Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_06-cv-02611/USCOURTS-azd-2_06-cv-02611-0/pdf.json

Nature of Suit Code: 442
Nature of Suit: Civil Rights Employment
Cause of Action: 28:1331 Fed. Question

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Shumway states that her motion for partial summary judgment on her retaliation

claim is based on the assumption that her motion for summary judgment in a companion

case, alleging breach of contract, will be granted. See CV-06-1188-PHX-DKD. A resolution

of Shumway’s contract claim, however, is not a prerequisite to our determination of the

retaliation claim in this case. Whether DHL breached the 2004 Field Sales Compensation

Plan, though perhaps relevant, is not determinative of her retaliation claim.

WO

NOT FOR PUBLICATION

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

The State of Arizona, ex rel. Terry

Goddard, the Attorney General; the Civil

Rights Division of the Arizona Dept. of

Law; and Jill Shumway,

Plaintiffs,

vs.

DHL Express (USA), Inc.,

Defendant.

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No. CV-06-2611-PHX-FJM

ORDER

The court has before it DHL’s motion for summary judgment (doc. 76), Shumway’s

response (doc. 85), the State of Arizona’s response (doc. 89), and defendant’s reply (doc. 92).

We also have before us Shumway’s motion for partial summary judgment (doc. 81),

defendant’s response (doc. 87), and Shumway’s reply (doc. 93).1

 

I

In 2003, Jill Shumway was an account representative with Airborne Express, earning

an annual base salary of $37,500. DHL Express (USA), Inc. (“DHL”) acquired Airborne in

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August 2003, and Shumway became a DHL employee earning the same base salary. In July

2004, DHL hired Greg Powers and Patrick Van Den Berg as account representatives, with

a starting base salary of $47,500. Shumway complained to her supervisors Brian Cooper and

Brian Kelly about the pay disparity. When they failed to resolve the issue to her satisfaction,

she filed a discrimination complaint with DHL’s human resources department. In October

2004, over the objection of her supervisors, DHL’s human resources department raised

Shumway’s salary to $43,500, still below that of Powers and Van Den Berg. Shumway’s

MPSJ at 4.

In the fall of 2004, shortly after filing the discrimination complaint, Shumway began

negotiating the terms of a shipping contract with Walgreen’s Mail Services (“WMS”), a

wholly-owned subsidiary of Walgreen Co. Her supervisors, as well as DHL’s pricing

department, initially approved the terms of the sale. Shumway understood that this sale

would earn her a sizable sales commission known as a “controlled credit.” However, in

October 2004, before the sale was finalized, the pricing department notified Jerry Ulmer, the

national account manager for Walgreen Co., of the pending WMS sale. As national account

manager, Ulmer believed that he was entitled to the full revenue credit for the sale to a

Walgreen Co. subsidiary.

According to DHL, under the “51% Rule” a national account manager receives the

revenue credit for any sale to a subsidiary of a national customer if the national customer

owns at least 51% of the subsidiary. Therefore, in January 2005, Brian Kelly and Tom

Wolford concluded that Ulmer was entitled to controlled credit for the WMS account, and

that Shumway was entitled to “managed credit,” resulting in a reduction of thousands of

dollars in commissions. She now contends that the application of the 51% Rule to deprive

her of the controlled credit was pretext for DHL’s retaliation against her for filing the

discrimination complaint. 

Shumway filed a charge of discrimination on June 30, 2005, with the Arizona

Attorney General’s Office, alleging that DHL discriminated against her by paying her less

than similarly-situated males and retaliated against her for reporting alleged discrimination

Case 2:06-cv-02611-FJM Document 96 Filed 01/16/08 Page 2 of 9
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2

The State has voluntarily dismissed, under Rule 41(a)(1), Fed. R. Civ. P., its sex

discrimination claim under the Arizona Civil Rights Act, A.R.S. § 41-1463(B)(1), as

untimely (doc. 82).

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by denying her controlled credit for the WMS account. The Attorney General’s office

investigated Shumway’s charge, issued a reasonable cause determination, and ultimately

filed a complaint against DHL on behalf of itself and Shumway.

