Opposition Brief — Gibbs v. Morganite, Inc.

Supreme Court. U.S.

FILED

FEB 2% 2002

No. 01-979

——-~ —4

EEE ——

IN THE

Supreme Court of the United States

JAMES M. GIBBS, JR.,

Petitioner,

V.

MORGANITE INCORPORATED,

Respondent.

On PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COouRT OF APPEALS FOR THE FouRTH CIRCUIT

BRIEF IN OPPOSITION

Grecory P. McGuire

HAYNSWORTH BALDWIN

JOHNSON & Greaves, LLC

P.O. Box 10035

Raleigh, NC 27605-0035

(919) 233-4600

Attorneys for Respondent

172219 ce

COUNSEL PRESS

(800) 274-3321 * (800) 359-6859

i

CORPORATE DISCLOSURE STATEMENT

Morganite Incorporated* is a wholly owned subsidiary

of Morgan Industries, Inc., which is a wholly owned

subsidiary of The Morgan Crucible Company, PLC, a publicly

traded corporation registered with the London Stock

Exchange.

* Morganite Incorporated is incorrectly identified as “Morganite,

Inc.” in the petition.

il

TABLE OF CONTENTS

Page

Corporate Disclosure Statement ................ 1

‘eee OC CIES 6c k6 i cede enkietanueeeees li

Table of Cited Authorities .......cccccsccvccers 1V

Counter Statement of Case ......ccccccccsseene l

A. ProceGurel FEOTY. ons vivesectumecavens |

B. PO oe eiiswaw eee coke eee eee 2

Reason for Denying the Writ .................. 7

I. The First Question Presented By The Petition

Was Not Addressed By The Court Of

POMONA, ods a8 8 <¢0uneepacteeus tke 7

II. The First Question Presented By The Petition

Does Not Raise A Substantial Question

Worthy Of This Court’s Review. ......... 8

III. The Court Of Appeals Did Not Impose

An Additional, Unfair Burden On Petitioner.

Rather, The Court Held That Petitioner Failed

To Produce Evidence That Called Into

Question Morganite’s Legitimate, Non-

Discriminatory Reasons For Terminating

POU, 0.8855 Na ve serine eee 10

iti

Contents

IV. The Court Of Appeals Properly Affirmed The

IV.

District Court’s Ruling That The Statutory

Privilege Under North Carolina General

Statute Section 96-4(t)(5) Precludes

The Introduction Of Testimony From

Petitioner’s Employment Security Com-

mission Hearing. ..-.-----:+++rrrttt tt

The Stricken NCESC Testimony Was

Not Inconsistent With Deposition

TeGMOMY. occ ccrccccccccesscseeseees

CRD icc cccecessecevereveucersserers

Page

14

iv

TABLE OF CITED AUTHORITIES

Page

Cases:

Adickes v. S.H. Kress & Co., 398 U.S. 144(1970) ... 8

Delta Air Lines, Inc. v. August, 450 U.S. 346 (1981)

0c cetn 6 te eben REE K See ns eee 8

EEOC vy. Illinois Dep t of Employment Sec., 995 F.2d

oso fe | ee reer or Sry re e 15

Elrod v. Sears, Roebuck & Co., 939 F.2d 1466

ROG MEE Sesdlbe ars cri sdanee ndheers ces 12, 13

Hartsell v. Duplex Products, Inc., 895 F. Supp. 100

(W.D.N.C. 1995), aff'd, 123 F.3d 766 (4th Cir.

| BEDE EE Ere Pere ee ty we nt nee ae 15,17

Hawkins v. PepsiCo, Inc., 203 F.3d 274 (4th Cir.),

cert. denied, 531 U.S. 875 (2000) ............ 12

Henson v. Liggett Group, Inc., 61 F.3d 270 (4th Cir.

SO ss 6 an ka a ORE cee eee es NO tabu 12

Holder v. City of Raleigh, 867 F.2d 823 (4th Cir.

SEE anh te dlks cad gaits Utena ko mes 12

Pollard v. Rea Magnet Wire Co., 824 F.2d 557

CPA Cains oc dels ee tess ae phases 12

United States v. Cartledge, 928 F.2d 93 (4th Cir.

