This is a case that demonstrates the need for proper documentation. Kathleen Sariah Perkins filed a wrongful termination action against Silver Mountain Sports Club & Spa, LLC, alleging she was fired because she was pregnant and requested leave. After trial in the district court, a jury returned a verdict finding that Silver Mountain had indeed violated Perkins’s rights under the Family and Medical Leave Act (FMLA) and Title VII.
On appeal, Silver Mountain argued the district court erred by excluding after-acquired evidence of misconduct by Perkins during her employment. Silver Mountain also contended on appeal that the district court improperly prevented it from rebutting testimony concerning the parties’ withdrawn and dismissed claims and counterclaims.
The case is Kathleen Perkins vs. Silver Mountain Sport Club & Spa, LLC
Perkins was employed by Silver Mountain health club until September 2005. Although she was initially hired as a part-time front-desk clerk, Perkins was promoted several times; first to the position of Manager on Duty, then to Front Desk Manager and Membership Director, and finally to an accounting position.
In August 2005, when Perkins was approximately five months pregnant, she inquired into Silver Mountain’s maternity leave policies and prepared for her impending absence. A month later, Silver Mountain terminated Perkins’s employment. Perkins then filed suit alleging Silver Mountain terminated her because she was pregnant, and in doing so, had violated her Title VII and FMLA rights. Perkins also asserted a cause of action for defamation and alleged Silver Mountain slandered her by accusing her of embezzling company funds. However, Perkins voluntarily withdrew this particular claim before trial.
Silver Mountain disputed her allegations and claimed Perkins had in fact been terminated for a litany of reasons unrelated to her pregnancy. Among the reasons, Silver Mountain contended it was reorganizing, that Perkins’s job description was changed as a result of the reorganization, that Perkins’s job performance was sub-par, and that she had been “repeatedly caught embezzling funds and services.” Silver Mountain claimed that Perkins paid an $818.55 cellular telephone bill which included both personal and business telephone calls, using company funds without authorization. Perkins subsequently repaid approximately $270, the amount which comprised her personal use, and was informed she was not permitted to use company funds to pay her phone bill in the future without authorization. Silver Mountain, however, had agreed to pay $35 of her cellular phone bill every month to cover business-related phone call expenses. After Perkins was terminated, Silver Mountain allegedly discovered that her August 2005 phone bill, in the amount of $73.22, was again paid with company funds. Nevertheless, Silver Mountain later dropped its contention Perkins was fired for embezzlement. Finally, Silver Mountain asserted several counterclaims, including a claim that Perkins converted company funds and services, which was later dismissed before trial on summary judgment.
After a three-day trial, the jury returned a verdict in Perkins’s favor, finding Silver Mountain had (1) terminated Perkins due to her request for leave under the FMLA, (2) discriminated against Perkins because of her status as a pregnant woman, and (3) acted maliciously or with reckless indifference to Perkins’s rights. The jury awarded $20,000 in lost wages and benefits and $30,000 in punitive damages. Silver Mountain appealed the district court’s findings.
On appeal, Silver Mountain challenged two evidentiary rulings made by the district court. First, it contended the district court erred by excluding after-acquired evidence of alleged misconduct by Perkins in making an August 2005 cell phone payment with company funds; and, second, the district court improperly prevented it from rebutting testimony concerning Perkins’s withdrawn defamation claim and Silver Mountain’s dismissed embezzlement counterclaim.
The United States Court of Appeals, Tenth Circuit, held that the circuit court ruled appropriately since Silver Mountain never demonstrated how or what evidence it intended to present that would have demonstrated a factual inconsistency in Perkins testimony or court filings. Although the district court did not make the offer of proof requirement entirely clear when it reserved ruling on the motion, it did articulate this requirement during the course of trial. The court placed the duty on Silver Mountain to demonstrate, outside the presence of the jury, the substance of any after-acquired evidence and the grounds for admitting such evidence.
The appeals court pointed out that Silver Mountain could have done a number of things to provide a sufficient offer of proof to the district court, but never did so.
Silver Mountain could have demonstrated:
- A basis for authenticating the $73 August 2005 payment record.
- The payment was unauthorized.
- Perkins was in fact responsible or credibly thought to be responsible for the payment.
- The unauthorized payment would have been sufficient alone to justify her termination through testimony of a company manager or her supervisor.
- When the termination would have occurred and how it would have affected her claim for damages.
If any error was made by the district court, it was not plain or obvious to the appeals court. Even on appeal, Silver Mountain did not demonstrate any admissible purpose for the excluded rebuttal testimony to the court. The fact a defamation claim was made did not obviously demonstrate an inconsistency with trial testimony, but more importantly, Silver Mountain never explained how it would do so in conformance with the court’s pre-trial rulings. Finally, because Silver Mountain had not shown how the rebuttal evidence would affect the outcome of the proceedings, it failed in its burden to show how the exclusion would have affected any of its substantial rights under the plain error standard.
Finding no error sufficient enough to warrant the “extraordinary remedy” of reversal, the appeals court affirmed the district court’s ruling in this case.
While this case hinged on some technical details (or lack thereof), perhaps the most important thing to note is that it is a good idea to have documentation in order before firing someone who has requested FMLA leave and/or is pregnant.