‘Gossett’ Eschews Employers’ Reliance on ‘McDonnell Douglas’ in Summary Judgment

Tennessee employers took one on the chin when the Tennessee Supreme Court recently decided Gossett v. Tractor Supply Inc.,[1] holding that the burden-shifting paradigm of McDonnell Douglas Corp. v. Green[2] is “incompatible with Tennessee summary judgment jurisprudence.”

In McDonnell Douglas, the United States Supreme Court identified the “basic allocation of burdens and order of presentation of proof in Title VII cases alleging discriminatory treatment.” Tex. Dep’t of Cmty. Affairs v. Burdine.[3] According to McDonnell Douglas and Burdine, a rebuttable presumption that an employer unlawfully discriminated or retaliated against an employee exists if that employee proves a prima facie case.[4] At that point, the burden of production shifts to the employer to articulate a legitimate and nondiscriminatory (or nonretaliatory) reason for the adverse employment action.[5] If the employer satisfies its burden, the presumption of discrimination or retaliation “drops from the case.”[6] The employee is then required to demonstrate “by a preponderance of evidence that the legitimate reasons offered by the [employer] were not its true reasons, but were a pretext for discrimination.”[7]

The McDonnell Douglas paradigm has provided the framework for summary judgment motions in federal courts since 1973. Tennessee courts first adopted McDonnell Douglas to affirm the dismissal of a Tennessee Human Rights Act (THRA)[8] claim in 1984.[9] Since then, for more than a quarter-century, the McDonnell Douglas framework has been utilized in at least 25 published decisions of the Tennessee Supreme Court and Court of Appeals, including 18 involving summary judgment.[10]

Indeed, as late as 2008, in Allen v. McPhee,[11] the Tennessee Supreme Court utilized the McDonnell Douglas framework to affirm summary judgment in a THRA retaliation claim.

The Gossett Decision
All that has now changed. Gossett is a retaliatory discharge case under the Tennessee common law. The employee claimed that he was fired for refusing to remain silent about illegal activity. Tractor Supply moved for summary judgment, in part, by articulating its legitimate non-retaliatory reason for the termination (a reduction in force that purported to eliminate a redundant position) and arguing that the employee could not prove pretext, an essential element under the McDonnell Douglas framework.

In a 3-2 decision,[12] the Gossett majority held that applying the McDonnell Douglas framework at the summary judgment stage was incompatible with Tennessee summary judgment jurisprudence as announced in Hannan v. Alltell Publishing Co. in 2008.[13]

As Tenn. R. Civ. P. 56.04 is interpreted in Hannan, a party moving for summary judgment and “seek[ing] to shift the burden of production to the nonmoving party who bears the burden of proof at trial must either: (1) affirmatively negate an essential element of the nonmoving party’s claim; or (2) show that the nonmoving party cannot prove an essential element of the claim at trial.”[14] The Gossett majority held that merely offering a legitimate reason for the employer’s actions does not meet the Hannan requirement of showing that the nonmoving party cannot prove an essential element of the claim at trial. The court reasoned, “A legitimate reason for discharge, however, is not always mutually exclusive of a discriminatory or retaliatory motive and thus does not preclude the possibility that a discriminatory or retaliatory motive played a role in the discharge decision.”[15] Moreover, said the court, evidence showing a legitimate reason for discharge may satisfy McDonnell Douglas “without tending to disprove any factual allegation by an employee.”[16] Applying this reasoning to the facts before it, the court held that statements by Tractor Supply that reducing the workforce was one reason for discharging the employee does not show that reducing the workforce was the exclusive reason and does not show an absence of a retaliatory motive or disprove any of the plaintiff’s allegations.[17]

The Gossett majority then noted that the McDonnell Douglas framework is “particularly appropriate at trial,” but held that it is “ill-suited for determining whether ‘there is no genuine issue of any material fact.’”[18] The court also criticized its decision in Allen (also authored by Justice Holder) in such a way as to make it clear, implicitly if not explicitly, that the Gossett holding applies to summary judgment in THRA cases or any cases that are analyzed under the McDonnell Douglas framework.[19]

Justice Clark concurred with the result but dissented in order to question why the majority used this common law retaliatory discharge case to depart from McDonnell Douglas. Justices Clark and Koch would have denied the employer’s motion for summary judgment because the record was replete with evidence that the employer’s stated reason for discharging the plaintiff was pretextual.[20] Justice Clark pointed out that the McDonnell Douglas framework has served Tennessee Courts long and well in employment law cases, including those since Tennessee began departing from the federal summary judgment standard.[21] Tennessee is one of nine states that have rejected the federal standard for summary judgment. However, all of those states continue to apply the McDonnell Douglas framework at the summary judgment stage in employment cases.[22] Moreover, Gossett places Tennessee in one of only three jurisdictions that have abandoned McDonnell Douglasat the summary judgment stage in employment discrimination and retaliation cases.[23]

Justice Clark argued that McDonnell Douglas is compatible with Hannan because once the employer has submitted evidence that the employee was discharged for a legitimate nondiscriminatory (or retaliatory) reason, the employer has shown that the plaintiff cannot prove an essential element in the case sub judice, i.e., that a violation of a clear public policy was a substantial factor in the termination decision.[24] This affirmative showing would then shift the burden of production to the plaintiff-employee under Hannan.[25] The majority was apparently not persuaded.

