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Donald v. Plus4 Credit Union

United States District Court, S.D. Texas, Houston Division

July 31, 2017

Emma Donald and Christopher Lee, Plaintiffs,
Plus4 Credit Union, Defendant.


          Gray H. Miller United States District Judge

         Pending before the court are motions for summary judgment and objections to summary judgment evidence, which include: (1) defendant Plus4 Credit Union's (“Plus4”) motion for summary judgment against plaintiff Emma Donald (Dkt. 16); (2) Plus4's motion for summary judgment against plaintiff Christopher Lee (Dkt. 17); (3) plaintiffs' objections and motion to strike Plus4's summary judgment evidence (Dkt. 22); and (4) Plus4's objections to the plaintiffs' summary judgment evidence (Dkt. 26).

         Having considered the motions, responses, replies, objections, evidentiary record, and applicable law, the court is of the opinion that (1) Plus4's motion for summary judgment against Emma Donald (Dkt. 16) should be GRANTED IN PART AND DENIED IN PART; and (2) Plus4's motion for summary judgment against Christopher Lee (Dkt. 17) should be GRANTED IN PART AND DENIED IN PART.

         Additionally, (3) the plaintiffs' objections should be SUSTAINED IN PART AND OVERRULED IN PART and their motion to strike (Dkt. 22) should be GRANTED IN PART AND DENIED IN PART; and (4) Plus4's objections to the plaintiffs' summary judgment evidence (Dkt. 26) should be SUSTAINED IN PART AND OVERRULED IN PART.

         I. Background

         This is an employment discrimination case. Emma Donald and Christopher Lee (collectively, the “Plaintiffs”) brought suit against their former employer, Plus4, for terminating their positions because of discriminatory and retaliatory reasons. Dkt. 9. Donald, an African American female, served as Plus4's Human Resources Manager from November 12, 2013, until her termination on March 27, 2015. Id. In July 2014, Donald alleges that Plus4's Chief Operating Officer Patricia Fendley instructed her to hire only white employees for a new branch office located in Humble, Texas. Dkts. 9, 21. Fendley stated, “Hire all White but maybe have one (1) Black person as a teller in the back so they wouldn't be seen . . . We have to have the right look.” Dkts. 9, 21-2, Ex. A at ¶ 3 (Donald Aff.). Donald verbally disagreed with Fendley's order. Id.

         A. Christopher Lee's Hiring

         In August 2014, Donald hired an African American female for another branch location and co-plaintiff Lee, an African American male as a temporary bank teller for the Humble location. Dkt. 9. Lee was referred to Plus4 from PrideStaff, a temporary staffing agency. Dkt. 17. During his interview, Lee had his hair styled in dreadlocks. Dkt. 17, Ex. B. at 48 (Lee Dep.). Lee interviewed with Donald, Sales Manager Sharoye Taylor, and Humble Branch Manager Dana Mack. Id. at 47. On August 8, 2014, Donald, Mack, Fendley, and Plus4 Chief Executive Officer Vladimir Stark agreed to hire Lee and they all signed his approval form for him to begin a 90-day trial period. Dkt. 17 at 6; Ex. D (Lee's approval to hire form).

         On August 18, 2014, Lee's first day of employment, Donald alleges that Fendley instructed her to fire Lee because he was black and had dreadlocks. Dkts. 9, 21-2, Ex. A ¶¶ 4, 5. Fendley told Donald not to tell PrideStaff the real reason behind Lee's termination. Id. Fendley also said that she would start sitting in on all of Donald's interviews so that “we can hire the right people for Humble.” Id. Donald verbally disagreed with Fendley and said that Lee cannot be fired for those reasons. Id. Donald later sent her concerns to Fendley via e-mail. Id. According to Donald, Fendley began to closely monitor Lee through the company's video system on a daily basis, which she did not do to other employees to the same extent or frequency. Dkts. 9, 21-2, Ex. A ¶ 8. On several other occasions, Fendley ordered Donald to terminate Lee's employment, and each time Donald refused. Id. at ¶ 9.

