Atron Castleberry v. STI Group , 863 F.3d 259 ( 2017 )

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
________________
No. 16-3131
________________
ATRON CASTLEBERRY;
JOHN BROWN,
Appellants
v.
STI GROUP;
CHESAPEAKE ENERGY CORPORATION
________________
Appeal from the United States District Court
for the Middle District of Pennsylvania
(D.C. Civil Action No. 4-15-cv-00153)
District Judge: Honorable Matthew W. Brann
________________
Argued March 28, 2017
Before: AMBRO, VANASKIE,
and RESTREPO, Circuit Judges
(Opinion filed July 14, 2017)
Daniel A. Horowitz, Esquire
Richard S. Swartz (Argued)
Swartz Swidler
1101 Kings Highway North, Suite 402
Cherry Hill, NJ 08034
Counsel for Appellant
Terri I. Patak, Esquire (Argued)
Dickie McCamey & Chilcote
Two PPG Place, Suite 400
Pittsburgh, PA 15222
Daniel T. Brier, Esquire
Donna A. Walsh, Esquire (Argued)
Myers Brier & Kelly
425 Spruce Street, Suite 200
Scranton, PA 18503
Counsel for Appellees
________________
OPINION OF THE COURT
________________
AMBRO, Circuit Judge
Atron Castleberry and John Brown are two African-
American males who were fired by Defendant STI Group, a
staffing-placement agency (and thus a subcontractor) for
Defendant Chesapeake Energy Corporation, an oil and natural
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gas company. Castleberry and Brown brought suit asserting
that their termination was racially motivated, citing to various
examples of discrimination such as remarks made at the
workplace and unfair work treatment. The District Court
dismissed their complaint. Because Plaintiffs state plausible
claims of employment discrimination, we reverse and
remand.
I. BACKGROUND
Castleberry and Brown were hired by STI Group in
March 2010 as general laborers and supervised by managers
from both STI Group and Chesapeake. Shortly after being
assigned to a particular worksite, the only other African-
American male on the crew was fired.
Plaintiffs allege that, when they arrived at work on
several occasions, someone had anonymously written “don’t
be black on the right of way” on the sign-in sheets. They also
assert that although they have significant experience working
on pipelines (and more so than their non-African-American
coworkers), they were only permitted to clean around the
pipelines rather than work on them. They claim that, when
working on a fence-removal project, a supervisor told
Castleberry and his coworkers that if they had “nigger-
rigged” the fence, they would be fired. Seven coworkers
confirmed that occurred. Following this last incident,
Plaintiffs reported the offensive language to a superior and
were fired two weeks later without explanation. They were
rehired shortly thereafter, but then terminated again for “lack
of work.”
Plaintiffs brought suit in District Court against both
STI and Chesapeake alleging harassment, discrimination, and
retaliation in violation of 42 U.S.C. § 1981. As to the
harassment claim, the Court determined it could not survive a
3
motion to dismiss because the facts pled did not support a
finding that the alleged harassment was “pervasive and
regular,” which it deemed a requisite element to state a claim
under § 1981. The Court similarly found that there were not
sufficient facts alleged demonstrating intent to fire Plaintiffs
because of their race or that their termination was racially
motivated. Finally, regarding Plaintiffs’ retaliation claim, it
determined Plaintiffs failed to demonstrate that an objectively
reasonable person would have believed that the comment
made by their supervisor was unlawful—a necessary element
to plead retaliation under § 1981.
II. JURISDICTION AND STANDARD OF REVIEW
28 U.S.C. § 1291 gives us appellate jurisdiction. We
review anew a district court’s dismissal of a complaint under
Federal Rule of Civil Procedure 12(b)(6) for failure to state a
claim. Chavarriaga v. N.J. Dep’t of Corr., 806 F.3d 210, 218
(3d Cir. 2015). When conducting our review, “we must
accept the allegations in the complaint as true, [but] are not
compelled to accept unsupported conclusions and
unwarranted inferences, or a legal conclusion couched as a
factual allegation.” Morrow v. Balaski, 719 F.3d 160, 165
(3d Cir. 2013) (en banc) (quotation omitted). The allegations
must have “facial plausibility,” meaning that “the plaintiff
pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(citation omitted).
