Diamond v. American Family Mutual Insurance Company

IN THE UNITED STATES DISTRICT COURT FOR THE

WESTERN DISTRICT OF MISSOURI

WESTERN DIVISION

DAVID A DIAMOND, )

)

Plaintiff, )

)

v. ) Case No. 4:16-00977-CV-RK

)

AMERICAN FAMILY MUTUAL )

INSURANCE COMPANY, )

)

Defendant. )

ORDER DENYING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT

Now before the Court is Defendant’s Motion for Summary Judgment on Plaintiff’s

claims arising under the Family and Medical Leave Act (“FMLA”). (Doc. 24.) Plaintiff filed

opposition suggestions (doc. 30), and Defendant filed reply suggestions (doc. 33). After careful

consideration, the motion is DENIED.

Factual Background

With the exception of a break in employment beginning in 2002 and ending in early

2003, Plaintiff was employed by Defendant from January 1999 until his discharge in February

2015. (Doc. 42 at ¶¶ 1, 2, 13.) While Plaintiff was employed by Defendant, he took FMLA

leave on three occasions: prior to 2006; August 31, 2011 through December 19, 2011; and

October 15, 2013 through November 6, 2013. (Id. at ¶¶ 18-21.) Defendant approved each of

Plaintiff’s requests for FMLA leave and reinstated him to the same position with the same salary

and benefits upon his return from FMLA leave. (Id. at ¶ 22.)

On March 24, 2012, Plaintiff was hired by Ray Caudill to transfer to a Senior Catastrophe

Claims Adjustor position. (Id. at ¶ 10.) Caudill was Plaintiff’s manager from March 2012 until

his discharge. (Id. at ¶ 28.) In this role, Plaintiff was responsible for processing catastrophic

property claims for Defendant’s customers. (Id. at ¶ 11.) Plaintiff’s job duties included making

many telephone calls throughout the day to insureds, witnesses, repair contractors, agents, and

others. (Id. at ¶ 12.) Plaintiff made notes of each call in the Defendant’s computer files. (Id.)

Plaintiff remained in this position until his discharge in February 2015. (Id. at ¶ 13.)

On February 12, 2015, Caudill met with and issued Plaintiff his 2014 Performance

Review. (Id. at ¶ 30.) Caudill’s comments in the 2014 Performance Review were positive, and

Caudill wrote that he had seen growth and improvement in many areas over the last year.

(Id. at ¶ 32.) In his 2014 Performance Review, Plaintiff was rated “Above Target” for one

measure and “On Target” for all other measures. (Id. at ¶ 33.) Plaintiff testified that, during his

performance review on February 12, 2015, Plaintiff told Caudill he intended to arrange for

upcoming FMLA leave, and Caudill admits that Plaintiff told him he was planning to arrange for

FMLA leave but that he does not remember the timing of that conversation in relation to

Plaintiff’s performance review. (Doc. 34 at ¶ 161.)

On Friday, February 13, 2015, a report of phone calls made to or from the phone on

Plaintiff’s desk was prepared for Caudill to analyze. (Doc. 42 at ¶ 35.) Caudill testified that he

requested the records because he received complaints, during January and February 2015, from

insureds and agents who reported they had not received follow-up calls or call-backs from

Plaintiff on their claims. (Doc. 26 at ¶ 58.) Caudill pulled Defendant’s claim files in which

Plaintiff had written he called the insureds and compared Plaintiff’s claim file entries to a

30-day phone report from his desk telephone. (Doc. 42 at ¶ 36.) Caudill has never identified to

Plaintiff the customers that allegedly complained of not receiving a call and has never shown

Plaintiff any notes of such complaints. (Doc. 34 at ¶ 179.) Plaintiff signed his 2014

performance review on February 16, 2015. (Doc. 42 at ¶ 34.) On February 20, 2015, a final

paycheck was requested from the payroll department. (Doc. 34 at ¶ 167.) On the morning of

February 24, 2015, Plaintiff was at work when he received a call on his cell phone that Caudill

wanted to meet with him; Caudill met with Plaintiff; and Caudill informed Plaintiff that he was

being terminated for falsifying company records. (Doc. 42 at ¶¶ 37 - 39.)

