Federal Courts Grapple With Former TIAA Advisor's Racism and Retaliation Charges

Plaintiff Barrington Boyd ("Boyd") is a licensed investment advisor with Series 7 and 66 qualifications. (Compl. at 2, ¶ 9). He is an African-American man. (Compl. at 2, ¶ 9). Boyd began working for Defendants Teachers Insurance and Annuity Association of America and TIAA-CREF Individual and Institutional Services, LLC (collectively, "TIAA") in June 2005, and his employment was terminated on March 15, 2015. (Compl. at 2, ¶¶ 10-11). On March 24, 2015, TIAA submitted to the Financial Industries Regulatory Authority ("FINRA") a Uniform Termination Notice for Securities Industry Regulation ("U-5"). (Compl. at 2, ¶ 12). In the section on the U-5 form provided for "Termination Explanation," TIAA stated, "Did not meet internal performance expectations for position. No violation of industry rules, no customer harm, not securities related." (Compl. at 2, ¶ 12).

Boyd filed two Charges of Discrimination with the Equal Employment Opportunity Commission ("EEOC"), asserting that TIAA discriminated against him on the basis of race, and on June 16, 2015, Boyd and TIAA participated in a mediation with the EEOC. (Compl. at 2, ¶ 13-14). As a result of that mediation, on June 26, 2015, Boyd and TIAA entered into a Separation Agreement and Release in Full ("Separation Agreement" or "the Agreement"). (Compl. at 2, ¶ 15). Pursuant to that Agreement, on July 22, 2015, TIAA submitted a revised U-5, replacing the language in the Termination Explanation section with "Disagreement regarding internal policy requirements for position. No violation of industry rules, no customer harm, not securities related." (Compl. at 3, ¶ 19). In the "Amendment Explanation" box immediately below the Termination Explanation, TIAA stated, "The failure to meet internal policy expectations precipitated a conversation with the employee as to what those expectations were and should be. Ultimately, it was the inability to reach an understanding as to what the job expectations were that resulted in the separation." (Compl. at 3, ¶ 20).

Boyd objected to the additional language in the Amendment Explanation, and TIAA again amended the U-5 on December 7, 2015, stating in the Amendment Explanation section, "Amended to accurately reflect the intent of the previous amendment." (Compl. at 3, ¶ 22-23).

Boyd alleges that he subsequently applied for numerous positions in the securities industry and was denied as a result of the inaccurate language provided in the U-5 form, as well as a result of negative references provided by TIAA. (Compl. at 4, ¶ 24-28).  . . .

SIDE BAR: Let's make sure that we have a firm grasp of the core issue in dispute before the District Court.  

The March 2015 U5 submitted by TIAA to FINRA stated under the "Termination Explanation":

Did not meet internal performance expectations for position. No violation of industry rules, no customer harm, not securities related.

On July 22, 2015 (after the execution of the June 26, 2015, Separation Agreement), TIAA submitted a revised U-5 whereby the "Termination Explanation" was amended to:

Disagreement regarding internal policy requirements for position. No violation of industry rules, no customer harm, not securities related.

. . .

The failure to meet internal policy expectations precipitated a conversation with the employee as to what those expectations were and should be. Ultimately, it was the inability to reach an understanding as to what the job expectations were that resulted in the separation.

[T]IAA concedes that the Separation Agreement constitutes a valid contract. However, TIAA argues (1) that Boyd's breach of contract claim is barred by a release under the Separation Agreement, and (2) that even if Boyd did not release this claim, TIAA's actions-as alleged in Boyd's Complaint-do not establish a plausible claim for breach of contract.

TIAA will file with the appropriate depository within the Financial Industry Regulatory Authority (FINRA) the amended explanation of discharged: disagreement regarding internal policy requirements for position. No violation of industry rules, no customer harm, not securities related on your Uniform Notice for Securities Industry Regulation or U-5. To be clear, you agree not to challenge in any way the accuracy and/or proprietary [sic] of the U-5 explanation above that TIAA will file with FINRA and to release TIAA pursuant to Paragraphs 11 and 12 below, from any claim related to the filing or content of that U-5 amendment.

Paragraph 3 of the Separation Agreement

This release of claims does not extend to your contractual right to enforce the terms of this Agreement or to any claims that may not be lawfully released.

Paragraph 11 of the Separation Agreement

prevent Boyd from suing to compel TIAA to submit the U-5 with the agreed-upon language or from suing for damages based on TIAA's failure to submit the U-5 with agreed-upon language. Further, Paragraph 11 unambiguously preserves Boyd's right to file suit to enforce the terms of the Separation Agreement, including TIAA's promise in Paragraph 3 to amend the U-5 to reflect the agreed-upon language.

[T]aking the factual allegations in Boyd's Complaint as true, a jury could find that by placing the language of "failure to meet internal policy expectations" into the U-5, just below the Termination Explanation section, TIAA's actions "substantially defeat[ed] the purpose of the agreement or [went] to the heart of the agreement, or can be characterized as a substantial failure to perform." . . .

