Kachmar v. SunGard Data Sys Inc

Opinions of the United
1997 Decisions States Court of Appeals
for the Third Circuit
3-26-1997
Kachmar v. SunGard Data Sys Inc
Precedential or Non-Precedential:
Docket 96-1119
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UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
No. 96-1119
LILLIAN KACHMAR,
Appellant
v.
SUNGARD DATA SYSTEMS, INC.;
LAWRENCE A. GROSS; DONNA J. PEDRICK
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. No. 95-cv-01282)
Argued September 10, 1996
Before: SLOVITER, Chief Judge,
COWEN and LEWIS, Circuit Judges
(Filed March 26, 1997)
Lek Domni (Argued)
Philadelphia, PA l9l02
Attorney for Appellant
Jami Wintz McKeon (Argued)
Julie A. Uebler
Of Counsel:
Morgan, Lewis & Bockius LLP
Philadelphia, PA 19103
Attorneys for Appellees
OPINION OF THE COURT
SLOVITER, Chief Judge.
Lillian Kachmar, who held the position of senior in-
house counsel for defendant SunGard Data Systems, Inc. before her
employment was terminated, filed this action arising out of that
termination. She raised a claim of retaliatory discharge in
violation of Title VII of the Civil Rights Act of 1991, 42 U.S.C.
§ 2000(e), et seq., as well as a claim of sex discrimination
under that statute, and included a pendent state law claim of
tortious interference with prospective contractual relations. We
address for the first time the application of Title VII to a
plaintiff who formerly occupied an in-house counsel position.
I.
FACTUAL AND PROCEDURAL BACKGROUND
To the extent that this appeal comes to us after the
district court granted defendants' motion to dismiss the Title
VII retaliation claim and the state law claim, the factual record
is necessarily limited and we must decide the appeal primarily on
the basis of the allegations of the plaintiff's complaint.
Appellee SunGard Data Systems, Inc. is a computer
services company that specializes in proprietary investment
support systems and computer disaster recovery. On April 2,
1991, Kachmar, a 1978 Villanova Law School graduate, was hired to
provide legal services for the parent company and its five
subsidiaries. Her immediate supervisor was defendant Lawrence
Gross, SunGard's General Counsel. Defendant Donna Pedrick was
corporate Vice President of Human Resources. On December 31,
1991, after nine months with the company, Kachmar received her
first and only written performance appraisal from Gross. In that
review, Gross gave her a favorable overall rating and stated that
she was a valuable addition to the legal department. In fact,
Kachmar exceeded her set goals for billable hours each year she
was employed by SunGard, which entitled her to receive incentive
bonuses. She was also given annual merit increases to her base
salary every year she was employed.
Kachmar's employment with SunGard was uneventful until
the Fall of 1992, when a series of events took place that brought
her into conflict with SunGard senior management and with Gross
in particular. The first incident concerned a disagreement over
the salary level of a new attorney at SunGard, Sarah Armstrong,
whom Kachmar had helped recruit as the third lawyer in the in-
house counsel's office. Kachmar alleges that she was misled by
Gross concerning the available salary for Armstrong and that she
discussed with Pedrick raising Armstrong's salary to a level
commensurate with Armstrong's qualifications. At that time,
Kachmar further complained to Pedrick that she herself was being
under-compensated according to SunGard's internal practices and
procedures.
The second incident arose when Kachmar, who was asked
for her opinion, advised SunGard to give a bonus to one of the
female sales representatives of SunGard Recovery, one of the
subsidiaries, over the opposition of the employee's male
managers. She alleges that because of her advice she was labeled
a "feminist" and a "campaigner for women's rights," terms meant
to be derogatory. App. at 15.
In the course of her work, Kachmar observed that
SunGard Recovery had "no real representation of females in upper
management," App. at 15, and she advised Pedrick and Gross that
this situation could render the company ineligible for certain
federal contracts. Both declined to talk to the president of the
subsidiary, Ken Adams, but suggested Kachmar could do so.
Kachmar did, and alleges that Adams then had a "stormy
interchange with Pedrick and Gross demanding to know why he had
not received EEO advice from them earlier." Id. SunGard
Recovery subsequently added women to its upper management.
The final incident occurred when SunGard Recovery
sought to fire an African-American Senior Vice President, and
Kachmar tried to advise the new president of SunGard Recovery,
Michael Mulholland, regarding the EEO implications of the firing.
She alleges she was told that the company "should just pay [the
individual] off." Id. at 16.
On January 15, 1993, Kachmar met with Gross to receive
her annual review. He told her that she was not on "the
management track" because of her "conduct." Id. at 17. Gross
did not criticize her competence as Senior Counsel, but instead
engaged in a diatribe against her for "campaigning on women's
issues," referring to her complaints about her own and
Armstrong's levels of compensation, and for "feminist
campaigning" in her handling of the matter of the female employee
of SunGard Recovery. Id. at 17-18. Following this meeting,
Gross began to ignore Kachmar and interacted with her as little
as possible except in formal settings, despite Kachmar's attempts
to "clear the air." Id. at 18.
Kachmar continued in her position as Senior Counsel
after her meeting with Gross, though their relationship was
strained. In mid-1993, Kachmar further advised the president of
the Recovery Group that the Vice President, William Baumont,
should be counseled regarding his treatment of women because
there had been complaints about his conduct, but her advice was
received with hostility.
