Equal Employment Opportunity Commission v. HP Pelzer Automotive Systems, Inc. (TV2)

Filing 106

MEMORANDUM OPINION AND ORDER denying 93 Motion to Alter Judgment. Signed by Chief District Judge Thomas A Varlan on 12/13/18. (ABF)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TENNESSEE
EQUAL EMPLOYMENT
OPPORTUNITY COMMISSION,
Plaintiff,
and
ESTELA BLACK,
Intervening Plaintiff,
v.
HP PELZER AUTOMOTIVE
SYSTEMS, INC.,
Defendant.

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No.:

1:17-CV-31-TAV-CHS

MEMORANDUM OPINION AND ORDER
Before the Court is defendant’s motion to alter or amend judgment [Doc. 93].
Defendant moves the Court to amend or reconsider its August 3, 2018, order denying
defendant’s motion for summary judgment [Doc. 92]. Plaintiffs filed a response in
opposition [Doc. 96], and defendant replied [Doc. 98]. For the reasons discussed below,
the Court will deny defendant’s motion.
I.

Background
Plaintiff Equal Employment Opportunity Commission (“EEOC”) and intervening

plaintiff Estela Black (together, “plaintiffs”) brought this action against defendant HP
Pelzer Automotive Systems, Inc. (“defendant”), under Title VII of the Civil Rights Act of
1964 [Doc. 70 p. 1]. Plaintiffs allege that defendant terminated Black in retaliation for

filing a sexual harassment complaint against defendant’s human-resources manager [Doc.
23 p. 3]. In response, defendant asserts that, based on its investigation of the sexual
harassment complaint, defendant determined that Black had falsified the report [Doc. 70 p.
1]. Thus, defendant asserts that it terminated Black for making a false complaint, consistent
with its harassment policy [Id. p. 13].
On March 20, 2018, defendant filed a motion for summary judgment, arguing that
plaintiffs’ claim failed as a matter of law [Doc. 69]. First, defendant argued that plaintiffs
could not establish a prima facie case of retaliation because Black had not engaged in a
protected activity when she falsely accused defendant’s manager of sexual harassment
[Doc. 70 pp. 16–19]. Second, defendant asserted that plaintiffs could not show that
defendant’s actual motivation for terminating Black was a desire to retaliate against her for
a protected activity because defendant honestly believed that Black’s report was falsified
[Id. pp. 20–22]. Thus, defendant concluded that plaintiffs could show neither causation
nor that defendant’s asserted reason for the termination was pretext.
In opposition, plaintiffs maintained that Black had a reasonable and good faith belief
that defendant’s manager sexually harassed her and, thus, that she engaged in a protected
activity when she reported it [Doc. 72 pp. 9–12]. Furthermore, plaintiffs asserted that it
had provided both direct and circumstantial evidence to establish causation and that flaws
in defendant’s investigation—including the fact that defendant had not found any evidence
that Black falsified her claim—created a genuine issue of material fact regarding whether
defendant’s asserted reason for firing Black was pretextual [Id. pp. 12–25].
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In its August 3, 2018, order on defendant’s motion for summary judgment, the Court
found that plaintiffs had established a prima facie case of retaliation, shifting the burden of
production to defendants to show a nondiscriminatory reason for terminating Black [Doc.
92 pp. 12–13]. The Court found that defendant met this burden based on defendant’s
arguments that it believed Black falsified the report [Id. p. 14]. Finally, the Court found
that the questions regarding the quality of defendant’s investigation, and thus the
reasonableness of its belief in its asserted reason for firing Black, were genuine disputes of
material fact best left up to the jury to decide [Id. pp. 15–18]. As such, it determined that
plaintiffs had met their burden under the McDonnell Douglas framework, and denied
summary judgment. In its instant motion, defendant asks the Court to alter or amend its
order on summary judgment, arguing that it contained clear error of law and created a
manifest injustice.
II.

Analysis
Defendant initially cites Federal Rules of Civil Procedure 59(e) and 60(b) as the

bases for the relief it seeks, although defendant only cites Rule 59(e) in its accompanying
memorandum in support [Doc. 94]. Neither rule is applicable here, as both apply to the
amendment of judgments, which an order denying summary judgment—like this one—is
not. See Simmerman v. Ace Bayou Corp., 304 F.R.D. 516, 518 (E.D. Ky. 2015) (“Neither
[Rule 59(e) nor Rule 60(b)] provides an appropriate means to challenge a non-final
order.”). But defendant also filed a supplement in support of its motion to alter or amend,

