Michael Hiatt v. Rockwell International Corporation

WILL, District Judge,

concurring in part and dissenting in part.

I concur in the reversal of the jury’s award of punitive damages in this case. The evidence does not show malice, oppression or fraud by the company with respect to Hiatt and his worker’s ’compensation claims.

I do not agree, however, that the jury could not reasonably have concluded from all the evidence that Hiatt’s worker’s compensation claims were the underlying motive for his discharge and the false shoe purchase receipt grounds merely a pretext justification for it.

There was considerable evidence that various Rockwell officials were unhappy about Hiatt’s three worker’s compensation claims. His supervisor Frank Francyzk, who was also Hiatt’s principal company contact on such claims, at one point initiated surveillance over Hiatt’s daily activities to see if he was malingering or exaggerating his injuries and could in fact return to work. When Hiatt filed his third claim for reinjuring his left knee in October 1987, the company denied the claim on the ground that he had failed to provide necessary medical documentation. When he did, it offered to cover his injuries but only under its sickness and health policy, which Hiatt declined on the ground that he was entitled to full worker’s compensation for his injury.

Rockwell also contested Hiatt’s worker’s compensation claim which related to the carpel tunnel syndrome that had developed from his knee injuries. That claim was still pending at the time of his discharge and was only settled by the company after the discharge which is the subject of this suit.

The company does not contend that Hiatt was not injured in the course of his employment nor that his claims were false. It does deny that they were a cause of his discharge. It contends that his filing of a claim for reimbursement for the purchase price of a pair of safety work shoes to which he was entitled under the union contract justified his discharge because he submitted a false receipt as proof of his purchase.

What happened is that, when a Rockwell nurse reviewed Hiatt’s request for reimbursement, she became suspicious of the receipt, and took it to Francyzk, who had earlier ordered the surveillance. He turned it over to Sid Williams, Rockwell’s industrial relations supervisor, who called in Hiatt to speak about the receipt. Francyzk, a union steward, Sherrie Meyer, and Hiatt’s foreman, Bobbie Harbison, were also present at this meeting, which took place on October 23, 1989. Williams asked Hiatt about the receipt and if he had altered it. Hiatt denied that he had. Williams said he didn’t believe him and *773 put him on 24-hour notice subject to termination and scheduled another meeting for the next afternoon, October 24.

After the meeting, Hiatt went home and came back with the pair of shoes he said he had purchased, showing them to Francyzk who refused to discuss the matter with him but said it would be discussed at the afternoon meeting the next day. Hiatt then went home again, searched among his papers and found what he said was the real receipt for the shoes.

The next morning he brought the shoes and the receipt to Williams’ office and tried to talk to him, explaining that he had found the actual receipt and showing him the shoes. Williams, like Francyzk, refused to discuss the matter and told him that the afternoon meeting was for that purpose.

At that meeting, which was more formal and attended by more Rockwell representatives including Williams, Roger O’Neill, Rockwell’s personnel manager, Francyzk, and other company representatives, as well as union representatives, Hiatt produced the shoes, a shoe box and what he said was the correct receipt, admitting that the first receipt he had submitted was false but stating that he had made a legitimate purchase. Francyzk, who in the meantime had undertaken to investigate Hiatt’s claim and who had contacted the shoe stores involved and had gathered whatever records they had, stated that the store which had issued the “real” receipt could not confirm that Hiatt had bought the shoes there. The shoes, in addition, contained no markings which would establish from which store they were bought. At the conclusion of this meeting, O’Neill and Williams announced that Hiatt was terminated for violating plant rule number 2, which prohibited falsifying personnel or other records.

A third meeting was held on October 26, with representatives of the company and the union present, at which the company was urged under all the circumstances not to discharge Hiatt over so relatively insignificant a claim as one for reimbursement for the price of a pair of shoes when there was evidence that he had in fact purchased them. The company representatives refused.

The jury which heard the evidence and was properly instructed found that a cause of Hiatt’s termination was retaliation by the company for his worker’s compensation claims which it was disputing and about which it had even initiated surveillance, and that the falsification ground with respect to the reimbursement for the safety work shoes was pretextual.

The majority concedes that under Illinois law a motion to set aside a jury’s verdict will be granted only if all the evidence when viewed most favorably for the nonmoving party so overwhelmingly favors the movant that no contrary verdict reasonably could stand. Pedrick v. Peoria & E.R.R. Co., 37 Ill.2d 494 , 229 N.E.2d 504, 513-14 (1967). This Court has held that a jury’s verdict should be set aside only when the evidence supports only one reasonable conclusion and that in defendant’s favor. Horton v. Miller Chem. Co., 776 F.2d 1351, 1355 (7th Cir.1985), ce rt. denied, 475 U.S. 1122 , 106 S.Ct. 1641 , 90 L.Ed.2d 186 (1986). Both jurisdictions in effect apply the clearly erroneous standard.

