Harrison v. South Carolina Department of Mental Health ( 2015 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 14-2096
BARRY A. HARRISON; WESLEY T. ROACH; DWAYNE M. HAWKINS,
Plaintiffs - Appellants,
v.
SOUTH CAROLINA DEPARTMENT OF MENTAL HEALTH,
Defendant - Appellee.
Appeal from the United States District Court for the District of
South Carolina, at Columbia. Joseph F. Anderson, Jr., Senior
District Judge. (3:12-cv-01754-JFA)
Argued: May 12, 2015 Decided: July 7, 2015
Before SHEDD, DUNCAN, and HARRIS, Circuit Judges.
Vacated and remanded by unpublished opinion. Judge Harris wrote
the opinion, in which Judge Shedd and Judge Duncan joined.
ARGUED: James Paul Porter, J. LEWIS CROMER & ASSOCIATES, LLC,
Columbia, South Carolina, for Appellants. Vance J. Bettis,
GIGNILLIAT, SAVITZ & BETTIS, LLP, Columbia, South Carolina, for
Appellee. ON BRIEF: James Lewis Mann Cromer, J. LEWIS CROMER &
ASSOCIATES, LLC, Columbia, South Carolina, for Appellants.
Unpublished opinions are not binding precedent in this circuit.
PAMELA HARRIS, Circuit Judge:
Barry Harrison and two colleagues appeal the grant of
summary judgment to their employer, the South Carolina
Department of Mental Health (“DMH” or “the Department”), on race
discrimination and retaliation claims under Title VII of the
Civil Rights Act of 1964. Harrison and his colleagues
(collectively, “plaintiffs”) settled a prior race discrimination
suit against the Department in 2010. They now allege that a
number of actions taken by DMH since then — including refusing
to consider them for job assignments and giving raises to
similarly situated DMH employees but not to them — constitute
discrimination on the basis of their race and retaliation for
their prior lawsuit. While we affirm the district court’s grant
of summary judgment to DMH in most respects, we remand certain
claims related to the challenged raises for further factual
development.
I.
A.
Barry Harrison, Wesley Roach, and Dwayne Hawkins are
maintenance workers for the South Carolina Department of Mental
Health. Each has worked for DMH for approximately thirty years
and holds the title Trade Specialist IV (“TS-IV”), with “IV”
indicating rank. Harrison, Roach, and Hawkins are generalists,
2
performing painting, carpentry, electrical, and plumbing work
for the Building Maintenance section of DMH’s Physical Plant
Services department as needed.
In 2009, Harrison, Roach, and Hawkins, who are black, filed
a lawsuit accusing DMH of discriminating against them on the
basis of their race in their pay and in failing to promote them
(the “2009 lawsuit”). The parties agreed to settle the suit on
December 30, 2010. The settlement agreement (the “2010
settlement”) called for DMH to make two forms of payments to
Harrison, Roach, and Hawkins. First, DMH agreed to make a
single $100,000 lump-sum payment that was to be split by
Harrison, Roach, and Hawkins after they paid their attorneys’
fees and costs. Second, DMH agreed to increase the men’s
salaries by $4,000 per year, pending approval by the South
Carolina Budget and Control Board’s Office of Human Resources.
This increase was made retroactively effective from 2006, and
will extend until 2016 — more specifically, until the January
31, 2016, date on which the men agreed to resign from their jobs
with DMH.
The 2010 settlement did not, however, mark the end of these
workers’ concerns about racial discrimination at DMH. In
response to a budgetary shortfall, DMH’s Physical Plant Services
department, where the plaintiffs work, underwent a significant
reorganization in July of 2011. DMH consolidated its four
3
existing maintenance shops into two, and gave many employees new
responsibilities or transferred them to different locations.
Specifically, the Department transferred two of the four
supervisors of its pre-consolidation maintenance shops, all of
whom were white, into the supervisor positions for the two
consolidated shops. The two remaining shop supervisors were
then given different supervisory roles, one as a building
manager and the other as a supervisor at an energy plant.
