Sixth Circuit Upholds FedEx Reorganization Decision

Linda Epps worked for FedEx in Memphis as an IT Manager, managing one project called the Managed Resource Services Office or MRSO. In 2006, FedEx brought in another manager (named Black) who carried four projects and one initiative. Not much later, Werner (to whom Black and Epps reported) decided to eliminate Epp's IT Manager position and transfer the MRSO duties to Black.  Epps trained Black on those duties.  FedEx gave Epps the opportunity to locate a new management position but after she was unable to do so, she took a demotion which required her to report to Black and reduced (gradually over an 18 month period) her salary.  Epps later sued for race discrimination.

What seems most helpful about the unpublished decision is how the court analyzed FedEx's reasons for the reduction/demotion.  The question, of course, was why select Black instead of Epps to be the IT Manager.

Assigning the consolidated duties to Black required Black to learn one new project: MRSO. In contrast, had the consolidated job been assigned to Epps, she would have been required to learn four new projects and one initiative. Based on the number of direct reports managed by Epps and Black prior to the demotion, it is likely that MRSO was a larger project than any one of the projects on which Black was working. However, it appears that Black had the larger sum total of management responsibilities, and her work covered a greater number of discrete areas. Therefore, FedEx has provided a legitimate, nondiscriminatory explanation that it was more efficient to assign the MRSO project to Black than to move all of Black’s projects to Epps.

Further, Black had a longer tenure with FedEx, had more experience reporting to senior level management, and had won two of the company’s five-star awards for excellent work. Although Epps had a consistently positive work history with FedEx and had earned a promotion to management, her most recent year-end evaluation had identified several areas in which improvement was needed. Werner stated that he was focused on efficiency—not prior job performance—in choosing who should take on the consolidated duties. However, he mentioned his awareness of Black’s strong track record with the company, and that history further supports the business decision to select Black over Epps for the remaining management position.

In making difficult decisions to select employees for a reduction in force, employers are smart if they can explain the reasons for the decision in the manner recounted above.  The temptation, as I bemoaned before, is to try to objectify or quantify what is really a subjective analysis.  While not illegal, I feel it is better to be able to explain the decision in words, as FedEx did, rather than by assigning numbers to subjective factors. 

Epps tried to argue her selection was pretextual because she had gotten her first negative evaluation just after her demotion.  The court's response to this argument is a good lesson for all employers because even Epp's prior evaluations, while overall positive, "indicated several areas in which" Epps supervisor "expected improvement, clearly signaling the potential for a future negative review."  Again, wise employers will address performance problems as they arise, and then document them as areas for improvement on performance evaluations, even if the issues do not themselves merit a lower overall rating.

Documenting Poor Performance

It's a recurring theme, one I have addressed before, but it can't be stressed enough how helpful it is in defending employment litigation to have adequate documentation of poor performance.

In an unpublished decision issued today, the Sixth Circuit affirmed summary judgment for ServiceMaster in an age and disability lawsuit because the employee's new manager properly documented her dissatisfaction with the employee. 

The court rejected the employee's ("Webb") several attempts to establish that he was meeting the employer's legitimate qualifications for the job, explaining:

Webb does not offer probative evidence that he was qualified. First, Webb relies on positive performance reviews from prior years to establish his qualifications at the time of termination.  On facts closely resembling this case, this court in Strickland expressly rejected such use of prior year-end performance reviews because they suffered from “staleness” and did not establish that a plaintiff was “qualified at the time of her termination.”  Strickland, 45 F. App’x at 424. As in Strickland, this evidence is stale because Webb’s performance or ServiceMaster’s expectations may have legitimately changed since the prior review period. Second, Webb offered emails in which coworkers requested Webb’s assistance on a project, which Webb believes show that his work was adequate and, therefore, met ServiceMaster’s expectations.  The opinion of Webb’s coworkers is irrelevant: under both the ADEA and THRA the relevant test is the legitimate expectations of an employer, not a coworker. See Strickland, 45 F. App’x at 424. Even if the court were to consider these emails, they do not create a genuine issue of material fact: no reasonable jury could find that one routine request for assistance demonstrates that Webb was meeting the legitimate expectations of his employer. For these reasons, Webb has provided no evidence that he was meeting his employer’s legitimate expectations at the time of his termination and, therefore, has not established either his age or disability discrimination claims.

