White Glove Staffing, Inc. v. Methodist Hospitals ( 2020 )

Case: 19-10006 Document: 00515273289 Page: 1 Date Filed: 01/15/2020
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
FILED
No. 19-10006 January 15, 2020
Lyle W. Cayce
WHITE GLOVE STAFFING, INCORPORATED, Clerk
Plaintiff - Appellant
v.
METHODIST HOSPITALS OF DALLAS; DALLAS METHODIST
HOSPITALS FOUNDATION, INCORPORATED,
Defendants - Appellees
Appeal from the United States District Court
for the Northern District of Texas
Before OWEN, Chief Judge, and HAYNES and COSTA, Circuit Judges.
HAYNES, Circuit Judge:
Appellant White Glove Staffing, Inc. (“White Glove”) appeals the district
court’s dismissal of its 42 U.S.C. § 1981 racial discrimination claim and grant
of summary judgment on its § 1981 retaliation claim. We REVERSE the
district court’s dismissal of White Glove’s racial discrimination claim, AFFIRM
the district court’s grant of summary judgment on White Glove’s retaliation
claim, and REMAND the case for proceedings consistent with our opinion.
I. Background
White Glove is a staffing corporation that provides clients with
temporary kitchen and food service personnel. Appellees Methodist Hospitals
Case: 19-10006 Document: 00515273289 Page: 2 Date Filed: 01/15/2020
No. 19-10006
of Dallas and Dallas Methodist Hospitals Foundation, Inc. (collectively,
“Methodist” or the “Hospital”) own and operate multiple hospitals in the
Dallas–Fort Worth area.
In May 2016, White Glove employees Michael White, Shawn White, and
Pedro Gutierrez met with Methodist chef Jose Soto to discuss whether White
Glove could provide the Hospital with temporary kitchen staff. The same
White Glove employees later met with Jeff Jennings, Methodist’s catering
coordinator. Jennings said that Methodist “wanted to give [White Glove] a
shot” at providing temporary staff and that White Glove “ha[d] the contract.”
Shawn and Gutierrez met with Jennings again the next day. Linda
White, the founder and owner of White Glove, was also present. At the
meeting, Jennings allegedly stated that Soto “only really want[ed] to work with
Hispanics” and that Soto “preferred Hispanics” over other groups.
Additionally, Gutierrez said Soto told him to “[s]end [him] some compadres,”
which Gutierrez interpreted as “meaning send Mexican people, Hispanic
people.”
Though White Glove and Methodist had not yet reached a formal
agreement, Methodist asked White Glove to begin providing it with kitchen
staff. On Thursday, May 19, White Glove sent Carolyn Clay, an African-
American woman, to work in the Hospital’s kitchen as a prep cook. Clay
returned to work without issue the following Friday and Saturday. But during
Clay’s Saturday shift, the only other African-American working in the kitchen
allegedly told her, “I’m surprised you’re in here. They usually don’t let blacks
in this kitchen.” The employee said that she was working there “only because”
she had been there for eighteen years.
Clay returned to work the following Monday and finished her shift
without incident. But afterwards, a “very upset” Jennings told Shawn that
Soto “was not happy because he wanted only Hispanics. That’s what Chef
2
Case: 19-10006 Document: 00515273289 Page: 3 Date Filed: 01/15/2020
No. 19-10006
wanted. . . . I don’t want anybody else out here. . . . We went over this. I don’t
know why you’re sending out other people.”
Shawn responded, “that’s kind of messed up, I mean for you to tell me
that this is exactly all you’re wanting.” He continued: “I have a lot of people of
all different backgrounds, so if you’re needing someone else tomorrow . . . I’ll
do what I can to try and put someone else in that spot. . . .” But he cautioned
that “being as it’s so late in the day, and [that the company needs someone] so
early tomorrow, I’m not sure if I can get you anyone else. And, you know, [Clay]
is already familiar with the kitchen.” Shawn claimed that Jennings “wasn’t
too happy” about the conversation.
White Glove did not have a Hispanic staffer to send to Methodist the next
morning, so it again sent Clay to the Hospital. Three hours after Clay arrived,
a junior chef told her to leave because “[w]e don’t need you anymore today.” A
“clearly upset” Jennings then called Linda, stating that Soto “didn’t want to
use [White Glove] anymore because he was mad about [Clay] because she
wasn’t Hispanic.” Michael said that Jennings “wanted to cancel everything”
and indicated that “the whole deal was off.”
