United States Court of Appeals,
Fifth Circuit.
No. 93-2683.
Jolene NOWLIN, et al., Plaintiffs-Appellants,
v.
RESOLUTION TRUST CORPORATION, et al., Defendants,
Resolution Trust Corporation, Litton Mortgage Servicing Center,
Inc., and Mitchell Jobe & Co., Defendants-Appellees.
Sept. 29, 1994.
Appeal from the United States District Court for the Southern
District of Texas.
Before GOLDBERG, KING and WIENER, Circuit Judges.
GOLDBERG, Circuit Judge:
This case resulted from the termination of employment of nine
former employees at a failed financial institution. These
individuals ("plaintiffs") sued the Resolution Trust Corporation
("RTC"), which was the receiver of the institution, and two of the
RTC's personnel contractors, Litton Mortgage Servicing Center, Inc.
("Litton") and Mitchell Jobe & Company ("Mitchell Jobe") (together,
the "defendants"). The plaintiffs sought relief on several causes
of action. The first was retaliatory discharge in violation of 12
U.S.C. § 1831j (the "Banking Whistleblower Act"). The second and
third were violations of 42 U.S.C. § 2000e-3 ("Title VII"), for
sexual discrimination and retaliatory discharge. Finally, the
plaintiffs claimed a breach of oral contract under Texas common
law. The district court granted summary judgment in favor of the
defendants on all claims, and the plaintiffs appealed to this
1
court. We partially affirm and partially reverse the district
court's grant of summary judgment and remand for further
proceedings.
I. Facts1
Columbia Savings Association, Nassau Bay, was a federally
insured, state-chartered institution. In December 1989, it was
placed in the conservatorship of the RTC. The institution was
succeeded by Columbia Federal Savings Association ("Columbia") when
the Federal Home Bank Loan Board issued it a federal charter. The
change in name did not spell a change in fortune, and in September
1991 the RTC put Columbia into receivership and picked up the
reins.
The RTC contracted with Mitchell Jobe to meet some of
Columbia's staffing needs. Mitchell Jobe hired seventeen former
Columbia employees for the receivership. The plaintiffs in this
case are nine of those individuals. The plaintiffs signed
employment contracts with Mitchell Jobe, which stated that
employment would be "for an unspecified amount of time and for
limited projects of a temporary nature...." The RTC paid Mitchell
Jobe a fee in addition to the amount of the temporary employees'
wages.
The RTC also contracted with Litton to be a Resolution
1
Because the plaintiffs are appealing the district court's
grant of summary judgment to the defendants, we view the evidence
in the record in the light most favorable to the plaintiffs.
See, e.g., Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475
U.S. 574, 587-88, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986);
Trevino v. Celanese Corp., 701 F.2d 397, 406 (5th Cir.1983)
(citing Joplin v. Bias, 631 F.2d 1235, 1237 (5th Cir.1980)).
2
Assistance Contractor (RAC). Litton's task was twofold. First,
Litton was to wind down Columbia's affairs by returning assets to
Columbia's former customers and extinguishing Columbia's
liabilities. Second, and most important in this case, Litton was
to supervise the day-to-day activities which engaged the employees
at Columbia. Litton installed a three-member management team to
accomplish these goals. The RTC compensated Litton according to
number of hours the Litton team worked.
In September, Columbia's employees were gathered and told
about the Columbia's transformation into a receivership.
Representatives of the RTC and Litton encouraged the plaintiffs to
accept positions with the receivership. No one disputes that the
plaintiffs entered "at will" employment contracts with Mitchell
Jobe. However, the plaintiffs claim they also entered oral
contracts with the RTC and Litton guaranteeing them four months of
employment plus two weeks severance pay. During the September
gathering, Tom Emerson, the manager of the Litton team, represented
to the plaintiffs that their employment would be for at least four
months, that they would receive two weeks severance pay, and that
if they refused the job, he would challenge their applications for
unemployment benefits. The RTC and Litton dispute plaintiffs'
claim that an oral contract arose and insist that the plaintiffs'
only contracts were those with Mitchell Jobe.
The plaintiffs and Litton had a difficult relationship from
the start. One of the plaintiffs, Jolene Nowlin, alleged that
Emerson began a campaign of sexual harassment soon after Litton was
3
installed at the receivership. In addition, Emerson orchestrated
a scheme to increase Litton's fees. Emerson instructed the
plaintiffs to inflate their time sheets by adding three to three
and a half hours to the amount of time they actually worked. He
stated that he would verify the falsified time sheets. The
plaintiffs complied at first, but then reported the time sheet
fraud and sexual harassment to the RTC. The plaintiffs also
claimed that the Litton team was unable to perform their management
functions effectively due to ignorance and incompetence.
