29 Fair Empl.prac.cas. 1259,30 Empl. Prac. Dec. P 33,028clyde Walker, Plaintiff-appellant, Cross-appellee, v. Ford Motor Company and Northgate Lincoln-mercury Dealer,inc., Defendants-appellees, Cross-appellants, 684 F.2d 1355 (11th Cir. 1982)

In this Title VII case, both Clyde Walker and Ford Motor Company appeal from a judgment entered for Walker after a bench trial. Walker contends that the trial court erred in not awarding him sufficient backpay and in not permitting him to recover compensatory and punitive damages; Ford asserts that the trial court improperly found that it violated Title VII. Finding no error below, we affirm.

Appellant Walker is a black man who in 1975 entered a minority dealer training program instituted by Ford and administered through participating local dealerships. During the 18-month training program trainees received a stipend of $1500 per month. Walker was assigned for his training to the Northgate Lincoln-Mercury dealership in Tampa, Florida. He began the program on October 27, 1975, and over the course of the next few months complained to Ford that Northgate management and employees repeatedly used offensive racial epithets, including referring to poorly repaired cars as "nigger-rigged" and referring to the salesman with the lowest sales volume as "the black ass." On one occasion the Northgate leasing manager called Walker a "dumb nigger";¹  another time, this same employee stated that one of the lease cars had been damaged by "niggers." On still another occasion, when a black man created a disturbance at the dealership, a salesman was instructed to call the police to "get this nigger out of here."

Walker was terminated from the training program on June 17, 1976, four days after a Northgate co-owner Parks incorrectly reported Walker absent from work and shortly after Walker had requested a transfer to another dealership because of the racial slurs used by Northgate personnel. Walker sought reinstatement from Ford, and when it refused, filed a complaint with the EEOC. After receiving his right-to-sue letter, Walker filed this action in federal district court, alleging that the termination violated Title VII. The district court found that the pervasive use of racial slurs at the Northgate dealership was an unlawful employment practice under 42 U.S.C. § 2000e-2(a) (1) and that the inaccurate attendance report which resulted in Walker's discharge was motivated by Walker's complaints about the racial epithets. Accordingly, the court found that Ford and Northgate were guilty of retaliatory discharge under 42 U.S.C. § 2000e-3(a). The court awarded Walker reinstatement in the training program, or alternatively backpay for the remainder of the training period missed by Walker after the discharge, and attorney's fees, but denied compensatory damages claimed by Walker and also denied punitive damages.

We first address the issues raised by Ford's cross-appeal. Ford makes two separate arguments concerning the trial court's finding that it violated Title VII. First, it claims that while a work atmosphere tainted by pervasive racially abusive language can be unlawful under § 2000e-2, the racial slurs used at the Northgate dealership were not sufficiently pervasive to rise to a violation of Title VII.

We disagree. As Ford correctly notes, "an employer violates Title VII simply by creating or condoning an environment at the workplace which significantly and adversely affects (the psychological well-being of) an employee because of his race or ethnicity, regardless of any other tangible job detriment to the employee." Henson v. City of Dundee, 682 F.2d 897 (11th Cir. 1982). See Rogers v. EEOC, 454 F.2d 234, 238 (5th Cir. 1971), cert. denied, 406 U.S. 957, 92 S. Ct. 2058, 32 L. Ed. 2d 343 (1972); Calcote v. Texas Education Foundation, Inc., 458 F. Supp. 231, 237 (W.D. Tex. 1976), aff'd, 578 F.2d 95 (5th Cir. 1978). Accord Johnson v. Bunny Bread Co., 646 F.2d 1250, 1257 (8th Cir. 1981); Cariddi v. Kansas Chiefs Football Club, 568 F.2d 87, 88 (8th Cir. 1978). Ford argues, however, that the racial slurs used by Northgate personnel were either common parlance of an automobile dealership (i.e., "nigger-rigged") or else were sporadic references and in most instances not aimed at Walker.

