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Phillips v. Leggett & Platt, Inc., No. 10-60585 (5th Cir. Sept. 22, 2011)

An age discrimination plaintiff wins a $48,000 judgment at trial, only to lose it - in a 2-1 vote - before a panel of the Fifth Circuit, which holds that judgment should have been entered for the employer on limitations grounds. As Judge Higginbotham's dissent points out, the issue of who decides such issues is paramount.

Phillips v. Leggett & Platt, Inc., No. 10-60585 (5th Cir. Sept. 22, 2011): In the category of outrages, this looks like no more than a ripple, but surface appearances are deceiving.

Phillips, age 66, was a 24-year veteran of Leggett & Platt when it announced that it was shutting down the plant where she worked in Verona, Mississippi. "Later that month, Leggett informed Phillips that There were no positions available for her at the Houlka facility. She would be laid off once the Verona facility closed with her last day of employment being July 30, 2007. There was evidence that Phillips was the only Verona employee willing to work in the Houlka facility who was unable to do so."

The panel majority describes what happened next:

"Four business days after the end of her employment, Leggett recalled Phillips to work in Houlka. She was told she was needed to assist with the consolidation. Phillips was informed this new job was temporary but without a stated end-date. Phillips' job at the Houlka facility included work similar to what she had done in Verona. Although Phillips knew the work was  temporary, she hoped that if she performed well, permanent employment would result. After approximately five months, though, she was informed of her termination. Her employment was officially terminated on January 2, 2008."

She was eventually replaced by a 35-year-old employee.

On March 5, 2008, 63 days after her last day of work but some nine months after she was informed of her original termination, Phillips filed a charge with the EEOC alleging age discrimination in the original termination.

Because Mississippi is not a deferral jurisdiction, the limitations period for such a charge was 180 days. Phillips argued, and the district court held, that the 180 days was either measured from her final day of work at Houlka, or was equitably tolled (or more accurately, estopped) because Leggett's actions "induced" Phillips not to file a charge until after the limitations period had expired.

At trial, the jury awarded $53,370 in back pay, later reduced by the district court to $48,000.

The Fifth Circuit reverses and orders entry of a judgment for the defendant. The panel majority commences with the commonplace observation that under Delaware State College v. Ricks, 449 U.S. 250, 258 (1980), a termination claim accrues at the time an employee learns they are going to be terminated. It then observes that "The precise issue in this action - whether temporary, indefinite employment tolls the limitations period - appears to be one of first impression in the Fifth Circuit."

The panel finds, as a matter of law, that the temporary employment did not prevent the running of limitations - the claim still accrued when Phillips learned that her permanent employment would end:

"Phillips' rehiring for a temporary position on August 6 may have created a glimmer of hope of permanent reemployment if she performed well, yet may have cast a shadow of doubt about her chances of being rehired if she filed an EEOC claim. The difficult choice that may have faced her would not have altered the finality of the clear and adverse action of her termination from permanent employment."

The panel rejects the alternative of equitable tolling - the concept that, even with due diligence, the employee lacked sufficient information to learn about her claim until after it accrued - because Phillips possessed all of the information she needed to file a charge in June of 2007. "The finality of Leggett's decision was never in doubt. Phillips' recall was temporary and not for permanent employment. The nature and status of Phillips' temporary employment may have created an awkward situation for filing an EEOC claim, but it was not ambiguous."

The dissent by Judge Higginbotham does not challenge the underlying law, but stakes its opposition to reversal on the ground that the district court's finding of equitable tolling is reviewed only for abuse of discretion. He notes that the panel's interpretation of the record may be valid, but not the only permissible conclusion:

"The majority is persuaded that Ms. Phillips's recall 'was 'not inconsistent' with the June 2007 notification of her termination of employment.' Perhaps this a permissible factual conclusion. But it is not the only finding a trier of fact might make. It overlooks documentary evidence introduced at trial supporting the district court's contrary conclusion. Leggett offered, as Exhibit D-5, a copy of Ms. Phillips's June 2007 employment separation form, a written form that Leggett placed in Ms. Phillips's file stating that There was 'no possibility of recall.' Leggett then recalled her less than a week later - a direct contradiction. The bite of such inconsistencies - and the cold fact that the indefinite period of the recall lasted just over 180 days - is best entrusted to the better-informed discretion of the district judge."

So the homely issue of the appellate standard of review turns out to be very important here. I am hopeful for a rehearing on this one, though. The dissent may not have reached the There panelists, may resonate with their fellow circuit jurists.

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