Torres-Negron v. Merck & Company

United States Court of Appeals
For the First Circuit

No. 06-1260

KATHLEEN TORRES-NEGRÓN,

Plaintiff, Appellant,

v.

MERCK & COMPANY, INC.; GERARDO GONZÁLEZ;
CONJUGAL PARTNERSHIP GONZÁLEZ-DOE; MÓNICA DÍAZ;
CONJUGAL PARTNERSHIP DOE-DÍAZ; RICARDO SPINOLA;
CONJUGAL PARTNERSHIP SPINOLA-DOE,

Defendants, Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO

[Hon. Salvador E. Casellas, U.S. District Judge]

Before

Torruella, Circuit Judge,
Baldock,* Senior Circuit Judge,
and Howard, Circuit Judge.

Marcelle Martell-Jovet, with whom Yolanda V. Toyos-Olascoaga
and Ramos González & Toyos Olascoaga Law Offices were on brief, for
appellant.
Anabel Rodríguez-Alonso, with whom Mariela Rexach-Rexach and
Schuster & Aguiló LLP, were on brief, for appellee.

May 23, 2007

*
Of the Tenth Circuit, sitting by designation.
 TORRUELLA, Circuit Judge. Plaintiff-appellant Kathleen

Torres-Negrón sued her employer, Merck Sharp & Dhome (I.A.) Corp.

("Merck-PR") and Mónica Díaz, Human Resources Director for Merck-

PR, for discrimination based on sex, national origin, and

disability, and for violation of the Consolidated Omnibus Budget

Reconciliation Act ("COBRA") and various state statutes. Torres

appeals the district court's grant of summary judgment in favor of

Merck-PR and Díaz on all claims. After careful consideration, we

affirm in part, reverse in part, and remand for further proceedings

consistent with this opinion.

I. Factual Background

Torres worked for Merck-PR from March 1, 1989 until she

was terminated on October 19, 2001. She worked as a sales

representative at Merck-PR from 1989 until 1999, at which time she

was transferred to Merck Sharp & Dhome de Mexico S.A. de C.V.

("Merck-Mexico") on a temporary assignment. At all times during

her employment at Merck-Mexico, Torres remained the employee of

Merck-PR, was paid by Merck-PR in U.S. currency,1 and maintained

her U.S. employee benefits as a U.S. employee abroad. Before her

transfer to Merck-Mexico, Torres's work performance was

satisfactory, even exemplary. Both Merck-PR and Merck-Mexico are

subsidiaries of Merck & Company ("Merck & Co.").

1
Merck-Mexico reimbursed Merck-PR for a portion of Torres
Negrón's salary.

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A. Alleged Harassment and Discrimination at Merck-Mexico

Torres alleges that from her first day at work in Mexico,

she endured continuous harassment and discrimination. She claims

that her colleagues at Merck-Mexico made negative and harassing

comments about her gender, her U.S. citizenship, her U.S. salary,

and her Puerto Rican accent. In 2001, Torres was reassigned within

Merck-Mexico to Ricardo Spinola's business unit. Torres claims

that things became worse for her under Spinola's supervision

because of his derogatory comments about her being a Puerto Rican

woman. When Torres complained to Spinola that he was harassing her

and threatened to report him to Merck & Co.'s headquarters in New

Jersey, he allegedly warned her that if she did so, she would "face

the consequences." Torres claims that as a result of this

harassment, she began suffering headaches, hypertension, and

anxiety.

Throughout her tenure in Mexico, Torres had constant

contact with Merck-PR. Three times a year, she participated in

meetings that included representatives from Merck-PR, and in August

2001, Torres spent a week in Merck-PR's offices on a temporary

assignment to assist in relaunching a product. Torres never

complained about her work environment in Merck-Mexico during these

visits.