When Linda asked Jennings “if that was the only reason” for the
termination, Jennings reiterated Soto’s displeasure at being sent a non-
Hispanic worker. Linda responded, “That’s a little hard to say out loud
sometimes, isn’t it, Jeff?” Jennings said, “Yeah, it is. But it is what it is.”
Linda asked Jennings for another opportunity to work out an agreement
with Methodist. Though Jennings initially agreed to meet, he called back
several minutes later and said there would be no follow-up meeting: he “was
going to go with what [Soto] wanted.” White Glove did not work with
Methodist after that day.
White Glove and Clay sued Methodist in May 2017, alleging violations
of § 1981 and Title VII, among other claims. Methodist moved to dismiss White
3
Case: 19-10006 Document: 00515273289 Page: 4 Date Filed: 01/15/2020
No. 19-10006
Glove’s § 1981 racial discrimination claim under Federal Rule of Civil
Procedure 12(b)(6). The district court granted the motion, concluding that
White Glove lacked standing to assert a discrimination claim because it was a
corporation without a racial identity. Methodist also moved for summary
judgment on White Glove’s § 1981 retaliation claim. The district court granted
Methodist’s motion. This appeal followed.
II. Standard of Review
We review a district court’s Rule 12(b)(6) dismissal de novo, “accepting
all well-pleaded facts as true and viewing those facts in the light most favorable
to the plaintiff[].” Doe ex rel. Magee v. Covington Cty. Sch. Dist. ex rel. Keys,
675 F.3d 849, 854 (5th Cir. 2012) (en banc) (internal quotation marks and
citation omitted). We also review a district court’s grant of summary judgment
de novo, interpreting all facts and drawing all reasonable inferences in favor
of the non-movant. Zastrow v. Hous. Auto Imps. Greenway Ltd., 789 F.3d 553,
559–60 (5th Cir. 2015).
III. Discussion
White Glove appeals the district court’s dismissal of its § 1981 racial
discrimination claim on standing grounds. White Glove also appeals the
district court’s grant of summary judgment on its § 1981 retaliation claim. We
address each issue in turn.
A. Statutory Standing
Methodist argues that White Glove lacks standing to bring a § 1981
discrimination claim. We hold that White Glove does in fact have standing to
assert its claim.
Methodist first argues that White Glove lacks standing to assert a § 1981
claim because it does not have a minority racial identity. The Supreme Court
has never decided whether a corporation can assert a § 1981 discrimination
claim. It has stated in a Fourteenth Amendment housing case that “a
4
Case: 19-10006 Document: 00515273289 Page: 5 Date Filed: 01/15/2020
No. 19-10006
corporation . . . has no racial identity and cannot be the direct target
of . . . discrimination.” Vill. of Arlington Heights v. Metro. Hous. Dev. Corp.,
429 U.S. 252, 263 (1977). But this language was not necessary to the Court’s
ruling in that case because it found that another party had standing. 1 See
Carnell Const. Corp. v. Danville Redev. & Hous. Auth., 745 F.3d 703, 715 (4th
Cir. 2014) (“[T]he quoted language from Arlington Heights was surplusage
unrelated to the Court’s determination of the standing issue presented.”); see
also Hudson Valley Freedom Theater, Inc. v. Heimbach, 671 F.2d 702, 704 (2d
Cir. 1982) (“[T]he sentence was of only academic importance and we do not
believe that the Supreme Court would slavishly apply it so as to deny [the
plaintiff] its day in court.”). More importantly, Arlington Heights did not
address standing under a statute; instead, it limited its holding to the
plaintiffs’ Fourteenth Amendment claim. 429 U.S. at 271. The Supreme Court
has never addressed corporate standing for § 1981 racial discrimination
claims, and we have never held that constitutional discussion in Arlington
Heights forecloses corporate standing in this statutory context.
Indeed, several of our sister circuits have held that a corporation may
assert § 1981 claims. See Thinket Ink Info. Res., Inc. v. Sun Microsystems, Inc.,
368 F.3d 1053, 1060 (9th Cir. 2004) (“[I]f a corporation either suffers
discrimination harm cognizable under § 1981, or has acquired an imputed
racial identity, it is sufficiently within the statutory zone of interest to have
prudential standing to bring an action under § 1981.”). 2 We have also
1The Arlington Heights Court did not decide whether the corporate plaintiff had
standing to assert claims on behalf of other individuals because an individual plaintiff had
standing to do so. Id. at 263–64.
