McDonnell Douglas Bites the Dust in Tennessee

Yesterday I wrote about Texas' own little corner of the workers' comp world, today it is the Volunteer State's turn to take the spotlight for its unique view of an element of employment law. In Gossett v. Tractor Supply Co. (Tenn. 9/20/10) a sharply divided Supreme Court dumped one of the long time stalwart's of employment discrimination and retaliation, the McDonnell Douglas shifting burden of proof for evaluating a plaintiff's claim.

The Cour rather unceremoniously concluded,

we hold that the McDonnell Douglas framework is inapplicable at the summary judgment stage because it is incompatible with Tennessee summary judgment jurisprudence.

Actually the headline to this post is technically inaccurate, since the Court went on to say

 Furthermore, when applied at the summary judgment stage, the shifting burdens of the McDonnell Douglas framework obfuscate the trial court's summary judgment analysis. The McDonnell Douglas framework "is intended to progressively sharpen the inquiry into the elusive factual question of intentional discrimination" or retaliation. Burdine, 450 U.S. at 254 n.8. Although such inquiry is particularly appropriate at trial, it is ill-suited for the purpose of determining whether "there is no genuine issue as to any material fact."

Most employment law practitioners outside Tennessee state court will be somewhat surprised with that view, since most of the jurisprudence is that once a case actually gets to trial, the McDonnell Douglass framework is particularly inappropriate.

Although it might be found on a closer reading of the opinion, what seems to be missing from the majority's opinion is a basic understanding of what the McDonnell Douglas framework was intended to do. The United States Supreme Court that created it was faced with how does an employee prove intentional discrimination based on a protective category, when it is highly unlikely that employers will admit to such.

One way they concluded was to set up a prima facie case of factors that do not conclusively prove discrimination, but if totally unrebutted, would be sufficient to permit an inference of discrimination to be drawn. They placed the burden of establishing the prima facie case on the plaintiff, allowing them to create an inference of discrimination.  However, when the employer articulates a legitimate business reason that would explain the facts that were used to establish the prima facie case.  When that happens the burden then reverts to plaintiff to show that the real reason for the discrimination was their membership in a protected class.

Now clearly the formulation has gotten a little more complicated and some well known federal judges, most notably Judge Posner of the 7th Circuit, are clearly not fans, but to merely toss it out without even making it clear that they understood how it came to be, seems somewhat odd.

Opening the Door to Facebook: Severe Emotional Distress May be the Key

A well reasoned opinion by Magistrate Judge Debra McVicker Lynch of the Southern District of Indiana dealing with a request for information from what she dubs Social Networking Sites (SNS) should be a starting point for anyone who is seeking (or opposing) information from an employment law plaintiff's facebook or myspace profile. The 13 page decision in EEOC v. Simply Storage Management that was issued on May 11, 2010 is a textbook example of what a good discovery ruling should be.

Regardless of whether you agree or disagree with how she decided, there is no doubting that the Judge understood the dispute, did not seem irritated by it, balanced the defendant's legitimate need for discovery and plaintiff's right to privacy, within the context of a premise of broad discovery and drew limits. Even better, she noted that the limits themselves might need further interpretation and provided some additional guidance.

Here's how the suit started according to the EEOC press release last October.

The discovery dispute arose when defendants requested Facebook and MySpace profiles, plus related communications and photos and videos, of two individuals on whose behalf the EEOC brought the sexual harassment claim.
The heart of the Court's ruling was as follows:

the court determines that the appropriate scope of relevance is any profiles, postings, or messages (including status updates, wall comments, causes joined, groups joined, activity streams, blog entries) and SNS applications for claimants .... for the period from April 23, 2007, through the present that reveal, refer, or relate to any emotion, feeling, or mental state, as well as communications that reveal, refer, or relate to events that could reasonably be expected to produce a significant emotion, feeling, or mental state.

