Opinion
Civil Action 20-1549
08-01-2023
ELITE TRANSIT SOLUTIONS, LLC Plaintiff, v. ALPHONSO CUNNINGHAM and NAFISA MITRECIC, Defendants.
Re: ECF Nos. 153, 155 and 157
MAUREEN P. KELLY, MAGISTRATE JUDGE
REPORT AND RECOMMENDATION
CATHY BISSOON, DISTRICT JUDGE
I. RECOMMENDATION
Pending before the Court are two Motions for Summary Judgment filed by Plaintiff Elite Transit Solutions, LLC (“Elite”) requesting the entry of judgment in its favor as to all claims asserted by Defendant Alphonso Cunningham (“Cunningham”) and Defendant Nafisa Mitrecic (“Mitrecic”) (collectively, “Defendants”). ECF Nos. 153, 155. Also pending is Defendants' and Counterclaim Plaintiffs' Motion for Partial Summary Judgment. ECF No. 157.
For the following reasons, it is respectfully recommended that the Court deny Elite's Motion for Summary Judgment as to Cunningham's claims, deny Elite's Motion for Summary Judgment as to Mitrecic's claims, and grant in part and deny in part Defendants' Motion for Partial Summary Judgment.
II. REPORT
A. FACTUAL BACKGROUND AND PROCEDURAL HISTORY
Elite is a logistics company that contracts with various manufacturers to provide product delivery services through third-party motor carriers. ECF No. 152 ¶ 1; ECF No. 39 ¶ 17; ECF No. 60 ¶ 17; ECF No. 74 ¶ 17. Elite hired Cunningham as a Logistics Account Coordinator in May 2018 and promoted him to the position of Logistics Account Specialist in July 2018, and to afterhours supervisor in December 2019. Id. ¶¶ 2-5. At all times relevant to this litigation, Cunningham was in a romantic relationship with Mitrecic, and the two shared a residence and resources, including a laptop computer. ECF No. 39 ¶ 9; ECF No. 60 ¶ 9; ECF No. 74 ¶ 9. Elite hired Mitrecic on March 19, 2019, as a Logistics Account Coordinator. She later worked as a training facilitator and regional supervisor until her demotion to Logistics Account Specialist in February 2020. Mitrecic remained in that position until her termination on May 29, 2020. Id. ¶¶ 6-13. After leaving Elite, Mitrecic sought employment in the third-party logistics industry and began working for a competitor on October 5, 2020. ECF No. 74 ¶¶ 118, 119. Defendants concede that before and after Mitrecic's termination, they forwarded documents to their personal email accounts that contained Elite's allegedly confidential information. After the discovery and investigation of the transfer of its confidential information, Elite terminated Cunningham on September 30, 2020.
Elite commenced this action on October 13, 2020, with the filing of a Complaint against Cunningham for his alleged misappropriation of Elite's confidential and proprietary business information. ECF No. 1.
Cunningham denied Elite's allegations and joined Mitrecic with counterclaims against Elite and Michael Johnson (“Johnson”), Elite's Chief Executive Officer and founder, for unlawful retaliation in violation of 42 U.S.C. § 1981. ECF No. 12.
The Court conducted a status conference on November 23, 2020, and Cunningham agreed to a Consent Order requiring him to refrain from disclosing any of Elite's confidential information and to turn over his devices and electronic accounts to a third-party for forensic examination. ECF Nos. 19, 20. The parties also agreed that Cunningham would file an Amended Answer and Counterclaim to remove Mitrecic as a counterclaimant. Id. On February 10, 2021, Mitrecic filed a separate action against Elite and Johnson for “Retaliatory Post-employment Actions.” Mitrecic v. Elite Transit Solutions, LLC, No. 21- 210 (W.D. Pa. Feb. 10, 2021) (ECF No. 1).
Upon completion of a forensic analysis of Cunningham's devices and accounts, Elite requested and was granted leave to file an Amended Complaint to add Mitrecic and her new employers as defendants. ECF No. 35, 37. Elite's claims arise from Mitrecic's possession of its confidential information on her laptop and her alleged use of that information to benefit competing logistics entities.
Elite filed the Amended Complaint on May 12, 2021, against both Defendants and Mitrecic's new employers Jillamy, Inc. and Mode Transportation, LLC. ECF No. 39. As to Cunningham and Mitrecic, Elite brings claims for violating the Defend Trade Secrets Act (“DTSA”), 18 U.S.C. § 1832, et seq. (Counts I and V); the Pennsylvania Uniform Trade Secrets Act (“PUTSA”), 12 Pa. Cons. Stat. Ann. § 5301 et seq. (Count II and VI); and state law claims for breach of the duty of loyalty (Count III), for breach of contract (Counts IV and VII), and civil conspiracy (Count VIII). ECF No. 39. Elite's claims against Jillamy and Mode include tortious interference with contractual relations (Count IX), claims under DTSA and PUTSA (Counts X and XI) and, as to all Defendants, a claim for unfair competition (Count XII).
Upon the filing of the Amended Complaint and a Motion for Preliminary Injunction, Mitrecic agreed to a Consent Order that precluded her use of Elite's confidential information and permitted Elite to conduct to a forensic examination of her devices and accounts. ECF No. 42. Based on the Consent Orders, Elite withdrew the Motion for Preliminary Injunction. ECF Nos. 45, 48.
Mode filed an Answer to Elite's Amended Complaint, and Jillamy filed a Motion to Dismiss. ECF Nos. 56, 62. Cunningham and Mitrecic filed separate Answers and Counterclaims. ECF Nos. 60 and 74. Elite and Johnson filed Answers to the Counterclaims. ECF Nos. 70, 77, and 88.
Separately, on July 30, 2021, the Court entered an Order to Show Cause in Mitrecic's action at No. 21-210 requiring her to show cause why that case should not be dismissed pursuant Federal Rule of Civil Procedure 4(m) for failure to timely serve any defendant. Mitrecic failed to respond and the Court dismissed her action without prejudice. Mitrecic, No. 21-210 (W.D. Pa. Aug. 8, 2021) (ECF No. 7).
The Court denied Jillamy's Motion to Dismiss on March 15, 2022. ECF No. 92. On October 31, 2022, Elite stipulated to the dismissal of its claims against Jillamy and Mode, with prejudice. ECF No. 123.
In accordance with the Court's summary judgment scheduling order, the remaining parties filed a Joint Concise Statement of Material Facts with exhibits. ECF Nos. 150 - 152, 172. The parties also filed the pending motions for summary judgment, briefs in support, briefs in opposition, and replies. ECF Nos. 153 - 158, 161-163, 169-171. Defendants have filed a “Counter Statement of Facts in Dispute in Response to Elite's Motion for Summary Judgment” with exhibits. ECF No. 164. The Motions for Summary Judgment are ripe for consideration.
