Opinion
Civil Action CV-12-175
12-17-2013
PATRICIA GALOUCH, Petitioner, v. STATE OF MAINE, DEPARTMENT OF PROFESSIONAL AND FINANCIAL REGULATION, Respondent.
ORDER ON MOTION FOR SUMMARY JUDGMENT
Before the Court is Defendant's Motion for Summary Judgment with respect to Patricia Galouch's ("Galouch") Complaint alleging violations of the Maine Human Rights Act, 5 M.R.S.A. §§ 4551-4633 and the Maine Whistleblowers' Protection Act, 26 M.R.S.A. §831 et. seq. The Motion for Summary Judgment was filed by Defendant, the State of Maine Department of Professional & Financial Regulation (the "DPFR" or the "Employer"), pursuant to M.R. Civ. P. 56. Defendant argues that it is entitled to judgment as a matter of law through the application of the doctrine of collateral estoppel because the issue of whether the State terminated Galouch's employment for retaliatory or discriminatory reasons was resolved in prior arbitration between the parties.
STATEMENT OF FACTS
Between May 6, 2006 and October 22, 2010, Galouch was employed as an Office Associate II by the Maine Bureau of Insurance, a State of Maine Agency within the DPFR. (S.M.F. ¶1.) Galouch is a member of the Maine State Employees Association, Local 1989 ("MSEA"). (S. Add'l M.F. ¶ 2.) Beginning in 2007, MSEA filed a series of grievances on Plaintiffs behalf relating to alleged harassment and retaliation by managers at the DPFR. (S. Add'l M.F. 12.) On March 10, 2009, Galouch and MSEA representatives reached an agreement with the State wherein Galouch agreed to dismiss or withdraw all past grievances and complaints in order to retain her position; the State agreed to improve her working conditions, wipe clean her record with regard to discipline, and pay Galouch's attorney's fees. (Am. Compl. ¶ 8.)
On two occasions in January 2010, Galouch reported that she believed certain State subcontractors had breached the terms of a court reporting service agreement. (S. Add'l M.F. ¶ 3.) The first report was made to her supervisor and the second report was made to DPFR's Contract administrator. (S. Add'l M.F. ¶ 3.) On January 28, 2010, Plaintiff was placed on administrative leave. (S. Add'l M.F. ¶ 4.) The State terminated Galouch's employment on October 22, 2010. (S. Add'l M.F. ¶ 4.)
On October 29, 2010, Galouch filed a charge with the Maine Human Rights Commission and on June 3, 2011, she obtained a right to sue letter. (S. Add'l M.F. ¶ 5.) On November 19, 2010, on Galouch's behalf, MSEA filed a grievance to challenge Plaintiffs termination. (S. Add'l M.F. ¶ 6.) An arbitration was held over eight days between March 22, 2012 and July 17, 2012. (S.M.F. ¶ 25.) The arbitrator was presented with an issue of whether, under the terms of the collective bargaining agreement between the State and MSEA, the State had "just cause" to terminate Galouch's employment. (S.M.F. ¶ 25.)
During the arbitration, multiple witnesses testified with respect to Galouch's work performance at DPFR and Galouch, who was represented by MSEA and its attorneys, had an opportunity cross-examine the witnesses. (S.M.F. ¶ 26-27.) Following the arbitration, the arbitrator issued an arbitration decision (the "Arbitration Decision") dated November 13, 2012, which made certain findings of fact and conclusions. (S.M.F. ¶ 29.) With respect to Galouch's job performance, the arbitrator's findings of fact included the following: "Galouch's performance problems included not getting along with co-workers and making errors that jeopardized the mission of the Bureau;" "Galouch was unable to maintain accurate docket filings for rate cases, which could have resulted in reversal of the Superintendent's decisions on appeal;" "Galouch also made errors in data entry, which could have led other states to take action against agents based on inaccurate information, creating potential liability issues for the Bureau;" "the job of legal secretary for the Bureau was beyond Galouch's abilities;" "Galouch was disorganized;" "Galouch was messy;" "Galouch was inattentive to details;" "Galouch argued with vendors about their contracts;" "Galouch argued with the Superintendent of the Bureau in public;" "Galouch was careless about how documents were sent out;" etc. (S.M.F. ¶¶ 8-23.) Because the State had not followed the principles of progressive discipline, the Arbitrator concluded that Galouch's termination was without just cause, but she upheld the termination on the ground that Galouch had failed to perform her duties as an employee of the Bureau of Insurance even adequately. (Armstrong Aff. Ex. A.)
