Opinion
CIVIL ACTION NO. 7:00-CV-0052-R
September 20, 2001
FINDINGS OF FACT AND CONCLUSIONS OF LAW
I. INTRODUCTION
1. This action arises out of an employment dispute in which the Plaintiff, Christine M. Baker, alleges that Defendant O'Reilly Automotive, Inc. ("O'Reilly") unlawfully terminated her to interfere with her health benefits.
2. Specifically, Ms. Baker accuses O'Reilly of terminating her when she contracted breast cancer to deliberately avoid having to pay her medical benefits, in violation of ERISA, 29 U.S.A. § 510 and 28 U.S.C. § 1001 et. seq.
3. This Court has jurisdiction over this action pursuant to 28 U.S.C. § 1331 and 29 U.S.C. § 510.
II. THE CREDIBILITY OF THE WITNESSES
1. These are the Court's credibility determinations concerning the witnesses who testified at the day-long bench trial.
2. These determinations are based upon standard credibility factors, including the manner in which each witness testified, any inconsistencies in the testimony, whether the witness was impeached or confused, and whether the witness had some reason not to be truthful.
A. Plaintiff's Witnesses 1. Mr. Chris Welch
3. Mr. Welch is currently employed as a Correctional Officer with the Texas Department of Criminal Justice. Before this job, he worked at O'Reilly Automotive for over one year as a parts specialist, and then an Assistant Manager.
4. Mr. Welch supervised Ms. Baker for part of the time she was employed at O'Reilly's, and found her to be an outstanding employee in all respects.
5. Mr. Welch testified about his knowledge of O'Reilly's "fourteen day rule" in which any employee absent from work for fourteen consecutive days, who has not been continuously employed with the company for more than one year is automatically terminated. According to Mr. Welch, this policy was widely known among staff.
6. Mr. Welch also testified that he himself implicated the fourteen day rule when he left O'Reilly's to visit his parents in Canada. Mr. Welch claimed that he "self-terminated" at that time because he was aware that he would be laid off as a result of the fourteen day rule.
7. In this instance, Mr. Welch said that managers of O'Reilly's told him that they would "look out for him" and that they "might be able to do something" for him with regards to the fourteen day situation. Mr. Welch insists that he understood this to mean that he would be rehired at O'Reilly's after returning to the United States, not that he would be given unusual consideration outside the mandates of the fourteen day rule.
8. Mr. Welch indicated that he was not privy to any employment decision made by managers at O'Reilly's regarding Christine Baker, nor did he understand the specifics of her termination.
9. This Court credits Mr. Welch's testimony to the extent that it is consistent with the Findings in this Opinion.
2. Mr. Marvin Swaim
Hostile Witness
10. Mr. Swaim is a District Manager of O'Reilly's. He began working at the company on December 29th, 1997, and was promoted to District Manager on March 8, 1999. He is in charge of operation in Northern Texas, and oversees stores, paperwork, and personnel. Mr. Swaim is in charge of all hiring and firing of employees in Northern Texas.
11. On May 15, 1999, Mr. Swaim called O'Reilly's National Human Resources department ("H.R.") in Springfield, Missouri to inquire about Ms. Baker and "whether or not he could do something for her." According to Mr. Swaim, Mr. Chris Elliot in H.R. told him that Ms. Baker would have to be terminated if she didn't secure a medical release from her doctor by May 18th, 1999, then Mr. Swaim would have to terminate her per company policy (the "fourteen day rule.").
12. As explained by Mr. Swaim, the "fourteen day rule" applies to all employees who have not been employed at O'Reilly's for longer than one year, at which point the Family Medical Leave Act entitles employees to benefits when they are unable to work. Prior to one year of service, employees at O'Reilly's at Ms. Baker's level are not entitled to sick pay or vacation time.
13. Mr. Swaim did not call Ms. Baker to discuss the "fourteen day rule" policy when he found out that he had to fire her. When Ms. Baker came to the office on May 19th to discuss her situation with Mr. Swaim, he fired her because "he had to do it, it just snuck up on me, the date."
