Channon v. United Parcel Service, Inc.

629 N.W.2d 835

Linda Rae CHANNON, Appellant, v. UNITED PARCEL SERVICE, INC., Appellee, and Major Warner and John Douglas, Defendants.

No. 99-0055.

Supreme Court of Iowa.

July 5, 2001.

Roxanne Barton Conlin and Tiffany B. Klosener of Roxanne Conlin & Associates, P.C., Des Moines, for appellant.

Kasey W. Kincaid of Faegre & Benson, L.L.P., Des Moines, for appellee.

LAVORATO, Chief Justice.

Linda Rae Channon appeals from a district court's posttrial ruling that imposed caps pursuant to 42 U.S.C. § 1981a on compensatory and punitive damages a jury awarded her against her employer United Parcel Service, Inc. (UPS) on her Title VII claims for sex discrimination and retaliation. UPS cross-appeals, contending the district court erred in not granting its motions for judgment notwithstanding the verdict and new trial on those claims and on Channon's federal equal pay claim based on insufficiency of the evidence. UPS also contends the district court should have awarded it a new trial because the court improperly admitted evidence of alleged acts of harassment. Finally, UPS contends the court should have awarded it a new trial because the discrimination and the retaliation compensatory damages award was not supported by the evidence and was excessive.

We affirm in part and reverse in part on the appeal and affirm on the cross-appeal. We remand with directions.

I. Background Facts and Proceedings.

Following a jury trial on Channon's federal claims, the district court made findings of fact based on the same record as to Channon's claims under the Iowa Civil Rights Act (ICRA). See generally Iowa Code Ch. 216 (1997). The state claims mirror the federal sex discrimination and retaliation claims. Because the district court's findings are supported by the record, we borrow extensively from them.

UPS is a multinational air and ground package delivery company. Its domestic operation is geographically divided into regions. Each region is divided into districts. Essentially, each state is a district (Iowa is the Iowa district). Districts are divided into divisions.

At the time of these proceedings, UPS was not a publicly owned corporation. Its employees owned all of the company's stock. Middle management compensation is determined, in part, by the number of units of UPS stock such management holds. Full-time supervisors are "one-unit managers." Managers are "two-unit managers." Staff-level managers like the district human resources manager, industrial engineering manager, and division managers are "three-unit managers." The district manager is also a three-unit manager. The district manager is the chief executive of the district. The district manager reports to a regional manager, who in turn reports to the officers of the company and its board of directors.

The package delivery industry is highly competitive. UPS employees make good money. Drivers can make $50,000 per year. Two-unit managers make about $80,000 per year. UPS employees work hard and are under pressure created by the need for on-time delivery. On the one hand, management-level employees compete with one another for positions within the company. On the other, they think of themselves as "partners" working together with an eye toward the bottom line.

The package delivery industry in general, and UPS in particular, is a traditionally male-oriented business. At UPS, managers work their way up through the ranks. UPS managers come out of the male-dominated truck driving field. District managers determine promotional opportunities subjectively, following "people meetings" with staff-level managers.

UPS does not (1) provide job descriptions for management-level positions, (2) post vacancies, or (3) publish salary ranges. Employees do not apply for positions or promotions. Rather, people are chosen for advancement. The Iowa district manager keeps a "mental list" of employees, he thinks might match up well to certain positions. There is much lateral movement within the company. Because management employees are "partners," they usually go where UPS sends them.

At times material to this proceeding, most of the UPS senior managers were men. No women were members of the board of directors until 1996 when UPS created an appointment for an outside female director. Mike Clark was the district manager for the Iowa district. Clark had shown bias against women in management in the Iowa district, which bias UPS seems to have tolerated.

Channon began her employment with UPS in 1974 as a part-time preloader. The company promoted her to part-time supervisor in November 1978. Terry Plagman became Channon's manager on the preload in 1983. He encouraged her to "go driving" as a prerequisite for promotion to full-time management.

In 1985, Channon took a position as a package truck delivery driver. In June 1985, the company promoted Channon to full-time supervisor on the Des Moines preload.

