Mary Jo Delaney v. Cragun Corporation

• Court: Court of Appeals of Minnesota
• Decided: May 9, 2016
• Docket: A15-1333
• Status: Unpublished

Opinion

This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2014).

STATE OF MINNESOTA IN COURT OF APPEALS A15-1333

Mary Jo Delaney, Appellant,

vs.

Cragun Corporation, Respondent.

Filed May 9, 2016 Reversed and remanded Ross, Judge

Crow Wing County District Court File No. 18-CV-14-2177

Jonathan G. Steinberg, Chrastil and Steinberg, P.L.L.P., Minneapolis, Minnesota (for appellant)

Roger C. Justin, Benjamin B. Bohnsack, Rinke Noonan, St. Cloud, Minnesota (for respondent)

Considered and decided by Reyes, Presiding Judge; Ross, Judge; and Klaphake,

Judge.

 Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10. UNPUBLISHED OPINION

ROSS, Judge

Mary Jo Delaney sued her employer, Cragun Corporation, alleging that Cragun

discharged her because she reported sexual harassment, violating the Minnesota Human

Rights Act. The district court rejected the allegation and awarded summary judgment to

Cragun. But in this appeal, both parties agree that the district court misapplied the law by

granting summary judgment on the notion that an MHRA retaliation claim that alleges that

the employer fired an employee for reporting sexually offensive conduct fails as a matter

of law unless the reported conduct was pervasive enough to support an MHRA sexual-

harassment claim. The parties correctly understand that the district court erred on the legal

standard, and we hold that Delaney’s claim survives Cragun’s summary judgment motion.

We therefore reverse and remand.

FACTS

Because the case reached only a preliminary pretrial stage, we will present the facts

in the light most favorable to Delaney’s civil action. Delaney has worked since 2003 in the

laundry department of Cragun Corporation’s Brainerd resort. Delaney had a run-in with

maintenance employees in September 2013, and she reported it to the maintenance

manager. According to Delaney, she was ironing near a laundry-room window and heard

two maintenance workers talking outside but apparently directing their discussion toward

her. One of them, A.L., told the other, “You can be peeping, . . . and then you can [do

this],” and then Delaney saw A.L. gesturing for about 30 seconds as if to simulate

masturbating, while he looked at Delaney through the window.

2 Delaney went directly to Cragun’s maintenance manager, Mitchell Smith,

describing what she saw and heard. Smith told Delaney to inform him if anything else

happened. In the meantime, Smith took Delaney’s report to Cragun’s general manager,

Richard Lecy, who directed Smith to tell the two men that their behavior was inappropriate

and to document that they were warned. Two documents in Cragun’s personnel files

memorialize these verbal warnings. Lecy says that he told Smith to advise Delaney to

report any repercussions to Smith. But Delaney says that Smith never assured her in this

way or told her that Cragun had taken any action at all. Lecy acknowledges that he never

told Delaney that the men were warned, citing his own practice not to discuss one

employee’s discipline with another. Delaney says that she heard that A.L. began telling

other employees that she turned him in for sexual harassment.

About two weeks after Delaney told Smith about the maintenance workers’

misconduct, Lecy called Delaney into his office to discuss unrelated complaints about her

work performance. During this meeting, Delaney expressed her concern that nothing had

been done about the laundry-window incident. Lecy told Delaney that she should submit

any complaints up the line of supervision—first to her own supervisor (an assistant

manager), then to the manager, and finally, if necessary, to Lecy. Delaney testified that the

managers ended the meeting before she could discuss her concerns further.

About three weeks after that meeting, Delaney drafted a letter to Smith but did not

immediately deliver it. Delaney wrote that her concerns were not being taken seriously

enough and that she wanted to know what was done about her complaint. The letter also

stated that A.L. had been telling others that she reported him for sexual harassment, and it

3 expressed Delaney’s concern that she was being blamed. Delaney amended the yet

undelivered letter more than a month later, adding that nothing had been done about the

incident and that it still troubled her. Delaney then gave one copy of the letter to assistant

housekeeping manager Kristine Warner, asking that the letter be placed in her personnel

file, and another to Smith.

Three days after Delaney delivered her letter, on January 3, 2014, Lecy called

Delaney into his office. According to Delaney, Lecy raised his voice at her and described

the letter as offensive. She says that Lecy asked if Smith had spoken with her, and she said

he had not. To this Lecy responded that it was documented that Smith did speak with her.

