Sidney Diggs, IV v. Pepsi-Cola Metropolitan Bottling Co., Inc.

VII Sidney DIGGS, IV, Plaintiff-Appellee,

Defendants ask us pendent to invoke the jurisdiction doctrine and vacate the certifi cation class. Plaintiffs PEPSI-COLA METROPOLITAN maintain jurisdiction that we have no CO., INC., BOTTLING decide the class certification issue on an Defendant-Appellant. interlocutory appeal such as this. Alexan 735, der v. Aero Lodge No. Int’l Ass’n of No. 86-1480. Aerospace Workers, Machinists and United States Appeals, Court of 1364, (6th Cir.1977), denied, cert. Sixth 946, Circuit. 2849, 436 U.S. 98 S.Ct. 56 L.Ed.2d 787 (1978), and Curran v. Merrill Lynch, Argued July Pierce, Smith, Fenner 622 F.2d (6th Cir.1980), 230 n. 14 Decided aff'd, Nov. 456 U.S. (1982), S.Ct. 72 L.Ed.2d 182 teach Rehearing En Banc Rehearing and pendent jurisdiction may be exercised 26, 1989. Denied Jan. interlocutory

when an injunction has been appealed. Given the posture of the us, however,

case before we do not believe orderly

that the justice administration of

would be materially by furthered address

ing the class certification issue at this

stage of the proceeding. Curran,

F.2d at 230 n. 17. dismiss,

Plaintiffs have moved to jurisdiction,

for want of appeal from supplemental order in which the district

court amended its definition of the class gave “direction” on implementation of preliminary injunction. Defendants

contend that the supplemental order was

one “modifying” preliminary injunction, appealable

and thus is under the express

provisions of 28 1292(a). U.S.C. § We agree original injunction

“modified,” and that we therefore jur

isdiction as appeals. to both

The motion to appeal dismiss the supplemental order is DENIED. The granting

orders modifying prelimi-

nary injunction REVERSED, are plain- having

tiffs failed to requisite show the

likelihood of success the issues ad-

dressed court, the district and the case

is REMANDED for further proceedings

not inconsistent opinion. Hardies, Rich- Gecker, Ross & M.

James Margaret M. (argued), E. Lieberman ard defendant-appel- Ill., Fiorenza, Chicago, for lant. Saginaw, (argued), Jr. Thompson,

M.T. Mich., plaintiff-appellee. Judge,* and ENGEL, Chief

Before KRUPANSKY, Circuit MERRITT Judges. Judge.

ENGEL, Chief Bottling Metropolitan Pepsi-Cola against it judgment entered appeals Inc. States United in the trial a bench after District of the Eastern Court District discharge wrongful plaintiff’s Blue Cross & Toussaint claim Michigan, Blue Shield of raises appeal (1980). This appli- concerning both the issues important the finder where cation promise finds a judge) (here the fact and the just cause discharge without cases. pay in such front award sales IV was Sidney Diggs, Bot- Metropolitan manager for until his Inc. from Company, tling During September discharge on writ- a formal subject to time, he was April Judge effective of Chief duties Engel assumed J. Albert *The Honorable year ten evaluation each included a evaluated defendant in a fair graded performance possi- evaluation. The objective manner. The conclud- lowest, grades, highest ble were: ed that this contract had been breached distinguished, superior, commendable, fair when discharged good without marginal. after Diggs had cause and objective before an evaluation learned about termination of another performance. made of his He manager, district sales super- he asked his held that the contract had been breached visor, Haslam, Mr. company’s about the because the defendant bore the burden of policy job security. testimony on The is proving just cause, and no evidence was disputed response. Diggs as claims provided regarding plaintiff whether the that he long your was told that “as as performing satisfactorily at the time performance satisfactory, you won’t discharge. judge district was not worry have to about Pep- [termination].” persuaded by testimony defendant’s re- Diggs si-Cola claims was told that his garding Diggs’s ability mitigate his loss- job long was secure as as continued to es, and therefore pay, awarded front which rating receive of commend- was discounted to its value as of able or above. judgment 5%, date rate of while prejudgment interest was assessed from Pepsi-Cola was terminated after filing of the complaint date at a complaints received regarding customer his rate of Pepsi-Cola 12%. filed a motion to performance. His last two evaluations had alter or amend judgment, which was “fair,” been a “commendable” minus and a appeal This denied. followed. Pepsi-Cola’s alleged both below perform- requirements. Diggs ance disputes the ob- appeal, On Pepsi-Cola argues that jectivity of these evaluations. (1) in finding district erred that the permitted contract only just Diggs brought a complaint six-count Toussaint; (2) dismissal under plac- Saginaw the circuit court for County, Mi- ing upon it the proof burden of on the chigan, Pepsi-Cola removed on diver- cause; just (3) existence of ruling that the sity grounds to the United States District complaints customer did not constitute Court for the Eastern Michigan. District of cause; (4) awarding pay; front and im- Diggs’ complaint challenged discharge his properly calculating the discount rates for promotion opportunities and denial of the damage award. discrimination, theories of race breach of implied employment contract, negli- I. gence, promissory estoppel, unjust and en- richment. After granted the district court judge’s The trial initial task was summary judgment to defendant on all promise determine what had been made except counts race discrimination and to Diggs. supplemental his findings of contract, proceeded breach the case fact and conclusions of law he states:- trial on the latter two issues. The district Haslam, regional Keith manag sales judge Pepsi-Cola held for race dis- er, promised plaintiff that he would claim, crimination but judgment entered a position retain his as district sales man on the Toussaint claim. The ager long as his performance was judge district $36,167 awarded Diggs maintained at a certain level. It is un pay, $133,483 back pay $48,124 front promise certain whether the was couched prejudgment interest, for a total of satisfactory terms of performance, $217,774. performance, credible or commendable

