author: GORDON W. SHUMAKER, Judge.

text:
    Patricia Ludowese RAY, Respondent, v. MILLER MEESTER ADVERTISING, INC., Appellant, Robert V. Miller, Defendant.
    No. C3-02-1605.
    Court of Appeals of Minnesota.
    June 16, 2003.

      Susan M. Coler, Teresa K. Patton, Sprenger & Lang, PLLC, Minneapolis, MN, for respondent.
    Joseph W. Anthony, Mary L. Knob-lauch, Anthony Ostlund & Baer, P.A., Minneapolis, MN, for appellant.
    Donald H. Nichols, Nichols, Raster & Anderson, PLLP, Minneapolis, MN, for amicus curiae National Employment Lawyers Association.
    Considered and decided by RANDALL, Presiding Judge, SHUMAKER, Judge, and HUSPENI, Judge.

       Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const, art. VI, § 10.

   OPINION

GORDON W. SHUMAKER, Judge.

The district court simultaneously conducted a bench trial on claims of gender discrimination brought under the Minnesota Human Rights Act (MHRA) and a jury trial on claims brought under Title VII of the Civil Rights Act of 1964 (Title VII). Both the district court and the jury concluded that appellant Miller Meester Advertising, Inc. (MMA) had engaged in unlawful gender discrimination when it terminated respondent Patricia Ludowese Ray’s employment and that Ray was entitled to damages under both acts.

On appeal, MMA alleges multiple errors in the district court’s evidentiary rulings, jury instructions, calculation of damages, award of injunctive relief, and award of attorney fees.

FACTS

Patricia Ludowese Ray worked as an at-will creative director for MMA. When MMA terminated her employment, Ray sued MMA and its owner, Robert V. Miller (Miller), for unlawful gender discrimination under both the state MHRA and Title VII of the federal Civil Rights Act.

MMA hired Ray in June 1996, to serve as one of four group creative directors. She was the first woman in MMA’s 25-year history to hold a position in MMA’s creative department above an associate-director level. She was given the same title and responsibilities as the other three creative directors.

After Ray started her job, MMA reorganized its creative department and appointed one overall creative director. This position was filled by a male, who was given 18 months to prove himself. When he failed to do so, he was not terminated but was given the position of senior manager at the same salary.

On June 9,1998, MMA assigned Ray the position of sole creative director but did not formally announce her promotion, as it had done with her male predecessor.

During Ray’s tenure, Marchio, a vice-president and director of human resources for MMA, commended her for her abilities. Ray’s immediate supervisor, Robert Ruh-land, never expressed dissatisfaction with Ray’s management of the creative group, and there were no negative appraisals in her personnel file.

But Miller did say to Ray that her efforts to hire an art director were unsatisfactory because Ray did not know how to interview. Miller said he would teach her. Also on one occasion an employee under Ray’s management complained about work assignments and Ray’s decision not to move her workstation. Ray met with the employee and Marchio, and Marchio praised Ray for her handling of the situation.

On August 11, 1998, Miller told Marchio to fire Ray immediately. She did so. When Ray asked Marchio what she had done wrong, Marchio said she had done nothing wrong and it was a “Bob decision.” In a termination letter, Marchio stated that the reason for-Ray’s termination was her “management style which created morale problems for employees,” but Marchio was unable to identify specific problems. After Ray’s termination, Miller hired a male to take her place.

The trial evidence was in sharp contrast. Robert Miller portrayed Ray’s termination as the product of a proper business decision applied to an at-will employee. He testified about the low morale in the creative department and indicated that Ray had failed to achieve a consensus among the employees in that department. He also cited deteriorating business conditions and a pattern of employee complaints about Ray as factors in his decision to fire her. He denied that his decision was motivated by gender discrimination.

To prove her allegations, Ray introduced evidence of her differential treatment as a woman; discriminatory comments by certain employees; the workplace “atmosphere”; complaints of sexual harassment and retaliation that occurred prior to the commencement of her employment; and an expert opinion on gender stereotyping. The district court overruled MMA’s objections as to much of this evidence on the bases of hearsay, relevancy, rule 408, and foundation. These rulings, as well as certain jury instructions and damages calculations, are the principal bases of MMA’s appeal.

ISSUES

1. Did the district court abuse its discretion by admitting evidence that was improper lay-opinion testimony, irrelevant, unduly prejudicial, or improper expert opinion?

2. Did the admission of inadmissible evidence result in prejudicial error in the Title VII jury trial?

3. Did the admission of inadmissible evidence result in prejudicial error in the MHRA bench trial?

4. Did the district court err in its order for damages when it applied the MHRA multiplier to the front-p'ay damages; allowed allocation of damages between the MHRA and Title VII claims, awarded in-junctive relief and punitive damages; and, was the district court’s order awarding damages and attorney fees excessive?

ANALYSIS

I. Evidentiary Issues

The district court has discretion to admit or exclude evidence, and its rulings will not be reversed unless they constitute an abuse of discretion or are based on an erroneous view of the law. TMG Life Ins. Co. v. County of Goodhue, 540 N.W.2d 848, 851 (Minn.1995). Even if an evidentiary ruling is erroneous, it will not be reversed unless it resulted in prejudice. Kroning v. State Farm Auto. Ins. Co., 567 N.W.2d 42, 46 (Minn.1997). An evidentia-ry error is prejudicial if it might reasonably be said to have changed the result of the trial. Jenson v. Touche Ross & Co., 835 N.W.2d 720, 725 (Minn.1983); see State v. Bolte, 530 N.W.2d 191, 198 (Minn.1995) (providing that an error in admitting evidence is prejudicial “if there is a reasonable possibility that the verdict might have been more favorable to the defendant if the evidence had not been admitted”) (quotation omitted).

a. Opinion Testimony

The first category of testimony we will consider consists of evidence of discriminatory statements and characterizations of the workplace atmosphere during Ray’s tenure.

Ray’s husband testified that on the day before Ray’s termination MMA employee Mike Butler told him that the “boys”.were giving Ray a hard time and were out to get her. The Minnesota Rules of Evidence provide that a lay witness may testify only to matters about which the witness has firsthand knowledge. Minn. R. Evid. 602. With some exceptions that do not apply here, a lay witness may not testify in the form of opinions or inferences. Minn. R. Evid. 701. Butler’s statements did not relate perceived facts but rather disclosed his opinions or inferences as to the “boys’ ” conduct. This evidence was inadmissible.

Employee Mexia Bonnici testified that there was a “boys’ club” atmosphere in MMA’s creative department and that Marchio agreed with her. Bonnici’s characterization of the atmosphere in the creative department was an inadmissible opinion, and her testimony that Marchio agreed was an improper opinion and inadmissible hearsay. Hearsay is an out-of-court statement offered to prove the truth of the matter asserted. Minn. R. Evid. 801(c). Subject to exceptions, none applying here, hearsay is not admissible in evidence. Minn. R. Evid. 802. Bonnici’s opinion that Marchio agreed that there was a “boys’ club” atmosphere at MMA was offered to prove that there was in fact such an atmosphere. This was inadmissible hearsay.

Ray testified that, on the evening of her termination, she spoke with MMA employee Nancy Johnson, who told her that employee Paul Durham must have influenced Miller’s termination decision because Durham has an intense dislike for women. Johnson’s opinion was inadmissible, was speculative, and was allowed into evidence through the vehicle of inadmissible hearsay.

Johnson also told Ray’s husband that certain employees wanted a particular male to be the creative director because they preferred someone who would sit around, put his feet up on the desk, and drink coffee with the others, and that Ray was all about the work. Johnson’s testimony was an inadmissible opinion.

Despite the inadmissibility of these improper opinions and inferences, MMA failed to object and, therefore, waived the evidentiary error. Minn. R. Evid. 103; Hendrickson v. Bannitz, 194 Minn. 528, 530, 261 N.W. 189, 191 (1935).

b. Relevancy, Prejudice

The second category of testimony on which we focus relates to evidence of alleged sexual harassment and retaliation against MMA’s female employees, all of which occurred before Ray started her employment with the company. MMA did object to this evidence.

The jury heard several former MMA employees testify to alleged acts of sexual harassment committed by male management-level personnel against female employees, generally during the years 1991 through 1995. The alleged harassment consisted of both statements and physical contact. Ray also presented evidence that MMA did not respond to complaints of sexual harassment and even sometimes retaliated against the complainants.

MMA contends that this evidence, consisting of unproved allegations of conduct that predated Ray’s job commencement, was irrelevant and was also excludable under Minn. R. Evid. 403, 404, and 408. MMA argues that such evidence was inflammatory and sufficiently prejudicial to taint the outcome of the trial.

Ray argues that the evidence was admissible to support her claim for punitive damages and tó show that similarly situated males were treated more favorably than she was treated.

