Henry Ortiz v. Werner Enterprises, Incorporat
Filing
Filed opinion of the court by Judge Easterbrook. Because this opinion overrules two lines of cases in this circuit, it was circulated before release to all judges in active service. See Circuit Rule 40(e). None of the judges favored a hearing en banc. The judgment is REVERSED, and the case is REMANDED for trial. Richard A. Posner, Circuit Judge; Frank H. Easterbrook, Circuit Judge and David F. Hamilton, Circuit Judge. [6776804-1] [6776804] [15-2574]
<![CDATA[
Case: 15-2574
Document: 29
Filed: 08/19/2016
Pages: 13
In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 15-‐‑2574
HENRY ORTIZ,
Plaintiff-‐‑Appellant,
v.
WERNER ENTERPRISES, INC.,
Defendant-‐‑Appellee.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 13 C 8270 — John W. Darrah, Judge.
____________________
ARGUED FEBRUARY 8, 2016 — DECIDED AUGUST 19, 2016
____________________
Before POSNER, EASTERBROOK, and HAMILTON, Circuit
Judges.
EASTERBROOK, Circuit Judge. Henry Ortiz worked as a
freight broker for Werner Enterprises, Inc., for seven years
until his discharge in 2012. Werner says that it fired Ortiz for
falsifying business records. Ortiz says that Werner fired him
because of his Mexican ethnicity, and he sued Werner under
42 U.S.C. §1981 and the Illinois Human Rights Act, 775 ILCS
5/1-‐‑101 to 5/10-‐‑104. He also claimed that Werner subjected
Case: 15-2574
2
Document: 29
Filed: 08/19/2016
Pages: 13
No. 15-‐‑2574
him to a hostile work environment in violation of the state
law.
Werner is a shipping company that offers freight broker-‐‑
age as one of its services; customers pay a fee and Werner
finds transportation for their loads. Werner tracks its cus-‐‑
tomers’ loads through a proprietary records system. Loads
that have not been matched with a carrier—a vehicle hired
to transport the load––appear in the system, and for most of
Ortiz’s tenure at Werner any broker could locate a carrier for
any load. After securing carriers, brokers update the system
to confirm the transactions, the carrier’s prices, and who gets
credit for the deal. Werner’s profit is the difference between
what its customer pays and what it pays the carrier. Some
loads produce a loss when the carrier charges more than the
customer’s payment. Werner compensates its brokers pri-‐‑
marily through a base salary, but they can earn a commis-‐‑
sion of up to 4% for months in which they generate more
than a specified profit. Ortiz usually received monthly
commissions of around $1,000.
Permitting all brokers to book any load led to problems,
as brokers cherry-‐‑picked the nation’s most profitable loads.
In 2012 Werner addressed this by assigning each broker a
specific region. During Ortiz’s final months with Werner the
regional broker bore responsibility for matching every load
in the region to a carrier whether the load would generate a
profit or a loss. But the system did not automatically assign
loads—brokers still needed to search for loads in their region
and update the records.
Werner assigned Ortiz the West region, apparently not a
lucrative assignment during late spring when high demand
for transporting produce drives carriers’ rates up. (The par-‐‑
Case: 15-2574
No. 15-‐‑2574
Document: 29
Filed: 08/19/2016
Pages: 13
3
ties don’t explain why Werner failed to change its fees to
match predictable cycles in the business.) During the first
week of June 2012 Michael Krikava, the branch’s assistant
manager, booked or directed another broker to book six un-‐‑
profitable loads in Ortiz’s name. There was some variation
in how Ortiz’s name wound up on each load: Krikava
booked several loads in his own name and swapped in
Ortiz’s name after the loads had been picked up, but others
were booked early in the morning when Ortiz may have
been out of the office. Krikava did not notify Ortiz of any of
these losing transactions. By the time Ortiz realized that he
had been assigned responsibility for the loads, it was too late
for him to search for a cheaper carrier. Ortiz later changed
the records to reflect that he had not booked the loads or to
show lower rates that he thought the carriers had agreed to
charge. He then left for a planned vacation. On his return
Werner fired him. The parties agree on this much, but here
their stories diverge. We recount Ortiz’s version, because we
must view the evidence in the light most favorable to the
party opposing a motion for summary judgment.
Ortiz contends that brokers and managers always noti-‐‑
fied one another when booking an unprofitable load in
someone else’s name, and that it was atypical for someone
else to book so many unprofitable loads without so much as
a courtesy email or phone call. He adds that Krikava as-‐‑
signed him unusually high losses. Ortiz repeatedly ques-‐‑
tioned Krikava about the unprofitable loads but he refused
to answer until saying: “Why won’t you just quit already?”
