By Brandi O. Brown, J.D.
Answering an open question in the circuit, the Second Circuit ruled that the “motivating factor” causation standard was the appropriate standard to apply in claims brought by an employee who alleged she was retaliated against for exercising her FMLA rights. The appeals court vacated the adverse verdict of a jury that had been instructed to apply “but for” causation and remanded the case for a new trial. It also ruled that the district abused its discretion by admitting evidence that the employee had invoked her Fifth Amendment privilege during a deposition and permitting an adverse inference to be drawn on that basis (Woods v. START Treatment & Recovery Centers, Inc., July 19, 2017, Hall, P.).
Two stories, same ending. In May 2012, a substance abuse counselor was fired by her employer, a nonprofit that operates clinics that provide treatment to narcotic-addicted patients. How that termination came to pass, however, was a tale told very differently by the parties. According to the employee, the problems began in February 2011 when she approached HR about taking FMLA leave because of her medical conditions, which included severe anemia. She alleged that she cancelled that request because the Clinical Director, her direct supervisor, asked her to. In August, however, she was hospitalized for almost a week because of her condition. A few months later she alleged she attempted to take leave again but was told that she could not because she was on probation. Then, in April of 2012, she was hospitalized again for seven days. A few weeks after she returned she was fired.
According to the employer, however, the road to the employee’s termination started with new patient counseling documentation requirements that presented an insurmountable obstacle for the employee. Although the employee received a satisfactory performance review in July 2011, the employer contended that the employee’s performance struggles relating to the new documentation had begun that March. The employee was offered additional training but nevertheless continued to struggle and received warning memos in April and June. By August of 2011 her performance improved and she received a pay raise, but the employer contended that it later slipped again, and she received additional warning memos in November, December, and the following February—her documentation completion rate was only 28 percent, while other counselors were achieving 90 percent or more. By March 2012 she was placed on a 90-day probation and in May she was fired.
Jury trial. The employee sued, alleging both interference and retaliation under the FMLA. She was deposed, discovery was completed, and ultimately the matter went before a jury. Upon a motion in limine by the employer, however, the court had ruled that jurors would be permitted to presume, based on the employee’s invocation of the Fifth Amendment during her deposition concerning questions about prior alleged wrongdoing, that she would have answered those questions in the affirmative. The court also ruled that the causation standard to be applied to the retaliation claim was “but for” causation, rather than “motivating factor” causation. The jury was instructed on those matters and, after a short deliberation, it returned a verdict in favor of the employer. The employee appealed.
‘Interference’ source of claim. In considering causation, the court first considered the source for a claim that an employee was fired because she had exercised FMLA rights. Of the two sources considered by the court, 29 U.S.C. sec. 2615(a)(1) and 29 U.S.C. sec. 2615(a)(2), the court reasoned that the retaliation claim made here grew out of sec. 2615(a)(1), which makes it unlawful for employers “to interfere with, restrain, or deny the exercise of or the attempt to exercise, any right provided under this subchapter.” This conclusion was supported by the plain statutory language, the court explained, under which firing an employee for exercising FMLA rights is “certainly ‘interfere[nce]’ with or ‘restrain[t]’ of those rights.” It was also consistent with the statutory text of section 2615(a)(2), which prohibits adverse employment actions taken against employees who oppose unlawful practices. “Being fired for taking FMLA leave” the court reasoned “cannot easily be described as ‘opposing any practice made unlawful’ by the FMLA.” This interpretation also comports with Labor Department rules.
Wrong standard applied. Having determined that section 2615(a)(1) was the appropriate source for the claim, the court explained that this led inexorably to the conclusion that the district court’s analysis was incorrect. The district court’s analysis focused on section 2615(a)(2), and it had concluded that a “but for” causation standard applied to that provision. Because the district court’s analysis was based on the wrong statutory source for the employee’s claim, it was unnecessary to decide whether the district court had been right as to the standard applicable to 2615(a)(2).
But the proper standard for claims under 2615(a)(1) was the “motivating factor” standard. The Department of Labor’s regulation set forth the lesser causation standard and it was due Chevron deference, said the appeals court. Because the evidence was not so overwhelming that it would “render the erroneous instruction harmless” the court concluded that the failure to give the proper instruction, combined with the erroneous admission of the adverse inference, discussed below, had resulted in impermissible prejudice.
Prejudicial evidence and inference. The adverse inference instruction, based on the employee’s invocation of her Fifth Amendment privilege during her deposition, also was erroneous. The employee was asked about a prior incident in which she had been accused of some wrongdoing; specifically, she was asked a series of questions about whether she had been accused of criminal conduct, lying, or fabrication. Most of the questions, said the appeals court, were merely whether she had been accused of something, and even if her answers would have been “yes,” accusations have little, if any, probative value because the innocent and guilty alike can be accused of wrongdoing. Without more, accusations do not “impeach the integrity or impair the credibility of a witness.”
As such, the district court failed to consider whether the inference was relevant, reliable, and not unduly prejudicial. Not only did the district court fail to consider whether there was any probative value as to accusations that had been made, the district court failed to apply Federal Rule of Evidence 609(a)(2) in determining whether to admit information related to questions regarding convictions (it must be a felony or include elements of dishonesty or a false statement). Here, the appeals court found it unclear what crime, if any, the employee had been convicted of, since there was a reference only to “disorderly conduct,” which the court found not necessarily dishonest. The district court had also failed to engage in the required Rule 403 analysis of unfair prejudice vs. probative value and, doing so itself, the Second Circuit concluded that the unfair prejudice the employee experienced “substantially outweighed the minimal, if not immaterial, probative value of” her Fifth Amendment invocation.
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