What did the employer do right?  The court explained that Webb's new manager, "had concerns about Webb’s productivity, began supervising him directly and found his work unacceptable or incomprehensible, gave Webb a negative midyear performance review, placed him on a [performance improvement plan] during which Webb failed to improve, and ultimately recommended Webb’s termination for unsatisfactory performance and a failure to perform “at the manager level.”

There was, of course, no evidence of disparate treatment.

Similarly Situated Evidence - Employers Must Consider Differences

The court of appeals in Chicago recently issued an instructive decision on comparing similarly situated employees.  The fired employee worked for the Indiana Department of Corrections and repeatedly refused a job assignment to the point that the DOC fired her.  She sued under the ADA alleging the firing was a pretext for getting rid of her because she had back problems (which was one reason she refused the job assignment).

The court of appeals initially addressed whether the employee was similarly situated to two other employees who had also refused (to some degree) a job assignment.   This aspect of the decision can be summed up by saying that employers shouldn't try to split too fine a hair in making employee comparisons.

The more important point, it seems to me, is that employers should consider all factors that distinguish an employee from co-workers when deciding on the level of discipline for an employee.  Here, when the lawsuit got to litigation, the employer argued that the fired employee was not similarly situated to other employees who were not fired because the fired employee had a worse disciplinary history.   Of course, an employee's disciplinary history is a perfectly valid consideration in imposing discipline. 

The problem for the employer was that (as the court said): "not only does the evidence fail to indicate that disciplinary history was considered, but the record makes clear that disciplinary history played no role in DOC’s decision to terminate . . . employment."  It explained:

A characteristic that distinguishes two employees, regardless of its significance when objectively considered, does not render the employees non-comparable if the employer never considered that characteristic. The purpose of the similarly situated requirement is to provide a basis for a judgment about the fairness of the employer’s decision.  Factors never considered by the employer cannot provide any insight as to whether the employer’s decision was motivated by discriminatory intent.

The problem here was that the employer's evidence established that disciplinary history was not a consideration at the time.

So, in considering discipline for misconduct, it will help to make sure your documentation demonstrates you took into account all the differences between employees.  While this should be documented (so as to avoid the argument that the evidence was manufactured after the fact), it is at least as important to consider all the reasons for distinguishing employees.  At a minimum, the decision-makers need to be able to convincingly testify that they considered the factors which distinguished the fired employee from employees who were not fired.

Sixth Circuit: Tennessee Employers May Require Prompt Reporting of Compensable Injuries

Julie Geronimo worked for Caterpillar in Dyersburg until she was terminated for failure to promptly report a work injury.  Geronimo worked as a machinist and then an assembler.  Not long after starting the assembler work, Geronimio began to experience pain.  Her job required her to press down clutch plates on an assembly line and from the start, Geronimo experienced "muscle strain" in her palms, upper arms, and fingers.  The pain continued and, after four weeks on the job, it increased, causing her hands to go numb and tingle when performing manual tasks even outside of work.

Geronimo said nothing to Caterpillar about the pain for some 35 days.  She then spoke to the company nurse, telling the nurse she may have to have surgery.  Geronimo had not consulted a physician.  Rather, as she told the nurse, she had read about her condition on the internet a week earlier.  By the time Geronimo spoke to the nurse,  she was characterizing her pain levels as almost unbearable.  The day after seeing the nurse, Caterpillar fired Geronimo because of her "failure to communicate an injury in a timely manner."

Caterpillar's safety rules require employees to report the occurrence of injuries immediately or, if the injury was gradually-occurring, to report it as soon as an employee realizes they are injured and suspects it is work related.   Geronimo admitted she knew the policy.  She decided not to report the pain, she said, because she thought she would lose her job.

Geronimo filed a lawsuit alleging Caterpillar's reporting requirements, specifically, her termination for failing to follow the reporting requirements, violated Tennessee's workers' compensation law.  Her argument was that the workers' compensation law permits employees to obtain compensation if the employee reports an injury within 30 days and Caterpillar's immediate reporting requirement contravened the statutory reporting provisions.  