2 See also Domino’s Pizza, Inc. v. McDonald, 546 U.S. 470, 473 n.1 (2006) (“[T]he
Courts of Appeals to have considered the issue have concluded that corporations may raise
§ 1981 claims.”); McClain v. Avis Rent A Car Sys., Inc., 648 F. App’x 218, 222 n.4 (3d Cir.
2016) (concluding that a corporate plaintiff had “statutory standing under § 1981 based on
the theory that the corporation was discriminated against due to the race of its owner and
5
Case: 19-10006 Document: 00515273289 Page: 6 Date Filed: 01/15/2020
No. 19-10006
permitted a corporation to assert a § 1981 claim without addressing standing.
See Body By Cook, Inc. v. State Farm Mut. Auto. Ins., 869 F.3d 381, 386 (5th
Cir. 2017) (holding that the plaintiff company had adequately alleged that it
was a racial minority because it was “a ‘100% African American-owned body
shop’”).
White Glove is not minority-owned. Methodist argues that because
White Glove lacks an imputed racial identity, it necessarily lacks standing to
assert a § 1981 discrimination claim. But Methodist overreads existing
precedent. The circuit decisions holding that corporations with imputed racial
identities may assert § 1981 claims do not mean that a corporation must have
a racial identity to assert such a claim.
In Gersman v. Group Health Ass’n, the D.C. Circuit concluded that “the
determination whether a corporation has a racial identity is not determinative
of whether that corporation has standing to bring a discrimination claim.” 931
F.2d 1565, 1568 (D.C. Cir. 1991), vacated on other grounds, 502 U.S. 1068
(1992) (vacating and remanding for reconsideration in light of the Civil Rights
Act of 1991), aff’d on reh’g, 975 F.2d 886 (D.C. Cir. 1992). There, corporate
plaintiff CSI alleged that defendant GHA had terminated its contractual
relationship with CSI because CSI’s shareholders were Jewish. Id. at 1567.
The D.C. Circuit held that CSI had standing to assert a § 1981 discrimination
claim. Id. at 1569–70.
main operator”); Carnell, 745 F.3d at 715 (“We hold that a corporation that is minority-owned
and has been properly certified as such under applicable law can be the direct object of
discriminatory action and establish standing to bring an action based on such
discrimination.”); Heimbach, 671 F.2d at 706–07 (“[W]e predict that, despite the sentence in
the Arlington Heights opinion, the Supreme Court would hold that [a corporation established
to advance minority interests] has standing to assert claims of racial discrimination.”); Des
Vergnes v. Seekonk Water Dist., 601 F.2d 9, 13, 14 (1st Cir. 1979) (holding that a corporation
has standing to assert a § 1981 claim “against any other person who, with a racially
discriminatory intent, injures him because he made contracts with non-whites.”).
6
Case: 19-10006 Document: 00515273289 Page: 7 Date Filed: 01/15/2020
No. 19-10006
In so doing, the D.C. Circuit rejected the rationale of corporate racial
identity: “Rather than assume that racial identity is a predicate to
discriminatory harm, we might better approach the problem by assuming that,
if a corporation can suffer harm from discrimination, it has standing to litigate
that harm.” Id. at 1568. The court continued:
[A] party may suffer a legally cognizable injury from
discrimination even where that party is not a member of a
protected minority group. Thus, it is not necessary to determine
whether CSI has a “racial identity.” Such a query would lead to
difficulties of determining what, in fact, constitutes a racial
identity. For example, in the present case, CSI alleges that it has
a racial identity because it is operated and owned by Mr. and Mrs.
Gersman, who are both Jewish. Yet the situation would be no
different if Gentile shareholders owned CSI and GHA ended the
contractual relationship because the corporation had a single
Jewish employee. Thus, CSI need not have a “Jewish identity,” or
even have predominantly Jewish owners or employees, in order to
suffer injury from GHA’s discriminatory actions.
Id. at 1569 (citations omitted). Because the court concluded that CSI’s injury
fell “within the zone of interests protected by” § 1981, it concluded that it “need
not determine whether a corporation can in fact have a racial identity.” Id. 3
Methodist argues that Gersman conflicts with our decision in Body By
Cook because Body By Cook requires a corporation to have a racial identity to
assert a § 1981 discrimination claim. But Body By Cook contains no such
language. We did not even discuss standing in that decision. Body By Cook,
869 F.3d at 386. We merely recognized, on review of a Rule 12(b)(6) dismissal,
that the plaintiff corporation had adequately alleged that it was a racial
3 The Tenth Circuit has adopted the D.C. Circuit’s reasoning. See Guides, Ltd. v.
Yarmouth Grp. Prop. Mgmt., Inc., 295 F.3d 1065, 1072 (10th Cir. 2002) (holding that a
corporation “has standing to assert discrimination claims under § 1981 . . . where such
discrimination is based on the race of one of its employees”).