Ortiz maintains that he updated three records to show
that he had spoken to the carriers, which had agreed to ac-‐‑
cept a lower rate because they had not picked up the goods
Case: 15-2574
4
Document: 29
Filed: 08/19/2016
Pages: 13
No. 15-‐‑2574
on time. Ortiz adds that he often tried to negotiate a lower
rate after a late delivery and that carriers would sometimes
oblige. Ortiz says that this represents standard practice in
the industry; other brokers offered similar testimony.
Ortiz justifies the removal of his name from three other
loads with evidence that the branch’s managers permitted
brokers to delete their names from unprofitable loads. This
practice allowed Werner to satisfy the needs of all of its cus-‐‑
tomers without saddling brokers with undue losses, thus
protecting each broker’s commission. Removing a broker’s
name from a loss also moved the loss off the branch’s books,
increasing the branch’s profits and the managers’ bonuses,
which are tied to branch performance. Other Werner brokers
testified that this was called “spacing”, as in sending the
record of the unprofitable load into cyberspace. (The evi-‐‑
dence does not reflect what division of Werner ultimately
bore the loss or how Werner reconciled its books.) Because
spacing was common practice, Ortiz says, he thought it
permissible for him to remove his name from the money-‐‑
losing loads.
On his first morning back from vacation Ortiz met with
Kip Lass, the branch manager. Lass told Ortiz that he had
been fired for falsifying records. Ortiz argued that he had
not falsified records but had corrected them by providing
the rate that the tardy carriers had agreed to charge, and he
offered to call the carriers to provide proof. Lass showed no
interest in verifying Ortiz’s allegations, noted “What’s done
is done,” and discharged Ortiz without further investigation.
Ortiz also tells us that Krikava and Lass subjected him to
a barrage of ethnic slurs. They frequently used epithets such
as “beaner,” “taco eater,” “fucking beaner,” “taco,” “bean
Case: 15-2574
No. 15-‐‑2574
Document: 29
Filed: 08/19/2016
Pages: 13
5
eater,” “dumb Mexican,” “stupid Puerto Rican,” “dumb
Puerto Rican,” “fucking Puerto Rican,” “Puerto Rican,” and
“dumb Jew” to refer to Ortiz. Ortiz contends that he encoun-‐‑
tered such slurs throughout his tenure at Werner and that
they increased in frequency and intensity in the months
leading up to his discharge.
Werner asserts that the office did not regularly notify
brokers of loads recorded under their names, and it contends
that the losses assigned to Ortiz were not unusually high. It
insists that its brokers do not have the authority to remove
their names from unprofitable loads without a manager’s
permission. It also denies that it was customary to cut a car-‐‑
rier’s rate for a late delivery—even if the carrier had con-‐‑
sented to the lower rate. According to Werner, Ortiz im-‐‑
properly edited these three records as well. Finally, Werner
denies that Lass and Krikava ever made derogatory remarks
to Ortiz. But on all of these issues we must look at the evi-‐‑
dence from Ortiz’s perspective.
The district court granted summary judgment to Werner.
2015 U.S. Dist. LEXIS 82952 (N.D. Ill. June 25, 2015). It dis-‐‑
missed Ortiz’s claim of a hostile work environment for fail-‐‑
ure to exhaust his administrative remedies, a ruling Ortiz
does not contest on appeal. The judge looked at the evidence
through the “direct” and “indirect” methods that courts of-‐‑
ten discuss in employment-‐‑discrimination cases. See, e.g.,
Andrews v. CBOCS West, Inc., 743 F.3d 230, 234 (7th Cir.
2014); Zaderaka v. Illinois Human Rights Commission, 131 Ill. 2d
172, 178–79 (1989). Admissions of culpability and smoking-‐‑
gun evidence were assigned to the “direct” method (the
judge found no such evidence), while suspicious circum-‐‑
stances that might allow an inference of discrimination were
Case: 15-2574
6
Document: 29
Filed: 08/19/2016
Pages: 13
No. 15-‐‑2574
assigned to the “indirect” method. The court did not try to
aggregate the possibilities to find an overall likelihood of
discrimination.
The district court treated each method as having its own
elements and rules, even though we have held that they are
just means to consider whether one fact (here, ethnicity)
caused another (here, discharge) and therefore are not “ele-‐‑
ments” of any claim. See, e.g., Achor v. Riverside Golf Club,
117 F.3d 339, 341 (7th Cir. 1997). Pursuing two “methods”
instead of a unified inquiry, the district court elaborated by
saying that Ortiz could prevail only by coming up with “ev-‐‑
idence that creates ‘a convincing mosaic of discrimination’”.