SUE eb cads bred seeeracendvecers Wareaeers 15

Vv

Cited Authorities

Page

Statutes:

42 U.S.C. § 1981 2... cee eee e eee eeeeeees 1

N.C. Gen. Stat. § 96-14(1) .. 1... ee eee eens 16

N.C. Gen. Stat. § 96-14(2) ...... eee cece eens 16

N.C. Gen. Stat. § 96-14(2)(a) «2... ee eee eee eee 16

N.C. Gen. Stat. § 96-15(C) «1.0... eee erences 15, 16

N.C.GS. § 96-(4)(t)(5) .. eee eee cece errr 14, 16

Rule:

United States Supreme Court Rule 10 ......----- 8

|

COUNTER STATEMENT OF CASE

A. Procedural History.

Petitioner is a former employee of Morganite, filed this

lawsuit on May 10, 1999, in the United States District Court

for the Eastern District of North Carolina. The Complaint

attempted to state claims against Morganite, Inc. and eleven

individual employees of Morganite for (1) unlawful

discriminatory termination on the basis of race under

Title VII of the Civil Rights Act of 1964 and under 42 U.S.C.

§ 1981; (2) unlawful discrimination under the Americans with

Disabilities Act of 1990; (3) unlawful discriminatory failure

to promote on the basis of race and disability; (4) unlawful

retaliatory termination; and (5) a racially hostile work

environment. (/d.).

On June 1, 2000, Morganite filed a Motion for Summary

Judgment with supporting materials.

On July 10, 2000 Petitioner filed a response in

opposition to Morganite’s Motion for Summary Judgment.

Part of Petitioner’s opposition was the Affidavit of James

M. Gibbs, Jr., with attachments that included the transcript

of a hearing held on September 19, 1997, before an

appeals referee of the North Carolina Security Commission

(“NCESC”) regarding Petitioner’s application for

unemployment benefits. On J uly 19, 2000, Morganite filed

a motion to strike certain portions of the Affidavit and to

strike the transcript of the unemployment hearing.

On October 6, 2000, the district court entered a Judgment

and Order granting Morganite’s motion for summary

judgment and granting the motion to strike (Pet. Petition

App. pp. 4a-47a).

2

On July 30, 2001, the Court of Appeals issued an

unpublished per curiam opinion affirming the district court’s

judgment “on the reasoning of the district court” (Pet. Petition

App. pp. la-3a). Petitioner filed a petition for rehearing

with the Court of Appeals. On October 1, 2001, the petition

was denied.

B. Facts.

Morganite is a manufacturer of carbon and commutator

products located in Dunn, North Carolina. Morganite hired

Petitioner in March 1987 as a Tool and Die Maker, Grade C

(JA 212).' Petitioner sharpened dyes and other tools using a

bench grinder (JA 440). Petitioner remained a Tool and

Die Maker, Grade C, throughout the remainder of his

employment (JA 215). Petitioner has variously described his

race as “Black” and as Native American (JA 437-441).

During the ten years that he worked for the Company,

Petitioner was dissatisfied with virtually every aspect of his

employment (JA 469-527). Petitioner frequently was

belligerent, uncooperative and confrontational with his

supervisors (JA 482, 486). Petitioner also frequently refused

requests to work overtime or to work on unscheduled days

(JA 474, 484). Petitioner viewed requests from his

supervisors to work more qv. kly as “harassment” (JA 482).

Petitioner called the Company’s management “slave drivers”

(JA 481).

1. Respondent believes the Petition contains numerous

misstatements of important facts from the proceedings below.

Accordingly, Respondent has attempted to cite to the record below

in support of its factual assertions. References to the Joint Appendix

filed with the Court of Appeals are designated as “JA” followed by a

page reference. References to other materials filed with the Court of

Appeals are designated by the record docket number in the Court of

Appeals’ docket.

3

Despite Petitioner’s perceptions of unfair treatment

and his poor attitude, his job performance evaluations

remained steady and even improved near the end of his

employment (JA 444-466, 531 -532). Additionally, Petitioner

received regular pay increases throughout his employment

(JA 214-15).

