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Perez v. Lloyd Industries, Inc.

United States District Court, E.D. Pennsylvania

August 1, 2019

THOMAS E. PEREZ, Plaintiff,
v.
LLOYD INDUSTRIES, INC., ET AL., Defendants.

          MEMORANDUM OPINION

          Goldberg, J.

         The Occupational Safety and Health (“OSH”) Act, 29 U.S.C. § 660, prohibits an employer from terminating employees for filing complaints or otherwise exercising rights afforded by the Act, including informing the Occupational Safety and Health Administration (“OSHA”) about unsafe conditions. Following a five-day trial, a jury found that Lloyd Industries, Inc. (“Lloyd Industries”) and William Lloyd (collectively, “Defendants”) violated this Act by terminating two employees, Mr. Matthew Spillane and Mr. Santos Sanna, in retaliation for assisting OSHA in identifying safety hazards at Lloyd Industries.

         Presently before me is Defendants' Renewed Motion for Judgment as a Matter of Law or, in the Alternative, a New Trial. Defendants argue the jury instructions were defective because they improperly included the “perception theory” of liability, the “third party theory” of liability, and the “substantial reason” causation standard. Defendants also assert that the verdict was not supported by sufficient evidence.

         For the foregoing reasons, I conclude that the jury instructions were proper, and the verdict was sufficiently supported by evidence. Accordingly, Defendants' Motion will be denied.

         I. BACKGROUND

         Plaintiff Thomas Perez, [1] the U.S. Secretary of the Department of Labor (the “Secretary”), brought claims on behalf of two discharged employees against their employer, Defendants Lloyd Industries and Mr. Lloyd, alleging violations of the OSH Act. Prior to trial, I considered several motions in limine and determined that, pursuant to the OSH Act, 29 U.S.C. § 660(c)(2), the trial would be bifurcated into two phases: (a) the liability phase decided by a jury, and (b) the damages phase decided by the court. (Order, Mar. 29, 2019, ECF No. 69.)

         The liability phase of the trial began on March 27, 2019 and concluded on April 2, 2019. During the trial, the following timeline was established: Mr. Sanna began working for Defendants on July 28, 2008. (Am. Trial Tr., 201:6-15, Mar. 28, 2019, ECF No. 96.) Mr. Spillane began working for Defendants on May 7, 2014. (Id. 117:9-12.) Mr. Joshua Elbode, who is not a party to this lawsuit, sustained a serious injury that resulted in amputation of several fingers while working for Defendants in July of 2014. (Id. 91:6-16; Am. Trial Tr. vol. 2, 70:9-71:12, Mar. 27, 2019, ECF No. 95.) In October of 2014, Mr. Elbode filed a complaint with OSHA. (Am. Trial Tr. vol. 2, 77:25-78:18, Mar. 27, 2019, ECF No. 95.) OSHA inspected Defendants' plant on November 13, 2014. (Am. Trial Tr., 105:20-24, Mar. 28, 2019, ECF No. 96.) Mr. Spillane was terminated five days later on November 18, 2014. (Id. 105:15-19.) Mr. Sanna provided testimony to OSHA in February of 2015. (Am. Trial Tr., 42:20-43:15, Mar. 29, 2019, ECF No. 97.) OSHA issued citations against Defendants in the amount of $822, 000 on May 11, 2015. (Id. 103:13-16.) Mr. Sanna was terminated on that same day. (Id. 103:19-25.)

         A. Evidence Relating to Mr. Spillane

         Mr. Spillane began working for Defendants on May 7, 2014 in the access door department, assembling the access doors of duct systems. (Am. Trial Tr., 86:17-25, 117:9-12, Mar. 28, 2019, ECF No. 96.) Mr. Spillane testified that, in July and August of 2014, he took pictures of the machine that caused Mr. Elbode's injury. (Id. 93:25-102:11.) Mr. Rene Santos, another Lloyd Industries' employee, testified that he told Mr. Lloyd about seeing Mr. Spillane taking pictures of the machine that caused Mr. Elbode's injury. (Am. Trial Tr., 147:23-149:7, Mar. 29, 2019, ECF No. 97.) Mr. Lloyd confirmed that he had been told about Mr. Spillane taking photos of this particular machine. (Id. 90:25-92:22.) Mr. Spillane testified that Mr. Lloyd “spied” on Mr. Sanna and him, whereby Mr. Lloyd observed them conversing together in the supply closet at some point shortly before the OSHA inspection started. (Am. Trial Tr., 102:19-106:22, Mar. 28, 2019, ECF No. 96.) Mr. Lloyd admitted that he told Mr. Richard Smith, who was another Lloyd Industries' employee, that he believed that there was a “rat” in the plant who was feeding information to OSHA. (Am. Trial Tr., 147:23-149:7, Mar. 29, 2019, ECF No. 97.)

         Mr. Lloyd also acknowledged that he knew that Mr. Spillane and Mr. Elbode had worked together in the Access Door Department, and that Mr. Elbode had filed the OSHA complaint. (Id. 90:15-24, 112:4-12.) Mr. Lloyd acknowledged that he had observed that the OSHA inspectors immediately wanted to inspect the machine that Mr. Spillane had photographed. (Id.)

