F I L E D
United States Court of Appeals
Tenth Circuit
PU BL ISH
March 19, 2007
UNITED STATES CO URT O F APPEALS Elisabeth A. Shumaker
Clerk of Court
TENTH CIRCUIT
KAREN A. JEN CK S,
Plaintiff - Appellant,
v. No. 05-5130
M O D ERN WO O D M EN O F
AM ERICA, an Insurer,
Defendant - Appellee.
Appeal from the United States District Court
for the D istrict of Northern District of Oklahom a
(D .C . N o. C V-481-TC K)
Steven R. Hickman of Frasier, Frasier & Hickman LLP, Tulsa, Oklahoma, for
Plaintiff - Appellant
Shelly L. Dalrymple of Eldridge, Cooper, Steichen & Leach PLLC (Kathy R. Neal
with her on the briefs), Tulsa, Oklahoma, for Defendant - Appellee.
Before LUCERO , EBEL and O’BRIEN, Circuit Judges.
O ’Brien, Circuit Judge.
Seven years after Karen Jencks won a Title VII claim against her employer,
M odern W oodmen of America (M W A), she again brought suit against M W A. Her
second law suit alleges she was denied an opportunity with the company in
retaliation for her earlier victory. The district court granted summary judgment in
favor of M W A. Jencks appealed. W e affirm.
Background
M W A, an insurance company, employed Jencks in 1990 as a district
manager. 1 In 1994, she was terminated from that position and offered a contract
as a district representative, a sales agent position. She accepted the demotion.
Due to on-going problems with her production, she was terminated from the
district representative position but was offered a district agent contract. This, she
did not accept. She filed a claim with the EEOC, alleging discriminatory
demotion (from district manager to district representative) and discharge (from
the district representative position). She then sued M W A, adding claims of
sexual harassment, retaliation and racial discrimination. The court granted
summary judgment as to all claims relative to Jencks’ termination because the
district representative position was that of an independent contractor, not an
employee. The claim of sexual discrimination in the demotion from district
manager to district representative proceeded to trial. Jencks prevailed and the
court ordered her reinstated to the district manager position. Jencks and M W A
1
As district manager, Jencks w as an employee of M W A. However, all
other positions involved in this case are independent contractor positions. The
parties are careful to distinguish these positions. M W A in particular is very
precise in referring to Jencks’ relationship with it - both in the past and in this
case - as an “affiliation” and not employment.
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then entered into a M utual, General, and Complete Release (the “Settlement
Agreement”) in which, among other things, Jencks waived any entitlement to re-
em ploym ent or reinstatement w ith M W A.
In December 2002, Jencks began receiving letters from M W A, soliciting
her to apply for a sales agent position. M W A contends these w ere simply form
letters sent to all licensed insurance agents in the area. In M ay 2003, Jencks went
to M W A’s local office and met with Grady Hurst, M W A’s State manager and her
former supervisor, to apply for the sales agent position. Hurst told her because of
the Settlement Agreement and her “history” with the company, any decision
regarding her application would be made by the corporate office. Several days
later, Jencks received a letter from Deborah Smiley, the manager of the Agency
Contract D epartment, stating Jencks would not be offered a sales agent contract.
The rejection letter cited insufficient sales numbers during her previous
employment with M W A and the terms of the Settlement Agreement.
Jencks filed complaints with the Oklahoma H uman Rights Commission
(OHRC) and the EEOC, alleging she was not offered a contract in retaliation for
filing the previous lawsuit. Both agencies ruled Jencks lacked standing to file a
complaint; the OHRC explained the lack of standing was because the position she
applied for w as as an independent contractor, to which Title VII did not apply.
On June 15, 2004, Jencks filed a complaint in district court, alleging illegal
retaliatory conduct by M W A. M W A filed a motion to dismiss, asserting the court
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lacked subject matter jurisdiction because the sales agent position was an
independent contractor position to which the protections of Title VII did not
apply. In response, Jencks argued the previous lawsuit determined she was
demoted from an employee position and as a former employee, she had standing
to bring a retaliation claim. In reply, M W A filed the Settlement Agreement.
On M arch 16, 2005, the district court informed the parties M W A’s motion
to dismiss would be converted to a motion for summary judgment. It ordered
Jencks to respond and granted M W A leave to reply. 2 Jencks responded,
reiterating her contention that as a former employee she had standing under Title
VII, the Settlement Agreement did not negate her claim, and she had made a
prima facie case of retaliation. Attached to her response was her statement signed
“under penalty of perjury” and copies of the solicitation letters. (A plt’s App.,
Vol. I at 86.) In reply, M W A argued Jencks had not set forth a prima facie case
of retaliation, and reiterated its position that the Settlement Agreement was a
legitimate, non-discriminatory reason supporting its refusal to re-affiliate w ith
Jencks. M W A also contended the solicitation letters were sent to Jencks as part
of a bulk mail solicitation, attaching Smiley’s affidavit in support.
