Hart v. Lew, 2013 U.S. Dist. LEXIS 135330

Background

Hart, a Revenue Agent who underwent male-to-female gender reassignment in Nov. 2009, alleged sex discrimination and retaliation under Title VII after a long history of workplace disputes, disciplinary actions, and multiple EEO complaints and union grievances.
From 2006–2011 Hart repeatedly complained about supervisors' comments, performance reviews, counseling memoranda, restroom access, loss of telecommuting, and other adverse actions; the parties executed multiple EEO settlement agreements during that period.
The IRS issued a Removal Proposal in Nov. 2010; Hart was removed in May 2011 and exhausted an agency final decision in April 2012. Hart sued under Title VII; the case was transferred to the D. Md. where the Department moved to dismiss or, alternatively, for summary judgment.
The Department relied heavily on the administrative record and argued many claims were unexhausted, time-barred, or supported by legitimate nondiscriminatory reasons. Hart opposed and sought discovery (Rule 56(d)).
The court declined to convert the motion to summary judgment (finding discovery necessary), treated the motion as a 12(b)(6) motion, dismissed all claims arising before the termination (because withdrawn, settled, or unexhausted), but denied dismissal as to Hart’s Title VII claims that her termination was discriminatory and retaliatory.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether non-termination claims are before the court (exhaustion/preclusion)	Hart relied on prior EEO complaints and settlements but treats conduct as background to the termination claim	Treasury argued many claims were unexhausted, withdrawn, or released by settlement waivers and thus barred	Court dismissed all claims other than those challenging the termination because they were settled, withdrawn, or unexhausted
Whether the complaint plausibly alleges sex discrimination in termination	Hart alleges adverse treatment and animus tied to her transgender status, restroom denials, downgraded reviews after surgery, and hostile remarks	Treasury contended Hart failed to meet legitimate expectations, decisionmakers were same protected class, and offered nondiscriminatory reasons for removal	Court held Hart pleaded sufficient facts to state a plausible Title VII sex discrimination claim as to her termination and denied dismissal
Whether the complaint plausibly alleges retaliation in termination	Hart alleges repeated protected EEO activity and temporally/proximately linked adverse actions culminating in termination	Treasury argued it had legitimate nonretaliatory reasons and that Hart cannot prove pretext (summary-judgment style)	Court held Hart adequately pleaded retaliation tied to termination and denied dismissal on that claim
Whether court should convert D’s motion to summary judgment (Rule 12(d)/56) and resolve on record	Hart sought discovery (Rule 56(d)) to test administrative record and credibility of agency witnesses	Treasury argued administrative record sufficed and conversion was appropriate	Court declined conversion as premature, found discovery necessary, and resolved the motion under Rule 12(b)(6) instead

Key Cases Cited

Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading must state a plausible claim)
Ashcroft v. Iqbal, 556 U.S. 662 (2009) (distinguish legal conclusions from factual allegations)
McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973) (burden-shifting framework for proving discrimination)
Texas Dept. of Cmty. Affairs v. Burdine, 450 U.S. 248 (1981) (prima facie case creates presumption of discrimination)
Burlington N. & Santa Fe Ry. Co. v. White, 548 U.S. 53 (2006) (retaliation adverse-action standard)
Swierkiewicz v. Sorema, N.A., 534 U.S. 506 (2002) (Title VII complaints need not plead McDonnell Douglas prima facie case to survive dismissal)
Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133 (2000) (plaintiff may show employer’s stated reason is pretext and prevail)
Hill v. Lockheed Martin Logistics Mgmt., Inc., 354 F.3d 277 (4th Cir. 2004) (two avenues to prove discrimination)
McBurney v. Cuccinelli, 616 F.3d 393 (4th Cir. 2010) (motion to dismiss tests complaint sufficiency)