                   IN THE COURT OF APPEALS OF TENNESSEE
                              AT KNOXVILLE

           ELLEN PATTY SEIBER v. TOWN OF OLIVER SPRINGS

                  Direct Appeal from the Circuit Court for Roane County
                   No. 11627    The Honorable Russell Simmons, Judge



                    No. E1999-01228-COA-R3-CV - Decided May 8, 2000


The plaintiff, a mid-level executive of the Town of Oliver Springs, “borrowed” various sums of
money from a citizen of the Town over a three-year period which she repaid with sexual favors.
When this activity came to light she was fired by the Mayor and City Administrator. Her suit,
claiming breach of contract and discriminatory employment practices, was dismissed on motion for
summary judgment. This appeal resulted. We affirm the judgment of the Trial Court.

Tenn. R. App. P. 3 Appeal as of right; Judgment of the Circuit Court Affirmed

GODDARD , P. J., delivered the opinion of the court, in which SUSANO, J., joined.
FRANKS, J., filed a concurring opinion.

Andrew R. Tillman and Summer H. Stevens, Knoxville, Tennessee, for the Appellant.

Robert H. Watson, Jr. and Nathan D. Rowell, Knoxville, Tennessee, for the Appellee.

                                           OPINION

JUDGE GODDARD delivered the opinion of the court.

        This is an action for damages for breach of contract and discriminatory employment
practices. In the course of her duties as city secretary the plaintiff issued a building permit in
September 1993 to S. A. Baldwin from whom she concurrently borrowed $600.00. Within a month
she borrowed various additional amounts from Baldwin and this practice continued for more than
three years.1 These “borrowings” were not documented and were not intended to be repaid in specie,
but by her sexual favors. This conduct inevitably came to light and the plaintiff was fired by the




       1
         The “borrowings” aggregated, at minimum, $87,000.00; at maximum, $150,000.00. The
affidavit of Baldwin, reproduced and attached as an appendix to this opinion, is essentially
undisputed.
Mayor, and City Administrator on account of her immoral conduct.2 The termination was handled
in a manner calculated to allow the plaintiff to “draw” unemployment compensation. Upon the
expiration of her eligibility, she filed a complaint alleging that her termination was unlawful because
the Employee Handbook created a contract between her and the Town which provided that she could
be terminated only “for cause.” She further alleged that the Town discriminated against her in
violation of the Tennessee Human Rights Act in that she was treated differently than similarly
situated men.

        The defendant’s motion for summary judgment alleged three grounds: (1) that the plaintiff
could not establish a prima facie case for a disparate treatment claim of discriminatory discharge in
violation of the Act; (2) the Employee Handbook does not constitute an employment contract; (3)
the plaintiff is estopped from maintaining this action because she agreed not to pursue an action if
she could draw unemployment benefits.

       The motion was granted by the trial judge without comment. The plaintiff appeals, and
presents for review these issues:

       I.      Whether the trial court erred in refusing to sanction the Town of Oliver Springs for
               spoliation of evidence.

       II.     Whether the trial court could have found as a matter of law that
               discriminatory discipline was not involved in firing the female plaintiff for
               “immoral conduct,” an affair.

               A.      Whether the trial court could have found as a matter of law
                       that males were not treated more leniently than the female
                       plaintiff.

               B.      Whether the trial court could have found as a matter of law
                       that none of the male employees were similarly situated with
                       the female plaintiff.

               C.      Whether a female, having made a prima facie case that
                       similarly situated male co-employees have received more
                       lenient treatment than she, must also prove that she was
                       replaced by a male.

       III.    Whether the trial court could have found as a matter of law that the Employee
               Handbook provided no protection to plaintiff against immediate and


       2
       While the plaintiff agreed that her conduct was “wrong”, she adamantly insisted that it was
not immoral, thus apparently attaching no heightened significance to exacting a monetary price for
sex.

                                                 -2-
               discriminatory discharge.

