Harrison v. Olde Financial Corp.

572 N.W.2d 679 (1997) 225 Mich. App. 601

Diane HARRISON, Plaintiff-Appellant,
v.
OLDE FINANCIAL CORPORATION, Olde Discount Corporation, and Deanna Hatmaker, Defendants-Appellees.

Docket No. 183996.

Court of Appeals of Michigan.

Submitted September 3, 1996, at Detroit. Decided October 3, 1997, at 9:15 a.m. Released for Publication January 8, 1998.

Law Offices of Thomas E. Marshall by Thomas E. Marshall and Nancy Brewer, Detroit, for plaintiff-appellant.

Dickinson, Wright, Moon, Van Dusen & Freeman by Francis R. Ortiz and Andrew S. Doctoroff, Detroit, for defendants-appellees.

Before YOUNG, P.J., and TAYLOR and R. LIVO^[*], JJ.

YOUNG, Judge.

In this action alleging racial discrimination in employment, plaintiff Diane Harrison appeals as of right an order granting summary disposition under MCR 2.116(C)(10) to defendants Olde Financial Corporation, Olde Discount Corporation, and Deanna Hatmaker.^[1] We reverse and remand.

I

Background

Plaintiff is an African-American. In 1994, defendant retained plaintiff through an agency to work as a temporary legal secretary. Bruce Campbell, defendant's corporate counsel, subsequently invited plaintiff to apply for a permanent secretarial position with defendant. Two staff attorneys later interviewed her. Plaintiff testified in her deposition that, at some point during her temporary employment with defendant, she overheard one of the two staff attorneys, Karen Brink, say to the other that, although plaintiff was a good secretary, she was "the wrong color." ^[2] Although defendant asserted that the two attorneys who interviewed plaintiff reportedly were dissatisfied with plaintiff's job performance, Brink nonetheless recommended that Campbell give plaintiff a second interview. Campbell and Deanna Hatmaker, defendant's personnel director, thereafter interviewed plaintiff. As plaintiff was leaving that interview, plaintiff testified that she overheard Hatmaker tell Campbell that he should not permit plaintiff to address him by his first name because plaintiff was black.

Defendant offered the job to an applicant with higher qualifications than those of plaintiff.^[3] However, this applicant declined the offer because the salary associated with the position was too low. Defendant ultimately reorganized the secretarial position plaintiff had applied for and hired two nonminority women who allegedly were less qualified than plaintiff for the two new clerical legal support positions that encompassed the duties of the original legal secretarial position.^[4] Plaintiff ceased working for defendant in April 1994 and immediately filed suit. The trial court granted defendant's motion for summary disposition, ruling that defendant had legitimate, nondiscriminatory business reasons for declining to hire plaintiff.

On appeal, plaintiff asserts that the circuit court erred in granting summary disposition to defendant. We agree, but for entirely different reasons than urged by plaintiff. Instead, we conclude that the circuit court and the parties applied an incorrect legal analysis.

This Court reviews a trial court's determination regarding motions for summary disposition de novo. Stehlik v. Johnson (On Rehearing), 206 Mich.App. 83, 85, 520 N.W.2d 633 (1994). A motion for summary disposition under MCR 2.116(C)(10) tests whether factual support exists for the claim. The trial court considers the affidavits, pleadings, depositions, admissions, and other admissible documentary evidence within the action. Skinner v. Square D Co., 445 Mich. 153, 161, 516 N.W.2d 475 (1994). The court's task is to review the record evidence, and all reasonable inferences therefrom, and determine whether a genuine issue of material fact exists to warrant a trial. Id. In reviewing a trial court's summary disposition decision, this Court makes all legitimate inferences in favor of the nonmoving party. Id. at 162, 516 N.W.2d 475.

II

Proof of Employment Discrimination

Plaintiff alleges that defendant engaged in disparate treatment in violation of the Michigan Civil Rights Act, M.C.L. § 37.2101 et seq.; M.S.A. § 3.548(101) et seq., by refusing to hire her because of race.^[5] This constitutes a claim of intentional discrimination, which may be proved by alternate methods. Meagher v. Wayne State Univ., 222 Mich. App. 700, 708-710, 565 N.W.2d 401 (1997). Intentional discrimination may be established by direct or indirect evidence. Id. at 710, 565 N.W.2d 401.

