Diaz v. Kraft Foods Global, Inc.

In the

United States Court of Appeals
For the Seventh Circuit

No. 10-3073

JOSE D IAZ, R AMON P EÑA, and A LBERTO R OBLES,

Plaintiffs-Appellants,
v.

K RAFT F OODS G LOBAL, INC.,
Defendant-Appellee.

Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 08 C 6814—Ronald A. Guzmán, Judge.

A RGUED F EBRUARY 23, 2011—D ECIDED A UGUST 8, 2011

Before K ANNE, W OOD , and S YKES, Circuit Judges.
W OOD , Circuit Judge. After Kraft Foods announced a
plan in 2008 to outsource many positions at its Tech
Center located in Glenview, Illinois, it arranged for the
new company to accept applications from Kraft em-
ployees who were about to lose their jobs. This case
arises from the fallout of that decision. Two of the
targeted employees, Jose Diaz and Ramon Peña, chose to
2 No. 10-3073

apply for positions with Kraft that opened up around
that time, rather than pursuing employment with the
new vendor. When Kraft did not hire either one, their
employment with the company terminated. A third
employee, Alberto Robles, stayed with Kraft, but he
believes that since 2001 Kraft has paid him less than
he deserves because it has never promoted him from
a “grade 2” to a “grade 3” position. The plaintiffs
attribute these adverse employment actions to their
supervisor, Peter Michalec, who they say is biased
against Hispanics. The district court concluded that the
plaintiffs failed to create a triable issue on whether
racial animus motivated any of Kraft’s actions and
granted summary judgment for the defendant. We
find that the district court improperly discounted the
plaintiffs’ strongest evidence and erred in its legal
analysis of Diaz and Peña’s failure-to-hire claims, but
that it properly granted summary judgment on Robles’s
disparate pay claim. Therefore, we reverse in part and
affirm in part.

I
Kraft prevailed on summary judgment, and so we
recount the facts in the light most favorable to the
plaintiffs while noting disputes where relevant. Diaz’s
employment at Kraft began in 1990, and for nine
years he was assigned to the sanitation and janitorial de-
partments. In 1999, Diaz transferred to the shipping
department, where he worked until he lost his job
on November 15, 2008. Peña began in Kraft’s shipping
No. 10-3073 3

department as a part-time employee in 2000. In 2006,
he became a full-time employee, staying in the position
until he lost his job on the same day as Diaz. Peña and
Diaz were hourly employees throughout their tenure
with Kraft. Robles worked in the sanitation and janitorial
departments as an hourly employee from 1987 to 2001.
In June 2001, he became a senior technician in the
support services department; this was the salaried posi-
tion that he held at the time of this appeal.
In the proceedings below, two additional plaintiffs,
Betty Flores and Robert Vela, were parties to this law-
suit. Flores defeated Kraft’s motion for summary judg-
ment and eventually settled her claim. Vela has not
appealed. As will soon become clear, the evidence
Flores marshaled to defeat Kraft’s summary judgment
motion remains relevant to this case.
The conduct of one Kraft supervisor, Peter Michalec,
gives rise to this lawsuit. Michalec became the shipping
supervisor in 2000, and starting in 2005 he also super-
vised the support services department. In 2008, once
Kraft outsourced the shipping department where Peña
and Diaz worked, Michalec became the supervisor of
Pilot Plant Services, an entity comprised of the building
operations group, the sanitation department, and the
support services department. Michalec was in charge
of hiring for the positions Diaz and Peña sought, and
he had the authority to increase Robles’s pay.
The plaintiffs complain that Michalec would send
Flores, Diaz, and Peña outside to scrub parking lots, clean
sewers, and tend to other disliked tasks “as often as
4 No. 10-3073