       IV.     Whether the trial court could have found as a matter of law that plaintiff, by
               receiving unemployment benefits, voluntarily waived all remedies for
               discrimination.

      Our review is de novo on the record with no presumption of correctness. Carvell v. Bottoms,
900 S.W.2d 23 (Tenn. 1995).

                                             Discussion

                                                  I

        The relationship between the plaintiff and Baldwin caused “quite a stir” in the small town.
The Mayor and City Administrator called the plaintiff “on the carpet” on April 14, 1997, and the
proceedings were recorded, by consent. The plaintiff testified that at this meeting she was told that
an appeal to the Town Council would be unavailing because a majority of the council members
would vote against her. After this action was filed in August, 1999, the tape of the April 1997
meeting could not be found. The plaintiff accuses the defendant of the deliberate spoilation of the
tape which she argues would confirm the “threat” made to her that an appeal to the council would
be fruitless. In light of our disposition of this case we see no inducing need to discuss the issue of
the missing tape.

                                                 II

        The plaintiff argues that the Employee Handbook constituted a contract of employment,
because it spelled out the terms and conditions of employment including disciplinary and termination
measures. This is not sufficient; to constitute a contract the handbook must contain specific
language demonstrating the Town’s intent to be bound by the provisions in the handbook. See, Rose
v. Tipton County Public Works Department, 953 S.W.2d 690 (Tenn. Ct. App. 1997). Accordingly,
the handbook is not a contract of employment.

       But this conclusion does not end our inquiry. The Handbook provides that dismissal may
be exercised in either of two ways:

               1. As the culmination or final phase of the disciplinary action process,
                as described in Section V of these rules and policies, or

               2. When a Department Head determines that an employee has violated a
               provision of the Town Charter, a Town ordinance, an employee rule or personnel
               policy in such a serious manner that immediate action is required to protect the
               reputation of the Town, or to assure the normal conduct of Town business or
               performance of Town services. In such cases, as determined by the Department
               Head, the employee may be placed on immediate suspension, and a hearing must

                                                 -3-
                be scheduled for the purpose of considering dismissal, before the Town Council
                within ten (10) days of the date the suspension is imposed. Notice of the
                scheduled hearing must be provided to the employee stating the nature of the
                charges, the action being recommended, the reason for it, and advising him/her of
                the right to respond to the charges in writing. . . .

       The Handbook was enacted as an Ordinance of the Town and its provisions must be
enforced. See, Williams v. Maremont Corp., 776 S.W.2d 80, (Tenn. Ct. App. 1988).
Accordingly, the plaintiff was entitled to a hearing by the explicit terms of the Ordinance unless
she waived the right to a hearing.

       When faced with probable termination for the described misconduct while working for
the Town, Plaintiff’s husband urged her to negotiate with the Town so that she could draw
unemployment compensation. Specifically, Mr. Seiber described the situation as follows:

                Q.      Did you know that if she was terminated she would be
                        unable to draw unemployment?
                A.      I sure did and I knew that we couldn’t afford it. And to this
                        day I think it’s more my fault over that than it is anybody’s.
                Q.      What do you mean it’s your fault?
                A.      If she signed - she called Stanley3 and talked to Stanley
                        about - instead of being fired could she change it so she
                        could draw her unemployment. And her and Stanley, I
                        think, or whoever was in the office, she did go down there.
                Q.      Did she - did she draw her unemployment?
                A.      Yes.

        Plaintiff admitted that she told the Town officials she would not proceed with any action
against the Town if they would help her draw unemployment. To facilitate this, the plaintiff
signed a letter of resignation.

        While the record is not entirely clear on the point, the plaintiff’s application for
unemployment compensation was approved by the State. As heretofore noted, when her
eligibility expired, she filed this lawsuit.

       But we advert to the testimony of the plaintiff concerning her dismissal vis-a-vis her
resignation. She testified:

                Q.      And on that meeting of the 14th were you asked to resign.?
                A.      Yes, sir.
                Q.      And you chose not to resign?


