Opinion
Case No. 4:01-CV-97
February 27, 2003
OPINION
This matter is before the Court on Defendant's Motion for Summary Judgment.
I. Background
In May 1989, Plaintiff was employed by Defendant as a commercial underwriter. She was later promoted to service supervisor and then claim representative in the Commercial Department. In October 1993, Plaintiff was appointed as a trainee agent. As a trainee agent, Plaintiff was responsible for "providing products to existing State Farm customers and non-existing State Farm customers and for servicing those customers, . . . taking care of claims, taking care of changes of vehicles." (Plaintiff's Deposition, p. 60). Once appointed, the policies of an agent who had left Defendant's employment were given to Plaintiff to service. This block assignment consisted of 1214 policies. Plaintiff was also expected to try to increase the number of policyholders in her agency on her own, though she continued to receive assignments of policies as well. In October 1997, Plaintiff terminated her employment with Defendant and the parties entered into an Agreement whereby Plaintiff worked for Defendant as an independent contractor. This move was initiated by Agency Manager Doug Heins by appointing Plaintiff as an independent contractor. As an independent contractor, Plaintiff was still eligible for assignments of policies, but was not guaranteed any assignments. As of 1998, Plaintiff had received an additional 562 policy assignments, and since 1998, she has received 325 policy assignments. Plaintiff has received more assignments than 15 of the 19 other agents in her market area. Plaintiff is paid a commission on business assigned by Defendant and on business she produces.
This may have occurred in 1995. The record is unclear.
David E. Kiesling became a trainee agent in 1998 under Gary Shaffer, Agency Field Executive ("AFE"). At that time, Kiesling received an initial block assignment of 1,865 insurance policies from retiring agent William Liggett's "book of business." Plaintiff did not receive any assignments from Liggett's book of business.
After an agent retires or is terminated, Defendant first determines whether it wants to replace the agent. If the agent is to be replaced, a recommendation regarding distribution of the agent's files to the new agent, and to other agents if there is an excess of files, is made. Defendant, through its AFE, his/her staff, and others, contacts each policyholder to inform him/her of the change of assignment to a new agent. If a policyholder requests to go to a different agent, Defendant will honor that request and make the change in assignment.
Distribution of excess files is dependent initially on satisfaction of "core criteria." If numerous agents in a market area meet the assignment criteria, Defendant uses past auto assignment history to determine who gets new assignments. Beyond these criteria, Defendant also considers geographical proximity of the agent to the policyholder, the extent to which an agent has multi-lined their current policyholders, and the "Target Assignment Number" ("TAN"). TAN is an average of the historical auto assignments within that market. When considering the number of assignments an agent has received, an agent's initial assignment is included. TAN is developed for each market area and is reevaluated every year.
Multi-lining refers to increasing the number of policies held by one policyholder. That is, if a policyholder has an auto policy, an agent will seek to sell them a fire policy, home policy and life policy in order to multi-line the policyholder.
Defendant contends that despite meeting the core criteria as required to receive a portion of excess policies, Plaintiff was over TAN and so not eligible for an assignment from Liggett's book of business. Plaintiff asserts than in the past she has been over TAN and has received assignments and that in fact, Defendant did not give her any assignments because she is African-American. Specifically, Plaintiff contends Defendant discriminated against her in favor of Kiesling and other white agents when it assigned Kiesling a number of policies greater than the number initially assigned to Plaintiff and greater than the number she held at the time of Kiesling's assignment. Defendant also assigned other white male agents, Ron Sexton and Dennis Rutkoskie, policies while not assigning Plaintiff or Stan Ellis, the other African-American agent in the market area, any policies. Defendant claims migration, that is, assignments in response to requests of policyholders, contributed to the number of assignments Kiesling received. Sexton and Rutkoskie received assignments because they were not over TAN while Plaintiff and Ellis were.
II. Standard of Review and Applicable Federal Rules
Review of a motion for summary judgment requires the Court to determine if there is no genuine issue as to any material fact such that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). The court must consider the record as a whole by reviewing all pleadings, depositions, affidavits, and admissions on file. Matsuhita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). The facts are to be considered in alight most favorable to the non-moving party, and ". . . all justifiable inferences are to be drawn in his favor." Schaffer v. A. O. Smith Harvestore Prod., Inc., 74 F.3d 722, 727 (6th Cir. 1996) (quoting Anderson, 477 U.S. at 255) (other citations omitted). Once the movant satisfies his/her burden of demonstrating an absence of genuine issue of material fact, the non-moving party must come forward with specific facts showing that there is a genuine issue for trial. Kramer v. Bachan Aerospace Corp., 912 F.2d 151, 153-54 (6th Cir. 1990). The non-moving party may not rest on its pleadings but must present "specific facts showing that there is a genuine issue for trial." Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986) (quoting Fed.R.Civ.P. 56(e)). It is the function of the Court to decide "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986). The question is "whether a fair-minded jury could return a verdict for the [non-moving party] on the evidence presented." Id. at 252.