The Sixth Circuit didn't buy it, holding that even though the statute gives her thirty days in which to report a gradually-occurring injury if she wants to obtain workers’ compensation benefits, the statute also provides that an injury "shall" be reported immediately.  Tenn. Code Ann. § 50-6-201(a).  Thus, the court held, an employer's policy requiring prompt reporting of injuries is not inconsistent with the workers' compensation law.

Caterpillar imposed the reporting rule, it explained, because the "late reporting of injuries can result in otherwise avoidable aggravation of those injuries, whereas timely reporting will allow the problems to be addressed before they become severe and may also help to prevent other employees from becoming similarly injured."  

The court agreed with this policy, characterizing Geronimo's argument as giving:

employees the opportunity to aggravate existing work injuries, potentially compromise the safety of other individuals, and prevent their employers from providing possible remedies for gradually-occurring injuries at the earliest possible date, by choosing not to report their injuries for days, or even weeks, after the employee realizes she has been injured. Moreover, although the  statute grants an employee a maximum of thirty days in which to report the injury and still obtain workers’ compensation, the language itself not only mandates immediate reporting by all employees, but provides incentive to do so by refusing to allow payment of physician’s fees or compensation for the period of time between when the injury occurred and when the employee provided notice of the injury. See Tenn. Code Ann. § 50-6-201(a).

Tennessee employers thinking about adopting Caterpillar's injury reporting policy should be aware that the facts of this case are rather unique and it will (or should) be rarely used to fire an employee.  Geronimo made a crucial mistake in admitting to the nurse that she knew she had injured herself before she reported it.  Most employees won't make that mistake, at least not after the employer fires an employee for violating the timely reporting requirement. In addition, employers must enforce a reporting policy evenhandedly.   There was no allegation of disparate treatment in this case.  Nor was there any evidence that Caterpillar used the reporting requirement to rid itself of employees who sustained compensable injuries, or that it fired employees before they could claim a compensable injury.  Evenhanded enforcement will also help to avoid any potential FMLA or ADA concerns.  

It can't be emphasized enough that employers who have a policy of this nature should do everything possible to avoid firing employees who timely report injuries.  Had Geronimo, for example, presented evidence that employees who timely reported injuries did, in fact, lose their jobs (as she believed) the outcome might have been different.

Of course, Caterpillar's goal was to head off gradual (or soft) injuries before they necessitate significant or costly corrective action.  That is laudable from several aspects and one or two firings for violating the policy should serve to emphasize that the employer is serious about employee safety.

Sixth Circuit Holds Volunteer Firefighters Can Be "Employees" for Title VII Coverage

A published decision from the Sixth Circuit today held that volunteer firefighters may be counted as "employees" for purposes of determining whether the "employer" has enough employees for Title VII coverage.

Title VII only applies to employers of 15 or more employees.  How to count 15 employees is somewhat complex and has required the Supreme Court to set in and resolve the issue on at least one occasion.   The statute requires counting the number of “employees for each working day in each of twenty or more calendar weeks in the current or preceding calendar year . . . .” 42 U.S.C. § 2000e(b).

In this case, the employer only had 4 "employees" and without counting the volunteer firefighters, there would be not be enough employees to permit the employee to sue for sexual harassment under Title VII.

The EEOC position on whether to count volunteers is that "an individual may be considered an employee of a particular entity if . . . [she] receives benefits such as a pension, group life insurance, workers'  compensation, and access to professional certification . . . .”  EEOC Compliance Manual.  The benefits must, the EEOC states, constitute "significant remuneration" rather than merely the "inconsequential incidents of an otherwise gratuitous relationship."

