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NEAL v. HONEYWELL

February 19, 1998

JUDITH A. NEAL, Plaintiff,
v.
HONEYWELL, INC., et al., Defendant.



The opinion of the court was delivered by: PLUNKETT

 Before us is a prolix stack of post-trial motions filed by both the plaintiff, Ms. Neal, and the defendant, Honeywell. The three-week trial which preceded them told the disturbing story of a munitions manufacturer (the Joliet Arsenal, a division of Honeywell) during the mid-1980's. Honeywell, unlike the arms maker who created a peace prize or who contributed profits to the poor, *fn1" manufactured defective shells, falsified its own test results, and repeatedly shipped faulty ammunition to the U.S. Army (a real life reenactment of the play All My Sons by Arthur Miller). To make matters worse, the jury found that Honeywell then retaliated against and forced out of the company the one individual with courage enough to bring the appalling practice to the attention of the company's top management. Ms. Neal was awarded $ 550,000 for emotional distress and $ 40,000 in lost wages for what the jury concluded was a violation of 31 U.S.C. § 3730(h) of the False Claims Act. *fn2"

 We turn to those post-trial motions, addressing first Honeywell's and then Neal's.

 I. Honeywell's Post-Trial Motions

 A. The jury's award of back pay should be stricken

 Here, Honeywell attacks with both barrels. It claims that the jury's finding of Neal's constructive discharge by Honeywell in early August 1987 is irreconcilable with the jury's finding that Honeywell's denial of Neal's promotion in April that year was not discriminatory. Alternatively, Honeywell posits that Neal's admitted refusal to accept lateral transfer opportunities constituted a failure to mitigate damages. We believe Honeywell misfires in both of its assertions and that the award of back pay was well within the province of the jury.

 In awarding back pay, the jury necessarily found that Neal had been discharged in or about early August of 1987. Here, the time line becomes important. Ms. Neal reported the falsification of ammunition records in early March. It was during this time (March and April 1987) that Neal was considering transferring to another Honeywell facility for reasons having little to do with her whistleblowing actions. During March and April she sought and received two offers (one from a Florida plant and one from Honeywell's headquarters in Minnesota). The offers disappointed Neal because she felt that both were simple lateral transfers and she was expecting a promotion with the transfer. She turned down both offers and stayed at the Joliet, Illinois arsenal. She left Honeywell over three months later in early August 1987. Neal testified (and no contrary evidence was ever offered by Honeywell) that during the three months between her decision not to transfer and her constructive discharge, her situation worsened at Honeywell. She was ignored by the in-house investigation by Honeywell, was ordered on a paid vacation for a month, and given nothing at all to do. She testified that she spent weeks sitting in her office watching the cows graze outside her window. The jury decided that when Honeywell offered a transfer to another of its facilities, it had little or nothing to do with its subsequent constructive discharge of Ms. Neal. Neal would have transferred with a promotion or raise but neither was offered. That scenario which the jury found to be non-retaliatory hardly means that Honeywell's subsequent conduct is somehow excused.

 Honeywell also argues that the failure to accept the lateral transfer was a failure to mitigate. Hardly. The jury could certainly find that Neal had no way of knowing she would be forced out months later. Thus, she could hardly be expected to anticipate Honeywell's action later on and begin mitigating damages before her departure. We recognize that an employee cannot claim constructive discharge if there were reasonable nondiscriminatory transfer offers. West v. Marion Merrell Dow, Inc., 54 F.3d 493, 497-98 (8th Cir. 1995) holds that an employee who fails to accept transfer to another facility at comparable position and salary fails to mitigate. But to repeat -- the transfer offers came before, during, and shortly after the retaliation began and long before Ms. Neal lost all of her responsibilities. Neal was assured by top Honeywell executives that she would be protected against repetition of Honeywell's premature disclosure of her identity and Young's threat. She was under no obligation to accept a lateral transfer when she anticipated she would be able to continue working at Joliet without further repercussions. No evidence suggests that the transfer offers were renewed by Honeywell in August when Ms. Neal felt forced to leave. Nor does it matter that Neal's "dream log" indicated she had decided to leave Honeywell by late April. The jury was entitled to accept her testimony that while she may have been thinking that way in April, she often vacillated on the issue. We simply do not believe that Neal's refusal to accept a lateral transfer in April (which she herself initiated) contaminates the jury's verdict finding a constructive discharge months later.

