ZOPPI v. CHRYSLER CORPORATION

RASHEED v CHRYSLER CORPORATION Docket Nos. 95122, 95774. Argued November 3, 1993 (Calendar No. 10). Decided May 17, 1994. Muhammad Rasheed brought an action in the Wayne Circuit Court under the Civil Rights Act, MCL 37.2101 et seq.; MSA 3.548(101) et seq., against Chrysler Corporation and James Senart, his supervisor at Chrysler, alleging wrongful discharge. Before trial, the court, Richard P. Hathaway, J., ruled that any damages would be limited to the thirteen-month period of unemployment preceding the plaintiff’s rejection of an offer by Chrysler to reinstate him to his former position with full seniority, but without backpay. Following trial, the court granted a directed verdict for the defendants on all but the plaintiff’s claim of religious discrimination, entering judgment on a jury verdict of that claim for the plaintiff. In a subsequent hearing, conducted without a jury, the court ordered Chrysler to reinstate the plaintiff as a newly hired employee with no seniority. The Court of Appeals, Fitzgerald, P.J., and Hood, J. (J. C. Kingsley, J., dissenting in part), affirmed (Docket No. 129620). Both parties appeal. In an opinion by Justice Riley, joined by Chief Justice Cavanagh, and Justices Brickley, Boyle, Griffin, and Mallett, the Supreme Court held: Because the trial court made its decision regarding the appropriate remedy before all factual issues were decided, remand is required to resolve the issue of the reasonableness of the plaintiff’s rejection and a reassessment of the appropriate remedy. The trial court properly denied the defendants’ motion for a directed verdict on the claim of intentional discrimination because factual questions remained. 1. Trial courts have wide discretion to fashion appropriate remedies in wrongful discharge cases. A discharged employee has a duty to mitigate damages. Failure to do so, whether by failing to seek other suitable employment or by rejecting an unconditional reinstatement offer, is an affirmative defense to be established by the employer. Whether an employee acted reasonably in not seeking or accepting particular employment is to be decided by the trier of fact. 2. Reinstatement offers that are clear on their face may be construed by the courts as a matter of law. Where an offer properly may be characterized as ambiguous, construction is permitted. Where it becomes necessary to consider the parties’ intent, the inquiry is a question of fact. While conditionality may be decided as a matter of law under appropriate circumstances, reasonableness is a question of fact that must be decided independently. An unconditional offer of reinstatement may be used as proof of an unreasonable rejection in satisfaction of the employer’s burden. However, if there are any differences between the offer and the previous employment, with the exception of backpay, rejection based in part on the difference precludes a peremptory ruling by the court, and reasonableness in light of the particular circumstances must be determined. 3. Once it is established that a reinstatement offer is unconditional, a rebuttable presumption arises that its rejection is unreasonable. To rebut, the employee must offer reasonable grounds for rejection that are based on the employment as contemplated by the offer rather than for purely personal reasons. Failure by the claimant to provide a legitimate basis for a rejection forfeits the right to front pay. In this case, the issue of the reasonableness of the plaintiff’s rejection was improperly removed from the jury. The trial court erred as a matter of law in deciding the continued backpay issue before the factfinder decided the defendants’ ultimate liability for the alleged discriminatory discharge, requiring reversal of the Court of Appeals decision and remand to the trial court for reconsideration of the issue of reasonableness and the appropriate remedy. 4. A claimant asserting an intentional discrimination claim must establish as part of a prima facie case a discriminatory predisposition of the employer and an act in furtherance of this predisposition. In this case, the decision to terminate the plaintiff was made entirely on the basis of the supervisor’s report, and the court properly allowed the plaintiff to offer proof that the reason asserted was a mere pretext. In unique circumstances, ordinarily neutral mechanisms for termination may qualify as discriminatory employment practices. The facts of this case constitute such unique circumstances. Reasonable jurors could have reached different conclusions regarding whether the labor relations manager was aware of the alleged discrimination and acted in furtherance of it. Reversed and remanded. Justice Levin, writing separately, stated that federal case law does not support the proposition that Michigan courts have broad discretion to fashion appropriate remedies in wrongful discharge cases. Federal cases construing title VII of 42 USC 2000e-5(g) are not persuasive where a