Mallory Beard v. AAA MI

Filing

OPINION filed : The district court is AFFIRMED in all respects, decision not for publication. David W. McKeague (AUTHORING) and Raymond M. Kethledge, Circuit Judges; and William O. Bertelsman, Senior United States District Judge for the Eastern District of Kentucky, sitting by designation.

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NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 14a0868n.06
No. 14-1294

FILED

UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT

Nov 19, 2014
DEBORAH S. HUNT, Clerk

MALLORY BEARD,
Plaintiff-Appellant,
v.
AAA OF MICHIGAN d/b/a THE AUTO
CLUB GROUP
Defendant-Appellee.

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ON APPEAL FROM THE UNITED
STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF MICHIGAN

BEFORE: McKEAGUE and KETHLEDGE, Circuit Judges; BERTELSMAN, District
Judge.*
McKeague, Circuit Judge. Mallory Beard sold life insurance for the Auto Club
Insurance Association (“Auto Club”).1 As it turns out, Beard was excellent at selling life
insurance but not at managing sales agents. Once promoted to Life Sales Manager, Beard began
ruffling feathers with his “dictatorial” and “belittling” leadership style. Complaints from sales
agents streamed in, and Beard was eventually terminated, but not before accusing Auto Club of
racial discrimination. At trial, Beard failed to prove his allegation that discrimination—rather
than his negative feedback—was the “but for” cause of his termination. Accordingly, we affirm
the directed verdict in favor of Auto Club on Beard’s Title VII and state-law retaliation claims.

* The Honorable William O. Bertelsman, Senior United States District Judge for the
Eastern District of Kentucky, sitting by designation.
1
In its brief, the appellee notes that the caption to this appeal is incorrect and the official
name of the appellee is “Auto Club Insurance Association” or “Auto Club.” This opinion refers
to the appellee as “Auto Club.”

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I.
Beard, an African-American male, began working for Auto Club in 2006 as a life
insurance sales agent.

Beard quickly established himself and received several promotions,

eventually landing the position of Life Sales Manager in April 2008.

In that role, Beard

managed a group of 20 to 30 sales agents, trained new sales agents, and motivated the agents to
increase sales.
Beard’s troubles began shortly after his promotion when several of Beard’s agents began
complaining about his management style. One agent described Beard’s attempts to improve her
sales performance as “dictatorial” and “belittling.” Three agents accused Beard of treating them
like children and chiding them for not being team players. Meanwhile, other agents complained
about Beard’s training seminars. Specifically, they complained that bathroom breaks had to be
authorized and that Beard often made inappropriate comments during the seminars, including
telling agents to “use your bonus to take your wife and/or mistress out to dinner.”
Beard’s then-supervisor, Craig Huffman, memorialized these complaints in an April 2009
memorandum. The memorandum urged Beard to improve his leadership style while speaking
highly of Beard’s sales performance: “Combine a changed leadership approach with your already
demonstrated good production, and your unit will be meeting expectations.” (Id.) Huffman met
with Beard on April 29 to discuss the memorandum, and the two agreed on ways Beard could
address the criticisms. Beard also suggested that the agents were following their own agendas
instead of admitting their own failures. (R. 90-3, Page ID # 4396.)
In July 2009, Huffman gave Beard his midyear review. Like the earlier memorandum,
the midyear review praised Beard’s sales performance while urging Beard to improve his
leadership. Huffman reminded Beard, “You still have not galvanized all individuals in your

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team into a mutually supporting element” and suggested that Beard get the senior agents “on
‘your side’ and keep them close” by showing them respect. (R. 90-1, Page ID # 4025.)
Tony Welsh replaced Huffman as Beard’s supervisor in late 2009, and the complaints did
not stop. Welsh documented the new complaints in Beard’s July 2010 midyear review. The
review included complaints about Beard’s “unprofessional and accusatory” tone with two agents,
his “intimidating and retaliatory” treatment of another agent, and his miscommunications
regarding quarterly bonuses and scheduling meetings. The review stated in no uncertain terms:
Mallory your communication to others is an ongoing issue that has caused discord
and distraction from the business of selling life insurance and must be resolved. It
has a direct impact on your future consideration for career advancement and
undermines your leadership role. (R. 90-1, Page ID # 4036.)
Welsh met with Beard in July 2010 to discuss the review. Michael John, Welsh’s
replacement, also attended the meeting.