         Stark recommended that Donald meet with one of Plus4's lawyers from the law firm Kennard Blankenship Robinson, P.C. Id. In August 2014, Donald told the lawyer about Fendley's instruction to hire only whites for the Humble location and to fire Lee because he was black and had dreadlocks. Id. Donald claims that the lawyer said he would conduct leadership and diversity classes with Plus4 management, but no such classes were conducted. Id.

         After refusing to terminate Lee, Donald argues that on October 31, 2015, she received a less favorable performance review and was told to be compliant when the executive team asked her to do something. Dkt. 16-5, Ex. A at 116 (Donald Dep.). Donald alleges that up until that point, the only time that she refused to comply with executive orders was when she was asked to “fire Christopher Lee and discriminate against him for having dreads” and “not to hire any blacks at the Humble location.” Id. Donald alleges that this written review was not given to her until February 10, 2015, about a month and a half before she was terminated. Dkt. 9.

         B. Christopher Lee's Termination

         On November 14, 2014, Lee was terminated from his temporary branch teller position. Dkt. 17. The parties dispute the reasons for Lee's termination. During Lee's trial period, Plus4 alleges that his manager complained about his performance because he was taking personal calls while he was at work, he did not permit a new employee to train with him, and he disturbed other co-workers with his loud singing. Dkt. 17. On November 12, 2014, Humble Branch Manager Dana Mack e-mailed Donald regarding Lee's performance issues. Dkt. 17, Ex. N. That same day, Donald forwarded the e-mail to Fendley and asked for Fendley's permission “to let Friday be Christopher [Lee's] last day, ” stating that these were “performance issues.” Dkt. 17, Ex. O. Donald, on the other hand, argues that after refusing to terminate Lee on several occasions, she “no longer could win against Ms. Fendley” and agreed to Lee's termination. Dkt. 21-2, Ex. A ¶ 11. Donald stated that she needed her job and “wanted all of this to end.” Id. “I knew that Ms. Fendley was going to get her way, with or without my support.” Id.

         Plus4 argues that four months after Lee was terminated, Donald contacted Lee and told him that he had been fired because of discrimination against his race, color, and religion. Dkt. 17. Plus4 argues that Lee's discrimination claims fail because he cannot show that the reason why he was terminated was because of his race, color, or religion and not because of his performance at work. Id. Lee counters that there is direct evidence that his termination was due to discrimination against his color, race, and/or religion based on Fendley's statements and actions. Dkt. 21.

         C. Emma Donald's Termination

         From November 2014 until Donald's termination in March 2015, Donald alleges that she: (1) “continued to oppose other discriminatory practices and [believed she] was being retaliated against by Ms. Fendley, ” and (2) met with Plus4 lawyers on a second occasion to discuss her concerns that Fendley was retaliating against her and LaDonna Wells, an African American female who Fendley wanted fired. Dkt. 21-2, Ex. A (Donald Aff.).

         On March 27, 2015, Donald was terminated from her position as Human Resources Manager. Dkts. 9, 16. The parties dispute the reason for her termination. Plus4 argues that it eliminated Donald's position due to a reduction in force. Dkt. 16. In the first quarter of 2015, Plus4 claims that it began to face financial issues. Id. Donald attended a managers meeting where they made several recommendations to reduce costs, including a general recommendation to reduce staffing costs by $50, 000. Id. According to Plus4, Stark conferred with Fendley about the managers' recommendations, and then individually came to the conclusion to eliminate the Human Resources Department. Id. This included Donald's Human Resources Manager position and a Human Resources Assistant position held by Amy Baker, a white female. Id. Stark prepared a memo analyzing the reduction in force of the Human Resources Department and claimed that an Executive Assistant would absorb any duties not handled by a third-party human resources company. Id.; Dkt. 23-2 at 39 (memo analyzing reduction in force).

         While Donald does not dispute that the company was facing financial difficulties, she argues there is scant evidence of a reduction in force. For example, as the Human Resources Manager in February 2014, Donald received an e-mail from Fendley advising that the company was under a hiring freeze, but during that same month, Plus4 hired Celeste Douglas for a manager position without an open office or written job description. Dkt. 21-2, Ex. A ¶ 15; see also Dkt. 21-4, Ex. C at 44 (Stark Dep.) (hiring freeze). Donald argues that the real reasons why she was terminated were because Plus4 discriminated against her race, color, and/or sex, and retaliated against her for (1) disregarding Fendley's instruction to hire whites only, (2) repeatedly refusing to terminate Lee when Fendley ordered her to do so, and (3) for meeting with Plus4 lawyers to discuss her concerns on two occasions, including a March 2015 meeting held about two weeks before her termination. Dkt. 21.

