EEOC v. Navy Federal Credit ( 2005 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
EQUAL EMPLOYMENT OPPORTUNITY 
COMMISSION,
Plaintiff-Appellant,
v.  No. 04-2058
NAVY FEDERAL CREDIT UNION,
Defendant-Appellee.

Appeal from the United States District Court
for the Eastern District of Virginia, at Alexandria.
Gerald Bruce Lee, District Judge.
(CA-03-543-1)
Argued: March 17, 2005
Decided: September 13, 2005
Before KING and GREGORY, Circuit Judges, and
HAMILTON, Senior Circuit Judge.
Vacated and remanded by published opinion. Judge King wrote the
opinion, in which Judge Gregory and Senior Judge Hamilton joined.
COUNSEL
ARGUED: Susan Lisabeth Starr, UNITED STATES EQUAL
EMPLOYMENT OPPORTUNITY COMMISSION, Appellate Ser-
vices, Washington, D.C., for Appellant. Francis Joseph Nealon, BAL-
LARD, SPAHR, ANDREWS & INGERSOLL, Washington, D.C., for
Appellee. ON BRIEF: Eric S. Dreiband, General Counsel, Lorraine
2 EEOC v. NAVY FEDERAL CREDIT UNION
C. Davis, Acting Associate General Counsel, Vincent J. Blackwood,
Assistant General Counsel, UNITED STATES EQUAL EMPLOY-
MENT OPPORTUNITY COMMISSION, Washington, D.C., for
Appellant. Jeffrey W. Larroca, Kirsten E. Keating, BALLARD,
SPAHR, ANDREWS & INGERSOLL, Washington, D.C., for Appel-
lee.
OPINION
KING, Circuit Judge:
The Equal Employment Opportunity Commission (the "EEOC")
appeals from the district court’s judgment in favor of Navy Federal
Credit Union ("Navy Federal") on the EEOC’s Title VII retaliation
claim concerning Donna Santos, a former Navy Federal supervisor.
In its complaint in the Eastern District of Virginia (the "Complaint"),
the EEOC alleged that Navy Federal had illegally discharged Santos
for opposing what she reasonably believed to be the unlawful treat-
ment of one of her subordinates, Tammy Simms. Following extensive
discovery proceedings, the district court awarded summary judgment
to Navy Federal, concluding that the EEOC’s evidence of retaliation
was insufficient and that its claim was also barred by laches. See
EEOC v. Navy Fed. Credit Union, No. CA-03-543-1 (E.D. Va. June
18, 2004) (the "Opinion"). As explained below, we vacate and
remand.
I.
A.
Navy Federal, a credit union serving employees of the Department
of the Navy and their families, is headquartered in Vienna, Virginia.1
1
Because this appeal is from an award of summary judgment to Navy
Federal, we are obliged to present and assess the relevant facts in the
light most favorable to the EEOC, the non-moving party. See Seabulk
Offshore, Ltd. v. Am. Home Assurance Co., 377 F.3d 408, 418 (4th Cir.
2004). However, because it is relevant to our analysis under the McDon-
nell Douglas burden-shifting framework, see Part IV.A, we also set forth
evidence regarding Ms. Santos’s supervisory skills that is favorable to
Navy Federal.
EEOC v. NAVY FEDERAL CREDIT UNION 3
In April 1995, Donna Santos began working as a supervisor in Navy
Federal’s Staffing Section, a position entailing her oversight of four
subordinates.2 During her three-month probationary period, Santos
received positive performance appraisals, and, in January 1996, she
was recognized in an internally circulated e-mail message for "a won-
derful idea to help us enhance software support." J.A. 40.3
In March 1996, however, representatives of Navy Federal’s
Employee Relations Section received complaints from three of San-
tos’s subordinates about her performance, including that she was
incompetent and error-prone, and that there was a lack of communica-
tion, training, and leadership in the Staffing Section. These three
employees (including Tammy Simms) also complained that Santos
had failed to intervene in issues involving Dianne Snably (the fourth
Santos subordinate), and that Santos and Snably seemed to have
"teamed" against them. J.A. 77-81. They reported their complaints to
the Employee Relations Section on March 7, 14, and 15, 1996.
Notwithstanding these complaints, Santos, on March 24, 1996,
received a merit salary increase, and, on April 9, 1996, she received
an annual performance appraisal rating her as "highly successful" or
"successful" in all scored categories.4 In this appraisal, Santos was
complimented for, inter alia, "learning to address and resolve con-
2
According to the EEOC, Santos is now known as "Moira Flanagan."
However, we refer to her as "Donna Santos," or simply "Santos," as did
the district court.
3
Citations to "J.A. ___" refer to the contents of the Joint Appendix
filed by the parties in this proceeding.
4
The April 9, 1996 performance appraisal of Santos reflects that it was
prepared on March 14, 1996. In this appraisal, Santos was scored in the
following categories: job knowledge; productivity; accuracy; dependabil-
ity on the job; work methods; problem solving; interpersonal skills; com-
munication skills; work habits; attendance; leadership; organizing and
planning; controlling operations; employee relations; employee recogni-
tion and development; and evaluating subordinates. The highest possible
rating in all of these categories (except attendance) was "outstanding,"
followed by "highly successful," "successful," "needs improvement," and
"unsuccessful." For attendance, the highest available rating was "success-
ful."