14. Mr. Swaim testified that he would have hired Christine Baker back when she did receive a medical release to do so, but she did not give him a chance to tell her so because she left O'Reilly's extremely upset on May 19th.
13. Mr. Swaim admitted that the "fourteen day rule" is not mentioned anywhere in the employee handbook, but that a memorandum was circulated to all employees about the policy after the handbook was printed. He then produced a memorandum, dated 9/15/97, which so indicated.
14. Mr. Swaim testified that he has never tried to, nor actually circumvented the fourteen day rule with any employee, and that anyone who attempted to do so would have been fired.
15. Mr. Swaim further testified that Ms. Baker was a valuable employee to O'Reilly's, that he did not want to terminate her, and that he would have rehired her if she so desired.
16. This Court credits Mr. Swaim's testimony to the extent that it is consistent with the findings of this opinion.
3. Ms. Christine Baker
17. Ms. Christine Baker is the plaintiff in this action. She worked at O'Reilly's from June 22, 1998 through May 19th, 1999 as a Parts Specialist. This job required that she pull parts from inventory, load them onto her truck, and deliver the parts. She was terminated on May 19th, 1999, because an illness mandated that she be absent from work for fourteen consecutive days.
18. Ms. Baker testified that she was enrolled in the company health care plan from October 1, 1998 through May 4, 1999.
19. On April 30, 1999, Ms. Baker testified that she had a mammogram that revealed a lump in her breast. On May 4, after obtaining permission from her supervisor at O'Reilly's, Monty Sharp, she left work to obtain the mammogram's results. After learning that she had a lump in her breast, Ms. Baker scheduled immediate surgery for the morning of May 5.
20. Ms Baker was discharged from the hospital on May 6 after learning that the lump in her breast was malignant. According to Ms. Baker, both Mr. Sharp and Mr. Swaim visited her at home and brought her flowers, where she told Mr. Swaim to "not give away her truck" (the truck she always used to deliver parts.) He allegedly told her that he would not.
21. Ms. Baker testified that she went to O'Reilly's at least four times between the time she had surgery and the time she was fired; May 7th, May 9th, May 10th, and May 14th. Each time she spoke with at least one employee about her condition, and that she was excited to come back to work. She further testified that no one ever spoke to her about the "fourteen day rule."
22. On May 19th, 1999, Ms. Baker testified that she went to O'Reilly's to clear up a direct deposit problem, and Monty Sharp told her that he and Marvin Swaim had to speak to her, and took her to a back training room where the three could speak privately. She testified that Marvin Swaim told her "it isn't O'Reilly's fault that you've got cancer" and that the corporate office had directed him to terminate her. According to Ms. Baker, she was never told that she could be rehired.
23. Ms. Baker further testified that her insurance benefits were cancelled immediately, and that the insurance company stop paying her bills in June.
24. Ms Baker denied any previous knowledge of the "fourteen day rule." She also testified that had she been aware of the "fourteen day rule" she would have found a way to return to work prior to May 18, 1999.
25. Ms. Baker also testified that she never collected unemployment benefits, but briefly worked at a company called Things Remembered and as a self-employed house cleaner following her surgery.
26. On June 18, 1999, Ms. Baker testified that she received a Notice of Option to Continue Coverage from O'Reilly's regarding the possibility that she utilize COBRA to continue her medical benefits. She was aware that the coverage for her entire family under COBRA would have cost $258.42 per month, and $101.04 for herself alone had she elected to take the COBRA option. Ms. Baker testified that at that time, she could not afford to elect COBRA and thus knowingly disregarded the Notice.
27. This Court credits Ms. Baker's testimony to the extent that it is consistent with the findings of this Opinion.
4. Mr. Steve Polk
Hostile Witness
28. Mr. Polk is the Vice President of Human Resources at O'Reilly's main headquarters located in Springfield, MO. He has worked for O'Reilly's for thirteen years.
29. Mr. Polk reaffirmed the validity of O'Reilly's "fourteen day rule" as a national policy.
30. Mr. Polk also testified that an employee's portion of his or her medical benefits are paid for at the end of the pay period the benefits begin.
31. Mr. Polk also testified that the purpose of a self-insured medical plan, which O'Reilly's possesses, is to "break even." He further testified that O'Reilly's pays 51% of an employee's medical premium.
