Get Your Story Straight Before Taking Action

A decision released today from the Sixth Circuit illustrates that Tennessee employers need to get their story straight before firing an employee. 

Brookdale Senior Living, Inc. is, its website says, the nation’s largest owner and operator of senior living communities throughout the United States and a leading national provider of senior-related services. The plaintiff, David Eades was a Regional Director of Start-up Operations.  Eads thought his new supervisor harassed and degraded him because of his age (he was in his early 40s).  Eads complained about it to HR and later to the company president.  Eads and the company discussed a severance package and Eads was sent home with the assurance that he was not fired.  Eads later learned his supervisor was telling folks he had been fired and he could no longer access his email from outside of work.  

The court of appeals held Eads was entitled to a jury trial.  The problem for Brookdale was that, as the court said it was "advancing different reasons in its brief on appeal than it represented to the district court."  Even worse, Brookdale's assertions in the litigation were not the same as those it made in response to Eads EEOC charge.  Brookdale's in house counsel said in the response that Eads had been terminated for "lack of any performance in any position."  This answer was so far wrong that Brookdale's brief on appeal "explicitly denies having terminated Eades for performance issues" saying its counsel had made a mistake. As the court said, however, "Brookdale offers no evidence that either one suggested that the response was erroneous, nor does it explain how its Senior Vice President for Legal Services made such a 'mistake.'"

The inconsistency with the EEOC response was not the only problem. Brookdale's lawyers appear to have put to much "spin" on the severance discussions. They asserted that Eads said "he could not work with [his supervisor] and that he wanted a severance package, but this position is inconsistent with the record testimony of the attendees of that meeting."

The problem with Brookdale's case wasn't simply that it gave unsupported reasons for firing Eads.  Any one of the reasons Brookdale advance might have valid ones (had the facts been in support).  But when employer  and employer asserts different and inconsistent reasons for a decision, that is itself evidence of pretext, as the court said: “An employer’s changing rationale for making an adverse employment decision can be evidence of pretext.”  

In practice, there will be some debate as to what amounts to a "changing rationale."  Courts rightly look to whether the changing reasons are inconsistent, not merely changing.  For example, courts recognize that expanding on a reason already advanced does not ordinarily amount to taking an inconsistent position.  Here, however, Brookdale's assertion to the EEOC that performance was the sole reason for firing Eads could not be reconciled with its position in the litigation.  

By now, the lesson is obvious.  Before taking any employment action, employers need to investigate the  facts and make sure the explanation given at the start is something the employer can live with if litigation ensues.

Tennessee Employers, Get thee to Federal Court - 5/25/2011 Update

The General Assembly has passed a bill that has the effect of overruling the Gossett decision. The legislation is discussed in this post.

Yesterday, the Tennessee Supreme Court issued two decisions in employment retaliation claims that sent a chilling message to Tennessee employers.  The decisions impose new and troubling procedural requirements on employers who try to get retaliation (and perhaps discrimination) claims dismissed prior to trial.  If there ever was a reason not to remove a case to federal court when a Tennessee employer is sued, the Tennessee Supreme Court just removed it.

The primary decision is Gossett v. Tractor Supply where a 3 to 2 majority of the court held that the McDonnell Douglas analysis does not apply when an employer seeks summary judgment in a retaliation claim.

McDonnell Douglas v. Green  is a U.S. Supreme Court decision, early on in the history of Title VII, which set forth the procedure for analyzing discrimination claims. It is not a procedure (unlike the rules governing summary judgment), but a method of analyzing claims where there is not an admission of discrimination.  Later U.S. Supreme Court decisions (a case called Burdine is the most significant among them) refined the  analysis by saying the employee must prove the employer's illegal motive.  The pretext analysis I'm so fond of discussing here is one aspect of the McDonnell Douglas/Burdine analysis, as it has come to be known.

Summary judgment is a way for employers (among others) to get a discrimination/retaliation claim dismissed without a trial.  Trials are expensive.  To obtain summary judgment, the employers needs to show that there is no disputed fact that is material to the outcome.  In practice, this usually boils down to showing that the employee cannot prove that the employer's reason for the action is a pretext for discrimination/retaliation.  Pretext, of course, means a lie, a phony reason given to hide a real reason.

