Wendi F. Sellers v. Norman Y. Mineta

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
________________
No. 02-1425
________________
Wendi Ferguson Sellers, *
*
Appellee, *
* Appeal from the United States
v. * District Court for the
* Eastern District of Missouri.
Norman Y. Mineta, Secretary of *
Transportation, *
*
Appellant. *
________________
Submitted: April 14, 2003
Filed: February 24, 2004
________________
Before LOKEN, Chief Judge, HANSEN and BYE, Circuit Judges.
________________
HANSEN, Circuit Judge.
Wendi Sellers brought an action against the Secretary of Transportation
pursuant to Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e, et seq.
(2000), alleging that she was unlawfully discriminated against in her employment on
account of her gender and in retaliation for filing a sexual harassment complaint.
Pursuant to 28 U.S.C. § 636(c), with the parties' consent, the claims were tried before
a magistrate judge and a jury. After the jury returned a verdict in favor of Sellers, she
moved for equitable relief in the form of reinstatement or, in the alternative, front pay.
The district court denied reinstatement but awarded Sellers front pay in the amount
of $638,293.99. The government appeals the front pay award. For the reasons stated
below, we vacate the award and remand to the district court.
I.
Sellers was employed by the Federal Aviation Administration (FAA) as an Air
Traffic Control Specialist at Lambert Airport in St. Louis beginning in 1987. Sellers
alleged that she was subjected to a hostile work environment beginning in 1996 and
lasting through the time of her termination in 1997. The harassment began when John
Joseph, who was also employed at Lambert, made unwanted sexual advances toward
Sellers and, on one occasion, sexually assaulted Sellers at her home. Sellers
complained of this conduct to her coworkers, supervisors, and union officials.
Although Joseph's harassing conduct ceased after Sellers' complaints, the workplace
atmosphere at Lambert deteriorated as Sellers was subjected to on-the-job
harassment. Because of the deteriorating atmosphere, the FAA decided to terminate
Sellers effective September 30, 1997.
From October 1997 through April 2000, Sellers worked at the Bank of
America. The bank terminated Sellers on April 14, 2000, after she attempted to
process an unauthorized loan application in the name of her spouse's former wife.
When bank representatives questioned Sellers about the loan application, she
admitted her wrongful conduct, explaining that she had completed the application to
obtain her spouse's ex-wife's credit history.
Sellers' case was tried during March 2000, when she was still employed by the
bank. The jury awarded Sellers $800,000 in noneconomic compensatory damages
and $345,000 in backpay. On April 4, 2000, the district court entered judgment in
accord with the jury's verdict and then granted the Secretary's motion for remittitur,
reducing Sellers' noneconomic damages award to the statutory maximum of
2
$300,000. See 42 U.S.C. § 1981a(b)(3)(D) (2000). The district court also granted
Sellers' motion for prejudgment interest in the amount of $27,329.33. Sellers sought
further equitable relief in the form of reinstatement or front pay. On April 25, 2000,
the Secretary moved for a stay of the proceedings with respect to the requested
equitable relief, noting that he had recently received information regarding Sellers'
discharge from Bank of America that "if proved, would have a direct impact on the
plaintiff's motion [for equitable relief], defendant's ability to even consider
reinstatement . . . and ultimately, therefore on the issue of front pay." (Appellee's
App. at 24-25.) On November 19, 2001, the court held a hearing on the
reinstatement/front pay motion. The district court concluded that reinstatement was
impractical because of the level of acrimony still present between Sellers and her
coworkers, supervisors, and the FAA. In lieu of reinstatement, the district court
awarded Sellers front pay. On appeal, the Secretary argues that the district court
abused its discretion in awarding Sellers front pay because her post-termination
conduct–that is, her termination from the Bank of America for processing a false loan
application–made her unsuitable for reinstatement as an air traffic controller. The
Secretary argues in the alternative that the front pay award was excessive under the
circumstances.
II.
The primary issue presented is whether the post-termination misconduct of a
discharged employee that would prevent reinstatement with the defendant/prior
employer limits the equitable remedy of front pay. It is a question of first impression
in this circuit.
A. Waiver of After-Acquired Evidence Theory
Initially, we reject Sellers' argument that the Secretary waived this issue by
failing to raise it before the district court. Even if the after-acquired evidence theory
3
advanced by the Secretary is an affirmative defense that must be pleaded, as claimed
by Sellers, clearly the Secretary cannot be expected to raise the defense in an answer
filed over two years prior to the events giving rise to the defense. Further, the
Secretary filed a Motion For a Stay of Proceedings within days of learning of the
events, alerting the court that it was investigating alleged wrongdoing as the basis for
Sellers' termination from Bank of America and noting that the events would have a
direct impact on the issues of reinstatement and front pay. A significant portion of
the November 1991 hearing was devoted to testimony about the events surrounding
Sellers' termination from the bank and how those events affected the FAA's
consideration of reinstating Sellers. (See Appellant's App. at 46-47, 189-93, 211-14,
225-26.) The district court specifically found that Sellers was terminated from the
bank for the misconduct. That misconduct formed the basis for the FAA's decision
not to offer reinstatement to Sellers in April 2001. (D. Ct. Order at 6.) In these
circumstances, although the Secretary did not cite the specific legal theory to the
district court, we conclude that he sufficiently raised the issue before the district court
to allow us to consider it on appeal. See Sexton v. Martin, 210 F.3d 905, 914 n.8 (8th
Cir. 2000) (reaching issue where facts were alleged in district court brief though
controlling authority was not); Stockmen's Livestock Market, Inc. v. Norwest Bank
of Sioux City, N.A., 135 F.3d 1236, 1243 n.4 (8th Cir. 1998) (reaching issue
encompassed in general argument made before district court where party advancing
argument did not present new evidence on appeal and both parties briefed the issue
on appeal).
