Rasheed v. Chrysler Corp. , 445 Mich. 109 ( 1994 )

Riley, J.

Today the Court is called upon to consider a host of issues surrounding a claim for discriminatory termination of employment brought under the Michigan Civil Rights Act.¹ Resolution of these issues requires us to explore the legal and procedural parameters of a discriminatory termination claim involving subsequent offers of reinstatement as they relate to the theory of damage mitigation. We conclude that because the trial court made its decision regarding the appropriate remedy before all factual issues were decided, we remand for resolution of the reasonableness of rejection issue and a reassessment of the appropriate remedy. We also find that because defendants waived the statute of limitations defense, it is unnecessary to deal with plaintiff’s continuing violations claim. Finally, we affirm the trial court’s denial of defendants’ motion for a directed verdict on the intentional discrimination claim.

I

Plaintiff began his employment with Chrysler in 1967 at the Huber facility in Detroit. In 1978, plaintiff converted to the Muslim faith. Three years later, plaintiff was transferred to Chrysler’s Trenton engine plant where, according to plaintiff, he was subjected to religious and racial harassment from the first day when guards at the plant allegedly attempted to stop him from taking an Islamic newspaper into the facility because it was "subversive,” being called "Ayatollah Cockamania” by his supervisor and alleged major antagonist James Senart, the purposeful placing of pork near his work station during the holy month of Ramadan,² numerous remarks about how Muslims should stay in Detroit, attempts to incite anti-Muslim sentiments from the other employees, refusal to replace plaintiff’s broken tools while other employees got new tools, several suspensions with racial and religious overtones, and for other similar acts. Plaintiff reported these incidents to union officials and Chrysler managerial employees on numerous occasions. Although the record contains evidence of several meetings between Chrysler management and plaintiff or his union representatives regarding these alleged occurrences, no legal action was taken by plaintiff before his termination.³

According to plaintiff, the anti-Muslim atmosphere culminated on July 12, 1984, in a setup orchestrated by Senart and intended to get plaintiff fired from his employment. Senart was allegedly baiting plaintiff,⁴ and other employees were improperly removing a storage bin, called a head divider, from plaintiff’s work area. When plaintiff retrieved the head divider, Senart allegedly rebuked him for taking it away from another work station. According to defendants, plaintiff kicked the head divider and threw two engine heads onto the ground with such damaging force that they could not be repaired. Senart wrote up a report on the incident, alleging that plaintiff purposefully destroyed company property, which is a ground for immediate discharge. Shortly thereafter, plaintiff was escorted out of the plant by security guards and placed on disciplinary leave.

Charles Fern, the labor relations manager at the Trenton plant, reviewed Senart’s report and attempted to interview plaintiff’s co-workers.⁵ Fern inspected the two engine heads that were indeed damaged, and he looked at two grooves in the floor of plaintiff’s work area that were allegedly caused by plaintiff’s act of hurling the engine heads to the ground. Fern also spoke to union representatives and other supervisors. As a result of his investigation, Fern concluded that plaintiff had destroyed company property, and the disciplinary leave was upgraded to termination of employment.

Plaintiff filed the instant action in Wayne Circuit Court against Chrysler and Senart for wrongful discharge based on racial and religious discrimination, for intentional infliction of emotional distress, and for fraud or misrepresentation on the part of Senart. Before trial, the court ruled that any damages awarded to plaintiff would be limited to the thirteen-month period of his unemployment preceding his rejection of Chrysler’s reinstatement offer.⁶ At trial, the court granted defendants’ motion for a directed verdict on all but the religious discrimination claim. The jury returned a verdict in favor of plaintiff on the religious discrimination claim and awarded him $51,300 for lost wages and $10,000 for embarrassment or humiliation. In a subsequent hearing conducted without a jury, the court exercised its equitable powers to order Chrysler to reinstate plaintiff as newly hired, with no seniority, within sixty days of the decision.

Defendants appealed the court’s decision not to grant the motion for a directed verdict on the religious discrimination claim, as well as the order requiring plaintiff’s reinstatement as a newly hired employee. Plaintiff cross appealed the court’s refusal to permit recovery for acts occurring before the three-year period of limitation running from the date of termination and for the decision not to reinstate plaintiff with full seniority rights and backpay.

A majority of the Court of Appeals upheld the trial court’s decision not to grant defendants’ motion regarding the religious discrimination claim, and it upheld the trial court’s "equitable power” to fashion the remedy of reinstatement, albeit without any seniority rights. 196 Mich App 196, 200; 493 NW2d 104 (1992). The majority also upheld the ruling of the limitation of backpay to the thirteen-month period before plaintiff’s refusal to accept Chrysler’s reinstatement offer. Finally, the majority concluded that plaintiff failed to establish all of the elements necessary to invoke the "continuing violation” theory, which would have permitted plaintiff to recover for alleged acts that occurred more than three years before the filing of the complaint. The dissenting judge, relying heavily on federal precedent, would have reversed the trial court’s decision to reinstate plaintiff for what he considered to be an unreasonable refusal to accept Chrysler’s "unconditional” offer of reinstatement. Id. at 210.

This Court granted both parties’ application for leave to appeal.⁷

II

A

One year and three months after his termination, Chrysler offered to reinstate plaintiff to his former position with full seniority, but without backpay. The offer provided in its entirety:

In full settlement of this case, M. Rasheed will be offered reinstatement in accordance with his seniority provided he can meet normal requirements. Upon his return to work his discharge shall be reduced to a disciplinary layoff without back pay for the period during which he was away from the plant.

This action of the Appeal Board shall form no basis or precedent for a decision or settlement in any other case.