I will cut to the fundamental point, the Tennessee Supreme Court's reason for abandoning McDonnell Douglas/Burdine in when ruling on a motion for summary judgment is based upon the legally flawed premise that courts misinterpret precedent.  The court said, "[i]n addressing the issue of pretext, a court may fail to consider the facts alleged by the employee to show a prima facie case."  But for the justice system to work, courts have to presume other courts will follow precedent.

The belief that courts do not consider evidence that supports a prima facie case is contrary to a 10-year old decision of the U.S. Supreme Court.  In Reeves v. Sanderson Plumbing, the Court held that the pretext analysis includes the evidence from the prima facie case: "the trier of fact may still consider the evidence establishing the plaintiff’s prima facie case 'and inferences properly drawn therefrom … on the issue of whether the defendant’s explanation is pretextual.'"

Justifying a major departure from federal precedent on a flawed premise is bad enough.  But the reason for it is equally inconsequential.  The prima facie case raises a presumption that the employer can rebut.  The evidence it takes to establish a prima facie case is exceptionally minimal.  Basing this kind of a decision on a  concern that a court might ignore evidence used to support the prima facie case is like a football coach complaining about a referee's blown call after losing the game 41 to 3.

The Tennessee Supreme Court also said applying McDonnell Douglas at the summary judgment stage is confusing and "can result in the grant of a summary judgment despite the presence of genuine issues of material fact."  It is wrong about the first point.  Federal courts have for decades applied McDonnell Douglas to summary judgment motions without confusion.  The decisions the court cited as evidence of confusion generally involved "mixed motive" claims.  Mixed motive claims are confusing because they do not apply the McDonnell Douglas analysis.

The court's explanation for its second conclusion is sparse and deeply flawed.  To start with, as one federal court of appeals recently said, McDonnell Douglas is "designed to make it easier for plaintiffs to withstand summary judgment in discrimination cases, in the belief that a discrimination suit (unlike, for instance, an action for negligence or breach of contract), puts the plaintiff in the difficult position of having to prove the state of mind of the person making the employment decision."  Gacek v. American Airlines, ___ F.3d ___ (7th Cir. 2010) (emphasis added). 

The court cited only one decision where McDonnell Douglas supposedly resulting in summary judgment being granted inappropriately.  That was, remarkably, a 2007 decision from the Tennessee Supreme Court which held that timing alone could not establish a pretext for retaliation. The court now seems to be saying timing alone can defeat summary judgment in a retaliation claim. If so, that is a significant departure from its own recent precedent and inconsistent with federal court precedent.  (My views on how courts ignore logic in saying timing can be evidence of motive are pretty clear.)

Perhaps worst of all, the court provides no guidance for lower courts on the rule that now apply to retaliation claims on a summary judgment motion.  (Saying the summary judgment rules apply is not guidance.)  Is the employee still required to establish the employer's reason for the adverse action is a pretext (in a case where there is no admission of bias by the employer)?  The decision leaves it open for employees' lawyers to argue that summary judgment can never be granted in a retaliation claim were the employee can establish a prima facie case.

Another point needs to be made (or else I'll be misquoted).  As best I can tell, both decisions were common law retaliatory discharge claims.  The court never says its decision applies to discrimination claims under the Tennessee Human Rights Act (THRA).  It is implied but since neither appeal concerned a THRA claim, the issue is still open.  Suppose, for a moment, this ruling applies to a THRA claim.  It is common for an employee to bring a THRA claim and a federal discrimination claim in the same lawsuit.  Gacek held that McDonnell Douglas is substantive law, not a procedural rule.  That means state courts hearing federal discrimination claims must follow McDonnell Douglas even in ruling on motions for summary judgment.  Nothing in Tennessee's summary judgment procedures permits a state court to refuse to apply U.S. Supreme Court precedent on federal claims.  So, on the same facts, summary judgment could be granted on the federal claim but not on the state claim not because of any difference in federal or state discrimination laws, but solely because of the way the Tennessee Supreme Court has said to apply summary judgment.

