Blackburn v. United Parcel Service, Inc.
| Decision Date | 07 June 1999 |
| Docket Number | No. 98-6075,98-6075 |
| Citation | 179 F.3d 81 |
| Parties | Benjamin BLACKBURN, Appellant, v. UNITED PARCEL SERVICE, INC.; Patricia Knowles. |
| Court | U.S. Court of Appeals — Third Circuit |
On Appeal from the United States District Court for the District of New Jersey. (D.C.Civ.No. 95-cv-04709). District Judge: Honorable Maryanne Trump Barry
Walter A. Lucas, Esquire (ARGUED), Glen D. Savits, Esquire, Lisa Nemeth, Esquire, Lucas, Savits & Marose, LLC, West Orange, NJ, counsel for Appellant.
Kathleen M. Mckenna, Esquire (ARGUED), David W. MacGregor, Esquire, Proskauer, Rose, LLP, Clifton, NJ, counsel for Appellees.
Before: BECKER, Chief Judge, McKEE, Circuit Judge and LEE, District Judge. *
In this diversity case, we are asked to review the District Court's grant of summary judgment for defendant United Parcel Service ("UPS"), which was grounded on the view that the conduct of plaintiff Benjamin Blackburn did not constitute protected activity under the New Jersey "whistleblower" statute, the Conscientious Employee Protection Act ("CEPA"), N.J. Stat. Ann. §§ 34:19-1 to -8. Being doubtful of the correctness of this conclusion of the District Court, we will assume that Blackburn has met his burden of establishing a prima facie case of retaliation under CEPA. We will instead affirm the District Court's judgment on the alternative ground that Blackburn has failed to offer sufficient admissible evidence to rebut UPS's proffered legitimate justification for his discharge--his putative violation of UPS's anti-nepotism, favoritism, integrity, and accountability policies. In order to reach the pretext issue, and so as to determine which evidence of Blackburn's might be admissible at trial, we must consider the contours of a number of exceptions to the rule against admitting hearsay evidence. In particular, we must interpret the seldom-invoked exception for reputation evidence concerning family relationships, see Fed.R.Evid. 803(19), which bears on Blackburn's defense to the nepotism charges. Ultimately, we conclude that an insufficient quantum of evidence would be admissible at trial to rebut UPS's proffered legitimate justification for discharging Blackburn; hence, we affirm.
Blackburn worked for UPS 1 for approximately eight years. He began work as a driver in June 1986, and was promoted several times, first becoming a manager in 1990. In early 1992, Blackburn was transferred to a division of the company that priced UPS products and services. His duties included development of a flexible pricing project, the Incentive Administration System ("IAS"). In September 1993, he was promoted to Marketing User Representative for the Marketing Information Group in Mahwah, New Jersey. In this position, his responsibilities included addressing, through the IAS or otherwise, UPS's loss of accounts and significant amounts of business to a competitor, Roadway Package Service. His principal supervisor at that time was Gary Hopwood, who was based in Atlanta. Hopwood's supervisor was Nicholas Bain, who was also Atlanta-based.
In November 1993, Blackburn first expressed to the IAS project manager, Rich Cooley, his concerns regarding possible antitrust violations arising ut of customer discounts given through the IAS. 2 Blackburn's concerns allegedly intensified when, in early 1994, UPS began to modify its pricing system and combined ground contracts with air contracts, a "bundling" practice that he alleged allowed even unprofitable ground customers to be enticed with air discounts. Blackburn believed that the IAS project was generally falling apart because of inadequate resources and a lack of management and direction.
On March 22, 1994, Blackburn first put his concerns in writing, sending a memo to his supervisor, Hopwood. This memo stated, in relevant part:
As per our recent phone conversation, I'm detailing here areas where I believe that we may run into significant problems with respect to Anti-Trust issues going forward.
I would appreciate your running these by [UPS inhouse attorney] Joel Creamer in order to determine whether these issues will present legal obstacles.