At the meeting, Beard accused Auto Club of

discrimination, telling Welsh and John that the complaints against him were racially motivated.
According to Beard, sometime after this meeting, John confronted Beard in a hallway, yelling at
him and getting “right up in [Beard’s] face.” (R. 69, Page ID # 2986.) Beard reported the
conduct to Pam Porter in Human Resources.
The July 2010 review did not appear to change Beard’s leadership style or lower the
number of complaints against Beard. As Beard’s supervisor, John began receiving complaints
similar to those Welsh and Huffman had received. Two altercations, both in January 2011,
directly preceded Beard’s termination.
That month, Floyd Wells, a new sales agent, complained that Beard approached him and
accused him in front of his coworkers of being disrespectful. During the confrontation, Wells
explained that he did not want to work under Beard because he had heard negative reviews of

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Beard’s management. According to Wells, Beard then made disparaging comments of other
Auto Club managers.
That same month, Mickey Maniachi, an Ann Arbor branch manager, complained of
Beard’s interactions with her. Beard had brought a new sales agent to Maniachi’s branch to see if
the agent would be a good fit.

According to Maniachi, Beard announced he would be

“interviewing” Maniachi, which Maniachi considered to be disrespectful. Beard also asked
Maniachi about branch closings and suggested that another agent would soon be discharged.
Maniachi considered these subjects inappropriate to discuss in front of agents.
John and Welsh investigated the complaints from Maniachi and Wells and, on January
24, 2010, met with Beard to discuss “a consistent pattern involving Mallory over the past two
years with different individuals, in different roles, at different times and locations all with
consistent theme; his management approach and inappropriate comments.” (R. 90-1, Page ID #
1117.) Beard either denied the criticisms or suggested his comments had been misinterpreted.
Welsh responded that the criticisms had been consistent and there were substantial discrepancies
between the complaints and Beard’s version of events. At the end of the meeting, Beard was
suspended. Two days later, Beard was terminated.
Beard appealed the termination and the matter was referred to Porter in Human
Resources. Porter found that “[c]ontrary to his claim that he always dealt with employees in a
professional manner, records in Beard’s personnel file verify he has been counseled repeatedly
by management regarding inappropriate interaction with employees and managers.” (R. 90-1,
Page ID # 4130.) Auto Club denied Beard’s appeal.
On February 17, 2012, Beard sued Auto Club alleging (i) racial discrimination under
Title VII, (ii) retaliation under Title VII, (iii) racial discrimination under Michigan’s civil rights

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statute, the Elliot-Larsen Civil Rights Act (“ELCRA”), and (iv) retaliation under ELCRA. The
case proceeded to trial on all four claims. At the conclusion of Beard’s case, Auto Club moved
for a directed verdict on all claims. The district court granted the motion as to Beard’s retaliation
claims but denied it as to Beard’s discrimination claims.

The jury deliberated on the

discrimination claims and found in favor of Auto Club.
This appeal followed.
II.
Beard raises a host of issues on appeal.

He contends the district court erred by

(1) granting Auto Club’s motion for a directed verdict on Beard’s Title VII retaliation claim,
(2) granting Auto Club’s motion for a directed verdict on Beard’s ELCRA retaliation claim,
(3) instructing the jury on intentional discrimination, (4) refusing to give Beard’s proposed
instructions on “discriminatory intent” and “discriminatory animus,” (5) admitting two of
Beard’s prior employment records, and (6) awarding Auto Club costs for daily transcripts. We
affirm the district court on all six issues.
A. Directed Verdict on Beard’s Title VII Retaliation Claim
We begin with the directed verdict on Beard’s Title VII retaliation claim. In reviewing a
directed verdict, this Court applies the same standard of review as the district court. We review
the proceedings to “determine whether there was sufficient evidence presented to raise a material
issue of fact for the jury.” O’Neill v. Kiledjian, 511 F.2d 511, 513 (6th Cir. 1975). In doing so,
we view the evidence in the light most favorable to the nonmovant. See Galloway v. United
States, 319 U.S. 372, 395 (1943).
At trial, Beard claimed Auto Club terminated him because he accused Auto Club of racial
discrimination at a July 2010 meeting with John and Welsh and in later communications with
Human Resources. The burden fell on Beard to establish a prima facie case of retaliation. A
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prima facie case of retaliation is established when the plaintiff shows that “(1) he … engaged in
protected activity, (2) the employer knew of the exercise of the protected right, (3) an adverse
employment action was subsequently taken against the employee, and (4) there was a causal
connection between the protected activity and the adverse employment action.” Niswander v.
Cincinnati Ins. Co., 529 F.3d 714, 720 (6th Cir. 2008). Specifically, “but for” causation between
the protected activity and the adverse employment action is needed. Univ. of Tex. Sw. Med. Ctr.
v. Nassar, 133 S. Ct. 2517, 2533 (2013). “But for” causation exists where “the unlawful
retaliation would not have occurred in the absence of the alleged wrongful action or actions of
the employer.” Id.
The parties do not dispute that Beard presented sufficient evidence of the first three
elements. We affirm the district court because Beard failed to present sufficient evidence of the
fourth element—that but for his allegations of discrimination, he would not have been
terminated. Beard was well on the path to termination by July 2010 when he first accused Auto
Club of discrimination.