In analyzing discrimination claims arising under the Michigan Civil Rights Act, Michigan courts have often resorted to federal precedent for guidance. Id. Indeed, the parties in this case have used, and the circuit court applied, the federal burden of proof analysis and construct established in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973). Because most employment discrimination cases involve only circumstantial evidence of discrimination, the McDonnell Douglas burden of proof model was tailored for such cases. See Pierce v. Commonwealth Life Ins. Co., 40 F.3d 796, 801, n. 6 (C.A.6, 1994). Consequently, as explained in Meagher, the McDonnell Douglas method of establishing a prima facie case of intentional discrimination relies upon a "presumptive approach." Meagher, supra at 710, 565 N.W.2d 401. The Supreme Court in Texas Dep't of Community Affairs v. Burdine, 450 U.S. 248, 253-254, 101 S.Ct. 1089, 1094, 67 L.Ed.2d 207 (1981), stated:

The [McDonnell Douglas] prima facie case serves an important function ...: it eliminates the most common nondiscriminatory reasons for the plaintiff's rejection. As the Court explained in Furnco Construction Corp. v. Waters, 438 U.S. 567, 577[,] 98 S.Ct. 2943 [2949-50,] 57 L.Ed.2d 957 (1978), the prima facie case "raises an inference of discrimination only because we presume these acts, if otherwise unexplained, are more likely than not based on the consideration of impermissible factors." [Some citations omitted.]

Under the McDonnell Douglas approach that Michigan has adopted in various forms, the court must first determine if the plaintiff has stated a prima facie case of discrimination. Meagher, supra at 710-711, 565 N.W.2d 401.^[6] "Prima facie case" in the McDonnell Douglas context means only that the plaintiff has provided enough evidence to create a rebuttable presumption of discrimination. Dixon v. W.W. Grainger, Inc., 168 Mich.App. 107, 115, 423 N.W.2d 580 (1987). It does not mean that the plaintiff has provided sufficient evidence to allow the case to go to a jury. Id. If the court concludes that the plaintiff has established a prima facie case of discrimination, the court then examines whether the defendant has articulated a legitimate, nondiscriminatory reason for its action. Meagher, supra at 711, 565 N.W.2d 401. If that articulation is made, the court next considers whether the plaintiff has proved by a preponderance of the evidence that the reason offered by the defendant was a mere pretext for discrimination. Id. at 711-712, 565 N.W.2d 401.

As noted, the circuit court relied upon the McDonnell Douglas model in resolving defendant's motion. We conclude that the circuit court correctly found that plaintiff had stated a prima facie case of discrimination under McDonnell Douglas,^[7] that defendant had articulated nondiscriminatory reasons for its action,^[8] and that plaintiff failed to establish a genuine issue of material fact concerning whether defendant's reasons were merely pretexts for discrimination.^[9]

Nevertheless, while the McDonnell Douglas burden-shifting analysis is appropriate in cases without direct evidence of discrimination, this case presents a different situation. Federal case law holds, and we agree, that the McDonnell Douglas evidentiary framework does not apply when a plaintiff presents direct evidence of discriminatory animus. Kresnak v. Muskegon Heights, 956 F.Supp. 1327 (W.D.Mich., 1997); see also Matras v. Amoco Oil Co., 424 Mich. 675, 683-684, 385 N.W.2d 586 (1986). "Direct evidence and the McDonnell Douglas formulation are simply different evidentiary paths by which to resolve the ultimate issue of [the] defendant's discriminatory intent." Blalock v. Metals Trades, Inc., 775 F.2d 703, 707 (C.A.6, 1985).

