Court Opinion

ID: 4209914
Source: CourtListenerOpinion
Date Created: 2017-10-06 16:17:08.974425+00
Date Added: 2024-06-11T14:41:21.076402
License: Public Domain

10/06/2017
               IN THE COURT OF APPEALS OF TENNESSEE
                          AT KNOXVILLE
                                 May 23, 2017 Session

     JERRY L. LAWRENCE, ET AL. v. CHATTANOOGA-HAMILTON
              COUNTY HOSPITAL AUTHORITY, ET AL.

                Appeal from the Circuit Court for Hamilton County
               No. 12-C-465      Ward Jeffrey Hollingsworth, Judge
                      ___________________________________

                           No. E2016-02169-COA-R3-CV
                       ___________________________________

This appeal involves an employment discrimination and retaliation lawsuit initiated by
former employees of a hospital’s Security Services Department. The trial court granted
summary judgment to the hospital defendants on all claims, holding that plaintiff
employees had failed to establish a prima facie case of discrimination or retaliation. The
employees appeal. We affirm.

       Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court
                           Affirmed; Case Remanded

JOHN W. MCCLARTY, J., delivered the opinion of the court, in which CHARLES D.
SUSANO, JR. and KENNY W. ARMSTRONG, JJ., joined.

John C. Harrison and Everett L. Hixson, III, Chattanooga, Tennessee, for the appellees,
Chattanooga-Hamilton County Hospital Authority, d/b/a Erlanger Health Systems,
Charlesetta Woodard Thompson and Gregg Gentry.

Stuart F. James, Chattanooga, Tennessee, for the appellants, Jerry L. Lawrence, Gary
Talley, Harold Holliday, Kenneth R. Cookston, Ronald J. Capetz, Gary C. Avans, and
Rodney J. Patton.

                                       OPINION

                                  I. BACKGROUND

      On April 30, 2011, the Chattanooga-Hamilton County Hospital Authority, d/b/a
Erlanger Health Systems and its executive management team (“Erlanger”) laid off the
over 20-member police force, the Erlanger Security Services Department (“the SSD”
hereinafter, but also referred to as the “Erlanger Police Department” by the appellants
Jerry L. Lawrence, Gary Talley, Harold Holliday, Kenneth R. Cookston, Ronald J.
Capetz, Gary C. Avans, and Rodney J. Patton (“Officers”)). The SSD was a fully
commissioned and POST-certified police department with law enforcement and arrest
authority. Earlier in 2011, Erlanger decided to outsource its security services to Walden
Security (“Walden”) beginning May 1, 2011. Appellant Rodney Patton was the
supervisor and/or chief of the SSD at the time of the layoff. All other appellants were
employees of the SSD.

       Erlanger has an extensive history of outsourcing departments not considered
within its “core competencies.” Between 1997 and 2011, Erlanger outsourced its Rehab
Services Department, LifeForce helicopter service, and Information Technology
Department. In 2009, Erlanger laid off most of the employees in its Construction
Services Department, offering severance packages. After this lawsuit was initiated,
Erlanger outsourced its Dietary Department and the Environmental Services Department
in 2014. The decision-makers involved, leading up to and overseeing the outsourcing
decision for the SSD, included CEO Jim Brexler, COO Charlesetta Woodard-Thompson,
CLO Dale Hetzler, Corporate Preparedness Officer (“CPO”) Debbie Shepherd, Senior
Vice President (“SVP”) of Human Resources Gregg Gentry, Vice President (“VP”) of
Governmental and Community Affairs Doug Fisher, and CFO Britt Tabor.

       The record reveals that Erlanger’s top management began discussing concerns
about the adequacy of the SSD in the mid to late 2000s. Sworn testimony by upper level
management, including SVP Gentry and COO Woodard-Thompson, revealed difficulties
with hiring and understaffing despite the department being adequately budgeted.
Erlanger augmented the SSD with off-duty Chattanooga Police Department officers to
make up for the shortfall. Outsourcing discussions began as early as 2008. According to
his Declaration, SVP Gentry spoke with Appellant Patton in 2008 about outsourcing.
However, whether or not this conversation occurred is disputed by Patton’s Affidavit.

        In fall 2009, VP Fisher and CLO Hetzler informed upper Erlanger management
that Dan Johnson, the Chattanooga Mayor’s Chief of Staff, had informed them that the
city of Chattanooga would no longer commission the SSD officers (required in order for
them to carry firearms). VP Fisher had a similar conversation with Allen Branum, Chief
Deputy of the Hamilton County Sheriff’s Department, although it is not clear whether
that conversation dealt with Hamilton County commissioning the SSD officers or the city
doing so. VP Fisher communicated this information to management, further increasing
concern over Erlanger’s ability to maintain an internal police force.

        In late 2009 and into early 2010, Erlanger outsourced its annual facilities security
review to Security Assessments International (“SAI”). SAI’s review recommended
against outsourcing security and for keeping an internal police force. The report noted,
inter alia:
                                           -2-
              The Erlanger Police Department’s personnel have done an
              excellent job in providing protection for Erlanger’s patients,
              visitors, and employees at all EHS locations. This is
              noteworthy, taking into consideration the limited number of
              staff and resources currently available. This is due, in part to
              the fact that the hospital is the beneficiary of knowledgeable,
              experienced, and dedicated police and security personnel who
              have been able to establish, implement and manage an
              acceptable security program despite these budgetary and
              manpower constraints . . . .

              The Department is staffed below industry standards for the
              size, location, and criminal demographics of the Erlanger
              Health System . . . .

