Wood v. Handy & Harman Co. , 318 F. App'x 602 ( 2008 )

FILED
United States Court of Appeals
Tenth Circuit
August 1, 2008
Elisabeth A. Shumaker
Clerk of Court
UNITED STATES COURT OF APPEALS
TENTH CIRCUIT
TIM F. WOOD,
Plaintiff-Appellant,
No. 06-5226
v.
(D.C. No. 4:05-CV-00532-TCK-FHM)
(N.D. Okla.)
HANDY & HARMAN CO. and
CONTINENTAL INDUSTRIES, INC.,
Defendants-Appellees.
ORDER AND JUDGMENT *
Before BRISCOE, SEYMOUR, and LUCERO, Circuit Judges.
Plaintiff-appellant Tim F. Wood, a former vice president at Continental
Industries, Inc. (“Continental”) in Tulsa, Oklahoma, appeals the district court’s
grant of summary judgment against him on several claims arising from the
termination of his employment. Exercising jurisdiction pursuant to 28 U.S.C.
§ 1291, we affirm.
*
This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. This court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 32.1.
I
Wood was employed at Continental, a subsidiary of Handy & Harman
Company (“H&H”), from 1995 until his termination on November 25, 2003. At
the time of his termination, Wood was Vice President of Operations at
Continental’s Tulsa, Oklahoma headquarters, and he reported directly to H&H
President Dan Murphy. According to Wood, he was fired either in retaliation for
defending the rights of a subordinate under the Family and Medical Leave Act of
1993 (“FMLA”), or in retaliation for reporting an environmental issue to an H&H
manager. Continental and H&H (collectively “defendants”) maintain that Wood
was actually fired because he had a conflict of interest, as he was running an
outside business while employed at Continental.
Wood’s FMLA claim arises from an exchange that occurred one week
before his termination. Wood was approached by Amy Brogle, 1 an employee of a
different H&H subsidiary who was assigned to act as the temporary head of
Human Resources at Continental. Brogle asked Wood to deliver a memo (the
“Carter memo”) to Ruby Carter, a 29-year employee of Continental whom Wood
indirectly supervised. Carter was on leave due to her husband’s terminal illness.
The memo informed Carter that, contrary to her direct supervisor’s assurance, her
leave was not covered by the FMLA because she had already exhausted her
FMLA entitlement by taking a prior medical leave.
1
The record also refers to Brogle as “Amy Hoagland” and “Amy Ratura.”
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When Wood read the Carter memo, he concluded that it was inconsistent
with Continental’s usual practices regarding employee leave and that it
incorrectly “challenged” Carter’s right to FMLA protection during her leave. He
told Brogle that he disagreed with the memo and would not deliver it. Brogle
reacted angrily to this objection and left Wood’s office. She later told another
employee, Joanne Horne, that Wood was an “[expletive] idiot.” According to
Horne, she “had never seen [Brogle] so angry.”
Sometime after the confrontation between Wood and Brogle over the Carter
memo, 2 Murphy left Brogle a message requesting that she call him to discuss
Wood’s job performance. Brogle promptly returned the call, and reported the
following concerns: (1) “it was increasingly difficult . . . to locate Mr. Wood in
order to deal with matters relating to H[uman] R[esources] at Continental,” (2)
Wood “had a personal business on the side outside of his full-time role at
Continental,” and (3) Wood “was not consistent in how he applied formal policies
and practices in the workplace with the employees.” During discovery, Brogle
denied telling Murphy specifically about Wood’s refusal to deliver the Carter
memo. For his part, Murphy stated that he did not remember Brogle describing
2
Although the record does not reveal the exact date of this conversation, it
indicates that the call occurred no more than “days” before Wood’s termination
on November 25. Viewing the facts in the light most favorable to Wood, the
record thus supports an inference that the call occurred after the memo incident.
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any particular failure to follow her instructions, but admitted that he did not
remember “the specifics” of his conversation with Brogle.
Wood also alleges that he was fired for reporting a potential environmental
problem on Continental property. Around the same time as the Carter memo
incident, Wood informed David Kelly, Environmental Health and Safety Director
for H&H, that he had been alerted to the smell of solvent on Continental property.