Where the Sixth Circuit parted company with the district court and to some degree the EEOC (which had previously ruled in favor of coverage) was in how to consider the remuneration factor.  The Sixth Circuit concluded the district court, by holding there had to be "significant remuneration" put too much emphasis on the remuneration factor to the exclusion of other considerations.  To the court the question is whether there is "remuneration" not "significant remuneration" and to illustrate the point, noted that the volunteer firefighters:

received worker’s compensation coverage, insurance coverage, gift cards, personal use of the Department’s facilities and assets, training, and access to an emergency fund . . . and that, for particular portions of the relevant time period, certain firefighter-members received a one-time, lump-sum retirement payment4 and others received an hourly wage. The district court, however, limited its analysis to remuneration without considering any other aspects of the Department’s relationship with its firefighter-members. Although remuneration is a factor to be considered, it must be weighed with all other incidents of the relationship.

Tennessee Appeals Court Addresses Similarly Situated Standards

Sharon Hartman worked for Tennessee Tech for about 13 years as a Stock Clerk.  Her job was to purchase supplies and equipment, which required her to be intimately familiar with Tech's purchasing policies.  Tech fired Ms. Hartman after she made unauthorized purchases which exceeded the monetary limits of her authority.  The mistake was inadvertent but had Hartman followed the purchasing policies it would not have occurred.

In Ms. Hartman's sex discrimination claim under the Tennessee Human Rights Act, she argued she was similarly situated to a male named Parks who was plumbing shop supervisor.  Unlike Hartman, Parks was not charged with being familiar with Tech's purchasing policies.  On one ocassion, Parks ordered plumbing supplies which exceeded the same monetary limits.  Unlike Hartman, however, when Parks learned the supplies were over the limit, he rejected the order and went through the appropriate procedures for the purchase.

The court of appeals rejected Hartman's argument that she and Parks were similarly situated, explaining:

The duties and responsibilities listed on Ms. Hartman’s official job description include: “Maintains warehouse stock item inventory. Solicits, evaluates and awards bids; and orders warehouse stock items,” “Initiates bid process for warehouse stock items,” “Makes contract award recommendations to Purchasing [Office] regarding warehouse inventory stock items,” “Secures additional specification recommendations to Purchasing regarding warehouse inventory stock items.”

Troy Parks’s official job description, by contrast, does not contain a single reference to the purchasing guidelines or the bidding process. According to Ms. Hartman, Mr. Parks was required to work with a Buyer from the Purchasing Office, or someone with equivalent purchasing authority in order to make purchases. The affidavit of Dr. Michael Nivens, the director of Facilities and Business Services, states that “Troy Parks does not have the same kind of purchasing authority as [Ms. Hartman.] [Ms. Hartman] was a purchaser. Mr. Parks is not, and he is not expected to have the same level of knowledge regarding the purchasing policies.” The affidavit of Dr. Claire Stinson, the Vice-President for Finance and Planning, states, “[Troy Parks] is not expected to be familiar with the purchasing guidelines. It was a job requirement that [Ms. Hartman] be familiar with the purchasing guidelines.”

Ms. Hartman does not dispute these facts. Instead she contends the court should not consider the differing levels of responsibility and authority when evaluating whether she is similarly situated to Troy Parks. In essence, she asserts that the only relevant similarity in this case is the fact that both she and Mr. Parks were subject to the same purchasing rules and that they both violated those rules. We find no merit in this argument. It was a job requirement for Ms. Hartman to know and understand the purchasing policies because she had significant discretion in carrying out purchases using public funds. Mr. Parks on the other hand, required supervision when carrying out purchases, often times supervision by Ms. Hartman. He did not fail to fulfill an essential job requirement when he violated the purchasing policy.

          * * *

Moreover, Ms. Hartman’s conduct was different from Mr. Parks’s. Troy Parks voluntarily informed his supervisors about his order before the University was required to pay the supplier. By contrast, Ms. Hartman’s supervisors approached her after the first invoice arrived on the filters, which were custom made and non-refundable. Even at that time, she did not inform her supervisors that the order was not complete, and that a second invoice would be arriving. Ms. Hartman argues that the effects of her actions vis á vis those of Mr. Parks are irrelevant, because the fact remains that they both violated the same rule. Again, we disagree. It is significant that Mr. Parks voluntarily notified his supervisors at a time when the damage could be limited.

The decision is significant because it recognized that job responsibilities as well as differences in conduct may establish that two employees are not similarly situated.