Nowlin v. Resolution Trust Corp. ( 1994 )


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  •                      United States Court of Appeals,
    
                                   Fifth Circuit.
    
                                    No. 93-2683.
    
                 Jolene NOWLIN, et al., Plaintiffs-Appellants,
    
                                            v.
    
              RESOLUTION TRUST CORPORATION, et al., Defendants,
    
     Resolution Trust Corporation, Litton Mortgage Servicing Center,
    Inc., and Mitchell Jobe & Co., Defendants-Appellees.
    
                                   Sept. 29, 1994.
    
    Appeal from the United States District Court for the Southern
    District of Texas.
    
    Before GOLDBERG, KING and WIENER, Circuit Judges.
    
           GOLDBERG, Circuit Judge:
    
           This case resulted from the termination of employment of nine
    
    former   employees    at   a   failed       financial   institution.   These
    
    individuals ("plaintiffs") sued the Resolution Trust Corporation
    
    ("RTC"), which was the receiver of the institution, and two of the
    
    RTC's personnel contractors, Litton Mortgage Servicing Center, Inc.
    
    ("Litton") and Mitchell Jobe & Company ("Mitchell Jobe") (together,
    
    the "defendants").     The plaintiffs sought relief on several causes
    
    of action.    The first was retaliatory discharge in violation of 12
    
    U.S.C. § 1831j (the "Banking Whistleblower Act").             The second and
    
    third were violations of 42 U.S.C. § 2000e-3 ("Title VII"), for
    
    sexual discrimination and retaliatory discharge.                Finally, the
    
    plaintiffs claimed a breach of oral contract under Texas common
    
    law.    The district court granted summary judgment in favor of the
    
    defendants on all claims, and the plaintiffs appealed to this
    
    
                                            1
    court.       We partially affirm and partially reverse the district
    
    court's          grant    of    summary    judgment     and    remand      for   further
    
    proceedings.
    
    I. Facts1
    
           Columbia Savings Association, Nassau Bay, was a federally
    
    insured, state-chartered institution.                   In December 1989, it was
    
    placed in the conservatorship of the RTC.                        The institution was
    
    succeeded by Columbia Federal Savings Association ("Columbia") when
    
    the Federal Home Bank Loan Board issued it a federal charter.                           The
    
    change in name did not spell a change in fortune, and in September
    
    1991 the RTC put Columbia into receivership and picked up the
    
    reins.
    
           The       RTC     contracted     with   Mitchell   Jobe      to    meet   some   of
    
    Columbia's staffing needs.                Mitchell Jobe hired seventeen former
    
    Columbia employees for the receivership.                   The plaintiffs in this
    
    case       are    nine    of    those   individuals.       The      plaintiffs    signed
    
    employment         contracts       with   Mitchell     Jobe,     which     stated   that
    
    employment would be "for an unspecified amount of time and for
    
    limited projects of a temporary nature...."                    The RTC paid Mitchell
    
    Jobe a fee in addition to the amount of the temporary employees'
    
    wages.
    
           The       RTC     also   contracted     with   Litton   to    be   a   Resolution
    
           1
          Because the plaintiffs are appealing the district court's
    grant of summary judgment to the defendants, we view the evidence
    in the record in the light most favorable to the plaintiffs.
    See, e.g., Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 
    475 U.S. 574
    , 587-88, 
    106 S. Ct. 1348
    , 1356, 
    89 L. Ed. 2d 538
     (1986);
    Trevino v. Celanese Corp., 
    701 F.2d 397
    , 406 (5th Cir.1983)
    (citing Joplin v. Bias, 
    631 F.2d 1235
    , 1237 (5th Cir.1980)).
    
                                                   2
    Assistance Contractor (RAC).      Litton's task was twofold.           First,
    
    Litton was to wind down Columbia's affairs by returning assets to
    
    Columbia's     former     customers       and   extinguishing       Columbia's
    
    liabilities.    Second, and most important in this case, Litton was
    
    to supervise the day-to-day activities which engaged the employees
    
    at Columbia.    Litton installed a three-member management team to
    
    accomplish these goals.      The RTC compensated Litton according to
    
    number of hours the Litton team worked.
    
         In September, Columbia's employees were gathered and told
    
    about   the    Columbia's    transformation        into    a     receivership.
    
    Representatives of the RTC and Litton encouraged the plaintiffs to
    
    accept positions with the receivership.           No one disputes that the
    
    plaintiffs entered "at will" employment contracts with Mitchell
    
    Jobe.   However,    the    plaintiffs     claim   they    also   entered   oral
    
    contracts with the RTC and Litton guaranteeing them four months of
    
    employment plus two weeks severance pay.             During the September
    
    gathering, Tom Emerson, the manager of the Litton team, represented
    
    to the plaintiffs that their employment would be for at least four
    
    months, that they would receive two weeks severance pay, and that
    
    if they refused the job, he would challenge their applications for
    
    unemployment benefits.       The RTC and Litton dispute plaintiffs'
    
    claim that an oral contract arose and insist that the plaintiffs'
    
    only contracts were those with Mitchell Jobe.
    
         The plaintiffs and Litton had a difficult relationship from
    
    the start.     One of the plaintiffs, Jolene Nowlin, alleged that
    
    Emerson began a campaign of sexual harassment soon after Litton was
    
    
                                          3
    installed at the receivership.               In addition, Emerson orchestrated
    
    a   scheme    to    increase    Litton's         fees.    Emerson    instructed      the
    
    plaintiffs to inflate their time sheets by adding three to three
    
    and a half hours to the amount of time they actually worked.                         He
    
    stated that he would verify the falsified time sheets.                               The
    
    plaintiffs complied at first, but then reported the time sheet
    
    fraud and sexual harassment to the RTC.                         The plaintiffs also
    
    claimed that the Litton team was unable to perform their management
    
    functions effectively due to ignorance and incompetence.
    