2
“W hen subject matter jurisdiction is dependent upon the same statute
which provides the substantive claim in the case, the jurisdictional claim and the
merits are considered to be intertwined,” and when both parties submit evidence
beyond the pleadings, a motion to dismiss is properly characterized as one for
summary judgment. Trainor v. Apollo M etal Specialities, Inc., 318 F.3d 976, 978
(10th Cir. 2002).
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On July 7, the district court granted summary judgment for M W A
concluding Jencks “cannot establish the necessary inference of discriminatory
motive which is essential to [her] prima facie case.” (R. Vol. I at 116.) In the
alternative, the court concluded: “Even if [Jencks] could show a prima facie case
of discrimination, the Settlement Agreement was a legitimate non-discriminatory
reason for refusing to hire [her]. Pursuant to the Settlement Agreement, [Jencks]
waived her right to any future employment with [M W A] and thus [M W A] had a
legitimate non-discriminatory reason” for declining [Jenck’s] application. (Id.)
Judgment was entered on August 3, 2005; Jencks filed her notice of appeal the
next day.
Discussion
“W e review the district court's grant of summary judgment de novo,
applying the same legal standard used by the district court.” Simms v. Okla. ex
rel. Dep’t of M ental Health, 165 F.3d 1321, 1326 (10th Cir. 1999). Summary
judgment is appropriate “if the pleadings, depositions, answ ers to interrogatories,
and admissions on file, together with the affidavits, if any, show 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.” F ED . R. C IV . P. 56(c). “W hen applying this
standard, we view the evidence and draw reasonable inferences therefrom in the
light most favorable to the nonmoving party.” Simms, 165 F.3d at 1326.
The nonmoving party “must identify sufficient evidence which would
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require submission of the case to a jury.” M ares v. ConAgra Poultry Co., 971
F.2d 492, 494 (10th Cir. 1992). W here the nonmoving party bears the burden of
proof at trial, that party must go beyond the pleadings and identify specific facts
that demonstrate the existence of an issue to be tried by the jury. Id.
In determining whether to grant summary judgment on a Title VII
claim, we apply the burden-shifting framework set forth in
M cDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36
L.Ed.2d 668 (1973). Under this approach, the plaintiff initially bears
the burden of production to establish a prima facie case of a Title VII
violation . . . . If the defendant provides a nondiscriminatory reason
for the employment action, the plaintiff may defeat summary
judgment by presenting sufficient evidence such that a reasonable
jury could conclude that the proffered nondiscriminatory reason for
the employment action is pretextual, that is, “unworthy of belief.”
Sim m s, 165 F.3d at 1328 (citations omitted).
A. Standing
At the outset we must decide whether Jencks has standing to bring a Title
VII action against M W A. Title VII's anti-retaliation provision provides in
relevant part: “It shall be an unlaw ful employment practice for an employer to
discriminate against any of his employees or applicants for employment . . .
because he has opposed any practice made an unlawful employment practice by
this subchapter, or because he has made a charge . . . under this subchapter.”
42 U.S.C. § 2000e-3(a).
As a remedial statute, Title VII must be liberally construed to bring former
employees within its protections. Rutherford v. Amer. Bank of Commerce, 565
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F.2d 1162, 1165-66 (10th Cir. 1977); Berry v. Stevinson Chevrolet, 74 F.3d 980,
986 (10th Cir. 1996); see also Robinson v. Shell Oil, 519 U.S. 337, 346 (1997)
(Title VII § 704(a) includes former employees within its coverage.) The record
reflects Jencks’ former position - the one from which she was demoted and for
which she successfully brought a Title VII action - was that of an employee.
Consequently, the district court correctly held Jencks was a “former employee”
and had standing to bring a retaliation claim against her former employer.
Trujillo v. Univ. of Colo. Health Scis. Ctr., 157 F.3d 1211, 1215 (10th Cir. 1998).
B. Prima Facie Case of Retaliation
At the time this case was decided by the district court, a plaintiff had to
show three elements to establish a prima facie case of retaliation: “(1) protected
employee action; (2) adverse action by an employer either after or
contemporaneous with the employee's protected action; and (3) a causal
connection between the employee's action and the employer's adverse action.”
