Peralta v. Cendant Corp.

Citations: 123 F. Supp. 2d 65; 2000 U.S. Dist. LEXIS 18167; 2000 WL 1709080Docket: 3:98cv1452 (JBA)

Court: District Court, D. Connecticut; September 29, 2000; Federal District Court

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Ramon Peralta filed a lawsuit against his former employer, Cendant Corporation, alleging race and gender discrimination under Title VII and various state law claims. Cendant moved for summary judgment on these claims. The court, presided over by District Judge Arterton, granted the motion in part and denied it in part. 

Peralta was hired on October 16, 1995, as a Production Artist, bringing over three years of relevant experience. He received commendations from colleagues and a positive performance review from his supervisor, Lauren Rachelson, highlighting his effective communication skills and efforts towards personal growth. 

In contrast, Marie Leddy, a Caucasian female, was hired as an Associate Production Manager seven months prior, receiving a favorable performance evaluation from her manager, Lenny Portanova, noting her thoroughness and positive attitude but suggesting improvement in follow-up on identified issues. 

During an interview for an Art Director position on May 24, 1996, Peralta was informed by Randi Klaber that he needed to first hold an Associate Art Director role. He mentioned he was due for a salary increase as part of his annual review, to which Klaber responded that they would offer a little more than what he expected. Peralta interpreted this as a promise of a raise.

On October 15, 1996, Klaber promoted Peralta to Associate Art Director within the Creative Group, expressing optimism about his design background aligning with the group's needs. However, Klaber later issued a written warning less than a year later, citing hesitation in promoting Peralta due to alleged inappropriate advances toward a female colleague, Mucci. Peralta pointed to Klaber's promotion of Marie Leddy to Comp Artist shortly before his promotion as evidence of gender bias, claiming Klaber had specially created the position for Leddy.

After his promotion, Peralta did not receive a raise beyond the standard increase and met with Klaber and her supervisor, Villano, to discuss this issue. Klaber denied promising him a raise, leading Peralta to feel misled about the nature of his promotion. He believed that Klaber would have granted a raise to a female employee in similar circumstances, perceiving this as discriminatory treatment. 

Peralta described Klaber's 'Girls' Club,' an informal group of female employees in the Creative Group, suggesting that he was treated less favorably due to his exclusion from this group. He highlighted being denied participation in an advanced Illustrator class, while two female colleagues were allowed to attend, and felt he was unofficially excluded from class notices distributed to others.

In a conflict with Mucci, who reacted negatively to his suggestions, Klaber reprimanded Peralta for his approach, criticizing him for not following instructions and implying that such behavior was detrimental to his career advancement. Klaber documented this incident in a memo to Human Resources, indicating her concerns about Peralta's behavior and foreseeing a troubling trend.

On May 5, 1997, Peralta applied for the Art Director position in the Creative Group. Three months later, he received a written warning from Klaber citing three infractions: inappropriate behavior, misuse of company resources for freelance work, and communication issues. The warning referenced a joke card Peralta created, which included a manipulated photo of a female co-worker. Klaber, who had not seen the card, acknowledged her lack of knowledge about its context. Peralta stated that creating such cards was a common practice among employees. 

The warning alluded to a sexual harassment charge filed against Peralta, but a review of the situation clarified that he was not the subject of the complaint. Instead, another employee, John Tatore, was being addressed for inappropriate conduct towards the female co-worker, who preferred to resolve the matter privately. Klaber's warning also required Peralta to remove any sexually oriented files from the server and his hard drive, despite her awareness of similar behavior by other female employees that went unpunished.

Klaber cited a prior incident involving Peralta and employee Mucci, which occurred outside of work and was consensual, to support claims of inappropriate behavior. Although both parties agreed to move on from the incident, Klaber used it as a basis for her warning. Peralta's communication skills were also criticized; he believed he had no issues in this area but agreed to improve.

