Diaz v. Kraft Foods Global, Inc.

In the

United States Court of Appeals

For the Seventh Circuit

No. 10-3073

JOSE D IAZ, R AMON P EÑA, and A LBERTO R OBLES,

Plaintiffs-Appellants,

v.

K RAFT F OODS G LOBAL, INC.,

Defendant-Appellee.

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 08 C 6814—Ronald A. Guzmán, Judge.

A RGUED F EBRUARY 23, 2011—D ECIDED A UGUST 8, 2011

Before K ANNE, W OOD , and S YKES, Circuit Judges.

W OOD , Circuit Judge. After Kraft Foods announced a

plan in 2008 to outsource many positions at its Tech

Center located in Glenview, Illinois, it arranged for the

new company to accept applications from Kraft em-

ployees who were about to lose their jobs. This case

arises from the fallout of that decision. Two of the

targeted employees, Jose Diaz and Ramon Peña, chose to

2 No. 10-3073

apply for positions with Kraft that opened up around

that time, rather than pursuing employment with the

new vendor. When Kraft did not hire either one, their

employment with the company terminated. A third

employee, Alberto Robles, stayed with Kraft, but he

believes that since 2001 Kraft has paid him less than

he deserves because it has never promoted him from

a “grade 2” to a “grade 3” position. The plaintiffs

attribute these adverse employment actions to their

supervisor, Peter Michalec, who they say is biased

against Hispanics. The district court concluded that the

plaintiffs failed to create a triable issue on whether

racial animus motivated any of Kraft’s actions and

granted summary judgment for the defendant. We

find that the district court improperly discounted the

plaintiffs’ strongest evidence and erred in its legal

analysis of Diaz and Peña’s failure-to-hire claims, but

that it properly granted summary judgment on Robles’s

disparate pay claim. Therefore, we reverse in part and

affirm in part.

I

Kraft prevailed on summary judgment, and so we

recount the facts in the light most favorable to the

plaintiffs while noting disputes where relevant. Diaz’s

employment at Kraft began in 1990, and for nine

years he was assigned to the sanitation and janitorial de-

partments. In 1999, Diaz transferred to the shipping

department, where he worked until he lost his job

on November 15, 2008. Peña began in Kraft’s shipping

No. 10-3073 3

department as a part-time employee in 2000. In 2006,

he became a full-time employee, staying in the position

until he lost his job on the same day as Diaz. Peña and

Diaz were hourly employees throughout their tenure

with Kraft. Robles worked in the sanitation and janitorial

departments as an hourly employee from 1987 to 2001.

In June 2001, he became a senior technician in the

support services department; this was the salaried posi-

tion that he held at the time of this appeal.

In the proceedings below, two additional plaintiffs,

Betty Flores and Robert Vela, were parties to this law-

suit. Flores defeated Kraft’s motion for summary judg-

ment and eventually settled her claim. Vela has not

appealed. As will soon become clear, the evidence

Flores marshaled to defeat Kraft’s summary judgment

motion remains relevant to this case.

The conduct of one Kraft supervisor, Peter Michalec,

gives rise to this lawsuit. Michalec became the shipping

supervisor in 2000, and starting in 2005 he also super-

vised the support services department. In 2008, once

Kraft outsourced the shipping department where Peña

and Diaz worked, Michalec became the supervisor of

Pilot Plant Services, an entity comprised of the building

operations group, the sanitation department, and the

support services department. Michalec was in charge

of hiring for the positions Diaz and Peña sought, and

he had the authority to increase Robles’s pay.

The plaintiffs complain that Michalec would send

Flores, Diaz, and Peña outside to scrub parking lots, clean

sewers, and tend to other disliked tasks “as often as

4 No. 10-3073

possible” during the cold winter months, but he did

not assign non-Hispanic employees to similar labors.

