Neoma Shafer, Judith Ann Parks v. Army & Air Force Exchange Service United States Department of Defense
Docket: 03-10074, 03-10220
Court: Court of Appeals for the Fifth Circuit; August 26, 2004; Federal Appellate Court
Judith Ann Parks, the Plaintiff-Appellee, was awarded over $1,000,000 in compensatory damages and attorneys' fees by the district court, which relied on a report from a special master. A key issue in the case was whether the special master had exceeded his authority by addressing claims from a separate lawsuit not formally referred to him. The Court of Appeals determined that the special master indeed overstepped by considering these claims, leading to a reversible error in the district court's adoption of his recommendations. Consequently, the judgment in favor of Parks regarding those claims was reversed.
The dispute originates from a Title VII sex discrimination suit against the Army and Air Force Exchange Service (AAFES) that began in 1976. Although a settlement was reached in 1987, individual claims from certain AAFES employees, including Parks, continued. Parks's claims were eventually referred to a special master, who recommended various forms of relief, including back pay and promotions; this recommendation was adopted by the district court in January 1988 without appeal. However, Parks faced further workplace discrimination and retaliation starting in 1993. In one incident, she declined a position believed to be lateral, only for it to be reclassified as a higher pay grade after her rejection, which she argues was a deliberate act by AAFES.
Parks alleged ongoing discrimination and retaliation from AAFES in 1994, evidenced by a poor rating on her Performance Evaluation Report (PER), specifically in the "diamond" section assessing promotion potential, which she claimed was intentionally low to facilitate the promotion of male colleagues. In 1994, three men were promoted to UA15, while Parks was not. In May 1995, after years of conflict, Parks accepted an early retirement offer due to budget cuts but later argued she was constructively discharged due to persistent discrimination and the realization that her low ratings would hinder future promotions. She had filed multiple complaints with AAFES's internal EEO office from April 1994 to May 1995, and in June 1994, she initiated a motion to hold AAFES in contempt of a 1988 judgment. In her motion, Parks claimed AAFES failed to correct her personnel records, provide her priority placement in a suitable UA14 position, and retaliated by denying her promotions and giving poor evaluations. She requested the court to hold AAFES in contempt, retroactively promote her to UA15, and award back pay and damages. The district court appointed a special master to review her contempt motion, specifically addressing AAFES's alleged failures and retaliation. In August 1995, Parks filed a separate Title VII complaint, Parks v. Perry, citing three specific incidents of discrimination and retaliation, and requested that it be joined with her pending contempt motion while asserting that her claims of contempt remained unaffected by this new lawsuit. Her attorney indicated that the additional action was taken to ensure comprehensive legal coverage.
Parks asserts that Judge Buchmeyer consolidated Parks v. Perry with a contempt motion and referred it to the special master, but there is no formal record of this action. The district court docket indicates that Parks v. Perry was reassigned to Judge Buchmeyer on September 26, 1995, and closed two days later with a vague entry stating, "Case closed per chambers." Notably, no formal Rule 42(a) order consolidating the cases or amending the Rule 53 order to include the contempt motion was entered. Confusion regarding the case status persisted, leading to discussions among the parties and the special master in January 1996. Parks's attorney communicated that a clerk had informed them in October 1995 that Parks v. Perry was administratively closed because its claims were being addressed in Shafer. The special master confirmed this, stating that all claims would be handled by him and that AAFES was not required to respond to Parks v. Perry. This declaration did not clarify the parties' differing interpretations; Parks believed the cases were consolidated, while AAFES thought Parks v. Perry was suspended pending the contempt motion's resolution. Both parties remained unaware of each other's interpretations until later, highlighting the ambiguity created by the absence of formal consolidation or referral documents, leading them to proceed with the contempt suit under differing assumptions.