Harrison, Roach, and Hawkins testified that they would have
applied for any of these four positions had DMH made them
available to applicants.
While the four maintenance shop supervisors had a higher
rank than the plaintiffs, the plaintiffs claim that DMH also
officially or unofficially promoted three white employees with
the same TS-IV position and rank as them: one who was made a
preventive maintenance supervisor in the heating, ventilating,
and air conditioning unit; another who took on new supervisory
responsibilities; and a third who became a supervisor over the
plumbing unit. According to the plaintiffs, the first two of
these “promotions” were granted without a competitive
application process; the third, they say, was advertised as open
only to current members of the plumbing unit, which they claim
unfairly excluded general maintenance workers who nevertheless
had extensive plumbing experience, such as themselves. However,
4
the first two of the alleged promotions did not come with an
increase in pay or rank, and the plaintiffs admit that they
never actually applied for the position in the plumbing unit, or
spoke to their human resources manager about whether they could
apply.
In September 2011, less than a year after the settlement of
the 2009 lawsuit, DMH gave salary raises to all TS-IVs with
fifteen or more years of experience except for Harrison, Roach,
and Hawkins (the “September 2011 raises”). It is undisputed
that this raise was based at least in part on a “compression”
study DMH had undertaken before the 2010 settlement, showing
that the salaries of certain experienced employees, including
TS-IVs, were lagging behind statewide averages for comparable
workers. According to DMH, the three plaintiffs were excluded
because the $4,000 annual salary adjustment they received as
part of the 2010 settlement was, in effect, a compression-based
raise itself, so that a second raise would be redundant. DMH
managers involved with authorizing the September 2011 raises
testified that the salary adjustment given to Harrison, Roach,
and Hawkins was a benchmark and “accelerant” for the 2011 raises
given to other TS-IVs. Harrison, Roach, and Hawkins, however,
deny that they understood the salary adjustment to be a
correction for salary compression. The text of the settlement
agreement makes no reference to a compression study, and does
5
not explain the nature of the $4,000-per-year adjustment or how
the figure was calculated.
The plaintiffs now allege that these raises were allocated
in a discriminatory and retaliatory manner, and that they
produced a new pay imbalance among TS-IVs. Using salary charts
that DMH provided in discovery, they calculate that in 2012,
Harrison, Roach, and Hawkins were paid on average $950 less than
white TS-IVs with comparable experience, and $160 less than
other black TS-IVs. In 2013, they find, black TS-IVs were paid
on average $1,000 a year less than white TS-IVs, and Harrison,
Roach, and Hawkins were paid $1,100 less than white TS-IVs and
$100 less than other black TS-IVs.
B.
Claiming that in these and other matters DMH discriminated
against them on the basis of race and retaliated against them
for bringing their 2009 lawsuit, Harrison, Roach, and Hawkins
brought an action under Title VII in the District of South
Carolina in June 2012. The plaintiffs amended their complaint
in December 2013 in order to incorporate events that occurred
after filing. DMH moved for summary judgment, and in August
2014, a magistrate judge filed a report and recommendation that
summary judgment be granted to DMH on both the discrimination
and retaliation claims.
6
The magistrate judge agreed with the plaintiffs that they
had administratively exhausted their Title VII claims, including
their disparate pay claims, by adequately presenting them to the
Equal Employment Opportunity Commission (“EEOC”). But on the
merits, the magistrate judge concluded that the plaintiffs’
claims failed, whether considered under the so-called direct
proof method or under the burden-shifting framework set out in
McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973).
As to the September 2011 raises, the magistrate judge
determined that the $4,000-per-year adjustment provided the
plaintiffs by the 2010 settlement was in fact a compression
raise, and that the three plaintiffs were excluded from the
round of compression raises awarded in September 2011 only
because they already had received such raises. Moreover, the
magistrate judge noted, some of the TS-IVs who did receive
raises in 2011 were black. As a result, according to the
magistrate judge, the plaintiffs had not made out a triable case
that denial of the September 2011 raises was either retaliatory
or discriminatory.