I've carried on with this quasi-rant too long.  The best advice for any Tennessee employer is to insist that your attorney remove to federal court all claims that can be removed (the rules on this are complex but a discussion of them is beyond the point I want to make here).  The Tennessee Supreme Court's decision only affects summary judgment motions in state court.  (State courts will continue to apply the McDonnell Douglas analysis as a matter of substantive law (such as at trial or on post-trial motions)).  Federal courts apply federal rules applicable to summary judgment even when ruling on state law claims.

It may be that in any one case, summary judgment isn't appropriate.  Federal courts, however, have developed and apply rules that give the employer a fair shot at obtaining summary judgment (and do so in a way that does not trod on employees, either). Unfortunately, that is no longer true in state court.

When What Happens in Vegas Won't Stay in Vegas

Prospect Airport Services has some 4000 employees nationwide, some of these provide gate services (such as wheelchair assistance) at the Las Vegas airport. Prospect found itself on the wrong end of a sexual harassment lawsuit by the EEOC when a female co-worker began propositioning a male employee. Today, the Ninth Circuit Court of Appeals held the female's harassment was severe enough to warrant a trial even though the female touched the male only once.

The female attempted to begin the relationship with a note which said she was “turned on” and wanted to “go out" with the male but the male told her he was not interested. She continued with several more notes, including a photograph of herself, "a head and shoulders-type shot with a pressing together of the breasts. . . . no clothing on that portion . . . . the cleavage of the breasts sort of together." She persisted, telling him she "gave a “very good bath wash and body massage" adding, “I do want you sexually and romantically.”

The male made several complaints to his supervisor who promised to address it but did not. He later complained to her supervisor who supposedly told the male he "did not want to get involved in personal matters" but did tell the female co-worker to stop. Instead of stopping she increased the frequency of her suggestive comments and enlisted co-workers to pressure the male. Some asked him if he was gay (he wasn't). The male was finally fired for poor performance which he attributed to the constant harassment.

Female to male harassment claims are rare, of course, though we can speculate that if they are going to happen, they are as likely to happen in Las Vegas as anywhere. The court rejected any suggestion that a different standard applied because the victim was male:

It cannot be assumed that because a man receives sexual advances from a woman that those advances are welcome. [The male] suggested this might be true of other men (the district court decision noted that [the male] "admits that most men in his circumstances would have 'welcomed'" her advances). But that is a stereotype and welcomeness is inherently subjective, (since the interest two individuals might have in a romantic relationship is inherently individual to them), so it does not matter to welcomeness whether other men might have welcomed [the female's] sexual propositions.

But perhaps more interesting, and equally applicable regardless of whether the male is the harasser or victim, is the holding that the conduct was severe or pervasive enough to amount to actionable harassment even though the only contact by the female was a kiss on the cheek.  This was not "severe" harassment but it was pervasive because the female's: 

pursuit of [[the male] was relentless. She would not leave him alone, despite his repeated clear rejections of her overtures. She recruited other co-workers to deliver messages to him; the campaign broadened to include the whole workplace. Other workers began mocking [the male] for his failure to respond to [the female's] sexual advances. [The male] described over six months of constant (and often daily) sexual pressure and humiliation from [the female] and other co-workers.

This being co-worker harassment, the male also had to show the employer's response to his complaints was inadequate.  Here, the court said, there was no contest:

His immediate supervisor . . . failed even to tell [the female]  to stop. He repeatedly brought his concerns to others in management, and a manager told [the female]  to stop, but management did nothing about it when [the female]  did not stop, and management knew she had not. Instead the assistant general manager told [the male] Lamas to sing to himself “I’m too sexy for my shirt.”

While the moral of the story is probably obvious, employers who rely on a stereotyped view of any harassment complaint are asking for costly litigation.  Any employee who complains about harassment should be taken seriously and the complaint investigated.  The complaint may ultimately be proven to be meritless  for any number of reasons but that should not be assumed at the start based upon stereotyped beliefs.  And, of course, supervisors and managers should be trained how to deal with (or report) harassment complaints.