Breach of Contract Cases

Patricia A. Weber vs. Community Teamwork, Inc., & others. Middlesex. April 5, 2001. August 13, 2001. Present: Marshall, C.J., Greaney, Spina, Sosman, & Cordy, JJ. Anti-Discrimination Law, Termination of employment, Prima facie case, Burden of proof. Employment, Discrimination, Termination, Retaliation. Contract, Employment. Unlawful Interference. Malice. In an action by the plaintiff alleging unlawful discrimination in her employer’s failure to promote her, the judge correctly concluded that the plaintiff had established a prima facie case of discrimination, but had not met her burden of proving unlawful discrimination because there was evidence to support some of her employer’s “legitimate, nondiscriminatory” reasons for choosing a male applicant over the plaintiff. [766-769] In an action by the plaintiff alleging unlawful discrimination in her employer’s termination of her employment, the judge correctly concluded that the plaintiff had established a prima facie case of discrimination; however, the record did not support the judge’s conclusions that the defendants’ proffered reasons for terminating the plaintiff were “wholly lacking” in evidentiary support and in credibility; moreover, while the judge made the requisite findings that the plaintiff was a member of a protected class and was harmed by the termination, she did not determine whether the defendants harbored any discriminatory animus and, if so, whether that animus was the determinative cause in bringing about the plaintiff’s termination, and consequently, this court remanded the case so that the judge could make findings and reach conclusions on those two essential elements. [769-778] In an action by the plaintiff alleging breach of contract in her employer’s termination of her employment, the judge erred in concluding that a progressive discipline policy, implemented during the tenure of the plaintiff’s predecessor, constituted an implied employment contract between the plaintiff and her employer that the employer breached, where the policy was not binding on the employer because it was not submitted to or approved by its board; where, by its own terms, the policy did not apply to disciplinary action taken by the employer’s executive director against a department head such as the plaintiff; and where the plaintiff failed to establish that she relied on the terms of the policy as a condition of her continuing employment. [778-781] This court vacated a ruling by a Superior Court judge that a nonprofit corporation’s executive director had unlawfully interfered with the plaintiff employee’s advantageous relations with her employer, and the plaintiff’s claim was remanded for further findings with regard to the requirement that the plaintiff show, as to “improper motive or means,” that the “controlling factor” in the alleged interference was “actual” malice. [781-783] In an action arising out of the plaintiff’s termination from her employment, the judge erred in allowing the plaintiff to amend her complaint to state a claim for retaliatory discrimination under G. L. c. 151B, § 4 (4), raised for the first time after the close of the evidence, where, since the plaintiff asserted her claim for retaliatory discrimination nearly four years after the last allegedly retaliatory act was committed, the retaliation claim was barred by the three-year statute of limitations provided by G. L. c. 151B, § 9, and where, since her claim did not “arise out of the conduct, transaction, or occurrence” she alleged in her earlier pleadings, Mass. R. Civ. R 15 (c), it did not relate back to her earlier pleadings. [783-786] Civil action commenced in the Superior Court Department on December 10, 1993. The case was heard by Sandra L. Hamlin, J. The Supreme Judicial Court on its own initiative transferred the case from the Appeals Court. Cheryl M. Cronin (Douglas Phillips with her) for the defendants. Frederick T. Golder (Elisabeth M. LeBrun & Jeffrey R. Mazer with him) for the plaintiff. The following submitted briefs for amici curiae: Sally L. Adams, Daryl J. Lapp, & Steven L. Schreckinger for Association of Independent Colleges and Universities in Massachusetts. Robert S. Mantell, Jonathan J. Margolis, & James E. Fitzgerald for Massachusetts Employment Lawyers Association. Thomas H. Conway, Jr., and James L. Canavan, Jr. Marshall, C.J. In early 1992, Patricia Weber, a longtime employee of Community Teamwork, Inc. (CTI), applied for, but was not promoted to, the position of CTI’s executive director. Some months later she was terminated by CTI’s new executive director, James L. Canavan, Jr. She brought suit against CTI, Canavan, and Thomas H. Conway, Jr., a member of CTI’s board of directors, alleging discrimination on the basis of sex and sexual orientation, breach of contract, unlawful interference with contractual relations, retaliatory discrimination, wrongful termination in violation of public policy, and a violation of the Massachusetts equal rights