Opinion
No. C02-0042
October 15, 2002
ORDER
This matter comes before the court pursuant to the plaintiff's motion to amend the complaint (docket number 18). The defendant filed a counterclaim with its answer and the plaintiff now wants to amend his complaint to allege that the filing of the counterclaim is actionable retaliation. The defendants resist the amendment contending that the retaliation claim is futile. The plaintiff's motion is denied.
Factual Background
E-C of Iowa is a subsidiary of Electro-Coatings, Inc., which is owned by E.C. Industries. E-C of Iowa owns and operates a manufacturing facility in Cedar Rapids, Iowa. The plaintiff began his employment for E-C of Iowa in January of 1957 and worked there for 42 years. The plaintiff managed E-C of Iowa's Cedar Rapids facility for several decades and in 1997, he became the president and a director of the company. On August 11, 2000, the plaintiff was advised that he was being placed on paid administrative leave while the company was relocating to another facility and he was removed as a director. On November 14, 2000, the plaintiff was informed that his employment would be terminated effective December 31, 2000.
The plaintiff filed his complaint against the defendants on March 12, 2002 alleging age discrimination in violation of the ADEA. On June 28, 2002, the defendants filed their answer. The answer included a counterclaim brought by E-C of Iowa against the plaintiff alleging breach of fiduciary duty based on certain actions he took while he was an officer and director of the company.
In his original complaint, the plaintiff contends that his age was a determining factor in the decision to terminate his employment. The plaintiff now claims that the filing of a meritless counterclaim in response to his discrimination lawsuit is retaliatory. His amended complaint seeks to add a retaliation claim against all three defendants.
Amending the Complaint
Federal Rule of Civil Procedure 15(a) provides that leave to amend "shall be freely given when justice so requires." Fed.R.Civ.P. 15(a).
Under the liberal amendment policy of Federal Rule of Civil Procedure 15(a), a district court's denial of leave to amend pleadings is appropriate only in those limited circumstances in which undue delay, bad faith on the part of the moving party, futility of the amendment, or unfair prejudice to the non-moving party can be demonstrated.
Roberson v. Hayti Police Dep't., 241 F.3d 992, 995 (8th Cir. 2001) (citations omitted). Although leave to amend a complaint should be freely granted, it may be denied if the proposed amended pleading would be futile. Wald v. Southwestern Bell Corp. Customcare Med. Plan, 83 F.3d 1002, 1005 (8th Cir. 1996). A motion to amend should be denied on the merits "only if [it] assert[s] clearly frivolous claims or defenses." Gamma-10 Plastics, Inc. v. American President Lines, Ltd., 32 F.3d 1244, 1255-56 (8th Cir. 1994) (citing Buder v. Merrill Lynch, Pierce, Fenner Smith, Inc., 644 F.2d 690, 695 (8th Cir. 1981)). Whether to grant a motion to amend is within the sound discretion of the court. Id. at 1255. There is no absolute or automatic right to amend one's complaint.Williams v. Little Rock Mun. Water Works, 21 F.3d 218, 224 (8th Cir. 1994) (citing Thompson-El v. Jones, 876 F.2d 66, 69 (8th Cir. 1989)).
In this case, the plaintiff seeks to amend the complaint to include a retaliation claim, arguing that E-C of Iowa's filing of a counterclaim is retaliatory. The defendants argue that the counterclaim cannot constitute retaliation because it is not employment-related. The court must therefore determine whether the plaintiff's proposed amendment would be futile.