On the basis of this offer, defendants moved for partial summary disposition to prevent plaintiff from recovering continued backpay⁸ for a failure to accept what they asserted was an "unconditional” offer, as well as to prevent plaintiff’s reinstatement. Plaintiff asserted that the offer was conditional because it did not include backpay and because it offered to convert the termination into a disciplinary layoff rather than remove the blemish from his employment record.⁹

At the hearing on the motion itself, the trial court concluded as follows:

It is hereby ordered, adjudged and decreed that Defendant’s Motion is granted as it concerns limiting backpay that Plaintiff can seek, to that period covering July 19, 1984, up to and including August 26, 1985.

It is further ordered, adjudged and decreed that Defendant’s Motion as it concerns the preclusion of reinstatement for Plaintiff is denied, and Plaintiff will be allowed to present proofs concerning the equitable issue of reinstatement to the trier of fact.

It is further ordered, adjudged and decreed that notwithstanding any ruling on reinstatement of the submission of proofs, Plaintiff’s backpay is limited to the aforementioned July 19, 1984 to August 26, 1985 period.

It is unclear from this ruling what was the basis for the trial court’s conclusion that plaintiff rejected an unconditional offer so that he was not entitled to continued backpay, but that the issue of reinstatement was a question to be decided by the finder of fact. In addressing this issue, we turn first to a discussion of the relevant case law.

B

The law concerning backpay and other remedies in the employment discrimination context has its roots in provisions of the federal Civil Rights Act of 1964, which amended the Civil Rights Act of 1957.¹⁰ The avowed purpose of the new provisions was to "provide the spur or catalyst which causes employers ... to self-examine and to self-evaluate their employment practices and to endeavor to eliminate, so far as possible, the last vestiges of an unfortunate and ignominious page in this country’s history.” United States v N L Industries, Inc, 479 F2d 354, 379 (CA 8, 1973), quoted in Albemarle Paper Co v Moody, 422 US 405, 417-418; 95 S Ct 2362; 45 L Ed 2d 280 (1975). Modeled after a provision in the National Labor Relations Act, the backpay provision was intended to "make whole” anyone suffering from the effects of employment discrimination. Albemarle, supra at 418-419.

Almost a decade later, however, the United States Supreme Court recognized a corollary to the backpay provision on the basis of interim earnings language found in 42 USC 2000e-5(g).¹¹ In the landmark decision Ford Motor Co v EEOC, 458 US 219; 102 S Ct 3057; 73 L Ed 2d 721 (1982), the Supreme Court specifically imposed on a discharged employee the duty to mitigate damages under title VII of the federal Civil Rights Act of 1964¹² by accepting unconditional offers of reinstatement even when the offers do not include backpay.¹³ The majority held:

An unemployed or underemployed claimant, like all other Title VII claimants, is subject to the statutory duty to minimize damages set out in § 706(g). This duty, rooted in an ancient principle of law, requires the claimant to use reasonable diligence in finding other suitable employment. Although the unemployed or underemployed claimant need not go into another line of work, accept a demotion, or take a demeaning position, he forfeits his right to backpay if he refuses a job substantially equivalent to the one he was denied. Consequently, an employer charged with unlawful discrimination often can toll the accrual of back-pay liability by unconditionally offering the claimant the job he sought, and thereby providing him with an opportunity to minimize damages. [Id. at 231-232. Emphasis added.]

According to the majority, this duty provides incentive for employers to voluntarily comply with title VII because it permits the employer to avoid liability for backpay damages and thereby avoid economic waste. Id. at 228-229. Moreover, "the victims of job discrimination want jobs, not lawsuits.” Id. at 230.

Thus, a reinstatement offer, in order to be considered "unconditional” for federal purposes, need not include an offer of retroactive seniority, which may nonetheless be awarded if the claimant is successful in an employment discrimination claim. Id. at 232-233.¹⁴ However, a claimant does not violate the duty to mitigate damages by refusing to accept a position that is an unreasonable distance from his home,¹⁵ to accept a position that is not the substantial equivalent of the one sought or from which he was terminated,¹⁶ or to accept an offer with any other unreasonable condition attached to it.¹⁷ Generally, it is the duty of the trier of fact to weigh the evidence to determine whether a reasonable person would refuse the offer of reinstatement. O’Donnell v Georgia Osteopathic Hosp, Inc, 748 F2d 1543, 1551 (CA 11, 1984), disavowed on other grounds in Lindsey v American Cast Iron Pipe Co, 810 F2d 1094 (CA 11, 1987); Fiedler v Indianhead Truck Line, Inc, 670 F2d 806, 808 (CA 8, 1982).

Under title VII, the federal courts have wide discretion to fashion a remedy in a discriminatory hiring or discharge case.¹⁸ For example, the award of backpay is treated as an equitable remedy to be decided as a matter of law. Albemarle, supra at 417; 2 Larson, Employment Discrimination, § 55.32, pp 11-96.2 to 11-96.4. A court’s decision on the issue of backpay is a matter of discretion, and may only be reversed for abuse. Albemarle, supra at 415-416; Larson, supra, § 55.33, pp 11-96.4 to 11-96.7. At least one circuit court has stated that this discretion permits a denial of backpay accruing before the reinstatement offer as well as front pay. O’Donnell, supra at 1550.¹⁹ On the other hand, a court’s discretion is "hardly . . . unfettered by meaningful standards or shielded from thorough appellate review.” Albemarle, supra at 416.

On the issue of reasonableness, a claimant required to make reasonable efforts to mitigate damages is not held to the highest standards of diligence. Rasimas v Dep’t of Mental Health, 714 F2d 614, 624 (CA 6, 1983), cert den 466 US 950 (1984). Moreover, "the claimant’s burden is not onerous, and does not require him to be successful in mitigation.” Id. Finally, the burden of proof on this question shifts to the employer once a prima facie case of employment discrimination has been established. Id. at 623-624.