B. STANDARD OF REVIEW
On cross-motions for summary judgment, the Court considers each Motion on its own merits, tested against the standards of Federal Rule of Civil Procedure 56. J.S. ex rel. Snyder v. Blue Mountain Sch. Dist., 650 F.3d 915, 925 (3d Cir. 2011). Under Rule 56, “[t]he 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). An issue of material fact is in genuine dispute if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Doe v. Abington Friends Sch., 480 F.3d 252, 256 (3d Cir. 2007) (“A genuine issue is present when a reasonable trier of fact, viewing all of the record evidence, could rationally find in favor of the non-moving party in light of his burden of proof.”). Thus, summary judgment is warranted where, “after adequate time for discovery and upon motion ... a party ... fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” Marten v. Godwin, 499 F.3d 290, 295 (3d Cir. 2007) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986)).
The moving party bears the initial burden of proving to the Court that the evidence of records fails to support the non-moving party's case. Celotex, 477 U.S. at 322; Conoshenti v. Pub. Serv. Elec. & Gas Co., 364 F.3d 135, 140 (3d Cir. 2004). “[W]hen the moving party has carried its burden under Rule 56(c), its opponent must do more than simply show that there is some metaphysical doubt as to the material facts ... Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no ‘genuine issue for trial.'” Scott v. Harris, 550 U.S. 372, 380 (2007) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986)).
In deciding a summary judgment motion, a court must view the facts in the light most favorable to the nonmoving party and must draw all reasonable inferences, and resolve all doubts in favor of the nonmoving party. Matreale v. New Jersey Dep't of Mil. & Veterans Affairs, 487 F.3d 150, 152 (3d Cir. 2007); Woodside v. Sch. Dist. of Phila. Bd. of Educ., 248 F.3d 129, 130 (3d Cir. 2001).
C. DEFENDANTS' MOTION FOR PARTIAL SUMMARY JUDGMENT (ECF No. 157)
1. Relevant Facts
Elite alleges that over the years, it developed confidential and proprietary information that includes: (1) carrier lists with pricing, profit margin data, and shipping routes; (2) client lists with contact information, referral sources, profit and market pricing data, and shipping routes; (3) a Shipment Dashboard that is “an integral component of Elite's proprietary and innovative transportation management” program; and (4) confidential and proprietary formulas, policies, and procedures related to employee performance management. ECF No. 39 ¶ 20. Cunningham and Mitrecic agree that Elite's master carrier list “was only accessible by Elite employees.” ECF No. 152 ¶ 45.
For purposes of their motion for summary judgment, Defendants do not dispute that before termination, they forwarded to their personal email accounts copies of emails or documents related to Mitrecic's work performance, Elite's employee performance criteria, Elite's shipment data, and Elite's carrier list. ECF No. 152 ¶¶ 56-64; ECF No. 158 at 4. Cunningham concedes that he was not authorized to transfer any of the data to his personal email account. ECF No. 150-1 at 116, 132,136. It is not disputed that the forensic examination of Cunningham and Mitrecic's devices revealed that Elite's confidential information was stored on Mitrecic's personal laptop and several external hard drives.
As to each of Elite's claims, Defendants assert that summary judgment is warranted as a matter of law because:
(1) Elite agrees that it “did not suffer any damages due to any action” of Cunningham or Mitrecic, and concedes that it has no evidence that anyone “used the alleged confidential
information” for their own or for a third party's benefit. ECF No. 152 ¶¶ 66-77. Therefore, Elite cannot recover compensatory damages.
(2) Elite failed to provide a “Notice of Immunity” in its employment confidentiality agreements. ECF No. 152 ¶ 65. The failure to do so precludes recovery of punitive damages or attorneys' fees under the DTSA. In addition, because Elite cannot recover compensatory damages under DTSA, punitive damages are not appropriately entered. ECF No. 158 at 67.
(3) Elite's claims for Breach of Duty of Loyalty, Civil Conspiracy, and Unfair Competition are preempted by PUTSA. Id. at 7.
(4) Elite's claims for breach of contract fail as a matter of law because there is no evidence that it sustained damages nor is there evidence that any of Elite's confidential and proprietary information was disclosed to a third party or used for Defendants' benefit or the benefit of any third party. Id. at 9-11.
2. Discussion
a. Remedies available under DTSA and PUTSA
Defendants narrowly interpret the DTSA and PUTSA to permit recovery of compensatory damages only when the misappropriation of a trade secret has resulted in a quantifiable loss of business. ECF No. 158 at 6. Defendants assert that neither Cunningham nor Mitrecic are currently employed in the logistics industry, and Elite has no evidence that its confidential information was used for Defendants' benefit or to benefit any third party. ECF No. 171. Thus, Defendants contend Elite cannot recover compensatory damages as a matter of law.
Elite responds that both statutes contemplate recovery for the unauthorized disclosure of a trade secret without injury in the form of lost profits. In this case, Elite argues that it cannot reasonably be disputed that before and after Mitrecic's termination, Defendants forwarded Elite's confidential information to their personal email accounts and stored the information on Mitrecic's computer and external hard drives. Defendants also do not dispute that Mitrecic sought and gained employment, however briefly, with a competitor of Elite. ECF No. 161 at 1-4. Thus, Elite contends that it sustained a compensable injury within the scope of DTSA and PUTSA.
DTSA defines “misappropriation” to include “disclosure or use of a trade secret of another without express or implied consent by a person who - (i) used improper means to acquire knowledge of the trade secret; (ii) at the time of disclosure or use, knew or had reason to know that the knowledge of the trade secret was - (I) derived from or through a person who had used improper means to acquire the trade secret; (II) acquired under circumstances giving rise to a duty to maintain the secrecy of the trade secret or limit the use of the trade secret; or (III) derived from or through a person who owed a duty to the person seeking relief to maintain the secrecy of the trade secret or limit the use of the trade secret; or (iii) before a material change of the position of the person, knew or had reason to know that - (I) the trade secret was a trade secret; and (II) knowledge of the trade secret had been acquired by accident or mistake.” 18 U.S.C. § 1839. When damages for misappropriation cannot be measured by actual loss or for unjust enrichment, DTSA authorizes the recovery of an award “measured by imposition of liability for a reasonable royalty for the misappropriator's unauthorized disclosure or use of the trade secret.” 18 U.S.C. § 1836(b)(3)(B)(ii).
The United States Court of Appeals for the Third Circuit has held that under DTSA, a plaintiff who suffers the misappropriation of a trade secret suffers compensable harm. “By statutory definition, trade secret misappropriation is harm.” Oakwood Lab'ys LLC v. Thanoo, 999 F.3d 892, 914 (3d Cir. 2021). “[T]rade secret information ‘derives [its] independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, another person who can obtain economic value from [that information's] disclosure or use[.]'” Id. at 913 quoting 18 U.S.C. § 1839(3)(B). Thus, DTSA provides that a plaintiff who has lost the exclusive ownership or use of its trade secret information suffers a redressable harm, independent of proof of lost sales.
