Kenya Spratt v. FCA US LLC

Opinion

NOT RECOMMENDED FOR PUBLICATION File Name: 20a0269n.06

No. 19-1420

UNITED STATES COURT OF APPEALS FILED FOR THE SIXTH CIRCUIT May 13, 2020 DEBORAH S. HUNT, Clerk

KENYA N. SPRATT, ) ) Plaintiff-Appellant, ) ON APPEAL FROM THE ) UNITED STATES DISTRICT v. ) COURT FOR THE EASTERN ) DISTRICT OF MICHIGAN FCA US LLC, ) ) OPINION Defendant-Appellee. ) )

Before: MERRITT, CLAY, and BUSH, Circuit Judges.

CLAY, Circuit Judge. Plaintiff Kenya Spratt appeals the district court’s order granting

summary judgment in favor of his former employer, Defendant FCA US LLC, on his race

discrimination claim brought pursuant to Title VII of the Civil Rights Act of 1964, 42 U.S.C.

§ 2000e-2(a). For the reasons that follow, we reverse the district court’s judgment and remand for

further proceedings consistent with this opinion.

I. BACKGROUND

This case arises from Defendant’s decision to terminate Plaintiff based on his falsification

of bids that were submitted by potential contractors for a large-scale construction project

renovating the Chrysler Technology Center in Auburn Hills, Michigan. Plaintiff does not dispute

that he falsified the relevant bids. Instead, he argues that Defendant used that falsification as an

excuse to illegally terminate him based on his race. Plaintiff contends that if he was not African

American, but instead was Caucasian, Defendant would not have terminated him for his conduct. No. 19-1420, Kenya Spratt v. FCA US LLC

As evidence of this, Plaintiff points to Defendant’s past decision not to fire a similarly situated

Caucasian employee who engaged in conduct comparable to Plaintiff’s. Based on this differential

treatment, Plaintiff argues that a reasonable jury could conclude that Defendant’s decision to

terminate him was motivated by racial discrimination. For the reasons that follow, we agree.

A. FCA’s Sourcing Process

Prior to his termination in April 2017, Plaintiff Kenya Spratt worked as a Senior

Construction Buyer at FCA US. FCA US is a North American car manufacturer, and is a member

of the Fiat Chrysler Automobiles family of companies. In his role as Senior Construction Buyer,

Plaintiff was responsible for soliciting competitive bids for large-scale construction projects at

FCA US and sourcing the projects based on the bids.

Although FCA US did not have written policies for how the sourcing process should be

conducted, the standard practice that developed over the years was for the Senior Buyer and the

internal client (i.e., the particular department overseeing the respective project) to identify three to

four contractors and invite them to bid. Once the initial bids were received, the Senior Buyer would

then prepare an initial bid comparison summary, which lists the bids from each contractor based

on their respective unit prices (e.g., structural, electrical, plumbing) and item prices (e.g., steel,

lighting, sinks). According to Plaintiff, the initial summary sheet “is an analysis tool used to

identify variances in the cost of specific units . . . between contractors’ bids to determine what

clarifications of the job requirements are necessary” before asking the contractors to submit their

final bids. (Appellant Br. at 5–6.) The initial summary sheet does not contain the names of the

bidding contractors, and it is not used to determine who will be awarded the job.

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After the Senior Buyer prepares the initial summary sheet, he shares it with the internal

client, and the Senior Buyer and internal client then decide whether or not a clarification meeting

is needed. The purpose of a clarification meeting is to review the scope of the project with the

contractors in order to ensure that they understand what the project will entail. At this stage, the

highest bidder may be eliminated from the competitive process.

Following the clarification meeting, the remaining contractors submit their final bids. The

Senior Buyer then prepares a summary of the final bids, and sends that summary to the internal

client. Unlike the initial summary sheet, the summary of the final bids includes the contractors’

names and identifying information. The internal client and the Senior Buyer use the final summary

sheet to determine which contractor will be awarded the job. Usually, the contractor with the

lowest bid is successful.