Although this evidence might arguably be relevant to the punitive damages claim, it was excludable under rules 403 and 404(b), and therefore should not have been admitted as evidence in Ray’s casein-chief. Rule 403 permits the exclusion of even relevant evidence if its likely prejudicial effect will substantially outweigh its probative value. Several aspects of this evidence cause us to conclude that it cannot survive rule 403 scrutiny. The evidence (1) involved only alleged and not proved improper conduct; (2) pertained to sexual harassment, a type of conduct not at issue here and more volatile and inflammatory than an unfair employment termination based on gender; (3) involved references to sexual harassment, and the references were not isolated or minimal but were presented through nine witnesses and, thus, became a clearly emphasized part of the trial; (4) involved alleged sexual harassment that occurred before Ray began working at MMA, and some of ■it had taken place as long as seven years previously; and (5) showed that all but one of the males about whom the complaints were made had left MMA before Ray began working there.

Although Ray argues that this evidence shows how MMA typically responded to complaints of discrimination against female employees, we conclude that these unsubstantiated allegations of sexual harassment, some occurring at times remote from those involved here, had relatively low probative value in this controversy, but did have a high likelihood of prejudice to MMA. Thus, this evidence should have been excluded under rule 403, and the district court abused its discretion by allowing the evidence.

We also hold that this evidence violated rule 404(b) prohibiting the introduction of character evidence to prove that a party acted in conformity with a particular character trait. It appears that this evidence was offered for the precise purpose of showing that MMA had a past “character trait” of ignoring complaints of sexual harassment against female employees and that MMA continued to act “in character” in its treatment of Ray. For such purposes, the evidence was inadmissible under rule 404(b).

Rule 404(b) provides that character-type evidence may be admissible for a relevant purpose other than showing conduct in conformity with a party’s character trait to show, for example, a plan or a pattern. Arguably, Ray’s evidence of pri- or sexual-harassment complaints and alleged retaliation could be admissible to show a pattern or plan of discriminatory conduct. But to be admissible for such other purpose, the

[p]rior act evidence must also be proved by a preponderance of the evidence, relevant to a material issue, more probative than prejudicial, and close in time and similar in kind to the conduct at issue.

Williams v. City of Kansas City, Mo., 223 F.3d 749, 755 (8th Cir.2000) (citation omitted). Prior “bad acts” evidence is limited because of the concern that the fact-finder will give misplaced and undue weight to it in deciding the issues in controversy. State v. Spreigl, 272 Minn. 488, 490, 139 N.W.2d 167, 169 (1965).

Ray failed to satisfy the conditions precedent to the admissibility of this character evidence for any legitimate purpose under rule 404(b). The prior “bad acts” allegations were not established by a preponderance of the evidence; they were not more probative than prejudicial; some of them were remote in time; and the conduct was not similar to that under consideration here.

Finally, as to this category of evidence, because of its marginal relevance to the claims in Ray’s case-in-chief and its substantial potential for prejudice, if it is admissible evidence for the punitive-damages claim, the better practice is to bifurcate the punitive-damages portion of the trial from the case-in-chief.

c. Expert Testimony

The third category of evidence on which we focus consists of the expert testimony of Eugene Borgida, a professor of psychology and law, who provided a “social-framework analysis” for the jury’s and court’s consideration on the issue of gender stereotyping.

Borgida testified that stereotypes “are the beliefs that people hold in their minds about other people, other groups,” and that “gender stereotyping really refers to the beliefs that we hold in our minds about other — about men and women.” He distinguished “descriptive” stereotyping— how men and women are perceived to behave — from “prescriptive” stereotyping— how they are perceived to be expected to behave. Borgida explained that when a member of a group does not meet the particulars of prescriptive stereotyping, “there’s a certain set of feelings and evaluations that kick in and that’s typically what we refer to as gender prejudice.” He noted that, in his opinion, “gender prejudice and gender * * * stereotyping played a role in understanding the termination of * * * Ray.”

To illustrate this opinion, he cited statements some MMA employees made about Ray, such as, she did not meet management’s expectations; she was responsible for low morale; she was overbearing; and she acted like a Jewish mother. He suggested that women in management positions have to perform a “real tricky juggling act” of being assertive and confident (as men are perceived to be) but also nurturing and sensitive (as women are perceived to be), and when women fail to fulfill both functions satisfactorily, they receive negative consequences.

Borgida acknowledged that the “framework” information about which he testified was based on research literature and that, although he read the pleadings, affidavits, and depositions in this case, he did not attempt to do “any type of scientific study” and then “apply that particular study to the facts of this case * ⅝ He admitted that he did not read the MMA employment manual policy on discrimination and did not assess or review Ray’s management skills. He testified that his role was to provide the triers of fact with a framework for thinking about the facts of the case.

A qualified witness may give expert testimony “[i]f scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue.” Minn. R. Evid. 702. To be admissible, expert testimony must be relevant and helpful to the trier of fact. Goeb v. Tharaldson, 615 N.W.2d 800, 814 (Minn.2000) (citing Minn. R. Evid. 402 and 702). More particularly, the opinions of experts are admitted when

the subject matter of the inquiry is such that inexperienced persons are unlikely to prove capable of forming a correct judgment upon it without such assistance.

Wyatt v. Wyett, 200 Minn. 106, 110, 273 N.W. 600, 601-02 (1937). The standard of review of expert-testimony admissibility is two-pronged. Goeb, 615 N.W.2d at 815. The first prong, general acceptance in the relevant scientific field, is a question of law that we review de novo. Id. Under the second prong, expert-witness qualifications and helpfulness are reviewed under an abuse of discretion standard. Id.

MMA argues that Borgida’s testimony failed to meet the rule 702 requirement of assisting the fact-finder and failed to qualify as admissible under the Frye-Mack standard. See Frye v. United States, 293 F. 1013 (D.C.Cir.1923); State v. Mack, 292 N.W.2d 764, 768-69, 772 (Minn.1980). Because we focus on the helpfulness of Borgi-da’s testimony, our review is under an abuse of discretion standard. Goeb, 615 N.W.2d at 815.

The essence of Borgida’s testimony was a lexical definition of “stereotyping,” coupled with an opinion that women are often held to a higher standard in the workplace and are judged more harshly and negatively than men if they do not meet that standard. Information about and commentary on gender issues is so abundant in our society that it has become a common stereotype that women receive disparate and often unfairly discriminatory treatment in the workplace. Part of the stereotype is that women might receive lower pay or fewer benefits than men for exactly the same work; that women may not be promoted at the same rate as men despite equal qualifications; that, because of their “femininity” they might not be suitable for “a man’s work”; and that they are often expected to out-perform their male counterparts in order to achieve the same degree of respect and commendation as males. Gender stereotypes are the stuff of countless television situation comedies and are the focus of numerous media treatments on nearly a daily basis. It is unarguable that virtually all adults in our society know about gender stereotypes.

Borgida purported to give the fact-finders a framework for thinking about gender prejudice here so that they might, if they desired, conclude that Ray’s termination was the product of gender discrimination. But this testimony was not sufficiently helpful to the fact-finders to satisfy rule 702 requirements. The fact-finders heard evidence that Ray was treated differently from creative department male employees and that some pejorative gender statements were made about her. Borgida’s expert testimony is hardly the type of evidence without which laypersons are incapable of forming a correct judgment. There is nothing in this case that shows directly or inferentially some insidious scheme or pattern of gender discrimination that can be uncovered only with the help of expert analysis, such as a statistical demonstration. Rather, this case is straightforward and within the realm of ordinary understanding and comprehension. Thus, Borgida’s testimony did not qualify for admission as expert testimony, and the court abused its discretion in allowing it.

II. Title VII Jury Trial

At the conclusion of the trial, the jury could have reasonably concluded that MMA was a corporation that declined to take any remedial action for acts of sexual harassment by male management employees and, in fact, sometimes retaliated against women who complained of such conduct. That conclusion could be based on inflammatory, inadmissible evidence. With such evidence in mind, the jury could have determined that MMA continued with its discriminatory conduct in Ray’s termination.

To bolster the inflammatory evidence, the jury heard inadmissible expert testimony that gender prejudice was a factor in Ray’s firing.

Considering the quantity and character of all the inadmissible evidence in the trial, we are compelled to conclude that the jury verdict might well have been the product of or substantially influenced by that evidence. Thus, the evidence was unduly prejudicial and deprived appellant of a fair trial because it is at least arguable that the outcome might have been otherwise had only admissible evidence been presented. Therefore, we reverse the verdict in the Title VII action and remand for a new trial.

III. MHRA Bench Trial

a. MHRA Findings and Conclusions of Law

In a bench trial,

[findings of fact * * * shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses.

