In A.C. Widenhouse, Inc. v. Equal Employment Opportunity Commission, No. 1:11-cv-00498-TDS-JEP (4th Cir. June 24, 2014).
At trial, the district court, consistent with existing precedent, instructed the jury that it should find defendant employer liable for retaliatory discharge under Title VII of the Civil Rights Act of 1964 if it found that retaliation for plaintiff employee's protected activity of reporting racial discrimination was a motivating factor in his termination. EEOC v. A.C. Widenhouse, Inc., 1:11-cv-00498-TDS-JEP (4th Cir. June 24, 2014) [hereinafter EEOC v. A.C. Widenhouse] (emphasis added). The jury found defendant liable. After the district court issued its judgment, the United States Supreme Court decided University of Texas Southwestern Medical Center v. Nassar, holding that "a plaintiff making a retaliation claim under [Title VII] must establish that his or her protected activity was a but-for cause of the alleged adverse action by the employer," and not only a motivating factor. 133 S. Ct. 2517, 2534 (2013) (emphasis added).
On appeal, the Fourth Circuit affirmed the district court's decision, finding that the instructional error was not prejudicial; in other words, the error did not affect the defendant's substantial rights. The Court relied on its decision in United States v. Hager, which held that the jury's verdict sheet may constitute "evidence to the contrary" of the Court's typical assumption that the jury followed the jury instructions. EEOC v. A.C. Widenhouse at 10 (quoting Hager, 721 F.3d 167, 189 (4th Cir. 2013). The jury's verdict sheet showed that it found plaintiff proved "he was terminated from his employment by the defendant because of his opposition to activity made unlawful under Title VII," and that there were no lawful reasons for the termination. Id. (quoting J.A. 2378 (emphasis added)). In effect, the jury would have found defendant in violation of Title VII, even under Nassar's "but-for" standard.
Appellee Contonious Gill ("Gill") is an African-American man who, while employed as a truck driver by Appellant A.C. Widenhouse, Inc. ("Widenhouse"), was subjected to frequent racial slurs, racially charged jokes and comments, and displays of nooses and confederate flags. Gill repeatedly reported the incidents to management, but no action was taken. In June 2008, he became ill during work and was terminated after he failed to make a delivery. EEOC v. A.C. Widenhouse, Inc., 1:11-cv-00498-TDS-JEP (4th Cir. June 24, 2014) [hereinafter EEOC v. A.C. Widenhouse], available at http://www.ca4.uscourts.gov/Opinions/Unpublished/131389.U.pdf.
The EEOC filed a complaint in the Middle District of North Carolina, on behalf of Gill and another African-American Widenhouse employee Robert Floyd, alleging hostile work environment. Gill intervened, brining additional claims for racial harassment, racially discriminatory discharge, and retaliatory discharge in violation of 42 U.S.C. § 1981 and Title VII of the Civil Rights Act of 1964.
At the close of the liability phase of the bifurcated trial, the district court instructed the jury that it should find Widenhouse liable for Title VII retaliation if retaliation for Gill's protected activity of reporting discrimination was a "motivating factor" in his termination. EEOC v. A.C. Widenhouse at 4 (emphasis added). Widenhouse did not object to the instruction. Additionally, and over Widenhouse's objection, the court instructed the jury to determine whether Widenhouse should be liable for punitive damages if it were found liable for the substantive counts of the complaints. The jury found Widenhouse liable for all claims and awarded Gill compensatory and punitive damages as well as attorney's fees and costs.
After the district court issued its judgment, the Supreme Court decided University of Texas Southwestern Medical Center v. Nassar, 133 S. Ct. 2517 (2013), which held that to make a retaliation claim under Title VII, the plaintiff must "establish that his or her protected activity was a but-for cause of the alleged adverse action by the employer," rather than only a motivating factor. EEOC v. A.C. Widenhouse at 5 (quoting Univ. of Tex. Sw. Med. Ctr. V. Nassar, 133 S. Ct. 2517, 2534 (2013)).
Widehouse timely appealed, alleging that it was entitled to a new trial on all claims as a result of the district court's evidentiary and instruction errors, and that the attorneys' fee award should be vacated or reduced.
II. Issues on Appeal
A. Issue 1: Jury instruction on Title VII retaliation claim
Widenhouse argued that it was entitled to a new trial because the district court improperly instructed the jury regarding Appellee's Title VII retaliation claim. The Fourth Circuit rejected the claim of plain error because Widenhouse failed to show that the district court's improper instruction resulted in any actual prejudice (i.e., that the error affected substantial rights).
A court may review an otherwise waived claim of plain error if the error affects substantial rights. EEOC v. A.C. Widenhouse at 7 (citing Fed. R. Civ. P. 51(d)(2)). In such cases, the Fourth Circuit applies the U.S. Supreme Court case United States v. Olano, which held that an error affects substantial rights if it is prejudicial, meaning that it "must have affected the outcome of the district court proceedings." EEOC v. A.C. Widenhouse at 9 (citing United States v. Olano, 507 U.S. 724, 734 (1993). The appellant bears the burden of persuasion with respect to prejudice and must generally make a specific showing of prejudice. Id. (citing Olano, 707 U.S. at 734-35).
