Employment Law Daily Employer’s business entity change can’t avoid harassment verdict for female pilot
Tuesday, July 12, 2016

Employer’s business entity change can’t avoid harassment verdict for female pilot

By Brandi O. Brown, J.D. An employer—which attempted to escape a jury verdict of over $170,000 in favor of a female pilot it fired three weeks after she complained of harassing treatment by male pilots—could not convince the Sixth Circuit that the lower court's judgment was in error. Although the employer argued that the verdict was incorrect on the merits and that it had been entered against an entity that no longer existed, the appeals court rejected both contentions. The district court's judgment was affirmed (Braun v. Ultimate Jetcharters, LLC, July 8, 2016, Clay, E.). Named the wrong entity. Three weeks after she sent an email complaining about her male counterparts' harassment, the employee was fired by the private jet charter service provider. She filed suit against Ultimate Jetcharters, Inc., alleging retaliation. In Ultimate Jetcharters' answer it admitted that the corporation had been converted to a limited liability company in 2010. The employee did not amend her complaint, but the defendants also did not press the issue and continued to litigate. The employee's state-law claim for retaliation went to jury trial in August 2013. The employee testified that she had called her employer's director of operations on four occasions to complain of harassment and gender-based mistreatment by her male counterparts. After the fourth conversation, she put her concerns in an email, asserting that the behavior was "bordering on harassment" and she did not want it to escalate. She was fired three weeks later by the CEO, who she testified told her it was because of her "[i]nappropriate e-mails" and her off-duty conduct. At the close of the employee's case in chief, the employer moved for judgment as a matter of law, which was denied. Jury verdict in plaintiff's favor. At trial the operations director asserted that the employee had been fired because of policy violations. He stated that he "[a]bsolutely" provided input on the termination decision. The CEO also testified that he was aware of the employee's complaints at the time. Before the case was submitted to the jury, the employer renewed its motion but without providing additional support, stating only that it was to protect the record. The court denied the motion and the jury returned a verdict in the employee's favor, awarding her over $70,000 in compensatory damages and $100,000 in punitive damages. The court then denied the employer’s renewed motion for JMOL or for a new trial and awarded the employee attorneys’ fees. The employer appealed. Rule 60 amendment allowed. In the meantime, when the employee attempted to collect on her judgment she received a letter from Ultimate Jetcharters, Inc., stating that the business she had sued was closed and without assets. It stated that, even so, the CEO of Ultimate Jetcharters, LLC, wanted to settle and offered her $125,000. The employee then filed a motion to correct the judgment under Rule 60(a), which was granted. A new final judgment listing Ultimate Jetcharters, LLC, was issued. The court's order held that prosecution of the case against the corporation rather than the LLC was a clerical error. It also added: "Under these circumstances, to permit Ultimate Jetcharters, Inc., to roll the dice at trial and then hide behind a change in corporate structure when it comes time to collect on the judgment would make a mockery of the Court’s proceedings." The employer filed an amended notice of appeal. Amendment was proper. With regard to the Rule 60 motion to correct the judgment, the appeals court agreed with the lower court, comparing the case to circumstances underlying the Second Circuit's decision in Fluoro Electric Corp. v. Branford Associates. "Even a cursory review of the record" indicated that everyone, including the parties, the judge, and the jury, knew that the employee's suit was against her former employer, "regardless of that entity's name or legal structure." The case was litigated as if she had properly named the entity and there was no reason for the court to believe that the "trial would have looked any different had the misnomer been corrected earlier in the proceedings." Furthermore, the employer's witnesses and attorney were "complicit" in the misnomer, and the court agreed with the district court's assessment of the situation. This was particularly so in light of the "generous settlement" offer—the court expressed skepticism that the employer would have made such an offer if it "genuinely believed itself to be a victim of circumstance, or that it would be deprived of due process by virtue of an amendment to the judgment." Protected activity. Noting that in all likelihood the employer's arguments on the merits were not properly preserved, the appeals court, like the district court, nevertheless considered the employer's arguments. The employer argued that the employee's complaints did not constitute protected activity, but the appeals court disagreed. She testified that during each of the four phone calls, she explicitly conveyed her belief that the mistreatment was based on the fact that she was a female. She testified that during the last call she told the director: "This is discrimination. This is harassment. [Rossi and Wells] are only doing this because they do not like to fly with women." Her "Cease and Desist!" email stated twice that she believed the conduct was nearing "harassment." Together, the calls and email were more than sufficient evidence of a legally valid complaint and established that the employer should have understood she was complaining of unlawful discrimination. Causation and pretext. There was also sufficient evidence that the employer was aware of that protected activity—the employee complained to the director, who testified that he provided input in the discharge decision. The CEO also testified that he was aware of the complaints but did not believe the behavior was actually harassment. There was also sufficient evidence of causation, which included the short three-week gap between the email and her termination. The employee also established pretext. She testified that her alleged violations were not what actually motivated her discharge and that, instead, she was told it was for "[i]nappropriate e-mails" and her off-duty conduct. She also proffered evidence that the alleged violations were not sufficient to cause her termination because they were commonplace among other male workers who were not punished.

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