Petitioner alleged that he had medical conditions related

to his back and legs that amounted to “disabilities”. He had

surgery on the varicose veins in 1978, nine years before he

became employed with Morganite (JA 168). Petitioner’s

medical records show that he never had any other significant

complaints about the problems with his legs after 1978, |

Petitioner had back Surgery for herniated disk in

May 1988. (JA 173). Petitioner’s medical records show that

he had no significant complaints of back problems again after

1988 (JA 383-435, 533, 544-83).

Despite his complaints about various aches and pains,

Petitioner admitted that he was able to perform his job.

Petitioner characterized his attendance during his last three

years of employment as “excellent” (JA 179),

Petitioner claims that he asked management officials for

reasonable accommodations for his medical conditions.

He alleged that in February 1997, he presented a letter to

Blizzard specifically requesting three accommodations

(JA 203, 436). Petitioner admitted, however, that two of the

three accommodations he requested were essentially

unnecessary since the length of his shift remained 8 hours

and because Morganite aive@dy provided rubber mats for

employees to stand on wiiile working (JA 204-207).

Petitioner claimed that Morganite refused his third requested

4

accommodation; to split his long break into 2 or 3 shorter

breaks. Petitioner admitted, however, that he had 3 daily

breaks and that he could use them to sit or “do whatever [he]

wanted to do” (JA 205).

Morganite disciplined Petitioner several times during his

employment for confrontational, and at times, threatening

behavior. The Company twice reprimanded Petitioner for

refusing to work overtime (JA 474-77). In November 1990,

Morganite reprimanded Petitioner for a confrontation with

Bert Jenkins, Tool Room Supervisor (JA 918-921, 928).

In 1995, David Cooper, General Manager, reprimanded

Petitioner for his behavior in a meeting with Roger Bone,

Production Supervisor, and Russell Lee, Tool Room

Supervisor (JA 489). In January 1996, Bone and Lee

issued Petitioner a final counseling for threatening conduct

Petitioner displayed during a meeting Bone held with

Petitioner to discuss his 1995 performance review

(JA 467, 708, 875-77). In conjunction with this counseling,

Petitioner signed a written “Terms of Continued

Employment” (JA 263-64, 468). The “Terms of Continued

Employment” provided that Petitioner would not “use or

imply any language, acts or behavior of a threatening or

intimidating nature to any employee of Morganite” and

provided that any such conduct would result in termination.

On January 17, 1996, Petitioner signed the “Terms of

Continued Employment” under protest (Jd.).

On March 4, 1997, Mon Vonkchalee, a supervisor, met

with Petitioner to give him a disciplinary counseling for being

late to work on March 3 (JA 310-12, 516-17). During the

meeting, Petitioner told Vonkchalee “I’m tired of this shit”

and “I’m not signing any damn reprimand” (JA 312, 516).

5

Petitioner walked out of Vonkchalee’s office (/d.).

A short time later, Petitioner returned to Vonkchalee’s office

(JA 314-15). During this encounter, Petitioner asked

Vonkchalee “am I the damned one, as usual?” and told him

“the commutators supervisors don’t seem to know a damn

thing about leadership and moral conduct on the job, but

they seem to know everything about the bottom line and how

to screw someone.” (JA 517). After Petitioner’s second tirade,

Vonkchalee crumpled up the written warning and threw it in

the trash can (/d.; JA 795-98). ~

Vonkchalee reported the incidents to Roger Bone.

Bone advised Vonkchalee to review the situation with

Doug Blizzard, Director of Human Resources (JA 798, 801,

808). Vonkchalee discussed the incident with Blizzard

(JA 698-700, 711).

