Sixth Circuit Affirms City's Judgment But Reversed Union's Judgment in Case Alleging Discriminatory Layoffs

This week there have already been three interesting decisions.  In one, the Sixth Circuit absolved a City of discrimination for accommodating a union demand to layoff one group of employees over another, but pulled the union back into the litigation for potential discrimination liability for making that demand in the first place.   Peeples v. City of Detroit, No. 17-222 (6^th Cir. 2018). The Court refused to let plaintiffs alleging race discrimination “piggyback” on the only timely EEOC Charge which resulted in a right-to-sue letter when that charge alleged only national origin discrimination.  It also refused to find statements made by a city employee about the union’s purported motivation as direct evidence.  It also found no circumstantial evidence of discrimination based only on statistics which did not attempt to show significant deviations from non-discriminatory factors, like seniority, and which were based on small sample size.  The Court, however, found that the plaintiffs did not need to show that the union breached its duty of fair representation in order to sue the union under Title VII.

According to the Court’s opinion, the City of Detroit instituted layoffs in advance of filing for bankruptcy protection.  It announced the layoff list based on city-wide seniority, but the fire department union objected on the grounds that it should be based on department seniority and filed a grievance. The City ultimately resolved the grievance by granting the union’s request.   The distinction resulted in the layoff of more minority officers under the union’s proposal than the City’s plan.  After four EEOC Charges followed, the fire union relented and agreed to the City’s initial plan.  The City ended up re-hiring the affected employees 80 days later and giving them full back pay, missed overtime pay and medical benefits.  Nonetheless, even though only one of the plaintiffs had obtained a right-to-sue letter from the EEOC, eleven of the affected minority employees brought suit against the City and the Union, seeking compensatory and punitive damages.

The Court addressed whether all of the plaintiffs could piggy back onto the one plaintiff’s right-to-sue letter.  Sadly for the plaintiffs, they did not raise any arguments to rebut the failure-to-exhaust remedies argument raised in the City’s summary judgment motion and, thus, were limited in what could be argued on appeal.   The only plaintiff to obtain a right-to-sue letter asserted only a national origin discrimination claim and the remaining plaintiffs were asserting racial discrimination.  The Court found that they were not substantially related claims, and thus the race claims could not piggyback onto an EEOC Charge asserting only national origin discrimination.

The Court also rejected the plaintiff’s claim of direct evidence of discrimination.  One of the plaintiffs testified in deposition that he heard a City employee state that he concluded the union was trying to protect the “white boys” from layoff.    This was not direct evidence of discrimination because it was a city employee explaining the union’s motivation and required an inference that the City endorsed that motive.  It also likely hearsay, but the Court did not ultimately resolve that issue.  

The Court also rejected the plaintiffs’ statistical evidence, which was pretty much all that they had to show that they were selected for the layoff on account of their race (in that they were not replaced).  First, they failed to organize their statistics in any meaningful way before the trial court.  Second, the fact that the percentage of white layoffs fell and of minority layoffs rose significantly under the union plan did not, by itself, show impermissible bias.  To prove an inference of bias, “the statistics must show a significant disparity and eliminate the most common nondiscriminatory explanations for the disparity.”  For instance, one could use three standard deviations from hypothetical random chance.   The plaintiffs made no effort to account for seniority differences, for instance.  The City also argued about the sample size (only 27 people) and the other cost-cutting efforts made, including demotions, reductions in overtime and rescinded promotions.   The plaintiffs also made no effort to show the racial composition of the fire department before and after the layoff. “Unless the statistics, standing alone or in comparison, are sufficient to lead the mind naturally to the conclusion sought, they have no probative value; they do not move the proof one way or another.”

The Court also rejected the plaintiff’s damage claim in that they had already received full back pay with the resolution of their grievances. The plaintiffs failed to introduce any evidence disputing that they had already received full back pay.  The union pointed out that they never raised breach of settlement agreement claims based on the resolution of their grievances when they were reinstated.  Accordingly, while they might have some compensatory and punitive damages available under Title VII, their claims for backpay were rejected by the trial and appellate courts.