II

A

Shumway claims that DHL violated Title VII, 42 U.S.C. § 2000e-2(a), by paying her

less than similarly-situated male employees.2

 DHL contends that Shumway’s sex

discrimination claim should be dismissed because she failed to file the discrimination charge

within 300 days “after the alleged unlawful employment practice occurred,” as required by

42 U.S.C. § 2000e-5(e)(1). 

The United States Supreme Court recently explained that the statutory term

“employment practice” generally refers to “a discrete act or single ‘occurrence’ that takes

place at a particular point in time.” Ledbetter v. Goodyear Tire & Rubber Co., 127 S. Ct.

2162, 2169 (2007) (citing Nat’l R.R. Passenger Corp. v. Morgan, 536 U.S. 101, 110-11, 122

S. Ct. 2061, 2071 (2002)). With respect to a pay discrimination claim, the discrete act

occurs, and the EEOC charging period is triggered, with a decision setting an employee’s

pay. Id. at 2165. The Court expressly rejected the argument that an employer violates Title

VII and triggers a new charging period every time it issues a paycheck under a discriminatory

pay structure. Id. at 2167-70. “A new violation does not occur . . . upon the occurrence of

subsequent nondiscriminatory acts that entail adverse effects resulting from the past

discrimination,” such as the issuance of each paycheck. Id. at 2169. Instead, these acts are

the present effects of prior discriminatory conduct that themselves have “no present legal

consequences.” Id. at 2168. In contrast, “if an employer engages in a series of separately

actionable intentionally discriminatory acts, then a fresh violation takes place when each act

is committed.” Id. at 2169 

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Defendant contends that its “pay-setting decision” occurred when it hired Powers and

Van Den Berg in July 2004 and set their salaries $10,000 higher than Shumway’s. She

discovered the discrepancy on July 30, 2004, but did not file a discrimination charge until

June 30, 2005–outside the 300-day EEOC charging period. Shumway responds that the paysetting decision was not made until October 14, 2004, when she complained about the pay

discrepancy and DHL refused to increase her pay to a level commensurate with her male

counterparts. Both parties are correct. Defendant made a pay-setting decision when it set

Powers and Van Den Berg’s salaries at a rate different from Shumway’s. This act occurred

outside the 300-day charging period and is therefore not actionable. However, a separate

pay-setting decision was made on October 14, 2004, when DHL adjusted Shumway’s salary

but refused to match the salaries of similarly-situated males. This was not simply “an

adverse effect resulting from past discrimination,” id., but was a distinct, affirmative paysetting determination. Because it occurred during the 300-day period, this claim is properly

before us.

B

To support a claim under Title VII, Shumway must first establish that (1) she belongs

to a protected class; (2) she was qualified for the position; (3) she was subjected to an

adverse employment action; and (4) similarly-situated males were treated more favorably.

Metoyer v. Chassman, 504 F.3d 919, 950 (9th Cir. 2007). If she succeeds in making a prima

facie case, the burden of production shifts to DHL to articulate a “legitimate,

nondiscriminatory reason” for its employment decision. Noyes v. Kelly Servs., 488 F.3d

1163, 1168 (9th Cir. 2007). If DHL carries its burden of production, the burden of

production shifts back to Shumway to raise a triable issue of fact that DHL’s proffered reason

was pretext for unlawful discrimination. Id. 

DHL does not challenge Shumway’s prima facie case, but instead argues that she

failed to produce any evidence that its articulated reason for the pay-setting decision was

pretext for discrimination. It asserts that, at the time it adjusted Shumway’s salary, Liny

Schwahn and Patti McEwen, two female DHL executives, compared Shumway’s sales

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3

Arizona looks to Title VII when analyzing claims under the Arizona Civil Rights Act.

See Higdon v. Evergreen Int’l Airlines, Inc., 138 Ariz. 163, 165 n.3, 673 P.2d 907, 909 n.3

(1983). Therefore, we consider these claims together. 

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experience to that of Powers and Van Den Berg. Shumway had approximately two years of

experience, while Powers had been in sales for over four years and had been a district sales

manager, and Van Den Berg had over four years of sales experience and had worked for one

of DHL’s competitors, Federal Express. Schwahn and McEwen concluded that, although

Shumway qualified for a salary increase, because she had less sales experience than Powers

and Van Den Berg, she was not eligible for their salary level. DSOF ¶¶ 26-30. 