B. The Museum Project

In late 2016, FCA US decided to renovate the Chrysler Technology Center in Auburn Hills,

Michigan (the “Museum Project”). Plaintiff was the Senior Buyer overseeing the renovation. The

internal client (the Facilities department) suggested three contractors to participate in the bidding

process—Barton Mallow, Walbridge, and Aristeo. Plaintiff suggested a fourth contractor—

Roncelli, which was the contractor who originally built the Chrysler Technology Center. All four

contractors submitted initial bids.

Based on his experience with the Facilities group in a prior project, Plaintiff was concerned

about the integrity of the bidding process for the Museum Project. According to Plaintiff, he had

legitimate reasons to believe that someone in the Facilities group was sharing inside information

about the bidding process with one of the competing contractors—Barton Mallow. Based on his

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suspicion of bias, Plaintiff decided to “massage” some of the numbers in the initial bid summary

sheet. (R. 26-3, Pg. ID 222.) He increased some of the line item bids of Barton Mallow and

Walbridge, but he did not alter the bids of Roncelli or Aristeo. As a result of his interference with

the numbers, the initial bid summary wrongly indicated that the bidder in Column B (Roncelli)

had the lowest overall bid. Prior to Plaintiff’s adjustment of the numbers, Barton Mallow had the

lowest overall bid.

Plaintiff submitted the falsified initial bid summary to Facilities. Based on the summary,

Plaintiff and Facilities decided to eliminate Aristeo (the highest bidder both before and after

Plaintiff’s adjustment of the numbers) and to hold a clarification meeting with the three remaining

bidders. At this time, Facilities still did not know which contractor was associated with which bid

on the initial summary. (Recall that the initial bid summary does not include the contractors’

identifying information in order to prevent bias.) However, around the time of the clarification

meeting, the Facilities project manager for the Museum Project—Slavko Stajninger—discovered

the actual bid numbers of Walbridge and Barton Mallow. Stajninger discovered Walbridge’s bid

number because Walbridge accidentally included its name on an e-mail that included its bid

information. Stajninger discovered Barton Marlow’s bid because Stajninger directly contacted a

representative from Barton Marlow and asked him if his was the lowest bid on the initial summary

sheet. Based on his answers, Stajninger discovered that some of the numbers on the initial

summary sheet had been altered. This triggered an investigation into Plaintiff’s conduct.

After the clarification meeting, the three competing contractors submitted their final bids

for the Museum Project. Plaintiff compiled the bids into a final bid summary sheet, which was

then used to select the contractor who would be awarded the job. Plaintiff did not alter any of the

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numbers on the final bid summary sheet. Roncelli had the lowest bid; Barton Mallow was second

lowest; and Walbridge submitted the highest bid. Accordingly, Plaintiff recommended that

Roncelli be awarded the job. However, the members of the Facilities group decided that they did

not want to award the contact to Roncelli, even though Roncelli had the lowest final bid, and

instead wanted to award the contract to Barton Mallow. Usually when this occurs (i.e., when the

internal client decides not to award the contract to the lowest bidder), FCA US would document

that decision and explain its reasoning in its SAP contract system. However, the company did not

document why it selected Barton Mallow over Roncelli for the Museum Project.

C. The Investigation of Plaintiff

In February 2017, FCA US’s Business Practices Office (“BPO”) began an investigation

into Plaintiff’s activities related to the Museum Project. As Plaintiff admits, the investigation

conclusively determined that Plaintiff falsified certain numbers in the initial bid summary for the

Museum Project. The investigation also revealed that Plaintiff had a “personal relationship” with

Roncelli’s business development leader, Ehrlich Crain. (R. 26-3, Pg. ID 215.) Plaintiff and Crain

live in the same neighborhood and both serve on its community housing board. Around the time

of the Museum Project, Plaintiff was seeking a variance from the community housing board for an

addition to his home. However, Plaintiff maintains that his and Crain’s relationship was purely

professional and that Plaintiff did not associate with Crain outside of work. The investigation also

uncovered that Plaintiff has a personally owned small business that is focused on building

residential homes. Plaintiff had attended a residential builders’ training course in early 2017 and

had wrongly expensed the cost of that course to FCA US.

