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Donaldson v. Trae-Fuels, LLC

United States District Court, W.D. Virginia, Charlottesville Division

December 5, 2019

TRAE-FUELS, LLC, et al., Defendants.


          Hon. Glen E. Conrad Senior United States District Judge

         Michael Donaldson filed this action against Trae-Fuels, LLC ("Trae-Fuels") and EnviroTech Services, Inc. ("EnviroTech"), asserting that he was terminated because of his disability, in violation of the Americans with Disabilities Act ("ADA"), 42 U.S.C. §§ 12101-12213. The case is presently before the court on the defendants' motion for summary judgment. The motion has been fully briefed, and the court heard oral argument on the motion on November 25, 2019. For the reasons set forth below, the motion will be denied with respect to Donaldson's claim of discriminatory termination.[1]

         Factual Background

         The following facts are either undisputed or presented in the light most favorable to Donaldson. See Anderson v. Liberty Lobby. Inc., 477 U.S. 242, 255 (198) ("The evidence of the nonmovant is to be believed, and all justifiable inferences are to be drawn in his favor [when ruling on a motion for summary judgment].").

         Donaldson worked as an accountant and controller for various companies for 32 years. Donaldson Decl. ¶ 2, Dkt. No. 34. On October 17, 2013, Donaldson began working as the controller for Trae-Fuels, a start-up company in Bumpass, Virginia that manufactured heating pellets.[2] Id. ¶ 3; Compl. ¶ 1, Dkt. No. 1. EnviroTech, a corporation headquartered in Colorado, was the managing member of Trae-Fuels and jointly controlled Donaldson's employment. Comp. ¶ 92. Donaldson reported directly to John Frink, the general manager of Trae-Fuels, and Kevin Whyrick, the chief financial officer of EnviroTech. Compl. ¶¶ 30-31. Chris LaRocco, EnviroTech's corporate strategist, and Beth Aleman, its director of human resources, also supervised the performance of certain duties assigned to Donaldson. Id. ¶¶ 35-36.

         During the first few months of Donaldson's employment, Trae-Fuels was not yet producing heating pellets. Donaldson Decl. ¶ 11. Instead, the defendants were still preparing the plant to be operational. Id. It is undisputed that Trae-Fuels "had little to no revenue as it began production." Defs.' Reply Br. 18, Dkt. No. 33.

         As Trae-Fuels' controller, Donaldson was responsible for creating financial reports and informing Frink of the company's financial position. Donaldson Decl. ¶ 5. Donaldson also managed Trae-Fuels' payroll system and performed other human-resource functions, such as maintaining employee files and sending hiring and insurance paperwork to Aleman. Id. ¶ 6. Donaldson was not responsible for any sales, inventory, or production decisions, and he did not have authority to sign checks, send wire transfers, or borrow against Trae-Fuels' line of credit at UMB Bank without the approval of a supervisor. Id. ¶¶ 8-10, 15.

         From the time of his hiring in October 2013 until mid-May 2014, Whyrick, Frink, LaRocco, and Aleman advised Donaldson that they were satisfied with his performance. Id. ¶ 16. Whyrick approved Donaldson's monthly financial reports during that period, and Whyrick and LaRocco responded favorably to the financial data and other information Donaldson provided. Id. ¶ 18; see also Pl.'s Ex. 7, Dkt. No. 29-1 ("Great work! Keep those sales guys on the straight and narrow."); Pl.'sEx. 9, Dkt. No. 29-1 ("Okay, great data [Donaldson]!"); Pl.'s Ex. 11, Dkt. No. 29-2 ("FYI, here's an email from [Donaldson]. This tells me that he is getting it. I think he will be the guy that can take this stuff and run with it, and make sure that it is accurate."). The only negative written feedback Donaldson received during that period pertained to his handling of paperwork required of new employees and his method of creating journal entries for certain invoices, which was viewed as being too time-consuming. See Defs.' Ex. 1, Dkt. No. 27-5; Defs.' Ex. 2, Dkt. No. 27-6; Defs.' Ex. 8, Dkt. No. 27-12.

         On March 25, 2014, Donaldson was hospitalized after experiencing significant blood loss. Donaldson Decl. ¶ 20. In April of 2014, Donaldson learned that he had a mass on his pancreas. Id. A biopsy was performed on May 2, 2014. Pl.'s Ex. 24, Dkt. No. 29-2. A subsequent pathology report indicated that the mass was "[p]ositive for malignant cells characteristic of well differentiated adenocarcinoma." Pl.'s Ex. 24, Dkt. No. 29-2. On Thursday, May 15, 2014, Donaldson was informed that he had "Stage IV inoperable adenocarcinoma pancreatic cancer," and that he would need to see an oncologist on Monday, May 19, 2014. Donaldson Decl. ¶ 21. Donaldson shared the diagnosis with Frink and advised Frink that he would need to take time off for the oncology appointment. Id.

         During the oncology appointment, Donaldson was diagnosed with pancreatitis. Id. ¶ 22; Pl.'s Ex. 24. He was taken directly to the hospital, where he remained until May 21, 2014. Donaldson Decl. ¶¶ 22-23. Donaldson called Frink and informed him of the situation. Id. ¶ 22.

