The plaintiff, Deborah Merritt, had been employed by Old Dominion as a Line Haul truck driver.  After some time, Merritt expressed interest in a Pickup and Delivery driver position where she would have a more regular work schedule.  Merritt satisfactorily performed the duties of the Pickup and Delivery position in May 2002 when she filled in for other Pickup and Delivery drivers.  When a position opened up in the Lynchburg, Virginia terminal, Merritt expressed interest in the position to the terminal manager, who told Merritt that he lacked hiring authority.  Nevertheless, the manager later hired a male driver for the position who had less experience than Merritt.  The following year, Merritt again expressed interest in a Pickup and Delivery position when another position became available in Lynchburg.  The manager nevertheless hired a male driver for the position.  When Merritt confronted the manager about why she had not been hired, she was told that a woman could not have that position. 

In 2004, Merritt was finally offered a Pickup and Delivery driver position in Lynchburg subject to a ninety-day probationary period.  For about seven months, Merritt satisfactorily performed the duties of the position, never receiving any complaints from supervisors or customers.  Near the end of September 2004, Merritt injured her ankle on the job.  Merritt was subsequently placed on light duty by her doctor for approximately three months.  Near the end of the three-month period, Brian Stoddard, Vice President of Safety and Personnel for Old Dominion, scheduled Merritt for a fitness test to determine if she was physically able to perform her job duties.  The test was used by the company primarily as part of the pre-employment screening process.  The day after being released by her doctor to return to work, Merritt took the company’s fitness test.  Merritt had trouble with several components of the test, none of which were related to her injury according to Merritt.  Merritt received a failing grade for the test.  Stoddard then terminated Merritt’s employment for “inability to perform job.”  Merritt was then replaced with male drivers.

After her termination, Merritt brought a Title VII sex discrimination suit against Old Dominion, alleging that she was terminated because of the company’s “discriminatory belief that women were incapable of performing the duties of her position.”  Old Dominion countered that Merritt had been terminated after failing the physical ability test.  The district court granted Old Dominion’s motion for summary judgment, finding that Merritt had failed to raise a triable issue of fact with respect to pretext because she had failed to provide any evidence that Stoddard harbored discriminatory animus. 

On appeal, the Fourth Circuit reversed the lower court’s grant of summary judgment, finding that Merritt had put forth sufficient evidence that Old Dominion’s proffered reason for her termination was false.  First, the court found that at the time of her termination, Merritt’s ankle injury had healed.  Second, the court stated that the test used by Old Dominion was a “general, full-body physical fitness test that not designed to test any body part in particular,” and that the parts of the test Merritt had trouble with were unrelated to her injury.  As a result, the court found that there was sufficient evidence from which a jury could conclude that the test was merely a pretext for discrimination.

Next, the court found that Merritt had also produced sufficient evidence of discriminatory intent by showing that Stoddard and Old Dominion had employed the test selectively.  Old Dominion argued that its termination decision was made “pursuant to a uniform and neutrally administered company policy.”  The company alleged that the test was required whenever an injured employee received a conditional release from his or her doctor.  The court found, however, that although the policy was gender-neutral on its face, there was evidence that in practice the policy was not uniformly implemented, or did not exist at all.  The court found significant the fact that employees were not aware of the policy, that the policy was not written down, and that the policy argument was brought up late in the course of litigation. Further, the court pointed out that Stoddard’s decision to give Merritt the test was made before she received a “trial basis” release from her doctor. 

The court went on to say that Merritt had produced sufficient evidence that Stoddard harbored discriminatory intent based on his decision to require Merritt to take the test but not requiring the same of similarly situated male employees.  The court pointed out that while a company is certainly free to employ a testing method to ensure that its employees are capable of performing their job duties, here Merritt had been performing her duties satisfactorily for months before she was injured.  The court explained that its holding was “not about infusing fear and trembling into a company’s every employment decision,” but that the evidence in this case, when looked at as a whole, precluded summary judgment for Old Dominion.  The court emphasized that although McDonnell Douglas is a useful framework for discrimination cases, the ultimate focus should always remain on whether the plaintiff was subject to intentional discrimination.