4 EEOC v. NAVY FEDERAL CREDIT UNION
flicts among the staff immediately instead of allowing them to fester";
being "intricately involved in motivating the staff"; "delegat[ing]
effectively and assign[ing] the workflow so that deadlines and objec-
tives are met"; "deal[ing] equitably with the group"; and "continu[ing]
to improve her organizational and planning skills." J.A. 57. It was
also recognized that "[t]he Staffing Section continues to improve their
team work under [Santos’s] direction." Id.
After April 1996, assessments of Santos’s performance became
less laudatory. On July 29, 1996, Santos’s immediate supervisor, Jan
Herman, met with Santos to discuss three specific issues — failure to
post a job vacancy announcement, telephone usage, and coverage of
the Staffing Section during lunch. J.A. 86. Then, on August 23, 1996,
Herman documented Santos’s performance for the month, observing
that she needed improvement in the areas of leadership and control-
ling operations. In support of this assessment, Herman noted the fol-
lowing: Santos was absent from work on the day her Section
distributed an important booklet, leaving no one to address problems
relating thereto; she attended a computer software class when her Sec-
tion was already short-staffed; on two occasions, significant mistakes
were found in paperwork that had been approved by a subordinate to
whom Santos had delegated that responsibility; on three occasions,
Staffing Section employees were observed being idle; and some of
Santos’s subordinates were regularly five to ten minutes late to work
in the morning, took overly long breaks and lunches, closed their
work stations early, and made excessive personal phone calls. Her-
man concluded that Santos "needs to pay attention to her staff, what
is getting done, and ensuring that the [Staffing] Section is running
smoothly and according to policy at all times." J.A. 87. Herman also
remarked that Santos "is more interested in her own training and
development in PC applications than in her job as [a Navy Federal]
supervisor." Id. At the time of these observations, Herman considered
conducting a "special review" of Santos (which presumably would
have involved a more formal performance appraisal and constituted
a more grievous mark on Santos’s employment record). By early Sep-
tember 1996, however, Herman had decided against such a review,
because Santos had improved her job performance. J.A. 96.
B.
In 1995, Tammy Simms was promoted by Navy Federal to a posi-
tion in the Staffing Section, which placed her under Santos’s supervi-
EEOC v. NAVY FEDERAL CREDIT UNION 5
sion. Over time, Santos criticized Simms’s performance in various
respects, but complimented it in others. Simms perceived Santos’s
criticism of her as unfair and complained that Santos overburdened
her with an inequitable workload. Other Staffing Section employees,
however, believed that Santos sometimes gave special treatment to
Simms by, among other things, excusing Simms from physical tasks
because of a difficult pregnancy, and adjusting her work schedule to
accommodate transportation-related limitations.
Simms was one of the three Santos subordinates who complained
in March 1996 about Santos’s lack of effective leadership, including
her failure to rein in their co-worker Snably. The record reveals that
Snably was at times uncivil — and worse — to all of her co-workers,
but perhaps especially to those who were African-American women,
including Simms and Barbara Stephens.5 Simms reported to Santos on
March 12, 1996, and then to the Employee Relations Section on
March 14, 1996, that she believed Snably was hiding her paperwork
"to set her up" and had done the same to Stephens. J.A. 79, 500-01.
Although Santos expressed her dissatisfaction with Snably to Simms,
Simms concluded that Santos was an ineffective supervisor and was
thereafter unwilling to go to Santos about problems with Snably.
Simms also came to suspect that Santos and others were prejudiced
against Simms.
In late August through early September 1996, a series of meetings
were held among, in various configurations, Simms, Santos, Snably,
Herman, and representatives of the Employee Relations Section. Dur-
ing these meetings, the participants discussed both positive and nega-
tive aspects of Simms’s performance, her ongoing complaints about
Santos and Snably, and Simms’s concerns about possible racial dis-
crimination against her and Stephens. These meetings failed to
resolve the tensions in the Staffing Section or convince Simms that
she was being treated fairly.
5
Prior to March 1996, Stephens had accused, among others, Santos and
Snably (who are white) of racial discrimination. By March 1996, Ste-
phens had been discharged by Navy Federal, and her allegations are not
directly at issue in this proceeding. However, Stephens’s experiences
with Snably contributed to Simms’s later suspicions that she, too, was
the target of racial discrimination in the workplace.
6 EEOC v. NAVY FEDERAL CREDIT UNION
C.
On September 16, 1996, Simms filed an internal "Request for Res-
olution Form," with the Employment Relations Section. In it she
alleged race, color, sex, and age discrimination, and detailed numer-
ous instances of alleged unfair treatment by Santos, Snably, and oth-
ers. J.A. 499-510. Shortly thereafter, according to Santos and the
EEOC, Navy Federal devised a plan to terminate Simms in retaliation
for her discrimination complaint, and to cover up its reasons for the
discharge in order to protect itself from liability in subsequent litiga-
tion. The EEOC maintains that Santos opposed this retaliation scheme
— a position that resulted in her suspension and, ultimately, her dis-
charge from Navy Federal.