 B. Plaintiff's interim earnings

 Honeywell asks that the award of lost wages be eliminated because, in its view, the jury was confused in arriving at that award. The jury was asked on the verdict forms to enter the amount plaintiff would have earned had she not been constructively discharged. The jury answered "$ 50,000." The jury was asked to enter the amount that she could have earned in the exercise of reasonable diligence and it answered "$ 10,000." These findings, according to Honeywell, are nonsense. Experts for both sides took it upon themselves to opine on the amount Neal would have earned at Honeywell if she had stayed there until shortly before the trial. Each then calculated her actual earnings as a professor at the University of New Haven. Because they used radically different assumptions, one expert concluded that Neal experienced no lost wages, while the other opined that hundreds of thousands of dollars had been lost. Thus, Honeywell concludes, the amount of the verdict must have come from thin air.

 It is clear, however, what the jury did. It recognized the uncontested evidence that from August 1987 until September 1988, Ms. Neal was essentially unemployed, except for teaching one course during the spring semester at New Haven. Ms. Neal was earning around $ 40,000 or so when she left Honeywell in August, and the jury simply gave her fourteen months of back pay and subtracted her part-time teaching salary and other earnings during that period -- thus, the result of $ 50,000 lost wages and the $ 10,000 set off. But what about the experts? The jury accepted the testimony of neither; hardly surprising in light of the often highly suspect assumptions made by each. *fn3" It is true that the inquiry in the jury form may be read to inquire into the amount of wages lost from August 1987 to the present. But the jury was entitled to accept neither expert and conclude that after Ms. Neal became a full-time professor she was essentially as well off as she would have been if she had stayed at Honeywell. The jury could also have properly concluded that the plaintiff simply failed to prove any additional lost wages and rejected Honeywell's assertion she came out way ahead. We see no compelling reason to interfere with the jury's findings.

 C. The threats shown by the evidence cannot constitute a basis for constructive discharge or harassment

 In this section, Honeywell levels its heavy artillery at this Court, not the jury. It attacks the admission of evidence concerning a threat made against Ms. Neal as inadmissible hearsay. That threat was made by Mr. Young (Joliet's production manager) who reportedly voiced a desire to break the legs of the whistleblower (there were variations on the theme from other witnesses). Ms. Neal was not present when Young uttered his threat, but learned of it from her co-employee, a Mr. Long. "Hearsay" barks Honeywell and from that premise builds a somewhat convoluted argument to support its claim that allowing Ms. Neal to testify about what Long told her was inadmissible hearsay and reversible error.

 Honeywell's argument starts on a tangent. It notes that Young never named who the whistleblower was in his threat, and he may not have known her identity. So what? Young threatened the whistleblower, whoever he or she was, and that threat was relayed to Neal. Surely she could be frightened that Young would soon learn her identity. Other evidence in the trial showed her identity was hardly a carefully guarded secret. In any event, the fact is that the Court admitted Neal's recounting of what Long told her about Young's threat not for its truth, but to prove, true or not, the effect it had on Ms. Neal, whose state of mind was critical in determining whether there was retaliation, constructive discharge as well as much of the compensatory damages. The Court instructed the jury that it must not accept the utterance as true, i.e., that Young has threatened to break the legs of the whistleblower, but only consider the fact that Ms. Neal may have believed there was such a threat (so called "effect on hearer"). As it later developed, the jury learned that Young admitted making a threat to get the whistleblower. That evidence was admitted without objection and clearly proved the existence of a threat. *fn4" The only difference was that Young's recounting of his remark was somewhat gentler than what Long told Neal ("I'll get the whistleblower"). There is evidence that the threat occurred -- Young admitted it -- and there is evidence that it was conveyed to Neal by her coworker. The jury had to determine what threat was made and it was instructed not to use Neal's testimony about Long's report to prove that. But the jury was also to determine whether Neal was afraid, and it was entitled to rely on Long's story to Neal to determine if fear existed. We conclude the Honeywell shells have fallen short of their target.

