United States District Court, Northern District of Illinois, E.D
March 2, 1982
PATRICIA MARSHALL SCOTT, PLAINTIFF,
OCE INDUSTRIES, INC., DEFENDANT.
The opinion of the court was delivered by: Shadur, District Judge.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
This action has been tried upon the facts without a jury.
After considering all the evidence and the briefs and
arguments of counsel, in accordance with Fed.R.Civ.P. 52(a)
the Court finds the facts and states its conclusions of law as
Findings of Fact ("Findings")
A. Nature of the Case and Prior Proceedings
1. Patricia Marshall Scott ("Scott") filed this action April
30, 1980 charging that Océ Industries, Inc. ("Océ") had
violated Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e
to 2000e-17, and the Equal Pay Act, 29 U.S.C. § 206(d).
Before trial Scott withdrew her Equal Pay Act claims
and proceeded solely on her Title VII charges. Scott alleged
that Océ had discriminated against her on the basis of sex, in
that her compensation and terms and conditions of employment
were determined by unlawful considerations and she was
subjected to harassment that forced her resignation.
2. Scott's Complaint was timely, having been filed within 90
days of her receipt of a right-to-sue letter from the Equal
Employment Opportunity Commission ("EEOC"). Scott's initial
and amended charges before the EEOC were also timely filed:
(a) Her initial charge was filed March 18,
1977, within 180 days of the events complained
(b) Her amended charge, filed in September
1978, was based on her claimed constructive
discharge. It therefore alleged additional
unlawful employment practices related to or
growing out of the original charge.
3. Trial commenced October 23, 1981 and concluded October
29, 1981 with final arguments taking place November 2, 1981.
4. At the time of her Océ employment Scott was a widowed
white female using the name Patricia Marshall (she has since
married and changed her last name to Scott). Scott began
working at Océ in January 1974 as the credit secretary. From
December 1, 1974 through the termination of her employment
April 25, 1977 she was employed as Assistant Credit Manager of
the Repro division ("ACM-Repro").
5. Océ, headquartered in Chicago, Illinois, is an employer
within the meaning of Title VII. During the entire time period
relevant to this action Océ had two divisions, the Repro and
II. Scott's Employment Record
6. Scott's predecessor as ACM-Repro was a man named Ronald
Norton ("Norton"). Norton had been hired in October 1973 at a
starting salary of $12,000, subject to a review and an
increase if his performance were found satisfactory four to
six months after hiring. Instead Norton was fired in May 1974.
From the pattern of Océ's increases (both on merit and to meet
inflation) reflected in the record, it is reasonable to
conclude that had Norton performed satisfactorily as ACM-Repro
he would have been earning not less than 10% more (or $13,200)
by December 1, 1974 (more than a year after hiring).
7. Scott was qualified to perform the duties of ACM-Repro
effective December 1, 1974. Indeed she had handled the
assignment on a trial basis since July 1, 1974 and had
voluntarily asked to wait to assume the ACM title until she
was adequately trained. Scott's initial salary as an ACM was
$9,460 (all salaries in these Findings are stated on an annual
basis). That was increased July 14, 1975 to $10,465. At that
time Océ's personnel action form for Scott (P. Ex. 3) stated,
"Since Patricia is doing all of the credit work for the Repro
Division, the above requested increase still brings in the cost
of this position at substantially less than her predecessor,
Ron Norton." Océ's personnel action forms for Scott dated
January 19, 1976 (P. Ex. 4) and January 19, 1977 (P. Ex. 5)
reflect that her performance was "excellent" and "outstanding."
8. Norton had substantially more experience in handling
credit than did Scott. However the job of ACM, although it
requires intelligence and application, is not an
extraordinarily complex or highly skilled activity for which
substantial experience is either necessary or relevant. Indeed
the fact is that Scott performed the ACM job in an "excellent"
and "outstanding" way while Norton had not. Scott has
established that in comparison with Norton she performed equal
work for unequal compensation. Océ's offered reasons for the
difference, in the light of this and subsequent Findings, are
pretextual. This Finding is not vitiated by the fact that
Scott, as a conscientious employee wanting to continue to
increase her skills, continued to seek and obtain further
on-the-job training from her superior (Credit Manager Paul
Calhoun) on dealing with credit problems.
