# Dennis v. O'Day v. McDonnell Douglas Helicopter Company, a Foreign Corporation, (Two Cases)

> Court of Appeals for the Ninth Circuit · March 26, 1996 · 79 F.3d 756

URL: https://www.frixlaw.com/law-library/cases/9489018

## Case

- **Full name:** Dennis v. O’DAY, Plaintiff-Appellant, v. McDonnell DOUGLAS HELICOPTER COMPANY, a Foreign Corporation, Defendant-Appellee. (Two Cases)
- **Court:** Court of Appeals for the Ninth Circuit
- **Decided:** March 26, 1996
- **Citations:** 79 F.3d 756; 1996 WL 135194
- **Precedential status:** Published
- **Opinion:** Concurring in part by Fletcher
- **Judges:** Fletcher, Kozinski, Trott
- **Cited by:** 134 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9489018

## How later opinions describe it (automated extraction)

- holding that an employee who removed sensitive confidential documents, which he insisted were taken to demonstrate an unlawful employment practice of the company, had not engaged in wholly protected conduct since his copying of the confidential materials interfered with his em…
- finding that plaintiff “rummag[ed] through his supervisor’s desk” and, in a “closed drawer,” found “notes and memoranda about sensitive personnel matters [that] was prominently marked ‘personal/sensitive,’ ” copied the documents and showed them to another employee
- holding that conduct was not protected under ADEA because “O’Day committed a serious breach of trust, not only in rummaging through his supervisor’s office for confidential documents, but also in copying those documents and showing them to a co-worker”
- holding 11 that an employee with a good faith reason to believe his employer is engaged in unlawful 12 discrimination has a legitimate interest in preserving evidence of his employer’s unlawful 13 employment practices
- noting that courts "could hardly require employers in these cases to come forward with proof that 4 they discharged other employees for the precise misconduct at issue (though such evidence would no doubt be helpful to their case), as often the only proof an employer will have…

