Wheeler v. Bl Development Corp.

• Decision Date: 29 June 2005
• Docket Number: No. 04-60155.,04-60155.
• Citation: 415 F.3d 399
• Parties: Bayless ("Bo") Odell WHEELER and Daniel L. Moore, Plaintiffs-Appellants, v. BL DEVELOPMENT CORPORATION, d/b/a Grand Casino, Tunica, Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

415 F.3d 399

Bayless ("Bo") Odell WHEELER and Daniel L. Moore, Plaintiffs-Appellants, v. BL DEVELOPMENT CORPORATION, d/b/a Grand Casino, Tunica, Defendant-Appellee.

No. 04-60155.

United States Court of Appeals, Fifth Circuit.

June 29, 2005.

Jim D. Waide, III (argued), Ronnie Lee Woodruff, Waide & Associates, Tupelo, MS, for Plaintiffs-Appellants.

Walter Alan Davis (argued), Dunbar & Associates, Oxford, MS, for Defendant-Appellee.

Appeal from the United States District Court for the Northern District of Mississippi.

Before DAVIS, SMITH and DeMOSS, Circuit Judges.

DeMOSS, Circuit Judge:

Appellants Bayless "Bo" Wheeler and Daniel L. Moore (collectively, "Appellants") filed suit against BL Development Corporation, d/b/a Grand Casino Tunica ("Grand Casino"), asserting that they were wrongfully terminated from their employment for having reported potentially illegal activity on the part of Grand Casino or, alternatively, on account of their race in contravention of 42 U.S.C. § 1981. Grand Casino moved for summary judgment, which was granted by the district court. Appellants timely filed the instant appeal.

BACKGROUND AND PROCEDURAL HISTORY

Moore first began his employment with Grand Casino in June 2000, when he was hired as Director of Transportation. Wheeler was hired soon thereafter as a transportation manager in August 2000. In late September 2001, Jimmy Buckhalter of Grand Casino's regulatory affairs department received information from an employee in the transportation department that a "tire changing" machine, i.e., a machine used to replace tires on metal wheel rims, had been "loaned" to Country Ford, a Ford dealership in Southaven, Mississippi, located approximately 20 miles northwest of Grand Casino. Buckhalter thereafter notified Karen Sock, Grand Casino's General Manager, of the information and requested that he be permitted to conduct an investigation into the matter. Buckhalter received authorization to proceed and his investigation began shortly thereafter in October 2001.

Buckhalter soon learned that Moore's son, Terry Moore, worked at Country Ford as a warranty agent and second in charge of the auto shop. Buckhalter inquired of Wheeler, as a transportation manager, how the tire changing machine made its way into the hands of Country Ford. Wheeler allegedly provided differing accounts of how the equipment was loaned to Country Ford.¹ Buckhalter subsequently obtained the assistance of Daniel Moore, the Director of Transportation, to reconcile Wheeler's varying accounts and to contact his son Terry at Country Ford to uncover whether Terry had any additional information regarding the unauthorized loan. After several meetings between Buckhalter's investigative team and Appellants, it was determined that both Moore and Wheeler were to be suspended. Seven days later, Sock decided to terminate each of Moore's and Wheeler's employment with Grand Casino for "violation of company policy."

Meanwhile, at about the same time in October 2001, Grand Casino announced a new Executive Dry Cleaning Plan (the "Plan"), which offered Grand Casino executives up to $120 per month of free dry cleaning services.² Believing the arrangement between the dry cleaner and Grand Casino to be an illegal kickback, Appellants allegedly reported the Plan to Buckhalter prior to his investigation into the loaning of the tire changing machine. Appellants readily admit that after initially being suspended by Grand Casino, but before they were terminated, they also sent a memo to the Mississippi Gaming Commission detailing how they perceived the Plan to constitute illegal activity. The Gaming Commission conducted an investigation and ultimately concluded that the Plan was not criminally illegal.

Upon being terminated, Appellants filed suit against Grand Casino, alleging that their termination was the result of their reporting to Buckhalter their belief that the Plan was illegal, and therefore was in violation of a public policy-based exception to Mississippi's employment at will doctrine. Alternatively, Appellants maintained that their termination by black casino executives occurred because Appellants are white, in violation of 42 U.S.C. § 1981. Grand Casino moved for summary judgment, arguing that there existed no genuine issue of fact under which Appellants could recover for either claim.