C

The approach of state courts on the issue of backpay/continued backpay is in harmony with that utilized by the federal courts.²⁰ First, this jurisdiction recognizes a duty of a discharged employee to mitigate damages. See Shiffer v Gibraltar School Dist Bd of Ed, 393 Mich 190, 197; 224 NW2d 255 (1974) ("The principle of mitigation is a thread permeating the entire jurisprudence ... it is part of the much broader principle of 'avoidable consequences’ ”); Flickema v Henry Kraker Co, 252 Mich 406; 233 NW 362 (1930) (an offer of reinstatement by an employer to a discharged employee was admissible in evidence on the issue of mitigation of damages). Second, the failure of a discharged employee to mitigate damages, whether by seeking other employment or by rejecting an unconditional reinstatement offer, is an affirmative defense to be established by the employer. Higgins v Kenneth R Lawrence, DPM, PC, 107 Mich App 178, 181; 309 NW2d 194 (1981). Third, the question whether an employee was reasonable in not seeking or accepting particular employment is one to be decided by the trier of fact. Id.; Riethmiller v Blue Cross & Blue Shield of Michigan, 151 Mich App 188, 194-195; 390 NW2d 227 (1986); Jenkins v Southeastern Michigan Chapter, American Red Cross, 141 Mich App 785, 797; 369 NW2d 223 (1985).²¹ Fourth, state courts also have a wide discretion to fashion appropriate remedies in wrongful discharge cases. MCL 37.2801(1); MSA 3.548(801)(1).

We conclude, therefore, that the crux of this case concerns the subtle interplay between a court’s broad equitable powers to fashion the appropriate remedy in cases of discriminatory discharge and the factfinder’s function of determining whether the rejection of a reinstatement offer was reasonable. As stated earlier, the trial court, without indicating the basis for its decision, held that plaintiff’s right to continued backpay was terminated by the "unconditional” offer of reinstatement, but that the issue of reinstatement was a question to be decided by the trier of fact. Critical to our effort to reconcile this ruling are the underlying contractual principles relevant to this area of the law. Thus, it is to a consideration of these principles that we next turn.

III

A

Over the years, various legislatures and the courts have added certain restrictions to the contractual relationship between employer and employee in cases where ordinary contract law did not adequately protect important rights of the parties. Examples are the law on discriminatory discharge, which has been the topic of numerous regulations,²² guidelines on the right of labor to organize,²³ and even rules concerning compensation for work-related injuries.²⁴ However, although special rules have been adopted in the context of employment law, the contractual basis of the employment relationship remains intact.²⁵ Therefore, in our attempt to reconcile these two areas of the law in the context of this case, we conclude that the questions that must be addressed are: whether the courts may construe offers of reinstatement using contract principles and, if so, how a ruling on their conditionality affects an employee’s right to reject an unreasonable offer. We are persuaded that the application of contract principles will provide a principled basis for discerning the conditionality of reinstatement offers. However, to ensure the statutory rights of employees against discriminatory employment practices, we must reconcile the contractual aspects of reinstatement offers with their civil rights counterparts. Thus, we first turn to the contractual principles to be applied to reinstatement offers.

A reinstatement offer that is clear on its face may be construed as a matter of law by the courts.²⁶ Where the language of the reinstatement offer is properly characterized as "ambiguous,”²⁷ construction is permitted. Berk v Gordon Johnson Co, 232 F Supp 682, 687 (ED Mich, 1964). Where it becomes necessary to consider the parties’ intent, the inquiry is a question of fact. Liberty Mutual Ins Co v Curtis Noll Corp, 112 Mich App 182, 191; 315 NW2d 890 (1982); Robinson v A Z Shmina & Sons Co, 96 Mich App 644, 649; 293 NW2d 661 (1980); 17A Am Jur 2d, Contracts, § 339, p 346.²⁸ Against this backdrop, we now turn to the interplay between the conditionality of a reinstatement offer and the reasonableness of a rejection.

In a number of federal cases, the courts appear to have decided whether a condition was reasonable so that rejection of the reinstatement offer cut off the right to continued backpay. Careful review of these cases, however, indicates that these decisions were made following review of the trial courts’ rulings on motions for summary judgment,²⁹ on motions for directed verdict,³⁰ or on decisions entered in bench trials, i.e., where the trial court acted as factfinder.³¹ In other words, these decisions derive from factual determinations of the courts or from federal motion practice.

On the basis of the foregoing, we conclude that the issues of conditionality and reasonableness of rejection are discrete under the federal as well as the state systems.³² While the conditionality issue may be decided by the courts as a matter of law under appropriate circumstances, the reasonableness issue must be decided on an independent basis. Thus, the first step in these cases is to determine the import of a reinstatement offer using contract principles. The second step is to assess whether a rejection is reasonable. An unconditional offer of reinstatement may be used as proof of an unreasonable rejection in satisfaction of the employer’s burden. In fact, the federal courts appear to treat unconditional offers as dis-positive. However, if there are any differences between the offer and the previous employment position, with the exception of backpay, then a discharged employee’s act of rejection, if based in part on that difference or condition, precludes a peremptory court ruling.³³ Rather, the question of reasonableness is one of fact that must take into account the particular circumstances of each case.³⁴ Once this two-step inquiry has been completed, a court may exercise its broad equitable powers over fashioning the appropriate remedy. See MCL 37.2801(1); MSA 3.548(801)(1); Ford Motor Co, 458 US 226; Albemarle, 422 US 415-416; Larson, supra, § 55.33, pp 11-96.4 to 11-96.7.