statute, G. L. c. 93, § 102. After a jury-waived trial, a judge in the Superior Court rejected Weber’s claims that CTI’s failure to promote her was discriminatory or that her termination from CTI was a violation of any public policy. The judge ruled, however, that Weber’s termination constituted discrimination, breach of contract, unlawful interference with contractual relations, and retaliatory discrimination. She awarded Weber back pay damages and benefits in the amount of $133,704, fifteen years of front pay damages in the amount of $546,480, and emotional distress damages of $100,000. The judge also awarded Weber her attorney’s fees in an unspecified amount. The parties filed cross appeals, and we transferred the case to this court on our own motion. We affirm the judge’s rulings that CTI’s failure to promote Weber was lawful. We vacate the remaining aspects of the judgment challenged by the defendants, and remand the case to the Superior Court for additional findings and conclusions by the judge on Weber’s claims of discrimination and unlawful interference with contractual relations. I We summarize the procedural history because it is relevant to some of the issues on appeal. Weber first filed her charges with the Massachusetts Commission Against Discrimination (MCAD), alleging that all three defendants had discriminated against her on the basis of her sex by failing to promote her to the position of executive director of CTI in October, 1992, and by terminating her without warning in March, 1993. See G. L. c. 151B, § 5. Weber, who is a lesbian, subsequently amended her charges to include claims of discrimination on the basis of sexual orientation. Before the MCAD acted on her charges, she brought suit in Superior Court pursuant to G. L. c. 151B, §§ 4, 9, adding claims for breach of contract, intentional interference with contractual relations, and a violation of the Massachusetts equal rights statute, G. L. c. 93, § 102. The trial commenced in February, 1997. At the close of Weber’s evidence the judge allowed the defendants’ motion to dismiss Weber’s equal rights claim, G. L. c. 93, § 102, but denied their motion in all other respects. She later denied their motion for a directed verdict. On the final day of trial, and immediately prior to closing arguments, Weber moved to amend her complaint to add claims that her termination violated public policy and constituted retaliatory discrimination in violation of G. L. c. 151B, § 4 (4). Over the defendants’ objection, the judge allowed her motion. The judge subsequently entered findings of fact and conclusions of law, which we shall summarize in greater detail below. On appeal Weber claims that it was error for the judge to conclude that CTI’s failure to promote her to the position of CTI’s executive director did not constitute unlawful discrimination in violation of G. L. c. 151B, and to deny her punitive damages on her retaliation claim. The defendants challenge the judge’s rulings that (1) Weber’s termination from CTI constituted unlawful employment discrimination; (2) they breached Weber’s employment contract with CTI; and (3) Canavan had unlawfully interfered with Weber’s advantageous relationship with CTI. See note 4, supra. They also challenge the judge’s ruling permitting Weber to amend her complaint to add a claim for retaliatory discrimination, and her subsequent ruling that the defendants had in fact engaged in retaliatory discrimination. As to damages, the defendants challenge the award to Weber of fifteen years of front pay under G. L. c. 151B, and argue that any damages awarded for violations of that statute by the defendants should, in any event, be capped at $20,000 pursuant to G. L. c. 231, § 85K. Finally, they challenge the award to Weber of attorney’s fees for so much of her G. L. c. 151B claim on which she did not prevail. n Before turning to consider the respective arguments, we summarize the chronology of Weber’s career at CTI because it provides helpful context to her claims. Weber was hired by CTI in 1975 as an assistant director of family day care. In the succeeding twelve years, Weber assumed steadily increasing program development and supervisory responsibilities, serving from 1976 to 1978 as an assistant director of the family life services department, and from 1978 to 1987 as that department’s director. In 1987, she was named associate director of programs, in which capacity she reported directly to CTI’s longtime executive director, Leo Desjarlais, and became the direct supervisor of CTI’s eight department directors, including the director of its housing and community development department. Sometime thereafter, Weber discovered that Desjarlais was mishandling CTI’s funds. She triggered an investigation by the office of the Auditor of the Commonwealth, which ultimately led to Desjarlais’s discharge from CTI in 1991. In late 1991, following Desjarlais’s discharge, the board appointed the defendant Conway, then the president of CTI’s