Edward Yashenko v.  Harrah’s Nc Casino Company, LLC

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
 EDWARD YASHENKO,
Plaintiff-Appellant,
v. No. 05-1256 
HARRAH’S NC CASINO COMPANY,
LLC,
Defendant-Appellee. 
Appeal from the United States District Court
for the Western District of North Carolina, at Bryson City.
Lacy H. Thornburg, District Judge.
(CA-03-226-2)
Argued: March 15, 2006
Decided: April 27, 2006
Before MOTZ and TRAXLER, Circuit Judges,
and James P. JONES, Chief United States District Judge for the
Western District of Virginia, sitting by designation.
Affirmed by published opinion. Judge Motz wrote the opinion, in
which Judge Traxler and Judge Jones joined.
COUNSEL
ARGUED: Michael Geoffrey Wimer, WIMER & JOBE, Arden,
North Carolina, for Appellant. Jeffrey Andrew Lehrer, FORD &
HARRISON, L.L.P., Spartanburg, South Carolina, for Appellee. ON
BRIEF: Karen M. Tyner, FORD & HARRISON, L.L.P., Spartan-
burg, South Carolina, for Appellee.

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OPINION
DIANA GRIBBON MOTZ, Circuit Judge:
This case presents two questions of first impression for this circuit.
First, does the Family and Medical Leave Act ("FMLA"), 29
U.S.C.A. § 2601 et seq. (West 1999 & Supp. 2005), provide a cov-
ered employee with an absolute right to be restored to his previous job
after taking approved leave? And second, is a private employer that
contracts with an Indian tribe subject to suit for race discrimination
under 42 U.S.C.A. § 1981 (West 2003) when it enforces a contractual
tribal preference policy? For the reasons that follow, we believe we
must answer both questions in the negative and so affirm the judg-
ment of the district court.
I.
In June 1996, the Eastern Band of Cherokee Indians ("Tribe")
entered into a Management Agreement with Harrah’s North Carolina
Casino Company ("Harrah’s") concerning the operations of the
Tribe’s gaming enterprise. Under the terms of the Agreement, the
Tribe granted Harrah’s "the exclusive right and obligation to develop,
manage, operate and maintain the Enterprise and any expansion
thereof." The Tribe delegated its own "obligations and rights under
this Agreement" to the Tribal Casino Gaming Enterprise ("TCGE"),
an "instrumentality of the Tribe" with authority to conduct the busi-
ness of the casino on behalf of the Tribe. The Agreement thus func-
tioned as an employment contract under which Harrah’s worked as
the manager for the Tribe’s delegate, the TCGE. Through this
arrangement, Harrah’s provided its "experience and expertise" in
managing the gaming operation and training the tribal members.
As part of this Management Agreement, Harrah’s received "the
exclusive responsibility and authority to direct the selection, hiring,
training, control and discharge of all employees performing regular
services for the Enterprise in connection with the maintenance, opera-
tion, and management of the Enterprise and the Facility and any activ-
ity upon the Property." The Agreement provided that Harrah’s would
"give preference in recruiting, training and employment to qualified
members of the Tribe and their spouses and adult children in all job
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categories of the Enterprise." Accordingly, Harrah’s assented to the
following order of preference: "(a) Enrolled Tribal members; (b)
Spouse, parent or children of Tribal members; (c) Other Native Amer-
icans; (d) Others from the Cherokee community; (e) Others from the
region; and (f) Others from the state of North Carolina."
All employees hired by Harrah’s to staff the casino pursuant to this
Agreement were considered employees of the TCGE, although Har-
rah’s maintained supervisory authority over them. Harrah’s and
TCGE classified many of these employees as "leased" employees;
leased employees worked at the casino, Harrah’s paid their salaries
and benefits, and TCGE reimbursed Harrah’s for these expenses. In
the years after the Agreement went into effect, there was a gradual
shift in positions from Harrah’s to the TCGE. By 2003, all employees
that Harrah’s hired were TCGE, rather than Harrah’s, employees.