## Opinion text

FLETCHER, Circuit Judge,
concurring in part and dissenting in part.
I concur in that portion of the majority opinion that reverses the district court’s grant of summary judgment to McDonnell Douglas on the grounds that after-acquired evidence barred O’Day from obtaining any remedy for his employer’s alleged discrimination. I dissent from the remainder of the opinion because it is entirely advisory, substantively wrong, and does violence to our circuit’s precedents.
The district court granted summary judgment in favor of McDonnell Douglas because it reasoned that even if it were assumed that McDonnell Douglas fired O’Day on account of his age, the company would have fired him anyway for wrongfully acquiring and disseminating confidential company information. As the majority recognizes, this analysis was flawed. Under McKennon v. Nashville Banner Publishing, Co., - U.S. -, 115 S.Ct. 879 , 130 L.Ed.2d 852 (1995), after-acquired evidence of an employee’s wrongdoing is not a ground for avoiding liability under the anti-discrimination laws if the employer initially terminated the employee for a discriminatory motive. The evidence’s only benefit to the employer is to limit the extent of the remedy.
Whether McDonnell Douglas terminated O’Day because of his age is an issue that has yet to be litigated. The majority nonetheless determines that if McDonnell Douglas were *765 to be found liable in further proceedings, its damages will be limited because it has proved as a matter of law that it would have terminated O’Day anyway for his snooping. In doing so, the majority concludes that the appropriate standard of proof at the remedy stage is the preponderance of the evidence standard, that there are no genuine issues of material fact regarding whether McDonnell Douglas would have terminated O’Day, and that there are no genuine issues of material fact regarding whether O’Day’s conduct was protected activity. We should not reach any of these issues. If the district court determines (either on summary judgment or after a trial) that McDonnell Douglas did not have discriminatory motives and that the general layoff was not a pretext for discrimination, that will be the end of the case. There will be no remedy stage, and the issues determined by the majority will never be raised.
The most troubling portion of the majority’s advisory opinion is its attempt to decide that the employer prevails at the remedy stage if it proves by a preponderance of the evidence that it would have fired the employee for his misconduct that came to light after the initial firing. The majority departs from the governing precedent of this circuit by incorrectly concluding that an intervening Supreme Court decision has rejected that precedent.
The governing precedent is Nanty v. Barrows Co., 660 F.2d 1327 (9th Cir.1981), which was essentially a straightforward disparate-treatment case at the liability stage. Nanty, an Apache, applied for a job as a furniture delivery truck driver with the Barrows Company. When Nanty arrived at Barrows’ offices to apply, he was told — before providing any information to the company — that the job had been filled. Three days later, the company hired two Caucasian drivers. This court held that Nanty had established a pri-ma facie case of discrimination as required by the first step of the analytic framework established in McDonnell Douglas Corp. v. Green, 411 U.S. 792 , 93 S.Ct. 1817 , 36 L.Ed.2d 668 (1973). Because Barrows “totally failed” to articulate any legitimate, nondiscriminatory reason for rejecting Nanty, his “prima facie showing [was] sufficient to meet his ultimate burden of proving unlawful discrimination”. 660 F.2d at 1332 .
Barrows then argued that Nanty was not as qualified as the drivers it actually hired, so it would not have hired him even if it had not discriminated. Therefore, it argued, it should not be enjoined to hire Nanty despite his proof that Barrows had discriminated. Because Barrows had summarily rejected Nanty before he provided any information to the company, any evidence regarding his qualifications was after-acquired evidence. 660 F.2d at 1332 (“Barrows knew nothing about Nanty at the time of the rejection.”). The court relied on two Ninth Circuit cases, League of United Latin American Citizens v. City of Salinas Fire Dept., 654 F.2d 557 (9th Cir.1981), and Marotta v. Usury, 1 629 F.2d 615 (1980), and one D.C. Circuit case, Day v. Mathews, 2 530 F.2d 1083 (1976), for *766 the proposition that once a plaintiff has proved unlawful discrimination, the employer must show by clear and convincing evidence that the same employment decision would have been made even absent the discrimination. 3 The rationale of these eases is that because the defendant’s “unlawful acts have made it difficult to determine what would have transpired if all parties had acted properly”, 660 F.2d at 1353 (quoting League, 654 F.2d at 559 ), a high burden of proof should be assigned to the wrongdoing defendant.
Price Waterhouse v. Hopkins, 490 U.S. 228 , 109 S.Ct. 1775 , 104 L.Ed.2d 268 (1989), unlike Nanty , was a mixed-motive employment discrimination case. Six members of the Court, in three separate opinions, held that “when a plaintiff ... proves that [illegal discrimination] played a motivating part in an employment decision, the defendant may avoid a finding of liability ... by proving by a preponderance of the evidence that it would have made the same decision” in the absence of the discrimination. Id. at 258, 109 S.Ct. at 1795 (opinion of Brennan, J.). The Court overruled the D.C. Circuit’s holding that the employer must make its showing by clear and convincing evidence in order to avoid liability.