board of directors, as CTI’s acting executive director. Fearing that her position as associate director of programs was in jeopardy with the impending appointment of a new executive director, and although she herself became a candidate for that position, Weber asked Conway to appoint her as the director of CTI’s housing and community development department. Weber had not previously worked in the housing department, but Conway agreed, and in February, 1992, Weber assumed that position. Shortly thereafter, she applied for the position of executive director, but an outside candidate, Canavan, was the successful applicant. Ill We first address Weber’s argument that the judge erred by ruling that CTI’s failure to promote her to the position of executive director did not constitute unlawful discrimination. We recount the judge’s findings relevant to this claim. From 1987 to 1992, in her tenure as associate director of CTI, Weber served “in all but title” as CTI’s executive director. The judge found that Weber was a “hardworking, responsible, talented, caring and dedicated employee with excellent administrative ability,” who consistently received “excellent” performance reviews. When it became necessary to replace Desjarlais, the board advertised the position and ultimately hired Canavan, who served at the time as the director of development and planning at an agency similar to CTI. Canavan previously had worked from 1987 to 1990 as an assistant energy planner, an assistant director of the housing services program, and finally as the acting director of the office of community and economic development within the Executive Office of Communities and Development (EOCD). EOCD provides housing subsidies to low-income persons and ensures that subsidized housing units comply with Federal and State regulations. It had contracted with CTI’s department of housing and community development to run various low-income housing programs. EOCD was in fact one of CTI’s primary sources of funding. There was extensive testimony that, in the wake of Desjarlais’s mismanagement, CTI was in a financial crisis, its staff lacked morale and strong leadership, and it had lost credibility with EOCD. There was unrebutted testimony that CTI’s board believed that new leadership by an outsider, but one who “had the experience and the knowledge of . . . what [CTI’s] kind of agency was about,” was essential to meeting CTI’s goals of improving its fractured relationship with EOCD and remedying its fiscal crisis. CTI explained at trial that these were the reasons it appointed Canavan as CTI’s new executive director. The judge found that, based on her resume, background, and work experience, Weber was “eminently more qualified” than Canavan to assume the position of CTI’s executive director. She also found that, before Canavan was hired, a “sexist attitude prevailed at CTI” and that it was “common knowledge” throughout the organization that Weber is a lesbian. The judge then applied the analytical framework of Blare v. Husky Injection Molding Sys. Boston, Inc., 419 Mass. 437, 440-446 (1995). She concluded that Weber had established a prima facie case of discrimination, but had not met her burden of proving unlawful discrimination because there was evidence to support some of CTI’s “legitimate, nondiscriminatory” reasons for choosing Canavan over Weber. Weber now argues that, because the judge found that she was “eminently more qualified” than Canavan and that a “sexist attitude prevailed” at CTI, the judge should have concluded that the defendants’ asserted reason for hiring Canavan was a pretext. See id. at 444-446. The judge’s ruling was correct. Weber’s contention rests on the flawed supposition that the findings on which she relies precluded a finding that CTI’s asserted reasons for hiring Canavan were in fact its reasons for hiring him. There was sufficient evidence that Canavan’s “outsider” status and his prior work experience and previous dealings with EOCD were sound reasons for CTI to prefer him over a well qualified internal candidate, even one “eminently more qualified.” While it would have been preferable for the judge to make explicit what is implied by her findings, namely, that Weber and Canavan were both qualified for the position of executive director but were qualified in different ways, she did not err in concluding that Weber did not meet her burden of proving that the defendants’ failure to promote her constituted unlawful discrimination. Even if Weber had succeeded in persuading the judge that CTI’s asserted explanation for hiring Canavan was not the reason it actually hired him, a point not argued by the defendants, the judge would have been permitted to conclude that the failure to promote Weber did not amount to unlawful discrimination. See Abramian v. President & Fellows of Harvard College, 432 Mass. 107, 118 (2000) (fact that employer’s asserted reason is pretext permits, but does not require, an inference that there was unlawful