9. In February 1976 the relevant credit department personnel
and their respective salaries were as follows:
Patricia Marshall (Scott) Donald McNeil
Assistant Credit Manager Assistant Credit Manager
Pamela DiMaria Amy Wolf
Credit Correspondent Assistant Credit Manager
As of January 19, 1976 Scott had received a 10.3% increase. As
for the ACMs in the ICP division, there were substantial
differences between them in age and experience. However the
fact that in large part their job content and responsibilities
were equivalent leads to the inference that the gross
disparity in compensation levels was attributable in part to
the difference in sex between the two ACMs in ICP. Amy Wolf
("Wolf") like Scott had also been promoted from a secretarial
position to ACM. Both the Scott and Wolf situations reflect a
viewpoint on the part of Océ's relevant supervisory personnel
that a male ACM was an ACM, while a female ACM was little more
than a glorified secretary.
10. Terry Harrigan ("Harrigan") was Credit Manager from
August 12, 1975 through September 24, 1976 (his predecessor
Paul Calhoun had held the position from sometime in 1974). In
the spring of 1976 Harrigan informed Océ Treasurer Ronald
Larson ("Larson") he was thinking of leaving Océ. Larson
delegated to Harrigan the task of finding his own replacement.
Océ placed no advertisements for Harrigan's successor.
11. Harrigan hired Edward Regal ("Regal"), who began working
for Océ August 6, 1976 at a salary of $18,000. Harrigan and
Regal were former co-workers at Admiral Corporation's credit
department and were friends. Regal's initial title was ACM,
replacing Donald McNeil ("McNeil"), who was then earning
$16,536. On September 24, 1976 Regal became Credit Manager and
his salary was increased to $19,000.
12. Regal hired John Gonzales ("Gonzales"), another former
co-worker from Admiral, in late August 1976. Gonzales began
working as an ACM-ICP September 13, 1976 at a $15,500 salary.
13. There was some difference in the skills required for the
ACM jobs for the Repro division (held by Scott) and the ICP
division (held by Gonzales and Wolf). However that difference
was not of such a material nature (even taking into account
Gonzales' greater experience) as to call for the differential
that existed between the Gonzales and Scott salaries.*fn1
14. Until about January 21, 1977 Scott and Regal had a
satisfactory working relationship.*fn2 Regal authorized
appropriate business travel for Scott, and about January 1977
he properly corrected an unjust criticism of Scott's work by
Océ's Dallas branch manager (the complained-of incident had
been caused by the Dallas office, not Scott).
15. About January 21, 1977 Scott had a conference with Regal
as to her annual
review. During the conference Scott raised the wide disparity
between her salary and that of Gonzales. Regal consulted
Larson as to Scott's complaint about her salary.
16. After conferring with Larson, Regal told Scott that an
8% increase was the best Océ could do, because it was seeking
to adhere to an 8% guideline for increases. However both Regal
and Gonzales received raises in excess of 8% during 1977. On
April 25, 1977 Gonzales received a raise to $17,000 (a 9.7%
increase), a salary higher than his predecessor McNeil had
received. On July 1, 1977 Regal received a raise to $22,000 (an
11.1% increase), a salary higher than his predecessor Harrigan
17. There is a sharp dispute in the testimony as to whether
Regal told Scott her salary was more than most executive
secretaries and later asked her to replace Inez Dolatowski,
who resigned as the credit secretary in February 1977. Scott's
EEOC charge related both incidents. This Court has observed
the demeanor of both witnesses and has taken into account the
additional fact that Pamela DiMaria testified to a
conversation in which Regal told her, during a salary review,
that she was at a dead end at Océ and didn't need to worry
about her salary because she was just going to get married and
have children. This Court credits Scott's testimony that the
disputed conversations took place.
18. After the Scott-Regal conferences as to Scott's salary
increase, Regal's and Océ's treatment of Scott underwent a
sharp change. As a witness Regal evinced both defensiveness and
a kind of insecurity that, coupled with his narrow view of
employed women already referred to, is consistent with his
altered treatment of Scott. Among other matters:
(a) Regal began to inform Scott of various
changes in her duties only by memos, placed on
her desk while she was out of the office. Both
the nature and effect of this and other conduct
by Regal may best be judged by the fact that
Regal and Scott (and others) were in the same
small office, with their desks no more than 20
(b) Regal avoided speaking to Scott except to
respond to direct inquiries she brought to him.
