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SHAW v. TITAN CORPORATION, ET AL.


SHAW v. TITAN
CORPORATION, ET AL.


April 17, 1998
Record No. 971921

DONALD P. SHAW

v.

TITAN CORPORATION, ET AL.

OPINION BY JUSTICE BARBARA MILANO KEENAN

PRESENT: All the Justices


UPON QUESTIONS OF LAW CERTIFIED BY THE UNITED

STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT


Under the provisions of Rule 5:42, the United States Court of
Appeals for the Fourth Circuit certified to this Court two
questions of Virginia law. The first question concerns the
adequacy of jury instructions given on the issue of causation in
a common law action for wrongful termination of employment. The
second question involves the availability of punitive damages in
such an action. The facts as stated in the certification order
are set forth below.

Donald P. Shaw, a Caucasian male, was employed by Titan
Corporation (Titan), a "government contracting" firm,
from 1987 until March 1994, when Titan terminated Shaw’s
employment. Shaw was 62 years old at the time of his discharge.

Early in 1994, Titan concluded that it would have to reduce
its workforce to remain profitable. To accomplish this
"reduction-in-force" (RIF), Titan created a committee
(the Committee) that established criteria to evaluate Titan’s
employees for the purpose of identifying which employees should
be discharged.

During its evaluation process, the Committee considered
Titan’s status under prior "conciliation agreements"
with the Office of Federal Contract Compliance and Programs
(OFCCP), which had determined that Titan had a significant
"under-representation" of women and minority employees.
Some Committee members expressed concern that a disproportionate
number of women and minority employees were being
"targeted" for discharge in the pending workforce
reduction. Albert E. Knauf, Jr., president of Titan’s eastern
division, asked a Committee member "if the mix changed, what
the impact of that change would be. For example, if we had
another white male in the mix, what would be the numbers or our
representation?" Later, a company memorandum analyzed the
impact of "identify[ing] a ‘sacrificial lamb’"
Caucasian male, and concluded that "our representation [of
women and minority employees] is so low that we still have a
disparity. . . . [W]e are ‘damned if we do and
damned if we don’t.’"

In March 1994, Richard Leadbetter, Shaw’s supervisor, informed
Shaw that his employment would be terminated the next day. When
Shaw asked why he was being discharged, Leadbetter responded that
the RIF process had failed to perform properly. John Eddlemon, an
officer of Titan, terminated Shaw’s employment the following day
and offered Shaw "a world class corporate apology for the
way that [the termination] was handled in your case."
Eddlemon also told Shaw that "the company is really
vulnerable. . . . [W]e are letting go 10 to 1
women and minorities and we have to have an ace to throw on the
pile." Another Titan employee was told that Titan chose Shaw
as the "ace on the pile" because of Shaw’s age.

In April 1995, Shaw filed a motion for judgment against Titan
and Eddlemon (Titan) in the Circuit Court of Fairfax County
alleging that Titan wrongfully terminated Shaw’s employment. Shaw
alleged that he was terminated from his employment because of his
race, gender, and age in violation of the public policy embodied
in the Virginia Human Rights Act, Code ?? 2.10-714 through
-725. Titan removed the case to the United States District Court
for the Eastern District of Virginia based on diversity of
citizenship, and the case was tried before a jury. At trial,
Titan maintained that Shaw’s employment was terminated lawfully
based on the RIF.

In the course of the proceeding, Titan requested that the jury
be given the following instructions:

DEFENDANT’S REQUESTED INSTRUCTION NO. 17

If you find that Titan discriminated against plaintiff because
of his age, sex, and/or race, you must nonetheless return a
verdict for Titan on plaintiff’s wrongful discharge claim unless
you find that such discrimination was the only reason Titan
selected plaintiff for discharge. In other words, if you find
that Titan terminated plaintiff only because of his age, his sex,
or his race, you must return a verdict for the plaintiff.
However, if you find that Titan’s reasons for discharging
plaintiff included a legitimate, nondiscriminatory reason, you
must return a verdict for Titan.