Following the warning, Peralta was placed on probation for a month, with a follow-up meeting scheduled for September 11, 1997, to assess his progress. Klaber warned that any further performance issues could lead to termination. Concerned about the warning's implications, Peralta wrote a memo to Human Resources expressing his fears that Klaber was compiling unrelated incidents to justify his dismissal.

On October 16, 1997, Peralta had his first annual review in the Creative Group, during which he reapplied for the Art Director position. Klaber, his supervisor, acknowledged Peralta's marketing ideas and accomplishments but expressed ongoing concerns about his communication skills, preventing her from outlining a long-term career path for him. Despite recognizing Peralta's recent efforts to improve, Klaber discouraged another supervisor from promoting him, citing the warning he received and his ongoing issues. A month later, Klaber promoted Marie Leddy to the Art Director position over Peralta, despite Peralta believing he was more qualified and experienced; Leddy had held an entry-level position and lacked the requisite experience with Mac art programs as specified in the job posting. Klaber justified Leddy's promotion by stating that the decision was not based on a direct comparison and emphasized qualities like integrity and maturity over the listed requirements. Following this, Peralta met with HR representatives regarding the promotion decision, with Villano acknowledging that promoting Leddy without first making her an Associate Art Director may not have been prudent, but he chose to support Klaber. Peralta sent a memo to HR detailing his belief that the decision stemmed from favoritism with discriminatory intent. He expressed his desire to continue working at Cendant but found the situation challenging, proposing three potential resolutions: a salary increase with a transfer to an Art Director position in Marketing, a salary increase with a promotion in the Creative Department, or a full investigation into the promotion decision alongside six months of severance pay.

Peralta's second meeting with Klaber led to a suggestion to consult Human Resources, where he was offered a severance package. The following day, February 13, 1998, he received approval to take a week off to consider his options. Before leaving, he wrote a note stating "I quit," which he later discarded, maintaining hopes of returning to Cendant. He emailed Klaber to clarify that he had not quit and intended to return after his week off. However, advised by his attorney, he did not return by the company's deadline, believing he still had a job due to ongoing negotiations. On March 6, 1998, Peralta's attorney received a termination letter from Cendant's Vice President of Human Resources.

Under Federal Rule of Civil Procedure 56(c), summary judgment is appropriate only when no genuine issue of material fact exists. Courts must be cautious in discrimination cases, as intent is often a key issue, and discrimination rarely presents itself overtly. Courts should resolve ambiguities in favor of the non-moving party and distinguish between reasonable inferences of discrimination and mere speculation. 

Peralta alleges intentional discrimination based on sex and race in violation of Title VII of the Civil Rights Act of 1964, following the McDonnell Douglas burden-shifting framework. He must establish a prima facie case by showing he is a member of a protected class, qualified for his position, subjected to adverse action, and that circumstances suggest discrimination. If successful, a presumption of unlawful discrimination arises, shifting the burden to Cendant to provide a legitimate, non-discriminatory reason for its actions, which only requires production of evidence, not persuasive credibility assessments.

Cendant's burden of production requires it to provide an explanation for its employment decisions, while the burden of persuasion remains with Peralta. If Cendant offers a legitimate explanation, the presumption of discrimination is rebutted, allowing Peralta to demonstrate that this explanation is a pretext for discrimination. Although the presumption of discrimination is no longer in play, evidence from Peralta's prima facie case can still inform the assessment of Cendant's explanation. The Supreme Court's decision in Reeves permits the trier of fact to infer discrimination from the falsity of the employer's justification, meaning that a prima facie case combined with evidence of an employer's falsehood can lead to a finding of unlawful discrimination.

Peralta asserts claims of gender and race discrimination, identifying himself as a male in a predominantly female Creative Group and the only Hispanic employee in that group. He meets the prima facie case requirement as a member of a protected class. Regarding qualifications, Peralta contends he was qualified for the Art Director position, citing his Bachelor of Fine Arts degree and over five years of relevant experience, including two years at Cendant with a strong performance record. He claims to have faced adverse employment actions, specifically being passed over for promotion to Art Director in favor of Marie Leddy and being terminated after raising concerns about discrimination from Klaber. The record indicates that Peralta applied for the Art Director position both formally and informally, but ultimately did not receive it.

