Butler County Court of Appeals Alters Summary Judgment Standard in Employment Discrimination Cases

Last week, a divided Butler County Court of Appeals reversed a car dealership’s summary judgment on claims of discriminatory compensation and public policy wrongful discharge brought by a six-month employee who claimed that she had been fired for reporting COVID and rodent issues to OSHA and who had been not been paid promised bonuses.  Johnson v. Cincy Automall, Inc., 2024-Ohio-5749.  While the Court was unanimous that she could pursue her wrongful discharge claim, a divided court held that the traditional burden shifting used for decades in all employment discrimination cases no longer applied in summary judgment cases.  Rather, the plaintiff as the non-moving party with the admitted ultimate burden of proof was not required to produce evidence supporting her claim or prima facie case until the employer/moving party disproved her allegations with actual evidence of its own in its motion.    In addition, the court's majority held that she could show that she was similarly situated without reference to a comparison of job duties or terms and conditions of employment based solely on her allegation that she had not been paid her earned bonus while male employees (with different jobs and terms and conditions of employment) had been paid their earned bonuses. 

According to the Court’s opinion, the plaintiff had been hired in July 2020 to manage the Facebook page, implement new software and develop sales leads for sales staff.  She was promised a weekly salary and monthly bonuses that were based on developed sales leads.   However, she was never paid any bonus and alleged the owner claimed that he could not afford to pay her, but he did pay the sales people (who were mostly male).  (The dissent notes that the owner apparently admitted that he owed her some unpaid bonuses).   When he ignored her concerns about non-compliance with COVID protocols and mouse feces, she reported her concerns to OSHA on December 15.  She claimed that her computer and FB access was revoked the next day and she was fired a week later.  The dealership denied this and claimed that she voluntarily resigned after being offered a transfer to an administrative position.  OSHA investigated and determined in March that she had not been fired for engaging in protected activities.  She brought suit in May, claiming unspecified sex discrimination and harassment, breach of contract, retaliation, and wrongful discharge in violation of public policy.   The trial court granted summary judgment to the employer on all claims, except notably, the breach of contract.   She appealed and a divided court of appeals reversed dismissal of the claims of discriminatory compensation (i.e., payment of the bonuses) and wrongful discharge.

The trial court dismissed the public policy claims on the basis that there were no clear public policies underlying the employer’s COVID practices and the rodent infestation.   Although the Court unanimously reversed this decision, this same Court had previously upheld the discharge of an HR Director on the grounds that COVID was not a workplace safety issue, but a general public health issue. The plaintiff “contend[ed] that COVID hazards and a mice infestation are matters of workplace health and safety and that an at-will employee who is fired for filing a complaint with OSHA concerning matters of health and safety in the workplace states a valid claim for wrongful discharge in violation of public policy.”  Importantly “she invoked the OSH Act's anti-retaliation provision in 29 U.S.C. 660(c).”   Ohio’s leading Supreme Court case on wrongful discharge claims – Kulch v. Structural Fibers – recognized a claim for retaliation for filing a claim with OSHA.   Other, later cases recognized claims for similar internal complaints. 

It is crucial to emphasize that the threshold for protection under this public policy is not the ultimate validity of the complaint, but rather the employee's good faith belief in its legitimacy. As the Ohio Supreme Court observed in Kulch, to require otherwise would risk deterring employees from reporting genuine health and safety concerns, which would undermine the policy favoring workplace safety.  . . .  This principle also finds support in federal law surrounding one of the main sources of the public policy, 29 U.S.C. 660(c).

The Court distinguished its former public policy/COVID decision on the grounds that the HR Director was not expressing safety concerns, “but rather for disagreeing with her employer's COVID-response protocol. Specifically, she advised an infected employee to quarantine for ten days contrary to her employer's order that the employee return to work.”  At that time, the Court did not view the employee’s objection to the employer’s refusal to honor a quarantine direction as an OSHA retaliation concern, but here, found the employee was expressing safety concerns (which focused on handwashing, sanitizers and unpaid leave for quarantines). 

All this being said, the Court refused to address the employer’s arguments refuting causation and its good reason for any adverse employment because these arguments had not been raised in its trial court motion or addressed by the trial court in its summary judgment decision.   While its review is de novo, it indicated that appellate courts should not address issues not raised by the trial court and, instead, would limit this decision to the scope of the trial court decision.  

A divided Court reversed the pay discrimination dismissal on the grounds that she had been denied bonuses which she had allegedly earned (and was the subject of a pending breach of contract claim), but male sales people were paid their bonuses.    At core, she was claiming that that the only reason she wasn’t paid for the bonuses that she earned was because she was female and the car salespeople (all but one of whom were male) were paid their bonuses because they were mostly male.    However, the Court’s majority criticized the trial court’s description of her claim as being that she was paid less than male employees for the same work when she held an administrative position and they were sales employees.  As far as the majority is concerned, she stated a discrimination claim when she compared the fact that she was not paid her earned bonus when male employees were paid their earned bonus, even if the terms of their bonus arrangements were based on different metrics and conditions.

 This question cuts to the heart of the "similarly situated" analysis, which requires us to determine whether the male comparators were similar "in all relevant respects."  . . .