DEFENDANT’S REQUESTED INSTRUCTION NO. 18

If you find that Titan discriminated against plaintiff because
of his age, sex, and/or race, you must nonetheless return a
verdict for Titan on plaintiff’s wrongful discharge claim unless
you find that such discrimination was the determining factor in
Titan’s selection of plaintiff for discharge. In other words, if
you find that Titan would not have terminated plaintiff but for
his age, his sex, or his race, you must return a verdict for the
plaintiff. However, if you find that Titan’s reasons for
discharging plaintiff included a legitimate, nondiscriminatory
reason, you must return a verdict for Titan.

The district court refused the above instructions and charged
the jury as follows:

Titan claims that Mr. Shaw was fired because it determined
that there wasn’t sufficient work for which Mr. Shaw was the
appropriate employee and that Mr. Shaw was, for that reason,
included in the reduction in force. It is not illegal to include
an employee in a reduction in force for that reason.

Merely firing an employee or including an employee in a
reduction in force for non-discriminatory reasons is not against
the public policy of Virginia

. . . .

The question before you is what motivated the termination of
Mr. Shaw’s employment or his inclusion in the reduction in force.

If you find by a preponderance of the evidence that Titan
intentionally terminated Mr. Shaw’s employment or included him in
the reduction in force because of his race, because of his
gender, because of his age, or because [of] any combination of
those factors, then you shall return your verdict in favor of Mr.
Shaw

. . . .

If, on the other hand, you do not find by a preponderance of
the evidence that Titan intentionally terminated Mr. Shaw’s
employment because of his race, because of his gender, because of
his age, or because of a combination of those factors, then you
shall return your verdict in favor of Titan.

The jury returned a verdict in favor of Shaw, awarding $65,000
in compensatory damages and $400,000 in punitive damages.[1]

After the verdict, Titan filed a "motion for judgment as
a matter of law" and a motion for a new trial, under Rules
50(b) and 59 of the Federal Rules of Civil Procedure. Titan
argued that because it had produced evidence that Shaw’s
employment was terminated as a result of the RIF, the district
court erred in refusing to instruct the jury in accordance with
Defendant’s Requested Instruction Nos. 17 and 18. Titan also
asserted that the public policy of Virginia does not permit the
award of punitive damages in actions for wrongful termination of
employment. The district court denied these post-trial motions
and Titan appealed the judgment to the United States Court of
Appeals for the Fourth Circuit.

Following Titan’s appeal, the certifying court presented the
following questions to this Court:

1. Whether, under the common law of Virginia, the district
court erred in refusing to give the jury an explicit but-for
causation, sole-cause, or mixed-motive instruction, and instead
instructing the jury that it could find for Shaw on his claim of
wrongful termination in violation of public policy if Shaw proved
by a preponderance of the evidence, "that Titan terminated
him because of his race, his gender, his age, or because of a
combination of those factors."

2. Whether, under the common law of Virginia, punitive damages
may be recovered for wrongful termination in violation of public
policy, where the public policy violated is embodied in the
Virginia Human Rights Act which expressly prohibits the award of
punitive damages.

Titan argues before this Court that since Shaw’s action
sounded in tort, the district court was required to give the jury
an explicit instruction under either a "but-for"
causation standard or a "sole" causation standard.
Titan also asserts that the district court erred in permitting
Shaw to recover punitive damages because the Virginia Human
Rights Act presently prohibits awards of punitive damages in
actions brought under its provisions, and no other Virginia
statute specifically authorizes the recovery of such damages in
wrongful termination actions. We disagree with Titan’s arguments.

The first certified question effectively asks whether, as a
matter of law, the district court was required to give the jury
explicit instructions addressing a "sole" causation
standard, a "but-for" causation standard, or a
"mixed motive" causation standard. We conclude that the
district court did not err in failing to give such instructions.

As stated above, the district court told the jury it was
required to find in favor of Shaw if he proved by a preponderance
of the evidence that Titan intentionally terminated his
employment because of his race, gender, age, or a combination of
these factors. However, the court also instructed the jury that
if Titan fired Shaw for non-discriminatory reasons, even if Titan
used a flawed process or made a wrong decision, the jury was
required to return a verdict in favor of Titan. These
instructions, considered in the context of all the instructions
in the record before us, fully and fairly stated the common law
of Virginia in effect on the date Shaw’s cause of action accrued.