-3-
B. Employee Misconduct

Merck & Co., Merck-PR's parent company, has a corporate

business ethics policy applicable to all its subsidiaries. The

policy specifically states that "[a]cceptance of a Merck executive

or management position at any level includes acceptance of

responsibility to uphold the Company's policies governing ethical

business practices." It provides that

[c]orporate conduct is inseparable from the
conduct of individual employees in the
performance of their work. Every Merck
employee is responsible for adhering to
business practices that are in accordance with
the letter and the spirit of the applicable
laws and with the ethical principles that
reflect the highest standards of corporate and
individual behavior. Since only such behavior
is consistent with Merck's traditions, and
since such behavior is essential to the
success of its business endeavors, the Company
will not accept anything less. Like integrity
of product, integrity of performance is a
Merck standard whenever we do business, and
ignorance of the standard is never an
acceptable excuse for improper behavior.

In addition, the Business Ethics policy specifically requires that

"[a]ll transactions . . . be accurately reflected in the Company's

books and records to permit their audit and control. Managers at

all levels are responsible for the completeness of the document and

for ensuring that funds are spent for the described purposes." The

policy also counsels that "[e]mployees who may be undecided about

whether contemplated actions are within the limits of legality or

propriety should seek guidance from the Office of Ethics or the

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Legal Department before actions are taken." Merck-PR provided

Torres with a copy of this policy on a yearly basis.

Toward the end of August 2001, the human resources

director for Merck-Mexico, Gerardo Gonzáles, alerted Jimmy

Angueira, Senior Director in Charge of Latin America Human Health

at Merck & Co., that Torres had been misusing company resources by

shipping personal packages using Merck-Mexico's corporate courier

account. In turn, Angueira forwarded Mónica Díaz, Human Resources

Director for Merck-PR, an email from Gonzáles detailing the

problem:

Kathy Torres has been misusing Companies [sic]
resources, making DHL personal shipments with
charge to MSD. As [per] a preliminary report
from Finance, these shipments have been
happening for more than a year, there are more
than [fifteen] shipments totaling $2,100
dollars. Since she is a Product Manager, she
has a grant to use this service for business
related issues, but neither DHL nor MSD hold
evidence that she paid with her own money
these shipments.

Following up on this information, Díaz (Merck-PR) spoke

directly with Gonzáles (Merck-Mexico) regarding Torres's use of the

corporate courier account. On October 5, 2001, Gonzáles met with

Torres to discuss the shipments at issue. Torres admitted that

thirteen out of nineteen shipments she had sent using the corporate

courier account were for personal purposes. On October 8, 2001,

Torres sent Gonzáles an email detailing the personal shipments she

had made and explaining that due to a "personal omission she had

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not given the matter the required follow-up and not made payment

for the same within a reasonable time." Torres subsequently paid

for her use of the courier service to ship personal packages.

Gonzáles (Merck-Mexico) forwarded Torres's email admitting the use

of corporate resources for personal reasons to Díaz (Merck-PR) and

Angueira (Merck & Co.), and advised them of the conversation he had

with Torres.

After receiving this information, Díaz (Merck-PR),

Angueira (Merck & Co.), and César Simich, Managing Director for

Merck-PR, discussed the matter and decided to recommend the

termination of Torres's employment. The recommendation was

approved by Grey Warner, Senior Vice President for Latin America

Human Health at Merck & Co. Gonzáles (Merck-Mexico) informed

Torres of the termination decision in Mexico on October 18, 2001.

Pursuant to Merck & Co. company procedures, Torres's relocation to

Puerto Rico was handled by the Merck & Co. Internal Assignment

Division.

Torres claims that after being terminated, Merck-PR did

not pay her last paycheck, did not issue her W-2 form, did not pay

the state and federal taxes that were withheld from her salary, and

did not properly notify her of her right to continued medical

coverage as required by COBRA.

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 II. Procedural Background

Torres filed suit in the United States District Court for

the District of Puerto Rico on December 24, 2002 against Merck-PR,2

Spinola (Merck-Mexico), Díaz (Merck-PR), and González (Merck-

Mexico) claiming discrimination based on nationality and gender,

and retaliation under Title VII; discrimination under the Americans

with Disabilities Act ("ADA"); violation of the COBRA; and

violation of various state statutes.

On June 13, 2005, the district court dismissed all of

Torres's claims against Spinola and González, and Torres's federal

claims against Díaz. On September 12, 2005, Díaz and Merck-PR

filed a motion for summary judgment as to Torres's remaining claims

against them. On December 12, 2005, the court entered summary

judgment in favor of Díaz and Merck-PR, dismissing all of Torres's

federal claims with prejudice and her local claims without

prejudice.

