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McNeel v. Citation Oil & Gas Corp.

Court of Appeals of Texas, Fourteenth District

July 11, 2017


         On Appeal from the 215th District Court Harris County, Texas Trial Court Cause No. 2014-00464

          Panel consists of Chief Justice Frost and Justices Brown and Jewell


          Kevin Jewell Justice

         In this sex discrimination and retaliation suit under the Texas Commission on Human Rights Act ("TCHRA"), appellant Susette McNeel claims her former employer terminated her employment because she is a woman and because she engaged in protected conduct by reporting allegedly discriminatory actions by her direct supervisor. The employer moved for summary judgment, which the trial court granted. We affirm the trial court's judgment, concluding that McNeel presented no evidence to support either her sex discrimination or retaliation claims.


         McNeel is a certified public accountant who worked for appellee Citation Oil and Gas Corporation in the company's tax department, from November 2005 until March 2012. McNeel began as a senior tax accountant and was promoted to supervisor. She was responsible for ensuring that Citation complied with applicable state and local tax law and secured appropriate tax credits. She consistently received favorable performance reviews.

         McNeel's tax department supervisor was Tom Patrick. McNeel twice complained to Citation about Patrick. During her first report to Patrick's supervisor, Christopher Phelps, in 2011, [1] McNeel complained that Patrick made negative comments about female employees' weight (though not McNeel's weight), yelled, slammed his phone, and "coughed excessively."

         McNeel's second complaint stemmed from Patrick's alleged comment that he would "kill himself" if employees made errors in their work. In response to his comment, several employees allegedly expressed concern to McNeel, who then reported Patrick's comment to Nancy Anglin, Citation's vice president of human resources, in January 2012.

         During McNeel's tenure at the company, Citation distributed a Corporate Compliance Policy Statement and Code of Conduct ("Code of Conduct"), which, among other things, prohibited conflicts of interest and required employees to disclose any business or financial interest or relationship that might interfere with the employee's ability to pursue Citation's best interests. Citation also distributed to employees an employee handbook, which, among other things, prohibited misusing Citation's confidential information. McNeel received the Code of Conduct and the employee handbook. Pursuant to the Code of Conduct, if employees had questions, they were to ask Citation's Chief Compliance Officer to explain or clarify any guideline.

         While employed by Citation, McNeel formed an oil and gas tax consulting business, S.M. McNeel, CPA, PLLC, which operated under the trade name Enhanced Operating Recovery ("EOR"). EOR had one client, C&J Exploration, an oil and gas company that operated in Wagoner County, Oklahoma. More broadly, however, EOR marketed itself as a company that "specialize[d] in reducing Sales, Use and Severance Tax liability for oil and gas producers, " which would include Citation and Citation's competitors. (Emphasis added). McNeel did not disclose her side business to Citation. EOR's website portrayed as work performed by EOR at least one "case study" that McNeel admits was a tax-refund project that McNeel had worked on while employed at Citation.

         In March 2012, Citation's revenue supervisor was reviewing other companies' tax applications as examples of how to complete the application. During her review, the revenue supervisor discovered that McNeel had signed a tax application on behalf of C&J Exploration, and the revenue supervisor notified her supervisor, who then notified Patrick. Patrick testified that he visited the revenue supervisor's office, where he viewed the tax application and EOR's website, which included the non-attributed "case study" of Citation's prior tax project. Roughly one week later, Citation fired McNeel for violating the company's Code of Conduct. Specifically, as set forth in Citation's response to McNeel's interrogatories, Patrick and Phelps made the decision to terminate McNeel's employment because they concluded McNeel "engaged in a business marketed to [Citation's] competitors, failed to disclose this conflict of interest, misappropriated [Citation's] business information, and exhibited poor judgment in connection with these activities." In a meeting with Patrick and Anglin, Patrick told McNeel she was being terminated for having a business that constituted a conflict of interest.