In 1994, Harrah’s hired Edward Yashenko to work for the parent
company in Louisiana; in 1997, he transferred to the North Carolina
casino, where he became a "leased" employee. In 1999, Yashenko
received a promotion to the position of Manager - Employee Rela-
tions, a job he held until his discharge in July 2003. During his tenure
at the North Carolina casino, Yashenko requested and was granted
several medical leaves of absence, all of which were approved and
most of which were taken under the FMLA. Specifically, Yashenko
received approximately ten weeks leave from December 19, 2000,
until February 26, 2001; approximately fifteen weeks leave from May
1 until August 23, 2001; six weeks leave from March 13 until April
23, 2002; and fourteen weeks leave from May 1 until August 12,
2002. After each leave of absence, Yashenko returned to the same
job, with no reduction in pay or benefits.
In early May 2003, Yashenko requested another medical leave of
absence for a serious health problem related to heart surgery. Harrah’s
approved the leave as FMLA leave, and Yashenko remained on leave
for eleven more weeks, until July 21, 2003. While Yashenko was out,
Harrah’s informed him that the company was reorganizing in a way
that eliminated his position (a Harrah’s position), as well as the posi-
tion of Employment Manager (a TCGE position). In their stead, Har-
rah’s created two new TCGE positions that consolidated the
responsibilities of the eliminated jobs. The company’s goal was to
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form "a synergy . . . by having . . . one manager responsible for the
life of the employee from hiring to termination." Tom Fagg, the
Human Resources director at Harrah’s, invited Yashenko to apply for
the new positions, as well as other available TCGE jobs. (There were
no available jobs at Harrah’s because the Agreement "prevented [Har-
rah’s] from hiring new employees to work for Harrah’s.") Despite the
invitation and the many descriptions of job openings Fagg sent him,
Yashenko decided not to apply for any position because, he
explained, he was taking medication, and did not feel up to it, and
because his doctors assertedly recommended that he not do so. Upon
his return from FMLA leave on July 21, 2003, Harrah’s discharged
him.
Yashenko then filed suit in state court against Harrah’s alleging
violations of his rights under the FMLA because Harrah’s did not
restore him to his job at the end of his leave. Harrah’s removed the
case to federal court. After both parties moved for summary judg-
ment, the district court granted Yashenko permission to file an
amended complaint in which he added claims of race discrimination
under § 1981 and of wrongful discharge in violation of North Caro-
lina public policy. The parties then filed cross motions for summary
judgment on these additional claims. On January 20, 2005, the district
court granted summary judgment to Harrah’s on both the FMLA and
§ 1981 claims, and dismissed the wrongful discharge claim without
prejudice. Yashenko noted a timely appeal.
II.
In recognition of the growth of "single-parent households and two-
parent households in which the single parent or both parents work,"
the importance of parental participation "in early childrearing" and
"care of family members who have serious health conditions," the
inadequacy of "employment policies to accommodate working par-
ents," and the lack of "job security for employees who have serious
health conditions," 29 U.S.C.A. § 2601(a), Congress enacted the Fam-
ily and Medical Leave Act in 1993. In this legislation, Congress
sought "to balance the demands of the workplace with the needs of
families, to promote the stability and economic security of families,
. . . to promote national interests in preserving family integrity," and
"to entitle employees to take reasonable leave for medical reasons, for
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the birth or adoption of a child, and for the care of a child, spouse,
or parent who has a serious health condition." Id. § 2601(b)(1)-(2).
The legislature sought to "accomplish" these purposes "in a manner
that accommodates the legitimate interests of employers." Id.
§ 2601(b)(3).
The FMLA provides covered employees with two types of rights
and protections. First, covered employees who take a leave of absence
for family or medical reasons qualify for numerous substantive enti-
tlements. Specifically, these employees are "entitled to a total of 12
workweeks of leave during any 12-month period" for family- and
health-related matters, id. § 2612(a)(1), and have a right "to be
restored by the employer to the position of employment held by the
employee when the leave commenced" or to "an equivalent position
with equivalent employment benefits, pay, and other terms and condi-
tions of employment." Id. § 2614(a)(1)(A)-(B). Leave taken under the
FMLA "shall not result in the loss of any employment benefit accrued
prior to the date on which the leave commenced." Id. § 2614(a)(2).
However, a restored employee is not entitled to "any right, benefit, or
position of employment other than any right, benefit, or position to
which the employee would have been entitled had the employee not
taken the leave." Id. § 2614(a)(3)(B).