              All Security Guard positions should be replaced with armed
              police officers as the Security Guard position becomes
              vacant. Only armed police officers should be utilized in the
              protection of Erlanger Health System people and property.

SAI recommended increasing the number of officers beyond the current number
presently in the budget.

       Despite SAI’s recommendations, on April 12, 2010, after discussions about
outsourcing the SSD, Erlanger contracted with Walden to both manage the SSD and to
augment its ranks with Walden’s own unarmed, non-commissioned officers. The
decision-makers for this agreement included CEO Brexler, COO Woodard-Thompson,
CLO Hetzler, CPO Shepherd, SVP Gentry, and Pat Charles, Director of Human
Resources. The practical effect of the management agreement between Walden and
Erlanger meant that Walden would manage and augment the SSD from April 2010 until
the end of April 2011.

       By the summer of 2010, a committee consisting of COO Woodard-Thompson,
CLO Hetzler, CPO Shepherd, SVP Gentry, and VP Fisher continued outsourcing
discussions followed by a decision to fully outsource the SSD and seek bidders. This
decision was also communicated to and approved by CEO Brexler, and it involved CFO
Tabor. The Declaration of SVP Gentry and the deposition of COO Woodard-Thompson
provide that the reasons for outsourcing included Erlanger’s inability to properly manage
a security force; Erlanger’s inability to properly staff the SSD in its current form and the
necessity for increasing the SSD’s size as recommended by SAI; and the possibility that
the SSD’s officers would lose their commissions, making managing a security force even
more difficult in the future.
                                             -3-
        In December 2010, Erlanger selected Walden, from among several other bidders,
for full outsourcing of the hospital’s security. The selection committee consisted of COO
Woodard-Thompson, CPO Shepherd, and six other individuals not involved with the
initial outsourcing decision. While Walden’s bid required budget increases for the SSD,
this was because Walden’s proposal required a greater number of employees than
presently employed. The selection committee sent the proposal to CEO Brexler who
subsequently submitted it to Erlanger’s Board of Trustees. On March 21, 2011,
Erlanger’s Budget and Finance Committee of the Board of Trustees approved the
agreement with Walden. The full Board of Trustees approved the agreement
unanimously three days later. All the SSD employees were laid off on April 30, 2011.

       The SSD employees were offered 12-week severance packages that released
Erlanger of all liability and removed from the employee all rights to sue Erlanger. Seven
former members of the SSD accepted the packages, including two officers in this case,
Kenneth Cookston and Gary Talley. Four officers, Capetz, Avans, Lawrence, and
Holliday, filed unpaid wage claims with the Department of Labor after their termination.1
Mr. Capetz filed his claim on May 25, 2011, and the other three appellants filed their
claims in August 2011.

       All the SSD employees were offered the chance to apply for positions with
Walden. No officers in this case applied. Eight other former employees did apply, and
Walden made seven offers, six of which were accepted. Five ended up working for
Walden after one former employee failed to complete training. The SSD employees were
not guaranteed that they would receive similar or the same pay or benefits while working
for Walden as they had received as employees of Erlanger.

       On April 5, 2012, Officers filed this lawsuit. Appellants Talley, Holliday,
Lawrence, Cookston, Capetz, and Avans alleged employment discrimination on the basis
of age under the Tennessee Human Rights Act (“THRA”). Appellant Patton alleged
employment discrimination on the basis of race under THRA. Appellants Lawrence,
Holliday, Capetz and Avans alleged retaliatory discharge for filing unpaid wage claims
with the Tennessee Department of Labor. Officers also asserted violations of the
Tennessee Wage Regulation Act, but that claim was dismissed by the trial court and is
not raised on appeal. Erlanger filed for summary judgment on all other claims on May
20, 2016. After several delays, the trial court held oral arguments on the motion for
summary judgment on September 12, 2016.

      Erlanger argued in its motion for summary judgment that Appellants Lawrence,
Holliday, Capetz, and Avans could not prove a prima facie case of retaliation because

       1
        The claim regarded “the failure of Erlanger to properly compensate the plaintiffs and to
give them time to take a break for lunch throughout the course and scope of their employment.”
                                             -4-
they were fired before they submitted unpaid wage complaints to the Tennessee
Department of Labor. Erlanger also asserted that the claims of Appellants Cookston and
Talley were barred by the releases they signed when they accepted a severance agreement
with Erlanger. Erlanger further claimed that Appellant Patton could not prove a prima
facie case of race discrimination because he was not replaced or treated differently than a
non-minority; all Officers were terminated. Erlanger argued similarly that the other
employees cannot prove a prima facie case of age discrimination because they were all
terminated together and, as a result, none was replaced by a younger person or treated
differently than a younger person.

       Officers argued primarily that Appellant Patton’s Affidavit and the interrogatory
answers of Appellants Cookston and Holliday raise material factual disputes that call the
entire Gentry Declaration into question. Officers make no effort to show that they are
trying to prove a prima facie case of discrimination. Their primary evidence at the
summary judgment stage consisted of Patton’s many assertions in an affidavit that
Officers allege undermines Erlanger’s arguments and rationale for outsourcing and the
layoffs. The Patton Affidavit included the following pertinent assertions and statements
of Patton himself:

              At no time during my discussions with anyone in
              management was an issue raised as to the sufficiency of the
              police force at Erlanger or the ability to maintain an adequate
              police force to maintain security at the hospital. I did
              participate in discussions that involved hiring Walden to help
              the police department in a support role with the police
              department providing the armed security that [it] had been
              providing at Erlanger. . . .