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adding Federal Rule of Civil Procedure 54(b) as an additional basis for relief [Doc. 97].
Because denial of summary judgment is an interlocutory order, Rule 54(b) controls here.
See Rodriguez v. Tennessee Laborers Health & Welfare Fund, 89 Fed. App’x 949, 959
(6th Cir. 2004) (“District Courts have authority both under common law and Rule 54(b) to
reconsider interlocutory orders and to reopen any part of a case before entry of final
judgment.”).
Regardless, the standards governing Rules 59(e) and 54(b) are similar. Like Rule
59(e), a district court may grant a Rule 54(b) motion when there is an intervening change
of controlling law, newly discovered evidence, or a need to correct a clear error or prevent
manifest injustice. See id. Although this standard “vests significant discretion in district
courts” to reconsider interlocutory orders, such motions are not a means by which “to relitigate issues previously considered by the Court or to present evidence that could have
been raised earlier.” Id. at 959 n.7; Ne. Ohio Coal. For the Homeless v. Brunner, 652 F.
Supp. 2d 871, 877 (S.D. Ohio 2009).
The majority of defendant’s motion merely restates the same facts and arguments
presented at the summary judgment stage. Consistent with the Rule 54(b) standard, the
Court, in its discretion, will not readdress those arguments here.1 See id. Defendant’s

1

The Court does wish to clarify one of defendant’s objections to the Court’s factual
findings. In its order denying summary judgment, the Court stated that “Defendant interviewed
three witnesses” [Doc. 92 p. 17]. Defendant objects to this statement, pointing out that it actually
interviewed five people: Black, Strange, Kennedy, Miller, and Morris [Doc. 94 pp. 5–6]. When
the Court referred to “witnesses,” it meant those people not directly involved in the alleged
harassing incident, excluding Black and Strange. Thus, the Court’s factual findings in this respect
are consistent with defendant’s statements regarding the number of interviews it conducted.
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main, new argument is that the Court committed clear error in failing to apply the “honest
belief” rule to these facts, and thus in finding that plaintiffs had met their burden at the
pretext stage [see Doc. 94 pp. 12–19].
Despite defendant’s protestations to the contrary, the Court finds no clear error.
Rather, there appears to be a circuit split on the central issue in this case. As defendant
emphasizes, the Eleventh Circuit has held that a defendant-employer’s honest belief that
the plaintiff-employee lied in an internal investigation of a supervisor’s alleged sexual
harassment was enough to grant summary judgment for the defendant on the plaintiff’s
retaliation claim, where the employer’s belief was based on its inability to corroborate the
employee’s allegation with coworkers. E.E.O.C. v. Total System Services, Inc., 221 F.3d
1171 (11th Cir. 2000).
However, the Eighth Circuit has held to the contrary, finding sufficient evidence of
pretext to deny a defendant’s motion for summary judgment where “the belief that
[plaintiff] was lying was founded solely on the statements of other employees and
witnesses.” Gilooly v. Missouri Dept. of Health and Senior Services, 421 F.3d 734, 740–
41 (8th Cir. 2005). In Gilooly, the Eight Circuit expressed concern with invading the
province of the jury in assessing witness credibility, commenting that “[a]llowing the
employer’s investigation to essentially short-circuit the retaliation claim before it begins is
antithetical to the design of Title VII.” Id. at 741. The court was particularly wary given
that there was “no independently verifiable evidence” that the plaintiff had lied, and that

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the employer had instead based its determination on “little more than a description of
conflicting stories with the employer disbelieving [the employee’s] version of events.” Id.
at 740–41.

The court ultimately found that under those circumstances, where an

employer’s decision to fire an employee is based solely on a determination that the
employee’s Title VII claim was falsely made, the issue of pretext “is largely undeveloped
and best left to a fact-finder to decide.” Id. at 740–41.
Although this case is similar to those before the Eleventh and Eighth Circuits,2 that
those cases come out differently shows that this issue, especially as applied to these facts,
is far from settled. Moreover, defendant has not presented, and the Court has not found,
any case in this circuit directly on point—that is, where the employer’s only asserted reason
for firing the employee is that the employee lied in making a harassment complaint.3 In
the face of a circuit split, and the lack of on-point binding precedent, the summary judgment
order was not clearly erroneous, nor did it create a manifest injustice.

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The Court notes that the genuine dispute of material fact in this case regarding pretext
appears to be even clearer than it was in Gilooly. In that case, the employee had a history of
unauthorized visits with clients and was uncooperative in answering questions relating to the
investigation. See 421 F.3d at 736–37. Here, in contrast, there is no evidence that plaintiff Black
had a history of disciplinary action or evasiveness in the investigation that might otherwise call
her credibility into question.
3

Defendant does point to cases in this district and in the Sixth Circuit that, it alleges,
support its position, including Tingle v. Arbors at Hilliard, 692 F.3d 523 (6th Cir. 2012), and
Manstra v. Norfolk S. Corp., No. 3:10-CV-166, 2012 WL 1059950 (E.D. Tenn. March 28, 2012).
However, in both cases and in others defendant cites, the employer had additional reasons for
disciplining or firing the employee that were independent of the employee’s alleged dishonesty.
As such, these cases are not precisely instructive.
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III.

Conclusion
For the reasons stated above, defendant’s motion [Doc. 93] is hereby DENIED.
IT IS SO ORDERED.

s/ Thomas A. Varlan
CHIEF UNITED STATES DISTRICT JUDGE

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