United States Court of Appeals,

                                              Fifth Circuit.

                                             No. 91-7245.

                                   Henry BROWN, Plaintiff-Appellant,

                                                   v.

          EAST MISSISSIPPI ELECTRIC POWER ASSOCIATION, Defendant-Appellee.

                                             May 4, 1993.

Appeal from the United States District Court for the Southern District of Mississippi.

Before POLITZ, Chief Judge, WISDOM and WIENER, Circuit Judges.

          POLITZ, Chief Judge:

          Henry Brown appeals an adverse judgment in his race discrimination suit against his employer,

East Mississippi Electric Power Association (EMEPA). For the reasons assigned we reverse and

render on liability and remand for consideration of remedy.

                                              Background

          After 20 years employment with EMEPA, Brown became the company's first African-

American serviceman. Within a year he was given the option of returning to the line crew or

dismissal. EMEPA contends that he resigned; Brown maintains that he was fired. EMEPA claims

the adverse action was prompted by customer complaints;                Brown attributes it to racial

discrimination. After satisfying administrative prerequisites, Brown filed suit under Title VII of the

Civil Rights Act of 1964, as amended.1 The case was tried to the court, which found no

discrimination. This appeal followed.

          The incidents culminating in Brown's separation from EMEPA began in August 1988, when

he received a written warning for "attitude and abusive manner" in dealing with customers. The

triggering incident concerned service disconnection at the trailer residence of a Shirley May. Mrs.

May and her husband Jerry were in the process of divorcing. She had moved out of the trailer and

ordered service terminated; he wanted to keep the trailer but was unable to pay the notes and,

   1
       42 U.S.C. § 2000e et seq.
according to his wife, had a "hot temper at the time."

         Brown arrived on a Friday morning when Mr. May was home alone. May protested

disconnection so Brown withdrew to call his supervisor, Leon Pippen, for further instruct ions.

Pippen directed him to disconnect. When Brown returned in the afternoon Mrs. May also was at the

trailer. Mr. May again protested but stopped after his wife interceded. According to Mrs. May's trial

testimony, her husband was "very agitated, cussing, telling him he wasn't going to cut the power;"

Brown "was just kind of standing by waiting for the friction to stop."

         Mrs. May telephoned EMEPA the next business day to apologize for her husband's behavior;

her message purportedly never reached EMEPA General Manager Emmett Murray. Murray,

however, did receive a visit from an angry Mr. May. Claiming that Bro wn had cursed him, May

threatened to kill Brown if he returned to the property. After consulting with Pippen and meeting

with Brown, Murray suggested that Brown return to the line crew. Brown refused; Murray switched

his service territory and warned him that another customer complaint would result in termination.

Brown filed a charge of discrimination with the Equal Employment Opportunity Commission.

         Murray met informally with Brown in March 1989 to discuss attitude problems. According

to Murray, Brown's disgruntled attitude had prompted complaints from other employees and was

carrying over into dealings with customers. Brown said the problem was not his attitude but rather

his supervisor, Pippen. Although it is contested how explicit Bro wn was at this meeting, Brown

knew that Pippen, who was white, referred to African-Americans as "niggers." He had overheard

Pippen use this slur in conversation with other whites. Pippen had used it directly to him, threatening

to answer "What do you want, nigger?" if Brown addressed him improperly over the radio.2 At the

time of the March meeting, Murray knew that Pippen had used such language. Murray, however,

said he assumed that Pippen had stopped using the racial slur after he was reprimanded for such

usage.

         Brown's final "infraction" occurred on March 17, 1989 and involved a Bill McKinnon.

   2
    Brown testified that Pippen was angered because he did not use the appellation "Mr." when
addressing Pippen. The white servicemen likewise did not use the appellation but Pippen voiced
no objection to them. Pippen insisted that Brown deliberately mispronounced his name.
According to McKinnon, Brown had backed up too fast in his driveway on a service call, spinning

wheels and throwing gravel. When McKinnon objected, Brown allegedly told him not to be a "smart

ass" and continued to argue with him. Brown denied that he had cursed or argued with McKinnon,

testifying at trial that McKinnon had addressed him as "nigger."