In Bowman v. State Bank of Keysville, 229 Va. 534,
539-40, 331 S.E.2d 797, 800-01 (1985), we recognized a common law
cause of action in tort for wrongful termination of employment
under an exception to the common-law doctrine of
employment-at-will. This exception applies to terminations from
employment which violate the public policy of this Commonwealth. Bradick
v. Grumman Data Sys. Corp.
, 254 Va. 156, 159, 486 S.E.2d 545,
546 (1997); see Bailey v. Scott-Gallaher, Inc., 253
Va. 121, 125, 480 S.E.2d 502, 504 (1997); Lawrence Chrysler
Plymouth Corp. v. Brooks
, 251 Va. 94, 98-99, 465 S.E.2d 806,
809 (1996); Miller v. SEVAMP, Inc., 234 Va. 462, 468, 362
S.E.2d 915, 918 (1987).

We have held that this exception to the employment-at-will
doctrine is applicable, among other instances, when an employee
is terminated from employment "because of
discrimination based upon gender or race." Lockhart v.
Commonwealth Educ. Systems Corp.
, 247 Va. 98, 106, 439 S.E.2d
328, 332 (1994)(emphasis supplied); see Bailey, 253
Va. at 126-27, 480 S.E.2d at 505; Lawrence, 251 Va. at 98,
465 S.E.2d at 809. Using equivalent language, we also have held
that based on the exception recognized in Bowman, the
common law of Virginia provides an employee a remedy for wrongful
termination from employment when "the employee is discharged
on account of his disability or the employer’s perception
of his disability." Bradick, 254 Va. at 160-61, 486
S.E.2d at 547 (emphasis supplied).

These holdings require a plaintiff who asserts a cause of
action for wrongful termination under Bowman to prove that
the discharge occurred because of factors that violate Virginia’s
public policy. A plaintiff is not required to prove that the
employer’s improper motive was the sole cause of the wrongful
termination.

In asserting a contrary position, Titan mistakenly relies on Bailey
v. Scott-Gallaher, Inc.
, 253 Va. 121, 480 S.E.2d 502 and Jordan
v. Clay’s Rest Home, Inc.
, 253 Va. 185, 483 S.E.2d 203
(1997). In Bailey, our inquiry was limited to determining
whether an employee stated a cause of action for wrongful
termination based on allegations of gender discrimination. We
stated that the employee’s allegations, if true, "would
support a reasonable inference by the finder of fact that [the
employer] terminated [the employee] solely because of her status
as a working mother." 253 Va. at 126-27, 480 S.E.2d at 505.

Since the issue before us in Bailey was whether the
trial court properly sustained the defendant’s demurrer, our
conclusion addressed only the content of the employee’s pleadings
and did not establish a requirement that an employee prove that a
discriminatory motive was the sole cause of the termination. We
also stated in Bailey that the employee’s allegations, if
proved, "could support a jury finding that [the employee] was discriminated against because of her gender." 253
Va. at 126, 480 S.E.2d at 505 (emphasis supplied). This language
reiterates the standard of causation set forth in Lockhart.
See 247 Va. at 106, 439 S.E.2d at 332.

Our decision in Jordan also fails to support Titan’s
position. There, in deciding whether a plaintiff presented prima
facie evidence to establish that she was fired "solely"
because she intended to file a workers’ compensation claim, our
determination was governed by the language of Code
? 65.2-308. 253 Va. at 193, 483 S.E.2d at 207. This statute
specifically forbids an employer from discharging an employee
"solely because the employee intends to file or has
filed" a workers’ compensation claim. Code
? 65.2-308(A).

The language in Jordan cited by Titan is inapplicable
here because that discussion pertains to the statutory cause of
action under Code ? 65.2-308, not to a common law claim of
wrongful termination. Thus, we conclude that the district court
did not err in refusing to give the jury an explicit
"sole-cause" instruction.

Titan also contends that the district court erred in refusing
to instruct the jury under the "but-for" analysis set
forth in Wells v. Whitaker, 207 Va. 616, 151 S.E.2d 422
(1966). We stated in Wells that, "[g]enerally a
person is not liable to another [in tort] unless but for his
. . . act the harm would not have occurred." 207
Va. at 622, 151 S.E.2d at 428.

