Table of Contents

Table of Authorities.......................................................................................... ii

Statement of Related Cases............................................................................... v

Statement of Jurisdiction.................................................................................. 1

Statement of the Issues..................................................................................... 1

Statement of the Case....................................................................................... 2

A. Nature of the Case and Course of Proceedings....................................... 2

B. Statement of Facts.................................................................................. 3

1. Evidence of Discrimination................................................................. 3

2. JetStream’s Deceptive Responses to EEOC Charges.......................... 7

3. JetStream’s Revised Explanation........................................................ 8

4. EEOC’s Explanation......................................................................... 11

5. Spoliation.......................................................................................... 12

C. District Court’s Refusal to Impose Sanctions...................................... 14

D. District Court’s Denial of Motion for New Trial.................................. 16

Summary of Argument................................................................................... 18

Argument........................................................................................................ 19

The district court should have sanctioned JetStream for violating the

EEOC’s recordkeeping regulation because JetStream destroyed or lost

every document that could have contradicted its asserted reason for

not hiring the claimants.............................................................................. 19

A. Standard of Review.......................................................................... 21

B. The district court had discretion to choose among available spoliation sanctions but not to deny sanctions entirely........................................................... 21

1. The district court should have excluded testimony regarding the

destroyed documents.............................................................. 24

2. In the alternative, the district court should have issued an adverse inference instruction............................................................................... 25

Conclusion...................................................................................................... 29

Statement Regarding Oral Argument

Addendum:

A. Pertinent Written Opinion

B. Transcript Pages of Oral Rulings

C. Relevant Statute and Regulation

Certificate of Compliance

Certificate of Privacy Redaction

Certificate of Paper Copies

Certificate of Virus Scan

Certificate of Service

Table of Authorities

Cases

103 Investors I, L.P. v. Square D Co., 470 F.3d 985 (10th Cir. 2006). 22, 24-25

Aramburu v. Boeing Co., 112 F.3d 1398 (10th Cir. 1997)........................ 18, 28

Breaux v. Am. Family Mut. Ins. Co., 554 F.3d 854 (10th Cir. 2009)............... 30

Byrnie v. Town of Cromwell Bd. of Educ., 243 F.3d 93 (2d Cir. 2001)..... 20, 27

Capaci v. Katz & Besthoff, Inc., 711 F.2d 647 (5th Cir. 1983)........................ 27

EEOC v. Am. Nat’l Bank, 652 F.2d 1176 (4th Cir. 1981)............................... 23

Estate of Trentadue ex rel. Aguilar v. United States,

397 F.3d 840 (10th Cir. 2005)........................................................................ 24

Favors v. Fisher, 13 F.3d 1235 (8th Cir. 1994)............................................... 27

Frontier Refining, Inc. v. Gorman-Rupp Co., 136 F.3d 695 (10th Cir. 1998).. 21

Haynes v. Williams, 88 F.3d 898 (10th Cir. 1996)........................................... 29

Helget v. City of Hays, 844 F.3d 1216 (10th Cir. 2017)............................ 21, 24

Henning v. Union Pac. R.R. Co., 530 F.3d 1206 (10th Cir. 2008)...... 21, 24, 26

Hicks v. Gates Rubber Co., 833 F.2d 1406 (10th Cir. 1987).......... 17, 19, 27-29

In re Smith, 10 F.3d 723 (10th Cir. 1993)....................................................... 29

Jones v. Norton, 809 F.3d 564 (10th Cir. 2015).............................................. 26

Lorillard Tobacco Co. v. Engida, 611 F.3d 1209 (10th Cir. 2010)........... 21, 25

Rummery v. Ill. Bell Tel. Co., 250 F.3d 553 (7th Cir. 2001)...................... 20, 28

Talavera v. Shah, 638 F.3d 303 (D.C. Cir. 2011)........................................... 27

Turner v. Pub. Serv. Co., 563 F.3d 1136 (10th Cir. 2009)............. 18, 21-22, 28

Statutes

Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq................ 1

§ 2000e-5................................................................................................ 1

§ 2000e-8(c).......................................................................................... 22

28 U.S.C. § 1291.............................................................................................. 1

28 U.S.C. § 1331.............................................................................................. 1

Rules and Regulations

Fed. R. App. P. 4(a)(1)(B)................................................................................ 1

Fed. R. Civ. P. 59.............................................................................................. 1

Fed. R. Civ. P. 60.............................................................................................. 1

29 C.F.R. § 1602.14.............................................. 3, 12, 16—20, 22-23, 26--29

Statement of Related Cases

There are no prior or related appeals.

Statement of Jurisdiction

The EEOC sued JetStream Ground Services, Inc., for discrimination on the basis of religion and retaliation in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq. Aplt. App. 37. Five claimants intervened as plaintiffs. Aplt. App. 54. The district court had jurisdiction under 28 U.S.C.

§ 1331 and 42 U.S.C. § 2000e-5. Following trial, the jury found for JetStream on April 28, 2016. Aplt. App. 241-63. The district court entered final judgment on the jury’s verdict on April 29, 2016. Aplt. App. 264. On May 27, 2016, the EEOC filed a timely motion for a new trial pursuant to Rules 59 and 60 of the Federal Rules of Civil Procedure. Aplt. App. 7, 266. The district court denied this motion on November 3, 2016. Aplt. App. 303. The EEOC filed a timely notice of appeal pursuant to Rule 4(a)(1)(B) of the Federal Rules of Appellate Procedure on January 3, 2017. Aplt. App. 344. This Court has jurisdiction pursuant to 28 U.S.C. § 1291.

