Hernandez v. Crawford Bldg ( 2003 )

Revised February 28, 2003
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_____________________
Summary Calendar
No. 01-41393
_____________________
JUAN HERNANDEZ
Plaintiff - Appellee
v.
CRAWFORD BUILDING MATERIAL COMPANY,
doing business as Crawford’s Discount
Carpet and Home and Floor Center
Defendant - Appellant
_________________________________________________________________
Appeal from the United States District Court
for the Eastern District of Texas
_________________________________________________________________
February 21, 2003
Before KING, Chief Judge, and SMITH and DENNIS, Circuit Judges.
PER CURIAM:
Defendant-Appellant Crawford Building Material Company
(“Crawford”) appeals the final judgment entered by the District
Court for the Eastern District of Texas ordering Crawford to pay
Plaintiff-Appellee Juan Hernandez $20,000 in compensatory damages
and $55,000 in punitive damages as a result of Hernandez’s claim
that Crawford initiated a retaliatory employment action in
violation of Title VII. Crawford attacks both the sufficiency of
the evidence presented to the jury and the ability of an employee
to base a Title VII retaliation claim on the employer’s filing of
a counterclaim against that employee after the employee has been
discharged. We conclude that the district court erred in denying
Crawford’s motion for judgment as a matter of law on the question
of whether the filing of a counterclaim could support an action
for employment retaliation. We therefore reverse the district
court and remand with instructions to dismiss the retaliation
claim.
I. FACTS AND PROCEDURAL BACKGROUND
Hernandez, a Mexican immigrant, began working as a manual
laborer at Crawford’s lumber yard around 1975. At some point,
management at Crawford became dissatisfied with Hernandez’s
performance; he was transferred to Crawford’s carpet warehouse,
where he received a pay raise concomitant with increased duties.
Crawford continued to be unhappy with Hernandez, though, and on
June 17, 1999, Crawford fired Hernandez after he miscut a roll of
carpet and failed to report the mistake. At that time, Hernandez
was sixty-one years old.
Hernandez filed a complaint with the Equal Employment
Opportunity Commission (“EEOC”) and with the Texas Commission on
Human Rights. When neither commission would provide him with the
relief requested, he sought and secured a “right-to-sue” letter
from the EEOC. On October 13, 2000, Hernandez filed suit against
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Crawford, alleging that his termination violated the Age
Discrimination in Employment Act (“ADEA”), 42 U.S.C. § 1981, and
Title VII.
At some point while Hernandez was pursuing this suit,
someone told one of Crawford’s owners that Hernandez had been
stealing company property while he was employed at Crawford. The
witness, Manual Guerra, was a painter who had done business with
Crawford. He reported seeing building materials belonging to
Crawford stacked behind Hernandez’s house; he also reported that
Hernandez was selling that property. Hernandez allegedly told
Guerra that Crawford paid him with building materials.
Crawford answered Hernandez’s complaint on November 3, 2000.
In that answer, Crawford both denied the allegations of
discriminatory discharge and raised a counterclaim for theft
against Hernandez. In his answer to Crawford’s counterclaim,
Hernandez denied having ever stolen building materials from
Crawford. Then, on May 21, 2001, Hernandez supplemented his
original complaint to allege that Crawford’s counterclaim
amounted to a retaliatory employment action in violation of Title
VII, the ADEA, and § 1981.
Hernandez moved for summary judgment on the counterclaim.
The district court granted that motion, finding that Crawford
could not prove specifically, or even generally, what was stolen
or that Hernandez stole it. Most of the allegations of theft
concerned items that had gone missing six or seven years earlier;
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at that time, Crawford had not investigated the problem. As a
result, Crawford now simply lacked sufficient evidence to
demonstrate to a jury that Hernandez had stolen Crawford’s
property.
At trial, the jury instruction covering Hernandez’s
retaliation claim included the following statements:
The Plaintiff also brings causes of action for
retaliation, in violation of Title VII, the ADEA, and
§ 1981. These laws prohibit an employer from retaliating
against a former employee for filing a discrimination
lawsuit. Here, Plaintiff Hernandez contends that
Defendant Crawfords made allegations and the claim for
theft to retaliate against Plaintiff for having brought
this lawsuit and pursuing his claims of discrimination
against this Defendant.
