Kachmar v. SunGard Data Sys Inc

• Court: Court of Appeals for the Third Circuit
• Decided: March 26, 1997
• Docket: 96-1119
• Status: Unknown

Opinion

Opinions of the United 1997 Decisions States Court of Appeals for the Third Circuit

3-26-1997

Kachmar v. SunGard Data Sys Inc Precedential or Non-Precedential:

Docket 96-1119

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This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova University School of Law Digital Repository. It has been accepted for inclusion in 1997 Decisions by an authorized administrator of Villanova University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu. UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

No. 96-1119

LILLIAN KACHMAR, Appellant v.

SUNGARD DATA SYSTEMS, INC.; LAWRENCE A. GROSS; DONNA J. PEDRICK

On Appeal from the United States District Court for the Eastern District of Pennsylvania (D.C. No. 95-cv-01282)

Argued September 10, 1996

Before: SLOVITER, Chief Judge, COWEN and LEWIS, Circuit Judges

(Filed March 26, 1997)

Lek Domni (Argued) Philadelphia, PA l9l02

Attorney for Appellant

Jami Wintz McKeon (Argued) Julie A. Uebler Of Counsel: Morgan, Lewis & Bockius LLP Philadelphia, PA 19103

Attorneys for Appellees

OPINION OF THE COURT SLOVITER, Chief Judge.

Lillian Kachmar, who held the position of senior in-

house counsel for defendant SunGard Data Systems, Inc. before her

employment was terminated, filed this action arising out of that

termination. She raised a claim of retaliatory discharge in

violation of Title VII of the Civil Rights Act of 1991, 42 U.S.C.

§ 2000(e), et seq., as well as a claim of sex discrimination

under that statute, and included a pendent state law claim of

tortious interference with prospective contractual relations. We

address for the first time the application of Title VII to a

plaintiff who formerly occupied an in-house counsel position. I.

FACTUAL AND PROCEDURAL BACKGROUND

To the extent that this appeal comes to us after the

district court granted defendants' motion to dismiss the Title

VII retaliation claim and the state law claim, the factual record is necessarily limited and we must decide the appeal primarily on

the basis of the allegations of the plaintiff's complaint.

Appellee SunGard Data Systems, Inc. is a computer

services company that specializes in proprietary investment

support systems and computer disaster recovery. On April 2,

1991, Kachmar, a 1978 Villanova Law School graduate, was hired to

provide legal services for the parent company and its five

subsidiaries. Her immediate supervisor was defendant Lawrence

Gross, SunGard's General Counsel. Defendant Donna Pedrick was corporate Vice President of Human Resources. On December 31,

1991, after nine months with the company, Kachmar received her

first and only written performance appraisal from Gross. In that

review, Gross gave her a favorable overall rating and stated that

she was a valuable addition to the legal department. In fact,

Kachmar exceeded her set goals for billable hours each year she

was employed by SunGard, which entitled her to receive incentive

bonuses. She was also given annual merit increases to her base

salary every year she was employed.

Kachmar's employment with SunGard was uneventful until

the Fall of 1992, when a series of events took place that brought

her into conflict with SunGard senior management and with Gross

in particular. The first incident concerned a disagreement over

the salary level of a new attorney at SunGard, Sarah Armstrong,

whom Kachmar had helped recruit as the third lawyer in the in-

house counsel's office. Kachmar alleges that she was misled by

Gross concerning the available salary for Armstrong and that she

discussed with Pedrick raising Armstrong's salary to a level

commensurate with Armstrong's qualifications. At that time,

Kachmar further complained to Pedrick that she herself was being

under-compensated according to SunGard's internal practices and

procedures.

The second incident arose when Kachmar, who was asked

for her opinion, advised SunGard to give a bonus to one of the

female sales representatives of SunGard Recovery, one of the subsidiaries, over the opposition of the employee's male

managers. She alleges that because of her advice she was labeled

a "feminist" and a "campaigner for women's rights," terms meant

to be derogatory. App. at 15.

In the course of her work, Kachmar observed that

SunGard Recovery had "no real representation of females in upper

management," App. at 15, and she advised Pedrick and Gross that

this situation could render the company ineligible for certain

federal contracts. Both declined to talk to the president of the

subsidiary, Ken Adams, but suggested Kachmar could do so.

Kachmar did, and alleges that Adams then had a "stormy

interchange with Pedrick and Gross demanding to know why he had

not received EEO advice from them earlier." Id. SunGard

Recovery subsequently added women to its upper management.

The final incident occurred when SunGard Recovery

sought to fire an African-American Senior Vice President, and

Kachmar tried to advise the new president of SunGard Recovery,

Michael Mulholland, regarding the EEO implications of the firing.

She alleges she was told that the company "should just pay [the

individual] off." Id. at 16. On January 15, 1993, Kachmar met with Gross to receive

her annual review. He told her that she was not on "the

management track" because of her "conduct." Id. at 17. Gross

did not criticize her competence as Senior Counsel, but instead

engaged in a diatribe against her for "campaigning on women's issues," referring to her complaints about her own and

Armstrong's levels of compensation, and for "feminist

campaigning" in her handling of the matter of the female employee

of SunGard Recovery. Id. at 17-18. Following this meeting,

Gross began to ignore Kachmar and interacted with her as little

as possible except in formal settings, despite Kachmar's attempts

to "clear the air." Id. at 18.

