Jackson v. Education & Employment Ministry , 686 F. App'x 577 ( 2017 )

FILED
United States Court of Appeals
UNITED STATES COURT OF APPEALS Tenth Circuit
FOR THE TENTH CIRCUIT April 24, 2017
_________________________________
Elisabeth A. Shumaker
Clerk of Court
MICHAEL EUGENE JACKSON; JAMES
RAY MOORE,
Plaintiffs - Appellants,
v. No. 16-6196
(D.C. No. 5:14-CV-01364-D)
THE EDUCATION AND (W.D. Okla.)
EMPLOYMENT MINISTRY; JIM
ROBERTSON, individually and in his
official capacity; BERT BELANGER,
individually and in his official capacity;
KRIS STEELE, individually and in his
official capacity,
Defendants - Appellees.
_________________________________
ORDER AND JUDGMENT *
_________________________________
Before BRISCOE, LUCERO, and HARTZ, Circuit Judges.
_________________________________
Michael Eugene Jackson and James Ray Moore, both black men, appeal the
district court’s grant of summary judgment in favor of The Education and
Employment Ministry, two of its board members, and its executive director
*
After examining the briefs and appellate record, this panel has determined
unanimously to honor the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
submitted without oral argument. This order and judgment is not binding precedent,
except under the doctrines of law of the case, res judicata, and collateral estoppel. It
may be cited, however, for its persuasive value consistent with Fed. R. App. P. 32.1
and 10th Cir. R. 32.1.
(collectively, “TEEM”), on their discriminatory-discharge claims and other claims
related to their terminations. We exercise jurisdiction under 28 U.S.C. § 1291 and
affirm the district court’s judgment.
I. Background
TEEM is a nonprofit organization dedicated to breaking cycles of poverty and
incarceration. Since 1987 it has assisted Oklahomans in need of education, social
services, job training, and job-placement services. In 2011, TEEM faced financial
difficulties, forcing it to terminate several of its employees and to borrow money
from its executive director to make payroll. The organization acquired a former state
legislator as its new executive director in November 2012 but continued to face
financial difficulties necessitating that it obtain a line of credit to make payroll in
early 2013. According to the new executive director, TEEM’s financial difficulties
“stemmed from its service model which was to provide services to anyone and
everyone who walked in off the street.” Aplt. App., Vol. 1 at 57. He strove to
restructure TEEM to narrow its focus to serving formerly incarcerated individuals
because outside funding was available for providing those services. The new
executive director was also concerned that TEEM’s primary sponsor had placed it on
probation due to a perception that it was “administratively top heavy.” Id. at 69.
Additional terminations followed in 2013, including the plaintiffs’ in August.
With the departure of the plaintiffs, the executive team was reduced from six
members to four, three of whom were black. According to TEEM, the plaintiffs’
positions were eliminated for financial reasons and because those positions were not
2
funded by outside agencies. No one was hired to fill their positions after they were
terminated. The restructuring required reassigning some of their administrative
duties. Some were assigned to the program director, a black woman who was
promoted from job-placement director; her salary was paid mostly through outside
funding. Some of Mr. Moore’s duties were assigned to a nonblack man whose salary
was also paid through outside funding.
After filing complaints with the Equal Employment Opportunity Commission,
the plaintiffs filed suit in the district court, asserting five claims for relief. The
district court granted TEEM’s motion for summary judgment. Applying the
burden-shifting framework set forth in McDonnell Douglas Corp. v. Green, 411 U.S.
792 (1973), the court concluded that the plaintiffs failed to state a prima facie case of
racial discrimination because they failed to “demonstrate that the circumstances
surrounding their terminations give rise to an inference of racial animus.” Aplt.
App., Vol. 2 at 224. 1 In the alternative, the court ruled that the plaintiffs had not
shown that TEEM’s stated reasons for their terminations—that it had eliminated their
positions through restructuring and could no longer afford their positions—were
pretextual. This conclusion is fatal to the plaintiffs’ claims brought under 42 U.S.C.