To prevail on his retaliation claim, Plaintiff
Hernandez must show by a preponderance of evidence his
good faith opposition to discrimination and bringing this
lawsuit was a substantial or motivating factor for a
decision by Defendant Crawfords to make a theft
allegation and counterclaim.
The jury found, in two special interrogatories, that Crawford had
not discharged Hernandez because of his age or because of his
Mexican heritage. However, the jury did find that Crawford’s
filing of the counterclaim constituted a retaliatory employment
action. The jury awarded $20,000 in compensatory damages (for
Hernandez’s claimed mental anguish and shame as a result of being
branded a thief) and $55,000 in punitive damages.
Crawford filed motions for a new trial and for judgment as a
matter of law. In his motion for a new trial, he argued that
there was insufficient evidence to support the jury’s findings:
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(1) that Crawford had no permissible basis for filing the theft
counterclaim; (2) that Hernandez had suffered actual damages as a
result of the counterclaim; and (3) that Crawford had acted in a
manner sufficient to warrant an award of punitive damages. In
his motion for judgment as a matter of law, Crawford argued that
the filing of a counterclaim was not the kind of “ultimate
employment decision” upon which a claim of retaliation may be
based and, alternatively, that Hernandez had not proven that
Crawford had a retaliatory motive in filing the counterclaim.
The district court denied both motions. The court found
that Hernandez had presented sufficient evidence to support the
jury’s findings on the retaliation, causation, and damages
questions. As for the question of whether the filing of a
counterclaim could support a retaliation claim, the district
court found that, by failing to object to the jury charge on the
law of retaliation, Crawford had not preserved the issue for
later challenge. As a result, the district court reviewed the
question only for plain error; finding the issue debatable within
the federal district courts in Texas, the district court
concluded that no plain error had occurred.
Crawford timely appealed, raising two general classes of
appealable issues. First, Crawford reargues that the filing of a
counterclaim is not an “ultimate employment decision” sufficient
to support a claim of employer retaliation. Second, Crawford
asserts that there was insufficient evidence to support the
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jury’s findings that: (1) Crawford had a retaliatory motive in
filing the counterclaim; (2) the filing of the counterclaim
caused any injury to Hernandez; (3) Hernandez was entitled to
damages based on his mental anguish; (4) in the absence of actual
damages, punitive damages were proper; and (5) Crawford’s conduct
was sufficiently egregious to support an award of punitive
damages.
II. FILING A COUNTERCLAIM AS AN “ULTIMATE EMPLOYMENT DECISION”
FOR PURPOSES OF TITLE VII RETALIATION CLAIMS
Crawford contends that the jury impermissibly based its
verdict on a finding that the filing of a counterclaim
constituted a retaliatory action. Crawford argues that an
employer’s filing of a counterclaim cannot constitute the
“ultimate employment decision” necessary to support a finding of
retaliatory employment action under Title VII and the ADEA in the
Fifth Circuit.1
The district court denied this ground, in part because
Crawford had failed to object to the jury charge on this issue.
Because Crawford failed to preserve the issue, it is reviewed
only for plain error. Hartsell v. Dr. Pepper Bottling Co., 207
F.3d 269, 272 (5th Cir. 2000). To overturn a verdict for plain
error in the jury instructions, we must find that the
1
This court has held that analysis of retaliation claims
is the same for ADEA claims as it is for Title VII claims.
Sherrod v. Amer. Airlines, Inc., 132 F.3d 1112, 1122 (5th Cir.
1998). Therefore, for purposes of this discussion, we will
discuss only Hernandez’s Title VII claim.
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instructions made an obviously incorrect statement of law that
was “probably responsible for an incorrect verdict, leading to
substantial injustice.” Tompkins v. Cyr, 202 F.3d 770, 784 (5th
Cir. 2000).
Our precedents create a three-part test that a plaintiff
must satisfy in order to prove a retaliation claim: “(1) the
employee has engaged in activity protected by Title VII; (2) the
employer took adverse employment action against the employee; and
(3) a causal connection exists between that protected activity
and the adverse employment action.” Burger v. Cent. Apartment
Mgmt., Inc., 168 F.3d 875, 878 (5th Cir. 1999) (citing Mattern v.