On March 12, 1997, Vonkchalee met with Petitioner and

gave him a second level disciplinary warning for being

tardy on March 3, 1997 (JA 530). Shortly after the meeting,

Petitioner confronted Vonkchalee about the warning (JA 521,

807-810, 852-56). Vonkchalee felt threatened by the

encounter and reported it to Roger Bone and Doug Blizzard

(JA 698, 699-701, 712, 823, 834-35, 842, 852-56). Bone and

Blizzard decided to terminate Petitioner’s employment

(JA 697-700). On March 13, 1997, Morganite terminated

Petitioner’s employment for engaging in intimidating

and threatening conduct towards management employees

(JA 437). Petitioner admitted that Bone and Blizzard

told him “that [he] was discharged for displaying intimidating

and threatening behavior toward management employees”

and for “violating the terms of a 1996 document referred

to as: Regarding Terms of Continued Employment.”

(JA 438,440).

6

Shortly after his termination, Petitioner filed charges of

discrimination with the Equal Employment Opportunity

Commission (JA 437, 438). In conjunction with the charges,

Petitioner filed a sworn Affidavit (JA 439-441). In the

Affidavit, Petitioner conceded that he believed the true reason

for his termination was his “strong willed and outspoken”

personality and not discriminatory bias (/d.).

Petitioner’s theory in this lawsuit was that the alleged

mistreatment he suffered was motivated by the Company’s

disapproval of his relationship with a white woman (JA 19,

233-36, 287-89, 332-33, 346). Petitioner alleges that

sometime in May or early June 1987, David Cooper told him

that employees at the plant disapproved of his relationship

with a Caucasian woman (JA 470-71)? Petitioner claims

Cooper told him to keep a low profile on the relationship,

but that he disregarded Cooper’s request (JA 470).

The subject of Petitioner’s girlfriend was never raised again

by any Morganite official (JA 471-527). Despite this,

Petitioner believed that “everything that happened to [him]

went back to” his alleged conversation with Cooper (JA 233).

It is undisputed that David Cooper was not involved in

the decision to terminate Petitioner (JA 607). Petitioner

admitted he does not even know whether Roger Bone or Doug

Blizzard knew his girlfriend’s race, and he did not remember

ever speaking to either of them about it (JA 373-75).

2. Cooper vehemently denies that he had any such conversation

with Petitioner (JA 615).

j

REASON _FOR DENYING THE WRIT

I, THE FIRST QUESTION PRESENTED BY THE

PETITION WAS NOT ADDRESSED BY THE

COURT OF APPEALS.

Petitioner seeks review of the Court of Appeals’ decision

regarding his claims for retaliation (Pet. Petition p. 13).

He apparently has not sought review of his claims for race

and disability discrimination. Petitioner argues that the Court

of Appeals imposed an improper burden on him at the pretext

Stage of its analysis by requiring him to prove that

Morganite’s employees did not feel threatened by his conduct

(Pet. Petition p. 14). In deciding the retaliation claims,

however, the district court never reached the stage of

addressing whether Morganite’s reason for terminating

Petitioner was a pretext for unlawful retaliation (Pet. Petition

App. pp. 26a-32a). Rather, the court held that Petitioner failed

to establish a “causal link” between his alleged protected

activity and Petitioner’s discharge because: (a) Cooper’s

alleged statement occurred ten years prior to Petitioner’s

discharge, (b) Cooper was not involved in Petitioner’s

discharge, and (c) Petitioner’s threats to report Morganite to

the EEOC and NAACP started over five years prior to his

discharge (/d.). Accordingly, the district court held that

Petitioner failed to establish a prima facie case of retaliation,

and it did not address Petitioner’s evidence of pretext with

regard to the retaliation claims (Pet. Petition App. p. 32a).

Additionally, Petitioner did not make the “improper

burden” argument in the Court of Appeals with regard to his

claims of retaliation (Brief of Appellant, pp. 37a-40a). Rather,

Petitioner argued only that the district court erroneously

concluded that he failed to establish a prima facie case of

8

retaliation (/d.). Since Petitioner failed to raise an argument

regarding pretext in the Court of Appeals, and the Court of

Appeals did not consider the issue, the issue is not properly

before this Court. Youakim v. Miller, 425 U.S. 231, 234

(1976); Adickes v. S.H. Kress & Co., 398 U.S. 144,

147 n.2 (1970) (“Where issues are neither raised before nor

considered by the Court of Appeals, this Court will not

ordinarily consider them.”); Delta Air Lines, Inc. v. August,

450 U.S. 346, 362 (1981) (question presented in petition but

not in the court of appeals is not properly before us).