Kachmar continued in her position as Senior Counsel

after her meeting with Gross, though their relationship was

strained. In mid-1993, Kachmar further advised the president of

the Recovery Group that the Vice President, William Baumont,

should be counseled regarding his treatment of women because

there had been complaints about his conduct, but her advice was

received with hostility.

In October, 1993, Kachmar sought advice from Pedrick

concerning her relationship with Gross, and Pedrick advised

Kachmar to begin looking for a job elsewhere. Kachmar alleges

that although she was still employed, Gross offered her job to a

male attorney in November, 1993, who declined the offer. About

two months later, on January 5, 1994, Kachmar was notified of her

termination for alleged performance problems. She contends that

the manner of her dismissal contravened company policy and

procedure, which required written notice and an opportunity to

cure the alleged deficiencies. Although Sarah Armstrong was promoted to the position of Senior Counsel, Kachmar contends that

in fact she was replaced by a male attorney, Michael Zuckerman.

Following her termination, Kachmar sought employment

with a Philadelphia law firm. Kachmar asserts that Armstrong

intentionally sabotaged Kachmar's efforts to obtain employment by

telling a member of the firm that Kachmar was planning to sue

SunGard.

After exhausting her administrative remedies, Kachmar

filed a complaint alleging that SunGard, Gross, and Pedrick

(hereafter collectively referred to as SunGard) illegally

terminated her in retaliation for her exercise of protected

rights under Title VII, and that SunGard engaged in a pattern and

practice of sex discrimination. She also included a Pennsylvania

common law claim for tortious interference with prospective

contractual relations. Defendants filed a motion to dismiss

and/or for partial summary judgment. The district court granted

the motion to dismiss the Title VII retaliation and state law

tort counts and granted summary judgment to defendants on the

remaining Title VII claim of sex discrimination. Our review is

plenary. II.

DISCUSSION

A. Retaliatory Discharge 1. Causal Link

The pertinent provision of Title VII states that: "[i]t

shall be an unlawful employment practice for an employer to

discriminate against any of his employees . . . because [the

employee] has opposed any practice made an unlawful employment

practice by this subchapter." 42 U.S.C. § 2000e-3(a) (1993). In

her retaliation claim, Kachmar contends that she was discharged

because she voiced her opposition to SunGard's unlawful

employment practices regarding both herself and others.

In order to establish a prima facie case of

discriminatory retaliation under Title VII, Kachmar must show 1)

that she engaged in protected activity, 2) that the employer took

adverse action against her, and 3) that a causal link exists

between the protected activity and the employer's adverse action.

Charlton v. Paramus Bd. of Educ., 25 F.3d 194, 201 (3d Cir.),

cert. denied, 115 S.Ct. 590 (1994); Jalil v. Avdel Corp., 873 F.2d. 701, 708 (3d Cir. 1989), cert. denied, 493 U.S. 1023, 110

S.Ct. 725 (1990).

The district court held that Kachmar's complaint

adequately pled the first two elements of such a claim but that

her complaint did not satisfy the third. The court held that, as

a matter of law, Kachmar could not prove the requisite causation, noting that the termination of her employment occurred almost a

year after the alleged protected activity took place.

Cases in which the required causal link has been at

issue have often focused on the temporal proximity between the

employee's protected activity and the adverse employment action,

because this is an obvious method by which a plaintiff can

proffer circumstantial evidence "sufficient to raise the

inference that her protected activity was the likely reason for

the adverse action." Zanders v. National R.R. Passenger Corp.,

898 F.2d 1127, 1135 (6th Cir. 1990); see Jalil, 873 F.2d at 708.

We have stated, however, that where there is a lack of temporal

proximity, circumstantial evidence of a "pattern of antagonism"

following the protected conduct can also give rise to the

inference. Robinson v. Southeastern Pa. Transp. Auth., 982 F.2d

892, 895 (3d Cir. 1993). These are not the exclusive ways to

show causation, as the proffered evidence, looked at as a whole,

may suffice to raise the inference. See, e.g., Waddell v. Small

Tube Products, Inc., 799 F.2d 69, 73 (3d Cir. 1986).

The district court here analyzed the circumstantial

evidence -- the gap in time between Kachmar's protected

activities and her termination -- and determined it lacked the

requisite proximity. It then proceeded to assess whether there

was a pattern of antagonism that could allow a fact-finder to

infer retaliatory animus. It found no such pattern. In dismissing on the ground that the facts pled in

Kachmar's complaint, even if proven, would be insufficient to

show the required causal link, the district court took too narrow

a view of the temporal proximity needed to satisfy the causal

link element at this early stage of the case. It failed to

accept the facts alleged in the complaint as true and construe

those facts in the light most favorable to the plaintiff. See

Markowitz v. Northeast Land Co., 906 F.2d 100, 103 (3d Cir.

1990).

The district court set the date of Kachmar's last

protected activity in the Fall of 1992, when her discussions with

SunGard management concerning the EEO implications of their

personnel policies began. This failed to take into account the

activities that Kachmar alleged occurred in mid-1993, when she

further attempted to counsel SunGard of the EEO implications of

management's treatment of women. If the mid-1993 date for the

protected activity were used, there would be at most a gap of six

months until Kachmar's official termination on January 5, 1994,

rather than the gap of more than a year that the district court

found.