After an investigation by members of the RTC and Litton, the
entire Litton team was replaced with one headed by Carolyn
McDonald. However, this did not ease the friction in the
receivership's operation. Specifically, there were confrontations
regarding the plaintiffs' responsibilities. In addition, the
plaintiffs complained to the RTC that the new team was also
ineffective. Nowlin complained about the Litton team to an RTC
official, Robert Van Buren. Van Buren later met with Litton and
Mitchell Jobe representatives, and asked Mitchell Jobe to discharge
Nowlin. Linda Wood, the Mitchell Jobe personnel manager, refused,
stating that Mitchell Jobe preferred to build a documented file
upon which to base Nowlin's termination.
RTC officials met on Friday October 18, 1991 and decided to
accelerate Columbia's "final resolution" date and merge Columbia's
assets and liabilities with another failed institution. Litton's
and the plaintiffs' employment would be terminated, and Columbia
would be closed. Later that afternoon, representatives from the
4
RTC and Litton went to Columbia, gathered the employees, and told
them to pack their belongings and to never return. The plaintiffs,
in turn, filed this lawsuit.
II. Standard of Review for Summary Judgment
Summary judgment is proper under Rule 56 of the Federal Rules
of Civil Procedure if there is "no genuine issue as to any material
fact and ... the moving party is entitled to judgment as a matter
of law." Anderson v. Liberty Lobby Inc., 477 U.S. 242, 257, 106
S.Ct. 2505, 2514, 91 L.Ed.2d 202 (1986). "[T]he plaintiff must
present affirmative evidence in order to defeat a properly
supported motion for summary judgment." Id. This requires that a
plaintiff "make a showing sufficient to establish the existence of
an[y] element essential to that party's case, and on which that
party will bear the burden of proof at trial." Celotex v. Catrett,
477 U.S. 317, 322-23, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986).
The standard for reviewing a summary judgment on appeal is the same
as that applied by the district court. Reid v. State Farm Mut.
Auto Ins. Co., 784 F.2d 577, 578 (5th Cir.1986); see also
Bodenheimer v. PPG Industries, Inc., 5 F.3d 955, 956 (5th Cir.1993)
(reviewing grant of summary judgment in an employment
discrimination case). We review a grant of summary judgment de
novo. Norman v. Apache Corp., 19 F.3d 1017 (5th Cir.1994).
While the record reveals a complex pattern of criss-crossing
motions, we concern ourselves only with the last few. Mitchell
Jobe filed a motion to dismiss the plaintiffs' second amended
complaint for failure to state a claim upon which relief can be
5
granted. Litton filed no similar motion. The district court, sua
sponte, treated Mitchell Jobe's motion as one for summary judgment.
The court issued a two-page opinion and order granting partial
final judgment in favor of Mitchell Jobe and Litton. The district
court stated that the RTC alone was the plaintiff's "employer
in-fact," and that the plaintiffs would therefore take nothing from
Mitchell Jobe or Litton.2
Shortly after the district court entered this order, the RTC
moved for summary judgment. The plaintiffs resisted, filing their
own motion for summary judgment against the RTC and Litton.3 The
district court held a hearing on these motions. At the end of the
hearing, the district court granted summary judgment in favor of
the RTC on all claims except the Texas common law oral contract
claim. He later ruled in favor of the RTC and Litton on that
issue, too. We will review the grant of summary judgment on each
issue in turn.
III. The Banking Whistleblower Statute, 12 U.S.C. § 1831j
In examining the plaintiffs whistleblowing claim, we must
examine the patchwork of legislation woven by Congress to protect
our nation's banking system. The plaintiffs have asked us to apply
12 U.S.C. § 1831j, a statute which focuses on the Federal Deposit
2
We assume the district court meant that the RTC was the
plaintiffs' employer at law, as the parties never disputed that
Mitchell Jobe was the employer in fact in this case. Mitchell
Jobe had written employment "at will" contracts with the
plaintiffs, paid the plaintiffs, and furnished the plaintiffs to
the RTC and Litton.
3
The plaintiffs moved for summary judgment against Litton on
oral contract grounds.
6
Insurance Corporation ("FDIC"), to the RTC and its contractors.
Section 1831j has been amended twice since October 1991,4 when the
alleged misconduct occurred.