The magistrate judge similarly rejected the plaintiffs’
claim of pay disparities based on race and retaliation following
the September 2011 raises. Those claims, the magistrate judge
determined, rested on inadequate data concerning historical wage
7
payments, based on the plaintiffs’ own calculations and offered
without the necessary context.
None of the plaintiffs’ other allegations presented close
questions, according to the magistrate judge. The allegations
related to the restructuring of the Physical Plant Services
department, the magistrate judge reasoned, should be treated as
“failure to promote” claims, which require a plaintiff to show
that there was an “open” position for which he qualified but was
not selected. The reshuffling of the four pre-consolidation
maintenance shop supervisors into different supervisory roles,
on the other hand, amounted to lateral transfers rather than the
filling of “open” positions. Likewise, as to the plaintiffs’
allegations that they were unlawfully excluded from
consideration for other positions, the magistrate judge found
either that the position in question was not an opening or
promotion, that the plaintiffs had failed to attempt to apply,
or that the plaintiffs could not establish that they were
qualified. Finally, the magistrate judge found that none of the
other DMH actions of which the plaintiffs complained rose to the
level of a change in the terms of employment or a “materially
adverse” action, as required to state a claim for discrimination
or retaliation under Title VII.
In September 2014, the district court issued an opinion
responding to the plaintiffs’ specific objections to the
8
magistrate judge’s report and affirming the magistrate judge’s
reasoning on each point. The district court then adopted the
magistrate judge’s report and recommendation in full and granted
summary judgment to DMH on all claims. This appeal followed.
II.
We review the district court’s grant of summary judgment de
novo, and we view the facts in the light most favorable to the
plaintiffs, as the non-movants. See Stuart v. Camnitz, 774 F.3d
238, 244 (4th Cir. 2014).
Title VII prohibits employment discrimination on the basis
of an employee’s membership in a protected class and retaliation
based on an employee’s opposition to “any practice made []
unlawful” by Title VII, including participation in a Title VII
“investigation, proceeding, or hearing.” 42 U.S.C.
§§ 2000e-2,-3. Whereas the types of employment actions that may
be challenged in a discrimination suit are limited in kind by
the text of § 2000e–2(a) to those affecting the “compensation,
terms, conditions, or privileges of employment,” any “materially
adverse” employment action — one that could have “dissuaded a
reasonable worker from making or supporting a charge of
discrimination” — is actionable in a retaliation suit.
Burlington N. & Santa Fe Ry. Co. v. White, 548 U.S. 53, 68
(2006).
9
On appeal, the plaintiffs contend that the district court
erred in granting summary judgment to DMH because they have made
out a triable case of both these forms of Title VII violations,
primarily in connection with raises, wages, and promotions. For
the reasons given below, we affirm the district court with
respect to most of the plaintiffs’ claims but remand for
additional fact-finding regarding claims related to the 2011
raises and subsequent pay disparities.
A.
We begin with the many respects in which we affirm the
district court’s decision. As described above, the plaintiffs
have challenged a series of personnel decisions, alleging that
DMH failed to promote them or to consider them for various
positions in violation of Title VII. We agree with the district
court that the plaintiffs have failed to make out a case of
either discrimination or retaliation in connection with those
decisions, and that DMH is entitled to summary judgment on the
claims.
As the district court explained, many of the positions for
which the plaintiffs allege they were passed over were not
“open” positions, as required to show disparate treatment in
promotions. See Evans v. Techs. Applications & Serv. Co., 80
F.3d 954, 959 (4th Cir. 1996); see also McDonnell Douglas, 411
U.S. at 802 (addressing rehiring of discharged employees).
10
Instead, the unrefuted evidence shows that the personnel actions
in question were lateral transfers necessitated by the
restructuring of the Physical Plant Services department, in
which existing shop supervisors, senior to plaintiffs, remained
shop supervisors or assumed new supervisory roles. As the
district court held and the magistrate judge explained in
detail, these lateral transfers cannot give rise to a failure to
promote claim.
