Friday, January 17, 2014

How do we deal with adverse Section 75 findings at a discrimination trial?

When public employees are disciplined in New York, they face charges under Section 75 of the Civil Service Law, which entitles them to notice of the charges and a fair hearing. Employees often lose at the hearings, as any honest labor lawyer will tell you. What happens, then, when the employee sues management for discrimination? What effect does the Section 75 findings have on the case?

The case is Matusick v. Erie County Water Authority, decided on January 6. This case drew attention because the Second Circuit held for the first time that an employer cannot fire a white man because he was engaged to marry a black woman. But the case has another important point, relating to the quandary that I raised about Section 75 findings.

At trial, defendants "introduced evidence regarding Matusick's long and serious history of disciplinary problems." Basically, management introduced evidence that plaintiff was a slacker, among other things, watching football on TV during work hours, with the security camera blocked so no one could catch him in the act. The following is a candidate for footnote of the year:

In the memorandum, he reported that when he arrived, he found ╩║Matusick slouched in the dispatcher's chair loudly engaged in a football game he was watching on the overheard TV. . . . [Matusick] jumped‐up and looked out the window as he screamed out 'what kind of an asshole would call during the fourth quarter of the game.'╩║ Matusick had apparently been watching a now notorious Buffalo Bills game. See Mark Gaughan, Bills Battle Broncos to the Bitter End, BUFFALO NEWS, Oct. 27, 1997, at S3 (reporting that the Bills came back from a 20‐0 deficit in the fourth quarter, but ultimately lost on a field goal with 1:56 remaining in overtime).
The hearing officer found plaintiff guilty of workplace misconduct, and management adopted the hearing officer's recommendation to fire plaintiff. Now, when plaintiffs sue for discrimination, management will defend against the charges by arguing that it fired them for legitimate reasons. Section 75 dismissals certainly corroborate that defense. After all, hearing officer heard the evidence and made a factual finding on this. At trial, the judge decided that the adverse Section 75 findings did not prevent plaintiff from suing for discrimination, and he also told the jury that the Section 75 hearing "did not 'force' the jury to resolve any of the questions before it in any particular way." In other words, the jury did not have find as a matter of law that plaintiff had engaged in the misconduct.

Collateral estoppel principles prevent you from re-litigating the same issue in different forums. But since plaintiff did not litigate his discrimination allegations at the disciplinary hearings, that precise issue was not resolved at the hearing, and he could then challenge his termination as discriminatory at the federal trial. The district court therefore got it right in allowing the discrimination case to proceed. Even if management had legitimate reasons for firing plaintiff, he could still win the case if an illegitimate reason (such as racial discrimination) also motivated his termination. However, the district court should have told the jury that it had to find that plaintiff had in fact engaged in the misconduct that predicated the Section 75 charges. It failed to do so, and that was wrong, the Second Circuit says.

So what happens when the Court of Appeals finds that the district court committed an evidentiary error? It does not always mean the defendant gets a new trial. We proceed to "harmless error" analysis. Harmless error is cold water in the face of an appellate lawyer who survives the first hurdle of appellate review in proving that the trial court made a mistake. Sometimes the error does not matter. Over Judge Raggi's dissent, the Court of Appeals (Sack and Lohier) says the trial court's error did not affect the outcome of the trial. Yes, plaintiff was adjudicated under Section 75 to have engaged in workplace misconduct, and management was entitled to a jury instruction that plaintiff had done bad things at work. But at trial, the employer was able to put on evidence that plaintiff was a bad worker. The Court of Appeals says, "we think it highly unlikely that the jury would have found the defendants' evidence regarding Matusick's alleged misconduct unconvincing." The jury heard tons of evidence about the misconduct, and plaintiff's lawyer effectively conceded his client had engaged in misconduct by telling the jury in summation that other employees were not fired for similar misconduct. Despite the trial court's error, the jury most likely concluded that plaintiff had done bad things at work. But since the jury can reach that conclusion and still find that the plaintiff was discriminated against, the verdict is upheld.

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