B. Merits of After-Acquired Evidence Theory
The most relevant Supreme Court case is McKennon v. Nashville Banner
Publ'g Co., 513 U.S. 352 (1995). There, the plaintiff alleged that her employer
terminated her in violation of the Age Discrimination in Employment Act (ADEA).
The employer learned during the plaintiff's deposition that while the plaintiff was still
employed with the firm, she had copied and taken home certain confidential
4
documents in violation of her job responsibilities. See id. at 355. The McKennon
Court held that after-acquired evidence of employee on-the-job misconduct, which
would have resulted in that employee's discharge had the employer known of it, did
not preclude recovery under the ADEA. See id. at 356. The Court rejected the
proposition, however, that "the employee's own misconduct is irrelevant to all the
remedies otherwise available under the statute." Id. at 360-61. The Court explained
that "the employee's wrongdoing becomes relevant . . . to take due account of the
lawful prerogatives of the employer in the usual course of its business and the
corresponding equities that it has arising from the employee's wrongdoing." Id. at
361. Most relevant to our discussion, the Court concluded that:
The proper boundaries of remedial relief in the general class of cases
where, after termination, it is discovered that the employee has engaged
in wrongdoing must be addressed by the judicial system in the ordinary
course of further decisions, for the factual permutations and the
equitable considerations they raise will vary from case to case. We do
conclude that here, and as a general rule in cases of this type, neither
reinstatement nor front pay is an appropriate remedy. It would be both
inequitable and pointless to order the reinstatement of someone the
employer would have terminated, and will terminate, in any event and
upon lawful grounds.
Id. at 361-62.
Although McKennon involved the ADEA, its reasoning also applies in the
Title VII context. See id. at 357 ("The substantive, antidiscrimination provisions of
the ADEA are modeled upon the prohibitions of Title VII."); Trans World Airlines,
Inc. v. Thurston, 469 U.S. 111, 121 (1985) (recognizing the similarity between Title
VII and the ADEA because "the substantive provisions of the ADEA were derived
in haec verba from Title VII" (internal marks omitted)). Only a few courts have
addressed the question of whether the McKennon rationale should be extended to
answer the question of whether evidence of misconduct that occurred after the
5
employee has been terminated, but before the front pay decision is made, is relevant
in fashioning equitable relief.
In Ryder v. Westinghouse Elec. Corp., 879 F. Supp. 534 (W.D. Penn. 1995),
the district court answered this question in the negative. It reasoned that the after-
acquired evidence doctrine "presupposes that there was an employer-employee
relationship at the time the misconduct occurred" and that "there cannot be
misconduct that the employer did not know about prior to making its adverse decision
if the misconduct did not even occur until after the adverse decision was made." Id.
at 537. In Sigmon v. Parker Chapin Flattau & Klimpl, 901 F. Supp. 667 (S.D.N.Y.
1995), the plaintiff was terminated from her position as an associate at a law firm for
allegedly discriminatory reasons after she returned from maternity leave. After her
termination, the firm provided her with an office and telephone to conduct a job
search. During this time, the plaintiff copied her personnel file as well as the
personnel files of twenty other associates. The defendant argued that even if the
plaintiff could prove discrimination, her damages should be limited due to her
misappropriation, copying, and retention of the defendant's documents. The district
court rejected the argument. Like the Ryder court, it concluded that McKennon was
"premised on the employee's misconduct occurring during her employment." Id. at
682-83. The Sigmon court then applied a bright-line rule, concluding that because
the misconduct occurred outside the employment relationship, any complaint that the
defendant may have had fell outside the McKennon rule. See id. ("Because in this
case, plaintiff's alleged misconduct occurred after her termination, McKennon does
not govern. . . . In the instant situation, defendant and plaintiff were not in an
employer-employee relationship at the time of the alleged incident. Therefore any
complaint defendant has against plaintiff for her post-employment conduct falls
outside of the McKennon rule. . . .").
In Carr v. Woodbury County Juv. Det. Ctr., 905 F. Supp. 619 (N.D. Iowa
1995), the plaintiff was constructively discharged from her employment as a youth
6
worker as a result of a racially and sexually hostile work environment. The plaintiff
filed a motion in limine to exclude evidence of her post-employment marijuana use
that the employer discovered during trial preparation. The defendant argued that
Carr's post-termination marijuana use was probative of damages because (1) it
showed that the County would have fired Carr because marijuana use violated County
employment policies and (2) because it showed that Carr was unlikely to have
remained at her position for any length of time as it was unlikely that a person with
a marijuana habit could have maintained long term employment. The district court
granted the motion, excluded the evidence, and declined to extend McKennon. Like
the aforementioned cases, the Carr court reasoned that McKennon presupposes that
the wrongdoing occurred during the existence of the employment relationship. See
id. at 627-28. The court also reasoned that McKennon should not apply because the
"marijuana use simply had nothing to do with and did not occur during her
employment and caused her former employer absolutely no detriment." Id. at 628-29.
Third, the district court reasoned that the County's employment policies could not
"properly . . . be imposed upon a person after his or her employment has terminated"
because "[i]t would be grossly inequitable to hold [a plaintiff] to all of the burdens
of County policies at a time when she is not receiving any of the benefits of County
employment." Id. at 629. Finally, the district court concluded that even if McKennon
applied, the County had not established that the plaintiff's post-termination conduct
was so severe that it would have terminated her for it. See id.