              . . . There was no issue surrounding the commissions that I
              am aware of. Moreover, each of the police officers or
              plaintiffs in this case continue to hold their commissions and
              each is post certified and was able to carry a firearm to
              provide armed security. . . . At no time did anyone raise any
              issues about the lack of commissions being provided to the
              police force in Erlanger. . . .

                                          ***

              To my knowledge none of the Erlanger security guards
              providing security are properly armed, post-certified, or
              commissioned by the city of Chattanooga to provide police
              protection. Instead, off-duty Hamilton County Sheriff’s
              Department inadequately provide that protection and both the
                                         -5-
cost of having the Sheriff’s Department and Walden at the
hospital are much more expensive and cost the hospital more
money than it would have cost the hospital to adequately
provide security through the Erlanger Police Department . . . .

. . . I never felt that the police force could not provide the law
enforcement that is needed at the hospital. . . .

I raised concerns . . . that hiring a security company would
eliminate the ability to make arrests on the Erlanger campus. .
. . [The security company] would not be able to stop a suspect
for questioning, would not be able to perform the same duties
as a police force . . . .

I am aware that Erlanger has outsourced other departments
and other services at the hospital. When making such
outsourcing Erlanger has always provided for the employees
to either be employed by the outsourced service agency at the
same pay and with the same benefits as they enjoyed as
employees or, alternatively, Erlanger would accommodate
those employees by providing them with benefits and
retirement as an employee of Erlanger.

Erlanger did not make the same offer to me or any of my
police officers . . . . The officers and I were treated
differently than other employees who were the victims of
outsourcing by Erlanger for other services.

. . . I have reviewed the Erlanger security survey and I have
come to the conclusion that Erlanger acted in contravention to
that survey and its recommendations. . . . I am aware that the
budgetary concerns arising from Walden providing security
have increased the cost of maintaining security and ha[ve] not
been as cost-effective nor effective as a Police Department.

. . . It is my opinion that those officers were fired because of
their age and that those officers and I were treated differently
because of our race and/or age. Erlanger had no substantial
justification for spending more money to outsource security
for an unarmed security agency to provide security at the
hospital which is contrary to the security survey . . . .

                              ***
                              -6-
             Based upon what I know, my experience, and my knowledge
             of the facts and circumstances of this claim Erlanger made a
             decision to force out police officers who were about to vest in
             their retirement plans, who were over the age of 40, or black,
             and who are otherwise older . . . .

Patton asserts that Erlanger’s management never told him about their various concerns
regarding the adequacy of the SSD. The SSD officers’ commissions were not scheduled
to expire until 2050, despite SVP Gentry’s concerns to the contrary. Patton states that he
had no knowledge or belief that commissions were being threatened. Erlanger’s
management never broached the issue with him. Patton notes that he was never involved
in outsourcing discussions, including the 2008 discussion between Patton and SVP
Gentry alleged in the Gentry Declaration. He was never made aware of the possibility of
outsourcing except for the supplemental work Walden did for Erlanger from April 2010
to April 2011. According to Patton, Erlanger’s management, including CPO Shepherd,
made repeated statements that the SSD would never be outsourced and that the SSD jobs
were safe. After the outsourcing decision was made, Patton was not informed of the
reasons for the outsourcing.

        Officers also relied on answers to interrogatories by Appellants Holliday and
Cookston. In response to the interrogatory, “State the basis for your contention that
[COO] Charlesetta Woodard Thompson is individually liable to you,” Appellant Holliday
stated:

             Because she made statement in 2011 that the police officers at
             Erlanger had lost commission privileges to carry a weapon
             and this statement was not true. The City Commission cards
             are valid through 2050. She also informed us that we would
             remain employed at the hospital in a meeting with [COO]
             Charlesetta, [SVP] Gregg Gentry, and CPO Debbie Shepherd.
             We understood we would be doing the police portion of the
             work with Walden acting as back up for security purposes.

In response to interrogatory number 11, “State your basis for your contention that
defendant Gregg Gentry is individually liable to you,” Appellant Holliday responded:

             Because I feel that I was misled by him in our meetings
             regarding my job status. He misled us during meetings
             throughout the year we were training Walden Security. Mr.
             Gentry told us you “guys have nothing to worry about,
             everything is going to be OK.” Mr. Gentry never informed us
             of the intention to have Walden replace us as a police force.
             Despite his representations to the contrary, all of the police
                                          -7-
              officers were replaced by Walden Security despite
              recommendations in a written security survey to keep the
              police force on the various campuses. I feel that Gregg
              Gentry made misrepresentations about our status and whether
              we would be a part of an ongoing police force with a security
              company providing security support.

In response to interrogatory number 2 sent to Appellant Cookston, “State the basis for
your contention . . . that your employment at Erlanger was terminated ‘due to age,’” he
responded:

              Because the police officers at Erlanger were in their 50s, 60s
              and 70s. The decision to hire Walden was also contrary to the
              report given to the hospital by the security survey which
              recommended keeping us on as a police force. I also
              possessed my City Certification which is good until 2050. I
              was also a post certified police officer and became post
              certified in 1991. I was not given an explanation for my
              termination and based on the fact that I and the remaining
              officers who worked with me were older led me to the belief
              that we were being terminated because of age and the hospital
              wanting a younger security force in place overall. Walden is
              not a police department, it is a security agency.