Additionally the Court held that third party communications to the claimants should be produced if "they place these claimants’ own communications in context."

With respect to videos and photographs, the Court applied the same test but gave more direction:

For example, pictures of the claimant taken during the relevant time period and posted on a claimant’s profile will generally be discoverable because the context of the picture and the claimant’s appearance may reveal the claimant’s emotional or mental status. On the other hand, a picture posted on a third party’s profile in which a claimant is merely “tagged,” is less likely to be relevant. In general, a picture or video depicting someone other than the claimant is unlikely to fall within the definition set out above.

A few other points (but you really should read the whole opinion):

• Judge Lynch was quick to emphasize the limits of the Order, "This Order is directed toward two claimants who have alleged severe emotional distress, including post-traumatic stress disorder; it does not address the proper scope of discovery for “garden variety emotional distress claims.”
• Although not explained, in connection with photos and videos the use of the verb "taken" during the applicable time frame stood out, although later the court did refer to "posted" in the context of third party pictures;
• Although noting that the precision was not as precise as the lawyers might like, the Court also added that the EEOC should err on the side of production.
• There was no mention of the additional dimension in this case. Because it was brought by the EEOC, it is possible that the claimants whose information is now being discovered might in fact be unwilling to sacrifice their privacy for the right to keep the suit alive. Given how carefully crafted the opinion is, I have no doubts if that were an issue (or at least if the Court were aware that it was an issue) it would have been addressed.
• It is clear that Judge Lynch is much more comfortable with the internet world than those who currently sit at the top of her chain of command, see Sexting Case Befuddles Supreme Court: 'What's The Difference Between Email And A Pager?' and also
• Unlike some on the Supreme Court she has no qualms about seeking assistance from jurisdictions out of United States as she discusses two Canadian decisions dealing with the same issue.

The case has already received considerable comment. My hat tip for catching it is Jon Hyman's post at The Ohio Employer's Law Blog, but following his hat tip leads to others, including some by non-lawyer bloggers:

• Facebook can be used against you in court, by Robert Iafolla;
• Social Network Discovery and Discovery Regarding Past Employers, by Robert Fitzpatrick which covers the 2nd part of Judge Lynch's ruling about employment records from past employers (basically not automatically discoverable, must show some particular relevance);
• Court Rules Facebook Is Fair Game in Discovery, from the Baker & Daniels law firm; and
• Employers beware: Social network comments can be used in court by Cath Everett writing at the HR Zone.

First Employment Law Test for Justice Steven's Replacement: Figuring Out the Cat's Paw

Assuming that notwithstanding the current posturing, come the first October in 2010 there is a replacement for Justice Stevens, one of their first tests may be helping to define the parameters of the Cat's Paw theory in discrimination cases. An issue that has been lurking around the Supreme Court agenda for awhile. See my earlier post, 5th Circuit Panel Looks At Cat's Paw Theory .

As is almost always the case, the first to bring it to my attention is Ross Runkel at his LawMemo Employment Law Blog, SCOTUS will review "cat's paw" case. The issue in the 7th Circuit case of Staub v. Proctor Hospital(3/25/09):

In what circumstances may an employer be held liable based on the unlawful intent of officials who caused or influenced but did not make the ultimate employment decision?

A couple of quick points. The underlying cause of action is USERRA which is not a statute that often comes under Supreme Court review. Since the Cat's Paw theory is more general in nature, I don't think that means we will necessarily get much insight into how the Supreme Court views USERRA. However, given the group that it protects, one would expect most courts to give it as pro-employee favorable view as any statute.
And one of the frequently mentioned candidates for the Supreme Court position is Judge Diane Wood of the 7th Circuit. She was not on the panel that decided Staub. It would be somewhat ironic if she were appointed and one of her first employment law cases as a Supreme Court Justice was reviewing the handiwork of her generally more conservative former peers.

5th Circuit En Banc Request on Smith v. Xerox, Please!