On the other hand, we do not wish to trivialize the importance of the mitigation doctrine. It is well established that a discharged employee must make every reasonable effort to mitigate damages. See Ford Motor Co, supra at 231; Shiffer, supra at 197-198; Riethmiller, supra at 195; Higgins, supra at 181. To the extent that the reasons for rejection of a reinstatement offer are unrelated to the offer and the conditions of employment that the offer contains, such reasons would be outside the purview of title VII and the Michigan Civil Rights Act.³⁵ Moreover, a rejection on grounds unrelated to the employment contained in the reinstatement offer clearly runs afoul of the mitigation doctrine. Because the burden of proving unreasonableness has shifted onto the employer once a discriminatory discharge is established, the onus is on an employer to establish that the true reasons for a rejection are unrelated to any conditions of the employment as are manifest in the reinstatement offer. As the previous discussion has indicated, this requires, first, the interpretation of a reinstatement offer to determine its conditions if they exist and, second, consideration of the reasons for rejection under the circumstances of a particular case.³⁶

At this juncture, there is another inherent conflict that must be considered, to wit: the policy behind creating an incentive for discharged employees to mitigate damages as provided in Ford Motor Co³⁷ and the law of affirmative defenses, which places the burdens of pleading and proof on the party raising them.³⁸ An affirmative defense presumes liability by definition.³⁹ Thus, the burden falls squarely onto the employer to prove mitigating circumstances that would lower a damages award. This burden does not, however, alter a claimant’s burden of proving the elements of a discriminatory hiring or discharge decision.

Today we adopt a middle ground that attempts to reconcile these competing interests. Thus, we hold that once it is established that a reinstatement offer is unconditional, a rebuttable presumption arises that the rejection of the offer is unreasonable. To rebut, an employee must offer reasonable grounds for rejection that are grounded in the employment as contemplated by the reinstatement offer and not a purely personal reason.⁴⁰

In so holding, we shift to a claimant the burden of production, i.e., reasonable grounds for rejection, without shifting the burden of proof on the issue of mitigation. The failure of a claimant to provide a legitimate basis for a rejection forfeits the right to front pay for the reason that a rejection unrelated to conditions of employment under the reinstatement offer would be based on personal choice and would therefore be unprotected by discrimination laws. See pp 129-130. In this way, we honor the policy behind Ford Motor Co without violating the law surrounding the affirmative defense of damage mitigation.⁴¹

B

In this case, the issue of reasonableness concerning plaintiff’s rejection was improperly removed from the jury by way of the grant of partial summary disposition. As defendants point out, an award of front pay and an award of reinstatement are two sides of the same coin.⁴² Thus, the choice between these two remedies, if warranted at all under the circumstances of a particular case, can only be made after the other issues have been resolved. Both center on the question whether a rejection of a reinstatement offer was reasonable.

We are persuaded that the trial court was exercising its broad equitable powers when it removed the continued backpay and the front pay issues from the jury while preserving the issue of reinstatement as a question for the trier of fact. Regardless of the basis for this decision, however, we hold that the trial court erred as a matter of law by deciding the continued backpay issue before the factfinder decided defendants’ ultimate liability for the alleged discriminatory discharge, which must take into account the conditions of the offer and the reasonableness of the plaintiff’s rejection.⁴³

Accordingly, we reverse the Court of Appeals holding in this regard and remand to the trial court for reconsideration of the reasonableness issue and the appropriate remedy.⁴⁴

IV

Plaintiff also appeals the trial court’s ruling that he could not avail himself of the continuing violations doctrine in order to recover for alleged, discriminatory acts occurring before the three-year period of limitation. According to plaintiff, defendants waived the statute of limitations defense for failure to raise it as required by the court rules. Defendants argue that the defense was preserved in its motion for summary disposition. After careful review of the record, we agree with plaintiff that defendants failed to properly raise the defense as it relates to the claim for humiliation damages under the continuing violations doctrine. Thus, it is unnecessary for us to address this claim.

V

Finally, defendants also argue that they were entitled to a directed verdict because the decision to terminate plaintiff was made by someone who based the decision on Senart’s report and not on any discriminatory animus. It is true that a claimant asserting an intentional discrimination claim must establish a discriminatory predisposition of the discharging party and an act in furtherance of this predisposition as part of a prima facie case.⁴⁵

In this case, Charles Fern made the decision to terminate plaintiff for destruction of company property entirely on the basis of the report created by Senart. There are no allegations that Fern engaged in any discriminatory behavior. However, plaintiff offered evidence that Fern was made aware of the alleged discriminatory treatment of plaintiff on numerous occasions. Moreover, the record indicates that other employees refused to discuss the incidents of July 12, 1984, with Fern.

We believe that the trial court properly allowed plaintiff to offer proof that Fern’s reason for discharge was a mere pretext. This Court has already ruled that ordinarily neutral mechanisms for termination may, in unique circumstances, qualify as discriminatory employment practices. In Sumner v Goodyear Tire & Rubber Co, 427 Mich 505, 524-525; 398 NW2d 368 (1986), the plaintiff was discharged for striking a supervisor. Though the decision was made by company officials who were not involved with the alleged harassment, this Court recognized that the harassment may have been orchestrated to cause the plaintiff to commit an offense that would lead to immediate discharge in an attempt to make the termination decision appear to be neutral rather than discriminatory. Id. at 539-542. Thus, the discriminatory animus of the plaintiff’s supervisors was imputed to the company officials who ultimately made the decision to terminate. We believe that the facts of this case likewise constitute unique circumstances.

Accordingly, we agree with the Court of Appeals that reasonable jurors could have reached different conclusions on the issue whether Fern was aware of the alleged discrimination and whether he acted in furtherance of it, which translates into a predisposition to terminate for discriminatory reasons.

CONCLUSION

In sum, we affirm the trial court’s denial of defendants’ motion for a directed verdict on the intentional discrimination claim. However, because the trial court made its decision regarding the appropriate remedy before all factual issues were decided, we remand for resolution of the reasonableness of rejection issue and a reassessment of the appropriate remedy. And, finally, because we find that defendants waived the statute of limitations defense on the continuing violations claim, we do not address plaintiff’s claim.

Reversed and remanded to the trial court for proceedings consistent with this opinion.⁴⁶

Cavanagh, C.J., and Brickley, Boyle, Griffin, and Mallett, JJ., concurred with Riley, J.

1 MCL 37.2101 et seq.; MSA 3.548(101) et seq.

2 The facts indicate that members of the Islamic faith may neither eat nor even expose themselves to pork products during the holy month. Plaintiff asserted that Senart told a co-employee who was eating a pork chop sandwich to give plaintiff some "American food.”

