Court Opinion

ID: 770001
Source: CourtListenerOpinion
Date Created: 2012-04-18 10:28:55+00
Date Added: 2024-06-11T12:34:52.256447
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223 F.3d 469 (7th Cir. 2000)
KENNETH BOURBON, Plaintiff-Appellant,v.KMART CORPORATION, Defendant-Appellee.
No. 98-2433
In the  United States Court of Appeals  For the Seventh Circuit
Submitted September 23, 1999Decided August 4, 2000

Appeal from the United States District Court for the Southern District of Illinois.  No. 97 C 182--William D. Stiehl, Judge.
Before POSNER, MANION and ROVNER, Circuit Judges.
ROVNER, Circuit Judge.

1
Kenneth Bourbon sued his  employer, Kmart Corporation, under Illinois law  for retaliatory discharge, claiming Kmart fired  him after he complained that his supervisor was  engaged in dishonest and unethical behavior  towards customers. The district court granted  summary judgment in favor of Kmart because  Illinois law allows suits for retaliatory  discharge only under very limited circumstances,  and because Bourbon could not show that Kmart's  stated reason for the discharge was pretextual.  We affirm.

I.

2
Bourbon began working as an automobile mechanic  at the Wood River, Illinois Kmart in January  1995. Bourbon had worked at two other Kmart  locations in 1994 without incident, but was fired  from the Wood River store after only one month.  According to Bourbon, he was terminated for  reporting to the personnel department on two  occasions that his supervisor had engaged in  dishonest and unethical conduct towards  customers. In particular, he reported that on one  occasion, he accidentally broke a part on a  customer's car, and offered to pay for a  replacement part himself. Instead, his supervisor  charged the customer for the extra repair, and  used a junkyard part to effect the repair. On  another occasion, he reported that a customer was  charged for an unnecessary replacement of a rack  and pinion steering system when another mechanic  misdiagnosed a problem. Both customers were  eventually fully reimbursed by Kmart for these  overcharges. Shortly after reporting these  incidents, Bourbon's supervisor approached him to  complain about his work performance and attitude.  A little more than a month after Bourbon began  his employment at the Wood River Kmart, he was  terminated. Kmart, of course, contended that  Bourbon was terminated for performance problems  and not in retaliation for bringing questionable  conduct to light.

3
Bourbon sued Kmart in Illinois state court and  the case was removed to the United States  District Court for the Southern District of  Illinois. Bourbon's amended complaint in that  court charged only that Kmart fired him in  retaliation for reporting dishonest and unethical  behavior by his supervisor. At the close of  discovery, Kmart moved for summary judgment on  the ground that the Illinois tort of retaliatory  discharge did not protect employees who reported  dishonest or unethical conduct but rather  protected only employees who reported criminal  conduct or who filed workers' compensation  claims. In response, Bourbon pointed out that his  supervisor's conduct constituted theft by  deception under Illinois law, and therefore his  reporting of that conduct came within the purview  of the retaliatory discharge tort. The district  court employed the McDonnell-Douglas burden  shifting analysis to Bourbon's claim and found  that Bourbon could not show that Kmart's  legitimate, non-discriminatory reason for his  termination was pretextual. See McDonnell-Douglas  Corp. v. Green, 411 U.S. 792 (1973).  Alternatively, the district court found that even  if Bourbon met the standard under McDonnell-  Douglas, he could not show that his termination  was in violation of clear public policy because  he was reporting unethical, dishonest behavior  and not criminal behavior when he was fired. The  district court therefore granted summary judgment  in favor of Kmart. Bourbon appeals.

II.

4
On appeal, Bourbon takes issue with the  district court's application of McDonnell-Douglas  to his claim for retaliation, arguing that burden  shifting is appropriate only at trial or in the  context of a motion for judgment notwithstanding  the verdict. Bourbon also argues that there was  a material dispute regarding the reason for his  termination that could be resolved only at trial.  Kmart, in turn, contends that Bourbon's  termination does not come within the scope of the  retaliatory discharge tort because Bourbon claims  only that he was fired for reporting unethical  and dishonest conduct, and not for reporting any  criminal activity. Kmart also asserts that  Bourbon has no proof that he was performing  satisfactorily at the time he was fired, and that he thus cannot make out a prima facie case under  McDonnell-Douglas.

