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July 8, 1991


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


This action is brought pursuant to Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e et seq. ("Title VII"), to remedy alleged sex discrimination. Specifically, plaintiff Rebecca T. Halbrook ("Halbrook") contends that defendant Reichhold Chemicals, Inc. ("Reichhold") discriminatorily denied her a promotion to the position of General Counsel and thereby forced her to resign. Halbrook thus asserts claims for discriminatory failure to promote and for constructive discharge.

Reichhold denies plaintiff's claim of discrimination and asserts that the challenged decision was made for legitimate nondiscriminatory reasons. Reichhold further denies plaintiff's constructive discharge claim and asserts that plaintiff voluntarily resigned her position, despite encouragement by Reichhold management to remain with the company.

Plaintiff seeks wages and benefits lost as a result of defendant's alleged discrimination, including but not limited to salary, bonuses, stock options, insurance, and the value of the use of a company car; reinstatement with defendant in the position of general counsel; and attorneys' fees and costs. The defendant seeks dismissal of the action with prejudice, costs, and reasonable attorneys' fees.

Trial of the case concluded on April 19, 1990. This opinion and order constitutes the Court's findings of fact and conclusions of law in the matter.

I. Background

A. Overview of Halbrook's Employment with Reichhold

In 1972, plaintiff Rebecca T. Halbrook graduated from Duke University School of Law, where she was an editor of the law review. She then clerked for a federal district judge in North Carolina, and thereafter became an associate in the Raleigh, North Carolina firm of Ragsdale & Liggett. From November 1973 to March 1977 she was associated with Willkie, Farr & Gallagher in New York City, working in the litigation and corporate departments. From 1977 to 1980 Halbrook worked as an attorney for Texaco, Inc., and from 1980 to 1982 she was Associate Counsel for GAF Corporation. In August 1982, Halbrook became Assistant General Counsel at Reichhold.

Halbrook thus arrived at Reichhold shortly after C. Robert Powell ("Powell") became Chief Executive Officer ("CEO") at Reichhold in April 1982. Under Powell, the company adopted a continuing three-year business plan, beginning in 1983. The "most critical part" of this plan was the acquisition and disposition of businesses. Tr. 1047. Before Reichhold hired Halbrook, Powell appointed Paul E. Dixon ("Dixon"), then the company's only attorney, to be Vice President, General Counsel, and Secretary. He also interviewed Halbrook that year and advised Dixon that he "felt she was very capable and it looked like a good choice." Tr. 1048-49.

During the course of her employment with Reichhold, Halbrook reported to Dixon. He in turn reported to Powell, who served as CEO of Reichhold from 1982 until March 31, 1988. In December 1982 Halbrook received a written performance evaluation with a rating of "commendable", a rating second only to "distinguished". The evaluation was prepared by Dixon and approved by Powell.

During August 1983, Halbrook interviewed a large number of applicants and recommended hiring Charles Lorelli ("Lorelli"). He graduated from the University of Pennsylvania Law School in 1978 and then spent five years working for Allied Corporation as an in-house counsel. Lorelli was hired, given the. title Associate Counsel, and placed under Halbrook's supervision. The legal department also hired Rosalie Lawlor in 1983 as Assistant Counsel. Powell had no role in hiring either, Tr. 1049, and, as already observed, Halbrook interviewed Lorelli and recommended to Dixon that Lorelli be hired.

In 1984, Dixon recommended that Halbrook be promoted to serve as Assistant Secretary of the Corporation. This was approved by the Operating Committee and ultimately by Powell in April of that year, and Halbrook was promoted in May 1984. She remained Assistant General Counsel.

In her October 25, 1984 appraisal of Lorelli, Halbrook rated his legal advice and service as "distinguished". She further commented that his knowledge of the subject matter involved in the job was superb, that his productivity was excellent, and that his "work standards were consistently beyond reproach". The only reason she did not give him an overall rating of "distinguished" (she rated Lorelli "commendable") is because she thought (mistakenly) that they were unavailable. Tr. 658-59. Halbrook's own overall evaluation by Dixon at this time was "commendable".

Also during the month of October 1984, Dixon and Powell approved a "Career Development" form for Halbrook. Therein, she was assessed as "[r]eady in 1-2 years for increased responsibilities," with Vice President, General Counsel among the "most likely position[s] for promotion." PX 8;*fn1 Tr. 1113-14. In approving this form, Powell indicated a willingness to consider Halbrook for future promotions, including promotion to general counsel.

In late 1984 Halbrook asked D. Eric Pogue ("Pogue"), Reichhold's Vice President for Human Resources, to appoint her to one of the company's administrative committees. She was subsequently appointed, with Pogue's approval, to the Human Resources Advisory Committee. Lorelli became a member of Reichhold's Retirement Committee.

