HOFMANN v. ASPEN DENTAL MANAGEMENT, INC.
Filing
160
ORDER denying 74 Motion for Summary Judgment; denying 98 Motion to Disqualify Counsel. ; and denying 25 Motion for Summary Judgment. Signed by Judge Sarah Evans Barker on 9/29/2011. (SMD)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
EVANSVILLE DIVISION
CRYSTAL HOFMANN,
)
)
Plaintiff,
)
)
)
vs.
)
ASPEN DENTAL MANAGEMENT, INC., )
)
)
Defendant.
3:10-cv-37-SEB-WGH
ORDER DENYING DEFENDANT’S MOTION TO DISQUALIFY COUNSEL,
DENYING PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT, AND
DENYING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT
This cause is now before the Court on Plaintiff’s Motion for Partial Summary
Judgment [Docket No. 25], filed on July 22, 2010; Defendant’s Motion for Summary
Judgment [Docket No. 74], filed on December 23, 2010, and Defendant’s Amended
Motion to Disqualify Counsel [Docket No. 98], filed on January 31, 2011. Plaintiff,
Crystal Hofmann, brings this action against her former employer, Defendant, Aspen
Dental Management, Inc. (“Aspen”), alleging that Defendant retaliated against her in
violation of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201 et seq., the
Americans With Disabilities Act (“ADA”), 42 U.S.C. §§ 12112 et seq., and the Age
Discrimination and Employment Act (“ADEA”), 29 U.S.C. §§ 621 et seq.1 Having
1
Ms. Hofmann has also brought a claim against Defendant pursuant to the FLSA’s
overtime provision, but that claim is not the subject of any of the motions addressed herein.
considered the parties’ briefing and documentary evidence filed in connection with these
motions, the Court DENIES Defendant’s Motion to Disqualify, DENIES Plaintiff’s
Motion for Summary Judgment and DENIES Defendant’s Motion for Summary
Judgment.
Factual Background
Ms. Hofmann began working as a dental assistant for Aspen Dental in the Aspen
West office located in Evansville, Indiana, on March 6, 2008. As a dental assistant, Ms.
Hofmann’s daily schedule was dictated by patient need and flow. Each morning, she,
along with other employees in the Aspen West office, received a “provider schedule” that
contained information regarding that workday’s patient flow and the employee’s expected
work assignments for the day. Ms. Hofmann often wrote notes to herself on the provider
schedules she received in order to remind herself of things she needed to do as well as to
track her work assignments and work hours. However, while employed with Aspen
Dental, Ms. Hofmann officially recorded the hours she worked each day and each work
week using a computer time clock.
Plaintiff’s First Termination
In the latter part of April 2009, Ms. Hofmann spoke to Aspen Regional Manager
Gabe Hofmann2 when he made his monthly visit to the Evansville office and stated that
she believed her then-supervisor, Monica Daly, who was at that time the Aspen West
2
To our knowledge, Plaintiff and Gabe Hofmann are not related.
2
Office Manager, had intentionally altered employees’ electronic time entries in an effort
to keep overtime costs low and decrease overhead attributable to the office Daly
managed. According to Ms. Hofmann, not long after she complained to Mr. Hofmann,
Ms. Daly confronted her and stated that she (Daly) was aware of the accusation that had
been made. According to Ms. Hofmann, this concerned her, and she subsequently began
discussing her wages and other concerns with her co-workers.
On May 6, 2009, Ms. Hofmann was disciplined by Ms. Daly and Megan Boger,
who was then the Aspen West Assistant Office Manager, because Hofmann was
“gossiping” and discussing her wages with other employees after having previously
received a verbal warning not to do so. A few weeks later, on May 18, 2009, Regional
Manager Hofmann sent an email to all of the office managers in his region, including Ms.
Daly, which stated in pertinent part:
... Timeclock – Legally we can not adjust recorded punches of employees.
We can add missed punches and edit according to errors, but can’t change
time punched for whatever reason ....
Exh. 2 to Compl. Approximately a month later, on June 3, 2009, Ms. Hofmann was again
disciplined, this time for her participation in a confrontation with a co-worker, Amy
Toone. Ms. Hofmann contends that although Ms. Toone was equally at fault, she was
not disciplined following the incident. Two weeks later, on June 18, 2009, Aspen Dental
terminated Ms. Hofmann, citing as the reasons that she was “negative,” that employees
complained about her, and that she continued to discuss wages in the workplace.
Plaintiff’s Complaints to Administrative Agencies and Subsequent Rehiring
3
In the month following her termination, Ms. Hofmann filed a number of
complaints against Aspen Dental with various administrative organizations. On the same
day she was terminated, Ms. Hofmann made a report to the National Insurance Crime
Bureau (“NICB”) alleging that Aspen Dental was engaged in fraudulent billing practices.
On July 1, 2009, Ms. Hofmann filed a charge of discrimination with the Equal
Employment Opportunity Commission (“EEOC”) alleging that Aspen Dental had
discriminated against her because of her age and disability. Ms. Hofmann also filed a
complaint with the Department of Labor (“DOL”) on July 16, 2009 claiming that Aspen
Dental had violated the FLSA.
On July 31, 2009, Ms. Hofmann’s attorney, Mary Schiff, wrote a letter to Aspen
Dental’s then-counsel informing him that she was representing Ms. Hofmann “with
regard to her FLSA and discrimination claims against Aspen Dental” and that Ms.
