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Date: 01-20-2008

Case Style: Greg Goldsmith v. Bagby Elevator Company, Inc.

Case Number: 06-14440

Judge: Pryor

Court: United States Court of Appeals for the Eleventh Circuit on appeal from the Northern District of Alabama, Jefferson County

Plaintiff's Attorney: Unknown

Defendant's Attorney: Unknown

Description: Forty-five years ago, "the civil rights movement swirled into Birmingham, a city whose bitter resistance to change made it a battleground." Jack Bass, Unlikely Heroes 201 (1981). Dr. Martin Luther King Jr. remarked, "If we can crack Birmingham, I am convinced we can crack the South. Birmingham is a symbol of segregation for the entire South." Id. By blood, toil, and tears, segregation was, of course, cracked in Birmingham, and today the city is led by its fourth black mayor and a majority-black city council. Against this historical backdrop, this appeal from the Northern District of Alabama offers, amid a host of technical issues, an important reminder: despite considerable racial progress, racism persists as an evil to be remedied in our Nation.

The main issue in this appeal is whether Bagby Elevator Company was entitled to a judgment as a matter of law against Greg Goldsmith's claim of retaliation when it is undisputed that Goldsmith's employment was terminated based on his refusal to sign a dispute resolution agreement that applied to his charge of racial discrimination pending with the Equal Employment Opportunity Commission. Bagby Elevator appeals a jury verdict that awarded compensatory and punitive damages to Goldsmith based on his complaint of both racial discrimination and retaliation. See 42 U.S.C. 1981; 42 U.S.C. 2000e2000e- 17. In Weeks v. Harden Manufacturing Corp., 291 F.3d 1307 (11th Cir. 2002), we ruled that a refusal to sign an arbitration agreement was not a protected activity that could support a claim of retaliation, but we did not address an employee's refusal to sign an agreement that applied to a pending charge of discrimination. Goldsmith was willing to execute an amended dispute resolution agreement that would not have applied to his pending charge, but Bagby Elevator insisted that Goldsmith sign an agreement that applied to the pending charge and fired him immediately after he refused to do so. We conclude that Bagby Elevator was not entitled to a judgment as a matter of law against Goldsmith's claim of retaliation because there was sufficient evidence of a causal relation between the filing of his pending charge and later termination. As a result, we need not decide any issue about the verdict regarding Goldsmith's alternative claim that he was terminated based on his race.

Bagby Elevator also challenges several other rulings of the district court, including rulings regarding the admissibility of evidence, and the awards of punitive damages, attorney's fees, and costs to Goldsmith, all of which we affirm. The district court did not abuse its discretion in four of its evidentiary rulings: (1) evidence that Bagby Elevator discriminated and retaliated against Goldsmith's coworkers was relevant to prove the intent of Bagby Elevator to discriminate and retaliate and supported Goldsmith's claim of a hostile work environment; (2) evidence that Arthur Bagby III, the owner and president of Bagby Elevator, uttered the racial slur "nigger" in the presence of the employee who fired Goldsmith, but outside the workplace, suggested both that the employee who heard these comments had reason to believe that racial discrimination was tolerated at Bagby Elevator and that the antidiscrimination policy of Bagby Elevator was ineffective; (3) the testimony of a courtroom deputy that Arthur Bagby said to an employeewitness, "Go get 'em champ," immediately before the witness testified was not unduly prejudicial; and (4) the determination of the EEOC that there was reason to believe that Goldsmith's charge of discrimination was true was admissible based on our well-established precedents. We affirm the award of punitive damages, because there was sufficient evidence at trial that Bagby Elevator was recklessly indifferent to Goldsmith's federal rights and the ratio of that award to the award of compensatory damages, which is 9.2 to 1, is not so excessive as to violate due process. We also affirm the award of attorney's fees to Goldsmith who won substantial relief for his related claims against Bagby Elevator.


Before we address the merits of this appeal, we review two matters. First, we review the trial record regarding the relevant facts. Second, we review the procedural history of this litigation.