damage remedy has been sought under the Michigan Civil Rights Act. Nor do those cases grant federal courts the power to deny a plaintiff found to be a victim of an unlawful employment practice a remedy that would make the victim whole. In wrongful discharge cases, separate determinations of the conditionality of a reinstatement offer and of the reasonableness of a rejection need not be made. In deciding whether a prevailing plaintiff may recover damages for a period following the rejection of an offer of reinstatement, the trier of fact need only determine whether the plaintiff failed to mitigate damages, as is required in other wrongful discharge cases in Michigan and in the federal system where the alleged failure to mitigate concerns the plaintiff’s rejection of an offer of employment by the original employer that differs from the original job or when the plaintiff reasonably refuses to accept an offer of employment from another company. The issue of the conditionality of a reinstatement offer does not become a matter of law to be decided by the court simply because the employer has offered to reinstate the discharged employee. Assuming that whether an offer of reinstatement was conditional and whether the plaintiff acted reasonably in rejecting such an offer are proper are separate inquiries, each inquiry presents a question of fact for the trier of fact, and neither may be resolved by the court as a matter of law unless reasonable minds could not draw different conclusions concerning conditionality or reasonableness. MCL 37.2803; MSA 3.548(803) provides that the Civil Rights Act is not to be construed to diminish the right of a person to direct or immediate legal or equitable remedies in the courts, simply repeating the language of Const 1963, art 5, § 29, providing for the establishment of a Civil Rights Commission, with powers provided by law to carry out its purposes, and proscribing any construction that would diminish the right of any party to direct and immediate legal or equitable remedies in the courts. Section 803 says nothing at all about what those legal or equitable remedies might be. Section 801 does not provide that the courts of this state may provide an equitable remedy such as injunctive relief or a damage remedy, as the court thinks best in the exercise of its discretion. Rather, it provides that a person alleging a violation of the Civil Rights Act may bring a civil action for appropriate injunctive relief, or damages, or both. The discretion whether to seek an equitable remedy, such as injunctive relief as well as damages, is confided by the constitution and the Legislature, consistent with art 5, § 29, to the person alleging a violation of the Civil Rights Act. The majority has an extravagant view of judicial power in concluding that it may arrogate to the trial courts of this state the power — so clearly confided by the constitution and the Legislature to the victim of a civil rights violation — whether to seek an equitable remedy as an alternative to a legal remedy. While a fair degree of discretion on the part of the trial court might be necessary to make whole a victim of discrimination who seeks an equitable (injunctive) remedy, that does not mean that, where the victim seeks a legal (damage) remedy in the exercise of the choice confided to the victim by the constitution and the Civil Rights Act, the Supreme Court is empowered to confide to the courts of this state a degree of discretion, in the name of making the victim of discrimination whole, to deny the victim of the choice of a legal (damage) remedy. United States Courts of Appeals, construing the federal statute, have not found it necessary to create a bifurcated or trifurcated procedure. The majority simply prefers to confide to trial courts, and to remove from jury consideration, questions that it is more comfortable having a judge decide. This is judicial legislation, an arrogation of power to the courts in an area in which the majority does not trust the jury. There is ample power under the traditional approach that permits a trial court to remove from jury consideration any issue of fact that, in the judgment of the trial court, all reasonable persons must reach but one result. 196 Mich App 196; 493 NW2d 104 (1992) reversed. Durant & Durant, P.C. (by Richard Durant), for the plaintiff. Dickinson, Wright, Moon, Van Dusen & Freeman (by John Corbett O’Meara, Robert W. Powell, Noel D. Massie, and Eric J. Pelton) for the defendants. Amicus Curiae: Clark, Klein & Beaumont (by Dwight H. Vincent and J. Walker Henry) for Michigan Manufacturers Association. Riley, J. Today the Court is called upon to consider a host of issues surrounding a claim for discriminatory termination of employment brought under the Michigan Civil Rights Act. Resolution of these issues requires us to explore the legal and procedural parameters of a discriminatory termination claim involving subsequent offers of reinstatement as they relate to the theory of