Henry v. Federal Reserve Bank of Atlanta

Filing 49

MEMORANDUM OPINION OF THE COURT. Signed by Magistrate Judge Joe Brown on 4/24/14. (DOCKET TEXT SUMMARY ONLY-ATTORNEYS MUST OPEN THE PDF AND READ THE ORDER.)(afs)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF TENNESSEE
Stephen Henry,
Mr. Henry,
vs.
Federal Reserve Bank of Atlanta.
Defendants.

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Cv. No.
3:12-cv-1282
Magistrate Judge Brown by consent

MEMORANDUM
I.

INTRODUCTION AND BACKGROUND

In its prior Memorandum Opinion (DE 39) which is incorporated herein by reference, the
Court granted Summary Judgment to the defendant, the Federal Reserve Bank (“the Bank”), on
the plaintiff’s (“Mr. Henry”) discrimination claim. According to that holding, the Court found
that “no reasonable juror could objectively draw a causal connection between the conduct of Mr.
Henry’s co-workers and his faith . . . [and] the conduct alleged by Mr. Henry was not severe and
pervasive.” (DE 39 at p. 9) However, the Court noted that the Bank, “in order to ‘continue to
operate efficiently and within an effective control environment and maintain the physical
security of the building, . . . had approved ‘a minimum of six months’ severance pay to all staff
within the impacted areas.’” (DE 39 at pp. 11-12)
Finding that the enhanced “severance pay was [likely] a ‘part and parcel of the
employment relationship,’” the Court likened the instant case to EEOC v. Bd. of Governors of
State Colls. and Univs., 957 F.2d 424 (7th Cir. 1992). As such, the Court ordered the Bank to
“Show Cause why: 1) its attempt to secure a waiver of Mr. Henry’s right to recover financially
under Title VII at the expense of his severance pay is not a per se act of retaliation, and 2) why
the Court should not grant Judgment in favor of Mr. Henry.”

The Bank responded to the Show Cause order on April 7, 2014 (DE 47), to which Mr.
Henry filed reply on April 19, 2014. (DE 48) After considering the arguments presented, the
Court finds the facts of Mr. Henry’s case sufficiently distinguished from Bd. of Governors and
aligned with those in EEOC v. Sundance Rehab. Corp., 466 F.3d 490, 499 (6th Cir. 2006).
Accordingly, the Court now grants Summary Judgment to the Bank on Mr. Henry’s retaliation
claim.
II.

STANDARD OF REVIEW

Summary judgment is appropriate where there is no “genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of law.” Miller v. City of Calhoun
County, 408 F.3d 803, 812-13 (6th Cir. 2005) (quoting Fed. R. Civ. P. 56(c)). A “genuine issue
of material fact” is one which, if proven, could lead a reasonable jury to return a verdict for the
nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The burden rests
with the moving party to establish the absence of a factual dispute. Id. at 249-50.
In deciding whether summary judgment is appropriate, the court “must look beyond the
pleadings and assess the proof to determine whether there is a genuine need for a trial.” Sowards
v. Loudon County, 203 F.3d. 426, 431 (6th Cir. 2000), cert. denied, 531 U.S. 875 (2000). In so
doing, the district court must “draw all reasonable inferences in favor of the nonmoving party” in
its analysis of the pleadings, affidavits, and record as a whole. Sadie v. City of Cleveland, 718
F.3d 596, 599 (6th Cir. 2013) (citing Matsushita Elec. Co., Ltd. v. Zenith Radio Corp., 475 U.S.
574, 587 (1986)). Normally, “[t]he moving party need not support its motion with evidence
disproving the non-moving party’s claim, but need only show that ‘there is an absence of
evidence to support the non-moving party’s case.’” Hayes v. Equitable Energy Res. Co., 266
F.3d 560, 566 (6th Cir. 2001) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986)).

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The nonmoving party is not entitled to trial solely on the basis of the pleadings
themselves, but must provide more than conclusory allegations, speculation, and unsubstantiated
assertions. See Lujuan v. Nat’l Wildlife Fed’n, 497 U.S. 871, 888 (1990). Rather, at the
summary judgment stage, the party opposing summary judgment “must present ‘affirmative
evidence’ to support his/her position; a mere ‘scintilla of evidence’ is insufficient.” Bell v. Ohio
State University, 351 F.3d 240, 247 (6th Cir. 2003) (quoting Anderson, 477 U.S. at 252). In the
context of claims brought under 42 U.S.C. § 1983, the evidence relied upon by the nonmoving
party must fairly raise a genuine dispute regarding the deprivation of a constitutionally protected
interest by an individual or individuals acting under color of state law. See Miller, 408 F.3d at
812.
III.

