Savonda Thomas suspects her husband, Steve, is having an affair with one of his employees, a flag person in the family construction company. One night Steve tells his wife he's going tothe hospital with Terry Garland, another member of his crew, tovisit an injured coworker. Savonda finds out that the flag woman, Jeri Platner, has also been with them. Steve does not returnuntil 11 p.m. When he does, the couple argues.
The next day Savonda's suspicions are confirmed: Shefinds a shirt of Steve's in the laundry with a smear of makeupon the collar--not hers. With another crewman's wife whoshares her dislike of Platner, she drives out to the work siteand shows the shirt to Steve. "Whose makeup is this?" shedemands. "I don't know," he says. She then tracks down JeriPlatner, who is hooking up a chain to a piece of pipe the menare lowering into a ditch when Savonda, brandishing a beercan and the makeup-stained shirt, catches up with her. Jeri denies the makeup on the shirtis hers. Savonda thenlets her have it in front of the other crew members for nottelling her about going to the hospital with Steve.
This confrontation in 1987 brought simmering emotionsto a boil in a small construction company with about 50 employees, owned by Steve's father, Jack Thomas. Cash &Thomas Contractors is based in Toccoa, Georgia, but the dispute took place near the company's Augusta branch office,about 100 miles to the south, where Steve Thomas was thesupervisor of crews engaged in laying sewer and waterpipelines for local municipalities.
The 62-year-old father frequently visited the Augusta ofticeand knew about Savonda's suspicions, her jealousy, her fightswith Steve over Platner. He was aware that other employeeswere talking about the two women and his son--rumors andgossip were rife in the company. He also knew that as a result of the brouhaha, Savonda had threatened to leave Steveand take their daughter--Jack's granddaughter--with her.
Although Savonda had never asked him to fire Jeri, Jackgnally decided that she had to go. He called her into the office and, as Jeri remembers it, said: "Jeri, this is the hardestthing I've ever had to do. I'm going to have to let you go, oryou have to quit. I'm having trouble with Savonda. She isgoing to take the baby and leave Steve if I don't fire you."
The tangled plot ended up in the Federal courts. Platner, amarried woman with two children, charged that, in firing herbut not his son, Jack Thomas had violated Title VII of the Civil Rights Act of 1964, which prohibits unequal treatment ofemployees based on race,color, religion, sex, or na-tional origin.
But Platner v. Cash &Thomas Contractors was alsoa major test of nepotism inthe employment practices of family businesses. After a one-day trial in U.S. District Court in Augusta, Judge Dudley H.Bowen Jr.'s decision was appealed to the U.S. Court ofAppealsfor the 1lth Circuit, which ruled on the case last August inwhat could be a precedent-setting opinion.
Beyond the legal arguments, the case was almost a textbookexample of how not to deal with feuds and emotional entanglements that can develop in the workplace. These entanglements often occur when family members and employees notonly work together but socialize a lot and become familiarwith one another's private lives. Unless the business owner iswilling to confront and deal with them, emotions can spin out of control and lead to antagonism and costly lawsuits. AsJudge Bowen said in his decisions "There are few thingsmore likely to produce discordin the workplace than therumor, suspicion, gossip, andinnuendo that were rampant in this small, closely held pipeline contracting operation."
Steve and Savonda had been married in 1986 when she was five months pregnant. The couple lived in an apartment behind the office in Augusta; Steve's two childrenfrom a previous mawiage sometimes stayed with them. Theconcrete-block building housed two apartments, one for crewmembers sent down from Toccoa. There was also a kind ofrecreation room where crew members relaxed after their shiftand frequently drank beer.
When Jeri Platner was hired by Cash & Thomas in January1987, Savonda was at her former home in Toccoa where she was staying until she had her baby. Afterreturning to Augusta, Savonda soongrew suspicious of the new employee.She found out from the office secretary,Ruby Purcell, that Platner had been asking about her--what did Savonda looklike, did she have a nice body, did shebreak up Steve's first marriage?
