Scarborough v. Federated Mutual Insurance Company
Filing
129
MEMORANDUM OPINION AND ORDER - Defendant Federated's Motion for Summary Judgment (Doc. No. 123 ) is GRANTED.(Written Opinion) Signed by Judge Donovan W. Frank on 3/29/2019. (las)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Jonathan Scarborough,
Civil No. 15-1633 (DWF/KMM)
Plaintiff,
v.
MEMORANDUM
OPINION AND ORDER
Federated Mutual Insurance Company,
Defendant.
David H. Redden, Esq., and John A. Fabian, III, Esq., Fabian May & Anderson, counsel
for Plaintiff.
Britt M. Gilbertson, Esq., Danielle W. Fitzsimmons, Esq., and Gregory J. Stenmoe, Esq.,
Briggs & Morgan, PA, counsel for Defendant.
INTRODUCTION
This matter is before the Court on a Motion for Summary Judgment brought by
Defendant Federated Mutual Insurance Company (generally, “Federated”). (Doc.
No. 123.) Plaintiff Jonathan Scarborough filed a claim against Federated alleging that he
was terminated in violation of Minnesota’s Whistleblower Act (“MWA”), Minnesota
Statute §§ 181.931-.932. For the reasons set forth below, the Court grants Federated’s
motion.
BACKGROUND
I.
Factual Background
The facts of this case were previously set forth in an Order dated February 1,
2017. (Doc. No. 88.) In that Order, the Court granted Federated summary judgment on
Scarborough’s MWA claim. Plaintiff appealed and the Eighth Circuit Court of Appeals
vacated and remanded the case for reconsideration in light of the Minnesota Supreme
Court’s decision in Friedlander v. Edwards Lifescis., LLC, 900 N.W.2d 162, 166 (Minn.
2017). (Doc. No. 113.)
Federated is a national mutual insurance company that offers insurance primarily
to businesses and business owners. Scarborough was a Regional Marketing Manager
(“RMM”) for Federated for the Central Region, which includes Kansas, Missouri, and
Nebraska. (Doc. No. 126 (“Fitzsimmons Decl.”) ¶ 3, Ex. 1. (“Scarborough Dep.”) at 12;
id. ¶ 3, Ex. 9.) He had held that position since 2012. Scarborough supervised six District
Marketing Managers (“DMM”) and his role as RMM included reviewing and approving
DMMs’ expense accounts. (Id. ¶ 3, Ex. 10, ¶ 16.)
One of Scarborough’s DMMs was Frederick Johnston. On July 1, 2014,
Johnston’s assistant submitted Johnston’s expense report for his company credit card.
(Id. ¶ 3, Ex. 16.) The report included a personal expense for custom framing. (Id. ¶ 3,
Ex. 15.) The next day, the Marketing Administration Manager Rhonda Kath e-mailed
Johnston about the framing expense. (Id. ¶ 3, Ex. 15; id. ¶ 3, Ex. 4 (“Kath Dep.”) at 28.)
Johnston lied to Kath about the expense, claiming that it was for laminating services and
printer ink. (Fitzsimmons Decl. ¶ 3, Ex. 15; Kath Dep. at 25-26.) Unconvinced, Kath
2
inquired directly with the store and learned that the expense was for framing pictures of
Johnston’s European vacation. (Fitzsimmons Decl. ¶ 3, Ex. 15; Kath Dep. at 35.)
With the lie rooted out, Kath e-mailed her supervisor and General
Manager-Marketing Services, Martha Kearin, who brought in Scarborough’s supervisor
Michael Pennington. (Fitzsimmons Decl. ¶ 3, Ex. 17.) Pennington then updated
Scarborough. (Id. ¶ 3, Ex. 18.) On July 7, 2014, Pennington and Scarborough met to
discuss Johnston’s expenses. During this meeting, Scarborough mentioned that Johnston
liked “nice and fancy” things and added by way of example that Johnston liked to hold
meetings at the law offices of Husch Blackwell, even though he could probably find a
less expensive venue. (Scarborough Dep. at 68-69.) After hearing that, Pennington
replied, “What are you talking about? [Johnston] gets those meeting rooms for free.”