possible” during the cold winter months, but he did
not assign non-Hispanic employees to similar labors.
They also assert that Michalec followed the three around
during the day, timing their breaks and scrutinizing their
work, without subjecting non-Hispanic workers to the
same treatment. Additionally, the plaintiffs identify
statements made by Michalec over the years that in their
view illustrate his animus against Hispanics. Robles
testified that Michalec said in 1999 that he got his job
because he (Michalec) was white; Michalec called Robles
a “gold-digger” when he asked for a raise; Michalec
said “I’m white and I’m right”; and he yelled, “Get the
hell out of my office. Go die somewhere else,” when
Robles was having a heart attack in 2005. Carlos Casalan,
another former employee, asserts that “on numerous
occasions” Michalec said that he did not like Spanish
people and referred to Hispanics as “dummies” and
“stupid.”
The real trouble, however, surfaced when Diaz and
Peña tried to get different jobs at Kraft around the time
of the outsourcing. Kraft has a posting process to fill
available jobs that usually proceeds as follows. A
manager initiates the search by sending a potential job
posting to the human resources department, which,
after approval, sends the posting to the talent acquisi-
tion department. Talent acquisition puts the posting on
Kraft’s in-house website, distributes it internally on
paper, or takes both actions. On occasion, Kraft also
posts a sign-up sheet to permit interested employees to
indicate their interest in a position.
No. 10-3073 5

In July 2008, Kraft posted a sign-up sheet for a single
senior technician position. Diaz, Peña, and two other
Hispanic employees, along with two African-American
employees, signed up to be considered for the positions.
Peña also sent an application and his resume to human
resources. Shortly after the sign-up sheet was posted,
somebody (nobody knows who) crossed off the names
of the two African-American employees, leaving
only four Hispanic employees in the applicant pool.
Kraft then decided to freeze the hiring for that position.
According to Kraft, the company knew that out-
sourcing was on the horizon and wanted to wait until
the announcement was made so that more employees
could apply for the position. In the plaintiffs’ view, how-
ever, once Michalec saw that only Hispanics were com-
peting for the position, he decided to halt the hiring.
In September 2008, once Kraft’s plan for outsourcing
was known to all, two senior technician and five
sanitation positions became available. Kraft posted a
notice to announce these vacancies, but it did not
permit employees to indicate interest in the positions
by putting their names on a sign-up sheet. Instead,
Michalec created a list of interested employees and hired
from that pool of candidates. Diaz and Peña accuse
Michalec of refusing to let them apply for the senior
technician positions, thereby eliminating the possibility
that they would be hired. Kraft disputes this. It
concedes that Diaz and Peña were not considered for
the technician positions, but it asserts that the two
men simply failed to apply. Diaz and Peña insist that
this is implausible, since only two months earlier they
6 No. 10-3073

both signed up to apply for an almost identical position,
and by September it was apparent that if they did not
acquire another position with Kraft their jobs would be
eliminated as a consequence of the outsourcing. They
maintain that they complained to human resources that
they were being shut out of the application process,
but once they did so Kraft quickly filled at least one of
the positions before the application period ended and
before Diaz and Peña were able to get their names into
the applicant pool.
Kraft ultimately hired Curtis Ward and Robert Meyers,
two non-Hispanics, for the senior technician positions.
Kraft concedes that none of the applicants for the
senior technician positions met all of the qualifications
on the posting, but it says that Ward and Meyers were
the best match for the position because of their strong
mechanical skills. The plaintiffs counter that the
strength of Ward and Meyers’s mechanical skills is ir-
relevant, since their complaint is that they were not
even permitted to apply for the positions.
As for the sanitation positions, both Diaz and Peña were
on the list of applicants compiled by Michalec. Nine
employees applied for the five positions: four Hispanics,
two Caucasians, and two African-Americans. Kraft
says that all of the applicants were sufficiently qualified
for the job, so it hired according to seniority. Based on
that metric, Diaz and Peña were not selected, but two
Hispanic employees with more seniority, including
Betty Flores, were chosen. Diaz and Peña concede that
they were lower on the seniority scale than the employees
No. 10-3073 7

