The opinion of the court was delivered by: COOK
The Plaintiff, Cynthia Hall, is an African-American female who has charged her former employer, State Farm Insurance Companies (State Farm), and three of her supervisors (Robert Schmid, Mary Lollar, and James Roderique) with wrongful acts of racial and gender discrimination, in violation of Title VII, 42 U.S.C. § 2000e et seq., and the Michigan Elliott-Larsen Civil Rights Act (ELCRA), Mich. Comp. Laws § 37.2101 et seq. She has also brought a claim against these four Defendants for their intentional infliction of emotional distress upon her. As a result of these alleged violations, Hall seeks two million dollars in exemplary and punitive damages, plus costs and attorneys fees.
On March 17, 1998 the Defendants filed a motion for a summary judgment. At the conclusion of the hearing, this Court took the motion under advisement and subsequently issued an Order that (1) granted Hall additional time in which to pursue discovery, and (2) provided each party with an opportunity to file supplemental briefs. Those briefs have now been submitted. In her supplemental brief, Hall asks this Court to (1) deny the Defendants' motion, or (2) continue this matter under advisement pending a decision on her motion to compel the production of certain documents from State Farm. However, the official record in this cause indicates that her motion was denied by Magistrate Judge Marc L. Goldman, to whom it had been referred. Furthermore, it appears that the time for Hall to file her objections to his Order has expired. Consequently, this matter is now ripe for a decision on the merits of the Defendants' summary judgment motion. For the reasons that have been set forth below, the motion is granted in part and denied in part.
Hall began her employment with State Farm on January 3, 1977. Between 1978 and 1986 she was promoted or laterally moved to several positions within the Personnel Department. During her tenure with State Farm, Hall sought to obtain a promotion to a Personnel Manager position, a process which necessarily involved interviews with the Company persons with promotional authority. Hall asserts that she was informed by a colleague that the interviewers thought of her as nothing more than a black female from the streets of Detroit.
As a result, she became "temporarily devastated" and demoralized at her prospects for promotional opportunities in the Personnel Department,
and was extremely disappointed at the end of 1986 when she was moved from her level-MA5 Personnel Representative II position to an MA4 Claims Supervisor position. Although the record shows that she received the same base pay, Hall characterizes this as a demotion because her salary raises were reduced.
In February 1988, Hall was interviewed by Schmid and his supervisor, Robert Conley, both white males, for the position of Bodily Injury (BI) Claims Superintendent and Office Manager, level MA6, in the Madison Heights, Michigan office. This position entailed the responsibility for, among other things, supervising Claim Representatives and the claim files that had been assigned to the unit. Although Hall was selected for the job, State Farm did not offer it to her until December 14, 1988.
As a result, she did not receive a pay increase for this promotion until March 18, 1989.
After obtaining the Claims Superintendent position, Hall logged an "Open Door" grievance in February 1993 with David Rost, a white male, who was the Division Manager.
In this fourteen-page, single-spaced document, Hall described the difficulties that she had experienced with State Farm as a result of having "broken the 'glass ceiling' for blacks in the Detroit Metro area." She reported that, upon assuming the BI Claims Superintendent position, Schmid blatantly told her that (1) she took the job from more deserving candidates, and (2) he was not in favor of her promotion. According to Hall, he began to openly act out his hostility after Conley left. Among her chief complaints is that Schmid continually tried to force her to switch positions with his friend, Bill Sutton, a white male, who was the Personal Injury Protection (PIP) Claims Superintendent in the Madison Heights office. Although the BI and PIP superintendent positions received the same salary and had the same classification, the latter job was more demanding due to a heavier caseload (277 files compared to 1,080 files, respectively), and came without the authority of Office Manager. Her grievance further documents (1) the uncooperative, rude, and dismissive treatment that she received from Sutton, (2) Schmid's lack of effort in addressing this misbehavior, (3) efforts by Schmid and Sutton to avoid hiring minorities in any units other than BI, despite affirmative action mandates from State Farm, which led to claims by other personnel that Hall was attempting to create an all-minority unit, (4) dismissive treatment from Schmid, such as disregarding her input when designing the space allocation in a new building, (5) Schmid's efforts to undermine her supervision through "purely sexist . . . professional sabotage," such as (a) soliciting "Open Door" grievances from employees whom she had reprimanded, (b) criticizing her regardless of the merit of the employee's reprimand, and (c) advising those employees who were still in training that they need not follow her instructions, and (6) Schmid's unjustified characterization of her as being a "hardnosed," "tough," and "mean" administrator.