Statement of the Issues

1. Did the district court abuse its discretion by not imposing any spoliation sanction where JetStream violated the EEOC’s recordkeeping regulation, destroyed or lost every document that could have contradicted its asserted reason for not hiring the claimants, and prejudiced the EEOC?

2. Did the district court abuse its discretion by not excluding evidence regarding documents that JetStream destroyed or lost in violation of its duty to preserve them, where the absence of those documents prejudiced the EEOC?

3. Having decided to admit evidence regarding the destroyed documents, did the district court abuse its discretion by refusing to instruct the jury that it should infer that the missing documents would have supported the EEOC’s case?

Statement of the Case

A. Nature of the Case and Course of Proceedings

The EEOC sued JetStream under Title VII, alleging that it refused to hire five Muslim women because they would not remove their headscarves (“hijabs”) at work, hired two other women only after they agreed to work without wearing their hijabs, and then laid off one of those two women several months later because she wore her hijab during breaks. Aplt. App. 37. The five women who had not been hired intervened in the case. Aplt. App. 54.

For five years, JetStream insisted that it had not hired the intervenors based on their applications and/or interviews. Aplt. App. 115-16 (3/29/2009 position statement to Colorado Civil Rights Division), 148-52 (7/9/2014 Feliciano Dep.). When discovery revealed those reasons to be untrue, JetStream changed its story and offered a new and completely different explanation. Almost one year into discovery, JetStream said for the first time that it had relied exclusively on the recommendations of a supervisor from United’s previous vendor. Aplt. App. 138 (8/22/2014 Austin Dep.). JetStream also admitted that it had destroyed critical documents that could have rebutted this new explanation. Aplt. App. 140, 142-44. Later, at trial, JetStream admitted that for five years it had provided false information to the government. Aplt. App. 481, 538.

Prior to trial, the EEOC moved for spoliation sanctions based on JetStream’s destruction of documents in violation of 29 C.F.R. § 1602.14 (reproduced in full in Addendum). Aplt. App. 120, 145. The district court denied this motion. Aplt. App. 222. The EEOC renewed its motion for sanctions at trial, but the district court denied the motion once again. Aplt. App. 239. The jury found for JetStream, Aplt. App. 241-63, and the district court denied the EEOC’s motion for a new trial. Aplt. App. 303. The EEOC appealed. Aplt. App. 344.

B. Statement of Facts

1. Evidence of Discrimination

In 2008, JetStream entered into a contract with United Airlines to provide aircraft cleaning services at Denver International Airport. Aplt. App. 459. In an effort to staff its new Denver operation, JetStream held a job fair for employees of United’s previous vendor, AirServ Corp. Aplt. App. 469. The claimants in this case are former AirServ employees who participated in this job fair. They are all Muslim women who wear hijabs covering their head, neck, and ears because of their religious beliefs. Aplt. App. 482, 498-99, 504, 507-08, 510, 515.

During the time in question, JetStream’s uniform policy was silent about head coverings, including hijabs. Aplt. App. 378, 471-72, 479. An administrative manager who took over shortly after JetStream won the contract, Diana Martinez, testified that Human Resources instructed her to tell applicants that no head coverings were permitted, even for religious reasons. Aplt. App. 464. She repeatedly objected, but Human Resources told her, “absolutely no, stick to the policy.” Aplt. App. 460; see also 462-64. Not until 2011, after the EEOC filed this lawsuit and co-owner David Norris had stepped down from his position as Executive Vice President, did JetStream amend its written policy to authorize “scarves worn as a head dress.” Aplt. App. 388, 523-26, 539-40, 542-43.

The administrative manager during the initial job fair, Brenda Holan, testified that Norris made disparaging remarks about Muslim women in hijabs. “David Norris said that we should get rid of all the female Muslim women that we have, and that all they do is wear headscarves, and that they look like terrorists to the United Airlines’ passengers,” she said. Aplt. App. 467. Norris also told her that “he wasn’t going to tolerate it. They had a uniform to wear. It is not going to be tolerated. And we will not deal with this bullshit.” Aplt. App. 468. Earl Alexander, manager of operations at Denver International Airport, testified that more than one person complained that “Norris said something to the effect that he would never allow these women to wear f’ing things on their head, headdresses or scarves or whatever.” Aplt. App. 541. Norris denied having made any of these comments. Aplt. App. 535.

Norris interviewed three of the claimants in this case: Sadiyo Hassan Jama, Amino (Saida) Warsame, and Safia Abdulle Ali. Aplt. App. 528. He admitted that he asked them about their clothing. Aplt. App. 529-30. Although Norris testified that he was concerned only about their skirts (which the women agreed not to wear), Aplt. App. 530, all three women testified that Norris told them they would have to agree to remove their hijabs if they wanted employment with JetStream. Aplt. App. 505-06, 509, 512-14. They explained that they wore the hijabs for religious reasons and could not remove them. They asked Norris to accommodate this religious practice, but he refused. Aplt. App. 505-06, 509, 512-14. None of the women received job offers. Aplt. App. 474.

Hana Bokku interviewed in pants and a hijab. Aplt. App. 501. A different interviewer told her that she would have to remove her hijab, but she said that she could not. Aplt. App. 500-02. Bokku complained to Norris, who pointed at her hijab and told her, “I am not going to hire you with this.” Aplt. App. 503. Bokku did not receive a job offer. Aplt. App. 474.