III. Analysis
Plaintiff has filed a § 1981 cause of action contending that Defendant unlawfully and willfully discriminated against her, and other minority agents, in assigning Liggett's policies so as to hinder her ability to make, perform, modify and/or contract with Defendant and her ability to enjoy the benefits, privileges, terms, conditions, and income of that contractual relationship. This discrimination has resulted in a significant loss of past, present and future income. Plaintiff states Liggett's policies were assigned to non-minority males who were not eligible for assignments while she and other minority agents received few or no assignments yet were eligible. Kiesling received the bulk of Liggett's policies, which, according to Plaintiff, allowed him to have an earnings potential significantly higher than Plaintiff's despite having only been an agent for one year as compared to Plaintiff's five years. Defendant told Plaintiff she was over TAN and therefore was not assigned any of Liggett's policies.
42 U.S.C. § 1981 states:
(a) All persons within the jurisdiction of the United States shall have the same right in every State and Territory to make and enforce contracts, . . . .
(b) For purposes of this section, the term `make and enforce contracts' includes the making, performance, modification, and termination of contracts, and the enjoyment of all benefits, privileges, terms, and conditions of the contractual relationship.
Defendant argues that it had no contractual obligation to assign policies to Plaintiff and therefore, Plaintiff cannot state a claim under § 1981. Plaintiff responds that assignments are within the protection of § 1981 as benefits, privileges, terms and conditions of the contractual relationship. Plaintiff does not argue that Defendant has a contractual obligation to assign her policies, but that because assignments are contemplated in Plaintiff's Agreement with Defendant, they are a benefit of the contractual relationship solely within Defendant's control and therefore, within § 1981 protections.
At a minimum, there is a question of fact as to whether the independent contractor arrangement imposed an obligation, explicit or implicit, on Defendant to assign policies to independent contractors in a non-discriminatory manner. Plaintiff's Agreement with Defendant provides that she may only sell and receive State Farm policies or companies approved by State Farm. It also incorporates pay scales allowing for commissions on assigned policies. Defendant's internal policies address how policies are assigned without making a distinction based on type of agent and without indicating assignments are not promised or not guaranteed. Rather, these internal policy documents imply that assignments will occur according to the outlined criteria and considerations.
Defendant's reliance on Harris v. Allstate Ins. Co., 300 F.3d 1183 (10th Cir. 2002) is misplaced. Unlike the plaintiff in that case, Plaintiff does have an agreement with Defendant that appears to create a benefit in the form of assignments as a result of the contractual relationship. In Harris, the plaintiff brought suit on the basis of a completed information form that promised "Allstate personnel will utilize [the form] is such a way as to maximize customer service." Harris, 300 F.3d at 1185. The form indicated Allstate had no obligation to refer customers to the plaintiff. Id. In the instant case, nothing to the same effect is indicated in any document. Quite the contrary, the implication is that, per Plaintiff's contractual relationship with Defendant, Plaintiff will receive assignments if she meets the criteria and considerations. As stated earlier, at the very least, there is a question of fact as to whether assignments are a benefit, privilege, term or condition of the contractual relationship. Additionally, Plaintiff has clearly demonstrated harm resulting from Defendant's alleged discriminatory assignment of policies. She is placed at a significant financial disadvantage by having fewer policies to service.
To state a claim under § 1981, Plaintiff has the burden of proof and must demonstrate four elements: (1) she was a member of a protected class; (2) she was discharged; (3) she was qualified for the position; and (4) she was replaced by a person outside the class. Mitchell v. Toledo Hosp., 964 F.2d 577, 582 (6th Cir. 1992) (citing Patterson v. McLean Credit Union, 491 U.S. 164 (1989)) (stating the McDonnell Douglas/Burdine formula is applicable to claims under 42 U.S.C. § 1981). In the present case, Plaintiff is not alleging that she was discharged and replaced improperly, but that a comparable non-protected person was treated better. "As the Sixth Circuit has frequently phrased the requirements of a prima facie claim of disparate treatment using such a `comparable non-protected person was treated better' element as one of the requisites, the plaintiff must produce evidence which at a minimum establishes (1) that he was a member of a protected class and (2) that for the same or similar conduct he was treated differently than similarly-situated non-minority employees." Id. (citing Davis v. Monsanto Chem. Co., 858 F.2d 345 (6th Cir. 1988); Long v. Ford Motor Co., 496 F.2d 500 (6th Cir. 1974)).
