Court Opinion

ID: 9496744
Source: CourtListenerOpinion
Date Created: 2023-08-05 16:34:25.05003+00
Date Added: 2024-06-11T17:57:46.510421
License: Public Domain

BYE, Circuit Judge,
dissenting.
I disagree with the majority opinion in two respects. First, the Secretary failed to argue in the district court that post-termination misconduct precludes ' an award of-front pay, and therefore waived the claim now raised on appeal. Second, if we were to reach the issue, I do not believe the record developed by the Secretary establishes Sellers’s i-einstatement was impractical or impossible due to her misconduct. Because the record establishes only that reinstatement was impractical due to circumstances not áttributable to Sellers, I believe she is still entitled to front pay, and I see no reason to remand this case. For both reasons, I respectfully dissent.
I
The Secretary’s arguments in the district court regarding Sellers’s post-termination misconduct, as well as his factual development of the record, all related to whether it was pi-actical or possible to reinstate Sellers as an air traffic controller. Absent from the record is any argument Sellers’s post-termination misconduct should preclude front pay as well. The record shows the following with respect to the misconduct issue.
First, the initial motion informing- the district court about Sellers’s post-termination misconduct focused on reinstatement rather than front pay. See ante at 1060 (quoting Appellee’s App. at 24-25). As the proceedings involving Sellers’s misconduct unfolded, the Secretary remained focused on reinstatement, not front pay. For example, on May 1, 2000, in response to Sellers’s motion for equitable relief and prejudgment interest, the Secretary stated “defendant is still exploring the possibility or even feasibility of reinstating plaintiff. With respect to front pay, it is defendant’s position plaintiff is not entitled to front pay *1069under the facts in this case.” Appellant’s App. at 24-25. The response did not, however, explain why front pay would not be warranted if Sellers was not reinstated.
On March 12, 2001, the district entered an order for a hearing on Sellers’s motion for equitable relief “at which time [the parties] shall prepare to present evidence and argument in support of their respective positions.” Id. at 18 (District Court Docket Entry # 144) (emphasis added). The hearing was not held until November 19, 2001. In the interim, the Secretary never filed a brief arguing misconduct should preclude an award of front pay.
At the hearing on November 19, 2001, Sellers’s counsel represented it was his
understanding that Defendant opposes the reinstatement request in part, or perhaps in whole, as a result of an incident that occurred which resulted in the cessation of Ms. Sellers’ employment with Bank of America. That employment ceased about two weeks after the jury verdict in this case. Apparently, the Defendant alleges some kind of ethical or moral transgression on the part of the Plaintiff.
Id. at 46. The Secretary’s response to that statement was limited to the issue of reinstatement and never suggested the Bank of America incident precluded front pay as well. Id. at 47. Indeed, when the Secretary presented evidence at the hearing, his focus was still on the issue of reinstatement, not front pay.
Finally, at the end of the hearing, the district court specifically asked both counsel whether there was “anything else” the court needed to address — clearly an opening for the Secretary to make a legal or factual argument regarding front pay— and the Secretary’s counsel replied, “No, your honor.” Not once did the Secretary cite McKennon or any other cases discussing whether post-termination misconduct should preclude an award of front pay.
Nevertheless, the Secretary argues he preserved the issue by presenting factual evidence on Sellers’s misconduct and by generally opposing front pay. I respectfully disagree. The Secretary never gave the district court reason to suspect a legal connection between those facts and the issue of front pay. The after-acquired evidence doctrine “requires factual as well as legal development!].” EEOC v. Farmer Bros. Co., 31 F.3d 891, 901 (9th Cir.1994). That observation is particularly true here because the state of the law at the time was decidedly against the Secretary on whether the after-acquired evidence doctrine applied to conduct occurring after an employee’s termination. See Carr v. Woodbury County Juvenile Det. Ctr., 905 F.Supp. 619, 629 (N.D.Iowa 1995) (declining to extend McKennon to misconduct that occurred after the employment relationship had ended); Sigmon v. Parker Chapin Flattau & Klimpl, 901 F.Supp. 667, 682 (S.D.N.Y.1995) (same); Ryder v. Westinghouse Elec. Corp., 879 F.Supp. 534, 537 (W.D.Pa.1995) (same); but see Medlock v. Ortho Biotech, Inc., 164 F.3d 545, 555 (10th Cir.1999) (stating that ‘McKennon may permit certain limitations on relief based on post-termination conduct.”).