          After an investigation by members of the RTC and Litton, the
    
    entire    Litton     team     was   replaced       with   one    headed   by   Carolyn
    
    McDonald.          However,    this    did    not    ease   the    friction     in   the
    
    receivership's operation.             Specifically, there were confrontations
    
    regarding the plaintiffs' responsibilities.                       In addition, the
    
    plaintiffs complained to the RTC that the new team was also
    
    ineffective.        Nowlin complained about the Litton team to an RTC
    
    official, Robert Van Buren.             Van Buren later met with Litton and
    
    Mitchell Jobe representatives, and asked Mitchell Jobe to discharge
    
    Nowlin.      Linda Wood, the Mitchell Jobe personnel manager, refused,
    
    stating that Mitchell Jobe preferred to build a documented file
    
    upon which to base Nowlin's termination.
    
          RTC officials met on Friday October 18, 1991 and decided to
    
    accelerate Columbia's "final resolution" date and merge Columbia's
    
    assets and liabilities with another failed institution.                        Litton's
    
    and the plaintiffs' employment would be terminated, and Columbia
    
    would be closed.        Later that afternoon, representatives from the
    
    
                                                 4
    RTC and Litton went to Columbia, gathered the employees, and told
    
    them to pack their belongings and to never return. The plaintiffs,
    
    in turn, filed this lawsuit.
    
    II. Standard of Review for Summary Judgment
    
            Summary judgment is proper under Rule 56 of the Federal Rules
    
    of Civil Procedure if there is "no genuine issue as to any material
    
    fact and ... the moving party is entitled to judgment as a matter
    
    of law."     Anderson v. Liberty Lobby Inc., 
    477 U.S. 242
    , 257, 
    106 S. Ct. 2505
    , 2514, 
    91 L. Ed. 2d 202
     (1986).                "[T]he plaintiff must
    
    present    affirmative    evidence   in   order    to     defeat   a   properly
    
    supported motion for summary judgment."           Id.    This requires that a
    
    plaintiff "make a showing sufficient to establish the existence of
    
    an[y] element essential to that party's case, and on which that
    
    party will bear the burden of proof at trial."            Celotex v. Catrett,
    
    
    477 U.S. 317
    , 322-23, 
    106 S. Ct. 2548
    , 2552, 
    91 L. Ed. 2d 265
     (1986).
    
    The standard for reviewing a summary judgment on appeal is the same
    
    as that applied by the district court.            Reid v. State Farm Mut.
    
    Auto Ins. Co.,     
    784 F.2d 577
    , 578 (5th Cir.1986);                   see also
    
    Bodenheimer v. PPG Industries, Inc., 
    5 F.3d 955
    , 956 (5th Cir.1993)
    
    (reviewing     grant     of    summary    judgment       in   an   employment
    
    discrimination case).         We review a grant of summary judgment de
    
    novo.    Norman v. Apache Corp., 
    19 F.3d 1017
     (5th Cir.1994).
    
         While the record reveals a complex pattern of criss-crossing
    
    motions, we concern ourselves only with the last few.                  Mitchell
    
    Jobe filed a motion to dismiss the plaintiffs' second amended
    
    complaint for failure to state a claim upon which relief can be
    
    
                                          5
    granted.    Litton filed no similar motion.   The district court, sua
    
    sponte, treated Mitchell Jobe's motion as one for summary judgment.
    
    The court issued a two-page opinion and order granting partial
    
    final judgment in favor of Mitchell Jobe and Litton.    The district
    
    court stated that the RTC alone was the plaintiff's "employer
    
    in-fact," and that the plaintiffs would therefore take nothing from
    
    Mitchell Jobe or Litton.2
    
         Shortly after the district court entered this order, the RTC
    
    moved for summary judgment.   The plaintiffs resisted, filing their
    
    own motion for summary judgment against the RTC and Litton.3     The
    
    district court held a hearing on these motions.     At the end of the
    
    hearing, the district court granted summary judgment in favor of
    
    the RTC on all claims except the Texas common law oral contract
    
    claim.     He later ruled in favor of the RTC and Litton on that
    
    issue, too.    We will review the grant of summary judgment on each
    
    issue in turn.
    
    III. The Banking Whistleblower Statute, 12 U.S.C. § 1831j
    
             In examining the plaintiffs whistleblowing claim, we must
    
    examine the patchwork of legislation woven by Congress to protect
    
    our nation's banking system. The plaintiffs have asked us to apply
    
    12 U.S.C. § 1831j, a statute which focuses on the Federal Deposit
    
         2
          We assume the district court meant that the RTC was the
    plaintiffs' employer at law, as the parties never disputed that
    Mitchell Jobe was the employer in fact in this case. Mitchell
    Jobe had written employment "at will" contracts with the
    plaintiffs, paid the plaintiffs, and furnished the plaintiffs to
    the RTC and Litton.
         3
          The plaintiffs moved for summary judgment against Litton on
    oral contract grounds.
    
                                      6
    Insurance Corporation ("FDIC"), to the RTC and its contractors.
    
    Section 1831j has been amended twice since October 1991,4 when the
    
    alleged misconduct occurred.
    
         The   plaintiffs   claim   to   be   the   victims   of   retaliatory
    
    discharge in violation of § 1831j.5        The applicable version of §
    
    1831j prohibits two types of actors from retaliating against
    
    whistleblowers.   The first type consists of "insured depository
    
    institutions," defined as "any bank or savings association the
    
    deposits of which are insured by the [Federal Deposit Insurance]
    
    Corporation...." 12 U.S.C. § 1813(c)(2). The second type consists
    
    of "Federal banking agenc[ies], Federal home loan bank[s], and the
    
    Federal Reserve Bank[s]."       Pub.L. No. 102-242, § 251, 105 Stat.
    
