If your employer says you’re fired, they can’t take it back later.

Dulaney v. Packing Corp. of America and Bobby Mills, No. 10-2316, ___ F.3d ___, 2012 U.S. App. LEXIS 5104 (4th Cir. March 12, 2012). Before we launch into the recitation of the facts in this case, an important disclaimer is in order. This decision arises out of a motion for summary judgment. When a court is ruling on a motion for summary judgment, it must view the facts in the light most favorable to the party who did not make the motion. Accordingly, the United States Court of Appeals for the Fourth Circuit viewed the facts of the case in the light most favorable to the plaintiff, Carla Dulaney, and the resulting judicial opinion accepts Dulaney’s version of the facts as true. What we have restated here is the Fourth Circuit’s recitation of the facts. The case has been remanded for a new trial and the facts that are determined at trial may turn out to be different from the facts that the Court considered on appeal.

The Fourth Circuit presented the material facts of the case as follows. Carla Dulaney began working at Packing Corporation of America (PCA) as a temporary hourly employee in November of 2006. She worked second shift on the production line. Bobby Mills was designated as the “lead production worker” for the second half of her shift, when no managers or supervisors remained.

In November of 2006 Mills extended an offer of permanent employment to Dulaney. By December Mills had approached Dulaney about “taking care of him” by performing sexual acts. When Dulaney refused, Mills followed through on his threats to make her life “hell”: he spread rumors about her, screamed at her, and interfered with her work. Dulaney eventually acceded to his demands.

The sexual encounters between Mills and Dulaney typically occurred in the men’s bathroom or the office, to which Mills alone had a key. Mills frequently interrupted Dulaney’s work to demand sexual favors, and he signaled his demand either by calling her away from her work station or rubbing himself against her. When Dulaney refused, Mills would scream at her and sometimes sent her home without pay. Mills also made sexually explicit comments about Dulaney to her co-workers. He spread rumors that she had a sexually transmitted disease. Mills’s treatment of Dulaney also led her co-workers to treat her poorly.

When Dulaney complained about Mills’s treatment to his supervisor, Mike Bourne, Bourne told Delaney that she was “replaceable.” She complained again, but nothing happened. She complained when another employee called her a “n****r lover” and spread a rumor about her sexual activities. When Dulaney told Bourne that she planned to complain to Bourne’s supervisor, Donnie Woodward, Bourne told her that doing so would result in her termination.

On Wednesday, September 26, 2007, Mills screamed at Dulaney in front of her co-workers, calling her a “whore” and “replaceable” and demanding to know whether she was “f***ing these n****rs here.” A male African American employee then complained to Donnie Woodward about Mills’s treatment of Dulaney. Specifically, he stated that it was difficult for him to complete his job duties because Dulaney was frequently away from her desk performing sexual acts with Mills, and when she was at her desk she was often crying. Dulaney also went to Woodward’s office to report the behavior.

Woodward called Dulaney into his office on Friday, September 28 to discuss Mills. Ultimately Woodward and PCA’s Human Resources Representative, Greg Bright, arranged for Dulaney to submit a written complaint. Mills’s harassment of Dulaney did not end, though—he remotely harassed her by having another employee pass her two messages which called her a “whore” and accused her of being promiscuous. When Dulaney complained about this to Bourne, he laughed at her and said “there goes Carla again.”

On November 2, 2007, Dulaney approached Bright and stated that she wanted to find a new job because her co-workers were ostracizing her. Bright proposed a severance agreement. When Dulaney came into the office to review the severance agreement on November 5, Bright told her that she was required to sign the severance agreement that day or be fired. The agreement itself stated that she would have 21 days to review it. When Dulaney refused to sign it, Bourne escorted her out, told her to take her belongings from her locker, took her key, and asked when she would be able to return her uniform. She did so on November 7.

Bright later wrote a letter to Dulaney telling her that she was not fired and was welcome to return to work. Nonetheless, in Dulaney’s unemployment hearing, PCA stated that she had been terminated.

On February 27, 2009, Dulaney sued PCA and Mills for gender discrimination and sexual harassment, along with state law causes of action. PCA filed a motion for summary judgment, which the district court granted.

In granting PCA’s motion for summary judgment, the court was required to construe the evidence in the light most favorable to Dulaney. In addition, the court should have granted the motion only if there were no material fact in dispute with regard to the issue presented for summary judgment.

The district court relied on what is known as the Faragher defense in deciding in PCA’s favor. The Faragher defense insulates an employer from liability if the employer took no tangible employment action against the victim of sexual harassment and the employer can prove certain key facts. In Dulaney’s case, the district court found both that PCA took no tangible employment action against Dulaney, giving weight to the severance agreement and Bright’s letter saying that Dulaney was not terminated, and that PCA presented the facts necessary to effectively present a Faragher defense. In doing so, it signaled its belief that no reasonable jury would find that Dulaney had been terminated.

The Fourth Circuit rejected the district court’s ruling that PCA had not taken any tangible employment action against Dulaney, instead finding that there were genuine issues of facts as to that very issue. Accordingly, it did not reach the issue of whether the district court appropriately applied the Faragher defense, because a defendant cannot assert the Faragher defense if it undertook a tangible employment action against a plaintiff.

In making this decision, the Court reviewed what constitutes a “tangible employment action.” The Supreme Court has defined this term to mean a significant change in employment status, such as hiring, firing, failure to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits. The Court, construing the evidence in the light most favorable to Dulaney, decided that whether she had been fired was a material fact at issue and thus, summary judgment should have been denied and this issue should have gone to the jury.

 The opinion of the United States Court of Appeals for the Fourth Circuit opinion is available here. The opinion of the District Court for the Western District of Virginia—the basis for the appeal—is available here.

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