United States Court of Appeals FOR THE EIGHTH CIRCUIT

___________ No. 96-3792

___________ James Moschetti, *

Appellant, *

v. * District Court for the Chicago, Central & Pacific * Railroad Company, *

Appellee. * *

* Appeal from the United States

* District of Northern Iowa.

*

___________ Submitted: June 11, 1997 Filed: July 11, 1997

___________ Before MURPHY, HEANEY, and JOHN R. GIBSON, Circuit Judges.

___________ MURPHY, Circuit Judge. James Moschetti sued his former empl oyer, Chicago, Central & Pacific Railroad Co. (CCP), for retaliatory dismissal in violation of Title VII, 42 U.S.C. § 2000e et seq. (1997), and the Iowa H uman Rights Act, Iowa Code § 216, et seq. (1997), for his support of an African American employee

. The district court granted summary judgment to C CP because it accepted the company's articulated non-discriminatory business reason for hi s terminationwithout squarely considering whether it was the real reason
or a pretextual explanation for intentional discrimination. We reverse an d remand.

## CCP

asked Moschetti to provide a sworn statement as part of its own internal 1 

## investigation of Forte's claim. Moschetti said in his statement that he believed Forte was a goodemployee and that racial discrimination had nothing to do with hi s dischar ge; he also denied ever hearing his supervisor make a racially derogatory statement.
Inh is deposition in this case Moschetti claimed that he had lied in his CC P statement because he was concerned at the time about keeping his job. He now says that CCP discriminated against Forte, that Forte's dismissal w as based on race, and that he was terminated because of his support for Forte. -2- In December 1992, Moschetti was working as CCP's Chief Mechanica l Officer when he hired Emmitt Forte, an African A merican, to work under him as a manager. Subsequently Moschetti complainedto his direct supervisors
on numerous occasions about what he perceived to be unfair and raciall y motivated treatment of Forte. For example, Mosc hetti told his supervisors he did not think they adequately handled incidents near Forte's offic e inv olving a fake bomb and racially derogatory graffiti. Moschetti als o repeatedlysided with Forte when he had disputes with other employees

. When Moschetti demoted a white worker named Jay Claus in May 1993, on e supervisor told him that he could not believe he had demoted Claus while retaining that "black bastard."
Shortlyafter this last incident, in June of 1993, Moschetti' s responsibilities were substantially curtailed. CCP states this demotion
was because Moschetti failed to adhere to departmental budgets, traveled excessively, made decisions which led to labor difficulties, and was not complete lycandid about his interest in a job opening with anothe r employer. Moschetti alleges his demotion was part of the retaliation he suffered for his support of Forte.

Fort e was dismissed in August of 1993 and later filed a rac e discrimi nationclaim against CCP. After Forte was dismissed, Moschett i 1 wrote a positive letter of

## The

analysis for both the federal and state claims is the same under Iowa law. 2 

## SeeIowa Co de § 216.6 (1997); see e.g. , Hulme v. Barrett , 480 N.W.2d 40, 42 (Iowa 1992); Naylor v. Georgia-Pacific Corp. , 875 F.Supp. 564 (N.D. Iowa 1995). -3- recommendationfor him. Moschetti claims that his supervisors expressed their displeasure to him when they learned of this letter.

In 1990 -92 and again in 1994, CCP was responsible for the imprope r release of oil from two of its railyards. The c lean up costs for CCP were app roximately$35,000. CCP contends that Moschetti was primaril y responsible for monit oring the systems that failed in each spill, that he did not fulfill this responsibility adequately, and that he failed t o commun icate with engineering staff to determine if the systems wer e functioning properly. CCP states that Moschetti was not disciplined for the first spill, but that the second spill (known as the Virden Cree k spill), combined with the earlier problems which had led to his demotion, resulted in his discharge in October 1994.

