program correlated to the number of black applicants for management
positions at the hotel, however. Absent such a relationship the evidence lacked
relevance and was properly excluded. Fed. R. Evid. 402.
IV.
Adam’s Mark claims the district court erred in denying its motion for judgment
as a matter of law on the retaliatory discharge claim. Although it concedes that there
was a prima facie case of racial discrimination presented in relation to Helms, it argues
that Ey did not step outside his ordinary duties in opposing the discharge of Helms.
The denial of a motion for judgment as a matter of law is reviewed de novo under
the same standard applied by the trial court. McKnight v. Johnson Controls, Inc., 36
F.3d 1396, 1400 (8th Cir. 1994). Judgment as a matter of law is appropriate only if no
reasonable jury could find for the non-moving party when viewing the evidence in its
favor with the benefit of all reasonable inferences. Fed. R. Civ. P. 50(a); Ryther v.
Kare-11, 108 F.3d 832, 844 (8th Cir. 1997); cert denied, 117 S. Ct. 2510 (1997). The
district court properly denied the motion for judgment as a matter of law because
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there was sufficient evidence produced to support a reasonable finding on each of the
elements of the retaliatory discharge claim: 1) protected conduct, 2) adverse employment
action, and 3) a causal connection between the two. Evans, 65 F.3d at 100.
Employers may not retaliate against employees who oppose racially
discriminatory conduct. 42 U.S.C. § 2000e-3(a); Mo. Ann. Stat. §213.070. Opposition
must be based on a reasonable belief that an employer has engaged in discriminatory
conduct, Evans, 65 F.3d at 100, and it can include refusal to implement a discriminatory
policy. Moyo v. Gomez, 32 F.3d 1382, 1385 (9th Cir. 1994) (prison guard's refusal to
enforce a policy denying showers only to black inmates was protected conduct). Ey
directly opposed the decision to terminate Helms based on his reasonable belief that the
decision was racially motivated. This made out a claim of protected conduct.
Adam’s Mark argues that Ey did not act in opposition because he did not file a
claim or otherwise "step outside" his employment role. A requirement of “stepping
outside” a normal role is satisfied by a showing that the employee took some action
against a discriminatory policy, See McKenzie v. Renberg's, Inc., 94 F.3d 1478, 1486-87
(10th Cir. 1996); cert denied, 117 S. Ct. 1468 (1997), and that the action was based on
a reasonable belief that the employer engaged in discriminatory conduct. See Evans, 65
F.3d at 100-101. Unlike the plaintiff in McKenzie who merely alerted management of
potential violations of the law in order to avoid liability for the company, Ey refused to
implement a discriminatory company policy. This placed him outside the normal
managerial role which is to further company policy.
There was also sufficient evidence to support a finding of a causal relationship
between Ey’s protected conduct and his discharge. He was terminated within hours of
his refusal to fire Helms. This short interlude permits an inference of causation. See
Couty v. Dole, 886 F.2d 147, 148 (8th Cir. 1989) (termination within 30 days of
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opposition); Keys v. Lutheran Family & Children's Services of Missouri, 668 F.2d 356,
358 (8th Cir. 1981) (less than two months); Womack v. Munson, 619 F.2d 1292, 1296
(8th Cir. 1980) (twenty three days). The jury could readily infer that Ey's opposition to
the termination of Helms caused his own discharge a day later. This inference was
strengthened by evidence that Kummer ordered Ey discharged when he learned that he
would not comply with the plan for Helms. Adam’s Mark argues that the legitimate
reasons it offered for Ey’s discharge were not disproved, but a claimant need not
disprove all possible reasons for his discharge. He need only offer sufficient evidence
to support a reasonable inference that he was terminated for refusing to fire Helms. The
fact that Adam’s Mark offered evidence of a legitimate motive does not change this
standard. The jury may weigh and reject such evidence as pretextual. Ryther, 108 F.3d
at 844-45. So long as sufficient evidence exists to support a reasonable finding, the
proper weight of the evidence and the inferences to be drawn from that evidence is left
to the jury. Id. The district court did not err in denying the motion for a judgment as a
matter of law on the retaliation claim.3
V.