The Tenth Circuit has also confronted this issue. In Medlock v. Ortho Biotech,
Inc., 164 F.3d 545 (10th Cir.), cert. denied, 528 U.S. 813 (1999), Medlock was
allegedly terminated in retaliation for his filing and pursuing a claim of race-based
discrimination. At his unemployment benefits compensation hearing, Medlock
verbally abused defendant's counsel. The defendant argued that the district court
erred in refusing to instruct the jury that Medlock's post-termination conduct could
serve to limit damages. The Tenth Circuit recognized that post-termination conduct
could, in an appropriate case, limit a plaintiff's remedies. See id. at 555 (stating that
7
it could "not foreclose the possibility that in appropriate circumstances the logic of
McKennon may permit certain limitations on relief based on post-termination
conduct"). But it concluded that Medlock was not such a case. See id. (stating that
in "cases in which the alleged misconduct arises as a direct result of retaliatory
termination, the necessary balancing of the equities hardly mandates a McKennon-
type instruction on after-occurring evidence").
We are of the view that the aforementioned district court cases gave too
crabbed a reading to McKennon. The McKennon Court used sweeping language,
instructing lower courts to treat each case on a case by case basis considering all the
"factual permutations and the equitable considerations they raise." McKennon, 513
U.S. at 361; see also Mardell v. Harleysville Life Ins. Co., 65 F.3d 1072, 1074 n.4 (3d
Cir. 1995) (stating that the "Supreme Court did not limit the general principles
articulated in McKennon to cases involving on-the-job misconduct, instead using the
broader term 'wrongdoing'"). Thus, like the Tenth Circuit, we cannot establish a
bright-line rule and foreclose the possibility that a Title VII plaintiff's post-
termination conduct may, under certain circumstances, limit the remedial relief
available to the plaintiff. A simple illustration will demonstrate why and how post-
termination conduct may be relevant, in some circumstances, in limiting relief. Let
us suppose that after the FAA had terminated her, and before the district court granted
her equitable relief, Sellers had been convicted of some crime wholly unrelated to her
former position with the FAA and was incarcerated such that reinstatement was now
an impossibility. Simple common sense tells us that it would be inequitable to award
her front pay in lieu of reinstatement where she had rendered herself actually unable
to be reinstated.
The nature of the front pay remedy itself is what makes the answer to the above
illustration so intuitive. Front pay is a disfavored remedy that may be awarded in lieu
of reinstatement, but not in addition to it, where the circumstances make
reinstatement impractical. See Salitros v. Chrysler Corp., 306 F.3d 562, 572 (8th Cir.
8
2002) (stating that front pay is a disfavored remedy); Kucia v. S.E. Ark. Cmty. Action
Corp., 284 F.3d 944, 949 (8th Cir. 2002) (stating that reinstatement should be the
norm and that front pay is an exceptional remedy); Smith v. World Ins. Co., 38 F.3d
1456, 1466 (8th Cir. 1994) ("Front pay is an equitable remedy, which . . . may be
awarded in lieu of, but not in addition[ ] to reinstatement."). The availability of front
pay as a remedy thus presupposes that reinstatement is impractical or impossible due
to circumstances not attributable to the plaintiff. It would be inequitable for a
plaintiff to avail herself of the disfavored and exceptional remedy of front pay where
her own misconduct precludes her from availing herself of the favored and more
traditional remedy of reinstatement. As such, we hold that a plaintiff's post-
termination conduct is relevant in determining whether a front pay award is available,
and if so, in determining the extent of the award.
Our conclusion that an employee's post-termination conduct can, in some
circumstances, limit an employee's remedies for a wrongful discharge is not a new
one. For example, we have previously concluded that a terminated employee could
forfeit the remedy of reinstatement under the National Labor Relations Act where he
threatened his supervisors post-discharge. See Precision Window Mfg., Inc. v.
N.L.R.B., 963 F.2d 1105, 1108 (8th Cir. 1992) (stating that "a fired employee 'does
not have an unlimited right to engage in misconduct without losing his remedial
rights'" (quoting Precision Window Mfg., Inc., 303 N.L.R.B. No. 141 (Raudabaugh,
dissenting))). We have also concluded that front pay would be unavailable where the
plaintiff's own post-termination conduct prevented reinstatement. See Smith, 38 F.3d
at 1466 (stating that an unreasonably rejected offer of reinstatement will bar
entitlement to front pay). It requires no leap in logic to conclude that if an
unreasonable rejection of an offer of reinstatement precludes a front pay award, then
post-termination misconduct of a type that renders an employee actually unable to be
reinstated or ineligible for reinstatement should also be one of the "factual
permutations" which is relevant in determining whether a front pay award is
appropriate. See Christine Neylon O'Brien, The Law of After Acquired Evidence in
9
Employment Discrimination Cases: Clarification of the Employer's Burden, Remedial
Guidance, and the Enigma of Post-Termination Misconduct, 65 U.M.K.C. L. Rev.
159, 174 (1996) (concluding that where post-termination misconduct is egregious,
such conduct should bar reinstatement).
McKennon makes clear that the burden of establishing these facts rests on the
employer. See McKennon, 513 U.S. at 362-63 (stating that employer must establish
that "the wrongdoing was of such severity that the employee in fact would have been
terminated on those grounds alone"). The court must look to the employer's actual
employment practices and not merely the standards articulated in its employment
manuals, for things are often observed in the breach but not in the keeping. See
O'Day v. McDonnell Douglas Helicopter Co., 79 F.3d 756, 759 (9th Cir. 1996)
(stating that inquiry must focus on actual employment practices). The government
argues that it has established the relevant facts showing that Sellers is no longer
eligible for reinstatement because FAA hiring practices provide that a person who has
been terminated from, or forced to resign, a position is unsuitable for employment as
an Air Traffic Control Specialist. The district court concluded that the FAA's
assertion that Sellers was unsuitable for reinstatement because of her post-termination
conduct was evidence of the acrimonious relationship between them, but there is no
specific finding by the court that FAA employment regulations and policies as
applied to Mrs. Sellers do in fact bar her reinstatement or employment as an Air
Traffic Control Specialist. There is no finding that the FAA regularly adheres to this
alleged policy or that the FAA has made an official determination that Sellers is, in
fact, unsuitable for reinstatement solely because of her post-termination conduct.