5
Illinois law allows claims for retaliatory  discharge when an employee is terminated for  filing a workers' compensation claim or because  the employee has reported the employer's criminal  conduct, either to law enforcement personnel or  to the company itself. See Kelsay v. Motorola,  Inc., 384 N.E.2d 353 (Ill. 1978) (recognizing for  the first time the tort of retaliatory discharge  when an employee was terminated for asserting  rights under workers' compensation law);  Palmateer v. International Harvester Co., 421 N.E.2d 876 (Ill. 1981) (expanding tort of  retaliatory discharge to encompass terminations  of employees who were fired because they reported  employer's criminal conduct to law enforcement  authorities); Petrick v. Monarch Printing Corp.,  444 N.E.2d 588 (Ill. App. 1 Dist. 1982)  (recognizing retaliatory discharge when employee  reports criminal conduct to supervisors instead  of law enforcement personnel); Belline v. K-Mart  Corp., 940 F.2d 184, 187 (7th Cir. 1991)  (applying tort of retaliatory discharge where an  employee reports unlawful conduct to an  employer). A valid claim for retaliatory  discharge requires a showing that (1) an employee  has been discharged; (2) in retaliation for the  employee's activities; and (3) that the discharge  violates a clear mandate of public policy.  Hartlein v. Illinois Power Co., 601 N.E.2d 720,  728 (Ill. 1992). "The element of causation is not  met if the employer has a valid basis, which is  not pretextual, for discharging the employee."  Id. No one disputes that Bourbon was discharged.  Kmart disputes that he was discharged because he  reported the customer overcharges, and also  maintains that firing an employee for reporting  unethical conduct falls outside the scope of the  tort of retaliatory discharge.

6
The question of whether Bourbon's reporting of  his supervisor's conduct is within the scope of  the tort is a close question. The fact that  Bourbon may have been wrong about whether the  conduct was criminal is irrelevant under Illinois  law. See Palmateer, 421 N.E.2d at 880; Belline, 940 F.2d at 188. The Illinois Supreme Court  explained that persons acting in good faith who  have probable cause to believe crimes have been  committed should not be deterred from reporting  them by the fear of being wrongfully discharged.  Palmateer, 421 N.E.2d at 880. Bourbon's initial  characterization of his supervisor's conduct as  dishonest and unethical does not change the fact  that, under Illinois law, Bourbon may have  reasonably believed that the conduct also meets  the definition of theft by deception. See 720  ILCS sec. 5/16-1. Bourbon's firing in retaliation  for reporting that conduct would therefore likely  meet the standard set forth in Palmateer as being  in violation of a clear mandate of public policy,  a policy against theft. Indeed, in Palmateer, the  crime reported by the discharged employee was  theft of a $2 screwdriver, and the court  emphasized that it was not the magnitude of the  crime that mattered but whether the General  Assembly had decided that the crime should be  resolved by resort to the criminal justice  system. So too with the conduct Bourbon  complained about here. The Illinois General  Assembly has decided that depriving persons of  their property by means of deception is a crime  under Illinois law, and Bourbon's reporting of  that conduct cannot be used as the reason for his  termination even though he is otherwise an at-  will employee. Nor is it determinative that Kmart  eventually reimbursed these customers or that the  Attorney General refused to pursue the matter.  For the purposes of Illinois law, all that  matters is that when Bourbon reported the  conduct, he reasonably believed his supervisor  was engaged in unlawful activity. Belline, 940 F.2d at 188.

