Gorman v. Verizon Wireless Tex., L.L.C.

• Decision Date: 28 May 2014
• Docket Number: No. 13–20562.,13–20562.
• Citation: 753 F.3d 165
• Parties: Amy R. GORMAN, Plaintiff–Appellant v. VERIZON WIRELESS TEXAS, L.L.C.; Verizon Wireless Services, L.L.C.; GTE Mobilnet of South Texas, Limited Partnership, Defendants–Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

753 F.3d 165

Amy R. GORMAN, Plaintiff–Appellant

v.VERIZON WIRELESS TEXAS, L.L.C.; Verizon Wireless Services, L.L.C.; GTE Mobilnet of South Texas, Limited Partnership, Defendants–Appellees.

No. 13–20562.

United States Court of Appeals,Fifth Circuit.

May 28, 2014.

Sufi Nasim Ahmad, Cline Ahmad, The Woodlands, TX, Joseph Y. Ahmad, Ahmad, Zavitsanos, Anaipakos, Alavi & Mensing, P.C., Houston, TX, for Plaintiff–Appellant.

Ruthie Nelson White, William Robinson Stukenberg, Jackson Lewis, L.L.P., Houston, TX, for Defendants–Appellees.

Appeal from the United States District Court for the Southern District of Texas.

Before JOLLY, GARZA, and HIGGINSON, Circuit Judges.

E. GRADY JOLLY, Circuit Judge:

Amy Gorman contends she was discharged by Verizon in retaliation for complaining of discrimination and harassment, in violation of the Texas Commission on Human Rights Act. She filed this suit in Texas state court. Verizon removed it to federal court on the basis of diversity. Thus Texas law must apply in this appeal; which leads us to the question of whether the exhaustion of administrative remedies under Texas law is jurisdictional or merely a condition precedent that may be forgiven. We hold that the exhaustion requirement here—the requirement to receive a right to sue letter before filing suit—is only a condition precedent. Thus, when we consider the appeal on its merits, we find no merit, based on the absence of causation between Gorman's complaints and her discharge; the decisionmaker had no knowledge of the alleged protected activity claimed by Gorman. Although the Verizon executive terminating her had no knowledge of her complaint, she did have knowledge of a complex commission-generating scheme in which Gorman was implicated and from which she profited.

I.

Amy Gorman worked in government sales for the related corporate entities Verizon Wireless Texas, L.L.C., Verizon Wireless Services, L.L.C., and GTE Mobilnet of South Texas, L.P. (collectively, “Verizon”). Gorman supervised a team of six. Her immediate superior was Darryl Williams, who also worked in government sales. Still further above her was her supervisor Jason Smith, who oversaw business sales.

Gorman alleged that Smith discriminated against her on the basis of her sex. In the district court's words, she alleged that, “Smith consistently treated her worse than her male colleagues. For example, she alleges that he excluded her from meetings, social events, networking functions, and dinners; excluded her from important business emails and other communications; and, in general, treated her in a more derogatory fashion, including cursing and name-calling.” Gorman v. Verizon Wireless Texas, LLC, No. 4:11–CV–729, 2013 WL 4520187, at *1 (S.D.Tex. Aug. 24, 2013) (internal quotation marks and citations omitted).

In September 2009, Smith advised Gorman she should consider taking a different, perhaps less prestigious position that did not involve managing a team. This advice was prompted because Gorman and her team had failed to meet sales quotas throughout 2009. Gorman initially agreed that she would move to this position. Before changing positions, however, Gorman met with the Verizon human resources department. There, she complained about Smith's allegedly discriminatory conduct. This complaint is the protected activity that she engaged in, and which she claims resulted in her eventual termination.

Gorman's meeting with human resources led her to decide not to take the new job after all and to remain in her current job. Several months later, in December or January 2010, Gorman voluntarily accepted a third position at Verizon, which could have resulted in a salary cut, depending on her performance.

Verizon acted on Gorman's complaints about Smith. Deeone McKeithan of Verizon's human resources department met with Smith to investigate Gorman's allegations. McKeithan did not mention Gorman as the source of the complaint. McKeithan asked questions about several of the two hundred employees Smith had under him, and one of the employees discussed was Gorman. McKeithan concluded there was no basis to believe Smith had discriminated against or harassed anyone.

