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Appeals Court Rules 'Retaliatory Witch Hunt' Responsible for Investigation of State Agent

Wednesday, July 24, 2013
By Anne A. Marchessault

A senior special agent for the investigations division of the Illinois Gaming Board raised an issue of fact that he was retaliated against for assisting in a co-worker's lawsuit against the board, the U.S. Court of Appeals for the Seventh Circuit ruled July 16 (Hobgood v. Ill. Gaming Bd., 7th Cir., No. 11-1926, 7/16/13).

The gaming board investigated and fired Thomas Hobgood after he helped fellow board employee John Gnutek organize and research his Title VII of the 1964 Civil Rights Act and Racketeer Influenced and Corrupt Organizations Act lawsuits against the board. An administrative law judge subsequently reduced Hobgood's discharge to a suspension.

“When properly construed in Hobgood's favor, the evidence could support a jury finding that the defendants fixated on firing him, ignored evidence of his innocence, and circumvented investigatory safeguards to pursue a set of baseless charges because he had helped Gnutek sue the Gaming Board,” Judge David F. Hamilton wrote, joined by Judges William J. Bauer and Ann Claire Williams.

The appeals court reversed summary judgment in the board's favor on Hobgood's retaliation claims under Title VII and the First Amendment to the U.S. Constitution under the Civil Rights Act of 1871 (42 U.S.C. § 1983), because it found that Hobgood presented a “convincing mosaic of circumstantial evidence” that the board retaliated against him for protected activity. 

Investigation Had 'Predetermined Outcome.'

In 2006, Hobgood helped Gnutek prepare his Title VII lawsuit against the gaming board alleging favoritism in the enforcement operations supervisor position selection process and for retaliation from an earlier sex bias suit.

After Hobgood spoke with the deputy administrator of the enforcement division, Luis Tigera, he provided Gnutek a memorandum about the gaming board's selection process.

The interim administrator of the gaming board also asked Hobgood to deliver a sealed envelope to Gnutek. The envelope contained an “officer action request,” approving the promotion of the individual selected for the enforcement operations supervisor position and his Social Security number.

After Gnutek added a RICO claim to his lawsuit, Hobgood helped him research and draft the new allegations.

Tigera and Mark Ostrowski, then administrator of the gaming board, suspected that Hobgood might have recorded Tigera in creating the memo for Gnutek. They asked the state police to investigate whether Hobgood had broken any laws. Ostrowski also asked Luke Hartigan, then chief investigator for the department of revenue's internal affairs division, to investigate Hobgood.

The state police concluded that there was no evidence to substantiate the allegations against Hobgood.

When Hartigan then began his internal investigation, the gaming board's general counsel Mike Fries told him that the board “wants discharge to be considered as the first option.”

According to the chief of staff of the department of revenue, supervisors should not suggest firing an employee before an internal investigation has even started.

Hartigan focused his investigation on Hobgood's assistance with Gnutek's lawsuit. Relying on Hartigan's report of his investigation and what the court called “its predetermined outcome,” the department of revenue decided to charge Hobgood with misconduct.

The state's labor relations department ultimately recommended three charges for the gaming board to pursue against Hobgood: (1) conduct unbecoming an employee for possessing certain documents found in his office; (2) failure to care for official documents by giving Gnutek the officer action request; and (3) unauthorized use of confidential information by taking notes of personal information of William Cellini, whose activities were detailed in Gnutek's RICO suit.

Hobgood defended himself before the gaming board, and the labor relations department recommended that the board remove the third charge against him. The board refused to amend the charges against Hobgood, and decided to fire him.

On appeal to the Illinois Civil Service Commission, an ALJ changed Hobgood's discharge to a 60-day suspension.

Hobgood sued the board and several board employees, alleging that he was retaliated against for helping Gnutek in his Title VII and RICO suits. The U.S. District Court for the Northern District of Illinois granted summary judgment to the board defendants, and Hobgood appealed. 