        McKinnon complained to Pippen, a long-time acquaintance, threatening that "something may

happen" to Brown if he returned to McKinnon's property. Pippen reported the incident to Murray,

who asked that McKinnon sign a written statement in the presence of a company attorney.

McKinnon complied. Murray, Pippen, and assistant manager Wayne Henson spoke with Brown to

elicit his side of the story.

        After leaving the meeting, Brown maintains that McKinnon followed him to a truck stop,

where Brown stopped to telephone his superiors. He reached Henson, informed him that McKinnon

was following him, asked Henson if he knew what "kind of a character" McKinnon was, and offered

to put someone on the telephone for corroboration. Henson declined. At trial, several witnesses

testified that McKinnon's reputation for peacefulness and truthfulness was bad. These witnesses

included a white EMEPA serviceman and a retired white EMEPA line foreman. Notwithstanding,

Murray, Pippen, and Henson claimed that they were unaware of McKinnon's reputation when they

decided Brown's fate.

        Murray, Pippen, and Henson, all of whom were white, decided to reassign Brown from

serviceman to a line crew. They so informed Brown at a meeting which Brown surreptitiously

tape-recorded. Angered and upset by what he considered a demotion, Brown charged retaliation for

his prior EEOC complaint. It was decided that Brown would take a two-week vacation. The parties

dispute whether Brown resigned or was to consider taking the new work assignment during his time

off. About a week later Murray wrote Brown, accepting his resignation. Brown telephoned to say

he had not resigned but Murray refused to discuss the matter. Brown filed a second EEOC charge

and, after receiving notices of right to sue with respect to this charge and his prior one, brought the

instant suit.

                                               Analysis
          At the heart of this appeal is the significance of Pippen's routine use of the term "nigger."

EMEPA would dismiss it as isolated remarks. Brown maintains that it is direct evidence of

discrimination and that the district court consequently erred in failing to apply the Price Waterhouse3

proof methodology.

          When a plaintiff presents credible direct evidence that discriminatory animus in part motivated

or was a substantial factor in the contested employment action, the burden of proof shifts to the

employer to establish by a preponderance of the evidence that the same decision would have been

made regardless of the forbidden factor.4 Direct evidence is evidence which, if believed, proves the

fact without inference or presumption.5 We conclude that Brown's evidence passes muster.

          It is uncontroverted that Pippen used the term "nigger" both to refer to Brown in particular

and to black persons in general. According to Kim Culpepper, a white serviceman, Pippen used the

term "basically any time there was a reference to a black." Pippen testified that he stopped after

Murray reprimanded him in August 1988 but Culpepper disagreed; he testified that he observed no

change whatever.

          Brown offered evidence of the following instances of racial remarks by Pippen. Thomas

Hamner, a retired white line foreman, testified that Pippen had told him, "I had to dust my little nigger

again today," with reference to Brown. Jimmy Gressett, a white right-of-way supervisor, testified

that Pippen had said the same to him. Louvenia Ford, a black service clerk, complained to Murray

in August 1988 after she overheard Pippen say "I haven't seen my little nigger friend this morning"

and two cashiers told her Pippen had used the slur with reference to her. It was Ford's complaint that

prompted Murray's reprimand of Pippen. In addition to the aforementioned threat to say "What do

you want, nigger?" over the radio, Brown testified to overhearing Pippen, discussing a recent car

accident, say "I felt like getting my gun and killing that nigger," and, talking with a white serviceman,

"You should have hooked that power up for that nigger. You know how they are."