In this case, Elite concedes it has no evidence that Mitrecic used the information she took or the information Cunningham sent to her for her own benefit or for a competitor's benefit. But the record supports Elite's argument that it lost exclusive ownership of confidential information at the time the information was disclosed to and retained by an ex-employee. As contemplated in Oakwood, Elite suffered the potential that its confidential information could be used by an unauthorized individual or entity. Thus, it sustained a compensable loss under DTSA. The value of that loss is properly determined by a factfinder at trial.
PUTSA similarly protects “both the actual loss caused by misappropriation and the unjust enrichment caused by misappropriation that actual loss computations do not take into account.” PPG Indus., Inc. v. Jiangsu Tie Mao Glass Co., Ltd., No. 15-965, 2021 WL 2327509, at * 3 (W.D. Pa. June 8, 2021), aff'd, 47 F. 4th 156 (3d Cir. 2022). PUTSA provides that “[i]n lieu of damages measured by any other methods, the damages caused by misappropriation may be measured by imposition of liability for a reasonable royalty for a misappropriator's unauthorized disclosure or use of a trade secret.” 12 PA. STAT. AND CONS. STAT. ANN. § 5304. Compensation in the form of a royalty does not require evidence that the secreted material was used to Defendants' commercial benefit or to the benefit of a third party. Instead, recovery may be measured by the costs that would have been incurred by a competitor to develop a version of the information taken or avoided through misappropriation. See PPG Indus., 47 F. 4th at 162.
The United States Court of Appeals for the Fourth Circuit applied Maryland's version of the Uniform Trade Secrets Act and concluded that where only unauthorized disclosure is established, a violation of the Act has occurred and the plaintiff is entitled to royalty damages that may be measured by “what a fair licensing price ... would have been.” Airfacts, Inc. v. Amezaga, 30 F. 4th 359, 369 (4th Cir. 2022). This determination may be based on “various factors, including: ‘ th[e] prices past purchasers or licensees may have paid; the total value of the secret to the plaintiff, including the plaintiff's development costs and the importance of the secret to the plaintiff's business; the nature and extent of the use the defendant intended for the secret; and finally whatever other unique factors in the particular case which might have affected the parties' agreement, such as the ready availability of alternative processes.'” Id. (quoting Univ. Computing Co. v. Lykes-Youngstown Corp...504 F.2d 518, 539 (5th Cir. 1974)). This approach mirrors that adopted by the district court in PPG Industries and found permissible on appeal by the Third Circuit. There, the district court used the value of costs avoided by misappropriation or spent by plaintiff in development of the trade secret as a proxy for the costs the defendant saved. PPG Indus., 47 F.4th at 163. Because recovery in the form of licensing fees or costs avoided is permissible under PUTSA without evidence of lost profits, Defendants' Motion for Partial Summary Judgment should be denied.
Defendants argue, in the alternative, that if recovery is permitted because of the unauthorized disclosure and retention of Elite's confidential information, summary judgment remains warranted because Elite presents no evidence of the value of a license for the information. ECF No. 171. As discussed in the status conference held April 28, 2022, and confirmed at the postdiscovery status conference held November 1, 2022, expert discovery on damages was deferred until after resolution of anticipated motions for summary judgment. Thus, Defendants' argument related to the calculation of damages for disclosure of Elite's proprietary information is premature.ECF No. 101.
As reflected in the Minute Entry for the November 1, 2022, status conference and Defendants' “Status Report” filed that same day, counsel for Defendants failed to appear at the conference due to his scheduling error. The Court's notes of the conference reflect that expert discovery related to damages would be deferred until after resolution of liability through anticipated motions for summary judgment. ECF Nos. 124 and 125.
For these reasons, Defendants' Motion for Partial Summary Judgment as to Elite's DTSA and PUTSA claims should be denied.
b. Damages for Breach of the Duty of Loyalty, Breach of Contract, Civil Conspiracy, and Unfair Competition
Defendants also seek to preclude Elite's recovery of compensatory damages for its contract and common law claims based on Elite's statement that it did not suffer actual damages. ECF No. 158 at 4-6. Defendants argue that this concession bars Elite from recovery of more than nominal damages.
Defendants concede the potential for recovery of nominal damages. ECF No. 158 at 6.
Elite responds that as to its breach of contract claim, it is entitled to nominal damages and, as to all claims, to a permanent injunction barring Defendants from using Elite's confidential information and requiring the return of any documents and information that remain in their possession. ECF No. 161 at 3; Norfolk Southern Ry. Co. v. Pittsburgh & West Virginia R.R., 153 F.Supp.3d 778, 817 (W.D. Pa. 2015) (quoting Haywood v. Univ. of Pittsburgh, 976 F.Supp.2d 606, 645 (W.D. Pa. 2013)). Thus, Elite concedes that it cannot recover compensatory damages for its breach of contract claim and it has waived its right to argue to the contrary as to its remaining state law claims. See McCowan v. City of Philadelphia, 603 F.Supp.3d 171, 193 (E.D. Pa. 2022) (“District courts in the Third Circuit have held that ‘when a plaintiff responds to a defendant's summary judgment motion but fails to address the substance of any challenge to particular claims, that failure constitutes an abandonment of those causes of action and essentially acts as a waiver of th[o]se issues.'”) (citations omitted and cleaned up).
Upon review, and based on Elite's apparent concession, it is recommended that the Court grant in part Defendants' Motion for Partial Summary Judgment and preclude Elite from recovering compensatory damages arising out of its claims for breach of contract, breach of the duty of loyalty, civil conspiracy, and unfair competition.
c. Attorney Fees and Punitive Damages under DTSA
Defendants next move for entry of summary judgment in their favor as to Elite claims for punitive damages and attorney fees under DTSA (Counts I and V) because Elite failed to provide them a statutorily required Notice of Immunity. ECF No. 158 at 6 (citing 18 U.S.C. § 1833(b)(3)(C)). Elite's designated corporate representative testified that neither Cunningham nor Mitrecic were provided a notice of immunity. ECF No. 152 ¶ 65; ECF No. 151-1 at 5-8. Elite does not address the merits of Defendants' argument but broadly states that it is entitled to recover both attorney fees and punitive damages. ECF No. 161 at 4.
Under DTSA, an award of exemplary damages or attorney fees is expressly conditioned on the requirement that an employer provide notice to the employee of the immunity offered under section 1833(b)(1) of DTSA. The notice prohibits an individual from being held liable for disclosure of a trade secret in some circumstances not applicable to this action. See 18 U.S.C. § 1833(b)(C)(3) (“If an employer does not comply with the notice requirement in subparagraph (A), the employer may not be awarded exemplary damages or attorney fees under subparagraph (C) or (D) of section 1836(b)(3) in an action against an employee to whom notice was not provided.”).