Minn. R. Civ. P. 52.01. In considering a claim of insufficient evidence, an appellate court’s review is limited to a thorough analysis of the record to determine whether the evidence, when viewed in the light most favorable to the verdict, is sufficient to allow the fact finder to reach the verdict that it did. State v. Webb, 440 N.W.2d 426, 430 (Minn.1989).

Gender discrimination claims under the MHRA are analyzed under the McDonnell-Douglas burden-shifting analysis. Hubbard v. United Press Int’l, Inc., 330 N.W.2d 428, 444 (Minn.1983).

The McDonnell-Douglas analysis involves a three-step process. First, an employee must demonstrate a prima facie case of reprisal by a preponderance of the evidence. Fletcher v. St. Paul Pioneer Press, 589 N.W.2d 96, 101-02 (Minn.1999). To establish a prima facie case of reprisal, an employee must show (1) that he or she engaged in statutorily protected conduct; (2) that the employer took adverse action; and (3) that a causal connection exists between the employee’s conduct and the employer’s action. Hubbard, 330 N.W.2d at 444. If the employee establishes a prima facie case, the burden of production shifts to the employer to articulate a legitimate, nondiscriminatory reason for its employment decision. Id. at 445. Finally, if the employer meets its burden, the employee must prove by a preponderance of the evidence that the legitimate reason offered by the employer was a mere pretext for reprisal. Id. Proof of discrimination may be shown by direct evidence of discriminatory motive, such as where an employer announces he will not consider females for positions. Sigurdson v. Isanti County, 386 N.W.2d 715 (Minn.1986) (citation omitted). In the alternative, where direct evidence is not available a plaintiff may show discrimination by indirect means. Id.

In its thorough and lucid findings of fact, the district court determined that Ray is a member of a protected class; that she established a prima facie case of gender discrimination; that MMA presented evidence of legitimate, nondiscriminatory reasons for Ray’s termination; that MMA’s reasons were pretextual; and that MMA committed unlawful gender discrimination in violation of MHRA when it terminated Ray.

This case clearly turned on a resolution of the credibility of the witnesses. The district court found that MMA’s proffered reasons for Ray’s termination were not credible and were “assembled” to justify the firing:

particularly the testimony of Robert V. Miller raise not just a “suspicion” of mendacity, but rather, a firm belief that defendants have not been truthful with Ray or with the court about its reasons for terminating her and that the real reason for her termination was discrimination.

(Emphasis omitted).

The court ruled that because Ray proved a prima facie case of discrimination and because MMA’s reasons for her termination were false and pretextual, Ray established her claim of intentional and unlawful gender discrimination.

Because of the court’s credibility assessments, its findings of fact are supported by the evidence and are not clearly erroneous. Thus, we affirm the district court’s holding that MMA violated the MHRA by wrongfully terminating Ray’s employment because of her gender.

b. Different Outcomes of the Claims

Although a cursory reading of our holdings might suggest inconsistency, because we have reversed the jury verdict but have affirmed the district court’s ruling, there are pivotal reasons for the differing outcomes. This whs a close case, one that depended almost entirely on the credibility of the witnesses. We are aware from the district court’s detailed findings of fact that, although the district court noted the inadmissible “bad acts” evidence and expert testimony, it did not significantly rely on it in reaching its conclusions. Rather, the district court completely discounted MMA’s reasons for Ray’s termination and was left with no plausible conclusion other than unlawful .discrimination. Thus, we became privy to the district court’s thought process through the court’s careful and thorough findings and are able to ascertain the basis for the court’s decision.

We had no such luxury with the jury. Although there was admissible evidence upon which the jury could have reached the same conclusion as the district court, we do not know whether the jury relied upon that evidence.or what role, if any, the inadmissible evidence played in the jury’s verdict. Untainted by the inflammatory, inadmissible evidence, the jury would have had before it the same untainted evidence that the district court revealed in its findings that it considered and relied upon. That untainted evidence consisted of prima facie proof of discrimination and ostensibly legitimate business reasons that would negate that proof. The case would then depend on a resolution of credibility issues. We cannot say that in an untainted case the jury would have believed Ray and disbelieved MMA. Thus, because we cannot know whether the inflammatory, inadmissible evidence caused the jury to weigh the credibility determinations against MMA, a reversal of the jury verdict is compelled.

IV. Remedies

Because we reverse as to the jury verdict, the only damage issues before us are whether the district court erred in its order for damages under the MHRA. MMA argues that the district court abused its discretion in six ways in fashioning its remedy, claiming that (a) the damages award was excessive; (b) the court should not have allowed Ray to allocate her damages award; (c) the court applied the MHRA multiplier to the front pay in error; (d) the injunctive relief was unsupported by law; (e) the award of attorney fees was excessive; and (f) the punitive damages awarded were not appropriate.

a. Excessive Damages Award

MMA contends that the compensatory and all other damages were excessive.

The discretion to grant a new trial on the ground of excessive damages rests with the trial court, whose determination will only be overturned for abuse of that discretion.

Advanced Training Sys., Inc. v. Caswell Equip. Co., Inc., 352 N.W.2d 1, 11 (Minn.1984) (citation omitted). “The trial judge has ‘large discretion’ in determining if damages are excessive and whether the cure is a remittitur or a new trial.” Hanson v. Chicago, Rock Island & Pac. R.R Co., 345 N.W.2d 736, 739 (Minn.1984) (quotations and citation omitted). But MMA does not carry its burden to show specifically how the district court abused its discretion. Here, the district court, sitting in the best position to determine what is reasonable, stated that “the award of attorney fees, costs, and damages to Ray are reasonable,” and we defer to the district court’s “large discretion,” absent a showing of an abuse; thus, we affirm as provided the amount Of the award.

b. Allocation of Damages

Congress explicitly stated that nothing in Title VII was intended to relieve an employer of liability under state law. 42 U.S.C. § 2000e-7 (2000). The U.S. Supreme Court has made it clear that plaintiffs are entitled to pursue discrimination remedies under both Title VII and state statutes, such as the MHRA. Alexander v. Gardner-Denver Co., 415 U.S. 36, 48, 94 S.Ct. 1011, 1019, 39 L.Ed.2d 147 (1974) (holding that “an individual may pursue independently his rights under both Title VII and other applicable state statutes”).

Here, Ray had claims under both federal and state law, but the issue as to whether Ray can recover under both MHRA ánd Title VII is moot because we have reversed the verdict on the Title VII claim.

c. MHRA Multiplier to Front Pay

Application of the MHRA multiplier is vested in the district court’s discretion. See Phelps v. Commonwealth Land Title Ins. Co., 537 N.W.2d 271, 274 (Minn.1995). This issue presents the question of whether a front-pay award is an element of compensatory damages. Under Title VII, the U.S. Supreme Court has concluded that front pay is not an element of compensatory damages. Pollard v. E.I. du Pont de Nemours & Co., 532 U.S. 843, 848, 121 S.Ct. 1946, 1949, 150 L.Ed.2d 62 (2001). MMA argues, in essence, that the same distinction is true under the MHRA.

The MHRA states in relevant part that where the trier of fact

finds that the [employer] has engaged in an unfair discriminatory practice, the [trier of fact] shall order the [employer] to pay an aggrieved party, who has suffered discrimination, compensatory damages in an amount up to three times the actual damages sustained. In all cases, the [trier of fact] may also order the [employer] to pay an aggrieved party, who has suffered discrimination, damages for mental anguish or suffering

Minn.Stat. § 363.071, subd. 2 (2002). The MHRA does not define the terms “compensatory damages” or “actual damages.” See MinmStat. § 363.01 (2002) (providing no definition for terms “compensatory” or “actual” damages). The phrase “actual damages” is generally regarded as a synonym for compensatory damages. Phelps, 537 N.W.2d at 275.

Minnesota appellate courts have not specifically held that front pay may be multiplied under the MHRA. Rather, this court has stated that

[t]he statute does not specifically state how a district court is to determine whether compensatory damages should be multiplied, and * * * nothing in the legislative history of the statute provides guidance on this question.

Phelps v. Commonwealth Land Title Ins. Co., 520 N.W.2d 748, 752 (Minn.App.1994), aff'd, 537 N.W.2d 271 (Minn.1995). In affirming, the supreme court held that Minn. Stat. §, 363.071, subd. 2, contains no guidelines as to when or under what circumstances a district court may multiply damages and concluded that the district court did not err in its application of the multiplier. Phelps, 537 N.W.2d at 278. It reasoned that courts are unambiguously vested with the discretion to multiply damages, but did not reach the question of whether front pay may be multiplied. The court said that the statute

gives a trial court the option of including back pay as a part of actual damages subject to multiplication, or merely awarding back pay attendant to the hiring, reinstatement, or upgrading of an aggrieved party

Id.