Hall also complains that in August 1993 State Farm allowed Schmid to force her to involuntarily exchange job duties with Sutton and to relinquish her title as Office Manager. During this period of time, State Farm had asked the Superintendents, who were under Schmid's supervision, to transfer between the BI and PIP units for the purpose of cross-training. Under this plan, the transfers were to last for a period of three years. However, before the end of the three-year period, Sutton was transferred out of the Madison Heights office.
Instead of returning Hall to her Madison Heights BI Claims Superintendent and Office Manager position, State Farm moved a white male into that slot in March 1996.
Thus, from August 1993 until her termination, Hall worked as a PIP Claims Superintendent in the Madison Heights center.
Schmid acted as Hall's supervisor from January 1989 until June 1994, when Lollar, a white female, served as his successor. Lollar acknowledges that she had conversations with Schmid pertaining to his difficulties with Hall.
According to Hall, Lollar maintained a personal desk file (as distinguished from the official Company personnel file), which contained many disparaging documents about her from the preceding three years, in contravention of a Company policy which restricted the retention of such a file for more than one year.
Although at least one document demonstrates that Hall was considered by Lollar to be a very good employee,
Hall complains that Lollar continually berated the quality of her work in an unprofessional manner.
Among Hall's complaints are that Lollar unfairly and improperly criticized her writing to the point of insinuating that she could not write a simple memo without assistance.
Hall subsequently received medical treatment for atypical chest pains, which were attributed to tension and stress, and thereafter took a one week disability leave.
When Lollar left the Madison Heights office in June 1996, she was replaced by Roderique, a white male. Hall complains that Lollar perpetuated a cycle of discrimination by providing Roderique with her personal desk file.
During this general time period, Hall was fielding customer complaints regarding a Claims Representative named Patricia Sebenick, a white female.
On August 23, 1996 Hall sent Roderique a memo, in which she voiced some of her concerns about Sebenick.
Roderique testified at a deposition that he told Hall the memo "contained a lot of BS."
On Friday, September 20, 1996 at 5:00 p.m. Roderique met with Sebenick, and two other white employees (Jeff Gabriel and Kim Smith), all of whom expressed their frustration at the treatment that they were receiving from Hall, and the hostile environment that had been created by her.
On the following Monday morning, Roderique called Hall into his office to inform her of the complaints and issue a verbal warning.
Roderique acknowledges that (1) he did not make an attempt to speak to anyone else in the unit to investigate or verify the complaints prior to his meeting with Hall,
and (2) none of the African-American adjusters complained about Hall.
On September 27, 1996 Hall prepared an eleven-page, single-spaced "Open Door" grievance against Roderique and faxed it to Rost on September 30, 1996.
This grievance, which recounts numerous incidents in the unit involving Sebenick, complains of a racially hostile environment that had been created by Roderique whom she contends turned their disagreements into a race issue by consulting only with non-minorities and ignoring the African Americans in her PIP unit. Hall explains that she was upset at Roderique for joining a "clique" of employees to take a critical stance against her despite having served as her supervisor for only about three months. It should be noted that Hall neither mentions or alleges sex discrimination in her grievance.
On the following day, Roderique criticized the timeliness of Hall's reports.
Although this criticism was oral, Roderique issued his first written disciplinary memo to her on October 1, 1996.
Roderique followed this by issuing two other written disciplinary memos against Hall on October 10, 1996 and October 28, 1996. All three of these memos addressed Hall's alleged problem with untimely reports as well as errors in them.
Hall contacted Rost to request relief from Roderique's allegedly retaliatory behavior. In early October 1996, Rost, believing that the matters in Hall's department had become serious, asked the Human Resources Department to conduct an investigation in accordance with State Farm policy.
