Kym McLean v. Patten Communities, Incorporated

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
 KYM MCLEAN,
Plaintiff-Appellant,
v.
PATTEN COMMUNITIES, INCORPORATED; No. 99-1167  PATTEN CORPORATION; BLUEGREEN
COMMUNITIES, INCORPORATED;
BLUEGREEN CORPORATION, a/k/a
Bluegreen Patten Corporation,
Defendants-Appellees. 
Appeal from the United States District Court
for the Eastern District of North Carolina, at Raleigh.
James C. Fox, Senior District Judge.
(CA-98-170-5F)
Argued: September 29, 2000
Decided: June 17, 2003
Before WIDENER, NIEMEYER, and TRAXLER, Circuit Judges.
Affirmed in part, vacated in part, and remanded with instructions.
Judge Widener wrote the opinion, in which Judge Niemeyer joined.
Judge Traxler wrote a concurring and dissenting opinion.
COUNSEL
ARGUED: Leto Copeley, PATTERSON, HARKAVY & LAW-
RENCE, L.L.P., Raleigh, North Carolina, for Appellant. Walter J.

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Kruger, III, FISHER & PHILLIPS, L.L.P., Atlanta, Georgia, for
Appellees. ON BRIEF: Melinda Lawrence, PATTERSON,
HARKAVY & LAWRENCE, L.L.P., Raleigh, North Carolina, for
Appellant. Kelly L. Kubes, FISHER & PHILLIPS, L.L.P., Atlanta,
Georgia, for Appellees.
OPINION
WIDENER, Circuit Judge:
Kym McLean appeals the district court’s grant of summary judg-
ment in her employment discrimination action under 42 U.S.C.
§ 1981 and North Carolina law. We affirm in part and vacate in part
the decision of the district court and remand the case for proceedings
consistent with this opinion.
I.
In March 1995, Willard Hodge, a white sales manager at Carolina
Hills,1 hired Kym McLean, a 19-year-old black female, as an at-will
employee to work as a receptionist at the defendants’ Sanford, North
Carolina office. Mrs. McLean’s duties included answering the tele-
phone, greeting customers, performing payroll duties, filing, render-
ing accounts payable and receivable, and keeping track of newspaper
advertisements.
She worked at Patten until August 22, 1995, at which time the
company says she resigned, and she says she was discharged. That is
a matter of dispute.
Mrs. McLean then brought her suit against the defendants, claim-
ing discrimination on account of race with respect to the terms and
conditions of her contractual relationship of employment under 42
U.S.C. § 1981 for her first claim for relief. Her second claim for relief
1Carolina Hills is a subdivision owned by Patten Communities, Inc.,
Patten Corporation, Bluegreen Communities, Inc., and Bluegreen Corpo-
ration. Collectively, these entities will be referred to as Defendant(s).
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was that the public policy of North Carolina prohibited discrimination
in employment on account of race and sex and that by discharging her
on the basis of race and sex, the defendants had violated the public
policy of North Carolina. The third claim for relief was that Hodge
and other supervisors were retained by the defendants as employees
although they had subjected, or were continuing to subject, Mrs.
McLean and other female employees to acts of discrimination and
harassment based on race and sex. The district court’s decision pro-
vided that "she has clarified that she does not seek to state a state law
claim for ‘sexual or racial harassment.’" That is verified on page 2 of
Mrs. McLean’s brief in this court where she states for her first cause
of action that "defendants terminated her on the basis of her race in
violation of 42 U.S.C. § 1981"; "[s]econd . . . wrongful discharge
claims under North Carolina law asserting that the terms of her
employment violated North Carolina public policy in that it was moti-
vated both by her race and her sex"; and "[f]inally . . . a claim for neg-
ligent retention and supervision under North Carolina law."
While Mrs. McLean was employed at Patten, she, and at least some
of the other female employees, were subjected to all manner of propo-
sitions, indignities and insults based on race or sex, or both. While
most of the incidents we refer to were the acts of Hodge, there were
also others upon which, although relevant, we depend only in insig-
nificant part here.
Because our decision is arrived at in an appeal from a summary
judgment, the evidence which we recite is made up of statements,
affidavits, depositions, and documents in the record which are not
inherently incredible and which we credit for the purposes of this
decision.
According to a female employee at Patten, after Mrs. McLean left,
Hodge joked about wanting to have sex with a black woman. As time
went on, the female employees were called bitches, whores, sluts,
brats, etc. The black employees were referred to as niggers. (J.A. 522-
24).