       In sum, these interrogatories reveal Officers’ subjective beliefs that COO
Woodard-Thompson said the SSD commissions were at risk despite all current
commissions being valid until 2050, that Walden was only supplementing the SSD and
not replacing it entirely, that SVP Gentry provided assurances that the SSD jobs were not
at risk, that Erlanger management did not provide explanations for termination to
Officers, and that Erlanger acted against the recommendations of the SAI review and
with a goal of getting rid of an aging work force in its decision to terminate all employees
of the SSD.

       The trial court granted Erlanger’s motion for summary judgment on all claims.
The court held that Appellants Cookston and Talley’s age discrimination claims were
barred by accepting severances and signing releases on June 13, 2011. The trial court
noted: “The releases signed by these Plaintiffs state[] that the employee ‘. . . releases
Erlanger . . . from any and all claims, whether known or unknown, causes of action . . .
that arise out of the employee’s employment, or termination of the employee’s
employment with Erlanger. . . .’” The trial court further found that Capetz, Avans,
Lawrence, and Holliday’s retaliation claims were filed after their termination, May 2011
for Capetz and August 2011 for the other three, and, subsequently granted summary
judgment on the retaliation claims. The court observed: “It is, obviously, impossible to
                                          -8-
fire someone for something that has not happened.”

        The remaining age and race discrimination claims were dismissed because
Officers failed to prove a prima facie case of discrimination under the McDonnell-
Douglas analysis as followed by Yount v. FedEx Express, No. W2015-00389-COA-R3-
CV, 2016 WL 1056958, at *15–16 (Tenn. Ct. App. Mar. 17, 2016). Specifically,
Officers failed to establish the fourth prong of the analysis for both types of
discrimination. For age discrimination, this prong requires that the worker to be replaced
by or treated differently than a younger worker. For racial discrimination, it requires the
worker to be replaced by or treated differently than a non-minority. The court found it
was undisputed that all Officers were fired simultaneously and none were replaced.
Thus, it concluded that a prima facie case could not be proven in both instances. The
trial court held that Erlanger had negated an essential element of Officers’ claim and that
judgment as a matter of law was appropriate. Further, the court found any facts or factual
disputes raised by Officers’ affidavit or interrogatory answers to be immaterial to their
legal claims. Additionally, it found that Officers’ evidence raised no genuine issues of
material fact regarding pretextual reasons for Erlanger’s outsourcing decision.

                                       II. ISSUES

       We have consolidated the issues raised on appeal as follows:

              (1) Whether the trial court erred in granting summary
              judgment on Appellant Patton’s racial discrimination claim?

              (2) Whether the trial court erred in granting summary
              judgment on Officers’ age discrimination claims, including
              claims of Officers who accepted severance packages and
              signed releases?

              (3) Whether the trial court erred in granting summary
              judgment on Officers’ retaliation claims?

              (4) Whether the trial court erred in granting summary
              judgment, in part, on hearsay and hearsay statements of
              others?

                            III. STANDARD OF REVIEW

      A trial court’s ruling on a motion for summary judgment is reviewed de novo,
with no presumption of correctness. Russell v. HSBC Mortgage Servs., Inc., No. M2015–
                                         -9-
00197–COA–R3–CV, 2016 WL 1588091, at *11 (Tenn. Ct. App. Apr. 15, 2016) (citing
Rye v. Women’s Care Ctr. of Memphis, MPLLC, 477 S.W.3d 235, 250 (Tenn. 2015). In
doing so, “we make a fresh determination of whether the requirements of Rule 56 of the
Tennessee Rules of Civil Procedure have been satisfied.” Greeze v. Tennessee Farmers
Mut. Ins. Co., No. E2016-00792-COA-R3-CV, 2017 WL 1163680, at *4 (citing Estate of
Brown, 402 S.W.3d 193, 198 (Tenn. 2013)).

      Whether a statement is hearsay and whether it fits one of the exceptions to the
hearsay rule are questions of law and are subject to de novo review. Kendrick v. State,
454 S.W.3d 450, 479 (Tenn. 2015), cert. denied, 136 S. Ct. 335 (2015).

                                   IV. DISCUSSION

     The Tennessee Supreme Court in Rye stated our standard of review for summary
judgment as follows:

             Summary judgment is appropriate when “the pleadings,
             depositions, answers to interrogatories, and admissions on
             file, together with the affidavits, if any, show that there is no
             genuine issue as to any material fact and that the moving
             party is entitled to a judgment as a matter of law.” Tenn. R.
             Civ. P. 56.04. We review a trial court’s ruling on a motion for
             summary judgment de novo, without a presumption of
             correctness.

                                          ***

             [I]n Tennessee, as in the federal system, when the moving
             party does not bear the burden of proof at trial, the moving
             party may satisfy its burden of production either (1) by
             affirmatively negating an essential element of the nonmoving
             party’s claim or (2) by demonstrating that the nonmoving
             party’s evidence at the summary judgment stage is
             insufficient to establish the nonmoving party’s claim or
             defense. . . . The nonmoving party must demonstrate the
             existence of specific facts in the record which could lead a
             rational trier of fact to find in favor of the nonmoving party.

Rye, 477 S.W.3d at 250, 264–65 (emphasis in original).            In determining whether
summary judgment was properly granted,

             [w]e must view all of the evidence in the light most favorable
             to the nonmoving party and resolve all factual inferences in
                                         - 10 -
              the nonmoving party’s favor. Luther v. Compton, 5 S.W.3d
635, 639 (Tenn. 1999); Muhlheim v. Knox. Cnty. Bd. of
              Educ., 2 S.W.3d 927, 929 (Tenn. 1999). If the undisputed
              facts support only one conclusion, then the court’s summary
              judgment will be upheld because the moving party was
              entitled to judgment as a matter of law. See White v.
              Lawrence, 975 S.W.2d 525, 529 (Tenn. 1998); McCall v.
              Wilder, 913 S.W.2d 150, 153 (Tenn. 1995).

