The Different World of Public Sector Employment When Plaintiff’s Retirement After His Termination Results in Dismissal of Discrimination Lawsuit

Last week, the Hamilton County Court of Appeals affirmed judgment on the pleadings for a public employer on a disability discrimination claim on the basis that the plaintiff could not prove an adverse employment action or constructive termination when he admittedly retired during the pendency of a civil service commission appeal of his termination in order to preserve his retirement benefits. Daudistel v. Village of Silverton, 2014-Ohio-5731.  In this case, the plaintiff had been employed as the Village Police Chief when he required time off from work to combat cancer and was faced with repeated efforts by the City Manager to reduce and terminate his employment upon his return. (The City Council rejected each of the City Manager’s efforts).  Nonetheless, after the plaintiff was eventually placed on administrative leave and terminated, he appealed to the Civil Service Commission.  The Commission has a local rule which will dismiss any charges of misconduct if the employee resigns his employment before the Commission rules on the propriety of the discharge.    The plaintiff retired during the pendency of his civil service appeal, which was then dismissed by the Commission and affirmed on appeal by the common pleas court. The plaintiff then brought a lawsuit alleging disability discrimination and harassment, which was dismissed without opinion after the employer sought judgment on the pleadings.  The Court of Appeals affirmed on the basis that the plaintiff’s retirement was voluntary and, therefore, could not be an adverse employment action.  The Court rejected his arguments that he was constructively terminated (i.e., forced to retire) by the City Manager’s efforts to terminate his employment and rejected the employer’s argument that the prior civil service appeal constituted either res judicata or collateral estoppel.

The Court concluded that the plaintiff had not been actually terminated because his retirement converted the City Manager’s attempt to discharge him into a resignation.  It similarly rejected his argument that the prior attempts to terminate him qualified as adverse employment actions or harassment because they had been rejected by the City Council.   As for constructive discharge, the Court found that the plaintiff’s decision to retire – while opposing the decision to discharge him before the Civil Service Commission – had been entirely voluntary because he could have chosen to continue his civil service appeal instead of retiring.

 

“The test for constructive discharge “is whether the employer’s actions made working conditions so intolerable that a reasonable person under the circumstances would have felt compelled to resign.” . . . . 

The effect of Rule 14.01, as applied to Daudistel, and as he well knew, was to convert Daudistel’s termination into a resignation and to protect his retirement benefits. Daudistel elected to resign, even though  he had the opportunity to contest his firing, and, thus, he cannot now claim that the Village wrongfully terminated him—actually or constructively.

 

This decision is surprising because a private sector employer would not be able to force an employee to choose between collecting retirement benefits (which the employee was otherwise qualified to receive) and pursuing a claim for constructive discharge or challenging an allegedly discriminatory employment termination.   A court faced with similar facts in the private sector would have considered whether the employer’s actions and the plaintiff’s termination created an intolerable working environment instead of giving precedence to a local civil service rule over a state or federal law.   There also would have been consideration of the amount of time the plaintiff lacked an income due to the employer’s actions.   It is because of this that employers enter into settlement agreements with plaintiffs to convert terminations to resignations in exchange for the dismissal of the litigation.  If private sector employers could avoid discrimination litigation simply by imposing their own rules about converting terminations to resignations when elderly employees collect retirement benefits, there would be far fewer lawsuits.

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 change or be 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: Employer’s Resentment of Work Employee Missed Due to Military Service Supported Imposing Wrongful Discharge Liability Under USERRA.

Earlier this month, the Sixth Circuit affirmed a bench trial verdict in a wrongful discharge case brought under USERRA by an employee who had been fired in part because of insubordination, but which the trial court found was motivated mostly by the employee’s missing work because of his national guard service. The Court, however, remanded the case for reconsideration of the $352,846 of damages imposed by the trial judge. Hance v. Norfolk Southern Railway Co., No. 07-5475 (6th Cir. 7/1/09). Although the employee’s alleged insubordination had been independently investigated and substantiated in a union arbitration, the Court believed there was sufficient evidence that the employer would not have terminated the employee for the alleged insubordination if his supervisor and manager had not both expressed resentment of the amount of work he missed because of his national guard service.

As stated by the Court:

On appeal, [the employer] argues that the district court erred in attributing antimilitary animus to [the employer]and in concluding that [the employer] failed to prove that a nondiscriminatory reason actually motivated the discharge. Regarding the attribution of anti-military animus to the company, [the employer] argues that [the plaintiff’s] immediate supervisor, lacked the authority to investigate or terminate [the plaintiff] and, therefore, that [the supervisor’s] anti-military animus cannot be imputed to the company. But in addition to evidence of [the supervisor’s] hostile attitude, testimony by union representative . . . indicated that Assistant Superintendent Bryson had also expressed concern about [the plaintiff’s] taking “too much time off for the military.” Significantly, Bryson was responsible for the decision to dismiss [the plaintiff]. This evidence of anti-military animus from a decisionmaker, combined with the close temporal relationship between [the plaintiff’s] two-week leave for military service and his discharge was legally sufficient to support the district court’s finding that [the plaintiff] was discharged in violation of USERRA.

The Court also refused to accord res judicata status to the labor arbitration which upheld the plaintiff’s discharge for insubordination. Although courts “accord broad deference” to arbitration decisions, the Court has

previously recognized as an exception to this rule that district courts are not bound by arbitration decisions in employment discrimination cases under Title VII or 42 U.S.C. § 1981. . . . “a federal court may, in the course of trying a Title VII or section 1981 action, reconsider evidence rejected by an arbitrator in previous proceedings.” Id. at 142. In the context of an employment discrimination case, deference is due to an arbitrator’s interpretation of provisions in a collective bargaining agreement or other employment contract, but Becton cautions that an arbitrator’s decision regarding “just cause” for termination is not equivalent to the inquiry and burden-shifting framework mandated by Congress in an employment discrimination case. See id. Hence, a federal court should not consider an arbitrator’s decision binding in a discrimination suit, because to do so would “unnecessarily limit[] the plaintiff’s opportunity to vindicate his statutory and constitutional rights.” Id.

In this case, the district court considered the arbitrator’s decision, the factual dispute over whether Hance’s reporting instructions were clear, and the evidence of anti-military animus by Hance’s superiors. Because the district court was not required to consider the arbitrator’s determination as conclusive, that determination could not prevent the court from holding – correctly, we conclude – that Norfolk Southern had failed to demonstrate a valid, nondiscriminatory basis for Hance’s dismissal, as measured by the standard required under section 4311(c)(1).

Insomniacs may read the decision in full at http://www.ca6.uscourts.gov/opinions.pdf/09a0224p-06.pdf

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 change or be 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.