By the time Simms lodged her internal complaint, Herman had
considered conducting a "special review" of Santos, but decided
against it in view of Santos’s improved performance. Between the
time that Simms filed her complaint and the time that Santos learned
of Navy Federal’s retaliation scheme, aspects of Santos’s perfor-
mance were assessed on two occasions. On September 19, 1996, Her-
man observed a problem with Santos and Simms taking a lunch break
at the same time, prompting her to warn Santos not to make it a con-
tinuing practice. On a more positive note, Personnel Director Ellen
Yarborough sent a handwritten note to Santos on October 4, 1996,
thanking her for her "hard work in developing a new application for
the annual financial plan [and] for completing all the personnel bud-
get requirements." J.A. 41. Yarborough remarked: "We appreciate
your dedication to getting it done. Great job!" Id. Santos asserts that
she received Yarborough’s note, along with a cash bonus, as part of
the "Directors award" given to one employee annually in the Human
Resources Division for outstanding contributions to the Division. J.A.
122.
According to Santos, she shortly thereafter learned of Navy Feder-
al’s scheme to retaliate against Simms. The scheme was two-fold: (1)
to give Simms favorable performance evaluations, which could be
used to defend Navy Federal’s actions in subsequent litigation; and
(2) to heighten scrutiny of Simms’s activity in order to discover an
objective and seemingly legitimate basis for her termination.
EEOC v. NAVY FEDERAL CREDIT UNION 7
On October 9, 1996, a meeting was held with Santos, Herman, and
two representatives of the Employee Relations Section, including the
head of that Section, Angela Culbertson. Culbertson was angry about
Simms’s allegations of discrimination and declared that she would
"get Tammy [Simms] on principle." J.A. 118. Culbertson instructed
Santos to heighten surveillance of Simms’s work habits, including
compiling accuracy reports and documenting the quantity of work
that Simms produced. J.A. 216. Santos knew that the oversight
responsibilities would fall primarily to Snably, the subject of many of
Simms’s complaints. She objected to the plan because she felt that it
would be unfair to Simms. J.A. 118. Santos proposed that she oversee
Simms’s work instead, but Culbertson rejected her plan. J.A. 121.
Shortly thereafter Santos participated in a conference call between
Culbertson and Navy Federal’s outside counsel. While discussing
Simms’s discrimination complaint, the attorney for Navy Federal sug-
gested that Culbertson "just fire the bitch." J.A. 118. The attorney also
warned Culbertson that any negative evaluations of Simms’s perfor-
mance could be perceived as retaliatory. J.A. 120. Santos was then
asked whether Simms was likely to file a retaliation claim if she was
terminated. When Santos responded affirmatively, she was asked to
leave the meeting. Santos later learned that Culbertson had decided
to give Simms favorable performance assessments while efforts were
made to discover an objective basis for terminating Simms, such as
payroll fraud. J.A. 216.
The week before October 25, 1996, Santos was determined to be
"well qualified" for a promotion in the Human Resources Division.
J.A. 118. Nevertheless, on October 25, Santos received a "special
review," which covered the period from May 15, 1996, to October 15,
1996. This review downgraded Santos’s performance appraisal in
numerous areas relating to her supervisory and management duties.
J.A. 60-66.6 In conjunction with the review, Santos was placed on
6
In her "special review" of October 25, 1996, Santos was scored as
"needs improvement" in various areas in which she had scored "success-
ful" or "highly successful" in her performance assessment of April 9,
1996, including interpersonal skills, communication skills, leadership,
controlling operations, and evaluating subordinates. In the "special
review," Santos was also chastised for, among other things, failing to
"maintain[ ] control of the section," taking "a ‘hands off’ approach to
supervising her employees," and failing "to communicate decisions
clearly and positively."
8 EEOC v. NAVY FEDERAL CREDIT UNION
probation for 180 days, through approximately April 25, 1997. She
retained her usual supervisory responsibilities during that period.
In November 1996, Santos prepared several proposed evaluations
of Simms’s performance, all of which concluded that Simms’s perfor-
mance needed improvement. Culbertson rejected each of these assess-
ments because they were too negative, and she eventually took it upon
herself to prepare a substantially more positive evaluation that rated
Simms "successful" or "highly successful" in all scored categories.
J.A. 121, 495-98. When asked by Herman to sign Culertson’s evalua-
tion of Simms, Santos refused to do so, being unwilling to endorse an
evaluation she believed to be fabricated. Herman strongly urged San-
tos to sign the evaluation and warned her that if she failed to do so
her "probationary period would not go well for [her]" and that she
was "doing [herself] in." J.A. 121. Santos nevertheless refused to sign
the evaluation, prompting Herman to endorse it instead.
On January 4, 1997, Herman called Santos into her office and
advised her to begin looking for a different job. Although Navy Fed-
eral’s usual "special review" policy was to place the targeted individ-
ual on probation for 180 days and offer suggestions for improvement
during that period, Herman advised Santos that there was "nothing
[she was] going to be able to do to change things." J.A. 117. On Feb-
ruary 6, 1997, Herman prepared a "special review" of Santos for the
period from October 15, 1996 to February 6, 1997, further downgrad-
ing her scores and recommending termination for an "inability to
improve performance of supervisory responsibilities to a successful
level." J.A. 71. On February 14, 1997, Santos was terminated.