Adam’s Mark also raises objections to the nature and amount of some of the relief
awarded to the appellees. It objects to the size of the front pay awards, to the
submission of punitive damages and the amount awarded, and to the nature and scope
of the injunctive relief.
A.
3
Adam’s Mark also argues that there must be an exclusive causal connection
between the protected conduct and discharge, but a plaintiff must prove that retaliation
was the determinative factor in firing, not that it was the only factor. See Womack, 619
F.2d at 1297 n. 7.
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The district court found that Helms and Ey were entitled to five years of front pay.
After hearing expert testimony on the proper method of calculating the amount, the court
awarded Helms $68,239 and Ey $131,571. Adam’s Mark argues that these awards were
too high because it was unlikely that either Helms or Ey would have continued to work
at the hotel for five years in light of the high rate of turnover in the industry and in these
jobs in particular.
A district court may exercise its equitable discretion to award sufficient front pay
to make a party whole when reinstatement is impractical or impossible. Newhouse v.
McCormick & Co., Inc. 110 F.3d 635, 641 (8th Cir. 1997). Front pay should address
equitable needs such as the ability to obtain employment with comparable compensation
and responsibility, Hukkanen v. International Union of Operating Engineers, Hoisting
& Portable Local No. 101, 3 F.3d 282, 286 (8th Cir. 1993), and the amount is ordinarily
left to the sound exercise of discretion. MacDissi, 856 F.2d at 1060.
While the district court properly concluded that front pay was appropriate because
the animosity shown between the parties made reinstatement impractical, the size of its
award was greater than the evidence justified. Neither Helms nor Ey had worked at the
hotel long. Helms had been there for nineteen months before his termination, and Ey for
five months. The district court made no separate findings of fact on their expected
tenure, but the record indicates that no one had lasted in Helms’ position for more than
nineteen months and the longest tenure in Ey’s position was twenty six months. Both
found employment elsewhere soon after leaving the Adam’s Mark. Helms took the first
job he was offered within four months of his discharge, as an employment technician
with the State of Missouri. His compensation was almost $6000 per year less than at the
hotel, and his responsibilities were much lower. Ey found temporary employment only
a month after leaving the hotel, and in six months his new employer offered him a
permanent position with a salary almost $25,000 more than he received at the Adam’s
Mark. Ey refused this offer, however, because it would
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have required a permanent relocation to Rochester, New York. He then took a job as
an employment counselor with the state of Missouri at an annual salary of approximately
$20,000.
The amount of front pay awarded was too large because it assumes that both men
would have remained at the hotel two or three times as long as any of their predecessors.
The turnover in these positions was high, and an award equivalent to one year of front
pay would be more appropriate, giving Helms the benefit of one year longer than any
predecessor and putting Ey closer to the average range for his position.
B.
Adam’s Mark argues that punitive damages should not have been submitted to the
jury because appellees failed to demonstrate that it engaged in outrageous conduct and
that the amount of punitive damages was excessive and disproportionate to any
misconduct or actual damage.
Missouri law permits punitive damages when the defendant has engaged in
outrageous conduct. Burnett v. Griffith, 769 S.W.2d at 787; Restatement (Second) of
Torts, §908(2) (1979). The issue should be withheld from jury consideration if the
plaintiffs have not produced sufficient evidence for a reasonable finding in their favor.
Wright v. Over-the-Road, 945 S.W.2d 481, 489 (Mo. App. W.D. 1997).
Considerable evidence supported the submission of punitive damages to the jury.