Clearly, the multiplier provision is subject to more than one interpretation. See Mathieu v. Gopher News Co., 273 F.3d 769, 781-82 (8th Cir.2001). The Mathieu court stated that

[although the decision to award front pay lies within the discretion of the district court in order to make the plaintiff
whole, our only real guidance as to what the Minnesota courts might do under similar circumstances comes from the treatment of front pay in the federal courts. ⅜ * * Under these circumstances, we find little justification for a judge to multiply this discretionary award under Minnesota law without precedent or at least better guidance as to the nature of front pay.

Id. at 782. The Mathieu court remanded the award of front pay and requested the magistrate judge to amend his judgment by eliminating the multiplier as to that element of the judgment. Id. at 785.

The issue presented for review here is whether front pay is an element of compensatory damages under the MHRA, and thus is subject to the multiplier. Front pay is “simply money awarded for lost compensation during the period between judgment and reinstatement or in lieu of reinstatement.” Pollard, 532 U.S. at 846, 121 S.Ct. at 1948.

Phelps holds that “subdivision 2 unambiguously vests trial courts with the discretion to multiply damages.” Phelps, 537 N.W.2d at 274. Thus, multiplication of damages may be appropriate when the plaintiff is left uncompensated by an unaugmented award of compensatory damages, such as in the case of loss of potential income or loss of potential raises.

Here, reinstatement was not possible; Ray was left uncompensated for the loss of potential income and raises, and it was reasonably anticipated that she would not be able to secure a comparable job in her field. Because the district court awarded front pay for a reasonable period of three years and district courts are vested with the discretion to multiply damages, front pay can be considered an element of compensation in the context of lost wages. Phelps suggests that front pay may be used to augment an award of compensatory damages; and MinmStat. § 363.071, subd. 2, allows “compensatory damages in an amount up to three times the actual damages sustained.” Thus, we hold that front pay is an' “actual loss” and may be trebled under the MHRA in this case. But the language of Minn.Stat. § 363.071, subd. 2, specifically does not include emotional damages within the damages permitted to be trebled. Thus, the treble of that award is reversed. .

d. Injunctive Relief

MHRA states in relevant part thát the district court

shall issue an order directing the respondent to cease and desist from the unfair discriminatory practice found to exist and to take such affirmative action as in the judgment of the [court that] will effectuate the purposes of this chapter.

Minn.Stat. § 363.071, subd 2.

The district court’s order of annual employee performance evaluations does not interfere with gender-neutral management. The MHRA does require that the court’s actions be necessary to prevent discrimination, and it is reasonable to conclude that annual performance evaluations are necessary to prevent unlawful discrimination. The requirement of annual performance evaluations of employees is most likely a routine practice in contemporary business and may benefit both MMA and its employees by reasonably assuring that employee discipline, transfers, promotions, terminations, and the like have permissible, objective bases. Thus, the court properly exercised its discretion to take the “affirmative action” contemplated by the MHRA as necessary to effectuate the act’s purposes.

e. Attorney Fees'

“On review, this court will not reverse a trial court’s award or denial of attorney fees absent an abuse of discretion” Becker v. Alloy Hardfacing & Eng’g Co., 401 N.W.2d 655, 661 (Minn.1987) (citation omitted). The reasonable value of counsel’s work is a question of fact and we must uphold the district court’s findings on that issue unless they are clearly erroneous. Amerman v. Lakeland Dev. Corp., 295 Minn. 536, 537, 203 N.W.2d 400, 400-01 (1973).

Under the relevant language of the MHRA, “reasonable attorney’s fees” may be awarded. Minn.Stat. § 363.071, subd. 2. MMA argues that any fee must be determined in accordance with the lodestar method that multiplies the reasonable hourly rate times the reasonable number of hours expended. Shepard v. City of St. Paul, 380 N.W.2d 140, 143 (Minn.App.1985). A reasonable rate is based on prevailing market rates in the community. Id.

MMA argues that the district court deviated from the basic rules and erred'by allowing Ray’s attorney fees to be withheld and by adopting top-of-the-market hourly rates, without any factual basis for doing so. In addition, MMA argues that the district court’s discount of Ray’s counsel’s claimed hours by five percent was token, and without any discernible factual basis, and that the district court must specifically scrutinize the hours expended in the claim. See Anderson v. Hunter, Keith, Marshall Co., 417 N.W.2d 619, 629-30 (Minn.1988) (holding that when the reasonableness of “hours expended” component is challenged, the district court should scrutinize it). The record supports the district court’s award of attorney fees of $396,853.90, and thus we uphold the award.

In its 16-page memorandum in support of the award of attorney fees, the court specifically scrutinized the attorney and legal assistant hours, itemized by each individual’s contribution, and determined the reasonableness of those hours. The court also specifically scrutinized historic and current fees, making adjustments as it deemed necessary to arrive at reasonable fees. Because the court properly considered the hours expended and appropriately followed the lodestar method, and because MMA fails to show how the district court abused its discretion, the award of attorney fees is affirmed.

f. Punitive damages

The court awarded punitive damages and a civil penalty. MMA does not specifically challenge the civil penalty but argues that it was improper for the court to award punitive damages.

A decision on the amount of a punitive damage award lies almost exclusively within the province of the fact finder. Stuempges v. Parke, Davis & Co., 297 N.W.2d 252, 259 (Minn.1980). We cannot “disturb the award on appeal unless it is so excessive as to be unreasonable?’ Id. (citation omitted). Because no constitutional issue is raised, our review of an award of punitive damages is whether there was an abuse of discretion. Cooper Indus., Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424, 433, 121 S.Ct. 1678, 1684, 149 L.Ed.2d 674 (2001).

Under the MHRA, punitive damages “may not exceed $8,500” and are “awarded under section 549.20.” Minn.Stat. § 363.071, subd. 2. Minnesota law provides that punitive damages are allowed in civil actions upon clear and convincing evidence that the defendant’s acts

show deliberate disregard for the rights or safety of others.
(b) A defendant has acted with deliberate disregard for the rights or safety of others if the defendant has knowledge of facts or intentionally disregards facts that create a high probability of injury to the rights or safety of others and:
(1) deliberately proceeds to act in conscious or intentional disregard of the high degree of probability of injury to the rights or safety of others; or
(2) deliberately proceeds to act with indifference to the high probability of injury to the rights or safety of others.

Minn.Stat. § 549.20, subd. 1(a) — (b)(2) (2002).

Under the MHRA, punitive damages must be proved by clear and convincing evidence. Minn.Stat. 549.20 (2002).

Here, the district court found that Ray proved

by clear and convincing evidence that MMA acted with deliberate disregard of her rights to be free of discrimination in the workplace, entitling her to an award of punitive damages under the MHRA

and that

given, among other things, this knowledge and the circumstances of Rays termination, including [MMAs] complete failure to investigate the accuracy of the alleged reasons for the misconduct,

that an award of $6,000 is appropriate, given the egregiousness of the conduct and the financial resources of MMA.

DECISION

Because MMA does not establish how the award of $6,000 is so excessive as to be unreasonable, and given the reasoning of the district court, we hold that the court did not abuse its discretion and affirm the award of punitive damages under the MHRA.

Because we find no error in the district courts determination of liability and damages under the MHRA, we affirm.

Because we hold that the cumulative effect of inadmissible evidence in Rays action under Title VII resulted in undue prejudice, we reverse and remand for a new trial on that claim.

Affirmed in part, reversed in part, and remanded.


source: Caselaw Access Project

author: WILLIS, Judge.

license: Public Domain

text:
    In the Matter of Henrietta Ann THOMPSON, as Trustee for the Heirs and Next of Kin of Michael David Demo, Appellant, v. Lennon Virgil HUGHART, Respondent.
    No. C9-02-1608.
    Court of Appeals of Minnesota.
    June 24, 2003.

      Anthony J. Nemo, Meshbesher <& Spence, Ltd., Minneapolis, MN, for appellant.
    Barry V. Voss, Voss & Hickman, P.A., Minneapolis, MN, for respondent.
    Considered and decided by SCHUMACHER, Presiding Judge, WILLIS, Judge, and PORITSKY, Judge.

       Retired judge of the district court, serving as judge of the Minnesota Court of Appeals by appointment pursuant to Minn. Const, art. VI, § 10.

   OPINION

WILLIS, Judge.

Appellant challenges the district court’s denial of her motion for judgment notwithstanding the verdict (JNOV) or, in the alternative, a new trial, arguing that intentionally and wrongfully causing the victim’s death constitutes deliberate disregard for the victim’s rights or safety as a matter of law. By notice of review, respondent challenges the district court’s denial of his motions for JNOV or a new trial and for remittitur, arguing that (1) the evidence does not support the jury’s verdict that he intentionally and wrongfully caused the victim’s death and (2) the compensatory-damages award is excessive. We affirm.