discrimination). The judge would have been entitled to weigh evidence indicating that the defendants had no discriminatory motive in hiring Canavan, or that they had some other lawful explanation for choosing Canavan over Weber that had been advanced and was supported by the evidence. See id. IV We turn next to the question of the judge’s ruling that Weber’s termination from CTI, in contrast to CTI’s failure to promote her to the position of executive director, did constitute unlawful employment discrimination. We summarize the judge’s findings on this aspect of the case, supplementing them where appropriate with uncontested facts in evidence. By early 1992, when Weber was appointed the director of CTI’s housing department, that department faced pervasive problems. For many years previously, Desjarlais had diverted funds from the department. There was also a perception that Desjarlais had hired individuals in that department based on favoritism rather than competence. By the time Desjarlais’s employment was terminated, the department had an operating deficit of approximately $150,000, and the housing staff were beset by poor morale. In short, the department was in crisis. Because subsidies provided by CTI to low-income tenants were funded by EOCD, CTI was subject to EOCD’s regulatory oversight, and there was evidence that EOCD had serious concerns about the management of CTI’s housing programs. CTI’s housing department suffered from a poor “lease-up rate.” Worse, CTI was subsidizing many housing units of marginal quality, and its “maintenance failure” rate was high. CTI’s own inspections confirmed the department’s poor record. The judge found that, in her first year as director, Weber’s “hard work” and “good management” made a difference. But see note 15, supra. Within eleven months, the department’s operating deficit decreased from $150,500 to $115,534; within three months, the “lease-up” rate of low-income housing units subsidized by CTI rose to 99%. The “staff failure” rate was also reduced under Weber’s “hands-on management” and her improvements in the housing inspection process. Despite these improvements, it was undisputed that EOCD remained deeply concerned about CTI’s housing program. According to Canavan, CTI’s new executive director, in early January, 1993, EOCD officials “were breathing down our necks” to take swift action to improve the inspections of, and conditions in, certain low-income housing developments subsidized by CU. On February 2, 1993, Weber, Canavan, and a third CTI employee met with three senior officials at EOCD. The EOCD officials expressed their serious concerns about the continuing inadequacy of CTI’s housing inspections, the poor maintenance of housing units subsidized by CTI, and the “overall history of mismanagement.” There was uncontroverted evidence that at this meeting the deputy secretary of EOCD threatened to terminate all of CTI’s substantial housing funding if it did not take aggressive steps by June, 1993, to correct the problems in the housing department. There was also unrebutted testimony that, during the February, 1993, meeting, a senior EOCD official instructed CTI to “fire” Darryl Courtnay, Weber’s deputy in the housing department. A senior EOCD official had also told Weber that she was “upset" with her. The threatened loss of EOCD’s housing subsidies was serious; the EOCD subsidies comprised one-third of CTI’s budget. There was uncontradicted evidence that CTI’s housing department depended entirely on EOCD for its funding. The loss of such significant funds would also have necessitated a number of lay-offs of CTI employees. While Weber had made improvements in the department, Canavan was left with the impression from that critical meeting that, to “save” the housing program, Darryl Courtnay and Weber “had to go.” On March 16, 1993, one week after Weber and Canavan last met to discuss progress in CTI’s housing department, Canavan called Weber to his office, and in the presence of several CTI board members, offered her the option of resigning or being terminated. Weber was given no explanation for this action. Weber chose to be terminated. That same day Canavan offered the same choice to Darryl Courtnay. Courtnay resigned. Several weeks later Canavan appointed another woman to fill the position vacated by Weber. Explaining her decision that Weber’s termination constituted unlawful discrimination, the judge pointed to the fact that, in the wake of the critical EOCD meeting in February, 1993, Canavan did not give Weber any “specific directions” about steps she should take to remedy the problems cited by EOCD. The judge also found that, in spite of Weber’s persistent efforts to hire more inspectors, Canavan “refused to move” on improving the staff failure rate, “consistently stalled on responding to her recommendations,” and “stymied her efforts to rectify the situation.” The judge found that Canavan had not told Weber that he was dissatisfied with her performance, nor ha