After Mrs. McLean and other black employees had complained
about Hodge’s conduct, Hodge told another female employee he
wanted Mrs. McLean fired, and he meant immediately. He then told
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that employee to make it hard on her [Kym] so she would quit. He
thought that should she be fired, then she would sue the company for
discrimination. He made that employee "stay on Kym about . . . work
performance and wanted her to be overworked so she would quit."
Soon after Mrs. McLean left, Hodge started interviewing. When told
by a female employee that four women were waiting to be inter-
viewed, including two other black women, he told that employee to
"send those Goddam niggers out of here," that he wasn’t hiring any
more of them. (J.A. 524).
When talking to Mitch Barron relating to the employee whom he
had hired following Mrs. McLean’s leaving, Hodge told him it would
be hard for them [Mitch and Chet] to get anything done because
"they’ve been too busy flirting with the two new women." He also
told them that "they would have to wait their turn, that he [Hodge]
would get into their pants before they [Mitch and Chet] would." (J.A.
523-24).
A female employee walked in on conversations Hodge was having
with two other female employees, where "he seemed to be trying to
get them to sleep with him for more money, the way he would me for
so long." "It got to the point where [Hodge] didn’t care who was
around, he would say things to us about sexual intercourse, oral sex,
multiple partners, his marital sex life . . . . On one occasion he told
us how he’d like to tie us up all at one time and put bags over our
heads and f*** us until we couldn’t take anymore. He thought this
was humorous, however we were insulted." (J.A. 524).
Hodge told "the sales agents that he was going to fire [one female
employee] because I was not doing my job and he thought I was a
spoiled little bitch driving around in a $30,000 car. But he continued
to tell me that if I ‘f***ed him’ I’d be there until the end and no one
would ever find out. I told him he was crazy." (J.A. 524). Hodge told
another female employee, on more than one occasion, that he had a
"big dick like brothers." (J.A. 353-54).
Speaking to one female employee of another female employee,
Hodge also said that he would like to put a bottle up her and spin her
on it. (J.A. 356).
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Speaking of another female employee, Hodge told Mrs. McLean
that he would like to "put his penis between her breasts and to screw
her or f*** her in that manner." (J.A. 291).
Referring to another female employee, Hodge said that "he’d turn
her from being a dike to being a real woman." He would "show her
what a real man could do for her." (J.A. 367).
Speaking to another female employee, he said, "[T]he wife is out
of town. Honey, how about coming on by?" (J.A. 373).
Speaking of another female employee, he said that he would like
to "ride her like a horse or a bull." (J.A. 365).
Hodge, referring to himself, told Mrs. McLean that she "should
sleep with an old white man." (J.A. 284).
When asked by Mrs. McLean how he liked his coffee, he replied,
"Hot and black like I like my women." (J.A. 272). That same remark
was made for Mrs. McLean’s benefit by Hodge in a conversation with
a contractor. (J.A. 274).
Hodge propositioned Mrs. McLean by comparison to a black
model with whom he had sexual relations while he was working for
Vidal Sassoon. The implication was "what I could do for you" and
"would you like to be with me." (J.A. 278).
There is evidence that an advertisement was placed for a replace-
ment for Mrs. McLean prior to the time she was either fired or had
resigned. (J.A. 444; Supp.1 doc. 36, p.12).
When Mrs. McLean and another female employee were out of the
office with Hodge to purchase office furniture, Hodge repeatedly
asked the other employee to stop at a hotel while they were out "so
that she could do him, which meant to give him head," which meant
Hodge solicited the other employee to engage in oral sex. (J.A. 319).
Hodge told another female employee that "he was glad that he had
finally gotten rid of all the Niggers in the office." (J.A. 529).
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Hodge told a female employee on several occasions that another
male supervisory employee desired her and that she "could probably
get just about anything that I wanted if I would parade around naked
in front of him." (J.A. 529).
There was evidence that Mrs. McLean and other female employees
had complained to people in management about the conduct of Hodge
with reference to black and female employees. Hodge’s employment
was terminated December 31, 1995.
Mrs. McLean rejected every solicitation of Hodge to respond to his
sexual advances and complained about his conduct to supervisory
employees. At which time, in the words of the district court: "Hodge
not only cooled toward her, but affirmatively undertook to make her
employment so difficult and uncomfortable that she would resign."
