The U.S. Court of Appeals for the 3rd Circuit—which covers Delaware, New Jersey, and Pennsylvania—recently upheld an employer’s trial court victory, providing useful guidance for employers seeking to manage difficult employees in the midst of workers’ compensation claims.
Alleged Discrimination and Retaliation
“Ted” began working for Trane Ingersoll-Rand Company and Trane U.S. Inc. as a machinist in August 2008. Trane maintains a discipline and discharge policy under which employees will be discharged if they receive four written disciplinary “warning notices” provided there isn’t more than 12 months separating consecutive warnings. Trane supervisors are also permitted to issue oral warnings for minor infractions. In addition, an employee may be suspended for “more serious violations” and for receiving multiple disciplinary notices.
Ted received both written warning notices and oral warnings throughout much of his employment. He was given five oral warnings between July 2010 and April 2012. He also received a written warning notice on April 13, 2012, for colliding with a pole while he was driving a forklift, and again the next February for operating a forklift without wearing a seat belt.
In May 2013, Ted suffered an injury to his finger that required surgery. He reported the injury, filed a claim for workers’ compensation, and took a medical leave that lasted 7 weeks. He returned to work in July, with Trane accommodating him by placing him in a light-duty assignment. He returned to his normal duties on September 4.
Following his return to work, Ted continued to receive discipline. Trane issued him two oral warnings in August and a written warning notice on September 24 (for arriving late to his workstation after a break). He was given another written warning notice on October 21, this time for eating at his workstation. The October warning notice was his fourth, and pursuant to Trane’s discipline and discharge policy, his employment was terminated.
Ted challenged the discharge through his union, grieving in particular the September 2013 warning notice for returning late to his workstation. The discipline was overturned in arbitration in July 2014, and he was reinstated. However, he still had three active warning notices. Shortly after his reinstatement, he received four oral warnings in July and September. Ultimately, he received a fourth written disciplinary notice, and his employment was terminated on October 6, 2014.
Ted filed a lawsuit against Trane after the termination of his employment asserting claims of discriminatory discharge based on his disability under the New Jersey Law Against Discrimination (NJLAD), retaliation for making a workers’ compensation claim, and retaliation for requesting medical leave in violation of the Family and Medical Leave Act (FMLA). The district court granted Trane’s motion for summary judgment, dismissing Ted’s lawsuit without a trial. He appealed to the 3rd Circuit.
3rd Circuit’s Decision
Ted asserted two primary arguments on appeal. First, he claimed that the district court applied the wrong standard in analyzing his retaliation claims. Although the district court employed the familiar burden-shifting framework set out in McDonnell Douglas Corp. v. Green, Ted argued it should have applied the “mixed-motive” standard set forth in Price Waterhouse v. Hopkins.
Under McDonnell Douglas, an employee may rely on circumstantial evidence to prove his case. He must present an initial claim of discrimination or retaliation, the employer must rebut that claim by providing a legitimate nondiscriminatory or nonretaliatory reason for the challenged action, and the burden then shifts back to the employee to show that the employer’s reason was just a “pretext,” or excuse, for discrimination or retaliation.
Under Price Waterhouse, however, a court will employ a mixed-motive analysis, assessing first whether the employee put forth evidence that the employer relied on an impermissible criterion as a motivating or substantial factor in its employment decision and then whether the employer demonstrated that it would have reached the same decision even in the absence of the impermissible factor.
To trigger the Price Waterhouse standard, Ted needed to present direct evidence of discrimination to show that the decision makers “placed substantial negative reliance” on his protected activity. The only evidence he cited as direct evidence was testimony from his supervisor at the time of his final termination “recount[ing] a ‘conversation with [an HR employee]'” during which the supervisor was notified of his impending return from medical leave and was told to “keep an eye on him.” The 3rd Circuit found that even if those comments showed Ted was targeted for disciplinary action, they didn’t show that he was targeted because of his workers’ compensation claim or his leave of absence. Therefore, he couldn’t rely on Price Waterhouse.
Ted’s second primary argument was that he presented sufficient evidence to make summary judgment inappropriate. He specifically challenged his September 2013 disciplinary warning notice (for returning late from a break), arguing it showed that he was retaliated against for seeking an accommodation. In rejecting this argument, the 3rd Circuit provided some helpful guidance.
The fact that Ted’s supervisors were aware that he was visiting a nurse during his break but still issued the disciplinary warning didn’t change the fact that he was late returning from the break. And the court noted that contrary to his claims, other employees had been disciplined for leaving their workstations in the past. The 3rd Circuit also pointed out that the discipline being overturned in arbitration didn’t provide evidence of discriminatory intent in and of itself.
Finally, Ted challenged the sufficiency of Trane’s evidence by pointing to the “ongoing antagonism” he claimed he was subjected to after his leave and the “temporal proximity” between his leave and Trane’s adverse employment action. Neither argument was availing, however.
The 3rd Circuit found no evidence of “ongoing antagonism,” noting that Ted was disciplined both before and after his medical leave, which demonstrated that Trane didn’t treat him any differently as a result of his leave or his workers’ compensation claim. Nor was his reliance on temporal proximity helpful, since the 3rd Circuit has concluded in past decisions that a short gap in time between leave and discipline (in this case, approximately two months) isn’t unduly suggestive of an unlawful motive.
Accordingly, the 3rd Circuit found that the district court properly considered Ted’s claims, and it affirmed the lower court’s dismissal of the lawsuit.
While it’s always good to see positive outcomes for employers, this decision from the 3rd Circuit in particular provides some hope for employers. For instance, it’s heartening that the court of appeals considered the fact that Trane’s treatment of Ted didn’t change after his return from leave (notably, he was disciplined both before and after the leave). Further, employers with unionized workforces should take comfort from the court’s finding that even an adverse arbitration decision doesn’t, on its own, support a discrimination claim.