In October, 1993, Kachmar sought advice from Pedrick
concerning her relationship with Gross, and Pedrick advised
Kachmar to begin looking for a job elsewhere. Kachmar alleges
that although she was still employed, Gross offered her job to a
male attorney in November, 1993, who declined the offer. About
two months later, on January 5, 1994, Kachmar was notified of her
termination for alleged performance problems. She contends that
the manner of her dismissal contravened company policy and
procedure, which required written notice and an opportunity to
cure the alleged deficiencies. Although Sarah Armstrong was
promoted to the position of Senior Counsel, Kachmar contends that
in fact she was replaced by a male attorney, Michael Zuckerman.
Following her termination, Kachmar sought employment
with a Philadelphia law firm. Kachmar asserts that Armstrong
intentionally sabotaged Kachmar's efforts to obtain employment by
telling a member of the firm that Kachmar was planning to sue
SunGard.
After exhausting her administrative remedies, Kachmar
filed a complaint alleging that SunGard, Gross, and Pedrick
(hereafter collectively referred to as SunGard) illegally
terminated her in retaliation for her exercise of protected
rights under Title VII, and that SunGard engaged in a pattern and
practice of sex discrimination. She also included a Pennsylvania
common law claim for tortious interference with prospective
contractual relations. Defendants filed a motion to dismiss
and/or for partial summary judgment. The district court granted
the motion to dismiss the Title VII retaliation and state law
tort counts and granted summary judgment to defendants on the
remaining Title VII claim of sex discrimination. Our review is
plenary.
II.
DISCUSSION
A. Retaliatory Discharge
1. Causal Link
The pertinent provision of Title VII states that: "[i]t
shall be an unlawful employment practice for an employer to
discriminate against any of his employees . . . because [the
employee] has opposed any practice made an unlawful employment
practice by this subchapter." 42 U.S.C. § 2000e-3(a) (1993). In
her retaliation claim, Kachmar contends that she was discharged
because she voiced her opposition to SunGard's unlawful
employment practices regarding both herself and others.
In order to establish a prima facie case of
discriminatory retaliation under Title VII, Kachmar must show 1)
that she engaged in protected activity, 2) that the employer took
adverse action against her, and 3) that a causal link exists
between the protected activity and the employer's adverse action.
Charlton v. Paramus Bd. of Educ., 25 F.3d 194, 201 (3d Cir.),
cert. denied, 115 S.Ct. 590 (1994); Jalil v. Avdel Corp., 873
F.2d. 701, 708 (3d Cir. 1989), cert. denied, 493 U.S. 1023, 110
S.Ct. 725 (1990).
The district court held that Kachmar's complaint
adequately pled the first two elements of such a claim but that
her complaint did not satisfy the third. The court held that, as
a matter of law, Kachmar could not prove the requisite causation,
noting that the termination of her employment occurred almost a
year after the alleged protected activity took place.
Cases in which the required causal link has been at
issue have often focused on the temporal proximity between the
employee's protected activity and the adverse employment action,
because this is an obvious method by which a plaintiff can
proffer circumstantial evidence "sufficient to raise the
inference that her protected activity was the likely reason for
the adverse action." Zanders v. National R.R. Passenger Corp.,
898 F.2d 1127, 1135 (6th Cir. 1990); see Jalil, 873 F.2d at 708.
We have stated, however, that where there is a lack of temporal
proximity, circumstantial evidence of a "pattern of antagonism"
following the protected conduct can also give rise to the
inference. Robinson v. Southeastern Pa. Transp. Auth., 982 F.2d
892, 895 (3d Cir. 1993). These are not the exclusive ways to
show causation, as the proffered evidence, looked at as a whole,
may suffice to raise the inference. See, e.g., Waddell v. Small
Tube Products, Inc., 799 F.2d 69, 73 (3d Cir. 1986).
The district court here analyzed the circumstantial
evidence -- the gap in time between Kachmar's protected
activities and her termination -- and determined it lacked the
requisite proximity. It then proceeded to assess whether there
was a pattern of antagonism that could allow a fact-finder to
infer retaliatory animus. It found no such pattern.
In dismissing on the ground that the facts pled in
Kachmar's complaint, even if proven, would be insufficient to
show the required causal link, the district court took too narrow
a view of the temporal proximity needed to satisfy the causal
link element at this early stage of the case. It failed to
accept the facts alleged in the complaint as true and construe
those facts in the light most favorable to the plaintiff. See
Markowitz v. Northeast Land Co., 906 F.2d 100, 103 (3d Cir.
1990).
The district court set the date of Kachmar's last
protected activity in the Fall of 1992, when her discussions with
SunGard management concerning the EEO implications of their
personnel policies began. This failed to take into account the
activities that Kachmar alleged occurred in mid-1993, when she
further attempted to counsel SunGard of the EEO implications of
management's treatment of women. If the mid-1993 date for the
protected activity were used, there would be at most a gap of six
months until Kachmar's official termination on January 5, 1994,
rather than the gap of more than a year that the district court
found.
Moreover, Kachmar claims she was advised by Pedrick to
start looking for another job in October, 1993, only several
months after her last protected activity. Her allegation that
she was told her position had been offered to a male in November,
1993, shortly after her meeting with Pedrick, would, if proven,
show that Sungard had resolved to discharge her shortly after the
latest activity. Indeed, Gross' statements to Kachmar as early
as January 15, 1993 that she was being taken off the "management
track," which she claims was a reaction to her protected
activity, would further support her claim that it was her
protected activity that placed her in disfavor, ultimately
leading to her termination.