(Id.) Scarborough then explained that Johnston had been submitting invoices for those
meetings. (Id.) Their conversation ended with Scarborough telling Pennington that he
would investigate the issue further. (Id. at 52, 69.)
On July 14, 2014, Scarborough exchanged e-mails with Husch Blackwell, which
confirmed that the meeting rooms were provided free of charge. (Fitzsimmons Decl. ¶ 3,
Ex. 20.) Scarborough forwarded the e-mails to Pennington, and they agreed to talk with
Johnston about the invoices in addition to the framing expense. (Id.)
Kearin continued her investigation into Johnston’s expense reports from July 2012
to July 2014, along with invoices Johnston submitted to support his out-of-pocket
expenses. (Id. ¶ 3, Ex. 22.) She forwarded the reports and invoices to Pennington, who
forwarded them to Scarborough. (Id. ¶ 3, Exs. 23-24.) Her report showed that Johnston
3
had submitted, and Scarborough had approved, over $5,000 in out-of-pocket expenses
related to the Husch Blackwell meeting rooms in amounts ranging from $250 to $350 per
meeting. (Id. ¶ 3, Exs. 24-25; Scarborough Dep. at 82-84.)
On July 21, 2014, Scarborough and Pennington met with Johnston. (Scarborough
Dep. at 87-88; Fitzsimmons Decl. ¶ 3, Ex. 2 (“Pennington Dep.”) at 109.) Prior to the
meeting, Pennington asked if Scarborough had prior knowledge about the false invoices,
and Scarborough denied it. (See Fitzsimmons Decl. ¶ 3, Ex. 26.) During the meeting,
Johnston admitted to submitting fraudulent invoices and receiving payment for them.
(Pennington Dep. at 109-111.) Later that day, Johnston called Pennington to tell him that
Scarborough had known about Johnston’s scheme and that Scarborough had suggested to
another DMM, Braxton Weaver, that he do the same thing. (Fitzsimmons Decl. ¶ 3,
Ex. 26; id. ¶ 3, Ex. 5 (“Johnston Dep.”) at 170-72.)
On July 24, 2014, Scarborough met with Pennington and Pennington’s supervisor,
Mike Kerr. (Fitzsimmons Decl. ¶ 3, Ex. 26.) At the July 24 meeting, Kerr asked
Scarborough whether he had prior knowledge of Johnston’s invoicing practice. Again,
Scarborough “aggressively” denied having any prior knowledge. (Id.)
Pennington and Kerr continued to investigate whether other DMMs had also
falsified invoices. For example, Pennington reached out to Weaver to follow up on the
claim that Scarborough knew about Johnston’s fraudulent expenses and recommended
the practice to other DMM’s. (Id. ¶ 3, Ex. 26; id. ¶ 3, Ex. 7 (“Weaver Dep.”) at 45-48.)
When asked if Scarborough, Weaver’s supervisor, was aware that Johnston was
submitting false Husch Blackwell invoices, Weaver responded “yes.” (Weaver Dep. at
4
45-47, 52-53.) Weaver also answered “yes” when asked if he told Pennington that
Scarborough recommended to him that he contact Johnston for “more details on how to
do the same with respect to submitting fraudulent practices as an avenue to pocket
money.” (Id. at 61.)
On July 30, 2014, Scarborough met with Kerr and Pennington. (Fitzsimmons
Decl. ¶ 3, Ex. 3 (“Kerr Dep.”) at 70; Scarborough Dep. at 55.) At this meeting,
Scarborough stated that Johnston’s actions may have been illegal. Scarborough also
allegedly told Pennington and Kerr that he suspected that Johnston was violating tax law
and that Federated likely violated tax laws because it had not applied the proper
withholdings to the funds that Johnston had taken. (Scarborough Dep. at 60.) Kerr and
Pennington either deny or do not remember that Scarborough brought up tax violations or
other illegalities related to Johnston’s false invoices. (Kerr Dep. at 86; Pennington Dep.
at 165-66.) In addition, at the meeting, Kerr confronted Scarborough about his failure to
use the company’s travel team when scheduling work travel and Scarborough’s alleged
misuse of referral credits on a company cruise. (Scarborough Dep. at 55-58.)
