Russell, Lisa K. v. Principi, Anthony J.

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued May 4, 2001 Decided July 27, 2001

No. 00-5172

Lisa K. Russell,

Appellant

v.

Anthony J. Principi, Secretary of Veterans Affairs,

Appellee

Appeal from the United States District Court

for the District of Columbia

(No. 97cv00749)

Mark G. Chalpin argued the cause and filed the briefs for

appellant.

David J. Ball, Jr., Assistant U.S. Attorney, argued the

cause for appellee. With him on the brief were Wilma A.

Lewis, U.S. Attorney at the time the brief was filed, and R.

Craig Lawrence, Assistant U.S. Attorney.

Before: Williams, Ginsburg and Rogers, Circuit Judges.

Opinion for the Court filed by Circuit Judge Rogers.

Rogers, Circuit Judge: The principal issue in this appeal is

whether Lisa K. Russell presented a prima facie case of

reverse discrimination by alleging an adverse employment

action under Title VII of the Civil Rights Act of 1964, 42

U.S.C. s 2000e et seq. Russell alleged that the Department

of Veterans Affairs engaged in reverse discrimination in

violation of Title VII by awarding her a lower performance

rating and a smaller cash bonus than her similarly-situated

coworker. In Brown v. Brody, 199 F.3d 446, 452 (D.C. Cir.

1999), the court rejected the argument that "poor perfor-

mance evaluations are necessarily adverse actions." Relying

on Brown, the district court granted the Department's motion

for summary judgment on the ground that Russell had not

shown that she suffered an adverse employment action. We

hold that the loss of a bonus can constitute an adverse

employment action under Title VII and, therefore, reverse

the grant of summary judgment. As to Russell's challenges

to certain orders as abuses of discretion, we affirm in part

and remand in part. We deny Russell's belated request to

plead a new cause of action for bad faith litigation abuse.

I.

Lisa K. Russell, a GS 13 procurement analyst, sued the

Department of Veterans Affairs for reverse discrimination

after her work performance for the period 1992-93 was rated

"excellent" and she received a bonus of $807, while Sherry

Patton, her coworker, was rated "outstanding" and received a

bonus of $1,355. Russell is Caucasian; Patton is African

American. "Outstanding" was the highest of five possible

ratings; "excellent" was the second highest rating. The size

of the bonus was tied to the rating. Russell alleged that her

work performance and qualifications were superior to those of

Patton, and that her supervisors had engaged in a pattern of

preferential treatment of Patton based on her race. Russell

further alleged that her "excellent" rating was adverse be-

cause it damaged her chances for promotion and provided her

with less protection "against being laid off during a govern-

ment 'reduction in force,' or RIF, pursuant to a formula

outlined by the Office of Personnel Management." The par-

ties filed cross motions for summary judgment, and the

district court granted summary judgment for the Department

on the ground that Russell had not made out a prima facie

case of disparate treatment discrimination under Title VII, as

stated in Brown. The district court ruled that neither Rus-

sell's performance rating nor her bonus, even if lower than

she allegedly deserved, could be considered adverse actions.

As to her promotion claim, the district court noted that

Russell had not offered any evidence that she was denied a

promotion opportunity or that the performance rating would

have affected her current grade and step position. The

district court also rejected Russell's RIF argument as moot

as of the time of its ruling on summary judgment, because

only Russell's last three performance evaluations could affect

how she would fare during a RIF.

II.

Applying the familiar test of McDonnell Douglas v. Green,

411 U.S. 792, 802 (1973), the court in Brown stated that to

establish a prima facie case for disparate treatment discrimi-

nation "[i]n federal as in private employment cases ... the

plaintiff must establish that (1) she is a member of a protect-

ed class; (2) she suffered an adverse employment action; and

(3) the unfavorable action gives rise to an inference of dis-

crimination." Brown, 199 F.3d at 452; see also McDonnell

Douglas, 411 U.S. at 802. A plaintiff who alleges reverse

discrimination must, in addition, demonstrate "additional

'background circumstances [that] support the suspicion that

the defendant is that unusual employer who discriminates

against the majority.' " Harding v. Gray, 9 F.3d 150, 153

(D.C. Cir. 1993) (quoting Parker v. Baltimore & Ohio R.R.,

652 F.2d 1012, 1017 (D.C. Cir. 1981)). In Brown, the court

observed that a "thick body of precedent ... refutes the

notion that formal criticism or poor performance evaluations

are necessarily adverse actions." Brown, 199 F.3d at 458.

The court held that a " 'fully satisfactory' performance rating

[was not] an adverse employment action ... [because al-

though it] may have been lower than normal, it was not

adverse in an absolute sense." Id. Russell contends that the

district court erred in granting summary judgment to the

Department both because Brown did not hold that perfor-

mance evaluations can never constitute adverse actions and

because her case is distinguishable as she consequently re-

ceived a lower bonus than her similarly situated coworker and

was subjected to a greater risk of being RIFed than her

coworker. The Department responds that Russell's " 'excel-

lent' rating cannot be characterized as adverse because her

rating was favorable, not negative or even neutral as in

Brown." Our review of the grant of summary judgment is de

novo. See id.