1) No security check exists at present to authenticate or assure that the information entered by field users is either accurate or valid. As you know, it is important that user information be subject to some type of validation process or, the worst case scenario, we may be providing a discount level that could easily be interpreted as predatory in nature.
While I am unsure as to the extent of our obligation in this area, it seems to me that we must have some type of system in place that will authenticate, to some reasonable degree, the input data that our sales reps are entering in order to develop prices. To leave this to their discretion is, I believe, flirting with disaster under the present scenario.
Obviously, Creamer will have a much better sense about the company's obligation here but to expound upon my concern a bit more, it occurs to me that a challenge to our pricing methodology cannot be defended merely by the company taking the position that it didn't know what its sales reps were doing in developing discounts. That is to say, it is difficult for me to see where a posture of "see no evil, hear no evil ..." is especially wise given our current position in the Ground marketplace. I urge you to take action to determine whether this [is] as significant as I fear it may be down the road.
2) The present combination of Mark Matulavicus and Leslie Gilstrap working as representatives of the Strategic Cost groups causes me grave concerns as I have been unable, as you know, to get any real commitment from their manager as to the level of comfort we should have in determining whether their costing methodology is indeed in line with regularly accepted costing practices or whether the Incentive Administration System is intended to be built using trial methodology.
App. at 60 (ellipsis in original).
On April 18, 1994, Blackburn sent another memo to Hopwood about his discomfort with the status of IAS. He suggested that it could not be properly validated and that there were many internal failures, including the improper billing of hundreds of customers. He expressed concern that releasing IAS to customers in its present state could cause "significant" liability, and "we ought to try and get things straightened out before we end up having to explain ourselves to someone outside of our organization." Id. at 62. On June 3, 1994, Blackburn wrote to Bain, expressing the view that the IAS project Id. at 63.
On June 15, 1994, Blackburn wrote another memo to Hopwood, stating that "I have serious concerns about the rate we are moving and what I believe to be the gross negligence of our group in assuring that the system works properly and, dare I say, within the confines of ordinary accepted business principles." Id. at 64. He could not "in good conscience" sign off on the system without reasonable testing:
Our billing problems have, I believe, only beg[u]n to show themselves for what they truly will be come yet another release of the system and I am extremely uncomfortable with the idea of signing off on something that is not only wrong but very likely illegal in the way that it is used.
You have indicated to me that I should "relax" about this and stated that the issues are too complex for ordinary folks to understand. I must say that while I agree that the issues are indeed complex, it won't take a rocket scientist to figure out that the methodology we've used in creating this system lacks a basic integrity that is at the core of any worthwhile endeavor. I fear that the result will not only be a loss of confidence by our customers but also willingly and knowingly violates fundamental obligations we have as an organization to our fellow employees, our customers and the public.
It certainly wouldn't take a genius to pick apart the cost model as it stands at present and I suspect that we could easily find glaring departures from commonly accepted costing practices....
Last but not least, I believe strongly that any challenge to the practices in place would not stand a legal litmus test. For this reason, I urge you on this count to not only discuss the implications of this with the legal staff but to also take another crack at making the Strategic Costing group aware of the potential impact should additional qualified resources not be assigned to work on the project.
Id. at 64-65. Blackburn sent a final memo to Hopwood on August 12, 1994:
Yesterday we had [a meeting] at your request. I've written up the following summarization in order to highlight the key points of what became a very disturbing discussion.
... In reviewing my performance, you indicated that I am performing at a very high level technically.... You also indicated that you feel I need to improve in the area of "being a team player".
As you stated, your concern regards my continued criticism of the methodology used in IAS to apply pricing formulas which may violate Anti-Trust regulations.
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I believe that I have an obligation to raise these concerns and your demand that I "not discuss these with others" is especially difficult in light of the fact that my concerns have been on-going for some time.
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You have agreed on numerous occasions with both Pat Toomey and myself that this situation must be corrected immediately if we are to avoid a...
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