This court recognized in Henson that "the mere utterance of an ethnic or racial epithet which engenders offensive feelings in an employee 'does not rise to a Title VII violation.' For () harassment to state a claim under Title VII, it must be sufficiently pervasive so as to alter the conditions of employment and create an abusive working environment." Henson, 682 F.2d at 904. Here, however, the district court specifically found that Northgate personnel's use of the terms "nigger-rigged" and "black-ass," as well as other racially abusive language was "repeated," "continuous," and "prolonged" despite Walker's objections, and that the language made Walker feel unwanted and uncomfortable in his surroundings. These findings were findings of fact which must be upheld unless clearly erroneous. See id. at 907-07 (whether harassment is severe enough to seriously affect the psychological well-being of employees is a question to be determined with regard to the totality of the circumstances).

The findings were not clearly erroneous. Co-owner Karras admitted to repeatedly using the term "black ass." Although Parks claimed he had never heard the phrase "nigger-rigged" around the dealership, he admitted it was a common term in the car business. Both men asserted, however, that neither of these terms were intended to carry racial overtones. All other instances of opprobrious language alleged by Walker were confirmed by the record, and even Judson Powell, the manager of Ford's trainee program, tacitly admitted the conditions at the Northgate dealership by advising Walker that the racial slurs were "just something a black man would have to deal with in the South," and that Walker should not dwell on "trivialities" but concentrate on the broad goal of finishing the training program. Accordingly, we find no error in the court's conclusion that the work atmosphere at the Northgate dealership violated § 2000e-2.² 

Ford's next argument is that even if the trial court was correct in finding a § 2000e-2 violation, it erred in finding a retaliatory discharge under § 2000e-3. Ford contends that the trial court impermissibly shifted the burden of proof to Ford to show a legitimate non-discriminatory reason for the discharge contrary to the Supreme Court decision in Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 101 S. Ct. 1089, 67 L. Ed. 2d 207 (1981). Further, Ford asserts that no evidence of a retaliatory discharge existed to support the trial court's findings.

We find both these arguments without merit. As to the first, we agree with Ford that Burdine mandates that the plaintiff always bear the burden of persuasion on the ultimate fact of discrimination. We also agree that under the traditional three-step proof in Title VII cases,³  once a plaintiff carries his prima facie case, the employer must only articulate, not prove by a preponderance, a legitimate nondiscriminatory reason for the discharge. See Burdine, supra, 450 U.S. at 256, 101 S. Ct. at 1095; Jones v. Lumberjack Meats, Inc., 680 F.2d 98, 101 (11th Cir. 1982). We do not agree, however, that the court applied the incorrect burden of proof to Ford. Although the district court's findings did not clearly delineate the various steps in the proof of a Title VII claim, the transcript makes clear that the judge examined the pertinent facts and applied the proper burden of proof to the ultimate finding of discrimination.⁴  As the former Fifth Circuit has held, the absence of the labels "prima facie case" and "pretextual" in the trial court's findings is not fatal to the plaintiff's claim as long as the plaintiff proves under the correct allocation of the burden of proof the ultimate fact of intentional discrimination.⁵  E.g., Sessions v. Rusk State Hospital, 648 F.2d 1066, 1071 (5th Cir. 1981); Merriweather v. Hercules, Inc., 631 F.2d 1161, 1166 (5th Cir. 1980).

Ford's second claim is likewise meritless. The court found after reviewing all the evidence that "a significant motivation" for Walker's discharge was his complaints about the racial slurs at the Northgate dealership. This finding of ultimate fact can be overturned only if clearly erroneous. Pullman-Standard v. Swint, --- U.S. ----, 102 S. Ct. 1781, 1787-91, 72 L. Ed. 2d 66 (1982); Jones v. Lumberjack Meats, Inc., supra at 101. The trial court's finding was amply supported by the record. Walker's discharge resulted from co-owner Parks' report to Ford that Walker had been absent from work without excuse and Parks' request that Walker be removed from the Northgate training program. Parks had signed work reports for Walker indicating that the trainee had attended work on the disputed day, however, and the incorrect report and request for Walker's removal came shortly after Walker had asked Ford for a transfer because of the racial slurs at Northgate. Ford, moreover, offered Walker no viable explanation for his removal other than that he had "failed to live within the discipline of the dealership" and its proffered excuse at trial-Walker's alleged absenteeism-was rebutted by work reports introduced by Walker. Accordingly, we find no error in the trial court's conclusion that Ford was guilty of retaliatory discharge under 42 U.S.C. § 2000e-3.