Rost assigned Tony Dean, an African-American male who was employed as a State Farm Human Resources Specialist, to evaluate the situation.
Dean obtained the assistance of another Human Resources Representative, Darryl Gilliam, also an African-American male, in conducting the investigation.
Their investigation involved interviewing all but one of the State Farm employees who had been supervised by Hall and Roderique in the PIP unit.
These employees consisted of four African-American females, three Caucasian females, one African-American male, and one Caucasian male.
Additional employees were also interviewed as a result of referrals. Those in the PIP unit who were not interviewed were one Caucasian female employee, who was out of the office during Dean's two-week investigation, and one Caucasian male employee, who was on limited tenure.
In his investigative report, Dean concluded that "the concerns expressed by Superintendent Hall regarding DCS Roderique were inconclusive," but that it was "evident that there is conflict and/or hostility between Superintendent Hall and DCS Roderique."
The report acknowledged a unanimous feeling among the employees within the PIP unit that they "did not perceive racial discrimination of any form," and concluded that "it appears that DCS Roderique was following performance management actions when bringing performance issues to Superintendent Hall's attention."
It also noted that a "tremendous amount of tension" existed in Hall's PIP unit, with a majority of employees feeling that they would be targeted by Hall if any of them had questioned her actions.
During the investigation Sebenick reported her concern regarding the possibility of file altering by Hall, a matter which was brought to upper management's attention for further investigation. As a result of this "new development," and even though Dean's report states that "each employee was asked questions that specifically related to the allegations made by Superintendent Hall," Hall alleges that Dean and his partner did not investigate her complaint against Roderique but rather sought to solicit information from Madison Heights employees in an obvious effort to build a case against her. The Defendants dispute this charge, claiming that, concurrent with Dean's investigation, State Farm was conducting a regularly scheduled review of PIP files, known as a "PIP blitz," including those handled in Hall's unit. Lollar coordinated the PIP review, during which she was approached by Gabriel and Sebenick. They expressed concerns about Hall's handling of claim files, including her instruction to Sebenick to change a request for payment authority on a claim file for Michael Morgan (Morgan file) from more than $ 300,000 to only $ 49,000.
This file contained Hall's handwritten note, in which she purportedly instructed Sebenick to request a payment of $ 49,422 rather than the $ 318,000 that was actually paid by the Company. After Sebenick allegedly refused to comply with this directive, Hall placed a handwritten note in the file instructing her secretary, Margaret Love, to make the changes. Lollar forwarded this information to Roderique and Rost's supervisor, Mark Odland, State Farm Vice President of Operations.
Hall objects to the Defendants' representations regarding the Morgan file, contending that they have deliberately misstated the facts. Hall asserts that Claims Representative Mary Ann Buono, who was responsible for paying bills in the Morgan file, did so without proper authority. After Buono was transferred, Sebenick assumed responsibility for the file and continued making payments without Hall's authority. When Sebenick discovered that no authority had been obtained for the payments, she brought the matter to Hall's attention. According to Hall, to get a correct accounting on the file, she asked Sebenick to total all of the bills that had been made on the file. Sebenick refused to do. Because the bills were mounting in the file, Hall manually totaled the drafts that Sebenick had paid and arrived at the $ 49,422.39 figure. As Hall explains it, because the Morgan file was of an unusual variety that is not maintained on a computer network accessible by claims personnel, at least a two-week delay was inherent in obtaining an accurate total of the amount paid by Buono. As a consequence, Hall submitted a request to Lollar for additional authority with which to satisfy State Farm's obligation, noting that the payments on the Morgan file had already exceeded its authorized limitation.
Lollar subsequently granted payment authority of $ 200,000, and, upon receiving the Claim Committee report, obtained additional monies in the sum of $ 638,000 in payment authority.
Lollar testified at deposition that she did not recall anything unusual about the Morgan file or any conversations that she had with Hall about it.
Thus, she has not disputed Hall's version of events.
