COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 2-03-343-CV
SHEAR
CUTS, INC. APPELLANT
V.
KAY
LITTLEJOHN APPELLEE
------------
FROM
THE 342ND DISTRICT COURT OF TARRANT COUNTY
OPINION
In
this employment discrimination case, Appellant Shear Cuts, Inc. appeals the
trial court’s judgment and $107,123.50 award in favor of Appellee Kay
Littlejohn. We modify the trial court’s judgment to delete the award of
punitive damages and otherwise affirm the trial court’s judgment.
Factual and
Procedural Background
Littlejohn
is an African-American licensed cosmetologist who applied for a position at one
of Shear Cuts’ fourteen hair salons located throughout the Dallas-Fort Worth
metroplex in the Fall of 2001. Although the parties disagree on the
circumstances leading up to Littlejohn’s discrimination claim against Shear
Cuts, they agree that Littlejohn interviewed for a position at Shear Cuts’
Arlington salon on October 9, 2001. They also agree that Elizabeth Martinez, an
area supervisor for Shear Cuts, conducted the interview at the Arlington
location.
Shear
Cuts claims that during the interview Martinez had two concerns regarding
Littlejohn’s candidacy for employment. First, Littlejohn presented
Martinez with a customer list from her previous employer, and theft of a client
list is a terminable offense at Shear Cuts. Second, Shear Cuts could only offer
$10 per hour as a store manager, which would constitute a drop in pay for
Littlejohn because she made $21,000 per year plus bonuses at her previous job.
Martinez testified that she did not offer Littlejohn a job and instead told
Littlejohn that she would call her.
Littlejohn’s
version of the interview is quite different. She claims that Martinez told her
that managers could make at least $30,000 a year and that some were making
$50,000. According to Littlejohn, Martinez offered her a position and
agreed upon $10 per hour plus 50% commission on sales over $1,000 per week,
assuring her that she would make at least $30,000 her first year.
The
following day, Littlejohn went to the Arlington salon and began setting up her
supplies at one of the stations. Littlejohn claims that upon being told
Appellee would manage the salon, one of the employees, Wendy Swift, stated,
“Hell no . . . this can’t be.” Swift them made phone calls to a
coworker and to Martinez. Littlejohn also claims that an Asian employee
walked out, asking Wendy, “[W]hy [are] you talking to her like that . . . I
don’t want to be here with this going on.” Littlejohn testified that
Martinez called her and fired her, explaining that the employees were concerned
that they would lose their white clientele because blacks would be coming to the
salon.
Shear
Cuts, on the other hand, claims that after Littlejohn unexpectedly appeared at
the salon, the corporate office called Martinez. As a result, Martinez
called Littlejohn and informed her that there must have been a misunderstanding
because Littlejohn was not hired. Martinez testified that she asked
Littlejohn to get her belongings and leave the premises.
Littlejohn
filed a complaint with the Equal Employment Opportunity Commission within a week
of the incident and thereafter filed this claim in district court. After a
short trial encompassing the testimony of only three witnesses, the trial court,
sitting without a jury, ruled in favor of Littlejohn and awarded her
$107,123.50.1 The trial court made the
following findings of fact and conclusions of law:
FINDINGS
OF FACT
1.Plaintiff
is a black female.
2.Plaintiff
applied for and was qualified for the position of manager of the Lincoln Square
Shear Cuts in Arlington, TX.
3.Plaintiff
suffered an adverse employment action because of her race, black.
4.Clear
and convincing evidence showed that the Defendant acted with malice or reckless
indifference to the rights of the Plaintiff when it engaged in the
discriminatory employment practice.
CONCLUSIONS
OF LAW
1.The
Defendant violated the Texas Commission on Human Rights Act and the Tex. Lab.
Code, in that it discriminated against the Plaintiff because of her race, black.
Shear
Cuts, in five points of error, appeals the trial court’s judgment in favor of
Littlejohn.
Legal
Sufficiency
In
its first two points of error, Shear Cuts challenges the legal sufficiency of
the evidence to support the trial court’s judgment that Shear Cuts violated
the Texas Commission on Human Rights Act (TCHRA) by discriminating against
Littlejohn because of her race. In determining a “no-evidence” point,
we are to consider only the evidence and inferences that tend to support the
finding and disregard all evidence and inferences to the contrary. Bradford
v. Vento, 48 S.W.3d 749, 754 (Tex. 2001); Cont’l Coffee Prods. Co. v.