3 Plaintiff was regarded as a good worker, who did more than his share of the engine repair work; however, plaintiff did appear to have problems with his fellow employees. These problems began to escalate when Senart became his supervisor in November of 1983.

4 Plaintiff testified that Senart was "bird-dogging” him, i.e., standing near plaintiff’s station for long periods of time with a disciplinary report sheet in hand waiting for the opportunity to write plaintiff up for violations of company policy or procedure. According to plaintiff, this type of behavior was a frequent manifestation of the discriminatory animus.

5 Interestingly, the record indicates that all of plaintiff’s co-workers in the area refused to speak to Fern. Ultimately, one of plaintiff’s coworkers testified at trial that he saw plaintiff toss the engine heads into a bin in the manner that was common to all similarly situated Trenton employees.

6 Chrysler offered to reinstate plaintiff with full seniority rights and to reduce the charge of destruction of company property to convert his discharge to a disciplinary layoff.

7 443 Mich 868 (1993).

8 Backpay has been broadly defined to include "all monetary awards based on earnings and other fiscal benefits that the plaintiff would have received but for the unlawful employment practice.” 2 Larson, Employment Discrimination, § 55.31, p 11-96.1.

In contrast, front pay is defined as "a monetary award that compensates victims of discrimination for lost employment extending beyond the date of the remedial order.” Id., § 55.39, p 11-96.121. As case law makes clear after Ford Motor Co v EEOC, 458 US 219; 102 S Ct 3057; 73 L Ed 2d 721 (1982), the line of demarcation has been drawn between backpay and the continued right to backpay from the date of a rejection of an unconditional reinstatement offer. Front pay refers to that part of an award that accrues after a decision is rendered.

9 Bennie Wright, plaintiff’s union steward at the time, testified that the reinstatement offer as presented did not permit plaintiff to return "free and clear.”

10 15 Am Jur 2d, Civil Rights, § 3, p 284.

11 42 USC 2000e-5(g) provides:

If the court finds that the respondent has intentionally engaged in or is intentionally engaging in an unlawful employment practice charged in the complaint, the court may enjoin the respondent from engaging in such unlawful employment practice, and order such affirmative action as may be appropriate, which may include, but is not limited to, . . . hiring of employees, with or without back pay, ... or any other equitable relief as the court deems appropriate. . . . Interim earnings or amounts earnable with reasonable diligence by the person or persons discriminated against shall operate to reduce the back pay otherwise allowable. [Emphasis added.]

The remedies listed under article 8 of the Michigan Civil Rights Act, MCL 37.2801 et seq.; MSA 3.548(801) et seq., simply permit "appropriate injunctive relief or damages, or both,” MCL 37.2801(1); MSA 3.548(801)(1), reasonable costs and attorney fees, MCL 37.2801(3); MSA 3.548(801)(3) and MCL 37.2802; MSA 3.548(802), and any other "direct or immediate legal or equitable remedies in the courts of this state.” MCL 37.2803; MSA 3.548(803). There is no specific statutory provision requiring claimants to mitigate their damages by accepting unconditional offers of employment.

12 42 USC 2000a et seq. Equal employment opportunities are addressed in 42 USC 2000e et seq.

13 It should be noted that the weight of federal authority holds that backpay should be awarded if discrimination is found unless there are special circumstances dictating otherwise. See Albemarle, supra at 419-420; Los Angeles Water & Power Dep’t v Manhart, 435 US 702, 719; 98 S Ct 1370; 55 L Ed 2d 657 (1978); Rasimas v Dep’t of Mental Health, 714 F2d 614, 626 (CA 6, 1983); Head v Timken Roller Bearing Co, 486 F2d 870, 876 (CA 6, 1973); McCormick v Attala Co Bd of Ed, 541 F2d 1094 (CA 5, 1976). Special factors that would constitute exceptional circumstances and prevent backpay awards are exceedingly rare. Albemarle, supra at 417; Meadows v Ford Motor Co, 510 F2d 939, 945 (CA 6, 1975). Theoretically, the issue of mitigation as it relates to a reinstatement offer, and not other efforts to secure alternative employment, only concerns circumstances occurring on or after the date of the reinstatement offer. Thus, any entitlement to backpay before the date of the offer is not affected.

14 But see Franks v Bowman Transportation Co, 424 US 747, 766; 96 S Ct 1251; 47 L Ed 2d 444 (1976) (although discretion to fashion a remedy is broad, "ordinarily [awards of seniority rights] will be necessary to achieve the 'make-whole’ purposes of the Act”).

15 See, e.g., NLRB v Oman Construction Co, Inc, 144 NLRB 1534 (1963), enforced 338 F2d 125 (CA 6, 1964), cert den 381 US 925 (1965); Jackson v Wheatley School Dist, 464 F2d 411 (CA 8, 1972).

16 See Rasimas, n 13 supra at 625.

17 See Toledo v Nobel-Sysco, Inc, 892 F2d 1481 (CA 10, 1989) (a requirement that a claimant drop a title VII claim and pass polygraph and physical tests in an offer precluded a finding that the offer was unconditional); Kilgo v Bowman Transportation, Inc, 789 F2d 859 (CA 11, 1986) (an invitation to apply for a position was not an unconditional offer of employment). See also Taylor v Teletype Corp, 648 F2d 1129, 1139 (CA 8, 1981), cert den 454 US 969 (1981), wherein the United States Court of Appeals for the Eighth Circuit ruled:

The failure to accept an offer of reinstatement does not automatically terminate an employee’s right to relief.

"In determining whether the right to relief extends beyond the date of an offer of reinstatement, the trial court must consider the circumstances under which the offer was made or rejected, including the terms of the offer and the reasons for refusal.” [Id. at 1139. Citation omitted.]