With respect to the supervisory job in the plumbing unit,
we again agree with the district court that plaintiffs have
failed to make out a case. It is undisputed that the plaintiffs
did not apply or attempt to apply for that position, and that is
enough to defeat their claims as a matter of law. See Evans, 80
F.3d at 959 (plaintiff must have applied or “sought to apply”
for position to make out claim under Title VII). And we agree
with the district court that the plaintiffs have failed to show
that the grant of additional responsibilities to two other
employees constituted promotions or the filling of open
positions.
Finally, we agree with the district court that on the facts
alleged in this case, none of the other actions of which the
plaintiffs complain, unrelated to promotions or to the pay and
raise issues we turn to next, affect the “terms, conditions, or
status of employment” as required to make out a discrimination
11
claim under Title VII, or constitute the kind of “materially
adverse” action sufficient to give rise to a retaliation claim.
B.
We turn now to the September 2011 raises, and to the
plaintiffs’ retaliation claim in connection with those raises.
According to the plaintiffs, by awarding the September 2011
raises to every TS-IV employee other than the three of them, DMH
retaliated against them for bringing their earlier 2009 race-
discrimination suit against the Department. On this claim, an
award of summary judgment to DMH was premature, because the
issue cannot be decided as a matter of law without further
factual development regarding the 2010 settlement.
This is an unusual case, in that most of the facts required
to make out a retaliation claim are not in dispute. First,
there is no question that in bringing their 2009 lawsuit against
DMH for failure to promote and pay discrimination based on race,
the plaintiffs engaged in exactly the kind of activity that
Title VII protects against a retaliatory response. See 42
U.S.C. § 2000e-3 (protected activity includes participation in a
Title VII “investigation, proceeding, or hearing”); Price v.
Thompson, 380 F.3d 209, 212 (4th Cir. 2004); see also Gilbert v.
Napolitano, 670 F.3d 258, 263 (D.C. Cir. 2012) (“[B]ringing
discrimination charges undoubtedly qualifies as protected
activity.”). Second, DMH admits that the 2010 settlement of
12
that lawsuit is the reason that the plaintiffs did not receive
the September 2011 raises. Indeed, that is the whole theory of
DMH’s defense on this claim: that because the plaintiffs
received pay adjustments as a result of their 2009 litigation
against the Department, they were not given additional raises in
2011. That is enough to satisfy the “but-for” causation
required of a retaliation claim. See Univ. of Texas Sw. Med.
Ctr. v. Nassar, 133 S. Ct. 2517, 2533 (2013). And finally, it
is clear that if DMH deprived Harrison, Roach, and Hawkins in
2011 of a raise given to all other similarly situated employees,
then that would be a “materially adverse” employment action for
purposes of Title VII’s retaliation provision. See Burlington
Northern, 548 U.S. at 68 (action taken in response to protected
activity constitutes prohibited retaliation if it is “materially
adverse” in that it could have “dissuaded a reasonable worker
from making or supporting a charge of discrimination”).
As the case comes to us now, then, the key question is
whether Harrison, Roach, and Hawkins actually were deprived of
the September 2011 raises, or whether, as DMH argues, they in
fact received the September 2011 raises, in the form of the pay
adjustments that were part of the 2010 settlement. It is only
with the benefit of appellate briefing and argument that the
critical nature of that question becomes clear. As a result,
what turns out to be a core factual dispute about the nature of
13
the parties’ 2010 settlement agreement was never squarely joined
in the proceedings below.
On the one hand, it appears to be undisputed that the
September 2011 raises for the plaintiffs’ fellow TS-IVs were
prompted at least in part by long-standing DMH concerns,
predating the 2009 lawsuit, regarding “salary compression,” or a
lack of differentiation between the salaries of experienced and
inexperienced employees that left experienced employees
undercompensated relative to statewide averages. And multiple
DMH managers testified that the $4,000 annual salary adjustment
received by the plaintiffs pursuant to their 2010 settlement
also was designed to correct for salary compression, and was
thus effectively an early version of the same compression-based
raises that other TS-IV employees received in September 2011.
On the other hand, the plaintiffs insist that they did not
understand the settlement agreement that concluded their 2009
lawsuit to incorporate pay raises adjusting for salary
compression. In his deposition, Harrison expressly denied that
the pay adjustment provided for in the settlement agreement was
the equivalent of the compression-based September 2011 raises.