Hofmann “filed an EEOC charge and has also talked with the DOL, wage and hour
division.” Exh. D to Hofmann Aff. In the letter, Ms. Schiff also stated that Ms. Daly had
called Ms. Hofmann that day and offered her her job back and that Ms. Hofmann had
accepted the offer after Ms. Daly promised that she (Hofmann) would return with a
“clean slate.” Id. However, Ms. Toone, one of Ms. Hofmann’s co-workers, testified by
affidavit that before Ms. Hofmann returned to work, Ms. Daly and Mr. Hofmann held a
meeting with all of Ms. Hofmann’s co-workers and told them that Hofmann was returning
on a “probationary period,” that management was going to be “watching” her, and that
her co-workers should report to Ms. Daly or Mr. Hofmann any problems they
4
encountered with her. Toone Aff. ¶ 6. Aspen Dental denies that any such meeting
occurred.
Plaintiff’s Alleged Misconduct and Second Termination
Ms. Hofmann returned to work as a dental assistant for Aspen Dental on August
10, 2009. On September 24, 2009, Ms. Brown, who had been promoted to Office
Manager, telephoned Ms. Daly3 to discuss Ms. Hofmann’s past behavior, her pending
claims against Aspen Dental, and her poor attitude. Ms. Daly instructed Ms. Brown to
counsel Ms. Hofmann. On that same day, Ms. Brown and Dr. Woo, a dentist for whom
Ms. Hofmann often worked, met with Ms. Hofmann and told her that she was being
“negative” toward Aspen Dental and that she was having too many discussions about her
lawsuit against the company. According to Ms. Hofmann, Ms. Brown specifically told
her that she was not being terminated for her behavior but that they wanted to “nip things
in the bud.” Hofmann Aff. ¶ 18. Aspen concedes that Ms. Hofmann was told that she
was not being written up for her behavior but denies that she was told she would not be
terminated for her behavior. Ms. Brown testified by affidavit that the counseling meeting
was a final effort to bring about improvements in Ms. Hofmann’s attitude before making
the final decision as to whether she should be terminated. Brown Aff. ¶ 4.
Despite having been instructed to stop discussing her lawsuit at the office, either
later on September 24th or the next day, Friday, September 25th, Ms. Hofmann had a
3
Ms. Daly had by that point been promoted to Area Manager and was subsequently
promoted to Regional Manager, which is the position she currently holds.
5
conversation with her co-worker, Stacey Mackey, about wage issues. During that
conversation, Ms. Hofmann stated that, in furtherance of one of her claims against the
company, she had given her attorney a number of the provider schedules that Aspen
Dental employees received daily. Ms. Hofmann contends that she gave the provider
schedules to her attorney because she had written “notes” on them to “establish[] the
dates and times she worked for Aspen” as support for her FLSA claim. Docket 26 at 8.
Aspen Dental argues that majority of the provider schedules removed by Ms. Hofmann
either contained no notes or had notes that were unrelated to Hofmann’s compensation or
hours worked. Docket No. 99 at 2-3 (citing Exh. A to Preston Aff.).
Ms. Mackey repeated the conversation she had had with Ms. Hofmann to Ms.
Brown, who in turn repeated it to Ms. Daly and Sue Decker, Aspen Dental’s Vice
President of Human Resources. Specifically, Ms. Mackey reported that Ms. Hofmann
had said she had given the provider schedules to her attorney in furtherance of a lawsuit
other than her EEOC claim, but did not specify which claim that actually was. After
receiving this report from Ms. Mackey, neither Ms. Decker nor Ms. Daly immediately
spoke with Ms. Hofmann regarding the previously disclosed provider schedules,4 either to
instruct Hofmann to stop removing them or to inquire as to why she had given them to her
attorney.
Ms. Hofmann was absent from work on Monday, September 28th and Tuesday,
4
It is unclear whether Ms. Decker and Ms. Daly were informed of the conversation on
Thursday, September 24th or Friday, September 25th.
6
September 29th, due to illness. However, shortly after Ms. Hofmann clocked into work
on Wednesday, September 30th, Ms. Brown informed her that her employment with
Aspen Dental was being terminated because she had violated the Health Information
Portability and Accountability Act (“HIPAA”) by removing provider schedules from the
office.5 According to Aspen Dental, at the time Ms. Hofmann was terminated Ms. Decker
was the only Aspen West employee involved in the decision making process who knew
that Ms. Hofmann had been in contact with the DOL and that Hofmann’s FLSA concerns
were based on her belief that Ms. Daly had altered her time card entries to avoid paying
her overtime. Decker Aff. ¶ 7.
Following her termination, Ms. Hofmann requested that Aspen Dental provide her
with a written statement explaining its reasons for her termination. On October 14, 2009,
Ms. Hofmann received the written statement from Aspen reciting that “the decision to
terminate [her] employment was based on [her] egregious act of removing confidential
HIPAA protected information from the office” in addition to the issues about which she
had previously been counseled, to wit, her negative attitude and frequent discussions with
other employees regarding her lawsuit and wage issues. Am. Ans. ¶¶ 59-60. In that same
letter, Aspen Dental advised Ms. Hofmann that she was to “immediately return all
documents containing HIPAA protected information that is either in your possession or
5
The provider schedules contained protected health information as defined under the
HIPAA regulations, which prohibit disclosure of such information except in certain limited
circumstances. See 42 U.S.C. § 1320d-5 (civil monetary penalties for violation of the privacy
rules by covered entities); 42 U.S.C. § 1320d-6 (criminal penalties for wrongfully obtaining,
using, or disclosing protected health information by any person).
7
that of your attorney.” Exh. 5 attached to Complaint.