"Direct evidence" has been defined in the Sixth Circuit Court of Appeals as evidence that, if believed, "`"requires the conclusion that unlawful discrimination was at least a motivating factor."`" Kresnak, supra at 1335 (citations omitted). For example, racial slurs by a decisionmaker constitute direct evidence of racial discrimination that is "`sufficient to get the plaintiff's case to the jury.'" Id. (citation omitted). Thus, when direct evidence of discrimination is involved, we believe that federal case law provides appropriate guidance for analyzing discrimination claims arising under the Michigan Civil Rights Act.^[10]

In the instant case, plaintiff testified in her deposition that defendant's employees made derogatory comments about her race. Because of plaintiff's direct evidence of discrimination,^[11] this case presents a question of mixed motives, one in which defendant's decision not to hire plaintiff could have been based on several factors, legitimate ones as well as legally impermissible ones.^[12]

In federal cases involving mixed or dual motives, once the plaintiff has met the initial burden of proving that the illegal conduct (in this case, race discrimination) was more likely than not a "substantial" or "motivating" factor in the defendant's decision, the defendant has the opportunity to show by a preponderance of the evidence that it would have reached the same decision without consideration of the protected characteristic. See Mt. Healthy Bd. of Ed. v. Doyle, 429 U.S. 274, 287, 97 S.Ct. 568, 576, 50 L.Ed.2d 471 (1977) (involving a First Amendment claim arising under 42 U.S.C. § 1983); see also East Texas Motor Freight System, Inc. v. Rodriguez, 431 U.S. 395, 404, n. 9, 97 S.Ct. 1891, 1897, n. 9, 52 L.Ed.2d 453 (1977).^[13]

The Mt. Healthy analysis was subsequently extended to cases arising under title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. Price Waterhouse v. Hopkins, 490 U.S. 228, 109 S.Ct. 1775, 104 L.Ed.2d 268 (1989). In such cases, if the employer can show that the same decision would have been reached even in the absence of discrimination, no liability arises. See Haskins v. United States Dep't of the Army, 808 F.2d 1192, 1197-1198 (C.A.6, 1987).^[14] Federal courts applying this analysis consider whether a discriminatory factor played a motivating part in the decision by examining the considerations "`at the moment of the decision.'" See Cesaro v. Lakeville Community School Dist., 953 F.2d 252, 254 (C.A.6, 1992), quoting Price Waterhouse, supra at 250, 109 S.Ct. at 1790. The Supreme Court in Price Waterhouse, id. at 242, 109 S.Ct. at 1786, detailed the logic supporting this additional burden shifting in mixed-motive cases involving gender discrimination:

To say that an employer may not take gender into account is not, however, the end of the matter, for that describes only one aspect of Title VII. The other important aspect of the statute is its preservation of an employer's remaining freedom of choice. We conclude that the preservation of this freedom means that an employer shall not be liable if it can prove that, even if it had not taken gender into account, it would have come to the same decision regarding a particular person. The statute's maintenance of employer prerogatives is evident from the statute itself and from its history, both in Congress and in this Court.

We believe that the Supreme Court's analysis in Price Waterhouse is equally applicable to cases arising under the Michigan Civil Rights Act, which was patterned on title VII. McCalla v. Ellis, 180 Mich.App. 372, 377-378, 446 N.W.2d 904 (1989).^[15] To summarize, we hold that the following principles of proof apply in a typical single-plaintiff, mixed-motive employment discrimination case. First, as with circumstantial discrimination cases, in a case involving direct evidence of discrimination, the plaintiff always bears the burden of persuading the trier of fact that the employer acted with illegal discriminatory animus. Second, whatever the nature of the challenged employment action, the plaintiff must establish evidence of the plaintiff's qualification (or other eligibility) and direct proof that the discriminatory animus was causally related to the decisionmaker's action. Upon such a presentation of proofs, an employer may not avoid trial by merely "articulating" a nondiscriminatory reason for its action. Under such circumstances, the case ordinarily must be submitted to the factfinder for a determination whether the plaintiff's claims are true.

However, and alternatively, in addition to challenging the credibility of the plaintiff's claims of discrimination, in a case involving direct evidence of discriminatory action, the employer may also assume the burden of persuading the factfinder that, even if the plaintiff's allegations are true, the employer would have made the same decision without consideration of discriminatory factors. In other words, the employer may assume the burden of persuading the factfinder that consideration of the plaintiff's protected characteristics was not "a determining factor" in its employment action. See Matras, supra at 684, 385 N.W.2d 586; Meagher, supra at 710, 565 N.W.2d 401. We believe that the federal approach in dealing with direct evidence of employment discrimination and employer mixed motives is superior to the McDonnell Douglas formula, which Michigan courts have traditionally attempted to apply in these cases.

