Title: Doe v. Denny's, Inc.
Citation: N/A
Docket Number: S44144
State: Oregon
Issuer: Oregon Supreme Court
Date: July 24, 1998

Filed:  July 24, 1998

IN THE SUPREME COURT OF THE STATE OF OREGON

JANE DOE,

			Petitioner on Review,

	v.

DENNY'S, INC., a California
corporation; and ROBERT HIBBARD
and KEN JACOBS,

	Respondents on Review.

(CC CV 940538; CA A89182; SC S44144)

	On review from the Court of Appeals.*

	Argued and submitted November 3, 1997.

	Michael B. Collins, Pendleton, argued the cause and filed
the briefs for petitioner on review.

	Emil R. Berg, Boise, Idaho, in association with Carl
Burnham, Jr., of Yturri, Rose, Burnham, Bentz &amp; Helfrich, LLP,
Ontario, argued the cause and filed the briefs for respondents.

	Charles Robinowitz, Portland, filed briefs on behalf of
amicus curiae Oregon Trial Lawyers Association.

	Karen O'Kasey, of Schwabe, Williamson &amp; Wyatt, Portland,
filed a brief on behalf of amicus curiae Oregon Association of
Defense Counsel.

	Before Carson, Chief Justice, Gillette, Van Hoomissen,
Durham, and Kulongoski, Justices.**

	GILLETTE, J.

	The decision of the Court of Appeals and the judgment of the
circuit court are affirmed.

	*Appeal from Umatilla County Circuit Court,

	 J. F. Olsen, Judge.

	 146 Or App 59, 931 P2d 816 (1997).

    **Fadeley, J., retired January 31, 1998, and did not
participate in this decision.	 Graber, J., resigned March 31,
1998, and did not participate in this decision.

	GILLETTE, J.

		This is an action under ORS 659.425(1) (1995), which
prohibits discrimination, based on disability, with respect to
hiring, firing, and other "terms, conditions and privileges" of
employment.(1)  Plaintiff, who is HIV-positive, filed this action
against her former employers, alleging that defendants(2) had
violated ORS 659.425(1) by telling her that a customer had
complained about her HIV condition and that business would suffer
if she continued in their employ.  The trial court entered
summary judgment for defendants and the Court of Appeals
affirmed.  Doe v. Denny's, Inc. 146 Or App 59, 931 P2d 816
(1997).  

		We allowed plaintiff's petition for review to consider
whether an employer might violate the statute by discussing
negative customer perceptions of an employee's disability with an
employee.  We also allowed review of a secondary issue pertaining
to the trial court's denial of a motion to compel the production
of a document -- a denial that the Court of Appeals also
affirmed.  We affirm the decision of the Court of Appeals. 

		As noted, the primary issue presented by this case was
decided on a motion for summary judgment.  In reviewing a trial
court's decision to grant summary judgment, we consider the
evidence that was before the trial court, along with all
reasonable inferences to be drawn from that evidence, in the
light most favorable to the nonmoving party -- here, plaintiff. 
Wallulis v. Dymowski, 323 Or 337, 340, 918 P2d 755 (1996).  We
accept plaintiff's version of the events (to the extent that that
version is set out in her deposition and other evidentiary
materials) as true, as well as other evidence that supports her
position. 

		The relevant events occurred while plaintiff was
training as a server at a restaurant owned by defendant Denny's,
Inc.  Sometime during the training period, plaintiff told her
immediate supervisor, defendant Hibbard, that she had been
diagnosed as HIV-positive.  Hibbard's demeanor toward plaintiff
immediately changed.  He became less friendly and more aloof. 
The next day, Hibbard called plaintiff into his office.  Hibbard
told plaintiff that a "regular customer" had complained about
plaintiff.  According to Hibbard, the customer had said not only
that he knew about plaintiff's HIV condition, but also that he
intended to tell others and to boycott the restaurant as long as
plaintiff was employed there.  Hibbard then told plaintiff that
he could not fire her or lay her off, but that her continued
employment would harm or destroy the restaurant's business.

		Plaintiff offered to resign, but indicated that she
wanted to talk to her Adult and Family Services caseworker first. 
That evening, the caseworker confirmed what Hibbard had said: 
that plaintiff could not be fired because of her HIV status.  The
caseworker also told plaintiff that, if she resigned, she would
lose her eligibility for certain government benefits.  After
plaintiff reported that information to Hibbard, Hibbard and
plaintiff agreed that plaintiff would resign and that Hibbard
would treat that separation from work as a layoff, in order to
assist plaintiff in obtaining unemployment benefits.  Hibbard
also agreed to provide (and did provide) plaintiff with a
favorable letter of reference.