Contributed by Claudia L. Guzman

Worldwide Network Services, LLC (“WNS”), a minority-owned company, held a subcontract with DynCorp International, LLC (“DynCorp”) for government-related work in Iraq and Afghanistan.  The relationship between WNS and DynCorp began to deteriorate when DynCorp hired new executives for the company.  Shortly thereafter, DynCorp decided not to renew WNS’s contract and stopped payment on work that was already completed.  There was also evidence that DynCorp executives exhibited racial animus towards WNS owners.

WNS brought suit against DynCorp, alleging discrimination under § 1981 as well as tortious interference and breach of contract claims.  After a jury trial, WNS was awarded $3.42 million on the discrimination claim, $83,000 on the tortious interference claim, $1.3 million on the breach of contract claims, and $10 million in punitive damages. 

On appeal to the Fourth Circuit, DynCorp argued that the jury instruction on the discrimination claim and punitive damages was erroneous, and that certain evidence should have been admitted and other evidence excluded.  The court upheld the jury instruction on the discrimination claim, finding it was not an abuse of discretion.  The court also affirmed the district court’s denial of DynCorp’s Rule 50(b) motion on that claim, and upheld the district court’s ruling on the evidentiary issues.

With regard to the punitive damages award, the Fourth Circuit reviewed de novo the district court’s denial of DynCorp’s Rule 50(b) motion on this issue.  The court began its analysis by stating that a punitive damages award under § 1981 requires “evidence that the defendant acted in the face of a perceived risk that [its] decision would violate federal law.”  The court stated that after “combing the record,” it had found no evidence suggesting that DynCorp terminated WNS’s contract with the knowledge that its actions would be in violation of federal law.  Further, the court found that the lower court’s jury instruction on the punitive damages issue was erroneous.  The court stated that the instruction failed to define “malice” or “reckless indifference,” terms which a layperson could not have known pertained to DynCorp’s knowledge that it was violating a federal law.

In 2005, Lespia King, a deputy in the sheriff’s office, sued Sheriff George McMillan in his official capacity for sexual harassment under Title VII, and in his individual capacity for state law battery.  King alleged that McMillan had sexual harassed her during her employment with him.  While the suit was still pending, McMillan lost a reelection to Octavia Johnson, who then replaced him as sheriff.  The district court proceeded to substitute Johnson in her official capacity as the defendant in the Title VII claim.  After a trial, the jury found in favor of King on both counts.

On appeal to the Fourth Circuit, Johnson argued that the district court erred in substituting her as a defendant in her official capacity under Federal Rule of Civil Procedure 25(d)—which provides that an “action does not abate when a public officer who is a party in an official capacity dies, resigns, or otherwise ceases to hold office while the action is pending”—because under Virginia law, once she became sheriff, it was the beginning of an entirely new office.  That is, Johnson argued that each sheriff under Virginia law is a “singular entity” who is “legally independent of predecessors and successors,” and thus she could not be substituted in her official capacity and held liable for her predecessor’s conduct during his term in office. 

The court of appeals rejected Johnson’s argument on the grounds that the Supremacy Clause does not allow state law to override a Title VII claim brought against a state official in his official capacity.  The court stated that if it accepted Johnson’s argument, it would essentially allow states to draft laws in such a way as to limit the liability of state and local officials under federal law.  The court went on to say that “[r]egardless of whether Johnson reads Virginia law correctly with respect to the circumscribed authority of an individual sheriff, Virginia law cannot override Title VII employer liability.”  Nevertheless, the court clarified that Rule 25(d) does not make Johnson personally liable for any misconduct that occurred during McMillan’s term in office; it merely allows the official capacity claim to continue unabated.

The court of appeals also addressed McMillan’s and Johnson’s arguments that the district court erred in admitting the testimony of other employees who alleged they were harassed by McMillan.  The court stated that such evidence is often relevant to a hostile work environment claim, and affirmed the lower court’s ruling that the evidence was relevant as to two elements of King’s hostile work environment claim:  (1) whether the conduct was because of King’s sex; and (2) whether the conduct was sufficiently severe or pervasive.  The court also affirmed the lower court’s ruling that the probative value of the evidence outweighed the risk of unfair prejudice.

