Joshua Hugo v. Millennium Laboratories, Inc

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 14a0825n.06
No. 14-5132
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
FILED
JOSHUA HUGO, ) Oct 31, 2014
) DEBORAH S. HUNT, Clerk
Plaintiff-Appellant, )
)
v. ) ON APPEAL FROM THE
) UNITED STATES DISTRICT
MILLENNIUM LABORATORIES, INC., ) COURT FOR THE EASTERN
) DISTRICT OF TENNESSEE
Defendant-Appellee. )
)
)
BEFORE: BOGGS, SUTTON and STRANCH, Circuit Judges.
BOGGS, Circuit Judge. Plaintiff-Appellant Joshua Hugo appeals from the district court’s
grant of summary judgment to his former employer on his claims of retaliatory discharge under
the Tennessee Public Protection Act (TPPA) and Tennessee common law. The district court
granted summary judgment to Hugo’s employer, Millennium Laboratories, Inc. (Millennium),
after determining that Hugo did not engage in protected activity for purposes of the TPPA or
common law. The court also determined that Millennium articulated legitimate, non-pretextual
reasons for Hugo’s termination. Because the record does not provide sufficient evidence that
Hugo was terminated because of protected activity, Hugo is unable to demonstrate a genuine
dispute with regard to the required causation elements of his TPPA and common-law claims.
We therefore affirm the decision of the district court.
I
Defendant-Appellee Millennium is a health-services company that provides medical
monitoring, pharmacogenetic testing, advanced analytics, and other services to healthcare
professionals. In September 2010, Hugo was hired by Millennium as a Senior Sales Specialist
responsible for managing existing customer accounts and developing new accounts in his
assigned territory. In his role as a Senior Sales Specialist, Hugo reported to Regional Sales
Manager Jarett Smith, and was supported by Brian Arnold, a Customer Support Specialist (CSS).
Hugo also had direct supervisory authority over several Laboratory Service Assistants (LSAs),
who are Millennium employees assigned to work at customer locations to assist with laboratory
testing services. As recognized in state and federal anti-kickback laws, provision of services by
LSAs that do not relate to laboratory testing can raise issues of illegal inducement. Thus,
Millennium’s policies prohibit LSAs from performing tasks unrelated to laboratory services and
require all customers provided with an LSA to sign an agreement acknowledging the proper
scope of an LSA’s duties. As a Senior Sales Specialist, Hugo was responsible for monitoring the
compliance of LSAs in his territory with Millennium’s policies.
While on a vacation in August 2011, Hugo received a phone call from an LSA under his
supervision who said that he had been asked by a customer to perform tasks, such as cleaning
bathrooms and picking up cigarette butts, that were in violation of Millennium’s policies. Days
later, a second LSA contacted Hugo and stated that she had been asked by a customer to file
medical records, which also would have violated Millennium’s policies. After returning from
vacation, Hugo discussed the matter with his CSS, Arnold, and mentioned to his supervisor,
Smith, that he heard about one of the LSA’s complaints. After Hugo was later discharged from
Millennium, he received a call from another LSA who said that he was asked by a customer to
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file medical records and allegedly had been told by Arnold to “just do whatever [the customers]
want you to, but when [Hugo] comes by, follow the rules.”
Separately, during the course of Hugo’s employment, his boss, Smith, received several
complaints from customers and Millennium employees regarding Hugo’s job performance,
including issues with his work habits, professionalism, timeliness, and customer service. When
Smith and Hugo met in August 2011 to discuss one particular incident involving a customer
account, Smith believed that Hugo lied in his explanation of events.1 On August 25, 2011, Smith
made the decision to recommend Hugo’s termination, citing the multiple complaints regarding
Hugo’s job performance, as well as his alleged dishonesty. Hugo was terminated on September
2, 2011. He did not receive advance warning or documentation from Millennium regarding the
cause for his termination.
On February 24, 2012, Hugo filed a complaint against Millennium in the Circuit Court
for Knox County, Tennessee, in which he raised age-discrimination, public-policy, and
retaliatory-discharge claims. In his retaliation claims, Hugo asserted that he was discharged for
refusing to participate in the improper conduct involving the LSAs described above. Pursuant to
28 U.S.C. § 1441 and § 1332, Millennium removed the case on the basis of diversity of
citizenship to the United States District Court for the Eastern District of Tennessee. On January
6, 2014, the district court granted Millennium’s motion for summary judgment in full and
dismissed the case. Hugo timely appealed from that decision, raising only his retaliatory-
discharge claims on appeal.2
1
Hugo denies lying to Smith in this meeting.
2
Hugo chose to abandon his other claims.