That the FAA chose not to offer Sellers reinstatement does not equate with finding
that Sellers' conduct alone made her ineligible for reinstatement.
Accordingly, we vacate the district court's award of front pay and remand for
further findings of fact and conclusions of law to be made on the existing record. No
reopening of the evidentiary record shall occur, but the court may, of course, in its
10
discretion call for additional briefing and argument. On remand, in order to establish
that Sellers' front pay remedy should be limited by her post-termination conduct, the
defendant must convince the court by a preponderance of the evidence that Sellers'
post-termination conduct renders her ineligible for reinstatement under the FAA's
employment regulations, policies, and actual employment practices.1
III.
A. Length of Front Pay Period
The Secretary also argues that even if Sellers was entitled to a front pay award,
the award as made was excessive because Sellers failed to mitigate her damages by
seeking a comparable job following her termination. If the district court determines
on remand that Sellers' conduct did in fact render her ineligible for reinstatement, this
issue need not be addressed. Front pay is an alternative remedy to reinstatement and
should be unavailable where the plaintiff's own conduct prevented reinstatement. See
Smith, 38 F.3d at 1466; see also McKennon, 513 U.S. 361-62 ("[A]s a general rule
in cases of this type, neither reinstatement nor front pay is an appropriate remedy.").
We address this issue, however, in the event that the district court determines on
remand that Sellers' post-termination conduct did not in itself bar her reinstatement.
1
The proper query is whether the FAA would have reinstated Sellers, not
whether it would have terminated her. Although McKennon required the employer
to prove that "the wrongdoing was of such severity that the employee in fact would
have been terminated on those grounds alone if the employer had known of it at the
time of the discharge," 513 U.S. at 362-63, that case involved pre-termination on-the-
job misconduct that the employer advanced as a legitimate justification for
termination. The FAA does not rely on Sellers' post-termination conduct as
justification for her termination, nor could it as the conduct occurred two years after
the termination. Rather, the FAA relies on it solely to avoid the equitable remedies
of reinstatement or front pay, thereby shifting the inquiry to whether Sellers would
have been reinstated.
11
Sellers asked for front pay in an amount sufficient to compensate her for the
difference between her then-current salary of $24,889 and her FAA salary of
$106,285 at least until her mandatory retirement age of 56, a period of 19 years. The
district court awarded Sellers front pay for the 20-month period between the time of
the verdict and the time of the ruling on the front pay motion based on the difference
between what she actually earned and what she would have earned had she remained
employed by the FAA. It found Sellers' request for front pay until retirement "too
uncertain" and awarded her an additional seven years of front pay based on the
difference between her current salary as an office manager and the FAA salary "to
afford [Sellers] the opportunity to obtain employment with comparable compensation
and responsibilities." (D. Ct. Order at 14.)
In declining to award Sellers front pay until she reached retirement age, the
district court considered a number of factors, including her relatively young age (37),
her education and extensive experience in the aeronautical field, her minimal efforts
at mitigation, and the status of the aeronautical industry. Because we believe that
eight years and eight months2 is the outside limit of an appropriate front pay award
given Sellers’ age, education, and extensive experience (without considering any
minimal mitigation attempts), we cannot say that the length of the district court's
ultimate award was an abuse of discretion, especially when it considered the relevant
factors. See Salitros, 306 F.3d at 570 (affirming seven-year front pay award until
plaintiff's normal retirement age); United Paperworkers Int'l Union, AFL-CIO, Local
274 v. Champion Int'l Corp., 81 F.3d 798, 805 (8th Cir. 1996) (expressing "grave
doubt" that a 24-year front pay award could be upheld and stating that "[i]nstead of
2
The Secretary refers to the front pay award as a seven-year award. Sellers
actually received an eight-year and eight-month front pay award: the 20-month
period between verdict and judgment, and the additional seven years beyond the
judgment. The factors used by the district court in fashioning the seven-year award
apply equally to both periods, and our references to the front pay award refer to both
periods.
12
warranting a lifetime of front pay, Fiedler's relatively young age should improve his
future opportunities to mitigate through other employment"); Hukkanen v. Int'l Union
of Operating Eng'rs, Hoisting & Portable Local No. 101, 3 F.3d 281, 286 (8th Cir.
1993) (affirming front pay award of ten years).
B. Dollar Amount of Front Pay Award
We believe, however, that the district court did abuse its discretion by not
reducing the annual amount it used to calculate Sellers' award to reflect Sellers'
failure to mitigate. Following Sellers’ termination, she worked as a loan officer and
an office manager, both of which paid an annual salary of approximately $25,000.
The district court specifically found:
Although [Sellers'] air traffic experience would qualify her for
employment with private aviation contractors, including jobs such as
airline and/or law enforcement dispatcher, consultant, or with private air
traffic control towers, [Sellers] sought no such employment. Instead,
[Sellers] sought relatively low paying jobs, and the nature of the great
majority of jobs for which [Sellers] applied was in no way related to the
field of aviation.