II.
On March 25, 1997, Simms resigned from Navy Federal and filed
a discrimination complaint against it in the Fairfax County Human
Rights Commission (the "FCHRC"). Two days later, on March 27,
1997, Simms’s complaint was cross-filed with the EEOC, pursuant to
a worksharing agreement between the FCHRC and the EEOC (the
"Worksharing Agreement"). On May 15, 1997, Navy Federal initially
responded to Simms’s complaint in the FCHRC. In its response and
subsequent correspondence, Navy Federal disputed Simms’s charge
of discrimination on several grounds, including that she had received
EEOC v. NAVY FEDERAL CREDIT UNION 9
a "successful" performance appraisal from Herman in January 1997.
The FCHRC actively investigated Simms’s charge until October 28,
1997, when Navy Federal declined to make a settlement offer to
Simms. Thereafter, the FCHRC investigator assigned to the Simms
case essentially ignored it while dealing with personal issues, only
corresponding with Navy Federal in March 1999 with requests to
interview several of its employees. Finally, the FCHRC assigned a
new investigator to the Simms case in the fall of 2000.
On February 6, 2001, the FCHRC issued a ruling on Simms’s dis-
crimination complaint, finding sufficient evidence of retaliation, but
insufficient evidence of race or national origin discrimination. Subse-
quently, on March 1, 2001, the FCHRC referred the Simms case to
the EEOC to ascertain whether it wished to issue a cause finding, not-
ing that the FCHRC had lost jurisdiction, as of March 24, 1999, to
conduct a public hearing on Simms’s complaint. Four months later,
on July 6, 2001, the EEOC issued its own determination, agreeing
with the FCHRC’s conclusions and additionally finding reasonable
cause to believe that "Simms’s supervisor" (later identified as Santos)
was the victim of retaliation.7
Settlement negotiations then commenced between the EEOC (act-
ing on behalf of Simms and Santos) and Navy Federal. Eventually,
Simms requested a right-to-sue letter so that she could pursue a fed-
eral court action on her own.8 Meanwhile, settlement negotiations
7
Santos has never filed an administrative charge of discrimination
against Navy Federal. In denying Navy Federal’s initial motion for sum-
mary judgment, however, the district court concluded that the EEOC’s
investigation of retaliation against Santos fell within the reasonable
scope of its investigation into the allegations made by Simms. EEOC v.
Navy Fed. Credit Union, No. 03-543, at 5-7 (E.D. Va. July 11, 2003).
That ruling is not contested in this appeal.
8
On June 24, 2002, Simms sued Navy Federal in the Eastern District
of Virginia, asserting claims of racial discrimination and retaliation. The
district court entered judgment in favor of Navy Federal on Simms’s dis-
crimination claim, but denied Navy Federal’s motion for summary judg-
ment on the claim of retaliation. Simms v. Navy Fed. Credit Union, No.
02-0900-A (E.D. Va. Aug. 27, 2002). The parties thereafter settled the
matter.
10 EEOC v. NAVY FEDERAL CREDIT UNION
continued between the EEOC (now acting on behalf of Santos only)
and Navy Federal. The last of those negotiations occurred between
September and November of 2002. Finally, on April 28, 2003, the
EEOC initiated this proceeding on Santos’s behalf in the Eastern Dis-
trict of Virginia. In its Complaint, the EEOC alleged that Navy Fed-
eral had retaliated against Santos in contravention of section 704(a)
of Title VII, 42 U.S.C. § 2000e-3(a).
On June 13, 2003, Navy Federal sought summary judgment on
laches grounds, which the court denied on July 11, 2003. On Decem-
ber 5, 2003, following discovery, Navy Federal renewed its motion,
asserting the following: (1) that EEOC’s evidence of retaliation was
insufficient; and (2) that the EEOC’s claim was barred by laches. By
its Opinion of June 18, 2004, the district court granted summary judg-
ment to Navy Federal both on the merits and on the grounds that
laches barred the EEOC’s claim. Opinion at 2. The EEOC has filed
a timely notice of appeal, and we possess jurisdiction pursuant to 28
U.S.C. § 1291.
III.
We review de novo an award of summary judgment, viewing the
facts and inferences drawn therefrom in the light most favorable to
the non-moving party. See Seabulk Offshore, Ltd. v. Am. Home Assur-
ance Co., 377 F.3d 408, 418 (4th Cir. 2004). Such an award "is appro-
priate only ‘if the pleadings, depositions, answers to interrogatories,
and admissions on file, together with the affidavits, . . . show that
there is no genuine issue of material fact and that the moving party
is entitled to a judgment as a matter of law.’" Id. (quoting Fed. R. Civ.
P. 56(c)) (alteration in original).
Because the equitable balancing required in a laches determination
is committed to the discretion of the district court, we may reverse
such a ruling only if such discretion was abused. See White v. Daniel,
909 F.2d 99, 102 (4th Cir. 1990). By definition, a court "abuses its
discretion when it makes an error of law." United States v. Ebersole,
411 F.3d 517, 526-27 (4th Cir. 2005) (internal quotation marks omit-
ted).
EEOC v. NAVY FEDERAL CREDIT UNION 11
IV.
