Opinion
Case No. 02-13533 (AJG), Jointly Administered.
April 1, 2005
STINSON MORRISON HECKER LLP, Kansas City, MO, Attorneys for Reorganized Debtors.
Patricia A. Konopka, Esq., Amy R. Miller, Esq., Of Counsel.
RAUL ACOSTA, Pro Se.
MEMORANDUM DECISION, AFTER TRIAL, REGARDING COLORADO'S ANTI-DISCRIMINATION STATUTE WITH RESPECT TO THE POST-PETITION CLAIM ASSERTED BY RAUL ACOSTA
In this adversary proceeding, the Court is asked to determine whether the management involved in the decision to terminate the claimant's employment knew of the claimant's participation in the debtors' bankruptcy case, and if they did know of such participation, was it the basis for the claimant's employment termination. The Court finds that the claimant has failed to establish that the management, who made the determination that he would be among those employees that were part of the reduction in force that took place on January 26, 2004, knew of his participation in the bankruptcy proceeding. Therefore, the claimant failed to establish a claim for retaliatory/wrongful termination pursuant to COLO. REV. STAT. § 24-34-402.5.
In considering whether the claimant was terminated by management with knowledge of his participation in the debtors' bankruptcy case, the Court considers whether that management was directed by any other person(s) with such knowledge to select the claimant for the reduction in force.
I. Background
A. The Debtor
On July 21, 2002 (the "Commencement Date") and November 8, 2002, WorldCom, Inc. and certain of its direct and indirect subsidiaries (collectively, the "Debtor") commenced cases under chapter 11 of title 11 of the United States Code (the "Bankruptcy Code"). By orders dated July 22, 2002 and November 12, 2002, the Debtor's chapter 11 cases were consolidated for procedural purposes. During the chapter 11 cases, the Debtor had been operating its businesses and managing its properties as debtor in possession pursuant to section 1107(a) and 1108 of the Bankruptcy Code.
On July 29, 2002, the United States Trustee formed the Official Committee of Unsecured Creditors (the "Committee") of the Debtor.
By order dated October 29, 2002, this Court established January 23, 2003 as the deadline for the filing of a proof of claim against the Debtor (the "Bar Date"). By order dated October 31, 2003, the Court confirmed the Debtor's Modified Second Amended Joint Plan of Reorganization which became effective on April 20, 2004 (the "Plan"). Upon the effective date, the Debtor became MCI WorldCom Communications, Inc. ("MCI").
B. The Claimant
Raul Acosta (the "Claimant") began his employment with the Debtor on November 20, 1995, in Colorado Springs, Colorado. In 1999, the Claimant started working in the Mass Markets Billing Support Group where he was a production support analyst/systems support analyst. The Claimant remained with the Debtor until January 26, 2004 when the Debtor terminated his employment. The Claimant was an at-will employee during his entire employment period with the Debtor.
C. Procedural History
On November 1, 2003, the Court received and docketed a letter from the Claimant regarding an employment dispute he had with the Debtor (the "Letter") which did not request a hearing regarding the dispute. Sometime thereafter, the Claimant called the Court and requested a hearing regarding the Letter as an administrative claim. On January 29, 2004, the Debtor filed an objection to the Claimant's request that the Letter be treated as an administrative claim. The Court then scheduled a hearing regarding the Letter on February 3, 2004.
At the hearing, the Court denied the Claimant's Letter as an administrative claim without prejudice to him filing a pre-petition unsecured claim because the conduct at issue occurred during the pre-petition period. The Court stated that if the Claimant filed the pre-petition claim it would be treated as having been filed on November 1, 2003, the date the Letter was docketed with the Court. Further, it would be subject to the Debtor's right to raise any objections, including its timeliness since November 1, 2003 was after the Bar Date. Moreover, at the same hearing, the Claimant argued that the Debtor had terminated his employment (post-petition) because he had filed the Letter with the Court. The Court stated that if he (the Claimant) believed he had been retaliated against, it would be a separate claim (different from the claim set forth in the Letter) and that it would be considered as a request for payment of an administrative/post-petition claim because the alleged improper conduct occurred post-petition.
Thereafter, on February 20, 2004, in response to the Court's above determination, the Claimant filed the pre-petition claim (the "Pre-Petition Claim") and a post-petition claim for retaliatory/wrongful termination of the Claimant's employment ("Administrative Claim"). The Administrative Claim is based upon the alleged post-petition employment termination of the Debtor in retaliation of the Claimant's participation (i.e. the Letter and other communications with the Court) in the Debtor's bankruptcy case ("Case Participation"). On March 31, 2004, the Debtor filed an Objection to the Claimant's said claims. On April 1, 2004, the Committee filed a Joinder in Support of the Debtor's Objection.
