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08/26/93 ARTHUR YOUNG & COMPANY v. VERNELL M.

August 26, 1993

ARTHUR YOUNG & COMPANY, APPELLANT
v.
VERNELL M. SUTHERLAND, APPELLEE



Appeal from the Superior Court of the District of Columbia; (Hon. Sylvia Bacon, Trial Judge)

Before Ferren, Terry, and Steadman, Associate Judges.

The opinion of the court was delivered by: Terry

TERRY, Associate Judge : Vernell Sutherland sued her former employer, Arthur Young & Company (hereafter "Young" or "Arthur Young"), *fn1 seeking damages for employment discrimination in violation of the District of Columbia Human Rights Act, D.C. Code §§ 1-2501 et seq. (1992) ("DCHRA"), for retaliation against her for pressing her claim of discrimination, also in violation of the DCHRA, and for breach of contract. Young counterclaimed for breach of contract *fn2 and abuse of process. After a lengthy trial, the jury returned a verdict in favor of Sutherland on all three of her claims and on Young's abuse of process counterclaim. It awarded her $175,000 for lost income and $15,000 for "embarrassment, humiliation, and indignity" on the discrimination and retaliation claims, $34,300 on her breach of contract claim, and $75,000 in punitive damages. The jury found for Young on its breach of contract counterclaim and awarded it $57,875 in compensatory damages. Young filed a motion for new trial or, in the alternative, judgment notwithstanding the verdict or remittitur. The trial court denied the motion, and Young noted this appeal. Although this case presents a multitude of difficult issues, we find no reversible error and accordingly affirm the judgment. *fn3

I. THE EVIDENCE AT TRIAL

Arthur Young hired Sutherland in January 1986 as a manager *fn4 to head its Advance Office Systems Group in Houston, Texas. Sutherland's immediate supervisor in Houston was Stephen Greer, a partner in the firm. In April 1986 Greer told Sutherland that he would support her promotion to principal because he felt she was doing the work of a principal. In the same month Greer gave her an "excellent" performance evaluation. Sutherland was not promoted, however, because other partners in the Houston office felt that she had been with the firm for too short a time. Sutherland testified that Greer told her she would in all likelihood be promoted the following year.

In July 1986 Sutherland learned that Young's Office of Strategic Services (OSS) in Reston, Virginia, was forming a new group to provide computer training services to its clients and was seeking someone to manage that group. Sutherland was interested in that position, so she traveled to Reston to be interviewed by David Wilson, the partner in charge of the National Education Systems (NES) program at OSS, and Joseph Camardese, the partner in charge of the Instructional Technology Group (ITG), a unit within NES. Sutherland told both men that she hoped to be promoted to principal the following year. They offered her a position as manager and practice director of ITG, and she accepted the offer, believing that the new job would increase her chances of being promoted to principal and eventually to partner.

As Sutherland began preparing for her move from Texas to the Virginia suburbs of Washington, she became concerned about the higher cost of living in the Washington area. She realized that the proceeds from the sale of her home in Houston would not be sufficient both to pay off the outstanding mortgage and to enable her to make a down payment on a new home in Reston. She therefore asked that her acceptance of the new job be made contingent upon Young's giving her a short-term "bridge" loan to cover the difference. Young had a policy of making such loans to its employees and agreed to lend her $113,000. On October 30, 1986, Sutherland executed a promissory note for that amount, to be secured by a second mortgage on seventy-five acres of land that she owned in New Hampshire and by a second deed of trust on the home in Reston. The loan agreement provided that the loan would mature on either the date of sale of the New Hampshire property *fn5 or March 17, 1987, whichever occurred earlier, and would begin to accrue interest only if it remained unpaid after the maturity date.

In September 1986 Sutherland began working at ITG, where her immediate supervisor was Mr. Camardese. *fn6 Later that year the ITG office moved to the District of Columbia. In early February 1987 Sutherland approached Camardese about her chances of being promoted to principal in April. He told her that, because of the office's poor financial performance, no one would receive a promotion that year and that, in fact, he and Mr. Wilson would both have to take a salary cut. *fn7 Sutherland then went to Wilson to discuss her possible promotion. Wilson told her that he could not recommend her for a promotion based on her performance to date, but that she was free to seek support from other Young partners. Although she realized that her chances for a promotion without Wilson's backing were slim, she nevertheless solicited support from other partners with whom she had worked. The evaluations she received in her bid for a promotion were mixed.