The district found representa- performance, but it does not matter be Diggs’s tions made by supervisor regard- cause, purposes for all relevant to the ing job security created “just suit, cause” ter- the words are synonymous. Fur mination contract within the meaning thermore, fairly be inferred that Toussaint. He also found that terma promise promise him included a provided the contract that the evaluation fairly when contract find a Toussaint fused in accordance determined objectively of: a letter to consisted evidence plaintiff’s the defendant. practices company president him from the and clarifies reiterates This statement ... is the effort “[mjaximum stating that remarks protracted more to ... our contribute can way we surest finding bench. made employee appraisal security.”; an job own prom- Haslam found that he indicates stating testimony deposition program; fired so not be Diggs would Diggs that ised were undertaken the evaluations satisfactory. long as employee improve security but to job receiving a mean found to Satisfactory was F.2d at Kay, 101-02. performance. on his or better of “commendable” rating How- evaluation. Pepsi-Cola Metropolitan Bot- Rouse v. also was there found that ever, (E.D.Mich.1985) F.Supp. 34 Co., 642 tling Pepsi-Cola part of on the duty implicit an Metropolitan Pepsi-Cola Copeland v. and objec- rating determinations 84-CV-1180-DT, to make slip op. Co., No. Bottling represent findings fairly. These tively and 1985), cited are also (E.D.Mich.April claim that Diggs’s between compromise a perform- that the evidence Pepsi-Cola as any independent made was promise here has question plan in ance evaluation Pepsi-Cola’s criteria performance an to be insufficient found previously was to made only promise that the claim contract. finding a Toussaint for basis that it determined long as Diggs so employ point out the However, Pepsi-Cola fails adequate. were appraisals performance his attempted plaintiff that fact Rouse that indicates of the record Our review without program evaluation rely on the erroneous. clearly findings were not these promise contractual of a evidence any other Also, error Cope- that was argues Pepsi-Cola employment. of continued that conclude in addition land, evidence only the district Diggs in- with a it reached that agreement promise a was plan Tous- under Pepsi-Cola’s contract just company. a cluded “future” specifical- Toussaint is Copeland un- It claims Rouse and upon saint. reliance promise a an oral litigation where involves situations ly excludes This persuasive. per- employer’s an evalu- predicated employ is tied to a that is promise Pepsi-Cola system. there- appraisal quite different This system. formance ation proposition upon the merely for the cases several based cites from cases fore appraisal or from system a between a nexus an evaluation presence cannot decisions was job agreement retention oral plan where cases just cause for a matter fact. Toussaint a the basis as reliably form established authority However, contract. the district also asserts Pepsi-Cola persuasive. deci- to the Toussaint faithfulness court’s Co., 84- No. Michigan Oil general- Dzierwa light misplaced, sion City, (Cir.Ct., Jackson 34558-Ck, slip op. courts recent construction ly narrow 1985), May Toussaint, particular calling given aff'd involve (1986),did not in Grant decision recent to our attention alter employer to by an promise specific Corp., 811 F.2d International Rockwell contract. terminable-at-will more Cir.1986). claims (6th of Dzierwa, employee was Instead, in will language decision from company ex benefits, told that upon fered turned in Grant The result support. time and long remain for him pected estab- clearly credible aof the absence “unsatis or “marginal” ratings told Tous- under enforceable promise lished years two consecutive factory” for such holds that Essentially, Grant saint. Dzierwa, op. slip dismissal. merely his lead to from inferred may not be promise grievance aof establishment employer’s proba- the creation procedure, Technologies Kay v. United Similarly, tionary status. Cir.1985), re we 757 F.2d Corp., Carpenter v. American Excelsior he would not discharged unless per- his F.Supp. (E.D.Mich.1987), plain- formance par was below was factually es- tiff testified that he was told that he could tablished. promise That the did not include work for company long per- he magic “just words cause” is not suffi- “properly.” formed signed He then an em- cient to justify excluding the case from ployment application which included a coverage. Toussaint Further, Toussaint stating clause that he knew he could be clearly holds that the just existence aof terminated at the will of his employer. promise cause Mich, question is a of fact. 408 The court promise found that the allow 292 N.W.2d at 885. Under him to continue if performed properly 52(a) Fed.R.Civ.P. we are in our limited “ gave him a subjective ‘mere expectancy’ review to whether judge’s the trial finding that he would be terminated only in this regard was clearly erroneous. cause.” Id. at 936. The court concluded Plainly it not. expand that to relying Judge Krupansky, dissent, urges vague such statements without further strongly facts, these supporting evidence, would virtually swal- made out a “satisfaction” contract. up employment-at-will low doctrine. However, experienced Michigan trial Here judge, fact, as trier of judge who tried the jury case without a did faced promise with a specific coupled with not so conclude. Viewing the testimony performance a standard. Unlike Carpen- most favorably to Diggs, must, as we it ter, Diggs sign did not an “employment-at- was, in our judgment, an appropriate exer- will” clause. cise discretion for the judge trial to Pepsi-Cola also relies on Valentine v. conclude the language that was that of an Credit, General Inc., American implied promise not to discharge except for (1985). 362 N.W.2d 628 In Valentine, just cause. Levin, Judge the author Toussaint, an- Judge Churchill could reasonably have nounced that did not recognize “[Toussaint] concluded Diggs’s that express concern employment as a fundamental right cre- Pepsi-Cola that “could come in and arbi- ‘special’ ate right. a new right trarily dismiss us for apparent no reason” held in Toussaint was right the that arose coupled with the regional sales manager’s out promise of the not to except terminate response direct to his inquiry job about for cause.” Id. at 362 N.W.2d at 629. security, allaying concern, such were Since the district court found that such a enough to just establish a cause contract. promise was to made Diggs, the limitations we, sitting That review, might have of Valentine would not seem to matter contrary reached a conclusion is anot suffi- In summary, here. we find per- little cient basis reversal, for simply because the precedent suasive for argument that case was judge tried before a and not a Toussaint should not applied be to these jury. facts. Judge Krupansky argue would that Having much, said this we are none- Diggs’s allegations must amount to a satis- theless bound to observe that as a matter faction as contract a matter of law. He precedent, direct the only authority that claims that have disregarded we the entire Diggs can cite is compan- Toussaint and its line of Michigan satisfaction contract cases. case, ion Ebling v. Corp., Masco disagree. Instead, We we noted that 578, 292 (1980). N.W.2d 880 Further, the instant unlike the cases relied Toussaint does not expressly address upon by Judge Krupansky and appel- promise a whether to employ long as lant, does fall easily into the satisfac- one up measures to criteria tion category. Here, contract the term gives rise to implied contract “satisfactory” given meaning additional same effect. by virtue of the fact that, in the view Our affirmance of liability does not ex- judge, trial it was made with reference to pand A promise Toussaint. to Diggs that Pepsi-Cola’s performance appraisal sys- judge’s discretion within it was Krupansky Judge agree We tem. conclusion. alone, to draw standing system, appraisal that contract. just cause a create insufficient II. re- promise that However, fact that claims per- long as he services Diggs’s tain Diggs it and not holding that erred judge coupled with satisfactorily was formed issue proof on the burden possibility raises system appraisal just for dismissed Diggs was whether discharge right to waived relied here The district cause. at will. Jordan, Mich. East City Rasch case of this facts Moreover, find we (1985), for 336, 367 N.W.2d App. presented those very similar be a out can make if proposition plaintiff Ebling, In supra. Ebling, violation, of a case facie prima if dismissed he would told affirmative has the then “the defendant 597, Id. job.” “doing the con has breached proving found The court at 884. N.W.2d legal.” discharge was tract, a find jury to permit sufficient promise Rasch, at 858. Id. 598, 292 Id. at contract. just cause out set Appeals Michigan Court facts found further They requirements to be the considered what distinguish- factually “not Ebling were (1) just cause case: facie prima of a Toussaint, where those able” by the contract; em- statement manual policy primary (3) damages. discharge; and until good for discharged only be of these ployees all met Diggs had Finding that the basis form found cause was shifted the district requirements, 597, 292 N.W.2d Id. at contract. dismissal just cause proving of burden that found judge 884. the at Since Pepsi-Cola. to proving just in succeeded had side neither distinguish- for any basis see not We do thereof, held that he or the lack one is if employ to promise a ing between cause. for dismissal Diggs’s if employ promise to a and job” his “doing for error it was Tous- that satisfactory. argues Pepsi-Cola is performance one’s burden the it of saddle with trier to imply that Ebling and saint for Diggs dismissed an it had whether that of proving determine duty to has fact judge’s the trial that written, It asserts just cause. or oral promise, employer’s do try to to Diggs “continued finding that mere satisfaction a to more amounts to meet inadequate job” upon on his best depends determination This contract. perform- own showing his of burden Diggs’ credibil- and the context factual specific then the contract.1 of ance that such, believe we As parties. of ity Jordan, 141 City East See Rasch findings issue. court, supplemental The (1985). 