Cazarez, 937 S.W.2d 444, 450 (Tex. 1996); In re King's Estate, 150
Tex. 662, 244 S.W.2d 660, 661 (1951). Anything more than a scintilla of
evidence is legally sufficient to support the finding. Cazarez, 937
S.W.2d at 450; Leitch v. Hornsby, 935 S.W.2d 114, 118 (Tex. 1996). More
than a scintilla of evidence exists if the evidence furnishes some reasonable
basis for differing conclusions by reasonable minds about the existence of a
vital fact. Rocor Int’l, Inc. v. Nat’l Union Fire Ins. Co., 77
S.W.3d 253, 262 (Tex. 2002).
A
“no-evidence” point may only be sustained when the record discloses one of
the following: (1) a complete absence of evidence of a vital fact; (2) the court
is barred by rules of law or evidence from giving weight to the only evidence
offered to prove a vital fact; (3) the evidence offered to prove a vital fact is
no more than a mere scintilla of evidence; or (4) the evidence establishes
conclusively the opposite of a vital fact. Uniroyal Goodrich Tire Co. v.
Martinez, 977 S.W.2d 328, 334 (Tex. 1998) (citing Robert W. Calvert, "No
Evidence" and "Insufficient Evidence" Points of Error,
38 TEX. L. REV.
361, 362-63 (1960)), cert. denied, 526 U.S. 1040 (1999).
An
assertion that the evidence is “insufficient” to support a fact finding
means that the evidence supporting the finding is so weak or the evidence to the
contrary is so overwhelming that the answer should be set aside and a new trial
ordered. Garza v. Alviar, 395 S.W.2d 821, 823 (Tex. 1965). We
are required to consider all of the evidence in the case in making this
determination. Mar. Overseas Corp. v. Ellis, 971 S.W.2d 402, 406-07
(Tex.), cert. denied, 525 U.S. 1017 (1998).
In
discrimination cases that have not been fully tried on the merits, we apply the
burden-shifting analysis established by the United States Supreme Court. Wal-Mart
Stores, Inc. v. Canchola, 121 S.W.3d 735, 739 (Tex. 2003). When a
discrimination case has been fully tried on its merits, however, “[w]e need
not parse the evidence into discrete segments corresponding to a prima facie
case, an articulation of a legitimate, nondiscriminatory reason for the
employer’s decision, and a showing of pretext.” Rutherford v. Harris
County, Tex., 197 F.3d 173, 181 (5th Cir. 1999) (quoting Travis v. Bd. of
Regents, 122 F.3d 259, 263 (5th Cir. 1997)). We instead, determine
whether the evidence is sufficient to support the fact finder’s ultimate
findings. Rutherford, 197 F.3d at 180-81; Canchola, 121 S.W.3d at
739.
Under
section 21.051 of the TCHRA,
An
employer commits an unlawful employment practice if because of race, color,
disability, religion, sex, national origin, or age the employer:
(1)
fails or refuses to hire an individual, discharges an individual, or
discriminates in any other manner against an individual in connection with
compensation or the terms, conditions, or privileges of employment.
Tex. Lab. Code Ann. § 21.051(1) (Vernon
1996). The Texas Legislature modeled chapter 21 of the Texas Labor Code
after federal law for the express purpose of carrying out the policies of Title
VII of the Civil Rights Act of 1964 and its subsequent amendments. Id.
§ 21.001(1); see Soto v. El Paso Natural Gas Co., 942 S.W.2d 671, 677
(Tex. App.—El Paso 1997, writ denied); Ewald v. Wornick Family Foods Corp.,
878 S.W.2d 653, 658 (Tex. App.—Corpus Christi 1994, writ denied).
Consequently, when reviewing an issue brought under chapter 21, we may look not
only to cases involving the state statute, but also to cases interpreting the
analogous federal provisions. See Caballero v. Cent. Power & Light
Co., 858 S.W.2d 359, 361 (Tex. 1993); Elgaghil v. Tarrant County Junior
Coll., 45 S.W.3d 133, 139 (Tex. App.—Fort Worth 2000, pet. denied).
In
discrimination cases brought under the TCHRA, a prima facie case of
discrimination is made by showing plaintiff (1) is within a protected group, (2)
was adversely affected or suffered an adverse employment action, and (3)
similarly situated non-protected class members were not treated similarly. See
Swierkiewicz v. Sorema N.A., 534 U.S. 506, 510, 122 S. Ct. 992, 996 (2002); McDonnell
Douglas Corp. v. Green, 411 U.S. 792, 802, 93 S. Ct. 1817, 1824 (1973); M.D.