By this appeal the EEOC makes two contentions: (1) that the dis-
trict court erred in ruling that the EEOC failed to present sufficient
evidence of retaliation; and (2) that the court abused its discretion in
ruling that laches barred the EEOC’s claim on behalf of Santos. We
assess each of these contentions in turn.
A.
In assessing the EEOC’s retaliation claims, we are obliged to begin
with the language of the relevant statutory provisions. In pertinent
part, section 704(a) of Title VII prohibits an employer from taking an
adverse employment action against any employee "because he has
opposed any practice made an unlawful employment practice under
this subchapter." Title VII § 704(a), 42 U.S.C. § 2000e-3(a). Under
the burden-shifting framework first formulated by the Supreme Court
in McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973), a plain-
tiff bears the initial burden of establishing a prima facie case of retali-
ation. See Laughlin v. Metro. Wash. Airports Auth., 149 F.3d 253, 258
(4th Cir. 1998) (citing McDonnell Douglas, 411 U.S. at 802-04).
Once this burden is carried, the burden shifts to the defendant, who
is obliged to articulate a legitimate, non-retaliatory justification for
the adverse employment action. See id. If the defendant carries this
burden, the onus is on the plaintiff to then demonstrate that the non-
retaliatory reason advanced by the defendant is a mere pretext. See
id.; see also Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S.
133, 143 (2000).
By its Opinion, the district court concluded that the EEOC had
failed to establish a prima facie case of retaliation against Navy Fed-
eral, and that the EEOC had failed to demonstrate that the non-
retaliatory reason advanced by Navy Federal was a pretext. Opinion
at 7-10. As explained below, we are unable to agree with these con-
clusions.
1.
In order to establish a prima facie case of retaliation, a plaintiff
must prove three elements: (1) that she engaged in a protected activ-
12 EEOC v. NAVY FEDERAL CREDIT UNION
ity; (2) that her employer took an adverse employment action against
her; and (3) that there was a causal link between the two events. See
Von Gunten v. Maryland, 243 F.3d 858, 863 (4th Cir. 2001) (citing
Beall v. Abbott Labs., 130 F.3d 614, 619 (4th Cir. 1997)). Only the
first element of this test is at issue here. The district court concluded
that the EEOC had failed to establish that Santos had engaged in a
protected activity. The court reached this result for two reasons: (a)
because Santos had not "opposed" any action taken by Navy Federal;
and (b) because Santos had no reasonable basis for believing that any
action taken by Navy Federal was unlawful. Opinion at 6-9.
a.
Under the applicable legal principles, in the context of a retaliation
claim, a "protected activity" may fall into two categories, opposition
and participation. Only one of these categories — opposition — is rel-
evant here. See Laughlin, 149 F.3d at 259 (citing 42 U.S.C. § 2000e-
3(a)). As we have recognized, protected oppositional activities may
include "staging informal protests and voicing one’s own opinions in
order to bring attention to an employer’s discriminatory activities,"
id., as well as "complain[ts] . . . about suspected violations," Bryant
v. Aiken Reg’l Med. Ctrs., Inc., 333 F.3d 536, 543-44 (4th Cir. 2003).
In concluding that Santos did not oppose any of Navy Federal’s
actions toward Simms, the district court emphasized that Santos was
one of the primary objects of Simms’s internal discrimination com-
plaint. Opinion at 7. But the unlawful activity that Santos claims to
have opposed was not the discrimination alleged by Simms, but rather
Navy Federal’s acts of retaliation against Simms for complaining of
discrimination. According to Santos, Navy Federal intended to termi-
nate Simms in retaliation for her allegations of discrimination, and to
cover up its improper reasons for her termination with ostensibly
objective grounds. The evidence reveals that Santos opposed this
scheme. Specifically, when Culbertson gave primary supervisory
authority over Simms to Snably, Santos objected, believing the trans-
fer of authority from her to Snably to be a component of Navy Feder-
al’s improper retaliatory scheme. More importantly, when Santos was
asked to sign what she believed to be a misleading but favorable eval-
uation of Simms’s work, Santos refused to do so because of her
understanding that Navy Federal intended to use the evaluation to
EEOC v. NAVY FEDERAL CREDIT UNION 13
9
defend itself from future litigation by Simms. This evidence, show-
ing that Santos objected to Snably’s supervision of Simms and that
she refused to approve the misleading evaluation of Simms’s perfor-
mance, precluded a ruling in favor of Navy Federal on the question
of opposition.
b.
The district court further concluded, however, that even if Santos
had opposed actions taken by Navy Federal, she could not have rea-
sonably believed that those actions were in violation of Title VII.
Opinion at 7. We have recognized that section 704(a) protects activity
in opposition not only to employment actions actually unlawful under
Title VII but also employment actions an employee reasonably
believes to be unlawful. See United States ex rel. Wilson v. Graham
County Soil & Water Conservation Dist., 367 F.3d 245, 255 (4th Cir.