856] [367 law, upon expanded and conclusions of fact this burden. to meet issue, holding failed It has that: on this statement its earlier Diggs contin- that noted judge also The district respect the issue to with evidence The that stated He his dismissal. until to work ued Diggs plaintiff has conflicting. The performance that sense in the performance shown "has objective evaluation fair proven that a work.” miss He didn’t work. continued bet- performance would actual his Diggs’s discusses dissent Krupansky's Judge the defend- has Neither substandard. ter than length. at some evaluations poor and misdeeds Thus, substand- have been proven that it ant point that there out compelled to feel we defendant’s complaints ard. that indicates evidence also considerable is Diggs legitimate concern were a customers satisfactorily time performing clear, however, by no means It is defendant. praise his Diggs discharge. received of his justified the performance plaintiffs by Brian written for 1982 per- evaluations satisfactory better complaints. His manager. In Beattie, regional sales his together years taken several for formance good under- Diggs “ha[s] stated Beattie earned had performance his the fact noted, with also He business." standing regional sales promotion an offer him manager ac- new secured had approval, favor. weighs in his Coldwater evaluation, Beattie com- In his counts. proof on this the burden defendant cites cases which it support claims Saari court only require evidence proposition that “an must first of compliance opposed proof of it. performance establish own his full under question There is no supplied before contract the burden shifts to the some evidence compliance in his trial. It justify discharge.” This is less certain proved that he compliance. believe not, we is correct. It does however, Finally, Pepsi-Cola argues that the dis- mean that claim must be uncontrovert- trict misinterpreted the holding of ed. Rasch. It cites to language in Rasch that Pepsi-Cola first cites Zdero v. Briggs proof burden of “[t]he plaintiff to Mfg. 61 N.W.2d 615 prove his contract its performance up (1953), authority to the time of discharge.” 141 Mich.App. plaintiff must, law the part as a of his case However, chief, present clear and convincing evi- court, Rasch like the court, gives Saari performed dence he had fully part two standards prima for a facie case. an employment contract. We can only addition to the one relied by Pepsi-Cola Zdero, observe that predates Tous- it also cites says Saari and that a by many years, saint was not attempt need “produce[] testimony that he requirements define the for making out performed up to [the the time contract] prima facie cause of action for unlawful of his discharge.” Id. discharge, but rather anwas in equi- action ty specific Michigan authority employ- point this of law is ment contract. not entirely clear as to quantum proof required for prima facie case. Pepsi-Cola also relies on the even older However, we are satisfied that remand to v. George Saari Assoc., C. Dates & gain a insight clearer would not alter the (1945), 19 N.W.2d 121 for the result here. Given fact-finding powers proposition that an employee prove must vested in the trial judge respect our his own making prima out a his closer familiarity with the wrongful facie case for nuances of termination. While law the state in sits, this decision which he did are concern what we was neces- not disposed to sary disturb aspect out such prima make of his facie decision. is not requirements clear that the are as Pepsi-Cola describes them. When sum- marizing plaintiff what the had proved, the III. say Saari court did that he “performed had Pepsi-Cola up his contract to argues the time of that his the dis- district charge.” court at was Id. as N.W.2d at bound a matter of law to However, uphold setting when its down the actual determination that customer standard, complaints the court stated: lodged “On the against record Diggs provided before us the just prima made a cause for facie his discharge as a matter of case proving contract, the law. testimony It contends any that other holding, in that he performed upit to effect, the time of relegates essential employment deci discharge, proof his and of damages.” Id. courts, sions to the not the employer to (emphasis added). Thus, it appears that charged with such responsibilities. It is Diggs display mended performance, for gaming going.” Diggs it that, also testified in addition space outlets, new shelf ing at some retail establish- promotion offer that the court took note vending new machines keeping above, and of he was position recommended for a up records to date. Pepsi-Cola with ly, marketing a analyst. Final- Further, Diggs July received a letter in Diggs testified that Beattie had told him that Gambrell, from Fred Pepsi-Cola marketing Diggs had rated lower on his 1982 evaluation analyst Michigan, for Diggs whom described as than he should just have because getting he was "right the Pepsi-Cola hand man” of Division Diggs Thus, know when he wrote it. we Vice President Ken Yoder. encouraged He that believe there were sufficient facts the for Diggs, stating "Sydney, pleasure it was a meet- Pepsi-Cola find that failed to ing you; trade, looking your and after at I can meet establishing its burden cause for you going see are things to make happen. Keep Diggs’s discharge. effect right to judge’s trial the exceeded accepted trial true that indeed Pepsi-Cola Toussaint. under remedies actually occurred complaints fact it terms what down strike us to urges in nature. serious they were engineering. social efforts judge’s trial anything oth- argues that Thus, Pepsi-Cola claim. to this respond did not an was cause good finding er busi- its with interference cases impermissible presents no Pepsi-Cola again, Once judgment. trial court ness position its support of the examination Our Michigan Su error. “the inwas states Pepsi-Cola chal- us opinion satisfies guidance little court’s provided Court preme any new impose The language does lenged just cause....” meaning Michigan’s law foreign standard language in the lies claim this answer rather an- is but contracts employment stated “[A] The itself. Toussaint concepts of way expressing for other to terminate promise always are were employer faith illusory good if be given course whether judging final inherent the sole be permitted traditional discharge." consistent conduct propriety arbiter obligations. N.W.2d contractual Mich. at Toussaint, 408 say "the toon court went The reason whether ... decide should jury IV. good cause.” discharge amounts for is no there argues that Pepsi-Cola at 896. retire until pay po of front an award recently reaffirmed for basis Court Supreme It contract. Hospital, Toussaint under Huron Port ment Renny v. sition inherently are 327, 335 awards pay that front claims since Further, argues that it speculative. (1986): necessarily indefi are contracts of fact a matter decides jury pay front duration, award discharged nite whether nature. speculative perforce must sub- jury While cause. for juris other authority from cites employ- for that opinion stitute pay front proposition the em- dictions whether determine er’s, may fixed is no there when inappropriate misconduct specific committed ployee e.g. Benham employment. fir- term fired, whether he was for which Inc., 432 F.2d 359 Airways, reason World whether ing pretextual, Homes, Walter v. Jim Cir.1970); cause, Jeter or good discharge amounted (W.D.Okla.1976). F.Supp. 791 Inc., ap- selectively employer whether enough that is not It rules. plying correctly points hand on the other faith was good acted judge’s a trial Michigan law out by not unreasonable. limited damages is award Katch strong preference inquiry. Michigan’s of discretion abuse Given Inc., 746 F.2d Textron, of fact trier to a questions Division bringing Speidel these awarding any specif- Cir.1984). In inability cite 1136, 1144 Pepsi-Cola’s particu placed existence holding that pay, the Michigan front ic just Institute constitute v. Detroit complaints will on Bruno lar reliance customer N.W. court’s law, trial Technology, matter as a cause of 2d 745 & error. Lakeshore not in was (1974), Stearns decision 71 N.W. Co., 112 Ry. M.S. claims next Pepsi-Cola questions in turn Pepsi-Cola (1897),but held when discretion exceeded because decisions these applicability Diggs’s evaluate had to of fixed in situations applied they were cus- care was “with case this Since employment. periods evalu- such in make [sic] tomarily followed opinions have Michigan briefed, two was establishes this claims It ations.” position. Diggs’s favor which issued been far care” “customary contract In Renny v. Port Huron Hospital, su- and his former salary Pepsi-Cola. pra, Michigan Supreme Court tacitly then multiplied figure by approved front pay Toussaint cases. 