A. Facts

In March or April 1998, Bagby Elevator hired Goldsmith, a black man, to work in its shop in Birmingham, Alabama, as an elevator fabricator. Ron Farley, the shop foreman, offered Goldsmith the job and became Goldsmith's supervisor. In his employment with Bagby Elevator, Goldsmith delivered parts to job sites throughout the southeastern United States and assisted with the installation of those parts. As a fabricator, Goldsmith was also required to build elevator parts. Goldsmith also performed special projects for Arthur Bagby, which included building a wicket driver and installing lighting and light diffusers at Arthur Bagby's house.

Goldsmith performed his job well. He was assigned the majority of the duties of manufacturing specialty parts and items for elevators. Goldsmith received several raises in pay based on Farley's recommendations, and Bagby Elevator later designated Goldsmith as a lead man in the shop. Goldsmith enjoyed his work but testified that his employment was tainted by a racially hostile atmosphere.

Farley uttered racial slurs at work, but Goldsmith's complaint about Farley's slurs was rebuffed. In February 2001, Curlie Thomas, a black employee of Bagby Elevator, told Goldsmith that Farley had said to Thomas, "If I give a nigger ice cream, would he eat it?" Goldsmith reported Farley's racial slur to Vice President Arthur Steber, who told Goldsmith, "I've already heard." Goldsmith expressed concern about working with Farley and asked Steber if there was any reason that he needed to be worried about his job after learning of Farley's racial slurs. Steber replied, "Well Goldie, you know, that's just the way Ron [Farley] is. You are just going to have to accept it." Farley continued to supervise Goldsmith.

Farley's racial slurs at work continued to offend Goldsmith. Sometime after his complaint to Steber, Goldsmith went to Farley's office and overheard Farley say in a telephone conversation with a white employee, "Howard, them niggers are crazy. Them some of the dumbest niggers I ever seen in my life." Goldsmith opened Farley's office door after Farley uttered the racial slur, handed Farley a folder, shook his head, and walked out of Farley's office. Goldsmith testified that he did not report this comment because Steber had already told Goldsmith that he would have to accept Farley's behavior.

Farley's nephew, David Walker, also contributed to the racially hostile atmosphere that Goldsmith experienced while employed at Bagby Elevator. Goldsmith worked in the shop with Walker, who is white, and heard Walker utter racial slurs. Goldsmith heard Walker call Anthony Jemison, a black man who worked with them, a "monkey" on several occasions. Goldsmith also heard Walker tell Jemison, "Monkey, get back in your cage." Larry Isbell, a white employee who worked in the shop, also heard Walker's "monkey" comments. Walker told Goldsmith that Walker and Farley were "going to fuck them a black lady before they die." On one occasion, Goldsmith, Walker, Isbell, and Jemison sat together during a break and Walker said, "You know, I really never liked black folks no how."

In addition to uttering racial slurs, Walker threatened Goldsmith with violence. Specifically, Walker told Goldsmith that Walker was going to make Goldsmith's son an orphan. Isbell overheard this comment by Walker and reported it to Farley because Isbell feared that Walker was going to kill Goldsmith. Isbell told Farley that there was "bad blood" between Goldsmith and Walker. Farley said he would not do anything except separate Walker and Goldsmith. Farley did not separate Walker and Goldsmith, and they continued to work together after this incident.

Goldsmith also believed that his efforts to obtain a promotion were hampered by racial barriers at Bagby. When Goldsmith applied to Larry Gardner at the union for a higher-paying field position, Gardner reported to Goldsmith that Johnny Bowden, the purchasing manager at Bagby Elevator, had said they would not interview Goldsmith for the position because "they don't mix the front and the back." Goldsmith testified that the majority of workers in the shop were black and that Bagby Elevator never had a black employee in the field.

Bagby Elevator had an antidiscrimination policy that was printed in the employee handbook issued to all employees. There were three versions of the employee handbook, one issued in 1995 and two revised versions issued in 1998 and 2000, and all three contained the policy against the use of racial slurs. The 2000 version of the handbook explained the antidiscrimination policy in a section entitled "Equal Employment Opportunities":

The company does not discriminate on the basis of a person's race, religion, color, age, sex, national origin, handicap or disability regarding any term or condition of employment including but not limited to hiring, training, on-the-job treatment, promotion, discipline, and termination. It is the responsibility of all employees to practice fair treatment toward everyone at all times. Any violation of these equal opportunity policies by any employee must be reported immediately to management.