He told Kelly that he feared the odor might indicate a toxic spill or leak. Kelly
told Wood that “he would take control of the situation.” Wood heard nothing
more about the matter, or any responsive action, because he was fired shortly
thereafter. Murphy later testified that neither Kelly nor anyone else at
Continental or H&H ever mentioned Wood’s environmental concern to him.
The defendants have offered an alternate explanation for Wood’s
termination. Beginning in 2001, Wood and his family ran a business called B&B
Meters (“B&B”). Wood sometimes used his Continental cell phone for B&B
business and conducted such business during his normal working hours at
Continental. B&B was a Continental customer on at least one occasion in 2001,
and all managers at Continental, including Brogle, were aware of Wood’s
relationship with B&B. Murphy, however, testified in depositions that he knew
nothing about B&B until shortly before he terminated Wood. He stated that he
learned of B&B from another H&H officer in November 2003, and immediately
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placed the aforementioned phone call to Brogle as well as a call to Tim Hoagland,
a Continental vice president who worked closely with Wood.
Following these events, on November 21, 2003, Wood received a phone
call from Murphy requesting that he report to H&H’s offices in Rye, New York.
On November 25, Wood met with Murphy and two other H&H officers, and
Murphy informed him he was being terminated for “running a business on
company time.” Wood was not given an opportunity to improve his performance
through a progressive discipline plan.
After his termination, Wood filed a complaint against the defendants,
asserting four claims: (1) retaliatory discharge for defending another employee’s
FMLA rights, in violation of 29 U.S.C. § 2615(a)(2); (2) wrongful discharge in
violation of public policy under Burk v. K-Mart Corp., 770 P.2d 24, 28 (Okla.
1989); (3) breach of an implied employment contract requiring progressive
discipline; and (4) negligent or intentional infliction of emotional distress. The
defendants moved to dismiss Wood’s Burk tort claim under Federal Rule of Civil
Procedure 12(b)(6), asserting that Wood had failed to identify a specific
Oklahoma public policy violated by his discharge. Denying the motion, the
district court found that Wood’s factual allegations “may support a Burk tort
under Oklahoma law, depending on . . . further development and explanation of
relevant . . . law in later stages of the proceedings.” The court cautioned Wood,
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however, that he “must, during discovery, identify” a clear public policy
supporting this cause of action.
When the discovery deadline passed, the defendants moved for summary
judgment on all claims. As to the Burk claim, they contended that Wood had
failed to identify a clear public policy supporting his cause of action in
accordance with the court’s earlier order. In his response brief, Wood identified
several public policies supporting his tort claim for the first time. Three days
after his brief was filed, Wood served the defendants with a “supplemental
discovery response” setting forth these same policies.
Summary judgment was granted to the defendants on all claims. As to
Wood’s FMLA claim, the court concluded that Wood had failed to show that his
protected action caused his loss of employment because he did not offer enough
evidence that Murphy, the relevant decisionmaker, was aware of the dispute over
the Carter memo. On the Burk claim, the court rejected all public policies
presented by Wood during discovery as insufficiently specific. The court refused
to consider his belated “supplemental discovery response,” because it was “out of
time and out of compliance with the Court’s prior Order.” With respect to the
implied contract claim, the court determined the Wood had offered inadequate
evidence of an implied contract requiring the defendants to impose progressive
discipline before terminating Wood. Finally, the court construed Wood’s
emotional distress claim as two separate claims: a claim for negligent termination
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and a claim for intentional infliction of emotional distress. Both theories were
rejected, upon the conclusion that Wood had failed to demonstrate issues of fact
about whether his termination was wrongful, as required to show negligent
termination, or about whether the defendants’ actions were “outrageous,” as
required to show intentional infliction of emotional distress. Wood appeals the
court’s entry of summary judgment against him as to all claims other than
intentional infliction of emotional distress.
II
We review a grant of summary judgment de novo, using the same legal
standard applied by the district court. Somoza v. Univ. of Denver, 513 F.3d 1206,
1211 (10th Cir. 2008). Summary judgment is appropriate “if the pleadings, the
discovery and disclosure materials on file, and any affidavits show that there is no
genuine issue as to any material fact and that the movant is entitled to judgment
as a matter of law.” Fed. R. Civ. P. 56(c). We examine the factual record and
draw all reasonable inferences in the light most favorable to the nonmoving party,
and “consider factual inferences tending to show triable issues in the light most
favorable to the existence of those issues.” Seamons v. Snow, 206 F.3d 1021,
1026 (10th Cir. 2000). “Credibility determinations, the weighing of the evidence,
and the drawing of legitimate inferences from the facts are jury functions, not
those of a judge.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).