26.5 because he found “no basis for finding upheld a twenty-five year front that his future loss of income will be either pay award in the Toussaint stating: case more or less than per $9200 year ... [and] hospital Defendant no alleges plain- projecting basis future income other tiff suffered past little or until damages age no a period years.” of 26.5 and was not entitled to damages. future Pepsi-Cola cites several cases for the Defendant its arguments bases on earlier proposition that pay front is inappropriate decisions of this Court holding that fu- in cases such as the present one where the ture damages may not be awarded under existence of future losses is not more clear- employment contracts terminable at will. ly It established. first mentions Rodgers v. By establishing just-cause contract, Body Div., Fisher G.M.C., 739 F.2d 1102 plaintiff has protected established a in- (6th Cir.1984). Pepsi-Cola claims that in terest in her employment at the hospi- Rodgers this court struck down a thirteen tal.... There was sufficient evidence year front pay award on findings based for the jury to conclude case, similar to this because it too was in fact damages suffered and that the speculative. Id. at 1107. amount of damages $100,000. We There are several differences between find no error. Rodgers and the instant case. Rodgers is Mich, 438-39, 398 N.W.2d at 339 not a case, but is instead a Title (citations omitted). Front pay in a Tous- VII action. More important, however, is saint situation has even more recently the nature of “speculation” in these upheld by the Michigan Court of Ap two cases. In Rodgers, problem peals in Ritchie v. Michigan Consolidated created plaintiff’s when presented counsel Gas 163 Mich.App. 358, 413 N.W.2d possible computation of damages to the (1987). There, the court cited the trial jury during closing argument, writing fig- language court’s stating that: ures on a blackboard. figures These in- No Appeals court yet ruled cluded additions for fringe benefits and on the propriety of pay front damages in rates, interest neither of which had been a Toussaint case. The award of front fully explained during trial testimony. pay is governed issue by the sound overturning verdict, Judge Potter, sit- discretion of the trial court. Davis v. ting by designation, announced that “[w]ith Combustion Engineering, 742 so little actual evidence of wages lost be- (6th Cir.1984). This Court finds that it, fore jury was no doubt unduly influ- pay front permissible in this case. enced the extremely hypothetical fig- 372-73, Id. at presented 413 N.W.2d ures 803. The plaintiff’s counsel in court went on to look at closing argument.” circumstances It ap- therefore including pears the difficulty that that the court in Rodgers pri- plaintiff had finding comparable marily employ- concerned jury about confusion and ment after her discharge and concluded introduction of new material during pay front was an appropriate closing argument. remedy Thus, this precedent is in this instance. Given these rulings, particularly two persuasive. it seems clear that a front pay remedy was Pepsi-Cola next cites Shore v. Federal permissible, at least principle, in the Express Co., 777 (6th F.2d 1155 Cir.1985). instant case. There, Judge rejected Martin a five-year Pepsi-Cola argues that even if pay front front pay award, finding no basis in the permissible is in some Toussaint situa- record support it. He said that “[w]hile tions, the year 26.5 award in this case is a district court has experience considerable wholly speculative and without evidentiary in calculating future earnings, some basis support. The court based the award on the appear must award_ in the record for such an difference between Diggs’s current salary The record from the court be- a which limit any maximum beyond “far for the basis of indication no contains low compensatory,” 746 to be could find jury Pepsi- 1160. at Id. award.” pay front the concern voicing particular F.2d at no evidence also is there argues that Cola from windfall aof possibility the about It claims case. the instant loss future of 1143. Similar at Id. pay awards. front lower is income current Diggs’s while that is not here, Katch but do exist Pepsi- concerns earned previously he what Katch analagous. While entirely in the quickly increase will Cola, income his con- primary case, the court’s money Toussaint the of because business insurance the failure the from appeal arose on cern commissions. repeat get from will he the on to instruct adequately judge trial that Shore mention fails mil- in a resulting $2.2 mitigation, issue dis- Judge Martin case. VII a Title also only slightly was jury verdict lion histo- legislative and provisions the cussed re- did Katch remittitur. on reduced the determining that Title VII ry an permitting of law principle ject 1158- Id. at invalid. pay award front pay. of front award pay front evaluate decided to He 59. by Pepsi- case cited Circuit A final Sixth to all applied standards "the award Engineering, v. Combustion will aid is Davis the award Cola whether relief: VII Title Cir.1984), age an (6th rectify- Inc., F.2d 916 and illegal discrimination ending that is true It case. 1159. Id. at discrimination causes.” it harm ing the awarding of discussed Davis that to note important particularly It is employees young relatively pay to front bar did Judge Martin front the “award commented and merely said recovery: he pay front discharged discriminatorily pay aon award his base must judge trial he time such until employee year old suggested: He basis. factual might be unwarrant- pension for a qualifies courts district factors which Some to make hand, the failure the other On ed. specula- alleviate employed age an for award such an in- damage awards of future tive nature might discharged, discriminatorily likewise mitigate, duty employee’s clude 923. Id. at of discretion.” an abuse be opportu- employment availability of “the dicta; However, observation cited one within which nities, period and the old years in fact Davis re-employed, may be efforts reasonable front years six award upheld expectancy, life employee’s work Here, Diggs was pay. determine tables discount is clear Michigan law damages and oth- argues of future value present can damage award prospec- point pertinent that are er factors abuse a clear in an instance aside set awards.” damage tive Katch, at F.2d e.g. discretion. v. Consolidated Koyen (citing 342, 347 Beebe, 1144; Wilson 1161, 1168-69 F.Supp. Co., 560 Edison the trial Cir.1984). He notes re- then Judge Martin (S.D.N.Y.1983). range is within damage award court’s aof a consideration case manded with- can therefore evidence factors. these light of pay award front review. discretion an abuse stand take did instant Bruno factors has relied many account into supra, meth- Technology, While mentioned. Judge Martin Detroit Institute scientific, ap- be- the differential more proposition could have od used mitigation, salary work can be past considered pears that tween availability other pay award. and the a front expectancy formulate Pepsi- 600-01, 215 opportunities. App. is a ten- Bruno because argues Pep Cola cited case Circuit Sixth Another While relevant. is not it ure Tex Div. Speidel, is Katch si-Cola force persuasive lessen may argument our Katch, panel of tron, Inc., supra. entirely its destroy Bruno, does it pay award front 19-year rejected usefulness in determining whether front would be able to earn other em- pay appropriate under Toussaint. ployment during that same time. See Diggs also cites other authority permitting Stearns v. Lakeshore Co., & M.S. Ry. front pay awards without exhaustive evi- 112 Mich. 651 (1897). N.W. [71 In- 148] dence on earnings. future e.g. Goins deed, to follow the defendant’s position Co., v. Ford 185, Motor 131 Mich.App. remedy eviscerate the for breach- (1983) (difference between es of lifetime or indefinite term employ- plaintiff’s wage current and his replace- ment contemplated contracts by the Mi- ment’s current wage forty extended over chigan Supreme Court in its landmark years used as the basis an award where decision Cross, Toussaint v. Blue he wrongfully discharged because Mich. 579 (1980). [292 880] a handicap); Tiffany v. Co., Christman Michigan’s If view and princi- indeed the Mich.App. 267, N.W.2d 199 ples of debatable, Toussaint are that is a (future income computation based on testi- debate for Michigan’s lawmakers. Our mony that average wage annual increase duty in this diversity case is to follow the field was held permissible). 6% they law which make. We are bound to observe that those Mi- chigan cases that have struck down front V. pay awards have involved either an error in Pepsi-Cola contends that the dis jury instructions or damage awards entire- trict court erred in applying a discount rate ly out of any line with reasonable recovery 5% the pay front it awarded to based presented evidence at trial. Diggs. It claims that Michigan law re Neither of these presented situations is quires the court to apply a discount rate of here. The case was tried before an experi- 12%,the rate of prejudgment interest man enced judge knowledgeable in Michigan dated Michigan law. Further, law. while is at arguable least As an matter, initial we observe that the that the here award was on high side, determination of prejudgment interest and arewe unable hold that it shocking, the accompanying discount rate calcula unconscionable or entirely out line with tions are a matter of substantive state law. the evidence him. before Whatever the In our recent decision of Bailey v. Chat may law be in other states of the Sixth tem, Inc., 838 (6th F.2d 149 Cir.1988), a elsewhere, Circuit or it may fairly be said panel of our court held that federal law governs the rate of postjudgment interest has not disfavored front pay. Judge As Churchill observed: in diversity cases. However, that same court remarked that “prejudgment interest [Defendant unearthed several cases that stand for the proposition that is a aspect substantive of damages in damages in the form of wages future are diversity case and is thus properly viewed not available in the case of a breach of law_” aas matter of state Id., at 159. an employment contract indefinite Our court has repeatedly held ques term. reasoning underlying these tions of prejudgment interest in diversity cases is apparently that such damages actions are to be determined under state inherently are speculative. While the See, law. e.g., Rhea v. Massey-Ferguson, cases cited defendant be accurate Inc., 767 F.2d (6th Cir.1985); statements of the law in jurisdic- certain Anodco, American Inc. Reynolds Met tions, they do not appear to reflect the als (6th Cir.1984); position of the Michigan courts. As long Clissold v. St. Louis-San Ry., ago Francisco the Michigan Supreme (6th 600 F.2d Cir.1979); Lynch v. Court held that the measure damages Electro & Abrasives Corp., for breach of an agreement Refractories to employ a 408 F.2d Cir.1969). person for life or during his ability to work included the worth Turning to Michigan law, we note that what he would have been able to earn Michigan Supreme Court case that any less amounts can future muster in its favor is Kin-

