Dealership employer can’t keep non-party Ford Motor Co. out of discovery in discrimination suit
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Tuesday, April 3, 2018

Dealership employer can’t keep non-party Ford Motor Co. out of discovery in discrimination suit

By Brandi O. Brown, J.D.

In a discrimination suit by a car dealership employee who was fired upon returning from medical leave—purportedly due to results from a Ford Motor Co. audit while he was out—the dealership could not convince a federal court in Washington to either quash a subpoena he intends to serve on Ford or to issue a protective order. The dealership’s records had been destroyed in a fire and the records to be sought from Ford related to the audit that led to the termination, so were relevant. In addition to denying the employer’s motion, the court awarded attorneys’ fees to the plaintiff (Silcox v. AN/PF Acquisitions Corp. dba AutoNation Ford Bellevue, March 29, 2018, Martinez, R.).

Injured, disabled, fired. In 2015 the plaintiff, the service department manager for the defendant, a car dealership, was injured on the job. He took protected medical leave. He informed the employer that he would need reasonable accommodation, including the use of assistive devices, but when he returned from leave he was fired. He claimed this was because of his age, his use of leave, and his disability.

According to the dealership, though, the employee was fired because an audit that concluded while he was out had found a $25,000 problem in the form of a false claim for warranty work. The dealership is an authorized Ford Motor dealership and receives corporate services from AutoNation, which conducts the audits. Ford charged the employer nearly $25,000 for the problem, advising the dealership that false claim submissions are “a serious violation” of their agreement. The employer, therefore, contended that the employee was fired to protect its relationship with Ford.

Third-party subpoena. After the employee sued his former employer the dealership’s records burned up in a fire. The employee obtained some audit-related documents from the employer, which it had gotten from Ford, but he believed there were more Ford documents necessary to his case. He therefore planned to subpoena Ford for warranty audit reports that were conducted between 2013 and 2016 at three dozen AutoNation Ford dealerships, as well as correspondence related to disciplinary and other remedial efforts related to the audits. The employer moved to quash the subpoena and sought a protective order, arguing the subpoena would “impermissibly intrude” on its positive relationship with Ford.

No standing to quash third-party subpoena. For the court, there was a question on whether the dealership could request that a subpoena on a third party be quashed. “Within the Ninth Circuit there remains doubt as to whether a party has standing to quash a subpoena to a third party on any basis.” Although some courts in the circuit have recognized such a right when there is a privilege issue or some other personal right to the documents, the court concluded that no such circumstance existed here. Under any of the tests articulated by those courts, the employer did not have standing to quash the subpoena proposed by the employee. It did not allege a privilege and it does not have a personal right or privilege with regards to the documents. Those documents belong to Ford and relate to other dealerships.

Dealership’s concern speculative. The employer asserted that the subpoena would “impermissibly intrude” on its positive relationship with Ford and the court agreed that “common sense” would support such a concern. “However,” the court added, “Defendant has already ‘burdened’ Ford by obtaining documents for this lawsuit.” And, even more importantly, there is no way to gauge the extent of that burden. Ford had not provided input to the court about it and the record did not “clearly establish the full extent of the burden on” that party. The employer could not rely on the burden to Ford. Its concerns are speculative—the employer has not discussed the burden with Ford and does not know what it may be. “No matter the text,” the court concluded, “Defendant does not have standing to quash the proposed subpoena” and it was denied.

No protective order. The court also denied the employer’s motion for a protective order. Although the record was not clear as to the scope of the dispute, it explained, there appeared to be two groups of documents involved: documents related to the audit of the employer and documents related to Ford’s audits of other dealerships. With regard to the former, the court had “little issue” concluding that they were discoverable. The employer justified the termination decision with the audit finding and documents possessed by Ford about the audit are both relevant and proportional to the needs of the dispute.

Scarce evidence. As to audits of other dealerships, the question was closer but the result was the same. The employer successfully rebutted the employee’s argument that the documents were relevant because they might show that the other dealerships that received corporate services (including HR services) from Ford via AutoNation had treated service department managers differently when audits revealed a problem. The record did not show that the documents were relevant to demonstrate disparate treatment—the employer’s general manager was the sole decisionmaker and the individual who provided HR support to the employer did not advise the other dealerships. However, the employee did successfully argue that the documents might show that the audit finding related to the employer was either less significant or typical to the findings at the other dealerships. The letter sent by Ford after audits also identifies remedial measures to be taken. The range of findings and scope of measures recommended or required “are arguably relevant to the significance of Defendant’s audit findings.”

Underlying the court’s decision was the fact that the needs of this case were greater than the norm. The evidence appears to be “scarce,” the issues at stake are important, and the amount in controversy was not trivial. And, because Ford was not at court itself, any concerns about burden to it were speculative. The court also granted the employee’s request for attorneys’ fees.

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