Finally, the Court rejected the union’s argument that Title VII claims were subject to the same burden of proof as fair representation claims under labor-relations laws, meaning that the plaintiffs need not show that the union breached its duty of fair representation before it could sue them for discrimination under Title VII. Because the union had prevailed on that issue before the trial court, the Sixth Circuit reversed the union’s summary judgment.  

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can be changed or amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Sixth Circuit Affirms Dismissal of Defamation and Hybrid §301/Fair Representation Claims Against Chillicothe Employer

On Friday, the Sixth Circuit Court of Appeals affirmed a summary judgment entered in favor of a Chillicothe employer on defamation and hybrid §301/fair representation claims brought by a terminated union employee. Blesedell v. Chillicothe Telephone Co., No. 15-354 (6^th Cir. 1-22-16).   In that case, the plaintiff had been terminated after an investigation revealed potential misconduct and then an attempted cover-up by the employee (as well as additional allegations).  His union ultimately decided not to pursue arbitration of the decision after its own investigation.  The plaintiff challenged the termination and also alleged defamation based on what the Human Resources Manager allegedly told the union and the sheriff’s office.  The trial court granted summary judgment because the union did not breach its duty of fair representation and because the statements made by the HR Manager could not be proven to be false and/or were protected by a qualified privilege.   Although the employee provided the union with written statements from witnesses (who were not interviewed by the union) and was prevented from attending grievance meetings, he could not show unfair representation by the union.    The Court of Appeals affirmed.

According to the Court’s opinion, the employer frequently recorded conversations between employees and with customers.  The plaintiff was suspected of shirking work and falsifying his time card on December 4.  An investigation could not substantiate that he had performed the work he claimed on his time card to have performed on the afternoon in question.  After he was questioned, he requested another employee to modify a work ticket to reflect that he had performed certain work recorded on December 9 on December 4.  However, there were recorded conversations about the December 9 work which called that version into question.  Then, the employee claimed that he had performed the work on both dates. 

Then, a caller reported that the plaintiff had performed work on their property on December 4 (and later substantiated that with a written statement).  However, after listening to a recording of that conversation, the employer and union believed that the plaintiff was the caller.  Then, the plaintiff reported to the union that he had performed a third work request on that afternoon as well.   A union officer attempted to recreate the plaintiff’s version of events, but found it to be physically impossible to have occurred as he had described.  For instance, it believed that he would have had to have driven his truck to have gotten all of the work done as described, but the GPS showed that his truck never moved that afternoon.   In the meantime, another employee accused him of inappropriate conduct, and of trading company equipment for illegal drugs.   The Company decided to terminate his employment and the grievance process ensued.  The plaintiff was awarded unemployment compensation, but the union officers voted to not pursue arbitration of his claim because they believed that it would be fruitless and never provided the employer with written statements it had obtained from the plaintiff or his alleged witnesses. 

Finally, the plaintiff reported to the Sheriff’s office that he had been threatened by the co-worker who had accused him of inappropriate conduct and taking illegal drugs.   A deputy contacted the HR manager and wrote down that she was told that the plaintiff had been fired because there had been allegations that he was trading parts for illegal drugs.  The plaintiff filed suit claiming that he had been terminated without just cause under the bargaining agreement (the §301 claim), that the union had failed to fairly represent him, and that the HR manager had defamed him by statements made to the union and to the deputy sheriff.  The trial court granted summary judgment to the employer.