Shumway does not respond to this explanation or otherwise attempt to establish

pretext. Instead, she simply argues that because DHL made a salary adjustment she

necessarily “demonstrated she was doing the same job as her comparators and had the same

qualifications.” Shumway’s Response at 9. We disagree. DHL adjusted Shumway’s salary

based on her comparative years of sales experience. It concluded that she had less experience.

Without challenging this conclusion, Shumway has failed to satisfy her burden of producing

evidence from which a jury could conclude that DHL’s proffered explanation for the pay

disparity was pretext for sex discrimination. Accordingly, we grant DHL’s motion for

summary judgment on the sex discrimination claim.

III

The State and Shumway (collectively “plaintiffs”) claim that DHL retaliated against

Shumway for filing a discrimination charge when it denied her controlled credit for the WMS

sale, in violation of Title VII, 42 U.S.C. § 2000e-3(a) and A.R.S. § 41-1464(A).3

 Again, DHL

does not challenge plaintiffs’ prima facie case of retaliation. Instead, it argues that plaintiffs

have failed to present sufficient evidence that its articulated reason for denying the controlled

credit was pretext for unlawful retaliation. Plaintiffs can show pretext “either directly by

persuading the court that a discriminatory reason more likely motivated the employer or

indirectly by showing that the employer’s proffered explanation is unworthy of credence.”

Texas Dep’t of Cmty. Affairs v. Burdine, 450 U.S. 248, 256, 101 S. Ct. 1089, 1095 (1981).

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In order to create a genuine issue of fact as to pretext sufficient to defeat DHL’s motion for

summary judgment, “very little evidence of discriminatory motive” is required. Little v.

Windermere Relocation, Inc., 301 F.3d 958, 971 (9th Cir. 2002). 

DHL asserts that it has an established policy and practice, known as the “51% Rule,”

under which the commission credit for a sale to any subsidiary of an existing customer goes

to the person who manages the parent company’s national account, no matter who made the

sale to the subsidiary. DSOF ¶ 43. It contends that the 51% Rule dictated that Jerry Ulmer,

not Shumway, was entitled to the controlled credit. DHL employees Tom Wolford, Brian

Kelly, and Jeremy Ulmer testified that DHL has consistently followed the 51% Rule. Id. 

To establish pretext, plaintiffs argue that there is no evidence that the 51% rule existed

before the January 2005 decision to deny Shumway the controlled credit. They claim that

there is nothing in any written DHL document that refers to the 51% Rule or otherwise

supports denying her the controlled credit. “When pressed on the details of this unwritten

policy, DHL offers only vague, contradictory interpretations, all of which lack credibility.”

State’s Response at 13. Plaintiffs contend that the Rule was invoked only as an after-the-fact

justification for its decision. 

DHL concedes that it cannot produce any document showing that the 51% Rule was

ever communicated to account representatives. Defendant’s Response at 4. Nevertheless, it

contends that the Rule’s existence before January 2005 is established in emails, powerpoint

presentations, written instructions, and sales presentations to new hires. DSSOF ¶¶ 66-83.

Citing paragraphs 72, 73, and 75 of its statement of facts, DHL contends that it communicated

information regarding the 51% Rule to its district and regional managers “beginning in June

2004.” DHL’s Response at 5. But these references do not support this proposition. First,

DHL refers to an undated document entitled “CAC Business Rules,” purporting to describe

the 51% Rule, DSSOF, ex. W, and an email dated May 10, 2005, again purportedly referring

to the 51% Rule, DSSOF, ex. V. Yet neither of these documents is probative of the existence

of the 51% Rule before January 2005. DHL also refers to an undated page from a powerpoint

presentation that ambiguously provides, “[a]ny business unit must be 51% owned by the

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controlling company,” DSSOF, ex. U, which allegedly “went out . . . somewhere in 2004,”

DSSOF, ex. T at 125. Even if we assume that this document was distributed to sales staff in

June 2004, its ambiguous content leaves a question of fact as to whether a 51% Rule that

would preclude Shumway’s controlled commission existed before January 2005. 