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Following the investigation, FCA US decided to terminate Plaintiff. That termination

decision led to the present lawsuit. As noted above, Plaintiff does not deny that he altered some of

the numbers on the initial summary sheet. But he maintains that he did so only for the purpose of

safeguarding the integrity of the bidding process, given his suspicion that Facilities was biased in

favor of Barton Mallow. Accordingly, he contends that his actions were insufficient to motivate

his termination, and that the real reason for his termination was his African American race. As

evidence of this, he points out that FCA US did not terminate his Caucasian predecessor in the

Senior Buyer position—Patrick Bergin—who engaged in similar conduct, but instead of being

terminated, Bergin was effectively promoted.

D. The Investigation of Patrick Bergin

In 2014, FCA US investigated Plaintiff’s predecessor, Patrick Bergin, for a number of

policy violations: namely, (1) receiving kickbacks from a supplier; (2) forwarding sensitive

information to his personal email address; (3) forwarding confidential information to suppliers;

(4) selling his personally owned vehicles to suppliers at inflated prices to disguise kickbacks from

suppliers; and (5) failing to comply with Defendant’s established document management

procedures. The essence of FCA US’s concern was that Bergin had colluded with Comstock (a

Chrysler supplier) to receive kickbacks in exchange for awarding Comstock certain contracts.

Bergin’s scheme involved directing Comstock to engage the services of a consultant named

Don Tocco and directing Comstock to pay 0.5% of their overall markup to Tocco. Tocco then

allegedly paid a portion of the 0.5% back to Bergin in the form of a kickback. The investigation

revealed that, during a taped conversation between Bergin and a confidential informant from

Comstock, Bergin acknowledged the relationship between Comstock and Tocco, directed the

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confidential informant not to make any further payments to Tocco, and asked the confidential

informant to delete evidence of Comstock’s prior payments to Tocco. However, due to a lack of

documentation and conflicting witness statements, the ultimate result of the investigation as to the

kickback allegation was considered inconclusive.

The results of the investigation were conclusive as to other allegations against Bergin. First,

the investigation concluded that Bergin forwarded a Comstock purchase order to Tocco, in

violation of the company’s confidentiality policies. The investigation next revealed that, over a

five-year period, Bergin sold two personally owned vehicles to two FCA US suppliers, Barton

Mallow and Conti, in violation of conflict-of-interest policies. And lastly, the investigation found

that Bergin had failed to adhere to company document management procedures by forwarding

over 130 business e-mails to his personal e-mail account, and failed to maintain required

documentation of much of his work at FCA US, including the mark-up cost calculations relating

to dealings with Comstock.

As a result of the investigation, FCA US did not terminate Bergin. Instead, he was

involuntarily removed from the Senior Buyer position and transferred to an Engineering

Supervisor position at another location. This was a higher paying position for Bergin.

E. Procedural History

Plaintiff sued FCA US for unlawful employment discrimination in violation of Title VII,

arguing that the company’s explanation for terminating him due to the falsification of the initial

bids was a pretext for race discrimination.1 See 42 U.S.C. § 2000e-2(a). The district court granted

1 Plaintiff also brought other claims against FCA US, which the district court dismissed and which are not relevant to this appeal.

7 No. 19-1420, Kenya Spratt v. FCA US LLC

summary judgment in favor of Defendant FCA US. The court found that Plaintiff’s alleged

comparator, Patrick Bergin, was not similarly situated enough to Plaintiff to allow Plaintiff’s claim

of employment discrimination based on differential treatment to go before a jury. Plaintiff now

appeals the district court’s order granting summary judgment in favor of FCA US.