         Mr. Lloyd also testified that, prior to terminating Mr. Spillane, he had never disciplined Mr. Spillane or warned him about any performance deficiencies. (Id. 96:9-19.) Nevertheless, Mr. Lloyd terminated Mr. Spillane five days after the OSHA inspection began without providing any explanation. (Id. 95:25-96:5, 100:16-17.) Mr. Lloyd did so even though he acknowledged that, in other previous situations, he had discussed any concerns with the other employees prior to terminating them. (Id. 96:17-100:12.) Mr. Lloyd explained that he terminated Mr. Spillane because he was a bad worker and slept in his car while on the clock, which was “basically the same thing as stealing money.” (Id. 104:1-109:14, 125:20-128:16; Am. Trial Tr., 24:1-27:8, 118:22-120:11, 126:11-129:1, Apr. 1, 2019, ECF No. 98.) However, Mr. Lloyd acknowledged that he knew that Mr. Spillane had been sleeping in the car two months before Mr. Spillane's termination because another employee, Rene Santos, told him about it. (Am. Trial Tr., 143:9-147:22, Mar. 29, 2019, ECF No. 97.) Mr. Russell Murphy, another Lloyd Industries employee, testified that Mr. Lloyd did not know about Mr. Spillane sleeping in the car until after Mr. Spillane was terminated. (Am. Trial Tr., 119:2-128:16, Mar. 29, 2019, ECF No. 97.)

         B. Evidence Relating to Mr. Sanna

         Mr. Sanna began working for Defendants on July 28, 2008 as the plant manager. (Am. Trial Tr., 201:6-15, Mar. 28, 2019, ECF No. 96.)[2] Mr. Sanna provided testimony to OSHA on February 23, 2015, as part of OSHA's investigation of Lloyd Industries following the inspection of the plant in November of 2014. (Id. 102:19-106:22.) Mr. Lloyd acknowledged that, while he knew that Mr. Sanna had provided information to OSHA, he did not know what information was provided. (Am. Trial Tr., 112:4-113:3, Mar. 29, 2019, ECF No. 97.) Mr. Lloyd also acknowledged that he fired Mr. Sanna on May 11, 2015, immediately after he received the OSHA citations. (Am. Trial Tr., 109:15-112:15, Mar. 29, 2019, ECF No. 97.)

         Mr. Lloyd explained that he fired Mr. Sanna without providing him with an explanation because Mr. Sanna was in charge of safety and health at the plant and the OSHA citations led Mr. Lloyd to conclude that Mr. Sanna had failed in those duties. (Am. Trial Tr., 235:19-237:1, Mar. 28, 2019, ECF No. 96; Am. Trial Tr., 103:13-25, 109:15-112:15, Mar. 29, 2019, ECF No. 97.) Yet, Mr. Lloyd acknowledged that he did not ask Mr. Sanna about his knowledge and experience regarding plant safety and health when Mr. Sanna was hired. (Am. Trial Tr., 212:19-213:1, Mar. 28, 2019, ECF No. 96.) And Mr. Lloyd admitted that Mr. Sanna was never asked to perform safety inspections, provide safety training, or discuss safety responsibilities in the plant. (Am. Trial Tr., 212:19-213:1, Mar. 28, 2019, ECF No. 96.)[3] Despite the fact that Mr. Lloyd knew that OSHA was likely going to inspect the plant, he never informed Mr. Sanna of this possibility as he did not want Mr. Sanna to be involved with the OSHA inspection. (Am. Trial Tr., 27:8-28:23, Mar. 29, 2019, ECF No. 97; Am. Trial Tr., 79:1-12, Apr. 1, 2019, ECF No. 98.) In fact, Mr. Lloyd testified that, as the owner, he was ultimately responsible for the plant's safety and health at Lloyd Industries. (Am. Trial Tr., 65:1-70:10, Apr. 1, 2019, ECF No. 98.)

         C. Defendants' Motion for Judgment as a Matter of Law

         At the close of the Secretary's case-in-chief, and at the conclusion of the evidence, Defendants moved for judgment as a matter of law on the following bases: (a) the Secretary could not establish liability by arguing that Mr. Spillane was “perceived” to have engaged in a protected activity (i.e., the “perception theory”); (b) the Secretary could not establish liability by arguing that Mr. Spillane and Mr. Sanna engaged in a protected activity by supporting Mr. Elbode's OSHA complaint; and (c) the Secretary could not establish causation between the protected activity and the terminations. (Defs.' Br. in Supp. Mot. for J. 1-2, ECF No. 68-1.)

         On April 2, 2019, prior to giving the case to the jury for deliberation, I heard oral argument on this Motion. (Order, Apr. 2, 2019, ECF No. 74.) Defendants objected to the inclusion of the “perception theory” in the jury instructions, arguing that an employee must actually engage in a protected activity under the OSH Act. (Am. Trial Tr., 6:16-10:9, Apr. 2, 2019, ECF No. 99.) I overruled Defendants' objection, concluding that “[t]he whole policy reason for the [OSH Act] is to create an atmosphere where persons feel that they should be able to without retribution interface with OSHA and I think the case law supports the charge.” (Id.)