(c) Regal told Scott she would no longer be
able to travel as part of her duties. Regal told
her he felt it was unsafe for a woman to travel
by herself (though that was not Océ's reason for
the change, which was a general cutback — not
elimination — of travel to economize).
(d) On February 8, 1977 Regal informed Scott by
memo that she could no longer approve lease
orders. Regal did not believe Scott had
previously mishandled any such orders.
(e) On March 8, 1977 Regal directed Scott by
memo to turn over any orders being held in credit
longer than seven days. Thereafter Scott no
longer had any involvement with such orders, and
Regal did not discuss them with her.
It is unnecessary to decide whether some of the changes had
possible business justification, as Océ contends. Both the
initiation of a number of such changes in a short time span,
significantly reducing Scott's responsibilities, and the
extraordinary means of communicating such changes and all other
business matters reflected employer activity justifying the
filing, and confirming the validity, of Scott's EEOC charges.
19. On March 18, 1977 Scott filed EEOC charges. On March 22
Scott informed Carolyn Morgan (Océ's one-person personnel
"department") she had done so.*fn3 Morgan immediately told
Larson, and Morgan and Larson jointly informed Regal that same
afternoon. Larson instructed Morgan to consult with Océ's
attorneys that day.
20. Regal read Scott's EEOC charge at some point while she
was still employed at Océ. Regal testified that his
understanding, both at that time and at trial, was that the
basis of Scott's complaint was that Regal made changes in the
without Scott's approval. That reading of the charge is
untenable and further undermines Regal's credibility as a
21. After Regal was informed of Scott's EEOC filing, he made
no effort to change his method of communicating with her or
with Pamela DiMaria. When asked at trial about any changes he
made to improve the relationship, he responded that he did
nothing and then asked, "What was I supposed to do?" In fact
his pattern of making Scott's job less meaningful, and her
working conditions less tolerable, continued. Moreover his
testimony that Scott resisted change was rebutted by his own
acknowledgement on cross-examination that she fully complied
with any changes he initiated in the credit department.
22. Sometime in March 1977 Regal began to open the mail each
morning and to send checks directly to the bank. Regal did not
discuss any need for, or the adoption of, that new procedure
with either Scott or Pamela DiMaria. That change added to the
adverse conditions of Scott's job by reducing the volume of
mail she received to a very low level, further diminishing her
23. After Scott filed her EEOC charge other Océ personnel
joined Regal in "building a record" to denigrate Scott's
performance as ACM-Repro and also joined Regal in further
isolating her as an employee. Thus for example:
(a) Herbert Russell (Océ's Vice President of
sales-marketing) wrote an April 15, 1977 memorandum
to Larson (P. Ex. 35) whose sole purpose was to
build a record to make Scott appear both
incompetent and uncooperative.*fn4 In fact no
evidence was introduced that she failed in either
(b) Robert Fortune (Océ's national sales manager
for marketing) told McNeil ("between you and I"
[sic]) that it would be in McNeil's own best
interest not to be seen associating with Scott in
the Océ offices because she had filed an EEOC
24. Regal told Scott in March or early April 1977 that he
had been "told I can't fire you, but I can certainly make it
tough so you quit." Scott considered resigning but decided
instead to take her vacation in April 1977, hoping that a
cooling-off period would bring about a change on Regal's and
Océ's part and enable her to keep working at Océ. When she
returned in the latter part of April she found that the files
and "open item book" that represented her principal remaining
job responsibility were no longer at her desk. At that point
her working conditions had become wholly intolerable, amounting
to a constructive discharge. On April 25, 1977 Scott told
Larson she had decided to leave Océ, signing a letter of
resignation Larson dictated for her signature.
25. All the cumulative acts discussed in earlier Findings,
involving inequity in Scott's salary based on her sex,
reduction of her responsibilities, increasing isolation,
attempts to set up situations in which Scott would either fail
to perform or look as though she was failing to perform, and
finally the removal of Scott's files and "open item book"
while she was on vacation, amounted to a constructive
discharge of Scott. Accordingly her "resignation" referred to
in Finding 24 was effectively forced on her.