FACTS

Appellant Henrietta Ann Thompson sued respondent Lennon Virgil Hughart, alleging that Hughart shot to death Thompson’s son, Michael David Demo, during an outdoor party on Prairie Island in July 1999. Thompson’s initial complaint, filed in September 1999, sought compensatory damages only. Hughart was charged with murder and assault in connection with Demo’s death, and Thompson’s suit was stayed pending the outcome of the criminal proceedings. After a jury acquitted Hughart of all criminal charges in May 2000, Thompson moved the district court for leave to amend her complaint to include a claim for punitive damages. The district court granted Thompson’s motion, finding that she had offered “prima facie evidence” in support of her motion as is required by Minn.Stat. § 549.191 (2002).

The evidence at trial showed that (1) on the night of Demo’s death, he and Hughart were alone together and close to one another while they walked through a wooded area; (2) Demo was shot to death with a .38 caliber gun from a distance of one to three inches; (3) Hughart fled the area where Demo had been shot and went to his cousin’s house, telling his cousin that he “was in trouble”; (4) in March 2001, Hug-hart was stopped by police while driving, and police found a .38 caliber gun in his car; and (5) a firearms expert “couldn’t exclude” the gun found in Hughart’s car as the gun that killed Demo. Demo was survived by two sons, now ages seven and six.

Hughart called no witnesses and presented no exhibits, but he testified when Thompson called him as a witness. Hug-hart denied killing Demo and testified that on the night of Demo’s death, he did not argue with Demo and did not have a gun with him.

The jury found that Hughart “wrongfully and intentionally” caused Demo’s death and awarded compensatory damages of $515,389.36. The compensatory-damage award consisted of (1) $50,000 for loss of “counsel, guidance, aid, advice,, comfort, assistance, protection, and companionship” up to the time of the verdict; (2) $450,000 for such loss “reasonably certain to occur in the future”; and (3) $15,389.36 for economic losses up to the time of the verdict. The jury awarded no damages for future economic losses and no punitive damages.

Following the jury verdicts, Thompson moved for JNOV or, in the alternative, a new trial. Hughart also moved for JNOV or a new trial, as well as for remittitur. The district court denied both motions, and this appeal follows.

ISSUES

I. Did the district court err by denying appellant’s motion for JNOV?

II. Did the district court err by denying appellant’s motion for a new trial?

III. Did the district court err by denying respondent’s motion for JNOV?

IV. Did the district court abuse its discretion by denying respondent’s motion for a new trial on damages?

V. Did the district court abuse its discretion by denying respondent’s motion for remittitur?

ANALYSIS

I.

Thompson argues that the district court erred by denying her motion for JNOV. The decision whether to grant JNOV is a question of law, Edgewater Motels, Inc. v. Gatzke, 277 N.W.2d 11, 14 (Minn.1979), and we review questions of law de novo, Frost-Benco Elec. Ass’n v. Minnesota Pub. Utils. Comm’n, 358 N.W.2d 639, 642 (Minn.1984). The denial of a motion for JNOV must be affirmed if there is “any competent evidence reasonably tending to sustain the verdict.” Pouliot v. Fitzsimmons, 582 N.W.2d 221, 224 (Minn.1998) (quotation omitted); see also Hughes v. Sinclair Mktg., Inc., 389 N.W.2d 194, 198 (Minn.1986) (holding that a jury verdict will be sustained on any reasonable theory based on the evidence). But if “the jury’s verdict cannot be sustained on any reasonable theory of the evidence,” the moving party is entitled to JNOV as a matter of law. Obst v. Microtron, Inc., 614 N.W.2d 196, 205 (Minn.2000).

Minnesota law provides for an award of punitive damages

only upon clear and convincing evidence that the acts of the defendant show deliberate disregard for the rights or safety of others.
(b) A defendant has acted with deliberate disregard for the rights or safety of others if the defendant has knowledge of facts or intentionally disregards facts that create a high probability of injury to the rights or safety of others and:
(1) deliberately proceeds to act in conscious or intentional disregard of the high degree of probability of injury to the rights or safety of others; or
(2) deliberately proceeds to act with indifference to the high probability of injury to the rights or safety of others.

Minn.Stat. § 549.20, subd. 1 (2002).

Thompson argues that intentionally and unlawfully causing the death of another constitutes “deliberate disregard” as a matter of law. She contends that the jury’s verdicts that Hughart wrongfully and intentionally caused Demo’s death but did not act with deliberate disregard for Demo’s rights or safety are therefore legally inconsistent. But a different burden of proof applied to each verdict. For the wrongful-death claim, the burden of proof of liability was a preponderance of the evidence. See Carpenter v. Nelson, 257 Minn. 424, 427, 101 N.W.2d 918, 921 (1960). Here, the wrongful-death jury instruction provided that the “greater weight of the evidence must support a ‘yes’ answer” to the question of whether Hughart wrongfully and intentionally caused Demo’s death, see 4 Minnesota Practice, CIVJIG 14.15 (1999), and Thompson does not challenge the instruction on appeal.

But to support an award of punitive damages there must be clear and convincing evidence of deliberate disregard for the rights or safety of others. Minn.Stat. § 549.20, subd. 1; see also Weber v. Anderson, 269 N.W.2d 892, 895 (Minn.1978) (noting that satisfaction of the standard of clear and convincing evidence “requires more than a preponderance of the evidence”). The district court so instructed the jury, and we presume that the jury followed the court’s instructions. See State v. Miller, 573 N.W.2d 661, 675 (Minn.1998). And again, Thompson does not claim that the instruction was error. Further, the special-verdict form on punitive damages asked the jury, “By clear and convincing evidence, did Lennon Hughart act with deliberate disregard for the rights or safety of others?” And the jury answered, “No.” Because of the difference between the burdens of proof, the jury could find that Hughart acted wrongfully and intentionally and also find that there was inadequate proof that he acted with deliberate disregard for Demo’s rights or safety.

Thompson also argues that Hughart’s failure to rebut prima facie evidence that he acted with deliberate disregard for Demo’s rights or safety supports a punitive-damages award. A plaintiff may add a claim for punitive damages to a complaint only if the district court finds “prima facie evidence” in support of the claim. Minn.Stat. § 549.191 (2002). Here, when the district court granted Thompson’s motion to amend her complaint, it found that she had presented prima facie evidence of Hughart’s deliberate disregard for Demo’s rights or safety. Thompson contends that Hughart’s failure to “call a single witness or offer a single exhibit” left the prima facie evidence unrebutted.

But Hughart testified, and he denied killing Demo. Further, Thompson’s contention regarding the district court’s finding of prima facie evidence also ignores the difference between the respective burdens of proof. The term prima facie, as it is used in Minn.Stat. 549.191, does not refer to a quantum of evidence, but to a procedure for screening out unmeritorious claims for punitive damages. Swanlund v. Shimano Indus. Corp., 459 N.W.2d 151, 154 (Minn.App.1990), review denied (Minn. Oct. 5, 1990). When the district court found that Thompson had produced prima facie evidence, the court did not necessarily find that she had produced clear and convincing evidence. Rather, this was a decision for the jury, and the special-verdict form shows that the jury found that there was not clear and convincing evidence that Hughart acted with deliberate disregard for Demo’s rights or safety.

II.

Thompson also claims that the district court erred by denying her alternate motion for a new trial. A new trial may be granted when the verdict is not supported by the evidence, errors of law occurred at the trial, or the damages awarded are excessive. Minn. R. Civ. P. 59.01. On appeal from a denial of a motion for a new trial, “the verdict must stand unless it is manifestly and palpably contrary to the evidence, viewed in a light most favorable to the verdict.” ZumBerge v. N. States Power Co., 481 N.W.2d 103, 110 (Minn.App.1992), review denied (Minn. Apr. 29, 1992).

Thompson argues that she is entitled to a new trial on the issue of punitive damages because the jury returned legally inconsistent verdicts. But as we have already determined, because the verdicts were subject to different burdens of proof, they are not inconsistent. We conclude, therefore, that the district court did not err by denying Thompson’s motion for a new trial.

III.

By notice of review, Hughart argues that the district court erred by denying his motion for JNOV. He contends that no facts in the record support the jury’s verdict that he wrongfully and intentionally caused Demo’s death because there is no evidence of motive and no evidence that he had a gun immediately before, during, or after Demo’s death. But Hughart cites no authority for the proposition that Thompson had the burden of showing why Hughart might have killed Demo. Further, the record shows that (1) Hughart and Demo were alone together shortly before Demo was shot; (2) Hughart fled the scene, later telling his cousin that he was “in trouble”; and (3) 20 months later, Hug-hart was in possession of the same caliber gun that was used to kill Demo, and that gun could not be ruled out as the one that killed Demo.