These substantive rights, and their accompanying protections, see
id. § 2615(a)(1), are prescriptive, "set[ting] substantive floors for con-
duct by employers, and creating entitlements for employees." Hod-
gens v. Gen. Dynamics Corp., 144 F.3d 151, 159 (1st Cir. 1998)
(quoting Diaz v. Fort Wayne Foundry Corp., 131 F.3d 711, 712-13
(7th Cir. 1997))(internal quotation marks omitted) (amendment in
original). See also Rice v. Sunrise Express, Inc., 209 F.3d 1008, 1016
(7th Cir. 2000) (explaining that "in §§ 2612-2615, the Act contains
prescriptive protections for employees that are expressed as substan-
tive statutory rights"). Claims of alleged violations of these prescrip-
tive rights — known as "interference" or "entitlement" claims — arise
under 29 U.S.C.A. § 2615(a)(1), which states that "[i]t shall be unlaw-
ful for any employer to interfere with, restrain, or deny the exercise
of or the attempt to exercise, any right provided under this subchap-
ter."
In addition to these prescriptive rights and protections, the Act also
contains proscriptive provisions that protect employees from discrim-
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ination or retaliation for exercising their substantive rights under the
FMLA. See Hodgens, 144 F.3d at 159-60; Rice, 209 F.3d at 1017.
Known as "retaliation" or "discrimination" claims, causes of action
alleging violations of these proscriptive rights arise under 29
U.S.C.A. § 2615(a)(2), which states that "[i]t shall be unlawful for
any employer to discharge or in any other manner discriminate
against any individual for opposing any practice made unlawful by
this subchapter."
Yashenko asserts that Harrah’s violated both his prescriptive and
proscriptive FMLA rights. We address each claim in turn.
A.
Yashenko principally contends that Harrah’s interfered with the
exercise of his FMLA rights when, after he took his most recent
leave, it refused to restore him to his previous employment position.
He offers a legal and a factual argument in support of this contention.
1.
First, Yashenko maintains that § 2614(a)(1) creates an absolute
entitlement to restoration. This section provides that any person who
takes FMLA leave
shall be entitled, on return from such leave — (A) to be
restored by the employer to the position of employment held
by the employee when the leave commenced; or (B) to be
restored to an equivalent position with equivalent employ-
ment benefits, pay, and other terms and conditions of
employment.
29 U.S.C.A. § 2614(a)(1). However, 29 U.S.C.A. § 2614(a)(3)(B)
contains limitations providing that "nothing in this section shall be
construed to entitle any restored employee to . . . any right, benefit,
or position of employment other than any right, benefit, or position
to which the employee would have been entitled had the employee
not taken the leave."
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Every other circuit to consider an argument like Yashenko’s has
concluded that § 2614(a) of the FMLA provides an employee only a
limited right to restoration to his previous employment position. In
particular, an employer can avoid liability under the FMLA if it can
prove that it "would not have retained an employee had the employee
not been on FMLA leave." Throneberry v. McGehee Desha County
Hosp., 403 F.3d 972, 977 (8th Cir. 2005). See also Hoge v. Honda of
Am. Mfg., Inc., 384 F.3d 238, 245 (6th Cir. 2004); Conoshenti v. Pub.
Serv. Elec. & Gas Co., 364 F.3d 135, 148 (3d Cir. 2004); McBride
v. Citgo Petroleum Corp., 281 F.3d 1099, 1108 (10th Cir. 2002);
Rice, 209 F.3d at 1018; O’Connor v. PCA Family Health Plan, Inc.,
200 F.3d 1349, 1354 (11th Cir. 2000).
We join our sister circuits in concluding that the FMLA does not
require an employee to be restored to his prior job after FMLA leave
if he would have been discharged had he not taken leave. Although
the statutory language is ambiguous on this point, the Secretary of
Labor has promulgated a regulation — 29 C.F.R. § 825.216 (2005) —
clearly resolving the question.
Yashenko argues that this regulation is contrary to the plain lan-
guage of the statute, which he maintains unambiguously entitles every
employee returning from FMLA leave to restoration to his prior job.
