74 Fair empl.prac.cas. (Bna) 1377, 71 Empl. Prac. Dec. P 44,991, 97 Cal. Daily Op. Serv. 7195, 97 Daily Journal D.A.R. 11,671 Denise Cordova v. State Farm Insurance Companies State Farm International Services, Inc. State Farm Mutual Automobile Insurance Company State Farm Life Insurance Company State Farm Fire and Casualty Company

Citation: 124 F.3d 1145Docket: 96-15867

Court: Court of Appeals for the Ninth Circuit; September 8, 1997; Federal Appellate Court

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Denise Cordova, a Mexican-American former claims representative for State Farm, appeals a district court's summary judgment in her Title VII discrimination case, alleging she was denied a trainee agent position due to her national origin and sex. The Ninth Circuit reviews the summary judgment de novo, focusing on whether any genuine issues of material fact exist and if the district court applied the law correctly.

After five years with State Farm, Cordova applied for a trainee agent role, managed by John Raker. He selected four final candidates: Cordova, Brian LaBuff (Native American male), Terry Carmona (white female), and Art Davis (Asian male). Raker’s selection process aimed to include individuals from protected classes. He initially offered the position to LaBuff, who declined, and then to Carmona, who accepted, despite both lacking prior insurance experience. Raker informed Cordova she was the second candidate but later indicated she was actually third in qualifications.

Cordova's inquiry to Vice President Gallagher revealed the position was ultimately filled by a female single mother with a college background. She filed her Title VII action, arguing her insurance experience should have made her the top candidate. She provided evidence of potential discrimination, including Raker's alleged remark during her interview that they could not consider a white male, and an affidavit from Carmona mentioning Raker referring to a Hispanic agent derogatorily. Raker denied making such remarks, raising questions about the motivations behind the hiring decision.

State Farm initially offered a job to LaBuff due to his strong educational background and prior real estate sales success, viewing him as a candidate with strong marketing skills. Carmona, a single mother who demonstrated determination and intelligence, was Raker's second choice; she claimed she had adequate financial support for starting her own office. However, Cordova argued that the reasons for hiring LaBuff were pretextual, citing Raker's alleged derogatory remarks about Mexicans and stating that Carmona was never asked about financial support from her father. Cordova highlighted that 18 months post-hiring, State Farm implemented a policy hiring only current employees as agent trainees, which she alone met.

The district court granted summary judgment for State Farm, ruling that Cordova did not establish a prima facie case of discrimination as outlined in McDonnell Douglas Corp. v. Green. The court concluded that the evidence of discriminatory intent, particularly Raker's comment labeling Maldonado as a "dumb Mexican," was insufficient to infer unlawful discrimination.

To establish a prima facie case under Title VII, a plaintiff must demonstrate (1) belonging to a protected class, (2) applying for and being qualified for a job, (3) being rejected despite qualifications, and (4) the position remaining open with the employer seeking comparable candidates. The burden of proof is minimal, requiring little evidence to create a presumption of discrimination. Cordova successfully established a prima facie case, as she belongs to a protected class, was rejected for a qualified position, and the employer continued to seek applicants with similar qualifications.

The district court incorrectly relied on Hagans v. Clark to determine that Cordova failed to raise an inference of discrimination. It was clarified in Lowe v. City of Monrovia that Hagans does not suggest a plaintiff meeting the McDonnell Douglas test can still fail to establish a prima facie case. Instead, Hagans refers to the plaintiff's burden to present a case sufficient to counter a motion for dismissal. A plaintiff can establish a prima facie case of disparate treatment even without the McDonnell Douglas framework if there is evidence indicating that the employment decision was made based on discriminatory criteria, as established in International Brotherhood of Teamsters v. United States.

Cordova presented direct evidence of discriminatory intent through Raker's alleged comments, which included derogatory remarks about Maldonado's nationality. Such comments create a reasonable inference of discriminatory motive, contrasting with previous cases where remarks were deemed too ambiguous or unrelated to establish discrimination. Raker's comments are characterized as egregious insults, strong evidence of discriminatory intent based on national origin, and are not merely stray remarks. Furthermore, if Raker's comments were made, they could indicate discrimination against Cordova, given his role in the hiring decision. The timing of the remarks also suggests they are relevant to the hiring decision.

Ultimately, Cordova has established a prima facie case of discrimination by fulfilling the McDonnell Douglas test and by presenting both direct and circumstantial evidence of discriminatory intent. Thus, the district court erred in granting summary judgment based on the conclusion that Cordova failed to establish such a case.

State Farm's rejection of Cordova's application for a trainee agent position is under scrutiny for potential employment discrimination. Cordova established a prima facie case, prompting State Farm to provide a nondiscriminatory reason for its decision, which it claims was based on the educational and personal attributes of the candidates selected. Even assuming this rationale is legitimate, the burden shifts back to Cordova to demonstrate that the reason is a pretext for discrimination. She must present specific facts indicating either a discriminatory motive or the lack of credibility in State Farm's explanation. The inquiry is fundamentally factual, allowing Cordova to meet her burden with minimal evidence of discriminatory intent. 

Cordova has presented sufficient evidence to challenge the legitimacy of State Farm's rationale, including derogatory comments made by an employee, Raker, about minority hiring practices and specific statements regarding a selected candidate's financial resources that contradict evidence provided by that candidate. When viewing this evidence in Cordova's favor, there arises a genuine issue of material fact regarding whether State Farm's decision was discriminatory, warranting a denial of summary judgment.

The court has reversed and remanded the case for trial, addressing the employment status of agents as self-employed independent contractors who develop their own business equity. Cordova's qualifications for the trainee agent position are uncontested; she met the minimum requirements, scoring 'acceptable' on the personality test and 99% on the take-home exam, with over nine years in the insurance field, including five years at State Farm. Although Raker's alleged comments were reported by Carmona rather than Cordova, this does not diminish the credibility of Cordova's claims. State Farm's contention that Carmona is biased, having previously sued the company, pertains to the credibility of her testimony, which is for the jury to evaluate. Additionally, Cordova's lack of evidence regarding discrimination based on sex does not bar her from pursuing her national origin claim.