Lecy told her that she knew that she was supposed to complain first to her managers and

then to him if she did not see results from her complaint, and she responded that she had

come to Lecy soon after the incident but that he would not address her concerns. As the

meeting progressed, Lecy first demoted Delaney from her position as a supervisor, then he

asked her to resign, and finally he terminated her employment after she refused to resign.

Within a week after Delaney’s discharge, Lecy listed three reasons for his decision.

The list first included a violation of a rule prohibiting employees from failing to obey

instructions, referring to Delaney’s failure to report her concerns up the designated chain

of supervision. It stated next that Delaney had violated a conduct rule, describing as

inattentive her dating of the complaint letter as October 31 when she delivered it at the end

of December. And third, the list included Delaney’s alleged false statement claiming that

Smith had not spoken to her following up on her report.

4 Delaney sued Cragun under the Minnesota Human Rights Act (MHRA), asserting

unlawful gender discrimination and reprisal. She also claimed that Cragun violated the

Minnesota Personnel Record Review & Access Act.

The district court granted summary judgment to Cragun. It reasoned that because

the September incident was not pervasive enough to support an actionable sexual-

harassment claim under the MHRA, Cragun’s alleged reprisal for Delaney’s reporting of

that incident could not constitute an MHRA retaliation claim. Delaney appeals.

DECISION

Delaney appeals only the district court’s grant of summary judgment for her reprisal

claim. Summary judgment is appropriate only when the admissible evidence presents no

genuine issue of material fact and one party is entitled to judgment as a matter of law.

Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993). We review summary judgment de

novo to determine whether the district court properly applied the law and if genuine issues

of material fact exist to preclude summary judgment. Riverview Muir Doran, LLC v. JADT

Dev. Grp., LLC, 790 N.W.2d 167, 170 (Minn. 2010). In doing so, we consider any

conflicting evidence in the light most favorable to the party who opposes summary

judgment. Fabio, 504 N.W.2d at 761.

An actionable reprisal claim exists when an employer “intentionally engage[s] in

any reprisal against any person” because she opposed a practice forbidden by the MHRA.

Minn. Stat. § 363A.15 (2014). Delaney argues that Cragun fired her for reporting

harassment, for challenging Cragun’s allegedly insufficient response to it, and for reporting

A.L.’s retaliatory bad-mouthing of Delaney to other employees. Because Delaney relies on

5 circumstantial evidence to establish Cragun’s motive for discharging her, we will follow

the customary burden-shifting analysis established by McDonnell Douglas Corporation v.

Green, 411 U.S. 792, 93 S. Ct. 1817 (1973). See Goins v. West Grp., 635 N.W.2d 717, 724

(Minn. 2001).

Under the McDonnell Douglas framework, a plaintiff-employee attempting to avoid

summary judgment must first establish a prima facie case of a discriminatory motive. Id.

If the employee succeeds in establishing a prima facie case, the burden shifts to the

employer to identify a legitimate nondiscriminatory reason for its adverse employment

action against the employee. Id. If the employer meets this burden of production, the burden

shifts back to the employee, who can then avoid summary judgment only by producing

evidence that the employer’s reason is mere pretext for unlawful discrimination. Id.

For the reasons that follow, we believe the district court erred by concluding that

Delaney did not present a prima facie case that Cragun unlawfully retaliated against her.

And we hold that she also presented sufficient evidence to avoid summary judgment.

Delaney’s Prima Facie Reprisal Claim

A prima facie claim of reprisal consists of three elements: (1) an employee’s

engaging in statutorily protected conduct; (2) the employer’s taking adverse employment

action; and (3) a causal connection between the employee’s protected conduct and the

employer’s adverse action. Hoover v. Norwest Private Mortg. Banking, 632 N.W.2d 534,

548 (Minn. 2001).

The district court reasoned that because A.L.’s crude laundry-window behavior did

not itself constitute an MHRA violation, Delaney’s report of that behavior cannot be

6 statutorily protected conduct and, therefore, Cragun could not have engaged in unlawful

MHRA reprisal by retaliating against Delaney for making the report. This reasoning

misconstrues the law. As Delaney argues on appeal (and as Cragun acknowledged through

counsel at oral argument) Delaney’s reporting of the incident is protected conduct under

the MHRA even if the reported sexually offensive conduct is not itself pervasive enough

to constitute actionable MHRA harassment.