Platner was one of two flagwomen in the branch office, butshe was the only female whodrank beer with Steve and the other menafter work. She usually socialized in thecrew room until her husband picked herup at 5:30 p.m. Ronnie Platner apparently didn't like his wife to drink with themen and, for that reason, according tocourt testimony, was referred to behindhis back as "dildo head."
Savonda, who worked part-time in theoffice, felt the shorts and sleeveless T-shirts that Jeri wore on the job were alittle too revealing, She also noticed small gestures of Jeri's,directed at Steve, that she felt were sexually provocative.One day Jeri sat down next to Steve and leaned against himwhile reaching across to get a light for her cigarette from another worker. When the crew went to work with Steve driving the truck, Jeri always got into the front seat next to him,with two men on the outside.
Was Savonda imagining Jeri's play for Steve? Was Jeri purposely flaunting her hold on Steve in front of her?
The wife's suspicions erupted into argument after the hospital visit by Steve, Jeri, and the other crew member, Terry Garland. Savonda was furious when shediscovered that Jeri was one of the threepeople she saw go off in the truck. Jerilater testified that she had gone out ofher way to drive from home to the office to Join the two because the visitmight be awkward--the hospitalizedcoworker had lost a hand in an on-the-job accident--and they wanted to go together. Savonda was more alarmed when she found out that visiting hoursat the hospital ended at 8 p.m. What had Steve and Jeri been doing between8:00 and 11:00 that evening?
Terry Garland testified that they hadactually arrived at the hospital after 8:00but had been allowed to stay. What happened on the way back to the oflice remains unclear, The three evidentlybought some beer. Savonda says that,when pressed, Steve admitted they"may have smoked a joint" (Jeri deniedit). Whatever the truth, Steve andSavonda argued into the early morning hours. Savonda feltthat the fact that Steve and Jeri had not informed her theywere going to the hospital together showed "lack of respect.She threatened to leave Steve. Angry at her suspicions, hethrew her on a bed.
Then came the discovery of the makeup-stained shirt andthe confrontation between Savonda and Jeri by the ditch.When Steve heard about the incident, he was irate and de-manded that she apologize to Jeri, which she did--grudgingly--the next day In the offce. Steve and another employeewere there when Savonda told Jeri she was sorry for makinga scene in front of other crew members.But she added that she had meant everyword of it.
As Steve bent over to tie his shoes,Savonda announced to Jeri: "I've hadenough . . . if you want him, he's yours."Jeri recalls that her reaction was to tellSavonda that she loved her own husband. As to the suggestion that therewas something between her and Steve,she remembers saying:"I don't knowwhat gave you that impression."
By this time, evidently, the crewmembers were all aware of Savonda'ssuspicions and jealousy. Ruby Purcelltestified that some of them thoughtJeri's behavior was funny and were talking about what would happen next between her and Savonda.
The final incident--or nonincident,depending on whom you believe--occurred at some boat races that tookplace on a weekend at the Augustariverfront. Before leaving the office on Friday afternoon, Jeri had stuck herhead back in the crew room and announced she would be at the riverfrontwatching the races that weekend, "wearing a bikini and without her husband."That was how Savonda, who was in theroom,remembered Jeri's words,whichshe felt were meant for Steve alone.Jeri's version was that she was tellingthe other crew members that she wouldbe there because they had all talkedabout going.
Jeri said she came to the riverfront,wearing a two-piece bathing suit undershorts, with her daughter and a friend.Savonda, who came with Steve wearing a bikini herself, saidthey observed Jeri in a bikini, socializing with "about eightguys, none of them her husband." At one point, when Jeripassed near them, Savonda said to Steve,"there goes yourbuddy." That touched off another quarrel, which hours laterended up with Steve throwing her on the bed again.