2004), vacated on other grounds, 125 S. Ct. 2444 (2005); see also
Nealon v. Stone, 958 F.2d 584, 590 (4th Cir. 1992). In its ruling, the
district court reasoned that the increased surveillance and scrutiny of
Simms’s work habits were merely "administrative actions" that could
not reasonably be adverse employment actions. Opinion at 8. It fur-
ther held that Santos could not reasonably have believed that Navy
Federal’s efforts to evaluate Simms more favorably than she deserved
were adverse to Simms because favorable treatment is "[b]y defini-
tion" not adverse. Id.
Unfortunately, the district court’s analysis on this point took too
narrow a view of Navy Federal’s actions relating to Simms. Assessing
the evidence of Navy Federal’s actions towards Simms as a whole,
Santos held a reasonable belief that Navy Federal was unlawfully
retaliating against Simms. The series of relevant events, recounted by
Santos in her testimony before the FCHRC and in her deposition here,
shows that her superiors at Navy Federal set in motion a plan to ter-
minate Simms in retaliation for her complaints of racial discrimina-
tion, while at the same time seeking to conceal their improper motives
under the guise of objective criteria.
9
Indeed, when Simms first filed her complaint against Navy Federal in
the FCHRC, the misleading evaluation that Culbertson prepared and that
Santos refused to sign figured prominently in Navy Federal’s defense.
14 EEOC v. NAVY FEDERAL CREDIT UNION
Shortly after Simms filed her discrimination complaint, Santos
attended a meeting where Culbertson became angry and asserted that
she would "get Tammy [Simms] on principle." Shortly thereafter San-
tos participated in the conference call where Navy Federal’s lawyer
suggested that they "just fire the bitch." During this conference call,
the attorney also advised Culbertson that any unfavorable evaluations
of Simms’s performance could potentially support a retaliation claim
by Simms. Culbertson and others at Navy Federal then developed a
plan under which Simms would receive favorable evaluations while
her actions were scrutinized to discover an objective basis for her dis-
charge, such as payroll fraud, which would insulate Navy Federal
from civil liability. Navy Federal was not, in this context, doing
Simms a favor by positively assessing her job performance. The
heightened scrutiny and favorable evaluations were thus part and par-
cel of its larger plan to fire Simms for unlawful reasons and to cover
up those reasons with pretextual charges. When Santos objected to the
added surveillance and refused to sign the misleading evaluation of
Simms, she therefore reasonably believed that she was opposing
unlawful retaliation. In these circumstances, the EEOC has presented
evidence sufficient to establish a prima facie case of unlawful retalia-
tion against Santos.
2.
As explained above, when a plaintiff has established a prima facie
case of retaliation, the burden shifts to the defendant to articulate a
legitimate, non-retaliatory reason for the adverse employment action.
See Reeves, 530 U.S. at 143; Laughlin, 149 F.3d at 258 (citing
McDonnell Douglas, 411 U.S. at 802-04). If the defendant carries this
burden, the presumption of retaliation falls, and the plaintiff bears the
ultimate burden of proving that the defendant’s non-retaliatory reason
for the adverse employment action was pretextual. See id.10
In ruling in favor of Navy Federal on the pretext issue, the district
court concluded that the EEOC had "presented no evidence to directly
10
Navy Federal sustained its burden of articulating a legitimate, non-
retaliatory reason for its adverse employment action against Santos by
presenting evidence that it had terminated her because she lacked super-
visory skills.
EEOC v. NAVY FEDERAL CREDIT UNION 15
rebut Defendant’s evidence that Santos’s supervisory skills were defi-
cient." Opinion at 10. Navy Federal did present evidence that, despite
Santos’s technical skills, she was not considered a capable supervisor.
During March 1996, three of Santos’s subordinates complained of
problems within Santos’s Section. Indeed, one complained that there
was a lack of communication, training, and leadership in the Staffing
Section. Another complained that she was receiving inadequate train-
ing and that Santos had lost control of her Section. In July 1996, Her-
man, Santos’s supervisor, met with her to discuss various
performance issues, and in August 1996, Herman documented that
Santos needed improvement in the areas of leadership and controlling
operations.
The summary judgment record, however, also contains evidence
demonstrating that Santos’s supervisors were pleased with her overall
job performance and that her opposition to the plan to terminate
Simms was the actual basis for her discharge. In April 1996, shortly
after her subordinates complained of her incompetence and lack of
supervisory skills, Santos received a positive annual performance
appraisal, which praised, inter alia, her achievements in resolving
interpersonal conflicts in her Section, motivating her staff, and "deal-
[ing] equitably with the group." Although by September 1996 Her-
man had registered complaints about certain aspects of Santos’s
performance, Herman decided against a "special review" because she
believed that Santos’s performance had improved. Furthermore, in
October 1996, Navy Federal presented Santos with the Human
Resources Division’s "Directors award," an annual honor accompa-
nied by a cash bonus, and given in recognition of outstanding contri-
butions to the Division.11 Finally, even after Santos opposed Navy
Federal’s retaliation scheme against Simms, Santos was deemed "well
qualified" for a promotion.
Not only is the evidence in conflict regarding Santos’s job perfor-
mance, but the EEOC also presented evidence from which a jury
11
Navy Federal contests the evidence of the "Director’s award," assert-
ing that Santos received only a handwritten note of thanks for certain
technical work she had performed. In the posture of this appeal, however,
we are obliged to accept the facts in the light most favorable to the
EEOC.