New Approach, New Problems

Gossett largely eviscerates a Tennessee employer’s ability to obtain summary judgment in employment discrimination and retaliation in state court cases. Before Gossett, if the employer articulated a legitimate reason for its adverse action supported by admissible evidence, and the plaintiff could not present evidence of pretext, the case was dismissed. Now, articulating the legitimate reason for the decision, no matter how compelling the evidence, is not enough to shift the burden to the plaintiff to present evidence of pretext. Moreover, in retaliation cases, the upshot of the Gossett majority’s criticism of Allen is that if a plaintiff can establish temporal proximity between the protected activity and the termination, without more, the plaintiff prevails at summary judgment. As Justice Clark points out, correctly, a majority of federal courts of appeals have affirmatively rejected the proposition that temporal proximity alone is sufficient evidence of pretext to survive summary judgment.[26]

If presenting evidence that the employer had a legitimate, nondiscriminatory (or retaliatory) reason for discharging the plaintiff does not negate an essential element of the plaintiff’s claim, employers are left to wonder what evidence does. Put another way, how does an employer present undisputed evidence that a legitimate reason was the exclusive motivation for discharging a plaintiff without stating its reason and forcing the plaintiff to produce evidence that the employer’s stated reason is pretextual? The Gossett decision leaves the lower courts and litigants without any guidance. Moreover, given the reasoning in Gossett, Justice Clark articulates an apparently valid concern that the reasoning will impact the employer’s ability to prevail on a motion for directed verdict at trial.[27] Even if the motion for directed verdict is not impaired, an employer will have to try the case in order to have the opportunity for the court to dismiss a lawsuit where there is undisputed evidence that a legitimate reason was the exclusive motivation for discharging the plaintiff.[28]

So what is the bottom-line impact of Gossett? Two results readily come to mind. First, employment discrimination and retaliation cases in Tennessee just became much more expensive for employers to defend and to settle. Second, plaintiffs’ counsel will become more likely to plead state law causes of action exclusively, foregoing the corresponding federal claim, so as to defeat removal on federal question grounds.

There is one silver lining for employers. Gossett is clearly a procedural decision under Tennessee summary judgment law. It will not impact how federal courts decide summary judgments in a discrimination or retaliation case, regardless of whether the case is first filed there or is removed from state court. Employers will be well served to remove discrimination and retaliation cases to federal court where there is jurisdiction for such removal.

Notes

  1. 320 S.W.3d 777, 779 (Tenn. 2010)
  2. 411 U.S. 792 (1973).
  3. Tex. Dep’t of Cmty. Affairs v. Burdine, 450 U.S. 248, 252 (1981).
  4. Id., 450 U.S. at 254.
  5. McDonnell Douglas, 411 U.S. at 252-53
  6. Id. at 255 n. 10.
  7. Burdine, 450 U.S. at 253.
  8. Tenn. Code Ann. §§ 4-21-101, et seq.
  9. Bruce v. W. Auto Supply Co., 669 S.W. 2d 95, 97 (Tenn. Ct. App. 1984).
  10. Gossett, 320 S.W.3d at 792 (Clark, J., dissenting) (collecting cases).
  11. 240 S.W. 3d 803, 820-21 (Tenn. 2007).
  12. Justice Holder delivered the opinion of the Court in which Justice Wade and Justice Lee joined; Justice Clark authored the concurring and dissenting opinion in which Justice Koch joined.
  13. 320 S.W. 3d at 783, citing Hannan v. Alltell Publishing Co., 270 S.W. 3d 1, 8-9 (Tenn. 2008).
  14. 270 S.W. 3d at 8-9.
  15. 320 S.W. 3d at 782.
  16. Id.
  17. Id. at 783.
  18. Id., citing Tenn. R. Civ. P. 56.04.
  19. Id. at 783-84.
  20. Id. at 790-91 (Clark, J. dissenting).
  21. Id. at 791.
  22. Id. at 793.
  23. Id.
  24. Id. at 789-90.
  25. Id.
  26. Id. at 794.
  27. Id.
  28. Id. at 786.

Edward Phillips Edward G. Phillips is a lawyer with Kramer Rayson LLC in Knoxville, where his primary areas of practice are labor and employment law. He graduated with honors from East Tennessee State University and received his law degree from the University of Tennessee College of Law in 1978 with honors, and as a member of The Order of the Coif. He is a former chair of the Tennessee Bar Association’s Labor and Employment Law Section.