The parties dispute the following: whether Caudill made mocking and disparaging

comments about Plaintiff’s FMLA leave when Plaintiff returned from FMLA leave in 2013;

whether, from 2013 to his termination, Plaintiff was assigned a heavier workload than other

adjustors and senior adjustors; whether Plaintiff was denied help with his files when such help

was provided to other adjustors; whether it was common knowledge among the employees in

Plaintiff’s unit that his computer was often down; whether a senior adjuster would ever use a

phone other than the one on his or her desk for making business phone calls; and whether

Plaintiff offered any explanation for the discrepancy between his file notes and the phone report

from his desk telephone.

Discussion

“The court shall grant summary judgment if the movant shows that there is no genuine

dispute as to any material fact and the movant is entitled to judgment as a matter of law.” FED.

R. CIV. P. 56(a). A party who moves for summary judgment bears the burden of showing that

there is no genuine issue of material fact. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256

(1986). An issue of fact is only genuine if it has a real basis in the record, and is material if it

“might affect the outcome of the suit under the governing law.” Id. at 248. In applying this

standard, the Court must view the evidence in the light most favorable to the non-moving party,

giving that party the benefit of all inferences that may be reasonably drawn from the evidence.

Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587-88 (1986); Tyler v.

Harper, 744 F.2d 653, 655 (8th Cir. 1984), cert. denied, 470 U.S. 1057 (1985). A party

opposing a motion for summary judgment may not simply deny the allegations, but must point to

evidence in the record demonstrating the existence of a factual dispute. Fed. R. Civ. P. 56(c)(1);

Conseco Life Ins. Co. v. Williams, 620 F.3d 902, 909-10 (8th Cir. 2010).

The FMLA “entitles an employee to twelve weeks of leave from work during any twelve-

month period if the employee meets certain statutory requirements.” Pulczinski v. Trinity

Structural Towers, Inc., 691 F.3d 996, 1005 (8th Cir. 2012). Two subsections of the FMLA

prohibit an employer’s ability to undermine an employee’s permitted leave. Id. Section

2615(a)(1) “makes it unlawful for an employer to interfere with, restrain, or deny the exercise of

or the attempt to exercise rights provided under the FMLA,” and section 2615(a)(2) “makes it

unlawful for any employer to discharge or in any other manner discriminate against any

individual for opposing any practice made unlawful by the FMLA.” Brown v. Diversified

Distribution Sys., LLC, 801 F.3d 901, 907 (8th Cir. 2015) (quotations and citations omitted).

The Eighth Circuit has recognized three different FLMA claims from these two subsections: (1)

entitlement, (2) discrimination, and (3) retaliation. Pulczinski, 691 F.3d at 1005.

I. FMLA Claims

As mentioned above, the Eighth Circuit recognizes three types of FMLA claims:

(1) entitlement, (2) discrimination, and (3) retaliation. Pulczinski, 691 F.3d at 1005-1006. As

recently identified in Teetor v. Rock-Tenn Services, Inc.:

“An entitlement claim arises under § 2615(a)(1) when ‘an employer

refuses to authorize leave under the FMLA or takes other action to avoid

responsibilities under the Act.’” Id. (quoting Pulczinski, 691 F.3d at 1005). In an

entitlement claim, previously called an interference claim, an employee must

show only that he or she was entitled to the benefit denied. Johnson v. Wheeling

Mach. Prods., 779 F.3d 514, 517-18 (8th Cir. 2015).

“Discrimination claims arise under § 2615(a)(1) ‘when an employer takes

adverse action against an employee because the employee exercises rights to

which he is entitled under the FMLA.’” Brown, 801 F.3d at 908 (quoting

Pulczinski, 691 F.3d at 1006); accord 29 C.F.R. § 825.220(c) (“The Act’s

prohibition against interference prohibits an employer from discriminating or

retaliating against an employee ... for having exercised . . . FMLA rights.”);

Massey-Diez, 826 F.3d 1149, 1157 (8th Cir. 2016). . . . To establish a prima facie

case of FMLA discrimination, an employee must show: (1) that he engaged in

activity protected under the Act, (2) that he suffered a materially adverse

employment action, and (3) that a causal connection existed between the

employee’s action and the adverse employment action. Brown, 801 F.3d at 908.