   3
       Price Waterhouse v. Hopkins, 

, 

, 

(1989).
   4
       Price 

; Vaughn v. Edel, 

(5th Cir.1990).
   5
       Burns v. Gadsden State Community College, 

(11th Cir.1990).
          Pippen's routine use o f racial slurs constitutes direct evidence that racial animus was a

motivating factor in the contested disciplinary decisions. Pippen's use of the racial epithet was not,

as EMEPA suggests, an innocent habit. Unlike certain age-related comments which we have found

too vague to constitute evidence of discrimination,6 the term "nigger" is a universally recognized

opprobrium, stigmatizing African-Americans because o f their race. That Pippen usually was

circumspect in using the term in the presence of African-Americans underscores that he knew it was

insulting. Nonetheless, he persisted in demeaning African-Americans by using it among whites. This

is racism.7

          Pippen's racism infected the disciplinary decisions of which Brown complains. Pippen directly

participated in those decisions, first consulting with Murray about the Jerry May incident and then

serving as a member of the triumvirate that decided to remove Brown from his serviceman position

after the McKinnon complaint. Pippen's "I had to dust my little nigger" comment about other

instances in which he disciplined Brown demonstrates that his racism distorted Brown's employment

record and extended to decisions of the type at bar. The evidence thus justifies shifting the burden

to EMEPA to prove it would have made the same decision regardless of Brown's race.8 Our Seventh

Circuit colleagues have likewise recognized this shifting of the burden of proof.9

   6
       See, e.g., Turner v. North American Rubber, Inc., 

, (5th Cir.1992).
   7
   See Kendall v. Block, 

(5th Cir.1987); Hull v. Cuyahoga Valley Bd. of Educ.,

(6th Cir.), cert. denied, --- U.S. ----, 

, 

(1991);
Hunter v. Allis-Chalmers Corp., Engine Division, 

, 1423 (7th Cir.1986).
   8
    See Kendall v. 

(calling an employee "nigger" may be direct evidence of
discrimination); E.E.O.C. v. Alton Packaging Corp., 

(11th Cir.1990) (general
manager's statement that if it were his company he would not hire blacks is direct evidence of
discriminatory animus in failing to promote the plaintiff); Brewer v. Muscle Shoals Bd. of Educ.,

(11th Cir.1986) (school superintendent's comment that he did not want to appoint
plaintiff to an administrative position because he did not want to see the school system
"nigger-rigged" is direct evidence of discriminatory animus, even though the comment was made
with regard to an incident occurring after the alleged violation; Bibbs v. Block, 

(8th Cir.1985) (en banc ) (selection committee member's characterization of plaintiff as a "black
militant" and reference to another black employee as "nigger" was direct evidence of
discrimination in failure to promote), overruled on other grounds by Price 

.
   9
    Visser v. Packer Engineering Associates, Inc., 

, 658 (7th Cir.1991) (en banc)
("once the plaintiff in a civil rights case has shown that a forbidden purpose was a substantial
factor in the decision to fire him, the burden shifts to the employer to persuade the court that the
           Because the district court followed the McDonnell Douglas10/Burdine framework, it did not

consider whether EMEPA had proven by a prepo nderance of the evidence that it would have

removed Brown from his serviceman position if the illegal consideration of race had not played a role.

We might remand for this consideration.11 After a close review of the record, however, we conclude

that the evidence permits of only one result: EMEPA failed in this endeavor. That being so, a

prudential concern for scarce judicial resources at the trial and appellate level compels our resolution

now.

          The evidence at trial exonerated Brown of the misconduct for which the company purported

to discipline him. Mrs. May testified that she made it known to EMEPA before the disciplining of

Brown that it was her husband, not Brown, who was abusive. Several witnesses testified to

McKinnon's       bad   reputation   for   peacefulness   and   veracity,   a   fact   that   his   close

acquaintance—Pippen—knew or should have known. The relevant inquiry is whether Murray,

