b. Discriminatory Termination
In Hayes the Third Circuit also held that a racially motivated discharge is not actionable under Section 1981.
940 F.2d at 56. In Hayes the plaintiff, an African-American, was an employee of the defendant for more than nineteen years. Id. at 55. He was discharged by the defendant for lying to his supervisor. Id. Thereafter the plaintiff commenced suit for wrongful termination on the basis of race and brought claims under both Section 1981 and Title VII. Id. The district court granted the defendant's Rule 12(b)6 motion in part. Later granted the defendant's motion for summary judgment under the standards set forth in Patterson that the conduct alleged was post formation conduct not actionable under Section 1981. The plaintiff appealed the discriminatory discharge issue and the Circuit affirmed the district court's holding. The Circuit explained that under Patterson, "job termination is clearly 'post-formation conduct' implicating performance of an existing employment contract, but not formation of a contract." Id. (quoting Patterson, 491 U.S. at 179).
In this case, Bermingham refers to the 15 July 1991 change in his position from president to Executive Vice President as a discharge, Amended Complaint, P 189, constructive termination, id., P 175-76, termination, id., P 222, and an assignment.
Id., PP 174-178. Significantly, Bermingham does not allege he is in fact no longer employed by Sony Corporation. It appears he remains employed by Sony Corporation in the capacity of Executive Vice President with the same salary and benefits he enjoyed in his prior position. The change in his position, regardless of what it is termed, constitutes post-formation conduct which is not actionable under Section 1981. See Patterson, 491 U.S. at 179.
c. Right to Enforce Contracts
Bermingham's allegations also fail to state a claim under Section 1981 with regard to his arguments that he was denied the right to enforce his employment contract rights. Being denied access to the procedures set forth in the Employee Guidelines concerns post-formation contractual rights. The alleged denial of access to the procedures set forth in the Employment Guidelines may be a breach of his employment contract; such conduct "is precisely what the language of [Section] 1981 does not cover." Patterson 491 U.S. at 183. These allegations, accordingly, relate to post-contract formation conduct and are not actionable under Section 1981.
Discriminatory discharges, discriminatory breaches of employment contracts, discriminatory working conditions and discriminatory harassment implicate "performance of established contract obligations" and involved post-formation discrimination issues. Patterson, 491 U.S. at 177; see Hayes, 940 F.2d at 56. Section 1981 does not extend relief to post-formation contract-related claims and will not support claims of employment discrimination under Section 1981.
d. Failure to Promote
Patterson does not automatically preclude claims of discriminatory failure to promote. None the less, Bermingham fails to allege facts to support a failure to promote claim. The Supreme Court articulated the following factors that a plaintiff needs to demonstrate to show discriminatory failure to promote: (1) that he applied for and (2) was qualified for (3) an available position for which (4) he was rejected, and (5) that after he was rejected the employer either continued to seek applicants for the position, or, filled the position. Id. at 186-87. A plaintiff must also demonstrate that the position sought would rise to the level of a new and distinct relationship between the employer and employee as a result of the promotion. The Patterson Court stated:
The question whether a promotion claim is actionable under [Section] 1981 depends upon whether the nature of the change in position was such that it involved the opportunity to enter into a new contract with the employer. If so, then the employer's refusal to enter the new contract is actionable under [Section] 1981.
Id. at 185. "Where the promotion rises to the level of an opportunity for a new and distinct relation between the employee and the employer . . . such a claim [is] actionable under [Section] 1981." Id.
The Third Circuit in Bennun, 941 F.2d at 169, applied the Supreme Court's analysis in Patterson and explained when an alleged promotion constitutes a new contract which would be actionable under Section 1981.
In Bennun, a Hispanic tenured associate professor, when denied a promotion to full professor, commenced an action against the defendant for violation of Section 1981 for failure to promote and for violation of Title VII for discrimination on the basis of national origin. The district court ruled in favor of the plaintiff on both claims. The defendant appealed and the Circuit reversed the district court's holding with respect to the Section 1981 failure to promote claim. The Circuit determined that the plaintiff's failure to promote claim was lacking because the position sought did not rise to the level of a new contractual relationship between the plaintiff and defendant.