Congress disagreed with the result in Price Waterhouse and enacted Section 107 of the Civil Rights Act of 1991 to change it. 105 Stat. 1071 , 1075-76. That law provided in relevant part that when a plaintiff establishes that illegal discrimination is a motivating factor in an employment decision, an employer’s proof that the same decision would have been made in the absence of discrimination does not absolve the employer of liability but only limits the plaintiffs remedy.
The majority in this case, noting that McKennon did not specify what standard of proof the employer must meet in an after-acquired-evidence case at the remedy stage, looks at both Nanty and Price Waterhouse but chooses the preponderance standard imposed in the latter, reasoning that the clear- and-convincing standard imposed by Nanty has been “thoroughly rejected” by Price Waterhouse. It does so by concluding that Nanty must have been overruled by the holding in Price Waterhouse (a mixed-motive case) that a defendant employer who has been shown to have acted at least in part from an illegally discriminatory motive need only prove by a preponderance of the evidence that the same action would have been taken on the basis of the non-discriminatory motive alone.
The blurring of Nanty and Price Waterhouse leads to mischief. In Price Waterhouse, the defendant argued that its employment decision had actually been made on the basis of multiple motives, and the Court held that if it could prove that, and if one of those actual multiple motives was a legitimate nondiscriminatory one, the defendant could avoid liability. (Of course, after the 1991 amendments, the defendant could only limit the plaintiffs remedies). In Nanty , by contrast, the employer articulated no relevant nondiscriminatory reasons for its employment decision and therefore left the plaintiffs prima facie case on liability unrebutted. The court held that the reasons the employer offered— the applicant’s qualifications — were not relevant because the employer “knew nothing about [them] at the time of the rejection”. 660 F.2d at 1332 . In other words, the evidence of nondiscriminatory motive that the employer offered to justify its decision was *767 irrelevant to liability because that motive could not have motivated the decision. The allegedly legitimate motive was only a post hoe explanation that the employer alleged would have justified the decision. The motive evidence proffered was after acquired, as in our case, as contrasted to Price Waterhouse where the legitimate motive was part of the actual decisional process. In both this case and Nanty , then, “the issue [at the liability phase] is whether either illegal or legal motives, but not both, were the ‘true’ motives behind the decision”. NLRB v. Transportation Management Corp., 462 U.S. 393 , 400 n. 5, 103 S.Ct. 2469 , 2473 n. 5, 76 L.Ed.2d 667 (1983). Thus, Nanty not only survived Price Waterhouse but was in fact never endangered by it, because the two cases addressed different issues in different types of discrimination suits. The Supreme Court in McKennon emphasized that mixed-motive eases are not applicable in the after-acquired evidence context, where “the case comes to [the court] on the express assumption that an unlawful motive was the sole basis for the firing.” McKennon , - U.S. at -, 115 S.Ct. at 885 .
The majority also overlooks the distinction made in Price Waterhouse between the liability and remedy phases. Justice Brennan’s plurality opinion in Price Waterhouse explains why the clear-and-convincing standard applies in the after-acquired-evidence context, where the issue is the proper remedy, while the preponderance standard applies at the liability stage:
It is true, as [the plaintiff] emphasizes, that we have noted the clear distinction between the measure of proof necessary to establish the fact that petitioner had sustained some damage and the measure of proof necessary to enable the jury to fix the amount_ Likewise, an Equal Employment Opportunity Commission (EEOC) regulation does require federal agencies proved to have violated Title VII to show by clear and convincing evidence that an individual employee is not entitled to relief.... And finally, it is true that we have emphasized the importance of make-whole relief for victims of discrimination. ... Yet each of these sources deals with the proper determination of relief rather than with the initial finding of liability. ... Because we have held that, by proving that it would have made the same decision in the absence of discrimination, the employer may avoid a finding of liability altogether and not simply avoid certain equitable relief, these authorities do not help [the plaintiff] to show why we should elevate the standard of proof for an employer in this position.
490 U.S. at 253-54 , 109 S.Ct. at 1792-93 (internal quotations and citations omitted) (emphasis added).
