Velazquez-Garcia v. Horizon Lines

• Decision Date: 04 January 2007
• Docket Number: No. 06-1082.,06-1082.
• Citation: 473 F.3d 11
• Parties: Carlos VELÁZQUEZ-GARCÍA, Plaintiff, Appellant, v. HORIZON LINES OF PUERTO RICO, INC., Defendant, Appellee.
• Court: U.S. Court of Appeals — First Circuit

473 F.3d 11

Carlos VELÁZQUEZ-GARCÍA, Plaintiff, Appellant, v. HORIZON LINES OF PUERTO RICO, INC., Defendant, Appellee.

No. 06-1082.

United States Court of Appeals, First Circuit.

Heard October 31, 2006.

Decided January 4, 2007.

COPYRIGHT MATERIAL OMITTED

Irene M. Vera with whom Pedro J. Salicrup and Salicrup & Rodríguez were on brief for appellant.

J. Ramón Rivera Morales with whom Jiménez, Graffam & Lausell were on brief for appellee.

Before TORRUELLA, Circuit Judge, STAHL, Senior Circuit Judge, and HOWARD, Circuit Judge.

STAHL, Senior Circuit Judge.

This case presents an issue of the proper allocation of the burden of proof in cases of alleged discriminatory treatment under the Uniformed Services Employment and Reemployment Rights Act of 1994 ("USERRA"), 38 U.S.C. § 4301 et seq. This is the first time that we have been called upon to address this issue. Plaintiff-appellant Carlos Velázquez-García ("Velázquez") sued his former employer, defendant-appellee Horizon Lines of Puerto Rico ("Horizon"), alleging that he had been fired from his job due to his military service, in violation of USERRA. The district court granted summary judgment in favor of Horizon. Because we find that the district court incorrectly applied USERRA's burden-shifting analysis, we reverse.

I. Background

Because this is an appeal from summary judgment, we review the facts in the light most favorable to Velázquez, drawing all inferences in his favor. See Coyne v. Taber Partners I, 53 F.3d 454, 457 (1st Cir.1995).

Horizon is in the business of ocean shipping and transportation, and operates a marine terminal in San Juan, Puerto Rico. Velázquez began work at the terminal for Horizon's predecessor, CSX Lines, in September 1999. He was first employed as a yard supervisor and later became a marine supervisor. Both positions are essentially middle management, giving Velázquez supervisory authority over Horizon's stevedores.

In December 2002, Velázquez enlisted as a reservist in the U.S. Marine Corps. He immediately reported for six months of basic training. He returned to his job after basic training, but continued to report for monthly weekend training sessions, as well as annual two-week more intensive training sessions. Velázquez was a shift employee at Horizon and often had to work weekends, so Horizon needed to adjust his work hours to accommodate his military schedule. In Velázquez's pre-trial deposition,¹ he stated that his superiors complained and pressured him about the difficulty of rescheduling his shifts. He also stated that he was frequently the butt of jokes at work, being referred to as "G.I. Joe," "little lead soldier," and "Girl Scout."

During Velázquez's periods of military service, Horizon continued to pay his full salary. As a result, when Velázquez returned to work, Horizon would deduct from his paycheck amounts necessary to offset Velázquez's military income for those days in which he received both a military and a civilian paycheck.²

During this same time period, Velázquez began operating a side business cashing the checks of Horizon employees. Before 2001, Horizon had paid its stevedores' daily wages in cash. In 2001, Horizon began paying daily wages by check instead. Seeing a business opportunity, around February 2004, Velázquez began cashing these employee checks for a fee. He did this almost exclusively during off-duty hours, though he testified to cashing "one or two" checks while on duty. He performed the service primarily outside Horizon's gate or in its parking lot.³

Around September 2004, Horizon finished recouping the salary that it was owed for the periods when Velázquez was performing his military duties. On September 21, 2004, seven months after he began his side business, Velázquez was observed cashing checks by Horizon's operations manager, Roberto Batista, one of Velázquez's supervisors and one of the people Velázquez described as having trouble with his military schedule. Batista reported this to several other Horizon managers, and on September 23, 2004, Batista fired Velázquez. The termination letter did not state a reason, but Velázquez was told that his check-cashing side business was in violation of Horizon's Code of Business Conduct ("Code").⁴ He was given no warnings or other prior discipline, and had an otherwise clean record as a good employee.

Velázquez brought suit under USERRA, alleging that his firing constituted illegal discrimination due to his military service.⁵ Horizon moved for summary judgment, which the district court granted. The district court held that Velázquez had not shown sufficient discriminatory animus, nor had he shown that the stated reason for his firing, the Code violation, was mere pretext. This appeal followed.