Emphasizing the phrase "restored employee" in § 2614(a)(3), Yas-
henko contends that this limitation on FMLA rights applies only after
an employee who has been on leave has been "restored" to his previ-
ous employment position; according to Yashenko, the statutory limi-
tation in § 2614(a)(3)(B) does not provide a basis for refusing to
restore an employee in the first place. Thus, Yashenko argues that the
FMLA provides (in § 2614(a)(1)) an absolute right to restoration,
with limitations (in § 2614(a)(3)) only on "a restored employee’s enti-
tlement to seniority and other benefits accruing during the leave."
Brief of Appellant at 13.
We do not find Yashenko’s plain language argument persuasive.
Yashenko’s reading of § 2614(a)(3)(B) — confining its limitation to
employees who have been restored to their previous position of
employment — ignores the broad statutory command that "[n]othing"
in § 2614 entitles a restored employee to "any . . . position of employ-
ment" to which he would not have been entitled "had the employee
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not taken the leave." 29 U.S.C.A. § 2614(a)(3)(B). Yashenko’s failure
to consider this statutory command is particularly significant because
the plain language of this command clearly contradicts the meaning
he ascribes to the phrase "restored employee." For example, under
Yashenko’s reading, when a poorly performing employee takes
FMLA leave before his employer can discharge him, the employer
must restore this employee to his prior position upon completion of
the leave. However, that very restoration gives the employee — in
violation of § 2614(a)(3)(B) — a benefit (the "position of employ-
ment") to which he would not have been entitled absent the leave.
Furthermore, Yashenko’s interpretation could lead to anomalous
results that we find it unlikely Congress would have intended. For
instance, an employer who eliminated an entire branch of the business
while a covered employee was on leave would, according to Yas-
henko, be required to retain that employee and restore him to a non-
existent position when he returned to work. Such an unqualified enti-
tlement to restoration would give employees on FMLA leave greater
rights than those provided to employees not on leave, upsetting the
careful balance that Congress has created between employees’ need
for protected family and medical leave and employers’ need to protect
their legitimate business interests — an outcome wholly inconsistent
with the purposes and goals of the FMLA.
Accordingly, Yashenko’s plain language argument fails; it does,
however, suggest an ambiguity in the FMLA that precludes reliance
on the language of the statute to resolve the question before us. When
a statute is ambiguous, we do not "simply impose [our] own construc-
tion on the statute," but rather look to the regulations promulgated
pursuant to the legislation to see whether they provide "a permissible
construction of the statute." See Chevron U.S.A. Inc. v. Natural Res.
Def. Council, Inc., 467 U.S. 837, 843-44 (1984). See also Ragsdale
v. Wolverine World Wide, Inc., 535 U.S. 81, 86 (2002).
In this case, the Secretary of Labor has promulgated a regulation,
29 C.F.R. § 825.216, that addresses the precise question at issue:
whether there are "limitations on an employer’s obligation to reinstate
an employee." The regulation answers this question in the affirmative,
explaining that
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[a]n employee has no greater right to reinstatement or to
other benefits and conditions of employment than if the
employee had been continuously employed during the
FMLA leave period. An employer must be able to show that
an employee would not otherwise have been employed at
the time reinstatement is requested in order to deny restora-
tion to employment.
Id. § 825.216(a). Thus, under the Secretary’s construction of the
FMLA, the Act does not create an absolute right to restoration to a
previous employment position; rather, an employer may deny restora-
tion when it can show that it would have discharged the employee in
any event regardless of the leave.
We must defer "to an executive department’s construction of a stat-
utory scheme it is entrusted to administer"; we "may not substitute
[our] own construction of a statutory provision for a reasonable inter-
pretation made by the administrator of an agency." Chevron, 467 U.S.
