June 1, 2003
Avoiding Lawsuits is a service of the employment law training and consulting firm of Counsel Consulting Group LLC and the law firm of Powell, Trachtman, Logan, Carrle & Lombardo, P.C.
Alert:
Very Bad News For Employers-
The Supreme Court Lays Out The Red Carpet
For Employee Discrimination Lawsuits
Employers Must Alter Practices and Policies NOW!
You thought it was hard before? Last week, it just got immensely harder. If you thought preventive training and planning was an interesting luxury you could afford to put off, guess again.
Consider this situation, one of the most common faced by employers. One of your employees does something wrong, something that merits a serious response - messes up a job, ignores a management directive, becomes an absentee problem, shows up inebriated, steals something, sexually harasses a fellow employee, whatever. You respond in accordance with your (hopefully) established, written policies. Depending on the seriousness of the situation, that might entail anything from a written warning to termination.
As it turns out, the employee is among those the law seeks to protect from discrimination - perhaps the employee is a minority, is over 40, or has a disability. The employee claims that your real motive for imposing the discipline had nothing to do with job foul-ups, but was really motivated by the fact that the employee is (a racial minority) (a woman) (older) (disabled) (whatever). The job foul-up, says the employee, was just a convenient excuse, a pretense on which to unlawfully discriminate.
This problem has been around for a long time, and is typically referred to as a "mixed motive" case: you had one theoretical motive to discipline the employee that was lawful; but you also had another theoretical motive that was unlawful. How do you prove you acted based on the lawful motive? How might the employee prove you acted for the wrong motive?
Congress entered this fray via the Civil Rights Act of 1991. Congress said that an employee can win the "mixed motive" battle merely by proving that the employee's race, gender, nationality, disability or some other unlawful basis for discrimination was, in fact, one of the employer's motives, even if the employer also had other, lawful motives.
That legislation opened a huge door for employees to sue their employers. But here was the rub: how could an employee (or, for that matter, a judge or jury) get into a manager's mind, and prove why the manager did what he or she did? How could they show that, in fact, the employer was influenced by, among others, an unlawful motive?
Here are the alternatives:
- One way the employee might do it is through what the law calls "direct evidence." For instance, someone overheard you saying something incriminatory, or there is an email that proves you were biased against the employee's race or gender. As you might imagine, most employers are not so careless as to create this kind of "smoking gun" trail. They know enough to know that discrimination of this type is unlawful, and if they are going to do it, they will usually bury the evidence.
- That being the case, employees have long sought the right to prove employer motive through what the law calls "circumstantial evidence." For instance, perhaps the employee is Hispanic, and every other time you hired an Hispanic person, they ended up getting terminated under less than clear circumstances. Or perhaps the employee is a woman, and you've been sued before for discriminating against other women. If it looks like a duck, and if it walks like a duck, and if it quacks like a duck....
Some courts have allowed employees to use purely circumstantial evidence to prove their position in a mixed motive case. How else, they asked, could employees who have been unlawfully discriminated against overcome the obvious cover-ups of employers prone to unlawful discrimination?
This set up a nightmarish situation for employers. Picture yourself in court. You know why you did what you did. You testify, under oath and subject to perjury penalties. You tell the absolute truth. You testify that an employee who is suing your company was fired for chronic absenteeism, not because the employee is a minority. The employee has no real proof that you fired him because of his race, or for any other reason than his absenteeism. But, on cross examination, you are forced to admit that, three years previously, there was another employee with a similar absentee problem. One of your managers mishandled things, and let an employee he felt sorry for off the hook when he shouldn't have. That employee was white, and instead of getting fired, he just got warned.
Now there is circumstantial evidence against you ... it looks like your company discriminates against minorities, even though you do not. Should that kind of proof be enough to allow the employee to take you to the cleaners?
The Supreme Court Speaks, And Everything Changes
Catharina Costa was the only female warehouse worker and forklift operator at Caesar's Palace Hotel & Casino in Las Vegas. She had a spotty disciplinary record, and was ultimately fired after getting into a physical altercation with a male co-worker - but the male co-worked received only a 5-day suspension. She sued, claiming she was fired because of her gender. At her trial, she introduced nothing but circumstantial evidence - the male got more lenient treatment, she said her supervisors had in the past singled her out for adverse treatment, they tolerated sex-based slurs, and so on.