Moreover, Kachmar claims she was advised by Pedrick to

start looking for another job in October, 1993, only several

months after her last protected activity. Her allegation that

she was told her position had been offered to a male in November,

1993, shortly after her meeting with Pedrick, would, if proven, show that Sungard had resolved to discharge her shortly after the

latest activity. Indeed, Gross' statements to Kachmar as early

as January 15, 1993 that she was being taken off the "management

track," which she claims was a reaction to her protected

activity, would further support her claim that it was her

protected activity that placed her in disfavor, ultimately

leading to her termination.

SunGard asserts that even a four month gap would be too

long to allow an inference of causation. Our cases set no

parameters but were decided in the context of the particular

circumstances before us. See, e.g., Robinson, 982 F.2d at 894-95

(expressing doubt that discharge could be causally linked to an

employee's protected activity taken almost two years previously,

absent the intervening pattern of antagonism); Jalil, 873 F.2d at

708 (holding that interval of two days between employee's EEOC

complaint and discharge of plaintiff sufficient to create an

inference of causation).

It is important to emphasize that it is causation, not

temporal proximity itself, that is an element of plaintiff's

prima facie case, and temporal proximity merely provides an

evidentiary basis from which an inference can be drawn. The

element of causation, which necessarily involves an inquiry into

the motives of an employer, is highly context-specific. When

there may be valid reasons why the adverse employment action was not taken immediately, the absence of immediacy between the cause

and effect does not disprove causation.

SunGard may have recognized that termination of Kachmar

immediately after her January 15, 1993 meeting with Gross could

have resulted in disruption of the small, three-attorney in-house

counsel's office. After all, Kachmar was senior in-house

counsel, not one of many interchangeable employees on an assembly

line. We do not know whether she was involved in long-term

negotiations or litigation that could have deterred Sungard from

terminating her immediately.

By summarily concluding that there was too great a gap

between Kachmar's protected acts and her termination, the

district court failed to give Kachmar the opportunity to delve

further into the facts by discovery. SunGard relied on appellate

court cases holding that the time between the protected activity

and the alleged retaliation was insufficient to raise the

inference of causation. These cases arose following a greater

opportunity for factual exploration than Kachmar was given here,

where the court dismissed on the basis of the complaint alone.

See, e.g., Hughes v. Derwinski, 967 F.2d 1168, 1174 (7th Cir.

1992) (granting summary judgment because disciplinary letter

issued four months after discrimination charge filed insufficient

causal link to employer action); Cooper v. City of North

Olmstead, 795 F.2d 1265, 1272 (6th Cir. 1986) (reversing after a

bench trial and holding that discharge four months after filing of discrimination charge not causally linked to adverse

employment action).

We need not consider the district court's secondary

determination that there was no "pattern of antagonism" that

would give rise to an inference of improper motive because

Kachmar alleged enough direct evidence of a retaliatory animus on

the part of Gross independent of her contention that their

relationship became strained after their January 1993 meeting.

Kachmar alleges that at the January 15, 1993 review,

Gross told her that she was not on the management track because

of her complaints concerning her salary, her "campaigning on

women's issues," and her handling of the female employee matter,

which Gross cited as an additional example of feminist

campaigning. These statements, if proven, would present direct

evidence of Gross' retaliatory motives because they would permit

a factfinder to infer that Kachmar was being taken off the

management track because of her opposition to the manner in which

SunGard was treating her and other women in the organization, and

that her final dismissal was just a matter of time. Such

statements could be interpreted to show that Gross placed

"substantial negative reliance on an illegitimate criterion in

reaching [his] decision" that Kachmar had little future with

SunGard. Starceski v. Westinghouse Electric Corp., 54 F.3d 1089,

1096 (3d Cir. 1995). In concentrating exclusively on the gap

between Kachmar's protected activity and her firing, and the sufficiency of Kachmar's allegations of a pattern of antagonism,

the district court failed to make the more generalized inquiry

into whether Kachmar's protected activity was the likely reason

for her termination. See Waddell, 799 F.2d at 73; cf. Andrews v.

City of Philadelphia, 895 F.2d 1469, 1484 (3d Cir. 1990) ("A play

cannot be understood on the basis of some of its scenes but only

on its entire performance, and similarly, a discrimination

analysis must concentrate not on individual incidents, but on the

overall scenario."). Whether Kachmar's protests regarding what

she believed was the company's Title VII vulnerability were the

likely cause of her termination is a difficult factual question.

Because the facts viewed in the light most favorable to Kachmar

would support an inference of retaliation, her complaint states a

colorable claim as to which she is entitled to further factual

development. 2. Claim by In-house Counsel

SunGard argues that we should affirm the dismissal on

the alternative basis that maintenance of Kachmar's retaliatory

discharge action would improperly implicate communications

subject to the attorney-client privilege and/or information

relating to Kachmar's representation of Sungard. This court has

not yet addressed the question of the viability of claims by in-

house counsel under Title VII. The district court alluded to the

issue but did not dismiss on that ground. Those few federal courts that have been presented with

discrimination actions brought by in-house counsel have generally

held that once an attorney's employment has terminated, s/he is

not barred from bringing suit against the former employer for

retaliatory discharge under Title VII. See, e.g., Jones v.

