Court Opinion

ID: 5129662
Source: CourtListenerOpinion
Date Created: 2021-11-26 19:00:33.542192+00
Date Added: 2024-06-11T08:23:13.185228
License: Public Domain

Case: 21-10031      Document: 00516107953          Page: 1     Date Filed: 11/26/2021

                              REVISED 11/26/2021

            United States Court of Appeals
                                                                             United States Court of Appeals

                 for the Fifth Circuit
                                                                                      Fifth Circuit

                                                                                    FILED
                                                                            November 2, 2021
                                                                               Lyle W. Cayce
                                    No. 21-10031                                    Clerk

   Paul Scott,

                                                              Plaintiff—Appellant,

                                        versus

   U.S. Bank National Association, doing business as U.S. Bank,

                                                             Defendant—Appellee.

                   Appeal from the United States District Court
                       for the Northern District of Texas
                            USDC No. 3:20-CV-2380

   Before King, Smith, and Haynes, Circuit Judges.
   Per Curiam:
          Paul Scott appeals the judgment of the district court dismissing his
   civil rights action. For the following reasons, the judgment is affirmed in part,
   reversed in part, and remanded for further proceedings.
                                              I.
          Plaintiff-appellant Paul Scott brought this civil rights action against his
   former employer, defendant-appellee U.S. Bank. Scott alleges that U.S. Bank
   violated 42 U.S.C. § 1981 by taking retaliatory employment actions against
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   him because he opposed racial discrimination occurring within his
   department.
          Scott is an African American male. U.S. Bank hired Scott in March
   2016 as a Default Management Support Specialist in its underwriting
   department. Between March 2016 and January 2018, Scott received
   exclusively positive reviews as well as one merit increase. Scott was also
   encouraged to apply for management positions by his Human Resources
   Business Partner, Lakisha Carman.
          In January 2018, Scott overheard a manager in his department, Craig
   Seward, a white male, tell Scott’s direct supervisor, Damarris Triggs, an
   African American male, that he “intended to terminate four (4) African
   American employees.” Scott then warned those employees. One of those
   employees complained to the human resources department, which led to
   Carman’s requesting that Scott provide a statement about the incident. Scott
   agreed, but he expressed concern that U.S. Bank may retaliate against him
   because of the statement. Carman assured Scott that he would not face
   retaliation.
          Despite such assurance, Scott claims that U.S. Bank then started to
   retaliate. In February 2018, Bennie Wyatt, Triggs’s boss, began failing
   Scott’s loans despite those loans’ alleged passing under the policy and
   procedure guide. On February 22, 2018, Scott complained to Triggs that
   Wyatt was failing his loans in retaliation for Scott’s statement. Then, on the
   following day, Wyatt and Triggs gave Scott a verbal warning about his
   purportedly poor performance. Throughout March 2018, Scott also
   experienced issues with his work badge that Triggs did not assist him with.
          Around April 30, 2018, Scott called Carman and left a message
   expressing his belief that these occurrences were in retaliation for his
   statement. Carman emailed Scott and informed him that “she was no longer

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   his HR professional,” directing him instead to HR Business Partner Molly
   Werner. Scott met with Werner, but he found that she “was antagonistic and
   dismissive of Scott’s complaints.”
          In May 2018, Wyatt told Scott that, due to Scott’s poor April
   production numbers, Scott was required to attend a refresher course. At that
   course, the trainer used Scott’s loan documents to teach the class, describing
   them “as a perfect example of how to write up a loan” and telling Scott that
   “he did not need a refresher course because he was an expert.”
          The day after the training, May 24, 2018, Triggs and Wyatt gave Scott
   a second verbal warning for poor performance based on Scott’s April
   production. Scott responded that he received a 97 percent score for the
   month of May, the highest of his floor, but Wyatt told Scott that his “peaks
   and valleys” were unacceptable. Scott said to Triggs, “really man this is
   harassment.” Triggs then “hit the desk with his fist so hard that it could be
   heard outside of the room,” and exclaimed “boy Mr. Paul!” Wyatt then
   stood up and said, “hold on, don’t say no more.” Scott said to Wyatt, “this
   is harassment are you trying to terminate me?” Wyatt replied, “no, but you
   can give me your resignation, if you want to.” Wyatt then suggested that
   Scott take an “ad hoc vacation day” and that they would “start fresh” the
   next day. Finally, Wyatt told Scott, “by the way, before you leave you can
   call HR if you want to. I have her number for you.” Scott interpreted this to
   be a veiled threat regarding his prior complaints.
          The next morning, Scott was terminated. Wyatt told Scott that he was
   “one good underwriter, but we have to terminate you because you are a
   threat to 20 underwriters.” Scott asked what Wyatt meant by that, but Wyatt
   did not provide an explanation. Scott then reminded Wyatt that on February
   13, 2018, a white female coworker had yelled and cursed at Seward and Triggs