The policy against and process for reporting harassment, including racial slurs, was explained as follows in a section of the handbook entitled "No Harassment Policy":

The company's position is that harassment is a form of misconduct, which undermines the integrity of the employment relationship. No employee should be subject to unsolicited and unwelcome conduct, either verbal or physical.

Bagby Elevator Company, Inc. does not and will not tolerate harassment of our employees. The term "harassment" includes, but is not limited to slurs, jokes, pranks, signs, and other verbal, graphic, or physical conduct relating to an individuals [sic] race, color, sex, religion, national origin, citizenship, age, handicap or disability.

. . . .

Harassment, whether committed by supervisory or non-supervisory personnel, is specifically prohibited as unlawful and against stated company policy. In addition, the company's management is responsible for taking action against acts of harassment and investigating all complaints of harassment.

. . . .

If you believe that you have been harassed in any way by an employee, supervisor or manager, customer or vendor, you should report such conduct to your immediate supervisor or the company's ranking personnel representative, April/Office Manager. It is the responsibility of the facility's ranking personnel representative to provide guidance, investigate the charges of impropriety, and recommend appropriate action. All claims must be thoroughly investigated. General Manager will provide guidance and assistance [with] [sic] the proper handling or any and all allegations. The matter will be promptly and thoroughly investigated and where appropriate, disciplinary action will be taken. If an employee registers a complaint of harassment with the Office Manager, his/her supervisor or a management official, he/she will not be penalized in any way for reporting such conduct.

Although Bagby Elevator maintained an antidiscrimination policy, its effectiveness was dubious. Bowden testified that there had been a policy against the utterance of racial slurs in the workplace during the eleven years that he had worked at Bagby Elevator, but Bowden admitted that the policy did not prevent Farley, who received a copy of each handbook, from uttering racial slurs in the workplace. Arthur Bagby testified that he was not "that good on the [antidiscrimination] policy," and he admitted that he did not know how he would discipline a supervisor for using racial slurs. Goldsmith testified that Bagby Elevator did not provide training regarding discrimination in the workplace. Goldsmith offered additional evidence that the antidiscrimination policy of Bagby Elevator was ineffective. Bowden testified that, if Farley had uttered another racial slur at work after the September 2000 reprimand, Farley would have been fired. There was evidence that Farley was reprimanded again in February 2001, but he was not fired. Goldsmith argued during closing arguments that Bagby Elevator never intended to fire Farley because it did not enforce its antidiscrimination policy and "wanted to keep them [black employees] down." On October 5, 2001, Goldsmith filed his first EEOC charge. The charge alleged that Bagby Elevator discriminated against him on the basis of race, subjected him to a racially hostile work environment, and failed to promote him to a field position on the basis of race. Goldsmith named Farley as the harasser, and Goldsmith stated that he had complained to Steber to no avail. In November 2001, Bagby Elevator responded to Goldsmith's EEOC charge and to other EEOC charges filed by Goldsmith's coworkers.

Before he filed his first EEOC charge, Goldsmith had never been reprimanded by Bagby Elevator but he was disciplined several months after he filed a charge of discrimination. On April 26, 2002, Bowden and Jerry Wilmas, another supervisor, reprimanded Goldsmith in writing ostensibly because he had been absent from work on April 25, 2002, and did not call Bagby Elevator in advance of his absence. Goldsmith testified that he had told Wilmas that he was going to miss work that day and had recorded his anticipated absence in a calendar that employees used to provide notice of days they intended to miss work. Walker, a white employee, also recorded a day in the calendar on which he was absent in April, and he was not reprimanded after he missed work that day.

On June 6, 2002, sixteen days after our decision in Weeks, an employee of Bagby Elevator, Alan Webster, gave Goldsmith a document entitled "Dispute Resolution Agreement," which was an agreement to arbitrate all "past, present, and future" claims against Bagby Elevator. Goldsmith was instructed that he had to sign and return the agreement by the next day. Bagby Elevator required all employees to sign the agreement and argued both at trial and on appeal that, under Weeks, the requirement that all employees sign the agreement could not support a claim of retaliation.