The evidence presented by the plaintiff indicates that he faced an adverse employment action due to the denial of a promotion. However, there is no evidence suggesting that Peralta was terminated from his position at Cendant. After taking a vacation week, he failed to return to work as agreed, despite Cendant extending his deadline multiple times and warning him that his absence would be interpreted as a resignation. Consequently, when Peralta did not report back by the final deadline of March 5, 1998, Cendant informed his attorney that he was considered to have resigned. The record lacks any evidence supporting a claim of discriminatory or retaliatory discharge, leading to the conclusion that summary judgment on these claims is appropriate.

Peralta's claim of gender discrimination regarding the failure to promote him to Art Director is based on the assertion that favoritism was shown towards women by Klaber, including the existence of a 'Girls' Club' and preferential treatment in training opportunities. He also alleges disproportionate disciplinary actions against him compared to female employees and highlights that Marie Leddy, a member of the 'Girls' Club,' was less qualified for the position. These factors, viewed in favor of Peralta, establish a prima facie case for gender discrimination.

In terms of racial discrimination, Peralta notes that he was the only Hispanic employee in his Creative group, and all his co-workers were Caucasian. To prove a discriminatory denial of promotion, he must demonstrate membership in a protected class, qualification for the promotion, denial of the promotion, and circumstances suggesting discrimination. It is acknowledged that Peralta fulfills the first and third criteria, as he is Hispanic and was denied the promotion to Art Director.

Peralta has established a prima facie case for discrimination by demonstrating that he was equally qualified for the Art Director position, yet a candidate outside the protected class was promoted instead. Cendant claims Peralta was not promoted due to perceived deficiencies in his design and communication skills. Specifically, Klaber stated she doubted Peralta's ability to effectively implement necessary design changes and noted issues with his listening skills, which reportedly discouraged team members from seeking his assistance. Under the McDonnell Douglas framework, Cendant has met its burden by providing a rationale for its decision. Consequently, it is Peralta's responsibility to present evidence that suggests Cendant's reasons are a pretext for unlawful gender discrimination. A factfinder’s skepticism about Cendant’s justifications, combined with the elements of the prima facie case, can indicate intentional discrimination. At the summary judgment phase, the court must assess whether a rational jury could conclude that Cendant's provided reason for not promoting Peralta was false, viewing the facts in Peralta's favor. The Second Circuit's decision in Chertkova v. Connecticut General Life Ins. Co. illustrates similar principles, where evidence suggested a gender bias in the termination of a female employee after a change in management, thereby allowing a jury to infer discrimination.

The Court found that the plaintiff provided adequate evidence through affidavits and deposition testimonies indicating her performance was satisfactory or superior. The dismissal of the plaintiff and another female employee for communication issues, while no male employees were terminated, supported the conclusion that the employer's justification for the firings could be deemed a pretext for gender discrimination. Additional factors included alleged threats during counseling sessions, the forced revision of the plaintiff's positive evaluation, the denial of her request to attend a communication course, and the supervisor's focus on personal matters rather than work-related discussions. Consequently, the court deemed the district court's summary judgment as improper.

In the current case involving Peralta, the defendant cited two reasons for not promoting him: inadequate design skills and communication problems. Although Klaber, his supervisor, claimed to have to micromanage his designs, she acknowledged that Peralta's final outputs were often commendable and received positive feedback from colleagues and clients. Klaber's review prior to her promotion decision included favorable comments on Peralta's accomplishments and innovative ideas, while the criticisms regarding his communication skills were notably absent in the design evaluation. Peralta's earlier performance review indicated he had "excellent communication skills." Furthermore, the documentation of his communication issues stemmed solely from Klaber, who Peralta accused of gender bias and of creating a negative feedback trail against him. Klaber admitted to documenting Peralta's performance to prepare for potential evaluation disputes, and the defendant lacked corroborating evidence from other employees regarding similar issues with Peralta.