The parties do not dispute that Plaintiff is a member of a protected class. They do, however, disagree over whether Plaintiff is similarly situated to Kiesling such that his disproportionate receipt of assignments from Liggett's "book of business" demonstrates better treatment. Plaintiff must show she and Kiesling are similarly situated in all respects. Mitchell, 964 F.2d at 583. This means, "the individuals with whom the plaintiff seeks to compare his/her treatment must have dealt with the same supervisor, have been subject to the same standards and have engaged in the same conduct without such differentiating or mitigating circumstances that would distinguish their conduct or the employer's treatment of them for it." Id. (internal citations omitted). Both Plaintiff and Kiesling, in 1998, were supervised by Shaffer. They did not, however, have the same title. At the time of the assignment of Liggett's policies, Plaintiff was an independent contractor and Kiesling was a trainee agent, a position Plaintiff had not been in for three years.
According to Defendant, this difference in title is critical as it affects how assignments occur. That is, a trainee agent is given a large block assignment to start, whereas independent contractors are given assignments according to the aforementioned criteria and considerations. Defendant argues this distinction is significant and accounts for the difference in Defendant's treatment of Plaintiff and Kiesling. Plaintiff responds that the distinction between a trainee agent and independent contractor agent is not an important difference with respect to the relevant issues in this lawsuit. What matters is that Kiesling was placed in a preferred position in comparison to the minority agents in the same market area as a result of the block assignment of Liggett's policies. Neither party has demonstrated there is no question of fact with respect to the issue of whether Plaintiff and Kiesling are similarly situated.
The Court is not clear on whether there is any difference between a trainee agent and an independent contract agent. It is not apparent what significance TAN plays in assignments to trainee agents and independent contractors and if that significance is different for the two titles. Also, the role of TAN in assignment of policies to any agent is not clear. Defendant's internal policies list it as a consideration in a list of many other considerations. Plaintiff states she had never heard of TAN as a determining factor in assigning policies until she was told TAN was why she was not assigned policies from Liggett's file. Yet other agents with more policies overall received assignments from Liggett's file, according to Defendant because they were under TAN. If TAN is meant to insure some equitable distribution of assigned policies, this explanation does not make sense. All of these questions and more require the Court to deny Defendant's Motion for Summary Judgment.
The Court also determines there is a question of fact as to whether TAN was a pretext for a discriminatory practice. Once a plaintiff proves a prima facie case of discrimination, the burden shifts to the defendant to "articulate some legitimate, nondiscriminatory reason" for the practice. Mitchell, 964 F.2d at 584 n. 6 (internal citations omitted). If the defendant carries this burden, the plaintiff must "prove by a preponderance of the evidence that the legitimate reasons offered by the defendant were not its true reasons, but were a pretext for discrimination." Id. Nothing in the record indicates TAN is a more significant factor than geographical proximity or success at multi-lining in assignment of policies, yet Defendant relied on TAN as a basis for denying two minority agents assignments. The record indicates Plaintiff was assigned policies, despite being over TAN, in 1997. When Plaintiff complained to Shaffer about the manner in which Liggett's file was assigned, his response was "I hope you are not coming at this from a black/white angle, because I would hate to see the wrath come down on you." Complaint, ¶ 21. Defendant is correct in stating it may run its business as it chooses, within the law. Smith v. Monsanto Chem. Co., 770 F.2d 719, 723 n. 3 (8th Cir. 1985). However, in this instance, the record indicates this alleged change in emphasis on TAN between 1997 and 1998 may be a pretext for discriminatory conduct and would not then be protected as within a business's prerogative.
IV. Conclusion
Therefore, the Court will deny Defendant's Motion. An Order consistent with this Opinion will be entered.
ORDER
In accordance with an Opinion filed this day,
IT IS HEREBY ORDERED that Defendant's Motion for Summary Judgment (Dkt. No. 51) is DENIED.