Yashenko v. Harrah's Nc Casino Co., LLC, 05-1256.

• Citation: 446 F.3d 541
• Decision Date: 27 April 2006
• Docket Number: No. 05-1256.,05-1256.
• Parties: Edward YASHENKO, Plaintiff-Appellant, v. HARRAH'S NC CASINO COMPANY, LLC, Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (4th Circuit)

446 F.3d 541

Edward YASHENKO, Plaintiff-Appellant, v. HARRAH'S NC CASINO COMPANY, LLC, Defendant-Appellee.

No. 05-1256.

United States Court of Appeals, Fourth Circuit.

Argued: March 15, 2006.

Decided: April 27, 2006.

COPYRIGHT MATERIAL OMITTED

ARGUED: Michael Geoffrey Wimer, Wimer & Jobe, Arden, North Carolina, for Appellant. Jeffrey Andrew Lehrer, Ford & Harrison, L.L.P., Spartanburg, South Carolina, for Appellee. ON BRIEF: Karen

M. Tyner, Ford & Harrison, L.L.P., Spartanburg, South Carolina, for Appellee.

Before MOTZ and TRAXLER, Circuit Judges, and JAMES P. JONES, Chief United States District Judge for the Western District of Virginia, sitting by designation.

Affirmed by published opinion. Judge MOTZ wrote the opinion, in which Judge TRAXLER and Judge JONES joined.

OPINION

DIANA GRIBBON MOTZ, Circuit Judge:

This case presents two questions of first impression for this circuit. First, does the Family and Medical Leave Act ("FMLA"), 29 U.S.C.A. § 2601 et seq. (West 1999 & Supp.2005), provide a covered employee with an absolute right to be restored to his previous job after taking approved leave? And second, is a private employer that contracts with an Indian tribe subject to suit for race discrimination under 42 U.S.C.A. § 1981 (West 2003) when it enforces a contractual tribal preference policy? For the reasons that follow, we believe we must answer both questions in the negative and so affirm the judgment of the district court.

I.

In June 1996, the Eastern Band of Cherokee Indians ("Tribe") entered into a Management Agreement with Harrah's North Carolina Casino Company ("Harrah's") concerning the operations of the Tribe's gaming enterprise. Under the terms of the Agreement, the Tribe granted Harrah's "the exclusive right and obligation to develop, manage, operate and maintain the Enterprise and any expansion thereof." The Tribe delegated its own "obligations and rights under this Agreement" to the Tribal Casino Gaming Enterprise ("TCGE"), an "instrumentality of the Tribe" with authority to conduct the business of the casino on behalf of the Tribe. The Agreement thus functioned as an employment contract under which Harrah's worked as the manager for the Tribe's delegate, the TCGE. Through this arrangement, Harrah's provided its "experience and expertise" in managing the gaming operation and training the tribal members.

As part of this Management Agreement, Harrah's received "the exclusive responsibility and authority to direct the selection, hiring, training, control and discharge of all employees performing regular services for the Enterprise in connection with the maintenance, operation, and management of the Enterprise and the Facility and any activity upon the Property." The Agreement provided that Harrah's would "give preference in recruiting, training and employment to qualified members of the Tribe and their spouses and adult children in all job categories of the Enterprise." Accordingly, Harrah's assented to the following order of preference: "(a) Enrolled Tribal members; (b) Spouse, parent or children of Tribal members; (c) Other Native Americans; (d) Others from the Cherokee community; (e) Others from the region; and (f) Others from the state of North Carolina."

All employees hired by Harrah's to staff the casino pursuant to this Agreement were considered employees of the TCGE, although Harrah's maintained supervisory authority over them. Harrah's and TCGE classified many of these employees as "leased" employees; leased employees worked at the casino, Harrah's paid their salaries and benefits, and TCGE reimbursed Harrah's for these expenses. In the years after the Agreement went into effect, there was a gradual shift in positions from Harrah's to the TCGE. By 2003, all employees that Harrah's hired were TCGE, rather than Harrah's, employees.

In 1994, Harrah's hired Edward Yashenko to work for the parent company in Louisiana; in 1997, he transferred to the North Carolina casino, where he became a "leased" employee. In 1999, Yashenko received a promotion to the position of Manager — Employee Relations, a job he held until his discharge in July 2003. During his tenure at the North Carolina casino, Yashenko requested and was granted several medical leaves of absence, all of which were approved and most of which were taken under the FMLA. Specifically, Yashenko received approximately ten weeks leave from December 19, 2000, until February 26, 2001; approximately fifteen weeks leave from May 1 until August 23, 2001; six weeks leave from March 13 until April 23, 2002; and fourteen weeks leave from May 1 until August 12, 2002. After each leave of absence, Yashenko returned to the same job, with no reduction in pay or benefits.

