Thursday, May 19, 2011

Tenth Circuit follows Gardner-Denver, finding that 14 Penn Plaza does not trump the plaintiff.

In Mathews v Denver Newspaper Agency LLP, No. 09-1233 (May 17, 2011 10th Cir.), a panel of the Tenth Circuit issued its revised opinion. Its earlier opinion of March 16, 2011 is found at 2011 U.S. App. LEXIS 5142. Judge Murphy, writing for the panel, concludes that plaintiff's statutory employment discrimination and retaliation claims maybe litigated despite a prior ruling by an arbiter on plaintiff’s contractual claims which were coterminous with his statutory claims.

The collective bargaining agreement provides as follows:

The Employer and the Union acknowledge continuation of their policies of no discrimination against employees and applicants on the basis of age, sex, race, religious beliefs, color, national origin or disability in accordance with and as required by applicable state and federal laws.

Plaintiff was demoted and grieved the demotion. Apparently, the initial grievance referenced state and federal discrimination and retaliation laws. That initial grievance was amended to remove any reference to said statutes, and the question of discrimination was stated, by agreement of the parties, to the arbiter as follows: “[D]id GRIEVANT’S demotion violate contractual provisions prohibiting discrimination?” The arbiter ruled against Mathews and, thereafter, Mathews sued under Title VII among other statutes. The district court found that the arbiter’s decision was preclusive, relying on the Supreme Court’s decision in 14 Penn Plaza LLC v. Pyette, 129 S. Ct. 1456 (2009). The district court’s ruling can be found at 2009 U.S. Dist. LEXIS 37697 (D. Colo. May 4, 2009). The soTenth Circuit reversed, holding the fact that “Mathew’s contractual rights and statutory rights were coterminous is of no moment: As the Supreme Court has recently reaffirmed, ‘[b]ecause the collective-bargaining agreement gave the arbitrator “authority to resolve only questions of contractual rights,” his decision could not prevent the employee from brining the Initial Title VII claim in federal court “regardless of whether certain contractual rights are similar to, or duplicative of, the substantive rights secured by Title VII.” Fourteen Penn Plaza, 129 S.Ct. at 1467 (emphasis added) (quoting Alexander v. Gardner-Denver Co., 415 U.S. 36 (1974)).”

The Tenth Circuit panel went on to affirm summary judgment on plaintiff’s discriminatory demotion claim, finding that plaintiff was judicially estopped from being able to establish his qualifications for the position in question. The court, applying Cleveland v. Policy Mgmt. Sys. Corp., 526 U.S. (1999), found that plaintiff’s unequivocal testimony in a SSA disability milieu that he was totally disabled was “a paradigmatic case for judicial estoppel.” For a different take on this issue, see Solomon v. Vilsack, 628 F.3d 555 (D.C. Cir. 2010).

In contrast, the court denied summary judgment on plaintiff’s retaliatory demotion claim, refusing to adopt the “strong evidence” standard articulated by the Second Circuit in Collins v. N.Y. City Transit Authority, 305 F.3d 113, 119 (2d Cir 2002) wherein that court held that for a plaintiff to survive a motion for summary judgment following an adverse decision from an arbiter, the plaintiff “must present strong evidence that the decision was wrong as a matter of fact - e.g. new evidence not before the tribunal – or that the impartiality of the proceeding was somehow compromised.” Instead of adopting the Second Circuit’s “strong evidence” standard, the Tenth Circuit rejected such a per se standard for a case-by-case evaluation, including an evaluation of the “degree of procedural fairness in the arbitral forum, adequacy of the record with respect to the issue of discrimination, and the special competence of particular arbitrators.” Barrentine v. Arkansas-Best Freight Sys, Inc., 450 U.S. 728, 743 n.22 (1981) (quoting Gardner-Denver 450 U.S. at 60 n.21).

The petition for rehearing filed by defendant Denver Newspaper Agency LLP was directed at the ongoing debate regarding the elements of a prima facie case of retaliation. The Tenth Circuit followed the three-part showing required by Timmerman v. U.S. Bank, 483 F.3d 106, 1122-23 (10th Cir. 2007) which requires a showing that (1) plaintiff engaged in protected activity; (2) plaintiff suffered an adverse employment action;* (3) there is a causal connection between the protected activity and the adverse action. The debate on rehearing was whether in a retaliation case, the Tenth Circuit panel would reject Timmerman and adopt a standard that some circuits have used which requires, in addition to the three elements above, that plaintiffs demonstrate that they are “qualified for the position at issue, or, if already employed, [had] met the employer’s legitimate work expectations.” Volosek v. Wis. Dep’t of Agric., Trade & Consumer Prot., 344 F.3d 680, 692 (7th Cir. 2003). See also contrasting decisions on this question from the Fifth Circuit: Holtzclaw v. DSC Commc’ns Corp., 255 F.3d 254, 259-60 (5th Cir. 2001) (finding that qualification for the job is an element of a prima facie case of ADEA retaliation); EEOC v. Dunbar Diagnostic Servs., Inc., 92 F. App’x 83, 84-85 (5th Cir. 2004) (refusing to require plaintiff to demonstrate qualification for the position as part of prima facie case in a wrongful discharge case), the appellee’s petitioned panel for rehearing and appellant’s response to same contain citations to and discussion of all of the many court decisions that have addressed this cutting edge debate.