§§ 1981, 1985, and 1986. The court also rejected the breach-of-contract claim
brought by Mr. Jackson, who sought to enforce an alleged oral agreement he had with
TEEM to serve as its executive director for two years. That claim, according to the
1
We note that the district court erroneously concluded that the plaintiffs could
not use pretext evidence to help establish their prima facie case. See Wells v. Colo.
Dep’t of Transp., 325 F.3d 1205, 1217-18 (10th Cir. 2003).
3
court, was barred by Oklahoma’s statute of frauds. Finally, the court dismissed the
plaintiffs’ breach-of-fiduciary-duty claim, stating that there is generally no fiduciary
relationship between employees and employers and that the plaintiffs “fail[ed] to cite
any relevant authority in support of their assertions.” Id. at 230.
On appeal the plaintiffs do not challenge the dismissal of their § 1986 claims,
but they argue that the district court erred by (1) concluding that they failed to state a
prima facie case of discrimination in support of their § 1981 claims; (2) granting
summary judgment on their § 1985 claims; (3) misapplying the statute of frauds; and
(4) ruling that they were not in a fiduciary relationship with TEEM.
II. Analysis
We review de novo the district court’s grant of summary judgment, applying
the same standard as the district court. See Adamson v. Multi Cmty. Diversified
Servs., Inc., 514 F.3d 1136, 1145 (10th Cir. 2008). “Summary judgment is
appropriate when ‘there is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.’” Larry Snyder & Co. v. Miller, 648 F.3d
1156, 1159 (10th Cir. 2011) (quoting Fed. R. Civ. P. 56(a)). We view the alleged
facts in the light most favorable to the plaintiffs and draw all reasonable inferences in
their favor. See Tabor v. Hilti, Inc., 703 F.3d 1206, 1215 (10th Cir. 2013).
A. Claims under 42 U.S.C. §§ 1981 and 1985
Neither plaintiff alleges that he faced discrimination at TEEM before his
termination. Where, as here, a plaintiff relies on circumstantial evidence to prove
employment discrimination, we apply the McDonnell Douglas burden-shifting
4
framework, which first requires establishing a prima facie case of discrimination.
See Plotke v. White, 405 F.3d 1092, 1099 (10th Cir. 2005). “A prima facie case
generally requires a plaintiff to show, by a preponderance of the evidence, that [he] is
a member of a protected class, [he] suffered an adverse employment action, and the
challenged action occurred under circumstances giving rise to an inference of
discrimination.” Bennett v. Windstream Commc’ns, Inc., 792 F.3d 1261, 1266
(10th Cir. 2015). “While the elements of a prima facie case under the McDonnell
Douglas framework are neither rigid nor mechanistic, their purpose is the
establishment of an initial inference of unlawful discrimination warranting a
presumption of liability in plaintiff’s favor.” Adamson, 514 F.3d at 1146. The
burden at this stage is “not onerous.” Tabor, 703 F.3d at 1216 (internal quotation
marks omitted).
If a plaintiff states a prima facie case, the burden shifts to the employer to
present a legitimate, nondiscriminatory reason for the adverse employment action.
See Lounds v. Lincare, Inc., 812 F.3d 1208, 1221-22 (10th Cir. 2015). If the
employer does so, the burden shifts back to the plaintiff to show that the proffered
rationale is pretextual. See id. at 1222. “Pretext can be shown by such weaknesses,
implausibilities, inconsistencies, incoherencies, or contradictions in the employer’s
proffered legitimate reasons for its action that a reasonable factfinder could rationally
find them unworthy of credence and hence infer that the employer did not act for the
asserted non-discriminatory reasons.” Dewitt v. Sw. Bell Tel. Co., 845 F.3d 1299,
1307 (10th Cir. 2017) (internal quotation marks omitted). But “mere conjecture that
5
the employer’s explanation is a pretext for intentional discrimination is an
insufficient basis for denial of summary judgment.” Id. (alteration, brackets, and
internal quotation marks omitted). The issue is not the wisdom, fairness, or
correctness of the employer’s action but whether the employer honestly believed its
proffered rationale and acted in good faith based on that rationale. See id. at
1307-08.