Thus, “[w]here different ultimate inferences may properly be drawn, the case is
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not one for a summary judgment.” Seamons, 206 F.3d at 1026 (quotation
omitted). 3
A
Under the FMLA, it is “unlawful for any employer to discharge or in any
other manner discriminate against any individual for opposing any practice made
unlawful” under the Act. 29 U.S.C. § 2615(a)(2). 4 Retaliation claims under the
FMLA are subject to the burden-shifting framework of McDonnell Douglas Corp.
v. Green, 411 U.S. 792, 802-04 (1973). Metzler v. Fed. Home Loan Bank of
Topeka, 464 F.3d 1164, 1170 (10th Cir. 2006). “Under this analysis, the plaintiff
3
The defendants maintain that their statement of material facts was
undisputed because Wood violated Northern District of Oklahoma Local Civil
Rule 56.1(c) by failing to submit his response to that statement in the required
form. See Reed v. Nellcor Puritan Bennett, 312 F.3d 1190, 1195 (10th Cir. 2002)
(explaining that a district court has discretion to sanction a violation of its local
rules by declining to consider those facts which are presented in violation of the
rule). But the district court elected not to exclude Wood’s factual allegations
based on the violation, stating that it would consider all of the evidence in the
record “[b]ecause Wood did attach an evidentiary record, because the parties have
expended resources in addressing the merits, and because the Court favors
resolving disputes on the merits.” It was not an abuse of discretion for the district
court to consider the full record, and we will therefore do the same on appeal.
4
Prior to oral argument in this case, we ordered supplemental briefing on
the question of whether the FMLA gives Wood statutory standing to sue for
retaliation for defending the rights of another employee, as opposed to his own
FMLA rights. Because Wood ultimately does not prevail on the merits, however,
we need not decide whether he in fact has statutory standing. Carolina Cas. Ins.
Co. v. Pinnacol Assurance, 425 F.3d 921, 926 (10th Cir. 2005) (“Unlike
constitutional standing, . . . statutory standing need not be resolved before
consideration of the merits. . . . [I]f [the plaintiff] loses on the merits, the issue
of statutory standing becomes moot and need not be addressed.”).
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bears the initial burden of establishing a prima facie case of retaliation.” Id. If
the plaintiff succeeds in meeting this burden, the defendant must then offer a
legitimate, nonretaliatory justification for the employment action. Id. If the
employer does so, then the burden again shifts to the plaintiff to demonstrate that
the proffered reason is a mere pretext for retaliation. Id.1
In order to establish a prima facie case of FMLA retaliation, Wood was
required to demonstrate that: “(1) [he] engaged in a protected activity, (2) [the
defendants] took an action that a reasonable employee would have found
materially adverse, and (3) there exists a causal connection between the protected
activity and the adverse action.” Id. at 1171. On appeal, the defendants do not
contest whether Wood has met his burden as to the first two prongs of the prima
facie case. We thus consider only whether Wood has demonstrated a genuine
issue of material fact regarding causation.
An essential component of causation is the decisionmaker’s knowledge of
the protected activity; if knowledge is lacking, then the protected act cannot be
said to have caused the adverse employment action. See Jones v. United Postal
Serv., Inc., 502 F.3d 1176, 1195 (10th Cir. 2007). Causation therefore exists only
if a jury could reasonably infer that Murphy knew of the FMLA incident prior to
Wood’s termination. Wood contends that a jury could infer from Brogle’s
conduct and statements that she told Murphy about the Carter memo incident in
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her return call to him. The defendants rejoin that a reasonable jury could not
infer that Murphy knew about the incident, because both Brogle and Murphy—the
two participants in the conversation—deny speaking about it.
Wood has produced enough evidence to survive summary judgment on this
question. We have long held that “summary judgment should not be based on the
deposition or affidavit of an interested party . . . as to facts known only to him—a
situation where demeanor evidence might serve as real evidence to persuade a
trier of fact to reject his testimony.” Madison v. Deseret Livestock Co., 574 F.2d
1027, 1037 (10th Cir. 1978); see also Seamons, 206 F.3d at 1028; Anderson v.