In 1985, a bad year for Reichhold economically, neither Halbrook nor Lorelli received formal performance assessments, and neither Halbrook nor Dixon received a bonus for their 1985 performances. Because "Lorelli had had an outstanding year and deserved a bonus," Tr. 1053, however, Dixon proposed a "special bonus" for him and the Operating Committee approved it. Tr. 893, 1139.

In May 1986, Lorelli was promoted to the positions of Assistant Secretary and Assistant General Counsel, and was therefore holding the same titles as Halbrook, although she had supervised him for three years. In recommending Lorelli's promotion, Dixon told Powell that Lorelli was a "star performer" who had "fully earned the promotion." Tr. 1055.

In September 1986 Dixon filled out a "promotability forecast" in connection with the company's "succession planning" process. This procedure was designed to identify the person or persons within a department best able to take over during the next twelve months if the head of department position became open. In this document, DX U,*fn2 Dixon rated Lorelli his "# 1 Backup" and Halbrook as his "# 2 Backup". In an attached evaluation of Halbrook, Dixon wrote of her: "(a) sometimes perceived pure legalist as too slow (i.e. National Wax deal)", DX V; Tr. 1063-64.

In December 1986, Lorelli received the rare rating of "distinguished" from Dixon, and Powell agreed that in 1986 Lorelli "did service beyond the call of duty. Everything that he had done that year was exemplary." Tr. 1061-62. At the same time, Dixon rated Halbrook "commendable".

During this period, negotiations were proceeding that led to the October 1, 1987 acquisition of Reichhold by Dainippon Ink and Chemical Co. ("Dainippon"). In the months preceding the acquisition, Powell concluded that, since Reichhold would become a private company, a down-sizing of the legal department was required. The general counsel's position was also to be down-graded. The General Counsel would report to Pogue, to be up-graded to Senior Vice President, and not to the Chairman. Additionally, the General Counsel would no longer be a member of the company's Operating Committee. DX H. At about this time, Powell decided that Dixon's employment was to be terminated because he had been "quite vocal against the merger before it happened." Tr. 1066-67.

Powell decided, with the concurrence of Pogue, that Lorelli would be appointed General Counsel, succeeding Dixon. Tr. 1075-76. According to Powell, he based this decision upon his personal observations of Lorelli, the opinions of Reichhold business persons, Lorelli's overall performance appraisals, and the succession planning for Reichhold's legal department, wherein Lorelli had been rated "# 1 backup" to Dixon. Tr. 1076; 1063-64; 1079; DX U. In his testimony, Powell emphasized personal interaction with and knowledge of Lorelli's acquisitions and dispositions work in two transactions, the Rogue Valley sale, Tr. 1076-77, and the Plasmine Corporation acquisition, Tr. 1077. He was greatly impressed by Lorelli's work in these projects Id. Powell also heard broad approval of Lorelli's legal skill from officials within Reichhold, specifically Division Presidents Andrew Katai and Larry Finnegan, and Executive Vice President Tom Mitchell, and, most importantly, from Dixon.

On September 28 or 29, 1987, Lorelli advised Halbrook that he had been chosen to succeed Dixon. Halbrook expressed to Pogue her disappointment and disagreement with the decision. Pogue urged her to stay, and she said she would, observing that she felt needed and appreciated by the company. A little more than one week later, Halbrook told Pogue that she intended to sue the company, but that she intended to continue to work at the company while the suit was pending.

Halbrook resigned, effective November 13, 1987, after she had secured a position with Sann & Howe, a New York law firm.

B. Golf and "Women's Issues"

Powell determined that communication among mid- and senior-management at Reichhold was insufficiently direct and candid, and initiated a series of seminars to address this problem. Tr. 87, 1051. Employees were encouraged to be entirely fortheoming, and to identify obstacles in their personal inter-relationships with superiors and peers that were thought to impede efficiency and cloud communication. Tr. 292-93, 295-96, 462. Halbrook testified that at one such seminar in June 1984 she had a discussion with Dixon, Jim Gentel (the head of the purchasing department) and Tom Madden (the head of the environmental department) in which Gentel stated that the issues raised by Halbrook led him to believe that she "wanted to succeed as a woman and not as a business person." Tr. 473. Gentel also told her that she could succeed at Reichhold without having to learn golf, a pursuit apparently favored by senior management. Tr. 463, 465. Dixon encouraged her not to "let women's issues get in [the] way", PX 38, and not to "verbalize/insinuate that the women's issue has impact on her advancement." PX 54. Halbrook testified that Dixon told her it was not in her interest to raise these issues at Reichhold. ...

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