    
         4
          The section was amended by the FDIC Improvement Act of
    1991, Pub.L. No. 102-242, § 251, 105 Stat. 2331, 2332 (1991), and
    by Pub.L. No. 103-204, § 21(a), 107 Stat. 2406 (1993).
         5
          The 1991 version of this section, which Congress made
    retroactive, covers the time period of the relevant conduct. See
    Pub.L. No. 102-242, § 251(a)(4) (1991) ("Paragraph (2) of section
    33(a) of the Federal Deposit Insurance Act [12 U.S.C. §
    1831j(a)(2) ] (as added under the amendment made by paragraph
    (1)) shall be treated as having taken effect on January 1, 1987,
    and for purposes of any cause of action arising under such
    paragraph (as so effective) before the date of the enactment of
    this Act [December 19, 1991], the 2-year period referred to in
    section 33(b) of such Act [12 U.S.C. § 1831j(b) ] shall be deemed
    to begin on such date of enactment."). The 1991 version changed
    the original statutory language in only minor ways which are
    irrelevant to the case at hand.
    
              The third version of the statute has a broader scope
         than the first two. That version, passed in 1993, nearly
         two years after the whistleblowing conduct in this case,
         expanded the reach of § 1831j to include "any person who is
         performing, directly or indirectly, any function or service
         on behalf of the [Federal Deposit Insurance] Corporation."
         Pub.L. No. 103-204, § 21(a), 107 Stat. 2406 (1993).
         Congress did not state that this section was retroactive.
    
                                         7
    2331, 2332 (1991).            "Federal banking agencies" are defined as "the
    
    [Federal Deposit Insurance] Corporation, the Board of Governors of
    
    the Federal Reserve System, the Federal Housing Finance Board, the
    
    Comptroller of the Currency, and the Director of the Office of
    
    Thrift Supervision."            Pub.L. No. 102-242, § 251(a).
    
           Courts applying § 1831j have held that it only applies to the
    
    actors named in the statute.                     See Hicks v. Resolution Trust
    
    Corporation, 
    970 F.2d 378
     (7th Cir.1992);                    Homeyer v. Yorkville
    
    Federal Savings & Loan Association, 
    1991 WL 274226
     (S.D.N.Y.1991);
    
    cf., Walleri v. Federal Home Loan Bank, 
    1993 WL 566023
     (D.Or.1993)
    
    (dismissing claim of retaliatory discharge under § 1831j because
    
    plaintiff reported alleged wrongdoings to institutions not listed
    
    in statute). We find the applicable statutory language to be plain
    
    on its face.         It does not name the RTC, and the plaintiffs concede
    
    that Mitchell Jobe and Litton do not fall within either of the two
    
    categories of covered actors. Therefore, § 1831j does not apply in
    
    this       case,    because    none   of   the    defendants   are     named   in   the
    
    statutory coverage.6              We affirm the district court's grant of
    
    summary judgment in favor of defendants on the § 1831j claim.
    
    IV. Title VII
    
           The         next   claim       envisages      Title     VII's     provisions.
    
           6
          The subsequent actions of Congress reinforce our
    interpretation of the scope of § 1831j. In 1992, while this
    litigation was underway, Congress passed a whistleblowing statute
    specifically addressing the RTC and its contractors. See 12
    U.S.C. § 1441a(q). The plaintiffs did not plead for relief under
    this provision. Congress apparently did not think § 1831j
    applied to the RTC, otherwise they would not have passed §
    1441a(q). Section 1441a(q) does not apply to this case, because
    it was passed after the alleged impermissible conduct occurred.
    
                                                8
    Specifically, the plaintiffs argue that the district court wrongly
    
    concluded that Mitchell Jobe and Litton were not the plaintiffs'
    
    "employers" for Title VII purposes.            In addition, the plaintiffs
    
    argue the district court wrongly granted summary judgment to the
    
    RTC on the Title VII issues.
    
         First   we    address    Mitchell     Jobe's   argument   that   summary
    
    judgment should be affirmed because Mitchell Jobe was not properly
    
    a party on the Title VII issue.7            Mitchell Jobe summarized its
    
    argument for affirming summary judgment in its brief, stating
    
    "[p]laintiffs     did   not   file   charges   with   the   EEOC   [the   Equal
    
    Employment Opportunity Commission] and, therefore, they have no
    
    standing to assert Title VII claims against Mitchell Jobe in
    
    federal court."     Title VII requires charges to be filed with the
    
    EEOC against those who committed the allegedly unlawful conduct.
    
    42 U.S.C. § 2000e-5(e).        The plaintiffs admitted that they never
    
    filed such charges against Mitchell Jobe before the EEOC. Instead,
    
    the plaintiffs argue that their failure to file charges naming
    
    Mitchell Jobe is not lethal to their Title VII claims,8 and does
    
    not necessarily prevent them from pursuing Mitchell Jobe in federal
    
    court.   See Zipes v. Trans World Airlines, 
    455 U.S. 385
    , 393, 
    102 S. Ct. 1127
    , 1132, 
    71 L. Ed. 2d 234
     (1982) (holding that "filing a
    
         7
          We have the authority to do this. Degan v. Ford Motor Co.,
    
    869 F.2d 889
    , 892 (5th Cir.1989) ("Summary judgment may be
    affirmed, regardless of the correctness of the district court
    ruling, when we find in the record an adequate, independent basis
    for that result.").
         8
          Debra Boles, one of the plaintiffs, conceded she did not
    file a complaint against any of the defendants with the EEOC, and
    that therefore she cannot recover on Title VII grounds.
    