SunGard asserts that even a four month gap would be too
long to allow an inference of causation. Our cases set no
parameters but were decided in the context of the particular
circumstances before us. See, e.g., Robinson, 982 F.2d at 894-95(expressing doubt that discharge could be causally linked to an
employee's protected activity taken almost two years previously,
absent the intervening pattern of antagonism); Jalil, 873 F.2d at
708 (holding that interval of two days between employee's EEOC
complaint and discharge of plaintiff sufficient to create an
inference of causation).
It is important to emphasize that it is causation, not
temporal proximity itself, that is an element of plaintiff's
prima facie case, and temporal proximity merely provides an
evidentiary basis from which an inference can be drawn. The
element of causation, which necessarily involves an inquiry into
the motives of an employer, is highly context-specific. When
there may be valid reasons why the adverse employment action was
not taken immediately, the absence of immediacy between the cause
and effect does not disprove causation.
SunGard may have recognized that termination of Kachmar
immediately after her January 15, 1993 meeting with Gross could
have resulted in disruption of the small, three-attorney in-house
counsel's office. After all, Kachmar was senior in-house
counsel, not one of many interchangeable employees on an assembly
line. We do not know whether she was involved in long-term
negotiations or litigation that could have deterred Sungard from
terminating her immediately.
By summarily concluding that there was too great a gap
between Kachmar's protected acts and her termination, the
district court failed to give Kachmar the opportunity to delve
further into the facts by discovery. SunGard relied on appellate
court cases holding that the time between the protected activity
and the alleged retaliation was insufficient to raise the
inference of causation. These cases arose following a greater
opportunity for factual exploration than Kachmar was given here,
where the court dismissed on the basis of the complaint alone.
See, e.g., Hughes v. Derwinski, 967 F.2d 1168, 1174 (7th Cir.
1992) (granting summary judgment because disciplinary letter
issued four months after discrimination charge filed insufficient
causal link to employer action); Cooper v. City of North
Olmstead, 795 F.2d 1265, 1272 (6th Cir. 1986) (reversing after a
bench trial and holding that discharge four months after filing
of discrimination charge not causally linked to adverse
employment action).
We need not consider the district court's secondary
determination that there was no "pattern of antagonism" that
would give rise to an inference of improper motive because
Kachmar alleged enough direct evidence of a retaliatory animus on
the part of Gross independent of her contention that their
relationship became strained after their January 1993 meeting.
Kachmar alleges that at the January 15, 1993 review,
Gross told her that she was not on the management track because
of her complaints concerning her salary, her "campaigning on
women's issues," and her handling of the female employee matter,
which Gross cited as an additional example of feminist
campaigning. These statements, if proven, would present direct
evidence of Gross' retaliatory motives because they would permit
a factfinder to infer that Kachmar was being taken off the
management track because of her opposition to the manner in which
SunGard was treating her and other women in the organization, and
that her final dismissal was just a matter of time. Such
statements could be interpreted to show that Gross placed
"substantial negative reliance on an illegitimate criterion in
reaching [his] decision" that Kachmar had little future with
SunGard. Starceski v. Westinghouse Electric Corp., 54 F.3d 1089,
1096 (3d Cir. 1995). In concentrating exclusively on the gap
between Kachmar's protected activity and her firing, and the
sufficiency of Kachmar's allegations of a pattern of antagonism,
the district court failed to make the more generalized inquiry
into whether Kachmar's protected activity was the likely reason
for her termination. See Waddell, 799 F.2d at 73; cf. Andrews v.
City of Philadelphia, 895 F.2d 1469, 1484 (3d Cir. 1990) ("A play
cannot be understood on the basis of some of its scenes but only
on its entire performance, and similarly, a discrimination
analysis must concentrate not on individual incidents, but on the
overall scenario."). Whether Kachmar's protests regarding what
she believed was the company's Title VII vulnerability were the
likely cause of her termination is a difficult factual question.
Because the facts viewed in the light most favorable to Kachmar
would support an inference of retaliation, her complaint states a
colorable claim as to which she is entitled to further factual
development.
2. Claim by In-house Counsel
SunGard argues that we should affirm the dismissal on
the alternative basis that maintenance of Kachmar's retaliatory
discharge action would improperly implicate communications
subject to the attorney-client privilege and/or information
relating to Kachmar's representation of Sungard. This court has
not yet addressed the question of the viability of claims by in-
house counsel under Title VII. The district court alluded to the
issue but did not dismiss on that ground.
Those few federal courts that have been presented with
discrimination actions brought by in-house counsel have generally
held that once an attorney's employment has terminated, s/he is
not barred from bringing suit against the former employer for
retaliatory discharge under Title VII. See, e.g., Jones v.
Flagship Int'l., 793 F.2d 714, 726 (5th Cir. 1986), cert. denied,
479 U.S. 1065, 107 S.Ct. 952 (1987); Verney v. Pennsylvania
Turnpike Comm'n, 903 F.Supp. 826, 832 (M.D. Pa. 1995); Hoskins v.