7
Bourbon's case, however, fails on the element  of causation, for he has insufficient evidence  demonstrating a link between reporting his  supervisor's conduct and his termination. As we  mentioned above, the element of causation is not  met if the employer has a valid basis, which is  not pretextual, for discharging the employee.  Hartlein, 601 N.E.2d at 728. Bourbon has  presented no direct evidence that the reason for  his termination was his reporting of the  overcharges. No one admitted to him, for example,  that he was being fired for that reason. Rather,  Kmart claims that it terminated Bourbon's  employment because he was an incompetent  mechanic, and the company presented documentation  of the problems it had with Bourbon's work.  Bourbon's lack of direct evidence is not  determinative, however. Illinois retaliatory  discharge cases brought in federal court may be  analyzed using the burden-shifting method  presented in McDonnell-Douglas. See Hiatt v.  Rockwell Int'l Corp., 26 F.3d 761, 767 (7th Cir.  1994). To establish a prima facie case using this  method, Bourbon must show that he was in a  protected class, that he was performing his job  satisfactorily, that he was nevertheless the  subject of a materially adverse employment  action, and that others outside the class were  treated more favorably. Hiatt, 26 F.3d at 767-68.  If Bourbon can establish his prima facie case,  Kmart must then articulate a legitimate, non-  discriminatory reason for his termination. The  burden then shifts back to Bourbon to show that  Kmart's proffered reason is nothing more than a  pretext for unlawful discrimination. Id.

8
Bourbon's proof fails in at least two regards  using this method. First, he has no evidence  showing that he was performing his job to Kmart's  satisfaction. All reports of his performance in  his short stay at the Wood River Kmart were  negative, detailing complaints by customers, co-  workers and supervisors regarding Bourbon's work  performance and attitude. That Bourbon had  successfully, and briefly, worked at two other  Kmart locations before coming to the Wood River  store is irrelevant to his performance there. But  even if we were able to find that there was at  least a question as to his performance, he cannot  show that his employer's stated reason for  terminating him is pretextual. Indeed, the only  evidence that he has to demonstrate pretext is  the close relation in time between his reporting  of the overcharges and his termination. We have  held that temporal proximity alone is not enough  to prove pretext. See Roberts v. Broski, 186 F.3d 990, 995 (7th Cir. 1999).1 The district court  therefore correctly entered summary judgment in  favor of Kmart.

9
AFFIRMED.

Note:

1
 As we noted in Broski, chronology can sometimes  support an inference that a discharge is  discriminatory. For example, when an employee  receives praise one day and is confronted with a  laundry list of criticism the next, she may be  able to establish pretext where the only  intervening event was the disclosure that she is  disabled. Bourbon has no such claim here because  Kmart's criticism of him was consistent  throughout his one month tenure at the store. See  Broski, 186 F.3d at 995 n.3.

10
Posner, Circuit Judge, concurring.

11
I join the  panel's opinion but write separately to flag for  future consideration an issue (ignored by the  parties, hence waived) that is implicit in the  following sentence in the opinion "Illinois  retaliatory discharge cases brought in federal  court may be analyzed using the burden-shifting  method presented in McDonnell-Douglas [Corp. v.  Green, 411 U.S. 792 (1973)]" (emphasis added). In  support of this proposition, the opinion cites  Hiatt v. Rockwell Int'l Corp., 26 F.3d 761, 767  (7th Cir. 1994), which in turn cites McEwen v.  Delta Air Lines, Inc., 919 F.2d 58 (7th Cir.  1990). Neither case cites any authority for the  proposition other than Hiatt's citation of  McEwen. The only reason given for the result is  a statement in McEwen that since the McDonnell-  Douglas standard regulates merely the order of  proof, it is procedural rather than substantive  within the meaning of the Erie doctrine and it  therefore governs diversity cases as well as  federal-question cases. So even though the  Supreme Court of Illinois expressly rejected the  application of McDonnell-Douglas to Illinois  retaliatory-discharge cases in Clemons v.  Mechanical Devices Co., 704 N.E.2d 403, 407-08  (Ill. 1998), should such a case wander into  federal court by virtue of the diversity  jurisdiction the court should apply McDonnell-  Douglas to it.