But see Giandonato v Sybron Corp, 804 F2d 120 (CA 10, 1986) (a refusal to accept an offer of reinstatement in an age discrimination case for illness of claimant’s wife, generalized aversion to working under a district manager, and generalized assertions of the "uncertainty” of the offer was unreasonable); Morvay v Maghielse Tool & Die Co, 708 F2d 229 (CA 6, 1983) (an offer of reinstatement conditioned only upon the claimant’s submission to a psychiatric examination in light of questionable past behavior terminated continued backpay liability); Boomsma v Greyhound Food Management, Inc, 639 F Supp 1448 (WD Mich, 1986) (the rejection of reinstatement offer because it did not include backpay and did not offer compensation for certain medical expenses, and because claimant was happy with his new job, precluded an award of continued backpay).

One point worthy of note is that the Sixth Circuit has previously recognized that an offer of reinstatement may be insufficient to bar awards of continued backpay if it is conditioned upon, among other things, the failure to restore seniority rights. Morvay, supra at 232.

18 On the issue of recoverable damages in the federal system generally, see Larson, n 8 supra, §§ 55.00-55.46, pp 11-57 to 11-96.141.

19 The language in O'Donnell upon which defendants rely is dicta. First, the Eleventh Circuit’s opinion on the backpay/front pay issue is based solely on "logic.” 748 F2d 1550. Second, the court reversed the district court’s decision to remove from the jury the question whether it was reasonable for the plaintiff to reject the reinstatement offer. Id. at 1551.

20 The Michigan Civil Rights Act, though clearly modeled after title VII, provides an independent basis for state claims of wrongful discharge. Although federal precedent is persuasive, it is not binding on state courts. See Clark v Uniroyal Corp, 119 Mich App 820, 824; 327 NW2d 372 (1982); Northville Public Schools v Civil Rights Comm, 118 Mich App 573, 576; 325 NW2d 497 (1982). Moreover, the legislative intent behind title VII has been interpreted to permit aggrieved employees to pursue remedies under state and federal laws independent of a title VII claim. See Alexander v Gardner-Denver Co, 415 US 36, 48-49; 94 S Ct 1011; 39 L Ed 2d 147 (1974).

Nonetheless, this Court has already relied on federal authority as being persuasive in this area. See Dep’t of Civil Rights ex rel Cornell v Edward W Sparrow Hosp Ass’n, 423 Mich 548, 560-563; 377 NW2d 755 (1985) (opinion of Williams, C.J.).

21 Cf. Sparrow, n 20 supra (the refusal to comply with a discriminatory dress code as a precondition to reinstatement did not run afoul of the duty to mitigate damages). See also SJI2d 105.41, which provides in pertinent part:

Whether the plaintiff was reasonable in not seeking or accepting particular employment is a question for you to decide. However, the plaintiff is obligated to accept an offer of employment which is of "a like nature.” In determining whether employment is of "a like nature,” you may consider, for example, the type of work, the hours worked, the compensation, the job security, working conditions, and other conditions of employment.

(If you find that the defendant unconditionally offered to [hire/promote/reinstate] the plaintiff to the position [previously held/applied for] or a substantially equivalent position, you shall not award damages for loss of compensation after the date the plaintiff rejected the offer. Substantially equivalent position means one with virtually identical promotion opportunities, compensation, job responsibilities, working conditions, and status. An offer is not unconditional if the job offered involves discriminatory conditions.)

The defendant has the burden of proving that the plaintiff failed to mitigate [his/her] damages for loss of compensation.

22 Examples include title VII of the federal Civil Rights Act, 42 USC 2000e et seq.; the Michigan Fair Employment Practices Act, MCL 423.301 et seq.; MSA 17.458(1) et seq. (since repealed and replaced by the Michigan Civil Rights Act); and the Michigan Handicappers’ Civil Rights Act, MCL 37.1101 et seq.; MSA 3.550(101) et seq.

23 29 USC 151 et seq. (the National Labor Relations Act).

24 MCL 418.101 et seq.; MSA 17.237(101) et seq. (the Worker’s Disability Compensation Act).

25 For example, the employment relationship has always been called an employment contract. The conflict between the presumption of employment at will and termination for just cause relies heavily on contract principles such as express and implied promises, oral promises, and interpretation. Whatever language the courts use in issues surrounding this presumption, it is clear that it is nothing less than a "gap-filler,” i.e., a term supplied by the courts in the absence of a specific provision. See, e.g., Restatement Contracts, 2d, § 204, pp 96-97, which provides:

When the parties to a bargain sufficiently defined to be a contract have not agreed with respect to a term which is essential to a determination of their rights and duties, a term which is reasonable in the circumstances is supplied by the court.

See also MCL 440.2201(1); MSA 19.2201(1) ("A writing is not insufficient because it omits or incorrectly states a term agreed upon but the contract is not enforceable . . . beyond the quantity of goods shown in such writing”); 17A Am Jur 2d, Contracts, § 195, p 205.

One of the two theories of just-cause employment is "grounded solely on contract principles 'relative to the employment setting.’ ” See, generally, Rood v General Dynamics Corp, 444 Mich 107, 118; 507 NW2d 591 (1993), and authorities cited therein.

Even the duty to mitigate damages derives from contract law. See, e.g., Calamari & Perillo, Contracts (3d ed), § 14-15, pp 610-613.

26 See Dykema v Muskegon Piston Ring Co, 348 Mich 129, 138; 82 NW2d 467 (1957); Kilburn v Union Marine & General Ins Co, Ltd, 326 Mich 115, 118; 40 NW2d 90 (1949); In re Loose, 201 Mich App 361, 366; 505 NW2d 922 (1993); 17 A Am Jur 2d, Contracts, §§ 337, 339, pp 342-344, 346.