In order to prevail on his hybrid claim against the employer and the union, the plaintiff was required to prevail on both his §301 claim and his fair representation claim.  Because the plaintiff could not prevail on his fair representation claim, the court never addressed whether his termination had been for “just cause” under the bargaining agreement.   “A plaintiff may prove breach of duty by showing that ‘the union’s actions or omissions during the grievance process were arbitrary, discriminatory, or in bad faith.’”   With respect to a union acting arbitrarily, a plaintiff must prove that the union’s “conduct “is so far outside a wide range of reasonableness as to be irrational.”  Because the union here had conducted its own investigation, reviewed and reasonably weighed the evidence and consulted with the international union, its actions could not be deemed arbitrary.  Its internal investigation need only be reasonable, not perfect.  “[U]nion agents are not lawyers,” and “mere negligence or poor judgment” alone is not sufficient to prove breach of duty.  The union had requested and reviewed all of the employer’s evidence, attempted its own re-creation of the alleged events and reasonably determined that the plaintiff’s version was not credible even if supported by written witness statements and even if the union did not personally interview those witnesses.   There was no evidence that a more thorough investigation by the union would have changed its decision. 

The Court also rejected the plaintiff’s argument that he was unfairly excluded from the grievance process.  The union’s policy was to exclude grievants from the step 3 meetings and the employer refused to permit him back onto its property after his termination.   Otherwise, the grievant was kept informed of the process and was regularly updated.  In any event, a “union’s mere negligence in keeping the grievant informed about the grievance process was not enough to prove breach of duty.”

The union’s refusal to contest more vigorously the employer’s evidence was also not inappropriate.  The recordings of the telephone conversations which attempted to substantiate the plaintiff’s version of events reasonably “posed an insurmountable hurdle” to prevailing in any arbitration.  It was not irrational to believe that none of the evidence provided by the plaintiff would have caused the employer to reconsider its decision.  

There was also no evidence that the union’s actions were motivated by discrimination or that he was treated differently than substantially similar grievants.  The Court also rejected the bad faith argument even though the plaintiff had been removed as a union steward because of a belief that he was undermining the union’s business manager.  The Court also found that the union officer’s desire for a non-union management position at the employer was insufficient evidence of bad faith in the absence of proof of personal animosity. 

As for the defamation claims, the court found that the alleged statements to the deputy sheriff by the HR Manager could not be defamatory because the plaintiff himself had relayed substantially similar information to the deputy approximately 30 minutes earlier.  “A plaintiff may therefore prove defamation only if the third party receiving the publication understands its defamatory meaning.”  Because the deputy could not have understood the statements to be defamatory after hearing much the same information earlier from the plaintiff, the alleged statement is not actionable.   Further, it was true that allegations about drug use had been made against the plaintiff and there is no indication that the HR Manager conveyed that he believed those allegations to be true or that he simply conveyed that the plaintiff had been trading company equipment for drugs.  Instead, he relayed that such allegations had been made.  

In addition, the HR Manager’s statements to the union officers during the grievance meetings about the plaintiff’s alleged misconduct were protected by qualified privilege.  In any event, playing recordings for the union officers – of the co-worker’s allegations about inappropriate conduct and trading company equipment for drugs --  is not actionable as a defamatory statement.   The HR Manager never indicated that he believed the allegations, but was simply informing the union that the allegations had been made.  

Finally, telling the union officers that the plaintiff falsified a company record was protected by a qualified privilege because the HR Manager – while probably incorrect – had interviewed a couple of employees to determine if someone else had amended the work ticket to reflect that the work had been performed on December 4 instead of or in addition to the work performed on December 9. “Ohio extends a privilege to statements made in good faith, where ‘an interest [is] to be upheld, [the] statement [is] limited in its scope to this purpose, [there is] a proper occasion, and publication [is] in a proper manner and to proper parties only.’”  In this case, his “statement about the ticket was published only to necessary parties, the Union officers in charge of the grievance.  Finally, [his] statement was limited in scope because it was couched as a “belief.”  The plaintiff could not overcome this privilege without evidence of actual malice, i.e., evidence that the HR manager knew or recklessly disregarded that the information was false.  

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can be changed or amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.