Petty v. Metro. Govt. of Nashville-Davidson County, No. 07-5649 (6th Cir. Aug. 18, 2008); Abner v. The Kansas City Southern Railway Co., No. 07-30674 (5th Cir. Aug. 14, 2008);

By Paul Mollica

The Sixth Circuit sorts out a returning serviceman’s substantive right to reinstatement, and the separate prohibition against discrimination, under USERRA. The Fifth Circuit affirms that a Title VII plaintiff who prevails after an initial mistrial may still — under appropriate circumstances — be awarded attorney’s fees for the mistrial.

Petty v. Metro. Gov’t of Nashville-Davidson County, No. 07-5649 (6th Cir. Aug. 18, 2008):  Though not as ubiquitous as straight race-age-gender discrimination cases, claims under the Uniformed Services Employment and Reemployment Rights Act (USERRA) present sterling opportunities because Congress placed more of the burden on employers to assure that veteran status will not disadvantage a returning employee.  In this case, there was an issue about whether the employee had not been candid about the reasons for his discharge.  While questions about veracity would ordinarily swamp an employee’s claim of discrimination under Title VII or the ADEA, the employer under USERRA bears the burden of showing that service history was not a factor in the adverse employment action. 

There sections were at play in this case. Sections 4312 and 4313 of USERRA entitles service members to reemployment, either in position that the employee would have occupied (but for the interruption of service) “or a position of like seniority, status and pay, the duties of which the person is qualified to perform.” 38 U.S.C. § 4313(a)(2)(A).  Section 4311 bars discrimination on the basis of military service against employees who have become reemployed after their service.

Here the employee (Petty), an officer stationed in Kuwait, had operated an illegal still (shades of “M*A*S*H”!) in violation of orders and served wine to an enlisted woman.  Petty plea-bargained down to a discharge “under honorable conditions (general),” and returned to his civilian job as a patrol sergeant with the Nashville Police Department. In completing the paperwork for reinstatement, Petty did not fully disclose the circumstances of his discharge. 

“One of the questions on the personal history questionnaire Plaintiff filled out during the return-to-work process asked: ‘During your absence were you arrested, charged, detrained, or a suspect in any criminal action or military disciplinary action for any reason or do you have any action pending? If yes, explain in detail (use back if necessary).’ Plaintiff answered “Yes.” He also attached a narrative explanation of his response in which he admitted facing military charges in Kuwait. The narrative description did not disclose: (1) that Plaintiff was accused of giving alcohol to an enlisted soldier; and (2) that Plaintiff was accused of manufacturing alcohol.”

Petty was eventually reinstated after a delay, but only to a desk job taking civilian complaints over the phone.  When the truth of Petty’s discharge became known, he was also subjected to an internal affairs investigation. He stood accused of altering a form to remove incriminating data.  But an internal e-mail revealed that Petty’s military service was at least a factor in the investigation:

“We probably all need to put our heads together and decide if there are areas of conduct that occurred while he was away from the department (so off duty, but while serving in the military as Captain) that would constitute behavior for which we would not allow of any other off duty employee. I know we need every able bodied person we can get, but I do not want us to jump the gun and find ourselves embarrassed when his conduct comes under public scrutiny.”

Finally, Petty was denied permission to return to off-duty employment as a security guard.

The district court granted summary judgment to the department on the reemployment claims, granted a bench trial on the anti-discrimination claims, and ultimately entered a judgment of no liability.  

The Sixth Circuit reversed summary judgment on Petty’s right to reemployment and ordered entry of judgment for the employee.  The court found that Petty met all of the statutory prerequisites for full reinstatement:

“First, he was required to notify his employer in advance of his departure that he would be leaving for military service. 38 U.S.C. § 4312(a)(1). Second, the cumulative length of such military service must be less than 5 years. 38 U.S.C. § 4312(a)(3). Third, upon his return, he was required to request reemployment from Metro within the time frame outlined in § 4312(e) and with the documentation specified by § 4312(f). Fourth, his separation from service must have been under ‘honorable conditions.’ 38 U.S.C. § 4304(2).”