III. Standard of Review

Summary judgment is appropriate where the record shows

"that there is no genuine issue as to any material fact and that

the moving party is entitled to a judgment as a matter of law."

Fed. R. Civ. P. 56(c). We review a district court's order granting

2
Although Merck & Co. appears as a named party in this appeal,
Torres's complaint was filed against Merck-PR and Merck-PR appears
to be defending this appeal. Nothing in the record explains this
switch in appellees.

-7-
summary judgment de novo, looking at the record in the light most

favorable to the non-moving party and drawing all reasonable

inferences in her favor. See Rodríguez v. Smithkline Beecham, 224

F.3d 1, 5 (1st Cir. 2000). Nevertheless, the non-moving party may

not rest merely upon the allegations or denials in its pleading.

See Santiago-Ramos v. Centennial P.R. Wireless Corp., 217 F.3d 46,

53 (1st Cir. 2000). Instead, the non-moving party "must set forth

specific facts showing that a genuine issue 'of material fact

exists as to each issue upon which she would bear the ultimate

burden of proof at trial.'" See id. (quoting Anderson v. Liberty

Lobby, Inc., 477 U.S. 242, 256 (1986)). The evidence presented by

the non-moving party may not be "conclusory allegations, improbable

inferences, [or] unsupported speculation." Medina-Muñoz v. R.J.

Reynolds Tobacco Co., 896 F.2d 5, 8 (1st Cir. 1990).

IV. Title VII - Hostile Work Environment3

Title VII of the Civil Rights Act of 1964 prohibits an

employer from discriminating "against any individual with respect

to [her] compensation, terms, conditions, or privileges of

employment, because of such individual's race, color, religion,

sex, or national origin." 42 U.S.C. § 2000e-2(a)(1). "When the

workplace is permeated with discriminatory intimidation, ridicule,

and insult that is sufficiently severe or pervasive to alter the

3
Torres also brought a wrongful termination claim under Title
VII, which the district court dismissed on summary judgment.
Torres does not appeal this decision.

-8-
conditions of the victim's employment and create an abusive working

environment, Title VII is violated." Harris v. Forklift Sys.,

Inc., 510 U.S. 17, 21 (1993) (citations and internal quotation

marks omitted). To succeed in a hostile workplace environment

claim, Torres must show: (1) that she is a member of a protected

class; (2) that she was subjected to unwelcome harassment; (3) that

the harassment was based on her membership of the protected class;

(4) that the harassment was so severe or pervasive that it altered

the conditions of her employment and created an abusive work

environment; (5) that the objectionable conduct was objectively and

subjectively offensive, such that a reasonable person would find it

hostile or abusive and the victim in fact did perceive it to be so;

and (6) that some basis for employer liability has been

established. O'Rourke v. City of Providence, 235 F.3d 713, 728

(1st Cir. 2001) (citing Faragher v. City of Boca Ratón, 524 U.S.

775, 787-89 (1998).

On summary judgment, Merck-PR claimed that Torres failed

to satisfy the sixth element of this test4 and the district court

agreed, dismissing the claim on the ground that "employer liability

cannot attach for Plaintiff's claim for hostile work environment."

4
Merck-PR did not argue that dismissal was appropriate based on
the other elements of the hostile work environment test because
"relevant discovery regarding the same [was] still outstanding" at
the time of the motion. The district court decided only the issue
of the sixth element. We therefore examine only the employer
liability question.

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 An employer's liability for a hostile work environment

claim depends on the harasser's employment status relative to the

victim's: Merck-PR is vicariously liable if Torres's supervisor at

Merck-PR created a hostile work environment,5 see Faragher, 524

U.S. at 807; Burlington Indus., Inc. v. Ellerth, 524 U.S. 742, 764-

65 (1998), but if a co-worker created the hostile work environment,

Merck-PR will be held liable only if it was negligent either in

discovering or remedying the harassment, see Crowley v. L.L. Bean,

Inc., 303 F.3d 387, 401 (1st Cir. 2002). Other circuits have

addressed the question of employer liability in the case of

harassment by non-employees, i.e., third parties. Those courts

seem to be in general agreement that such cases should be analyzed

using the same standard that is applied in the case of co-employee

harassment. See, e.g., Lockard v. Pizza Hut, Inc., 162 F.3d 1062,

1074 (10th Cr. 1998); Folkerson v. Circus Circus Enters., Inc., 107

F.3d 754, 756 (9th Cir. 1997).