Klaber's references to employee complaints about Peralta's communication skills lack specificity, with only vague mentions of feedback from Art Directors and Copywriters. Evidence suggests that Klaber may have favored female employees, creating a "Girls' Club" atmosphere, and promoting Marie Leddy to a newly created position despite Peralta's higher qualifications. While the evidence of gender motivation in the promotion decision is not overwhelmingly strong, it raises sufficient doubt about Klaber's justifications, allowing a jury to reasonably conclude that gender discrimination influenced the denial of the promotion to Peralta. Consequently, the motion for summary judgment on the gender discrimination claim is denied. Conversely, the court finds that there is no supporting evidence for Peralta's claim of racial discrimination in the promotion decision. Although he was the only Hispanic employee in a small Creative Group, this fact alone does not indicate discriminatory intent, and the small sample size of the group renders any statistical analysis inconclusive. Thus, summary judgment is granted for the racial discrimination claim.

Peralta has not provided sufficient evidence to support claims of racial prejudice or discrimination in his employment case. He has failed to demonstrate any incidents or actions indicating racial animus towards himself or colleagues, nor has he shown a pattern of being overlooked for promotions in favor of white employees. The single instance of being passed over for promotion by Klaber does not establish a causal link to discrimination, even if the promoted employee, Leddy, was deemed unqualified. The court emphasizes that, according to precedent, there can be cases where a prima facie case does not lead to a conclusion of discrimination despite evidence of pretext. Thus, the court finds that a reasonable jury would not conclude that Peralta faced racial discrimination, leading to a summary judgment favoring the defendant on this claim.

Regarding Peralta's claim for negligent infliction of emotional distress, he must demonstrate that the defendant's conduct posed an unreasonable risk of causing emotional distress that could lead to illness or bodily harm. While the precedent case of Parsons pertains specifically to termination, the court believes that its principles can apply more broadly. Peralta alleges that Klaber's actions, including establishing a detrimental record against him and threatening termination, along with treating him as an outsider and retaliating against him, constitute unreasonable conduct that could support his claim. However, the court does not need to determine whether Peralta was constructively discharged to decide on the viability of this claim.

The plaintiff claims emotional distress partly based on a severance package offered by the human resources department. He describes an intolerable work atmosphere following Leddy's promotion, leading him to consider quitting. The Connecticut Supreme Court in *Parsons* noted that wrongful termination alone does not constitute a claim for negligent infliction of emotional distress, reinforcing that merely firing an employee, even if wrongful, does not breach socially acceptable behavior. This standard was echoed in *Madani v. Kendall Ford, Inc.*, which dealt with intentional infliction of emotional distress, suggesting that the Connecticut court has raised the threshold for negligent infliction in employment cases. Other local courts have supported this view, emphasizing that an employer's conduct must exceed socially tolerable boundaries to warrant such claims. 

The court highlights that even if Klaber's actions were influenced by gender bias, this alone does not render the conduct unreasonable. The focus of the tort is on the employer's actions, not their motives. Despite this, the court rejects the defendant's motion for summary judgment regarding the plaintiff's negligent infliction claim, as the plaintiff asserts that Klaber falsified reviews to facilitate his termination. Prior cases in this jurisdiction have dismissed similar claims based on a narrow interpretation of *Parsons*, requiring unreasonable conduct specifically at the time of termination. However, the current court disagrees with this limitation, noting that the plaintiff found Klaber's conduct intolerable and considered quitting. Consequently, the court concludes that a reasonable jury could potentially find in the plaintiff's favor depending on how the evidence is presented at trial.