The factors the Circuit considered when making its determination of the viability of the allegation of the creation of the new contractual relationship were whether fundamental changes occurred in the rights, duties, responsibilities and compensation between the position maintained and the position sought. Id. at 169; see also James, 737 F. Supp. at 1423 .
In Bennun, the plaintiff alleged that the change in his occupation from a tenured assistant professor to a full professor satisfied the requirements for a new contractual relationship. The Circuit determined such a change in position did not create a new contract within the meaning of Patterson because there was no fundamental change in the plaintiff's position. In Bennun the position sought by the plaintiff did not substantially change the level of responsibility or the duties to which he would be required to engage. The Circuit determined that the sole new duty as a full professor would permit the plaintiff to evaluate the candidacy of others for the full professor status. The Circuit determined that the duties and responsibilities as a full professor did not rise to a fundamental change sufficient to qualify as a new contractual relationship with the defendant. Bennun, 941 F.2d at 170. Because the position did not rise to a level that created a fundamental change in the duties and responsibilities of the plaintiff, the failure to promote claim was not viable under Section 1981.
Here, Bermingham alleges the change in his position from President to Executive Vice President, in July 1991, constitutes a failure to promote claim actionable under Section 1981.
However, his allegations do not set forth the prima facie elements to support his claim. He does not allege that he applied for an available position for which he was rejected. On the contrary, his allegations demonstrate that he was moved to a different position and that Takagi assumed the responsibilities of Bermingham's prior position. Bermingham fails to set forth a claim under Section 1981.
Bermingham's allegations relate exclusively to conduct occurring after he was hired by Sony Corporation in 1982. Bermingham's ability to plead that Defendants' conduct is discriminatory, 'severe or pervasive,' does not state a claim under Section 1981 for refusing on a discriminatory basis to make a contract. See Patterson, 491 U.S. at 185. Count I of the Amended Complaint is dismissed for failure to state a claim upon which relief can be granted.
C. State Law Claims: Counts II Through VIII
The Defendants argue the remaining state law claims articulated in Count II through VIII should be dismissed for lack of supplemental (pendent) jurisdiction. Moving Brief at 23.
The state law claims in Counts II through VIII of the exhaustively detailed sixty-five page Amended Complaint are brought before this court through the assertion of supplemental jurisdiction. Supplemental jurisdiction enables federal courts to hear state law claims over which there is no independent basis of jurisdiction. 28 U.S.C. § 1367; Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 349, 98 L. Ed. 2d 720, 108 S. Ct. 614 (1988). Supplemental jurisdiction depends upon the existence of subject matter jurisdiction over other claims in the action. Pursuant to 28 U.S.C. § 1367, "district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy. . . ." 28 U.S.C. § 1367(a); see also Sinclair v. Soniform, Inc., 935 F.2d 599, 603 (3d Cir. 1991).
Section 1367(c) permits a court to decline to exercise supplemental jurisdiction when "the district court has dismissed all claims over which it has original jurisdiction." 28 U.S.C. § 1367(c)(3); see also Carnegie-Mellon, 484 U.S. at 350 ("when the federal-law claims have dropped out of the lawsuit in its early stages and only state-law claims remain, the federal court should decline the exercise of jurisdiction by dismissing the case without prejudice.") (footnote omitted); Fuentes v. South Hills Cardiology, 946 F.2d 196, 198 n.3 (3d Cir. 1991) (dismissal of "pendent state law claim" proper where federal claims dismissed for lack of subject matter jurisdiction).
As discussed, Count I has been dismissed with regard to the Section 1981 claims. As well, there is no basis for a Title VII claim. Because no other ground for supplemental jurisdiction is alleged,
supplemental jurisdiction will no longer be exercised in this case. United Mine Workers v. Gibbs, 383 U.S. 715, 725, 16 L. Ed. 2d 218, 86 S. Ct. 1130 (1966); 28 U.S.C. § 1367(c)(3). The state law claims as set forth in Counts II through VIII are dismissed.
For the reasons set forth above, the motion of the Defendants is granted and the Amended Complaint is dismissed.
Dated: 20 November 1992