(D. Ct. Order at 5.) To avoid a reduction in her front pay award, Sellers had a duty
to mitigate her damages by seeking comparable employment. See Denesha v.
Farmers Ins. Exch., 161 F.3d 491, 502 (8th Cir. 1998). While the district court found
that she did not adequately attempt to mitigate her damages, it failed to sufficiently
reflect her failure in its award. See id. (affirming reduction in front pay award where
plaintiff failed to “make some sustained minimal attempt to obtain comparable
employment”). The district court's award at a differential between the actual and
FAA salaries does not adequately account for her failure to mitigate. As relevant on
remand, the district court should determine an amount that Sellers could have earned
if she had attempted to find comparable work, and reduce any award accordingly.
13
See id. (“[A]n amount equal to what Denesha would have earned if he had made
reasonable mitigation efforts was properly subtracted from his award.”).
IV.
The district court's award of front pay is vacated, and the case is remanded to
the district court for further proceedings not inconsistent with this opinion.
LOKEN, Circuit Judge, concurring.
I join the opinion of the court. I write separately to address an additional issue
relevant to the proceedings on remand. Judge Bye in dissent observes, "the record
shows Sellers's reinstatement was impractical due to other circumstances (i.e., the
hostile environment she would have faced working for an employer who still
employed the man who sexually harassed her)." Ante at 23. If Judge Bye means to
suggest that reinstatement is not potentially an issue on remand, I disagree. In my
view, the issue of reinstatement will be very much alive if the FAA fails to establish
that Sellers's post-termination misconduct made her ineligible for reinstatement.
Sellers's post-verdict motion for equitable relief properly sought the preferred
remedy of reinstatement and included an alternative request for front pay if
reinstatement was impractical. Because Joseph continued to be employed at Lambert
Airport, Sellers requested reinstatement at another FAA facility, specifying three that
would be convenient or suitable for her. Thus, while Judge Bye is correct that Joseph
continued to be an FAA employee, the reinstatement Sellers requested would not
have required her to work at the facility where Joseph was employed, and where her
relations with other staff had significantly deteriorated prior to her termination. The
FAA's response opposed front pay relief and advised that the agency was considering
the feasibility of reinstatement. After learning of Sellers's termination by Bank of
America, the FAA decided in April 2001 not to reinstate her and argued to the district
14
court that she was ineligible for reinstatement as an air traffic controller because of
"misconduct which resulted in her termination from [Bank of America]." Mem. &
Order of Dec. 13, 2001, at p.6.
The district court denied reinstatement, but not because of Sellers's Bank of
America misconduct. Rather, the court concluded that reinstatement "is impracticable
in the circumstances" because the FAA expressed a continuing "unfavorable
disposition" and "hostility" toward Sellers's re-employment. Mem. & Order of Dec.
13, 2001, at p.9. For this conclusion, the court cited our decision in Cowan v.
Strafford R-VI School Dist., 140 F.3d 1153, 1160 (8th Cir. 1998). But in Cowan,
reinstatement would have reunited a terminated teacher with her antagonist, the
school principal, at the same facility. Thus, the "hostility" issue in Cowan was
comparable to the question whether Sellers should be reinstated at Lambert Airport
with Joseph and other antagonistic co-workers, equitable relief Sellers did not seek.
In Cowan, as in our earlier decision in Standley v. Chilhowee R-IV Sch. Dist., 5 F.3d
319, 322 (8th Cir. 1993), we were unwilling to order a reinstatement that would
threaten the proper functioning of a school by re-establishing admittedly hostile day-
to-day working relationships between a teacher and her principal (Cowan), or
between a number of teachers (Standley).
As the district court acknowledged earlier in its memorandum and order,
Cowan and Standley "presented extraordinary circumstances which warrant denial
of reinstatement." 140 F.3d at 1160. On the other hand, "hostility engendered from
litigation" is not extraordinary and does not bar this preferred remedy. Taylor v.
Teletype Corp., 648 F.2d 1129, 1139 (8th Cir.), cert. denied, 454 U.S. 969 (1981);
accord Dickerson v. Deluxe Check Printers, Inc., 703 F.2d 276, 281 (8th Cir. 1983).
Therefore, only "[s]ubstantial hostility, above that normally incident to litigation, is
a sound basis for denying reinstatement." United Paperworkers Int'l Union v.
Champion Int'l Corp., 81 F.3d 798, 805 (8th Cir. 1996), quoted in Hammond v.
Northland Counseling Ctr., Inc. 218 F.3d 886, 892 (8th Cir. 2000). Yet the district
15
court never analyzed whether, assuming Sellers was eligible for reinstatement despite
her termination by Bank of America, the FAA demonstrated that its opposition to
reinstatement was anything more than the lingering ill-will or hostility normally
incident to this type of Title VII litigation.
In these circumstances, the district court on remand must first explore, in
accordance with this court's opinion, whether Sellers's post-termination conduct
renders her ineligible for reinstatement. If the FAA meets its burden of proof on that
issue, presumably neither reinstatement nor front pay will be appropriate equitable
relief. On the other hand, if Sellers prevails on this issue, then I think the district
court should next revisit the issue of reinstatement, bearing in mind that "the passage
of time may soften the most acrimonious of relationships," United Paperworkers, 81
F.3d at 805, and determining whether there are terms of reinstatement reasonably
comparable to those proposed by Sellers that are not impractical because of either
hostility above that normally incident to litigation or other sufficient reasons. In this
regard, the parties must remember that reinstatement is the preferred equitable
remedy. Therefore, the FAA, having violated Title VII, must have strong reasons to
avoid reinstatement, and Sellers may not abandon her former willingness to accept
reinstatement because she might now prefer a substantial front pay award. If the
district court determines that equitable relief is appropriate despite the Bank of
America termination, and that reinstatement is impractical under these rigorous
standards, the court should then return to the question of front pay, including the
issues of the length and dollar amount of front pay discussed in the court's opinion.