The Committee, in its Joinder in Support of the Debtor's Objection, seems to have inadvertently referred to the Claimant's retaliatory/wrongful termination claim as a "pre-petition" claim rather than a "post-petition" claim.
The Court held a hearing regarding the Pre-Petition Claim and Administrative Claim on April 6, 2004, in which it took the Pre-Petition Claim under advisement with respect to the timeliness of the claim, and scheduled a hearing for the Administrative Claim for July 13, 2004.
On April 21, 2004, a Scheduling Order for the Administrative Claim was entered requiring that any dispositive motions were due on or before June 25, 2004. The Debtor filed a motion for summary judgment with respect to the Claimant's Administrative Claim on June 24, 2004. Any objection to the Debtor's motion was due on or before July 8, 2004. On July 8, 2004, the Claimant filed a motion for summary judgment, which appears to be in the context of an objection to the Debtor's motion for summary judgment rather than a request for summary judgment.
On December 14, 2004, the Court read a decision into the record regarding the Debtor's motion for summary judgment. The Debtor's motion for summary judgment was granted with respect to the claim for retaliatory/wrongful termination under 11 U.S.C. § 525(b), any other federal statute, and Colorado common law. However, the Debtor's motion for summary judgment was denied with respect to the retaliatory/wrongful termination claim construed under COLO. REV. STAT. § 24-34-402.5. A trial was held on February 25, 2005 regarding the Claimant's retaliatory/wrongful termination claim pursuant to COLO. REV. STAT. § 24-34-402.5. This memorandum decision addresses the issues tried on February 25, 2005.
III. Facts
In 1999, the Claimant complained to the Debtor's human resources manager, Marsha Bowen, that he had been promised a promotion. Ms. Bowen investigated the Claimant's complaint and informed him that he would not be promoted.
In June 2003, as a result of a reduction in employees, the Debtor needed its employees to cross-train and perform multiple tasks in order to perform the steady workload. As a result, the Claimant and other team members were assigned to perform a new task called "parallel testing." Parallel testing required that each month code and rate changes be programmed into the billing system for application to the next month's billing. Parallel testing allowed the Debtor to test against live data that could uncover problems they may not see in the testing environment with "mocked up data." Because the source data was the production data, parallel testing required the production support analysts to be extremely careful when running a test of the production environment.
While performing parallel testing, the Claimant made multiple serious errors, which caused his manager, Annette Hagopian, to become concerned with his performance. For instance, in June 2003 the Claimant deleted live customer data from the previous month's database, and because the Claimant did not fix the problem or recreate the data, Ms. Hagopian did. Also, in August 2003, the Claimant did not verify the setup of the parallel test, which caused numerous errors to occur. Ms. Hagopian and the Claimant met regarding these parallel testing performance issues. During this meeting, the Claimant stated that he was too busy with his primary production support tasks to perform parallel testing, and he felt parallel testing was not valuable. Thereafter, the Claimant was removed from parallel testing and was not assigned another task outside of production work because Ms. Hagopian could not identify one he would be able to perform. Despite Ms. Hagopian's concerns with the Claimant's parallel testing performance, she did not file a formal complaint regarding his performance to the human resources department. However, Ms. Hagopian did send an email to her manager, Dave Morgan, regarding this issue.
The Claimant's last formal appraisal in 2002 by Ms. Hagopian depicted the Claimant as a solid performer who could be relied upon to use good judgment, pick a satisfactory approach and proceed with few errors. In addition, Ms. Hagopian described the Claimant as exceeding the requirements of the position, understanding the operations of the group, and pitching in and taking on extra tasks where needed. Ms. Hagopian testified that she gave him such an evaluation because during the 2002 year she saw improvements in his analytical skills. In the same appraisal, Mr. Morgan commented that the Claimant was a great pleasure to work with, and he appreciated his dedication and enthusiasm. However, Ms. Hagopian testified that although she saw improvements in his analytical skills in 2002, she continued to have concerns about his analytical abilities in terms of his reasoning for resolving problems, finding their root cause, and developing solutions himself through utilization of available reference materials and software tools in 2003.
In September 2003, the Claimant filed a complaint with the Debtor's Ethics Office regarding his dissatisfaction with not being promoted in 1999 ("Ethics Complaint"). The Ethics Office in turn forwarded the Ethics Complaint to the human resources department believing they were the best equipped to handle the issue. Chuck Trusty, the vice president of the human resources department, assigned the Ethics Complaint to Ms. Bowen who again reviewed the Ethics Complaint and informed the Claimant that he would not be promoted. In investigating the Ethics Complaint, Ms. Bowen contacted Ms. Hagopian regarding the promotion issue.
