Loudon v. K.C. Rehab. Hosp., Inc.

Citation: 339 F. Supp. 3d 1231Docket: Case No. 2:16-cv-02713-HLT

Court: District Court, D. Kansas; September 20, 2018; Federal District Court

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Catherine Loudon, the plaintiff, alleges retaliation claims against her former employer, K.C. Rehabilitation Hospital, Inc., under Title VII of the Civil Rights Act of 1964 and 42 U.S.C. § 1981. The defendant seeks summary judgment, arguing that the plaintiff fails to demonstrate engagement in "protected activity" necessary for her retaliation claims. The court grants summary judgment in favor of the defendant.

Background highlights include that the defendant operates the MidAmerica Rehabilitation Hospital (MARH) in Overland Park, Kansas, where Loudon served as Human Resources Director (HRD) from December 2, 2013, until her termination. Her role involved managing HR operations and ensuring compliance with policies and legal standards, including reporting concerns or harassment.

Upon her hiring, Loudon and CEO Troy DeDecker discussed salary equity issues, which had led to the termination of her predecessor. Loudon identified instances of pay inequity between non-diverse and diverse employees and reported her findings alongside recommendations to DeDecker, who expressed agreement and consideration of her proposals. Despite Loudon’s repeated efforts to address the issue, she sensed DeDecker's annoyance, culminating in a confrontational meeting in October 2014. Nonetheless, DeDecker eventually supported salary adjustments for eight employees, which were implemented.

In February 2015, following a sexual harassment complaint from an employee (referred to as "LO"), Loudon informed DeDecker and initiated an investigation. They discussed potential corrective actions, including the possibility of terminating LO's employment.

Plaintiff asserted that MARH was not permitted to terminate LO for filing a complaint without an investigation. Plaintiff recommended suspending both JK and LO during the investigation to maintain integrity. DeDecker questioned the possibility of suspending only LO, but Plaintiff indicated this could expose MARH to legal risks due to hospital policy requiring the suspension of the alleged harasser. DeDecker appeared displeased with Plaintiff's recommendations and instructed her not to suspend JK or contact Corporate HR regarding LO's complaint. 

On February 12, 2015, after an inconclusive investigation, Plaintiff informed DeDecker, who then queried the potential for terminating LO for allegedly filing a false complaint. Plaintiff declined to recommend termination due to potential legal consequences, prompting DeDecker to express frustration. LO was ultimately not terminated and remained with MARH during DeDecker's tenure. 

Plaintiff felt compelled to contact Corporate HR to advise them of the investigation, despite her concerns about potential repercussions from DeDecker, who merely cautioned her to "be careful." After Plaintiff submitted her written investigation report on February 18, 2015, DeDecker raised concerns about inaccuracies in the report's timeline. Significant discrepancies included incorrect dates regarding LO's complaint and meetings, as well as inconsistencies about work schedules.

Upon being confronted with these inaccuracies, Plaintiff acknowledged errors in her report. Subsequently, MARH terminated Plaintiff's employment effective February 25, 2015.

Plaintiff filed a Charge of Discrimination with the EEOC on December 16, 2015, alleging gender and race discrimination and retaliation, receiving a Notice of Right to Sue on July 20, 2016. She subsequently filed her Complaint on October 18, 2016, claiming retaliation under Title VII and Section 1981. The Defendant has moved for summary judgment on these claims. 

Summary judgment is deemed appropriate when no genuine dispute exists regarding material facts, requiring courts to view evidence favorably towards the non-moving party. Plaintiff contends her termination was retaliatory for several actions: recommending a suspension after a sexual harassment allegation, refusing to terminate an employee following a complaint, disregarding a directive to exclude Corporate HR from an investigation, and reporting salary inequities. The Defendant argues that these actions do not qualify as protected activities and asserts that the termination was due to Plaintiff's mishandling of an investigation, not retaliation.

To establish a prima facie case of retaliation, Plaintiff must demonstrate: 1) engagement in protected activity, 2) suffering a materially adverse employment action, and 3) a causal connection between the two. If established, the burden shifts to the Defendant to provide a legitimate, nondiscriminatory reason for the termination. If the Defendant meets this burden, Plaintiff must then prove that the stated reason is a pretext for retaliation by showing factual inaccuracies or inconsistencies in the Defendant's explanation that would lead a reasonable fact finder to discredit it.

Speculation about pretext is inadequate, as is evidence of employer error or poor judgment; the focus is on whether the employer genuinely believed its stated reasons and acted in good faith (Anderson v. Coors Brewing Co., Swackhammer v. Sprint/United Mgmt. Co.). Regarding retaliation under Title VII, the plaintiff’s termination is recognized as a material adverse employment action, fulfilling the second element of her prima facie case. The dispute lies in whether the plaintiff engaged in protected activity to meet the first element and whether a causal link exists to satisfy the third element. Protected activities are categorized into participation and opposition, with the plaintiff claiming under the opposition clause, which protects employees who express beliefs about unlawful employment practices (Furr v. Ridgewood Surgery, Endoscopy Ctr. LLC).