Plagman left the Des Moines center in 1985. In 1986, Doug Wiley became the preload manager. Wiley and Channon made the Des Moines preload the top operation in the region. Wiley described Channon as the best boxline operator in the region.

The company promoted Channon to preload manager in January 1988, after Wiley left. She operated the preload successfully without any full-time supervisors and achieved 100% production, the highest ever in the Des Moines preload.

In January 1989, Iowa district manager Emil Kuzman transferred Channon into industrial engineering (IE) for cross-training. Dan Gannon took over the preload. The company assigned Gannon one additional full-time supervisor and four or five additional part-time supervisors. Kuzman treated Channon fairly, recognized her talent, and groomed her for the division manager position. In 1991, Channon became a section leader in IE with multiple responsibilities in the package delivery division. Her section led the nation in industrial engineering operations.

In May 1993, Todd Galloway became the acting division manager. Clark became the Iowa district manager in September 1993, at which time Channon was still in IE as a section leader. In his testimony, Clark described Channon's position as the "office manager."

At the request of Galloway and Jeff Cox (the IE manager), Channon returned to manage the preload for peak-season 1993. She assumed her duties in this position on November 1, 1993.

On November 12, 1993, UPS driver Rich Olson accosted supervisor Randy Newman about supervisors doing union work. Olson paged Channon on the intercom. When Channon came on the boxline, she heard Olson shouting and screaming at Newman. She tried to intervene and calm the two down. Olson, however, was out of control. Olson turned on Channon, trapped her against the moving boxline, bumped his chest against her repeatedly, and poked her in the breast twice. Olson's actions put Channon in physical danger from the moving boxline and frightened, humiliated, and angered her. Galloway talked to Olson while Channon was in the restroom crying. When Channon returned, she told Galloway and Olson that Olson's conduct was completely unacceptable.

Galloway sent Olson on his delivery route. When Olson returned, human resources district manager Major Warner terminated Olson's employment for using the intercom without permission and insubordination.

Olson filed a union grievance. Clark upheld the termination decision at the local level. Galloway told Channon not to "get weepy" about Olson's attack. He also told her not to miss work because it would harm the company's case against Olson if she were seen as "weak."

At this point, Channon sought psychological counseling through UPS's employee assistance program, "Solutions." The company sent Channon to Victoria Bruner, M.S.W., who began counseling Channon on November 18, for the aftermath of Olson's attack. Brunner continued to counsel Channon throughout the remainder of Channon's employment with UPS.

Pursuant to the union contract, Olson appealed his termination to a panel of three union and three management employees. John Douglas, John Rehling, and Jim Rottinghaus represented the company on the panel.

The panel heard the appeal on November 29. The panel reinstated Olson without back pay. Douglas and Rehling voted to return Olson to duty because Olson said he shook Channon's hand and apologized after the incident. The company did not allow Channon to rebut Olson's statement concerning the alleged apology. The panel did not require Olson to stay away from Channon as a condition of returning to work.

Olson returned to work on December 20. Galloway told Olson to keep his contact with Channon "professional," but did not tell him to stay away from her. After his return, Olson and some of his fellow employees stared at Channon, followed her around the building, and generally tried to intimidate her.

Clark did not return Channon to IE after peak-season in November and December. Instead, he promoted Dan Hedberg, a one-unit supervisor, into that position. UPS gave Channon no explanation for Hedberg's promotion or for leaving her on the preload with continual exposure to Olson.

In January 1994, John Douglas became the Des Moines preload division manager. Immediately upon his arrival, Douglas began criticizing Channon. Douglas testified he was not requiring any more of Channon then he was requiring of his male managers. UPS documents indicate otherwise. Douglas gave the male managers elements, evaluations, and prorated MARS. Douglas gave Channon none of these.

In late January, Channon was paged to the West Center Office. When she arrived no one was there. When she turned to leave, Olson was blocking the doorway. When another manager came by, Olson left without comment. Olson's actions terrified Channon, who reported the incident to Warner and Douglas. The two males did nothing about Channon's complaint.

During Channon's service as preload manager, Douglas selectively documented his conversations with her. This was only...