On August 4, 2014, Pennington, Scarborough, and Johnston met in Kansas City.
(Id. at 110; Pennington Dep. at 200, 206-07.) Pennington explained that due to the
findings regarding Johnston’s unethical practices, he could not continue in management
at Federated. Ultimately, Johnston was offered a choice of resigning or being demoted.
After Johnston left the meeting, Pennington then issued a warning letter to Scarborough
because Scarborough continued to deny his prior knowledge of Johnston’s fraudulent
scheme. The letter read in part:
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Based upon conversations you and I had many months prior to this matter
arising, as well as other information I have received during the
investigation, I find that your abject denials lack credibility and that you
were not honest with Mike and me – even though we allowed you multiple
opportunities to tell us the truth during separate discussions.
(Fitzsimmons Decl. ¶ 3, Ex. 28.) Scarborough was allowed to continue in his RMM
position, but from Federated’s perspective, Scarborough was on thin ice. (Id. (“[A]ny
future misconduct will likely result in the termination of your employment with
Federated.”).)
By August 20, 2014, Federated would demote and then ultimately fire
Scarborough. What happened between August 4 and August 20 depends on the party you
ask. According to Scarborough, Pennington manufactured evidence to create grounds to
have Scarborough fired. According to Federated, after August 4, it learned that
Scarborough had charged personal expenses to his company credit card and that
Scarborough began spreading rumors that DMMs were being fired. (Id. ¶ 3, Ex. 31; Kerr
Dep. at 103.)
After his demotion on August 13, 2014, Scarborough was given two options to
remain at Federated: return to the field as Marketing Representative or work in Special
Accounts. (Kerr Dep. at 152.) Scarborough chose to move to Special Accounts in
Tennessee. (Fitzsimmons Decl. ¶ 3, Ex. 38.) Federated agreed to pay for the move.
(Kerr Dep. at 157.)
On August 18, 2014, Kerr learned that Scarborough had called another RMM,
Christopher Terry, and told Terry that Federated was going to terminate his employment.
(Id. at 163-164; Fitzsimmons Decl. ¶ 3, Ex. 8 (“Terry Dep.”) at 26, 30-31, 39-40, 51-52;
6
see also Fitzsimmons Decl. ¶ 3, Ex. 43 at 3.) 1 Federated maintains that there was no
truth to Scarborough’s statement. (Kerr Dep. at 166-67.)
On August 20, 2014, Kerr called Scarborough and terminated his employment.
(Id. at 173.) Federated asserts that Scarborough’s call to Terry was the “straw that broke
the camel’s back” in a series of accumulated issues. (Id. at 166-67.) Kerr notes that
despite several warnings, Scarborough continued to use poor judgment and decision
making, and that Scarborough’s latest infraction (telling another RMM that Federated
was going to terminate his employment) came after Scarborough’s last warning.
Federated maintains that Pennington was not involved in the decision to terminate
Scarborough. (Id. at 171-73.) Johnston ultimately resigned effective August 29, 2014.
On December 26, 2014, Scarborough filed suit in District Court of Johnston
County, Kansas. (Doc. No. 1-1.) The Complaint alleged claims for unjust enrichment
and breach of an implied contract. (Id.) Federated removed the case to the United States
District Court for the District of Kansas. (Doc. No. 1.) Federated then sought to have the
case transferred to the District of Minnesota. (Doc. No. 9.) In its motion to transfer,
Federated argued that Scarborough’s claims were governed by a forum selection clause in
his RMM Employment Agreement. (See Doc. No. 76-1.) Scarborough opposed the
transfer. (Doc. No. 11.) The Kansas court concluded that Scarborough’s claims were
1
Unbeknownst to Federated, between July 2014 through October 2014,
Scarborough recorded at least 111 conversations with Federated employees, including
Kerr and Pennington, without their knowledge. (Scarborough Dep. at 95, 98-100, 110.)