The district court applied the negligence standard of

employer liability because it found that Torres's alleged harassers

5
An employer's vicarious liability for an actionable hostile work
environment created by a supervisor is subject to an affirmative
defense, which may only be asserted where no tangible employment
action is taken. See Faragher, 524 U.S. at 807; Ellerth, 524 U.S.
at 764-65. Under the Faragher/Ellerth defense, the employer may
avoid responsibility if it shows that it "exercised reasonable care
to prevent and correct promptly" the harassment and that the
employee "unreasonably failed to take advantage of any preventive
or corrective opportunities provided by the employer or to avoid
harm otherwise." Ellerth, 524 U.S. at 765. Merck-PR did not
assert this defense either at summary judgment or on appeal.

-10-
were neither her supervisors nor her co-workers, but rather "third

parties" for purposes of Title VII liability. The district court

noted that Merck-PR and Merck-Mexico were "separate and independent

legal entities" and that neither one controls the day-to-day

operations of the other. The district court further found that

while Torres was at all times employed by Merck-PR, Spinola was at

all times an employee of Merck-Mexico. As such, the district court

considered Spinola a non-employee, thus limiting Merck-PR's

liability to negligence.

Torres's theory of employer liability was that Merck-

Mexico and Merck-PR together constituted a single employer, which

warrants vicarious liability to Merck-PR.6 Under the "single

6
Torres also argued, in the alternative, that Merck-PR is
strictly liable for Merck-Mexico's conduct under a joint-employer
liability theory. However, joint-employer liability does not by
itself implicate vicarious liability. The basis for the finding
that two companies are "joint employers" is that "one employer
while contracting in good faith with an otherwise independent
company, has retained for itself sufficient control of the terms
and conditions of employment of the employees who are employed by
the other employer." Rivas v. Federación de Asociaciones Pecuarias
de P.R., 929 F.2d 814, 820 n.17 (1st Cir. 1991) (quoting NLRB v.
Browning-Ferris Indus., Inc., 691 F.2d 1117, 1122-23 (3d Cir.
1982)). "[T]he 'joint employer' concept recognizes that the
business entities involved are in fact separate but that they share
or co-determine those conditions of employment." Id. (emphasis in
original). Thus, a finding that two companies are an employee's
"joint employers" only affects each employer's liability to the
employee for their own actions, not for each other's actions, as
Torres would have us hold. See Virgo v. Rivera Beach Assoc., Ltd.,
30 F.3d 1350, 1359-63 (3d Cir. 1994) (holding that two companies
were joint employers and therefore liable to the employee, but
using agency principles to determine the extent of one employer's
liability for the other employer's actions).

-11-
employer" doctrine, two nominally separate companies may be so

interrelated that they constitute a single employer subject to

liability under Title VII. See NLRB v. Browning-Ferris Indus.,

Inc., 691 F.2d 1117, 1122 (3d Cir. 1982). The "single employer"

(also "integrated employer") test may apply in cases where

"liability is sought to be imposed on the legal employer by arguing

that another entity is sufficiently related such that its actions

. . . can be attributable to the legal employer." Engelhardt v.

S.P. Richards Co., 472 F.3d 1, 4 n.2 (1st Cir. 2006) (applying the

single employer test to a claim under the FMLA, but citing to its

application in Title VII cases).

But the district court rejected that argument, holding

that

even assuming arguendo that Merck Puerto Rico
and Merck Mexico could both be considered
Plaintiff's employers for purposes of the
Title VII analysis, we have no evidence to
sustain a finding that Merck Puerto Rico had
any control over the actions of Mr. Spinola, a
Merck-Mexico employee. As such, there is no
evidence to sustain a finding that at any time
Mr. Spinola was acting as an agent of Merck
Puerto Rico.