Upon review, because the required notice of immunity was not provided to Cunningham or Mitrecic, summary judgment is properly entered in Defendants' favor on Elite's claims for punitive damages and attorney fees under DTSA at Counts I and V. See Garcia v. Vertical Screen, 592 F.Supp.3d 409, 430 (E.D. Pa. 2022).
d. Preemption
Defendants contend that Elite's state law claims for breach of the duty of loyalty, civil conspiracy, and unfair competition (Counts III, VIII, and XII) are expressly preempted by PUTSA, and thus judgment in their favor should be entered. ECF No. 158 at 7. Elite responds that its alternative state law claims for injunctive relief should survive at this time because there are material issues of fact related to whether the confidential and proprietary information “taken by Defendants” qualifies as a “trade secret” under PUTSA. ECF No. 161 at 3, 5-6.
PUTSA provides:
(a) General rule.--Except as provided in subsection (b), this chapter displaces conflicting tort, restitutionary and other law of this Commonwealth providing civil remedies for misappropriation of a trade secret.
(b) Exceptions.--This chapter does not affect:
(1) contractual remedies, whether or not based upon misappropriation of a trade secret;
(2) other civil remedies that are not based upon misappropriation of a trade secret; or
(3) criminal remedies, whether or not based upon misappropriation of a trade secret.
12 Pa. Cons. Stat. Ann. § 5308. Thus, Pennsylvania preempts common law torts for misappropriation. See, e.g., REVZIP, LLC v. McDonnell, No. 3:19-CV-191, 2023 WL 3260662, at *27-8 (W.D. Pa. May 4, 2023) (plaintiff's claims for breach of fiduciary duty, civil conspiracy, and misappropriation of confidential information are preempted if arising from misappropriation of information that is found to be a “trade secret” under PUTSA); Advanced Fluid Sys., Inc. v. Huber, 28 F.Supp.3d 306, 324 (M.D. Pa. 2014) (claims for unfair competition, conversion, and civil conspiracy may be preempted if based on a “trade secret”).
However, summary judgment on preemption grounds is not warranted if the plaintiff's claim rests on confidential information that may not qualify for trade secret status. EMC Outdoor, LLC v. Stuart, No. 17-CV-5172, 2021 WL 1224064 (E.D. Pa. Mar. 31, 2021).
While Defendants are correct that the PUTSA may preempt some tort claims, as the Honorable Kim R. Gibson concisely explained:
With regard to Defendants' preemption argument ... it would be inappropriate to dismiss Plaintiff's common law claims at the summary judgment stage, because Plaintiff properly pleaded these claims in the alternative to its claim for misappropriation of trade secrets under the PUTSA. See PNC Mortg. [v. Superior Mortg. Corp.], 2012 U.S. Dist. LEXIS 25276, 2012 WL 628000, at *15 [(E.D. Pa. Feb. 27, 2012)] (“Tort claims that may or may not be preempted by the PUTSA are not dismissed at the summary judgment stage. Instead, the question of whether certain tort claims are preempted comes only after the jury has determined whether Defendants are liable for misappropriation of trade secrets.”) (citing Bro-Tech Corp. [v. Thermax, Inc.], 651 F.Supp.2d [378,] 412 (E.D. Pa. 2009)] (denying summary judgment on PUTSA claim and noting that tort claims predicated on misappropriation of trade secrets may be preempted if and when the defendants were found at trial to have misappropriated trade secret information)).
Avanti Wind Sys. v. Shattell, 2016 WL 3211990, at *18, 2016 U.S. Dist. LEXIS 75406, at *57 (W.D. Pa. June 9, 2016).EMC Outdoor, at *11.
Defendants concede that “liability for alleged trade secrets is a question of fact for the jury” and state that they “will litigate their defenses as to liability in trial.” ECF No. 158 at 4. Under these circumstances, Elite's common law alternative claims for injunctive relief may survive if a jury determines that the information at issue was misappropriated but does not constitute a “trade secret” under PUTSA. Thus, it is recommended that the Court deny Defendants' Motion for Partial Summary Judgment as to Counts III, VIII, and XII on preemption grounds.
e. Breach of Contract
Defendants argue that summary judgment should be entered in their favor as to Elite's breach of contract claims at Counts IV and VII because Elite cannot establish that Defendants breached any employment confidentiality agreement. Id. 158 at 9-11. Yet Defendants concede there are issues of fact related to: (1) whether Cunningham improperly emailed confidential information to Mitrecic and to their jointly used personal laptop after her termination; (2) whether Mitrecic improperly retained Elite's confidential information; and (3) whether she sought and obtained employment with an industry competitor. Id. 158 at 9, 11. Elite responds, and the Court agrees, that a reasonable jury could find that Mitrecic's alleged misconduct is a breach of its employment contracts with Cunningham and Mitrecic. ECF No. 161 at 6-8. Thus, it is recommended that the Court deny Defendants' Motion for Partial Summary Judgment as to Elite's breach of contract claims.
D. ELITE'S MOTION FOR SUMMARY JUDGMENT - MITRECIC (ECF No. 153)
1. Relevant Facts
These facts are not disputed by the parties unless otherwise noted. Mitrecic is a Black woman and was hired by Elite as a Logistics Account Coordinator on March 19, 2019. She was terminated on May 29, 2020. ECF No. 152 ¶¶ 6-8. During her employment, Mitrecic worked as a training facilitator and as a Logistics Account Coordinator Supervisor for the Northeast Region. Id. ¶¶ 9-11. Mitrecic agrees that Elite's employment records reflect that in August-September 2019, her supervisor spoke with her about performance issues that resulted in her reassignment from the Northeast Region to the smaller South/Southwest Region. ECF No. 150-2 at 59-63. Mitrecic's supervisors eventually implemented a progressive discipline program and addressed issues related to personal phone use and her failure to meet performance standards. Id. at 78 - 82; ECF No. 152 ¶ 29. In February 2020, Mitrecic was removed from a supervisory position and assigned to work as a Logistics Account Specialist I. Id. ¶ 12. Despite the change in roles, Mitrecic did not receive a pay cut. Id. ¶ 13. In her new position, she did not meet Elite's Key Performance Indicators (“KPIs”) related to checking the status of each scheduled delivery, identified as a “touch.” Id. ¶ 33; ECF No. 150-2 at 77.