II. DISCUSSION

This Court reviews a district court’s grant of summary judgment de novo. Payne v.

Novartis Pharm. Corp., 767 F.3d 526, 530 (6th Cir. 2014). Summary judgment is proper “if the

movant shows that there is no genuine dispute as to any material fact and the movant is entitled to

judgment as a matter of law.” Fed. R. Civ. P. 56(a). Under Rule 56, the movant bears the initial

burden of proving that there is no genuine dispute of material fact. Celotex Corp. v. Catrett, 477

U.S. 317, 323 (1986). A genuine dispute of material fact exists if “the evidence is such that a

reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc.,

477 U.S. 242, 248 (1986). In the present case, Defendant FCA US is the moving party, so it bears

the burden of demonstrating its entitlement to judgment as a matter of law.

The McDonnell Douglas burden-shifting framework applies to Title VII claims of

discrimination that are based on indirect evidence. Wheat v. Fifth Third Bank, 785 F.3d 230, 237

(6th Cir. 2015) (citing McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973)). “Under that

paradigm, a plaintiff first must establish a prima facie case of discrimination.” Id. The burden then

shifts to the employer to “articulate some legitimate, nondiscriminatory reason for the [adverse

action.]” Id. (alteration in original) (quoting Tex. Dep’t of Cmty. Affairs v. Burdine, 450 U.S. 248,

253 (1981)). “The plaintiff then is required to prove that the reasons proffered by the defendant

were not its true reasons, but were mere pretexts for prohibited discrimination.” Id.

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In the present case, the district court correctly found that Plaintiff established a prima facie

case of race discrimination because Plaintiff is a member of a protected class; he was qualified for

the position of Senior Buyer; he suffered an adverse employment action when FCA US terminated

him; and he was replaced by a Caucasian employee. See Laster v. City of Kalamazoo, 746 F.3d

714, 727 (6th Cir. 2014) (setting forth the elements of a prima facie case of discrimination under

Title VII). And FCA US articulated a legitimate justification for terminating Plaintiff based on his

falsification of the initial bids for the Museum Project. See Adamov v. U.S. Bank Nat. Ass’n, 726

F.3d 851, 854–55 (6th Cir. 2013) (holding that a violation of company policy can be a legitimate

reason for terminating an employee). Thus, the only issue on appeal is whether Plaintiff has

demonstrated a triable issue as to pretext based on differential treatment between himself and his

alleged comparator, Patrick Bergin.

In order to demonstrate a genuine dispute as to pretext based on differential treatment,

Plaintiff must set forth some evidence that he was similarly situated “in all of the relevant aspects”

to an employee who lacked his protected characteristic and received preferential treatment. Redlin

v. Grosse Pointe Pub. Sch. Sys., 921 F.3d 599, 610 (6th Cir. 2019) (quoting Ercegovich v.

Goodyear Tire & Rubber Co., 154 F.3d 344, 352 (6th Cir. 1998)); accord, e.g., Johnson v. Ohio

Dep’t of Pub. Safety, 942 F.3d 329, 331 (6th Cir. 2019). Generally when determining whether two

employees are similarly situated, this Court looks to whether the plaintiff and the alleged

comparator (1) dealt with the same supervisor, (2) were subject to the same standards, and

(3) engaged in substantially identical conduct without differentiating or mitigating circumstances

that would distinguish their employer’s differential treatment of them. Redlin, 921 F.3d at 610

(citing Mitchell v. Toledo Hosp., 964 F.2d 577, 583 (6th Cir. 1992)). However, we have

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consistently said that the Mitchell factors are not inflexible requirements, and instead should be

considered and applied on a case-by-case basis. See, e.g., Redlin, 921 F.3d at 610; Tennial v. United

Parcel Serv., Inc., 840 F.3d 292, 304 (6th Cir. 2016).