32. He also testified that Ms. Baker's claim would have been a "large claim" on the claim scale, but that this was not related to her termination because the company couldn't have known that Ms. Baker wouldn't COBRA out her benefits. The company would have had to pay all reasonable and necessary costs if Ms. Baker had decided to COBRA her benefits, regardless of her employee status.
33. Finally, Mr. Polk testified that many people have been terminated by means of the fourteen-day rule.
34. This Court credits Mr. Polk's testimony.
B. Defendants' Witnesses 1. Mr. Monty Sharp
1. Mr. Sharp is the Manager of the O'Reilly's Automotive branch at issue in this case. He had been the manager for one year at the time this litigation ensued.
2. Mr. Sharp essentially reiterated the testimony of Marvin Swaim.
3. One time (date unknown) prior to his May 18th meeting with Christine Baker, Mr. Sharp testified that Ms. Baker returned to O'Reilly's following her surgery and reported to him that she couldn't drive. He testified that this was the first time he realized that the fourteen-day rule would apply to Ms. Baker, but he didn't mention this to her at this meeting.
4. At that time, Mr. Sharp testified that he called central headquarters in Missouri to find out if the fourteen day rule would apply to Ms. Baker, and if there was anything he could do to help her. He testified that headquarter's answer was "no."
5. On May 18th, Mr Sharp testified that he was present at the meeting between himself, Ms. Baker, and Mr. Swaim. He claims the conversation regarding Ms. Baker's termination lasted less than one minute, and that he did not speak; only Mr. Swaim spoke to Ms. Baker. He remembers Mr. Swaim telling Ms. Baker that she did not have a valid doctor's release to come back to work, and as a result, she would be terminated pursuant to the fourteen-day rule.
6. Mr. Sharp also testified that Ms. Baker was a good employee, and that O'Reilly's would have hired her back if she had wanted her job back when her health improved.
7. With regards to Christopher Welch, Mr. Sharp testified that he did not "help" Mr. Welch "get around" the fourteen day rule.
8. This Court credits Mr. Sharp's testimony.
III. FINDINGS OF FACT
Based upon the evidence presented at trial, and upon the credibility determinations just made, the following are the Court's Findings of Fact as required by Fed.R.Civ.P. 52:
1. Plaintiff was hired June 22, 1998 as a delivery specialist.
2. Plaintiff became eligible to participate in Defendant's self-funded health insurance plan October 1, 1999
3. Defendant first deducted $73.34 for medical insurance coverage from Plaintiff's payroll check, pay ending date October 17, 1998.
4. Defendant enjoyed working with the Plaintiff, had no complaint about her work performance, and believed she was a good employee.
5. Plaintiff received two raises during her employment with Defendant.
6. Plaintiff was forced to take a medical leave of absence for breast surgery on May 4, 1999.
7. On May 5, 1999, Plaintiff scheduled surgery to remove cancerous tissue from her breast.
8. Plaintiff had not been employed with O'Reilly's for one year at the time of her surgery, and was not eligible for leave nor covered under the Family Medical Leave Act (FMLA).
9. As of May 18, 1999, Plaintiff had not obtained a release from her doctor that was required by O'Reilly's so she could return to work.
10. On May 18, 1999, Plaintiff met with her store manager, Monty Sharp, and the district manager, Marvin Swaim, at the store and told them she was still healing from her surgery and would not be able to return to work
11. On that same day, Mr. Swaim and Mr. Sharp told Plaintiff that the fourteen day policy would apply to her and that she would be terminated if she could not get a doctor's release.
12. This Court also finds that Mr. Sharp and Mr. Swaim would have rehired the Plaintiff had she requested to be reinstated after her healing process was complete.
13. This Court also specifically finds that, however harsh the policy may seem, Ms. Baker was terminated by O'Reilly's pursuant to the "fourteen-day rule," as applied to all employees with a tenure of less than one year at O'Reilly's.
14. Testimony on both sides of this case established that the "fourteen-day rule" was a well-known policy among employees by virtue of its harsh, unforgiving nature.
