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Josey v. John R. Hollingsworth Corp.

argued: January 4, 1993.

TED JOSEY, APPELLANT
v.
JOHN R. HOLLINGSWORTH CORPORATION, APPELLEE



ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA. D.C. Civil No. 91-4606

Before: Mansmann and Nygaard, Circuit Judges and Rodriguez, District Judge*fn*

Author: Rodriguez

Opinion OF THE COURT

RODRIGUEZ, District Judge

Ted Josey filed this suit against his former employer, the John R. Hollingsworth Corporation, alleging he was discharged because of his race in violation of Title VII of the Civil Rights Act of 1964. 28 U.S.C. § 2000e-2(a). Josey is appealing an order of the district court granting summary judgment for Hollingsworth.

I.

Josey, who is African American, began working for Hollingsworth in 1976. He was promoted to supervisor of the company's second shift in 1978 because of his reputation as an eager and intelligent employee, and remained in that position until elevated to Assistant Manager of Quality Assurance in 1987.

Hollingsworth, which produces electrical equipment for the military, started as a family-owned business. In 1982, the Hollingsworth family selected 13 "key and trusted" employees, all caucasian, and sold them the company. Josey was not offered the opportunity to buy shares at that time, nor were twelve caucasian employees who had been with the company longer than he. The company requires that shareholders wishing to dispose of their shares sell them back to the company. The shares are not resold once redeemed.

In December 1986, Josey became interested in replacing Robert Kirby, the Manager of Quality Assurance, who had made known his plans to retire. Kirby was one of the original 13 shareholders. Ray White, a shareholder and Vice President of Hollingsworth, promoted Josey to Assistant Manager of Quality Assurance in the spring of 1987. The vice president instructed Kirby to train Josey to succeed him in the manager's position. Josey alleges he was the only African American manager to work in an office position at Hollingsworth in its 30-year history.

Josey's promotion caused resentment among some of the company's managers and employees. Kirby appeared displeased with the move, and refused to train Josey. Les Horvath, a shareholder who had sought to replace Kirby, was also unhappy with the company's decision. The record indicates that Kirby thought Horvath should be his successor.

Josey believed that Kirby's ill will toward him was racially motivated. Before the promotion, Kirby remarked to him that one's job could not be significant if it could be filled by a black person. Once Josey was promoted, Kirby told employees that he had Josey cutting out paper dolls as part of his training. Vice President White, who acknowledged that Kirby would be a problem during the transition, imposed a training schedule on him. Kirby followed the schedule for only two weeks.

Hollingsworth employees indicated to Josey that they believed he was promoted only because he was African American. Josey received anonymous notes in his office which said, "Nigger get out," and "Can't you read nigger?" In February 1988, Vice President White terminated a manager suspected of leaving the notes, but cited economic concerns as the basis for the dismissal.

That month, Josey, frustrated with the treatment he was receiving, requested an unpaid leave of absence until Kirby retired. Kirby originally planned to retire in March 1988. Vice President White denied Josey's request. Josey asserts that in March or April 1988, the company's board of directors adopted a policy of giving job preferences to shareholder employees when layoffs occur. The company has neither indicated the date it adopted this policy, nor refuted Josey's contention that it was in March or April 1988. The record indicates that only seven of the original 13 shareholders still held shares in 1988 -- three of whom were Kirby, Horvath, and Vice President White.

In May 1988, Kirby announced he was postponing his retirement indefinitely. That month, Vice President White discharged Josey citing economic concerns, and stating there was no need to retain Josey since Kirby was staying indefinitely. He claimed there was no other position in which the company could use Josey at the salary it was paying him. Josey found other employment after Hollingsworth terminated him.

When Josey was dismissed, he learned that the company planned to replace him as Assistant Manager of Quality Assurance with Horvath, despite the fact Horvath was paid a higher salary. Josey's successor as second shift supervisor, who had less experience than Josey, but is caucasian, remained with the company even after the elimination of the second shift.

In the summer of 1988, Kirby announced he would retire at the end of the year. In August 1988, the company designated Horvath, whose engineering position was being eliminated, as Kirby's replacement. Kirby retired on December 31, 1988, and Horvath took his position. Horvath retired in early 1991.

At one time, Hollingsworth employed as many as 450 people, but by 1988 had reduced its work force to approximately 175 employees. The company hired new employees after Josey's dismissal, but did not recall Josey. The company maintains that Josey never contacted it about employment after his termination. Hollingsworth states that its policy is to hire only unemployed people to fill open positions because the future of the company is uncertain.

II.

Josey filed a charge with the Equal Employment Opportunity Commission (EEOC) which was dismissed on December 11, 1989. The EEOC denied the claim on review, and issued a right to sue letter on May 10, 1991. Josey filed this Title VII action on July 18, 1991.

The district court granted summary judgment for Hollingsworth on April 9, 1992. It found that Josey failed to meet his evidentiary burden once the company proffered a legitimate reason for his dismissal. The court analyzed several issues in the case and concluded that there were no material questions of fact which should be resolved at trial.

First, the district court stated that it was undisputed that Vice President White was the sole decision-maker, and, relying heavily on Josey's deposition testimony, found that White acted without racial prejudice. It therefore determined that the company's explanation that it dismissed Josey for economic reasons was not merely pretextual.

Second, the court accepted Hollingsworth's explanation that it adopted its policy to retain shareholders to protect those with a direct financial interest in the company. It did not determine when the policy was adopted or who was responsible for its adoption. Third, the district court found that Kirby extended his retirement date indefinitely due to financial concerns caused by his wife's illness. Fourth, the court decided that the people who subjected Josey to racially derogatory remarks and notes were not involved in the decision to discharge him. The district court described Josey's criticism of the company's handling of the incidents as "nitpicking," and inconsistent with his testimony that he believed Vice President White was not motivated by racial prejudice.

Fifth, the court determined that White's handling of Kirby negated any inference of discrimination that arose from Kirby's behavior. The court found that White "continued to closely monitor the situation," but also acknowledged that White was unaware that Kirby abandoned the training schedule after two weeks. Finally, the district court rejected Josey's disparate impact claim because he raised it after the close of discovery. The court held that the new claim would prejudice Hollingsworth because it would have different burdens and defenses under a disparate impact theory.

Josey appealed the district court's summary judgment order. This court has jurisdiction under 42 U.S.C. ยง 2000 et ...


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