Il. THE FIRST QUESTION PRESENTED BY THE

PETITION DOES NOT RAISE A SUBSTANTIAL

QUESTION WORTHY OF THIS COURT’S

REVIEW.

The first question presented by the Petition in this matter

amounts to nothing more than a request for this Court to

conduct another de novo review of the district court’s

judgment. The first question does not present the type of issue

that warrants review by the United States Supreme Court.

This Court rightfully exercises its discretion to

review the matters brought before it only for compelling

reasons. Rule 10 of the Rules of the Supreme Court of the

United States provides guidance regarding the types of

questions that might warrant the granting of a writ of

certiorari. None of those types of questions are raised by the

first question in the Petition. Rather, Petitioner seeks another

review of the district court’s order granting summary

judgment. By way of example, Petitioner makes the following

assertions regarding the types of issues on which he

seeks review:

9

Mr. Gibbs forecasted sufficient evidence to

establish a prima facie case of retaliation under

Title VII and [§] 1981... (Pet. Petition p. 13).

To reach this decision, the Court of Appeals

permitted the district court to substitute its view

of the weight of the evidence for the jury’s view

and failed to draw all reasonable inferences in

Mr. Gibbs favor (Pet. Petition p. 15).

The Court did not give sufficient weight to

Mr. Gibbs’ prima facie evidence and evidence of

pretext, and it failed to draw all reasonable

inferences in Mr. Gibbs’ favor (Pet. Petition

p. 19).

These statements show the true nature of the questions

Petitioner raises in the Petition.

The district court properly stated the summary judgment

standard in its decision (Pet. Petition App. pp. 17a-20a).

Petitioner’s real argument is that the district court engaged

in fact finding and failed to view the facts in the light most

favorable to him. This was the thrust of his argument to the

Court of Appeals. His attempt to rehash that argument should

not prompt this Court’s review.

Petitioner also argues that the district court erred

“by incorporating additional subjective standards to the

Piaintiff’s burden of proof” on his retaliation claims

(Pet. Petition p. 13). As noted above, this argument is false

and misleading. The district court dismissed the retaliation

claims solely on the grounds that Petitioner failed to establish

10

a prima facie case (Pet. Petition App. pp. 26a-32a). The court

did not reach nor consider the issue of Morganite’s

non-retaliatory reasons for its actions (/d.).

Rule 10 counsels that “[a] petition for a writ of certiorari

is rarely granted when the asserted error consists of erroneous

factual findings or the misapplication of a properly stated

rule of law.” These are precisely the types of errors upon

which Petitioner seeks review in his first question in the

Petition. The Petition does not raise a substantial question

that warrants this Court’s review and should be denied.

Ill. THE COURT OF APPEALS DID NOT IMPOSE

AN ADDITIONAL, UNFAIR BURDEN ON

PETITIONER. RATHER, THE COURT

HELD THAT PETITIONER FAILED TO

PRODUCE EVIDENCE THAT CALLED INTO

QUESTION MORGANITE’S LEGITIMATE,

NON-DISCRIMINATORY REASONS FOR

TERMINATING PETITIONER.

Although not properly presented by the Petition,

Petitioner argues that the Court of Appeals by adopting the

district court’s reasoning, improperly required him to prove

that Morganite’s managers did not feel threatened by his

conduct in order to raise an issue of pretext.*? Even assuming,

however, that the issue has been presented by the Petition,

the Petitioner’s assertion is incorrect.

3. The district court engaged in the pretext analysis only in

deciding Petitioner’s claims for race discrimination. (Pet. Petition

App. pp. 21 a-26 a). The district court did not reach the pretext issue

in deciding Petitioner’s retaliation claims, which apparently is the

only portion of the district court’s order challenged in the Petition

(Pet. Petition p. 13).

1]

The district court held that Petitioner failed to raise a

genuine issue of fact regarding Morganite’s explanation that

it terminated Petitioner for engaging in threatening conduct.

