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Jones v. Tubal-Cain Hydraulic Solutions, Inc.

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

January 3, 2020

SENECA JONES, Plaintiff,
v.
TUBAL-CAIN HYDRAULIC SOLUTIONS, INC., et al, Defendants.

          ORDER

          Andrew S. Hanen United States District Judge

         The Parties and their counsel appeared before this Court for a bench trial for the determination of their claims in the above-styled and numbered case. Each side presented evidence during trial, produced briefing, made their respective arguments as to the effects of the evidence, and filed proposed findings of fact and conclusions of law (Doc. Nos. 101 & 102). The Couit hereby issues its findings of fact and conclusions of law.

         I. Introduction

         Plaintiff, Seneca Jones, is a former employee of Tubal-Cain Hydraulics Solutions ("Hydraulic Solutions") bringing suit against it and Tubal-Cain Industries ("Industries") alleging racial harassment and discrimination claims under both Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2OOOe et seq. ("Title VII") and 42 U.S.C. § 1981 ("Section 1981").

         II. Findings of Fact [1]

         A. Plaintiff Seneca Jones

         The Plaintiff, Seneca Jones, is African American. Prior to his stint at Hydraulic Solutions, Jones worked as a hydraulic mechanic at National Oil Varco ("NOV"). At the recommendation of a previous NOV co-worker, Mark Martinez, Hydraulic Solutions hired Jones as a leadman hydraulic mechanic in February of 2012. Jones's new hire paperwork indicates that Brent Hulsey authorized Jones's hiring, but credible testimony by David Villarreal showed that Villarreal actually authorized the hiring and Hulsey merely executed the paperwork. As a part of his onboarding paperwork, Jones received a copy of Hydraulic Solutions' employee handbook. In his role as leadman, Jones was responsible for leading small teams to do hydraulics works at oil rigs. At the time of his hiring and throughout his employment, Jones was a highly valued employee.

         Jones's time at Hydraulic Solutions (and after) was marred by incidents that cast some doubt on his reliability as a witness. Early in his time at the company, Jones called in to work asking for time off claiming his brother was killed in a drive-by shooting. In reality, it was a close friend who had died, and he died not by shooting but by car accident. In mid-June, Jones again called in to work asking for time off, this time stating his two children had been in a car accident. In reality, only one of his children had been in the car accident, as the second passenger was his nephew. In both situations, Jones's actions can be characterized as a stretching of the truth to engender sympathy.

         Jones's testimony during this lawsuit followed a familiar habit of either not telling or stretching the truth. Even, Jones admitted multiple times that he had lied under oath.[2] Further, Jones appeared unwilling to admit even the simplest of facts that may have cast a negative light on his case. For example, following Jones's call reporting his children were in an accident, management at Hydraulic Solutions circulated an email to the effect that Jones would be taking time off. In response to the e-mail, Matt Hoffman, the Director of Quality at Hydraulic Solutions, expressed sympathy for the Jones, stating "Can't this guy catch a break." During his testimony, Jones was asked about the e-mails and adamantly denied that the e-mail expressed any compassion towards him. Indeed, Jones's counsel recognized the flaws in his testimony stating on the record: "I acknowledge and we all acknowledge Mr. Jones is not perfect and he lied on some stupid stuff." Tr. Day 5 PM 37:11-13.

         Jones's credibility, or lack thereof, places the Court in a somewhat tenuous position. Many of the untruthful statements by Jones relate to inconsequential matters. As suggested by his own counsel, the maxim "he told a lie when the truth would do better" is particularly salient here. While many of the important facts here have been corroborated in some manner or another, the Court must note that, given this history, his many uncorroborated claims must be viewed with a wary eye.

         B. Defendants Tubal-Cain Hydraulic Solutions and Tubal-Cain Industries

         Defendants are Tubal-Cain Hydraulic Solutions and Tubal-Cain Industries. Defendant Tubal-Cain Industries ("Industries") was founded by Ed Van Huis III ("Ed Van Huis") in 1981. At the time of the relevant conduct, Industries was wholly owned by Ed Van Huis. In 2012, Industries' board of directors consisted of only Ed Van Huis. Debbie Van Huis, the wife of Ed Van Huis, was the Vice President of Industries and had, at all relevant times, the official title of Purchasing Manager, although she later became the head of human resources.