at 844. Considering § 825.216(a) in conjunction with the entire statu-
tory scheme Congress has enacted, clearly the construction adopted
by the Secretary of Labor reflects a reasonable interpretation of
§ 2614(a)(3)(B). Construing § 2614(a)(3)(B) as qualifying the right to
restoration for all employees taking FMLA leave, the Secretary
avoids the anomalous results that would arise under an absolute enti-
tlement scheme. And the Secretary’s construction, unlike Yashenko’s,
is entirely compatible with Congress’s efforts to pursue the goals of
the FMLA in a manner that "accommodates the legitimate interests of
employers." 29 U.S.C.A. § 2601(b)(3). For these reasons, we find
§ 825.216 to be a reasonable construction of the FMLA ,and we defer
to the Secretary of Labor’s interpretation of § 2614(a).1 We therefore
1Our standard of review of the validity an agency’s regulation "de-
pends upon whether such regulation is legislative or interpretive." Wal-
ton v. Greenbrier Ford, Inc., 370 F.3d 446, 452 (4th Cir. 2004). We
review legislative regulations (those filling explicit gaps in the statute) to
ensure they are not "arbitrary, capricious, or manifestly contrary to the
statute," while reviewing interpretive regulations (those clarifying terms
and provisions of the statute) for reasonableness. Chevron, 467 U.S. at
844. We need not decide whether 29 C.F.R. § 825.216 is interpretive or
legislative because, by finding it to be a reasonable interpretation of the
statute, it necessarily follows that it is not arbitrary, capricious, or mani-
festly contrary to the statute.
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hold that the FMLA provides no absolute right to restoration to a prior
employment position.
2.
Yashenko alternatively maintains that, even if there is no absolute
right to restoration, Harrah’s interfered with his FMLA rights because
its purported reasons for eliminating his position lacked legitimacy.
In response, Harrah’s contends that it eliminated Yashenko’s position
for legitimate reasons unrelated to his request for leave, and that it
therefore had no obligation to restore Yashenko because he would
have lost his job even if he had not taken leave.
To avoid liability on an interference claim, an employer that denies
restoration to an employee returning from FMLA leave "must be able
to show that [the] employee would not otherwise have been employed
at the time reinstatement is requested." 29 C.F.R. § 825.216(a).
Although this regulation clearly places a burden on the employer to
come forward with evidence that it would have discharged the
employee whether or not he took FMLA leave, the circuits disagree
as to who bears the ultimate burden of proof on this matter. Compare
Rice, 209 F.3d at 1018 (ultimate burden falls on employee), with
Smith v. Diffee Ford-Lincoln-Mercury, Inc., 298 F.3d 955, 963 (10th
Cir. 2002) (employer has the ultimate burden). We have held that to
proceed on an interference claim asserting a violation of substantive
rights under the FMLA, an employee bears the burden of proof in
establishing that he is entitled to the benefit at issue under the statute,
Rhoads v. FDIC, 257 F.3d 373, 384 (4th Cir. 2001), but we have not
yet resolved the question of whether, in a case where the employee
alleges interference with his right to restoration, the explicit language
in § 825.216(a) validly shifts the ultimate burden of proof to the
employer to establish the limitations on its obligation to restore the
employee. However, we need not resolve that issue here because,
regardless of who bears the ultimate burden of proof, Yashenko’s
claim cannot succeed.
In support of his argument that Harrah’s interfered with his FMLA
rights, Yashenko offered only the following: that Yashenko’s job was
not in jeopardy when his leave commenced in May 2003; that Yas-
henko received a grade increase in March 2003 shortly before the
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leave began; that Yashenko was the only employee who lost his job
after his position was eliminated by the reorganization in 2003; that
Harrah’s had never required anyone else on a leave of absence to
apply or interview for a position; and that even if Yashenko had
applied for the newly created Manager position, he would not have
gotten the job.
None of this evidence puts into dispute the company’s contention
that Yashenko’s position was eliminated in a legitimate reorganiza-
tion. For example, since there is nothing in the record that indicates
that the elimination of the position had anything to do with Yas-
henko’s job performance, the statement that his job was not in jeop-
ardy when he went out on FMLA leave is irrelevant, as is the fact that
Yashenko received a grade increase in March 2003. Similarly,
although it is undisputed that Yashenko was the only employee who
did not have a job after the reorganization, it is also undisputed that
he did not apply for any jobs, despite Harrah’s application require-
ments and its numerous invitations to him to apply. That Harrah’s
would not have hired Yashenko to fill the newly created Manager
position had he applied does not discredit Harrah’s account of its rea-
sons for discharging Yashenko; Yashenko chose not to apply for any
of the numerous open positions, despite suggestions that he apply.
