Conti v. American Axle & Manufacturing, Inc., No. 08-1301 (6th Cir. May 22, 2009)

| May 26, 2009 | Daily Developments in EEO Law |

Apparently forsaken by a district court judge, a magistrate and even her former law firm, Ms. Conti fights back and — in an unpublished, 2-1 decision of the Sixth Circuit — wins reversal of summary judgment on her Michigan state law Elliott-Larson sex discrimination/retaliation claim and Equal Pay Act claim. Among the notable issues presented was whether the district court abused its discretion when it denied the plaintiff leave to depose the employer’s CEO.

Conti v. American Axle & Manufacturing, Inc., No. 08-1301 (6th Cir. May 22, 2009): The two opinions combined total nearly 50 pages, so I am not going to do the decision full justice, but the gist of plaintiff’s claims was summarized by the majority opinion (signed by Judge Clay) as follows —

“Conti claims that she has hit a ‘glass ceiling’ at American Axle, and that her experience is a direct product of the company’s gender-biased promotion and pay practices. Conti complains that she has not received the same salary increases or the same opportunity for advancement and training as her male counterparts. In particular, Conti alleges that she was promoted to the co-Director position only after American Axle promoted a less-qualified male, Earhart, nearly two years before her. She also asserts that, although she received approximately the same salary as Earhart, he was promoted to a higher salary “band” which afforded him the
opportunity to receive larger executive bonuses. In addition, Conti alleges that her promotion to Manager rather than Director of the New Model Launch division was discriminatory because she received a lower title and less pay than her immediate male predecessor, Pannucci, despite the fact that she performs essentially the same work. According to Conti, she was treated unequally because of her sex, and also as retaliation for her decision to testify against the company’s interests in a deposition in a prior discrimination suit also arising out of gender-biased hiring practices at American Axle. Conti further claims that American Axle’s discriminatory employment practices are a reflection of the discriminatory attitudes of its CEO.”

The plaintiff ran into essentially three problems litigating this case, as reflected in the majority decision:  she was denied a deposition of the company CEO, who (among other things) expressed his admiration in print for the less-gender-inclusive corporate cultures of Germany and Japan; her law firm fired her as a client, without her consent, and placed a lien on any future recovery; and the district court judge entered summary judgment on all claims.

The panel majority first holds that denying the CEO deposition was an abuse of discretion.  The parties disputed the degree to which the CEO (named Dauch) may have influenced the decisions that disadvantaged the plaintiff.  (Remarkably, the majority finds nothing in the record that a deposition would have been unduly burdensome, though the dissent disputes this.)  The majority finds that the only way to sort out the degree of the CEO’s culpability was to depose him, and that the plaintiff should have been allowed to do so:

“Although the record supports AAM’s claim that Conti never reported directly to Dauch, it does not support its broader suggestion that Dauch has not been involved in decisions relating to
Conti’s employment. For instance, Conti claims that AAM demoted her as retaliation for her
protected activity related to her decision to testify ‘truthfully’ but against the company’s interests
in a prior discrimination suit brought against the company. The district court rejected this argument on the grounds that Conti had failed to demonstrate that her direct superiors were aware of her decision to provide deposition testimony that would have been adverse to the company. But the record suggests otherwise. According to Conti, she informed in-house counsel for American Axle that Roy Langenbach, her former boss, instructed her not to hire two female applicants, whom Conti judged to be ‘very capable candidates,’ because ‘one was a mother [and another] one was overweight.’ [fn. omitted] J.A. 98. Although it is unclear whether Shanti, her direct supervisor at the time, was aware of Conti’s intentions, the record suggests that Dauch was aware of this information.”

The partial dissent (by Judge Cook) would have held that the discovery ruling against the plaintiff — while debatable — fell within the district court’s broad discretion:  “Although the majority comments that the record evidence, taken cumulatively, ‘casts serious doubt on the notion that Dauch was not aware of and played no role in any decision relevant to this action,’ Maj. Op. at 9, it bears repeating that our review is guided by a different metric. The question before us is not simply whether further discovery might provide a more thorough record; our analysis asks whether the district court abused its discretion to the point of causing substantial prejudice.”

Second, on the merits, the panel finds genuine issues of material fact on all claims.  It concludes that the employee mustered sufficient evidence through the direct method of proof of gender bias —

“To establish a case of intentional discrimination, Conti points to four items she contends are
direct evidence of discrimination: (1) Dauch’s writings praising gender-biased management styles [fn. omitted]; (2) Dauch’s role as a decision-maker; (3) an alleged statement by Earhart in 2001 that Conti was not promoted to a Director position at that time because she ‘did not have a penis;’ and (4) alleged statements from Conti’s prior supervisor, Roy Langenbach, instructing her not to hire a woman who was overweight or a woman who was a mother. Conti also offers statistical evidence showing that AAM has never had a female executive director or vice president, and that only a small percentage of its executives, all at the lowest salary bands, are female.”

The panel also finds sufficient disputed evidence to warrant a trial on her retaliation claims and the Equal Pay Act.  On the latter, where the employer bore the burden of proof on the affirmative defense of “factors other than sex,” the panel holds that Conti “raised a material issue as to whether she performed substantially equal work for less pay. Conti testified that she was required to perform all of the duties previously assigned to her predecessor, as well as some addition al responsibilities. Nevertheless, Conti received significantly less pay, and again was not eligible for the same executive bonuses. Although AAM argues that there is a significant difference in the responsibilities assigned to Pannucci and Conti in their respective positions, the only evidence to that effect comes from the self-serving testimony offered by Pannucci himself. AAM offers no other evidence to rebut Conti’s claim that she performed ‘substantially’ the same functions as Pannucci.”

Finally, in a ruling apparently concurred in by Judge Cook, the panel holds it was error to allow the original law firm to withdraw.  The magistrate judge had ruled on what it had thought was a “stipulated” withdrawal, though the record plainly indicated the client’s opposition to it:

“Although this mistake was brought to the district court’s attention, the district court nevertheless affirmed the magistrate judge’s order on the grounds that Conti failed to timely oppose the motion to withdraw. Apparently, the court concluded that Conti was not prejudiced by this oversight because she was represented by counsel at the time and therefore remained free to oppose [plaintiff’s former law firm] Sommers Schwartz’s motion and correct the omission. But we have serious doubts about that conclusion. Although [partner] Golden was acting as lead counsel on Conti’s case, he was her attorney only by virtue of the retainer agreement she signed with Sommers Schwartz, which Sommers Schwartz’s motion effectively was seeking to terminate. Moreover, Golden also submitted his own motion to withdraw prior to the magistrate judge entering its order granting Sommers Schwartz’s motion.”

The case is remanded for a determination of whether the law firm forfeited its right to place a lien on any future recovery on the ground that it violated the terms of the retainer.

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