26. On the basis of the conflicting testimony in this case,
this Court concludes that Scott and her witnesses have
presented the more credible account of the circumstances
surrounding Scott's employment with Océ and that the reasons
articulated by Océ for the salary disparity are unworthy of
belief and were in fact a pretext for discrimination.
27. Scott did not immediately seek other employment,
believing that Océ would take her back (she discussed that
matter with the EEOC). She did check newspaper want ads and
communicated with prospective employers by telephone. She
registered with the Illinois Bureau of Employment and about
July 1977 registered with a single employment agency
specializing in management rather than clerical jobs, advising
them she was looking for work in the credit field in which she
was skilled. No such jobs were available, nor was she able to
find such jobs through the newspaper want ads or by
communicating with other employment agencies.
28. Scott performed some work for a company called NuTheme,
owned by the son of her then fiance (now her stepson), at the
end of August 1977. She worked on collection of delinquent
accounts and reordered the firm's accounting functions
generally. At the beginning of September 1977 Scott became ill
for a few months and was unavailable for work. Scott's limited
involvement in NuTheme has led to her becoming a principal in
that company, increasing to the point in June 1978 when she
took over most of the management functions. It was agreed at
that time that she would operate the business for four years,
then would become its owner for a nominal amount (that
arrangement has since been formalized by a written agreement).
29. Scott is not entitled to damages in any case for the
period after she opted to become an entrepreneur with NuTheme,
for her decision to seek a buildup of equity in that company
(the amount and value of which is in part intangible and has
not been proved by her) amounts to a failure to meet her
burden of proving damages thereafter. It is reasonable for
Scott to recover damages from Océ for a period of four months
after her termination, until she became ill and was unable to
work in any case.
30. There was no evidence as to the amount or duration of
any unemployment compensation benefits received by Scott. In
any event, such benefits will not be applied to reduce Scott's
recoverable damages here.
31. Scott's actual Océ compensation and other earnings, and
the compensation Oce would have paid to a male occupying the
same position as ACM-Repro, are as follows:
Period Involved Scott Male ACM-Repro
12/1/74 - 7/13/75 $5,045.33*fn5 $7,040*fn6
7/14/75 - 1/18/76 5,377.85*fn7 6,783.33*fn6
1/19/76 - 1/18/77 11,544 14,559.60*fn8
1/19/77 - 4/25/77 3,328 4,259.17*fn9
4/26/77 - 8/25/77 837.50*fn10 5,323.96*fn9
Totals $26,132.68 $37,966.06
Conclusions of Law
1. This Court has jurisdiction of the parties and the
subject matter of this action under the Civil Rights Act of
1964, 42 U.S.C. § 2000e to 2000e-17.
2. Scott timely filed an EEOC charge of sex discrimination
(the "Charge") against Océ March 18, 1977. Océ's last act of
sex discrimination in connection with Scott's level of
compensation had occurred at the time of her last salary review
and raise effective January 19, 1977, and Scott had thereafter
received other sex-related adverse treatment from her immediate
3. Scott's amended EEOC charge filed October 13, 1978,
alleging a constructive discharge, is also within the Court's
jurisdiction. Its gravamen is that the discriminatory
practices complained of in the Charge continued after its
filing, effectively forcing and making reasonable Scott's
resignation. That claim of constructive discharge is properly
included within the Complaint in this Court as being "like or
reasonably related to" the allegations in the Charge.
Jenkins v. Blue Cross Mutual Hospital Insurance, Inc.,
538 F.2d 164 (7th Cir. 1976). Alternatively, this Court has jurisdiction
over the constructive discharge claim because it alleges
unlawful employment practices related to and growing out of the
subject matter of the Charge. Sanchez v. Standard Brands,
431 F.2d 455 (5th Cir. 1970). Additionally, because the
constructive discharge occurred during the pendency of the
Charge before the EEOC, a second authorization to sue is not
required. Kirkland v. Buffalo Board of Education, 622 F.2d 1066
(2d Cir. 1980).
4. Scott has alleged unlawfully disparate treatment.
Accordingly, Scott must prove that Océ intentionally
discriminated against her. Texas Dept. of Community Affairs v.