M organ v. Hilti, Inc., 108 F.3d 1319, 1324 (10th Cir. 1997); see also Berry, 74
F.3d at 985. Recently the Supreme Court explained the “adverse employment
action” standard is not restricted to acts and harm occurring in the workplace or
related to employment. Burlington N. & Santa Fe Ry. Co. v. White, --- U.S. ---,
126 S.Ct. 2405, 2409 (2006). But the employer’s action must be real and
significant. “The anti-retaliation provision protects an individual not from all
retaliation, but from retaliation that produces an injury or harm.” Id. at 2414.
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“[T]he provision covers those (and only those) employer actions that would have
been materially adverse to a reasonable employee or job applicant.” Id. at 2409.
A “materially adverse” act is one that well might dissuade a reasonable worker
from making a discrimination complaint. Id. at 2415. 3
“In the summary judgment context, a plaintiff initially must raise a genuine
issue of material fact on each element of the prima facie case.” M organ, 108 F.3d
at 1323. The parties do not dispute that Jencks’ previous litigation was a
protected action. Thus, we direct our attention to the claimed retaliatory act.
Burlington Northern, 126 S.Ct. at 2416 (“[T]he standard is tied to the challenged
retaliatory act, not the underlying conduct that form[ed] the basis of the Title VII
[discrimination] complaint.”)
1) Nature of the claimed retaliatory act
Jencks maintains M W A’s refusal to offer her a sales agent contract
constituted an adverse employment action. Relying on Berry, M W A contends its
refusal to enter into an independent contractor relationship with Jencks does not
constitute an adverse employment action because it did not impact Jencks’ future
employment prospects. The district court did not directly address M W A’s
3
After Burlington Northern, “[t]o establish a prima facie case of
retaliation, a plaintiff must demonstrate (1) that he engaged in protected
opposition to discrimination, (2) that a reasonable employee would have found the
challenged action materially adverse, and (3) that a causal connection existed
between the protected activity and the materially adverse action.” Argo v. Blue
Cross & Blue Shield of Kan., Inc., 452 F.3d 1193, 1202 (10th Cir. 2006) (citing
Burlington Northern, 126 S.Ct. at 2414-15).
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contention on this point. It simply stated “w hether there was an adverse
employment action is not in question,” citing 42 U.S.C. § 2000e-2(a) for the
proposition that a refusal to hire is an adverse employment action. (A plt’s App.,
Vol. I at 114, n.3.)
These various positions must be considered in light of the Court’s decision
in Burlington Northern. Under its holding regarding the scope of the anti-
retaliation provisions of Title VII, M W A’s argument — that only acts impacting
employment prospects are proscribed — is certainly wrong. Id. at 1209. Turning
to the district court’s conclusion that an adverse employment action is not an
issue in this case, the “materially adverse” standard articulated in Burlington
Northern, at the very least, favors a more robust debate on that issue.
W e must consider whether M W A’s refusal to consider Jencks for a contract
position was materially adverse to her interests. Burlington Northern, 126 S.Ct.
at 2415. “[I]t is important to separate significant from trivial harms.” Id. The
settlement agreement negotiated in Jencks discrimination case is critical to that
determination. If, as the district court decided, the settlement agreement
foreclosed Jencks from all forms of future employment related opportunities w ith
M W A, including work as an independent contractor, M W A’s refusal to consider
her application is not a significant event. Jencks may have been annoyed,
frustrated or disappointed, but holding her to the terms of a fairly negotiated
settlement agreement is not a harm. As the Supreme Court noted, “the
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significance of any given act of retaliation will often depend upon the particular
circumstances. Context matters.” Id.
Under the district court’s construction of the settlement agreement, a
reasonable worker — the objective standard set forth in Burlington Northern —
could not have considered M W A’s action to be materially adverse.
By focusing on the materiality of the challenged action and the
perspective of a reasonable person in the plaintiff's position, we
believe this standard will screen out trivial conduct while effectively
capturing those acts that are likely to dissuade employees from
complaining or assisting in complaints about discrimination.
Id. at 2416.
On the other hand, Jencks claims the settlement agreement only precluded
her from re-employment as opposed to an independent contractor position.
Therefore, M W A’s failure to consider her application was not justified by the
Settlement Agreement, and not only was it wrong, it was retaliatory as w ell. If
M W A erred in interpreting the contract and did so with retaliatory intent its acts
may well have been materially adverse (sufficient to dissuade a reasonable worker
from making or supporting a discrimination charge).