The district court did not address whether Merck-PR and

Merck-Mexico could, in fact, be considered a single employer. On

appeal, Merck-PR avoids this question, arguing that "while Spinola

was a supervisor, he was a supervisor for Merck-Mexico, not Merck-

PR. As such, he could not, and, in fact, did not, bring Merck-PR's

-12-
official power to bear on Torres."7 Torres reiterates her single-

employer liability argument, claiming that the district court erred

in using a negligence standard applicable to the actions of co-

workers and third parties to evaluate Merck-PR's liability for her

Merck-Mexico supervisor's discriminatory and harassing conduct. We

think there is a triable issue of fact on this question.

The flaw in both the district court's and Merck-PR's

analyses is that they ignore the fact that if Merck-Mexico and

Merck-PR are considered to be one and the same company, the agent

7
Merck-PR argues that the single-employer doctrine is irrelevant
in this case because it useful only to determine whether an entity
is an employer under Title VII. First, this is descriptively
inaccurate. See, e.g., Arculeo v. On-Site Sales & Mktg., LLC, 425
F.3d 193, 198 (2d Cir. 2005) ("There is well-established authority
under [the single-employer] theory that, in appropriate
circumstances, an employee, who is technically employed on the
books of one entity, which is deemed to be part of a larger
'single-employer' entity, may impose liability for certain
violations of employment law not only on the nominal employer but
also on another entity comprising part of the single integrated
employer" (emphasis added)); Sandoval v. City of Boulder, 388 F.3d
1312, 1322 (10th Cir. 2004) (applying the single-employer doctrine
"[f]or purposes of finding shared liability" (emphasis added));
Schweitzer v. Advanced Telemarketing Corp., 104 F.3d 761, 763 (5th
Cir. 1997) ("In civil rights actions, 'superficially distinct
entities may be exposed to liability upon a finding they represent
a single, integrated enterprise: a single employer.'" (quoting
Trevino v. Celanese Corp., 701 F.2d 397, 404 (5th Cir. 1983)
(emphasis added)). Second, it is prescriptively unjustified.
Indeed, the very purpose of the doctrine is to extend
responsibility for discrimination beyond technical distinctions to
promote the Title VII goal of eliminating employment
discrimination. See Lusk v. Foxmeyer Health Corp., 129 F.3d 773,
777 n.3 (5th Cir. 1997) (citing Baker v. Stuart Broad. Co., 560
F.2d 389, 391 (8th Cir. 1977)). The absurd result of Merck-PR's
argument is that under such an analysis, Torres's only bar to
invoking the single-employer doctrine would be that she sued her
legal employer, as opposed to its parent company.

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(Spinola) of one (Merck-Mexico) automatically becomes the agent of

the other (Merck-PR) for purposes of Title VII liability. That is,

the question of Spinola's relationship to Merck-PR is answered by

the single employer theory.

The factors considered in determining whether two or more

entities are a single employer under the integrated-enterprise

test8 are: (1) common management; (2) interrelation between

operations; (3) centralized control over labor relations; and (4)

common ownership. Romano v. U-Haul Int'l, 233 F.3d 655, 662 (1st

Cir. 2000). "All four factors, however, are not necessary for

single-employer status." Knowlton v. Teltrust Phones, Inc., 189

F.3d 1177, 1184 (10th Cir. 1999); see also Pearson v. Component

Tech. Corp., 247 F.3d 471, 486 (3d Cir. 2001). Rather, the test

should be applied flexibly, placing special emphasis on the control

of employment decisions. Romano, 233 F.3d at 666 ("We choose to

follow the more 'flexible' approach . . . which focuses on

employment decisions, but only to the extent that the parent exerts

'an amount of participation [that] is sufficient and necessary to

8
This Court has not yet decided what test is appropriate to
determine whether an employer is liable under the single employer
theory, but it has "identified three recognized methods for
determining whether a single employer exists under Title VII: the
integrated-enterprise test, the corporate law 'sham' test, and the
agency test." Romano v. U-Haul Int'l, 233 F.3d 655, 665 (1st Cir.
2000). Torres's argument assumes the application of the integrated
enterprise test and Merck-PR does not argue for a different test.
We will therefore apply this widely recognized approach to address
the single-employer issue in this case on summary judgment.