We first observe that Titan failed to offer a jury instruction
that properly stated a proximate causation standard under the
"but for" language of Wells. Titan’s requested
Instruction No. 18 improperly required the jury to return a
verdict for Titan if the jury found that "Titan’s reasons
for discharging [Shaw] included a legitimate, non-discriminatory
reason." This directive was an incorrect statement of
Virginia law, because that language would have required Shaw to
prove that he was fired solely because of a discriminatory
reason.

We also conclude that the district court’s instructions in the
present case incorporated Virginia’s common law standard of
proximate causation by requiring Shaw to prove that he was
discharged because of his race, gender, age, or any combination
of these factors, rather than because of any non-discriminatory
reasons. Thus, we conclude that the common law of Virginia did
not require the district court to give the jury an explicit
instruction setting forth the "but for" language of Wells.

We also note that the common law of Virginia has not presently
adopted the "mixed motive" causation standard
applicable to claims for wrongful termination of employment
brought under the Civil Rights Act of 1964 ?? 701 et
seq.
, 42 U.S.C. ?? 2000e et seq. (1994).
Further, Titan did not argue that Shaw’s discharge was based on a
"mixed motive." Therefore, we conclude that the
district court did not err in failing to give the jury an
explicit instruction on this principle. [2] For these reasons, we answer
the first certified question in the negative.

We next consider the question whether the common law of
Virginia permitted Shaw to recover punitive damages from Titan
for the wrongful termination of his employment. Initially, we
note that Shaw was terminated from his employment and filed this
action against Titan before the 1995 amendments to the Virginia
Human Rights Act became effective. Thus, when Shaw’s cause of
action against Titan arose, the Virginia Human Rights Act did not
contain any language limiting a plaintiff’s right to recover
punitive damages in an action for wrongful termination of
employment.[3]

Titan argues, nevertheless, that Shaw was not entitled to
recover punitive damages because neither the Virginia Human
Rights Act nor any other Virginia statute specifically authorized
the recovery of such damages at the time Shaw was discharged and
filed this action. We find no merit in this argument because the
cause of action for wrongful termination of employment asserted
by Shaw derives solely from the common law. Bowman, 229
Va. at 539-40, 331 S.E.2d at 800-01; see Bradick,
254 Va. at 159, 486 S.E.2d at 546; Bailey, 253 Va. at 125,
480 S.E.2d at 504; Lockhart, 247 Va. at 105, 439 S.E.2d at
331.

As we stated in Bowman, the common law cause of action
for wrongful termination of employment sounds in tort. 229 Va. at
540, 331 S.E.2d at 801; see Bailey, 253 Va. at 125,
480 S.E.2d at 504; Lockhart, 247 Va. at 105, 439 S.E.2d at
331-32. Titan conceded in the district court that this cause of
action is an intentional tort. When a plaintiff pleads and proves
an intentional tort under the common law of Virginia, the trier
of fact may award punitive damages. Foreign Mission Bd. v.
Wade
, 242 Va. 234, 241, 409 S.E.2d 144, 148 (1991); see
Kamlar Corp. v. Haley, 224 Va. 699, 706-07, 299 S.E.2d
514, 518 (1983). Thus, we conclude that, under Virginia law, Shaw
was entitled to recover punitive damages in the present action,
and we answer the second certified question in the affirmative.

First Certified Question Answered in the Negative.

Second Certified Question Answered in the Affirmative.

 

 

 

 

FOOTNOTES:

[1] The district court later
reduced the punitive damages award to $350,000 to comply with
Virginia’s statutory limit on recovery of punitive damages. See
Code ? 8.01?38.1.

[2] In light of the conclusion we
reach here, we need not consider whether Virginia would adopt the
"mixed motive" causation standard applicable to Title
VII claims.

[3]
Since the 1995 and 1997 amendments to the Virginia Human Rights
Act became effective after this cause of action arose, we express
no opinion on whether a plaintiff may recover punitive damages in
any action for wrongful termination of employment asserted after
the effective date of these amendments.

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