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Media Alerts - Burton v. Teleflex Inc - Third Circuit
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February 22, 2013
  Burton v. Teleflex Inc - Third Circuit
Area of Law: Age and sex discrimination in employment

Issues Presented: Did Plaintiff resign or was she terminated? If she was terminated, was the decision motivated by discriminatory reasons related to her age or sex?

Brief Summary: Plaintiff sold two companies she had founded to Defendant Teleflex in 2007 and entered into an employment contract to serve as Vice President of New Business for Teleflex for two years. Not long afterwards on June 3, 2008, Plaintiff and her manager, Boarini, had a conversation that resulted in Plaintiff's termination. Boarini and other employees maintain that Plaintiff resigned after the June 3 conversation. Following the conversation Plaintiff went on a previously scheduled week long vacation, during which there is some evidence that she performed work for Defendant. On the day Plaintiff was to return to work, June 16, 2008, she received a letter from Defendant Teleflex stating that it was "formally accepting" her "resignation." Plaintiff maintained that she never resigned; she considered this letter to mean she was fired, and brought federal claims under Age Discrimination in Employment Act (ADEA) and Title VII of the Civil Rights Act of 1964. She brought state claims under the Pennsylvania Human Rights Act (PHRA), breach of contract, implied covenant of good faith and fair dealing, interference with contractual relationship and defamation.

The District Court granted summary judgment on all claims, finding that Plaintiff had resigned. The Third Circuit Court of Appeals reversed the grant of summary judgment on the ADEA, Title VII, PHRA and breach of contract claims and remanded. Summary judgment on the remaining claims was affirmed. The Court of Appeals reasoned there was sufficient evidence to establish a genuine dispute of material fact over whether Plaintiff had resigned and that the District Court's determination that Plaintiff had resigned improperly influenced its McDonnell Douglas analysis. The Court reasoned that the District Court had given undue credence to testimony of Defendant's witnesses over Plaintiff's and that it had disregarded contrary evidence that Plaintiff had never tendered her resignation, that she had never told a supervisor or superior that she was resigning, that Defendant had relied on entirely on hearsay statements, and that it had never once asked Plaintiff directly if she had resigned.

Extended Summary: Plaintiff founded two companies that manufactured medical devices and served as the president of both until she sold them to Defendant Teleflex in 2007. After the sale, Defendant entered into employment agreements with Plaintiff, and her son, Edward Burton. Plaintiff was hired as the Vice President of New Business. Her employment agreement specified that Plaintiff could terminate her employment by giving written notice at least thirty (30) days prior to the date she was to stop working. Defendant could terminate Plaintiff's employment without cause by written notice at least thirty (30) days prior to the date she was to stop working. Defendant could also terminate Plaintiff for cause upon written notice.

Plaintiff was 67 when she took the position and her responsibilities included: directing and supervising the sales department, overseeing customer service of existing accounts, developing new business and preparing price quotes. She had done this for over forty (40) years in her capacity of president of her own business and was well qualified to perform the work.

Plaintiff's manager was Edward Boarini, and although their professional relationship was strained, it is undisputed that Defendant Boarini never informed Plaintiff of any problems with her performance. In February or March of 2008, Defendant transferred Faris, a male employee in his forties, to be the director of sales. He was told to work closely with Plaintiff and learn from her. Defendant admits that sales leadership was initially a duty of Plaintiff's and that it was removed from her portfolio by transferring Faris.

On June 3, 2008, Plaintiff and other employees, including Faris and Boarini were promoting the company at a Medical Device Trade Show. Boarini told Plaintiff that he wanted to speak with her. He testified that he intended to discuss Plaintiff's lack of communication and undefined performance objectives. Plaintiff confronted Boarini, asking him what he needed to speak with her about. According to Plaintiff, Boarini tried to brush her off but she insisted on talking and asked Boarini if Defendant Teleflex wanted her to resign. Plaintiff testified that Boarini was at first adamant that Defendant needed Plaintiff and did not want her to resign. She said that shortly afterward he changed his tune and told her that she should think about resigning.