Sarah Abdirahman, who also interviewed with someone other than Norris, appeared on a list that JetStream posted of potential hires who needed to report for mandatory drug testing. Aplt. App. 347, 478, 484. Norris saw her when she reported for the drug test, pulled her aside, and told her that he could hire her only if she would agree to wear pants instead of a skirt and agree to take off the hijab at work. Aplt. App. 486-87. Abdirahman explained that she wore the hijab for religious reasons and could not take it off, and Norris responded, “I don’t care about your religion. . . . [S]orry, I can’t hire you.” Aplt. App. 487. Abdirahman left without taking the drug test, and someone crossed her name off the potential hire list. Aplt. App. 349, 485-86.

Amina Oba, who did not wear a hijab when she interviewed, did not ask for permission to wear it because she had heard from other applicants that JetStream would not hire her if she did. Aplt. App. 518-21. Although she believed she needed to wear a hijab in public, she had not worn it while working for AirServ and agreed not to wear it while working for JetStream. Aplt. App. 515-16. Oba wore the hijab on her way to and from work, removed it while she was working, and put it on during breaks so that she could pray. Aplt. App. 516-17. She occasionally saw Norris during her breaks. Aplt. App. 522. When revenue problems forced JetStream to lay off a number of employees several months after the job fair, Frank Austin, director of hub operations, sent Norris and others a list of employees that he recommended for termination. Aplt. App. 376. Austin said, “If there is a desire to make any changes . . . please discuss with me first.” Aplt. App. 432. Austin’s original list did not include Oba. Aplt. App. 376. The next day, he sent a revised list to Norris and others “with changes regarding those names you sent earlier today.” Aplt. App. 351. This time, Oba was on the termination list. Id.

2. JetStream’s Deceptive Responses to EEOC Charges

In early 2009, the intervenors filed discrimination charges with the EEOC. When JetStream received notice of the charges, Marc Desnoyers, who co-owned the company with Norris, instructed administrative manager Martinez not to contact Norris. Aplt. App. 461. He also instructed Director of Human Resources Mariela Feliciano to “make sure [Norris] understands the issues and doesn’t say something prejudicial.” Aplt. App. 372.

JetStream advised the EEOC and the Colorado Civil Rights Division (“CCRD”) on more than one occasion that it had decided not to hire the intervenors based on their applications and/or interviews. See, e.g., Aplt. App. 115-16, 148-52. Specifically, JetStream pointed to scheduling conflicts, incomplete applications, a lack of enthusiasm during interviews, a demand that JetStream provide a public bus pass, controversy over the rate of pay, lack of experience, refusal to wear JetStream’s uniform, and Abdirahman’s failure to complete the required drug test. Aplt. App. 474-76.

From March 29, 2009, when it submitted a position statement to the CCRD, Aplt. App. 115-16, to July 9, 2014, when Feliciano was deposed, Aplt. App. 148-52, JetStream stuck to this story. Documents produced in discovery showed that JetStream’s explanations were demonstrably false, see, e.g., Aplt. App. 477, and JetStream eventually backed away from its claim that it did not hire the intervenors because of their applications and/or interviews. One month after Feliciano’s deposition, and a full year after the EEOC filed suit, hub operations director Austin testified for the first time that JetStream relied exclusively on the recommendations of Arnold Knoke, a supervisor from United’s previous vendor. Aplt. App. 138. At trial, Feliciano admitted that JetStream’s original explanations “had nothing to do with it.” Aplt. App. 481. Norris agreed that JetStream had provided false information to the government for five years. Aplt. App. 538.

3. JetStream’s Revised Explanation

Having abandoned its long-standing explanations for not hiring the intervenors, JetStream asserted at trial that it made job offers based entirely on Knoke’s recommendations. Aplt. App. 480. Consistent with this new explanation, Norris denied having had any input into the decisions. Aplt. App. 536. Austin and Gail Cadorniga, corporate training manager, testified at length that they met in person with Knoke on November 5th, sitting with him as he went through an AirServ schedule listing all of AirServ’s current employees and recommending eighty nine people from that list. Aplt. App. 489-90, 494, 544-45. Knoke, however, testified on the last day of trial that he did not remember meeting with Austin and Cadorniga to provide them with recommendations. Aplt. App. 560, 563-64.

Knoke agreed that he had recommended employees for hire, but said that all of his recommendations had been through e-mails. Aplt. App. 563. This was new information to the EEOC. Although JetStream had provided numerous e-mails in discovery, including e-mails to and from Knoke during the relevant time frame, it never produced any in which Knoke had recommended that JetStream hire specific employees. Knoke could not recall how many people he had recommended in his e-mails or whether he had recommended any of the claimants. Aplt. App. 565.

Austin testified that he had his own copy of the AirServ schedule at the alleged meeting with Knoke, and that he put check marks next to the eighty nine names that Knoke recommended. He testified that he then transferred the check-marked names onto a handwritten list. Aplt. App. 490. Cadorniga testified that she simultaneously highlighted the names on a separate copy of the AirServ schedule and then, after the meeting, searched through applications to find phone numbers. Aplt. App. 548, 550. She said that once she had obtained the phone numbers, she entered all of the names that Knoke had recommended into an Excel spreadsheet, otherwise known as a “pipeline” of potential hires. Aplt. App. 550.