Costa had no direct evidence of any kind indicating that she was fired for any reason other than her proven misconduct. Over Caesar's strident objections, the court allowed Costa's case to proceed anyway, based only on her circumstantial evidence - and a jury awarded her $364,000.
Eventually, Costa's case made it all the way to the United States Supreme Court. The Bush administration, along with many of the most prestigious business groups in the country, weighed in against Costa with erudite briefs urging that the Court require that employees like Costa be made to prove their cases with direct evidence, not just circumstantial suspicions.
The Supreme Court ruled in Costa's favor - NINE TO NOTHING.
The message could not be more clear: employees can now label you as a lawbreaker without the slightest direct evidence. It is almost as if you can be convicted of speeding on Route 95, not because anyone actually saw you speeding, but because you were caught speeding in the past on Route 95, or once talked about how you like to drive fast on Route 95. It is difficult to express how truly significant this decision is. Consider:
- When you discipline a protected employee for a particular offense, be prepared to have your history of enforcement respecting that offense scrutinized to see if one of your managers let some non-minority or non-disabled or younger employee off with a lesser penalty at some point in the past. Letting someone off the hook for a good reason, if not plainly documented and justified, could easily lead to the circumstantial argument that you unlawfully discriminated;
- Every time one of your managers promotes a non-disabled employee or male employee over a disabled or female employee, for instance, be prepared to have their respective employment files scrutinized microscopically to determine if there was verifiable justification for the action. If they both have vanilla evaluations and there is nothing objective to distinguish one from the other, be prepared for the circumstantial argument that disability or gender was really what motivated your company;
- Every time you hire a white male over a minority female, be prepared to have your company's management emails scrutinized for racial jokes, be prepared for witnesses who testify on the "private" sexual innuendo exchanged in the men's room, and be prepared for a statistical analysis of your historical record of hiring minority females.
We are not here to determine if this is good or bad. There is discrimination, still, in American workplaces, and employees subjected to such practices have very tough rows to hoe in proving their cases.
Our message is this: if you are an employer who takes pains not to unlawfully discriminate, you will still incur a substantial risk of being held liable for unlawful discrimination if you do not take action now.
The Only Solution
It is not enough that the top executives and the HR professionals know the risks and remedies that will now dominate American workplaces. The word must get to the managers in the field - the people who routinely deal with the Costas of the world, and make the decisions that lead to the liabilities. Employers will now be judged by what seems to be true, not necessarily what is really true, and it is the field managers, not the top executives and HR people, who create the evidence that matters. Appearances will now trump reality.
Are your managers trained uniformly? Do some act one way, and others another way, in respect to hiring, evaluation, promotion ... thereby creating unintentional inconsistencies that will look like discrimination when played out in a court room?
Are your managers trained in the nuances of avoiding the appearance of discrimination in the way they treat employees? Do they, like many, unwittingly treat men differently than women or older workers differently than younger workers or disabled workers differently than those without disabilities (even if just for the purpose of being what they think is polite)?
Are your managers trained in the art of keeping files so they can prove that an individual was promoted or disciplined or terminated on the basis of merit, not race or gender or age? How will they, and your files, stand up under cross examination?
Do you have the proper procedures and forms in place that create and enforce the kind of uniform, compliant employee treatment that minimizes the creation of adverse circumstantial evidence? Are your managers trained in their use and application?
The effects of the Costa decision will play out for many years, maybe decades. This is serious stuff. The balance has tilted dramatically, and you better get prepared.
Over the last several months, we have been putting together an expanded business compliance/lawsuit prevention consulting and training firm to assist our clients in the prevention of employment and HR-related liabilities. We have been providing services of this nature for some time, through the Powell Trachtman law firm, and through Powell Trachtman Training and Consulting, LLC, but saw the need to increase the scope of our services and capabilities - even before the Costa decision, which shocked the most jaded legal analysts, hit the docket.
Powell, Trachtman, Logan, Carrle & Lombardo, P.C. is a full service law firm with offices in suburban Philadelphia, PA, Harrisburg, PA and Cherry Hill, NJ. Powell Trachtman represents a variety of commercial enterprises, entrepreneurs and business executives in respect to their litigation, litigation avoidance planning, business formation, business transactions, estate and tax planning, and other needs. We are also approved defense counsel for numerous insurance carriers in matters pertaining to professional malpractice, products liability, employment practices, directors and officers liability, and many other fields. For more information, contact us at info@powelltrachtman.com and visit our website at www.powelltrachtman.com.