[(1)] that Boyd's retaliation claim is barred by a release under the Separation Agreement, and (2) that even if Boyd did not release this claim, TIAA's actions -- as alleged by Boyd's Complaint -- do not establish a plausible claim of retaliation under Title VII.

Boyd alleges that TIAA retaliated against him by "interfering with his job search." (Compl. at 5, ¶ 39). Specifically, he alleges that TIAA falsely amended his U-5 form and provided negative referrals to prospective employers. (Compl. at 5, ¶ 39). Other courts have allowed cases to proceed past the motion to dismiss stage based on an allegation of negative employment references. See e.g., Harris v. Ann's House of Nuts, No. 4:14-cv-185, 2015 WL 3902017, at *4 (E.D.N.C. June 24, 2015); Alberts v. Wheeling Jesuit Univ., No. 5:09-cv-109, 2011 WL 2132983, at *4 (N.D. W. Va. May 25, 2011). As alleged, the combination of the Amendment Explanation and TIAA's negative referrals led potential employers to deny employment to Boyd. Employers generally rely on references, and employers in the securities industry rely on information in the U-5 form in making hiring decisions. As a result, a "reasonable worker" might be dissuaded from making a charge of discrimination if he knows that he will likely be seriously hindered in his search for employment elsewhere as a result of making his charge. See White, 548 U.S. at 68. Thus, providing negative referrals and false information in a U-5 form are sufficient to qualify as adverse employment actions.

Finally, Boyd sufficiently alleges that TIAA's adverse employment action was caused by his decision to engage in protected activity. Alleging causation in a prima facie retaliation case is "less onerous" than meeting the but-for causation standard ultimately required to prove retaliation. Foster v. Univ. of Maryland-Eastern Shore, 787 F.3d 243, 251 (4th Cir. 2015). Close temporal proximity between when the employer learns of the protected activity and the adverse employment action can be enough to make a prima facie claim for causation. Id. at 253. Prima facie causation can also be found when the adverse employment action occurs "upon the employer's first opportunity" to carry out a harmful act to the employee. Templeton, 424 F. App'x at 251; see also Price, 380 F.3d at 213 (assuming without deciding that "an adverse action taken at the first opportunity satisfies the causal connection element of the prima facie case").

Despite having ample opportunity to marshal evidence to prove his claims for breach of an employment separation agreement and retaliation in violation of Title VII of the Civil Rights Act of 1964, the plaintiff Barrington Boyd ("Boyd") has not put forth any proof at all to support his allegations that Teachers Insurance and Annuity Association of America and TIAA-CREF Individual & Institutional Services, LLC (collectively, "TIAA") impeded his employment search by submitting FINRA filings with which he disagrees or providing negative employment references. In fact, all of the record evidence shows that TIAA's FINRA filings complied with its independent obligations to FINRA and were in accordance with an agreement the parties entered into to settle Mr. Boyd's prior EEOC claims, and TIAA has not even been asked to provide, much less provided, any employment references for Mr. Boyd. For those reasons, as well as the independent reason that Mr. Boyd's retaliation claim is time-barred, this Court should not permit this case to reach a jury and should enter summary judgment in TIAA's favor. If this Court determines, however, that Mr. Boyd can proceed on liability, it should nevertheless hold that he cannot put on any evidence of damages at trial, as discovery has now closed and he has not provided a damages computation in violation of the Federal Rules of Civil Procedure. 

TIAA complied with Paragraph 3 of the Agreement, and submitted a revised Form U5 on July 22, 2015 (the "July Form U5" [Exh. 3].) Per the FINRA-promulgated form, each amendment to a Form U5 requires an "explanation for amendment." [Boyd 63:2-13; Declaration of James Brogan ("Brogan Decl.," attached as Exh. B) ¶¶ 4, 8.] The Agreement did not address the "explanation for amendment" whatsoever, and did not impose on TIAA the requirement that it incorporate any particular language for that section. [Boyd 52:8-10.] TIAA included the following language on the July Form U5 to explain why TIAA was amending the Form U5: "The failure to meet internal policy expectations precipitated a conversation with the employee as to what those expectations were and should be. Ultimately, it was the inability to reach an understanding as to what the job expectations were that resulted in the separation." [Exh. 3; Brogan Decl. ¶¶ 6-7.] The language that TIAA included for the "explanation for amendment" on the July Form U5 is standard language that TIAA includes on amended Form U5's, and was not drafted with regard to Boyd's prior EEOC charges or with any discriminatory or retaliatory intent. [Brogan Decl. ¶¶ 9-12.] 

After TIAA filed the July Form U5, Mr. Boyd's counsel Java Warren objected to the "explanation for amendment" language. [Exh. 5; Declaration of Heather White ("White Decl.," attached as Exhibit C) ¶¶ 6-7.] Between September and December 2015, TIAA and Mr. Warren discussed how to clarify the "explanation for amendment." [Exh. 5; White Decl. ¶¶ 6-7.] Mr. Boyd's counsel drafted a new explanation that read, "Amended to accurately reflect the intent of the previous amendment." TIAA submitted a second revised Form U5 on December 7, 2015 (the "December Form U5") with the language proposed by Mr. Warren replacing the prior "explanation for amendment" section. [Compl. ¶ 23; White Decl. ¶ 8.] 