The plaintiffs claim to be the victims of retaliatory
discharge in violation of § 1831j.5 The applicable version of §
1831j prohibits two types of actors from retaliating against
whistleblowers. The first type consists of "insured depository
institutions," defined as "any bank or savings association the
deposits of which are insured by the [Federal Deposit Insurance]
Corporation...." 12 U.S.C. § 1813(c)(2). The second type consists
of "Federal banking agenc[ies], Federal home loan bank[s], and the
Federal Reserve Bank[s]." Pub.L. No. 102-242, § 251, 105 Stat.
4
The section was amended by the FDIC Improvement Act of
1991, Pub.L. No. 102-242, § 251, 105 Stat. 2331, 2332 (1991), and
by Pub.L. No. 103-204, § 21(a), 107 Stat. 2406 (1993).
5
The 1991 version of this section, which Congress made
retroactive, covers the time period of the relevant conduct. See
Pub.L. No. 102-242, § 251(a)(4) (1991) ("Paragraph (2) of section
33(a) of the Federal Deposit Insurance Act [12 U.S.C. §
1831j(a)(2) ] (as added under the amendment made by paragraph
(1)) shall be treated as having taken effect on January 1, 1987,
and for purposes of any cause of action arising under such
paragraph (as so effective) before the date of the enactment of
this Act [December 19, 1991], the 2-year period referred to in
section 33(b) of such Act [12 U.S.C. § 1831j(b) ] shall be deemed
to begin on such date of enactment."). The 1991 version changed
the original statutory language in only minor ways which are
irrelevant to the case at hand.
The third version of the statute has a broader scope
than the first two. That version, passed in 1993, nearly
two years after the whistleblowing conduct in this case,
expanded the reach of § 1831j to include "any person who is
performing, directly or indirectly, any function or service
on behalf of the [Federal Deposit Insurance] Corporation."
Pub.L. No. 103-204, § 21(a), 107 Stat. 2406 (1993).
Congress did not state that this section was retroactive.
7
2331, 2332 (1991). "Federal banking agencies" are defined as "the
[Federal Deposit Insurance] Corporation, the Board of Governors of
the Federal Reserve System, the Federal Housing Finance Board, the
Comptroller of the Currency, and the Director of the Office of
Thrift Supervision." Pub.L. No. 102-242, § 251(a).
Courts applying § 1831j have held that it only applies to the
actors named in the statute. See Hicks v. Resolution Trust
Corporation, 970 F.2d 378 (7th Cir.1992); Homeyer v. Yorkville
Federal Savings & Loan Association, 1991 WL 274226 (S.D.N.Y.1991);
cf., Walleri v. Federal Home Loan Bank, 1993 WL 566023 (D.Or.1993)
(dismissing claim of retaliatory discharge under § 1831j because
plaintiff reported alleged wrongdoings to institutions not listed
in statute). We find the applicable statutory language to be plain
on its face. It does not name the RTC, and the plaintiffs concede
that Mitchell Jobe and Litton do not fall within either of the two
categories of covered actors. Therefore, § 1831j does not apply in
this case, because none of the defendants are named in the
statutory coverage.6 We affirm the district court's grant of
summary judgment in favor of defendants on the § 1831j claim.
IV. Title VII
The next claim envisages Title VII's provisions.
6
The subsequent actions of Congress reinforce our
interpretation of the scope of § 1831j. In 1992, while this
litigation was underway, Congress passed a whistleblowing statute
specifically addressing the RTC and its contractors. See 12
U.S.C. § 1441a(q). The plaintiffs did not plead for relief under
this provision. Congress apparently did not think § 1831j
applied to the RTC, otherwise they would not have passed §
1441a(q). Section 1441a(q) does not apply to this case, because
it was passed after the alleged impermissible conduct occurred.
8
Specifically, the plaintiffs argue that the district court wrongly
concluded that Mitchell Jobe and Litton were not the plaintiffs'
"employers" for Title VII purposes. In addition, the plaintiffs
argue the district court wrongly granted summary judgment to the
RTC on the Title VII issues.
First we address Mitchell Jobe's argument that summary
judgment should be affirmed because Mitchell Jobe was not properly
a party on the Title VII issue.7 Mitchell Jobe summarized its
argument for affirming summary judgment in its brief, stating
"[p]laintiffs did not file charges with the EEOC [the Equal
Employment Opportunity Commission] and, therefore, they have no
standing to assert Title VII claims against Mitchell Jobe in
federal court." Title VII requires charges to be filed with the
EEOC against those who committed the allegedly unlawful conduct.