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the total employment process, even absent total control or ultimate

authority over hiring decisions.'" (quoting Cook v. Arrowsmith

Shelburne, Inc., 69 F.3d 1235, 1241 (2d Cir. 1995)).9

Applying the four-factor single employer test, we find

that there is enough evidence in the record to survive summary

judgment. With respect to the "interrelation between corporations"

factor, there is ample evidence of a reciprocal relationship

between Merck-PR and Merck-Mexico. First, the record shows that

Merck-PR and Merck-Mexico perform substantially the same function.

See Englehardt, 472 F.3d at 6 (finding "little, if any, evidence to

suggest any interrelation between operations of the two companies,"

and noting that the nature of the two businesses was distinct --

one was in the auto-parts retailing business whereas the subsidiary

was in the office-supply wholesaling business). There is also

evidence of frequent interchange of employees between Merck-PR and

Merck-Mexico, centralized Merck & Co. human resources and personnel

policies, as well as a unified system through which all

"expatriated" employees are funneled. See id. (finding no

interrelation where the subsidiary was not a "division" of the

parent company "whereby upper echelons of control are centralized

and efficiencies are realized through consolidation of redundant

administrative, human resource, and management functions").

9
This test is different (and more lenient) than the test we would
apply to pierce the corporate veil. See Pearson, 247 F.3d at 486-
487.

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 With respect to centralized control of labor relations --

the "primary consideration in evaluating employer status," Romano,

233 F.3d at 666 -- there is a significant amount of evidence

weighing in favor of a single-employer finding. As mentioned

above, Merck & Co. established company-wide human resources and

personnel policies applicable to all its subsidiaries. Moreover,

the record shows that Merck-PR, Merck-Mexico, and Merck & Co. all

had substantial control over Torres's employment. See id. at 7

(finding little evidence of centralized control of labor relations

where "[t]here is no evidence to suggest that [one of the

companies] deferred to [the other] in making hiring, firing,

assignment, scheduling, or compensation decisions"). Merck-PR paid

Torres, provided her benefits and retained the power to terminate

her. Meanwhile, Merck-Mexico had virtually exclusive control over

her day-to-day employment and had substantial influence over the

ultimate decision to terminate her.

Torres's termination process itself evinces centralized,

top-down control over employment decisions. The purported reason

for Torres's termination was the violation of a company-wide

professional ethics policy established by Merck & Co., applicable

to all its subsidiaries, including Merck-Mexico and Merck-PR. See

id. (finding "no evidence that [the parent company] required [the

subsidiary] to adopt the same policies and programs," and therefore

no inference that "Defendants centrally determined both companies'

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employment practices"). Moreover, the termination was ultimately

approved by human resources personnel for Merck & Co.'s Latin

American division, on Merck-PR's recommendation after consulting

with Merck-Mexico.

Both Merck-PR and Merck-Mexico are subsidiaries of Merck

& Co. As such, they share common ownership. However, we presently

have no information about the first factor, management of the

companies.

In sum, we think that the evidentiary record leaves a

triable issue of fact as to whether Merck-PR and Merck-Mexico (and

Merck & Co.) are one single employer for purposes of Title VII

liability for a hostile work environment. Thus, we find that for

purposes of summary judgment, Torres has presented sufficient

evidence to establish Merck-PR's potential liability for her

hostile work environment claim.

V. ADA Claim

The district court similarly dismissed Torres's

discrimination claim under the ADA, 42 U.S.C. §§ 12101 et seq., on

the ground that Merck-PR did not know about her medical condition

and therefore could not have had the discriminatory animus required

under the ADA. See Marcano-Rivera v. Pueblo Int'l, Inc., 232 F.3d

245, 251 (1st Cir. 2000) (describing the ADA's requirement that an

employee establish that her employer's adverse employment decision

was motivated by the employee's disability). The district court

-17-
did not address the extent to which Merck-Mexico or Merck-PR knew

about Torres's medical conditions or potentially discriminated

against her because of them. As under Title VII, the single

employer test has been applied to determine liability under the

ADA. See Swallows v. Barnes & Noble Book Stores, Inc., 128 F.3d

990, 993 (6th Cir. 1997) ("Under the 'single employer' or

'integrated enterprise' doctrine, two companies may be considered

so interrelated that they constitute a single employer subject to

liability under the ADEA and/or the ADA."). Thus, for the same

reasons articulated as to the Title VII claim, we reverse the

district court's dismissal of Torres's ADA claims.