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   but was not terminated. He asked why his conduct was more threatening than
   hers, but Wyatt did not respond.
          Scott filed suit against U.S. Bank for unlawful retaliation under 42
   U.S.C. § 1981. U.S. Bank moved to dismiss the complaint for failure to state
   a claim, which the district court granted with prejudice. The court found that
   Scott could not state a claim for retaliation because he failed to allege that he
   participated in a protected activity under § 1981. The district court correctly
   explained that to have participated in a protected activity, Scott must have
   opposed his employer’s unlawful practice. The court then found that Scott’s
   statement to the human resources department and follow-up complaints
   constituted opposition. But, while Scott’s conduct was opposition, the
   district court concluded it could not qualify as a protected activity because
   Scott could not demonstrate that he had a reasonable belief that the employer
   was engaged in unlawful employment practices. Further, the court denied
   Scott leave to amend his complaint, finding that any amendment would be
   futile due to “[t]he complete lack of corroborating circumstantial facts
   regarding Seward’s alleged racial discrimination.”
          Scott appeals both the denial of his request for leave to amend his
   complaint and the finding that he was not engaged in a protected activity
   under Title VII.
                                              II.
          We begin by determining whether the district court erred in denying
   Scott leave to amend his complaint.
                                              A.
          A district court’s denial of leave to amend is ordinarily reviewed for
   abuse of discretion. City of Clinton v. Pilgrim’s Pride Corp., 632 F.3d 148, 152
   (5th Cir. 2010). That said, when a district court’s “denial of leave to amend

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   was based solely on futility, we apply a de novo standard of review identical,
   in practice, to the standard used for reviewing a dismissal under Rule
   12(b)(6).” Id. When reviewing a dismissal under Rule 12(b)(6), “[w]e accept
   all factual allegations in the pleadings as true.” Aldridge v. Miss. Dep’t of
   Corr., 990 F.3d 868, 873 (5th Cir. 2021). The plaintiff must plead specific
   facts that support a facially plausible claim for relief. Powers v. Northside Indep.
   Sch. Dist., 951 F.3d 298, 305 (5th Cir. 2020).
                                                B.
          A court should freely give leave to amend when justice so requires,
   Fed. R. Civ. P. 15(a)(2), but a movant must give the court at least some
   notice of what his or her amendments would be and how those amendments
   would cure the initial complaint’s defects. Thomas v. Chevron U.S.A., Inc.,
   832 F.3d 586, 590 (5th Cir. 2016). If the plaintiff does not provide a copy of
   the amended complaint nor explain how the defects could be cured, a district
   court may deny leave. McKinney v. Irving Indep. Sch. Dist., 309 F.3d 308, 315
   (5th Cir. 2002) (affirming denial of leave to amend where plaintiffs “failed to
   amend their complaint as a matter of right, failed to furnish the district court
   with a proposed amended complaint, and failed to alert both the court and
   the defendants to the substance of their proposed amendment”).
          Here, Scott argued in full: “Plaintiff asserts that his original complaint
   is sufficient to state a claim and should survive Defendant’s 12(b)(6) motion.
   Should this Court disagree, Plaintiff requests the opportunity to amend his
   complaint in accordance with the federal and local rules.” Scott failed to offer
   any grounds as to why his leave should be granted or how deficiencies in his
   complaint could be corrected. Therefore, the district court did not commit
   error when it denied Scott’s request.