At about the same time, Sutherland began to have problems working with Mr. Camardese. She believed that he was not providing her with sufficient support in her efforts to obtain equipment and training for her staff and that his inaction was significantly hampering her group's success and, consequently, her own as well. She met with Mr. Wilson's supervisor, Al Roberts, in an effort to obtain better support from both Wilson and Camardese. As a result of this meeting, Sutherland began reporting directly to Wilson rather than Camardese.

The theory underlying Sutherland's discrimination claim was that Arthur Young had discriminated against her because she was a woman. She introduced evidence which suggested that Young discriminated generally against women in its Reston and Washington offices. This evidence included proof of some patently sexist comments by both Wilson and Camardese. For example, Sutherland testified that Camardese denied overtime payments to one of her female staff members because she "made enough for a woman." There was also evidence that Camardese denied the same staff member's request for meal reimbursements because "she should have been at home cooking." Sutherland testified in addition that Camardese told her she should be "meek and mild" if she wanted to get ahead in the firm. She said that Wilson told her that she was being "emotional" for protesting the treatment given to her and her staff, and that the firm was having the "same problems with women partners that we used to have with blacks." Concerning the only female principal in the Reston office, Wilson said that "she made a lot of money for a woman." Sutherland also stated that at a going-away party for a male employee there was a cake in the shape of a scantily clad woman, and that the employee made "very derogatory" comments about women while cutting the cake even though there were several women present. *fn8

Meanwhile, on March 17, 1987, the loan matured. The New Hampshire property had not yet been sold, and Sutherland had not delivered the promised second deed of trust on her Reston home. The evidence was in dispute as to what Sutherland and Wilson decided to do at this point. Sutherland testified that Wilson agreed, on behalf of Arthur Young, to extend the due date for one year, until March 17, 1988, and to refrain from any effort to collect on the loan during that year. Wilson, on the other hand, testified that he asked Sutherland to begin making payments on the loan and told her it would have to be fully repaid within twelve months. No agreement about the repayment of the loan was ever reduced to writing, and Sutherland never made any payments on the loan.

On April 9, 1987, Sutherland signed a second deed of trust on her Reston home. Her husband, however, refused to sign it, making it unenforceable. On April 16 Mr. Wilson asked Mrs. Sutherland to have her husband sign it. She responded with a letter on April 28, stating that her husband would not sign the deed of trust because it allowed Young to foreclose on the home in the event of a default on the loan, contrary to her husband's understanding that Young had agreed not to foreclose. *fn9 In the same letter Mrs. Sutherland wrote that her husband thought Young's treatment of them under these circumstances was "quite likely discriminatory."

On April 28 Wilson and Camardese conducted Sutherland's annual performance review. The evaluation form, which Camardese filled out, listed eleven categories of job skills and allowed performance in each category to be rated "Outstanding," "Competent," "Improvement needed," or "Unsatisfactory." Camardese's evaluation of Sutherland found "Improvement Needed" in three of the eleven categories *fn11 and ranked her performance as falling between "Improvement Needed" and "Competent" in two other categories." He deemed her performance "Unsatisfactory" in one category, *fn12 "Competent" in four categories, *fn13 and somewhere between "Competent" and "Outstanding" in the remaining category. *fn14 Sutherland believed, and testified, that evaluations with "Improvement Needed" ratings were reserved for employees "on their way out."

On May 4, less than a week later, Wilson told Sutherland that the whole office was moving back to Reston, where it would be restructured, and that her group would become part of a larger group that he would lead. Mr. Camardese in turn would become the head of NES, which meant that everyone in Sutherland's group would then be accountable to Camardese. Sutherland testified that, because of this restructuring and the return of Camardese to a position of authority over her office, she felt "constructively discharged" by Arthur Young that day.