The Supreme Court has described the concept of a "tangi-

ble employment action" as "a significant change in employ-

ment status, such as hiring, firing, failing to promote, reas-

signment with significantly different responsibilities, or a

decision causing a significant change in benefits." Burling-

ton Indus., Inc. v. Ellerth, 524 U.S. 742, 761 (1998). Thus,

"[w]hile adverse employment actions extend beyond readily

quantifiable losses, not everything that makes an employee

unhappy is an actionable adverse action. Minor and even

trivial employment actions that 'an irritable, chip-on-the-

shoulder employee did not like would otherwise form the

basis of a discrimination suit.' " Smart v. Ball State Univ., 89

F.3d 437, 441 (7th Cir. 1996) (quoting Williams v. Bristol-

Myers Squibb Co., 85 F.3d 270, 274 (7th Cir. 1996)). We take

no issue with the "objectively tangible harm" requirement,

which guards against both "judicial micromanagement of

business practices," Mungin v. Katten, Muchin & Zavis, 116

F.3d 1549, 1556 (D.C. Cir. 1997), and frivolous suits over

insignificant slights. Performance evaluations are likely to be

"[i]nterlocutory or mediate decisions having no immediate

effect upon employment." Id. at 1555. The result of an

evaluation is often speculative, making it difficult to remedy.

For example, a single poor evaluation may drastically limit an

employee's chances for advancement, or it may be outweighed

by later evaluations and be of no real consequence. This

reasoning is reflected in Brown where the court suggested

that performance evaluations should not be considered ad-

verse actions if they did not "affect[ ] the [employee's] grade

or salary," and analogized performance evaluations to lateral

transfers, which are not actionable injuries unless they "af-

fect[ ] the terms, conditions, or privileges of [an employee's]

employment or her future employment opportunities such

that a reasonable trier of fact could conclude that the plaintiff

has suffered objectively tangible harm." Brown, 199 F.3d at

457. In contrast, a bonus is a tangible, quantifiable award,

more analogous to one's salary or to a benefit of one's

employment than to a performance evaluation. It has a more

direct, measurable, and immediate effect. Furthermore, the

loss of a bonus that is worth hundreds of dollars is not a petty

detriment.

The Department nonetheless suggests that Brown controls

because Russell's "excellent" rating and $807 bonus, although

both lower than Russell believed she deserved, were "not

adverse in an absolute sense." Id. at 458. Because we do

not equate performance evaluations and monetary bonuses,

the Department's reasoning fails. Furthermore, the logic of

an action that is "adverse in an absolute sense" fits poorly

with employment decisions involving bonuses. The denial of

a bonus, or the award of a lesser bonus for discriminatory

reasons, could never be considered "adverse in an absolute

sense." A performance evaluation can drop below an aver-

age, but a bonus cannot be negative. The perverse logical

conclusion of the Department's reasoning is that an employer

could award $500 bonuses to all white employees and $1

bonuses to all similarly situated black employees without

running afoul of Brown, because under such a discriminatory

scheme no employee would be worse off in an absolute sense.

We decline to extend Brown in this manner. Rather, we view

Brown's language about absolute deprivations as simply stat-

ing that in most circumstances performance evaluations alone

at the satisfactory level or above should not be considered

adverse employment actions.

The Department also urges us to rely on Rabinovitz v.

Pena, 89 F.3d 482 (7th Cir. 1996), a case cited with approval

in Brown. In Rabinovitz, the plaintiff claimed that he was

given a "fully successful" rather than an "exceptional" perfor-

mance appraisal, which "prevented him from receiving a $600

bonus." Id. at 488. The Seventh Circuit held that "the loss

of a bonus is not an adverse employment action in a case such

as this where the employee is not automatically entitled to the

bonus." Id. at 488-89. The Department maintains in its

brief that Russell "actually received more favorable treat-

ment" than Rabinovitz because "she received a higher 'excel-

lent' rating" and an award that was "only $548 less than that

received by her co-worker with the highest possible rating."

In Brown, the court had no occasion to address whether a

performance rating accompanied by a bonus differential was

actionable. Brown can properly be understood, therefore, as

citing Rabinovitz only to "refute[ ] the notion that formal

criticism or poor performance evaluations are necessarily

adverse actions." Brown, 199 F.3d at 458. As for the precise

holding of Rabinovitz, the phrase "not automatically entitled

to the bonus" is not entirely clear but appears to mean that

the amount of the bonus Rabinovitz could have received was

entirely discretionary. By contrast, the Department con-

ceded at oral argument that the size of Russell's bonus was

directly tied to her performance rating; a higher rating would

have automatically meant a larger bonus. Regardless of the

factual differences between the two cases, however, we reject

the notion that a denial of a monetary bonus is not a

cognizable employment action under Title VII.