Parks expanded her contempt motion to include claims of retaliation and constructive discharge. In April and May 1996, a master held evidentiary hearings with testimony from over thirty witnesses. In December 1998, the master issued an eighty-page report recommending several actions: 1) AAFES was found in contempt of court for not updating personnel records, resulting in a $10,000 award to Parks; 2) AAFES discriminated against Parks in hiring for a position, leading to back pay and increased retirement benefits; 3) AAFES retaliated against Parks for her EEO complaints, entitling her to $52,000; 4) Parks was constructively discharged, warranting front pay until her scheduled retirement; and 5) AAFES should have its personnel policies reviewed by an outside agency, which Parks had not requested.
In 2000, the district judge adopted the master's recommendations, awarding Parks $315,098 in front pay, back pay, and compensatory relief, along with increased retirement benefits valued over $600,000 and over $400,000 in attorneys' fees. AAFES appealed, leading to a vacate and remand due to the judge's lack of review of the hearing record. Upon remand, the district court again adopted the master's recommendations but AAFES appealed once more, arguing that the Parks v. Perry claims were not properly before the special master and questioning the sufficiency of evidence for the remaining contempt claims.
The appeal raised complex issues regarding whether the cases were properly consolidated and referred to the special master. Notably, there was no formal record of consolidation or referral, which prejudiced AAFES by misleading them about the claims being adjudicated. This confusion led AAFES to forfeit rights, such as the right to a jury trial in the Parks v. Perry claims, due to the inadequate notice provided by the district court.
The district court's failure to clearly define the claims before the special master led to confusion in his report, where he did not properly distinguish between the two types of claims. This resulted in the application of an incorrect legal standard, particularly in analyzing claims related to Parks v. Perry, where the special master treated them as part of the same suit without recognizing their distinct legal identities. The Supreme Court and lower courts have emphasized the need to keep consolidated cases separate to avoid infringing on parties' rights. The special master’s misapplication of the standard of proof for Parks' retaliation claims—using the preponderance of the evidence standard instead of the required clear and convincing evidence for contempt claims—deprived AAFES of substantial rights. Additionally, the district court did not properly notify AAFES about the consolidation and referral of Parks v. Perry to the special master, violating federal rules which require notice and an opportunity to object. This lack of proper procedure resulted in significant errors, leading to the conclusion that AAFES had been unfairly deprived of its rights. Consequently, the district court's judgment regarding claims in the Parks v. Perry case is reversed, specifically regarding the allegation of discrimination against AAFES in selecting McFarland for the UA15 position.
The district court's judgment regarding AAFES's discrimination against Parks has been reversed, but four aspects remain intact. These include: 1) AAFES's retaliation against Parks for filing contempt and EEO complaints, resulting in compensatory damages; 2) the retaliation causing Parks's constructive discharge, warranting compensatory damages, back pay, front pay, and benefits; 3) a $10,000 fine for AAFES's failure to update Parks' personnel records; and 4) a requirement for AAFES to undergo an external audit of its personnel policies.
The case is treated as a contempt action, as the special master found AAFES in contempt for manipulating Parks's performance evaluations to hinder her promotion, recommending $52,000 in compensatory damages. The standard for civil contempt requires "clear and convincing" evidence that AAFES violated a specific court order. Although the district court typically reviews factual findings for clear error, the incorrect standard applied by the special master necessitates a de novo review.
Under Title VII, a retaliation claim requires proving: 1) engagement in protected EEO activity; 2) suffering an adverse employment action; and 3) a causal connection between the two. The special master found sufficient evidence for these claims; however, upon de novo review, it was determined that Parks failed to establish the causal connection. The basis for the retaliation claim stemmed from multiple reprimands from her supervisor, Tom Saga, for various workplace behaviors, ultimately affecting her performance rating and promotional opportunities.
Parks did not dispute AAFES's claims regarding her behavior at trial but argued that Saga used this as a pretext for retaliation. She provided evidence indicating that she was reprimanded for actions that similarly situated employees were not. However, she lacked substantial evidence linking these reprimands to any protected activities. Specifically, she failed to demonstrate that Saga harbored animus against her or was aware of her Equal Employment Opportunity (EEO) claims when he allegedly initiated a campaign of harassment and retaliation. The evidence indicated that Saga only learned of her EEO filings in September 1994, after which there was no significant change in his treatment of her, apart from one additional reprimand in November for taking an unauthorized extended lunch. While Saga's later decision to give Parks a mediocre performance rating occurred after he became aware of her EEO claims, it was largely based on her disciplinary history prior to that awareness. The evidence presented did not convincingly establish a causal link between Saga's actions and Parks's protected activities, leading to the conclusion that the special master's finding of retaliation was unsupported. Consequently, the findings of constructive discharge were also reversed.