Goldsmith refused to sign the agreement, and initially Isbell refused to sign it too. Steber told both Isbell and Goldsmith that, if they refused to sign the agreement, they would be fired. Both men packed their belongings and left to enter their vehicles.

In the end, Isbell signed the agreement after being urged to reconsider, but Goldsmith was treated differently. After Isbell packed his belongings, Bowden stopped Isbell from leaving the shop and told Isbell that he should not resign because of the agreement. Bowden urged Isbell to talk to someone about the agreement. Isbell later signed the agreement after he consulted a union representative, and Bagby Elevator did not fire him when he returned the signed agreement the next day. Bowden did not ask Goldsmith to reconsider. Goldsmith contended during trial that Bowden's failure to ask Goldsmith to reconsider suggested that supervisors at Bagby Elevator wanted to convince white employees, but not black employees, to remain at Bagby Elevator.

Goldsmith proposed amending the agreement. On June 6, 2002, Goldsmith's lawyer revised the agreement to exclude its application to any of Goldsmith's pending claims by crossing out the words "past" and "present." Goldsmith returned to Bagby Elevator on June 7, 2002, and was escorted to Steber's office by Bowden, who did not talk to Goldsmith about the agreement.

Goldsmith handed Steber a letter from his attorney that requested that the words "past" and "present" be removed from the agreement before Goldsmith signed it. Goldsmith told Steber that he would sign a version of the agreement that had been amended to omit the words "past" and "present" and gave Steber the amended version. Goldsmith wanted to remove these words because he did not want the agreement to apply to his pending EEOC charge.

Steber and the general counsel for Bagby Elevator, Hunter Bagby, refused to accept Goldsmith's amended agreement. Steber told Goldsmith that Steber would consider Goldsmith to have resigned if Goldsmith did not sign the agreement. Steber told Goldsmith that everyone, including himself and Arthur Bagby, had to sign the agreement, that it was a new policy of Bagby Elevator, and that the lawyers of Bagby Elevator had recommended this change.

Goldsmith did not sign the agreement and refused to resign, but Steber fired him. Steber told Goldsmith to leave the premises, and Bowden escorted Goldsmith off the premises. Steber knew when he fired him that Goldsmith was the only employee with a charge of discrimination pending with the EEOC.

Goldsmith filed his second EEOC charge on June 7, 2002. The charge alleged racial discrimination, wrongful termination on the basis of race, and retaliatory termination. On September 30, 2002, the EEOC issued a cause determination with three findings: (1) Bagby Elevator had retaliated against Goldsmith for filing an EEOC charge by disciplining and firing Goldsmith in violation of Title VII; (2) Bagby Elevator had discriminated against Goldsmith with respect to a promotion because of his race in violation of Title VII; and (3) Bagby Elevator had subjected all black employees as a class to a racially hostile work environment in violation of Title VII.

After Goldsmith was terminated, he filed a claim for unemployment benefits, which was initially denied because of opposition by Bagby Elevator. Bagby Elevator withdrew its opposition after Goldsmith appealed the denial of his unemployment benefits. Hunter Bagby and Steber both acknowledged that Bagby Elevator withdrew its opposition to Goldsmith's award of benefits because they believed that Goldsmith had a right to refuse to sign the agreement. During his closing argument, Goldsmith argued that this evidence proved how far Bagby Elevator was willing to go to retaliate against employees who complained about racial discrimination.

Other black employees at Bagby Elevator testified that they also suffered racial discrimination at work. Thomas testified that he heard racially offensive comments while he worked at Bagby Elevator. When Thomas and Farley were on an errand one day, Farley told the store cashier, "Look, I bought me a slave." On another occasion, Thomas overheard Farley say to a white employee, "If you think you could teach a nigger to eat ice cream, would he?" Bowden came into the break room on another occasion when several black employees, including Thomas and Goldsmith, were eating and said, "I thought y'all ate hot sauce with y'all's chicken."