Federated discovered these recordings during discovery.
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subject to a valid forum selection clause and transferred the case. (Doc. No. 14.)
Scarborough did not appeal that order.
Scarborough then amended his Complaint twice. (Doc. Nos. 32 & 38.)
Scarborough’s Second Amended Complaint, the one at issue here, alleges a single claim
for breach of the MWA. (Doc. No. 38.) In its Answer, Federated counterclaimed for
breach of the RMM Employment Agreement’s forum selection clause. (Doc. No. 39.) 2
II.
Procedural Background
In 2016, Federated moved for summary judgment. In the February 1, 2017 Order,
the Court granted Federated’s motion, holding that “because Scarborough has failed to
show that his statements to Federated constituted a ‘report’ under the MWA, Federated is
entitled to summary judgment.” (Doc. No. 88 at 12.) The Court reasoned, in part, that
“the 2013 amendment [to the MWA] did not abrogate the requirements that, to be
cloaked with the protections of the MWA, the employee must make his report be for the
purpose of exposing an illegality.” (Id. at 10.) The Court did not previously reach the
issues of causation and pretext. 3
On June 26, 2017, Scarborough appealed the Court’s summary judgment order to
the Eighth Circuit Court of Appeals. (Doc. No. 99.) On August 9, 2017, the Minnesota
2
Plaintiff later filed a separate lawsuit in the Western District of Missouri, Case
No. 4:16-cv-00505-REL. That complaint asserts defamation and tortious interference
claims against Pennington, Johnston, and Weaver. (Fitzsimmons Decl. ¶ 3, Ex. 47.)
3
The Court also granted summary judgment in favor of Federated on its
counterclaim for breach of a forum selection clause. That claim is not presently before
the Court.
8
Supreme Court issued a decision in Friedlander, holding that the 2013 amendment to the
MWA, defining “good faith,” eliminated the requirement that a whistleblower act with
the purpose of exposing an illegality. The Eighth Circuit Court of Appeals later issued an
order, “vacat[ing] the judgment of [this Court] and remand[ing] for reconsideration of
summary judgment in light of the Minnesota Supreme Court’s decision in Friedlander.”
(Doc. No. 113.) The Court does so below.
DISCUSSION
I.
Standard of Review
Summary judgment is proper if there are no disputed issues of material fact and
the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). The
Court must view the evidence and the inferences that may be reasonably drawn from the
evidence in the light most favorable to the nonmoving party. Enter. Bank v. Magna Bank
of Mo., 92 F.3d 743, 747 (8th Cir. 1996). However, as the Supreme Court has stated,
“[s]ummary judgment procedure is properly regarded not as a disfavored procedural
shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed
‘to secure the just, speedy and inexpensive determination of every action.’” Celotex
Corp. v. Catrett, 477 U.S. 317, 327 (1986) (quoting Fed. R. Civ. P. 1).
The moving party bears the burden of showing that there is no genuine issue of
material fact and that it is entitled to judgment as a matter of law. Enter. Bank, 92 F.3d at
747. The nonmoving party must demonstrate the existence of specific facts in the record
that create a genuine issue for trial. Krenik v. Cty. of Le Sueur, 47 F.3d 953, 957 (8th Cir.
1995). A party opposing a properly supported motion for summary judgment “may not
9
rest upon the mere allegations or denials of his pleading, but . . . must set forth specific
facts showing that there is a genuine issue for trial.” Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 248 (1986).
II.
MWA Claim
The Minnesota Whistleblower Act (“MWA”) prohibits retaliation by an employer
when, among other things, an employee, “in good faith, reports a violation, suspected
violation, or planned violation of any federal or state law or common law or rule adopted
pursuant to law to an employer . . . .” Minn. Stat. § 181.932, subd. 1. Retaliation claims
under the MWA may be proven by direct evidence or under the McDonnell Douglas
burden-shifting framework. Wood v. SatCom Mktg., LLC, 705 F.3d 823, 828 (8th Cir.