We next turn to the claims raised by Walker concerning the backpay award. He first asserts that the trial court erred in awarding his backpay only from the time of dismissal to the end of the training program. The trial court based its denial of further backpay on the theory that because the training program had a fixed term of eighteen months and because the training agreement specifically relieved Ford of any obligation to employ Walker at the program's end,⁶  Walker was entitled only to backpay for the duration of the program. Walker contends that the evidence showed that Ford placed trainee graduates in dealerships or other management positions and therefore he is entitled to backpay until the time of reinstatement. Ford disputes Walker's characterization of the evidence and urges that the trial court's ruling was correct.

Although we find under separate analysis that Walker was not entitled to further backpay, we conclude that the trial court's reasoning was too superficial. The mere fact that the training agreement was for a fixed term did not automatically end Ford's liability. On the contrary, our cases have recognized that even employees hired for fixed terms may be entitled to backpay from the date of the adverse employment action until reinstatement. See, e.g., McLaurin v. Columbia Municipal Separate School District, 478 F.2d 348, 356 (5th Cir. 1973) (teachers employed under one-year contracts entitled to backpay from date of discharge to date of reinstatement); Sparks v. Griffin, 460 F.2d 433, 443 (5th Cir. 1972) (same).⁷  Nevertheless, our cases also hold that a Title VII plaintiff bears the initial burden of establishing the economic injury resulting from the adverse employment action. See Marks v. Prattco, 633 F.2d 1122, 1125 (5th Cir. 1981) (once plaintiff in Title VII case establishes prima facie case and damages resulting from discriminatory acts, burden of producing further evidence on damages to establish amount of earnings or lack of diligence in mitigation falls to defendant); Merriweather v. Hercules, Inc., 631 F.2d 1161, 1167 (5th Cir. 1980) (court should not award backpay unless wages are properly owed to employee, but if court determines an economic loss was sustained backpay should be awarded unless special circumstances are present); Pettway v. American Cast Iron Pipe Co., 494 F.2d 211, 259 (5th Cir. 1974), cert. denied, 439 U.S. 1115, 99 S. Ct. 1020, 59 L. Ed. 2d 74 (in class action discrimination suit employee carries initial burden of showing he is a class member and describing the harmful effect of discrimination on his employment). Accord Taylor v. Phillips Industries, Inc., 593 F.2d 783, 787 (7th Cir. 1979) ("Not until plaintiff establishes what she contends are her damages does the burden of going forward to rebut the damage claim ... fall on the defendant."). The essential question before us, therefore, is whether Walker has "established damages resulting from the discriminatory acts" of Ford for a period beyond the training program.

An employee's claim for backpay for a period beyond that set by the employment agreement raises issues of causation which have not been thoroughly analyzed by the courts. In cases involving employment terminable at will or otherwise of indefinite duration, courts in essence have presumed that once the plaintiff shows that discrimination resulted in economic injury, either through improper discharge or a failure to hire, the injury continues until reinstatement. See Merriweather v. Hercules, Inc., supra (once plaintiff proved injury due to discrimination plaintiff was entitled to backpay until date of reinstatement despite questions concerning plaintiff's health, since record did not show high rate of absenteeism); Mims v. Wilson, 514 F.2d 106, 110 (5th Cir. 1975) (plaintiff who proves he is victim of unlawful discrimination presumptively entitled to backpay until date of reinstatement). See also Edwards v. School Board, 658 F.2d 951, 954-55 (4th Cir. 1981) (Title VII plaintiff who proves intentional discrimination need not prove continuing property interest in job to recover backpay until reinstatement). This presumption is proper not only because the defendant's wrongful conduct prevents accurately reconstructing the plaintiff's work history but also because in the absence of evidence to the contrary, no reason exists to assume that employment for an indefinite term would not have lasted indefinitely.