12
Our sister circuits have assumed, to the  contrary, that state law, not federal law,  governs the burden-shifting standard applicable  to cases in which the rule of decision is state  rather than federal. E.g., Perry v. Woodward, 199 F.3d 1126, 1141-42 (10th Cir. 1999); Norville v.  Staten Island University Hospital, 196 F.3d 89,  95 (2d Cir. 1999); Payne v. Norwest Corp., 185 F.3d 1068, 1073-74 (9th Cir. 1999); Carpenter v.  Federal Nat'l Mortgage Ass'n, 165 F.3d 69, 72  (D.C. Cir. 1999); Mullin v. Raytheon Co., 164 F.3d 696, 699 (1st Cir. 1999); King v. Herbert J.  Thomas Memorial Hospital, 159 F.3d 192, 198 (4th  Cir. 1998); Lee v. State of Minnesota, Dept. of  Commerce, 157 F.3d 1130, 1133 (8th Cir. 1998);  Nichols v. Lewis Grocer, 138 F.3d 563, 565-66  (5th Cir. 1998); Olson v. General Electric  Astrospace, 101 F.3d 947, 956 (3d Cir. 1996);  Pierce v. Commonwealth Life Ins. Co., 40 F.3d 796, 802 n. 8 (6th Cir. 1994). These cases do not  discuss the choice of law issue; they merely take  for granted that the McDonnell-Douglas standard  is substantive for Erie purposes; nor have I  found any illuminating scholarly discussions of  the issue. But I am inclined to think that the  position (or better perhaps the instinct) of  these other circuits is correct.

13
To describe the McDonnell-Douglas standard as  merely prescribing the order of proof and the  allocation of burdens of production, though  common, see, e.g., Reeves v. Sanderson Plumbing  Products, Inc., 120 S. Ct. 2097, 2106 (2000), and  literally correct, is an invitation to  misunderstanding. Ordinarily, if all a plaintiff  in a discrimination case could show was that he  was qualified for a job (or promotion, or  retention) but was passed over in favor of a  person of a different race (sex, religion, etc.),  his opponent would be entitled to summary  judgment, because no reasonable jury could infer  from these bare facts that it was more likely  than not that the employer's action was  invidious. Under McDonnell-Douglas, this bare  showing compels summary judgment for the  plaintiff unless the defendant produces evidence  of a noninvidious reason for the action  complained of. Applied to retaliation, the logic  of the McDonnell-Douglas standard would compel  summary judgment for the plaintiff who showed  that after lodging a complaint about  discrimination, he (but not any otherwise  similarly situated employee who did not complain)  was fired or otherwise subjected to an adverse  employment action even though he was performing  his job in a satisfactory manner, unless, again,  the defendant presented a noninvidious reason for  the action. Hiatt v. Rockwell Int'l Corp., supra,  26 F.3d at 767; McEwen v. Delta Air Lines, Inc.,  supra, 919 F.2d at 59. Without the boost given by  McDonnell-Douglas, the plaintiff in such a case  would have to establish, as part of his prima  facie case and thus before the defendant had any  burden of explanation, a causal connection  between the lodging of the complaint and his  being fired.

14
And so the Illinois court concluded in Clemons  that to follow McDonnell-Douglas in an Illinois  retaliatory-discharge case "would, in essence,  expand the tort of retaliatory discharge by  reducing plaintiff's burden of proving the  elements of the tort. Because we refuse to expand  the tort of retaliatory discharge, we decline  plaintiff's invitation to adopt the three-tier  allocation of proof method in retaliatory  discharge cases." 704 N.E.2d at 408. In like vein  the U.S. Supreme Court recently found  "substantive" a New York state law regulating  review of damages awards because while the  statute "contain[ed] a procedural instruction .  . . the State's objective [wa]s manifestly  substantive." Gasperini v. Center for Humanities,  Inc., 518 U.S. 415, 429 (1996). In rejecting  McDonnell-Douglas for retaliation cases, the  objective of the Illinois court likewise was  "manifestly substantive," namely to avoid  "expand[ing] the tort of retaliatory discharge."  Or as we put it in S.A. Healy Co. v. Milwaukee  Metropolitan Sewerage Dist., 60 F.3d 305, 310  (7th Cir. 1995), "the state's goals are  substantive--designed to shape conduct outside  the courtroom and not just improve the accuracy  or lower the cost of the judicial process--though  the means are procedural."