They also assert that Michalec followed the three around

during the day, timing their breaks and scrutinizing their

work, without subjecting non-Hispanic workers to the

same treatment. Additionally, the plaintiffs identify

statements made by Michalec over the years that in their

view illustrate his animus against Hispanics. Robles

testified that Michalec said in 1999 that he got his job

because he (Michalec) was white; Michalec called Robles

a “gold-digger” when he asked for a raise; Michalec

said “I’m white and I’m right”; and he yelled, “Get the

hell out of my office. Go die somewhere else,” when

Robles was having a heart attack in 2005. Carlos Casalan,

another former employee, asserts that “on numerous

occasions” Michalec said that he did not like Spanish

people and referred to Hispanics as “dummies” and

“stupid.”

The real trouble, however, surfaced when Diaz and

Peña tried to get different jobs at Kraft around the time

of the outsourcing. Kraft has a posting process to fill

available jobs that usually proceeds as follows. A

manager initiates the search by sending a potential job

posting to the human resources department, which,

after approval, sends the posting to the talent acquisi-

tion department. Talent acquisition puts the posting on

Kraft’s in-house website, distributes it internally on

paper, or takes both actions. On occasion, Kraft also

posts a sign-up sheet to permit interested employees to

indicate their interest in a position.

No. 10-3073 5

In July 2008, Kraft posted a sign-up sheet for a single

senior technician position. Diaz, Peña, and two other

Hispanic employees, along with two African-American

employees, signed up to be considered for the positions.

Peña also sent an application and his resume to human

resources. Shortly after the sign-up sheet was posted,

somebody (nobody knows who) crossed off the names

of the two African-American employees, leaving

only four Hispanic employees in the applicant pool.

Kraft then decided to freeze the hiring for that position.

According to Kraft, the company knew that out-

sourcing was on the horizon and wanted to wait until

the announcement was made so that more employees

could apply for the position. In the plaintiffs’ view, how-

ever, once Michalec saw that only Hispanics were com-

peting for the position, he decided to halt the hiring.

In September 2008, once Kraft’s plan for outsourcing

was known to all, two senior technician and five

sanitation positions became available. Kraft posted a

notice to announce these vacancies, but it did not

permit employees to indicate interest in the positions

by putting their names on a sign-up sheet. Instead,

Michalec created a list of interested employees and hired

from that pool of candidates. Diaz and Peña accuse

Michalec of refusing to let them apply for the senior

technician positions, thereby eliminating the possibility

that they would be hired. Kraft disputes this. It

concedes that Diaz and Peña were not considered for

the technician positions, but it asserts that the two

men simply failed to apply. Diaz and Peña insist that

this is implausible, since only two months earlier they

6 No. 10-3073

both signed up to apply for an almost identical position,

and by September it was apparent that if they did not

acquire another position with Kraft their jobs would be

eliminated as a consequence of the outsourcing. They

maintain that they complained to human resources that

they were being shut out of the application process,

but once they did so Kraft quickly filled at least one of

the positions before the application period ended and

before Diaz and Peña were able to get their names into

the applicant pool.

Kraft ultimately hired Curtis Ward and Robert Meyers,

two non-Hispanics, for the senior technician positions.

Kraft concedes that none of the applicants for the

senior technician positions met all of the qualifications

on the posting, but it says that Ward and Meyers were

the best match for the position because of their strong

mechanical skills. The plaintiffs counter that the

strength of Ward and Meyers’s mechanical skills is ir-

relevant, since their complaint is that they were not

even permitted to apply for the positions.

As for the sanitation positions, both Diaz and Peña were

on the list of applicants compiled by Michalec. Nine

employees applied for the five positions: four Hispanics,

two Caucasians, and two African-Americans. Kraft

says that all of the applicants were sufficiently qualified

for the job, so it hired according to seniority. Based on

that metric, Diaz and Peña were not selected, but two

Hispanic employees with more seniority, including

Betty Flores, were chosen. Diaz and Peña concede that

they were lower on the seniority scale than the employees

No. 10-3073 7

hired, but they assert that they were more qualified and

should have been hired on that basis. They emphasize

that the guidelines set out in Kraft’s internal hiring

policy do not list seniority as a variable in hiring

decisions; Kraft responds that the policy does not

prohibit the company from using seniority as a factor.