A retaliation claim arises under § 2615(a)(2) if an employer takes ‘adverse

action’ against an employee who ‘opposes any practice made unlawful under the

FMLA—for example, if an employee complains about an employer’s refusal to

comply with the statutory mandate to permit FMLA leave.’” Id. at 909 (quoting

Pulczinski, 691 F.3d at 1005-06).

2017 U.S. Dist. LEXIS 162179, at *8-10 (E.D. Mo. Oct. 2, 2017). Here, Plaintiff asserts two

FMLA claims. (Doc. 23.)

With respect to identifying which FMLA claims Plaintiff is pursuing, “Count I - Family

& Medical Leave Act,” alleges that Plaintiff took FMLA leave; a supervisor criticized and

ridiculed Plaintiff for taking FMLA leave; a supervisor indicated a concern that Plaintiff would

take leave in the future; in early 2015, Plaintiff told his supervisor and others that he intended to

take FMLA leave; shortly after he expressed his intentions to take FMLA leave, he was

terminated; and that Defendant’s purpose for the termination was to interfere with Plaintiff’s

FMLA rights because Defendant was motivated by a concern that Plaintiff would take additional

FMLA leave. (Id. at ¶¶ 37, 39, 40, 41, 42.) This claim, while previously called an interference

claim, is now referred to as an entitlement claim. Pulczinski, 691 F.3d at 1005 (Cases have

described an FMLA claim arising under § 2615(a)(1), which occurs where an employer “refuses

to authorize leave under the FMLA or takes other action to avoid responsibilities under the Act”

as “an ‘interference’ claim, but that terminology may not illuminate, because all prohibited acts

under § 2615(a) appear under the heading ‘Interference with rights.’ For clarity of analysis, we

think it helpful to describe this as an ‘entitlement’ claim—an employee claims the denial of a

benefit to which he is entitled under the statute.”). Here, Plaintiff claims that Defendant

interfered with his entitlement to FMLA by terminating him after he informed his supervisor of

his intention to take FMLA leave but before he completed the process for taking FMLA leave.

Plaintiff’s second count, “Count II – Retaliation,” alleges that Plaintiff took FMLA leave;

in retaliation for taking that leave, Defendant assigned Plaintiff an excessive and unreasonable

workload and terminated Plaintiff when Plaintiff indicated he intended to take additional FMLA

leave; and that Defendant’s retaliatory actions were motivated and caused by a desire to retaliate

against Plaintiff for taking protected leave. (Doc. 23 at ¶¶ 50, 52, 53.) While labeled

“retaliation,” this is a claim for FMLA “discrimination.” See Peterson v. Martin Marietta

Materials, Inc., 2016 U.S. Dist. LEXIS 64469, at *29 (N.D. Iowa May 17, 2016) (FMLA

discrimination occurs where an employer retaliates against an employee for exercising FMLA

rights, whereas FMLA retaliation occurs when “an employer takes ‘adverse action’ against an

employee who opposes or complains about an employer’s failure to comply with the

requirements of FMLA.) (citing Brown, 801 F.3d at 908-909 and Pulczinski, 691 F.3d at 1005-

1006). Here, Plaintiff claims that Defendant retaliated against him for exercising FMLA rights,

and therefore discriminated against him in violation of FMLA.