2015 U.S. Dist. LEXIS 82952 at *12. It concluded that Ortiz had
failed to present a “convincing mosaic” under the direct
method because Lass’s racial slurs did not have anything to
do with Ortiz’s discharge. The court also ruled that there
was not enough of a “mosaic” under the indirect method be-‐‑
cause, by removing his name from the records and changing
the rates, he fell short of Werner’s expectations.
The district court’s effort to shoehorn all evidence into
two “methods,” and its insistence that either method be im-‐‑
plemented by looking for a “convincing mosaic,” detracted
attention from the sole question that matters: Whether a rea-‐‑
sonable juror could conclude that Ortiz would have kept his
job if he had a different ethnicity, and everything else had
remained the same. See, e.g., Achor; Troupe v. May Depart-‐‑
ment Stores Co., 20 F.3d 734 (7th Cir. 1994). The use of dispar-‐‑
ate methods and the search for elusive mosaics has compli-‐‑
cated and sidetracked employment-‐‑discrimination litigation
for many years. During the last decade, every member of
this court has disapproved both the multiple methods and
Case: 15-2574
No. 15-‐‑2574
Document: 29
Filed: 08/19/2016
Pages: 13
7
the search for mosaics. See, e.g., Sylvester v. SOS Children’s
Villages Illinois, Inc., 453 F.3d 900 (7th Cir. 2006); Coleman v.
Donahoe, 667 F.3d 835, 863 (7th Cir. 2012) (concurring opin-‐‑
ion joined by entire panel); Good v. University of Chicago Med-‐‑
ical Center, 673 F.3d 670, 680 (7th Cir. 2012); Harper v. C.R.
England, Inc., 687 F.3d 297, 314 (7th Cir. 2012); Hitchcock v.
Angel Corps, Inc., 718 F.3d 733, 737 (7th Cir. 2013); Perez v.
Thorntons, Inc., 731 F.3d 699, 703 (7th Cir. 2013); Chaib v. Indi-‐‑
ana, 744 F.3d 974, 981 (7th Cir. 2014); Bass v. Joliet Public
School District No. 86, 746 F.3d 835, 840 (7th Cir. 2014); Hutt v.
AbbVie Products LLC, 757 F.3d 687, 691 (7th Cir. 2014); Simp-‐‑
son v. Beaver Dam Community Hospitals, Inc., 780 F.3d 784,
789–90 (7th Cir. 2015); Castro v. DeVry University, Inc., 786
F.3d 559, 564 (7th Cir. 2015) (collecting cases). The time has
come to jettison these diversions and refocus analysis on the
substantive legal issue.
We start with the “convincing mosaic.” This phrase orig-‐‑
inated in Troupe and was designed as a metaphor to illus-‐‑
trate why courts should not try to differentiate between di-‐‑
rect and indirect evidence. Troupe explained that all evidence
is inferential and cannot be sorted into boxes. All evidence
should be considered together to understand the pattern it
reveals. But instead of persuading district judges and liti-‐‑
gants to merge “direct” and “indirect” methods into a uni-‐‑
fied approach, Troupe was understood by many as adding a
new “test” that had to be satisfied. How a “mosaic” could be
a “test” rather than a mental picture went unaddressed—as
did the question how such a legal test could be rooted in the
statutes that govern employment-‐‑discrimination cases.
We tried to set things straight in Sylvester, 453 F.3d at
903–04, reminding lawyers and judges that Troupe used
Case: 15-2574
8
Document: 29
Filed: 08/19/2016
Pages: 13
No. 15-‐‑2574
“mosaic” as a metaphor that was designed to displace the
unhelpful direct and indirect methods rather than add to
them. The reminder did not work, as the district court’s
opinion in this case shows. Despite follow-‐‑up reminders that
“convincing mosaic” is not a legal test of any kind, see Mu-‐‑
hammad v. Caterpillar, Inc., 767 F.3d 694, 699–700 (7th Cir.
2014); Fleishman v. Continental Casualty Co., 698 F.3d 598, 603
(7th Cir. 2012); Davis v. Time Warner Cable of Southeastern
Wisconsin, L.P., 651 F.3d 664, 672 (7th Cir. 2011); it has con-‐‑
tinued to be misused as one.
