987 F.3d 758
8th Cir.2021Background
- Lana Starkey worked at Amber Pharmacy from 2001 to 2015; after Hy-Vee acquired Amber in 2014 she moved from Director of Enrollment to Director of Financial Services.
- A third-party consultant concluded Amber’s financial team was understaffed, lacked accounting expertise, and recommended restructuring; Amber implemented a new operating system in Feb. 2015.
- Starkey reported alleged overpayments to Texas Medicaid, incorrect Medicaid billing codes, and possible HIPAA-related email practices; Amber decided to eliminate her position and prioritize accounting expertise.
- Amber offered Starkey two demotion options with substantial pay cuts; she accepted one on June 4, 2015, then resigned effective August 13, 2015 (age 51); she did not receive timely COBRA notice.
- District court granted summary judgment for defendants on all federal claims and most state claims, but denied summary judgment on part of Starkey’s Nebraska Fair Employment Practice Act (NFEPA) retaliation claim (retaliation for reporting Medicaid discrepancies) and remanded that portion to state court.
- The Eighth Circuit affirmed summary judgment on the federal and most state claims, but vacated the district court’s partial remand and instructed that the entire NFEPA claim be remanded to state court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Age discrimination (ADEA) | Starkey says the restructure/termination was age-motivated; other older employees were terminated and younger employees did her work | Amber says legitimate business reason: needed accounting expertise and restructuring based on consultant and system issues | Summary judgment for defendants; plaintiff failed to show pretext or that age was but-for cause |
| COBRA/ERISA notice | Employer failed to provide timely COBRA notice and therefore violated COBRA/ERISA | No statute requires 30-day employer notice to plan administrator; Starkey suffered no prejudice and knew her COBRA rights | Summary judgment for defendants; Starkey showed no interference or prejudice |
| Intentional infliction of emotional distress (state law) | Demotion and ostracism caused severe distress | Employer conduct was not outrageous and did not cause severe emotional distress | Summary judgment for defendants; claim insufficient under Nebraska law |
| NFEPA retaliation / protected conduct and jurisdiction | Starkey contends she was retaliated against for reporting Medicaid and HIPAA issues and NEOC activity; argues those are protected | Amber disputes protected status of her reporting (managerial context) and sought summary judgment; also argued some defendants not proper parties | District court denied SJ only on portion related to Medicaid-report retaliation and remanded that portion; Eighth Circuit vacated and ordered remand of the entire NFEPA claim to state court because the protected-conduct issue raises novel state-law questions (e.g., applicability of a "manager rule") and comity favors state resolution |
Key Cases Cited
- McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973) (establishes burden-shifting framework for discrimination claims)
- Aulick v. Skybridge Ams., Inc., 860 F.3d 613 (8th Cir. 2017) (employer’s business reorganization to emphasize different expertise is a legitimate nondiscriminatory reason)
- Chambers v. Metro. Prop. & Cas. Ins. Co., 351 F.3d 848 (8th Cir. 2003) (limitations of statistical evidence without proper workforce analysis in reduction-in-force context)
- Grant v. City of Blytheville, 841 F.3d 767 (8th Cir. 2016) (statistical evidence alone insufficient absent adequate analysis of comparators)
- Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343 (1988) (factors for declining supplemental jurisdiction when federal claims are dismissed)
- EEOC v. Con-Way Freight, Inc., 622 F.3d 933 (8th Cir. 2010) (federal courts should defer to state courts on novel questions of state law)
- Heitzman v. Thompson, 705 N.W.2d 426 (Neb. 2005) (elements for intentional infliction of emotional distress under Nebraska law)