Final determination of the plaintiff's evidence sufficiency regarding his claim will occur at trial, where Klaber's conduct can be evaluated in context. For now, the motion is denied. The plaintiff's breach of implied contract claim is based on Cendant's "Equal Employment Opportunity. Harassment" policy and the written requirements for the Art Director role. He alleges that Klaber promised him a raise upon his hiring and indicated he needed to serve as Associate Art Director before being promoted, but ultimately promoted another candidate, Leddy. Under Connecticut law, employment contracts for indefinite terms are typically at-will. An implied contract requires a mutual agreement that cannot be formed by taking statements out of context; there must be a meeting of the minds. The anti-harassment policy cited by the plaintiff does not impose any contractual obligations on Cendant but mandates compliance with federal and state anti-discrimination laws. The policy's promises are not sufficient to create independent contractual obligations, as established in case law. Allowing breach of contract claims based on such policies could discourage employers from implementing and enforcing complaint procedures, potentially undermining federal policies. Additionally, the job description for the Art Director position does not create any contractual obligations for Cendant.

The art director job description fails to establish a contractual obligation between Cendant and Peralta, as it lacks language indicating such a commitment. The Court notes that the description outlines Cendant's needs for the position but does not contain promises or representations of obligation. Even if it could be construed as creating contractual duties, Peralta lacks standing to enforce it since he never held the Art Director position and does not claim to be a third-party beneficiary. Allegations regarding promises made by Klaber about a raise and the requirement to hold the Associate Art Director position do not constitute an enforceable contract, as Peralta’s interpretation of Klaber's vague statements does not demonstrate an actual agreement. The Court concludes that Klaber’s comments do not imply a breach of contract regarding promotion requirements. Consequently, Cendant has not assumed any contractual obligations through the job description, EEO policy, or Klaber’s statements, leading to the granting of summary judgment for Cendant. Additionally, Peralta's claim of an implied covenant of good faith and fair dealing is dismissed as it is contingent on the existence of contractual obligations, which the Court has found lacking. While Connecticut recognizes a good faith obligation in at-will employment, this is primarily applicable in cases of wrongful discharge related to public policy violations, which do not apply here.

Peralta failed to provide adequate evidence for a reasonable jury to conclude that his termination was discriminatory or retaliatory, nor did he assert any violation of significant policy. To pursue a breach of the implied covenant of good faith and fair dealing, a plaintiff must show that their termination breached an explicit statutory or constitutional provision or contravened public policy. Peralta's allegations against Klaber and Dickson regarding bad faith do not implicate important state public policy. Although his claim regarding denial of promotion based on gender remains viable, providing him with a statutory remedy, Connecticut courts typically do not allow contract claims when statutory remedies are available. The court granted summary judgment in favor of the defendant on Peralta's good faith and fair dealing claim.

Regarding promissory estoppel, two key elements must be established: the promisor must induce belief in certain facts, and the promisee must detrimentally change their position based on that belief. Peralta alleged reliance on Klaber's promise for a raise and the job description, but the court found no contractual obligation in these representations that would constitute a "clear and definite promise" inducing reliance. Additionally, while the anti-harassment policy promised an investigation, Peralta did not base his estoppel claim on its failure nor demonstrate detrimental reliance on the promise of an investigation.

Both documents in question are deemed statements of intention and do not create liability under promissory estoppel. However, Peralta's reliance on Klaber's statements regarding a raise and career advancement presents a more nuanced issue. Peralta asserted that he would not have assumed additional responsibilities if he had known the move would be lateral, interpreting Klaber's comment about needing to be an associate art director as a binding commitment. Although the specifics of the promised raise were vague, Klaber's suggestion that a larger raise would accompany a transfer to his group implied an inducement. Peralta's actions to exceed job requirements to facilitate this transfer and his aspirations to become Art Director are noted. The court cannot yet evaluate the validity of Klaber's statements or the reasonableness of Peralta's responses, leaving the potential for a claim under promissory estoppel open for trial. The court granted summary judgment in favor of the defendant regarding claims of discriminatory termination and several counts, but denied it concerning Peralta's gender discrimination claim and his claims for negligent infliction of emotional distress and promissory estoppel.