Providing Lawsuit Assistance Protected Activity

The appeals court found that Hobgood engaged in protected activity under Title VII and the First Amendment when he helped Gnutek organize and file his lawsuit.

According to the district court, Hobgood's activity was not protected because the board defendants did not know about it at the time Hobgood provided the help.

“The relevant time for knowledge, though, is when the alleged retaliation took place, not the time the protected activity occurred,” Hamilton explained. He found that, as Hobgood alleged, Tigera and Ostrowski prompted the state police and Hartigan to investigate him only after they realized that he had helped Gnutek.

“Hartigan's report on his investigation, which was provided to all defendants, contained several references to Hobgood's help for Gnutek and easily supports the inference that Hobgood's help for Gnutek's lawsuit was a significant motivating factor, and could well have been a but-for cause, in the investigation and ultimate discipline of Hobgood,” Hamilton wrote. He concluded that Hobgood's help was protected activity that was known to the named defendants at the time of the adverse action. 

Pre-Judging Employee Evidence of Retaliatory Motive

Hobgood can advance his retaliation claim because he presented a “convincing mosaic” of circumstantial evidence causally linking his protected activity with his firing, the appeals court said.

“The ultimate question the parties and the court always must answer is whether it is more likely than not that the plaintiff was subjected to the adverse employment action because of his protected status or activity,” Hamilton wrote. “To answer that question, the individual 'bits and pieces' presented by the plaintiff must be put into context and considered as a whole.”

A piece of evidence that would be insufficient to demonstrate causation standing on its own can be enough to defeat summary judgment when considered together with other facts suggesting retaliatory intent, the appeals court said.

“When viewed as a comprehensive whole,” Hamilton wrote, “Hobgood's evidence easily supports a reasonable inference that he was the victim of a retaliatory witch hunt.”

As Hobgood alleged, Fries informed Hartigan before the investigation had even begun that the gaming board wanted discharge to be considered “as the first option,” the court found.

“Perhaps it is true, as defendants argue, that Fries's statement standing alone does not create an inference about why the Gaming Board wanted Hobgood fired, though this extraordinary departure from policy and custom could, if believed by the jury, support adverse inferences about the defendants' motives,” Hamilton wrote.

The court found that the context surrounding Fries's statement reasonably suggested that the gaming board had a retaliatory motive for Hartigan's investigation into Hobgood, which Hartigan conducted after the state police had already cleared Hobgood of any wrongdoing.

“Yet the evidence allows a reasonable inference that the defendants had pre-judged the question and had decided to terminate Hobgood anyway, even if it meant deviating from so basic and sound a standard policy as refraining from pre-judging outcomes in disciplinary investigations,” Hamilton wrote. “A jury could infer from this departure from policy that the Gaming Board's predetermined outcome was retaliatory.”

Furthermore, the court noted, Hartigan told Hobgood during the investigation, “Let's get past the point of whether you did it or not. We know you did it.”

According to the court, a reasonable jury can infer retaliatory intent from a supervisor's encouraging an employee who has engaged in protected activity to “confess” to wrongdoing or risk discharge.

The appeals court found that Hobgood presented sufficient evidence to call into question the board's proffered reason for his discharge--that Tigera and Ostrowski sincerely believed he had illegally recorded his conversation with Tigera.

“Where an employer's reason for a termination is without factual basis or is completely unreasonable,” Hamilton wrote, “that is evidence that an employer might be lying about its true motivation.”

“The initiation and scope of Hartigan's investigation were both suspicious and support an inference that the investigation was not prompted by the defendants' belief that Hobgood had illegally recorded Tigera, but was instead prompted by the defendants' desire to construct a case for Hobgood's termination after they discovered that he had been helping Gnutek with his lawsuit,” the appeals court concluded.

The “breadth” of unsubstantiated charges brought against Hobgood supported the inference of retaliatory intent in his discharge, the court added.

John A. Baker of Baker, Baker, & Krajewski in Springfield, Ill., represented Hobgood. Mary Ellen Welsh of the attorney general's office in Chicago represented the board defendants. 

Text of the opinion is available at

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