Cases involving a claim that discharge from employment had a causal connection to the employee’s filing of a worker’s compensation claim, like many other cases involving the state of mind of one or more persons, almost always depend on circumstantial evidence. Employers seldom state that they are discharging an employee because of filing worker’s compensation claims or because of race, sex, age, etc. Nor do criminals announce their intent.

Here there is much circumstantial evidence from which the jury could reasonably have concluded that there was a causal connection between the worker’s compensation claims and the discharge. The company was contesting at least two of them. Francyzk, Hiatt’s supervisor, was fully aware of Hiatt’s several worker’s compensation claims and had even initiated surveillance of Hiatt’s daily activities to obtain evidence with respect to the claims. Francyzk took the questioned receipt to Williams, who acknowledged that he may have known about Hiatt’s worker’s compensation claims although he was un *774 aware of the details. Franeyzk participated in all three of the termination meetings, took notes and prepared a transcript of the proceedings. He also investigated Hiatt’s claim for reimbursement for the pair of safety shoes, called on the two shoe stores which had issued the receipts, gathered what records they had and reported that they could not confirm Hiatt’s purchase from the receipts. The jury might well have believed that Franeyzk, who was the company’s prime contact with Hiatt on the worker’s compensation claims, was endeavoring to build a case for discharge.

That inference would be substantiated by the manner in which Franeyzk and Williams treated Hiatt’s efforts to correct his mistake in submitting a false receipt by showing them another receipt, the shoes and a shoe box. Neither would discuss the matter with him, insisting that it could be discussed only at a termination hearing. At that hearing and a subsequent one the next day, notwithstanding that Hiatt presented what he asserted was the correct receipt, the shoes and a shoe box, the company representatives ordered his discharge over his submission of a false receipt for the purchase price of a pair of shoes.

The majority says there is no direct evidence that Franeyzk discussed Hiatt’s pending worker’s compensation claims with either Williams or O’Neill at any time before or during the four or five days he was talking to them and attending meetings with them. While it is true that there is no direct evidence to that effect, the jury could well have believed that the subject came up in their several conversations before, during or after the meetings given Francyzk’s and the company’s substantial opposition to Hiatt’s claims.

That inference is further warranted by evidence that O’Neill, as personnel manager, regularly discussed worker’s compensation matters with Franeyzk and was undoubtedly aware that the company was opposing Hiatt’s claims. It is a particularly permissible inference given the other facts: the refusal to discuss the matter, the rejection of Hiatt’s evidence and explanation, and the magnification of a dispute over reimbursement for the price of a pair of shoes into grounds for discharge.

The majority in its footnote 6 states that I agree with its presentation of the facts and, therefore, am in error under Illinois law in disagreeing with its conclusion. With all due respect, that is a misunderstanding. The majority, for example, states that there “is no evidence that Franeyzk discussed Hiatt’s pending claims with either Williams or O’Neill at any point....” While there is no direct evidence to that effect, there certainly is substantial circumstantial evidence to support the conclusion that he did and the jury apparently so found. Contrary to the majority assertion in its footnote, Illinois law already recognizes that the nexus between worker’s compensation claims and discharge almost always must be established by circumstantial evidence since employers rarely state that they are discharging an employee on illegal grounds. Horton, 776 F.2d at 1355 (“The non-movant ‘has the right to prove ... [his case] by circumstantial evidence, which consists of proof of facts and circumstances from which the jury may infer other connected facts, reasonably following from the proven facts and circumstances.’ ”) (quoting Sandburg-Schiller v. Rosello, 119 Ill.App.3d 318 , 74 Ill.Dec. 690, 702 , 456 N.E.2d 192, 204 (1983)). Moreover, not only do I not agree with the majority’s statement of the evidence, but I disagree with its omission of any reference to important facts such as those which suggest that O’Neill regularly discussed worker’s compensation matters with Franeyzk and knew that the company was unhappy about Hiatt’s worker’s compensation claims.

In addition to all of the foregoing evidence from which the jury could reasonably infer retaliation was the evidence that Hiatt received disparate treatment, that other Rockwell employees had engaged in much more serious misconduct and were not fired or were reinstated. The majority seeks to distinguish three of Hiatt’s examples on the anomalous ground that, like him, they had all filed worker’s compensation claims prior to their various misdeeds and were not fired, which showed, the majority says, that Rockwell did not discriminate against such claim *775 ants. But the majority misses the point. Hiatt doesn’t contend, and need not prove, that Rockwell discriminated against all worker’s compensation claimants. He asserts only that, because they didn’t fire other employees — whether claimants or not — for more serious misdeeds, his discharge was disparate treatment.