In affirming the district court's finding of a Title VII retaliation violation and associated award of damages, the Fourth Circuit relied on the jury's verdict sheet and the fact that the same compensatory and punitive damages would have been available for the § 1981 claim, alone. "The jury's verdict sheet may constitute "evidence to the contrary" of our typical assumption that the jury followed the district court's instruction on this claim." Id. at 10 (citing United States v. Hager, 721 F.3d 167, 189 (4th Cir. 2013)). The jury's verdict sheet stated that Gill proved "he was terminated from his employment by the defendant because of his opposition to activity made unlawful under Title VII." Id. (quoting J.A. 2378) (emphasis added)). Furthermore, the jury found that there was "no lawful reason" for terminating Gill, indicating that it would have concluded retaliation was a but-for cause of the adverse employment action." Id.
Additionally, the jury found Widenhouse liable for exactly the same retaliatory conduct in violation of § 1981. The Court noted that although it could not determine the damages the jury would have granted without the Title VII retaliation claim, Gill would have been eligible for the same compensatory and punitive damages for the § 1981 claim alone. EEOC v. A.C. Widenhouse at 11.
B. Issue 2: Timing of jury instruction on punitive damages liability
Widenhouse argued it was entitled to a new trial on all claims because the district court abused its discretion by instructing the jury on punitive damages liability during the liability phase of the trial. The Fourth Circuit found no abuse of discretion because the district court properly applied the rule from Mattison v. Dallas Carrier Corp., 947 F.2d 95 (4th Cir. 1991). Id. at 12.
In the first phase of a bifurcated trial, the jury is required to determine whether punitive damages should be awarded. During the second phase of the trial, the jury should be presented with evidence relevant to determining the appropriate amount of punitive damages only if the jury's verdict determined punitive damages should be awarded. Id. at 11 (citing Mattison, 947 F.2d at 110).
C. Issue 3: Evidentiary error on Gill's previous termination and EEOC charge
Widenhouse claimed it was entitled to a new trial on all claims because district court abused its discretion by excluding testimony and examination concerning Gill's termination from, and EEOC charge against, another former employer Consolidated Pipe, and that testimony was admissible under several rules, including Rule of Evidence 403.
The Fourth Circuit was not required to consider the merits of Widenhouse's claims because the district court excluded evidence on proper alternative grounds, and Widenhouse failed to object to these alternative grounds on appeal. Id. at 12.
D. Issue 4: Attorneys' fees - unreasonable hourly rate
Widenhouse claimed the district court abused its discretion in calculating the amount of Gill's attorney's fees because it (1) relied on an unreasonable hourly rate and (1) did not require sufficient proof that Gill's attorney's work was not mere duplication of the EEOC's efforts. The Fourth Circuit affirmed the district court's award of attorney's fees.
As was requested, Gill submitted affidavits from other local attorneys regarding hourly rates. Widenhouse claimed that the district court unreasonably failed to consider that the affiant attorneys had higher overhead costs because they were not solo practitioners, as was Gill's attorney. The Court held that a counsel's firm size and overhead are not among the 12 factors relevant to determining reasonable attorneys' fees. Id. at 14 (citing In re Abrams & Abrams, P.A., 605 F.3d 238, 244 (4th Cir. 2010)).
Widenhouse claimed the award of attorneys' fees should be vacated or reduced because the Gill failed to overcome a presumption that his attorney's efforts duplicated the EEOC's. EEOC v. A.C. Widenhouse at 14. The Court affirmed the award of attorneys' fees, explaining that there is no presumption of duplication of efforts, and none is necessary because the prevailing party must demonstrate entitlement to fees with specificity. Id. at 14-15. Further, the Fourth Circuit noted that the district court found that Gill's attorney was the only attorney to prepare his Title VII and § 1981 retaliation claims, and served as lead counsel for several of the plaintiffs' shared causes of action. Id. at 15.
 Unpublished opinion available at http://www.ca4.uscourts.gov/Opinions/Unpublished/131389.U.pdf.
 The Fourth Circuit explained that "absent exceptional circumstances . . . we do not consider issues raised for the first time on appeal." EEOC v. A.C. Widenhouse at 6 (quoting Volvo Const. Equip. N. Am., Inc. v. CLM Equip. Co., 386 F.3d 581, 603 (4th Cir. 2004)). However, when exceptional circumstances exist, the court will grant relief if "there is an error, it is plain, and the error affects the appellant's substantial rights." EEOC v. A.C. Widenhouse at 6 (citing United States v. Olano, 507 U.S. 725, 732 (1993)).