Attorney Schiff’s Involvement
Following Ms. Hofmann’s termination, then-counsel for Aspen Dental telephoned
Attorney Schiff (Ms. Hofmann’s attorney) and left a voicemail requesting that Attorney
Schiff return the HIPAA-protected information she had in her possession. In her response
via email, Attorney Schiff stated, “I am curious to find out what HIPAA information
Aspen believes [Ms. Hofmann] took from the office.” Docket No. 34-7. Three weeks
later, after Aspen Dental’s initial demand for the return of the provider schedules,
Attorney Schiff represented that the documents would remain confidential, but she
declined to return them, claiming that Ms. Hofmann was acting as a whistleblower under
HIPAA6 when she removed the provider schedules and disclosed them to counsel.
6
HIPPA’s whistleblower provision, 45 C.F.R. § 164.502(j), provides in relevant part as
follows:
(1) Disclosures by whistleblowers. A covered entity is not considered to have
violated the requirements of this subpart if a member of its workforce or a
business associate discloses protected health information, provided that:
(i) The workforce member or business associate believes in good faith that the
covered entity has engaged in conduct that is unlawful or otherwise violates
professional or clinical standards, or that the care, services, or conditions
provided by the covered entity potentially endangers one or more patients,
workers, or the public; and
(ii) The disclosure is to:
(A) A health oversight agency or public health authority
authorized by law to investigate or otherwise oversee the relevant
conduct or conditions of the covered entity or to an appropriate
health care accreditation organization for the purpose of reporting
(continued...)
8
Defendant’s Confidentiality Policies
It is undisputed that all newly hired employees at Aspen Dental are required to
participate in an orientation process during which they are cautioned that they will be
given access to patients’ confidential health information in the course of their duties. As
part of the orientation, employees receive HIPAA-compliance training in order to learn
the approved procedures for protecting the privacy of such information. All new
employees are also given a copy of Aspen Dental’s Employee Handbook, which provides
in relevant part that the “[f]ailure to follow all work rules or procedures, including State
and Federal regulations such as HIPAA ... will result in disciplinary action, up to and
including immediate termination.” Docket No. 76-4 (Excerpts from Handbook). Aspen
Dental employees also are required to execute a confidentiality agreement upon hiring,
acknowledging that they will be given possession of “patient files [and] patient lists”
during the course of their employment and that “dissemination of this information to third
parties would cause substantial damage to Aspen Dental” and “violating any provision of
this agreement may result in disciplinary action, up to and including termination.”
Docket No. 76-5 (Confidentiality Agreement). Ms. Hofmann executed her confidentiality
6
(...continued)
the allegation of failure to meet professional standards or
misconduct by the covered entity; or
(B) An attorney retained by or on behalf of the workforce member
or business associate for the purpose of determining the legal
options of the workforce member or business associate with regard
to the conduct described in paragraph (j)(1)(i) of this section.
9
agreement on March 10, 2008.
Ms. Hofmann alleges that, despite these policies, in practice Aspen Dental did not
protect the confidentiality of the provider schedules and did not discipline other Aspen
West employees who removed them from the office. According to Ms. Toone and Jodi
Puntney, two of Ms. Hofmann’s co-workers, the provider schedules that were distributed
to Aspen West employees on a daily basis were not collected at the end of the day nor
was there a written policy addressing how employees were expected to use and dispose of
them. Toone Aff. ¶¶ 8-9; Puntney Dep. at 53-54. Christine Bartley, a former Aspen West
employee who received training for a management position from Ms. Daly while
employed at Aspen Dental, similarly testified by affidavit that she was never told that
employees were prohibited from removing the provider schedules from the office or that
the provider schedules were to be kept confidential because they contained patient health
information that had to be protected pursuant to HIPAA regulations. Bartley Aff. ¶¶ 7-8,
12-13. Ms. Toone testified by affidavit that provider schedules were generally sitting out
in public view in every work location as well as the break room so that anyone, including
patients, visitors, and the cleaning staff, could have easily viewed or taken them. Toone
Aff. ¶¶ 12-13. Aspen West employees also reportedly disposed of provider schedules on
a frequent basis in office trash cans without shredding them or otherwise disposing of
them in a secure manner.7 Id. ¶ 15; Puntney Dep. at 58.
7
Ms. Toone testified that she, however, would shred by hand the provider schedules she
(continued...)
10
Alleged Misconduct of Other Employees
There is evidence in the record before us indicating that Aspen West employees
besides Ms. Hofmann removed provider schedules from the office on certain occasions,
but were not disciplined. Ms. Bartley, for example, testified that she had on a number of
occasions taken provider schedules home in her pocket accidentally and that, although
she was sure other employees had done the same, she was unaware of any employee other
than Ms. Hofmann being disciplined for removing provider schedules from the Aspen
West office. Bartley Aff. ¶¶ 9, 14. Ms. Toone attested to having witnessed other
employees remove provider schedules from the office, including Stacey Mackey, who left
provider schedules in her vehicle that were folded in such a way that anyone riding in the
passenger seat could have read the information contained therein. Toone Aff. ¶ 18.
Although it appears that Ms. Mackey did not receive discipline for such behavior, there is
also no indication that Aspen Dental was aware of her actions. Finally, when Aspen West
employees were asked in the wake of Ms. Hofmann’s termination whether they had ever
engaged in similar behavior, to wit, removing provider schedules from the premises,
Jennifer Magee, one of Ms. Hofmann’s co-workers, stated that on one occasion she may
have accidentally taken a provider schedule home in her pocket, but that she returned it
the next day. Ms. Magee did not receive any form of discipline after this admission.
Brown Dep. at 113-14.
7
(...continued)
was given before disposing of them. Toone Aff. ¶ 17.
11
Ms. Hofmann alleges that a number of other employees also complained around
the office about each other and about Ms. Daly, but none was disciplined as she was for
being “negative” or gossiping. According to Ms. Hofmann, although she and co-worker
Ms. Toone often bickered back and forth, she (Ms. Hofmann) was the only one who was
ever disciplined for such behavior. One of Ms. Hofmann’s fellow dental assistants, Ms.
