The opinion of the court was delivered by: MILTON I. SHADUR
Thomas Bagnell ("Bagnell") has filed suit against Komatsu Dresser Company ("Komatsu Dresser"), Komatsu America Corporation ("Komatsu America"), Dresser Construction Machinery,
David Grzelak ("Grzelak") and Jon Middleton ("Middleton"), alleging:
1. discrimination on the basis of his national origin (Bagnell's origin is here in the United States, and he contends that he was discriminated against because he is not of Japanese origin), a claim that arises under Title VII of the Civil Rights Act of 1964 (42 U.S.C. §§ 2000e to 2000e-17); and
2. breach of contract because defendants did not honor the obligation manifested in Komatsu Dresser's employee handbook to discharge employees only for good cause.
All viable defendants (see n.1) have joined in a motion for summary judgment on both claims.
For the reasons discussed in detail in this opinion, their motion is granted.
Summary Judgment Standards
Rule 56(c) requires that to be "entitled to a judgment as a matter of law," the moving party must establish the lack of any "genuine issue as to any material fact" ( Celotex Corp. v. Catrett, 477 U.S. 317, 322, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986)). In that respect a "genuine issue" requires that there be sufficient evidence for a jury to return a verdict in favor of the nonmoving party ( Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986)), while a "material fact" is one that "might affect the outcome of the suit under the governing law"--here Title VII ( id. at 248; Pritchard v. Rainfair, Inc., 945 F.2d 185, 191 (7th Cir. 1991)).
In the application of those principles this Court need not draw "every conceivable inference from the record--only those inferences that are reasonable" in favor of nonmovant Bagnell ( Bank Leumi Le-Israel, B.M. v. Lee, 928 F.2d 232, 236 (7th Cir. 1991)). While the standard for summary judgment is "applied with added rigor in employment discrimination cases, where intent is inevitably the central issue" ( McCoy v. WGN Continental Broadcasting Co., 957 F.2d 368, 370-71 (7th Cir. 1992)), that
1. defendants': "D. 12(m) P--";
2. Bagnell's: "P. 12(n) P--" (this includes both his GR 12(n)(1) response to D. 12(m) and his added factual statement under GR 12(n)(2), because Bagnell's counsel has sensibly numbered the two sets of paragraphs consecutively to avoid confusion); and
3. deposition testimony: "[Name] Dep. --."
does not render the summary judgment procedure "per se improper" ( Washington v. Lake County, 969 F.2d 250, 254 (7th Cir. 1992)). Instead summary judgment for defendants is appropriate if the record reveals that no reasonable jury could conclude that Bagnell was fired from his job because of his national origin ( Shager v. Upjohn Co., 913 F.2d 398, 399 (7th Cir. 1990)).
Before he was terminated on August 5, 1991, Bagnell was employed by Komatsu Dresser as Regional Manager of its North Region, a position that he'd held since approximately February of that year.
Bagnell had originally been hired by Komatsu America in October 1987, but he became an employee of Komatsu Dresser after that new entity was formed in September 1988 when Dresser Financial Corporation joined forces with Komatsu America and Komatsu America Manufacturing Corporation (both wholly-owned subsidiaries of Komatsu Limited, a Japanese firm) in a joint venture. Before serving Komatsu Dresser's North Region, Bagnell had been assigned in the same capacity in various other Regions while Komatsu Dresser consolidated marketing operations and reduced the number of Regional Managers from eight to four and then to three.
Bagnell's job involved selling heavy construction equipment such as bulldozers, excavators, road graders, dump trucks and mining equipment, a task that kept him on the road almost constantly. During his visits to various distributors Bagnell was supposed to entertain those customers and to keep records of the expenses incurred, so that he could be reimbursed by Komatsu Dresser. Grzelak, the Vice-President of Sales and Bagnell's immediate supervisor, then reviewed his reports--along with those of the other two Regional Managers, Jenkins Davis ("Davis") and Steve Day ("Day")--to approve and sign them if Grzelak believed them accurate.
In mid-July 1991 one of Bagnell's expense reports prompted Grzelak to direct Carl Prose ("Prose") to conduct an investigation. Grzelak told Prose that there seemed to be differences between Bagnell's reports and those of the other two Regional Managers. More specifically, Prose testified that Grzelak drew attention to the fact that in his opinion Bagnell seemed to have reported more group meals and had submitted more receipts that had been rounded off, including one that looked as if it had an erasure (Prose Dep. I 16-18, 22; Prose Dep. II 7, 11). Because Prose (who was ordinarily charged with the duty of investigation) was about to leave for a vacation, he turned responsibility over to his subordinate Gerald Lovell ("Lovell"), a man who had acquired experience in that sort of auditing at his prior job with International Harvester.
Lovell decided (apparently unilaterally) that the scope of his investigation should include the expense reports of Davis and Day as well. On July 30 Lovell completed his work and drafted two memos, one describing the discrepancies in Bagnell's accounts and another detailing problems he found in the course of examining Davis' and Day's. Bagnell admits that Lovell did not tell Grzelak about the less serious discrepancies that he had found as to Davis' and Day's expense accounts (P. 12(n) P 105).