On May 29, 2012, Galouch filed a complaint in the instant matter alleging violations of the Maine Human Rights Act, 5 M.R.S.A. §§ 4551-4633 and the Maine Whistleblowers' Protection Act, 26 M.R.S.A. § 831 et seq. Defendant moved to dismiss the action, but their motion was denied on February 15, 2013 by this Court's order holding that Galouch's complaint set forth sufficient facts to establish that she engaged in a protected activity under the Maine Whistleblowers' Protection Act.
STANDARD OF REVIEW
Summary Judgment
Summary judgment is appropriate when the Court's review of the parties' statements of material fact and cited record evidence indicates that there are no genuine issues of disputed material fact, and that the moving party is entitled to judgment as a matter of law. See Dyer v. Dep't of Transp., 2008 ME 106, ¶ 14, 951 A.2d 821 (citation omitted). Courts consider such evidence in the light most favorable to the non-moving party. See Beal v. Allstate Ins. Co. , 2010 ME 20, ¶ 11, 989 A.2d 733. A fact is material if it has the potential to impact the outcome of the case. See Parrish v. Wright, 2003 ME 90, ¶ 8, 828 A.2d 778 (citation omitted). An issue of fact is genuine when "sufficient evidence requires a fact-finder to choose between competing versions of the truth at trial." Id.
At the summary judgment stage, evaluation of employment discrimination claims made pursuant to the Maine Human Right Act involves a three-step, burden-shifting analysis. Daniels v. Narraguagus Bay Health Care Facility, 2012 ME 80, ¶¶ 14-15, 45 A.3d 722 (citing Cookson v. Brewer School Dep't, 2009 ME 57, ¶ 14, 974 A.2d 276); Whitney v. Wal-Mart Stores, Inc., 2006 ME 37, ¶ 9, 895 A.2d 309). First, an employee must establish a prima facie case of discrimination. Id. The burden then shifts to the employer to produce evidence of a legitimate, nondiscriminatory basis for its action. Id. (citing Doyle v. Dep't of Human Servs., 2003 ME 61, ¶ 15, 824 A.2d 48). "If the employer does so, the employee can survive a motion for summary judgment by presenting sufficient evidence from which a fact-finder could determine 'that either (1) the circumstances underlying the employer's articulated reason are untrue, or (2) even if true, those circumstances were not the actual cause of the employment decision, '" but merely a pretext. Id. (quoting Cookson, 2009 ME 57, ¶ 16, 974 A.2d 276).
In Levitt v. Sonardyne, Inc., Judge Woodcock of the U.S. District Court for the District of Maine clarified that a claim for whistleblower discrimination technically "arises under the [MHRA][, ]" see 5 M.R.S.A. §§ 4572(1)(A), 4621, which "'provides a right of action to . . . whistleblowers who have suffered retaliatory discharge.'" No. 2:12-cv-000320JAW, 2013 U.S. Dist. LEXIS 5658, at *25 n.1 (D. Me. Jan. 15, 2013) (quoting Costain v. Sunbury Primary Care, P.A., 2008 ME 142, ¶ 6, 954 A.2d 1051).