                                           9
    timely     charge   of     discrimination     with    the   EEOC   was   not   a
    
    jurisdictional      prerequisite    to    suit   in   federal   court,   but   a
    
    requirement that, like a statute of limitations, is subject to
    
    waiver, estoppel, and equitable tolling.") (footnote omitted).
    
         Plaintiffs claim they should be excused from the filing
    
    requirement because the EEOC misled them about the nature of their
    
    rights. See Blumberg v. HCA Management Co., 
    848 F.2d 642
    , 644 (5th
    
    Cir.1988), cert. denied, 
    488 U.S. 1007
    , 
    109 S. Ct. 789
    , 
    102 L. Ed. 2d 781
     (1989) (stating that one justification for tolling the period
    
    for filing charges with the EEOC would be if the EEOC misled the
    
    plaintiff).     Blumberg also stated that the plaintiff bears the
    
    burden of demonstrating a factual basis to toll the period for
    
    filing charges.      Id.     The only references found in the record to
    
    anything misleading involve a statement by plaintiffs' counsel that
    
    "[t]he EEOC concluded that it would not accept complaints against
    
    Mitchell-Jobe because it was only a payroll service." This unsworn
    
    statement is found in a document filed with the district court
    
    entitled "Status Report with Respect to EEOC Complaints."
    
             The district court failed to give ten days notice of its sua
    
    sponte motion to grant summary judgment9, as required by Federal
    
    
    
    
         9
          District courts may grant summary judgment sua sponte, "so
    long as the losing party was on notice that she had to come
    forward with all of her evidence." Celotex, 477 U.S. at 326, 106
    S.Ct. at 2554; Judwin Properties, Inc., v. United States Fire
    Ins. Co., 
    973 F.2d 432
    , 436-37 (5th Cir.1992); see also Wright,
    Miller and Kane, Federal Practice and Procedure § 2720 (1994
    Pocket Part).
    
                                             10
    Rule of Civil Procedure 56(c).10    This court has strictly enforced
    
    this notice requirement.   Leatherman v. Tarrant County Narcotics
    
    Intelligence & Coordination Unit, 
    28 F.3d 1388
     (5th Cir.1994)11;
    
    Judwin Properties Inc., 973 F.2d at 437 (5th Cir.1992);    Powell v.
    
    U.S., 
    849 F.2d 1576
    , 1579 (5th Cir.1988) (stating that notice is
    
    critical "to insure that the nonmoving party had the opportunity to
    
    make every possible factual and legal argument.") (citing cases).
    
    Despite this strictness, however, this circuit has held that the
    
         10
          The district court issued its opinion after Mitchell Jobe
    submitted a motion to dismiss the plaintiffs' second amended
    complaint for failure to state a claim upon which relief can be
    granted under Federal Rule of Civil Procedure 12(b)(6). That
    rule states that "[i]f, on a motion asserting the defense
    numbered (6) to dismiss for failure of the pleading to state a
    claim upon which relief can be granted, matters outside the
    pleading are presented to and not excluded by the court, the
    motion shall be treated as one for summary judgment and disposed
    of as provided in Rule 56, and all parties shall be given
    reasonable opportunity to present all material made pertinent to
    such a motion by Rule 56." (emphasis supplied). The comment to
    Rule 12(b)(6) specifically states that the rule "insures that
    both parties shall be given a reasonable opportunity to submit
    affidavits and extraneous proofs to avoid taking a party by
    surprise through the conversion of the motion into a motion for
    summary judgment." Cf., Washington v. Allstate Insurance Co.,
    
    901 F.2d 1281
    , 1284 (5th Cir.1990).
         11
          The Leatherman litigation has a long history. The
    district court originally dismissed the action on the grounds
    that the plaintiffs failed to satisfy the "heightened pleading
    requirement" imposed by our circuit on claims arising under 42
    U.S.C. § 1983. In the alternative, the district court granted
    summary judgment against the plaintiffs. See 
    755 F. Supp. 726
    (N.D.Tex.1991). This court affirmed the dismissal on the
    heightened pleading requirement grounds. 
    954 F.2d 1054
     (5th
    Cir.1992). The Supreme Court reversed and remanded. --- U.S. --
    --, 
    113 S. Ct. 1160
    , 
    122 L. Ed. 2d 517
     (1993). Justice Rehnquist,
    writing for a unanimous court, invalidated the heightened
    pleading requirement in regard to § 1983 actions against
    municipalities. Id. at ----, 113 S.Ct. at 1163. On remand, the
    district court adopted its alternate holding and granted summary
    judgment against the plaintiffs. The plaintiffs appealed again,
    and we affirmed. 
    28 F.3d 1388
     (5th Cir.1994).
    
                                       11
    harmless error doctrine applies to a failure to provide notice
    
    under Rule 56(c).       Leatherman, 28 F.3d at 1398;           Powell, 849 F.2d
    
    at 1580 (citing Western Fire Insurance Co. v. Copeland, 
    786 F.2d 649
     (5th Cir.1986)).      The Leatherman court noted that the harmless
    
    error doctrine has recently been expanded.
    
         "When there is no notice to the nonmovant, summary judgment
         will be considered harmless if the nonmovant has not
         additional evidence or if all of the nonmovant's additional
         evidence is reviewed by the appellate court and none of the
         evidence presents a genuine issue of material fact."
    
    Leatherman, 28 F.3d at 1398 (quoting Resolution Trust Corp. v.
    
    Sharif-Munir-Davidson Dev. Corp., 
    992 F.2d 1398
    , 1403 n. 7 (citing
    
    Powell )).
    