In our view, summary judgment was proper because the plaintiffs failed to
present more than conjecture to support their claim of pretext. They contend that
TEEM did not actually eliminate their positions, it merely assigned their duties to
other personnel, primarily the program director. But they concede that no one was
hired to replace them after their terminations. They also concede that under the
direction of the new executive director, TEEM had shifted its focus to serving the
formerly incarcerated population in an effort to improve its financial health. Such
decisions are appropriately left to TEEM, and the plaintiffs have not demonstrated
that the reasons given for the restructuring are unworthy of belief. “[O]ur role is to
prevent intentional discriminatory . . . practices, not to act as a super personnel
department, second guessing employers’ honestly held (even if erroneous) business
judgments.” Young v. Dillon Cos., 468 F.3d 1243, 1250 (10th Cir. 2006) (internal
quotation marks omitted). The plaintiffs made no showing the organizational
changes were motivated by intentional discrimination; after all, three members of the
new four-member executive team were black. The plaintiffs failed to demonstrate
6
the existence of a genuine issue of material fact as to whether the restructuring was a
pretext for racial discrimination.
The plaintiffs also contend that they were not actually terminated for financial
reasons. They point to later growth in TEEM and projections of a better financial
condition after restructuring. But they concede that TEEM had a history of financial
difficulties and had recently borrowed money again to make payroll. They do not
dispute that TEEM had been running a deficit of $40,000 a month when they were
terminated, nor do they dispute that outside funding was used to pay the employees
who took over their duties. The plaintiffs have failed to present evidence from which
one could reasonably infer that TEEM did not honestly believe that it would continue
to face financial difficulties unless it restructured. Because the plaintiffs have not
adequately shown pretext, summary judgment in TEEM’s favor was proper.
The plaintiffs’ claims under § 1985(3) assert a conspiracy to engage in the
same discriminatory conduct that forms the basis of their § 1981 claims. Because the
§ 1981 claims fail, the § 1985(3) claims fail as well. See Bisbee v. Bey, 39 F.3d
1096, 1102 (10th Cir. 1994) (“A violation of section 1985 must include class-based
or racially discriminatory animus.”).
B. Statute of Frauds
The plaintiffs do not challenge the district court’s determination that the
alleged oral contract between Mr. Jackson and TEEM to serve as its executive
director for two years falls within Oklahoma’s statute of frauds because it could not
be performed within a year. See Okla. Stat. tit. 15, § 136(1). Rather, they argue that
7
TEEM bears the burden of proving the alleged contract was not set forth in minutes
from a board meeting and somehow subscribed by the board, stating that “there is no
evidence in the record that said minutes were not subscribed by the [board]. . . .
Defendants, as the moving party, have the burden to demonstrate they were not and
they have not done so.” Opening Br. at 16. But to the extent the plaintiffs seek to
enforce a contract that, on its face, falls within the statute of frauds, it is their burden
to allege facts supporting enforcement. “When it is apparent on the face of plaintiff’s
pleading that the contract is oral, and nothing taking the question out of the statute is
alleged, defendant may demur.” Crabtree v. Eufaula Cotton Seed Oil Co.,
122 P. 664, 665 (Okla. 1912) (internal quotation marks omitted). The plaintiffs
adduce no evidence that would take the alleged contract out of the statute; therefore,
they have failed to state a claim for breach of contract.
C. Fiduciary Duty
The plaintiffs argue that the district court erred by concluding they had failed
to show TEEM breached a fiduciary duty that it owed to them. Although they cite
one Oklahoma case for the proposition that the existence of a fiduciary relationship is
ordinarily a question of fact, see Horton v. Hamilton, 345 P.3d 357, 364
(Okla. 2015), they cite no authority to support finding a fiduciary relationship based
on their status as either TEEM employees or donors. “Under Oklahoma law, the
existence of a fiduciary relationship . . . must be proven by the party asserting the
relationship.” Quinlan v. Koch Oil Co., 25 F.3d 936, 942 (10th Cir. 1994) (emphasis
added). The plaintiffs adduce no evidence that would support such a finding.
8
III. Conclusion
The district court’s judgment is affirmed.
Entered for the Court
Harris L Hartz
Circuit Judge
9