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LONG v. AT & T INFO. SYS. INC.

March 20, 1990

J. RUSSELL LONG, PLAINTIFF,
v.
AT & T INFORMATION SYSTEMS INC., DEFENDANT.



The opinion of the court was delivered by: William C. Conner, District Judge:

        In this action, plaintiff asserts that defendant engaged in a host of discriminatory employment practices and retaliatory actions in violation of Title VII of the Civil Rights Act of 1964 ("Title VII"), as amended, 42 U.S.C. § 2000e et seq., and the New York Human Rights Law ("Human Rights Law"), N YExec.Law § 290 et seq., as well as racial discrimination in violation of the Civil Rights Act of 1866, as amended, 42 U.S.C. § 1981. Defendant moves for summary judgment on all of plaintiff's claims pursuant to Fed.R.Civ.P. 56(c). For the reasons set forth below, defendant's motion is granted in part and denied in part.

BACKGROUND

Plaintiff J. Russell Long, a 38-year-old black male, was employed by New York Telephone Company ("NY Tel"), first as an Account Executive ("AE") and then as an Account Executive Industry Consultant ("AEIC") in the Forest Products Industries Division between June 16, 1980 and December 31, 1982.*fn1 Plaintiff was then employed by defendant AT & T Information Systems Inc. ("AT & T-IS"), formerly named American Bell, Inc. ("ABI"), between January 1, 1983 and November 4, 1985, as an AEIC assigned to a branch in the manufacturing sector.*fn2 This position entailed leasing, and later selling, voice and data equipment to customers serviced by AT & T-IS's Large Business Systems division and often necessitated meeting at the customer's place of business. At all relevant times, both AEs and AEICs were compensated on the basis of salary and potential commissions, on a 70%-30% basis.

On June 24, 1983, Long suffered a back and leg injury and was unable to return to work until November 1, 1983. Upon his return, Long was placed on limited duty because of work-related restrictions recommended by his doctor and concurred in by defendant's medical department.*fn3 A special position was created in which Long was initially assigned administrative duties and then assigned to an account team where he assisted in the coordination and delivery of equipment for television events. According to AT & T-IS, these duties were normally performed by a Marketing Support Specialist ("MSS"), a classification paid at a lower level than the AE and AEIC classifications. Long claims that many of his job functions were those typically performed by AEs or AEICs.

In December 1984, defendant's medical department determined that Long's disability was permanent. Plaintiff was told that he could no longer continue indefinitely in the position which was created on the assumption that his disability was temporary and that a search would be conducted to find him an appropriate permanent position. Both the extent of the search and the conditions imposed on it by plaintiff are vigorously disputed by the parties. For example, various employees of defendant attest that plaintiff informed them in connection with the search that he would only work in New York City, while Long contends that, notwithstanding his expressed preference for a New York position, he was willing to consider other areas as well. AT & T-IS claims that a lateral job search was conducted within the New York industrial area between December 1984 and January 1985 and that a lateral and downgraded job search was conducted between February and October of 1985. AT & T-IS also claims that company-wide downsizing of approximately 24,000 jobs significantly reduced the number of available positions. AT & T-IS maintains that plaintiff was discharged from his position on November 4, 1985 because a suitable permanent position could not be found.

During Long's employ, he filed one charge of discrimination and two charges of retaliation, one of which he amended, with the Equal Opportunity Employment Commission ("EEOC"). After his employment was terminated, plaintiff filed another EEOC charge alleging both discrimination and retaliation.

DISCUSSION

I. Section 1981 Claims

In Patterson v. McLean Credit Union, ___ U.S. ___, 109 S.Ct. 2363, 105 L.Ed.2d 132 (1989), the Supreme Court substantially narrowed the scope of section 1981. Cautioning against straining the clear meaning of the section, the Supreme Court held that section 1981 protects two rights: the right to "make" contracts and the right to "enforce" contracts. Id. 109 S.Ct. at 2372. The Supreme Court ruled, "[w]here an alleged act of discrimination does not involve the impairment of one of these specific rights, § 1981 provides no relief." Id.