		Sometime after her resignation, plaintiff initiated the
present action against Denny's, Hibbard, and another supervisor,
Jacobs.  In her complaint, plaintiff asserted two claims against
defendants under ORS 659.425(1):  First, that defendants' conduct
amounted to wrongful discharge and, second, that it was unlawful
discrimination with respect to one or more "terms, conditions or
privileges of employment."  In their answer, defendants admitted
that plaintiff had been informed of a customer complaint, but
denied plaintiff's claims of wrongful discharge and unlawful
discrimination.  

		Defendants moved for summary judgment.  They argued
that, because plaintiff had resigned and had not identified any
intolerable working conditions suggesting that her resignation
was involuntary, her wrongful discharge claim must fail as a
matter of law.  With respect to plaintiff's discrimination claim,
defendants noted the absence of any evidence that defendants had
treated plaintiff differently in any "term, condition or
privilege" of employment on learning of her condition.  

		In response to defendants' motion, plaintiff purported
to show that she had been constructively discharged -- that
Hibbard told her about the complaint and his concerns about
public perception of the business in a deliberate and,
ultimately, successful effort to humiliate her into resigning. 
Plaintiff also submitted a cross-motion for summary judgment on
the discrimination claim, arguing that she was entitled to
judgment as a matter of law.

 		Ultimately, the trial court granted defendants' motion
and denied plaintiff's.  The court explained its decision by
noting that plaintiff had resigned and that "there were no
changes in [plaintiff's] working conditions after she gave the
defendants notice of her HIV condition." 

		As noted, on plaintiff's appeal, the Court of Appeals
affirmed.  The Court of Appeals' majority agreed with the trial
court that plaintiff had not demonstrated any change in her
working conditions:

		"Actionable discrimination under [ORS 659.425]
requires that an employee be treated differently in the
work place because of a physical condition in a manner
proscribed by the statute.  Hibbard's statement, made
during a private conversation with plaintiff, that the
customer's statements about plaintiff's condition could
destroy Denny's business did not change anything
concerning the terms or conditions of her employment. 
Even if the jury could properly infer from Hibbard's
statements and demeanor that defendants hoped that
plaintiff would resign, that hope was not expressed in
any inducement or threat that changed a term, condition
or privilege of her employment.  In sum, defendants
said and did nothing that violated the statute.  The
terms and conditions of plaintiff's employment were the
same before, during and after the conversation. 
Similarly, plaintiff's theory of constructive discharge
also fails because there is no evidence of any
intolerable 'conditions' of employment that forced her
to resign."  

Id. at 66-67.   The Court of Appeals also concluded that the
trial court did not err in denying plaintiff's motion to compel. 
Id. at 68.

		We turn first to plaintiff's statutory wrongful
discharge claim.  Under ORS 659.425(1), it is an unlawful
employment practice to "discharge [an individual] from
employment" because of a real or perceived mental or physical
impairment.  Leaving aside (for the moment) the issue of
defendants' motives, we consider a more elementary issue --
whether in fact plaintiff was discharged.  Plaintiff acknowledges
that defendants did not discharge her in the usual sense of that
word.  At least formally, she resigned.  She argues, however,
that her resignation was prompted by working conditions that were
imposed on her because of her HIV condition -- working conditions
that would have caused a reasonable person to resign.  She
contends, in other words, that defendants constructively
discharged her for discriminatory reasons, in violation of ORS
659.425(1).  

		The elements necessary to establish a constructive
discharge were set out by this court most recently in McGanty v.
Staudenraus, 321 Or 532, 557, 901 P2d 841 (1995):

	"[T]o establish a constructive discharge, a
plaintiff must allege and prove that (1) the employer
intentionally created or intentionally maintained
specified working condition(s); (2) those working
conditions were so intolerable that a reasonable person
in the employee's position would have resigned because
of them; (3) the employer desired to cause the employee
to leave employment as a result of those working
conditions or knew that the employee was certain, or
substantially certain, to leave employment as a result
of those working conditions; and (4) the employee did
leave the employment as a result of those working
conditions."

(Footnotes omitted; emphasis in original.)

		Plaintiff asserts that Denny's constructively
discharged her under that standard.  She contends that defendants
intentionally created an intolerable working condition by telling
her that a customer knew about her condition and intended to tell
others, and by implying that her continued employment would harm
her own economic well being and damage or destroy the business. 
She suggests that defendants conveyed an implied threat of public
humiliation -- that she would be forced to deal with inevitable
negative customer reactions herself, without any support or
protection from her employers. 

		In rejecting plaintiff's constructive discharge theory,
the Court of Appeals focused on the apparent absence of any
identifiable change in the "conditions" of plaintiff's
employment.  For the reasons that follow, we agree with that
approach.

