Norton Healthcare, Inc. v. Deng

• Decision Date: 18 February 2016
• Docket Number: 2013–SC–000526–DG
• Citation: 487 S.W.3d 846
• Parties: Norton Healthcare, Inc., Appellant v. Lual A. Deng (formerly Jacob L. Aker), Appellee
• Court: United States State Supreme Court — District of Kentucky

487 S.W.3d 846

Norton Healthcare, Inc., Appellant

v.Lual A. Deng (formerly Jacob L. Aker), Appellee

2013–SC–000526–DG

Supreme Court of Kentucky.

RENDERED: FEBRUARY 18, 2016

COUNSEL FOR APPELLANT: Alina Klimkina, Donna King Perry, Jeremy Stuart Rogers, Dinsmore & Shohl, LLP

COUNSEL FOR APPELLEE: Everett Clay Hoffman, Priddy, Cutler, Naake & Meade, PLLC

OPINION OF THE COURT BY CHIEF JUSTICE MINTON

In cases where the employee must show that he applied for the position in question in order to establish a prima facie claim for employment discrimination, some courts have applied the futile-gesture doctrine to excuse this application requirement if the employee can show that the employer's consistently enforced discriminatory policy made applying for the position a pointless exercise. The Court of Appeals cited the futile-gesture doctrine to rescue Lual A. Deng's (Aker) post-termination retaliation claim from summary judgment granted by the trial court in favor of his former employer, Norton Healthcare, Inc. On discretionary review, we reverse that decision by the Court of Appeals and reinstate the trial court's summary judgment because the Court of Appeals overreached by injecting the futile-doctrine theory on it's own motion and trial court did not err in granting summary judgment to Norton as a matter of law.

I. FACTUAL AND PROCEDURAL BACKGROUND.

Aker is a Sudanese immigrant first hired by Norton in 2002 as a linen clerk. Over the course of the next four years, he rose through the Norton system and was promoted to Personal Care Assistant in 2006. In this capacity, conflicts emerged between Aker and Gloria Pescador, his assigned floor nurse—some of which allegedly escalated to include racial and ethnic barbs directed at Aker.

This tension reached a boiling point in August 2007, when following another confrontation with Pescador, Aker complained to his supervising nurse, Jean Paulraj, about his work environment. During this conversation, and over interruption from Pescador, Aker allegedly told Paulraj that if Pescador did not change the way she spoke to him, then “something else” would happen.¹ This was perceived as a threat, and the matter was directed to Nurse Manager Karen Higdon. Higdon then commenced an investigation with Norton's Human Resources department. During this period, Aker was placed on administrative leave. Higdon ultimately concluded that Aker's tone and statements were physical threats to harm Pescador and determined that this constituted a Level I offense. Under Norton's procedures, the punishment for a Level I offense is immediate termination.

Aker appealed this decision to Norton's Grievance Resolution Team. After interviewing Aker and the other parties involved in the incident, the Grievance Resolution Team reversed Higdon's decision, finding that Aker's actions were more properly classified as a Level II offense. This was primarily because the team could not conclusively determine that Aker's statements posed an immediate threat of physical harm to Pescador. Higdon accepted the decision and opted not to use the additional internal appellate procedures within the Norton system to reinstate her original Level I classification.

Instead of immediate termination, the Grievance Resolution Team recommended that Aker participate in Norton's Employee Assistance Program counseling, and he was permitted to seek another position in a different Norton unit or location. Norton placed him on administrative leave to complete the counseling and gave him until November 28, 2007, to apply for alternate employment as an internal candidate. During this period, Aker met with Jason Coffey, a Norton retention manager, and applied for three open positions internally. He was not hired for any of them.

After his administrative leave expired, Aker could only apply for positions as an external job candidate. So after November 28, 2007, Aker's employment with Norton was effectively terminated, and he later received notification from Norton that he was no longer an employee. He never applied for any additional jobs under the Norton Healthcare umbrella.

Shortly after his termination, Aker began consulting with attorney Erwin A. Sherman, who advised Aker from December 2007 through March 2008. In late December 2007, Sherman wrote a letter to Norton Human Resources stating that Aker had waited “an inordinate amount of time” to be reinstated to return to work. This letter prompted Norton's Assistant General Counsel, Thomas E. Powell II, to respond that Aker would not be returning to work because he failed to obtain employment through Norton's retention program and that he was thus no longer a Norton employee.