       3
           The Mayor.

                                                 -4-
               A.     Yes.
               Q.     And if the City had terminated your services on that date - -
               A.     The City did terminate me.
               Q.     If the city did terminate your services on the 14th, you knew
                      that you had a right to appeal that entire situation.
               A.     That’s correct.
                                           . . . . . .

               Q.     And on the 14th as you left, I guess the reason that you
                      made them terminate you was because you were going to
                      appeal the process.
               A.     That’s correct.
               Q.     And you knew you had a right to do that?
               A.     That’s right.
               Q.     Now, on the 15th, the very next day, you call Mayor Justice
                      and tell him that you might give up those rights.
               A.     That’s correct.
               Q.     And you might not appeal the process.
               A.     Correct.
               Q.     And all you wanted from him was to facilitate your being
                      able to get unemployment benefits.
               A.     Correct.
               Q.     And you in fact told him that if he did that, you would not
                      pursue any action against the City of Oliver Springs.
               A.     That’s right.
                                          . . . . . .

               Q.     . . . [W]hy did you decide to file this lawsuit. . .
               A.     Because of the ugly talk that was still going on.

      In light of the plaintiff’s testimony, we agree with the defendant that she knowingly
waived her right to a hearing.

                                                 III

        The plaintiff next insists “that the trial court could not have found that discriminatory
discipline was not involved in firing [her] for immoral conduct”, because “the only question is
whether a man would also have been fired for having an affair.” She argues that any reasonable
jury could conclude that the Town regularly treated its male employees more leniently than
female employees, because:

       1.      Jeff Borum assaulted his foreman for which he was suspended for one day;

       2.      Houston Hicks was employed following his release from prison for killing his

                                                -5-
               wife;

       3.      Ken Veach was “brought before the town council for lying”;

       4.      Several male employees engaged in a mass walkout by falsely claiming to be sick,
               but were not discharged;
       5.      The Chief of Police has been charged with sexual harassment several times for
               which he has never been disciplined.

        In interpreting the Tennessee Human Rights Act, Tennessee courts may look to federal
claims brought under Title VII. Carr v. United Parcel Service, 955 S.W.2d 832, 835 (Tenn.
1997) In order to prevail on a Title VII claim, a plaintiff must first establish, either by direct or
circumstantial evidence, a prima facie case of discriminatory discharge. McDonnell Douglas
Corp. v. Green, 411 U.S. 792, 93 S. Ct. 1817, 36 L.Ed.2d 668 (1973). There are four elements a
plaintiff must show:

       1.      Membership in a group protected by the act;

       2.      Satisfactory performance in her position;

       3.      Termination of employment despite satisfactory job performance; and

       4.      That the employer attempted to replace the individual with someone outside of the
               protected class.

Id. See also Mitchell v. Toledo Hosp., 964 F.2d 577, 582 (6th Cir. 1992). If a plaintiff
establishes a prima facie case, the burden shifts to the employer to articulate some legitimate,
nondiscriminatory reason for the employee’s termination. Texas Dep’t of Community Affairs v.
Burdine, 450 U.S. 248, 254-56, 101 S. Ct. 1089, 1094-95, 67 L.Ed.2d 207 (1981). If the
employer then offers a legitimate reason for the action, the burden shifts back to the plaintiff to
demonstrate that discrimination was a determinative factor in the decision. McDonnell Douglas,
411 U.S. at 804-05, 93 S. Ct. at 1825-26. However, the ultimate burden of persuasion always
lies with the plaintiff. St. Mary’s Honor Ctr. v. Hicks, 509 U.S. 502, 508, 113 S. Ct. 2742,
2747-48, 125 L.Ed.2d 407 (1993).

       The plaintiff is a member of a protected class but there is no proof that she was replaced
by a person outside of the protected class or received treatment different from that accorded to
otherwise similarly situated individuals outside her protected group. After she resigned, another
woman replaced her.