15. Ms. Baker received her COBRA notice from O'Reilly's in the mail in time to continue her health benefits with O'Reilly's. The date on this notice was June 18, 1999; however, Ms. Baker had sixty days from the date of the notice to elect continuation of her medical benefits. The cost to her as an individual would have been $101.04 per month, or $258.42 per month to cover her entire family.
16. Ms. Baker chose to not continue her COBRA benefits, despite the knowledge that she had a life-threatening illness.
17. This Court finds that the decision to terminate Ms. Baker was solely based on the fact that Ms. Baker was unable to work prior to May 19, 1999, and therefore was subject to termination pursuant to Defendant's "fourteen-day" rule. Although the Court finds this rule harsh and unreasonable, it is also clear that the rule was one of general application and that Ms. Baker's termination was not made with discriminatory intent.
18. This Court also finds that the COBRA provisions bolster's the Defendants' employee testimony that the decision to terminate Ms. Baker was unrelated to a malicious intent to interfere with the provision of her medical benefits. Ms. Baker had the option to continue her medical coverage, and upon paying the premium, she could have ensured that she had continued medical coverage throughout her illness, from surgery forward. Ms. Baker's cost would have only been $101.01 per month for herself alone, which was less than her costs for her family as an employee of O'Reilly's (then $146.68 per month). O'Reilly's would have then been required, by law, to fund her medical bills. At the time of her termination, the Defendants could not have been aware whether or not Ms. Baker would elect to continue her benefits through COBRA.
19. O'Reilly's did not act with discriminatory intent in firing Ms. Baker on May 19, 1999. While the decision may be deemed heartless or inhuman, it was not discriminatory as our laws define.
20. If any of the preceding Findings of Fact may more properly be deemed Conclusions of Law, they are hereby incorporated by reference into the Conclusions of Law.
IV. CONCLUSIONS OF LAW.
1. To establish a prima facie case under ERISA, a plaintiff must show that a defendant acted with specific discriminatory intent in a termination, for the purpose of interfering with any rights to which the Plaintiff may be entitled under their health benefit plan. See Rogers v. International Marine Terminals, Inc., 87 F.3d 755, 761 (5th Cir. 1996).
2. If an employer can articulate or demonstrate a legitimate, nondiscriminatory reason for a termination that is unrelated to medical benefits, then the burden falls to the Plaintiff to prove that the reason is pretext for the specific discriminatory intent ERISA forbids. See Hines v. Mass. Mutual Life Insurance Co., 43 F.3d 207, 209 (5th Cir. 1995); McGann v. HH Music Co, 946 F.2d 401, 404 (5th Cir. 1991).
3. Although the fourteen-day termination policy is a harsh rule which requires tenured employees of less than one year to essentially "start over" if they miss more than 14 days of work, there is nothing illegal about O'Reilly's maintaining such a policy. "ERISA does not broadly prevent an employer from `discriminating' in the creation, alteration, or termination of employee benefit plans. . . . under section 510, the asserted discrimination is illegal only if it is motivated by a desire to retaliate against an employee or to deprive an employee of an existing right to which he may be entitled." McGann, 946 F.2d at 408. Here, until an employee has been employed by one year, (when the federally required FMLA leave would require O'Reilly's to keep a sick employee's position open until their return), O'Reilly's chooses to "discriminate" against non-tenured employees by means of the "fourteen-day" rule. This activity is not prohibited, nor protected, by ERISA or any other provision of federal law.
4. As long as O'Reilly's complies with federal law, their conduct cannot be deemed unlawful. As previously stated in this Court's Findings of Fact, O'Reilly's did not act with specific discriminatory intent when firing Ms. Baker, and has articulated a neutral, non-discriminatory reason for doing so. The ethical nature of O'Reilly's decision leaves much room for debate; however, this Court is solely called upon to determine the legality, not the humanness, of O'Reilly's policies and actions.
5. For the foregoing reasons, O'Reilly's Automotive is not liable to Ms. Baker, and Ms. Baker is not entitled to any compensatory or punitive damages.
6. If any of the preceding Conclusions of Law may more properly be deemed Findings of Fact, they are hereby incorporated by reference into the Findings of Fact.