         Defendant Tubal-Cain Hydraulic Solutions was founded by Ed Van Huis and Alex Neer in 2010. At the time of the harassment, Hydraulic Solutions was jointly owned by Ed Van Huis and Alex Neer who held eighty and twenty percent of the shares respectively. At all times pertinent to this lawsuit, Alex Neer served as its President. In 2013, Hydraulic Solutions fell victim to the declining oil market and began laying off employees. In 2015, it succumbed to the failing market and filed for bankruptcy. The bankruptcy stay was lifted so that this lawsuit could proceed. See Dec. 4, 2018 Minute Order.

         C. Harassment of Jones

         Over the few months Jones worked at Hydraulic Solutions, he was subjected to a range of acts that most certainly equate to harassment. Testimony at trial showed that Jones's co-workers repeatedly used the "N"-word, referred to him as "boy" invoking rhetoric used by former slaveholders, and disregarded his authority as a leadman due to his race. The harassment reached its apex in late June of 2012 when Jones discovered a depiction of a stick figure being hung from a noose drawn in the style of the children's game "hangman." The figure was drawn on a white board in one of Hydraulic Solutions' box trucks. Beneath the figure, Jones's given name- "Seneca"-was spelled out. All the parties (and the Court) agree that the hangman incident as well as the other incidents were reprehensible, as they were a repulsive call-back to post-slavery lynchings of African Americans.

         Jones informally reported many of the early incidents to Brent Hulsey. (While Hulsey's name is at the center of many issues in the case, he was never called to testify at trial.) Jones alleges Hulsey was his supervisor at all times during the period in question. Hulsey's supervisor status is discussed below. Regardless of any purported status, Hulsey did nothing in response to these reports. When it came to the above-referenced hangman incident, Jones initially reported the incident to Hulsey. Seeing that Hulsey would not take action, Jones chose to go above Hulsey's head and report the incident to Tim Dimmick, Hydraulic Solutions' Technical Services Director.

         Dimmick immediately investigated the hangman incident. In response to the act, Dimmick took action against three employees. Upon finding Ian Brown and Aaron Boddie were involved in drawing the hangman, Dimmick fired Brown and re-designated Boddie-who had quit just days before-as not eligible for rehire.[3] Dimmick also fired Hulsey for his failure to report or act upon the racist acts. While the company was taking steps to remedy the situation, Jones was given two days of unpaid leave. Upon returning to work, Jones was informed of the actions the company had taken action against Boddie, Brown, and Hulsey.

         What happened next is subject to some factual dispute between the parties. Plaintiff alleges that upon returning to work on June 29, 2012 a second hangman drawing appeared in a box truck at Hydraulic Solutions and that he informed Hydraulic Solutions of its presence. Additionally, Plaintiff alleges that at the time he left work his tire was slashed. Defendants deny both allegations. No. one else witnessed these events and Jones did not initially tell anyone, including the EEOC, about them. They were raised for the first time in a follow-up letter to the EEOC written by Jones. Defendants question whether the tire was slashed or merely punctured via normal wear and tear. Given Jones' credibility problems, the Court harbors serious doubts as to the accuracy of this testimony. Nevertheless, it is undisputed that following June 29th, Jones never returned to Hydraulic Solutions. Jones cites fear for his safety as the reason. He did not resign, nor did he inform Hydraulic Solutions of this decision; he just never returned to work. Hydraulic Solutions disputes Jones' characterization of the workplace at that time as it argues that it immediately fired the culprits so that the work environment was free from discrimination.

         Assuming a second hangman drawing did appear in the box truck or elsewhere, it is unknown who drew it. Similarly, it is unknown who may have allegedly slashed Jones's tires. The only testimony presented at trial was speculation by Jones that Hulsey may have been the culpable party. Testimony from trial did suggest that Hulsey was present at Hydraulic Solutions on June 29th to return his work uniforms. If Jones's speculation is correct, the Court notes that Hydraulic Solutions cannot be blamed for these latter actions, as Hulsey had already been fired by the date in question.

         In its entirety, the Court finds that the harassment of Jones was inexcusable. The uses of the "N"-word and the hangman incident affected the terms, conditions, or privileges of his employment. Nevertheless, the Court does not believe that the harassment was so severe and pervasive as to create a work atmosphere in which a reasonable party in his shoes would have felt compelled to resign, given the immediate actions taken by Hydraulic Solutions. Indeed, all actions by Hydraulic Solutions demonstrate that Jones was a highly valued employee and that they not only took immediate action but also were willing to take appropriate action to root out any racial harassment.