The district court relied on Kratzer v. Welsh Companies, LLC, 771 N.W.2d 14

(Minn. 2009), to reason that Delaney could not meet the first element of a prima facie case

for an MHRA reprisal claim unless she could establish that she was being punished for

reporting an actual violation of the MHRA. But Kratzer interprets a provision of

Minnesota’s Whistleblower Act, which prohibits retaliation for the reporting of a good-

faith, reasonable belief that a violation of law has occurred, see 771 N.W.2d 14, 18–19

(discussing Minn. Stat. § 181.932, subd. 1 (2014)), while the MHRA has no similar

requirement. Kratzer therefore does not provide the rule of law defining the first prong of

reprisal discrimination under the MHRA.

The supreme court has declined to decide whether an actual violation of the MHRA

must have occurred to establish statutorily-protected reporting. See Bahr v. Capella Univ.,

788 N.W.2d 76, 82 (Minn. 2010). But caselaw deciding the issue as it has developed

concerning the mirror federal statutes offers guidance. Minnesota looks to the

interpretation and application of Title VII to define the contours of MHRA litigation

because of the clear similarities between the federal law and the MHRA. Anderson v.

Hunter, Keith, Marshall & Co., 417 N.W.2d 619, 623 (Minn. 1988). Federal circuit courts

7 interpreting Title VII’s similar reprisal provision tend to apply a good-faith, reasonable-

belief standard, not an actual-violation standard. See, e.g., Fine v. Ryan Int’l Airlines, 305

F.3d 746, 752 (7th Cir. 2002); Sias v. City Demonstration Agency, 588 F.2d 692, 695 (9th

Cir. 1978).

We do not discuss further whether a good-faith, reasonable-belief standard applies

or whether some lesser standard applies. Cragun reasonably concedes that, at the very least,

the district court’s actual-violation requirement is erroneous. Delaney was reporting the

kind of conduct that constitutes sexually harassing conduct under the MHRA even if the

single incident by itself would not sustain an actionable MHRA claim. See Minn. Stat.

§ 363A.08, subd. 2 (2014) (prohibiting employment discrimination based on sex); Minn.

Stat. § 363A.03, subd. 13 (2014) (including sexual harassment as sex discrimination); id.,

subd. 43 (2014) (defining “[s]exual harassment” to include “verbal or physical conduct or

communication of a sexual nature” when the conduct creates an “offensive employment

. . . environment”). Although offensive sexual conduct does not violate the MHRA until it

recurs so frequently or intensely that it causes a hostile work environment, see Goins, 635

N.W.2d at 725, the MHRA does not limit retaliation protection to employees who wait to

report the offensive conduct until after it has become so pervasive. What would be the point

of allowing MHRA retaliation claims only for victim employees who have actually

endured and reported actionable sexual harassment, since the sexual harassment itself

already provides the employee the grounds for an MHRA claim without any report?

Delaney’s reporting of A.L.’s gesturing window performance was protected conduct under

the act.

8 We turn to Cragun’s argument that Delaney’s reprisal claim nevertheless fails on

the third prong of the prima facie analysis because no causal connection exists between her

original report of the incident and her discharge. We reject the argument.

We first observe that we do not agree with Cragun that Delaney’s protection from

reprisal covered only her initial oral report. Her December letter is also protected conduct,

because, reasonably construed in her favor, that letter is a mere extension of her September

report. The letter asserted that Delaney wanted to know what action Cragun had taken after

she initially complained about the incident. It recounted the graphic nature of the

employee’s conduct and declared that it had significantly disturbed Delaney. It indicated

that she had waited patiently for an answer to her complaint even while A.L. spread the

word that she had turned him in and that she felt she was being treated as the wrongdoer.

The letter, fairly perceived in the light most favorable to Delaney as the nonmoving party,

can be described as an employee’s unsophisticated reassertion of her original complaint

and her request that Cragun do something about the incident now.

Cragun’s argument that no causal link exists between Delaney’s protected conduct

and her discharge is not convincing. A party can demonstrate a casual link indirectly,

relying on circumstances that imply the employer’s retaliatory motive. Hubbard v. United

Press Int’l, Inc., 330 N.W.2d 428, 445 (Minn. 1983). Close temporal proximity between

the protected conduct and employment termination can itself imply reprisal. See Potter v.

Ernst & Young, LLP, 622 N.W.2d 141, 145 (Minn. App. 2001); see also Hubbard, 330

N.W.2d at 445 (holding that discharge two days after plaintiff complained implied a

retaliatory motive for the purposes of the prima facie case). According to at least some

9 evidence in the record, three days after Delaney gave her letter to Smith and Warner on

December 31, she was called into the general manager’s office, yelled at, and discharged.

That Delaney was terminated days after engaging in the protected conduct allows at least

the inference that her complaint caused the discharge. This temporal proximity is sufficient

to show causation at this summary judgment stage.