42 U.S.C. § 2000e-5(e). The plaintiffs admitted that they never
filed such charges against Mitchell Jobe before the EEOC. Instead,
the plaintiffs argue that their failure to file charges naming
Mitchell Jobe is not lethal to their Title VII claims,8 and does
not necessarily prevent them from pursuing Mitchell Jobe in federal
court. See Zipes v. Trans World Airlines, 455 U.S. 385, 393, 102
S.Ct. 1127, 1132, 71 L.Ed.2d 234 (1982) (holding that "filing a
7
We have the authority to do this. Degan v. Ford Motor Co.,
869 F.2d 889, 892 (5th Cir.1989) ("Summary judgment may be
affirmed, regardless of the correctness of the district court
ruling, when we find in the record an adequate, independent basis
for that result.").
8
Debra Boles, one of the plaintiffs, conceded she did not
file a complaint against any of the defendants with the EEOC, and
that therefore she cannot recover on Title VII grounds.
9
timely charge of discrimination with the EEOC was not a
jurisdictional prerequisite to suit in federal court, but a
requirement that, like a statute of limitations, is subject to
waiver, estoppel, and equitable tolling.") (footnote omitted).
Plaintiffs claim they should be excused from the filing
requirement because the EEOC misled them about the nature of their
rights. See Blumberg v. HCA Management Co., 848 F.2d 642, 644 (5th
Cir.1988), cert. denied, 488 U.S. 1007, 109 S.Ct. 789, 102 L.Ed.2d
781 (1989) (stating that one justification for tolling the period
for filing charges with the EEOC would be if the EEOC misled the
plaintiff). Blumberg also stated that the plaintiff bears the
burden of demonstrating a factual basis to toll the period for
filing charges. Id. The only references found in the record to
anything misleading involve a statement by plaintiffs' counsel that
"[t]he EEOC concluded that it would not accept complaints against
Mitchell-Jobe because it was only a payroll service." This unsworn
statement is found in a document filed with the district court
entitled "Status Report with Respect to EEOC Complaints."
The district court failed to give ten days notice of its sua
sponte motion to grant summary judgment9, as required by Federal
9
District courts may grant summary judgment sua sponte, "so
long as the losing party was on notice that she had to come
forward with all of her evidence." Celotex, 477 U.S. at 326, 106
S.Ct. at 2554; Judwin Properties, Inc., v. United States Fire
Ins. Co., 973 F.2d 432, 436-37 (5th Cir.1992); see also Wright,
Miller and Kane, Federal Practice and Procedure § 2720 (1994
Pocket Part).
10
Rule of Civil Procedure 56(c).10 This court has strictly enforced
this notice requirement. Leatherman v. Tarrant County Narcotics
Intelligence & Coordination Unit, 28 F.3d 1388 (5th Cir.1994)11;
Judwin Properties Inc., 973 F.2d at 437 (5th Cir.1992); Powell v.
U.S., 849 F.2d 1576, 1579 (5th Cir.1988) (stating that notice is
critical "to insure that the nonmoving party had the opportunity to
make every possible factual and legal argument.") (citing cases).
Despite this strictness, however, this circuit has held that the
10
The district court issued its opinion after Mitchell Jobe
submitted a motion to dismiss the plaintiffs' second amended
complaint for failure to state a claim upon which relief can be
granted under Federal Rule of Civil Procedure 12(b)(6). That
rule states that "[i]f, on a motion asserting the defense
numbered (6) to dismiss for failure of the pleading to state a
claim upon which relief can be granted, matters outside the
pleading are presented to and not excluded by the court, the
motion shall be treated as one for summary judgment and disposed
of as provided in Rule 56, and all parties shall be given
reasonable opportunity to present all material made pertinent to
such a motion by Rule 56." (emphasis supplied). The comment to
Rule 12(b)(6) specifically states that the rule "insures that
both parties shall be given a reasonable opportunity to submit
affidavits and extraneous proofs to avoid taking a party by
surprise through the conversion of the motion into a motion for
summary judgment." Cf., Washington v. Allstate Insurance Co.,
901 F.2d 1281, 1284 (5th Cir.1990).
11
The Leatherman litigation has a long history. The
district court originally dismissed the action on the grounds
that the plaintiffs failed to satisfy the "heightened pleading
requirement" imposed by our circuit on claims arising under 42
U.S.C. § 1983. In the alternative, the district court granted
summary judgment against the plaintiffs. See 755 F.Supp. 726
(N.D.Tex.1991). This court affirmed the dismissal on the
heightened pleading requirement grounds. 954 F.2d 1054 (5th
Cir.1992). The Supreme Court reversed and remanded. --- U.S. --
--, 113 S.Ct. 1160, 122 L.Ed.2d 517 (1993). Justice Rehnquist,
writing for a unanimous court, invalidated the heightened
pleading requirement in regard to § 1983 actions against
municipalities. Id. at ----, 113 S.Ct. at 1163. On remand, the
district court adopted its alternate holding and granted summary
judgment against the plaintiffs. The plaintiffs appealed again,
and we affirmed. 28 F.3d 1388 (5th Cir.1994).