Droke, No. 94-C-5004, 1995 WL 318817, at *2 (N.D.Ill. 1995);
Kocher v. Acer, No. C-93-20132RMW, 1993 WL 149077 at *3 - *4
(N.D. Cal. 1993); Golightly-Howell v. Oil, Chemical & Atomic
Workers Int'l Union, 806 F.Supp. 921, 925 (D. Colo. 1992); see
also Breckinridge v. Bristol-Myers Co., 624 F.Supp. 79, 83 (S.D.
Ind. 1985) (charging discrimination under the ADEA). In the only
federal appeals court case brought to our attention, the court
stated, "In assuming her position as [in-house attorney,
plaintiff] neither abandoned her right to be free from
discriminatory practices nor excluded herself from the
protections of [Title VII]." Jones, 793 F.2d at 726.
Title VII defines the "employee" who can bring suit in
broad terms. See 42 U.S.C. § 2000e(f) (1994). Although that
same section contains discrete exclusions, such as exempting
persons elected to public office, their personal staff, and
policy-making appointees, Congress did not exclude in-house
attorneys.
SunGard concedes that in-house counsel are not per se
precluded from bringing a retaliatory discharge claim but argues
that such suits are limited to cases in which confidential
information is not implicated, which it contends is not the case
here. It argues that by pursuing this claim Kachmar would be
violating her ethical duties under the Pennsylvania Rules of
Professional Conduct which impose a general duty of
confidentiality with respect to "information relating to the
representation of a client." See Pennsylvania Rules of
Professional Conduct 1.6 (1996). SunGard notes that while Rule
1.6(c)(3) allows the disclosure of confidential information "to
establish a claim or defense on behalf of the lawyer in a
controversy between the lawyer and the client," the comments to
the Rule only offer two examples of such disputes: where there is
a dispute over fees and where an attorney is defending against a
claim implicating his conduct. See id. However, the Rules do
not address affirmative claims for relief under a federal statute
and thus we believe they are at best inconclusive on the issue
SunGard raises.
SunGard seeks to bolster its contention that suits such
as this by former in-house counsel run counter to the policies
underlying the attorney-client privilege by citing a few state
Supreme Court cases. It is true that some state cases take a
restrictive view of the former in-house counsel's ability to file
suit for retaliatory discharge. The most restrictive approach
appears to have been taken in Balla v. Gambro, Inc., 584 N.E.2d
104, 145 Ill.2d 492 (1991), which held that tort actions for
wrongful discharge are unavailable to in-house counsel. See also
Herbster v. North American Co., 501 N.E. 2d 343 (Ill. App. Ct.
1986).
Although the California Supreme Court, which considered
the issue in General Dynamics Corp. v. Superior Court, 876 P.2d
487, 490-91, 7 Cal.4th 1164, 1170-71 (1994) (en banc), has not
adopted Illinois' blanket preclusion, SunGard relies on language
in that opinion limiting the availability of suits by in-house
counsel. In that case, a former in-house counsel filed a
contract and tort action alleging that he was terminated in part
because he had spearheaded an investigation into employee drug
use at a company plant and had advised General Dynamics that its
salary policy may have been in violation of the Fair Labor
Standards Act. In a thoughtful opinion, the Court declined to
dismiss the action at the pleadings stage, holding that "under
circumscribed conditions, an in-house attorney may pursue a
wrongful discharge claim for damages against his corporate
employer even though a judgment ordering his reinstatement is not
an available remedy." Id. at 495. The Court viewed the
situation of in-house counsel as being more analogous to that of
corporate executives who "owe their livelihoods, career goals and
satisfaction to a single organizational employer," than to that
of an attorney in the traditional attorney-client relationship,
noting, "[u]nlike the law firm partner, who typically possesses a
significant measure of economic independence and professional
distance derived from a multiple client base, the economic fate
of in-house attorneys is tied directly to a single employer, at
whose sufferance they serve." Id. at 491.
The Court further observed that the professional
relationship between the in-house attorney and the client did not
fit the standard model of the "one-shot" undertaking - drafting a
will or handling a piece of litigation - characteristic of the
outside law firm. The corporate attorney-employee, the Court
stated, "operating in a heavily regulated medium, often takes on
a larger advisory and compliance role, anticipating potential
legal problems, advising on possible solutions and generally
assisting the corporation in achieving its business aims . . . ."
Id.1
The language on which SunGard relies arose when the
Court considered the possible limitations on the vitality of
wrongful discharge claims when brought by former in-house
1
For an account of the rise of the corporate legal department
and its implications for the traditional "outside" law firm, see
Abram Chayes & Antonia H. Chayes, Corporate Counsel and the Elite
Law Firm, 37 Stan. L. Rev. 277 (1984). A number of scholarly
articles have addressed the dynamics of lawyer-client relations
in the organizational context. See, e.g., Sara A. Corello, Note,
In-House Counsel's Right to Sue for Retaliatory Discharge, 92
Colum. L. Rev. 389 (1992); Stephen E. Kalish, The Attorney's Role
in the Private Organization, 59 Neb. L. Rev. 1 (1988); Kenneth J.
