How One Hazardous Waste Contractor Dealt with a Discrimination Claim

Some lawsuits are downright frivolous because, to begin with, the plaintiff’s legal claims are shaky. Lawyers know that often they can’t collect a fee without a favorable verdict or a substantial settlement payment from the other side. That’s why—far more often than most members of the public believe—attorneys turn away claims that don’t pass a threshold of credibility and dollar value. Most individuals whose grievances are spurned end up abandoning them. For the few hardy souls who attempt to act as their own lawyer, even with behind-the-scenes legal coaching, the outcomes are usually unproductive for them and costly for their opponents.

Take the case of Samuel Phifer who sued his former employer, Sevenson Environmental Services Inc. (SES), a hazardous waste clean-up contractor, whose work is project-based and seasonal. Workers are typically hired, laid-off, and rehired over the course of a particular project.

The Delaware Solid Waste Authority (DSWA) hired SES to construct a large expansion at its Cherry Island Landfill in New Castle County. In late 2006, SES hired Phifer as a bulldozer operator and assigned him to the project at an hourly rate of $24.69. The following April, all SES operators at the project got a raise to $28.11 an hour.

Phifer received the higher pay until his first seasonal lay-off in October, 2007. Five months later, SES recalled Phifer and assigned him duties as a laborer at the project, paying him an hourly rate of $19.88. Although again laid-off in November, 2008, Phifer was reinstated ten days later as a laborer at the corresponding rate. But not for long. A few weeks later, he was laid-off. In March, 2009, SES gave Phifer an opportunity to resume work at the project as a laborer, but Phifer refused the offer.

Phifer, who is African-American, believed that, after his first lay-off, SES’s decision to re-hire him as a laborer, rather than as a bulldozer operator, was racially motivated. He reacted by filing a charge of discrimination with the Delaware Department of Labor (DDOL) and the federal Equal Employment Opportunity Commission (EEOC). He later filed another charge with the EEOC claiming that he was laid off in retaliation for his having complained to the EEOC of his demotion to the laborer position.

Under federal and state labor laws, anyone who plans to file a lawsuit alleging discrimination on the basis of race, color, religion, sex (including pregnancy), national origin, age (40 or older), disability, genetic information, or retaliation, must first file a charge with an EEOC or state labor department field office. After investigating the charge, the EEOC or state agency may pursue the charge or, if the case lacks merit or if the complainant fails to cooperate, it may dismiss it. Upon dismissal, the EEOC or the state agency will issue a notice giving the complainant permission to file suit in a court of law. The notice is commonly called a right-to-sue letter.

Following his receipt of right-to-sue letters from the DDOL and EEOC, Phifer filed a complaint against SES and DSWA in federal district court. He raised several claims under the federal Civil Rights Act and Delaware wage and discrimination laws. He also presented a state law breach of contract claim.

Both defendants filed motions to dismiss the complaint. In March, 2012, the federal district judge initially dismissed all claims against DSWA, finding that it could not be liable to Phifer under federal and state laws because DWSA was neither his employer nor an agent of his employer. At the same time, the judge dismissed Phifer's breach of contract claim as well as one of his civil rights claims and his claim under the state discrimination law. Ultimately, the district judge ruled in favor of SES on all the remaining claims. Phifer appealed.

On review, a three-judge panel of the U.S. Court of Appeals for the Third Circuit affirmed the lower court judgment, finding that the district judge properly dismissed his civil rights claims against both defendants. “Phifer failed to allege any facts whatsoever indicating that the defendants conspired to deprive him of any protected rights,” the opinion stated. “Moreover, his complaint does not suggest that DWSA was even aware of the employment decisions rendered by [SES] until well after they occurred.” Incidentally, the appeals court found no indication that DSWA had violated federal law by discriminating on the basis of race in contracting with SES.

The appellate panel also upheld the dismissal Phifer's breach of contract claim. Phifer asserted that, as a result of SES's adverse employment decisions, both SES and the DWSA violated the construction contract that they entered into regarding the landfill project. Phifer appeared to claim that he was a third-party beneficiary under that contract. “Phifer failed to allege facts sufficient to suggest that he was a third-party beneficiary under the contract between the Defendants, or that he otherwise had standing to enforce the terms of the contract,” the opinion continued.

Notably, the appeals court, as did the district court, concluded that SES had a “legitimate, nondiscriminatory reason” for declining to re-hire Phifer as an bulldozer operator—a poor performance evaluation following Phifer’s first stint in that position. In response, Phifer never produced any evidence that SES’s reason was merely a pretext for discrimination, and not the real motivation for the unfavorable job action.

Phifer v. Sevenson Environmental Services, Inc., et al., No. 14-4070, 3d Cir., July 27, 2015.

Barry Shanoff is a Bethesda, Md., attorney and general counsel of the Solid Waste Association of North America.