925 Michigan the to appealed Kovacs 616, 283 48 N.W. Folkerts, 84 Mich. v. ney the decision. Court, upheld Supreme which the held that the court Kinney, (1891). decision, part, The court based by divid at “is arrived rate discount correct 600.6306,a tort language or M.C.L.A. the dollar, § the plus one by sum given a ing court in 1986. The passed reform statute interest, usual rate or the rate of legal stated: Pep 624, at 286. 48 N.W. at Id. interest.” last enacted acts reform Ap of the tort One Michigan Court of a cites si-Cola also 178, provides summer, P.A. 1986 Corp., Lanning case, Freeman peals trier rendered a “[ajfter a verdict (1975), for 527, N.W.2d Mich.App. court the plaintiff,” a favor of fact in of future reduction proposition the for, among other judgment shall enter “requires value present damages to future economic all things, all future judge be the found total award the gross damages “reduced non-economic and discount basis yearly aon apportioned value,” term is later which present cash 531, at Id. statutory rate.” at the ed meaning total amount “the as defined referred rate statutory The at 70. N.W.2d present value damages reduced future which 600.6013 by M.C.L.A. supplied is year for each per year at a rate 5% money judgments interest provides that Leg- The damages accrue.” those which af filed complaint was the where in cases per- the five opted for thus has islature 1, 1980 is 12%.2 June ter amendatory pro- Although the cent rate. the supporting precedent However, the except to cases is not effective vision A persuasive. more is much 1986, 1, we October or after filed on case, v. Ford Motor Michigan Goins recent ac- legislative conclude, the light 185, N.W.2d Mich.App. Co., 131 should consideration tion, no further rate, relying discount the (1983),upheld 5% val- present given to reduction Michigan’s Standard 53.03 section ue issue. 5% provides Jury Instructions Thus, 649-50, at 170. N.W.2d note specific court took The rate. Mi- legislature and Michigan both The disagreed with it. but Lanning sup- recently Supreme Court have chigan nothing within “[tjhere is stated rate. discount ported the 5% ap- that it suggests language of 6013 Katch, issue in this considered Our court damages of future computation plies to ruling on “[wjithout held that We supra. 201, 347 N.W.2d Id. at value.” Michigan unclear issue which this 192. cent per five law, observe we Tiffany v. heavily upon relied Goins contrary to rate or discount rate interest 267, 287 Mich.App. Co., 93 Christman M.S.A. noted in rates more realistic Tiffany (1979). Giv- at 1142. Katch, 746 F.2d 27A.6013.” to have Lanning reasoning found pro- decision and Kovacs en recent any “we believe stated merit but some 600.6306, canwe mulgation of M.C.L.A. § come either should from rule variation as undecided issue longer view the no Legisla or the Court Supreme from estab- uphold Thus, we must Michigan. 288, 287 N.W.2d Id. at ture.” enforce 5% law and Michigan lished upon when were relied two decisions These rate. discount upheld appeals court of another argues that further in Kovacs Chesa rate discount the 5% pay front discounting the 514, court erred Ry., 134 & Ohio peake judgment, date back award (1984), aff'd complaint date the opposed (1986). N.W.2d 169 year per com- of 12% rate judgment at the part: pertinent provides in The statute judgment is ren- annually unless pounded after June complaints on or filed For having higher instrument written on a dered January interest before but filing interest. rate date of be calculated shall date satisfaction complaint filed. argues It prejudgment since present value as of the date of filing before interest is allowed front pay on and such prejudgment interest is applied to them. interest is paid from the date the com- Pepsi-Cola once again support draws plaint, it be reasonable to dis- Bruno. In considering issue, a similar count the pay front award to that date. court announced that “to the extent that Bruno, swpra, echoes this sentiment: such damages occurred after the date of Since interest judgment filing on the the of the complaint, stat- damages