And finally, while Harrah’s had never before required anyone to
apply or interview for a position while on FMLA leave, there is no
evidence in the record of any situation that necessitated Harrah’s
doing so in the past. Thus, even accepting Yashenko’s evidence and
drawing all inferences in his favor, a reasonable jury could not on this
evidence find for him.
An additional problem with Yashenko’s evidence is that it does not
refute the evidence submitted by Harrah’s demonstrating that its reor-
ganization was legitimate and that it would have discharged Yas-
henko even if he had not taken leave. Harrah’s evidence — including
affidavits, deposition testimony, internal memos, emails, letters, and
other documents — established the following undisputed facts: that
in September 2002, before Yashenko requested this most recent leave,
the finance department had suggested a reorganization that would
eliminate Yashenko’s position; that Harrah’s had approved FMLA
leave for Yashenko on several previous occasions and that, after each
leave, Yashenko had returned to the same position at the same salary
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and benefits; that during Tom Fagg’s tenure as Harrah’s Human
Resources Director, Harrah’s restructured the department at least
three times to better align itself with other Harrah’s facilities, elimi-
nating "12 positions at least"; that there was a general shift in employ-
ment positions from Harrah’s to the TCGE; that Harrah’s had
eliminated, transferred, or consolidated several other positions; that
Harrah’s encouraged Yashenko to apply for both of the newly created
positions, as well as for all other available TCGE positions, but that
Yashenko did not apply for any of them; and that Harrah’s continued
to provide Yashenko with benefits until he had completed his leave.
Harrah’s also offered uncontroverted deposition testimony that Tom
Fagg and Harrah’s General Manager made the decision to reorganize
in approximately March 2003, two months prior to Yashenko’s
request for leave, and that they timed the reorganization to coincide
with Fagg’s leaving Harrah’s on June 30, 2003.
Given these facts, the district court certainly did not err in granting
summary judgment to Harrah’s on Yashenko’s interference claim.
B.
In addition to claiming an interference with his FMLA rights, Yas-
henko contends that Harrah’s retaliated against him for taking pro-
tected leave. FMLA claims arising under the retaliation theory are
analogous to those derived under Title VII and so are analyzed under
the burden-shifting framework of McDonnell Douglas Corp. v.
Green, 411 U.S. 792, 800-06 (1973). See Nichols v. Ashland Hosp.
Corp., 251 F.3d 496, 502 (4th Cir. 2001). Thus, to succeed on his
retaliation claim, Yashenko must first make a prima facie showing
"that he engaged in protected activity, that the employer took adverse
action against him, and that the adverse action was causally connected
to the plaintiff’s protected activity." Cline v. Wal-Mart Stores, Inc.,
144 F.3d 294, 301 (4th Cir. 1998). If he "puts forth sufficient evi-
dence to establish a prima facie case of retaliation" and Harrah’s "of-
fers a non-discriminatory explanation" for his termination, Yashenko
"bears the burden of establishing that the employer’s proffered expla-
nation is pretext for FMLA retaliation." Nichols, 251 F.3d at 502.
It is undisputed here that Yashenko engaged in a protected activity
(taking FMLA leave) and that he experienced an adverse employment
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action (termination). Thus, to establish his prima facie case, Yashenko
must demonstrate that there was a causal connection between his tak-
ing leave and his termination. To satisfy this showing, Yashenko
offers evidence of the temporal proximity between his absence and
the elimination of his job. While evidence as to the closeness in time
"far from conclusively establishes the requisite causal connection, it
certainly satisfies the less onerous burden of making a prima facie
case of causality." Williams v. Cerberonics, Inc., 871 F.2d 452, 457
(4th Cir. 1989). Hence, Yashenko has made a prima facie showing of
retaliation.
Nevertheless, Yashenko’s retaliation claim fails because he has not
proffered evidence demonstrating that Harrah’s asserted legitimate
non-discriminatory reason for eliminating his position was pretextual.