hired, but they assert that they were more qualified and
should have been hired on that basis. They emphasize
that the guidelines set out in Kraft’s internal hiring
policy do not list seniority as a variable in hiring
decisions; Kraft responds that the policy does not
prohibit the company from using seniority as a factor.
In October 2008, Diaz and Peña complained to human
resources and other supervisors that they were not hired
for either of the positions because of their race. That
month, Diaz filed a charge of discrimination with the
EEOC, and Peña followed suit in November.
Betty Flores, who is not a party in this appeal, com-
plained in the proceedings below that, although she
was hired for a sanitation position, Michalec discrim-
inatorily assigned her to a night-shift position. As evi-
dence, she pointed to a conversation she had with
Michalec shortly after he made the hiring decisions.
Flores described the conversation as follows:
I told [Michalec] that I would prefer to remain on
days because I was the first woman that had worked
for sanitation . . . . [A]nd he told me there was
nothing he could do . . . because Matt Simeon[, who
received one of the day-shift positions,] is his best
friend. He’s white just like him, and he had a
family to take care [of].
Flores also said that when she confronted Michalec
about his discrimination against Latinos, he said that
he did not discriminate because Latinos are a majority,
not a minority. Flores does not recall when Michalec
made this remark.
8 No. 10-3073

Robles raises a disparate pay claim. He says that when
he was hired as a senior technician in the support
services department in 2001, he was categorized as a
salary grade 2 employee, even though the job posting
he submitted his application for advertised a salary
grade 3 position. According to Robles, Kraft told him
that once he acquired certain skills, his salary would be
increased to the grade 3 level. He quickly gained the
skills necessary to earn at the higher salary level, but
Kraft never increased his salary. Robles also claims that
Ward and Meyers, the two men hired for the senior
technician positions, are paid more than he is, even
though he is supposed to train them for the job.
Kraft explains that salary grades are tied to specific
positions; for Robles to get paid at a higher rate his posi-
tion would have to be reclassified or he would have
to apply for a vacant grade 3 position. Regrading a posi-
tion, Kraft argues, is uncommon, and no grade 3 posi-
tions have become available since 2005. As for the
claim that Ward and Meyers are paid at higher salary
grades, Kraft says that it has a “redlining policy” that
permits employees who transfer from one position
to another to retain their previous salary, if it is higher,
for two years. It is undisputed that Ward and Meyers
were at higher salary grades before their transfers.
Robles filed a charge with the EEOC in June 2008
claiming that Kraft paid him lower wages than non-
Hispanic employees. This lawsuit followed.
No. 10-3073 9

II
A
The plaintiffs filed suit on November 26, 2008,
asserting violations of their rights under Title VII of the
Civil Rights Act of 1964, 42 U.S.C. §§ 2000 et seq., and 42
U.S.C. § 1981. They pursue only their Title VII claims
on appeal. The district court granted summary judg-
ment for Kraft, and so we review the decision de novo,
taking all facts in the light most favorable to the plain-
tiffs. See Chaney v. Plainfield Healthcare Ctr., 612 F.3d 908,
912 (7th Cir. 2010).
A plaintiff can prove discrimination under Title VII
by using either the direct or the indirect method of proof.
Darchak v. City of Chicago Bd. of Educ., 580 F.3d 622, 630
(7th Cir. 2009). Under the direct method, the plaintiff
must produce either direct or circumstantial evidence
that would permit a jury to infer that discrimination
motivated an adverse employment action. Hasan v. Foley
& Lardner LLP, 552 F.3d 520, 527 (7th Cir. 2008). Direct
evidence is something close to an explicit admission by
the employer that a particular decision was motivated
by discrimination; this type of evidence is rare, but it
“uniquely reveals” the employer’s intent to discriminate.
See Rudin v. Lincoln Land Cmty. Coll., 420 F.3d 712, 720
(7th Cir. 2005). More common is circumstantial evidence,
which “suggests discrimination albeit through a longer
chain of inferences.” Hasan, 552 F.3d at 527 (internal
citation omitted). A plaintiff can survive summary judg-
ment by producing either type of evidence as long as
it creates a triable issue on whether discrimination moti-
10 No. 10-3073