Demastus v. Univ. Health Sys., No. E2016-00375-COA-R3-CV, 2017 WL
829815 at *3 (Tenn. Ct. App. Mar. 2, 2017) (quoting Wells Fargo Bank,
N.A. v. Lockett, No. E2013-02186-COA-R3-CV, 2014 WL 1673745, at *2
(Tenn. Ct. App. Apr. 24, 2014).

            A. McDonnell-Douglas Burden-Shifting Analysis

       The THRA was enacted with the purpose of protecting individuals in Tennessee
from discrimination on the basis of “race, creed, color, religion, sex, age or national
origin in connection with employment . . . .” Tenn. Code Ann. § 4-21-101(a)(3) (2017).
Under the THRA, it is “a discriminatory practice for an employer to . . . discharge any
person . . . because of such person’s race . . . [or] age . . . .” Tenn. Code Ann. § 4-21-401
(2017). “The THRA was modeled on the federal anti-discrimination laws, and
‘Tennessee’s courts regularly consult the decisions of their federal counterparts for
guidance when called upon to construe and apply the Tennessee Human Rights Act.’”
Vawter v. E. I. du Pont de Nemours & Co., No. W2015-00874-COA-R3-CV, 2016 WL
3228129, at *3 (Tenn. Ct. App. Jun. 2, 2016) (quoting Wilson v. Rubin, 104 S.W.3d 39,
48 (Tenn. Ct. App. 2002)).

      As of June 10, 2011, the General Assembly’s addition of subsection (e) in
Tennessee Code Annotated section 4-21-311 appears to re-introduce the federal
McDonnell Douglas burden-shifting analysis in employment discrimination cases. Tenn.
Code Ann. § 4-21-311 (2017); see McDonnell Douglas Corp. v. Green, 411 U.S. 792,
802 (1973). Section (e) reads in pertinent part:

              In any civil cause of action alleging a violation of this chapter
              or of § 8-50-103, the plaintiff shall have the burden of
              establishing a prima facie case of intentional discrimination
              or retaliation. If the plaintiff satisfies this burden, the burden
              shall then be on the defendant to produce evidence that one
              (1) or more legitimate, nondiscriminatory reasons existed for
              the challenged employment action. The burden on the
              defendant is one of production and not persuasion. If the
              defendant produces such evidence, the presumption of
                                             - 11 -
              discrimination or retaliation raised by the plaintiff’s prima
              facie case is rebutted, and the burden shifts to the plaintiff to
              demonstrate that the reason given by the defendant was not
              the true reason for the challenged employment action and that
              the stated reason was a pretext for illegal discrimination or
              retaliation. The foregoing allocations of burdens of proof
              shall apply at all stages of the proceedings, including motions
              for summary judgment. The plaintiff at all times retains the
              burden of persuading the trier of fact that the plaintiff has
              been the victim of intentional discrimination or retaliation.

Tenn. Code Ann. § 4-21-311 (2017) (emphasis added). In the same bill, the General
Assembly also simultaneously added section 50-1-801, providing the same burden of
proof for common law retaliatory discharge claims. Tenn. Code Ann. § 50-1-801 (2017).
Further, our appellate courts have interpreted that the Tennessee Supreme Court’s
decision in Rye essentially and indirectly abrogated the Court’s prior holding in Gossett v.
Tractor Supply Co., 320 S.W.3d 777 (Tenn. 2010), that had previously discarded the
McDonnell Douglas framework for employment discrimination and retaliation causes of
action in Tennessee. See Yount, 2016 WL 1056958, at *7 (citing Rye, 477 S.W.3d at
264).

       As such, we recognize that the McDonnell Douglas burden-shifting analysis is
appropriate for THRA discrimination and common law retaliatory discharge claims, and,
therefore, Officers in the instant case were required to establish a prima facie case of
discrimination and/or retaliation to survive summary judgment. Tenn. Code Ann. §§ 4-
21-31, 50-1-801 (2017); Rye, 477 S.W.3d at 264; Yount, 2016 WL 1056958, at *15-16.

                             B. Racial Discrimination Claim

       Erlanger contends that Officers did not and cannot prove a prima facie case of
racial discrimination because Appellant Patton was not replaced or treated differently
than a non-minority. Erlanger points out that all Officers were fired simultaneously,
including all non-minority employees. Thus, Erlanger asserts summary judgment was
properly granted on Appellant Patton’s claim.

        Alternatively, Erlanger argues that it had legitimate, non-discriminatory reasons
for the decision to terminate all Officers, including Appellant Patton. Namely, Erlanger
asserts that it had concerns with its ability to manage a security force, concerns over its
inability to consistently staff the SSD, and a concern over the effectiveness of the
understaffed SSD.

       Officers do not broach the subject of establishing a prima facie case of
discrimination.   They instead assert that Appellant Patton’s Affidavit and the
                                      - 12 -
interrogatory responses of Cookston and Holliday raise genuine issues of fact as to
whether Erlanger’s stated reasons for firing Patton were a pretext for racial
discrimination.