Almost immediately after his promotion, Beard began racking up

complaints about his dictatorial management regime. These complaints—memorialized in an
April 2009 memorandum and July 2009 and July 2010 reviews—simply could not be dismissed
as the grumblings of one unusually disgruntled employee.
Instead, Beard’s termination appears only to be the natural progression of Auto Club’s
preexisting concerns and of the unresolved friction between Beard and his agents. An employee
cannot allege discrimination like a protective amulet when faced with the possibility that his
preexisting disciplinary problems could lead to his termination. Likewise, an employer is not
bound to cease all investigation of an employee merely because the employee alleges
discrimination. See Hervey v. Cnty. of Koochiching, 527 F.3d 711, 723 (8th Cir. 2008). Even

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without alleging discrimination, Beard still would have engaged in the same conduct that directly
preceded his termination; he still would have accused Wells of disrespect and still would have
conducted the same inappropriate “interview” of Maniachi. In short, Beard still would have been
terminated.
Of course, Beard disagrees with this conclusion. He argues that, “[i]f it were not for [his]
complaints of discrimination, [Auto Club] would not have pursued his termination because the
same scrutiny would not have been placed on his behavior.” Appellant Br. at 33. In essence,
Beard argues that his allegations led to heightened scrutiny of his conduct which, in turn, led to
his termination. This Court has recognized that heightened scrutiny of an employee after he or
she engages in protected activity may support an inference of causation. See Hamilton v. Gen.
Elec. Co., 556 F.3d 428, 436 (6th Cir. 2009).
However, that theory of causation is not available to Beard because Auto Club
investigated the complaints against Beard with the same level of scrutiny before and after his
protected activity. Beard argues that but for his protected activity, Auto Club would not have
“investigated and secretly documented” every complaint against him, but this argument is
meritless. Auto Club had been investigating every complaint against Beard before he ever
alleged discrimination—Huffman investigated the complaints he later memorialized in his April
2009 memorandum, and Welsh investigated the complaints he later memorialized in the July
2010 midyear review.

Additionally, there was nothing secretive about Auto Club’s

documentation of these complaints.

Auto Club made Beard well aware of the complaints

through various meetings and written memoranda.

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For these reasons, we find the district court properly found Beard’s evidence of causation
insufficient, and we find the district court did not err in granting Auto Club a directed verdict on
Beard’s Title VII retaliation claim.
B. Directed Verdict on Beard’s ELCRA Retaliation Claim
Next, Beard challenges the directed verdict on his ELCRA retaliation claim. He argues
the district court erred because it used Title VII’s “but for” causation standard to assess his statelaw ELCRA claim even though Michigan courts have yet to expressly adopt the federal
causation standard.
An appellate court reviews a district court’s application of state law de novo. Salve
Regina Coll. v. Russell, 499 U.S. 225, 231 (1991). ELCRA is Michigan’s state-law civil rights
statute. Generally, Michigan courts recognize the persuasive force of federal Title VII precedent
in interpreting ELCRA. Elezovic v. Ford Motor Co., 697 N.W.2d 851, 859 (Mich. 2005)
(internal citation omitted). Nevertheless, Michigan courts have refused to defer to federal Title
VII interpretations when doing so “would nullify a portion of the [Michigan] Legislature’s
enactment.” Id.
Here, Beard presents no argument why reading “but for” causation into ELCRA would
nullify the statute’s purposes or policies. This Court also cannot find any such argument.
Instead, a side-by-side reading of Title VII’s and ELCRA’s retaliation provisions suggests
similarity, not difference, in the statutes’ causation requirements. Both Title VII and ELCRA
use the same type of “because” language to describe the necessary relationship between
protected activity and a retaliatory act. Section 2000e-3(a) of Title VII prohibits employer
retaliation “because [an employee] has opposed . . . an unlawful employment practice . . . or
. . . made a [Title VII] charge.” See 42 U.S.C. § 2000e-3(a) (emphasis added). Meanwhile,