Mackey, testified that Ms. Puntney (also a dental assistant) had complained to her about
Ms. Daly on a number of occasions and that she, herself, had complained about most of
her co-workers, including Ms. Toone, Ms. Brown, Megan Boger, and Dr. Woo, but that
she had neither been counseled or otherwise disciplined for these complaints. Although
the evidence conclusively shows that other employees were not disciplined for such
behavior, Ms. Brown, the current office manager at Aspen West, testified by deposition
that “everyone had an equal part in any drama that occurred in our office” because
“[e]veryone stirs stuff up.” Brown Dep. at 42.
The Instant Litigation
On March 10, 2010, Ms. Hofmann filed her original complaint in the instant
lawsuit alleging violations of FLSA and Title VII retaliation. She subsequently amended
her complaint thirteen months later, on April 29, 2011, to add a claim for unpaid overtime
wages pursuant to the FLSA. On September 7, 2011, she sought to change her Title VII
retaliation claim to allege retaliation in violation of the ADA and ADEA. The three
motions currently before us are: Plaintiff’s Motion for Summary Judgment on the FLSA
12
retaliation claim, Defendant’s Motion for Summary Judgment on both retaliation claims,
and Defendant’s Motion to Disqualify Plaintiff’s Counsel. We address each in turn
below, beginning with the motion to disqualify counsel.
Legal Analysis
I.
Motion to Disqualify
Aspen Dental has moved to disqualify Ms. Hofmann’s attorney, Mary Schiff,
arguing that Attorney Schiff’s continued representation of her in this matter is violative of
Rules 1.2(d), 1.16., and 3.7 of the Indiana Rules of Professional Conduct.
A.
Indiana Rule of Professional Conduct 3.7
Aspen Dental contends that Attorney Schiff must be disqualified from representing
Ms. Hofmann in this matter because Schiff’s “ongoing involvement regarding relevant
facts has rendered her a necessary witness under Rule 3.7 of the Indiana Rules of
Professional Conduct.” Def.’s Br. at 15. Rule 3.7 provides in relevant part that:
(a) A lawyer shall not act as advocate at a trial in which the lawyer is likely
to be a necessary witness unless:
(1) the testimony relates to an uncontested issue;
(2) the testimony relates to the nature and value of legal services
rendered in the case; or
(3) disqualification of the lawyer would work substantial hardship on
the client.
Being both an advocate and a witness “can prejudice the tribunal and the opposing party
and can also involve a conflict of interest between the lawyer and client.” Ind. R. Prof.
13
Conduct 3.7, Cmt. 1. Thus, “[t]he opposing party has proper objection where the
combination of roles may prejudice that party’s rights in the litigation.” Id., Cmt. 2. In
situations such as the case at bar where exceptions (1) and (2) are not applicable, courts
apply a balancing test that weighs the interest of the client and the interests of the
opposing party to determine if disqualification is necessary. See Hutchinson v.
Spanierman, 190 F.3d 815, 828 (7th Cir. 1999).
The primary consideration under Rule 3.7 is whether the attorney is a “necessary
witness.” Knowledge A-Z, Inc. v. Sentry, Ins., 857 N.E.2d 411, 418 (Ind. Ct. App. 2007)
(citations omitted). “A necessary witness is not the same thing as the ‘best’ witness.”
Harter v. University of Indianapolis, 5 F. Supp. 2d 657, 665 (S.D. Ind. 1998). “If the
evidence that would be offered by having an opposing attorney testify can be elicited
through other means, then the attorney is not a necessary witness. In addition, of course,
if the testimony is not relevant or is only marginally relevant, it certainly is not
necessary.” Id. If the court determines that the attorney is a necessary witness, it must
then assess whether the client’s interest in continued representation outweighs the risk of
prejudice to the opposing party. Hutchinson, 190 F.3d at 828.
Here, Aspen Dental asserts that Attorney Schiff is a necessary witness because she
will be required: (1) to admit the July 31, 2009 letter she authored addressing Ms.
Hofmann’s contact with the DOL as well as to testify as to its content and meaning; and
(2) to testify regarding the circumstances surrounding Ms. Hofmann’s removal and
subsequent delivery to Attorney Schiff of the provider schedules. We address these
14
arguments in turn.
In the underlying lawsuit, Ms. Hofmann relies on the July 31, 2009 letter written
by Attorney Schiff to Aspen Dental to establish that Defendant was aware before it
terminated her that she had “filed a complaint with the DOL” and thus had engaged in
protected activity under the FLSA. Defendant contends that this is a mischaracterization
of the content of the letter, which states only that Ms. Hofmann “talked with the DOL,”
not that she filed a written complaint. In light of this discrepancy, Defendant asserts that
it intends to call Attorney Schiff to testify as to the letter’s “content and disputed
meaning.” Aspen Dental’s rationale supporting the necessity of Attorney Schiff’s
testimony is based on the Seventh Circuit’s distinction between verbal and written
complaints under the FLSA discussed in Kasten v. Saint-Gobain Performance Plastics
Corp., 570 F.3d 834 (7th Cir. 2009), vacated, 131 S.Ct. 1325 (2011), in which the court
held that verbal complaints were insufficient to constitute protected activity under the
Act.
However, the Supreme Court recently vacated and remanded the Seventh Circuit’s
decision in Kasten, holding that a verbal complaint is sufficient to constitute protected
activity under the FLSA. 131 S.Ct. at 1330-36. Thus, Defendant’s argument regarding
the necessity of Attorney Schiff’s testimony regarding the “disputed meaning” of the July
31, 2009 letter is moot. The letter speaks for itself and there are available witnesses other
than Attorney Schiff who can admit the document. Accordingly, we see no reason why
Attorney Schiff’s anticipated testimony regarding the July 31, 2009 letter would be
15
necessary.