Anderson Hosp. v. Willrich, 28 S.W.3d 22, 24 (Tex. 2000). In order to
prove causation, plaintiffs must establish that race “was a motivating factor
for an employment practice, even if other factors also motivated the practice,
unless race . . . is combined with objective job-related factors to attain
diversity in the employer’s work force.” Tex. Lab. Code Ann. § 21.125(a) (Vernon
Supp. 2004); Quantum Chem. Corp. v. Toennies, 47 S.W.3d 473, 479-80 (Tex.
2001).
Because
Shear Cuts contends that it never hired Littlejohn, it recites a different list
of elements required for establishing a prima facie case. Shear Cuts
asserts that in order to establish a prima facie case of discrimination in the
context of a denial of an employment position, a claimant must show that (1) she
is a member of a protected class, (2) she applied for and was qualified for the
position, (3) despite her qualifications, she was rejected, and (4) after she
was rejected, the position remained open and the employer continued to seek
applicants with the claimant’s qualifications. See Romo v.
Tex. Dep’t of Transp., 48 S.W.3d 265, 270 (Tex. App.—San Antonio 2001,
no pet.). Littlejohn, however, does not contend that she was denied an
employment position, she claims she was wrongfully terminated.
Consequently, Littlejohn’s burden is to establish the elements of her
claim. Logically, if Shear Cuts did not hire Littlejohn, her claim fails
as a matter of law. On the other hand, if Shear Cuts did hire Littlejohn,
she was not required to prove that she was qualified for the job or that she was
rejected for the position or that Shear Cuts continued to seek applicants with
the same qualifications.
A
review of the record demonstrates that the trial judge determined that Shear
Cuts did hire, and subsequently fire, Littlejohn.2
Thus, in order to properly address Shear Cuts’ contention on appeal, we must
first decide whether the evidence supports the trial court’s determination
that Shear Cuts hired Littlejohn. The only fact witnesses at the trial
were Littlejohn and Shear Cuts’ area supervisor, Martinez. Littlejohn
testified that Martinez hired her, had her sign a W-2 form, and told her to
report for work at 11:00 a.m. the following day. Martinez testified that
after interviewing Littlejohn for the position, Martinez told Littlejohn she
would call her regarding the hiring decision. Except for pictures of
Littlejohn’s supplies set up in one of Shear Cuts’ styling stations, there
is no other evidence regarding whether Shear Cuts hired Littlejohn. While
Shear Cuts points out that no documentary evidence was produced to indicate that
Littlejohn completed any employment forms such as a W-4 or an I-9, we note that
Martinez also testified that she disposed of Littlejohn’s application for
employment.
In
a bench trial, the trial court, as fact finder, is the sole judge of the
credibility of the witnesses. Munters Corp. v. Swissco-Young Indus.,
Inc., 100 S.W.3d 292, 296 (Tex. App.—Houston [1st Dist.] 2002, pet.
dism'd) (op. on reh’g). The trial court may take into account all the
surrounding facts and circumstances in connection with the testimony of each
witness and accept or reject all or any part of that testimony. Id.
at 297. Here, the trial court, as fact finder, was free to disagree with
Shear Cuts' characterization of the evidence and to conclude that Littlejohn was
hired as a manager for its Arlington salon and later terminated by Martinez.
Giving due deference to the trial court’s findings on matters of weight and
credibility, we cannot say that the evidence was so weak as to be clearly wrong.
We therefore conclude that the trial court’s determination that Shear Cuts
hired and then fired Littlejohn is supported by the evidence. Consequently, to
establish a prima facie case of discrimination under the TCHRA, Littlejohn was
required to show that she was (1) within a protected group, (2) suffered an
adverse employment action, and (3) similarly situated non-protected class
members were not treated similarly. Swierkiewicz, 534 U.S. at 510,
122 S. Ct. at 996. Accordingly, we review the record to determine whether
there is sufficient evidence that Shear Cuts terminated Littlejohn because she
is African-American.
Because
the record contains little proof beyond the testimony of Littlejohn and
Martinez, the evidence before us is essentially a swearing match between the two
parties. We will not reevaluate the weight and credibility of the evidence
and therefore defer to the trial court’s role as the exclusive judge of the
credibility of the witnesses. See Munters Corp., 100 S.W.3d at 296.