(J.A. 561).
II.
Mrs. McLean filed her complaint in the district court. The com-
plaint alleged that: 1) she was discriminated against because of her
race under 42 U.S.C. § 1981; 2) she was discharged on the basis of
race and sex, in violation of North Carolina’s public policy against
discrimination in employment; and 3) defendants negligently retained
or supervised Hodge, and Barron and Shires, other supervisors.
Defendants moved for summary judgment. They asserted that
McLean resigned and could not identify who fired her, thus they
argue her race and sex discrimination claims must fail. They addition-
ally argued that her negligent retention claim must fail because she
failed to allege a cognizable tort, she was not injured, and the defen-
dants did not know or have reason to know of Hodge’s unfitness.
McLean responded and reasserted her claims under 42 U.S.C. § 1981,
North Carolina public policy, and for negligent retention.
The district court found that McLean’s § 1981 claim failed because
an at-will employment relationship cannot support a cognizable claim
under § 1981. The district court additionally held that there was no
wrongful discharge cause of action under North Carolina law for race
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or sex discrimination. Finally, the court rejected McLean’s negligent
retention and supervision claims because claims of sexual harassment
and retaliation, on which such claims had to be based, were not
actionable at common law and therefore could not form the basis of
a negligent retention or supervision claim.
III.
We exercise jurisdiction pursuant to 28 U.S.C. § 1291 and review
a district court’s grant of summary judgment de novo. See United
States v. Kanasco, Ltd., 123 F.3d 209, 210 (4th Cir. 1997). The mov-
ing party must demonstrate the absence of an essential element of the
nonmoving party’s case and that it is entitled to judgment as a matter
of law. See Fed. R. Civ. P. 56; see also Celotex Corp. v. Catrett, 477
U.S. 317, 322-23 (1986). Once the moving party discharges its burden
by showing that there is an absence of evidence to support the non-
moving party’s case, the nonmoving party then must come forward
with specific facts showing that there is a genuine issue for trial. See
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-
87 (1986). We consider the facts in the light most favorable to the
nonmoving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
255 (1986). Summary judgment will be granted unless a reasonable
jury could return a verdict for the nonmoving party on the evidence
presented. See Anderson, 477 U.S. at 247-48.
IV.
Initially, we address Mrs. McLean’s argument that the case law
relied upon by the district court, which held that an at-will employee
may not proceed under a § 19812 theory of liability, was rejected by
this Court in Spriggs v. Diamond Auto Glass, 165 F.3d 1015, 1018-
19 (4th Cir. 1999). Because Spriggs in this court was not available to
the district court and reversed Spriggs v. Diamond Auto Glass, No. S
97-1449, 1997 WL 8800756 (D. Md. Oct. 15, 1997), we remand to
the district court for further proceedings. We declined to follow Haw-
2Section 1981(a) guarantees equal rights to make and enforce con-
tracts, which means "the making, performance, modification, and termi-
nation of contracts, and the enjoyment of all benefits, privileges, terms,
and conditions of the contractual relationship." 42 U.S.C. § 1981(b).
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kins v. Pepsico, Inc., 10 F. Supp. 2d 548 (M.D.N.C. 1998), and held
in Spriggs, see 165 F.3d at 1015, n.7, that at-will employment in
Maryland can be contractual. We stated, "[h]aving concluded that an
at-will employment relationship is contractual, we hold that such rela-
tionships may therefore serve as predicate contracts for § 1981
claims." See Spriggs, 165 F.3d at 1018-19. North Carolina courts
have also recognized that at-will employment relationships are con-
tractual. See Evans v. Cowan, 510 S.E.2d 170, 174 (N.C. Ct. App.
1999) ("This jurisdiction has long adhered to the employment-at-will
doctrine, i.e., ‘[w]here a contract of employment does not fix a defi-
nite term, it is terminable at the will of either party, with or without
cause.’" (citations omitted)). Because the district court’s decision is
contrary to our subsequent decision in Spriggs, we remand this aspect
of the case for further proceedings consistent with Spriggs.
V.
