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Egan v. Delaware River Port Authority

United States Court of Appeals, Third Circuit

March 21, 2017

JOSEPH EGAN, Appellant

          Argued: January 12, 2017


          Michael J. Salmanson, Esq. [ARGUED] Scott B. Goldshaw, Esq. Salmanson Goldshaw, P.C. Counsel for Appellant

          Rachel Goldberg, Esq. [ARGUED] United States Department of Labor Counsel for Amicus Appellant

          Zachary R. Davis, Esq. [ARGUED] Danielle M. Dwyer, Esq. Stevens & Lee Counsel for Appellee

          Before: SMITH, Chief Judge, JORDAN and SHWARTZ, Circuit Judges.


          SHWARTZ, Circuit Judge.

         Plaintiff Joseph Egan brought suit against defendant Delaware River Port Authority, claiming that the Port Authority discriminated against him in violation of the Age Discrimination in Employment Act of 1967, 29 U.S.C. § 621 et seq. (the "ADEA"), and the Americans with Disabilities Act of 1990, 42 U.S.C. § 12101 et seq. (the "ADA"), and retaliated against him for exercising his right to take leave under the Family and Medical Leave Act of 1993, 29 U.S.C. § 2601 et seq. (the "FMLA"). A jury found that he was not the victim of discrimination or retaliation. Egan appeals, arguing that the District Court erred in: (a) refusing to give a mixed-motive jury instruction in connection with his FMLA claim; and (b) excluding testimony from one of Egan's co-workers.

         To resolve this appeal, we must examine the regulation upon which Egan's FMLA retaliation claim is based and determine whether there is any requirement that a plaintiff introduce direct evidence of retaliation to pursue a mixed-motive theory of liability. As we will explain, the Department of Labor (the "DOL") acted within its authority to promulgate the regulation and the regulation's language permits a plaintiff to rely on such a theory so long as the evidence, whether direct or circumstantial, permits a reasonable juror to conclude that the plaintiff's use of FMLA leave was a negative factor in the employer's adverse employment decision. Because the District Court erred in requiring Egan to provide direct evidence of retaliation, we will vacate the FMLA verdict and remand on that claim.

         As to Egan's ADA claim, because the Court acted within its discretion in excluding the testimony of Egan's co- worker, it did not commit reversible error impacting those claims, and we will affirm the verdict in favor of the Port Authority on those counts.


         Egan worked for the Port Authority from July 2008 until October 2012. He was hired as a Projects Manager for Special Projects. His primary responsibility was to manage fleet assets such as police vehicles, heavy equipment, and other vehicles. During his first two years of employment, only a small percentage of his work involved "economic development, " which concerned the Port Authority's efforts to improve the communities in surrounding areas. App. 150-51. He did not perform any economic development work after 2010.

         Egan reported to Deputy CEO Robert Gross until February 2012, when Michael Conallen replaced Gross. In March 2012, following a meeting with Conallen, Egan was transferred on special assignment to the Engineering Department and began reporting to Michael Venuto, the Port Authority's Chief Engineer. He was not given a new job description, and the duration of the assignment was not determined at that time.

         Egan has suffered from migraine headaches since a 1995 accident. Egan testified that the frequency of his migraines increased "almost instantaneously" with his transfer to the Engineering Department, and he applied for FMLA leave in April 2012. App. 77. The Port Authority approved Egan's request for intermittent FMLA leave. An issue arose in July 2012 because Egan had been reporting only the "approximate" number of hours he had worked, rather than the actual number of hours he had worked and took FMLA leave, and this discrepancy in Egan's reported hours "appear[ed] to be causing a hardship in his department." App. 612.

         Evidence concerning this alleged "hardship" was adduced during discovery. The parties deposed one of Egan's Engineering Department co-workers, Mark Green. Green testified that he overheard a conversation between Egan and Venuto in which Venuto complained, in an "upset and angry" tone, about Egan's ability to complete tasks because of health issues. App. 611. Egan sought to elicit testimony about this conversation from Green at trial but the District Court precluded it because Green was not a participant in the conversation and heard only part of it while walking by Egan's office and, to permit it, would be misleading to the jury.

         During trial, Egan did not recount such a conversation with Venuto. Instead, in response to the question, "Did [Venuto] ever say anything to you that indicated he was unhappy with the way you were using FMLA leave?", Egan testified:

A. Well, on one occasion he came into my office and wanted me to-he was angry. He was upset. I was there working and he said in the future he wanted me when I left the premises to wave to his assistant as I was leaving, and that is somewhat unusual so-
Q. Did you feel that that suggested that he was unhappy with the way you were using FMLA leave?
A. I think there was a connection and that's speculation on my part, but I felt that way.