		Plaintiff's wrongful discharge claim fails, because she
cannot identify any act or statement by her employer that created
or maintained an intolerable working condition that she would be
forced to endure if she remained on the job.  Hibbard's
prediction that a customer boycott over her employment would
destroy the restaurant's business cannot reasonably be stretched
into a nonexistent threat to withhold protection from abusive
customers.  Hibbard's words do not suggest that inference, and we
are not bound to agree with plaintiff's advocacy for an
interpretation of Hibbard's statement that his words will not
bear.  The Court of Appeals correctly affirmed the trial court's
dismissal of plaintiff's wrongful discharge claim.

		We turn to plaintiff's second claim under ORS
659.425(1) -- that defendants discriminated against plaintiff
with respect to a "term, condition or privilege" of employment
because of her HIV status.  With respect to that claim, plaintiff
offers two arguments.  The first argument relies on a Bureau of
Labor and Industries (BOLI) rule pertaining to employer
evaluations of disabled employees' work performance, OAR 839-006-0250:

	"The attitude or preference of employers,
managers, supervisors, coworkers, clients or the
general public toward the person's perceived or actual
impairment may not be considered by the employer in
evaluating the person's ability to perform the work
involved."        

(Emphasis added.)

		Plaintiff contends that defendants violated that rule 
by revealing a customer's negative perceptions of plaintiff's job
performance to plaintiff when those perceptions were based solely
on her disability.  Plaintiff further contends that, in doing so,
defendant violated ORS 659.425(1), because noncompliance with OAR
839-006-0250 is unlawful discrimination per se:

	"Here, the employer, by revealing such perceptions
to the employee, was telling Doe that her ability to do
her job was impaired because of adverse public
perceptions of her disability and the problems
resulting from such perceptions.  Under OAR 839-006-0250, this type of conduct is discriminatory per se. 
An employer may not, in any way, communicate to an
employee the employer's disapproval of a disabled
employee's job performance, based upon adverse public
perceptions of the employee.  The reasoning behind this
approach is undoubtedly grounded in the notion that
individuals with disabilities may be especially
sensitive about how they are perceived by the public
due to their disability."

		We need not decide whether plaintiff's interpretation
of OAR 839-006-0250 is correct, because her argument under that
interpretation is not supported by the facts in this record. 
Employer was not, by informing plaintiff about adverse customer
perceptions of her disability, making its own evaluation of her
ability to perform as a waitress.  Discriminating lies in
altering working conditions due to a protected factor (handicap,
religion, sex, race, and the like), not in merely acknowledging
orally the hostility of customers toward plaintiff due to her
handicap.  Plaintiff's argument in this respect fails.  

  		Plaintiff's remaining argument suggests that, to raise
a question of fact as to whether defendant had discriminated in a
term, condition, or privilege of employment, it was sufficient
for her to show that defendants' conduct made her feel unwanted
and that that conduct was motivated by the hope that she would
resign.  In so arguing, she decries the Court of Appeals'
"narrow" view of the relevant wording:

	"The Court of Appeals majority approached this
issue very narrowly.  They found that because
defendants 'did not fire plaintiff, change her work
hours, pay her less money or deprive her of a benefit
or privilege that other employees had under their
employment relationship' she was not discriminated
against.  The majority analysis effectively shifts the
issue from the employer's conduct to the nature of the
harm suffered by the employee, by requiring that the
employee must show some tangible loss of a job benefit
in order to prove discriminatory treatment.  

	The problem with this analysis is that it ignores
the power relationships that are present in an
employer-employee setting.  The attitude of the
employer toward the employee is a very important
condition of employment."

(Emphasis in original.)

		We understand plaintiff to be arguing that, contrary to
the Court of Appeals' conclusion, discrimination can exist in the
alteration of an intangible condition of a job, namely, the
employer's subjective attitude toward the employee, providing
that the employee is able to show that the alteration is due to
an impermissible motive.  We need not decide that question,
however, because plaintiff's claim would fail, on this record,
even under the test that she advocates.

		At its essence, proving discrimination requires some
showing of a change in a working condition to the worker's
detriment.  Here, the employer acknowledged that customers likely
would boycott the restaurant, and that that would lead to
economic hardship for the company and for plaintiff.  The
employer stated or implied that it disfavored that consequence --
it hardly could have been otherwise.  However, the employer did
not state or imply that it planned to change any aspect of
plaintiff's working conditions in response to the threatened
boycott.  The fact that plaintiff "felt" unwanted as a result of
employer's comments does not create a fact question about whether
the employer altered a working condition in saying what was said. 
Plaintiff offers no further facts to show that her job as a
waitress in the restaurant required a close working relationship
with the supervisor, so that his behavior in treating her with a
cold shoulder might be viewed as discriminatory behavior under
the legal test that plaintiff advocates.

