On September 20, 2010, the Tennessee Supreme Court issued two opinions rejecting application of the McDonnell Douglas burden-shifting analysis to state law retaliatory discharge claims: Gossett v. Tractor Supply Company, and Kinsler v. Berline, LLC. This case originated in Tennessee state court, but was removed to the federal court based on diversity jurisdiction. The case involves a claim for retaliatory discharge under Tennessee common law, and Young Touchstone moved for summary judgment under the federal court summary judgment standard in July 2010. In light of the Tennessee Supreme Court rejecting McDonnell Douglas in Gossett and Kinsler, the parties requested leave to brief the impact of those decisions on the pending summary judgment motion. Under the Erie doctrine, federal courts should apply federal law on matters of procedure, but should follow state law on substantive matters when sitting in diversity jurisdiction. While McDonnell Douglas is generally thought of as a procedural device, the Erie analysis is much more complicated than that in light of Guaranty Trust v. York and Gasperini v. Center for Humanities, Inc. For instance, Judge Posner of the Seventh Circuit recently ruled in Gacek v. American Airlines, Inc., that an Illinois Supreme Court's decision rejecting McDonnell Douglas was based on substantive as opposed to procedural considerations. Even applying Judge Posner's reasoning to this case, however, shows that the Tennessee Supreme Court's decisions in Gossett and Kinsler were procedural. Gossett and Kinsler were only concerned that McDonnell Douglas interfered with state law summary judgment procedures, resulting in the possibility that an employer could prevail under McDonnell Douglas without ever satisfying Tennessee's procedural requirements for summary judgment. Because they relied so heavily on procedure and made no substantive proclamations of Tennessee law, the Court should apply federal summary judgment precedent.
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