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Weil v. Citizens Telecom Services Co., LLC

United States Court of Appeals, Ninth Circuit

April 29, 2019

David Weil, Plaintiff-Appellant,
v.
Citizens Telecom Services Company, LLC; Frontier Communications Corporation, Defendants-Appellees.

          Argued and Submitted June 5, 2018 Seattle, Washington

          Appeal from the United States District Court for the Western District of Washington James L. Robart, District Judge, Presiding D.C. No. 2:15-cv-00835-JLR

          Terry A. Venneberg (argued), Gig Harbor, Washington; Kenneth R. Friedman, Friedman Rubin, Bremerton, Washington; for Plaintiff-Appellant.

          Lindbergh Porter Jr. (argued), Littler Mendelson P.C., San Francisco, California; James G. Zissler and Breanne Sheetz Martell, Littler Mendelson P.C., Seattle, Washington; for Defendants-Appellees.

          Before: Jay S. Bybee and N. Randy Smith, Circuit Judges, and John Antoon II, [*] District Judge.

         SUMMARY[**]

         Employment Discrimination / Hearsay

         The panel affirmed in part and reversed in part the district court's summary judgment in favor of defendant employers in an employment discrimination action under Title VII, 42 U.S.C. § 1981, and the Washington Law Against Discrimination.

         Reversing the district court's summary judgment on a failure-to-promote claim, the panel held that the district court erred in excluding on hearsay grounds a statement proffered by the plaintiff. The panel held that, under Federal Rule of Evidence 801(d)(2)(D), hearsay does not include statements offered against a party, made by that party's employee on a matter within the scope of that employee's employment, so long as the statement was made while the employee was still employed by that employer. There is no requirement that the declarant still be in the same position that resulted in the matter being within the scope of the employment relationship. The panel held that, properly considering the statement as admissible evidence of pretext, the plaintiff met his burden on summary judgment.

         Affirming the district court's summary judgment on plaintiff's termination claim, the panel held that plaintiff failed to raise a genuine dispute of material fact as to that claim because he did not present evidence that he was performing satisfactorily or that defendants treated a similarly situated employee who was not a member of plaintiff's protected class differently.

         Dissenting in part, Judge Bybee wrote that the district court properly excluded the proffered statement because it was not within the scope of the declarant's employment when she made it after having been relieved of her hiring and promoting duties. Judge Bybee concurred in the majority opinion insofar as it affirmed summary judgment on the termination claim.

          OPINION

          N.R.SMITH, CIRCUIT JUDGE

         Hearsay does not include statements offered against a party, made by that party's employee on a matter within the scope of the employee's employment, so long as the statement was made while the employee was still employed by that party. Fed.R.Evid. 801(d)(2)(D). Because the district court excluded such a statement proffered by Plaintiff David Weil on hearsay grounds, it erred in granting summary judgment to Weil's employers, Citizens Telecom Services and Frontier Communications (collectively, Frontier), regarding Weil's failure-to-promote claim. However, the district court properly granted summary judgment to Frontier on Weil's termination claim, because Weil failed to produce evidence that raised a genuine dispute of material fact as to that claim. We have jurisdiction under 28 U.S.C. § 1291, and we affirm in part and reverse in part.

         I.

         David Weil's employment by Frontier (and its corporate predecessors) began in 1999. In 2011, Weil was promoted to Call Center Manager of a Frontier call center. In his 2011 performance review, Weil was praised for his leadership skills and received high overall scores.

         In September 2012, Weil became the interim acting director of the call center, reporting directly to L.H., the Senior Vice President of Call Centers.[1] As Weil's supervisor, L.H. conducted Weil's 2012 performance review, which showed declines in several categories. Although L.H. provided positive feedback about Weil's leadership and initiative, Weil's overall performance rating, as well as his own self-rating, decreased from his 2011 ratings.