As discussed above in reference to Yashenko’s interference claim,
Harrah’s offered a great deal of evidence explaining its reasons for
eliminating Yashenko’s position, none of which relate to his FMLA
leave. Harrah’s submitted substantial evidence that it had considered
the elimination of Yashenko’s position several months prior to his
request for leave, that its Human Resources department had been
implementing a general reorganization under the leadership of Tom
Fagg and that it had eliminated several other positions in the process,
and that there was an overall shift in jobs from Harrah’s to TCGE,
consistent with the Management Agreement between Harrah’s and the
Tribe. This evidence satisfies Harrah’s burden of proving that it had
legitimate non-discriminatory reasons for Yashenko’s discharge unre-
lated to his FMLA leave. In his attempt to show pretext, Yashenko
offered only evidence that is entirely consistent with Harrah’s reorga-
nization plan. As discussed above, his evidence does not create a gen-
uine issue of material fact concerning the legitimacy of the
restructuring sufficient to survive summary judgment. We therefore
affirm the district court’s grant of summary judgment to Harrah’s on
Yashenko’s retaliation claim.
III.
Along with his allegations of violations under the FMLA, Yas-
henko asserts that Harrah’s tribal preference policy violated his rights
under 42 U.S.C.A. § 1981, which prohibits discrimination in employ-
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ment on the basis of race.2 The fundamental problem with this argu-
ment is that, due to the Management Agreement between Harrah’s
and the Tribe, Yashenko cannot assert a § 1981 claim against Har-
rah’s unless he joins the Tribe as a party to the lawsuit, and the Tribe
enjoys sovereign immunity from suit. See Kiowa Tribe v. Mfg. Techs.,
Inc., 523 U.S. 751, 753-55 (1998).
Under Rule 19 of the Federal Rules of Civil Procedure, a person
or party must be joined in an action when
(1) in the person’s absence complete relief cannot be
accorded among those already parties, or (2) the person
claims an interest relating to the subject of the action and is
so situated that the disposition of the action in the person’s
absence may (i) as a practical matter impair or impede the
person’s ability to protect that interest or (ii) leave any of
the persons already parties subject to a substantial risk of
incurring double, multiple, or otherwise inconsistent obliga-
tions by reason of the claimed interest.
Fed. R. Civ. P. 19(a). If joinder is not feasible, a court must decide
whether "the action should proceed among the parties before it, or
should be dismissed" because the absent party is indispensable. Fed.
R. Civ. P. 19(b). To make this determination, a court must decide:
2In examining this question, the district court concluded that, although
§ 1981 does not expressly contain an exemption for Indian preferences,
the exemptions contained in 42 U.S.C.A. §§ 2000e(b) and 2000e-2(i)
(West 2003) should apply because:
it would be contrary to Congress’ expressed will to allow a
plaintiff to circumvent the express provisions of Title VII and
assert a[n] employment discrimination claim against an Indian
tribe or private business on an Indian reservation for the use of
tribal preferences merely by reconfiguring the claim as one for
relief under § 1981 instead of Title VII.
Yashenko v. Harrah’s NC Casino Co., LLC, 352 F. Supp. 2d 653, 663
(W.D.N.C. 2005). The court therefore found that Yashenko’s § 1981
claim was barred and granted summary judgment to Harrah’s on this
issue. Given our resolution of this case, we need not address this issue.
See, e.g., United States v. Smith, 395 F.3d 516, 519 (4th Cir. 2005).
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first, to what extent a judgment rendered in the person’s
absence might be prejudicial to the person or those already
parties; second, the extent to which, by protective provisions
in the judgment, by the shaping of relief, or other measures,
the prejudice can be lessened or avoided; third, whether a
judgment rendered in the person’s absence will be adequate;
fourth, whether the plaintiff will have an adequate remedy
if the action is dismissed for nonjoinder.
Id.
With these principles in mind, we turn to Yashenko’s § 1981 claim.
In analyzing whether the Tribe is both a necessary and an indispens-
able party to Yashenko’s lawsuit against Harrah’s, we find persuasive
a recent Ninth Circuit case that presents facts materially indistinguish-
able from those at issue here. See Dawavendewa v. Salt River Project
Agric. Improvement & Power Dist., 276 F.3d 1150 (9th Cir. 2002).3
Like Yashenko, Harold Dawavendewa alleged employment dis-
crimination by a private party that had contracted with an Indian tribe
to observe a tribal preference policy on Indian lands. The Ninth Cir-
cuit held that the tribe was a necessary party because the plaintiff
could not obtain complete relief without suing the tribe; a judgment
in the plaintiff’s favor would only bind him and the private employer
and would not prevent the tribe from continuing to enforce its tribal
preference policy on its own property. Id. at 1155-56. Moreover, any
judgment on such a claim would threaten "to impair the [Tribe]’s con-
tractual interests, and thus, its fundamental economic relationship
with" the private party, as well as "its sovereign capacity to negotiate
contracts and, in general, to govern" the reservation. Id. at 1157.