The parties dispute whether the position changes and enforcement of performance standards were designed to push her out of the company because of her race. ECF No. 152 ¶¶ 30, 32, 35; ECF No. 150-2 at 82-85, 92. Mitrecic contends that upon her transfer to a smaller region, the larger region was assigned to a white employee with less experience and qualifications. ECF No. 150-2 at 89-91. In comparison to white co-employees, Mitrecic asserts she received assignments that made achieving KPIs very difficult, including handling inbound calls for several hours each day that were from drivers looking for work. Id. at 99. These calls would not permit her to record “touches” for existing or scheduled deliveries and were not included in her KPI data.
After her demotion in February 2020, Mitrecic received several emails related to her underperformance of KPIs. The emails reflected that she was far below target. ECF No. 152 ¶¶ 3640; ECF No. 152-2 at 111-121. Mitrecic contends that the data supporting the recorded KPIs was altered by Johnson or an Elite technology specialist at Johnson's direction to document reasons to fire her for underperformance. ECF No. 152-2 at 106 - 111, 121 - 124, 126 - 131. Her belief is based on a few instances when loads she initiated were rebooked to credit another employee and instances when she was identified as the cause of errors she did not make. Id. at 136 - 43, 167 -72.
Mitrecic asserts that Elite also treated her differently than white employees by altering her schedule and refusing to accommodate her scheduling requests. At one point, she was asked to work on a Sunday. Id. at 188-89. She requested a change in her start time from 8:00 a.m. to 9:30 a.m. Her request was initially approved by one supervisor, but then denied by a more senior supervisor. She agrees that other employees were also required to be at work at 8:00 a.m., but at least one white employee was not. Id. A white coworker was also allowed to work a different shift with a relative to accommodate driving to work together; a white employee was permitted to work remotely in Florida; a white employee was granted flexibility to work 6-day weeks to accommodate an anticipated extended leave; and a white married couple could work the same shift despite Mitrecic and Cunningham being told they were not allowed to work a shift together. Id. at 194 - 200. Mitrecic alleges that white employees were offered larger raises or promotions, and she points to two white women who were either offered more money or were promoted ahead of the norm. Id. at 200 - 03. Mitrecic also witnessed a co-employee make a “Hitler salute,” though she did not report the incident. Id. at 191-92.
On May 29, 2020, Mitrecic met with her supervisor and the human resources coordinator. Her supervisor told Mitrecic she “looked unhappy” and terminated her with severance pay. Id. at 204-05. By this time, Mitrecic had reported discrimination based on race to the EEOC. ECF No. 74 ¶ 268. She asked both men whether she was being terminated because she filed an EEOC complaint. ECF No. 152. They denied any relationship between Mitrecic's termination and her EEOC filing, and Mitrecic concedes that she has no basis to believe that anyone at Elite was aware of her pre-charge report of discrimination to the EEOC. Id. at 205 - 07.
Mitrecic acknowledges that before her termination, she sent text messages to co-workers reflecting that she “literally listen[s] to Podcasts all day and only open[s shipment] delays and escalations every now and then to see what's going on.” She also found humor in her supervisor's warnings regarding insufficient “touches” and KPIs, and told a coworker that she “officially did an inquiry to get an appointment with the EEOC.” Id. at 210 - 13. Mitrecic texted the co-worker that she “hope[d] [the human resources coordinator] gets notification of my filing before we return [to the office] because then when [her supervisor] fires me[,] I can say it's retaliation.” Id. Mitrecic also alleges that Elite knew of her close personal relationship with Cunningham and so searched his emails and ultimately terminated him to retaliate against her for filing an EEOC charge of discrimination. ECF No. 74 ¶¶ 290 - 292; 308-314.
Elite argues that the totality of the evidence is insufficient as a matter of law to support a nonspeculative claim of race discrimination or to establish that the reason for her termination was pretext for unlawful race discrimination. ECF No. 154 at 8. Elite also argues that Mitrecic cannot show that her termination in May 2020 was in retaliation for filing a preliminary report of discrimination with the EEOC in February 2020, or for filing an EEOC charge of discrimination on July 9, 2020, or that Elite's reason for her termination was pretext for retaliation. Id. at 10.
2. Discussion
a. Title VII and 42 U.S.C. § 1981 - Wrongful Termination and Demotion
Title VII provides that “[i]t shall be an unlawful employment practice for an employer-(1) to . discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's race, color, religion, sex, or national origin; or (2) to limit, segregate, or classify his employees ... in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual's race, color, religion, sex, or national origin.” 42 U.S.C.A. § 2000e-2.
42 U.S.C. § 1981 guarantees that “[a]ll persons within the jurisdiction of the United States shall have the same right ... to make and enforce contracts ... as is enjoyed by white citizens.” Section 1981 applies to at-will employment relationships. See Pryor v. Nat'l Collegiate Athletic Ass'n., 288 F.3d 548, 570 (3d Cir. 2002) (quoting with approval, Spriggs v. Diamond Auto Glass, 165 F.3d 1015, 1020 (4th Cir. 1999) (“An employer may breach a contract for non-discriminatory reasons; this, of course, would not give rise to a § 1981 claim. Conversely, an employer may act in perfect accord with its contractual rights-for example, when it terminates an at-will employee-but it may still violate § 1981 if that action is racially discriminatory and affects one of the contractual aspects listed in § 1981.”)). Section 1981 provides a narrower path for recovery than Title VII. A plaintiff pursuing a Section 1981 claim must prove that “but for” her race, she would not have suffered the complained of injury. Comcast Corp. v. Nat'l Ass'n of African Am.-Owned Media, 140 S.Ct. 1009, 1019 (2020).
At the summary judgment stage, employment discrimination claims under Title VII and Section 1981 are analyzed under the same burden-shifting analysis set forth in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802 (1973), unless there is direct evidence of discrimination. Fakete v. Aetna, Inc., 308 F.3d 335, 337 (3d Cir. 2002); Williams v. Tech Mahindra (Americas) Inc., 70 F.4th 646, 651 (3d Cir. 2023) (“the McDonnell Douglas burden-shifting framework for individual [employment discrimination] actions ... may be applied to claims under § 1981”); Castleberry v. STI Grp., 863 F.3d 259, 263 (3d Cir. 2017) (Section 1981 claims “are subject to the same analysis as discrimination claims under Title VII of the Civil Rights Act of 1964.”). “[D]irect evidence is overt or explicit evidence which directly reflects discriminatory bias by a decision maker.” Katchur v. Thomas Jefferson Univ., 354 F.Supp.3d 655, 665 (E.D. Pa. 2019) (internal quotation marks and citation omitted). Such evidence has been described as the proverbial “smoking gun.” Armbruster v. Unisys Corp., 32 F.3d 768, 778-79 (3d Cir. 1994) (abrogation on other grounds recognized in Showalter v. Univ. of Pittsburgh Med. Ctr., 190 F.3d 231, 235-36 (3d Cir. 1999)).