While the Secretary developed a factual record that may have arguably been broad enough to encompass an after-acquired evidence defense as it related to the impracticability or impossibility of reinstatement, he certainly never developed a legal or factual argument that the doctrine should preclude an award of front pay. Thus, the district court had no opportunity to decide the issue now before this court, that is, whether the after-acquired evidence doctrine should affect a plaintiffs right to front pay when reinstatement is impracticable. The Secretary’s waiver of this issue is apparent when examining the district court’s memorandum and order. The dis*1070trict court discussed the misconduct extensively in the section of the memorandum addressing reinstatement, but never mentioned the misconduct in the section addressing front pay. Because the Secretary never argued the misconduct should preclude front pay, the district court never considered the issue.
This case is analogous to Farmer Bros. There, the defendant attempted to impeach the plaintiff by introducing facts about her misconduct without making any legal argument the misconduct should preclude an award of front pay under the after-acquired evidence doctrine. 31 F.3d at 901. The Ninth Circuit concluded the defendant “failed to raise properly the after-acquired evidence defense.” Id. Similarly, here the Secretary introduced facts about Sellers’s misconduct, but did so only to show the impracticability of reinstatement. The Secretary never argued the misconduct should preclude an' award of front pay.
The factual record developed by the Secretary at the hearing further indicates he waived the front pay issue. In McKennon, the Supreme Court held “[wjhere an employer seeks to rely upon after-acquired evidence of wrongdoing, it must first establish that the wrongdoing was of such severity that the employee in fact would have been terminated on those grounds alone if the employer had known of it at the time of the discharge.” 513 U.S. at 362-63, 115 S.Ct. 879. While the majority now states the test somewhat differently (see ante at 1065 & n. 1), McKennon would have required the Secretary to show he would have terminated Sellers for her misconduct in order to make an award of front pay inappropriate.
Here, the Secretary did not present any evidence showing he would have terminated Sellers for her misconduct. Instead, the Secretary only presented evidence showing he would not reinstate Sellers. In a Title YII case, the relevant consideration for whether a successful plaintiff should be reinstated is whether reinstatement is practicable or possible. E.g., Salitros v. Chrysler Corp., 306 F.3d 562, 572 (8th Cir.2002). This consideration differs from the considerations for terminating an employee who already holds a position. Misconduct that might make it impractical to reinstate may not suffice to show an employer would have terminated.
Thus, the Secretary would have had to present markedly different evidence to satisfy the McKennon standard. The employment of air traffic controllers is governed by 5 U.S.C. § 7513(a), which provides “an agency may take an action covered by the subchapter [which includes removal] against an employee only for such cause as will promote the efficiency of the service.” Furthermore, an “employee against whom an action is taken under this section is entitled to appeal to the Merit System Protection Board [MSPB].” Id. at § 7513(d).
To assess the reasonableness of a federal agency’s termination of an employee governed by § 7513, the MSPB considers the Douglas factors, so called pursuant to the MSPB’s decision in Douglas v. Veterans Admin., 5 MSPB 313, 5 M.S.P.R. 280, 305-06 (1981). See, e.g., Grimes v. United States Postal Serv., 872 F.Supp. 668, 677-78 (W.D.Mo.1994).
The twelve Douglas factors are:
(1) The nature and seriousness of the offense, and its relation to the employee’s duties, position, and responsibilities, including whether the offense was intentional or technical or inadvertent, or was committed maliciously or for gain, or was frequently repeated;
(2) the employee’s job level and type of employment, including supervisory or fiduciary role, contacts with the public, and prominence of the position;
*1071(3) the employee’s past disciplinary record;
(4) the employee’s past work record, including length of service, performance on the job, ability to get along with fellow workers, and dependability;
(5) the effect of the offense upon the employee’s ability to perform at a satisfactory level and its effect upon supervisors’ confidence in the employee’s ability to perform assigned duties;
(6) consistency of the penalty with those imposed upon other employees for the same or similar offenses;
(7) consistency of the penalty with any applicable agency table of penalties;
(8) the notoriety of the offense or its impact upon the reputation of the agency;
(9) the clarity with which the employee was on notice of any rules that were violated in committing the offense, or had been warned about the conduct in question;
(10) potential for the employee’s rehabilitation;
(11) mitigating circumstances surrounding the offense such as unusual job tensions, personality problems, mental impairment, harassment, or bad faith, malice, or provocation on the part of others involved in the matter; and
(12) the adequacy and effectiveness of alternative sanctions to deter such conduct in the future by the employees or others.