Aspen Dental next asserts that Attorney Schiff is a necessary witness whom it
intends to call to testify as to “her involvement in Plaintiff’s misappropriation of
confidential health information from Aspen Dental and Plaintiff’s purported
whistleblower status [under HIPAA].” Def.’s Reply at 9. Aspen Dental contends that
Attorney Schiff’s testimony regarding the extent to which she instructed Ms. Hofmann to
make notes on the provider schedules and disclose them to her is necessary in order to
determine whether Ms. Hofmann’s actions did in fact fall within HIPAA’s whistleblower
provision because, if Attorney Schiff requested that Ms. Hofmann collect the information,
Hofmann is not a whistleblower. See Standards for Privacy of Individually Identifiable
Health Information, 64 Fed. Reg. 59,918-01 (Nov. 3, 1999) (Section § 164.502(j) does
“not apply to information requested ... by attorneys, even prior to an investigation or law
suit. It would apply only to disclosure initiated by a member of an entity’s workforce
....”).
However, we view the issue of whether Ms. Hofmann was in fact a whistleblower
under HIPAA as largely irrelevant to resolving her FLSA retaliation claim. In support of
that claim, Ms. Hofmann argues that Aspen Dental’s proffered non-discriminatory reason
for her termination, to wit, her alleged HIPAA violation, was pretext for retaliation, in
violation of the FLSA. Accordingly, the relevant question is not whether Ms. Hofmann’s
conduct actually violated HIPAA, but merely whether, at the time it terminated her,
Aspen Dental honestly believed that her conduct violated HIPAA. E.g., O’Leary v.
16
Accretive Health, Inc., ___ F.3d ___, 2011 WL 4375684, *8 (7th Cir. Sept. 21, 2011)
(“The question is not whether the employer’s stated reason was inaccurate or unfair, but
whether the employer honestly believed the reasons it has offered to explain the
discharge.”) (citation omitted). Thus, we are not persuaded that Attorney Schiff’s
testimony regarding the circumstances surrounding Ms. Hofmann’s removal and
disclosure to Schiff of the provider schedules is material to resolving the claims at issue.
For these reasons, we hold that Attorney Schiff’s continued representation of Ms.
Hofmann does not portend or otherwise involve a violation of Rule 3.7.
B.
Indiana Rules of Professional Conduct 1.2 and 1.16
Aspen Dental also argues that Attorney Schiff’s knowledge of Ms. Hofmann’s
removal and disclosure of the provider schedules necessitates disqualification, pursuant to
Rules 1.2(d) and/or 1.16 of the Indiana Rules of Professional Conduct. Rule 1.2(d)
provides: “A lawyer shall not counsel a client to engage, or assist a client, in conduct that
the lawyer knows is criminal or fraudulent, but a lawyer may discuss the legal
consequences of any proposed course of conduct with a client and may counsel or assist a
client to make a good faith effort to determine the validity, scope, meaning or application
of the law.” IND. R. PROF. CONDUCT 1.2(d). The comments to Rule 1.2(d) address the
situation in which, during the course of representation, an attorney discovers her client is
engaging in illegal conduct. In such circumstances, “[a] lawyer may not continue
assisting a client in conduct that the lawyer originally supposed was legally proper but
then discovers is criminal or fraudulent. The lawyer must, therefore, withdraw from the
17
representation of the client in the matter.” IND. R. PROF. CONDUCT 1.2, Cmt. 10.
Alternatively, Aspen Dental contends that Attorney Schiff violated Rule 1.16, which
provides that “a lawyer shall not represent a client, or where representation has
commenced, shall withdraw from the representation of a client if ... the representation will
result in violation of the Rules of Professional Conduct or other law.” IND. R. PROF.
CONDUCT 1.16(a)(1).
Aspen Dental argues that, although it is not entirely clear what actually occurred,
Attorney Schiff either instructed Ms. Hofmann to remove and disclose the provider
schedules, thereby counseling Hofmann to violate HIPAA, or, at the very least, Schiff
should have known that, in accepting documents containing individually identifying
health information, Hofmann’s disclosure of such was a violation of HIPAA. Defendant
contends that Attorney Schiff thus knowingly violated Rule 1.2(d) and/or Rule 1.16,
either by counseling or assisting Ms. Hofmann in engaging in conduct violative of
HIPAA or by refusing to return the provider schedules to Aspen Dental and continuing to
represent Ms. Hofmann after Aspen alerted Schiff that she was in possession of
confidential health information. Plaintiff rejoins that because her disclosure of the
provider schedules to Attorney Schiff was protected activity under HIPAA’s
whistleblower provision, Schiff’s acceptance of those documents was not violative of
either Rule 1.2(d) or Rule 1.16.
Again, we do not find disqualification to be an appropriate remedy in the situation
before us. Initially, we are not persuaded, based solely on the facts presented to us for
18
purposes of deciding this motion to disqualify, that Attorney Schiff’s receipt of the
provider schedules and failure to return them to Aspen Dental clearly violates Rules
1.2(d) or 1.16. Moreover, if Defendant believes that Attorney Schiff violated Rules 1.2
and/or 1.16 during her representation of Ms. Hofmann, there are alternative avenues of
enforcement of the disciplinary code available to be pursued, if necessary. However, the
parties have made no mention of any sort of disciplinary procedures affecting or growing
out of this litigation that have been initiated against Attorney Schiff. These reasons,
coupled with the fact that, as discussed above, we find that Attorney Schiff’s involvement
in Ms. Hofmann’s alleged misappropriation of the provider schedules neither creates a
conflict of interest that would prevent her representation of Ms. Hofmann nor is relevant
to resolving the narrow issues presented in this litigation, fail to call into question
Attorney Schiff’s ability to effectively advocate for her client or to suggest that her
alleged misconduct threatens to seriously undermine her effectiveness in this matter so as
to require disqualification. For these reasons, Defendant’s Motion to Disqualify is
DENIED.