And the language of the settlement agreement describes neither
the nature of the annual salary adjustments nor the way in which
the $4,000 figure was calculated, shedding no light on whether
$4,000 per year over ten years represents a compression-based
14
adjustment, as DMH would have it, or simply the price DMH was
willing to pay in exchange for settling each plaintiff’s 2009
race-discrimination claim. 1
We do not think that the critical question of whether the
parties’ 2010 settlement agreement effectively granted the
plaintiffs the same compression-based raise that other employees
received in September 2011 can be resolved as a matter of law on
the record as it now stands. The interpretation of settlement
agreements is governed by general principles of contract law.
See Ohio Valley Envtl. Coal. v. Aracoma Coal Co., 556 F.3d 177,
211 (4th Cir. 2009); Pee Dee Stores, Inc. v. Doyle, 672 S.E.2d
799, 802 (S.C. Ct. App. 2008). Application of those principles
requires evidence that is missing from this record — evidence
contemporaneous to the signing of the settlement agreement,
1 The relevant portion of the settlement agreement reads:
Subject to approval by the South Carolina Budget and
Control Board’s Office of Human Resources, SCDMH will
increase each of Plaintiff’s current salaries by Four
Thousand Dollars ($4,000) annually, retroactive to
June 2, 2006, and will pay each of Plaintiffs backpay
associated with the retroactive salary increase, less
applicable taxes, employee contributions to
retirement, and other required withholding. . . . If
the South Carolina Budget and Control Board’s Office
of Human Resources approves the retroactive salary
increases authorized by this paragraph, SCDMH will
make required employer contributions to the South
Carolina Retirement System on behalf of each of
Plaintiffs to account for the retroactive adjustment
in Plaintiffs’ respective salaries. J.A. 174.
15
bearing on both parties’ understanding of its terms. DMH has
presented deposition testimony regarding the Department’s
current view of what was intended in 2010, when the settlement
agreement was negotiated. But the DMH managers who testified
provided no evidence that this view was memorialized or
communicated at that time, or that it was shared by the
plaintiffs. Indeed, with candor that we appreciate, DMH’s able
lawyer conceded at argument that there is no evidence in the
present record indicating that the plaintiffs understood the pay
adjustments provided in their settlement agreement as
compression-based raises.
Accordingly, we believe there is a need for additional
factual development regarding the 2010 settlement’s salary
adjustment and its relationship, if any, to the September 2011
raises. On remand, DMH will have the opportunity to present
evidence contemporaneous to the settlement agreement regarding
how the $4,000 annual salary adjustment was calculated and
showing that the adjustment was understood by both sides to
address salary compression; the plaintiffs, for their part, may
present evidence that in 2010 the parties did not mutually agree
that the salary adjustment provided for by the settlement
16
agreement was in the nature of a compression-based raise. 2 If
after further development the issue is ripe for decision as a
matter of law, then the district court of course may grant a
subsequent summary judgment motion.
C.
Finally, we address the plaintiffs’ claim that the
September 2011 raises had ongoing and impermissible effects on
wages, reintroducing a race-based disparity in pay between black
and white workers generally, and also generating a disparity
between the plaintiffs’ wages and those of other black TS-IVs
that is indicative of retaliation. In support of their claim,
the plaintiffs proffered a statistical analysis of salary charts
for fiscal years 2012-13 and 2013-14 that, they say, shows white
TS-IVs earning more than black TS-IVs generally, and both white
and black TS-IVs earning more than Harrison, Roach, and Hawkins
specifically.
Preliminarily, we agree with the district court that the
plaintiffs properly exhausted this claim by pleading it in their
EEOC charge. DMH argues otherwise, pointing to the fact that
the EEOC charge refers expressly only to the September 2011
raises, and not to wages in 2012 or 2013. But as the
plaintiffs’ counsel clarified at argument, the two are
2If there is no evidence of a meeting of the minds on this
point, the district court can address that issue.