Contributed by Claudia L. Guzman

David Stone was employed by Instrumentation Laboratory Company (“ILC”) as a Director of National Accounts.  For a period of six months starting in September 2005, Stone voiced concerns to management about deficient internal controls and unpaid administrative fees by the company.  Stone alleged that he was retaliated against for his complaints and eventually terminated in March 2006.  Stone filed a retaliation claim with the Occupational Safety and Health Administration (“OSHA”) pursuant to the Sarbanes-Oxley Act.  OSHA issued its preliminary findings more than 180 days after Stone had filed his claim.  Stone then objected to those findings and requested a hearing before an Administrative Law Judge (“ALJ”).  ILC filed a motion for summary judgment, which was subsequently granted.  Stone then petitioned the Administrative Review Board (“ARB”) for review of the ALJ’s decision.  Before briefs were due in the ARB appeal, Stone filed a notice seeking dismissal of the appeal in order to file a de novo action in federal court.  Once Stone filed the federal action, ARB dismissed the appeal for lack of jurisdiction.

ILC then filed a motion to dismiss the federal suit, which the district court granted based on principles of collateral estoppel, finding that the ALJ’s decision was a “final judgment on the merits.”  The district court stayed the proceedings and instructed the ARB to rule on the merits of Stone’s claim.  The ARB ultimately dismissed the claim for failure to prosecute and the district court entered a final judgment dismissing the case.  Stone appealed the dismissal of the district court case to the Fourth Circuit.

On appeal, Stone argued that the Sarbanes-Oxley Act’s provision governing whistleblower claims was unambiguous and that he was entitled to a de novo review in federal court because a final decision had not been reached within 180 days of the filing of his complaint.  ILC argued that the district court had the power to apply collateral estoppel to avoid re-litigation.  Applying principles of statutory construction, the Fourth Circuit stated that the Act’s provision governing de novo review was plain and unambiguous.  The court held that a final decision had not been reached within the required 180 days, and that Stone had properly exercised his rights to seek de novo review in district court.  The court stated that in dismissing the federal case, the district court had strayed from the statute’s plain meaning of providing complainants with the opportunity for de novo review, and that courts do not have “free rein” to apply preclusion principles if contrary to Congress’s intent.  The court further found that giving the statute such a literal interpretation did not lead to an “absurd result.”

Contributed by Claudia L. Guzman

Tiffanye Wesley had been a firefighter with the Arlington County Fire Department since 1994.  She applied for the position of Captain but was not promoted even though she had met all of the eligibility requirements and passed the written test.  In her suit against the county, she alleged that she had been discriminated against on the basis of her race and gender.  The district granted the county’s motion for summary judgment, stating that Wesley had not established a prima facie case of discrimination because she had not shown that she was qualified for the position. 

On appeal to the Fourth Circuit, the court found that Wesley had produced sufficient evidence that she was objectively qualified for the promotion.  The court pointed out that Wesley had passed the written test for the promotion on two different occasions, and she had been rated as “more than qualified” by the department.  The county argued that there were several other qualifications that Wesley had to have in order to be “qualified” for purposes of establishing her prima facie case.  The court disagreed and found that Wesley had met the minimum objective criteria for eligibility, and that the other qualifications argued by the county were at least partially duplicative of the requirements for taking the written test.  The court went on to state that Wesley “need not establish that she was the most qualified person for the position, only that she met the job requirements and thus was qualified for the position of Captain.” 

The court further concluded that Wesley had raised genuine issues of fact about whether the department’s reasons for failing to promote her were pretextual.  The court stated that the fact that the department cited certain “marginally relevant” qualifications as being very important while disregarding other seemingly more relevant ones, specifically all of the qualifications that Wesley possessed, raised a genuine question of fact as to what criteria actually went into play in making the promotion decision.  The court held that a reasonable jury could find that the department’s proffered reasons were mere pretext for discrimination.