BYE, Circuit Judge, dissenting.
I disagree with the majority opinion in two respects. First, the Secretary failed
to argue in the district court that post-termination misconduct precludes an award of
front pay, and therefore waived the claim now raised on appeal. Second, if we were
to reach the issue, I do not believe the record developed by the Secretary establishes
16
Sellers's reinstatement was impractical or impossible due to her misconduct. Because
the record establishes only that reinstatement was impractical due to circumstances
not attributable to Sellers, I believe she is still entitled to front pay, and I see no
reason to remand this case. For both reasons, I respectfully dissent.
I
The Secretary's arguments in the district court regarding Sellers's post-
termination misconduct, as well as his factual development of the record, all related
to whether it was practical or possible to reinstate Sellers as an air traffic controller.
Absent from the record is any argument Sellers's post-termination misconduct should
preclude front pay as well. The record shows the following with respect to the
misconduct issue.
First, the initial motion informing the district court about Sellers's post-
termination misconduct focused on reinstatement rather than front pay. See ante at
3 (quoting Appellee's App. at 24-25). As the proceedings involving Sellers's
misconduct unfolded, the Secretary remained focused on reinstatement, not front pay.
For example, on May 1, 2000, in response to Sellers's motion for equitable relief and
prejudgment interest, the Secretary stated "defendant is still exploring the possibility
or even feasibility of reinstating plaintiff. With respect to front pay, it is defendant's
position plaintiff is not entitled to front pay under the facts in this case." Appellant's
App. at 24-25. The response did not, however, explain why front pay would not be
warranted if Sellers was not reinstated.
On March 12, 2001, the district entered an order for a hearing on Sellers's
motion for equitable relief "at which time [the parties] shall prepare to present
evidence and argument in support of their respective positions." Id. at 18 (District
Court Docket Entry #144) (emphasis added). The hearing was not held until
17
November 19, 2001. In the interim, the Secretary never filed a brief arguing
misconduct should preclude an award of front pay.
At the hearing on November 19, 2001, Sellers's counsel represented it was his
understanding that Defendant opposes the reinstatement request in part,
or perhaps in whole, as a result of an incident that occurred which
resulted in the cessation of Ms. Sellers' employment with Bank of
America. That employment ceased about two weeks after the jury
verdict in this case. Apparently, the Defendant alleges some kind of
ethical or moral transgression on the part of the Plaintiff.
Id. at 46. The Secretary's response to that statement was limited to the issue of
reinstatement and never suggested the Bank of America incident precluded front pay
as well. Id. at 47. Indeed, when the Secretary presented evidence at the hearing, his
focus was still on the issue of reinstatement, not front pay.
Finally, at the end of the hearing, the district court specifically asked both
counsel whether there was "anything else" the court needed to address – clearly an
opening for the Secretary to make a legal or factual argument regarding front pay –
and the Secretary's counsel replied, "No, your honor." Not once did the Secretary cite
McKennon or any other cases discussing whether post-termination misconduct should
preclude an award of front pay.
Nevertheless, the Secretary argues he preserved the issue by presenting factual
evidence on Sellers's misconduct and by generally opposing front pay. I respectfully
disagree. The Secretary never gave the district court reason to suspect a legal
connection between those facts and the issue of front pay. The after-acquired
evidence doctrine "requires factual as well as legal development[]." EEOC v. Farmer
Bros. Co., 31 F.3d 891, 901 (9th Cir. 1994). That observation is particularly true here
because the state of the law at the time was decidedly against the Secretary on
18
whether the after-acquired evidence doctrine applied to conduct occurring after an
employee's termination. See Carr v. Woodbury County Juvenile Det. Ctr., 905
F. Supp. 619, 629 (N.D. Iowa 1995) (declining to extend McKennon to misconduct
that occurred after the employment relationship had ended); Sigmon v. Parker Chapin
Flattau & Klimpl, 901 F. Supp. 667, 682 (S.D. N.Y. 1995) (same); Ryder v.
Westinghouse Elec. Corp., 879 F. Supp. 534, 537 (W.D. Pa. 1995) (same); but see
Medlock v. Ortho Biotech, Inc., 164 F.3d 545, 555 (10th Cir. 1999) (stating that
"McKennon may permit certain limitations on relief based on post-termination
conduct.").
While the Secretary developed a factual record that may have arguably been
broad enough to encompass an after-acquired evidence defense as it related to the
impracticability or impossibility of reinstatement, he certainly never developed a legal
or factual argument that the doctrine should preclude an award of front pay. Thus,
the district court had no opportunity to decide the issue now before this court, that is,
whether the after-acquired evidence doctrine should affect a plaintiff's right to front
pay when reinstatement is impracticable. The Secretary's waiver of this issue is
apparent when examining the district court's memorandum and order. The district
court discussed the misconduct extensively in the section of the memorandum
addressing reinstatement, but never mentioned the misconduct in the section
addressing front pay. Because the Secretary never argued the misconduct should
preclude front pay, the district court never considered the issue.
This case is analogous to Farmer Bros. There, the defendant attempted to
impeach the plaintiff by introducing facts about her misconduct without making any
legal argument the misconduct should preclude an award of front pay under the after-
acquired evidence doctrine. 31 F.3d at 901. The Ninth Circuit concluded the
defendant "failed to raise properly the after-acquired evidence defense." Id.
Similarly, here the Secretary introduced facts about Sellers's misconduct, but did so
19
only to show the impracticability of reinstatement. The Secretary never argued the
misconduct should preclude an award of front pay.