The "manager rule" states that employees required to report discrimination as part of their duties cannot claim that such actions constitute protected activity, as merely relaying complaints does not equal opposing unlawful practices (Robinson v. Wichita State Univ.). To qualify as protected activity, the plaintiff must have acted outside her role as HR Director by filing or threatening to file an adverse action, aiding other employees in asserting Title VII rights, or engaging in activities perceived as asserting those rights (McKenzie v. Renberg's Inc.).

The plaintiff identifies four actions as protected activity: 1) recommending JK's suspension for sexual harassment; 2) refusing to terminate LO after her complaint; 3) defying a directive not to involve Corporate HR in the investigation; and 4) reporting salary inequities based on gender and race. However, the court found that the recommendation for JK's suspension was part of her HR duties and did not constitute protected activity, as the plaintiff did not "step outside" her role. Her responsibilities included ensuring compliance with company policies and addressing concerns or harassment.

Plaintiff reported LO's complaint to DeDecker and discussed necessary corrective actions. She recommended suspending both JK and LO during the investigation to maintain a "clean case," but DeDecker instructed her not to suspend JK. Plaintiff complied and did not suspend JK or defy DeDecker's directive. Her recommendation did not involve asserting any rights under Title VII; she was merely fulfilling her HR duties. Legal precedent indicates that a human resources manager must do more than perform job responsibilities to engage in protected activity, and Plaintiff did not demonstrate such activity by recommending JK's suspension.

Regarding LO's termination, after Plaintiff reported LO's complaint, DeDecker inquired about terminating LO's employment. Plaintiff advised against this, citing the need for an investigation and potential legal ramifications. LO was not terminated and remained employed throughout DeDecker's tenure. Plaintiff did not assert any rights or threaten actions against the Defendant related to LO's employment, thus failing to show she engaged in protected activity by refusing to recommend LO's termination.

Finally, Plaintiff claims she engaged in protected activity by refusing DeDecker's directive not to involve Corporate HR. After indicating the need to investigate LO's complaint, DeDecker instructed her not to contact Corporate HR. However, Plaintiff later contacted Corporate HR to inform them of the investigation, anticipating that LO might reach out to them. This action was also part of her HR duties and was not aimed at opposing discrimination, thus not constituting protected activity.

Plaintiff's claim of engaging in protected activity under Title VII by reporting salary inequities is rejected. Evidence indicates that during her initial employment weeks, DeDecker tasked Plaintiff with reviewing compensation for equity issues. She identified gender and race disparities, reported them to DeDecker, and made recommendations. Despite her feeling that DeDecker was annoyed by her follow-ups, he acknowledged her efforts and forwarded her proposals for salary adjustments, which were eventually implemented. This action was deemed part of her job responsibilities, not an assertion of rights against the Defendant.

Furthermore, Plaintiff's claim fails to establish a prima facie case for discrimination. Even if she could establish such a case, Defendant provided a legitimate, nondiscriminatory reason for her termination—her mishandling and dishonesty during a sexual harassment investigation. Plaintiff argues inconsistencies in Defendant's rationale, particularly regarding DeDecker’s explanations, and disputes the assertion that she was dishonest. However, the evidence shows consistent concerns from Defendant regarding Plaintiff’s report, which she ultimately admitted was inaccurate, leading to her termination. Defendant was justified in its decision based on its business judgment, and Plaintiff’s claims of pretext are deemed insufficient, as any inconsistencies she identified are too minor to suggest pretext. Summary judgment is deemed appropriate.

In evaluating the plaintiff's claims for retaliation under Title VII and Section 1981, the court emphasizes that while inferences favoring the plaintiff are considered, only reasonable inferences need to be evaluated. The plaintiff failed to demonstrate that the defendant's reasons for termination were factually false or lacked credibility. Consequently, summary judgment is granted on the Title VII retaliation claim. 

Regarding the Section 1981 claim, the court notes that it follows the same McDonnell Douglas burden-shifting framework as Title VII. The plaintiff claims her termination followed her concerns about salary inequity based on race. However, the court finds that the plaintiff abandoned this claim by not addressing the defendant's arguments for summary judgment. Furthermore, even if the claim had been addressed, the plaintiff failed to establish a prima facie case for retaliation, as her actions did not constitute protected activity. The court concludes that summary judgment is warranted for both retaliation claims, thus granting the defendant's motion for summary judgment. 

The court also references the uncontroverted material facts presented by the defendant and notes a disagreement between the parties about the implications of a Supreme Court ruling related to the manager rule in the circuit.

In Crawford, the Supreme Court defined opposing unlawful employment actions under Title VII as resisting or confronting such actions. However, there is a division among circuits regarding Crawford's influence on the manager rule. The Tenth Circuit has not directly addressed this issue post-Crawford, and it remains unclear how Crawford's standard aligns with the preexisting McKenzie rule for retaliation claims. Nevertheless, the Tenth Circuit stated that for an employee to engage in protected opposition, they must step outside their role as a representative of the company—this includes filing or threatening to file adverse actions, assisting other employees in asserting Title VII rights, or engaging in activities perceived as asserting those rights. The manager rule, as established in McKenzie and reaffirmed in Weeks, is upheld in this Circuit. The plaintiff's claims lack clarity regarding the basis for her Section 1981 retaliation claim. While she specifies that her claim pertains to opposing race-based salary inequities, any reliance on allegations unrelated to race discrimination fails as a matter of law, following precedents that indicate Section 1981 does not encompass sex discrimination claims.