The majority, for some reason I don’t understand, believes that only more favorable treatment for non-worker’s compensation filers would be relevant to show that Hiatt received disparate treatment. It seems to me to be even stronger evidence of disparate treatment of Hiatt that other worker’s compensation claimants who were guilty of more serious violations of company rules were either not fired or were reinstated. The majority’s insistence that only the treatment of non-filers is relevant but that the more lenient treatment of persons who had filed claims similar to Hiatt is not is, to me, clearly illogical and inconsistent with the decided eases.

The evidence which the majority would require Hiatt to produce — more favorable treatment of non-filers — clearly plays an important role in the burden-shifting analysis articulated by the Court in McDonnell Douglas Corp. v. Green, 411 U.S. 792 , 93 S.Ct. 1817 , 36 L.Ed.2d 668 (1973). In McDonnell Douglas, the Court found evidence that employees outside the protected class who engaged in acts of comparable seriousness were nonetheless retained or rehired to be “especially relevant.” Id. at 804 , 93 S.Ct. at 1825 . However, the Court also explained that “[ojther evidence that may be relevant to any showing of pretext includes facts as to the [employer’s] treatment of [employee] during his prior term of employment; [employer’s] reaction, if any, to [employee’s] legitimate [protected] activities; and [employer’s] general policy and practice with respect to [protected class] employment.” Id. at 804-05 , 93 S.Ct. at 1825 . As explained above, I believe that Hiatt has offered more than sufficient evidence concerning Rockwell’s past treatment of him and his worker’s compensation claims to support a jury verdict in his favor in this case.

This “other evidence” is clearly relevant to a consideration of pretext and is crucial to a fair adjudication of retaliatory discharge claims. Under the majority’s rule, employers who selectively discharge only those worker’s compensation claimants who file the most vexatious claims would never be discouraged because, as long as not all claimants were discharged or non-filers were generally not treated more favorably as a class, no retaliatory discharge claim could succeed. In an action for retaliatory discharge, Hiatt is not required to demonstrate that the defendant discriminated against all worker’s compensation claimants at the plant; rather, he must show that he was discharged for the exercise of his rights under the Illinois Workman’s Compensation Act. Horton, 776 F.2d at 1356 (“to show retaliatory discharge, the plaintiff must set forth sufficient facts from which it can be inferred that (1) he was discharged ... and (2) the employer’s motive in discharging him ... was to deter him from exercising his rights under the Act or to interfere with the exercise of those rights”).

The majority concludes that, while Rockwell “may be guilty of an overly harsh punishment, that was not the issue in this case.” While it may not be the ultimate issue, it certainly is not irrelevant. The “overly harsh punishment,” firing an employee over mistakenly filing a false receipt in seeking reimbursement to which he was entitled for the purchase price of a pair of work shoes, and then refusing to reconsider when he produced the shoes, the box in which they allegedly came and another receipt reflecting their purchase are certainly evidence which a jury may consider in determining if an employer’s explanation of a discharge is pretex-tual and the causation is really something else, here displeasure over Hiatt’s several worker’s compensation claims, his refusal to settle one claim under the company’s health and accident plan and the pendency of the carpel tunnel syndrome claim which was not settled until after he was fired. The fact that the punishment was excessive and did not fit the alleged crime is certainly evidence that the crime may not in fact have been the reason for the punishment.

*776 The jury and the judge who heard all the witnesses and observed all the evidence obviously concluded that the causation for Rockwell firing Hiatt was his worker’s compensation claim history and not the relatively insignificant shoe reimbursement claim episode. The record, in my opinion, clearly warrants that conclusion. It certainly cannot be said to be so devoid of supporting evidence, albeit circumstantial, that the only reasonable conclusion requires a directed verdict for the defendant or an order setting aside the jury’s verdict.

As the majority recognizes, Illinois law requires a significantly higher degree of culpability for punitive than for compensatory damages. The Illinois cases also hold that whether the facts of a particular case justify the imposition of punitive damages is properly a question of law.

The award of compensatory damages, on the other hand, is a question of fact for the jury and may properly be set aside in a j.n.o.v. only if, viewing the evidence in the light most favorable for the plaintiff, it overwhelmingly favors the defendant and supports only one reasonable conclusion and that in the defendant’s favor, in other words, that the jury’s verdict is clearly erroneous. Pedrick, 229 N.E.2d at 513-14 ; Horton, 776 F.2d at 1355 .

Applying these principles, I concur in the setting aside of the award of punitive damages but strongly oppose substituting our evaluation of the evidence for that of the jury and the trial judge who heard and saw it. I would, therefore, affirm the award of compensatory damages.