Id. at 678 n. 7.
Significantly, the Secretary did not ask any witness to discuss the Douglas factors, which the FAA would have had to take into account in terminating Sellers if the termination was to survive MSPB review. Nor did the Secretary ask any witness to explain how Sellers’s misconduct would establish cause for termination as would “promote the efficiency of the service” under 5 U.S.C. § 7513, the relevant standard if the issue was Sellers’s termination rather than her reinstatement. Finally, the Secretary did not ask any witness whether the FAA would have terminated Sellers for the type of misconduct she committed at Bank of America, had she still been working for the FAA at the time of the misconduct. In sum, not only did the Secretary fail to make a legal argument regarding front pay, he also failed to develop the type of factual record necessary to satisfy McKennon’s standard.
We consider legal arguments raised for the first time on appeal only when they require no additional factual development, or manifest injustice would result. Orr v. Wal-Mart Stores, Inc., 297 F.3d 720, 725 (8th Cir.2002). The Secretary would have had to develop the factual record much more extensively to assert, and preserve, the after-acquired evidence defense in the district court. Given the uncertain state of the law on the issue whether the doctrine extended to post-termination misconduct, had the Secretary made the legal argument he waived, I cannot conclude the district court’s decision to award front pay resulted in manifest injustice. Therefore, I do not believe we should address the Secretary’s belated argument about front pay.
II
Second, while I may agree with the majority’s decision to extend McKennon to post-termination misconduct if I thought we should reach the issue, see Kucia v. Southeast Ark. Cmty. Action Corp., 284 F.3d 944, 949 (8th Cir.2002) (“Equitable remedies [of reinstatement and front pay] are forward-looking. They should depend on the state of facts existing at the time the remedy is either granted or denied.”), I do not believe the Secretary presented sufficient evidence to prove his failure to reinstate Sellers was attributable to her *1072misconduct. Instead, I believe the record shows Sellers’s reinstatement was impractical due to other circumstances (i.e., the hostile environment she would have faced working for an employer who still employed the man who sexually harassed her). As a result, I believe post-termination misconduct should not preclude an award of front pay in this case.
At the hearing, Sellers introduced the testimony of James Poole, a former vice president of the FAA’s Great Lakes Region. Poole testified regarding eighteen cases in which he represented air traffic controllers who had been terminated by the FAA and who sought reinstatement through the grievance and arbitration procedure. Each of the eighteen cases involved misconduct equally as serious or more serious than the misconduct Sellers committed at Bank of America (e.g., criminal sexual misconduct with a child, embezzlement, fraud, alcohol problems, insubordination, battery, use of illegal substances, child pornography, bribery, harassment of jurors). Poole explained that many of the cases were resolved by a settlement agreement, with the FAA reinstating the controllers involved.
The Secretary called Maureen Woods, an Airway Facility Division Manager in the FAA’s Great Lakes Region. At a meeting held in April 2001, Woods decided the FAA would not voluntarily reinstate Sellers to her position as an air traffic controller. Woods explained her decision was made solely because of the Bank of America incident. Woods described the issue as one of trustworthiness. On cross-examination, however, Woods acknowledged she had not reviewed any documents regarding the Bank of America incident, and instead based the decision on oral information the FAA attorneys provided her at the April 2001 meeting. She acknowledged she did not give Sellers an opportunity to explain her version of the incident, and she was “a little rushed for time, in terms of we needed to get back to the court to make a decision on reinstatement, and I accepted what the attorneys presented at the meeting.” App. at 236.3
The Secretary also called Patricia Hea-ley, a Personnel Services Branch Manager in the Human Resources Management Division. Healey testified about the procedures the FAA uses to make hiring decisions, which involve the use of “suitability grids” that grade various types of misconduct into four categories — A, B, C, and D. Healey testified the Bank of America incident would be considered a D violation, which is defined as “[mjajor: conduct or issue which, standing alone, would be disqualifying, under suitability, for any position.” App. at 300. Healey explained the Bank of America incident would fall under table 5, issues related to dishonesty. App. at 250-51. The D category of table 5 provides:
Pattern of dishonesty as reflected in
! disregard for truth
! convictions records
! abuse of trust
! employment records
blackmail; counterfeiting; extortion; robbery, armed; intentional false statement or deception or fraud in examination or appointment.
