March 6, 2013

The Third Circuit on “Pretext” in Employment Cases

Posted in Employment Law by Gene Killian |

Employment law cases often hinge on whether the employer’s “legitimate” business reasons for an adverse employment action were in fact a pretext for unlawful discrimination, or retaliation.  Can a “pretext” exist when the employee breaks safety regulations, for example, resulting in the death of a co-worker?  Maybe.

The recent Third Circuit decision in the tragic case of Araujo v. New Jersey Transit brought these issues into the spotlight.  Araujo was a conductor-flagman for NJT.  One of his jobs was to protect contractors working on the tracks from oncoming trains.  He was also responsible for ensuring that contractors were safe from overhead electrical wires (known in railroad parlance as a “catenary”).  Due to a miscommunication, he permitted a construction crew to work in the area of energized wires, and one of the crew was electrocuted.  Araujo witnessed the man’s death, and was severely traumatized. 

On the evening of the incident, NJT ordered drug tests for two NJT linemen who were also responsible for protecting the construction crew from electrified wires – but, significantly, did not order such a test for Araujo.

Araujo gave a taped statement to NJT about the accident.  He then entered NJT’s Employee Assistance Program, and an NJT counselor confirmed to management that Araujo was medically unable to work due to a work-related injury.

The problem began shortly thereafter, when Araujo’s supervisor prepared disciplinary charges against him for violating work rules.  The rules required conductors to prohibit people under their protection from going near a catenary unless the conductor knew for sure that the catenary had been de-energized.  Araujo was suspended without pay pending a disciplinary hearing.  The hearing officer determined that Araujo had in fact violated work rules, and, as a result, he was assessed a time-served suspension without pay.

Araujo filed a complaint with the OSHA Officer of Whistleblower Protection.  The Federal Rail Safety Act (“FRSA”) contains specific whistleblower provisions, which, among other things, prohibit retaliation against an employee for notifying the railroad carrier of a work-related personal injury or work-related illness.  OSHA issued a finding in favor of Araujo, and assessed $569,587 in damages against NJT, which NJT sought to overturn in an ensuing Court proceeding.      

The FRSA incorporates the provisions of the Aviation Investment and Reform Act for the 21st Century, or “AIR-21.”  AIR-21 contains a familiar, but different, construct for whistleblower cases.  To succeed, the employee-claimant must show (1) that she engaged in a protected activity; (2) that the employer knew she had engaged in the protected activity; (3) that she suffered an unfavorable personnel action; and (4) that the protected activity was a contributing factor to the unfavorable action.  NJT conceded prongs 1 through 3, but contested prong 4 based upon Araujo’s violation of safety procedures. 

The court noted that AIR-21 is more favorable to the employee than other federal employment laws, because the employee need only show that the protected activity was a “contributing factor” – not the sole or predominant cause.  Nor did the employee have to show that management had a retaliatory motive. Once the employee makes a prima facie showing under AIR-21, the burden shifts to management to show, by clear and convincing evidence, that it would have taken the same unfavorable personnel action in the absence of the protected activity.

Here, Araujo sustained his burden by relying upon “temporal proximity” evidence and also “adverse disparate impact” evidence.”  On the “temporal proximity” point, Araujo argued that, although NJT ordered drug tests on two other employees on the night of the incident, NJT elected not to test Araujo.  In addition, only a few days after Araujo reported symptoms relating to the incident, NJT brought disciplinary charges.  On the “disparate impact” point, Araujo argued that, in the five years preceding the incident, no other conductor-flagmen were disciplined for violating the work rules.  (NJT responded by contending, quite logically, that Araujo was the only conductor–flagman ever to allow a contractor to be electrocuted by a live catenary while under his protection.)

The court, reversing the district court’s grant of summary judgment in favor of NJT, ruled that there was sufficient evidence to allow the case to proceed to trial, primarily because “NJT decided to file disciplinary charges only after Araujo reported his injury.”  (The court did note, however, that “Araujo has not articulated an overwhelming case of retaliation”; the court was not commenting upon whether Araujo would ultimately win, only that he should be allowed to try.)

The most interesting point about this case for me, though, is that a hearing officer had specifically found that Araujo had violated the work safety rules.  The district court held that such a finding proved that NJT’s actions were not retaliatory.  But the appeals court disagreed, writing:  “NJT’s argument that Araujo committed an actual violation of the…rules does not shed light on whether NJT’s decision to enforce these rules against a conductor-flagman for the first time was retaliatory.”   

Here are a few takeaways from this case from the perspective of management. 

First, this case points up the need to apply rules consistently.  Why were two employees drug-tested while Araujo wasn’t?  Why were steps not taken to ensure that Araujo was specifically advised (preferably not only orally, but with some sort of writing or e-mail) that the catenary was energized?  Were other (nonfatal) violations of the safety rules followed up upon?  I say these things not to indicate that NJT was negligent, but only to emphasize that inconsistency in the application of rules is the mother of many foulups and liabilities. 

Second, if you’re contemplating disciplinary action against an employee, it’s best to commence the proceeding immediately upon completing your investigation.  The longer you wait, the more likely it is that the finder of fact will deem the proceeding to have been contrived.

And finally, if you’re going to have an employee assistance program, be careful of using statements made through such a program against the employee.  That usually will not be looked upon kindly.          

You can read the full Araujo decision by clicking here.

-- Gene Killian