11
harmless error doctrine applies to a failure to provide notice
under Rule 56(c). Leatherman, 28 F.3d at 1398; Powell, 849 F.2d
at 1580 (citing Western Fire Insurance Co. v. Copeland, 786 F.2d
649 (5th Cir.1986)). The Leatherman court noted that the harmless
error doctrine has recently been expanded.
"When there is no notice to the nonmovant, summary judgment
will be considered harmless if the nonmovant has not
additional evidence or if all of the nonmovant's additional
evidence is reviewed by the appellate court and none of the
evidence presents a genuine issue of material fact."
Leatherman, 28 F.3d at 1398 (quoting Resolution Trust Corp. v.
Sharif-Munir-Davidson Dev. Corp., 992 F.2d 1398, 1403 n. 7 (citing
Powell )).
In our recent cases, we have held that "[d]espite the
strictness with which we enforce the notice requirement, the
harmless error doctrine applies to lack of notice required by Rule
56(c)." Leatherman, 28 F.3d at 1398; Sharif-Munir-Davidson Dev.
Corp., 992 F.2d at 1403 (stating that the district court abused its
discretion by granting summary judgment without sufficient notice,
but affirming outcome because the lack of notice was harmless
error). We have held that the party seeking to avoid summary
judgment must present specific evidence that creates a genuine
issue of material fact, or at least identify how additional
discovery would yield such an issue. Leatherman, 28 F.3d at 1399;
Sharif-Munir-Davidson Dev. Corp., 992 F.2d at 1403. This evidence
must have some present, existential character. "Rule 56(e) ...
requires the nonmoving party to go beyond the pleadings and by her
own affidavits, or by the "depositions, answers to interrogatories,
12
and admissions on file,' designate "specific facts showing that
there is a genuine issue for trial.' " Celotex Corp., 477 U.S. at
324, 106 S.Ct. at 2553; see also Rivanna Trawlers Unlimited v.
Thompson Trawlers Inc., 840 F.2d 236, 240 (4th Cir.1988) (noting
that a party opposing summary judgment "may not rest upon mere
allegations or denials of his pleading"); Lake Nacimiento Ranch
Co. v. County of San Luis Obispo, 841 F.2d 872, 876 (9th Cir.1987),
cert. denied, 488 U.S. 827, 109 S.Ct. 79, 102 L.Ed.2d 55 (1988)
(noting that the district court properly required nonmovant to make
"sufficient showings" supporting essential elements of its case);
Presbyterian Church v. United States, 752 F.Supp. 1505
(D.Ariz.1990) ("Legal memoranda and oral argument do not constitute
evidence within the meaning of Rule 56(e), and cannot, by
themselves, create a factual dispute sufficient to defeat a summary
judgment motion where no other dispute exists.") (citations
omitted). If the nonmovant fails to make such a showing, and the
motion is otherwise appropriate, then the lack of notice will be
considered harmless error, and summary judgment will be affirmed.
See Leatherman, 28 F.3d at 1398-99; Sharif-Munir-Davidson Dev.
Corp., 992 F.2d at 1403.
In this case, the plaintiffs failed to produce one shred of
hard evidence to support their argument that it was not necessary
to charge Mitchell Jobe before the EEOC. In addition, the
plaintiffs failed to state what the evidence they wanted to present
was or why they needed more time. Instead, the plaintiffs rely on
one unsworn statement made by their attorney in a pleading. The
13
notice requirement of Rule 56(c) is not a license for a fishing
expedition for evidence, and conjecture and conversation with the
court are not a sufficient specific showing of solid evidence to
shield one from summary judgment. See Mitnik v. Cannon, 789
F.Supp. 175, 176 (E.D.Pa.1992) (holding that unsworn statements and
allegations "are not sufficient ... to raise a genuine issue of
material fact" under Rule 56). Therefore, we affirm summary
judgment in favor of Mitchell Jobe on the Title VII issues.