Sutherland submitted a letter of resignation two weeks later, on May 18, 1987. On May 20 she met with Mr. Wilson to discuss her resignation. Wilson testified that he did not ask her then to stay on at the firm because he "had been burned enough" and was tired of quarreling with her about getting her husband to sign the deed of trust. Sutherland and Wilson agreed that their attorneys would work out the payment terms of the note and that they would discuss the matter again later in the week. On May 21, however, Sutherland's attorneys sent a letter to the chairman of Arthur Young in New York alleging that Sutherland was the victim of sex discrimination. The following day, May 22, Wilson sent Sutherland a letter demanding that the loan be repaid in full by June 2, eleven days later. *fn15 Wilson, Sutherland, and their attorneys conferred by telephone on May 26 regarding repayment of the loan. Significantly, Wilson testified that it was during this conference call that he first became aware of Sutherland's claim of sex discrimination, and that he had not seen the May 21 letter sent by Sutherland's counsel to Young's chairman until May 27, the day after the phone call.

Sutherland filed this suit against Arthur Young on May 28. In her complaint she alleged that she had been denied a promotion as a result of unlawful sex discrimination and that Young had illegally retaliated against her complaints of discrimination by demanding immediate repayment of the loan. She also alleged that Young's demand for immediate repayment constituted a breach of Young's oral agreement to extend the payment term of the loan for a year, from March 1987 to March 1988.

When Sutherland did not tender payment after the demand letter, Young initiated foreclosure proceedings against the New Hampshire property on June 15, 1987. *fn16 Sutherland filed a petition in the New Hampshire court to enjoin the foreclosure sale, arguing both that Young had agreed to extend the time for repayment and that the foreclosure suit had been brought in retaliation for her filing of this action in the District of Columbia. At a hearing in New Hampshire, Sutherland's attorney argued that Young had agreed not to seek foreclosure and introduced into evidence, over Young's objection, a copy of the complaint in the instant case. Sutherland herself took the stand and began to testify about the circumstances surrounding her departure from employment at Young. Young's counsel objected, however, and the court, saying that it was "not going to try the discrimination suit here," sustained the objection. Sutherland later testified that she resigned after it became clear that Young was not going to promote her and no longer wanted her at the firm. She said that Young demanded payment of the note in full only a few days after she resigned, even though Mr. Wilson, before demanding such payment, had told her that Young would not foreclose but would wait until she sold the property before seeking payment. Sutherland's attorney argued in summation that the foreclosure should be enjoined because Young had agreed not to foreclose on the property.

The New Hampshire court issued an order on August 10, 1987, denying Sutherland's petition. The order specifically noted that Sutherland was claiming that Young was seeking foreclosure in retaliation for her bringing the instant suit against it and that Young had breached an agreement not to foreclose on the property. The court nonetheless found that Sutherland was in default and ordered foreclosure. It did, however, enjoin Young from conducting a foreclosure sale before September 17, 1987, because "Justice requires" that Sutherland be given an opportunity to dispose of the property on her own. Sutherland noted an appeal from this decision, but the New Hampshire Supreme Court declined to consider the appeal. Sutherland ultimately sold the New Hampshire property in July 1988 for $125,000. The proceeds of that sale were used, in part, to repay $66,300.76 of the loan. The remaining balance of the loan, however, was not repaid before trial.

At trial Sutherland maintained that Young refused to promote her because she was a woman, that the discriminatory working conditions in her office made her job intolerable, that as a result she was constructively discharged, and that when she confronted Young with its discriminatory treatment of her, it retaliated by declaring in default the loan it had previously agreed to give her additional time to repay. She introduced statistical evidence suggesting that Young discriminated generally against women at its offices both in Reston and in Washington. She presented evidence, summarized at page 5, supra, that both Wilson and Camardese made sexist comments and tolerated sexist conduct and remarks in the workplace by other male employees. She also documented the events relating to Young's efforts to foreclose on her New Hampshire property and her Reston home after she had written a letter to Young's chairman charging that she had been discriminated against by Wilson and Camardese.