There is no dispute in this case as to the first and second Mitchell factors. Plaintiff has put

on evidence that the same person, Jay Wilton, supervised both Plaintiff and Bergin, and had an

active role in the decision to terminate Plaintiff and to retain Bergin. Plaintiff and Bergin also held

the same position at different times—Senior Construction Buyer in FCA US’s Purchasing

Department—and were subject to the same standards. Thus, we only need to decide whether

Plaintiff has demonstrated a triable issue of fact as to the third Mitchell factor: whether Plaintiff

and Bergin engaged in substantially identical conduct without differentiating or mitigating

circumstances that would sufficiently explain FCA US’s differential treatment of them.

FCA US admits that Plaintiff and Bergin were subject to differential treatment for their

misconduct, but argues that the differential treatment was justified because each employee’s

conduct was materially distinct. FCA US points to two distinctions: first, it argues that Plaintiff’s

misconduct was more serious and his violations of the company’s policies more numerous than

Bergin’s; and second, the results of Plaintiff’s investigation were conclusive, while the results of

Bergin’s investigation were inconclusive. While these arguments may ultimately succeed in

persuading a jury that race discrimination did not motivate FCA US’s decision to terminate

Plaintiff, they do not entitle Defendant to judgment as a matter of law.

We turn first to FCA US’s argument regarding the nature of Plaintiff’s and Bergin’s

misconduct. As we have acknowledged before, this Court has never held that a plaintiff and his

comparator “must commit exactly the same mistake in order to permit a reasonable inference of

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intentional discrimination from their differential discipline.” Jackson v. VHS Detroit Receiving

Hosp., Inc., 814 F.3d 769, 782 (6th Cir. 2016); see also id. at 780 (admonishing that the

“substantially identical” language of the third Mitchell factor “should not be read to increase the

weight of [a plaintiff’s] burden of proof at the pretext stage”). Instead, “our cases make clear that

the relevant inquiry is whether the comparator’s conduct was substantially identical ‘in all of the

relevant aspects.’” Id. at 782 (emphasis in original) (quoting Ercegovich, 154 F.3d at 352). The

relevant aspects in this context include the type of misconduct alleged and its relative severity. See

id. at 780, 783. We gauge the relative severity of the plaintiff’s and comparator’s misconduct, in

part, by looking to its actual and potential consequences. Id. at 780.

Plaintiff’s and Bergin’s alleged misconduct was of the same type. Both of them engaged

in wrongdoing that implicated serious concerns “of ethics and trust.” (Appellee Br. at 33.) Plaintiff

falsified some of the numbers on the initial bid summary, whereas Bergin allegedly colluded with

a supplier in order to receive kickbacks in exchange for awarding that supplier certain contracts.

In addition, “the circumstances of the mistakes themselves” appear substantially identical: as

alleged, both Plaintiff and Bergin intentionally violated well-known company policies. Jackson,

814 F.3d at 783. Plaintiff knowingly altered some of the numbers on the initial bid summary, and

Bergin knowingly conspired with a supplier to receive kickbacks. If anything, Plaintiff argues that

he believed his conduct was in the company’s interest, given his claim that he only changed the

numbers in order to safeguard the bidding process, whereas Bergin’s actions were purely self-

interested.

A reasonable juror could also find that Plaintiff’s and Bergin’s respective wrongdoings

were comparably serious based on the actual and potential harm to the company. This is because

11 No. 19-1420, Kenya Spratt v. FCA US LLC

Bergin’s scheme, if actualized, would have the intended effect of awarding certain contracts to a

supplier that otherwise might not have received those contracts. In contrast, construing the facts in

Plaintiff’s favor, his alteration of the bids had no adverse effect on the company because the initial

bid summary sheet is never used to determine which contractor will be awarded the project.