Flagship Int'l., 793 F.2d 714, 726 (5th Cir. 1986), cert. denied,

479 U.S. 1065, 107 S.Ct. 952 (1987); Verney v. Pennsylvania

Turnpike Comm'n, 903 F.Supp. 826, 832 (M.D. Pa. 1995); Hoskins v.

Droke, No. 94-C-5004, 1995 WL 318817, at *2 (N.D.Ill. 1995);

Kocher v. Acer, No. C-93-20132RMW, 1993 WL 149077 at *3 - *4

(N.D. Cal. 1993); Golightly-Howell v. Oil, Chemical & Atomic

Workers Int'l Union, 806 F.Supp. 921, 925 (D. Colo. 1992); see

also Breckinridge v. Bristol-Myers Co., 624 F.Supp. 79, 83 (S.D.

Ind. 1985) (charging discrimination under the ADEA). In the only

federal appeals court case brought to our attention, the court

stated, "In assuming her position as [in-house attorney,

plaintiff] neither abandoned her right to be free from

discriminatory practices nor excluded herself from the

protections of [Title VII]." Jones, 793 F.2d at 726. Title VII defines the "employee" who can bring suit in

broad terms. See 42 U.S.C. § 2000e(f) (1994). Although that

same section contains discrete exclusions, such as exempting

persons elected to public office, their personal staff, and

policy-making appointees, Congress did not exclude in-house

attorneys. SunGard concedes that in-house counsel are not per se

precluded from bringing a retaliatory discharge claim but argues

that such suits are limited to cases in which confidential

information is not implicated, which it contends is not the case

here. It argues that by pursuing this claim Kachmar would be

violating her ethical duties under the Pennsylvania Rules of

Professional Conduct which impose a general duty of

confidentiality with respect to "information relating to the

representation of a client." See Pennsylvania Rules of

Professional Conduct 1.6 (1996). SunGard notes that while Rule

1.6(c)(3) allows the disclosure of confidential information "to

establish a claim or defense on behalf of the lawyer in a

controversy between the lawyer and the client," the comments to

the Rule only offer two examples of such disputes: where there is

a dispute over fees and where an attorney is defending against a

claim implicating his conduct. See id. However, the Rules do

not address affirmative claims for relief under a federal statute

and thus we believe they are at best inconclusive on the issue

SunGard raises.

SunGard seeks to bolster its contention that suits such

as this by former in-house counsel run counter to the policies

underlying the attorney-client privilege by citing a few state

Supreme Court cases. It is true that some state cases take a

restrictive view of the former in-house counsel's ability to file

suit for retaliatory discharge. The most restrictive approach appears to have been taken in Balla v. Gambro, Inc., 584 N.E.2d

104, 145 Ill.2d 492 (1991), which held that tort actions for

wrongful discharge are unavailable to in-house counsel. See also

Herbster v. North American Co., 501 N.E. 2d 343 (Ill. App. Ct.

1986).

Although the California Supreme Court, which considered

the issue in General Dynamics Corp. v. Superior Court, 876 P.2d

487, 490-91, 7 Cal.4th 1164, 1170-71 (1994) (en banc), has not

adopted Illinois' blanket preclusion, SunGard relies on language

in that opinion limiting the availability of suits by in-house

counsel. In that case, a former in-house counsel filed a

contract and tort action alleging that he was terminated in part

because he had spearheaded an investigation into employee drug

use at a company plant and had advised General Dynamics that its

salary policy may have been in violation of the Fair Labor

Standards Act. In a thoughtful opinion, the Court declined to

dismiss the action at the pleadings stage, holding that "under

circumscribed conditions, an in-house attorney may pursue a

wrongful discharge claim for damages against his corporate

employer even though a judgment ordering his reinstatement is not

an available remedy." Id. at 495. The Court viewed the

situation of in-house counsel as being more analogous to that of

corporate executives who "owe their livelihoods, career goals and

satisfaction to a single organizational employer," than to that

of an attorney in the traditional attorney-client relationship, noting, "[u]nlike the law firm partner, who typically possesses a

significant measure of economic independence and professional

distance derived from a multiple client base, the economic fate

of in-house attorneys is tied directly to a single employer, at

whose sufferance they serve." Id. at 491.

The Court further observed that the professional

relationship between the in-house attorney and the client did not

fit the standard model of the "one-shot" undertaking - drafting a

will or handling a piece of litigation - characteristic of the

outside law firm. The corporate attorney-employee, the Court

stated, "operating in a heavily regulated medium, often takes on

a larger advisory and compliance role, anticipating potential

legal problems, advising on possible solutions and generally

assisting the corporation in achieving its business aims . . . ."

Id.1 The language on which SunGard relies arose when the

Court considered the possible limitations on the vitality of wrongful discharge claims when brought by former in-house 1 For an account of the rise of the corporate legal department and its implications for the traditional "outside" law firm, see Abram Chayes & Antonia H. Chayes, Corporate Counsel and the Elite Law Firm, 37 Stan. L. Rev. 277 (1984). A number of scholarly articles have addressed the dynamics of lawyer-client relations in the organizational context. See, e.g., Sara A. Corello, Note, In-House Counsel's Right to Sue for Retaliatory Discharge, 92 Colum. L. Rev. 389 (1992); Stephen E. Kalish, The Attorney's Role in the Private Organization, 59 Neb. L. Rev. 1 (1988); Kenneth J. Wilbur, Wrongful Discharge of Attorneys: A Cause of Action to Further Professional Responsibility, 92 Dick. L. Rev. 777 (1988); Daniel S. Reynolds, Wrongful Discharge of Employed Counsel, 1 Geo. J. Legal Ethics 553 (1988). counsel. The Court, after holding that a limited remedy should

