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Terry v. Jackson-Madison County General Hospital District

Court of Appeals of Tennessee, Jackson

June 15, 2018

CINDY TERRY
v.
JACKSON-MADISON COUNTY GENERAL HOSPITAL DISTRICT

          Session April 18, 2018

          Appeal from the Circuit Court for Madison County No. C12-186 Kyle Atkins, Judge

         A medical product sales representative brought suit against her former employer, a hospital, claiming retaliation in violation of the Tennessee Human Rights Act. After a bench trial, the trial court judge entered a verdict in favor of the hospital, having concluded that the employee failed to carry her burden of proof. In spite of dismissing the employee's case, the trial court awarded the employee a portion of her attorney's fees as "sanctions" against the hospital for making an allegedly late-filed motion to strike the employee's demand for a jury trial, which the trial court granted. We affirm the trial court's dismissal of the employee's retaliation claim, and we reverse the trial court's order granting the employee attorney's fees.

         Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Affirmed in Part, Reversed in Part, and Remanded

          Charles M. Purcell and Andrew V. Sellers, Jackson, Tennessee, for the appellant, Cindy Terry.

          R. Dale Thomas, Geoffrey A. Lindley, and Jennifer Vallor Ivy, Jackson, Tennessee, for the appellee, Jackson-Madison County General Hospital District.

          Arnold B. Goldin, J., delivered the opinion of the Court, in which Brandon O. Gibson and Kenny Armstrong, JJ., joined.

          OPINION

          ARNOLD B. GOLDIN, JUDGE

         Background and Procedural History

         On July 13, 2012, Cindy Terry ("Appellant") filed suit in circuit court against her former employer, Jackson-Madison County General Hospital District (the "Hospital"), alleging retaliation in violation of the Tennessee Human Rights Act ("THRA"). [1]Appellant averred that her supervisor, Ranee Terry ("R.T."), [2] retaliated against her when she learned that Appellant had participated in a human resources ("H.R.") investigation of R.T., in which it was alleged that R.T. used racial slurs when referring to African-Americans. According to Appellant, her participation in the H.R. investigation directly led to her termination and other acts of retaliation.[3] As discussed in detail below, the Hospital maintains that Appellant was terminated because of poor job performance.

         Upon completion of discovery, a jury trial was scheduled to take place in November 2016. However, on October 26, 2016, the Hospital filed a "Motion for Non-Jury Trial." The Hospital averred that the Tennessee Supreme Court had recently determined that a litigant bringing a THRA claim in circuit court did not have a right to a jury trial. See Young v. City of LaFollette, 479 S.W.3d 785 (Tenn. 2015). Appellant responded opposing the motion and seeking an award of attorney's fees for the cost of responding to the motion, which Appellant averred was made in violation of the scheduling order.[4] A hearing on the motion was held on November 10, 2016, and the trial court indicated that he intended to grant the Hospital's motion for a non-jury trial. Also at the hearing, the trial court verbally indicated that he intended to grant Appellant's request for an award of attorney's fees for the costs of responding to the motion, and entered an order following the trial awarding Appellant attorney's fees.[5] At Appellant's request, the trial was continued. On February 17, 2017, the trial court entered an order granting the Hospital's motion for a non-jury trial pursuant to the Tennessee Supreme Court's decision in Young v. City of LaFollette. Id.

         The case was tried over the course of five days in February 2017, and the court heard testimony from fourteen witnesses. A summary of the proof adduced at trial follows.

         In 2007, Appellant was hired to work as a medical product sales representative for an affiliate of the Hospital, Medical Center Medical Products ("MCMP"). During all times relevant to this appeal, MCMP employed one other sales representative, Paige Higgins. R.T. was the director of MCMP and supervised Ms. Higgins and Appellant. R.T. testified that Appellant and Ms. Higgins had the same job responsibilities which included securing referrals by contacting physicians, conducting educational in-service sessions, [6] attending and promoting MCMP's products and services at health fairs, driving the company vehicles, "calling on" physicians by visiting their offices to market MCMP's products and services, and communicating regularly with co-workers and supervisors.