Deere & Co., 852 F.2d 1244, 1248 (10th Cir. 1988) (quoting Madison). A
nonmoving party must, of course, do more than “merely assert that the jury
might” disbelieve the testimony of interested witnesses; he must present his own
affirmative evidence of those facts which are contradicted by the interested
testimony. Liberty Lobby, 477 U.S. at 256-57. Wood has met this standard.
The record reveals that Brogle was extremely angry with Wood following
his refusal to give Carter the disputed memo. Just a few days after this incident
occurred, Murphy called Brogle, and asked whether she had any concerns about
Wood. When Brogle returned the call, she told Murphy that her “biggest concern
with [Wood] was that he was not consistent in how he applied formal policies and
practices in the workplace with the employees.” Although Brogle specifically
denies telling Murphy about Wood’s handling of the Carter memo, a jury with an
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opportunity to assess Brogle’s demeanor might find this denial to be noncredible,
particularly so given that nothing in the record suggests any basis for Brogle’s
stated concern other than the Carter memo incident. A jury might similarly find
that Murphy’s testimony that he “did not recall” learning of the incident from
Brogle was not credible, or alternately, that Murphy had simply forgotten the
exact content of the conversation. If so, the jury could infer from Wood’s and
Horne’s testimony that Brogle’s anger about the incident would have led her,
when asked about Wood’s performance days later, to describe it to Murphy as an
example of Wood’s failures to “appl[y] formal policies and practices in the
workplace.” In short, the foregoing evidence takes Wood’s argument beyond a
bare assertion that the jury might disbelieve Brogle and Murphy. Coupled with
the close timing between the Carter memo incident, Brogle’s phonecall, and
Wood’s termination, Wood has carried his burden of raising a genuine issue of
material fact regarding Murphy’s knowledge. See, e.g., Marx v. Schnuck Mkts.,
Inc., 76 F.3d 324, 329 (10th Cir. 1996) (“[P]rotected conduct closely followed by
adverse action may justify an inference of retaliatory motive.”).
2
Because Wood adduced sufficient evidence to establish a prima facie case
of retaliation, we turn to the remaining steps in the McDonnell Douglas
framework. Although the district court, in light of its conclusion regarding
causation, did not reach these steps, “we have discretion to affirm on any ground
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adequately supported by the record so long as the parties have had a fair
opportunity to address that ground.” Gomes v. Wood, 451 F.3d 1122, 1133 (10th
Cir. 2006). At the time of the trial court’s ruling, the parties had conducted
complete discovery and fully briefed their positions, including the issue of
pretext.
Once a plaintiff makes out a prima facie case of an FMLA violation, the
burden shifts to the defendant to offer a legitimate, nonretaliatory basis for the
adverse employment action. Metzler, 464 F.3d at 1170 (citing McDonnell
Douglas, 411 U.S. at 802-04). It is undisputed that the defendants met that
burden with Murphy’s testimony that he decided to terminate Wood due to his
belated discovery of Wood’s involvement with B&B. Thus, the burden shifts
back to Wood, who must “demonstrate a genuine dispute of material fact as to
whether the proffered reasons were unworthy of belief.” Trujillo v. PacifiCorp,
524 F.3d 1149, 1158 (10th Cir. 2008) (quoting Morgan v. Hilti, Inc., 108 F.3d
1319, 1321 (10th Cir. 1997)).
“Pretext can be shown by such weaknesses, implausibilities,
inconsistencies, incoherencies, or contradictions in the employer’s proffered
legitimate reasons for its action that a reasonable factfinder could rationally find
them unworthy of credence and hence infer that the employer did not act for the
asserted non-discriminatory reasons.” Id. (quoting Morgan, 108 F.3d at 1321).
Wood argues that he produced evidence that Murphy’s proffered reason for his
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termination is a mere pretext for retaliation. Specifically, he maintains that it is
implausible that Murphy only learned of the existence of B&B in November 2003,
for two reasons: First, because B&B was a Continental customer in 2001, and
second, because a jury could infer that Amy Brogle and Tim Hoagland, who were
undisputedly aware of B&B, would have told Murphy about Wood’s involvement
with the outside business long before November 2003.