On November 1, 2003, the Letter was docketed by the Court regarding the above employment dispute between the Debtor and the Claimant. Ms. Hagopian testified that in late December or very early in January, Mr. Morgan informed her that the company was realigning its business and, as a result, some employees would lose their jobs. She was further informed that a member of her team would be included in the reduction in force. Ms. Hagopian testified that she was not happy with this reduction in force because of the impact it would have on her group. Mr. Morgan testified that Ms. Hagopian was concerned about losing resources, and how she would be able to maintain the same level of workload with the loss of a team member. Mr. Morgan instructed Ms. Hagopian to rank her team members in preparation for this reduction in force. Ms. Hagopian ranked each member in her group, including the Claimant, based on the following factors: (1) the employee's performance; (2) the employee's contribution; (3) the employee's ability to learn new tasks; and (4) how the business would be impacted if the employee left.
Ms. Hagopian testified that based on the Claimant's performance, and the performance of the other team members, she ranked Claimant last in the group because (1) the Claimant was the only team member not performing either an additional cross-training task or a task outside of the production support environment; (2) the problems he had and his resistance to perform parallel testing; and, (3) by inference, she testified that others on her team had stronger analytical skills than the Claimant. Further, she testified that she was the only person involved in the process of ranking the Claimant. During the time Ms. Hagopian was involved in ranking her team members, she testified that she was unaware of the Claimant's Case Participation. She had never been to the Court's website between September 26, 2003 and January 26, 2004, nor did she use or think about the Claimant's Ethics Complaint in her ranking decision. Thereafter, Ms. Hagopian forwarded her ranking to Mr. Morgan who was to make the final decision as to who was to be included in the reduction in force.
Mr. Morgan testified that from the time the Debtor filed for bankruptcy in 2002, there had been reductions in employees in the Mass Markets IT Department from 1,500 employees to about 200 currently, due to reductions in force, voluntary terminations and transfers. In 2003, the Debtor was experiencing continuing financial difficulties and decided to cut costs by having a reduction in force in January 2004. The Claimant, in addition to other employees, was included in this reduction in force and was terminated on January 26, 2004.
Ms. Hagopian testified that when she became manager of the Mass Markets Billing Support Group in June of 2000 there were 13 production support analysts, and that from that time up to and following the Claimant's termination, other employees including herself were laid off because of the reductions in force. Mr. Morgan testified that he in consultation with his director, Sanjay Bagai, were the persons who decided to include the Claimant in the reduction in force after reviewing Ms. Hagopian's team ranking. They decided that the Claimant was the least valuable and would have the least impact on the business across all of the areas of production support, as well as reducing operating costs. No one else was involved in making the decision to terminate the Claimant. Mr. Morgan testified that at the time that he made the decision to include the Claimant in the reduction in force, he was not aware of the Claimant's Case Participation. In addition, he testified that he had never been contacted by the ethics office, was not aware of the Court's website or that the Debtor retained a copy of the Court's website on its internal server. Moreover, Mr. Morgan testified that he had never been in contact or met with any counsel of the Debtor and that to the best of his knowledge his director had never met with any of the Debtor's counsel regarding the Claimant. Mr. Bagai stated in his affidavit that he also was unaware of the Claimant's Case Participation.
Ms. Bowen testified that she did not participate in any way in the decision to include the Claimant in the reduction in force. Although Ms. Bowen testified that she was made aware of the Claimant's Case Participation through the Debtor's counsel in mid January, she did not discuss that information with any person involved in the decision to include the Claimant in the reduction in force. Although Ms. Bowen provides training via teleconference to the managers before layoffs, she does not recall whether such training was given to Mr. Morgan or Ms. Hagopian. Mr. Trusty signed the severance letter given to the Claimant confirming his termination and advising him of available benefits. Following these activities, the Claimant filed the Administrative Claim.
IV. Discussion
COLO. REV. STAT. § 24-34-402.5 addresses the termination of at-will employees for engaging in an otherwise legal activity outside of their employment. This Court has not found any Colorado cases that interpret the substantive portions of the statute, nor does the statute's legislative history provide clarity to the substantive portions that relate to the issues in this case.