It did not find as fact that Petitioner made threats nor did it

require Petitioner to prove that the employees did not feel

threatened. The district court held:

Although plaintiff may have made allegations in

the course of these proceedings, which this court

is bound to construe favorably toward him, that

the allegations regarding his threatening and

intimidating behavior were untrue, he has not

presented evidence that Morganite’s asserted

belief in those allegations was unworthy of

credence. Indeed, as evidenced by his affidavit,

plaintiff suggests that he believes that the

allegedly threatening behavior was actually the

reason for his discharge. Accordingly, plaintiff has

not begun to show that defendant’s proffered

reason for his discharge was pretextual as required

by St. Mary's and Reeves, and his discriminatory

discharge claim must fail.

(Pet. Petition App. pp. 25a-26a).

Significantly, Petitioner appears to concede that the

district court properly analyzed the pretext question, stating

in the Petition:

Mr. Gibbs may demonstrate pretext by showing

“either that a discriminatory reason more than

likely motivated the employer’s proffered

explanation or . . . that the employer’s proffered

explanation is unworthy of credence.” Hardy vy.

12

S.F. Phosphates, LC., 185 F.3d 1076 (10th Cir.

1999). The pertinent question to determine pretext

is not whether the employer was right to think the

employee engaged in misconduct, but whether that

belief was genuine or pretextual.” Jd. at 1080.

(Pet. Petition p. 22).

The district court’s analysis of the pretext question was

consistent with the existing precedent in the Fourth Circuit

and other federal circuits. In a case alleging unlawful

motivation, the critical issue is not whether Plaintiff in fact

engaged in threatening conduct, but rather whether the

decision makers had a good faith belief that he engaged in

such conduct. Hawkins v. PepsiCo, Inc., 203 F.3d 274,

280 (4th Cir.), cert. denied, 531 U.S. 875 (2000). The Fourth

Circuit Court of Appeals has held “[a] reason honestly

described but poorly founded is not a pretext, as that term is

used in the law of discrimination.” Holder v. City of Raleigh,

867 F.2d 823, 829 (4th Cir. 1989) [quoting Pollard v. Rea

Magnet Wire Co., 824 F.2d 557, 559 (7th Cir. 1987)];

see also Elrod v. Sears, Roebuck & Co., 939 F.2d 1466, 1470

(11th Cir. 1991). Employers retain the right to make business

decisions, even ill-advised ones, so long as they do not violate

the law. Henson v. Liggett Group, Inc., 61 F.3d 270, 277

(4th Cir. 1995).

The Eleventh Circuit Court of Appeals’ decision in Elrod

v. Sears & Roebuck, is instructive on the burden of

establishing pretext in this type of case. In Elrod, the plaintiff

was discharged for sexually harassing a female employee.

The plaintiff sued Sears alleging that he was discharged

because of his age. At trial, plaintiff attempted to prove he

13

had not harassed anyone. In addressing the correctness of

the company’s proffered reasons for the plaintiff’s discharge,

the Court of Appeals stated that:

Much of Elrod’s proof at trial centered around

whether Elrod was in fact guilty of the sexual

harassment allegations leveled at him by his

former co-workers. We can assume for purposes

of this opinion that the complaining employees

interviewed by Rives were lying through their

teeth. The inquiry of the ADEA is limited to

whether [the management official who made the

termination decision] believed that Elrod was

guilty of harassment, and if so, whether his belief

was the reason behind Elrod’s discharge.

939 F.2d at 1470 (citations and footnote omitted).

Petitioner raised no genuine issue of fact that Bone and

Blizzard did not honestly, and in good faith, rely on

Vonkchalee’s report that Petitioner had threatened

Vonkchalee in deciding to terminate Petitioner. Petitioner

admitted that Bone and Blizzard told him that he was being

terminated for threatening behavior. The notes and

documentation prepared by Vonkchalee and Blizzard at the

time of the incidents in March 1997, reflect the threatening

nature of Petitioner’s conduct and the reasons for terminating

him. Petitioner has offered no evidence that would cal] into

question the legitimacy of Morganite’s belief that Vonkchalee

felt threatened and that it terminated Petitioner based on that

belief. Accordingly, the Court of Appeals properly affirmed

the district court’s order and opinion dismissing Petitioner’s

claim for racially discriminatory termination, and the Petition

should be denied.