Wood’s evidence does not support either theory. The only evidence in the
record of any transaction between B&B and Continental is a single 2001
Continental invoice addressed to B&B, recording the sale of $448.50 in products.
Wood does not explain why Murphy, the president of Continental’s parent
company, would have been aware of this minor transaction. Even assuming that
Murphy did learn of the transaction, Wood has not produced any evidence
indicating that he would also have learned the identity of B&B’s owner, since the
only name listed on the invoice is Roy Wood, not Tim Wood.
As for the theory that Brogle and Hoagland must have mentioned B&B to
Murphy prior to November 2003, Wood’s evidence not only fails to support such
an inference, but also undermines it. For example, an affidavit from Tulsa Plant
Manager Bruce Neal states that if Brogle or Hoagland “had any questions or
criticisms of Tim Wood regarding B&B Meter, it would have been raised in our
meetings and privately with Tim Wood”—not to Murphy. In contrast to his
claims regarding the Carter memo incident, Wood does not point to any particular
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conversation between Murphy and Brogle or Hoagland during which the subject
of B&B might have been expected to arise. Thus, even viewed in the light most
favorable to Wood, the evidence does not create a dispute of material fact as to
whether the defendants’ proffered reason for his termination was so implausible
as to be “unworthy of belief.” Trujillo, 524 F.3d at 1158. We therefore affirm
summary judgment against Wood on his claim of FMLA retaliation. 5
B
Wood urges us to reverse summary judgement on his Burk tort claim,
maintaining that the district court abused its discretion in refusing to consider the
public policies advanced after the close of discovery. Alternatively, he argues
that the court erred by excluding this evidence without first considering the
factors articulated in Meade v. Grubbs, 841 F.2d 1512, 1521 n.7 (10th Cir. 1988).
“[W]e review a district court’s decision to exclude evidence at the summary
judgment stage for abuse of discretion,” Sports Racing Servs., Inc. v. Sports Car
Club of Am., Inc., 131 F.3d 874, 894 (10th Cir. 1997), and will not disturb such a
determination on review “unless we have a definite and firm conviction that the
lower court made a clear error of judgment or exceeded the bounds of permissible
choice in the circumstances,” Lantec, Inc. v. Novell, Inc., 306 F.3d 1003, 1019
5
Wood summarily requests an award of attorneys’ fees incurred in
appealing the grant of summary judgment on his FMLA claim. See 29 U.S.C.
§ 2617(a)(3). Because Wood has failed to prevail on his claim, the request is
denied.
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(10th Cir. 2002) (quoting United States v. Ortiz, 804 F.2d 1161, 1164 n.2 (10th
Cir. 1986)).
In its order denying the defendants’ motion to dismiss Wood’s Burk claim,
the district court ordered Wood to identify a clear public policy protecting his
actions “during discovery.” Defendants requested this information from Wood by
interrogatory before the close of discovery. They received a response that
identified a provision of the Oklahoma Environmental Quality Code as well as
several Oklahoma cases addressing the procedural and substantive rights of
landowners affected by pollution and environmental permitting processes.
After the close of discovery, defendants filed their motion for summary
judgment, arguing that the aforementioned policies did not protect Wood from
termination. In his brief responding to the motion, Wood then identified several
previously unmentioned Oklahoma statutes and cases as support for his Burk
claim. Three days later, and two months after the close of discovery, he served
the defendants with a supplemental discovery response identifying these same
authorities. Granting summary judgment on Wood’s public policy claim, the
district court declined to consider this late response. 6
6
It also found that none of the authorities identified before the close of
discovery provided a sufficiently “clear and compelling” Oklahoma public policy
to support a Burk claim. See Clinton v. Okla., 29 P.3d 543, 546 (Okla. 2001)
(holding that a Burk plaintiff “must identify an Oklahoma public policy goal that
is clear and compelling and is articulated in existing Oklahoma constitutional,
statutory or jurisprudential law”). Wood does not challenge this latter aspect of
the court’s decision.