III. ANALYSIS
Plaintiffs challenge the District Court’s dismissal of
their claims under § 1981, which provides
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All persons within the jurisdiction of the United
States shall have the same right in every State
and Territory to make and enforce contracts . . .
to the full and equal benefit of all laws . . . as is
enjoyed by white citizens . . . .
In employment discrimination cases, these claims are subject
to the same analysis as discrimination claims under Title VII
of the Civil Rights Act of 1964. Brown v. J. Kaz, Inc., 581
F.3d 175, 181-82 (3d Cir. 2009). Accordingly, a court
reviews them under the burden-shifting framework outlined
in McDonnell Douglas Corp. v Green, 411 U.S. 792 (1973).
Brown, 581 F.3d at 182. Under that framework, a plaintiff
first must establish the requisite elements of his claim (called
the prima facie elements); if so, the “burden then must shift to
the employer to articulate some legitimate, nondiscriminatory
reason” for the adverse employment action, and then the
plaintiff bears the burden of establishing that the employer’s
stated reason for the adverse action was an excuse, or pretext,
for why the action was actually taken. McDonnell Douglas,
411 U.S. at 802-04. Using this approach, each claim is
reviewed in turn.
A. Harassment
Plaintiffs’ harassment claim under § 1981 alleges a
hostile work environment on the basis of race. To win, a
plaintiff must show that “1) the employee suffered intentional
discrimination because of his/her [race], 2) the discrimination
was severe or pervasive, 3) the discrimination detrimentally
affected the plaintiff, 4) the discrimination would
detrimentally affect a reasonable person in like
circumstances, and 5) the existence of respondeat superior
liability [meaning the employer is responsible].” Mandel v.
M & Q Packaging Corp., 706 F.3d 157, 167 (3d Cir. 2013)
(citation omitted). Plaintiffs assert that the District Court
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applied the wrong legal standard in dismissing this claim
when it required them to plead discrimination that was
“pervasive and regular.” See J.A. at 13 (emphasis added)
(citing Ocasio v. Lehigh Valley Family Health Ctr., 92 F.
App’x 876, 879 (3d Cir. 2004)). Instead, they only were
required to plead that they were subjected to a hostile work
environment in which there was discrimination that was
“severe or pervasive.” See Jensen v. Potter, 435 F.3d 444,
449 (3d Cir. 2006) (emphasis added).
Plaintiffs are correct even though our precedent is
inconsistent. We have held that, to prevail on a harassment or
hostile work environment claim, the plaintiff “must establish
that . . . the discrimination was severe or pervasive.” Mandel,
706 F.3d at 167 (3d Cir. 2013) (citation omitted); see Moore
v. City of Phila., 461 F.3d 331, 341 (3d Cir. 2006); Jensen,
435 F.3d at 449; see also Miller v. Thomas Jefferson Univ.
Hosp., 565 F. App’x 88, 93 n.6 (3d Cir. 2014) (quotation
omitted); Brooks v. CBS Radio, Inc., 342 F. App’x 771, 775
(3d Cir. 2009); Hamera v. Cnty. of Berks, 248 F. App’x 422,
424 (3d Cir. 2007) (quotation omitted).
We have also held that a plaintiff making such a claim
must establish that the discrimination is “pervasive and
regular.” Andreoli v. Gates, 482 F.3d 641, 643 (3d Cir. 2007)
(quotation omitted); Cardenas v. Massey, 269 F.3d 251, 260
(3d Cir. 2001); see also Ullrich v. U.S. Sec’y of Veteran
Affairs, 457 F. App’x 132, 140 (3d Cir. 2012) (quotation
omitted); Ocasio, 92 F. App’x at 879 (quotation omitted).
To make matters even more confusing, we have also
determined that the correct standard to apply is “severe and
pervasive.” Hare v. Potter, 220 F. App’x 120, 131-32 (3d
Cir. 2007). And if that were not enough, we have held that
the correct standard to apply is “pervasive and regular” but
then applied the “severe or pervasive” standard within the
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same opinion. Weston v. Pennsylvania, 251 F.3d 420, 426
(3d Cir. 2001).