DHL correctly argues that in judging whether an employer’s proffered justification is

“false,” it is not important whether it is objectively false, but only whether the “employer

honestly believed its reason for its actions, even if its reason is ‘foolish or trivial or even

baseless.’ ” Villiarimo v. Aloha Island Air, Inc., 281 F.3d 1054, 1063 (9th Cir. 2002) (citation

omitted). However, DHL’s inability to substantiate the existence and application of the 51%

Rule before January 2005 can reasonably be construed by a trier of fact as evidence that the

51% Rule was not a “consistent policy and practice,” thereby casting doubt on whether it

honestly believed its proffered reasons to deny Shumway the controlled credit.

Finally, plaintiffs contend that DHL acknowledged that the 51% Rule is generally

written into its national contracts, such that subsidiary entities are incorporated into the

national contract. State’s SOF ¶ 43. Yet the Airborne/Walgreen Co. agreement does not

contain a 51% subsidiary ownership clause and WMS was never expressly included as part

of that agreement. Id.; PSSOF, ex. 30. In December 2004, rather than simply incorporating

WMS into the existing Walgreen Co. national contract, DHL and WMS entered into a

completely new contract with different rates and structure. 

Based on the foregoing, we conclude that plaintiffs have produced sufficient evidence

from which a reasonable fact finder could conclude that DHL’s explanation for denying the

controlled credit was pretext for retaliation. Accordingly, we deny both parties motions for

summary judgment on the retaliation claim.

IV

Finally, the State claims that DHL retaliated against Shumway by denying her a

promotion after she filed a discrimination charge. Shumway does not assert this claim herself.

Shumway’s Response at 4. DHL argues that Shumway has not exhausted her administrative

remedies for the failure to promote claim and therefore the claim must be dismissed.

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4

We also note that the State’s complaint contains no reference to a failure to promote

claim, nor has the State ever sought to amend the complaint in order to raise such a claim.

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Before seeking judicial relief, a plaintiff must exhaust administrative remedies by

either “filing a timely charge with the EEOC, or the appropriate state agency, thereby

affording the agency an opportunity to investigate the charge.” Freeman v. Oakland Unified

Sch. Dist., 291 F.3d 632, 636 (2002). “Incidents of discrimination not included in an EEOC

charge may not be considered by a federal court unless the new claims are like or reasonably

related to the allegations contained in the EEOC charge.” Lyons v. England, 307 F.3d 1092,

1104 (9th Cir. 2002). A claim is “reasonably related” if it falls “within the scope of the

EEOC’s actual investigation or an EEOC investigation which can reasonably be expected to

grow out of the charge of discrimination.” Id. (emphasis in original) (citation omitted). In

making this determination, we “focus on the factual allegations made in the charge itself,

describing the discriminatory conduct about which a plaintiff is grieving.” Freeman, 291 F.3d

at 637. 

On June 30, 2005, Shumway filed a charge of discrimination with the Arizona Civil

Rights Division (“ACRD”), alleging that DHL discriminated against her by paying her less

than male employees, and then retaliated against her for filing the grievance by depriving her

of controlled credit. DSOF, ex. R. In contrast, the “failure to promote claim” involves a

discrete set of facts not encompassed by these charges. On July 11, 2005, Shumway spoke

with Brian Cooper regarding a promotion and received the necessary paperwork to begin the

process. DSOF ¶ 61. Brian Kelly then allegedly attempted to block the promotion, at one

point stating that Shumway should not be promoted because she was pursuing a

discrimination claim. State’s SOF ¶ 59. None of these facts are included in the charge filed

with the ACRD. The language of the charge itself would not have reasonably resulted in an

agency investigation encompassing DHL’s failure to promote Shumway. Because Shumway

failed to exhaust her administrative remedies regarding the failure to promote claim, it is not

properly before us and is dismissed.4

 

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Moreover, Shumway admits that she voluntarily decided not to pursue promotion with DHL

and never completed the required paperwork for promotion.

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V

IT IS ORDERED GRANTING DHL’s motion for summary judgment on the sex

discrimination claim and the failure to promote claim, and DENYING its motion on the

retaliation claim (doc. 76). IT IS FURTHER ORDERED DENYING Shumway’s motion

for partial summary judgment (doc. 81).

DATED this 16th day of January, 2008.

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