Roderique also conducted a review of the PIP files from Hall's unit and found documents that he considered to have been altered in the John Ferguson claim file (Ferguson file). He reported this information to Rost, who in turn conveyed Roderique's observations to Odland. Interestingly, Roderique testified at a deposition that (1) being "over authority" was not a problem which was unique to Hall, and (2) such files are usually discovered by State Farm during a semi-annual audit, as evidenced by the PIP blitz. Hall points out that Roderique testified that he merely believed that the documents had been altered, but was unable to provide any facts to support his belief.
On the basis of the array of accusations, the Company decided to have a team of Divisional Claim Superintendents review more than two hundred of Hall's claim files. This review was not part of any regularly scheduled audit, and neither Schmid, Lollar, nor Roderique took part in it. Rost felt that the review raised concerns about Hall's performance, primarily from a group of over thirty files which "involved issues of file authority not being apparently up to date or proper in the files or something along the lines of that--where there's indication that there might have been less management involvement than there should have been, a variety of reasons.
He shared these findings with Odland, who decided to call in Regional Audit Consultant Ralph Weber, of the Audit Department, to investigate the files in Hall's PIP unit. Hall was then placed on administrative leave on November 4, 1996. Two days later she filed a race discrimination charge with the Equal Employment Opportunity Commission (EEOC).
As a result of his investigation, Weber concluded that Hall had improperly handled the Morgan and Ferguson files.
Additionally, two employees, Michelle Meulebrouck and Erika Jhons, had informed him that Hall had previously instructed them to make false Claim Activity Log entries which would incorrectly indicate that the issues had been addressed in a timely manner.
Weber also discovered that Hall had authorized fifteen hours of overtime payments for a mail and file clerk, Tracey Walker, and for Love, although Hall knew that they had worked only seven and one half hours. This authorization violated State Farm policy. Love did not accept this overtime pay, believing that it would have been improper to do so. On the other hand, Walker, apparently not sharing Love's sentiments, accepted the overtime pay, which was made possible by Hall who contacted her supervisor and represented that the hours had been worked. Hall also wrote the supervisor "I told her we'd probably let her take one day of comp and pay her the other hours in overtime. If you'd rather handle it another way, please let me know. Thank you."
Hall contests Weber's conclusions on the overtime pay issue, on several grounds. First, Hall asserts that she had the managerial discretion to compensate Walker who worked from Sunday evening to midnight in preparation for the PIP blitz.
Second, Hall explains that she (1) compensated Walker for the actual 7.5 hours worked, (2) only recommended that Walker receive a day off in compensatory time without pay, and (3) never authorized Walker's receipt of 15 hours in overtime pay.
In his report, Weber indicated that he had been informed by Love that Hall may have used State Farm funds to pay Shamrock Investigations (Shamrock), a State Farm vendor, $ 2,300 to do surveillance work for personal reasons. The issue was raised when Love was unable to match a Shamrock invoice to a related claim number. According to Love, it was brought to the attention of Hall who took the invoice and announced that it she would take care of it. The State Farm investigation into the Shamrock matter had not been completed when Hall was terminated.
State Farm also alleges that Hall received legal assistance from a State Farm law firm vendor for personal reasons, paying for costs but not attorneys fees. State Farm characterizes these instances as having violated its policy against acceptance of business gifts or other favors. Hall (1) contends that any such policy was ever implemented, (2) asserts that she paid whatever the lawyer billed, and (3) denies that she obtained the lawyer's services with the intent of not paying for the attorney's time.
Based upon these findings, State Farm terminated Hall's employment on December 3, 1996. The Defendants assert that another reason for Hall's termination was that during the PIP blitz approximately thirty-eight files assigned to her unit could not be found. In her defense, Hall maintains that (1) the maintenance of storage files was not within her job duties, and (2) Roderique acknowledged that twenty-nine of these files were subsequently found. Moreover, she points to a basic unfairness in the process by claiming that (1) the request to pull files should have been directed to the Madison Heights mail and records unit, (2) a list of over 1,378 requested files was received by her on the Friday immediately preceding the PIP blitz, which was scheduled to begin on the following Monday, and (3) she lacked access to any files in dead storage.