be provided for former in-house counsel "confronted with the

dilemma of choosing between adhering to professional ethical

norms and surrendering to the employer's unethical demands,"

recognized the need to accommodate the "values that underlie the

professional relationship - the fiduciary qualities of mutual

trust and confidence." Id. at 502, 503. It was in that context

that the Court stated that "in those instances where the

attorney-employee's retaliatory discharge claim is incapable of

complete resolution without breaching the attorney-client

privilege, [a wrongful discharge] suit may not proceed," unless

"some statute or ethical rule, such as the statutory exceptions

to the attorney-client privilege . . . specifically permits the

attorney to depart from the usual requirement of

confidentiality." Id. at 490, 502. The Court noted that there

are ample possibilities for preserving confidential

communications, and underlined the fact that dismissal at the

demurrer stage will seldom, if ever, be appropriate. See id. at

489.

Other state courts have also permitted former in-house

attorneys to bring wrongful discharge actions in tort, similarly

analyzing the state public policies at issue. See, e.g., GTE Products Corp. v. Stewart, 653 N.E.2d 161, 166-68, 421 Mass. 22,

28-29 (1995) (holding that in-house counsel may maintain wrongful

discharge action where fired for refusing to violate ethical norms); Parker v. M & T Chemicals, Inc., 566 A.2d 215, 220, 236

N.J.Super. 451, 459 (1989) (holding that employee-attorney may

bring a damage suit for wrongful discharge under New Jersey's

Conscientious Employee Protection Act, as public policy in favor

of whistle-blowing on illegal conduct overrides attorney's duties

of confidentiality).

The federal courts that have addressed the question

have cited the important public policies underlying federal anti-

discrimination legislation and the supremacy of federal laws in

determining that federal anti-discrimination statutes take

precedence over the at-will discharge principle. See, e.g.,

Jones, 793 F.2d at 726; Stinneford v. Spiegel Inc., 845 F.Supp.

1243, 1245-46 (N.D. Ill. 1994); Rand v. CF Industries, Inc., 797

F.Supp. 643, 645 (N.D. Ill. 1992).

The Jones court, although ultimately upholding the

district court decision that the employer was justified in

terminating the former attorney-manager of its EEO programs,

emphasized that the provisions of Title VII must be construed

broadly to extend to all employees and must be rigorously

enforced: "since the enforcement of Title VII rights necessarily

depends on the ability of individuals to present their grievances

without the threat of retaliatory conduct by their employers,

rigid enforcement of § 704(a) [the retaliatory discharge

provision] is required." Jones, 793 F.2d at 726; see also Stinneford, 845 F.Supp. at 1246 ("[T]he Supremacy clause demands that the federally mandated protections of the ADEA triumph over

the state principle of at-will employment."). Such an approach

is consistent with the policy to liberally construe the

discrimination laws to best effectuate their remedial purpose.

See County of Washington v. Gunther, 452 U.S. 161, 170 (1981).

We do not suggest that concerns about the disclosure of

client confidences in suits by in-house counsel are unfounded,

but these concerns alone would not warrant dismissing a

plaintiff's case, especially where there are other means to

prevent unwarranted disclosure of confidential information. In

Breckinridge v. Bristol-Myers Co., 624 F.Supp. 79 (S.D. Ind.

1985), where the defendants' legal officer claimed that the

reasons offered by the company for his dismissal were a pretext

for illegal age discrimination, the district court determined

that while certain breaches of confidential material were

problematic, "what [the plaintiff] Breckinridge did as the

defendants' employee is assuredly relevant and pivotal in this

case." Id. at 84. It did not disallow the plaintiff from

providing testimony as to his duties and actions as general

counsel, and, in fact, explicitly noted that information relating

to the plaintiff's activities was relevant and discoverable. See id. at 83.

It is premature at this stage of the litigation to

determine the range of the evidence Kachmar will offer and

whether or how it will implicate the attorney-client privilege. For example, without deciding the substance of the issue, it is

difficult to see how statements made to Kachmar and other

evidence offered in relation to her own employment and her own

prospects in the company would implicate the attorney-client

privilege. See, e.g., Breckenridge, 624 F. Supp. at 82. It is

also questionable whether information that was generally

observable by Kachmar as an employee of the company, such as her

observations concerning the lack of women in a SunGard

subsidiary, would implicate the privilege. Moreover, there may

be a fine but relevant line to draw between the fact that Kachmar

took positions on certain legal issues involving SunGard

policies, and the substance of her legal opinions. See General

Dynamics, 876 P.2d at 491 (discussing fact that plaintiff counsel

advised the company that it was in possible violation of the Fair

Labor Standards Act).