To make matters worse, this court has itself occasionally
treated “convincing mosaic” as a legal requirement, even
while cautioning in other opinions that it must not be so un-‐‑
derstood. See, e.g., Hatcher v. Board of Trustees of Southern Illi-‐‑
nois University, No. 15-‐‑1599 (7th Cir. July 14, 2016), slip op.
13; Chaib, 744 F.3d at 981; Cloe v. Indianapolis, 712 F.3d 1171,
1180 (7th Cir. 2013); Smith v. Bray, 681 F.3d 888, 901 (7th Cir.
2012); Good, 673 F.3d at 674; Silverman v. Board of Education of
Chicago, 637 F.3d 729, 734 (7th Cir. 2011); Phelan v. Cook Coun-‐‑
ty, 463 F.3d 773, 779 (7th Cir. 2006); Koszola v. Board of Educa-‐‑
tion of Chicago, 385 F.3d 1104, 1109 (7th Cir. 2004); Rhodes v.
Illinois Department of Transportation, 359 F.3d 498, 504 (7th
Cir. 2004); Cerutti v. BASF Corp., 349 F.3d 1055, 1061 (7th Cir.
2003); Robin v. Espo Engineering Corp., 200 F.3d 1081, 1088–89
(7th Cir. 2000). Instead of simplifying analysis, the “mosaic”
metaphor has produced a form of legal kudzu.
Today we reiterate that “convincing mosaic” is not a le-‐‑
gal test. We overrule the opinions in the previous paragraph
to the extent that they rely on “convincing mosaic” as a gov-‐‑
erning legal standard. We do not hold that any of those cases
was wrongly decided; our concern is only with the treatment
Case: 15-2574
No. 15-‐‑2574
Document: 29
Filed: 08/19/2016
Pages: 13
9
of “convincing mosaic” as if it were a legal requirement.
From now on, any decision of a district court that treats this
phrase as a legal requirement in an employment-‐‑
discrimination case is subject to summary reversal, so that
the district court can evaluate the evidence under the correct
standard.
That legal standard, to repeat what we wrote in Achor
and many later cases, is simply whether the evidence would
permit a reasonable factfinder to conclude that the plaintiff’s
race, ethnicity, sex, religion, or other proscribed factor
caused the discharge or other adverse employment action.
Evidence must be considered as a whole, rather than asking
whether any particular piece of evidence proves the case by
itself—or whether just the “direct” evidence does so, or the
“indirect” evidence. Evidence is evidence. Relevant evidence
must be considered and irrelevant evidence disregarded, but
no evidence should be treated differently from other evi-‐‑
dence because it can be labeled “direct” or “indirect.”
Some opinions have observed that the methods largely
rely on the same pieces of evidence. See Harper, 687 F.3d at
314 (“[T]he line between circumstantial evidence under the
direct method and indirect evidence of discrimination or re-‐‑
taliation under the burden-‐‑shifting approach has been
blurred by the gradual integration of these methodologies.”);
Hutt, 757 F.3d at 691. Why have two tests if they consider the
same information and answer the same question?
True, some cases permit easy inferences, such as the fa-‐‑
bled employer who admits to firing an employee because of
race. But even then factfinders must ask themselves what the
admission means. Few discrimination cases are so straight-‐‑
forward—indeed they are often factually complex and re-‐‑
Case: 15-2574
10
Document: 29
Filed: 08/19/2016
Pages: 13
No. 15-‐‑2574
quire sifting through ambiguous pieces of evidence. And the
direct-‐‑and-‐‑indirect framework does nothing to simplify the
analysis. Instead it complicates matters by forcing parties to
consider the same evidence in multiple ways (and some-‐‑
times to disregard evidence that does not seem to fit one
method rather than the other).
Accordingly, we hold that district courts must stop sepa-‐‑
rating “direct” from “indirect” evidence and proceeding as if
they were subject to different legal standards. Once again,
this court must accept its share of the responsibility—
because even as some panels were disparaging the “direct”
and “indirect” approaches, other panels were articulating
them as governing legal standards. We need to bring har-‐‑
mony to circuit law, and the way to do that is to overrule
Andrews, 743 F.3d 230; Silverman, 637 F.3d 729; Hemsworth v.