7
Case: 19-10006 Document: 00515273289 Page: 8 Date Filed: 01/15/2020
No. 19-10006
minority for § 1981 purposes. Id. We never held that such racial identity was
mandatory for corporate standing. See id.
Methodist also claims that Gersman is distinguishable because White
Glove did not argue that Methodist terminated negotiations solely because of
White Glove’s affiliation with Clay. “In other words,” Methodist argues, “the
alleged discrimination was not directed towards White Glove, but towards
Clay.” But Methodist’s argument is another variation on its proposed racial
identity requirement. Reading Gersman to apply only when a corporation is
“affiliated”—whatever that means—with a minority would mean that
Gersman applies only when a corporation has racial minority status by proxy.
The Gersman court explicitly rejected this result. 931 F.2d at 1568.
Methodist has not identified case law that explicitly requires a corporate
racial identity for § 1981 standing. Nor has it proffered a compelling reason to
reject Gersman’s persuasive reasoning. We hold that White Glove does not
need a racial identity to have standing to assert a § 1981 racial discrimination
claim.
We also conclude that White Glove has satisfied the Supreme Court’s
test for statutory standing set forth in Lexmark International, Inc. v. Static
Control Components, Inc., 572 U.S. 118 (2014). A plaintiff has statutory
standing under Lexmark if it “falls within the class of plaintiffs whom Congress
has authorized to sue under” a substantive statute. Id. at 127–28, 128 n.4.
When assessing standing under Lexmark, we look to (1) whether the plaintiff
falls within the statute’s “zone of interests” and (2) whether the plaintiff’s
alleged injuries were “proximately caused by violations of the statute.” Id. at
129, 132. We address each inquiry in turn.
We first examine whether White Glove falls within the zone of interests
that § 1981 protects. “Whether a plaintiff comes within the zone of interests is
an issue that requires [courts] to determine, using traditional tools of statutory
8
Case: 19-10006 Document: 00515273289 Page: 9 Date Filed: 01/15/2020
No. 19-10006
interpretation, whether a legislatively conferred cause of action encompasses
a particular plaintiff’s claim.” Id. at 127 (internal quotation marks and citation
omitted). This test is “not especially demanding.” Id. at 130 (internal
quotation marks and citation omitted). It “forecloses suit only when a
plaintiff’s interests are so marginally related to or inconsistent with the
purposes implicit in the statute that it cannot reasonably be assumed that
Congress authorized that plaintiff to sue.” Id. (internal quotation marks and
citation omitted).
To determine whether White Glove’s claim satisfies the zone-of-interests
test, we look to the operative statute. Section 1981 states, “All persons within
the jurisdiction of the United States shall have the same right . . . to make and
enforce contracts . . . as is enjoyed by white citizens . . . .” 42 U.S.C. § 1981; see
also Domino’s Pizza, Inc. v. McDonald, 546 U.S. 470, 474–75 (2006) (stating
that § 1981 “protects the equal right of ‘[a]ll persons within the jurisdiction of
the United States’ to ‘make and enforce contracts’ without respect to race.”
(quoting 42 U.S.C. § 1981)).
White Glove’s claim satisfies the zone-of-interests test. White Glove
alleges that Methodist impinged on its right to contract because White Glove
sent Clay, an African-American woman, to work in the Hospital’s kitchen.
Methodist argues that White Glove’s claim falls outside § 1981’s zone of
interests because the alleged discrimination was against Clay, not White Glove
itself. But White Glove’s claim is not “so marginally related to or inconsistent
with the purposes implicit in [§ 1981] that it cannot reasonably be assumed
that Congress authorized [White Glove] to sue.” See Lexmark, 572 U.S. at 130
(internal quotation marks and citation omitted). White Glove has satisfied the
zone-of-interests test.
We next examine whether White Glove’s claimed injuries were
“proximately caused by violations of” § 1981. Lexmark, 572 U.S. at 132. As
9
Case: 19-10006 Document: 00515273289 Page: 10 Date Filed: 01/15/2020
No. 19-10006
an initial matter, Methodist challenges White Glove’s proximate cause
argument only in a footnote. “Arguments subordinated in a footnote are
insufficiently addressed in the body of the brief, and thus are waived.”