In October 2008, Diaz and Peña complained to human

resources and other supervisors that they were not hired

for either of the positions because of their race. That

month, Diaz filed a charge of discrimination with the

EEOC, and Peña followed suit in November.

Betty Flores, who is not a party in this appeal, com-

plained in the proceedings below that, although she

was hired for a sanitation position, Michalec discrim-

inatorily assigned her to a night-shift position. As evi-

dence, she pointed to a conversation she had with

Michalec shortly after he made the hiring decisions.

Flores described the conversation as follows:

I told [Michalec] that I would prefer to remain on

days because I was the first woman that had worked

for sanitation . . . . [A]nd he told me there was

nothing he could do . . . because Matt Simeon[, who

received one of the day-shift positions,] is his best

friend. He’s white just like him, and he had a

family to take care [of].

Flores also said that when she confronted Michalec

about his discrimination against Latinos, he said that

he did not discriminate because Latinos are a majority,

not a minority. Flores does not recall when Michalec

made this remark.

8 No. 10-3073

Robles raises a disparate pay claim. He says that when

he was hired as a senior technician in the support

services department in 2001, he was categorized as a

salary grade 2 employee, even though the job posting

he submitted his application for advertised a salary

grade 3 position. According to Robles, Kraft told him

that once he acquired certain skills, his salary would be

increased to the grade 3 level. He quickly gained the

skills necessary to earn at the higher salary level, but

Kraft never increased his salary. Robles also claims that

Ward and Meyers, the two men hired for the senior

technician positions, are paid more than he is, even

though he is supposed to train them for the job.

Kraft explains that salary grades are tied to specific

positions; for Robles to get paid at a higher rate his posi-

tion would have to be reclassified or he would have

to apply for a vacant grade 3 position. Regrading a posi-

tion, Kraft argues, is uncommon, and no grade 3 posi-

tions have become available since 2005. As for the

claim that Ward and Meyers are paid at higher salary

grades, Kraft says that it has a “redlining policy” that

permits employees who transfer from one position

to another to retain their previous salary, if it is higher,

for two years. It is undisputed that Ward and Meyers

were at higher salary grades before their transfers.

Robles filed a charge with the EEOC in June 2008

claiming that Kraft paid him lower wages than non-

Hispanic employees. This lawsuit followed.

No. 10-3073 9

II

A

The plaintiffs filed suit on November 26, 2008,

asserting violations of their rights under Title VII of the

Civil Rights Act of 1964, 42 U.S.C. §§ 2000 et seq., and 42

U.S.C. § 1981. They pursue only their Title VII claims

on appeal. The district court granted summary judg-

ment for Kraft, and so we review the decision de novo,

taking all facts in the light most favorable to the plain-

tiffs. See Chaney v. Plainfield Healthcare Ctr., 612 F.3d 908,

912 (7th Cir. 2010).

A plaintiff can prove discrimination under Title VII

by using either the direct or the indirect method of proof.

Darchak v. City of Chicago Bd. of Educ., 580 F.3d 622, 630

(7th Cir. 2009). Under the direct method, the plaintiff

must produce either direct or circumstantial evidence

that would permit a jury to infer that discrimination

motivated an adverse employment action. Hasan v. Foley

& Lardner LLP, 552 F.3d 520, 527 (7th Cir. 2008). Direct

evidence is something close to an explicit admission by

the employer that a particular decision was motivated

by discrimination; this type of evidence is rare, but it

“uniquely reveals” the employer’s intent to discriminate.