II. Discussion

We review a district court's summary judgment de novo. Velez v. Janssen Ortho, LLC, 467 F.3d 802, 806 (1st Cir. 2006). In doing so, we recognize that "[w]hen a motion for summary judgment is made . . . an adverse party may not rest upon the mere allegations or denials of the adverse party's pleading, but the adverse party's response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e). "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." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (emphasis in original). An issue is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party," id. at 248, 106 S.Ct. 2505, and a fact is material if it has the "potential to affect the outcome of the suit," Santiago-Ramos v. Centennial P.R. Wireless Corp., 217 F.3d 46, 52 (1st Cir.2000) (internal quotation marks omitted) (quoting Sanchez v. Alvarado, 101 F.3d 223, 227 (1st Cir. 1996)). "Neither wishful thinking . . . nor conclusory responses unsupported by evidence will serve to defeat a properly focused Rule 56 motion." Griggs-Ryan v. Smith, 904 F.2d 112, 115 (1st Cir.1990) (citation omitted).

A. USERRA Actions

We have not previously addressed the mechanism of proving discrimination claims under USERRA. Thus, we first turn to the statute and its history. USERRA provides, in relevant part, that:

(a) A person who is a member of, applies to be a member of, performs, has performed, applies to perform, or has an obligation to perform service in a uniformed service shall not be denied initial employment, reemployment, retention in employment, promotion, or any benefit of employment by an employer on the basis of that membership, application for membership, performance of service, application for service, or obligation.

...

(c) An employer shall be considered to have engaged in actions prohibited — (1) under subsection (a), if the person's membership, application for membership, service, application for service, or obligation for service in the uniformed services is a motivating factor in the employer's action, unless the employer can prove that the action would have been taken in the absence of such membership, application for membership, service, application for service, or obligation for service.

38 U.S.C. § 4311.

The statute was passed in response to the Supreme Court's decision in Monroe v. Standard Oil Co., 452 U.S. 549, 101 S.Ct. 2510, 69 L.Ed.2d 226 (1981), in which the Court held under the predecessor of USERRA, the Veterans' Reemployment Rights Act ("VRRA"),⁶ that claims for anti-military employment discrimination would lie only if the employee could show that the discrimination was "motived solely by reserve status." Id. at 559, 101 S.Ct. 2510 (emphasis added). This, in effect, kept the burden on the employee to show that any offered reason by the company was actually a pretext. In the House report accompanying passage of USERRA, Congress said that Monroe "misinterpreted the original legislative intent," which was to place "the burden of proof ... on the employer, once a prima facie case is established." H.R.Rep. No. 103-65, at 24 (1994), reprinted in 1994 U.S.C.C.A.N. 2449, 2457. The House report called instead for application of the burden shifting framework of NLRB v. Transportation Management Corp., 462 U.S. 393, 103 S.Ct. 2469, 76 L.Ed.2d 667 (1983). Id.

Under Transportation Management, which addresses claims of unfair labor practices under the National Labor Relations Act, "the employee first has the burden of showing, by a preponderance of the evidence, that his or her protected status was `a substantial or motivating factor in the adverse [employment] action'; the employer may then avoid liability only by showing, as an affirmative defense, that the employer would have taken the same action without regard to the employee's protected status." Leisek v. Brightwood Corp., 278 F.3d 895, 898-99 (9th Cir.2002) (alterations in original) (quoting Transp. Mgmt., 462 U.S. at 401, 103 S.Ct. 2469). The circuit courts that have addressed the issue of burden-shifting under USERRA are unanimous in adopting this "substantial or motivating factor" test, rather than the "sole motivating factor" test of Monroe, and in putting the burden on the employer to show lack of pretext. See Coffman v. Chugach Support Servs., Inc., 411 F.3d 1231, 1238-39 (11th Cir.2005); Gagnon v. Sprint Corp., 284 F.3d 839, 853-54 (8th Cir.2002); Leisek, 278 F.3d at 899; Hill v. Michelin N. Am., Inc., 252 F.3d 307, 312 (4th Cir.2001); Sheehan v. Dep't of Navy, 240 F.3d 1009, 1014 (Fed. Cir.2001); Gummo v. Vill. of Depew, N.Y., 75 F.3d 98, 106 (2d Cir.1996).

We agree. The language of the statute and the legislative history make clear that the employee need only show that military service was "a motivating factor" in order to prove liability, unless "the employer can prove that the [adverse employment] action would have been...