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We make two observations in rejecting Wood’s arguments. “It is generally
not an abuse of discretion for a court to exclude evidence based upon failure to
timely designate.” Santana v. City & County of Denver, 488 F.3d 860, 867 (10th
Cir. 2007). Wood had ample opportunity to comply with the district court’s order
by identifying all policies he wished to bring to the court’s (and the defendants’)
attention, and he simply failed to do so. 7 In addition, our holding in Meade only
requires a district court to consider certain equitable factors before imposing the
ultimate sanction of dismissal, a requirement justified by the extraordinary nature
of that sanction. See 841 F.2d at 1520. Exclusion of belated evidence, by
contrast, is a matter of pure district court discretion, unrestrained by such guiding
factors. See Sports Racing Servs., 131 F.3d at 894. We see no abuse of
discretion and therefore affirm the grant of summary judgment against Wood on
his Burk claim.
C
This brings us to Wood’s claim that the defendants breached an implied
employment contract when they failed to offer him progressive discipline before
termination. The district court properly concluded that this claim fails under the
balancing test summarized in Bowen v. Income Producing Management of
7
Wood points out that the district court’s order denying the motion to
dismiss did not specify a date by which this information was due. However, the
phrase “during discovery” admits of no ambiguity where a discovery deadline
exists, and we consequently agree that the “supplemental response” was untimely.
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Oklahoma, Inc., 202 F.3d 1282, 1284 (10th Cir. 2000). At the summary judgment
stage, an employee seeking to challenge his termination under an implied
employment contract theory bears the burden of raising an issue of material fact
regarding whether a contract existed. See Dupree v. United Postal Serv., Inc.,
956 F.2d 219, 222-23 (10th Cir. 1992). In Bowen, we summarized Oklahoma law
regarding formation of an implied contract as follows:
To determine whether the parties intended to form a contract, five
factors are balanced: (a) evidence of “separate consideration”
beyond the employee’s services; (b) length of employment; (c)
employer handbooks and policy manuals; (d) detrimental reliance by
the employee; and (e) promotions and commendations.
202 F.3d at 1284 (citing Hinson v. Cameron, 742 P.2d 549, 554-55 (Okla. 1987)).
Wood has failed to meet his burden of showing that an implied contract
existed. The only evidence presented is his recollection that a 1995 Continental
handbook mentioned a policy of progressive discipline and Neal’s affidavit that
Human Resources required him to follow such a policy before terminating
employees. This is insufficient. Under Oklahoma law, an employee’s
understanding of company policy is simply not a factor supporting the existence
of an implied contract unless this impression led to detrimental reliance, which
Wood does not claim. Moreover, his vague recollection of the contents of the
1995 handbook does not support a jury conclusion that “employer handbooks and
policy manuals” actually established a progressive discipline policy. To the
contrary, the only handbook in the record—the 1999 version in effect at the time
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of Wood’s discharge—mentions no such policy. Even if it did, Bowen provides
that “‘an employer may deny (or disclaim) any intent to make the provisions of a
personnel manual part of an employment relationship’ so long as the disclaimer is
clear and the employer’s conduct does not negate the disclaimer’s effect.” Id. at
1285 (quoting Russell v. Bd. of County Comm’rs, 952 P.2d 492, 502 (Okla.
1997)). On point, the 1999 handbook explicitly states that “[a]ll employees who
do not have a separate, written employment contract with the company for a
specific term of employment are employed at the will of the company” and that
“[n]othing in this material represents a contract of any kind.”
Because Wood has produced no other evidence relevant to the Bowen
factors, the district court was correct to find that he has not created a material
issue of fact as to the existence of an implied contract. Summary judgment was
therefore proper on this claim. 8
8
Wood also contends that the district court erred by alternately granting
summary judgment against him as a sanction for his failure to comply with Rule
56.1(c), without first conducting the analysis required by Meade. Because we
affirm the grant of summary judgment against him on the merits of all claims, we
need not consider the district court’s alternate basis for its judgment.
As for Wood’s negligent termination claim, his only argument on appeal is
that we must remand this claim if we reverse the grant of summary judgment on
any of his other claims. Again, because we affirm, we need not address this
argument.
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III
For the foregoing reasons, we AFFIRM the grant of summary judgment to
the defendants. Wood’s request for attorney’s fees is DENIED.
ENTERED FOR THE COURT
Carlos F. Lucero
Circuit Judge
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