Eastman Kodak Co., 104 F.3d 702, 707 (5th Cir. 1997)). “Our
court has analyzed the ‘adverse employment action’ element in a
stricter sense than some other circuits.” Id. at 878. In the
Fifth Circuit, only an “ultimate employment decision” by an
employer can form the basis for liability for retaliation under
Title VII. Mattern, 104 F.3d at 705.
We have said that typical examples of ultimate employment
decisions that can support a claim of retaliation include
“hiring, granting leave, discharging, promoting, and
compensating.” Dollis v. Rubin, 77 F.3d 777, 781-82 (5th Cir.
1997). This understanding is grounded in the statutory language
of Title VII. While retaliation cases are specifically covered
by Section 2000e-3(a), we have looked to Section 2000e-2(a)(1),
which makes it unlawful “to fail or refuse to hire or to
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discharge any individual, or otherwise to discriminate against
any individual with respect to his compensation, terms,
conditions, or privileges of employment,” to determine which
employment decisions can support a retaliation cause of action.
In Mattern, we concluded that the kinds of “ultimate employment
decisions” that will support a finding of retaliatory conduct
must be similar to the kinds of conduct described in Section
2000e-2(a)(1). Mattern, 104 F.3d at 709; id. at 707 (“Title VII
was designed to address ultimate employment decisions, not to
address every decision made by employers that arguably might have
some tangential effect upon those ultimate decisions.”) (quoting
Dollis, 77 F.3d at 781-82). A review of our prior Title VII
jurisprudence confirms that we have consistently refused to
recognize retaliation claims that are dissimilar to the
prohibited activities of § 2000e-2(a)(1).2
2
Activities meeting the standard of “ultimate employment
decisions” include: Green v. Adm’rs of the Tulane Educ. Fund, 284
F.3d 642, 658 (5th Cir. 2002) (demotion); Fierros v. Tex. Dep’t
of Health, 274 F.3d 187, 194 (5th Cir. 2001) (denial of pay
increase); Mota v. Univ. of Tex. Houston Health Sci. Ctr., 261
F.3d 512, 521 (5th Cir. 2000) (discontinuation of employee’s
stipend, denial of request for paid leave, denial of request to
extend unpaid leave, and termination); Evans v. City of Houston,
246 F.3d 344, 353 (5th Cir. 2001) (demotion); Thomas v. Tex.
Dep’t of Criminal Justice, 220 F.3d 389, 394 (5th Cir. 2000)
(failure to promote employee); Rubinstein v. Adm’rs of the Tulane
Educ. Fund, 218 F.3d 392, 402 (5th Cir. 2000) (denial of pay
raise); Vadie v. Miss. State Univ., 218 F.3d 365, 374 (5th Cir.
2000) (refusal to consider employee for another position after
closing employee’s department); Shackelford v. Deloitte & Touche,
190 F.3d 398, 407 (5th Cir. 1999) (termination); Sharp v. City of
Houston, 164 F.3d 923, 933 n.21 (5th Cir. 1999) (constructive
demotion).
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District courts in other circuits have held that the filing
of a suit or counterclaim can support a lawsuit premised on a
theory of retaliatory employment action. See Beckham v. Grand
Affair of N.C., Inc., 671 F. Supp. 415, 419 (W.D.N.C. 1987)
(finding retaliation where employer instituted criminal
prosecution of former employee who filed claim with EEOC); EEOC
v. Va. Carolina Veneer Corp., 495 F. Supp. 775 (W.D. Va. 1980)
(finding retaliation where employer filed defamation suit against
employee based upon statements made by employee to EEOC).
However, this circuit has taken a more skeptical view, remarking
that “[i]t is not obvious that counterclaims or lawsuits filed
against a Title VII plaintiff ought to be cognizable as
retaliatory conduct under Title VII. After all, companies and
Activities which are not “ultimate employment decisions”
include: Green, 284 F.3d at 657-58 (changing locks, restructuring
office procedures, clarifying job duties, and reprimands); Mota,
261 F.2d at 521 (removal of employee’s name from letterhead,
ostracism by coworkers, and loss of some job duties); Thomas, 220
F.3d at 389 n.2 (assignment to less desirable shift and formal
discipline); Walker v. Thompson, 214 F.3d 615, 629 (5th Cir.