 {¶ 39} It is imperative to note that there is no rigid, predetermined list of factors that must be considered in making this determination. As the Sixth Circuit aptly noted, a court must make an "independent determination as to the relevancy of a particular aspect of the plaintiff's employment status and that of the non-protected employee" based on the facts of the case.  . . .  This aligns with the Ohio Supreme Court's case law on this issue, which recognizes that "what is relevant depends on the case."

 . . .. In the present case, the minutiae of duties, job titles, or the particulars of bonus structures are of little consequence. What matters is the simple fact of entitlement to a bonus and payment—or lack thereof.

 . . . . .

[The employer] argues that [the plaintiff] cannot be similarly situated to male employees because she managed the Business Development Center while they worked in sales. But this misapprehends the nature of the similarly situated analysis. The question is not whether employees share identical job duties across the board in the abstract, but whether they are similarly situated in the specific context that forms the basis of the discrimination claim. . . . Here, [she] alleges discrimination in the payment of contractually-promised bonuses. The relevant comparison, therefore, is whether male employees who were contractually entitled to bonus payments received them while [she] did not. [The employer] offers no explanation for why the difference between management and sales positions matters for purposes of honoring contractual bonus obligations. In the absence of evidence demonstrating the relevance of this distinction to bonus payment practices, [the employer] has failed to meet its initial burden on summary judgment to show that no genuine issue of material fact exists regarding whether [she] was similarly situated to male employees who received their bonuses.

 . . . . [Her] compensation agreement, her complaint, her deposition testimony, and [the employer’s] answers to interrogatories collectively indicate that [she] and the men were entitled to bonus payments, that the men were paid, and that women (with one exception) were not paid.

In addition, the Court’s majority then ignored traditional burdens of proof in employment discrimination cases.  It faulted the employer for merely pointing out that the plaintiff had failed to sustain her burden of proving discrimination instead of producing its own independent evidence as the moving party.  Apparently, the employer had pointed out in its motion that the plaintiff did not produce any evidence, such as pay stubs, etc. and asserted that she had been an administrative assistant for months (thus, not entitled to any bonus).  Rather, Court’s majority contended that the employer “needed to point to evidence that, for example, the men were not entitled to payment or were not paid.”

The dissent pointed out that the employer in a discrimination case is not required to prove the absence of discrimination until the plaintiff produces enough evidence to show that she was treated differently.    However, the Court’s majority concluded: “This failure to discharge its initial burden is fatal to [the employer’s] motion for summary judgment on the sex discrimination claim.  It remains to be seen whether this case will be appealed to the Ohio Supreme Court based simply on the Court’s mysterious and inexplicable alteration of the burdens of proof in discrimination cases:

{¶ 45} It is crucial to emphasize that at this stage of the proceedings, the ultimate burden of persuasion has not yet shifted to [the plaintiff]. While she retains the ultimate burden of persuading the trier of fact that [the employer] intentionally discriminated against her,  that burden is not yet operative in the context of summary judgment.

The dissent identified a lot of problems with the majority decision.  First, the plaintiff’s complaint and the summary judgment briefs barely mention, let alone discuss, wage discrimination.  Rather, the motion focused on her allegation that she had been terminated (which the employer denied) and contended that she had resigned after refusing a transfer.  The plaintiff’s response to the motion likewise focused on the termination allegation, but also identified evidence that certain men were paid the bonuses that they earned and that the employer engaged in a lot of allegedly sexist conduct.  Nonetheless, the trial court addressed wage discrimination in his decision, concluded that she had suffered an adverse employment action, but could not show that she was treated differently by being paid less for the same work since her work was not the same.   He also noted that she had admitted in her deposition that she had never reviewed actual payroll records to support her allegations.  

In other words, [her] sex discrimination claim is not an equal pay claim—sometimes called a wage discrimination or pay discrimination claim—but is instead a sex discrimination claim that, as a factual matter, relates to [the employer’s] alleged failure to pay certain compensation (bonuses) that [she] alleges were owed to her.  [She] only alleges that [her employer] has discriminated against her in failing to pay bonuses, not in the terms of her bonus plan. There is therefore no need to examine equal pay statutes . . .

Second, the dissent took exception to the majority’s evaluation of who is similarly situated:

Speaking generally, the simple fact that some employees are entitled to a bonus and a plaintiff is not paid a bonus, by itself, does not establish that those employees are similarly situated to the plaintiff. Is it the same bonus? For doing the same work? Who decides who gets paid the bonus? Do the employees have the same bonus plan? Did the plaintiff and the other employees differ in their compliance with the terms of the bonus plan? At least some commonality must be established—the same or a similar job, the same pay plan, the same supervisor, etc.

The dissent then pointed out that the plaintiff had a very different job from the men to whom she was comparing herself.   She did not and could not produce any evidence that the men’s bonus plan was similar to her bonus agreement.

Finally, the dissent pointed out that for decades the plaintiff has been required in opposing a summary judgment to produce or identify evidence to support her burden of proof, but in this case, the majority was faulting the employer for not producing evidence to dispute the plaintiff’s burden. 

Next, the majority states that "[the employer] needed to point to evidence that, for example, the men were not entitled to payment or were not paid." In making this statement, the majority seems to imply that a court faced with a summary judgment motion must assume that employees identified as similarly situated by a plaintiff are in fact similarly situated, and that the burden is on the employer (the moving party) to disprove that the employees are similarly situated. I am aware of no case law supporting the majority's view of what McDonnell Douglas requires.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.