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II
We review a district court’s grant of summary judgment de novo. Singleton v. Select
Specialty Hosp.-Lexington, Inc., 391 F. App’x 395, 399 (6th Cir. 2010). Summary judgment is
proper if the “materials in the record” “show[] that there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56 (c), (a). The
central inquiry is “whether the evidence presents a sufficient disagreement to require submission
to a jury or whether it is so one-sided that one party must prevail as a matter of law.” Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986).
In considering the motion, we view the inferences drawn from the underlying facts in the
light most favorable to the non-moving party—in this case, the plaintiff. See Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). However, “[t]he mere existence of
a scintilla of evidence in support of the plaintiff’s position will be insufficient; there must be
evidence on which the jury could reasonably find for the plaintiff.” Anderson, 477 U.S. at 252.
Moreover, it is relevant in this context that “[m]ere personal beliefs, conjecture and speculation
are insufficient to support an inference of [ ] discrimination.” Grizzell v. City of Columbus Div.
of Police, 461 F.3d 711, 724 (6th Cir. 2006) (quotations omitted) (alterations in original).
III
A
Hugo asserted claims of retaliatory discharge under both the TPPA and the common law.
The TPPA, also known as the Whistleblower Act, provides that “[n]o employee shall be
discharged or terminated solely for refusing to participate in, or for refusing to remain silent
about, illegal activities.” Tenn. Code Ann. § 50-1-304(b). In order to establish a prima facie
case under the TPPA, a plaintiff must demonstrate four elements: (1) he “was an employee of
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the defendant”; (2) he “refused to participate in or remain silent about illegal activity”; (3) the
employer discharged him or terminated his employment; and (4) the defendant discharged him
“solely for . . . [his] refusal to participate in or remain silent about the illegal activity.” Sykes v.
Chattanooga Hous. Auth., 343 S.W.3d 18, 27 (Tenn. 2011) (emphasis added). Under common
law, a plaintiff must demonstrate: “(1) that an employment-at-will relationship existed; (2) that
the employee was discharged, (3) that the reason for the discharge was that the employee
attempted to exercise a statutory or constitutional right, or for any other reason which violates a
clear public policy evidenced by an unambiguous constitutional, statutory, or regulatory
provision; and (4) that a substantial factor in the employer’s decision to discharge the employee
was the employee’s exercise of protected rights or compliance with clear public policy.” Crews
v. Buckman Labs. Int’l, Inc., 78 S.W.3d 852, 862 (Tenn. 2002) (emphasis added).3
The key distinction between the TPPA and common-law claims concerns the causation
requirement: Under the TPPA, a plaintiff must demonstrate that his protected activity—here, the
refusal to participate in illegal activities—“was the sole reason for his termination,” rather than
only a “substantial factor” as is required under common law. Guy v. Mut. of Omaha Ins. Co., 79
S.W.3d 528, 537 (Tenn. 2002).
If a plaintiff is able to make a prima facie showing of retaliatory discharge, the burden
shifts to the employer to articulate a legitimate, non-pretextual reason for termination. See Tenn.
Code Ann. § 50-1-304(g). If a legitimate reason is articulated, “the burden shifts to the plaintiff
to demonstrate that the reason given by the defendant was not the true reason for the plaintiff’s
3
The Tennessee Supreme Court has stressed that “the exception to the employment-at-will
doctrine” represented by this cause of action “must be narrowly applied and not be permitted to
consume the general rule . . . that employers need freedom to make their own business judgments
without interference from the courts.” Stein v. Davidson Hotel Co., 945 S.W.2d 714, 717 & n.3
(Tenn. 1997).
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discharge and that the stated reason was a pretext for unlawful retaliation.” Id. “To meet this
burden, plaintiff must show by admissible evidence either (1) that the proffered reason[s] ha[ve]
no basis in fact, (2) that the proffered reasons did not actually motivate his discharge, or (3) that
they were insufficient to motivate the discharge.” Provonsha v. Students Taking a Right Stand,
Inc., 2007 WL 4232918, at *4 (Tenn. Ct. App. Dec. 3, 2007) (internal quotations and citation
omitted).
B
Hugo claims that he was terminated by Millennium “solely for refusing to participate in
improper and/or illegal business activities” involving the LSAs. He asserts that he “simply did
not want to be a player” in Millennium’s alleged game, and was fired because of this refusal “to
play ball.” Even after drawing all inferences in his favor, the record fails to establish that Hugo
was “terminated solely for refusing to participate in . . . illegal activities,” Tenn. Code Ann. § 50-
1-304(b), nor does it show that Hugo’s “exercise of protected rights or compliance with clear
public policy” was “a substantial factor in [Millennium’s] decision to discharge” him. Crews, 78
S.W.3d at 862. Hugo points to no facts suggesting that his alleged refusal to participate in illegal
activities was even considered by Millennium in making its decision to terminate him, let alone
that it served as a motivating factor to the extent required under the TPPA and common law. In
this context, “[t]he subjective interpretation by the employee of the actions of the employer will
not create an issue of fact to defeat summary judgment.” Riddle v. First Tennessee Bank, Nat.