2000) (removal from duties on particular account, timing of short
breaks during the day, and failure to receive $2.89 allegedly
owed for unplanned overtime); Watts v. Kroger Co., 170 F.3d 505,
511-12 (5th Cir. 1999) (change of work schedule and request that
employee perform new job tasks); Burger, 168 F.3d at 879 (denial
of transfer request to an identical position at a different job
site); Webb v. Cardiothoracic Surgery Assocs. of N. Tex., 139
F.3d 532, 540 (5th Cir. 1998) (rude treatment by employer);
Messer v. Meno, 130 F.3d 130, 140 (5th Cir. 1997) (monitoring of
employee’s conversations, criticism of work and conduct, and
refusal to consider employee’s input in business decisions);
Mattern, 104 F.3d at 708 (threats of potential dismissal, verbal
reprimands, and low evaluations that could lead to missed pay
increases).
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citizens have a constitutional right to file lawsuits, tempered
by the requirement that the suits have an arguable basis.”
Scrivener v. Socorro Indep. Sch. Dist., 169 F.3d 969, 972 (5th
Cir. 1999).
While there are no reported decisions from this circuit
dealing directly with this question,3 we think it is clear that,
given our strict interpretation of retaliation claims, an
employer’s filing of a counterclaim cannot support a retaliation
claim in the Fifth Circuit. A counterclaim filed after the
employee has already been discharged in no way resembles the
ultimate employment decisions described in Section 2000e-2(a)(1).
We find that the district court committed plain error in
instructing the jury that Crawford’s counterclaim could support a
finding of retaliatory employment action. This instruction was
an obvious misstatement of the law that led to substantial
injustice for Crawford. This claim should not have gotten to the
jury in the first place.4
3
There are two unreported Texas district court cases that
have considered this question as well; the courts reached
different conclusions. See Gustafson, Inc. v. Bunch, 1999 WL
304560 (N.D. Tex. 1999) (filing of suit by employer after
employee was discharged did not constitute an “ultimate
employment decision”); Shafer v. Dallas County Hosp. Dist., 1997
WL 667933 (N.D. Tex. 1997) (filing of counterclaim supports Title
VII retaliation action).
4
Because we find Hernandez’s retaliation claim
uncognizable under Fifth Circuit law, we do not need to discuss
his claims that the evidence presented at trial was insufficient
to support the jury’s verdict.
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IV. CONCLUSION
We REVERSE the district court’s decision denying Crawford’s
motion for judgment as a matter of law and REMAND with
instructions to dismiss Hernandez’s retaliation claim. Costs
shall be borne by Hernandez.
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DENNIS, J., Circuit Judge, concurring:
I join fully in the per curiam opinion as a correct
disposition in accord with our precedents. I write separately only
to urge that the en banc court should reconsider our rule that
“only an ‘ultimate employment decision’ by an employer can form the
basis for liability for retaliation under Title VII.” Opinion at
7 (citing Mattern v. Eastman Kodak Co., 104 F.3d 702 (5th Cir.
1997)). This rule is inimical to both the text and the purpose of
the anti-retaliation provision of Title VII, 42 U.S.C. § 2000e-
3(a). See Mattern, 104 F.3d at 710 (Dennis, J., dissenting). A
majority of the federal circuits that have considered the question
have held that the protection afforded by the anti-retaliation
provision extends to adverse employment actions that, while
substantial, fall short of ultimate employment decisions. See Von
Gunten v. Maryland, 243 F.3d 858, 865 (4th Cir. 2001); Wideman v.
Wal-Mart Stores, Inc., 141 F.3d 1453, 1456 (11th Cir. 1998); Knox
v. State of Indiana, 93 F.3d 1327, 1334 (7th Cir. 1996); Berry v.
Stevinson Chevrolet, 74 F.3d 980, 984-86 (10th Cir. 1996); Wyatt v.
City of Boston, 35 F.3d 13, 15-16 (1st Cir. 1994); Yartzoff v.
Thomas, 809 F.2d 1371, 1375 (9th Cir. 1987). Indeed, the only
other circuit that purports to follow the “ultimate employment
decision” rule, the Eighth Circuit, in practice applies something
broader. See e.g., Manning v. Metro. Life Ins. Co., 127 F.3d 686,
692 (8th Cir. 1997) (defining ultimate employment decision to
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include a “tangible change in duties or working conditions that
constituted a material employment disadvantage”).
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