The Third Circuit confirmed in Williams that the requirement of “but-for causation” to sustain a Section 1981 claim “does not impinge in the least on the indirect methods of proof formulated by the Supreme Court for employment discrimination claims under Title VII of the Civil Rights Act of 1984 .,” including the McDonnell Douglas burdenshifting framework. Williams, 70 F.4th at 651.
Mitrecic does not point to any direct evidence of discrimination. Therefore, the Court must determine whether she can support her claims under the McDonnell Douglas burden-shifting analysis. Burton v. Teleflex Inc., 707 F.3d 417, 425 (3d Cir. 2013). Mitrecic bears the initial burden to establish a prima facie case of discrimination. She is required to show that “(1) she belongs to a protected class, (2) she was qualified for the position she occupied, and (3) she was subject to an adverse employment action (4) under circumstances that give rise to an inference of unlawful discrimination.” Hernandez v. Wal-Mart, 844 Fed.Appx. 598, 600 (3d Cir. 2021) (citing In re Trib. Media Co., 902 F.3d 384, 401 (3d Cir. 2018)).
If a prima facie case of discrimination is sufficiently established, the burden of proof shifts to the employer, who must present a legitimate, nondiscriminatory reason for its adverse employment decision. McDonnell Douglas, 411 U.S. at 802.
This burden is “relatively light,” and the employer need only “introduc[e] evidence which, taken as true, would permit the conclusion that there was a non-discriminatory reason for the unfavorable employment decision.'” Tomasso v. Boeing Co., 445 F.3d 702, 706 (3d Cir. 2006) (quoting Fuentes v. Perskie, 32 F.3d 759 (3d Cir. 1994)). If [the employer] meets this burden, the burden of production shifts back to [the employee] to demonstrate by a preponderance of the evidence that the reasons offered by the [employer] are pretext for discrimination. McDonnell Douglas Corp., 411 U.S. at 804; Fuentes, 32 F.3d at 763.
To establish pretext, [the employee] must “point to some evidence, direct or circumstantial, from which a factfinder could reasonably either (1) disbelieve the employer's articulated legitimate reasons; or (2) believe that an invidious discriminatory reason was more likely than not a motivating or determinative cause of the employer's action.” Tomasso, 445 F.3d at 706 (quoting Fuentes, 32 F.3d at 764) (internal quotations omitted); Doe v. C.A.R.S. Prot. Plus, Inc., 527 F.3d 358, 370 (3d Cir. 2008) (“Put another way, to avoid summary judgment the [employee's] evidence rebutting the employer's proffered legitimate reasons must allow a factfinder reasonably to infer that each of the employer's proffered non-discriminatory reasons was either a post hoc fabrication or otherwise did not actually motivate the employment action (that is, that the proffered reason is a pretext)”).Knox v. PPG Indus., Inc., No. 15-CV-1434, 2018 WL 1334828, at *3 (W.D. Pa. Mar. 15, 2018).
Elite contends that “Mitrecic cannot establish the second and fourth element of [a prima facie] race discrimination claim because she cannot establish that the circumstances of her termination give rise to an inference of unlawful race discrimination or that she was qualified for the position.” ECF No. 154 at 6. Elite also argues that the evidence of Mitrecic's poor performance supports a legitimate nondiscriminatory reason for its employment decisions, and that there is no evidence to support Mitrecic's claim that Elite's proffered reason is pretext for discrimination. Id. at 7-8.
Defendants respond that Elite cannot establish that Mitrecic was unqualified for the position from which she was demoted or the position from which she was terminated. ECF No. 163 at 11. Defendants also challenge Elite's purported legitimate nondiscriminatory reason for its employment decisions. To that end, Defendants contend Mitrecic was intentionally assigned work that would preclude her from achieving the required performance benchmarks, and that Elite's computer system permitted loads booked by Mitrecic to be reallocated to the last employee that “touched” or checked the load's status. Id. at 11-12. Thus, management could rig her statistics by having white employees “touch” a load. This evidence, while scant and subject to an assessment of credibility, is sufficient to permit a reasonable jury to infer that Elite's KPI data did not accurately account for Mitrecic's performance such that Elite's reliance on that data is pretext for discrimination. Defendants also assert that Mitrecic need not show that similarly situated white employees with poor performance statistics were retained or promoted because the record provides ample evidence of Elite's pattern of discrimination against Black employees. Id.
Upon review of the evidence presented, a reasonable jury could infer that Elite demoted and terminated Mitrecic because of her race, and could also conclude that Elite had a legitimate nondiscriminatory reason to terminate Mitrecic's employment for longstanding poor performance. As to pretext, Mitrecic's uncontradicted testimony of preferential treatment for white employees in scheduling and assignments, along with evidence of Elite's alleged undermining Mitrecic's performance statistics by assigning her incoming calls, is sufficient to permit a reasonable jury to conclude that an invidious discriminatory reason was more likely than not a motivating or determinative cause of its decision to demote and then to terminate Mitrecic. This evidence, viewed in the light most favorable to Mitrecic, also would permit a factfinder to conclude that but for racial animus, she would not have been demoted and then terminated. Thus, it is recommended that the Court deny Elite's Motion for Summary Judgment as to Mitrecic's wrongful termination claims under Title VII and Section 1981.
b. Retaliation
Mitrecic alleges a claim for retaliation under 42 U.S.C. § 1981. ECF No. 74 ¶ 307. Section 1981's prohibition against racial discrimination in private employment applies to “post-contractformation conduct,” including claims of retaliation. Doe v. Apria Healthcare Grp., Inc., 97 F.Supp.3d 638, 642, 646 (E.D. Pa. 2015) (citing CBOCS W., Inc. v. Humphries, 553 U.S. 442, 451(2008)); McClain v. Avis Rent A Car Sys., Inc., 648 Fed.Appx. 218, 222 (3d Cir. 2016)(citing CBOS, 553 U.S. at 445) (“Section 1981 prohibits racial discrimination and retaliation against those who have opposed such discrimination”).
A Section 1981 retaliation claim that relies on circumstantial evidence is “controlled by the three-step burden-shifting framework established in McDonnell Douglas.” Canada v. Samuel Grossi & Sons, Inc., 49 F.4th 340, 346 (3d Cir. 2022) (citing Moore v. City of Philadelphia, 461 F.3d 331, 342 (3d Cir. 2006)); McClain, 648 Fed.Appx. at 222 (quoting Anderson v. Wachovia Mortg. Corp., 621 F.3d 261, 268 (3d Cir. 2010) (“The burden of a § 1981 plaintiff is to ‘prove purposeful discrimination,' and the McDonnell Douglas framework assists in this endeavor by structuring the evidence on the issue of ‘whether the defendant intentionally discriminated against the plaintiff.'”)) .