Wilbur, Wrongful Discharge of Attorneys: A Cause of Action to
Further Professional Responsibility, 92 Dick. L. Rev. 777 (1988);
Daniel S. Reynolds, Wrongful Discharge of Employed Counsel, 1
Geo. J. Legal Ethics 553 (1988).
counsel. The Court, after holding that a limited remedy should
be provided for former in-house counsel "confronted with the
dilemma of choosing between adhering to professional ethical
norms and surrendering to the employer's unethical demands,"
recognized the need to accommodate the "values that underlie the
professional relationship - the fiduciary qualities of mutual
trust and confidence." Id. at 502, 503. It was in that context
that the Court stated that "in those instances where the
attorney-employee's retaliatory discharge claim is incapable of
complete resolution without breaching the attorney-client
privilege, [a wrongful discharge] suit may not proceed," unless
"some statute or ethical rule, such as the statutory exceptions
to the attorney-client privilege . . . specifically permits the
attorney to depart from the usual requirement of
confidentiality." Id. at 490, 502. The Court noted that there
are ample possibilities for preserving confidential
communications, and underlined the fact that dismissal at the
demurrer stage will seldom, if ever, be appropriate. See id. at
489.
Other state courts have also permitted former in-house
attorneys to bring wrongful discharge actions in tort, similarly
analyzing the state public policies at issue. See, e.g., GTE
Products Corp. v. Stewart, 653 N.E.2d 161, 166-68, 421 Mass. 22,
28-29 (1995) (holding that in-house counsel may maintain wrongful
discharge action where fired for refusing to violate ethical
norms); Parker v. M & T Chemicals, Inc., 566 A.2d 215, 220, 236
N.J.Super. 451, 459 (1989) (holding that employee-attorney may
bring a damage suit for wrongful discharge under New Jersey's
Conscientious Employee Protection Act, as public policy in favor
of whistle-blowing on illegal conduct overrides attorney's duties
of confidentiality).
The federal courts that have addressed the question
have cited the important public policies underlying federal anti-
discrimination legislation and the supremacy of federal laws in
determining that federal anti-discrimination statutes take
precedence over the at-will discharge principle. See, e.g.,
Jones, 793 F.2d at 726; Stinneford v. Spiegel Inc., 845 F.Supp.
1243, 1245-46 (N.D. Ill. 1994); Rand v. CF Industries, Inc., 797
F.Supp. 643, 645 (N.D. Ill. 1992).
The Jones court, although ultimately upholding the
district court decision that the employer was justified in
terminating the former attorney-manager of its EEO programs,
emphasized that the provisions of Title VII must be construed
broadly to extend to all employees and must be rigorously
enforced: "since the enforcement of Title VII rights necessarily
depends on the ability of individuals to present their grievances
without the threat of retaliatory conduct by their employers,
rigid enforcement of § 704(a) [the retaliatory discharge
provision] is required." Jones, 793 F.2d at 726; see also
Stinneford, 845 F.Supp. at 1246 ("[T]he Supremacy clause demands
that the federally mandated protections of the ADEA triumph over
the state principle of at-will employment."). Such an approach
is consistent with the policy to liberally construe the
discrimination laws to best effectuate their remedial purpose.
See County of Washington v. Gunther, 452 U.S. 161, 170 (1981).
We do not suggest that concerns about the disclosure of
client confidences in suits by in-house counsel are unfounded,
but these concerns alone would not warrant dismissing a
plaintiff's case, especially where there are other means to
prevent unwarranted disclosure of confidential information. In
Breckinridge v. Bristol-Myers Co., 624 F.Supp. 79 (S.D. Ind.
1985), where the defendants' legal officer claimed that the
reasons offered by the company for his dismissal were a pretext
for illegal age discrimination, the district court determined
that while certain breaches of confidential material were
problematic, "what [the plaintiff] Breckinridge did as the
defendants' employee is assuredly relevant and pivotal in this
case." Id. at 84. It did not disallow the plaintiff from
providing testimony as to his duties and actions as general
counsel, and, in fact, explicitly noted that information relating
to the plaintiff's activities was relevant and discoverable. See
id. at 83.
It is premature at this stage of the litigation to
determine the range of the evidence Kachmar will offer and
whether or how it will implicate the attorney-client privilege.
For example, without deciding the substance of the issue, it is
difficult to see how statements made to Kachmar and other
evidence offered in relation to her own employment and her own
prospects in the company would implicate the attorney-client
privilege. See, e.g., Breckenridge, 624 F. Supp. at 82. It is
also questionable whether information that was generally
observable by Kachmar as an employee of the company, such as her
observations concerning the lack of women in a SunGard
subsidiary, would implicate the privilege. Moreover, there may
be a fine but relevant line to draw between the fact that Kachmar
took positions on certain legal issues involving SunGard
policies, and the substance of her legal opinions. See General
Dynamics, 876 P.2d at 491 (discussing fact that plaintiff counsel
advised the company that it was in possible violation of the Fair
Labor Standards Act).
In Doe v. A Corp., 709 F.2d 1043, 1050 (5th Cir. 1983),
the court observed that "[a] lawyer . . . does not forfeit his
rights simply because to prove them he must utilize confidential
information. Nor does the client gain the right to cheat the
lawyer by imparting confidences to him." Id. at 1050; cf. Oregon
State Bar Legal Ethics Comm., Formal Op. 1994-136 (stating that
attorney may disclose confidences to establish a wrongful
termination claim where attorney was terminated after refusing to
make false representations on a patent application).