Lovell's memo in response to Grzelak's request (D. App. Ex. 13) concluded that Bagnell's records raised serious problems. In particular Lovell documented eight questionable practices, including:
. Receipt number 010565 for $ 95.00 from Marriott's Windows, Columbus, Ohio, was reported by Mr. Bagnell on July 13, 1991. . . . The Marriott faxed a copy of receipt 010565 which is for two breakfast buffets at a cost of $ 14.70.
. Receipt number 30614 for $ 65.00 from Cafe on the Promenade was reported by Mr. Bagnell on June 17, 1991. . . . The Ramada faxed a copy of receipt 30614 which is for breakfast at a cost of $ 9.35 on June 19th. In summary, he utilized the receipt twice; (1) on June 17 as entertainment for $ 65.00 and (2) on June 19 as breakfast for $ 9.35.
. On May 10, 1991, Mr. Bagnell reported two business meals at Ninety Nines Restaurant. One meal for $ 25.50 was reported on cash receipt number 19599. One meal for $ 50.02 was reported on a charge receipt 0195996. . . . I discussed these receipts with Craig at Ninety Nines Restaurant. He stated that receipt numbers 19599 and 0195996 were the same receipt. The "6" is a special code for the waitress.
Among Lovell's other listed concerns were instances where service establishment identifications had been torn off, dates had been altered and a $ 91.59 charge had been reported for drinks at a golf outing that Grzelak (who was in attendance) did not recollect Bagnell purchasing.
Within a few days after receiving Lovell's memo (on August 2) Grzelak called a meeting with Bagnell and Komatsu Dresser's Director of Human Resources Middleton to discuss the discrepancies. Bagnell admitted to making alterations in that some of the receipts were not an accurate reflection of the actual expenses, but he insisted that all of the money he claimed could be accounted for by legitimate business purposes (P. 12(n) P 110). Grzelak and Middleton were unpersuaded by what Bagnell had to say in his defense, and he was swiftly terminated on August 5 on the stated ground that he had violated Komatsu Dresser's policy proscribing falsification of expense accounts.
Several months before Bagnell's problems arose (sometime in early 1991) Komatsu Dresser's President Masahiro Sakane ("Sakane") had informed Grzelak that Ichiro (Ivan) Kimijima ("Kimijima") was arriving from Japan, where he had been working as Deputy General Manager of Sales for the parent company. Upon his arrival in April Kimijima assumed the position of Komatsu Dresser's Marketing Support Director. Then after Bagnell was fired Kimijima was selected to succeed him, and Kimijima's old job was turned over to Marius Favret.
To stave off summary judgment on his Title VII claim, Bagnell must either:
1. create a reasonable inference via direct evidence that anti-American animus motivated Komatsu Dresser to replace Bagnell or
2. absent such direct evidence, create a like reasonable inference via the familiar ping-pong approach dictated by McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802-04, 36 L. Ed. 2d 668, 93 S. Ct. 1817 (1973) as rearticulated in Texas Dep't of Community Affairs v. Burdine, 450 U.S. 248, 252-53, 67 L. Ed. 2d 207, 101 S. Ct. 1089 (1981).
In the latter respect St. Mary's Honor Center v. Hicks, 113 S. Ct. 2742, 2749, 125 L. Ed. 2d 407 (1993) has recently reconfirmed that if in the last step of the ping-pong approach the employee does show that the employer's proffered reasons are mere pretext, the trier of fact is permitted "to infer the ultimate fact of intentional discrimination," though such an inference is not compelled because the "ultimate burden of persuasion" remains with the employee at all times.
As for the level of proof required to defeat Komatsu Dresser's motion, Bagnell Mem. 4 asserts that "Bagnell prevails when he offers any, [sic] 'proof which casts doubt upon the veracity of the employer's stated reason for its action'" (quoting Stumph v. Thomas & Skinner, Inc., 770 F.2d 93, 98 (7th Cir. 1985)). To be blunt, that is dead wrong--it is a lesser variant of the error that the Supreme Court later corrected in St. Mary's Honor Center. As this Court had earlier explained in Conley v. University of Chicago Hosp., 1991 U.S. Dist. LEXIS 17836, at *14 (N.D.Ill.):
In a sense, then, Stumph's broad brush statement must be read in light of the direct evidence (though thin) suggesting a discriminatory mindset that was in the record there. For the Seventh Circuit cases essentially hold not that a plaintiff can survive summary judgment merely by casting a shred of doubt on the employer's stated reasons, but rather that the plaintiff must offer some nugget of proof adequate to suggest that a reasonable jury could find discrimination proven by a preponderance of the evidence.
That "nugget of proof" must consist of more than mere "naked assertions"--rather some specific record evidence must tend to establish intentional discrimination ( Powers v. Dole, 782 F.2d 689, 694 (7th Cir. 1986)).
In this instance Bagnell does not contend that he has offered up anything that can be described accurately as direct evidence of national-origin discrimination. Instead his claim is based on the indirect method, the first component of which is normally the establishment of a prima facie case--a task that Burdine, 450 U.S. at 253 describes as "not onerous." As Pilditch v. Board of Educ. of City of Chicago, 3 F.3d 1113, 1117 (7th Cir. 1993) has put it:
The initial elements of an indirect evidence prima facie case are relatively simple to prove, and are designed to see that the plaintiff can get beyond summary ...