         D. Procedural History

         On May 18, 2015, and on June 4, 2015, Donald and Lee each filed a separate charge of discrimination against Plus4 with the Equal Employment Opportunity Commission (“EEOC”). Dkt. 9. On October 21, 2015, the EEOC issued Notices of Right to Sue, entitling the Plaintiffs to file an action under Title VII. Id. On January 15, 2016, the Plaintiffs filed a complaint against Plus4 with discrimination and retaliation claims. Dkt. 1. On January 20, 2017, Plus4 moved for summary judgment against all of Emma Donald's discrimination and retaliation claims (Dkt. 16) and against all of Christopher Lee's discrimination claims (Dkt. 17). The Plaintiffs filed a combined response to the motions and Plus4 replied to each motion. Dkts. 21 (response), 23 (reply to Donald), 24 (reply to Lee). The Plaintiffs also filed objections and a motion to strike Plus4's summary judgment evidence. Dkt. 22. Plus4 also filed objections to the Plaintiffs' summary judgment evidence. Dkt. 26. The parties responded to each other's objections. Dkts. 25, 27.

         II. Legal Standard

         A court shall grant summary judgment when a “movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c). “[A] fact is genuinely in dispute only if a reasonable jury could return a verdict for the non-moving party.” Fordoche, Inc. v. Texaco, Inc., 463 F.3d 388, 392 (5th Cir. 2006) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505 (1986)). The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548 (1986). If the party meets its burden, the burden shifts to the non-moving party to set forth specific facts showing a genuine issue for trial. Fed.R.Civ.P. 56(e).

         The nonmovant must “go beyond the pleadings and by [his] own affidavits, or by depositions, answers to interrogatories and admissions on file, designate specific facts showing that there is a genuine issue of material fact for trial.” Giles v. General Elec. Co., 245 F.3d 474, 493 (5th Cir. 2001), citing Celotex, 477 U.S. at 324. The court must view the evidence in the light most favorable to the non-movant and draw all justifiable inferences in favor of the non-movant. Envtl. Conservation Org. v. City of Dall., Tex., 529 F.3d 519, 524 (5th Cir. 2008).

         III. Analysis

         Donald and Lee's discrimination and retaliation claims arise under Title VII of the Civil Rights Act of 1964. Dkt. 9. Title VII prohibits an employer from discriminating against its employees on the basis of “race, color, religion, sex, or national origin, ” or retaliating against an employee for filing a complaint or opposing a discriminatory practice. 42 U.S.C. §§ 2000e-2-3; Boyd v. State Farm Ins. Co., 158 F.3d 326, 328 (5th Cir. 1998) (citing 42 U.S.C. § 2000-2(a)); see Autry v. Fort Bend Indep. Sch. Dist., 704 F.3d 344, 346-47 (5th Cir. 2013) (race); Long v. Eastfield Coll., 88 F.3d 300, 304 (5th Cir. 1996) (retaliation). The court will first address each party's objections to the summary judgment evidence and then analyze each cause of action.

         A. Plaintiffs' Objections and Motion to Strike (Dkt. 22)

         First, the Plaintiffs move to strike any reference to Plus4's third-party human resources company, CU People, Inc. (“CU People”) from Plus4's motion for summary judgment on Donald's claims. Dkt. 22. The Plaintiffs argue that the statements made by CU People constitute hearsay and that Plus4 has not shown that it falls within a hearsay exception. Fed.R.Evid. 803; Dkt. 22 at 2. Second, the Plaintiffs move to strike three sentences in Vladimir Stark's affidavit referencing CU People. Id. (citing Dkt. 16-5 at 31 ¶ 9). Third, the Plaintiffs move to strike three exhibits that are attached to Plus4's motion for summary judgment on Lee's claims. Dkt. 22 (citing Dkt. 17, Exs. J, K, L). The court will address each objection in turn.