Several witnesses testified that Fred Kummer and other officials showed bias against
blacks and sought to exclude them from management positions and all but the lowest
level positions that were visible to the public. Testimony also showed that top managers
sought to banish music and other atmospheric traits that they associated with blacks and
that African American managers received lower compensation than their white
counterparts. The evidence suggested that top managers acted to prevent African
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Americans from rising above a certain level of employment. Hotel officials intentionally
discriminated against Helms and discharged him because of his race and then discharged
Ey for objecting to that decision as illegal. Retaliating against managers who oppose
racial discrimination undermines the civil rights laws. These actions, many years after
the laws forbidding racial discrimination became widely known, support a finding of
outrageous conduct and an award of punitive damages. The district court did not err by
submitting the issue to the jury.
The amount of any punitive damages awarded should be what is needed to punish
and deter the defendant in addition to the compensatory award. Coleman v. Rahija, 114
F.3d 778, 787 (8th Cir. 1997); citing Smith v. Wade, 461 U.S. 30, 54 (1983). Helms
received a punitive damages award of $3,800,000 and Ey received $1,000,000. These
awards must be examined in light of the twin policy aims of punishment and deterrence.
Call v. Heard, 925 S.W.2d 840, 848 (Mo. banc 1996); citing Pacific Mutual Life
Insurance. Co. v. Haslip, 499 U.S. 1, 19 (1991). Under Missouri law a non-exhaustive
list of factors should be considered, including the severity of the defendant's misconduct,
the presence of any aggravating or mitigating factors, and the financial status of the
defendant. Id at 849.
The evidence of discrimination and retaliation must be considered together with
the other relevant factors in considering the appropriateness of the awards. There was
evidence that a policy of racial discrimination existed under the direction of high level
management at the Adam’s Mark, that Helms was targeted to be fired because he was
black, and that Ey was terminated after refusing to fire Helms because he believed the
decision was racially motivated. Deliberately restricting the opportunities of individuals
on the basis of their race and punishing others for opposing that policy violates the law.
Such action is misconduct that should be deterred and punished. Helms and Ey did not
have a reasonable expectation of a long period of employment at the hotel, however, and
both quickly found other work, even if it was less satisfying. The injunction
appropriately included measures to remedy the violation of the interests protected under
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the civil rights laws, and Helms and Ey were not subjected to personal harassment or
other abusive treatment. The punitive damages awards amounted to five percent of the
corporate parent’s net worth which is a very high ratio. See Cash v. Beltman North
American Co., Inc., 900 F.2d 109, 111 (7th Cir. 1990). The ratio of punitive to
compensatory damages is also very high. See BMW of North America, Inc. v. Gore,
116 S. Ct. 1589, 1602-03 (1996); Haslip, 499 U.S. at 23-24. Although the MHRA does
not place a ceiling on punitive damages, the jury awards substantially exceed those
previously upheld under the Missouri statute: $350,000 in Kimzey, 107 F.3d at 578
(extended period of sexual harassment involving managers and constructive discharge);
$15,000 in In re Estate of Latimer, 913 S.W.2d 51, 52 (Mo. App. W.D. 1995) (discharge
based on handicap status); $400,000 in Kientzy, 990 F.2d at 1054 (discharge based on
gender); and $125,000 in Finley v. Empiregas, Inc. of Potsoi, 975 F.2d 467, 472 (8th
Cir. 1992) (failure to promote based on gender).
Missouri law provides for remittitur when a jury award exceeds what is fair and
reasonable, Mo. Ann. Stat. §537.068 (West 1997), and this procedure applies to punitive
damage awards as well. Mo. Ann. Stat. §510.263(6) (West 1997). Remittitur allows
punitive damages to be set at an equitable amount without a time-consuming and
inefficient retrial of this single issue. Fust v. Francois, 913 S.W.2d 38, 49 (Mo. App.
E.D. 1995). Determining the proper amount to be remitted requires an analysis of
factors identical to those used to assess the reasonableness of the award. See Moore v.
Missouri-Nebraska Express, Inc., 892 S.W.2d 696, 714 (Mo. App. W.D. 1994).