News of their argument quickly reached Ruby Purcell,who was a kind of second mother to Savonda and had apparently been getting a play-by-play of her marital troubles.Ruby was also described in testimony as having a "special relationship" with Jack Thomas, though the nature of that relationship was not described. The business owner had seenJeri drinking beer with the men. He was aware of Savonda'ssuspicions. After the riverfront incident, Jack found out from Ruby that Steve had "roughed upSavonda" again, and she was threatening to take their baby and leave him.
The decision to fire Jeri was not easy. During her six months with the company, she had made only one small mistake, although a costlyone: She had poured the wrong type ofgasoline into one ofJack's trucks, afterwhich, he said, "it didn't work a lick."
But generally she was considered agood worker. When Jack told her inJune 1987 that she had to be dismissed, she suggested thathe solve the problem by assigning herto another crew so shewouldn't be working with Steve. The next day she showedup for work with her husband and told Jack she was "readyto go to work on the other crew." Jack replied that he wassorry, he couldn't let her do that. Jeri then complained to thestate Human Relations Commission, which investigatescharges of discrimination against employers. The commission concluded the firing was not a Title VII violation. Jeri andher lawyer John Paul Batson thought it was and sued theThomases and the company.
The trial featured grown men, surrounded by the awesome trappings of the law, arguing at great length aboutwomen's lingerie. Savonda testified that Jeri's T-shirts had not gone unnoticed by Steve. He had once asked her to buy a brajust like Jeri's, she said. How did he know what it looked like?Shesays Steve confessed, "Gosh, Savonda, I couldn't help butsee it. I have to walk with her or behind her."
Batson argued that Jeri had not been given any dress codeby her employers and that her clothing was not provocative.More important, he noted that she had not been warnedabout her job performance, which the Thomases admittedhad been satisfactory, or about the compromising positionthe alleged affair between her and Steve had put her in. Infact, he argued to the court, there was no affair at all. Jeri wasfired simply because she was a woman.
Jack Thomas's attorney, Jack L. Cooper, argued that Jeriwas not fired because she was female, but because of her behavior. If Jack had discovered that a male employee hadbeen making sexual advances, the father would have donethe same thing--that is, fired the man.
Generally, the Federal courts have upheld favoritism forrelatives in hiring and firing unless such a systematic policyconsistently blocks the progress of women and minority employees in the company (see "Nepotism and the Law," below).
In ruling for the defense last year, Judge Bowen decidedthat Jack Thomas had a legitimate, nondiscriminatory motive for firing Jeri. Bowen repeatedly spoke of the father's desireto "protect" his son, whether it was from an adventurouswoman, from an undulyjealous wife, or from himself. Facedwith a "sea of discord" that was interfering with his business, Thomas had chosen to "cast out the offending part"--Jeri. He had acted to quiet his daughter-in-law and to defendthe family unit for the sake of his grandchild; to have firedhis son as well would have risked a family breakup.
Unlike many states that have wrongful-discharge statutesrequiring employers to show "just cause" for dismissals,Georgia law places few limits on an employer's right to fire.Jeri did argue, however, that Savonda had brought aboutJeri's dismissal and thus violated her contract rights understate law. But Bowen rejected that argument too. "I am absolutely confident," he said, "that Jeri's dismissal met with theutmost approval, and perhaps even delight, of SavondaThomas. But I do not see evidence for a finding that the dismissal of Jeri Platner was obtained by the willful, maliciousinterference with Ms. Platner's job by Savonda Thomas."
Last August, the U.S. Court of Appeals affrmed Bowen's decision. The ultimate basis for Platner's dismissal was not gender but simply favoritism for a close relative, the higher court agreed. "However unseemly and regrettable nepotism may be as a basis for employment decisions inmost contexts," the opinion declared, "itis clear that nepotism as such does notconstitute discrimination under Title VII"
In upholding Bowen, the higher court praised the districtjudge for a balanced, thoughtful opinion delivered orally from the bench. Bowen had wisely refrained from reaching any conclusion about whether there was or wasn't an affair between Steve and Jeri. Both courts, however, described Savonda as "undulyjealous," and the appeals court spoke of her "fevered imagination." Perhaps somewhat naively,Judge Bowen ventured that, given thecomings and goings of family membersand crews at the Augusta office, it wouldhave been "exceedingly difficult" forSteve and Jeri to "consummate" an affair.