See Rudin v. Lincoln Land Cmty. Coll., 420 F.3d 712, 720

(7th Cir. 2005). More common is circumstantial evidence,

which “suggests discrimination albeit through a longer

chain of inferences.” Hasan, 552 F.3d at 527 (internal

citation omitted). A plaintiff can survive summary judg-

ment by producing either type of evidence as long as

it creates a triable issue on whether discrimination moti-

10 No. 10-3073

vated the employment action. Our cases point to

three categories of circumstantial evidence: (1) ambig-

uous statements or behavior towards other employees in

the protected group; (2) evidence, statistical or other-

wise, that similarly situated employees outside of the

protected group systematically receive better treatment;

and (3) evidence that the employer offered a pretextual

reason for an adverse employment action. Darchak, 580

F.3d at 631. A plaintiff need not produce evidence in

each category to survive summary judgment. See id.

B

We begin with Diaz and Peña’s claim that Kraft failed

to hire them for either the sanitation or senior technician

positions. They are relying exclusively on the direct

method we have just described. We recognize that each

plaintiff has a discrete claim in relation to each position,

but since the dispositive issue for each is the same—

did ethnic animus against Hispanics motivate Michalec

to hire other employees instead of Diaz and Peña—we

may examine the claims together. The plaintiffs con-

tend that they have produced some evidence that

falls into each category of circumstantial evidence

which, taken together, would permit a jury to find in

their favor.

First, the plaintiffs contend that Michalec exhibited

his bias against Hispanics by assigning Flores, Diaz, and

Peña to disfavored tasks such as scrubbing parking

lots and cleaning sewers outside during the winter.

This raises an inference of discrimination, the plaintiffs

No. 10-3073 11

assert, because Michalec did not assign non-Hispanic

employees to these duties. Based on the record, the district

court concluded that these facts could suggest bias. Yet

the court backed off from this conclusion because Raul

Fernandez, another Hispanic employee, was not assigned

to the same unwanted tasks. The court reasoned that

ultimately the evidence did not support an inference

of discrimination because at least one Hispanic employee

was not discriminated against in the same way.

We reject this line of analysis. Title VII would have

little force if an employer could defeat a claim of discrim-

ination by treating a single member of the protected

class in accordance with the law. Suppose the district

court’s view carried the day: a female employee

suffering from discrimination on the basis of her sex

would have to establish that her employer discriminated

against all women in the workplace to assert a sex dis-

crimination claim. That, sensibly, is not how Title VII

operates. Instead, “[t]he principal focus of the statute is

the protection of the individual employee, rather than

the protection of the minority group as a whole.” Connecti-

cut v. Teal, 457 U.S. 440, 453-54 (1982); City of Los

Angeles, Dep’t of Water and Power v. Manhart, 435 U.S. 702,

708-09 (1978) (recognizing that fairness to the class of

women employees does not excuse discrimination

against an individual female employee). Discrimination

against one Hispanic employee violates the statute, no

matter how well another Hispanic employee is treated.

See Brown v. Henderson, 257 F.3d 246, 252 (2d Cir. 2001).

We agree with the plaintiffs that there is no token excep-

tion to anti-discrimination law. See Teal, 457 U.S. at 455

12 No. 10-3073

(“Congress never intended to give an employer license

to discriminate against some employees on the basis of

race or sex merely because he favorably treats other

members of the employees’ group.”).

The source of the district court’s error may have been

a mistaken decision to import an inverted version of the

“similarly situated employee” factor from the indirect

method of proof established in McDonnell Douglas Corp.

v. Green, 411 U.S. 792 (1973). Under that framework, a

plaintiff can raise the inference of discrimination by

identifying a similarly situated employee outside the

protected class who was treated more favorably by the

employer. See, e.g., Radue v. Kimberly-Clark Corp., 219

F.3d 612 (7th Cir. 2000). There is no “similarly situated

employee” analysis available to the employer to defeat a

plaintiff’s claim. Instead, in an indirect-proof case, to

shift the burden back to the plaintiff the employer

must articulate a non-discriminatory reason to explain

the challenged conduct. One thing is clear under this

framework: the employer cannot satisfy its burden by

identifying a person within the protected class who was

not similarly discriminated against. And in any event,

Diaz and Peña are not even trying to use the burden-

shifting approach. Under the direct method, the fact

that Michalec treated another Hispanic worker well at

most might be a piece of evidence tending to negate

discrimination with respect to Diaz and Peña, but that

is the precise question of intent that a jury must resolve.