In balancing the needed protection of sensitive
information with the in-house counsel's right to maintain the
suit, the district court may use a number of equitable measures
at its disposal "designed to permit the attorney plaintiff to
attempt to make the necessary proof while protecting from
disclosure client confidences subject to the privilege." General
Dynamics, 876 P.2d at 504. Among those referred to in General
Dynamics were "[t]he use of sealing and protective orders,
limited admissibility of evidence, orders restricting the use of
testimony in successive proceedings, and, where appropriate, in
camera proceedings." Id. Admittedly, this may entail more
attention by a judicial officer than in most other Title VII
actions, but we are not prepared to say that the trial court,
after assessing the sensitivity of the information offered at
trial, would not be able to draft a procedure that permits
vindicating Kachmar's rights while preserving the core values
underlying the attorney-client relationship. It follows that we
cannot affirm the dismissal of Kachmar's retaliatory discharge
claim at this preliminary stage on the alternative grounds
suggested by SunGard.
B. Sex Discrimination
In contrast to the dismissal of Kachmar's retaliatory
discharge claim, the district court entered summary judgment for
SunGard on Kachmar's sex discrimination claim. In her complaint
Kachmar alleged that SunGard engaged in a "pattern and practice
of discrimination against females, including plaintiff, in rates
of compensation, promotions, hiring, retention, and discharge."
App. at 21. Kachmar sought damages and reinstatement with back-
pay. The parties have therefore treated this as a claim under
Title VII that Kachmar was fired on account of her sex that is
independent of her Title VII retaliatory discharge action.
To establish a prima facie case of employment
discrimination, a plaintiff must show that she is a member of a
protected class, that she was qualified for the position under
dispute, that she was dismissed from that position, and that she
was replaced by a member of a favored class. See McDonnell
Douglas Corp. v. Green, 411 U.S. 792, 802, 93 S.Ct. 1817, 1824
(1973); Lazarz v. Brush Wellman, Inc., 857 F.Supp. 417, 422 (E.D.
Pa. 1994). The first three elements of Kachmar's prima facie
case are undisputed. The district court granted SunGard's motion
for summary judgment based on the fourth element, holding that
there was no dispute as to the fact that Kachmar was replaced by
a female employee.
The district court's treatment of this issue was brief.
The court stated:
Defendants have submitted an affidavit of Defendant
Gross which indicates that Kachmar was
replaced by Armstrong, another female. In
response, Kachmar has filed her own affidavit
stating that she "trained Sarah Armstrong and
worked with her, [she knew] her experience
[was] not comparable to [her] own . . . [s]he
may have been given my title, but she did not
and could not replace me." See Affidavit of
Kachmar, at ¶ 15. This is not sufficient to
stave off summary judgment. Since I find
that there is no genuine issue as to who
replaced Kachmar, Defendants' Motion for
Partial Summary Judgment will be granted.
App. at 60-61.
Had the relevant issue been who was given Kachmar's
title, Gross's affidavit would have been dispositive, as Kachmar
did not dispute that Sarah Armstrong, another woman, was promoted
into her position of Senior Counsel. She did, however, dispute
that Armstrong "replace[d]" her. She contends that while
Armstrong took over Kachmar's position in name, Michael
Zuckerman, who was hired as Corporate Counsel to fill Armstrong's
place, was Kachmar's actual replacement. She asserts that the
timing of the hiring and the relative experience of Armstrong and
Zuckerman strongly suggest that Armstrong became Senior Counsel
in name only.
As this issue arises on summary judgment, Kachmar's
failure to provide some evidence other than her own belief that
Zuckerman rather than Armstrong replaced her would require
affirmance under ordinary circumstances. For example, she has
failed to overcome the memorandum SunGard produced dated March
18, 1994, from Gross to 53 SunGard management employees that
states:
I am pleased to announce that Sara Armstrong has been
promoted to the position of Senior Counsel.
In just two years with the Company, Sara has
quickly learned many of the intricacies of
our myriad businesses and assumed major
responsibilities in the areas of customer
contracts and acquisitions. By way of
reminder, Sara previously worked on the
mergers and acquisitions team at the
Philadelphia law firm of Dechert Price &
Rhoads; she is a 1988 graduate of Columbia
Law School and also holds a masters degree
from the Kennedy School of Government and a
bachelors degree from the University of
Pennsylvania.
I am also pleased to announce that Mike Zuckerman will
be joining the Company as Corporate Counsel
in mid-April. Before attending Harvard Law
School, where he graduated cum laude in 1990,
Mike worked for ten years in the computer
industry, including positions as Manager of
Product Development and Director of Technical
Services for a provider of specialty turnkey
systems. Since 1990, Mike has applied his
unique blend of legal and computer skills at
Dechert, Price & Rhoads, where he has handled
a variety of computer law, intellectual
property and general corporate assignments.
Mike will be handling similar types of
assignments for SunGard.
App. at 34. As this memorandum appears to notify those who would
be likely to refer matters to in-house counsel of the respective
positions occupied by Armstrong and Zuckerman, it supports
SunGard's position that Armstrong replaced Kachmar. Kachmar
notes that SunGard "waited seven weeks . . . to announce
Armstrong's promotion to Senior Counsel" and argues that she
should be able to explore by discovery whether it is a "possible
pretext." Appellant's brief at 39.
It appears from this limited record that Kachmar will
have a difficult road to travel to support her allegation that
Armstrong's promotion was simply a ruse. However, Kachmar was
not given the opportunity to test her contention by discovery.