In a separate dissent, former Chief Judge Wilkinson disagreed, noting that “[b]ecause the record in this case provides no reasonable basis to infer that the Department’s reasons for not promoting Wesley were false, much less that the actual reason was race or sex, her claims must fail.”

On the defendant’s motion to dismiss, the district court had dismissed all of the claims with the exception of the FLSA claim.  After a jury trial, a verdict was rendered in favor of the employer, and the plaintiff appealed.  On appeal, Harman argued that the district court had erred in dismissing her discrimination and retaliation claims. 

The court of appeals began its analysis by stating that the standard for surviving a motion to dismiss is to state a “plausible claim for relief that permits the court to infer more than the mere possibility of misconduct.”  The court found that the district court had properly dismissed Harman’s disparate treatment claims as she had alleged mere conclusory allegations that failed to establish that she suffered an adverse employment action.  The court held, however, that the district court had improperly dismissed the retaliation claims.  Although the court found that the complaint contained “numerous irrelevant allegations”, the court stated that Harman should have been allowed to amend her complaint with regards to the retaliation claims. 

The case is primarily of interest as an example of the court of appeals reversing a 12(b)(6) dismissal based on the Supreme Court’s decision in Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007).  The case was the subject of Congressional hearings in December 2009 as the perception is that recent Supreme Court decisions have made it easier for the courts to dismiss civil rights cases at the pleadings stage.  Workplace Prof Blog has a short post on the hearings here.  Early commentary on the decision in 2007 asked whether the case sounded the “death-knell” for notice pleading in federal court.

Elms discovered that Accenture paid its subcontractor, Avanade, in full while receiving a fifty percent rebate for these payments from the government.  This scheme boosted Accenture profits significantly.  When Elms approached management, they promised to provide an explanation that never came.  As one of the project managers, Elms also complained that several Avanade employees were unqualified for their positions.  His supervisors refused to address these claims because they felt firing these employees would result in a low profit margin.  Elms protested and accused Accenture of “short-changing” the government.  His employment was terminated soon thereafter.

Elms’ second claim arose under the FCA’s ban on retaliation for employees harassed, threatened, or terminated due to a protected activity (31 U.S.C. § 3730 (h)).   Elms’ employment was allegedly terminated “as a result of action taken in the course of investigating a fraud against the United States.”  The court noted that other courts have interpreted the FCA’s protected activities broadly to include filing a qui tam suit and various other actions aimed at determining whether a fraud has been committed that would give rise to a possible FCA suit.  Elms alleged that he took action in furtherance of a qui tam suit, “that his employer knew of these actions, and that he was terminated as a result.”

The FCA’s statutory ban on retaliation provides a cause of action for

[a]ny employee who is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment by his or her employer because of lawful acts done . . . in furtherance of an action under this section, including investigation for, initiation of, testimony for, or assistance in an action filed or to be filed under this section.

31 U.S.C. § 3730(h).

The court affirmed the dismissal of the fraud claim under the FCA, but reversed the dismissal of the retaliation claim.  In the former, plaintiff failed to meet the heightened pleading standard of Rule 9(b), while in the latter, he properly alleged a retaliation claim against his employer under the statute.  The case was remanded to the district court for discovery.

Contributed by K.C. Osuji

In this appeal, Fred Ladd, a civilian water and sewer engineer, was hired by the Research Triangle Institute (RTI) to perform reconstruction services in Iraq following the 2003 U.S. invasion.  RTI contracted with the United States Agency for International Development (USAID).  RTI also subcontracted with Chemonics International Inc., Ladd’s direct employer.  Ladd sued RTI after he suffered serious injuries from a road accident in October 2003.  He alleged RTI failed to supply vehicles for operations in Iraq consistent with those promised during orientation.  Ladd further alleged negligence by the RTI driver and the defective condition of the car.

The district court awarded RTI summary judgment, finding that Ladd was a statutory employee of RTI under the borrowed servant doctrine and holding that his suit was barred under the Defense Base Act, 42 U.S.C. § 1651 (DBA).  On appeal, the Fourth Circuit reviewed the summary judgment de novo.  Ladds argued that the lower court erred in applying the borrowed servant doctrine to conclude that Ladd was a statutory employee of RTI under DBA.

