Gunn v. Senior Servs. of N. Ky., 15-5320

• Decision Date: 07 December 2015
• Docket Number: No. 15-5320,15-5320
• Parties: BARBARA GUNN, Plaintiff-Appellant, v. SENIOR SERVICES OF NORTHERN KENTUCKY, Defendant-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

BARBARA GUNN, Plaintiff-Appellant, v. SENIOR SERVICES OF NORTHERN KENTUCKY, Defendant-Appellee.

No. 15-5320

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

December 7, 2015

NOT RECOMMENDED FOR PUBLICATION

File Name: 15a0798n.06

ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF KENTUCKY

BEFORE: GRIFFIN and KETHLEDGE, Circuit Judges; and CLELAND, District Judge.^*

GRIFFIN, Circuit Judge.

Plaintiff Barbara Gunn was fired from her position as Executive Director of Senior Services of Northern Kentucky after several years of operating the organization at a deficit. She filed suit against defendant agency, claiming she was discharged because of her sex in violation of federal and state anti-discrimination laws. The district court granted summary judgment in favor of defendant, holding that plaintiff could not demonstrate that defendant's legitimate, non-discriminatory justification was a pretext for unlawful discrimination. We affirm.

I.

Senior Services of Northern Kentucky ("SSNK") is a nonprofit corporation that, as the name suggests, serves the senior citizen population of northern Kentucky. Its mission is to enable local seniors to live dignified, independent lives. SSNK is governed by a Board of Directors, which selects an Executive Director to handle the day-to-day operations of the agency. Gunn served in that capacity beginning in September 2000, though at some point her title changed to President and CEO.

During Gunn's tenure, SSNK began to operate at a deficit. In November 2006, four months into its fiscal year, SSNK had a $101,000 operating deficit and a total consolidated deficit of $140,000. In June 2008, SSNK reported a consolidated deficit of $155,738 and a program services deficit of $81,653. Expecting additional decreases in revenue for 2009, the SSNK Board stated at a June 26, 2008, committee meeting that its goal was for management "to react to the cuts and achieve a balanced budget in 2009[.]" The committee meeting minutes also made clear, "A loss in 2009 is not anticipated to be funded by the Endowment."

The "Endowment" was a source of disagreement between the Board and management, and it is a focal point of this case. It is managed by a related entity, SCNK, Inc., and its sole purpose is to serve as a "funding mechanism if funds [are] available, making sure SSNK, which is the entity that provides the programs, can remain viable and continue to operate in this area." By 2007, the fund had grown to over $1,000,000. According to regulations established by the SCNK Board of Directors, it would only distribute about five percent of the value of the endowment to SSNK on an annual basis. In more recent years, however, SSNK began relying more heavily on the endowment. By 2009, with the endowment declining due to poor market conditions, SCNK indicated that "[it] d[id] not want to tap the fund regularly, but if a proper caseis presented, and monies are needed to continue operating, the intent of the endowment document is to serve SSNK."

Despite the Board's directive to achieve a balanced budget, by March of 2009, SSNK was operating at a deficit of $93,000. SSNK's deficit worsened in 2010. In April 2010, Gunn reported a deficit of $125,206, with an estimated year-end deficit as high as $150,000. The Board reiterated that "SSNK needs to balance the budget next year" and that "[t]he agency needs to build a business model that is sustainable, expanding its reach, and philanthropic money should be on top as a cushion."

In July 2010, Melissa Lueke became Chair of the SSNK Board and began in earnest to hold Gunn accountable for the budget deficit. Days before she became Chair, Lueke emailed Gunn, telling her that her number-one priority for Gunn and her staff was preparing a "[b]alanced budget with realistic revenue figures." On September 15, 2010, Lueke emailed fellow Executive Committee members, reporting that she "asked [Gunn] to be in a position to have a balanced budget to present at the Board Meeting" the following week. She continued, "I am going to set the expectation that Barb have a plan for a balanced budget and an organizational structure that will support the delivery of quality services by 9/30. . . . If Barb is not in a position to deliver on this on 10/1, we, the executive committee, are going to have to start making the decisions for Barb."