II.
Cross-Motions for Summary Judgment
A.
Standard of Review
Summary judgment is appropriate when the record shows that there is “no genuine
issue as to any material fact and that the moving party is entitled to a judgment as a matter
of law.” Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
Disputes concerning material facts are genuine where the evidence is such that a
19
reasonable jury could return a verdict for the non-moving party. Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986). In deciding whether genuine issues of material
fact exist, the court construes all facts in a light most favorable to the non-moving party
and draws all reasonable inferences in favor of the non-moving party. See id. at 255.
However, neither the “mere existence of some alleged factual dispute between the
parties,” id. at 247, nor the existence of “some metaphysical doubt as to the material
facts,” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986), will
defeat a motion for summary judgment. Michas v. Health Cost Controls of Illinois, Inc.,
209 F.3d 687, 692 (7th Cir. 2000).
The moving party “bears the initial responsibility of informing the district court of
the basis for its motion, and identifying those portions of [the record] which it believes
demonstrate the absence of a genuine issue of material fact.” Celotex, 477 U.S. at 323.
The party seeking summary judgment on a claim on which the non-moving party bears
the burden of proof at trial may discharge its burden by showing an absence of evidence
to support the non-moving party's case. Id. at 325.
Summary judgment is not a substitute for a trial on the merits, nor is it a vehicle
for resolving factual disputes. Waldridge v. Am. Hoechst Corp., 24 F.3d 918, 920 (7th
Cir. 1994). Thus, after drawing all reasonable inferences from the facts in favor of the
non-movant, if genuine doubts remain and a reasonable fact-finder could find for the
party opposing the motion, summary judgment is inappropriate. See Shields Enter., Inc.
v. First Chicago Corp., 975 F.2d 1290, 1294 (7th Cir. 1992); Wolf v. City of Fitchburg,
20
870 F.2d 1327, 1330 (7th Cir. 1989). But if it is clear that a plaintiff will be unable to
satisfy the legal requirements necessary to establish her case, summary judgment is not
only appropriate, but mandated. See Celotex, 477 U.S. at 322; Ziliak v. AstraZeneca LP,
324 F.3d 518, 520 (7th Cir. 2003). Further, a failure to prove one essential element
“necessarily renders all other facts immaterial.” Celotex, 477 U.S. at 323.
Courts often confront cross-motions for summary judgment because Rules 56(a)
and (b) of the Federal Rules of Civil Procedure allow both plaintiffs and defendants to
move for such relief. “In such situations, courts must consider each party’s motion
individually to determine if that party has satisfied the summary judgment standard.”
Kohl v. Ass’n. of Trial Lawyers of Am., 183 F.R.D. 475 (D.Md.1998). Thus, in
determining whether genuine and material factual disputes exist in this case, the Court has
considered the parties’ respective memoranda and the exhibits attached thereto, and has
construed all facts and drawn all reasonable inferences therefrom in the light most
favorable to the respective non-movant. Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574 (1986).
B.
Retaliation Claims
Ms. Hofmann contends that the two nondiscriminatory reasons Aspen Dental has
cited as grounds for her termination, to wit, that she removed and disclosed provider
schedules to her attorney in violation of HIPAA and that she was “negative” and
disruptive in the workplace, are pretextual, and that the actual reason she was terminated
was in retaliation for filing a claim with the DOL and/or a charge with the EEOC alleging
21
discrimination in violation of the ADA and ADEA. In advancing this claim, it appears
from Ms. Hofmann’s briefing that she is relying solely on the direct method of proof to
demonstrate retaliation.
Under the direct approach, a plaintiff must present sufficient evidence to establish
that: (1) she engaged in protected conduct; (2) she suffered an adverse employment
action; and (3) there was a causal connection between the two. Jones v. Res-Care, Inc.,
613 F.3d 665, 671 (7th Cir. 2010) (citation omitted). “A plaintiff can prevail under the
direct method by showing an admission of discrimination or by ‘constructing a
convincing mosaic of circumstantial evidence that allows a jury to infer intentional
discrimination by the decisionmaker.’” Ridings v. Riverside Med. Ctr., 537 F.3d 755, 771
(7th Cir. 2008) (quoting Phelan v. Cook County, 463 F.3d 773, 779 (7th Cir. 2006)). In
addition to these elements, the direct method of proof contains an inherent requirement
that the decisionmaker have actual knowledge of the protected activity. Luckie v.
Ameritech Corp., 389 F.3d 708, 715 (7th Cir. 2004). There is no dispute that Ms.
Hofmann’s September 30, 2009 termination constitutes an adverse employment action,8
8
In addition to her termination, Ms. Hofmann contends that she was also treated
adversely when Aspen Dental held a meeting upon her re-hire to alert her co-workers that
management would be watching her very closely and when she was required to submit to
counseling on September 24, 2009 because of her poor attitude, even though other employees
did not receive discipline for similar conduct. Even if true, these complaints do not amount to
actionable adverse employment actions. “While adverse employment actions extend beyond
readily quantifiable losses, not everything that makes an employee unhappy is an actionable
adverse action.” Nagle v. Village of Calumet Park, 554 F.3d 1106, 1116 (7th Cir. 2009)
(quoting Nichols v. S. Ill. Univ.-Edwardsville, 510 F.3d 772, 780 (7th Cir. 2007)). “Rather, an
employee must show that material harm has resulted from . . . the challenged actions.” Traylor
(continued...)