We now turn to the basic issue of determining the plaintiffs'
employment status under Title VII. The district court stated that
the RTC was the plaintiffs' "employer in-fact" in its order
granting partial final judgment on the Title VII issues, holding
that Mitchell Jobe and Litton were not the plaintiffs' employers.12
The judge based this conclusion on the borrowed servant doctrine,
citing two cases, Denton v. Yazoo & M.V.R. Co., 284 U.S. 305, 52
S.Ct. 141, 76 L.Ed. 310 (1932) and Perron v. Bell Maintenance &
Fabricators, 970 F.2d 1409, 1412 (5th Cir.1992), cert. denied, ---
U.S. ----, 113 S.Ct. 1264, 122 L.Ed.2d 660 (1993). Both of those
cases involved employee injuries, not discriminatory hiring and
firing.
The borrowed servant doctrine is not applied in Title VII
actions to determine employer status. The Fifth Circuit announced
12
The district court repeated the conclusion that the RTC
was the employer "for equal employment opportunity purposes" from
the bench during the hearing on the cross motions for summary
judgment filed by the RTC and the plaintiffs, stating "[Mitchell]
Jobe and Litton are out of [the case]. They were flunkies for
the RTC...." See supra n. 2.
14
the standard it would use in potential multiple employer situations
to determine employer status in Mares v. Marsh, 777 F.2d 1066, 1067
(5th Cir.1985) (adopting the hybrid test defined in Spirides v.
Reinhardt, 613 F.2d 826 (D.C.Cir.1979)).13 In Mares, the court
examined three possible tests, labeled "agency," "economic
realities," and "hybrid." The agency test turns on the employer's
right to control the employee. Id. The economic realities test
turns on whether the employee, as a matter of economic reality, is
dependent upon the business to which he renders service. Id. The
hybrid test steers a middle ground, focussing on "the extent of the
employer's right to control the "means and manner' of the worker's
performance." Id. (quoting Spirides, 613 F.2d at 831).
The articulation, elaboration, and application of the hybrid
test was first accomplished by the Spirides court, which suggested
a laundry list of factors for courts to consider when utilizing the
hybrid test. The court warned that "[c]onsideration of all the
circumstances of the work relationship is essential, and no one
factor is determinative." Id. at 831 (footnote omitted). See also
Deal v. State Farm County Mut. Ins. Co. of Texas, 5 F.3d 117, 118-
19 (5th Cir.1993) (applying hybrid test to determine whether
insurance company was insurance agent's employer under Title VII
and ADEA); Fields v. Hallsville Indep. Sch. Dist., 906 F.2d 1017,
13
We note that as a preliminary issue, the defendant must
fall within the statutory definition of "employer" in Title VII.
See 42 U.S.C. § 2000e(b). Neither Mitchell Jobe nor Litton
allege anywhere that they do not fall within this statutory
definition of employer. For purposes of this appeal, we assume
that they do fall within this definition.
15
1019-20 (5th Cir.1990), cert. denied, 498 U.S. 1026, 111 S.Ct. 676,
112 L.Ed.2d 668 (1991) (applying hybrid test to determine whether
Texas was teachers' employer under Title VII). The Mares court
accepted the Spirides factors, but noted that the right to control
is an especially crucial factor. Mares, 777 F.2d at 1067-68.
The district court wove its decision to grant partial final
judgment to Mitchell Jobe and Litton on the Title VII issues with
fragile thread. The court stated that because the RTC exercised
"operating control over all the employees of the bank," the RTC was
the plaintiff's employer. The court stated that "the nominal
employers14 had neither control over the plaintiffs nor any role in
the actions taken against them," and granted final judgment to
Mitchell Jobe and Litton.
The borrowed servant doctrine and the agency test are cut from
the same cloth.15 The Supreme Court case the district court cited
for support explained the borrowed servant doctrine in a suit
involving a railroad employee who was injured while loading mail
under the direction of the post office. The Court's analysis under
14
It is interesting that the district court referred to the
"nominal employers," plural, apparently meaning Mitchell Jobe and
Litton. The record does not reveal any written contract or
agreement between Litton and the plaintiffs for employment. This
may be relevant in addressing the oral contract issue discussed
below.
15
We repeat that the borrowed servant test uses criteria
similar to the agency test expressly rejected by the Mares court.
777 F.2d at 1067 n. 1 ("The strict common law "agency' test
generally has not been applied to federal social welfare and
antidiscrimination legislation, since it is considered
inconsistent with the remedial purposes behind such
legislation.") (citing cases).
16
the borrowed servant doctrine turned on who controlled and directed
the employee's work.16
In light of Mares and its progeny, we find that the district
court committed an error of law when clothing its decision in the
ill-fitting borrowed servant doctrine rather than the well-tailored
hybrid test to determine whether the defendants were the
plaintiffs' employer under Title VII. The "right to control" is a
common and important thread running through the borrowed servant
doctrine, agency test, and hybrid test. However, the hybrid test
is fabricated with additional threads to yield a different pattern.
