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PERRY v. COMMUNITY ACTION SERVICES

January 26, 2000

MICHAEL PERRY, PLAINTIFF,
V.
COMMUNITY ACTION SERVICES, DEFENDANT.



The opinion of the court was delivered by: Bucklo, District Judge.

MEMORANDUM OPINION AND ORDER

Plaintiff entered into an employment agreement with the defendant which was terminated four months after it was executed. He sues for race discrimination and breach of contract. Defendant moves for summary judgment on all claims, which I deny; plaintiff moves for summary judgment based on breach of employment contract, which I grant in part, and for a protective order, which I deny.

I. Background

The defendant, Community Action Services, Inc. ("CASI"), is a not-for-profit organization that provides community-based busing for school children. The plaintiff, Michael Perry, began working with CASI in 1985 when CASI contracted with ATE Management Company ("ATE"), a management consulting and placement firm servicing the transportation industry. In spring of 1996, CASI's business relationship with ATE ended; Mr. Perry continued at CASI with another agency. Although not an "employee" in the strict sense, Mr. Perry ran CASI's operations on a day to day basis for approximately twelve years. In April 1997, CASI and Mr. Perry entered into an employment agreement (the "Agreement") whereby Mr. Perry worked directly for CASI as President and Chief Executive Officer ("CEO"). The Agreement was signed by Mr. Donaldson, then the acting chairperson of the CASI Board of Directors (the "Board"). Mr. Perry is white, and Mr. Donaldson is African-American, as were all but one of the members of the Board at the time Mr. Perry's contract was signed.

In the summer of 1997, friction arose between Mr. Perry and the Board, specifically Chairperson Donaldson, about the management of CASI. The Board ordered Mr. Perry to release two employees, an accountant and a management supervisor, who were white. He disagreed with this decision. On July 15, 1997, the Board passed a motion to renegotiate Mr. Perry's employment agreement. At a September 9, 1997 board meeting, Mr. Donaldson suggested that CASI increase its minority representation in management and move some of its funds to a minority-owned bank.

On September 12, 1997, Mr. Perry sent a letter to Mr. Donaldson and Mr. Robert Wharton, the President of the Community Economic Development Association ("CEDA"), which expressed his disagreement with recent Board actions and belief that the safety and fiscal soundness of CASI were at risk and could no longer be personally guaranteed by him. CEDA had founded CASI to provide transportation services for its Head Start program, and CASI's contract with CEDA was its primary source of income. CEDA also maintains a significant presence on CASI's Board of Directors.

On September 30, 1997, the Board voted to terminate Mr. Perry's employment with CASI effective October 1, 1997, pursuant to paragraph 9C of the Employment Agreement and sent him a letter to this effect. Mr. Perry received a severance payment equivalent to six months' salary. Mr. Perry's former functions have been outsourced by CASI to independent contractor Ernest R. Sawyer Enterprises, which has placed an African-American as acting general manager of CASI.

Mr. Perry filed this action alleging race discrimination in violation of Title VII and breach of contract under Illinois law by CASI. The parties have filed cross motions for summary judgment.

II. Standard of Review

Summary judgment is appropriate where there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Fed. R.Civ.P. 56(c); Lexington Ins. Co. v. Rugg & Knopp, 165 F.3d 1087, 1090 (7th Cir. 1999). I review the entire record, drawing all reasonable inferences from the record in the light most favorable to the nonmoving party. Cornfield by Lewis v. Consolidated High School Dist. No. 230, 991 F.2d 1316, 1320 (7th Cir. 1993). The party opposing the motion, however, must make a showing sufficient to establish any essential element for which it will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

III. Title VII Claims concerning Mr. Perry's Termination

Under Title VII, it is unlawful for an employer "to discharge any individual . . . because of such individual's race." 42 U.S.C. § 2000e-2(a)(1)(1988). The Supreme Court has held that Title VII applies to white employees as it does to all races. McDonald v. Santa Fe Trail Transp. Co., 427 U.S. 273, 96 S.Ct. 2574, 49 L.Ed.2d 493 (1976); Hill v. Burrell Communications Group, Inc., 67 F.3d 665 (7th Cir. 1995).

A plaintiff may present direct or indirect evidence to demonstrate unlawful race discrimination. Direct evidence is evidence of bias "that can be interpreted as an acknowledgment of discriminatory intent by the defendant or its agents." Troupe v. May Dep't Stores Co., 20 F.3d 734, 736 (7th Cir. 1994). The direct evidence of racial discrimination offered by Mr. Perry consists of statements made by Chairperson Donaldson.*fn1 During a Board meeting, Mr. Donaldson announced his goal for CASI to place some funds in a minority-owned bank and "to bring more African-Americans and minorities into the process because that's who we service, that's our mission. And even to the point of hiring people here in this agency, especially on the upper-echelon of management. That's what we're going to do." Mr. Perry claims that he was the only person in upper management at CASI, and so, as a white man, did not fit the mission of CASI as conceived by Mr. Donaldson. As a result, he was terminated and replaced with an African-American manager with less experience. CASI argues that this innocuous statement is taken out of context and is insufficient to demonstrate any discriminatory animus. CASI also disputes Mr. Perry's claim that he is the only upper management employee or that there were no white managers.

For purposes of this motion, I must accept that Mr. Perry was the only person in the "upper echelon" of CASI's management. Moreover, Mr. Donaldson's statement was made only three weeks before Mr. Perry was terminated. A reasonable trier of fact could conclude that this statement, which dealt explicitly with employment and was made by an aggressive Chairperson who was admittedly taking a more active role in the management of CASI, was probative of discrimination and "causally related to the discharge decision making process." Geier v. Medtronic, Inc., 99 F.3d 238, 242 (7th Cir. ...


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