Later that day, JetStream posted a list of eighty nine provisional hires who needed to report for drug testing (“Round 1 list”). Aplt. App. 405-06, 496-97. Cadorniga did not remember who she gave the pipeline to, and she did not know how the Round 1 list got posted. Aplt. App. 554. Cadorniga and Austin both testified that the eighty nine names on the Round 1 list were the same names that Knoke had recommended at the alleged meeting, without any additions or subtractions. Aplt. App. 495, 553.

The Round 1 list did not satisfy JetStream’s need for employees. Aplt. App. 557. One week later, JetStream posted a Round 2 list of twelve more provisional hires. Aplt. App. 347-48. Feliciano, Austin, and Cadorniga all testified that they had no idea how the Round 2 list was prepared or from what information. Aplt. App. 471, 488, 527. Knoke testified that he had sent another e-mail with recommendations prior to the Round 2 list, but, again, he said that he could not remember which individuals he had recommended in his e-mail or to whom he had sent it. Aplt. App. 561-65. He also testified that he did not know whether the Round 2 list included everyone he had recommended. Aplt. App. 566.

4. EEOC’s Explanation

The EEOC asserted that JetStream’s new explanation was untrue, just as its previous, admittedly false explanations had been. The real explanation, the EEOC argued, was that Norris had decided not to employ anyone who refused to remove her hijab at work. Ultimately, co-owner Desnoyers testified, everyone reported to Norris. Aplt. App. 566. Through his authority as Executive Vice President, the EEOC argued, Norris was responsible both for JetStream’s decision not to hire the five intervenors and for its subsequent decision to fire Oba.

As evidence that Norris was involved in hiring, the EEOC showed that Norris conducted job interviews, Aplt. App. 465; sorted applicants into “ABC” piles, Aplt. App. 470, 531-32; participated in nightly meetings with the Human Resources team, Aplt. App. 533-34; e-mailed Holan asking her to offer applicant Maria Lopez a full-time position, which she did, Aplt. App. 410, 466; and cautioned Feliciano not to offer a position to applicant Evelyn Gallett, who was involved in a worker’s compensation proceeding, which she did not, Aplt. App. 407, 537. With respect to layoffs, the EEOC showed that Norris e-mailed Human Resources recommending Mary Berish for layoff because “although [she] works hard[,] I believe she is pushing 70 years old. This is a young person’s game.” Aplt. App. 376. Human Resources accepted Norris’s recommendation and fired Berish. Aplt. App. 473.

The district court acknowledged that the EEOC’s explanation was plausible. At the charging conference, the court said, “I know Mr. Norris and JetStream are taking the position he wasn’t the decisionmaker, [but] the evidence shows essentially that he would tell Mr. Austin or Ms. Feliciano not to hire someone for these reasons, and they would do it. . . . I think the jury could find from the e-mails that went out, he called the shots. And when he said jump, they just said how high.” Aplt. App. 558-59.

5. Spoliation

The essence of the EEOC’s case was that Norris discriminated against the claimants. Thus, the EEOC had to disprove JetStream’s new claim that it relied exclusively on Knoke’s recommendations. The EEOC sought to identify the people whom Knoke had recommended to Austin and Cadorniga, and then compare those names to the names on the Round 1 and Round 2 lists. However, notwithstanding the existence of an EEOC regulation requiring employers to retain employment documents for at least one year, 29 C.F.R. § 1602.14, JetStream destroyed or lost all of the documents that could have proved that the names on the Round 1 and Round 2 lists differed from the names that Knoke had recommended.

Austin testified that when he met with Knoke, he made check marks on a copy of the AirServ schedule and then transferred the checked-off names to a handwritten list on a legal pad. Aplt. App. 490. At some point, however, he threw those notes away. Aplt. App. 491. “Like a grocery list,” he explained. “I go to the grocery store, get my stuff, and I don’t need it anymore. So it served its purpose. I had the names, then they made it into the spreadsheet, so we had that list, it just wasn’t on the original schedule.” Id.

Cadorniga testified that she could not remember what she had done with the highlighted list that she created during her meeting with Knoke. Aplt. App. 555-56. However, she hinted that she might have thrown it away. “There was no reason for me to keep it after I inputted it into the computer,” she said. Aplt. App. 556.

Knoke testified that he made his recommendations via e-mail, rather than through an in-person meeting. Aplt. App. 563. However, JetStream never produced copies of those e-mails to the EEOC, notwithstanding the EEOC’s discovery demand for all documents relating to JetStream’s asserted explanation for not hiring the claimants. See Aplt. App. 292-93.

JetStream argued that it satisfied the EEOC’s discovery request by producing a “version” of the spreadsheet onto which Cadorniga had transferred her notes. Aplt. App. 552. However, the “version” of the pipeline that JetStream produced was dated November 10th – five days after the Round 1 list had already been posted. Aplt. App. 444. JetStream’s attorney conceded that the company’s pipeline of potential hires is “not a static document. It gets updated as time goes by, as people are added, and as they go through the hiring process.” Aplt. App. 231-32. Cadorniga clarified, “The pipeline spreadsheet was what HR used to keep track of all the applicants that were interviewed and the process in where they were in that interview process; meaning, have they filled out an application? Have they gone for a drug test? Where were they in the fingerprint process?” Aplt. App. 551. Accordingly, even though the November 10th version was identical to the Round 1 list, there was no way to tell whether it was the same as the version that pre-dated the Round 1 list.

C. District Court’s Refusal to Impose Sanctions

Prior to trial, the EEOC moved for sanctions based on JetStream’s failure to preserve contemporaneous evidence of Knoke’s recommendations. The EEOC asked the court to prevent JetStream from testifying about the missing documents and to give the jury an adverse inference instruction. Aplt. App. 120, 145.