Henson, and Pippen reasonably believed the May and McKinnon complaints, not whether the

complaints eventually proved to be accurate. But the reasonableness of their belief obviously is

probative of their bona fides. Further, if they credited May and McKinnon instead of Brown for

racial reasons, EMEPA's burden of proof has not been acquitted.12 Pippen's testimony that he did not

know of McKinnon's unsavory reputation is nothing short of incredible in light of their 25-year

acquaintanceship. Brown's ease in securing critical reputation witnesses is a telling factor. Two of

the three EMEPA employees Brown called to testify on other matters also knew of McKinnon's poor

reputation. We find Henson's cavalier attitude toward McKinnon's hostile conduct towards Brown

of surpassing puzzlement. Finally, one cannot be but skeptical of the apparent facility with which

customer complaints about Brown reached Murray so readily but Mrs. May's telephone call of



plaintiff would have been fired anyway").
   10
        McDonnell Douglas Corp. v. Green, 

, 

, 

(1973).
   11
        See North Mississippi Communications, Inc. v. Jones, 

(5th Cir.1989).
   12
     Burdine, citing Loeb v. Textron, Inc., 

(1st Cir.1979); Turner v. Texas
Instruments, Inc., 

(5th Cir.1977), overruled on other grounds by Burdine.
apology for her husband's behavior did not.

        EMEPA has not proven its contention that Murray was not influenced by racial factors.

Louvenia Ford testified without contradiction that Murray minimized her complaint about Pippen's

use of racial slurs. Although he ostensibly reprimanded Pippen, Murray apparently never considered

that Pippen's blatantly racist attitudes might explain his criticism of Brown and might undermine the

objectivity of his advice with respect to Brown's position with the company.

        Also informing our judgment is Brown's circumstantial evidence of discrimination. In 1982

the company received an anonymous letter complaining of mistreatment of black customers by

Clarence Nance, a white serviceman. That letter was placed in Nance's personnel file but the only

discipline Nance received was a verbal warning from his immediate supervisor. In 1990, another

black customer complained. This time Nance was warned that he would be transferred if there was

another complaint but, unlike Brown, he was not moved to a different service territory nor was any

other disciplinary action imposed.

        The record reflects that African-American employees were 1-13 concentrated

disproportionately on right-of-way crews, engaged in land clearance and maintenance. Statistics

showed that 47 percent of those discharged by EMEPA between 1986 and 1990 were black while

the work force was only 25 percent African-American.13 The record before us, considered as a

whole, requires a finding of discrimination; EMEPA did not prove it would have treated Brown the

same were he white.14

        The parties dispute whether Brown resigned or was fired. The district court found that

Brown quit but, because it found no discrimination, did not decide whether he had been

constructively discharged. Again, there is no need for a remand. The evidence requires a finding of


   13
     The district court found the sample size too small to be significant. The fault with the size of
the sample, however, lies with EMEPA, which refused Brown's request for statistics from prior
years.
   14
     Our disposition moots Brown's contention that section 107(a) of the Civil Rights Act of
1991, Pub.L. No. 102-166, 105 Stat. 1071-1100, should be applied to his case. In any event, our
decision in Rowe v. Sullivan, 

(5th Cir.1992), bars retroactive application of this
substantive provision of the Act.
constructive discharge.

          A plaintiff who resigns after demotion has been constructively discharged if a reasonable

employee in the plaintiff's position would have believed that the demotion was a harbinger of

dismissal.15 Such is the situation here. As the district court found, Brown reasonably believed that

the transfer from serviceman back to the line crew was a demotion. He also believed that the

demotion signaled the company's intent to fire him, as indicated in the tape-recorded meeting. From

Brown's perspective, that belief was eminently reasonable. As Brown saw it, management had taken

the word of two white problem customers over his and was demoting him for conduct of which he

was not guilty. His belief that a discharge was imminent was borne out by developments. One week

into the two-week period that he ostensibly was given to consider accepting his reassignment Murray

wrote him, accepting his resignation, and thereafter refused to discuss his decision when Brown called

to say he had not resigned.

          For the foregoing reasons, we REVERSE the district court and RENDER judgment on

liability for the plaintiff. This matter is REMANDED to the district court for consideration of the

appropriate remedy.




   15
        Stephens v. The C.I.T. Group/Equipment Financing, Inc., 

(5th Cir.1992).