53 Fair empl.prac.cas. 59, 53 Empl. Prac. Dec. P 40,006 Claude Rodriguez, Leroy E. Gibbs v. General Motors Corporation H.R.M. Committee David Harriet Marlin Hess Kenneth Bridges K.C. Beck Dennis Heinemann Richard Conrad Robert Weatherly

Citation: 904 F.2d 531Docket: 88-6150

Court: Court of Appeals for the Ninth Circuit; June 6, 1990; Federal Appellate Court

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Leroy E. Gibbs filed a civil rights lawsuit against General Motors Corporation and several individuals under 42 U.S.C. Sec. 1981, alleging racial discrimination in employment practices. The district court granted summary judgment in favor of GM, ruling that most of Gibbs' claims were barred by a one-year statute of limitations, with only one claim remaining regarding his denial of a promotion to general supervisor of maintenance. The court concluded that Gibbs failed to provide sufficient evidence to rebut GM's assertion that a white employee, Bob Potter, was more qualified for the position. Gibbs appealed, arguing that he met the prima facie requirements for discrimination, including being a member of a protected class and being qualified for the position he sought. The Ninth Circuit found that Gibbs had presented enough evidence to necessitate a jury's determination on whether the position was open at the time of his application, as there was conflicting testimony regarding this issue. The appellate court reversed the summary judgment and remanded the case for further proceedings.

Once a prima facie case is established, the employer must provide a legitimate reason for its employment decision, which involves producing evidence rather than merely articulating an argument. In the case at hand, General Motors (GM) asserts it provided three legitimate, non-discriminatory reasons for not promoting Gibbs: (1) the position was filled, as testified by Dennis Heinemann; (2) a consensus among the group favored Bob Potter as the best-qualified candidate, supported by James Edgar Clark's testimony; and (3) Heinemann's claim that Potter would better collaborate with the production department. However, these reasons are disputed; Gibbs contends he believed the position was still open and that his qualifications exceeded Potter's.

The testimony regarding the reasons is inconsistent, particularly concerning whether Gibbs applied for the position and the validity of the consensus. The court emphasizes that it is for the jury to resolve these conflicts, as Gibbs has not been given a fair chance to challenge the reasons provided by GM. While Gibbs must present specific, probative evidence to counter the employer's claims, he highlights discrepancies among the reasons, which could undermine their credibility. The jury must ultimately decide if these divergences affect the legitimacy of GM's explanations, and Gibbs should have the opportunity to test their credibility in court.

The district court determined that Gibbs had not suffered damage from being denied a lateral transfer, failing to consider his deposition testimony indicating he had been effectively demoted to a level 6 position in 1980 and was seeking a level 7 job to escape his current role. The court's ruling did not assess Gibbs’ credibility, which raised a factual question regarding whether the transfer was merely lateral or represented a new opportunity. At the time of the court's decision, the Supreme Court had not yet ruled on Patterson v. McLean Credit Union, which later held that racial harassment is not actionable under Section 1981 but affirmed that claims of denied promotions leading to a new employer-employee relationship are actionable. The court provided examples of actionable promotions, contrasting substantial changes in job status with minor title changes that do not alter responsibilities. The ambiguity regarding the nature of the promotion in Patterson indicates that not all actionable claims require a significant status leap. Since the district court did not address the implications of Patterson, both parties should have the chance to present their arguments on this issue, potentially leading to a resolution through summary judgment or a jury trial if Gibbs' evidence supports his claim of a substantial opportunity.

The district court incorrectly applied the California statute of limitations to Gibbs' allegations, treating incidents before July 15, 1984 as barred. The applicable statute of limitations for Section 1981 actions is California Civil Procedure Section 338(1), which is three years. Established precedent confirms that this limitations period should not be applied retroactively. Consequently, only claims arising before July 15, 1982 are barred. However, the error regarding the limitations period is deemed harmless because the incidents cited were racial harassment, which are not actionable under Patterson. The district court appropriately considered these time-barred incidents as relevant background for Gibbs' actionable claim, allowing them to be presented to a jury if the case proceeds. The potential for a substantial demotion to be considered actionable under Section 1981 remains an open question, but Gibbs' claim is barred by the three-year statute of limitations. Therefore, the district court did not abuse its discretion in denying Gibbs' motion to compel evidence related to this claim. The decision is reversed and remanded.