Norma J. Curby v. Solutia, Inc. ( 2003 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 03-1545
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Norma J. Curby, *
*
Appellant, *
* Appeal from the United States
v. * District Court for the
* Eastern District of Missouri.
Solutia, Inc., a Delaware Corporation, *
*
Appellee. *
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Submitted: September 10, 2003
Filed: December 15, 2003
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Before MORRIS SHEPPARD ARNOLD, BEAM, and BYE, Circuit Judges.
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BYE, Circuit Judge.
Norma Curby appeals the district court's1 grant of summary judgment on
several employment-related claims she brought against her former employer, Solutia,
Inc. We affirm.
1
The Honorable Charles A. Shaw, United States District Judge for the Eastern
District of Missouri.
I
This litigation stems from a "notice of termination" Curby submitted to Solutia
under the mistaken belief she had a right to severance benefits pursuant to a golden
parachute agreement she signed in February 1998 (the 1998 agreement). Curby
submitted the notice a short time after Solutia reached an agreement with FMC
Corporation to combine the companies' phosphorous and derivatives (P&D)
divisions. Because the joint venture would result in the elimination of Curby's
position as Vice President/General Manager (VP/GM) of Solutia's P&D division,
Curby accepted the position of Vice President (VP) of Joint Ventures and Operating
Agreements. Although the new position came with a $15,000 raise, Curby felt she
had less responsibility and viewed the transfer from VP/GM to VP as a demotion.
In the notice, Curby claimed "good reason" for terminating her employment
under the 1998 agreement. Section 5(c) of the 1998 agreement provided, in pertinent
part, "good reason" would include Solutia's assigning her "duties inconsistent in any
respect with [her] position (including status, office, titles and reporting requirement),
authority, duties or responsibilities . . . or any other action by the Company which
results in a diminution in such position, authority, duties or responsibilities[.]" App.
at 108. Curby sent the notice to Solutia's general counsel, accompanied by a letter
from an attorney who would be "assisting Ms. Curby in the severance process with
Solutia." Id. at 138. Although the attorney's letter did not expressly claim Curby had
a right to severance benefits, the tenor of the letter clearly indicated both Curby and
her attorney believed she would be entitled to benefits under the golden parachute
agreement.
Within hours of receiving the notice, Solutia's general counsel responded with
a letter indicating only a "change of control" of the company triggered benefits under
the 1998 agreement. The letter further indicated there had been no change of control,
so the 1998 agreement was not implicated and Curby had no right to severance
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benefits. In addition, the letter acknowledged and accepted Curby's "notice of
termination" as a letter of resignation pursuant to the standard employment agreement
she had signed in September 1997.
After Solutia deemed her notice a resignation, Curby claimed she had not
resigned. She claimed she only intended her notice to trigger a claim for benefits
under an employee benefit plan governed by the Employment Retirement Income
Security Act (ERISA), and entitled it a "notice of termination" only because the 1998
agreement required that terminology. Curby contended Solutia, by deeming the
notice a resignation, had retaliated against her for making a claim for ERISA benefits.
Two weeks after submitting the notice, she submitted a "supplemental notice of
termination" adding as "good reason" for ending her employment the "purported
termination by the Company of [her] employment otherwise than as expressly
permitted by the Agreement." Id. at 123.
On May 30, 2000, Curby filed a Charge of Discrimination with the Equal
Employment Opportunity Commission (EEOC). The same day, she started this
lawsuit in Missouri state court, which Solutia removed to federal court. Curby's suit
ultimately included several claims of race and sex discrimination under Title VII of
the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e to 2000e-17, her claim Solutia
discharged her in retaliation for making a claim for ERISA benefits, and a claim
Solutia interfered with her right to ERISA benefits.
The district court granted Solutia summary judgment on all of Curby's claims.
The district court rejected the ERISA claims after concluding the 1998 employment
agreement was not at issue because there had been no "change of control." The
district court also rejected the race and sex discrimination claims on various grounds.
Curby filed a timely appeal.
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II
Curby contends Solutia violated ERISA by discharging and/or discriminating
against her for making a claim for benefits under her 1998 employment agreement,
and Solutia interfered with her right to ERISA benefits. We review Curby's ERISA-
related claims de novo. Kinkead v. Southwestern Bell Tel. Co., 49 F.3d 454, 456 (8th
Cir. 1995).
Section 510 of ERISA provides "[i]t shall be unlawful for any person to
discharge, fine, suspend, expel, discipline, or discriminate against a participant or
beneficiary for exercising any right to which [s]he is entitled under the provisions of
an employee benefit plan." 29 U.S.C. § 1140. We analyze claims brought pursuant
to section 510 of ERISA under the three-stage burden-shifting paradigm articulated
in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802-05 (1973). Jefferson v.