Relying on their precedent in White v. Bethlehem Steel Corp., 222 F.3d 146 (4th Cir. 2000) and Supreme Court precedent in Standard Oil Co. v. Anderson, 212 U.S. 215, 220 (1990), the Fourth Circuit found that Ladd was a borrowed servant, and as such, barred by the DBA.  Therefore, they affirmed the lower court.  Specifically, they reasoned that the DBA applied to injury or death of any employee engaged in any employment under a contract with the U.S., where such contract is performed outside the U.S. 

The borrowed servant doctrine provides immunity from suit to an employee’s general or contract employer, as well as other employers who “borrow” a servant from that employer.  In determining who qualifies as a borrowed servant, the court stressed the importance of ascertaining who the work is performed for, and who has the power to control and direct the servants in the performance of their work.  The Supreme Court precedent highlighted an additional difference between authoritative direction and control versus mere suggestion as to details. 

RTI’s control over Ladd was evident in several ways.  First, he reported directly to RTI’s Chief of Party, who monitored his performance under the terms of his contract.  Second, his salary was subject to RTI approval.  Third, RTI had the power to terminate Ladd’s employment, amend his duties, or transfer him to different parts of Iraq.  Finally, Ladd admitted in his deposition, that on the day of his accident, it was RTI that ordered and arranged the trip.  These factors sufficiently established the authoritative direction and control.  Therefore, as a borrowed servant, “Ladd was a statutory employee of RTI under the LHCWA and the DBA.  Accordingly, the Ladds’ suit is barred by the DBA as a matter of law and we affirm the judgment of the district court.”

Contributed by K.C. Osuji

The facts revealed that Anthony was an excellent warden at Lee Correctional Institution, a maximum security prison, from 1999 until 2004.  He received many favorable reviews and was named Warden of the Year in 2002.  In that same year, defendant Ward became his supervisor.  He did not receive any evaluations from that point onwards.  The defendants’ dislike of plaintiff stemmed from two separate incidents involving Anthony’s input as the warden of Lee.

The first incident involved a hostage situation at Lee in late October 2003.  Laurie Bessinger worked as the Director of Security and Training at SCDC.  Bessinger was passed over for the position of Director of Operations, currently held by Ward.  At once, Bessinger had a bad relationship with Sheppard, his direct supervisor.  Both defendants criticized Bessinger’s handling of the hostage incident and even suggested his termination.  Anthony submitted a draft report to Ward, detailing the events that transpired on the night of the hostage situation.  After reading Anthony’s report, Ward asked Anthony to blackmail Bessinger in the report by adding negative and untrue details.  Anthony refused and his relationship with Ward changed.

The second incident involved Anthony and Sheppard, the co-defendant.  There was a surprise inspection (“shakedown”) of the Kershaw Correctional Institution, where Rickie Harrison (an African-American) was employed as warden.  In Harrison’s eighteen years of experience, this was the only shakedown he experienced without a prior notification.  Sheppard directly participated in the inspection and after interviewing Harrison, recommended his termination.  Following Harrison’s demotion, Sheppard chose to act both as the lead investigator in the Harrison grievance and the lawyer for the SCDC at the grievance hearing.  Sheppard subpoenaed Anthony for testimony at the grievance hearing, but declined to call Anthony as a witness because Anthony believed Harrison was the victim of racial discrimination.

These relationships appeared to factor into an unannounced shakedown of the Lee Correctional Institution, where Anthony worked as warden.  From the early months of 2003 until the shakedown in January 2004, Sheppard employed an investigator who reported directly to him from Lee.  Anthony was not made aware of the nature of the investigator’s duties.  As part of the unannounced shakedown, the boiler room at Lee was inspected. Ward participated directly in the inspection.  Sheppard and Ward classified as contraband, items found in the boiler room, including computer parts, bulk food items, and televisions.  They also noted other “irregularities” including inmates working without supervision, possible access to outside phone lines and the internet, as well as video surveillance of entry and exit from the boiler room.