Although Bagby Elevator presented evidence that it had reprimanded employees who uttered racial slurs, Goldsmith presented evidence that suggested that these employees were never reprimanded. Thomas reported Farley's slur about ice cream to his supervisor, Wilmas, who told Thomas to report the slur to Bowden. Bowden told Thomas that the incident had already been handled and that Thomas should not tell anyone else about it, which Goldsmith contended at trial suggested that nothing was done at all. Bowden, who was responsible for hiring and firing at Bagby Elevator in 2000, testified that he reprimanded Farley after Thomas reported Farley's racial slur on September 14, 2000. Bowden had consulted Steber before he issued Farley a written reprimand. Bowden testified that he reprimanded Farley in writing because Farley admitted that he made the racial slur. Bowden wrote "Verbal warning was issued in the presence of everyone in the department" on Farley's written reprimand, but Bowden admitted at trial that Farley was never verbally reprimanded in front of all shop employees and could not explain why he wrote that sentence. Farley did not sign the reprimand, and no one signed as a witness, as the document required. During closing argument, Goldsmith argued that this evidence proved that Farley was never reprimanded and that Bagby Elevator manufactured evidence to cover acts of discrimination.

One employee who reported racial slurs was fired before his resignation became effective. In March 2001, Thomas submitted his resignation, which became effective two weeks after submission, because he had been denied a raise, had endured hearing racial slurs in the workplace, and had obtained another job. One week later, Bowden reported that he had seen Thomas try to "run someone off the road" in a Bagby Elevator truck, and Bowden recommended that Thomas's resignation be accepted immediately. Bowden told Thomas what he had seen and terminated Thomas's employment. Thomas denied driving recklessly and testified that he was terminated six weeks after he complained about Farley's ice cream comment to Bowden.

Anthony Jemison, a black man who worked in the shop with Goldsmith, was also fired after he reported Farley's racial slurs. Jemison filed an EEOC charge on October 30, 2001, in which Jemison complained about racial slurs uttered by his supervisor, Farley. Jemison's employment was terminated on December 20, 2001, for an alleged frolicking detour in a Bagby Elevator truck. Steber was aware of Jemison's complaints, but Steber allowed Farley to participate in the decision to terminate Jemison's employment.

Latrinda Peoples, a black woman, testified that she also suffered racial discrimination at Bagby Elevator. Peoples began working for Bagby Elevator as a filing clerk in October 1997. She was promoted to the position of permanent payroll clerk. Peoples was later demoted to a billing clerk position and trained her replacement, a white woman who was paid more money than Peoples. During her employment at Bagby Elevator, Peoples saw payroll documents that established that Bagby Elevator paid its white employees more than its black employees for the same duties. As part of her employment, Peoples took the payroll checks to Arthur Bagby, for his signature. Peoples testified that she would speak to Arthur Bagby but he would never speak to her, even though Peoples often saw Arthur Bagby socialize with white employees. Peoples also testified that she and another black employee were told to wash dishes after company picnics or cookouts.

Peoples filed an EEOC charge on October 31, 2001, that alleged discrimination on the basis of race and gender, and she, like other black employees, was treated differently by Bagby Elevator after she filed this charge. Before Peoples filed her EEOC charge, she testified that she had never been reprimanded by Bagby Elevator, she had always received good performance evaluations, and there had been no criticisms of her work. After Peoples filed her EEOC charge, Shirl Braswell, who was Peoples's supervisor, and Steber met with Peoples and required her to sign a promissory note and pay interest on an existing employee salary advance, which she had never been required to do for previous advances. Braswell also reprimanded Peoples in writing for removing from her paychecks the automatic deductions that were used to repay the salary that Bagby Elevator had advanced to her, but Peoples denied that she removed the deductions without authority from a supervisor. Peoples testified that, after she filed her EEOC charge, she was warned about having visitors at work but other white employees were not similarly warned. Peoples also testified that after she filed her EEOC charge she received more of the workload. Peoples was fired on May 24, 2002, for alleged insubordination.

Goldsmith called both Steber and Arthur Bagby as witnesses. Steber denied ever having heard Hunter or Arthur Bagby call Goldsmith a "nigger" or having heard anyone at work utter that term, but Steber later testified that he had heard Arthur Bagby utter the racial slur at the Birmingham Country Club. Arthur Bagby admitted that he had uttered the slur "nigger" in the past, denied uttering the slur at the country club, and testified that he had never heard Farley utter a racial slur.