Under the retaliation provision of the ADEA:
It shall be unlawful for an employer to discriminate against any of his employees or applicants for employment . . . because such individual . . . opposed any practice made unlawful by this section, or because such individual . . . has made a charge testified, assisted, or participated in any manner in an investigation, proceeding, or litigation under this chapter.29 U.S.C. § 623(d). There is no clear consensus among the courts as to whether post-termination conduct by an employer can amount to retaliation. Some courts have found retaliatory litigation under statutes such as Title VII and the ADEA. See, e.g., Blistein v. St. John's Coll., 860 F. Supp. 256, 268 (D.Md. 1994) (finding retaliatory action under the ADEA need not be employment-related and could include the filing of a counterclaim). However, a number of other courts have found that retaliatory action is limited to employment-related actions. See Koelsch v. Beltone Elecs. Corp., 46 F.3d 705, 709 (7th Cir. 1995) (holding that post-termination conduct does not constitute an adverse employment action supporting a retaliation claim); Ginsberg v. Valhalla Anesthesia Assocs., 971 F. Supp. 144, 148-49 (S.D.N.Y. 1997) (concluding that a counterclaim cannot be retaliation unless it is employment-related). The Eighth Circuit Court of Appeals held that an employer's alleged retaliatory actions have to be employment-related to be actionable.Brower v. Runyon, 178 F.3d 1002, 1007 (8th Cir. 1999). Although Brower dealt with Title VII, the retaliation provision in Title VII is identical to § 623(d) of the ADEA.
In this case, it is also post-termination conduct by the employer that is in issue, specifically the filing of the counterclaim. The plaintiff was terminated on December 31, 2000 and the counterclaim was brought eighteen months later. The Supreme Court has held that former employees are included within Title VII's retaliation provision. Robinson v. Shell Oil Co., 519 U.S. 337, 346 (1997). However, this court finds that a former employee may claim retaliation based on his employer's post-termination conduct only if that conduct was employment-related. In other words, post-termination acts of retaliation must undermine a former employee's future employment prospects or have some nexus to employment to be actionable. See, e.g., Ruedlinger v. Jarrett, 106 F.3d 212, 214 (7th Cir. 1997).
Although many different post-termination actions may constitute retaliation, this court holds that, ordinarily, a counterclaim may not. Initially, the court notes that a counterclaim is not to be considered an employment-related action. Only in the rare case will conduct that occurs within the scope of litigation amount to retaliation. Steffes v. Stepan Co., 144 F.3d 1070, 1075 (7th Cir. 1998). The Seventh Circuit has recognized a "litigation privilege," which precludes actions taken in litigation which are otherwise redressable through court processes from supporting further litigation. Id. As the court explained, "`[a]n attempt to obstruct the litigation of the underlying discrimination complaint . . . is inseparable from the litigation of the claim. Accordingly, it is a matter to be resolved pursuant to court rules. . . .'" Id. (quotingMcKenzie v. Ill. Dep't of Transp., 92 F.3d 473, 486 (7th Cir. 1996)). However, there are some actions taken in the course of litigation that may constitute retaliation, therefore, an absolute litigation privilege should not be extended. Id. Nonetheless, "litigation tactics for the most part will not give rise to actionable retaliation. . . ." Id. "Defendants in discrimination suits must have some leeway to investigate possible defenses without undue fear of being subjected to additional liability in retaliation suits." Id. at 1076.
This court concludes that allowing the plaintiff to amend his complaint to include a retaliation claim would be futile. First, the counterclaim is not employment-related. "[I]t is an employee's discharge or other employment impairment that evidences actionable retaliation, and not events subsequent to and unrelated to his employment." Reed v. Shepard, 939 F.2d 484, 493 (7th Cir. 1991). Further, as the Seventh Circuit has explained, the defendant is entitled to a qualified "litigation privilege." Companies "have a constitutional right to file lawsuits, tempered by the requirement that the suits have an arguable basis."Scrivner v. Socorro Indep. Sch. Dist., 169 F.3d 969, 972 (5th Cir. 1999) (citing Fed.R.Civ.P. 11).
The plaintiff retains all rights conferred by Fed.R.Civ.P. 11 to protect and compensate for meritless litigation.
Based on the foregoing,
IT IS ORDERED that the plaintiff's motion to amend the complaint (docket number 18) is denied.