Broussard v. L.H. Bossier, Inc., 789 F.2d 1158, 1160 (5th Cir.1986)
(repeating the Spirides laundry list of factors in addition to the
right to control in a single employer Title VII case). The grant
of summary judgment regarding Title VII unravels because the court
below applied the wrong legal standard to determine employee
status. On remand, the hybrid test, as enunciated in Spirides and
adopted and applied in Mares, is an appropriate starting point for
determining whether Litton is an employer under Title VII.17
16
"Whether the railroad company may be held liable for [the
employee's] act depends not upon the fact that he was their
servant generally, but upon whether the work which he was doing
at the time was their work or that of another; a question
determined, usually at least, by ascertaining under whose
authority and command the work was being done. When one person
puts his servant at the disposal and under the control of another
for the performance of a particular service for the latter, the
servant in respect to his acts in that service, is to be dealt
with as the servant of the latter and not the former." Denton v.
Yazoo & M. V. R. Co., 284 U.S. 305, 308, 52 S.Ct. 141, 141, 76
L.Ed. 310 (1932).
17
The factors listed in Spirides, in addition to the right
to control are:
17
The district court did not specifically address the
conflicting interpretations of the evidence in the record
concerning Litton's possible status as an employer under Title VII
in its opinion granting partial final judgment to Litton. There is
evidence in the record concerning Litton's relationship to the
plaintiffs. Without commenting on the strength or persuasiveness
of this evidence, we find that there may be a genuine issue of
material fact regarding Litton's employer status. On remand to the
district court, the record should be carefully examined and
evaluated in applying the hybrid test in determining whether Litton
is an employer for Title VII purposes.
The individual defendants argue that even if they were
considered the plaintiffs' employer under Title VII, they would be
entitled to summary judgment on the retaliatory discharge issue.
They claim that the plaintiffs failed to carry their legal burden,
as described by the cases applying Title VII. See Whatley v.
"(1) the kind of occupation, with reference to whether
the work usually is done under the direction of a
supervisor or is done by a specialist without
supervision; (2) the skill required in the particular
occupation; (3) whether the "employer' or the
individual in question furnishes the equipment used and
the place of work; (4) the length of time during which
the individual has worked; (5) the method of payment,
whether by time or by the job; (6) the manner in which
the work relationship is terminated; i.e., by one or
both parties, with or without notice and explanation;
(7) whether annual leave is afforded; (8) whether the
work is an integral part of the business of the
"employer'; (9) whether the worker accumulates
retirement benefits; (10) whether the "employer' pays
social security taxes; and (11) the intention of the
parties."
Spirides, 613 F.2d at 832.
18
Metropolitan Atlanta Rapid Transit Auth., 632 F.2d 1325 (5th
Cir.1980); McKenna v. Weinberger, 729 F.2d 783 (D.C.Cir.1984).
Plaintiffs contend they were discharged in retaliation for
reporting allegations of sexual harassment by Emerson.
The Supreme Court has recently reexamined the elaborate
tapestry of shifting burdens in Title VII suits in St. Mary's Honor
Ctr. v. Hicks, --- U.S. ----, ---- - ----, 113 S.Ct. 2742, 2747-53,
125 L.Ed.2d 407 (1993). The Court set out to untangle the basic
burden shifting process by identifying three procedural steps. One
proceeds to the next step only after the prior one is made.
First, the plaintiffs must establish a prima facie case of
the alleged wrongdoing by a preponderance of the evidence. Once
the prima facie case is established, there is a presumption of
discrimination. Second, the defendant must articulate some
legitimate, nondiscriminatory reason for discharging the employee.
Once this step is taken, the presumption of discrimination created
by the prima facie case is pierced. In order to patch their
discrimination claim, the plaintiffs must prove that the legitimate
reason articulated by the defendant was false and that the
defendant's real reason for discharging the plaintiff was
discriminatory or otherwise prohibited by Title VII. The
plaintiffs bear the ultimate burden of proving intentional
discrimination at all times. Id. at ---- - ----, 113 S.Ct. at
2747-48; see also Fields v. Hallsville Independent School Dist.,
906 F.2d 1017 (5th Cir.1990); Shirley v. Chrysler First, Inc., 970
F.2d 39, 42 (5th Cir.1992).