        Due to the THRA’s stated purpose to “[p]rovide for execution within Tennessee of
the policies embodied” in federal civil rights laws, we frequently look to federal case law
when analyzing a claim under the THRA. Tenn. Code Ann. § 4-21-101(a)(1); Ferguson
v. Middle Tennessee State Univ., 451 S.W.3d 375, 380-81 (Tenn. 2014); Weber v. Moses,
938 S.W.2d 387, 390 (Tenn. 1996). To establish a prima facie case of racial
discrimination under McDonnell Douglas, a plaintiff may either present direct evidence
of intentional discrimination on the part of the defendant or show the existence of
circumstantial evidence which creates an inference of discrimination. Talley v. Bravo
Pitino Restaurant, LTD., 61 F.3d 1241, 1246 (6th Cir. 1995) (citing McDonnell Douglas
Corp, 411 U.S. at 802). Because the record before us is devoid of any direct evidence of
racial discrimination, we examine the latter, as did the trial court.

        To establish an inference or a circumstantial case of racial discrimination,
plaintiffs must show that:

       (1) they are members of a protected class;

       (2) they were qualified for their jobs;

       (3) they suffered adverse employment actions; and

       (4) they were replaced by individuals outside of their protected class,
       or treated less favorably than similarly situated employees outside of
       their protected class.

Walker v. Wholesale, Inc., No. 3:12-cv-0595, 2013 WL 4402912, at *9 (M.D. Tenn. Oct.
2, 2013) (citing Talley, 61 F.3d at 1246); see also Cobb v. State, No. M2014-01755-
COA-R3-CV, 2017 WL 1404341, at *7 (Tenn. Ct. App. Apr. 17, 2017) (citing
Hawthorne v. Univ. of Tennessee Health Sci. Ctr., 203 F. Supp. 3d 886, 891 (E.D. Tenn.
2016); White v. Baxter Healthcare Corp., 533 F.3d 381, 391 (6th Cir. 2008)).

       If the non-moving party fails to establish a prima facie case, when either the
movant either negates an essential element of the plaintiff’s claim or shows the non-
movant’s evidence is insufficient to establish an essential element of the claim, summary
judgment should be granted. Tenn. Code Ann. § 20-16-101 (2017); See Rye, 477 S.W.3d
at 264–65.

      If a plaintiff establishes a prima facie case of racial discrimination, this creates a
presumption that the defendant has unlawfully discriminated against the plaintiff, and the
                                           - 13 -
burden then shifts to the defendant “to articulate a legitimate, non-discriminatory reason
for the discharge.” Walker, 2013 WL 5502912, at *9 (citing DiCarlo v. Potter, 358 F.3d
408, 414 (6th Cir. 2004)). If the defendant carries this burden, “plaintiffs must then show
that ‘the legitimate reasons offered by the defendant were not its true reasons, but were a
pretext for discrimination.’” Id. (quoting DiCarlo, 358 F.3d at 414). However, the
ultimate burden of persuasion rests with the plaintiff. Id. (citing Talley, 61 F.3d at 1246).

       The record before us reveals that Officers failed to establish a prima facie case of
racial discrimination. Appellant Patton could not show that he was replaced or treated
differently than a non-minority as all the employees were terminated. Accordingly,
summary judgment was properly granted to Erlanger on this claim.

                           C. Age Discrimination & Releases

       Erlanger asserts that Officers did not and cannot establish a prima facie case of
age discrimination because all the employees were fired simultaneously, and, thus, none
were replaced by a younger person. As such, Erlanger contends that the grant of
summary judgment on Officers’ age discrimination claims was proper. Additionally,
Erlanger asserts that the trial court properly granted summary judgment on the age
discrimination claims of Appellants Cookston and Talley because they accepted
severance packages and signed releases which barred them from later suing Erlanger.

       Alternatively, Erlanger argues that it had legitimate, non-discriminatory reasons
for the decision to terminate all employees of the SSD, including Officers. Namely,
Erlanger asserts it had concerns with its ability to manage a security force, concerns over
its inability to consistently staff the SSD, and a concern over the effectiveness of the
understaffed SSD.

       Erlanger contends that there was no discussion of the age or demographic make-up
of the existing security force between Woodard-Thompson and Shepherd:

              Q: Did Debbie [Shepherd] raise with you any issues
              regarding the age and makeup of the security department after
              the report was issued by Security Assessments International?

              A: I don’t ever remember having a discussion about the age
              of the people in the department.

              Q: What about the experience of the people in the
              department?

              A: I don’t remember having a specific discussion about the
              experience of the people in the department.
                                           - 14 -
              Q: All right.

              A: Discussions mostly centered around getting a full staff.

The only discussion was whether the security personnel were qualified for the position, as
defined by the Erlanger position description.

       Similar to their racial discrimination claim, Officers do not attempt to show that
they established a prima facie case of age discrimination. Instead, they rely on Patton’s
Affidavit and Cookston and Holliday’s interrogatory answers to assert that Erlanger’s
reasons for terminating Officers were pretextual. In their brief, Officers contend that
Erlanger sought to get rid of “an aging Police Department” that would cost the hospital in
retirement expenses and health insurance.

       Much like in a racial discrimination case, a plaintiff may prove his or her case for
age discrimination under the THRA either through a direct or an indirect method of
proof. Ogg v. Campbell County Bd. of Educ., No. E2009-02147-COA-R3-CV, 2011 WL
13165339, at *5 (Tenn. Ct. App. Sep. 20, 2011) (citing Wilson v. Rubin, 104 S.W.3d 39,
49 (Tenn. Ct. App. 2002)). Because the record is bare of any “evidence of an employer’s
conduct or statements which, if believed, requires a conclusion that unlawful
discrimination was a substantial motivating factor for the employer’s actions,” we
examine the indirect method, as did the trial court. Id. (quoting Wilson, 104 S.W.3d at
49) (internal quotations omitted).