Mr. Boyd has not produced any evidence to the contrary. Rather, Mr. Boyd has merely speculated that because employers declined to offer him employment after he provided names of potential references from TIAA, TIAA must have provided negative references. He could not identify any person at TIAA with whom any potential employer spoke, or the dates or content of such any such communications. [See, e.g., Boyd 70:18-71:22, 72:4-74:15, 83:21-84:2, 84:7- 85:3, 85:10-20, 85:23-87:1, 87:2-88:7, 88:8-91:21, 91:22-92:18.] And there is some evidence that Mr. Boyd-not TIAA-voluntarily disclosed to potential employers that he is currently engaged in litigation with TIAA, after which he alleges the employer declined him an employment opportunity. [Boyd 148:16-149:10 and Exh. 7.] 

Nor has Mr. Boyd produced any evidence that any potential employer declined to hire Mr. Boyd because of his amended U5 forms. For example, Mr. Boyd testified in his deposition that he submitted job applications for which he was not selected for an interview, but he did not know whether they ever reviewed any Form U5 related to his application. [Boyd 132:9-15, 133:10-16, 134:12-23, 137:20-138:3, 138:4-24, 139:2-140:11, 143:10-23, 144:16-19, 145:1-14, 147:8-17.] This is true even though Mr. Boyd served third-party subpoenas on a number of employers to whom he submitted job applications. [Declaration of Rebecca Lindahl ("Lindahl Decl.," attached as Exhibit E), ¶ 3.] In sum, Mr. Boyd has not produced a shred of evidence that any potential employer even reviewed, much less based an employment decision upon, any of Mr. Boyd's Form U5s or any action by TIAA.

[T]he settlement agreement did not prohibit TIAA from including the disputed language on the Form U5. The settlement agreement was clearly directed at amending the termination explanation in the U5. However, FINRA required TIAA to provide an explanation for the amendment. The settlement agreement was silent as to how to explain the amendment. TIAA's explanation provides context to the reason for termination contained in both U5s. As a licensed security professional represented by counsel in drafting the settlement agreement, the district court rightfully concluded that Boyd cannot claim ignorance of the fact that FINRA required an explanation for the amendment to excuse his failure to negotiate language for the amendment. See Helms v. Schultze, 588 S.E.2d 524, 527 (N.C. Ct. App. 2003) ("[T]he court's only duty is to determine the legal effect of the language used and to enforce the agreement as written." (internal quotation marks omitted)). Moreover, the mere fact that the agreement was silent as to how TIAA should have explained the amendment does not render the settlement agreement ambiguous. See Myers v. Myers, 714 S.E.2d 194, 198 (N.C. Ct. App. 2011) (recognizing contract "is ambiguous if the writing leaves it uncertain as to what the agreement was" (brackets and internal quotation marks omitted)). . . . 

Please, show me the cases those regulators brought in the past 50 years in which member firms were charged with permitting racial or sexual discrimination/harassment. And what's the message? The regulators unwittingly encourage intolerant behavior by not deeming these practices to be conduct that offends basic notions of "high principles" and "honor." Do the SROs see such conduct as nothing more than an indiscretion? 

Wall Street is no longer a quaint road between a church, on one end, and a river, on the other. It is a metaphor for the entire capitalist world. And that world, which we all live in, is populated with minorities and women. Try as Wall Street has for generations to marginalize those two groups, the fact is now inescapable. The securities markets in the United States are in a battle with international markets. If we don't re-tool our industry to include more minorities and women in meaningful roles, we will inevitably lose out to more enlightened competitors. The NYSE may well become a luxury residential condominium. NASD may well become an off-shore gambling site. I can think of nothing more disgusting than to know that you are capable of doing a job but are denied employment solely based upon conditions of your birth. 

I hear these heart-rending stories virtually every day when I am contacted by potential clients. If this cancer is tolerated by Wall Street's regulators, how will we ever destroy it? If the NYSE and NASD see fit to bar folks from the brokerage industry because they have had felony convictions for drunk driving, then it's high time we roll out the same artillery to combat illegal discrimination.

FINRA arbitrators have the power to refer to FINRA for investigation any matter or conduct that has come to an arbitrator's attention during and in connection with the arbitration. Unfortunately, arbitrators rarely undertake regulatory referrals; and, FINRA displays no interest in investigating or sanctioning its member firms' defamatory / materially false statements filed on Form U5 or with the Central Registration Depository ("CRD"). In contrast, FINRA fines, suspends, and bars associated persons when they file false disclosures on their Forms U5 or via CRD, or on their firm's annual compliance questionnaires. Yet another example of FINRA's disparate treatment of its member firms and their disenfranchised associated persons.

• Boyd
• TIAA-CREF
• EEOC
• Discrimination
• Retaliation
• U5
• Defamation
• Racism
• African American
• FINRA
• BrokeAndBroker
• Bill Singer