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                                                 III.
          We now turn to whether the district court erred in finding Scott failed
   to state a claim under 42 U.S.C. § 1981 when it concluded that Scott did not
   engage in a protected activity. It did.
                                                 A.
          “We review a district court's ruling on a motion to dismiss de novo,
   ‘accepting all well-pleaded facts as true and viewing those facts in the light
   most favorable to the plaintiffs.’ ” Anderson v. Valdez, 845 F.3d 580, 589 (5th
   Cir. 2016) (quoting Dorsey v. Portfolio Equities, Inc., 540 F.3d 333, 338 (5th
   Cir. 2008)). “A claim will not be dismissed unless the plaintiff cannot prove
   any set of facts in support of his claim that would entitle him to relief.”
   Alexander v. Verizon Wireless Servs., L.L.C., 875 F.3d 243, 249 (5th Cir.
   2017). To prevail against a motion to dismiss, “a plaintiff's complaint ‘must
   contain sufficient factual matter, [if] accepted as true, to “state a claim to
   relief that is plausible on its face.” ’ ” Anderson, 845 F.3d at 589 (quoting
   Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)).
                                                 B.
          Section 1981 makes it unlawful to discriminate on the basis of race in
   “mak[ing] and enforc[ing] contracts.” 42 U.S.C. § 1981(a). It encompasses
   “complaint[s] of retaliation against a person who has complained about a
   violation of another person’s contract-related ‘right.’ ” CBOCS W., Inc. v.
   Humphries, 553 U.S. 442, 445 (2008). We examine retaliation claims under
   Section 1981 using the “same rubric of analysis” as Title VII. Johnson v.
   PRIDE Indus., Inc., 7 F.4th 392, 399 (5th Cir. 2021) (quoting Johnson v.
   Halstead, 916 F.3d 410, 420 (5th Cir. 2019)).
          An employee engages in a protected activity under Section 1981 when
   “he has opposed any practice made unlawful by [Title VII].” 42 U.S.C. §

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   2000e-3(a). In other words, to qualify as a protected activity, the employee’s
   conduct must have “opposed” the employer’s practice and that opposed
   practice must have been unlawful. Here, the district court found that Scott
   opposed his employer’s practice. So, the only issue before this court is
   whether Scott’s complaint plausibly alleged that the practice Scott opposed
   was unlawful. 1 Importantly, a plaintiff need not demonstrate that the practice
   was actually unlawful for his opposition to be a protected activity; rather, it is
   enough that the plaintiff reasonably believed the practice was unlawful. EEOC
   v. Rite Way Serv., Inc., 819 F.3d 235, 242 (5th Cir. 2016).
           Scott contends that the district court erred by requiring that he satisfy
   the McDonnell Douglas standard at the pleading stage. 2 If the district court
   applied the appropriate pleading standard, he argues, it would have found
   Scott adequately alleged facts supporting a reasonable belief that an unlawful
   practice occurred.
           It is true that the Supreme Court has held that the McDonnell Douglas
   standard does not govern at the motion-to-dismiss stage. Swierkiewicz v.

           1
             U.S. Bank argues that we should also consider whether Scott failed to plead the
   other elements of a retaliation claim, but since the district court did not address these
   elements, we decline to decide them in the first instance. Montano v. Texas, 867 F.3d 540,
   546 (5th Cir. 2017) (“ ‘As a court for review of errors,’ we do ‘not . . . decide facts or make
   legal conclusions in the first instance,’ but ‘review the actions of a trial court for claimed
   errors.’ ” (quoting Browning v. Kramer, 931 F.2d 340, 345 (5th Cir. 1991))).
           2
                McDonnell Douglas concerned the order of proof in an employment-
   discrimination action when the employee submits no direct evidence of discrimination.
   McDonnell Douglas Corp. v. Green, 411 U.S. 792, 800 (1973). It explained: “The
   complainant in a Title VII trial must carry the initial burden under the statute of
   establishing a prima facie case of racial discrimination. This may be done by showing (i) that
   he belongs to a racial minority; (ii) that he applied and was qualified for a job for which the
   employer was seeking applicants; (iii) that, despite his qualifications, he was rejected; and
   (iv) that, after his rejection, the position remained open and the employer continued to seek
   applicants from persons of complainant's qualifications.” Id. at 802.