Consideration of these factors demonstrates that a substantial reduction in the punitive
damage awards would be appropriate. A deliberate violation of well-settled law
prohibiting racial discrimination and retaliation deserves both punishment and deterrence
but a penalty of five percent of the corporate parent’s net worth is excessive. After
considering the nature and extent of the misconduct, the impact on the individual
plaintiffs, a reasonable relation between the compensatory and punitive damages, and
an amount sufficient to punish and deter under all the circumstances, we find an
appropriate amount of punitive damages is $380,000 for Helms and $100,000 for Ey.
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C.
Adam’s Mark also objects to some of the injunctive relief awarded by the district
court on the Title VII claims. The court ordered Adam’s Mark to expunge its
employment records of all reference to the circumstances surrounding the firing of Helms
and Ey and to provide both men with letters of recommendation. It permanently
enjoined racial discrimination or retaliation against employees who oppose
discrimination and required management to attend annual education programs on race
discrimination for three years, to make an annual submission for three years to the EEOC
of a statement of compliance and a report of all discipline or discharge of black
employees, and to notify all employees of the scope of relief awarded. It also required
appointment of a neutral monitor to oversee employment decisions at the hotel for three
years. The monitor was to have full access to HBE's employment files and the power
to investigate any claim of racial discrimination. Adam’s Mark argues that the court
went too far in requiring appointment of a neutral monitor because the described
oversight and investigatory authority would go beyond the bounds of the discrimination
shown in this case.
A court may exercise its discretion to fashion injunctive relief to remedy the
effects of racial discrimination. Briscoe v. Fred's Dollar Store, 24 F.3d 1026, 1028 (8th
Cir. 1994). That discretion is not unlimited, however, and is reviewed for abuse. Id.
Provisions of an injunction may be set aside if they are broader than necessary to
remedy the underlying wrong. Easly v. Anheuser-Busch, Inc., 758 F.2d 251, 263 (8th
Cir. 1985).
At oral argument counsel was asked if a monitor had ever been appointed and, if
not, whether court-ordered compliance had been sought. The answer to both
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questions was no.4 The fact that appellees had not pursued the matter indicates that this
provision was not necessary to remedy the harm in this case. The immediate harm to
Helms and Ey was remedied by the order to expunge their employment records of all
reference to their discharge and to provide recommendation letters. The injunction
against continued discrimination is designed to prevent similar misconduct. Appointment
of a monitor would only address speculative future harm. See Easly, 758 F.2d at 263.
There is no indication that any relief is necessary beyond the annual reports to the EEOC
and the other provisions of the injunction. The order requiring appointment of a third
party monitor was broader than necessary, and it is therefore reversed.
D.
Finally, Adam’s Mark objects to the award of attorney fees and costs. A
prevailing party in a Title VII lawsuit may recover attorney fees, 42 U.S.C. § 2000e-
5(k), and other litigation expenses, Pinkham v. Camex, Inc., 84 F.3d 292, 294-95 (8th
Cir. 1996). Adam’s Mark argues that the award should be vacated because it is entitled
to judgment as a matter of law on the retaliatory discharge claim and an award to Helms
would be premature before completion of the new trial it seeks. It has not challenged
the reasonableness of the number of hours, hourly rate, or costs used to compute the
award, however. Since Helms and Ey have prevailed on their claims they are entitled
to fees, and appellant has not demonstrated that the district court abused its discretion
or that the amount awarded is unreasonable. See Catlett v. Missouri
4
On October 31, 1996 appellants petitioned the district court to stay enforcement
of the injunction pending appeal. No action was taken by the district court until after
counsel was asked at oral argument on September 8, 1997 whether a monitor had been
appointed. The district court entered an order on September 12 denying the motion
before it, and appellants moved on September 22 for this court to stay enforcement.
That motion is now dismissed as moot.
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Highway and Transportation Commission, 828 F.2d 1260, 1270 (8th Cir. 1987). The
award of attorney fees and costs is therefore affirmed.
VI.
For these reasons the judgment is affirmed in all respects except for the amounts
awarded for front pay and punitive damages and for that portion of the injunction which
calls for appointment of a third party monitor. We reverse the district court on these
points and remand for further proceedings consistent with this opinion.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
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