The judge refused to provide an adverse inference instruction without further evidence that JetStream had destroyed the documents in bad faith. Aplt. App. 222-25. She acknowledged her power to impose a lesser sanction without evidence of bad faith but deferred ruling, stating that she would have to hear the evidence first to determine whether the EEOC was actually prejudiced. Aplt. App. 225-26, 232, 234.

Although hampered by the absence of important documents, the EEOC did its best to poke holes in JetStream’s story that Knoke had recommended all eighty nine of the people on the Round 1 list. Yao Devi and Tolera Mati, two of the people on the Round 1 list, were not on the AirServ schedule that Knoke had e-mailed to Austin on November 5th. Their absence on the schedule suggests that Austin and Cadorniga could not have checked off or highlighted their names during their alleged meeting with Knoke later that day. Silvestre Pryel’s name was spelled differently on the Round 1 list than on the AirServ schedule that Knoke had provided, where it was spelled “Silvester Pruel.” Almaz Beyene had a completely different last name on the Round 1 list than on the AirServ schedule, where she appeared as “Almaz Worku.” And Alma Morales was on the Round 1 list even though the AirServ schedule said that she was “terminated.” Compare Aplt. App. 405-06 (Round 1 list) with Aplt. App. 413-31 (AirServ schedule of employees attached to Knoke’s e-mail earlier that day).

The district court recognized the significance of these differences. In the course of denying JetStream’s Rule 50 motion for judgment as a matter of law, the judge said, “There is . . . sufficient evidence to indicate that JetStream’s story about the AirServ recommendations is false.” Aplt. App. 236. She explained:

AirServ purportedly made these recommendations using the AirServ schedule. And the recommendations from the AirServ schedule were purportedly transferred onto the so-called “round 1” list. But some employees who should not have been on that list, assuming it was, indeed, created from the AirServ schedule, did appear on the list. For example, a Ms. Morales, who had already been fired from AirServ, appeared on the drug test list, as did an individual who did not appear on AirServ’s schedule at all, Mr. Matea.

Similarly, the spellings of the names on the list appear[ ] to be taken from the applications, not from the AirServe schedule. . . .

This discredits JetStream’s story about the recommendations by Mr. Knoke. And, unfortunately, because they destroyed the list, we can’t look at it one way or the other.

Aplt. App. 236-37 (emphasis added.)

At the final jury instruction conference, the EEOC renewed its pending motion for spoliation sanctions. Aplt. App. 239. Although the court had already recognized that the document destruction had prejudiced the EEOC, Aplt. App. 237 (“because they destroyed the list, we can’t look at it one way or the other”), it refused to sanction JetStream in any manner. The court explained, “I don’t think there has been enough of a showing of bad faith.” Aplt. App. 239-40.

D. District Court’s Denial of Motion for New Trial

After the jury found for JetStream and the district court entered final judgment on the jury’s verdict, the EEOC moved for a new trial. Aplt. App. 266. As relevant here, the EEOC argued that JetStream had “gravely prejudiced” its case by destroying documents and that the court therefore should have imposed sanctions for spoliation. Aplt. App. 283. The EEOC said that JetStream’s failure to comply with the EEOC’s recordkeeping regulation, 29 C.F.R. § 1602.14, warranted an adverse inference instruction whether or not JetStream had acted in bad faith. Id. The EEOC also said that the court should have ordered the lesser sanction of excluding all testimony regarding the missing documents. Id.

The court denied the EEOC’s motion. Aplt. App. 303. Acknowledging that 29 C.F.R. § 1602.14 obligated JetStream to preserve documents, the court nevertheless disagreed with the EEOC that violating this regulation automatically warranted sanctions. Sanctions require bad faith, the court said, and the EEOC had not made the “requisite showing.” Aplt. App. 330. In requiring bad faith, the court did not distinguish between an adverse inference instruction and other, lesser sanctions. Id.

The court rejected the EEOC’s citation to Tenth Circuit authority requiring an adverse inference instruction even in the absence of bad faith when an employer destroys documents in violation of 29 C.F.R. § 1602.14. Aplt. App. 330-32. The district court acknowledged that in Hicks v. Gates Rubber Co., 833 F.2d 1406, 1419 (10th Cir. 1987), this Court held that a plaintiff was entitled to an adverse inference instruction after her employer destroyed records in violation of 29 C.F.R. § 1602.14 “pursuant to its routine business practices” and not in bad faith. However, the district court said, although this Court has not “explicitly overruled” Hicks, “subsequent cases have at least implicitly overruled its holding.” Aplt. App. 331 (citing Turner v. Pub. Serv. Co., 563 F.3d 1136, 1149 (10th Cir. 2009); Aramburu v. Boeing Co., 112 F.3d 1398, 1407 (10th Cir. 1997)).

Summary of Argument

For more than five years, JetStream provided false explanations about why it had not hired the claimants. When discovery showed that those reasons were untrue, JetStream changed its story to one that the EEOC could not disprove. The only way for the EEOC to show that JetStream had not relied exclusively on Knoke’s recommendations was to compare the Round 1 list with the names that Knoke gave to Austin and Cadorniga. Such proof was critical to showing that Norris, not Knoke, was responsible for the decision not to hire the five women. Both Austin and Cadorniga testified that they took notes on Knoke’s recommendations, but Austin admitted that he threw his notes away and Cadorniga testified that she had no idea what she had done with her original highlighted list. Cadorniga testified that she transferred her notes to an Excel spreadsheet, and that the Round 1 list was identical to the names on the spreadsheet. However, JetStream destroyed that spreadsheet as well, producing a post-dated “version” rather than one that pre-dated the Round 1 list. JetStream also failed to produce any of Knoke’s alleged e-mail recommendations.