According to Patterson, the right to "make" contracts, "extends only to the formation of a contract, but not to problems that may arise later from the conditions of continuing employment." Id. In other words, the right to make contracts does not include the employer's conduct after the initial contract relationship has been established. With respect to the right to "enforce" contracts, this right "embraces protection of a legal process, and of a right of access to legal process, that will address and resolve contract-law claims without regard to race." Id. 109 S.Ct. at 2373. It also covers "wholly private efforts to impede access to the courts or obstruct nonjudicial methods of adjudicating disputes about the force of binding obligations." Id. In light of these principles, this Court now turns to the present action. It is clear that Long's discrimination claims regarding his working assignments, accounts, compensation and benefits for his alleged job-related injury relate to postformation conduct concerning his terms and conditions of employment and as such are not actionable under section 1981. Patterson, 109 S.Ct. 2363; Gonzalez v. Home Ins. Co., 50 Fair Empl.Prac.Cas. 1173 (BNA), 1989 WL 106467 (S.D.N.Y. 1989); Williams v. National R.R. Passenger Corp., 716 F. Supp. 49 (D.D.C. 1989).

A. Termination

Patterson did not specifically address the applicability of section 1981 to discriminatory termination. However, the vast majority of cases subsequent to Patterson hold that discriminatory termination involves neither the right to make nor the right to enforce contracts. See Gonzalez, 50 Fair Empl.Prac.Cas. 1173 (BNA) (S.D.N.Y. 1989); Alexander v. N Y Medical College, 721 F. Supp. 587 (S.D.N.Y. 1989); Overby v. Chevron U.S.A., Inc., 884 F.2d 470 (9th Cir. 1989); Hall v. County of Cook, 719 F. Supp. 721 (N.D.Ill. 1989).*fn4 As noted in Alexander, actions such as demotions and retaliatory discharges take place after the initial employment contract is made and therefore do not implicate the making of the contract itself. Alexander, 721 F. Supp. at 588. Long's termination, which occurred almost three years after his initial employment contract with AT & T-IS, constitutes postformation conduct not covered by section 1981. Nor is the right to enforce contracts implicated in any way. Thus, Long's termination does not fall within the scope of section 1981.

B. Retaliation

Long argues that in retaliation for his attempts to enforce his contract rights, AT & T-IS denied him promotions, created a hazardous work environment, subjected him to racial slurs and ultimately terminated his employment. AT & T-IS claims that these charges relate to postformation conduct and that to hold otherwise would circumvent Title VII's administrative scheme. This Court agrees that retaliation claims are not actionable under section 1981.*fn5

Courts have employed various rationales to except retaliation claims from section 1981's coverage. In Williams, the district court stated that, while plaintiff alleged that defendant tried to impede her efforts to pursue her remedies for racial discrimination by downgrading her position, the plaintiff did not allege that the defendant tried to impede plaintiff from enforcing any contract rights, as defined in Patterson. According to the district court, "once the Court has concluded that the claims of discrimination in working conditions and pay do not involve contract rights as defined in Patterson, it must follow that the claim of retaliation against the plaintiff for pursuing these other claims is not a claim that involves contract rights." Williams, 716 F. Supp. at 52.

In Matthews v. Northern Telecom, Inc., No. 88 Civ. 583, 1989 WL 131343 (S.D.N.Y. Nov. 1, 1989), and Dangerfield v. Mission Press, 50 Fair Empl.Prac.Cas. 1171 (BNA), 1989 WL 88199 (N.D.Ill. 1989), the courts applied a different rationale for finding retaliation claims not actionable under section 1981. The Matthews court cited the language in Patterson, in which the Supreme Court quoted with approval the statement that the right to enforce contracts refers to "the removal of legal disabilities to . . . enforce a contract." 109 S.Ct. at 2373 (quoting Runyon v. McCrary, 427 U.S. 160 n. 5, 96 S.Ct. 2586 n. 5, 49 L.Ed.2d 415 (1976) (dissenting opinion)). The Matthews and Dangerfield courts found that even if the employer's retaliatory behavior placed practical hindrances in plaintiff's way, it had not caused a legal obstruction to plaintiff's case and therefore was not within the scope of section 1981. See also Alexander, 721 F. Supp. at 588 ("a retaliatory discharge in no way obstructs access to judicial redress, as is evidenced by [plaintiff's] presence before this Court").