         During the 2010-2011 fiscal year, Appellant worked "as a team" with Ms. Higgins. Appellant and Ms. Higgins were paid a base salary plus commission if "the team" met the sales quotas for certain products and services each month (the "team incentive plan"). Ms. Higgins testified that under the team incentive plan, it did not matter who was responsible for the referrals; as long as the quotas were met, each sales representative received a set portion of the bonus commission for the month.[7] R.T. testified that MCMP sustained approximately a one million dollar loss during the 2010-2011 fiscal year when Ms. Higgins and Appellant worked "as a team."

         On April 5, 2011, R.T. testified that she met with Ms. Higgins and Appellant to discuss changes that would be taking place in anticipation of the 2011-2012 fiscal year, which would begin on July 1, 2011. Because MCMP had sustained a loss during the 2010-2011 fiscal year, R.T. testified that she informed Ms. Higgins and Appellant that she was "looking at going back to the old way of doing things, " whereby each sales representative would have their own territory and be individually accountable for their job responsibilities, including servicing the accounts in their individual territories. R.T. testified that she also instructed Ms. Higgins and Appellant to begin preparing weekly sales activity reports that documented their sales activities from the week before (the "sales activity report(s)"), and she told them to send the weekly reports to her before the following Monday at 8:00 A.M. According to R.T., she also asked Appellant and Ms. Higgins to prepare monthly prospective marketing reports to show the in-service educational sessions that each sales representative had tentatively scheduled for the following month (the "marketing report"). The monthly marketing report was due before the first day of the upcoming month. Appellant acknowledged that she was told in the April 5, 2011 meeting that she would need to begin preparing weekly sales activity reports and sending them to R.T. by 8:00 A.M. the following Monday, but Appellant testified that she was not told to prepare a monthly marketing report.

         Also on April 5, 2011, Sheila Noles, a co-worker of Appellant, filed a complaint with the human resources department of the Hospital ("H.R.") against R.T. Ms. Noles testified that she reported to Yvette Forrest, an H.R. employee, that R.T. had yelled at employees, made derogatory remarks to employees, and used racial slurs when referring to African-Americans. As a result of Ms. Noles' complaint, Ms. Forrest testified that she conducted a preliminary investigation and met with seven other employees of MCMP, including Appellant and Ms. Higgins, concerning R.T.'s conduct. According to Ms. Forrest's testimony, when the other employees echoed some of Ms. Noles' complaints, she alerted Karen Utley, a vice-president of the Hospital and R.T.'s direct supervisor. Ms. Utley testified that she asked Ms. Forrest to conduct a full investigation into R.T.'s conduct, and Ms. Forrest met with a total of sixteen employees of MCMP.[8] Ms. Forrest summarized the findings of her investigation and gave the written report to Ms. Utley. However, Ms. Forrest testified that the report did not include the names of the parties who participated in the investigation, and she did not tell Ms. Utley or anyone else "in the chain of command" the identities of the employees.[9] After Ms. Forrest's investigation was complete, Ms. Utley testified that she met with R.T. concerning the investigation to "counsel" her about the allegations and ways to improve her job performance. However, no additional adverse action was taken against R.T.

         R.T. testified that on May 18, 2011, she met with Ms. Higgins and Appellant to discuss their goals for the upcoming 2011-2012 fiscal year. R.T. testified that she went over their job responsibilities, which included completing weekly sales activity reports, completing monthly marketing reports, conducting two in-service educational events per month to educate physicians, contacting physicians, creating advertising and promotional materials, driving the company vehicles, and making a monthly visit to each West Tennessee Healthcare entity in their territory. Appellant admitted that R.T. told her at the May 18, 2011 meeting that she was required to conduct two in-service events per month, complete weekly sales activity reports, attend meetings with staff, and create advertising materials. After the meeting, R.T. sent Appellant and Ms. Higgins an e-mail with a template for the sales activity report, and she reiterated that the report was due the Monday of the following week by 8:00 A.M.

         In early June 2011, Ms. Higgins testified that she decided to approach R.T. to ask that she be assigned her own territory so that she and Appellant would be individually accountable for their job responsibilities during the 2011-2012 fiscal year. Ms. Higgins testified that she was "fed up" with sharing job responsibilities under the team incentive plan because Appellant "was not working." Specifically, Ms. Higgins testified that Appellant's attendance to her job had become "spotty, " and she felt that the "sales efforts of MCMP were totally . . . on [her] shoulders."[10] According to Ms. Higgins, Appellant would not respond to voicemail or e-mail promptly, and she had been completing the weekly sales reports on her own every week because Appellant "was not interested in doing it." Furthermore, Ms. Higgins testified that Appellant had failed to show up the day before a recent medical conference to help set up MCMP's booth or on the day of the conference to promote MCMP's products and services. Ms. Higgins testified that Appellant did not notify her that she would be absent from the conference until after she was supposed to arrive on the day of the conference. Furthermore, Ms. Higgins testified that she had received an e-mail from Appellant on May 8, 2011, in which Appellant was critical of the Hospital.[11] Ms. Higgins testified that, "when [she] received [the] e-mail, [she] realized that [she] needed to find a way to be able to perform [her] job and not be associated so much with this, because this was not how [she] felt."[12]