Exactly the same conclusions must be reached here. Additionally,
"[a]ny disposition in the [Tribe]’s absence threatens to leave [Har-
rah’s] subject to substantial risk of incurring multiple or inconsistent
obligations." Id. at 1157. Accordingly, under Rule 19(a), the Tribe is
a necessary party to Yashenko’s § 1981 claim.
3We note that Yashenko has offered no legitimate basis for distin-
guishing Dawavendewa and has failed to present any argument that the
Tribe is not a necessary and indispensable party or does not enjoy sover-
eign immunity.
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Although the Tribe is a necessary party, because of its status as a
sovereign nation, Kiowa Tribe, 523 U.S. at 753-55, the Tribe cannot
"feasibly be joined as a party" to the action. See Dawavendewa, 276
F.3d at 1159. Thus, we must determine whether it is also indispens-
able to the § 1981 cause of action.
Applying the Rule 19(b) factors, we can only conclude that the
Tribe is also indispensable for reasons similar to those rendering the
Tribe a necessary party. First, any judgment on the § 1981 claim
would prejudice the Tribe’s economic interests in the Management
Agreement with Harrah’s and its interests as a sovereign in negotiat-
ing contracts and governing its reservation. At the same time, any
such judgment rendered in the absence of the Tribe would prejudice
Harrah’s because it would hinder its ability to resolve its contractual
obligations with the Tribe. Second, there is no way to shape the relief
sought in such a way as to mitigate this prejudice to Harrah’s and the
Tribe. And third, any judgment entered without joining the Tribe
would be inadequate because it would bind only Yashenko and Har-
rah’s; the Tribe would remain free to enforce the tribal preference
policy on its reservation and through its contractual relations. See
Dawavendewa, 276 F.3d at 1161-62. Accordingly, the Tribe is indis-
pensable to this claim. See id. at 1162. See also Fluent v. Salamanca
Indian Lease Auth., 928 F.2d 542, 547-48 (2d Cir. 1991) (finding the
Navajo Nation to be a necessary and indispensable party based on its
lease agreement with the other named defendants and therefore dis-
missing the case).
We therefore hold that the Tribe is both a necessary and indispens-
able party to Yashenko’s § 1981 cause of action. Because its sover-
eign status prohibits its joinder, we affirm the judgment of the district
court dismissing this claim.4
4Yashenko also maintains that the district court erred when it dis-
missed without prejudice his supplemental state wrongful discharge
claim after it disposed of his federal claims. Once a district court has dis-
missed the federal claims in an action, it maintains "wide discretion" to
dismiss the supplemental state law claims over which it properly has sup-
plemental jurisdiction. See Carnegie-Mellon Univ. v. Cohill, 484 U.S.
343, 353-54 (1988). Although Yashenko originally brought suit in state
court, he did not assert any state law claims until he was permitted to
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IV.
For the foregoing reasons, the judgment of the district court is
AFFIRMED.
amend his complaint after the case was removed to federal court. More-
over, the three-year statute of limitations on the state law wrongful dis-
charge claim will not expire until July 2006. See United States ex rel.
Wilson v. Graham County Soil & Water Conservation Dist., 424 F.3d
437, 437 (4th Cir. 2005). Accordingly, we see no basis for finding an
abuse of discretion in the district court’s decision dismissing this state
law claim without prejudice. See Robles v. City of Fort Wayne, 113 F.3d
732, 738 (7th Cir. 1997). Cf. Carnegie-Mellon Univ., 484 U.S. at 353-54
("[A] remand generally be preferable to a dismissal when the statute of
limitations on the plaintiff’s state-law claims has expired before the fed-
eral court has determined that it should relinquish jurisdiction over the
case.").
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