14

IV. THE COURT OF APPEALS PROPERLY

AFFIRMED THE DISTRICT COURT’S RULING

THAT THE STATUTORY PRIVILEGE

UNDER NORTH CAROLINA GENERAL STATUTE

SECTION 96-4(t)(5) PRECLUDES THE

INTRODUCTION OF TESTIMONY FROM

PETITIONER’S EMPLOYMENT SECURITY

COMMISSION HEARING.

In opposition to Morganite’s motion for summary

judgment, Petitioner sought to introduce testimony from an

unemployment benefits hearing held before the North

Carolina Employment Security Commission (“NCESC’”).

The district court adopted North Carolina’s statutory privilege

against the use of such testimony in any civil proceedings

and struck the NCESC testimony. The Court of Appeals

adopted the district court’s reasoning and affirmed. Petitioner

asserts that this holding was erroneous because it hampered

Petitioner’s ability to establish pretext in his Title VII claim.

Section 96-4(t)(5) of the North Carolina General Statute

provides as follows:

All letters, reports, communication, or any other

matters, either oral or written, including any

testimony at any hearing, from the employer or

employee to each other or to the Commission or

any of its agents, representatives, or employees,

which letters, reports, or other communication

shall have been written, sent, delivered, or made

in connection with the requirements of the

administration of [Chapter 96 of the North

Carolina General Statutes], shall be absolutely

privileged communication in any civil or criminal

proceedings...

15

A federal court may adopt the state privilege as federal

common law when no controlling federal law on that

issue exists. United States v. Cartledge, 928 F.2d 93, 95-96

(4th Cir. 1991). No controlling federat law exists regarding

the use of testimony from a state unemployment benefits

hearing in a subsequent civil action for discrimination.

EEOC ¥. Illinois Dep t of Employment Sec., 995 F.2d 106,

107 (7th Cir. 1993). In deciding whether to adopt North

Carolina’s statutory privilege, the district court was required

to balance the important state interests behind the privilege

against the countervailing federal interests. Cartledge,

928 F.2d at 96; Hartsell v. Duplex Products, Inc., 895 F. Supp.

100, 102-03 (W.D.N.C. 1995), aff’d, 123 F.3d 766 (4th Cir.

1997).

The Court of Appeals affirmed the district court’s ruling

that the important state interests advanced by North

Carolina’s privilege outweighed the competing federal

interests in this case. The district court correctly noted that

the privilege encourages full disclosure from claimants and

employers and prevents parties from conducting free

discovery before litigation. See Hartsell, 895 F. Supp. at 103

(“ESC hearings do not investigate Title VII allegations, and

ESC participants do not expect their testimony to appear later

in a subsequent federal Title VII proceeding”’).

Contrary to Petitioner’s assertion, the fact that Petitioner

had already initiated his Title VII proceedings by the

time the NCESC hearing was held does not change the

parties’ expectations. An NCESC hearing is held solely to

resolve the question of whether an individual’s employment

was terminated for “misconduct,” “substantial fault” or

“without good cause attributable to the employer” as those

terms are defined in North Carolina’s statute. N.C. Gen. Stat.

16

§§ 96-14(1), (2), and (2)(a). The hearings are not required

to “conform to common law or statutory rules of evidence

or technical or formal rules of procedure.” N.C. Gen. Stat.

§ 96-15(c). Issues and allegations peculiar to federal

employment discrimination laws are not investigated,

evaluated, or discussed in NCESC hearings. The witnesses

in the NCESC hearing had an expectation of privilege

precisely because of the prohibitions contained in N.C.GS.

§ 96-(4)(t)(5) against the use of that testimony in a subsequent

lawsuit. The primary purpose of the privilege is to encourage

full disclosure in a contested unemployment proceeding

without fear that something may later be used against you in

a civil or criminal action. The statutory privilege is aimed in

part at preventing the hearings from becoming full-blown

mini-trials on unrelated civil claims with the consequent

increases in time and expense to the parties and the certain

erosion of the privilege altogether.