         On the morning of June 9, 2011, Ms. Higgins sent Appellant an e-mail before a regularly scheduled meeting with R.T. to inform her that she planned on bringing up the subject of dividing the territory at the meeting. In the e-mail, Ms. Higgins told Appellant that she felt that dividing the territory would provide them each with "more focused responsibility."[13] At the meeting, Appellant and Ms. Higgins were each assigned roughly half the counties in the territory.[14] R.T. testified that she gave Ms. Higgins and Appellant a spreadsheet of physicians and asked each of them to complete the spreadsheet by indicating which sales representative would be responsible for contacting each physician going forward.[15] R.T. testified that Ms. Higgins returned the spreadsheet, but Appellant never did. Appellant testified that she felt R.T. divided the territory in retaliation against her for participating in the H.R. investigation. On June 30, 2011, Appellant testified that she met with R.T. because she felt that the territory had been unfairly divided and the decision to split the territories did not "make sense financially." Appellant testified that she understood that R.T. had the authority to split the territory, but she wanted to have some additional input. R.T. testified that she asked Appellant to put her concerns in writing, which Appellant did in a letter dated July 5, 2011. In the letter, Appellant told R.T. that she felt that leaving the territories as they were was the "more logical business decision, " but she would respect the choice to split the territory if R.T. was set in her decision. Also at the June 30, 2011 meeting, according to R.T., she asked Appellant about the status of a map, which she had asked Appellant to create in January 2011 to give clients directions between the two MCMP sales offices. Appellant had not completed the map.

         In July 2011, Gary Abbott, the "pharmacy manager" for MCMP, testified that he approached R.T. because he was concerned that Appellant was not marketing a drug for pre-mature infants called Synagis, which was a high-revenue product for MCMP.[16] Ms. Higgins testified that Appellant told her she did not want to "grow the [Synagis] business quickly" because Appellant felt that if they grew "it quickly then the quota [would] go up and more [would] be expected of [them]." Based on Mr. Abbott's concerns, R.T. testified that she began to suspect that Appellant was reporting visits with physicians that she was not actually making. R.T. testified that she called ten of the physicians which Appellant claimed to have met with the previous month, and four of the physicians indicated that Appellant had not actually been there. R.T. testified that she had a GPS device placed on Appellant's company vehicle, and the GPS indicated that Appellant's company vehicle was not moved for the following two weeks. R.T. testified that she was having several other issues with Appellant's job performance in July 2011. Specifically, R.T. testified that Appellant was not turning in her weekly sales reports, was failing to timely respond to e-mails and phone calls, and was failing to set up in-service educational sessions.

         On August 4, 2011, Appellant had a regularly scheduled meeting with R.T. and Ms. Higgins. R.T. testified that she inquired into the status of the map she asked Appellant to create in January 2011, and Appellant still had not completed it or her sales activity reports from the month before. After the meeting on August 4, 2011, R.T. testified that she decided to set up a meeting with Debbie Harris, a director of H.R., to discuss her concerns over Appellant's work performance. On August 5, 2011, R.T., Appellant, and Ms. Harris met. Ms. Harris testified that the purpose of the meeting was for R.T. to clearly delineate Appellant's job responsibilities and her expectations to Appellant in the presence of a neutral third party, [17] and Ms. Harris testified that R.T. clearly articulated both. R.T. testified that she told Appellant to turn in her weekly sales activity report by 8:00 A.M. the following Monday, communicate regularly, report to the office at 8:00 A.M. daily, and drive the company vehicle.