19
The plaintiffs' prima facie case for retaliation under Title
VII is woven from three threads. The claimant must demonstrate:
(1) that she engaged in a statutorily protected activity; (2) that
she experienced an adverse employment action following the
protected activity; and (3) that a causal link exists between the
protected activity and the adverse employment action. Shirley, 970
F.2d at 42; Whatley, 632 F.2d at 1328; Jenkins v. Orkin
Exterminating Co., 646 F.Supp. 1274, 1277 (E.D.Tex.1986). In its
motion for summary judgment, the RTC did not dispute that the
plaintiffs had the first two parts of the prima facia case.18
Instead, the RTC claimed that plaintiffs had no evidence of
causation. The RTC concluded that the plaintiffs' prima facia case
fell apart without the causation thread to stitch together their
statutorily protected activities and their termination.
The RTC contends that its decision to accelerate the "final
resolution" of Columbia was the cause of the plaintiffs' employment
termination. It argues that this decision did not offend Title
VII, because it caused the termination of all of the employees at
Columbia, not just the plaintiffs. Further, it claims the decision
was motivated by economic reasons. Therefore, the RTC concludes
that the plaintiffs cannot prove that they were fired in
retaliation for protected conduct.
The courts have sketched an outline of indicia of causation
in Title VII cases, because causation is difficult to prove.
18
Litton did not submit a brief on the issue, because the
district court dismissed the Title VII claims against it earlier.
20
Employers rarely leave concrete evidence of their retaliatory
purposes and motives. For example, in Jenkins, the court looked to
three factors for guidance in determining causation. First, the
court examined the employee's past disciplinary record. Second,
the court investigated whether the employer followed its typical
policy and procedures in terminating the employee. Third, it
examined the temporal relationship between the employee's conduct
and discharge. Jenkins, 646 F.Supp. at 1278. This analysis is
highly fact specific, as the Supreme Court recently noted. St.
Mary's, --- U.S. at ----, 113 S.Ct. at 2756 ("the question facing
triers of fact in discrimination cases is both sensitive and
difficult.") (quoting United States Postal Service Bd. of Governors
v. Aikens, 460 U.S. 711, 716, 103 S.Ct. 1478, 1482, 75 L.Ed.2d 403
(1983)). On remand to the district court, there may be a
conclusion of causation in the discriminatory discharge issue based
on a development and analysis of the facts.
V. Oral Contract
The plaintiffs argued below that they entered an oral
contract with Litton and the RTC for at least four months
employment and two weeks severance pay. The district court, in a
memorandum opinion, concluded that "[t]here is no evidence of any
oral contract, only the assertion by the plaintiffs." The court
granted summary judgment against the plaintiffs on this issue.
The plaintiffs contend that there are two employment contracts
in this case. First, there is the written contract for "at will"
employment between Mitchell Jobe and the plaintiffs. Second,
21
plaintiffs argue that there is an oral contract between the
plaintiffs, Litton, and the RTC. The plaintiffs have produced
evidence, in the form of affidavits and depositions to support
their contentions. The defendants have also produced evidence to
support their argument that the written contract with Mitchell Jobe
is the only employment contract existing in this case.
Determining whether there are two contracts or one contract,
and what the parties intended the terms these contracts to embrace,
is a very fact specific endeavor. Foreca, S.A. v. GRD Dev. Co.,
758 S.W.2d 744, 746 (Tex.1988) (holding that questions concerning
the formation and terms of a particular contract, and the intent of
the parties, were properly considered questions of fact for a jury
to decide); Cothron Aviation, Inc. v. Avco Corp., 843 S.W.2d 260,
264 (Tex.App.—Ft. Worth 1992) (reviewing grant of summary judgment
on question of whether an oral settlement agreement was formed);
cf., McClure v. Duggan, 674 F.Supp. 211 (N.D.Tex.1987). The
plaintiffs and defendants have articulated conflicting summary
judgment evidence. Without commenting on the strength or
credibility of this evidence, we find that the parties have raised
a genuine issue of material fact regarding the possible existence
of an oral contract and the terms of any contracts between the
parties. Therefore, we reverse the district court's grant of
summary judgment and remand this issue to the district court to
allow the fact finder to sort through the evidence and iron out the
inconsistencies.
VI. Conclusion
22
We AFFIRM district court's grant of summary judgment to
defendants on the 12 U.S.C. § 1831j claims. We AFFIRM summary
judgment in favor of Mitchell Jobe on the Title VII claims. We
REVERSE and REMAND the district court's grant of summary judgment
to the RTC and Litton on the Title VII claims. We REVERSE AND
REMAND the district court's grant of summary judgment to the RTC
and Litton on the oral contract claims.
23