27 Raska v Farm Bureau Mutual Ins Co of Michigan, 412 Mich 355, 362; 314 NW2d 440 (1982) ("A contract is said to be ambiguous when its words may reasonably be understood in different ways”); Goodwin, Inc v Orson E Coe Pontiac, Inc, 392 Mich 195, 212; 220 NW2d 664 (1974); Adkins v Home Life Ins Co, 143 Mich App 824; 372 NW2d 671 (1985); 17A Am Jur 2d, Contracts, §§ 338, 356, pp 345, 374-375.

28 The primary goal in the construction or interpretation of any contract is to honor the intent of the parties. See Stine v Continental Casualty Co, 419 Mich 89, 112; 349 NW2d 127 (1984); Brauer v Hobbs, 151 Mich App 769, 774; 391 NW2d 482 (1986).

29 See Fiedler, supra at 809 (decided under PR Civ P 56[e]); Giandonato, n 17 supra at 121-122.

30 See, e.g., O’Donnell, supra.

31 See, e.g., Rasimas, supra at 620. See also Toledo, n 17 supra at 1493; Boomsma, n 17 supra.

32 The various circuits’ holdings are not without anomalies. See, e.g., Stanfield v Answering Service, Inc, 867 F2d 1290 (CA 11, 1989). In Stanfield, the Eleventh Circuit reversed an award of reinstatement, but affirmed the denial of interim and front pay. Our review of federal precedent reveals that the district court in Stanfield had the discretion to choose between reinstatement and front pay once the jury concluded that the plaintiff was the victim of age discrimination. The appellate court, however, stated "that Stanfield’s rejection of the offer was unreasonable is implicit in the trial court’s refusal to grant Stanfield interim and frontpay.” Id. at 1295. Thus, the claimant was left without any backpay, front pay, or reemployment.

This ruling effectively wipes out the plaintiff’s right to backpay even for the period preceding the offer of reinstatement. If rejection of the offer was unreasonable, this unreasonableness did not arise from the date that the plaintiff was terminated. It is our belief that the Eleventh Circuit mistakenly assumed that the district court relied on some fact-finding power rather than on its equitable power to fashion an appropriate remedy. In turn, the appellate court rested its reversal of the reinstatement on a nonexistent factual finding, which thereby enabled it to ignore the fact that the reasonableness question was one for the jury and not for the courts absent some appropriate form of motion practice. Although we agree that avoidance of the duty to mitigate should cut off benefits, removal of the question from the factfinder disregards the weight of federal authority, improperly shifts the burden of proving mitigation onto claimants, and runs afoul of the primary purposes of title VII, to wit: eradication of discriminatory employment practices and making the victims of such practices whole for injuries suffered.

If for no other reason, we decline to follow Stanfield on the basis that the Michigan Civil Rights Act provides a basis of recovery independent of the provisions of title VII. See n 20.

33 An unconditional job offer presumes that the employment is the job previously sought by an applicant or, in the case of a discharge, the old job. Therefore, the offer of a different job would constitute either a condition to the offer’s acceptance or a factor that may provide the employee with a reasonable excuse to reject the offer. For purposes of simplicity, we hold that a different job may provide an employee with a valid reason to reject an employer’s offer, which is to be decided under the reasonableness inquiry.

34 See Fiedler, supra at 808; Taylor, n 17 supra at 1139; Rasimas, supra at 623. See also Jenkins, Riethmiller, and Higgins, supra.

It matters little whether the issue is framed as a reasonable/ unreasonable condition or as a reasonable/unreasonable rejection as long as the courts’ power to construe contracts is not extended to remove the rejection question from the finder of fact.

35 Under title VII, the duty to mitigate damages has been codified at 42 USC 2000e-5(g). See n 11. Thus, there is statutory federal authority to indicate that unreasonable rejections were never intended to benefit from the protections of title VII. In this jurisdiction, the mitigation doctrine has been adopted in the discriminatory discharge context by cases such as Riethmiller and Higgins, supra. Although the duty to mitigate has not been codified in the Michigan Civil Rights Act, we nonetheless conclude that rejections of a reinstatement offer for reasons unrelated to the terms of that offer are unreasonable.

For examples of rejections found to be unrelated and therefore unreasonable in the federal courts, see n 17.

36 As is clear particularly in some of the federal cases cited previously, an employer is not precluded from having unsupported claims of reasonable rejection dismissed under court rules such as MCR 2.116(C)(10), which permits partial or total dismissal of a claim, made as a matter of law, where there is no genuine issue of material fact. See 7 Callaghan’s Michigan Pleading & Practice (2d ed), § 43.04.10, p 11. The purpose of the court rule is to avoid "expense, vexation, and delay” and to eliminate "improper issues.” Id., § 43.01.50, p 3. Finally, this does not shift the burden of proving the reasonableness issue onto the employee. Rather, the burden is one of production: specifically, the production of evidence.

A party opposing a motion for summary disposition based on the lack of a genuine issue of material fact has the burden of coming forth with some evidentiary proof that a genuine issue of fact does exist in order to avoid the granting of the summary judgment. Mere conjecture does not meet the burden of presenting evidence .... The party opposing a motion for summary disposition based on an alleged lack of genuine issue as to any material fact must at least assert that such a dispute exists and support the allegation with some independent evidence .... [Id., § 43.05.50, p 33.]

37 The Ford Motor Co case involved two job applicants who were offered positions after they had been recalled by their previous employer. Rather than accept Ford Motor’s reinstatement offer, the claimants opted to remain with their then-present employer. Later, the claimants were again laid off, resuscitating their claims for front pay. Accordingly, the rejections of the job offers were based on a personal choice to remain with the present employer and not for any reason arising from the terms of the defendant’s offers. 458 US 236. On the basis of this procedural posture, the United States Supreme Court did not decide the conflict between the incentive to mitigate damages and the burdens of proof concerning affirmative defenses. Rather, the Court sought to prevent the "perverse result of requiring the employer ... to insure the claimant against the risk that the employer might win at trial” in cases where the claimant has found an equivalent or a better position before the job offer and chooses to keep that employment and the possibility of recovery in the discrimination claim rather than accept a defendant employer’s attempt to make amends. Id. at 238. See also 239-240 and n 26. In short, claimants who have the option of accepting an unconditional offer or of retaining equivalent employment secured after the discriminatory act forfeit any right to front pay when they reject the defendant’s offer.