Judge Murphy, who wrote for the panel, was joined by Judges McKay and O’Brien.
For more discussion on this topic, see Garland’s Digest, Paul Mollica’s Daily Developments in EEO Law, Nelson Cary’s post at Vorys on Labor, and Richard Renner at the Whistleblowers Protection Blog. For a discussion of the District Court’s ruling see the Workplace Prof Blog.

*While the court described Timmerman as requiring an “adverse employment action,” undoubtedly the court merely used the incorrect phraseology, and would require adherence to the Supreme Court’s holding in Burlington Northern & Santa Fe Ry. v. White, 548 U.S. 53 (U.S. 2006) where the court requires in a retaliation case, not an adverse action, but rather “a materially adverse action.” In Shaw v. Tulsa Dynaspan Arrow Concrete, 2001 WL 263205 at *4 (10th Cir. Jan. 28, 2001), the Tenth Circuit held that the prima facie case of retaliation requires a showing that a reasonable employee would have found the challenged action materially adverse, quoting Haynes v. Level 3 Communications, LLC, 456 F.3d 1215, 1228 (10th Cir. 2006).

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Monday, May 16, 2011

Do Twombly and Iqbal Apply to Affirmative Defenses?

This blog visited this issue back on July 21, 2010. Recently, Judge Cacheris of the Eastern District of Virginia issued a thoughtful opinion on this issue, diverging from the unanimous view of all other reported district court decisions within the Fourth Circuit, holding that Twombly and Iqbal do not apply to affirmative defenses. In Lopez v. Asmar’s Mediterranean Food, Inc., 2011 U.S. Dist. LEXIS 2265 (E.D. Va. Jan. 10, 2011) Judge Cacheris, predicated his decision on a reading of the Civil Rule at issue. The Judge notes that Twombly and Iqbal are predicated on the Supreme Court’s construction of Civil Rule 8(a)(2); whereas the rule governing affirmative defenses is contained in Civil Rule (8)(b)(1)(A), the language of which is significantly different than the language of 8(a)(2). Civil Rule 8(a)(2) requires that “claims for relief,” including complaints, contain

a short and plain statement of the claim showing that the pleader is entitled to relief.

(emphasis added). In contrast, Civil Rule 8(b)(1)(A) governing civil defenses requires that a responding party

state in short but plain terms its defenses to each claim asserted against it.

As Judge Cacheris notes, Civil Rule 8(b)(1)(A) omits the language requiring a “showing that the pleader is entitled to relief.” The absence of that language led the court in Lopez to conclude that Twombly and Iqbal’s reasoning does not and ought not apply to affirmative defenses. The Court notes that, of course, the plaintiff can explore whatever factual detail supports the affirmative defenses by propounding interrogatories, for example.

In a footnote, the court notes that the Lopez opinion will be the decidedly minority view amongst the district judges in the Fourth Circuit who have addressed this issue. See e.g., Racic v. Dominion Law Assocs., --- F.R.D. ---, 2010 WL 3928702 (E.D.N.C. Oct. 6, 2010); Francisco v. Verizon South, Inc., No. 3:09cv737, 2010 WL 2990159, 2010 U.S. Dist. LEXIS 77083, at *7-8 (E.D. Va. July 29, 2010)(collecting cases); Bradshaw v. Hilco Receivables, LLC, 725 F. Supp. 2d 532, at *3 (D. Md. July 27, 2010); Palmer v. Oakland Farms, Inc., No. 5:10cv00029, 2010 WL 2605179, 2010 U.S. Dist. LEXIS 63265, at *5 (W.D. Va. June 24, 2010). In a follow-on footnote, Judge Cacheris notes that a number of other district judges, outside of the Fourth Circuit, have reached the same conclusion that he does. See e.g., Ameristar Fence Prods., Inc. v. Phoenix Fence Co., No. CV-10-299, 2010 WL 2803907, at *1 (D. Ariz. July 15, 2010); McLemore v. Regions Bank, No. 3:08cv0021, 2010 WL 1010092, at *13 (M.D. Tenn. Mar. 18, 2010); Holdbrook v. SAIA Motor Freight Line, LLC, No. 09-cv-02870, 2010 WL 865380, 2010 U.S. Dist. LEXIS 29377, at *2 (D. Colo. Mar. 8, 2010); Charleswell v. Chase Manhattan Bank, N.A., No. 01-119, 2009 WL 4981730, 2009 U.S. Dist. LEXIS 116358, at *4 (D.V.I. Dec. 8, 2009); Romantine v. CH2M Hill Eng'rs, Inc., No. 09-973, 2009 WL 3417469, 2009 U.S. Dist. LEXIS 98699, at *1 (W.D. Pa. Oct. 23, 2009); First Nat'l Ins. Co. of Am. v. Camps Servs., Ltd., No. 08-cv-12805, 2009 WL 22861, 2009 U.S. Dist. LEXIS 149, at *2 (E.D. Mich. Jan. 5, 2009).

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