Construction of a contract is an issue for the court, which we review de
novo. Deepwater Invs., Ltd. v. Jackson Hole Ski Corp., 938 F.2d 1105, 1106
(10th Cir. 1991). But we need not undertake that review in this case. The district
court did not resolve the contract issue in order to determine whether Jencks had
suffered a materially adverse act at the hands of a former employer. Instead, it
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ultimately concluded, even if a prima facie case of retaliation had been made,
M W A presented a legitimate, non-discriminatory reason for its acts which Jencks
failed to rebut with a sufficient showing of pretext. Because we agree with the
district court’s ultimate decision, as discussed below, we need not resolve other
issues.
C. Legitimate, Non-discriminatory Reason
Assuming, without deciding, Jencks established her prima facie case, “the
burden of production shifts to the defendant to articulate a legitimate,
nondiscriminatory reason for the adverse action.” Berry, 74 F.3d at 986. M W A
contends it was entitled to rely on the 1997 Settlement Agreement in refusing to
offer Jencks a sales agent contract because the terms of the agreement waived
Jencks’ right to all future reinstatement or re-employment with M W A. Relying
on Kendall v. Watkins, 998 F.2d 848 (10th Cir. 1993), the district court concluded
the Settlement Agreement was a “legitimate non-discriminatory reason for
declining [Jencks’] application.” (A plt’s App., Vol. I at 116.)
In Kendall, the employer refused to re-hire a former employee under the
terms of a settlement agreement entered into after the employee’s earlier
discrimination complaint. W e noted it was important to distinguish between the
fact of the settlement and its terms:
If the [employer] refused to consider plaintiff for future employment
because she brought a Title VII claim that the agency had to settle,
the agency would be in violation of Title VII. If, however, the
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agency relied not on the fact that it settled plaintiff's Title VII claim,
but on the terms pursuant to which the claim was settled, it did not
necessarily violate Title VII.Id. at 851.
As in Kendall, M W A’s interpretation and reliance on the terms of the
Settlement Agreement does not itself violate Title VII and can serve as a
legitimate, nondiscriminatory reason for M W A’s actions. Kendall, 998 F.2d at
851. Our holding in this regard is narrow. W e do not imply that M W A was
correct in its interpretation of and reliance on the Settlement Agreement, only that
its stated reason was “facially non-discriminatory” and thus sufficient to satisfy
its burden in establishing a legitimate, non-discriminatory reason for its decision. 4
Staghound v. Safeway, Inc., 337 F.3d 1213, 1218 (10th Cir. 2003).
Jencks argues the terms of the Settlement Agreement are inapplicable
because she was not seeking reinstatement to her previous position as district
manager. She also claims she was not seeking re-employment but affiliation as an
independent contractor. Therefore, she contends M W A’s reliance on the
Settlement Agreement was pretextual and its real reason for not offering her a
sales agent contract w as because she previously sued M W A under Title VII. As
we discuss next, Jencks offered insufficient evidence to demonstrate M W A’s
reliance on the Settlement Agreement was pretextual.
4
As we noted in Burrus v. United Telephone Com pany, “The defendant
need not prove the absence of retaliatory motive, but only produce evidence that
would dispel the inference of retaliation by establishing the existence of a
legitimate reason.” 683 F.2d 339, 343 (10th Cir. 1982) (quotations and citations
omitted).
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D. Pretext
Once an employer presents a legitimate, non-discriminatory reason for its
conduct, the burden shifts back to the plaintiff to demonstrate the reason is “a
pretext for its discriminatory intentions. A plaintiff demonstrates pretext by
showing either that a discriminatory reason more likely motivated the employer or
that the employer's proffered explanation is unworthy of credence.” Staghound,
337 F.3d at 1218 (quotations and citations omitted); see Cone v. Longm ont United
Hosp. Assen, 14 F.3d 526, 530 (10th Cir. 1994). This can be done in several
ways. Centrex v. Pense Transp. Servs., Inc., 220 F.3d 1220, 1230 (10th Cir.
2000).
Pretext can be shown by such weaknesses, implausibilities,
inconsistencies, incoherence, or contradictions in the employer's
proffered legitimate reasons for its action that a reasonable fact
finder could rationally find them unw orthy of credence and hence
infer that the employer did not act for the asserted
non-discriminatory reasons.
M organ, 108 F.3d at 1323 (internal quotations and citations omitted).
“Even though all doubts concerning pretext must be resolved in plaintiff's
favor, a plaintiff's allegations alone will not defeat summary judgment.” M organ,
108 F.3d at 1324. “M ere conjecture that the employer's explanation is pretext is
insufficient basis to defeat summary judgment.” Anderson v. Coors Brewing Co.,
181 F.3d 1171, 1179 (10th Cir. 1999); see Pains v. M ission Hills Bank, 60 F.3d
1486, 1491 (10th Cir. 1995).
