The opinion of the court was delivered by: Gerard E. Lynch, District Judge
Plaintiff in this employment discrimination action has submitted a motion for reconsideration of an aspect of the Court's decision on summary judgment, see Sanders v. Madison Square Garden, L.P., 06 Civ. 589, 2007 WL 2254698 (S.D.N.Y. Aug. 6, 2007), or in the alternative a motion in limine to exclude any evidence of settlement negotiations. On reflection, it appears that the motion has merit.
Local Civil Rule 6.3 provides that a party may submit a motion for reconsideration "setting forth concisely the matters or controlling decisions which counsel believes the court has overlooked." Loc. Civ. R. 6.3. "[T]o be entitled to reconsideration, a movant must demonstrate that the Court overlooked controlling decisions or factual matters that were put before it on the underlying motion, which, had they been considered might reasonably have altered the result reached by the court." Keiser v. CDC Inv. Mgmt. Corp., No. 99 Civ. 12101, 2004 WL 516212, at *1 (S.D.N.Y. Mar. 17, 2004).
Plaintiff's motion for summary judgment was predicated on the notion that defendant Dolan's testimony in effect admitted to retaliation as a matter of law. That motion was denied, and correctly so. Title VII provides that "[i]t shall be an unlawful employment practice for an employer to discriminate against any of his employees . . . because [s]he has opposed any practice made an unlawful employment practice by this subchapter, or because [s]he has made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under this subchapter." 42 U.S.C. § 2000e-3(a). It is well established, as the Court ruled, that in order to constitute protected activity under this provision, the plaintiff's complaint does not have to be correct that the conduct complained of was illegal, but the complaint has to be made in the good faith and reasonable belief that it was. Manoharan v. Columbia Univ. Coll. of Physicians & Surgeons, 842 F.2d 590, 593 (2d Cir. 1988). Therefore, if the plaintiff did not make a good faith complaint, but rather made up accusations in order to extort money from defendants, then her activity was not protected. See Matima v. Celli, 228 F.3d 68 (2d Cir. 2000).
Similarly, to the extent that plaintiff in good faith undertook to document instances of what she genuinely believed was unlawful discriminatory behavior, that would be protected conduct, but if she attempted in bad faith to coerce employees under her supervision to conform their stories to hers, and thus to obstruct legitimate factfinding by the employer, the administrative agencies, or by the Court, that would be bad faith behavior that would not be entitled to protection: "[T]he way in which an employee presses complaints of discrimination can be so disruptive or insubordinate that it strips away protections against retaliation." Id. at 79.
But the question then arises, what if the employee acted in good faith, but the employer believed that the employee was engaged in bad faith behavior? In the summary judgment opinion, the Court indicated that this could be a defense, because in that event that employer did not act with a retaliatory motive. On reflection, the Court finds that this was a mistake.
The usual way in which the elements of a retaliation claim are set forth, as they were set forth in my earlier opinion, is as follows: To state a prima facie case of retaliation, plaintiff must show that: (1) she engaged in a protected activity; (2) defendant was aware of that activity; (3) she suffered an adverse employment action; and (4) there was a causal connection between the protected activity and the adverse action. See Reed v. A.W. Lawrence & Co., 95 F.3d 1170, 1178 (2d Cir. 1996).
In the hypothesized situation in which the employer fires an employee for what he erroneously believes was a bad faith complaint, these elements are satisfied: the activity was in fact protected, she suffered an adverse employment action, and there was a direct causal connection between her protected activity and her firing. Indeed, it is clear in such a case that the employer fired her because of what is, on these assumptions, in fact protected activity.
This is not just a matter of too close a verbal parsing of language in court opinions. There is a good reason why this is so. Contrary to what the Court indicated in the summary judgment opinion, if an employer fires an employee because he believes her otherwise-protected activity opposing alleged sex discrimination amounts to extortion or obstruction of justice, this is not a firing for a reason distinct from her oppositional behavior. On these assumptions, if the employer's "knowledge" of the employee's conduct actually "influence[s] the manner and timing of" the employee's discharge, the employer is in fact firing the employee because of the employee's protests, and not for some other reason. Cosgrove v. Sears, Roebuck & Co., 9 F.3d 1033, 1040 (2d Cir. 1993).