Burdine, 450 U.S. 248, 253, 101 S.Ct. 1089, 1093, 67 L.Ed.2d
207 (1981). Océ need not prove the absence of discriminatory
motive on its part. McDonnell-Douglas Corp. v. Green,
411 U.S. 792, 802, 93 S.Ct. 1817, 1824, 36 L.Ed.2d 668 (1973); Furnco
Construction Co. v. Waters, 438 U.S. 567, 578, 98 S.Ct. 2943,
2950, 57 L.Ed.2d 957 (1978).
5. Scott has met her burden of establishing a prima facie
case of discrimination on the basis of sex by proving that (a)
she is a member of a class of persons protected under Title
VII, (b) she performed her duties as ACM-Repro satisfactorily,
(c) she performed substantially equal work for unequal
compensation. McDonnell Douglas Corp. v. Green, 411 U.S. 792,
802, 803, 93 S.Ct. 1817, 1824, 1825, 36 L.Ed.2d 668 (1971).
Scott has proved that her work was "outstanding" (Océ's
characterization) but that her salary was lower than a male
ACM-Repro would have received due to sex discrimination. County
of Washington v. Gunther, 452 U.S. 161, 101 S.Ct. 2242, 68
L.Ed.2d 751 (1981).
6. Such a prima facie case shifted the burden to Océ to
rebut the presumption of discrimination by producing evidence
that Scott received a lower salary for legitimate,
non-discriminatory reasons. Océ's meeting of that burden
requires Scott to prove that the proffered reason was not the
true reason. Texas Dept. v. Burdine, 450 U.S. at 254-55, 101
S.Ct. at 1094-95.
7. As reflected in the Findings (including in particular
summary Finding 26), Scott has met all the burdens of proof
imposed on her by law as stated in these Conclusions.
8. Scott has proved that she was constructively discharged
by Océ April 25, 1977. Océ had made Scott's working
conditions so difficult and unpleasant that a reasonable person
in her position would have felt compelled to resign. Welch v.
University of Texas and Its Marine Science Institute,
659 F.2d 531, 533 (5th Cir. 1981); Bourque v. Powell Electrical Mfg.
Co., 617 F.2d 61, 65 (5th Cir. 1980); Alicea Rosado v. Garcia
Santiago, 562 F.2d 114, 119 (1st Cir. 1977).
9. Scott is entitled to an award of back pay for the period
that commenced two years before the filing of the Charge
(March 18, 1975) and ended April 25, 1977. Stewart v. General
Motors Corp., 542 F.2d 445, 453 (7th Cir. 1976), cert. denied,
433 U.S. 919, 97 S.Ct. 2995, 53 L.Ed.2d 1105. Scott is also
entitled to her salary, taking into account what she would have
earned absent any discrimination, from April 25, 1977 until she
was no longer available for other employment (which the Court
finds to have occurred approximately August 25, 1977), reduced
by the sum of her interim earnings.
10. This Court need not decide the general question whether
an ex-employee's decision to engage in self-employment is a
reasonable means of mitigating one's damages. See such cases,
in another area of the law, as Heinrich Motors v. NLRB,
403 F.2d 145, 148 (2d Cir. 1968); NLRB v. Cashman Auto Co.,
223 F.2d 832 (1st Cir. 1955). Where such a decision (as in this
case) results in the employee receiving both compensation and
an equity interest in the
business (here Scott will become the owner of NuTheme upon
paying a nominal amount), the appropriate amount to be
deducted from the sum the ex-employer is obligated to pay is
"the reasonable value of her services . . . for which she did
not receive any specific salary." Armstrong v. Index Journal
Co., 647 F.2d 441, 449 (4th Cir. 1981). Under the facts here
that reasonable value must by definition be identical to the
reasonable value of her services that Scott is entitled to
receive as damages. Accordingly no damages are recoverable for
the period after she committed herself to NuTheme rather than
the general employment market.
11. Scott's backpay award need not be reduced in any manner
on account of unemployment compensation benefits she received
during the period she was unemployed after being discharged by
Océ. EEOC v. Sandia Corp., 639 F.2d 600, 624-26 (10th Cir.
1980); Marshall v. Goodyear Tire & Rubber Co., 554 F.2d 730,
736 (5th Cir. 1977).
It is hereby ordered that Patricia Marshall Scott is awarded
judgment against Océ Industries, Inc. in the sum of $11,833.38
plus costs (including reasonable attorneys' fees).