       The ultimate question in any disparate treatment discrimination case is whether the
protected status ‘was in fact a determining factor in the employment decision.’ Barnes v.
Gencorp, Inc., 896 F.2d 1457, 1465 (6th Cir. 1990). There is no proof of nexus between the
alleged adverse employment action and plaintiff’s gender. She admitted that she was terminated

                                                 -6-
for immoral conduct, and offered no evidence that gender played a part in her termination.

        Plaintiff says that she was treated differently than male employees whom she alleges have
engaged in “known” immoral conduct without being discharged or adversely affected in their
employment. This averment is not supported. She admits that she does not have direct
knowledge of any other employees of the defendant who have been involved in extramarital
affairs and been treated differently from her.

         After learning of the plaintiff’s behavior, Mayor Justice and Administrator Veach became
concerned that there could be some negative effects on the Town if it became known that the
city’s secretary was engaging in sex for money. When accused of a discriminatory discharge, the
employer may defend by articulating a legitimate nondiscriminatory reason for the discharge and
is entitled to summary judgment unless the employee responds with contradiction of the evidence
of the nondiscriminatory reason. Mangrum v. Wal-Mart Stores, Inc. 950 S.W.2d 33 (Tenn. Ct.
App. 1997); see also McKinna v. Lasco, Inc, 1997 WL 340918 at *1 (Tenn. Ct. App. 1997).

        We think the behavior of the plaintiff justified the Town’s action in terminating the
plaintiff since the Employee Handbook provides,

               . . . [A]n employee shall in no way act in any manner which may
               discredit the Town Government, Public officials, Fellow
               Employees, or Themselves. . . The violation of any provision of the
               Town’s Code of Conduct, . . , constitutes a basis for the Town to
               exercise disciplinary measures up to and including dismissal.”

       We agree that the decision to terminate the plaintiff was based on lawful,
nondiscriminatory reasons. She offered no evidence in contradiction of the nondiscriminatory
reason for her discharge.

        The judgment of the Trial Court is affirmed and the cause remanded for collection of
costs below. Costs of appeal are adjudged against Ellen Patty Seiber and her surety.




                                                -7-
                                             Appendix


                                AFFIDAVIT OF S.A. BALDWIN

STATE OF TENNESSEE                     )
COUNTY OF ANDERSON                     )

        I, S.A. Baldwin, after being duly sworn according to law, do hereby provide this
Affidavit regarding my involvement with Ellen Patty Seiber, hereinafter “Patty”, and if called to
the stand would so testify:
        1. I first met Patty through her work for the Town of Oliver Springs. In September 1993,
I applied for a permit for an addition to my trailer. After I went to the Town to get the permit, Patty
asked to borrow some money from me. I agreed to allow her to borrow the money. I went to get
the money and returned to Town Hall to deliver it to her. During the next month, she borrowed
substantial sums of money from me on several different occasions. Finally, one Friday evening in
October, she called me and asked me to drive to Harriman, Tennessee at 6:00 p.m. She told me that
she didn’t have the money to pay me back but that she had another idea instead. I drove to Harriman
and she called me on my car phone and told me to meet her at a hotel. When I arrived at the hotel,
she answered the door wearing only lingerie. We began our physical relationship on that evening.
        2. Over the course of the next 3 years, I provided Patty with money when she asked for
it and she met me regularly so that we could have sex. She met with me three to four times a week.
Eventually I rented an apartment in Oak Ridge for our meetings. She would come to meet me for
sex at the apartment any time she had a reason to be gone from the office. For example, if she left
the office to run an errand, she would stop by the apartment so we could have sex. She would stay
at the apartment for approximately 1-1 ½ hours during the visits that took place during working
hours.
        3. During my involvement with Patty, she often called me from work. If her boss came
in while we were on the phone, she would put me on hold until he was gone again. We used these
conversations to make arrangements to meet for sex and to exchange money.
        Further the affiant saith not.


                                                       S.A. Baldwin




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