Opinion ID: 422257
Heading Depth: 2
Heading Rank: 1

Heading: facts

Text: 2 This case is before us essentially as a factual dispute. Though we recognize that Liberty Mutual hotly disputes some of the district court's findings, we shall liberally quote from them to establish a factual predicate for our discussion: 3 4. Liberty Mutual Insurance Company has a rule prohibiting its adjusters and first-year supervisors from attending law school. This law school rule was proposed and implemented on a nationwide basis by Mr. Edmund A. Carr, Vice President and Home Office Assistant General Claims Manager for Liberty Mutual, in November, 1972. Prior to that time, [s]ome of the [defendant's] nine claims divisions already had rules or policies in effect.... The Southwest Division [which encompasses seven states, including Texas, Arkansas, and Louisiana] was one of those divisions... Since sometime in the middle 1960's, adjusters and first-year supervisors in the Southwest Division had to choose between law school [and] Liberty Mutual. Defendant's Post-trial Brief, at 3, 11. It is the application of the defendant's law school rule in the Southwest Division that is at issue in the present case. 4 5. Plaintiff Joan Chescheir was first hired by Liberty Mutual in March, 1973, as a claims adjuster in the Dallas office. In January, 1975, she voluntarily resigned. Five months later, in June, 1975, she sought employment in the defendant's Houston office. She was hired, once again, as a claims adjuster. A few months later, in the fall of 1975, plaintiff Chescheir entered law school. 5 6. The following year, on Thursday, August 26, 1976, Mr. Wyatt Trainer, Claims Manager of the defendant's Houston office, received an anonymous letter informing him that Ms. Chescheir was attending law school. See Defendant's Exhibit 62. After consulting with his assistants and superior, Mr. Trainer confronted Ms. Chescheir. She admitted that she was going to law school. He informed her that she could not attend law school and continue to work at Liberty Mutual. She refused to give up law school. Consequently, on Friday, August 27, 1976, plaintiff Chescheir was constructively discharged. 6 7. Plaintiff Charity O'Connell was hired by Liberty Mutual as a claims adjuster in the Houston office in November, 1975. While working for Liberty Mutual, plaintiff O'Connell took a coffee break with Ms. Sue Smith, a fellow adjuster, Ms. Carolyn Bailey, a supervisor, and Mr. Timothy Schwirtz, a new adjuster. It is not clear whether Ms. Shirley Cole, another supervisor at Liberty Mutual, also took part in the coffee break. It was Mr. Schwirtz's first day on the job. When Joan Chescheir's name came up in the conversation, he asked who she was. It was explained to Mr. Schwirtz that Joan Chescheir was a former adjuster who had been fired for going to law school. According to plaintiff O'Connell, Mr. Schwirtz then said, Oh, that's strange, because when I was hired, when [Charles S.] Wells [Southwest Division Claims Manager] interviewed me, he told me that I could go to law school and in fact if I came down to the Houston office, there were law schools in Houston. Tr. at 287. 7 8. Plaintiff O'Connell testified that she was shocked by this revelation and became rather angry. Tr. at 288-289. After the coffee break was over, she confronted Mr. Terry Hickman, her supervisor. She related her conversation with Mr. Schwirtz to Mr. Hickman. She said that it was unfair: Joan Chescheir had been fired for going to law school, yet Tim Schwirtz had been told that he could go to law school. She told Mr. Hickman that she, like Joan Chescheir, was presently attending law school and that if Liberty Mutual fired her, it would be discriminating on the basis of sex. 8 9. Mr. Hickman relayed this information to Mr. Wyatt Trainer, Houston Office Claims Manager, who had confronted Ms. Chescheir. See Finding of Fact 6. Mr. Trainer did not speak with Mr. Wells or Mr. Schwirtz to determine if Mr. Wells had, in fact, told Mr. Schwirtz that he could go to law school. He did, however, speak with plaintiff O'Connell. He informed her that she had to either quit law school or leave Liberty Mutual. Plaintiff O'Connell refused to quit law school. She was, therefore, fired that afternoon. 9 10. As the defendant states in its post-trial brief, at 2, this is essentially a one issue case: whether the defendant applied the [law school] rule equally to male[s] and female[s]. The plaintiffs allege that Liberty Mutual allowed at least three male employees--William McCarthy, Alvin Dwayne White, and James Ballard--to attend law school while working as adjusters or first-year supervisors. The defendant denies this allegation. 