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   Sorema N.A., 534 U.S. 506, 510 (2002) (explaining that McDonnell Douglas is
   “an evidentiary standard, not a pleading requirement”); see also Raj v. La.
   State Univ., 714 F.3d 322, 331 (5th Cir. 2013) (“Inasmuch as the district court
   required Raj to make a showing of each prong of the prima facie test for
   disparate treatment at the pleading stage, the district court erred by
   improperly substituting an ‘evidentiary standard’ for a ‘pleading
   requirement.’ ” (quoting Swierkiewicz, 534 U.S. at 512)). That said, we have
   recognized that McDonnell Douglas may still be used to frame the motion-to-
   dismiss inquiry. E.g., Cicalese v. Univ. of Tex. Med. Branch, 924 F.3d 762, 767
   (5th Cir. 2019) (“[I]t can be ‘helpful to reference’ [the McDonnell Douglas]
   framework when the court is determining whether a plaintiff has plausibly
   alleged the ultimate elements of the disparate treatment claim.” (quoting
   Chhim v. Univ. of Tex. at Austin, 836 F.3d 467, 470 (5th Cir. 2016))). Applying
   that framework must be done with care, however, as a court errs when it
   “require[s] a plaintiff to plead something more than the ‘ultimate elements’
   of a claim,” id. (quoting Chhim, 836 F.3d at 470), or “inappropriately
   heightens the pleading standard by subjecting a plaintiff’s allegations to a
   rigorous factual or evidentiary analysis under the McDonnell Douglas
   framework in response to a motion to dismiss.” Id.
          The district court plainly relied on McDonnell Douglas. It concluded
   that “[a]s there is no direct evidence that Seward acted with racially
   discriminatory intent, the burden-shifting standard established in [McDonnell
   Douglas] controls.” Thus, we must determine whether, when the court found
   that Scott could not have had a reasonable belief, it merely framed its inquiry
   with the standard or prematurely engaged in a rigorous factual analysis better
   reserved for a later stage of the proceedings.
          Fortunately, we have much precedent to light the way. When
   examining whether an employee’s belief that his employer engaged in an
   unlawful act was reasonable, a court must ask whether a person, “not

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   instructed on Title VII law as a jury would be, [could] reasonably believe that
   she was providing information about a Title VII violation[.]” EEOC v. Rite
   Way Serv., Inc., 819 F.3d 235, 242 (5th Cir. 2016) (citation omitted). This
   inquiry is informed by the nature of the statement forming the base of the
   alleged discrimination, whether the statement was directed at a particular
   person or group of persons, whether it came from a person with supervisory
   authority, and the setting where the employee’s complaint was voiced. Id. at
   243-44.
          In Rite Way, the employee, Tennort, who was a general cleaner for
   Rite Way Service, Inc., witnessed a supervisor make two inappropriate
   comments regarding the appearance of her co-worker. 819 F.3d at 238. Her
   co-worker complained to a police officer that she was sexually harassed by
   the supervisor, and she named Tennort as an eyewitness. Id. Rite Way began
   an internal investigation about the incident and asked for Tennort’s
   statement, though the human resources representative “tried to talk her out
   of reporting what she had seen.” Id. at 238. Tennort gave a statement in spite
   of that advice, and over the next five weeks, she received two written
   warnings and two oral warnings about her job performance before ultimately
   being terminated. Id. at 238-39. The district court granted summary
   judgment to Rite Way, finding Tennort could not have reasonably believed a
   Title VII violation occurred, id. at 239, and this court reversed. We found
   that Tennort’s belief that an unlawful employment practice occurred could
   be reasonable because those two statements were directed at a specific
   employee and were made by someone in a supervisory position. Id. at 243-44.
   This court also highlighted the importance of the fact that Tennort made her
   statement in response to her employer’s investigation. Id. at 244. Because the
   human resources department reached out to Tennort for her statement and
   indicated her statement could result in consequences for the supervisor, how

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   her employer handled the incident could have informed her reasonable belief.
   Id.
          Similarly, in Long v. Eastfield College, this court found that a fact issue
   regarding reasonable belief precluded summary judgment. 88 F.3d 300, 306
   (5th Cir. 1996). There, Long complained “to college officials about a sexually
   explicit joke told by [another employee] in Long’s presence.” Id. at 305.
   Thereafter, she was required to provide a report that was never previously
   required, was “belittled . . . in front of male co-workers,” and ultimately had
   her performance rating downgraded. Id. Long made additional complaints
   claiming these were acts of retaliation. Id. We concluded that Long presented
   sufficient evidence to support a reasonable belief that the employer violated
   Title VII for the purposes of her retaliation claim. Id.
          Construing the facts in the light most favorable to Scott, as we must at
   this stage of the proceedings, he has successfully pleaded facts that could
   support a reasonable belief. Scott alleged that he overheard a supervisor state
   that “he intended to terminate four (4) African American employees.” A
   supervisor’s considering of the race of an employee when deciding to
   terminate that employee is an unlawful employment practice. 42 U.S.C. §
   2000e-2(m) (“[A]n unlawful employment practice is established when the
   complaining party demonstrates that race, color, religion, sex, or national
   origin was a motivating factor for any employment practice, even though
   other factors also motivated the practice.”); cf. Payne v. McLemore’s
   Wholesale & Retail Stores, 654 F.2d 1130, 1139-41 & n.2 (5th Cir. Unit A. Sept.
   1981) (noting a reasonable belief of discrimination was established “by virtue
   of McLemore’s failure to hire blacks in or promote blacks to certain
   employment positions”). In addition, Scott gave his statement reactively. A
   human resources investigator approached him to give a statement regarding
   the incident and assured him that he would not face retaliation for his
   statement.