15
A practical way to decide whether a rule of  state law is substantive or procedural for  purposes of the Erie doctrine is to ask whether  the rule is limited to a particular substantive  area or whether it applies across the board. If  the former, it is likely to reflect substantive  policy, to which the federal court should defer,  and if the latter to be a product of purely  procedural concerns that properly may differ  between federal and state courts. E.g., Herremans  v. Carrera Designs, Inc., 157 F.3d 1118, 1123  (7th Cir. 1998); S.A. Healy Co. v. Milwaukee  Metropolitan Sewerage Dist., supra, 60 F.3d at  310. It was on this basis that we suggested in  Harbor Ins. Co. v. Continental Bank Corp., 922 F.2d 357, 364 (7th Cir. 1990), that the doctrine  of "mend the hold," a type of estoppel, was  substantive for Erie purposes insofar as it was  limited to contract cases, just like the parol  evidence rule, which might otherwise be thought  a rule of procedure. "Rules of contract  interpretation, such as the parol evidence and  four-corners rules, are deemed substantive,  because of their effect on the conduct of  contracting parties outside the courtroom, even  though the rules operate through limiting the  kinds of evidence that are admissible." AM Int'l,  Inc. v. Graphic Management Associates, Inc., 44 F.3d 572, 576 (7th Cir. 1995). The McDonnell-  Douglas rule, unlike for example the rule that a  motion for summary judgment need not be supported  by evidence, Celotex Corp. v. Catrett, 477 U.S. 317, 322-24 (1986), is not a general rule of  federal procedure; it is tailored for and limited  to discrimination cases, as we emphasized in Diaz  v. Fort Wayne Foundry Corp., 131 F.3d 711 (7th  Cir. 1997). It is part of the law of  discrimination, which is substantive.

16
But there is a rather considerable complication.  The McDonnell-Douglas standard that we apply in  most of our retaliation cases is not really the  McDonnell-Douglas standard. The logical  adaptation of McDonnell-Douglas to retaliation,  the adaptation we assumed in Hiatt and McEwen and  that may have led the Supreme Court of Illinois  to reject its use in cases under the Illinois law  of retaliatory discharge, is, as I have  suggested, to entitle the plaintiff to summary  judgment if he shows that after lodging a  complaint about discrimination, only he, not  otherwise similarly situated employees who did  not complain, was subjected to an adverse  employment action even though he was performing  his job in a satisfactory manner. But most cases  in this and other circuits hold that the prima  facie case of retaliation under McDonnell-Douglas  requires more--requires proof of a "causal link"  between the protected expression in which the  plaintiff engaged (as by filing a complaint about  an unlawful act by his employer) and the adverse  employment action of which he is complaining.  E.g., Miller v. American Family Mutual Ins. Co.,  203 F.3d 997, 1007 (7th Cir. 2000); Sauzek v.  Exxon Coal USA, Inc., 202 F.3d 913, 918 (7th Cir.  2000); Byers v. Dallas Morning News, Inc., 209 F.3d 419, 427 (5th Cir. 2000); Jones v.  Washington Metropolitan Area Transit Authority,  205 F.3d 428, 433 (D.C. Cir. 2000).

17
If this means that the plaintiff must present  evidence that his protected expression caused the  defendant to retaliate, then McDonnell-Douglas  really does regulate just the order of proof and  the allocation of burdens of production and has  no substantive implications, since the plaintiff  would have to prove as much in a retaliation case  if McDonnell-Douglas had never been heard of. But  it would be better then to drop reference to  McDonnell-Douglas altogether, because cases such  as Miller and Sauzek go on to say, very  confusingly as it seems to me, that after the  plaintiff has made his prima facie case, the  defendant can defeat it by producing evidence  that the motive for the adverse employment action  was not retaliatory, unless the plaintiff is able  to come back and show that the alleged  nonretaliatory motive was actually pretextual.  That is McDonnell-Douglas-speak, all right, but  it is out of place. If the plaintiff has produced  evidence that he was fired because of his  protected expression, he has gone beyond  McDonnell-Douglas by producing actual evidence of  unlawful conduct, and that should be enough to  get him to a jury. McDonnell-Douglas is designed  to give the plaintiff a boost when he has no  actual evidence of discrimination (or  retaliation) but just some suspicious  circumstances. If he can prove retaliation with  evidence that his protected expression was in  fact the cause of his being fired, he doesn't  need McDonnell-Douglas and it gives him nothing.