By destroying or losing every document that could have disproved its story, JetStream violated 29 C.F.R. § 1602.14. Its actions prejudiced the EEOC, which is precisely the situation that 29 C.F.R. § 1602.14 is intended to prevent. Violation of the EEOC recordkeeping regulation, coupled with prejudice to the EEOC, required the district court to sanction JetStream for spoliation.

At a minimum, the district court should have excluded all testimony related to the missing documents. The district court erred in justifying its decision not to exclude testimony based on an absence of bad faith, as this Court has held that bad faith is not required to exclude evidence as a sanction for spoliation.

In the alternative, the district court should have granted an adverse inference instruction. Hicks rejects any bad faith requirement for an adverse inference instruction when an employer destroys documents in violation of 29 C.F.R.

§ 1602.14 and the destruction prejudices the opposing party. The district court’s refusal to follow this binding precedent is inexplicable, as this Court has not overruled it and other circuits continue to cite it for its persuasive value.

Argument

The district court should have sanctioned JetStream for violating the EEOC’s recordkeeping regulation because JetStream destroyed or lost every document that could have contradicted its asserted reason for not hiring the claimants.

JetStream destroyed or lost every contemporaneous document containing Knoke’s recommendations, making it impossible to determine whether his recommendations were identical to the names on the Round 1 list. It destroyed the notes that Austin claimed to have taken during his alleged in-person meeting with Knoke, and it destroyed or lost Cadorniga’s notes as well. Aplt. App. 490-93, 555-56. Although it claims to have turned over the Excel spreadsheet with Knoke’s recommendations, Aplt. App. 552, it did not do so – it turned over, instead, a pipeline dated five days after JetStream had already posted the Round 1 list. Aplt. App. 444 Finally, JetStream failed to produce Knoke’s e-mail recommendations. JetStream’s document destruction violated 29 C.F.R.

§ 1602.14, an EEOC recordkeeping regulation requiring employers to retain employment records for at least one year. See Byrnie v. Town of Cromwell Bd. of Educ., 243 F.3d 93, 108 n.5 (2d Cir. 2001) (29 C.F.R. § 1602.14 covers informal interview notes); Rummery v. Ill. Bell Tel. Co., 250 F.3d 553, 559 (7th Cir. 2001) (employer must retain “the actual employment record itself,” even if it destroys rough drafts).

Evidence that the names on the Round 1 list were different from the names Knoke had recommended would have eviscerated JetStream’s explanation for not hiring the claimants. The missing documents might have shown that JetStream accepted some but not all of Knoke’s recommendations, calling into question the basis for its other hiring decisions. The missing documents might even have shown that Knoke actually did recommend the intervenors, meaning that someone—possibly Norris—deleted their names before posting the Round 1 list.

Although the EEOC tried to cast doubt on whether JetStream had relied exclusively on Knoke’s recommendations, the district court correctly observed during the Rule 50 conference that those documents were “one of the few, if not the only piece of evidence of the recommendations that were actually made.” Aplt. App. 222. Without the missing documents, JetStream’s explanation was largely irrefutable. The EEOC was, accordingly, severely prejudiced in presenting its case. Because the district court refused to counteract this prejudice by imposing sanctions for spoliation, this Court should reverse and remand for a new trial.

A. Standard of Review

This court reviews the denial of spoliation sanctions for abuse of discretion. Turner, 563 F.3d at 1150. A district court abuses its discretion by committing a legal error. Lorillard Tobacco Co. v. Engida, 611 F.3d 1209, 1213 (10th Cir. 2010). This court reviews purely legal questions de novo. Frontier Refining, Inc. v. Gorman-Rupp Co., 136 F.3d 695, 699 (10th Cir. 1998).

B. The district court had discretion to choose among available spoliation sanctions but not to deny sanctions entirely.

Spoliation sanctions are “proper” when a party has a duty to preserve evidence, the party destroys the evidence, and the destruction prejudices the adverse party. Turner, 563 F.3d at 1149; Henning v. Union Pac. R.R. Co., 530 F.3d 1206, 1220 (10th Cir. 2008). Although a court has “broad discretion” in determining the appropriate spoliation sanction, Helget v. City of Hays, 844 F.3d 1216, 1226 (10th Cir. 2017), it has no discretion not to impose sanctions where those conditions are met. See 103 Investors I, L.P. v. Square D Co., 470 F.3d 985, 988-89 (10th Cir. 2006) (sanctions are “appropriate” where party violates duty to preserve evidence and other party is prejudiced); cf. Turner, 563 F.3d at 1150 (not an abuse of discretion to deny sanctions where prejudice is only theoretical).

All of the factors warranting the imposition of spoliation sanctions are present here. JetStream had a duty to preserve employment records because Title VII requires employers to “(1) make and keep such records relevant to the determinations of whether unlawful employment practices have been or are being committed, (2) preserve such records for such periods, and (3) make such reports therefrom as the Commission shall prescribe by regulation or order . . . .” 42 U.S.C. § 2000e-8(c) (reproduced in full in Addendum). In accordance with its authority, the EEOC has issued a regulation instructing employers on their recordkeeping obligations. 29 C.F.R. § 1602.14.

