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April 15, 1997

LAWRENCE C. MOSS, Plaintiff,

The opinion of the court was delivered by: COHILL


 Plaintiffs Lawrence C. Moss and Arthur W. Basnight, III filed this action against their former employer, defendant KoolVent Aluminum Products, Inc. ("KoolVent"), asserting claims of racial discrimination in violation of Title VII of the Civil Rights Act of 1964, as amended, 105 Stat. 1074-1076 (Nov. 21, 1991), 42 U.S.C. 2000e-2, et seq.("Title VII"), and 42 U.S.C. § 1981 ("§ 1981"). Plaintiffs also claim retaliatory discharge in violation of 42 U.S.C. § 2000e-3.

 Specifically, plaintiff Moss claims that he was denied promotions in 1993 and 1994, and that he was ultimately terminated on May 20, 1994, because of his race and because he filed complaints of discrimination with the NAACP, with the Equal Opportunity Employment Commission ("EEOC"), and with the Pittsburgh Human Relations Commission ("PHRC"). The promotions he alleges he was denied were to the position of Lead Center Manager at the Pittsburgh, Orlando, Monroeville, and Greensburg Lead Centers. *fn1"

  Plaintiff Basnight contends that he was denied promotion to a supervisory position in late 1993, and that he was terminated on April 20, 1994 because of his race and because he filed a charge of discrimination with the EEOC. The supervisory position he sought was supervisor for the Monroeville Roofing Lead Center. *fn2" Although plaintiff's Pretrial Statement asserts a claim that he was also passed over for promotion to the acting supervisor position at the Orlando Lead Center, he presented no evidence on this claim at trial and we do not address it here.

 A bench trial was held before the Honorable Maurice B. Cohill, Jr., Senior District Judge, on February 10-14, 18 and 19, 1997. Plaintiffs were represented by Sylvia Denys, Esquire. Defendant was represented by Laura A. Candris, Esquire and William E. Adams, Esquire. The Court heard testimony from the following witnesses: Gary Yarber, Timothy Flanigan, Harvey Adams, Jr., plaintiff Lawrence Moss, Larry Krempasky, Gary Iskra, Delmetris Peterkin, Jon Rebel, Chuck Klinzing, plaintiff Arthur Basnight, III, Dr. Lloyd Bell, Timothy McFarlane, Michael Madden, John Stermon, Dr. Christine Martone, Kevin Kizer, Richard Vrana, Matthew Meyers, Gabrielle Frye, Michael Zabec (by videotaped deposition), and George Harvey.

 This Court has jurisdiction pursuant to 28 United States Code § 1331. Pursuant to Rule 52 of the Federal Rules of Civil Procedure, we now issue the following Findings of Fact and Conclusions of Law.


 Plaintiffs are African-American men who reside in Pittsburgh, Pennsylvania. Defendant KoolVent was a corporation with its principal place of business in Allegheny County, Pennsylvania. In 1996, KoolVent and other corporations merged to form American Home Improvement Products, Inc. At all relevant times, KoolVent employed more than 15 persons during each workweek of each calendar year and was engaged in interstate commerce as an industry affecting commerce. In December of 1994 KoolVent employed 412 persons. The company had an Equal Employment Opportunity and Sexual Harassment Policy in place, which included an internal procedure for reporting alleged discrimination.

 KoolVent's Structure and Telemarketing Operation

 KoolVent manufactured and installed home improvement products, including replacement windows and doors, vinyl siding, and roofing systems. Its products were marketed through television advertising and telemarketing. KoolVent operated "lead centers," which are telemarketing centers that generate appointments ("leads") that are followed up by company sales personnel.

 Telemarketers ("TSRs) generated leads by cold-calling homeowners and by contacting "preferred" customers, such as those who responded to KoolVent's television advertisements. KoolVent's TSRs received training and were expected to work from a script. Performance was measured by their lead writing ratios ("LWR") and the percentage of leads that resulted in demonstrations ("demos") or sales. The LWR is determined by dividing the number of leads written by a TSR by the number of hours a TSR spent on the system writing leads. TSRs following up preferred leads were expected to generate more leads per hour than those making cold calls. After the automated predictive dialer system was installed in 1992, TSRs doing cold calls were expected to write at a 1.0 LWR, or one lead per hour on the system. TSRs doing preferred calls were expected to write at a .35 LWR, or about three leads per hour.