Thus we clarify. The correct standard is “severe or
pervasive.” The Supreme Court has articulated as much on
several occasions. See, e.g., Pa. State Police v. Suders, 542
U.S. 129, 133 (2004); Harris v. Forklift Sys., Inc., 510 U.S.
17, 22 (1993). We have noted that “[t]he difference [between
the two standards] is meaningful” because “isolated incidents
(unless extremely serious) will not amount to [harassment].”
Jensen, 435 F.3d at 449 n.3 (quoting Faragher v. City of Boca
Raton, 524 U.S. 775, 788 (1998)). Indeed, the distinction
“means that ‘severity’ and ‘pervasiveness’ are alternative
possibilities: some harassment may be severe enough to
contaminate an environment even if not pervasive; other, less
objectionable, conduct will contaminate the workplace only if
it is pervasive.” Id. (quoting 2 Charles A. Sullivan, Michael
J. Zimmer & Rebecca Hanner White, Employment
Discrimination Law and Practice 455 (3d ed. 2002)).
Whether an environment is hostile requires looking at the
totality of the circumstances, including: “the frequency of the
discriminatory conduct; its severity; whether it is physically
threatening or humiliating, or a mere offensive utterance; and
whether it unreasonably interferes with an employee’s work
performance.” Harris, 510 U.S. at 23.
Under the correct “severe or pervasive” standard, the
parties dispute whether the supervisor’s single use of the “n-
word” is adequately “severe” and if one isolated incident is
sufficient to state a claim under that standard. Although the
resolution of that question is context-specific, it is clear that
one such instance can suffice to state a claim. See Faragher,
524 U.S. at 788 (“isolated incidents” will amount to
harassment if “extremely serious”) (quotations omitted); see
also Clark Cnty. Sch. Dist. v. Breeden, 532 U.S. 268, 270
(2001) (per curium) (quotations omitted) (same); Jensen, 435
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F.3d at 449 n.3 (same). However, a plaintiff must plead the
incident to “be extreme to amount to a change in the terms
and conditions of employment” for it to serve as the basis of a
harassment claim. Faragher, 524 U.S. at 788.
Defendants argue that there is no case in which our
Court has held a single isolated incident to constitute a hostile
work environment. But they miss the point. The Supreme
Court’s decision to adopt the “severe or pervasive”
standard—thereby abandoning a “regular” requirement—
lends support that an isolated incident of discrimination (if
severe) can suffice to state a claim for harassment. See
Suders, 542 U.S. at 133. Otherwise, why create a disjunctive
standard where alleged “severe” conduct—even if not at all
“pervasive”—can establish a plaintiff’s harassment claim?
Defendants would have us read that alternative element out of
the standard. We may not do so.
Indeed, other Circuits have similarly held that an
extreme isolated act of discrimination can create a hostile
work environment. See, e.g., Boyer-Liberto v. Fontainbleau
Corp., 786 F.3d 264, 268 (4th Cir. 2015) (en banc) (“[W]e
underscore the Supreme Court’s pronouncement in Faragher
. . ., that an isolated incident of harassment, if extremely
serious, can create a hostile work environment.”); Rodgers v.
Western-Southern Life Ins. Co., 12 F.3d 668, 675 (7th Cir.
1993) (“Perhaps no single act can more quickly alter the
conditions of employment and create an abusive working
environment than the use of an unambiguously racial epithet
such as [the “n-word”] by a supervisor in the presence of his
subordinates . . . [that] impacts the work environment []
severely . . . .”) (quotation omitted); Adams v. Austal, U.S.A.,
LLC, 754 F.3d 1240, 1254 (11th Cir. 2014) (although a
racially offensive carving on a workplace wall “was an
isolated act, it was severe” enough that a “reasonable jury
could find that [plaintiff’s] work environment was objectively
hostile”); Ayissi-Etoh v. Fannie Mae, 712 F.3d 572, 577 (D.C.
8
Cir. 2013) (“This single incident [of using the “n-word”]
might well have been sufficient to establish a hostile work
environment.”).