A three judge panel of the 5th Circuit yesterday divided sharply on a case that poses a number of interesting legal issues of great importance for discrimination and retaliation cases in the 5th Circuit. It cries out for an en banc review. Smith v. Xerox Corp. (5th Cir. 3/24/10) [pdf].

Among the issues decided:

• the Gross analysis is not applicable to Title VII retaliation cases;
• that a case seemingly tried on a pretext basis will support a mixed motive submission, and plaintiff is not forced to concede that there is some valid basis for termination in order to obtain a mixed motive instruction; and
• where there was good evidence of the basis for the termination decision, and no real focus on the subjective intent of the managers making the termination decision, there was insufficient evidence to support a $250,000 punitive damage award.

Although Xerox lost on the first two points, it did prevail on the third in a monetarily big way, so either side could be asking for additional review, or both sides might decide they were better off with their victory. I could certainly see the arguments for each position.

But as a bystander unhampered by any stake in the outcome, I see this as a case where all three are extremely important practical issues,  particularly the second one, where the trial bench and bar really need clear guidance.

Judge Jolly, who dissented from the opinion written by Judge Reavley, joined by Judge Wiener, had the following to say about that issue:

Smith’s entire claim in this case was presented to the jury as pretext. Smith alleged that every reason given by Xerox for her termination was pretext  for age and gender discrimination or, alternatively, pretext for retaliating against her because of her EEOC charge. Smith did not argue or acknowledge that the reasons for her discharge were valid; she argued that the employer’s reasons were pretextual, i.e., false, an illegal sham. And, both with respect to discrimination and retaliation, the jury was instructed accordingly: “If you disbelieve the reason(s) Defendant has given for its decision, [i.e., pretext,] you may infer Defendant terminated Plaintiff because she engaged in protected activity.” In short, if discrimination in an alleged mixed-motive case must be shown by pretext, it is not a mixed-motive case at all, it is a pretext case. It should be that short and simple.

In an important footnote in that paragraph, Judge Jolly noted, "we have long required plaintiffs who ask for a mixed-motive instruction to acknowledge the employer’s legitimate motives for discharge," a requirement now expressly disavowed by the majority.

On the other issue that Judge Jolly took issue with, the applicability of the Gross analysis, he wrote:

The majority disagrees, however, asserting the lame distinction that, although the language is identical, Gross was an age discrimination case under the ADEA and the case today is a retaliation case under Title VII. Given the uniform principle set out in Gross, the majority’s distinction is the equivalent of saying that a principle of negligence law developed in the wreck of a green car does not apply to a subsequent case because the subsequent car is red—a meaningless distinction indeed.

Given the clear divide, and the importance, en banc, please!

Update (4.21.10): En banc review is not going to happen. The most recent entry on the docket sheet is a 4/19 letter to the court transmitting a joint Satisfaction and Release of Judgment filed with the district court on 4/19. That pleading states that Xerox has satisfied the original judgment, less the vacated punitive damages, in the amount of $208,159.03.  Impossible to argue with the business decision, but it is a shame that there is no clarification of the opinion.

Interesting Thought About Electronic Discovery and Arbitration

Stephen Rosenberg, who has a tremendous site, Boston Insurance and ERISA Litigation Blog, has an interesting post on the relationship between the developing law of electronic discovery and how it might actually make arbitration a better forum. Electronic Discovery and the Calculus of Arbitration. It's an interesting argument.

More notable because as a general rule, Rosenberg thinks that arbitration is not as cost effective as it could be and may not be worth the bother, particularly for complex cases. His thesis: if the federal courts don't reign in the cost and expense of e-discovery, getting arbitrators to carve out more narrow (less costly) rules might make it more appealing.

There's no question e-discovery is the "in-thing" now. One aspect that may not be getting enough attention is its scalability — should the same rules apply in a $100 million suit and a $10 million one and a $150,000 one?