2013). Under this test, the employee must first establish a prima facie case of retaliation
by showing: (1) statutorily protected conduct; (2) adverse employment action; and (3) a
causal nexus between the two. Id. at 829. If the employee can establish a prima facie
case, the burden of production shifts to the employer to articulate a legitimate,
nonretaliatory reason for its action. Id. If the employer meets its burden of production,
the employee must demonstrate that the employer’s articulated justification is pretextual.
Id.
Federated argues that Scarborough’s MWA claim fails as a matter of law because
Scarborough did not engage in protected conduct, Scarborough cannot prove causation,
and, in any event, that Federated articulated multiple legitimate, non-discriminatory
reasons for its actions and Scarborough cannot establish pretext. Scarborough opposes
10
Federated’s motion and argues that he has sufficient evidence to demonstrate that
Federated’s adverse actions were in retaliation for his protected conduct.
A.
Protected Activity
The first step for an MWA claim is determining whether the employee engaged in
statutorily protected conduct by, in this case, reporting in good faith a violation or
suspected violation of law. See, e.g., Pedersen v. Bio-Med Applications of Minn.,
992 F. Supp. 2d 934, 939; Minn. Stat. § 181.932, subd. 1. The plaintiff has the burden of
demonstrating that he engaged in statutorily protected conduct. Pedersen,
992 F. Supp. 2d at 939. A report is defined as, “a verbal, written, or electronic
communication by an employee about an actual, suspected, or planned violation of a
statute, regulation, or common law, whether committed by an employer or a third party.”
Minn. Stat. § 181.931 subd. 6. In Friedlander, the Minnesota Supreme Court held that
the judicially developed definition of “good faith” was abrogated by the definition added
to the MWA through the 2013 amendment. Friedlander, 900 N.W.2d at 166. Thus, after
Friedlander, a report is made in good faith “as long as [it is] not knowingly false or made
with reckless disregard of the truth.” Id. at 165-66. The Court notes that the Friedlander
decision focused on the “good faith” requirement under the MWA. Separate and distinct
from the element of “good faith” is the requirement that a “report” be made. Thus,
Scarborough must demonstrate both that he made a report and that the report was made in
good faith. Whether a report is made in good faith is a question of fact, but whether
Scarborough made a report may be decided as a matter of law. Freeman v. Ace Tel.
Ass’n, 404 F. Supp. 2d 1127, 1139 (D. Minn. 2005), aff’d, 467 F.3d 695 (8th Cir. 2006).
11
Scarborough has not presented, and the Court is unaware of, any authority holding that
Friedlander impacts the prior caselaw dealing specifically with the requirements of a
“report” that are unrelated to the element of “good faith.” However, Friedlander
explained that, prior to the 2013 Act, courts interpreted the phrase “good faith” to have
two elements—the content of the report and the reporter’s purpose. Friedlander, 900
N.W.2d at 165. In analyzing the reporter’s purpose, courts held that to act in good faith,
the reporter must have acted with the purpose of blowing the whistle, or to expose an
illegality. Id. After Friedlander, courts now look only to the content of the report,
keeping in mind that the phrase “good faith” no longer includes the requirement that the
reporter act with the purpose of exposing an illegality. Id. at 165-66.
Here, Scarborough alleges that he made three reports. First, Scarborough argues
that he reported a violation on July 7, 2014, when he told Pennington that Johnston liked
fancy things, including paying for meeting rooms at Husch Blackwell. Second,
Scarborough argues that he reported a violation on July 14, 2014, when he forwarded an
e-mail from Husch Blackwell confirming that the meetings were free. And third,
Scarborough argues that he reported a violation on July 30, 2014, when he allegedly told
Pennington and Kerr that Johnston’s invoicing practice was illegal and that Federated
was violating tax law related to Johnston’s withholding taxes.
