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Castleberry v. Sti Group, 2017 U.S. App. LEXIS 12611 (3rd Cir. July 14, 2017) Ambro, C.J.  Castleberry and Brown brought suit asserting that their termination was racially motivated, citing to various examples of discrimination such as remarks made at the workplace and unfair work treatment.  The District Court dismissed their complaint.  Because Plaintiffs state plausible claims of employment discrimination, we reverse and remand.

Castleberry and Brown were hired by STI Group in March 2010 as general laborers and supervised by managers from both STI Group and Chesapeake. Shortly after being assigned to a particular worksite, the only other African-American male on the crew was fired.

Plaintiffs allege that, when they arrived at work on several occasions, someone had anonymously written “don’t be black on the right of way” on the sign-in sheets. They also assert that although they have significant experience working on pipelines (and more so than their non-African-American coworkers), they were only permitted to clean around the pipelines rather than work on them. They claim that, when working on a fence-removal project, a supervisor told Castleberry and his coworkers that if they had “nigger-rigged” the fence, they would be fired. Seven coworkers confirmed that occurred. Following this last incident, Plaintiffs reported the offensive language to a superior and were fired two weeks later without explanation. They were rehired shortly thereafter, but then terminated again for “lack of work.”

Plaintiffs brought suit in District Court against both STI and Chesapeake alleging harassment, discrimination, and retaliation in violation of 42 U.S.C. § 1981. As to the harassment claim, the Court determined it could not survive a motion to dismiss because the facts pled did not support a finding that the alleged harassment was “pervasive and regular,” which it deemed a requisite element to state a claim under § 1981. The Court similarly found that there were not sufficient facts alleged demonstrating intent to fire Plaintiffs because of their race or that their termination was racially motivated. Finally, regarding Plaintiffs’ retaliation claim, it determined Plaintiffs failed to demonstrate that an objectively reasonable person would have believed that the comment made by their supervisor was unlawful—a necessary element to plead retaliation under § 1981.

Here Plaintiffs alleged that their supervisor used a racially charged slur in front of them and their non-African-American coworkers. Within the same breath, the use of this word was accompanied by threats of termination (which ultimately occurred). This constitutes severe conduct that could create a hostile work environment. Moreover, the allegations could satisfy the “pervasive” alternative established by the standard. Plaintiffs alleged that not only did their supervisor make the derogatory comment, but “on several occasions” their sign-in sheets bore racially discriminatory comments and that they were required to do menial tasks while their white colleagues (who were less experienced) were instructed to perform more complex work. Whether these allegations are true and whether they amount to “pervasiveness” are questions to be answered after discovery (for example, after determining how many times racial remarks were scribbled on the sign-in sheets). Plaintiffs have pled a plausible claim of a hostile work environment under either theory—that the harassment was “severe” or “pervasive.”

But most importantly, what Defendants and the District Court ignore is that in every case they cite the claim was resolved at summary judgment. Under the McDonnell-Douglas framework, a claim of employment discrimination necessarily survives a motion to dismiss so long as the requisite prima facie elements have been established. That is so because “it may be difficult” for a plaintiff to prove discrimination “[b]efore discovery has unearthed relevant facts and evidence.” Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512 (2002). Here, Plaintiffs have established those elements, and thus their claims should not have been dismissed at this early stage of the litigation.

Plaintiffs still would have been afforded the opportunity to rebut the stated reasons as pretextual following discovery. The District Court therefore was incorrect in dismissing this claim, thereby jettisoning the McDonnell Douglas burden-shifting framework.

Plaintiffs appeal the dismissal of their retaliation claim, which alleges that they were fired for reporting the racially discriminatory remark made by their supervisor.

Here the District Court dismissed this claim because it was unreasonable for Plaintiffs to believe that a single incident of a discriminatory remark (which was the only incident they reported in their complaint to Defendants) could amount to unlawful activity. J.A. at 20 (citing Breeden, 532 U.S. at 271). However, this reasoning rests on the Court’s finding that an isolated discriminatory remark cannot amount to a violation of § 1981 by incorrectly applying the “pervasive and regular” standard. As discussed above, a single incident can amount to unlawful activity, particularly when applying the correct standard. Accordingly, the case should be remanded on this claim so that it may proceed to discovery.

Plaintiffs have sufficiently alleged claims of harassment, disparate treatment discrimination, and retaliation under § 1981 to carry them over the motion-to-dismiss hurdle. We reverse and remand so that the McDonnell Douglas burden-shifting framework can be applied as the case proceeds through discovery.