          In our recent cases, we have held that "[d]espite the
    
    strictness with which we enforce the notice requirement, the
    
    harmless error doctrine applies to lack of notice required by Rule
    
    56(c)."    Leatherman, 28 F.3d at 1398;            Sharif-Munir-Davidson Dev.
    
    Corp., 992 F.2d at 1403 (stating that the district court abused its
    
    discretion by granting summary judgment without sufficient notice,
    
    but affirming outcome because the lack of notice was harmless
    
    error).    We have held that the party seeking to avoid summary
    
    judgment must present specific evidence that creates a genuine
    
    issue of     material   fact,   or   at    least    identify    how   additional
    
    discovery would yield such an issue.          Leatherman, 28 F.3d at 1399;
    
    Sharif-Munir-Davidson Dev. Corp., 992 F.2d at 1403.               This evidence
    
    must have some present, existential character.                 "Rule 56(e) ...
    
    requires the nonmoving party to go beyond the pleadings and by her
    
    own affidavits, or by the "depositions, answers to interrogatories,
    
    
                                          12
    and admissions on file,' designate "specific facts showing that
    
    there is a genuine issue for trial.' "              Celotex Corp., 477 U.S. at
    
    324, 106 S.Ct. at 2553;             see also Rivanna Trawlers Unlimited v.
    
    Thompson Trawlers Inc., 
    840 F.2d 236
    , 240 (4th Cir.1988) (noting
    
    that a party opposing summary judgment "may not rest upon mere
    
    allegations or denials of his pleading");                Lake Nacimiento Ranch
    
    Co. v. County of San Luis Obispo, 
    841 F.2d 872
    , 876 (9th Cir.1987),
    
    cert. denied, 
    488 U.S. 827
    , 
    109 S. Ct. 79
    , 
    102 L. Ed. 2d 55
     (1988)
    
    (noting that the district court properly required nonmovant to make
    
    "sufficient showings" supporting essential elements of its case);
    
    Presbyterian      Church       v.    United    States,      
    752 F. Supp. 1505
    
    (D.Ariz.1990) ("Legal memoranda and oral argument do not constitute
    
    evidence      within   the    meaning    of    Rule   56(e),      and   cannot,    by
    
    themselves, create a factual dispute sufficient to defeat a summary
    
    judgment      motion   where    no    other   dispute    exists.")      (citations
    
    omitted).      If the nonmovant fails to make such a showing, and the
    
    motion is otherwise appropriate, then the lack of notice will be
    
    considered harmless error, and summary judgment will be affirmed.
    
    See Leatherman, 28 F.3d at 1398-99;                 Sharif-Munir-Davidson Dev.
    
    Corp., 992 F.2d at 1403.
    
           In this case, the plaintiffs failed to produce one shred of
    
    hard evidence to support their argument that it was not necessary
    
    to   charge    Mitchell      Jobe    before   the   EEOC.      In   addition,     the
    
    plaintiffs failed to state what the evidence they wanted to present
    
    was or why they needed more time.             Instead, the plaintiffs rely on
    
    one unsworn statement made by their attorney in a pleading.                       The
    
    
                                             13
    notice requirement of Rule 56(c) is not a license for a fishing
    
    expedition for evidence, and conjecture and conversation with the
    
    court are not a sufficient specific showing of solid evidence to
    
    shield one from summary judgment.             See Mitnik v. Cannon, 
    789 F. Supp. 175
    , 176 (E.D.Pa.1992) (holding that unsworn statements and
    
    allegations "are not sufficient ... to raise a genuine issue of
    
    material fact" under Rule 56).              Therefore, we affirm summary
    
    judgment in favor of Mitchell Jobe on the Title VII issues.
    
         We now turn to the basic issue of determining the plaintiffs'
    
    employment status under Title VII.          The district court stated that
    
    the RTC      was   the   plaintiffs'   "employer   in-fact"   in   its   order
    
    granting partial final judgment on the Title VII issues, holding
    
    that Mitchell Jobe and Litton were not the plaintiffs' employers.12
    
    The judge based this conclusion on the borrowed servant doctrine,
    
    citing two cases, Denton v. Yazoo & M.V.R. Co., 
    284 U.S. 305
    , 
    52 S. Ct. 141
    , 
    76 L. Ed. 310
     (1932) and Perron v. Bell Maintenance &
    
    Fabricators, 
    970 F.2d 1409
    , 1412 (5th Cir.1992), cert. denied, ---
    
    U.S. ----, 
    113 S. Ct. 1264
    , 
    122 L. Ed. 2d 660
     (1993).            Both of those
    
    cases involved employee injuries, not discriminatory hiring and
    
    firing.
    
              The borrowed servant doctrine is not applied in Title VII
    
    actions to determine employer status.         The Fifth Circuit announced
    
    
         12
          The district court repeated the conclusion that the RTC
    was the employer "for equal employment opportunity purposes" from
    the bench during the hearing on the cross motions for summary
    judgment filed by the RTC and the plaintiffs, stating "[Mitchell]
    Jobe and Litton are out of [the case]. They were flunkies for
    the RTC...." See supra n. 2.
    
                                           14
    the standard it would use in potential multiple employer situations
    
    to determine employer status in Mares v. Marsh, 
    777 F.2d 1066
    , 1067
    
    (5th Cir.1985) (adopting the hybrid test defined in Spirides v.
    