 Honeywell goes on to argue that it reprimanded Young for his statement and thus Young's single threat cannot constitute a basis for a constructive discharge. See Saxton v. American Tel. & Tel. Co., 10 F.3d 526, 535-36 (7th Cir. 1993). This assertion is problematic since the evidence showed Young's "reprimand" bore an uncanny resemblance to a promotion. But in any event, the threat was only one of several actions by Honeywell from which the jury could reasonably conclude retaliation was in progress. And whether Young was reprimanded or not, there is precious little evidence that Neal knew about it or found any solace in it.

 Defendants' final salvo rests on the notion that none of Honeywell's acts individually are sufficient to constitute constructive discharge or harassment. This argument is a dud. First of all, the simple fact that Honeywell has an innocent, non-discriminatory explanation for the conduct means nothing after the jury rejected it. Secondly, Honeywell never does explain the largely uncontroverted testimony of Neal that for the last several weeks before she left, she was given nothing to do. *fn5" She sat looking out her window at a grazing cow. The jury would have been fully justified in concluding this, together with a paid but unrequested month's vacation, conveyed a clear message to Neal to get out. The jury would certainly be entitled to find Neal faced intolerable conditions which amounted to a constructive discharge. What job is worse than one with nothing to do?

 The plaintiff presented clear and substantial evidence of her emotional distress, which began at or near the time Honeywell first began to react to the whistleblowing (March or April 1987) and lasted until she began her first year as a college professor. *fn6" Ms. Neal explained her physical and psychological problems to the jury, and her psychologist, Doctor Tellefsen, supported that testimony. The diagnosis was clinical depression, and Ms. Neal's behavior after her discharge, particularly over the following year, provides a solid basis for an award of compensatory damages. But how much?

 The jury gave Ms. Neal $ 550,000 based on evidence that showed Ms. Neal was depressed and unable to work from August to December 1987. She obtained a part-time teaching job in January for the spring semester at a university and did well enough to be offered a full-time position the following fall. Even under the plaintiff's own argument, the major depression lasted for eight months and eased slowly thereafter. Ms. Neal never sought psychiatric help for her depression and certainly had recovered by the time she took on what she herself described as a highly demanding job as a professor at New Haven.

 The Seventh Circuit has established three criteria to evaluate whether a compensatory damage award warrants a new trial or remittitur.

 
(i) whether the award is monstrously excessive;
 
(ii) whether there is no rational connection between the award and the evidence; and
 
(iii) whether the award is roughly comparable to awards made in similar cases.

 Merriweather v. Family Dollar Stores of Ind., 103 F.3d 576, 580 (7th Cir. 1996). *fn7"

 Initially, we believe the verdict of $ 550,000 is monstrously excessive and has no rational basis in the evidence. Viewing the evidence in the most favorable light to Ms. Neal, we find a plaintiff who was, admittedly, having trouble in her marriage and was dealing with a son who had a drug habit. She was understandably upset with her treatment at Honeywell after she reported the falsification of records. She could have been found to be concerned about Honeywell's failure to protect her identity and a threat from her supervisor. After she resigned at Honeywell, she left her husband and tried living with an old boyfriend. That was a failure. After returning to New Haven in the late summer, the clinical depression that Ms. Neal did suffer ended when she began full-time an admittedly demanding teaching career. Ms. Neal never sought help from psychologists or psychiatrists during any of this time. She may have suffered a serious wound, but it healed ...


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