In early May 2003, Yashenko requested another medical leave of absence for a serious health problem related to heart surgery. Harrah's approved the leave as FMLA leave, and Yashenko remained on leave for eleven more weeks, until July 21, 2003. While Yashenko was out, Harrah's informed him that the company was reorganizing in a way that eliminated his position (a Harrah's position), as well as the position of Employment Manager (a TCGE position). In their stead, Harrah's created two new TCGE positions that consolidated the responsibilities of the eliminated jobs. The company's goal was to form "a synergy . . . by having . . . one manager responsible for the life of the employee from hiring to termination." Tom Fagg, the Human Resources director at Harrah's, invited Yashenko to apply for the new positions, as well as other available TCGE jobs. (There were no available jobs at Harrah's because the Agreement "prevented [Harrah's] from hiring new employees to work for Harrah's.") Despite the invitation and the many descriptions of job openings Fagg sent him, Yashenko decided not to apply for any position because, he explained, he was taking medication, and did not feel up to it, and because his doctors assertedly recommended that he not do so. Upon his return from FMLA leave on July 21, 2003, Harrah's discharged him.

Yashenko then filed suit in state court against Harrah's alleging violations of his rights under the FMLA because Harrah's did not restore him to his job at the end of his leave. Harrah's removed the case to federal court. After both parties moved for summary judgment, the district court granted Yashenko permission to file an amended complaint in which he added claims of race discrimination under § 1981 and of wrongful discharge in violation of North Carolina public policy. The parties then filed cross motions for summary judgment on these additional claims. On January 20, 2005, the district court granted summary judgment to Harrah's on both the FMLA and § 1981 claims, and dismissed the wrongful discharge claim without prejudice. Yashenko noted a timely appeal.

II.

In recognition of the growth of "single-parent households and two-parent households in which the single parent or both parents work," the importance of parental participation "in early childrearing" and "care of family members who have serious health conditions," the inadequacy of "employment policies to accommodate working parents," and the lack of "job security for employees who have serious health conditions," 29 U.S.C.A. § 2601(a), Congress enacted the Family and Medical Leave Act in 1993. In this legislation, Congress sought "to balance the demands of the workplace with the needs of families, to promote the stability and economic security of families,. . . to promote national interests in preserving family integrity," and "to entitle employees to take reasonable leave for medical reasons, for the birth or adoption of a child, and for the care of a child, spouse, or parent who has a serious health condition." Id. § 2601(b)(1)-(2). The legislature sought to "accomplish" these purposes "in a manner that accommodates the legitimate interests of employers." Id. § 2601(b)(3).

The FMLA provides covered employees with two types of rights and protections. First, covered employees who take a leave of absence for family or medical reasons qualify for numerous substantive entitlements. Specifically, these employees are "entitled to a total of 12 workweeks of leave during any 12-month period" for family- and health-related matters, id. § 2612(a)(1), and have a right "to be restored by the employer to the position of employment held by the employee when the leave commenced" or to "an equivalent position with equivalent employment benefits, pay, and other terms and conditions of employment." Id. § 2614(a)(1)(A)-(B). Leave taken under the FMLA "shall not result in the loss of any employment benefit accrued prior to the date on which the leave commenced." Id. § 2614(a)(2). However, a restored employee is not entitled to "any right, benefit, or position of employment other than any right, benefit, or position to which the employee would have been entitled had the employee not taken the leave." Id. § 2614(a)(3)(B).

These substantive rights, and their accompanying protections, see id. § 2615(a)(1), are prescriptive, "set[ting] substantive floors for conduct by employers, and creating entitlements for employees." Hodgens v. Gen. Dynamics Corp., 144 F.3d 151, 159 (1st Cir.1998) (quoting Diaz v. Fort Wayne Foundry Corp., 131 F.3d 711, 712-13 (7th Cir.1997))(internal quotation marks omitted) (amendment in original). See also Rice v. Sunrise Express, Inc., 209 F.3d 1008, 1016 (7th Cir. 2000) (explaining that "in §§ 2612-2615, the Act contains prescriptive protections for employees that are expressed as substantive statutory rights"). Claims of alleged violations of these prescriptive rights — known as "interference" or "entitlement" claims — arise under 29 U.S.C.A. § 2615(a)(1), which states that "[i]t shall be unlawful for any employer to interfere with, restrain, or deny the exercise of or the attempt to exercise, any right provided under this subchapter."

In addition to these prescriptive rights and...