Finally, the Defendants assert that Hall's backlog in collecting nearly one million dollars in claims on behalf of State Farm from the Michigan Catastrophic Claims Association (MCCA) also supported her termination. Hall contests this assertion on the basis that significant lags in seeking reimbursement from the MCCA were a common deficiency throughout State Farm. It is her contention that State Farm's performance in seeking reimbursement from the MCCA was so much poorer than its competitors that the deficiency was brought to Odland's attention along with the suggestion that the collection procedure be reviewed.
Federal Rule of Civil Procedure 56 governs summary judgment motions. Subsection 56(c) provides, in part, that:
the judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.
The moving party has the burden of demonstrating that there is no genuine issue as to any material fact, and summary judgment is to be entered if the evidence is such that a reasonable jury could find only for the moving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). "There is no issue for trial unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party." Id. at 250.
In assessing a summary judgment motion, the court must examine any pleadings, depositions, answers to interrogatories, admissions, and affidavits in a light that is most favorable to the non-moving party. Fed. R. Civ. P. 56(c); see United States v. Diebold, Inc., 369 U.S. 654, 655, 8 L. Ed. 2d 176, 82 S. Ct. 993 (1962); Boyd v. Ford Motor Co., 948 F.2d 283, 285 (6th Cir. 1991), cert. denied, 503 U.S. 939, 117 L. Ed. 2d 624, 112 S. Ct. 1481 (1992); Bender v. Southland Corp., 749 F.2d 1205, 1210-11 (6th Cir. 1984). It is not the court's role to weigh the facts. 60 Ivy Street Corp. v. Alexander, 822 F.2d 1432, 1435-36 (6th Cir. 1987). Rather, the judge's responsibility is to determine "whether . . . there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Anderson, 477 U.S. at 250.
When a summary judgment motion is predicated on a factual issue and is adequately supported, the non-moving party must take affirmative action to avoid entry of summary judgment.
When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of the adverse party's pleading, but the adverse party's response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial.
Fed. R. Civ. P. 56(e). The mere existence of a scintilla of supporting evidence is insufficient. Street v. J.C. Bradford & Co., 886 F.2d 1472, 1477 (6th Cir. 1989). Additionally, a party's failure to make a showing that is "sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial" mandates the entry of summary judgment. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986).
If this Court feels that a genuine issue of material fact exists as to a particular claim, or that the moving party is not entitled to judgment as a matter of law on a particular claim, it may deny summary judgment on that claim even while granting partial summary judgment on any remaining claims.
If on motion under this rule judgment is not rendered upon the whole case or for all the relief asked and a trial is necessary, the court at the hearing on the motion . . . shall if practicable ascertain what material facts exist without substantial controversy and what material facts are actually and in good faith controverted. It shall thereupon make an order specifying the facts that appear without substantial controversy and what material facts are actually and in good faith controverted.
Fed. R. Civ. P. 56(d). Thus, each individual claim must be analyzed under the summary judgment standard.
Defendants Schmid, Lollar, and Roderique argue that a summary judgment must be granted in their favor because individual liability may not be imposed against them under either Title VII or ELCRA. As explained below, the Court concludes that this assertion is correct as to Title VII, but incorrect as to ELCRA.
Title VII provides that "it shall be an unlawful employment practice for an employer" to discriminate on the basis of race or sex. 42 U.S.C. § 2000e-2(a). Under Title VII an "employer" is defined as "a person engaged in an industry affecting commerce who has fifteen or more employees . . . and any agent of such person." 42 U.S.C. § 2000e(b). "Agent" is not defined in Title VII but has been characterized as "an individual who 'serves in a supervisory position and exercises significant control over the plaintiff's hiring, firing or conditions of employment.'" Pierce v. Commonwealth Life Ins. Co., 40 F.3d 796, 803 (6th Cir. 1994) (quoting Sauers v. Salt Lake County, 1 F.3d 1122, 1125 (10th Cir. 1993)).