         According to Appellant, R.T. accused her of falsifying her weekly sales activity reports and informed Appellant that she needed to improve her communication with R.T. and her other co-workers by responding daily to voicemail and e-mails. Appellant conceded that R.T. also inquired about Appellant's progress on the map assignment once again and told her again that she needed to drive the company vehicle at all times.[18]Appellant also testified that R.T. told her to report to the office by 8:00 A.M. According to Ms. Harris, Appellant indicated during the meeting that she did not agree with R.T.'s decision to divide the territory, and "she didn't agree that she needed to do what [R.T.] was asking her to do."

         On August 10, 2011, Appellant testified that R.T. informed her that Ms. Higgins would be solely responsible for marketing Synagis going forward. R.T. testified that she decided to assign all Synagis marketing to Ms. Higgins because Appellant had failed to schedule any in-service educational sessions for August and had failed to communicate with Mr. Abbott. Appellant testified that R.T. told her to provide Ms. Higgins with any information concerning Synagis referrals and any Synagis events that Appellant had previously scheduled so that Ms. Higgins could take over the Synagis marketing. Later that day, R.T. testified that she emailed Appellant, Mr. Abbott, and Ms. Higgins informing them all that Ms. Higgins would be the only sales representative contact for Synagis throughout the entire territory going forward. R.T. testified that she instructed Appellant once again to e-mail all incoming information concerning Synagis to R.T. and Ms. Higgins so that Ms. Higgins could reschedule appointments and handle referrals. R.T. testified that she e-mailed Appellant three additional requests for the information, and Appellant failed to provide the information.

         On August 18, 2011, Appellant and R.T. met again, and Appellant signed a copy of her job description listing her job responsibilities. The job responsibilities listed included sending tentative monthly marketing reports before the first of the upcoming month, conducting a minimum of two education in-services a month, and driving the company vehicle. R.T. also issued Appellant a written reprimand indicating, "further instance of insubordination or poor job performance [would] result in additional disciplinary action up to termination." R.T. testified that she inquired again about the status of the map assignment, but Appellant had still not prepared the map. R.T. testified that she also reminded Appellant that she must drive the company vehicle, and emphasized that Appellant needed to promptly respond to e-mails and phone calls during the work day. Appellant testified that she needed to drive her personal vehicle due to a medical issue, and she agreed to procure a physician's note for R.T. Appellant testified that she went to two physicians to procure a note, but neither physician provided her with one.

         On August 26, 2011, R.T. testified that she entered Appellant's office to discover that Appellant had cleaned out all of her personal belongings. R.T. testified that Appellant had also told her that she was interviewing with a competitor.[19] When R.T. discovered Appellant's office had been cleared out, R.T. testified that she contacted Ms. Harris to ask what she should do, and Ms. Harris testified that she told R.T. to have Appellant's network access and e-mail shut down until they could meet with Appellant.[20]

         On August 30, 2011, Appellant e-mailed R.T. and Ms. Harris stating that she would like to meet the following day. Appellant testified that she called the meeting because she believed her employment had been terminated based upon an e-mail from IT she had received stating that her account and intranet access had been shut down. At the August 31, 2011 meeting, Appellant testified that she told R.T. and Ms. Harris that she felt she was being retaliated against because she participated in the H.R. investigation of R.T. in April 2011. R.T. and Ms. Harris both testified that they were not aware that Appellant participated in the H.R. investigation until Appellant told them on August 31, 2011. Appellant also admitted that she told R.T. and Ms. Harris that they "should just fire" her. After Appellant told Ms. Harris and R.T. that she felt she was being retaliated against, Ms. Harris testified that she gave Appellant a complaint form and asked her to return it with a detailed account of the retaliation. It is undisputed that Appellant never returned the complaint form. Ms. Harris testified that she explained to Appellant that she had not been terminated. Ms. Harris testified that she explained to Appellant that she instructed R.T. to have Appellant's accounts shut down until they determined whether or not Appellant had resigned. At the end of the meeting, Ms. Harris asked Appellant if she was quitting, and Appellant responded that she did not know and she needed to confer with "someone from outside."

         On September 1, 2011, Ms. Harris testified that she set up a meeting with Appellant and R.T. to clarify to Appellant what was expected of her. Ms. Harris testified that she called the meeting, in part, because she did not know if Appellant was planning on returning to work at all. R.T. testified that she told Appellant once again that she needed to clock-in at the office at 8:00 A.M., and she must drive the company vehicle because she had been unable to procure a doctor's note. R.T. also testified that she told Appellant that her work phone needed to be on all day during the business day. Appellant testified that R.T. also inquired as to what in-service educational sessions Appellant had scheduled for the month of September because R.T. had not received Appellant's monthly marketing report for August or September.