In contrast to the important state interests advanced by

the privilege, the competing federal interest is not harmed

by the adoption of the state privilege in federal court.

The district court agreed that the federal government had an

irrefutable interest in enforcing its anti-discrimination laws

and the absence of a federal privilege comparable to the state

privilege effectively promotes the disclosure of probative

evidence in a Title VII suit. Nevertheless, the district court

properly adopted the state privilege in Petitioner’s case

because the probative value of the evidence Petitioner sought

to introduce was very limited. Petitioner deposed the

witnesses who testified at the unemployment hearing and had

access to his own deposition testimony as well. The district

court properly concluded that the NCESC testimony

Petitioner sought to rely on was duplicative of the extensive

deposition testimony taken and that there was no need to

17

abrogate the state’s statutory privilege for such a limited

purpose. As the court in Hartsell noted, “[t]he desire to

impeach witnesses does not outweigh the state interest in

protecting confidential unemployment proceedings.”

Hartsell, 895 F. Supp. at 102.

Finally, Petitioner’s due process is not compromised by

adopting the important state privilege and precluding

Petitioner from introducing the NCESC testimony. As stated

above, Petitioner deposed the witnesses who testified at the

NCESC hearing and had ample opportunity to uncover

impeachment evidence. Petitioner himself contends that

“there exists sufficient evidence in the depositions to support

each claim that is being pursued by [Petitioner]... .”

(Pet. Petition p. 29). Consequently, the district court did not

violate Petitioner’s right of due process and did not abuse its

discretion by striking the NCESC testimony.

The Court of Appeals correctly affirmed the district

court's ruling on the issue of the state privilege, and that

decision does not warrant review by this Court.

IV. THE STRICKEN NCESC TESTIMONY WAS

NOT INCONSISTENT WITH DEPOSITION

TESTIMONY.

Even if the NCESC testimony was improperly stricken

by the court, it made no difference in the result of the case.

The testimony offered by the Morganite officials at the

NCESC hearing was completely consistent both with the

reason given Petitioner for his termination and the testimony

of the same officials in their depositions. The NCESC

testimony would not have aided Petitioner in establishing

pretext.

18

Petitioner admitted that he was told he was terminated

“for violating the terms of a 1996 document” by “displaying

intimidating and threatening behavior toward management

employees” (JA 438, 440).

Blizzard and Vonkchalee testified for Morganite at the

NCESC hearing. Blizzard testified at the hearing as follows:

A: “[Gibbs] was terminated by Roger Bone, our

plant manager on March 13, 1997 for

violating that written agreement that was

signed basically the year before that . . .

Q: And again, on March 13, 1997, when he was

let go for the alleged violation of this

agreement he signed, to whom were those

comments supposedly spoken?

A: Mr. [Mon] Vonkchalee.

(JA 942, 952). This testimony was consistent with Blizzard’s

deposition testimony in this case and Blizzard’s

contemporaneous notes made in March 1997 (JA 698-99,

711, 712). Blizzard testified in his deposition as follows:

Q: Do you recall what he was terminated for?

A: For making threatening comments towards

Mon [Vonkachalee]—toward the supervisor.

(JA 698).

19

In the NCESC hearing, Vonkchalee presented a detailed

account of the threatening conduct that led to Petitioner’s

discharge (JA 956-67). Vonkchalee testified that he felt

threatened and reported the threats to Bone and Blizzard

(JA 960, 962-63, 965-66). Vonkchalee’s testimony in the

NCESC hearing was identical to his deposition testimony

and his written notes made in March 1997 (JA 794-812,

852-56).

Accordingly, even if it had not been struck by the district

court, the NCESC testimony would not have aided Plaintiff

and would not have changed the result in this case.

The Petition should be denied.

CONCLUSION

For the reasons stated herein, the Petition for Writ of

Certiorari should be denied.

Respectfully submitted,

Grecory P. McGuire

HAYNSWORTH BALDWIN

JOHNSON & GREAVES, LLC

P.O. Box 10035

Raleigh; NC 27605-0035

(919) 233-4600

Attorneys for Respondent