18
Further complicating the picture, however, is  disagreement--or maybe sheer muddle--as to what  "causal link" means. If it means, as I have  assumed thus far, and as we held in King v.  Preferred Technical Group, 166 F.3d 887, 892 (7th  Cir. 1999); Johnson v. City of Fort Wayne, 91 F.3d 922, 939 (7th Cir. 1996), and Klein v.  Trustees of Indiana University, 766 F.2d 275, 280  (7th Cir. 1985), that the plaintiff must present  evidence that had it not been for his protected  expression, he would not have been fired (or  suffered whatever other adverse action of which  he complains), then the situation is as I have  described it

19
McDonnell-Douglas has no proper  role to play in a federal retaliation suit. But  the Fifth and Eleventh Circuits have held that  all that "causal link" signifies in this context  is that the protected expression and the adverse  action "were not wholly unrelated," and that this  means that something less than proof that the  plaintiff wouldn't have been fired (or suffered  other adverse action) had he not engaged in the  protected expression--less than proof, that is,  of "but for" causation (what philosophers call a  necessary condition)--will suffice to complete  the prima facie case. Long v. Eastfield College,  88 F.3d 300, 305 n. 4 (5th Cir. 1996); Simmons v.  Camden County Board of Education, 757 F.2d 1187,  1189 (11th Cir. 1985). And some of our cases  accept this definition, e.g., Sauzek v. Exxon  Coal USA, Inc., supra, 202 F.3d at 918; Hunt-  Golliday v. Metropolitan Water Reclamation  District, 104 F.3d 1004, 1014 (7th Cir. 1997)--  yet without attempting to distinguish King,  Johnson, and Klein or to explain what "not wholly  unrelated" means. In Sauzek and Hunt-Golliday, we  actually required (despite our "not wholly  unrelated" language) proof of a causal relation, 202 F.3d at 918-19; 104 F.3d at 1014-15, while  Johnson, a case that recites the stricter test,  accepts a mere coincidence in timing--expressly  rejected by Sauzek as sufficient to prove that  the protected expression and the adverse  employment action were "not wholly unrelated,"  202 F.3d at 919--as proof of the required causal  link! 91 F.3d at 939.

20
Someday we'll have to decide what the prima  facie case of retaliation is in the Seventh  Circuit. But whatever it is has no relation to  McDonnell-Douglas, which is not about the meaning  of "causal link." The Erie issue, however, may  turn on that meaning. If the requirement of  proving cause is so attenuated as to give the  plaintiff a boost toward winning his case that he  would not have under ordinary rules of pleading  and production, then there is a conflict with  substantive state law, and what the federal  courts inaptly call the McDonnell-Douglas  standard for proving retaliation must give way in  any retaliation case governed by state law. If  the prima facie case of retaliation under federal  law is instead what I am calling the logical  adaptation of McDonnell-Douglas, requiring no  evidence of causation at all, then even more  clearly it must give way in a case governed by  state law. In either event Hiatt and McEwen would  have to be reexamined. Only if the prima facie  case of retaliation under federal law requires  proof of a causal relation in the usual sense,  without attenuation, is there no conflict between  state and federal law, at least in Illinois,  which requires such proof. Only then would the  "McDonnell-Douglas" standard, though thoroughly  misnamed when interpreted to require (unlike  McDonnell-Dougas) proof of causation to make out  a prima facie case, properly apply to state  retaliation cases litigated in federal courts.