       To establish a prima facie case of age discrimination via indirect or circumstantial
proof, a plaintiff must show:

              (1) he was at least 40 years of age at the time of the alleged
              discrimination, i.e., “a member of a protected class;”

              (2) he was subjected to adverse employment action;

              (3) he was qualified for the position; and

              (4) he was replaced by a substantially younger person.

Stewart v. Cadna Rubber Co., No. W2013-00670-COA-R3-CV, 2014 WL 1235993, at *8
(Tenn. Ct. App. Mar. 26, 2014) (citing Kremp v. ITW Air Mgmt., No. 11-3235, 478 Fed.
Appx. 931, 2012 WL 1237790, at *1 (6th Cir. 2012)); see also Pierson v. Quad/Graphics
Printing Corp., 749 F.3d 530, 536 (6th Cir. 2014) (citing Blair v. Henry Filters, Inc., 505
F.3d 517, 529 (6th Cir. 2007)).

                                           - 15 -
         Additionally, when an employee is terminated as a part of an employer’s reduction
in force (“RIF”), the employee must meet a higher standard of proof to establish a prima
facie case of age discrimination. Pierson, 749 F.3d at 536–37 (citing Barnes v. GenCorp,
896 F.2d 1457, 1465 (6th Cir. 1990)). The employee must provide “additional direct,
circumstantial, or statistical evidence tending to indicate that the employer singled [him]
out . . . for discharge for impermissible reasons.” Id. (quoting Barnes, 896 F.2d at 1465).
The Pierson court provided the analysis that must be undertaken to determine if an
employee was terminated as a part of a RIF:

              A work force reduction situation occurs when business
              considerations cause an employer to eliminate one or more
              positions within the company. An employee is not eliminated
              as part of a work force reduction when he or she is replaced
              after his or her discharge. However, a person is not replaced
              when another employee is assigned to perform the plaintiff’s
              duties in addition to other duties, or when the work is
              redistributed among other existing employees already
              performing related work. A person is replaced only when
              another employee is hired or reassigned to perform the
              plaintiff’s duties.

Pierson, 749 F.3d at 537 (quoting Barnes, 896 F.2d at 1465). If a plaintiff cannot prove a
prima facie case under either standard, summary judgment is warranted. Tenn. Code
Ann. §§ 20-16-101 (2017); 4-21-311 (2017).

       If a plaintiff establishes a prima facie case of age discrimination, the burden shifts
to the defendant to “articulate a legitimate non-discriminatory business reason for the
challenged employment action.” Ogg, 2011 WL 13165339, at *5 (citing Dennis v. White
Way Cleaners, L.P., 119 S.W.3d 688, 694 (Tenn. Ct. App. 2003)). After a defendant has
carried his or her burden by articulating a non-discriminatory reason for the discharge,
the burden shifts back to the plaintiff to present evidence that defendant’s reasons were
pretextual. Id. (citing Versa v. Policy Studies, Inc., 45 S.W.3d 575 (Tenn. Ct. App.
2000)). To establish that the reasons were pretextual, the employee “may show that the
employer was more likely than not motivated by a discriminatory reason or that the
employer’s explanation was not credible.” Ogg, 2011 WL 13165339, at *5 (citing
Barnes v. Goodyear Tire and Rubber Co., 48 S.W.3d 698, 708 (Tenn. 2000) abrogated
on other grounds by Gossett, 320 S.W.3d 777 (Tenn. 2010)).

        The record before us reveals that Officers failed to establish a prima facie case of
age discrimination. They could not show that they were replaced by younger persons or
treated differently than younger persons because they were all terminated together. The
trial court appropriately awarded summary judgment to Erlanger on this ground.

                                           - 16 -
                                  C. Retaliation Claims

        Erlanger contends that Appellants Capetz, Avans, Holliday, and Lawrence cannot
establish a prima facie case of common law retaliatory discharge because they filed their
unpaid wage claims with the Tennessee Department of Labor after they were terminated.
These Officers conceded at trial that they filed their claims after their termination. One
filed in May 2011, and the other three filed in August 2011. It is undisputed that all four
employees were terminated at the end of April 2011. Puzzlingly, Officers argue that the
Patton Affidavit and Holliday and Cookston’s interrogatory answers create sufficient
factual disputes regarding whether these employees established a prima facie case of
retaliatory discharge.

       The employment-at-will doctrine is “a bedrock of Tennessee common law and is a
fundamental principle controlling the employer-employee relationship.” Richmond v.
Vanguard Healthcare Servs., LLC, No. M2014-02461-COA-R3-CV, 2016 WL 373279,
at *4 (Tenn. Ct. App. Jan. 29, 2016) (quoting Williams v. City of Burns, 465 S.W.3d 96,
108 (Tenn. 2015)) (internal quotations omitted). Common law retaliatory discharge
causes of action are an important, but narrow, exception to the employment-at-will
doctrine. Williams v. Greater Chattanooga Pub. TV Corp., 349 S.W.3d 501, 513 (Tenn.
Ct. App. 2011). Plaintiffs pursuing a common law retaliatory discharge claim are
required to establish a prima facie case of retaliation:

              (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

Id. 349 S.W.3d at 513 (Tenn. Ct. App. 2011); see also Crews v. Buckman Labs. Int’l, 78
S.W.3d 852, 862 (Tenn. 2002) (citations omitted).