The factual record developed by the Secretary at the hearing further indicates
he waived the front pay issue. In McKennon, the Supreme Court held "[w]here an
employer seeks to rely upon after-acquired evidence of wrongdoing, it must first
establish that the wrongdoing was of such severity that the employee in fact would
have been terminated on those grounds alone if the employer had known of it at the
time of the discharge." 513 U.S. at 362-63. While the majority now states the test
somewhat differently (see ante at 11 & n.1), McKennon would have required the
Secretary to show he would have terminated Sellers for her misconduct in order to
make an award of front pay inappropriate.
Here, the Secretary did not present any evidence showing he would have
terminated Sellers for her misconduct. Instead, the Secretary only presented evidence
showing he would not reinstate Sellers. In a Title VII case, the relevant consideration
for whether a successful plaintiff should be reinstated is whether reinstatement is
practicable or possible. E.g., Salitros v. Chrysler Corp., 306 F.3d 562, 572 (8th Cir.
2002). This consideration differs from the considerations for terminating an
employee who already holds a position. Misconduct that might make it impractical
to reinstate may not suffice to show an employer would have terminated.
Thus, the Secretary would have had to present markedly different evidence to
satisfy the McKennon standard. The employment of air traffic controllers is governed
by 5 U.S.C. § 7513(a), which provides "an agency may take an action covered by the
subchapter [which includes removal] against an employee only for such cause as will
promote the efficiency of the service." Furthermore, an "employee against whom an
action is taken under this section is entitled to appeal to the Merit System Protection
Board [MSPB]." Id. at § 7513(d).
20
To assess the reasonableness of a federal agency's termination of an employee
governed by § 7513, the MSPB considers the Douglas factors, so called pursuant to
the MSPB's decision in Douglas v. Veterans Admin., 5 M.S.P.R. 280, 305-06 (1981).
See, e.g., Grimes v. United States Postal Serv., 872 F. Supp. 668, 677-78 (W.D. Mo.
1994).
The twelve Douglas factors are:
(1) The nature and seriousness of the offense, and its relation to the
employee's duties, position, and responsibilities, including whether the
offense was intentional or technical or inadvertent, or was committed
maliciously or for gain, or was frequently repeated;
(2) the employee's job level and type of employment, including
supervisory or fiduciary role, contacts with the public, and prominence
of the position;
(3) the employee's past disciplinary record;
(4) the employee's past work record, including length of service,
performance on the job, ability to get along with fellow workers, and
dependability;
(5) the effect of the offense upon the employee's ability to perform at a
satisfactory level and its effect upon supervisors' confidence in the
employee's ability to perform assigned duties;
(6) consistency of the penalty with those imposed upon other employees
for the same or similar offenses;
(7) consistency of the penalty with any applicable agency table of
penalties;
(8) the notoriety of the offense or its impact upon the reputation of the
agency;
21
(9) the clarity with which the employee was on notice of any rules that
were violated in committing the offense, or had been warned about the
conduct in question;
(10) potential for the employee's rehabilitation;
(11) mitigating circumstances surrounding the offense such as unusual
job tensions, personality problems, mental impairment, harassment, or
bad faith, malice, or provocation on the part of others involved in the
matter; and
(12) the adequacy and effectiveness of alternative sanctions to deter
such conduct in the future by the employees or others.
Id. at 678 n.7.
Significantly, the Secretary did not ask any witness to discuss the Douglas
factors, which the FAA would have had to take into account in terminating Sellers if
the termination was to survive MSPB review. Nor did the Secretary ask any witness
to explain how Sellers's misconduct would establish cause for termination as would
"promote the efficiency of the service" under 5 U.S.C. § 7513, the relevant standard
if the issue was Sellers's termination rather than her reinstatement. Finally, the
Secretary did not ask any witness whether the FAA would have terminated Sellers for
the type of misconduct she committed at Bank of America, had she still been working
for the FAA at the time of the misconduct. In sum, not only did the Secretary fail to
make a legal argument regarding front pay, he also failed to develop the type of
factual record necessary to satisfy McKennon's standard.
We consider legal arguments raised for the first time on appeal only when they
require no additional factual development, or manifest injustice would result. Orr v.
Wal-Mart Stores, Inc., 297 F.3d 720, 725 (8th Cir. 2002). The Secretary would have
had to develop the factual record much more extensively to assert, and preserve, the
22
after-acquired evidence defense in the district court. Given the uncertain state of the
law on the issue whether the doctrine extended to post-termination misconduct, had
the Secretary made the legal argument he waived, I cannot conclude the district
court's decision to award front pay resulted in manifest injustice. Therefore, I do not
believe we should address the Secretary's belated argument about front pay.
II
Second, while I may agree with the majority's decision to extend McKennon
to post-termination misconduct if I thought we should reach the issue, see Kucia v.
Southeast Ark. Cmty. Action Corp., 284 F.3d 944, 949 (8th Cir. 2002) ("Equitable
remedies [of reinstatement and front pay] are forward-looking. They should depend
on the state of facts existing at the time the remedy is either granted or denied."), I do
not believe the Secretary presented sufficient evidence to prove his failure to reinstate
Sellers was attributable to her misconduct. Instead, I believe the record shows
Sellers's reinstatement was impractical due to other circumstances (i.e., the hostile
environment she would have faced working for an employer who still employed the
man who sexually harassed her). As a result, I believe post-termination misconduct
should not preclude an award of front pay in this case.