The Fourth Circuit has held this presumption applicable even in cases which involve fixed terms of employment. Edwards v. School Board, supra. Unlike situations involving employment of indefinite duration where such a presumption is consistent with the facts of the case, however, applying a presumption of continued employment to fixed-term cases runs contrary to the evidence which, absent anything to the contrary, shows that the employment relationship would have ended as of a set date. Moreover, other courts have not always awarded backpay to the date of reinstatement in cases of fixed-term employment. In Welch v. University of Texas, 659 F.2d 531 (5th Cir. Unit A 1981),⁸  for example, a female research assistant sued under Title VII on a theory of constructive discharge and requested backpay. The district court found a Title VII violation, but awarded backpay only from the date of discharge to the date of expiration of the grant under which Welch had been hired. On appeal the former Fifth Circuit upheld the backpay award, noting that "it is simply a matter of speculation whether Welch would have been shifted to another grant after (the current grant expired)." Id. at 534. See also Geller v. Markham, 635 F.2d 1027, 1036 (2d Cir. 1980), cert. denied, 451 U.S. 945, 101 S. Ct. 2028, 68 L. Ed. 2d 332 (1981) (upholding trial court's refusal to grant reinstatement under theory that jury's damage award equal to one-year's salary amounted to finding that teacher subject to unlawful failure to hire under ADEA was deprived of only one year's employment). Although Welch initially appears inconsistent with the teacher-discharge cases cited earlier, a close review of these cases reveals a factual difference we perceive as critical: the teacher cases invariably included evidence that either the particular teacher's limited-term contract had been renewed in prior years or else that the school system involved typically had renewed teacher contracts. Putting this evidence in the perspective of our more general holdings on Title VII damages, this evidence fulfilled an initial burden concerning the plaintiff's economic loss by showing that absent discrimination a teacher reasonably could expect reemployment despite being hired under a fixed-term contract. Such evidence, in contrast, was lacking in Welch, which limited backpay to the proven economic injury-the loss of employment for the remainder of the grant term.

Generalizing these holdings to a broad rule of Title VII damages, we conclude that the proper allocation of proof in cases involving fixed-term contracts is that a plaintiff must initially introduce some evidence showing that the economic injury resulting from the discharge extended beyond the employment term. As in the teacher discharge cases, this proof may consist of no more than a showing that the particular plaintiff's contract had been renewed in the past, that contracts of similarly situated employees had been renewed, or that the employer had made a promise of continued employment. Once the plaintiff carries this burden, and thus in the words of Marks v. Prattco, supra, establishes the damages resulting from the discriminatory acts, then the burden shifts to the defendant to show by a preponderance of the evidence that the plaintiff would not have remained in employment beyond the contract term.⁹ 

Applying this test to the case before us, we conclude after examining the record that Walker failed to introduce any evidence that he would have continued employment with Ford at the end of the training program. The evidence showed that of 40 trainee graduates, only 11 obtained Ford dealerships, which are independent franchises granted by Ford and not "employment" with Ford. Ford officials did testify that Ford "made efforts" to find trainees management positions, but these efforts were directed at other dealerships, not at Ford itself. The record, moreover, is silent as to the success rate of these efforts. Accordingly, we find no error in the district court's denial of further backpay to Walker.¹⁰ 

We also reject Walker's argument that his last three months' pay¹¹  should not have been deducted from the backpay award because he was in Detroit seeking reinstatement. In Merriweather v. Hercules, Inc., 631 F.2d 1161 (5th Cir. 1980) the court held that "the amount which an employee would otherwise have been entitled to in the absence of the discrimination will be reduced by any earnings acquired during the interim period regardless of the type of work involved." This decision is controlling and is decisive.