         While Donaldson was in the hospital, he emailed Whyrick regarding preliminary financial projections. Pl.'s Ex. 25, Dkt. No. 29-2. In response, Whyrick indicated that he knew that Donaldson had been out with "health issues" and inquired as to "when [Donaldson would] be back in the office to get the team together to work on this." Id. In reply, Donaldson advised Whyrick that he was awaiting instructions from his doctors, and that he would let Whyrick know as soon as possible. Id. Later that same day, Whyrick sent Donaldson another email advising that the defendants were in the process of trying to find a controller to temporarily work part-time while Donaldson was "going through this," and that they "would need [Donaldson] there to get [the temporary employee] up to speed." Id. On another occasion, Whyrick, who is a survivor of Stage III colon cancer, "asked [Donaldson] if [his] cancer was slow or aggressive, to which [Donaldson] responded that it was slow." Donaldson Decl. ¶ 38.[3]

         During his hospital stay, Donaldson and his wife learned that they had been chosen to adopt a baby who was scheduled to be born on May 23, 2014. Donaldson Decl. ¶ 23. Upon being released from the hospital, Donaldson and his wife flew to Utah to adopt the baby. Id. Prior to traveling, Donaldson drove to Trae-Fuels and dropped off his company phone to be repaired while he was gone. Id.

         Donaldson returned to work on May 27, 2014. Id. That same day, Frink asked Donaldson to meet with him. Id. ¶ 24. When Donaldson entered Frink's office, he learned that Aleman was participating in the meeting via telephone. Id. According to Donaldson, "Aleman started off the meeting by saying 'I'm documenting,' and then began interrogating [Donaldson] about... leaving [his] work phone at work during [his] trip to Utah." Id. Donaldson explained that the phone was not charging properly, and that he had asked that the phone be sent for repair. Id. Donaldson further explained that he was reachable on his personal cell phone. Id. At that point, "Aleman backed off her criticism ... and the call ended." Id.

         On May 29, 2014, Whyrick and Donaldson engaged in email communications regarding Trae-Fuels' financial position and the fact that the company would need to draw on its line of credit with UMB Bank. Pl.'s Ex. 47, Dkt. No. 29-2. Donaldson emphasized that Trae-Fuels' account was down to $115, 000, that $60, 000 would be debited the following day for a loan payment, and that the following week was a payroll week. Id., In response, Whyrick advised Donaldson that he would "just need to let Yolanda Russell [at the bank] know that [he needs] to borrow the money and how much." Id. Whyrick also indicated that Donaldson would need to submit a borrowing base report to the bank each month, which should be signed by Frink. Id.

         On May 30, 2014, Donaldson sent Russell a borrowing base report via email. Pl.'s Ex. 48, Dkt. No. 29-2. In the email, which was copied to Whyrick and Frink, Donaldson advised Russell that Trae-Fuels "would like to draw the eligible $669, 981." Id. On June 3, 2014, after speaking with Russell and confirming that the borrowing base report was acceptable, Donaldson informed Russell that Trae-Fuels would only like to draw $500, 000 immediately and reserve the remaining balance for future needs. Pl.'s Ex. 49, Dkt. No. 29-2. That same day, Whyrick emailed Russell and confirmed that he agreed with the borrowing schedule proposed by Donaldson. Pl.'s Ex. 50, Dkt. No. 29-2.

         On June 4, 2014, Aleman and LaRocco traveled to Virginia to meet with Donaldson and Frink. Donaldson Decl. ¶ 27. The parties dispute what was said during the meeting. According to the declarations submitted by the defendants, the meeting was a "counseling session," held at the request of the "management group," after Donaldson submitted financial reports that were "inaccurate and missing important data." Whyrick Decl. ¶ 10, Dkt. No. 27-2; LaRocco Decl. ¶ 3, Dkt. No. 27-4; see also Aleman Decl. ¶ 9, Dkt. No. 27-1 ("I... became aware from ... Whyrick that the financial reports that Mr. Donaldson prepared were incomplete and inaccurate. Mr. Whyrick asked me to travel from EnviroTech's Colorado headquarters to Trae[-]Fuels in Virginia to participate in a face to face employee counseling session with Mr. Donaldson on June 4, 2014."). According to Donaldson's declaration, however, LaRocco and Aleman did not tell Donaldson that he needed to improve his performance. Donaldson Decl. ¶ 31. Instead, Aleman and LaRocco advised Donaldson and Frink that EnviroTech was unhappy with Trae-Fuels' financial losses, and that Donaldson needed to ensure that Frink understood Trae-Fuels' financial status. Donaldson Decl. ¶ 28.

         On June 5, 2014, LaRocco sent Whyrick and other EnviroTech executives a list of "findings" from his visit to Trae-Fuels' plant. Defs.' Ex. 12, Dkt. No. 27-16. LaRocco observed that "[Frink] is hampered by day to day operational issues and struggles to meet startup and expansion expectations." Id. As for Donaldson, LaRocco noted that "Donaldson's general disposition favors scrutiny which lends to being overanalytical," that he "lacks the ability to translate [Trae-Fuels'] finances into actionable plans," and that he "also is lacking the confidence to voice his concerns to [Frink] in a way that protects them from missing profitability expectations and cash management objectives (financial analysis)." Id.