22
so we focus solely on whether she engaged in protected conduct under the relevant
statutes, whether Aspen Dental was aware of that activity at the time it took action against
her, and whether that conduct was causally related to her termination.
1.
Protected Activity
As we have noted previously, Ms. Hofmann engaged in protected activity under
the ADA, ADEA, and the FLSA when she filed a charge with the EEOC and a complaint
with the DOL on July 1, 2009, and July 16, 2009, respectively. The July 31, 2009 letter
written by Attorney Schiff referencing Hofmann’s “FLSA and discrimination claims
against Aspen Dental” and stating that Hofmann had “filed an EEOC charge and ha[d]
also talked with the DOL, wage and hour division” was sufficient to provide notice to
Aspen Dental that Hofmann had engaged in protected activity under the ADA and ADEA
as well as the FLSA. See Kasten, 131 S.Ct. at 1330-36 (holding that a verbal complaint is
sufficient to constitute protected activity under the FLSA).
In addition to filing a complaint with the DOL, Ms. Hofmann contends that she
8
(...continued)
v. Brown, 295 F.3d 783, 788 (7th Cir. 2002) (internal quotations omitted). In the Seventh
Circuit, a plaintiff must demonstrate that he or she was subject to “a significant change in
employment status, such as hiring, firing, failing to promote, reassignment with significantly
responsibilities, or a decision causing a significant change in benefits.” Hardy v. Univ. of Ill. at
Chi., 328 F.3d 361, 364 (7th Cir. 2003) (internal quotation marks omitted). Neither the meeting
nor the verbal counseling Ms. Hofmann received resulted in any material change in her
employment sufficient to constitute an adverse employment action. Because Ms. Hofmann is
unable to demonstrate that these two incidents satisfy the second prong of the direct analysis, we
cannot find that the meeting or the verbal counseling were retaliatory. Sublett v. John Wiley &
Sons, Inc., 463 F.3d 731, 740 (7th Cir. 2006) (“Failure to satisfy any one element of the prima
facie case is fatal to an employee’s retaliation claim.”) (citation omitted). Thus, the only adverse
employment action we consider in our analysis is Ms. Hofmann’s termination.
23
engaged in a second form of protected activity under the FLSA,9 when she removed the
provider schedules on which she had taken notes that she claims related to her wage
complaints and provided them to her attorney in furtherance of her FLSA claim. Ms.
Hofmann maintains that Aspen Dental was made aware of her conduct on September 24
or 25, 2009, when Hofmann’s co-worker, Ms. Mackey, told Ms. Decker that Hofmann
had given the provider schedules to her attorney in furtherance of a claim other than her
EEOC claim. Aspen Dental rejoins that Ms. Hofmann’s conduct, to wit, the removal of
confidential documents she was given by her employer and the subsequent disclosure of
those documents to her attorney, does not constitute protected activity under the antiretaliation provision of the FLSA, and that, even if it did, genuine issues of material fact
remain regarding whether Aspen Dental was aware that she removed the provider
schedules in furtherance of her FLSA claim.
Whether Ms. Hofmann’s act of removing the provider schedules that she claims
contained notes she had taken relevant to her FLSA claim and disclosing them to her
attorney in furtherance of that claim constitutes protected activity under the Act is a close
question. The FLSA’s anti-retaliation provision provides in relevant part that it is
unlawful for an employer “to discharge ... any employee because such employee has filed
any complaint or instituted or caused to be instituted any proceeding under [the Act].” 29
9
Ms. Hofmann contends that this conduct constitutes protected activity under both the
FLSA and HIPAA’s whistleblower provision. However, because Ms. Hofmann has not filed a
claim alleging that she was retaliated against in violation of HIPAA, we address only whether
her conduct constitutes protected activity under the FLSA.
24
U.S.C. § 215(a). The Supreme Court recently noted that the “complaint” clause of the
anti-retaliation provision of the FLSA requires an interpretation “that would provide
‘broad rather than narrow protection to the employee.’” Kasten, 131 S.Ct. at 1334
(quoting NLRB v. Scrivener, 405 U.S. 117, 122 (1972)) (interpreting the FLSA’s
“complaint” clause to include oral complaints). Because the Seventh Circuit has not
addressed the precise parameters of “protected activity” under the FLSA, we look to the
manner in which the courts in our sister circuits have interpreted the provision for
guidance.10 In McKenzie v. Renberg’s Inc., 94 F.3d 1478 (10th Cir. 1996), the Tenth
Circuit held that to engage in protected activity “the employee must step outside ... her
role of representing the company and either file (or threaten to file) an action adverse to
the employer, actively assist other employees in asserting FLSA rights, or otherwise
engage in activities that reasonably could be perceived as directed towards the assertion
of rights protected by the FLSA.” Id. at 1486-87.
Assuming that the notes Ms. Hofmann made on the provider schedules were
10
The parties have pointed us to a number of cases in which the Seventh Circuit and
courts in other jurisdictions have analyzed whether the removal and/or disclosure of confidential
documents in furtherance of a claim constitutes protected activity for purposes of Title VII.
However, while we can often rely on Title VII retaliation cases for guidance as to ways to
interpret such issues as causation and temporal proximity under the FLSA, these cases are not
illustrative when it comes to determining what constitutes protected activity, since that term is
defined by statute and the anti-retaliation provision contained in 42 U.S.C. § 2000e-3(a), which
includes protection for employees who “oppos[e] any [unlawful] practice” or “participat[e] in
any manner” is broader than the analogous FLSA provision. Thus, such cases provide limited
assistance to us in undertaking a proper interpretation of the contours of protected activity under
the FLSA. See, e.g., Randolph v. ADT Sec. Servs., Inc., 2011 WL 3476898 (D.Md. Aug. 8,
2011).