Under the first step of that framework, a plaintiff “must establish a prima facie case by showing ‘(1) [that she engaged in] protected employee activity; (2) adverse action by the employer either after or contemporaneous with the employee's protected activity; and (3) a causal connection between the employee's protected activity and the employer's adverse action.'” Upon making these showings, the employer then, under step two, has the burden of producing evidence that “present[s] a legitimate, non-retaliatory reason for having taken the adverse action.” If the employer meets this burden, the burden then shifts “back to the plaintiff to demonstrate that ‘the employer's proffered explanation was false, and that retaliation was the real reason for the adverse employment action.'”Canada, 49 F.4th 346. A plaintiff also “must demonstrate that there had been an underlying section 1981 violation.” Castleberry, 863 F.3d at 267.
Once protected activity is established, “[i]n considering the second element of a prima facie case, the key inquiry is whether the alleged retaliation ‘well might have dissuaded a reasonable worker from making or supporting a charge of discrimination.'” Est. of Oliva ex rel. McHugh v. New Jersey, 604 F.3d 788, 798 (3d Cir. 2010) (quoting Moore, 461 F.3d at 340-41, and noting that “[a]lthough Moore is a Title VII retaliation case, the same standard applies in section 1981 retaliation cases.”). The third element of the prima facie case identifies what act, if any, a reasonable jury could link to a retaliatory animus. Id. “[T]o prove causation at the pretext stage, the plaintiff must show that she would not have suffered an adverse employment action ‘but for' her protected activity.” Young v. City of Philadelphia Police Dep't, 651 Fed.Appx. 90, 96 (3d Cir. 2016) (quoting Univ. Texas Southw. Med. Ctr. v. Nassar, 570 U.S. 338, 362 (2013)). “[A] plaintiff may rely on a broad array of evidence to demonstrate the causal link between [the] protected activity and the adverse [employment] action taken. She can meet this burden by proffering evidence of an employer's inconsistent explanation for taking an adverse employment action, a pattern of antagonism, or temporal proximity unusually suggestive of retaliatory motive. These are not the exclusive ways to show causation, as the proffered evidence, looked at as a whole, may suffice to raise the inference.” Carvalho-Grevious v. Delaware State Univ., 851 F.3d 249, 260 (3d Cir. 2017) (internal citations and quotation marks omitted).
Turning first to Mitrecic's burden to establish a prima facie retaliation case, she states that she lodged several complaints with her supervisor and the human resources director that Elite's scheduling and assignment changes were discriminatory based on her race. Within weeks of her complaints, she was demoted and ultimately terminated. ECF No. 163 at 6-9; ECF No. 150-2 at 71-99; ECF No. 74 ¶¶ 263-82. The Court agrees that a jury could conclude that Mitrecic's internal complaints are protected activity under Section 1981 because they placed Elite on notice of the specific kind of unlawful discrimination being alleged. Laymon v. Honeywell Int'l Inc., No. 2:20-CV-01938, 2022 WL 17546527, at *10 (W.D. Pa. Dec. 9, 2022) (citing Stone v. Trader Joe's Co., 186 F.Supp.3d 395, 403 (E.D. Pa. 2016)); Curay-Cramer v. Ursuline Acad. of Wilmington, Delaware, Inc., 450 F.3d 130, 135 (3d Cir. 2006) (“[Opposition to an illegal employment practice must identify the employer and the practice-if not specifically, at least by context.”). As to the second element, Mitrecic's demotion and termination are adverse employment actions sufficient to dissuade a reasonable worker from making a charge of discrimination. Finally, the timing of her demotion and termination shortly after her complaints regarding discriminatory treatment provides an evidentiary basis from which an inference of causation may be drawn. ECF No. 163 at 10; ECF No. 164-1 at 1, 6-12.
In turn, Elite satisfies its burden to present a legitimate, non-retaliatory reason for its decision to change Mitrecic's shift, work assignments, and ultimately to terminate her based on evidence of Mitrecic's longstanding poor work performance. This evidence includes Mitrecic's concession that she did not show up for most meetings scheduled by her supervisor in the Fall of 2019 to discuss complaints about her work, time spent on her phone conducting personal business, and her recorded “touches” per day that were far below the expected target. ECF No. 150-2 at 5366, 78-80, 113-120.
Mitrecic acknowledges Elite's documentation of work performance lapses. Id. at 82-84, 97; ECF No. 163 at 6-8. But as to pretext, she contends that there is sufficient evidence that she was scheduled to prevent earning “touches,” and that KPIs can and were manipulated to provide cover for demoting and terminating her because of her complaints of race-based discrimination. This evidence, while scant and subject to credibility determinations, is sufficient to raise material issues of fact that are properly resolved by a jury. Thus, it is recommended that the Court deny Elite's Motion for Summary Judgment Mitrecic's claims of retaliation related to schedule changes, demotion, and termination.
Mitrecic also presents a claim against Elite for post-termination retaliation. Her claim arises from Elite's investigation and termination of Cunningham, and Elite's alleged threats to pursue litigation against both Defendants because she refused to settle or discontinue her EEOC discrimination claim. ECF No. 74 ¶¶ 290-292; 307-08, 310-13.
Claims premised on retaliation against a person in a close personal relationship with an employee who has engaged in protected activity are within the scope of Title VII. See, e.g., Thompson v. N. Am. Stainless, LP, 562 U.S. 170 (2011). In Thompson, the United States Supreme Court observed that “[w]e think it obvious that a reasonable worker might be dissuaded from engaging in protected activity if she knew that her fiance would be fired.” Id. at 175. Title VII also provides protection against post-termination retaliation. See Robinson v. Shell Oil Co., 519 U.S. 337, 345 (1997) (the word “employees” in § 704(a) of Title VII includes former employees); see also Burlington N. & Santa Fe Ry. Co. v. White, 548 U.S. 53, 69-70 (2006) (the anti-retaliation provision of Title VII covers any action that is “likely to dissuade employees from complaining or assisting in complaints about discrimination,” and is not limited to acts that relate to the term of employment); Rocco v. Gordon Food Serv., No. CV 16-1290, 2017 WL 1355434, at *10 (W.D. Pa. Apr. 13, 2017); Muhammed v. City Philadelphia, 186 Fed.Appx. 277 (3d Cir. 2006); Shellenberger v. Summit Bancorp, Inc., 318 F.3d 183, 188-189 (3d Cir. 2003).
Elite has not argued that the alignment of treatment for claims under Title VII and Section 1981 should be disregarded in the context of a post-termination retaliation claim. Thus, it is recommended that the Court permit Mitrecic to proceed with her claim based on Elite's investigation, suspension, and termination of Cunningham, without prejudice to revisit this claim at trial.