The EEOC’s regulation provides that “Any personnel or employment record made or kept by an employer (including but not necessarily limited to . . . application forms submitted by applicants and other records having to do with hiring . . .) shall be preserved by the employer for a period of one year from the date of the making of the record or the personnel action involved, whichever occurs later. . . . Where a charge of discrimination has been filed, or an action brought by the Commission or the Attorney General, against an employer under Title VII . . . the respondent employer shall preserve all personnel records relevant to the charge or action until final disposition of the charge or action.” Id.

This recordkeeping regulation, which has been in effect since 1972, “was clearly designed to protect Title VII plaintiffs from an employer’s destruction of possibly damaging evidence.” EEOC v. Am. Nat’l Bank, 652 F.2d 1176, 1195 (4th Cir. 1981). As the Fourth Circuit has explained, “[e]mployers have been on notice since the earliest days of Title VII’s enforcement of the critical importance of the maintenance of employment records.” Id. at 1195-96.

Notwithstanding this law, JetStream intentionally destroyed documents. Additionally, the district court acknowledged that JetStream’s document destruction prejudiced the EEOC. Critical to the EEOC’s case was disproving JetStream’s assertion that it relied exclusively on Knoke’s recommendations. This would have allowed the jury to find that Norris, not Knoke, was responsible for the decision not to hire the five Muslim women. As the district court recognized, however, “because they destroyed the list, we can’t look at it one way or the other.” Aplt. App. 237.

Under these circumstances, the district court was obligated to choose among available sanctions to counteract prejudice to the EEOC. The EEOC asked the court to exclude testimony regarding the destroyed documents and to issue an adverse inference instruction. Aplt. App. 120, 145, 183; see Helget, 844 F.3d at 1226 (potential spoliation sanctions include striking witnesses, excluding evidence, issuing an adverse inference instruction, or dismissing claim). In choosing the appropriate sanction, the district court “ʻshould [have] molded [the applicable sanction] to serve the prophylactic, punitive, and remedial rationales underlying the spoliation doctrine.’” Helget, 844 F.3d at 1226 (citation omitted); see also Estate of Trentadue ex rel. Aguilar v. United States, 397 F.3d 840, 862 (10th Cir. 2005) (“The district court has discretion to fashion an appropriate remedy depending on the culpability of the responsible party and whether the evidence was relevant to proof of an issue at trial.”).

1. The district court should have excluded testimony regarding the destroyed documents.

The district court abused its discretion by not excluding testimony regarding the destroyed documents. This Court has called the exclusion of evidence “the least severe sanction which would be appropriate to balance out the prejudice to the [opposing party].” 103 Investors, 470 F.3d at 989. Contrary to the district court’s conclusion, Aplt. App. 332, a court may exclude evidence as a sanction for spoliation whether or not documents have been destroyed in bad faith. 103 Investors, 470 F.3d at 988-89; Henning, 530 F.3d at 1220 n.6. Indeed, this Court has expressly rejected a bad faith limitation on excluding evidence as a spoliation sanction. Affirming the exclusion of testimony in a case not involving bad faith, the Court explained, “Defendant was not required to show that plaintiff acted in bad faith in destroying evidence in order to prevail on its request for spoliation sanctions.” 103 Investors, 470 F.3d at 989.

Prior to trial, the district court correctly recognized its ability to exclude testimony regardless of bad faith. It withheld ruling, however, “to see what is elicited at trial and how this plays itself out at trial.” Aplt. App. 225. This deferred ruling was an abuse of discretion, as it effectively denied the EEOC’s motion to exclude evidence. The court could not see “what [was] elicited at trial” without admitting the evidence in the first place.

Later, the district court wrongly said that it did, in fact, need to find bad faith in order to exclude testimony. In its order denying the EEOC’s motion for a new trial, the district court merged its analysis of the adverse inference instruction and the exclusion of evidence, and wrongly assumed that both types of sanctions require a showing of bad faith. Aplt. App. 330-32. The court was wrong about this, and it abused its discretion by applying a standard contrary to controlling law. See Lorillard, 611 F.3d at 1213 (legal error constitutes abuse of discretion).

2. In the alternative, the district court should have issued an adverse inference instruction.

Having decided not to exclude evidence regarding the destroyed documents, a decision that the court knew would prejudice the EEOC, the district court should have granted the EEOC’s request for an adverse inference instruction. The EEOC proposed the following instruction:

In this case, you have heard testimony about a list of employee recommendations allegedly given to JetStream by AirServ in 2008. The Court has previously found that JetStream intentionally lost or destroyed this list. Accordingly, you should infer that had the list been produced at trial for you, the contents of the list would have been unfavorable to JetStream and would have been favorable to the Plaintiffs. Specifically, you are to assume that the destroyed list of recommendations included recommendations that Mses. Abdulle, Abdirahman, Bokku, Jama, and Warsame were good workers and that they should be hired by JetStream.

Aplt. App. 184.

An adverse inference instruction is an especially effective sanction for spoliation. This Court recognizes that it is “a powerful sanction[,] as it ‘brands one party as a bad actor’ and ‘necessarily opens the door to a certain degree of speculation by the jury, which is admonished that it may infer the presence of damaging information in the unknown contents of [the destroyed evidence].” Henning, 530 F.3d at 1219-20.

