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Matthews v. Potter, No. 0801980 (7th Cir. Mar. 23, 2009); Demers v. Adams Homes of Northwest Fla., Inc., No 08-13044 (11th Cir. Mar. 20 , 2009); Kellerman v. UPMC St. Margaret, No. 08-1682 (3d Cir. Mar. 19, 2009)


I am elated that, after a forced hiatus of nearly a week (owing to some weird editor glitch), we are finally back in business. So now we have a log-jam of recent cases to report: three decisions, three circuits, all substantially favoring employees, and all unaccountably "non-precedential."

Matthews v. Potter, No. 0801980 (7th Cir. Mar. 23, 2009): The Seventh Circuit weighs in with its view of whether a Title VII claimant who fails to disclose pending administrative complaints in a bankruptcy petition waives them by operation of judicial estoppel.

Here, the employee/debtor failed to cite the pending complaints in a Chapter 13 petition, but argued that this was later cured by her reopening the petition and amending the schedule to include the discrimination claims in a subsequent Chapter 7 proceeding. The district court believed that the amendment came too late, but the panel reverses, holding that the record clearly showed that the debtor, though she delayed in her formal submission, never concealed her complaints:

"Matthews, in whose favor we must draw all reasonable inferences, see Germano v. Int'l Profit Ass'n, 544 F.3d 798, 800 (7th Cir. 2008), states in her affidavit that she informed the trustee about her pending administrative complaints at the meeting of creditors for her Chapter 7 bankruptcy. In the district court, the Postal Service never acknowledged this assertion and instead argued only that Matthews could not avoid judicial estoppel by reopening the bankruptcy case. But this position, which ignores Eubanks, assumes that Matthews's bankruptcy disclosures are measured solely by the information provided in her initial schedules filed with the Chapter 7 petition. The Bankruptcy Code contemplates the possibility that a debtor may later discover and inform the trustee of addition al assets not already listed on the schedules, given the trustee's obligations to investigate the debtor's financial affairs, see 11 U.S.C. § 704(a)(4), and to examine the debtor at the meeting of creditors, see id. § 341; see also FED. R. BANKR. P. 1009 (providing that debtor may freely amend a "voluntary petition, list, schedule, or statement . . . as a matter of course at any time before the case is closed"); In re Ladd, 450 F.3d 751, 755 (8th Cir. 2006) (noting that "the general rule allows liberal amendment"); In re Michael, 163 F.3d 526, 529 (9th Cir. 1998) (same). The trustee commonly questions the debtor to search for assets, explore potential claims, and to determine whether the case should be closed as a no�]asset case or whether further investigation is needed. See 11 U.S.C. § 341; 2 COLLIER BANKRUPTCY PRACTICE GUIDE ¶ 26.03[2] (Alan N. Resnick & Henry J. Sommer eds., 2006). That is precisely what happened here, at least as far as the record shows, and the inference we draw is that following Matthews's oral disclosure the trustee determined that her discrimination claims were not sufficiently valuable to warrant pursuing them on behalf of the creditors."

The panel goes on to hold that "[i]f on remand the district court decides to entertain further argument regarding the doctrine of judicial estoppel, the court must make a factual determination, by evidentiary hearing if necessary, regarding the nature and extent of the disclosures Matthews made to the Chapter 7 trustee at the meeting of creditors." And, in any event, the plaintiff can still proceed because she would not be precluded from seeking injunctive relief, which is not part of the bankruptcy estate.

Kellerman v. UPMC St. Margaret, No. 08-1682 (3d Cir. Mar. 19, 2009): The panel reverses summary judgment in a Title VII harassment and retaliation case. On the former claim, involving alleged female-on-male harassment, the panel finds material issue of fact in dispute about imputing liability to the employer:

"Whether SMH took prompt remedial action upon learning of the harassment cannot be determined on summary judgement because there is a material dispute about when SMH knew of Hemphill's alleged harassment. Kellerman claims that in November, 2003, he complained about Hemphill's conduct to Reed and shortly thereafter to Naples and Fantini. According to Kellerman, those complaints put SMH on notice that he was being sexually harassed because he said Hemphill was 'infatuated' and 'bothering him.' . . . .

"There is obviously a factual dispute about when Kellerman first notified SMH of the alleged harassment as well as whether the notice given was adequate to place SMH on notice that Hemphill's conduct toward Kellerman was gender based. Following the November meeting, SMH issued a verbal warning to Hemphill, but the adequacy of that warning is yet another factual dispute that cannot be resolved at the summary judgment stage. Moreover, in May, 2004, when Kellerman produced overtly sexual letters, SMH suspended Hemphill for five days and then transferred her to a different shift. Although she never worked with Kellerman again, we believe the adequacy of that response is also an issue of fact material to SMH's liability under Title VII."

As for the retaliation claim, the employee was terminated a month after the complaint about harassment and the panel holds that there was other contested evidence of pretext (regarding alleged resume fraud):

"At the deposition, he testified that he told SMH of his prior employment history at Divine Providence when he was first interviewed for the job in March,2 002, but that his failure to include that prior employment on his job application did not become an issue until after he filed his EEOC complaint. We agree that the timing of his termination combined with evidence of a pretextual explanation for his termination is sufficient to establish a prima facie case of retaliatory dismissal . . . . It is not for a court to decide the significance, if any, of the timing of Kellerman's termination or when SMH learned of his prior employment. Such disputes must be resolved by a factfinder, and the district court therefore erred in granting summary judgment on the retaliation claim."

Demers v. Adams Homes of Northwest Fla., Inc., No 08-13044 (11th Cir. Mar. 20 , 2009): In this case, the employee lost summary judgment on an FMLA claim, but won her Title VII retaliation case at trial. As to the former, the district court (and the Eleventh Circuit, in turn) did not grant relief because the employee failed to prove an actual injury. "Adams Homes violated the FMLA by denying her leave, but Demers cannot articulate any harm suffered from this denial." Because the district court otherwise had discretion to deny equitable relief, the absence of any entitlement to recovery warranted entry of a defense judgment. (The panel also affirmed a verdict against plaintiff on an FMLA retaliation claim.)

As for the Title VII claim, the panel upholds a verdict for $90,000 and reinstates a $5,000 punitive damage award. "Demers alleged that (supervisor) Malone made discriminatory comments about pregnant women . . . A reasonable trier of fact could find that Adams Homes acted with malice or reckless indifference, and thereby justify punitive damages. Vacating the punitive award was error." The panel also affirms entry of partial summary judgment in favor of plaintiff on the issue of whether she was an "employee" for purposes Title VII coverage:

"Viewed in the light most favorable to Adams Homes, the facts demonstrate that Adams Homes exerted significant control over Demers. Adams Homes claims it did not require professional dress, but merely asked for professional dress, allowing salespeople to wear what they pleased, 'subject' to guidelines. The other purported distinctions are similarly unavailing. Adams Homes argues it permitted salespeople to set their own schedule, 'as long as they follow [Adams Homes'] parameters.' Yet the parameters were stringent: Demers had to staff the office 'a minimum of 5 days per week, including Saturday and Sunday.' She was limited to two weeks vacation per year. She had to provide 'ample notice' before taking vacation. She could not take her two weeks consecutively. She could not take vacation more than one weekend a month."

The court also affirms denial of judgment as a matter of law on the plaintiff's Title VII retaliation claim (for her opposition to the employer's refusal to give her maternity leave), upheld the judge's evidentiary rulings (including admissibility of three other women who were also denied pregnancy leave), and affirmed a reduced attorney fee.

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