Nevertheless, by spring of 2011, SSNK continued to report budget deficits. At the May 25, 2011, Executive Committee meeting, management reported an operating deficit of $183,223 and a total consolidated deficit of $255,933. The forecasted year-end deficit for Fiscal Year 2011 was $281,417. Looking ahead, management projected a $100,000 deficit for Fiscal Year 2012. Despite the projected deficits, the Board "agreed SCNK, Inc. is not a possiblefunding source at this time." The Board reasoned that "[t]he agency is in its 4th year of an operating deficit and needs to operate as a viable business at a break[-]even point on its own." The Board stressed that management needed to prepare a balanced budget by June 2011 and that "[m]anagement of that budget [was] imperative."

Gunn presented SSNK's budget for Fiscal Year 2012 at the next SCNK Board meeting on July 26, 2011. She projected a slight surplus. In response, SCNK approved a $100,000 grant to cover "SSNK operations through June 30, 2011, with the hope that the operating entity will generate enough surplus to pay back the endowment fund in the future."

Unfortunately, that hope was not realized. At the October 26, 2011, meeting of the SCNK Board and SSNK Executive and Finance Committees, management reported a deficit of $92,000. Management stated that "SSNK needs SCNK, Inc. to help fund operations for FY12 to break even." Management also presented a preliminary audit report regarding SSNK's finances, which identified five major concerns relating to SSNK's budget deficit. In addition, management advised the Executive Committee that, in order to receive a final unqualified opinion from the auditor, the agency would need to explain where the needed revenue will come from, as well as obtain a written commitment of funding from SCNK. In response, the Executive Committee made clear, "Expectations are for management to build a sustainable business model so SSNK operates at a surplus, not a deficit." Nevertheless, it agreed to request $100,000 from the SCNK endowment for Fiscal Year 2012, and directed Gunn and her staff to prepare a revised budget by the next month.

The revised budget revealed that SSNK's financial health was not improving. The updated forecast for Fiscal Year 2012 was a $164,000 deficit. That signaled the end of Gunn's tenure at SSNK. On December 21, 2011, the Executive Committee decided to terminate Gunn'semployment. At the next month's board meeting, the Board voted unanimously to terminate Gunn's employment, effective immediately. In the same meeting, the Board selected Ken Rechtin, the Director of Agency Services, to serve as Interim Executive Director. He served in that role until June 16, 2014, when he was replaced by full-time Executive Director, Jay Van Winkle.

Gunn filed suit against SSNK alleging that her termination was sex-based discrimination in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-2, and Kentucky's corresponding state-law analogue, Ky. Rev. Stat. Ann. § 344.040(1)(a). After an opportunity for discovery, SSNK filed a motion for summary judgment on both claims. Plaintiff opposed the motion, claiming there were genuine disputes of material fact regarding whether defendant's articulated reason for terminating her was merely a pretext for sex-based discrimination. The district court rejected plaintiff's arguments and held that defendant was entitled to judgment in its favor as a matter of law. Plaintiff timely appealed.

II.

We review de novo the district court's order granting summary judgment. CMACO Auto. Sys., Inc. v. Wanxiang Am. Corp., 589 F.3d 235, 241 (6th Cir. 2009). Summary judgment is warranted if, after viewing the evidence and drawing all reasonable inferences in the light most favorable to the nonmoving party, the pleadings, the discovery and disclosure materials on file, and any affidavits show "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), (c); CMACO Auto. Sys., Inc., 589 F.3d at 241-42. A genuine dispute for trial exists "only when there is sufficient 'evidence on which the jury could reasonably find for the plaintiff.'" Baker v. City of Hamilton, Ohio, 471 F.3d 601, 605 (6th Cir. 2006) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252(1986)). "The mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Seeger v. Cincinnati Bell Tel. Co., LLC, 681 F.3d 274, 281 (6th Cir. 2012) (quotation marks omitted).

III.

Title VII of the Civil Rights Act of 1964 makes it unlawful to "discharge any individual . . . because of such individual's . . . sex." 42 U.S.C. § 2000e-2(a)(1). Kentucky state law provides a nearly identical prohibition on discriminatory employment practices, Ky. Rev. Stat. Ann. § 344.040(1)(a).¹ When a claim of sex discrimination is built on circumstantial evidence, as it is here, we use the three-step McDonnell Douglas burden-shifting framework for evaluating the propriety of summary judgment. First, the plaintiff must establish a prima facie case of discrimination; second, the burden shifts to the defendant to articulate a legitimate, non-discriminatory reason for the adverse employment action; and third, the plaintiff must demonstrate that the stated justification is merely pretext. Texas Dep't of Cmty. Affairs v. Burdine, 450 U.S. 248, 252-53 (1981) (citing McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802, 804 (1973)).

The parties in this case have...