Anthony inspected the boiler room regularly and was separated from the daily boiler room activities by four levels of supervision below him.  In the past, he was never linked to problems in the boiler room.  Furthermore, memoranda posted on the boiler room walls authorized inmates to work in the room with minimal supervision in circumstances requiring the officer to attend to business outside the room.

A June 2004 letter from his direct supervisor charged Anthony with gross negligence and falsification of documents.  These allegations surfaced in spite of assurances from Ward that Anthony was clear of any wrongdoing.  After pleading his case with Ward, Sheppard, and his supervisor, Anthony was informed that if he had not previously pursued the early retirement option in April 2004, he would have faced outright termination.

These facts led Anthony to file an action with the federal district court of South Carolina alleging that Ward and Sheppard conspired to force him out of his job at Lee.  After trial, the jury returned a verdict in SCDC’s favor on the Title VII discrimination claim and in Anthony’s favor on the civil conspiracy claim.  The jury awarded $510,000 in damages to Anthony and against Ward and Sheppard in their individual capacities.

On appeal to the Fourth Circuit, the court found sufficient evidence was presented for the jury to find that defendants conspired to bring about the forced retirement of Anthony.  The court opinion noted three important facts.  First, Sheppard deviated from Department custom by personally serving as both investigator and lawyer in Harrison’s grievance hearing.  Second, Ward admitted deviating from SCDC policy by failing to inform Anthony of the inspection at Lee and participating directly in it.  Third, SCDC’s Human Resources Director and Warden Harrison each testified that neither had seen a warden terminated for an inspection-related issue, failure to make inspections, or contraband found in an institution (absent the warden’s direct involvement).

These three factors are a stark reminder to employers of the important of following existing policies and applying them consistenly.

Contributed by K.C. Osuji

The case involved the selection of a local director for the Buchanan County Department of Social Services (BCDSS).  Virginia’s system for administering social services differs from that of other states in many regards, particularly by virtue of its more centralized structure and its greater separation from local departments.  The plaintiff’s suit alleged under 42 U.S.C. § 1983 that the defendants conspired to prevent her from being hired as the local director based on her affiliation with the Republican Party. 

In 2006 when the BCDSS local director position became open, the interviewing board evaluated Fields and six other prospective candidates.  After the interview process, Fields received the highest score while another candidate (Judy Holland) received the lowest score.  However, by January of 2007, the Board of Supervisors, the county’s governing body, unanimously voted for a resolution to dissolve the existing administrative and advisory boards, creating in its place a new seven-member administrative board.  This new body, known as the Local Board was comprised of seven individuals chosen by members of the Board of Supervisors from their respective districts.  Soon thereafter, the new Local Board interviewed three candidates, including Fields and Holland.  The Board hired Holland.

After revisiting case law on the issues, the court sided with the plaintiff in finding a violation of her constitutional rights.  Two cases were pertinent in this inquiry: Branti v. Finkel (445 U.S. 507 (1980)) and Stott v. Haworth (916 F.2d 134 (4^th Cir. 1990)).  Branti asserts that “the ultimate inquiry is not whether the label ‘policymaker’ or ‘confidential’ fits a particular position; rather, the question is whether the hiring authority can demonstrate that party affiliation is an appropriate requirement for the effective performance of the public office involved.”  Stott established a two pronged test: (1) the court asks whether the position involved decisionmaking on issues where there is room for political disagreement on goals or their implementation, and (2) if so, then examine the responsibilities of the position to determine whether it resembles that of a policymaker or any office holder whose function is such that party affiliation is an equally appropriate requirement. 

The court was not convinced through its analysis of the facts that BCDSS local directors are policymakers or office holders such that political affiliation is an appropriate measure of effective job performance.  Furthermore, the court found that a) Virginia explicitly designated the local director position as non-partisan (in handbooks and on the application) and b) the duties and responsibilities of a local director do not contain any reference to political party ideologies.