10 11. Mr. William McCarthy was hired as a claims adjuster in Liberty Mutual's Houston office in May, 1971. Four months later, in September, 1971, Mr. McCarthy entered law school. Mr. McCarthy continued to work as an adjuster in Liberty Mutual's office and attend law school until January, 1974. At that time, he left Liberty Mutual to attend law school full time. 11 [Findings 12 and 13 relate Mr. McCarthy's notoriety for including detailed legal analyses in his claim reports.] 12 14. Given the above, it is not surprising that, as Mr. Walter Smith testified, Mr. McCarthy was well known at Liberty Mutual for his legalistic reports. Tr. at 538. Mr. Smith was a supervisor in Liberty Mutual's Houston office for a portion of the time during which Mr. McCarthy served as an adjuster and attended law school. He admitted that it was rumored, at that time, that Mr. McCarthy was attending law school. Tr. at 536. Having had an opportunity to observe his demeanor on the witness stand, the Court is convinced that Mr. Smith knew, while he was a supervisor in the Houston office, that Mr. McCarthy was attending law school. 13 15. The Court is also convinced that Mr. Richard Krueger, the assistant claims manager in the Houston office who was so enthusiastic about Mr. McCarthy's pipeline memo, knew that Mr. McCarthy was attending law school while working as an adjuster. Mr. Charles Neathery, the other assistant claims manager, and Mr. Wyatt Trainer, the Houston Office Claims Manager, at a minimum, suspected that Mr. McCarthy was attending law school, but preferred not to ask and confirm their suspicions. 14 16. When Mr. McCarthy left Liberty Mutual to become a full-time law student, he made it clear that he had, in fact, been attending law school while working as an adjuster. Even so, in July, 1975, when Mr. McCarthy completed law school, he was actually retained by Liberty Mutual as house counsel in its Houston office. From July, 1975, on, this was common knowledge in the defendant's Houston office. 15 17. Mr. Alvin Dwayne White was hired as an adjuster in Liberty Mutual's Fort Worth office in the fall of 1973. Early in 1974, Mr. White decided that he wanted to transfer to Liberty Mutual's Houston office, in part, to attend law school. He expressed that desire to one or more of his superiors. Sometime thereafter, most likely in March or April, 1974, one of Mr. White's superiors discussed the matter with Mr. Charles S. Wells. Claims Manager of Liberty Mutual's Southwest Division. Knowing that Mr. White wanted to attend law school while working as an adjuster in Houston, Mr. Wells approved his transfer. In late August or early September, 1974, Mr. White did, in fact, transfer to the defendant's Houston office. In September, 1974, while working as an adjuster in that office, he entered law school. Three months later, in December, 1974, Mr. White left Liberty Mutual. 16 [Findings 18 and 19 detail correspondence and testimony regarding whether Mr. Wells ever told Mr. White that he could not attend law school.] 17 20. Mr. White's superiors, including Mr. Wells, the Claims Manager of Liberty Mutual's entire Southwest Division, knew that Mr. White wanted to transfer to Houston, in part, to attend law school while working as an adjuster. They did not tell him that he could not do so. To the contrary, they approved his transfer. They were fully aware that Mr. White, while working as an adjuster in the Houston office, was attending law school. 18 21. Mr. James Ballard began working as an adjuster in Liberty Mutual's Houston office in July, 1973. In September, 1975, Mr. Ballard entered law school. He continued to work as an adjuster. In March, 1977, while still in law school, Mr. Ballard was promoted to supervisor. 19 22. As numerous witnesses, including Mr. Charles Wells, Southwest Division Claims Manager, and Mr. Larry Ogletree, presently Southwest Division Assistant Claims Manager, testified without contradiction, supervisors at Liberty Mutual were members of management. It was their responsibility to enforce the law school rule. Mr. Ballard, of course, did not enforce the rule against himself. 20 23. In October or November, 1975, soon after Mr. Ballard entered law school, Ms. Shirely Cole and Mr. Gary Ball, adjusters at Liberty Mutual's Houston office, learned of Mr. Ballard's law school attendance. Ms. Cole and Mr. Ballard were dating at the time. She told no one of Mr. Ballard's law school attendance. Mr. Ball, on the other hand, did pass the information on to other individuals. As a result of Mr. Ball's statements, in December, 1975, or January, 1976, Mr. John Bedingfield, a supervisor in Liberty Mutual's Houston office, learned that Mr. Ballard was attending law school. Mr. Bedingfield did nothing to see that the law school rule was enforced against Mr. Ballard. 21 24. In February, 1976, Mr. Ball was promoted to the position of supervisor. He also did nothing to see that the law school rule was enforced against Mr. Ballard. 