If an employer were permitted to fire employees who protested alleged illegal discrimination, simply because the employer believed the complaints were unfounded or malicious, the employees' protection would be illusory. Employers could easily make false claims that they disbelieved in the employees' good faith. But it is not just a question of possible false defenses. Undoubtedly, many employers do in fact believe that employees' complaints of discrimination are completely without merit. But the law requires the employer to tolerate such complaints, and not to retaliate because of them. So long as the employee in fact acts in good faith when she brings a discrimination complaint, she is absolutely protected against retaliation for her complaint, even if the employer's alleged conduct does not actually violate Title VII. See Wimmer v. Suffolk County Police Dep't, 176 F.3d 125, 135-36 (2d Cir. 1999), citing Quinn v. Green Tree Credit Corp., 159 F.3d 759, 768-69 (2d Cir. 1998). She only loses this protection if she is in fact acting in bad faith. Although employees who make up false complaints of discrimination are not protected by the act, see Spadola v. N.Y. City Trans. Auth., 242 F. Supp. 2d 284, 292 (S.D.N.Y. 2003), if an employer chooses to fire an employee for making false or bad faith accusations, he does so at his peril, and takes the risk that a jury will later disagree with his characterization.
For these reasons, the Court withdraws that portion of its previous opinion that appears at 2007 WL 2254698, at *23-*25, under the heading "retaliation or legitimate firing," insofar as that portion of the opinion differs from the Court's holding here.
The next issue presented by plaintiff's motion is whether testimony relating to the settlement negotiations is admissible under Fed. R. Evid. 408 on the issue of plaintiff's good faith. The summary judgment opinion suggests that it is. Id. at *21-22, citing Pierce v. F.R. Tripler & Co., 955 F.2d 820, 827-28 (2d Cir. 1992). However, the summary judgment opinion did not squarely address the issue of the admissibility of the evidence under Fed. R. Evid. 408. All the Court held in that opinion was that evidence that plaintiff had demanded a large sum of money was potentially relevant to the issue of her good faith. This much is true, or at least, so Judge Weinstein's treatise suggests, noting that evidence of settlement positions will often meet "the modern requirements of relevancy . . . embodied in Rule 401." J. Weinstein & M. Berger, Weinstein's Federal Evidence ¶ 408.03, at 408-13 (J. McLaughlin ed. 2007) ("Weinstein's Evidence"). But it does not address the rule excluding evidence of settlement negotiations in most circumstances, which rests not on grounds of relevance but on independent policy grounds. See Manko v. United States, 87 F.3d 50, 54 (2d Cir. 1996). This aspect of plaintiff's motion is not really a motion to reconsider any aspect of the summary judgment ruling as such, but is simply a completely proper motion in limine addressing the admissibility of evidence of settlement negotiations.
It is important to note that the rule prohibits evidence of offering to accept a valuable consideration in attempting to compromise a claim "when offered to prove . . . [the] invalidity of . . . a claim that was disputed." Fed. R. Evid. 408(a). The rule expressly does not prohibit the use of such evidence for any other purpose. Fed. R. Evid. 408(b). See Starter Corp. v. Converse, Inc., 170 F.3d 286, 293 (2d Cir. 1999).
Here, plaintiff has two analytically distinct claims. First, she claims that she was discriminated against on the basis of sex by virtue of sexual harassment by defendant Thomas. Second, she claims that she was fired in retaliation for her complaints about that alleged harassment. Plaintiff's settlement offer was an offer to settle the sexual harassment claim. Rule 408(a) therefore clearly prohibits any use of evidence of plaintiff's settlement demands to disprove that claim. However, plaintiff was not offering to settle the retaliation claim; there was no retaliation claim to settle at the time of the negotiations in question. It is arguable that defendants are offering evidence of plaintiff's offer to settle the sexual harassment claim not to show the invalidity of that claim, but to show the invalidity of the retaliation claim, by demonstrating that plaintiff's conduct was not protected. See Deluca v. Allied Domecq Quick Serv. Rests., No. 03 Civ. 5142, 2006 WL 2713944, at *2 (E.D.N.Y. Sept. 22, 2006) ...