Goldsmith called James Ward, field supervisor of Bagby Elevator, to testify that Ward had liked Goldsmith's work and wanted to hire him in the field. Ward testified that he was unaware of the policy of Bagby Elevator that the company did not move shop workers to the field until he spoke with management at Bagby Elevator about moving Goldsmith from the shop to the field as a probationary helper. Ward also testified that there were no black probationary helpers employed at the Birmingham location of Bagby Elevator. Ward testified that he had heard white field employees utter racial slurs but he did not reprimand them.

After Ward testified, the district court reported to the attorneys that, when Tammi McFall, the courtroom deputy, went to the witness room to escort Ward to the witness stand, she overheard Arthur Bagby, Ward's boss and current CEO and chairman of the board of Bagby Elevator, tell Ward, "Go get 'em, champ." The district court reminded counsel that it had asked McFall to report any comments that she heard outside the presence of the court and McFall had consistently done so. The district court further stated that the courtroom deputy did not have instructions to report what she "thinks is appropriate or inappropriate," but that she had instructions to report anything said to her to the court. McFall had previously reported inappropriate comments made by a black juror, and the juror was dismissed based on these comments.

After witnesses who were members of Bagby Elevator management denied hearing this comment, the court permitted Goldsmith to call McFall to impeach the testimony of managers of Bagby Elevator. Goldsmith recalled Ward to the stand to question him about the comment, and Ward admitted that he was in the witness room with Arthur Bagby but stated that he did not remember the comment. Goldsmith then called McFall to testify, over the objection of Bagby Elevator that she was a court employee and would present prejudicial testimony. McFall testified about Arthur Bagby's comment.

B. Procedural History

Goldsmith filed his complaint on May 2, 2003. Goldsmith's complaint alleged that he suffered racial discrimination in his employment and included claims of a hostile work environment, failure to obtain a promotion, wrongful termination, and retaliation. 42 U.S.C. 2000e2000e-17; 42 U.S.C. 1981. Goldsmith sought lost wages and benefits as a result of being denied a field position and being terminated. He also sought injunctive relief, compensatory damages, punitive damages, attorney's fees, expenses, and costs.

On June 8, 2006, Goldsmith filed a motion to amend the complaint to add a claim that Bagby Elevator had engaged in a pattern and practice of retaliation and race discrimination. Bagby Elevator opposed the motion. That same day the district court granted Goldsmith's motion for leave to amend.

On June 13, 2006, the trial began and lasted until June 16, 2006. At the close of Goldsmith's case, Bagby Elevator moved for judgment as a matter of law on all claims. The district court dismissed the retaliation claim regarding Goldsmith's allegation that he had been reprimanded by Bagby Elevator, dismissed the pattern and practice claim, and denied the motion as to all other claims. At the close of all evidence, Bagby Elevator renewed its motion for a judgment as a matter of law, and the court denied the motion.

The jury returned a verdict in favor of Goldsmith on his claims for wrongful termination based on race and retaliatory termination for filing an EEOC charge. The jury awarded him $27,160.59 in back pay, $27,160.59 in damages for mental anguish, and $500,000 in punitive damages. Goldsmith did not prevail on his failure to promote claim. The jury determined that, although Goldsmith had worked in a racially hostile environment, which had been permitted by a supervisor, Goldsmith had not been damaged as a proximate result of that environment.

On June 26, 2006, the district court entered judgment in accordance with the jury verdict. On July 7, 2006, Bagby Elevator filed a post-trial motion for a judgment as a matter of law or, alternatively, a new trial or remittitur. The district court summarily denied this motion.

On July 10, 2006, Goldsmith moved for an award of costs and attorney's fees. On August 2, 2006, the district court awarded $151,210 in attorney's fees and $9,328.17 in costs to Goldsmith. Bagby Elevator moved for reconsideration of this order, and the district court reduced the award of costs to $8,755.74.

* * *

Outcome: The judgment of the district court is AFFIRMED.

Plaintiff's Experts: Unknown

Defendant's Experts: Unknown

Comments: None

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