vated the employment action. Our cases point to
three categories of circumstantial evidence: (1) ambig-
uous statements or behavior towards other employees in
the protected group; (2) evidence, statistical or other-
wise, that similarly situated employees outside of the
protected group systematically receive better treatment;
and (3) evidence that the employer offered a pretextual
reason for an adverse employment action. Darchak, 580
F.3d at 631. A plaintiff need not produce evidence in
each category to survive summary judgment. See id.

B
We begin with Diaz and Peña’s claim that Kraft failed
to hire them for either the sanitation or senior technician
positions. They are relying exclusively on the direct
method we have just described. We recognize that each
plaintiff has a discrete claim in relation to each position,
but since the dispositive issue for each is the same—
did ethnic animus against Hispanics motivate Michalec
to hire other employees instead of Diaz and Peña—we
may examine the claims together. The plaintiffs con-
tend that they have produced some evidence that
falls into each category of circumstantial evidence
which, taken together, would permit a jury to find in
their favor.
First, the plaintiffs contend that Michalec exhibited
his bias against Hispanics by assigning Flores, Diaz, and
Peña to disfavored tasks such as scrubbing parking
lots and cleaning sewers outside during the winter.
This raises an inference of discrimination, the plaintiffs
No. 10-3073 11

assert, because Michalec did not assign non-Hispanic
employees to these duties. Based on the record, the district
court concluded that these facts could suggest bias. Yet
the court backed off from this conclusion because Raul
Fernandez, another Hispanic employee, was not assigned
to the same unwanted tasks. The court reasoned that
ultimately the evidence did not support an inference
of discrimination because at least one Hispanic employee
was not discriminated against in the same way.
We reject this line of analysis. Title VII would have
little force if an employer could defeat a claim of discrim-
ination by treating a single member of the protected
class in accordance with the law. Suppose the district
court’s view carried the day: a female employee
suffering from discrimination on the basis of her sex
would have to establish that her employer discriminated
against all women in the workplace to assert a sex dis-
crimination claim. That, sensibly, is not how Title VII
operates. Instead, “[t]he principal focus of the statute is
the protection of the individual employee, rather than
the protection of the minority group as a whole.” Connecti-
cut v. Teal, 457 U.S. 440, 453-54 (1982); City of Los
Angeles, Dep’t of Water and Power v. Manhart, 435 U.S. 702,
708-09 (1978) (recognizing that fairness to the class of
women employees does not excuse discrimination
against an individual female employee). Discrimination
against one Hispanic employee violates the statute, no
matter how well another Hispanic employee is treated.
See Brown v. Henderson, 257 F.3d 246, 252 (2d Cir. 2001).
We agree with the plaintiffs that there is no token excep-
tion to anti-discrimination law. See Teal, 457 U.S. at 455
12 No. 10-3073

(“Congress never intended to give an employer license
to discriminate against some employees on the basis of
race or sex merely because he favorably treats other
members of the employees’ group.”).
The source of the district court’s error may have been
a mistaken decision to import an inverted version of the
“similarly situated employee” factor from the indirect
method of proof established in McDonnell Douglas Corp.
v. Green, 411 U.S. 792 (1973). Under that framework, a
plaintiff can raise the inference of discrimination by
identifying a similarly situated employee outside the
protected class who was treated more favorably by the
employer. See, e.g., Radue v. Kimberly-Clark Corp., 219
F.3d 612 (7th Cir. 2000). There is no “similarly situated
employee” analysis available to the employer to defeat a
plaintiff’s claim. Instead, in an indirect-proof case, to
shift the burden back to the plaintiff the employer
must articulate a non-discriminatory reason to explain
the challenged conduct. One thing is clear under this
framework: the employer cannot satisfy its burden by
identifying a person within the protected class who was
not similarly discriminated against. And in any event,
Diaz and Peña are not even trying to use the burden-
shifting approach. Under the direct method, the fact
that Michalec treated another Hispanic worker well at
most might be a piece of evidence tending to negate
discrimination with respect to Diaz and Peña, but that
is the precise question of intent that a jury must resolve.
See Darchak, 580 F.3d at 632 (observing that when an
employer hires someone from the protected class to fill
the position the plaintiff was not awarded, the jury
No. 10-3073 13