See Darchak, 580 F.3d at 632 (observing that when an

employer hires someone from the protected class to fill

the position the plaintiff was not awarded, the jury

No. 10-3073 13

must decide whether discriminatory intent motivated

the hiring decision). We need not decide whether

evidence that Michalec assigned Hispanic workers to

disfavored tasks is enough by itself to enable the

plaintiffs to survive summary judgment, since there is

more.

The plaintiffs also support their claim by reference to

Michalec’s role in the irregular hiring processes for

the sanitation and senior technician positions. In Septem-

ber 2008, it was Michalec who created the list of

candidates for those positions; plaintiffs contend that he

refused to put their names on that list. The court found

that the record supported the plaintiffs’ assertion, but

concluded that this fact would have probative value

only “if [Michalec] did not consider any Hispanics for

the jobs.” For the reasons discussed above, this analysis

is misguided. We hold that the way that Michalec struc-

tured the hiring process for the technician positions

could raise an inference of discrimination. We note,

additionally, that Kraft’s assertion that even if Diaz

and Peña had been considered for the senior technician

positions, they would not have been hired because they

lacked sufficient mechanical skills, is beside the point.

Under the direct method of proof, the plaintiffs are not

required to rebut a defendant’s non-discriminatory

reason for the adverse employment action, as they

must under the indirect method. Kraft may, of course,

present its rationale to a jury to defeat the plaintiffs’

discrimination claim, but it is insufficient to quash it

at summary judgment. Thus, Diaz and Peña’s claim

regarding the senior technician positions should go

forward.

14 No. 10-3073

The district court continued down its mistaken path

when evaluating Diaz and Peña’s contention that

unlawful discrimination lay behind Kraft’s decision not

to hire them for the sanitation positions. The court again

agreed with the plaintiffs that the hiring process

deviated from the norm, but it concluded that the

process did not support an inference of bias because

four Hispanics were considered for the position and at

least one, Flores, was hired. This, too, overlooks the

fact that Diaz and Peña are raising individual disparate

treatment claims, not a broad-based pattern or practice

claim. In addition, the court failed properly to evaluate

the comment Michalec made to Flores, stating that

Matt Simeon received a day-shift sanitation position

because he was “white like Michalec.” As the district

court found, this statement, if credited by the jury, is

direct evidence that Michalec awarded the daytime

position to Simeon instead of Flores based on a racial

preference. On that basis alone, the court denied Kraft’s

motion for summary judgment on Flores’s claim. Taking

the perspective of Diaz and Peña’s cases, the court con-

cluded that the statement was only circumstantial

evidence that could be considered in conjunction with

other evidence to establish Michalec’s discriminatory

intent. As a general matter, that is correct. The problem

this time is that in the end the district court never

returned to consider the relevance of this evidence to

Diaz and Peña’s claim at all.

Instead, the court examined other evidence identified

by the plaintiffs of racially offensive comments made

by Michalec. The district court found that those state-

No. 10-3073 15

ments did not support an inference of bias because

they were not said around the time the hiring decisions

were made. We agree with the court that there must

be something (such as temporal proximity) to link the

racially inflected comments and the adverse employment

action before a jury should be permitted to infer that

discrimination motivated the action. See Darchak, 580

F.3d at 632 (noting “that three to four months between

a remark and an employment action is not so long as to

defeat the inference of causal nexus”). The court also

correctly found that other non-racial but rough state-

ments made by Michalec, such as telling Robles to get

out of his office while Robles was in the throes of a

heart attack, did not support an inference of discrim-

inatory intent.