ute, 600.6013; M.C.L.A. should 27A.6013, be M.S.A. reduced their worth at the provides that statutorily time of filing the complaint.” mandated Bru- no, interest judgment on 51 Mich.App. 599-600, shall run from at the filing of complaint, 749. if the dam- ages for years subsequent Diggs responds that M.C.L.A. 600.6013 § filing complaint were not reduced damages treats a lump sum, citing to their date, worth plaintiff, by Anodco, American Inc. v. Reynolds Met operation statute, would be als 572 F.Supp. 895 (W.D.Mich.1983), given interest on monies from a time 743 F.2d 417 Cir.1984), for this aff'd prior to the they time were owed to him. proposition. Anodco was a diversity case 51 Mich.App.at 600 n. brought 215 N.W.2d at 749 to enforce a requirements contract n. 1. After briefs between parties. were filed in the alleged Anodco instant our court decided to fulfill Walker all Reynolds’s anodizing Consumers Power Company, needs for Oldsmobile bumpers X-car (6th Cir.1987). In Reynolds Walker we stated: 1979-1981. When decided to ano dize its bumpers own granted,

If award January it should take Anodco into instituted account this suit. Judgment interest from the date dam- rendered for ages accrued Anodco May 11, the time the complaint Thus, Anodco’s damages was filed. Michigan occurred Standard almost In- Jury entirely in period structions 2d 53.04. Under between the date of filing of the law a trial complaint court required the date of instruct a judgment. jury on reducing future damages to present value as of the date filing the One of several issues by decided the dis- complaint; or must itself reduce the trict court after the issuance of the judg- award to value. ment was that prejudgment “interest shall (citations Id. omitted). be Diggs calculated did based on the entire damage respond award, not to this claim by Pepsi-Cola. which should not apportioned.” be fact, none of the cases cited Id. The court relied on the lan- discusses guage the issue of how far M.C.L.A. 600.6013, back to § which calls discount a pay front Further, prejudgment award. interest to run from the jury instruction date of filing relied the complaint, and does for the 5% discount rate does speak mention the possibility apportion- question of the appropriate ment. discount date. Both fairness precedent dictate panel A of our upheld the Anodco that we reverse the district court on this decision, but we did not specifically discuss issue and thus avoid the duplicative award of interest that would otherwise result. apportionment Instead, issue. we de- ferred to judgment of the district court Pepsi-Cola’s argument final on this and several as to other interest calcula- the calculation of judgment issues, tion stating: is that the district erred by treating all the back found purpose pay prior accrued judgment as a lump of this statute [M.C.L.A. § 600.6013] sum for the purpose of awarding prejudg would be best effectuated permitting ment interest. It claims wages for the interest to compounded from the date period from the date filing to the date of the complaint is filed. say We cannot judgment should first be reduced to their this construction of the statute is errone- aas judgment the date prior crued abused the district ous or be affirmed. must lump sum award interest discretion in rule of law cases, courts a readily federal that admit diversity We In case. of risk pre- the of avoid question would Michigan the on law state follow interest imposition of double technical some interest. judgment be fact could and desirable be might at 425. F.2d 748 Mi- of application a different achieved that law shows Michigan of review Our measures statute, which unique chigan’s definitively re has not question the date the from of interest computation the of panel One courts. Michigan’s solved than from rather complaint filing the of of held has Appeals of Michigan Court the involving For cases judgment. date of the fees on service interest prejudgment that Michigan tried are Michigan law which does filed complaint the after payable liquidated of both consist may and courts those on which date the until accrue not resolu- simple damages, a unliquidated and Univ Michigan due. Central become fees try each tobe would problem of the tion 142 Stengren, v. Faculty Ass’n ersity date the on being tried it were as if case (1985). 383 N.W.2d Mich.App. Interest actually commenced. suit held recently has However, panel another to that accruing prior damages liquidated entire the interest prejudgment that a calculated be therefore could date of the the date from is available judgment the date to the regard without date fixed the of if some complaint, even the filing of Also, enter. ultimately might judgment OM- payments. future involve damages of com- date the accruing after damages Mich. Inc., Newcor, v.Co. Export EL discounted be could suit of mencement also (1986). See App. single filing. With of date to the back Goins, 131 ad- inof aware are parties the that date in not erred court the (holding that little have should fact of vance, finder the on future interest awarding prejudgment calculations. making appropriate difficulty damages). frame attorney could Further, of commence- the date knowing proofs consistently held has court Our date critical sitting in action ment district local of a judgment interest. of discount of addition application diversity defer- considerable law, judg- is entitled contemplates state Michigan law Saylor, v. of Leasing owed Agristor amount ence. ment, representing Cir.1986); Martin (6th and entered filing, F.2d is to be of date (6th 296, 299 767 F.2d from Harris to accrue Joseph interest thereafter Merritt, paid Cir.1985). Rudd-Melikian judgment filing until date Cir.1960), panel rate statutory particular whatever fair- questions that: stated all resolves Ideally, our court this be. courts Michigan’s However, in di- ly. settled well appears rule arewe and rule this hold to is un- fit law seen local cases, where versity Michigan courts believe we by what if a rulings, bound court state certain may think we what do, rather reached a would federal harmo- most result be personally question upon a conclusion permissible lies Therein statute. state with nious should Appeals law, the Court local judge. dissenting difference our may think though reverse, even in a said As otherwise. federal be should tried law Diversity cases Appeals cases, Court because problem number additional view is a considered interest accept the postjudgment should calculation Michigan Judge. While law. District federal question damages, all measure we directs law law omitted). Applying (Citations judgment, the date after before both the district circuit, conclude we this date, to that regard without ac- backpay all treat decision court’s date of suit, commencement of federal damages law entry of a judgment new requires we calculate prejudgment and consistent with opinion. postjudgment interest separately. Thus, even if we wished to construe law MERRITT, Circuit Judge, concurring in the manner above, described we would in part and dissenting part. to do unable court, so. The trial I concur in all of Chief Judge Engel’s accommodating the tension between the opinion, with the exception lone final state and requirements, federal reached the treated, issue that of prejudgment interest result which we have deferred. It is on the pay award for period between true that result lacks the symmetry of date of complaint and date of judgment. Judge Merritt's approach may some overassessment of interest pay- The award of prejudgment interest in a which ments accrue after the date of filing diversity case is a matter of state law of the complaint but have not been dis- type because this of interest is an element counted back to it. The Michigan courts of of plaintiff’s damages. Michigan appeal emphasize that, despite prob- statute is prescriptive, not discretionary; lem, primary concern of the legislature thus, the award of interest here not a in enacting prejudgment interest stat- matter of discretion but rather a matter of ute avoid the overassessment of law. As Chief Judge Engel notes, there is protect interest but to prevailing injured some disagreement among the intermediate parties from the loss of interest due to appellate courts in Michigan about how ac- delays deliberate induced by the defense in crual of “front pay” or other “future dam- order prevent the running of interest age” awards should be treated pur- until judgment was ultimately entered. poses of prejudgment See, interest. e.g., Norge Division, Drake Borg-Warner Om-El Export Newcor, Co. v. Inc., 154 Corp., 464, 466, 116 N.W.2d 842 471, Mich.App. 398 (1986); N.W.2d 440 (1962), by Judge cited Merritt, appears con- Central Michigan University Faculty only protection cerned for the plaintiff Ass’n v. Stengren, 142 Mich.App. 455, 370 right to whose recovery of benefits was N.W.2d (1985); 383 Goins v. Ford Motor unfairly delayed. It makes no mention Co., 131 185, Mich.App. 347 N.W.2d 184 whatever Michigan’s unique interest (1983). panel One the Michigan Court of which, fact, in statute effect at Appeals appears to have gone so far as to time Drake anyway.3 Thus Drake openly disregard contrary a view earlier provides authority neither guidance nor espoused by the Michigan Supreme Court. us here. See Ombrello v. Montgomery Long Ward The decision of the district court is AF- Term Disability Trust, 163 816, FIRMED part, REVERSED in part, and REMANDED for a recalculation of the 415 658, N.W.2d (rejecting with- explanation out Drake v. Norge Division, 3. At the decision, time of the Drake Michigan such interest to be calculated from the date of awarded courts interest under 1915 Mich.Pub. judgment, at a per year.... rate 5% 314, XXIII, 20, Acts ch. provided § which that: The first version of section 600.6013 to calculate When execution shall be upon any issued interest back to the date filing was 1965 judgment decree, interest on the amount 240, Mich.Pub.Acts which amended the Revised thereof from the time entry of the same Judicature Act of 1961. The new law stated until such amount shall paid, shall be col- that: lected at rate per five per cent an- may Execution be levied for any interest on ... num. judgment money action, in a recovered civil Michigan legislature While the had enacted the such interest to be calculated from the date of Act, Revised Judicature 236, 1961 Mich.Pub.Acts filing complaint per the rate of 5% prior to decision, the Drake that statute did not year.... 1, become effective January until after While statutory rate of interest has varied Drake was decided. The provid- revised statute since ed, principle calculating (now section interest codified Mich.Comp. from filing the date of 600.6013) § basically remained Laws that: unchanged. Execution be levied for any interest on money judgment action, recovered ain civil Cir.1984) (en McLinn, Mich. Corp., Borg-Warner Cooper, Miller & E. Wright, A. banc); 19 C. (1962)). 4507 at Procedure § & Practice Federal case compensation a workers Drake 106-10. Court, rely- Supreme intermediate state in the Confusion calculated cases previous ing on deciding in us from not deter should courts benefits on installment from interest highest state’s what diversity case prin- due, reaffirmed they became time I believe do. would estab- “finally a calculation such ciple that avoid “double approach that proper who between parity lishes of com schedule counting” is to reduce benefits accrued ultimately collects their payments plaint-to-judgment paying claim redeems who filing of time at the value val- advance, commuted benefits —at produces the approach This complaint. ue, course." interest triggering result balancing same added). This (emphasis due; is payment installment that each time subse- unaffected is of Drake principle “straightforward of the account takes interest Michigan in changes quent interest prejudgment of interpretation from date change in the statute; a mere Supreme by the favored statute” not dis- would is calculated interest which Om-El, 154 Court, see “the on based principle deeper turb v. Er (citing Rittenhouse at 445 N.W.2d equities” of elementary nature hart, is enti- than no “less receives employee of dou falling into the vice without (1985)), does to receive” tled counting. ble to money determined of use “free have no con I Engel, find Judge employee.” Chief Unlike due have Anodco, Inc. authority in American trary in are occasions there agree that IWhile Co., F.Supp. 895 Metals Reynolds defer- some may accord our Court which (W.D.Mich.1983), aff'd district of a expertise to state-law ence the Anodco of review Cir.1984). careful A one is this I do not concur judge, by this including its affirmance case, to the defer, example, might We them. “ap discussion Court, reveals judge familiarity a district greater of the to accrual refers not portionment” of that direction evolving with have reduction or to payments schedule of consider- in area an highest state’s complaint the time value the ex- certainly, to And uncertainty. able rate “apportioning” rather but a detailed writes district tent statutory after before interest law, of state problem explaining opinion Anodco, interest. rate change receives, to, and entitled is opinion I Diggs. would help to therefore, of no But that Court. from our deference aas this on issue Court District reverse opinion detailed any learned be true law. matter aon court, those from a legal Well-founded law. topic of state Judge, KRUPANSKY, Circuit considerable always entitled analysis part. dissenting in concurring part, value. persuasive disposition majority’s Because however, is in this have we What wrongful extends at bar diversity case intermediate the state issue Blue discharge doctrine and the floundered have courts appellate Michigan, Blue Shield & Cross recently silent court, while highest state’s a man- articulated question, specific this prece- Michigan court ner inconsistent that, if I believe principles. general some dis- respectfully dent, constrained I am erred, it is the district believe we opinion. majority’s sent appel- as an responsibility our abdication if determine must review appellate This de less parties give late terminating its defendant, re question. review novo plaintiff Diggs Sydney (Diggs), breached a peatedly Diggs counseled poor about the contract with the discharge him quality of service that he was providing to only for “just causes.” anchored his Pepsi’s key During accounts. 1982-83, rep- solely upon complaint a statement of Keith resentatives of the largest three grocery (Haslam), Pepsi’s Haslam regional sales chain Diggs’ accounts in region complained manager. The contract upon by relied plaintiffs superiors about his ineffi- majority in affirming the trial dispo- court’s cient servicing of their stores. sition is from the following inferred contro- Subsequent to these complaints, Beattie versial colloquy between Haslam and recommended to his superiors that Diggs Diggs during 1978: be terminated. Yoder approved the termi- I [Diggs] well, said: what do we as dis- nation in June or July of 1983 and directed trict managers you know, what assur- — Beattie to complete a per- written annual ances do we have that point at some in formance appraisal Diggs. The Au- company time the could come and arbi- gust, 1983 appraisal period for the between trarily us dismiss for no apparent reason. September, through September, 1983 He well, you said: [Haslam] don’t have “fair,” scored a rating that was