25
relevant to her wage claim as she asserts, these activities, had they been known at the time
by Aspen Dental might reasonably have been “perceived as being directed toward the
assertion of [her] rights protected by the FLSA.” However, genuine issues of material
fact remain regarding whether the notes Ms. Hofmann made on the provider schedules
were in fact made as an aid to her pursuit of her FLSA claim, and, if they were, whether
the decisionmakers at Aspen Dental were aware of such a fact.11 Thus, with such
unsettled factual issues, we cannot, at least at this stage of the litigation, determine as a
matter of law whether Ms. Hofmann’s removal and disclosure of the provider schedules
constitutes protected activity under the FLSA.
2.
Causation
Even if Ms. Hofmann’s removal and disclosure of the provider schedules were not
protected activity under the FLSA, her actions are nonetheless relevant to a determination
of whether the protected activity she did engage in, to wit, the filing of a complaint with
the DOL and/or a charge of discrimination with the EEOC, were causally related to her
termination. To establish causation using circumstantial evidence under the direct
method of proof, a plaintiff may use evidence tending to show that the defendant’s
proffered non-discriminatory reason for termination is merely a pretext for retaliation.
See Venturelli v. ARC Cmty. Servs., Inc., 350 F.3d 592, 601 (7th Cir. 2003) (explaining
11
It is not clear from the record whether Ms. Decker understood Ms. Mackey to be
referring to Ms. Hofmann’s FLSA claim when Mackey reported that Hofmann had removed the
provider schedules in furtherance of a claim against the company other than the EEOC claim.
Ms. Decker testified that she was aware only that Ms. Hofmann had removed the provider
schedules in furtherance of some claim.
26
that the “pretext” category of circumstantial evidence under the direct method is
substantially the same as the evidence required under the indirect method). In support of
her retaliation claims, Ms. Hofmann relies heavily on this evidence in an effort to prove
causation. In assessing pretext, “[t]he question is not whether the employer’s stated
reason was inaccurate or unfair, but whether the employer honestly believed the reasons it
has offered to explain the discharge.” O’Leary v. Accretive Health, Inc., ___ F.3d ___,
2011 WL 4375684, at *8 (7th Cir. Sept. 21, 2011) (citing Montgomery v. Am. Airlines,
Inc., 626 F.3d 382, 397 (7th Cir. 2010).
Although it is not clear whether Aspen Dental’s decision makers knew precisely if
it was her FLSA claim as opposed to her EEOC claim that Ms. Hofmann was trying to
further by removing the provider schedules, it is undisputed that Ms. Decker was at least
aware that she had removed them and had disclosed them to her attorney in furtherance of
one of her claims against the company. In light of this knowledge, the fact that she was
terminated on the first day after returning to work following their having learned of her
conduct and its connection to her legal claims could be viewed by a jury as evidence
supporting Hofmann’s contention that the actual reason she was terminated by Aspen was
for having filed a complaint with the DOL and/or the EEOC, and not, as Aspen Dental
contends, for removing and disclosing the provider schedules in violation of HIPAA.
Other genuine issues of material fact relevant to the pretext inquiry remain as well
so as to make summary judgment for either party inappropriate. The apparent lack of
investigation conducted by Aspen Dental regarding the reasons for Ms. Hofmann’s
27
removal of the provider schedules before it made its termination decision, combined with
the disputed evidence regarding the allegedly lackadaisical manner in which the company
monitored the dissemination and use of the provider schedules up until it terminated Ms.
Hofmann, raise issues regarding whether the company truly believed that Ms. Hofmann’s
removal of the provider schedules constituted a HIPAA violation or whether that
explanation was merely a pretext for terminating her for pursuing her legal claims against
Aspen Dental.12 In short, too many disputed material facts as well as a plethora of
credibility issues that cannot properly be resolved at this stage of the litigation remain,
thus precluding summary judgment for either side. Accordingly, both Plaintiff’s and
Defendant’s Motions for Summary Judgment are DENIED.
III.
Conclusion
For the reasons detailed above, Defendant’s Motion to Disqualify, Defendant’s
Motion for Summary Judgment, and Plaintiff’s Motion for Summary Judgment are all
DENIED.
IT IS SO ORDERED.
_______________________________
SARAH EVANS BARKER, JUDGE
United States District Court
Southern District of Indiana
09/29/2011
Date: __________________________
12
Neither party devotes significant attention in its briefing to Aspen Dental’s other
nondiscriminatory reason given for Ms. Hofmann’s termination, to wit, that she was “negative”
and disruptive in the workplace. However, we find that there is sufficient disputed evidence in
the current record regarding other similarly situated employees who also allegedly engaged in
similar behavior, but were not disciplined or terminated for that behavior. Resolving these issues
will require credibility determinations that are not appropriately made on summary judgment.
Accordingly, these arguments will need to be developed further for resolution at trial.
28
Copies to:
Jean Marie Blanton
ZIEMER STAYMAN WEITZEL & SHOULDERS LLP
jblanton@zsws.com
Rhett David Gonterman
ZIEMER STAYMAN WEITZEL & SHOULDERS LLP
rgonterman@zsws.com
Scott James Preston
LITTLER MENDELSON, P.C.
spreston@littler.com
Mary Lee Schiff
ZIEMER STAYMAN WEITZEL & SHOULDERS
LSchiff@zsws.com
29
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