Scarborough claims that on July 7, 2014, he reported that Johnston was submitting
expenses for meeting rooms that were actually free. However, the record demonstrates
that on July 7, 2014, Scarborough and Pennington met to discuss Johnston’s submission
of receipts for frames and that Scarborough stated that Johnston liked things “nice and
12
fancy,” and then shared that, for example, Johnston liked to hold meetings at Husch
Blackwell even though he could find a less expensive location. This statement, however,
does not implicate any “actual, suspected, or planned violation” because Scarborough, at
this time, did not know that the Husch Blackwell rooms were actually free. In fact, the
record suggests the opposite—that at the time of this meeting, Scarborough only
suspected that Johnston was paying for the Husch Blackwell rooms, but could have found
a less expensive venue. Indeed, the record demonstrates that Scarborough actually
learned that the rooms were free from Pennington. Because Scarborough did not know
the rooms were free, he could not, at this point, report that Johnston was falsifying
expense reports for the rooms. Therefore, Scarborough did not make a report during this
meeting. 4
Scarborough also relies on an alleged report made on July 14, 2014, when he
forwarded an e-mail exchange between him and Husch Blackwell to Pennington that
confirmed that the meeting rooms at Husch Blackwell were free of charge. In addition,
Scarborough claims that on July 30, 2014, he made a good-faith report when he told Kerr
and Pennington that Johnston’s conduct was illegal and raised the possibility that
Federated and Johnston could have violated tax laws. While these reports, at least with
4
Friedlander concluded that a legislative amendment defined the phrase “good
faith,” so as to deem reports to be made in “good faith” so long as they were not
knowingly false or in reckless disregard of the truth. Friedlander, however, did not
change the definition of a “report”—which requires a communication about an actual,
suspected, or planned violation. Here, Scarborough could not “report” an actual,
suspected or planned violation (falsifying expense reports) if he did not yet know or
suspect that was occurring.
13
respect to the expense report misconduct, came after Federated already knew about
Johnston’s misconduct, the Court concludes that, after Friedlander, they are entitled to
protection under the MWA. Looking only to the content of the reports, they constitute
communications about an actual, suspected, or planned violation. 5
Based on the above, the Court concludes that Scarborough has demonstrated that
he made a “report” under the MWA on July 14 and July 20, 2014. The Court will
therefore analyze the remaining elements of causation and pretext below.
B.
Causal Connection
To prevail on his MWA claim, Scarborough must also prove a causal connection
between his reports and Federated’s adverse actions. Scarborough may do so with either
direct evidence or under the McDonnell Douglas burden-shifting framework.
Scarborough claims direct evidence of retaliation. Direct evidence is “evidence
showing a specific link between the alleged discriminatory animus and the challenged
decision, sufficient to support a finding by a reasonable fact finder that an illegitimate
criterion actually motivated the adverse employment action.” Wood, 705 F.3d at 828.
Here, Scarborough asserts that he was issued a written warning for repeatedly and
truthfully denying that he had prior knowledge of the unlawful Husch Blackwell scheme
that he claims to have reported. More specifically, Scarborough argues that had he not
reported Johnston’s illegal conduct, he would not have received a warning, been
5
Defendants deny that Scarborough ever communicated alleged tax violations.
However, on Defendant’s motion, the Court must construe the facts in the light most
favorable to Scarborough.
14
demoted, or eventually terminated. In support, Scarborough points to Kerr’s testimony
that Scarborough was demoted, in part, because he continued to deny prior knowledge of
Johnston’s unlawful activity and Pennington’s allegation that Scarborough had bad
motives in making his reports. In addition, Scarborough points to evidence that Kerr
acknowledged that Scarborough was terminated not only for his phone call with Terry,
but also for issues giving rise to the warning and demotion. Scarborough argues that a
reasonable fact finder could conclude that Scarborough’s reports of Johnston’s unlawful
conduct were specific motivating factors in the adverse actions.