anything worry about. He said: as below commendable. After discharge, long your performance is satisfactory, Diggs filed the instant lawsuit and at the you won’t to worry about anything conclusion of a bench trial the district court like that. ruled in his favor applying interpreta- besides, He every said: manager got I’ve tion of Michigan law as enunciated in Tous- here has been commendable, rated you saint. From this ruling, Pepsi appealed. know, on appraisals all the they received, Initially, this court must determine the you so don’t have anything to worry level of deference due to the district court’s about. finding that Haslam promised I took that mean to I didn’t have that he would not be discharged except for anything worry about, because this “just cause.” According the trial court’s my regional was manager, he was findings of fact the deference of the “clear highest ranking representative individual ly erroneous” standard dictated existing Pepsi from time. precedent, appellate review must So I took that to my mean job was se- thereafter independently decide the legal cure, long as I performed as jobmy effect of those factual findings. Tay satisfactorily. lor and Gaskin v. Industries, Chris-Craft Diggs interpreted this conversation to (6th 732 F.2d 1273 Cir.1984). Con Cf. mean that he would be “just terminated for naughton v. Harte Hanks Communica cause” as evidenced by performance tions, Inc., 825, 842 F.2d (6th 844-46 Cir. evaluation that fell below rating of “com- 1988) (after deciding that factfinder's find However, mendable.” Ken (Yoder), Yoder ings operative as to the facts are not clear Division Vice President Met- ly erroneous, appellate court must inde ropolitan Bottling (Pepsi), Co. testified the pendently decide legal effect of those company did have a not “just cause” em- facts); Foltz, Blackburn v. 1177, 828 F.2d ployee policy. termination (6th Cir.1987) (mixed questions of fact September In 1982, Pepsi Regional and law are subject not to clearly Sales errone Manager Brian standard); Beattie rated ous United States v. Weingar as “C-” “commendable den, 454, ap- (6th minus.” The Cir.1973)(mixed praisal poor performance identified findings sev- fact and are subject law areas, eral including (Diggs appellate sales had fall- review without application of the en 7.3% below assigned his quota), clearly sales rule). erroneous merchandising, and supervision of his route In reviewing de legal novo the effect of salesmen. Pepsi’s promise to Diggs, an examination During succeeding months, Diggs’ per- scope is in Toussaint order. This formance deteriorated and Beattie re- court is Erie -bound to abide stan- only a “satisfaction” con- ises constitute cannot in Toussaint forth dards set In Schmand 175 Mich. beyond tract. far rationale “push the Toussaint Jandorf (1913), Michigan high 88, N.W. far has thus limits to which employ promise that a court concluded Michigan courts.” Da by the confined year subject one ... ... period Co., 815 F.2d “for browski Warner-Lambert employer was satisfaction” Cir.1987). 1076, More- merely “satisfaction” contract. conceded, “as readily majority has theAs Co., Ry.M. v. Detroit G.H. & over, Sax only case precedent, of direct a matter (1900), 84 N.W. 125 Mich. is Toussaint itself.” Diggs can cite agreement give an that an court decided review However, belies position” during permanent employee “a bar, promise disposition. majority lifetime, perform long as he should his as Diggs, liberally in favor most construed compa- the satisfaction of his duties that he only the conveyed promise con- only a “satisfaction” ny constituted long so in his retained Buhl, Koehler v. tract.1 See also Pep- “satisfactory” to was (contract 158-59 54 N.W. si. done to the employee’s “shall be work Toussaint, Michigan Supreme just firm” of said satisfaction proposi- reaffirm the careful Court American Carpenter v. contract); cause promise to retain employer’s tion 936 n. 6 F.Supp. Excelsior long as his so employee for (statement (E.D.Mich.1987) to a “satisfactory” give rise does long your “as work employed would be high contract. “just cause” not establish satisfactory” does “just distinguished specifically contract). con- “satisfaction” contracts cause” promise constituted the instant Since Toussaint, N.W.2d at 895-96. tracts. contract, re judicial only a “satisfaction” Moreover, noted that an decision employer’s termination view con- “satisfaction” discharge could case, extremely limited. was, in the instant employer was any time the tract Farms, 279 Lynas v. Maxwell e.g., employ- with “good faith” dissatisfied (1937) (in 315, 684, 317 273 N.W. Id. behavior. performance or ee’s contract, or not “whether “satisfaction” little can be there satisfactorily performed the instant In the services were out, made Pepsi’s that defend promises doubt to be determined question awas Ac- v. Chris most, contract. jury”); Brown only a “satisfaction” by the ant and not testimony, 95, Ha- Inc., Son, own cording plaintiff’s Nelsen & employ- (Diggs’) (1968) (reaffirming his Diggs told 819-20 slam per- long your as Lynas); Schroeder “as would continue set forth ment rule Moreover, F.Supp. satisfactory.” Corp., Hudson Dayton is formance on other “satis- (E.D.Mich.) contract as a interpreted the n. modified that, (E.D.Mich.1978) “I F.Supp. testified He grounds, contract. faction” secure, as my job (same). mean took my job satisfactorily.” long performed as I Toussaint, Michigan court has In “they found that itself Ly- as such vitality of cases affirmed with a contract [Pepsi] did establish “just cause” in a nas. It has decided discharged not be and that man review of the “there must be some contract long his violation is contract if the cause decision employer’s satisfactory.” satisfaction from the distinguished to be Michigan deci- The dictate of contract.” promises, similar involving cases review judicial clearly mandates sions prom- that such held Michigan courts have In the case at Sax. and bar, explicit than lifetime even more case 1. The instant employment for no promised Diggs was employee in because and Sax Schmand therefore, and, contract specific duration employment for promised cases those "pure satisfaction” contract. was a year in Schmand period of specified time—one of the substance of an employer’s ing decision employees only for might reasons that was not in interpreting available a “satis- imply “just cause” did “just not create Instead, faction” judicial contract. review contract). cause” Nor was there evidence was limited determining whether the in the record from which it could be in- employer subjective good acted faith ferred Diggs’ performance evaluations or discharged reasonableness when it predicated were proce- standards or employee. Toussaint, 292 N.W.2d at Cf. dures that objective were not and fair. All 896 (distinguishing “satisfaction” contract available evidence was to contrary only good faith possible review is supported the conclusion perform- that his “just contract). cause” See also ratings ance were “fairly and objectively” Schmand, (satisfaction 140 N.W. at 999 assigned. employer subjective refers to satisfaction Nor promise can a objective fair and defendant); Isbell v. Anderson Car- evaluation be derived from the mere exist Co., nage 136 N.W. ence of an system. evaluation It is well-es (1912) (in 460-61 contract, “satisfaction” tablished guarantees that Toussaint do not dissatisfaction of “purely arise from employer’s mere use of for personal matter”); Sax, 84 N.W. at 316 mal appraisal systems. See, (“the for, justice of, reasons the defend- e.g., Kay v. United Technologies Corp., ant’s satisfaction inquired into”); cannot be 757 F.2d 100 Cir.1985) (formal per Schroeder, F.Supp. (same). at 916 n. 3 formance system evaluation did not consti The district court and majority tute a just contract); cause disregarded this entire line Rouse Pepsi-Cola Metropolitan Bot judicial precedent applied to “satisfaction” Co., tling (E.D.Mich.1985 F.Supp. ) cases and sponte have elected to sua inter- (holding Pepsi’s plan evaluation identi pose an issue has not been raised cal to the one at issue in this case did not imposed and has “implicit duty just create a contract); cause Copeland v. part to make the Pepsi-Cola Metropolitan Bottling [performance] rating objec- determinations 180-DT, No. (E.D.Mich. 84-CV-l slip op. tively fairly.” Appellee’s only charge April 1985) (Pepsi plan, evaluation com against Pepsi has been that it entered into bined promise with oral had a and breached a contract to retain him so future with the company, insufficient to long as his performance rating was “com- contract). create mendable” or Dabrow better. “just Absent Cf. ski, 815 F.2d at 1080-81 (company’s cause” policy, termination written the record failed policy making to of any “objective” disclose standard selection deci reviewing performance sions did not employees of constitute an appellant implied that employ required contract). implement to ment preliminary to discharge of an employee. Plaintiff’s appellee’s Accordingly, attempts to dis- sole self-serving testimony concerning the tinguish Pepsi’s promise from a “satisfac- evaluation system was as follows: tion” contract unpersuasive. are He besides, said: every manag- [Haslam] plaintiff Even if proved had a “just got er I’ve here has been rated commend- contract, cause” a review of the record is able, you know, appraisals on all the they convincing Pepsi possessed that “just received you so don’t anything have to cause” for discharge Diggs of and had worry about. not purported breached the contract. The merely statement attested to a histori cal every fact—that manager Because before the district court’s conclusions had been concerning rated as “commendable.” “just Ha- the issue of cause” are slam’s past of description practice did not inconclusive and because the trial court had “just create a cause” contract. Henry erroneously shifted the of proving burden Cf. Hosp. v. Health U, Serv. “just Credit 164 cause” termination to the defendant Mich.App. 90, 338, (Mich. 416 N.W.Sd 340 contrary to pronouncements this circuit’s App.1987) (past practice of in fir- Taylor v. Corp., General Motors 826 “a placing of effect the anomalous have with issue Cir.1987), I take 452, 456 of accused employers burden lighter The analysis. court’s faced employers than discrimination racial that: concluded court Id. at discharge claims.” wrongful with issue to the respect with evidence The correctly ob- also The Duke plain- conflicting. The performance of is counterintuitive rule “such that served objective a fair that proven has tiff of the rela- light sense little makes performance his actual of evaluation has tried law protections greater tively substand- better been have would discrimi- of race alleged victims proven provide to the defendant Neither ard. substandard. nation.” cus- defendant’s complaints The with consistent in Duke rule The concern legitimate tomers were Jessop, v. in Johnson forth rule set clear, how- no means byisIt defendant. (1952). 501, 51 N.W.2d jus- performance plaintiff’s ever, decid- specifically Court Supreme Michigan satisfactory or His complaints. tified bur- ultimate had the plaintiff ed tak- years for several better con- prove to proof of den per- fact that together with en plaintiff’s tract offer of him an earned had formance in- had plaintiff Only after contract. manager regional sales to promotion shift the burden proof would such troduced de- favor. in his weighs Coldwater v. Saari also Id. See defendant. this proof burden has the fendant Assoc., Mich. & Dates George C. East Jor- City v. Rasch issue. See (same); v. (1945) Rasch 121, 123 N.W.2d N.W.2d Mich.App. [367 dan, 141 Mich.App. Jordan, 141 City East this meet failed It has (1985). 856] In the (same). 856, 858 burden. per- prove his failed case instant Michigan majority with accordingly, the agree I contract; formance area precedent legal shifted to never forward going burden weight of however, the clear;” “entirely Pepsi. pronouncements judicial recent analysis Burdine Application ultimately proof burden directs the decision with comports cases plaintiff with remains Corp., v. McFadden Obey Duke discharge. wrongful prove 292, 296-97 776-79, Hosp., 668 Inc., Div. Pfizer, of Pfizer (1985)(ap denied, 422 Mich. (1984), lv. (E.D.Mich.1987), 1031, 1040 F.Supp. ulti plaintiff instruction proving the defend decided specifically step and every proof at burden mate forth to come the burden ant bears entitled defendant holding that Fol “just cause.” evidence” only “some be verdict notwithstanding judgment Commu Dept. rule of Texas lowing the lack prove failed cause 248, 101 Burdine, 450 U.S. nity Affairs v. State Ross termination). Cf. Duke (1981),the 1089, 67 L.Ed.2d S.Ct. 781, 785-86 F.Supp. Co., 676 Ins. Farm intro the after decided court ultimate to shift (refusing (E.D.Mich.1987) cause,” the “just evidence some duces persuasion burden who the shifts back burden employer). 668 “just cause.” lack prove must Sixth the noted Finally, 1040. should F.Supp. Corp., Motors v. General Taylor in Circuit noted, Burdine the court Duke theAs Michi- the decided 456, has F.2d 826 used analysis proof shifting burden shift- the Burdine apply would gan courts con- discrimination variety of discharge cases.2 retaliatory analysis ing urges majority rule texts. employment discrimina- in on Burdine based Michigan Court on relied Taylor court 2. The Corp., 119 Uniroyal case) Clarke and Teledyne Conti- tion Bogue v. Appeals decisions (Burdine (1982) 372 N.W.2d Mich.App. 327 Motors, nental jury instructions (sanctioning use (1984) This court has also recently decided that denced by the escalating number Pepsi persuasion burden of in a race discrimi- customer complaints registered against nation action under Michigan’s Elliott-Lar- by him Pepsi’s biggest volume accounts. Act, sen Mich.Comp.Laws Ann. Assuming arguendo Pepsi had the 37.2202(1), “rests at § all times with the duty of “fairly and objectively” rating ap- plaintiff.” Lewis v. Sears Roebuck & pellee’s performance that has been errone- Cir.1988). While the ously imposed by court, the district appeal instant does not involve a claim of record clearly disclosed that Pepsi dis- retaliation discrimination, or the majority charged duty. its As early September, as presents why no reason 1982, Pepsi rated the plaintiff “com- as courts would accord an employer pro- more mendable minus.” He was counseled tection retaliation cases involving impor- Beattie, his immediate supervisor, to im- statutory tant rights than implied con- prove his to no avail. Plain- tract cases such as the one at bar. tiff was also rated below “commendable” short, the weight Michigan and August just before he was termi- Sixth authority Circuit supports appli- nated. The evidence also reflected that cation of the Burdine shifting burden Diggs’ inability to meet assigned his sales analysis. Pepsi After introduced “some ev- quotas was cascading. just cause, idence” of the burden shifted The lower prove back did not find a preponderance that these evaluations unjustified. were Instead, evidence elements of his case he conceded failed to do. As major numerous district court cus- tomers majority complained conceded, plaintiff about proven has not complaints those absence of “just were “a legitimate cause.” Accordingly, his action concern to the should have defendant.”4 The court re- dismissed. markably elected to disregard com- those plaints and instead based ruling on the My decision would be no different even if fact that Diggs’ past performance was sat- proof burden of placed were Pepsi. isfactory or better. However, purport- Regardless Pepsi’s burden, it is clear ed contract was to retain Diggs only Pepsi so proved just cause for the dis- long as he continued in charge Diggs.3 into the future to maintain a commendable “Just cause” must be defined with refer- performance rating. ence to the question. contract in Kay, F.2d at (citing uncontroverted testimony Valentine v. Gener- disclosed al Credit, Inc., Pepsi's American highly competitive business is (extent anchored in of customer service and satisfac- obligation is based agreement tion and that one of the district manager’s parties)). In the case bar, primary purported duties promote was to and main- contract was merely to employ Diggs tain the company’s so goodwill and reputation long as “satisfactory” its customers. Given the lower long achieved court’s “commendable” conclusions that Diggs pro- failed to ratings or better. Diggs failed to achieve mote and goodwill maintain with Pepsi’s required performance ratings as evi- largest customers, it was clear that analysis applied brought to claim under Michi- refusing to direct finding a verdict there was gan Employment Fair Act). Practices good plaintiffs cause for discharge). Although majority anchors its decision It is Pepsi's uncontroverted that largest three solely on proposition that the trier of fact Diggs’ customers in territory each complained must decide the "just cause," existence of Michi- Diggs’ poor about gan courts service. have not The district court hesitated jury to reverse declined verdicts finding to make a as to circumstances whether those where the produce complaints failed to justified were evidence of but weight said sufficient the com- justify to plaints submission of “just “probably were part justified issue of in cause” and jury for probably E.g., totally consideration. Obey, justified.” not 360 N.W.2d at (holding 297 that the trial court erred

