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
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.
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.
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
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,
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.
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.
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. ...