Keeping this in mind, we find the evidence to be legally sufficient to sustain
the trial court’s ultimate determination that Shear Cuts “discriminated
against [Littlejohn] because of her race, black.” We overrule Shear
Cuts’ first two points.
Damages
In
its third point, Shear Cuts contends that the evidence is legally insufficient
to support the award of $40,911 for lost wages from October 12, 2001 until the
time of trial, September 10, 2003. The trial court has discretion to award
back pay as equitable relief in a race discrimination lawsuit. Tex. Lab. Code Ann. § 21.258(b)(1)
(Vernon 1996). The correct measure of damages for lost wages is the amount
of money the employee would have earned had she not been terminated, less the
sum she did earn after termination. Id. § 21.258(c); Goodman v.
Page, 984 S.W.2d 299, 305 (Tex. App.—Fort Worth 1998, pet. denied).
Shear
Cuts, relying on Ewald v. Wornick Family Foods Corp., claims that
Littlejohn cannot recover lost wages beyond November 2001—the date that the
Arlington Shear Cuts was sold to another party. 878 S.W.2d 653 (Tex.
App.—Corpus Christi 1994, writ denied). Ewald was a Corpus Christi
summary judgment case decided adversely against an employee who sued for sexual
harassment, retaliatory discharge, assault and battery, and intentional
infliction of emotional distress. Id at 655. In that case,
the court held that an employee could not recover compensatory damages for the
period of time following the closure of the employer's plant. Id. at 661.
Shear
Cuts’ case, however, is distinguishable from the situation in Ewald.
Unlike Ewald, the instant case involves a trial on the merits decided in
favor of the employee. Second, the record shows that in an attempt to
resolve Littlejohn’s claim, Shear Cuts offered her a position in another
store. Thus, Shear Cuts failed to establish that Littlejohn would have
been terminated, rather than transferred to another location, when the Arlington
store was sold. We hold that in recovering lost wages, Littlejohn is not
restricted to that period of time before the Arlington store was sold. See
Haggar Apparel Co. v. Leal, 100 S.W.3d 303, 313 (Tex. App.—Corpus Christi
2002, pet. filed); Goodman, 984 S.W.2d at 305. Therefore, the
evidence was legally sufficient to support the trial court’s award for lost
wages. We overrule Shear Cuts’ third point.
In
Shear Cuts’ fourth and fifth points, it challenges the legal sufficiency of
the trial court’s $50,000 punitive damages award. Although section
21.2585(b) of the Texas Labor Code permits a court to award punitive damages,
the employee must show that the employer engaged in a discriminatory practice
with malice or with reckless indifference to the rights of an aggrieved
individual. Tex. Lab. Code Ann. § 21.2585(b)
(Vernon Supp. 2004). Malice has to be proved by clear and convincing
evidence—the “measure or degree of proof that will produce in the mind of
the trier of fact a firm belief or conviction as to the truth of the allegations
sought to be established.” See Tex. Civ. Prac. & Rem. Code Ann.
§§ 41.001(2), 41.003(a)(2), (b) (Vernon Supp. 2004). The terms
“malice” and “reckless indifference” pertain to the employer’s
subjective knowledge that it may be acting in violation of the law, not its
awareness that it is engaging in discrimination. Kolstad v. Am. Dental
Ass’n, 527 U.S. 526, 535, 119 S. Ct. 2118, 2124 (1999). The Texas
Labor Code further limits the amount of punitive damages according to the
employer’s number of employees. See Tex. Lab. Code Ann. § 21.2585(d).
For example, punitive damages assessed against an employer with fewer than one
hundred one employees may not exceed $50,000. Id. § 21.2585(d)(1).
The
United States Supreme Court recently considered procedural and substantive
constitutional limitations on a state’s right to allow punitive damages in State
Farm Mutual Automobile Insurance Co. v. Campbell. 538 U.S. 408, 123 S.
Ct 1513 (2003). In that case, the Supreme Court reinforced the three
guideposts it established in BMW of North America, Inc. v. Gore for
determining whether punitive damages are proper: 1) the degree of
reprehensibility of the misconduct; 2) the disparity between the actual or
potential harm suffered by the plaintiff and the punitive damages award; and 3)
the difference between the punitive damages award and the civil penalties
authorized or imposed in comparable cases. Id. at 419, 123 S. Ct. at
1520; BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 574-75, 116 S. Ct. 1589,
1598-99 (1996).