Arbuckle Mtn. Ranch of Tex., Inc. v. Chesapeake Energy Corp., 810 F.3d 335,
339 n.4 (5th Cir. 2016) (internal quotation marks and citation omitted).
Methodist has waived its argument.
But even if Methodist had not waived the argument, White Glove has
independently alleged proximate cause. Section 1981 prohibits racial
discrimination in making and enforcing contracts. See 42 U.S.C § 1981. White
Glove claims that Methodist terminated negotiations because White Glove sent
Clay to work in the Hospital’s kitchen. White Glove’s alleged harm—
termination of its prospective contract—has a “sufficiently close connection” to
the alleged discrimination that § 1981 prohibits. See Lexmark, 572 U.S. at
132–33. Because White Glove has satisfied both prongs of the Lexmark
inquiry, we hold that White Glove has statutory standing to assert a § 1981
racial discrimination claim. See id. at 129, 132. 4
B. Retaliation
White Glove also appeals the district court’s grant of summary judgment
on its § 1981 retaliation claim. To assert a successful § 1981 retaliation claim,
White Glove must show “(1) that [it] engaged in activities protected by § 1981;
(2) that an adverse action followed; and (3) a causal connection between the
protected activities and the adverse action.” Body by Cook, 869 F.3d at 390.
We conclude that no genuine factual dispute exists regarding whether White
4 Methodist also argues that the third-party standing doctrine forecloses White
Glove’s claim. We disagree. The third-party standing doctrine generally prohibits a plaintiff
from asserting claims based on a third party’s legal rights. See Duke Power Co. v. Carolina
Envtl. Study Grp., Inc., 438 U.S. 59, 80 (1978). But White Glove’s discrimination claim is
based on the direct harm that White Glove itself suffered when Methodist ended negotiations
for allegedly discriminatory reasons. White Glove’s claim is thus grounded in the alleged
violation of its own legal rights.
10
Case: 19-10006 Document: 00515273289 Page: 11 Date Filed: 01/15/2020
No. 19-10006
Glove engaged in protected activities. We thus affirm the district court’s
judgment.
Because the parties argued this case only under the Title VII standard
for protected activity, we will assume arguendo that it applies in the § 1981
nonemployment context. Under this standard, we examine whether White
Glove purposively opposed Methodist’s allegedly discriminatory conduct. See
Thompson v. Somervell Cty., 431 F. App’x 338, 341 (5th Cir. 2011) (per curiam).
In arguing that it opposed Methodist’s discriminatory behavior, White
Glove points to the following evidence:
• White Glove sent Clay to work at Methodist even after learning that
Soto preferred Hispanic workers. White Glove again sent Clay back
to work at Methodist three more times after Clay’s first shift.
• After Jennings reiterated that Soto “wanted only Hispanics” and did
not want “anybody else,” Shawn said he would “do what [he could]
to . . . put someone else in that spot,” but noted that Clay was “already
familiar with the kitchen.” Michael and Shawn then sent Clay back
to the Hospital despite Soto’s wishes because they could not find a
“specifically Hispanic” person to fill the spot.
• When Jennings reaffirmed Methodist’s demand for only Hispanic
workers, Shawn told Jennings, “that’s kind of messed up, I mean, for
you to tell me that this is exactly all you’re wanting. I have a lot of
people of all different backgrounds, so if you’re needing someone else
tomorrow . . . .”
• After Jennings indicated that Methodist was terminating
negotiations due to Soto’s displeasure at being sent a non-Hispanic
worker, Linda responded, “That’s a little hard to say out loud
sometimes, isn’t it, Jeff?”
It is true that Shawn and Linda made statements protesting Methodist’s
discriminatory actions. But in the same conversations, both Linda and Shawn
indicated that they would try to accommodate Methodist’s demands. Evidence
that White Glove employees criticized Methodist’s actions and sent Clay to
11
Case: 19-10006 Document: 00515273289 Page: 12 Date Filed: 01/15/2020
No. 19-10006
work in the Hospital, without more, does not create a factual dispute
concerning whether White Glove purposively opposed Methodist’s conduct.
Because no genuine factual dispute exists regarding whether White Glove
engaged in protected activity under Title VII, we affirm the district court’s
grant of summary judgment on White Glove’s § 1981 retaliation claim.
IV. Conclusion
For the foregoing reasons, we REVERSE the district court’s dismissal of
White Glove’s § 1981 racial discrimination claim, AFFIRM the district court’s
grant of summary judgment on White Glove’s § 1981 retaliation claim, and
REMAND the case for proceedings consistent with our opinion.
12