On February 27, 2008, Aker filed a pro se action in the circuit court against Norton for racial discrimination in terminating his employment. The following week, Sherman telephoned Powell, and Powell allegedly informed Sherman that Aker would not be considered for future employment with Norton after filing his pro se suit.² Sherman memorialized his impressions of the conversation in a letter he sent to Powell the next day.

Aker's pro se discrimination case lay dormant for the next two years, but he obtained new counsel and filed an amended complaint in February 2010, asserting claims of breach of contract, along with violations of the Kentucky Civil Rights Act. As part of his contractual claim, he contended that he was entitled to reinstatement and transfer to another department after completing the Grievance Team's recommended counseling, rather than termination. Additionally, he alleged termination of his employment in 2007 to be motivated by racial discrimination and retaliation for complaining to his supervisor—both actions arising under the Kentucky Civil Rights Act. Finally, his amended complaint claimed that Norton's continued failure to reinstate him after February 2008 was retaliation for filing his original pro se discrimination complaint. This final claim is the whole issue before us today.

In proceedings before the trial court, Aker did not claim to have applied for any position after filing his pro se complaint, rather, he argued that Norton was contractually obligated to reinstate his employment because of his compliance with the Grievance Team recommendation. The retaliation, he argued, was that Norton based its decision no longer to consider him for employment because he sued Norton in February 2008.

In January 2012, the trial court granted Norton summary judgment on all of Aker's claims. The trial court reasoned that his employment had been completely terminated at the time Powell spoke with Sherman and that Norton had no contractual obligation to rehire him. So Norton's decision not to consider him was not actionable.

Aker appealed this ruling to the Court of Appeals, which unanimously affirmed summary judgment on his KCRA discrimination claims and the first retaliation claim arising from his termination. But the appellate panel split on his post-termination retaliation claim. The panel majority first held that Kentucky Rules of Evidence (KRE) 408

did not render the contents of Sherman and Aker's telephone conversation inadmissible as part of a settlement negotiation. The panel majority distinguished the lawyers' discussion: rather than a settlement negotiation, the panel majority viewed it as Norton's declaration of its intent not to engage in settlement negotiations.

Further, despite acknowledging that Aker never applied for any position with Norton, the panel rejected Norton's argument that he failed to present a prima facie retaliation claim. Norton argued that absent any application for a position, Aker failed to show any “adverse employment action” in connection to Powell's alleged statement indicating that Norton would not be interested in hiring him. The panel majority disagreed and reversed the trial court's summary judgment by determining that the futile-gesture doctrine excused Aker's failure to apply for a position. The majority held that, “[b]eing told by a Vice President and the General Counsel of Norton that Aker would not be considered for a position, even if he dismissed the case, is a perfect demonstration of the futility in filing an application.” The dissenting judge departed from this holding and criticized the majority's reliance on an argument that had not been raised to the trial court.

Norton sought discretionary review of the appellate court's reversal summary judgment on the post-termination retaliation claim. Aker then filed a cross-motion as to the summary judgment issues that the Court of Appeals affirmed. We declined to review the issues raised by Aker's cross-motion. We granted discretionary review in order to review the panel majority's sua sponte injection of the futile-gesture doctrine, and to determine whether summary judgment on the post-termination retaliation claim was appropriately entered in favor of Norton by the trial court. Because we conclude that the Court of Appeals erroneously invoked the futile-gesture doctrine, and that Aker fails to state a prima facie retaliation claim, we reverse the decision of the Court of Appeals on this issue and reinstate the trial court's summary judgment.

II. ANALYSIS.

The Kentucky Civil Rights Act (KCRA) was passed by the General Assembly in 1966 to place the Commonwealth on par with the Federal Civil Rights Act of 1964.³ The general purpose of the KCRA is to “safeguard all individuals within the state from discrimination because of familial status, race, color, religion, national origin, sex, age forty (40) and over, or because of the person's status as a qualified individual with a disability.”⁴ Aker's claim before us today arises under the KCRA's anti-retaliation provision, designed to deter employer conspiracies to violate the statute.⁵ Specifically, Aker alleges that Norton's failure to hire (or in this case, re-hire) him is a direct response to filing his pro se discrimination action in February 2008.⁶

Because of its similarity to...