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ELCRA states that “[t]wo or more persons shall not conspire to, or a person shall not … retaliate
or discriminate against a person because the person has opposed a violation of this act, or
because the person has made a charge, filed a complaint, testified, assisted, or participated in an
investigation, proceeding, or hearing under this act.” See Mich. Comp. Laws § 37.2701(a)
(emphasis added).
In University of Texas Southwestern Medical Center v. Nassar, 133 S. Ct. 2517 (2013),
the Supreme Court read “but for” causation into Title VII guided largely by the ordinary
meaning of the word “because.” See id. at 2528. It stands to reason that Michigan courts would
make the same interpretation of the identical “because” language found in ELCRA.
Accordingly, we find the district court did not err in using “but for” causation to review Beard’s
ELCRA retaliation claim, and we uphold the directed verdict in favor of Auto Club.
C. Jury Instruction on Intentional Discrimination
Beard next argues the district court erred when it instructed the jury that discrimination
must be intentional under Title VII to be actionable. Beard argues no discriminatory intent is
needed to prove a Title VII violation. The jury instruction at issue reads: “[I]t is unlawful for an
employer to intentionally discriminate against any person . . . because of a person’s race.” (R.
74, Page ID # 3786) (emphasis added). Challenges to jury instructions are reviewed for abuse of
discretion. United States v. Russell, 595 F.3d 633, 642 (6th Cir. 2010). Because intent is the
cornerstone of a Title VII disparate-treatment claim and because Beard was pursuing a disparatetreatment theory of liability at trial, the district court did not err when it instructed the jury on
intentional discrimination.
In his brief, Beard argues intent is not required because the relevant provision in Title
VII, § 2000e-2, does not expressly include the word “intent.” Nevertheless, the Supreme Court

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has read § 2000e-2 to require a showing of intent: “A disparate-treatment plaintiff must establish
that the defendant had a discriminatory intent or motive for taking a job related action.” Ricci v.
DeStefano, 557 U.S. 557, 577 (2009) (internal quotation omitted). The requirement of intent for
a disparate-treatment claim is well established. See Watson v. Forth Worth Bank & Trust, 487
U.S. 977, 986 (1988); Chattman v. Toho Tenax Am., Inc., 686 F.3d 339, 346 (6th Cir. 2012)
(citation and quotation omitted).
It appears Beard has confused the requirements for a disparate treatment claim under
Title VII with the requirements for a disparate impact claim under Title VII. His brief seeks a
new trial on “Plaintiff’s Title VII and ELCRA disparate impact claims” yet he argues that
“[n]othing in [Title VII] states that conduct that constitutes disparate treatment has to be
intentional to be actionable.” Appellant Br. at 40, 42. While a disparate-impact claim does not
require a showing of intent, see Griggs v. Duke Power Co., 401 U.S. 424, 430–31 (1971), a
claim of disparate treatment does, and it is the latter that the challenged jury instruction concerns.
Though Title VII permits an employee to pursue disparate treatment or disparate impact theories
of liability, the two theories have vastly different evidentiary requirements. See Chrisner v.
Complete Auto Transit, Inc., 645 F.2d 1251, 1257 (6th Cir. 1981).
At trial, Beard did not pursue a disparate impact claim. He did not identify an Auto Club
policy or practice “fair in form, but discriminatory in operation.” Griggs, 401 U.S. at 431. The
jury instruction concerned the elements of a disparate treatment claim and thus, the district court
did not err by instructing the jury that discrimination had to be intentional to be actionable.
D. Failure to Give Beard’s Proposed Jury Instruction
Beard also alleges error in the district court’s refusal to give two of his proposed jury
instructions: one defining “discriminatory intent” and one defining “discriminatory animus.” We