    Reinhardt, 
    613 F.2d 826
     (D.C.Cir.1979)).13            In Mares, the court
    
    examined     three   possible   tests,      labeled   "agency,"   "economic
    
    realities," and "hybrid."       The agency test turns on the employer's
    
    right to control the employee.        Id.     The economic realities test
    
    turns on whether the employee, as a matter of economic reality, is
    
    dependent upon the business to which he renders service.           Id.   The
    
    hybrid test steers a middle ground, focussing on "the extent of the
    
    employer's right to control the "means and manner' of the worker's
    
    performance."    Id.   (quoting Spirides, 613 F.2d at 831).
    
          The articulation, elaboration, and application of the hybrid
    
    test was first accomplished by the Spirides court, which suggested
    
    a laundry list of factors for courts to consider when utilizing the
    
    hybrid test.     The court warned that "[c]onsideration of all the
    
    circumstances of the work relationship is essential, and no one
    
    factor is determinative." Id. at 831 (footnote omitted).           See also
    
    Deal v. State Farm County Mut. Ins. Co. of Texas, 
    5 F.3d 117
    , 118-
    
    19 (5th Cir.1993) (applying hybrid test to determine whether
    
    insurance company was insurance agent's employer under Title VII
    
    and ADEA);    Fields v. Hallsville Indep. Sch. Dist., 
    906 F.2d 1017
    ,
    
    
         13
          We note that as a preliminary issue, the defendant must
    fall within the statutory definition of "employer" in Title VII.
    See 42 U.S.C. § 2000e(b). Neither Mitchell Jobe nor Litton
    allege anywhere that they do not fall within this statutory
    definition of employer. For purposes of this appeal, we assume
    that they do fall within this definition.
    
                                        15
    1019-20 (5th Cir.1990), cert. denied, 
    498 U.S. 1026
    , 
    111 S. Ct. 676
    ,
    
    
    112 L. Ed. 2d 668
     (1991) (applying hybrid test to determine whether
    
    Texas was teachers' employer under Title VII).       The Mares court
    
    accepted the Spirides factors, but noted that the right to control
    
    is an especially crucial factor.      Mares, 777 F.2d at 1067-68.
    
         The district court wove its decision to grant partial final
    
    judgment to Mitchell Jobe and Litton on the Title VII issues with
    
    fragile thread.     The court stated that because the RTC exercised
    
    "operating control over all the employees of the bank," the RTC was
    
    the plaintiff's employer.      The court stated that "the nominal
    
    employers14 had neither control over the plaintiffs nor any role in
    
    the actions taken against them," and granted final judgment to
    
    Mitchell Jobe and Litton.
    
         The borrowed servant doctrine and the agency test are cut from
    
    the same cloth.15   The Supreme Court case the district court cited
    
    for support explained the borrowed servant doctrine in a suit
    
    involving a railroad employee who was injured while loading mail
    
    under the direction of the post office.    The Court's analysis under
    
    
         14
           It is interesting that the district court   referred to the
    "nominal employers," plural, apparently meaning    Mitchell Jobe and
    Litton. The record does not reveal any written     contract or
    agreement between Litton and the plaintiffs for    employment. This
    may be relevant in addressing the oral contract    issue discussed
    below.
         15
          We repeat that the borrowed servant test uses criteria
    similar to the agency test expressly rejected by the Mares court.
    777 F.2d at 1067 n. 1 ("The strict common law "agency' test
    generally has not been applied to federal social welfare and
    antidiscrimination legislation, since it is considered
    inconsistent with the remedial purposes behind such
    legislation.") (citing cases).
    
                                     16
    the borrowed servant doctrine turned on who controlled and directed
    
    the employee's work.16
    
         In light of Mares and its progeny, we find that the district
    
    court committed an error of law when clothing its decision in the
    
    ill-fitting borrowed servant doctrine rather than the well-tailored
    
    hybrid    test   to   determine   whether   the   defendants   were   the
    
    plaintiffs' employer under Title VII.       The "right to control" is a
    
    common and important thread running through the borrowed servant
    
    doctrine, agency test, and hybrid test.       However, the hybrid test
    
    is fabricated with additional threads to yield a different pattern.
    
    Broussard v. L.H. Bossier, Inc., 
    789 F.2d 1158
    , 1160 (5th Cir.1986)
    
    (repeating the Spirides laundry list of factors in addition to the
    
    right to control in a single employer Title VII case).         The grant
    
    of summary judgment regarding Title VII unravels because the court
    
    below applied the wrong legal standard to determine employee
    
    status.   On remand, the hybrid test, as enunciated in Spirides and
    
    adopted and applied in Mares, is an appropriate starting point for
    
    determining whether Litton is an employer under Title VII.17
    
         16
          "Whether the railroad company may be held liable for [the
    employee's] act depends not upon the fact that he was their
    servant generally, but upon whether the work which he was doing
    at the time was their work or that of another; a question
    determined, usually at least, by ascertaining under whose
    authority and command the work was being done. When one person
    puts his servant at the disposal and under the control of another
    for the performance of a particular service for the latter, the
    servant in respect to his acts in that service, is to be dealt
    with as the servant of the latter and not the former." Denton v.
    Yazoo & M. V. R. Co., 
    284 U.S. 305
    , 308, 
    52 S. Ct. 141
    , 141, 
    76 L. Ed. 310
     (1932).
         17
          The factors listed in Spirides, in addition to the right
    to control are:
    
                                        17
         The   district       court   did    not       specifically         address      the
    
    conflicting   interpretations       of       the    evidence      in        the   record
    
    concerning Litton's possible status as an employer under Title VII
    
    in its opinion granting partial final judgment to Litton. There is
    
    evidence in the record concerning Litton's relationship to the
    
    plaintiffs.   Without commenting on the strength or persuasiveness
    
    of this evidence, we find that there may be a genuine issue of
    
    material fact regarding Litton's employer status. On remand to the
    
    district   court,   the    record   should         be    carefully     examined      and
    
    evaluated in applying the hybrid test in determining whether Litton
    
    is an employer for Title VII purposes.
    