Mosch etti contends that his discharge was based on his support o f Forte. He disputes whether his department was primarily responsible for the Virden Creek spill and the extent of his knowledge about the systems that failed. He also argues that he took approp riate steps to monitor the oil systems and that other employees had not been terminated after eve n more egregious accidents. Under Title VII an employer is prohibited from discriminating a gainst
an empl oyee who has "opposed any practice made an unlawful employmen t practice" by the stat ute, or who has "made a charge, testified, assisted, or participated in any manner in an investigatio n, proceeding, or hearing" under the s tatute. 42 U.S.C. § 2000e-3(a) (1997). The order an d 2 all ocation of the burden of proof in this type of case is laid out i n McDonnell Douglas Corp v. Green , 411 U.S. 792 (1981). At the first stage, the plaintiff bears the initial burden o f establishing a prima

## -4- facie cas e of discrimination. The prima facie case, in the absence of an exp lanation from the employer, creates a presumption that the emp loyer unlawfully discriminated against the employee. If th e plaintiff establishes a prima facie case, the burden of productio n shifts at the second stage to the defendant, who must articulat e some leg itimate, nondiscriminatory reason for the adverse employmen t ac tion. If the defendant carries this burden of production, th e presumption raised by the prima facie case is rebutted and drop s from the case. The burden then shifts back at the third and final stage to the plaintiff, who is given the opportunity to show that th e employer's proffered reason was mere ly a pretext for discrimination. The plaintiff retains at all times t he ultimate burden of persuading the trie r of fact that the adverse employment action was motivate d by intentional discrimination.
Rothmeier v. Investment Advisers, Inc. , 85 F.3d 1328, 1332 (8th Cir. 1996) (citations omitted); see also , Ryther v. KARE 11 , 108 F.3d 832, 836 (8th Cir.)(enbanc), cert. denied , 1997 WL 181004 (1997). The key inquiry is whethe r Moschetti has presented evidence sufficient to create a genuin e issue of fact as to whether his employer intentionally discriminate d against him in violation of Title VII. Rothmeier , 85 F.3d at 1337. Our review of a summary j udgment is de novo. Michalski v. Bank of Am. Ariz. , 66 F.3d 993, 995 (8th Cir. 1995). After the district court concluded Moschetti had presented suff icient evidence of a prima f acie case, it considered whether CCP had articulated
a legitimate, non-discriminatory reason for its decision to fire Moschetti

. The reason given by CCP was that Moschetti had been fired for hi s involvement in the Vi rden Creek oil spill and for other instances of poor performance. In response the court stated that "courts will not secon d guess employer's business decisions when determining whether the reaso n given for the termination was a pretext for disc rimination," citing Hutson v. McDonnell Douglas Corp. , 63 F.3d 771, 781 (8t h Cir. 1995). It declined to "se cond guess" the articulated neutral business reason and grante d summary judgment to the employer. Hutson sh ould not be read to mean that once an employer ha s articulated a

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legitimate and non-discriminatory reason for its actions, that reason must be accepted without question. The third stage of the McDonnell Dougla s burd en shifting scheme requires consideration of whether the proffere d reason was in fact th e real reason the employer acted or if it was really a pretextual explanat ion for intentional discrimination. See Gaworski v. ITT Comm. Fin. Corp. , 17 F.3d 1104, 1110 (8th Cir. 1994)(materiall y conflicting evidence raises question of fact about the believability, not the propriety, of the proffered explanation). T he district court erred in not completing the required analysis.
Although the district court recognized that Moschetti had presented evidence of pretext, it did not complete the analysis required by the thir d stage of the McDonnell Douglas burden shifting s cheme. Rather, it went on to say: The Court will not second guess CCP' s business decision to retain or terminate employees responsible for property damage or environmental disasters. Whether the Virden Creekspill was as damaging to CCP as the other incidents and whether Plaintiff's involvement in two spills is justification for his termination are issues for CCP to dete rmine, not the Court.
We agree with the district court that the question at this stage is not whether the emplo yer's explanation was a good or bad business reason. The reason proffered by CCP was non-discriminato ry on its face, satisfying its burden of production under the second stage of McDonnell Douglas . The questionat this stage is whether Moschetti presented enough evidence to allowa reasonable fact finder to infer that intentional discrimination, rather t han the proffered explanation, was the real reason for hi s termination. Rothmeier , 85 F.3d at 1336-37; see also , Ryther , 108 F.3d at 836-38. The district court did not squarely rea ch the question of whether Moschetti has met thi s burden so it erred in granting summary judgment to CCP.
The ju dgment is reversed, and the case is remanded for furthe r proceedings.

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A true copy.

Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.