Turning to the trial court's decision in the present case, in light of plaintiff's direct evidence of discriminatory animus, we conclude that the trial court erred in applying the three-part framework outlined in McDonnell Douglas and in granting summary disposition to defendant on that basis. Consequently, we remand this case to the trial court for further proceedings. On remand, the trial court is directed to reconsider defendant's motion in a manner consistent with this opinion.^[16]

III

Plaintiff's Discovery Request

Plaintiff next argues that the circuit court abused its discretion in denying her motion to compel discovery of certain statistics regarding the racial or ethnic composition of defendant's work force. We agree.

This Court reviews a trial court's decision to grant or deny discovery for an abuse of discretion. SCD Chemical Distributors, Inc. v. Medley, 203 Mich.App. 374, 382, 512 N.W.2d 86 (1994). MCR 2.302(B)(1) provides that parties may obtain relevant, nonprivileged information, even if such information is inadmissible at trial, provided that the information sought appears reasonably calculated to lead to the discovery of admissible evidence. A court abuses its discretion when it denies discovery of relevant information. Michigan Millers Mut. Ins. Co. v. Bronson Plating Co., 197 Mich.App. 482, 495, 496 N.W.2d 373 (1992), aff'd. on other grounds 445 Mich. 558, 519 N.W.2d 864 (1994).

Plaintiff asked defendant to produce "EEO-1" reports prepared since 1990 that pertained to defendant's Detroit office.^[17] EEO-1 reports are federally required reports in which federal contractors must disclose by employment classification the demographic characteristics of its work force. Gulf Oil Corp. v. Brock, 250 U.S.App.D.C. 213, 214-215, 778 F.2d 834 (1985). Plaintiff argued that the reports would support her claim that defendant did not hire minorities in Detroit and, in turn, that defendant did not hire plaintiff because of her race. The circuit court ruled that the EEO-1 reports were "not probative" of her claims and denied plaintiff's motion to compel production of the EEO-1 reports.

Defendant does not argue that the information sought was privileged. However, defendant asserts that the information sought was overbroad, covering defendant's 1,650employee national work force, whereas plaintiff applied for and was denied a position in defendant's eight-person legal department in Detroit. Defendant relies on Scales v. J.C. Bradford & Co., 925 F.2d 901, 906-907 (C.A.6, 1991), and similar federal cases for the proposition that when the alleged illegal employment decision is localized in an isolated employment unit, a plaintiff is not entitled to discover corporate-wide demographic work force statistics.

Despite defendant's characterization of plaintiff's discovery request, plaintiff's motion to compel discovery references only EEO-1 reports for defendant's Detroit office. Further, while the trial court found that the reports were irrelevant, the reports in question were never made a part of the record and were not produced for an in camera inspection by the circuit court. Consequently, there is no record basis upon which we can conclude either that the EEO-1 reports were, as the trial court found, "not probative" of defendant's alleged discrimination^[18] or that plaintiff's discovery request is similar to the type of inappropriate fishing expedition that Scales prohibited.

Accordingly, we reverse the decision of the circuit court with regard to plaintiff's motion to compel discovery and remand with instructions for the court to make a determination, based on record evidence, whether the requested information is relevant and, if so, whether plaintiff's discovery of this information may be properly limited.

Reversed and remanded for further proceedings consistent with this opinion. We do not retain jurisdiction.

NOTES

[*] Circuit judge, sitting on the Court of Appeals by assignment.

[1] For case of reference in this opinion and unless otherwise noted, "defendant" will refer to all three defendants collectively as plaintiff's potential employer.

[2] Although plaintiff implies that she was also discriminated against because of her weight, her appellate brief asserts that defendant discriminated against her solely because of her race. Therefore, to the extent that plaintiff has asserted a claim for weight discrimination, that claim has been abandoned on appeal. Froling v. Carpenter, 203 Mich.App. 368, 372, 512 N.W.2d 6 (1993).