Walker's final complaints concern the district court's denial of certain compensatory damages claimed by Walker¹²  and denial of punitive damages. Although the question whether compensatory and punitive damages may be awarded in Title VII actions has not yet been decided by any controlling precedent of this court,¹³  see Whiting v. Jackson State University, 616 F.2d 116, 122 n.4 (5th Cir. 1980), all other circuits but one which have addressed the issues have held that neither compensatory nor punitive damages are available in a Title VII suit. Padway v. Palches, 665 F.2d 965, 968 (9th Cir. 1982) (neither compensatory nor punitive damages are available); Farmer v. ARA Services, Inc., 660 F.2d 1096, 1107 (6th Cir. 1981) (compensatory damages not available); Shah v. Mount Zion Hospital & Medical Center, 642 F.2d 268, 272 (9th Cir. 1981) (neither punitive nor compensatory damages are available); Harrington v. Vidalia-Butler Board of Education, 585 F.2d 192, 194-96 (6th Cir. 1978), cert. denied, 441 U.S. 932, 99 S. Ct. 2053, 60 L. Ed. 2d 660 (1979) (compensatory damages not available); Richerson v. Jones, 551 F.2d 918, 926-28 (3d Cir. 1977) (punitive damages not available); Pearson v. Western Electric Co., 542 F.2d 1150, 1151-52 (10th Cir. 1976) (neither compensatory nor punitive damages available); Russell v. American Tobacco Co., 528 F.2d 357, 366 (4th Cir. 1975), cert. denied, 425 U.S. 935, 96 S. Ct. 1666, 48 L. Ed. 2d 176 (1976) (punitive damages not available); EEOC v. Detroit Edison Co., 515 F.2d 301, 308-10 (6th Cir. 1975) (punitive damages not available).¹⁴  The reasoning behind these decisions is three-fold. First, the language of the Title VII remedies provision, 42 U.S.C. § 2000e-5(g)¹⁵  limits relief to reinstatement with or without backpay and other equitable relief. Compensatory and punitive damages are legal not equitable remedies, and therefore have been held not authorized by the statute. Second, the courts have noted that the legislative history and language of § 2000e-5(g) suggest that this section is modeled on 29 U.S.C. § 160(c), the provision of the National Labor Relations Act which empowers the NLRB to remedy unfair labor practices, see Albemarle Paper Co. v. Moody, 422 U.S. 405, 419 & n.11, 95 S. Ct. 2362, 2372, 45 L. Ed. 2d 280 (1975), and that § 160(c) has been interpreted not to permit awards of compensatory and punitive damages. Harrington, supra, 585 F.2d at 196-97; Richerson, supra, 551 F.2d at 927; Pearson, supra, 542 F.2d 1152.

Perhaps the most persuasive rationale behind the damages ban, however, is the courts' observation that in 1968 Congress enacted the Fair Housing laws which specifically provided for both actual and punitive damages remedies, 42 U.S.C. § 3612, yet four years later when Congress amended § 2000e-5(g) it failed to include any provision for damages. As the Ninth Circuit has noted, "the very detailed provisions of § 2000e-5 almost compel the conclusion that Congress intentionally left out any provision for either general or punitive damages." Padway v. Palches, supra, 665 F.2d at 968.

We find the reasoning presented in these cases persuasive and adopt the rule that compensatory and punitive damages are unavailable in Title VII suits. We caution, however, that the compensatory damages ban does not include concomitants of employment such as fringe benefits, pension benefits, or other lost work benefits which at times have been referred to as "damages."¹⁶  As the former Fifth Circuit noted in Whiting v. Jackson State University, supra, 616 F.2d at 122 n.2, a district court order restoring such lost benefits is in the nature of an injunction and falls within the equitable relief provisions of § 2000e-5(g). Because none of Walker's claimed damages were benefits of work, however, we affirm the trial court's denial of Walker's compensatory and punitive damage claims.

AFFIRMED.