Vickers, Inc., 102 F.3d 960, 964 (8th Cir. 1995). That is, a plaintiff "must prove that
[s]he participated in a statutorily protected activity . . .; that an adverse employment
action was taken against h[er] . . .; and that a causal connection existed between the
two." Rath v. Selection Research, Inc., 978 F.2d 1087, 1090 (8th Cir. 1992). We
conclude Curby's claim fails under all three stages of the McDonnell Douglas test.
In order for Curby to show she engaged in protected activity (i.e., making a
claim for ERISA benefits), her claim has to be reasonable. Cf. Clark County Sch.
Dist. v. Breeden, 532 U.S. 268, 271 (2001) (rejecting plaintiff's Title VII claim
alleging hostile work environment based upon a single, sexually suggestive remark,
because no reasonable person could believe a single remark created a hostile work
environment).
Section 6(a) of the 1998 agreement indicates severance benefits are payable
only if employment is terminated "during the Employment Period." App. at 110. The
Employment Period in turn is defined as a three-year period following the Effective
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Date, id. at 103, and the Effective Date is defined as "the first date during the Change
of Control Period . . . on which a Change of Control . . . occurs." Id. at 101. Thus,
the agreement requires a "Change of Control" to trigger an "Effective Date" which
begins the three-year "Employment Period" during which severance benefits are
payable if an employee is terminated.
Section 2 of the agreement lists four situations deemed to be changes of
control, namely, 1) the acquisition by another entity of more than 20% of the
company's stock or voting power, 2) certain changes in the makeup of the "Incumbent
Board," 3) consummation by the company as a result of a sale or other disposition of
substantially all the company's assets or the acquisition of the assets or stock of
another corporation (i.e., a "Business Combination"), or 4) the complete liquidation
or dissolution of the company. Id. at 102-03.
It is undisputed no change of control occurred here; thus there was no effective
date or employment period to trigger a right to severance benefits. Therefore, Curby
had no right to severance benefits under the 1998 agreement. Section 12(f) of the
agreement unequivocally states "the Executive's employment . . . may be terminated
by either the Executive or the Company at any time prior to the Effective Date, in
which case Executive shall have no further rights under this Agreement." Id. at 119.
Thus, when Curby chose to terminate her employment by providing Solutia with a
notice of termination absent a change of control, she had no reasonable basis for
believing she had a right to severance benefits under the 1998 agreement.
Curby contends, however, the 1998 agreement only required the threat of a
change of control to trigger the right to a severance package. She relies upon
language in the agreement's prefatory paragraph which referred to the "possibility,
threat or occurrence of a Change of Control" and a "pending or threatened Change of
Control," id. at 101, and contends Solutia's chief operating officer told her some
investment bankers were considering a leveraged buyout of Solutia. She argues the
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agreement's prefatory paragraph renders its definition of change of control
ambiguous, and it was therefore reasonable for her to believe the mere threat of a
change of control triggered the right to benefits. We disagree.
The mention of the possibility of a change of control in the prefatory paragraph
only served to explain why Solutia's Board of Directors wished to enter into golden
parachute agreements with certain key executives. That language in no way rendered
ambiguous the language controlling what events would actually trigger an employee's
right to a severance package. The agreement is clear and definite in that regard.
Thus, Curby has not shown her claim for benefits was reasonable.
Because she resigned, Curby also cannot show she suffered an adverse
employment action. An employee cannot submit a resignation and then claim the
employer's acceptance of the resignation is an adverse employment action. Hammon
v. DHL Airways, Inc., 165 F.3d 441, 447 (6th Cir. 1999); cf. Briggs v. Anderson, 796
F.2d 1009, 1021 (8th Cir. 1986) (holding employees who had voluntarily resigned
were not entitled to make employment discrimination claims under Title VII). We
reject Curby's attempts to differentiate between a "notice of termination" and a letter
of resignation. Curby obviously could not make a claim for severance benefits while
at the same time continuing her employment with Solutia. Thus, whether entitled a
"letter of resignation" or a "notice of termination," the notice Curby submitted clearly
conveyed her intent to end her employment relationship with Solutia, i.e., resign.
It follows that Curby's claim also fails under the third stage of the McDonnell
Douglas test. Since Curby neither engaged in a protected activity, nor suffered an
adverse employment action, there can be no causal connection between the two.
Thus, Curby's claim that Solutia discharged her and/or discriminated against her for
making a claim for ERISA benefits necessarily fails. Furthermore, since she had no
right to benefits under the 1998 agreement, her claim that Solutia interfered with her
right to ERISA benefits fails as well.