Furthermore, the special master found AAFES in contempt for failing to update personnel records and recommended a $10,000 award to Parks as costs, which the district court adopted. AAFES argued that this award constituted an improper criminal contempt sanction, which was upheld. It was determined that the fine was neither compensatory nor coercive, failing to meet the criteria for civil contempt. Since the fine exceeded the $1,000 limit for criminal contempt fines under 42 U.S.C. 2000h and lacked the necessary procedural protections, the district court's award of $10,000 to Parks was also reversed.
An outside agency was recommended to study AAFES' personnel policies based on findings regarding its employment practices, a suggestion adopted by the district court. AAFES argued that Parks, who had retired, lacked standing to seek an audit, leading to a jurisdictional issue for the court. The court agreed, citing *Armstrong v. Turner Industries, Inc.*, which states that a plaintiff cannot seek injunctive relief without demonstrating a risk of future harm or representing a class at risk of discrimination. Parks acknowledged that the audit would not benefit her and did not seek class-wide relief, which was proposed by the special master. Consequently, the court found Parks lacked standing for injunctive relief and reversed the order for the audit.
Additionally, the district court had deemed Parks the prevailing party and awarded over $400,000 in attorney fees. However, following the reversal of the district court's judgment, Parks was no longer considered a prevailing party, leading to the reversal of the attorney fee award as well. The district court had adopted the special master’s findings, which included claims of discrimination against Parks, retaliation, constructive discharge, and contempt for not updating personnel records. However, the appellate ruling determined that the special master's findings were erroneous, lacking sufficient evidence to support claims of retaliation or constructive discharge. Thus, the appellate court reversed the entire district court judgment and rendered judgment for AAFES.
The court reversed and rendered its decision regarding AAFES's awareness of the special master's belief that two cases were before him. AAFES consistently reminded the master that the proceedings were contempt-related, asserting that the special master lacked jurisdiction over Parks' discrimination claims, as the relevant judgment only addressed retaliation. Parks contested AAFES's claim of misunderstanding, suggesting it was an attempt to revisit a lost case. However, the record indicates AAFES maintained its position throughout. Parks referenced AAFES's refusal to pursue EEO complaints due to their involvement in the contempt action, but this was prior to the filing of Parks v. Perry, indicating AAFES was unaware of any consolidation. Consequently, AAFES's lack of objection to the supposed consolidation was due to its unawareness, as no actual consolidation occurred. The appeal noted that AAFES did not invoke its right to a jury trial in Parks v. Perry because it was not adequately notified of any consolidation. Both cases involved retaliation allegations, but the special master's findings were based on events not included in the Parks v. Perry complaint, which was specifically concerned with the broader anti-retaliation provisions of a previous judgment against AAFES.
Under Title VII, a plaintiff must demonstrate a violation by a preponderance of the evidence. The special master indicated that AAFES likely retaliated against Parks for filing complaints; however, this conclusion relied on a lenient standard of proof, which conflicts with the clear and convincing standard required for such cases. Additionally, the document raises questions about the authority of an Article III judge to nonconsensually refer a Title VII claim to a non-Article III special master, but this issue remains unaddressed as the decision is reversed on other grounds. Only one of the five findings by the special master pertains to the Parks v. Perry case, and it was determined that the earlier alleged retaliation could not be linked to events that occurred years prior. For a constructive discharge claim, a plaintiff must show that working conditions were intolerable. The master's finding of retaliation formed the basis for concluding Parks faced intolerable conditions; however, the lack of clear and convincing evidence of retaliation negates the conclusion of constructive discharge. The claims in Parks v. Perry are dismissed without prejudice, allowing Parks to potentially reopen the case, while the remaining judgment is dismissed with prejudice.