App. at 304.
Healey explained her belief that a single incident could satisfy the criteria of a category D violation, even though a D violation required a “pattern” of misconduct:
*1073Q. Does a pattern indicate to you that there are multiple instances of the conduct?
A. No, not necessarily.
Q. Do you believe that one incident could result in a finding that there was a pattern?
A. Because of the forgery, it was an act of forgery, if that is indeed what happened, but it’s also an abuse of trust for the position. So, there is a pattern of dishonesty in the individual based on those facts.
App. at 257.
Ultimately, Healey testified only that it was “not likely” a person who committed the type of act Sellers committed at Bank of America would be accepted as suitable for employment as an air traffic controller. App. at 250. On cross-examination, Hea-ley acknowledged the FAA never performed a suitability determination on Sellers. Healey admitted she could not make an official determination without seeing the relevant documents. She reiterated her opinion, however, that it “seems that [Sellers’s conduct] fits the category D in the instances that I described earlier, and I don’t think I could find this person suitable for employment.” App. at 256-57.
Based on this record, the district court found:
On account of plaintiffs misconduct which resulted in her termination from [Bank of America], the FAA decided not to reinstate plaintiff to FAA employment. In addition, persons who have been terminated or forced to resign from previous employment on account of employment misconduct are determined by the FAA to be “unsuitable” for employment as a[n] Air Traffic Control Specialist.
Add. at 6.
In my view, the district court clearly erred in finding “persons who have been terminated or forced to resign from previous employment on account of employment misconduct are determined by the FAA to be ‘unsuitable’ for employment as a[n] Air Traffic Control Specialist.” . The record developed by the Secretary clearly does not prove that. Rather, the record only shows certain types of misconduct, those classified as D violations, render a candidate unsuitable for employment.
Furthermore, the record clearly shows Sellers did not commit a D violation. Sellers committed a single act of misconduct at Bank of America. A single incident cannot logically constitute a “pattern” of dishonesty. The evidence presented by the Secretary to prove a single incident constitutes a “pattern” was simply incredible, and no other evidence in the record supports the district court’s general statement that the FAA considers all persons who commit misconduct of any kind on another job “unsuitable” for employment. Thus, to the extent the district- court credited the Secretary’s evidence regarding the suitability grids, it clearly erred in finding Sellers’s misconduct met the requirements for a category D violation and rendered her unsuitable as an air traffic controller.
In my view, the district court’s findings regarding the impracticability or impossibility of Ms. Sellers’s reinstatement turned primarily upon the hostility of the environment she would be exposed to if reinstated. The coworker who had sexually harassed Sellers was still employed by the FAA. In addition to that primary fact, I believe the district court merely added the secondary fact the Secretary had decided not to reinstate Sellers, without giving much thought to whether the reinstatement decision was actually justified for the reasons given by the Secretary.
Ill
In sum, the Secretary failed to argue post-termination misconduct should pre-*1074elude an award of front pay before the district court, failed to develop a factual record to prove Sellers’s misconduct would have resulted in her termination under the McKennon standard, and further failed to prove the misconduct, standing alone, precluded reinstatement or front pay. Sellers’s reinstatement was impractical due to circumstances not attributable to her, and therefore she was still entitled to an award of front pay. Under these circumstances, I see no need for a remand and I respectfully dissent.

. The hearing on the reinstatemenl/front pay issues was originally scheduled for June 18, 2001, and this may be the reason Woods testified she was "rushed” in April 2001 to make a decision on reinstatement.