The Court concludes that this evidence fails, as a matter of law, to demonstrate
direct evidence of prohibited retaliation. Scarborough claims that he was retaliated
against for denying prior knowledge of the fraudulent Hursch Blackwell meeting-room
scheme. This is not the same as being retaliated against for reporting Johnston’s
misconduct in submitting false expense reports. Indeed, Scarborough’s own argument
underscores that he believes he was retaliated against because Federated thought
Scarborough was complicit in Johnston’s fraudulent scheme and lied about it, not
because he reported the misconduct. This is a critical distinction that defeats
Scarborough’s argument on the point of causation.
Scarborough also argues that facts in the record support an inference of a causal
connection. For example, Scarborough points to evidence that Kerr and Pennington
knew of Scarborough’s protected conduct and that knowledge, in conjunction with the
timing of the adverse actions, is enough to create an inference of causation. Specifically,
Scarborough points to evidence that Federated issued a written warning to Scarborough
15
less than a month after he reported Johnston’s conduct, demoted Scarborough nine days
later, and ultimately terminated Scarborough’s employment a week after his demotion.
Scarborough also suggests that, after he reported Johnston’s activity, Pennington began to
dig into Scarborough’s expenses and took steps to discredit Scarborough.
A retaliatory motive may be inferred from circumstantial evidence pertaining to
temporal proximity and an employer’s knowledge of the employee’s protected conduct.
Freeman, 404 F. Supp. 2d at 1141. However, temporal proximity alone is generally
insufficient to establish an inference of retaliatory motive. Harnan v. Univ. of
St. Thomas, 776 F. Supp. 2d 938, 948 (D. Minn. 2011). Here, there is no evidence
beyond the temporal proximity of adverse actions, and the temporal proximity is not
close enough to create an inference of retaliatory intent. See id. at 948 (finding a onemonth timespan between protected activity and the preparation of a termination notice
insufficient to establish causation in an MWA claim).
In addition, the presence of intervening events can undermine any inference raised
by temporal proximity. See Freeman v. Ace Tel. Ass’n., 467 F.3d 695, 698 (8th Cir.
2006). Here, the record demonstrates that Federated believed that Scarborough knew
about Johnston’s fraudulent invoice practice and recommended it to other employees. In
addition, Federated maintains that it discovered that Scarborough himself improperly
sought reimbursement for personal expenses, collected cruise referral credits that
belonged to Federated, called several of Johnston’s Marketing Representatives and
spread a false rumor that Johnston was being terminated, falsely told Terry that Federated
was on a “witch hunt” and Terry was likely to be fired along with another RMM, and
16
engaged in other misconduct. Scarborough maintains that he did not have prior
knowledge of the Husch Blackwell scheme, that he did not tell Johnston’s marketing
representatives that Johnston was fired, that he did nothing wrong in connection with the
cruise referral program or in booking his own travel, and that his conversation with Terry
was “trivial.” Be that as it may, Federated has pointed to evidence that shows, at a
minimum, a good faith basis for its belief that Scarborough engaged in the above
misconduct. For example, another Federated employee testified that he told Pennington
that Scarborough recommended to him that he contact Johnston to get details on how to
submit fraudulent expenses. (Weaver Dep. at 61.) It is also undisputed that Johnston told
Pennington that Scarborough knew about the Husch Blackwell scheme and that
Scarborough called Johnston’s marketing representative and told them he was being
terminated. (Johnston Dep. at 170-72; Kerr Dep. at 103.) Even if the Court could infer a
causal connection from the temporal proximity of Scarborough’s alleged reports and the
adverse employment actions, this connection is undermined by Scarborough’s
intervening conduct.
Accordingly, viewing the evidence in the light most favorable to Scarborough, the
Court concludes that Scarborough has not pointed to sufficient evidence that reasonably
supports a causal link between any reports and the adverse employment actions.
Therefore, Scarborough fails to establish a prima facie case of retaliation under the
MWA. Further, even if Plaintiff could establish a prima facie case, as discussed below,
he nevertheless fails to demonstrate that Federated’s proffered reasons were pretext for
unlawful retaliation.
17
C.