         McNeel sued Citation under the TCHRA, claiming age discrimination, sex discrimination, and retaliation.[2] McNeel alleged that, while she was employed at Citation, Patrick "displayed abusive behavior toward her and other women" and "made rude and sexist comments to them and about them to [McNeel] and to other employees." McNeel claimed she was treated less favorably in the terms and conditions of her employment because of her gender and her age. She also alleged that Citation terminated her employment in retaliation for McNeel's complaints about Patrick's "unlawful and discriminatory conduct directed against her and other females." McNeel subsequently abandoned her age discrimination claim.

         Citation moved for summary judgment on McNeel's claims, asserting, among other things, that (1) as to McNeel's sex discrimination claim, there is no evidence McNeel was treated less favorably than similarly situated men; (2) as to McNeel's retaliation claim, there is no evidence that McNeel engaged in a protected activity or McNeel did not engage in a protected activity as a matter of law; (3) as to McNeel's retaliation claim, there is no causal connection between McNeel's complaints about Patrick's conduct and Citation's decision to terminate McNeel's employment; and (4) as to both of McNeel's claims, there is no evidence that Citation's reason for terminating McNeel's employment was pretextual. The trial court granted Citation's motion without specifying the grounds on which it ruled.

         McNeel now appeals the summary judgment, claiming, in a single issue, that genuine issues of material fact precluded summary judgment on both claims.

         Standard of Review

         We review a trial court's grant of summary judgment de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). In reviewing the trial court's summary judgment, "we apply the familiar standard of review appropriate for each type of summary judgment, taking as true all evidence favorable to the nonmovant, and indulging every reasonable inference and resolving any doubts in the nonmovant's favor." Dias v. Goodman Mfg. Co., L.P., 214 S.W.3d 672, 675-76 (Tex. App.-Houston [14th Dist.] 2007, pet. denied). In reviewing a no-evidence summary judgment, we ascertain whether the nonmovant pointed out summary judgment evidence raising a genuine issue of fact as to the essential elements attacked in the no-evidence motion. Johnson v. Brewer & Pritchard, P.C., 73 S.W.3d 193, 206-08 (Tex. 2002). In our de novo review of a trial court's summary judgment, we consider all the evidence in the light most favorable to the nonmovant, crediting evidence favorable to the nonmovant if reasonable jurors could, and disregarding contrary evidence unless reasonable jurors could not. Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 582 (Tex. 2006). The evidence raises a genuine issue of fact if reasonable and fair-minded jurors could differ in their conclusions in light of all of the summary judgment evidence. Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 755 (Tex. 2007).

         Finally, when, as here, the trial court grants a motion for summary judgment without specifying the grounds, we will affirm the trial court's judgment if any of the independent grounds supporting the motion is meritorious. FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 872-73 (Tex. 2000).

         Statutory Framework

         McNeel sued Citation under the TCHRA. See Tex. Lab. Code §§ 21.001 et seq. The TCHRA was enacted to "provide for the execution of the policies of Title VII of the Civil Rights Act of 1964 and its subsequent amendments." Id. § 21.001(1). Title VII is a federal law that prohibits employers from discriminating against employees on the basis of sex, race, color, national origin, and religion. See 42 U.S.C. §§ 2000e et seq. Although Texas courts enforce the plain meaning of the TCHRA and binding Texas precedent as to this statute's interpretation, when there is no binding precedent, Texas courts also look to federal law and federal cases for guidance in situations like today's case, in which the language of the TCHRA and the analogous federal statute contain the same or substantially similar language. See Tex. Lab. Code § 21.001; Prairie View A&M Univ. v. Chatha, 381 S.W.3d 500, 505 (Tex. 2012); Okpere v. Nat'l Oilwell Varco, L.P., No. 14-15-00694-CV, 2017 WL 1086340, at *5 n.6 (Tex. App.-Houston [14th Dist.] Mar. 20, 2017, pet. filed).

         As discussed in more detail below, the TCHRA prohibits employers from discharging an employee because of sex or from discriminating in any other manner against an employee in connection with compensation or the terms, conditions, or privileges of employment. Tex. Lab. Code § 21.051(1). The TCHRA also prohibits employers from retaliating against an employee who engages in certain protected activities. Id. § 21.055.