In Doe v. A Corp., 709 F.2d 1043, 1050 (5th Cir. 1983),

the court observed that "[a] lawyer . . . does not forfeit his

rights simply because to prove them he must utilize confidential

information. Nor does the client gain the right to cheat the

lawyer by imparting confidences to him." Id. at 1050; cf. Oregon State Bar Legal Ethics Comm., Formal Op. 1994-136 (stating that

attorney may disclose confidences to establish a wrongful

termination claim where attorney was terminated after refusing to

make false representations on a patent application). In balancing the needed protection of sensitive

information with the in-house counsel's right to maintain the

suit, the district court may use a number of equitable measures

at its disposal "designed to permit the attorney plaintiff to

attempt to make the necessary proof while protecting from

disclosure client confidences subject to the privilege." General

Dynamics, 876 P.2d at 504. Among those referred to in General

Dynamics were "[t]he use of sealing and protective orders,

limited admissibility of evidence, orders restricting the use of

testimony in successive proceedings, and, where appropriate, in

camera proceedings." Id. Admittedly, this may entail more

attention by a judicial officer than in most other Title VII

actions, but we are not prepared to say that the trial court,

after assessing the sensitivity of the information offered at

trial, would not be able to draft a procedure that permits

vindicating Kachmar's rights while preserving the core values

underlying the attorney-client relationship. It follows that we

cannot affirm the dismissal of Kachmar's retaliatory discharge

claim at this preliminary stage on the alternative grounds

suggested by SunGard.

B. Sex Discrimination In contrast to the dismissal of Kachmar's retaliatory

discharge claim, the district court entered summary judgment for

SunGard on Kachmar's sex discrimination claim. In her complaint

Kachmar alleged that SunGard engaged in a "pattern and practice of discrimination against females, including plaintiff, in rates

of compensation, promotions, hiring, retention, and discharge."

App. at 21. Kachmar sought damages and reinstatement with back-

pay. The parties have therefore treated this as a claim under

Title VII that Kachmar was fired on account of her sex that is

independent of her Title VII retaliatory discharge action.

To establish a prima facie case of employment

discrimination, a plaintiff must show that she is a member of a

protected class, that she was qualified for the position under

dispute, that she was dismissed from that position, and that she

was replaced by a member of a favored class. See McDonnell

Douglas Corp. v. Green, 411 U.S. 792, 802, 93 S.Ct. 1817, 1824

(1973); Lazarz v. Brush Wellman, Inc., 857 F.Supp. 417, 422 (E.D.

Pa. 1994). The first three elements of Kachmar's prima facie

case are undisputed. The district court granted SunGard's motion

for summary judgment based on the fourth element, holding that

there was no dispute as to the fact that Kachmar was replaced by

a female employee.

The district court's treatment of this issue was brief.

The court stated:

Defendants have submitted an affidavit of Defendant Gross which indicates that Kachmar was replaced by Armstrong, another female. In response, Kachmar has filed her own affidavit stating that she "trained Sarah Armstrong and worked with her, [she knew] her experience [was] not comparable to [her] own . . . [s]he may have been given my title, but she did not and could not replace me." See Affidavit of Kachmar, at ¶ 15. This is not sufficient to stave off summary judgment. Since I find that there is no genuine issue as to who replaced Kachmar, Defendants' Motion for Partial Summary Judgment will be granted.

App. at 60-61.

Had the relevant issue been who was given Kachmar's

title, Gross's affidavit would have been dispositive, as Kachmar

did not dispute that Sarah Armstrong, another woman, was promoted

into her position of Senior Counsel. She did, however, dispute

that Armstrong "replace[d]" her. She contends that while

Armstrong took over Kachmar's position in name, Michael

Zuckerman, who was hired as Corporate Counsel to fill Armstrong's

place, was Kachmar's actual replacement. She asserts that the

timing of the hiring and the relative experience of Armstrong and

Zuckerman strongly suggest that Armstrong became Senior Counsel

in name only.

As this issue arises on summary judgment, Kachmar's

failure to provide some evidence other than her own belief that

Zuckerman rather than Armstrong replaced her would require

affirmance under ordinary circumstances. For example, she has

failed to overcome the memorandum SunGard produced dated March

18, 1994, from Gross to 53 SunGard management employees that

states: I am pleased to announce that Sara Armstrong has been promoted to the position of Senior Counsel. In just two years with the Company, Sara has quickly learned many of the intricacies of our myriad businesses and assumed major responsibilities in the areas of customer contracts and acquisitions. By way of reminder, Sara previously worked on the mergers and acquisitions team at the Philadelphia law firm of Dechert Price & Rhoads; she is a 1988 graduate of Columbia Law School and also holds a masters degree from the Kennedy School of Government and a bachelors degree from the University of Pennsylvania.

I am also pleased to announce that Mike Zuckerman will be joining the Company as Corporate Counsel in mid-April. Before attending Harvard Law School, where he graduated cum laude in 1990, Mike worked for ten years in the computer industry, including positions as Manager of Product Development and Director of Technical Services for a provider of specialty turnkey systems. Since 1990, Mike has applied his unique blend of legal and computer skills at Dechert, Price & Rhoads, where he has handled a variety of computer law, intellectual property and general corporate assignments. Mike will be handling similar types of assignments for SunGard.

App. at 34. As this memorandum appears to notify those who would

be likely to refer matters to in-house counsel of the respective

positions occupied by Armstrong and Zuckerman, it supports

SunGard's position that Armstrong replaced Kachmar. Kachmar

notes that SunGard "waited seven weeks . . . to announce

Armstrong's promotion to Senior Counsel" and argues that she

should be able to explore by discovery whether it is a "possible

pretext." Appellant's brief at 39.

It appears from this limited record that Kachmar will

have a difficult road to travel to support her allegation that

Armstrong's promotion was simply a ruse. However, Kachmar was

not given the opportunity to test her contention by discovery.