The rationale for elevating the standard in cases such as this one and Nanty , is straightforward. In both mixed-motive eases (Price Waterhouse) and after-acquired-evidence cases (this ease and Nanty), the court is forced to determine what an employer would have done if it had not engaged in illegal discrimination; because it is the employer’s bad act that puts the court to this effort, the employer bears the burden of proof. But in the eases in the latter category, the employer who bears this burden has already been proven to have made an employment decision solely on the basis of an illegally discriminatory motive. The post hoe justifications of what such an employer “would have done” if it had not discriminated are properly viewed with greater suspicion than the actual, legitimate, partial motives of the employer in a mixed-motive case. Therefore, the employer’s burden in an after-acquired-evidence case is higher and should be so. Applying the Nanty standard in this case is the proper course, that is, if we decide the issue at all.
The majority also points out that Congress, in amending Title VII in 1991 to reject the liability analysis of Price Waterhouse, did not disturb that decision’s choice of the preponderance of the evidence standard. Despite some ambiguity, I think that is probably right. What the majority ignores is that the relevant sections of the Civil Rights Act of 1991 specifically addressed the mixed-motive case, not the after-acquired-evidence case; they were a direct response to the Supreme Court’s decision in Price Waterhouse. The report of the House Committee on Education and Labor indicates that the *768 Act was not intended to affect the holding of Price Waterhouse that the employer’s standard of proof in mixed-motive cases is the preponderance of the evidence rather than clear and convincing evidence. H.R.Rep. No. 102-40(I), 102d Cong., 2d Sess., at 45 n. 39 (1991), reprinted, in 1991 U.S.C.C.A.N. 549, 583 n. 39. The report also indicates that Congress intended “to restore the decisional law in effect in many of the federal circuits prior to the decision in Price Waterhouse ”, and one of the decisions cited in the report is Nanty (as well as Ostroff, which followed Nanty). Id. at 48, 46 n. 41, reprinted at 1991 U.S.C.C.A.N. at 586, 584 n. 41. This is completely consistent with the application of the preponderance standard at the liability stage and the application of the clear-and-convincing standard at the remedy stage in after-acquired-evidence cases.
If the issue were properly before the court in this case, I would follow our precedent and impose the clear-and-eonvincing standard. Because the majority reaches out to decide issues that are not before us, and then decides them wrongly, I dissent.
. Marotta appears to be the first case in which the circuit imposed the higher standard of proof. In that case, a Department of Labor employee sued over discrimination in the hiring process for a new position in the department. The Department conceded discrimination at trial, but the district court held that the defendant proved by clear and convincing evidence that the plaintiff would not have been hired for the position even in the absence of discrimination. This court affirmed the judgment for the employer, holding that "[t]he District Court properly insisted that a denial of back pay [the plaintiff had already received, through administrative channels, priority consideration for, and promotion to, a position in the same salary grade as that for which he had not been hired because of the discrimination] required the defendant to establish by 'clear and convincing evidence’ that even in the absence of discrimination the rejected applicant would not have been selected for the open position. We agree in this respect with Day v. Mathews, the decision on which the District Court relied.” Id. at 618 . At least some of the evidence on which the defendant relied appears to have been acquired after it made the employment decision, since it never interviewed the plaintiff for the job although it did consider his written application.
. Day , on which Marotta also relied in imposing the higher standard, involved an HEW employee who, like Marotta, alleged discrimination in the filling of an open position within the department. On appeal, HEW did not contest the district court's finding that it had discriminated by denying Day an opportunity to compete on an equal footing, but it argued that the award of a retroactive promotion and back pay was improper because Day's qualifications were such that he *766 would not have gotten the job even in the absence of discrimination. The court remanded the case, holding that HEW must be given the opportunity to avoid the retroactive promotion and back pay remedies by meeting the burden of proving, by clear and convincing evidence, that Day would not have been selected for the position in the absence of the discrimination. The Day court relied on four Fifth Circuit employment discrimination cases for its holding that the employer must meet its burden by clear and convincing evidence. Baxter v. Savannah Sugar Refining Corp., 495 F.2d 437, 444-45 (5th Cir.), cert. denied, 419 U.S. 1033 , 95 S.Ct. 515 , 42 L.Ed.2d 308 (1974); Pettway v. American Cast Iron Pipe Co., 494 F.2d 211, 259-60 (5th Cir.1974); Johnson v. Goodyear Tire & Rubber Co., 491 F.2d 1364, 1374-80 (5th Cir.1974); and Cooper v. Allen, 467 F.2d 836, 840 (5th Cir.1972).
. Nanty was not the last Ninth Circuit case to follow that precedent, either. Subsequent cases that imposed the higher standard include Jauregui v. Glendale, 852 F.2d 1128, 1136-37 (9th Cir.1988), and Ostroff v. Employment Exchange, Inc., 683 F.2d 302, 304 (9th Cir.1982).

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9489018. Public record. Not legal advice.