At the hearing, Sellers introduced the testimony of James Poole, a former vice
president of the FAA's Great Lakes Region. Poole testified regarding eighteen cases
in which he represented air traffic controllers who had been terminated by the FAA
and who sought reinstatement through the grievance and arbitration procedure. Each
of the eighteen cases involved misconduct equally as serious or more serious than the
misconduct Sellers committed at Bank of America (e.g., criminal sexual misconduct
with a child, embezzlement, fraud, alcohol problems, insubordination, battery, use of
illegal substances, child pornography, bribery, harassment of jurors). Poole explained
that many of the cases were resolved by a settlement agreement, with the FAA
reinstating the controllers involved.
23
The Secretary called Maureen Woods, an Airway Facility Division Manager
in the FAA's Great Lakes Region. At a meeting held in April 2001, Woods decided
the FAA would not voluntarily reinstate Sellers to her position as an air traffic
controller. Woods explained her decision was made solely because of the Bank of
America incident. Woods described the issue as one of trustworthiness. On cross-
examination, however, Woods acknowledged she had not reviewed any documents
regarding the Bank of America incident, and instead based the decision on oral
information the FAA attorneys provided her at the April 2001 meeting. She
acknowledged she did not give Sellers an opportunity to explain her version of the
incident, and she was "a little rushed for time, in terms of we needed to get back to
the court to make a decision on reinstatement, and I accepted what the attorneys
presented at the meeting." App. at 236.3
The Secretary also called Patricia Healey, a Personnel Services Branch
Manager in the Human Resources Management Division. Healey testified about the
procedures the FAA uses to make hiring decisions, which involve the use of
"suitability grids" that grade various types of misconduct into four categories – A, B,
C, and D. Healey testified the Bank of America incident would be considered a D
violation, which is defined as "[m]ajor: conduct or issue which, standing alone, would
be disqualifying, under suitability, for any position." App. at 300. Healey explained
the Bank of America incident would fall under table 5, issues related to dishonesty.
App. at 250-51. The D category of table 5 provides:
Pattern of dishonesty as reflected in
! disregard for truth
! convictions records
3
The hearing on the reinstatement/front pay issues was originally scheduled for
June 18, 2001, and this may be the reason Woods testified she was "rushed" in April
2001 to make a decision on reinstatement.
24
! abuse of trust
! employment records
blackmail; counterfeiting; extortion; robbery, armed; intentional false
statement or deception or fraud in examination or appointment.
App. at 304.
Healey explained her belief that a single incident could satisfy the criteria of
a category D violation, even though a D violation required a "pattern" of misconduct:
Q. Does a pattern indicate to you that there are multiple
instances of the conduct?
A. No, not necessarily.
Q. Do you believe that one incident could result in a finding
that there was a pattern?
A. Because of the forgery, it was an act of forgery, if that is
indeed what happened, but it's also an abuse of trust for the
position. So, there is a pattern of dishonesty in the
individual based on those facts.
App. at 257.
Ultimately, Healey testified only that it was "not likely" a person who
committed the type of act Sellers committed at Bank of America would be accepted
as suitable for employment as an air traffic controller. App. at 250. On cross-
examination, Healey acknowledged the FAA never performed a suitability
determination on Sellers. Healey admitted she could not make an official
determination without seeing the relevant documents. She reiterated her opinion,
however, that it "seems that [Sellers's conduct] fits the category D in the instances
25
that I described earlier, and I don't think I could find this person suitable for
employment." App. at 256-57.
Based on this record, the district court found:
On account of plaintiff's misconduct which resulted in her termination
from [Bank of America], the FAA decided not to reinstate plaintiff to
FAA employment. In addition, persons who have been terminated or
forced to resign from previous employment on account of employment
misconduct are determined by the FAA to be "unsuitable" for
employment as a[n] Air Traffic Control Specialist.
Add. at 6.
In my view, the district court clearly erred in finding "persons who have been
terminated or forced to resign from previous employment on account of employment
misconduct are determined by the FAA to be 'unsuitable' for employment as a[n] Air
Traffic Control Specialist." The record developed by the Secretary clearly does not
prove that. Rather, the record only shows certain types of misconduct, those
classified as D violations, render a candidate unsuitable for employment.
Furthermore, the record clearly shows Sellers did not commit a D violation.
Sellers committed a single act of misconduct at Bank of America. A single incident
cannot logically constitute a "pattern" of dishonesty. The evidence presented by the
Secretary to prove a single incident constitutes a "pattern" was simply incredible, and
no other evidence in the record supports the district court's general statement that the
FAA considers all persons who commit misconduct of any kind on another job
"unsuitable" for employment. Thus, to the extent the district court credited the
Secretary's evidence regarding the suitability grids, it clearly erred in finding Sellers's
misconduct met the requirements for a category D violation and rendered her
unsuitable as an air traffic controller.
26
In my view, the district court's findings regarding the impracticability or
impossibility of Ms. Sellers's reinstatement turned primarily upon the hostility of the
environment she would be exposed to if reinstated. The coworker who had sexually
harassed Sellers was still employed by the FAA. In addition to that primary fact, I
believe the district court merely added the secondary fact the Secretary had decided
not to reinstate Sellers, without giving much thought to whether the reinstatement
decision was actually justified for the reasons given by the Secretary.
III
In sum, the Secretary failed to argue post-termination misconduct should
preclude an award of front pay before the district court, failed to develop a factual
record to prove Sellers's misconduct would have resulted in her termination under the
McKennon standard, and further failed to prove the misconduct, standing alone,
precluded reinstatement or front pay. Sellers's reinstatement was impractical due to
circumstances not attributable to her, and therefore she was still entitled to an award
of front pay. Under these circumstances, I see no need for a remand and I respectfully
dissent.
______________________________
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