[3] Plaintiff did not directly contest that the applicant to whom the job offer was made had higher qualifications. Instead, plaintiff curiously asserts that this applicant's qualifications were irrelevant because that applicant declined the offer.

[4] Campbell averred that he was unable to obtain permission to raise the salary for the legal secretarial position. Therefore, he chose to restructure it into two lower-compensated clerical positions. It is apparently undisputed that the two support positions that were ultimately filled by defendant paid salaries well below plaintiff's stated salary demand.

[5] We note that claims under state statutes prohibiting discrimination often concern issues of fact relating to the conduct or motive of the defendant. Betty v. Brooks & Perkins, 446 Mich. 270, 282, 521 N.W.2d 518 (1994). The racebased comments testified to by plaintiff, and the reasonable inferences that they raise, call into question defendant's motivation in declining to hire plaintiff. The defendant's employees in question deny making the comments, which, in turn, calls into question plaintiff's credibility. When credibility is at issue, summary disposition rarely is appropriate. Metropolitan Life Ins. Co. v. Reist, 167 Mich.App. 112, 121, 421 N.W.2d 592 (1988). Nonetheless, when a motion for summary disposition in a discrimination case is properly supported, the motion may be granted. See, e.g., Clark v. Uniroyal Corp., 119 Mich.App. 820, 327 N.W.2d 372 (1982); Smith v. Consolidated Rail Corp., 168 Mich.App. 773, 778-779, 425 N.W.2d 220 (1988); Sisson v. Univ. of Michigan Bd. of Regents, 174 Mich.App. 742, 747-749, 436 N.W.2d 747 (1989).

[6] The prima facie case analysis formulated in McDonnell Douglas requires a showing

"... (i) that [the complainant] belongs to a racial minority; (ii) that he applied and was qualified for a job for which the employer was seeking applicants; (iii) that, despite his qualifications, he was rejected; and (iv) that, after his rejection, the position remained open and the employer continued to seek applicants from persons of complainant's qualifications." [Allen v. Comprehensive Health Services, 222 Mich.App. 426, 430, 564 N.W.2d 914 (1997), quoting McDonnell Douglas, supra at 802, 93 S.Ct. at 1824.]

As noted in the text, Michigan case law has varied the McDonnell Douglas elements of the prima facie case. In one such Michigan formulation, to establish a prima facie case of intentional discrimination on the basis of circumstantial evidence, a plaintiff must show that she was a member of a protected class, that she was discharged, and that the person who discharged her was predisposed to discriminate against persons in plaintiff's protected class and actually acted on that predisposition in discharging her. Singal v. General Motors Corp., 179 Mich.App. 497, 503, 447 N.W.2d 152 (1989). We rely upon the Singal formulation of the McDonnell Douglas prima facie case because the parties fashioned their circuit court and appellate arguments around the decisionmaker's predisposition, or lack thereof, to discriminate.

[7] As an African-American, plaintiff is a member of a protected class. Defendant's refusal to hire plaintiff satisfies the "discharge" element. See Laitinen v. Saginaw, 213 Mich.App. 130, 132, 539 N.W.2d 515 (1995); Bryant v. Automatic Data Processing, Inc., 151 Mich.App. 424, 426, 390 N.W.2d 732 (1986). With respect to the "predisposition to discriminate" element, because we are obligated to construe the evidence in the light most favorable to plaintiff, we must accept plaintiff's argument that the racially discriminatory comments of the others participating in the interviewing process must be imputed to Campbell, who defendant states was "the" decisionmaker. Skinner, supra at 161-162, 516 N.W.2d 475; see also Shager v. Upjohn Co., 913 F.2d 398, 405 (C.A.7, 1990). But see Aungst v. Westinghouse Electric Corp., 937 F.2d 1216, 1221 (C.A.7, 1991) (no imputation where the decisionmaker consulted with a supervisor who harbored discriminatory animus, but the decisionmaker relied upon various information, including his own observations in deciding).