We are unpersuaded by Defendants’ attempts to
analogize this case to others in which an isolated incident was
insufficient to establish a hostile work environment. The
facts of those cases are unhelpful. For example, Defendants
point us to Breeden, where two men and one woman met to
review applications for a job opening. The woman read aloud
a sexually explicit comment contained in one application and
the two men “chuckled.” 532 U.S. at 269. The Court
determined that because the “ordinary terms and conditions of
[the woman’s] job required her to review the sexually explicit
statement in the course of screening” job applications and that
she “conceded that it did not bother or upset her to read the
statement in the file,” the isolated incident was not so severe
as to constitute harassment. Id. at 271 (quotations omitted).
Likewise, Defendants’ attempted comparisons to
nonbinding district court and unpublished Third Circuit
opinions are of no help either. See, e.g., King v. City of
Phila., 66 F. App’x 300, 303 (3d Cir. 2003) (although a fired
police officer was called the “n-word,” and for that reason we
did in fact determine he “had established a prima facie case,”
defendants carried their burden under the McDonnell-
Douglas framework of providing evidence of legitimate, non-
discriminatory reasons for his termination); Miller, 565 F.
App’x 88 (did not deal with an isolated incident); Al-Salem v.
Bucks Cnty. Water & Sewer Auth., Civ. A. No. 97-6843, 1999
WL 167729 (E.D. Pa. Mar. 25, 1999) (employee who
resigned to accept a higher paying job was called the “n-
word” but there was no evidence on the record that he was
detrimentally affected).
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Here Plaintiffs alleged that their supervisor used a
racially charged slur in front of them and their non-African-
American coworkers. Within the same breath, the use of this
word was accompanied by threats of termination (which
ultimately occurred). This constitutes severe conduct that
could create a hostile work environment. Moreover, the
allegations could satisfy the “pervasive” alternative
established by the standard. Plaintiffs alleged that not only
did their supervisor make the derogatory comment, but “on
several occasions” their sign-in sheets bore racially
discriminatory comments and that they were required to do
menial tasks while their white colleagues (who were less
experienced) were instructed to perform more complex work.
Whether these allegations are true and whether they amount
to “pervasiveness” are questions to be answered after
discovery (for example, after determining how many times
racial remarks were scribbled on the sign-in sheets).
Plaintiffs have pled a plausible claim of a hostile work
environment under either theory—that the harassment was
“severe” or “pervasive.”
But most importantly, what Defendants and the
District Court ignore is that in every case they cite the claim
was resolved at summary judgment. Under the McDonnell-
Douglas framework, a claim of employment discrimination
necessarily survives a motion to dismiss so long as the
requisite prima facie elements have been established. That is
so because “it may be difficult” for a plaintiff to prove
discrimination “[b]efore discovery has unearthed relevant
facts and evidence.” Swierkiewicz v. Sorema N.A., 534 U.S.
506, 512 (2002). Here, Plaintiffs have established those
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elements, and thus their claims should not have been
dismissed at this early stage of the litigation.1
B. Disparate Treatment Discrimination
Plaintiffs allege that they were the only black males
assigned to their specific site, they were assigned undesirable
duties, they were the targets of racial epithets, and they were
fired twice due to their race. They believe these allegations
amount to evidence of discrimination under a theory of
disparate treatment. To establish a discrimination claim
under § 1981, “a plaintiff must show (1) that he belongs to a
racial minority; (2) an intent to discriminate on the basis of
race by the defendant; and (3) discrimination concerning one
or more of the activities enumerated in § 1981.” Estate of
Oliva ex rel. McHugh v. New Jersey, 604 F.3d 788, 797 (3d
Cir. 2010) (quotations omitted). Given the allegations noted,
Plaintiffs’ second amended complaint satisfies each of these
elements in stating a § 1981 discrimination claim. See J.A. at
39-40.
The District Court surmised that “absent additional
factual allegations, there may be perfectly neutral,
1
Chesapeake also asserts that Plaintiffs’ harassment
claim should be dismissed because they have not
demonstrated the fifth element (respondeat superior liability)
as to it. “An employer is subject to vicarious liability to a
victimized employee for an actionable hostile work
environment created by a supervisor with immediate (or
successively higher) authority over the employee.” Faragher,
524 U.S. at 807. This argument fails because the supervisor
who used the racial slur accompanied by threats of
termination was a Chesapeake employee.