         There are two alternative methods by which a plaintiff can establish discrimination or retaliation under the TCHRA. See Quantum Chem. Corp. v. Toennies, 47 S.W.3d 473, 476-77 (Tex. 2001). An employee can offer direct evidence of the employer's discriminatory actions or words. Id. at 476. "'Direct evidence of discrimination is evidence that, if believed, proves the fact of discriminatory animus without inference or presumption.'" Coll. of the Mainland v. Glover, 436 S.W.3d 384, 392 (Tex. App.-Houston [14th Dist.] 2014, pet. denied) (quoting Jespersen v. Sweetwater Ranch Apartments, 390 S.W.3d 644, 653 (Tex. App.-Dallas 2012, no pet.)).

         Alternatively, because direct evidence of discrimination or retaliation is a "rarity" in employment cases, courts allow claims to proceed with indirect or circumstantial evidence of discrimination or retaliation. See Russo v. Smith Int'l, Inc., 93 S.W.3d 428, 434 (Tex. App.-Houston [14th Dist.] 2002, pet. denied). Under this second method, Texas courts follow the burden-shifting mechanism set forth by the United States Supreme Court in McDonnell Douglas. See McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802-05 (1973); Glover, 436 S.W.3d at 392.

         Under the McDonnell Douglas framework, as applied to the TCHRA, the plaintiff is entitled to a presumption of discrimination if the plaintiff meets the "minimal" initial burden of establishing a prima facie case of discrimination. See Mission Consol. Indep. Sch. Dist. v. Garcia, 372 S.W.3d 629, 634 (Tex. 2012).[3]The prima facie case raises an inference of discrimination because courts presume these acts, if otherwise unexplained, are more likely than not based on the consideration of impermissible factors. See id. Once a plaintiff has established a prima facie case of discrimination, the burden shifts to the defendant to produce evidence of a legitimate, nondiscriminatory reason for the adverse employment action. See M.D. Anderson Hosp. & Tumor Inst. v. Willrich, 28 S.W.3d 22, 24 (Tex. 2000) (per curiam); Okpere, 2017 WL 1086340, at *2. If an employer moving for summary judgment proves as a matter of law a legitimate, nondiscriminatory reason for the adverse employment action, the burden then shifts to the employee to raise a genuine fact issue as to whether the employer's reason was a pretext for discrimination. See M.D. Anderson Hosp. & Tumor Inst., 28 S.W.3d at 24; Okpere, 2017 WL 1086340, at *2.


         Though McNeel challenges the trial court's summary judgment in a single issue, we consider each of her two claims in turn.

         A. Sex discrimination claim

         McNeel's first claim under the TCHRA is that Citation terminated her employment because she is a woman. See Tex. Lab. Code § 21.051(1).

         There is no direct evidence that Citation terminated McNeel's employment on the basis of her sex. See Glover, 436 S.W.3d at 393. In the absence of direct evidence of discrimination, we apply the McDonnell Douglas framework. See Okpere, 2017 WL 1086340, at *2. For a claim of disparate treatment under the TCHRA, which is McNeel's theory, she can meet her prima facie burden by showing that she: (1) is a member of a protected class, (2) was qualified for her position, (3) was subject to an adverse employment action, and (4) was treated less favorably than similarly situated persons not in the protected class. See Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 142 (2000); Navy v. Coll. of the Mainland, 407 S.W.3d 893, 899 (Tex. App.-Houston [14th Dist.] 2013, no pet.). There is no dispute that McNeel was qualified for her job and that, as a female, she is a member of a protected class. Furthermore, there is no dispute that McNeel suffered an adverse employment decision when she was terminated. Citation moved for summary judgment on the ground that there is no evidence McNeel was treated less favorably than similarly situated men. Thus, we address whether the summary judgment evidence raised a genuine fact issue on this element of McNeel's prima facie case.[4]