 After a lead was generated it had to be "verified" by a telemarketing manager, supervisor, or, after that position was created in 1993, a group leader. Essentially, this process determined that the consumer contacted by the TSR owned the home and had an interest in the KoolVent product, and that all homeowners would be present when a sales representative was scheduled for a demonstration. A lead that could not be verified was "burned" or "killed."

 Verified leads were then provided to the appropriate branch sales office and assigned to a sales representative. As lead centers were frequently being developed or closed, there was not necessarily a geographic correlation between the location of a lead center and the area for which leads were generated and verified. For example, TSRs in the Pittsburgh Lead Center at various times generated leads for the Florida market; this was known as "supporting" Florida. After verification in the Pittsburgh Lead Center, those leads would be followed up by Florida sales reps. TSRs were sometimes given information regarding neighborhoods in particular areas where KoolVent did or did not expect to generate leads. Employees verifying leads were sometimes given maps of the area, so that appointments could be set for the sales rep from the closest city and also so that the distances a rep must travel between appointments were apparent to the scheduler.

 Leads issued to branch sales offices resulted in one of eight outcomes or "dispositions": (1) sale; (2) no home (i.e., one or both homeowners were not at home); (3) demo (i.e., the product was demonstrated and an estimate was given); (4) no demo (i.e., the consumers were there, but the sales representative could not demonstrate the product or leave an estimate, e.g., because the consumer denied having made the appointment); (5) customer called to cancel; (6) no lead/no credit (e.g., the home is a mobile home for which financing cannot be obtained or the consumers do not own the home or KoolVent cannot do the work because, for example, the consumer wants round-top windows, which KoolVent does not manufacture); (7) not covered (i.e., the lead was issued to a sales representative, but he or she was unable to keep the appointment, e.g., because of weather or the way the appointments were blocked (set) by time or territory); or (8) not issued (i.e., the sales manager did not give the lead to a sales representative, e.g., because it was impossible to cover due to the time and place it was set for.

 TSRs were paid a salary and could receive a bonus based on "net new orders" and/or on the percentage of leads that resulted in demos. Sales reps, on the other hand, were paid a commission based on the number of installed sales. Sales reps were not salaried.

 1993 and 1994 were years of transition and reorganization at KoolVent. 1993 was the worst year in company history, and KoolVent had losses of several million dollars. At the time, the company was organized with several different lead centers. It was decided that a single "mega" lead center could most efficiently support all KoolVent sales offices. By June 1993, KoolVent had closed all but one lead center -- the Pittsburgh Lead Center. Gabrielle Frye was transferred from Charleston to manage the center. Within the KoolVent organization, Frye was directly responsible to Vice President Krempasky, and was responsible for supervising the telemarketing supervisors. In June 1993 these supervisors were Dave Marchik (also field co-ordinator), Bill Milesky, Jon Rebel, Mary Williams, Delmetris Peterkin (who had transferred to Pittsburgh when the Charleston Lead Center closed), and plaintiff Larry Moss. Williams, Peterkin, and Moss are African-American.

 We find credible the testimony of both Frye and Peterkin that the atmosphere at the Pittsburgh Lead Center was negative and unruly when they transferred to the center from Charleston.

 Telemarketing supervisors were expected to verify leads written by their TSRs. They were required to issue a set amount of leads per branch per day, usually 20. They were expected to generate a cold call LWR in their groups of 1.0 or better. They were expected to generate enough leads to reach a "demo" percentage of 50-55%, sales of about 12%, and to reduce the percentages of no homes and no demos to between 10% and 15% of leads written. In addition, telemarketing supervisors worked with sales managers blocking leads for the sales reps. It was the supervisors' responsibility to correct problems in the quality or quantity of leads produced by their groups, to work with their assigned group leaders and TSRs on training and production, to discipline and evaluate their personnel, and to generate appropriate reports. (Def's. Ex. D; C-17; C-19(4.a); EEE-20).

 Group leader and sales office support assignments changed frequently for each of the telemarketing supervisors, including plaintiff Moss. All telemarketing supervisors were assigned and reassigned to support a changing combination of different sales offices and to supervise a number of different group leaders and TSRs. The company changed assignments frequently in an attempt to increase productivity, and, at times, to accommodate the needs of individual employees. Although Moss apparently had difficulty adapting to the frequent shifting of assignments and personnel, there is no evidence that he was treated any differently than any other KoolVent supervisors in this regard, or that any of his assignments were intended to impede his advancement in the company. KoolVent had legitimate business reasons for each restructuring decision that affected the plaintiff.