VI. Retaliation Under Title VII

To establish a prima facie showing of retaliation, a

plaintiff must prove that (1) she engaged in protected activity;

(2) an adverse employment action occurred; and (3) a causal link

existed between the protected activity and the adverse employment

action. Dressler v. Daniel, 315 F.3d 75, 78 (1st Cir. 2003). An

employee has engaged in an activity protected by Title VII if she

has either opposed any practice made unlawful by Title VII, "or

made a charge, testified, assisted, or participated in any manner

in an investigation, proceeding, or hearing under [Title VII]." 42

U.S.C. § 42 U.S.C. § 2000e-3(a); see also Dressler, 315 F.3d at 78.

It is uncontested that Torres engaged in protected

activity when Torres filed her charge of discrimination with the

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EEOC on November 28, 2001 -– a little over a month after her

termination. Torres claims that the retaliatory "adverse

employment action" consisted of Merck's failure to (1) timely pay

her last paycheck; (2) provide her W-2 forms; (3) timely pay her

state and federal taxes; (4) pay her Christmas bonus; and (5) make

a good faith effort to send her required COBRA notice.

The district court first held that none of Torres's

allegedly retaliatory acts "amount to adverse employment actions

actionable under Title VII" because they "all took place once

Plaintiff was no longer employed at Merck Puerto Rico." While this

appeal was pending, however, the Supreme Court decided Burlington

Northern & Santa Fe Railway Co. v. White, -- U.S. --, 126 S. Ct.

2405 (2006), changing the legal standard to be applied to

retaliation claims under Title VII. While we express no opinion as

to how this issue should be resolved, we think it proper to allow

the district court to first address this issue in light of

Burlington. Accordingly, we remand Torres's Title VII retaliation

claim to the district court to the extent its viability depends on

a finding of adverse employment action.

The district court went on to address alternative grounds

on which to dismiss the specific allegations of retaliation. The

district court held that Merck's failure to pay Torres's Christmas

bonus was not actionable because of a lack of causal connection

between the alleged retaliatory act and Torres's protected

-19-
activity. We agree. Torres filed her discrimination action on

November 28, 2001 but the payment of those bonuses has been

outstanding since December 1999. Without evidence of specific

retaliatory animus motivating the non-payment of the bonuses after

November 29, 2001, there is no reason to believe that Merck-PR

decided not to pay Torres because she filed a claim of

discrimination.

With respect to Merck's failure to pay Torres's withheld

taxes, however, the district court held again that there was a lack

of causal connection between the alleged retaliatory act and her

protected activity because Merck-PR had outsourced this duty to an

accounting firm. We do not think an additional link breaks the

causal chain altogether. The fact that Merck-PR hired Ernst &

Young to do a job does not absolve it from responsibility for

getting the job done; more importantly, it does not strip Merck-PR

from its power to prevent the job from being done.

The district court also dismissed Torres's retaliation

claim based on Merck's failure to provide COBRA notice on the

ground that the claim was preempted by the Employee Retirement

Income Security Program ("ERISA"). ERISA expressly preempts "any

and all State laws insofar as they may now or hereafter relate to

any employee benefit plan described [in the statute]." 29 U.S.C.

§ 1144(a) (emphasis added). The term "State law" is defined by the

statute as including "all laws, decisions, rules, regulations, or

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other State action having the effect of law, of any State." Id.

§ 1144(c)(1); see also Van Camp v. AT&T Info. Sys., 963 F.2d 119,

122 (6th Cir. 1992), overruled on other grounds by Warner v. Ford

Motor Co., 46 F.3d 531 (6th Cir. 1995). Because Torres's

retaliation claim is brought under Title VII, a federal law, her

claim is not preempted by ERISA.