Collateral Estoppel
"Collateral estoppel prevents a party from relitigating factual issues already decided 'if the identical issue necessarily was determined by a prior final judgment, and the party estopped had a fair opportunity' and incentive to litigate the issue in the prior proceeding." Kurtz & Perry, P.A. v. Emerson, 2010 ME 107, ¶ 16, 8 A.3d 677 (quoting Efstathiou v. Efstathiou, 2009 ME 107, ¶ 7, 982 A.2d 339; Macomber v. MacQuinn-Tweedie, 2003 ME 121, ¶ 22, 834 A.2d 131).
The findings made by an arbitration panel, to the extent necessary to its determination, may have preclusive effect for purposes of collateral estoppel. Id. ¶ 18. A "valid and final award by arbitration has the same effects under the rules of res judicata ... as a judgment of a court" as long as the process leading to the award contains the essential elements of adjudication. Beal v. Allstate Ins. Co., 2010 ME 20, ¶ 14, 989 A.2d 733 (holding that an arbitration award had preclusive effect under the doctrine of collateral estoppel even though the award was not judicially confirmed). The essential elements of adjudication include:
(1) adequate notice;
(2) the right to present evidence and legal argument and to rebut opposing evidence and argument;
(3) a formulation of issues of law or fact to apply rules to specified parties concerning a specified transaction;
(4) the rendition of a final decision; and
(5) any other procedural elements as may be necessary to constitute the proceeding a sufficient means of conclusively determining the matter in question.Kurtz & Perry, P.A., 2010 ME 107, ¶19, 8 A.3d 677.
However, when an arbitration decision is issued with respect to a collective bargaining agreement, claim preclusion does not operate to bar the later filing of a statutory discrimination action brought before a court or specialized agency. See Alexander v. Gardner-Denver Co., 415 U.S. 36, 54 (1974); Barrentine v. Arkansas-Best Freight Sys., Inc., 450 U.S. 728, 744-745 (1981); McDonald v. West Branch, 466 U.S. 284, 292 & n. 13 (1984). In Gardner-Denver, the U.S. Supreme Court explained that when the State Legislature accords a statutory right (like a right accorded by the Maine Human Rights Act, 5 M.R.S.A. §§ 4551-4633 and the Maine Whistleblowers' Protection Act, 26 M.R.S.A. § 831 et seq), that public right is independent from and paramount to the ones guaranteed by a collective bargaining agreement. Gardner-Denver Co., 415 U.S. at 49-54.
DISCUSSION
The issue as presented requires the Court to first decide if Plaintiff is precluded from re-litigating the issue of whether the DPFR had a legitimate, non-discriminatory basis for Galouch's termination.
The Court agrees with Galouch that when an arbitration decision is issued with respect to a collective bargaining agreement, a union member, like Galouch, is not precluded from filing an independent discrimination action with a court or specialized agency simply because the union pursued an employment-related claim as a grievance under that collective bargaining agreement. See Alexander v. Gardner-Denver Co., 415 U.S. 36, 54 (1974); Barrentine v. Arkansas-Best Freight Sys., Inc., 450 U.S. 728, 744-745 (1981); McDonald v. West Branch, 466 U.S. 284, 292 &n. 13(1984).