For these reasons, we hold that summary judgment was

inappropriate because Russell presented a prima facie case of

reverse discrimination under Title VII based on an adverse

employment action. To the extent, however, that Russell

relies on her temporary exposure to a higher risk of RIF, we

hold that such an unrealized risk of a future adverse action,

even if formalized, is too ephemeral to constitute an adverse

employment action; as the district court noted, "while the

disputed rating might have affected [Russell's] chances of

being '[RIF]ed' at an earlier date, it cannot affect her chances

now."

III.

Russell also challenges a series of orders by the district

court for which our review is for abuse of discretion. See

Shepherd v. Am. Broad. Cos., 62 F.3d 1469, 1475 (D.C. Cir.

1995) (sanctions); Carey Canada, Inc. v. Columbia Cas. Co.,

940 F.2d 1548, 1559 (D.C. Cir. 1991) (discovery). We find

either no abuse of discretion or no need to make such a

finding inasmuch as the discovery issues will need to be

addressed on remand, in light of our reversal of the grant of

summary judgment. Much of Russell's brief and the record

she supplied on appeal address her claims that the Depart-

ment mishandled and destroyed evidence that would show

that her coworker was not entitled to the outstanding perfor-

mance rating and larger bonus, and that she was entitled to

attorneys fees. We are unable to determine on the basis of

this record whether some of the district court's rulings deny-

ing Russell's motion for sanctions and certain discovery re-

quests were influenced by its interpretation of Brown. Fur-

thermore, some of the district court's rulings appear to rely

on its earlier dismissal of Russell's Bivens claims; the rele-

vance of that dismissal is unexplained.

Insofar as Russell contends that the district court erred in

not awarding costs and attorneys fees after directing the

Department not to destroy records, she has misconstrued the

district court's ruling. The district court's statements pro-

vide no basis to conclude that the district court made the

necessary predicate finding of bad faith. The district court

judge stated: "Although I don't think it is necessary, I will

direct the Government not to destroy any documents that are

relevant to this case." Russell's counsel indicated that he was

satisfied with this ruling. On appeal, Ms. Russell interprets

the judge's remark as a sanction against the Department

under the district court's inherent powers. Hardly. By

saying "I don't think it is necessary," the judge was indicating

that he found little or no merit to the motion and that he did

not believe that the Department was destroying evidence.

The district court did not find that the Department had acted

in bad faith in destroying records, and absent such a finding,

there was no basis for the award of monetary sanctions. See

Shepherd, 62 F.3d at 1475; United States v. Wallace, 964

F.2d 1214, 1219 (D.C. Cir. 1992). Thus, Russell provides no

ground on which the court could conclude that the district

court abused its discretion in denying costs and attorneys

fees.

Russell's contention that the district court abused its dis-

cretion in denying her motion for sanctions for bad faith

litigation abuses without an evidentiary hearing fares no

better. She presents no basis for concluding that the district

court abused its discretion in proceedings without such a

hearing. See LaPrade v. Kidder Peabody & Co., Inc., 146

F.3d 899, 904 (D.C. Cir. 1998). Indeed, she argued in the

district court that no hearing was needed because the evi-

dence was clear. To the extent that Russell also contends

that the district court erred in failing to impose sanctions, we

remand this issue. The district court gave no reasons in its

order denying the motion for sanctions, and thus this court

cannot determine how the district court resolved the parties'

disputed claims of material fact. See Lyles v. United States,

759 F.2d 941, 942 (D.C. Cir. 1985).

Regarding discovery, the district court will need to reas-

sess, in light of our reversal of the grant of summary judg-

ment, the relevance of Russell's motion to compel discovery

responses to five interrogatories, which pertained to the

handling of a letter that she sent concerning the safeguarding

of records, the disposition of telephone records, alleged docu-

ment destruction by Department attorneys, Department ac-

tion to preserve telephone records, and Department policies

and procedures to preserve records. To the extent relevant

to Russell's claim of disparate treatment, the discovery re-

quests may be meritorious. To the extent they relate to her

motion for sanctions for litigation abuse that the district court

properly denies, there may be no basis for granting the

requests. We leave these matters to the district court on

remand, to proceed as is appropriate, recognizing that the

district court may ultimately conclude that its prior discovery

rulings should stand.

Finally, Russell's effort to pursue an independent cause of

action for bad faith litigation abuse against the Department

fails. As Russell acknowledges, to date no circuit court has

held that a federal cause of action exists. Because she did

not raise this issue in the district court and does not show on

appeal that "a manifest injustice might otherwise result,"

Herbert v. National Academy of Sciences, 974 F.2d 192, 196

(D.C. Cir. 1992), we decline to decide now whether such a

federal cause of action exists.

Accordingly, we reverse the grant of summary judgment

for failure to present a prima facie case under Title VII, and

remand the case for further proceedings; we deny the re-

quest to plead a new cause of action.