In Wathen v. General Electric Co., 115 F.3d 400, 405 (6th Cir. 1997), the Sixth Circuit Court of Appeals (Sixth Circuit) joined the majority of its sister circuits in holding that "an individual employee/supervisor, who does not otherwise qualify as an 'employer,' may not be held personally liable under Title VII."
It found this holding warranted because the statutory scheme and remedial provisions in Title VII, as well as "the legislative history and the case law support the conclusion that Congress did not intend individuals to face liability under the definition of 'employer' it selected for Title VII."
Wathen, 115 F.3d at 405-06. As a consequence, the Sixth Circuit upheld the granting of a summary judgment motion in favor of three supervisors who worked for the defendant, General Electric Co., in what it characterized as "upper-level management" positions. Wathen, 115 F.3d at 402, 406.
Hall argues that Schmid, Lollar, and Roderique fall within the Title VII exception which allows individual liability when that person qualifies as an "employer." Courts considering this exception have written "an individual qualifies as an 'employer' under Title VII if he or she serves in a supervisory position and exercises significant control over the plaintiff's hiring, firing or conditions of employment." Paroline v. Unisys Corp., 879 F.2d 100, 104 (4th Cir. 1989), aff'd in pertinent part, 900 F.2d 27 (4th Cir. 1990) (en banc); Sauers, 1 F.3d at 1125. This definition allows for individual liability when the defendant "operates as the alter ego of the employer." Sauers, 1 F.3d at 1125.
Hall argues that all of the supervisors at State Farm meet this definition because they continually exercised "significant control" over those employees under their supervision. In support of this position, she cites the deposition testimony of Odland who stated that the Company supervisors initially make termination recommendations to the Human Resources department.
A review of Title VII case law does not support such an expanded interpretation. To the contrary, courts have been disinclined from finding individual liability under Title VII. For example, the Sauers Court held that an individual qualifies as an "employer" for Title VII purposes if he or she (1) serves in a supervisory position, and has (2) "significant control over plaintiff's hiring, firing, or conditions of employment," and (3) "the ultimate authority over [the plaintiff's] employment and working conditions." Sauers, 1 F.3d at 1125; accord Harvey v. Blake, 913 F.2d 226, 227 (5th Cir. 1990) (immediate supervisors are "employers" within meaning of Title VII when they are delegated traditional employer rights such as hiring and firing). Although Sauers found that the supervisor-defendant in that case was a "paradigm example" of someone who met this standard, it nonetheless ruled that he could only be sued in his "official capacity" and thus the suit against him "operated" as one against the municipality which employed him. Sauers, 1 F.3d at 1125. The Tenth Circuit Court of Appeals also opined that "under Title VII, suits against individuals must proceed in their official capacity; individual capacity suits are inappropriate." Id.
This result is consistent with the tide of decisions which disallow individual liability under Title VII. At a minimum, federal decisions interpret Title VII as requiring at least actual and direct control over employment conditions and status before liability may be imposed. Odland's testimony establishes that State Farm supervisors do not have that level of control. Even though (1) Roderique may have recommended Hall's termination if she admitted to altering the Morgan or Ferguson file,
or (2) Schmid may have had some level of influence over Hall's promotion to the BI Claim Superintendent position and her transfer to the PIP unit, these facts do not adversely affect the ultimate conclusion that they, along with Lollar, lacked any authority to unilaterally terminate Hall's State Farm employment. Thus, Schmid, Lollar, and Roderique are granted a summary judgment on Hall's federal race and sex discrimination claims because they may not be held individually liable under Title VII.
ELCRA declares that the right to obtain employment in the absence of race or sex discrimination is recognized and declared to be a civil right. Mich. Comp. Laws § 37.2102(1). It prohibits these practices by the same mechanism as is used in Title VII; namely, by making it unlawful for an "employer" to discriminate on the basis of race or sex. Mich. Comp. Laws § 37.2202(1). Agents are also included within ELCRA's statutory definition of "employer." Mich. Comp. Laws § 37.2201(a). Defendants Schmid, Lollar, and Roderique argue that they should be granted a summary judgment on Hall's ELCRA race and sex discrimination ...