But the irrelevance of those statements does not

undercut the force of the rest of the evidence, especially

Michalec’s statement (which we assume at this stage of

the case was made) that he awarded a day-shift sanita-

tion position to Simeon because of his race. Not only

could a jury infer that Simeon got a day-shift posi-

tion because he is white, as the district court concluded,

but it could also conclude that he got one of the five

positions for the same reason. There is enough evidence

here to create a question for the trier of fact whether

ethnic bias motivated Michalec’s decision not to hire

Diaz or Peña for the sanitation positions. Because we

conclude that both Diaz and Pena’s failure-to-hire

claims survive summary judgment when evaluated

under the direct method of proof, we need not address

the indirect method.

16 No. 10-3073

C

Robles’s case is another matter. His disparate pay

claim fails under either method of proof. The crux of his

argument is that Kraft hired him to a salary grade 2

position with promises for a promotion to a grade 3

position, but the promotion never materialized. As a

result, Robles contends, he is paid less than deserves. At

the outset, we note that the plaintiffs’ brief does not

clearly state whether Robles is pursuing a disparate pay

or a failure-to-promote claim. In his EEOC charge and

before the district court, Robles complained that Kraft

paid him lower wages than non-Hispanic employees.

We will evaluate Robles’s claim under the disparate

pay framework, but for the sake of completeness we

note that his claim would fare no better if evaluated as

a failure-to-promote claim.

Robles primarily relies on the evidence identified by

Diaz and Peña in support of his claim, but that is a mis-

take. Robles filed his EEOC charge in June 2008,

before Kraft announced the sanitation and senior techni-

cian vacancies. This means that the evidence supporting

an inference of discrimination in relation to the hiring

decisions in October and November of 2008 has no

bearing on Robles’s claim. See Atanus v. Perry, 520 F.3d

662, 671 (7th Cir. 2008) (“The focus under the direct

method of proof is . . . whether the evidence ‘points di-

rectly’ to a discriminatory reason for the employer’s

action.”). Once that evidence is out of the picture, there

is scant material remaining that “points directly” to

an inference that Michalec paid Robles less than other

No. 10-3073 17

workers because of ethnic discrimination. Robles says

that comments Michalec made to him, including calling

him a gold-digger and telling him to leave the office

while he was having a heart attack, evidence ethnic

animosity. We disagree. Calling someone a gold-digger

is offensive, and ordering someone suffering from a

heart attack to leave is utterly inexplicable, but neither

of these incidents establishes ethnic bias. The only re-

maining evidence pertains to the allegation that

Michalec assigned Flores, Diaz, and Peña harsher duties,

cleaning parking lots and sewers, than non-Hispanic

employees. This, standing alone, is insufficient to create

a triable issue on the question whether ethnic discrim-

ination motivated Michalec to pay Robles, who worked

in a different department, less than other employees.

Finally we note that the indirect method would not

resuscitate Robles’s claim. Robles has not identified a

similarly situated employee who received better treat-

ment. See Ford v. Minteq Shapes and Services, Inc., 587

F.3d 845, 848 (7th Cir. 2009). The only plausible can-

didates for that comparison are Ward and Meyers, the

two employees hired as senior technicians in 2008

(instead of Diaz and Peña). The sole fact that supports

a finding that Ward and Meyers are similarly situated

to Robles is that they are currently employed in the

same position. But that is not enough, since the

record shows that Ward and Meyers were getting paid

at higher salary grades because of Kraft’s “redlining

policy,” which permits employees who transfer into

a position graded at a lower salary level to continue to

earn the higher salary for two years. The existence of the

18 No. 10-3073

redlining policy demonstrates that Ward and Meyers

were not “subject to the same standards” and thus were

not similarly situated to Robles. See Radue, 219 F.3d at 618.

Absent a valid comparator, Robles cannot move past

summary judgment under the indirect method of proof.

Therefore, we A FFIRM the judgment of the district

court granting summary judgment on Robles’s claim

and R EVERSE the grant of summary judgment on Diaz

and Peña’s claims and R EMAND for further proceedings.

8-8-11