The judge also made a few other observations about the living arrangements that other small companies woulddo well to heed. When family memberslive and work with other employees onthe same business premises, they haveto develop guidelines, build somefences, and use a minimum of good judgment if they want to protect their privacyand family lives. The judge added that"the amount of socializing, beer drinking, and fraternization that occurred soclose to the office and workplace certainly seems to have had its derogatoryeffect in this case."
There was plenty of blame to goaround, and Judge Bowen doled it outin generous portions. Savonda appearedto the judge to.be "unduly jealous." Jeriwas surely aware of Savonda's suspicions after the confrontation at the ditch but did nothing toreassure her; on the contrary, Jeri seemedto persist in whatBowen described as her "body language."
But the two people who could have stopped the bickeringbefore it got out of hand, Bowen said, were "the stars of thisshow"--Steve and Jack Thomas. Steve, as Jeri's supervisor,did not warn her of his wife's jealousy. Indeed, he may haveadded to her suspicions by defending Jeri in arguments withSavonda, becoming abusive, and forcing her to apologize.
Bowen acknowledged that Jack Thomas had done what hethought was necessary to protect his family and his business.But the judge also gently admonished him, for waiting threeweeks before taking action and not considering any alternatives to the firing of Jeri.
"For reasons of his own," Bowen said, "Mr. Jack Thomas sawonly one clear path for his solution to this discord, and that wasby dismissing Platner. He did not consider counseling his son.He did not consider meeting with his son and daughter-in-law,and Jeri Platner and her husband. He did not consider any warnings, any guidance, or any preventive measures that might be incorporated under the head ofleadership."
Unfortunately, if Jack Thomas firedJeri for the sake of preserving familyunity, he did not succeed. The quarrelover Jeri led to a divorce between Steveand Savonda, which became final in thesame month as Judge Bowen's 1989 decision. Since the trial, Jeri Platner hasalso been divorced from her husband.She worked as a bartender and waitress for a while but in late fall last year was unemployed.
Cash & Thomas has closed its Augusta office. The company now specializes in digging water wells and installingpumps, and is down to five employees. Mark Thomas, 29,Steve's younger brother, says their father recently had astroke and is no longer active in the business, which is nowrun by him and Steve. Savonda has custody ofJack's grand-daughter, according to the Thomases' lawyer, Jack Cooper,but remains on good terms with her father-in-law.
However trivial the circumstances of the case, it has surelytaken its toll on both the family and the business. Just talking about the problems soon enough might have spared theThomases much expense and grief, and allowed Jeri Platnerto keep her job. Small companies such as Cash & Thomascan ill afford the time and resources that are usually necessary to defend such lawsuits. The Thomases came out on topin this lawsuit, but they are hardly big winners.
Howard Muson is a consulting editor for Family Business.
BUSINESS: Contractors for water-welldigging and pump installation (at thetime of the case they specialized inlaying sewer and water lines).
FOUNDED: 1951 in Toccoa, Georgia.Jack Thomas bought out his partnerin the late sixties.
STOCK: All owned by Jack Thomas.
CURRENT CEO: Mark Thomas, 29, theThomases' younger son.
OTHER FAMILY MEMBERS: Steven,34, vice president; mother BarbaraThomas works part-time in office.
NUMBER OF EMPLOVEES: 28 in1987, now five.
JERI PLATNER: The plaintiff, who wasemployed as aflag person from January to June 1987 in the Augustabranch office of Cash & Thomas Con-tractors Inc. (Now divorced, she usesher original name, Jeri Bryant.)