Therefore, we remand to the district court Torres's

retaliation claims based on Merck-PR's failure to pay her last

paycheck, its failure to provide her W-2 forms, its failure to pay

her Puerto Rico and federal taxes, and its failure to comply with

COBRA requirements.10

VII. COBRA Compliance

COBRA requires employers to give employees the

opportunity to continue health care coverage for a specified period

of time after a "qualifying event," at the employee's expense. 29

U.S.C. § 1161(a); see Claudio-Gotay v. Becton Dickinson Caribe,

Ltd., 375 F.3d 99, 103 (1st Cir. 2004). Termination of employment

is considered a qualifying event. 29 U.S.C. § 1163(2). COBRA also

requires employers to notify health care plan administrators of the

termination within 30 days of the qualifying event. Id. § 1166

(a)(2). Thereafter, plan administrators have fourteen days to

10
Apart from the discussion relating to the Christmas bonus and
withheld taxes, the district court did not reach the issue of
causation. We express no opinion as to whether Torres will be able
to provide sufficient evidence on remand to establish the required
causal connection for her retaliation claim.

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notify the qualified beneficiary of her right to continued

coverage. Id. § 1166(c).

Torres claims that Merck-PR did not comply with COBRA's

notice requirements because it used her old address to notify her

of her COBRA rights, despite the alleged fact that she called

Merck-PR at some point after December 11, 2001 to inform the

company of her new Puerto Rico address. Noting that Torres

admitted to having her mail forwarded from her old address to her

new Puerto Rico address, the district court dismissed Torres's

COBRA claim holding that Merck-PR had substantially complied with

COBRA's notification requirements because its notice was reasonably

calculated to reach Torres. We disagree.

COBRA does not state how notice should be given. But

"courts that have addressed the issue have held that 'a good faith

attempt to comply with a reasonable interpretation of the statute

is sufficient.'" Smith v. Rogers Galvanizing Co., 128 F.3d 1380,

1383-84 (10th Cir. 1997) (internal quotation marks omitted); see

also, e.g., Degruise v. Sprint Corp., 279 F.3d 333, 336 (5th Cir.

2002) ("[E]mployers are required to operate in good faith

compliance with a reasonable interpretation of what adequate notice

entails.") (internal quotation marks omitted); Branch v. G. Bernd

Co., 764 F. Supp. 1527, 1534 n.11 (M.D. Ga. 1991) ("[C]ourts have

generally validated methods of notice which are calculated to reach

the beneficiary."), aff'd 955 F.2d 1574 (11th Cir. 1992). Several

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courts have specifically found that employers are in compliance

with § 1166(a) when they send COBRA notices via first class mail to

an employee's last-known address. See Holford v. Exhibit Design

Consultants, 218 F. Supp. 2d 901, 906 (W.D. Mich. 2002);

Torres-Negrón v. Ramallo Bros. Printing, Inc., 203 F. Supp. 2d 120,

124-25 (D.P.R. 2002).

Merck-PR (through the third-party health care plan

administrator) sent Torres a notice of her rights under COBRA on

January 2, 2001 via certified mail to the address Torres had given

when she worked at Merck-Mexico. Torres alleges that she informed

Merck-PR of her new address in Puerto Rico in a telephone call made

to the company mid-December 2001. Looking at the evidence in the

light most favorable to Torres, we cannot say as a matter of law --

the standard we apply on summary judgment -- that Merck-PR made a

good faith effort to comply with COBRA because there is a dispute

as to the facts regarding whether Merck-PR knowingly sent the

notice to the wrong address.

VIII. Conclusion

We affirm the district court's dismissal of Torres's

retaliation claim based on Merck-PR's failure to pay her Christmas

bonus. We reverse the district court's order with respect to

Torres's Title VII hostile work environment claim, her ADA claim,

and her retaliation claim insofar as it is based on Merck-PR's

failure to pay her last paycheck, its failure to provide her W-2

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forms, its failure to pay her Puerto Rico and federal taxes, and

its failure to comply with COBRA requirements, and remand for

further proceedings. In light of this conclusion, the district

court should also reconsider the dismissal of Torres's supplemental

claims. Each party shall bear its own costs on appeal.

Affirmed in part, reversed in part and remanded.

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