“[T]he
most important indicium of the reasonableness of a punitive damages award is the
degree of reprehensibility of the defendant’s conduct.” Campbell,
538 U.S. at 419, 123 S. Ct. at 1521 (quoting Gore, 517 U.S. at 575, 116
S. Ct. at 1599). In determining reprehensibility, we consider 1) whether
the harm caused was physical as opposed to economic, 2) whether conduct
indicates an indifference to or a reckless disregard for the health or safety of
others, 3) whether the target of the conduct had financial vulnerability, 4)
whether the conduct involved repeated actions or was an isolated incident, and
5) whether the harm was the result of intentional malice, trickery, deceit, or
mere accident. Id. at 419, 123 S. Ct. at 1521.
The
existence of any one of these factors weighing in favor of a plaintiff may not
be sufficient to sustain a punitive damages award; and the absence of all of
them renders any award suspect. It should be presumed a plaintiff has been
made whole for his injuries by compensatory damages, so punitive damages should
only be awarded if the defendant’s culpability, after having paid compensatory
damages, is so reprehensible as to warrant the imposition of further sanctions
to achieve punishment or deterrence.
Id.
After
reviewing the sparse evidentiary record in light of the Supreme Court’s five
reprehensibility factors, we conclude that the evidence is insufficient to
justify the imposition of punitive damages. First, despite Littlejohn’s claim
of emotional distress, she testified that she did not see any doctors or
therapists for mental or physical injuries, indicating that most, if not all, of
Littlejohn’s damages were economic. Second, Shear Cuts’ misconduct did
not constitute a reckless disregard for the health or safety of others. Third,
due to the extremely short duration of her employment, Littlejohn was no more
financially vulnerable than she would have been had she not been hired by Shear
Cuts. There was no evidence that Littlejohn quit or refused another job
opportunity in reliance on her expected employment. In fact, Littlejohn
testified that she voluntarily left her prior job with Fantastic Sams and was
unemployed when she submitted her application for employment with Shear Cuts.
Fourth,
and perhaps most instructive on the degree of reprehensibility, is a total lack
of evidence indicating that this was anything other than an isolated event.
Martinez testified that the three previous managers at the Arlington salon were
African-American women and that Shear Cuts consistently employs minorities at
all of its locations. Furthermore, Littlejohn testified that she knew an
African-American woman who previously worked at the Arlington salon for a long
period of time.
Finally,
Littlejohn’s own testimony fails to establish that Shear Cuts acted with
intentional malice under the Supreme Court’s reprehensibility factors or
“engaged in a discriminatory practice with malice or with reckless
indifference to the state-protected rights of an aggrieved individual” as
required by section 21.2585 of the Texas Labor Code:
She
[Martinez] said, I have bad news for you. And I said, I haven’t been
here long enough to do anything wrong. What’s the problem? She
said, Well, I’m going to have to let you go. I said, What did I do?
She said, It’s nothing that you did. And she was being very nice.
She said, It’s nothing that you did. She said, I’m sorry. I’m
just going to have to let you go. The girls are very concerned about the
fact that you’re going to be doing black hair. . . . And they’re concerned
about that and they’re going to walk out on me. And I said, Well, look,
I don’t understand. I said, Why? I said -- I said, She didn’t
have a problem with me when I walk in. I said -- but she said, Well, I’m
sorry. She said, What else do you want me to do? Would you rather me
have you on and lose my employees and my clients? I don’t have a choice.
I’m stuck. I said, This is not fair, you can’t do this. And she
said, Well, I’m sorry.
Because
the trial court’s award of punitive damages is not supported by clear and
convincing evidence of malice, we sustain Shear Cuts’ fourth and fifth points.
See Tex. Civ. Prac. & Rem.
Code Ann. § 41.003(b) (Vernon Supp. 2004).
Conclusion
We
modify the trial court’s judgment to delete the $50,000 award of punitive
damages. We affirm the trial court's judgment as modified.
DIXON
W. HOLMAN
JUSTICE
PANEL
B: DAUPHINOT, HOLMAN, and GARDNER, JJ.
DELIVERED:
July 8, 2004
NOTES
1.
The total damage award is composed of $40,911 in lost wages, $50,000 for
punitive damages, $8,712.50 in attorneys’ fees, and $7,500 for appeals.
2.
Although the trial court’s findings of fact and conclusions of law resemble
the prima facie elements advanced by Shear Cuts, just before finding in favor of
Littlejohn, the trial court stated, “It makes more sense to me that the
plaintiff was hired.”