JACK THOMAS: Owner of Cash &Thomas and a defendant in the lawsuit.He was CEO at the time he fired Platnerin 1987.
STEVEN THOMAS: Jack's older son,who was also a defendant. He was su-pervisor of crews in the Augusta branchoffice and Platner's boss.
SAVONDA THOMAS: Steve's secondwife, who thought Platner was makinga play for him.
RUBY PURCELL: Secretary in the Bugusta branch office, a confidante ofSavonda. Also described in court ashaving a "special relationship" withJack Thomas, though the nature of thatrelationship was never defined.
TERRY GARLAND: A crew member andkey witness. He was with Steve and Jerion a disputed evening visit to a friend inthe hospital that inflamed Savonda'sjealousy.
JUDGE DUDLEY H. BOWEN JR.: TheU.S. district judge in Augusta who delivered a verdict from the bench favoring the Thomases after a one-day trialin August 1989.
JOHN PAUL BATSON: Jeri Piatner's attorney.
JACK COOPER: The Thomases' attorney.
Jeri Platner's claim of sex discriminationunder Federal law was denied because herlawyer had not been able to prove thatJack Thomas acted with a discriminatorymotive in firing her. You can, however, violate Federal civil rights law even if youdon't intentionally discriminate-particu-larly if you have a large business with lotsof relatives in it.
In 1982, a Federal appeals court in California ruled that an Oakland garbage com-pany was guilty of discrimination becausesome 120 worker-shareholders of Italianancestry, all of whom were related, received higher pay and more opportunitiesfor promotion than minority-group members who did virtually the same work. Thecase was settled last year with an award of $8 million to 16 black and Hispanic plaintiffs (See "You Can't Always Pay What You Want," FB, February 1990).
The law considers nepotism a neutral policy--that is, it's not discriminatory by itself. Such a policy is lawful unless it has an "adverse impact" on women or minority groups (as in the Oakland Scavenger Co. case). In another case two years ago, the Supreme Court increased the burden of proving adverse impact to plaintiffs and, at the same time, made it easier for employers to defend such lawsuits. Many lawyers, however, expect the newCongress will eventually enact a civilrights bill, with or without PresidentBush's signature, that will require employ-ers to provide a strong business justifica-tion for a policy that results in racial orgender imbalance.
Nepotism is more vulnerable to attackfor "disparate impact" by racial minoritiesthan by women. As the U.S. Court of Appeals noted in Platner v. Cash & Thomas:"it is difficult to see how nepotism couldmask systematic gender discrimination.While a person's relatives will usually beof the same race, men and women willpresumably be equally represented bothwithin and without the family."
The smallest companies--those with 15or fewer employees--are specifically excluded from the provisions of the CivilRights Law of 1964 dealing with employment discrimination. But many states havesimilar statutes with broader coverage.
Paul W. Cane Jr., a labor law specialist with the Los Angeles firm of Paul, Hastings, Janofsky & Walker, offers several suggestions for family-owned companies that want to protect themselves against charges of discrimination:
Find out as much as you can about the racial and gender composition of the labor pool in your area and try to bring yourown Shop into line with it. Often you canget an idea Of the available work forcefrom yor own pool of job applicants.
The argument that most hiring in yourbusiness is through industry connectionsOr word-of-mouth is a weak defense,since these traditional sources often perpetuate an in-group.
Avoid stereotyping in both job assignments and business communications.jokes or epithets aimed at women or minority-group members will be taken incourt as evidence of a "hostile environ-ment" for these groups.
In hiring or promoting a family member, explain the decision in job-relaterlterms. If a disappointed applicant askswhy he or she was passed over, you should'nt say, "We want Bill for this position because he's family." Emphasise Bill's qualifications for the job, his com- mitment to the long-term success of the company, and your first-hand knowledge of his skills.
Never, never make or explain a hiring decision or promotion by reasoning that "our customers won't like it if we send them a black salesman or a woman." Customer preference is not a defense in a lawsuit based on a discrimination claim.