Instead, Plaintiff changed the numbers only to safeguard the integrity of the bidding process

because he suspected that someone from Facilities was sharing information with Barton Mallow

(which appears to have been true). Plaintiff did not alter any of the numbers on the final summary

sheet, and that is the document that was used to determine who would actually be awarded the

contract. Thus, a reasonable juror could find that the actual and potential harm to FCA US from

Plaintiff’s actions was less severe than the harm caused by Bergin’s misconduct.

FCA US responds that Plaintiff was found to have violated more company policies than

Bergin, and therefore, FCA US must have considered Plaintiff’s misconduct to be more severe.

But this Court rejected that exact argument last year in Redlin v. Grosse Pointe Public School

System. In Redlin, the defendant-employer argued that the plaintiff’s conduct was less serious than

her comparator’s because the plaintiff “behaved unethically at least three different times, whereas

[her comparator] did so only once.” 921 F.3d at 611 (internal quotation marks and record citations

omitted). In rejecting that argument as a reason for granting judgment as a matter of law, we found

the fact that the plaintiff’s same underlying misconduct was “inexplicabl[y]” divided into multiple

violations instead of one could itself be evidence of pretext. Id. at 612–13. Similarly, we have

recognized that “[t]he relative severity of two actions is not determined solely by whether those

actions violated the same company rule or policy.” Jackson, 814 F.3d at 780. Instead, the main

considerations that we take into account when considering whether two employees engaged in

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“substantially identical” misconduct for purposes of a differential treatment claim are the type,

circumstances, and respective severity of the misconduct alleged. See, e.g., id. at 780–83; Johnson,

942 F.3d at 331–32. While FCA US may ultimately be able to persuade a jury that it considers

Plaintiff’s misconduct to be more serious than Bergin’s, this Court does not weigh the evidence or

make credibility judgments when reviewing a summary judgment motion. E.g., Alspaugh v.

McConnell, 643 F.3d 162, 168 (6th Cir. 2011).

We next turn to FCA US’s argument that it treated Bergin more favorably because the

results of Bergin’s investigation were inconclusive, whereas Plaintiff’s investigation was

conclusive. While this may be a reason that the jury ultimately rejects Plaintiff’s claim of unlawful

discrimination, it is not determinative of Defendant’s motion for summary judgment. This is

especially true under the facts of this case, where there is a genuine question as to whether Bergin’s

results were inconclusive precisely because of Bergin’s misconduct. Based on the investigative

report, a reasonable juror could conclude that Bergin purposefully failed to document his

transactions and that he asked the supplier to delete evidence of its payments to Tocco.

Our decision is further bolstered by the extent of the dissimilarity in the treatment that

Plaintiff and Bergin received. This is not a case like others we have seen where the plaintiff was

subjected to termination while the comparator was merely suspended, see Snyder v. Ohio Dep’t of

Rehab. & Corr., 702 F. App’x 341, 344 (6th Cir. 2017), or where the plaintiff was terminated but

the comparator was at least subjected to performance counseling or some other disciplinary action,

see McLaughlin v. Fifth Third Bank, Inc., 772 F. App’x 300, 301 (6th Cir. 2019). Instead, Plaintiff

alleges that Bergin effectively received a promotion after the investigation into the kickbacks issue

because he was placed into a higher paying position. FCA US has not put on any evidence to

13 No. 19-1420, Kenya Spratt v. FCA US LLC

dispute this. So, unlike the cases in which a plaintiff and comparator are simply subjected to

differential discipline, in this case Plaintiff alleges that his comparator was effectively subjected

to favorable treatment for misconduct that was similarly serious. This evidence furthers Plaintiff’s

argument that there is a triable issue as to pretext. Cf. Snyder, 702 F. App’x at 344 (stating that we

must consider the similarity in the employees’ misconduct as well as any dissimilarity in the

discipline received to determine if an inference of pretext is raised).

III. CONCLUSION

Because Plaintiff has demonstrated a genuine dispute of material fact as to whether he

would have been terminated if he were Caucasian instead of African American, we reverse the

decision of the district court and remand for further proceedings.