Although she followed the procedure contained in Rule 56(f) by
certifying her need to have the opportunity to complete discovery
before the court made a dispositive ruling on SunGard's motion
for summary judgment, see App. at 47, the district court entered
judgment without giving her that opportunity. Nor did the
district court explain why it was denying the request for
discovery. Inasmuch as Kachmar has had no opportunity for
discovery, we will vacate the order granting summary judgment to
give her the chance to pursue this theory.
In remanding on this issue, we do not suggest that
"replacement" for purposes of Title VII means that every detail
of the duties which Kachmar performed need be compared to those
performed by Armstrong and Zuckerman. It would be only natural
that duties shift with new personnel, as they bring to the
position varied skills and expertise that may differ from those
of the prior occupant. Nor is salary necessarily determinative.
The relevant issue is whether the title of Senior Counsel given
to Armstrong was merely a ruse to conceal replacing Kachmar with
Zuckerman, a male. Because this is a narrow issue, the district
court may limit discovery on this claim accordingly.
C. Individual Liability
The district court dismissed Gross and Pedrick as
defendants in both the retaliatory discharge and discrimination
claims on the ground that individuals may not be held liable
under Title VII.
In Sheridan v. E.I. DuPont de Nemours and Co., 100
F.3d 1061 (3d Cir. 1996), this court in an en banc decision,
joined the majority of other circuits in concluding "that
Congress did not intend to hold individual employees liable under
Title VII." Id. at 1077; see also Dici v. Commonwealth of
Pennsylvania, 91 F.3d 542, 552 (3d Cir. 1996). We will therefore
affirm the district court's order dismissing Kachmar's Title VII
claims against Pedrick and Gross.
D. Tortious Interference with
Prospective Contractual Relations
Kachmar appended to her Title VII claims a state law
claim of tortious interference with prospective contractual
relations. She alleges that after SunGard discharged her,
Armstrong telephoned one of the partners of the law firm with
which Kachmar was seeking employment "on the pretext of getting a
message to [Kachmar] on an unrelated matter" and "[w]hile engaged
in this conversation, and for no reason except to attempt to
interfere with [Kachmar's] efforts to find new employment,
Armstrong advised the partner that [Kachmar] had hired counsel
and was going to sue SunGard." Complaint at ¶¶ 68, 69. As a
result, discussions between the law firm and Kachmar were
discontinued.2
2
Kachmar argues for the first time in her reply brief that her
claim that Armstrong’s telephone call constituted discriminatory
retaliation was never dismissed by the district court. We need
not decide whether the Supreme Court's recent holding that former
employees may bring suits for discriminatory retaliation under
Title VII, see Robinson v. Shell Oil Co., 117 S.Ct. 843 (1997);
see also Charlton v. Paramus Bd. of Educ., 25 F.3d 194, 200 (3d
To prevail on a claim of intentional interference with
prospective contractual relations under Pennsylvania law, Kachmar
must show the following: (1) a prospective contractual relation;
(2) the purpose or intent to harm the plaintiff by preventing the
relation from occurring; (3) the absence of privilege or
justification on the part of the defendant; and (4) the
occasioning of actual damage resulting from the defendant's
conduct. Thompson Coal Co. v. Pike Coal Co., 488 Pa. 198, 208,
412 A.2d 466, 471 (1979); Advent Systems Ltd. v. Unisys Corp.,
925 F.2d 670, 673 (3d Cir. 1991) (citing Silver v. Mendel, 894
F.2d 598, 601-602 (3d Cir.), cert. denied, 496 U.S. 926 (1990)).
The district court held that Kachmar stated sufficient
facts to meet the second and fourth prongs of the cause of
action, but that the allegations of the complaint that Kachmar
merely "sought" an attorney position with a prominent law firm in
Philadelphia did not rise to the level of a "prospective
contractual relation" as it was too indefinite. The district
court also held that Kachmar could not prove an absence of
privilege because Armstrong's statement was truthful, citing the
Restatement (Second) of Torts § 772 (1979). It thus dismissed
Kachmar's complaint for failure to state a claim upon which
relief can be granted.
(..continued)
Cir.), cert. denied, 115 S.Ct. 590 (1994), covers these facts
because Kachmar failed to raise this issue in her initial brief
and it is therefore waived. See McLendon v. Continental Can Co.,
908 F.2d 1171, 1183 (3d Cir. 1990).
A "prospective contractual relation" is, by definition,
not as susceptible of precise, exacting identification as is an
existing contract. "[A]nything that is prospective in nature is
necessarily uncertain." Glenn v. Point Park College, 441 Pa.
474, 480, 272 A.2d 895, 898 (1971). We have previously held that
the Pennsylvania Supreme Court requires that there be an
objectively reasonable probability that a contract will come into
existence, Schulman v. J.P. Morgan Inv. Management, Inc., 35 F.3d
799, 808 (3d Cir. 1994), something more than a "mere hope,"
Thompson Coal, 412 A.2d at 471.
We assume that had Kachmar's discussions led to a more
definite employment prospect with the law firm, she would have so
alleged and thus we share some of the district court's skepticism
about the application of this tort to these facts. However, once
again our disposition is governed by the procedural stage at
which the issue arises. Kachmar's allegation that she learned
during her discussions with the firm of Armstrong's conduct in
informing the firm that Kachmar "hired a lawyer and was filing a
discrimination suit against defendants," App. at 44, may suggest
that the interaction between Kachmar and the firm passed beyond
the preliminary stage. Of course, there is a wide gap between
preliminary discussions and the "reasonable likelihood or
probability" stage required by Pennsylvania law. Had the matter
proceeded beyond dismissal to summary judgment, Kachmar would
have been required to produce evidence from sources available to
her as to whether her contacts had reached that stage. Dismissal
on the basis of the complaint precluded that inquiry.
