Carney v. American University
151 F.3d 1090 (1998)
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Rule of Law:
Evidence from settlement negotiations is admissible under Federal Rule of Evidence 408 to prove an independent claim of retaliation when an employer withholds benefits an employee is arguably entitled to after the employee engages in a statutorily protected activity, such as announcing an intent to sue for discrimination.
Facts:
- Darion Carney, an African American senior administrator at The American University since 1981, became Director of Student Services in 1988.
- She served as Acting Dean of Students for two years and applied for the permanent position, but the University selected another candidate.
- Carney returned to her position as Director of Student Services.
- Two years later, the University eliminated Carney's position during a 'downsizing' process, resulting in her dismissal.
- Shortly after being dismissed, Carney sent a letter to the University stating her intention to sue for discrimination.
- Around the same time, a question arose as to whether Carney was arguably entitled to an additional three months of severance pay.
- The University did not give Carney the additional severance pay.
Procedural Posture:
- Darion Carney filed a lawsuit against The American University in the U.S. District Court for the District of Columbia.
- Carney's complaint alleged race discrimination and retaliation in violation of 42 U.S.C. § 1981 and the District of Columbia Human Rights Act.
- The University moved for summary judgment on all claims.
- The district court granted the University's motion for summary judgment.
- The district court ruled that Carney failed to rebut the University's legitimate, nondiscriminatory reasons for its actions and failed to establish a causal link for her retaliation claim.
- Carney, as appellant, appealed the district court's grant of summary judgment to the U.S. Court of Appeals for the D.C. Circuit, where the University was the appellee.
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Issue:
Under the McDonnell Douglas framework, does an employee create a genuine issue of material fact for trial on a retaliation claim by showing that her employer, after learning of her intent to sue, refused to consider granting her additional severance pay to which she was arguably entitled, and is evidence from settlement negotiations admissible to prove this retaliatory act?
Opinions:
Majority - Tatel, Circuit Judge
Yes. An employee creates a genuine issue of material fact for a retaliation claim by presenting evidence that an employer refused to consider paying benefits, to which the employee was arguably entitled, after learning of the employee's intent to sue. The court held that Carney failed to raise a genuine issue of material fact on her discrimination claims because her evidence of pretext was speculative and did not sufficiently rebut the University's proffered legitimate, non-discriminatory reasons for not promoting her (lacked a doctorate, interviewed poorly) and for eliminating her position (legitimate downsizing). However, the court found that Carney did establish a prima facie case for retaliation. Withholding benefits can constitute an adverse personnel action. Causation was established by a supervisor's testimony that the University refused to consider the extra pay because it had received Carney's letter of intent to sue, and by the close timing of the events. The court ruled that evidence from settlement correspondence was admissible under Federal Rule of Evidence 408 because it was not offered to prove the underlying discrimination claim, but to prove a separate and independent wrong—the act of retaliation committed during the post-employment discussions.
Analysis:
This decision clarifies two important aspects of employment law. First, it reinforces that 'adverse action' in a retaliation claim can include more subtle conduct than termination, such as withholding discretionary or arguably owed benefits. Second, and more significantly, it provides a crucial interpretation of Federal Rule of Evidence 408, establishing that the rule's bar on using settlement negotiations as evidence is not absolute. The case sets a precedent that communications from such negotiations can be admitted to prove a new, independent wrong, like retaliation, that occurs during the settlement process itself. This prevents employers from using the shield of settlement confidentiality to engage in retaliatory conduct with impunity.
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