damage mitigation. We conclude that because the trial court made its decision regarding the appropriate remedy before all factual issues were decided, we remand for resolution of the reasonableness of rejection issue and a reassessment of the appropriate remedy. We also find that because defendants waived the statute of limitations defense, it is unnecessary to deal with plaintiff’s continuing violations claim. Finally, we affirm the trial court’s denial of defendants’ motion for a directed verdict on the intentional discrimination claim. I Plaintiff began his employment with Chrysler in 1967 at the Huber facility in Detroit. In 1978, plaintiff converted to the Muslim faith. Three years later, plaintiff was transferred to Chrysler’s Trenton engine plant where, according to plaintiff, he was subjected to religious and racial harassment from the first day when guards at the plant allegedly attempted to stop him from taking an Islamic newspaper into the facility because it was "subversive,” being called "Ayatollah Cockamania” by his supervisor and alleged major antagonist James Senart, the purposeful placing of pork near his work station during the holy month of Ramadan, numerous remarks about how Muslims should stay in Detroit, attempts to incite anti-Muslim sentiments from the other employees, refusal to replace plaintiff’s broken tools while other employees got new tools, several suspensions with racial and religious overtones, and for other similar acts. Plaintiff reported these incidents to union officials and Chrysler managerial employees on numerous occasions. Although the record contains evidence of several meetings between Chrysler management and plaintiff or his union representatives regarding these alleged occurrences, no legal action was taken by plaintiff before his termination. According to plaintiff, the anti-Muslim atmosphere culminated on July 12, 1984, in a setup orchestrated by Senart and intended to get plaintiff fired from his employment. Senart was allegedly baiting plaintiff, and other employees were improperly removing a storage bin, called a head divider, from plaintiff’s work area. When plaintiff retrieved the head divider, Senart allegedly rebuked him for taking it away from another work station. According to defendants, plaintiff kicked the head divider and threw two engine heads onto the ground with such damaging force that they could not be repaired. Senart wrote up a report on the incident, alleging that plaintiff purposefully destroyed company property, which is a ground for immediate discharge. Shortly thereafter, plaintiff was escorted out of the plant by security guards and placed on disciplinary leave. Charles Fern, the labor relations manager at the Trenton plant, reviewed Senart’s report and attempted to interview plaintiff’s co-workers. Fern inspected the two engine heads that were indeed damaged, and he looked at two grooves in the floor of plaintiff’s work area that were allegedly caused by plaintiff’s act of hurling the engine heads to the ground. Fern also spoke to union representatives and other supervisors. As a result of his investigation, Fern concluded that plaintiff had destroyed company property, and the disciplinary leave was upgraded to termination of employment. Plaintiff filed the instant action in Wayne Circuit Court against Chrysler and Senart for wrongful discharge based on racial and religious discrimination, for intentional infliction of emotional distress, and for fraud or misrepresentation on the part of Senart. Before trial, the court ruled that any damages awarded to plaintiff would be limited to the thirteen-month period of his unemployment preceding his rejection of Chrysler’s reinstatement offer. At trial, the court granted defendants’ motion for a directed verdict on all but the religious discrimination claim. The jury returned a verdict in favor of plaintiff on the religious discrimination claim and awarded him $51,300 for lost wages and $10,000 for embarrassment or humiliation. In a subsequent hearing conducted without a jury, the court exercised its equitable powers to order Chrysler to reinstate plaintiff as newly hired, with no seniority, within sixty days of the decision. Defendants appealed the court’s decision not to grant the motion for a directed verdict on the religious discrimination claim, as well as the order requiring plaintiff’s reinstatement as a newly hired employee. Plaintiff cross appealed the court’s refusal to permit recovery for acts occurring before the three-year period of limitation running from the date of termination and for the decision not to reinstate plaintiff with full seniority rights and backpay. A majority of the Court of Appeals upheld the trial court’s decision not to grant defendants’ motion regarding the religious discrimination claim, and it upheld the trial court’s "equitable power” to fashion the remedy of reinstatement, albeit without any seniority rights. 