Legitimate, Non-Retaliatory Reason and Pretext
Even assuming that Scarborough could make out a prima facie case of protected
activity and causation, Federated has articulated legitimate, non-retaliatory reasons for his
warning, demotion, and termination. The record demonstrates that in the two months
leading to Scarborough’s termination, Federated determined that: (1) Scarborough knew
of and approved Johnston’s fraudulent invoice practices and encouraged another DMM to
do the same; (2) Scarborough collected cruise referral credits that belonged to Federated;
(3) Scarborough called several of Johnston’s Marketing Representatives and spread a
false rumor that Johnston was being terminated; (4) Scarborough improperly sought
reimbursement for personal expenses; (5) Scarborough engaged in other misconduct; and
(6) Scarborough falsely told Terry that Federated was on a “witch hunt” and Terry was
likely to be fired along with another RMM. Because Federated articulated these reasons,
the burden shifts back to Scarborough to point to evidence that creates a genuine issue of
fact for trial that these proffered reasons for terminating Scarborough were pretextual.
Scarborough’s arguments for pretext are nearly identical to those in support of
causation. First, Scarborough argues that Federated’s asserted reasons for the adverse
actions are unworthy of credence because Federated had no basis for the written warning
and demotion, Federated failed to follow its own policies, and it is unlikely that Federated
would have terminated Scarborough solely for his phone conversation with Terry.
Scarborough also maintains that there is evidence of retaliatory animus, such as inquiring
into Scarborough’s expenses, allegedly taking actions to discredit Scarborough, and
falsely alleging that Scarborough knew about Johnston’s scheme.
18
The burden of proof to establish pretext is higher than that required to establish a
prima facie case. Pretext can be established by showing that an employer’s justification
“is unworthy of credence” or “by showing that similarly situated employees who did not
engage in the protected activity were treated more leniently, that the employer changed
its explanation for why it fired the employee, or that the employer deviated from its
policies.” Childs v. Fairview Health Servs., Civ. No. A16-849, 2016 WL 6923709, at *4
(Minn. Ct. App. Nov. 28, 2016) (quotation marks and citations omitted). Ultimately,
“[t]he relevant question is whether a reasonable jury could find that [the employer’s]
proffered reason for the termination was a mere pretext to mask retaliatory animus.”
Buytendorp v. Extendicare Health Servs., Inc., 498 F.3d 826, 837 (8th Cir. 2007).
Here, Scarborough’s evidence of pretext fails. First, the Court notes that while
Scarborough denies any prior knowledge to Johnston’s scheme and that he told
Johnston’s MRs that Johnston was fired, Scarborough seems to acknowledge, or at least
not deny, that he used Federated cruise referrals to book personal travel, used his
corporate card for personal expenses (which he later repaid), and told Terry that
Federated was likely to fire him and potentially another RMM. Scarborough now argues
that any such misconduct does not warrant dismissal, was not actually improper, or was
“trivial.” However, the decision as to whether this particular conduct justified
Scarborough’s termination was up to Federated. See, e.g., Davis v. KARK-TV, Inc.,
421 F.3d 699, 705 (8th Cir. 2005) (noting that courts do not “sit as super-personnel
departments reviewing the wisdom or fairness of the business judgments made by
employers”). Viewing the record in light most favorable to Scarborough, the Court finds
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that Scarborough has failed to present sufficient evidence to raise a genuine issue of fact
that Federated’s proffered reasons for warning, demoting, and ultimately terminating
Scarborough were pretext for retaliation. Thus, the Court grants Federated’s Motion for
Summary Judgment on Scarborough’s MWA claim.
CONCLUSION
For the foregoing reasons, the Court grants Federated’s motion for summary
judgment as to Scarborough’s MWA claim. Therefore, IT IS HEREBY ORDERED
that: Defendant Federated’s Motion for Summary Judgment (Doc. No. [123]) is
GRANTED.
LET JUDGMENT BE ENTERED ACCORDINGLY.
Dated: March 29, 2019
s/Donovan W. Frank
DONOVAN W. FRANK
United States District Judge
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