         First, the Plaintiffs object to any reference to CU People in Plus4's motion for summary judgment on Donald's claims. Dkt. 22 (citing Dkt. 16). The Plaintiffs make a general hearsay objection to CU People and do not cite to specific sections. Dkt. 22. Plus4 responded to the motion to strike by including excerpts from its motion for the court's convenience. See e.g., Dkt. 25 at 2 (“Mr. Stark considered the cost savings that would result from the elimination of Donald's and Ms. Baker's salaries, and the fact that Plus4 already had a contract with CU People, Inc., a third-party HR consulting company”). Plus4 argues that these statements are not hearsay because they are based on Stark's personal knowledge of an existing contract that he signed with a third-party human resources company, and formed the basis for his business decision. Dkt. 25 at 2-3. The court agrees with Plus4 and finds that the excerpted passages pertain to Stark's opinion on the financial situation of the company, which he had personal knowledge of as the company's CEO. Fed.R.Evid. 602, 803(3). The Plaintiffs' objections to references to CU People are OVERRULED.

         Second, the Plaintiffs move to strike portions of the Stark affidavit. Dkt. 22 (citing Dkt. 16-5, Ex. B). The Plaintiffs object to the following as hearsay:

I was aware that Plus4 had an existing contract with CU People, Inc., a third-party HR consulting company, that provided for many of the same services performed by Plus4's two internal HR employees. Previously, a representative of CU People had informed me that there were services within our existing contract that Plus4 was paying for but was not fully utilizing. In light of the ongoing budgetary concerns . . . and the fact that Plus4 was already utilizing and paying a third-party HR vendor, I concluded that elimination of Plus4's internal HR department . . . would be a helpful measure to reduce Plus4's expenses. Dkt. 16-5, Ex. B at 31 ¶ 9.

         The court finds that at least some of Stark's statements do not constitute hearsay because they are not offered for the truth of the matter asserted. As the CEO, Stark signed a contract with CU People, and therefore had personal knowledge of the contents of the contract and that CU People was a third-party human resources company. Fed.R.Evid. 602, 803(3). The statement “Previously, a representative of CU People had informed me that there were services within our existing contract that Plus4 was paying for but was not fully utilizing” would constitute hearsay if it were offered for the truth of the matter asserted. Dkt. 25 at 4-5.

         However, Plus4 argues that it falls into the state of mind exception to hearsay. Id.; Fed.R.Evid. 801, 803(3). Plus4 argues that Stark's declaration “simply offers testimony as to how he initially learned of underutilized services offered by CU People” and was what “Mr. Stark took into consideration when making his ultimate decision to eliminate Plus4's HR department.” Dkt. 25 at 5. The court finds that CU People's representations were used as part of the basis for Stark's decision, therefore it falls under the state of mind exception. Fed.R.Evid. 803(3). Accordingly, the Plaintiffs' objections to the three sentences in Stark's affidavit are OVERRULED. The Plaintiffs' motion to strike these three sentences is DENIED.

         Next, the Plaintiffs move to strike evidence in Plus4's motion for summary judgment on Lee's claims. Dkt. 22 at 3. Plus4 presents three memoranda from Lee's supervisors Dana Mack, Kerri Zinn, and Sharoye Taylor, describing Christopher Lee's poor work performance in 2014. Dkt. 17-4, Exs. J, K, L. Plus4 argues that the memoranda are admissible as business records under Rule 803(6)(A) because “it was the regular course of business of Plus4 for an employee or representative of Plus4, with knowledge of the acts or events that were recorded, to make these records or to transmit the information to be included in these records.” Dkt. 25 at 6 (citing Dkt. 17-2 at 6). Rule 803(6)(A) states that a record of an act, event, condition, opinion, or diagnosis is excluded as hearsay if “the record was made at or near the time by-or from information transmitted by-someone with knowledge.” Fed.R.Evid. 803(6)(a).

         The Plaintiffs counter that these memos were not made in the ordinary course of business, and were not made contemporaneous to the alleged act or event. Dkt. 22. The memos were either undated or dated in July 2015, several months after Lee was terminated. Dkt. 17-4, Exs. J-L. On November 18, 2014, while Donald was still the Human Resources Manager, Lee was terminated from his position. Dkt. 22. Donald testified that no such memos were prepared or contained in Lee's employee file when he was terminated. ...

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