We are not persuaded otherwise by Cragun’s emphasis on the fact that Lecy did not

seem to decide to discharge Delaney until some point after the meeting began. This fact

actually works against Cragun. One might infer (again, reasoning in the light most

favorable to Delaney’s claims) from Lecy’s spontaneous decision to discharge Delaney

during the meeting that he became increasingly agitated as Delaney continued to insist that

her harassment complaint be taken seriously. It is not overwhelming evidence, but it need

not be at this stage. The circumstantial evidence of a retaliatory motive is enough to prevent

us from deciding the question of motive as a matter of law.

Cragun’s Nondiscriminatory Reason for the Discharge

The burden now shifts to Cragun to show that admissible evidence would allow a

reasonable fact-finder to conclude that Cragun discharged Delaney for a legitimate,

nondiscriminatory reason. See Hoover, 632 N.W.2d at 542. Cragun implies that Lecy’s

stated reasons in his post-termination note are the nondiscriminatory reasons for which

Cragun discharged Delaney. These again include Delaney’s failure to follow the correct

reporting procedure by her giving the letter to Smith instead of to her immediate supervisor,

Delaney’s inattentive misdating of the December letter by backdating it to October, and

Delaney’s allegedly falsely claiming that Smith had not spoken to her following up after

10 her report to him. These are not compelling reasons for a discharge. But they are

nondiscriminatory reasons sufficient for this stage of the McDonnell Douglas analysis.

This returns the onus to Delaney to show that these reasons are pretextual.

Cragun’s Reasons as Pretext for Discrimination

To avoid summary judgment through the final stage of the McDonnell Douglas

analysis, the plaintiff need only show that a fact dispute exists as to whether the stated

nondiscriminatory reasons for discharge were really a pretext for an impermissible motive.

See Hoover, 632 N.W.2d at 546. For example, the Hoover court affirmed this court’s

decision reversing the district court’s summary judgment decision, holding that a

reasonable fact-finder could find that the employer’s proffered nondiscriminatory reason

for the discharge was a pretext for discrimination because the evidence taken together

created a doubt about the employer’s truthfulness. Id. at 547. On the same basis, we believe

that Delaney presents a material fact dispute.

Two of Lecy’s stated reasons for discharging Delaney bear directly on her letter

complaining about A.L.’s sexually offensive conduct, and the third reason bears on her

statement describing the follow-up to her complaint about that conduct. This aligns all

these reasons precariously close to Delaney’s harassment report. The first reason, which is

Lecy’s concern that Delaney failed to follow protocol for the letter, is partly belied by the

fact that Delaney in fact delivered one of the copies of the letter to Warner, an assistant

manager apparently in the chain of supervision that Lecy had identified for any report by

Delaney. Cragun is correct that the letter does not precisely follow Lecy’s direction in that

she also copied the maintenance supervisor, but that’s a pretty thin slice at summary

11 judgment, particularly when Cragun fired Delaney almost immediately, before she had the

chance to move her complaint up to the next-highest supervisor. Similarly close to

Delaney’s report are the notions that she was fired because she inattentively misdated the

December letter and that she lied by denying Smith had followed up with her about her

complaint. That Lecy did not intend to discharge Delaney immediately after he saw the

date on the letter is enough, under these facts, for a reasonable jury to question the

credibility of his reasons and to consider whether his real reason may rest elsewhere. And

the notion that the real reason was Delaney’s alleged lie about whether she discussed the

situation with Smith depends entirely on the jury believing that Lecy truly discharged her

for that reason. Given the arguably pretextual infirmities or doubtfulness about the other

two reasons, we cannot conclude as a matter of law that a jury would accept the stated

dishonesty reason for the discharge or disregard the close relationship between the stated

reasons and Delaney’s reporting of harassment.

In sum, we cannot overlook the fact that Lecy discharged Delaney during the

meeting that he called specifically to discuss Delaney’s letter restating her harassment

complaint. Nor can we overlook the fact that all of Lecy’s listed reasons are closely tied to

Delaney’s delivery of the complaint letter. We believe that this is enough for a jury to put

the question of Cragun’s motives to the test. Of course a jury might accept Lecy’s reasons,

or it might reject them but still not find that his real reason was retaliation. These are fact

issues that courts do not resolve at summary judgment.

12 For our purposes at this early stage, we believe that Delaney has presented a

sufficient showing of unlawful motive and pretext, requiring us to reverse the district

court’s summary judgment decision.

Reversed and remanded.