See e.g., Kwong v. Health, No. 2:22-CV-00211, 2023 WL 3437302, at *4 (S.D. Tex. Apr. 25, 2023), report and recommendation adopted sub nom. Kwong v. CHRISTUS Health, No. 2:22-CV-00211, 2023 WL 3436100 (S.D. Tex. May 12, 2023). In Kwong, the district court held that a former employee stated a post-termination retaliation claim under § 1981 based on allegations that her employer destroyed her personal property after learning she filed a termination related EEOC charge of discrimination.
E. ELITE'S MOTION FOR SUMMARY JUDGMENT - CUNNINGHAM (ECF No. 155)
1. Relevant Facts
Cunningham brings his Section 1981 retaliation claim for three alleged adverse employment actions: (1) targeting and investigation into his handling of confidential trade information; (2) his September 18, 2020, suspension; and (3) his termination on September 30, 2020. ECF No. 162 at 3. These claims are examined using the same the three-step burden-shifting framework applied to Mitrecic's § 1981 retaliation claim. Canada, 49 F.4th at 346. Under this framework, Elite argues summary judgment is properly entered because Cunningham cannot establish a prima facie case of retaliation or that Cunningham's termination for misappropriation of confidential information was pretext for retaliation. ECF No. 156 at 6.
The record reflects that after nearly a year with Elite, Cunningham was promoted to logistics account specialist supervisor in February 2019. ECF No. 150-1 at 74-5. Elite closed its offices for the period March 2020 until May 18, 2020, because of the COVID-19 pandemic. During that time, Elite permitted Cunningham to take his office computer home. Id. at 112. He returned his computer when the office reopened.
Cunningham concedes that after he returned to the office, he emailed several documents to his personal email account, including a copy of Elite's carrier list. Cunningham states this was to facilitate working from home. Id. at 109. He agrees the information was sent without permission, but points to the parties' agreement that “Elite expects that its employees would use their personal resources in the course of their work for Elite.” Id. at 116; ECF No. 152 ¶ 88. Cunningham also concedes that he sent several employee KPI scorecards to his personal email account. He contends these records can be “doctored” or “fudged” by employees to improve their own statistics by removing a load originator's name and adding their own. ECF No. 150-1 at 137-39. He believes this happened to Mitrecic as well as other Black employees he supervised, but it did not happen to him. Id. at 142-152. He forwarded the information to his personal email to document his concerns.
Cunningham alleges that he discussed Elite's mistreatment of Black employees, including Mitrecic, with his supervisor and with Johnson. ECF No. 150-1 at 185 - 190, 201; ECF No. 60 ¶¶ 259-266, 270-271. Elite denies the characterization of these discussions or that some discussions ever took place. ECF No. 172 at 257-60; ECF No. 70 ¶¶ 259-266, 270-71. As examples of discriminatory treatment, Cunningham asserts that Elite assigned nearly all Black employees to the night shift, did not routinely award promotions to Black employees, did not include Black employees in off-duty events, and tolerated racist conduct in the office. ECF No. 150-1 at 169189, 201-02. Cunningham alleges that he and Johnson discussed his coworkers' belief that Cunningham and Mitrecic were elevated to supervisory roles as “tokens,” used by Elite to cover racism. Id. Cunningham also points to Elite's decision to demote Mitrecic because she did not “seem happy and smile.” Id. at 193. Cunningham does not believe this standard was imposed on employees of other races. Id. at 167. Cunningham contends that he was terminated because he did not report Mitrecic's EEOC complaint to Johnson and because Johnson found out Cunningham intended to file his own discrimination suit. Id. at 226-228.
The parties agree that Johnson received a report that Cunningham discussed “a lawsuit Mitrecic had with Elite” with another employee and “because of” that report, “Elite looked into Cunningham's emails.” ECF No. 152 ¶¶ 42-44. Cunningham contends Elite's decision to investigate him coincided with the day Mitrecic refused to settle her EEOC charge, and the EEOC transferred her charge to its investigation unit. ECF No. 60 ¶¶ 272, 275. Two days later, on September 18, 2020, Cunningham was called to a meeting about “documents which he emailed to himself,” and he was suspended. During his suspension, Elite examined the information Cunningham forwarded to his personal email, which included Elite's carrier list. Id. ¶¶ 47-48, 53. During an in-person meeting on September 30, 2020, Elite's human resources coordinator again asked Cunningham about the documents forwarded to his personal email. At the end of the meeting, Cunningham was terminated. Id. ¶¶ 49-51.
As to causation, Cunningham points to Johnson's deposition testimony that he “filed the instant lawsuit [on behalf of Elite] because Mr. Cunningham ‘ran his mouth' by informing Lam Nguyen that he was planning to sue for discrimination.” ECF No. 152 ¶ 83; ECF No. 151-1 at 2. Johnson disputes this characterization of events, but agrees that Elite began its review of Cunningham's emails after Lam reported a conversation with Cunningham regarding Cunningham's intended lawsuit against Elite. ECF No. 172 at 231-33, 239-41, 254.
2. Discussion
Upon review, the evidence presented by the parties reveals material issues of fact related to: (1) whether Cunningham suffered an adverse employment action because of his relationship with Mitrecic, his complaints of discriminatory treatment, and his threat to file a lawsuit on that basis; (2) whether Elite had a legitimate nondiscriminatory reason for investigating, suspending, and terminating Cunningham after learning Cunningham forwarded Elite's confidential information to a computer shared with Mitrecic; and, (3) whether Elite's reason is pretext for unlawful and intentional retaliation based on his protected activity if, as alleged by Cunningham, the information was not misappropriated or confidential. Thus, it is recommended that the Court deny Elite's Motion for Summary Judgment as to Cunningham's counterclaim for retaliation in violation of Section 1981.
F. CONCLUSION
For the foregoing reasons, it is respectfully recommended that the Court grant Defendants' Motion for Partial Summary Judgment, ECF No. 157, as to Elite's claims for compensatory damages arising out of its state law breach of contract and tort claims and as to Elite's claims for punitive damages and attorney's fees under the DTSA, but deny Defendants' Motion for Partial Summary Judgment as to Elite's remaining claims. It is further recommended that the Court deny the Motion for Summary Judgment filed on behalf of Elite and Johnson, ECF No. 153, as to Mitrecic's Title VII and Section 1981 counterclaims for discrimination and her Section 1981 claim for retaliation, and deny the Motion for Summary Judgment filed on behalf of Elite and Johnson as to Cunningham's Section 1981 counterclaim for retaliation, ECF No. 155.
In accordance with the Magistrate Judges Act, 28 U.S.C. § 636(b)(1), and Local Rule 72.D.2, the parties may file written objections in accordance with the schedule established in the docket entry reflecting the filing of this Report and Recommendation. Failure to timely file objections will waive the right to appeal. Brightwell v. Lehman, 637 F.3d 187, 193 n. 7 (3d Cir. 2011). Any party opposing objections may respond to the objections within 14 days in accordance with Local Civil Rule 72.D.2.