 The company again revised its marketing strategy in late 1993, and abandoned the mega lead center plan. Between December 1993 and May 1994, KoolVent opened four new lead centers in Monroeville and Greensburg, Pennsylvania; Orlando, Florida; and Morgantown, West Virginia.

 Then in July 1994, KoolVent closed its entire Florida operation, including the Orlando Lead Center, due to a continuing inability to obtain bank financing for its customers for the home improvement products KoolVent successfully sold in Florida. By September 1994, the Pittsburgh Lead Center had also been closed. Although the last quarter of 1994 was reasonably good, KoolVent sustained a loss of $ 1 million or more in 1994. However, the efforts made during these years of transition ultimately paid off for the company, which had its best year ever in 1995.

 Plaintiff Moss' Employment

 Plaintiff Larry Moss was hired as a telemarketer in the Pittsburgh Lead Center in April 1991 and was promoted to the position of telemarketing supervisor that October. Moss was demoted to a TSR on February 17, 1992 by his supervisor, Deborah Supe, for issuing leads that were not properly verified. The evaluation placed in his personnel file at that time shows that Moss received 51 out of 100 points, the lowest score given to any telemarketing supervisor. (Def.'s Exs. C-2-5, V-29).

 After his demotion, Moss filed a complaint with the local chapter of the NAACP and met with Harvey Adams, then president of the Pittsburgh NAACP chapter. Larry Krempasky, Vice President for Telemarketing and Chuck Klinzing, KoolVent Personnel Director, reviewed Moss' personnel file. Adams met with Klinzing and discussed plaintiff Moss. Klinzing determined that Moss had not been warned that his performance could result in demotion, and recommended reinstatement. Krempasky adopted the recommendation. Moss was reinstated to his position as a telemarketing supervisor at the Pittsburgh Lead Center on March 1, 1992 with back wages and benefits. Mary Cross, a Caucasian woman who was Assistant Manager of the Pittsburgh Lead Center, was demoted at the same time. Klinzing also determined that she had not been adequately warned, and she, too, was reinstated. Cross subsequently resigned.

 Moss testified that no one in KoolVent's management made any negative remarks to him about the NAACP charge. In addition, Moss testified that he never heard anyone at KoolVent make any racist remarks, either to him personally or about anyone else.

 Deborah Supe was replaced as Lead Center Manager at Pittsburgh by Gary Yarber in April of 1992. Yarber had previously worked for KoolVent. Michael Madden, Vice President of Sales, recommended hiring Yarber to replace Supe, but Krempasky opposed the hire. Before he was hired, Yarber met with Krempasky and Madden for lunch. Yarber testified that they met at the Hunt Valley Marriot, Hunt Valley, Maryland. Madden recollected that he met with Yarber alone at Hunt Valley, but that the meeting with Krempasky occurred at a restaurant in Baltimore.

 Yarber testified that at that meeting Krempasky made racial slurs, stating in reference to Moss that Yarber "would have difficulty with this little nigger." Yarber stated that Krempasky also told him that Moss had filed a charge with the NAACP. We do not find credible the testimony of Gary Yarber that racial slurs were made at this meeting. Yarber did not tell Moss about the alleged racial slurs until May of 1994, after Moss had been discharged and, significantly, after Yarber himself had been fired. We find credible the testimony of defendant's witness Michael Zabec, who had worked at KoolVent with both Krempasky and Yarber and who later hired Yarber to work with him in Maryland. Zabec testified that after leaving KoolVent Yarber often complained about Krempasky and said he would get even. Yarber himself used racial slurs, and Zabec received complaints about Yarber's attitude toward African-American employees.

 Rick Vrana also testified to Yarber's preoccupation with Krempasky. Vrana resigned from KoolVent in January 1994, and went to work for Yarber for about two months. During that time, Vrana lived at Yarber's house. We find credible his testimony that a year after Yarber had been discharged from KoolVent, Yarber still spoke regularly about getting even with Krempasky.

 During Yarber's stint as manager, Yarber worked well with both Moss and Basnight. Yarber suggested that Krempasky create a position of Assistant Lead Center Manager, and that Moss be promoted to that position. The new position was not created.

 Yarber's employment was terminated for nonperformance and absenteeism in March 1993. In April, Gabrielle Frye was transferred from the Charleston Lead Center and became Manager of the Pittsburgh Lead Center and plaintiffs' supervisor. We find credible Frye's testimony regarding Moss' performance. Moss himself informed her that he had been demoted and had filed a complaint with the NAACP; Frye did not receive that information from Krempasky. She consistently got complaints from sales managers about Moss' performance. Moss was issuing a high percentage of no homes and no demos, was blocking the leads inconveniently for the sales reps, and was not verifying leads according to company policy.