II. Entitlement

Plaintiff has met his burden to establish a prima facie case for interference with his

entitlement to FMLA leave. An employer interferes with an employee’s entitlement to FMLA

not only by refusing to authorize leave and discouraging an employee from using such leave, but

also when it “takes other action to avoid responsibilities under the [FMLA].” Brown, 801 F.3d at

907. “An employee proceeding on this theory need not show that an employer acted with

discriminatory intent.” Pulczinski, 691 F.3d at 1005. It is clearly established in the Eighth

Circuit that “every discharge of an employee while [he or she] is taking FMLA leave interferes

with an employee’s FMLA rights.” Throneberry v. McGehee Desha County Hosp., 403 F.3d

972, 980 (8th Cir. 2005). It follows that this logic applies to employees “precipitously

terminated for inquiring about, or giving notice of, FMLA leave.” Rabe v. Nationwide Logistics,

Inc., 530 F. Supp. 2d 1069, 1075 (E.D. Mo. 2008); see also Verby v. PayPal, Inc., 2014 U.S.

Dist. LEXIS 59261, at *47 (D. Neb. Apr. 29, 2014) (“The Eighth Circuit has . . . concluded that

terminating an employee, in response to a qualifying employee’s assertion of rights may also

qualify as interference.” “[I]f the plaintiff had evidence that she was fired because she was about

to begin FMLA leave . . . it would arguably support either an [entitlement] claim, or a

[discrimination] claim, or both[.]”) (citing Dollar v. Smithway Motor Xpress, Inc., 710 F.3d 798,

806 (8th Cir. 2013) (other citations omitted).

In Rabe, the Court held that “[w]hether an alleged act occurs prior to, during, or

subsequent to FMLA leave, that which deters an employee from participating in protected

activities constitutes an interference or restraint of the employee’s exercise of his rights.” Id.

(internal quotations and citations omitted) (“[I]t is uncontroverted that (i) on August 17, 2005,

Mr. Rabe gave notice of his intent to take leave; (ii) on August 26, 2005, Mr. Rabe met with

management to further discuss this inquiry; and (iii) on August 30, 2005, Mr. Rabe was

terminated. Taken together, Mr. Rabe has sufficiently stated a prima face case of interference”

with his entitlement to take FMLA leave.) Here, it is uncontroverted that in early 2015, Plaintiff

told his supervisor he intended to take FMLA leave, and that shortly after Plaintiff expressed that

intention he was terminated. Therefore, Plaintiff has established a prima facie case of

interference with his entitlement to take FMLA leave.

However, the FMLA does not prohibit an employer from terminating an employee for

reasons unrelated to the FMLA. Throneberry v. McGehee Desha Cty. Hosp., 403 F.3d 972, 977-

981 (8th Cir. 2005). “As long as an employer can show a lawful reason, i.e., a reason unrelated

to an employee’s exercise of FMLA rights, …. the employer will be justified to interfere with an

employee’s FMLA leave rights.” Rabe, 530 F. Supp. 2d at 1075 (quoting Throneberry, 403 F.3d

at 978-979). The parties do not dispute that falsifying records is a lawful reason for termination.

However, there are material factual disputes related to whether Plaintiff falsified records or

Defendant believed Plaintiff falsified records. Viewing all inferences in the light most favorable

to Plaintiff, Plaintiff’s phone records from his desk phone were pulled the day after he expressed

an intention to take FMLA leave, there are no written records of complaints from his customers

regarding failure to make or return calls, he worked at other desks and used his cell phone to

make calls on a regular basis, it was common knowledge that he used phones other than his desk

phone, and Plaintiff offered explanations at his termination meeting for the discrepancy between

his file notes and phone report from his desk telephone. In addition, Plaintiff received favorable

marks during his performance review, the day before his phone records were pulled. Thus, for

summary judgment purposes, Defendant has failed to sufficiently establish the existence of a

lawful reason unrelated to Plaintiff’s assertion that he was planning to take FMLA leave.

III. Discrimination

When evaluating FMLA discrimination claims in the absence of direct evidence, the

Court uses the McDonnell-Douglas burden-shifting framework. Brown, 801 F.3d at 908. Under

this framework, the employee must first make a prima facie case for FMLA discrimination.

Hite v. Vermeer Mfg. Co., 446 F.3d 858, 865 (8th Cir. 2006). If a prima facie case is established,

“the burden shifts to the employer to articulate a legitimate, nondiscriminatory reason for its

actions.” Id. If the employer articulates such a reason, the burden then shifts back to the

employee to submit evidence that the provided reason is pretext, or in other words, a prohibited

reason, rather than the proffered reason, actually motivated the employer’s action. Id.