The jury was persuaded by Sutherland's proof. It found that she had been discriminatorily denied a promotion, that she had been constructively discharged, and that Young's efforts to foreclose on the New Hampshire and Virginia properties were retaliatory. The jury awarded Sutherland $175,000 for lost income and $15,000 for "embarrassment, humiliation, and indignity" on the discrimination and retaliation claims, $34,300 for Young's breach of the oral agreement to give her an additional year to repay the loan, and $75,000 in punitive damages. The jury also found, however, that Sutherland had breached the loan agreement by failing to repay the loan, and awarded Young damages of $57,875, the amount of the unpaid loan balance plus accrued interest.

II. THE DISCRIMINATION AND RETALIATION CLAIMS

The essence of Sutherland's discrimination and retaliation claims was that Young failed to promote her because she was a woman, and that after she complained about this discriminatory treatment, Young retaliated by declaring the loan in default and pursuing its legal remedies against the collateral. It is beyond dispute that such acts, if proven by a preponderance of the evidence to be discriminatorily motivated, violate District of Columbia law. The DCHRA proscribes discriminatory employment practices based on an employee's "race, color, religion, national origin, sex, age, marital status, personal appearance, sexual orientation, family responsibilities, physical handicap, matriculation, or political affiliation . . . ." D.C. Code § 1-2512 (a) (1992); see generally RAP, Inc. v. District of Columbia Commission on Human Rights, 485 A.2d 173(D.C. 1984). The statute specifically prohibits firing or otherwise "discriminating against any individual, with respect to compensation, terms, conditions, or privileges of employment, including promotion . . . ." D.C. Code § 1-2512 (a)(1). In addition, the statute makes it unlawful "to coerce, threaten, retaliate against, or interfere with any person in the exercise or enjoyment of . . . any right granted or protected under this chapter." D.C. Code § 1-2525 (a) (1992); see, e.g., Passer v. American Chemical Society, 290 U.S. App. D.C. 156, 166, 935 F.2d 322, 332 (1991); Ravinskas v. Karalekas, 741 F. Supp. 978, 980 (D.D.C. 1990).

A. The discrimination claim

Proof of discrimination in violation of the DCHRA proceeds in three steps. First, the employee must make a prima facie showing of discrimination by a preponderance of the evidence. E.g., United Planning Organization v. District of Columbia Commission on Human Rights, 530 A.2d 674, 676-677 (D.C. 1987); Atlantic Richfield Co. v. District of Columbia Commission on Human Rights, 515 A.2d 1095, 1099 (D.C. 1986); RAP, Inc. v. District of Columbia Commission on Human Rights, supra, 485 A.2d at 176-177. Once that has been done, a rebuttable presumption arises that the employer's conduct amounted to unlawful discrimination. E.g., Shaw Project Area Committee v. District of Columbia Commission on Human Rights, 500 A.2d 251, 254 (D.C. 1985) (citing cases). The burden then shifts to the employer to rebut this presumption "by articulating some legitimate, nondiscriminatory reason for the employment action at issue." Atlantic Richfield Co., supra, 515 A.2d at 1099(citations omitted); see generally St. Mary's Honor Center v. Hicks, 125 L. Ed. 2d 407, 113 S. Ct. 2742, (1993) (describing shift in burden of proof under corresponding federal statute). *fn17 Finally, if the employer has articulated some legitimate, non-discriminatory reason for the disputed conduct, the burden shifts back to the employee to prove, again by a preponderance of the evidence, that the employer's stated justification for its action "was not its true reason but was in fact merely a pretext" to disguise a discriminatory practice. Atlantic Richfield Co., supra, 515 A.2d at 1100(citations omitted).