         After naming Weil the interim acting director, Frontier began the process of hiring a permanent director. L.H. was the person responsible for filling the permanent director position. Frontier received roughly 150 applications, including one from Weil. Weil was among the 7 to 10 applicants Frontier considered qualified for the position. L.H. interviewed Weil and two other candidates, thereafter ranking him second out of the three. In January 2013, L.H. emailed her supervisor recommending that Weil be allowed to present materials to the broader team for consideration for the position.

         On January 14, 2013, Frontier removed L.H. as Vice President and moved her into a specialized role. Her replacement, Becky Potts, took over responsibility for filling the director position and became Weil's direct supervisor. Potts reviewed materials from the hiring process prior to her appointment, including L.H.'s review of Weil and an email from L.H. giving him a strong review. However, Potts ultimately selected Jennifer Brown (a white woman) in March 2013, despite Weil's complaint alleging Brown was never interviewed for the position.[2] Brown had fifteen years of experience at Frontier, with five years of managerial experience. However, her 2012 performance rating was slightly lower than Weil's score for that year and, unlike Weil, she did not have a Bachelor's Degree (which was listed as a preferred qualification for the position).

         On April 1, 2013, Weil was notified he had not been selected for the promotion. Also in April, Potts prepared a Development Action Plan (DAP) for Weil, which identified areas for improvement, and Weil agreed to follow through on several "action items." Later that month, Weil spoke with L.H., who was then working for Frontier in her new capacity. In his deposition, Weil described what L.H. told him as follows:

She had made it a - that the statement saying that she felt I was qualified for the job. She tried to get me into the director role; had three things that were against me, and her exact verbiage - I remember this clearly - is 'You have three things going against you. You're a former Verizon employee, okay. You're not white. And you're not female.'

L.H. was later terminated in June 2013.

         Weil failed to meet the DAP deadlines and complete action items. In June 2013, he was put on a Performance Improvement Plan (PIP) for a 60-day period to end on August 26, 2013. The PIP outlined that Weil faced possible termination if his performance failed to improve.

         Weil's 2013 mid-year performance review showed further declines from his 2011 and 2012 reviews. He met with Brown twice in early August to discuss his performance issues. Following these meetings, Brown sought Frontier Vice President Donna Loffert's support to terminate Weil. Frontier terminated Weil on August 15, 2013, prior to the end of his PIP.

         Weil brought suit against Frontier under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., Section 1 of the Civil Rights Act of 1866, 42 U.S.C. § 1981, and the Washington Law Against Discrimination, Wash. Rev. Code § 49.60.010 et seq., for wrongful and discriminatory failure-to-promote and termination. After discovery, Frontier moved for summary judgment. In opposing summary judgment, Weil presented L.H.'s statement and argued that it precluded the grant of summary judgment, because it was direct evidence of employment discrimination or at least evidence of pretext. Frontier then filed a motion in limine requesting, in part, that the court exclude L.H.'s statement as inadmissible hearsay. Weil countered that the statement was not hearsay under Federal Rule of Evidence 801(d)(2)(D), asserting that L.H. made this statement in April 2013, when she was still a Frontier employee, though she had been moved to a different role with the company by that time.

         The district court determined that the statement offered by Weil was inadmissible under Federal Rule of Evidence 801(d)(2)(D) for lack of foundation, because L.H. was not employed in the supervisor position at the time L.H. made the statement to Weil. After excluding the statement, the district court then reviewed Weil's failure-to-promote claim. It assumed (without deciding) that Weil met his prima facie burden but concluded that, having excluded the statement, Weil failed to produce admissible evidence that Frontier's reasons for not promoting him were pretextual. Finally, the district court assessed Weil's wrongful termination claim and concluded that Weil had not presented a prima facie case. Weil appealed.

         II.