App. 108-09. Egan also confirmed the accuracy of the following deposition testimony:

Did [Venuto] ever say anything to you that indicated that he was not happy with your usage of FMLA leave? Answer: No.

App. 109.

         In August 2012, Venuto informed Conallen that he would not request positions for Egan and another employee. In addition, in October 2012, the Port Authority decided to eliminate its economic development positions. Thereafter, and while he was on FMLA leave, Egan was informed that all "economic development functions" were being eliminated, his "temporary reassignment" to the Engineering Department was "deemed completed, " and he was terminated. App. 90.

         Egan filed a complaint alleging violations of the ADEA, ADA, and FMLA. After discovery and motion practice, the case proceeded to trial. During the trial, the jury heard testimony from Egan, Venuto, and Green, among others. After the presentation of the evidence, the District Court resolved a dispute concerning the jury instructions. At the Court's request, the parties presented a joint set of instructions that included the Third Circuit Model Civil Jury Instructions 10.1.3 and 10.1.2, respectively embodying the pretext and mixed-motive theories for proving discrimination.[1] The District Court denied Egan's request for a mixed-motive instruction for his FMLA retaliation claim, concluding that a mixed-motive instruction was not warranted because it should not be given in the FMLA context and, in any event, Egan had not presented direct evidence of retaliation.

         The jury returned a verdict for the Port Authority on all counts. Egan appeals, arguing that the District Court erred in denying his request for the mixed-motive instruction for his FMLA claim and, with respect to the ADA and FMLA claims, erred in precluding him from presenting Green's testimony about Egan and Venuto's conversation.



         We will first examine Egan's challenge to the District Court's ruling denying his request for a mixed-motive jury instruction in connection with his FMLA retaliation claim. When a party properly objects to a jury instruction, as here, "we exercise plenary review to determine whether the instruction misstated the applicable law." Franklin Prescriptions, Inc. v. N.Y. Times Co., 424 F.3d 336, 338 (3d Cir. 2005). In this case, this review entails determining whether the DOL properly exercised its authority to promulgate the regulation upon which Egan's retaliation claim is based, and, if so, whether it embodies a reasonable construction of the FMLA, including whether its inclusion of a mixed-motive approach to liability is permitted under Gross v. FBL Financial Services, Inc., 557 U.S. 167 (2009), and University of Texas Southwestern Medical Center v. Nassar, 133 S.Ct. 2517 (2013). If such a theory is permissible, then we must decide whether a plaintiff is required to present direct evidence to obtain a mixed-motive jury instruction.


         Our Court has premised liability for FMLA retaliation claims on a DOL regulation, 29 C.F.R. § 825.220(c), which embodies the DOL's interpretation of the FMLA. Until now, however, we have not been required to examine whether the regulation embodies a permissible construction of the FMLA to which we must defer under Chevron v. Natural Resources Defense Council, 467 U.S. 837 (1984). To make this determination, we must answer two questions:

First, always, is the question whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress. If, however, the court determines Congress has not directly addressed the precise question at issue, the court does not simply impose its own construction on the statute, as would be necessary in the absence of an administrative interpretation. Rather, if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency's answer is based on a permissible construction of the statute.

Id. at 842-43. The question of whether Congress has spoken on the question at issue is known as Chevron step one. If we determine that Congress has not spoken on the precise issue, then we proceed to what is known as Chevron step two, where we examine whether the interpretation of the statute as embodied in the regulation is reasonable.

         At Chevron step one, courts may "'employ [ ] traditional tools of statutory construction [to] ascertain[ ] that Congress had an intention on the precise question at issue.'" Zheng v. Gonzales, 422 F.3d 98, 112 (3d Cir. 2005) (quoting INS v. Cardoza-Fonseca, 480 U.S. 421, 448 (1987)). We "read the language in [the] broader context of the statute as a whole." Geisinger Cmty. Med. Ctr. v. Sec'y U.S. Dep't of Health & Human Servs., 794 F.3d 383, 391 (3d Cir. 2015). "If the statute's language is clear and unambiguous, we uphold the plain meaning of the statute." Cheruku v. Att'y Gen. of U.S., 662 F.3d 198, 202 (3d Cir. 2011).