ANALYSIS

A. PLAINTIFF’S RETALIATION CLAIMS
The Bank advances two arguments regarding the Court’s premise that its waiver of
claims constitutes per se retaliation. First, the Bank asserts that the Court’s premise is founded
upon “incorrect facts.” (Defendant’s Response to the Show Cause Order (“Response”), DE 47,
p. 3) According to the Bank’s argument here, enhanced severance pay was not “part and parcel”
of the employment agreement, and Mr. Henry was not singled out—discriminated against—
because all employees were required to sign the same waiver that Mr. Henry was asked to sign. 1
(Response at p. 4)
Second, the Bank chastises the Court for reaching the issue at all. According to the Bank,
“Plaintiff’s retaliation claim—as framed in the Court’s Memorandum—is not properly before the
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At the time the Court entered the prior Show Cause order, the Bank’s policy and practice manual was not
within the record. As such, the facts established by the record at that time indicated that the severance
authorized by the Bank’s Board of Governors was in addition to any provided by the Bank’s policy. The
purpose of that additional severance was “to ‘continue to operate efficiently’” until the closure date of the
facility. (DE 39 at pp. 11-12)

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Court.” (Response at p. 7) As the Bank’s argument goes, the issue of whether the Bank’s
condition of Mr. Henry’s severance pay on a waiver of claims “’falls outside of the scope of his
EEOC charge.’” (Response at p. 7)

Thus, according to the Bank, the Court “lacks power to

hear the case” because Mr. Henry failed to exhaust his administrative remedies. (Response at p.
2, 7) Because the Bank has questioned the Court’s jurisdiction to reach the current issue, the
Court will address the Bank’s claim of failure to exhaust first.
(1) Exhaustion of Administrative Remedies
According to the Bank, Mr. Henry’s initial retaliation charge with the EEOC addressed
only the Bank’s “decision to release [him] prior to July 31, 2011[,]” when all other employees
were separated from the Bank’s service. (Response at p. 8) Thus, according to the holding in
Vinson v. Ford Motor Co., 806 F.2d 686, 688 (6th Cir. 1986), the Court’s reach is restricted to
the claims specifically alleged in the EEOC charging sheet, and, accordingly, “lacks the power to
hear” any other claims. (Response at pp. 7-8) (quoting Bray v. Palm Beach Co., No. 89-6171,
1990 U.S. App. LEXIS 11020 at *4 (6th Cir. June 29, 1990)).
“[A]dministrative exhaustion is not a jurisdictional requirement under Title VII,”
however. Adamov v. United States Bank Nat’l Ass’n, 726 F.3d 851, 855-56 (6th Cir. 2013)
(relying on Arbaugh v. Y & H Corp., 546 U.S. 500 (2006)). Further, while the Court’s attention
must be limited to the scope of the EEOC investigation reasonably expected to
grow out of the charge of discrimination[,] . . . where facts related with respect to
the charge claim would prompt the EEOC to investigate a different, uncharged
claim, the plaintiff is not precluded from bringing suit on that claim.
Weigel v. Baptist Hosp. of East Tennessee, 302 F.3d 367, 380 (6th Cir. 2002). Here, the
treatment of Mr. Henry’s severance pay is a fact clearly related to Mr. Henry’s early separation
that would likely “prompt the EEOC to investigate a different, uncharged claim.” Id. Thus, that
the Bank’s treatment of Mr. Henry’s severance pay could constitute an act of per se retaliation is

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clearly within the scope of the EEOC charge.

Moreover, even if it was not, there is no

jurisdictional bar to the Court’s reaching the issue.
(2) Mr. Henry’s Retaliation Claim
To establish claims of retaliation, Mr. Henry must demonstrate “that: (1) he engaged in
activity protected by Title VII; (2) the exercise of his civil rights was known; (3) thereafter, the
defendant took an employment action adverse to [Mr. Henry]; and (4) there was a causal
connection between the protected activity and the adverse employment action.” Warf v. U.S.
Dept. of Veterans Affairs, 713 F.3d 874, 880 (6th Cir. 2013) (quoting Nguyen v. City of
Cleveland, 229 F.3d 559, 562-63 (6th Cir. 2000) (internal quotations omitted)).
In its response to the Court’s substantive holding, the Bank asserts that because enhanced
severance pay for employees subject to involuntary separation “was always conditioned . . . on a
release of any discrimination or other claims . . . as a matter of Bank policy and practice,” there
was no employment action adverse to Mr. Henry. (Response at p. 2) According to that policy,
an employee has an unconditional right to two weeks of severance pay. (Response, at p. 6;
Exhibit A to Response (“Exh. A”), DE 47-1, p. 17) Enhanced severance pay of “one half
month’s salary per year of service . . . up to the maximum of one year’s salary” is available to
involuntarily separated employees who: 1) have not declined a comparable offer of employment
by the bank; 2) have not accepted an offer of employment by the Bank or other Federal Reserve
entity; 3) maintain an acceptable work performance until termination; 4) work until released; and
5) execute a release of claims provided by the Bank. (Exh. A at pp. 16, 18)
Mr. Henry does not contest the Bank’s claim. Rather, Mr. Henry argues that the Bank’s
condition of severance pay on a waiver constitutes a materially adverse action because “it might
well have ‘dissuaded a reasonable worker from making or supporting a charge of