         Because we may only consider admissible evidence when reviewing a motion for summary judgment, Orr v. Bank of Am., NT & SA, 285 F.3d 764, 773-75 (9th Cir. 2002), we take up the evidentiary issue first. Under the general rule of evidence, all relevant evidence is admissible unless, inter alia, the Federal Rules of Evidence provide otherwise. Fed.R.Evid. 402. Here, we determine whether the district court properly excluded otherwise admissible relevant evidence under Federal Rule of Evidence 801. We review the district court's construction of Rule 801 de novo. See United States v. Ortega, 203 F.3d 675, 682 (9th Cir. 2000). The district court misconstrued Rule 801(d)(2)(D) when it required Weil (as foundation for the statement) to show that L.H.'s statement related to a matter within the scope of her employment at the time the statement was made.

         Under Federal Rule of Evidence 801(d)(2)(D), a statement is not hearsay and may be admitted against an opposing party if the statement "was made by the party's agent or employee on a matter within the scope of that relationship and while it existed."[3] The Rule sets forth three elements necessary for admitting a statement that would otherwise be excluded as hearsay: (1) the statement must be made by an agent or employee of the party against whom the statement is being offered; (2) the statement must concern a matter within the scope of that employment relationship; and (3) the statement must be made while the declarant is yet employed by the party.[4] There is no additional requirement that the declarant must still be in the same scope of employment at the moment the statement is made. The Rule's language is unambiguous. The second element requires that the statement concern a matter that was at some time within the scope of the declarant's employment. The third element requires only that the statement be made while the declarant is yet employed; it does not require that the declarant still be in the same position that resulted in the matter being within the scope of the employment relationship.

         With respect to the second element, a statement may concern a matter within the scope of employment-even though the declarant is no longer involved with that particular matter when the statement is made-so long as the declarant was involved with that matter at some prior point in his or her employment. See In re Sunset Bay Assocs., 944 F.2d 1503, 1519 (9th Cir. 1991) ("[S]tatements need only concern matters within the scope of the agency; they need not be made within the scope of the agency.") (emphasis in original). Additionally, a matter may fall within the scope of a declarant's employment even though the declarant did not have final decision-making authority on that matter. See Stiefel v. Bechtel Corp., 624 F.3d 1240, 1246 (9th Cir. 2010); cf. Breneman v. Kennecott Corp., 799 F.2d 470, 473 (9th Cir. 1986) (finding statements inadmissible in absence of evidence showing declarants were involved in discharge).

         Our sister circuits have similarly focused the scope inquiry on whether the declarant was involved in a process leading up to a challenged decision, rather than focusing on whether the declarant was a final decision-maker. See, e.g., Carter v. Univ. of Toledo, 349 F.3d 269, 275 (6th Cir. 2003) (focusing on "whether the declarant was involved in any of the critical appraisals of [plaintiff's] performance that preceded her leaving work[] - not whether the declarant was a direct decision maker") (first alteration in original, internal quotation marks omitted)); Simple v. Walgreen Co., 511 F.3d 668, 670-72 (7th Cir. 2007) (holding that a declarant's statement was admissible under the Rule, because the declarant was "involved in the process that led up to [the hiring decision], by being consulted about the appointment"); Yates v. Rexton, Inc., 267 F.3d 793, 802 (8th Cir. 2001) (recognizing that "it is not necessary that [the declarants] be the actual decision-makers" so long as they were involved in "a process leading to a challenged decision") (citing EEOC v. Watergate at Landmark Condo., 24 F.3d 635, 640 (4th Cir. 1994)); Kidd v. Mando Am. Corp., 731 F.3d 1196, 1208 (11th Cir. 2013) (requiring foundation that the declarant "participated-at least to some extent" in the company's hiring decision).[5]

         Turning now to the third element, the Rule's legislative history and intent support our reading that the Rule requires only that the statement be made when the declarant is yet employed. When the Federal Rules of Evidence were enacted in 1975, Rule 801(d)(2)(D) excluded from the definition of hearsay a statement offered against a party made "by his agent or servant concerning a matter within the scope of his agency or employment, made during the existence of the relationship." (Emphasis added). The Rule, as it existed then, required that the declarant's statement be made while the employment relationship existed, not within a specific scope of that relationship.