         D. Brent Hulsey

         Brent Hulsey is a central figure in this case. According to Jones and former Hydraulic Solutions leadman Mark Martinez, Hulsey was amongst Jones's harassers, using the "N"-word multiple times in Jones's presence. When Plaintiff began working at the company, Hulsey was a shop supervisor at Hydraulic Solutions. While Hulsey's name appeared on both termination (not regarding Jones) and hiring (including Jones) forms and while he gave recommendations to management on hiring and firing decisions, this Court finds that he did not actually have the individual autonomy to hire or fire employees.

         Moreover, Hulsey was demoted once during Plaintiffs short tenure at the company. In late May, he was demoted to lead man for wrecking a company truck. Defendants' Ex. 23. The demotion not only carried a loss of title, but also a pay reduction, and in his new role, Hulsey had fewer, if any, managerial responsibilities. Apparently, he still retained the ability to set hours and assign tasks.

         On June 27, 2012, following the first hangman incident, Hulsey was fired for his failure to report racial harassment up the chain of command. Hulsey was eventually re-hired to an outside sales position by Hydraulic Solutions in late August of 2013 with no supervisory duties, more than a year after the first hangman incident and long after Jones had left the company.

         E. Mark Martinez

         Mark Martinez was a fellow leadman at Hydraulic Solutions. Martinez is Mexican American, and evidence at trial showed Martinez was similarly subjected to racist acts at the hands of Hydraulic Solutions employees.[4] While Jones was still at Hydraulic Solutions, employees subjected Martinez to derogatory racial slurs. Further, Martinez's hard hat was vandalized one day at work with racial remarks and sexual symbols. Without any replacement hats, Martinez was forced to wear the vandalized hard hat on the job. Those responsible were fired. About six months after Jones left Hydraulic Solutions, Martinez had his room at a worksite raided by Hydraulic Solutions employees. The employees stole some of Martinez's possessions, urinated on others, and left the remaining possessions strewn around the room and outdoor area. These actions occurred on account of Martinez's status as a minority. The employees who were involved in the incident quit that same night before they could be fired. Despite these occurrences, Martinez stayed at the company until June of 2013 when he was laid off amidst Hydraulic Solutions' diminishing financial situation. He was the final leadman laid off.

         F. The Tubal-Cain Companies, the Van Huis Family, and Plaintiffs Integrated Enterprise Theory

         One of the most contested issues at trial was whether Hydraulic Solutions and Industries were an integrated enterprise. If so, Industries could be held jointly and severally liable for the actions of Hydraulic Solutions' employees. The Court makes the following factual findings as to the integrated enterprise theory.

         As mentioned above, at all relevant times, Ed Van Huis wholly owned Industries. In 2010, Ed Van Huis, along with Alex Neer, launched Hydraulic Solutions. Ed Van Huis had an eighty percent ownership stake. To help Hydraulic Solutions get its feet off the ground, Ed Van Huis provided it with various templates, including Industries' employee manual and other employment forms. These collective employment documents were prepared by an attorney, Elizabeth Pratt, for his other companies. Rather than re-invent the wheel, Ed Van Huis provided the forms to Hydraulic Solutions and told Alex Neer that he could modify them as needed. Ed Van Huis asked that substantive changes be run by him. While the employment manual was edited in some places, such as replacing Industries' name with "Hydraulic Solutions," at the time of the harassment, most of the manual remained unchanged.[5] With respect to the manual, the Court finds Hydraulic Solutions made its decisions free from the control of Industries.

         Industries also provided accounting services, IT services, and occasional safety consultations to Hydraulic Solutions. Among the duties Industries undertook for Hydraulic Solutions on this front included collecting accounts receivable and performing tasks related to payroll.[6] At all times, Hydraulic Solutions paid arms-length prices for these services. Indeed, Ed Van Huis intentionally "up-charged" Hydraulic Solutions to ensure as much.

         Debbie Van Huis is a also central character to Plaintiffs integrated enterprise allegations. Debbie Van Huis is the wife of Ed Van Huis. She did not directly own any shares of Hydraulic Solutions or Industries. Testimony at trial revealed many ways in which Debbie Van Huis participated in Hydraulic Solutions' employment practices including:

• Sending an e-mail with the template employee manual to Hydraulic Solutions;
• Participating in some of the meetings where her husband was routinely briefed on the weekly ins-and-outs of Hydraulic Solutions;
• Bringing an EEOC deadline (contained on an unopened certified mail envelope) to the attention of Hydraulic Solutions, after incidentally finding a copy of an unopened EEOC notice at Hydraulic Solutions while her husband was in a meeting;
• Being copied to a response sent to the EEOC after she brought the deadline to the company's attention;
• Suggesting keeping records and getting statements related to the EEOC ...

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