However, to defeat the defendants’ claim of qualified immunity, the court stated that the plaintiff must show that defendants violated clearly established constitutional rights that a reasonable person would have known.  The court referred to the existing law as confusing and conflicting.  Although there is one analogous case, McConnell v. Adams, the court here refrained from imposing monetary liability on the defendants.  The court noted that the Virginia social service system and Branti seek to protect important goals, but qualified immunity also protects essential considerations.  Among other things, it serves the purpose of shielding defendants from retroactive penalties for laws of which they did not have proper notice.

Contributed by K.C. Osuji

The Fourth Circuit reversed the district court’s interpretation that the 90-day period began running from the conclusion of an initial appeal, regardless of whether the employee timely files a motion for reconsideration.  Looking at prior judicial interpretation of the regulation, a notice from EEOC to the plaintiff Phillip Cochran, and Supreme Court precedent, the court reversed the prior decision.  The court held instead that a timely motion for reconsideration delays the running of the 90-day limitation period until the EEOC ruled on the reconsideration motion.

The Fourth Circuit looked back at two amendments of EEOC regulations in 1987 and 1999 affecting the definition of “final” as used in § 2000e-16(c).  In 1987, the definition changed in a few important respects: 1) under 29 C.F.R. § 1614.407(b), an employee was limited to one request for reconsideration, filed within 30 days of the original EEOC decision, and 2) under 29 C.F.R. § 1614.405(b), the EEOC issued an explicit definition of “final” under § 2000e-16(c).  That definition made a decision by the Office of Federal Operations (OFO) final for limitations purposes unless a) either party files a timely motion for reconsideration or b) the Commission on its own reconsiders the case.  In 1999, another amendment to EEOC regulations limited reconsideration of cases involving “a clearly erroneous interpretation of material fact or law” or a “substantial impact” on the agency.  The definition of “final” here stated that a decision issued by the OFO is final unless the Commission reconsiders the case and a “party may request reconsideration within 30 days of receipt of [the decision].”  The EEOC retained this definition.

The court also revisited Supreme Court precedent from Stone v. INS and ICC v. Bhd. Of Locomotive Engineers.  In Locomotive Engineers, the Court held that filing a motion for reconsideration delays the finality of an agency decision under the Hobbs Act.  This decision came regardless of statutory language suggesting that motions for reconsideration do not affect the limitations period for judicial review.  They relied on how similar language in the Administrative Procedure Act (APA) has been construed, such that parties are relieved from the requirement of petitioning for rehearing before seeking judicial review.  In the more recent case, Stone, the Court concluded that the APA’s a “tolling rule,” allowing the timely filing of a motion for reconsideration, renders an underlying agency’s order nonfinal for judicial review purposes.  It is important to note that Stone was especially relevant because the Supreme Court rejected the Government’s anti-tolling argument even with its strong support by regulatory language.  Comparing 8 C.F.R. § 243.1 (1990) with 29 C.F.R. § 1614.405(b) (2008), there’s a clear difference.  The former states: “The agency’s order becomes final upon dismissal of an appeal by the agency,” and the latter, “A decision issued by the EEOC on appeal is final under § 2000e-16 unless the Commission reconsiders the case.”

Finally, the court gave three additional reasons for its interpretation of § 1614.405(b).  These include prior district and appellate court opinions, a notice provided by EEOC to Cochran (similar to that provided to other aggrieved employees), and policy considerations.  From prior opinions, the court highlighted that all six federal appellate courts addressing the question presented here concluded that “a timely motion to reopen or reconsider delays the start of § 2000e-16(c)’s limitations period.”  Next, the notice sent by the EEOC notified Cochran that he had the right to file suit in a district court “within ninety (90) calendar days from the date that you receive this decision.”  Lastly, several policy considerations contribute to the court’s interpretation of § 1614.405(b)-including procedural fairness to parties, judicial efficiency, and maintaining an interpretation consistent with other similar legal contexts (to avoid confusion by litigants).

Contributed by K.C. Osuji

The opening paragraph of the Court’s opinion sums up the factual situation: 

During Bonnie Van Alstyne’s employment with Electronic Scriptorium, Limited (“ESL”), ESL’s President, Edward Leonard, began accessing her personal email account.  Van Alstyne discovered Leonard’s actions, which continued for more than a year after Van Alstyne left ESL, while litigating an unrelated matter with ESL in Virginia State Court. 