Ass’n, 497 F. App’x 588, 599 (6th Cir. 2012) (quoting Hill v. Perrigo of Tennessee, 2001 WL
694479, at *7 (Tenn. Ct. App. June 21, 2001)). Thus, Hugo’s mere speculation that Millennium
“did not want [him] around” to interfere with the alleged illegal activities is insufficient to
establish the causation elements of either the TPPA or common-law claims.
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Hugo failed to depose Smith, who was the individual responsible for Millennium’s initial
termination decision. Thus, the only facts before us regarding the relevant decisional process are
those offered by Millennium, which detail the various complaints raised by customers and co-
workers regarding Hugo’s job performance and include a sworn declaration by Smith asserting
that he made the decision to terminate Hugo based on the multiple complaints Smith had
received from customers and other employees as well as Hugo’s alleged dishonesty. Hugo
makes no effort to dispute the veracity of this evidence, claiming only that “it is hard to imagine”
that the complaints “actually motivated [his] immediate dismissal” in light of his positive sales
numbers and the lack of any warnings regarding his performance. As this court has previously
stressed, however, it is not enough to merely “cast doubt” on the employer’s reasons for
termination without presenting “evidence establishing a causal connection” between the
employee’s termination and protected activity. Mehr v. Starwood Hotels & Resorts Worldwide,
Inc., 72 F. App’x 276, 284 (6th Cir. 2003). Such evidence is entirely lacking here. Rather,
“[t]he undisputed evidence in the record establishes valid and legitimate reasons” for Hugo’s
termination, Todd v. Shelby Cnty., 407 S.W.3d 212, 226 (Tenn. Ct. App. 2012), and there is no
basis to conclude that Hugo was fired because of any refusal to participate in illegal activities.
Therefore, summary judgment is appropriate. See ibid. (affirming summary judgment where
employee failed to “produce[] or identif[y] sufficient evidence to show an issue of material fact
on . . . causation”); see also Riddle, 497 F. App’x at 598-99 (affirming summary judgment where
plaintiff “failed to meet his burden of demonstrating causation under the common law and the
TPPA”); Hill, 2001 WL 694479, at *7 (no genuine issue of material fact where there “is nothing
more than employee’s conclusory allegations” regarding causation).
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Even if Hugo were able to make out a prima facie case of retaliation under the TPPA or
common law, Millennium “would still be entitled to summary judgment because it had a
legitimate, non-retaliatory reason for terminating” him, and because Hugo “cannot point to any
evidence suggesting that [Millennium’s] explanation for his discharge” was pretextual. Riddle,
497 F. App’x at 598-99. To show pretext, Hugo must establish that Millennium’s stated reasons
had no factual basis, did not actually motivate Millennium’s decision to terminate him, or were
insufficient to support Millennium’s decision. See Provonsha, 2007 WL 4232918, at *4. As
noted above, Hugo does not dispute the factual basis of the several complaints raised by
Millennium’s customers and employees regarding Hugo’s job performance, and he cannot point
to any evidence showing that these complaints were not relied upon by Millennium in deciding
to terminate him. Nor can Hugo demonstrate that Millennium’s justification was insufficient
given the content and nature of the complaints regarding his job performance, and especially
considering Hugo’s role as a sales specialist responsible for managing customer accounts. Cf.
Anderson v. Stauffer Chem. Co., 965 F.2d 397, 402 (7th Cir. 1992). In light of the evidence
offered by Millennium, Hugo’s positive sales record and Millennium’s failure to provide a
warning or documentation regarding the cause of Hugo’s termination are not sufficient to
establish pretext in this case. See, e.g., Gantt v. Wilson Sporting Goods Co., 143 F.3d 1042,
1049 (6th Cir. 1998) (employee’s good work record and lack of warning that she was about to be
terminated did not establish pretext); Cosby v. Hoffman-La Roche, Inc., 2011 WL 6752426, at *6
(S.D. Ohio Dec. 22, 2011) (“[H]igh sales numbers do not necessarily connect to overall
satisfactory performance,” and do not necessarily undermine non-pretextual reasons for
termination.).4
4
Because we resolve the matter based solely on the causation issue, we do not reach the other
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IV
For the foregoing reasons, we AFFIRM the district court’s grant of summary judgment.
elements of Hugo’s TPPA and common-law claims.
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