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discrimination.” (Reply at p. 3) Further, Mr. Henry argues that the waiver left him worse off
because he was forced to choose “to get something that all eligible employees had a right to . . .
or his right to a monetary damages award.” (Reply at pp. 3-4) Mr. Henry’s argument is
unavailing, however, because it is premised upon a standard of materiality that is well below that
required and because he neither had a right to enhanced severance pay or monetary damages
from his discrimination claim.
According to Mr. Henry, any action that might dissuade an employee “from making or
supporting a charge of discrimination” is materially adverse in the context of retaliation. (Reply
at p. 3) While that is a correct factual statement, that standard is only applied in the context of
charges filed with the EEOC. EEOC v. Sundance Rehab. Corp., 466 F.3d 490, 499 (6th Cir.
2006). Under this reasoning, any waiver of an employee’s right to file a charge is void against
public policy because it frustrates the congressional intent that underpins Title VII and prevents
the EEOC from accomplishing the task that Congress set for it. Namely, to discover, prosecute
and eliminate discriminatory employment practices.

Id. As the Bank argues, the waiver

provision at issue here did not require that Mr. Henry forego filing a charge with the EEOC, but
required that he waive his right to monetary damages from either an EEOC law suit or his own
individual law suit. (Plaintiff’s Statement of Material Fact (“PSMF”), DE 37-2, p. 31 ¶ 88)
A more stringent standard has been established for individual claims brought by
employees themselves. Indeed, a waiver of employee claims, and by extension the right to
monetary damages, is effective so long as it is made knowingly and voluntarily. Id. (citing
EEOC Enforcement Guidance on Non-Waivable Employee Rights under EEOC Enforced
Statutes, EEOC Notice 915.002, at III.C. (Apr. 10, 1997). In the context of individual claims,
such actions must affect a “materially adverse change in the terms and conditions of [a

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claimant’s] employment.” Id. at 501 (quoting Smith v. City of Salem, 378 F.3d 566, 575 (6th Cir.
2004)). As the Sundance court noted, to rise to the level of a materially adverse employment
action, the waiver at issue here must deprive Mr. Henry of a benefit “that [he] was [] otherwise
due or promised,” which it did not do. Id. at 502.
Contrary to Mr. Henry’s argument, he had no right—a clearly established and irrevocable
possessory interest in property—to either enhanced severance pay or to monetary damages from
his discrimination claim. Rather, any entitlement Mr. Henry had to enhanced severance benefits
was always conditioned upon his willingness to accept an offer of employment with the Bank or
another Federal Reserve entity, maintain an acceptable performance rating, work until released,
and sign a waiver of claims that the Bank would provide for him. Likewise, Mr. Henry’s
entitlement to a monetary award was conditioned upon proof
by a preponderance of the evidence: (1) that [he] was a member of a protected
class; (2) that [he] was subjected to unwelcome [religious] harassment; (3) that
the harassment was based on [his religion or religious beliefs]; (4) that the
harassment unreasonably interfered with [his] work performance by creating a
hostile, offensive, or intimidating work environment; an (5) that there is a basis
for employer liability.
Thornton v. Fed. Express Corp., 530 F.3d 451, 455 (6th Cir. 2007)
Rather than to choose between his right to enhanced severance or to a monetary award,
the Bank offered Mr. Henry “a definite early pay-out” (Reply at p. 4) in the form of enhanced
severance pay as consideration for his willingness to forego any speculative future monetary
damages he might receive. In essence, Mr. Henry opted for the proverbial two birds in the bush
rather than the bird in his hand. As such, he may not now cry fowl. The Bank’s condition that
Mr. Henry waive any future right to monetary damages is not an materially adverse employment
action. Thus, Mr. Henry has failed to establish a prima facie case of retaliation, and the Bank is
entitled to judgment as a matter of law.

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IV.

CONCLUSION

For the foregoing reasons, the Bank’s motion for summary judgment as to Mr. Henry’s
claims of retaliation will be GRANTED and that claim will be DISMISSED with prejudice.

__________________
Joe B. Brown
Magistrate Judge

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