Although she followed the procedure contained in Rule 56(f) by certifying her need to have the opportunity to complete discovery

before the court made a dispositive ruling on SunGard's motion

for summary judgment, see App. at 47, the district court entered

judgment without giving her that opportunity. Nor did the

district court explain why it was denying the request for

discovery. Inasmuch as Kachmar has had no opportunity for

discovery, we will vacate the order granting summary judgment to

give her the chance to pursue this theory.

In remanding on this issue, we do not suggest that

"replacement" for purposes of Title VII means that every detail

of the duties which Kachmar performed need be compared to those

performed by Armstrong and Zuckerman. It would be only natural

that duties shift with new personnel, as they bring to the

position varied skills and expertise that may differ from those

of the prior occupant. Nor is salary necessarily determinative.

The relevant issue is whether the title of Senior Counsel given

to Armstrong was merely a ruse to conceal replacing Kachmar with

Zuckerman, a male. Because this is a narrow issue, the district

court may limit discovery on this claim accordingly.

C. Individual Liability

The district court dismissed Gross and Pedrick as

defendants in both the retaliatory discharge and discrimination

claims on the ground that individuals may not be held liable

under Title VII. In Sheridan v. E.I. DuPont de Nemours and Co., 100

F.3d 1061 (3d Cir. 1996), this court in an en banc decision,

joined the majority of other circuits in concluding "that

Congress did not intend to hold individual employees liable under

Title VII." Id. at 1077; see also Dici v. Commonwealth of

Pennsylvania, 91 F.3d 542, 552 (3d Cir. 1996). We will therefore

affirm the district court's order dismissing Kachmar's Title VII

claims against Pedrick and Gross. D. Tortious Interference with Prospective Contractual Relations

Kachmar appended to her Title VII claims a state law

claim of tortious interference with prospective contractual

relations. She alleges that after SunGard discharged her,

Armstrong telephoned one of the partners of the law firm with

which Kachmar was seeking employment "on the pretext of getting a

message to [Kachmar] on an unrelated matter" and "[w]hile engaged

in this conversation, and for no reason except to attempt to

interfere with [Kachmar's] efforts to find new employment,

Armstrong advised the partner that [Kachmar] had hired counsel

and was going to sue SunGard." Complaint at ¶¶ 68, 69. As a

result, discussions between the law firm and Kachmar were

discontinued.2 2 Kachmar argues for the first time in her reply brief that her claim that Armstrong’s telephone call constituted discriminatory retaliation was never dismissed by the district court. We need not decide whether the Supreme Court's recent holding that former employees may bring suits for discriminatory retaliation under Title VII, see Robinson v. Shell Oil Co., 117 S.Ct. 843 (1997); see also Charlton v. Paramus Bd. of Educ., 25 F.3d 194, 200 (3d To prevail on a claim of intentional interference with

prospective contractual relations under Pennsylvania law, Kachmar

must show the following: (1) a prospective contractual relation;

(2) the purpose or intent to harm the plaintiff by preventing the

relation from occurring; (3) the absence of privilege or

justification on the part of the defendant; and (4) the

occasioning of actual damage resulting from the defendant's

conduct. Thompson Coal Co. v. Pike Coal Co., 488 Pa. 198, 208,

412 A.2d 466, 471 (1979); Advent Systems Ltd. v. Unisys Corp.,

925 F.2d 670, 673 (3d Cir. 1991) (citing Silver v. Mendel, 894

F.2d 598, 601-602 (3d Cir.), cert. denied, 496 U.S. 926 (1990)).

The district court held that Kachmar stated sufficient

facts to meet the second and fourth prongs of the cause of

action, but that the allegations of the complaint that Kachmar

merely "sought" an attorney position with a prominent law firm in

Philadelphia did not rise to the level of a "prospective

contractual relation" as it was too indefinite. The district

court also held that Kachmar could not prove an absence of

privilege because Armstrong's statement was truthful, citing the

Restatement (Second) of Torts § 772 (1979). It thus dismissed

Kachmar's complaint for failure to state a claim upon which

relief can be granted.

(..continued) Cir.), cert. denied, 115 S.Ct. 590 (1994), covers these facts because Kachmar failed to raise this issue in her initial brief and it is therefore waived. See McLendon v. Continental Can Co., 908 F.2d 1171, 1183 (3d Cir. 1990). A "prospective contractual relation" is, by definition,

not as susceptible of precise, exacting identification as is an

existing contract. "[A]nything that is prospective in nature is

necessarily uncertain." Glenn v. Point Park College, 441 Pa.

474, 480, 272 A.2d 895, 898 (1971). We have previously held that

the Pennsylvania Supreme Court requires that there be an

objectively reasonable probability that a contract will come into

existence, Schulman v. J.P. Morgan Inv. Management, Inc., 35 F.3d

799, 808 (3d Cir. 1994), something more than a "mere hope,"

Thompson Coal, 412 A.2d at 471.