 As their manager, Frye evaluated all telemarketing supervisors except Peterkin in June 1993. She had recently evaluated Peterkin while both were still at Charleston, and given Peterkin a 76 rating. (Def's. Ex. HHH-61-63). Frye rated Milesky at 72, Rebel at 65, Williams at 64, and Moss at 54. (Def's. Ex. C-9-12; EEE-31-34; FFF-7-10; GGG-62-65).

 Frye reviewed the evaluation with Moss, and emphasized to him the need to display a positive image to his group, to recognize problem areas and work on solutions rather than making excuses, and to stay focused on the job. (Def's. Ex. C-9-12).

 Frye did another assessment of her supervisors' performance in July. Frye wrote that Peterkin and Rebel had the potential to succeed. (Def's. Ex.HHH-52, EEE-30). Although Frye expressed some criticism of each of the telemarketing supervisors in her July appraisals, Moss received the most comments and the most criticism. (Cf. Def's. Ex. HHH-52, EEE-30, FFF-4, GGG-58).

 In her July evaluation, Frye noted that Moss had a "gives up" attitude; that his lead delivery was below the needed level; that his attitude toward KoolVent was up and down, as were his work habits; that his no home and no demo percentages were increasing; that he needed to do verification properly by using the wrap-up; that he was not issuing enough cold call leads (i.e., he was issuing too many leads from easier preferred sources) and that he needed to stop focusing on the past, to quit making excuses to the sales managers and quit looking at suggestions from management as if they were "some kind of set up." (Def's. Ex. C-12-13). On cross-examination, Moss acknowledged that he got this appraisal and that he understood the problems with his production.

 Frye testified that Moss had talent and performed well when he was focused, but that it was hard to keep him focused; he had good days and bad days; his performance was up and down. Frye stated that Moss was good on the phone with consumers, was good at training TSRs when he was focused, and was likable. However, he had difficulty with the sales department because he shortcut verification, did not communicate well with sales managers, and did not follow through to address their concerns.

 On October 20, 1993, Moss was assigned to support the Florida sales offices. This change occurred because Williams, the supervisor who had been supporting Florida, was diagnosed with breast cancer and took a leave of absence. In addition, Altoona, one of the three offices Moss had been supporting, had closed in early October. There is no evidence that this or any of Moss' other assignments were in any way punitive.

 Moss did not do well in the assignment to support the Florida sales offices. John Stermon was in charge of Sales in the Florida region from the Summer of 1993 (when KoolVent opened sales offices in Jacksonville, Orlando, Tampa and Miami, Florida) until KoolVent closed the entire region in July 1994. We find credible Stermon's testimony regarding serious deficiencies in Moss' performance while Moss was responsible for generating leads to the Florida sales offices. Stermon testified that the no home percentage on the leads Moss issued to Florida consistently exceeded 40%.

 Stermon also testified that Moss did not block leads properly, and that he continued to issue leads in areas where there were trailer parks, and in parts of Miami and St. Petersburg that were unsafe for sales reps. Moss was relieved of responsibility for Florida on or about November 19, and Jon Rebel took over that assignment.

 Moss was then assigned to training and recruitment. He had previously told Frye that he would welcome the opportunity to do training, and Moss testified that he considered himself good at working with struggling TSRs. His salary was not reduced with this new assignment.

 Moss was treated by clinical psychologist Lloyd Bell, Ph.D. Dr. Bell testified as plaintiffs' expert on the particular problems encountered by African-American men in the workplace. It was Dr. Bell's opinion that Moss felt abandoned and unsupported by KoolVent management.

 On January 5, 1994, Moss filed a complaint with EEOC (Pl's. Ex. 3) and then went to meet with Harvey Adams. KoolVent received written notice of the EEOC charges in a document dated January 14, 1994, which was sent to Gary Iskra as company president. (Def's. Ex. YY). Three other KoolVent employees also filed charges that month. In a document dated January 10, 1994, KoolVent was notified that Arthur Basnight had filed charges of discrimination with the EEOC. (Def's. Ex. ZZ). An EEOC notice of charges filed by Delmetris Peterkin was dated January 18 (Def's. Ex. AAA), and the notice of charges filed by Mary Ellen Williams was dated January 21 (Def's. Ex. BBB). Peterkin was subsequently offered her choice of positions as manager at either the Pittsburgh Lead Center or the Monroeville ...

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