This statute has generally been described as a "life style" protection statute, meaning that it protects employees in their "off-the-job-privacy." Gwin v. Chesrown Chevrolet, Inc., 931 P.2d 466, 470 (Colo.App. 1996). In Marsh v. Delta Air Lines, Inc., 952 F. Supp. 1458 (D. Colo. 1997), the court stated that "the law was meant to provide a shield to employees who engage in activities that are personally distasteful to their employer, but which activities are legal and unrelated to an employee's job duties." Id. at 1462. "Colorado's statute . . . encompass[es] any lawful activity off the premises of the employer during nonworking hours" and is "one of the broadest of its kind." See Jessica Jackson, Comment, Colorado's Lifestyle Discrimination Statute: A Vast and Muddled Expansion of Traditional Employment Law, 67 U. COLO. L.REV. 143-44 (1996); 1B CO. Prac., Methods of Practice § 19.21, *2.
See Jessica Jackson, Comment, Colorado's Lifestyle Discrimination Statute: A Vast and Muddled Expansion of Traditional Employment Law, 67 U. COLO. L.REV. 143 (1996).
Under a "plain meaning" analysis, the statute would seem to apply to a claim of wrongful/retaliatory termination of an at-will employee for engaging in the legal activity of participating in the bankruptcy case of an employer, where such legal activity off the premises of the employer is unrelated to the job duties of the employee. COLO. REV. STAT. § 24-34-402.5 provides in pertinent part, that:
Since the facts presented do not state otherwise and the parties do not dispute this, the Court will presume that the legal activities, the Case Participation, occurred off the premises of the employer.
This statute would be applicable assuming that this Court would be a "district court of competent jurisdiction" as required by COL. REV. STAT . § 24-34-402.5(2)(a) (Supp. 2004).
(1) It shall be discriminatory or unfair employment practice for an employer to terminate the employment of any employee due to that employee's engaging in any lawful activity off the premises of the employer during nonworking hours unless such a restriction:
(a) Relates to a bona fide occupational requirement or is reasonably and rationally related to the employment activities and responsibilities of a particular employee or a particular group of employees, rather than to all employees of the employer; or
(b) Is necessary to avoid a conflict of interest with any responsibilities to the employer or the appearance of such a conflict of interest.
There is a two-pronged analysis under this section: (1) did the employer terminate an employee for participation in a lawful activity; and (2) was there a statutory exception to justify that termination. Marsh, 952 F. Supp. at 1462 (citing Gwin, 931 P.2d at 470). Neither of the two exceptions set forth above are applicable in the present case.
The Debtor conducted a reduction in force in which the Claimant's employment was terminated. The Claimant alleges that the Debtor selected him for the reduction in force because of his Case Participation. It is undisputed that the Claimant's Case Participation is a lawful activity and there is no evidence to suggest nor do the parties dispute that such lawful activity occurred off the premises of the Debtor during non-working hours. Thus, the ultimate issue for trial was whether the Debtor terminated the Claimant's employment because of his Case Participation. The Court concludes that the Claimant has failed to prove that the management involved in the decision to terminate him knew of his Case Participation and terminated him for such participation.
The Claimant disputes Ms. Hagopian's ranking of whether or not he was the weakest member on the team and argues that Ms. Hagopian's evaluation was subjective. In support of these contentions, the Claimant argues that he had more problem management records ("PMR tickets") than anyone else on the team. PMR tickets are documentations of each problem encountered in the environment. The production support analysts would document inside the ticket, the problem, description, and the resolution, and then close the ticket. All of the production support analysts were responsible for closing tickets. However, Ms. Hagopian testified that in her opinion the Claimant did not have more production work than the other members of her team "because of the fluctuation of problems, a problem could be started the day before or in the middle of the night where the analysts might do the initial analysis and call for help in terms of having to escalate to another group. It might get pulled over to the next day, and usually the person who may pick it up the next day would end up closing the ticket. We also had instances where we had a larger problem that could affect many, many, many things, and the analyst the next day or during the day. It wouldn't mean that he didn't work on every single problem, but he might have sat down and closed all the tickets for it because it was all related." The Claimant also argues that he was not the weakest member because he was given additional duties outside of his production support work. For instance he prepared the weekly reports about the jobs for Ms. Hagopian's review, the PMR closure reporting in 2003, and he also worked on various other projects.
At best, the Claimant has shown that he was a good worker. However, Ms. Hagopian's evaluation is based on her business judgment of the Claimant's parallel performance, analytical skills and lack of working on cross-training tasks outside of his primary production work, all of which were not disputed by the Claimant. In addition, Ms. Hagopian testified that she does not recall other members of the team complaining about their cross-training tasks, and the Claimant was the only team member not fitting the Debtor's business needs of performing multiple tasks outside of production work in order to meet the steady workload. The Claimant stated that he did not feel that parallel testing was valuable which lead Ms. Hagopian to feel that the "Claimant did not understand the function of her team."