The other ground on which the district court dismissed
was Kachmar's failure to show the absence of justification or
privilege for Armstrong's action. The court cited section 772 of
the Restatement (Second) of Torts (1979) dealing with Advice as
Proper or Improper Interference, which states:
One who intentionally causes a third person not to
perform a contract or not to enter into a
prospective contractual relation with another
does not interfere improperly with the
other's contractual relation, by giving the
third-person
(a) truthful information, or
(b) honest advice within the scope of a
request for advice.
(emphasis added).
The Pennsylvania Supreme Court has never explicitly
adopted section 772, and we have therefore analyzed the element
of justification or privilege using the language employed by the
Pennsylvania cases. Those cases have not stated that the truth
of a statement in itself will defeat the tort claim but instead
have focused on the broader issue of what constitutes a justified
or privileged interference with prospective contractual
relations. In Silver v. Mendel, 894 F.2d 598, 603 n.7 (3d Cir.),
cert. denied, 496 U.S. 926 (1990), we relied on the Pennsylvania
Supreme Court's discussion in Glenn v. Park Point College, 441
Pa. at 479-80, 272 A.2d at 898, for the proposition that the
absence of privilege or justification is "closely related to
. . . intent" and "is not susceptible of precise definition." In
Advent Systems, we stated that,
When a defendant acts at least in part to protect some
legitimate concern that conflicts with an
interest of the plaintiff, a line must be
drawn and the interests evaluated. The
central inquiry in the evaluation is whether
the interference is 'sanctioned' by 'the
rules of the game' which society had adopted
[defining] socially acceptable conduct which
the law regards as privileged.
925 F.2d at 673 (quoting Glenn, 272 A.2d at 899).
In a more recent case, the Pennsylvania Superior Court
stated: "[T]he Pennsylvania Supreme Court has determined that the
relevant inquiry must focus on the propriety of a defendant's
conduct considering the factual scenario as a whole." Ruffing v.
84 Lumber Co., 410 Pa.Super. 459, 467-68, 600 A.2d 545, 549
(1991) (emphasis in original); see also University Graphics, Inc.
v. Pro-Image Corp., 913 F.Supp. 338, 346 (M.D. Pa. 1996).
Because the district court focused solely on Restatement section
772 which gives dispositive effect to the truthfulness of the
statement and failed to apply the broader Pennsylvania standard
which looks to the propriety of the conduct, we will remand to
the district court.
We do not suggest that the truthfulness of the
statement is not a factor to be considered although we note that
truthfulness is not referred to in either section 767 of
Restatement (Second) of Torts, which provides a list of factors
relevant to "proper" conduct, or in the Pennsylvania cases
dealing with interference with prospective contractual relations.
The district court will have the opportunity to review in the
first instance what may be the somewhat differing approaches to
"proper" conduct in the Pennsylvania Superior Court. Compare
Yaindl v.Ingersoll-Rand Co., 281 Pa.Super. 560, 573-74, 580 n.11,
422 A.2d 611, 618, 622 n.11 (1980) (employing the factors of
section 767 and stating that the absence of privilege or
justification is merely another way of stating that the
defendant's conduct must be improper) with Vintage Homes, Inc. v.
Levin, 382 Pa.Super. 146, 155, 554 A.2d 989, 994 (1989)
(analyzing the tort only with reference to "absence of
justification or privilege"), Gordon v. Lancaster Osteopathic
Hosp. Ass'n, Inc., 340 Pa.Super. 253, 263, 489 A.2d 1364, 1370
(1985), and Ruffing, 600 A.2d at 549 (analyzing tort with
reference to both the factors set forth in section 767 and
"absence of justification or privilege").
Kachmar is entitled the opportunity to further develop
her tortious inteference claim. Of course, to prosecute her
claim against SunGard she has the burden of offering some
evidence that Armstrong was acting within the scope of her
employment when she contacted the law firm. See Yaindl, 422 A.2d
at 625. We assume that whether Kachmar has any basis for
asserting this claim against SunGard can be developed at the
initial stages of discovery. We will therefore vacate the
dismissal of this claim and remand for further proceedings.
III.
CONCLUSION
To summarize, the district court was premature in
dismissing Kachmar's complaint in its entirety. First, we
conclude that Kachmar has stated a prima facie case of
retaliatory discharge under Title VII, and is not barred from
pursuing her action by the attorney-client privilege and/or the
ethical constraints of attorney-client confidentiality. Second,
we hold that a genuine issue of material fact exists as to
Kachmar's sex discrimination claim and summary judgment was
therefore inappropriate. Third, we conclude that Kachmar has
stated a claim for tortious interference with prospective
contractual relations. Finally, we uphold the dismissals of the
individual defendants Gross and Pedrick. Accordingly, we will
affirm in part and vacate and remand the remainder of the order
for further proceedings consistent with this opinion.
___________________________
TO THE CLERK:
Please file the foregoing opinion.
____________________________________
Chief Judge