17
intertwined; the calculations of pay disparity in 2012 and 2013
advanced by the plaintiffs in this suit are intended as evidence
of the retaliatory and discriminatory effects of the September
2011 raises, and not of some independent harm. We construe EEOC
charges “liberally” for these purposes, Bonds v. Leavitt, 629
F.3d 369, 379 (4th Cir. 2011), requiring only that the “factual
allegations in the administrative charge [be] reasonably related
to the factual allegations in the formal litigation,” Chacko v.
Patuxent Inst., 429 F.3d 505, 509 (4th Cir. 2005), and like the
district court, we are satisfied that the plaintiffs have met
that standard here.
Turning to the merits, the plaintiffs framed their pay
disparity claims around a series of DMH salary charts, provided
by DMH during discovery, that list the salary, classification,
race, and date of hire for employees in the Physical Plant
Services department. From that raw data, the plaintiffs
conducted what they describe as “basic math,” calculating the
averages of the salaries of DMH employees with particular roles,
levels of experience, and race, and then the differences between
those averages. It is those calculations that the plaintiffs
rely on to show that after the 2011 raises, black TS-IVs were,
on average, paid less than their white counterparts; and that
the plaintiffs, in particular, were paid less than both white
and black comparators.
18
The district court found the plaintiffs’ charts and
statistical data wanting, and we understand the court’s
hesitation. As the magistrate judge explained, there are cases
in which “basic math” is no substitute for expert statistical
analysis, which can ensure that undue weight is not given to
statistically insignificant disparities. See Moultrie v.
Martin, 690 F.2d 1078, 1082 (4th Cir. 1982). Moreover, DMH
raised substantial questions about the failure of the
plaintiffs’ data to distinguish between “specialized” TS-IVs —
professionally licensed electricians, plumbers, carpenters, and
the like, who command higher salaries in the job market — and
unspecialized TS-IVs, including the plaintiffs. Because that
information might have revealed legitimate grounds for pay
disparities, it should be accounted for in the data set and
analysis, if possible. Cf. Matusick v. Erie Cnty. Water Auth.,
757 F.3d 31, 54 (2d Cir. 2014) (Title VII comparators should be
similar in all “material” respects).
On the other hand, we cannot overlook DMH’s own
responsibility for the deficiencies in the plaintiffs’ data set.
The plaintiffs are working, as they must, from information
provided to them by DMH in discovery — here, DMH salary charts
that do not identify or differentiate “specialized” TS-IVs.
And according to the plaintiffs, DMH’s discovery responses
included no other information that would have allowed them to
19
distinguish among TS-IVs on the basis of level of experience,
education, or skill.
Courts often have remanded Title VII cases for further
factual development when a first round of discovery has failed
to produce information relevant to whether purported comparators
are “similarly situated” to a plaintiff, see, e.g., Bobo v.
United Parcel Serv., Inc., 665 F.3d 741, 753 (6th Cir. 2012);
Paquin v. Fed. Nat’l Mortg. Ass’n, 119 F.3d 23, 28 (D.C. Cir.
1997), and we think that is the best course to follow here. On
remand, the plaintiffs may present, as evidence of disparate
pay, data and calculations based on the 2012–13 and 2013–14
salary charts provided by DMH in discovery, though the district
court is free to impose conditions and safeguards — including a
requirement of expert testimony to contextualize the data — that
it deems necessary. DMH, in turn, may turn over evidence
regarding pay differentials based on “specialization,” along
with any other evidence it considers relevant to identifying the
plaintiffs’ proper comparators for purposes of their pay
disparity claims.
III.
The district court properly granted summary judgment to DMH
on many of the plaintiffs’ Title VII claims. But with the
benefit of appellate briefing and argument, and the refinement
20
of the issues that they bring, we conclude that the plaintiffs’
claims related to the September 2011 raises and subsequent pay
disparities cannot be decided on summary judgment on the record
as it now stands, and instead require further factual
development. We therefore vacate the grant of summary judgment
on those claims and remand the case for further proceedings
consistent with this opinion.
VACATED AND REMANDED
21