         We thus turn to the language of the FMLA to determine whether it provides precise guidance as to whether the FMLA protects an employee from retaliation. Under the FMLA, it is "unlawful for any employer to interfere with, restrain, or deny the exercise of or the attempt to exercise, any right provided under this subchapter, " including the right to seek or use FMLA leave. 29 U.S.C. § 2615(a)(1). The FMLA also makes it "unlawful for any employer to discharge or in any other manner discriminate against any individual for opposing any practice made unlawful by this subchapter." Id. § 2615(a)(2).

         The statute does not specifically provide for a retaliation claim.[3] In light of Congress's language and goals, however, we cannot say that this silence means that Congress did not intend to protect those who invoke their FMLA rights from retribution. Congress chose words that broadly protect individuals who invoke their FMLA rights. For instance, in § 2615(a)(1), Congress made it "unlawful for any employer to interfere with . . . the exercise of . . . any right provided" by the FMLA which includes the right to take up to "12 workweeks of leave during any twelve-month period" if the employee has a "serious health condition that makes the employee unable to perform the functions of the position of such employee." 29 U.S.C. § 2612(a)(1)(D). This right could be interfered with by, for example, prohibiting the individual who has such a condition from being permitted to take such leave or by requiring the person to engage in significant work while on FMLA leave. Interference could also occur if an employee fears that he or she will be retaliated against for taking such leave. Thus, because the term "interfere with" is susceptible to multiple interpretations, and the statutory language does not directly address whether retaliation is among the actions an employer is prohibited from taking under the FMLA, Congress has not spoken on the "precise question" before us. Chevron, 467 U.S. at 842.

         Therefore, we move to Chevron step two to determine whether the DOL's interpretation of § 2615 to include prohibiting retaliation "is based on a permissible construction of the statute" to which we are required to defer. Id. at 843. As the Chevron Court instructed, "legislative regulations are given controlling weight unless they are arbitrary, capricious, or manifestly contrary to the statute." Id. at 844. "A court may conclude that a regulation is arbitrary and capricious only if the agency relied on facts other than those intended by Congress, did not consider an important aspect of the issue confronting the agency, provided an explanation for its decision which runs counter to the evidence before the agency, or is entirely implausible." Gardner v. Grandolsky, 585 F.3d 786, 790 (3d Cir. 2009) (citation and internal quotation marks omitted). Although our "inquiry into the facts is to be searching and careful, the ultimate standard of review is a narrow one, " and we are "not empowered to substitute [our] judgment for that of the agency." Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 416 (1971).

         Congress empowered the DOL to "prescribe such regulations as are necessary to carry out" the FMLA. 29 U.S.C. § 2654. The DOL identified § 2615(a)(1) as the source of the prohibition against retaliation and promulgated a regulation that made retaliation for exercising FMLA rights unlawful. The regulation, 29 C.F.R. § 825.220(c), states that "[t]he Act's prohibition against interference prohibits an employer from discriminating or retaliating against an employee or prospective employee for having exercised or attempted to exercise FMLA rights, " and further states that "employers cannot use the taking of FMLA leave as a negative factor in employment actions." 29 C.F.R. § 825.220(c).

         We conclude that § 825.220(c) is a reasonable interpretation of § 2615(a)(1). The DOL's interpretation is consistent with the purposes of the FMLA, which include "entitl[ing] employees to take reasonable leave for medical reasons" without interference. 29 U.S.C. §§ 2601(b)(2), 2615(a)(1); Bachelder v. Am. W. Airlines, Inc., 259 F.3d 1112, 1119 (9th Cir. 2001) (discussing legislative history and stating, among other things, that "[t]he FMLA provides job security to employees who must be absent from work because of their own illnesses"). Indeed, "the established understanding at the time the FMLA was enacted was that employer actions that deter employees' participation in protected activities constitute 'interference' or 'restraint' with the employees' exercise of their rights, " and "attaching negative consequences to the exercise of protected rights surely 'tends to chill' an employee's willingness to exercise those rights." Bachelder, 259 F.3d at 1124. To allow an employer to take an adverse employment action against an employee who takes FMLA leave would "undoubtedly run contrary to Congress's purpose in passing the FMLA." Bryant v. Dollar Gen. Corp., 538 F.3d 394, 401 (6th Cir. 2008). We agree with our colleagues in the Sixth and Ninth Circuits, as well as the Secretary of Labor, that "to permit employees to take leave from work for certain family and medical reasons and to return to the same or equivalent job at the ...

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