Around the time of the complaint, in October 2009, Gorman became enmeshed in a manipulative scheme by Verizon employees to enlarge their commissions at Verizon's expense. This misdeed came to light in March 2010, when the Texas Department of Criminal Justice (“TDCJ”), the state agency customer who benefited indirectly from the employee scheme, contacted Verizon about an invoice it believed it had mistakenly received. This complaint set off an investigation that revealed a scheme dating back to October 2009. It implicated Gorman, Gorman's supervisor Williams, Gorman's subordinate Robert Whittleman, and another Verizon employee Chris Medlenka (“TDCJ Team”). Through this team, Verizon committed to give the TDCJ 200 phones for free as well as a $20,000 credit. At the same time, Verizon was to activate 200 lines but then immediately suspend them for six months, ensuring TDCJ, the customer, would be charged nothing. This arrangement would be cancelled after six months. The Verizon employees involved would receive commissions, because after six months any contract cancellations would not undo commissions previously awarded to employees. TDCJ was an innocent party in the scheme, as far as the record shows.

Verizon lost $75,000 as a result of the scheme. It began to investigate the scheme's details in April 2010. Victor Fettes, who worked in Verizon's finance department, assigned Sandra Cocetti, another Verizon employee, to investigate the TDCJ transaction. During the investigation, one of the TDCJ team confessed that the scheme's purpose was to gain commissions. He also stated that Gorman was fully aware of the transaction's details. Although Gorman questioned the deal and raised concerns about the transaction to her immediate superior, Williams, she did nothing more. Williams was part of the TDCJ team and apparently in on the scheme as well. Gorman was on vacation when the scheme was initiated. She did, however, gain $1,200 in commissions from the transaction.

Cocetti's findings were reported to Fettes (finance department), Smith (Gorman's superior), and McKeithan (human resources department). These three relayed the findings to Kay Henze, Verizon's regional president. Henze decided to fire the entire TDCJ team. Her first reason was that the TDCJ team violated the honesty policy of Verizon's code of conduct in structuring the transaction. Her second reason was that even if those fired did not know the full details of the transaction, they should have known given the large size of the deal. Fettes, Smith and McKeithan concurred in the termination decision. Gorman was fired on July 7, 2010. The other TDCJ team members were also fired.

Gorman filed suit in Texas state court on November 19, 2010, alleging claims of gender discrimination and retaliation under the Texas Commission on Human Rights Act (“TCHRA”). Tex. Labor Code Ann. § 21.001 et seq. (West 2013). Before filing suit, Gorman had also filed charges of discrimination with the federal Equal Employment Opportunity Commission (“EEOC”) and had received a right to sue from that agency. At the time of filing suit, she had also filed a charge of discrimination with the Texas Workforce Commission (“TWC”) but had not yet received her right to sue from that agency. After filing, she received a right to sue letter from the TWC.

Verizon removed the case to the United States District Court for the Southern District of Texas and eventually moved for dismissal or, in the alternative, summary judgment. The district court declined to dismiss the claims based on Gorman's failure to receive a TWC right to sue letter before filing her suit, holding that her eventual receipt of the letter had cured her initial failure. Gorman, 2013 WL 4520187 at *3, n. 1. The court then granted summary judgment in favor of the defendants on Gorman's gender discrimination and retaliation claims. It held that Gorman failed to make her prima facie case on either claim. Id. at *3–6. Alternatively, on the retaliation claim, Gorman had also failed to rebut Verizon's non-pretextual reason for firing her. Id. at *6. Gorman now appeals the judgment regarding her retaliation claim only.

II.

We first address Verizon's argument that we should dismiss Gorman's case on jurisdictional grounds. The district court declined to do so. We review jurisdictional questions de novo. Pederson v. Louisiana State Univ., 213 F.3d 858, 869 (5th Cir.2000).

So, turning to the statute at issue. The TCHRA is modeled on Title VII. Like Title VII, the TCHRA provides that certain administrative steps are required before pursuing judicial remedies. Schroeder v. Texas Iron Works, Inc., 813 S.W.2d 483, 488 (Tex.1991). Among these is filing a complaint with the TWC. Afterwards, a judicial complaint may be filed only after the TWC either dismisses the administrative complaint or the TWC fails to resolve the complaint within 180 days. Jones v. Grinnell Corp., 235 F.3d 972, 975 (5th Cir.2001). It is undisputed that Gorman did not meet either of these requirements before filing suit.¹ The district court, however, excused this failure as subsequently cured by Gorman's receipt of a TWC right to sue letter after the suit commenced. Gorman, 2013 WL 4520187 at *3, n. 1. The court reasoned that curing the initial defect was possible because the TCHRA right to sue requirement was not jurisdictional. See id.

At issue on appeal is whether, under Texas law, failure to receive a right to sue letter is a jurisdictional defect, which cannot be excused, or a condition precedent, which may. The Texas Supreme Court held in Schroeder v. Texas Iron Works, Inc., 813 S.W.2d 483, 488 (Tex.1991), that failure to file an administrative complaint and pursue administrative remedies was a jurisdictional prerequisite. At the time of Schroeder, a TCHRA provision...