The district court, as noted, also entered judgment for the defen-
dants on the claim of negligent retention or supervision. As the dis-
trict court pointed out, such a claim had to be based on harassment
or retaliation on account of race or sex, neither harassment or retalia-
tion being common law torts in North Carolina. In Smith v. First
Union Nat. Bank, 202 F.3d 234 (4th Cir. 2000), we held that there
was no private cause of action under North Carolina law for sexual
harassment under § 143-422.2. 202 F.3d at 247. We stated that we
agreed with the statement of the district court in Mullis v. Mechanics
& Farmers Bank, 994 F.2d 680 (M.D.N.C. 1997), that absent a clear
indication from the North Carolina courts or legislature "it would be
inappropriate for a federal court to create a private right of action
under [§ 143-422.2]." Smith, 202 F.3d at 247. There is no reason to
treat retaliation any differently than we have treated sexual harass-
ment, and in this case, we arrive at the same conclusion, and hold that
there is no private right of action under North Carolina law for retalia-
tion under § 143-422.2. Accordingly, summary judgment in favor of
the defendants on account of negligent retention or supervision is
affirmed.
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VI.
A.
We next address whether North Carolina law recognizes a cause of
action for wrongful discharge where an employee is fired for refusing
to consent to the sexual advances of the employer. McLean has stated
that she is not asserting a state law claim for sexual harassment,
rather, the actions of her employer constitute sex and race discrimina-
tion as defined under the public policy of exception of North Carolina
expressed in Section 143-422.2. She argues that the district court
erred as a matter of law when it held that wrongful discharge on the
basis of race or sex is not forbidden by the public policy of North Car-
olina.
Section 143-422.2 states:
It is the public policy of this State to protect and safeguard
the right and opportunity of all persons to seek, obtain and
hold employment without discrimination or abridgement on
account of race, religion, color, national origin, age, sex or
handicap by employers which regularly employ 15 or more
employees.
It is recognized that the practice of denying employment
opportunity and discriminating in the terms of employment
foments domestic strife and unrest, deprives the State of the
fullest utilization of its capacities for advancement and
development, and substantially and adversely affects the
interests of employees, employers, and the public in general.
N.C. Gen. Stat. § 143-422.2.
While there have been numerous cases in the lower courts discuss-
ing whether a private cause of action can be maintained under Section
143-422.2 for allegations relating to discrimination based on race or
sex, we have held in Hughes and cited in Smith that this statute does
apply "to common law wrongful discharge claims or in connection
with other specific statutory remedies." Smith v. First Union Nat’l
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Bank, 202 F.3d 234, 247 (4th Cir. 2000); Hughes v. Bedsole, 48 F.3d
1376, 1383 and n.6 (4th Cir. 1995). Thus, the question here is whether
a plaintiff who has claimed that her discharge was because she would
not accede to the sexual advances of her supervisor has stated a cause
of action. In two cases we answered this question in the affirmative.
Owen v. Carpenters’ Dist. Council, 161 F.3d 767, 774 (4th Cir.
1998); Harrison v. Edison Bros. Apparel Stores, Inc., 924 F.2d 530
(4th Cir. 1991). In both Owen and Harrison, the court was faced with
facts indistinguishable from those present here and concluded that the
plaintiffs stated wrongful discharge causes of action under state law
for refusing the sexual advances of their supervisors.3
In Harrison, a female employee brought a wrongful discharge
claim under North Carolina common law alleging that she had been
fired after she refused to have sex with her supervisor. Harrison, 924
F.2d at 531, 532. The district court held that North Carolina would
not recognize such a wrongful discharge claim under the public policy
exception of North Carolina law. Harrison, 924 F.2d at 533. We
reversed the district court, holding that the employee had indeed
stated a cause of action under the facts alleged. Harrison, 924 F.2d
at 533-34. In coming to this conclusion, we also held that while North
Carolina may require that the discharge violate public policy, it may
not also require that there be no remedy available to protect the inter-
est of the aggrieved employee or society because "the courts of North
Carolina cannot fail to provide a forum to determine a valid cause of
action." Harrison, 924 F.2d at 533 (citation omitted).
We came to a similar conclusion in Owen, a case involving the
same facts, but on this occasion under Maryland law. A female
employee filed a wrongful discharge claim under the Maryland public
policy exception, similar in its application and content to § 143-422.2,4
3In Harrison, the employee’s separation of employment occurred in
December, 1986. § 143-422.2 of the North Carolina statute was enacted
in 1987. That case was decided on a public policy exception similar to
§ 143-422.2.
4The Maryland public policy exception makes it unlawful, inter alia,
for an employer to "fail or refuse to hire or to discharge any individual,
or otherwise to discriminate against any individual with respect to his
compensation, terms, conditions, or privileges or employment, because
of such individual’s . . . sex. . . ." Md. Ann. Code art. 49B, § 16(a)(1).