Hughart has not shown that there is no competent evidence reasonably tending to sustain the jury’s verdict on Thompson’s wrongful-death claim. The district court did not, therefore, err by denying Hug-hart’s motion for JNOV.

IV.

Hughart also argues that the district court abused its discretion by denying his alternate motion for a new trial on damages, contending that the jury’s compensatory-damages award is excessive. A new trial on damages will be granted only when the verdict is so inadequate or excessive that it “could only have been rendered on account of passion or prejudice.” Flanagan v. Lindberg, 404 N.W.2d 799, 800 (Minn.1987). The district court’s denial of such a motion will not be reversed unless there was an abuse of discretion. Pulkrabek v. Johnson, 418 N.W.2d 514, 516 (Minn.App.1988), review denied (Minn. May 4, 1988).

Hughart cites nothing in the record to show that the jury’s damage award is the product of passion or prejudice. He contends that the award is excessive because Demo was unemployed at the time of his death. But the jury awarded no damages for future economic losses, and Demo’s employment status is unrelated to the amount that the jury awarded to compensate Demo’s next of kin for the loss of his “counsel, guidance, aid, advice, comfort, assistance, protection, and companionship.” See Ferguson v. Orr, 427 N.W.2d 732, 734 (Minn.App.1988) (stating that damages for loss of support are not limited to income contribution), review denied (Minn. Oct. 26, 1988). Further, trial testimony showed that Demo left two young sons, and the mother of Demo’s sons testified about the impact of his death on the boys. We cannot conclude that the award was excessive as compensation for the loss that Demo’s next of kin suffered because of his death.

Because the jury’s compensatory-damages award is not excessive, the district court did not abuse its discretion by denying Hughart’s motion for a new trial on damages.

V.

Finally, Hughart contends that the district court abused its discretion by denying his motion for remittitur. The district court’s decision to deny a motion for remittitur is within the court’s sound discretion, and we will not disturb its decision on appeal “in the absence of a clear abuse of discretion.” State by Humphrey v. Briggs, 488 N.W.2d 811, 814 (Minn.App.1992), review denied (Minn. Sept. 15, 1992). “The test for setting aside a verdict as excessive is whether it shocks the conscience.” Verhel v. Indep. Sch. Dist. No. 709, 359 N.W.2d 579, 591 (Minn.1984) (citation omitted). The district court must leave the plaintiff with the highest amount permitted by the evidence. Newmaster v. Mahmood, 361 N.W.2d 130, 133 (Minn.App.1985).

Hughart contends that the compensatory-damages award is excessive because Demo was unemployed at the time of his death and there was no evidence presented at trial to support the award. But as we have noted, Demo’s employment status is unrelated to the amount of damages, and Thompson presented evidence of the impact of Demo’s death on his sons. We conclude, therefore, that the district court did not abuse its discretion by denying Hughart’s motion for remittitur.

DECISION

The district court did not err by denying appellant’s motions for JNOV or a new trial. Further, the district court did not err by denying respondent’s motion for JNOV and did not abuse its discretion by denying respondent’s motions for a new trial on damages or for remittitur.

Affirmed.


author: G. BARRY ANDERSON, Judge.

text:
    Fred GUERCIO, Appellant, v. PRODUCTION AUTOMATION CORPORATION, et al., Respondents.
    No. C1-02-2140.
    Court of Appeals of Minnesota.
    June 24, 2003.

      Steve G. Heikens, Minneapolis, MN, for appellant.
    Kerry L. Middleton, Erik F. Hansen, Fafinski, Mark & Johnson, P.A., Eden Prairie, MN, for respondents.
    Considered and decided by ANDERSON, Presiding Judge, SCHUMACHER, Judge, and WILLIS, Judge.
   OPINION

G. BARRY ANDERSON, Judge.

In this employment dispute, appellant challenges summary judgment arguing that genuine issues of material fact exist indicating that (a) respondent Production Automation Corporation (PAC) breached its employment contract with appellant by lowering commission rates from 50% to 40%, (b) PAC breached its contract with appellant by failing to pay him commissions after his termination, (c) PAC breached implied and express covenants of good faith and fair dealing, (d) the statute of limitations does not bar appellant’s claims, (e) PAC violated the Minnesota whistleblower statute by refusing to rehire appellant after he reported PAC to the Department of Health, and (f) respondent Jay Martin tortiously interfered with appellant’s employment contract. We affirm in part, reverse in part, and remand.

FACTS

On March 29, 1993, PAC hired appellant as a sales representative in its electronic-distribution business. At that time, PAC was owned by Tom Martin and had only two sales representatives. Appellant prepared a letter agreement dated April 7, 1993, ultimately signed by Tom Martin that outlined the details of appellant’s employment agreement with PAC. The letter agreement provided that appellant would receive a salary of $3,500 per month until “sales have grown and sustained sales levels such that commissions * * * exceed salary.” At that point, appellant would receive a commission of 50% of the profit from sales that he made and no longer receive a monthly salary. Appellant moved to commission-based compensation after working for approximately six to eight months.

On April 26, 1993, appellant signed a second agreement with PAC that contained a non-compete clause. The document also included a provision that stated that appellant would not be paid commissions for amounts PAC received after his termination. This document did not recite any consideration for the new terms of appellant’s employment.

In early 1998, respondents Jay.Martin and Steve Block purchased PAC from Tom Martin. The new owners decided to change the compensation structure for all sales representatives, including appellant. Under the revised compensation plan, all salespersons received a 40% commission on certain PAC items, rather than the previously paid 50%. In addition, sales of certain lines of products for which commissions were not previously paid would now result in commissions of 10% to 15%.

Throughout his employment at PAC, appellant kept a database of his client contacts on his home computer. Appellant testified that the database included both his contacts developed while working for PAC and also prospective customers that he had identified from past employment. Starting in approximately 1996 or 1997, PAC began requesting that appellant turn over this database. After the ownership changed hands in 1998, Jay Martin repeatedly demanded that appellant turn over the database, claiming that it was PAC’s property. Appellant disagreed and refused to turn it over. Finally, on July 29, 1998, appellant’s employment with PAC was terminated. Appellant testified that Jay Martin said to him, “If you give us the database, we’ll hire you back on the spot. But you are simply terminated.” A few weeks later, while retrieving his personal effects from his office, appellant discussed his employment situation with Jay Martin and turned over the database. Nevertheless, PAC refused to rehire appellant.

In mid-July of 1998, appellant filed an anonymous complaint with the Minnesota Department of Health reporting that PAC permitted smoking in the workplace. The department, by letter dated July 31, 1998, notified the company of violations of state law. PAC, therefore, received notice of the anonymous complaint between the time appellant-was terminated and PAC’s refusal to rehire him a few weeks later. Appellant believes that PAC refused to rehire him because appellant reported PAC’s state-law violations.

Appellant brought the present suit against PAC and its co-owners, alleging numerous causes of action. The district court entered summary judgment in favor of respondents on all issues on January 2, 2002, and this appeal followed.

ISSUE

Did the district court properly enter summary judgment in favor of respondents?

ANALYSIS

On an appeal from summary judgment, we ask two questions: (1) whether there are any genuine issues of material fact and (2) whether the district court erred in its application of the law. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn.1990).

A motion for summary judgment shall be granted when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that either party is entitled to a judgment as a matter of law. On appeal, the reviewing court must view the evidence in the light most favorable to the party against whom judgment was granted.

Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn.1993) (citation omitted). A genuine issue of material fact exists when the non-moving party presents evidence that creates a doubt as to a factual issue that is “probative with respect to an essential element- of the nonmoving party’s case to pérmit reasonable persons to draw different conclusions.” DLH, Inc. v. Russ, 566 N.W.2d 60, 71 (Minn.1997).

A. Reduction of commissions from 50% to 40%

Appellant first argues that as a matter of law PAC breached its employment contract with him by reducing appellant’s commissions from 50% to -40%. The district court held that because appellant was an at-will employee, PAC could modify appellant’s compensation at any time..

It is undisputed that appellant’s employment with PAC was an at-will relationship. Appellant correctly argues that his status as an at-will employee does not, by itself, allow PAC to unilaterally change the terms of his employment. . But this is not what happened. By letter, PAC initiated the change in some sales commissions from 50% to 40%. This constitutes an offer to change the terms of the existing employment agreement. See Stream v. Cont’l Mach., Inc., 261 Minn. 289, 293, 111 N.W.2d 785, 788 (1961) (holding that “[w]here an employee accepts or retains employment with knowledge of new or changed terms or conditions, a contract results embodying the new or changed terms or conditions”).

Appellant’s continued employment as a sales representative after PAC announced the change in his commissions constitutes acceptance of the offer of a unilateral contract. Id. By staying on the job when he was free to leave, appellant supplied “the necessary consideration for the offer.” Id.; see also Pine River State Bank v. Mettille, 333 N.W.2d 622, 627 (Minn.1983) (holding that when the employee “retains employment with knowledge of new or changed conditions, the new or changed conditions may become a contractual obligation”). Because appellant implicitly consented to the change in the terms of his employment contract, his assertion that PAC breached its contract as to this issue is without merit.