         In her summary judgment response, McNeel identified one male employee, Curtis Carver, whom she alleged was situated similarly to her, but not terminated even though he engaged in the same prohibited conduct as McNeel.[5] The Supreme Court of Texas has concluded that "[e]mployees are similarly situated if their circumstances are comparable in all material respects." Ysleta Indep. Sch. Dist. v. Monarrez, 177 S.W.3d 915, 917 (Tex. 2005) (per curiam); Tooker v. Alief Indep. Sch. Dist., No. 14-15-00124-CV, 2017 WL 61833, at *7 (Tex. App.-Houston [14th Dist.] Jan. 4, 2017, no pet.). The United States Court of Appeals for the Fifth Circuit has articulated a similar standard, saying that employees are situated similarly if their circumstances are "nearly identical." See Perez v. Tex. Dep't of Crim. Justice, Institutional Div., 395 F.3d 206, 213 (5th Cir. 2004). Employees may be considered similarly situated "if their circumstances are comparable in all material respects, including similar standards, supervisors[, ] and conduct." See Rosenberg v. KIPP, Inc., 458 S.W.3d 171, 177 (Tex. App.-Houston [14th Dist.] 2015, pet. denied) (internal quotation omitted). Further, to establish that employees are "comparable in all material respects, " a plaintiff also must show "that there were no differentiating or mitigating circumstances as would distinguish the employer's treatment of them." Donaldson v. Tex. Dep't of Aging & Disability Servs., 495 S.W.3d 421, 435 (Tex. App.-Houston [1st Dist.] 2016, pet. denied) (internal quotation omitted).

         To show discrimination based on disparate discipline, the disciplined and undisciplined employees' misconduct must be of "comparable seriousness." Ysleta, 177 S.W.3d at 917.

         McNeel states that Carver had a side business buying and selling oil and gas leases.[6] McNeel alleges that Patrick told her that Carver worked on this private business during working hours and that Carver would ask Patrick for Patrick's opinion on certain aspects of the leases. Carver did not receive positive performance reviews, and Carver resigned in 2011 because of, according to Citation, "performance related concerns."

         McNeel contends that she and Carver, who was Citation's controller in the accounting department, both were subject to the same Code of Conduct and both allegedly had a "side business" that, given Citation's industry position, would constitute a conflict of interest. These circumstances, she argues, make the two employees similarly situated, and so Citation's treatment of Carver-"allow[ing]" him to resign instead of terminating him for a conflict of interest-raises a fact issue of disparate discipline.

         Citation responds that Carver is not similarly situated to McNeel because he obtained approval from Citation before investing in oil and gas leases, the decision to approve Carver's investment activity was made by a different person than the decision-makers involved in McNeel's termination, and Carver was assigned to a different supervisor than McNeel's supervisor. Citation also argues that Carver is not a permissible comparator because Carver's conduct and McNeel's conduct were not of "comparable seriousness."

         We need not decide if McNeel raised a fact issue regarding whether she and Carver were similarly situated employees or whether their respective conduct was of comparable seriousness. See Winters v. Chubb & Son, Inc., 132 S.W.3d 568, 576 (Tex. App.-Houston [14th Dist.] 2004, no pet.). Assuming without deciding that McNeel established a prima facie case that her termination was an instance that amounted to disparate discipline, the burden then shifted to Citation to articulate a legitimate, nondiscriminatory reason for her termination. See Dias, 214 S.W.3d at 676. Citation articulated a nondiscriminatory reason, and McNeel did not raise a genuine issue of material fact regarding pretext for the following reasons.

         In its motion for summary judgment, Citation argued and attached evidence showing legitimate, nondiscriminatory reasons for its termination decision, i.e., that McNeel was terminated for "multiple violations of company policy, " specifically including operating a business that conflicted with her position at Citation and misappropriating company work product and confidential information for use in the other business.[7] This showing satisfies Citation's burden of producing a nondiscriminatory reason for its decision. See Winters, 132 S.W.3d at 576. Citation's burden is merely one of production, not persuasion. Reeves v. Sanderson Plumbing Prods., 530 U.S. 133, 143 (2000); Russo, 93 S.W.3d at 437-38.