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In this case, once M W A set forth a non-discriminatory reason for not
offering Jencks a contract — its reliance on the terms of the Settlement
Agreement — Jencks “had the burden to persuade the district court that [M W A’s]
reason was unworthy of belief and a pretext to cover up discriminatory motives.”
Pains, 60 F.3d at 1491. In attempting to meet this burden, she relies primarily on
her conversation with Hurst and the contents of the rejection letter. She argues
(1) her earlier promotion within M W A infers at least satisfactory performance, (2)
even when demoted M W A continued to offer her the same position she currently
pursued, and (3) her satisfactory post-discrimination production with another
company negates M W A’s “past production” rationale for its refusal to contract.
She also claims M W A’s interpretation of the Settlement Agreement involves “a
tortured reading” of its terms. (Appellant’s Br. at 15.) In addition, she offers her
belief, based on her prior experience with M W A, that hiring decisions were made
by the state manager, not at the corporate level. This evidence is insufficient, as
it “presents nothing which would cause a reasonable finder of fact to determine
that the reason [was] unworthy of belief.” Anderson, 181 F.3d at 1180.
W hile Jencks’ argument relating to her past performance may have carried
the day if M W A had relied solely on this rationale, it is inadequate in light of
M W A’s dual reasons for its decision. On the record before us, Jencks’
conclusory statements regarding her past performance do not create an inference
that M W A’s reference to performance issues w ere pretextual. She concedes that,
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for w hatever reasons, her performance while employed by M W A deteriorated.
M ore importantly, M W A’s interpretation of the Settlement Agreement is not
“tortured.” Rather, it is one way to reasonably read the contractual terms.
Hurst’s ruminations about Jencks’ history and his hurt feelings are immaterial as
he was not the decision-maker in this case and nothing of record indicates he
influenced the decision in any way. See EEOC v. BAI Coca-Cola Bottling Co. of
Los Angeles, 450 F.3d 476, 487 (10th Cir. 2006) (“To prevail on a subordinate
bias claim, a plaintiff must establish more than mere “influence” or “input” in the
decision making process. Rather, the issue is whether the biased subordinate's
discriminatory reports, recommendation, or other actions caused the adverse
employment action.”) (citation omitted). Jencks’ statement about hiring decisions
being made by the state manager is dated and, in any event, the Settlement
Agreement makes her application for a contractual position unique. In sum,
Jencks fails to point to facts which would allow a reasonable fact-finder to infer
M W A did not rely on the terms of the Settlement Agreement in making its
decision to reject Jencks’ application.
E. Consideration of Evidence
Finally, we turn to Jencks’ contention the district court improperly relied
on new materials in granting summary judgment for M W A. In accordance with
the district court’s M arch 16, 2005 order, M W A filed a reply reiterating its
argument about standing, arguing Jencks had not established a prima facie case of
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retaliation, and asserting it relied on the provisions of the Settlement Agreement
(filed with the court some nine months earlier) in not offering Jencks a sales
agent contract. M W A also submitted Smiley’s affidavit and a copy of the
rejection letter.
Jencks argues the district court improperly relied on these materials and she
could not respond to M W A’s “new” assertions. Her argument that M W A’s reply
and exhibits were “new” is disingenuous. She filed the Title VII suit against
M W A and was well aware of her burden of proof, evidenced in part by her
response to the M arch 16, 2005 order acknowledging the elements of a retaliation
claim and arguing she had made a prima facie case of retaliation. She discussed
her conversation with Hurst, the referral of her application to the corporate office,
the Settlement Agreement, and M W A’s reliance upon it in refusing to offer her a
contract. M W A’s reply did not “advance[] . . . new reasons” for its actions.
Baird v. Seagate Tech., Inc., 145 F.3d 1159, 1164 (10th Cir. 1998) (emphasis
added).
W e have held a nonmoving party should be given an opportunity to respond
to new arguments set forth in a motion for summary judgment:
Thus, when a moving party advances in a reply new reasons and
evidence in support of its motion for summary judgment, the
nonmoving party should be granted an opportunity to respond.
However, if the district court grants summary judgment for the
movant without relying on the new materials and arguments in the
movant's reply brief, it does not abuse its discretion by precluding a
surely.
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Id. at 115-65 (citation omitted).
In this case, Jencks never requested an opportunity to respond nor was she
deprived of an opportunity to argue the issues upon which the district court based
its summary judgment ruling.
A FFIRME D.
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