         On September 7, 2011, Appellant sent R.T., Amy Griffin, and Barry Phillips an email describing in detail her complaints concerning R.T. and requesting that Mr. Phillips or Ms. Griffin be present at any meeting between Appellant and R.T. going forward. Ms. Griffin is the compliance officer for the Hospital, and Mr. Phillips is the head of H.R. Appellant testified that she "felt her job responsibilities had been changing quite a bit, were continuing to change, that [she] was very confused, [and] that she felt like [she] was being singled out." After receiving the e-mail, R.T. testified that she contacted Mr. Phillips to ask if he would sit in on a meeting later that day between R.T. and Appellant, and Mr. Phillips agreed to do so. R.T. testified that Appellant asked to be terminated once again, but she told Appellant she did not want to terminate her.

         On September 16, 2011, Appellant and R.T. met again. R.T. testified that Appellant had failed to send her a monthly marketing report for September or August and had not sent in a weekly activity report since August. On September 19, 2011, R.T. emailed Appellant requesting again that Appellant send her a list of the in-services and events she had conducted in August and was planning to conduct in September. R.T. testified that she sent an e-mail the following day asking once again. On the morning of September 23, 2011, R.T. and Appellant had a regularly scheduled meeting. R.T. testified that she once again requested Appellant's monthly marketing report for September that was due by August 31, 2011, and the information concerning the two in-service educational sessions that Appellant was required to perform in August 2011. R.T. testified that she asked Appellant why she continued to have meetings with physicians in Ms. Higgins' territory, and Appellant testified that she told her they were personal visits with no business purpose.

         After the meeting, R.T. testified that she decided to contact Ms. Utley to discuss terminating Appellant. Ms. Utley agreed with the termination, so R.T. contacted Ms. Harris. Later that day, Appellant was terminated in a meeting with Ms. Harris and R.T. Appellant testified that R.T. gave her a list of reasons why she was being terminated. Appellant testified that she did not know that she was being terminated for poor job performance until she was given a notice of separation, which listed poor performance as the reason for her termination.

         Appellant testified that she filed a formal grievance to have her termination reviewed and a letter of complaint listing the reasons why she felt her termination was unjustified. On October 6, 2011, Appellant, R.T, Ms. Forrest, and Mr. Jeff Frieling, a vice-president of the Hospital who was not previously involved in the case, met for Appellant's grievance hearing.[21] Mr. Frieling testified that he carefully reviewed the information provided to him by Appellant and H.R., and he decided to uphold the termination.

         On April 20, 2017, the trial court entered a final judgment dismissing Appellant's THRA claim, having concluded that she failed to carry her burden of proof. Also on April 20, 2017, the trial court entered an "Order Granting Plaintiff Sanctions/Attorney Fees" in the amount of $9, 630.00 against Appellee. The trial court stated that it was awarding attorney fees "relate[d] to the [Hospital District's] motion to strike the jury and its resulting aftermath."

         Appellant timely appealed.

         Issues Presented

         Appellant has raised the following issues for our review, which we have rephrased and re-ordered as follows:

. Whether the evidence preponderates against the trial court's findings that Ms. Utley was the ultimate decision-maker or that Ms. Utley was unaware that Appellant participated in the investigation of R.T. when she agreed to terminate Appellant.
. Whether the trial court erred in concluding that Appellant failed to establish she was retaliated against because of her participation in the R.T. investigation.
. Whether the trial court erred in "failing to find that the decision by the Defendant to terminate the Plaintiff, Cindy Terry, was a pre-textual decision by the Defendant."
. Whether the trial court committed reversible error by failing to allow the entirety of Ms. Forrest's written report from the R.T. investigation into evidence or by failing to allow testimony concerning specific instances of conduct reported by employees during the R.T. investigation.
. Whether the trial court erred in granting the Hospital's motion for a non-jury trial.

         In the posture of Appellee, the Hospital raises the following issues for our review, which we have rephrased and re-ordered as follows:

. Whether the trial court erred in awarding Appellant $9, 630.00 for the cost of replying to the Hospital's motion for non-jury trial as sanctions against the Hospital.
. Whether the trial court committed reversible error in failing to admit evidence proffered by the Hospital.

         Standard ...


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