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alleging that she was discharged because she rebuffed her supervi-
sor’s sexual advances. Owen, 161 F.3d at 770. We held that a plaintiff
states a wrongful discharge cause of action "where an employee, like
Owen, is discharged because the employee rebuffed the sexual
advances of her supervisor. . . ." Owen, 161 F.3d at 774. When an
employee is discharged because she has refused to accede to the sex-
ual advances of a supervisor, we are of opinion and hold that the dis-
charge was due to "discrimination or abridgement on account of . . .
sex" in the "terms of employment" in violation of the public policy
of North Carolina under § 143-422.2. This decision follows our deci-
sion in Harrison, 924 F.2d at 534. Accordingly, we find the plaintiff
has stated a cause of action for wrongful discharge on account of dis-
crimination or abridgement because of sex and vacate the decision of
the district court in that respect.
B.
Just as we have held and hold in this case that a North Carolina
state cause of action for wrongful discharge is stated by a claim that
an employee is separated from employment because of her sex when
the cause of separation is her refusal of sexual favors to her supervi-
sor, then, when the record indicates, as it does in this case, that her
separation may have been caused because of her race, we are of opin-
ion and hold that she has stated a cause of action under the state law
of North Carolina under § 143-422.2.
Accordingly, the judgment of the district court is affirmed in part,
and vacated in part, and the case is remanded for consideration of the
claims of the plaintiff for wrongful discharge on account of sex or
race, either or both, under § 143-422.2. Upon remand, the court
should also consider the cause of action claimed under 42 U.S.C.
§ 1981.
AFFIRMED IN PART, VACATED IN PART,
AND REMANDED WITH INSTRUCTIONS
TRAXLER, Circuit Judge, concurring and dissenting:
I concur in the result reached in part IV of the opinion as to
McLean’s section 1981 claims, and I also concur in the result reached
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in part VI as to McLean’s wrongful discharge claims. However, I
believe that the district court improperly granted summary judgment
against McLean’s claim of negligent retention and supervision.
Accordingly, I respectfully dissent from part V of the majority opin-
ion.
"To support a claim of negligent retention and supervision against
an employer, the plaintiff must prove that the incompetent employee
committed a tortious act resulting in injury to plaintiff and that prior
to the act, the employer knew or had reason to know of the employ-
ee’s incompetency." Smith v. Privette, 495 S.E.2d 395, 398 (N.C. Ct.
App. 1998) (internal quotation marks omitted). The district court con-
cluded that the underlying tort must be a common-law tort, rather than
a tort based on a violation of a statutory duty. No North Carolina state
court, however, has articulated such a requirement, and I can see no
reason why North Carolina would believe it proper to hold an
employer responsible for retaining an employee who committed a
common-law tort but not for retaining an employee who committed
a statutory tort. McLean’s evidence, if accepted by the jury, would
certainly indicate that Hodge violated Title VII, which should be suf-
ficient to support the negligent retention claim.
Moreover, even if the underlying tort must be a common-law tort,
workplace actions that amount to sexual or racial harassment can and
frequently do constitute common-law torts. See Smith, 495 S.E.2d at
398 (concluding that the First Amendment did not preclude prosecu-
tion of negligent retention claim against a church by church employ-
ees based upon the "sexual misconduct" of the minister); Brown v.
Burlington Indus., Inc., 378 S.E.2d 232 (N.C. Ct. App. 1989) (affirm-
ing jury’s determination that co-worker’s pattern of sexual harassment
amounted to intentional infliction of emotional distress, which pro-
vided the basis for a verdict against the employer on a negligent reten-
tion claim); cf. Bryant v. Thalhimer Bros., Inc., 437 S.E.2d 519 (N.C.
Ct. App. 1993) (concluding that evidence of sexual harassment by a
supervisor supported verdict in favor of the plaintiff on a claim of
intentional infliction of emotional distress). I believe that a jury could
reasonably conclude from McLean’s evidence that Hodge committed
various torts, such as battery or negligent infliction of emotional dis-
tress. Accordingly, even if North Carolina law requires the commis-
sion of a common-law tort as the predicate for a negligent retention
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claim, McLean’s evidence is sufficient to survive summary judgment.
I therefore dissent from the majority’s conclusion that the district
court properly granted summary judgment on McLean’s negligent
retention claim.
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