During its September term, the Illinois Supreme Court heard oral argument in a potentially important employment law case, Michael v. Precision Alliance Group, LLC. Michael poses questions about the parties’ burdens of proof in a case alleging wrongful termination. Our detailed summary of the facts and lower court opinion in Michael is here.
The defendant in Michael packages and distributes seeds for commercial agricultural use. As part of that business, the company packs soybeans into 2,000 pound bags. The company claimed that the bags were typically filled by its automated packing line with a bit more than 2,000 pounds in order to accommodate normal shrinkage. One of the plaintiffs seemed to agree, testifying that initially the packing hopper set point was between 2,007 and 2,010 pounds.
A new individual took charge of bagging in 2002. One of the plaintiffs noticed that the hopper set point had been reduced, and drivers reported that their trucks seemed lighter. The company weighed bags at random, and found several below 2,000 pounds. After the company’s spot test, the plaintiffs began secretly weighing bags themselves. A former employee reported the matter to the state Department of Agriculture. State inspectors appeared at the company’s plant, stopped production and weighed every bag in the warehouse. Roughly half were underweight. In short order, the state lifted stop-sale orders and ended the investigation without issuing any penalties, citing the company’s rapid response to the investigation.
A month after the state’s visit to the plant, one of the plaintiffs was involved in a forklift collision. The plaintiff was fired. Around the same time, management decided to eliminate four positions as a result of a drop-off in business; the two remaining plaintiffs were let go as part of that reduction in force.
The plaintiffs sued for common law retaliatory discharge. After the Appellate Court reversed an early summary judgment in the defendant’s favor, the Circuit Court conducted a bench trial. The Court ultimately entered summary judgment on behalf of the defendant, holding that while the plaintiffs had offered some evidence of unlawful motive, the defendant had shown a valid non-pretextual reason for dismissing the plaintiffs. The plaintiffs appealed a second time. The Fifth District reversed again, holding that the trial court had increased the plaintiff’s burden of proof by requiring them to prove that the defendant’s articulated reasons for dismissal were pretexts.
Counsel for the employer began by arguing that the Appellate Court’s decision conflicted with the Supreme Court’s decision in Clemons v. Mechanical Devices Company regarding the burden of proof and causation standards in a claim for retaliation. During the bench trial, the company presented substantial evidence that the company didn’t know that former coworkers were involved in the call made to the State by an ex-employee. The company showed that one plaintiff was terminated for horseplay with a forklift; as to the other two, the company presented substantial evidence that they were chosen for termination as part of a general reduction in force. Justice Burke asked whether the defendant had argued below that a finding of a legitimate reason for the termination precluded a finding of retaliatory discharge. The defendant argued that the plaintiff hadn’t challenged the finding of a legitimate reason for the terminations as against the weight of the evidence. Justice Thomas asked if the defendant was saying that the trial court had erred by reducing the plaintiff’s burden of proof, and that even if the burdens had been properly assigned, the defendant would have won at the trial court. The defendant agreed that the error was harmless. However, the Appellate Court erred in placing the burden of proof on the defendant, since under Clemons, traditional tort analysis applies in wrongful termination cases. The plaintiff must prove each element of the tort. Justice Thomas asked whether there was any need for a new determination of liability if the case were remanded. Counsel answered that the trial court’s judgment should simply be reinstated, since its finding of a legitimate motive for termination was dispositive. The trail court made it clear, according to counsel, that its finding of causal nexus between the plaintiffs’ whistle-blowing and the termination was merely part of the prima facie case; the court had not made a definitive finding that the company knew about the plaintiffs’ involvement. If the employer doesn’t know about the plaintiffs’ activities, no claim can lie for retaliatory discharge. The most troubling aspect of the Appellate Court’s judgment, counsel argued, was the finding that if there is any relationship between the protected activity and the plaintiffs’ discharge, the employer’s evidence makes no difference – the employee must prevail. In fact, counsel argued, proof of a valid business reason for the plaintiffs’ dismissal mandated judgment for the defendant.
Counsel for the plaintiff followed. She argued that the trial court had used the wrong elements in analyzing causation, and the error had changed the outcome. Once the court found a “causal nexus” between the protected activity and the plaintiffs’ termination, the case should have been over, according to the plaintiff. Justice Burke asked what authority says that causal nexus equates to causation. Counsel responded that this followed from logic and the ordinary definition of causation. Clemons used the term “causally related” and the terms are interchangeable. Chief Justice Garman asked under the plaintiffs’ theory of causal nexus being sufficient, what effect does the defense evidence of a non-retaliatory reason for termination have? Counsel answered that a finding of causal nexus precludes a finding of no proximate cause because the illegitimate cause is sufficient; it is not necessary for it to be the sole cause. The Chief Justice asked whether that was an expansion of Clemons, and counsel answered no. The issue in Clemons was whether the defendant’s alternative proof had to be something lawful. Clemons said that if an employer comes forward with a valid non-pretextual reason for discharge, and the trier of fact believes it, causation is not established. Chief Justice Garman asked whether that was what happened here. Counsel answered no, to find for the defendant, the trier of fact has to believe that the defendant’s reason motivated the discharge to the exclusion of the retaliatory reason. Justice Thomas asked whether under Clemons, the plaintiff didn’t have the burden to prove causation by demonstrating that the defendant’s suggested reasons were pretext. Counsel argued that the Court would not have abandoned traditional standards for proximate causation in that way; the standard must be that the illegitimate reason played no part in the adverse action. Justice Thomas asked how, under the plaintiff’s standard, the defendant could ever prevail? Counsel answered that the defendant prevails by demonstrating to the jury’s satisfaction that the illegitimate reason played no role at all. Justice Thomas asked how a trier of fact would ever sort out an alternative reason and an illegitimate reason with that level of precision. Counsel answered that a jury doesn’t have to believe the plaintiff’s evidence. Perhaps the report of wrongdoing was insignificant. Perhaps the defendant changed its practices and thanked the employee. But here, the court did find a causal nexus. Justice Karmeier noted that the trial court had said that the plaintiff must set out a prima facie case of retaliation. Is there a difference between proof by a preponderance and proof of a prima facie case? Counsel said not in the way the court set it out. Justice Karmeier asked if the court made a finding when it said that the employer may have known of the employees’ involvement. Counsel answered yes, given the inference that can be drawn from those circumstances. Justice Karmeier asked whether the bottom line wasn’t that the trial judge found valid non-pretextual reasons for the dismissals? Counsel said yes, but after a finding of causal nexus, such a finding doesn’t matter.
On rebuttal, counsel for the employer argued that the plaintiffs’ theory that a defendant can show a legitimate reason for an adverse employment action and still be liable is wrong. Not only has that never been the law, counsel suggested that the plaintiff hadn’t made the argument until Michael reached the Supreme Court. Counsel argued that Clemons was very clear if the trier of fact believes the employer’s tendered legitimate reason for termination, there can be no liability. The tort of wrongful termination is a narrow and limited exception to the doctrine of employment at will. Counsel concluded by arguing that the hypothetical of plaintiff’s counsel was exactly the situation here – the defendant didn’t know that the plaintiffs were involved in the report to the State agency.
We expect Michael to be decided in three to four months.