B. Payment of commissions after appellant’s termination

Appellant next maintains that PAC breached its contract with him by failing to pay commissions on sales made by appellant that were outstanding when PAC terminated appellant’s employment. The district court relied on the April 26, 1993, letter, signed by appellant, to conclude that PAC did not breach any contract with appellant. After a non-compete provision, that letter provides:

I understand that in return for receiving a wage in excess of my earned commissions for a limited period of time at the commencement of my employment, I will receive no commissions for amounts received by PAC after the termination of my employment.

This language contemplated that because the $3,500 monthly salary paid to appellant during his first few months would be more than the commissions he earned during that time (while he was establishing a client base), PAC would not compensate him for amounts PAC received on appellant’s sales after his termination.

Appellant contends that the document should be strictly analyzed under law addressing the applicability of non-compete agreements, which requires independent consideration for such an agreement to be enforceable. See Nat’l Recruiters, Inc. v. Cashman, 323 N.W.2d 736, 740 (Minn. 1982) (holding that when a restraint of trade covenant is not ancillary to the initial “employment contract, it can be sustained only if supported by independent consideration”). Appellant contends that because there was no independent consideration, the unilateral change precluding the payment of commissions after his employment with PAC ended was invalid. The district court did not address whether it analyzed the April 26 letter under non-compete law or general contract principles. The district court merely stated that appellant had clearly assented to the changed term and that there was no reason to disregard the valid contract.

Although PAC does not concede that independent consideration was lacking here, it argues that the court should sever the non-compete from the commission-payment term and interpret the provisions separately. If these provisions are divisible, PAC maintains, the finding of independent consideration is not necessary to enforce the commissions clause.

If part of an agreement is unenforceable, a court may enforce the rest of the agreement

in favor of a party who did not engage in serious misconduct if the performance as to which the agreement is unenforceable is not an essential part of the agreed exchange.

Restatement (Second) of Contracts § 184(1) (1981). Moreover, entire contract provisions or terms within a particular provision can be severed if the party seeking to enforce the term or provision obtained it in good faith and in accordance with reasonable standards of fair dealing. Id. at § 184(2).

Although Minnesota courts have not construed Restatement (Second) of Contracts § 184, the supreme court has held that the intent of the parties must be ascertained in determining whether contract provisions are severable. Nat’l Farmers Union Prop. & Cas. Co. v. Anderson, 872 N.W.2d 71, 75 (Minn.App.1985). Moreover, though addressing concerns outside of the severability issue, this court has stated that the judge’s role in ascertaining the intention of the parties is as follows:

If the language of a contract is ambiguous, resort may be had to extrinsic evidence in aid of construction. If the extrinsic evidence is conclusive and undisputed, the determination of the meaning of a contract is a function of the trial judge, but if the extrinsic evidence is inconclusive or disputed, the uncertainty and conflict must be resolved at trial.

Deutz & Crow Co., Inc. v. Anderson, 354 N.W.2d 482, 486 (Minn.App.1984).

Outside of Minnesota, there is authority indicating that, in deciding whether a contract is severable, the court should determine if the unenforceable section of the contract was so central to the agreement that the parties would not have agreed absent that provision. Hargrave v. Canadian Valley Elec. Coop., Inc., 792 P.2d 50, 60 (Okla.1990). If the unenforceable clause is not essential to the agreement, “the offending provision will be excised and the remaining portions of the contract will be enforced.” Id; see also Holloway v. Faw, Casson & Co., 319 Md. 324, 572 A.2d 510, 518 (1990) (citing the Restatement (Second) of Contracts § 184 and holding that a post-termination payment clause was a separate, free-standing remedy and thus “severable in the classic sense”).

On these undisputed facts, we hold as a matter of law that the parties did not intend for the non-compete clause in the April 26 agreement to be severed from the commission clause. First, the contract does not contain a severability clause and nothing within the four corners of the document indicates that the two provisions should be interpreted separately. Second, under the Restatement and Hargrave, although respondents did not attempt to enforce the non-compete agreement, they have the burden, for summary-judgment purposes, of showing that it was not criti-' cal to the agreement. Respondents have not sustained this burden.

The non-compete provision is placed earlier in the agreement and there is little doubt that this clause was an important term in the April 26 document. Concluding that one of the two terms is important to the agreement of the parties is not the same as concluding that the remaining term is unimportant. The employer drafted this document. The employer chose to include terms it thought were significant to the agreement and insisted on execution of the agreement by appellant. Appellant argues persuasively that he regarded both terms as significant and other than denying these assertions, respondents offer no evidence to show otherwise. Perhaps a finder of fact, hearing all of the evidence, will conclude differently. But for summary-judgment purposes and based on the record before this court, we can only conclude that both terms were essential to the agreement.

Because we hold that the commission terms as a matter of law and based on undisputed facts are not severable, we must now determine whether independent consideration exists to support the entire April 26 agreement. Independent consideration must exist to support a non-compete entered into after the original employment contract. Nat’l Recruiters, 323 N.W.2d at 740. PAC claims that appellant’s transition from part-time to full-time employment was contingent on his execution of the April 26 agreement and therefore provides the necessary independent consideration. It appears that appellant did make a transition to full-time employment at approximately the time he signed this agreement. But it is unclear from his deposition testimony whether full-time employment was contingent on signing this agreement or even if that employment was related to the agreement. Appellant’s testimony is as follows:

A. I felt if I didn’t sign it, I would be fired.
Q. (respondent’s counsel): And that was before you went full time?
A. That was after I started working. Yes.
Q. But it was before you went full time, right?
A. I was working on a partial basis. Yes.
Q. And when you say “partial basis,” I think earlier we were able to agree that you mean part time by that?
A. It was about 60 hours.
Q. Over what period of time? 60 hours a week?
A. It was 60 hours worth of work before I signed the noncompete.

Appellant also later admitted that he worked approximately 60 hours during the month of April. Respondent’s counsel clarified this point by asking:

Q. And at the time you signed [the April 26 agreement], you still were working on a part-time basis for PAC, right?
A. Yes

The questioning here does not indicate when appellant began working a regular 40-hour workweek or whether the transition to full-time employment was contingent on signing the April 26 document. Further, a review of the deposition excerpts of Steve Block and Jay Martin reveals only a cursory discussion of appellant’s non-compete agreement; for example, the testimony indicated that the former owner, Tom Martin, required that all employees sign a non-compete. Neither of these depositions provides any certainty as to whether appellant transferred to full-time work as a result of signing this agreement. Finally, nothing in the April 7 agreement, which addressed the general terms of appellant’s employment with PAC, mentions working part-time. Nor does the April 26 agreement recite consideration in any form, including a transition to full-time employment.

Whether independent consideration existed to support the parties’ April 26 agreement is a material fact issue that is very much in dispute. Accordingly, we reverse the district court on this issue and remand for trial on the issue of whether PAC breached its employment agreement with appellant by failing to pay commission amounts to him after his termination. Because our disposition of this issue renders moot many of appellant’s other allegations of error, we do not address whether the April 26 agreement is ambiguous, whether the equities favor payment of post-termination commissions to appellant, or whether the doctrine of procuring cause is applicable here.

C. Breach of implied covenant of good faith and fair dealing

In count two of his complaint, appellant alleges that an implied covenant of good faith and fair dealing was created by PAC’s various actions, including inducing appellant to turn over his database on the promise he would be rehired. The district court held that there is not a separate cause of action for the breach of the covenant of good faith and fair dealing under these facts, and we affirm that holding.

Appellant’s reliance on this doctrine is misplaced for a variety of reasons. First, appellant’s argument that Minnesota reads into all contracts an implied term of good faith is erroneous. Eklund v. Vincent Brass and Alum. Co., 351 N.W.2d 371, 378 (Minn.App.1984). Minnesota law has not read an implied covenant of good faith and fair dealing into employment contracts when considering a termination. Hunt v. IBM Mid Am. Employees Fed. Credit Union, 384 N.W.2d 853, 858 (Minn.1986). Hunt also observed that our “sister jurisdictions” have also rejected a covenant to terminate only in good faith. Id. at 858. No such covenant in the context of this case exists and appellant’s argument fails.

D. Statute of Limitations

Under MinmStat. § 541.07(5) (2002), actions to recover wages, including commissions, must be commenced within two years. PAC argues that appellant’s assertion that PAC breached its employment contract by changing his commission plan is barred by the two-year statute of limitations.