16 EEOC v. NAVY FEDERAL CREDIT UNION
could readily infer that the actual reason for her discharge by Navy
Federal was her opposition to its treatment of Simms.12 The record
reveals that, just after Santos expressed opposition to Navy Federal’s
scheme to retaliate against Simms, Santos was given a "special
review," which was significantly harsher than her previous evaluation
of April 9, 1996. At the same time, Santos was also placed on proba-
tion. In regard to the misleading Simms evaluation, Culbertson
repeatedly rejected as overly negative Santos’s efforts to fairly assess
Simms’s performance before completing the Simms evaluation her-
self. Santos’s refusal to approve Culbertson’s misleading evaluation
of Simms was met sternly by Herman, who warned Santos that she
was "doing herself in." Shortly thereafter, Herman advised Santos that
she should be searching for new employment. When Santos asked
what steps she could take to avoid termination, Herman responded
that there was nothing she could do, despite the fact that Navy Feder-
al’s general probation policy was to offer suggestions for improve-
ment to probationary employees such as Santos. Whatever Santos’s
skills as a supervisor, the evidence, viewed in the proper light, war-
rants the inference that Santos was fired because of her opposition to
what she reasonably perceived to be a concerted effort by Navy Fed-
eral to terminate Simms for unlawful reasons.13 As a result, the district
12
We observe that this evidence (that Santos was actually fired for
opposing the retaliation scheme against Simms) best supports Santos’s
claim of pretext. To overcome the burden of proving that the reason for
termination advanced by Navy Federal was a pretext, Santos was not
necessarily required to prove that she was a good supervisor. She needed
only to prove that her lack of skill as a supervisor was not the cause of
her termination. See Price v. Thompson, 380 F.3d 209, 212 (4th Cir.
2004) ("[T]he plaintiff can prove pretext by showing that the [defen-
dant’s] explanation is unworthy of credence or by offering other forms
of circumstantial evidence sufficiently probative of [retaliation].") (inter-
nal quotation marks omitted).
13
Indeed, it appears that Santos’s belief that Navy Federal was retaliat-
ing against Simms was not only reasonable but correct as well. The evi-
dence of Navy Federal’s scheme clearly warrants the conclusion that
Navy Federal was retaliating against Simms. Cf. LaFond v. Gen. Physics
Serv. Corp., 50 F.3d 165, 175-76 (2d Cir. 1995) (reversing summary
judgment in favor of defendant-employer where plaintiff-employee pre-
sented evidence that defendant’s "stated reason for discharging him was
EEOC v. NAVY FEDERAL CREDIT UNION 17
court’s ruling in favor of Navy Federal on the pretext issue was erro-
neous.
B.
As an alternative ground for its summary judgment award to Navy
Federal, the district court concluded that the doctrine of laches bars
the EEOC’s claim. In so ruling, it based its decision wholly on the
delay by the FCHRC while the matter was pending in Fairfax County.
Opinion at 11-12. Under our precedent, the equitable defense of
laches requires a defendant to prove "(1) lack of diligence by the
party against whom the defense is asserted, and (2) prejudice to the
party asserting the defense." White v. Daniel, 909 F.2d 99, 102 (4th
Cir. 1990) (internal quotation marks omitted). The first element of
laches, lack of diligence, is satisfied where a plaintiff has unreason-
ably delayed in pursuing his claim. See id. On this point, the court
observed that, because the FCHRC had proceeded so slowly, the
EEOC "was unable to adopt the FCHRC’s findings and move forward
until July 2001," over four years after Simms filed her initial com-
plaint. Opinion at 12. The "unreasonable delay" identified by the
court was the failure of the FCHRC to timely investigate Simms’s
claim. The court thus attributed to the EEOC the delay caused by the
FCHRC in concluding that laches bars the claim asserted in the
EEOC’s Complaint.14 As explained below, the court erred in imputing
the actions of the FCHRC to the EEOC.
a pretext concealing a retaliatory motive"). Indeed, after Simms filed her
complaint with the FCHRC, both the FCHRC and the EEOC concluded
that Simms’s retaliation complaint had merit. And, when Simms pursued
her claims against Navy Federal in federal court, the district court denied
summary judgment to Navy Federal on Simms’s retaliation claim. Simms
v. Navy Fed. Credit Union, No. 02-0900-A (E.D. Va. Aug. 27, 2002).
14
Although the district court, by its Opinion of June 18, 2004, granted
judgment in favor of Navy Federal on the laches issue, it had rejected a
laches claim of Navy Federal’s in its earlier ruling of July 11, 2003.
EEOC v. Navy Fed. Credit Union, No. 03-543, at 8 (E.D. Va. July 11,
2003) ("[I]t does not appear that the claim was neglected or abandoned
by the [FCHRC] or that their efforts were dilatory or the result of unrea-
sonable procrastination."). In fairness to the district court, its second rul-
ing was made after discovery revealed more details concerning the
FCHRC’s handling of the Simms matter.
18 EEOC v. NAVY FEDERAL CREDIT UNION
In support of the district court’s ruling on this issue, Navy Federal
maintains that an agency relationship exists between the EEOC and
the FCHRC. Based on our analysis of the pertinent statutory provi-
sions, however, the two agencies operate with substantial indepen-
dence. Title VII’s provisions regarding "FEP" or "deferral" agencies
such as the FCHRC,15 including sections 706(c)-(e) and 709(b)-(d).