The district court admitted testimony that Knoke had recommended all of the people who appeared on the Round 1 list, but it refused to issue an adverse inference instruction because it wrongly believed that such an instruction requires a finding of bad faith. Aplt. App. 332. While this is true in other contexts that do not involve a violation of 29 C.F.R. § 1602.14, see Jones v. Norton, 809 F.3d 564, 580 (10th Cir. 2015), bad faith is unnecessary when a party destroys documents in violation of that regulation. Hicks, 833 F.2d at 1419 & n.5.

This Court has plainly held that violations of 29 C.F.R. § 1602.14 warrant an adverse inference instruction whether or not the spoliation involves bad faith. Although the employer in Hicks destroyed documents “pursuant to its routine business practices” and not in bad faith, this Court considered that distinction irrelevant. “We believe that because Gates violated § 1602.14 by destroying the personnel records,” the Court said, “Hicks is entitled to the benefit of a presumption that the destroyed documents would have bolstered her case.” 833 F.2d at 1419.

Other circuits have reached the same conclusion. See Talavera v. Shah, 638 F.3d 303, 311-12 (D.C. Cir. 2011) (non-accidental document destruction in violation of 29 C.F.R. § 1602.14 warrants adverse inference instruction, citing Hicks); Byrnie, 243 F.3d at 109 (2d Cir.) (“where, as here, a party has violated an EEOC record-retention regulation, a violation of that regulation can amount to a breach of duty necessary to justify a spoliation inference in an employment discrimination action,” citing Hicks); Favors v. Fisher, 13 F.3d 1235, 1239 (8th Cir. 1994) (document destruction in violation of 29 C.F.R. § 1602.14 “entitled Favors to a presumption of pretext,” citing Hicks); Capaci v. Katz & Besthoff, Inc., 711 F.2d 647, 661 n.7 (5th Cir. 1983) (EEOC’s allegation that employer destroyed documents in violation of 29 C.F.R. § 1602.14 is “important and troubling”). Only the Seventh Circuit disagrees. See Rummery, 250 F.3d at 558 (7th Cir.) (bad faith necessary for adverse inference instruction even when documents are intentionally destroyed in violation of 29 C.F.R. § 1602.14).

The district court in the instant case acknowledged Hicks but refused to follow it. “Plaintiffs correctly note that Hicks has been cited in other cases and has not been explicitly overruled by the Tenth Circuit,” the court said. “Nevertheless, subsequent cases have at least implicitly overruled its holding, and have been very clear that “if [an] aggrieved party seeks an adverse inference to remedy . . . spoliation, it must also prove bad faith.” Aplt. App. 331. The court cited Turner, 563 F.3d at 1149, and Aramburu, 112 F.3d at 1407, as having “implicitly overruled” Hicks. Id.

The district court did not mention that neither Turner nor Aramburu cited Hicks. Indeed, the Aramburu panel voiced its erroneous assumption that this Court had never addressed spoliation. See Aramburu, 112 F.3d at 1407 (“[T]he parties have not directed us to precedent from this circuit on the evidentiary doctrine of spoliation and we cannot locate any such precedent . . . .”). Presumably, had the Aramburu panel been aware of Hicks, it would have followed it.

In any event, in refusing to rely on Hicks, the district court ignored a bedrock principle of stare decisis: one Tenth Circuit panel cannot overrule the decision of another Tenth Circuit panel. In re Smith, 10 F.3d 723, 724 (10th Cir. 1993). As this Court has explained, “A published decision of one panel of this court constitutes binding circuit precedent constraining subsequent panels absent en banc reconsideration or a superseding contrary decision by the Supreme Court. A pertinent corollary to this principle is that when faced with an intra-circuit conflict, a panel should follow earlier, settled precedent over a subsequent deviation therefrom.” Haynes v. Williams, 88 F.3d 898, 900 n.4 (10th Cir. 1996). This rule applied equally to the district court.

Thus, Hicks controls. Document destruction in violation of 29 C.F.R.

§ 1602.14 warrants an adverse inference instruction even in the absence of bad faith, so long as there has been prejudice to the opposing party. Here, the prejudice was real. Having chosen to admit evidence of Knoke’s recommendations, the district court should have counteracted the prejudice by instructing the jury that the missing documents would have been favorable to the EEOC.

Conclusion

The district court’s refusal to order spoliation sanctions prejudiced the EEOC and resulted in an unfair trial. JetStream had free rein to assert its eleventh-hour defense, and the EEOC had no effective way to disprove JetStream’s explanation. The EEOC moved for the exclusion of evidence and an adverse inference instruction to remedy the prejudice that JetStream had caused. The district court was free to grant either of those requests but not to deny them both. Its failure to sanction JetStream for spoliation was an abuse of discretion. See Breaux v. Am. Family Mut. Ins. Co., 554 F.3d 854, 866 (10th Cir. 2009) (“ʻA district court abuses its discretion where it commits a legal error. . . .’”) (citation omitted).

For the foregoing reasons, the EEOC urges this Court to reverse the final judgment and remand for a new trial.

Respectfully submitted,

JAMES L. LEE

Deputy General Counsel

JENNIFER S. GOLDSTEIN

Associate General Counsel

ELIZABETH E. THERAN

Acting Assistant General Counsel

/s/ Gail S. Coleman

Attorney

U.S. EQUAL EMPLOYMENT OPPORTUNITY

COMMISSION

Office of General Counsel

131 M Street, NE, Room 5SW24L

Washington, DC 20507

(202) 663-4055

gail.coleman@eeoc.gov