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nondiscriminatory reasons” for Plaintiffs’ adverse
employment actions, and accordingly dismissed this claim.
J.A. at 18. Whether true or not, Defendants did not provide
the Court with any of those potential reasons. That was their
burden to carry. And, even had they done so, Plaintiffs still
would have been afforded the opportunity to rebut the stated
reasons as pretextual following discovery. The District Court
therefore was incorrect in dismissing this claim, thereby
jettisoning the McDonnell Douglas burden-shifting
framework.
C. Retaliation
Plaintiffs appeal the dismissal of their retaliation
claim, which alleges that they were fired for reporting the
racially discriminatory remark made by their supervisor. To
establish a retaliation claim in violation of § 1981, a plaintiff
must establish the following prima facie case: “(1) [he]
engaged in [protected] activity . . .; (2) the employer took an
adverse employment action against [him]; and (3) there was a
causal connection between [his] participation in the protected
activity and the adverse employment action.” Moore, 461
F.3d at 340-41 (quotation omitted). “In a retaliation case a
plaintiff must demonstrate that there had been an underlying
section 1981 violation.” Estate of Oliva, 604 F.3d at 798
(citation omitted). In doing so, the plaintiff “must have acted
under a good faith, reasonable belief that a violation existed.”
Daniels v. Sch. Dist. of Phila., 776 F.3d 181, 193 (3d Cir.
2015) (quotations omitted).
Here the District Court dismissed this claim because it
was unreasonable for Plaintiffs to believe that a single
incident of a discriminatory remark (which was the only
incident they reported in their complaint to Defendants) could
amount to unlawful activity. J.A. at 20 (citing Breeden, 532
U.S. at 271). However, this reasoning rests on the Court’s
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finding that an isolated discriminatory remark cannot amount
to a violation of § 1981 by incorrectly applying the
“pervasive and regular” standard. As discussed above, a
single incident can amount to unlawful activity, particularly
when applying the correct standard. Accordingly, the case
should be remanded on this claim so that it may proceed to
discovery.
D. Disparate Impact Discrimination
In their Second Amended Complaint Plaintiffs also
alleged discrimination on a theory of disparate impact. In
addition to the allegations made in their disparate treatment
claim, they allege that after they were fired there were no
remaining African-American male employees at their work
site, and thus Defendants intentionally implemented policies
to prevent African-American males from working there by
assigning them undesirable work tasks.
Although the District Court failed to address this
claim, not doing so is irrelevant because a claim of disparate
impact is unavailable under § 1981. The Supreme Court has
rejected “that a violation of § 1981 could be made out by
proof of disparate impact . . . .” Gen. Bldg. Contractors
Ass’n, Inc. v. Pennsylvania, 458 U.S. 375, 383 n.8 (1982). In
discussing the history of the statute and distinguishing it from
Title VII, the Court explained that § 1981 was enacted to
prevent purposeful discrimination and “did not include
practices that were neutral on their face . . . but that had the
incidental effect of disadvantaging blacks to a greater degree
than whites.” Id. at 388 (quotation omitted). Following that
guidance, we held that Ҥ 1981 provide[s] a private cause of
action for intentional discrimination only.” Pryor v. Nat’l
Collegiate Athletic Assoc., 288 F.3d 548, 562 (3d Cir. 2002).
Indeed, when comparing the two theories of discrimination
brought under both Title VII and § 1981, we have explained
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that a theory of “disparate impact” is brought “under Title VII
alone” while a theory of “disparate treatment” can be brought
under § 1981 as well. Wilmore v. City of Wilmington, 699
F.2d 667, 669-70 (3d Cir. 1983). Moreover, a theory of
disparate impact is not supported by Plaintiffs’ allegations,
which is that there is a policy that only African-American
males will be assigned undesirable work, and only they will
be fired if they complain about discrimination. Those alleged
policies are not facially neutral. Accordingly, we will not
remand as to this claim.
* * * * *
Plaintiffs have sufficiently alleged claims of
harassment, disparate treatment discrimination, and retaliation
under § 1981 to carry them over the motion-to-dismiss
hurdle. We reverse and remand so that the McDonnell
Douglas burden-shifting framework can be applied as the
case proceeds through discovery.
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