       Unlike a statutory retaliatory discharge claim, a plaintiff need only show that the
protected action was a substantial factor in the employer’s decision. Richmond, 2016 WL
373279, at *9 (citing Williams, 465 S.W.3d at 108). A plaintiff’s “subjective beliefs,
mere speculation, or testimony that the employee can think of no other reason for the
                                           - 17 -
discharge cannot, in and of themselves, create the requisite causal relationship.”
Newcomb v. Kohler Co., 222 S.W.3d 368, 391 (Tenn. Ct. App. 2006) (citing Reed v.
Alamo Rent-A-Car, Inc., 4 S.W.3d 677, 685 (Tenn. Ct. App. 1999)). Further, a plaintiff
“cannot rely on the mere short passage of time between the filing of a . . . claim and
subsequent termination to prove a prima facie case of retaliation.” Id. (citing Conatser v.
Clarksville Coca-Cola Bottling Co., 920 S.W.2d 646, 648 (Tenn. 1995)). When a
plaintiff fails to demonstrate a prima facie case, summary judgment should be granted to
the defendant. Tenn. Code Ann. §§ 20-16-101; 50-1-801 (2017).

        However, if a plaintiff does establish a prima facie case, the burden shifts to the
defendant to provide a legitimate, non-discriminatory, non-pretextual reason for the
discharge. Provonsha v. Students Taking a Right Stand, Inc., No. E2007-00469-COA-
R3-CV, 2007 WL 4232918, at *2 (Tenn. Ct. App. Dec. 3, 2007) (citations omitted). If a
defendant meets this burden, the burden of proof shifts back to the plaintiff to show the
defendant’s reason was not the true reason for the discharge and that the stated reason
was pretext. Id.; Tenn. Code Ann. § 50-1-801 (2017). To meet this burden, a plaintiff
“must show by admissible evidence either ‘(1) that the proffered reason has 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, 2007 WL 4232918, at *4
(quoting Forrest v. City of Ridgetop, et al., No. M2002-01176-COA-R3-CV, 2003 WL
21954195, at *2 (Tenn. Ct. App. Aug. 15, 2003) overruled on other grounds by Williams,
465 S.W.3d at 108).

       The record before us clearly reveals that Officers failed to establish a prima facie
case of retaliation. For five Officers, the complaints they cite as the basis for retaliation
occurred after they were terminated. Cookston and Talley’s claims are barred because
they accepted severance agreements and signed releases. Thus, summary judgment was
correctly granted to Erlanger on this issue.

                                        D. Hearsay

       Officers contend that portions of the Gentry Affidavit are inadmissible as hearsay
and should not have been considered by the trial court. Officers attack the Gentry
Affidavit’s assertion that city and county officials (Dan Johnson and Allen Branum) told
Erlanger management (CLO Hetzler and VP Fisher) that the city and county were going
to cease issuing commissions to the SSD. The affidavit further asserted that CLO Hetzler
and VP Fisher subsequently provided that information to SVP Gentry and other Erlanger
management staff. Officers point out that VP Fisher, CLO Hetzler, Chief of Staff
Johnson, and Chief Deputy Branum did not testify or submit affidavits; their alleged
conversations, however, are stated in the Gentry Affidavit.

       Erlanger argues that hearsay does not include statements offered for the purpose of
establishing intent, establishing the statement’s effect on the recipient, or explaining the
                                            - 18 -
reasons for the recipient’s behavior. Further, Erlanger asserts that the statement in
question was a statement of intention or anticipated future events; its literal truth is
unimportant, but its effect on Erlanger’s decision-making process is vital.

       “Hearsay” is defined under Rule 801(c) of the Tennessee Rules of Evidence as “a
statement, other than one made by the declarant while testifying at the trial or hearing,
offered in evidence to prove the truth of the matter asserted.” However, the hearsay
evidence rule does not operate to exclude every statement made by a witness to a third
person. Bradley v. Waderker, No. M2002-02017-COA-R3-CV, 2003 WL 21946718, at
*4 (Tenn. Ct. App. Aug. 13, 2003) (citing Richter v. State, 438 S.W.2d 362, 365 (Tenn.
Crim. Ct. App. 1968)). When the “testimony is not being offered to prove the truth of the
matters asserted by the out-of-court declarant,” it is not hearsay. Id. (citing State v.
Miller, 737 S.W.2d 556, 558–59 (Tenn. Ct. Crim. App. 1987). For example, an officer
being informed by the dispatcher that a person was in distress suffering chest pain at a
local hotel was not hearsay because the statement merely showed the officer’s reasons for
going to the hotel, not whether what the dispatcher said was true. Id., 2003 WL
21946718, at *4. Similarly in Thompson v. Adcox, we held that the statement “the deal
was off” was not hearsay because it was not presented to show that the deal was, in fact,
off, but that it “show[ed] that [the defendant] believed it to be off and that it was for this
reason he stopped payment on the check.” 63 S.W.3d 783, 793 (Tenn. Ct. App. 2001).
The statement was presented to determine the defendant’s intent, not the actual truth of
the matter, and it was thus admissible. Id.

       Summary judgment was granted in this case because Officers failed to establish a
prima facie case on the claims raised, not because of any purported hearsay statements.
This claim lacks merit as the contested statements did not constitute hearsay.

                                    V. CONCLUSION

       The judgment of the trial court is in all respects affirmed and the matter remanded.
Costs of the appeal are assessed to the appellants, Jerry L. Lawrence, Gary Talley, Harold
Holliday, Kenneth R. Cookston, Ronald J. Capetz, Gary C. Avans, and Rodney J. Patton.

                                                     _________________________________
                                                     JOHN W. MCCLARTY, JUDGE

                                            - 19 -