		In this regard, plaintiff's most serious argument is
that her supervisor called her into his office to speak about the
topics of the customer boycott, potential economic losses for
them both and, for the worker, loss of her reputation in the
community and probable harassment from customers, all with the
hope that plaintiff would choose to resign.

		Some points about the conversation are pivotal.  The
supervisor announced no alterations of plaintiff's working
conditions.  Acknowledging the discriminatory attitudes of
customers, and the harm that may flow from those attitudes, does
not convey any plan of the employer's own to itself engage in
discriminatory actions.  The supervisor conveyed no offensive
terms or rude statements about plaintiff, her infection status or
the difficulties that the customers' attitudes had created.  The
meeting occurred one-on-one, not in front of a group.  Employer
announced no ultimatums or deadlines for a decision by plaintiff
to quit, and made no threats to expel her if she was indecisive
about staying or leaving.  The meeting transpired briefly, and
the supervisor used a conversational tone of voice without undue
stress or profanity.

		Plaintiff may have "felt" humiliated by the employer's
actions, but we cannot say, on this record, that employer
inflicted humiliation on her.  In short, the employer's conduct
made no change in plaintiff's working conditions.  Because it did
not, plaintiff's claim fails.  The trial court properly awarded
summary judgment to defendant.(3) 

    		Plaintiff raises one additional issue, pertaining to
the denial of a motion made during the discovery phase to compel
production of a document.  At the deposition of defendant Jacobs,
he testified that he had prepared a report for his employer
shortly after plaintiff filed her action and that he had
"reviewed" the report before, and in preparation for, his
deposition.  When plaintiff requested that the report be
produced, defendants refused.  Plaintiff then moved to compel
production, citing OEC 612, the evidence rule pertaining to
writings used to refresh memory.(4)  Defendants resisted the
motion, arguing that the report had not been used to refresh
Jacobs' memory and that it was immune from discovery as work
product, ORCP 36 B(3).(5)  Ultimately, the trial court denied the
motion to compel, finding that the report was work product (and
therefore protected from discovery under ORCP 36 B(3)) and that
it was not discoverable under OEC 612, "because said document did
not actually refresh the recollection of defendant Ken Jacobs." 
The  Court of Appeals affirmed.  

		Plaintiff contends that the trial court erred in
concluding that the work-product doctrine precluded production of
the document.  She argues that any work-product protection that
the report might otherwise have enjoyed was waived under OEC 612
when Jacobs reviewed it before giving his deposition.  

  		Whatever the merits of plaintiff's position in theory,
we decline to consider them in this case, because the trial
court's alternative ruling is dispositive.  If, as the trial
court found, the document did not, in fact, refresh Jacob's
memory -- and the record contains evidence that supports that
finding -- then failure to produce it for use in his cross
examination cannot have been reversible error.  The Court of
Appeals therefore did not err in this respect.

		The decision of the Court of Appeals and the judgment
of the circuit court are affirmed. 

1. 	ORS 659.425(1) (1995) provided:

		"For the purpose of ORS 659.400 to 659.460, it is
an unlawful employment practice for any employer to
refuse to hire, employ or promote, to bar or discharge
from employment or to discriminate in compensation or
in terms, conditions or privileges of employment
because:

		"(a) An individual has a physical or mental
impairment which, with reasonable accommodation by the
employer, does not prevent the performance of the work
involved;

		"(b) An individual has a record of a physical or
mental impairment; or 

		"(c) An individual is regarded as having a
physical or mental impairment."

The 1997 legislature amended ORS 659.425 in ways that do not
affect the present discussion.

2. 	Defendants are Denny's, Inc., the restaurant chain that
employed plaintiff, and Jacobs and Hibbard, two of her
supervisors.

3. 	Our conclusion that summary judgment for defendants was
proper also disposes of plaintiff's claim that the trial court
erred in denying her cross-motion for summary judgment.  

4. 

		OEC 612 provides, in part:  

		"If a witness uses a writing to refresh memory for
the purpose of testifying, either while testifying or
before testifying if the court in its discretion
determines it is necessary in the interests of justice,
an adverse party is entitled to have the writing
produced at the hearing, to inspect it, to cross-examine the witness thereon, and to introduce into
evidence those portions which relate to the testimony
of the witness."  
  

5. 

		ORCP 36 B(3) provides, in part:

		"Subject to the provisions of rule 44, a party may
obtain discovery of documents and tangible things
otherwise discoverable under subsection B(1) of this
rule and prepared in anticipation of litigation or for
trial by or for another party or by or for that other
party's representative (including an attorney,
consultant, surety, indemnitor, insurer, or agent) only
upon a showing that the party seeking discovery has
substantial need of the materials in the preparation of
such party's case and is unable without undue hardship
to obtain the substantial equivalent of the materials
by other means."