         On June 6, 2014, Whyrick emailed Aleman and requested that she and LaRocco "document" the meeting that was held with Donaldson and Frink. Pl.'s Ex. 28, Dkt. 29-2. Whyrick noted that "corrective actions should also be documented should [Donaldson] not show improvement." Id. Aleman subsequently completed and signed an EnviroTech form titled "Employee Counseling Notice." Defs.' Ex. 3, Dkt. No. 27-7. Under the heading "Reason for Notice," Aleman indicated that she, LaRocco, and Frink met with Donaldson to "establish performance expectations, specifically for the next two weeks." Id. Aleman noted that LaRocco "explained the necessity and the importance of how vital the controller position is to the success of Trae-Fuels and how this position needs to be current at all times with financial reporting, including current cash flow." Id. Aleman further noted that Donaldson was advised that he "needs to meet daily with [Frink] to discuss current financials and updates," and that "he needs to focus on performing at a higher level and not in the day-to-day 'weeds' of things going on in the office." Id. Aleman also noted that she had "removed all HR employee file responsibilities (except the 5 exempt manager positions) from [Donaldson's] responsibility" and reassigned them to the office manager. Id. Under the heading "Next Step if Infraction is repeated," Aleman indicated that "[t]his was not discussed, as this first meeting was to convey the expectations that are needed for the controller position and more specifically, for [Donaldson] to understand he needs to produce more qualitative/quantitative work and be a hands on controller." Id. Although the Employee Counseling Notice includes a line for the employee to sign and date, Aleman did not have Donaldson sign the form or provide him with a copy of it. Id.; see also Donaldson Decl. ¶ 30.

         On Monday, June 9, 2019, Aleman emailed LaRocco to inform him that Donaldson had left that morning for a second medical evaluation and would not be returning until Friday at the earliest. Pl.'s Ex. 42, Dkt. No. 29-2. Aleman also noted that Donaldson had left his company phone for Frink to use while he was gone. Id. Ina subsequent email, Aleman questioned the amount of time that Donaldson would be away from the office. See id ("[P]er conversations with [Frink and the office manager], he told them he was going to be gone 2 days, then it did go to 3 days when you and I were there. Now it is 4 days and no communication??").

         On June 17, 2014, Donaldson emailed Frink, LaRocco, and Whyrick, and advised them that he had requested that the bank transfer the remaining balance of Trae-Fuels' line of credit. Pl.'s Ex. 52, Dkt. No. 29-2. Donaldson noted that Trae-Fuels would be left with only $35, 000 in cash, after paying invoices and issuing payroll checks. Id. In response, Whyrick indicated that he thought that it was time for the members to make a "capital call*" and that he "would recommend that this be an amount that can sustain [Trae-Fuels] through this slow period in revenue." Id.

         That same day, Frink forwarded Aleman a copy of his handwritten notes from the June 4, 2014 meeting with Donaldson. Pl.'s Ex. 38, Dkt. No. 29-2. In the email, Frink indicated that there had been "some improvement" and that he would "stay in touch with [Aleman] as things progress." Id.

         At some point thereafter, LaRocco and Michelle Mills, EnviroTech's controller, were asked to evaluate Donaldson's performance. On June 26, 2014, LaRocco drafted a memorandum summarizing "Performance Observations for Michael Donaldson" for the period of June 4, 2014 to June 20, 2014. Defs.' Ex. 4, Dkt. No. 27-8. In the memorandum, LaRocco noted that he had asked Donaldson to perform a cash-flow analysis on June 9, 2014, and that Donaldson's "work product was substandard." Id. LaRocco also noted that when he asked Donaldson for the "current total obligations of Trae-Fuels for cash-flow and [a] current cash analysis" on June 17, 2014, Donaldson "neglected to divulge the values of open Purchase Orders and unpaid Credit Card statements which were needed to have the total obligations value." Id. LaRocco then provided the following "General observations":

Mr. Donaldson is very good at accounting. Mr. Donaldson is very detailed in his communications, and is very detailed as an auditor. Mr. Donaldson has failed however in his responsibilities to keep Trae-Fuels['] cash position in line with production outputs.
Example: On 6-4-14 Mr. Donaldson drew on Trae-Fuels['] line of credit to pay for SG&A, and general operating costs. Hence the draw against the line and used towards paying for operating costs and current obligations in this scenario meant that Trae-Fuels had gone cash negative/broke.

Id. Mills also prepared an undated report criticizing Donaldson's performance. Defs.' Ex. 10, Dkt. No. 27-14. In the report, Mills indicated that Donaldson had "his own way of thinking and doing things" and did not respond well to suggestions, that he took time to perform duties that other employees should be doing, that he was slow to use the company's industrial and financial systems ("IFS") program, that concepts had to be explained multiple times, and that Donaldson was "more concerned on the things that don't matter, than the big items he should be doing and reporting." Id. Mills further opined that Donaldson was "not performing as the controller of a company," that he was not taking ...

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