935 (“Per- (D.C.Cir.1973) 1115, 1124-25 F.2d per- 1983 August, and 1982 September, im- more life is business facet of haps no based and were “fair” ratings formance place public company’s portant complaints (the customer facts “objective” judicial notice may take ... we quotas). estimation assigned sales meet and failure to achieve proper desire employer’s an of cus consequence no It was re- Reasonable acceptance_ favorable have related not may complaints tomer policy in furtherance quirements duties. job plaintiffs responsibili- managerial aspect of an are performance, plaintiffs Regardless ty.”) complaints customer mere existence ter- decision short, employer’s continued made legitimate business an cases was In such minate impossible. economically repu- Pepsi’s preserve an em designed to retain required decision not is employer Builders, customer curtail and goodwill and v. Jasinski tation Friske ployee. Cf. find that 44 would Accordingly, I N.W2d 402 complaints. Inc., 156 (dis discharge for denied, “just cause” proved Pepsi (1986),lv. of a constitutes existence proved the reasons Diggs had economic if for charge even hold cause;” to “sufficient for contract. cause” “just termination ec unworkable impose an would otherwise to make prerogative employer’s “[T]he v. Parker employers); burden onomic about judgments good faith independent, F.Supp. Co., 683 Crystal Salt Diamond enter- free in our important employees jury “The (same). (W.D.Mich.1988) Blades, Employment system.” prise of the judgment business probe not to Limiting On Freedom: Individual v.Will The Lewis, 845 F.2d employer.” Employment Exercise Abusive deci termination employer’s an fact (1967). 1404, 1428 Power, 67 Colum.L.Rev. judgment business on sound is based sion recognized this have courts Michigan termi employer’s to indicate tends carefully have and principle fundamental at 18. reasonable. decision nation de- extending the Toussaint refrained not have courts Although one such cover situations cision of whether question specific decided dis- majority’s I believe Because bar. constitute complaints customer applicable with comport not does position jurisdic law, other courts a matter articu- reasons and for Michigan law busi employer’s decided tions dissent. respectfully herein, must I lated substan must be accorded judgment ness Pepsi liable find not I Although do preserve attempts to when tial deference judg reverse would damages any repu business goodwill company’s and dismiss trial court ment Flooring Div. v. Resilient tation, Cox concur I complaint, appellee’s 726, 732 F.Supp. Corp., Congoleum prejudg disposition Engel’s Judge shown (good cause (C.D.Cal.1986) opin Merritt’s Judge issue. interest ment com deny that did not where Anodco American argues ion by the him against lodged were plaints F.Supp. Co., 572 Metals Reynolds distributors; could “[o]ne company’s (6th F.2d aff'd, (W.D.Mich.1983), these if fairly evaluate I, conclusion inapposite Cir.1984)is —a Kinoshita ignored”). were complaints Cf. accept cannot with however, disagree Inc., Airlines, v. Canadian-Pacific future requires Anodco, which light repu Cir.1986) (harm to F.2d As lump sum. aas be treated damages to ground legitimate tation decision indicates, the Anodco Engel Judge Safeway termination); Fountain “interest prejudgment clearly states (9th Cir. 753, 756 Inc., Stores, entire based be calculated shall reg those enforce 1977)(“an employer appor award, should which damage im to extend serve which ... ulations add (emphasis F.Supp. at tioned.” employer] which [the customers age estab comports analysis ed). This business”); Fa to its is beneficial believes circuit, di- precedent lished Co., 481 Register Cash v. National gan rects that prejudgment interest should be calculated total amount Diggs’

wages, rather than on value.

The Anodco opinion clearly addressed change issue, the rate but also the

issue of whether a damage award should apportioned over the period time be filing

tween the of the complaint and the

entry of judgment. The court rejected “ap

portionment” in both contexts. F.Supp. aff'd, 743 F.2d 417

Cir.1983). Accordingly, I concur with

Judge Engel’s disposition of this issue.

Accordingly, I dissent I, from Parts II and III of the majority’s opinion, con- but cur Parts IV and V of opinion, in-

cluding Judge Engel’s disposition of the

prejudgment interest issue. CONSTRUCTORS,

FLUOR

INC., Petitioner,

OCCUPATIONAL SAFETY AND

HEALTH REVIEW COMMISSION Secretary Labor, Respondents.

No. 87-4029.

United States Court Appeals,

Sixth Circuit.

Argued Oct.

Decided Nov.

Case Details

Case Name: Sidney Diggs, IV v. Pepsi-Cola Metropolitan Bottling Co., Inc.

Court Name: Court of Appeals for the Sixth Circuit

Date Published: Jan 26, 1989

Citation: 861 F.2d 914

Docket Number: 86-1480

Court Abbreviation: 6th Cir.