A breach-of-contract cause of action accrues generally at the time of the breach, even if the damages do not manifest themselves until later. Estate of Riedel by Mirick v. Life Care Ret. Cmtys., Inc., 505 N.W.2d 78, 81 (Minn.App.1993). But under Minnesota law, a contractual cause of action for lost wages arises each time a payment is due, but is not paid. McGoldrick v. DataTrak Intern., Inc., 42 F.Supp.2d 893, 898 (D.Minn.1999).

Appellant argues that each payment that PAC failed to make to him under the old compensation plan constituted a separate breach of contract, and, thus, a new statute of limitations began for each payment. We view appellant’s cause of action relating to the commission changes as a lost-wages suit, and thus at least part of his claim is not time barred. Because PAC made its last payment to appellant on August 8, 1999, the suit was timely as to payments that appellant alleges should have been paid to him during the two years prior to the commencement of appellant’s suit.

E. Whistleblower claim

The Minnesota whistleblower act protects an employee who reports, in good faith, “a violation or suspected violation of any federal or state law ⅜ * * to an employer or any governmental body or law enforcement official.” Minn.Stat. § 181.932, subd. 1(a) (2002).

To establish a prima facie case of retaliatory discharge, an employee must show: (1) statutorily-protected conduct by the employee; (2) adverse employment action by the employer; and (3) a causal connection between the two.

Cokley v. City of Otsego, 623 N.W.2d 625, 630 (Minn.App.2001) (quotation omitted), review denied (Minn. May 15, 2001).

Appellant admits that the alleged adverse employment action by PAC' — refusing to rehire appellant after he turned over the customer database — occurred after he was terminated and was, therefore, no longer an employee. Finding that the whistleblower act’s language refers only to current employees and not to former employees, the district court granted summary judgment for respondents on this claim.

Appellant points to federal case law construing Title VII of the Civil Rights Act of 1964 as support for his assertion that former employees should also be within the protections of the Minnesota whistleblower statute. Robinson v. Shell Oil Co., 519 U.S. 337, 117 S.Ct. 843, 136 L.Ed.2d 808 (1997). Section 704(a) of Title VII makes it unlawful “for any employer to discriminate against any of its employees or applicants for employment” who have availed themselves of Title VII protections or assisted others to do so. Id. at 339, 117 S.Ct. at 845 (quoting 78 Stat. 257, as amended, 42 U.S.C. § 2000e-3(a)). The Supreme Court determined that the use of the term “employees” was ambiguous when read in the context of other Title VII provisions that use the term to mean something more than “current employees.” Id. at 342-43, 117 S.Ct. at 847. Because the term “employee” was not always used to exclude former employees, the court concluded that the term standing alone is “necessarily ambiguous and each section must be analyzed to determine whether the context gives the term a further meaning.” Id. at 343-44, 117 S.Ct. at 847. Examining the term “employees” in § 704(a), the court held that the primary purpose of that section and the “broader context of Title VII” established that former employees are covered. Id. at 346, 117 S.Ct. at 849.

Robinson, however, addressed federal law analyzing Title VII claims and not Minnesota law interpreting the Minnesota whistleblower act. In addition, even were we to adopt Robinson as controlling here, appellant has not pointed to other sections in the whistleblower act that use the term “employee” to refer to both current and former employees. Since the whistleblower act does not employ the term “employee” in that manner, the statute is not ambiguous in the way Robinson declared Title VII was. Indeed, Minnesota law defines “employee” as “a person who performs services for hire in Minnesota for an employer.” MinmStat. § 181.931, subd. 2 (2002). Because appellant cannot show ambiguity, the whistleblower act only applies to current employees, and the claim concerning this issue was properly dismissed. See Robinson, 519 U.S. at 341, 117 S.Ct. at 846 (holding that at “first blush” and without further statutory ambiguity, “employees” would seem “to refer to those having an existing employment relationship with the employer in question.”). Because we conclude that the Minnesota whistleblower act does not protect former employees, we need not consider whether appellant proved the other elements to establish a prima-facie violation of the act.

F. Tortious interference with contract

Lastly, appellant contends that the district court erred in dismissing his claim against respondent Jay Martin for tortious interference with contract. Appellant is correct that an at-will employee may maintain a cause of action for tortious interference with contract. Nordling v. N. States Power Co., 478 N.W.2d 498, 505 (Minn.1991). Tortious interference requires:

(1) the existence of a contract; (2) the alleged wrongdoer’s knowledge of the contract; (3) his intentional procurement of its breach; (4) without justification; and (5) damages resulting therefrom.

Bouten v. Richard Miller Homes, Inc., 321 N.W.2d 895, 900 (Minn.1982).

A corporate officer or manager, however, has a qualified privilege to interfere with contracts between the corporate entity and its employees. Nordling, 478 N.W.2d at 505. In such cases, if an employee is terminated by the corporate officer, “the actions are those of the corporation” and the employee’s complaint is properly lodged against the company for breach of contract, not against the agent used to carry out the corporation’s action. Id. The justification for such a rule is that

[t]o allow the officer or agent to be sued and to be personally liable would chill corporate personnel from performing their duties and would be contrary to the limited liability accorded incorporation.

Id. at 505-06. The supreme court has recognized, however, that a corporate officer or agent can be liable for interference with contract if he or she acts outside the scope of his or her duties. Id. at 506. If the corporate officer’s actions are motivated primarily by actual malice, i.e., “bad faith, * * * personal ill-will, spite, hostility, or a deliberate intent to harm” the employee, the officer’s privilege from liability will be lost. Id. at 507.

To establish actual malice, appellant points to, inter alia, Jay Martin’s continued attempts to obtain appellant’s customer database, Jay Martin’s promise to rehire appellant if he gave PAC the database and Jay Martin’s subsequent failure to do so, and the reduction in appellant’s commission rates. The district court rejected appellant’s arguments and concluded that there was no genuine issue of material fact to overcome Jay Martin’s privilege. The court held that there was no showing of how the commission change, which affected all sales personnel, was directed at appellant or how Jay Martin acted with malice by attempting to obtain the database.

We affirm the district court’s conclusions because, on the record before us, there is no showing that Jay Martin acted with actual malice toward appellant. The attempts to obtain the database from appellant were acts done to benefit PAC’s overall business fortunes. Likewise, there was no showing that the change in commission rates was motivated by Jay Martin’s personal animosity toward appellant.

DECISION

We affirm the district court on all issues except the question of whether appellant is owed any commissions on sales that were outstanding when PAC terminated appellant’s employment. For summary-judgment purposes, the April 26 agreement as a matter of law is not severable and there are genuine issues of material fact as to whether independent consideration existed to support this agreement. Accordingly, we remand to the district court to determine whether appellant is owed commission amounts and whether independent consideration exists to make the commission-payment provision in the April 26 agreement enforceable.

Affirmed in part, reversed in part, and remanded.

      . The district court apparently mistakenly believed that appellant would continue to receive both his salary and a commission after transitioning to commission-based compensation. This is directly refuted by both parties' briefs.

      . The blue-pencil doctrine allows a court that determines that a non-compete agreement is overly broad or unreasonable to modify the contract to fit the law. Hilligoss v. Cargill,

        Inc., 649 N.W.2d 142, 147 n. 8 (Minn.2002); Davies & Davies Agency, Inc. v. Davies, 298 N.W.2d 127, 131 n. 1 (Minn.1980). The justification for this judicial rule is that “a court is merely enforcing the legal parts of a divisible contract rather than making a new contract for the parties.” Bess v. Bothman, 257 N.W.2d 791, 794 (Minn.1977) (citing 6A Cor-bin, Contracts, § 1390). Because the blue-pencil rule is invoked when a court reshapes an unreasonable clause, it is not applicable here. The district court did not modify the April 26 letter; it merely gave effect to that contract as it interpreted it.

      . We also note that although the parties did not cite the case of Lapadat v. Clapp-Thomssen Co., 397 N.W.2d 606 (Minn.App.1986), it arguably supports the nonpayment of commissions to appellant. In Lapadat, this court held that "[a] party to an agreement terminable at will is not entitled to payment of commissions after the employment is terminated.” Id. at 609 (citing Buysse v. Paine, Webber, Jackson & Curtis, Inc., 623 F.2d 1244, 1249-50 (8th Cir.1980) (applying Minnesota law)). But Buysse addressed the different issue of terminating an at-will employee and did not make a statement of law relating to commission payments found anywhere else in Minnesota law. Buysse, 623 F.2d at 1249-50. We therefore do not find it controlling authority.

      . Appellant’s argument that the temporal proximity of a suspicious series of events can be a factor to consider in determining whether his complaint motivated the adverse employment decision not to rehire him is accurate. Stever v. Indep. Sch. Dist. No. 625, St. Paul, 943 F.2d 845, 852 (8th Cir.1991). But this does not change his status as a former employee, and thus he is outside the protections of Minn.Stat. § 181.932.