         In 2011, the Rule was amended to its current form. The advisory committee notes to the 2011 amendment were clear: "These changes are intended to be stylistic only. There is no intent to change any result in any ruling on evidence admissibility." Fed.R.Evid. 801 advisory committee's note to 2011 amendment. Thus, the wording of the Rule has been amended, but the substance of the Rule itself remains unchanged. The 2011 amendment did not add a requirement that the declarant maintain the same scope of employment at the time the statement is made; the Rule requires (as it always has) only that the statement be made "during the existence of the [employment] relationship." Fed.R.Evid. 801(d)(2)(D) (1975).

         The agency principles underlying this statutory non-hearsay category also bolster this interpretation of the Rule. "Typically the [employee] is well informed about acts in the course of the business, the statements are offered against the employer's interest, and while the employment continues, the employee is not likely to make the statements unless they are true." 2 McCormick on Evidence § 259 (7th ed.) (emphasis added). Neither an employee's knowledge nor her loyalty to her employer disappears at the moment the employee's job description changes. Accordingly, so long as the employment relationship continues to exist, we can presume the declarant is unlikely to make damaging statements unless they are true, even if the declarant is no longer actively involved with the particular "matter" at issue. Consequently, "the predominant view [has been] to admit a statement by an agent if it concerned a matter within the scope of the declarant's employment and was made before that relationship was terminated." Id. (emphasis added).

         To read the Rule otherwise could lead to absurd results. For instance, if a supervisor-just after being promoted- made a statement admitting to a discriminatory motive for terminating an employee the day before, the alternative reading of the Rule would exclude that statement, merely because the statement concerned a matter that was perhaps no longer within the scope of that supervisor's employment. Such a reading disregards the agency principles on which the Rule is predicated and would potentially allow employers to avoid liability by merely changing employees' positions or narrowly redefining the scope of their employment. Accordingly, we read the third element of the Rule to require that the statement be made while the employment relationship still exists, without regard to the declarant's specific scope of employment at the time the statement is made.

         Applying this unambiguous Rule, L.H.'s statement is admissible. Weil laid sufficient foundation to establish each of the three required elements. First, the proffered statement of Frontier's employee, L.H., was offered against Frontier. Second, the statement concerned a matter within the scope of L.H.'s employment. The statement concerned why Weil was not promoted to the director position.[6] Although L.H. did not make the final decision, she was significantly involved in the process leading to the decision-not only was L.H. responsible for filling that position while she was Vice President, but during that time she specifically considered Weil for the job, even conducting his performance review and interview. Third, the statement was made in April 2013 when L.H. was still employed by Frontier. Because all three elements of the Rule are met, the statement is admissible under Rule 801(d)(2)(D), and the district court erred in excluding it.

         The dissent's arguments are misplaced when considering the admission of this statement. Those arguments instead focus on topics more appropriately addressed in cross-examination. See Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 596 (1993) ("Vigorous cross-examination, presentation of contrary evidence, and careful instruction on the burden of proof are the traditional and appropriate means of attacking shaky but admissible evidence."). The dissent emphasizes that L.H. was involuntarily demoted from the hiring position, that Potts may have had good reasons for choosing Brown over Weil, and that the source of L.H.'s statement in this case is Weil's own deposition rather than from L.H. herself, because she was never deposed. These observations go directly to the weight of L.H.'s statement. However, they are misplaced in determining the statement's threshold admissibility under the Rule on summary judgment. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986) ("[A]t the summary judgment stage the judge's function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial."). On cross-examination, Frontier will have its opportunity to discredit and oppose the statement, but these issues do not determine a statement's admissibility.

         III.

         We review a district court's grant of summary judgment de novo. McGinest v. GTE Serv. Corp., 360 F.3d 1103, 1112 (9th Cir. 2004). "The [district] court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). The court must "view the facts and draw reasonable inferences in the light most favorable to ...


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