There was a third claimant in the Ford Motor Co case whose employment was not the substantial equivalent of the job sought with defendant. However, careful review of the opinion indicates that the third claimant’s interests were not addressed in the majority’s analysis, being parts ii-v of the majority opinion. Presumably, her claim for front pay damages in excess of her earnings at the subsequent employment remained.

38 See pp 123-124.

39 See Black’s Law Dictionary (5th ed), p 55 ("new matter which, assuming the complaint to be true, constitutes a defense to it”) (emphasis added).

40 The reinstatement offer in this case required plaintiff to accept a blemish on his work record: the termination was to be reduced to the penalty of disciplinary layoff. Facts on record indicate that previous disciplinary action is considered when new controversies arise and that a prior record justifies harsher penalties for the controversy at hand.

41 The approach we adopt today is modeled after the burden-shifting analysis first created in McDonnell Douglas Corp v Green, 411 US 792; 93 S Ct 1817; 36 L Ed 2d 668 (1973), a race discrimination case. Recounted briefly, a claimant in an employment discrimination case bears the burden of proving by the preponderance of the evidence that a prima facie case of discrimination exists. If successful, the burden shifts to the defendant to articulate a legitimate, nondiscriminatory reason for its actions. Once a valid reason is given, the burden shifts back to the employee to prove that the reason given by the employer is a mere pretext. See also Clark v Uniroyal Corp, n 20 supra.

In this case we recognize the same shifting of burden, only we reverse it to respect the fact that the initial burden of proof regarding the damages mitigation issue lies with the employer rather than with the employee or applicant. We also point out that the second step is more accurately characterized as the shifting of the burden of production (i.e., producing a valid business reason) than as the shifting of the burden of proof. See n 36. Furthermore, this shifting burden analysis does not preclude the grant of summary disposition on the basis of the absence of any genuine issue of material fact. See Clark, supra at 825.

42 Professor Larson states:

"Front pay” is a monetary award that compensates victims of discrimination for lost employment extending beyond the date of the remedial order. Front pay is considered the equitable equivalent of reinstatement and it is awarded in two situations: first, when reinstatement cannot occur immediately because of the temporary lack of availability of a position or the undesirability of "bumping” another employee; and second, when the remedy of reinstatement is simply not appropriate, usually because of the hostility that has developed between the parties. [Larson, supra, § 55.39, p 11-96.121.]

43 See Cardinal Mooney High School v Michigan High School Athletic Ass’n, 437 Mich 75, 80; 467 NW2d 21 (1991) (questions decided as a matter of law are subject to review de novo).

44 Defendants also argue that awards of reinstatement may cause unfair burdens on employers and other employees when reinstatement requires demoting an employee who filled the position of the terminated employee. We submit that this policy consideration, though valid, is within the discretion of that court called upon to fashion an appropriate remedy. As mentioned earlier, the primary purposes of title VII and related laws are to eradicate discrimination in the workplace and to make the injured employee whole. In light of this solemn trust, we cannot adopt a general rule precluding reinstatement where it would affect the seniority rights of other employees. Cf. Franks, n 14 supra.

45 See Schipani v Ford Motor Co, 102 Mich App 606, 617; 302 NW2d 307 (1981), disavowed on other grounds in Kostello v Rockwell Int’l Corp, 189 Mich App 241; 472 NW2d 71 (1991); McDonald v Union Camp Corp, 898 F2d 1155, 1160-1161 (CA 6, 1990); Hawkins v Ceco Corp, 883 F2d 977, 980 (CA 11, 1989).

46 Our brother Justice Levin makes several points in his separate opinion that deserve consideration. Justice Levin indicates that the remedy provision of the Michigan Civil Rights Act does not afford the same wide discretion to fashion a remedy as the federal courts enjoy under the federal Civil Rights Act. We disagree. First, the remedy statute at issue, MCL 37.2801(1); MSA 3.548(801)(1), provides for injunctive relief as well as for damages. In addition, MCL 37.2803; MSA 3.548(803) provides for "direct or immediate legal or equitable remedies . . . .” (Emphasis added.) However, these terms are not defined in the statutes nor could we find state precedent providing definitions.

The Michigan Civil Rights Act is fairly succinct. Thus, we are convinced that the Legislature intended that our courts look to the more comprehensive federal statutes and precedent for guidance. In fact, state courts have already ruled that federal precedent, although not binding, is persuasive authority. Robson v General Motors Corp, 137 Mich App 650, 653; 357 NW2d 919 (1984), rev’d on other grounds in Sumner, supra; Clark, n 20 supra. The federal remedy statute, 42 USC 2000e-5(g) gives courts the power to enjoin discriminatory practice, order reinstatement or hiring of employees with or without backpay, or "any other equitable relief as the court deems appropriate.” Not only are we convinced that the spirit behind the Michigan act emulates that behind the federal Civil Rights Act, but we could find no direct support indicating a difference between the remedy provisions of the Michigan statutes and the federal ones.

Second, we recognize from cases such as Albemarle that a court’s discretion is " 'hardly . . . unfettered by meaningful standards or shielded from thorough appellate review.’ ” See p 123. The viewpoint of the separate opinion seeks to remove guidelines found in federal precedent without offering any meaningful standards to fill the void. We also note the fact that the separate opinion relies exclusively on federal precedent to make this point. The approach we take today is intended to ensure that victims of discrimination are made whole, and a fair degree of discretion is necessary to implement this goal.

Third, we advocate a clear procedure for resolving matters of this nature rather than countenance a convoluted jury question that includes issues of law, as well as issues of fact, in the melange. It is our design to remove the type of uncertainty caused by the lack of clear procedural guidelines that is evident from the specific facts of this case.