A prima facie case of discrimination in the denial of a promotion normally consists of proof (1) that the plaintiff was a member of a protected class, (2) that he or she was qualified for the promotion, (3) that he or she was rejected upon seeking the promotion, and (4) that a substantial factor in that rejection was the plaintiff's membership in the protected class. See United Planning Organization, supra, 530 A.2d at 677n.3; Thompson v. International Ass'n of Machinists, 614 F. Supp. 1002, 1011-1012 (D.D.C. 1985) (citing McDonnell Douglas Corp. v. Green, 411 U.S. 792, 36 L. Ed. 2d 668, 93 S. Ct. 1817(1973)). In addition, since Sutherland was not fired but resigned from her position, to establish a prima facie case she also had to establish that she was constructively discharged by Arthur Young. E.g., Katradis v. Dav-El of Washington, D.C., 270 U.S. App. D.C. 23, 26, 846 F.2d 1482, 1485 (1988). The reason for this additional requirement is that, absent constructive discharge, a worker suffering from discrimination in the workplace has a duty to stay on the job and mitigate damages. Hopkins v. Price Waterhouse, 263 U.S. App. D.C. 321, 336, 825 F.2d 458, 473 (1987), rev'd in part on other grounds, 490 U.S. 228, 109 S. Ct. 1775, 104 L. Ed. 2d 268(1989), on remand, 287 U.S. App. D.C. 173, 920 F.2d 967(1990); Clark v. Marsh, 214 U.S. App. D.C. 350, 355, 665 F.2d 1168, 1173 (1981); Bourque v. Powell Electrical Mfg. Co., 617 F.2d 61, 66 (5th Cir. 1980); Halbrook v. Reichhold Chemicals, Inc., 735 F. Supp. 121, 125 (S.D.N.Y. 1990) (citing cases).

"A constructive discharge occurs when the employer deliberately makes working conditions intolerable and drives the employee into an involuntary quit." Atlantic Richfield Co., supra, 515 A.2d at 1101. There is, however, "no requirement that the employer intend to force the employee to leave." Id. (citations omitted). Working conditions rise to the requisite level of intolerableness if they "would lead a reasonable person to resign." Id.; accord, e.g., Hopkins v. Price Waterhouse, supra, 263 U.S. App. D.C. at 335, 825 F.2d at 472; *fn18 Clark, supra, 214 U.S. App. D.C. at 355, 665 F.2d at 1173; Parrett v. City of Connersville, 737 F.2d 690, 694 (7th Cir. 1984); Goss v. Exxon Office Systems Co., 747 F.2d 885, 888 (3d Cir. 1984); Pena v. Brattleboro Retreat, 702 F.2d 322, 325 (2d Cir. 1983); Bourque, supra, 617 F.2d at 65; Rosado v. Garcia Santiago, 562 F.2d 114, 119 (1st Cir. 1977). Thus proof of constructive discharge does not require evidence that the employer intended to force the employee to quit. Hopkins, supra, 263 U.S. App. D.C. at 335, 825 F.2d at 472. Nor is there any requirement that an employee remain in an "intolerable workplace" for a particular period of time. Atlantic Richfield Co., supra, 515 A.2d at 1101(citing cases).

Whether working conditions are so intolerable that a reasonable person is forced to resign, as Sutherland asserted here, is a question for the trier of fact. E.g., Simpson v. Federal Mine Safety & Health Review Commission, 268 U.S. App. D.C. 457, 467, 842 F.2d 453, 463 (1988). However, case law demonstrates that "intolerable conditions" sufficient to support a finding of constructive discharge commonly, though not invariably, fall into two broad categories. The first involves working conditions in which the employee is subjected to "a continuous barrage of derogatory comments about . . . appearance, behavior, and morality." Atlantic Richfield, supra, 515 A.2d at 1101. *fn19 The second involves working conditions in which the employee "reasonably expected . . . opportunities for advancement," but the employer's discriminatory actions or omissions "essentially locked into a position from which she could apparently obtain no relief." Clark, supra, 214 U.S. App. D.C. at 356, 665 F.2d at 1174; see Hopkins, supra, 263 U.S. App. D.C. at 335-336, 825 F.2d at 472-473(finding a constructive discharge where the denial of a promotion was reasonably viewed as "a career-ending action"). At trial Sutherland asserted that the evidence supported a finding of constructive discharge under either of these two theories. The jury found that she had in fact been constructively discharged and awarded her $175,000 in damages for lost income, representing the difference between what she would have earned at Young had she stayed on and been promoted and what she actually earned after resigning. *fn20

Young argues on appeal that the evidence was insufficient to support Sutherland's claim of constructive discharge and that the trial court improperly instructed the jury on the law of constructive ...


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