         McNeel argues that Citation's stated reason for her termination is pretext for discrimination. To raise a fact issue on the pretext element of a discrimination or retaliation claim, the employee must present evidence "indicating that the nondiscriminatory reason given by the employer is false or not credible, and that the real reason for the employment action was unlawful discrimination." Chandler v. CSC Applied Techs., LLC, 376 S.W.3d 802, 814 (Tex. App.-Houston [1st Dist.] 2012, pet. denied) (internal quotation omitted). "A plaintiff can avoid summary judgment if the evidence, taken as a whole, creates a fact issue as to whether each of the employer's stated reasons was not what actually motivated the employer and creates a reasonable inference" that the employer acted with the intent to discriminate or retaliate. Id.; see also Little v. Tex. Dep't of Crim. Justice, 177 S.W.3d 624, 632 (Tex. App.-Houston [1st Dist.] 2005, pet. denied) ("[T]he United States Supreme Court has made it clear that it is not sufficient merely to show that the employer's reasons are false or not credible; the plaintiff must prove that the employer discriminated intentionally."). "An employee's subjective belief that his employer has given a false reason for the employment decision is not competent summary judgment evidence." Chandler, 376 S.W.3d at 814.

         Setting aside McNeel's subjective beliefs, there is less than a scintilla of evidence that McNeel's sex was the reason for her termination or that her side business-including the information on EOR's website taken from her employment at Citation-was not the reason for her termination. She admits that she created a business for which she performed the same services she provided to Citation, and that the business's website included "case studies" that, in fact, were projects McNeel had worked on while employed at Citation.[8] She contends, though, that her actions did not violate the Code of Conduct or the employee handbook. This argument is insufficient to create a fact issue as to whether Citation's stated reason-McNeel's purported violation (or violations) of the Code of Conduct-was the real reason Citation terminated her employment or merely pretext for discrimination. See, e.g., Wawarosky v. Fast Grp. Houston Inc., No. 01-13-00466-CV, 2015 WL 730819, at *8 (Tex. App.-Houston [1st Dist.] Feb. 17, 2015, no pet.) (mem. op.) (employee's assertion that his conduct did not violate company policy "fail[ed] to raise a fact issue regarding [supervisor's] belief that [employee] violated the policy"); see also Nash v. Blood & Tissue Ctr. of Cent. Tex., No. 03-03-00763-CV, 2004 WL 2900483, at *6 (Tex. App.-Austin Dec. 16, 2004, no pet.) (mem. op.) ("Nash does not deny that he conducted an unauthorized background check on Benites; he only asserts that such conduct did not constitute a violation of [the employer's] policy. His claim does not provide a scintilla of evidence to overcome [the employer's] legitimate reasons for Nash's termination."). McNeel's subjective interpretation of the rules, or her disagreement over whether she violated them, is not sufficient to create a fact issue that Citation's stated reason was pretextual.

         Similarly, we find unavailing McNeel's contentions that she could not have been terminated unless and until Citation ultimately "determined" she had violated the Code of Conduct, and that there is a fact question as to whether Citation actually made such a determination. Evidence of an imperfect or incomplete investigation is not sufficient to raise a fact issue regarding pretext. See, e.g., Dotson v. TPC Grp., Inc., No. 01-14-00233-CV, 2015 WL 1135890, at *7 (Tex. App.-Houston [1st Dist.] Mar. 12, 2015, no pet.) (mem. op.) (employee's complaint that he was not afforded the opportunity to explain his actions failed to raise a fact issue as to employer's good faith belief of misconduct); see also Chandler, 376 S.W.3d at 818 ("[T]he ultimate inquiry is whether [the employer] had a good faith belief that Chandler violated the workplace rules.").

         We conclude that McNeel did not offer more than a scintilla of probative evidence that Citation's stated reason for her termination was pretext for discrimination. See Exxon Mobil Corp. v. Hines, 252 S.W.3d 496, 510 (Tex. App.-Houston [14th Dist.] 2008, pet. denied); Nash, 2004 WL 2900483, at *6; see also Jackson v. Cal-Western Packaging Corp., 602 F.3d 374, 379 (5th Cir. 2010) (employee's "assertion of innocence alone does not create a factual issue as to the falsity of [the employer's] proffered reason for terminating him"). Accordingly, the trial court ...

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