We assume that had Kachmar's discussions led to a more

definite employment prospect with the law firm, she would have so

alleged and thus we share some of the district court's skepticism

about the application of this tort to these facts. However, once

again our disposition is governed by the procedural stage at

which the issue arises. Kachmar's allegation that she learned

during her discussions with the firm of Armstrong's conduct in

informing the firm that Kachmar "hired a lawyer and was filing a

discrimination suit against defendants," App. at 44, may suggest

that the interaction between Kachmar and the firm passed beyond

the preliminary stage. Of course, there is a wide gap between

preliminary discussions and the "reasonable likelihood or

probability" stage required by Pennsylvania law. Had the matter

proceeded beyond dismissal to summary judgment, Kachmar would

have been required to produce evidence from sources available to her as to whether her contacts had reached that stage. Dismissal

on the basis of the complaint precluded that inquiry.

The other ground on which the district court dismissed

was Kachmar's failure to show the absence of justification or

privilege for Armstrong's action. The court cited section 772 of

the Restatement (Second) of Torts (1979) dealing with Advice as

Proper or Improper Interference, which states: One who intentionally causes a third person not to perform a contract or not to enter into a prospective contractual relation with another does not interfere improperly with the other's contractual relation, by giving the third-person (a) truthful information, or (b) honest advice within the scope of a request for advice.

(emphasis added).

The Pennsylvania Supreme Court has never explicitly

adopted section 772, and we have therefore analyzed the element

of justification or privilege using the language employed by the

Pennsylvania cases. Those cases have not stated that the truth

of a statement in itself will defeat the tort claim but instead

have focused on the broader issue of what constitutes a justified

or privileged interference with prospective contractual

relations. In Silver v. Mendel, 894 F.2d 598, 603 n.7 (3d Cir.), cert. denied, 496 U.S. 926 (1990), we relied on the Pennsylvania

Supreme Court's discussion in Glenn v. Park Point College, 441

Pa. at 479-80, 272 A.2d at 898, for the proposition that the

absence of privilege or justification is "closely related to . . . intent" and "is not susceptible of precise definition." In

Advent Systems, we stated that, When a defendant acts at least in part to protect some legitimate concern that conflicts with an interest of the plaintiff, a line must be drawn and the interests evaluated. The central inquiry in the evaluation is whether the interference is 'sanctioned' by 'the rules of the game' which society had adopted [defining] socially acceptable conduct which the law regards as privileged.

925 F.2d at 673 (quoting Glenn, 272 A.2d at 899).

In a more recent case, the Pennsylvania Superior Court

stated: "[T]he Pennsylvania Supreme Court has determined that the

relevant inquiry must focus on the propriety of a defendant's

conduct considering the factual scenario as a whole." Ruffing v.

84 Lumber Co., 410 Pa.Super. 459, 467-68, 600 A.2d 545, 549

(1991) (emphasis in original); see also University Graphics, Inc.

v. Pro-Image Corp., 913 F.Supp. 338, 346 (M.D. Pa. 1996).

Because the district court focused solely on Restatement section

772 which gives dispositive effect to the truthfulness of the

statement and failed to apply the broader Pennsylvania standard

which looks to the propriety of the conduct, we will remand to

the district court.

We do not suggest that the truthfulness of the

statement is not a factor to be considered although we note that

truthfulness is not referred to in either section 767 of

Restatement (Second) of Torts, which provides a list of factors

relevant to "proper" conduct, or in the Pennsylvania cases dealing with interference with prospective contractual relations.

The district court will have the opportunity to review in the

first instance what may be the somewhat differing approaches to

"proper" conduct in the Pennsylvania Superior Court. Compare

Yaindl v.Ingersoll-Rand Co., 281 Pa.Super. 560, 573-74, 580 n.11,

422 A.2d 611, 618, 622 n.11 (1980) (employing the factors of

section 767 and stating that the absence of privilege or

justification is merely another way of stating that the

defendant's conduct must be improper) with Vintage Homes, Inc. v.

Levin, 382 Pa.Super. 146, 155, 554 A.2d 989, 994 (1989)

(analyzing the tort only with reference to "absence of

justification or privilege"), Gordon v. Lancaster Osteopathic

Hosp. Ass'n, Inc., 340 Pa.Super. 253, 263, 489 A.2d 1364, 1370

(1985), and Ruffing, 600 A.2d at 549 (analyzing tort with

reference to both the factors set forth in section 767 and

"absence of justification or privilege").

Kachmar is entitled the opportunity to further develop

her tortious inteference claim. Of course, to prosecute her

claim against SunGard she has the burden of offering some

evidence that Armstrong was acting within the scope of her

employment when she contacted the law firm. See Yaindl, 422 A.2d at 625. We assume that whether Kachmar has any basis for

asserting this claim against SunGard can be developed at the

initial stages of discovery. We will therefore vacate the

dismissal of this claim and remand for further proceedings. III.

CONCLUSION

To summarize, the district court was premature in

dismissing Kachmar's complaint in its entirety. First, we

conclude that Kachmar has stated a prima facie case of

retaliatory discharge under Title VII, and is not barred from

pursuing her action by the attorney-client privilege and/or the

ethical constraints of attorney-client confidentiality. Second,

we hold that a genuine issue of material fact exists as to

Kachmar's sex discrimination claim and summary judgment was

therefore inappropriate. Third, we conclude that Kachmar has

stated a claim for tortious interference with prospective

contractual relations. Finally, we uphold the dismissals of the

individual defendants Gross and Pedrick. Accordingly, we will

affirm in part and vacate and remand the remainder of the order

for further proceedings consistent with this opinion.

___________________________

TO THE CLERK:

Please file the foregoing opinion.

____________________________________ Chief Judge