Ollis v. HearthStone Homes, Inc.

Citations: 495 F.3d 570; 2007 U.S. App. LEXIS 17895; 89 Empl. Prac. Dec. (CCH) 42,905; 101 Fair Empl. Prac. Cas. (BNA) 109; 2007 WL 2141674Docket: 06-2852

Court: Court of Appeals for the Eighth Circuit; July 27, 2007; Federal Appellate Court

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HearthStone Homes, Inc. appeals the Eighth Circuit's affirmation of the district court's denial of its motion for judgment as a matter of law and the award of attorney fees to Doyle Ollis Jr. Ollis, a former sales associate at HearthStone from August 2000 to October 2003, reported discomfort with the company's practice of Mind Body Energy (MBE) sessions, which he viewed as conflicting with his Christian beliefs. John Smith, the company president, and his wife, Pamela Winters-Smith, managed the MBE program, which included hiring MBE coaches and requiring employees to attend sessions that involved concepts from Buddhism and Hinduism. Ollis communicated his concerns about MBE's cult-like nature to his supervisor, Rachel Langford, who advised him to feign participation to avoid job repercussions. Ollis subsequently expressed his discomfort to both Langford and Smith but felt his complaints were not taken seriously. The district court's decisions regarding the legality of HearthStone's practices and the award of attorney fees were upheld by the appellate court.

Muscle testing, used by Smith for business decisions, involves placing two fingers together while responding to 'yes' or 'no' questions, with fingers remaining together indicating 'yes' and separation indicating 'no.' Smith linked muscle testing to spiritual practices, claiming it revealed that Langford was defending land connected to her ancestors who perished during the Ice Age, leading HearthStone to require her participation in coaching sessions to cleanse negative energy. Additionally, Smith identified negative energy in a subdivision, prompting a group ceremony for energy clearing. 

In September 2003, HearthStone hired Sarah Audas, who soon reported to Risley her discomfort with inappropriate sexual comments from her supervisor, Ollis. Risley escalated the complaint to Winters-Smith, who met with Audas, and subsequently, the management team addressed Ollis. He admitted to crossing boundaries with inappropriate questions and was terminated on October 31, 2003, for poor leadership, with no mention of sexual harassment. Smith indicated that muscle testing influenced the decision to terminate Ollis. 

Ollis filed a lawsuit for religious discrimination and retaliatory discharge, alleging the stated reasons for his termination were pretextual. Although the jury ruled in favor of Ollis, they awarded only nominal damages of $1.00. The district court upheld the verdict, denying HearthStone's motion for judgment as a matter of law, asserting sufficient evidence supported the jury's decision. HearthStone contested the ruling, claiming insufficient evidence for Ollis's discrimination and retaliation claims, but the court emphasized that a jury verdict should not be overturned unless there is a complete lack of supporting evidence. To prove religious discrimination, a plaintiff must demonstrate a bona fide religious belief conflicting with an employment requirement, notify the employer of the conflict, and experience an adverse employment action, after which the employer must provide a legitimate, nondiscriminatory rationale for the action taken.

In Turner v. Gonzales, the burden shifts back to the plaintiff after the employer provides a reason for adverse employment action. Ollis demonstrated a sincere Christian belief conflicting with HearthStone's requirement to attend MBE sessions, which involved affirming beliefs in past lives and engaging in ritual activities. He informed Smith and Langford of this conflict and expressed his disagreement at company meetings, thus establishing a prima facie case of religious discrimination. Ollis was terminated for "poor leadership and lack of judgment," with no mention of a sexual harassment complaint. Evidence suggested HearthStone's reasons for termination could be viewed as pretextual, allowing a jury to find in Ollis's favor for religious discrimination.

For the retaliation claim, Ollis needed to show he engaged in a protected activity, faced an adverse action, and established a causal connection. Testimony indicated MBE sessions conflicted with his beliefs, and his complaints about these sessions could be seen as protected activity. The jury could reasonably conclude his termination was related to these complaints, with HearthStone's reason of sexual harassment being a pretext. Thus, sufficient evidence existed for a jury to find in favor of Ollis on his retaliation claim.

HearthStone also contested the district court's attorney fees award to Ollis, arguing for minimal or no fees. The district court's decision on this matter is reviewed for abuse of discretion.

Ollis was awarded attorney fees despite receiving nominal damages of $1.00, as he was deemed the prevailing party, which is supported by precedent allowing for such awards. The district court's decision to award attorney fees was justified as it calculated the fees based on the reasonable hours worked and the prevailing market rates, in accordance with established case law. Although Ollis did not prove compensatory damages, the district court appropriately reduced the fee award by 25% to reflect this. The appellate court found no abuse of discretion regarding either the award or its amount, affirming the district court's judgment. Additional considerations for the fee award included factors such as the complexity of the case, the skill required, customary fees, and the attorneys' experience and reputation.