must decide whether discriminatory intent motivated
the hiring decision). We need not decide whether
evidence that Michalec assigned Hispanic workers to
disfavored tasks is enough by itself to enable the
plaintiffs to survive summary judgment, since there is
more.
The plaintiffs also support their claim by reference to
Michalec’s role in the irregular hiring processes for
the sanitation and senior technician positions. In Septem-
ber 2008, it was Michalec who created the list of
candidates for those positions; plaintiffs contend that he
refused to put their names on that list. The court found
that the record supported the plaintiffs’ assertion, but
concluded that this fact would have probative value
only “if [Michalec] did not consider any Hispanics for
the jobs.” For the reasons discussed above, this analysis
is misguided. We hold that the way that Michalec struc-
tured the hiring process for the technician positions
could raise an inference of discrimination. We note,
additionally, that Kraft’s assertion that even if Diaz
and Peña had been considered for the senior technician
positions, they would not have been hired because they
lacked sufficient mechanical skills, is beside the point.
Under the direct method of proof, the plaintiffs are not
required to rebut a defendant’s non-discriminatory
reason for the adverse employment action, as they
must under the indirect method. Kraft may, of course,
present its rationale to a jury to defeat the plaintiffs’
discrimination claim, but it is insufficient to quash it
at summary judgment. Thus, Diaz and Peña’s claim
regarding the senior technician positions should go
forward.
14 No. 10-3073

The district court continued down its mistaken path
when evaluating Diaz and Peña’s contention that
unlawful discrimination lay behind Kraft’s decision not
to hire them for the sanitation positions. The court again
agreed with the plaintiffs that the hiring process
deviated from the norm, but it concluded that the
process did not support an inference of bias because
four Hispanics were considered for the position and at
least one, Flores, was hired. This, too, overlooks the
fact that Diaz and Peña are raising individual disparate
treatment claims, not a broad-based pattern or practice
claim. In addition, the court failed properly to evaluate
the comment Michalec made to Flores, stating that
Matt Simeon received a day-shift sanitation position
because he was “white like Michalec.” As the district
court found, this statement, if credited by the jury, is
direct evidence that Michalec awarded the daytime
position to Simeon instead of Flores based on a racial
preference. On that basis alone, the court denied Kraft’s
motion for summary judgment on Flores’s claim. Taking
the perspective of Diaz and Peña’s cases, the court con-
cluded that the statement was only circumstantial
evidence that could be considered in conjunction with
other evidence to establish Michalec’s discriminatory
intent. As a general matter, that is correct. The problem
this time is that in the end the district court never
returned to consider the relevance of this evidence to
Diaz and Peña’s claim at all.
Instead, the court examined other evidence identified
by the plaintiffs of racially offensive comments made
by Michalec. The district court found that those state-
No. 10-3073 15

ments did not support an inference of bias because
they were not said around the time the hiring decisions
were made. We agree with the court that there must
be something (such as temporal proximity) to link the
racially inflected comments and the adverse employment
action before a jury should be permitted to infer that
discrimination motivated the action. See Darchak, 580
F.3d at 632 (noting “that three to four months between
a remark and an employment action is not so long as to
defeat the inference of causal nexus”). The court also
correctly found that other non-racial but rough state-
ments made by Michalec, such as telling Robles to get
out of his office while Robles was in the throes of a
heart attack, did not support an inference of discrim-
inatory intent.
But the irrelevance of those statements does not
undercut the force of the rest of the evidence, especially
Michalec’s statement (which we assume at this stage of
the case was made) that he awarded a day-shift sanita-
tion position to Simeon because of his race. Not only
could a jury infer that Simeon got a day-shift posi-
tion because he is white, as the district court concluded,
but it could also conclude that he got one of the five
positions for the same reason. There is enough evidence
here to create a question for the trier of fact whether
ethnic bias motivated Michalec’s decision not to hire
Diaz or Peña for the sanitation positions. Because we
conclude that both Diaz and Pena’s failure-to-hire
claims survive summary judgment when evaluated
under the direct method of proof, we need not address
the indirect method.
16 No. 10-3073