Van Alstyne discovered during discovery in a lawsuit brought by ESL against her in Virginia State Court that the owner of ESL had accessed her personal AOL email account after she left the company.  Indeed, he ultimately admitted to accessing her account at all hours of the day, from home and internet cafes, and from locations throughout the world.  During discovery in that case, he produced copies of 258 different emails he had taken from her AOL email account. 

Van Alstyne filed a lawsuit in the United States District Court for the Eastern District of Virginia under the SCA.  After a jury trial, Van Alstyne won an award of $150,000 in compensatory damages and $75,000 in punitive damages against the company owner personally, and $25,000 in compensatory damages in $25,000 in punitive damages from the company.  The District Court also awarded Van Alstyne $124,763.38 in attorney’s fees and $10,960.18 in costs. 

On appeal, the Defendants challenged the award of compensatory damages, which were composed of $1,000 statutory damages for each violation of the SCA.  Applying Supreme Court precedent under the Privacy Act, the court concluded that the SCA requires proof of actual damages as a prerequisite to recovering statutory damages.  Accordingly, the court reversed the award of compensatory damages to Van Alstyne.  The court did conclude, however, that proof of actual damages was not required before an award of either punitive damages or attorney’s fees under the SCA.  Nevertheless, the court remanded those claims to the District Court for reconsideration in light of its rulings. 

Although this case is both entertaining and informative with respect to the SCA, the hidden lesson in this case is the potential consequence of initiating litigation against a former employee.  We have previously commented on the danger of such a strategy here.  In this case, Van Alstyne had filed three claims against the company:  1) a sexual harassment charge with the EEOC; 2) a claim for unemployment benefits; and 3) a claim for unpaid commissions in State Court.  The EEOC claim was dismissed for lack of jurisdiction because ESL employed less than 15 individuals, Van Alstyne non-suited (dismissed) her claim for unpaid commissions, but did recover unemployment benefits.  The company, in turn, began a business tort lawsuit against Van Alstyne in state court.  Ultimately, that decision backfired on ESL because it ended up in bankruptcy and the company and its owner ended up having to defend the SCA litigation brought by Van Alstyne.  A costly proposition indeed.

The plaintiff in this case — who was an unrepresented pro se plaintiff — filed an age discrimination lawsuit against her former employer.  The district court dismissed the complaint because it believed that the plaintiff’s own complaint produced a legitimate nondiscriminatory reason for the defendant’s termination of her employment that rebutted her prima facie case, while failing to demonstrate that the reasons stated in her own complaint were a pretext for discrimination.  The Court of Appeals pointed out that the plaintiff “was not required to plead specific facts establishing a prima facie case of discrimination in her complaint, let alone to plead facts showing that the non-discriminatory reason for termination suggested by her own complaint was pretextual.” 

Although there are significant defects in complaints that will justify dismissal at the initial stage of the case, this decision is a reminder that in federal court a plaintiff is only required to give the defendant fair notice of the nature and grounds upon which a claim rests.  The factual allegations must state a claim to relief that is plausible, not merely speculative.

This case involved a retaliation claim brought under Title VII of the Civil Rights Act of 1964.  Ordinarily, in order to establish a prima facie case of retaliation, a plaintiff must establish (1) that the plaintiff engaged in protected activity, (2) that an adverse employment action was taken against the plaintiff, and (3) that there was a causal link between the protective activity and the adverse employment action.  There are two different categories of protected activity:  opposition activity and participation activity.

Opposition activity includes “utilizing informal grievance procedures as well as staging informal protests and voicing one’s opinions in order to bring attention to an employer’s discriminatory activities.”  Participation activities include making a charge, testifying, assisting, or participating in any manner in investigation, proceeding, or hearing under Title VII.  The opposition activity prong includes a requirement that the plaintiff engaged reasonably in activities opposing discrimination.  The court pointed out, however, that participation activities are protected regardless of whether that activity is reasonable.