The Claimant failed to develop needed skills in various other areas due to company downsizing and only performed his primary production support tasks. Ms. Hagopian's business judgment in ranking the Claimant last is not a subject of review for the Court. Furthermore, Ms. Hagopian testified that she did not want to lose any of her workers but was forced to do so. More importantly, however, the Court agrees with the Debtor in that the Claimant does not dispute the factors used in the ranking or provide any evidence to dispute that, in fact, those were the factors she used, but instead the Claimant seems to argue that she should have considered other factors.
The Debtor, also, correctly argues that Ms. Hagopian's ranking is not the issue here. What is at issue is whether the management who terminated the Claimant's employment knew of his Case Participation and terminated his employment because of such participation, neither of which was established here. Ms. Hagopian testified undisputedly that she had no knowledge of the Claimant's Case Participation at the time she performed her ranking, nor at the time that Mr. Morgan informed her that the Claimant had been selected for the termination, nor when the Claimant was notified that he was being laid off. The Claimant did not present any evidence to the contrary.
Furthermore, Mr. Morgan testified that the Claimant was not the first reduction in force that impacted this group and that from the time of the bankruptcy until the present five or six employees had lost their jobs in this group. Further, there were employees who were laid off both before and after the Claimant. In addition, Mr. Morgan testified repeatedly that in assessing who to include in the reduction in force he took into account how many tasks each employee performed, their workload, and their salary. Further, Mr. Morgan testified that he would keep people that performed multiple roles and can take over other tasks, versus someone that performed one role because of the cost benefit to the company.
Lastly, Mr. Morgan testified undisputedly that he has never been contacted by the ethics office, and was not aware of the Court's website or that the Debtor retained a copy of the Court's website on its internal server. Moreover, Mr. Morgan testified undisputedly that he had never been in contact with or met with any counsel of the Debtor and that to the best of his knowledge his director had never met with any of the Debtor's counsel regarding the Claimant. The Claimant did not present any evidence to the contrary.
The only person who knew of the Claimant's Case Participation was Ms. Bowen. However, Ms. Bowen undisputed testimony was that she did not participate in any way in the decision to include the Claimant in the reduction in force. In addition, she testified that she did not discuss her knowledge of the Claimant's Case Participation with any person involved in the decision to include the Claimant in the reduction in force. The Claimant did not present any evidence to the contrary.
The Claimant also makes the argument that because Mr. Morgan and Matthew Pachman of the Ethics Office, and the counsel for the Debtor reside in the same office, "it is not a leap of faith to concur that the [Debtor] retaliated against [him]." However, there was no evidence presented at trial to support such speculation. Therefore, the Court concludes that based on the evidence presented, the management that was involved in the decision of whether to terminate the Claimant had no knowledge of the Claimant's Case Participation.
On or about February 18, 2005, the Court had a pre-trial telephonic conference (off the record) with the parties to discuss procedural issues. During the conference, the Claimant asked if his two witnesses could appear by phone. The Debtor objected to the telephonic testimony of these witnesses on the grounds that the Court would not be able to properly assess their credibility because they were not in person. The Court stated to the Claimant that it was likely that at the hearing the Court would sustain the Debtor's objection. The Claimant then asked that the witnesses' previously submitted affidavits be submitted in lieu of their live testimony. The Debtor objected to the submission of the affidavits because the Debtor would not have the opportunity to cross-examine and, as stated above, would not consent to the examination being done telephonically. The Court stated to the Claimant that it was likely that at the hearing the Court would sustain the Debtor's objection on this issue as well.
V. Conclusion
Based on the foregoing, the Claimant has failed to prove that the management who terminated him knew of his Case Participation or show that if they did know, used such knowledge to terminate his employment. It is unclear from COLO. REV. STAT. § 24-34-402.5 whether the employer has the burden to establish that it did not terminate an employee because of the employee's engagement in lawful activity off the premises of the employer during non-working hours. Nonetheless, the Debtor has established that they selected the Claimant for legitimate business reasons, and the management involved in the decision to terminate the Claimant did so without knowledge of the Claimant's Case Participation. Therefore, the Claimant has not established a claim pursuant to COLO. REV. STAT. § 24-34-402.5.
The Debtor should settle an order consistent with this decision and incorporate into that order the Court's decision that was read into the record on December 14, 2004.