         Defendants also objected to the inclusion of Mr. Spillane and Mr. Sanna's close relationship with Mr. Elbode in the jury instructions, arguing that Mr. Elbode did not engage in a protected activity under the OSH Act because he was not an employee at the time that he filed the complaint with OSHA. (Id. 10:17-14:13.) The Secretary responded that, pursuant to the regulations promulgated under the OSH Act, the proper question was whether Mr. Spillane and/or Mr. Sanna were employees at the time they engaged in a protected activity, and not whether Mr. Elbode was an employee. (Id. 14:14-25.) Based on the Secretary's response, I overruled Defendants' objection. (Id. 15:1-2.)

         Similarly, Defendants objected to the inclusion of Mr. Spillane's close relationship with Mr. Elbode in the jury instructions, arguing that Mr. Elbode did not have a “protected relationship” under the caselaw. (Id. 16:23-18:13.) I overruled this objection, finding that I had already ruled on this issue. (Id. 18:24-19:16.)

         Finally, Defendants objected to the causation standard used in the jury instructions (which included both the “but for” and “substantial reason” tests), arguing that recent U.S. Supreme Court decisions applying Title VII support the proposition that only the “but for” test is proper. Defendants also argued that the regulations promulgated under the OSH Act should be “ignored” and “stricken.” (Id. 19:24-22:8.) I overruled this objection, finding that the regulations clearly provide two causation tests, and noted that recent district court decisions have supported a jury charge that included both the “but for” and “substantial reasons” tests. (Id. 22:9-23:21.)

         D. Jury Instructions and Verdict

         Because Defendants raise several challenges to the jury instructions, I will summarize the pertinent portions below.

         The jury was first briefly instructed on the OSH Act in general and was reminded that “this case is not about whether defendant Lloyd Industries or Mr. Lloyd complied with the safety and health standards under [t]he Act.” (Id. 42:1-43:1.) The jury was then told that the Secretary had to prove each of the following three elements by a preponderance of the evidence: (a) Mr. Spillane and Mr. Sanna each engaged in a “protected activity, ” (b) Mr. Spillane and Mr. Sanna were terminated, and (c) there was a causal connection between the protective activities and the terminations. (Id. 43:1-47:13, 44:4-7.) I then explained each element in greater detail.

         As it relates to Mr. Spillane, I instructed that the Secretary first had to establish that Mr. Spillane engaged in a “protected activity” under one of the following theories:

A, Mr. Spillane engaged in a protected activity by taking photographs of the plant and providing information to Mr. Elbode which caused OSHA to inspect Lloyd Industries; or B, defendants suspected or perceived that Mr. Spillane had engaged in a protected activity; or C, defendants believed or suspected that Mr. Spillane had a close relationship with Mr. Elbode who engaged in the protected activity, again, i.e. the filing of the complaint with OSHA.

(Id. 44:4-17.) Second, I instructed that the Secretary had to prove that “Lloyd Industries subjected Mr. Spillane to a materially adverse action at the time or after the protected conduct took place.” (Id. 44:18-21.) Third, I instructed that the Secretary had to prove “a causal connection between Mr. Spillane's termination from Lloyd Industries and his engagement with protected activity which I just described to you.” (Id. 44:22-45:1.)

         As it relates to Mr. Sanna, I likewise instructed the jury that the Secretary first had to establish that Mr. Sanna engaged in a “protected activity” under one of the following theories:

A, Mr. Sanna engaged in a protected activity by testifying during the OSHA investigation; and/or, the defendants believed or suspected that Mr. Sanna had a close relationship with Mr. Elbode who engaged in a protected activity, again, the filing of the OSHA complaint.

(Id. 45:12-17.) Second, I instructed that the Secretary had to prove that “Lloyd Industries subjected Mr. Sanna to a materially adverse action at the time or after the protected conduct took place.” (Id. 45:18-22.) Third, I instructed that the Secretary had to prove “a causal connection between Mr. Sanna's termination from Lloyd Industries and his engagement in protected activity.” (Id. 45:22-25.)

         I further instructed the jury as follows:

In order to engage in a protected activity, the employee does not have to directly institute the proceedings and it is sufficient if he sets into motion the actions of others which result in perceived -- an OSHA [proceeding]. Additionally, termination can be found to be retaliatory where the terminated employee did not himself engage in a protected activity but had a close relationship with the individual who did. Finally, retaliation can be found based upon the mistaken belief or perception that the employee had engaged in a protected activity.

(Id. 46:8-17.)

         As to the element of causation, I instructed that the Secretary had to establish by preponderance of the evidence “either that A, the protected activity was a substantial reason for the action; or B, the discharge or other adverse action took place because of the engagement in the protected activity.” (Id. 46:24-47:5.) I elaborated on this instruction as follows:

That is the secretary must show you that A, Mr. Spillane was fired because of his engagement in a protected activity; or B, Mr. Spillane's engagement in a protected activity was a substantial reason for his termination. Similarly, the secretary must show, must prove that A, Mr. Sanna was fired because of his engagement in a protected activity; or B, Mr. ...

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