Lastly, the Ninth Circuit Court observed in a retaliatory discharge suit:

  Reading section 1981 too broadly would permit
  plaintiffs to circumvent Title VII's detailed
  statutory prerequisites to bringing an action in
  federal court, thereby frustrating Title VII's
  conciliatory goals and disrupting the delicate
  balance between employers and employee's rights.
  This concern is particularly apt where, as here,
  the very conduct complained of centers around one
  of Title VII's conciliatory procedures: the
  filing of an EEOC complaint. Because section
  704(a) of Title VII proscribes Chevron's alleged
  conduct, we therefore decline "to twist the
  interpretation of another statute (§ 1981) to cover
  the same conduct."

Overby v. Chevron U.S.A., Inc., 884 F.2d at 473 (citations omitted).

For these reasons, the Court declines to include retaliatory conduct within the ambit of section 1981. As in Williams and Matthews, AT & T-IS did not create legal obstacles which foreclosed plaintiff's access to a forum to hear his claim. Moreover, this Court finds the Ninth Circuit Court's concerns in Overby persuasive. In light of Patterson's strict interpretation of section 1981, this Court will not read section 1981 to encompass plaintiff's claims of retaliatory conduct.

C. Promotion

In Patterson, the Supreme Court stated, "whether a promotion claim is actionable under § 1981 depends upon whether the nature of the change in position was such that it involved the opportunity to enter into a new contract with the employer." 109 S.Ct. at 2377. The Supreme Court went on to say, "[o]nly where the promotion rises to the level of an opportunity for a new and distinct relation between the employee and the employer is such a claim actionable under § 1981. Cf. Hishon v. King & Spaulding, 467 U.S. 69, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984) (refusal of law firm to accept associate into partnership) (Title VII)." Id. As some courts have recognized, the Supreme Court's reference to Hishon suggests that some fundamental change is necessary. See Byrd v. Pyle, 728 F. Supp. 1 (D.D.C. 1989); Crader v. Concordia College, 724 F. Supp. 558 (N.D.Ill. 1989).

District courts have only recently begun to distinguish between those promotions which constitute a fundamental change in the contract relationship and those which do not. See Williams v. Chase Manhattan Bank, 728 F. Supp. 1004 (S.D.N Y 1990) (collecting cases). It is not necessary in the context of this case to engage in a lengthy discussion of considerations which courts have found relevant, as Long has not alleged denial of promotion to any position which would create a new and distinct relationship. While Long made general references to "market or area staff positions" for which he was qualified, AT & T-IS maintains that them positions would not have entailed supervisory responsibility, even if they resulted in a base pay increase. However, since higher pay is a typical result of promotion, this alone cannot constitute a new and distinct relationship. See Williams, 716 F. Supp. at 51. The only specific position which Long mentioned involved the promotion of an AEIC to Staff Manager, a pay increase of two grade levels. Plaintiff fails to allege that this position entailed any increased supervisory responsibility or change in duties sufficient to amount to a new relationship. Plaintiff therefore fails to state a section 1981 claim. See Byrd, 728 F. Supp. at 2 (more than a mere increase in pay and/or responsibility is needed for failure to promote claims to fall within § 1981).

D.  Interference with Ability to Make Future Contracts

Long claims that AT & T-IS made derogatory remarks about him to future employers which constituted interference with Long's ability to make contracts, actionable under section 1981. This Court need not consider whether such behavior falls within section 1981, however, as Long has presented no evidence that such conduct in fact took place. Long bases his assertion on the fact that when his wife, posing as a personnel representative, called Lester Hutton, Marketing Manager at AT & T-IS, to inquire about Long's performance at AT & T-IS, she was informed that Long was disruptive and had initiated a legal action against AT & T-IS. However, Long's wife admits that she did not call Hutton on behalf of any employer or prospective employer. Furthermore, neither Long nor his wife claim ...


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