Unless the collective bargaining agreement at issue "explicitly state[s]" that the parties agree to arbitrate statutory employment discrimination claims, in that case, the right to pursue such claims in a judicial forum would be deemed waived. See 14 Perm Plaza LLC v. Pyett, 556 U.S. 247, 129 S.Ct. 1456, 173 L.Ed.2d 398 (2009). See also Pulkkinen v. Fairpoint Commc 'ns, Inc., No. 09-CV-99-P-H, 2010 WL 716109, at *4-5 (D. Me. Feb. 23, 2010). No such waiver exists in the case before this Court; Article 45 of the CBA, in relevant part provides as follows:
However, this does not mean that the arbitrator's findings must be completely disregarded by the Court in subsequent discrimination litigation. On the contrary, there is a body of law suggesting that factual findings made by an arbitrator after a proper arbitration proceeding may be conclusive in a later-filed civil suit between the same parties (or their privies), including a situation in which the earlier arbitration involved a contractually based wrongful discharge claim and the later lawsuit involved a claim that the employee's discharge violated one or more state civil rights statutes. Cole v. W. Side Auto Employees Fed. Credit Union, 229 Mich.App. 639, 647, 583 N.W.2d 226, 230 (1998). See also Gimas v. Bialy, 20020099, 2008 WL 650488, at *5 (Mass. Super. Feb. 22, 2008) (holding that the arbitrator's findings were sufficient evidence of the plaintiff s prima facie case of discrimination in a later-filed civil suit); City of Boston v. MCAD, 39 Mass.App.Ct. 234, 239 (Mass. 1995) ("forum adjudicating a statutory claim of discrimination may receive an arbitration decision in evidence and accord it the weight that seems appropriate"), overruled on other grounds by Tr. of Health and Hosp. of the City of Boston, Inc. v. MCAD, 65 Mass.App.Ct. 329 (Mass. 2005). If the arbitration has been conducted fairly and thoroughly by a competent arbitrator, the court or agency hearing the statutory claim may wish to give the arbitration decision rather more weight than if the arbitration has been loose, cursory, and conclusory. See Gardner-Denver Co., 415 U.S. at 60 n. 21; City of Boston v. Massachusetts Comm 'n Against Discrimination, 39 Mass.App.Ct. 234, 239 (Mass. 1995). In the latter case, an arbitrator found that the employer had legitimate, nondiscriminatory reasons to terminate the plaintiff, an African-American corrections officer who violated multiple regulations and rules. But in a subsequent action filed with the Massachusetts Commission Against Discrimination, the plaintiff was able to show that the reasons were pretextual because white corrections officers who had engaged in similar conduct were not terminated. Id. at 237.
Here, because the findings of the arbitrator noted above were made as a result of what appears to be a fair and thorough proceeding (an eight-day judicial-type proceeding) conducted by a competent arbitrator, the Court could be justified in deciding at this stage of the proceedings that the findings should be given considerable weight and preclusive effect on the issue of whether DPFR had legitimate, non-discriminatory reasons to justify her termination.
However, the Court will not do so at this time. The Court cannot, as a matter of law, ignore the third-step of the Daniels burden-shifting analysis. DPFR is asking the Court to grant full summary judgment in its favor. The third step of the Daniels analysis - the issue of pretext -was not even addressed in arbitration, and no discovery has yet been conducted. The Court concludes that Galouch is entitled to an opportunity to generate evidence through discovery on the issue of pretext. Daniels, 2012 ME 80, ¶ 15, 45 A.3d 722. As noted at the time of oral argument, the Court would expect that evidence developed in discovery on the second and third steps of the Daniels analysis would tend to overlap significantly. Whether the evidence generated in discovery creates an issue or issues of material fact on the issue of whether DPFR had legitimate, nondiscriminatory reasons for termination can be decided at a later stage of these proceedings. The Court also specifically reserves ruling on whether and to what extent the arbitrator's findings of fact will be given preclusive effect on that issue.
Discrimination claims in general are often quite difficult to assess at the summary judgment stage and particularly, "the issue of whether an employee has generated an issue of fact regarding an employer's motivation or intent is one heavily dependent on the individual facts before the court." Id. (quoting Cookson, 2009 ME 57, ¶ 12, 974 A.2d 276).
CONCLUSION
The Court concludes that Defendant's Motion for Summary Judgment is premature.
The entry will be:
Defendant's Motion for Summary Judgment is DENIED without prejudice. After discovery is complete, both parties may file dispositive motions under the Rules.
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The State and MSEA-SEIU agree that any disputes out of the provisions of this Article may be processed through the grievance procedure contained in the Grievance Procedure Article subject to the State's right to have any such grievance considered at the appropriate level or steps by the State's Affirmative Action Officer. This provision shall not preclude other legal remedies provided by law.(PL's Opp'n to Def.'s Mot. Summ. J. 4 (emphasis added).)