         The   individual     defendants     argue          that   even    if    they   were
    
    considered the plaintiffs' employer under Title VII, they would be
    
    entitled to summary judgment on the retaliatory discharge issue.
    
    They claim that the plaintiffs failed to carry their legal burden,
    
    as described by the cases applying Title VII.                         See Whatley v.
    
    
               "(1) the kind of occupation, with reference to whether
               the work usually is done under the direction of a
               supervisor or is done by a specialist without
               supervision; (2) the skill required in the particular
               occupation; (3) whether the "employer' or the
               individual in question furnishes the equipment used and
               the place of work; (4) the length of time during which
               the individual has worked; (5) the method of payment,
               whether by time or by the job; (6) the manner in which
               the work relationship is terminated; i.e., by one or
               both parties, with or without notice and explanation;
               (7) whether annual leave is afforded; (8) whether the
               work is an integral part of the business of the
               "employer'; (9) whether the worker accumulates
               retirement benefits; (10) whether the "employer' pays
               social security taxes; and (11) the intention of the
               parties."
    
         Spirides, 613 F.2d at 832.
    
                                            18
    Metropolitan Atlanta Rapid Transit Auth., 
    632 F.2d 1325
     (5th
    
    Cir.1980);     McKenna v. Weinberger, 
    729 F.2d 783
     (D.C.Cir.1984).
    
    Plaintiffs    contend           they    were     discharged        in       retaliation     for
    
    reporting allegations of sexual harassment by Emerson.
    
         The    Supreme       Court        has   recently     reexamined          the   elaborate
    
    tapestry of shifting burdens in Title VII suits in St. Mary's Honor
    
    Ctr. v. Hicks, --- U.S. ----, ---- - ----, 
    113 S. Ct. 2742
    , 2747-53,
    
    
    125 L. Ed. 2d 407
     (1993).                The Court set out to untangle the basic
    
    burden shifting process by identifying three procedural steps. One
    
    proceeds to the next step only after the prior one is made.
    
             First, the plaintiffs must establish a prima facie case of
    
    the alleged wrongdoing by a preponderance of the evidence.                                 Once
    
    the prima facie case is established, there is a presumption of
    
    discrimination.           Second,        the    defendant        must       articulate     some
    
    legitimate, nondiscriminatory reason for discharging the employee.
    
    Once this step is taken, the presumption of discrimination created
    
    by the prima facie case is pierced.                       In order to patch their
    
    discrimination claim, the plaintiffs must prove that the legitimate
    
    reason    articulated       by     the       defendant    was     false       and   that   the
    
    defendant's    real        reason        for    discharging           the    plaintiff      was
    
    discriminatory       or     otherwise          prohibited        by    Title     VII.       The
    
    plaintiffs    bear        the     ultimate       burden     of     proving       intentional
    
    discrimination at all times.                   Id. at ---- - ----, 113 S.Ct. at
    
    2747-48;    see also Fields v. Hallsville Independent School Dist.,
    
    
    906 F.2d 1017
     (5th Cir.1990);                Shirley v. Chrysler First, Inc., 
    970 F.2d 39
    , 42 (5th Cir.1992).
    
    
                                                   19
            The plaintiffs' prima facie case for retaliation under Title
    
    VII is woven from three threads.                 The claimant must demonstrate:
    
    (1) that she engaged in a statutorily protected activity; (2) that
    
    she    experienced        an    adverse    employment        action    following      the
    
    protected activity;            and (3) that a causal link exists between the
    
    protected activity and the adverse employment action. Shirley, 970
    
    F.2d at       42;    Whatley,      632    F.2d   at    1328;     Jenkins      v.    Orkin
    
    Exterminating Co., 
    646 F. Supp. 1274
    , 1277 (E.D.Tex.1986).                          In its
    
    motion for summary judgment, the RTC did not dispute that the
    
    plaintiffs had the first two parts of the prima facia case.18
    
    Instead, the        RTC    claimed    that   plaintiffs        had    no   evidence    of
    
    causation. The RTC concluded that the plaintiffs' prima facia case
    
    fell apart without the causation thread to stitch together their
    
    statutorily protected activities and their termination.
    
           The RTC contends that its decision to accelerate the "final
    
    resolution" of Columbia was the cause of the plaintiffs' employment
    
    termination.        It argues that this decision did not offend Title
    
    VII, because it caused the termination of all of the employees at
    
    Columbia, not just the plaintiffs. Further, it claims the decision
    
    was motivated by economic reasons.                 Therefore, the RTC concludes
    
    that    the    plaintiffs        cannot    prove      that    they    were   fired     in
    
    retaliation for protected conduct.
    
            The courts have sketched an outline of indicia of causation
    
    in Title VII cases, because causation is difficult to prove.
    
           18
          Litton did not submit a brief on the issue, because the
    district court dismissed the Title VII claims against it earlier.
    
    
                                               20
    Employers rarely leave concrete evidence of their retaliatory
    
    purposes and motives.       For example, in Jenkins, the court looked to
    
    three factors for guidance in determining causation.                    First, the
    
    court examined the employee's past disciplinary record.                     Second,
    
    the court investigated whether the employer followed its typical
    
    policy and procedures in terminating the employee.                      Third, it
    
    examined the temporal relationship between the employee's conduct
    
    and discharge.      Jenkins, 646 F.Supp. at 1278.               This analysis is
    
    highly fact specific, as the Supreme Court recently noted.                        St.
    