C
Robles’s case is another matter. His disparate pay
claim fails under either method of proof. The crux of his
argument is that Kraft hired him to a salary grade 2
position with promises for a promotion to a grade 3
position, but the promotion never materialized. As a
result, Robles contends, he is paid less than deserves. At
the outset, we note that the plaintiffs’ brief does not
clearly state whether Robles is pursuing a disparate pay
or a failure-to-promote claim. In his EEOC charge and
before the district court, Robles complained that Kraft
paid him lower wages than non-Hispanic employees.
We will evaluate Robles’s claim under the disparate
pay framework, but for the sake of completeness we
note that his claim would fare no better if evaluated as
a failure-to-promote claim.
Robles primarily relies on the evidence identified by
Diaz and Peña in support of his claim, but that is a mis-
take. Robles filed his EEOC charge in June 2008,
before Kraft announced the sanitation and senior techni-
cian vacancies. This means that the evidence supporting
an inference of discrimination in relation to the hiring
decisions in October and November of 2008 has no
bearing on Robles’s claim. See Atanus v. Perry, 520 F.3d
662, 671 (7th Cir. 2008) (“The focus under the direct
method of proof is . . . whether the evidence ‘points di-
rectly’ to a discriminatory reason for the employer’s
action.”). Once that evidence is out of the picture, there
is scant material remaining that “points directly” to
an inference that Michalec paid Robles less than other
No. 10-3073 17

workers because of ethnic discrimination. Robles says
that comments Michalec made to him, including calling
him a gold-digger and telling him to leave the office
while he was having a heart attack, evidence ethnic
animosity. We disagree. Calling someone a gold-digger
is offensive, and ordering someone suffering from a
heart attack to leave is utterly inexplicable, but neither
of these incidents establishes ethnic bias. The only re-
maining evidence pertains to the allegation that
Michalec assigned Flores, Diaz, and Peña harsher duties,
cleaning parking lots and sewers, than non-Hispanic
employees. This, standing alone, is insufficient to create
a triable issue on the question whether ethnic discrim-
ination motivated Michalec to pay Robles, who worked
in a different department, less than other employees.
Finally we note that the indirect method would not
resuscitate Robles’s claim. Robles has not identified a
similarly situated employee who received better treat-
ment. See Ford v. Minteq Shapes and Services, Inc., 587
F.3d 845, 848 (7th Cir. 2009). The only plausible can-
didates for that comparison are Ward and Meyers, the
two employees hired as senior technicians in 2008
(instead of Diaz and Peña). The sole fact that supports
a finding that Ward and Meyers are similarly situated
to Robles is that they are currently employed in the
same position. But that is not enough, since the
record shows that Ward and Meyers were getting paid
at higher salary grades because of Kraft’s “redlining
policy,” which permits employees who transfer into
a position graded at a lower salary level to continue to
earn the higher salary for two years. The existence of the
18 No. 10-3073

redlining policy demonstrates that Ward and Meyers
were not “subject to the same standards” and thus were
not similarly situated to Robles. See Radue, 219 F.3d at 618.
Absent a valid comparator, Robles cannot move past
summary judgment under the indirect method of proof.
Therefore, we A FFIRM the judgment of the district
court granting summary judgment on Robles’s claim
and R EVERSE the grant of summary judgment on Diaz
and Peña’s claims and R EMAND for further proceedings.

8-8-11