22 25. By March or April, 1976, it was rumored throughout Liberty Mutual's Houston office that Mr. Ballard was going to law school. He was not, however, questioned about his law school attendance. 23 [Finding 26 quotes a letter from the EEOC asking Liberty Mutual to explain the fact that one of its male adjusters was attending law school and a letter from Liberty Mutual declining to explain or investigate until told the name of that adjuster.] 24 27. In May, 1977, Ms. Shirley Cole was promoted to the position of supervisor. She and Mr. Ballard were still dating. Ms. Cole took no action to see that the law school rule was enforced in regard to Mr. Ballard. 25 28. On November 29, 1977, counsel for plaintiff Chescheir mailed a set of interrogatories to counsel for the defendant. Interrogatory No. 13 asked whether Mr. James Ballard had ever attended law school while classified as an adjuster. One and a half months later, on January 12, 1978, Mr. Wells, Southwest Division Claims Manager, called Mr. Larry Ogletree, then Houston Claim Manager, and instructed him to ask Mr. Ballard whether he had attended law school and to discharge him if he admitted having done so. When Mr. Ogletree questioned Mr. Ballard, Mr. Ballard said that he was attending law school, that it was currently between semesters, and that he intended to return to school when the new semester began. Mr. Ballard was, at that time, fired. 26 29. The defendant acknowledges that Mr. McCarthy, Mr. White, and Mr. Ballard went to law school while working as adjusters and, in Mr. Ballard's case, a first-year supervisor. Defendant's Post-Trial Brief, at 29. It explains its failure to investigate the rumors of their law school attendance as follows: 27 The Company does not use Gestapo-type techniques to uncover these rulebreakers. It does not search people's belongings for law books and it does not conduct wholesale interrogations. 28 Id. It similarly accounts for its unwillingness to determine which male employee was referred to in Mr. Kramer's letter of April 7, 1977. See Finding of Fact 26. [T]he Company, the defendant says in its post-trial brief, at 55-56, hires high caliber individuals, respects them and treats them as professionals, and is not in the habit of conducting witch hunts. 29 30. There is some question as to whether this explanation, if it were an accurate description of Liberty Mutual's conduct, would be acceptable. It is not, however, an accurate description of Liberty Mutual's conduct. One individual was interrogated by Liberty Mutual: Ms. Sue Smith. Ms. Smith was an adjuster in the defendant's Houston office from November, 1974, to October, 1976. When plaintiff Chescheir was terminated, on August 27, 1976, see Finding of Fact 6, the defendant did not question Mr. Ballard about his law school attendance, despite the fact that it was rumored throughout the office that Mr. Ballard was going to law school. It did, however, question Ms. Smith. Within a week of plaintiff Chescheir's termination, Ms. Smith was questioned both by Ms. Carolyn Bailey, a supervisor in the Houston office, and by Mr. Wyatt Trainer, Claims Manager of the Houston office, as to whether she was in law school or intending to attend law school. The defendant gave no explanation for this activity. It did not even allege that it was rumored that Ms. Smith was attending law school. Ms. Smith, it appears, was suitable for questioning because she is a woman. 30 31. The defendant knew that two females, plaintiffs Chescheir and O'Connell, were attending law school in violation of the law school rule. It terminated their employment. It also knew that three males, Mr. McCarthy, Mr. White, and Mr. Ballard, were attending law school in violation of the law school rule. It did not terminate their employment. In fact, the defendant transferred Mr. White from Fort Worth to Houston to enable him to go to law school. Finally, despite the rumors of Mr. McCarthy's law school attendance, the rumors of Mr. Ballard's law school attendance, and the receipt of a letter from the EEOC indicating that a male adjuster at Liberty Mutual was attending law school, the defendant did not question a single male employee as to whether he was attending law school. It did, however, when it learned that one female adjuster, plaintiff Chescheir, was attending law school, immediately question another female adjuster, Ms. Sue Smith, as to whether she was attending law school or even contemplating attending law school. 31 32. The defendant applied its law school rule differently to male and female employees. It offered no justification for the disparate treatment. That being so, it discriminated on the basis of sex against both plaintiff O'Connell and plaintiff Chescheir in violation of 42 U.S.C. § 2000e-2(a)(1). 32 O'Connell v. Liberty Mutual Insurance Co., 499 F.Supp. 313, 314-20 (S.D.Tex.1980).