Quotesmith.com, Inc., 476 F.3d 487 (7th Cir. 2007); Rhodes, 359
F.3d at 498; Haywood v. Lucent Technologies, Inc., 323 F.3d 524
(7th Cir. 2003); Oest v. Illinois Department of Corrections, 240
F.3d 605 (7th Cir. 2001); Radue v. Kimberly-‐‑Clark Corp., 219
F.3d 612 (7th Cir. 2000); Chiaramonte v. Fashion Bed Group,
Inc., 129 F.3d 391 (7th Cir. 1997); Mechnig v. Sears, Roebuck &
Co., 864 F.2d 1359 (7th Cir. 1988); and La Montagne v. Ameri-‐‑
can Convenience Products, Inc., 750 F.2d 1405 (7th Cir. 1984), to
the extent that these opinions insist on the use of the direct-‐‑
and-‐‑indirect framework. (As with the convincing-‐‑mosaic
cases, we are not saying that any of these decisions produced
a victory for the wrong litigant; our concern is with the legal
standards they employed rather than with their outcomes.)
One point of clarification may be helpful. The burden-‐‑
shifting framework created by McDonnell Douglas Corp. v.
Green, 411 U.S. 792 (1973), sometimes is referred to as an
Case: 15-2574
No. 15-‐‑2574
Document: 29
Filed: 08/19/2016
Pages: 13
11
“indirect” means of proving employment discrimination.
Today’s decision does not concern McDonnell Douglas or any
other burden-‐‑shifting framework, no matter what it is called
as a shorthand. We are instead concerned about the proposi-‐‑
tion that evidence must be sorted into different piles, labeled
“direct” and “indirect,” that are evaluated differently. In-‐‑
stead, all evidence belongs in a single pile and must be eval-‐‑
uated as a whole. That conclusion is consistent with McDon-‐‑
nell Douglas and its successors.
With the rat’s nest of surplus “tests” removed from the
law of the circuit, we can turn back to Ortiz’s claim and his
supporting evidence. Stripped of the layers of tests, our
analysis is straightforward.
Ortiz relies on his own testimony plus depositions and
declarations from other brokers, managers, and former em-‐‑
ployees. Some Werner employees testified that they always
provided notice when booking a loss in another broker’s
name. Some went further and said they expected someone to
ask their permission before recording an unprofitable trans-‐‑
action in their names. Several brokers testified that they (and
other brokers) sometimes removed their names from unprof-‐‑
itable loads. Werner could not identify an express policy that
forbids the practice. A former Werner broker with 20 years’
experience submitted a declaration that while at Werner he
had sometimes asked tardy carriers to lower their rates and
that such action reflected industry practice. Finally, several
current and former employees recounted that Lass and Kri-‐‑
kava had directed ethnic slurs at Ortiz.
A reasonable juror could infer that Lass and Krikava
didn’t much like Hispanics (or Jews, though Ortiz is not Jew-‐‑
ish) and tried to pin heavy losses on Ortiz to force him out
Case: 15-2574
12
Document: 29
Filed: 08/19/2016
Pages: 13
No. 15-‐‑2574
the door. A juror also might infer that, because of Ortiz’s
ethnicity, Werner’s managers fired him for using techniques
that were tolerated when practiced by other brokers. In the
end a jury might not credit Ortiz’s evidence and could ac-‐‑
cept Werner’s explanations. But given the conflict on materi-‐‑
al issues, a trial is necessary.
Ortiz also argues that the court erred by excluding as
hearsay his affidavit that described what Lass said at the
meeting where he was fired. This likely was not hearsay. See
Fed. R. Evid. 801(d)(2)(D). But it matters little. Since we are
remanding for trial Ortiz is free to call the attendees of the
meeting to testify, and they can share their recollections sub-‐‑
ject to the rules of evidence.
Werner argues that it would have discharged Ortiz, re-‐‑
gardless of the falsified records, based on information that
surfaced after the discharge. In short, Werner discovered
that Ortiz was using his work email to send and receive sex-‐‑
ually explicit messages and photos. Werner asserts that this
violates its policy on Internet use. This information might
have justified a discharge, but the parties agree that Werner
cannot use this alternate ground to support action that Wer-‐‑
ner took before the email problem came to light. So Ortiz’s
inappropriate emails may reduce his damages, but they can-‐‑
not absolve Werner. See McKennon v. Nashville Banner Pub-‐‑
lishing Co., 513 U.S. 352 (1995). The parties give conflicting
accounts of whether Werner enforced its policy. But since
they agree that the after-‐‑acquired evidence cannot retroac-‐‑
tively justify Ortiz’s discharge, we leave it to the jury to de-‐‑
termine whether it affects Ortiz’s damages, if any.
Because this opinion overrules two lines of cases in this
circuit, it was circulated before release to all judges in active
Case: 15-2574
No. 15-‐‑2574
Document: 29
Filed: 08/19/2016
Pages: 13
13
service. See Circuit Rule 40(e). None of the judges favored a
hearing en banc.
The judgment is reversed, and the case is remanded for
trial.
]]>
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?