    Mary's, --- U.S. at ----, 113 S.Ct. at 2756 ("the question facing
    
    triers of fact in discrimination cases is both sensitive and
    
    difficult.") (quoting United States Postal Service Bd. of Governors
    
    v. Aikens, 
    460 U.S. 711
    , 716, 
    103 S. Ct. 1478
    , 1482, 
    75 L. Ed. 2d 403
    
    (1983)).     On    remand   to     the    district     court,   there   may      be   a
    
    conclusion of causation in the discriminatory discharge issue based
    
    on a development and analysis of the facts.
    
    V. Oral Contract
    
          The    plaintiffs     argued       below   that    they   entered     an   oral
    
    contract    with   Litton    and    the    RTC   for    at   least   four     months
    
    employment and two weeks severance pay.                The district court, in a
    
    memorandum opinion, concluded that "[t]here is no evidence of any
    
    oral contract, only the assertion by the plaintiffs."                     The court
    
    granted summary judgment against the plaintiffs on this issue.
    
         The plaintiffs contend that there are two employment contracts
    
    in this case.      First, there is the written contract for "at will"
    
    employment between Mitchell Jobe and the plaintiffs.                        Second,
    
    
                                              21
    plaintiffs    argue   that    there    is   an   oral   contract   between    the
    
    plaintiffs, Litton, and the RTC.             The plaintiffs have produced
    
    evidence, in the form of affidavits and depositions to support
    
    their contentions.     The defendants have also produced evidence to
    
    support their argument that the written contract with Mitchell Jobe
    
    is the only employment contract existing in this case.
    
         Determining whether there are two contracts or one contract,
    
    and what the parties intended the terms these contracts to embrace,
    
    is a very fact specific endeavor.            Foreca, S.A. v. GRD Dev. Co.,
    
    
    758 S.W.2d 744
    , 746 (Tex.1988) (holding that questions concerning
    
    the formation and terms of a particular contract, and the intent of
    
    the parties, were properly considered questions of fact for a jury
    
    to decide);    Cothron Aviation, Inc. v. Avco Corp., 
    843 S.W.2d 260
    ,
    
    264 (Tex.App.—Ft. Worth 1992) (reviewing grant of summary judgment
    
    on question of whether an oral settlement agreement was formed);
    
    cf., McClure v. Duggan, 
    674 F. Supp. 211
     (N.D.Tex.1987).                       The
    
    plaintiffs and defendants have articulated conflicting summary
    
    judgment   evidence.         Without    commenting      on   the   strength    or
    
    credibility of this evidence, we find that the parties have raised
    
    a genuine issue of material fact regarding the possible existence
    
    of an oral contract and the terms of any contracts between the
    
    parties.     Therefore, we reverse the district court's grant of
    
    summary judgment and remand this issue to the district court to
    
    allow the fact finder to sort through the evidence and iron out the
    
    inconsistencies.
    
    VI. Conclusion
    
    
                                           22
         We AFFIRM district court's grant of summary judgment to
    
    defendants on the 12 U.S.C. § 1831j claims.    We AFFIRM summary
    
    judgment in favor of Mitchell Jobe on the Title VII claims.    We
    
    REVERSE and REMAND the district court's grant of summary judgment
    
    to the RTC and Litton on the Title VII claims.    We REVERSE AND
    
    REMAND the district court's grant of summary judgment to the RTC
    
    and Litton on the oral contract claims.
    
    
    
    
                                   23
    

Document Info

DocketNumber: 93-02683

Filed Date: 9/28/1994

Precedential Status: Precedential

Modified Date: 3/3/2016

Authorities (37)

Deal v. State Farm County Mut. Ins. Co. of Texas , 5 F.3d 117 ( 1993 )

Bodenheimer v. PPG Industries, Inc. , 5 F.3d 955 ( 1993 )

Norman v. Apache Corp. , 19 F.3d 1017 ( 1994 )

Denton v. Yazoo & Mississippi Valley R. Co. , 284 U.S. 305 ( 1932 )

Zipes v. Trans World Airlines, Inc. , 455 U.S. 385 ( 1982 )

Postal Service Bd. of Governors v. Aikens , 460 U.S. 711 ( 1983 )

Matsushita Electric Industrial Co., Ltd. v. Zenith Radio ... , 475 U.S. 574 ( 1986 )

Anderson v. Liberty Lobby , 477 U.S. 242 ( 1986 )

Celotex Corporation v. Myrtle Nell Catrett, Administratrix ... , 477 U.S. 317 ( 1986 )

Leatherman v. Tarrant County Narcotics Intelligence and ... , 507 U.S. 163 ( 1993 )

St. Mary's Honor Center v. Hicks , 509 U.S. 502 ( 1993 )

Despina Spirides v. John E. Reinhardt, Director of United ... , 613 F.2d 826 ( 1979 )

Howard W. Joplin v. Grover Franklin Bias and D. Carrington , 631 F.2d 1235 ( 1980 )

24 Fair empl.prac.cas. 1148, 24 Empl. Prac. Dec. P 31,437 ... , 632 F.2d 1325 ( 1980 )

33-fair-emplpraccas-1324-31-empl-prac-dec-p-33489-israel-trevino , 701 F.2d 397 ( 1983 )

Barbara Franklin McKenna v. Caspar W. Weinberger, Secretary ... , 729 F.2d 783 ( 1984 )

40 Fair empl.prac.cas. 858, 39 Empl. Prac. Dec. P 35,840 ... , 777 F.2d 1066 ( 1985 )

Odie Joe Reid v. State Farm Mutual Automobile Insurance ... , 784 F.2d 577 ( 1986 )

western-fire-insurance-company-plaintiffcounter-v-alva-sherwood , 786 F.2d 649 ( 1986 )

Donnie Sue Coker Broussard v. L.H. Bossier, Inc. , 789 F.2d 1158 ( 1986 )

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