Defendant's version of the events is similar, except that Boarini maintained it was only after Plaintiff mentioned resigning multiple times that he agreed that she should resign. Boarini also testified that Plaintiff resigned at the end of that conversation. He admitted that she never expressly told him that she was resigning, but simply ended the conversation by walking away. Two other employees, including Faris, testified Plaintiff told them that she resigned. Plaintiff did not return to Teleflex's trade show booth for the next two days, June 4 and 5. On June 4, however, she did meet with Faris to train him and spoke about working with him in the future. On June 6, she left for a one week vacation she had scheduled prior to the trade show, with the approval and knowledge of Defendant Teleflex. There is evidence that during her vacation, Plaintiff attempted to contact Telefax to phone in price quotes.

On June 16, 2008 when Plaintiff was to return to work, she got a letter from the Human Resources department stating that Teleflex was "formally accepting" her "resignation." Even though under her employment agreement Plaintiff was not entitled to severance if she resigned, the letter offered her six (6) months' severance if she would extend her non-compete agreement and release Defendant from any liability regarding her employment. Plaintiff testified that she was surprised at this letter and assumed that she had been fired. She did not personally contact Teleflex to contest the letter or her resignation, but did contact her lawyers, who communicated with Teleflex regarding Plaintiff's employment and termination

Defendant Teleflex also sent a letter to Plaintiff's customers and other Teleflex employees stating that Plaintiff had left the company "to pursue other opportunities." Teleflex also listed this as her reason for dismissal on internal paperwork. Plaintiff filed suit under the Age Discrimination in Employment Act (ADEA) and Title VII of the Civil Rights Act of 1964. Plaintiff also brought state claims under the Pennsylvania Human Rights Act (PHRA), breach of contract, implied covenant of good faith and fair dealing, wrongful interference with a contractual relationship and defamation. The District Court granted summary judgment on behalf of Defendants, holding that Plaintiff resigned and could not demonstrate that Defendant's acceptance of her resignation was a pretext for discriminatory action. Plaintiff appealed.

The Court of Appeals first addressed Plaintiff's discrimination claims under ADEA and Title VII. Because Plaintiff provided no direct evidence of discrimination, it applied the three step framework established in McDonnell-Douglas Corp v. Green 411 U.S. 792, 802-803 (1973) to analyze both claims. Under this framework, the burden starts with Plaintiff, who is required to make out a Prima Facie case of discrimination. The Court agreed with the District Court that Plaintiff had satisfied this burden.

If the Prima Facie case is established, step two of the McDonnell-Douglas framework shifts the burden to the Defendant, requiring it to show a legitimate, non-discriminatory justification for the adverse employment action. The Court emphasized that this is a relatively light burden which at this stage does not require that the Defendant prove that the articulated reason actually motivated its conduct. Defendant must only provide evidence which, if true, would permit a conclusion that the action was taken for a non-discriminatory reason. The Court agreed with the District Court that Defendant satisfied this burden.

The burden again shifts to Plaintiff in the third step of the McDonnell-Douglas framework. The Plaintiff must provide evidence from which a fact finder could reasonably infer that Defendant's articulated reason is merely a pretext for discrimination. Direct evidence is not required to satisfy this burden. Plaintiff can satisfy the burden by presenting circumstantial evidence from which a fact finder could reasonably disbelieve Defendant's articulated reason or believe an invidious discriminatory reason was more likely than not a motivating or determinative cause of Defendant's action. The burden is also satisfied if a reasonable fact finder could rationally find the articulated reason to be "unworthy of credence." The Court disagreed with the District Court over its treatment of step three, the pretext burden on Plaintiff.

The Court held that the District Court's determination that there was no genuine dispute of material fact over whether Plaintiff resigned or was terminated was incorrect, and that it improperly impacted its conclusion that Plaintiff had failed to meet her burden on pretext. It reasoned that Plaintiff did offer evidence from which a reasonable fact finder could conclude that Defendant fired her. The Court emphasized that no employee of Defendant had verified or confirmed with Plaintiff that she actually resigned, and that Plaintiff never submitted a resignation letter or formally notified Defendant of her resignation. This is especially notable because the employment agreement specified that Plaintiff could only terminate her employment by giving written notice within thirty (30) days. The Court also found it important that Plaintiff never even mentioned resigning to any employee of Defendant who was above her in the chain of command and that Boarini, as her supervisor, never confirmed the resignation after the June 3 incident.