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          This situation parallels Rite Way, where this court found reasonable
   belief sufficiently established so as to preclude summary judgment. Rite Way,
   819 F.3d at 245. Like in Rite Way, Scott overheard a supervisor make a
   comment indicative of unlawful behavior; Scott then made his statement in
   response to an investigator’s request and assurance of protection, which may
   have informed his belief. After giving his statement, he alleges that the
   company began to retaliate against him by denying his loans, giving him
   multiple warnings, sending him to unnecessary training, and ultimately
   terminating him. Considering Scott’s statement together with its
   surrounding context, we find that he has successfully alleged facts that could
   support a reasonable belief that his employer engaged in unlawful conduct.
          The district court acknowledged these facts but discounted them by
   taking note of other facts that could, but do not necessarily, make the initial
   statement by Seward more innocuous. It explained that Scott’s belief could
   not be reasonable because Seward made the statement to Triggs, who was
   also African American and thus a member of the same protected class as the
   employees. This was error. Analyzing facts to this extent at the motion-to-
   dismiss stage mirrors the rigorous scrutiny that Cicalese prohibits. 924 F.3d
   at 768 (finding a district court erred by determining whether a derogatory
   statement was merely a “stray remark” at the motion-to-dismiss stage).
   Moreover, it is not clear that the district court could give much weight to that
   fact. See Castaneda v. Partida, 430 U.S. 482, 499 (1977) (“Because of the
   many facets of human motivation, it would be unwise to presume as a matter
   of law that human beings of one definable group will not discriminate against
   other members of their group.”); Oncale v. Sundowner Offshore Servs., Inc.,
   523 U.S. 75, 78 (1998) (“[W]e have rejected any conclusive presumption that
   an employer will not discriminate against members of his own race.”).
          The district court also noted that Scott did not allege Seward intended
   to replace those four employees with members of an unprotected class, as

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   may be required by McDonnell Douglas. McDonnell Douglas Corp. v. Green,
   411 U.S. 792, 802 (1973). But since McDonnell Douglas cannot be dispositive
   at this stage—and it is not guaranteed McDonnell Douglas will ultimately
   apply, as discovery may reveal direct evidence—that requirement was
   premature. Swierkiewicz, 534 U.S. at 511-12. Finally, the district court
   observed that Scott failed to “allege[ a] pattern of disparate hiring, firing, or
   promotions, [and] points to no additional racially charged remarks.” But
   Scott did not need to allege a pattern or practice, because what he opposed
   was the alleged discrete unlawful act of race-based termination. See Nat’l
   R.R. Passenger Corp. v. Morgan, 536 U.S. 101, 114-15 (2002) (distinguishing
   between an unlawful employment practice that arises from a discrete
   unlawful act, such as termination or refusal to hire, and the more continuous
   conduct required to create a hostile work environment). Simply put, the
   district court imposed on Scott a heavier burden than he was required to meet
   at the pleading stage.
           In summary, Scott sufficiently alleged facts that, interpreted in the
   light most favorable to him, supported a reasonable belief that his employer
   engaged in an unlawful practice. The district court erred when it engaged in
   a factual analysis akin to McDonnell Douglas and discounted these facts. 3
           Therefore, we AFFIRM the judgment of the district court as to the
   denial of leave to amend the complaint but REVERSE the judgment of the
   district court granting U.S. Bank’s motion to dismiss. We REMAND for
   further proceedings.

           3
             Scott also contends that the district court erred by finding that Scott failed to state
   a claim under the “participation clause” of 42 U.S.C. § 2000e-3(a). Because we find the
   district court erred when it found Scott failed to state a claim based on opposition grounds,
   we do not reach this question.

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