See 42 U.S.C. §§ 2000e-5(c) to (e), §§ 2000e-8(b) to (d). These provi-
sions are best understood as creating a system of "cooperative federal-
ism," under which, in the interests of comity, the EEOC and state and
local authorities share primary responsibility to enforce the civil
rights laws. See, e.g., Phillip J. Weiser, Towards a Constitutional
Architecture for Cooperative Federalism, 79 N.C. L. Rev. 663, 671
(2001) ("[R]eal authority under [cooperative federalism] regimes
often rests with the states which ultimately exercise considerable dis-
cretion in making and implementing policy."). Sections 709(c) and (d)
of Title VII, for example, grant deferral agencies exclusive jurisdic-
tion for at least sixty days to act upon charges arising within their
respective jurisdictions. 42 U.S.C. § 2000e-5(c) to (d). The courts
have interpreted those provisions as being designed to provide the
deferral agencies with the opportunity to resolve discrimination
claims without federal intervention. See EEOC v. Commercial Office
Prods. Co., 486 U.S. 107, 110-11 (1988) (citing both Supreme Court
decisions and Title VII’s legislative history in support of this proposi-
tion); Puryear v. County of Roanoke, 214 F.3d 514, 517 (4th Cir.
2000) ("The purpose of the presumptive sixty-day deferral period is
comity — to provide states and localities the first opportunity to com-
bat discrimination, free from premature federal intervention."); se
also Love v. Pullman Co., 404 U.S. 522, 526 (1972)). These under-
standings rest on the premise that deferral agencies such as the
FCHRC enjoy a substantial degree of autonomy and discretion.
15
A "FEP" (an acronym for "fair employment practices") or "deferral"
agency is a state or local agency that enforces state and local civil rights
laws. See Title VII § 706(c), 42 U.S.C. § 2000e-5(c). The jurisdiction of
such agencies overlaps that of the EEOC. See 29 C.F.R. § 1601.13(a)(3).
In the spirit of limiting federal intrusion on state functions, such an
agency enjoys substantial independence from the EEOC, but only if the
jurisdiction in which the agency is organized has "a fair employment
practice law" that the agency is empowered to enforce. See 29 C.F.R.
§ 1601.70(a). The FCHRC is such a deferral agency. See 29 C.F.R.
§ 1601.80.
EEOC v. NAVY FEDERAL CREDIT UNION 19
In further support of its contention that the EEOC and the FCHRC
enjoy an agency relationship, Navy Federal relies on section II.A of
the Worksharing Agreement, under which each agency designates the
other as its agent "for the purpose of receiving and drafting charges."
Yet, the Worksharing Agreement, when viewed as a whole, is consis-
tent with our assessment of the statutory framework for the relation-
ship between the EEOC and the FCHRC. The overall thrust of the
Worksharing Agreement, as its title suggests, is to divide the work-
load on proceedings over which the two agencies possess common
jurisdiction. Section III.A.1 of the Worksharing Agreement lists those
matters that the EEOC is required to initially process, while section
III.A.2 lists those committed to the authority of the FCHRC. The
independence that the two agencies retain to process and investigate
their own charges is made evident by section II.C of the Agreement,
which provides that "[n]ormally, once an Agency begins an investiga-
tion, it resolves the charge." Indeed, the designation of each agency
as an agent of the other for the purpose of receiving and drafting
charges is simply a matter of convenience for the charging party.
Under section II.A, the receipt by either agency of a charge automati-
cally initiates the proceeding for the purposes of Title VII’s timing
provisions, and the charges are freely transferred between the two
agencies. The Worksharing Agreement, therefore, does not alter the
fact that the EEOC and the FCHRC operate with substantial indepen-
dence and autonomy.16
The autonomy enjoyed by the EEOC and the FCHRC controls our
assessment of the laches issue. The doctrine of laches requires that a
party demonstrate a "lack of diligence by the party against whom the
defense is asserted." White, 909 F.2d at 102 (emphasis added) (inter-
nal quotation marks omitted). Absent a showing that the delaying
entity is the agent or alter ego of the party against whom laches is
asserted, we are unable to penalize the latter (the EEOC) for the
actions of the former (the FCHRC). By attributing the FCHRC’s
delay to the EEOC for laches purposes, the district court made a legal
16
That the EEOC and the FCHRC operate autonomously is further
demonstrated by their handling of the Simms matter. After the FCHRC
referred the case to the EEOC, the EEOC, rather than simply adopting
the FCHRC’s findings, conducted its own investigation of the matter and
decided to pursue a claim on behalf of Santos as well as Simms.
20 EEOC v. NAVY FEDERAL CREDIT UNION
error, constituting an abuse of discretion. See Ebersole, 411 F.3d at
526-27.17
V.
Pursuant to the foregoing, we vacate the judgment in favor of Navy
Federal and remand for such further proceedings as may be appropri-
ate.
VACATED AND REMANDED
17
Because the district court erred in resolving the issue of whether the
EEOC unreasonably delayed, we need not reach the issue of whether
Navy Federal was unduly prejudiced by any delay.