The district court granted Grand Casino's motion, concluding that the relevant exception to the employment at will doctrine provides Appellants protection from subsequent termination only if the activity reported was "criminal," not merely illegal. Having found that the reported activity was neither criminal nor illegal, the district court concluded that Appellants were precluded from recovering under that claim. In addition, the district court found that Appellants had not come forward with evidence establishing a prima facie case of racial discrimination, most notably proof that Grand Casino replaced Appellants with employees outside Appellants' protected class. Appellants timely filed the instant appeal.

STANDARD OF REVIEW

This Court reviews grants of summary judgment de novo, applying the same standard as the district court. Tango Transp. v. Healthcare Fin. Servs. LLC, 322 F.3d 888, 890 (5th Cir.2003). Summary judgment is appropriate if no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). The Court views the evidence in the light most favorable to the non-movant. Coleman v. Houston Indep. Sch. Dist., 113 F.3d 528, 533 (5th Cir.1997). The non-movant must go beyond the pleadings and come forward with specific facts indicating a genuine issue for trial to avoid summary judgment. Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). A genuine issue of material fact exists when the evidence is such that a reasonable jury could return a verdict for the non-movant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Summary judgment is appropriate, however, if the non-movant "fails to make a showing sufficient to establish the existence of an element essential to that party's case." Celotex, 477 U.S. at 322, 106 S.Ct. 2548.

DISCUSSION

On appeal, Appellants maintain the district court erred on two grounds when it granted summary judgment in favor of Grand Casino. First, Appellants argue the district court misapplied Mississippi law in denying them relief for reporting what they believed to be illegal activity. Second, Appellants contend the district court erroneously concluded that they did not provide sufficient evidence establishing a prima facie case of racial discrimination.

In response, Grand Casino argues the district court correctly determined that the activity reported by Appellants did not actually constitute a crime and therefore summary judgment was appropriate under Mississippi law. Moreover, Grand Casino maintains the only competent evidence of racial discrimination offered by Appellants is irrelevant because the black employee allegedly subjected to disparate treatment was not a "similarly situated" employee under "nearly identical" circumstances.

I. Whether the exception to Mississippi's employment at will doctrine requires the conduct reported to actually be criminal in nature.

Mississippi has adhered to the employment at will doctrine since 1858. Perry v. Sears, Roebuck & Co., 508 So.2d 1086, 1088 (Miss.1987). Under this common law rule, the employment contract between employer and employee may be terminated by either party with or without justification. HeartSouth, PLLC v. Boyd, 865 So.2d 1095, 1108 (Miss.2003) (citation omitted). In McArn v. Allied Bruce-Terminix Co., Inc., 626 So.2d 603 (Miss.1993), the Mississippi Supreme Court carved out a public policy exception to this general rule. In McArn, the employee worked for a pest control service company. Id. at 604. McArn was ultimately terminated and claimed that he was wrongfully discharged because he had reported to customers and a state agency that the work being performed by his former employer was inadequate or, in some cases, non-existent. Id. at 605-06. In seeking to have the Mississippi Supreme Court create a narrow public policy exception to the common law rule, McArn asserted that he was simply reporting conduct that was criminal under Mississippi law. Id. at 606 (citing MISS.CODE ANN. §§ 97-19-39 and 69-23-19 (1972) (denoting as a felony the receipt of money under false pretense and as a misdemeanor the violation of state pest control regulations)). The Mississippi Supreme Court agreed with McArn, concluding that "an employee who is discharged for reporting illegal acts of his employer to the employer or anyone else is not barred by the employment at will doctrine from bringing action in tort for damages against his employer." Id. at 607 (determining that the exception applies even where there is a "`privately made law' governing the employment relationship").

Appellants maintain that although the activity they reported involving the Plan was ultimately neither illegal nor criminal, McArn simply requires that they reasonably believed the activity to be criminally illegal. Appellants rely on the Mississippi Supreme Court's decision in Willard v. Paracelsus Health Care Corp., 681 So.2d 539 (Miss.1996) ("Willard I"), in support of their position. In Willard I, two hospital workers were terminated after reporting to their superiors that the hospital administrator was receiving checks personally made out to her in alleged violation of hospital policy. Id. at 540. After a jury trial, judgment was entered upon jury verdicts in favor of the former hospital employees. Id. The employees appealed, however, arguing that they were entitled to a jury instruction on retaliatory discharge and, if found by the jury, consideration of an award for punitive damages. Id. at 540-41. The Mississippi Supreme Court ruled the trial court...