196 Mich App 196, 200; 493 NW2d 104 (1992). The majority also upheld the ruling of the limitation of backpay to the thirteen-month period before plaintiff’s refusal to accept Chrysler’s reinstatement offer. Finally, the majority concluded that plaintiff failed to establish all of the elements necessary to invoke the "continuing violation” theory, which would have permitted plaintiff to recover for alleged acts that occurred more than three years before the filing of the complaint. The dissenting judge, relying heavily on federal precedent, would have reversed the trial court’s decision to reinstate plaintiff for what he considered to be an unreasonable refusal to accept Chrysler’s "unconditional” offer of reinstatement. Id. at 210. This Court granted both parties’ application for leave to appeal. II A One year and three months after his termination, Chrysler offered to reinstate plaintiff to his former position with full seniority, but without backpay. The offer provided in its entirety: In full settlement of this case, M. Rasheed will be offered reinstatement in accordance with his seniority provided he can meet normal requirements. Upon his return to work his discharge shall be reduced to a disciplinary layoff without back pay for the period during which he was away from the plant. This action of the Appeal Board shall form no basis or precedent for a decision or settlement in any other case. On the basis of this offer, defendants moved for partial summary disposition to prevent plaintiff from recovering continued backpay for a failure to accept what they asserted was an "unconditional” offer, as well as to prevent plaintiff’s reinstatement. Plaintiff asserted that the offer was conditional because it did not include backpay and because it offered to convert the termination into a disciplinary layoff rather than remove the blemish from his employment record. At the hearing on the motion itself, the trial court concluded as follows: It is hereby ordered, adjudged and decreed that Defendant’s Motion is granted as it concerns limiting backpay that Plaintiff can seek, to that period covering July 19, 1984, up to and including August 26, 1985. It is further ordered, adjudged and decreed that Defendant’s Motion as it concerns the preclusion of reinstatement for Plaintiff is denied, and Plaintiff will be allowed to present proofs concerning the equitable issue of reinstatement to the trier of fact. It is further ordered, adjudged and decreed that notwithstanding any ruling on reinstatement of the submission of proofs, Plaintiff’s backpay is limited to the aforementioned July 19, 1984 to August 26, 1985 period. It is unclear from this ruling what was the basis for the trial court’s conclusion that plaintiff rejected an unconditional offer so that he was not entitled to continued backpay, but that the issue of reinstatement was a question to be decided by the finder of fact. In addressing this issue, we turn first to a discussion of the relevant case law. B The law concerning backpay and other remedies in the employment discrimination context has its roots in provisions of the federal Civil Rights Act of 1964, which amended the Civil Rights Act of 1957. The avowed purpose of the new provisions was to "provide the spur or catalyst which causes employers ... to self-examine and to self-evaluate their employment practices and to endeavor to eliminate, so far as possible, the last vestiges of an unfortunate and ignominious page in this country’s history.” United States v N L Industries, Inc, 479 F2d 354, 379 (CA 8, 1973), quoted in Albemarle Paper Co v Moody, 422 US 405, 417-418; 95 S Ct 2362; 45 L Ed 2d 280 (1975). Modeled after a provision in the National Labor Relations Act, the backpay provision was intended to "make whole” anyone suffering from the effects of employment discrimination. Albemarle, supra at 418-419. Almost a decade later, however, the United States Supreme Court recognized a corollary to the backpay provision on the basis of interim earnings language found in 42 USC 2000e-5(g). In the landmark decision Ford Motor Co v EEOC, 458 US 219; 102 S Ct 3057; 73 L Ed 2d 721 (1982), the Supreme Court specifically imposed on a discharged employee the duty to mitigate damages under title VII of the federal Civil Rights Act of 1964 by accepting unconditional offers of reinstatement even when the offers do not include backpay. The majority held: An unemployed or underemployed claimant, like all other Title VII claimants, is subject to the statutory duty to minimize damages set out in § 706(g). This duty, rooted in an ancient principle of law, requires the claimant to use reasonable diligence in finding other suitable employment. Although the unemployed or underemployed claimant need not go into another line of work, accept a demotion, or take a demeaning position, he forfeits his right to backpay if he refuses a job substantially equivalent to the one he was denied. Consequently, an employer charged with unlawful discrimination often can toll the accrual of back-pay liabil