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review the denial of a proposed jury instruction for abuse of discretion. See United States v.
Hart, 635 F.3d 850, 854 (6th Cir. 2011). Here, we find the refusal to give Beard’s proposed
instructions not to be an abuse of discretion. The proposed instructions each referred to aspects
of the McDonnell Douglas burden-shifting framework—instructing the jury to examine an
employer’s legitimate, nondiscriminatory reasons for pretext and informing the jury that more
favorable treatment of similarly situated individuals creates an inference of discriminatory
animus. As this Court has discussed, “it is normally inappropriate to instruct the jury on the
McDonnell Douglas analysis,” Brown v. Packaging Corp. of Am., 338 F.3d 586, 593 (6th Cir.
2003) (citing McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973)), and here the district
court’s instructions on the law were “a clear and preferable statement of the law,” In re Lewis,
845 F.2d 624 (6th Cir. 1988).
E. Admission of Beard’s Prior Employment Records
Next, Beard challenges the admission of two of his prior employment records. At trial,
Beard was impeached with records from his former employer, Prudential. One was a “Climate
Assessment Summary” replete with negative comments about Beard’s leadership. The other was
a letter to Beard explaining that his removal as a manager was due to the negative feedback in his
Climate Assessment Summary. Beard argues the district court erred in admitting these records
because the records were not disclosed in discovery and the records were inadmissible Rule
404(b) evidence.
We disagree and find the employment records were properly admitted for impeachment
purposes. As such, the records did not need to be disclosed in discovery. On cross-examination,
Beard was asked about deposition testimony he gave that no concerns were raised about his
leadership while he was at Prudential. The records were admitted during that line of questioning

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to prove that Beard was being untruthful, as the records showed not only that Beard received
negative feedback about his leadership but that he was removed from management as a result.
(See R. 70, Page ID # 3106.) Though the Federal Rules of Civil Procedure require pretrial
disclosure of certain documents and exhibits, this requirement is limited to evidence being
admitted for purposes “other than solely for impeachment.” Fed. R. Civ. P. 26(a)(3).
Beard tries to work around this limitation, suggesting the records were offered for
nonimpeachment purposes—specifically, the improper purpose of proving conduct in conformity
therewith. However, during cross-examination, the court made sure to inform the jury that the
records touched only on Beard’s credibility. (R. 70, Page ID # 3108–09.) Likewise, at closing
argument, Auto Club explained the records were not to be considered for the truth of the matter
asserted. (R. 74, Page ID # 3836). Under these circumstances, Beard’s employment records
were properly admitted as impeachment evidence and were not inadmissible Rule 404(b)
evidence. The district court did not err in admitting the records.
F. Award of Daily Transcript Costs
Lastly, Beard challenges the district court’s denial of his Rule 54(d)(1) motion to review
costs. We do not address this challenge because Beard did not file a proper notice of appeal
from the motion’s denial.
Final judgment was entered in favor of Auto Club on February 14, 2014. That judgment
did not include taxed costs, since Auto Club did not submit a bill of costs until March 11. On
March 12, Beard filed a notice of appeal from the judgment and the district court taxed costs in
favor of Auto Club. On March 15, Beard filed his Rule 54(d)(1) motion to review costs. The
motion was denied on April 22, and the district court amended its judgment on May 13 to reflect

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the taxed costs. Beard never filed a separate notice of appeal to challenge the post-judgment
award of costs.
Beard asserts that his notice of appeal did not become effective until May 13, and thus his
notice of appeal was from the judgment as it stood on May 13, post-taxing of costs, not as it
stood on February 14. Beard argues that the effectiveness of his notice of appeal was delayed by
the filing of his Rule 54(d)(1) motion to review costs.
Beard is mistaken. Fed. R. App. P. 4(a)(4)(B)(i) reads in full:
If a party files a notice of appeal after the court announces or enters a judgment—
but before it disposes of any motion listed in Rule 4(a)(4)(A)—the notice
becomes effective to appeal a judgment or order, in whole or in part, when the
order disposing of the last such remaining motion is entered.
Id.
The qualifying motions listed in Fed. R. App. P. 4(a)(4)(A) include a Rule 54 motion for
attorney’s fees “if the district court extends the time to appeal under Rule 58.” Fed. R. App. P.
4(a)(4)(A). But here, Beard did not make a Rule 54 motion for attorney’s fees. He made a Rule
54(d)(1) motion to review costs. A separate notice of appeal was required for this Court to
review the award of costs, and no such notice was filed. See Martin v. Williams, 960 F.2d 149
(6th Cir. 1992). Thus, Beard’s challenge to the award of costs is not properly before this Court.
III.
For the reasons stated above, the district court is AFFIRMED in all respects.

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