In this case, Campbell testified in his deposition that he consulted with and considered Hatmaker's views concerning plaintiff. Consequently, we believe that plaintiff established a question of material fact regarding whether Campbell's decision was influenced by a person that plaintiff alleges operated with racial animus. As a result of these imputed inferences, Campbell cannot be deemed the sole decisionmaker for the purpose of this motion under MCR 2.116(C)(10), and the comments of Brink and Hatmaker do not fall within the "stray remarks" doctrine in the line of cases relied upon by defendant. See, e.g., McDonald v. Union Camp Corp., 898 F.2d 1155 (C.A.6, 1990). For these reasons, we conclude that plaintiff has established a prima facie case under the Singal version of the McDonnell Douglas model.

[8] Defendant submitted the following reasons for refusing to offer plaintiff the job: (1) Campbell believed that another interviewee was more qualified than plaintiff, (2) plaintiff's stated salary demand was excessive and beyond that associated with the position for which she applied, (3) plaintiff acted unprofessionally and performed poorly during the second interview with Campbell and Hatmaker, and (4) plaintiff displayed an inability to perform her temporary legal secretarial duties without extra supervision. These reasons constitute a sufficient articulation of legitimate nondiscriminatory reasons for declining to hire plaintiff.

[9] Plaintiff inadequately rebutted defendant's legitimate reasons. Plaintiff did not show that she was as qualified as the applicant to whom defendant offered the position, and she asked for a salary that exceeded the amount defendant offered. Moreover, plaintiff conceded that she performed poorly at the interview with Campbell.

[10] Direct evidence of discrimination removes the case from McDonnell Douglas because the plaintiff no longer requires the inference of discrimination provided by the McDonnell Douglas "presumptive" prima facie case. Terbovitz v. Fiscal Court of Adair Co., Kentucky, 825 F.2d 111, 114-115 (C.A.6, 1987).

[11] See n. 7.

[12] Since the Michigan Civil Rights Act prohibits discrimination against an individual "because of" race, M.C.L. § 37.2202(1)(a); M.S.A.§ 3.548(202)(1)(a), this is essentially an issue of causation. See Haskins v. United States Dep't of the Army, 808 F.2d 1192, 1197 (C.A.6, 1987).

[13] Although no reported Michigan case has done so in the context of a civil rights claim, this Court applied this standard in Napoleon Ed. Ass'n v. Napoleon Community Schools, 125 Mich.App. 398, 400, 336 N.W.2d 481 (1983), a case involving a violation of the public employment relations act, M.C.L. § 423.201 et seq.; M.S.A. § 17.455(1) et seq.

[14] Unlike the approach in some circuits, the Sixth Circuit Court of Appeals applies this test to title VII liability rather than only to relief and remedy. Haskins, supra at 1198. We believe that the Sixth Circuit Court of Appeals' approach is the better-reasoned approach.

[15] Because the Michigan Civil Rights Act is patterned on the federal Civil Rights Act of 1964, we note that our analysis is not affected by the 1991 amendments of title VII, which have effectively overruled Price Waterhouse. See Woodson v. Scott Paper Co., 109 F.3d 913, 932 (C.A.3, 1997).

[16] We express no opinion with respect to whether plaintiff has established the necessary causal linkage between defendant's decision not to hire her and the discriminatory animus attributable to defendant's decisionmaker. We further note that four justices of our Supreme Court have recently reemphasized that the Michigan Civil Rights Act addresses only whether an employer's decision was motivated by discriminatory animus, not whether the employer's choice among two qualified candidates was "`wise, shrewd, prudent, or competent.'" Town v. Michigan Bell Telephone Co., 455 Mich. 688, 704, 568 N.W.2d 64 (1997) (citation omitted); see also Justice RILEY's concurring opinion in Town, id. at 707, n. 2, 568 N.W.2d 64.

[17] The circuit court record contains no reference to plaintiff's original requests for production of documents and neither party appended the requests to their respective appellate briefs. Consequently, the only record evidence of the records plaintiff requested are contained in plaintiff's motion to compel discovery and defendant's response thereto.

[18] We note that small statistical samples often provide little or no probative force to show discrimination. Simpson v. Midland-Ross Corp., 823 F.2d 937, 943, n. 7 (C.A.6, 1987).