To establish FMLA discrimination, “an employee must show: (1) that he engaged in

activity protected under the Act, (2) that he suffered a materially adverse employment action, and

(3) that a causal connection existed between the employee’s action and the adverse employment

action.” Brown, 801 F.3d at 908. The only element in dispute is whether Plaintiff has

established a causal connection i.e. whether Plaintiff’s protected FMLA activity “played a part”

in Defendant’s decision to terminate Plaintiff. Pulczinski, 691 F.3d at 1007. Plaintiff asserts

that the day after he informed Defendant of his intention to take FMLA leave, Defendant took its

first steps toward fabricating a reason for his termination, and Plaintiff was terminated shortly

after. Although timing alone is typically insufficient to establish causation, given such close

proximity here, coupled with Caudill’s alleged statements about Plaintiff’s previous leave, and

the disputes regarding the veracity of the falsification allegations, explanations, and

investigation, the causation element has been sufficiently established. Hite v. Vermeer Mfg. Co.,

446 F.3d 858, 866 (8th Cir. 2006) (“Even if temporal proximity alone is insufficient to establish

causation, the employee may attempt to prove causation by providing evidence of the employer’s

discriminatory comments.”) (citation omitted).

Because Plaintiff has established a prima facie case, the burden shifts to Defendant to

articulate a legitimate, nondiscriminatory reason for its actions. “The employer’s responsibility

to present proof of a non-discriminatory, legitimate justification for its action is not an onerous

task.” Ebersole v. Novo Nordisk, Inc., 758 F.3d 917, 925 (8th Cir. 2014) (citation omitted). As

discussed above, the parties agree that falsifying records is a legitimate reason for termination.

Thus, the burden shifts back to Plaintiff to show that that Defendant’s proffered reason is merely

pretext for discrimination.

Pretext can be shown in a number of ways, for example, “by demonstrating that the

employer’s proffered reason has no basis in fact, that the employee received a favorable review

shortly before he was terminated, that similarly situated employees who did not engage in the

protected activity were treated more leniently, . . . or that the employer deviated from its

policies.” Ebersole, 758 F.3d at 925. Factual disputes preclude the Court from determining

whether Defendant’s reason for terminating Plaintiff – falsifying business records – has any basis

in fact. As previously mentioned, the parties dispute whether adjustors used phones other than

the phones on their desk for making business phone calls; whether it was common knowledge

that Plaintiff used other phones on a regular basis; and whether Plaintiff offered any explanation

for the discrepancy between his file notes and the phone report from his desk telephone.

Moreover, factual disputes preclude the Court from determining whether Defendant conducted

the investigation in good faith, and therefore, whether Defendant honestly believed Plaintiff

falsified records. While the Court does not “sit as a super-personnel department” to review

business decisions, it does review the decisions “to the extent those judgments involve

intentional discrimination.” Rabe, 530 F. Supp. 2d at 1077. Plaintiff argues at length that

Defendant’s investigation was incomplete in certain respects, and Defendant points to cases such

as Edwards v. Hiland Roberts Dairy, Co., which stand for the proposition that “a shortcoming in

an internal investigation alone, without additional evidence of pretext, would not suffice to

support an inference of discrimination on the part of the employer.” 860 F.3d 1121, 1127 (8th

Cir. 2017). However, Plaintiff has provided additional evidence of pretext such as timing and a

positive review. While other facts weigh in Defendant’s favor such as the fact that other

employees were terminated for falsifying records, this does not negate the fact that Plaintiff has

set forth evidence from which a reasonable juror could find that Defendant’s proffered

explanation was merely pretextual. Based on the foregoing, Plaintiff’s claim that Defendant

discriminated against him for exercising FMLA rights survives summary judgment.

Conclusion

Accordingly, Defendant’s motion for summary judgment is DENIED.

IT IS SO ORDERED.

s/ Roseann A. Ketchmark

ROSEANN A. KETCHMARK, JUDGE

UNITED STATES DISTRICT COURT

DATED: November 9, 2017