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Curby contends, even if we reject her ERISA claims, she is entitled to attorney
fees because the 1998 agreement provided Solutia would pay her legal fees
"regardless of the outcome" of any dispute between the two over the agreement. We
disagree. Although the agreement promised fees regardless of the outcome of this
dispute, it also limited recovery to those fees "reasonably" incurred. See App. at 114
(providing Solutia would pay "all legal fees and expenses which the Executive may
reasonably incur as a result of any contest (regardless of the outcome thereof) by the
Company, the Executive or others of the validity or enforceability of, or liability
under, any provision of this Agreement . . . .") (emphasis added). We conclude the
reference to fees "reasonably incur[red]" requires both that the time spent on the
claims be reasonable and that the claimant's litigation position be reasonable. See
Gerow v. Rohm & Haas Co., 308 F.3d 721, 726 (7th Cir. 2002) (interpreting similar
language in a golden parachute agreement). "Otherwise the employer has written a
blank check that every employee would seek to cash on the off chance that a court
would order the employer to pay more." Id. Since Curby's litigation position is
unreasonable, she is not entitled to fees under the agreement.
III
Curby also makes several claims of race and sex discrimination under Title VII.
We review these claims de novo. Jones v. Frank, 973 F.2d 673, 675 (8th Cir. 1992).
First, Curby contends Solutia discriminated against her on the basis of her sex
and race (Curby is black) by failing to name her as the chief executive officer of
Astaris (the name of the joint venture combining Solutia's and FMC's P&D divisions)
and selecting a white male instead. The district court properly dismissed this claim
because the statute of limitations had run. Curby learned she would not get the
position on May 20, 1999, but did not file her charge of discrimination until over a
year later on May 30, 2000. See Klein v. McGowan, 198 F.3d 705, 709 (8th Cir.
1999) ("Before bringing a Title VII action, a plaintiff must file a charge with the
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EEOC within 300 days of the event giving rise to the cause of action. 42 U.S.C. §
2000e-5(e)."). Curby argues the statute of limitations did not begin to run until the
Federal Trade Commission approved the joint venture, but we disagree. See
Delaware State Coll. v. Ricks, 449 U.S. 250, 259, 260-61 (1980) (holding Title VII
limitations period commences at the time decision is made and communicated to the
plaintiff, even where the effects of the decision do not occur until some future date
or are subject to change).
Next, Curby contends Solutia discriminated against her by transferring her
from the position of VP/GM of the P&D Division, to the position of VP of Joint
Ventures and Operating Agreements. This claim is also subject to the McDonnell
Douglas framework (as are the remainder of Curby's claims) and was properly
dismissed for two reasons. First, the change in position did not constitute an adverse
employment action because there was no reduction in pay or benefits. See
Ledergerber v. Stangler, 122 F.3d 1142, 1144 (8th Cir. 1997) (recognizing loss of
status and prestige alone are insufficient to establish an adverse employment action).
Second, Solutia offered a legitimate, nondiscriminatory reason for the transfer –
Curby's prior position was being eliminated by the joint venture and she desired to
remain with Solutia – and Curby presented no evidence that Solutia's articulated
reason was a pretext for discrimination. See Texas Dep't of Cmty. Affairs, 450 U.S.
248, 254-55 (1981) (explaining plaintiff's burden of showing pretext once employer
articulates a legitimate, nondiscriminatory reason for its actions).
Curby next contends Solutia discriminated against her by not giving her a
"1999 Severance Package" offered to other employees. This claim fails because
Curby accepted the position of VP of Joint Ventures and Operating Agreements in
lieu of the severance package, and therefore suffered no adverse employment action.
See Jones v. Reliant Energy-ARKLA, 336 F.3d 689, 692 (8th Cir. 2003) (holding that
employee who was given a job instead of a severance package suffered no adverse
employment action); see also Cooney v. Union Pac. R.R. Co., 258 F.3d 731, 733-34
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(8th Cir. 2001) (holding that employees who are denied severance but retain their jobs
have not suffered an adverse employment action).
Curby also claims Solutia discriminated against her by not making her VP/GM
of Nylon Plastics & Polymers (NPP) and selecting a white male for that position.
This claim fails because Solutia articulated a legitimate, non-discriminatory reason
for its decision. Solutia said it did not consider Curby for the NPP position because
she had just accepted her new position as VP of Joint Ventures and Operating
Agreements. Solutia also presented several reasons why it considered the person
chosen for the NPP position more qualified than Curby. Curby claims she was more
qualified, but her subjective opinions regarding her own qualifications are not
evidence of pretext. See Rose-Maston v. NME Hosps., Inc., 133 F.3d 1104, 1109
(8th Cir. 1998).
The remainder of Curby's race and sex discrimination claims merit no
discussion, and we affirm the dismissal of those claims for the reasons stated by the
district court. See 8th Cir. R. 47B.
IV
We affirm the district court's judgment in all respects.
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