The Court also held that the District Court engaged in improper credibility determinations. It held that by crediting Boarini's and Faris's testimony that Plaintiff had resigned, but disregarding Plaintiff's and Edward Burton's conflicting testimony, the court had erroneously engaged in credibility determination. The Court discussed other evidence that the District Court had not properly considered. For example, neither Boarini nor the HR director could explain why Plaintiff's departure was not designated as resignation on internal forms. And about a month prior to the June 3 incident, internal e-mails refer to getting Plaintiff to "play ball." The court held that it was plausible that a jury could perceive the comment as a reference to pushing Plaintiff out of her position.

The District Court also failed to consider Plaintiff's communications with Defendants after the June 16 letter through her lawyer. The Court of Appeals held that failure to consider these communications undermined the District Court's conclusion that Plaintiff did not contest the letter. The District Court also ignored evidence that Plaintiff continued to perform work for Defendant after the June 3 incident, by training Faris at the trade show and attempting to phone in price quotes while on vacation. The Court held that at this stage of the litigation, this evidence is sufficient for a reasonable juror to conclude Plaintiff was fired and did not resign, and therefore there was a genuine dispute of fact on this issue.

Since PHRA claims should be interpreted as identical to federal anti-discrimination law and are often considered collectively and coextensively with Title VII and ADEA claims, the Court reversed and remanded on the ADEA, Title VII and PHRA claims. The Court also reversed and remanded the grant of summary judgment on Plaintiff's contract claims. As it established in its analysis of the discrimination claims, there is a genuine issue of dispute over the material fact of whether Plaintiff resigned or was fired. The Defendant does not claim that Plaintiff was terminated for cause and Boarini never brought any performance issues to Plaintiff's attention. If it is determined that Plaintiff was fired, and did not resign, then it is possible that Defendant breached the employment agreement.

The Court affirmed the grant of summary judgment as to the good faith and fair dealing, wrongful interference with contractual relations, and defamation claims. It held that under Pennsylvania law, the implied covenant of good faith and fair dealing does not allow for a cause of action separate and distinct from a breach of contract claim. Such claims are subsumed in contract claims and do not present independent grounds.

The Court also held that Plaintiff could not prove that Boarini was acting as a third party or outside the scope of his employment, as would be required to prevail on a claim of wrongful interference with contractual relations. Since corporate agents acting within the scope of employment act on behalf of the corporation, an employee cannot be considered a third party. There was no evidence here that Boarini was acting outside the scope of his employment with Defendant Teleflex. The Court affirmed summary judgment on the defamation claim because Plaintiff could not prove that statements to the effect that she left the company "to pursue other opportunities" was capable of defamatory meaning, or that harm resulted to her from its publication. Defamatory statements must do more than annoy or embarrass the Plaintiff and in this case the statement was incapable of harming Plaintiff's reputation or standing in the community. Evidence of an employee Christmas party that Plaintiff held after her termination and the multiple job offers she received cut against the assertion that Plaintiff was damaged by the statement.

Lastly, the Court denied a motion by Plaintiff to supplement the record to include an affidavit from her attorney and an e-mail exchange between Plaintiff's and Defendant's counsel which would clarify the issue of whether or not she contested the July 16 letter. The motion was denied because Plaintiff did not claim that this information was not in her possession when she opposed Defendants' motion for summary judgment and because the materials add little to the record.

The full text of the opinion can be found at www.ca2.uscourts.gov/opinionarc113752p.

Panel: Circuit Judges Ambro, Greenaway, Jr. and O'Malley

Author: Judge Greenaway

Argument Date: September 20, 2012

Date of Issued Opinion: Feb 20, 2013

Docket Number: 11-3752

Case Alert Author: Shannon Harkins

Counsel: Nina B. Shapiro, Counsel for Appellant. David S. Fryman, Alexandra Bak-Boychuck, Ballard Spahr, Counsel for Appellees.

Circuit: Third

Case Alert Supervisor: Mark Rahdert

Edited: 02/25/2013 at 09:50 AM by Media Alerts Moderator

    Posted By: Susan DeJarnatt @ 02/22/2013 01:13 PM     3rd Circuit  

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