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Merriweather v. Family Dollar Stores of Indiana

December 26, 1996






Appeal from the United States District Court for the Southern District of Indiana, Indianapolis Division.

No. IP93-511-C (H/G)

Before CUDAHY, COFFEY, and FLAUM, Circuit Judges.

COFFEY, Circuit Judge.

David F. Hamilton, Judge.

ARGUED MAY 15, 1996


Plaintiff Phyllis Merriweather sued defendant Family Dollar Stores under Title VII and 42 U.S.C. sec. 1981 for intentional race discrimination in denying her promotions, and for retaliating by firing her after she filed a complaint of discrimination. Following a bench trial, the district court found that Family Dollar did not discriminate against Merriweather, but unlawfully retaliated when it terminated her. The court awarded Merriweather back pay in the amount of $3,958, $25,000 compensatory and $25,000 punitive damages, and attorney fees. Family Dollar appeals, claiming that (1) the award of $25,000 compensatory damages for emotional distress and humiliation is not rationally related to the evidence; (2) the evidence is insufficient to support an award of punitive damages based on reckless indifference to Merriweather's civil rights; and (3) the attorney fees should be reduced by half because the unsuccessful discrimination and successful retaliation claims were unrelated. We affirm the district court as modified.


According to the facts developed at trial, defendant Family Dollar Stores of Indiana operates seventy retail merchandise stores in Indiana. On November 27, 1991, Phyllis Merriweather, an African-American woman, was hired as a part-time clerk to work twenty hours per week at the Family Dollar Store No. 1402 in Indianapolis. Store 1402 was located in a predominantly African-American neighborhood. At the time Merriweather was hired, all the employees at Store 1402 were black, with the exception of the store manager, a white male. Merriweather had a B.A. degree in human resources with a concentration in retailing, and several years of experience in merchandising, customer service, and sales. At Family Dollar, Merriweather received a starting (minimum) wage of $4.35 per hour, which was increased to $4.50/hour upon her successful completion of a three and one-half month probationary period, and turned out to be the only raise Merriweather received during the term of her employment.

According to Merriweather's complaint filed in April, 1993, she alleged that in December of 1991, after seeing a Family Dollar Store advertisement for management trainees in a local newspaper, she submitted a resume to Jerry Blizzard, the company's district manager, a white male, seeking full time employment, preferably in a management position. Blizzard informed Merriweather that there were no promotional opportunities at Store 1402 at that time, and that if she was looking for advancement she would not find it at that store. She was further advised that Family Dollar hired clerks only on a part-time basis.

The trial court found that on December 12, 1991, Family Dollar hired Thomas Waak, a white male who had been managing a "Big Lots" store (a Family Dollar competitor) in Indianapolis, to manage Store 1402. According to the company, the store had been poorly managed, and Waak was hired in hopes of improving quality and sales. A few days after he took over the job, Waak hired Nancy Wynne and Karen Lafollette, both white women, and Greg Rush, a black male, as part-time clerks. All three had worked for Waak at Big Lots and, according to Waak, he wanted to bring them with him as part of his "team" to improve Store 1402. The trial court concluded that Waak was entitled to make this personnel decision, based on his personal familiarity with Wynne, Lafollette, and Rush, and his confidence in their work. Lafollette's starting wage was $4.60, while Wynne started at $4.50/hour. Despite Blizzard's comments to Merriweather that there was no room for advancement at Store 1402, the district court found that Wynne received a de facto promotion less than a month after she started working at Store 1402: she was given full time hours, worked overtime most weeks, and was entrusted with additional responsibilities which gave her supervisory authority over the other employees. Less than three months after she had been hired, Wynne was formally promoted to full-time status, with a pay increase to $4.80/hour. Three weeks later, Store 1402's floor manager, a black male, was terminated. Waak offered this position, with a wage of $6.00/hour, to Rush. When Rush turned down the position, Waak gave the promotion and accompanying wage increase to Wynne. Wynne, according to the findings of the trial court, was neither a high school graduate, nor did she have any previous supervisory or managerial experience. Waak later testified that he did not consider Merriweather for the floor supervisor position.

The trial court also found that Merriweather and at least two other black employees complained about Wynne's extra hours to both Waak and Blizzard. On February 26, 1992, after the company refused to reconsider the matter, Merriweather filed a complaint with the Indiana Civil Rights Commission, alleging race discrimination in Wynne's promotion to floor supervisor. Between February and November of 1992, Merriweather unsuccessfully sought a pay raise on at least two occasions. All other employees who had worked at Store 1402 more than five months received at least one pay raise and earned more than $4.50/hour. By November, Merriweather was the lowest-paid employee at Store 1402; several part-time clerical employees who had worked at the store less than six months made more money than she. It is also interesting to note that Merriweather never received a written evaluation of her work while she was employed at Family Dollar, nor did she receive any warning, oral or written, that her job was in danger. Waak testified that Merriweather was qualified for the floor supervisor position, and that he considered Merriweather a satisfactory employee who presented no problems on the sales floor or in dealing with customers.

On November 21, 1992, Merriweather met with Waak because she believed she had been short-changed on her most recent paycheck. At this time, they got into a heated discussion, and Merriweather again brought up the subject of a pay raise, which she believed was overdue. Waak suggested that she should talk to Blizzard, the district manager, about this problem. Accordingly, when Blizzard arrived at Store 1402 later that day, Merriweather spoke to him. He responded by querying her about two supposed disputes she had with Wynne and another employee. He also inquired what she intended to do about the discrimination charge she had filed with the Indiana Civil Rights Commission. Merriweather responded that the Commission was handling the matter, and she did not want to discuss it. Immediately thereafter, Blizzard told Merriweather he was terminating her employment.

After Family Dollar terminated Merriweather, she registered with temporary agencies and also looked for a full-time job, but was unable to find any work comparable to the floor supervisor position in which she was interested. A few months after her discharge, Merriweather received counseling and medication for stress. The counseling records reflect that she suffered considerable stress, accompanied by bouts of crying and insomnia, as a result of being unemployed, her inability to find a new job, and anger stemming from her belief that Family Dollar had discriminated against her. The clinic records also reflected that these were not the ...

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