Although the department argued that the possible alteration of the form signified dishonesty — and required investigation under the department’s processes — the panel held that the obligation to reinstate an employee who otherwise meets the conditions of the statute is unconditional: 

“Metro, therefore, was not permitted to delay or otherwise limit Petty’s reemployment rights in any way; in particular, Metro was not permitted to limit or delay Petty’s reemployment by requiring him to comply with its return-to-work process. Section 4302(b) expressly states that USERRA ‘supersedes any . . . contract, agreement, policy, plan, practice, or other matter that reduces, limits, or eliminates in any manner any right or benefit provided by this chapter, including the establishment of addition al prerequisites to the exercise of any such right or the receipt of any such benefit.’ By applying its return-to-work process to Petty, Metro not only delayed his reemployment, but as we shall explain, it also limited and withheld benefits to which Petty was entitled under USERRA.”

The panel also held, under the separate anti-discrimination section, that the district court clearly erred in crediting the department’s reason for denying off-duty work:  “Metro argues that Petty was denied permission to engage in off-duty employment because he was being investigated at the time of his request and Metro has a policy against approving off duty requests for officers under investigation. The district court concluded that this policy was the motivating factor behind Metro’s denial, that the policy was a legitimate reason and not a pretext for that decision, and that Metro’s action was not discriminatory and did not violate USERRA. We conclude that the district court erred in its analysis.”  Because the department failed in its burden of showing that the investigation was not motivated by Petty’s military service, the panel held that entry of judgment for the department was in error.

Abner v. The Kansas City Southern Railway Co., No. 07-30674 (5th Cir. Aug. 14, 2008):  Earlier this year, in Abner v. The Kansas City Southern RR Co., 513 F.3d 154 (5th Cir. 2008), the Fifth Circuit affirmed a jury verdict for employees in an eight-plaintiff Title VII/§ 1981 harassment case ($125,000 punitive damages for each of the eight plaintiffs).  On this follow-on case, the panel reviews the award of $446,777.12 in attorney’s fees. 

The employer’s principal argument was that the plaintiffs’ counsel ought not be paid fees for the first trial, which lead to a hung jury, on the ground that they were not a “prevailing party.”  But after a close analysis of cases from the First, Second and Seventh Circuits involving mistrials, the panel rejects the employer’s legal formula and holds that the ultimate outcome ought to determine “prevailing party” status: 

“What these cases teach us is that the question of whether a party ‘prevailed’ and whether a fee award is ‘reasonable’ is not one to parse too thinly – whether by individual claim or the number of trials required to reach a result. The ‘overall relief’ obtained in this case was substantial: each plaintiff received a punitive damage award of $125,000. And plaintiffs ultimately ‘prevailed’ on their claim of a hostile work environment. At the second trial, the jury found that Defendant had subjected Plaintiffs to a hostile work environment and had failed to ‘exercise . . . reasonable care to prevent and promptly correct any racially harassing behavior,’ awarding each plaintiff a large sum. Moreover, work done during the first trial – not simply in preparation for the first and second trials – contributed to this result. Plaintiffs’ claims in the first and second trial arose from the same set of facts and evidence – both trials centered around hostile work environment discrimination. And the first trial allowed witnesses to become familiar with the case and the trial process. Plaintiffs’ attorney explained at oral argument that at least one of Plaintiffs’ experts had rarely, if ever, before testified; he was a key witness at both trials, and his experience testifying at the first trial enhanced his understanding of the case. The first trial also drew out important evidentiary issues that were disputed prior to the second trial, as shown by Plaintiffs’ and Defendant’s motions in limine that referred directly to issues from the earlier trial. And Defendant does not contend that Plaintiffs caused or contributed to the first mistrial.”

While recognizing that a discount in the lodestar amount might be fitting in light of duplicative or excessive work, the panel nevertheless affirms that the plaintiffs did “prevail” for purposes of obtaining a fee.